Queensland Judgments
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Mizikovsky v Berkley[2021] QSC 294

SUPREME COURT OF QUEENSLAND

CITATION:

Mizikovsky v Berkley & Ors [2021] QSC 294

PARTIES:

LEV MIZIKOVSKY

(plaintiff)

v

LEIGH GEORGE BERKLEY

(first defendant)

and

MICHAEL KNOX

(second defendant)

and

ANTHONY RIVAS

(third defendant)

and

CATHERINE MARY McDOWELL

(fourth defendant)

and

SANDRA CHRISTINE BIRKENSLEIGH

(fifth defendant)

and

KRISTINE MAY

(sixth defendant)

and

COLLECTION HOUSE LIMITED (ACN 010 230 716)

(seventh defendant)

and

ASX LIMITED (ACN 008 624 691)

(eighth defendant)

and

ROWLAND PTY LTD (ACN 011 033 364)

(ninth defendant)

FILE NO:

2827 of 2019

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

19 November 2021

DELIVERED AT:

Brisbane

HEARING DATE:

17 September 2021

JUDGE:

Dalton J

ORDER:

  1. Strike out paragraphs 9(c), 10 and 12 of the amended statement of claim filed 11 November 2019.
  2. Grant leave to the plaintiff to replead.
  3. Otherwise dismiss the application filed 10 August 2021.

CATCHWORDS:

DEFAMATION – DAMAGES – SEPCIAL DAMAGES – where the ninth defendant applied to have the plaintiff’s pleaded case as to special damages struck out – where the plaintiff’s damages case alleged that the plaintiff was a high profile director of four public companies listed on the ASX – where the plaintiff owned the beneficial interest in several private companies which owned shares in the public companies – where the plaintiff alleged that damage caused to the plaintiff’s reputation as a result of defamatory comments damaged the reputation of the public companies and the shareholding of the private companies and consequently the plaintiff’s personal fortune

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT –  where the damages case was not properly pleaded in terms of causation – where the subparagraphs of the particulars of loss and damage should have been pleaded as separate numbered allegations – where the pleaded case as to special damages was struck out – where the paragraphs relating to quantum of loss were struck out as the basis of the monetary amounts claimed from each defendant was not properly articulated – leave to replead

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the ninth defendant sought to have the plaintiff’s special or compensatory damages claim dismissed – where the ninth defendant submitted that the plaintiff put on no affidavit material to prove this part of the claim

Collins Stewart Ltd & Anor v The Financial Times Ltd [2004] EWHC 2337 (QB), considered

Farkas v R (2014) 243 A Crim R 388, cited

Haggarty & Ors v Wood (No 2) [2015] QSC 244, considered

Merker & Ors v Merker & Anor [2021] QSC 285, considered

COUNSEL:

N H Ferrett QC, with H L Blattman, for the applicant/ninth defendant

R J Anderson QC, with M R Wilkinson, for the respondent/plaintiff

SOLICITORS:

DLA Piper for the applicant/ninth defendant

Sparke Helmore Lawyers for the respondent/plaintiff

  1. [1]
    This is an application by the ninth defendant for summary judgment on part of the plaintiff’s claim.  In the alternative the ninth defendant asks that that part of the claim is struck out.
  2. [2]
    The proceeding is one for defamation and it is an unusual claim.  It centres on an announcement made by the seventh defendant, a company named Collection House Limited.  It is alleged that on about 20 November 2018 Collection House emailed to its shareholders; uploaded to its website, and uploaded to the ASX Market Announcements Platform for publication on the ASX website, an announcement which was defamatory of the plaintiff.  The announcement was headed, “Collection House responds to shareholder’s latest false claims”.  The announcement begins by saying that the Board of Collection House had been made aware by shareholders that the plaintiff had written a letter to shareholders of Collection House, seeking to garner support for resolutions he intended to propose at the Annual General Meeting, which was to be held on 29 November 2018.  The announcement said, “Consistent with Mr Mizikovsky’s past behaviour and statements, the letter is littered with inaccuracies and misstatements.”  It then, over the course of two-and-a-half pages, gave Collection House’s views as to Mr Mizikovsky’s statements.  The defamatory meaning of the announcement was pleaded to be that, “In the course of an opportunistic, self-serving attempt to take control of Collection House, the plaintiff had repeatedly lied to its shareholders about the company’s performance and administration.”
  3. [3]
    The first to fifth defendants are the directors of Collection House who it is alleged were responsible for writing and publishing the announcement.  The sixth defendant is Collection House’s company secretary who it is alleged also wrote and published the announcement.  The eighth defendant, ASX Limited, published the announcement on its website after it was uploaded to its Market Announcements Platform, and the ninth defendant is a public relations consultant which the plaintiff alleges wrote the announcement and caused it to be published.
  4. [4]
    This application attacks that part of the pleading by which the plaintiff alleges injury resulting from the publication, in particular, paragraph 9(c).  It is convenient to set out the whole of paragraphs 9, 10 and 12:

“9. By reason of the publication of the defamatory meaning, the plaintiff:

  1. (a)
    has had his reputation badly injured;
  1. (b)
    has suffered and will continue to suffer hurt and embarrassment; and
  1. (c)
    has suffered and will continue to suffer loss and damage.

PARTICULARS OF LOSS AND DAMAGE

  1. (a)
    the plaintiff has a high profile in communities Australia wide, by virtue of being the founder of Tamawood homes;
  1. (b)
    the plaintiff is, and was at the time of the Announcement, a director of Tamawood Ltd, Astivita Ltd, Advance Nanotec Ltd, and Senterprisys Ltd, the shares in which are traded on the Australian and/or National Stock Exchange (the public companies);
  1. (c)
    the plaintiff is a director of and also owns the beneficial interest in the shares in Politik Pty Ltd, Skylevi Pty Ltd, Rainrose Pty Ltd, Ankla Pty Ltd and Sunstar Pty Ltd (collectively the privately owned companies);
  1. (d)
    at the time of the Announcement, the privately owned companies held a significant number of shares in the public companies, such that at that date, the value of the shares so owned was approximately $75,000,000;
  1. (e)
    the reputation of a public company (an intangible asset) is damaged when the reputation of a director is damaged, particularly when that director has a high profile in the community, and the defamatory allegation is of lying to shareholders;
  1. (f)
    damaging the reputation of a public company damages its market value;
  1. (g)
    the publication of the defamatory meaning here damaged the plaintiff’s reputation as a businessman, and thereby the market value of the public companies;
  1. (h)
    damage to the market value of the public companies reduced the value of the shareholding in them held by the privately owned companies, and ultimately, thereby, the plaintiff’s personal fortune;
  1. (i)
    it is not reasonably possible to directly and precisely measure the financial loss suffered by the plaintiff in the circumstances, given the intangible nature of the damage caused to the public companies, the fact the extent of the damage will never be capable of being meaningfully sampled and understood, the irreparability of the damage to the public companies whilever the plaintiff is associated with their management, and the liquidity of the shares in the public companies;
  1. (j)
    the defendants, however, ought reasonably to have known (if in fact they did not know), that the matters set out above, or matters not dissimilar to them, would be a foreseeable consequence of the publication of the Announcement;
  1. (k)
    doing the best that can be done in the circumstances, the loss and damage suffered by the plaintiff is estimated to be, in the case of the publications by the first to sixth and/or seventh defendants $2,000,000, and in the case of the publications by the eighth defendant, $1,000,000, being a measure of the longterm damage to the share price of the public companies as they rest in the plaintiff’s hands

10. The plaintiff claims compensatory damages for defamation in the amount of $400,000 from each of the first to seventh, ninth, and then eighth defendant to:

  1. (a)
    vindicate his reputation;
  1. (b)
    compensate him for the distress and embarrassment caused by the publication of the defamatory meaning;
  1. (c)
    reflect the extent of publication, and that the defamatory meaning may spread, in which respect the plaintiff relies on the ordinary grapevine effect, the ease with which the publication may be shared and thereby republished online and the natural and probable consequence that the circumstances of publication would result in further publication of the defamatory meaning or its substance or effect;
  1. (d)
    be sufficient to convince a person to whom the defamatory meaning was published, or republished, of the baselessness of it;
  1. (e)
    provide reparation for the damage to his reputation; and
  1. (f)
    compensate him for the loss and damage referred to in paragraph 9(c) above.

