Branch v Papyrus Australia Ltd

Case [2019] FCA 1879

FEDERAL COURT OF AUSTRALIA

Branch v Papyrus Australia Ltd [2019] FCA 1879

File number: TAD 9 of 2019
Judge: WHEELAHAN J
Date of judgment: 14 November 2019
Catchwords: PRACTICE AND PROCEDURE – application for summary judgment – application to strike out applicant’s amended statement of claim – pleading embarrassing – pleading unnecessarily long and confusing – statement of claim struck out entirely – leave to re-plead granted.
Legislation:

Defamation Act (NSW) 2005, ss 8, 25, 30(4), 36

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules 2011 (Cth) rr 16.21, 26.01

Cases cited:

A v Ipec Australia Ltd [1973] VR 39

Andrews v John Fairfax Ltd [1980] 2 NSWLR 225

Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125

Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30

Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674

Browne v Dunn (1893) 6 R 67

Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44

Cock v Hughes [2001] WASC 24

Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86

Coyne v Citizen Finance Ltd (1991) 172 CLR 211

Dow Jones and Company Inc v Gutnick (2002) 210 CLR 575

Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135

Fullam v Newcastle Chronicle and Journal Ltd [1977] 1 WLR 651

Grappelli v Derek Block (Holdings) Ltd [1981] 1 WLR 822

Gumina v Williams (No 1) (1990) 3 WAR 342

Harbour Radio Pty Ltd v Trad [2012] HCA 44; 247 CLR 31

Hewitt v ATP Tour Inc [2004] SASC 286

Hewitt v West Australian Newspapers Ltd (1976) 17 ACTR 15

Hughes v Mirror Newspapers Limited [1985] 3 NSWLR 504

Lazarus v Deutsche Lufthansa AG (1985) 1 NSWLR 188

Meckiff v Simpson [1968] VR 62

Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460

Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491

Spencer v Commonwealth [2010] HCA 28; 241 CLR 118

Trau v University of Sydney (1989) 34 IR 466

Triggell v Pheeney (1951) 82 CLR 497

Trkulja v Google LLC [2018] HCA 25; 263 CLR 149

Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281

Duncan and Neill on Defamation (Butterworths, 1983)

Date of hearing: 31 October 2019
Registry: Tasmania
Division: General Division
National Practice Area: Other Federal Jurisdiction
Category: Catchwords
Number of paragraphs: 53
Counsel for the Applicant: The applicant appeared in person
Counsel for the Respondents: Mr H. R. Hassan
Solicitor for the Respondents: Gilchrist Connell

ORDERS

TAD 9 of 2019
BETWEEN:

ALLAN CHARLES BRANCH

Applicant
AND:

PAPYRUS AUSTRALIA LTD (ABN 63 110 868 409)

First Respondent

EDWARD MICHAEL BYRT

Second Respondent

VINCENT PETER RIGANO (and others named in the Schedule)

Third Respondent

JUDGE:

WHEELAHAN J

DATE OF ORDER:

14 NOVEMBER 2019

THE COURT ORDERS THAT:

1.The respondents’ application for summary judgment in the proceeding be dismissed.

2.The amended statement of claim filed 5 July 2019 be struck out.

3.The applicant have…

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Details
AGLC
Branch v Papyrus Australia Ltd [2019] FCA 1879
Case
[2019] FCA 1879
Decision Date

CaseChat Overview and Summary

The case of Branch v Papyrus Australia Ltd involves the applicant, Mr Branch, who claims defamation against the respondents, Papyrus Australia Ltd and several of its directors, for omitting certain information in their annual report and accounts. The respondents sought summary judgment or an order to strike out the applicant's amended statement of claim. The legal issues in the case included whether the pleadings were sufficient to allow the defamation claim to proceed and whether the respondent's application for summary judgment or striking out should be granted. The Court found that the applicant's amended statement of claim was unnecessarily long and confusing, and it failed to clearly differentiate between imputations arising from the natural and ordinary meaning of the words and those arising as true innuendos. The Court granted leave to the applicant to file and serve a further amended statement of claim by a specified date and dispensed with the requirement to file a clean copy of the pleading. The Court also ordered that the applicant pay the respondents' costs of and incidental to their interlocutory application.

