Al-Shennag v Statewide Roads Ltd - [2008] NSWCA 300

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Al-Shennag v Statewide Roads Ltd [2008] NSWCA 300

HEARING DATE(S): 28 October 2008

JUDGMENT DATE:
12 November 2008

JUDGMENT OF: Beazley JA at 1; Tobias JA at 2; Bell JA at 110

DECISION: 1. Extend the time for the filing by the appellant of his summons for leave to appeal up to and including 13 March 2008.
2. Grant the appellant leave to appeal.
3. Dismiss the appeal.
4. The appellant to pay the respondents’ costs of the appeal.
5. Grant the cross-appellants leave to appeal.
6. Dismiss the cross-appeal.
7. The second respondent to pay the disbursements, if any, incurred by the appellant in respect of the summons for leave to cross-appeal and the cross-appeal.
8. Set aside the orders made by Walmsley A-J on 12 December 2007 and in lieu thereof order:
(a) that the proceedings against the first respondent be dismissed with costs;
(b) that there be judgment for the appellant against the second respondent to the effect that the imputations pleaded in paragraph 13(a), (b), (c), (d) and (e) of the amended Statement of Claim filed on 29 May 2007 were conveyed by the matter complained of and were defamatory of the appellant.

CATCHWORDS: DEFAMATION – Whether imputations of and concerning appellant – Whether imputations conveyed by matter complained of – Report of consultant engineer in relation to work of appellant as professional engineer – Whether imputations were defamatory of appellant – Imputations disparaging of appellant in professional context – Publication – Whether imputations were published by first respondent – First respondent parent company of employer of report’s author – Whether employer of report’s author was agent of first respondent – Whether first respondent and employer of report’s author were in partnership – Whether first respondent vicariously liable for publication by employer of report’s author - CORPORATIONS – Group of companies – Whether parent company and wholly owned subsidiary in partnership – Whether parent vicariously liable for publication of report by subsidiary – Whether subsidiary was agent for parent in publishing report – Whether ‘corporate veil’ should be pierced/lifted as between parent and subsidiary - PROCEDURAL FAIRNESS – Self-represented litigant – Whether primary judge afforded appellant fair and just opportunity to prepare and present case – Appellant claimed to be unaware certain issues were to be determined – Alleged failure of primary judge to explain court processes to appellant – Alleged failure of primary judge to properly assess totality of submissions put by appellant

LEGISLATION CITED: Defamation Act 1974 (NSW)
Partnership Act 1892 (NSW)

CATEGORY: Principal judgment

CASES CITED: Al-Shennag v Statewide Roads Ltd & Anor [2006] NSWSC 1226
Al-Shennag v Statewide Roads Ltd & Anor [2007] NSWSC 147
Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549
Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165
J H Rayner (Mincing Lane) Ltd & Anor v Department of Trade & Industry [1989] Ch 72
James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554
Salomon v A Salomon & Co Ltd [1897] AC 22
Urbanchich v Drummoyne Municipal Council (NSWSC, 22 December 1998); (1991) Aust Torts Reports 81-127
Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331

PARTIES: Abdullah Al-Shennag
Statewide Roads Ltd

FILE NUMBER(S): CA 40046/08

COUNSEL: A: Self represented
R: M S White

SOLICITORS: A: Self represented
R: Deacons Solicitors, Sydney

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 20208/05

LOWER COURT JUDICIAL OFFICER: Walmsely J

LOWER COURT DATE OF DECISION: 12 December 2007

LOWER COURT MEDIUM NEUTRAL CITATION: A-S v Statewide Roads Limited [2007] NSWSC 1472

CA 40046/08

BEAZLEY JA
TOBIAS JA
BELL JA
Wednesday 12 November 2008

ABDULLAH AL-SHENNAG v STATEWIDE ROADS LIMITED

Judgment

1 BEAZLEY JA: I agree with Tobias JA.

2 TOBIAS JA: At all material times Abdullah Al-Shennag (the appellant) was a senior engineer employed by Bankstown City Council (the Council). In June 1999 the Council engaged Mr Bill Woodcock (the second respondent), a senior consultant engineer employed by Statewide Roads Technical Management Ltd (Management), to prepare a report regarding various engineering conditions imposed by the appellant upon certain development consents granted by the Council with respect to three properties (the report). The report was duly prepared and was highly critical of the professionalism of the appellant with respect to the imposition of those conditions. It was forwarded to senior officers of the Council in July 1999.

3 On 28 June 2005 the appellant instituted proceedings in the Defamation List of the Common Law Division of the Supreme Court in which he claimed that he was defamed by the contents of the report (the matter complained of). He sued both the second respondent (the author of the matters complained of) and Statewide Roads Ltd (the first respondent) alleging that both had published the report. He did not sue Management, which at that time was either in liquidation or had been voluntarily deregistered. The appellant later took steps to restore Management to the Register and an order to that effect was made on 10 August 2006. He then made an application to file an amended Statement of Claim adding four additional defendants (of which Management was one). That application was dismissed by Simpson J on 17 November 2006: Al-Shennag v Statewide Roads Ltd & Anor [2006] NSWSC 1226. The appellant did not file an appeal against her Honour’s decision. Nevertheless, during the course of the hearing of the present matter he sought this Court’s leave to appeal that decision. Leave was refused.

4 An Amended Statement of Claim (ASC) was, with leave, filed on 29 May 2007. Paragraph 13 of that pleading alleged seven imputations of which the last (para 13(g)) was struck out by Nicholas J on 10 July 2007.

5 The proceedings were governed by s 7A of the Defamation Act 1974 (NSW) (the Act). By order made on 12 November 2007 the trial was, by consent, to be by judge alone. The appellant was at all times self-represented including before this Court. The trial commenced before his Honour Acting Justice Walmsley on 3 December 2007 and continued on the following two days. It was then adjourned to 11 December and concluded on 12 December, when his Honour delivered an ex tempore judgment. He concluded that:

(a) the matter complained of was of, and concerning, the appellant;

(b) the matter complained of was not published by the first respondent but was published by the second respondent;

6 The primary judge therefore entered a verdict in favour of the first respondent and a verdict in favour of the appellant against the second respondent in respect of the five imputations to which I have referred: Al-Shennag v Statewide Roads Ltd & Anor [2007] NSWSC 1472. In relation to the use by his Honour of the term “verdict” in the orders, see the conclusion to these reasons, below. The appellant filed a summons for leave to appeal against the primary judge’s determination that the matter complained of was not published by the first respondent and against his Honour’s failure to find that imputation (f) was conveyed. The second respondent (and the first respondent in the event that the appellant’s appeal with respect to the verdict obtained by it at trial was successful) filed an application for leave to cross-appeal challenging the primary judge’s findings that the imputations pleaded in paras 13(b) and (c) of the ASC were conveyed by the matter complained of and that the imputations pleaded in para 13(c) and (e) were defamatory of the appellant. Both summonses for leave to appeal and cross-appeal as well as the substantive appeals were heard concurrently.

The matter complained of

7 The matter complained of was as follows:

“‘A. INTRODUCTION

This report assesses the validity of a series of conditions placed on 3 development applications by a member of staff of [B] Civic Services, Civic Approvals Group, at the following locations:

Each issue listed in the brief has been dealt with, maintaining strict factual analysis of the engineering principles involved, and within the context of Council’s policies and standard conditions of consent for development and building applications.

Comments are also provided as to the appropriateness or otherwise of the conditions placed on the application.

Attention has also been given to the consistency of approach between an initial set of conditions placed compared with a subsequent set of conditions placed involving one of the properties in question.

The report does not make any direct assessment of the technical competence or otherwise of the member of staff involved. Sufficient information is provided however, in the form of a purely technical analysis to allow Council to measure the technical competence of the staff member.

I confirm that I have had access to the Council files for each of the three properties involved, along with supporting documentation detailing Council’s standard conditions of development consent, policies and delegated authorities. I have also had access to the [B] City Council Position Description for the position of the staff member involved.

As a Fellow of the Institution of Engineers I am acutely aware of a professional Engineer’s ethical obligation and I quote some tenets of the underlying foundation of the professional Engineer’s ethical obligations as a basis of this assessment.

‘CODE OF ETHICS

Engineering is a creative process of synthesising and implementing the knowledge and experience of humanity to enhance the welfare, health and safety of all members of the community, with due regard to the environment in which they live and the sustainability of the resources employed. It involves a diversity of related functions ranging from the development and application of engineering science through to the management of engineering works. The members of the Institution of Engineers, Australia are bound by common commitment to promote engineering and facilitate its practice for the common good based upon shared values of:

The community places its trust in the judgement and integrity of members to pursue the above values and to conduct their activities in a manner that places the best interests of the community above those of personal or sectional interests. The Code of Ethics provides a statement of principles which has been adopted by the Council of the Institution as the basis upon which members shall conduct their activities in order to merit community trust. It is also the framework from which rules of conduct may be developed.

