Pittwater Aquatic Club Co-Operative Limited v Casey Van Dyke

[2020] NSWDC 783

District Court

New South Wales

Medium Neutral Citation:

Pittwater Aquatic Club Co-Operative Limited v Casey Van Dyke [2020] NSWDC 783

Hearing dates:

3 December 2020

Date of orders:

3 December 2020

Decision date:

18 December 2020

Jurisdiction:

Civil

Before:

Gibson DCJ

Decision:

(1) Note the defendant’s challenges to the capacity (UCPR rule 28.2) and form of the imputations and as to the entitlement of the plaintiff to sue as a corporation are dismissed.
(2) Grant leave to the plaintiff to file the Amended statement in the form provided to the Court, save for paragraphs 6 and 8 headed “particulars of identities", within 7 days.
(3) The defendant is to file a Defence by 16 December 2020.
(4) Matter stood over to Defamation List on Thursday 17 December 2020 for a timetable.
(5) Defendant pay plaintiff’s costs of today.

Catchwords:

TORT – defamation – imputations – form and capacity

Legislation Cited:

Co-operatives (Adoption of National Law) Act 2012 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Bargold Pty Ltd v Mirror Newspapers Ltd [1981] 1

NSWLR 9

Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227

Drummoyne Municipal Council v Australian

Broadcasting Corporation (1990) 21 NSWLR 135

Lewis v Daily Telegraph [1964] AC 234 at 262

South Hetton Coal Co Ltd v Northeastern News Ltd [1894] 1 QB 133

Toben v Milne [2014] NSWCA 200

Texts Cited:

T K Tobin QC & M G Sexton SC SG, “Australian Defamation Law and Practice”

Category:

Procedural and other rulings

Parties:

Plaintiff: Pittwater Aquatic Club Co-Operative Limited
Defendant: Casey Van Dyke

Representation:

Counsel:
Plaintiff: Mr N Olson
Defendant: Mr R Weaver

Solicitors:
Plaintiff: Mr N Hill, Austral Legal
Defendant: Mr K Bolwell, Work Lawyers

File Number(s):

2020/121692

Judgment

1. These are my reasons for rulings on 3 December 2020 on the form and capacity of the imputations pleaded in the amended statement of claim in these proceedings.

2. The plaintiff (“the PAC”) brings proceedings for defamation for two publications, namely emails sent on 24 and 26 April 2019 and attachments.

The first matter complained of

3. The first matter complained of comprises an email and four attachments and is addressed to, and emailed to, members of the PAC. The defendant is the author of the email.

4. In general terms, the email commences with an explanation of the plaintiffs concerns as President of the PAC and the circumstances in which she offered to resign by reason of the conduct of the Board, which she describes in the first attachment as “dysfunctional” and as needing “transparent governance”. Attached to this email is a letter from Work Lawyers, headed “urgent request for an inspection and/or enquiry into the affairs of the PAC”, addressed to NSW Fair Trading. In this letter, these solicitors list what they call “a number of issues” at the fore of “the clubs governance arrangements” which “now threaten the club’s overall integrity”. For this reason, they urgently request an enquiry into the affairs of the PAC pursuant to clauses 500 and/or 520 of the Co-operatives (Adoption of National Law) Act 2012 (NSW).

5. The imputations pleaded as arising from the first matter complained of are as follows:

1. The PAC is seriously mismanaged.

2. The PAC is so dysfunctional that its affairs require urgent investigation by the Department of Fair Trading.

3. The PAC has an environment that is hostile and threatening to its members.

4. The PAC is incapable of functioning in the best interests of its members.

The second matter complained of

6. The second matter complained of is an email addressed to, and emailed to, the members of the PAC. The defendant is the publisher. Unlike the first matter complained of, which contained a number of attachments, this is a direct appeal to members raising issues of “good governance” and “what should happen for the future good of the PAC”.

7. The imputations pleaded as arising from the second matter complained of are as follows:

1. The PAC has an environment that is a hostile and threatening environment for its members.

2. The PAC is seriously mismanaged.

The challenges to the form and capacity of the imputations

8. Mr Weaver’s written submissions conflate issues of form and capacity with a summary dismissal argument, which I will deal with first.

Can a corporation bring proceedings without a claim for special damage?

9. Mr Weaver’s argument is to the effect that a company cannot maintain an action for defamation in the absence of a plea for special damage, as a company can only be injured in its pocket: South Hetton Coal Co Ltd v Northeastern News Ltd [1894] 1 QB 133 at 138; Lewis v Daily Telegraph [1964] AC 234 at 262. He submits that only the members of the Board can bring defamation proceedings, either as members of the Board in its entirety or alternatively those Board members who can be identified.

