Fortescue Metals Group Ltd v Hawkins
[2006] WASC 55
FORTESCUE METALS GROUP LTD -v- HAWKINS & ANOR [2006] WASC 55
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 55 | |
| Case No: | CIV:1992/2005 | 16 FEBRUARY 2006 | |
| Coram: | MASTER NEWNES | 31/03/06 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application successful in part | ||
| B | |||
| PDF Version |
| Parties: | FORTESCUE METALS GROUP LTD (ACN 002 594 872) SIMON HAWKINS YAMATJI MARLPA BARNA BABA MAAJA ABORIGINAL CORPORATION |
Catchwords: | Defamation Application to strike out statement of claim Whether imputations capable of being conveyed Turns on own facts |
Legislation: | Nil |
Case References: | Buckeridge v Walter [2006] WASCA 22 Favell & Anor v Queensland Newspapers Pty Ltd [2004] QCA 135 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 Gumina v Williams (No 1) (1990) 3 WAR 342 Lewis v Daily Telegraph Ltd [1964] AC 234 Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 Privy Council in Jones v Skelton [1963] 1 WLR 1362 Taylor v Jecks (1993) 10 WAR 309 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
SIMON HAWKINS
First Defendant
YAMATJI MARLPA BARNA BABA MAAJA ABORIGINAL CORPORATION
Second Defendant
Catchwords:
Defamation - Application to strike out statement of claim - Whether imputations capable of being conveyed - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Application successful in part
Category: B
Representation:
Counsel:
Plaintiff : Mr J C Giles
First Defendant : Mr S M Davies
Second Defendant : Mr S M Davies
Solicitors:
Plaintiff : Solomon Brothers
First Defendant : Phillips Fox
Second Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Buckeridge v Walter [2006] WASCA 22
Favell & Anor v Queensland Newspapers Pty Ltd [2004] QCA 135
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52
Gumina v Williams (No 1) (1990) 3 WAR 342
Lewis v Daily Telegraph Ltd [1964] AC 234
Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293
Privy Council in Jones v Skelton [1963] 1 WLR 1362
Taylor v Jecks (1993) 10 WAR 309
Case(s) also cited:
Nil
(Page 3)
1 MASTER NEWNES: This is an application by the defendants to strike out certain paragraphs of the plaintiff's re-amended statement of claim on the ground that those paragraphs do not disclose any reasonable cause of action or are embarrassing.
The plaintiff's claim
2 In the statement of claim, the plaintiff pleads that it is and was at all material times a company listed on the Australian Stock Exchange ("ASX") and the proponent of an iron ore mining and related infrastructure project in the Pilbara region. It is alleged that the plaintiff is the holder or likely holder of various leases, licences or permits over areas of land which are the subject of native title claims by various groups of Aboriginal people, including the Nyiyaparli people.
3 The first defendant is the executive director of the second defendant. The second defendant is an Aboriginal corporation which represents the Nyiyaparli people, an Aboriginal people who claim native title rights over parts of the land over which the plaintiff requires certain leases, licenses and permits.
4 It is pleaded that, on 16 August 2005, the first defendant published, and the second defendant caused to be published, to media organisations throughout Australia the following words:
"MEDIA RELEASE
Tuesday, August 16, 2005
- LAND COUNCIL PROTESTS TO ASX, ASIC ON FMG TACTICS
A major Aboriginal land council today sought intervention by the Australian Securities & Investment Commission (ASIC) and the Australian Stock Exchange (ASX) over a controversial land access agreement between Fortescue Metals Group and the Nyiyaparli people in the Pilbara.
The move follows a protest the previous day by the Pilbara Native Title Service (PNTS) to the Western Australian Department of Industry and Resources.
PNTS Executive Director Simon Hawkins said in Perth: 'FMG obtained the agreement with the Nyiyaparli without them having legal advice or representation at the relevant meeting. Of course, this agreement is extremely valuable to FMG as it
- gives the company unfettered access all of Nyiyaparli country, which includes the bulk of FMG's iron ore reserves.
'Also, English is a second language to most of the Nyiyaparli and most of those who signed this agreement have told PNTS that they did not understand it.
'Of course the Nyiyaparli People are open to good faith negotiations with FMG about mining in their country.
'But any agreement must be fair. It should follow the protocols laid down to achieve proper governance around these agreements. There must not be under-hand tactics employed.
'The PNTS and other land councils exist to see that traditional owners DO understand proposed agreements and that they have proper legal representation.
'Most companies act responsibly and we encourage this to avoid bad practices which will disadvantage traditional owners.
'We thought we had left all of these practices by mining companies back in the '70s. But here we go again. These practices may also raise issues under the Trade Practices Act.
