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  • Unreported Judgment

Jackson-Knaggs v Queensland Building Services Authority

 

[2005] QSC 260

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Jackson-Knaggs v Queensland Building Services Authority & Anor [2005] QSC 260

PARTIES:

MARK ANDREW JACKSON-KNAGGS
(plaintiff/respondent)
v
QUEENSLAND BUILDING SERVICES AUTHORITY
(first defendant)
QUEENSLAND NEWSPAPERS PTY LTD
ACN 009 661 778
(second defendant/applicant)

FILE NO/S:

BS 10119 of 2003

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme

DELIVERED ON:

19 September 2005

DELIVERED AT:

Brisbane

HEARING DATE:

26 August 2005

JUDGE:

Holmes J

ORDER:

  1. That there be a preliminary determination pursuant to r 483(1) of the Uniform Civil Procedure Rules of the questions set out in the application.
  1. That those questions be answered as follows:

(a) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(a) of the statement of claim?

Yes.

(b) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(b) of the statement of claim?

Yes.

(c) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(h) of the statement of claim?

Yes.

(d) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(i) of the statement of claim?

Yes.

  1. That the imputations pleaded in paragraphs 17 (h) and (i) of the statement of claim be struck out, with leave to replead.
  1. That the imputations pleaded in paragraphs 17 (f) and (g) of the statement of claim be struck out.

CATCHWORDS:

DEFAMATION – STATEMENTS AMOUNTING TO DEFAMATION – PARTICULAR STATEMENTS – IMPUTATION – Where plaintiff alleges defamation in relation to a newspaper article, about proceedings in the Queensland Building Tribunal, printed by the second defendant – where second defendant seeks preliminary determination of certain questions under r 483(1), Uniform Civil Procedure Rules 1999 (Qld) – whether parts of article alleged to be defamatory capable of bearing certain meanings as pleaded – whether various paragraphs of the statement of claim ought to be struck out pursuant to r 171(1)(b), Uniform Civil Procedure Rules 1999 (Qld)

Uniform Civil Procedure Rules 1999 (Qld), r 171(1)(b), r 483(1)

Australian Sports Connection Pty Ltd v Queensland Rugby Union Ltd [2000] QSC 252

Bureya Pty Ltd v Mackay Printing & Publishing Co Pty Ltd [2002] QSC 359

Creek & Creek v O’Malley & Queensland Newspapers Pty Ltd [2001] QSC 122

Jones v Skelton [1963] SR (NSW) 644

Lewis v Daily Telegraph [1964] AC 234

Mirror Newspapers v Harrison (1982) 149 CLR 293

Sherlex Pty Ltd v Thornton [2003] QCA 461

Wake v John Fairfax & Sons Ltd [1973] 1 NSWLR 43

COUNSEL:

Ms D Spence for the applicant

The respondent appeared on his own behalf

SOLICITORS:

Thynne & Macartney for the applicant

The respondent appeared on his own behalf

  1. HOLMES J: The plaintiff in this action seeks damages for defamation against the second defendant, a newspaper publisher, in respect of an article concerning proceedings in the Queensland Building Tribunal. (A copy of the article is annexed to this judgment.) The second defendant by this application seeks, pursuant to r 483(1) of the Uniform Civil Procedures Rules 1999 (the ‘Rules’), a preliminary determination of whether certain words pleaded in the statement of claim are capable of carrying the imputations pleaded in respect of them, and orders that certain paragraphs of the statement of claim be struck out pursuant to s 171(1)(b) of the Rules

The pleading

  1. Paragraph 15 of the statement of claim sets out those words of the article of which complaint is made, as follows:

“The said article contained the following words, (hereinafter referred to as ‘the newspaper article’):-

