Australian Broadcasting Corporation v Chau Chak Wing
[2019] FCAFC 125
•2 August 2019
FEDERAL COURT OF AUSTRALIA
Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125
Appeal from: Wing v The Australian Broadcasting Corporation [2018] FCA 1340 File number: NSD 1760 of 2018 Judges: BESANKO, BROMWICH AND WHEELAHAN JJ Date of judgment: 2 August 2019 Catchwords: DEFAMATION – pleadings – common law justification – primary judge struck out variant meanings – David Syme & Co Ltd v Hore-Lacy – respondents’ imputations that there were reasonable grounds to believe not permissible variants of the applicant’s imputations – untenable pleading of justification for the purposes of adducing evidence in mitigation of damage disallowed – leave to appeal given – appeal dismissed.
PRACTICE AND PROCEDURE – application for leave to appeal primary judge’s decision to strike out common law justification and statutory truth defences – application for leave to appeal dismissal of application for leave to file amended defence – adequacy of particulars of defences – primary judge held particulars imprecise, embarrassing, conclusory, hearsay, could not support defence of truth – whether the meaning of an applicant’s pleaded imputation is a question of fact for trial – meaning of a pleaded imputation not a triable issue – leave to appeal given – appeal dismissed.
Legislation: Criminal Code Act 1995 (Cth), Divisions 91 and 92
Defamation Act 2005 (NSW), 8, 25, 26, 30, 36
Defamation Act 2005 (Vic), 22
Defamation Act 1974 (NSW), 9, 9(2)
Defamation Act 1992 (NZ), 8(2)(a)
Federal Court of Australia Act 1976 (Cth), 37M, 37N
Federal Court Rules 2011 (Cth), 16.01(c), 16.02, 16.02(d), 16.03, 16.03(1), 16.06, 16.08, 16.41, 16.42, 16.43, 16.43(2), 39.32
Legal Profession Uniform Conduct (Barristers) Rules 2015, 64
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015, 21.3
National Security Legislation Amendment (Espionage and Foreign Interference) Act 2018 (Cth)
Parliamentary Privileges Act 1987 (Cth), 16(3), 16(3)(a)
Uniform Civil Procedure Rules 2005 (NSW), 14.30(2)(a)
Supreme Court Rules 2000 (Tas), 263B(2)(a)
Cases cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Advertiser-News Weekend Publishing Co Ltd v Manock [2005] SASC 82; (2005) 91 SASR 206
Allsop v Church of England Newspaper Ltd [1972] 2 QB 161
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175
APN New Zealand Ltd v Simunovich Fisheries Ltd [2009] NZSC 93; [2010] 1 NZLR 315
Associated Leisure Ltd v Associated Newspapers Ltd [1970] 2 QB 450
Associated Newspapers Ltd v Dingle [1964] AC 371
Atkinson v Fitzwalter [1987] 1 WLR 201
Barclay v Cox [1968] VR 664
Berezovsky v Forbes Inc [2001] EMLR 45
Broadcasting Corporation of New Zealand v Crush [1988] 2 NZLR 234
Brooks v Fairfax Media Publications Pty Ltd (No 2) [2015] NSWSC 1331
Burstein v Times Newspapers Ltd [2000] EWCA Civ 338; [2001] 1 WLR 579
CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; (2009) 239 CLR 390
Chakravarti v Advertiser Newspapers Ltd (1996) 65 SASR 527
Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; 193 CLR 519
Chalmers v Shackell (1834) 6 Car & P 475; 172 ER 1326
Chamberlain v The Queen (No 2) (1984) 153 CLR 521
Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245
Channel Seven Adelaide Pty Ltd v S, DJ [2006] SASC 10; 94 SASR 296
Charan v Nationwide News Pty Ltd [2019] VSCA 36
Charleston v News Group Newspapers Ltd [1995] 2 AC 65
Chase v News Group Newspapers Ltd [2002] EWCA Civ 1772; [2003] EMLR 11
Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623
Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; 249 FCR 421
Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86
Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227
Crampton v Nugawela (1996) 41 NSWLR 176
Cruddas v Calvert [2015] EMLR 16
Cunliffe v Woods [2012] VSC 254
Cruise v Express Newspapers plc [1999] QB 931
Dare v Pulham (1982) 148 CLR 658
David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667
DDSA Pharmaceuticals Ltd v Times Newspapers Ltd [1973] QB 21
Dhir v Saddler [2017] EWHC 3155 (QB); [2018] 4 WLR 1
Director of Public Prosecutions (Cth) v Thomas [2016] VSCA 237; 53 VR 546
Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135
Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547
Fairfax Media Publications Pty Ltd v Bateman [2015] NSWCA 154; 90 NSWLR 79
Fairfax Media Publications Pty Ltd v Gayle [2019] NSWCA 172
Fallon v MGN Ltd [2006] EWHC 783
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89
Faruqi v Latham [2018] FCA 1328
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; 221 ALR 186
Fenn v Australian Broadcasting Corporation [2018] VSCA 166
Flood v Times Newspapers Ltd [2012] UKSC 11; [2012] 2 AC 273
Gacic v John Fairfax Publications Pty Ltd [2011] NSWCA 362
Gallagher v Destiny Publications Pty Ltd (No 2) [2015] WASC 475
George v Rockett (1990) 170 CLR 104
Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478
Greek Herald Pty Ltd v Nikolopoulos (2002) 54 NSWLR 165
Gumina v Williams (No 2) (1990) 3 WAR 351
Gutnick v Dow Jones & Co Inc (No 4) [2004] VSC 138; 9 VR 369
Hadzel v De Waldorf (1970) 16 FLR 174
Harbour Radio Pty Ltd v Trad [2012] HCA 44; 247 CLR 31
Hanson-Young v Leyonhjelm [2018] FCA 1688
Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; 87 NSWLR 609
Hicks v Gregory (1904) 6 WALR 100
Hobbs v Tinling (CT) & Co Ltd [1929] 2 KB 1
Hockey v Fairfax Media [2015] FCA 652; 237 FCR 33
Hore-Lacy v Cleary [2007] VSCA 314; 18 VR 562
Hough v London Express Newspaper Ltd [1940] 2 KB 507
Howden v Truth & Sportsman Ltd (1937) 58 CLR 416
Howden v “Truth” and “Sportsman” Ltd (No. 2) (1938) 38 SR (NSW) 287
Hyams v Peterson [1991] 3 NZLR 648
In re the Will of F B Gilbert (Deceased) (1946) 46 SR (NSW) 318
John Fairfax & Sons Ltd v Foord (1988) 12 NSWLR 706
John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227
Jones v Pollard [1997] EMLR 233
Jones v Skelton [1963] 1 WLR 1362
Kerney v Optimus Holdings Pty Ltd [1976] VR 399
King v Lintrose Nominees Pty Ltd (2001) 4 VR 619
Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2013] WASC 347
Lewis v Daily Telegraph [1964] AC 234
Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147
Mickelberg v Hay [2006] WASC 285
Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293
Moore v Mitchell (1886) 11 OR 420
Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
Nationwide News Pty Limited v Rush [2018] FCAFC 70
Pahuja v TCN Channel Nine Pty Ltd (No 2) [2016] NSWSC 1074
Pamplin v Express Newspapers Ltd [1988] 1 WLR 116
Petritsis v Hellenic Herald Pty Ltd [1978] 2 NSWLR 174
Phelps v Nationwide News Pty Ltd [2001] NSWSC 130
Polly Peck (Holdings) plc v Trelford [1986] QB 1000
Prager v Times Newspapers [1988] 1 WLR 77
Prichard v Krantz (1984) 37 SASR 379
Rakhimov v Australian Broadcasting Corporation [2001] NSWSC 10
Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460
Rofe v Smith’s Newspapers Ltd (1924) 25 SR (NSW) 4
Rush v Nationwide News Pty Ltd [2018] FCA 357; 359 ALR 473
Rush v Nationwide News (No 2) [2018] FCA 550; 359 ALR 564
Sands v Channel Seven Adelaide Pty Ltd [2005] SASC 182; 91 SASR 466
Sands v Channel Seven Adelaide Pty Ltd [2010] SASC 202
Scott v Sampson (1882) LR 8 QBD 491
Setka v Abbott [2014] VSCA 287; 44 VR 352
Setka v Abbott (No 2) [2013] VSC 726
Shah v Standard Chartered Bank [1999] QB 241
Shepherd v R (1990) 170 CLR 573
Singleton v Ffrench (1986) 5 NSWLR 425
Slim v Daily Telegraph Ltd [1968] 2 QB 157
Soultanov v The Age Company Ltd (2009) 23 VR 182
Speidel v Plato Films Ltd [1961] AC 1090
Sutherland v Stopes [1925] AC 47
Television New Zealand Ltd v Haines [2006] 2 NZLR 433
Templeton v Jones [1984] 1 NZLR 448
Ten Group Pty Ltd v Cornes [2012] SASCFC 99;114 SASR 46
The Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1
Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125
Trkulja v Google LLC [2018] HCA 25; 356 ALR 178
Truth (NZ) Ltd v Bowles [1966] NZLR 303
Truth (New Zealand) Ltd v Holloway [1961] NZLR 22
Turner v News Group Newspapers Ltd [2006] 1 WLR 3469
West Australian Newspapers v Elliott [2008] WASCA 172; 37 WAR 387
Wilson v The Mutual Store Ltd (1899) 25 VLR 262
Woodger v Federal Capital Press of Australia Pty Ltd (1992) 106 FLR 183
Wootton v Siever [1913] 3 KB 499
Zierenberg v Labouchere [1893] 2 QB 183
Duncan and Neill on Defamation (2nd ed, Butterworths, 1983)
Gatley on Libel and Slander (4th ed, Sweet & Maxwell, 1953)
Gatley on Libel and Slander (11th ed, Sweet & Maxwell, 2008)
Glass, McHugh and Douglas, The Liability of Employers (Law Book Co, 1979)
Date of hearing: 21 February 2019 Registry: New South Wales National Practice Area: Other Federal Jurisdiction Division: General Division Category: Catchwords Number of paragraphs: 184 Counsel for the Applicants: Dr MJ Collins QC with Mr MJ Lewis Solicitor for the first Applicant: Michael Rippon, Australian Broadcasting Corporation
Solicitor for the second and third Applicants: Minter Ellison Counsel for the Respondent: Mr B McClintock SC with Mr M Richardson Solicitor for the Respondent: Mark O’Brien Legal
Table of Corrections 13 July 2020 Cover page, cases cited field has been amended. 13 July 2020 [3] corrected spelling of “Philip”. 13 July 2020 [31] case citation Hough v London Express Newspapers Ltd corrected to “Newspaper”. 13 July 2020 [44] and [47] Pritchard v Kranz corrected spelling to Prichard v Krantz. 13 July 2020 [86] cross-reference updated. 13 July 2020 [120] deletion of the word “in” from the third line. 13 July 2020 [128] spelling of the name “Ashe” corrected from “Asche”. 13 July 2020 [142] cross reference updated. 13 July 2020 [169] and [171] case citation Greek Herald Pty Ltd v Nikolopoulos corrected spelling of “Nikolopoulos”. ORDERS
NSD 1760 of 2018 BETWEEN: AUSTRALIAN BROADCASTING CORPORATION
First Applicant
FAIRFAX MEDIA PUBLICATIONS PTY LIMITED ACN 003 357 720
Second Applicant
NICK MCKENZIE
Third Applicant
AND: CHAU CHAK WING
Respondent
JUDGES:
BESANKO, BROMWICH AND WHEELAHAN JJ
DATE OF ORDER:
2 AUGUST 2019
THE COURT ORDERS THAT:
1.The applicants have leave to appeal the orders of the primary judge made 31 August 2018.
2.The appeal be dismissed.
