Cornwell v Channel Seven Sydney Pty Ltd

Cornwell (the plaintiff) appealed to the Court of Appeal of New South Wales against a decision of a primary judge who refused to strike out a contextual imputation of dishonesty pleaded by Channel Seven Sydney Pty Ltd (the defendant) in defamation proceedings. The dispute arose from a news item broadcast by the defendant concerning the plaintiff's alleged links to illegal investment schemes and his reference as a casualty of an ICAC inquiry into Liberal Party finances.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding that the imputation of dishonesty was not unarguably bad, and whether this general imputation was carried "in addition to" other specific imputations complained of by the plaintiff. The court also considered whether the primary judge had misunderstood the effect of the decision in *Fairfax Media Publications v Zeccola* and whether the general imputation of dishonesty was at least arguably capable of arising from the broadcast. The court was also required to consider the procedural distinction between a strike-out application under UCPR 14.28(1)(a) and the determination of a separate question under UCPR r 28.1, and whether the correct test had been applied by the primary judge.

The Court of Appeal, comprising McColl, Macfarlan and Gleeson JJA, reasoned that the primary judge had correctly applied the relevant legal principles. The court found that the imputation of dishonesty was arguably capable of arising from the broadcast and was not unarguably bad in the context of the other imputations pleaded. The court distinguished the present case from *Fairfax Media Publications v Zeccola*, finding that the contextual imputation of dishonesty was not pleaded in a way that offended the principles established in that case. The court concluded that the primary judge had not erred in refusing to strike out the contextual imputation.

Consequently, the Court of Appeal granted leave to appeal, directed the applicant to file a notice of appeal within ten days, and dismissed the appeal with costs. The cross-summons seeking leave to cross-appeal was also dismissed with costs.