Fairfax Media Publications Pty Ltd v Zeccola

[2015] NSWCA 329

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Fairfax Media Publications v Zeccola [2015] NSWCA 329

Hearing dates:

11 November 2014, final submissions 14 April 2015

Date of orders:

23 October 2015

Decision date:

23 October 2015

Before:

McColl JA at [1]; Macfarlan JA at [112]; Sackville AJA at [113].

Decision:

(1) Grant leave to appeal;
(2) Appellants to file the notice of appeal in the form of the draft appearing in the White Book at page 34 within seven days;
(3) Appeal allowed in part;
(4) Set aside order 1 made by McCallum J on 13 March 2014 insofar as her Honour struck out the appellants’ contextual imputations 19(a)(i), and (v), 27(a)(i) and (v) and 35(a)(i) and (v);
(5) Respondents to pay fifty per cent of the appellants’ costs and have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise qualified.

Catchwords:

TORTS – defamation – defence of contextual truth – s 26, Defamation Act 2005 (NSW) – plaintiffs pleaded imputations of not returning profits, withholding returns and dishonouring distribution commitments –defendants pleaded contextual imputations of general financial default – whether contextual imputations must differ from plaintiff’s imputations in kind as well as in substance – whether “differ in substance test” is a sufficient exposition of s 26 – whether defendants’ imputations capable of being “other imputations” carried “in addition to” appellants’ imputations

TORTS – defamation – defence of contextual truth under s 26, Defamation Act 2005 (NSW) – whether imputation capable of being carried – imputation of “reasonable suspicion” – holder of “reasonable suspicion” not identified – matters complained of did not refer to any person or authority holding “reasonable suspicion”

TORTS – defamation – practice and procedure – whether appropriate to strike out contextual imputations prior to trial

Legislation Cited:

Civil Law (Wrongs) Act 2002 (ACT)
Civil Procedure Act 2005 (NSW)
Defamation Act 1974 (NSW)
Defamation Act 2005 (NSW)
Defamation Act 2005 (Vic)
Suitors’ Fund Act 1951 (NSW)

Cases Cited:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Allen v John Fairfax & Sons (Supreme Court (NSW) Hunt J, 2 December 1988, unrep)
Amalgamated Television Services v Marsden (1998) 43 NSWLR 158
Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 745
Ange v Fairfax Media Publications Pty Ltd & Ors [2011] NSWSC 204
Bateman v Fairfax Media Publications Pty Ltd (No 2) [2014] NSWSC 1380
Bateman v Fairfax Media Publications Pty Ltd (No 3) [2014] NSWSC 1601
Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2013] NSWSC 1651
Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369; (2014) 88 NSWLR 421
Crosby v Kelly [2013] FCA 1343
David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; [2000] 1 VR 667
Fairfax Media Publications Pty Ltd v Bateman [2015] NSWCA 154
Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; (2011) 81 NSWLR 157
Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118
Hepburn v TCN Channel Nine Pty Limited [1984] 1 NSWLR 386
Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36
John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205
Kelly v Harbour Radio Pty Ltd [2013] NSWSC 9
Lachaux v Independent Print Ltd [2015] EWHC 620
Liu v Fairfax Media Publications Pty Ltd [2013] NSWSC 7
Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112
Maisel v Financial Times Ltd (1915) 112 LT 953
Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
Newnham v Davis (No 2) [2010] VSC 94
Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2012] NSWSC 1136.
Plato Films Ltd v Speidel [1961] AC 1090 at 1142
Purcell v Cruising Yacht Club of Australia [2003] NSWSC 245
Saint v John Fairfax Publications Pty Ltd [2002] NSWSC 312
Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669
Setka v Hon Tony Abbott MP and Australian News Channel Pty Ltd [2014] VSCA 287
Singleton v John Fairfax & Sons Ltd (Supreme Court of (NSW), Hunt J, 20 February 1980, unrep)
Tauaifaga v TCN Channel Nine Pty Ltd [2013] NSWSC 8

