WARNE v MOSS & ORS

By statement of claim filed on 4 June 2002 the plaintiff seeks damages for defamation arising from the publication, on or about 22 April 2002, of the matter appended hereto as appendix A.

The present application concerns a proposed amended statement of claim and various aspects of it.

The imputations set out in paragraph 4 of the proposed pleading are: 4(a) In order to try to hide his own inefficient management, the Plaintiff accused the Second Defendant of criminal conduct when the Plaintiff was aware that there was no substance to the said accusations. (b) Based on unsubstantiated rumours, the Plaintiff recklessly accused the Second Defendant of criminal conduct. (c) As General Manager of Murray Irrigation Ltd the Plaintiff deceived the shareholders of Murray Irrigation Ltd. (d) The Plaintiff was incompetent as the General Manager of Murray Irrigation Ltd. (e) The Plaintiff as General Manager of Murray Irrigation Ltd performed his duties so incompetently that he does not deserve to remain in his job. (f) The Plaintiff seriously mismanaged his duties as General Manager of Murray Irrigation Ltd in that he was responsible for mass resignations of that company’s employees to its detriment. There is no dispute as to imputation 4(c).

A preliminary matter arises from paragraph 1 of the proposed amended statement of claim. It is in the following terms: 1. The Plaintiff is and at all material times was the General Manager of Murray Irrigation Limited, a company limited by shares providing water and related services in the Riverina region of New South Wales and Victoria.

It is conceded by the plaintiff that what is there averred is not relevant to meaning. It is argued for the defendants to be an immaterial averment and notwithstanding the absence of prejudice it should be deleted. I agree. The amended statement of claim when filed should not include the immaterial averments presently pleaded in paragraph 1.

I turn to the submissions in relation to the imputations.

As to imputation (a), the defendants argued that it is insufficiently specific, rolled up, and generally the matter complained of is not reasonably capable of carrying it. Whilst it is correct, in a fine way, to divide the imputation into the following concepts (i) to hide his own insufficient management, (ii) accusing the second defendant of criminal conduct, (iii) the plaintiff was aware that there was no substance to the said accusations, it does not necessarily follow that the imputation is “rolled up” or is otherwise defective in form. The imputation, as drawn, points to the act of making the accusations, the purpose of so doing, (to conceal his own mismanagement) and the state of mind, vis-à-vis the accusations held by the plaintiff at the time of making them. I do not see anything logically embarrassing by the combination of these three elements in one meaning. There can be no question on a reading of the matter complained of that the plaintiff could be understood to be a member of the “Executive of 4” referred to in line 19. The reference in line 20 to “failing to substantiate false allegations” goes further than being warned in relation to what are described as “scrupulous charges (sic)” in line 11. The first mentioned part of the matter complained of elevates the whole of the above questions of being “warned” and “unsubstantiated rumours” to the point that it can be said on a capacity basis that the publication could be understood as asserting that the plaintiff was “aware” , that is, consciously knew that the allegations were without substance. Accordingly I hold that imputation 4(a) is proper in form, is capable of being carried by the matter complained of and is capable of being defamatory.

As to imputation (b): the principle submission relates to the use of the word “recklessly” , and that submission is founded in considerations of the available legal meanings of that word. What we are really concerned with is the ordinary meaning and whether or not the reader could understand the press release as carrying it. In my view, with respect to the pleader, imputation (b) is somewhat inelegantly phrased: perhaps the words “acting on” or “relying on” could be substituted for “based on” . The notion of “recklessly” in its ordinary meaning could be understood, however, as arising from the matter complained of especially by reference to “being warned” , the reference to “unsubstantiated rumours” itself, and the curious use of the word “scrupulous” which could only be understood as “unscrupulous” ; a reader who would take that word literally as printed, would not be “reasonable” . I find imputation (b) to be proper in form, capable of being carried by the matter complained of and capable of being defamatory.

As stated above, there is no dispute in relation to imputation (c).

