Pham v Legal Services Commissioner
[2016] VSC 450
•5 August 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2015 05757
| QUAN PHAM | Plaintiff |
| v | |
| LEGAL SERVICES COMMISSIONER (ABN 66 489 344 310) | Defendant |
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JUDGE: | KEOGH J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 May 2016 |
DATE OF JUDGMENT: | 5 August 2016 |
CASE MAY BE CITED AS: | Pham v Legal Services Commissioner |
MEDIUM NEUTRAL CITATION: | [2016] VSC 450 |
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DEFAMATION – Pleadings – Application to strike out amended statement of claim – Application for summary judgment – Imputations – Whether article is capable of conveying meaning relied upon – No reasonable prospect of success in establishing article conveys plaintiff’s asserted imputation.
PRACTICE AND PROCEDURE – Summary judgment application – No real prospect of success – Granted - Civil Procedure Act 2010 ss 62, 63 and 64 – Barrow v The Herald & Weekly Times Pty Ltd [2015] VSC 263.
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APPEARANCES: | Counsel | Solicitors |
| Plaintiff appeared in person | ||
| For the Defendant | Mr M Hoyne | Lander & Rogers |
HIS HONOUR:
Introduction
The plaintiff was employed by Kabo Lawyers from 24 November 2011 to 10 July 2012. He was first issued a practising certificate, which authorised him to engage in legal practice as an employee solicitor, on 16 February 2012. It was a condition of that certificate that the plaintiff engage in supervised legal practice for a period of two years. The plaintiff did not commence legal practice as a supervised employee solicitor until 27 February 2012, and did not engage in practice after 10 July 2012. On 7 August 2012 the plaintiff made a statutory declaration that in the period of his employment with Kabo Lawyers he had completed the two years of supervised legal practice. The plaintiff submitted an application to the defendant to have his supervised legal practice condition removed, relying on the statutory declaration.
The defendant refused the plaintiff’s application and subsequently brought proceedings against the plaintiff in the Legal Practice List of the Victorian Civil and Administrative Tribunal,[1] seeking ‘an order that [the plaintiff] be found guilty of professional misconduct’ within the meaning of s 4.4.3(1) of the Legal Profession Act 2004 ‘in relation to the making of a statutory declaration containing allegedly false statements.’ On 22 December 2014, Senior Member Butcher found the plaintiff guilty of professional misconduct.
[1]Legal Services Commissioner v Pham (Legal Practice) [2014] VCAT 1591 (22 December 2014).
On or about 27 February 2015 the following publication titled ‘False declaration plus creative accounting equals professional misconduct’ (‘the publication’) was uploaded by the defendant to its then website:
By paragraph 19A of the amended statement of claim in this proceeding, Mr Pham alleges that in its natural and ordinary meaning the publication was defamatory and understood to mean that:
(a) the plaintiff also was engaged in activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(b) the plaintiff also was engaged in activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct;
(c) the plaintiff also was engaged in activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct;
(d) the plaintiff also was engaged in dishonest activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(e) the plaintiff also was engaged in dishonest activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct;
(f) the plaintiff also was engaged in dishonest activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct;
(g) the plaintiff also was engaged in unethical activities of misrepresenting financial figures or data amounting to a finding of professional misconduct;
(h) the plaintiff was also engaged in unethical activities of using loopholes in financial regulations to present financial figures or data in a misleadingly favourable light amounting to a finding of professional misconduct; and/or
(i) the plaintiff was also engaged in unethical activities of exploitation of loopholes in financial regulations in order to gain advantage amounting to a finding of professional misconduct.
In relation to subparagraphs (a), (d), (g) and (h) references to ‘financial figures or data’ are intended to be references to ‘financial figures or financial data’.
In relation to this pleading the defendant submits that:
(a) the imputations pleaded by the plaintiff are not capable of arising; and
(b) alternatively, the imputations do not differ in substance.
The principal application of the defendant is for an order striking out the amended statement of claim and entry of summary judgment in its favour. Alternatively, the defendant seeks an order striking out paragraphs 19A(b) to 19A(i) of the amended statement of claim.
The strike out application
The principal application is governed by ss 62 and 63 of the Civil Procedure Act 2010 (CPA). Such an application was considered by Macaulay J in Barrow v The Herald & Weekly Times Pty Ltd,[2] in which his Honour expressed the test as follows:
[2][2015] VSC 263, [11] (citations omitted) (‘Barrow’).
The test under s 63 of the CPA is whether the plaintiff has a real as opposed to a ‘fanciful’ chance of success in the proceeding. The test permits of the possibility that there may be cases in which it appears that, although a plaintiff’s case is not hopeless or bound to fail, it does not have a real prospect of success. It follows that the exercise of the discretion is not limited to cases that are hopeless or bound to fail. In this sense, the applicable test is to some degree more liberal to a defendant than the test applicable under the former rule 23.01.
