Fred David v Youeil Abdishou

[2007] NSWSC 1195

CITATION:	Fred David & Anor v Youeil Abdishou & Ors [2007] NSWSC 1195
HEARING DATE(S):	08.10.07, 09.10.07, 10.10.07
JUDGMENT DATE :	25 October 2007
JUDGMENT OF:	Nicholas J
DECISION:	Para 60
CATCHWORDS:	DEFAMATION – pleadings – objections to imputations on grounds of capacity and form – principles considered
LEGISLATION CITED:	Uniform Civil Procedure Rules 2005 r 14.30(2)(a), r 28.2
CASES CITED:	Bass v TCN Channel Nine Pty Ltd (2003) 60 NSWLR 251 Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 John Fairfax Publications Pty Ltd [2007] HCA 28 Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186 Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255 John Fairfax Publications Pty Ltd v Rivkin (2003) 201 ALR 77 Lewis v Daily Telegraph Ltd [1964] AC 234 Malcolm v Nationwide News Pty Ltd [2007] NSWCA 254 Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669 Whelan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148
PARTIES:	Fred David – first plaintiff Suzy David – second plaintiff Youeil Abdishou – first defendant Eddy Simon David aka Eddy David – second defendant Joseph Saliba Dadisho aka Joseph Oram – third defendant Charles Kouchou – fourth defendant Fudor Manso aka Fudor Mansour aka Fred Manso aka Fred Mansour – fifth defendant Henrick Isaac – seventh defendant
FILE NUMBER(S):	SC 20117/06
COUNSEL:	T K Tobin QC/C J Dibb - plaintiffs R Weaver - first, second, third, fifth defendants no appearance – fourth defendant A T S Dawson – seventh defendant
SOLICITORS:	Hall Lawyers - plaintiffs McMahons National Lawyers – first, second, third, fifth defendants no appearance – fourth defendant Yeldham Price O’Brien Lusk – seventh defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

Nicholas J

25 October 2007

20117/06 Fred David & Anor v Youeil Abdishou & Ors

JUDGMENT

1 His Honour: These proceedings came before the court after the hearing of the s 7A trial was vacated by Hidden, J on 3 August 2007.

2 The seventh defendant applied to strike out the imputations pleaded in paras 4 and 5 of the third further amended statement of claim concerning the first and second plaintiffs respectively. The seventh defendant also applied under the notice of motion filed in court on 9 October 2007 for an order setting aside the notice to admit dated 24 August 2007 on the ground that it is an abuse of process. At the commencement of the hearing on 8 October 2007, counsel for the first, second, third and fifth defendants appeared, and was excused. The fourth defendant was called, but did not appear.

3 The hearing was spread over 8, 9 and 10 October 2007. On 9 October 2007 the plaintiffs tendered a list of the imputations which each proposes to plead in a further amended statement of claim. It became exhibit A. Some of these imputations were amended during submissions. The imputations in their final form are as set out in these reasons. Imputation (h) is referable only to the first plaintiff. The seventh defendant’s application proceeded on the basis that these were the relevant imputations. It was noted that the imputation pleaded in para 5(g) of the third further amended statement of claim was no longer pressed.

4 Submissions relevant to the application concerning the notice to admit were heard on 9 and 10 October 2007. However, further hearing was postponed until after the filing and service of pleadings consequential upon the determination of the imputation issues.

5 The seventh defendant applied to strike out the imputations on grounds of form and capacity. The questions raised by these objections proceeded as separate questions for determination under r 28.2. The principles applicable to the correct approach of the court on a strike out application on a question of capacity are now well settled. Most recently, they were reviewed in Malcolm v Nationwide News Pty Ltd [2007] NSWCA 254 by Beazley, JA who held (Basten, JA, McClellan CJ at CL agreeing) that in circumstances where reasonable persons may differ as to their understanding of the article, the matter is one that must, in accordance with authority, be left to the jury (para 30).

6 Determination of the question requires the court to have regard to a range of factors. It must keep in mind that a reasonable person can and does read between the lines in light of his general knowledge and experience of worldly affairs, and will draw implications much more freely than a lawyer, especially when they are derogatory. He is prone to engage in a certain amount of loose thinking. Each alleged imputation is to be considered in the context of the entire article. One must try to envisage people between those who are unusually suspicious and those who are unusually naive and see what is the most damaging meaning they would put on the words in question. The question of meaning turns on what the publication, taken as a whole, conveys to the reasonable reader, and this must always be a matter of impression. Ultimately, the question is what a jury could properly make of it. (See e.g. Lewis v Daily Telegraph Ltd [1964] AC 234, pp 258, 259, 277, 285; Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186, para 17, Malcolm, paras 14, 15).

