Craftsman Homes Australia Pty Ltd v Nine Network Australia Pty Ltd

Case

[2002] NSWSC 555

25 June 2002

No judgment structure available for this case.
CITATION: Craftsman Homes Australia Pty Ltd & Ors v Nine Network Australia Pty Ltd & Ors [2002] NSWSC 555
CURRENT JURISDICTION: Common Law
FILE NUMBER(S): SC 20085 OF 2002
HEARING DATE(S): 12 June 2002
JUDGMENT DATE: 25 June 2002

PARTIES :


CRAFTSMAN HOMES AUSTRALIA PTY LTD(First Plaintiff)
ILVARIY PTY LTD (t/as CRAFTSMAN HOMES NORTHERN RIVERS AND CRAFTSMAN HOMES SOUTH-WEST SYDNEY) (Second Plaintiff)
FREDERICK ROBERT COX (Third Plaintiff)

v

NINE NETWORK AUSTRALIA PTY LTD (First Defendant)
MIKE MUNRO (Second Defendant)
BEN FORDHAM (Third Defendant)
WAYNE MOSS (Fourth Defendant)
JACLYN BURROWS-MOSS (Fifth Defendant)
NOEL ALLEN (Sixth Defendant)
ANNE ALLEN (Seventh Defendant)
IAN VIMPANY (Eighth Defendant)
GLORIA VIMPANY (Ninth Defendant)
JUDGMENT OF: Levine J
COUNSEL :

AB Shand QC
B Kinsella
(First, Second and Third Plaintiffs)

B McClintock SC
(First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth and Ninth Defendants)
SOLICITORS:

Walters Solicitors
(First, Second and Third Plaintiffs)

Gilbert & Tobin
(First, Second and Third Defendants)
CATCHWORDS: Defamation - multiple defendants - liability for publication - requirement for proper pleading and particularization - identification - imputations - capacity
CASES CITED: Greek Herald Pty Ltd v Nickolopoulos [2000] NSWCA 4
Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260
Sarma v The Federal Capital Press of Australia Pty Ltd [2002] NSWCA 93
DECISION: See paragraph 21


2

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      djl:1
      [2002] nSWSC 555
      IN THE SUPREME COURT
      OF NEW SOUTH WALES
      COMMON LAW DIVISION
      DEFAMATION LIST

      JUSTICE DAVID LEVINE

      TUESDAY 25 JUNE 2002

      20085 OF 2002

      CRAFTSMAN HOMES AUSTRALIA PTY LTD
      (First Plaintiff)
      ILVARIY PTY LTD (t/as CRAFTSMAN HOMES NORTHERN RIVERS AND CRAFTSMAN HOMES SOUTH-WEST SYDNEY)
      (Second Plaintiff)
      FREDERICK ROBERT COX
      (Third Plaintiff)

      V

      NINE NETWORK AUSTRALIA PTY LTD
      (First Defendant)
      MIKE MUNRO
      (Second Defendant)
      BEN FORDHAM
      (Third Defendant)
      WAYNE MOSS
      (Fourth Defendant)
      JACLYN BURROWS-MOSS
      (Fifth Defendant)
      NOEL ALLEN
      (Sixth Defendant)
      ANNE ALLEN
      (Seventh Defendant)
      IAN VIMPANY
      (Eighth Defendant)
      GLORIA VIMPANY
      (Ninth Defendant)
      JUDGMENT (Defamation – multiple defendants – liability for publication – requirement for proper pleading and particularisation –identification – imputations – capacity)

1 The three plaintiffs sue nine defendants in respect of two publications on Channel Nine’s “A Current Affair” in February 2002. The first publication is what is described as a “promo” published on the evening of 26 February 2002. The second matter complained of is the program’s segment promoted the night before, and published on 27 February 2002.

2 A transcript of the “promo” published on 26 February 2002 is appended hereto as appendix A and the transcript of the program published on 27 February 2002 is appended hereto as appendix B.

3 From the second matter complained of there has been omitted, and the plaintiffs have agreed to plead it, what is described as a “disclaimer” spoken by Mr Munro at the end of the program in the following terms:


          “We want to make it clear that Fred Cox runs only the Craftsman Homes Northern Rivers New South Wales. We are certainly not casting doubt on any other Craftsman Homes’ franchises”.

4 A multiplicity of objections has been taken by the defendants to the manner of pleading in respect of each program sued upon.

5 In the first program, that is, the “promo”, none of the plaintiffs are identified by name. The third plaintiff, Mr Cox, is certainly visually portrayed. The “promo” however contains at one point a visual image of what I will describe as the “Craftsman Homes” logo. In this regard it is my view that it would be highly desirable and prudent for the plaintiffs to provide particulars of identification. Insofar as I understood it, one of the contentions for the defendants in relation to both programs is that there is no basis upon which the first plaintiff could be capable in any event of being identified. This point is made specifically in relation to the second matter complained of however, in my view, in the light of the deficiencies in pleading matters going to identification, it is not irrelevant to the first program.

