AIFME '97 Pty Limited v Norley Pty Limited

[1999] NSWCA 259

CITATION:	AIFME '97 PTY LIMITED v NORLEY PTY LIMITED & ANOR [1999] NSWCA 259
FILE NUMBER(S):	CA 40241/98
HEARING DATE(S):	30 June 1999
JUDGMENT DATE:	13 August 1999
PARTIES :	AIFME '97 Pty Limited - Appellant Norley Pty Limited and Peter Eugene Levy - Respondents
JUDGMENT OF:	Meagher JA at 1; Sheller JA at 2; Stein JA at 22

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	21340/96
LOWER COURT JUDICIAL OFFICER:	Levine J

COUNSEL:	R K Weaver - Appellant J S Wheelhouse - Respondents
SOLICITORS:	McCabes - Appellant Lakos & Company - Respondents
CATCHWORDS:	DEFAMATION - whether statement of claim disclosed reasonable cause of action - whether incorrect name but correct ACN sufficient identification
ACTS CITED:	Defamation Act 1974 Corporations Law Supreme Court Rules
CASES CITED:	Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86 Cross v Denley (1952) 52 SR (NSW) 112 Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 Love v Mirror Newspapers Ltd (1980) 2 NSWLR 112 Bik v Mirror Newspapers (1979) 2 NSWLR 679
DECISION:	Appeal allowed

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40241/98
CL 21340/96

MEAGHER JA
SHELLER JA
STEIN JA

AIFME ’97 PTY LIMITED v NORLEY PTY LIMITED & ANOR

The appellant appealed from two decisions of the trial Judge in an action for defamation. In the first decision the trial Judge struck out paragraph 5 of the appellant’s second amended statement of claim on the basis that no reasonable cause of action was disclosed. In the second decision the trial Judge refused leave to file a third amended statement of claim.

In the proceedings below the appellant alleged that either the first or second respondent, or both, published a defamatory article in the Australian Farmers & Dealers Journal. The article referred to a company named AIFME Brisbane ’96 Pty Ltd ACN 069 197 360. The appellant company was named AIFME ’97 Pty Ltd ACN 069 197 360. Accordingly, the last paragraph of the allegedly defamatory material did not describe the appellant accurately by name but did accurately set out its ACN number. This discrepancy led the trial Judge to strike out paragraph 5 of the appellant’s second amended statement of claim.
Held:
By Sheller JA, Meagher and Stein JJA agreeing:
(1) The Corporations Law requires the Australian Investments and Securities Commission to allot each company, upon registration, a distinct registration number. If ACN 069 197 360 was the ACN number of the plaintiff, as the title to the proceedings suggested, it could refer to no other corporate body or person other than the appellant. Reference to the number is a way of identifying a corporate entity and a jury might conclude that it would only have been used by the publisher of the article to make that identification certain. The ACN is a virtual branding of a corporate entity upon its incorporation. This being so it is wrong to say that paragraph 5 disclosed no reasonable cause of action. The matter complained of was reasonably capable of carrying the imputation pleaded by the appellant.
(2) The trial Judge’s decision to refuse leave to file a third amended statement of claim because it constituted an attempt to re-litigate or have the court decide again the very issue decided when his Honour struck out paragraph 5 of the appellant’s second amended statement of claim must be set aside as the ratio upon which it is based is no longer present.
Statutes

Corporations Law
Defamation Act 1974
Supreme Court Rules

Cases

Barbaro v Amalgamated Television Services Pty Limited (1985) 1 NSWLR 30
Bik v Mirror Newspapers (1979) 2 NSWLR 679
Consolidated Trust Co Limited v Browne (1948) 49 SR (NSW) 86
Cross v Denley (1952) 52 SR (NSW) 112
Love v Mirror Newspapers Limited (1980) 2 NSWLR 112

ORDERS

1. Appeal allowed;
2. Set aside orders 1 and 2 of Levine J made on 8 August 1997;
3. In lieu thereof strike out only para 5 (d) and (f) to the intent that para 5 (a), (b), (c), (g), (h) and (i) stand as pleaded;
4. The defendant’s to pay the plaintiff’s costs of that motion;
5. Set aside the orders made by Levine J on 20 February 1998;
6. Remit the application to the Common Law Division to be re-considered;
7. The respondents to pay the appellant’s costs of this appeal.