7 In Lewis, Lord Devlin said (p 285):

“285 … 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; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that.”

8 The exercise of discretion in deciding whether or not an imputation should be struck out is to be undertaken with great caution. In Favell (para 6) it was said that if reasonable minds may possibly differ about whether or not the matter complained of is capable of carrying a defamation meaning that would be “… a strong, perhaps an insuperable, reason for not exercising the discretion to strike out.”

9 The matter complained of is contained in a petition (the petition) alleged to have been published by the defendants on and after 27 November 2005. Briefly summarised, the petition seeks an investigation into the conduct and involvement of professional advisors, including the plaintiffs as solicitors, of one Mr Karl Suleman in an investment scheme operated by him in the conduct of a trolley collection business. It contains matter in support of the demand for an investigation referable to the involvement of the plaintiffs and others with Mr Suleman and the schemes operation. It states that members of the Assyrian community who invested in the scheme suffered substantial losses upon its collapse. It is said that, unknown to investors, the scheme was an illegal “Ponzey” scheme which was unregistered and unlicensed. It states that the solicitors acted for community members for the purpose of raising funds for investment in the scheme in circumstances where they were close associates of Mr Suleman and lead their clients to believe that the operation of the scheme was legal, and that they were investing in a legitimate business generating large returns. Included was the statement that the scheme required registration and licence, and that the solicitors did not take any steps for registration of the scheme, remained silent in their dealings with community members, and continued their personal business with Mr Suleman. It also said:

“We ask that you investigate why these solicitors continued their business dealings with Karl Sulman (sic) in light of their knowledge or at least notice as of late 2000 that the scheme operated by Karl Suleman was unlicensed managed investment fund. The collapse of KSE occurred on 7 November 2001, and majority of our members of community invested into the scheme in the second half of 2001.”

10 Imputation (a) is:

“(a) That he has so conducted himself in his profession as a solicitor that he warranted investigation for misconduct in promoting an investment scheme among his clients knowing it to be illegal.”

11 The seventh defendant’s objection as to capacity was, firstly, on the ground that the petition was not reasonably capable of conveying the notion that the plaintiffs actually knew that the scheme was illegal. It was submitted that the only assertion of knowledge of illegality was the following passage:

“We ask that you investigate why these solicitors continued their business dealings with Karl Sulman (sic) in light of their knowledge or at least notice as of late 2000 that the scheme operated by Karl Suleman was unlicensed managed investment fund.”

12 It was accepted that, taken alone, this passage would support the imputation. However, it was argued that, read in context, the meaning of the passage is refuted or qualified by other parts of the petition read as a whole, with the result that it is not reasonably capable of conveying the imputation as pleaded. Thus it was put that the overwhelming impression conveyed is that the plaintiffs failed to inform or warn investors of features of the scheme, including requirements for registration and licence, rather than an assertion of actual knowledge of illegality on their part.

13 In John Fairfax Publications Pty Ltd v Rivkin (2003) 201 ALR 77, McHugh, JA said:

“26. … But this does not mean that the reasonable reader does or must give equal weight to every part of the publication. The emphasis that the publisher supplies by inserting conspicuous headlines, headings and captions is a legitimate matter that readers do and are entitled to take into account. Contrary statements in an article do not automatically negate the effect of other defamatory statements in the article.”

14 Relevantly, in rejecting a challenge to the trial judge’s direction to the jury, Handley, JA in Bass v TCN Channel Nine Pty Ltd (2003) 60 NSWLR 251 said (para 143):

“143. … The jury were correctly directed that an imputation conveyed by one part of the programme will be conveyed by the programme as a whole unless it was made clear that the imputation was incorrect. The question for the jury was whether the imputation was conveyed. This depended relevantly on what was spoken during the programme.”

