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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 1203 OF 2011
FRANCIS CHIBELLE
Plaintiff
V
JACK MAFU
First Defendant
MATHEW FUNTENGIM, TIONG KARIAM, MARTHA TABI, MATHEW DUPKUT, MARK AWANSAKAM & NANCY FRED
Second Defendants
DARKS ANWAN, KAIOMENA, SIKAIN MAI, GILBERT FAMITEY, WILSON BAYAL, MARK AWANS, SIASSI AHENG, MARY TABI, MARY AWOK, TIKIYOK, MAX FIRANA,
KERRY UNALUP, MATHIAS BITEL, SEMIS, MATHEW D, PHILIP W, ROY BRIAN, NEKIE NEGIAL, BRYAN T, SIMON SOL, NELSON TAPINENG, OBERT FAWOOL,
GIBSON TAMALIN, MARK MULI, PETER MUSUM, WAM IPSIM & ALEXOUS
Third Defendants
PETER AMIRENG
Fourth Defendant
Waigani: Cannings J
2014: 20 October, 17 December,
2015: 24 March
DEFAMATION – whether correspondence critical of a company manager's performance gave rise to liability in defamation – whether correspondence contained defamatory imputations – defences of public interest, truth and good faith
The plaintiff was general manager of a landowner company that did a lot of business with a mining company. The first defendant held himself out as interim chairman of the landowner company and wrote the plaintiff a letter, advising that his employment was terminated on various grounds including failing to lodge annual returns, failing to call shareholders meetings, being in a conflict of interest, mismanagement of company funds, non-compliance with safety standards and use of company funds for private study. The first defendant circulated copies of the letter to senior management of the mining company and the commander of the local police station. Around the same time as that letter was circulated the third defendants, who claimed to be shareholder representatives of the landowner company, issued a "circular resolution" containing similar criticism of the plaintiff and recommending that he be referred to the Police Fraud Squad. The plaintiff commenced proceedings against the first defendant and the third defendants, and against the second defendants (who held themselves out as directors of the landowner company) and the fourth defendant (who the plaintiff claimed was the principal author of the allegations), claiming damages for defamation. At the trial the defendants conceded that both documents had been published but denied liability on the ground that neither document was defamatory of the plaintiff, but if either was defamatory, its publication was lawful by virtue of defences under the Defamation Act, namely it being: (i) a matter of public interest in that it was a fair report of proceedings of a public meeting (Section 8(2)(g)), (ii) the truth (Section 10) and (iii) made in good faith (Section 12).
Held:
(1) The elements of a cause of action in defamation are that: the defendant made a defamatory imputation of the plaintiff; the defendant published it; and the publication was unlawful in that it was not protected, justified or excused by law (Defamation Act, Sections 5, 24; Theresa Joan Baker v Lae Printing Pty Ltd [1979] PNGLR 16).
(2) As the plaintiff was suing over two different documents the elements of a cause of action should be considered in respect of the two documents separately.
(3) As to the first document, the letter written by the first defendant insinuated that the plaintiff was incompetent, dishonest, irresponsible and untrustworthy. Those are defamatory imputations, which were published widely by the first defendant (but not by other defendants, against whom liability could not be established). Hence the first two elements were proven. As to the three defences pleaded: (i) the letter was not purporting to be a report of a public meeting, hence the Defamation Act, Section 8(2)(g) defence was not available; (ii) the first defendant failed to prove that the defamatory statements were truthful, hence the Section 11 defence failed; (iii) publication of defamatory imputations in good faith is not a defence by itself, hence the defence claimed under Section 12 failed; therefore publication was unlawful. A cause of action was established against the first defendant, but not against other defendants.
