Archer v Channel Seven Perth Pty Ltd - [2001] WASC 195

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ARCHER -v- CHANNEL SEVEN PERTH PTY LTD [2001] WASC 195

CORAM: McLURE J

HEARD: 11 JULY 2001

DELIVERED : 1 AUGUST 2001

FILE NO/S: CIV 1271 of 2001

BETWEEN: STEPHEN JOHN ARCHER
Plaintiff
AND
CHANNEL SEVEN PERTH PTY LTD (ACN 008 679 294)
Defendant

Catchwords:

Defamation - Application to strike out - Imputations arising from words complained of - Turns on its own facts

Practice and procedure - O 59 r 9 certificate - Waive requirement for certificate

Legislation:

Supreme Court Rules, O 59 r 9(1)

Result:

Application allowed in part

Category: B

Representation:

Counsel:

Plaintiff: Mr S J Penrose
Defendant: Mr R L Le Miere QC

Solicitors:

Plaintiff: Tottle Christensen
Defendant: Freehills

Case(s) referred to in judgment(s):

Birmingham v West Australian Newspapers Ltd [1999] WASC 19
Bond v West Australian Newspapers Ltd [1999] WASC 63
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Gumina v Williams (No 1) (1990) 3 WAR 342
Lewis v Daily Telegraph Ltd [1964] AC 234
Lionetti v Romeo, unreported; SCt of WA; Library No 960737; 19 December 1996
Peters v R (1998) 151 ALR 51
Smith v Littlemore (1996) 15 WAR 289
Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1
Taylor v Jecks (1993) 10 WAR 309
Wilson v Chambers & Co Pty Ltd (1926) 38 CLR 131

Case(s) also cited:

Bond v West Australian Newspapers Ltd [1999] WASC 225
Dominion Investments Pty Ltd v Total Vision Design Pty Ltd [2000] WASC 130
Emerson v Walker & Ors [1999] WASC 265
Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440
Jones v Skelton [1963] 1 WLR 1362
Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293
Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663
Philipps v Philipps (1878) 4 QBD 127
Reynolds v Nationwide News Pty Ltd & Ors [2001] WASC 90
Russell-Davison v Prosin, unreported; SCt of WA; Library No 980277; 22 May 1998
Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1
Vitale v Bednall [2000] WASC 207
Williams v Grainger [2000] WASC 96

McLURE J: The defendant applies to strike out pars 4 and 6(i) of the amended statement of claim in this defamation action. The plaintiff says the Court does not have power to make an order on the defendant's application because of its failure to comply with O 59 r 9 of the Supreme Court Rules. I deal with that issue first.