15 In my opinion the objection fails. The passage referred to provides ample support for the imputation. Arguably, it is reinforced by other parts of the petition including the passages commencing “… It was a (sic) common knowledge in our community …” and ending with the words “investing in a legitimate trolley collection business generating very large returns”, and the passage commencing with the words “The solicitors have said that our members …” and ending with the words “… from their business dealings with him”. Whether or not there is material which makes clear the imputation is correct, is properly a question for the jury to decide.

16 A second ground of objection was that the petition was incapable of conveying an imputation a component of which was the allegation or assumption that the solicitors were guilty of misconduct. It, too, must be rejected.

17 The clear theme of the petition is that the solicitors failed to do what their professional duty required of them. It asserts that they had betrayed the community for most members of which they have acted. It asserts that they consciously decided to remain silent about their knowledge of the scheme which, arguably, extended to its illegality. A common sense understanding of the matters attributed to the solicitors by the plain words of the petition would, it might safely be expected, lead the ordinary reasonable reader to conclude that the plaintiffs were guilty of misconduct and that such misconduct warranted investigation. In my opinion, the petition is reasonably capable of conveying to the reader the overall impression that there was misconduct on the part of the plaintiffs.

18 Objection was also taken as to form on the basis that the use of the word “illegal” was ambiguous and imprecise. It was put that the pleader was obliged to specify the nature of the illegality, particularly with regard to the statement in the petition which referred only to knowledge that the fund was unlicensed.

19 The requirements for pleading an imputation are well known. Under Pt 14, r 14.30(2)(a) (formerly SCR Pt 67, r 11(2)) a statement of claim must specify each imputation upon which the plaintiff relies. The scope of the pleader’s obligation was explained in the judgment of Hunt, JA in Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255, paras 119-129. He encapsulated it in the following terms:

“The issue which has to be decided in the particular case is whether there is likely to be confusion either at the pleading stage or at the trial in relation to the meaning for which the plaintiff contends.”

( Whelan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148, p 155.)

20 For the defendant to succeed it is necessary to show that the imputations fail to specify the act or condition which the plaintiff claims was attributed to him or her by the matter complained of. It is always prudent for those contemplating a challenge to the form of a pleaded imputation to have in mind the following passage from the judgment of Kirby, J in Favell:

“21. In considering the imputations pleaded alongside the matter complained of, it is important that courts, deciding issues such as the present, should keep in mind the practical burdens and consequences that flow from excessive refinement in such matters. They should remember that the tribunal established by law (whether a jury or a judge) to decide claims in defamation will normally have a large capacity of its own to deal with far-fetched and remote imputations in a commonsense way. It is a mistake to consider that this capacity is confined to the practice court and appellate judges, stimulated by imaginative pleaders "armed with a bank of dictionaries and a Thesaurus".”

21 Consistently with the emphasis given in the cases to the relationship between the terms of the pleaded imputation and the matter complained of, Ipp, JA in Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675 in a passage approved of by the High Court of Australia in John Fairfax Publications Pty Ltd [2007] HCA 28 (para 174) said:

“119. … The question as to the meaning that the words convey to the ordinary person should be a simple and straightforward one, as befits a law that governs the everyday life and actions of all levels of persons in the community. The question should not be obscured by overly complex and subtle metaphysical distinctions that stand as a formidably esoteric barrier to what should be an easily comprehensible reasoning process akin to common sense."

22 In my opinion the meaning of the imputation is unambiguous, and it cannot reasonably be said that it is likely to lead to confusion. The nature of the misconduct said to warrant investigation is identified; specification of the nature of the illegality is not essential for compliance with the test for precision.

23 Imputation (b) is:

“(b) That he had betrayed the trust of members of the Assyrian community, of which he was a member, by remaining silent and not revealing to investors in the Karl Suleman scheme his knowledge that it was illegal being in breach of the Corporations Act.”

24 Objection as to capacity was taken on the ground that the petition was incapable of conveying an imputation of actual knowledge of illegality. The submissions as to imputation (a) on this ground were relied upon, and are rejected for the same reasons.

25 An additional ground was that there is no support for the allegation that the plaintiffs knew that the scheme “… was illegal being in breach of the Corporations Act”. As I understood it, the submission was that the only reference to known illegality was to the effect that the management investment fund was unlicensed, and there was nothing which indicated that this situation was in breach of the legislation. In my opinion, the objection on this ground should also fail.

