Fairhead v West Australian Newspapers Ltd - [2006] WASC 46

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: FAIRHEAD & ORS -v- WEST AUSTRALIAN NEWSPAPERS LTD & ANOR [2006] WASC 46

CORAM: MASTER NEWNES

HEARD: 2 FEBRUARY 2006

DELIVERED : 17 MARCH 2006

FILE NO/S: CIV 2654 of 2002

BETWEEN: ALAN FAIRHEAD
First Plaintiff
DAVID REGAN & CO PTY LTD T/AS DONNYBROOK REAL ESTATE (ACN 008 724 230)
Second Plaintiff
FRANCIS BARRON STEPHENSON HAYGARTH
Third Plaintiff
AND
WEST AUSTRALIAN NEWSPAPERS LTD (ACN 008 667 632)
First Defendant
SOUTH WEST PRINTING AND PUBLISHING COMPANY LTD (ACN 008 671 065)
Second Defendant

Catchwords:

Defamation - Application to strike out statement of claim - Whether imputations capable of being conveyed by words complained of - Whether objectionable in form - Turns on own facts

Legislation:

Nil

Result:

Application successful in part

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr N D C Dillon
Second Plaintiff            :     Mr N D C Dillon
Third Plaintiff               :     Mr N D C Dillon
First Defendant             :     Ms C Galati
Second Defendant         :     Ms C Galati

Solicitors:

First Plaintiff                :     Slee Anderson & Pidgeon
Second Plaintiff            :     Slee Anderson & Pidgeon
Third Plaintiff               :     Slee Anderson & Pidgeon
First Defendant             :     Edwards Wallace
Second Defendant         :     Edwards Wallace

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

Buckeridge v Walter [2006] WASCA 22
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52
Jones v Skelton [1963] 1 WLR 1362
Lewis v Daily Telegraph Ltd [1964] AC 234

Case(s) also cited:

Associated Leisure Ltd (Phonographic Equipment Company Ltd) v Associated Newspapers Ltd [1970] 2 QB 450, [1973] All ER 754
Bargold Pty Ltd v Mirror Newspapers Ltd [1981] 1 NSWLR 9
Birmingham v West Australian Newspapers Ltd [1999] WASC 19
Bognor Regis Urban District Council v Campion [1972] 2 All ER 61
Broadway Approvals Ltd v Odhams Press Ltd (No 2) [1965] 2 All ER 523
Fred Joseph Essey v Marlene Ann Harding, unreported; SCt of WA; Library No 980652; 11 November 1998
Gardiner v Ray [1999] WASC 140
Gumina v Williams (No 1) (1990) 3 WAR 342
Hunt Australia Pty Ltd v Davidson's Arnhemland Safaris [2000] FCA 1690
London Computer Operators Training Ltd v British Broadcasting Corporation [1973] 2 All ER 170
Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663
Rubber Improvements Ltd v Daily Telegraph Ltd [1964] AC 234, [1963] 2 All ER 151
S & K Holdings Ltd v Throgmorton Publications Ltd [1972] 3 All ER 497
Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1
Smith v Littlemore (1996) 15 WAR 289
Stokes v Cowan [2004] WASC 173
Sugiarso v Pang [2002] WASC 10
Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1
Taylor v Jecks (1993) 10 WAR 309

MASTER NEWNES: This is an application by the defendants to strike out the imputations pleaded in the plaintiffs' statement of claim.