His Honour went on to summarise the principles concerning the pleading and summary dismissal of defamatory imputations as follows:[3]
[3][2015] VSC 263, [12] (citations omitted).
(a)the test is whether the matter complained of is capable of conveying to the ordinary reasonable reader the imputation on which the plaintiff relies;
(b)in applying this test, a court must reject any strained, forced or utterly unreasonable interpretation of the matter complained of. The exercise of imputation is to a large degree that of forming an impression, not to be obscured by over-elaborate analysis in a search for hidden meanings;
(c)a court must proceed on the basis that the ordinary reasonable reader is a person of fair, average intelligence, who
(i) is neither perverse, morbid or suspicious of mind;
(ii) is not avid for scandal or unusually suspicious or naïve;
(iii)engages in a degree of loose thinking, can and does read between the lines in the light of his or her general knowledge and experience of worldly affairs, and has a capacity for implication that is greater than that of a lawyer; and
(d)a court must draw a distinction between the ordinary reasonable reader’s understanding of what the matter complained of is actually saying, and a judgment or conclusion which the reader may reach as a result of his or her own beliefs or prejudices.
For the defendant it was submitted that:
It is plain from a reading of the whole of the article that the ‘creative accounting’ referred to in the heading is a reference to the false assertion made by the Plaintiff in his statutory declaration that he had completed two years’ supervised legal practice by having worked 17.5 hours per day, 7 days per week, for seven and a half months. It is equally clear from a reading of the whole of the publication that no allegation is made that the plaintiff engaged in any form of financial wrongdoing.
The defendant accepted that the term ‘creative accounting’ used in the title of the publication was, if considered alone, ambiguous. However, reading the whole of the publication the reader would understand exactly what creative accounting means in this instance. It does not carry any meaning related to wrongful or inappropriate financial accounting. An imputation that the plaintiff was engaged in activities of misrepresenting financial figures or financial data, could not arise from the publication. Each of the pleaded imputations relied upon a natural meaning including wrongful or inappropriate financial accounting by the plaintiff. Because the publication was not capable of bearing that meaning, no such imputation could arise, and the statement of claim should be struck out.
In response the plaintiff submitted:
(a) the title of the publication should be given greater emphasis or significance than the balance of the publication. In the plaintiff’s written submissions, a particular passage of Kirby J’s judgment in Chakravarti v Advertiser Newspapers Ltd[4] was relied upon, to some extent, in support of the argument that particular attention may be given to the title of the publication. I note that, in the relevant passage, Kirby J was dealing with the issue of fair report, rather than the topic of whether the imputations are capable of arising. Further, it was put to me in oral submissions by counsel for the defendant, and I accept, that the authoritative approach taken on this question is that of Aikin J in Mirror Newspapers Ltd v World Hosts;[5]
[4](1998) 154 ALR 294, 346.
[5](1979) 141 CLR 632, 646; see also Hockey v Fairfax Media Publications Pty Limited (2015) 237 FCR 33, 50 [66], [71]–[72].
(b) the title of the publication is capable of bearing the meaning contended for (for instance, the meaning pleaded in paragraph 19A(a) of the amended statement of claim);
(c) information in the balance of the publication related to the false statutory declaration and did not exclude or otherwise explain the reference to creative accounting in the title of the publication;
(d) the last sentence of the publication invites the reader to go to another source for ‘further information’. This last sentence ‘confirms’ the meaning of the words in the title of the publication for which he contended. I understand the plaintiff’s argument to be that a reader would conclude that information in relation to the plaintiff’s ‘activities of misrepresenting financial figures or (financial) data’ was to be found elsewhere.
In response counsel for the defendant argued that the title of the publication was adequately explained in the publication. It was fanciful to consider that the title meant that the plaintiff had engaged in financial wrongdoing, yet not a word about that was actually spoken in the body of the publication. It was impermissible to draw an inference upon an inference, which the imputations pleaded by the plaintiff required.
In my view the plaintiff’s analysis requires that the phrase ‘creative accounting’ be taken out of context of both the title and the content of the publication. As it appears in the title of the publication ‘creative accounting’ is part of the equation leading to professional misconduct. Creative accounting is not a separate topic or issue. The content of the publication explains the history leading to the finding of professional misconduct by Senior Member Butcher and includes the following paragraphs:
VCAT heard that Mr Pham claimed to have worked as a solicitor for 17.5 hours per day, seven days a week for the entirety of the seven and a half months he worked at the law firm, including the time before he held a practising certificate.
VCAT rejected Mr Pham’s calculations and determined that he had made statements in his statutory declaration which he knew to be false. Mr Pham was found him guilty professional misconduct [sic].
