Saraceni v Mentha
[2013] WASC 95
•26 MARCH 2013
SARACENI -v- MENTHA [2013] WASC 95
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 95 | |
| Case No: | CIV:2734/2012 | 12 FEBRUARY 2013 | |
| Coram: | KENNETH MARTIN J | 26/03/13 | |
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Two plaintiff imputations disallowed. Leave to replead | ||
| B | |||
| PDF Version |
| Parties: | LUKE SARACENI MARK MENTHA SCOTT LANGDON KORDAMENTHA PTY LTD |
Catchwords: | Defamation strike out attacks on the plaintiff's imputations Justification pleaded Alternative imputations Imputation as passive imputation as to 'lied' Statutory defence of honest opinion Leave to replead |
Legislation: | Defamation Act 2005 (WA), s 25, s 31(1), s 31(5) |
Case References: | Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60 Gumina v Williams [No 1] (1990) 3 WAR 342 Heytsbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 Jones v Skelton [1963] 1 WLR 1362 Monte v Mirror Newspapers [1979] 2 NSWLR 663 West Australian Newspapers Ltd v Elliott [2008] WASCA 172 Wong v Aripin [2011] WASC 174 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MARK MENTHA
First defendant
SCOTT LANGDON
Second defendant
KORDAMENTHA PTY LTD
Third defendant
Catchwords:
Defamation strike out attacks on the plaintiff's imputations - Justification pleaded - Alternative imputations - Imputation as passive imputation as to 'lied' - Statutory defence of honest opinion - Leave to replead
Legislation:
Defamation Act 2005 (WA), s 25, s 31(1), s 31(5)
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Result:
Two plaintiff imputations disallowed.
Leave to replead
Category: B
Representation:
Counsel:
Plaintiff : Mr M L Bennett & Ms J Di Lena
First defendant : Mr S A O'Meara SC & Ms K Banks-Smith
Second defendant : Mr S A O'Meara SC & Ms K Banks-Smith
Third defendant : Mr S A O'Meara SC & Ms K Banks-Smith
Solicitors:
Plaintiff : Bennett + Co
First defendant : Norton Rose Australia
Second defendant : Norton Rose Australia
Third defendant : Norton Rose Australia
Case(s) referred to in judgment(s):
Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60
Gumina v Williams [No 1] (1990) 3 WAR 342
Heytsbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440
Jones v Skelton [1963] 1 WLR 1362
Monte v Mirror Newspapers [1979] 2 NSWLR 663
West Australian Newspapers Ltd v Elliott [2008] WASCA 172
Wong v Aripin [2011] WASC 174
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1 KENNETH MARTIN J: The plaintiff applies to strike out various paragraphs in the amended defence of the defendants (dated 30 December 2012), put in defence against plaintiff's defamatory imputations. The plaintiff says that these various paragraphs fail to disclose a reasonably arguable defence, or alternatively, that the paragraphs are embarrassing. Relevantly, I am concerned with the defendants' defences of justification, asserted truth of certain alternate imputations (Polly Peck defences) and a statutory defence of honest opinion, invoking s 31(1) of the Defamation Act 2005 (WA).
2 A significant component of the challenges raised against the defendants justification defence focuses upon the terminology 'joint financiers', deployed in two (of three) alleged defamatory publications mentioned in the plaintiff's statement of claim.
3 The first publication complained of concerns words spoken to only one person, namely from the first defendant to the second defendant on 4 July 2012 (par 6 of the statement of claim). This 'in-house' conversation is defined as the 'Utterance'.
4 The second publication complained of is a Media Release, also of 4 July 2012 (set out in full at par 11 of the statement of claim).
5 In short, the plaintiff contends that what are raised as particulars of justification do not properly engage against the plaintiff's imputations seen at pars 7.1, 7.2, 13.1 and 13.2 of the statement of claim. This, it is put, is because the plaintiff has deliberately framed its imputations upon different 'joint financiers' (namely joint financiers of a Vasse Newtown project).
6 It is contended the particulars of justification relied on by the defendants (seen under par 7A and par 13A of the amended defence) are wholly misconceived. This is because they only seek to adduce facts with a view to proving that wholly irrelevant 'joint financiers' (namely joint financiers to the Raine Square project, Bankwest) were either lied to by the plaintiff, or deliberately misled by him.
