Harwood Pacific P/L v Hastie
[1997] QSC 135
•5 August 1997
IN THE SUPREME COURT
OF QUEENSLAND
No. 3273 of 1997
Brisbane
Before the Hon. Mr Justice Shepherdson
[Harwood Pacific P/L v. Hastie]
BETWEEN:
HARWOOD PACIFIC PROPRIETARY LIMITED
ACN 073 257 173 and JOHN NOEL DAVIS
Plaintiffs
AND:
HASTIE HOLDINGS PTY LTD
ACN 074 494 205
First Defendant
AND:
BRIAN GRAHAM HASTIE
Second DefendantJUDGMENT - SHEPHERDSON J.
Judgment delivered 5/8/1997
CATCHWORDS: DEFAMATION - Application to strike out parts of Statement of Claim - O22R32.
Counsel:Mr Barlow for the applicants
Mr Jarrett for the respondents
Solicitors: Carter Newell for the applicants
Burns Jamieson for the respondents
Hearing date: 18 July 1997
IN THE SUPREME COURT
OF QUEENSLAND
Brisbane No.3273 of 1997
Before the Hon. Mr Justice Shepherdson
[Harwood Pacific P/L v. Hastie]
BETWEEN:
HARWOOD PACIFIC PROPRIETARY LIMITED
ACN 073 257 173 and JOHN NOEL DAVIS
Plaintiff
AND:
HASTIE HOLDINGS PTY LTD
ACN 074 494 205
First Defendant
AND:
BRIAN GRAHAM HASTIE
Second Defendant
REASONS FOR JUDGMENT - SHEPHERDSON J.
Judgment Delivered 5 August 1997
The plaintiff has sued the defendants for damages for defamation. On or about 16 June 1997 the plaintiff delivered an amended Statement of Claim. This step followed correspondence between the parties' solicitors in which the defendants had threatened to apply to strike out the original Statement of Claim.
The application before me is brought by the defendants who seek orders striking out certain parts of the amended Statement of Claim. The plaintiffs concede that para. 7C(c) of the amended Statement of Claim should be struck out but otherwise oppose the application.
Application to strike out paras.6, and 7
Before turning to these paragraphs I should state that the matters alleged in paras. 1 to 5 (all inclusive) in the amended Statement of Claim appear not to be in dispute. In summary these paragraphs allege that the first named plaintiff carried on the business of assisting purchasers of real estate property at Forest Lake to retain the services of a realty property manager, that the second named plaintiff was at all material times the managing director of the first named plaintiff, that the first defendant (of whom the second defendant was a director and principal) carried on business under the name "Forest Lake Property Consultants", that the first defendant carried on the business of realty property managers and carried on the business of managing rental properties in Forest Lake, and finally that at all material times the plaintiffs introduced owners of residential properties situated at Forest Lake to the first defendant for the purpose of the first defendant managing the rental property.
The above summary sets out the background against which the matters before me can now be considered.
Paragraphs 6 and 7 of the amended Statement of Claim read:
6.In or about March 1997 the Second Defendant in his own capacity and on behalf of the First Defendant sent letters to numerous clients of the Plaintiff in which the First and Second Defendants published of and concerning the Plaintiffs the following matters:
"We have received several telephone calls from concerned Harwood Pacific clients in recent days stating they have recently received a communication from John Davis of Harwood Pacific recommending transfer of the management of their property to Delfin Realty.
The basis of our current dispute with Harwood Pacific is:
Over the past nine months we have been attempting to have Choice Homes carry out Builders Maintenance on defects with some of the homes, many of these defects remain outstanding. We have sought the cooperation from Harwood Pacific to have this matter rectified and have not received their support and cooperation. Our instructions from Harwood Pacific have been not to advise owners about outstanding maintenance. We are simply not prepared to compromise our professional standards and obligations to our owners, and have not complied with Harwood's request. This has caused aggravation.
Our office has never been asked by Harwood Pacific to carry out "the 100 point quality check" at hand over or at the end of the six month maintenance period as stated in your Quality Assurance Program. This was brought to our attention by a concerned owner.
We have been asked not to send you market update information or details currently for sale with your monthly statement. We see it as our duty to keep you fully informed about the Forest Lake market in general.