(4) As to the second document, the circular stated that the plaintiff had been managing the company against the interests of shareholders and insinuated that he and another person had conspired to defraud the company. Those are defamatory imputations, which were published by the third defendants (but not by other defendants, against whom liability could not be established). Hence the first two elements were proven. As to the three defences pleaded: (i) the circular was not purporting to be a report of a public meeting, hence the Defamation Act, Section 8(2)(g) defence was not available; (ii) the third defendants failed to prove that the defamatory statements were truthful, hence the Section 11 defence failed; (iii) publication of defamatory imputations in good faith is not a defence by itself, hence the defence claimed under Section 12 failed; therefore publication was unlawful. A cause of action was established against the third defendants, but not against other defendants.
(5) It was accordingly ordered that: in respect of publication of the first document, liability was established against the first defendant, but not against other defendants; in respect of publication of the second document, liability was established against the third defendants, but not against other defendants; and no liability was established against the second and fourth defendants and the proceedings against them were dismissed.
Cases cited
The following cases are cited in the judgment:
Boyd v Mirror Newspapers [1980] 2 NSWLR 449
Hansen v Border Morning Mail Pty Ltd (1988) ATR 80,188
Hutton v Jones [1909] UKLawRpAC 57; [1910] AC 20
PNG Aviation Services Pty Ltd v Michael Thomas Somare [1997] PNGLR 515
Theresa Joan Baker v Lae Printing Pty Ltd [1979] PNGLR 16
Yakham & Pacific Star Ltd v Merriam (No 2) (1999) SC617
TRIAL
This was a trial on liability for defamation.
Counsel
R Diweni, for the plaintiff
J Lome, for the first, second and third defendants
24th March, 2015
1. CANNINGS J: This is a defamation trial. The plaintiff, Francis Chibelle, is the general manager of a landowner company called Camp Administration Ltd, based in Tabubil, Western Province, which does a lot of business with Ok Tedi Mining Ltd. The plaintiff alleges that in 2011 the defendants, who held themselves out as representing a particular group of minority shareholders, attempted to remove him as general manager and in the process published two documents defaming him.
2. The first document was a letter dated 22 August 2011 from the first defendant to the plaintiff. The first defendant held himself out as interim chairman of Camp Administration Ltd and notified the plaintiff that his employment was terminated on various grounds including failing to lodge annual returns, failing to call shareholders meetings, being in a conflict of interests, mismanagement of company funds, non-compliance with safety standards and use of company funds for private study. The first defendant circulated copies of the letter to senior management of Ok Tedi Mining Ltd and the Commander of Tabubil Police Station.
3. The second document was a circular published in the period from 6 July to 21 August 2011 by the third defendants, who claimed to be shareholder representatives of the landowner company. It contained similar criticism of the plaintiff and recommended that he be referred to the Police Fraud Squad.
4. The plaintiff has commenced defamation proceedings seeking damages against the defendants, who deny liability. This judgment gives the Court's reasons for its decision on the question of liability.
ELEMENTS
5. The elements of a cause of action in defamation are that:
6. The defendants concede that both documents were published but deny liability on the ground that neither document was defamatory of the plaintiff. If either document was defamatory, the defendants argue that its publication was lawful by virtue of defences under the Defamation Act, it being: (i) a matter of public interest in that it was a fair report of proceedings of a public meeting (Section 8(2)(g)), (ii) the truth (Section 10) and (iii) made in good faith (Section 12).
7. As the plaintiff is suing over two different documents, the elements of defamation need to be addressed in respect of the two documents separately.
THE FIRST DOCUMENT: LETTER OF 22 AUGUST 2011, WRITTEN BY FIRST DEFENDANT
8. This document stated:
This is to advise you that you as of today 22nd of August 2011 you are terminated from work as a General Manager, Camp Administration Limited. You are terminated on the grounds that you had failed miserably to comply with and other business operations outside of OTML policies and guidelines:
The Accounts Manager of the company shall assess your accounts and your entitlements ascertain whether the company owes you money. If is found that you owe the company money, whatever entitlements you have with the company shall be applied towards settling your dues, and whatever remaining balances, if any, will be paid to you.
Furthermore, your termination is effective as of today 22 August 2011 and you are also advised that you will stay in Tabubil while the Investigation Team completes their investigations for indefinite period and later transported to your point of hire.