7 The plaintiff raises other challenges against par 7A, 7B and 7C (and counterpart pleas for the Media Release, in the amended defence at pars 13A, 13B and 13C). However, the conceptual attack against the relevance of the defendants particulars of justification is the fundamental issue. The plaintiff is suggesting the defendants' particulars fail to engage as regards the correct 'joint financiers'. This suggestion carries 'knock-on' consequences towards the appropriateness of other aspects of the parties'
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- ensuing pleadings. Indeed, in my assessment, for a trial to be sensibly run, this suggested pivotal distinction as between different 'joint financers', must be grappled with at the outset.
8 The strike out challenge by the plaintiff against the particulars of justification caused the defendants to focus their attention back to the plaintiff's imputations at par 7 and par 13 of the statement of claim and to challenge them as flawed. These imputations are framed as arising from the natural and ordinary meanings of the Utterance and the Media Release.
9 The defendants, strictly speaking, are out of time to raise any strike out challenges against the plaintiff. Previously, I made timetabling directions only for a hearing of the plaintiff's attack on the defendants' pleading. Preparations for the application, however, have seen the defendants move to seek leave, out of time, to challenge two out of the three imputations asserted by the plaintiff, under its par 7.1 and par 7.2, and the identical counterpart imputations as regards the Media Release, at par 13.1 and par 13.2. The late pleading challenge from the defendants is directly tied (from the defendants perspective) to the central issue of identifying a true entity or entities who are the 'joint financiers' referred to in the Utterance and the Media Release.
10 Since I assess the 'joint financiers' identification issue to be fundamental and necessarily bound up in both sides arguments over the inadequacy of the justification defence, I do assess it as appropriate, to grant leave to hear and determine, out of time, the defendants strike out challenges now put against the plaintiff's imputations at pars 7.1, 7.2, 13.1 and 13.2 of the statement of claim.
11 I am driven to grant that leave, as I assess the 'joint financiers' issue as having a great potential to send a trial well and truly 'off the tracks', in circumstances where there is also potential for a defamation trial to be argued before a civil jury. Accordingly, it is important for there to be clarity over this issue from the outset.
12 Allied to the above is that I discern some prima facie merit in the underlining deficiency arguments now contended for by the defendants as regards the plaintiff's two imputations.
13 For convenience, I will set out the text of the Utterance. It is found at par 6 of the statement of claim. It is said to have been published (spoken) by Mr Mentha just to Mr Langdon (both being partners in the
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- insolvency firm, Kordamentha Pty Ltd) on 4 July 2012 (see par 6(a) and (b) of the defence).
14 The defendants point out there should be some corrections to the plaintiff's recitation of the text of the Utterance. There being no controversy over these adjustments, I incorporate them.
15 Accordingly, par 6 of the statement of claim should read:
On or about 4 July 2012 the first defendant published to the second defendant the following words of and concerning the plaintiff (Utterance):
'Mr Saraceni made written and oral representations to the joint financiers in relation to the Vasse Newton [Newtown] project which the joint financiers claim were false and misleading. The joint financiers are confident that the evidence supports their claims.
Mr Saraceni raised over $7 million from a sale to the syndicate of investors for an interest in the then stalled Vasse Newtown project. Despite telling the joint financiers the net proceeds of the sale of Seaport's interests in Vasse Newtown would be applied to reducing the Raine Square debt, this money was never applied to the Raine Square debt and the application of the monies received from the syndicate of investors continues to be unaccounted. (corrections underlined)
16 At the particulars to par 6 it is said that this publication, by the words spoken from Mr Mentha to Mr Langdon on 4 July 2012 and made of and concerning Mr Saraceni, 'is to be inferred from the matters referred in par 11 hereof'.
17 By the amended defence, it is said Mr Mentha was geographically located in the Melbourne office of Kordamentha, and not the Perth office as alleged (see par 2 of the defence). Mr Langdon was located in the Perth office of Kordamentha, not the Melbourne office as was alleged.
18 The statement of claim contends Mr Mentha was appointed, along with a Mr Cliff Rocke, 'as joint and several receivers and managers of Westgem pursuant to a fixed and floating charge of BOSI Security Limited' (see par 2.3, admitted by par 2 of the defence). Westgem is said to be a corporation in respect of which Mr Saraceni is sole director and shareholder (see par 1.2 of the statement of claim). Westgem was responsible for 'the construction of Raine Square being a 44,000 square metre office and 13,000 square metre retail project in the heart of Perth's Central Business District' (see par 1.2 of the statement of claim).