Order 59 r 9 of the SCR

Order 59 r 9 provides:
"(1)No order shall be made on an application in chambers unless the application was filed with a memorandum stating -
(a)that the parties have conferred to try to resolve the matters giving rise to the application; and
(b)the matters that remain in issue between the parties.
(2)The court may waive the operation of paragraph (1) in a case of urgency or for other good reason."
On a literal interpretation of subrule (1), provided an application is filed with a memorandum containing the statements referred to in subpars (a) and (b), the rule is complied with regardless of whether or not the parties have in fact conferred to try and resolve the matters. On this interpretation, the Court cannot look behind the memorandum, no doubt in the reasonable expectation that practitioners would not file a court document containing an erroneous statement (and if they did, professional conduct issues may arise). However, it is unnecessary in this case to determine whether this construction of subrule (1) should be adopted because the O 59 r 9 memorandum in the defendant's chamber summons, quite properly, merely states the facts. It does so in the following terms:
1.On 24 April 2001, the defendant's solicitors transmitted a facsimile letter to the plaintiff's solicitors seeking to confer about the objectionable paragraphs in the statement of claim the subject of this application.
2.The plaintiff's solicitors have not yet responded to the defendant's inquiries.
3.On 6 April 2001, the defendant was directed to file and serve any application to strike out the statement of claim by 27 April 2001.
The contents of the memorandum squarely raise the question whether a communication from a proposed applicant to the solicitors for the opposing party, to which there is no response, oral or in writing, can satisfy the requirement (whether as a matter of assertion or fact) that the parties have conferred to try to resolve the matters giving rise to the application.
If it was intended that O 59 r 9 only require a proposed applicant to give notice to the opposition of the fact and grounds of a proposed application (perhaps within a reasonable time to enable the opposing party to take action to avoid the proposed application), that intention could be easily and clearly conveyed. However, the rule does not refer to notice but to the parties conferring to try and resolve matters. The notion of "conferral" for the stated purpose implies an exchange of views, oral or in writing, between the parties for the purpose of trying to resolve the matters in issue. This interpretation of conferral, which I adopt, is consistent with the spirit and purpose of r 9 which is to ensure that only matters which cannot be resolved between the parties are the subject of an interlocutory application.
A proposed applicant has limited avenues to force an opposing party to engage in an exchange of views in an attempt to resolve matters. However, in the event an applicant has given adequate notice of the nature and grounds of a proposed application, an opposing party's failure to respond would be good reason for the Court to waive the operation of par (1) and, in appropriate circumstances, justify a costs order which reflects the opposing party's failure to facilitate compliance with O 59 r 9.
The facts of this case are that the plaintiff served its statement of claim on 6 April 2001, shortly before the parties attended the first case management status conference. At that conference, the defendant was ordered to file and serve any application to strike out the statement of claim by 27 April 2001. Between 6 and 23 April 2001, the defendant's solicitors considered the statement of claim, engaged and briefed senior counsel to consider the merits of applying to strike out the statement of claim, formulated objections to the statement of claim and obtained instructions from their client. By letter dated 24 April 2001, received by the plaintiff's solicitors at 1.24 pm on that day, the defendant wrote to the plaintiff's solicitors identifying their objections to the statement of claim. The letter requested a response by noon on Thursday, 26 April 2001, failing which they would file and serve a strike‑out application.
By letter dated 27 April 2001 received at the offices of the defendant's solicitors at 11.05 am on that day, the plaintiff's solicitors rejected the assertion that the defendant's letter of 24 April 2001 was a conferral, said they were prepared to confer but provided no substantive response to the objections to the statement of claim. On 27 April 2001, the defendant filed and served its application to strike out the statement of claim. Prior to the hearing of the strike‑out application, the plaintiff made a number of amendments to the statement of claim which were responsive to a number of the defendant's objections.
On my interpretation of O 59 r 9, which requires the parties to exchange views prior to the filing of an interlocutory application, there has been no compliance. Accordingly, I have no power to make any order on the defendant's application unless I waive the conferral requirement in this case. As this is not a case of urgency, the applicant must establish other good reason. I accept the defendant gave the plaintiff short notice of its objections. However, the objections were narrow in scope, the application predictable (it being a defamation action) and the objections directed to the person who signed the pleadings. There is no suggestion in the affidavit evidence filed on behalf of the plaintiff that he or his solicitors were unable to respond to the defendant's objections before the defendant was obliged to file its application on 27 April 2001. Although, the conduct of both parties contributed to the non‑conferral, the plaintiff's contribution by his failure to facilitate compliance should not prevent the strike‑out application being heard. In those circumstances, I propose to order that the operation of par (1) of O 59 r 9 be waived.