26 It is quintessentially for the jury whether the petition, as a whole, would be read as narrowly as suggested. It contains assertions that the solicitors knew of the scheme, and consciously decided to remain silent about it, thereby giving the impression to the community that it was legal, and leading investors to believe that it was legitimate. It said that “… They participated in assisting an illegal operation of a scheme which breached the Corporation Act”.

27 In my opinion it is open to the jury to conclude that knowledge of the scheme, which was described as a “”Ponzey” type pyramid scheme”, would extend to knowledge that the scheme was an illegal sham and, accordingly, breached the Corporations Act, and it would not necessarily understand that such knowledge was limited to it being unlicensed.

28 Imputation (c) is:

“(c) That he assisted in the illegal operation of an investment scheme.”

29 Objection was taken as to form. It was put that the use of the word “assisted” was ambiguous in that it did not identify with requisite precision the act or condition attributed to the plaintiffs in the petition. It was put that the imputation itself does not make clear the sense in which the word is to be understood with the result that the imputation is likely to lead to confusion either at the pleading stage or at the trial.

30 In Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 Gleeson, CJ (p 137) held that the degree of specificity required in the formulation of a defamatory imputation must be related to the nature and content of the defamatory matter.

31 Upon undertaking that exercise it will be seen that the petition is analogous to the publications considered in Drummoyne in that it attributes to the plaintiffs a number of particular forms of misconduct. In rejecting imputations of corruption expressed in general and unspecified terms, Gleeson, CJ said (Drummoyne p 140):

“… The difficulty arises from the fact that an examination of the detail of the broadcasts discloses that there are various significantly different forms of corruption that could possibly be taken from them. Without intending to be exhaustive, they include abuse of power to victimise and harass a ratepayer, giving unjustifiable preferential treatment to another ratepayer in consideration for a large financial contribution to the Council, and improperly expending public funds for the private benefit of the Mayor.
It is true that, in the first broadcast, the respondent opened with general references to corruption and the Independent Commission Against Corruption and then went on to recount facts and allegations about certain particular events and matters without making any clear or logical connection between the opening remarks and the events and matters in question.
Nevertheless it is possible to discern certain particular forms of misconduct that might be said to be attributed to the Council by the matter published, and it is possible to be more specific than the pleader has been as to the forms of corruption said to have been imputed to the Council. It is also appropriate to require the pleader to be more specific because, unless that is done, there is likely to be confusion in relation to the meaning for which the appellant contends. It is to the end of avoidance of confusion and uncertainty that the requirement of specificity is directed, and the practical content of the requirement in the present case is to be determined in that light.”

32 Examination of the detail of the petition discloses that there are substantially different forms of assistance which could possibly be taken from it. They include assisting clients and others to raise funds for investment in the trolley collection business; remaining silent about their knowledge of the scheme and/or by association with Mr Suleman; leading investors to believe they were investing in a legitimate business; failing to take steps for the registration and/or licensing of the scheme; acting for Mr Suleman.

33 Consistently with the conclusion in Drummoyne (p 140F), in my opinion to permit the plaintiffs to frame an imputation which refers to assistance without specifying which of the different possible kinds of assistance is being referred to would, by reference to the general principles stated above, and the test annunciated in Whelan, be to permit a contravention of the relevant rules of pleading.

34 The objection should be upheld. Imputation (c) should be struck out.

35 Imputation (d) is:

“(d) That he was guilty of misconduct as a solicitor, in that he failed in his obligation to ensure that the Karl Suleman scheme was registered.”

36 Objection as to capacity was taken, firstly, on the ground that the petition was incapable of conveying an imputation that the plaintiffs were guilty of misconduct. In support the submissions put in relation to the same issue concerning imputation (a) were relied upon, and are rejected for the same reasons.

37 An additional ground was that the petition is incapable of conveying an imputation which alleges that the plaintiffs had an obligation to ensure that the scheme was registered. It was put that although it is said that the plaintiffs were on notice that it was required that the scheme be registered and licensed, and that they did not take any steps for registration, the petition does not suggest that they were obliged to ensure that it was.

38 In my opinion the objection fails. Having regard to the attributes of the hypothetical ordinary reasonable reader who may read between the lines, draw implications more freely than the lawyer, and engage in some loose thinking, there is sufficient in the petition to support the finding that the imputation is reasonably capable of arising.