6 Attention is drawn to the first plaintiff being described in paragraph 1 of the Statement of Claim as being in “the business of franchising the construction of residential homes”. The second plaintiff is described in paragraph 2 of the pleading as being in the business of “construction of residential homes trading as Craftsman Homes Northern Rivers and Craftsman Homes South-West Sydney”. Of critical importance however is what is averred in the third paragraph of the Statement of Claim namely that the third plaintiff, Mr Cox, is the managing director of both the first and second plaintiffs. No doubt account will be taken of this in relation to the identification particulars.

7 The next objection taken by the defendants arises from the plaintiff’s decision to sue the fourth to ninth defendants. These are persons recorded as making complaints, to put it generally. What the plaintiff has failed to do in relation to the first and second program is to plead and particularise a basis for which each of those defendants could be held to be liable for the whole of the matter published by the first second and third defendants (which I will compositely describe as Channel Nine) or as liable for what each of the other of the fourth to ninth defendants published to Channel Nine and its republication. In respect of both the first and second matters complained of, as was suggested by Mr McClintock SC, this component of the pleading will require “major surgery” if the three plaintiffs persist in having the fourth to ninth defendants remain as defendants. I can only suggest that the most serious consideration be given by the plaintiffs to the question of whether or not these persons should be maintained on the record.

8 The next complaint made by the defendants in relation to the first matter complained of relates to the imputations. The imputations pleaded are:

          “6(a) that the Plaintiffs were guilty of shoddy building practices;
          (b) that the Plaintiffs were incompetent as building contractors;
          (c) that the Plaintiffs were unfit to remain in the business of building residential houses”.

9 No objection was taken to imputations (a) and (b). The objection taken to (c) is that it is incapable of arising from the matter complained of (the “promo”). Alternatively, the imputation is a “rhetorical” imputation which does not differ in substance from (a) and (b), and thus should be struck out as contravening SCR Pt 67 r11(3). To the extent that the question of law as to capacity to carry a given imputation was raised in connection with both programs, pursuant to SCR Pt 31 r 2 and by consent, a trial of that issue was conducted.

10 The plaintiffs assert that imputation 6(c) is capable of being carried by the matter complained of by reference to line 6: “I cannot believe that anyone can build something like this and remain in business” in particular, as well as the whole of the body of the “promo”. I accept this proposition. Does it however differ in substance from (a) and (b)? It is not suggested by the plaintiffs that imputation 6(c) is merely a “rhetorical flourish”. It is anchored in the words identified in the matter complained of. For the defendants it is contended that it falls foul of the statement of principle in Morrisv Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 at 272E-G. I am of the opinion that there is no uncertainty of import in the imputation itself, founded as it is in the matter complained of and that it does differ in substance from the specific charges in imputation 6(a) and (b).

11 I turn to the second matter complained of. The same objections are taken by the defendants with respect to pleading, or the failure to plead, the bases on which the liability of the fourth to the ninth defendants is sought to be established. That objection is well founded.

12 The second objection more particularly relevant to the second program is that it is incapable of identifying, that is being found to be published of and concerning the first plaintiff. The defendants seek to have the action dismissed against the first plaintiff. I am not prepared to take that course at this stage nor to rule that the second matter complained of is capable of being held to be published of and concerning the first plaintiff. The matter complained of on two occasions shows the logo of Craftsman Homes; at the point referred to as paragraph 16 and at the point referred to as paragraph 51. Further, the opening line of Mr Munro about “a builder who’s won several awards during his twenty years in the business” could be available for the embracing of the first plaintiff by any defamatory imputation given the fact that Mr Cox is said to be the Managing Director of both the first and second plaintiffs. Further, what is described as the “disclaimer” as Mr Shand QC argued, does not embrace the first plaintiff (of which the third plaintiff is the Managing Director) but rather other franchise holders.

13 Therefore I am not prepared presently to hold as a matter of law that the second program is incapable of being found to be published of and concerning the first plaintiff. At this stage clearly again, as I have remarked, the plaintiffs must properly particularise their case on identification.

14 The plaintiffs plead the following imputations as arising from the second matter complained of.

          “8(a) that the Plaintiffs construct homes that are riddled with faults;
          (b) that the Plaintiffs are not competent in the business of building residential homes;
          (c) that the Plaintiffs unjustifiably ignored reasonable complaints by clients about poor construction work;
          (d) that the Plaintiffs were guilty of disgraceful conduct and work in relation to the construction of a house for the Fourth and Fifth Defendants;
          (e) that the Plaintiffs were guilty of fraudulently overcharging clients”.