The Tenets of the Code of Ethics embrace principles which are immutable.’

I also take the opportunity of quoting out in full some particular elements of the code that bear on this particular situation:

It is noted that tertiary qualifications in Civil Engineering or appropriate related field are a pre-requisite for the position. It is understood that the staff member was formerly a member of the Institution of Engineers.

B. [B] CITY COUNCIL’S CONDITIONS OF DEVELOPMENT CONSENT

I have reviewed the standard conditions of consent for development in [B] City Council. I find that the conditions are comprehensive, appropriate and fair in my experience which covers service at a number of Councils over some 25 years in the industry. (Some areas of the Standard Conditions do however, need updating, ie Public Risk Insurance Cover. These areas do not however, impact on this issue.)

The assessment of the following issues was rated with the above information being used as a benchmark of appropriate performance and engineering ability.

C. [Property 1]

Issues:

(i) Assessment of the process of application as to whether it progressed in accordance with policies, and further confirm with the builder as to whether an application to amend consent was lodged.

The process of engineering assessments did not follow an appropriate path. Following lodgement of the original site and stormwater drainage plan details on 16 June 1998 and approval with amendments on 9th July 1998 a subsequent plan of variation was lodged with a different retaining wall detail on 18th March 1999 and approved with different stormwater conditions on 25th March 1999.

Three issues arise:

1. The amended plans sought probably prior to March 1999 were not lodged in accordance with Council’s procedures detailed in a memo to staff dated 11th February 1998 from the Manager, Civic Approvals. I have confirmed that the builder lodged them himself at the request of the staff member in question. The amended plan was lodged in a way that did not follow the required procedure.

2. The request for amendment was inappropriate and would have lead to an over engineered, and inappropriate outcome.

3. New, different and some inappropriate stormwater conditions were marked on this plan that was lodged to amend a retaining wall.

CONCLUSION: The process and policies were not followed. The amendment was not lodged and dealt with in accordance with Council’s procedures.

(ii) The necessity of an above ground stormwater detention system.

An on site inspection on 24/06/99, review of contour plans and review of the catchment reveals that an on-site detention storage is not necessary as the site affectively drains directly to Little Salt Pan Creek. The objective of on-site detention is to minimise the effect of new impervious areas of development placing greater stormwater loads on the existing stormwater infrastructure and to reduce the potential for down stream flooding. Neither of these two criteria are at issue for this property and its stormwater discharge.

CONCLUSION: Above ground stormwater detention is unnecessary.

(iii) Whether such above ground stormwater system complies with Council’s codes.

The approval dated 25th March 1999 (and the previous approval) were conditioned in contravention of Council’s policies dated November 1992 which states that above ground stormwater open storage areas are not to be located in privately controlled residential areas (eg villa courtyards).

CONCLUSION: The above ground stormwater open storage area as originally required contravenes Council’s own codes.

(iv) The removal of an internal kerb and its replacement with a landscaped dish drain.

The plans approved and conditioned on 9th July 1998 required a 150mm high, edge kerb to be placed along the full length of the southern side of the access driveway into the property. As the driveway was designed by the designing Engineer, Clements, to be “dished 50mm along centreline”, it is assumed that the kerb was required as a condition to provide edge constraint. This is not absolutely necessary as there is a buffer from the edge of the driveway to the side fence of ≈700mm.

The subsequent conditioned approval (25th March 1999) by the same officer in question ignored the original integral kerb condition and required an open grass swale drain along side the driveway (built as a wide shallow drain) to collect water and discharge it to the above ground stormwater open storage area. It would have negligible purpose as the grated drains in the driveway would pick up most of the overland flow such that it is.

CONCLUSION: Great inconsistency is shown by this amended condition and the amendment would have negligible merit.

(v) The suitability and purpose of a chicken wire fence 1.5 metres high.

The current trend to improve the quality of stormwater reaching the natural water courses is a very important initiative of the State Government. To provide a “chicken wire” trash fence for a small back yard however, is totally unnecessary. The stormwater flows and likelihood of trash reaching this particular point is negligible. (The slope of the bank is listed as 1:4 which may have required some top edge restraint safety. However, this is also questionable.)

CONCLUSION: The “chicken wire” trash fence is not necessary.

(vi) The need for an additional pit at the front of unit 1.

An additional surface inlet pit has been placed on the second conditioned approval dated 25th March 1999 in front of unit 1. The pit was not shown or added on the 9th July 1998 approved plans. This is a further example of an unnecessary inconsistency. The drainage pit that has been added would serve no purpose as stormwater reaching the site from up stream as sheet flow would be either directed by the driveway crossfall into the grated drain in front of the unit 1 garage or would travel along the garage wall to the same grated drain. Volumes would also be minimal due to a limited catchment.

CONCLUSION: The additional surface pit is unnecessary and shows further inconsistency in approach.

(vii) The replacement of a double dished drain overland flow path in a landscaped strip.

The proposed double dished drain could not serve any realistic function. The majority of the land to the north of this side boundary is lower than the placement of the drain. The catchment is very small as a result. A single grass swale would be adequate and easily maintained by the eventual owner. It would appear that the staff member in question has exceeded his role as an approving and checking Engineer by providing inappropriate conditions for negligible gain.

CONCLUSION: The double dished drain overland flow path has negligible if any function and is an unnecessary condition.

(viii) The requirement for a spillway in a narrow section of wall as against full width overflow.

The weir in this position would create a concentration of overtopping stormwater which is an undesirable situation as energy is concentrated that may create scour and turbulence down stream. Full width overflow would distribute the overflow energy and create a sheet flow situation which is much more desirable in this situation.

CONCLUSION: This is an undesirable condition which would create an unsuitable outcome.

(ix) The necessity for a 170mm x 200mm weir in a retaining wall.

This condition would provide no physical benefit to the hydraulics of the system nor would it achieve any benefits in improving the quality of the stormwater outlet from the property. The reason is that it is above the inlet of the primary outlet and would block and be ineffectual in a 1:100 event related to the secondary and higher outlet.

CONCLUSION: This is an unnecessary condition and shows in this instance poor understanding of basic hydraulics.

(x) The need for a 200 x 200 drainage channel in the base of a concrete retaining wall.

The need for this channel was based on an incorrect interpretation of Council requirements which state that grated drains (usually located perpendicular to the direction of flow) collecting surface stormwater shall have a minimum dimension of 200mm x 200mm. The drain along the retaining wall is a longitudinal drain collecting some stormwater, in what is in effect a larger “drain”. A 100mm x 100mm longitudinal collection drain would be adequate. (A shallow dish drain would be a better alternative to facilitate easier cleaning.)

A secondary issue is the geometric limitations of the condition. A 200mm x 200mm drain would not physically fit in the base of the retaining wall especially related to reinforcement placement.

CONCLUSION: This shows a basic misunderstanding or incorrect application of Council’s requirements. Also, a basic inability to understand geometry is exhibited.

(xi) Any other engineering issues of significance at this site.

It is understood that a condition was placed on the subsequent amended application requiring the outlet pipe be carried through to [neighbouring] Road which is far in excess of the original approval. I am most concerned that although the approach is conscientious and detailed, basic engineering principles have been ignored or inappropriately applied to the great disadvantage to the developer who in good faith has tried to comply with the conditions imposed. I am also concerned at the inconsistency of approach from a professional Engineer.

D. [Property 2]

Issues:

(i) Whether amendments to stormwater plans were justifiable.

Upon inspection of the stormwater design plans with conditions marked in red and approved on 26th August 1998 as well as an on site inspection made on 24th June 1999, I make the following comments.

a) Although the amendments appear thorough, close scrutiny shows that some original amendments are unnecessary (ie additional pit in north west corner) and some are obviously quite wrong (ie “overland flow path to basin” on street frontage near the western side of the building, which is blocked by 3 masonry brick walls.)

b) The amendment (re-design) of the Rh 3030 galvanised steel mesh to cover both the upper and lower outlet orifice points is however quite a valid and appropriate original amendment condition.

c) On balance, the appropriate amendments equal the number of inappropriate amendments.

CONCLUSION: This is of concern, in that approximately 50% of conditional amendments are not only difficult to justify but a number are obviously incorrect.

(ii) The necessity for the requirements for a 700mm x 100mm grass lined dish drain along the northern boundary and 100mm clearance under the respective fence.

