Poland v Hedley [No 6]

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   POLAND -v- HEDLEY [No 6] [2024] WASC 168
CORAM:   TOTTLE J
HEARD:   14 DECEMBER 2023
DELIVERED          :   3 MAY 2024
FILE NO/S:   CIV 1370 of 2019
BETWEEN:   GREGORY DAVID POLAND
Plaintiff
AND
KATE HEDLEY
First Defendant
FAIRFAX DIGITAL AUSTRALIA & NEW ZEALAND PTY LTD
Second Defendant
NATHAN JOHN HONDROS
Third Defendant
CLAIRE BRADLEY
Fourth Defendant
DAVID BIRCH
Fifth Defendant
ANDREW WILLIAM HASTIE
Sixth Defendant
ZAK RICHARD FRANCIS KIRKUP
Seventh Defendant

Catchwords:

Practice and procedure - Pleadings application for leave to join additional plaintiffs and for leave to amend amended substituted statement of claim following successful strike out application - Applications refused - Turns on own facts

Defamation - Where plaintiff alleges third parties who provided material to media defendants and had telephone discussions concerning the publication of a newspaper article based on materials provided - Whether third parties publishers of the matters complained of - Third parties not publishers - Proposed re‑amended statement of claim fails to disclose reasonable cause of action against third parties for publication of matters complained of - Turns on own facts

Unlawful means conspiracy - Where proposed re‑amended substituted statement of claim fails to plead facts that identify the proposed additional plaintiffs as the subject of an agreement or understanding and where particulars fail to support plea that defendants intended to injure the proposed additional plaintiffs - Where proposed re‑amended statement of claim fails to articulate causal connection between the acts undertaken to implement the conspiracy and the losses claimed by the plaintiff and where proposed re‑amended statement of claim fails to articulate causal connection between the acts undertaken to implement the conspiracy and the losses claimed by the proposed additional plaintiffs - Proposed re-amended statement of claim fails to disclose reasonable cause of action and would be embarrassing - Turns on own facts

Legislation:

Nil

Result:

Leave to amend substituted statement of claim refused

Category: B

Representation:

Counsel:

Plaintiff	:	Mr M L Bennett & Mr A Tharby
First Defendant	:	Mr M C Goldblatt
Second Defendant	:	Mr M C Goldblatt
Third Defendant	:	Mr M C Goldblatt
Fourth Defendant	:	Mr M C Goldblatt
Fifth Defendant	:	Mr M C Goldblatt
Sixth Defendant	:	Mr M C Goldblatt
Seventh Defendant	:	Mr M C Goldblatt

Solicitors:

Plaintiff	:	Bennett
First Defendant	:	Carmel Galati
Second Defendant	:	Carmel Galati
Third Defendant	:	Carmel Galati
Fourth Defendant	:	Carmel Galati
Fifth Defendant	:	Carmel Galati
Sixth Defendant	:	Carmel Galati
Seventh Defendant	:	Carmel Galati

Cases referred to in decision:

Bleyer v Google Inc [2014] NSWSC 897; (2014) 88 NSWLR 670
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
Central Coast Council v Norcross Pictorial Calendars Pty Ltd [2021] NSWSCA 75
Dank v Whittaker (No 1) [2013] NSWSC 1062
Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537
English v Vantage Holdings Pty Ltd [2021] WASCA 47
Foss v Harbottle (1843) 2 Hare 461; 67 ER 189
Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566
Johnson v Gore Wood & Co (a ﬁrm) [2002] 2 AC 1; [2001] 1 All ER 481
Marex Financial Ltd v Sevilleja [2021] AC 39; [2021] 1 All ER 585; [2020] UKSC 31
Metaxas v Legal Profession Complaints Committee [2020] WASCA 27
Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2021] WASCA 105; (2021) 57 WAR 468
Poland v Hedley [No 5] [2023] WASC 294
Trackem Pty Ltd v Revenue Partners [2021] WASC 245
Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186; (2020) 61 VR 580

TOTTLE J:

Introduction

In this action the plaintiff has attempted to combine claims for damages for defamation with claims for damages for loss caused by an alleged conspiracy between the defendants to injure him by unlawful means. The defamation claims against the fourth to seventh defendants and the conspiracy claims were struck out of the amended substituted statement of claim.[1]
[1] See Poland v Hedley [No 5] [2023] WASC 294 (the August 2023 reasons).
These reasons concern the plaintiff's application for leave to replead those claims. The application was originally brought by a minute of proposed orders filed on 19 September 2023. The plaintiff amended the application on 16 November and again on 5 December 2023. In its final form the application was expanded to include an application to amend the writ by joining two companies associated with the plaintiff as plaintiffs and seeking leave to amend the statement of claim in the terms of 'or substantially similar to a minute of proposed re-amended substituted statement of claim filed on 5 December 2023' (I will refer to this minute as 'the proposed statement of claim').
The August 2023 reasons outline the factual background, explain the nature of the plaintiff's case and refer to the principles governing strike out applications as summarised in English v Vantage Holdings Pty Ltd.[2] Those principles apply with equal force to applications for leave to amend. These reasons assume familiarity with the August 2023 reasons and the definitions used in those reasons are adopted in these reasons.
[2] English v Vantage Holdings Pty Ltd [2021] WASCA 47 [55] ‑ [56].
I have concluded that leave to amend the writ to join the proposed second plaintiff (Village Scarborough Beach) and the proposed third plaintiff (Coventry Village) as plaintiffs and leave to amend the amended substituted statement of claim in the terms of the proposed statement of claim should be refused. My reasoning is as follows.

The proposed statement of claim

The structure of the proposed statement of claim is essentially the same as that adopted for the amended substituted statement of claim. The introductory paragraphs and the conspiracy plea have been expanded reflecting the proposed addition of Village Scarborough Beach and Coventry Village as plaintiffs. The conspiracy plea is lengthy and detailed and is not readily amenable to being summarised. The impugned paragraphs are reproduced in the appendix to these reasons. The plea of the fourth to seventh defendants' involvement in the publication of the Articles incorporates by reference significant paragraphs of the conspiracy plea. It is convenient to consider the conspiracy plea first.