'We call on the Australian Investment & Securities Commission (ASIC) and the Australian Stock Exchange to inquire into these practices. Company announcements based on shoddily-obtained agreements have a serious chance of causing consumers and the investor public to be misled.
'Surely, the regulatory authorities cannot approve of such practices.'
Mr Hawkins said the PNTS, on the instructions of the Nyiyaparli People, had put FMG on notice that if FMG did not return to a proper process of negotiation with the PNTS regarding the Nyiyaparli agreement the PNTS would be forced to take legal action to restore equity to the process."
5 It is pleaded that in its ordinary and natural meaning the media release meant and was understood to mean:
(Page 5)
- "5.1 in dealing with the Nyiyaparli People, the plaintiff had engaged in underhand tactics to obtain substantial financial benefit for itself;
5.2 in relation to a contract between the plaintiff and the Nyiyaparli People, the plaintiff made an announcement to the ASX which it knew was likely to mislead the market."
6 The plaintiff also pleads, in par 7 of the statement of claim, a separate publication by the first defendant, made on or about 16 August 2005, which omits the first three paragraphs and the last paragraph of the media release, but otherwise is in identical terms.
7 In pars 8.1 and 8.2 of the statement of claim, the plaintiff pleads the same imputations in respect of that publication as are pleaded in pars 5.1 and 5.2 in respect of the media release.
8 The defendants seek to strike out each of the imputations, contending that they are not capable of being conveyed by the words complained of.
The principles to be applied
9 The principles to be applied on an application of this nature were not in issue between the parties. Imputations will be struck out at this stage if they are plainly incapable of being conveyed by the words complained of: Gumina v Williams (No 1) (1990) 3 WAR 342, at 346; Taylor v Jecks (1993) 10 WAR 309, at 319.
10 The principles to be applied in determining whether the defamatory imputations alleged are capable of being conveyed by the words complained of were 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.'
(Page 6)
- 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."
11 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:
"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."
12 In that case, Lord Devlin said:
"When an imputation is made in a general way, the ordinary man is not likely to distinguish between hints and allegations, suspicion and guilt. It is the broad effect that counts and it is no use submitting to a judge that he ought to dissect the statement before he submits it to the jury … it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire …"
13 There is, however, an important distinction to be drawn between the ordinary reasonable reader's understanding of a publication, drawing on their own knowledge and experience of human affairs, and conclusions which a reader may draw because the publication excites in them a belief
(Page 7)
- or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is determined by the former, not by the latter: Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 per Mason J at 301.
14 In Favell v Queensland Newspapers Pty Ltd [2005] HCA 52, Gleeson CJ, McHugh, Gummow and Heydon JJ at [6] referred with approval to the judgments of Lord Reid and Lord Devlin in Lewis v Daily Telegraph (supra) and also referred to the following passage from the judgment of McPherson JA in the Queensland Court of Appeal (Favell & Anor v Queensland Newspapers Pty Ltd [2004] QCA 135):
"Whether or not a pleading ought to 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 matter 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, conclusion 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."
15 In Buckeridge v Walter [2006] WASCA 22, the Court of Appeal (at [4], [23]) endorsed the comments of Kirby J in Favell v Queensland Newspapers Pty Ltd, to the effect that excessive refinement of pleading issues is to be discouraged and 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.
The defendants' submissions
16 It was submitted on behalf of the defendants that the meaning pleaded in par 5.1 is not capable of arising from the matter complained of because there is nothing which could support a plea that the plaintiff had obtained "substantial financial benefit". Counsel argued that the fact that something was described as valuable was not capable of conveying a meaning that the plaintiff had obtained a substantial financial benefit for itself. Things may be valuable for many reasons that are not financial. While it might be understood that by entering into the agreement the plaintiff had obtained something of value, that was quite a different
(Page 8)
- meaning to obtaining a substantial financial benefit. An agreement of this nature might result in no financial benefit to the plaintiff.
17 In relation to par 8.1 of the statement of claim, it was submitted by counsel for the defendants that the imputation was even more plainly untenable. There was simply no reference at all in those words to the value of the agreement to the plaintiff.
18 Counsel for the defendants argued in relation to pars 5.2 and 8.2 that there was nothing in the words complained of that was capable of conveying an imputation that the plaintiff knew the announcement was likely to mislead the market. It was one thing to say that an announcement made by a person may mislead the public and another thing to say that the person making the announcement made it in the knowledge that it may mislead the market. A reader who arrived at the latter conclusion did so not as a result of an understanding of what the media release was saying but rather because the media release excited in them a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff.
The plaintiff's submissions
19 In relation to par 5.1 of the statement of claim, counsel for the plaintiff specifically referred to the parts of the media release in which statements are made as to the agreement being extremely valuable to the plaintiff because it gave unfettered access to the bulk of the plaintiff's iron ore reserves and also to the parts in which reference is made to statements addressed to the ASIC and ASX. The ordinary reasonable reader would know that the ASIC was concerned with the regulation of the plaintiff's affairs and the statements to the ASX related to the value of the shares in the plaintiff.