The statement of claim

In the statement of claim, the plaintiffs plead that the first plaintiff ("Mr Fairhead") was at all relevant times a licensed real estate representative employed by the second plaintiff, that the second plaintiff was a real estate agency which had operated in the Donnybrook area for over 29 years ("Donnybrook Real Estate"), and that the third plaintiff ("Mr Haygarth") was the principal of Donnybrook Real Estate and had worked as a real estate representative in the Donnybrook area for about 40 years.
It is pleaded that the first defendant ("West Australian Newspapers") is the proprietor and publisher of The West Australian newspaper and at all material times owned the entire issued share capital and was the holding company of the second defendant ("South West Printing"). South West Printing is the proprietor and publisher of The South West Times newspaper, which is distributed throughout the south west of Western Australia, including the Donnybrook area.
The plaintiffs allege that, on 14 November 2002, West Australian Newspapers published, on page 36 of The West Australian newspaper, the following words:
"A Donnybrook real estate agency has been fined $9000 under the Real Estate and Business Agents Act.
The Real Estate and Business Agents Supervisory Board levied the fines against David Regan and Co., trading in the South‑West town as Donnybrook Real Estate.
It imposed a $3000 fine and $1000 in costs on a sales representative still employed by the agency, Alan Fairhead, for failing to act fairly and honestly.
Other fines were imposed on the agency's licence holder, Jenni Nabein, and the company itself, owned by Donnybrook resident Frank Haygarth.
REBA found that Mr Fairhead deliberately failed to tell a Donnybrook couple, who bought a 5.2 ha Donnybrook home and orchard through him for $287,000 in November 1998, that figures given by the vendors for that year's apple harvest figures included figures for another property not included in the sale.
REBA inspector Michelle Wakka found that the vendors gave Mr Fairhead documents which showed $94,600 was banked as a result of the 1998 harvest but between 20 and 30 per cent of the sum should have been deducted to take into account the harvest of the other property.
Documents which would have revealed the figures were for both properties were not passed on to the vendors [sic, purchasers].
The purchasers of the property said they did not wish to comment.
Mr Haygarth said an appeal period was still open and the matter was in the hands of his solicitors."
It is alleged in par 9 of the statement of claim that in their ordinary and natural meaning the words meant and were understood to mean:
"9.1Mr Fairhead had been guilty of acting:
(a)       dishonestly.
(b)       further or alternatively, deceptively.
9.2Donnybrook Real Estate employs an agent who has been found guilty of acting:
(a)       dishonestly.
(b)       further or alternatively, deceptively.
9.3Donnybrook Real Estate does not disapprove of:
(a)       dishonest;
(b)       further or alternatively, deceptive,
conduct by agents employed by Donnybrook Real Estate.
9.4Mr Haygarth is the proprietor of a business which employs an agent who has been found guilty of acting:
(a)       dishonestly.
(b)       further or alternatively, deceptively.
9.5Mr Haygarth does not disapprove of:
(a)       dishonest.
(b)       further or alternatively, deceptive,
conduct by agents employed by a business he owns."
It is then pleaded in par 10 of the statement of claim as follows:
"10.The West Australian Article was defamatory of Mr Fairhead including
10.1in the course of Mr Fairhead's trade, occupation and calling.
10.2that Mr Fairhead had committed a serious criminal offence."
It is alleged in par 16 of the statement of claim that, on 21 November 2002, South West Printing published the same words on page 16 of The South West Times newspaper. In par 17 of the statement of claim the plaintiffs plead the same imputations as are contained in par 9. It is also pleaded in par 18 that:
"18.The South West Times Article was defamatory of Mr Fairhead including:
18.1in the course of Mr Fairhead's trade, occupation and calling;
18.2that Mr Fairhead had committed a serious criminal offence."

The defendants' submissions

Two substantive complaints were made by the defendants on this application. First, that the imputations pleaded in pars 9.2 to 9.5, and the comparable pleas in pars 17.2 to 17.5, were not reasonably capable of being conveyed by the words complained of and secondly, that those pleas, and the pleas in pars 10.2 and 18.2, were objectionable in form.
It was submitted by counsel for the defendants that the plea in par 9.2 did not represent the final distillation of the defamatory sting and was not defamatory of Donnybrook Real Estate. The mere fact that a real estate agency employs a representative who has been found guilty of acting dishonestly or deceptively is not, of itself, defamatory.
It was submitted in relation to par 9.3 of the statement of claim that the double‑negative - "not disapprove" - is embarrassing because it is ambiguous or uncertain and, further, that the imputation was not reasonably capable of being conveyed. The fact that Donnybrook Real Estate had not dismissed Mr Fairhead would not, of itself, convey to a reasonable reader that Donnybrook Real Estate did not regard dishonesty or deceptive conduct with disapproval. Such an imputation could only emerge as a product of some strained, forced or utterly unreasonable interpretation.
It was submitted in respect of par 9.4 of the statement of claim that, as with par 9.2, the plea does not distil any defamatory meaning and the imputation is not defamatory of Mr Haygarth.
It was submitted that the imputation in par 9.5 of the statement of claim suffers from the same defects as the imputation in par 9.3.
It was submitted that the plea in par 10.2 of the statement of claim was embarrassing because it is not clear whether or not it is intended to be an additional imputation. Counsel argued that if it was, such an imputation is not capable of being conveyed by the words complained of. A reasonable reader would not conclude from a report that a person had been fined by the Real Estate and Business Agents Supervisory Board that the person had been guilty of a serious criminal offence.
The same objections were taken to the defamatory imputations pleaded in par 17 of the statement of claim in respect of the South West Printing article and to par 18.2, which is in the same terms as par 10.2.