12. Further, the harm suffered by the plaintiff has been aggravated by the following matters (and the plaintiff thereby claims against the first to seventh, and then eighth and ninth defendants, aggravated compensatory damages in the further amount of $400,000):

  1. (a)
    his knowledge that the defamatory meaning is untrue;
  1. (b)
    his knowledge that the defendants published the defamatory meaning in the circumstances set out above;
  1. (c)
    the defendants’ unjustifiable failure to apologise for or retract the defamatory meaning; and
  1. (d)
    the defendants’ lack of bona fides, as evidenced by the matters set out in paragraph 11 above.

(and the plaintiff reserves the right to rely at trial upon such other matters as may arise in aggravation of the harm suffered by him)”

  1. [5]
    The claimed relief is as follows:

“…

2. As against the first to seventh defendants and ninth defendant, damages for defamation (whether general damages, or general and special damages), including aggravated damages, in the sum of $2,800,000.

3. As against the eighth defendant, damages for defamation (whether general damages, or general and special damages), including aggravated damages, in the sum of $1,800,000.

…”

  1. [6]
    The ninth defendant says that at paragraphs 9(a) and (b) of the amended statement of claim the plaintiff makes conventional claims for injury to reputation and hurt feelings.  Its claim concerns paragraph 9(c), which is a pleading of special damages.
  2. [7]
    The nature of the special damages claim is contained under the heading “Particulars of Loss and Damage”.  The first thing to note is that, as a matter of pleading, these sub-paragraphs are not particulars of loss and damage, but are material facts relied upon to make the special damages case.  This is undesirable because a party is not obliged to plead to particulars.  The second point to note about this list of sub-paragraphs is that they do not adequately plead the damages case, particularly the causation aspects of it.
  3. [8]
    From these so-called particulars one can discern that the plaintiff’s case is based upon him having a “high profile” in Australia and being the director of four named companies, all of which are public companies traded on the Australian Stock Exchange.  As well, the plaintiff is a director of, and owns the beneficial interest in, shares of several private companies.  These private companies own shares in the four public companies, valued at about $75 million as at the date of publication of the announcement.  The plaintiff wishes to assert that the damage to his reputation damaged the reputation of the four public companies of which he is a director such that the market value of those public companies was damaged.  This in turn reduced the value of the shares in the plaintiff’s private companies and thereby “the plaintiff’s personal fortune”.  It is pleaded that this loss was a foreseeable consequence of the publication.  It is pleaded that while it was not possible to “directly and precisely measure” the financial loss suffered by the plaintiff in these circumstances, it is estimated to be, “in the case of the publications by the first to sixth and/or seventh defendants $2,000,000, and in the case of the publications by the eighth defendant, $1,000,000 …”. 
  4. [9]
    In Haggarty & Ors v Wood (No 2)[1] Jackson J discussed the relatively recent history of the rule allowing a defendant to apply for summary judgment and the relief which might have been sought before that rule, namely striking out or demurrer.  The latter application no longer exists, but it is possible that a summary judgment application can be based on the contention that, even if everything the plaintiff pleads is true, there is still no real chance of success for the proceeding, and there is no need for a trial.  The ninth defendant does not seek to make that type of submission here. 
  5. [10]
    The ninth defendant’s submission here was that, it having made an application for summary judgment, the plaintiff put on no affidavit material to prove the various matters which it would need to prove in order to make out the assertions contained in the particulars to paragraph 9(c) of the amended statement of claim.  The submission was that the plaintiff asked the Court to presume things in his favour as matters of common experience, rather than require him to establish those things by evidence.  In this category was the plaintiff’s pleading that the reputation of a public company is damaged if the reputation of a director is damaged; damaging the reputation of a public company damages its market value; that the plaintiff has a high public profile; that his profile is such that damage to his reputation means damage to the reputation of his companies, and that damage to the reputation of his companies caused the share prices of those companies to fall.  Further, the defendant relied upon the case of Collins Stewart Ltd & Anor v The Financial Times Ltd[2] for statements that referred to the difficulty of proving a correlation between a public company’s reputation and its share price.  That case also distinguishes between the market value of a company and the price at which its shares trade.