19 It is necessary to set out par 10 and par 11 of the statement of claim:
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- 10. As a consequence of the Utterance, the Second Defendant wrote or caused to be written a document headed 'Media Release' and entitled 'Raine Square financiers sue Sacareni' which was of and concerning the Plaintiff and which was published by the Second and Third Defendants on or about 4 July 2012 to various media outlets as pleaded in paragraph 12 hereto (Media Release).
11. The Media Release was in the following terms:
4 July 2012
Media Release
Raine Square financiers sue Sacareni
The joint financiers of the Raine Square development have issued a writ in the Supreme Court of Western Australia alleging misleading or deceptive conduct by Luke Saraceni and one of his companies.
The writ relates to the Vasse Newtown project. The project was formerly owned by Seaport Pty Ltd of which Mr Saraceni is the sole shareholder and director.
The misleading and deceptive conduct suit relates to representations made by Mr Saraceni to the joint financiers in 2010 in circumstances where there was a sale of an interest in the Vasse Newtown project by way of an option to a syndicate of investors.
The writ, filed on 3 July and served on 4 July 2012, says when seeking additional funding from the joint financiers to permit completion of the Raine Square project, Mr Saraceni told the joint financiers that proceeds from the sale of Seaports interests in the Vasse Newtown project would be applied to reduced the debt owed to the joint financiers. However, contrary to this representation, the money was never applied to reduce the debt and Mr Saraceni has never accounted for where the money went. The conduct is claimed to be misleading or deceptive and in direct contravention of contractual representations and warranties given by Mr Saraceni and his related company in connection with the joint financiers' provision of the additional funding sought.
Mark Mentha, of Kordamentha, receiver of the Raine Square development and the receiver of the Seaport's, shareholding, said:
Mr Saraceni made oral representations to the joint financiers in relation to the Vasse Newtown
- project which the joint financiers claim were false and misleading. The joint financiers are confident that the evidence supports their claims.
- Mr Saraceni raised over $7 million from a sale to the syndicate of investors for an interest in the then stalled Vasse Newton project. Despite telling the joint financiers the net proceeds of the sale of Seaport's interest in Vasse Newton would be applied to reducing the Raine Square debt, this money was never applied to the Raine Square debt and the application of the moneys received from the syndicate of investors continues to be unaccounted.
- Media inquiries
• Scott Langdon - ((08)9220 9335 or 0407 233 099)
20 The asserted defamatory imputations concerning Mr Saraceni allegedly arising out of the Utterance and the Media Release, are identical. They are respectively pleaded at par 7 and par 13 of the statement of claim, on their asserted natural and ordinary meanings.
21 Each publication is said to give rise to adverse meanings concerning Mr Saraceni, that he:
(7.1 and 13.1) lied to the joint financiers of the Vasse Newton [Newtown] Project;
(7.2 and 13.2) deliberately misled the joint financiers of the Vasse Newton [Newtown] Project; and
(7.3 and 13.3) misappropriated $7 million, being the net proceeds of the sale of part of Seaport's interest in Vasse Newtown.
22 The key issue underlying the plaintiff's attack on the defendants' particulars of justification (concerning pars 7.1, 7.2, 13.1 and 13.2) is that for the imputations which are formulated as to Mr Saraceni having 'lied' or 'deliberately misled', that they are clearly tied to 'the joint financiers of the Vasse Newtown Project'. Hence, it is put, the particulars of justification are framed around the wrong financiers.
23 The plaintiff says that the defendants' particulars of attempted justification, only address a plea of truth as to Mr Saraceni having 'lied' or 'deliberately misled' some very different 'joint financiers' (namely joint
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- financiers of Raine Square). This says the plaintiff will not even arguably respond by way of justification to their imputations.
24 The defendants seek to uphold their particulars of justification as appropriate, but also launch their late strike out application against the plaintiff's imputations on the basis that they are untenable whilst framed as being tied, as they are, to (unascertainable) 'joint financiers of a Vasse Newtown Project'.
25 The fundamental issue in dispute demands resolution at the outset. Depending upon its resolution, correlative consequences will follow, bearing on other aspects of the pleadings.