The conspiracy plea

The claims of Village Scarborough Beach and Coventry Village

In written submissions the plaintiff described Village Scarborough Beach and Coventry Village as proposed plaintiffs with claims in the alternative to the plaintiff's claim.[3] Other than in respect of the claims for damages, the alternative causes of action are not pleaded as alternative claims in a conventional manner, that is, no distinction is drawn between the facts the plaintiff relies on to establish liability, and the facts relied on by each of the proposed additional plaintiffs in support of their alternative claims. A departure from the conventional approach would not, of itself, be a basis for disallowing the plea if the facts required to establish the alternative causes of action were otherwise pleaded but, as I explain below, they are not.
[3] Plaintiff submissions filed 16 November 2023 [5].
In paragraphs 19 to 33 of the proposed statement of claim (the plea of the alleged agreement or common design) neither Village Scarborough Beach nor Coventry Village are identified as subjects of the agreement or common design.
In paragraph 34 (the plea of the intention to injure) the only acknowledgment of the alternative claims of Village Scarborough Beach and Coventry Village is that the singular 'plaintiff' has been amended to 'plaintiffs', '[t]he purpose of the Conspiracy on the part of each of the defendants was to cause harm to the plaintiffs'. A similar amendment has been made in paragraph 35 (the plea of unlawful means).
The plea of an intention to injure in paragraph 34 is supported by lengthy particulars. None of the particulars, however, support the existence of an intention to injure Village Scarborough Beach or Coventry Village. One particular records that the Second Article referred to the plaintiff's interest in the 'Strzelecki Group' but this reference stops a long way short of establishing an intention to injure either Village Scarborough Beach or Coventry Village.
In the August 2023 reasons, when stating the principles that governed the tort of unlawful means conspiracy, I noted that an intention to injure is a critical element of the tort of unlawful means conspiracy and that a conspiracy to injure a person is distinguishable from an agreement to do an unlawful act that results in damage to that person.[4] Given the significance of those propositions in the context of the alternative claims, it is helpful to refer to the Victorian Court of Appeal's discussion in Uber Australia Pty Ltd v Andrianakis,[5] in which the Court approved the analysis of the relevant principles and authorities undertaken by Weinberg J in Dresna Pty Ltd v Misu Nominees Pty Ltd,[6] as follows:[7]
[4] August 2023 reasons [67].
[5] Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186; (2020) 61 VR 580.
[6] Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 [99] ‑ [104].
[7] Uber Australia Pty Ltd v Andrianakis [31] ‑ [34] (footnotes omitted).
In Dresna Pty Ltd v Misu Nominees Pty Ltd, Weinberg J noted the diﬀerence between the two forms of the tort of conspiracy, namely, a conspiracy by unlawful means and a conspiracy by lawful means. A conspiracy by lawful means requires an agreement or combination between two or more persons to perform acts which, although themselves not unlawful, are done with the sole or predominant purpose of injuring the plaintiﬀ. An unlawful means conspiracy requires an agreement or combination to perform unlawful acts with the intention, which need not be the sole or predominant purpose of the conspirators, to injure the plaintiﬀ. Weinberg J emphasised, however, that an unlawful means conspiracy 'still requires proof of an intention to injure', and continued:
It is generally thought that the correct test of intention in this context is that stated by Lord Denning MR in the Court of Appeal decision in Lonrho Ltd v Shell Petroleum Co Ltd ... His Lordship said ...:
I would suggest that a conspiracy to do an unlawful act — when there is no intent to injure the plaintiﬀ and it is not aimed or directed at him — is not actionable ... But if there is an intent to injure him then it is actionable. The intent to injure may not be the predominant motive. It may be mixed with other motives ... It is sufficient if the conspiracy is aimed or directed at the plaintiﬀ, and it can reasonably be foreseen that it may injure him, and does in fact injure him.
Weinberg J then referred to his earlier decision in McKellar, and said of the intention requirement that 'though perhaps difficult to apply in some cases, [it] was intended to prevent claims by those who suﬀered incidental, though foreseeable loss, as a result of the commission of what is sometimes described as "undirected conduct"'.
Finally, Weinberg J accepted as correct the statement of Mason P in the New South Wales Court of Appeal in McWilliam v Penthouse Publications Ltd that a plaintiﬀ in an unlawful means conspiracy case:
must establish intent to injure the plaintiﬀ. It is not enough to establish that the acts of the conspirators necessarily involve injury to the plaintiﬀ or that that plaintiﬀ was a person reasonably within the contemplation of the conspirators as a person likely to suﬀer damage ...
On appeal in Dresna, the Full Court of the Federal Court wholly endorsed the reasoning of Weinberg J. Kiefel and Jacobson JJ referred to Weinberg J's reasoning, expressly agreed with the passage from McWilliam quoted by Weinberg J and stated that, for the tort of conspiracy to injure by unlawful means to be established, a plaintiﬀ must prove that the defendants 'acted in order that, not with the result that, the plaintiﬀ should suﬀer damage'. Earlier, Kiefel and Jacobson JJ said that 'the test for an action based on a conspiracy is what was the object in the mind of those combining when they acted as they did', but in our view that general statement should not be understood as requiring that the intention to injure must be the sole or predominant motive, as stated in Lonrho.
In my view paragraphs 19 to 35 of the proposed statement of claim do not plead reasonable causes of action on behalf of Village Scarborough Beach and Coventry Village because:
(a)as stated in [7] neither Village Scarborough Beach nor Coventry Village are identified as the subject of the agreement or common design on which the alleged conspiracy is based; and
(b)the particulars of the intention to injure given under paragraph 34 do not support the existence of any intention on the part of the defendants to injure Village Scarborough Beach or Coventry Village. To establish their alternative causes of action Village Scarborough Beach and Coventry Village must each plead and prove that the defendants intended to injure them. At present (ignoring other difficulties with the alternative causes of action considered below) taken at their highest, the facts pleaded in support of the alternative causes of action establish that Village Scarborough Beach and Coventry Village suffered incidental damage consequent upon the publication of the Articles.

The telephone conversations

A particular focus of the defendants' opposition to the grant of leave to amend is the pleading of the substance of various telephone conversations that took place between the defendants immediately prior to the publication of the Articles.
In paragraphs 25, 28, 29 and particulars (i)(b), (iii), (iv), (v) and (vi)(b) the plaintiff pleads (in summary) that the participants in the conversations 'generally discussed publication of a media article to the effect that the first plaintiff was corrupt' or that the participants in the conversations discussed that the Recording 'showed that the first plaintiff and members of the State Government were involved in corruption'.
By pleading what was discussed in the telephone conversations in this way the plaintiff has attempted to do what he previously professed he was unable to do because the substance of the telephone conversations was something 'peculiarly within the defendants' knowledge'.[8] In contrast to the position adopted earlier, in oral submissions counsel for the plaintiff contended, in effect, that the substance of the telephone discussions as pleaded in the proposed statement of claim could be inferred from various pleaded facts. The plaintiff's counsel emphasised that whether the inferences as to the substance of the telephone discussions should be drawn was a matter for trial.[9]
[8] Plaintiff's submissions in response to Defendant's application to strike out (filed 23 March 2023) [68].
[9] ts 320.
Applicable legal principles include the following:
(a)Counsel has a professional obligation to ensure there is a proper factual foundation for allegations made in a pleading.[10] In this context 'proper' is the equivalent of reasonable.
(b)The requirement for a proper factual foundation for a pleading does not, in an appropriate case, prevent a plaintiff from pleading facts that may not be capable (at the time the statement of claim is pleaded) of proper particularisation because the defendant knows the facts and the plaintiff does not. A plaintiff may be permitted to plead material facts on the basis that particulars will be provided after obtaining discovery of documents and answers to interrogatories.[11]
(c)The jurisdiction to strike out, and conversely the discretion to refuse leave to amend, should be exercised with caution.
(d)An application for leave to amend a pleading is not an occasion on which to determine whether there is evidence to substantiate the allegations the plaintiff wishes to plead.[12] The question to be decided is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to the party (on its pleadings) to prove facts at the trial which would constitute a cause of action.[13] Evidentiary issues are for trial and are not to be resolved on an application to strike out.
(e)Allegations of serious unlawful conduct must generally be pleaded with specificity and particularity but as explained in the authorities, (most recently in Uber Australia Pty Ltd v Andrianakis)[14] conspiracies are generally proved by inferential reasoning and in a practical sense it will often be difficult, if not impossible, for a plaintiff to give precise particulars.
(f)In Caswell v Powell Duffryn Associated Collieries Ltd,[15] Lord Wright explained the distinction between inference and conjecture as follows:[16]
Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.
[10] Metaxas v Legal Profession Complaints Committee [2020] WASCA 27 [68] - [69], [71] (Quinlan CJ & Pritchard JA), [155] (Mitchell JA); see also Trackem Pty Ltd v Revenue Partners [2021] WASC 245 [35] and [36] (Archer J).
[11] Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566, 570.
[12] Uber Australia Pty Ltd v Andrianakis [56].
[13] English v Vantage Holdings Pty Ltd [55] - [56].
[14] Uber Australia Pty Ltd v Andrianakis [55] ‑ [56].
[15] Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152.
[16] Caswell v Powell Duffryn Associated Collieries Ltd (169).
The overt conduct of the defendants from which inferences as to the substance of the telephone conversations may be drawn comprises the following:
(a)Mr Hastie met with Mr Grainger on 25 February 2019 and Mr Grainger disclosed the existence of the Recording to Mr Hastie on the basis that it would not be disclosed without Mr Grainger's consent and Mr Hastie agreed (paragraphs 19 ‑ 22).
(b)Mr Hastie asked Mr Grainger to send the Recording to Ms Bradley's personal email address and he did so (paragraph 22).
(c)Mr Hastie asked Ms Bradley to send the Recording to Mr Birch's personal email address and she did so (paragraphs 23 ‑ 24).
(d)Either Mr Hastie, Ms Bradley or Mr Birch sent the Recording to Mr Hondros (paragraphs 4BD ‑ 4BF).
(e)The timing of the telephone conversations in relation to the publication of the Articles (paragraphs 29 ‑ 31 and particular (xviii) under paragraph 34).
(f)The content of the Articles (paragraphs 5 and 11).
(g)Mr Hastie told Mr Grainger that he had disclosed the Recording to journalists without Mr Grainger's consent because it was in the public interest to do so (particular (xxii) under paragraph 34).
The overt acts are supplemented by the pleas that Mr Hastie and Mr Kirkup regarded the plaintiff as a political opponent (particular (xix) under paragraph 34).
This is an unusual case because the plaintiff's lawyers had previously considered that the materials available to them did not enable them to make allegations as to the substance of the conversations. That circumstance lends some force to the defendants' contention that the plaintiff's pleading of the content of the conversations is the product of speculation and conjecture. Ultimately, however, the plaintiff has pleaded the overt acts on which he relies and the question of what inferences should be drawn from the conduct constituted by those acts is a factual issue that should be left to trial. In my assessment, it cannot be said, at this stage, that the inferences are not capable of arising from the pleaded facts or facts that are open to the plaintiff to prove at trial on the basis of the pleaded facts. The terms in which the plaintiff has pleaded the substance of the telephone conversations is not a reason to refuse leave to amend.

The 'political opponent' particulars

In the amended substituted statement of claim the plaintiff pleaded at length what he described as the 'Relevant political background to the Articles'. The matters falling within this description were struck out on the grounds that they were irrelevant and were embarrassing and prejudicial to the fair trial of the action.[17]
[17] August 2023 reasons [23].
As particulars to the allegation that the plaintiff was a political opponent of Mr Hastie and Mr Kirkup, the plaintiff has included some of the matters contained in the amended substituted statement of claim under the heading 'Relevant political background'. These particulars are unnecessary. They exemplify narrative complexity that is to be avoided in pleadings. Particulars (a) to (c) of particular (xix) under the heading 'Particulars of Intention' in paragraph 34 will be disallowed on the grounds that they are embarrassing and are likely to prejudice or delay the fair trial of the action.

