Smy Luluaki Limited and Moses Luluaki v Paul Paraka Lawyers and Pacific Star Limited Trading as the National Newspaper and The Independent State Of Papua New Guinea (2011) N4360

• Jurisdiction: Papua New Guinea
• Judge: Cannings, J.
• Judgment Date: 19 August 2011
• Court: National Court
• Docket Number: WS NO 313 OF 2009
• Citation: (2011) N4360
• Year: 2011
• Judgement Number: N4360

Full Title: WS NO 313 OF 2009; Smy Luluaki Limited and Moses Luluaki v Paul Paraka Lawyers and Pacific Star Limited Trading as the National Newspaper and The Independent State Of Papua New Guinea (2011) N4360

National Court: Cannings, J.

Judgment Delivered: 19 August 2011

N4360

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 313 OF 2009

SMY LULUAKI LIMITED

First Plaintiff

MOSES LULUAKI

Second Plaintiff

V

PAUL PARAKA LAWYERS

First Defendant – Removed

PACIFIC STAR LIMITED

TRADING AS THE NATIONAL NEWSPAPER

Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

Madang: Cannings J

2010: 29 September, 22 October

2011:19 August

DEFAMATION – whether an article published in a newspaper contained defamatory imputations – defences of fair comment, truth and qualified privilege.

The second defendant published in its newspaper an article headed “Lawyers probe K16.3m claim/Million-kina claim being squeezed out of alleged K400,000.00 contract”, which reported that the first plaintiff had been pursuing an out of court settlement for K16,226,160.00 from a purported contract worth just K400,000.00 but that lawyers appointed by the State have noted inconsistencies in the claim and advised the Attorney-General and the Solicitor-General not to settle it and instead to challenge a purported consent default judgment, of which the Attorney-General and Solicitor-General had no knowledge. It was reported that the first plaintiff had launched a claim for K800,000.00 for alleged breach of contract and that there had been no public tender contrary to normal practice and law and that it had not carried out any form of work. It was further reported that State lawyers were seeking options to refer the second plaintiff (the principal of the first plaintiff) for prosecution for attempting to defraud the State. The plaintiffs commenced proceedings against the law firm which apparently gave the advice referred to in the article (first defendant), the newspaper publisher (second defendant) and the State (third defendant), claiming damages for defamation. In interlocutory proceedings the first defendant was removed as a party and default judgment was entered against the third defendant, so a trial was set down on the liability of the second defendant and on assessment of damages against the third defendant. The second defendant denied liability on the ground that the newspaper article was not defamatory of the plaintiffs, but if it was defamatory its publication was lawful by virtue of the defences under the Defamation Act of fair comment, truth and qualified privilege. The third defendant asked the court to revisit the issue of its liability in view of defects in the statement of claim and dismiss the proceedings against it; and in the alternative argued that no damages should be awarded against it due to insufficiency of evidence.

Held:

(1) The newspaper article suggested by insinuation, in relation to the first plaintiff, that it was making a bogus and inflated claim and that it had not done any of the work it had been contracted to do and that its business was conducted in an unlawful and irregular manner; and, in relation to the second plaintiff, that he had attempted to defraud the State by making a bogus claim without legal basis. Such imputations were likely to injure the reputation of both plaintiffs and to cause other persons to shun or avoid them and were defamatory imputations.

(2) The defence of fair comment under Section 9 of the Defamation Act did not apply as the defamatory imputations (a) were based on purported facts that were not true and therefore the comments were not fair; and (b) did not concern the public proceedings of a court, the merits of a decided civil case, the conduct of a person as a party in such a case or the character of a party, so far as his character appears in that conduct.

(3) The defence of truth under Section 10 of the Defamation Act did not apply as the defamatory matter in the article was not true and it was not for the public benefit that that matter be published.

(4) The defence of qualified privilege did not apply as publication of the article did not fall within any of the categories of qualified privilege in Section 11(1) of the Defamation Act and the publication was not made in good faith.

(5) As none of the defences succeeded, publication by the second defendant of the defamatory matter was not protected, justified or excused by law and was unlawful. Thus a cause of action in defamation was established against it.

