Young v The Neil Jenman Group Pty Limited

[2010] FCA 318

FEDERAL COURT OF AUSTRALIA

Young v The Neil Jenman Group Pty Limited

[2010] FCA 318

Citation:		Young v The Neil Jenman Group Pty Limited [2010] FCA 318
Parties:		KEVIN YOUNG, THE INVESTORS CLUB LIMITED (ACN 069 072 742) and LISSON PTY LTD (ACN 077 935 865) v THE NEIL JENMAN GROUP PTY LIMITED and NEIL JENMAN
File number:		NSD 1115 of 2009
Judges:		RARES J
Date of judgment:		26 March 2010
Corrigendum		6 April 2010
Legislation:		Defamation Act 2005 (NSW) s 8
Cases cited:		Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158
Date of hearing:	26 March 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	8
Counsel for the First, Second and Third Applicants:	S Dawson
Solicitor for the First, Second and Third Applicants:	Colin Biggers & Paisley
Counsel for the First and Second Respondents:	C Amato
Solicitor for the First and Second Respondents:	Champion Legal

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1115 of 2009

BETWEEN:

KEVIN YOUNG
First Applicant

THE INVESTORS CLUB LIMITED (ACN 069 072 742)
Second Applicant

LISSON PTY LTD (ACN 077 935 865)
Third Applicant

AND:

THE NEIL JENMAN GROUP PTY LIMITED
First Respondent

NEIL JENMAN
Second Respondent

JUDGE:	RARES J
CORRIGENDUM:	6 APRIL 2010

CORRIGENDUM

1.On the cover sheet of the Judgment, Date of Judgment has been changed from “26 March 2009” to “26 March 2010”

2.On the Orders Page of Judgment, Date of Order should read “26 March 2010” instead of “26 March 2009”.

3.On the first page of the Reasons for Judgment, the date should read “26 March 2010” instead of “26 March 2009”.

4.On the fourth page, the date on the certification of the Reasons for Judgment should read “1 April 2010” instead of “1 April 2009”.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:  Dated: 6 April 2010

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1115 of 2009

BETWEEN:

KEVIN YOUNG
First Applicant

THE INVESTORS CLUB LIMITED (ACN 069 072 742)
Second Applicant

LISSON PTY LTD (ACN 077 935 865)
Third Applicant

AND:

THE NEIL JENMAN GROUP PTY LIMITED
First Respondent

NEIL JENMAN
Second Respondent

JUDGE:	RARES J
DATE OF ORDER:	26 MARCH 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicant file and serve an amended statement of claim on or before 16 April 2010 and:

(i)if there remain any further pleading disputes, following the filing and serving of any further amended statement of claim:

(a)the respondents file and serve an outline of submissions as to that dispute on or before 30 April 2010;

(b)the applicants file and serve an outline of submissions in response on or before 4 May 2010;

(ii)if there be no such dispute, the respondents file and serve their defence by 30 April 2010.

2.Liberty be granted to any party to apply on 2 days’ notice.

3.The matter be listed for further directions on 5 May 2010 at 9:30am.

4.There be no order as to costs for today.  

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1115 of 2009

BETWEEN:

KEVIN YOUNG
First Applicant

THE INVESTORS CLUB LIMITED (ACN 069 072 742)
Second Applicant

LISSON PTY LTD (ACN 077 935 865)
Third Applicant

AND:

THE NEIL JENMAN GROUP PTY LIMITED
First Respondent

NEIL JENMAN
Second Respondent

JUDGE:	RARES J
DATE:	26 MARCH 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

1. This is an application to strike out, as incapable of being conveyed, one imputation in a very large number of pleaded imputations arising out of the publication of six matters complained of.  The imputation is alleged to have been conveyed by the third of the matters complained of posted on a website maintained by The Neil Jenman Group Pty Limited, the first respondent.  The amended statement of claim alleged that on about 4 June 2008, The Neil Jenman Group Pty Limited and Neil Jenman, the first and second respondents, posted on the website a long article entitled “CHRISTINE AND THE CLUB.  Friendship?  Support?  Financial freedom?”.  On the fourth of five pages of the printout of the third matter complained of, the following passage appears:

   “The claim that Young’s services are ‘free’ is, to be polite, somewhat ‘creative’ (to use a favourite spruiking word).  It’s about as true as saying The Investors Club is a club.  In reality, The Investors Club is not a club, it’s a mammoth property flogging machine.  The word ‘club’ is like the word ‘free’ – designed to make us feel good.  And safe.  Hey, we’re among friends.