The plaintiffs' submissions

In relation to par 9.2, counsel for the plaintiffs drew particular attention to the third paragraph of the words complained of, namely "[the Real Estate and Business Agents Supervisory Board] imposed a $3000 fine and $1000 in costs on a sales representative still employed by the agency, Alan Fairhead, for failing to act fairly and honestly." Counsel referred to the Shorter Oxford Dictionary definition of "still" as follows: "constantly, habitually; then or now or for the future; nevertheless, for all that, on the other hand, all the same; even, yet". He relied particularly on the definition "nevertheless, for all that". I should say that I do not understand the word "still" to be used in that sense in the words complained of, but rather in the sense of "then and now".
It was submitted that a reasonable reader would think less of a real estate agency which employed an agent who had been found guilty of acting dishonestly or deceptively.
At the hearing, counsel for the plaintiffs also sought leave to add a further defamatory imputation to the following effect:
"9.2ADonnybrook Real Estate chooses to continue to employ an agent notwithstanding the agent has been found guilty of acting (a) dishonestly; (b) further or alternatively, deceptively."
It was submitted that to the extent the imputation in par 9.2 might be read as meaning "whether or not the real estate agency knew the agent had been found guilty" of so acting, that was cured by par 9.2A. It was submitted that it is clear a reasonable reader would think less of a real estate agency which chose to continue to employ an agent who had been found guilty of acting dishonestly or deceptively.
Counsel for the plaintiffs submitted there was no ambiguity in par 9.3. The expression "not disapprove" was, at best, inelegant, but it nevertheless bore a clear meaning. Counsel submitted that the statement in the words complained of that Mr Fairhead was "still" employed by the agency would convey to a reasonable reader that, by retaining Mr Fairhead in its employment, Donnybrook Real Estate did not disapprove of the conduct imputed to Mr Fairhead.
In relation to par 9.4 of the statement of claim, counsel repeated, in essence, the submissions made in respect of par 9.2 and also sought leave to add a further imputation to the following effect:
"9.4AMr Haygarth chooses to continue to employ an agent notwithstanding the agent has been found guilty of acting (a) dishonestly; (b) further or alternatively, deceptively."
Counsel also repeated, in respect of par 9.5 the submissions he had made in relation to par 9.3.
It was submitted on behalf of the plaintiffs, in relation to par 10.2 of the statement of claim, that the plea is not intended to plead a further imputation, but goes to the nature of the alleged defamation. The same was said in relation to par 18.2 of the statement of claim.

Is the statement of claim defective?

