N2884

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE AT WAIGANI]

WS 171 of 2002

BETWEEN:

POLICE & STATE SERVICES SAVINGS & LOANS SOCIETY
Plaintiff

AND:

PACIFIC STAR LIMITED trading as THE NATIONAL
First Defendant

AND:

SHAN FOOK YONG
Second Defendant

Waigani: Davani, .J
2005: 	6 June
29 July

Practise and procedure – Defamation – request for further particulars of Defence – breach of order to give particulars – application to strike out parts of Defence – court to exercise discretion – O. 8 R. 36 of National Court Rules

Defamation – defence of fair comment – particulars of defence must be provided – breach of order to give particulars of defence – application to strike out parts of Defence – court to exercise discretion – order to strike out rarely made

Cases and texts cited:
Barham v Huntingfield [1913] 2 KB 193;
Mark v Wilson Boyd [1939] 55 T.L.R. 699;
Cunningham – Howhie v Dimleby [1951] 1 KB 360;
Kemsley v Foot and others [1952] AC 345;
Turner v Dalgety and Co. Ltd (1952) 69 WN (NSW) 228;
Ellis v Grants (1970) 91 WN (NSW) 920;
Emmerton v University of Sydney [1972] 2 NSWR 663;
Fullam v Newcastle Chronicle (1977) 3 All ER 32;
Dare v Pulham (1982) 148 CLR;
Gatley on Libel and Slander 7th Edn. (1974);
Ritchies Supreme Court Procedure NSW;

Counsel:
A. MacDonald for the plaintiff/applicant
B. Frizzel for defendants

RULING

29th July, 2005

Davani .J:	The plaintiff moves by Notice of Motion filed by Posman Kua Aisi Lawyers on 16th May, 2005, which motion seeks orders that paragraphs 3, 4 and 5 of the defendant’s Defence be struck out, that the defendants pay the costs of the application and abridgement of time. The application is opposed by the defendants.

Mr MacDonald for the plaintiff submits that the application is moved pursuant to O. 8 R. 36 of the National Court Rules because the defendants have not complied with an order of this court made on 6th September, 2004, that the defendants serve within seven (7) days upon the plaintiff’s lawyers, further answers to questions 1 (a), (b) (c) and (d) to the plaintiffs Request for Particulars filed on 30th October, 2003. Ordinarily, a court would accede to this request, considering an order has been breached. But each case must be treated differently and courts must be cautious to strike out by properly exercising its discretion after consideration of the law and materials before it. I will further expound on this.

I have, in the exercise of my discretion, considered the law in relation to the provision of further particulars and the alternatives that are available to the court in the event the ordered particulars are not provided. I also set out below O. 8 R. 36 (1) (a) (b) of the National Court Rules.

"36.	Order for particulars

(1)	The court may, on terms, order a party to file and serve an any other party –

(a)	particulars of any claim, defence or other matters stated in his pleading, or in any affidavit ordered to stand as his pleading; or

(b)	a statement of the nature of the case on which he relies."

Background

To understand the background to this, it is necessary that I revert to the Statement of Claim. The plaintiffs plead defamation arising from a newspaper article published by the defendants, which article stated that the plaintiff did not have any funds in its account, amongst others. The relevant publication in issue is set out at paragraph 5 of the Statement of Claim and which reads;

"5.	On 24th April 2001, the second defendant printed and the first defendant falsely and maliciously published in the National Newspaper the following defamatory words.

"2 major Savings Societies bankrupt" and

"Two Societies ‘broke’".

‘2 major savings societies bankrupt’;

Two savings and loans societies are in deep financial trouble and are expected to be placed under receivership, a source told The National yesterday.

The source said the Bank of Papua New Guinea is concerned about the financial situation of the two societies. The PNG Teachers Savings and Loans Society and the Police Savings and Loans Society. Recently, contributors who have been given cheques by the societies for school fees and other advances, have been disappointed to learn that they could not cash their cheques because there was no money in the drawing account of the societies.