'Joint financiers of a Vasse Newtown Project'
26 Shortly put, I am of the view Mr Saraceni's imputations as presently seen at pars 7.1, 7.2, 13.1 and 13.2, and said to arise from the Utterance and the Media Release, tied to joint financiers of a Vasse Newton Project, are untenable. I assess them to carry serious potential to send a trial off course in a needless pursuit of a complete 'red herring', over non-identifiable joint financiers to a Vasse Newtown project, as the arguments presented in this challenge to the particulars of justification demonstrated.
27 It is clear, beyond argument, from the text of the second publication at issue, the Media Release, that its references to 'joint financiers' can only sensibly be read as referring to joint financiers of the Raine Square development. The first line of the Media Release clearly says Raine Square financiers are the persons who issued proceedings in this Court against Mr Saraceni for alleged misleading and deceptive conduct.
28 The ensuing further nine references to 'joint financiers' in the balance of the text of the Media Release must also be read as referring only to the joint financiers of Raine Square.
29 Accordingly, imputations 13.1 and 13.2 are untenable, as presently formulated.
30 But bearing in mind how this matter was argued, I would be prepared to allow, as arguable, amended imputations, if the plaintiff saw fit to move them, to the effect Mr Saraceni: '13.1 lied to joint financiers of Raine Square; and 13.2 deliberately misled joint financiers of Raine Square'.
31 Unsurprisingly, the Media Release was the communication that was published to media organisations (as identified in par 12 of the statement
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- of claim). Its publication is said (by par 14) to have allegedly caused the injury to Mr Saraceni's reputation.
32 The impact of the Media Release stands in some contrast to the (earlier) Utterance, being simply words spoken by Mr Mentha only to his Perth insolvency firm partner, Mr Langdon. This in-house verbal communication was the precursor to work that generated the Media Release.
33 Assessing the Utterance alone, it will be seen, effectively, as the same text as the words found in the quotation marks from the penultimate and final paragraphs of the Media Release, as attributed to Mr Mentha. The words of the Utterance can also be seen to lack the preface of the Media Release, by the absence of the penultimate paragraph, namely 'Mark Mentha of Kordamentha, receiver of the Raine Square development and receiver of the Seaport's holding, said … '
34 A deal of attention in the argument was directed, by the plaintiff's counsel, to the first sentence of the Utterance. This was on the asserted basis that, by its natural and ordinary meaning, it was arguably capable of sustaining imputations 7.1 and 7.2, tied as they are to 'Vasse Newton [Newtown] Project'. Accordingly, it was argued the Utterance imputations, at least, must be allowed to stand, as they were not manifestly groundless or untenable, adopting the terminology from Monte v Mirror Newspapers [1979] 2 NSWLR 663 and Gumina v Williams [No 1] (1990) 3 WAR 342 (Commissioner Pullin, as his Honour then was). See also, my reasons in Wong v Aripin [2011] WASC 174, [12].
35 For Mr Sacareni, Mr Bennett also pointed out, and I fully accept, that the Utterance must be evaluated alone and in that exercise, the subsequent Media Release should be ignored.
36 Even then, however, asserted imputations from the Utterance tied to joint financiers of a Vasse Newtown Project make no sense and in my view are untenable. The text of the second paragraph of the Utterance simply cannot be sensibly reconciled with an existence or participation of so called 'joint financiers of a Vasse Newtown Project'.
37 The second paragraph of the Utterance mentions Raine Square debt and money not being applied to that debt from the net proceeds of the sale of Seaport's interests in Vasse Newtown. There is also reference to a sale to and moneys received from a 'syndicate of investors'. I assess the syndicate to be different to 'joint financiers of Vasse Newtown'.
(Page 10)
38 A way of testing the viability of an imputation that is formulated as a popular or false innuendo, is to assess how the imputation, conceptually, might be responded to by a plea of justification. Here, it seems to me that this defamation trial is at a great risk of being derailed by the pursuit of an irrelevant phantom, were imputations 7.1 and 7.2 allowed to remain as being tied to so-called 'joint financiers of the Vasse Newtown Project'. So formulated, it is simply not possible from the Utterance to get a coherent answer to questions such as, what was the lie, or who and how was the party or parties misled? The plaintiff's hypothesis that there is an imputation as to a lie or deliberate misleading conduct by Mr Saraceni directed to financiers, other than to the joint financiers of Raine Square (then looking to have the Raine Square debt reduced) generates wholly unwarranted confusion. By contrast, there is no difficulty at all in logically seeing how Raine Square joint financiers would be aggrieved, if funds promised to them in reduction of a Raine Square debt, were not ultimately received as promised.