‘A twice-failed Queensland builder has been called before a tribunal to explain why $1 million of company funds were allegedly paid to his parents, his girlfriends and a Brisbane lingerie shop just before his construction business collapsed ... ... During the three-day hearing, barrister Kylie Downes for the BSA, said more than $1 million was siphoned out of Jackson-Knagg’s construction business before it folded.  Ms Downes said the Jackson-Knagg’s girlfriends received more than $300,000 in money and assets before MHD constructions went bust ... ... Jackson-Knaggs, however, gave the tribunal a different explanation.  Jackson-Knaggs – a trained accountant, who has been declared bankrupt – told the examination that while large money transfers had been recorded in financial statements, no actual cash ever changed hands.  He said he deposited cheques from his parents into the company’s bank account but would cancel the transaction before the funds could be moved.  Jackson-Knaggs told the tribunal the accounting technique, known as ‘kiting’, made it look like his company cash flow was healthy and temporarily kept his financiers at bay ... ... The collapse of MHD Constructions is the second major business failure Jackson-Knaggs (sic), who was at the helm of Masterman Homes shortly before it crashed in 1997 with debts of more than $6 million ... Mr Jennings said the BSA had already banned Jackson-Knaggs from being involved with a building company for the next five years.”

  1. Paragraph 17 sets out the imputations it is alleged the article bears:

 

“‘The newspaper article’ was defamatory of the plaintiff in that, according to its ordinary and natural meaning ‘the newspaper article’ meant and was understood to mean that:-

a.that the plaintiff was a thief

b. that the plaintiff stole more than $1 million

c. that the plaintiff knew of the technique known as kiting and said it made it look like his company cash flow was healthy.

d.that the plaintiff was twice-failed in business.

e.that the plaintiff was responsible for the business failure of Masterman Homes;  and

f.in 1997, the plaintiff was in control of Masterman Homes which has financially failed;  and

g.that the plaintiff was either a director or shareholder of Masterman Homes, or held a financial interest in Masterman Homes which has financially failed.

h.that the plaintiff had unlawfully transferred more than $300,000 in assets and cash to girlfriends from MHD Constructions Pty Ltd.

i.the plaintiff prepared false information for MHD Constructions Pty Ltd.

j.the plaintiff is banned from being employed with a building company for a 5 year period.”

Preliminary determination under r 483

  1. The second defendant sought a preliminary determination of these questions:

(a) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(a) of the statement of claim?

(b) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(b) of the statement of claim?

(c) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(h) of the statement of claim?

(d) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(i) of the statement of claim?

and a further order that they be decided in, in each case, the second defendant’s favour. 

  1. Rule 483 permits the court to make an order for the separate decision before trial of a question, whether of fact or law or both. The question whether material is or is not capable of bearing a pleaded imputation is one of law.[1]   In this State, questions of capacity have more commonly been dealt with on striking out applications, although there are instances in which r 483 has been applied.[2] 
  1. The plaintiff argued that a determination under r 483(1) was inappropriate, because other issues would remain to be decided at trial. He cited Australian Sports Connection Pty Ltd v Queensland Rugby Union Ltd[3], a single judge decision, and Sherlex Pty Ltd v Thornton[4], a decision of the Court of Appeal, to support his submission. I do not think either case assists.  In Australian Sports Connection Helman J declined to decide the issue raised (as to whether the defendant was entitled to resile from a position it had previously taken in the proceedings) on the basis that the same issue would remain for determination as between the plaintiff and another party.  In Sherlex, the Court of Appeal took the view that the first instance judge erred in ordering a separate determination of an indemnity question where there remained, or might remain, unresolved factual issues affecting its resolution.  Neither of those concerns, it seems to me, operates in this case. 
  1. It is not suggested here that there are any extrinsic facts relied on by the plaintiff in order to support the imputations pleaded; rather he pleads the “ordinary and natural meaning” of the words used as conveying the imputations. The questions are confined and properly determined on the pleading and the article itself. The resolution of whether the particular imputations can arise from the words complained of has the potential to refine the issues for a jury and thus to reduce the complexity and expense of any trial. It is, in my view, convenient and just to determine the questions raised by the defendant in this way. I will, accordingly, proceed with their determination.