(6) The third defendant’s request for the court to revisit the issue of liability against it was refused, as there was no formal application before the court to set aside the default judgment that had previously been entered and a cursory inquiry satisfied the court that the facts and the cause of action had been pleaded with sufficient clarity.

(7) As to assessment of damages against the third defendant, it was in the interests of justice to adjourn determination of this issue, pending a hearing of assessment of damages against the third defendant.

Cases cited

Papua New Guinea Cases

Arlene Pitil v Rutis Clytus (2003) N2422

PNG Aviation Services Pty Ltd v Michael Thomas Somare [1997] PNGLR 515

Public Prosecutor v Nahau Rooney (No 2) [1979] PNGLR 448

Rabaul Shipping Limited v Cyril Mudalige (No 2) (2009) N3783

South Pacific Post v Nwokolo [1984] PNGLR 38

Supreme Court Reference No 3 of 1984; Ex Parte Rowan Sidney Callick and Joe Koroma [1985] PNGLR 67

Theresa Joan Baker v Lae Printing Pty Ltd [1979] PNGLR 16

William Mel v Coleman Pakalia (2005) SC990

Wyatt Gallagher Bassett (PNG) Ltd v Benny Diau (2002) N2277

Yakham & Pacific Star Ltd v Merriam (No 2) (1999) SC617

Overseas Cases

Australian Broadcasting Corporation v Foot (1986) 12 FCR 510

Boyd v Mirror Newspapers [1980] 2 NSWLR 449

Calwell v Ipec (1975) CLR 321

Hansen v Border Morning Mail Pty Ltd (1988) ATR 80,188

Hunt v Star Newspaper [1908] 2 KB 309

Hutton v Jones [1910] AC 20

Kemsley v Foot [1952] AC 345

TRIAL

This was a trial on liability and assessment of damages for defamation.

Counsel

M Luluaki, the second plaintiff in person, for the plaintiffs

T M Ilaisa, for the second defendant

T Tanuvasa, for the third defendant

19 August, 2011

1. CANNINGS J: The plaintiffs, SMY Luluaki Ltd and Moses Luluaki, are seeking damages for defamation arising out of publication of an article in The National newspaper. They argue that the article, which was about court proceedings the company and Mr Luluaki had instituted against the State for breach of contract, was defamatory and that its publication was unlawful. The plaintiffs commenced proceedings against three parties:

· Paul Paraka Lawyers, first defendant, the law firm that was giving legal advice to the State that was referred to in the article;

· Pacific Star Ltd, second defendant, publisher of The National;

· the State, third defendant, claimed to be vicariously liable for defamatory imputations attributed to the Attorney-General and the Solicitor-General in the article.

2. During interlocutory proceedings Paul Paraka Lawyers was removed as a party and default judgment was entered against the State, which meant that a trial was set down in regard to Pacific Star on liability and in regard to the State on assessment of damages. At the trial Pacific Star denied liability on the ground that the newspaper article was not defamatory of the plaintiffs, but if it was defamatory that its publication was lawful by virtue of the defences under the Defamation Act of fair comment, truth and qualified privilege. The State asked the court to revisit the issue of its liability in view of defects in the statement of claim and to dismiss the proceedings against it; and in the alternative argued that no damages should be awarded against it due to insufficiency of evidence.

3. The elements of a cause of action in defamation are that firstly, the defendant made a defamatory imputation of the plaintiff, secondly, the defendant published it, and thirdly, 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).

ISSUES

4. The first major issue to resolve is the liability of Pacific Star. This requires the court to determine whether the article was defamatory of either or both plaintiffs and if it was, there being no issue that the article was published, whether any of the defences apply. If any of the defences apply, publication of the defamatory matter will be protected, justified or excused by law and therefore not unlawful. Next, the question of liability of the State will be addressed. Finally the question of damages will be raised. The issues will be addressed in this order:

1 Was the article defamatory of SMY Luluaki Ltd and/or Mr Luluaki?

2 Does the defence of fair comment apply?

3 Does...