Child care employer taught $150,000 lesson: Association of Quality Child Care Centres of NSW v Manefield [2012] NSWCA 123

 

NSW Supreme Court

The Association of Quality Child Care Centres in NSW was an incorporated association with an executive committee of 10 members. Bruce Manefield was the Executive officer from 7 February 2006 until 16 May 2008 and is the plaintiff in this case.

While employed, Manefield set up a database, with the assistance of consultants, to identify members, and the membership increased over that time from 300-400 members to 650. Late in 2007, Manefield was a part of discussions with equivalent associations in Victoria and Queensland to create a federal umbrella organisation. When deciding a name, Manefield proposed “Early Learning Australia” and was told not to register that name for the proposed national body.

In May 2008, Manefield was called to a meeting of the Association’s Executive, and was told that he would be dismissed as he was not doing the work he had been employed to do. The complaint was that he was spending too much time managing staff and not enough raising revenue and that his relationship with the Executive had irrevocably broken down. On 16 May, he was fired.

After that, Manefield stayed interested in early childhood learning and with some others, decided to establish a company limited by guarantee that would provide services in child care. The company was registered under the name “Early Learning Australia” and was intended to operate Australiawide.

On 4 July 2008, Manefield sent an email to the Association outlining the new company’s functions and attached a draft letter that he intended to send to other service operators. At the end of the letter was this: “I will call you in the next few days to set up a mutually convenient time to meet with your Executive Committee to discuss the opportunities for working together”.

But the Association was not altogether keen on the idea. It prepared a draft letter of demand that was to be sent to Manefield, alleging that he using the Association’s confidential information and telling him to stop. That letter was not sent back to him. But

on 7 July 2008, the Association sent a different letter to all of its members. It said this:

Dear Child Care Operators,

(1)   As some of you may be aware, Mr Bruce Manefield is no longer in the position of Executive Officer of Child Care NSW.;

(2)   A decision to terminate Mr Manefield’s services was taken by the Executive following a meeting between nominated representatives of the Executive….;

(3)   Members should be advised that Mr Manefield remains under ongoing duty of confidentiality to the Child Care NSW in terms of information to which he has become privy by virtue of and during the course of his employment …. This information includes, but is not limited to, membership lists. We have reason to believe that Mr Manefield is in the process of contacting members, and we suspect that he is availaing himself of confidential information in order to do so;

(4)   Members are advised to respond cautiously to any approach by Mr Manefield, or any person acting in connection with Mr Manefield, particularly given the legal ramifications which may arise….

(8) We have at our disposal, the infrastructure, the resources and the personnel which will enable and equip us to face the challenges ahead far better than any alternative body, and we ask you not to be deluded into thinking otherwise.”

 Manefield sued for defamation. He alleged imputations that included:

  • The plaintiff is an untrustworthy person prepared to use devious and underhand means to take members away from the defendant;
  • The plaintiff is a dishonest person prepared to deceive the defendant’s members;
  • The plaintiff had attempted to deceive members of the defendant.

He claimed damages and the Association pleaded the defence of qualified privilege. Manefield alleged that any qualified privilege defence was defeated because the Association was actuated by malice.

The trial ran in the District Court and the plaintiff won $150,000. The Association appealed. Its grounds of appeal were basically that the trial judge erred because:

  1. the letter did not contain the pleaded imputations;
  2. the defence of qualified privilege ought to apply and was not defeated by malice; and
  3. damages were excessive.

Imputations

Beazley JA (with whom McColl Ja and Tobias AJA agreed), held that there was no error in holding that the email conveyed the imputations. The final sting came from the use of the word “deluded” in paragraph 8 and the ordinary reasonable reader would have clearly understood that the plaintiff was prepared to use devious and underhanded means [37-38], leading to a firm of impression of dishonesty [45], [49], [54] and [61]. This was even though the word “dishonest” was not used.

Qualified privilege

The trial judge held that the matter was published on an occasion of qualified privilege, but that the defence was defeated because the Association was actuated by malice. The reason was that the Association’s purpose in sending the letter was to illegitimately stifle competition.

Beazley JA held there was no error in finding that the defence of qualified privilege applied, even though the letter was wrong and defamatory [98]-[99]. At the trial, it was found that on leaving his employment, Manefield had left his laptop in the office and had not retained any membership list or confidential material. Nor were there any restraints in his contract of employment [81], so it could not be said that he used the Association’s confidential information or was in breach of any legal obligations he owed to the Association.

The issue  then was malice. At the trial, Manefield relied on the draft letter of demand to establish malice on the part of the Association. Even though the letter was not sent, Manefield alleged that the Association were trying to make a pre-emptive strike against his proposed business. If the letter did not go in, then Manefield had no evidence of malice and the Association’s defence was made out. So the stakes were high.

The trial judge apparently never made a formal ruling on it but referred to the draft letter in the judgment. The Association argued that it should not have been allowed into evidence, if it technically had been. In the appeal, it failed on that argument as well [125], and so the trial judge’s finding of malice was correct.  The purpose of the letter was to blacken the plaintiff’s name [138].

Damages

The plaintiff gave evidence that after the email, the business of “Early Learning Australia” ground to a halt and basically everyone thought he was a dishonest person [144]. While it was held that the award of $150,000 was generous, it was concluded that there was no error in the decision. The trial judge had clearly been impressed by Mr Manefield as a witness, and accepted that his feelings been hurt and that his reputation had been damaged. Appeal dismissed.

 

 

This entry was posted in Damages, Defamatory meaning, Qualified privilege, Reciprocal duty-interest, Trial and tagged . Bookmark the permalink.

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