Fairfax Digital Australia & New Zealand Pty Ltd v Kazal

[2018] NSWCA 77

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Fairfax Digital Australia & New Zealand Pty Ltd v Kazal [2018] NSWCA 77

Hearing dates:

11 September 2017

Decision date:

17 April 2018

Before:

McColl JA at [1]
Meagher JA at [35]
Gleeson JA at [48]

Decision:

(1)   Grant leave to appeal.

 

(2)   Direct the appellants to file and serve a notice of appeal in accordance with the draft notice of appeal contained in the White Book within 7 days.

 

(3)   Appeal dismissed.

 (4)   The appellants to pay the respondent’s costs of the appeal.

Catchwords:

DEFAMATION – defence – contextual truth – Defamation Act 2005 (NSW), s 26 – where defendants pleaded reliance upon plaintiff’s imputations as contextual imputations contingent upon tribunal of fact finding the plaintiff’s imputation to be substantially true – where contingent pleading back struck out – whether contingent pleading of contextual truth defence permissible – whether the imputations which meet the meaning of defamatory imputations in s 26(a) can change at trial

  DEFAMATION – defence – particulars of mitigation of damages – whether reputation particulars were directly relevant background context – where particulars also relied upon for defence of honest opinion – where particulars struck out – whether particulars lack precision and are inadequate

Legislation Cited:

Civil Law (Wrongs) Act 2002 (ACT)
Defamation Act 1974 (NSW), s 9(2), 16
Defamation Act 2005 (NSW), ss 4, 6, 8, 22, 25, 26, 38
Interpretation Act 1987 (NSW)
Supreme Court Act 1970 (NSW), s 101(2)(e)
Uniform Civil Procedure Rules 2005 (NSW), r 14.28, 14.31, 14.33, 28.2

Cases Cited:

Abou-Lokmeh v Harbour Radio Pty Ltd [2016] NSWCA 228
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41
Associated Newspapers Ltd v Dingle [1964] AC 371
Australian Broadcasting Corporation v McBride (2001) 53 NSWLR 430; [2001] NSWCA 322
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15
Banque Commerciale SA (En liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11
Barrow v Bolt & Anor [2013] VSC 226
Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 36
Burstein v Times Newspapers Limited [2001] 1 WLR 579
Channel Seven Sydney Pty Ltd v Mahommed (2010) 278 ALR 232; [2010] NSWCA 335
Chase v Newsgroup Newspapers Ltd [2002] EWCA Civ 1772
Chel v Fairfax Media Publications Pty Ltd (No 6) [2017] NSWSC 230
Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623
Commissioner for Railways (NSW) v Aglianos (1955) 92 CLR 390
Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 250 CLR 523; [2013] HCA 16
Coxon v Wilson [2016] WASCA 48
Crosby v Kelly [2013] FCA 1343
Dank v Cronulla Sutherland District Rugby League Football Club Ltd [2014] NSWCA 288
Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174
Fairfax Media Publications Pty Ltd v Zeccola (2015) 91 NSWLR 314; [2015] NSWCA 329
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55
Firebird Global Masterfund II Ltd v Republic of Nauru (2016) 258 CLR 31; [2015] HCA 43
General Steel Industries Inc v Commissioner for Railways of New South Wales (1964) 112 CLR 125; [1964] HCA 69
General Steel Industries Inc v Commissioner for Railways of New South Wales (1964) 112 CLR 125; [1964] HCA 69
Gett v Tabet (2009) 254 ALR 504; [2009] NSWCA 76
Goody v Oldhams Press Ltd [1967] 1 QB 333
Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1; [2003] VSCA 161
Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96; [2014] NSWCA 90
Howden v “Truth” & “Sportsman” Ltd (No 2) (1938) 38 SR (NSW) 287
Howden v “Truth” & “Sportsman” Ltd (1937) 58 CLR 416
John Fairfax Publications Pty Ltd v Blake (2001) 53 NSWLR 541; [2001] NSWCA 434
John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227
Jones v Pollard [1997] ENLR 233
McMahon v John Fairfax Publications Pty Ltd (No 3) [2012] NSWSC 196
McPherson v Daniels (1829) 10 B & C 263; 109 ER 448
Mizikovsky v Queensland Television Ltd (No 3) [2011] QSC 375
Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68
Nationwide News Pty Ltd v Weatherup [2017] QCA 70
O’Brien v Australian Broadcasting Corporation [2017] NSWCA 338
O’Hagan v Nationwide News Pty Ltd (2001) 53 NSWLR 89; [2001] NSWCA 302
Pamplin v Express Newspapers Ltd [1988] 1 WLR 116
Plato Films Ltd v Speidel [1961] 1 AC 1090
Potts v Moran (1976) 16 SASR 284
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Ratcliffe v Evans [1892] 2 QB 524
Reynolds v Times Newspapers Ltd [2001] 2 AC 127; [1999] UKHL 45
Roberts v Camden (1807) 9 East 93; 103 ER 508
Rofe v Smiths Newspapers Ltd (1924) 25 SR (NSW) 4
Rose v Allen & Unwin Pty Ltd [2015] NSWSC 991
R v XY (2013) 84 NSWLR 363; [2013] NSWCCA 121
Scott v Samson (1882) 8 QBD 491
Singleton v Ffrench (1986) 5 NSWLR 425
SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936; [2017] HCA 34
The Age Co Limited v Elliot (2006) 14 VR 375; [2006] VSCA 168
The Federal Capital Press of Australia Pty Ltd v Balzola [2015] NSWCA 285
Turner v News Group Newspapers Ltd [2006] 1 WLR 3469; [2006] EWCA Civ 540
Wagner & Ors v Harbour Radio Pty Ltd & Ors [2017] QSC 222
Warren v The Random House Group Ltd [2009] QB 600
Whelan v John Fairfax Publications Pty Ltd (2002) 56 NSWLR 89; [2002] NSWSC 1028

Texts Cited:

Defamation – Discussion Paper [1993] NSWLRCDP 32
Gatley on Libel and Slander (12th ed, 2013, Sweet & Maxwell)
New South Wales Legislative Assembly, Parliamentary Debates, (Hansard), 13 September 2005
Spencer Bower, The Law of Actionable Defamation, Butterworth & Co (1923)

Category:

Principal judgment

Parties:

Fairfax Digital Australia & New Zealand Pty Ltd (First Appellant)
Linton Besser (Second Appellant)
Kate McClymont (Third Appellant)
Oscar Kazal (Respondent)

Representation:

Counsel:
Mr P Gray SC / Mr MA Polden (Appellants)
Mr BR McClintock SC/Ms S Chrysanthou/Mr N Olson (Respondent)

  Solicitors:
Banki Haddock Fiora (Appellants)
Rigby & Klaus (Respondent)

File Number(s):

2017/67198

Publication restriction:

No

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law Division

Citation:

[2017] NSWSC 44

Date of Decision:

10 February 2017

Before:

McCallum J

File Number(s):

2014/82498

HEADNOTE

[This headnote is not to be read as part of the judgment]

The first applicant, Fairfax Digital Australia & New Zealand Pty Ltd, published two articles in the online edition of the Sydney Morning Herald about the respondent, Mr Kazal. The author of the first article was the second applicant, Mr Besser, and the author of the second article was the third applicant, Ms McClymont. Mr Kazal brought defamation proceedings in the Supreme Court alleging that the first article carried one defamatory imputation and that the second article carried seven defamatory imputations.

The applicants (together, Fairfax) pleaded various defences as to the second article, including justification at common law and under Defamation Act 2005 (NSW), s 25 and contextual truth under Defamation Act, s 26. The plea of justification only asserted that four of the plaintiff’s imputations were substantially true, and the plea of contextual truth asserted (contingently) that any of the plaintiff’s imputations found to be conveyed, defamatory but not substantially true did not further harm Mr Kazal’s reputation because of the substantial truth of the other such imputations found to be substantially true. In the alternative, Fairfax pleaded a lengthy list of particulars in mitigation of damages.

The primary judge (McCallum J) upheld Mr Kazal’s application to strike out the defence of contextual truth and the mitigation particulars. In doing so, her Honour concluded: (1) that Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174 precluded the contingent “pleading back” of the plaintiff’s imputations as contextual imputations; (2) that a plaintiff’s imputation does not cease to be one of “the defamatory imputations of which the plaintiff complains” within Defamation Act, s 26(a) upon being found to be substantially true; and (3) that the basis upon which those particulars were capable of mitigating any damage was obscure. Fairfax seeks leave to appeal by asserting error in each of these conclusions.

Held, granting leave to appeal and dismissing the appeal:

Contextual Truth Defence

1.   A defamatory imputation cannot be both one “of which the plaintiff complains” and a contextual imputation. As a defamatory imputation found to be substantially true does not cease to be one “of which the plaintiff complains” within Defamation Act, s 26, a defendant is not permitted to adopt it contingently on that finding as a contextual imputation: at [2] (McColl JA), [39]-[44] (Meagher JA), [123], [134]–[147] (Gleeson JA).

Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174; Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369 explained. Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 discussed.

Per McColl JA (Meagher and Gleeson JJA not deciding)

2. A finding that a plaintiff’s imputation is substantially true must be given effect, not only for the purposes of mitigation of damages, but also in determining whether the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations within Defamation Act, s 26(b): at [21].

Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 discussed.

3. It is unnecessary for a defendant to plead or particularise the effect of a substantially true plaintiff’s imputation for the purposes of s 26, Defamation Act, which will follow as a matter of law: at [34].

Particulars of Mitigation of Damages

4.   The mitigation particulars contained broad generalisations and lacked precision, and they neither identified support for the assertion that Mr Kazal approved of or acquiesced in the alleged conduct of other members of his family nor arguably provided directly relevant background context. Accordingly, they did not disclose a reasonable defence of mitigation of damages, were embarrassing and had a tendency to cause delay in the proceedings: at [2] (McColl JA), [35] (Meagher JA), [192]–[193], [198] (Gleeson JA).

Uniform Civil Procedure Rules 2005 (NSW), r 14.28 (1) applied.

Judgment

1. McCOLL JA: I have had the benefit of reading Gleeson JA’s draft reasons for granting Fairfax Digital Australia and New Zealand Pty Ltd, Mr Linton Besser and Ms Kate McClymont (Fairfax) leave to appeal against the decision of McCallum J in Oscar Kazal v Fairfax Media Publications Pty Ltd [1] striking out Fairfax’s defence of contextual truth and certain of its particulars in mitigation of damages, but dismissing the appeal.

   1. [2017] NSWSC 44.

2. I agree with his Honour’s conclusion that a defamatory plaintiff’s imputation found to be substantially true for the purposes of the defence of justification in s 25 of the Defamation Act 2005 (NSW) (2005 Act) does not cease to be one “of which the plaintiff complains” for the purposes of the defence of contextual truth for which s 26 of the 2005 Act provides. The consequence of this conclusion is that to the extent Beech-Jones J held to the contrary in Chel v Fairfax Media Publications (No 6), [2] his Honour, with respect, erred. I also agree with Gleeson JA’s reasons, save to the extent to which they conflict with the observations which follow. I agree with the orders his Honour proposes.

   2. [2017] NSWSC 230 (at [42] – [44]).

3. I make the following additional observations which presume familiarity with the background facts and issues as explained by Gleeson JA.

4. At the heart of Fairfax’s submissions was its contention that injustice would flow to a defendant if a plaintiff could rely, in defeating a contextual truth defence, on imputations which do not harm the plaintiff’s reputation because they have been found to be substantially true for the purposes of a s 25 defence. [3]

   3. It is clear that not all plaintiffs embrace the proposition that the inclusion in the plaintiff’s defamatory imputations for the purposes of the s 26(b) weighing exercise of a plaintiff’s imputation which has been found to be substantially true for the purposes of s 25 of the 2005 Act would advantage the plaintiff. In Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 (Mizikovsky), it was the plaintiff who, on appeal, contended that the trial judge, Dalton J, should not have permitted the jury to consider for the purposes of the s 26(b) exercise, the imputation he had pleaded which the jury had found to be substantially true: see Mizikovsky (at [11] – [20]). Fraser JA pointed out the irony of the plaintiff’s position: at [20].

The common law

5. In considering the question whether such injustice does in fact exist on the proper construction of the 2005 Act, it is important to bear in mind that pursuant to s 6(2), the 2005 Act “does not affect the operation of the general law in relation to the tort of defamation except to the extent that this Act provides otherwise (whether expressly or by necessary implication).”