Imputation (d) is not discretely challenged. The argument for the defendants is that it does not differ in substance from imputations (e) and (f), imputation (e) especially being said to be wanting in specificity and rhetorical.

I am of the view that there is a difference between imputations (d) and (f). That is clear in the face of the words of each. I am persuaded, on a capacity basis, that the notion of responsibility for mass resignations is available particularly from lines 37- 41. I am not however persuaded that imputation (e) adds anything: it is really a rhetorical flourish to what is pleaded in imputation (d) and thus is bad in form. I add that I am not persuaded that there is any want of specificity merely by the use of the words “responsible for” in imputation 4(f).

Accordingly I find the matter complained of capable of carrying imputations (d) and (f) each of which is proper in form and each of which is capable of being defamatory.

I strike out imputation 4(e) as not differing in substance from 4(d) by reason if it being rhetorical.

The next matter in dispute relates to paragraph 7 of the proposed amended statement of claim which is in the following terms: 7. As a natural and probable consequence of the publication of the matter complained of by the Defendants, and/or as the Defendants intended, the said matter was substantially republished in the Koondrook and Barham Bridge newspaper, a newspaper published in NSW and Victoria on and from 26 April 2002. The Plaintiff relies upon the said republication as going to damages.

The complaint made by the defendants is that this paragraph does not properly plead republication. Further, it fails to take into account the effect of the decision of the High Court in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 and its effect upon observations made by Hunt J in Sims v Wran [1984] 1 NSWLR 317 at 320-321. The plaintiff purports to limit reliance upon “republication” in Victoria on the question of damages. Assuming the “republication” properly to have been pleaded, it is the current state of the law that the defendants would be entitled to meet that “reliance” by substantively defending the republication in that State. However, one threshold difficulty that confronts the defendants here, and the plaintiff in terms of pleading, is the incorporation of the word “substantially” . Not only does it create a problem in relation to whom precisely it is contended should be liable for the republication, that is, which of the defendants played a substantial part in the republication, but, more to the point, it does not clarify that which was in fact republished. The use of the word “substantially” in these circumstances is clearly embarrassing.

If it appears to be the position, as it presently does, that the defendants would be entitled substantively to defend that which was republished in Victoria, the defendants are entitled to know what it is precisely which was republished and to have precisely formulated allegation as against them in terms of establishing liability therefor, even if the plaintiff purports only to limit that republication to the question of damages. Had paragraph 7 been pleaded in a pleading on the court file it would be struck out.

The final two matters relate to the claim for aggravated damages in the particulars provided pursuant to SCR Pt 16 r 5(b).

The two particulars that are presently causing concern are particulars: (ii) The Defendants’ failure prior to publication to make any enquiries of the Plaintiff in circumstances where the nature of the material was such that it should have been checked with the Plaintiff prior to publication; and (iii): (iii) The sensational text and unfair and extravagant presentation of the matter complained of indicating an intent to injure the Plaintiff.

There is support for the general areas of complaint purported to be embraced by the particulars in Andrews & Anor v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 at 264 and Waterhouse v Broadcasting Station 2GB Pty Ltd [1985] 1 NSWLR 58 at 76.

If the defendants request further and better particulars of the facts, matters and circumstances upon which reliance is placed by the plaintiff and further particularisation of items (ii) and (iii) to the effect that the defendants’ conduct was improper, unjustifiable and lacking in good faith, any such reply might further expose either the strength or weakness in the plaintiff’s claim. There is sufficient to permit the particulars to remain on the record. However, further evolution may provoke an appropriate dispute. It is not immediately necessary of course, in my view, otherwise for the matter to be resolve prior to a s7A trial.

A dispute evolved in relation to an order for costs dependant upon the outcome. The plaintiff has failed in respect of one imputation only and in relation to the purported proposed pleading in relation to republication. It seems to me that the appropriate result is first, that the plaintiff be granted leave to file an amended statement of claim in accordance with these reasons and to pay the defendants’ costs occasioned by the amendment. Otherwise the motion argued before me should result in an order that each party pay its own costs in relation thereto.