15 The defendants contend that imputations 8(a) and (b) are not capable of being defamatory and “should be struck out”. That would not be the appropriate order. No argument as to capacity to be carried is raised but if they are found not to be capable of being defamatory the defendants would be entitled to a verdict in respect of those causes of action.

16 The defendants rest this submission on the decision of the Court of Appeal in Sarma v The Federal Capital Press of Australia Pty Ltd [2002] NSWCA 93. There the Court was concerned with whether or not a jury’s finding that an imputation “that the plaintiff as a dancer is incompetent as a dance performer” was not defamatory was perverse. For the reasons each stated, their Honours (Stein, Santow JJA and Ipp AJA) held that the verdict was not perverse. It is simply not authority for the position that “incompetent” (imputation (b)) can never be held to be defamatory. This must be so when account is taken of the peculiar circumstances attending the imputation with which their Honours were concerned, the medium namely a newspaper article, the availability of context (Greek Herald Pty Ltd v Nickolopoulos [2000] NSWCA 4) and the medium with which I am concerned here namely a television program with its visual images of the “workmanship” or lack of it. I hold that imputations 8(a) and (b) capable of being defamatory.

17 The objection taken to imputation 8(c) was based upon the failure of the plaintiffs (now to be cured) to plead the disclaimer. It is contended by the defendants that the inclusion of those words exonerate, as it were, the first plaintiff. For the reasons stated above, of that I am not persuaded and would hold that the matter complained of is capable of carrying that imputation of the first plaintiff. Similarly I would hold in relation to imputation 8(d) and (e).

18 This is a matter in which the plaintiffs will be required to undertake that “major surgery” to which I have referred. It is also a matter, as I have mentioned, where the plaintiffs should give the most profound consideration as to whether to continue the proceedings against the fourth to the ninth defendants. If the plaintiffs choose to take the last mentioned course then further “major surgery” will be required to the Statement of Claim.

19 It thus appears to me to be inappropriate at this stage formally to rule in relation to the imputations, that is, the causes of action, until the basis on which the publication of them in relation to the plaintiffs and by all the defendants is clarified.

20 The defendants succeeded in what I shall describe as their “pleading points” which in the end were not really addressed during submissions for the plaintiffs; the plaintiffs however have succeeded generally in relation to the imputations and the capacity of the matter to be understood as being published of them. It is appropriate therefore that each party bear its own costs.

21 In the circumstances I consider the following orders appropriate:

1. The Plaintiffs have leave to file an Amended Statement of Claim in accordance with these reasons within 21 days.

2. Each of the plaintiffs and defendants are to pay its and their own costs.

3. The matter is stood over for further directions in the Registrar’s Defamation List on 26 July 2002.


9

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APPENDIX A



1. Mike Munro Well he's an award winning builder but you certainly wouldn't know it looking at some of his work tomorrow mnight we investigate some his shoddy practices which have left home owners high and dry.
2. Ian Vimpany Within two months of moving in here these tiles have all fallen off
3. Wayne Moss This problem is a result of the floor being put down incorrectly.
4. Gloria Vimpany I nearly had a nervous breakdown when they did it.
5. Noel Allan I think I have had over 100 complaints, I mean we can't list them all here with you.
6. Wayne Moss I cannot believe that anyone can build something like this and remain in business.
7. Ben Fordham to Vimpany Have you given up?
8. Ian Vimpany Yes we've given up.
9. Video of "Craftsman Homes" signage
10. Voice over
11. Fred Cox I'm sorry
12. Ben Fordham Can we just ask you a couple of more quick questions?
13. Fred Cox No
14. Ben Fordham You don't want to answer the questions, you want us to go?
15. Fred Cox Get out or I'll call the police
16. Mike Munro, Ben Fordham with that investigation tomorrow

APPENDIX B



1.Mike Munro Now to a builder who's won several awards during his twenty years in the business. But all that is cold comfort to some of his latest customers because they claim that he has left them with their dream homes that are riddled with faults and it can take years to get commitments to fix them.
2.Ben Fordham Are you signing up a new business in Sydney?
3.Fred Cox Am I
4.Ben Fordham Mmmm
5.Fred Cox Why?
6.Ben Fordham Well you've left a trail of devastation on the North Coast of New South Wales
7.Fred Cox I don't think I have, I've got nothing to say to you
8.Ben Fordham Are you proud of the houses you build?
9.Fred Cox Yep
10.Ben Fordham All of them?
11.Fred Cox Yep
12.Ben Fordham Fred Cox may be proud of his handiwork but some of his customers are far from satisfied
13.Wayne Moss What is behind us here is nothing more than a litany of errors and mistakes that no self respecting trades person would ever do.
14.Noel Allan In all I think we've had over 100 complaints I mean we can't list them all here with you
15.Gloria Vimpany I've nearly had a nervous breakdown over the bricks cause it was a great disappointment this was the last home we're going to build and we really want to get it right
16.Ben Fordham But according to Gloria and Ian Vimpany Craftsman Homes Northern Rivers made obvious mistakes.