39 The plaintiff's tied meanings, by 7.1 and 7.2, simply confuse matters unnecessarily, without a sustainable textual foundation in the Utterance.
40 But, as with par 13 of the statement of claim, I would allow, as arguable, amended imputations from the Utterance to the effect: '7.1 lied to joint financiers of Raine Square'; and '7.2 deliberately misled joint financiers of Raine Square'.
41 Whether or not, as for par 13, the plaintiff chooses to amend in those terms is a matter for it to consider and advise the defendants and the court, in due course.
42 For the present, I would strike out pars 7.1, 7.2, 13.1 and 13.2, with leave to replead, generally, as to those subparagraphs.
The word 'lied'
43 I move to a subsidiary issue, concerning the use (in the imputations 7.1 and 13.1) of the word 'lied'.
44 In my view, a defamatory imputation of having lied to joint financiers of Raine Square, presents as arguably open to Mr Saraceni at this time (although the word 'lied' is not seen within the text of the Utterance or the Media Release). But just as that imputation is arguably open to Mr Saraceni, so also, I would correlatively conclude, is it arguably open for the defendants to seek to prove their defence of justification to
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- each imputation by reliance upon the various facts and events as particularised under amended defence par 7A(a) - (x).
45 That view is supported particularly by what is mentioned at subparticulars of par 7A(f), concerning Westgem seeking additional financing in March 2010 to complete it's Raine Square project and providing a written document (to Bankwest), that was said to represent:
(i) the Saracen group owned a 66.67% interest in the Vasse Newtown Project;
(ii) that interest would be sold; and
(iii) as part of the proposed additional financing a cash contribution of $17 million would be made available by the Saracen Group towards completion of the Raine Square project.
46 See as well, particulars of justification at subpars (g), (i), (n), (o), (q), (t) and (u)(ii).
47 The complicated series of factual contentions concerning financing and selling off part of the Saracen group's then majority (66.67%) interest in the Vasse Newtown Project (to a minority 49% interest), is contended for around the same time as an acceptance by Westgem of additional funding (see particulars in par 7A(t)). That particularised material, on my assessment, bearing in mind Mr Saraceni's acknowledged position as sole director of Seaport Pty Ltd (Seaport), director of Single Holdings Pty Ltd (Single Holdings), and sole director of Westgem (Seaport and Single Holdings together being the Saracen Group) can provide a sufficiently arguable edifice for a justification defence as regards Mr Saraceni having lied to or deliberately misled the Raine Square financiers. In the end this will be an issue of fact to be determined at trial.
48 In assessing published material as sufficient to sustain the imputation of having lied, it is important to be wary of falling into a trap of adopting too legalistic an analysis. Lawyerly fine distinctions about subsequently broken promises being incapable of being assessed as a true lie, may not align with the approach required in defamation law for the reasonable, but not necessarily careful, hypothetical reader of a publication.
49 In Heytsbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 (Heytsbury Holdings) Steytler J (as he then was), in a context of considering whether asserted imputations arose, reviewed well known observations of the Privy Council in Jones v Skelton [1963] 1 WLR 1362,
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- 1370 – 1371. He then continued with what is a still helpful summary of a significant body of defamation case law. His Honour said:
It should be assumed that reasonable people of ordinary intelligence and education who are also fair-minded and entertain a sense of justice will read the article as a whole and in the context of its publication (see Bik v Mirror Newspapers Ltd [1979] 2 NSWLR 679 at 683).
It is not enough that the words complained of might be understood in a defamatory sense by some person. Rather, the test is that of whether, under the circumstances in which the writing is published, reasonable people to whom the publication was made would be likely to understand it in a libellous sense. (see Capital and Counties Bank Ltd v Henty and Sons [1882] 7 AC 741, 745 HL; Nevill v Fine Art and General InsuranceCo Ltd [1897] AC 68 at 72 - 73; Lewis v Daily Telegraph Ltd [1964] AC 234 at 259.)
The ordinary reasonable person is not unusually suspicious or unusually naïve or avid for scandal. (see Lewis v Daily Telegraph Ltd, 259 - 260.)