We anticipate your corporation and in this regard and thank you for serving Camp Administration Limited and wish you the best in your future endeavours. [sic]
Yours faithfully
Jack Mafu
Interim Chairman – Board of Directors, Camp Administration Limited
Cc Manager Economic Development & Finance–Ok Tedi Mining Limited
Peter Amireng – Court Litigant
Manager Asset Protection Department – Ok Tedi Mining Limited
Team Coordinator OTML Contracts – Ok Tedi Mining Limited
Tabubil Police Station Commander
9. As the defendants concede that this letter was published, the issues to be determined are:
(a) Does the letter contain defamatory imputations of the plaintiff?
(b) Do any of the three defences relied on by the defendants apply? Or was the publication unlawful?
(c) Has liability been established against any of the defendants?
(a) Does the letter contain defamatory imputations of the plaintiff?
10. Mr Lome, for the defendants, submitted that there was nothing defamatory in the letter. In determining that submission the court must have regard to Section 2 (definition of defamatory matter) of the Defamation Act, which states:
(1) An imputation concerning a person, or a member of his family, whether living or dead, by which—
(a) the reputation of that person is likely to be injured; or
(b) he is likely to be injured in his profession or trade; or
(c) other persons are likely to be induced to shun, avoid, ridicule or despise him,
is a defamatory imputation.
(2) An imputation may be expressed directly or by insinuation or irony.
(3) The question, whether any matter is or is not defamatory or is or is not capable of bearing a defamatory meaning, is a question of law.
11. The question of whether a statement contains a defamatory imputation is to be determined objectively according to the standards and reactions of a reasonable person. It is irrelevant whether the publisher of the statement intended it to be defamatory or to do any harm to the plaintiff's reputation (Boyd v Mirror Newspapers [1980] 2 NSWLR 449; Hutton v Jones [1909] UKLawRpAC 57; [1910] AC 20). My assessment is that the letter imputes by insinuation, viewed from the perspective of a reasonable person reading it, that the plaintiff:
12. Such imputations were likely to injure the reputation of the plaintiff and to injure him in his profession. They are defamatory imputations by virtue of Sections 2(1)(a) and (b) of the Defamation Act. The plaintiff has proven on the balance of probabilities that the letter is defamatory of him. The first element of defamation has been proven.
(b) Was publication of the letter unlawful? Or do any of the three defences relied on by the defendants apply?
(i) Matter of public interest defence: Defamation Act, Section 8
13. The defendants rely on Section 8(2)(g) (protection: matters of public interest) of the Defamation Act, which states:
For the purposes of this Act, it is lawful to publish in good faith for the information of the public ...
(g) a fair report of the proceedings of a public meeting, so far as the matter published relates to matters of public concern.
14. Mr Lome submitted that the evidence showed that the letter of 22 August 2011 was a result of a meeting of shareholders on 30 July 2011, attended by all the defendants, at which there was a discussion of various matters concerning the affairs of the company. The meeting was necessary, he submitted, as there had been no annual general meeting in 2008, 2009 or 2010. Mr Lome submitted that it was a meeting of shareholders under Section 103 of the Companies Act and that amongst the matters discussed was a resolution for removal of the directors of the company.
15. For a defence under Section 8(2)(g) to succeed, the following elements must exist:
1 the defamatory material must be a "fair report" (s 8(2)(g));
2 the report must be of a "the proceedings of a public meeting" (s 8(2)(g)), which is defined by Section 8(1) to mean a meeting:
lawfully held for a lawful purpose, and for—
(a) the furtherance or discussion in good faith of a matter of public concern; or
(b) the advocacy of the candidature of a person for a public office,
whether admission to the meeting is open or restricted.
3 the defamatory material must be published "in good faith" (s 8(2));
4 the material must be published "for the information of the public" (s 8(2)), which means by virtue of Section 8(3) that:
the person by whom it is made is not actuated in making it by ill-will to the person defamed or by any other improper motive, and ... the manner of the publication is such as is ordinarily and fairly used in the publication of news.