The loss claims

The plaintiff's claims

FOI legal expenses

The plaintiff's claim in particular (ii) of the 'Particulars of loss and damage' given under paragraph 36 is an expanded version of the plea contained in particulars (ii) and (iii) under paragraph 23 of the amended substituted statement of claim. That plea was struck out on the ground that it did not adequately plead the causal connection between the alleged conspiracy and the incurring of the legal expenses constituting the loss.[18]
[18] August 2023 reasons [104] ‑ [106].
The expansion of the earlier plea consists of the inclusion of pleas that; (i) the freedom of information requests related to the subject matter of the Articles, (ii) identified the three individuals who made the requests to the Peel Development Corporation; and (iii) referred to an additional freedom of information request made to the office of the Honourable Stephen Dawson MLC.
The proposed amendment to particular (ii) does not address the fundamental inadequacy of the causation plea in the earlier pleading as identified in the August 2023 reasons. As the defendants point out in their submissions, the plea does not expose the factual basis of the allegation that the plaintiff was 'required to respond' and had 'incurred legal expenses in considering and responding' to freedom of information requests directed to the Peel Development Commission and the Honourable Stephen Dawson MLC. The plaintiff's role as deputy chairman of the Commission came to an end on 27 February 2019, immediately after publication of the First Article. The basis upon which it could be alleged that the plaintiff was required to respond to a freedom of information request directed to the Peel Development Corporation is not apparent. The point has even greater force in relation to the request directed to the office of the Honourable Stephen Dawson MLC ‑ on what basis could the plaintiff have been required to respond to a freedom of information request directed to a Member of the Legislative Council?
Particular (ii) of the particulars given under paragraph 36 will be disallowed on two grounds, first, it does not disclose a reasonable cause of action and, secondly, it is embarrassing because it does not disclose the basis of the plaintiff's claim. Given that this is the second challenge to this plea I am not prepared to allow the plea on the basis that the defendants can seek further and better particulars at a later date.

Scarborough Project

The pleading of causation in the plaintiff's plea of a derivative loss arising from Village Scarborough Beach's lost opportunity to further the Scarborough Project also suffers from difficulty. The difficulty arises in two respects.
First, particular (vii) begins with the expression 'by reason of'. The use of this compendious expression is calculated to avoid the requirement to plead the facts on which the causal connection is based. The approach fails to inform the defendants of the underlying basis of the case they are required to meet. In the context of this case, this has added importance because (as explained in the August 2023 reasons) the defendants have foreshadowed reliance on what they have described as 'the long‑standing principle' that requires a claim for compensation for injury to reputation to be brought as an action for defamation (the coherence principle).[19] If, as appears may be the case, the proposition underlying the causal connection pleaded in particular (vii) is that the plaintiff's reputation was damaged by the publication of the Articles and this affected Development WA's attitude to Village Scarborough Beach, then the defendants may renew their reliance on the coherence principle. In any event, the defendants are entitled to know the basis on which causation is alleged.
[19] August 2023 reasons [62] ‑ [80].
Secondly, particulars (iv) to (vii) allege that Village Scarborough Beach (a wholly owned subsidiary of Strzelecki Holdings Pty Ltd ‑ see paragraph 1.4) was the corporate vehicle used to pursue the opportunity constituted by the Scarborough Project yet particular (viii) alleges that '[t]he first plaintiff thereby lost the opportunity to further the Scarborough Project'. Not only does this plea not follow logically from particulars (iv) to (vii) but no facts are pleaded to establish the causal connection asserted by the adverb 'thereby' in particular (viii). This is a significant omission for two reasons, first, and most obviously, the particulars (vi) and (vii) make it clear that it was Village Scarborough Beach that lost the opportunity to further the Scarborough Project. Secondly, according to a search of the records maintained by the Australian Securities & Investment Commission of Village Scarborough Beach attached to an affidavit sworn in support of the application for leave to amend,[20] Strzelecki Holdings does not hold the single issued share in the capital of Village Scarborough Beach beneficially. It is thus not apparent on the face of the proposed pleading how a reduction in the value of Village Scarborough Beach caused by the loss of the opportunity to pursue the Scarborough Project caused a loss in the value of Strzelecki Holdings, when it did not hold its share in Village Scarborough Beach beneficially, that in turn caused a diminution in the value of the plaintiff's shareholding in Strzelecki Holdings.
[20] Affidavit of Thomas Coltrona sworn 16 November 2023 attachment 'TAC-1'.
The views expressed in the preceding paragraphs are sufficient to justify disallowing the plaintiff's claim for damage based on the lost opportunity to further the Scarborough Project on the grounds that particulars (iii) to (viii) disclose no reasonable cause of action because the basis upon which it is alleged that the plaintiff suffered the loss is not pleaded and (for the same reason) the plea is embarrassing.
The defendants raised a further argument. They contended that the proper plaintiff in respect of any loss suffered by reason of the loss of the opportunity to further the Scarborough Project was Village Scarborough Beach, not the plaintiff. In support of that contention the defendants relied on the rule in Foss v Harbottle.[21] The plaintiff contended that the plaintiff's claim did not offend what has been described as the reflective loss principle which is based on the rule in Foss v Harbottle.
[21] Foss v Harbottle (1843) 2 Hare 461; 67 ER 189.
In Central Coast Council v Norcross Pictorial Calendars Pty Ltd,[22] Bathurst CJ, with whom Macfarlan and Gleeson JJA agreed, traced the development of the reflective loss principle as it has been developed in the English authorities:[23]
What has been described as the reﬂective loss principle articulated by the English Court of Appeal in Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 at 223–4; [1982] 1 All ER 354 (Prudential Assurance)(the principle) is that where loss is suffered by a company as a result of wrongdoing in respect of which each of the company and the shareholder has a cause of action, a shareholder cannot sue to recover the diminution in the value of his or her shares (or loss of beneﬁts associated with his or her shareholding) resulting from the loss suffered by the company. The rationale for the principle has been described as the prevention of double recovery (Prudential Assurance at Ch 222; Johnson v Gore Wood & Co (a ﬁrm) [2002] 2 AC 1 at 62–3, 66–7;[2001] 1 All ER 481; [2000] UKHL 65 (Johnson) per Lord Millett, Lord Goff agreeing), or on the basis that the shareholder does not suffer a loss distinct from the company and the shareholder is barred from pursuing the claim by the principle in Foss v Harbottle (1843) 2 Hare 461 (Foss v Harbottle) (Marex at [10] per Lord Reed PSC, Lady Black and Lord Lloyd-Jones JJSC agreeing), or perhaps because the shareholder has no legal or equitable interest in the company's assets ([Marex Financial Ltd v Sevilleja [2021] AC 39; [2021] 1 All ER 585; [2020] UKSC 31] Marex at [80] per Lord Reed PSC).
In Johnson, the House of Lords affirmed the principle. Lord Bingham set out the principle at AC 35 in the following terms:
'These authorities support the following propositions. (1) Where a company suffers loss caused by a breach of duty owed to it, only the company may sue in respect of that loss. No action lies at the suit of a shareholder suing in that capacity and no other to make good a diminution in the value of the shareholder's shareholding where that merely reﬂects the loss suffered by the company. A claim will not lie by a shareholder to make good a loss which would be made good if the company's assets were replenished through action against the party responsible for the loss, even if the company, acting through its constitutional organs, has declined or failed to make good that loss. So much is clear from Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204; [1982] 1 All ER 354, particularly at Ch 222–3; All ER 366–7, Heron International Ltd v Lord Grade, particularly at 261–2, George Fischer (Great Britain) Ltd, particularly at 266 and 270–1, Gerber Garment Technology Inc v Lectra Systems Ltd and Stein v Blake [1998] 1 All ER 724, particularly at 726–9. (2) Where a company suffers loss but has no cause of action to sue to recover that loss, the shareholder in the company may sue in respect of it (if the shareholder has a cause of action to do so), even though the loss is a diminution in the value of the shareholding. This is supported by Lee v Sheard [1956] 1 QB 192 at 195–6; [1955] 3 All ER 777 at 778, George Fischer and Gerber. (3) Where a company suffers loss caused by a breach of duty to it, and a shareholder suffers a loss separate and distinct from that suffered by the company caused by breach of a duty independently owed to the shareholder, each may sue to recover the loss caused to it by breach of the duty owed to it but neither may recover loss caused to the other by breach of the duty owed to that other. I take this to be the effect of Lee v Sheard, at QB 195–6; All ER 778, Heron International, particularly at 262, R P Howard Ltd v Woodman Matthews and Co (a ﬁrm), particularly at 123, Gerber and Stein v Blake, particularly at 726. I do not think the observations of Leggatt LJ in Barings Plc (in admin) v Coopers & Lybrand (a ﬁrm) at 435B and of the Court of Appeal of New Zealand in Christensen v Scott [1996] 1 NZLR 273 at 280, lines 25–35, can be reconciled with this statement of principle.'
[22] Central Coast Council v Norcross Pictorial Calendars Pty Ltd [2021] NSWSCA 75.
[23] Central Coast Council v Norcross Pictorial Calendars Pty Ltd [103] ‑ [104].
Bathurst CJ recorded that the propositions stated by Lord Bingham in Johnson v Gore Wood & Co (a ﬁrm),[24] had been approved by the majority in Supreme Court of the United Kingdom in Marex Financial Ltd v Sevilleja,[25] and went on to refer to the decisions of the Australian courts in which the principle had been applied. Bathurst CJ concluded his analysis as follows:[26]
In the present case, neither of the parties contended that the approach of Lord Sales in Marex should be adopted. However, as I indicated, the Council contended that the exception to the principle, namely that the shareholder could recover for loss to the value of his shares in the company as a result of damage suffered by the company where the shareholder had a cause of action but the company did not (Lord Bingham's second point: see [104] above), should not be accepted.
I am unable to agree. There seems to be no reason for the principle to apply to circumstances where the company has no cause of action to recover the loss. This is so regardless of the rationale of the principle. If the purpose is to prevent double recovery, there is no prospect of double recovery where the company has no cause of action. If is as I conceive it, the principle is based on the rule in Foss v Harbottle that only the company can sue for a wrong done to the company, the principle is not outﬂanked because there is no actionable wrong done to the company, the company having no cause of action. If, as Perram J suggests, it is associated with the doctrine of maintenance of capital, there is no reduction of capital if a shareholder recovers funds that the company as a matter of law cannot recover. Finally, there is no policy reason not to impose such an exception.
[24] Johnson v Gore Wood & Co (a ﬁrm) [2002] 2 AC 1; [2001] 1 All ER 481, 528 ‑ 529, 532 - 534.
[25] Marex Financial Ltd v Sevilleja [2021] AC 39; [2021] 1 All ER 585; [2020] UKSC 31.
[26] Central Coast Council v Norcross Pictorial Calendars Pty Ltd [118] ‑ [119].
In Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2],[27] the Court of Appeal expressed the view that the law in relation to the reflective loss principle was settled.[28] The Court summarised the principles arising from the authorities as follows:[29]
1.Where a company suffers loss caused by a breach of duty owed to it, only the company may sue in respect of that loss. No action lies at the suit of a shareholder to make good a diminution of the value of the shareholder's shareholding where that loss merely reflects the loss suffered by the company.
2.This will be so even if the company has declined or failed to take action to recover the loss.
3.If the company suffers loss, but has no cause of action to sue to recover that loss, a shareholder with a cause of action who suffers loss to the value of his shares may sue in respect of it.
4.The reflective loss principle does not prevent a shareholder suing for a loss suffered from a breach of duty owed to him or her where the loss is separate and distinct from the loss suffered by the company.
5.The principle extends to the case where both the company and the shareholder have a claim for breach of duty or breach of contract which caused the loss.
[27] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2021] WASCA 105; (2021) 57 WAR 468.
[28] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [265].
[29] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [268] (footnotes omitted).
Referring to the factual context in which the issue in Mineralogy arose, the Court of Appeal went on to observe:[30]
We do not see, at least in the present context, a relevant distinction between, on the one hand, claims by each of the shareholder and company for an indemnity against loss, and, on the other hand, claims by each of the shareholder and the company for damages for breach of a tortious or contractual duty. In each case, the company's assets relevantly encompass the value of the chose in action, whatever that may be, and recovery by the shareholder on his or her claim would either diminish the company's assets to that extent, or result in double recovery against the defendant. The application of the reflective loss principle to cases where both the company and the shareholder have a cause of action for breach of tortious duty or contract demonstrates that, notwithstanding that the principle may have roots in the rule in Foss v Harbottle, it is not merely a standing issue and is not rendered inapplicable by the mere fact that the shareholder has a distinct cause of action. That being so, we do not accept Mr Palmer's submission that the fact that cl 11.5(c) gives him an independent right of indemnity takes his case outside of the reflective loss principle.
The result is that, in accordance with the policy of the law, any cause of action by Mr Palmer under cl 11.5(c) by way of indemnity could not, and would not, encompass a claim to recover the loss he suffered or incurred as a shareholder which is merely reflective of the loss suffered or incurred by Mineralogy against which Mineralogy is indemnified under cl 11.5(c) of the FC Deed. As already noted, the claim pleaded by Mr Palmer is wholly and unambiguously of that character. Also, as already noted, Mr Palmer's claim proceeds on the basis that Mineralogy has a cause of action (but is precluded from suing on it). [emphasis supplied]
[30] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [270].
The Court of Appeal held that the application of the reflective loss principle meant that the shareholder (Mr Palmer) did not have a reasonable cause of action because the loss claimed by him was reflective of the loss claimed by the company (Mineralogy).[31]
[31]Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [246], [286].
For the reasons I have explained the basis upon which the plaintiff claims loss arising from the lost opportunity to further the Scarborough Project is not apparent from the facts pleaded in the proposed statement of claim. Consequently, without making assumptions about how the plaintiff might advance a claim, not only is it unnecessary but it is impossible to express a view on the application of the reflective loss principle. That said, out of deference to the submissions advanced by counsel for both sides, I offer these observations. Assuming the plaintiff intended to plead: (i) a single conspiracy formed with the intention of injuring both him and Village Scarborough Beach so that they both have a cause of action (ii) both he and Village Scarborough Beach suffered loss and (iii) the plaintiff's loss is a diminution in the value of his shareholding in Strzelecki Holdings and derives (in ways that are presently unclear) from Strzelecki Holdings' shareholding in Village Scarborough Beach, then the plaintiff's claim would be for a loss merely reflective of the loss suffered by Village Scarborough Beach. The plaintiff would not have a reasonable cause of action in respect of that reflective loss.