The Strike‑Out Application

At the hearing of the strike‑out application, the plaintiff's counsel conceded the correctness of the defendant's objection to par 6(i) of the amended statement of claim. The only remaining issue is whether the imputations pleaded in par 4 of the amended statement of claim should be struck out as failing to disclose a reasonable cause of action or because they are embarrassing. The relevant legal principles are not in dispute. They are comprehensively set out in the defendant's outline of submissions and include the following:
(1)imputations will be struck out at an interlocutory stage if they are untenable or manifestly groundless: Gumina v Williams (No 1) (1990) 3 WAR 342 at 346; Taylor v Jecks (1993) 10 WAR 309 at 319;
(2)whether the words complained of are capable of conveying an alleged defamatory meaning is a question of law. The test is whether under the circumstances in which the writing was published, reasonable people to whom the publication was made would be likely to understand it in a libellous sense: Smith v Littlemore (1996) 15 WAR 289 at 294 ‑ 295;
(3)it is embarrassing to plead the same meaning several times. Distinct meanings should be pleaded. The test for distinctiveness of meanings is whether the evidence required to justify each meaning would be substantially different: Lewis v Daily Telegraph Ltd [1964] AC 234 at 282; Taylor & Ors v Jecks at 319;
(4)an imputation must express the precise act or condition asserted of or attributed to the plaintiff or with which the plaintiff is charged: Birmingham v West Australian Newspapers Ltd [1999] WASC 19 at (7);
(5)an imputation must represent the final distillation of the alleged defamatory meaning: Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 at 15.
Paragraph 4 of the amended statement of claim pleads that:
"The Matter Complained Of in its natural and ordinary meaning conveyed the following imputations each of which was defamatory of the Plaintiff:
(a)that the Plaintiff had engaged in fraudulent conduct to evade the payment of income tax;
(b)that the Plaintiff had engaged in dishonest conduct to evade the payment of income tax;
(c)that the Plaintiff had made a fraudulent transfer to his wife of all his assets in order to defeat his creditors."
The defendant's submissions need to be considered in the context of the words complained of. They are as follows:
"Monica Kos:          First, one law for the rich, one law for the poor. That's the claim tonight with a group of high‑flying barristers who owe millions of dollars in tax, but somehow keep their jobs and their rich lifestyles. As Elise Mooney reports, they know every trick in the book to escape the burden the rest of us have to carry.
Elise Mooney:        Stephen Archer, Barrister, owes $3.1 million in unpaid taxes, declared bankrupt twice.
Paul Barry:I think it's appalling that these guys can apparently pay no tax and get away with it.
Elise Mooney:        Robert Samosi, Barrister, $835,000 in unpaid taxes, bankrupt twice.
Steve Mark:If they abuse that rule, they should be treated very sternly.
Elise Mooney:        Robert Cameron, Barrister, $480,000 in unpaid taxes, bankrupt twice. Bill Davison, Barrister, $1.9 million in outstanding taxes also bankrupt twice. This is tax fraud at the top end. How is it that some of the richest men in Australia, men who own mansions like this evade paying taxes like the rest of us. It is as simple as it is sly.
Paul Barry:These people are dealing in millions of unpaid tax. They go bankrupt, they put their assets with their wives or in family trusts or in family companies so they can't be touched and they continue to live like nothing has happened.
Elise Mooney:        Journalist Paul Barry has been investigating this issue for months.
Paul Barry:When you go bankrupt two or three times and when your biggest creditor or your sole creditor is the tax office, you have to suspect that they are using insolvency to avoid their tax obligations."
The defendant has two grounds of objection to subparagraph 4(a) of the amended statement of claim. The first is that the imputation pleaded in subparagraph (4)(a) is in substance the same as the imputation pleaded in subparagraph (4)(b) of the amended statement of claim. In particular, it was said the words "fraudulent conduct" and "dishonest conduct" are synonymous.
In Lionetti v Romeo, unreported; SCt of WA; Library No 960737; 19 December 1996, Anderson J said that ordinary reasonable readers are not trained in the law and would understand "defraud" as meaning to cheat a person out of money or property which belongs to that person. Indeed, this non‑technical meaning captures two elements of fraudulent conduct. The first is engaging in a trick, artifice or other knowingly deceptive conduct and the second is engaging in that conduct with the intention or purpose of depriving a person of what is rightfully theirs.
There is no doubt that dishonesty is a material element of any fraudulent conduct: Peters v R (1998) 151 ALR 51. However, an allegation of dishonest conduct covers a broader range of conduct and is of a lesser seriousness or gravity than an allegation of fraudulent conduct. In particular, an allegation of dishonest conduct does not require proof of fraudulent intent.
However, the meaning of any word is to be taken from the context in which it appears. In this case the pleader's reference to "fraudulent conduct" and "dishonest conduct" in subparagraphs (4)(a) and (b) respectively, is for the same purpose being "to evade the payment of income tax".
The defendant says that the addition of the pleaded purpose renders the imputations indistinguishable because the ordinary reasonable reader would understand the word "evade" to mean the illegal non‑payment of tax. Whilst lawyers are familiar with the distinction between evasion of tax and avoidance of tax, I am not satisfied that the ordinary reasonable reader would know that evasion is illegal non‑payment (or reduction) of tax and avoidance is lawful non‑payment (or reduction) of tax.
