Jenman v McIntyre
[2013] NSWSC 1100
•14 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: Jenman v McIntyre [2013] NSWSC 1100 Hearing dates: 6 August 2012 Decision date: 14 August 2013 Before: McCallum J Decision: Plaintiff's application for leave to continue proceedings against second defendant in liquidation refused; parts of defence and particulars struck out; first defendant's application for further discovery allowed.
Catchwords: DEFAMATION - whether plaintiff should have leave to continue proceedings against company in liquidation - factors relevant to exercise of Court's discretion - defences - whether adequately particularised Legislation Cited: Civil Procedure Act 2005
Corporations Act 2001 (Cth), s 500(2)
Defamation Act 2005Cases Cited: Altinova Nominees Pty Ltd v Leveraged Capital Pty Ltd (Receivers and Managers Appointed)(in liq)(No 2) [2009] FCA 42
Burstein v Times Newspapers Ltd [2001] 1 WLR 579
Channel Seven Adelaide v Manock [2007 HSC 60; 241 ALR 468
Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575
Gross v Weston [2007] NSWCA 1
Maher v Taylor [1984] 1 NSWLR 231Category: Interlocutory applications Parties: Neil Jenman (plaintiff)
Jamie McIntyre (first defendant)
21st Century Academy Ltd (in liquidation)(second defendant)Representation: Counsel:
G Schoff SC, C Amato (plaintiff)
J Castelan, L Brown (first defendant)
Solicitors:
Slater & Gordon (plaintiff)
Black & White Legal (defendants)
File Number(s): 2010/325331 Publication restriction: None
Judgment
HER HONOUR: These are proceedings for defamation arising out of the alleged publication of three articles posted on the Internet. The plaintiff, Mr Neil Jenman, alleges that the articles were posted on websites owned or controlled by the second defendant, 21st Century Academy Limited (in liquidation). The first defendant, Mr Jamie McIntyre, was the Chief Executive Officer of that company at the time of the alleged publications.
The proceedings were commenced by statement of claim filed on 30 September 2010. That pleading has been amended twice (in an amended statement of claim filed on 10 December 2010 and a further amended statement of claim filed on 15 March 2011).
Since the action is based on material allegedly posted on the Internet, the element of publication requires proof that the article was downloaded from the web server: Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575 at [25] to [28] and [44]. Accordingly it will be necessary for the plaintiff, in order to establish that element of the tort, to prove as to each matter complained of that it was downloaded and seen by at least one person.
In a proposed second further amended statement of claim sought to be filed by the plaintiff, the plaintiff does not identify a single person who downloaded and read any of the matters complained of within the 12-month period preceding the commencement of the proceedings (that being the limitation period for an action in defamation). In each case, the plaintiff has identified one person who downloaded and read the article after the commencement of the proceedings (Ms Denise Brailey in the case of the first matter complained of; Mr Ed Cattoni for the second matter complained of and Mr Neville Baker for the third matter complained of). In order to establish a completed cause of action as at the date on which the proceedings were commenced, the plaintiff relies on certain circumstances of the publication, coupled with the identification of those three people, to support an inference that the matters complained of were probably downloaded by others during the relevant period.
That very limited basis for establishing publication has not, however, deterred the plaintiff from pitching substantial resources at the prosecution of his claims.
This judgment determines three interlocutory applications in the proceedings. In the order in which the applications were filed, they are:
(a) the plaintiff's application to have parts of the amended defence struck out; for further and better particulars of the amended defence and for further discovery (notice of motion filed 29 May 2012);
(b) the first defendant's application for further discovery from the plaintiff; for further and better answers to two interrogatories and for leave to file and serve a further amended defence (notice of motion filed 18 June 2012); and
(c) the plaintiff's application for leave to proceed with the action as against the second defendant in liquidation and, alternatively, an order for discovery against the liquidator; and further seeking leave to file a proposed second further amended statement of claim (notice of motion filed 1 August 2012).
It is convenient to deal with the applications in the order in which they were argued, beginning with the last.