Coventry Village

The plaintiff's plea of loss based on the affairs of Coventry Village faces similar difficulties to the plea of loss derived through Village Scarborough Beach. No facts are pleaded to support the assertions of causation in particulars (xi) and (xii) in circumstances in which it is not apparent why SBSK (whatever or whoever that is) was in a position to make demands in respect of the matters referred to in the subparagraphs to particular (xi), and when it is not apparent why the plaintiff was 'compelled to accede' to the demand that Strzelecki Holdings purchase SBSK's units in the Coventry Village Square Unit Trust.
Particular (xiii) pleads that by reason of Coventry Village having to pay interest on loans that had previously not borne interest the plaintiff suffered a loss in the sum of $2,176,293.10. No facts are, however, pleaded to explain how the plaintiff is alleged to have suffered that loss.
The basis of the plaintiff's alternative claim founded on a diminution in the value of the share he held in Coventry Village is not pleaded. Coventry Village is the trustee of the Coventry Village Square Unit Trust. The value of shares in a corporate trustee do not ordinarily fluctuate with the fortunes of the trust of which it is the trustee.
Particulars (ix) to (xiii) disclose no reasonable cause of action because the basis upon which it is alleged that the plaintiff suffered the loss is not pleaded and (for the same reason) the plea is embarrassing.

The observations I have made about the application of the reflective loss principle in the context of the plaintiff's claim for loss arising from Village Scarborough Beach's lost opportunity apply to his claim in relation to the loss arising from Coventry Village's alleged loss.

Other projects

Particulars (xiv) and (xv) do not advance discrete claims for pecuniary loss. Assuming, however, that those particulars are to be read in conjunction with particular (xvii) then the difficulty that arises is that the facts linking the expenses incurred by Strzelecki Holdings to a loss suffered by the plaintiff are not pleaded.
Particular (xvi) is a general assertion of loss unsupported by any pleaded factual substratum.
Particulars (xiv), (xv) and (xvii) will be disallowed on the grounds that they do not disclose a reasonable cause of action and are embarrassing.

Village Scarborough Beach and Coventry Village damages claims

The particulars under paragraph 37 incorporate particulars (iii) to (vii) under paragraph 36 and the particulars under paragraph 38 incorporate particulars (ix) and (xii) under paragraph 36 and thus they incorporate the difficulties in the pleas of causation that I have identified above and will be disallowed for the same reasons as the pleas sought to be incorporated are disallowed.