Two months ago, an NCDC employee who is a member of the Police Savings and Loan Society, walked in the newsroom of the National and complained that he could not cash a cheque of K150 at a PNGBC branch because he was told there was no money in the account he was to draw from.

The Bank of PNG has the powers to take over the running of these societies if they are found to be in financial trouble.

‘Two societies ‘broke’

It is understood that the BPNG has appointed accounting firm Deloite Touche Tohmatsu to oversee the affairs of the PNG Teachers Savings and Loan Society and act as its receiver.

The BPNG, whose Governor is also the Registrar of savings and loans societies in the country, has also suspended the Board and management of the Society, the source said.

Since the collapse of the PSA Savings and Loan Society, the BPNG has been closely monitoring such societies in the country, many of whom have a poor management record."

On 16th May, 2002, the first and second defendants filed their Defence. On 30th October, 2003, the plaintiff filed a Request for Further and Better Particulars. On 12th March, 2004, the defendants filed Answers to Request for Further Particulars. On 6th September, 2004, the plaintiffs obtained an order that the defendants serve upon them within seven (7) days, further answers to questions 1 (a) (b) (c) and (d) to the plaintiffs Request for Particulars filed on 30th October, 2003. The plaintiff submits that because the defendants have not complied with these orders, that paragraphs 3, 4 and 5 of the Defence should be struck out, the application now before me.

Application

The plaintiffs application is supported by the affidavit of Alexander MacDonald sworn on 10th May, 2005 and filed on 16th May, 2005. Mr MacDonald deposes that the answers to Request for Particulars served on him by the defendants lawyers, did not give the plaintiff the opportunity to investigate and determine whether the events published actually occurred. He deposes that the inadequate answers reveal that the defendants cannot bring any direct evidence at trial to prove the events it published actually occurred. (see par. 6 of Alexander MacDonald’s affidavit).

The defendants rely on the affidavit of one Brian Gomez sworn on 20th May, 2005. Mr Gomez, the first defendants Executive Editor, deposes that when one Paul Cain attended the offices of the first defendant, he was accompanied by two persons who refused to give their names. But they said they were also members or contributors of the plaintiff and that they had been unable to cash their cheques. He also deposes further that he believes that after further enquiry with Paul Cain, he would then be able to ascertain the names of the additional contributors.

The fundamental principle in relation to particulars in defamation, as in any other case, is that a party must be made aware of the nature of the case he is called upon to meet (see Dare v Pulham (1982) 148 CLR 658 at 664). The object of particulars is to save expense in preparing to meet a case which may never be put (see Turner v Dalgety and Co. Ltd ) (1952) 69 WN (NSW) 228 at 229). The purpose of particulars is to also make the parties case plain so that each side may know what the issues of fact are to be investigated at the hearing (Ellis v Grants (1970) 91 WN (NSW) 920 at 924, 925).

It is not a question of whether one party has adequate knowledge of the actual facts; it is a question of whether he had adequate knowledge of the actual fact and whether he has adequate knowledge of what the other party alleges are the facts, for that is the case he must meet (see Emmerton v University of Sydney [1972] 2 NSWR 663 at 605).

In this case, the defendants answers supplied earlier to the plaintiff, appear to be sparse as the plaintiffs request was lavish and the sufficiency of those answers is now before me for determination. What is now before me is common procedural practice amongst litigants, and that is to request the supply of various particulars – what particulars must be subscribed to the pleadings, what additional particulars must be supplied in answer to a request and what additional particulars may be sought in specific circumstances. The request for particulars is to enable the plaintiff to establish that at the time when the comment was made, such servant or agent did not have the opinion represented by the comment. In this case, the plaintiff seeks to identify the various persons who made the statements referred to in paragraph 5 of the Statement of Claim. In the case Fullam v Newcastle Chronicle [1977] 3 All ER 32, a similar situation arose where the plaintiff Priest brought an action against a newspaper in respect of an article written by a news reporter named as the second defendant and published by the newspaper named as the first defendant. The issue decided by the civil division of the court of appeal headed by Lord Denning, Mr Orr and Scarman LJJ and decided on 24th March, 1977, was whether the plaintiff was required to give particulars that would identify the readers of the newspaper with knowledge of the special circumstances, the special circumstances being that to persons having knowledge of spiritual circumstances, the words had a defamatory meaning..