Capacity

  1. Three of the imputations (contained in sub-paragraphs (a), (b), and (h)), in respect of which the second defendant seeks a determination, arise from the reporting of allegations put by counsel at the hearing as to the alleged transfer of funds from the company MHD Constructions Pty Ltd. The fourth (sub-paragraph (i)) stems from the reporting of other evidence said to have been given about the plaintiff’s recording of financial information for the company.
  1. As to the first of the imputations pleaded, Ms Spence, for the second defendant, submitted that the article, at its highest, contained an imputation that the plaintiff’s conduct had given rise to a suspicion that he might have misappropriated funds, but not an imputation that he had actually been guilty of theft. She relied on Mirror Newspapers v Harrison[5] in which the High Court held that a report that a person had been arrested and charged was not capable of bearing an imputation of guilt of the offence charged:

 

“The ordinary reasonable reader is mindful of the principle that a person charged with a crime is presumed innocent until it is proved that he is guilty. Although he knows that many persons charged with a criminal offence are ultimately convicted, he is also aware that guilt or innocence is a question to be determined by a court, generally by a jury, and that not infrequently the person charged is acquitted.  In this situation the reader will view the plaintiff with suspicion, concluding that he is a person suspected by the police of having committed the offence and that they have ground for laying a charge against him. But this does not warrant the conclusion that by reporting the fact of arrest and charge a newspaper is imputing that the person concerned is guilty.”[6]

Similarly, in Lewis v Daily Telegraph[7] the plaintiffs were reported to be the subject of a fraud squad inquiry. The House of Lords drew the distinction between an imputation that a plaintiff had so conducted his affairs as to give rise to a suspicion or inquiry, and an imputation of actual guilt of fraud, which was not available merely on the report of a police investigation. 

  1. The headline to this article, “Builder called to explain payments”, Ms Spence submitted, showed that no more than an inquiry was on foot. The article itself drew no conclusions about the company’s financial affairs but merely set out the allegations made and the evidence of both the plaintiff and his father in response. The plaintiff’s explanation, that while transfers of funds were recorded no actual cash had changed hands, was set out in the article, without any comment to detract from it. A reader could be expected to realise that allegations were not necessarily made out, particularly where the explanation of the person concerned was given.
  1. Similarly, the second imputation, that the plaintiff stole more that $1 million, was merely a matter of suspicion. And it was not clear that it was the plaintiff who was said to be responsible for the missing funds: the article, while referring to the allegation that “more than $1 million was siphoned out of Jackson-Knaggs’ construction business”, did not say by whom the monies were “siphoned”. The plaintiff was not the only person mentioned in the article; later there was a reference to an accountant alleged to have prepared false statements for the company. The third imputation, that the plaintiff had unlawfully transferred more than $300,000 in assets and cash to girlfriends, could only arise on a “strained, or forced or utterly unreasonable interpretation”[8] of the words used.
  1. The plaintiff argued that, in context, a reasonable reader would have regarded the article as imputing that he was “a crook”: that he had stolen money from the company as it was failing and given it to his girlfriends. I think there is some force in that submission. This case is not on all fours with either Harrison or Lewis. The context is not one of criminal proceedings; there is no reason to suppose a presumption of innocence would loom large in the ordinary reasonable reader’s mind. And the article contains direct assertions of misconduct by the plaintiff.  It is true that they are the allegations of counsel in the hearing, rather than those of the journalist reporting, but the second defendant has chosen to repeat them in that direct form.
  1. The effect of repetition may depend on its context:

 

“There can be little doubt that the nature and quality of the defamatory publication may vary, dependent upon whether it is a report of what another has said and whether it is adopted, repudiated or discounted.  The purpose of the republication would also have a significant bearing. There can be no such general rule as was submitted to us that the repeater or reporter of the defamatory statement of another is not liable as for defamation unless he adopts it or reaffirms it.”[9]

  1. The manner of reporting was at the heart of the distinction drawn in Lewis v Daily Telegraph:

 

“If one repeats a rumour, one adds one’s own authority to it and implies that it is well founded, that is to say, that it is true. It is otherwise when one says or implies that a person is under suspicion of guilt. This does not imply that he is in fact guilty but only that there are reasonable grounds for suspicion, which is a different matter.”[10] 