6. A defamation action “is fundamentally an action to vindicate a man’s reputation on some point as to which he has been falsely defamed”. [4] At common law once the plaintiff proved an imputation conveyed by the matter complained of to be defamatory, two matters at least were presumed. First, that some damage would inevitably be caused to the plaintiff’s reputation by the publication of defamatory matter. [5] Secondly, that the matter complained was false. [6]

   4. Associated Newspapers Ltd v Dingle [1964] AC 371 (at 396) per Lord Radcliffe; see also Howden v Truth & Sportsman Ltd (1937) 58 CLR 416 (Howden) (at 431) per Evatt J.

   5. Ratcliffe v Evans [1892] 2 QB 524 (at 528); Gatley on Libel and Slander (12th ed, 2013, Sweet & Maxwell) at [32.51].

   6. Roberts v Camden (1807) 9 East 93 (at 95); 103 ER 508 (at 509); Singleton v Ffrench (1986) 5 NSWLR 425 (Singleton) (at 442) per McHugh JA (Samuels JA agreeing); The Age Co Limited v Elliot (2006) 14 VR 375; [2006] VSCA 168 (Elliot) (at [15]) per Buchanan JA (Chernov JA agreeing); (at [20]) per Ashley JA.

7. The plaintiff did not have to lead evidence on the issue of falsity. [7] The plaintiff’s case went to the jury on the issue of damages with the uncontradicted presumption that the published matter was false. [8] The plaintiff was, however, entitled to lead evidence of falsity in any case, and so achieve some restoration of reputation, [9] and demonstrate increased hurt so as to attract a larger award of damages. [10]

   7. Reynolds v Times Newspapers Ltd [2001] 2 AC 127; [1999] UKHL 45 (Reynolds) (at 192) per Lord Nicholls of Birkenhead (Lords Cooke and Hobhouse agreeing).

   8.    Singleton (at 442 – 443).

   9.    Defamation – Discussion Paper [1993] NSWLRCDP 32 (at [6.29]).

   10. Singleton (at 442); see also the discussion in Barrow v Bolt & Anor [2013] VSC 226 (at [13] – [14]) per Beach J; the dangers to a plaintiff of this approach were discussed by Evatt J in Howden.

8. A “corollary of the rule that the plaintiff did not have to prove falsity was that, without a plea of justification on the record, the defendant could not lead evidence of the truth of the publication in mitigation of damages.” [11]

   11.    Singleton (at 442).

9. Because “the law will not permit a man to recover damages in respect of an injury to a character which he either does not, or ought not, to possess,” [12] at common law, justification was an affirmative defence. [13] It was also, a complete defence. [14] If a defence of substantial truth was established, there was “deemed in law to have been just cause or excuse for the publication of the defamatory matter”. [15] The reason this is so can be seen from two decisions.

   12. McPherson v Daniels (1829) 10 B & C 263; 109 ER 448 (at 272) per Littledale J; referred to with approval in Reynolds (at 192).

   13. Spencer Bower, The Law of Actionable Defamation, Butterworth & Co (1923) (Spencer Bower) Part VI, Article 24; see also Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174 (Kermode) (at [46]).

   14. Reynolds (at 192); Rofe v Smiths Newspaper Ltd (1924) 25 SR (NSW) 4 (Rofe) (at 21) per Street ACJ.

   15. Spencer Bower, Part VII, Article 25; the defendant had to justify every defamatory allegation: Potts v Moran (1976) 16 SASR 284 (at 305) per Bray CJ (Wells and Sangster JJ agreeing).

10. First, in Rofe, Street ACJ explained that under the common law:

“…as the object of civil proceedings is to clear the character of the plaintiff, no wrong is done to him by telling the truth about him. The presumption is that, by telling the truth about a man, his reputation is not lowered beyond its proper level, but is merely brought down to it.” [Emphasis added.] [16]

16.    At (21 – 22).

11. Secondly, in Chase v Newsgroup Newspapers Ltd, in the English Court of Appeal, Brooke LJ explained that “a successful plea of justification is an absolute defence to a claim in libel because it shows, as a matter of objective fact, that a claimant is not entitled to the unblemished reputation which he/she claims to have been damaged by the publication of which complaint is made.” [17]

    17. [2002] EWCA Civ 1772 (at [33]) (Rix and Keene LJJ agreeing).

12. At common law, where a defendant is not able to justify all the imputations carried by a matter complained of, the defendant may nevertheless seek to justify any one of several distinct defamatory meanings raised by a plaintiff’s claim. [18] This is known as partial justification. [19] Views differ as to whether it is a defence to the cause of action, which is the publication of defamatory words or merely relevant to the question of damages, and if proven, results in a reduction in damages. [20]

    18. Kermode (at [50]); referring to Howden v “Truth” & “Sportsman” Ltd (No 2) (1938) 38 SR (NSW) 287 (at 290) per Jordan CJ. The latter appeal came before the Full Court consequent upon the filing of an amended plea after the High Court appeal in Howden v Truth & Sportsman Ltd: Whelan v John Fairfax Publications Pty Ltd (2002) 56 NSWLR 89; [2002] NSWSC 1028 (Whelan) (at [61]) per Levine J,

    19.    Kermode (at [50]).

    20. Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1; [2003] VSCA 161 (at [306](iii)) (Popovic) per Gillard AJA (with whom Winneke ACJ and Warren AJA relevantly agreed); cf Whelan (at [54] ff).

13. In Howden, [21] Evatt J explained that a plea of partial justification to a severable part of the defamatory matter was:

“….possible for two reasons, first, so far as concerns civil liability in England, ‘the speaking of the truth is not a ground of legal liability at all’ (T A Street, Foundations of Legal Liability, (1906), vol. 1, p. 275) so that ‘the very conception of defamation involves the idea of falsity’ (Ibid., p. 300); secondly, because of such general conception, the evidence of truth in relation to a defamatory imputation, if established after an apt pleading, may be regarded as entirely obliterating that imputation, and as leaving the ground open for dealing with the residue of the untrue imputation. In other words, the defence of truth can operate ‘distributively,’ and so may protect pro tanto.” [Emphasis added.]

21.    At 431.

14. Evatt J’s view that an imputation found to be entirely true was obliterated cannot be taken at face value. Such a dramatic consequence was, as I have explained, only appropriate where a justification defence succeeded completely. More accurately, where a defendant establishes only one, or some, of several of a plaintiff’s imputations to be substantially true, to that extent, the plaintiff’s reputation has been “brought down” to its “proper level”.

14. Where partial justification was established, the imputation found to be substantially true could be relied upon by the defendant in mitigation of damages. [22] At common law, consistently with the effect of partial justification being to bring the plaintiff’s reputation “down” to its “proper level”, it was the duty of the judge to direct the jury not to give damages in respect of such part or parts as had been justified. [23] Thus the substantially true imputation has work to do in the damages sphere. The presumption that some damage would inevitably be caused to the plaintiff’s reputation by the publication of defamatory matter has been rebutted to the extent to which the tribunal of fact considers the substantially true plaintiff’s imputation has lowered it.

    22.    Kermode (at [86(c)]).

    23. Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623 (at 627) per Jacobs and Manning JJA, referred to with approval in John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 (at [49]) per Handley JA (Spigelman CJ and McColl JA agreeing).

The 2005 Act

16. The expression “defamatory imputation” is used throughout the 2005 Act to identify a plaintiff’s particular complaints about the publication of defamatory matter, even though, pursuant to s 8, a person has a single cause of action for defamation in relation to that publication. [24] The legal concept s 8 invokes is based on the common law concept of an actionable wrong for the publication of defamatory matter about a person. That provides the context in which ss 25 and 26 operate. [25]

    24. Crosby v Kelly [2016] FCA 1343 (Crosby) per Rares J (at [15]), albeit referring to s 120 of the Civil Law (Wrongs) Act 2002 (ACT) which is on all fours with s 8.

    25. Ibid (at [16]) – ss 135 and 136 to which his Honour referred are on all fours with ss 25 and 26.

17. As I said in Kermode,[26] s 26 “is framed by s 8 in terms of the common law cause of action [and a] defence of contextual truth must defeat the whole defamatory matter (cause of action) of which the plaintiff complains, that is to say all of the plaintiff’s stings”.

    26. At [78].

18. As is the case at common law, pursuant to s 25, proof by a defendant that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true is a complete defence. This is not least because as is manifest and, as Ashley JA said in Elliott, [27] the defence of truth under s 25 enshrines the common law concept of justification throughout Australia. [28] Implicit in the adoption of the common law concept of justification, in my view, is that the two common law presumptions to which I earlier referred apply once a plaintiff establishes that a matter complained of has conveyed imputations which are defamatory of and concerning that plaintiff. [29] There is, in my view, nothing in the 2005 Act which provides otherwise (whether expressly or by necessary implication). [30]

    27. At [22].

    28. This accords with the Second Reading Speech to the Defamation Bill 2005 (NSW) to which reference may be made pursuant to s 34 of the Interpretation Act 1987 (NSW): see New South Wales Legislative Assembly, Parliamentary Debates, (Hansard), 13 September 2005 at 17639, 17641).

    29. That was not the case in New South Wales under the Defamation Act 1974 (NSW) (1974 Act) or previous New South Wales defamation legislation. As McHugh JA explain in Singleton (at 443), as in New South Wales since 1847 truth alone had not been a defence. Qualifications such as, for example, the requirement in s 15 of the 1974 Act that to succeed on a defence of truth, the defendant also had to establish that the matter was published under qualified privilege or related to a matter of public interest may have prevented a defendant pleading truth. Accordingly, for that reason, no presumption of falsity could arise in New South Wales from the failure to plead justification.

    30. Section 6(2), 2005 Act.

19. Indeed, the contrary is the case. Textual support for this conclusion can be found in s 26. The text of s 26, in my view, reflects the common law presumption that some damage is caused to the plaintiff’s reputation by the publication of the defamatory matter as reflected in both the defamatory imputations of which the plaintiff complains and, too, the contextual imputations. It is that presumption which is the basis for the s 26(b) weighing exercise. If the harm caused by the substantial truth of the contextual imputations outweighs the harm caused by the defamatory imputations, the contextual truth defence succeeds.

20. When the effect of a finding for the purposes of s 25 that a defamatory imputation is substantially true is that the plaintiff’s reputation is lowered to that extent, the significance of this conclusion for the purposes of s 26(b) is apparent. While the substantially true imputation is still an imputation of which the plaintiff complains, the finding that it is substantially true has the effect of lowering the plaintiff’s reputation. This is reflected in the fact that it can be relied upon in mitigation of damages.

21. However, in my view, once a plaintiff’s imputation has been found to be substantially true, that finding cannot be ignored. It must be given effect, not only for the purposes of mitigation of damages, but, too, in considering any contextual truth defence. In my view, a plaintiff is not entitled to have the tribunal of fact consider the s 26(b) exercise, without considering when determining whether the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations, that any plaintiff’s defamatory imputation found to be true has already harmed the plaintiff’s reputation.

22. The logic of the construction of, in particular, ss 25 and 26 of the 2005 Act, as well as the context, general purpose, policy and consistency and fairness of those provisions, [31] is such that there is a relationship between the two provisions. Both defences concern the defences involving issue of truth. Section 25 concerns what can be called the defence of truth in its pure common law sense. Section 26, on the other hand, is a statutory construct, whose origins and purpose were explained in Kermode. Nevertheless, they are linked by fact that for the purposes of determining the defences of truth under each provision the plaintiff’s defamatory imputations are the same. It would offend the principles of statutory construction to which I have referred if a s 25 finding that a plaintiff’s defamatory imputation was substantially true were not given the effect the common law gave to such a conclusion. As Meagher JA has said, “[s]o far as possible, the corresponding language in s 26, a successive and ‘complementary’ provision, should be given the same meaning”. [32]

    31. Commissioner for Railways (NSW) v Aglianos (1955) 92 CLR 390 (at 397) per Dixon CJ; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1988] HCA 28 (at [69]) per McHugh, Gummow, Kirby and Hayne JJ; Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 250 CLR 523; [2013] HCA 16 (at [47]) per curiam.

    32. See Meagher JA at [41] below.

23. There was also an interrelationship between ss 15 and 16 of the 1974 Act, albeit that it operated differently to the manner in which, in my view, ss 25 and 26 interrelate. Once an imputation was found to be substantially true for the purposes of s 15 of the 1974 Act, the plaintiff’s cause of action in respect of that imputation had failed. [33] Nevertheless because pursuant to s 16 a defendant could plead back a plaintiff’s imputation, a finding for the purposes of s 15 that the imputation was substantially true flowed through to the tribunal of fact’s consideration of the s 16 defence, [34] albeit that it operated on what might conveniently be called the defendant’s side of the ledger. That of course is the operation for which the appellant has unsuccessfully contended in respect of a substantially true plaintiff’s imputation in the s 26 context.