This condition is not absolutely necessary as the catchment is very small due to the developed nature of the adjacent property. The condition however could have had some merit to ensure water is not directed to the building foundations or directed such water that would build up along the boundary and discharge into the neighbouring property. The 100mm clearance under the fence is not however necessary, as the water landing on the adjacent block would fall toward the road causing no difficulty to either property.

CONCLUSION: Although this first condition is not absolutely necessary it does have some value. The 100mm clearance under the fence would however serve no purpose.

(iii) The necessity for the requirement for an additional overland flow path across the front setback area, in relation to architectural plans.

As mentioned above, this condition is blatantly incorrect suggesting that the staff member involved failed to conceptualise the 3 dimensional site constraints, a skill which is essential for a Council officer operating in this position.

CONCLUSION: This condition is clearly wrong and represents a serious breach of the staff member’s obligations to provide proper engineering conditions of development consent.

(iv) The need for a drainage line across the front setback area at the north-west corner.

This condition is unnecessary and would have been wasteful if it had been implemented. Virtually no upstream stormwater could enter this pit. The condition also contravenes a Council requirement that the property stormwater shall be discharged into Council’s drainage pipeline by a suitably designed single pipeline (cl. 3.4.6.4). The fact that an on site detention system is employed should not invalidate the intent to minimise the total number of discharge points to Council’s system.

CONCLUSION: This condition was wrong and would have been wasteful and unnecessary.

(v) Whether final amendments made to plans by a subsequent Engineer were in accordance with sound engineering practice.

The final amendments made by the subsequent Engineer are entirely appropriate (with only one very minor exception). The satisfactory nature of the end result is born out by a site inspection of the property carried out on the 24th June 1999. The only marginal amendment is the grass swale drain along the northern boundary.

CONCLUSION: It is concluded that not only were the final amendments made by the subsequent Engineer in accordance with sound engineering practice, they were necessary to save waste and to correct errors of judgement made by the Engineer in question.

(vi) Any other engineering issues of significance at this site.

I commend the Council officer that interceded and authorised the amendment of the original conditional approval.

E. [Property 3]

Issues:

(i) Overland flow exacerbated onto a garage at [neighbouring property].

The previously dedicated 1.83m wide drainage easement along the north-eastern boundary is slightly higher at ground level than the adjacent low point. No clear flow path is evident. The condition requires the re-shaping of the footpath at the eastern corner adjacent to Council’s road inlet pit to attempt to concentrate flow along the north-eastern boundary. This would tend to exacerbate the situation at the north-western end of the property where a light framed clad garage is built over the easement in the adjacent property.

CONCLUSION: Other action should have been taken in the form of an alternative condition or “no action” could have been taken to retain the status quo as related to the potential for local nuisance flooding.

(ii) The need for retaining walls along the rear and side boundaries.

The difference in height from one property to the next, does not exceed 400mm, the majority of the perimeter is much less. It is assumed that the need for a change in level of this order (ie the backyard was filled, thus resulting in a change of level at the boundary) was to fill a local undrained low point. This same outcome could have been achieved with a soft engineering approach by providing for a short batter and a rationalisation of the regrading.

CONCLUSION: The need for a hard engineering solution to a minor regrading problem could have been achieved by a cheaper, yet just as effective soft engineering approach. The imposition of a condition that requires retaining walls in this location represents a level or rigour that exceeds the role of an approving and checking Engineer.

(iii) The requirement to cover the easement area with 100mm reinforced concrete.

This again represents unnecessary over engineering and serves no justifiable purpose. The stormwater flow velocities at this location would be low and scour is not likely to occur. Conditions have already been placed on the development consent limiting the use of the area over the easement. These are self explanatory and would be conveyed to each new owner via the conveyancing reporting process.

CONCLUSION: The concrete slab over the easement is not warranted and should not have been required.

(iv) The requirement for bollards.

Having attended a recent Stormwater Industry Association Conference where risk associated with stormwater flow at velocity was discussed, I can see the need for some form of restraint in certain circumstances. As alluded to above the nature of the topography at this location would not warrant such protection and again represents over engineering and is unnecessary.

CONCLUSION: This condition is unnecessary.

(v) Integral kerb locations and their links to car parking spaces.

The inability to read plans and conceptualise the necessary geometry to allow vehicles to negotiate into and out of the two side parking bays focuses attention on an inability to properly assess applications. Due diligence was not followed and a very basic error was made. The integral kerb would block access to the adjacent parking bays completely.

CONCLUSION: This amendment was made with no attention nor understanding of the intent and nature of the application as detailed on the design drawings.

(vi) A chicken wire fence for the 300mm infill panel.

CONCLUSION: Although the theory is admirable the practical application is flawed. The condition is inappropriate.

(vii) Any other engineering issues of significance at this site.

The unnecessary and inappropriate conditions imposed would have caused unnecessary costs and problems in the future if they had been pursued.

F. CONCLUSION SUMMATION

The item by item analysis of all of the issues sums up to a series of mistakes and errors underlined by poor engineering judgement.

The analysis has been strictly based on this sample set of 3 Development and Building Consents and addresses only the technical nature of the original application as presented and the engineering response by the staff member involved on behalf of Council.

I conclude that a great deal of unnecessary time and energy has had to be spent correcting inappropriate and incorrect conditions.

In a time of ecologically sustainable development we, as professional Engineers, cannot afford to waste resources by proposing over engineered solutions when a softer engineering approach is much more appropriate nor can we condone an obvious lack of basic due diligence.

In final conclusion I consider that some very silly mistakes were made, and some over zealous solutions were proposed all of which had the effect of tending to give our profession a somewhat bad name. I have found it extremely difficult if not impossible to defend the actions of a fellow Engineer, when presented with the information before me.

The above independent technical analysis is now provided to Council to allow an assessment to be made of the competence of the staff member involved.’”

The imputations

8 In para 13 of the ASC the appellant relevantly pleaded that the contents of the report

"[I]n their natural and ordinary meaning meant and understood that:

(a) the plaintiff is an incompetent engineer;

(b) the plaintiff by reason of his lack of knowledge and ability as an engineer does not deserve to remain as an employee of the council;

(c) the plaintiff is a silly engineer;

(d) the plaintiff's work and actions as an engineer tend to bring a bad name to all professional engineers;

(e) the plaintiff is useless for any employment as an engineer;

9 As I have already observed the primary judge found that each of imputations (a), (b), (c), (d) and (e) were conveyed by the matter complained of and were defamatory of the appellant but that imputation (f) was not so conveyed.

The nature of the appellant’s challenges to the primary judge’s decision

10 Essentially there were three substantive challenges advanced by the appellant. The first challenged his Honour’s decision that the matter complained of was not published by the first respondent. He submitted that given that Management was a wholly owned subsidiary of the first respondent, that they operated out of the same premises with identical telephone and a fax numbers and that they had common directors and employees, his Honour should have found that the first respondent not only had knowledge of the publication of the report but also that it was responsible for its publication and had accepted responsibility therefor.

11 Alternatively, the appellant submitted that there was a partnership relationship between the first respondent and Management as they carried on a business in common with a view of profit within the meaning of s 1(1) of the Partnership Act 1892 (NSW). Consequently by s 10(1) of that Act the wrongful act of Management in publishing the matter complained of was one for which the first respondent was liable.

12 A further alternative submitted by the appellant under this head of challenge was that his Honour ought to have held that there was an agency relationship between the first respondent and Management or that the first respondent was vicariously liable for the wrongs of Management.

13 Finally, he submitted that the “corporate veil” should be lifted as between the first respondent and Management, and a finding made that the act of Management in publishing the matter complained of was also that of the first respondent. Each of these alternative arguments was unsuccessfully advanced before the primary judge.

14 The second substantive challenge was against his Honour’s finding that imputation (f) was not conveyed by the matter complained of. Its rejection was founded upon his Honour’s finding that there was nothing in the matter complained of which asserted that the appellant was someone “who claims to have obtained numerous engineering qualifications”. The appellant submitted that the Council was fully aware of his qualifications and experience which were extensive (and which he had pleaded in para 6 of the ASC) and that his Honour had incorrectly rejected his tendering of documentary material to establish his qualifications and experience.

15 The third substantive challenge can best be described as an alleged failure of the primary judge to provide the appellant, given that his first language was not English, that he was representing himself and had no legal qualifications, with a fair and just opportunity to prepare his case and to give all the evidence that he wished with respect to the relevant issues, particularly that of publication by the first respondent. He further alleged that his Honour had failed to explain to him the processes of the court including the necessity for him to give evidence by entering the witness box to prove certain documentary material which he wished to tender and that he had failed to properly deal in detail with all the submissions which the appellant had advanced before him. In essence, the appellant alleged that he was denied procedural fairness particularly with respect to the contested issue of whether the first respondent published the matter complained of.

