Betfair Ltd v Nason
[2006] ACTSC 111
BETFAIR LIMITED & ORS v ROBERT NASON
[2006] ACTSC 111 (13 NOVEMBER 2006)
DEFAMATION – Pleading – defence pleading alternative meaning – permissibility of Polly Peck defence.
DEFAMATION – Imputations – words complained of not supporting innuendo pleaded – certain imputations struck out as not capable of being defamatory.
DEFAMATION – Pleading – reliance upon any defamatory meaning found by court – embarrassing pleading.
Court Procedure Rules 2006 (ACT), r 270
Defamation Act1889 (Qld)
Defamation Act 1957 (Tas)
Polly Peck Plc v Trelford [1986] 1 QB 1000
Chakravarti v Advertiser Newspapers Limited (1998) 193 CLR 519
Kelly v Nationwide News Pty Ltd (1998) 147 FLR 410
Woodger v Federal Capital Press (1992) 107 ACTR 1
Steiner Wilson & Webster Pty Ltd t/as Abbey Bridal v Amalgamated Television Services Pty Ltd [1999] ACTSC 123 (unreported, 18 November 1999), Crispin J; (20000) Aust Torts Reports ¶81-537
Robinson v Laws [2003] 1 Qd R 81
David Syme & Co Ltd v Hore-Lacy (2000) 1 VR 667
Nationwide News Pty Ltdv Moodie (2003) 28 WAR 314
Manock v Advertiser News-Weekend Publishing Co Ltd (2004) 88 SASR 495
Advertiser News-Weekend Publishing Co Ltd v Manock (2005) 91 SASR 206
Whelan v John Fairfax Publications (2002) 56 NSWLR 89
John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227
Greek Herald Pty Ltd v Nikolopoulos & Ors (2002) 54 NSWLR 165
Amalgamated Television Services v Marsden (1998) 43 NSWLR 158
Sungravure Pty Ltd v Middle East Airlines Airliaban SAL (1974-1975) 134 CLR 1
Jones v Skelton [1963] SR (NSW) 644
Lewis v Daily Telegraph Limited [1963] 2 WLR 1063
Lewis v Daily Telegraph [1963] 1 QB 340
John Fairfax Publications Pty Ltd v ACP Publishing Pty Ltd (2005) 157 ACTR 28
Gatley on Libel and Slander (1981) London, Sweet & Maxwell, 8th ed, P Lewis
No. SC 307 and 725 of 2005
Judge: Gray J
Supreme Court of the ACT
Date: 13 November 2006
IN THE SUPREME COURT OF THE )
) No. SC 307 of 2005
AUSTRALIAN CAPITAL TERRITORY ) No. SC 725 of 2005
BETWEEN:BETFAIR LIMITED
(UK NUMBER 5140986)
First Plaintiff
AND:THE SPORTING EXCHANGE LIMITED (UK NUMBER 770548)
Second Plaintiff
AND:PUBLISHING AND BROADCASTING LIMITED (ACN 009 071 167)
Third Plaintiff
AND:ROBERT NASON
Defendant
ORDER
Judge: Gray J
Date: 13 November 2006
Place: Canberra
THE COURT ORDERS THAT:
Proceedings in matters SC 307/2005 and SC 725/2005 be consolidated. The parties have liberty to apply for such consequential orders as are necessary.
In matter SC 307/2005, paragraph 12 of the defendant’s defence be struck out.
In matter SC 725/2005, paragraphs 8(a), (c), (d) and 8(e) of the plaintiffs’ statement of claim be struck out.
In matters SC 307/2005 and SC 725/2005, paragraph 9 in each of the statements of claim in those matters be struck out.
The question of costs is reserved.
These are proceedings for defamation in which the plaintiffs and the defendant are the same but which relate to statements made by the defendant on two separate occasions concerning the plaintiffs.
In both matters, SC 307/2005 and SC 725/2005, the first plaintiff is Betfair Limited, a United Kingdom company which conducts a betting exchange in the United Kingdom and in other parts of the world. The second plaintiff, The Sporting Exchange Limited, and the third plaintiff, Publishing and Broadcasting Limited, are participating in a joint venture to set up a Betfair branded business in Australia. In each proceeding, the defendant, Robert Nason, is the Chief Executive Officer of Racing Victoria.
In matter SC 307/2005, the plaintiffs’ claim in defamation relies upon a statement allegedly made to a journalist of The Australian newspaper and in substance published in that newspaper on 13 April 2005. The words spoken by the defendant were said to be:
Granting a licence to Betfair could see Tasmania’s racing industries thrown out of mainland betting pools and Sky Channel’s TV coverage.
It would be devastating – who wants to invest in an industry that allows organised crime to flourish.
In matter SC 725/2005, the defendant is said to have said to a journalist for The Herald Sun newspaper the following words which were published in that newspaper on 18 October 2004:
If Betfair was licensed in Australia, racing would soon be dominated by organised crime lords who would decide which horses win which races.