The court in that case held that the plaintiff was required under the rules of court to particularize not only the special circumstances which were alleged to give rise to the innuendo, but also the identity of the readers of the paper who knew of those special circumstances, since the identity of those readers was a material fact on which the plaintiff relied on in support of his cause of action.

The court also held that it would only be readers of the article who would know either the date of birth of his (the plaintiffs) eldest child or the date of his marriage. They would have concluded that the plaintiff had fathered a child or married while he was still a priest. The court held that those readers would be rare and exceptional, having regard particularly to the area where the paper circulated. The court ordered that the plaintiff should give the relevant particulars identifying those readers and that unless such particulars were given, paragraph 5 of the Statement of Claim should be struck out. 

Which then takes me to the case before me and the pleadings sought to be struck out. In this case, paragraphs 3, 4, and 5 of the Defence of the first and second defendants, which are sought to be struck out, read as follows;

"3.	Further the defendants say the matters contained in the publication described in paragraph six of the statement of claim were true and it was for the public benefit that the publication should be made.

4.	Further or alternatively, the defendants say the publications referred to in paragraph six of the statement of claim:-

(a)	were a fair report and were made in good faith for the information of the public; and/or
(b)	so far as the publications consisted of comment, the comment was a fair comment.

5.	Further or alternatively, the defendants say that the publication referred to in paragraph six of the statement of claim were made in good faith:-

(a)	for the protection of the interests of the public; and/or
(b)	for the public; and/or
(c)	for the purpose of giving information to the persons to whom it was made with respect to some subject matter as to which such persons had, or were believed on reasonable grounds by the defendants to have, such an interest in knowing the truth as to make such conduct in making the publication reasonable under the circumstances; and/or
(d)	in the course of, or for the purpose of, the discussion of some subject of public interest, the public discussion of which was for the public benefit, and so far as the publication consisted of comment, the comment was fair."

In the plaintiffs Request for Particulars, it requests specifically at paragraph 1, the names of contributors, the details of the cheques, the dates the cheques were presented and the dates the cheques were dishonoured. I set these out in full;

"Kindly provide particulars of the facts and matter relied upon to establish the matter complained of was true and particulars of the following;

1.	(a)	the name of the contributors "who have been given cheques by the Societies for school fees and other advances" which cheques could not be cashed.

(b)	details of the above said cheques sufficient to identify each cheque including the drawer and the payee described on the said cheques.

(c)	the dates the above said cheques were presented.

(d)	the dates the above said cheques were dishonoured."

The case Fullam (supra) demonstrates that the Statement of Claim must contain a concise statement of the material fact on which the plaintiff relies, and should state accurately the date on which the words "complained of" were published and the names of the person or persons to whom the words were published. If the plaintiff knows or believes that the words have been published on more occasions and to more persons than he is at present aware of, he should state the names of the persons to whom he knows the words were published and should then continue in the statement of claim - "the plaintiff believes that the said words were also published to some other persons whom he cannot at present specify but he will rely upon the publication thereof to every person to whom he may discover the same to have been published." (see Barham v Huntingfield [1913] 2 KB 193 and Gatley on Libel and Slander 7th edn. (1974) par. 981 note 3). As Gatley (supra) states at par. 1094 (pg. 450), as to an application for particulars of a defence, that where the implication is a general one, and where the defendant has pleaded that the words are true in substance and fact but has not given any particulars in support of his plea, the plaintiff should immediately apply for such particulars or in default that the plea be struck out. (see also Note 14 and Marks v Wilson Boyd (1939) 55 T.L.R 699).