Application for leave to continue the proceedings against the company in liquidation
The plaintiff seeks leave pursuant to s 500(2) of the Corporations Act 2001 (Cth) to proceed with the action as against the second defendant in liquidation. Leave is sought subject to the condition that the plaintiff not be permitted to enforce any money judgment or order for the payment of monies without leave of the court.
The first defendant was placed into voluntary liquidation and a liquidator appointed on 15 February 2012. The plaintiff's solicitor, Ms Rachel Jones, first became aware of that event on 21 June 2012. The liquidator subsequently indicated that he neither consented to nor opposed the present application. The parties agreed to postpone the hearing of the alternative application seeking an order for discovery against the liquidator (see T26.6).
The liquidator has informed Ms Jones that, from the material available to him, it appears there will be no distribution to unsecured creditors following the liquidation. He suggested that the plaintiff might consider seeking an order for inspection of the books of the company within the possession of the liquidator under s 485 of the Corporations Act 2001. The liquidator indicated that he would neither consent to nor oppose any such application. The plaintiff has not sought an order in those terms.
The principles guiding the Court's discretion to grant leave to continue the proceedings were not in dispute. The plaintiff acknowledged the need to show that there is a serious question to be tried and to demonstrate a good reason to depart from the proof of debt procedure: Altinova Nominees Pty Ltd v Leveraged Capital Pty Ltd (Receivers and Managers Appointed)(in liq)(No 2) [2009] FCA 42 at [17] to [23] per Jacobson J. As his Honour noted at [19], one of the explanations for the requirement of leave is to protect a company in liquidation against a multiplicity of actions which would be "expensive, time-consuming, and in some cases unnecessary".
It may be acknowledged that the pleadings in the present case disclose "a serious claim and a real dispute". Ms Schoff SC, who appeared with Ms Amato for the plaintiff, further submitted that the action is not amenable to the proof of debt process, for two reasons. First, it was noted that the company in liquidation is alleged to control at least one of the relevant websites and that injunctive relief is sought to restrain further publication and to have the relevant material removed from the site. Secondly, Ms Schoff submitted that the kind of legal and factual issues raised in an action for defamation are fundamentally inconsistent with the proof of debt procedure. So much may be accepted.
Ms Schoff acknowledged that the Court would be astute to protect creditors against any prejudice that may arise by a grant of leave. She submitted, however, that the conditional order sought would afford the necessary and appropriate protection: Maher v Taylor [1984] 1 NSWLR 231 per Hunt J. This may be a case in which the unsecured creditors are beyond prejudice in any event: cf Maher at 234A.
One of the considerations which persuaded Hunt J to grant leave in that case was the appearance that the company may have been wound up in order to defeat the plaintiff's claim: at 235 to 236. There is no suggestion that that is the case here.
At the hearing before me, there was some discussion as to whether a mechanism might be put in place to enable the liquidator to approach the Court to seek an indemnity for the costs of taking steps in the proceedings (including giving discovery). In correspondence forwarded to the Court (with leave) on 19 December 2012, the liquidator indicated that he would nonetheless await the decision of the Court before undertaking any further work in the matter.
I accept that the conditional basis on which leave to proceed is sought conceded on behalf of the plaintiff affords some measure of protection to creditors. However, as noted in Maher at 235B, the rights of creditors may still be gravely affected by the continuation of proceedings against the company even in that situation. In that context, it is important to consider the nature of the present action. As already noted, the pleading presently alleges an extremely limited scope of publication. The steps taken even to date in the litigation reveal a substantial risk that the scope of the issues fought will be disproportionate to the damage to reputation sought to be vindicated by the action. Even if a mechanism can be put in place to enable the liquidator to seek some measure of protection against costs, there remains a risk of his having to undertake some tasks (including making application for such costs and otherwise considering his position) under-resourced and potentially without proper remuneration, or else accept the unhappy fate of allowing judgment to go by default: cf Maher at 235C.
For those reasons, notwithstanding the matters relied upon on behalf of the plaintiff, I am not persuaded that this is an appropriate case for the exercise of the Court's discretion. The application for leave to continue the proceedings against the company in liquidation is refused. It will accordingly be necessary to hear the plaintiff as to the alternative application for discovery against the liquidator.