5 the published matter must relate to "matters of public concern" (s 8(2).
16. None of those requirements is satisfied. First, the letter of 22 August 2011 was not a fair report of a meeting. Though the letter might have in fact resulted from a meeting, there was no reference to a meeting in it, so it cannot be regarded as a report of the meeting of 30 July 2011, let alone a fair report of that meeting.
17. Secondly, the meeting was not a public meeting. It was a private meeting. It was not open to the public. There were no invitations to the public. The persons who went to the meeting wished to discuss the affairs of Camp Administration Ltd. These were issues of great concern for them, but they cannot be regarded as being matters of public concern. Nor was the purpose of the meeting the advocacy of the candidature of a person for public office. It is not necessary to decide whether it was a lawful meeting of shareholders of Camp Administration Ltd.
18. Thirdly, the terms of the letter and its tone indicate that it was not published in "good faith".
19. Fourthly, the letter was addressed to the plaintiff notifying him that his employment was terminated and copied, and therefore published, to a number of other persons but it cannot be said to have been published for the information of the public.
20. Fifthly, the matter published did not relate to matters of public concern.
21. The result is that the public interest defence fails.
(ii) The truth defence: Defamation Act, Section 10
22. The defendants' argument is that publication of anything in the letter deemed to be defamatory is rendered lawful by the "truth" defence in Section 10 of the Defamation Act, which states:
For the purposes of this Act, it is lawful to publish defamatory matter if it is true, and if it is for the public benefit that the publication complained of should be made.
23. The truth defence has two elements:
1 the defamatory matter in the letter must be true (note that it is for the defendant to prove that the defamatory matter is true in substance and effect, and it is irrelevant whether the defendant had a genuine belief in the truth of the matter (Hansen v Border Morning Mail Pty Ltd (1988) ATR 80,188)); and
2 it must be for the public benefit that that matter be published (note that the question whether the public discussion of a subject is for the public benefit is by virtue of Section 13(b) of the Defamation Act a question of fact).
24. Neither of those requirements is satisfied. First, to the extent that the defamatory imputations regarding the plaintiff are expressed in the form of opinion (eg that he was incompetent, in a conflict of interests and dishonest) those are matters that are not capable of factual proof, which makes the defence of truth inapplicable (Yakham & Pacific Star Ltd v Merriam (No 2) (1999) SC617). To the extent that they are based on statements of fact, (eg that the plaintiff had failed to comply with OTML polices and guidelines, failed to lodge annual returns, failed to call annual general meetings) the defendants have not proven that they are true. Mr Lome submitted that the truth of the statements could be inferred from the fact that the plaintiff had not adduced proof of these matters though he had been given the opportunity to do so and his mere assertions in cross-examination that the annual reports had been compiled could not be accepted. I reject that submission. It is the defendant who bears the onus of proof in a truth defence. They had to prove on the balance of probabilities that the defamatory statements were true. It was not up the plaintiff to prove that they were not true.
25. The second requirement of the truth defence is not satisfied as the defendants have not established that it was for the public benefit that the defamatory letter be published. The letter was a letter of termination, which should have remained a private matter between the author of the letter and the plaintiff. Thus even if the defamatory matter in the letter were regarded as true, the second element of the truth defence would not be satisfied. The result is that the truth defence fails.
(iii) The defence of good faith: Defamation Act, Section 12
26. This defence was pleaded as follows:
The defamatory statements pleaded under paragraphs 9 and 13 of the statement of claim were made and published in good faith for the benefit of the 47 shareholders of CAL (Camp Administration Ltd] and therefore the onus is on the plaintiff to prove otherwise under Section 12 of the Defamation Act.
