Wilson v Coxon
[2014] WASC 268
•29 JULY 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WILSON -v- COXON [2014] WASC 268
CORAM: KENNETH MARTIN J
HEARD: 27 JUNE 2014
DELIVERED : 29 JULY 2014
FILE NO/S: CIV 2803 of 2013
BETWEEN: FRANK CULLITY WILSON
Plaintiff
AND
ANNA LOUISE COXON
Defendant
Catchwords:
Civil law - Defamation - Strikeout - Polly Peck imputation - Popular or false innuendos - Natural and ordinary meanings - Legal or true innuendos - Knowledge required in recipient of defamatory words required to derive alleged meaning
Legislation:
Corporations Act 2001 (Cth)
Result:
Application granted
Category: B
Representation:
Counsel:
Plaintiff: Mr M L Bennett
Defendant: Mr S M Davies QC
Solicitors:
Plaintiff: Bennett + Co
Defendant: Lemonis & Tantiprasut Lawyers
Case(s) referred to in judgment(s):
Buckeridge v Walter [2007] WASCA 19
Buckeridge v Walter [2010] WASCA 134; [2010] A Tort Rep 82-067
Burstein v Times Newspapers Ltd [2001] 1 WLR 579
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Findlay v Grimmer [No 2] [2013] WASC 247
Polly Peck (Holdings) plc v Trelford [1986] QB 1000
Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1
Turner v News Group Newspapers Ltd [2006] 4 All ER 613; [2006] 1 WLR 3469
West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387
KENNETH MARTIN J: The plaintiff applies to strike out as untenable the defendant's Polly Peck alternate imputation pleaded within par 14 of the defence filed 17 February 2014, and then sought to be justified by the defendant as substantially true.
The essence of a Polly Peck defence in Western Australia was explained by McLure JA (as her Honour then was) in West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387 at [74] - [76]:
First, a Polly Peck defence is available in this jurisdiction. Second, the scope of the defence is delineated by the extent to which a plaintiff can depart from his or her pleaded imputations. Third, a Polly Peck defence has never extended to separate and distinct statements in the words complained of … .
A Polly Peck defence would be otiose if it only applied to imputations which, if justified, would establish the truth of the substance or sting of the plaintiff's pleaded imputations. In such a case a defendant would simply justify the plaintiff's imputations … It necessarily follows that a Polly Peck defence of its nature must permit a defendant to plead and justify an imputation which is different from the imputations pleaded by the plaintiff in the sense that different evidence would be required to justify it.
The extent to which a plaintiff is permitted to depart from his pleaded imputations is subject to, albeit not solely determined by, considerations of fairness. The availability of a Polly Peck defence is a relevant factor when considering fairness … This has the effect of significantly narrowing, on fairness grounds, the potential for a plaintiff to depart from the pleaded imputations.
See also Steytler P at [57] and, more generally, Polly Peck (Holdings) plc v Trelford [1986] QB 1000.
So then, to properly understand the present challenge to the defendant's Polly Peck imputation, it is first necessary to closely examine the 'playing field' as set down by the imputations initially raised by the plaintiff.
Three natural and ordinary meanings as contended for by this plaintiff are extracted from words allegedly uttered by the defendant to one person - a journalist of The Australian newspaper.
It is convenient to set out pars 1 to 4 from the statement of claim, which contain the words complained of, followed by the three imputations (popular or false innuendos) said to arise from the words, in their natural and ordinary meaning.
The statement of claim
Paragraphs 1 and 2 of the statement of claim plead:
1.The Plaintiff:
1.1is and at all material times was the Executive Director of TFS Corporation Ltd (ACN 092 200 854) (TFS), a public company whose securities are listed for quotation on the Australian Securities Exchange (ASX); and
1.2was at all material times the Executive Chairman of TFS.
2.The Defendant is and at all material times was a shareholder of TFS holding 3,828,512 shares in TFS.
Particulars of Shareholdings
2.1Of the 3,828,519 shares held by the Defendant in TFS, 3,453,519 are held non-beneficially.