    33.    Bearing in mind that pursuant to s 9 of the 1974 Act, the imputation was the cause of action.

    34. I disagree, with respect, with Dalton J conclusion to the contrary in Mizikovsky v Queensland Television Ltd (No 3) [2011] QSC 375 (at [42]).

24. Once the interrelationship between the defences of truth and contextual truth under the 2005 Act is understood, it can be seen that there is a flow on effect from a finding for the purposes of s 25 that one, or some, but not all of a plaintiff’s imputations are substantially true to the tribunal of facts consideration of the s 26(b) exercise.

25. In Mizikovsky, Fraser JA held that a plaintiff’s imputation found to be substantially true for the purposes of s 25 was to be included in the questions submitted to the jury for consideration in the s 26(b) context, regardless of the substantial truth finding. [35] It was implicit in his Honour’s decision that the jury was to pay no consideration for the purposes of s 26 to the substantial truth finding.

    35.    Holmes JA and Fryberg J agreeing.

26. In rejecting the submission of the appellant (the unsuccessful plaintiff) that the trial judge should not have permitted the jury to consider for the purposes of the s 26(b) exercise the imputation he had pleaded which the jury had found to be substantially true, Fraser JA held that “no other construction is fairly open on the statutory text”. His Honour rejected the appellant’s submission that the words “defamatory imputations” in s 26(a) might be read as meaning “‘imputations giving rise to an action in defamation’ (ie a successful action)”, saying the words of s 26(a) left no real scope for that meaning. His Honour added:

“…[T]he words ‘defamatory imputations’ convey nothing about the truth or falsity of those imputations, as appears also from the use of the same words in s 25.” [36]

36.    (At [17]).

27. As is apparent, I disagree with respect, with that proposition. It does not take into consideration the fact that s 25 reproduces the common law defence of justification bringing with that the presumptions to which I have referred, including that of falsity, with consequential implications in the event of a s 25 substantial truth finding for the purposes of the s 26 defence.

28. It is also not apparent that the proposition I have formulated was advanced in Mizikovsky. I agree with Fraser JA that the proposition the appellant in Mizikovsky was clearly advancing, that a substantially true plaintiff’s imputation “disappeared” for contextual truth purposes, was incorrect.

29. However, for the reasons I have explained, to the extent that Mizikovsky assumes that the jury is directed to ignore the effect of a substantially true plaintiff’s imputation in considering the s 26(b) exercise, in my view, I would respectfully disagree with that approach.

30. The question of how a substantially true plaintiff’s imputation could be taken into account for s 26(b) purposes, otherwise than by being pleaded back by a defendant, did not arise in Kermode which concerned a pleading point.

31. As I said in Abou-Lokmeh v Harbour Radio Pty Ltd: [37]

“[29]   A defence of contextual truth must defeat the whole defamatory matter of which the plaintiff complains, that is to say, all the plaintiff’s stings or imputations. The tribunal of fact must be able to conclude that, because of the substantial truth of the contextual imputations, the defamatory imputations which constitute the plaintiff’s cause of action do not further harm the plaintiff’s reputation. The focus is on comparing the contextual imputations with the plaintiff’s cause of action. As McCallum J explained in McMahon, ‘the defence does not compare imputation with imputation. [Its] essence … is to permit the defendants to put the plaintiff’s imputations in their factual context according to the content of the whole of the article.’”

37. [2016] NSWCA 228 (footnotes omitted).

32. When putting “the plaintiff’s imputations in their factual context according to the content of the whole of the article”, it is clearly relevant for the tribunal of fact to consider that by reason of the substantial truth of one or more of those imputations, any presumption that the plaintiff’s reputation has suffered damage by reason of the publication of that imputation has been rebutted and the plaintiff’s reputation has, accordingly, already been lowered to that extent. It remains open to the plaintiff to complain of that imputation and to submit that the effect of the finding of substantial truth does not weigh the s 26(b) scales in the defendant’s favour.

33. The s 26 defence still operates to defeat the plaintiff’s cause of action, according to the tribunal of fact’s determination on the s 26(b) weighing exercise, but with the “true” nature of the plaintiff’s reputation able to be considered in that context.

34. On the construction I have advanced, it is unnecessary for a defendant to plead or particularise the effect of a substantially true plaintiff’s imputation for the purposes of s 26. That will follow as a matter of law.

35. MEAGHER JA: I have had the benefit of reading in draft the judgment of Gleeson JA. I agree that leave should be granted and the appeal dismissed with costs: for the reasons given by his Honour in relation to the striking out of particulars relied on in mitigation of damage; and for the following reasons in relation to the remaining and principal question.

36. That question is whether a plea of contextual truth under Defamation Act 2005 (NSW), s 26 may adopt, as contextual imputations, those of the imputations pleaded by a plaintiff that are subsequently found to be carried, defamatory and “substantially true”. The answer to that question turns on the interpretation of the following provisions appearing in that Act (and other uniform defamation laws):

8   Single cause of action for multiple defamatory imputations in same matter

A person has a single cause of action for defamation in relation to the publication of defamatory matter about the person even if more than one defamatory imputation about the person is carried by the matter.

…

25   Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true.

26   Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a)   the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and

(b)   the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.

37. Under the uniform defamation laws, as at common law, the cause of action for defamation consists in the publication of defamatory matter of and concerning a person: 2005 Act, s 8. By contrast, under the Defamation Act 1974 (NSW), each defamatory imputation published by a matter constituted a separate cause of action. For that reason, a defendant was able to escape liability by a combination of defences, each directed to some only of those imputations, even though no single defence was satisfied in relation to all the imputations.

38. The applicants in this appeal (Fairfax) did not submit that the same course was necessarily available under the uniform defamation laws. Specifically, it did not submit that a plea of justification under s 25 or contextual truth under s 26 could be directed, and operate pro tanto as a defence, to that part of the cause of action for publication of defamatory matter that related to particular defamatory imputations. It accepted in oral argument that pleas of justification under s 25 or the common law (as opposed to pleas in mitigation of damages often misleadingly called “partial justification”) fail unless all defamatory imputations carried by the defamatory matter and pleaded by the plaintiff were proved to be substantially true. That concession accords with a proposition assumed or decided in intermediate appellate courts, namely, that each of the defences under ss 25 and 26 operates on an all-or-nothing basis: see Fairfax Media Publications Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174 esp at [46], [47], [77], [78] (McColl JA, Beazley and Giles JJA agreeing); Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 at [14], [15] (Fraser JA, Holmes JA and Fryberg J agreeing); but see Rose v Allen & Unwin Pty Ltd [2015] NSWSC 991 at [8] (McCallum J). Accordingly, what follows assumes that proposition to be established and not challenged.

39. Fairfax’s argument instead directs attention to the language used to identify the two groups of imputations by reference to which ss 25 and 26 operate. The first group is fully identified in s 25 as “the defamatory imputations carried by the matter of which the plaintiff complains”, reduced by successive ellipses in paras (a) and (b) of s 26 to “the defamatory imputations”. The second group consists of “one or more other imputations”, labelled the “contextual imputations”. These two groups are expressed to be mutually exclusive, such that no imputation may be a member of both groups simultaneously: Kermode at [79]–[80].

40. Fairfax’s plea of contextual truth adopts as “contextual imputations” whichever of the imputations in the respondent’s second further amended statement of claim as “are found to be conveyed and defamatory” and “substantially true”. Relying on Chel v Fairfax Media Publications Pty Ltd (No 6) [2017] NSWSC 230 at [19], [42], [43] (Beech-Jones J), Fairfax submitted to the primary judge (McCallum J), and on appeal, that a defamatory imputation found to be substantially true ceases to be an imputation “of which the plaintiff complains”; that it thereby ceases to be one of the “defamatory imputations” within s 26(b); and that, for that reason, and consistently with the conclusion in Kermode, it becomes capable of being adopted by a defendant as a “contextual imputation” and treated as such by a jury undertaking the weighing exercise in s 26(b). In purported application of Kermode, the primary judge rejected that argument: Kazal v Fairfax Media Publications Pty Ltd [2017] NSWSC 44 at [35] (McCallum J). The following considerations support the correctness of her Honour’s conclusion in response to that argument.

41. First, for the purpose of s 25, imputations found to be substantially true undoubtedly remain “defamatory imputations carried by the matter”. That much is necessary for the continued operation of that provision. So far as possible, the corresponding language in s 26, a successive and “complementary” provision, should be given the same meaning: see Registrar of Titles (WA) v Franzon (1975) 132 CLR 611, 618 (Mason J, Barwick CJ and Jacobs J agreeing).

42. Secondly, the references to defamatory imputations of which “the plaintiff complains” direct attention to the plaintiff’s pleaded claim for relief, rather than to that claim as affected by subsequent factual findings. In the Explanatory Note to the Defamation Bill 2005, the outline of cl 26 describes the defamatory imputations of which a plaintiff “complains” as those “the plaintiff has chosen to proceed with”, plainly a reference to the final form of pleading as pressed: see the extract in Kermode at [35]. If the position were otherwise, the availability of the defence urged by Fairfax would depend on there being a finding of substantial truth made before the final formulation and determination of a plea of contextual truth: Judgment [34].

43. Thirdly, a bare finding as to the substantial truth of some only of a plaintiff’s defamatory imputations does not necessarily deny his or her entitlement to continue complaining of those imputations, or forensic interest in doing so. That much follows directly from the proposition that a defence of justification cannot operate pro tanto to extinguish liability in tort. In any event, the evidence available for use in quantifying damages may depend on the continuance of such a complaint: see Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 at 119–120 (Neill LJ); John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 at [47]–[52] (Handley JA, Spigelman CJ and McColl JA agreeing). It is conceivable that evidence properly admitted with respect to such an imputation may assist a plaintiff’s case as to the injury to reputation caused by another defamatory imputation. What is more, a plaintiff may appeal against the finding as to substantial truth and thereby maintain his or her complaint in law.

37. Fourthly, although the argument made by Fairfax was not in terms addressed by Kermode or Mizikovsky, its rejection for the reasons above is wholly consistent with the analysis in each: see especially Kermode at [78]–[81]; Mizikovsky at [14]–[18]. In my view, those authorities are also entirely consistent with one another. Read with [47], [50] and [78]–[80], McColl JA’s observations in Kermode at [86(c)] and [86(d)] do nothing more than identify pleas in mitigation of damages based on substantial truth and the defence under s 26 as available “courses of action” for a defendant. The assertion of any such inconsistency could not justify a refusal to follow and apply Mizikovsky: cf Chel at [37].

38. Finally, Fairfax’s argument was not addressed by this Court in Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369, in which there was no issue as to the construction or application of s 25 or s 26. The primary issue concerned the admissibility and use of expert evidence relevant to the substantial truth of defamatory imputations pleaded by the plaintiff. In considering the defendant’s plea of contextual truth, the trial judge (Adamson J), sitting without a jury, had proceeded on the assumption (contrary to her findings in fact) that four defamatory imputations were carried, only one of which was not substantially true, and two further, contextual imputations were carried and substantially true. And her Honour found that this defence would have been made out irrespective of whether the three true plaintiff’s imputations were included as “defamatory imputations” within s 26(b). As recorded in the judgment on appeal in Born Brands at [88]–[90], the issue between the parties related to the expert evidence, and neither party sought to “expose any inconsistency in the authorities”. Accordingly, Basten JA’s tentative observations at [80]–[87] concerning the 2005 Act, ss 25 and 26, Kermode and Mizikovsky are merely that, and not a binding part of that decision.

39. Whilst agreeing that the primary judge did not err in rejecting the construction of ss 25 and 26 urged by Fairfax, McColl JA at [22]–[34] above advances a construction of s 26(b) which would require the trier of fact to take account of any earlier finding as to the substantial truth of a plaintiff’s imputation in undertaking the comparative exercise called for by that subsection. Whether s 26(b) operates in that way was not in issue or the subject of argument in this appeal. For that reason, this is not an occasion for considering whether any proposition to the contrary in Mizikovsky should not be followed. Furthermore, the following textual consideration would at least cause me to hesitate before so holding.

40. The reference in s 26(b) to the defamatory imputations "further” harming the plaintiff’s reputation seems to presuppose that the substantial truth of the contextual imputations may (through publication) cause some “harm” to the plaintiff’s reputation. If that is so, the sense in which “harm” is used in the provision would not be limited to actionable injuries at common law; instead, it would comprehend any lowering of a plaintiff’s reputation in the community, whether deserved or not: cf Rofe v Smiths Newspaper Ltd (1924) 25 SR (NSW) 4 at 21–22 (Street ACJ). It would seem to follow that the substantial truth or falsehood of any of “the defamatory imputations” would be irrelevant in determining whether those imputations “further harm” the plaintiff’s reputation in the necessary sense.