The test to be applied in determining whether the defamatory imputations alleged are capable of being conveyed by the words complained of was discussed in the well‑known passage from the judgment of the Privy Council in Jones v Skelton [1963] 1 WLR 1362 at 1370 ‑ 1371:
"In deciding whether words are capable of conveying a defamatory meaning the court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. In Capital and Counties Bank v George Henty & Sons [1882] 7 AC 741, 745 Lord Selborne LC said:
'The test, according to the authorities, is, whether under the circumstances in which the writing was published, reasonable men, to whom the publication was made, would be likely to understand it in a libellous sense.'
The ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning: any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words. See Lewis v Daily Telegraph Ltd [1963] 2 WLR 1063; [1963] 2 All ER 151 HL(E). The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."
The person to whom it is alleged the words were spoken will be assumed to be a reasonable person, not unusually suspicious or unusually naive, nor avid for scandal. In Lewis v Daily Telegraph Ltd [1964] AC 234 Lord Reid said, at 258:
"There is no doubt that in actions for libel the question is what the words would convey to the ordinary man: it is not one of construction in the legal sense. The ordinary man does not live in an ivory tower and he is not inhibited by knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of world affairs."
Those authorities were referred to with approval by the High Court in Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 per Gleeson CJ, McHugh, Gummow and Heydon JJ at [9] ‑ [11. In that case their Honours also specifically referred to the statement of Lord Devlin in Lewis v Daily Telegraph Ltd [1964] AC 234 at 277, that ordinary readers draw implications from a text much more freely than lawyers, especially when the implications are derogatory, and observed that that was "an important reminder for judges".
In Buckeridge v Walter [2006] WASCA 22, the Court of Appeal of this Court discussed the basis upon which an imputation will be struck out. The Court of Appeal said:
"It is also settled that an imputation will be struck out only if it is plainly incapable of being conveyed by the words complained of or, to use the words of Hunt J in Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 675, if the imputation is 'so clearly untenable that it cannot possibly succeed': Taylor v Jecks (1993) 10 WAR 309 at 313. In Favell, Gleeson CJ, McHugh, Gummow and Heydon JJ, at 1719 [6], approved the following extract from the judgment of McPherson JA in the Queensland Court of Appeal:
'Whether or not [the pleading] ought to and will be struck out [as disclosing no cause of action] is ultimately a matter for the discretion of the judge who hears the application. Such a step is not to be undertaken lightly but only, it has been said, with great caution. In the end, however, it depends on the degree of assurance with which the requisite conclusion is or can be arrived at. The fact that reasonable minds may possibly differ about whether or not the material is capable of a defamatory meaning is a strong, perhaps an insuperable, reason for not exercising the discretion to strike out. But once the conclusion is firmly reached, there is no justification for delaying or avoiding that step [at] whatever stage it falls to be taken.' "
In that case, Steytler P went on to say (at [4]):
"I should add … my respectful endorsement of the comments made by Kirby J in Favell at 1722 to the effect that courts should discourage, or minimise, the impediment to a fair trial presented by the process of 'trial by interlocutory ordeal', which is especially prevalent in defamation proceedings."
To the same effect, see also Pullin JA at [22].
I do not consider that pars 9.2 and 9.4 of the statement of claim are capable of being defamatory of Donnybrook Real Estate and Mr Haygarth respectively. In my view, an imputation that a real estate agency employs a licensed representative who has been found guilty of acting dishonestly or deceptively, or an imputation that Mr Haygarth is the proprietor of a business which employs such a representative, is not, without more, capable of defaming the plaintiffs.
It does not seem to me that the proposed amendment to add par 9.2A overcomes that difficulty. I do not consider that a reasonable reader might think less of a real estate agency simply because it chooses to continue to employ a licensed representative who had been found guilty of dishonest or deceptive conduct.
To conclude otherwise would, in effect, be to accept that there might be attributed to the ordinary reasonable member of the community the view that, regardless of the circumstances, a real estate agent should not employ, or continue to employ, a licensed real estate representative if that person has been found guilty of any dishonest or deceptive conduct. I do not consider that such a rigid, indeed quite unforgiving, attitude is capable of being so attributed. Something more than is pleaded would be required, but nothing further has been distilled in the imputation.
I consider that the imputations pleaded in par 9.3 and 9.5 are arguably capable of being conveyed by the words complained of and are arguably defamatory of Donnybrook Real Estate and Mr Haygarth respectively. In particular, the statement in the article that, although Mr Fairhead had been fined and ordered to pay costs for failing to act fairly and honestly, he was "still employed by the agency" is arguably capable of conveying to a reasonable reader the meaning that Donnybrook Real Estate and Mr Haygarth do not disapprove of the conduct of which the article says Mr Fairhead has been found guilty.
In Favell v Queensland Newspapers Pty Ltd (supra), Gleeson CJ, McHugh, Gummow and Heydon JJ commented (at [14]) that "[a]n article which gives otherwise irrelevant prominence to the existence of smoke may be found to suggest the existence of fire." I would respectfully add that emphasis, in this case what is arguably emphasis on Mr Fairhead's continued employment by Donnybrook Real Estate, may have a similar effect.
I do not think that the expression "not disapprove" is objectionable. Even if it is somewhat lacking in elegance (a matter on which I need not express an opinion), the meaning is sufficiently clear and I do not consider it gives rise to any embarrassment.
I accept the plaintiffs' complaints about par 10.2 of the statement of claim. On its face, the plea appears to be a further imputation and in that form it is apt to cause confusion at trial.

The same considerations apply to pars 17.2, 17.4 and 18.2 of the statement of claim. I would therefore strike out pars 9.2, 9.4, 10.2, 17.2, 17.4 and 18.2 and would refuse leave to amend in the terms proposed in pars 9.2A, 9.4A, 17.2A and 17.4A.
There was a further objection by the defendants to par 24.4 of the statement of claim. That pleads, in essence, that although prior to publication of The South West Times article, West Australian Newspapers had been given notice that the article in The West Australian was inaccurate and defamatory, West Australian Newspapers did not withdraw the article or the substance of it from publication, with the result that The South West Times article was published.
In the course of argument, counsel for the plaintiffs sought to amend par 24.4 to plead, in effect, that West Australian Newspapers did not withdraw The West Australian newspaper article, or the substance of it, from publication in The South West Times newspaper with the result that the article was published in The South West Times newspaper. That plea was based upon the allegation in par 24.2 that, at any time prior to the publication of The South West Times article, West Australian Newspapers could have withdrawn the article or the substance of it from publication in The South West Times. In the light of those amendments, I did not understand counsel for the defendants to press the complaint in relation to par 24.4. In any event, in my view the amendment overcomes any difficulty that may have existed with the original plea.

Conclusion

The result is that I would strike out pars 9.2, 9.4, 10.2, 17.2, 17.4 and 18.2 and would refuse leave to amend in the terms proposed in pars 9.2A, 9.4A, 17.2A and 17.4A. I would otherwise dismiss the application. I will hear the parties on the appropriate form of orders and on costs.