Against that, the ordinary reasonable reader is a lay person and must be regarded as prone to engage in loose thinking in relation to sensational publications (see Farquhar v Bottom (1980) 2 NSWLR 380 at 386 and Aqua Vital Australia Ltd v Swan Television and Radio Broadcasters Pty Ltd [1995] Tort Rep 62,481 (81-364) at 62,485) and to have a capacity for implication which is greater than that of the lawyer, especially where the implication is derogatory (Lewis v Daily Telegraph Ltd, 277).
it must always be borne in mind that it is the imputations contained in the words which have to be justified and not the literal truth of the words nor, importantly in the context of this case, some other, similar charge not contained in the words (see Gatley On Libel And Slander, 9th ed, par 11.6.)
51 I mention also s 25 of the Defamation Act (WA) which provides:
25. Defence of Justification
It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true. (my emphasis)
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53 In that overall legal context, however, there is equally no basis in principle as regards a defence of justification for the assessor(s) of fact at trial to take too legalistic a view of whether a series of facts raised in justification is to be assessed as amounting to a lie or not. A jury would be expected to apply its collective common sense and a collective body of life experience in making that evaluation. In that environment, the lawyer's distinction between a true lie as a falsely stated fact, in contrast to a situation of promise made, but subsequently broken, regarding a future event, stands a realistic prospect of being rejected at a defamation trial as being too fine a distinction. I also mention, in the resonating context of a fair comment defence, observations of the plurality of Gleeson CJ, Gummow, Kirby, Hayne & Heydon JJ in Channel Seven Adelaide Pty Ltd v Manock [2007]HCA 60, [36]:
The question of construction or characterisation turns on whether the ordinary reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' — not 'an exceptionally subtle' recipient, or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at'.
Plea of justification: misleading
54 Correlatively to my conclusion concerning lies and their factual justification above from the materials particularised, there is a sufficiently arguable basis provided in par 7A and 13A of the amended defence as regards subpars 7.2 and 13.2 pleas of justification, to sustain this contention, assessed at the interlocutory standard.
Misappropriation
55 From the Utterance and the Media Release it is contended for a third natural and ordinary meaning, in terms (see par 7.3 and 13.3 of the statement of claim) that Mr Saraceni:
misappropriated 7 million dollars, being the net proceeds of the sale of part of Seaport's interest in the Vasse Newtown.
56 This third imputation, from both the Utterance and the Media Release, has not been challenged by the defendants, at least in terms of it not being attacked as not arguably arising from the two publications.
57 By their defence, the defendants (under par 7A and in the distinct particulars answering the par 7.3 imputation) again raise a defence of justification in response to this imputation (see particulars to par 7A given
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- as regards imputation 7.3 at subpar (a) - (e) and for 13A at subpar (a) - (e)).
58 The particulars of justification then seek to incorporate, by reference, aspects of the earlier particulars of justification concerning the earlier two imputations as to 'lied' and misleading conduct of Mr Saraceni.
59 In the end, I am not satisfied the defendants' particulars as a whole, presently, can arguably sustain the assertion as to misappropriation of $7 million by Mr Saraceni.
60 The general thrust of these particulars is that Mr Saraceni's Saracen Group had held a 66.67% interest in the Vasse Newtown project, via Seaport's interest, with the residual 33.33% interest held by a syndicate known as the 'VNPL interest'. Instead of the Saracen Group's 66.67% interest being all sold off, generating a net return of $17 million to be applied in reducing the Raine Square debt, the particulars of justification contend the Saracen Group only sold down its Seaport interest to a level of a 49% (minority) interest. The Saracen Group thereby realised $7.2 million from a sale, effectively, of 17.67% of only its project interest (to VNPL).
61 A lesser interest sale saw the Saracen Group reduce its holding to a minority 49% interest, but correlatively, as to VNPL, for that entity's holding to rise to be a 51% majority interest holder in the Vasse Newtown project.
62 Particulars at par 7A(1) of the amended defence only contend that VNPL paid approximately $7.2 million to or at the direction of Seaport (my emphasis). It is not pleaded Mr Saraceni ever received $7.2 million realised on the part interest sale.
63 It is also said, requests to Mr Saraceni (in his own right and on behalf of Seaport) to disclose how and to where $7.2 million 'received by Seaport ... has been applied' (my emphasis), were ignored and unanswered (see particulars concerning subpar 7.3 allegation at (d)).