There are a number of notices of motion before the court in respect of each of these matters.
Consolidation
It can be seen from the nature of the claimed defamation and the commonality of the parties that the proceedings should be consolidated. There are notices of motion before the court to effect this result and the parties are agreed that such an order should be made. It is desirable to do so and that will enable the matters now raised by the parties by way of application in each of the matters to be dealt with together. Accordingly, under rule 270 of the Court Procedure Rules 2006 (ACT), I order that the actions be consolidated and give the parties liberty to apply for such consequential orders as may be necessary.
The notices of motion
The other notices of motion before me make application for orders in respect of the following matters:
(a) In matter SC 307/2005, the plaintiffs seek to have paragraph 12 of the defendant’s defence struck out.
(b) In matter SC 307/2005, the defendant seeks further and better discovery from the plaintiffs. In part, at least, that application may be affected by whether the strike out application in respect of paragraph 12 is successful. The parties have leave to make further submissions on this application as they may be advised.
(c) In matter SC 307/2005 and in matter SC 725/2005 the defendant seeks to have paragraph 9 of the plaintiffs’ statement of claim struck out. That paragraph is in identical terms in both actions.
(d) In matter SC 725/2005, the defendant seeks to have paragraph 8 of the plaintiffs’ statement of claim struck out or, alternatively, such of the meanings set out in the sub-paragraphs of that paragraph as are not conveyed by the words complained of.
Plaintiffs’ application to strike out paragraph 12 of the defence
The plaintiffs’ notice of motion in matter SC 307/2005 seeks to have paragraph 12 of the defendant’s defence struck out as constituting a form of defence that, whilst permissible in English law, is said to have no application in Australia.
The particular paragraph in question of the defendant’s defence is in these terms:
Common Law Defences
12.Further, he says that:
(a)if he published the Matter Complained Of (which is denied); and
(b)if the Matter Complained Of was defamatory of the Plaintiffs or any of them (which is denied); and
(c)if the Matter Complained Of was of and concerning the Second Plaintiff or the Third Plaintiff (which is denied),
then,
(d)the Matter Complained Of in its natural and ordinary meaning meant and was understood to mean that if the First Plaintiff, alternatively the Plaintiffs, were granted a licence to establish an online betting exchange which permits punters to lay a horse to lose, investment in the racing industry in Australia would decrease due to a perception that the industry allows organised crime to flourish (‘Defendant’s Meaning’);
(e)in the Defendant’s Meaning the Matter Complained Of was true in substance and in fact; and
(f)to the extent that in the Defendant’s Meaning the Matter Complained Of was an expression of opinion, that opinion was a fair comment:
(i)on a matter of public interest, namely whether a licence should be granted to conduct an online betting exchange in Australia;
(ii)based on facts which were true in substance and in fact and which were stated or indicated in the Article.
A number of innuendos were alleged in paragraph 8 of the plaintiffs’ statement of claim as arising from the defendant’s alleged statement set out in [3] of these reasons, but the innuendo upon which the defendant relied for the purposes of the pleading that I have just set out is that contained in paragraph 8(g) of the statement of claim. That paragraph alleged as a defamatory innuendo:
That the licensing of the business of the First, Second and Third Plaintiffs in Australia to conduct on-line gaming would cause organised crime to flourish in the racing industry.
The extrinsic facts pleaded under the heading “Particulars of Extrinsic Facts” in the statement of claim are:
At all material times “Betfair” was a betting exchange and was widely known and reported to be so.
Paragraph 7 of the statement of claim, by reference to a schedule containing the whole article, sets out the publication in The Australian newspaper on 13 April 2005 of what was attributed to the defendant (with the two preceding paragraphs of the article set out to provide context) as:
Australian Racing Board member Geoff Harper said Betfair was trying to use Tasmania as a “Trojan horse” to legalise its online betting exchange across Australia.
“It would mean a reduction in stakes, a reduction in prize money, a reduction in the (thoroughbred) breeding industry – the entire industry would suffer,” Mr Harper said last night.
Racing Victoria chief executive Robert Nason warned that granting a licence to Betfair could see Tasmania’s racing industries thrown out of mainland betting pools and Sky Channel’s TV coverage.
“It would be devastating – who wants to invest in an industry that allows organised crime to flourish,” Mr Nason said.
The statements of the defendant as set out in the schedule are described as “the Matter Complained Of” and they were said to have been published in the Australian Capital Territory and each other State and Territory of Australia. The defendant is said to be “liable therefore [sic] (except in respect of publication in the State of New South Wales)”.