3.The applicants pay the respondent’s costs of the application and of the appeal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules (Cth) 2011.
REASONS FOR JUDGMENT
THE COURT:
Introduction
Before the Court is an application for leave to appeal and, if leave is given, an appeal from interlocutory orders of the primary judge made 31 August 2018 in a defamation proceeding. By the orders, parts of the respondents’ defence in the proceeding were struck out, and an application for leave to file an amended defence was dismissed.
To avoid confusion, we shall refer to the parties by reference to their designation in the substantive proceeding, that is, as the applicant and the respondents. We shall also from time to time refer to claimants generally in defamation proceedings as plaintiffs, which is the term used in the Defamation Act 2005 (NSW) (Act) and the corresponding provisions in the defamation legislation of the other states and territories. Because of the uniform nature of that legislation, we shall refer to the New South Wales Act. In referring to the respondents’ pleadings, we shall refer principally to the proposed amended defence, and references to paragraphs of the respondents’ particulars shall be to the paragraph numbers appearing in that document.
Caution should be exercised by an appellate court in reviewing interlocutory decisions on matters of practice and procedure, including the adequacy of pleadings: see the observations of Lee J in the Full Court in Nationwide News Pty Limited v Rush [2018] FCAFC 70, and his Honour’s reference at [4] to In re the Will of F B Gilbert (Deceased) (1946) 46 SR (NSW) 318 at p 323 (Jordan CJ). These considerations are relevant not only to whether leave to appeal should be given, but also to any appeal itself. On any appeal from interlocutory orders, it is necessary for an appellant to demonstrate error in the orders under challenge, and not merely the reasons for decision: King v Lintrose Nominees Pty Ltd [2001] VSCA 140; 4 VR 619 at [22] (Callaway JA). In addition, the extent of injustice flowing from interlocutory orders that are challenged will generally be a relevant and necessary consideration: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ). In this case, the potential extent of injustice is to be evaluated on the footing that the effect of the primary judge’s orders was to shut the respondents out from pursuing defences of justification at trial that they submitted were arguable: see Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227 at [14] (McColl JA, Bathurst CJ and Gleeson JA agreeing), citing Berezovsky v Forbes Inc [2001] EMLR 45 at [16] (Sedley LJ). However, any injustice of this type may not necessarily be irremediable, because at least in some circumstances an appeal may be brought from final orders at trial on the ground of some error in an interlocutory decision that affected the final result: Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478 at [4]-[8] (Gaudron, McHugh and Hayne JJ).
Background
The applicant has commenced a proceeding in the Court claiming damages for defamation in respect of the publication of two matters. The first matter is a “Four Corners” television program that was published on television channels of the first respondent (ABC), initially on 5 June 2017. The second matter is an internet article that was published on the ABC’s website, which included video of the Four Corners program, and which was available for downloading from 5 June 2017. A transcript of the Four Corners program is attached to the primary judge’s reasons. The applicant relies on publication in each State and Territory of Australia. He alleges that the two matters were promoted and published as a joint investigation between the ABC and the second respondent (Fairfax) and that the third respondent (Mr McKenzie) presented the two matters. The ABC and Mr McKenzie admit publication of the two matters, but Fairfax denies publication.
By his amended statement of claim the applicant alleges that each of the two matters in its natural and ordinary meaning conveyed the following six imputations –
(a)The Applicant betrayed his country, Australia, in order to serve the interests of a foreign power, China, and the Chinese Communist Party by engaging in espionage on their behalf.
(b) [Deleted]
(c) [Deleted]
(d)The Applicant is a member of the Chinese Communist Party and of an advisory group to that party the People’s Political Consultative Conference (CPCCC) and, as such, carries out the work of a secret lobbying arm of the Chinese Communist Party, the United Front Work Department.
(e)The Applicant donated enormous sums of money to Australian political parties as bribes intended to influence politicians to make decisions to advance the interests of the Republic of China, the Chinese government and the Chinese Communist Party.
(f)The Applicant paid Sheri Yan, whom he knew to be a corrupt espionage agent of the Chinese government, in order to assist him in infiltrating the Australian government on behalf of the Chinese Communist Party.
(g)The Applicant paid a $200,000 bribe to the President of the General Assembly of the United Nations, John Ashe.
(h)The Applicant was knowingly involved in a corrupt scheme to bribe the President of the General Assembly of the United Nations.
The applicant also alleges that each of the two matters conveyed the following true innuendo based upon extrinsic facts, namely the terms of the pledge of loyalty taken by all persons upon becoming Australian citizens –
The applicant broke the pledge of loyalty he took to Australia on becoming an Australian citizen by secretly advancing the interests of a foreign power at the expense of the interests of Australia.
The primary judge recorded at [2] that he had found that the applicant’s imputations were capable of being conveyed during the course of oral argument on 18 August 2017. In this application for leave to appeal interlocutory orders, there was no challenge to the capacity of the Four Corners program to convey the imputations alleged by the applicant: whether any of the imputations alleged by the applicant was conveyed is a matter for trial.
By their defence, the respondents denied that any of the imputations or the true innuendo alleged by the applicant was reasonably capable of being conveyed, or was in fact conveyed by the matters. In the alternative, the respondents alleged three defences: (i) truth under s 25 of the Act; (ii) truth at common law; and (iii) statutory qualified privilege under s 30 of the Act.
By their truth defences the respondents alleged that each of the applicant’s imputations was substantially true. In addition, the respondents alleged seven variant imputations, and alleged that the variant imputations were substantially true. Each variant imputation corresponded to one of the applicant’s imputations, prefaced by the words, “There are reasonable grounds to believe that…”. The variant imputations that corresponded to the applicant’s imputations based upon the natural and ordinary meaning of the matters were as follows –
Variant Imputation 5(a): There are reasonable grounds to believe that the Applicant betrayed his country, Australia in order to serve the interests of a foreign power, China, and the Chinese Communist Party by engaging in espionage on their behalf.
Variant Imputation 5(d): There are reasonable grounds to believe that the Applicant is a member of the People’s Political Consultative Conference (CPCCC), an advisory group to the Chinese Communist Party, and which carries out the work of a secret lobbying arm of the Chinese Communist Party, the United Front Work Department.
Variant Imputation 5(e): There are reasonable grounds to believe that the Applicant donated enormous sums of money to Australian political parties as bribes intended to influence politicians to make decisions to advance the interests of the People’s Republic of China, the Chinese government and the Chinese Communist Party.
Variant Imputation 5(f): There are reasonable grounds to believe that the Applicant paid Sherri Yan, whom he knew to be a corrupt espionage agent of the Chinese government, in order to assist him in advancing the interests of the Chinese Communist Party in his dealings with the Australian government.
Variant Imputation 5(g): There are reasonable grounds to believe that the Applicant paid a $200,000 bribe to the President of the United Nations, John Ashe.
Variant Imputation 5(h): There are reasonable grounds to believe that the Applicant was knowingly involved in a corrupt scheme to bribe the President of the General Assembly of the United Nations.
The variant imputation that corresponded to the applicant’s true innuendo was as follows –
Variant Imputation 7(a): There are reasonable grounds to believe that the Applicant broke the pledge of loyalty he took to Australia on becoming an Australian citizen by secretly advancing the interests of a foreign power at the expense of the interests of Australia.
Particulars of the truth defences were set out in schedules to the defence and the proposed amended defence.
The applicant made an interlocutory application to have the truth defences struck out. That application was heard together with an oral application by the respondents to file an amended defence which proposed amendments to the particulars supporting the truth defences. By orders made 31 August 2018 the primary judge struck out the truth defences and their particulars, and dismissed the application for leave to file an amended defence. From those orders the respondents seek leave to appeal.
There were two grounds on which the truth defences were struck out and on which the application to file an amended defence was dismissed. First, the primary judge held that each of the so-called variant imputations was not a permissible variant of the applicant’s imputations, and that there was no reasonable basis to hold that proof of the truth of the variant imputations would be a defence to any of the applicant’s imputations. Second, the particulars of truth in the schedule to the defence and the proposed amended defence were, in a number of respects, imprecise, embarrassing, conclusory, hearsay, did not provide a basis for the inferences that were alleged to arise from the facts alleged in the particulars, did not provide proper particulars of allegations of knowledge, and otherwise failed to comply with the rules of pleading in r 16.41 and r 16.43 of the Federal Court Rules 2011 (Cth) and the principles of pleading essayed in the authorities. The primary judge held that the particulars could not reasonably support the respondents’ plea of truth to the applicant’s imputations.
The application for leave to appeal relied on a draft notice of appeal containing 14 grounds, which fell into two categories. Proposed grounds 1 to 4 challenged the primary judge’s decision to strike out the respondents’ so-called variant imputations, and proposed grounds 5 to 14 challenged the primary judge’s conclusions supporting the orders striking out the respondents’ particulars of truth. It is convenient to consider the issues raised on the application in two parts, reflecting the division in the draft notice of appeal.
The variant imputations – proposed grounds 1 to 4
The publication of a matter, such as a feature television program or newspaper article, may convey a range of different imputations about a person. Some imputations might be defamatory, while others may not. Some imputations might rest upon matter which is fair comment, or honest opinion. Some imputations might be substantially true. General principles of pleading now invariably require that a defendant to a defamation proceeding is entitled to know what defamatory imputations are relied upon by a plaintiff: Hadzel v De Waldorf (1970) 16 FLR 174 at p 179; Allsop v Church of England Newspaper Ltd [1972] 2 QB 161 at p 167; DDSA Pharmaceuticals Ltd v Times Newspapers Ltd [1973] QB 21 at p 26; Kerney v Optimus Holdings Pty Ltd [1976] VR 399; Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; 193 CLR 519 (Chakravarti) at [16], [52]; David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667 (Hore-Lacy) at [18]; cf, Lewis v Daily Telegraph [1964] AC 234 at p 265, 273; Slim v Daily Telegraph Ltd [1968] 2 QB 157 at p 168-9, 176, 177 and 185‑6. In some jurisdictions, the rules of procedure require that a statement of claim in a defamation proceeding specify the imputations that are relied upon: Uniform Civil Procedure Rules 2005 (NSW), r 14.30(2)(a); Supreme Court Rules 2000 (Tas), r 263B(2)(a). The requirement in the New South Wales Uniform Civil Procedure Rules that an imputation be specified has its origins in the practice rules that existed when the now-repealed Defamation Act 1974 (NSW) was in force, where s 9(2) of that Act provided for a cause of action in respect of each imputation: Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at p 136-7; Fairfax Media Publications Pty Ltd v Bateman [2015] NSWCA 154; 90 NSWLR 79 at [150]. Now, s 8 of the Defamation Act 2005 provides that a person has a single cause of action in relation to the publication of a defamatory matter even if more than one defamatory imputation is carried, which is consistent with the common law position in relation to imputations based upon the natural and ordinary meaning of words. Nonetheless, the statutory defences of truth and contextual truth under s 25 and s 26 of the Defamation Act respond to imputations alleged by a plaintiff, and afford a further reason as to why general rules and principles of pleading require that a plaintiff should plead imputations.