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THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40241/98
CL 21340/96

MEAGHER JA
SHELLER JA
STEIN JA

Friday, 13 August 1999

AIFME ’97 PTY LIMITED v NORLEY PTY LIMITED & ANOR

JUDGMENT

1    MEAGHER JA: I agree with Sheller JA.

2    SHELLER JA: The appellant, AIFME ’97 Pty Limited, the plaintiff below, has appealed by leave from part of a decision given by Levine J on 8 August 1997 and a further decision given by his Honour on 20 February 1998. In the earlier decision Levine J struck out para 5 of the plaintiff’s second amended statement of claim on the basis that no reasonable cause of action was disclosed. This appeal concerns only para 5 (a), (b), (c), (g), (h) and (i). The striking out of the remaining sub-paragraphs is not challenged. In the later decision Levine J refused leave to the plaintiff to file a third amended statement of claim and ordered the plaintiff to pay the defendant’s costs of the application.

3    The appellant brought the proceedings in the Common Law Division against the respondents, Norley Pty Limited and Peter Eugene Levy, for damages for defamation. According to the second amended statement of claim the plaintiff relied, inter alia, upon the following publication which it alleged either the first or second defendant, or both, published “of and concerning the plaintiff”:

“TAKE NOTICE that NORLEY PTY LTD (t/as Australian Farmers & Dealers Journal) obtained judgements against Australian International Farm Machinery Exhibition ACN 001 865 300 (AIFME) in the Country [sic] Court of Victoria at Melbourne on May 15, 1995 for $80,399.05 and on July 11, 1995 for $907.20. Interest on both orders continues to accrue at the rate of 13.2% per annum until the judgement debts are repaid in full.
Further, Norley Pty Ltd obtained a judgement against AIFME in the Magistrates’ Court of Victoria at Melbourne on April 19 1995 for $20,838.95 and interest continues to accrue on the judgment debt at the rate of 13.2% per annum until repaid in full.
NOT ONE CENT HAS BEEN PAID BY AIFME TO NORLEY.
The two directors and shareholders of AIFME at all material times were Adam John Sparrow and John Brian Kingston. The principal business office of AIFME was 3 Cosgrove Road, Enfield, NSW. Its principal activity was stated to be ‘exhibitions and promotions’.
Norley Pty Ltd believes that a named AIFME Brisbane ’96 Pty Ltd (ACN 069 197 360) was registered on April 27, 1995 and has its registered office and principal place of business at 3 Cosgrove Road, Enfield. Its principal activity is stated to be ‘exhibition organisers’.
Norley Pty Ltd is unable to advise its readers whether or not there is any other connection or association between AIFME and AIFME Brisbane ’96 Pty Ltd.”

4    This material appeared as an article in the November 1996 edition of the Australian Farmers & Dealers Journal. In para 5 of the statement of claim the plaintiff pleaded that in its natural meaning and/or by virtue of certain extrinsic facts the matter complained of conveyed the following imputations each of which was defamatory of the plaintiff:

“(a) the plaintiff is insolvent;
(b) the plaintiff fails to pay its debts;
(c) the plaintiff is not worthy of credit;
(g) the plaintiff has been adjudged to owe Norley money;
(h) the plaintiff refused to pay Norley the money it owes it;
(i) the plaintiff refuses to comply with Court orders.”

5    The extrinsic facts pleaded were:

“(a) the plaintiff is an exhibition promoter;
(b) the plaintiff is the only promoter of the AIFME Brisbane ’97.”

6    In the heading of the statement of claim the plaintiff was described as “AIFME ’97 Pty Ltd (ACN 069 197 360)”. It follows that although the second last paragraph of the allegedly defamatory material accurately sets out its ACN number, it does not describe the plaintiff accurately by name. This discrepancy led Levine J, in his decision of 8 August 1997 on the application of the defendants, to strike out para 5.

7    In Consolidated Trust Co Limited v Browne (1948) 49 SR (NSW) 86 at 89 Jordan CJ said:

“If the matter complained of is ex facie defamatory and refers by name to the person defamed, it is necessary only that it was published, and publication to one person is enough. It is unnecessary to prove that the person to whom it was published had any knowledge of the person defamed, or that the matter complained of led him to think the less of that person. If, however, the matter complained of is not ex facie defamatory, or does not refer by name to the person alleged to be defamed, and the defamatory character which is attributed to the matter, or the identity of the person defamed, would be apparent only to persons who had knowledge of special circumstances, it is necessary, in order to prove publication, to prove that it was published to a person or persons who had knowledge of those circumstances.”

8    In Cross v Denley (1952) 52 SR (NSW) 112 at 116 Owen J, in a judgment with which Street CJ and Herron J agreed, said:

“Where a defamatory statement refers to a plaintiff by name or, without mentioning him by name, describes him in such a way that the man in the street reading or hearing it would know to whom it referred - as for example where without mentioning names the statement is defamatory of a person who is described as the holder of a particular office - and it is a matter of general notoriety who the holder of that office is - evidence that some one or more persons who read or heard the statement understood it as referring to the plaintiff is unnecessary. But where, as here, the plaintiff could only be identified by that small percentage of the community which happened to know that he was a printer using the imprint ‘X-press Printery’, it must be shown that some one or more of those to whom the pamphlet was published had that special knowledge.”