Texts Cited:

Supreme Court Rules 1970 (NSW)
Uniform Civil Procedure Rules 2005

Category:

Principal judgment

Parties:

Fairfax Media Publications Pty Ltd (First Appellant)
Brian Rosen (Second Appellant)
Michaela Boland (Third Appellant)
Antonio Zeccola (First Respondent)
Benjamin Zeccola (Second Respondent)

Representation:

Counsel:
Mr ATS Dawson (Appellants)
Mr C Evatt (First and Second Respondents)

Solicitors:
Banki Haddock Fiora (Appellants)
Millens Pty Ltd (First and Second Respondents)
Patterson Houen & Commins (First and Second Respondents’ Sydney Agent)
Kennedys (Australasia) Pty Ltd (Third, Fourth and Fifth Respondents)

File Number(s):

2014/97588

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law Division

Citation:

[2014] NSWSC 227

Date of Decision:

13 March 2014

Before:

McCallum J

File Number(s):

2009/297851

HEADNOTE

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

The respondents, Antonio and Benjamin Zeccola, who are associated with a company which trades as “Palace Films”, brought defamation proceedings against the appellants, Fairfax Media Publications Pty Ltd, Brian Rosen and Michaela Boland, in respect of an article published in the Australian Financial Review on 15 July 2009, the online version of that article published the same day, and another article in substantially similar terms published on the website on 20 July 2009.

The respondents relevantly pleaded the following imputations as having been published of and concerning each of them:

“(1)   that the [first/second respondent] is a hypocrite in that he purports to be the greatest supporter of Australian films while allowing Palace Films to dishonour distribution commitments by embarking upon a strategy of not returning profits to the producers of those films.

(2)   that the [first/second respondent] acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films.

(3)   that the [first/second respondent] permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so.”

The appellants pleaded justification pursuant to s 25 of the Defamation Act 2005 (NSW) (the “2005 Act”) to each imputation. They also pleaded contextual truth to each matter complained of, relying on nine contextual imputations including:

“the [first/second respondent] permitted Palace Films to default on its payment obligations to producers of Australian films” (the “default imputation”)

and:

“there are reasonable grounds to suspect that the [first/second respondent] permitted Palace Films to trade when it was insolvent” (the “reasonable grounds to suspect imputation”),

The reasonable suspicion contextual imputations were pleaded in the alternative to the contextual imputation that:

“the [first/second respondent] acted wrongfully in permitting Palace Films to continue to trade when it was insolvent.”

The respondents applied pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) to strike out the default contextual imputations and the reasonable suspicion contextual imputations on the basis that, first, the default contextual imputations did not constitute “other imputations” capable of arising “in addition to” the respondents’ imputations for the purposes of s 26 of the 2005 Act, and second, that the reasonable suspicion contextual imputations were not capable of being carried by the matters complained of.

McCallum J struck out the default imputations because she was not persuaded that they were more serious, different allegations than the combination of the plaintiffs’ imputations. Her Honour struck out the reasonable grounds to suspect imputations on the basis that they conflated the concept of a sting of the imputation and the force with which it was conveyed.

The appellants sought leave to appeal, and to appeal, from those orders.

The following issues arose on appeal:

(i)   whether her Honour misconstrued s 26 of the 2005 Act in striking out the default contextual imputations as not being different in kind to the respondents’ imputations;

(ii)   whether it is appropriate to strike out contextual imputations before the tribunal of fact has determined which of the plaintiff’s imputations are carried and, where relevant, defences; and

(iii)   whether the primary judge correctly applied the principles concerning pleading contextual imputations in striking out the reasonable grounds to suspect imputation.

Held, per McColl, Macfarlan JJA and Sackville AJA, granting leave to appeal and allowing the appeal:

As to issue (i):

(1)   Section 26 of the 2005 Act requires a contextual imputation to differ in substance from the plaintiff’s pleaded imputations, but not to differ in kind. The primary judge erred in striking out the default contextual imputations because there was not a “difference in kind” from the respondents’ imputations (at [73] – [74]).

Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; (2011) 81 NSWLR 157 applied.

John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205; Bateman v Fairfax Media Publications Pty Ltd (No 3) [2014] NSWSC 1601; Plato Films Ltd v Speidel [1961] AC 1090 considered.

As to issue (ii)

(2)   It is always a matter for the Court to determine the question of whether, as a matter of law, a pleading is capable of satisfying a statutory requirement. In such a case it will be appropriate to strike out the imputation in advance of the trial (at [89]).

As to issue (iii)

(3)   It was open to the primary judge to find that the reasonable grounds to suspect contextual imputation was not capable of being carried by the matters complained of. Her Honour did not err in striking out those imputations (at [107]).

Purcell v Cruising Yacht Club of Australia [2003] NSWSC 245; Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118 distinguished.

**********

Judgment

Statement of the case

Statutory framework

The primary judgment

The differ in kind issue

The capacity issue

Submissions

Appellant’s Submissions

Respondents’ Submissions

Consideration

Differ in kind issue

Construction issue: conclusion

Ruling on contextual imputations

Reasonable Grounds to Suspect

Notice of contention

Orders

1. McCOLL JA: The applicants, Fairfax Media Publications Pty Ltd, Brian Rosen and Michaela Boland, seek leave to appeal, and appeal, from a decision of McCallum J striking out contextual imputations the applicants had pleaded in response to a statement of claim filed by the respondents, Antonio and Benjamin Zeccola, seeking to recover damages in defamation. [1] The respondents are associated with a company which trades as “Palace Films”. [2]

   1. Zeccola v Fairfax Media Publications Pty Ltd [2014] NSWSC 227 (the “primary judgment”).

   2. Primary judgment (at [2]); Palace Films Pty Ltd was originally the first plaintiff, however, McCallum J dismissed the proceedings it brought: Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2012] NSWSC 1136.

2. Screenhub Pty Ltd, John Paxinos and Alexander Prior respectively were the fourth, fifth and sixth defendants below (the “other defendants”). They were represented separately below. [3] They are the third, fourth and fifth respondents to the appeal and have filed a submitting appearance.

   3. Primary judgment (at [3]).

3. The proceedings are governed by the Defamation Act 2005 (NSW) (the “2005 Act”).

4. The Court heard argument on the question whether leave to appeal should be granted and on the substantive appeal concurrently on the basis that, if leave is granted, the appeal will be determined without further argument.

5. After the decision in this matter was reserved, the applicants’ solicitor drew the Court’s attention to two decisions delivered after the hearing which he submitted were potentially relevant: Bateman v Fairfax Media Publications Pty Ltd (No 3) [4] and Setka v Hon Tony Abbott MP and Australian News Channel Pty Ltd. [5] The Court directed the parties to file supplementary submissions addressing those decisions, which they each did.

   4. Bateman v Fairfax Media Publications Pty Ltd (No 3) [2014] NSWSC 1601 (“Bateman”).

   5. Setka v Hon Tony Abbott MP and Australian News Channel Pty Ltd [2014] VSCA 287 (“Setka”).

6. For the reasons which follow I am of the view that leave to appeal should be granted as the case raises issues of importance concerning the defence of contextual truth for which s 26 of the 2005 Act provides. I will refer to the applicants as the appellants henceforth.

7. For the reasons that follow I am of the view that the appeal should be allowed in part, but otherwise dismissed.

Statement of the case

8. The proceedings arise out of claims for defamation in respect of three articles:

1. one entitled “Money has a starring role in locally made movies”, published in The Australian Financial Review on 15 July 2009 (“AFR – print”);

2. the internet version of the AFR – print article, published on the Australian Financial Review’s website, also on 15 July 2009 (“AFR – online”); and

3. another, in substantially similar terms to the AFR – print article, entitled “Palace of dreams or producers’ nightmare?” published on the website on 20 July 2009 (the “Screenhub article”).