Pleading alternative meanings
The plaintiffs say that the defendant is not permitted to plead an alternative meaning of the alleged defamatory statement of which the plaintiffs do not complain. That submission is said to follow from the fact that the United Kingdom decision in Polly Peck Plc v Trelford [1986] 1 QB 1000 has not been accepted as authoritative in Australia. In Polly Peck, O’Connor LJ, with whom Goff and Norse LJJ agreed, held (at 1032):
In cases where the plaintiff selects words from a publication, pleads that in their natural and ordinary meaning the words are defamatory of him, and pleads the meanings which he asserts they bear by way of false innuendo, the defendant is entitled to look at the whole publication in order to aver that in their context the words bear a meaning different from that alleged by the plaintiff. The defendant is entitled to plead that in that meaning the words are true and to give particulars of the facts and matters upon which he relies in support of his plea, as he is required to do by RSC, Ord 82. It is fortuitous that some or all of those facts and matters are culled from parts of the publication of which the plaintiff has not chosen to complain.
Where a publication contains two or more separate and distinct defamatory statements, the plaintiff is entitled to select one for complaint, and the defendant is not entitled to assert the truth of the others by way of justification.
Whether a defamatory statement is separate and distinct from other defamatory statements contained in the publication is a question of fact and degree in each case. The several defamatory allegations in their context may have a common sting, in which event they are not to be regarded as separate and distinct allegations. The defendant is entitled to justify the sting, and once again it is fortuitous that what is in fact similar fact evidence is found in the publication.
That proposition has been substantially qualified by comments that Brennan CJ and McHugh J made in Chakravarti v Advertiser Newspapers Limited (1998) 193 CLR 519 at 527 [8] where their Honours said in referring to the above passage:
With great respect to his Lordship [Conner LJ], such an approach is contrary to the basic rules of common law pleadings and in many contexts will raise issues which can only embarrass the fair trial of the action. Leaving aside technical pleas such as pleas in abatement, defences are either by way of denial or confession and avoidance. A defence which alleges a meaning different from that of the plaintiff is in the old pleading terminology an argumentative plea of not guilty. Under the principles of pleading at common law, it could tender no issue and would be struck out as embarrassing. Under the modern system, articulating an alternative meaning could conceivably make explicit the ground for denying a pleaded imputation. But it would be only in such a case that a defendant's plea of a new defamatory meaning might be supportable as a plea which prevents the plaintiff being taken by surprise. A plea of justification, fair comment or qualified privilege in respect of an imputation not pleaded by the plaintiff does not plead a good defence. It is immaterial that the defendant can justify or otherwise defend the meaning which it attributes to the publication. In our view, the Polly Peck defence or practice contravenes the fundamental principles of common law pleadings. In general it raises a false issue which can only embarrass the fair trial of the actions.
The other judges in that case, Gaudron and Gummow JJ, referred only in passing to the point by suggesting that an alternative meaning pleaded by a defendant may make plain the ground of denial (see 544 [56]). In his judgment, Kirby J had no occasion to make reference to those remarks.
Australian Capital Territory
Shortly after the decision in Chakravarti, the question of the applicability of Polly Peck in this Territory was considered by Gallop ACJ in Kelly v Nationwide News Pty Ltd (1998) 147 FLR 410. However, that case apparently concerned the pleading by way of defence of meanings quite different from those contended for by the plaintiff. Gallop ACJ cited (at 416) the observations of Miles CJ in Woodger v Federal Capital Press (1992) 107 ACTR 1 at 21:
What these defences have in common is an assertion by the defendant of a meaning which is wholly or partly different from that asserted by the plaintiff which is admitted or proved to be defamatory of the plaintiff, and which the defendant claims to justify by reason of its truth (and in the Australian Capital Territory its publication for the public benefit). These defences are all open to abuse because they are capable of converting a modest and narrow claim by a plaintiff into a wide-ranging expansive and expensive inquiry the limits of which are set by the defendant's capacity to pay for it
In Kelly, after carefully considering the High Court’s decision in Chakravarti, Gallop ACJ upheld the plaintiff’s objections to the proposed amendments to the defence (at 421). The question of a defendant pleading a meaning not more serious and not substantially different does not appear to have been under consideration in that case. In Steiner Wilson & Webster Pty Ltd t/as Abbey Bridal v Amalgamated Television Services Pty Ltd [1999] ACTSC 123 (unreported, 18 November 1999); (2000) Aust Torts Reports ¶81-537, Crispin J found it unnecessary to determine, in light of the remarks of Brennan CJ and McHugh J, whether Polly Peck should be followed.
Queensland
In Robinson v Laws [2003] 1 Qd R 81, the Queensland Court of Appeal would not allow a pleading of the nature authorised by Polly Peck (see de Jersey CJ at 92 [44], Williams JA 101 [92] and MacKenzie J 108 [126]). De Jersey CJ in the passage cited said:
The Polly Peck approach should not be considered open in Queensland. The gist of the cause of action for damages for defamation in Queensland is publication of defamatory matter: s 7 Defamation Act 1889. “Defamatory matter”, is defined (s 4) by reference to imputations, and specifically, “the matter of the imputation”.