Proposed second further amended statement of claim
One of the principal amendments sought to be made in the proposed second further amended statement of claim was a recasting of the way in which the first matter complained of was pleaded so as to put the case, in the alternative, that a hyperlink embedded within the article was (and alternatively was not) part of the matter complained of.
At the hearing of the applications Mr Castelan, who appeared with Ms Brown for the first defendant, indicated that, whilst publication is not admitted in any event, if the plaintiff was successful in establishing publication then the defendants would not contend that the hyperlink did not constitute part of the publication. In the face of that concession, the plaintiff did not press his application to amend so as to make those amendments (paragraphs 4A and 5A of the proposed second further amended statement of claim).
The remaining proposed amendments were also effectively resolved by agreement. The only matter that may require noting is the plaintiff's proposal to amend the particulars of publication of the first matter complained of so as to identify Ms Brailey as the person asserted to have downloaded and read that article. Ms Brailey is alleged to have downloaded the article after the commencement of proceedings (in or about November 2010). Following discussions with Mr Castelan, Ms Schoff indicated that publication to Ms Brailey would not be relied upon as itself giving rise to a completed cause of action but only as one of the particulars in support of an inference that the matter complained of was probably published (in the sense explained in Gutnick) to other, unidentified persons within the 12-month period preceding the commencement of proceedings (T37 to T38).
Those concessions and agreements disposed of the plaintiff's application in his notice of motion filed 1 August 2012 for leave to file the proposed second further amended statement of claim (see T22-23).
Plaintiff's application to have parts of the defence struck out
It is convenient next to deal with the plaintiff's notice of motion filed 29 May 2012. The strike-out application was directed in terms to the amended defence to the further amended statement of claim. The motion was supported by written submissions filed in June 2012. The first defendant subsequently filed a further amended defence to the further amended statement of claim, together with a separate document headed "amended further and better particulars of the first defendant's amended defence to the further amended statement of claim" (each dated 23 July 2012).
The precise relief sought by the plaintiff in his motion was to some extent overtaken by those events. At the hearing before me, the plaintiff provided a schedule headed "defences and particulars in dispute". I was informed that the schedule provided a complete catalogue of the pleadings and particulars objected to (see T35.44). Unfortunately, it has been difficult in some instances to correlate that document with the written submissions filed at an earlier point in time. Where I have been left in doubt as to whether any particular objection was maintained, I have relied primarily upon the plaintiff's oral submissions as representing the final statement of his position.
The first defendant has pleaded defences of unlikelihood of harm under s 33 of the Defamation Act 2005, honest opinion under s 31 of the Act, fair comment at common law, common law qualified privilege and justification. The plaintiff's application was concerned with the defences of honest opinion, fair comment and justification.
In order to make sense of the discussion that follows, it is necessary to understand that the first defendant relies in most instances upon substantially the same particulars to identify the alleged proper material for comment and the substantial truth of the imputations sought to be justified. That position reflects the provision of the Defamation Act that "proper material" includes material that is substantially true: see s 31(5)(a) of the Act. The plaintiff's principal complaint is that the first defendant has failed to particularise the facts, matters and circumstances relied upon to establish the substantial truth of the alleged "proper material". On the strength of the same arguments, it is also contended that the particulars are inadequate to support the justification defence.
Defences to first matter complained of
The particulars relied upon to establish the substantial truth of the "proper material" begin at paragraph 13.2(a) of the further amended defence. Those are the particulars provided in support of the defence of honest opinion pleaded in response to imputation (a) arising from the first article. Imputation (a) is:
(a) the plaintiff deliberately and ruthlessly makes false and damaging statements about seminar spruikers and real estate agents on his website to advance his own real estate business;
The same particulars are repeated in support of the defence to imputation (b), which is:
(b) the plaintiff is a spineless bully in that he deliberately and ruthlessly makes false and damaging statements about seminar spruikers and real estate agents on his website to advance his own real estate business knowing that such people are unlikely to be able to defend themselves.