The fourth to seventh defendants' participation in the publication of the Articles

In the August 2023 reasons I set out the legal principles governing who may be liable as an original publisher of defamatory statements. In my analysis I placed particular reliance on the exposition of the applicable legal principles undertaken by McCallum J in Dank v Whittaker (No 1).[32] In that case her Honour concluded that the authorities establish that where a person merely contributes material to an article but has no control over the publishing process that person will not ordinarily be liable unless he or she has assented to the final form of the article.[33]
[32] Dank v Whittaker (No 1) [2013] NSWSC 1062.
[33] Dank v Whittaker (No 1) [26].
The plea in the amended substituted statement of claim that the fourth to seventh defendants participated in the publication of the Articles was struck out on the basis that the provision by the fourth to seventh defendants of the Recording to Mr Hondros was not sufficient to establish liability on their part for the publication of the Articles.[34] In the proposed statement of claim the plaintiff has attempted to support the publication plea by drawing on the substance of the telephone calls pleaded in the proposed statement of claim in support of the conspiracy plea.
[34] August 2023 reasons [57] ‑ [60].
The telephone conversations may be summarised as follows:
(a)Mr Hastie and Mr Kirkup had a telephone conversation at 1.39 pm on 25 February 2019 in which Mr Hastie informed Mr Kirkup that the Recording showed the plaintiff and members of the State Government were involved in corruption and that they agreed that Mr Hastie would provide the Recording to the media for the publication of an article based on the Recording (paragraph 25).
(b)Mr Kirkup discussed the Recording in a telephone conversation with Ms Caitlyn Rintoul at 1.47 pm on 25 February 2019 (paragraph 26).
(c)Mr Kirkup and Mr Hastie had a telephone conversation on 25 February 2019 in which they discussed Mr Kirkup's discussion with Ms Rintoul but nothing is pleaded to show that anything came of the conversation with Ms Rintoul (paragraph 27).
(d)Mr Kirkup and Mr Hondros had a telephone conversation at 3.38 pm on 25 February 2019 in which Mr Kirkup informed Mr Hondros of the Recording and that it showed that the plaintiff and members of the State Government were involved in corruption and that Mr Kirkup told Mr Hondros that Mr Hastie would send a copy of the Recording to Mr Hondros for the purpose of the publication of a media article based on the Recording (paragraph 28).
(e)Mr Hondros and Mr Hastie had a telephone conversation at 3.51 pm on 25 February 2019 in which they discussed the substance of the Recording and that it showed that the plaintiff and members of the State Government were involved in corruption and that Mr Hondros agreed to publish an article based on the Recording (paragraph 29).
(f)Mr Hondros and Ms Hedley had two telephone conversations, the first at 4.43 pm and the second at 5.00 pm on 25 February 2019 in which they agreed that they would write and publish an article based on the Recording (paragraph 31).
(g)Mr Birch participated in three telephone conversations with Mr Kirkup and four conversations with Mr Hastie on 26 and 27 February 2019 in which there was a general discussion of a publication of an article to the effect the plaintiff was corrupt (particular (iii) of the 'Particulars of steps taken in furtherance of the Conspiracy' under paragraph 33).
(h)Mr Kirkup participated in telephone conversations with the other defendants on 25, 26 and 27 February 2019 in which there was a general discussion of a publication of an article to the effect that the plaintiff was corrupt (particular (iv) of the 'Particulars of steps taken in furtherance of the Conspiracy' under paragraph 33).
(i)Mr Hondros participated in telephone conversations with the other defendants on 25, 26, 27 and 28 February 2019 in which there was a general discussion of a publication of an article to the effect the plaintiff was corrupt (particular (v)(b) of the 'Particulars of steps taken in furtherance of the Conspiracy' under paragraph 33).
(j)Ms Hedley participated in a conversation with Mr Kirkup on 26 February 2019 in which there was a general discussion of a publication of an article to the effect the plaintiff was corrupt (particular (vi)(b) of the 'Particulars of steps taken in furtherance of the Conspiracy' under paragraph 33).

The fourth defendant - Ms Bradley

The plaintiff's claim that Ms Bradley was a publisher of the Articles rests on two matters, that she provided a copy of the Recording to Mr Hondros (paragraph 4BD) and that Mr Hastie instructed Ms Bradley, to provide the Recording to Mr Birch, and that she did so, 'for the purpose of the Recording being provided to the media for publication of an article based on the Recording to the effect that the first plaintiff was corrupt' (paragraph 24). In my view, none of the particulars given under the heading 'Particulars of purpose' under paragraph 24 support the plea that Ms Bradley had the alleged purpose. Putting that point to one side, however, even if it is accepted that Ms Bradley had the purpose alleged in paragraph 24, the pleaded facts do not establish that Ms Bradley did anything more than participate in the process of providing the Recording to Mr Hondros. The pleaded facts do not establish that Ms Bradley exercised any control over the publication of the Articles by the media defendants nor do the alleged facts establish that Ms Bradley assented to publication of the Articles in their final form. The proposed statement of claim does not disclose a reasonable cause of action against Ms Bradley as a publisher of the Articles and the proposed pleading of the claim against Ms Bradley as a publisher will not be allowed.

The fifth defendant - Mr Birch

The plaintiff's claim that Mr Birch was a publisher of the Articles rests on the factual allegations that he provided a copy of the Recording to Mr Hondros and he had three telephone conversations with Mr Kirkup and four conversations with Mr Hastie. It is alleged that in each conversation there was a general discussion of a publication of an article to the effect the plaintiff was corrupt. That Mr Birch had separate general discussions with Mr Hastie and Mr Kirkup about the publication of an article to the effect that the plaintiff was corrupt is of no moment for the purposes of the allegation that he was a publisher of the Articles. Those alleged conversations do not add in any material respect to the case pleaded against Mr Birch in the amended substituted statement of claim that was struck out pursuant to the August 2023 reasons. General discussions, to which the media defendants were not a party, about the publication of an article to the effect that the plaintiff was corrupt cannot on any basis constitute the exercise of control over the process of publication. And, neither can they amount to an assent to the terms in which the Articles were published. The proposed statement of claim does not disclose a reasonable cause of action against Ms Birch as a publisher of the Articles and the proposed pleading of the claim against Mr Birch as a publisher will not be allowed.

The sixth defendant - Mr Hastie

The plaintiff's claim that Mr Hastie was a publisher of the Articles rests on the factual allegations that he provided a copy of the Recording to Mr Hondros and that he participated in the conversations to which I have referred.
For the reasons given in relation to the claim against Mr Birch, Mr Hastie's conversations with Mr Kirkup and Mr Birch are of no moment and provide no support for the plaintiff's claim that Mr Hastie was a publisher.
The allegations that Mr Hastie had several telephone conversations with Mr Hondros in which they discussed the Recording and discussed that it showed that the plaintiff and members of the State Government were involved in corruption and that they agreed that Mr Hondros would publish an article 'based on the Recording' are not sufficient to sustain a claim that Mr Hastie was a publisher. The alleged agreement between Mr Hastie and Mr Hondros that an article 'based on the Recording' would be published cannot be equated with Mr Hastie controlling the publication nor is the alleged agreement capable of constituting an assent by Mr Hastie to the final form of the Articles. The proposed statement of claim does not disclose a reasonable cause of action against Mr Hastie as a publisher of the Articles and the proposed pleading of the claim against Mr Hastie as a publisher will not be allowed.

The seventh defendant - Mr Kirkup

The pleaded case that Mr Kirkup was a publisher is based on the telephone conversations and the alleged agreement between him and Mr Hondros that he offered to provide, and Mr Hondros agreed to receive, the Recording for the purpose of publication of an article based on the Recording. For substantially the same reasons as those given above in relation to the claim against Mr Hastie, the proposed statement of claim does not disclose a reasonable cause of action against Mr Kirkup as a publisher of the Articles and the proposed pleading of the claim against Mr Kirkup as a publisher will not be allowed.

Conclusion and next steps

The cumulative effect of the problems with the proposed statement of claim identified in these reasons is that the application for leave to replead must be dismissed. At least two consequences flow from this result. First, it is unnecessary to consider the defendants' submissions that the plaintiff's proposed case based on the alleged conspiracy to injure by unlawful means should be disallowed on the proportionality grounds.[35] Secondly, the focus must shift from the interlocutory disputes that characterised the progress of this action to date, to proceeding to trial. The plaintiff's relatively straightforward claim for damages for defamation against the first, second and third defendants was commenced on 28 February 2019. The defamation claim should proceed to trial without further delay.
[35] Bleyer v Google Inc [2014] NSWSC 897; (2014) 88 NSWLR 670; Defendants' submissions filed 10 October 2023 [49] ‑ [96].
I will hear the parties as to the orders to be made and costs.

APPENDIX

RE-AMENDED MINUTE OF PROPOSED
RE-AMENDED SUBSTITUTED STATEMENT OF CLAIM

1. The first plaintiff:

1.1 at all material times until 27 February 2019 was the Deputy Chair of the Peel Development Commission (PDC), a statutory authority established under the Regional Development Commission Act 1993 (WA) to co-ordinate and promote the economic and social development of the Peel Region in Western Australia; and

1.2 is and at all material times was a prominent Western Australian businessman through his business interests in and as Chairman of Strzelecki Group, one of Western Australia's biggest tourism and restaurant operators which also conducts a wholesale seafood processing and packaging business; and

1.3 is and at all material times was the sole shareholder and a director of Strzelecki Holdings Pty Ltd (Strzelecki), a company which owns the Dolphin Quay Marina at Mandurah;

1.4 is and at all material times was a director of the second plaintiff, The Village Scarborough Beach Pty Ltd (The Village Scarborough), a wholly-owned subsidiary of Strzelecki; and

1.5 is and at all material times was a beneficiary of the Jay Poland Family Trust; and

1.6 is and at all material times was a director of the third plaintiff, Coventry Village Pty Ltd (Coventry Village) from 2 October 2012 to 2 August 2016.