27. Mr Lome submitted that the letter was written in good faith without any intention to injure the plaintiff's professional standing or character. There was no malice involved. The statements were made in the context of an employer terminating an employee. He submitted that the plaintiff's case appears to be based on the false notion that an employee's competence, skills and experience cannot be questioned by his employer. Mr Lome warned against the spectre of the courts being flooded with all manner of defamation suits by sacked employees whose performances have been criticised by their employers. If this claim is upheld, the Court will be interfering with the employer's common law right to hire and fire. The onus of proof on the good faith issue rests with the party denying it, ie the plaintiff, a situation which arises under Section 12 (good faith) of the Defamation Act, which states:
Where a question arises as to whether a publication of defamatory matter was or was not made in good faith, and it appears that the publication was made in circumstances that would afford lawful excuse for the publication if it was made in good faith, the burden of proof of the absence of good faith is on the party alleging the absence.
28. Mr Lome submitted that the plaintiff has been unable to prove that the letter was not published in good faith. He emphasised that all that the defendants wanted was a new board and management to run the company. They were not satisfied with the way in which the company was being run. It was never their intention to defame the plaintiff in any manner, shape or form.
29. Mr Lome has mounted a spirited defence of his clients' conduct but this part of his submission is fundamentally flawed. Good faith per se is not a defence to a defamation action. It is an element of certain defences but it is not a standalone defence. The defences of which it is an element are:
30. Mr Lome correctly pointed out that under Section 12 the onus of proof regarding good faith rests with the plaintiff (PNG Aviation Services Pty Ltd v Michael Thomas Somare [1997] PNGLR 515; Yakham & Pacific Star Ltd v Merriam (No 2) (1999) SC617). However, that onus does not arise here as the defendants have in their third defence not pleaded or proven anything that would require the plaintiff to prove absence of good faith. The third defence is dismissed.
31. As all defences have failed, publication of the letter was unlawful. All elements of defamation have been proven.
Has liability been established against any of the defendants?
32. Yes, the letter of 22 August 2011 was published widely by the first defendant. A cause of action in defamation has therefore been established against him. There is no evidence that the other defendants published the letter. Though they may have encouraged the first defendant to write the letter or to terminate the plaintiff's employment, they were not a party to publication of the letter and I find them not liable.
THE SECOND DOCUMENT: CIRCULAR RESOLUTION CIRCULATED BETWEEN 6 JULY AND 21 AUGUST 2011 BY THE THIRD DEFENDANTS
33. This document was published under the letterhead of "SHAREHOLDERS OF CAMP ADMINISTRATION LIMITED". It is headed "CIRCULAR RESOLUTION NO: 01 OF 2011". It is undated. It began by stating:
BY WAY OF FOLLOWING THE CIRCULAR RESOLUTIONS, THE SHAREHOLDERS OF CAMP ADMINISTRATION LIMITED, AFTER DUE ENQUIRY, RESOLVED AS FOLLOWS: ...
34. The circular comprised six paragraphs. Paragraph 1 announced the termination forthwith of the entire board of directors of Camp Administration Ltd on various grounds, including:
B. THE BOARD IS CONDONING OR SEEING TO BE CONDONING THE ACTIONS OF THE GENERAL MANAGER, MR FRANCIS CHIBELLE IN THE MANAGER IN WHICH HE IS MANAGING THE COMPANY AGAINST THE INTEREST OF THE SHAREHOLDERS.
C. THE BOARD HAS DONE NOTHING TO REMOVE THE GENERAL MANAGER WHO IS MANAGING THE COMPANY AGAINST THE INTERESTS OF THE SHAREHOLDERS. [sic]
35. Paragraphs 3, 4 and 5 announced the appointment of an interim board of directors and a proposed course of action, which included in paragraph 4(E) referring the plaintiff and another person "to the Police Fraud Squad for investigations in the use of company funds". Paragraph 2 was focussed on the plaintiff, stating:
THE GENERAL MANAGER OF CAMP ADMINISTRATION, MR FRANCIS CHIBELLE IS TERMINATED FORTHWITH AND SHALL BE REFERRED TO THE FRAUD SQUAD FOR INVESTIGATIONS INTO THE USE OF COMPANY FUNDS FOR THE PAST THREE YEARS.