Generally speaking, it is open to a plaintiff in a defamation proceeding to choose upon what imputations he or she relies: Templeton v Jones [1984] 1 NZLR 448; Cruise v Express Newspapers plc [1999] QB 931; Phelps v Nationwide News Pty Ltd [2001] NSWSC 130 at [22]. This is an area of choice which, within proper limits, is available to a plaintiff: John Fairfax & Sons Ltd v Foord (1988) 12 NSWLR 706 (Mahoney JA). There is a statement to the contrary in the reasons of Seaman J in Gumina v Williams (No 2) (1990) 3 WAR 351 (Gumina v Williams (No 2)) at p 364. There, Seaman J, with whom Malcolm CJ and Pidgeon J agreed, stated that a tribunal of fact may still find for a plaintiff, even though the plaintiff does not make out the meanings for which the plaintiff contends, and rejected a submission that a plaintiff may confine the issues in the proceeding by the selection of meanings so as to prevent the defendant pleading other meanings and justifying them. In our view, these statements in Gumina v Williams (No 2) do not reflect modern pleading and trial practice in defamation proceedings. Seaman J relied on the decision of the Full Court of the Supreme Court of Victoria in Barclay v Cox [1968] VR 664 at p 666 for the proposition that a jury should not be asked whether the words were understood to have the meanings alleged by the plaintiff. That is no longer the practice in Victoria. As Beach JA noted in Setka v Abbott (No 2) [2013] VSC 726 at [34], under s 22 of the Defamation Act 2005 (Vic) damages are now a matter for the judge, and in order to assess damages the judge must know what imputations have been found by the jury to have been conveyed. For this reason also, the statement by Ormiston JA in Hore-Lacy at [2] that neither judge nor jury are “confined to the meanings asserted by the parties”, is no longer correct in the broad terms stated, but is subject to the current practice in Victoria that meanings are now left to juries, and otherwise to the limitations referred to by Charles JA in Hore-Lacy at [52], which are derived principally from the judgments of Brennan CJ and McHugh J, and Gaudron and Gummow JJ, in Chakravarti.
Under modern pleading practice, the plaintiff’s case will be shaped by the meanings alleged in the statement of claim, which will generally confine the questions of meaning for determination: Chakravarti at [17]-[21]. In Advertiser-News Weekend Publishing Co Ltd v Manock [2005] SASC 82; 91 SASR 206 (Advertiser-News) at [76] Doyle CJ (with whom Vanstone J and White J agreed) stated the position as follows –
Once the plaintiff pleads a meaning on which the plaintiff relies, that pleading will identify the meaning of which the plaintiff complains, and delimit the boundaries within which the action is to be fought. Although it is the publication of the defamatory material that is the tort, the function of the pleading is to identify the field of inquiry at the trial.
The above statement was cited with approval by the Victorian Court of Appeal in Setka v Abbott [2014] VSCA 287; 44 VR 352 at [47]. The field of inquiry at trial to which Doyle CJ referred in Advertiser-News, at least as far as the plaintiff’s meanings are concerned, may extend to meanings that are comprehended in, or are less injurious than, or are a mere shade or nuance of the pleaded meaning: Chakravarti at [21]-[22], [60], [139] at points 3 and 4; Advertiser-News at [77]. Whether, and to what extent, a plaintiff may be permitted at trial to depart from the pleaded meanings will be resolved by considerations of fairness and practical justice. Even in relation to imputations pleaded in support of causes of action arising under s 9(2) of the Defamation Act 1974 (NSW) there was some support for a degree of flexibility. In Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 at p 771D the New South Wales Court of Appeal held that upon a proper construction of the rules, an imputation specified in a statement of claim must be taken to include all imputations which do not differ in substance. See also, Crampton v Nugawela (1996) 41 NSWLR 176 at p 183C-D (Mahoney A-CJ).
The significance of words is their meaning. Until meaning is determined, it is not possible to evaluate whether a publication is justified, or whether other defences such as honest opinion, or common law comment are established. The defence of justification at common law requires that the publisher establish that the words are true in substance and in fact, which involves demonstrating that the sting, or stings conveyed by the matter are made out: Sutherland v Stopes [1925] AC 47 at p 79 (Lord Shaw). Immaterial aspects of the matter that make no difference to the quality of the imputation need not be justified: Rofe v Smith’s Newspapers Ltd (1924) 25 SR (NSW) 4 at p 20 (Street ACJ); Sutherland v Stopes at p 79; Howden v Truth & Sportsman Ltd (1937) 58 CLR 416 at p 420-421 (Dixon J). And because the defence of justification is a defence of confession and avoidance, in order to succeed it must respond to the meanings found by the court: Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245 at [83] (noting that the observations there were made in relation to the common law defence of comment). The statutory defence of truth under s 25 of the Defamation Act makes this explicit, because it requires that the defendant prove that the imputations carried by the matter of which the plaintiff complains are substantially true. Likewise, the pleading of a common law defence of justification should respond to the case alleged by the plaintiff: Chakravarti at [8], [13]; Fenn v Australian Broadcasting Corporation [2018] VSCA 166 at [48].
In Hore-Lacy, the Victorian Court of Appeal sanctioned the practice of defendants pleading justification to alternate meanings. However, consistently with what the Court considered was the majority view in Chakravarti, it held that a defendant was permitted to justify an alternate meaning only if it is comprehended by, or it is a variant of one of the meanings relied on by the plaintiff: Ormiston JA at [17]. That is because the questions whether, and to what extent a defendant may justify meanings different from those alleged by a plaintiff are necessarily bound up with the extent to which a plaintiff may be allowed at trial to depart from specific meanings alleged in the statement of claim: Charles JA at [46], with whom Ormiston JA at [23] agreed. Charles JA stated at [52] that it would seem that –
… all members of the court in Chakravarti would take the view that a plaintiff could, after pleading specific meanings by way of false innuendo, succeed at trial on a meaning other than the meanings pleaded, provided that the meaning was not substantially different from and was not more injurious than the meanings pleaded, and that the defendant was not in all the circumstances unfairly prejudiced by allowing that meaning to go to the jury.
At [60], Charles JA described the limitation as being that a defendant is limited to justifying a meaning on which the plaintiff might obtain a verdict. A justification defence that complies with this limitation will be a plea in respect of the imputations pleaded by a plaintiff: cf, Chakravarti at [8] (Brennan CJ and McHugh J). In formulating the principles in this way, the Court in Hore-Lacy necessarily rejected the broader approach in the English cases, represented by Polly Peck (Holdings) plc v Trelford [1986] QB 1000 at p 1032, and the earlier case of Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147 which it applied, and which approach was so strongly criticised by Brennan CJ and McHugh J in Chakravarti at [8]-[13].
In Setka v Abbott, the Victorian Court of Appeal confirmed that Hore-Lacy was correctly decided, and held that it continued to apply to the pleading of common law justification defences in proceedings subject to the uniform Defamation Acts. It is apt to mislead to describe a pleading in a form sanctioned by Hore-Lacy as a common law defence. Hore-Lacy sanctions only a form of pleading of the common law defence of justification. In this respect, we agree with the separate views of Whelan JA in Setka v Abbott at [310]-[312] that there is no separate Hore-Lacy defence at common law, and that the defence is one of justification. See also, Fairfax Media Publications Pty Ltd v Bateman at [147], [198] (Basten JA), and at [231]-[232] (McFarlane JA), and see contra, Setka v Abbott at [116], [121] (Warren CJ and Ashley JA). The foundation for pleading justification of permissible variant imputations is statute, namely the rules of pleading which in this Court relevantly include rr 16.02, 16.08, and 16.41 of the Federal Court Rules. Those rules are calculated to avoid trial by ambush, and to promote the precise identification of the issues that are before the Court, and as such, may require a respondent to plead any variant of a meaning alleged by an applicant that the respondent proposes to justify at trial: Hore-Lacy at [58] (Charles JA). However, whatever the shape of a defence of justification as permissibly pleaded, in order that a justification defence succeed at trial in respect of the publication of a matter, the common law requires that a respondent establish the substantial truth of all the meanings that are fairly within the imputations that are the subject of the applicant’s claim and which are found by the Court to have been conveyed and to have been defamatory of the applicant.
In this case, the parties accepted that it was open to a respondent in this Court to plead a common law justification defence consistently with the principles essayed in Hore-Lacy. The dispute, however, turned on whether in applying those principles the respondents’ variant imputations of the existence of reasonable grounds for belief were permissible variants of, and therefore responsive to the applicant’s pleaded meanings.
The primary judge held that the respondents’ imputations of reasonable grounds for belief were not permissible variants of the applicant’s meanings. That was because his Honour considered that there was a substantive distinction between a suspicion, however well-founded, and a fact. The primary judge relied on the speeches of Lord Devlin and Lord Reid in Lewis v Daily Telegraph at p 284 and p 260, the reasons for judgment of Mason J in Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 at p 302-303, and the reasons of the Court in George v Rockett (1990) 170 CLR 104 at p 112 to demonstrate the distinction. The respondents had relied on a decision of the Western Australian Court of Appeal in West Australian Newspapers v Elliott [2008] WASCA 172; 37 WAR 387 to support their submission that an imputation that there were reasonable grounds to believe a fact was a permissible variant of an imputation alleging the fact. The primary judge held that West Australian Newspapers vElliott was plainly wrong, and inconsistent with Mirror Newspapers Ltd v Harrison, and George v Rockett.
In this Court, the respondents submitted that the primary judge erred in his analysis in a number of respects. Central to the respondents’ case was a submission that there is no bright line distinguishing an allegation of guilt from an allegation that there are reasonable grounds to support a belief of guilt, and that publications will very often be capable simultaneously of conveying both allegations. Senior counsel for the respondents argued that the primary judge’s decision was inconsistent with the reasons of three of the five judges in Chakravarti, and was directly inconsistent with the decision of the Western Australian Court of Appeal in West Australian Newspapers v Elliott.
As to gradations of meaning, the respondents referred to a passage in the speech of Lord Devlin in Lewis v Daily Telegraph at p 285-286 –
Just as a bare statement of suspicion may convey the impression that there are grounds for belief in guilt, so a bare statement of the fact of an inquiry may convey the impression that there are grounds for suspicion. I do not say that in this case it does; but I think that the words in their context and in the circumstances of publication are capable of conveying that impression. But can they convey an impression of guilt? Let it be supposed, first, that a statement that there is an inquiry conveys an impression of suspicion; and, secondly, that a statement of suspicion conveys an impression of guilt. It does not follow from these two suppositions that a statement that there is an inquiry conveys an impression of guilt. For that, two fences have to be taken instead of one. While, as I have said, I am prepared to accept that the jury could take the first, I do not think that in a case like the present, where there is only the bare statement that a police inquiry is being made, it could take the second in the same stride. If the ordinary sensible man was capable of thinking that where-ever there was a police inquiry there was guilt, it would be almost impossible to give accurate information about anything: but in my opinion he is not.
The respondents submitted that in this passage Lord Devlin differentiated between what has become known in the English authorities as a “level 1” meaning (guilt); a “level 2” meaning (reasonable grounds for belief in guilt); and a “level 3” meaning (grounds for suspicion, or grounds for investigation): Chase v News Group Newspapers Ltd [2002] EWCA Civ 1772; [2003] EMLR 11 at [45]; Flood v Times Newspapers Ltd [2012] UKSC 11; 2 AC 273 at [8]. Counsel submitted that the authorities support the proposition that Lord Devlin’s speech in Lewis v Daily Telegraph should be understood so that a “level 1” meaning is often capable of conveying a “level 2” meaning, and that a “level 2” meaning is often capable of conveying a “level 1” meaning, but a “level 1” meaning is not capable of conveying a “level 3” meaning because it involves jumping two fences. Counsel submitted that the speech of Lord Devlin is to be understood as saying that while there is a difference between guilt, and reasonable grounds for a belief in guilt, an imputation of one can very often be understood to convey the other. Counsel submitted that if a plaintiff pleaded a “level 1” meaning, but a trial court found only that a “level 2” meaning was conveyed, then the plaintiff would nonetheless be entitled to a verdict on the “level 2” meaning, and that this was supported by the reasons for judgment of Mason J in Mirror Newspapers Ltd v Harrison at p 300-301, by the passage from Lord Devlin’s speech in Lewis v Daily Telegraph set out above, by Chakravarti at [60] (Gaudron and Gummow JJ), and by West Australian Newspapers v Elliott, which it shall be necessary to address. At the heart of the respondents’ submissions was the proposition that in the present case the applicant could succeed at trial on “level 2” meanings as being comprehended within his “level 1” meanings, and that therefore the justification defences alleging that “there are reasonable grounds to believe” the subject-matter of the applicant’s imputations raised valid defences.