I shall continue to refer within these reasons to TFS Corporation Ltd as 'TFS'. I also interpolate now that the defendant's pleaded defence meets par 2 of the statement of claim, by contending what appears to be a wholly uncontroversial fact, namely that the defendant, Ms Coxon, was a legal owner of 3,453,519 ordinary fully paid shares in TFS - but that, over and above the 3,453,519 shares:
2.2at all material times Domenica Nominees Pty Ltd (Domenica) held 375,000 ordinary fully paid shares in TFS on bare trust for the Defendant.
Otherwise, par 2 of the statement of claim was not admitted.
Continuing to par 3 of the statement of claim and the words of the utterance pleaded therein:
Utterance
3.Between 16 November 2012 and 7 December 2012, the Defendant uttered to Mr Tim Boreham (a journalist at The Australian newspaper) the following defamatory statement of and concerning the Plaintiff:
Mr Frank Wilson failed to vote proxies for 375,000 of my shares in TFS against his re-appointment despite me indicating on my proxy form my intention to vote against his re-appointment.
(Utterance to Mr Boreham).
Particulars of Utterance
3.1Further particulars of the Utterance to Mr Boreham will be provided following the issue of interrogatories and a subpoena.
Towards that par 3, I interpolate the defendant's defence denies par 3 of the statement of claim and then raises other matters concerning a potential application of s 15 of the Limitation Act 2005 (WA).
Paragraph 4 of the statement of claim displays the three key imputations said by the plaintiff to arise from the 'Utterance':
Imputations
4.The Utterance to Mr Boreham in its natural and ordinary meaning meant and was understood to mean that the Plaintiff:
4.1in failing to vote in accordance with a directed proxy, acted in contravention of his obligations as a public company Chairman contrary to s 250BB of the Corporations Act;
4.2breached his obligations as an officer of TFS; and
4.3committed an offence as the Chairman of the TFS AGM.
I can assess the acronym 'AGM', seen at the end of par 4.3, as being a reference by the plaintiff to the annual general meeting of the shareholders of TFS.
Subsequently, by the statement of claim, the plaintiff complains of subsequent republications of the defamatory utterance (carrying the same innuendos) in The Australian newspaper on 7 December 2012 (par 7 of the statement of claim) and a secondary republication in The Australian newspaper's web site the same day.
Both of those alleged republications carried a headline 'Big Stink For Sandalwood Grower As TFS Threatens To Make Shareholders Pay Over EGM'. The articles were written by Mr Boreham, chronologically following the utterance to him by the defendant.
For convenience, I attach the second republication as schedule A to these reasons.
Some preliminary observations concerning the words of the utterance
As regards the words complained of as the utterance spoken by the defendant to Mr Boreham, under par 3 of the statement of claim, I can render the following observations:
1.The defendant's spoken words are alleged only to have been directed at and heard by a single person, namely, a journalist employed by The Australian newspaper, Mr Tim Boreham.
2.The utterance is said to have been made some time in a roughly three‑week period, between 16 November and 7 December 2012.
3.The words constituting the three-line utterance seen in par 3 do not say that TFS (a listed public company) was holding its annual general meeting of shareholders (that is, for 2012 or indeed any calendar or financial year).
4.The three-line utterance does not say that Mr Frank Wilson, the plaintiff, had acted as the 'Chairman' of a TFS annual general meeting, or any other shareholders' meeting.
5.The reference to Mr Wilson's 're-appointment' may be inferred as being to Mr Wilson's re-appointment as a director of TFS.
6.The words of the utterance direct attention to a grievance of the defendant over what presents as passive conduct of Mr Wilson, namely as regards his alleged omission to vote proxies granted to him by Ms Coxon.
7.The number of shares in TFS the subject of the defendant's expressed grievance is expressly identified as 375,000 TFS shares, which are then said not to have been voted by Mr Wilson.
8.The utterance uses the term 'my shares', meaning, in context, 375,000 voting shares then held (that is, owned) in TFS by the defendant.
9.The words also say 'my proxy form', also necessarily meaning, in context, a document signed for or on behalf of Ms Coxon, relating to her 375,000 TFS shares.
10.This rather brief utterance to Mr Boreham refers first to what has been done by Ms Coxon over her 375,000 TFS shares, referring first to 'vote proxies for 375,000 of my shares' then, second, to 'on my proxy form'. The reference to her proxies or her proxy form puts that proxy concept as a feature of emphasis in her expressed grievance to Mr Boreham over the plaintiff's omission and her shares.