The sublease on our premises at Forest Lake was cancelled in November due to pressure from the Delfin Property Group (attempting to eliminate competition). Our relocation out of Forest Lake area was not by our choice. This matter is currently in the hands of the Trade Practices Commission.
We have secured a long lease on premises at the New Joseph Banks Avenue Shopping Centre at Forest Lake and will be relocating back to Forest Lake when construction of this Shopping Centre is complete.
Since our relocation from Forest Lake our business has continued to flourish and we continue to let some 20 homes every month. There are three Property Managers looking after 300 Forest Lake Properties and a Property Manager permanently based in Forest Lake all day.
It should be noted that of the many Harwood Pacific properties we currently manager (sic) there has never been an instance of an extended vacant period, damage to a property by a tenant, or loss to an owner and our lease renewal ability. We are complimented on a daily basis on our level of service and the speed with which we let property. These are the most important factors a Landlord considers when selecting a managing agent.
Should you decide to leave your property and tenant in our hands and be concerned about the status of your rent guarantee, it would [we] (sic) wise to seek independent legal advice on the status of the guarantee.
I am sure you can see the tactics being used by these companies are far from ethical.
I would be happy to discuss this matter with you should you need further information.
We remain at your service."
7.The said words in their natural and ordinary meaning meant and were understood to mean:
(a)that the Plaintiffs were unethical;
(b)that the Plaintiffs were not acting in the interests of their clients and property owners;
(c)that the Plaintiffs acted deceptively to conceal defects in the buildings;
(d)that the Plaintiffs were not performing their duties properly;
(e)that the Plaintiffs recommended the transfer of the management property rights for ulterior purposes;
(f)that the rental guarantees secured by the Plaintiffs for their clients were of questionable status;"
I have set these paragraphs out in full because, as will be seen later in these reasons, the plaintiff, when it amended its Statement of Claim, inserted a number of further paragraphs - paras. 7A to 7E (inclusive) and in each of these paragraphs selected certain passages from the complete text of the letter pleaded in para. 6 and alleged that the selected passages bore certain meanings which were defamatory of the plaintiff. Of these paras. 7A to 7E, the applicant defendants have sought orders striking out sub-para.7A(a) 7B(a) 7B(c) 7C(c) and 7D.
The applicant relies on Order 22 rule 32 and has submitted that the paragraphs and sub-paragraphs sought to be struck out are unnecessary or tend to prejudice or embarrass the fair trial of the action.
As to paragraph 6, Mr Barlow, counsel for the applicants has submitted that the words of the letter in their entirety are not capable of bearing the meanings alleged in paragraph 7. I pause to say no innuendo is pleaded.
Mr Barlow has further submitted in effect that the correctness of this primary submission is readily seen from the allegations in paras.7A to 7E each of which further five paragraphs is pleaded as founding a separate cause of action.
Mr Barlow does not object to the text of the letter pleaded in paragraph 6 remaining in the amended Statement of Claim provided that:-(a)the words "published of and concerning the plaintiffs the following matters" are deleted and the word "reading" inserted in lieu; and
(b)paragraph 7 is struck out.
Mr Jarrett, counsel for the respondent plaintiffs has opposed the application to strike out paras.6 and 7 contending that these two paragraphs disclose a good cause of action and that the applicant defendants cannot be embarrassed or prejudiced by the pleading of the whole of the letter alleged to be defamatory. He further submits that the defamatory meanings pleaded in para. 7 of the Statement of Claim can only be fully understood by reading the letter as a whole.
Throughout their Statement of Claim the plaintiffs, when referring to the letter or parts thereof, have relied on the natural and ordinary meaning of the words pleaded.
In Jones v. Skelton (1964) N.S.W.R. 485 Lord Morris of Borth-y-Gest in delivering the advice of the Judicial Committee of the Privy Council said (at p.491):-"It is well settled that the question as to whether words which are complained of are capable of conveying a defamatory meaning is a question of law, and is therefore one calling for decision by the Court. If the words are so capable then it is a question for the jury to decide as to whether the words do, in fact, convey a defamatory meaning. 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 App. Cas. 741, Lord Selbourne said, at p. 745: "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 All E.R. 151. 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."