  1. Here, there are grounds for thinking that the second defendant falls within the first of those categories in its repetition of counsel’s allegations, from which it has done little to distance itself in its report. It is not my impression that the article taken as a whole casts the allegations as merely giving rise to inquiry, so as to make the imputations pleaded unavailable. The headline “Builder called to explain payments”, upon which Ms Spence relied as demonstrating that no more than an inquiry was under way, has implicit in it the premise that payments were in fact made; although, on one view at least, that was precisely what the plaintiff was said to be denying. The article leaves open the inference that the explanations said to have been offered in evidence by the plaintiff’s father and the plaintiff himself were unsatisfactory. Certainly, as the article makes clear in pointing out that they are different, the explanations of the two appear inconsistent. One cannot say that their recounting negates the sting of the allegations put by counsel at the hearing so as to make the imputations pleaded insupportable.
  1. Nor do I find compelling the suggestion that the statement, “more than $1 million was siphoned out of Jackson-Knaggs’ construction business before it folded”, could not bear the imputation that it was the plaintiff who was responsible. Those very words conflate the plaintiff’s affairs with the company’s (“Jackson-Knaggs’ construction business”). The article goes on to speak of the plaintiff’s girlfriends’ and parents’ receiving monies from the business and generally makes it clear that it is the plaintiff who is being called to account for the movement of the funds. And I do not think that it takes any straining or forcing to arrive at the imputation that the plaintiff unlawfully transferred more than $300,000 in assets and cash from the company to his girlfriends. (There remains a complaint of lack of precision in the use of the word “unlawfully”, which I will deal with shortly.)
  1. My conclusion, then, is that each of the imputations pleaded in these paragraphs is capable of being conveyed to the ordinary reasonable reader by the words of the article pleaded in the statement of claim. Whether they are so conveyed remains to be determined on trial.
  1. As to the remaining imputation, that the plaintiff prepared false information for MHD Constructions Pty Ltd, there was, Ms Spence said, an absence of any suggestion in the article that the plaintiff had any part in preparing false information. “Kiting”, as it was said to have been described by the plaintiff in his evidence, did not amount to preparation of false information; it was merely an accounting technique.              But if the imputation pleaded at para 17(i) was to do with “kiting”, it was in essence the same as the imputation pleaded at para 17(c).
  1. The plaintiff’s explanation of how the words complained of could sustain both the imputation at para 17(c) and the imputation at para 17(i) seemed to shift ground somewhat. Initially he suggested that the two separate imputations could be drawn from the paragraphs of the article dealing with his evidence. The first part,

 

“Jackson-Knaggs …. told the tribunal that while large money transfers had been recorded in financial statements, no actual cash ever changed hands. 

He said he deposited cheques from his parents into the company’s bank account but would cancel the transaction before the funds could be moved.” 

bore the imputation of recording false information. Those sentences were distinct from what followed:

 

“Jackson-Knaggs told the tribunal the accounting technique known as ‘kiting’ made it look like his company’s cash flow was healthy and temporarily kept his financiers at bay.” 

In other words, the technique described in the last sentence was not merely a characterisation of the acts described in the preceding sentences but was a completely unrelated allegation.  That seems to me a reading fairly described as “strained, or forced or utterly unreasonable”.

  1. The plaintiff then suggested that the imputation he had prepared false information was supported by the reference in the article to the company’s accountant, of whom it was said that he prepared financial statements resulting in renewal of the company’s building licence which must have been false. That could only be, the plaintiff said, if he had given the accountant false information to begin with.
  1. There seem to me to be two difficulties with that reading of the article. The first is that the plaintiff seeks in contending for it to rely on words (those relating to the accountant) which he has not pleaded in his statement of claim, nor particularised subsequently. The second is that it relies on an inference which I do not consider supportable on a fair reading of the material. That is, that from the mere allegation of preparation of false financial statements by the accountant, the ordinary reasonable reader could infer that the plaintiff himself must have provided the information on which they were based. There is nothing in the article, implicit or explicit, to link any false statement by the accountant with anything emanating from the plaintiff.
  1. That is not to say, however, that the earlier words of the article cannot support an imputation of producing false information. The explanation attributed to the plaintiff, that he adopted a practice of depositing cheques and cancelling the transactions so as to produce the effect of recording large money transfers in financial statements without any actual flow of cash, seems to me arguably to describe production of false information. That is not necessarily a duplication of imputation (c), which, although not sparkling in its clarity, seems to deal more with familiarity with the technique and its outcome than its actual putting into effect. The difficulty seems to me a pleading one rather than a capacity question.