It followed that the “invariable practice” of plaintiffs to particularise the imputations upon which they rely left no room for defendants to allege alternative meanings. Williams JA considered that “a plea of justification to some imputation not relied upon by the plaintiff would be otiose”. MacKenzie J was less categorical but he considered that the Polly Peck defence relied upon in the case before him was not available.
Tasmania
The provisions of the Defamation Act1889 (Qld) referred to by the Chief Justice of Queensland have their counterparts in Tasmania (see s 3, 5 and 6 Defamation Act 1957 (Tas). The reasoning in Robinson v Laws would seem to have direct application in that State and I do not understand that the parties in this case contend otherwise.
Victoria
In David Syme & Co Ltd v Hore-Lacy (2000) 1 VR 667 (Hore-Lacy), the Court of Appeal of the Supreme Court of Victoria also referred to the High Court’s decision in Chakravarti. Ormiston JA said (at 675 [21] and [22]):
It would therefore seem desirable, if it was not already required by authority, both that defendants should plead the meanings by way of false innuendo or imputation which they place upon the publication relied upon and that they should plead justification in terms which makes clear the version or versions of meaning of the publication to which that justification is directed. Whatever criticisms the minority levelled at the practice, it seems fortunately restricted to defamation actions and Chakravarti would at least restrict the extent to which imputations and false innuendoes which depart from those pleaded may be relied upon at trial. It would seem, moreover, that even the majority would permit a very limited departure from the case pleaded by the plaintiff; in other words, the jury will have to be told that they cannot find for the plaintiff unless they agree with the meaning or one of the meanings put forward on behalf of the plaintiff, or unless the meaning they would give the publication was only a nuance or variant, not substantially different or more serious from that proposed by the plaintiff.
If that be correct, then a defendant should not need to, nor be permitted to, plead or rely on a meaning other than one which is not more serious and otherwise is not substantially different.
Charles JA said (at 686 [53] and [54]):
The principal criticisms of the practice sanctioned in Polly Peck, of permitting a defendant to plead and justify a meaning different from that contended for by the plaintiff are that such an approach allows the defendant to raise false issues which can only embarrass the fair trial of the action and will on occasions unfairly prevent a plaintiff from pursuing a claim in defamation, in the manner explained by Brennan CJ and McHugh J in Chakravarti. The setting up of false issues by the defendant in this way may well make admissible a substantial body of evidence that would otherwise be irrelevant and thus greatly lengthen proceedings. But it seems to me that the same criticisms would not hold good if the defendant were limited to justifying a meaning which was one upon which the plaintiff might himself obtain a verdict on the pleadings as they stand.
Nor should a defendant be unfairly prejudiced if the defendant were limited to pleading a meaning which was sufficiently close (in the manner already suggested) to the plaintiff’s meanings, so that the plaintiff himself could succeed upon that meaning on the pleadings as they stand. If the defendant is limited to pleading a meaning on which the plaintiff would be permitted to go to the jury, a false issue is not thereby raised. The issues are instead identified and confined, to the benefit of the court and the parties. Of course, if the plaintiff cannot make good a meaning amongst those identified, his action must fail, and the defendant has no need to plead any other meaning.
Callaway JA reasoned from the limitations he perceived on the scope of what he described as the defence of justification. He said (at 691 [72]):
The Polly Peck point does not arise in this case, but, as at present advised, I do not think that a defendant should be allowed to justify at a higher level of generality for the purpose of escaping the imputation upon which the plaintiff relies.
The scope, therefore, for a pleading of the nature that the defendant seeks to sustain in this case is very significantly limited by the court in Hore-Lacy.
Western Australia
In Nationwide News Pty Ltd v Moodie (2003) 28 WAR 314 the Full Court of the Western Australia Supreme Court, Anderson, Steytler and McLure JJ, in general, adopted the approach that the Victorian Court of Appeal had adopted in Hore-Lacey (see Anderson J at [13] and [14], Steytler J [59], [60] and [61]). McLure J proceeded on the basis that the parties accepted that the Polly Peck defence is available in the jurisdiction but its scope is delineated by the extent to which a plaintiff can depart from the pleaded imputation (see [85]).
South Australia
In Manock v Advertiser News-Weekend Publishing Co Ltd (2004) 88 SASR 495, Besanko J held at 513 [48]:
At this stage, when I am asked to consider whether pleadings comply with the rules as to pleadings, I think the correct principle is that the plaintiff can rely on the meanings he has pleaded and meanings which are less injurious and not of a substantially different kind. The plaintiff may rely on unpleaded meanings which are simply a variant of the meanings pleaded, or involve no more than a different nuance or shade of meaning.
and at 514 [54]:
… I think the principle I should apply is that the defendant may only plead and seek to justify such alternative meanings as may be relied on by the plaintiff to obtain a judgment even though he has not pleaded them. A plaintiff may rely on unpleaded meanings which are less injurious or represent merely a variant or a different nuance from the meanings pleaded. The plaintiff may not rely on unpleaded meanings which are substantially different.