64 There was argument over the correct meaning, in context, of the word 'misappropriated'. The defendants contend the verb 'misappropriate' does not necessarily import 'dishonesty', rather than 'unfairness' or only 'wrongfulness'. Accepting that, I still do not see that this sufficiently meets the plaintiff's core grievance concerning Mr Saraceni's personal position, as regards a personal non-receipt of $7.2 million. The $7.2 million amount appears to be accepted as having been received by
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- Seaport, not Mr Saraceni personally. To argue that this is enough because Mr Saraceni controls the Saracen Group, or is sole director of two corporations in this transaction, is too loose and not enough to meet the conceptual difficulty.
65 It is one thing to contend a promise or commitment has been broken, or that a representation over what is to happen in future, was not met. All of that might arguably be sustained on the particulars as to justification as provided for at par 7.3 of the statement of claim. But as presently formulated, these particulars do not, on my assessment, sufficiently engage against an imputation as to Mr Saraceni (personally) having 'misappropriated $7.2 million'.
66 There is also reference in the Utterance and the Media Release to Mr Saraceni not having 'accounted' for where the $7.2 million went, or as to it being, 'unaccounted' (my emphasis). Those words give rise to another issue concerning the wholly unstated basis for any obligation falling upon Mr Saraceni to account to anyone, or whether there ever was such an obligation upon him. The basis for an obligation upon Mr Saraceni to account to anyone is unsatisfactorily absent, in any view.
67 I recognise that I should not assume there to be an 'exceptionally subtle' hearer or reader of this material, nor that an unduly legalistic approach be applied to materials relied upon. I still remain troubled, however, that the present justification particulars as regards 'misappropriated' as to Mr Saraceni's alleged failures, do not arguably meet an acceptable standard of arguability for that aspect of the justification defence.
68 Accordingly, I would strike out the particulars in respect of the attempt to plead justification in response to the imputation at subpar 7.3 and 13.3 of the statement of claim, with leave to re-plead by augmented particulars, if the defendants seek to do that.
Justification of alternative imputations by the defendants
69 Bearing in mind the many possible 'knock-on' ramifications carried by reason of earlier decisions herein concerning the plaintiff's imputations at pars 7.1, 7.2, 13.1 and 13.2, the defendants should have a fresh opportunity to reconsider the overall need for these pleas in an altered context of assessing whether they are still necessary.
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70 One of the clarifications arising out of the defendants alternate imputations formulation under pars 7B(a) and (b) of the amended defence, targets alternative imputations to 'joint financiers'.
71 I understand the rationale for that defence plea at the time, given what were then the plaintiff's (unsatisfactory) imputations at pars 7.1 and 7.2 of the statement of claim and the ensuing confusion, as a result. Conceptually, the alternate imputations at pars 7B(a) and 13B(a) of the amended defence on their face, look to meet the West Australian Newspapers Ltd v Elliott [2008] WASCA 172 parameters for an imputation that reasonably arises within the bounds of the maximum level of seriousness of the plaintiff's own imputation.
72 A final decision on this, however, should be made following the plaintiff's required amendments to its imputations presently seen at pars 7 and 13 of the statement of claim.
73 Alternate imputation 7B(b) and 13B(b) is formulated as 'there were reasonable grounds to suspect that the Plaintiff had never accounted to Joint Financiers for $7 million he received as net proceeds of a sale which he had promised and failed to apply to a debt'.
74 For this imputation particulars have been given:
as to (b):
(i) the First Defendant refers to and repeats the particulars sub-joined to par 7A above in respect to meaning 7.3;
(ii) the particulars sub-joined to par 7A above in respect to meaning 7.3 are, in substance, facts claimed in Bank of Western Australia Ltd & Ors v Seaport Pty Ltd & Saraceni, proceeding number CIV 2143 of 2012.
75 Whilst, as I say, the final decision should await the plaintiff's amendments, I repeat my concern as to this formulation, insofar as it refers to Mr Saraceni on the basis of $7 million it is put 'he received'. The personal receipt deficiency is not arguably borne out by the present particulars.
76 Second, I would express a prime facie concern as to a deficient edifice of argued fact for an asserted obligation of Mr Saraceni needing to account to anyone (in the context of the alternate imputation that he 'never accounted to joint financiers for $7 million'). On my prima facie,
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- assessment that formulation is further deficient in that it does not yet capture the essence of a pejorative defamatory imputation.