11.Nothing can be found within the words passing between the defendant and Mr Boreham expressly referring to the Corporations Act 2001 (Cth). There is nothing said between them about any particular section, let alone s 250BB. The significance of that omission from the words of the utterance clearly bears against any logical extraction of an asserted natural and ordinary meaning of the words, as is said to be conveyed as the plaintiff's imputation 4.1. Nor can anything to such effect be reasonably inferred or implied by any natural and ordinary recipient of the words. Of course, these words were spoken only to Mr Boreham. He may, with the added benefit of his own level of personal knowledge, have been able to attribute a different or additional meaning to the utterance words as he heard them. But such a meaning would clearly not be a natural and ordinary meaning of the utterance words viewed on a stand alone basis.
12.Furthermore, nothing is seen within the words of the utterance as to any offence having been committed. That is, there is nothing about any offence either against the Corporations Act or, for that matter, as against any Commonwealth or State legislation. Nor could the commission of an offence be inferred or implied by the natural and ordinary meaning of the words alone. The observations I render under item 11 above would apply again, now as regards any meaning reached personally by Mr Boreham - using the benefit of his extra knowledge or greater legal insights held by him at the time as regards offences being committed. Accordingly, imputation 4.3 simply cannot be derived from the natural and ordinary meaning of the utterance words assessed on their own.
With those preliminary observations, I can now turn to further examine the three imputations raised by the plaintiff under its par 4.
The plaintiff's imputations
I repeat that the three imputations raised by the plaintiff under par 4 are advanced as what are known as popular or false innuendos. By that is meant that the alleged meanings arise for the reasonable recipient out of the natural and ordinary meaning of the words, viewed alone.
Accordingly, the plaintiff's meanings must be shown to arise without a hypothetical ordinary and reasonable recipient holding any level of extra knowledge of any further facts in order to complete, advance or to colour a meaning of the words under scrutiny.
As regards the imputations under par 4.1 and par 4.3, given my earlier observations, it is clear on any analysis that the attributed meanings cannot arise just from the words assessed alone.
Somewhat unusually for a defamation action in this court, the plaintiff's imputations have never been challenged under any interlocutory strikeout application. There may well be tactical reasons for that. Nevertheless, here it remains necessary for me, in a context of needing to evaluate a legitimate range for the defendant's Polly Peckimputation, to closely scrutinise the plaintiff's own imputations. Two clearly do not pass muster as popular innuendos.
Nevertheless, I need to ultimately assess whether the defendant's Polly Peck imputation is arguably different or falls within a less serious shadow of one or other of the plaintiff's surviving imputations: see Elliott [57], [76].
Imputation 4.1
As to imputation 4.1, the utterance words clearly do not identify Mr Wilson as being an executive chairman of TFS (that is, the remunerated chairman of the TFS board of directors), nor as a person appointed as the chairman at an annual general meeting of shareholders of TFS at which Mr Wilson held a concomitant responsibility to vote shareholder proxies received for shares of the defendant. Nor, as I mentioned, is there any reference to s 250BB of the Corporations Act to be found in the words of the utterance spoken to Mr Boreham.
Given wholly deficient circumstances, and without it being contended that the one person to whom the words were spoken (the journalist, Mr Boreham) held extra knowledge, it is impossible to fathom how imputation 4.1 might be legitimately derived from a natural and ordinary meaning of the words, as a popular or false innuendo.
When I put that problem to Mr Bennett (counsel for Mr Wilson) during argument, I did not discern any level of disagreement. Rather, I assessed his argument from then to proceed on the basis of imputation 4.1 being arguable as a true or legal innuendo, based on a hypothesis that Mr Boreham would have held all this extra knowledge to add to what he heard. That hypothesis necessarily must require this plaintiff to effectively replead in lieu of par 4.1 (and also par 4.3, as I explain) the existence of true or legal innuendos, based on the knowledge held. I will grant leave for that rehabilitation exercise to happen in due course.
Imputation 4.2
Imputation 4.2 carries a separate conceptual difficulty, by its phrase 'breached his obligations'. A question immediately arises: 'What obligations?' This imputation lacks the required level of clarity for a defamation imputation to proceed to a trial. It also does not capture the essence of the sting from the words complained about.