On appeal in Advertiser News-Weekend Publishing Co Ltd v Manock (2005) 91 SASR 206, the Full Court of the South Australian Supreme Court (Doyle CJ, with whom Vanstone and White JJ agreed) agreed with those propositions after a full examination of the authorities (at 219 [73]). Doyle CJ further observed (at 220 [80] – [82]:
In my respectful opinion the observations of Brennan CJ and McHugh J are supported by practical considerations. The approach that they take is conducive to the fair conduct of a trial. I agree with them that under the law as stated in Polly Peck it appears open to a defendant to plead and justify meanings that differ from the meaning on which the plaintiff relies, resulting in the introduction of evidence that will increase the length of the trial, may tend to cloud the issues, and may work to the unfair prejudice of the plaintiff.
The latitude that the principle stated in Polly Peck allows will lead to defendants re-stating defamatory imputations at higher levels of generality, then seeking to justify the more general imputation by evidence that does not bear directly on the matter of which the plaintiff complains. On that point it is pertinent to recall the observation by Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corp (1990) 21 NSWLR 135 at 137:
“Almost any attribution of an act or condition to a person is capable of both further refinement and further generalisation.”
For these reasons, as a matter or principle, as a matter of fairness and having regard to the public interest in the efficient conduct of a trial, the law as stated by O’Connor LJ in Polly Peck should not be applied in this State. A preferable approach is that adopted by Charles JA in Hore-Lacy at [53] and [54]. For those reasons I agree with the Judge that the pleading of an alternative meaning should be struck out. I would dismiss the appeal against this aspect of the Judge’s reasons.
I would also respectfully adopt the reasoning that led the Full Court of the South Australian Full Court to this conclusion.
New South Wales
The position of the New South Wales courts is not directly material as the pleadings in this case are not concerned with publication in that State. However, insofar as the New South Wales courts have considered the question, they may be persuasive. The position taken by Levine J in Whelan v John Fairfax Publications (2002) 56 NSWLR 89 at 100 [51] and [52] is that there are not sufficiently clear and authoritative statements from the appropriate appellate courts and that he, accordingly, would decline to strike out pleadings based on the Polly Peck defence. However, in a case decided after the parties had completed their submissions in this matter, the New South Wales Court of Appeal considered the question of the pleading of the defence in Victoria, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory in John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 where Handley JA (Spigelman CJ and McColl JA agreeing) said (at [41] and [42]):
The appellant pleaded a defence in respect of publications in Victoria, South Australia, Western Australia, the Northern Territory and the Australian Capital Territory that was sanctioned by Polly Peck (Holdings) plc v Trelford [1986] QB 1000 CA. It was based on a single imputation that “the plaintiff carried out an illegal backburn in circumstances of extreme fire danger”. The defence alleged that this was not separate and distinct from the plaintiff’s imputations and was true in substance and fact.
There must be a real doubt as to whether that imputation could answer either of those pleaded by the plaintiff because it is comprised within them and is narrower. However there is no need to consider this defence in detail because at the present time the common law of Australia (John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, 514) does not recognise it. It was rejected in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519, 526-30 by Brennan CJ and McHugh J, in dicta which did not receive the express endorsement of the other members of the Court. However those dicta have been followed by intermediate appellate courts in Victoria (David Syme & Co Ltd v Hore-Lacy [2000] 1 VR 654), Queensland (Robinson v Laws [2003] 1 Qd R 81), Western Australia (Nationwide News Pty Ltd v Moodie (2003) 28 WAR 314), and South Australia (Advertiser-News Weekend Publishing Co Ltd v Manock (2005) 91 SASR 206). This Court should follow this line of authority and it would be inappropriate for us to re-examine the question. The Judge rightly rejected this defence.
The test to be applied to the defendant’s meaning
In discussing the consequences of a defendant being permitted to raise an issue that the matter complained of bears a meaning different from the meaning pleaded or relied upon by the plaintiff, Brennan CJ and McHugh J in Chakravarti (at 534 [24]) said:
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.
That seems to me to support the pleading that would have been permitted by Ormiston JA in Hore-Lacy (at 675 [21]) where he referred to the publication being “a nuance or variant, not substantially different or more serious from that proposed by the plaintiff”. In the result, I take this to be an appropriate test to determine whether the pleading by the defendant of the Defendant’s Meaning in this case should be permitted. In other words, the only variant that the defendant may be permitted to plead is that which conforms to a meaning open to be found on the trial of this matter, otherwise the attempt to plead a different meaning from that pleaded by the plaintiffs should be struck out.
The defendant’s meaning
By paragraph 5(b) of the defence, the defendant admits the words spoken to The Australian journalist were words to the effect:
The impact on the industry of a failure to protect racing integrity would be devastating.