See also Barbaro v Amalgamated Television Services Pty Limited (1985) 1 NSWLR 30 at 35G and 54B.

9 Section 7A of the Defamation Act 1974 provides, inter alia, (1) that in proceedings for defamation tried before a jury, the Court and not the jury is to determine whether the matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff, (2) that if the Court determines that the matter is not reasonably capable of carrying the imputation pleaded by the plaintiff the Court is to enter a verdict for the defendant in relation to the imputation pleaded and (3) that if the Court determines the matter is reasonably capable of carrying the imputation pleaded by the plaintiff the jury is to determine whether the matter complained of carries the imputation. On this application there was no question about whether the imputation was reasonably capable of bearing a defamatory meaning, a question which is also dealt with in those three subsections.

10    In his reasons for judgment Levine J said that he had little difficulty “subject to the nub of the defendants’ contention in coming to the conclusion that the matter complained of is capable of conveying imputations in terms of (a), (b), (c), (g), (h) and (i)”. His Honour stated that the nub of the defendants’ contention was that “the plaintiff in this action is ‘AIFME ’97 Pty Limited ACN 069 197 360’ to which there is no reference at all in the matter complained of”. With due respect this is not correct.

11 In the form it took in November 1996, s120 in Pt 2.2 of the Corporations Law required the Australian Securities Commission (now the Australian Securities & Investments Commission), when registering a company, to allot to it a registration number distinct from the registration number of each body corporate already registered under Pt 2.2. If ACN 069 197 360 was the ACN number of the plaintiff as the title to the proceedings suggested, it could refer to no corporate body or person other than the plaintiff; see generally s219 of the Corporations Law. Reference to the number was a way of identifying a corporate entity and a jury might conclude that it would only have been used by the publisher of the article to make that identification certain. Levine J observed correctly that the ACN number was virtually a “branding” of a corporate entity upon its incorporation under the Corporations Law. This being so, it seems to me, with the greatest respect, wrong to say that para 5 disclosed no reasonable cause of action. The matter complained of was reasonably capable of carrying the imputation pleaded by the plaintiff.

12    As part of its case the plaintiff may have to prove that the material complained of was published to a person or persons who would be able to identify the plaintiff by its ACN.

13    Levine J said that Mr Neil QC, who appeared for the plaintiff, took an approach which on its face was clearly available. That was, that as a matter of “commonsense” the ordinary reasonable reader would not be concerned with technical refinements of ACN numbers or even a “year label” but rather with the repetition of the letters “AIFME”. The ordinary reasonable reader would not be concerned to discriminate but rather would focus upon the letters “AIFME” and in some way identify that as the relevant entity. His Honour said:

“This argument of course, has its attractions but I have come to the view that it is simply not available in the formal context of the structure of the Second Amended Statement of Claim and its pleading of both natural and ordinary meanings and the true innuendos said to arise from Schedule A, the first matter complained of.
The entity that has sued is the corporation AIFME ’97 Pty Limited ACN 069 197 360 ; that is the entity which asserts its reputation was damaged by the publication complained of and relies upon the causes of action pleaded in the form of the imputations.
Returning to the imputation set out above and bearing in mind the terms of the matter complained of imputations (a), (b) (f), (g), (h) and (i) cannot be carried by the matter complained of, of and concerning this plaintiff. The article points to another entity against whom judgments have been obtained by the defendants, which judgments have not been paid. In relation to the entity described in the matter complained of as AIFME Brisbane ’96 Pty Limited which happens to have the same ACN number as the plaintiff, the pleading, in my view, discloses no cause of action. The matter complained of is incapable on any rational basis of asserting anything about this particular plaintiff’s ‘solvency’ though is capable of asserting quite a lot of things about the company against whom the judgments were obtained. It is however a different entity which, strictly, has its own reputation.”

14    I have difficulty in understanding what Levine J meant here. It is quite true that Australian International Farm Machinery Exhibition ACN 001 865 300 (AIFME), against which it is said judgments have been obtained, was on any view a different entity from AIFME Brisbane ’96 Pty Ltd (ACN 069 197 360). The bite of the article was the inability of the first entity to pay its debts and the insinuation in the last sentence that there was a connection or association between the two suggested by the acronym, the common principal business office or place of business and the principal activity. The question was whether the second entity referred to was the plaintiff.