A copy of the matter complained of is appended to these reasons.

9. The appellants were all alleged to have published the AFR – print and AFR – online articles. The second and third appellants were also alleged to have published the Screenhub article as, too, were the other defendants.

10. The imputations relevant to the appeal are identical as between the AFR article (both the print and online versions) and, save as to one to which I refer below, the Screenhub article. The respondents relevantly pleaded the following imputations as having been published of and concerning each of them:

“(1)   that the [first/second respondent] is a hypocrite in that he purports to be the greatest supporter of Australian films while allowing Palace Films to dishonour distribution commitments by embarking upon a strategy of not returning profits to the producers of those films. [6]

(2)   that the [first/second respondent] acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films. [7]

(3)   that the [first/second respondent] permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so. [8] ” (Footnotes added.)

6. Imputations 12(p) and (v) (AFR – print); 16(p) and (v) (AFR – online); 19(s)(l) and (w) (Screenhub).

7. Imputations 12 (q) and (w) (AFR – print); 16(q) and (w) (AFR – online); 19(t) and (x).

8. Imputations 12(r) (AFR – print); 16(r) (AFR – online). Not pleaded in relation to the Screenhub article.

11. Two separate defences were filed, one on behalf of the appellants and the other on behalf of the other defendants, but in substantially the same terms and raising common issues. [9]

    9. Primary judgment (at [4]).

12. The appellants pleaded justification pursuant to s 25 of the 2005 Act to each imputation the respondents relied on. They also pleaded contextual truth to each matter complained of.

13. They relied upon nine contextual imputations in relation to the first and second respondents respectively, including:

“the [first/second respondent] permitted Palace Films to default on its payment obligations to producers of Australian films” [10]

and:

“there are reasonable grounds to suspect that the [first/second respondent] permitted Palace Films to trade when it was insolvent.” [11]

10. The “default contextual imputations”. The respondents did not dispute that the default contextual imputations were capable of being carried by the matters complained of.

11. The “reasonable suspicion contextual imputations”.

14. The reasonable suspicion contextual imputations were pleaded in the alternative to the contextual imputation that:

“the [first/second respondent] acted wrongfully in permitting Palace Films to continue to trade when it was insolvent.” [12]

12. Paragraphs 19(a)(iv)(a) and (viii); 27 (a)(iv)(a) and (viii); 35 (a)(iv)(a) and (viii).

15. The respondents applied pursuant to Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 14.28 to strike out the default contextual imputations and the reasonable suspicion contextual imputations.

16. The strike-out application was made on the same grounds in relation to both the appellants’ and the other defendants’ defences. The primary judge determined the issues by reference to the appellants’ defence. Mr A T S Dawson of Counsel, who appeared for the appellants in this Court and below, said that it was accepted that, to the extent there was commonality between the appellants’ and the other defendants’ defences, the outcome of this application would apply to the latter as well. Mr C A Evatt of Counsel, who appeared for the respondents with Mr R Rasmussen on the application and below, did not demur.

Statutory framework

17. Section 6 of the 2005 Act provides:

“6 Tort of defamation

(1) This Act relates to the tort of defamation at general law.

(2) This 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).

(3) Without limiting subsection (2), the general law as it is from time to time applies for the purposes of this Act as if the following legislation had never been enacted:

(a) the Defamation Act 1958,

(b) the Defamation Act 1974.”

18. Section 26 of the Defamation Act provides:

“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.”

19. The history of the enactment of the 2005 Act and, in particular, s 26, was set out in Fairfax Media Publications Pty Ltd v Kermode. [13] Relevantly, the Explanatory Memorandum to the Bill which became the 2005 Act explained the defence of contextual truth as follows:

“Clause 26 provides for a defence of contextual truth. The defence deals with the case where there are a number of defamatory imputations carried by a matter but the plaintiff has chosen to proceed with one or more but not all of them. In that circumstance, the defendant may have a defence of contextual truth if the defendant proves:

[The relevant provision dealing with the defence of contextual truth was set out.]