Par. 1094 of Gatley (supra) relates to particulars of justification. In my view, the defendants Defence, more particularly pars. 3, 4 and 5, relate to fair comment, good faith, public interest and justification. Par. 3, 4 and 5 of the defendants Defence are a pleading in the wide form. In that situation, Gatleys (supra) states that the plaintiff is entitled to particulars of the facts on which the comment is based. That the plaintiff must go further and give particulars of the facts on which the comments are based; i.e of the facts which go to the pitch and substance of the matter (see par. 1102 of Gatley (supra) and Cunningham – Howhie v Dimleby [1951] 1 KB 360 per Denning LJ).

It is also important that I revisit the effect of the plea of fair comment. S. 9 of the Defamation Act states that it is lawful to publish a fair comment and sets out the various circumstances under which fair comment can be pleaded. The defendant, also pleads a qualified protection of excuse (s. 11 of Defamation Act) and good faith (s. 12 of Defamation Act) As Gatley states at par. 719, if the facts upon which the comment purports to be made do not exist, the defence of fair comment must fail. Comments based on matters of opinion only, which may or may not be true, equally affords no defence. (par. 719 of Gatley (supra)). Again Gatley (supra) states at par. 719 that in order to give room for the plea of fair comment, the facts must be truly stated. If the facts upon which the comment purports to be made do not exist, the foundation of the plea fails. The comment must not misstate facts, because a comment cannot be fair which is built on facts which are not truly stated. If the defendant makes a misstatement of any of the facts upon which he comments, he at once negatives the possibility of his comments being fair. 

In this case, the comment made as pleaded in the statement of claim was by certain persons. In a case which decided on whether the plea of fair comment should stand, Kemsley v Foot and others [1952] AC 345, the House of Lords on hearing an appeal from the court of appeal in relation to an application to strike out defence on the ground that it could not succeed because no facts appeared in the article to support the statement in the headline, the House of Lords held that in order to admit the plea of fair comment it was unnecessary that the facts on which the comment was based be stated in the alleged liabel. It held that a sufficient substratum of fact was to be implied from the word viz that the plaintiff was responsible for the press of which he was the active proprietor. The criticism in that case was that the press was low and any facts sufficient to justify the statement would entitle the defendants to succeed. Failure to establish all facts given in the particulars of defence would not necessarily disentitle them to succeed. 

The House of Lords held that the relevant questions to be determined were;

1.	Is the subject matter indicated with sufficient clarity to justify comment being made?
and
2.	Is the comment actually made such as a honest, though possibly prejudiced, men might make?

Lord Porter held in the Court of Appeal that newspapers, being submitted to the public, are a proper subject matter of comment in the same way as literal works and the comment on them, in order to be fair, need not be confined to their literal content.

The House of Lords affirmed the decision of the Court of Appeal. 

Conclusion

My reading of the common law confirms there to be two positions taken by the courts;

1.	Where a defence of fair comment is pleaded, that respondents shall supply particulars where the facts upon which the comment/s purports to be made, do not exist.

2.	But if the subject matter in the statement of claim is stated with sufficient clarity and the comments made (by persons) are honest, although prejudiced, then particulars need not be supplied.

Having said that, I am cognizant of Mr Frizzel’s submission on the ‘newspaper rule’ but note that this principle was not properly argued before me because Mr Frizzel only handed up his written submissions in court. Mr MacDonald was then not in a position to respond to submissions on the ‘newspaper rule’ having only just received the submissions in court. So I will not consider those submissions in great detail, noting only that "the rule is not a rule of law; it is a rule of practice which applies in those particular cases." (see pg. 4 & 5 par. 29 of Warner Shand Lawyer’s submissions and Attorney General v Mulholland and Attorney General v Foster 2 QB [1963] at 477 per Lord Denning M.R) "…and can be departed from in the interests of justice". (see pg. 5 par. 33 of Warner Shand’s written submissions and John Fairfax & Sons v Cojuangco [1988] 165 CLR 346 at 354).