1A Coventry Village:

1A.1    is and at all material times was held by the first plaintiff;
1A.2    is and at all material times since 2012 was the trustee of the Coventry Square Unit Trust, a unit trust in which:
         1A.2.1     at all material times prior to 9 December 2021, Strzelecki held 63% of   the units and SBSK (Australia) Pty Ltd (ACN 076 301 427) (SBSK)   held 27% of the units; and
1A.2.2     since 9 December 2021, Strzelecki has held 90% of the units.

2 The first defendant (Ms Hedley) ~~is and~~ at all material times was:

2.1      the deputy editor and a journalist of WAtoday, an internet news business conducted by the second defendant;
2.2      the holder of a Twitter account at and publisher of the tweets accessible by the URL, and
2.3      an author of the publications the subject of this action; and

2.4 employed by the second defendant.

4 The third defendant (Mr Hondros):

4.1 is and at all material times was a journalist employed by Fairfax Digital as WAtoday's political reporter;

4.2 is and at all material times was the holder of a Twitter account at and publisher of the tweets accessible by the URL,

4.3 is and at all material times was an author of the publications the subject of this action; and

4.4 in and about 2006 was employed as the Chief of Staff to the (then) Minister for Fisheries, Mr Jonathan Robert Ford;

4.5 between December 2020 and March 2021, was employed as the Chief of Staff to the Hon. Mr Zak Kirkup MLA (see paragraph 4DE below);

4.6 prior to being a journalist for WAtoday, was a journalist for the Mandurah Mail (a masthead owned by Rural Press Pty Ltd which then and until April 2019 was a related body corporate of Fairfax Digital);

4.7 between about March 2021 and a time not presently known to the plaintiffs, was employed as the Senior Media Adviser at the Office of the Minister for the National Disability Insurance Scheme and Government Services, the Hon. Ms Linda Reynolds who during that time was a member of the Liberal Party of Australia.

4BD On ~~about~~ 25 ~~or 26~~ February 2019, Ms Bradley provided a copy of the Recording to Mr Hondros.

4BE Further or in the alternative, on ~~about~~ 25 ~~or 26~~ February 2019, Mr Birch provided a copy of the Recording to Mr Hondros.

4BF Further or in the further alternative, on ~~about~~ 25 ~~or 26~~ February 2019, Mr Hastie provided a copy of the Recording to Mr Hondros.

16A By reason of the matters pleaded in paragraphs 4BD to 4BF, 23 to 31 and the matters identified in particulars (i)(b), (i)(c), (iii) and (iv) herein, the fourth to seventh defendants participated in, and are therefore also liable as publishers of, the First Article and the Second Article.

Tortious conspiracy to injure by unlawful means

Agreement or common design

19 On 11 February 2019, Mr Grainger and Ms Bradley scheduled a meeting for Mr Grainger to meet with Mr Hastie at Mr Hastie's electoral office.

20 The purpose of the meeting was to discuss town planning issues Mr Grainger was having with the Shire of Waroona and in particular the obtaining of a land clearing permit in relation to the Buller Road Land.

21 At approximately 11:30am on 25 February 2019, Mr Grainger, Mrs Grainger, and Mr Grainger's business associates Mr Frank Nannup and Mr George Walley met with Mr Hastie and Ms Bradley at Mr Hastie's electoral offices at Unit 2, 61 Sutton Street, Mandurah for about 1.5 hours and discussed, among other things, the issues Mr Grainger was having with the Shire of Waroona.

22 During the meeting:

22.1 Mr Grainger said he had met with the first plaintiff and discussed Mr Grainger's contaminated soil proposal, and informed Mr Hastie (and others in attendance) that he had recorded that meeting;

22.2 Mr Hastie requested that Mr Grainger send him a copy of the Recording;

22.3 Mr Grainger said he would do so on the basis that the Recording would not be disclosed without Mr Grainger's consent and Mr Hastie agreed;

22.4 Mr Hastie asked Mr Grainger to send a copy to Ms Bradley's personal email address (as opposed to Ms Bradley's office email address) which Mr Hastie provided to Mr Grainger; and

22.5 at approximately 12:35pm, Mr Grainger sent a copy of the Recording by email to Ms Bradley using her personal email address.

23 Following the meeting, at approximately 12:45pm on 25 February 2019, on instruction from Mr Hastie, Ms Bradley sent a copy of the Recording by email to Mr Birch.

Particulars of instruction

The instruction was verbally given by Mr Hastie to Ms Bradley between about 12:35pm and 12:45pm on 25 February 2019.

24 Mr Hastie instructed Ms Bradley to do so, and Ms Bradley did so, for the purpose of the Recording being provided to the media for publication of an article based upon the Recording to the effect that the first plaintiff was corrupt.

Particulars of purpose

Mr Hastie's and Ms Bradley's purpose may be inferred from:

(i) Mr Hastie providing Ms Bradley's personal email address to Mr Grainger, which Ms Bradley knew about but to which she did not object nor query;

(ii) Mr Birch being Mr Hastie's media adviser;

(iii) the Recording being sent to Mr Birch's personal email address;

(iv) the subsequent provision of the Recording to the Mr Hondros as pleaded in at paragraphs 4BD to 4BF herein; and

(v) the subsequent telephone calls between the defendants pleaded in paragraphs 25 to 29 and 31 and particulars to (i)(b), (iii), (iv), (v)(b) and (vi)(b) to paragraph 33 below.

Further particulars may be provided after discovery and inspection, the provision of expert evidence and in any event prior to trial.

25 At approximately 1:39pm on 25 February 2019, Mr Hastie telephoned Mr Kirkup for approximately 3 minutes and 42 seconds, during which:

25.1 Mr Hastie informed Mr Kirkup of the Recording and that it was a recording of a meeting between first plaintiff and Mr Grainger and that it showed that the first plaintiff and members of the State Government were involved in corruption; and

25.2 Mr Hastie and Mr Kirkup discussed providing and agreed that Mr Hastie would provide the Recording to the media for publication of an article based upon the Recording.

26 At approximately 1:47pm on 25 February 2019, Mr Kirkup telephoned Ms Caitlyn Rintoul, a journalist for the Mandurah Mail, for approximately 7 minutes and 26 seconds, during which call they discussed the Recording.

27 At approximately 3:26pm on 25 February 2019, Mr Kirkup telephoned Mr Hastie for approximately 9 minutes and 2 seconds, during which call they discussed that Mr Kirkup had spoken to Ms Rintoul about providing the Recording to the media for publication of an article based upon the Recording.

28 At approximately 3:38pm on 25 February 2019, Mr Kirkup telephoned Mr Hondros, for approximately 12 minutes and 39 seconds, during which:

28.1 Mr Kirkup informed Mr Hondros of the Recording, that it was a recording of a meeting between the first plaintiff and Mr Grainger and that it showed that the first plaintiff and members of the State Government were involved in corruption;

28.2 Mr Kirkup informed Mr Hondros that Mr Hastie had the Recording and a copy would be sent to Mr Hondros; and

28.3 Mr Kirkup offered to provide and Mr Hondros agreed to receive the Recording for the purpose of publication of a media article based upon the Recording.

29 At approximately 3.51pm on 25 February 2019, Mr Hondros called Mr Hastie for approximately 3 minutes and 21 seconds, during which call:

29.1 Mr Hastie and Mr Hondros discussed the substance of the Recording and that it was of a meeting between the first plaintiff and Mr Grainger and that it showed that the first plaintiff and members of the State Government were involved in corruption; and

29.2 Mr Hastie and Mr Hondros discussed and agreed that Mr Hondros would publish an article based upon the Recording.

30 At approximately 3:56pm on 25 February 2019, Mr Hondros received the Recording via WhatsApp.

31 At approximately 4:43pm on 25 February 2019 for approximately 3 minutes and 45 seconds, and at approximately 5:00pm on 25 February 2019 for approximately 1 minute and 27 seconds, Mr Hondros telephoned Ms Hedley, during which calls Mr Hondros and Ms Hedley discussed and agreed that Mr Hondros and Ms Hedley would write and publish an article based upon the Recording.

32 By reason of the matters pleaded in paragraphs 2, 4 and 19 to 31 above, the defendants formed an agreement alternatively had a common design to publish a media article based on the Recording (Conspiracy).