There is a defence of contextual truth under the existing law of New South Wales.

At general law, the truth of each defamatory imputation carried by the matter published that is pleaded by the plaintiff must be proved to make out the defence of justification unless it can be established that the imputations were not separate and distinct but, as a whole, carried a “common sting”. In that case, the defence of justification is made out if the defendant can show that the ‘common sting’ is true. See Polly Peck (Holdings) Plc v Trelfold [1986] QB 1000 at 1032. The defence of contextual truth created by the proposed Act, unlike the general law, will apply even if the contextual imputations are separate and distinct from the defamatory imputations of which the plaintiff complains.” [14]

13. Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; (2011) 81 NSWLR 157 (“Kermode”) (at [31]ff) per McColl JA (Beazley and Giles JJA agreeing).

14. Kermode (at [35]).

20. In the Second Reading Speech to the Defamation Bill 2005, which became the 2005 Act, the Attorney General, the Hon Bob Debus MP, referred to cl 26 as follows:

“Clause 26 provides for a defence of contextual truth. There is already a defence of contextual truth under the existing New South Wales Act. The purpose of the defence is basically to prevent plaintiffs from taking relatively minor imputations out of their context within a substantially true publication.” [15]

15. Defamation Bill 2005, Second Reading Speech (New South Wales Legislative Assembly, Parliamentary Debates, (Hansard), 13 September 2005 (at 17639).

21. The reference to the defence of contextual truth in the Explanatory Memorandum and the Second Reading Speech under the existing New South Wales Act was to s 16 of the Defamation Act 1974 (NSW) (the “1974 Act”), which provided:

“16 Truth: contextual imputations

(1) Where an imputation complained of is made by the publication of any report, article, letter, note, picture, oral utterance or other thing and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of.

(2) It is a defence to any imputation complained of that:

(a) the imputation relates to a matter of public interest or is published under qualified privilege,

(b) one or more imputations contextual to the imputation complained of:

(i) relate to a matter of public interest or are published under qualified privilege, and

(ii) are matters of substantial truth, and

(c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff.” (Emphasis added.)

22. Two differences between s 16 of the 1974 Act and s 26 of the 2005 Act should be noted.

23. First, the s 26 defence is “a defence to the publication of defamatory matter”, whereas the s 16 defence is “a defence to any imputation complained of”. The wording of s 26 reflects the changed focus of the 2005 Act under which the cause of action for defamation arises in relation to the publication of the defamatory matter. [16] Under the 1974 Act, where a person published any matter to any recipient and by means of that publication made an imputation defamatory of another person, the person defamed had a cause of action against the publisher in respect of that imputation for the publication of that matter to that recipient. [17] Accordingly, each imputation was a separate cause of action to which the defendant had to plead. [18]

    16. Section 8, 2005 Act.

    17. Section 9(2), 1974 Act.

    18. Amalgamated Television Services v Marsden (1998) 43 NSWLR 158 (at 162) per Hunt CJ at CL (Mason P and Handley JA agreeing).

24. Secondly, the parts of s 16 I have emphasised above mirrored the requirement in the defence of substantial truth under s 15 of the 1974 Act that, in addition to proving the imputation was substantially true, the defendant had to prove the imputation either related to a matter of public interest or was published under qualified privilege. That requirement does not appear in the justification defence under s 25 of the 2005 Act.

The primary judgment

25. The respondents raised two objections to the appellants’ defences relevant to this appeal. The first was that the default contextual imputations did not constitute “other imputations” capable of arising “in addition to” the respondents’ imputations for the purposes of s 26 of the 2005 Act (the “differ in kind issue”).