In Lewis v Daily Telegraph at p 286 Lord Devlin gave examples of different forms of words, and hypothesised that a statement that there is an inquiry conveys an impression of suspicion, and that a statement of suspicion conveys an impression of guilt, and stated that it does not follow that a statement that there is an inquiry conveys an impression of guilt. Lord Devlin amplified this last proposition, and stated that in a case like that before the House, where there was only a bare statement that a police inquiry was being made, the jury could not take the leap and find that the bare statement of an inquiry conveyed the impression of guilt. So much is not controversial: Mirror Newspapers Ltd v Harrison at p 300-301 (Mason J). But meaning is so much dependent upon the words used and context, and whether a matter is capable of conveying imputations of both suspicion and guilt, or grades of meaning in-between, including whether the suspicion imputation is one of strong suspicion, reasonable suspicion, or mere suspicion, or whether it is objective or subjective, active or passive, will depend upon the terms and the context of the matter: see John Fairfax & Sons Ltd v Foord at p 714-715 (Mahoney JA), p 719, 723-725, 727-728 (Clarke JA, Hope JA agreeing); Rakhimov v Australian Broadcasting Corporation [2001] NSWSC 10 at [26]-[29] (Levine J); Sands v Channel Seven Adelaide Pty Ltd [2005] SASC 182; 91 SASR 466 at [41] (White J, at first instance); on appeal, Channel Seven Adelaide Pty Ltd v S, DJ [2006] SASC 10; 94 SASR 296 at [17]-[24] (Debelle J, Anderson J agreeing); Sands v Channel Seven Adelaide Pty Ltd [2010] SASC 202 at [121]-[122] (Gray J, with whom Nyland J and Vanstone J agreed). In our opinion, it is undesirable to seek to identify limited distinct categories of imputations, and to advance this as a taxonomy into which all imputations are to be placed. We respectfully agree with the following statement of White J at first instance in Sands v Channel Seven Adelaide Pty Ltd at [45] –
My present view is that the passage from Chase and the other English authorities should not be regarded as stating exhaustively all the possible imputations and shades of meaning which a statement of the existence of a suspicion may convey. I consider it desirable to avoid converting classification developed in some cases into strict categories. …
The decision of White J was affirmed on appeal in Channel Seven Adelaide Pty Ltd v S, DJ. In Sands v Channel Seven Adelaide Pty Ltd [2010] SASC 202 at [120] Gray J (with whom Nyland J and Vanstone J agreed) stated that the three-level categorisation of meanings, even if rigidly applied in the United Kingdom, has not been so embraced by the Australian courts. Even in the United Kingdom, caution has been expressed in relation to the rigid categorisation of degrees of meaning in the way suggested by the respondents. In Fallon v MGN Ltd [2006] EWHC 783 at [1], Eady J referred to the tripartite scale as being somewhat artificial, because words are capable of bearing an infinite variety of meanings and implications and, correspondingly, a range of levels of gravity which do not necessarily lend themselves to classification in one or other of the three categories. Eady J thought, however, that the categorisation was useful primarily because it represented a convenient way of identifying what should be pleaded if it is sought to advance a defence of justification to some defamatory allegation falling short of a direct attribution of guilt, and noting that it appeared to have had the imprimatur of Lord Devlin in Lewis v Daily Telegraph. The Supreme Court of New Zealand in APN New Zealand Ltd v Simunovich Fisheries Ltd [2009] NZSC 93; [2010] 1 NZLR 315 at [16] also cautioned against the tripartite classification being allowed to dictate meaning –
This tripartite classification provides a convenient general description of different forms of meaning. Care must, however, be taken lest classification be allowed to dictate meaning. The crucial first step is to identify the precise meaning of the words in issue, rather than attempting to force that meaning into one of the three “tiers”. Meanings in different tiers may shade into each other, rather than always falling neatly into one compartment or another. The precise meaning of the words in question is crucial to whether truth or honest opinion defences are made out. Furthermore, it does not necessarily follow that a “tier one” meaning is always more serious than a “tier two” meaning, or a “tier two” meaning more serious than a “tier three” meaning. Everything depends on the precise words used, and the context in which they are used.
As we have explained, the rationale behind permitting a respondent to plead and rely upon variant meanings in accordance with the principles of pleading essayed in Hore-Lacy, is that a respondent should be permitted to plead a defence of justification to a meaning on which the applicant is entitled to judgment at trial. Further, where a respondent proposes at trial to justify such meaning, that course should be the subject of a pleading. To state the principles in these terms frames one of the issues in this case: would the applicant be entitled to judgment at trial if the Court rejected the applicant’s imputations, but found that one of the lesser meanings alleged by the respondents was conveyed, namely that “there were reasonable grounds to believe” the material facts the subject of the corresponding imputation alleged by the applicant? That question is to be answered by an examination of the parties’ pleadings against considerations of fairness and practical justice.
We do not accept the respondents’ submission that the applicant in this case will be entitled to succeed at trial on the respondents’ imputations. The applicant has not pleaded those imputations, they are not bound within the applicant’s imputations, and they will not be in issue at trial. A convenient starting point is to recognise that the Court at trial is required to determine the meaning which the two matters conveyed to an audience or readership composed of ordinary decent persons, being reasonable people of ordinary intelligence, experience and education who bring to the question their general knowledge and experience of worldly affairs: Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; 238 CLR 460 at [4]-[6], [39]-[40]; Harbour Radio Pty Ltd v Trad [2012] HCA 44; 247 CLR 31 at [54]. In the case of the true innuendo alleged by the applicant, the question of meaning remains an objective one, even though there are statements in the authorities that evidence from persons with knowledge of the extrinsic facts is admissible: Hough v London Express Newspaper Ltd [1940] 2 KB 507 at p 513-514 (Slesser LJ) and p 515 (Goddard LJ). The requirement to prove, whether by direct evidence or inference, knowledge amongst some recipients of the publication of the extrinsic facts goes to proof of publication of the innuendo: Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86 at p 89 (Jordan CJ). In the case of a true innuendo the question of defamatory meaning is concerned with the objective understanding of the hypothetical ordinary reasonable reader or audience member with knowledge of the extrinsic facts: Duncan and Neill on Defamation (Butterworths, 1983) at [4.18(b)].
Upon the hypothesis that meaning is to be determined objectively, the audience is taken to have a uniform view of meaning. Although different people might in fact have understood the meanings conveyed by a matter in different ways, the Court must arrive at a single objective meaning: Slim v Daily Telegraph Ltd at p 171-175 (Diplock LJ); Hockey v Fairfax Media [2015] FCA 652; 237 FCR 33 at [73] (White J); Ten Group Pty Ltd v Cornes [2012] SASCFC 99; 114 SASR 46 at [34], [43]‑[50] (Kourakis CJ), [192]-[197] (Blue J); Charleston v News Group Newspapers Ltd [1995] 2 AC 65 at 71‑72 (Lord Bridge). Using the potential different meanings identified by Lord Devlin in Lewis v Daily Telegraph Ltd to illustrate the point, if an applicant alleged that a matter imputed guilt, and the respondent contended that the matter went no further than to impute reason to investigate, there would likely be an issue at trial as to the meaning of the matter. But it would not be sufficient for the applicant to demonstrate that some members of the audience, or even a considerable proportion of the audience understood the matter to impute guilt, for that is not the issue. The issue at trial is the single meaning that an objective audience composed of ordinary decent persons should have collectively understood the matter to bear.
What we have said above in relation to a single meaning should not be understood as saying that an applicant is precluded from alleging more than one imputation. An applicant may allege that a published matter conveys two or more distinct defamatory imputations, and may allege imputations in the alternative (Federal Court Rules, r 16.06), and subject to any defences, will succeed if one or more of those imputations is found to be conveyed. But in evaluating whether any individual imputation is conveyed, an applicant is precluded from succeeding merely because a substantial number or proportion of persons in the audience would have understood the words to have that defamatory meaning: Ten Group Pty Ltd v Cornes at [193] (Blue J).
As we have stated, the respondents relied upon Chakravarti, and West Australian Newspapers v Elliott to support their submission that their variant imputations of “reasonable grounds to believe” were permissible. In order to evaluate the respondents’ submissions, and the decision of the Western Australian Court of Appeal in West Australian Newspapers v Elliott, it is necessary to identify what was decided in Chakravarti. In order to do this, it is necessary to have regard to the reasons for judgment of the members of the Full Court in Chakravarti v Advertiser Newspapers Ltd (1996) 65 SASR 527, as well as the reasons of the members of the High Court in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519.
The relevant facts in Chakravarti were as follows. The plaintiff sued on two articles that were published by the defendant: 15 July 1992; and 18 July 1992. The first article concerned evidence that was given before a Royal Commission into the near-collapse of the State Bank of South Australia, and referred to the plaintiff by name. In relation to the first article, the plaintiff alleged that the following two imputations were conveyed (CLR at [47]) –
(a)The plaintiff was involved in criminal or civil misconduct, whilst an executive of Beneficial Finance, in respect of loans from Beneficial Finance to himself.
(b)The plaintiff’s conduct in receiving loans direct to himself as an executive of Beneficial Finance which loans were in excess of his entitlement was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.
In its defence, the defendant alleged that if the first article was defamatory of the plaintiff, it meant no more than that the plaintiff was suspected of being involved in criminal or civil misconduct in respect of loans, and that a Mr Simmons had told the Premier of South Australia that he suspected the plaintiff and three others may have been guilty of criminal or civil misconduct (SASR at p 539). The plaintiff, by his reply, denied that this was the natural and ordinary meaning of the words used, but alleged that if it was, the words used “carried the further imputation that the suspicion was well founded” (SASR at p 539). There is nothing in any of the reports of Chakravarti to indicate that the defendant’s imputation of suspicion was challenged by the plaintiff in the interlocutory stages.
At trial, the trial judge (Cox J) found that the first article was defamatory of the plaintiff, but without reference to the specific imputations alleged by the plaintiff. The trial judge’s failure to make findings as to which if any of the plaintiff’s imputations arose was the subject of an application in the South Australian Full Court for leave to amend the notice of appeal (SASR at p 558).
On appeal to the South Australian Full Court, Doyle CJ held that the first article conveyed two of four imputations that had been identified by the trial judge, and which Doyle CJ held to be within the scope of the plaintiff’s pleadings: SASR at p 542-543. Doyle CJ understood that the defendant had not sought to justify the two imputations that he held were conveyed, but had sought to justify an imputation of suspicion based on reasonable cause which his Honour held it had no reason to justify: SASR at p 545.
Perry J held that the plaintiff’s claim based on the first article should have been dismissed because the imputations alleged by the plaintiff could not fairly be attributed to the article: SASR at p 555. Further, Perry J held that the plaintiff could not rely on the defendant’s imputation of suspicion because it would be unfair to the defendant (SASR at p 556) –
As to par 4(a) of the statement of claim, the respondent clearly advanced a case based on an inference of actual “criminal or civil misconduct”, whereas the article imputed no more than a question or suspicion of such conduct. While it is true that there are cases where a meaning not pleaded but which is of the same kind but less injurious than the pleaded meaning may properly be found in favour of a plaintiff, that course should not be followed where to do so would be unfair to the defendant. In my opinion, an allegation that the respondent was actually involved in criminal or civil misconduct is so different from an allegation of mere suspicion that it would be unfair to the appellant to find for the respondent on such a basis.