Ms Schoff noted that each imputation has at its heart the allegation that the plaintiff has deliberately and ruthlessly made false and damaging statements.
The plaintiff made a global objection to the inclusion in some particulars of the phrases "at the very least" and "including", evidently intended to preserve the first defendant's right to expand upon the particulars at a later point in time. I do not think those terms are appropriate in a pleading. The obligation of a party is to provide the best particulars he or she is able to at the time. If it is sought at a later time to supplement the particulars, any application to do so will be determined on its merits at that later time. The purported preservation of a future right to make such an application is neither necessary nor effective.
The first specific objection relates to paragraph 13.2(a)(5) of the further amended defence. That paragraph asserts:
The plaintiff claimed to be a consumer advocate when he was running his seminars to feed his empire by scaring consumers to not deal with real estate agents because they are unethical.
That allegation is expanded in the amended further and better particulars. The first part of the allegation is addressed at paragraph 1(a) of the further particulars, where the first defendant has specified where the plaintiff is alleged to have claimed to be a consumer advocate. Those particulars were included in the plaintiff's schedule of objections but no discrete argument was directed to them. In my view they are adequate.
The principal complaint appeared to relate to the particulars at paragraph 1(b) in support of the second part of the allegation in (5) set out above, that the plaintiff scared consumers not to deal with real estate agents. The form of the particulars of that allegation is simply to list a series of documents discovered by the plaintiff in the proceedings (relying upon "the entire content and tenor of those articles").
The plaintiff submitted that he should not have to trawl through those documents to find the relevant parts. As a counsel of perfection, further particulars of such a contention might appropriately be required in some circumstances. However, regard must be had to the nature of the contention. The first defendant relies upon the whole of each document to prove what is alleged in effect to be a concerted scare campaign. It may well be entirely appropriate to rely upon the whole of each document (and the combination of them), just as the meaning and effect of a defamatory publication is determined by reference to the whole of the words published.
Further, the content of the plaintiff's entitlement to a clear articulation of the case he has to meet must be assessed in the context of the court's obligations under the Civil Procedure Act 2005, including the requirement that the court's procedure should be implemented with the object of resolving disputes in such a way that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute: s 60 of the Act. Having regard to the breadth of the issues raised on the pleadings viewed in the context of the relatively limited publication of the matters complained of as pleaded to date by the plaintiff, I consider that the particulars in paragraphs 1(a) and (b) of the amended further and better particulars are adequate to put the plaintiff on notice of that part of the case he will have to meet as to imputations (a) and (b).
The next specific objection is to paragraphs 13.2(a)(5A) and (5B) of the further amended defence. Those paragraphs state:
Paragraph 5A:
While scaring consumers not to deal with real estate agents because they are unethical, the plaintiff promotes the Jenman agents, from whom he collects and has collected thousands of dollars a month in ongoing training fees.
Paragraph 5B:
The plaintiff built his multi-million dollar empire by running the consumer meetings, scaring consumers not to deal with real estate agents as they're unethical, then promoting the Jenman agents, from whom he received thousands a month in ongoing training fees.
Ms Schoff submitted that those particulars are objectionable on the basis that they are mere assertions or argumentative and are not supported by any identification of the facts, matters and circumstances relied upon to sustain the assertion.
A discrete complaint in respect of paragraphs 5A and 5B was the absence of any particulars to support the contention that the plaintiff promotes the Jenman agents and receives thousands of dollars a month from them in ongoing training fees.
Mr Castelan submitted that the adequacy of those particulars must be measured in the context of the fact that there has already been extensive discovery and interrogatories in these proceedings. He noted that the plaintiff has answered interrogatories as to amounts he has received from Jenman agents. In that context, it would appear that the plaintiff's particular complaint as to the allegation that he received ongoing training fees relates to a matter better within his knowledge than that of the first defendant. I am not persuaded that the particulars are inadequate or that any further particulars should be ordered on that specific issue.
In my view, however, there is force in the broader complaint as to 5A and 5B, which are expressed in the form of conclusions and must necessarily rest on more specific detail. The first defendant should provide further and better particulars of those paragraphs (if they are pressed).