10. The common law principles upon which corporations are entitled to bring defamation proceedings are set out comprehensively in T K Tobin QC & M G Sexton SC SG, “Australian Defamation Law and Practice”, LexisNexis, at [3040] and it is not necessary to repeat these principles here. As the learned authors note at p. 2060, all these principles were substantially overtaken by the uniform legislation which restricts the rights of corporations to sue only in the very clear exception set out in s 9, which Mr Weaver acknowledges does not apply here.

11. While corporations are restricted from certain claims such as aggravated damages (which are not sought here), there is no requirement for special damages to be pleaded.

The challenges to the form and capacity of the imputations

12. Pursuant to Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 28.2, Mr Weaver repeats his submissions that none of the imputations pleaded are capable of being conveyed as the plaintiff cannot, for example, mismanage itself. The imputation must relate to the conduct of a person as well as to the plaintiff’s trading or commercial reputation, which is not possible where the matters complained of are emails to members only. In the alternative, he submits that the imputations pleaded contain ambiguous wording and should be struck out pursuant to UCPR r 13.28.

The tests for form and capacity

13. In Toben v Milne [2014] NSWCA 200 at [20] - [21] Beazley and Ward JJA explained:

“[20] The specificity with which an imputation must be pleaded was referred to by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137,where his Honour said:

“If a defendant has posted in a public place a sign that simply says ‘X is disgusting’, the degree of specificity with which it is appropriate to require X to formulate the defamatory imputation will need to be related to the nature and content of the defamatory matter.”

14. The standard by which issues of law raised in a separate trial on capacity are determined is explained in Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227:

"[134] That standard by which the issue of law raised by the separate trial was to be determined was addressed in Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716 ("Favell") where the plurality (Gleeson CJ, McHugh, Gummow and Heydon JJ, Kirby J generally agreeing) approved the following statement by McPherson JA in the Court of Appeal:

“Whether or not [the pleading] ought to and will be struck out [as disclosing no cause of action] is ultimately a matter for the discretion of the judge who hears the application. Such a step is not to be undertaken lightly but only, it has been said, with great caution. In the end, however, it depends on the degree of assurance with which the requisite conclusion is or can be arrived at. The fact that reasonable minds may possibly differ about whether or not the material is capable of a defamatory meaning is a strong, perhaps an insuperable, reason for not exercising the discretion to strike out. But once the conclusion is firmly reached, there is no justification for delaying or avoiding that step [at] whatever stage it falls to be taken.” (Emphasis added)

[135] Accordingly, the capacity determination is "an exercise in generosity not parsimony"; while it involves a "matter of impression ... the impression is not of what the words mean but of what a jury could sensibly think they meant": Berezovsky (at [16]) per Sedley LJ delivering the judgment of the court. Implicit in Sedley LJ's observation, is that the question of course is "what a jury could sensibly think [the words] meant" to the ordinary reasonable reader.

[136] One reason "great caution" is mandated at the capacity stage, is because the conclusion which necessarily underpins a determination that the matter complained of is not capable of conveying the pleaded imputations is that "no reader could reasonably understand the words to bear any meaning outside the range delimited ... by the judge; and that it would be 'perverse' for any jury to do so": Jameel v Wall Street Journal Europe SPRL [2003] EWCA Civ 1694; [2004] EMLR 89 ("Jameel") (at [9]) per Simon Brown LJ (Mummery and Mance LJJ agreeing).

[137] Thus, the focus should be on the fact that the decision deprives the plaintiff of the opportunity to present his or her case to the jury, the importance of whose constitutional role in this area as representatives of the community is frequently emphasised: see John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50 ; (2003) 77 ALJR 1657 ("Rivkin") (at [2]) per Gleeson CJ (who also agreed with Callinan J); (at [184]) per Callinan J. The significance of the jury's role warrants the application of a "high threshold of exclusion": Jameel (at [14]) per Simon Brown LJ.”

Challenges to the form and capacity of the imputations

15. I proposed to deal with the challenges as to form and capacity of the imputations together, as this was the approach taken by the parties.

16. By way of general observation, there can be no question of identification issues arising, as the PAC is identified by name in both matters complained of, whereas none of the individual Directors have been identified. References to the “Board” are the closest attempt made to identify the persons involved, and the reference is generally to the Board as a whole.

17. A good example is imputation 6(a). As to capacity, it is reasonably arguable that this imputation is conveyed by reason of the following:

1. The reference to “governance problems at the PAC” in lines 18 – 21;

2. The list of grievances set out at lines 33 – 48;

3. The references to “problems on the Board” and “a dysfunctional Board” in lines 73 – 76;

4. The “major issues” at lines 82 – 104;

5. The reference to the problems with the plaintiff’s “governance arrangements” which “threaten the club’s overall integrity” (lines 128 – 129); and

6. The whole of the letter from Work Lawyers, which is a request for an urgent enquiry by NSW Fair Trading into the affairs of the PAC.