I am prepared to accept that there may be enough in the words for it to be inferred Mr Wilson was an 'officer' of TFS. That much may be derived from the use of the word 're-appointment', used in a context in which the re‑appointment of Mr Wilson as a director of TFS was presumably the subject matter of a vote by shareholders. It might also be inferred Mr Wilson was at the time a serving director (that is, an officer of TFS) with the vote by TFS shareholders being taken concerning Mr Wilson's future re‑appointment in that same capacity as previously.
Nevertheless, the root difficulty with imputation 4.2 as pleaded is that the TFS corporate officer's 'obligations' supposedly breached by Mr Wilson are not specified. It is open to speculate that the obligation contended to fall upon Mr Wilson as an officer (a director) of TFS was to vote shares on a proxy instruction of the defendant.
However, there should be no need to speculate over the precise obligation.
The imprecision of imputation 4.2 obviously requires clarification and rehabilitation in the longer term.
With some clarification par 4.2 might in future be assessed as standing as a natural and ordinary meaning that is extractable from the words of the utterance alone - that is, by an ordinary reasonable reader (albeit the only recipient of the words is said to be Mr Boreham).
The problem with par 4.2 carries a knock on consequence as regards the present exercise of assessing the defendant's Polly Peck imputation. Until rehabilitated par 4.2 is not a reliable measuring stick to assess the defendant's (lesser) imputation on Elliott criteria.
Imputation 4.3
As regards imputation 4.3, there is the recurrent deficiency as regards the words of the utterance making no observable reference to Mr Wilson ever being appointed chairman of a shareholders' meeting of TFS. Nor is there any reference in the utterance words to an 'AGM' (which, as I said, I will infer to mean an annual general meeting of shareholders of TFS).
Worst of all, however, there is no detectable reference in the words to any identifiable offence, or a basis to infer out of the utterance words viewed alone, that any offence was committed by the plaintiff.
Consequences for plaintiff
On my assessment, for imputations 4.1 and 4.3 to be allowed to stand they must be recast as true innuendos, on a basis of the extra knowledge in the sole recipient of the utterance, namely, Mr Boreham, at the time.
The extra knowledge needed in Mr Boreham for him to arguably derive the meanings contended for under par 4.1 would, at least, be that he knew at the time:
(a)TFS was a public company;
(b)TFS was holding its 2012 annual general meeting of shareholders;
(c)that Mr Wilson had been acting as appointed Chairman for that 2012 annual general meeting of TFS's shareholders; and
(d)of s 250BB of the Corporations Act and, in particular, the offence under s 250BB(1)(c) and (2).
Assuming it is pleaded and proven that Mr Boreham held that extra knowledge, it may then be arguable that imputation 4.1 can arise as regards Mr Wilson's asserted failure to vote in accord with a directed proxy of the defendant and thereby giving rise to a contravention of his obligations as a chairman of a meeting of a public corporation's shareholders, pursuant to s 250BB(1)(c).
Likewise, in respect of imputation 4.3, there is some additional knowledge required to be held (by Mr Boreham) in order for the imputation to arguably arise, as regards:
(a)TFS conducting its 2012 annual general meeting of shareholders;
(b)Mr Wilson acting as the Chairman of that meeting; and
(c)that it is an offence for a meeting's chairman, under the circumstances as set out in 250BB(2)(a)(ii), to fail to vote as directed under a valid proxy form which is directed to the chairman by a shareholder, contrary to s 250BB(1)(c) of the Corporations Act.
That becomes clearer once the content of s 250BB of the Corporations Act is seen. The section is in these terms (especially the aspects I have highlighted in bold):
(1)An appointment of a proxy may specify the way the proxy is to vote on a particular resolution. If it does:
(a)the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and
(b)if the proxy has 2 or more appointments that specify different ways to vote on the resolution - the proxy must not vote on a show of hands; and
(c)if the proxy is the chair of the meeting at which the resolution is voted on - the proxy must vote on a poll, and must vote that way; and
(d)if the proxy is not the chair - the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way.
If a proxy is also a member, this subsection does not affect the way that the person can cast any votes they hold as a member.
Note: A company's constitution may provide that a proxy is not entitled to vote on a show of hands (see subsection 249Y(2)).
(2)If the chair contravenes subsection (1), the chair commits an offence if the appointment as a proxy resulted from:
(a)the company sending to members:
(i)a list of persons willing to act as proxies; or
(ii)a proxy appointment form holding the chair out as being willing to act as a proxy; or
(b)the operation of section 250BC.