The next objection is to the particulars of the following allegation at paragraph 13.2(a)(7) of the further amended defence:
The plaintiff has made false and damaging statements about seminar presenters and real estate agents, including statements made of and concerning the first defendant in an article on the Jenman website entitled "Desperate Struggles of a Dying Breed".
The first defendant has expanded that allegation in paragraph 1(c) of the amended further and better particulars. That paragraph has sub-paragraphs (i) to (v). There was no objection to paragraphs 1(c)(i) and 1(c)(iv) (see T31.26 and T33.5).
Paragraph 1(c)(ii) relates to statements allegedly made of and concerning Mr Adam Hudson. The particulars of falsity as to those statements rely upon the fact that Mr Hudson issued defamation proceedings against the plaintiff in Queensland. Mr Castelan noted that the first defendant relies specifically upon the fact that the articles have now been taken off the website, from which he submitted it may be inferred the statements were false. The plaintiff submitted that those particulars are incapable of sustaining the allegation of falsity of the statements concerning Mr Hudson. I agree. The existence and resolution of the defamation proceedings shed no light on the case the plaintiff has to meet as to whether any statement made by the plaintiff was false. The particulars at 1(c)(ii) should be struck out.
The same point was made in respect of paragraph 1(c)(iv) relating to allegedly false statements made by the plaintiff of and concerning Mr Kevin Young, where the only particular of falsity of the statements relied upon is the fact that Mr Young issued defamation proceedings against the plaintiff and the Neil Jenman Group Pty Ltd. The particulars assert that the first defendant infers that the statements made by the plaintiff and relied upon by Mr Young in support of his case were false. That particular should also be struck out.
A different objection was taken to particular 1(c)(v) relating to statements made by the plaintiff of and concerning Mr Enzo Raimondo in 2003. The first defendant asserts that the article published by the plaintiff carried the following imputations:
that Enzo Raimondo was real estate's equivalent of the former Iraqi information minister;
that Enzo Raimondo as president of the Real Estate Institute of Victoria covers up behaviour among real estate agents in Victoria that is deceitful and amoral.
In support of the plea that those imputations are false, the first defendant simply states that Enzo Raimondo is not real estate's equivalent of the former Iraqi information minister and did not cover up behaviour among real estate agents in Victoria that was deceitful and amoral.
The plaintiff submitted that, in order to establish that the imputations were false, the first defendant had to identify the context of Mr Jenman's statement and to say why the statements were false in that context. It was submitted that, in its present form, the pleading "creates a defamation proceeding within a defamation proceeding", placing the plaintiff in an untenable situation. If that is a difficulty, it is one which flows from the imputations on which the plaintiff has chosen to sue. In essence, the plaintiff seeks to vindicate his reputation against the allegation that he has deliberately and ruthlessly defamed other people on many occasions. The content of the obligation to provide particulars of the falsity of damaging statements allegedly made must to some extent be informed by the content of the statement said to be false. In the case of the Enzo Raimondo statements, there may be little more that can be said than that the statements are false. I am not persuaded that particular 1(c)(v) is liable to be struck out.
Separately, the plaintiff objected to paragraph 13.2(a)(6), where the first defendant asserts:
The plaintiff does not mention that the Jenman agents are simply typical real estate agents that were paying thousands per month to the plaintiff so that they could be called "Jenman agents" and could be called ethical by the plaintiff.
Ms Schoff submitted that paragraph (6) is also in the category of being an assertion or argumentative conclusion with no supporting particulars. Whilst there is some force in that submission, the burden of the particular is to identify a matter allegedly omitted to be stated by the plaintiff. In that context, it serves the purpose of identifying one of the ways in which the first defendant will put his case. I am not persuaded that it is liable to be struck out and I am not persuaded that it is necessary to order further particulars of that contention.
The next objection related to the particulars provided in support of the defences to imputation (g). The imputation is as follows:
(g) the plaintiff is a hypocrite in that he attacks seminar spruikers for making money by selling information on how to make more money in circumstances where the plaintiff made his first million dollars by being a seminar spruiker and he made most of his small fortune from selling his spruiking business.