In the above extract the relevant test to be applied is well set out. The Queensland Court of Appeal has approved and applied the whole of the above passage (Copley v. Queensland Newspapers Pty Ltd (App. 179 of 1993) (unreported - Judgt. 22.2.1993). The Court of Appeal also referred to Mirror Newspapers Ltd v. Harrison (1982) 149 CLR 293 which accords with the passage from Jones v. Skelton.
The question remains whether pleading of the whole letter in the manner set out in para.6 is embarrassing and prejudicial and whether the whole letter does bear the meanings contended for in para.7.
I have come to the conclusion that both these paragraphs are embarrassing and prejudicial, that para.7 should be struck out and that para.6 should not be permitted to remain in its present form. It seemed to me from the manner in which he made his submissions that Mr Jarrett, while not conceding that para.7 should be struck out was most concerned to see that the text of the letter remain in the pleading. As already mentioned Mr Barlow does not object to such a situation. Indeed, the cases on which Mr Jarrett relied support Mr Barlow's submission that para.7 should be struck out. In Cohen v. Mirror Newspapers Limited (1965) 83 WN (Part 1) (NSW) 369 Asprey J. (at p.370 said):-"The matter complained of in the declaration consists of an article published by the defendant and this article is set forth verbatim. No innuendos are laid in the declaration (cf. Gatley on Libel and Slander, 5th Ed. (1960) per. 814, ...)
The law which I take from Gatley par. 808 and from the cases cited in the footnote to that paragraph with regard to the quotation in the declaration of the entirety of the published matter containing passages alleged to be libellous is that, if a plaintiff is suing in respect of certain allegedly libellous passages in an article, he need not set out the whole article; it is sufficient to set out the libellous passages only, provided their meaning is clear and distinct. But, if the meaning of the passages taken singly is not clear, or if the complexion of the imputation conveyed by the libellous passages is materially altered or clarified by other passages in the article, the plaintiff must set out the whole article in his declaration."
See also Packer v. Mirror Newspapers Limited (1969) 90 WN (Part 1) NSW 308 at 309-410 and the judgment of Fox J. in Hadzel and Anor. v. De Waldorf (1970) 16 FLR 174 at p. 176.
In Ron Hodgson (Trading) Pty Ltd v. Belvedere Motors (Hurstville) Pty Ltd & Ors. (1971) 1 NSW LR 472 Asprey JA. (with whose reasons Holmes JA. agreed) said (at p. 476-477):-"... in a declaration in libel the very words of the libel must be set forth in order that the court may judge whether such words are capable of a defamatory meaning and in order that the defendant may know the precise charge which is made against him [authorities were cited] ... if the alleged defamatory matter be contained within other written material, if is sufficient to set forth in the declaration the libellous passages only, provided that their meaning be clear and distinct. But, if the meaning of the passages taken singly is not clear or if the complexion of the imputation conveyed by the libellous passages is materially altered or qualified by other passages in the written material, the plaintiff must set out all of the passages in the written material which affect the sense of the alleged defamatory matter ... a declaration is a statement in a logical and legal form of the facts which constitute the plaintiff's cause of action and with certain exceptions not material hereto, all the facts necessary to constitute the cause of action should be stated (Chitty on Pleading, 7th Ed., Vol.1 pp.235-236). Where, however, the plaintiff pleads in addition to such facts other matter which could have been omitted from the pleading as immaterial because its presence in or absence from the pleading would not affect the cause of action declared upon, such other matter is mere surplusage and need not be proved by the plaintiff."
I have concluded that the application in respect to paras.6 and 7 succeeds. I order that from paragraph 6 the words "in which the first and second defendants published of and concerning the plaintiff the following matters" be struck out and that there be inserted in lieu the word "reading" and that paragraph 7 should be struck out.
Application to strike out para.7D
This paragraph reads:-
"The words:
We have received several telephone calls from concerned Harwood Pacific clients in recent days stating they have recently received a communication from John Davis of Harwood Pacific recommending transfer of the management of their property to Delfin Realty.
The sublease on our premises at Forest Lake was cancelled in November due to pressure from the Delfin Property Group (attempting to eliminate competition). Our relocation out of Forest Lake area was not by our choice. This matter is currently in the hands of the Trade Practices Commission.