Who would want to invest in an industry that allows organised crime to proliferate.
By paragraph 7(c) of the defence, the defendant admits that the words set out in the article and as pleaded in Schedule A of the statement of claim were:
Racing Victoria chief executive Robert Nason warned that granting a licence to Betfair could see Tasmania’s racing industries thrown out of mainland betting pools and Sky Channel’s TV coverage.
“It would be devastating – who wants to invest in an industry that allows organised crime to flourish,” Mr Nason said.
These words are also described in the defence as “the Matter Complained Of”.
Paragraph 5(b) of the plaintiffs’ statement of claim also says that plaintiffs further rely upon certain assertions in a particular letter of the defendant’s solicitors to the plaintiffs’ solicitors dated 29 April 2005. Leaving aside the propriety of pleading in that way, the defendant’s solicitors, in the specific paragraphs referred to in the statement of claim, stated that:
1.Mr Nason did have a telephone conversation with the journalist, Mr Matthew Denholm, on 12 April 2005.
2.…
3.Mr Denholm asked Mr Nason for the racing industry’s response to the bid by Betfair to obtain a licence in Tasmania. Mr Nason replied that he preferred not to comment on that issue as he was concerned that any comment could be taken by the Tasmanian government as inappropriate interference.
4.Mr Denholm asked Mr Nason whether granting a licence to Betfair could see Tasmania’s racing industry “thrown out” of mainland betting pools and Sky Channel’s TV coverage.
Mr Nason responded that that was a matter for Tabcorp rather than him, but acknowledged that “anything was possible”.
5.Mr Denholm then asked Mr Nason for the Victorian racing industry’s position on betting exchanges.
Mr Nason referred Mr Denholm to a recent Access Economics study. The study is publically [sic] available and has been reported on in the media including both prior to and in Mr Denholm’s article. The study concerned inter alia the economic consequences for the racing industry in the event that a betting exchange related scandal (such as has reportedly occurred in the United Kingdom) resulted in a public loss of confidence in the racing industry.
It was in this context that Mr Nason commented on the potential impact on the Victorian racing industry in the event that the integrity of that industry was not assured. His opinion is reflected in the quotation in the article repeated in your letter to us.
The only extrinsic fact pleaded by the plaintiffs was that at all material times Betfair was a betting exchange and was widely known and reported to be so.
Paragraph 12(d) of the defence assigns what is described as “the Meaning of the Matter Complained Of”. That subparagraph pleads:
[t]he Matter Complained Of in its natural and ordinary meaning meant and was understood to mean that if the First Plaintiff, alternatively the Plaintiffs, were granted a licence to establish an online betting exchange which permits punters to lay a horse to lose, investment in the racing industry in Australia would decrease due to a perception that the industry allows organised crime to flourish (‘Defendant’s Meaning’).
Whether the Defendant’s Meaning is open to be found at trial
The innuendo contended for by the defendant in this subparagraph contains two aspects not the subject of the innuendo pleaded by the plaintiff in paragraph 8(g) of the statement of claim. The first is the characteristic of an online betting exchange “which permits punters to lay a horse to lose” and the second is that investment in the racing industry would decrease “due to a perception”.
The first issue is whether the defendant’s words as pleaded by the plaintiffs or as supplemented by the defendant’s pleading admit of the particular construction that the defendant places upon them.
The defendant says that these aspects are apparent from the whole context. However, to get to that point the defendant needs to look to the published article rather than the published words. However, the article is only relevant to context insofar as it is the republication of the words complained of and is indicative of the defendant’s knowledge and intention as to republication of the words or their substance.
In submissions by the defendant, I was referred to a proposition found in Gatley on Libel and Slander (1981) London, Sweet & Maxwell, 8th ed (which was cited by Young CJ in Eq in Greek Herald Pty Ltd v Nikolopoulos & Ors (2002) 54 NSWLR 165 at 175) that:
The defendant is entitled to have read as part of the plaintiff’s case the whole of the publication from which an alleged libel is extracted, and also any other document referred to which qualifies or explains its meaning.
Of course that must be so, but it is the context surrounding the publication of the words not the context of the words in the article republishing those words that is material in this case. The circumstances to which the article refers, and which might provide an exposition that online gambling can involve wagering on horses to lose, is not naturally what would ordinarily be understood. Nor, in my view, do the words used by the defendant carry such an esoteric implication. Further, I do not think that the words used by the defendant, of themselves, can give rise to a reason for there to be a perception as to why organised crime might flourish. I just do not see how such meanings can be derived from any of the matters pleaded and relied upon as being the matter complained of by either of the plaintiffs or the defendant.
Insofar as the plaintiffs’ innuendo set out in paragraph 8(g) of the statement of claim asserts a consequence from the licensing of the plaintiffs in causing organised crime to flourish, it may of itself admit of some ambiguity (see, for example, Amalgamated Television Services v Marsden (1998) 43 NSWLR 158 at 163). However, I am unable to see how such an asserted consequence admits of a variant relating to “perception” either at large or in some undefined entity.