In addition to the particulars already considered above, the plaintiff objected to paragraph 13.2(e)(3) and (4). Paragraph 13.2(e)(3) is in the same terms as paragraph 13.2(a)(6) considered above. For the reasons given in relation to that particular, I am not persuaded that paragraph 13.2(e)(3) is liable to be struck out.
Paragraph 13.2(e)(4) asserts:
The plaintiff boasted to a journalist in a newspaper article that he made a million dollars in a week many years before selling 118 tickets to his own real estate seminar for $10,000 per ticket.
Mr Castelan identified three answers to interrogatories as the basis for that contention (exhibit 1, answers 6(h), 6(i) and 6(j))(see T 52.44). In that context, the objection to the particular must be rejected, in my view. There can be no serious suggestion that the plaintiff is not on notice of the case he has to meet in that respect.
The particulars of honest opinion are repeated in support of the defence of justification to the first matter complained of. The plaintiff submitted that, where those particulars are insufficient to support the honest opinion defence, it must follow that they are insufficient for the purpose of the justification defence. That is plainly right.
It was further submitted in respect of the justification defence that the first defendant has failed to provide particulars of the allegation that any false and damaging statements were made deliberately and ruthlessly. The only allegation directed to that issue appears to be paragraph 13.5(a)(4) of the further amended defence, where the first defendant contends:
The plaintiff has made the false and damaging statements on his website so that consumers are scared into the belief that all real estate agents are unethical and dodgy, and the only ethical agents are Jenman agents, from whom the plaintiff receives and has received substantial ongoing monthly fees for training and for permission to refer to themselves as "Jenman agents".
In my view there is force in the plaintiff's complaint on this issue. As explained by Hunt J in Gross v Weston [2007] NSWCA 1, the existence of a state of mind is a fact as to which the party against whom it is pleaded is entitled to know the facts, matters and circumstances relied upon to establish it. The first defendant should provide further and better particulars in support of the contention that the statements were made deliberately and ruthlessly, including any matters from which that inference is to be drawn.
Defences to second matter complained of
Imputation (a) relied upon in respect of the second article is:
The plaintiff is renowned as being one of the most unethical property spruikers in the last 15 years.
Imputation (b) is:
the plaintiff is a fraudster who is operating one of the most sophisticated and longest running scams in Australia which involves him charging real estate agents for a seminar in which he teaches them how to profit from deceiving consumers in the sale of real estate and by charging them a fee to be permitted to call themselves Jenman real estate agents who the plaintiff misleads consumers into believing are the only ethical agents in the industry.
The particulars of honest opinion in respect of those imputations are set out at paragraph 14.2(a) of the further amended defence. The plaintiff submitted that those particulars are incapable of sustaining the defence, since none of the matters relied upon go to matters of ethics.
The particulars make allegations as to the plaintiff having made large amounts of money through his own real estate seminars while claiming that Jenman agents were the only ethical agents and labelling any other person who advocated property as a means to create long term wealth as "dodgy". I do not agree that the particulars are incapable of providing a proper basis for the opinion that the plaintiff's conduct was unethical or in the nature of a fraudulent scam.
The gist of the allegations is that the plaintiff's business model was to persuade people to pay him large sums of money for an ephemeral benefit (other than protection against being accused by the plaintiff of being dodgy). I am not persuaded that those particulars are liable to be struck out on the basis contended.
The second complaint is that many of the particulars suffer from the vice of being in the form of conclusions which do not put the plaintiff on notice of the facts, matters and circumstances relied upon to sustain them. There is some force in that complaint. Further, the particulars fail to specify whether the facts upon which the comment is based are expressly stated in the matters complained of, sufficiently referred to or notorious: Channel Seven Adelaide v Manock [2007 HSC 60; 241 ALR 468. I do not think the defence is liable to be struck out on that basis, but the first defendant will have to provide further particulars of those matters. That ruling extends to the plaintiff's objection to paragraphs 14.2(a)(14) and (14A) (and 14.3, which repeats some of those particulars for the purpose of the fair comment defence).
