Sullivan v South Australian Water Corporation No. Scciv-01-189

[2004] SASC 138

SULLIVAN v SOUTH AUSTRALIAN WATER CORPORATION
[2004] SASC 138

1. JUDGE BURLEY.             In this matter the plaintiff claims damages for breach of contract and for libel.  The plaintiff was the former chief executive officer of the defendant; his contract of employment was terminated by the plaintiff in October 2000.  It is common ground that on 16 October 2000 the defendant published a media release which contained the following statements:

   “SA Water replaces Chief Executive

   Mr James Porter, Chairman of the South Australian Water Corporation, has announced that the Board has terminated the employment contract of its Chief Executive, Mr Sean Sullivan.  The decision follows a recent review of Mr Sullivan’s performance.

   Mr Peter Norman, currently Head of Water Services for the Corporation, has been appointed as Acting Chief Executive.”

2. The plaintiff claims that those statements were defamatory.  By paragraph 11 of the second further amended statement of claim, the plaintiff pleads:

   “11

   11.1  In their natural and ordinary meaning the words in the media release meant and were understood to mean that:

   11.1.1In carrying out his duties as the chief executive officer of the defendant, the plaintiff had performed in a poor, inadequate and/or unsatisfactory fashion;

   11.1.2That the plaintiff’s performance as chief executive officer of the defendant had been poor, inadequate and/or unsatisfactory and that this led to, or had been the reason for, the termination of his employment contract;

   11.1.3That the plaintiff’s performance as chief executive officer of the defendant had been sufficiently poor, inadequate and/or unsatisfactory that the termination of his employment contract by the defendant was justified;

   11.1.4That the plaintiff had been sacked or dismissed by the defendant by reason of his poor, inadequate and/or unsatisfactory performance as chief executive officer.

   11.1.5That the plaintiff was incompetent in the performance of his duties as Chief Executive Officer of the South Australia Water Corporation.

   11.1.6That the performance by the plaintiff as Chief Executive Officer of the South Australia Water Corporation so adversely affected the business operations of the South Australia Water Corporation as to warrant the termination of the plaintiff’s employment.

   11.1.7That the plaintiff was so incompetent in the performance of his duties as Chief Executive Officer of the South Australia Water Corporation as to justify the termination of his employment.”

3. In its fourth further amended defence, at paragraph 10, the defendant denies that the words in the media release had the meanings as set out in sub-paragraphs 11.1.1 to 11.1.7 of the statement of claim.

4. Paragraph 12 of the defence pleads that the media release meant that “following a review of the plaintiff’s performance and having regard to an aspect or aspects of the Plaintiff’s performance which were not specified in the media release the Board considered that it was in the interests of the defendant that the plaintiff’s position should be terminated”.

5. At paragraph 13 of the defence the defendant pleads that the media release, so understood, was true in substance and in fact.  Within paragraph 13 there are eight and a half pages of particulars.

6. By application dated 5 April 2004, the plaintiff has applied to strike out paragraphs 12 and 13 of the fourth further amended defence.  The plaintiff also seeks to strike out paragraph 14 which sets out a defence of qualified privilege.

7. It is convenient to deal with the plaintiff’s complaint in relation to paragraph 14 first.  The paragraph starts with the words “If the words in the media release bore or were understood to bear or were capable of bearing the meaning or imputation alleged in sub-paragraphs 11.1.1 to 11.1.7 …”.  The plaintiff complains that these words were unnecessary because the words, whatever meaning they bore, either were or were not published on an occasion of qualified privilege.  As against this, it might be said that the meaning of the spoken words or published material had a bearing upon whether or not an occasion of qualified privilege might be said to have arisen.  I do not intend to enter into this debate.  It is sufficient to say that, in my view, the inclusion of the words referred to at the commencement of paragraph 14 of the defence does not cause any embarrassment to the plaintiff and they should be permitted to stand.  Consequently, that aspect of the plaintiff’s application will be refused.

   Paragraphs 12 and 13 - The Polly Peck Defence

8. The plaintiff’s criticism of paragraphs 12 and 13 of the defence raise for consideration the question of whether or not the defendant is permitted to plead a meaning different from the meanings contended for by the plaintiff and to seek to justify them.  A summary of the plaintiff’s contentions, taken from the written submissions of Mr Swan, counsel for the plaintiff, is as follows.

9. A defendant is not permitted to justify matters in respect of which the plaintiff has not complained: Templeton v Jones [1984] 1 NZLR 448 at 451. Mr Swan argued that a defendant may not assert the truth of a separate charge or charges not made by the plaintiff. If such matters are raised in the defence, either by way of justification or in mitigation of damages, they will be struck out: Plato Films Ltd and Others  v Speidel [1961] AC 1090.