…
(5)An offence against subsection (2), (3) or (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
Republication and the plaintiff's rehabilitation of par 4.1 and par 4.3 as true or legal innuendos
The plaintiff will need to recast imputations 4.1 and 4.3 as true innuendos vis-a-vis Mr Boreham at some point if they are to go to trial.
However, for the purposes of evaluating the plaintiff's challenges on this application to the defendant's Polly Peck plea, I will now assume, as regards the utterance, that the 4.1 and 4.3 innuendo pleas are capable of being advanced on that recast basis. As discussed, par 4.2 is different. However, I assume for the present exercise that it can be amended to more precisely plead the relevant obligation of a director of a corporation holding a valid proxy from a shareholder at a shareholders' meeting: see s 250BB(1)(c).
As regards the pleaded republications, senior counsel for the defendant correctly pointed out that the longer articles that were published in The Australian and then online make no reference at all to Mr Wilson ever acting as an appointed chairman of an annual general meeting of TFS.
The articles at the start do refer to Mr Wilson's role as an executive chairman and chief executive of TFS. But those executive roles are plainly far different to the position of someone being appointed to chair a shareholders' meeting of a publicly listed corporation.
That glaring deficiency carries an adverse repercussion as regards what are pleaded as the natural and ordinary meaning of the words of these articles. Again imputations 4.1 and 4.3 and their equivalents present as needing to be recast as true innuendos based on that extra ingredient being known to some reader of those articles.
For present purposes, the key extracts from the republished article in The Australian manifest as the four paragraphs found towards the end of the article, namely:
One signatory to the notice, Anna Coxon, alleged Mr Wilson had failed to vote proxies on her 370,000 shares against his re-appointment.
Ms Coxon, a former TFS employee now based in Switzerland, said she had indicated her intention on the proxy form.
Mr Wilson confirmed that he did not vote the shares but said he had not received instructions from Ms Coxon.
The share parcel was immaterial to the outcome.
Other parts of the two articles refer to efforts by '[d]efiant' small shareholders in TFS to convene an extraordinary general meeting of shareholders of TFS so as to vote to spill the board.
The articles also make reference to the current TFS directors, save for a Mr Gilchrist, having been 'subsequently re-elected at the company's fiery November 16 annual general meeting'.
There then looks to have been a request for one further (extraordinary) general meeting by the shareholders to be convened under somewhat contentious notices issued by the dissidents.
The plaintiff's contention is that there was a republication of the defamatory utterance to Mr Boreham by The Australian newspaper's print and online articles both conveying again the same three par 4 defamatory meanings.
Clearly, there were a lot more words used in the two similarly asserted republications - compared to the relatively brief words of the utterance to Mr Boreham. But, in my view, the two articles run by The Australian remain deficient as regards imputations 4.1 and 4.3 (and their pleaded equivalent paragraphs) unless a reader holds the further knowledge going beyond the mere words of the articles.
In particular, a reader of The Australian would need to hold some knowledge of the overall effect of s 250BB of the Corporations Act, including the s 250BB(2)(a) offence regarding a Chairman of a public company's shareholders' meeting failing to vote shares in accordance with a directed proxy on a poll.
In short, therefore, the par 4.1 and 4.3 imputations also need to be recast on a basis of them both being true innuendos to some readers of The Australian holding the additional knowledge not found in the articles.
But before leaving the utterance and the two asserted republications in The Australian, it is necessary to say that, these deficiencies aside, it is still clear that each imputation as contended for as a defamatory imputation harming Mr Wilson's reputation may be seen as being closely tied to Mr Wilson's alleged omission as regards not voting proxies he held. These were proxies supposedly given to him by the defendant for her 375,000 TFS shares.
It is Mr Wilson's alleged omission to vote the 375,000 shares under the defendant's proxies given to him against his re-appointment in accord with the defendant's proxy instruction to him which is the clear essence of the grievances found under the innuendos be they popular or true innuendos. It is that arena (that is, failure to vote Ms Coxon's proxies for 375,000 TFS shares) that sets the base for any exercise of assessing the legitimacy of the defendant's Polly Peck plea.
