Divteed Pty Ltd v Urban [2000] QDC 7

DISTRICT COURT OF QUEENSLAND CITATION: Divteed P/L v Urban [2000] QDC 007 PARTIES: DIVTEED PTY LTD (Plaintiff) v PAUL JOHN URBAN (Defendant) FILE NO/S: 5258/98 DIVISION: PROCEEDING: ORIGINATING COURT: Brisbane DELIVERED ON: 11th February, 2000 DELIVERED AT: Brisbane HEARING DATE: 7th February, 2000 JUDGE: M.W. Forde, D.C.J. ORDER: Judgment for Plaintiff CATCHWORDS: DEFAMATION – s.20 Defamation Act – Australian Broadcasting Corporation v. Comalco Ltd (1986) 12 FCR 510; Bargold Pty Ltd v Mirror Newspapers Ltd & Anor (1981) 1 NSWLR 9 at 11; South Hettons Coal Company Limited v. North Eastern News Association Limited (1894) 1 QB 133 at 141, 148. COUNSEL: Mr R Peterson for the Plaintiff Mr P Favell for the Defendant SOLICITORS: Walker Smith Breen for the Plaintiff Irish Hughes for the Defendant Introduction [1] The plaintiff in this action, Divteed Pty. Ltd., sues the defendant, Paul John Urban, for damages for defamation. The claim for damages pursuant to s.82 of the Trade Practices Act 1974 has been abandoned. The defendant has abandoned its further amended defence filed on 20th January, 2000. It raised for the first time the defence of qualified protection under s.16 of the Defamation Act 1889. In response to this the plaintiff amended its Statement of Claim to plead aggravated damages. Leave was granted to so amend. In the course of the trial, the plaintiff=s counsel accepted -- 1 of 7 -- 2 that the claim for aggravated damages could not be made by a corporation, as a claim for aggravated damages relates to increased injury to a plaintiff’s feelings. Such damages are not available to a corporation: Australian Broadcasting Corporation v. Comalco Ltd. (1986) 12 FCR 510. Therefore, the only issues in the plaintiff=s case was whether words alleged to have been spoken by the defendant to Leon Rex Howe on 10th December, 1998 were defamatory, and if so, to assess the damages in the absence of any special or general damages being proved where the words spoken were likely to injure the plaintiff in respect of its business. Nature of words spoken [2] Paragraph 2 of the Statement of Claim alleges: “On 10 December, 1998 at or about 10.52 am EDST in a telephone conversation the Defendant spoke and published of and concerning the Plaintiff to one, Leon Howe, these words: “They (referring to the Plaintiff) are on the bones of their arse”; and, “If they (referring to the Plaintiff) did (referring to the Plaintiff having purchased printers from the company of which Howe is general manager) they must have saved up their money to do it.” [3] Consequent upon the delivery of a Notice to Admit Facts, the defendant admitted the following as evidenced by Exhibit 4: “1. The Defendant admits to ringing Leon Howe between 10 and 11 o=clock in the morning on the 10th December, 1998. 2. The Defendant is unaware if Mr Howe is the Managing Director of Star Micronics”. [4] It was conceded by counsel for the defendant that if the words ‘they are on the bones of their arse’ were used in relation to the plaintiff then such words were capable of being defamatory. The words in their ordinary meaning, I find, convey the imputation that the plaintiff was financially unsound, not a good risk to do business with, and could not be trusted to pay its business debts: Bargold Pty Ltd v. Mirror Newspapers Ltd and Anor. (1981) 1 NSWLR 9 at 11. -- 2 of 7 -- 3 Background [5] The defendant was formerly employed by the plaintiff. He held the positions of a salesman, sales manager, general manager and he also held shares in the plaintiff company. Mr Peter Anthony Sneddon gave evidence that the defendant was a partner in the business. The defendant did not think that he was. The defendant was employed for some eight (8) years by the plaintiff and left the business under less than ideal circumstances. In fact, the defendant had issued a statutory demand for wages due, was involved in a dispute over his share holdings, and communicated with the Superannuation Complaints Tribunal in relation to his superannuation. The defendant was unable to say if the statutory demand issue had been resolved. His uncertainty in this regard, and also his status in the plaintiff’s business, did not lead one to accept that he was being frank with the court. He left the plaintiff and set up his own business, IT Experts Brisbane, which was involved in a similar field to the plaintiff, that is, selling computer hardware, software, and providing solutions for different organisations. [6] The plaintiff had had dealings with Star Micronics for some years. In particular, the plaintiff had supplied Star Micronics’ printers to the Queensland Education