'Amanaki v Government of Tonga [2020] TOSC 80; CV 9 of 2019 (30 September 2020)

IN THE SUPREME COURT OF TONGA CIVIL JURISDICTION NUKU’ALOFA REGISTRY CV 9 of 2019
BETWEEN:
MELE TEUSIVA ‘AMANAKI	Plaintiff
-and-
[1] GOVERNMENT OF TONGA [2] TONGA WEEKLY NEWSPAPER LTD [3] FAKA’OSI MAAMA [4 WILLIAM CLIVE EDWARDS	Defendants

Application to strike out the Plaintiff’s claim against the Fourth Defendant
RULING

Before:	LORD CHIEF JUSTICE WHITTEN
Appearances:	The Plaintiff in person The proceedings against the First Defendant have previously been struck out. No appearance for the Second Defendant. Judgment in default of defence with damages to be assessed has previously been entered against the Third Defendant. Mr W.C. Edwards Snr SC, the Fourth Defendant, in person.
Date of hearing: Date of ruling:	30 September 2020 30 September 2020

1. This is an application by Mr Edwards to strike out the Plaintiff’s claim against him. At the conclusion of the hearing, after considering the affidavits and submissions filed in the application and after hearing from the parties, I delivered the following ruling.
2. Previously in this proceeding, CV 9 of 2019, and its related proceeding CV 57 of 2018, the court made directions requiring that the subject matter of each action for defamation be demarcated such that all claims arising out of publication by the Tonga Weekly Newspaper Limited on 20 March 2014, 11 April 2014 and 9 May 2014 concerning the plaintiff, Mrs. ‘Amanaki, be confined to CV 9 of 2019 and that all claims for defamation between Mr. Edwards and Mrs. ‘Amanaki and the PSA arising out of an exchange of emails between Mrs. ‘Amanaki and Mr. Edwards on 14 May 2014 and 16 May 2014 respectively be confined to CV 57 of 2018. Subsequent to those directions, the pleadings have been amended accordingly.
3. In this proceeding, by amended application filed 4 September 2020, Mr. Edwards applies to have the claim against him struck out pursuant to Order 8 rule 8(1)(d) of the Supreme Court Rules on the basis that the claim is a duplication of the Mrs. ‘Amanaki’s counterclaim against him in CV 57 of 2018 and is therefore an abuse of the process of the court.
4. As I have just indicated, the subject matter of Mrs. ‘Amanaki’s counterclaim against Mr. Edwards in CV 57 is his email to her and others dated 16 May 2014. In her proceeding in CV 9, the statement of claim filed 29 March 2019 alleges, relevantly:
   • (a) at paragraph 5, that Mr. Edwards was a director of the Tonga Weekly Newspaper since its establishment in June 2012 to December 2014;
   • (b) at paragraph 6, that the second and third defendants, who will be referred to in this ruling as the Newspaper and the Editor, published and republished, distributed and redistributed a photo of the plaintiff, which is not decent, and false and malicious statements and threats in articles on the three dates specified;
   • (c) at paragraph 7, that Mr. Edwards published false and malicious statements and orchestrated his version of the photo published by the Newspaper and the Editor in an email on 16 May 2014 circulated to various persons who are specified therein. As Mrs. ‘Amanaki agreed, the email referred to in that part of her pleading is the same email which is the subject matter of her counterclaim in CV 57;
   • (d) at paragraph 9, that the copy of the publication on or around 11 April 2014 cannot be located but its publication is confirmed in the plaintiff’s later dated 26 April 2014 to the Editor requesting for her letter to be published. That letter was sent by email on 2 May 2014 to the Editor and copied to the directors of the Newspaper, the Kingdom of Tonga, Cabinet Ministers and others;
   • (e) at paragraph 10, that the email sent by Mr. Edwards contained derogatory and defamatory statements concerning and about the plaintiff. That again is a reference to the same email which is the subject matter of CV 57;
   • (f) at paragraph 12, that Mr. Edwards further contributed to the injury of her credit, character and reputation caused by the Newspaper and the Editor by his email containing defamatory statements and orchestrating his own malicious version of the photo and threats referred to in paragraph 10 of the Statement of Claim. Again, the email referred to there is the same email referred to in CV 57;
   • (g) at paragraph 14, that on 9 June 2014, Mr. Edwards instituting proceedings against Mr. ‘Amanaki in the Magistrates Court seeking damages for defamation. That proceeding has subsequently become CV 57 of 2018 in this court;
   • (h) at paragraph 15, that the actions taken by the then Prime Minister and Mr Edwards as a director of Tonga Weekly Newspaper Limited and then Minister of Justice and Minister of Public Enterprises against the plaintiff because her employer had called on the Prime Minister to resign voluntarily over the alleged unlawful payment of around TOP$32 million by the Government to ‘Tongasat’, was unjust and unfair and confirmed that they were actuated by ill-will, anger and hatred;
   • (i) at paragraph 18, that the defendants repeatedly published and distributed the photos actuated by ill-will, anger, hatred, malice and not otherwise and in respect thereof general, exemplary and aggravated damages are sought. The particulars subjoined thereto allege, relevantly:
     • (i) at (a), that Mr Edwards orchestrated his own version of the photo in an email further injuring the reputation and character of the plaintiff and her family because her employer had called on the head of the government to resign voluntarily over the payment to Tongasat in 2011. Again that email is the same email as the subject matter Mrs Amanaki's counterclaim in CV 57;
     • (ii) the particulars at (b) concerns only the Newspaper and the Editor;
     • (iii) at (c), that Mr. Edwards failed in his duty as a director of the Newspapers and Minister of Justice and of Public Enterprises to ensure that the operation of the Newspaper was conducted in accordance with the Public Enterprises Act with regard to its management and to ensure compliance with the ‘Information Act’ and work ethics of the Tonga Media Association; and
     • (iv) finally, at (d), that Mr. Edwards throughout the email he sent to Mrs. ‘Amanaki and distributed to others on 16 May 2014 wrote false and malicious statements, made threats to her and orchestrated his own version of the photo published by the Newspaper, the operation of which he was overseeing as a director, thereby further injuring the reputation and character of the plaintiff because of a call made by her employer against the first defendant.
5. I pause here to note that the Public Enterprise Act defines a ‘public enterprise’ as an entity listed in the Schedule to that Act. Section 5 repeats that the entities listed in the Schedule are public enterprises for the purpose of the Act. The Tonga Weekly Newspaper Limited is not listed in the Schedule to that Act. It therefore has no application to the Newspaper which was recently restored to the Company Register nor to any allegation in this proceeding.
6. I am not aware, and Mrs Amanaki could not assist, as to what was intended by her reference to the ‘Information Act’. I have not been able to find a copy of that statute, nor was one produced during argument today.
7. She also referred to the work ethics of the Tonga Media Association. It is unclear how those work ethics, which are not specified in any part of the pleading, may have any bearing on any allegation that Mr. Edwards is personally liable for the publications by the Newspaper and its editor.
8. Apart from certain further submissions by Mrs. ‘Amanaki in respect of paragraph (c) of the particulars to paragraph 18 of the Statement of Claim, which I address below, all other allegations in the Statement of Claim concerning Mr. Edwards arise from or are a direct reference to his email to Mrs Amanaki and others on 16 May 2014. The contents of that email are the subject of Mrs. ‘Amanaki’s counterclaim in CV 57 of 2018.
9. For that reason alone, her allegations against Mr. Edwards in CV 9 constitute an abuse of process as they are a direct duplication of her allegations in her counterclaim in CV 57.
10. Mrs. ‘Amanaki’s written and oral submissions on this application extended beyond an analysis of the contents of her Statement of Claim. She sought to add further arguments to explain the basis upon which Mr. Edwards was joined as the fourth defendant to her action and why he should remain as such.
11. She referred to s.127 of the Companies Act, which, at subsections (1) and (2) amount to the unremarkable statement that the business and affairs of the company are to be managed and be under the direction or supervision of the board of directors of the company and that the board of the company has all the powers necessary for managing and for directing and supervising the management of the business of the affairs of the company.
12. Mrs. ‘Amanaki asserted, by reference paragraph 4 of Mr. Edwards email of 16 May 2014, where he wrote “... But what is clear to me at this time is that the newspaper had duly performed its correct and true responsibilities”, that he had taken responsibility for the impugned publications in March, April and early May 2014 by the Newspaper and the Editor.
13. In an earlier ruling in this proceeding - 'Amanaki v Government of Tonga [2019] TOSC 47 - in respect of a successful strike out application by application by the then First Defendant, at paragraph 57, it was noted, in respect of the Companies Act that:

“The relevant provisions do not automatically confer a separate right of action in the plaintiff against a director or deemed director for a tort by the company. In every such case, it is necessary to examine with care the part the director played personally in regard to the Act or the Act complained of: C. Evans & Sons Ltd v Spitebrand [1985] WLR 317 at 329. Further, in order to fix a director with personal liability, it must be shown that he assumed personal responsibility for the act, and that there are special circumstances which set the case apart from the ordinary. In each case, the decision is one of fact and degree: Williams v Natural Life Health Foods Ltd, ibid, at 152 ...”

14. Further authority for that legal proposition, and in the context of defamation proceedings against newspapers or other media outlets, may be found in the following decisions.
15. In the United Kingdom, see Kuwait Asia Bank EC v National Natural Light Nominees Limited [1991] 1 AC 187 at 217 and MCA v Charity Records Limited (No. 5) [2003] 1 ACLC 93. Further in Malo trading as the Crown Hotel v Exile Productions Limited [2003] AllER 136 at [46],^[1] the court held that a director or officer of a company may be personally liable if he assumed a clear personal responsibility for what has been done by or for the company or is manifestly a separate joint participant with the company. Moreover, if a director has ordered or procured the breach by the company, he may be liable in tort given that he possesses the requisite knowledge and intention.
16. More recently, in Antzuzis & ors v Houghton Catching Services & ors [2019] EWHC 843, the High Court of England & Wales held that:

“Directors will not be liable for the acts of the company if, in their capacity as directors, they are not in themselves in breach of any personal legal duties owed to the company. Courts and tribunals therefore need to examine whether a director is acting within or outside the limit of their contract and also if acting in that manner is aligned with or contrary to the interests of the company. If it finds the latter in response to these questions, a director would fall foul of the test. That director’s action would not be considered to be bona fide which will invite personal liability - allowing a third party to sue them as well as the company for a loss.”