The primary judge’s reasons on the issue of publication by the first respondent

16 The primary judge noted (at [8]) that Mr Woodcock, the author of the report, was employed by Management which was a wholly owned subsidiary of the first respondent. At [10] he referred to the evidence of Ms Anne Woodward, who was at the relevant time company secretary of both the first respondent and Management, that a number of companies in the Statewide group had common officers and a common office, as well as common fax and telephone numbers. Reference was made (at [11]) to the evidence of Mr Jones, a former director of companies in the group, of a registered business name, “Statewide Roads”, the proprietor of which was the first respondent, and which was used by companies within the group from time to time.

17 Mr Jones also said that until 2002 all companies within the group filed separate tax returns although after 2002, by reason of changes to the tax laws, consolidated tax returns were filed with the Australian Taxation Office for administrative convenience and simplicity.

18 His Honour also referred (at [13]) to the evidence of a Mr Young, a former non-executive director of the companies within the group, who said that Management was a specialist firm of three or four highly qualified engineers that was used from time to time by other companies within the group for, in effect, independent engineering advice.

19 The primary judge then noted (at [14]) the appellant’s submission that the first respondent knew that Management had prepared the matter complained of, had stored it on a common computer data system and then permitted it to remain in the system as a consequence whereof it was responsible for the publication equally with either Management, the second respondent or both.

20 After referring (at [15]) to the well known passages from the judgment of Isaacs J in Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 at 364 and that of Hunt J in Urbanchich v Drummoyne Municipal Council (NSWSC, 22 December 1988); (1991) Aust Torts Reports ¶81-127 at 69,193 to the effect that more than mere knowledge of the publication must be established for a party to be responsible for its publication and that there must be some positive acceptance of responsibility for that publication, his Honour determined (at [19]) that he was not persuaded that the first respondent had either the relevant knowledge or had engaged in any positive acceptance of responsibility for the publication of the matter complained of. In this respect his Honour accepted the submission of the first respondent that there was no evidence that any person who held a position in the first respondent had knowledge of the preparation or issue of the report and that although it and Management had common directors, the appellant had not established that any of those directors had any knowledge of the report, much less approved its contents and dispatch to the Council.

The appellant’s challenge to the finding of non-publication by the first respondent

21 In my opinion a consideration of the relevant evidence justified the following findings:

(a) Although the second respondent was an employee of Management, there was no evidence that he was also an employee of the first respondent or otherwise acted on its behalf in preparing the report. Further, his evidence was that he did not discuss the matter complained of or its contents with any of the directors of the two companies or with Ms Woodward, the company secretary of the first respondent and Management;

(b) Ms Woodward was company secretary of both the first respondent and Management and although they had a common address and common offices, they did not operate from the same rooms. Ms Woodward had no knowledge of the matter complained of and her only role was to sign invoices for fees on the letterhead of Management in her capacity as manager of that company;

(c) Although the covering letter forwarding the report to the Council was typed by a Ms Nina Flakelar, the evidence of Mr Woodcock established that she was an employee of Management only. It was not established that she was an employee of the first respondent.

(d) Mr Ken Porter was identified by Mr Woodcock as the general manager of Management who asked the latter to prepare the report and who approved the report for issue to the Council. The evidence of Mr Young, a director of both Management and the first respondent, confirmed that Mr Porter was employed only by Management. Mr Young also gave evidence that the operations of Management within the group were conducted as a distinct and independent specialist business, a fact confirmed by Ms Woodward. Mr Young had no knowledge of the matter complained of.

(e) Mr Jones also gave evidence that the companies in the group operated separately and did not operate as a partnership.

22 Subject to the other arguments raised by the appellant, I can see no error in his Honour’s finding that there was no evidence to support the appellant’s assertion that the first respondent published the matter complained of. The appellant asserted that it was sufficient that the two companies operated out of the same offices, had common staff and that the knowledge, for instance, of Ms Woodward (who signed the invoices to the Council with respect to the cost of the report) and of Ms Flakelar (who typed the report) was sufficient to justify an inference that the first respondent accepted responsibility for its publication.

23 In my opinion it is clear from the evidence and his Honour’s findings with respect thereto that the first respondent and Management carried on separate businesses albeit it from the same premises and that they operated independently of each other. The Council had requested Management to provide the report and it had been authored by Mr Woodcock and approved by Mr Porter who were employees only of Management. As I have observed, there was no evidence that they were also employees of the first respondent.

24 There were two invoices forwarded by Ms Woodward to the Council in respect of the provision of the report being Exhibits J and K. Each of them was on the letterhead of Management and was signed by Ms Woodward as “Manager, Finance & Administration” of Management. The appellant relied upon an Australian Company Number (ACN) under the heading to the invoices, which was in fact the ACN of the first respondent. However, immediately above the signature of Ms Woodward were the words “Statewide Roads Technical Management Ltd” beneath which was a different ACN which was established to be of that company. In my opinion, the mistake in the letterhead of the invoices with respect to the ACN of Management was no more than a printing error.

25 It is convenient to deal at this point with the appellant’s complaint that his Honour wrongfully refused to accept his tender of a “With Compliments” slip of the first respondent, a brochure with the logo “AUS/SPEC”, and Mr Woodcock’s curriculum vitae (all of which formed MFI 3). It is apparent from the transcript of evidence of 11 December 2007 at pp 168-170 and 12 December 2007 at pp 237-240 that the appellant was informed by his Honour on a number of occasions that if he wished to make the documents admissible it would be necessary for him to enter the witness box and give evidence as to how he came upon them. He did not do so.

26 One of the appellant’s complaints on his procedural fairness ground was that he was confused by the judge and did not properly understand that he would have to return to the witness box in order to tender these documents. However, a reading of the pages of the transcript to which I have referred makes it clear that his Honour explained more than once and in simple terms what the appellant was required to do and there is nothing in the transcript that would support a finding that he was confused regarding those requirements.

27 It is not immediately self-evident that the documents were inadmissible without the necessity for the appellant to give oral evidence as to how they came into his possession which seems to be the basis upon which their tender was objected to. However, I find it unnecessary to deal with the correctness or otherwise of his Honour’s rejection of their tender by the appellant for I am firmly of the view that even if the documents had been admitted, they would not have advanced the appellant’s case on the issue of publication by the first respondent.

28 The first document, the “With Compliments” slip, merely established the first respondent’s ACN, its address, telephone and fax numbers. That these were common to Management was established by other evidence or was conceded.

29 The second document, the brochure, depicts the first respondent’s logo as well as the telephone and fax numbers of “SWR”. The text of the brochure contains the following statement upon which the appellant heavily relied:

“SWR (Statewide Roads) through its technical management consultancy, had concurrently co-ordinated several councils …”

30 The third document, Mr Woodcock’s CV, stated that he was “Senior Consultant, Statewide Roads, Technical Management”. It further stated that

“Bill provides consultancy services as SWR’s experienced consultant to the Local Government Industry”.

31 The appellant fastened on the fact that the CV did not state that Mr Woodcock was Senior Consultant to “Statewide Roads Technical Management Limited” but, rather, that he was “SWR’s experienced consultant”, being a reference to the first respondent and not Management. The points made by the appellant are correct but in my opinion do not impinge upon the primary judge’s finding, amply supported by the evidence, that Mr Woodcock was employed only by Management which carried on a separate and independent business within the Statewide group.

32 The evidence demonstrated that the holding or parent company, the first respondent, carried on a number of businesses through its various subsidiaries of which Management was one. But it is clear that the technical management part of its operations were in fact carried on independently and separately through the corporate structure constituted by Management exclusively by its own employees and that its finances were its own and not those of its parent. It had its own set of accounts and, at the relevant time, disclosed its financial affairs in its own income tax returns. In my opinion, even if they had been admitted into evidence, the appellant’s reliance upon the documents to which I have referred would not have advanced his case.

33 The appellant submitted that the evidence established that there was a partnership between the first respondent and Management; alternatively, that Management was the agent of the first respondent; alternatively, that the first respondent was vicariously liable for the torts of Management.

34 On the issue of partnership the primary judge said:

Partnership Act

21 I am not persuaded there was any sharing of profits. The plaintiff’s submission that there was, is, I think, based on a misunderstanding of the consolidated balance sheet which involves necessarily setting out the figures which show the losses and profits of the various companies in the group, but does not of itself show any sharing of profits.”

35 The appellant submitted that his Honour erred when he referred to the sharing of profits as being one of the usual obvious signs of a partnership as such sharing was not a requirement of the definition of partnership in s 1(1) of the Partnership Act, namely, that the relevant parties were carrying on a business in common with a view of profit.