10. That is the primary position of the plaintiff.  It was argued that if this was a correct statement of law, paragraphs 12 and 13 should be struck out at this interlocutory stage.  The plaintiff adopted a secondary position: if, contrary to the primary submission, a defendant is permitted to plead different meanings, the defendant could only do so if the different meaning was not more serious nor substantially different from the meaning or meanings pleaded by the plaintiff: David Syme & Co Ltd and Another v Hore-Lacy [2000] 1 VR 667 per Ormiston and Charles JJA.

11. Mr Heywood-Smith QC, counsel for the defendant, contended to the contrary.  He referred, as did Mr Swan, to Polly Peck (Holdings) PLC and Others v Trelford and Others [1986] QB 1000. That case has been taken as authority for the proposition that a defendant may plead an alternative meaning arising from a publication, even where the alternative meaning is totally unrelated to the meanings attributed to the published words by the plaintiff, and the defendant may seek to justify that meaning.

12. As Mr Swan submitted in paragraph 8 of his written submission:

    “Much of the controversy that has arisen in respect of a consideration of Polly Peck arises from a concern as to whether:

    (a)a plaintiff is confined to meanings as pleaded;

    (b) if not, or not entirely, how was a defendant to properly ensure that it puts its defence before the court without putting forward a plea in respect of all alternate meanings.”

13. I was referred to the decision of the Full Court in Brander v Ryan and Messenger Press Pty Ltd, an unreported decision of the Full Court, Judgment No [2000] SASC 446. In that case, Lander J, with whom the other two members of the court agreed, said (at [27]) that a plea by the defendants as to the imputation that they said arose on the natural and ordinary meaning of the words complained of was not a proper plea. He referred to the judgments of Brennan CJ and McHugh J in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519.

14. In Selecta Homes and Building Co Pty Ltd v Advertiser-Weekend Publishing Co Pty Ltd (2001) 79 SASR 451, Gray J referred to Chakravarti at paragraph [149]. He said:

    “In Chakravarti, Brennan CJ and McHugh J condemned the practice of a defendant pleading a different imputation from that propounded by a plaintiff and the subsequent justification of that different imputation.  They said such a practice was:

    ‘contrary to the basic rules of common law pleadings and in many contexts will raise issues which can only embarrass the fair trial of the action.’

    Both judges accepted that this practice might be justifiable for the limited purpose of making explicit the grounds for denying a pleaded imputation.  However, they rejected the notion that establishing the truth of the defendant’s alternative meanings could be a good defence to a plaintiff’s claim.  Gaudron and Gummow JJ expressed no misgivings about the practice.  Kirby J referred only to the practice in the context of the defendant making explicit what it claimed was an alternative meaning.”  (Footnotes omitted).

15. I do not understand the statement by Lander J in paragraph [27] of Brander to form part of the ratio of the case.  It is not clear the extent to which the point was debated in argument before the Full Court.  I infer from the discussion of the point by Gray J in Selecta Homes that the question of whether or not a defendant may plead and seek to justify different meanings is still open.  This is certainly the case in Victoria as is evident from the decision of David Syme & Co Ltd.

16. Given that this was an application which calls into question the sufficiency of the pleadings, it is only necessary to decide whether the point raised in the pleading is arguable.  It is not for the court, on an interlocutory application such as this, to determine the legal point at issue if it is apparent that both parties are advancing arguable propositions.  I am mindful of the fact that, depending upon whether or not paragraphs 12 and 13 are allowed to stand, the length of the trial will be substantially affected.  This factor, as I understand it, is one of the reasons behind the earlier state of the law which precluded a defendant from asserting an attempt to justify different meanings.  However, if the current state of the law permits such a pleading, the fact that the length of trial may be increased is not relevant.

17. It seems to me that it is at least arguable that a defendant is permitted to assert different meanings and to attempt to justify those meanings provided that they are not more serious and that they are not substantially different from the meanings contended for by the plaintiff.  In order to determine whether this aspect of the requirement is fulfilled, it is necessary to compare the meanings contended for by the plaintiff in paragraph 11 of the statement of claim with the meaning contended for in paragraph 12 of the defence.  When such a comparison is made, it is arguable, in my view, that the meaning contended for by the defendant is not more serious than the meanings pleaded by the plaintiff, nor is it a markedly different meaning.

18. For the above reasons, I do not consider that paragraphs 12 and 13 should be struck out.  I have already indicated that I do not intend to strike out paragraph 14.  The plaintiff’s application is therefore dismissed.

19. I will hear counsel as to costs.