Action in pursuit of the Conspiracy

33 The defendants and each of them took steps in furtherance of the Conspiracy.

Particulars of steps taken in furtherance of the Conspiracy

(i) Mr Hastie:

(a) took the steps pleaded in paragraphs 22.4, 23, 25, 27, 29 and 4BF above;

(b) participated in the telephone calls with other defendants identified at items 1, 2, 3, 4, 6, 7, 11, 13, 14, 16, 18, 20, 21, 23, 25, 26 and 28 of Annexure A during which the relevant defendants generally discussed publication of a media article to the effect that the first plaintiff was corrupt; and

(c) spoke to Mr Grainger in the telephone calls identified at items 17, 20, 21 and 29 of Annexure A during which Mr Hastie sought to allay Mr Grainger's concerns about the Recording having been provided to Mr Hondros and the potential for articles to be published naming Mr Grainger.

(ii) Ms Bradley took the steps pleaded in paragraphs 23, 24 and 4BD above.

(iii) Mr Birch took the steps pleaded in paragraph 4BE above and participated in the telephone calls with other defendants identified at items 5, 6, 9, 11, 14, 16 and 22 of Annexure A during which the relevant defendants generally discussed publication of an article to the effect that the first plaintiff was corrupt.

(iv) Mr Kirkup took the steps pleaded in paragraphs 25 to 28 above and participated in the telephone calls with other defendants identified at items 1, 2, 5, 8, 9, 10, 12, 19, 22, 23, 24, 25, 26 and 27 of Annexure A during which the relevant defendants generally discussed publication of an article to the effect that the first plaintiff was corrupt.

(v) Mr Hondros:

(a) took the steps pleaded in paragraphs 5 to 7, 11 to 13, 28, 29 and 31 above;

(b) participated in the telephone calls with other defendants identified at items 3, 4, 7, 8, 12, 13, 15, 18, 19, 24, 27 and 28 of Annexure A during which the relevant defendants generally discussed publication of a media article to the effect that the first plaintiff was corrupt;

(c) together with Ms Hedley, spoke to Mr Grainger about the Recording prior to publication of the First Article and the Second Article; and

(d) drafted and assisted Ms Hedley in the preparation of the First Article and the Second Article.

(vi) Ms Hedley:

(a) took the steps pleaded in paragraphs 5 to 7, 11 to 13 and 31 above;

(b) participated in the telephone call with Mr Kirkup identified at item 10 of Annexure A during which Ms Hedley and Mr Hondros generally discussed publication of an article to the effect that the first plaintiff was corrupt;

(c) together with Mr Hondros, spoke to Mr Grainger about the Recording prior to publication of the First Article and the Second Article;

(d) edited Mr Hondros' draft of the First Article and the Second Article;

(e) on 27 February 2019, sent emails to Ms Andrea Kelly and to Ms Kylie Wilson by emails sent on 27 February 2019 at approximately 8.59am and 9.02am, respectively; and

(f) sought and obtained advice from Ms Larina Alick, Editorial Counsel for the Nine Entertainment Group of companies (Nine), which includes Fairfax Digital:

1. by emails sent at approximately 9:32am and 4:30pm on 27 February 2019 and at approximately 12:35pm and 3:51pm on 28 February 2019; and

2. by calls to Ms Alick at approximately 10:09am, 11:46am, 3:33pm and 4:34pm,

by which Ms Hedley sought and obtained Ms Alick's advice in respect of the First Article and the Second Article.

(vii) in respect of Fairfax Digital:

(a) it took the steps pleaded in paragraphs 5 to 7 and 11 to 13 above;

(b) by reason of their positions and employment with Fairfax Digital, the steps taken by Mr Hondros and Ms Hedley were steps taken by Fairfax Digital; and

(c) Ms Fran Rimrod, the Editor of WAtoday had editorial control over the First Article and the Second Article and made the decision to publish them and caused amendments to be made to the First Article about 2 hours after it was published.

Further particulars may be provided after discovery and inspection, the issue of subpoenas and in any event prior to trial.

Intention to injure

34 The purpose of the Conspiracy on the part of each of the defendants was to cause harm to the plaintiffs.

Particulars of intention

The defendants' intention may be inferred from:

(i) The publication by the defendants of the First Article which, in its natural and ordinary meaning, gives rise to the defamatory imputations set out at paragraph 9 above.

(ii) The publication by the defendants of the Second Article which, in its natural and ordinary meaning, gives rise to the defamatory imputations set out at paragraph 15 above.

(iii) The manner in which the First Article and Second Article were written in that ~~they~~:

(a) they were sensational in their terms;

(b) they were critical of the first plaintiff;

(c) they were structured to prominently disclose the allegations against the first plaintiff in the headline and opening paragraphs of the First Article and the Second Article with the first plaintiff's response given less prominence;

(d) they were factually incorrect and misleading in particular in that the headline and first paragraph of the First Article suggested the first plaintiff was seeking to dump toxic soil;

(e) they failed to adequately disclose the first plaintiff's response; ~~and~~

(f) they were damaging of the first plaintiff and of the Australian Labor Party which formed the incumbent State Government and were thereby politically favourable to Mr Hastie and to Mr Kirkup; and

(g) the Second Article made direct reference to the first plaintiff's business interests and his role as Chairman of the Strzelecki Group of companies.

(iv) The first to third defendants' publication of the First Article despite being on notice by the First Letter that publication of the First Article would breach the SD Act.

(v) The first to third defendants' publication of the Second Article despite being on notice by the First Letter and the Second Letter that publication of the Second Article would breach the SD Act.

(vi) The first to third defendants' publication of the Third Article despite being on notice by the First Letter, the Second Letter and the Third Letter that publication of the Third Article would breach the SD Act.

(vii) The first to third defendants continuing to make available for download the First Article and the Second Article despite being on notice that publication of them breached and continues to breach the SD Act.

(viii) The defendants' aggravating conduct set out in paragraph 17 above.

(ix) The admissions at paragraph 17 of the first to third defendants' Amended Defence filed 1 August 2019.

(x) The fact that Mr Hastie provided Ms Bradley's personal email address to Mr Grainger at the meeting described in paragraph 22 above when Mr Grainger already had Ms Bradley's office address.

(xi) The fact that Ms Bradley sent the Recording to Mr Birch's personal email address and not his office address.

(xii) Despite the commitment Mr Hastie gave to Mr Grainger in the presence of Ms Bradley during the meeting described in paragraph 22 above:

(a) Mr Hastie immediately instructed Ms Bradley to send the Recording to Mr Birch and Ms Bradley did so, as pleaded in paragraph 23 above;

(b) within less than 4 hours of the meeting, Mr Hastie provided, or caused Ms Bradley or Mr Birch to provide and they provided, the Recording to Mr Hondros.

(xiii) The fact Mr Kirkup and Mr Hastie informed Mr Hondros of the matters described in paragraphs 28.1 and 29.1 above, respectively, without having spoken to the first plaintiff and without having sought his nor the PDC's explanation for what they told Mr Hondros the first plaintiff had done.

(xiv) Mr Hondros' and Ms Hedley's call with Mr Grainger on 27 February 2019 during which:

(a) Mr Hondros, despite not yet having spoken to any person at the meeting pleaded in paragraph 4N above, immediately informed Mr Grainger that the first plaintiff was the subject of the story he and Ms Hedley were working on, which was in fact the case;

(b) Mr Hondros sought Mr Grainger's confirmation that everything that was said in the Recording was said by the first plaintiff, which Mr Grainger did not confirm;

1. they wanted to write a story that the first plaintiff on behalf of the government was trying to do dodgy political deals and dump sand in Waroona; and

2. Mr Hondros considered the first plaintiff's conduct was 'unbelieveable', before having sought Mr Grainger's version of events or having received a response from the first plaintiff;

(d) in order to secure Mr Grainger's assistance and without Mr Grainger requesting it, Mr Hondros and Ms Hedley sought to assure Mr Grainger that they would not name him in the story they were preparing and were not interested in doing so, which was in fact the case; and

(e) Mr Grainger informed Mr Hondros and Ms Hedley that the Corruption and Crime Commission had received a copy of the Recording and determined there was nothing to investigate.

(xv) Ms Hedley's email to Ms Larina Alick, Editorial Counsel for the Nine Entertainment Group of companies (Nine), which includes Fairfax Digital, sent on 27 February 2019 in which Ms Hedley:

(a) described the Recording as 'very incriminating for a few people in the state government', prior to having sought any response from the first plaintiff, Mr Grainger or anyone else; and

(b) sought Ms Alick's advice about how Mr Hondros and Ms Hedley could question persons involved in the Recording and whether they could use the Recording.

(xvi) Ms Hedley's emails to Ms Kelly and to Ms Wilson each dated 27 February 2019 in respect of the first plaintiff and matters the subject of the First Article which were accusatorial in their tone and sent prior to speaking to or receiving any response from Ms Alick.

(xvii) The number and timing of communications between the defendants between 25 and 28 February 2019, the best particulars of which the first plaintiff can give are as pleaded above and set out at Annexure A, during which the relevant defendants generally discussed publication of an article to the effect that the first plaintiff was corrupt.

(xviii) The proximity of the communications to the publication of the First Article and the Second Article.