  6. [11]
    I agree that the matters identified by the ninth defendant are matters which the Court is not able to assume without proof.[3]  They will need to be proved.
  7. [12]
    I do not accept the submission that it is a basis for summary judgment that, despite having notice of the summary judgment application, the plaintiff has not provided any evidence to prove these facts.  A summary judgment application is not, in effect, a device to call upon the plaintiff to put on its evidence prior to a trial.  There are cases where, on a summary judgment application, it is appropriate for the Court to carefully scrutinise the factual material which a party has to support its claim.  Haggarty & Ors v Wood (No 2) (above) was such a case.  The plaintiff alleged an equitable estoppel, but both the pleading and the affidavit evidence showed unconscionable conduct on the part of someone other than the defendant.  In Merker & Ors v Merker & Anor,[4] a recent decision of my own, the defendants succeeded in obtaining summary judgment on part of the plaintiffs’ claim by proving that they were the registered proprietor of land and that the plaintiffs had no personal equity which amounted to an exception to the indefeasibility of their title.  In contrast here, the ninth defendant does not put any factual evidence before the Court to contradict the allegations made by the plaintiff.  It submits that proving the matters pleaded will be very difficult, and I understand why that submission is made.  However, it does not assert that they could not be proved or, that if they were proved, they would not amount to a good case in the eyes of the law.
  8. [13]
    As to the alternative application to strike out parts of the pleading, I think that the pleaded case as to special damage is so poor that it should be struck out as tending to embarrass or delay a fair trial of this proceeding.  As noted above, the material contained under the heading “Particulars of Loss and Damage” is not particulars of loss and damage.  It is an inadequately short sketch of the facts which the plaintiff relies upon to support a complex causation case as to its having suffered special damage indirectly through a reduction in the value of its shareholdings in certain companies.  The sub-paragraphs contain conclusory statements but do not plead the facts from which the conclusions are to be drawn.  Each one of the sub-paragraphs under this heading should be a separate numbered allegation in the pleading itself, several of these allegations need to be pleaded more fully and more precisely, and several also require proper particulars.  Further, the pleading will need to state clearly the time or times at which the plaintiff says loss should be assessed which will involve a pleading as to when the plaintiff says each of the four public companies’ shares fell, and then when, and why, it is said that the value of the shares in the privately owned companies fell.
  9. [14]
    Further, it was accepted by counsel for the plaintiff that the pleading of the quantum of loss at particular (k), paragraph 10 and paragraph 12 of the pleading was unclear.  The mathematics raises questions as to whether the loss is claimed against the defendants jointly or severally.  It is not clear whether the subject of paragraphs 10 and 12 are general damages, aggravated damages, or special damages.

Disposition

  1. [15]
    I will strike out paragraph 9(c) of the current pleading and the particulars to it.  For reasons explained above, I think that paragraphs 10 and 12 of the pleading should also be struck out so that the pleader can properly articulate the basis of the monetary amounts the plaintiff claims from each of the defendants.  I will give leave to replead as there is no suggestion that there is not an arguable case to be pleaded, nor was there any contention that the plaintiff had delayed, or otherwise behaved in a way which might mean that there should be no leave to replead.  I will hear the parties as to a time for repleading, and as to costs.

Footnotes

[1] [2015] QSC 244.

[2] [2004] EWHC 2337 (QB).

[3] See Farkas v R (2014) 243 A Crim R 388, 402.

[4] [2021] QSC 285.

Close

Editorial Notes

  • Published Case Name:

    Mizikovsky v Berkley & Ors

  • Shortened Case Name:

    Mizikovsky v Berkley

  • MNC:

    [2021] QSC 294

  • Court:

    QSC

  • Judge(s):

    Dalton J

  • Date:

    19 Nov 2021

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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