It is clear from the title and content of the publication that the creative accounting referred to in the title, taken together with the false declaration, led to the finding of professional misconduct. The calculations referred to in the above paragraph, explained elsewhere in the publication, are the creative accounting aspect of the equation which leads to the finding of professional misconduct. Paragraph 19A of the plaintiff’s pleading requires that the reader search for a hidden meaning which the reader must infer is contained in the ‘further information’ referred to. In other words, the meaning contended for by the plaintiff is not a meaning contained within the words of the publication. It requires the reader to infer that ‘creative accounting’ means ‘creative financial accounting’, to treat these words as separate from the balance of the equation in the title of the publication, and to further infer that the explanation of that creative financial accounting is to be found elsewhere than in the publication. In other words, it requires ‘… a reader who engages in unreasonable and speculative “inference upon inference”.’[6]
[6]Barrow [2015] VSC 263, [18].
In my view the plaintiff has no real prospect of establishing that the publication is capable of conveying, to the ordinary reasonable reader, any of the imputations pleaded in paragraph 19A of the amended statement of claim, or any meaning that the plaintiff engaged in wrongful or inappropriate financial accounting.
Although it is not strictly necessary, I should say something about the other two arguments dealt with at the hearing on 20 May.
Imputations in paragraph 19A do not differ in substance
Counsel for the defendant argued that the same evidence would be required to prove each of the first three imputations. In relation to the balance of the imputations, whether the activity was a dishonest activity or an unethical activity or simply an activity was ‘… a matter of characterisation and would not require additional evidence.’ Reliance was placed on the judgment of Beach J in Franchise Central (Australia) Pty Ltd v Fairfax Media Publications Pty Ltd,[7] in which his Honour, when considering rules relating to the pleading of imputation, said:
Whilst whether an imputation has been properly pleaded is to be determined as a matter of practical justice and in the relevant circumstances of the impugned publication, the following propositions emerge from the authorities:
(a)First, distinct meanings should be pleaded – and the test for distinctiveness is whether the evidence required to justify each meaning would be substantially different.
[7][2011] VSC 379, [23]; also see Lyons v Fowler [2014] VSC 627, [25].
The plaintiff argued that whether imputations had been properly pleaded was to be determined as a matter of practical justice. The approach taken by the defendant was ‘too strict’ and involved placing the pleaded imputations ‘under the microscope’. The imputations were clearly different. What was necessary was whether the defendant knew the case it had to meet.
I agree with the submissions of the defendant. Each of the imputations pleaded in (b) to (i) are indistinct from the imputation pleaded in (a), in the sense that the same evidence would be required to justify each meaning. If I am wrong in relation to the defendant’s application to strike out the whole of the statement of claim, then I would rule that subparagraphs (b) to (i) of paragraph 19A of the statement of claim should be struck out subject to the right of the plaintiff to re‑plead subparagraph (a), if he wished to do so, to incorporate in a new version an aspect or aspects of the part of the pleading struck out. Clearly on no view could that extend to an entitlement to a pleading including reference to using loopholes in financial regulations or exploitation of loopholes in financial regulations.
Plaintiff’s strike out application
In support of his application to strike out the defence to the amended statement of claim, the plaintiff argues:
(a) a pleaded non‑admission or bare denial is to be treated as a deemed admission;
(b) therefore amongst other things the defendant has admitted the pleaded imputations in paragraph 19A of the amended statement of claim;
(c) the alternative meanings pleaded by the defendant in paragraph 32 of its amended defence are identical to three of the meanings pleaded in paragraph 19A of the amended statement of claim and constitute admission by the defendant justifying summary judgment;
(d) the contextual truth defence was not available because there was no difference between the natural and ordinary meaning pleaded by the plaintiff and that admitted by the defendant; and
(e) the misleading inaccuracy in the publication meant that the fair comment defence was not available.
In response the defendant argued:
(a)on the applicable rules a pleaded non‑admission or bare denial does not amount to an admission;
(b) & (c)the meanings pleaded in the Hore‑Lacy defence are substantially similar to those pleaded by the plaintiff, the critical difference was that they did not refer to financial matters;
(d)the plaintiff’s submission misunderstands the contextual truth defence. It was arguable that the meanings pleaded by the defendant swamp the plaintiff’s meanings such that the plaintiff cannot be further damaged by reason of the imputations relied upon by the plaintiff; and
(e)the fair report defence was clearly a matter for trial.
I agree with the submissions of the defendant and conclude that the plaintiff’s application is without substance. The defendant has not made admissions as contended by the plaintiff. Clearly the critical difference between the meaning pleaded by the plaintiff and the alternate meaning pleaded by the defendant is, as identified by counsel for the defendant, that the latter makes no reference to financial matters. The plaintiff’s submission misunderstands the contextual truth defence, and proceeds on the false premise that there is no difference between the meanings pleaded. Finally, if the matter were to proceed, the fair report defence is clearly a matter for trial.
Conclusion
I am satisfied that the plaintiff’s claim has no real prospect of success. I am not satisfied that the trial should nonetheless proceed for any reason referred to in s 64 of the CPA. Accordingly, I will give summary judgment in favour of the defendant.