It is true that the appellant pleaded in its defence that the words meant and were understood to mean only a suspicion of criminal or civil misconduct, but the respondent was not entitled to rely on an allegation in the defence as an alternative basis on which to assert a basis of liability not asserted in his own pleading. Indeed, the respondent in his reply joined issue with the assertion that the meaning was restricted to suspicion only of criminal and civil misconduct, and asserted that the article “carried the further imputation that the suspicion was well founded”. The respondent cannot be permitted to eschew the meaning suggested by the appellant but then be permitted to recover on the basis of that meaning, when the only meaning which he asserts in his own pleading is not made out. On the other hand, if the respondent had accepted the more limited meaning suggested by the appellant, and made it part of his case against the appellant, the course of the trial may well have been radically different.
Williams J held that the first article made relevant allegations only in terms which alleged a suspicion, and that on this basis the statutory defence of a fair and accurate report of the proceedings before the Royal Commission was made out: SASR at p 559-560.
The High Court reversed the Full Court’s findings in relation to whether the first article conveyed the plaintiff’s pleaded imputations. Brennan CJ and McHugh J held that both imputations alleged by the plaintiff in respect of the first article were made out: CLR at [1], [5]. Gaudron and Gummow JJ held that the first article conveyed the first of the plaintiff’s pleaded imputations: CLR at [48]. As to the second of the plaintiff’s imputations, Gaudron and Gummow JJ held that the first article conveyed a variant of that imputation, namely the plaintiff’s second imputation but shorn of the words, “in excess of his entitlement”: CLR at [50]. This variation was said to be slight. It was this slight variation which led Gaudron and Gummow JJ to consider the extent to which a plaintiff might depart from pleaded imputations at trial. It is important to note that the plaintiff did not in the High Court succeed on the defendant’s suspicion imputation, but on his own imputations. At [59] Gaudron and Gummow JJ stated –
There can be no disadvantage to the Advertiser in allowing Mr Chakravarti to rely, even at this stage, on an innuendo that, by reason of loans received from Beneficial, he was not a fit and proper person to be or remain an executive of that company, notwithstanding the more specific meaning pleaded in his amended statement of claim, namely, that he was unfit by reason of the receipt of loans in excess of his entitlement. The more specific meaning simply limits the innuendo to a factual basis which the Advertiser itself particularised in relation to its plea of justification with respect to the first article. And although the majority in the Full Court held that Mr Chakravarti could not rely on the lesser meaning which the Advertiser asserted, namely, that he was suspected of being involved in criminal or civil misconduct, which lesser meaning it sought to justify and defend, there could have been no disadvantage to the Advertiser in allowing him to do so.
The main point made in this passage is that there could be no disadvantage to the defendant if the plaintiff was permitted to rely, even at the stage of appeal to the High Court, on the slight variant of the plaintiff’s second imputation in respect of the first article that Gaudron and Gummow JJ had identified at [50]. The reference to the defendant’s suspicion imputation was obiter, because that was not an imputation that was upheld in the High Court. The reason there could have been no disadvantage to the defendant in permitting the plaintiff to rely on the defendant’s suspicion imputation was that the defendant had alleged the imputation, and had sought to defend it at trial. This was a particular feature of Chakravarti. A likely corollary of the reasons of Gaudron and Gummow JJ is that if the defendant had not pleaded and defended the suspicion imputation, the plaintiff would not have been able to rely on it, because there would have been unfair prejudice to the defendant. At [60] Gaudron and Gummow JJ continued –
As a general rule, there will be no disadvantage in allowing a plaintiff to rely on meanings which are comprehended in, or are less injurious than the meaning pleaded in his or her statement of claim. So, too, there will generally be no disadvantage in permitting reliance on a meaning which is simply a variant of the meaning pleaded. On the other hand, there may be disadvantage if a plaintiff is allowed to rely on a substantially different meaning or, even, a meaning which focuses on some different factual basis. Particularly is that so if the defendant has pleaded justification or, as in this case, justification of an alternative meaning. However, the question whether disadvantage will or may result is one to be answered having regard to all the circumstances of the case, including the material which is said to be defamatory and the issues in the trial, and not simply by reference to the pleadings.
This passage emphasises that the extent to which a plaintiff might be entitled to rely on different meanings will be governed by whether there is any disadvantage to the defendant.
Brennan CJ and McHugh J agreed with the orders proposed by Gaudron and Gummow JJ, and subject to two points, with their reasons. The two points concerned the need to identify what defamatory meanings were conveyed by a publication before a defence of fair and accurate report can be evaluated, and secondly, their Honours’ criticism of the Polly Peck form of pleading. In relation to the extent to which a plaintiff might depart from pleaded meanings, Brennan CJ and McHugh J at [23] cited a passage from the reasons of King CJ in Prichard v Krantz (1984) 37 SASR 379 at p 386, which included the following –
… a plaintiff would not, of course, be confined to a precise nuance and shade of meaning pleaded or particularised. Modern judges, in any class of case, have a considerable discretion as to the rigour with which they will confine a case presented by a party to the precise language of the pleadings.
Brennan CJ and McHugh J also cited at [23] the following passage from the reasons of Mahoney A‑CJ in Crampton v Nugawela at p 183 –
… where the imputation specified by the plaintiff is not the imputation made by the published material, the plaintiff will fail, even though another and different imputation was made by the published material and the plaintiff could have pleaded that imputation.
But, in my respectful opinion, that should not mean that the plaintiff should fail where the published material is before the jury, the imputation which it makes may be seen from it, and the plaintiff’s error is merely that his pleading of the imputation errs in that it does not with complete accuracy state in the pleading the imputation that is in the published material . . . Where . . . the complaint is not that the published material conveys one imputation and the pleading pleads a quite different one, but that the pleader has erred in attempting to translate the imputation from the published material to the pleading, I do not think the law to be that a plaintiff’s claim must necessarily fail. It would be sad if the law held the plaintiff’s claim defeated because, in pleading, he did not precisely translate from the letter to the pleading the imputation as precisely as should have been done.
Brennan CJ and McHugh J then stated at [24]-[25] –
If the defendant is, or might reasonably be thought to be, prejudiced, embarrassed or unfairly disadvantaged by the departure - whether in pleading or preparing for trial, or adducing evidence or in conducting the case before verdict - the plaintiff will be held to the meaning pleaded. If the meaning pleaded goes to the jury and is not found by the jury, the plaintiff fails. If there be no unfair disadvantage to the defendant by allowing another defamatory meaning to be relied on and to go to and be considered by the jury - as where the plaintiff seeks to rely on a different nuance of meaning or, oftentimes, merely a less serious defamation - the different defamatory meaning may be found by the jury.
The defendant suffered no prejudice, embarrassment or unfair disadvantage in this case. The plaintiff was entitled to a favourable finding on the meanings attributed to the first and second articles by Gaudron and Gummow JJ.
By these passages, especially when read in the context of the quotations from Prichard v Krantz and Crampton v Nugawela, Brennan CJ and McHugh J acknowledged that a plaintiff may be permitted to depart from pleaded meanings at trial, but only if there is no unfair disadvantage to a defendant.
Kirby J found that both imputations pleaded by the plaintiff in relation to the first article were available, and regarded it as almost impossible to deny that the first imputation was made out: CLR at [140]. While Kirby J sought to identify some general principles concerning the extent to which parties will be held to their pleadings in defamation cases (CLR [139] at points 3 and 4), his Honour did not venture any view about whether it would have been permissible for the plaintiff to rely on the defendant’s suspicion imputation.
In relation to the second article sued on in Chakravarti, the plaintiff had alleged six imputations, as follows (CLR at [71]) –
(a)the plaintiff had engaged in criminal conduct in connection with a loan or loans made to him;
(b)the plaintiff was a party to a conspiracy within the State Bank group in connection with multimillion dollar unauthorised loans;
(c)the plaintiff had received one or more loans which were not approved or authorised and which provided greater benefits to him than those to which he was entitled and that the plaintiff had been involved in criminal, or at least civil, misconduct in connection with obtaining those loans;
(d)the plaintiff had received a loan which had not been approved or authorised and which provided benefits in excess of his entitlement, in relation to a joint venture with a Melbourne developer, which loan was $37 million in default;
(e)the plaintiff had engaged in criminal, or at least civil, misconduct in connection with that loan;
(f)[t]he plaintiff’s conduct in relation to the stated loans was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.
By majority, the Full Court (Doyle CJ at SASR p 549-550, and Perry J at SASR p 557) held that the second article conveyed imputations (b) to (f), but not (a). Doyle CJ stated (at SASR p 549) –
In my opinion the first of the pleaded imputations does not arise. I do not consider that the article imputes criminal conduct, even by its reference to a conspiracy. In my opinion it does no more, read as a whole, than report evidence about conduct which Mr Simmons considered “may be criminal”. The distinction between “may be” and “is” is significant. In my opinion the article observes it. In my opinion it does not state or imply that any suspicions were well founded. However, in my opinion the article does impute a suspicion of criminal conduct in connection with loans, and this lesser imputation is within the scope of the plaintiff’s pleading.
…
In my opinion the third of the pleaded imputations is conveyed by the article. It reports the obtaining of unapproved and unauthorised loans, and that that conduct raised the suspicion of criminal rather than civil misconduct. The article does suggest that the misconduct is at least civil misconduct, the question being whether it is criminal.
As indicated by the above passages, Doyle CJ considered that the imputation of suspicion of criminal conduct was within the plaintiff’s pleading. By his imputation (c), the plaintiff had pleaded that the second article meant that “the plaintiff had been involved in criminal, or at least civil, misconduct”. Imputation (c) fell short of a charge of guilt of criminal misconduct, spanning civil and criminal misconduct, and thereby having within it suspicion of criminal conduct.
In the High Court, Gaudron and Gummow JJ (with whom Brennan CJ and McHugh J at CLR [1] agreed) held that the Full Court was clearly correct in holding that imputation (a) was not conveyed, stating (at CLR [72]) –
As pointed out by Doyle CJ, “[t]he distinction between ‘may be’ and ‘is’ is significant” and the article is consistent in its statement that the conduct in issue “may be criminal rather than civi[l]”. Accordingly, Mr Chakravarti cannot succeed on this issue.
The defendant newspaper conceded that the second article bore the plaintiff’s imputation (c), but cross-appealed in relation to imputations (b), (d), (e) and (f). Gaudron and Gummow JJ (with whom Brennan CJ and McHugh J agreed) held at CLR [73]-[76] that it was open to the Full Court to conclude that the second article conveyed imputations (b), (e), and (f), but that it was not open to find that the second article bore imputation (d).
Kirby J held at CLR [143] that Doyle CJ was right to find that all of the pleaded imputations except the plaintiff’s imputation (a) were conveyed by the second article.
It has been necessary to undertake this lengthy analysis of Chakravarti to demonstrate that it formed no part of the ratio of Chakravarti that there is any general principle that a plaintiff who alleges an imputation equating to guilt will be entitled to succeed at trial on a lesser imputation that equates to reason to believe, or suspicion. Whether that course is permissible will turn on the terms of the imputations, and considerations of fairness. In relation to the first article the subject of Chakravarti, the defendant had been permitted to plead and defend a suspicion imputation, which led Gaudron and Gummow JJ to remark that there would have been no disadvantage to the defendant in allowing the plaintiff to rely upon it. In relation to the second article, it was not in dispute in the High Court that imputation (c) was conveyed, and suspicion of criminal conduct had been held by Doyle CJ and Perry J in the Full Court to be within the plaintiff’s pleading.