It follows that I do not consider that what is pleaded is a variant or nuance of the meanings contended for by the plaintiff and on that basis, the pleading should be struck out.
Finally, there seems to me to be another difficulty confronting the defendant in asserting that the Defendant’s Meaning should be permitted to be pleaded. The defendant concedes that the plaintiffs’ imputation, if accepted, is defamatory but it does not follow that the qualification which the defendant would make to that imputation is also defamatory even if the defendant says that the words used can bear the meaning that the defendant now pleads.
The plaintiffs contend that the pleaded innuendo in paragraph 8(g) of the statement of claim is capable of being defamatory notwithstanding that it must stand without an assertion of any act or conduct on the part of the plaintiff (Sungravure Pty Ltd v Middle East Airlines Airliaban SAL (1975) 134 CLR 1). It does not follow that a further qualification elaborating on what is characterised as a “perception” that could exist can bear the same defamatory sting. I do not think that it does. That would seem to me to be a further reason for not permitting the pleading. In my view, the defendant’s pleading does no more than set up an argument as to why the plaintiffs’ pleaded innuendo might not be considered to be defamatory.
I strike out paragraph 12 of the defendant’s defence.
The defendant’s application to strike out paragraph 8 of the statement of claim in SC 725 of 2005
By paragraph 5 of the statement of claim in this matter, the plaintiffs allege:
On or before 18 October 2004 the Defendant said words to the following substance or effect to Geoff Wilkinson, a journalist of The Herald Sun:
“If Betfair was licensed in Australia, racing would soon be dominated by organised crime lords who would decide which horses win which races.”
The imputations that the plaintiffs attribute to those words are set out in paragraph 8 of the statement of claim that:
(a)The Plaintiff is an organised criminal enterprise;
(b)The Plaintiff is an instrument of organised crime;
(c)The Plaintiff is so dishonest that it would fix horse races;
(d)The Plaintiff is a corrupt company whose entry into the Australian betting market would destroy public confidence in Australian racing;
(e)The Plaintiff is a company controlled by organised crime lords.
The defendant says that these imputations should be struck out as they are not reasonably capable of being conveyed to ordinary reasonable readers.
Both the plaintiffs and the defendant referred to the Privy Counsel decision in Jones v Skelton [1963] SR (NSW) 644 at 650:
It is well settled that the question as to whether words which are complained of are capable of conveying a defamatory meaning is a question of law and is therefore one calling for decision by the court. If the words are so capable then it is a question for the jury to decide as to whether the words do in fact convey a defamatory meaning. In deciding whether words are capable of conveying a defamatory meaning the court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. In Capital and Counties Bank v George Henty & Sons (1882) 7 App Cas 741, at p 745, Lord Selborne said: “The test according to the authorities is whether under the circumstances in which the writing was published, reasonable men to whom the publication was made would be likely to understand it in a libellous sense”. The ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning; any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words. See Lewis v Daily Telegraph [1963] 1 QB 340. The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense. (My emphasis)
The plaintiffs were at pains to emphasise the latter part of the passage cited. In particular, the implication or inference from the words used that a reasonable reader guided by general knowledge should not be fettered by any strict legal rules of construction.
The plaintiffs referred to Lord Devlin’s comment in Lewis v Daily Telegraph Limited [1963] 2 WLR 1063 at 1095 that:
A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire; but it can be done.
The plaintiffs also placed emphasis on the comment by Holroyd Pearce LJ in Lewis v Daily Telegraph [1963] 1 QB 340 at 374:
When persons publish words that are imprecise, ambiguous, loose, fanciful or unusual, there is room for a wide variation of reasonable opinion on what the words mean or connote.
I accept those principles and the approach that the plaintiffs rely upon. This is not a case where I can regard any of the pleaded imputations as arising expressly from the words. They can only arise by implication or inference but I do not require the implication or inference that may arise to be too nicely drawn or to follow other than in a most general way.
However, I do not consider that the ordinary reasonable reader could consider that the words complained of imply that there is any direct link between Betfair or the licensing of Betfair with organised crime lords or organised crime. In my view, the consequence asserted by the latter words does not at all follow from the circumstances asserted. I take the view that the imputation of each of the “plaintiff”, directly, being an organised criminal enterprise or of being an entity actually controlled by organised crime lords as just not capable of being sustained. This conclusion means that paragraphs 8(a) and 8(e) of the plaintiffs’ statement of claim in matter SC 725/2005 must be struck out.