Department. In its dealings with Star Micronics, the plaintiff received a discount on its purchases, either as a preferred supplier or on a tender basis. The latter involved a recognition by Star Micronics that in potentially larger contracts with a government department, a successful tenderer would order more items and a discount was therefore justifiable. I accept the evidence of Mr Howe in this respect. He stated that his company, Star Micronics was supplying the plaintiff with SB216 Docket printers. [7] Mr Howe stated that he received a telephone call from the defendant on 10th December, 1998. He had not spoken to the defendant or Mr Sneddon previously. He gave evidence that he received the call at about 10.52 a.m. The defendant informed him that he was a former employee of the plaintiff, that he had been responsible for gaining the preferred status of this particular contract, and that he had “some very good friends” within the Education Department and SEQEB. Further, the defendant stated to Mr Howe that Star Micronics should “deal with him -- 3 of 7 -- 4 for the supply of printers, and that he would have the particular issue of these printers transferred to a company or companies that he was associated with.” The defendant was trying to get a better purchase price on the printers by contacting Mr Howe directly. [8] Mr Howe further stated that the defendant said that the plaintiff had not purchased any printers off Star Micronics but Mr Howe told the defendant that the plaintiff had purchased quite a number. The defendant said that Mr Howe said that they had purchased a “shitload”. This was not disputed by Mr Howe. I am satisfied that Mr Howe confirmed with the defendant that the plaintiff was continuing to purchase printers. The defendant is alleged by Mr Howe to have said in response that “they must have saved up their purchases to do this.” Mr Howe attempted to clarify this and an objection was made. He went on to say that the defendant said “they must have saved up to buy the printers”. The defendant is then alleged to have said “they’re on the bones of their arse and you really should deal with us. They are pretty well bankrupt.” The latter phrase was not pleaded but Mr Howe gave evidence that he thought the words were that the plaintiff was “down the tube”. He made no note of the conversation. Mr Howe gave further evidence that the defendant “held a gun to his head” and threatened to go to Epson for a better deal. [9] At that time the plaintiff was on a type of cash on delivery basis, which meant that upon the delivery of goods, a cheque had to be handed over. Mr Howe had checked his computer records whilst talking to the defendant. He then rang his Brisbane Manager, Reece Annette, and confirmed that the plaintiff was a “good account and that any cheques that they issued would in fact be cashed.” Mr Howe then rang Mr Sneddon within fifteen (15) minutes and told him of the conversation. Mr Sneddon made notes of the conversation which made no mention that the defendant had said that the plaintiff was “on its arse”. I accept his explanation that he was not a solicitor and did not record the conversation word for word. It did record that “we had to save our money to buy some (printers).” It also recorded that Mr Howe asked if he should ring Alan Bourne. Mr Bourne was employed by the Education Department. -- 4 of 7 -- 5 [10] Mr Howe was concerned that the business relationship with the Department could suffer if the plaintiff was in financial trouble. He said that he regarded the statement by the defendant as a serious matter. If he had not received such a glowing report from Mr Annette then he would have had no option but to stop supply. After weighing up the situation, his company has continued to supply the plaintiff. I accept generally the evidence of Mr Howe in relation to the conversations with the defendant. If the defendant had not reflected adversely on the creditworthiness of the plaintiff, Mr Howe would have had no reason to verify same or be concerned about the relationship with the Education Department. [11] I find that the words used by the defendant and as pleaded, meant that the plaintiff was in financial difficulty, was not a good risk to do business with and could not be trusted to pay its business debts and so were defamatory of the plaintiff. Defences [12] The defendant denied that he made the statements alleged in the Statement of Claim. It has been indicated that the evidence of Mr Howe is accepted generally. The defendant was not an impressive witness. Apart from his uncertainty in relation to his interest in the business, his demeanour and hesitancy in giving answers were