I am sure you can see the tactics being used by these companies are far from ethical."
in their natural and ordinary meaning meant and were understood to mean:
(a)that the Plaintiffs were unethical;
(b)that the Plaintiffs recommended the transfer of the management property rights for ulterior purposes."
Paragraph 7D contains three paragraphs selected from discrete parts of the letter pleaded in para.6 and the text of which I have already set out. The pleader contends in effect that when the three paragraphs are read in combination they bear the meanings pleaded in para.7D. I mention in passing that in my view the pleader should, by the use of appropriate punctuation marks have made clear that the three paragraphs were discrete and not consecutive.
Mr Barlow has submitted as to the first meaning pleaded that only the third paragraph quoted can possibly bear it and the other two paragraphs are irrelevant to the first meaning. As to the second meaning pleaded he submits the third paragraph is irrelevant, the second paragraph does not refer to the plaintiff and is irrelevant and the first paragraph is incapable of bearing the meaning attributed. He thus submits that the entire paragraph should be struck out but has an alternative submission namely that the first two paragraphs and the second meaning should be struck out.
Mr Jarrett has submitted that para.7D should not be struck out. He also opposes the making of an order in accordance with the alternative submission of Mr Barlow.
Two natural and ordinary meanings are attributed to the three paragraphs. While it maybe said that only the contents of the third paragraph repeated in para.7D may be capable of bearing the meaning pleaded in (a) namely that the plaintiffs were unethical it should be remembered that the letter complained of was written by or on behalf of the defendants and allegedly sent to numerous clients of the plaintiffs. To achieve a result pleaded in (a) it is in my view necessary that the trial judge be able to rule that the words "these companies" are capable of including the plaintiffs. As I have said each of the three paragraphs is discrete. The first of the three paragraphs in 7D does mention the first plaintiff. The second paragraph does not mention the plaintiffs, it obviously refers to the first defendant. I am not prepared to strike out paragraph 7D of the Statement of Claim or the meaning pleaded in para.(a).
As to the meaning pleaded in para.(b) there is in my view no doubt that the first of the three paragraphs is capable of meaning the plaintiffs; it is said that John Davis as managing director of the first named plaintiff recommended transfer of the management to Delfin Realty of the property of certain of the Harwood Pacific (the first named plaintiff's) clients. However, I am unable to conclude that the three pleaded paragraphs meant or were capable of meaning that such transfer was "for ulterior purposes" as pleaded in para.(b). The second paragraph in 7D does not refer to the plaintiffs. In my view the third paragraph pleaded even though it uses the word "ethical" is not relevant to the meaning pleaded in (b).
I have concluded that only sub-para.(b) in para.7D should be struck out and I so order.
Application to strike out para.7E
This paragraph reads:-"The words:
"Should you decide to leave your property and tenant in our hands and be concerned about the status of your rent guarantee, it would [we] (sic) wise to seek independent legal advice on the status of the guarantee."
in their natural and ordinary meaning meant and were understood to mean:
(a)that the Plaintiffs were not acting in the interests of their clients and property owners;
(b)that the Plaintiffs were not performing their duties properly; and
(c)that the rental guarantees secured by the Plaintiffs for their clients were of questionable status."
Mr Barlow contends that this paragraph should be struck out in its entirety. He submits that the words pleaded, on their face do not refer to the plaintiffs but rather refer to the defendants and to clients' rent guarantees. He has argued that a reasonable reader without any special knowledge, i.e. that is without knowledge of any special facts, could not infer anything detrimental to the plaintiff from the words in para.7E and consequently the words in para.7E are not capable of bearing a defamatory meaning. He has pointed out (correctly in my view) that no part of the letter as pleaded in para.6 connects the plaintiffs in any way with rent guarantees and further, no words had been used in the letter such that a reasonable reader could infer that any rent guarantees referred to were of questionable status. Mr Jarrett has submitted that the meanings for which he contends in para.7E can be understood from the whole letter.
In my view this submission by the plaintiffs highlights a matter which will be embarrassing for the defendants if this paragraph is permitted to remain in the pleading. I accept Mr Barlow's contentions and I order that para.7E be struck out.