41. GLEESON JA: The applicants, Fairfax Digital Australia & New Zealand Pty Limited and two journalists, Mr Linton Besser and Ms Kate McClymont (together Fairfax), seek leave to appeal from the decision of McCallum J in Oscar Kazal v Fairfax Media Publications Pty Ltd [38] striking out both the defence of contextual truth and the particulars Fairfax pleaded in mitigation of damages.

    38. [2017] NSWSC 44.

42. Fairfax complains about her Honour’s conclusion that it is not open to a defendant relying upon the defence of contextual truth as provided by s 26 of the Defamation Act 2005 (NSW) (the 2005 Act), to contingently “plead back” the plaintiff’s imputations (insofar as they are found to be substantially true) as part of that defence. Fairfax also complains about her Honour’s conclusion that certain reputation particulars do not properly stand as particulars of mitigation of damages and should be struck out.

43. As these orders are interlocutory, Fairfax requires leave to appeal. [39] Mr Kazal opposed the grant of leave.

    39. Supreme Court Act 1970 (NSW), s 101(2)(e).

44. Appellate courts exercise particular caution in reviewing interlocutory rulings in matters of practice and procedure. [40] However, it may be accepted, as Fairfax submitted, that the striking out of the contextual truth defence raises a question of principle as to the proper construction of s 26 of the 2005 Act and whether this Court’s decision in Fairfax Media Publications Pty Ltd v Kermode [41] governs the manner in which that defence may be relied upon in the course of the trial. Leave should be given in respect of this question.

    40. Dank v Cronulla Sutherland District Rugby League Football Club Ltd [2014] NSWCA 288 at [73] (Ward JA, Emmett and Gleeson JJA agreeing).

    41. (2011) 81 NSWLR 157; [2011] NSWCA 174 (Kermode).

45. As to the striking out of the mitigation particulars, Mr Kazal drew attention to the terms of the defence which Fairfax subsequently filed on 15 March 2017. This defence included as particulars of the honest opinion defence all of the particulars of mitigation of damages which were struck out by the primary judge, and then pleaded (by incorporation) as particulars of mitigation of damages the new particulars of honest opinion. (It is not apparent whether Fairfax obtained the prior leave of the Court to introduce these new matters.)

46. Mr Kazal submitted that it is premature for this Court to deal with a question about striking out the particulars of mitigation when those very particulars are now the subject of a fresh strike out application by Mr Kazal before the primary judge. [42] Fairfax responded that if the Court were to grant leave and uphold the appeal in relation to the striking out of particulars of mitigation of damages, then the defence, as it previously stood, would be reinstated. [43]

    42. Tcpt, 11 September 2017, p 37 (10)-p 38 (9).

    43. Tcpt, 11 September 2017, p 47 (13-22).

47. Given that the matter has been fully argued and a determination may assist the resolution of the fresh pleading disputes below, leave to appeal should also be given in respect of this question.

Background

55. The proceedings arise out of the publication of two articles in the on-line edition of the Sydney Morning Herald, one headed “Bad company” on 19 March 2013 (the author of which is the third defendant, Mr Besser) and the other headed “Where angels fear to tread” on 4 May 2013 (the author of which is the fourth defendant, Ms McClymont). Both articles identify the plaintiff, Mr Oscar Kazal, as the person who is the subject of the articles.

56. The issues between the parties are contained in the second further amended statement of claim filed 10 May 2016, the defence filed 8 June 2016 and the reply filed 25 July 2016.

57. In respect of the first article, Mr Kazal pleaded in par 13 of his claim that the publication carried the following imputation:

The plaintiff sought to corruptly (in the sense of obtaining an unmerited benefit) influence politicians to advance his personal interests and those of his family by organising lavish trips to the UAE and restaurant dinners for those politicians. (the first matter complained of)

58. In response to the first matter complained of, Fairfax pleaded denials; defences of qualified privilege under s 30 of the 2005 Act; honest opinion under s 31 of the 2005 Act; and pleas in bar. Fairfax does not rely upon any defence of justification under s 25 of the 2005 Act, or contextual truth under s 26 of the 2005 Act in relation to the first matter complained of.

59. In respect of the second article, Mr Kazal pleaded in par 16 of his claim that the publication carried the following seven imputations:

(a) The plaintiff had attempted to intimidate a Herald journalist.

(b) The plaintiff had obtained favourable deals from government authorities by providing politicians with financial benefits ie trips to the UAE and hosting them at restaurants owned by the plaintiff’s family.

(c) The plaintiff, a member of a powerful and politically connected set of siblings, corruptly extracted favourable deals from government authorities for his family’s nightclub and restaurants at the Rocks near Sydney’s Circular Quay.

(d) The plaintiff arranged for a private investigator to follow Rodric David’s wife and children in order to attempt to intimidate Rodric David, a former business partner of the plaintiff’s family.

(e) The plaintiff commenced defamation proceedings which he knew to be baseless against Linton Besser, the Herald and Ray Hadley of 2GB who interviewed Linton Besser, to silence their reporting on the activities of the plaintiff and his family.

(f) The plaintiff is a contemptible person [fuckwit] whose attempts to intimidate Linton Besser warranted an attempted violence order against him.

(g) The plaintiff threatened to harm Linton Besser’s children to try to stop Linton Besser writing about the plaintiff and his family. (the second matter complained of)

60. In response to the second matter complained of, Fairfax pleaded denials; defences of justification under s 25 of the 2005 Act and at common law (but only in relation to the imputations pleaded in par 16(a), (d), (e) and (g) of the claim); qualified privilege under s 30 of the 2005 Act; honest opinion under s 31 of the 2005 Act; and pleas in bar. In addition, Fairfax pleaded (in par 15(b)) a defence of contextual truth under s 26 of the 2005 Act as follows (emphasis in original):

Contextual Truth – s 26 of the Defamation Act – The Federal Capital Press of Australia Pty Ltd v Balzola [2015] NSWCA 285 plea:

In respect of the Second Matter Complained Of, any imputations pleaded by the plaintiff in paragraph 16 of the 2FASOC that are found to be conveyed and defamatory but not substantially true did not further harm the reputation of the plaintiff because of the substantial truth of so many of them as are found to be substantially true.

61. In the alternative, Fairfax pleaded (in pars 19 and 20) a number of matters to support its contention that if Mr Kazal had suffered any damage as a result of the publication of either the first or second matter complained of, any damages he was awarded should be mitigated by the matters there particularised. The matters particularised in par 20 of the defence (set out over 25 pages) were said to be directly relevant to the contextual background against which the allegedly defamatory statements were made.

62. In his reply, Mr Kazal pleaded malice by Fairfax and gave as particulars the excessive number of articles that Fairfax wrote about him amounting, it was asserted, to a malicious campaign from September 2010 to date. The particulars of that plea identified 30 articles, which included the two articles the subject of these proceedings.

63. Mr Kazal applied to strike out Fairfax’s contextual truth defence in par 15(b) of the defence. He also applied to strike out whole of the mitigation particulars on the basis of relevance as they concerned Mr Kazal’s family, not Mr Kazal himself.

Relevant legislative provisions

64. The objects of the 2005 Act are stated in s 3 to be:

(a) to enact provisions to promote uniform laws of defamation in Australia, and

(b) to ensure that the law of defamation does not place unreasonable limits on freedom of expression and, in particular, on the publication and discussion of matters of public interest and importance, and

(c) to provide effective and fair remedies for persons whose reputations are harmed by the publication of defamatory matter, and

(d) to promote speedy and non-litigious methods of resolving disputes about the publication of defamatory matter.

65. Section 6 of the 2005 Act provides that the Act does not affect the operation of the general law in relation to the tort of defamation except to the extent that the Act provides otherwise (whether expressly or by necessary implication): s 6(2). Section 6(3) provides that the general law from time to time applies for the purposes of the 2005 Act as if the earlier legislation in the Defamation Act 1958 (NSW) and the Defamation Act 1974 (NSW) had never been enacted.

66. Sections 8, 25 and 26 of the 2005 Act provide:

8 Single cause of action for multiple defamatory imputations in same matter

A person has a single cause of action for defamation in relation to the publication of defamatory matter about the person even if more than one defamatory imputation about the person is carried by the matter.

25 Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true.

26 Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and

(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.

67. The term “substantially true” is defined in s 4 to mean “true in substance or not materially different from the truth”.

68. Section 22 deals with the respective roles of the tribunal of fact (where there is a jury) and the judge, and relevantly provides:

22 Roles of judicial officers and juries in defamation proceedings

(1) This section applies to defamation proceedings that are tried by jury.

(2) The jury is to determine whether the defendant has published defamatory matter about the plaintiff and, if so, whether any defence raised by the defendant has been established.

(3) If the jury finds that the defendant has published defamatory matter about the plaintiff and that no defence has been established, the judicial officer and not the jury is to determine the amount of damages (if any) that should be awarded to the plaintiff and all unresolved issues of fact and law relating to the determination of that amount.

…..

69. Section 34 of the 2005 Act provides that in determining the amount of damages to be awarded in any defamation proceedings, the Court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded.

70. By s 38(1) of the 2005 Act, evidence is admissible on behalf of the defendant in mitigation of damages, for the publication of defamatory matter in relation to the following matters:

(a) the defendant has made an apology to the plaintiff about the publication of the defamatory matter, or

(b) the defendant has published a correction of the defamatory matter, or

(c) the plaintiff has already recovered damages for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter, or

(d) the plaintiff has brought proceedings for damages for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter, or

(e) the plaintiff has received or agreed to receive compensation for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter.

71. Section 38(2) provides that nothing in s 38(1) operates “to limit the matters that can be taken into account by a court in mitigation of damages”.

Pleading rules

72. The Uniform Civil Procedural Rules 2005 (NSW) (UCPR) deal with pleading of defamation defences generally. UCPR, r 14.31 provides:

Defamation defences generally

14.31

(1) Subject to rules 14.32–14.40, a defendant in proceedings for defamation must plead any defamation defence specifically.

(2) If the plaintiff in defamation proceedings complains of two or more imputations, the pleading of any of the following defences must specify to what imputation or imputations the defence is pleaded:

…. 

(b) a defence under section 25 or 26 of the Defamation Act 2005,

….

73. This rule requires all defences to be specifically pleaded, except to the extent that the rules otherwise permit an abbreviated form of pleading that refers to a recognised ground of defence.

74. UCPR, r 14.33 deals with the defence of contextual truth and provides:

Defence of contextual truth

14.33

…..

(2) Defence under Defamation Act 2005 Subject to rule 14.31(2), a defence under section 26 of the Defamation Act 2005 is sufficiently pleaded if it:

(a) specifies one or more imputations on which the defendant relies as being contextual to the imputation in question, and

(b) alleges each contextual imputation on which the defendant relies was substantially true, and

(c) alleges that the imputation in question did not further harm the reputation of the plaintiff because of the contextual imputations on which the defendant relies.

75. Neither party sought to make any point that the terms of the pleading rules in UCPR, rr 14.31(2)(b) and 14.33(2)(c) were inconsistent with the terms of s 26 of the 2005 Act, in that the rules seems to assume that the defence of contextual truth is pleaded to each defamatory imputation, rather than the defamatory matter.

A. Striking out defence of contextual truth

The primary judge’s reasons

76. The primary judge concluded that par 15(b) of the defence should be struck out because it failed to plead a defence within s 26 of the 2005 Act. Her Honour held that the plea of contextual truth was inconsistent with this Court’s decision in Kermode that it is impermissible for a defendant to “plead back”, as a contextual imputation, defamatory imputations of which the plaintiff complains. Her Honour viewed Kermode as not confined to a pleading point but as governing the course of the trial. According to this view, an imputation sued upon by a plaintiff but proved true by the defendant may only be relied upon in mitigation of damages, and may not be relied upon for the purpose of the defence of contextual truth under s 26 of the 2005 Act.

77. Her Honour rejected Fairfax’s submission that two later decisions of this Court [44] – Born Brands and Balzola - permit a defendant to contingently rely at trial upon the plaintiff’s imputations (insofar as they are found to be substantially true) as part of the defence of contextual truth, and not only by way of mitigation of damages.

    44. Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 (Born Brands) and The Federal Capital Press of Australia Pty Ltd v Balzola [2015] NSWCA 285 (Balzola).