36 However, his Honour was referring to a submission of the appellant that there was a partnership involving the first respondent and Management since they did share profits, that being one of the usual obvious signs of a partnership. If there were a sharing of profits then that would be so. His Honour was merely responding to the appellant’s submission which he had recorded. In any event, the evidence did not establish that the first respondent and Management were carrying on any relevant business in common. Each carried on their separate businesses. The appellant’s submission to the contrary should be rejected.

37 The appellant’s submission that there was some agency relationship between the first respondent and Management should also be rejected. His Honour noted (at [24]) that the appellant had relied on the fact that the first respondent owned all the shares in Management and that the two companies had common facilities to which reference has already been made. However, as he correctly pointed out, that did not demonstrate an agency relationship. His Honour then referred (at [26]) to the following passage from the dissenting judgment of Meagher JA in Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 at 556, where his Honour said:

“The notion of agency is a well established legal concept, and in the present case would involve the proposition that all contracts entered into by the alleged agent … were entered into not on its own behalf but on behalf of its parent or parents, and that any assets it acquired were in law the assets of its parent or parents. Not only was the applicant unable to point to any evidence which would require such an inference to be drawn, but many of the documents to which he referred effectively negatived such a conclusion."

38 The primary judge considered that Meagher JA’s comments applied to the present case and so do I. Given the evidence that each of the companies in the group, including Management, carried on their own separate and independent businesses, the fact that they were wholly owned subsidiaries of the first respondent could not of itself have created any relationship of agency: Briggs at 569C – 570E per Rogers A-JA and, in particular, at 573-574 citing from J H Rayner (Mincing Lane) Ltd & Anor v Department of Trade & Industry [1989] Ch 72.

39 Finally, the primary judge referred (at [27]) to the appellant’s written submissions on the issue of vicarious liability and his invitation to lift the corporate veil. He said (at [28]):

“I am not persuaded that there are any issues of vicarious liability which assist the claim. No basis to show the first defendant is vicariously liable for [Management] has been shown. Nor do I see the ‘corporate veil’ argument as relevant insofar as it was relied on.”

40 In the present context questions of agency have at times been relied upon to explain the occasional decisions of courts to pierce or lift the so-called corporate veil. These are cases where the separate entity doctrine affirmed by the House of Lords in Salomon v A Salomon & Co Ltd [1897] AC 22 has been departed from. They were described by Rogers A-JA in Briggs (at 567) as being ad hoc and not demonstrating any principled approach.

41 Thus in James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554 at 583-584, Sheller JA, with the concurrence of Beazley and Stein JJA, said:

“It has been suggested that in company law the corporate veil between parent and subsidiary may be lifted where the latter was so controlled by the former as to be its agent for the purposes of liability: Smith, Stone & Knight Ltd v City of Birmingham [1939] 4 All ER 116. However, in Woolfson v Strathclyde Regional Council [1978] SLT 159 (at 160) Lord Keith of Kinkel said, in approving the reasons for the judgment appealed from, that the separate legal status of a limited company and its incorporators must, as held in Salomon v A Salomon & Co Ltd , normally receive full effect in relations between the company and persons dealing with it. His Lordship referred to a passage in the judgment of Ormerod LJ in Tunstall v Steigmann [1962] 2 QB 593 at 601 to the effect that any departure from a strict observance of the principles laid down in Salomon v A Salomon & Co Ltd has been made to deal with special circumstances when a limited company might well be a facade concealing the true facts.

‘That the corporator has 'complete control of the company' is not enough to constitute the company a mere facade; rather that term suggests, in the context, the deliberate concealment of the identity and activities of the corporator. Certainly the term calls to mind expressions used by the Court when lifting the veil in (cases which are then cited), all cases in which the company was formed in order to enable the corporator to do through, and under the cover of, the company what he might not do openly and in person.’ ”

42 In Ford’s “Principles of Corporation Law”, 13th ed (2007), Butterworths (Ford), the learned authors review the relevant authorities at [4.250]-[4.255], pp 131-137. Relevantly, they confirm that no all-embracing principle has emerged from the decided cases. However, they establish the following grounds for looking behind the corporate entity:

■ where a company structure is used to perpetrate a fraud;

■ where a company structure is used with the sole, or dominant, purpose of enabling another person to avoid an existing legal obligation;

43 The last-mentioned example is said in Ford to be more likely to happen where the controller is a parent company of a wholly owned subsidiary than where the controller is an individual. But there must still be a denial by the parent of resources to the subsidiary to enable it to function independently. There is no evidence in the present case to suggest that the first respondent denied resources to Management and thus stifled its operations. If anything the evidence is to the contrary in that Management was able to operate independently of the first respondent by generating its own revenue from its own human resources.

44 As Rogers A-JA said in Briggs at 575, the mere potential of the parent to exercise control over its subsidiary is insufficient. At 577 his Honour also observed:

“In the result, as the law presently stands, in my view the proposition advanced by the plaintiff that the corporate veil may be pierced where one company exercises complete dominion and control over another is entirely too simplistic. The law pays scant regard to the commercial reality that every holding company has the potential and, more often than not, in fact, does, exercise complete control over a subsidiary.”

45 In the present case it is apparent that the evidence does not support any of the grounds referred to in Ford as justifying a departure from the fundamental principle that a company is a separate and independent entity from its shareholders.

46 I have nevertheless carefully considered the appellant’s written submissions on this issue which are repetitive of those he advanced before the primary judge. At the end of the day they are all based upon the same facts or assertions, namely, that Management was a wholly owned subsidiary of the first respondent; that both companies had common directors and employees and operated out of the same premises; and that the consultancy business of Management was really the business of the first respondent or a unit of that business (an assertion which was contrary to the evidence). None of these matters advance the appellant’s case based on the concepts of vicarious liability or lifting the corporate veil. His Honour correctly rejected them.

The appellant’s challenge to the finding that the interpretation of 13(f) was not conveyed

47 I turn now to imputation (f) which for convenience I repeat:

who claims to have obtained numerous engineering qualifications and to have long post graduate engineering experience

48 In his original Statement of Claim the appellant pleaded imputation (f) as imputation (g) but without the words which I have emphasised. That imputation was not the subject of any capacity objection by the respondents: in other words, it was not contended that the matter complained of was incapable of conveying that imputation. Without leave, and for reasons best known to himself, the appellant added the emphasised words to that imputation in his ASC. Those words then became part of the imputation.

49 The primary judge held (at [49]) that that imputation was not conveyed by the matter complained of as there was nothing therein on which to base that part of the imputation which asserted that the appellant was a person “who claims to have obtained numerous engineering qualifications and to have long post graduate engineering experience”. In my opinion he was correct to so find.

50 The appellant sought to challenge this finding on two bases, neither of which asserted that there was anything in the matter complained of from which it could be concluded that it conveyed that the appellant was a person who claimed to have obtained numerous engineering qualifications and to have long post graduate engineering experience. Rather, the appellant mounted a collateral challenge to his Honour’s finding.

51 The first basis of challenge, as I understand it, was that the appellant had pleaded in para 6 of the ASC that he was a highly skilled and specialised engineer by training and by experience, and which particularised his substantial engineering qualifications. Yet his Honour rejected the tender of documents (which became MFI 5) which sought to make good the assertions within that paragraph. However, the basis upon which his Honour rejected that evidence was that, perhaps unbeknown to the appellant as a non-legally qualified self-represented litigant, what he was now attempting to do was to rely on a true innuendo based on extrinsic facts. Objection was taken to that attempt which his Honour upheld for the reasons set out at [51] to [54] of his judgment. The central basis of that rejection was that there was nothing in the ASC with the possible exception of para 6, to alert the reader that a true innuendo was relied upon. In particular, para 13 of the pleading only set out imputations said to be conveyed by “the natural and ordinary meaning” of the matter complained of.

52 The pleading was further deficient, in my view, in that it failed to plead the relevant extrinsic facts which would support a true innuendo, namely, that those who read the matter complained of would be aware of the matters pleaded in para 6, namely, the appellant’s numerous engineering qualifications and his long post graduate engineering experience.

53 It thus appears that the appellant’s challenge required him to establish that his Honour’s discretion miscarried when, in effect, he refused to permit the appellant to assert a true innuendo in an ASC which contained no reference to any such assertion. In my view the appellant advanced nothing to suggest that that discretion miscarried.

54 The second basis of challenge was a submission that it was not open to the respondents to have denied at trial that the matter complained of conveyed imputation (f). The basis of this submission, as I understand it, was that the respondents had been directed by Nicholas J on 22 May 2007 to give notice of those imputations in the original Statement of Claim to which they objected, that they had done so but that they had not objected to imputation (f). However, the respondents had not objected to that imputation in its originally pleaded form. When it was amended to add the underlined words to which I have referred in [47] above, a tactical decision was apparently taken not to file a capacity objection to that amended imputation but to allow the factual issue as to whether that imputation was in fact conveyed to go to trial.