Subsequent to Chakravarti and Hore-Lacy, Bongiorno J in Gutnick v Dow Jones & Co Inc (No 4) [2004] VSC 138; 9 VR 369 struck out the defendant’s imputations which alleged that the plaintiff was “reasonably suspected” of money-laundering, and that there was “reason to investigate” whether the plaintiff had been money-laundering. In doing so, Bongiorno J stated at [8] –
The defendant’s imputations are, in each case, imputations of reasonable suspicion. But the issue raised by the plaintiff’s imputations is not whether he was merely suspected of particular arguably reprehensible conduct but rather whether he engaged in that conduct. In Lewis v Daily Telegraph Ltd [1964] AC 234 Lord Reid expressed himself as being firmly of the view that there is a great difference between saying that someone has behaved in a suspicious manner and saying that he is guilty of an offence (at 260). Lord Hodson, in the same case, acknowledged that whilst it might be defamatory to say that someone is suspected of an offence, such a statement does not carry with it an allegation that he has committed the offence (at 275). Simon Brown LJ (with whom Sir Ralph Gibson agreed) in Stern v Piper [1997] QB 123 at 138 accepted that Lewis’ case decided that an allegation that someone is suspected of guilt is different to and less serious than an allegation that he is actually guilty. See also Corse v Robertson (Unreported, WA Full Court, 8 December 1997) and Singleton v Hudson (1998) 20 WAR 191 at 199.
Bongiorno J referred to the following passage from the reasons of May LJ in Shah v Standard Chartered Bank [1999] QB 241 at p 266 –
A publication that a person is guilty of something differs from a publication that there are reasonable grounds to suspect that he is guilty. Each is normally capable of being defamatory. The second will usually be less serious than the first. To justify the first publication, you have to establish that the person is guilty. To justify the second publication, you have to establish that there are objectively reasonable grounds for suspicion.
At [11]-[12] Bongiorno J stated –
[Counsel for the defendant] contended that the plaintiff in this case could obtain a verdict in his favour if the tribunal of fact found, not that the article conveyed an imputation of guilt but merely that it contained an imputation of reasonable suspicion of guilt.
I cannot agree. As the cases to which I have referred make clear, whilst both allegations might be libellous they are not variants of each other as that term is used in Hore-Lacy. The two sets of imputations raise quite different cases.
Bongiorno J then referred to the defendant’s particulars of justification to demonstrate that the defendant was seeking to raise quite a different case.
In Hore-Lacy v Cleary [2007] VSCA 314; 18 VR 562, the defendants to the proceeding submitted that Gutnick v Dow Jones & Co Inc (No 4) was wrong. Hore-Lacy v Cleary did not concern a justification defence, but a defence of common law comment where the defendants had provided particulars of the substance of the comment. The plaintiff had pleaded four imputations and a true innuendo equating to “guilt” of certain conduct, and the defendants pleaded as the substance of their comment that “there is a serious question to be investigated”. The Court of Appeal applied the principle that a comment defence must address the sting of the alleged libel, or a permissible variant, citing Chakravarti at p 528 (Brennan CJ and McHugh J) and Channel Seven Adelaide Pty Ltd v Manock at [83] (Gummow, Hayne and Heydon JJ). The Court held that the comment did not address the sting of the libel alleged by the plaintiff, and in the course of his reasons at [54] Ashley JA (with whom Neave JA and Redlich JA agreed) stated that Gutnick v Dow Jones & Co Inc (No 4) provided a useful analogy. In Cunliffe v Woods [2012] VSC 254 at [11], Beach J considered that the approach taken by Bongiorno J in Gutnick had been endorsed by the Court of Appeal in Hore-Lacy v Cleary.
To support their submission that justification of their variant imputations was permissible, the respondents relied on the decision of the Western Australian Court of Appeal, comprising two members (Steytler P and McLure JA), in West Australian Newspapers v Elliott [2008] WASCA 172; 37 WAR 387, which the primary judge held at [43] was plainly wrong. In West Australian Newspapers v Elliott the plaintiff had alleged meanings which included imputations that he had –
4.1dishonestly profited from using information concerning contracts between Fortescue and Chinese investors which would have an adverse effect upon the price of Fortescue shares when made available to the market, by selling Fortescue shares just prior to the release of that information;
4.2illegally profited from using information concerning contracts between Fortescue and Chinese investors which would have an adverse effect upon the price of Fortescue shares when made available to the market, by selling Fortescue shares just prior to the release of that information;
The defendants alleged the following imputation that the plaintiff challenged successfully before the primary judge, but which the Court of Appeal allowed –
6.3there were reasonable grounds to suspect that the plaintiff as a director of [Fortescue] had illegally profited from using information concerning contracts between [Fortescue] and Chinese investors which would have an adverse effect upon the price of [Fortescue] shares when made available to the market, by selling [Fortescue] shares, just prior to the release of that information;
Steytler P at [19] treated the issues that arose as raising the following questions –
(1)How far may a Polly Peck plea depart from the imputations relied upon by a plaintiff before being struck out as irrelevant?
(2)Does the appellant’s plea in para 6.3 of the defence fail the test enunciated in answer to question (1)?
(3)Is the answer to question (2) influenced by the fact (raised by the respondent in answer to grounds 1 and 2) that the respondent expressly disclaims (and will, at the trial, expressly disclaim) any reliance upon the imputation pleaded in para 6.3 of the defence?
In answering question (1), Steytler P at [20] confirmed that a defendant cannot plead a “Polly Peck” imputation that was outside the extent to which a plaintiff would be permitted to depart from his or her pleaded imputations. Steytler P reviewed the relevant authorities, including Chakravarti and Hore-Lacy, and at [31] of his reasons stated –
This review of the cases suggests that there is general, although not universal, support for the proposition that a plaintiff who has pleaded specific meanings by way of false innuendo may only succeed at trial on some other meaning if it is not substantially different from and not more injurious than the meanings pleaded. If that is correct then, as Charles JA pointed out in Hore-Lacy (at [52]), the issue of whether the meaning was substantially different might be tested by asking whether the defendant would have been entitled to plead a different issue, adduce different evidence or conduct the case on a different basis or, possibly, whether the justification would be substantially different. If the Polly Peck imputation pleaded by the defendant is one that would have satisfied the test enunciated, had it been pleaded by the plaintiff, it will be allowed. If it would not have satisfied that test, it will not be allowed: Buckeridge (at [20]). At least in the absence of further authority, that is the approach that should, in my opinion, be followed by the present two-judge court.
For the purposes of answering question (2), Steytler P considered the judgments of the South Australian Full Court and the High Court in Chakravarti at some length, and set out the last sentence of [59], and the whole of [60] of the reasons for judgment of Gaudron and Gummow JJ. We have set out the whole of [59] at [41] above, and we have set out [60] at [42] above. In relation to [59] and [60] of Chakravarti, Steytler P stated at [40] –
Although their conclusion in this respect is obiter (see [61]), the two paragraphs that I have quoted nevertheless make it plain that Gaudron and Gummow JJ regarded the lesser meaning to which they referred as being one that was comprehended in, or less injurious than, the meaning pleaded in the statement of claim.
For our part, we do not read the obiter in [60] of Chakravarti in that way. In the first two sentences of [59] Gaudron and Gummow JJ referred to allowing the plaintiff to rely on the variation to the plaintiff’s second imputation with respect to the first article, to which we referred at [41] above. When it came to the suspicion imputation, Gaudron and Gummow JJ referred to that imputation at [59] as a lesser meaning, but stated that there could have been no disadvantage to the defendant in allowing the plaintiff to succeed on that imputation which the defendant had sought to justify and defend. In our view, the question of unfair disadvantage lies at the heart of both [59] and [60] in relation to whether the plaintiff might have been allowed to rely on the suspicion imputation. The same can be said in relation to the reasons of Brennan CJ and McHugh J at [25] –
The defendant suffered no prejudice, embarrassment or unfair disadvantage in this case. The plaintiff was entitled to a favourable finding on the meanings attributed to the first and second articles by Gaudron and Gummow JJ.
Steytler P referred to other cases that have discussed the difference between an imputation of suspicion on the one hand, and an imputation of guilt on the other, including Gutnick v Dow Jones & Co Inc (No 4), Mickelberg v Hay [2006] WASC 285, Hyams v Peterson [1991] 3 NZLR 648, and Hore-Lacy v Cleary. In Hyams v Peterson, which was also cited by Hasluck J in Mickelberg v Hay, Cooke P stated at p 655 –
It is also plain that to say there are grounds for suspecting a person of fraud or other discreditable conduct is, although defamatory, often different from and less serious than an assertion of his guilt: Lewis v Daily Telegraph Ltd [1964] AC 234; Truth (NZ) Ltd v Bowles [1966] NZLR 303; Broadcasting Corporation of New Zealand v Crush [1988] 2 NZLR 234, 239-240; Mirror Newspapers Ltd v Harrison (1982) 42 ALR 487. These judgments also recognise that for practical purposes there can be an imputation of suspicion so strong as to be indistinguishable from guilt; it must always be a question of fact how far the defamatory meaning goes.
While the above passage from the reasons of Cooke P was referred to by Hasluck J in Mickelberg v Hay, and also by Steytler P in West Australian Newspapers v Elliott at [70], the passage was not set out in full in either judgment. Steytler P stated at [70] –
As Cooke P observed in Hyams (at 655), cases such as Lewis and Mirror Newspapers recognise that for practical purposes there can be an imputation of suspicion so strong as to be indistinguishable from guilt and that it must always be a question of fact how far the defamatory meaning goes.
However, the reference by Cooke P to an “imputation of suspicion so strong as to be indistinguishable from guilt”, reflected the reasons of the trial judge, Woodhouse J, in Truth (NZ) Ltd v Bowles [1966] NZLR 303, which Cooke P cited. Neither Hasluck J nor Steytler P referred to Truth (NZ) Ltd v Bowles where, in awarding damages in a defamation case where it appears from the report that no imputations were pleaded by the plaintiff, Woodhouse J stated –
In my opinion these words carry so high a level of suspicion that they would convey to normal fair-minded readers an impression indistinguishable from guilt.
On appeal, the New Zealand Court of Appeal reduced the trial judge’s award of damages, holding at p 308 –
… we think the learned Judge went a little too far in the opinion he expressed that the words carried so high a level of suspicion that they would convey to normal fair-minded readers an impression indistinguishable from guilt. We agree that fair-minded readers of the paper might well say there is seldom smoke without fire, but we do not think they would necessarily conclude that she was guilty in respect of the various allegations made against her in view of her denials.
In the context of the trial judge’s reasons in Truth (NZ) Ltd v Bowles the “practical purposes” for which an imputation of suspicion might be so strong as to be indistinguishable from an imputation of guilt concerned injury to reputation and the assessment of damages. However, it is noteworthy that the New Zealand Court of Appeal, in reducing the award of damages, acted on the distinction between suspicion and guilt.
In the passage from Hyams set out at [67] above, Cooke P also cited the judgment of the Court of Appeal which he delivered in Broadcasting Corporation of New Zealand v Crush [1988] 2 NZLR 234, and which is illuminating. At p 239-240 the Court of Appeal stated –
… As we see it, [the jury] cannot be entitled to find for the plaintiff on a basis which he has disclaimed or never put forward and which the defendant has not been called upon to meet. If the plaintiff has nailed his colours to the mast as to the meaning of which he complains, it does not seem rational to suppose that the jury can legitimately give a verdict for him on finding some different and less serious meaning.