15    Further on in his judgment Levine J said:

“It is not known to me whether the reference in the matter complained of to ‘AIFME Brisbane ‘96’ (emphasis added) is in some way a misprint either in the Schedule or in the article itself. However, the argument advanced by Mr Wheelhouse as to the significance of the ACN number, it being the only thing common to the plaintiff and the ‘ Brisbane ‘96’ corporation referred to in the matter complained of, and nothing to do with the judgment debtor company, is persuasive both on the capacity question and the ‘of and concerning’ question.
The plaintiff is not sufficiently referred to, ie identified, in the matter complained of; identification has not been particularised; it is not pleaded in appropriate form as an alter ego case, the mere coincidence of the ACN is insufficient and must be struck out.”

16    Of these two quoted paragraphs I again have difficulty with the first. The reference to the significance of the ACN number as being the only thing common to the plaintiff and the “Brisbane ‘96” corporation overlooks the critical point of identification which a jury might think was inserted by the publisher to point to the plaintiff. Why else put it there?

17    Furthermore, I think the appellant’s other argument has force. The respondents submit that the use, after reference to Australian International Farm Machinery Exhibition, of the acronym AIFME could be quite innocent. But a jury might think otherwise. No acronym is used for the respondent, Norley Pty Limited. To avoid confusion and the use of the long name “the debtor company” might have been used. The appellant submitted that the ordinary reasonable reader would, on the face of the material provided in the manner complained of, identify the appellant and any other company bearing the acronym AIFME.

18    In Love v Mirror Newspapers Limited (1980) 2 NSWLR 112 at 122 Hunt J remarked that the summary jurisdiction of the Court to strike out a plaintiff’s statement of claim in defamation, upon the ground that the matter complained of is incapable of conveying the imputations pleaded by the plaintiff, cannot be exercised in a defendant’s favour unless the plaintiff’s claim is shown to be either so obviously untenable that it cannot possibly succeed or manifestly groundless. Hunt J referred, in this regard, to Bik v Mirror Newspapers (1979) 2 NSWLR 679. This led to a use of the procedure under Pt 31 r 2 (a) of the Supreme Court Rules. It is not clear whether Levine J was proceeding under this rule or not. But Hunt J in Love v Mirror Newspapers Limited said:

“An order would probably not be made where evidence other than the matter complained of itself was relevant to that decision, for example, where proof of extrinsic facts was required either to identify the plaintiff Consolidated Trust Co Limited v Browne (1948) 49 SR (NSW) 86 …….. or where, for any reason, facts had to be assumed for the purpose of deciding the question of law….. This is because there may be, and sometimes is, a world of difference between the extrinsic facts of which particulars have been supplied and the extrinsic facts themselves as revealed by the evidence which is given at the hearing Vlasic v Federal Press of Australia Pty Limited (1976) 9 ACTR 1 and 5,6.”

19    For present purposes I am content to say that I am entirely persuaded that the matter complained of was reasonably capable of carrying the imputation pleaded by the plaintiff and that accordingly the appeal should be allowed and the order striking out paragraph 5 of the statement of claim set aside. So, too, should the order requiring the plaintiff to pay the defendants’ costs of the action pleaded in paragraph 5 and of the motion. The defendants should pay the plaintiff’s costs of that motion and of this appeal.

20    The ratio for Levine J’s decision of 20 February 1998 was his Honour’s conclusion that the amendments proposed in the third further amended statement of claim constituted an attempt to re-litigate or have the Court decide again the very issue on which it pronounced on 8 August 1997. Furthermore, his Honour had doubts about whether the amended particulars were proper particulars and said that were he to decide the discrete issue he would be inclined to refuse leave to amend on the basis of futility.

21    Since I am of opinion that the appeal from the judgment of 8 August 1997 should be allowed and the order striking out para 5 of the statement of claim set aside, it follows that the ratio upon which the orders of 20 February 1998 proceeded has gone and that the appeal from that decision should also be allowed, the orders set aside and the application remitted to the Common Law Division to be reconsidered. When reconsidering the application, the question of the costs of it can also be reconsidered. The appellant is entitled to the costs of this appeal.

Orders

1. Appeal allowed;
2. Set aside orders 1 and 2 of Levine J made on 8 August 1997;
3. In lieu thereof strike out only para 5 (d) and (f) to the intent that para 5 (a), (b), (c), (g), (h) and (i) stand as pleaded;
4. The defendants to pay the plaintiff’s costs of that motion;
5. Set aside the orders made by Levine J on 20 February 1998;
6. Remit the application to the Common Law Division to be re-considered;
7. The respondents to pay the appellant’s costs of this appeal.

22    STEIN JA: I agree with Sheller JA.

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