Solicitors’ defamation law argument fails: David v Abdishou [2012] NSWCA 109

Karl Suleman

The appellants (who were the plaintiffs at the trial) were solicitors who acted for Karl Suleman. In 2000 and 2001, Suleman induced many members of the Assyrian community in Sydney to invest in his supermarket trolley business, which ultimately collapsed. Many people lost their investments and those people in the Assyrian community sought to attribute some of the losses to the appellants.

A number of Assyrian representatives complained to the Legal Services Commissioner about what they believed was the appellants’ involvement with Mr Suleman, his business and their lost investments. To move things along, they thought that things might be advanced if they got a petition together. A petition was prepared and to get signatures on that petition, a public meeting was held on 27 November 2005, at which time the petition was read out.

Sounds simple enough, but there were 6 defendants at the trial, 1 of whom, being the man who read the petition out (the fourth defendant), was in the plaintiffs’ camp. There were substantial fights on the facts as to what happened and there was a 4-week trial before a jury in the District Court of NSW.

The parties fought about a whole raft of facts, including whether other defendants wanted the petition read out, and if so, who agreed that it be read out, then whether it was understood by anyone (many people there could not speak English), and if so, whether it was defamatory. The trial judge summed up to the jury over 3 days.

In the end of that trial, the defendants won. The jury found that the plaintiffs had not established that the petition had been published by it having been circulated at the meeting. The jury also found that the imputations claimed by the plaintiffs were not conveyed by the written petition, and although one of the defendants had read it out at the meeting (and another had agreed that he do so), none of the imputations were conveyed by that oral publication either. So the plaintiffs were left with the costs of a 40-day trial with 6 defendants.

Not satisfied with that, the plaintiffs appealed. While there were many issues in the appeal, and the judgment is long, the 3 main issues were these [4]:

  • whether the jury’s finding that the plaintiffs had not established that the first, third and seventh defendants published the petition by circulating it at the general meeting was one no jury properly directed could make;
  • whether the jury’s finding that the plaintiffs had not established that the imputations were conveyed by the petition was one no jury properly directed could reasonably make;
  • if yes to 1 or 2, whether the court should order a new trial on the issue or direct a verdict in the plaintiffs’ favour on that issue.

The petition itself said a number of things about the plaintiffs, including these:

  •  The petition sought an investigation into the conduct and involvement of Mr Suleman’s professional advisors, including the plaintiffs;
  • Many members of the Assyrian community trusted the advisors, (including the plaintiffs) and those people invested substantial monies as a result;
  • The scheme failed and caused family breakdowns, loss of homes, migration interstate for cheaper housing and lifestyle, and continuing financial hardships among members of the Assyrian community;
  • The plaintiffs were close associates of Mr Suleman, whose scheme was a Ponzi type pyramid scheme;
  • The plaintiffs, as solicitors, were advised by a barrister in late 2000 that the Suleman business was a managed investment scheme that required registration with ASIC, but the plaintiffs continued seeking investors without attending to that;
  • The Suleman business collapsed in November 2001 and the majority of the investment from the Assyrian community came in the second half of 2001.

The issue of publication was the hot one at trial. The plaintiffs alleged the defendants published defamatory material in two ways: circulation of the petition at the public meeting and reading the petition out.

The defendant who read out the petition (the fourth), settled with the plaintiffs before the trial. The settlement was on the basis that he would provide evidence of truth to the court for the purposes of the case and the plaintiffs would not enforce any judgment against him [43]. Not sure what consideration the fourth defendant actually gave for that deal….

Anyway, the fourth defendant then gave evidence that was opposed to the other defendants.

The story came down to this. The remaining defendants gave evidence that they never agreed that the petition be read out at the meeting, while the fourth defendant gave evidence that they had all agreed. As a result, they all had the pleasure of being cross-examined for days about their credibility.

In the end, the jury did not accept the evidence of the fourth defendant [315].

Otherwise, the plaintiffs did not call evidence from a single person that attended the meeting, who said that they understood what had been read out from the petition. It so happened that the petition was the only time that English was used at the meeting.

On appeal, there was much discussion about the trial judge’s address to the jury, questions that had been asked, answered, and should not have been answered by the jury, and also the principles about setting aside a jury verdict as being unreasonable. But the novel legal  argument in this appeal was about publication.

The petition was available for people to read at the meeting. It had been placed on the tables. But the plaintiffs called no evidence from anyone who actually read it. The plaintiffs argued that they did not need to. Relying on the 2001 Gutnick case, they argued that the High Court held that for a plaintiff to prove publication, all that needed to be established was that a publication was available in comprehensible form and need not necessarily have been read or understood by anyone. This interpretation was very new.

Maybe the principle could be found in the Gutnick decision, but one has to squint. And use binoculars. Probably with a tripod. In any event, the idea was very well camouflaged, and the Court of Appeal did not see it [246]- [269]. Beazley JA summarized it in the following single-paragraph judgment:

“I only wish to record that the appellant’s challenge to the trial judge’s directions in publication was novel, if not revolutionary. A novel proposition may represent a proper application or development of existing law. However, the proposition advanced by the appellant that there could be `publication’ without communication to another person fits neither of those descriptions. Indeed, it is contrary to all existing principle. Were it to be accepted, it would change the essential nature of defamation. The appellant’s submission that this proposition is to be found in the High Court’s judgment of Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575 is misguided. There is no basis for an argument that the High Court, in that case, changed centuries of basic defamation law. Neither the language used by the High Court, nor its reasoning, gives any support to the proposition advanced.”

So the NSW Court of Appeal were not having a bar of it [285]. They concluded that the trial judge was right to direct the jury that for the plaintiffs to prove publication, they had to prove that at least one other person had read and understood the matter complained of.

It then became a matter of whether it could be inferred that a person at the meeting read the petition. It was held that it was not “preposterous”  for the jury to find that no-one had read it [314]. Signature forms were separate to the legalistic petition, of which there were very few available, and many people in the audience could not read English. Ultimately, the jury’s verdict was not unreasonable, there had been no miscarriage of justice and the appeal was dismissed with costs [325].

Whether the plaintiffs try to take their publication idea to the High Court remains to be seen. On with the revolution.