   Yes, people who buy property from The Investors Club may not pay a fee to Mr Young, at least not directly.  But the same argument could be made by 99.9 per cent of estate agents.  When investors buy a property, the sellers pay a fee to the agents.  The fee, of course, is built-in to the price of the property.

   With agents, the typical fee is around two per cent of the price.  Mr Young’s fee is treble that amount.  He charges six per cent.  In the past decade, according to Young, he has sold $2.5 billion of property to investors, which equates to a cool $150 million in commissions.

   If you believe Kevin Young’s ‘free’ statement, you’ll probably believe him when he says, ‘All our properties are carefully chosen for capital growth.’

   Because that’s exactly what happened to Christine, a Nursing-Sister in her mid-fifties.”

2. The applicants alleged that this material, together with the rest of the article when read as a whole, conveyed the imputation pleaded in par 35(h) of the amended statement of claim, namely that:

   “… between 1995 and 2005 the first applicant had received commissions on the sale of properties through the Investors Club amounting to $150 million by ripping off investors.”

   THE RESPONDENTS’ SUBMISSIONS

3. The respondents argued that the pleading of the imputation was deficient because it failed to specify to whom Kevin Young, the first applicant, charged the commissions.  They also challenged the capacity of the third matter complained of to convey the imputation to an ordinary reasonable reader.  This was because, the respondents contended, that there was no basis identified for suggesting that the investors were ripped off.

   CONSIDERATION

4. At the moment it is sufficient to proceed in the basis that s 8 of the Defamation Act 2005 (NSW) applies, but there has as yet been no argument as to which of the uniform Defamation Acts of the States and Territories will be the relevant ones for the purposes of resolving these proceedings. Section 8 provides that:

   “A person has a single cause of action for defamation in relation to the publication of defamatory matter about the person even if more than one defamatory imputation about the person is carried by the matter.”

5. The material that I have set out from the third matter complained of appears to attack an alleged representation that the services Mr Young offered through the Investors Club were free.  It asserts that his alleged characterisation of the price for those services was “creative” and that the Investors Club was “a mammoth property flogging machine”.  The tenor of the other material that I have quoted suggests that far from being free, Mr Young incorporates a hidden fee of 6% into the purchase price charged to investors, and that this fee had realised him $150 million in commissions over the last decade.  The material quoted also states that had the property been purchased through a typical real estate agency commission arrangement, the fee on the sale price of the properties sold would have been 2%.  The material suggests that, therefore, the corresponding price payable by an investor would have been reduced by an amount in the order of 4% of the price that had otherwise been diverted in the arrangements to Mr Young by the representation of the provision of “free services” and the apparent concealment from investors of the incorporation of a 6% fee in the purchase price.

6. In my opinion, the ordinary reasonable reader of the third matter complained of would be capable of understanding the conduct described in it to be something within the vernacular concept of a “rip off”.  The question in an argument as to the capacity of a matter complained of to convey meanings or imputations is directed to whether the alleged meaning could be found to have been conveyed at trial by the tribunal of fact, be it judge or jury:  cf  Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 164A-167G per Hunt CJ at CL with whom Mason P and Handley JA agreed. At the moment I am dealing with the allegation in par 35(h) at that level, and not on the level of whether, in fact, the ordinary reasonable reader would have understood the publication in the sense charged.

7. I am of opinion that the third matter complained of is capable of conveying that Mr Young received $150 million over the past decade because he had ripped off investors who had been sold the properties referred to in that publication for a total of $2.5 billion.  It would be open to the ordinary reasonable reader to understand the third matter complained of as conveying that a fee received by Mr Young, that was three times what would be payable to a real estate agent, but which was concealed in the overall purchase price paid by the investor, amounted to his ripping the investors off.  This would be because that concealed fee was a substantial overcharge in the context in which Mr Young was asserting his services had been provided free.

8. The respondents’ argument must be dismissed.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:

Dated:       1 April 2009