36. Paragraph 6 stated that the above resolutions were signed by the shareholders listed. The defendants concede (by paragraph 12 of their defence) that the circular was published by the third defendants. The issues to be determined are:
(a) Does the circular contain defamatory imputations of the plaintiff?
(b) Do any of the three defences relied on by the defendants apply? Or was the publication unlawful?
(c) Has liability been established against any of the defendants?
(a) Does the circular contain defamatory imputations of the plaintiff?
37. Yes, the circular imputes by insinuation, viewed from the perspective of a reasonable person reading it, that the plaintiff was incompetent, dishonest, had misused company funds to the extent warranting his referral to the Fraud Squad and he had conspired with another person to defraud Camp Administration Ltd. Such imputations were likely to injure the reputation of the plaintiff and to injure him in his profession. They are defamatory imputations by virtue of Sections 2(1)(a) and (b) of the Defamation Act. The plaintiff has proven on the balance of probabilities that the circular is defamatory of him. The first element of the tort of defamation has been proven.
(b) Was publication of the circular unlawful? Or do any of the three defences relied on by the defendants apply?
(i) Matter of public interest defence: Defamation Act, Section 8
38. The defendants rely on Section 8(2)(g) (protection: matters of public interest) of the Defamation Act. I find that none of the elements of the defence apply. First, the circular is not a report of a meeting. Secondly, it was not the report of a public meeting. Thirdly, the terms of the circular and its tone indicate that it was not published in good faith. Fourthly, the circular was not published for the information of the public. Fifthly, the published matter did not relate to matters of public concern. The result is that the public interest defence fails.
(ii) The truth defence: Defamation Act, Section 10
39. Neither of the two elements of the truth defence is satisfied. First, to the extent that the defamatory imputations regarding the plaintiff are expressed in the form of opinion (eg that he was incompetent, in a conflict of interests and dishonest) those are matters that are not capable of factual proof, which makes the defence of truth inapplicable (Yakham & Pacific Star Ltd v Merriam (No 2) (1999) SC617). To the extent that they are based on statements of fact, the defendants have not proven that they are true.
40. The second requirement of the truth defence is not satisfied as the defendants have not established that it was for the public benefit that the defamatory circular be published. The truth defence fails.
(iii) The defence of good faith: Defamation Act, Section 12
41. This defence fails for the same reason it failed in relation to the letter of 22 August 2011: 'good faith' is not a standalone defence.
42. As all defences have failed, publication of the circular was unlawful. All elements of defamation have been proven.
Has liability been established against any of the defendants?
43. Yes, the circular was published widely by the third defendants. A cause of action in defamation has been established against them. There is no evidence that the other defendants published the circular and I find them not liable.
CONCLUSION
44. The plaintiff has proven liability against the first defendant in respect of publication of the first document. He has proven liability against the third defendants in respect of publication of the second document. Liability has not been established against the second and fourth defendants and the proceedings against them must be dismissed. The proceedings will proceed to an assessment of damages unless the parties agree on an alternative course of action. The question of costs will be the subject of submissions as the plaintiff has not entirely succeeded.
ORDER
(1) In respect of the first document, namely the letter of 22 August 2011, the plaintiff has established a cause of action in defamation against the first defendant and failed to establish a cause of action in defamation against other defendants.
(2) In respect of the second document, the circular resolution published between 6 July and 21 August 2011, the plaintiff has established a cause of action in defamation against the third defendants and failed to establish a cause of action in defamation against other defendants.
(3) The proceedings against the second and fourth defendants are dismissed.
(4) The proceedings against the first and third defendants shall continue, unless the parties agree on an alternative course of action, to a trial on assessment of damages.
(5) The question of costs is deferred.
Judgment accordingly.
___________________________________________________________
Diwenis Lawyers: Lawyers for the Plaintiff
Greg Manda Lawyers: Lawyers for the First, Second & Third Defendants
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