Separately, the plaintiff submitted that imputation (a) is incapable of being understood as an opinion rather than a statement of fact, since it speaks only to Mr Jenman's reputation and does not amount to any opinion stated by the author. Mr Castelan submitted that the article might be read as treating the first defendant as having adopted as an opinion the matter for which the plaintiff is said to be renowned, namely, that he is one of the most unethical property spruikers. In my view, that is reasonably arguable and is accordingly an issue which should be left to trial. I do not think that the defence of opinion to imputation (a) is liable to be struck out on that basis.
The same objection was taken to the defence of honest opinion as it related to imputation (c) as follows:
The Victorian Real Estate Institute has warned consumers to be wary of real estate agents associated with the plaintiff because they use some of the most unethical tactics that exist.
That is not asserted to be the opinion of a stranger (the Victorian Real Estate Institute) but the opinion of the first defendant (see paragraph 14(b)(a) of the further amended defence). In my view, the reliance on the defence of honest opinion in response to that imputation is problematic. I do not think the imputation is capable of being construed as the opinion of the first defendant (as opposed to that of the Victorian Real Estate Institute). The defence as to that imputation should be struck out with leave to replead.
Objection is taken to the particulars in support of imputations (g) and (h) in paragraphs 14.2(e) and (f) of the further amended defence on substantially the same basis as in the case of paragraph 14.2(a). For the reasons already given, the first defendant should provide further particulars stating the facts, matters and circumstances relied upon to sustain those allegations.
The next objection relates to imputation (i) which, in summary, imputes the plaintiff with having made deliberately false and damaging statements in a book called "Stitch" about to be released by him. The short point in respect of the defence of honest opinion in response to that imputation was that a book yet to be released and which the first defendant has not seen cannot form a proper basis for holding an opinion as to the content of the book. The first defendant accepts that he has not seen a draft manuscript of the book.
In my view, there is force in the plaintiff's complaint as to the defence of honest opinion to that imputation. I do not think the defence can properly be maintained on the basis of an opinion in respect of proper material of which the defendant was unaware when he expressed the opinion. Whilst the plaintiff has cited no authority for that proposition, it follows in my view as a matter of logic. The defence in respect of imputation (i) should be struck out.
It does not, however, follow that the defence of justification cannot be maintained in respect of that imputation. No adequate particulars have yet been provided to sustain that part of the defence. It will be necessary to return to that issue.
Defences to third matter complained of
The plaintiff relies upon the following imputations in respect of the third matter complained of:
(a) that he conducts himself like a criminal in that he unlawfully extorts up to $3,000 per month from real estate agents in return for his guarantee that he will not defame them;
(b) that he scams a living by conning real estate agents to pay him up to $3,000 per month in return for his guarantee that he will not defame them.
The particulars supplied in support of the defences of honest opinion pursuant to s 31 of the Defamation Act and fair comment at common law in response to those imputations appear at paragraph 14A.3 and 14A.4 of the further amended defence, as follows:
(1) the plaintiff has been trying to scare consumers not to buy real estate and that the whole property spruiking industry is dodgy;
(2) the plaintiff has been trying to persuade consumers only to deal with non dodgy real estate agents, being a Jenman agent;
(3) the Jenman agents pay to the plaintiff up to $3,000 per month;
(4) the plaintiff would not defame a Jenman agent as being unethical or dodgy.
Ms Schoff submitted that those particulars are incapable of providing a proper basis for an opinion that the plaintiff extorts money or conducts himself as a criminal. She further complained about the whole of the particulars as being conclusions which lack the required specificity.
The particulars have been supplemented in the amended further and better particulars at paragraph 3(d) and (e). As to the allegation of trying to scare consumers not to buy real estate and the allegation of trying to persuade consumers only to deal with "non dodgy" real estate agents, the particulars rely upon books and articles published by the plaintiff specified by reference to their discovery number in the plaintiff's list of documents. For the reasons given above in respect to a similar complaint, I am satisfied that, in the context of the issues raised in these proceedings, those particulars are adequate to put the plaintiff on notice of the case he has to meet in that respect.