The defendant's Polly Peck plea
The defendant's Polly Peck plea is expressed (omitting for the moment the particulars of justification seen under pars 14.1 to 14.12) as follows:
If, which is denied, the alleged Utterance or the First and Second Republications were defamatory of the Plaintiff and if which is denied the Defendant is liable for such republication, the Defendant says the alleged utterance and the alleged republications bore the imputation that the Plaintiff failed to exercise a power to vote shares in accordance with the known wishes of the owner of the shares, which imputation is true in substance and in fact. (my emphasis in bold)
By written submissions of 16 April 2014 and then further reply submissions of 13 May 2014, the plaintiff advances two major criticisms against this Polly Peck imputation.
In the first place, he contends that if such a meaning arguably arises, the meaning is not in any event (even arguably, for the purposes of a strikeout application) by its character a meaning that is defamatory of the plaintiff in terms of impinging in any way against his character or reputation.
Next, the plaintiff says that the Polly Peck imputation is too imprecise to stand in terms of its formulation, as it does not crystallise a true essence or 'sting' of the defamatory words in the utterance.
The required evaluation of the plaintiff's true essence deficiency argument necessarily requires a juxtaposition of the Polly Peck imputation so as to measure its range against the scope of the plaintiff's three imputations.
At this point there also arises a latent issue not really discussed during argument. I will note the issue but reserve it for determination, if necessary, another day. The issue is whether it is open for a defendant to respond to a true innuendo with a false one. A Polly Peck imputation is usually argued to arise from the natural and ordinary meaning of the words. But if a Polly Peck response takes no account of the actual knowledge which the plaintiff alleges is held by the recipient, then it does not really seem to engage with the defamatory imputation arising as an extra, but lesser, meaning of the words complained of. Here such a Polly Peck meaning might only potentially engage against a false innuendo under a rehabilitated par 4.2, but not against pars 4.1 and 4.3, if they are recast as true innuendos. As I say, this point must await its consideration at a later time, if necessary. I proceed, however, to an evaluation of the plaintiff's current attacks.
Evaluation of challenge to defendant's Polly Peck meaning
In the first place, I must assess this Polly Peck imputation as regards its use of the words 'to exercise a power' as vague and ultimately unsupportable, as an attempted alternative meaning extracted from the words of the utterance.
Those four words in the phrase only distract. They would tend to suggest that whether or not Mr Wilson caused a member's shares to be voted (or not) at a meeting hung upon whether or not Mr Wilson elected to exercise a power which he held to vote the shares. Mr Wilson holding, in effect, a voting discretion is simply not a potential meaning here that is even arguably extractable from the utterance or, as I see it, even from the terms of the alleged republications.
Because the matter was argued this way, I will proceed on to further assess the par 14 Polly Peck imputation on a basis of an excision of those distracting four words, so that the meaning effectively would now read 'the plaintiff failed … to vote shares in accordance with the known wishes of the owner of the shares'.
The plaintiff would still attack that trimmed down Polly Peck imputation as not being even arguably defamatory. But so modified, I disagree that this is clearly the result. In my view, that evaluation is a question of degree, safer left for a jury or the judge, who is to be a trier of fact at the trial.
Nor do I accept the other criticism (after an excision of the distracting phrase) that the now slimmed Polly Peck imputation is not sufficiently crystallised to disclose its true essence in context: see Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1, 14 - 15 per Stephen J and my observations in Findlay v Grimmer [No 2] [2013] WASC 247 [31]. At this point I also note the wisdom of Gleeson CJ's observations in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135, 137 to the effect that virtually every phrase may be capable of further refinement and that solutions are often found in considerations of 'practical justice rather than philogy'.
The essence of the formulated grievance is now clear enough. It is over a failure to vote shares, contrary to expressed wishes of the owner of the shares, by a proxy instruction given to Mr Wilson.
The real problem, however, in terms of evaluating the legitimacy of that modified Polly Peck imputation is whether it is an imputation not substantially different from or more injurious than the imputations alleged by the plaintiff, by reference to the criteria explained in West Australian v Elliott by McLure JA at [78]; see as well Buckeridge v Walter [2010] WASCA 134; [2010] A Tort Rep 82-067 [37] - [38].