78. Her Honour noted at [25] that Born Brands, and the decision of the Queensland Court of Appeal in Mizikovsky v Queensland Television Ltd [45] (discussed by Basten JA in Born Brands), were not directed to the precise issue raised in the present case because in those cases the defendant had a permissible plea of contextual truth, that is, one which specified contextual imputations additional to those relied upon by the plaintiff, rather than only relying, contingently, upon the plaintiff’s imputations. After referring to the remarks of Basten JA in Born Brands at [86], her Honour continued at [28]:

[28] Those remarks appear to treat the “inter-relationship” between the two courses identified by McColl JA in Kermode at [86](c) and (d) as an inter-relationship between defences determined at the same time by the same tribunal of fact. However, I understand her Honour to have been referring, on the one hand, to the defence of contextual truth (to be determined by the jury) and, on the other hand, to a defendant’s reliance (in the case of a mixed result) on the true imputations to mitigate damages (which are assessed by the judge). If that is correct, upon reflection (and with great respect to Basten JA), it is difficult to understand how those separate tasks are to be undertaken “holistically”.

45. [2014] 1 Qd R 197; [2013] QCA 68 (Mizikovsky).

79. Her Honour observed at [29] that Balzola involved the refusal of an application for leave to appeal, and did not address the complexity of how the separate tasks of determining the contextual truth defence (to be determined by the jury) and a defendant’s reliance on true imputations to mitigate damages (which are to be assessed by the judge) are to be undertaken “holistically”, as suggested by Basten JA in Born Brands.

80. In concluding that Fairfax’s argument overlooked the significance of the statutory division of roles between the judge and the jury, her Honour said at [34]-[35]:

[34] The complexities of permitting a defendant to conduct a defence that is only contingently viable were not explored in argument. At the very least, the course contended for by the defendants would raise difficult questions as to how the case should be opened to the jury and would complicate the formulation and presentation of the questions for the jury. In particular, it would require the judge to put questions to the jury in two stages. While a two-stage process is sometimes adopted in order to simplify the jury’s task, it seems unlikely that Parliament intended to mandate a two-stage process.

[35] The better view, in my respectful opinion, is that the decision in Kermode is not confined to a pleading point but governs the course of the trial. An imputation relied upon by a plaintiff but proved true may be relied upon in mitigation of damages but does not, in my view, become a “contextual imputation” for the purpose of a defence under s 26.

Grounds of appeal – contextual truth defence

81. The five grounds of appeal directed to the contextual truth defence are connected. Grounds 1, 3, 4 and 5 each raise the proper construction of s 26. Ground 2 raises a narrow point - whether Kermode is limited to a pleading point.

82. Ground 1 contends that her Honour erred in holding that Kermode precluded a contingent pleading of the kind proposed by Fairfax. Grounds 3, 4 and 5 reflect Fairfax’s argument on construction of s 26. Ground 3 contends that her Honour erred in failing to find that an imputation pleaded by a plaintiff, which is found to be true, ceases to be one of the defamatory imputations "of which the plaintiff complains" for the purpose of s 26(a) of the 2005 Act.

83. Ground 4 contends that her Honour erred in failing to find that an imputation pleaded by a plaintiff which is found to be true, may be relied upon by a defendant as an "other", contextual, imputation for the purpose of s 26(b) of the 2005 Act.

84. Ground 5 is related and contends that her Honour erred in holding that Kermode governs the course of the trial, such that a true plaintiff’s imputation may only be relied upon in mitigation of damages and may not be relied upon for the purpose of the defence of contextual truth under s 26.

The parties’ submissions

Fairfax

85. Fairfax did not submit that Kermode was wrongly decided. [46] To have done so they would have needed leave to reopen the correctness of that decision, which they did not seek to do. Instead, Fairfax sought to distinguish Kermode by arguing that it is limited to a pleading point. On this reading, the submission continued, Kermode does not govern the course of the trial with respect to a defence of contextual truth under s 26.

    46. Appellants’ written submissions in Reply, 28 August 2017, par 1.

86. Fairfax acknowledged in argument that the difference between impermissible pleading back and a contingent pleading may be a ‘‘semantic”. Nevertheless, Fairfax characterised the defence in par 15(b) as “a contingent notification of the stance that will be taken at trial. [47]

    47. Tcpt, 11/09/2017, p 13 (15-25, 46-48).

87. Fairfax submitted that Kermode did not decide the fate at trial of a “true plaintiff’s imputation” [48] for the purposes of s 26(b). Fairfax accepted that this issue had been decided in Mizikovsky, but submitted that the construction of s 26(b) in Mizikovsky is “plainly wrong” and should not be followed.

    48. Tcpt, 11 September 2017, p19 (4-7).

88. The construction of s 26 for which Fairfax contends, adopted the reasoning of Beech-Jones J in Chel v Fairfax Media Publications (No 6). [49] Fairfax submitted that s 26(a) is to be read as containing a temporal condition that a defamatory imputation ceases to be one “of which the plaintiff complains” if the tribunal of fact finds the imputation substantially true (for the purposes of the justification defence under s 25). According to the submission, a true plaintiff’s imputation is capable of being an “other imputation” for the purposes of s 26(a). On this approach, an imputation of which the plaintiff complains that is found by the tribunal of fact to be conveyed, defamatory and substantially true, is “lost” to the plaintiff for the purposes of s 26, and contrary to the reasoning in Mizikovsky, remains lost when addressing the further harm issue in s 26(b).

    49. [2017] NSWSC 230 (Chel) at [40]-[42].

89. Fairfax argued that there is no basis in principle why, for the purposes of the s 26 defence, a plaintiff ought to be able to rely upon a true plaintiff’s imputation on the question of whether the defamatory imputations do not further harm the reputation of the plaintiff because of the contextual imputations which are proven to be substantially true. Fairfax accepted that this may sometimes involve or require a two-stage process by the jury in carrying out of its task as the tribunal of fact. However that is no reason, Fairfax submitted, to reach a different conclusion as to the operation of s 26.

90. Fairfax submitted that the primary judge’s decision concerning what would be permitted at trial has the effect that the underlying rationale of the contextual truth defence will be significantly weakened. According to the submission, where some, but not all, of the plaintiff’s imputations have been proved substantially true, the defendant should not be limited to a plea in mitigation of damages. That result was described by Fairfax as both “unfair” and “grotesque”. [50]

    50. Tcpt, 11 September 2017, p28 (37).

91. In oral argument, Fairfax submitted that “an imputation can change from being one of which the plaintiff complains to being one of which the plaintiff can no longer complain.” [51] While candidly accepting that this argument involved the “transmogrification” at trial of a plaintiff’s imputation to a contextual imputation for the purposes of s 26(a), [52] Fairfax submitted that it should be permissible to formulate some way in which this construction of s 26 can be pleaded. The contingent pleading relied upon in this case was advanced by Fairfax as providing that means. [53]

    51. Tcpt, 11 September 2017, p4 (30-33).

    52. Tcpt, 11 September 2017, p6 (4-7).

    53. Tcpt, 11 September 2017, p4 (27-30).

92. Fairfax also accepted that the taxonomy of its argument assumed a differential operation of s 26 if no justification defence was pleaded under s 25. [54] That followed, Fairfax acknowledged, because in the absence of the s 25 defence being pleaded the issue of substantial truth would only arise under s 26(b) with respect to the contextual imputations and not the defamatory imputations of which the plaintiff complains.

    54. Tcpt, 11 September 2017, p6 (39) - p7 (9) and p7 (36-44).

Mr Kazal

93. Mr Kazal sought to uphold the reasoning of the primary judge. He submitted that the construction of s 26(a) of the 2005 Act in Chel is wrong and, in any event, the primary judge’s reasoning does not depend on the correctness of the decision in Mizikovsky with respect to s 26(b).

94. Mr Kazal further submitted that whether a plaintiff can rely upon a true plaintiff’s imputation in the weighing exercise under s 26(b) is distinct from whether a defendant can rely on such an imputation. While Mr Kazal suggested that there is a third possibility - that a true plaintiff’s imputation does not count on either side of the so-called s 26(b) “equation” - he submitted that the primary judge did not err in the present case because there is no textual basis for counting a true plaintiff’s imputation on the defendant’s side of the s 26 “equation”. That is, a plaintiff’s imputation found to be substantially true, does not change character or “transmogrify” to a contextual imputation for the purposes of s 26.

Contextual truth defence

95. It is not in dispute that the defences in ss 25 and 26 operate in the context that the publication of defamatory matter is now the basis of a cause of action in defamation, unlike the position under s 9(2) of the Defamation Act 1974 (NSW) (1974 Act) where the basis was the publication of a defamatory imputation.

96. The defence of justification under s 25 is established by the defendant proving “that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true”. It is well-established that the defence of justification under s 25 and at common law operates on an all or nothing basis, that is, all the defamatory imputations must be proved to be true. [55] Fairfax did not argue to the contrary. [56]

    55. Kermode at [46]-[47]; Mizikovsky at [14]-[15]; cf Rose v Allen & Unwin Pty Ltd [2015] NSWSC 991 at [8] (McCallum J).

    56. Tcpt, 11/09/2017, p 3 (15-18); p 38 (33-35).

97. The defence of contextual truth under s 26, also takes as its starting point “the defamatory imputations of which the plaintiff complains”, but s 26 operates differently to s 25. First, a contextual imputation must be carried by the matter complained of “in addition” to the defamatory imputations of which the plaintiff complains (s 26(a)). A contextual imputation must differ in substance from the plaintiff’s defamatory imputations. [57]

    57. Fairfax Media Publications Pty Ltd v Zeccola (2015) 91 NSWLR 314; [2015] NSWCA 329 (Zeccola) at [42], [46]-[47] (McColl JA, Macfarlan JA and Sackville AJA agreeing).

98. Second, by its terms, the defence is established if the contextual imputations are substantially true (s 26(a)), and if the plaintiff’s defamatory imputations “do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations” (s 26(b)). The requirement to prove no further harm to the plaintiff’s reputation focuses on the facts, matters and circumstances which establish the substantial truth of the contextual imputations. [58]

    58. Nationwide News Pty Ltd v Weatherup [2017] QCA 70 (Weatherup) at [46] (Applegarth J, Fraser JA and Douglas J agreeing); John Fairfax Publications Pty Ltd v Blake (2001) 53 NSWLR 541; [2001] NSWCA 434 at [5] (Spigelman CJ, Rolfe AJA agreeing).

99. The defence of contextual truth has been described as a statutory supplement to enable a defendant to prove a complete defence based on the truth of a more substantial sting in the publication than other sting(s) that the plaintiff has chosen to complain of but which the defendant may not be able to prove to be true substantially. [59]

    59. Crosby v Kelly [2013] FCA 1343 at [18] (Rares J) a case involving s 136 of the Civil Law (Wrongs) Act 2002 (ACT), which is found in Pt 9 of that Act dealing with Defamation.

100. In Abou-Lokmeh v Harbour Radio Pty Ltd,[60] McColl JA referred with approval to the statement by McCallum J in McMahon v John Fairfax Publications Pty Ltd (No 3) [61] that “the defence [of contextual truth] does not compare imputation with imputation. [Its] essence … is to permit the defendants to put the plaintiff’s imputations in their factual context according to the content of the whole of the article”.

     60. Abou-Lokmeh v Harbour Radio Pty Ltd at [29].

     61. [2012] NSWSC 196 at [19].

101. Third, the history of the enactment of the 2005 Act and, in particular s 26, was surveyed by McColl JA in Kermode. [62] Reference was made to the Explanatory Memorandum and the Second Reading speech [63] . It is not necessary to repeat that history. It is sufficient to note that McColl JA observed that the language of s 26 of the 2005 Act is different from the defence of contextual truth in s 16 of the 1974 Act, and s 26 is set in a different statutory context. As indicated, the publication of defamatory matter is now the basis of the cause of action under the 2005 Act (s 8), unlike the position under the 1974 Act (s 9(2)) where the basis was the publication of defamatory imputations. McColl JA expressed similar remarks concerning the differences between s 16 of the 1974 Act and s 26 of the 2005 Act in Fairfax Media Publications Pty Ltd v Zeccola. [64]

     62. Kermode at [31]ff (Beazley and Giles JJA agreeing).

     63. Kermode at [35].

     64. (2015) 91 NSWLR 341; [2015] NSWCA 329 (Zeccola) at [23]-[24] (McColl JA, Macfarlan JA and Sackville AJA agreeing).

Kermode

102. Kermode involved a separate trial under UCPR, r 28.2 of certain questions raised by a strikeout application in respect of a contextual truth defence. (The terms of those questions are not reproduced in the judgment of the trial judge.) The defendant had “pleaded back” the plaintiff’s imputations and three further contextual imputations by way of a defence of contextual truth under s 26. The trial judge (Simpson J) described this form of pleading back as follows: [65]

[24] The 'pleading back' mechanism is an anticipatory measure. By 'pleading back' the defendant seeks to anticipate the outcome of a defence of truth to the imputations pleaded by the plaintiff, and to take advantage of any that are successfully justified by incorporating them in the catalogue of contextual imputations pleaded and proven true.

65. Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852 at [24] (Simpson J).

103. Simpson J concluded that the defence of contextual truth provided by s 26 of the 2005 Act did not permit a defendant to “plead back” any or all of a plaintiff’s imputations. That decision was upheld by this Court in Kermode (McColl JA, Beazley JA and Giles JA agreeing).

104. The reasons of McColl JA [66] may be summarised as follows. The defence of contextual truth in s 26 must defeat the whole defamatory matter of which the plaintiff complains, the publication of which is the plaintiff’s cause of action. The focus of the defence of contextual truth is on comparing the defendant’s contextual imputations with the plaintiff’s cause of action. The use of the definite article in both sub-paragraphs of s 26 (“the defamatory imputations”) focuses attention on the plaintiff’s imputations as a group and emphasises that the defence has to respond to all those imputations (being the plaintiff’s cause of action). The words “in addition to” in s 26(a) cannot be construed as including imputations pleaded by the plaintiff. Further, the structure of the 2005 Act and the language of s 26 belie any legislative intention to allow the “pleading-back” practice which had prevailed under s 16 of the 1974 Act to continue under the 2005 Act.

     66. Kermode at [75]-[85].

105. McColl JA summarised the courses of action open to a defendant seeking to justify defamatory matter under the 2005 Act as follows: [67]

[86] In summary, a defendant seeking to justify the defamatory matter under the 2005 Act may take the following courses of action, some statutory, some based on the common law:

(a) prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true: s 25;

(b) prove that rather than the defamatory imputations pleaded by the plaintiff, the defamatory matter carries nuance imputations which are substantially true;

(c) to the extent that the defendant fails to establish all the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, rely on those proved to be true in mitigation of the plaintiff's damages: partial justification; and

(d) to the extent the defendant cannot prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, prove that it carries contextual imputations that are substantially true, by reason of which the defamatory imputations do not further harm the reputation of the plaintiff: s 26.

67. Kermode at [86].

106. Contrary to Fairfax’s submissions which adopted the remarks of Beech-Jones J in Chel,[68] I do not read the introductory words (“to the extent”) in [86(d)] of Kermode as suggesting an acceptance that the “defamatory imputations of which the plaintiff complains” in s 26 are only those of the plaintiff’s imputations which are found to be conveyed, defamatory but not substantially true. On a fair reading and given the context of her Honour’s remarks, those introductory words should be taken as only intending to address whether or not the justification defence under s 25 has been made out, being that to which McColl JA had referred in the immediately preceding sub-par [86(c)].

     68. Tcpt, 11 September 2017, p 18 (25-50); Chel at [24].

107. Insofar as McColl JA left open in Kermode the question of whether an “alternative” meaning pleaded by the plaintiff can be pleaded by the defendant as a contextual imputation, that does not assist Fairfax’s argument. As McColl JA noted, this would depend upon whether the plaintiff’s alternative imputation answers the description in s 26(a) of “the defamatory imputations of which the plaintiff complains”, given the requirement in s 26(a) that a contextual imputation needs to be “in addition to” the imputations pleaded by the plaintiff. McColl JA said: [69]

[91] ... If a jury finds that one imputation is conveyed, and as a result the plaintiff does not rely on an alternative imputation, it is arguable that the alternative imputation is no longer one “of which the plaintiff complains”. If so, it is also arguable that it is open to the defendant to plead a s 26 defence in a manner which contingently “adopts” (and seeks to establish the substantial truth of) the alternative imputation which otherwise did not further come under the jury’s consideration. While the practical utility of such a course for a s 26 defence, in circumstances where it might be thought the jury had found in the plaintiff’s favour on a more serious imputation, might be debatable, it may be that s 26 permits such a course. However, her Honour did not express a concluded view, and nor do I.

69. Kermode at [91].

108. Fairfax submitted that these remarks of McColl JA support their argument that s 26 permits a pleading of a defence which contingently “adopts” and seeks to establish the substantial truth of the plaintiff’s imputations. I do not agree. In my view, McColl JA was suggesting, without deciding, a different point. That point was that an “alternative” imputation might not answer the description in s 26 of an imputation “of which the plaintiff complains”, if the jury finds that one imputation is conveyed (and is defamatory) and hence does not need to consider whether an alternative imputation is conveyed and is defamatory because that allegation has, in effect, been abandoned by the plaintiff.

Mizikovsky

109. In Mizikovsky, the Queensland Court of Appeal [70] rejected the challenge to the trial judge’s instructions to the jury that when they considered the s 26 defence, they should take into account all of the defamatory imputations complained of by the appellant, including those which the jury found to be substantially true.

     70. Mizikovsky (Fraser JA, Holmes JA and Fryberg J agreeing) at [19].

110. After noting that the trial judge had adopted the literal meaning of s 26, namely, it requires the defendant to prove that “the defamatory imputations” – meaning all of the imputations of which the plaintiff complains – do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations, [71] Fraser JA observed that the literal meaning of s 26 was adopted by this Court in Kermode in holding that a defendant is not able to “plead back” a plaintiff’s defamatory imputation in a defence of contextual truth. [72]

     71. Mizikovsky at [14].

     72. Mizikovsky at [15].

132. There is a related difficulty with Fairfax’s argument. It requires giving s 26 a differential operation depending on whether the defendant pleads a justification defence under s 25. That involves reading words of limitation into s 26, and ignores that the words “defamatory imputations” in s 26(a) refer more naturally to the plaintiff’s complaint set forth in his or her pleading.

133. Fourth, the submission that the result of the primary judge’s construction is “unfair” and “grotesque” for a defendant, should be rejected. That a defendant cannot deploy a ‘pleading-back’ defence, as was available under the 1974 Act, reflects the different language of s 26 of the 2005 Act to s 16 of the 1974 Act, and the different statutory context of the 2005 Act. As Basten JA observed in Born Brands, [96] the construction of (largely) uniform national legislation will not generally be affected by earlier legislation operating only in one state.

     96. Born Brands at [79].

134. That a defendant might be better placed in defending a defamation claim under s 26 if the plaintiff’s imputations that meet the meaning in s 26(a) may change at trial is hardly unfair. For the purpose of the justification defence under s 25, the substantial truth of some of the defamatory imputations carried by a matter (partial justification) does not extinguish liability for the cause of action in tort, though it may be relevant to mitigation of damages, for example, to justify particular imputations concerning a relevant sector of the plaintiff’s life. [97] Similarly, there is no reason why the same use should not be made in assessing damages of evidence led in support of a failed defence based on the truth of contextual imputations. [98]

     97. Holt v TCN Channel Nine Pty Ltd (2014) 86 NSWLR 96; [2014] NSWCA 90 at [26]-[30] (Macfarlan JA).

     98. Holt v TCN Channel Nine Pty Ltd at [30], citing John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 at [47]-[52] (Handley JA, Spigelman CJ and McColl JA agreeing).

135. That the reform in the uniform Defamation Acts in 2005 could have gone further and permitted the defendant to plead back the plaintiff’s imputations by way of a defence of contextual truth, as had been permissible in New South Wales under the 1974 Act, does not assist Faifax’s argument. As Fraser JA observed in Mizikovsky, [99] s 26 represents a significant reform of the defamation law for all jurisdictions other than New South Wales which had no contextual truth defence. [100]

     99. Mizikovsky at [18].

     100. Mizikovsky at [18].

136. Fifth, it is not to the point that the summary propositions set out in Kermode at [86] were not intended as an exhaustive statement of the courses available to a defendant. That is, other defences are available in appropriate cases. [101] But that does not detract from the appropriateness of a sequential approach by the tribunal of fact where defences are pleaded under ss 25 and 26.

     101. For example, qualified privilege under s 30 and honest opinion under s 31.

137. Sixth, Fairfax’s challenge to the decision in Mizikovsky did not squarely address the Marlborough Gold principle. In Australian Securities Commission v Marlborough Gold Mines Ltd [102] a case involving the proper construction of the Corporations Law (Cth), then uniform state law, the High Court said:

Although the considerations applying are somewhat different from those applying in the case of commonwealth legislation, uniformity of decision in the interpretation of uniform national legislation such as the Law is a sufficiently important consideration to require that an intermediate appellate court – and all the more so a single judge - should not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong.

102. Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; [1993] HCA 15.

146. In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [103] , the plurality emphasised:

Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong. (Citation omitted)

103. (2007) 230 CLR 89; [2007] HCA 22 at [135].

147. The meaning of the expression “plainly wrong” was considered in Gett v Tabet [104] in the context of the question as to when an intermediate appellate court ought to depart from its own decisions in relation to a matter of common law. The Court stated: [105]

     104. (2009) 254 ALR 504; [2009] NSWCA 76 at [274]-[293].

     105. Gett v Tabet (2009) 254 ALR 504; [2009] NSWCA 76 at [294]-[295].

[294] The phrases “plainly wrong” or “clearly wrong” can be understood to focus on at least one or more of the following attributes of a ruling:

(a) the fact of error is immediately (in the sense mentioned in [283] above) apparent from reading the relevant judgment;

(b) the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred (cf Chamberlain and Clutha), and

(c) the nature of the error that can be demonstrated with a degree of clarity by the application of correct legal analysis.

[295] In our view, the first possibility is liable to be highly subjective and should not be required, where the other two possibilities are satisfied. The existence of (b) and (c) is a precondition to the exercise of the power to depart from earlier authority.

148. It is unnecessary to add to the debate in the authorities concerning how to determine whether a court is “convinced” that an interpretation is “plainly wrong”. [106] For the reasons given above, I am not persuaded that the construction of s 26(a) in Mizikovsky [107] is “plainly wrong” in the sense that that expression is used in the authorities. It follows that I respectfully consider that Chel was wrongly decided.

     106. Gett v Tabet at [274]-[295] (Allsop P, Beazley and Basten JJA); and R v XY (2013) 84 NSWLR 363; [2013] NSWCCA 121 at [23]-40] (Basten JA).

     107. Mizikovsky at [17]-[18].

149. In my view, a defamatory imputation does not cease to be one “of which the plaintiff complains” (s 26(a)) if it is found by the tribunal of fact to be substantially true in the context of a different defence (s 25) which, by hypothesis, has failed. That is, the meaning of the imputations answering the description of “the defamatory imputations of which the plaintiff complains” in s 26(a) does not change at trial. This is sufficient to dispose of grounds 1, 3, 4 and 5.

150. Insofar as McColl JA at [22]-[34] above, advances a construction of s 26(b) which would allow the tribunal of fact to take account of any earlier finding (for the purpose of s 25) as to the substantial truth of a plaintiff’s imputation in undertaking the comparative or weighing exercise under the sub-section, that was not in issue or the subject of argument in this appeal, and I respectfully agree with the observations of Meagher JA at [46]-[47].

B. Particulars in mitigation of damages

151. Under the heading “Mitigation of damages”, Fairfax pleaded in pars 19 and 20 of their defence certain facts and matters in mitigation of damage to Mr Kazal’s reputation, if the allegedly defamatory imputations are proven and the other defences are unsuccessful. It is not necessary to refer to the detail of the mitigation particulars in par 19, as they were not the subject of the strikeout application.

152. The particulars in par 20 of the defence are relied on as matters directly relevant to the contextual background against which the allegedly defamatory statements were made. To provide context for what follows it is of assistance to set out in summary form the lengthy particulars pleaded in par 20 which extend over 25 pages:

[20] In addition, they rely in mitigation of damages on the following matters which are directly relevant to the contextual background against which the allegedly defamatory publications were made:

Imputation 13(a) – the Plaintiff sought to corruptly (in the sense of obtaining an unmerited benefit) influence politicians to advance his personal interests and those of his family by organising lavish trips to the UAE and restaurant dinners for those politicians.

Imputation 16(b) – the Plaintiff had obtained favourable deals from government authorities by providing politicians with financial benefits i.e. trips to the UAE and hosting them at restaurants owned by the Plaintiff’s family.

[20.1]      The particulars set out at 16.1-16.10 above are repeated.