26. The second objection was that the reasonable suspicion contextual imputations were not capable of being carried by the matters complained of (the “capacity issue”).

The differ in kind issue

27. Mr Evatt, who appeared for the respondents below and on appeal with Mr R Rasmussen, submitted that the default contextual imputations were virtually the same as the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x). [19]

    19. Primary judgment (at [20]).

28. For ease of comparison, the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x) are:

“that the [second/third respondent] acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films”.

The default contextual imputations are:

“the [second/third respondent] permitted Palace Films to default on its payment obligations to producers of Australian films.”

29. The primary judge determined this objection as follows:

“[22] The defendants’ submissions have not persuaded me that the contextual imputation is a more serious, different allegation than the combination of the plaintiffs’ imputations. The defendants submitted that the sting of the contextual imputation is defaulting on payment obligations generally, whereas the plaintiffs’ imputation selects the more specific and less serious sting of withholding ‘returns’ on successful films. It was submitted that the matters complained of refer to payment obligations other than returns. There are references to a failure to meet a ‘distribution guarantee’. Further, the first article reports the third plaintiff’s denial that Palace ever failed to meet ‘a distribution guarantee or payment schedules’. Mr Richardson noted that the third matter complained of specifically distinguishes between ‘reneging on distribution guarantees at different stages of production’ and withholding ‘producers returns’.

[23] However, consideration must also be given to the plaintiffs’ other imputations. Imputation 12(p) is:

that the second plaintiff is a hypocrite in that he purports to be the greatest supporter of Australian films while allowing Palace Films to dishonour distribution commitments by embarking upon a strategy of not returning profits to the producers of those films.

[24] There is also imputation 12(r), which is:

that the second plaintiff permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so.

[25] There are identical imputations for the third plaintiff.

[26] As already noted, the decision in Kermode [Besser v Kermode (2011) 81 NSWLR 157 (“Kermode”)] holds that the defence of contextual truth is directed to (and must defeat) all of the plaintiff’s defamatory stings. I am not persuaded that there is a difference in kind between an allegation of default on payment obligations to producers of Australian films and allegations of dishonouring distribution commitments by not returning profits or dishonouring distribution commitments by not distributing films as agreed.

…

[28] In any event, having regard to all of the plaintiffs’ imputations, I am not persuaded that contextual imputations (i) and (v) meet the requirement of s 26 that they be ‘other’ imputations capable of arising ‘in addition to’ the plaintiffs’ imputations. The sting is, in my view, not of a different kind – it is essentially the same. It is an allegation of failure to meet obligations duly undertaken in respect of the distribution of films. Those contextual imputations must be struck out.” (Emphasis added.)

As is apparent, the “combination of the plaintiffs’ imputations” referred to in [22] was a reference to the three respondents’ imputations set out at [10] above.

The capacity issue

30. Mr Evatt submitted the reasonable suspicion imputations were not capable of being carried by the matters complained of because there was nothing in any of the three matters complained of which suggested that any person held any such suspicion. The primary judge upheld that objection as follows:

“[40] Mr Dawson acknowledged that the articles do not speak in terms of any suspicion held by any individual person or authority. He conceded that the imputation was put on the basis that the primary imputation might be carried only weakly, in effect as something only to be suspected rather than confidently inferred. Mr Dawson indicated that it was for that reason that the two imputations were pleaded as alternatives. He submitted that there is no requirement that a ‘suspicion’ imputation identify the person holding the relevant suspicion.

[41] That submission, as far as it goes, finds ample support in authority. As noted by Mr Dawson, there is a helpful discussion of the relevant principles in the decision of Kirby J in Purcell v Cruising Yacht Club of Australia [2003] NSWSC 245. His Honour said (at [28] to [29]):

‘A plaintiff, in framing an imputation, or a defendant in framing a contextual imputation, may, according to the defendants, formulate the imputation in one of two ways. Either the suspicion must be attributed to an authority figure, such as the police, or the imputation (as here) must be framed in terms of ‘reasonable grounds to suspect’, or the plaintiff having acted in such a way as to warrant suspicion. To say that the police ‘suspect’ a person of murder is defamatory. It is also defamatory to say that there are reasonable grounds for suspecting that person committed murder.