(xix) Mr Hastie and Mr Kirkup viewed the first plaintiff as a political opponent including because of the following matters, each of which matters was known to the fourth to seventh defendants:

(a) in about August 2016, the first plaintiff together with 3 other businessmen who were all regular significant donors to the Liberal Party who sought the resignation of Mr Barnett as Liberal Party leader, commissioned ReachTEL to conduct a poll of 11 marginal seats in WA, which poll disclosed that at the forthcoming WA State Election which was ultimately held in March 2017:

1. if Mr Barnett remained the Liberal Party leader, the Liberal Party would lose 10 of the 11 marginal seats; and.

2. if Mr Barnett stepped down as the Liberal Party leader, the Liberal Party would win 10 of the 11 marginal seats;

(b) in about September and October 2017:

1. the City of Mandurah mayoral election took place;

2. Ms Linda Christie, on behalf of Friends of Marina, donated $19,311 for radio advertising and signage to the campaign of the incumbent Mayor, Ms Marina Vergone;

3. Ms Christie was also collecting donations on behalf of Mr Hastie and was the campaign fundraising treasurer for Mr Kirkup;

4. the first plaintiff donated $3,580 to the City of Mandurah mayoral election campaign of Mr Rhys Williams, who was a member of WA Labor; and

5. at the election held on 21 October 2017, Mr Williams was elected Mayor.

(c) in 2018 and 2019, the first plaintiff had supported and was supporting the election campaign of Ms Mellisa Teede, a political opponent of Mr Hastie, in that:

1. on 3 February 2018, Ms Teede, who between 2012 and 2015 was the Chief Executive Officer of the PDC, was pre-selected as the Australian Labor Party candidate for the Federal Division of Canning for the Federal Election that was ultimately held on 18 May 2019.

2. on about 26 July 2018, Strzelecki made a political donation of $20,000 to the election campaign of Ms Teede.

3. on 9 August 2018, Oceanic Bar and Grill (a restaurant operated by JDP Tourism Investments Pty Ltd, a company owned by the first plaintiff's son, Mr Jay Poland at the Dolphin Quay Marina) held a function in support of Ms Teede's election campaign which was attended, among others, by Mr Anthony Albanese (who was then a senior figure in the Australian Labor Party, a Federal Member of Parliament, the Shadow Minister for Infrastructure and Transport and the Shadow Minister for Tourism) and Ms Paddi Creevey (who was then the Chair of the PDC).

5. in about February 2019, the first plaintiff through Strzelecki proposed to provide Ms Teede with vacant office space at Dolphin Quay Marina to use as her election campaign office and gave permission for advertisements in support of Ms Teede's election campaign to be published in and around the boardwalk of the Dolphin Quay Marina.

6. on 25 February 2019, Mr Albanese, the Hon. Mr David Templeman MLA (Member for the State Division of Mandurah) and the Hon. Ms Robyn Clarke (Member for the State Division of Murray-Wellington) were in Mandurah to support Ms Teede's election campaign and promoting the announcement of $32 million funding to build a multi-storey carpark at the Mandurah Train Station if Ms Teede was elected for the Federal Division of Canning at the 2019 Federal Election

(xx) The matters pleaded in paragraphs 4.5 and 4.7 above.

(xxi) The fourth to seventh defendants were sources for the first to third defendants in respect of the First Article and the Second Article.

(xxii) Mr Hastie's statements to Mr Grainger during a telephone call on or about 27 February 2019, to the effect that Mr Hastie had provided the Recording to journalists without Mr Grainger's prior consent because Mr Hastie considered it was in the 'public interest' to do so.

Further particulars may be provided following discovery and inspection, the administering of interrogatories, the issue of subpoenas and in any event prior to trial.

Unlawful means

35 The means by which the defendants carried out the Conspiracy to cause harm to the plaintiffs, namely:

35.1 the communication of a copy of the Recording to Mr Hondros as pleaded in paragraphs 4BD to 4BF above;

35.2 Ms Hedley communicating the substance of parts of the Recording to Ms Andrea Kelly and to Ms Kylie Wilson by emails sent on 27 February 2019 at approximately 8.59am and 9.02am, respectively; and

35.3 the publication of each of the First Article and the Second Article each of which contained material obtained from the Recording, was unlawful.

Damages

36 By reason of the defendants' conduct as pleaded herein, including the publication of the First Article and the Second Article, the first plaintiff has suffered loss and damage.

Particulars of loss and damage

Court fees

(i) The first Plaintiff incurred the costs and fees of lodging the Writ of Summons in the within matter which Writ was thereafter accepted by this Honourable Court and duly issued.

FOI legal expenses

(ii) Since publication of the First Article and the Second Article, the first plaintiff has been required to respond, and has incurred legal expenses incurred in considering and responding, to freedom of information requests relating to the subject matter of the First Article and the Second Article made:

(a) to the Peel Development Commission by:

(1) Andrew Gaspar, Chief of Staff to Mike Nahan, Leader of the Opposition in WA;

(2) Dr Steve Thomas, Member of the Legislative Council in WA and a member of the Liberal Party of Australia; and

(3) Terry Redman, Member of the Legislative Assembly in WA a member of the National Party; and

(b) to the Office of the Honourable Stephen Dawson MLC by Mr Aaron Grainger.

Scarborough Project

(iii) On or about 3 May 2017, Development WA called for Expressions of Interest Submissions for a single stage competitive bid process to undertake a premium retail and commercial coastal development of the North and South sites of the Scarborough Beachfront (Scarborough Project).

(iv) On or about 13 July 2017, the first plaintiff through The Village Scarborough submitted a Response to EOI Submission to Development WA in respect of the Scarborough Project.

(v) On or about 23 January 2018, Development WA informed Strzelecki that it was the preferred proponent for the Scarborough Project.

(vi) At the time of the First Article and the Second Article, The Village Scarborough remained the preferred proponent for the Scarborough Project and was in the process of negotiating a terms sheet and a ground lease for the Scarborough Project.

(vii) By reason of the publication of the First Article and the Second Article, Development WA, the Minister for Lands and their representatives and staff ceased engaging with the first plaintiff and The Village Scarborough's other representatives in respect of the Scarborough Project and did not honour the terms of The Village Scarborough's Response to EOI Submission.

(viii) The first plaintiff thereby lost the opportunity for The Village Scarborough to further the Scarborough Project which was worth up to an estimated $40 million.

Coventry Village

(ix) Since about 2012, Coventry Village has operated the Coventry Village shopping centre in Morley, Western Australia.

(x) In or around 2010, SBSK provided the then-trustee for the Coventry Square Unit Trust with a loan in the amount of $2,793,992.39 which, for the purpose of providing ongoing business relations, was interest free.

(xi) By reason of the publication of the First Article and the Second Article, SBSK demanded that the first plaintiff arrange for the:

(a) purchase of SBSK's ~~shares in Coventry Village and the~~ units in the Coventry Square Unit Trust; and

(b) repayment of the loans SBSK made to Coventry Village; and

(xii) In the circumstances, the first plaintiff was compelled to accede and did accede to the demand by causing Strzelecki to purchase SBSK's units in the Coventry Square Unit Trust and causing Coventry Village to repay the loans from SBSK with the interest demanded.

(xiii) By Coventry Village having to pay interest on the loans, the first plaintiff lost the sum of $2,176,293.10 alternatively the first plaintiff suffered a diminution in the value of the share he held in Coventry Village.

Other projects

(xiv) Prior to the publication of the First Article and the Second Article, the first plaintiff was able to and did secure meetings with various Ministers of the State Government and senior representatives of State Government departments to discuss business projects or governmental policy.

(xv) By reason of the publication of the First Article and the Second Article, such Ministers and senior representatives will no longer meet with the first plaintiff.

(xvi) The first plaintiff has lost the opportunity to successfully tender for other development projects, namely projects at Gage Roads Fremantle and the Old Technical College Fremantle.

(xvii) By reason of the Publications, Strzelecki has engaged government relations consultants in order to assist it and its related entities in dealing with Government Ministers, departments and representatives and has to date incurred in excess of $300,000 in such expenses.

Further particulars may be provided after discovery and inspection, the provision of expert evidence and in any event prior to trial.

37 Further and in the alternative, by reason of the defendants' conduct as pleaded herein, including the publication of the First Article and the Second Article, the second plaintiff has suffered loss and damage.

Particulars of loss and damage

The second plaintiff repeats and relies upon particulars (iii) to (viii) of paragraph 36 above.

Thereby, the second plaintiff lost the opportunity to further the Scarborough Project which was worth up to an estimated $40 million.

38 Further and in the alternative, by reason of the defendants' conduct as pleaded herein, including the publication of the First Article and the Second Article, the third plaintiff has suffered loss and damage.

Particulars of loss and damage

The third plaintiff repeats and relies upon particulars (ix) to (xiii) of paragraph 36 above.

Thereby, by the third plaintiff having to pay interest on the loans it lost the sum of $2,176,293.10.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MH
Associate to the Honourable Justice Tottle
13 MAY 2024

CaseChat Overview and Summary

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