[The particulars given in pars 16.1-16.10 describe the plaintiff as a member of the Kazal family (par 16.1); and assert that the plaintiff with his brothers was actively involved in, and assisted in the running of, the Kazal family businesses and that the Kazal family operated its businesses as a single unit with Karl Kazal as its head and each of the eight brothers having a role in the family business (par 16.2); that the plaintiff was a beneficiary of the Kazal Family Trust and received distributions therefrom (par 16.4); that the plaintiff was at various material times responsible for the operation of a restaurant or restaurants in the Kazal family business (par 16.6); that the plaintiff held various shareholdings and directorships in some Kazal entities (par 16.7); that the Kazal family operated numerous other companies as part of their family businesses (par 16.8); that the Kazal family, utilising companies in which they all had interests, took control of various properties and operated various businesses (par 16.9); and, that the Kazal family companies commonly used the same accountant (par 16.10).]

[20.2]-[20.34]   [Particulars are given in pars 20.2-20.4 under the heading “Political Donations”; pars 20.5-20.7 under the heading “Hosting of politicians at restaurants”; pars 20.11-20.14 under the heading “The appointment of Karl Kazal as honorary trade envoy for the NSW Government”; pars 20.15-20.34 under the heading “Charif Kazal’s dispute with Child Support Agency”.]

Imputation 16(c) – the Plaintiff, a member of a powerful and politically connected set of siblings, corruptly extracted favourable deals from government authorities for his family’s nightclub and restaurants at The Rocks near Sydney’s Circular Quay.

[20.35]      The particulars set out at 16.1-16.10 above are repeated.

[Particulars are given in pars 20.36-20.38 under the heading “Andrew Kelly”; pars 20.39-20.46 under the heading “91 George Street – The Guylian Chocolate Café; pars 20.47-20.55 under the heading “99 George Street – The Rocks Café”; under pars 20.56-20.75 under the heading “100 George Street – La Mela Pizzeria”; par 20.76 under the heading “103 George Street – AWT Trading Premises”; pars 20.77-20.81 under the heading “135 George Street – Amo Roma Restaurant”’; par 20.82 under the heading “Bay 43, 1-5 Hickson Road”; par 20.83 under the heading “The plaintiff’s role in relation to The Rocks Businesses”; pars 20.84-20.110 under the heading “Kelly’s role in working for Gazal family businesses whilst still employed by SHFA”; pars 20.111-20.112 under the heading “Initial ICAC complaint”; pars 20.113-20.121 under the heading “ICAC investigation and report – Operation Vesta”.]

153. Some additional observations should be made. First, the particulars in pars 20.2-20.10 assert that it can be inferred from the matters referred to in pars 16.1-16.10 of the defence, that Mr Kazal:

• approved of or acquiesced in the political donations (par 20.3);

• approved of or acquiesced in the hosting of state and federal politicians in Kazal family restaurants (par 20.6);

• approved of or acquiesced in the payment of or facilitation of travel by politicians (par 20.9).

154. Second, no particulars are given identifying some connection between Mr Kazal with the appointment of Karl Kazal as honorary trade envoy for the NSW Government (pars 20.11-20.13).

155. Third, one particular is given asserting that Mr Kazal was connected with Charif Kazal’s dispute with the Child Support Agency. The particular asserted that it can be inferred that Mr Kazal took an active role in this matter, including by claiming that he had loaned his brother, Charif Kazal, $31,218.76, thereby assisting Charif Kazal as part of an active plan by the Kazal family to use donations and other benefits provided to politicians to obtain an unmerited benefit (par 20.34).

156. Fourth, one particular is given asserting that Mr Kazal was connected with the matters particularised under the heading “Andrew Kelly” and the various properties located in The Rocks. The particular asserted that Mr Kazal was involved in the running of the businesses and leasing of properties in The Rocks identified in the particulars, along with other members of the Kazal family (and stood to gain financially from the success of those businesses) (par 20.83).

157. Fifth, one particular is given asserting that Mr Kazal was connected with Mr Kelly’s role in working for Kazal family businesses while still employed by SHFA. The particular asserted that Mr Kelly met Charif Kazal at Eastbank, at a restaurant operated by the Kazal family and at which Mr Kazal worked (par 20.87).

158. Sixth, no particulars are given seeking to connect Mr Kazal with the matters concerning the ICAC complaint, investigation and report described as Operation Vesta (pars 20.111-20.121).

The argument before the primary judge

159. Before the primary judge, Mr Kazal complained that the par 20 mitigation particulars were not about him as the plaintiff. He emphasised that the structure of the mitigation particulars made either undifferentiated allegations about the “Kazal family”, or one or more named members of the “Kazal family”, not being him as the plaintiff, or about a Kazal entity such as Kazal Bros Pty Ltd.

160. Mr Kazal further complained that without clear particulars of why these allegations ought to mitigate the harm caused to his reputation, the particulars were nothing but a diversion and did not identify the facts, matters and circumstances as to why his reputation is to be regarded as affected by this material. Mr Kazal submitted that whatever the precise limits of proof of “background facts” to a defamatory publication (referring to Burstein v Times Newspapers Ltd) [108] , the facts sought to be proved have to be about the plaintiff and that the present particulars were not so drawn.

     108. [2001] 1 WLR 579 (Burstein).

161. Fairfax’s response sought to justify the par 20 mitigation particulars on the basis that their case is that the Kazal family conducted itself as a family business and accordingly the reputation particulars related to Mr Kazal as the plaintiff. Fairfax submitted that some of Mr Kazal’s brothers, including Charif Kazal, had engaged in corrupt conduct in the running of the family business, that Mr Kazal was very closely involved in the family business and “we allege a number of matters that he must have known about”. [109] Fairfax also submitted that the particulars related to the relevant sector of Mr Kazal’s life, being his close involvement in the running of the family businesses. [110]

     109. AB 193; Tcpt 19 August 2016, p 27 (26-28).

     110. AB 194; Tcpt 19 August 2016, p 28 (40-45).

162. In addition, Fairfax argued that, as the mitigation particulars were also relevant to the defence of honest opinion, the striking out of the mitigation particulars would not have a substantial impact on the costs of the proceedings or the length of the trial. [111]

     111. AB 155-156.

The primary judge’s reasons

163. After referring to the parties’ competing submissions as to whether the mitigation particulars concerned Mr Kazal, her Honour found (at [45]) that, so far as the particulars (in par 20.1) repeated par 16.1 to 16.10 of the defence relating to the particulars of truth, that “the Kazal family conducted itself as a family business”, that was an unhelpful exposition of the case to be put at trial by the Fairfax.

164. Her Honour further found that while many of the particulars sought to be struck out were also relied upon in support of the honest opinion defence, that did not obviate the need to determine whether the particulars can properly stand as particulars of mitigation: at [47].

165. Her Honour then addressed three aspects of the particulars. The first concerned the conduct of “the Kazal family” ranging from political donations, hosting politicians at restaurants, paying for or facilitating travel by politicians, and proposing the appointment of Karl Kazal as “honorary trade envoy for the NSW Government”. Her Honour found that it was unclear how any of that conduct could be visited upon the plaintiff, to his discredit. She noted that the highest the matter was put in pars 16.1-16.10 (relating to the contention that the Kazal family conducted itself as a family business) was that the plaintiff “approved of or acquiesced in” the impugned conduct: at [49].

166. The second concerned the conduct of Mr Charif Kazal, particularly concerning a dispute with the Child Support Agency. Her Honour described this topic as “large” and its putative impact on the plaintiff’s reputation as “tenuous”: at [50].

167. The third concerned the Kazal family’s dealings with Mr Andrew Kelly, an executive director of the Sydney Harbour Foreshore Authority (SHFA). Her Honour found that the scope of the evidence that would be introduced by these particulars was “enormous” and appeared to have nothing to do with the plaintiff beyond the contention in par 20.83 that he was “involved” in the running of “the business” and the leasing of the properties identified and that he stood (along with other members of the family) to gain financially from the success of those businesses: at [51].

168. While accepting the need for caution before striking out particulars, her Honour found that the effect of allowing the particulars would be to introduce a wholly separate case by a “side wind”: at [52].

169. Her Honour concluded that the basis upon which the matters particularised are capable of mitigating any damage to Mr Kazal’s reputation was “obscure” and that the material sought to be introduced was “large”: at [52]. Accordingly, her Honour struck out the mitigating particulars in par 20 of the defence.

Grounds of appeal – particulars of mitigation

170. Fairfax contend that her Honour erred in striking out the particulars of mitigation because:

1. the facts particularised were directly relevant to the contextual background in which the allegedly defamatory publication came to be made, evidence of which would be admissible in assessing what damage the publication had caused Mr Kazal (ground 6).

2. those particulars were also relied upon for the defence of honest opinion under s 31 of the 2005 Act (ground 7).

3. her Honour had regard to irrelevant considerations, namely the possible scope of the evidence relevant to the particulars of mitigation, because that evidence would be admissible in any event in relation to the honest opinion defence (ground 8).

The parties’ submissions

Fairfax

171. Fairfax commenced by emphasising the well-recognised need for caution in exercising the strike-out power. Fairfax submitted that evidence of particular acts of misconduct on the part of the plaintiff tending to show his or her character and disposition was admissible in mitigation of damages where the matters are directly relevant to the contextual background in which a defamatory publication came to be made [112] or where the evidence is properly before the Court on another issue as here, it was submitted, the defence of honest opinion. [113]

     112. Reference was made to Burstein at 579H (May LJ); Australian Broadcasting Corporation v McBride (2001) 53 NSWLR 430; [2001] NSWCA 322 (McBride) at [14]-[15] and [86]; Coxon v Wilson [2016] WASCA 48 (Coxon) at [79].

     113. Reference was made to Holt v TCN Channel Nine Pty Ltd at [32].

171. To the extent that the mitigation particulars are not specifically directed to the plaintiff, but to the overall Kazal family, Fairfax submitted that they are so directed on the footing that the plaintiff is part of that family unit and its activities in the manner described at par 16.1 to 16.10 of the defence. To exclude these matters from consideration of the trial, the submission continued, would be to exclude directly relevant background context and to put the court at risk of assessing damages in “blinkers” in the way that Burstein and Coxon have disapproved.

172. In oral argument, Fairfax submitted that the plea of malice by Mr Kazal is a “close variant” of Fairfax’s contention (in par 20 of their defence), that conduct engaged in by one Kazal family member is necessarily endorsed or condoned by the others. Fairfax submitted that while 28 of the 30 articles particularised by Mr Kazal in the plea of malice only refer generically either to the Kazals or the Kazal family or in some cases other specific family members, but not Mr Kazal, [114] Mr Kazal is to be taken as asserting in his reply that any article about any Kazal family member or the Kazals includes himself. [115]

     114. Tcpt, 11 September 17, p 16 (24-27).

     115. Tcpt, 11 September 17, p 15 (45-50).

Mr Kazal

174. In seeking to uphold her Honour’s decision, Mr Kazal submitted that:

1. par 20 of the defence has the hallmarks of a “roving inquiry”, containing 121 sub-paragraphs over 25 pages, making wide-ranging and serious allegations of corruption and misconduct against members of the Kazal family, going well beyond the material on which Fairfax rely in support of their justification defences;

2. the primary judge correctly found that these particulars lacked anything but the most tenuous connection to the plaintiff personally;

3. Burstein is qualified by two subsequent decisions of the English Court of Appeal – Turner v News Group Newspapers Ltd (Turner) [116] and Warren v The Random House Group Ltd (Warren) [117] , which emphasise there needs to be a sufficient degree of connection between the “Burstein particulars” and the matter complained of;

4. the par 20 particulars are not “clearly relevant” to the plaintiff’s reputation in the sense required by Turner, their relevance can only be by innuendo, by inviting the reader to deem the plaintiff guilty by association with his brothers;

5. a familial relationship does not make a person responsible for every item of misconduct of other family members regardless of awareness or approval by that person.

   116. [2006] 1 WLR 3469 at 3485 A-C.

   117. [2009] QB 600 at 649 B-E.

175. In response to Fairfax’s reliance upon the 28 articles referred to by Mr Kazal in his reply setting out particulars of malice, Mr Kazal submitted that the particulars of malice only went to identification of Mr Kazal; not that Mr Kazal in fact did something as a member of the Kazal family. [118]

     118. Tcpt, 11 September 2017, p 46 (25-50).

Relevant principles – admissibility of evidence of reputation

176. It is necessary to say something first about the admissibility of evidence of reputation in mitigation of damages in a defamation trial. The starting point is the common law rule in Scott v Samson. [119] While a defendant may seek to rely upon evidence of the plaintiff’s bad reputation in mitigation of an award of damages, evidence of specific acts of misconduct on the part of the plaintiff tending to show his or her character or disposition, as distinct from general bad reputation, is inadmissible. [120]

     119. Scott v Samson (1882) 8 QBD 491.

     120. Scott v Samson at 503-505.

177. The justification for this exclusionary rule is pragmatism and fairness. [121] It has been said that the exclusionary rule reflects the need to prevent trials becoming extended by the investigation of new allegations about the plaintiff’s past life, and also a concern about the lack of relevance of evidence which has “but a very remote bearing on the question in dispute”. [122] The concern is “to prevent [defamation] trials from becoming roving inquiries into the plaintiff’s reputation, character or disposition”. [123]

     121. Coxon at [16].

     122. Turner at [29] (Keene LJ) citing the remarks of Cave J in Scott v Samson at 505.

     123. Burstein at [35].

178. However, there are exceptions or limitations to the exclusionary rule in Scott v Samson. The exclusionary rule does not apply to evidence of past criminal convictions. [124]

     124. Goody v Oldhams Press Ltd [1967] 1 QB 333 at 340 (Lord Denning MR); O’Hagan v Nationwide News Pty Ltd (2001) 53 NSWLR 89; [2001] NSWCA 302 at [17] (Stein JA).