The Court's reasoning was based on the principles relating to summary judgment and striking out pleadings. The Court noted that the principles relating to summary judgment should not be exercised lightly, and the Court should only ever with great caution disallow a defamation pleading as incapable of bearing a defamatory imputation. The Court also emphasised that the test for whether a published matter is capable of being defamatory is what ordinary reasonable people would understand by the matter complained of, and the Court should bear in mind that ordinary men and women have different temperaments and outlooks, degrees of education and life experience. The Court found that the applicant's amended statement of claim did not meet the required standard and was therefore struck out.

Orders

Orders of the court

1. The respondents’ application for summary judgment in the proceeding be dismissed.

2. The amended statement of claim filed 5 July 2019 be struck out.

3. The applicant have leave to file and serve by 4.00pm on 13 December 2019 a further amended statement of claim.

4. Rule 16.59 of the Federal Court Rules 2011 (Cth) is dispensed with, so that any further amended statement of claim be filed as a clean copy, but stating the date of this order pursuant to which the amendments are made.

5. A case management hearing be fixed for 9.30am on 24 January 2020.

6. The applicant pay the respondents’ costs of and incidental to their interlocutory application dated 16 August 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In this defamation proceeding, the respondents seek orders for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules2011 (Cth) in respect of several claims made by the applicant. Alternatively, the respondents seek orders that many paragraphs of the applicant’s amended statement of claim be struck out.Background In order to identify the publications which are the subject of the applicant’s claims it is necessary to explain some of the background. In doing so, I shall summarise the allegations that are made in the amended statement of claim. The first respondent (Papyrus) is a public company that is listed on the ASX. The second to fifth respondents are directors of Papyrus, and the third respondent (Mr Rigano) is also the company secretary. The applicant alleges that he was engaged by Papyrus as its chief executive officer and managing director commencing 1 October 2017, and that he continued in those positions until 24 November 2017. The applicant alleges that the commencement and termination of his engagement was the subject of announcements by Papyrus on 3 October, 6 October, 26 October and 24 November 2017. The applicant alleges that he has been defamed as a result of the publication by the respondents of three documents –(1)the annual financial report for Papyrus for the year ending 30 June 2018;(2)the annual financial accounts for Papyrus for the year ending 30 June 2018; and(3)an email from the third respondent, Mr Rigano, to Mr Chris Dobbs of the ASX sent on 26 November 2018. The 2018 annual report and annual accounts of Papyrus are defined in the amended statement of claim as “the Material”. The applicant alleges that the Material was published to ASIC, and to the ASX, and was posted on the websites of ASIC, the ASX, and Papyrus, and was published in hard copy to shareholders and other parties. The applicant further alleges that the Material was published by mass media websites, such as HotCopper and Bloomberg. In general terms, the applicant’s claim is that the annual report and annual accounts of Papyrus for the year ending 30 June 2018 do not make any reference to the applicant’s term as chief executive officer and managing director of Papyrus during the reporting period as required by s 300(1) and s 300A of the Corporations Act 2001 (Cth), and the Listing Rules of the ASX. The applicant alleges that, by this omission, he was defamed by those publications. Following the publication by Papyrus of its annual report, the applicant made a complaint to the ASX. The substance of the complaint was that the annual report of Papyrus contained deliberate and material omissions that should be corrected. Those omissions were alleged to be –(1)the omission of the applicant from the names and details of the company’s directors in office during the relevant financial year;(2)the omission to record details of the applicant’s remuneration; and(3)the omission to report that the applicant had attended board meetings during the reporting period.The above matters are defined in paragraph 2.10 of the amended statement of claim as “Omissions”.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