not such as to allow much credit to be given to his testimony. Evidence was led from his wife, Bonny Urban. Initially, her evidence was not opened even though she said she knew last Friday that she was to give evidence. After the defendant had completed his evidence, Mrs Urban’s evidence was opened and she was called. In one respect, she supported her husband’s testimony that whilst on the telephone on 10th December, 1998, she heard him say “they must have saved up their orders then”. She did not hear the defendant say that “they (the plaintiff) were on the bones of their arse”. She said that her husband recorded the conversation in his diary. In fact in the days following, the defendant went through his diary notes and they were both reading them over. [13] The diary notes were never produced. No explanation was offered as to what may have happened to them. They were not discovered. Either Mrs Urban made up the story or the defendant was not being candid with the court. In any event, it was -- 5 of 7 -- 6 another matter which reflected adversely on the reliability of the defence case. Mrs Urban had ongoing problems with the plaintiff in relation to superannuation, and I find that this may have coloured her evidence. She did confirm that her husband was upset during the conversation with Mr Howe, as he was trying to get the price of a Star printer similar to that given to the plaintiff. [14] Section 20 of the Defamation Act 1889 was also relied upon by the defendant: “In any case other than of words intended to be read, it is a good defence to an action for defamation, or a prosecution for publishing defamatory matter, to prove that the publication was made on an occasion and under circumstances when the person defamed was not likely to be injured thereby”. [15] In this respect, the following findings are made: 1. The defamatory statements were made in a calculated manner 2. The defendant was attempting to advance his own commercial interests. 3. Mr Howe was so concerned that he had to verify the creditworthiness of the plaintiff before he could be satisfied as to its financial viability. 4. Given the “fickle” nature of the industry as described by Mr Howe, the comments were likely to injure the reputation of the plaintiff when made: see the discussion by the learned authors of Duncan & Neill on Defamation second edition para 20.01. They discuss libel but the comments on what is or what is not trivial are of some assistance. Damages [16] A trading company may bring proceedings for defamation on the basis of a publication which has the capacity to injure its trading or business reputation without proof of special damage: South Hetton Coal Company Limited v. North Eastern News Association Limited (1894) 1 QB 133 at 141,148. Kay J. added at P.148: “Of course, if there be no such evidence the damages given will probably be small.” -- 6 of 7 -- 7 [17] In Australian Broadcasting Corporation v. Comalco Ltd (1986) 12 FCR 510 at 604, Pincus J. remarked that no evidence had been called to prove that any real damage had been done. His Honour went on to assess damages on the basis of the “mere risk of such loss”. A similar approach was adopted by Neaves J. The defamation was published on a Four Corners programme and $100,000.00 was awarded. [18] Two other decisions were referred to by counsel for the plaintiff. In McMahon and Hawkley Pty Ltd v. Markwell Plaint 2440/95 McMurdo D.C.J., as she then was, awarded some $20,000.00 to a company running a restaurant. The defendant had been defaming its principal who was an architect. It was found that the nature of the defamation had the capacity to turn diners away. In the other case of Parry Holdings Pty Ltd v. Mike Carney Motors Pty Ltd Plaint 288/92 a vehicle dealer defamed a competitor in a newspaper. An apology was printed but $15,000.00 was awarded. [19] The present case is less serious for the following reasons: 1. The publication by the defendant was to one person on the telephone. 2. Mr Howe immediately checked on the creditworthiness of the plaintiff 3. His manager in Brisbane provided the necessary confirmation that the plaintiff was reliable. 4. Star Micronics continued to deal with the plaintiff [20] In the circumstances of this case, I assess damages at $1,000.00. Orders 1. Judgment for the plaintiff against the defendant in the sum of $1,000.00 2. It is ordered that the defendant do pay the plaintiff=s costs of and incidental to the action including reserve costs, if any, to be assessed on the appropriate Magistrates Court scale up until 15 January 1999, and thereafter the plaintiff do pay the defendant’s costs on the standard basis to be assessed. -- 7 of 7 --