On my assessment, even the defendant's modified Polly Peck imputation, whilst (acceptably) at a less serious level than the plaintiff's imputations, ultimately fails. It does not satisfy, in my view, the test of not being substantially different from and so is not 'comprehended within … the plaintiff's imputations'. In my view, it is substantially different in character to the plaintiff's proxy instruction disobedience grievance. I recall that Steytler P observed in West Australian v Elliott at [31]:
[T]here is general, although not universal, support for the proposition that a plaintiff who has pleaded specific meanings by way of false innuendo may only succeed at trial on some other meaning if it is not substantially different from and not more injurious than the meanings pleaded. If that is correct then, as Charles JA pointed out in Hore-Lacy (at [52]), the issue of whether the meaning was substantially different might be tested by asking whether the defendant would have been entitled to plead a different issue, adduce different evidence or conduct the case on a different basis or, possibly, whether the justification would be substantially different. If the Polly Peck imputation pleaded by the defendant is one that would have satisfied the test enunciated, had it been pleaded by the plaintiff, it will be allowed. If it would not have satisfied that test, it will not be allowed: Buckeridge (at [20]).
(His Honour was referring to an even earlier Buckeridge decision, namely Buckeridge v Walter [2007] WASCA 19.)
For the present case, the plaintiff's three imputations (assuming they can be rehabilitated as discussed) can be seen to be tied to a basal expressed grievance that the plaintiff failed to vote the defendant's proxy form for 375,000 of her shares in TFS against his re-appointment as a director of TFS. The subject matter of the plaintiff's grievance is the alleged disobedience or disregard by Mr Wilson of an instruction under a proxy form to vote 375,000 TFS shares against his re-appointment. As I observed earlier, the words 'proxies' or 'proxy' featured twice in a brief utterance. The proxy disobedience is the true focus of the utterance words and, hence, the focus of the plaintiff's imputations.
From that platform set by the plaintiff, on my assessment, the defendant's Polly Peck imputation ultimately strays too far as a distinct subject matter and fails on that basis. Essentially, the defendant's imputation seeks to raise conduct of a distinct genre.
My analysis of the pleaded particulars of justification only confirms what I assess as the defendant's attempt to impermissibly open up side issues over what is really an argument about something else altogether - namely, a failure by another corporation, Domenica, to vote its 375,000 shares against Mr Wilson's re-appointment as a director of TFS. The particulars reveal it is sought to be established by the defendant that Domenica held 375,000 TFS shares on bare trust for the defendant, and that Domenica itself did not take any action to cause those shares to be voted at the AGM against a proposed re‑election of Mr Wilson as a director of TFS.
The justification particulars state:
Particulars of Justification
14.1The Defendant repeats paragraph 2.1 and 2.2 hereof.
14.2At all material times the Defendant was entitled to direct Domenica to transfer legal ownership of the shares to the Defendant.
14.3At all material times the Defendant had an entitlement to direct Domenica how to vote the shares.
14.4At all material times the Plaintiff was a director and secretary of and had effective control of Domenica.
14.5On or about 7 November 2011 and 25 January 2012 the Defendant requested the Plaintiff to cause Domenica to transfer legal ownership of the 375,000 shares to the Defendant.
14.6On or about 26 January 2012 the Plaintiff responded to the request by asking that the transfer of the legal ownership of the shares be deferred for reasons related to the Plaintiff's convenience.
14.7By 7 December 2012, Domenica had not transferred the 375,000 shares to the Defendant.
14.8On 17 October 2012, TFS announced to the ASX that its AGM would be held on 15 November 2012, which is the date on which it was held.
14.9The Defendant was a signatory to two notices to TFS, which were signed by the Defendant on or about 15 October and 8 November 2012. The notices were delivered to TFS on or about 15 October and 8 November 2012 and came to the attention of the Plaintiff prior to the AGM of TFS held on 15 November 2012. The notices (among other matters):
(a)put TFS on notice of the signatories' intention to move a resolution for the removal of the Plaintiff as a director of TFS;
(b)requested that TFS call a general meeting to consider and vote on a resolution that the Plaintiff be removed as a director of TFS.
14.10The Defendant lodged a proxy form for the AGM appointing the Chairman, who was the Plaintiff, as her proxy and stated that she wished the Plaintiff to vote against the resolution for his re‑election as a director of TFS.