The Court of Appeal in Crush then stated that this point had been virtually settled by the decision of the Privy Council in Truth (New Zealand) Ltd v Holloway [1961] NZLR 22, and at p 240 set out two paragraphs from the advice of the Privy Council, which concerned the extent to which a jury might depart from a true innuendo. We set out one of those paragraphs –
No exception was taken to that direction which was clearly right and, indeed, favourable to the defence. Once the plaintiff had acknowledged that the words were not defamatory of him when taken in their natural and ordinary meaning, then it was absolutely incumbent on him to prove they bore the meaning alleged in the innuendo. If he only proved a lesser meaning, he would fail. A good illustration was given in the course of the argument. The innuendo in this case imputed that the plaintiff “has acted and is prepared to act dishonourably”. That is an imputation of guilt. If the jury thought that the words conveyed, not an imputation of guilt, but only of suspicion, the plaintiff would fail to prove his innuendo, with the result that he would fail in his action: see Mountney v Watton (1831) 2 B & Ad. 673, 678; 109 E.R. 1293, 1296 by Lord Tenterden, Simmons v Mitchell (1880) 6 App Cas 156. The reason is this: If the plaintiff had by his innuendo said the words only imputed suspicion, it would be open to the defendant to plead justification if it had sufficient evidence at its disposal to warrant suspicion: but as the plaintiff says that the words impute guilt, the defendant cannot justify that meaning unless it has sufficient evidence to prove guilt, which is, of course, a higher burden than proving suspicion. So as a matter of pleading, in order not to put the defendant to any disadvantage, the plaintiff is pinned to his innuendo.
(emphasis in original)
At [93] the primary judge referred to paragraph 37 of the respondents’ particulars as containing conclusory assertions, and we agree. That is particularly the case in relation to the vague allegations that the conferences and events furthered the interests of the CCP, the CPPCC and the UFWD. Paragraph 37 is not supported by any material facts that would be necessary to sustain the high-level conclusions that it contains.
We therefore agree with the primary judge’s conclusion at [94] that the respondents’ particulars up to that point do not specify the facts, matters and circumstances from which the applicant ought to have acquired the alleged knowledge as required by r 16.43(2).
In relation to the respondents’ particulars relating to the applicant’s knowledge of Sheri Yan’s activities, it is desirable to set out paragraphs 70 to 80 of the respondents’ particulars, as we shall need to refer to them –
The New York Bribery Complaint
(70)In about October 2015, a complaint was filed in the United States District Court for the Southern District of New York (Complaint), and Yan was arrested by the Federal Bureau of Investigation in New York in relation to the allegations contained in the Complaint.
(71)By the Complaint, Yan was charged, together with Heidi Park (also known as Heidi Hong Piao) and others, with, amongst other things, offences relating to the bribery of John Ashe, who was then the permanent representative to the United Nations from Antigua and the President of the UN General Assembly (Ashe), from about August 2013 in violation of the United States Code.
(72)The Complaint relevantly alleged that:
(a)Yan and Piao, together with other co-conspirators, corruptly conspired as part of a scheme to pay, and to facilitate payment of, bribes to a United Nations Official namely, Ashe;
(b)Yan and Piao arranged for a US$200,000 wire transfer to a US bank account belonging to Ashe in exchange for him attending, in his official capacity, a conference in Guangdong, Guangzhou, China on 17 November 2013;
(Guangzhou Conference); and
(c)The wire transfer to Ashe’s bank account was made by a co-conspirator of Yan and Piao.
(d)The Guangzhou Conference was organised by an “old friend” of Yan’s who was an extremely wealthy Chinese real estate developer only identified in the Complaint by the pseudonym as co-conspirator “CC-3”;
(e)Ashe received the US$200,000 by way of wire transfer from one of CC-3’s companies; and
(f)Ashe subsequently attended the Guangzhou Conference and delivered a speech
(the Bribery Allegations).
Guangzhou Conference
(73)The Guangzhou Conference was:
(a) organised or co-organised by the Kingold Group;
(b) held at the Applicant’s Imperial Springs Resort in 2013; and
(c) hosted by the Applicant.
(74)John Ashe, in his capacity as President of the UN General Assembly, attended and delivered a speech at the Guangzhou Conference.
Yan pleads guilty to the Bribery Allegations
(75)On about 20 January 2016, Yan pleaded guilty to the Bribery Allegations before his Honour Judge Vernon Broderick of the United States District Court, Southern District of New York.
(76)At the hearing, Yan orally admitted in open court that:
(a)she, along with other people, i.e. co-conspirators, agreed to pay money to Ashe;
(b)numerous such payments (one of them being the $200,000) were made so that, in exchange, Ashe would:
(i)persuade officials in Antigua to enter into business contracts with foreign companies; and
(ii)use his position as the President of the General Assembly to assist Yan and “others”, i.e. co-conspirators, to promote business ventures from which they would profit.
(77)In the circumstances outlined in particulars (70)-(76), Yan is corrupt.
(78)On about 29 July 2016, Yan was sentenced to 20 months’ imprisonment and a fine of US$12,500. She was ordered to forfeit the sum of US$300,000.
(79)On 22 May 2018, Andrew Hastie MP, Chair of the Parliamentary JCIS, revealed in a speech in the Federal Parliament that:
(a)he had travelled to the US with other members of the JCIS with whom he had attended a meeting with a US intelligence agency controlled by the Department of Justice.
(b)In that meeting, "CC-3" was identified by the US intelligence personnel as the Applicant.
Conclusion in relation to Yan and the Bribery Allegations
(80)It is to be inferred from particulars (70) to (79):
(a)that “CC-3” is the Applicant and a co-conspirator of Yan and others in the corrupt scheme to bribe Ashe;
(b) that the Applicant must have known that Yan was corrupt;
(c)that the Applicant knowingly participated in the payment of the $200,000 bribe to a US bank account in the name of the Ashe;
(d)that the Applicant did so in order to profit from Ashe’s activities on behalf of the co-conspirators in return for the bribe.
The primary judge’s reference at [78] to Wootton v Siever was fitting. What is remarkable about the allegations in paragraphs 70 to 79 of the respondents’ particulars is that, apart from the allegation in paragraph 73(c) that the applicant hosted a conference, there are no direct allegations of material fact made in relation to any conduct of the applicant. Rather, the particulars allege as material facts: (1) allegations in court documents in a foreign court proceeding; (2) the hearing and outcome of a proceeding against Sheri Yan; and (3) statements made by Mr Hastie MP to the Federal Parliament. No material facts alleged in paragraphs 70 to 79, either alone or in combination, are capable of supporting the very serious allegations that are made in paragraph 80. The respondents’ attempt to justify the applicant’s imputations 5(f), (g), and (h) is untenable.
(4) The definition of espionage
The respondents challenged what the primary judge stated at [83]-[87] in relation to the respondents’ definition of “espionage” in paragraph 14 of their particulars. We have set out paragraph 14 of the respondents’ particulars under [107] above. As we noted at [110] above, the primary judge held that the definition of “espionage” in paragraph 14 of the respondents’ particulars was embarrassing because it sought to expand espionage to encompass vague and imprecise concepts that were not within the natural and ordinary meaning of the word “espionage”. However, his Honour also stated that it was not necessary to decide the question whether the respondents could justify an imputation of “espionage” by redefining that word in their particulars and then using that bespoke sense to justify the imputation as redefined. Nonetheless, before this Court the respondents squarely argued that the primary judge’s rejection of their definition of “espionage” in paragraph 14 of their particulars disclosed an error of approach, and we shall therefore address the parties’ submissions.
The respondents submitted that whether what they alleged constituted espionage was a question of fact to be assessed by reference to the evidence adduced at trial and the standards of the hypothetical viewer or reader of the matters complained of. The primary judge was in error, according to the respondents, in having recourse to dictionary meanings, because the meaning of the word “espionage” was a question for the trier of fact. According to the respondents, that meaning was not to be equated with a dictionary meaning, but with “espionage” in the sense conveyed by the matters complained of. Senior counsel for the respondents submitted that the matters had not accused the applicant of being “James Bond” but, if the imputation of espionage was conveyed, of engaging in naked influence to the detriment of Australian domestic and foreign policy. The respondents submitted that conduct of the kind in which they alleged the applicant had engaged had, in part, resulted in new legislation: National Security Legislation Amendment(Espionage and Foreign Interference) Act2018 (Cth). Further, the respondents submitted that at this stage of the proceeding the question was one of capacity, and the primary judge was wrong to foreclose a conclusion by the Court at trial, after having heard all the evidence, that the conduct in which the applicant was alleged to have engaged constituted espionage in the sense conveyed by the matters complained of.
In response, the applicant submitted that the primary judge was correct at [86] of the reasons for judgment in holding that the definition of “espionage” in paragraph 14 of the particulars was embarrassing because it did not describe espionage as alleged by the applicant, and embraced vague and imprecise concepts. Further, the applicant submitted that the meaning of the applicant’s imputation was not a question for the trier of fact, but was a question of law, citing Singleton v Ffrench (1986) 5 NSWLR 425.
Singleton v Ffrench was an appeal following a jury trial in a proceeding where the alleged causes of action were the publication of imputations because the proceeding was subject to the now-repealed Defamation Act 1974 (NSW). The plaintiffs were the trustees of a trust fund called the John Farragher Trust Fund. By their statement of claim the plaintiffs alleged that the matter complained of meant that they had acted “in breach of their trust to John Farragher”. At trial, at the close of evidence an issue arose as to the basis on which the plaintiffs’ case had been put. The plaintiffs submitted that the pleaded imputation meant that the plaintiffs were morally blameworthy, while the defendants alleged that the imputation meant that, in an objective sense, the plaintiffs had breached the terms or duties of their trust, irrespective of their state of mind. The trial judge decided to leave the meaning of the imputation to the jury. On appeal, McHugh JA, with whose reasons Samuels JA agreed, held that the trial judge was in error in allowing the jury to determine the meaning of the imputation. This was because if the trial judge had thought that the matter was capable of bearing the meaning in the sense which the plaintiffs had argued, he should have required the plaintiffs to make an application to amend the pleadings, and if an amendment to the statement of claim had been allowed, then the original imputation should have been deleted, and the defendant given an opportunity to plead justification to the new imputation. However, in the circumstances of the case, McHugh JA was of the opinion that it would not have been proper to allow such an amendment at the close of the evidence, because: (1) it would radically change what had been the battleground of the case; (2) such an imputation was too vague and imprecise to go to the jury; and (3) McHugh JA did not see anything in the matter complained of that would have justified a finding that the publication meant that the plaintiffs were acting in breach of faith, as distinct from breach of the terms or duties of their trust.
We do not accept that the meaning of an imputation is a question of law in the broad terms submitted by the respondents. Singleton v Ffrench involved at least two relevant issues for the Court. The first issue was the management of the trial, and the error that McHugh JA identified was that the trial judge left issues to the jury that were not correctly formed, and which resulted in unfairness to the defendant. That was an error by the judge in directing the jury, which in the context of a jury trial may be referred to as an error of law: cf, the discussion in Glass, McHugh and Douglas, The Liability of Employers (Law Book Co, 1979) at p 209-210. The Court of Appeal’s consideration of the first issue involved a second issue, which was whether the matter complained of was capable of bearing the imputation in the sense that had been advanced by the plaintiffs. That was an issue of capacity which is a question of law: Trkulja v Google LLC [2018] HCA 25; 356 ALR 178 at [30] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).
The significance of pleading imputations in cases that are subject to the uniform legislation is slightly different from that in cases that were the subject of the Defamation Act 1974 (NSW). Under s 9 of the 1974 New South Wales legislation, each imputation was a separate cause of action (Petritsis v Hellenic Herald Pty Ltd [1978] 2 NSWLR 174 at p 190), whereas under s 8 of the current legislation there is a single cause of action in relation to the publication of defamatory matter, even if more than one defamatory imputation is conveyed. The purposes of pleading imputations in cases subject to the current legislation include the conventional purpose of identifying the field of inquiry for trial, and to enable a defendant to raise defences, including statutory defences in circumstances where the defences under s 25 and s 26 of the Defamation Act are responsive to imputations.