18. An imputation that a corporate plaintiff is seriously mismanaged is capable of affecting its trading reputation, whether it is a “not for profit” corporation or not. Complaints about the “Board” in its capacity as the controlling mind of the plaintiff is just as capable of giving rise to an imputation about the corporation as well as amounting to a group libel of the Board members themselves: Bargold Pty Ltd v Mirror Newspapers Ltd [1981] 1 NSWLR 9 at 11 per Hunt J.

19. For the above reasons, this imputation is reasonably capable of being conveyed.

20. The submission of insufficient precision in the words “seriously mismanaged” appears to be based on the use of the word “seriously”. However, the whole point of the letter from the solicitors to NSW Fair Trading is that the mismanagement has reached the stage of requiring an enquiry or inspection of an urgent kind. Reading the word “seriously” in the context of the matter complained of, in the manner explained in Toben v Milne [2014] NSWCA 200 at [13] – [14], there is sufficient clarity for the defendant to know the case she has to meet in relation to justification.

21. The challenges to the form and capacity of this imputation fail.

22. Mr Olsen relied on the same submissions in relation to each of imputations 6(b), 8(a) and 8(b), and I make the same findings in relation to both the form and capacity of each of these imputations, conformably with the reasoning set out above.

23. As to imputation 6(c), Mr Weaver submits that to say that the PAC “has an environment that is hostile and threatening to its members” does not ascribe fault to the plaintiff such that the ordinary reasonable reader would think less of the plaintiff. I interpret this as a challenge to defamatory meaning as well as to capacity; the challenge to capacity is that this is “plainly the fault of individual members of the Board, not the plaintiff”.

24. To say of any organisation which provides amenities such as social functions and what the defendant calls “club culture” in the first matter complained of, is injurious in that persons are less likely to want to become or remain members or to use the PAC amenities. The imputation is reasonably capable of being conveyed from the references to the “toxic atmosphere” (lines 104 and 106) and to the general conduct of the PAC, which includes bombarding members with “pseudo-legal letters” and intimidation, bullying and threatening them.

25. Mr Weaver did not challenge the implied repetition in the term “hostile and threatening” or enlarge upon the reasons why an imputation to this effect is insufficiently precise. As the above extracts from the first matter complained of show, the allegations made in the matter complained of are of a very general nature. It is not necessary for the plaintiff to be more specific than the defendant: Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137 per Gleeson CJ.

26. As to imputation 6(d), this imputation is clearly capable of being conveyed by reason of the contents of the letter from Work Lawyers, as well as from the defendant’s explanation as to the reasons for paying for this letter out of her own pocket in an attempt to resolve these issues. Not only is such an imputation reasonably capable of being injurious to the plaintiff’s trading reputation, but it is sufficiently precise in that it encapsulates the reasons for the plaintiff taking this drastic step of retaining legal advice to resolve this very issue.

27. Mr Weaver also challenges the defamatory meaning of this imputation, asserting that the ordinary reasonable reader to whom the matter complained of was addressed (namely members of the PAC) would not think less of the plaintiff. However, such persons may arguably feel reluctance to use the plaintiff’s facilities and/or renew their membership, so it clearly is an issue potentially defamatory in terms of the plaintiffs trading reputation.

28. Mr Weaver submits that all that is conveyed is a disappointment at the conduct of certain members of the Board: see lines 117 – 123. However, issues of “bane and antidote” of this nature are matters for the tribunal of fact, and not for a summary strike out on the basis of absence of defamatory meaning.

29. As noted above, I propose to make the same rulings in relation to imputations 8(a) and 8(b).

30. Mr Weaver also challenged one paragraph of the particulars of identity pursuant to UCPR r 15.19(1)(d). Mr Olsen agreed to strike the offending portion of the particulars out.

31. Mr Weaver’s challenges to the imputations pleaded have failed in the circumstances, leave to file the Amended Statement of Claim should be granted. Mr Weaver did not seek to be heard on costs, which should follow the event.

Orders

1. Note the defendant’s challenges to the capacity (UCPR rule 28.2) and form of the imputations and as to the entitlement of the plaintiff to sue as a corporation are dismissed.

2. Grant leave to the plaintiff to file the Amended statement in the form provided to the Court, save for paragraphs 6 and 8 headed “particulars of identities", within 7 days.

3. The defendant is to file a Defence by 16 December 2020.

4. Matter stood over to Defamation List on Thursday 17 December 2020 for a timetable.

5. Defendant pay plaintiff’s costs of today.

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Decision last updated: 22 December 2020