55 The point the appellant sought to make was that it was too late for the respondents at trial to submit that imputation (f) was not in fact conveyed, having failed to object to that imputation in accordance with the direction of Nicholas J.

56 In a letter dated 26 November 2007 from the appellant to the respondents’ solicitors, he foreshadowed that at the commencement of the hearing on 3 December 2007 he would ask the primary judge to confirm, in effect, that it was not open to the respondents to assert that imputation (f) was not conveyed by the matter complained of.

57 In a written submission provided to the primary judge at the commencement of the hearing on 3 December 2007, the appellant referred to the interlocutory hearings before Nicholas J on 22 May 2007 and 10 July 2007. On the latter date his Honour struck out imputation 13(g) of the ASC but found that all other imputations were

“…imputations which the complained of material are reasonably capable of conveying to the ordinary reasonable reader and which reasonably are capable of defaming”

58 The written submission further asserted that the decision of Nicholas J was a final determination with respect to the imputations pleaded in para 13 of the ASC and that therefore, in effect, it was no longer open for the respondents to challenge those imputations at trial.

59 Understandably Walmsley A-J pointed out to the appellant that Nicholas J was dealing only with the question of whether the matter complained of was capable of conveying the imputations including that pleaded in para 13(f) and not with the factual issue as to whether those imputations were in fact conveyed by the matter complained of, a distinction which, perhaps understandably, was not appreciated by the appellant. Nevertheless, his Honour attempted at length to explain the difference between the issue of capacity that was before Nicholas J and of the question of fact that was before his Honour.

60 Notwithstanding the clear distinction, which was so explained to the appellant, he has sought to re-agitate the issue before this Court. The challenge is misconceived and should be rejected.

The appellant’s challenge based on a denial of procedural fairness

61 I turn now to a number of assertions made by the appellant that he was denied procedural fairness. Given the voluminous written material provided by the appellant to the Court with respect to this issue and which was somewhat repetitive, I hope I do those submissions no disservice by attempting to isolate the essential issues that they raise. They seem to fall into two categories. The first was that as the appellant was a self-represented litigant not qualified as a lawyer, with a number of health problems including the occasional inability to concentrate and speak clearly when he was confused or depressed combined with the fact that English was not his first language. He submitted that he was

“remarkably confused and unable to concentrate well and to follow and understand instructions on 11 and 12 December 2007 due to the irregularities and lack of clarity, and ambiguity to What irrelevant issues the respondents were trying to raise during the hearing …”

62 The second appears to be a complaint by the appellant relating to the rejection by his Honour of an application that the publication issue with respect to the first respondent be adjourned to a separate and subsequent hearing to enable the appellant to consider what further evidence he wished to tender on that issue and to make submissions with respect thereto. The first of these complaints was encapsulated in the written submissions of the appellant at White Book 403-410. They contain numerous assertions to the effect that at the hearing on 11 and 12 December 2007 the appellant was confused and unable to understand what was going on. He submitted he was therefore denied

“a fair, appropriate and just opportunity for procedural fairness that would have allowed him sufficiently to prepare his related arguments and to give all of his documentary evidences and submissions in respect of [the first respondent’s] liabilities in these proceedings.”

63 By letter dated 10 December 2007 (which became Exhibit P at trial) the appellant wrote to the respondents’ solicitors indicating that he was proposing to seek an adjournment of the hearing of the issue of the first respondent’s liability as a publisher to another date which would be subsequent to the appellant further amending the ASC to join other defendants such as Management and those officers of Management, namely, Mr Ken Porter and Ms Nina Flakelar. These persons had been identified during the course of the evidence given on 3 and 4 December as being allegedly involved in the publication of the matter complained of.

64 It was further asserted that such an adjournment should be granted due to the complexity of the publication issue, the comparatively short time available for the Court on 11 December to address the issue and the possibility of the need to call other witnesses including those who the appellant sought to be joined as defendants in respect of the first respondent’s liability as publisher of the matter complained of. Reference was also made to the appellant’s current health problems and the fact that he needed to have sufficient time and opportunity to prepare and argue his case so as to accord him natural justice.

65 The appellant alleged in his written submissions to this Court that he had been taken by surprise, not having been given any prior notice, when the primary judge determined to hear what the appellant referred to as irrelevant questions of law and which related to the legal principles and factual issues concerning when a person is to be taken to have published a defamatory matter.

66 It was asserted that as his Honour was concerned with a s 7A hearing, it was not open to him to determine questions of law as distinct from questions of fact. Such an assertion is unsustainable given that in his letter to the solicitors for the respondents dated 26 November 2007 (which is part of Exhibit 1 on the appeal) the appellant stated the following:

Defamation Act

67 If by irrelevant issues the appellant is referring to the legal principles which inform the question of fact as to when a person is to be taken as publishing defamatory material, then it is clear that he had been made fully aware by Nicholas J, as he acknowledges in his letter of 26 November 2007, that at the hearing on 3 and 4 December 2007, the legal bases of the respondents’ liability including that of the first respondent, was to be “included”.

68 Although the appellant now asserts that the primary judge did not make clear to him that the issue of publication by the first respondent could not only be determined on a s 7A hearing but also was one with which his Honour proposed to deal, a reading of the transcript of the hearing before the primary judge and particularly that of 11 December 2007, reveals that his Honour made it clear to the appellant on a number of occasions that that issue was before him and that the appellant was required to deal with it: see for example, the transcript of the hearing, T.162 (27)–163 (28); 166 (1-23). After all, he had on 3 and 4 December 2007 called a number of witnesses in his own case in an attempt to deal with the publication issue. Furthermore, as I have indicated, he issued subpoenas to the first respondent to produce documents to support his case on the publication issue which documents were available to him prior to the commencement of the hearing on 3 December and which he had had ample time to consider between then and 11 December.

69 The following exchange, which took place at the end of day on 5 December at the time his Honour adjourned the matter part-heard to 11 December, is revealing:

“HIS HONOUR: You should bear in mind the issues I have to decide, I think, again subject to my being corrected are whether the publication concerns you or not, whether it identifies you and secondly whether either of the defendants actually published it that is, and next whether any of the imputations that you say arise from it do in fact arise, insofar as they do whether any of those are defamatory. So the first two are factual issues and are the subject of evidence both written and oral and the third and forth [sic] matters are really interpretation, matters of interpretation. Imputations are matters of interpretation and as to whether there [sic] defamatory or not it’s really a matter for me to decide having heard from each of you and considered the law and considered the words in the context in which they appear.

PLAINTIFF: What about the liability issue?

HIS HONOUR: That’s what I said. You still have to prove that the defendants, at least one of them, you want to prove that both of them published the material and it was about you.

PLAINTIFF: I will prepare something in relation to this one.”

70 Although on 11 December the appellant repeatedly asserted that he was confused and taken by surprise when his Honour indicated on the day that he proposed to deal with the issue of publication, on all occasions when these assertions were made the primary judge quite properly informed the appellant that he had been aware at all times that the issue of publication was to be determined on the s 7A hearing and that he proposed to do so. On a number of occasions he invited the appellant to tender whatever documentary material he wished and/or, if necessary, to enter the witness box to prove that material if objection had otherwise been taken to it: see, for example, T.168; 169 (27)–170(1).

71 In light of the foregoing, in my opinion it is not open to the appellant to now assert that he was unaware when the matter proceeded on 11 December that the publication issue was not alive. It is true that there are numerous references in the transcript of 11 December to the appellant requesting the primary judge for a separate hearing on the question of whether the first respondent published the matter complained of, but on each occasion he was informed by his Honour that the hearing of those matters was “today; it is now. I have told you the issues that I am dealing with”: T.189 (35-37).

72 As I have noted, throughout the hearing on 11 December the appellant kept asserting that he was not prepared to deal with the issue of publication by the first respondent because such an issue needed a lot of time for hearing and further discovery and preparation. On each occasion his Honour rejected that assertion. However, his Honour did adjourn the proceedings at the end of the day on 11 December to 10.45am the next day in order to provide the appellant with the opportunity to prepare his response overnight to the first respondent’s submissions on the publication issue. At T.221 (56) the appellant acknowledged that he could address the publication issue the next day. On 12 December the appellant produced further detailed written submissions which canvassed not only the evidence which had been given but also the relevant legal authorities relating to the publication issue.