In this case, I am not bound by the ‘newspaper rule’. But I am bound by rules of practice in relation to the giving of further particulars. Again, upon consideration of submissions by both counsel, I note that at par. 1 of its Defence, the defendant admits pars. 1 to 5 inclusive, of the statement of claim. The defendant in effect accepts what is pleaded in par. 5 of the Statement of Claim, the paragraph that is the subject of this application. The effect of this acceptance I interpret to be that various or certain contributors did present cheques to be cashed but which could not be cashed because there was no money in the plaintiff’s account. In a situation such as this, note 14 of Gatleys (supra) and Marks v Wilson Boyd (supra) provide the basis for my ruling. That where the defendant has pleaded that the words are true in substance and in fact, but has not given any particulars in support of his plea, that the plaintiff should immediately apply for such particulars, or in default, that the plea will be struck out. Which of course means effectively that in light of the existing admissions, that the defendant must give particulars of the "contributors". (re par. 5 of statement of claim).

My findings are also reinforced by the fact that the defendants have failed or refused to comply with the National Court’s orders of 6th September, 2004 that;

"The Defendants within seven (7) days serve on the plaintiffs lawyers further answers to questions (1) (a) (b) (c) to the Plaintiffs Request For Particulars filed on 30 October 2003 in accordance with Order 8 Rule 36…"

Paragraphs 3, 4 and 5 of the Defence should rightly be struck out. But the defendants have stated that they will comply with the orders, but only after further enquiries with their sources. In saying that, I refer to the affidavit of Brian Gomez sworn on 20th May, 2005, where he deposed that "I believe after further enquiring of Paul Cain, I will ascertain the names of the additional contributors" (see par. 5). The party seeking these additional particulars must accept that these avenues are exhausted before the extreme step of striking out is taken. I say this relying on Ritchies NSW Supreme Court Procedure, par. 16.7.5 and rule 16.7, the rule on which our O. 8 R. 36 is formulated and which paragraph states:

"While the court may order that the action be dismissed or that the defence be struck out and the plaintiff be at liberty to enter judgment, if the particulars are not supplied at a certain date, such orders are nowadays rarely made and at all generally only on a subsequent motion when the first order has not been obeyed. If made, the appropriate form of order is that the proceedings be dismissed, or that the plaintiff be at liberty to enter judgment, unless with a specified time, the order for particulars is complied with; Davey v Bentinck [1893] 1 Q.B IBS; Nixon v W. Phelan & Son Pty Ltd [1959] VR. Even where there is default in compliance with a direction contained in such an order (and as a consequence the order for dismissal of proceedings takes effect), the court retains a discretionary power to extend time for compliance pursuant to Pt 2 R. 3…"

Therefore, in the exercise of my discretion and upon consideration of the authorities and law referred to above, together with the affidavit of Brian Gomez sworn on 20th May, 2005 by Warner Shand Lawyers, that I will not strike out parts of the Defence but will extend the period within which the defendant should provide these particulars, failing which paragraphs 3, 4 and 5 of the Defence will stand as having been struck out and that the plaintiff will be at liberty to enter judgment.

My formal orders are;

1.	That the orders of 6th September, 2004 are extended for a further fourteen (14) days;

2.	That the defendant shall within fourteen (14) days referred to in paragraph one (1) hereof, serve on the plaintiff’s lawyers, further answers to questions (1) (a), (b) (c) and (d) to the plaintiffs Request For Particulars filed on 30th October, 2003;

3.	That in the event the further particulars referred to in paragraph 2 are not supplied within the prescribed time period, that paragraphs 3, 4 and 5 of the Defence will stand as having been struck out and that the plaintiff will be at liberty to enter judgment; 

4.	Time is abridged to time of settlement to take place forthwith;

5.	The defendants shall pay the plaintiffs costs of this application.

_____________________________________________________

Lawyer for the plaintiff/applicant	:	Posman Kua Aisi Lawyers
Lawyer for the defendants		:	Warner Shand Lawyers