20 Counsel submitted that, particularly in that light, an ordinary reader would understand that the plaintiff, by reaching an agreement which allowed it to mine the bulk of its iron ore reserves, had obtained a substantial financial benefit. Indeed, an agreement would only be extremely valuable to a mining company if it did confer a substantial financial benefit.
21 In relation to the imputation pleaded in par 8.1 of the statement of claim, counsel submitted that the ordinary reader would understand that mining companies exist to obtain financial benefits by mining and that an agreement which allowed a mining company to mine an area the subject of a native title claim was likely to confer a substantial financial benefit
(Page 9)
- on the mining company. A reader would also understand from the words complained of that an announcement had been made to the ASX in relation to the agreement, which would indicate that the agreement was of substantial financial benefit to the plaintiff.
22 In respect of the imputation pleaded in pars 5.2 and 8.2 respectively of the statement of claim, it was argued on behalf of the plaintiff that the pleaded imputation was in each case the obvious meaning of the words complained of or, at most, required no more than the ordinary "reading between the lines" in which the reasonable reader would engage.
23 An ordinary member of the public would understand the publication to mean that the plaintiff had engaged in underhand conduct to reach a "shoddily-obtained" agreement that was liable to be set aside, so that any announcement about the agreement would have a serious chance of causing consumers and the investor public to be misled. Each element of the conduct attributed to the plaintiff, if true, would necessarily be within the knowledge of the plaintiff when it made the announcement. A reasonable reader would therefore understand the publication to mean that the plaintiff had made an announcement that it knew was likely to mislead the market. A reader would not understand it in the sense that the plaintiff had innocently made an announcement that was likely to mislead the market.
Are the imputations capable of being conveyed?
24 In my view, the imputation pleaded in par 5.1 of the statement of claim is arguably capable of being conveyed by the media release. The agreement is described as "extremely valuable to FMG as it gives the company unfettered access to all of Nyiyaparli country, which includes the bulk of FMG's iron ore reserves". It also arguably appears from the media release that the agreement has been the subject of an announcement by the plaintiff to the ASX. I accept that in the circumstances it is arguable that a reasonable reader would understand the words to mean that the plaintiff had engaged in the conduct to obtain substantial financial benefit, that is, an agreement of substantial financial value.
25 As to par 8.1, the words pleaded in par 7 of the statement of claim omit the reference of the value of the agreement to the plaintiff or the fact that it gave unfettered access to the iron ore reserves. But it also appears from those words that the agreement will allow the plaintiff to mine in the country of the Nyiyaparli people and that it has been the subject of an announcement by the plaintiff to the ASX. On balance, I consider it is arguable that reasonable reader would understand that the plaintiff had
(Page 10)
- gained a substantial financial benefit and therefore I would not strike out the imputation.
26 I do not consider that the words complained of are capable of bearing the meaning pleaded in pars 5.2 and 8.2 respectively of the statement of claim. That is, I do not consider they are arguably capable of conveying the meaning that in making an announcement to the ASX the plaintiff knew it was likely to mislead the market.
27 To say that there was a serious chance of the market being misled by an announcement is quite a different thing to saying that the person making the announcement did so in the knowledge that there was a serious chance the market would be misled. It is evident from the media release that the chance the market would be misled rests on the prospect that "shoddily obtained agreements", obtained by the practices referred to, may later be set aside or subject to alteration, so there was a serious chance that in such cases consumers and the investor public may be misled as to the real significance of an announced agreement.
28 But that is not to suggest that in the present case the plaintiff had made an announcement to the ASX in the knowledge that the agreement in question would, or might, be subject to renegotiation or alteration. In my view, there is nothing in the media release which is capable of leading a reasonable reader to understand it to mean that, at the time any announcement had been made by the plaintiff (as to which, I should observe, nothing is said), the plaintiff believed that the agreement in question would, or might, be subject to renegotiation or alteration and that the announcement was likely to mislead the market.
29 In the present case, to move from the conclusion that the plaintiff had made an announcement that had a serious chance of misleading the public, to the conclusion that the plaintiff had made an announcement in the knowledge that the announcement was likely to mislead the public, is to take a substantial step. In the present case, to take that step, in my view, is to do more than read between the lines in the manner of a reasonable reader. It is to proceed to arrive at a conclusion on the basis of the belief or prejudice of the reader, not from a reasonable understanding of the words complained of.
Conclusion
30 I would therefore strike out pars 5.2 and 8.2, and otherwise dismiss the application. I would give leave to the plaintiff to re-plead. I will hear the parties on the question of costs.
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