73 In short, having read the whole of the transcript of 11 and 12 December 2007 and, in particular, those parts of the transcript to which the appellant directed the Court’s attention, I am left in no doubt that notwithstanding the appellant’s constant complaints and requests to his Honour for adjournment of the publication issue, he was made fully aware that that issue was required to be determined on the days allotted for the hearing of the matter and that, in any event, by the morning of 12 December the appellant was in a position (having prepared extensive and detailed written submissions overnight) to deal with the issue of publication. In fact, at the commencement of the hearing on 12 December, when asked by his Honour whether he was ready to proceed, the appellant answered “Absolutely”. He then complained that he had not slept for 48 hours and that he was tired but would do his best.

74 Accordingly, I would reject the appellant’s submission that by 12 December he was unable to prepare and present a full, suitable and clear argument on the issue of publication by the first respondent.

75 Furthermore, having carefully read the transcript of 11 and 12 December, I would not be prepared to accept the appellant’s assertion that during the hearing on those days he was “in a terrible misunderstanding of the court process”. I accept that he made complaints to that effect, but the primary judge did not accept the validity of those complaints and no error has been demonstrated to suggest that he was wrong in rejecting them.

76 On numerous occasions the appellant’s response to the clear directions of his Honour was that he was “not a lawyer” and that he had significant “health problems”. However, it is clear from his extensive academic qualifications as an engineer that the appellant is a man of some intelligence. The appellant’s repeated refrain as to his lack of legal qualifications should be viewed with some caution. In the circumstances of the present case as revealed by the transcript, there was no error in his Honour’s disinclination to provide the appellant with any more latitude than was in fact provided to him during the course of the trial. To do otherwise would have been unfair to the respondents.

77 When it came to addresses, counsel for the first respondent addressed on both the partnership issue and the agency issue. During the course of those submissions and on their conclusion the appellant again asserted that he was confused and unable to concentrate due to his health problems and the fact that he was not a lawyer. As I have indicated, the appellant prepared overnight and had available for the adjourned hearing on 12 December some eight pages of written submissions on the publication issue which he also addressed orally at length over some 30 pages of transcript: T.227-253. In fact, he had prepared detailed written submissions which ran to 22 pages (White Book 163-184) on the issues of vicarious liability and lifting the corporate veil as early as 9 November 2007, asserting that those submissions were in reply to “irrelevant issues” pleaded by the respondents. Further, he specifically addressed those issues as well as those of partnership and agency at T.243-255.

78 In summary, therefore, it is clear from a reading of the voluminous written submissions filed by the appellant before and during the trial and from his oral argument that he was well prepared to argue the publication issues including those of vicarious liability and lifting the corporate veil. No basis exists to support the appellant’s assertion that he was denied procedural fairness in the sense that he was not provided with the opportunity to deal with these issues before the primary judge, or that he had had insufficient time to prepare his evidence and submissions.

79 The second basis upon which the appellant complains that he was denied procedural fairness related to the refusal of his Honour to grant him an adjournment in respect of the first respondent’s liability as publisher of the matter complained of in order to allow him to further amend the ASC to join those persons who had been identified in the evidence as being in some way involved in the preparation of the report, such as Mr Porter and Ms Flakelar, as well as Management. His Honour rejected that application upon the basis that it was far too late and in any event, any claims against those parties were statute barred.

80 The refusal by his Honour early on 11 December and later on 12 December to contemplate at such a late stage of the trial an adjournment to permit the appellant to further amend the ASC in the manner proposed was, in the circumstances, one well within the proper exercise of his discretion as the trial judge. No error in the exercise of that discretion has been demonstrated. I reiterate that Simpson J had rejected a similar application on 17 November 2006 albeit relating to different individual defendants but including Management, and no appeal was filed by the appellant against her Honour’s decision. As I indicated earlier in these reasons, this Court refused the appellant leave to amend his Notice of Appeal to include an appeal against her Honour’s decision.

81 I have attempted to deal with all the matters relied upon by the appellant in his challenge to the primary judge’s decision based on a denial of procedural fairness. If I have not discussed any particular matter it is because it appears peripheral to the main complaints that his written and oral submissions to this Court have revealed. In my opinion the primary judge extended a great deal of latitude to the appellant and explained in the most simple and plain language what he was required to do to prove his case and the issues that it would be necessary for him to address on the s 7A hearing. The appellant could have been under no misapprehension with respect to these matters.

82 Furthermore, the extremely detailed, albeit repetitive, written and oral submissions that the appellant advanced to the primary judge on the various aspects of the issue of publication by the first respondent reveals not only that he had ample opportunity to fully prepare his case on those issues but also that he had been provided with every opportunity to advance his case on those matters both in writing and orally. I would therefore reject the appellant’s challenge to the primary judge’s decision based on a denial of procedural fairness.

83 It follows from the foregoing that the appellant’s appeal should be dismissed with costs.

The respondents’ cross-appeal

84 The respondents challenged the findings of the primary judge that first, the imputations pleaded in para 13(b) and (c) of the ASC were conveyed by the matter complained of and, second, that the imputations pleaded in paras 13(c) and (e) were defamatory of the appellant.

85 Imputation 13(c) asserted that “the plaintiff is a silly engineer”. The respondents submitted that the matter complained of did not convey that imputation and in any event, that it was not defamatory of the appellant. In my opinion those submissions should be rejected.

86 The imputation in question was no doubt sourced in the penultimate paragraph of the report which was in the following terms:

“In final conclusion I consider that some very silly mistakes were made, and some over zealous solutions were proposed all of which had the effect of tending to give our profession a somewhat bad name.”

87 It is true, as the respondents submit, that the word “silly” or its cognates do not appear elsewhere in the matter complained of. It was therefore submitted that the epithet “silly” was applied to “mistakes” and was not directed to the appellant. It described the quality of the asserted mistakes rather than a characteristic of the appellant’s personality.

88 The matter complained of is replete with assertions that the appellant had made mistakes and errors or a series of mistakes and errors in relation to the conditions of development consent which were the subject of the report. The word “silly” has a well-defined meaning of lacking good sense, foolish, stupid, absurd or ridiculous. In context there can be no doubt that the word is being applied to the alleged mistakes of the appellant as an engineer and that it was asserting that those mistakes were silly in that they lacked good sense or were stupid.

89 Although I accept that the imputation was not referring to a characteristic of the appellant’s personality, in my view it was clearly referring to a characteristic of the appellant in his professional capacity as an engineer. I would therefore reject the respondents’ challenge to his Honour’s finding that imputation 13(c) was conveyed by the matter complained of.

90 It was alternatively submitted that the imputation, if conveyed, was a trivial statement and was not disparaging of the appellant as a professional engineer given the other more highly disparaging assertions contained in the matter complained of. The primary judge (at [46]) found that to say of an engineer that he was “silly” in the context in which it appeared was defamatory. I agree. The imputation was in my view required to be read in the context of the whole of the matter complained of. It may not have been the most disparaging imputation, but it was disparaging nevertheless.

91 Although it was submitted that a reasonable reader would not take sufficient notice of, or give sufficient credence to, the phrase “silly mistakes” in the matter complained of so as to understand it as disparaging of the appellant, the context of the relevant part of the matter complained of was a conclusion that “some very silly mistakes” had been made by the appellant as an engineer which, in my view, would cause a right minded person to think less of him as a professional engineer. Accordingly, the challenge to his Honour’s determination that imputation 13(c) was defamatory of the appellant should be rejected.

92 The respondents next submitted that the imputation 13(b) was not conveyed by the matter complained of. It was in the following terms:

“The plaintiff by reason of his lack of knowledge or ability as an engineer does not deserve to remain an employee of the council.”

93 Reliance was placed upon the following assertion contained in the matter complained of:

“The report does not make any direct assessment of the technical competence or otherwise of the member of staff involved. Sufficient information is provided however in the form of the purely technical analysis to allow Council to measure the technical competence of the staff member.”

94 The author then proceeded to set out a professional engineer’s ethical obligations, quoting from the Institution of Engineers’ Code of Ethics. Included was the following:

“The code of ethics provides a statement of principles which has been adopted by the Council of the Institution as the basis upon which members shall conduct their activities in order to merit community trust.”

95 After setting out further elements of the Code, the author of the report stated:

“The assessment of the following issues was rated with the above information being used as a benchmark of appropriate performance and engineering ability.”

96 Under the heading “CONCLUSION SUMMATION”, the following appears:

“The item by item analysis of all of the issues sums up to a series of mistakes and errors underlined by poor engineering judgment.

The analysis has been strictly based on this sample set of three Development and Building Consents …

In a time of ecologically sustainable development we, as professional Engineers, cannot afford to waste resources by proposing over-engineered solutions when a softer engineering approach is much more appropriate. Nor can we condone obvious lack of basic due diligence.