In my view, the real issue is whether it can be generally implied from the words used that Betfair is or would be complicit in the domination of racing by organised crime lords. With some hesitation, I think that it may be open to draw that implication from the conditional consequence that the statement encompasses. The imputation in paragraph 8(b) of the statement of claim seems to me to come closest to that implication. That is, that “the Plaintiff is an instrument of organised crime”. In their submissions, the plaintiffs say that the meaning conveyed is that of the “crime lords” using the plaintiff to decide which horses win races. I have doubts about whether such a meaning is so implied or if it is that it goes far enough for the plaintiffs’ purposes. However, the statement may contain a notion of assistance by association. It may also be the case that the coupling of Betfair with organised crime as, perhaps, some sort of facilitator means that the imputation pleaded in paragraph 8(b) may be capable of being defamatory.
The imputation in paragraph 8(c) does not seem to me to arise on any reasonable reading of the words. There is no link or no implication of a link to the “fixing” of horse races by other than the designated organised crime lords.
Paragraph 8(d) contains two notions neither of which can be derived from the words used. I cannot see how it gives rise to a characteristic of corruption in respect to the plaintiffs. Further, without that characteristic being assigned to the plaintiffs, an allegation of destruction of public confidence cannot be supported. The imputation cannot arise on the words used by the defendant. In any event, I understand that the plaintiffs no longer rely upon this imputation.
No doubt the plaintiffs may wish to consider their position in light of these rulings, but at the present, the only imputation that I would consider that can be sustained on the words used is that contained in paragraph 8(b) of the statement of claim.
The defendant’s application to strike out paragraph 9 of the statement of claim in SC 307 of 2005 and in SC 725 of 2005
Paragraph 9 of the statement of claim in matter SC 307/2005 states:
The Plaintiffs will rely upon any defamatory meanings, other than those pleaded in paragraph 7 [sic] above, which the Court finds were conveyed.
The paragraph 7 referred to is plainly a reference to paragraph 8 of the statement of claim in matter SC 307/2005 which pleads the following:
The Matter Complained Of in its natural and ordinary meaning, or alternatively together with the extrinsic facts particularised below, was defamatory of the Plaintiffs and was meant and was understood to mean respectively of the Plaintiffs:
(a)That the First Plaintiff condones organised crime;
(b)That the First Plaintiff is a partner in a business which knowingly profits from organised crime;
(c)That the Second Plaintiff condones organised crime;
(d)That the Second Plaintiff conducts a business which knowingly profits from organised crime;
(e)That the Third Plaintiff condones organised crime;
(f)That the Third Plaintiff is a partner in a business which knowingly profits from organised crime;
(g)That the licensing of the business of the Firsts, Second and Third Plaintiffs in Australia to conduct on-line gaming would cause organised crime to flourish in the racing industry.
Paragraph 9 of the statement of claim in SC 725/2005 states:
The Plaintiffs will rely upon any defamatory meanings, other than those pleaded in paragraph 8 above, which the Court finds were conveyed.
Paragraph 8 in the statement of claim in SC 725/2005 pleads the defamatory meanings upon which the plaintiffs rely is set out in paragraph [49] of these reasons.
I have previously referred to Brennan CJ and McHugh J in Chakravarti commenting upon the variants open to a jury (see [31] above). Reference may also be made to Gaudron and Gummow JJ in Chakravarti at [60] and Kirby J at [139]. The Court of Appeal in this jurisdiction has accepted that it is sufficient that the imputations conveyed be substantially similar to the pleaded imputations and that it is the substance of the imputation pleaded that is determinative. Different nuances may be relied upon if not unfair to allow the plaintiff to depart from the meaning pleaded (see John Fairfax Publications Pty Ltd v ACP Publishing Pty Ltd (2005) 157 ACTR 28 [16], [17]). Comment to a similar effect is made in David Syme & Co Ltd v Hore-Lacy (supra) at [17].
The plaintiffs’ submission is that paragraph 9 of the statement of claim in both proceedings is a proper plea. It is said that:
[I]t does no more than state the entitlements of the tribunal of fact to find for nuances or shades of meaning other than expressly pleaded by the plaintiffs.
If that is all that it does, then it is not properly pleaded to have that effect. As the defendant points out it refers to any defamatory meaning and is not limited to those nuances where there would be no unfair disadvantage to the defendant by allowing the plaintiffs to rely upon it.
The defendant has pleaded to the paragraph in each case by stating that, “It does not plead to paragraph 9 as that paragraph contains no allegations against him.”. That pleading only illustrates the embarrassing nature of the pleading. What the defendant has pleaded is strictly not a proper response but no proper response can be given if the paragraph has the meaning which the plaintiffs say it has.
I consider that paragraph 9 in each of the statements of claim is embarrassing and should be struck out.
I reserve the question of costs.
I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.
Associate:
Date: 13 November 2006
Counsel for the plaintiffs: Mr B McClintock SC with Mr M Richardson
Solicitor for the plaintiffs: Phillips Fox as agents for Gilbert & Tobin
Counsel for the defendant: Mr B Walker SC with Mr M Collins
Solicitor for the defendant: Clayton Utz
Date of hearing: 27 March 2006
Date of judgment: 13 November 2006
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