77 A grievance over Mr Saraceni not having accounted, presupposes the existence of the obligation to account in him. I put aside technical legal arguments concerning the scope of obligations of fiduciaries or agents to account. Even so, a pleading technique of regurgitating in the plea the same word as used (accounted) from the Utterance and the Media Release, does not suffice. The sting must be precisely captured and here looks not to have been. It is necessary for any alternate imputation to capture the essence of the asserted sting within what is the permissible gradation of seriousness of an imputation that is allowed. see West Australian Newspaper Ltd v Elliott criteria.
78 I hold a prima facie concern that this alternative imputation, as it stands, fails to meet that standard, aside from also being deficient in putting up sufficient underlying facts to sustain the assertion as to a personal receipt of $7.2 million by Mr Saraceni.
79 Finally, I express concerns about the particulars seen under par 7B(b)(ii) of the amended defence. There is the expressed intention, it would seem, of incorporating by reference the facts in CIV 2143 of 2012, now pending in this Court between other parties. Such an incorporation by reference technique, presumably as to the plaintiff's pleadings in that other action is open ended, confusing and, on my assessment, wholly unsatisfactory from a logistical perspective.
80 That aspect should also be corrected in any new wave of pleadings amendments.
Statutory defence of honest opinion
81 The strike out challenge against the amended defence was argued on the basis of some expanded particulars of public interest that were provided by the defendants (handed up during argument), in lieu of the existing particulars of public interest as seen at page 10 (as regards 7C) and page 19 (as regards 13C) of the amended defence.
82 Again, a final assessment about the opinion defences as raised, should be made in the aftermath of the plaintiff's required corrections to its presently deficient pleaded imputations, particularly as regards potential consequences for the pleading at subpar (b) of par 7C and par 13C, concerning alternative imputations raised by the defendants under 7B and 13B of the amended defence.
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83 On the face of it, however, the defendants invocation of s 31(1) of the Defamation Act, as regards both the Utterance and the Media Release, looks to be orthodox in its implementation, as regards identifying argued meanings and by the particulars provided as to the so called 'proper material', then the assertion of the substantial truth in this so called proper material (see s 31(5)(a) of the Defamation Act).
84 I am also not attracted, at this stage, by the plaintiff's major attack put against par 7C and par 13C of the amended defence, grounded upon the contention that the Utterance and the Media Release, do not contain 'expressions of opinion'. In my view, a contrary assessment is plainly arguable. This contest does not raise a matter appropriate for interlocutory dismissal, bearing in mind a (low) arguability threshold that is presently applicable.
85 I would express my related prima facie concern as regards the expanded particulars of public interest seen at subpars (d) and (f) of the amended defence. The particulars are in the following terms:
(d) those statements and the failure of the plaintiff to pay to the joint financiers of Raine Square the proceeds of sale of an interest in the Vasse Newtown project at Busselton related to the later action of the joint financiers in appointing a receiver to the Raine Square project.
(f) the matters complained of concern public litigation forming a part of the extensive litigation referred to above above [sic], namely Bank of Western Australia Ltd & Ors v Seaport Pty Ltd & Saraceni proceeding numbers CIV 2143 of 2102 [2012].
86 As regards (d), I have already highlighted the conceptual deficiency, as to the alleged receipt contention as to $7 million by Mr Saraceni personally.
87 I am troubled by par (f) and its reference to so called 'public litigation' and CIV 2143 of 2102 [2012].
88 A notion of 'public litigation' looms as unsatisfactorily elusive, within the context of Bankwest's presently pending litigation against Seaport and Mr Saraceni being public, but only to the extent it would be expected to be litigated in open court.
89 I flag those prima facie concerns for a subsequent determination, if necessary.
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Concession
90 The defendants accepted during argument that particular (x) to subpar 7A and subpar 13A of the amended defence should be removed and relocated. It is said that it should be directed to the Polly Peck and opinion defences, rather than appearing as it does in the particulars of justification. So much is really apparent. If particular (x) reappears it can be revaluated in a new or altered context or contexts, at that time.
Conclusion
91 The plaintiff's imputations will be struck out with leave to amend. On balance, the defendants have been substantially successful in this application on the major issue that occupied the Court's time and prima facie should have their taxed costs of the application. If the parties are unable to agree upon a minute of orders then the defendants should provide their minute of orders of the court within 14 days of publication of these reasons.
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