For starters they say the brick work was supposed to be this colour but many were laid the wrong way around.

17.Gloria Vimpany We went to a lot of trouble to get these to get really nice bricks that we liked, we paid a lot more for them and to have them so poorly laid was a great disappointment
18.Wayne Moss We have a patio which has been put down on fibro sheeting which was mounted on green timber. The green timber has shrunk leaving a brick wall hanging in mid air.
19.Ben Fordham Wayne and Jacquie Moss have been waiting more than two years for their home to be completed on the New South Wales North Coast.
20.Wayne Moss This ah problem here is a result of the floor being put down incorrectly. The floor is buckled and it is also pushed the wall right out of align.
21.Jacquie Moss They totally ignored us they have not replied we have pages and pages and pages of grievances and points that we wanted addressed not one has ever been answered.
22.Wayne Moss At the last minute they rushed back and they put these engaged piers in and this is what we've got as a result of it. These engaged piers are a complete waste of time they are doing absolutely nothing to strengthen this wall.
23.Ben Fordham The moss's halted payment so now Craftsman Homes Northern Rivers is taking them to Court. They've launched a cross claim seeking damages over delays and poor workmanship. The matter is listed for hearing next month.
24.Jacquie Moss Its placed an enormous strain on our whole family we just want to be on our block of land in our own home and to get on with our lives.
25.Fred Cox The Moss's is not up for comment I'm sorry.
26.Ben Fordham They're been waiting two years to get into their place.
27.Fred Cox Well.
28.Ben Fordham I've had a look at it and it's a disgrace.
29.Fred Cox I'm sorry.
30.Ben Fordham Can we just ask you a couple more quick questions.
31.Fred Cox No, and if you don't leave I will call the Police.
32.Ben Fordham You want us to go?
33.Ian Vimpany The whole wall was left very messy covered in cement um....I've taken it on myself to clean the top part of the wall. But the bottom half of the wall I've left so we can show what a mess they did leave the bricks in and that appears right around the house in places.
34.Leanne Wilton He treated his customers like they were nothing um yeh he was just horrible.
35.Ben Fordham Why did you start to have concerns?
36.Leanne Wilton I noticed him ripping up documents, variations the clients had done um denying he ever said things he did.
37.Ben Fordham Leanne Wilton used to be a sales rep for Fred Cox but says she quit after a heated argument over her allegations he was overcharging clients.
38.Leanne Wilton One client actually did a handshake deal on some fill that was needed on his block to raise it to a flood level and they agreed that it would cost five thousand dollars um it actually blew out by about seven thousand dollars Fred never phoned them to tell them that is was actually blowing out so they just basically got a bill to say its now thirteen grand instead of instead of five.
39.Ben Fordham But he knew all along that it was going to be a thirteen thousand?
40.Leanne Wilton Oh yeh definitely oh yeh.
41.Ben Fordham What would happen if a customer complained?
42.Leanne Wilton If ever anyone hassled him about when they were getting to site then they would be put to last he'd go and start somebody else's.
43.Ben Fordham So people who complained were punished?
44.Leanne Wilton Oh definitely yeh.
45Noel Allen Well before the house was started they submitted the wrong plans to the council.
46.Ben Fordham Noel and Ann Allen are also unhappy customers
47.Noel Allen Let me show you an example of one of the problems we had with our house. The foundations are completely off centre to the footings and the bearers on top of the footings are completely off centre to the foundation blocks.
48.Ben Fordham They took Cox to the Fair Trading Tribunal and rectification work was carried out on a number of areas. Including the foundations. The Tribunal accepted a report by an engineer hired by Craftsman who declared that the rectified piers were adequate.
49.Noel Allen They say that's a proper concrete footing but it cannot be because I dug out under there and put a bit of timber there's nothing there it only just laying on top of the sand.
50.Ann Allen If you bought a car, a brand new car and it was scratched and dinted and all that sort of thing you'd want a different care wouldn't you?
51.Ben Fordham The allegations we've put to Craftsman Home Northern Rivers have all been rejected but Fred Cox refuses to give any further comment on camera despite our offers

Meanwhile Wayne Moss has this message for the builder he once trusted:

52.Wayne Moss Fred you know um the system very well you were right it did take two years, you could keep us off the job for two years but we will eventually get this house built
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Last Modified: 06/25/2002