39 It is said that all members of the Assyrian community have been affected directly or indirectly by the conduct of the plaintiffs which included acting for persons for the purpose of raising funds for investment in the scheme. It is said that the plaintiffs consciously remained silent about the scheme, and that had community members been warned that it was unlawful they would not have invested. A conclusion which is reasonably open is that investors were led, or were encouraged, by the plaintiffs to believe that the scheme was legitimate with the implication that they were under an obligation to ensure that it was.

40 For present purposes it is unnecessary to rehearse the arguments which each party might put to the jury. It is sufficient to say that the submissions before me have demonstrated that the question is reasonably arguable. I am constrained by authority to exercise my discretion with great caution and, accordingly, hold that the imputation should be left to the jury as it is reasonably capable of being conveyed by the petition.

41 Imputation (e) is:

“(e) That in failing in his duty to inform investors in the Karl Suleman scheme that it was illegal he acted out of greed with a view to benefiting financially from his involvement with Karl Suleman.”

42 Objection as to capacity was taken on the ground that the petition was not reasonably capable of conveying the notion that the plaintiffs actually knew that the scheme was illegal. The submissions as to imputation (a) on this ground were relied upon, and are rejected for the same reasons.

43 Objection as to form was taken on the ground that the use of the word “involvement” was ambiguous and imprecise. In my opinion, the objection should not be upheld. The allegation as pleaded specifies the plaintiffs’ conduct (“…acted out of greed”) and the motive (“…with a view to benefiting financially from his involvement with Karl Suleman”). In the context in which the word “involvement” is used in the pleading, it is difficult to see that it would give rise to any confusion.

44 Imputation (f) is:

“(f) That he was guilty of misconduct, in that he failed to inform investors in the Karl Suleman scheme that it was illegal with the consequence that when the scheme collapsed they lost their money which they would never have invested had he told them the truth.”

45 Objection as to capacity was taken on grounds referable to the concepts of knowledge and misconduct. The submissions as to imputation (a) on these grounds were relied upon, and are rejected for the same reasons.

46 Imputation (g) is:

“(g) That he profited from his participation in an investment scheme which he knew was illegal at the expense of investors who faced financial ruin when the scheme collapsed.”

47 Objection as to capacity was taken on the ground that the petition was not reasonably capable of conveying the notion that the plaintiffs knew that the scheme was illegal. The submissions as to imputation (a) on this ground were relied upon, and are rejected for the same reasons.

48 Objection as to form was taken on the basis that the use of the phrase “from his participation” was ambiguous and imprecise. It was put that the conduct which constituted participation is not specified, although the tenor of the petition strongly suggests that such participation was not as investors.

49 In deciding this question I have taken into account the passages from Favell and Gacic earlier referred to (paras 20, 21 above). In my opinion, when read with the whole of the petition, the meaning of the imputation meets the test for specificity. The nature of the participation from which the plaintiffs’ profited is described as their conduct as solicitors, and as associates of Mr Suleman, and the continuation of their business dealings with him although aware of the scheme’s illegality. Given that those parts of the petition which support the imputation are couched in terms which indicate no more specific conduct, I do not think that the pleader should be required to specify some precise act or conduct relevant to participation. Accordingly, the objection should not be upheld.

50 Imputation (h) as set out in exhibit A was challenged on a number of grounds. Towards the end of submissions on 10 October 2007 Senior Counsel for the plaintiffs stated that it was no longer pressed, and proposed a new imputation in the following terms: It is referable to the first plaintiff only.

“(h) That the plaintiff was the subject of legal proceedings against him for insider trading.”

51 Objection was taken that the imputation was incapable of being defamatory. It was put that, absent identification of the nature of the proceedings, or of the person or authority bringing them, or an allegation to the effect that the proceedings were warranted, the capacity of the imputation cannot be judged. The submissions relied upon the approach of the Court of Appeal in Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669 (pp 671, 679, 680) in rejecting imputations of accusation.

52 In Sergi, the relevant imputations were as follows:

“(f) The plaintiff had been accused of being responsible for the disappearance and murder of Donald Mackay.
(g) The plaintiff had been accused of being connected with a murderous, secret society masterminding an extensive drug network from Griffith.
(h) The plaintiff had been accused before the Royal Commission of being a culprit in connection with the presumed murder of Donald Mackay.”