In any event, the meaning of the word "evade" in relation to the non‑payment of tax or other duty, will vary according to its context. It can have a neutral meaning of intentional avoidance or it can in context mean non‑payment without honest and reasonable cause or, more serious again, defrauding the revenue: Wilson v Chambers & Co Pty Ltd (1926) 38 CLR 131 at 141 ‑143 per Isaacs J. It seems to me the word "evade" in the context of the pleaded imputations has the neutral meaning of intentional avoidance. On this construction, the defamatory sting is in the introductory words "fraudulent conduct" and "dishonest conduct" which conduct has the purpose of intentional avoidance of tax.
It is clear the allegations of fraudulent conduct and dishonest conduct can be and are intended in the pleading to be distinct. Any potential for overlap because dishonesty is a material element of fraudulent conduct is to be overcome by reading down subparagraph 4(b) to exclude fraudulent conduct. Accordingly, I reject the first ground of the objection to subparagraph 4(a) of the amended statement of claim.
The second ground of objection to subparagraph 4(a) is that the words "fraudulent conduct" introduce a technical legal concept which is vague and embarrassing. I see no basis for the assertion that the pleader is relying on a technical legal concept rather than the meaning which an ordinary reasonable reader not trained in the law would understand. Indeed, the meaning identified by Anderson J in Lionetti v Romeo effectively captures what many lawyers might understand as the gravamen of fraudulent conduct. In my opinion, there is nothing inherently uncertain or vague about the words "fraudulent conduct" in the context in which they are pleaded. Although the word "fraudulently" was struck out in Bond v West Australian Newspapers Ltd [1999] WASC 63 that was because of the particular use of the word in the context of the imputation and not because the word was inherently uncertain or vague. For these reasons I do not propose to strike out this subparagraph 4(a).
The defendant's objections to subparagraph 4(b) of the amended statement of claim mirror the objections to subparagraph 4(a). In particular, the defendant says subparagraph 4(b) is repetitious of the imputation in subparagraph 4(a), a submission I have already dealt with. The second objection is that the imputation is vague and embarrassing because the words "dishonest conduct" cover a wide gradation of activities and are not the final distillation of the alleged defamatory sting of the item.
The pleading of imputations was considered by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137 in the following terms:
"The requirement that a plaintiff must 'specify' the act or condition which he claims was attributed to him, that is to say, the statement which he says was made about him ... , is one of which, in its practical application, raises question of degree. Almost any attribution of an act or condition to a person is capable of both further refinement and further generalisation. In any given case a judgment needs to be made as to the degree of particularity or generality which is appropriate to the occasion, and as to what constitutes the necessary specificity. If a problem arises, the solution will usually be found in considerations of practical justice rather than philology."
The issue is whether the word 'dishonest' is, to use the language of Hunt J in Armitage v Double Bay Newspapers Pty Ltd, unreported; SCt of NSW (Hunt J); 26 September 1991, a "weasel" word being one which has a variety of meanings so that its use is ambiguous or equivocal. Weasel words generally only survive in an imputation if such a word is accompanied by particulars (eg, corrupt as a result of accepting a bribe).
I understand the principle to apply where a word has more than one shade of meaning and the different shades of meaning import a different degree of seriousness or impropriety. It is not satisfied merely because dishonesty may reflect itself in different type of conduct. In my opinion, the word "dishonest" in imputation 4(b) is not a weasel word in this sense and is not embarrassing.
The defendant's objections to subparagraph 4(c) of the amended statement of claim only emerged with any specificity in oral submissions. The first ground of objection was that the words complained of did not support the unqualified assertion of a fraudulent transfer to the plaintiff's wife of all his assets. Indeed, the words complained of refer to a number of alternative possibilities. Paul Barry is reported as saying "they go bankrupt, they put their assets with their wives or in family trusts or in family companies". I agree the imputation goes too far in making an unqualified assertion of fraudulent transfer to the plaintiff's wife. Even so, if the identity of the transferee was irrelevant to the defamatory sting or the defendants could justify the sting by proof of transfer to another, I would refuse to strike out the subparagraph. However, these contentions were not advanced by the plaintiff nor addressed in detail by the defendant. In the circumstances, the appropriate course is to strike out subparagraph 4(c) on this narrow basis.

The second ground of objection was that this imputation is repetitious of the imputation in subparagraph 4(a). That is clearly not so. The purpose of the conduct in subparagraph 4(c) (to defeat creditors) is different and wider than the purpose in subparagraph 4(a) (to evade the payment of tax).
The defendant also submitted that the words complained of did not support the assertion that the fraudulent transfer was made "in order to defeat his creditors". In my opinion, it is arguable that the words complained of support that aspect of the imputation. The reference to repeated bankruptcies and the reference by Paul Barry to more than one creditor enables the low threshold test to be reached.
I propose to strike out imputation 4(c) on the ground that the unqualified assertion of transfer to the plaintiff's wife does not arise from the words complained of. Further, par 6(i) will be struck out as embarrassing surplusage.