14.11By reason of the matters particularised at paragraphs 14.1 to 14.10 above the Plaintiff knew that it was the Defendant's wish that the 375,000 shares held by Domenica on bare trust for the Defendant be voted against the Plaintiff's re-election as a director of TFS.
14.12The Plaintiff did not cause Domenica to vote the 375,00 shares against his re-election as a director of TFS.
What the particulars of justification betray is that the 375,000 TFS shares are accepted as being legally owned by Domenica as their registered owner at the time. A lawyer would know that in that situation it would actually have been impossible for Ms Coxon to give a valid proxy direction to Mr Wilson as regards those 375,000 shares. She was not their registered owner. Domenica was. Any proxy instruction for the 375,000 shares then held by Domenica on trust could only issue from Domenica, not Ms Coxon.
The essence of Ms Coxon's Polly Peck response upon a close analysis of her par 14 particulars is to seek to raise an alleged failure of her trustee (Domenica, that corporation being then controlled by Mr Wilson, wearing another hat) to itself issue a proxy direction to the chairman of the TFS meeting to vote Domenica's 375,000 shares against Mr Wilson's re‑election.
This is a wholly different grievance in character to the plaintiff's proxy disobedience sting.
By my assessment, the Polly Peck alternative meaning strays too far from the essential sting which the plaintiff extracts from the words of the utterance as regards disobedience to or disregard of a proxy instruction. In fact, ironically, as the defendant's own particulars show, and inconsistent given the content of the utterance, there never was any proxy given by the defendant as regards the 375,000 shares held on trust for her by Domenica. What is said about that in the utterance presents as factually wrong. And even if there had been, such a proxy would not have been a valid proxy because mere beneficial owners of shares cannot give a valid proxy. Only the registered owner of the shares can validly do that. Domenica did not issue such a proxy for the 375,000 shares it held on trust for the defendant.
The defendant ran a supplementary policy argument to support its par 14 Polly Peck plea, on a basis there was no utility in a strikeout application, because the same materials it particularised under par 14 would also be adduced by her as evidence in mitigation of any damages suffered by the plaintiff at a trial.
Evidence under a failed justification, or a failed Polly Peck plea (led at trial) can be admissible in mitigation of damages if the plaintiff proves its case at trial. That position for Western Australia appears to follow from the observations of Steytler P in West Australian v Elliott at [61] - [63] whilst evaluating the decisions of the English Court of Appeal in Burstein v Times Newspapers Ltd [2001] 1 WLR 579 and Turner v News Group Newspapers Ltd [2006] 4 All ER 613; [2006] 1 WLR 3469. But admitting that evidence on a stand alone basis strikes me as requiring further support.
In my view, the strikeout evaluation exercise has been necessary here to evaluate the Polly Peck imputation and, in that context, the plaintiff's imputations. That was necessary in order for a trial to not be wastefully derailed by irrelevant and distracting considerations on both sides as matters have turned out.
I would reserve to another day the question of whether or not such materials might be admissible on a stand alone basis under a general mitigation of damage plea by a defendant. I do express an in principle prima facie reservation over whether such evidence, wholly unrelated to the plaintiff's asserted disobedience to a proxy instruction sting, can be legitimately admissible, if only introduced at trial as mitigation evidence against damages. The underlying difficulty seems to be that such evidence strays a long way distant from what Mr Boreham or the readers of The Australian (holding the extra knowledge as explained earlier) might have understood as the plaintiff's proxy disobedience grievance, which is the only relevant sting raised by the plaintiff.
In the circumstances, the Polly Peck imputation should be struck out with leave to replead.
First, however, the plaintiff should amend its own statement of claim to address the conceptual deficiencies identified in its core imputations, as I have explained. The parties should confer over a minute of directions programming these events, allowing 14 days on both sides for their respective repleadings. As regards the costs of this application, the plaintiff has ultimately achieved what it set out to achieve against the Polly Peck imputation, but at some cost to its own pleading.
In the circumstances, the costs of the application should be the plaintiff's costs in the cause to be taxed. In other words, the plaintiff must win at trial to receive its taxed costs of this application. If the plaintiff does not, then the parties will each bear their own costs of this application.
I will allow the parties 14 days to confer on orders giving effect to these reasons, after which the plaintiff should file a minute of proposed orders. I will resolve any residual dispute as to those orders on the papers.
SCHEDULE A
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