There are a number of difficulties with the applicant’s amended statement of claim. Amongst other things, these difficulties result from a failure to differentiate clearly between the pleading of imputations that are alleged to arise upon the natural and ordinary meaning of the words, and those imputations that are alleged to arise as true innuendos. In relation to the use of the term “True Innuendo” in the pleading, it is not always clear on the face of the pleading what extrinsic facts are relied upon to support the true innuendos, and it is not always clear what persons are alleged to have had knowledge of those extrinsic facts. In relation to the publication of the Material, the applicant has not identified any persons to whom the publications are alleged to have been made who had knowledge of relevant extrinsic facts. Further, the extrinsic facts on which the applicant would seek to rely are not clearly alleged. A further issue that arises is that it would appear that the applicant might be seeking to allege that imputations were conveyed when the applicant, subsequent to the publication of the Material, discussed with third parties his tenure at Papyrus: see paragraph 12.5 of the amended statement of claim set out at [12] above. In respect of that allegation, there is no plea that the Material was published to those persons.Principles relating to summary judgment and striking out pleadings The principles relating to summary judgment are well-known. The Court’s powers under s 31A of the Federal Court Act 1976 (Cth) and under r 26.01(1) of the Federal Court Rules 2011 (Cth) to dismiss a proceeding summarily on the ground that the applicant has no reasonable prospect of successfully prosecuting the proceeding, or part of the proceeding, should not be exercised lightly: Trkulja v Google LLC [2018] HCA 25; 263 CLR 149 at [23]; Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [60]. Where the issue in contention is whether imputations alleged by an applicant to support a defamation claim should be the subject of summary determination, the principles were stated by the High Court in Trkulja at [30]-[32] as follows –[30]The question of whether words or images complained of are capable of conveying a pleaded defamatory imputation is a question of law which permits of only one correct answer. It is, however, a question about which reasonable minds may sometimes differ, and, consequently, it is only ever with great caution that a defamation pleading should be disallowed as incapable of bearing a defamatory imputation. The potential for difference about the capacity of matters to convey different meanings is an equally strong reason for declining to set aside a proceeding on the basis that an impugned publication is incapable of bearing the defamatory imputation alleged. And it is to be remembered that on an application for summary dismissal such as this, the plaintiff’s case as to the capacity of the publications to defame is to be taken at its highest.[31]The test for whether a published matter is capable of being defamatory is what ordinary reasonable people would understand by the matter complained of. In making that assessment, it is necessary to bear in mind that ordinary men and women have different temperaments and outlooks, degrees of education and life experience. As Lord Reid observed in Lewis v Daily Telegraph Ltd, “[s]ome are unusually suspicious and some are unusually naive”. So also are some unusually well-educated and sophisticated while others are deprived of the benefits of those advantages. The exercise is, therefore, one of attempting to envisage a mean or midpoint of temperaments and abilities and on that basis to decide the most damaging meaning that ordinary reasonable people at the midpoint could put on the impugned words or images considering the publication as a whole.[32]As the Court of Appeal of England and Wales observed in Berezovsky v Forbes Inc, that exercise is one in generosity not parsimony. The question is not what the allegedly defamatory words or images in fact say or depict but what a jury could reasonably think they convey to the ordinary reasonable person; and it is often a matter of first impression. The ordinary reasonable person is not a lawyer who examines the impugned publication over-zealously but someone who views the publication casually and is prone to a degree of loose thinking. He or she may be taken to “read between the lines in the light of his general knowledge and experience of worldly affairs”, but such a person also draws implications much more freely than a lawyer, especially derogatory implications, and takes into account emphasis given by conspicuous headlines or captions. Hence, as Kirby J observed in Chakravarti, “[w]here words have been used which are imprecise, ambiguous or loose, a very wide latitude will be ascribed to the ordinary person to draw imputations adverse to the subject”.[Footnotes and citations omitted]