17. Other recent decisions in Australia to similar effect include Vero Insurance v Baycorp Advantage [2004] NSWCA 390 at [59] citing the decision in Idoport Pty Ltd & Anor v National Australian Bank Ltd & Ors [2001] NSWSC 328 at [22] where it was held as ‘clear law’ that:

“So long as a director was acting within the scope of his authority, the company was responsible for his acts being those of the company. In other words, the director could not be independently liable. It was only where the director actually committed the tort himself or accepted or assumed personal responsibility that the director could be independently liable. Unlike the position in the United Kingdom where a director may be liable notwithstanding that he does not carry out the tortious act himself nor assumes liability for it but induces another being the company to commit the tort. that is not the law in Australia...”^[2]

18. See also Consolidated Press Holdings Ltd & ors v John Fairfax Publications Pty Ltd and Fred Hilmer [2002] ACTSC 63, referred to recently in Trkulja v Dobrijevic (No 2) [2014] VSC 594.
19. Returning then to this application and Mrs. ‘Amanaki’s submissions, the reference in Mr. Edwards’ email to him being ‘clear at that time’ [my emphasis] that in his opinion the newspaper duly performed its correct and true responsibilities does not in my view amount to evidence that at or immediately prior to the time of the publications themselves, he held that view, or was otherwise personally responsible for the decision to publish those articles.
20. Mrs. ‘Amanaki’s further written submissions then proceed to rely upon s.13 of the Public Enterprises Act and the role of directors. For the reasons already stated, that Act does not apply to this case.
21. She also relied on s.130(1) of the Companies Act which requires a director of a company, when exercising powers or performing duties, to act in good faith and in what the director believes to be the best interests of the company. There is no allegation in the Statement of Claim that, at or immediately prior to the decision to publish any of the three impugned articles, Mr Edwards was exercising a power or performing a duty as a director of the newspaper company by either being aware of or instructing or otherwise authorizing the publication of the articles. Even if that were the case such as to engage the duties prescribed by s.130, those directors’ duties are owed to the company itself. As noted above, under the common law, a director may be held liable to third parties for negligence but only if the director assumes personal responsibility: Ivory Limited v Anderson [1992] NZLR 517. Further, merely acting as a director will not suffice to provide a private cause of action to a third party for a breach of a duty under the Companies Act.^[3]
22. I should also add that again the Statement of Claim does not contain any allegation which seeks to engage the operation of s.130 or which alleges as a matter of fact that Mr. Edwards was personally responsible for or assumed personal liability for the newspaper publishing the impugned articles and that he thereby breached his duty to the company to act in good faith or in its best interests (even if that could sound in a cause of action by Mrs Amanaki against Mr Edwards).
23. Finally, Mrs. ‘Amanaki’s submission concluded with a reference to s.14(2) of the Public Enterprises Act which provides that, subject to the Act, no member of Cabinet or the Legislative Assembly shall be appointed or remain as a director of a public enterprise except in the case where a new public enterprise is established and Government sees the need to appoint Cabinet ministers for an interim period not exceeding 12 months from the date the public enterprise is established to establish the new public enterprise. As I have already indicated, that Act does not apply here.
24. But even if it did, the fact that Mr. Edwards and the other members of Cabinet or Legislative Assembly who were on the board of directors of the Newspaper company at the relevant time could amount to a breach of that section would not in my opinion give rise to a private cause of action by Mrs. ‘Amanaki against Mr. Edwards for any relief associated with the alleged defamation by the Newspaper.
25. Further, one extrapolation of any so-called ‘unlawful directorship’ submission would be that Mr. Edwards was not lawfully a director in control of the operation of the company at the relevant time. In that event, he could not therefore be responsible for the publications by the Newspaper company. On that analysis, any claim framed in that way, which I hasten to add has not being pleaded in any way, shape or form, would almost certainly fail.
26. For those reasons, I am satisfied that the allegations against Mr. Edwards as pleaded in the Statement of Claim in CV 9 of 2019 are an abuse of process. Mrs. ‘Amanaki’s complaints about the contents of Mr. Edwards’ email to her and others on 16 May 2014 are properly to be agitated, as they have been pleaded, in her counterclaim in CV 57 of 2018.
27. Mr. Edwards application is granted.
28. The claim against him in CV 9 of 2019 is struck out.
29. Mrs ‘Amanaki is to pay Mr. Edwards’ costs of the proceeding, including this application, to be taxed in default of agreement.

NUKU’ALOFA	M. H. Whitten QC
30 September 2020	LORD CHIEF JUSTICE

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^[1] Referred to Clerk & Lindsell on Torts, 18^th edition, page 1295.
^[2] See Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980; (2000) 177 ALR 231 at [115]- [116], [125]-[146].
^[3] Companies and Security Law in New Zealand, 2nd edition, by John Farrar and Susan Watson.