53 Hutley, JA said (p 671):

“However, where the passive voice is used in connection with accusations, it is necessary to specify the accuser. An accusation from certain quarters may be a compliment, or at least carry no reflection upon the reputation of the accused. The cases in which the defamatory import of accusations have arisen are all where the accusation was by legitimate authorities. Thus, in Lewis v Daily Telegraph Ltd [1964] AC 234, the defamatory meaning was that the plaintiffs were suspected by the police (see at 239).
In Lang v Australian Consolidated Press Ltd [1970] 2 NSWR 408, the defamatory meaning was alleged to arise out of an actual criminal trial; in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16, the alleged defamation arose out of a criminal charge; in Mirror Newspapers Ltd v Harrison (1982) 56 ALJR 808; 42 ALR 487, the defamatory material was in the report of a police investigation, arrest and expected charge. It would seem to me that the identification of the persons making the accusation is not a mere matter for particulars; for a report of making an accusation to be capable of defamatory meaning, it must identify the accusation coming from some authority whose status can make it stick without more.”

54 Glass, JA said (p 679):

“…However, imputations (f) and (g) suffer from the defect that they fail to identify the person making the accusation. This is not merely a matter for particulars since the source may be such as to render the imputation incapable of disparaging the plaintiff in the eyes of ordinary folk. Without identification of the source the capacity of the imputation to defame cannot be judged. I would for that reason disallow (f) and (g). Since (h) identifies the forum in which the accusation was brought it stands in a different position and I would allow it.”

55 Priestley, JA said (p 680):

“Imputations (f) and (g) have however been deliberately framed to make it clear that they do not include any element to add to the allegation of accusation; that is, the imputations are content to rest upon the allegation of accusation alone without any statement or implication of reasonable grounds for the accusation or of the plaintiff's conduct being such as to warrant accusation. The absence of any allegation of the identity of the accuser leaves the imputations in the position that they may just as well have been made by a completely irresponsible person as by a responsible one. I would not disturb his Honour's conclusion in regard to them.
Imputation (h) is in a slightly different position. The fact of the accusation having been made before the Royal Commission is just sufficient, in my opinion, to put it in a different class and justify its being left for the jury's consideration.”

56 The sting or substance of the imputation as pleaded is equivalent to one which says that the plaintiff is a person against whom legal proceedings for insider trading have been taken, or that the plaintiff has been accused in legal proceedings against him of insider trading. In my opinion the assessment of the capacity of the imputation to be defamatory should be approached in the same way as the question was considered in Sergi. In deciding the question I do not think anything turns on whether the imputation is cast in the passive or active voice.

57 The imputation contains no statement or implication of reasonable grounds for the proceedings, or of the plaintiff’s conduct being such as to warrant the proceedings being taken against him. Absent identification of the person or authority by whom the proceedings are taken, and/or of the plaintiff’s conduct which founded the proceedings, the imputation, as were those in Sergi, is left in the position that the proceedings “… may just as well have been (taken) by a completely irresponsible person as by a responsible one”. (Priestley, JA p 680F.)

58 Accordingly, in my opinion, the seventh defendant’s submission should be accepted, and imputation (h) should be struck out.

59 It is observed that the first plaintiff has attempted on numerous occasions to plead various imputations based on the passage in the petition which commences with the words “The liquidator’s report …” and ends with the words “have not yet commenced” and, in particular, on the sentence “Horwath in its last report makes reference to a legal action against Fred David for insider trading”. When challenged by the defendants these attempts have failed. Costs have been incurred and the court’s time has been taken up. In the circumstances, I am of the view that the interests of justice would not be served by giving the first plaintiff any further indulgence by way of liberty to replead this imputation.

Conclusion

60 (1) The seventh defendant’s application to strike out proposed imputations (a), (b), (d), (e), (f) and (g) is refused.

(2) I hold that each of proposed imputations (a), (b), (d), (e), (f), and (g) is reasonably capable of being conveyed by the matter complained of, and is reasonably capable of being defamatory of the plaintiffs.

(3) I hold that, if pleaded, proposed imputations (c) and (h) should be struck out.

(4) I direct the plaintiffs to file and serve a further amended statement of claim on or before 4pm 1 November 2007.

(5) I stand the proceedings over to the defamation directions list 9.30am 12 November 2007 for further directions.

(6) Costs are reserved.

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