In final conclusion I consider that some very silly mistakes were made, some over zealous solutions were proposed, all of which had the effect of tending to give our profession a somewhat bad name. I found it extremely difficult if not impossible to defend the actions of a fellow Engineer, when presented with the information before me.

The above independent technical analysis is now provided to council to allow an assessment to be made of the competence of the staff member involved.”

97 Although the author asserted that he was dealing with specific matters, nonetheless a number of his comments were somewhat more general. Thus when dealing with what is referred to as Property 2, Issue (iii), the matter complained of stated:

a skill which is essential for a Council officer operating in this position

98 When dealing with Issue (v) with respect to Property 3, the author noted that the

focuses attention on an inability to properly assess applications

99 The respondents submitted that the author of the matter complained of was careful not to directly criticise the appellant in a general way and that the report did not make any recommendation as to what the Council should do in relation to his future employment. In particular, the report did not recommend that the appellant did not deserve to remain an employee of the Council. However, in my opinion the nature of the criticisms contained in the matter complained of and the more general statements which I have emphasised in the passages set out above, would convey to the reasonable reader that it was the relatively undisguised view of the author that the appellant did not deserve to remain an employee of the Council. I would therefore reject the respondents’ submission to the contrary.

100 The respondents finally submitted that the imputation pleaded at para 13(e) of the ASC was not defamatory of the appellant. It asserted that “the plaintiff was useless for any employment as an engineer”.

101 It was submitted that this imputation did not disparage the appellant by attributing a blameworthy condition to him; nor did it present him in a ridiculous light or was likely to cause him to be shunned. It was submitted that many people are entirely useless for employment as an engineer due to no fault of their own. I interpolate that it is obvious that any person would be useless for employment as an engineer if he or she were in fact not qualified as such. It was submitted that a neutral imputation could not draw anything from its context. In other words, as the imputation in the present case was clear in its terms, context could not be relied upon to render it disparaging when, on its face, it was not.

102 However, in Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165, Mason P, with the agreement of Wood CJ at CL, observed (at 173 [26]) that as a point of general principle, it was well established that the words complained of must be construed as a whole and in context and that the judge of fact is to consider whether the pleaded imputations are defamatory in that context. Thus in that case it was held that an imputation that the plaintiffs had lied to members of a certain football club, when considered in its context, was defamatory.

103 The President also observed (at 173 [29]) that although it is true that some types of lying may be morally justifiable with the possible consequence that such an accusation of lying is not defamatory, nevertheless it remains generally true that accusations of lying are defamatory.

104 In the present case the word “useless” in imputation 13(e) is ambiguous. It was not the subject of any interlocutory application that it should be clarified. In these circumstances it must take its colour from the context of the matter complained of. Although, as I have indicated, a person would be useless for employment as an engineer if he were not professionally qualified, that is not what the imputation was directed at in the context of the matter complained of. In these circumstances, in my opinion, it was open to his Honour to have regard to the imputation in the context of the matter complained of which clearly related to the competence of the appellant as a tertiary qualified civil engineer and a former member of the Institution of Engineers (as stated in the matter complained of). In these circumstances, to assert that he was useless for any employment as an engineer was disparaging of his professional abilities and thus defamatory.

105 Accordingly, for the foregoing reasons, in my opinion the respondents’ cross-appeal fails.

Conclusion

106 It follows from the foregoing that each of the appellant’s appeal and the respondent’s cross-appeal fails. Nevertheless, leave to appeal and cross-appeal should be granted and, further, the time for the filing of the appellant’s summons for leave to appeal should be extended, it being out of time by one day. The respondents did not oppose this.

107 However, there is a problem with the primary judge’s orders. Having found that the first respondent did not publish the matter complained of, his Honour entered a “verdict” in favour of the first respondent. As he was sitting without a jury the proper order for Honour to have made was that the proceedings against the first respondent be dismissed: see Ritchie’s Uniform Civil Procedure NSW, Uniform Civil Procedure Rules, [51.2.10].

108 Further, his Honour entered a verdict for the appellant against the second respondent in respect of the imputations pleaded in para 13(a), (b), (c), (d) and (e) of the ASC. Again, this order should be amended so that it provides for judgment for the appellant against the second respondent in respect of those imputations to the effect that they were conveyed by the matter complained of and were defamatory of the appellant.

109 I would therefore propose the following orders:

1. Extend the time for the filing by the appellant of his summons for leave to appeal up to and including 13 March 2008.

2. Grant the appellant leave to appeal.

3. Dismiss the appeal.

4. The appellant to pay the respondents’ costs of the appeal.

5. Grant the cross-appellants leave to appeal.

6. Dismiss the cross-appeal.

7. The second respondent to pay the disbursements, if any, incurred by the appellant in respect of the summons for leave to cross-appeal and the cross-appeal.
8. Set aside the orders made by Walmsley A-J on 12 December 2007 and in lieu thereof order:

(a) that the proceedings against the first respondent be dismissed with costs;

(b) that there be judgment for the appellant against the second respondent to the effect that the imputations pleaded in paragraph 13(a), (b), (c), (d) and (e) of the amended Statement of Claim filed on 29 May 2007 were conveyed by the matter complained of and were defamatory of the appellant.

110 BELL JA: I agree with Tobias JA.

**********

Citations

Al-Shennag v Statewide Roads Ltd [2008] NSWCA 300

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Statutory Material Cited

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CITATION:	Al-Shennag v Statewide Roads Ltd [2008] NSWCA 300
HEARING DATE(S):	28 October 2008
JUDGMENT DATE:	12 November 2008
JUDGMENT OF:	Beazley JA at 1; Tobias JA at 2; Bell JA at 110
DECISION:	1. Extend the time for the filing by the appellant of his summons for leave to appeal up to and including 13 March 2008. 2. Grant the appellant leave to appeal. 3. Dismiss the appeal. 4. The appellant to pay the respondents’ costs of the appeal. 5. Grant the cross-appellants leave to appeal. 6. Dismiss the cross-appeal. 7. The second respondent to pay the disbursements, if any, incurred by the appellant in respect of the summons for leave to cross-appeal and the cross-appeal. 8. Set aside the orders made by Walmsley A-J on 12 December 2007 and in lieu thereof order: (a) that the proceedings against the first respondent be dismissed with costs; (b) that there be judgment for the appellant against the second respondent to the effect that the imputations pleaded in paragraph 13(a), (b), (c), (d) and (e) of the amended Statement of Claim filed on 29 May 2007 were conveyed by the matter complained of and were defamatory of the appellant.
CATCHWORDS:	DEFAMATION – Whether imputations of and concerning appellant – Whether imputations conveyed by matter complained of – Report of consultant engineer in relation to work of appellant as professional engineer – Whether imputations were defamatory of appellant – Imputations disparaging of appellant in professional context – Publication – Whether imputations were published by first respondent – First respondent parent company of employer of report’s author – Whether employer of report’s author was agent of first respondent – Whether first respondent and employer of report’s author were in partnership – Whether first respondent vicariously liable for publication by employer of report’s author - CORPORATIONS – Group of companies – Whether parent company and wholly owned subsidiary in partnership – Whether parent vicariously liable for publication of report by subsidiary – Whether subsidiary was agent for parent in publishing report – Whether ‘corporate veil’ should be pierced/lifted as between parent and subsidiary - PROCEDURAL FAIRNESS – Self-represented litigant – Whether primary judge afforded appellant fair and just opportunity to prepare and present case – Appellant claimed to be unaware certain issues were to be determined – Alleged failure of primary judge to explain court processes to appellant – Alleged failure of primary judge to properly assess totality of submissions put by appellant
LEGISLATION CITED:	Defamation Act 1974 (NSW) Partnership Act 1892 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Al-Shennag v Statewide Roads Ltd & Anor [2006] NSWSC 1226 Al-Shennag v Statewide Roads Ltd & Anor [2007] NSWSC 147 Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165 J H Rayner (Mincing Lane) Ltd & Anor v Department of Trade & Industry [1989] Ch 72 James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554 Salomon v A Salomon & Co Ltd [1897] AC 22 Urbanchich v Drummoyne Municipal Council (NSWSC, 22 December 1998); (1991) Aust Torts Reports 81-127 Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331
PARTIES:	Abdullah Al-Shennag Statewide Roads Ltd
FILE NUMBER(S):	CA 40046/08
COUNSEL:	A: Self represented R: M S White
SOLICITORS:	A: Self represented R: Deacons Solicitors, Sydney
LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC 20208/05
LOWER COURT JUDICIAL OFFICER:	Walmsely J
LOWER COURT DATE OF DECISION:	12 December 2007
LOWER COURT MEDIUM NEUTRAL CITATION:	A-S v Statewide Roads Limited [2007] NSWSC 1472