The orders are: 1. The plaintiff has leave to file an amended statement of claim within 14 days in accordance with these reasons. 2. The plaintiff is to pay the defendants’ costs occasioned by the amendments. 3. Each side is to pay his and their own costs of the notional motion heard on 6 November 2002. 4. The matter is to be listed in the Registrar’s Defamation Directions List on Friday 2 May 2003. Appendix A 1. MEDIA RELEASE 2. MIL’S Corporate Governance 3. in tatters 4. The Senior Manager of Murray Irrigation Ltd Mr Tony Balsdon had a major 5. Victory in the Local Court at Deniliquin on 19th April 2002. The Prosecutor’s 6. submission to the Court was that the Crown wished to withdraw the charges 7. against the Defendants, and no evidence would be submitted. The Magistrate 8. ordered that the charges be withdrawn and the case dismissed. 9. Mr Geoffrey Moss, a spokesman for Tareran Pty Ltd, the appointed Case 10. Managers for Mr Balsdon, said, “Our client now has finality to these 11. scrupulous charges set up by the Management of MIL, despite the General 12. Manager, Mr George Warne, being warned in November 2001, not to press 13. charges against the defendants on unsubstantiated rumours”. 14. “It appears to us that Mr Warne must have lost the ‘balance of judgment’ 15. against his senior manager. It is clear to us from MIL correspondence 16. received in this matter, that the Shareholders have been deceived, and time 17. will tell whether the General Manager, and the Chairman of MIL, Mr Bill 18. Heatherington, will still have the shareholder’s support” said Mr Moss. 19. We have learned that the ‘Executive of 4’ involved in managing MIL daily 20. business have failed to substantiate their false allegations made against Mr 21. Balsdon, indeed it would appear they were trying to cover up their own 22. inefficiencies. 23. Certainly, in response to the MIL’s Chairman’s statement on 4 January 2002, 24. that the charges were raised at the AGM, now allows Shareholders to be 25. aware of the high cost to this mess in the ‘Executive of 4’ attempt to discredit 26. a 32 year long serving senior manager within the local community without 27. balanced justification. 28. This is a clear victory for Mr Balsdon an “Innocent Victim of Injustice”, after 29. facing criminal charges form false allegations dubiously sponsored by the 30. ‘Executive of 4’, by allowing the process of Justice to serve its purpose by 31. dismissing the case, especially when the trial lasted only 3 minutes, said Mr 32. Moss. 33. One has to consider the high cost to staff morale at MIL. The mass exodus of 34. staff who have resigned from MIL since the defendants were charged, and 35. the urgent need to review the corporate governance of MIL, considering all 36. the other water shortage problems facing the farmers in the region. 37. It was obvious to us from the start of this investigation that the MIL Board of 38. Directors were treated like ‘mushrooms’ in just the same manner as the 39. ‘Executive of 4’ treated Mr Balsdon, and other staff who were forced to 40. terminate their services with the company based on unfounded allegations 41. derived from external sources of the company. 42. Mr Balsdon and his family are extremely grateful to their friends, and work 43. colleagues (although ordered not to communicate with Balsdon), and many 44. other unknown people from the community for their support during these 45. harrowing days, said Mr Moss, today from Melbourne. 46. Mr Balsdon said, “This has been a torrid, and dreadful saga to 32 years of 47. loyal service, especially when the source of allegations were based on false 48. rumours, and I now look forward to the Industrial Court hearing in May, 49. which will decide whether I was dismissed unfairly from MIL”. 50. For further information: 51. Tony Balsdon Tel: 03 5881 3517 52. Case Managers: 53. Authorised by: 54. Tareran Pty Ltd, Mrs Angela Baxter, Managing Director 55. – 0417 537 434 56. Geoffrey Moss, Spokesman, Tel: 050 050 7771 Fax: 050 050 7772