The matter complained of may inform the meaning of a pleaded imputation: an imputation is not to be considered in a way that is divorced from its subject-matter. In Greek Herald Pty Ltd v Nikolopoulos (2002) 54 NSWLR 165 at [20]-[22] Mason P stated –
20The pleaded imputation is itself a statement extrapolating something from the matter complained of. The statement will seldom be found in the very words used (sometimes the matter complained of is only a picture). The imputation will often be implicit in the text (see generally Petritsis v Hellenic Herald Pty Ltd [1978] 2 NSWLR 174 at 195–196).
21These considerations point to the broader issue of principle. Words, a fortiori words not found in the text, are necessarily to be read in context. This is a basic tenet of literary and legal construction (Metropolitan Gas Co v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449 at 455; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 634). Holmes J, in Towne v Eisner 245 US 418 (1918) at 425, reminds us that: “A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used”.
22Context may clarify or intensify the sting of a facially benign (pleaded) imputation. The converse is also true (see J G Fleming, The Law of Torts, 7th ed (1987) Sydney, Law Book Co Ltd, at 588).
However, context cannot be deployed to change the meaning of an imputation that has been clearly chosen by the pleader: see, Charan v Nationwide News Pty Ltd [2019] VSCA 36 at [140] (Beach, Niall and Ashley JJA).
A consideration of the way in which an imputation is to be understood may occur at different stages. First, in considering the legal question of the capacity of a matter to convey an imputation, it will be necessary to have an understanding of the meaning of the imputation alleged by a party for the purpose of evaluating the question of capacity. A question of capacity may arise in relation to an applicant’s imputations, and any imputations alleged by a respondent as variant imputations, or as contextual imputations. At that stage, the enquiry as to the meaning of an imputation might expose a question as to whether the imputation is sufficiently precise, or is ambiguous, which is a question to be resolved by the parties or the Court as an interlocutory issue either before or during the trial. Second, if a respondent pleads variant imputations or “other” imputations for the purposes of a contextual truth defence, and as in this case, there is a challenge to the respondent’s imputations, the resolution of any such challenge will involve the Court having an understanding as to the meaning of the alternative imputations. At this stage also, ambiguity may be exposed which may require an amendment of the pleadings to remedy. Third, at trial a relevant question for the trier of fact will be whether the matter is defamatory in any meaning about which the applicant complains, or a permissible variant of such a meaning in the sense explained in the authorities to which we have referred. In order to make that judgment, it will be necessary for the trier of fact, whether it be judge alone or jury, to have an understanding of the meaning of the imputations which the parties allege. That meaning may be informed by the matter complained of, which is the context for the imputations. However, the point of Singleton v Ffrench is that the trier of fact should not have to resolve any ambiguity in the pleaded imputations: Greek Herald Pty Ltd v Nikolopoulos at [24]; Gacic v John Fairfax Publications Pty Ltd [2011] NSWCA 362 at [68]; Fenn v Australian Broadcasting Corporation at [47]. That is because the issue before the trier of fact is the meaning of the matter complained of, and not the meaning of the parties’ pleadings, which are the parties’ statements of the cases they seek to advance. Any substantial dispute in relation to the meaning of the parties’ pleadings should ordinarily be determined as a question of practice and procedure before the determination at trial of the facts in issue. The resolution of any such dispute will usually turn on considerations of practical justice: Drummoyne Municipal Council v Australian Broadcasting Corporation at p 137 (Gleeson CJ).
Before the primary judge, the applicant submitted that “espionage” meant “spying”. The primary judge accepted that submission, holding that “spying” was the natural and ordinary meaning of “espionage”. His Honour did not say anything to suggest that there was any relevant ambiguity in the applicant’s imputation 5(a) and its employment of the term “espionage”. If his Honour had thought there was ambiguity, then he could have required the applicant to amend further the statement of claim to make the meaning of espionage explicit in the pleading. Before this Court, senior counsel for the applicant continued to submit that “espionage” in the applicant’s imputation (a) meant “spying”, and accepted that in confining the imputation to espionage in this way, the applicant had made a forensic choice.
The amendments made to the Criminal Code (Cth) by the National Security Legislation Amendment(Espionage and Foreign Interference) Act 2018 (Cth), to which the parties referred in argument, draw a distinction between espionage (Division 91), and foreign interference (Division 92). For the purposes of the Criminal Code, the content of both concepts is found in the statute, and they are different. In this case, we are not concerned with a statutory concept of “espionage”, but with the content of the imputation alleged by the applicant. Whatever possible views there might be of the meaning of the word “espionage” generally, or in particular contexts, it is tolerably clear that for the purposes of the applicant’s imputation (a), the applicant’s case is that “espionage” has a meaning akin to “spying”, and does not extend to the broader concepts such as those that were alleged by the respondents in their bespoke definition of “espionage” in paragraph 14(b) of their particulars which extend to influence, and attempted influence. We agree with the primary judge’s opinion that the concepts into which the respondents sought to extend the meaning of espionage were vague and imprecise. In accordance with the relevant principles in Sutherland v Stopes, Chakravarti, and Hore-Lacy, the respondents’ defence of justification should be directed to the substance or sting of the applicant’s meaning, or a permissible variant of it. We consider that there is a substantial difference between “espionage” as it is employed in the applicant’s imputation 5(a), and the breadth of the respondents’ case, with the consequence that the respondents’ case relating to “espionage” is not responsive. The breadth of the respondents’ case is manifested in paragraph 59(g) of their particulars which we set out at [111] above, which contains the only direct allegation of espionage by the applicant. That allegation is descriptive of political influence, and is far removed from the sense in which the applicant’s imputation 5(a) is to be understood.
(5) Particulars of espionage
The respondents submitted that in holding at [89]-[90] that the particulars provided no basis for inferring that the applicant had engaged in espionage, the primary judge erred by confining his attention to paragraphs 53 to 57 of the particulars, rather than directing attention to the accumulation of circumstances that had been alleged. In support of this submission, the respondents relied on Rush v Nationwide News Pty Ltd at [51] (Wigney J), Pahuja v TCN Channel Nine Pty Ltd (No 2) at [11] (McCallum J), and Transport Industries Insurance v Longmuir at 141 (Tadgell JA).
At [134]-[135] above we referred to the nature of a circumstantial case, and we accept the respondents’ submission that particulars in support of such a case should not be evaluated in isolation. As we indicated at [150] above, we also accept that to allege a circumstantial case of foreign influence, it may not be necessary for the respondents to allege actual words spoken at particular meetings. But there are many serious problems with the way the respondents’ case has been pleaded. The problems include the following. The first is the bespoke definition of “espionage”, which we have already addressed, and which has the consequence that the proposed amended defence fails to engage with the applicant’s imputation 5(a). The second is that there is a sting in the applicant’s imputation 5(e) that the respondents’ particulars do not address, namely that the applicant paid enormous sums of money to Australian political parties as “bribes”. The third is that the allegations in paragraphs 53 to 55 and 58 of the particulars are not directed to any conduct of the applicant, but to opinions attributed to others, such as ASIO, an unnamed political party, the Australian government, and even the Australian Parliament. The fourth is the employment in the particulars of vague words or phrases of association such as “deep connections” without identifying sufficient supporting material facts, which we have already addressed. The fifth is the imprecise way in which many allegations of primary material fact are made, including the allegations about conferences and events in paragraph 37, and the indirect way in which the applicant’s membership of the CCP appears to have been alleged in paragraphs 42 and 43. The sixth is the high-level circular allegation of knowledge in paragraph 31 of the particulars, to which we have referred. A circumstantial case may paint a picture, but in this case it is not clear what picture is being portrayed. If the respondents were to make a further application for leave to amend their defence to plead justification to some or all of the imputations alleged by the applicant, there would need to be some, and possibly substantial revision of the pleading in order that it be viable.
(6) The allegation that the applicant was a member of the Chinese Communist Party
The respondents submitted that the primary judge erred at [95] by referring to the applicant’s alleged membership of the Chinese Communist Party as a “critical allegation” in the applicant’s imputation (a), when the imputation did not allege membership, but referred to the applicant “serving the interests” of the Chinese Communist Party. We have addressed this submission at [154] above. His Honour’s reference to the applicant’s imputation 5(a) was an obvious slip, and the reference is to be construed as being to 5(d).
(7) The allegations in paragraphs 72 and 76 of the particulars
The respondents submitted that the primary judge erred at [104] in treating the allegations in paragraphs 72 and 76 of their particulars as hearsay, and therefore not affording any basis for the serious allegations against the applicant in paragraph 80 that he was a co-conspirator of Yan. The respondents submitted that the primary judge confused particulars with evidence, and assumed that evidence would not be admissible at trial.
There is nothing in this submission. There is no confusion between particulars and evidence. As we have indicated at [162] above, paragraphs 72 and 76 of the respondents’ particulars do not make any allegations about the applicant’s conduct, but allege the content of a court document and the hearing and outcome of a proceeding against Ms Yan.
(8) Parliamentary Privileges Act 1987 (Cth), s 16(3)
In paragraph 79 of their particulars, which we have set out paragraph under [161] above, the respondents rely upon statements made by Mr Hastie MP to the Federal Parliament. In relation to the primary judge’s finding that s 16(3) of the Parliamentary Privileges Act 1987 (Cth) prohibited the respondents from relying on what Mr Hastie MP had said in Parliament, the respondents submitted that s 16(3) precluded the tendering or receipt of evidence, and had nothing to say about pleadings or particulars, and that the time to determine whether there was a breach of the Parliamentary Privileges Act was at trial, citing Hanson-Young v Leyonhjelm [2018] FCA 1688 at [55]-[58] (White J).
Section 16(3) of the Parliamentary Privileges Act is not confined in its operation to the receipt of evidence. As its text indicates, it extends to submissions and comments for the purpose of relying on the truth of anything forming part of proceedings in Parliament, and drawing, or inviting the drawing of inferences –
(3)In proceedings in any court or tribunal, it is not lawful for evidence to be tendered or received, questions asked or statements, submissions or comments made, concerning proceedings in Parliament, by way of, or for the purpose of:
(a)questioning or relying on the truth, motive, intention or good faith of anything forming part of those proceedings in Parliament;
(b)otherwise questioning or establishing the credibility, motive, intention or good faith of any person; or
(c)drawing, or inviting the drawing of, inferences or conclusions wholly or partly from anything forming part of those proceedings in Parliament.
Paragraph 79 of the respondents’ particulars alleges as the relevant material fact the statements by Mr Hastie MP in the Federal Parliament, but not the underlying facts. Paragraph 80 of the respondents’ particulars relies on paragraph 79 in support of the inferences that are alleged therein. In our view, putting aside s 16(3) of the Parliamentary Privileges Act, if the material fact is no more than the fact of Mr Hastie’s statements to the Parliament, that fact is not capable of supporting the inferences alleged in paragraph 80, and the primary judge was correct to hold at [103] that there was no properly particularised basis for the serious allegations against the applicant in paragraph 80 of the particulars. That is a sufficient reason to affirm the primary judge’s decision to strike out paragraph 79 of the particulars.
Particulars of truth – conclusions
We give the respondents leave to appeal the orders striking out their particulars of truth and otherwise disallowing the proposed amendments to their defence. We give leave to appeal having regard to application in respect of the particulars of truth globally, and not by reference to the individual arguments advanced on behalf of the respondents, some of which lacked merit. However, the respondents have not shown that the primary judge’s orders were in error.
Disposition
The respondents have leave to appeal, but the appeal is dismissed.
The respondents accepted that if unsuccessful, there is no reason why an order for costs should not be made in favour of the applicant, so we will order that the respondents pay the applicant’s costs of the application for leave to appeal, and the appeal.
I certify that the preceding one hundred and eighty-four (184) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Besanko, Bromwich and Wheelahan. Associate:
Dated: 2 August 2019
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