Ratio Decidendi

Legal Principle Established

The applicant submitted that the claims for damages that he makes include claims for economic loss, including a general downturn in his business: see Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674; Andrews v John Fairfax Ltd [1980] 2 NSWLR 225, and that insofar as a claim for economic loss was made, it was not subject to the statutory cap in s 35 of the Defamation Act 2005 (NSW) or corresponding provisions.ConsiderationOverview In Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125 at [15]-[19] the Full Court explained that general principles of pleading invariably require that a respondent to a defamation proceeding is entitled to know what defamatory imputations are relied upon by an applicant. That is because an applicant’s case at trial will be shaped by the meanings that are alleged, and because the availability of many defences available to a respondent, such as truth and comment, are defences of confession and avoidance which fall to be considered after the question of meaning is determined. The pleading of meanings is therefore a significant and important component of an applicant’s case. There are a number of difficulties with the applicant’s amended statement of claim. Amongst other things, these difficulties result from a failure to differentiate clearly between the pleading of imputations that are alleged to arise upon the natural and ordinary meaning of the words, and those imputations that are alleged to arise as true innuendos. In relation to the use of the term “True Innuendo” in the pleading, it is not always clear on the face of the pleading what extrinsic facts are relied upon to support the true innuendos, and it is not always clear what persons are alleged to have had knowledge of those extrinsic facts. In relation to the publication of the Material, the applicant has not identified any persons to whom the publications are alleged to have been made who had knowledge of relevant extrinsic facts. Further, the extrinsic facts on which the applicant would seek to rely are not clearly alleged. A further issue that arises is that it would appear that the applicant might be seeking to allege that imputations were conveyed when the applicant, subsequent to the publication of the Material, discussed with third parties his tenure at Papyrus: see paragraph 12.5 of the amended statement of claim set out at [12] above. In respect of that allegation, there is no plea that the Material was published to those persons.Principles relating to summary judgment and striking out pleadings The principles relating to summary judgment are well-known. The Court’s powers under s 31A of the Federal Court Act 1976 (Cth) and under r 26.01(1) of the Federal Court Rules 2011 (Cth) to dismiss a proceeding summarily on the ground that the applicant has no reasonable prospect of successfully prosecuting the proceeding, or part of the proceeding, should not be exercised lightly: Trkulja v Google LLC [2018] HCA 25; 263 CLR 149 at [23]; Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [60]. Where the issue in contention is whether imputations alleged by an applicant to support a defamation claim should be the subject of summary determination, the principles were stated by the High Court in Trkulja at [30]-[32] as follows –[30]The question of whether words or images complained of are capable of conveying a pleaded defamatory imputation is a question of law which permits of only one correct answer. It is, however, a question about which reasonable minds may sometimes differ, and, consequently, it is only ever with great caution that a defamation pleading should be disallowed as incapable of bearing a defamatory imputation. The potential for difference about the capacity of matters to convey different meanings is an equally strong reason for declining to set aside a proceeding on the basis that an impugned publication is incapable of bearing the defamatory imputation alleged. And it is to be remembered that on an application for summary dismissal such as this, the plaintiff’s case as to the capacity of the publications to defame is to be taken at its highest.[31]The test for whether a published matter is capable of being defamatory is what ordinary reasonable people would understand by the matter complained of. In making that assessment, it is necessary to bear in mind that ordinary men and women have different temperaments and outlooks, degrees of education and life experience. As Lord Reid observed in Lewis v Daily Telegraph Ltd, “[s]ome are unusually suspicious and some are unusually naive”. So also are some unusually well-educated and sophisticated while others are deprived of the benefits of those advantages. The exercise is, therefore, one of attempting to envisage a mean or midpoint of temperaments and abilities and on that basis to decide the most damaging meaning that ordinary reasonable people at the midpoint could put on the impugned words or images considering the publication as a whole.[32]As the Court of Appeal of England and Wales observed in Berezovsky v Forbes Inc, that exercise is one in generosity not parsimony. The question is not what the allegedly defamatory words or images in fact say or depict but what a jury could reasonably think they convey to the ordinary reasonable person; and it is often a matter of first impression. The ordinary reasonable person is not a lawyer who examines the impugned publication over-zealously but someone who views the publication casually and is prone to a degree of loose thinking. He or she may be taken to “read between the lines in the light of his general knowledge and experience of worldly affairs”, but such a person also draws implications much more freely than a lawyer, especially derogatory implications, and takes into account emphasis given by conspicuous headlines or captions. Hence, as Kirby J observed in Chakravarti, “[w]here words have been used which are imprecise, ambiguous or loose, a very wide latitude will be ascribed to the ordinary person to draw imputations adverse to the subject”.[Footnotes and citations omitted]