Applications to strike out sub-paras.7A(a), 7B(a), 7B(c) and 7C(c)
Sub-para.7A(a) This sub-paragraph reads:-"Further the words:
Over the past nine months we have been attempting to have Choice Homes carry out Builders Maintenance on defects with some of the homes, many of these defects remain outstanding. We have sought the cooperation from Harwood Pacific to have this matter rectified and have not received their support and cooperation. Our instructions from Harwood Pacific have been not to advise owners about outstanding maintenance. We are simply not prepared to compromise our professional standards and obligations to our owners, and have not complied with Harwood's request. This has caused aggravation."
in their natural and ordinary meaning meant and were understood to mean:-
(a)that the plaintiffs were unethical
. . . . . . . "
The words "unethical" or the word "ethical" are not mentioned in the extract from the letter which is set out in 7A. The adjective "ethical" is defined in the Shorter Oxford English Dictionary as:-
Relating to morals.
Treating of moral questions or of moral science.
(Grammatically) - "the dative when used to imply that a person, other than the subject or object has an interest in the fact stated".
"Unethical" is not defined in the Shorter Oxford English Dictionary but the preposition "un" expresses the negation of "ethical". On the hearing before me there was no discussion concerning the meaning of "ethical" and I formed the impression from Mr Barlow's submissions - and he confirmed it during submissions - that he did not press this application strongly. It may be that Mr Jarrett will contend for a meaning to the word "unethical" different from that which I have gleaned from the dictionary. As it will be the trial judge who will ultimately have to rule whether or not the words pleaded in para.7A in their ordinary and natural meaning meant or understood to mean that the plaintiffs were unethical, I propose, in view of Mr Barlow's approach, not to strike out the words in para.7A(a).
Sub-para.7B(a)
In this paragraph the plaintiff has pleaded that:-"The words:
Our office has never been asked by Harwood Pacific to carry out "the 100 point quality check" at hand over or at the end of the six month maintenance period as stated in your Quality Assurance Program. This was brought to our attention by a concerned owner."
in their natural and ordinary meaning meant and were understood to mean:-
"(a)that the plaintiffs were unethical.
. . . . . . . . "
For reasons similar to those which I have mentioned in dealing with the application to strike out sub-para.7A(a) I decline to strike out sub-para.7B(a).
Sub-para 7B(c)
In para.7B the plaintiffs have further alleged that the relevant words in their natural and ordinary meaning meant and were understood to mean that the plaintiffs acted deceptively to conceal defects in the buildings.
Mr Barlow does press strongly his application to strike out this part of the Statement of Claim.
In my view, the words from the letter which are pleaded in para.7B cannot in their natural and ordinary meaning be understood to mean that the plaintiffs acted deceptively and did so to conceal defects in the buildings. There may be any number of reasons why the defendants as authors of the letter complained of has never been asked by the first plaintiff to perform the work referred to in the extract pleaded in para.7B. In my view it is drawing too long a bow for the plaintiff to contend the natural and ordinary meaning is that set out in sub-para.7B(c). I consider that portion of the pleading is embarrassing and I order that it be struck out.
Sub-para.7C(c)
In 7C the following words from the text of the letter are relied on:-"The words:
We have been asked not to send you market update information or details currently for sale with your monthly statement. We see it as our duty to keep you fully informed about the Forest Lake market in general."
The plaintiffs alleged that in their natural and ordinary meaning these words meant and were understood to mean (inter alia):-
"(c)that the plaintiffs acted deceptively to conceal defects in the buildings."
Mr Jarrett does not contest Mr Barlow's application in respect of this part of the pleading and at the outset conceded that this sub-paragraph should be struck out.
In summary, the orders I make are these:-
I order that from para.6 of the amended Statement of Claim the words "in which the first and second defendants published of and concerning the plaintiffs the following matters:"
be struck out and the word "reading": be inserted in lieu;
That para.7 of the amended Statement of Claim be struck out.
That sub-para.7B(c) of the amended Statement of Claim be struck out.
That sub-para.7C(c) of the amended Statement of Claim be struck out.
That sub-para.7D(b) of the amended Statement of Claim be struck out.
That para.7E of the amended Statement of Claim be struck out.
I have heard from the parties on the matter of costs. I order both named plaintiffs to pay the defendants' costs of and incidental to this application to be taxed.
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