Lack of precision in pleading imputations

  1. The imputation at sub-para (i) is clearly unsatisfactory in its present form. The plaintiff has not identified what he says amounts, in the conduct portrayed in the article, to production of false information so as to enable the imputation at sub-para (i) to be delineated or distinguished from imputation at sub-para (c). As a further difficulty warranting striking out the imputation in sub-para (i) under r 171(b) of the Rules, the second defendant points out, with justice, that the expression “false information” itself is so vague as to be impossible to respond to. That is so. The imputation as pleaded is embarrassing and apt to prejudice a fair trial.  I will strike it out with leave to re-plead. 
  1. The second defendant next complained of the use of the word “unlawfully” in the imputation pleaded at 17(h). The adverb is capable of covering a multitude of sins. The plaintiff made it tolerably clear in argument that what he was wishing to convey was the deliberate payment of company funds to persons not entitled to them; but that is only one of the many meanings which might be conveyed by “unlawfully”. The defendant is entitled to know with precision what the imputation is so that it can plead. Again I will strike out imputation (h) with leave to replead.

Duplication of meanings

  1. The final complaint was of the series of imputations set out at paras 17 (e), (f) and (g). It became apparent from the plaintiff’s submissions that his concern with the imputations at paras 17(f) and (g) lay primarily in his indignation as to what he said was their falsity. However, false or not, those imputations add nothing to the imputation pleaded at para 17(e), which contains the real sting of that section of the article: the allegation that the plaintiff was responsible for the failure of Masterman Homes. Although the plaintiff may want to prove the contrary of what is contained in paras 17 (f) and (g) in demonstrating the falsity of what is contained in sub-para (e), they do not convey any defamatory meaning and are entirely unnecessary. The second defendant sought to have them struck out pursuant to s 171(b) of the Rules as tending to prejudice or delay the fair trial of the proceeding.  I should have thought they were better characterised under s 171(a) as disclosing no reasonable cause of action, but in any event I am satisfied that they ought to be struck out under both those heads.
  1. My orders are:

 

  1. That there be a preliminary determination pursuant to r 483(1) of the Uniform Civil Procedure Rules of the questions set out in the application.
  1. That those questions be answered as follows:

(a) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(a) of the statement of claim?

Yes.

(b) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(b) of the statement of claim?

Yes.

(c) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(h) of the statement of claim?

Yes.

(d) Are the words pleaded in paragraph 15 of the statement of claim capable of conveying the imputation pleaded in paragraph 17(i) of the statement of claim?

Yes.

  1. That the imputations pleaded in paragraphs 17 (h) and (i) of the statement of claim be struck out, with leave to replead.
  1. That the imputations pleaded in paragraphs 17 (f) and (g) of the statement of claim be struck out.
  1. I will hear the parties as to costs.

Footnotes

[1] Jones v Skelton [1963] SR (NSW) 644 at 650.

[2] Creek & Creek v O’Malley & Queensland Newspapers Pty Ltd [2001] QSC 122;  Bureya Pty Ltd v Mackay Printing & Publishing Co Pty Ltd [2002] QSC 359.

[3] [2000] QSC 252.

[4] [2003] QCA 461.

[5] (1982) 149 CLR 293.

[6] Per Mason J at 300-301.

[7] [1964] AC 234.

[8] Jones v Skelton [1963] SR (NSW) 644 at 650.

[9] Wake v John Fairfax & Sons Ltd [1973] 1 NSWLR 43 at 50 - 51.

[10] [1964] AC 234 per Lord Hodson at 275. 

Close

Editorial Notes

  • Published Case Name:

    Jackson-Knaggs v Queensland Building Services Authority & Anor

  • Shortened Case Name:

    Jackson-Knaggs v Queensland Building Services Authority

  • MNC:

    [2005] QSC 260

  • Court:

    QSC

  • Judge(s):

    Holmes J

  • Date:

    19 Sep 2005

Litigation History

No Litigation History

Appeal Status

No Status