179. Nor does the exclusionary rule apply to evidence of facts directly relevant to the contextual background of the publication. In Burstein, the English Court of Appeal held that evidence of specific acts of misconduct on the part of the plaintiff tending to show his or her character and disposition is admissible where “it is directly relevant to the context in which a defamatory publication came to be made. [125] The stated rationale in Burstein for this exception is to avoid the danger that the jury would be required to assess damages in blinkers. [126]

     125. Burstein at [42] (May LJ).

     126. Burstein at [47].

180. Nor does the exclusionary rule apply to evidence properly admitted in relation to a defence [127] or partial justification. [128] In Turner, Keene LJ referred to Pamplin [129] where the defendants were allowed to rely, in mitigation of damage, on evidence adduced in support of a plea of justification which ultimately failed, and observed [130] that it has long been established that evidence of “specific acts properly admitted on such a plea may [nonetheless] be taken into account by the jury when assessing damages even though the plea has failed”. [131] However, Keene LJ also noted that to be used for this purpose, the evidence must related to “the relevant sector of the plaintiff’s life”. [132]

     127. Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 (Pamplin) at 120 (Neill LJ).

     128. Plato Films Ltd v Speidel [1961] AC 1090 at 1142 (Lord Denning MR); Turner v News Group Newspapers Ltd at [43].

     129. [1988] 1 WLR 116.

     130. Turner at [43].

     131. Turner at [43].

     132. Turner at [45], citing Jones v Pollard [1997] ENLR 233.

181. As explained in Holt v TCN Channel Nine Pty Ltd: [133]

The qualification referred to by Keene LJ reflects the requirement that evidence led by a defendant of a plaintiff's bad character must relate to the sector of the plaintiff's reputation with which the imputations relied upon by the plaintiff were concerned.

133. (2014) 86 NSWLR 96; [2014] NSWCA 90 at [29] (Macfarlan JA, Gleeson JA agreeing, citing McBride at [16] - [23]; Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232 at [162]). See also O’Hagan v Nationwide News Pty Ltd at [5]-[8] (Meagher JA), [26]-[32] (Stein JA), [33]-[37] (Brownie AJA).

182. Pamplin was applied in John Fairfax Publications Pty Ltd v Zunter [134] where it was noted that there was no reason why the same use should not be made in assessing damages of evidence led in support of a failed defence based on the truth of contextual imputations.

     134. [2006] NSWCA 227 (Handley JA, Spigelman CJ and McColl JA agreeing) at [51].

183. In Holt v TCN Channel 9 Pty Ltd, the position was summarised as follows: [135]

[32] The law is undoubtedly concerned "to prevent [defamation] trials from becoming roving inquiries into the plaintiff's reputation, character or disposition" (Burstein v Times Newspapers Ltd [2001] 1 WLR 579 at [35]; McBride at [16]) but that policy was not infringed in the present case. The policy is manifested by the rule that, in general, evidence of "particular acts of misconduct on the part of the plaintiff tending to show his character and disposition", as distinct from evidence of general bad reputation, is inadmissible in mitigation of damages (Gatley on Libel and Slander (11th ed 2008, Sweet & Maxwell) at [35.30]). This rule does not apply to evidence, such as led in Burstein, of particular facts which are directly relevant to the contextual background in which a defamatory publication came to be made. Nor is it applicable where, as described in Pamplin and as was the case here, the evidence is properly before the Court on another issue.

135. Holt v TCN Channel Nine Pty Ltd at [32].

184. That the application of the test in Burstein may be difficult in particular cases was acknowledged in Turner. [136] The Australian authorities are to similar effect. [137] In Turner, Keene LJ expressed the view that there was a need for the courts to proceed “with some caution” in applying Burstein given that it represented a modification of the long-standing rule in Scott v Samson.

     136. Turner at [56].

     137. Channel Seven Sydney Pty Ltd v Mahommed at [262]-[266]; West Australian Newspapers Ltd v Elliott [2008] 37 WAR 387; [2008] WASCA 172 at [63]; Coxon at [19].

Disposition of grounds of appeal

185. Pleadings and particulars must identify with sufficient clarity the case the parties have to meet and that conduct, such as fraud, must be pleaded specifically and with particularity. [138] That applies to the particulars of mitigation of damages relied upon by Fairfax in the present case. Here the “particulars” were incorporated as part of the pleading.

     138. Banque Commerciale SA (En liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 285-286 (Mason CJ and Gaudron J), 290 (Brennan J); [1990] HCA 11.

186. UCPR, r 14.28(1) provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading discloses no reasonable cause of action or defence, or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the Court. Although the notice of motion upon which Mr Kazal moved to strike out par 20 of the defence was not included in the materials before the Court, it seems that the strikeout application relied upon this power conferred by the UCPR.

187. It is well accepted that there is a need for caution when exercising the strikeout power to ensure that the party whose pleading is attacked will not be improperly deprived of an opportunity for the trial of their case. [139]

     139. General Steel Industries Inc v Commissioner for Railways of New South Wales (1964) 112 CLR 125 at 130; [1964] HCA 69.

188. The relevant question is not whether the matters pleaded in par 20 of the defence are in themselves sufficient to disclose a reasonable defence to the plaintiff’s claim, but whether it would be open to the defendant upon the pleading to prove facts at the trial which would arguably be relevant to an assessment of damages. [140]

     140. Coxon at [71].

Paragraphs 20.1-20.10 (and paragraphs 16.1-16.10)

189. The starting point is par 16.1-16.10 of the defence. These paragraphs are repeated in par 20.1 and relied upon by Fairfax in pars 20.3, 20.6 and 20.9 for the inference that Mr Kazal “approved of or acquiesced in” the making of political donations, the hosting of politicians, and the payment of or facilitation of travel by politicians.

190. The primary judge described these particulars (that the Kazal family conducted itself as a family business) as an unhelpful exposition of the case to be put at trial. I agree. The essential problem is that pars 16.1-16.10 contain only broad generalisations and lack precision concerning the business and family association between Mr Kazal and the other members of the Kazal family. These paragraphs are inadequate to support the suggested inference, which is critical in par 20, that Mr Kazal approved of or acquiesced in certain conduct of other members of the Kazal family, as referred to in pars 20.3, 20.6 and 20.9.

191. The pleading in pars 16.1-16.10 and par 20 does not identify any facts, matters and circumstances relied upon for the assertions, first that Mr Kazal had knowledge of the impugned conduct by other members of the Kazal family and secondly, that he was involved in some way in such conduct. An inference of approval or acquiescence in some conduct cannot be drawn from a mere business or family association. Pars 16.1-16.10 and pars 20.1-20.10 fail to state how it is said that Mr Kazal signified his approval or acquiescence in the conduct of other family members. For example, it is not asserted that Mr Kazal was present at any meeting with Charif Kazal at which it was agreed that a particular Kazal family company would make a political donation with a view to furthering their family business interests (par 20.4).

Paragraphs 20.11-20.14

192. The particulars of the appointment of Karl Kazal as honorary trade envoy for the NSW Government (pars 20.11-20.13) do not identify any conduct of Mr Kazal that could support a suggestion that he had any connection with this appointment. The particulars are inadequate.

Paragraphs 20.15-20.34

193. The primary judge described the particulars concerning Mr Charif Kazal’s dispute with the Child Support Agency as a “large” topic and its putative impact on Mr Kazal’s reputation as “tenuous”. I agree.

194. These particulars are broad and lack any precision in identifying some conduct of Mr Kazal that could support a suggestion that he was involved in the alleged “active plan by the Kazal family” to obtain an “unmeritorious benefit”, let alone that he had any knowledge of that alleged plan. Insofar as there is mention of Mr Kazal in par 20.34, it is not asserted in the particulars that the claim by Mr Kazal that he had loaned his brother, Charif Kazal, $31,218.76 was untrue or inaccurate in any respect.

195. Before the primary judge, Fairfax acknowledged that par 20.34 required amendment. [141] However, no amendment was forthcoming in response to the strike-out application. Nor did Fairfax seek to amend par 20.34 on appeal. The particulars are inadequate.

     141. AB 194-195; Tcpt, 19 August 2017, p 29 (30-36), p 30 (13-15).

Paragraphs 20.36-20.83

196. The particulars concerning the Kazal family’s dealings with Mr Kelly of SHFA do not identify some connection between the Mr Kazal’s asserted involvement in the running of the businesses and leasing of Kazal family properties in The Rocks and the impugned conduct of the Kazal family in their dealings with Mr Kelly. Again, these particulars lack any precision and are inadequate.

Paragraphs 20.84-20.110

197. The particulars concerning Mr Kelly’s role in working for the Kazal family businesses whilst still employed by SHFA, do not rise any higher than that Mr Kazal worked at the restaurant at which Mr Kelly met with Charif Kazal on 12 April 2007. It is not pleaded that Mr Kazal was present at that meeting. It is not pleaded that Mr Kazal had any knowledge of or approved the (unpleaded) discussions at that meeting.

198. The particulars lack any precision in identifying some conduct of Mr Kazal that could support a suggestion that Mr Kazal was involved with Mr Kelly’s role in working for Kazal family businesses whilst still employed by SHFA. The particulars are inadequate.

Paragraphs 20.111-20.121

199. The particulars concerning the ICAC complaint, investigation and report described as Operation Vesta, including the findings by ICAC that Mr Kelly engaged in corrupt conduct and that Charif Kazal acted corruptly, do not identify any conduct of Mr Kazal that could support a suggestion that he was involved in the conduct of either Mr Kelly or Charif Kazal, the subject of ICAC’s corrupt conduct findings. Again, the particulars are inadequate.

Ground 6

200. As presently framed, I do not consider that it is arguable that the matters pleaded in par 20 of the defence are directly relevant background context that would be admissible in assessing the damage caused to Mr Kazal by the alleged defamatory publications. The matters pleaded in par 20 are inadequate to arguably raise questions of involvement by Mr Kazal in the alleged corrupt dealings with government authorities by other members of the Kazal family. The matters in par 20 involve a mere “roving inquiry” into Mr Kazal’s business and family association with other members of the Kazal family who are alleged to have engaged in corrupt conduct. [142] Par 20 of the defence does not disclose a reasonable defence of mitigation of damages. It is also embarrassing, and has a tendency to cause delay in the proceedings.

     142. Burstein at [40].

Ground 7

201. While the primary judge observed that “many” of the mitigation particulars in par 20 were also relied upon by Fairfax in support of the honest opinion defence, the correct position is that all of the mitigation particulars were relied upon by Fairfax in support of the honest opinion defence. Nonetheless, I do not regard that slight mis-description by her Honour to be material.

202. Plainly, the primary judge took this matter into account, [143] however, as her Honour correctly observed, that did not obviate the need to scrutinise the par 20 particulars. That inadequate particulars are also relied upon for another defence does not provide a bootstraps argument against striking out of such particulars. Ground 7 is not established.

     143. [2017] NSWSC 44 at [47].

Ground 8

203. Par 20 of the defence failed to plead specifically and with particularity matters directly relevant to the contextual background in which the publications were made. Having regard to the deficiencies in par 20, there was no error by the primary judge in taking into account the possible scope of the evidence relating to the particulars of mitigation. Ground 8 is not established.

204. In my view, there was no error by the primary judge in striking out par 20 of the defence.

Conclusion and orders

205. Fairfax has failed on both issues raised on appeal. There is no reason why costs should not follow the event: UCPR, r 42.1.

206. Accordingly, I propose the following orders:

1. Grant leave to appeal.

2. Direct the appellants to file and serve a notice of appeal in accordance with the draft notice of appeal contained in the White Book within 7 days.

3. Appeal dismissed.

4. The appellants to pay the respondent’s costs of the appeal.

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Endnotes

Amendments

17 April 2018 - Addition of counsel to Representation

Decision last updated: 17 April 2018