However, the particulars do not identify any facts, matters or circumstance to support the allegation that "the plaintiff would not defame a Jenman agent as being unethical or dodgy". Particulars of that allegation should be provided.
I did not understand the plaintiff to have pursued his application in the motion filed 29 May 2012 for an order for discovery against the first defendant. If that is wrong, I will hear that application together with the application for discovery against the liquidator.
First defendant's application for discovery
The third application before the Court is the first defendant's notice of motion filed 18 June 2012 seeking further discovery; further and better answers to interrogatories and leave to file the further amended defence. The issues raised by the application for leave to amend the defence have been addressed in the context of the plaintiff's applications considered above. It will be necessary for each party to bring in an amended pleading in accordance with my rulings in this judgment.
The application for discovery was made by reference to six categories. The first category sought any draft of the manuscript "Stitched" intended to be published by the plaintiff. Ms Schoff opposed that category on the basis that the defendant is not entitled to discovery for the purpose of finding out whether or not he has a defence. That principle was not in dispute.
Mr Castelan submitted, however, that the terms of the draft manuscript have been put in issue by the fact that the plaintiff has pleaded an imputation referring to the book (imputation (i) in respect of the second article set out above). He submitted that the plaintiff must have known that, in pleading that imputation, the terms of the draft "would become relevant". Mr Castelan further submitted that it could be inferred from the plaintiff's previous conduct that there would be false and damaging statements in the draft book. I do not accept that the terms of the draft are put in issue by the plaintiff's reliance on an imputation referring to the book. In the absence of reliance upon his knowledge of the falsity of that imputation, that plea does not put the truth of the imputation (and thus the terms of the book) in issue.
However, whilst there is force in the submission that the defendant is not entitled to discovery for the purpose of finding out whether he has a defence, there is material in the particulars already pleaded by the first defendant to establish a proper basis for the defence of justification to the imputations of deliberately and ruthlessly making false and damaging statements. In my view, having regard to the terms in which the plaintiff himself promoted the forthcoming book (exhibit AJ3 to the affidavit of Andrew Jacobsen affirmed 18 June 2012), the manuscript and any draft of it are discoverable as being potentially relevant to those other truth defences.
The second category of documents relates to complaints or claims that the plaintiff has defamed a third party. The first defendant relied upon an article evidently published by the plaintiff in which he boasts:
Neil Jenman has written thousands of articles about spruikers. He has received hundreds of threats. There are only two cases, however, which have involved serious legal action.
The third category seeks related documents in respect of any such complaints including any correction or apology published by the plaintiff, any defences, any terms of settlement and any judgments given. Those categories are plainly discoverable, in my view. The issue whether the plaintiff has deliberately made false or damaging statements about other people is plainly in issue in the proceedings.
There was no dispute as to the fourth category.
The fifth and sixth categories relate to the plaintiff's receipt of commission payments from any Jenman approved agent. In my view, those documents are plainly relevant to the first defendant's truth defence.
Finally, the first defendant sought further and better answers to interrogatories 6(m) and 6(n) directed to whether the plaintiff had published any further material where he had sought to discredit the first defendant. The plaintiff objected to answering that interrogatory on the ground that it did not relate to any issue in the proceedings.
The first defendant relied upon the principle that, where a defamatory publication has been provoked by the plaintiff's conduct (for example forming part of a heated slanging match or by way of response to an attack), evidence of the plaintiff's conduct is admissible as rationally forming part of the context in which the publication complained of was made. It was submitted that such conduct will generally reduce the level of damages awarded to a successful plaintiff: Burstein v Times Newspapers Ltd [2001] 1 WLR 579.
In my view, it is implicit in that principle that the reason the plaintiff's conduct will reduce the level of damages is that the defamatory publication comes by way of response to a publication known to the defendant and thus mitigates the damage to reputation caused by the defamatory publication. I see no warrant for allowing the first defendant to obtain answers going beyond any publication known to him to which he claims to have been responding. Accordingly, I do not propose to make any further order in respect of those interrogatories.
I direct the parties to bring in short minutes of order within 3 days to reflect these reasons.
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Decision last updated: 22 August 2013
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