I accept the defendants’ argument. That, however, is not the end of the matter. The issue must ultimately be determined by reference to the words published. In the context of those words, is the defendants’ contextual imputation conveyed? In that context, is there a need to identify the person who held the suspicion? It is suggested that different issues arise, depending upon the level of detail provided by the publication. If the publication, to use the defendants’ example, simply makes a bold allegation that there are reasonable grounds for suspecting a particular person of murder, then the imputation (without identifying the person who had the suspicion) would be carried. If, however, the publication provided an explanation for the suspicion, and it plainly depended upon matters of expertise, then the position, it was suggested, may be different. The message to the ordinary reasonable listener, in those circumstances, would be that there were reasonable grounds in the minds of experts to suspect that a particular person had committed the crime of murder.’

[42] However, what emerges from Purcell is that the issue arose in the context of an article dealing with the official treatment of an identified allegation of misconduct. Kirby J’s analysis assumed that the matter complained of reported the existence of a suspicion. His Honour’s point was that the imputation did not have to name or identify who held that suspicion, so long as it was evidently held reasonably. That is why this issue has generally arisen in the context of articles dealing with matters such as the fact of a person having been arrested and charged with an offence; the findings of a Royal Commission (cf Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669; the reference of a complaint to the protest committee of a club (Purcell) or the reference of a matter to ICAC (cf Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118.

[43] It does not follow from those authorities that every article that is capable of conveying an imputation of guilt is also capable of conveying an imputation of reasonably-held suspicion. Nor do those authorities hold that it is enough if the matter complained of excites suspicion in the mind of the ordinary reasonable reader. In my view, the defendants’ alternative imputation in the present case conflates two concepts. It conflates the sting of the imputation and the force with which it is conveyed. The defamatory sting that a person is reasonably suspected of something must have its foundation in something to that effect stated or conveyed by inference in the matter complained of.

[44] If an article reports the fact that a complaint or allegation has been referred to an authority, an imputation may be conveyed that the person is reasonably suspected of certain conduct, whether or not the holder of the suspicion is named. But if an article merely hints at a particular meaning, the territory for dispute is whether it in fact conveys that meaning. The weakness with which a particular meaning is conveyed cannot be overcome by watering down the defamatory sting from saying the plaintiff behaved in a certain way to saying only that he was suspected of having behaved in that way.

[45] I do not think there is anything in the matters complained of in the present case to point to the objective existence of any suspicion, complaint or allegation that the plaintiffs behaved in a certain way. The articles either say that the plaintiffs acted wrongfully in permitting Palace Films to continue to trade when it was insolvent or they do not. I do not think the articles are about the existence of a reasonably held suspicion.

[46] For those reasons, I have concluded that the alternative contextual imputation is incapable of being conveyed and must be struck out.” (Emphasis added.)

31. The order recorded on the cover sheet of the primary judgment is “Defendants’ contextual imputations (i), (iv)(b) and (v) struck out”. The parties accept that contextual imputation (viii)(b) should also have been struck out for consistency. It is clear that her Honour’s order was intended to refer to each paragraph of the defence in which the appellants had pleaded respectively the default contextual imputations and the reasonable suspicion imputations.

Submissions

Appellant’s Submissions

32. The appellants complained of two errors in the primary judge’s reasons. First, they contended that her Honour misconstrued s 26 of the 2005 Act in striking out the default contextual imputations as not being different in kind to the respondents’ imputations. They submitted this issue raised the questions of the correct approach to pleading contextual imputations pursuant to s 26 of the 2005 Act and whether, and to what extent, authorities relating to s 16 of the 1974 Act inform the proper construction of s 26 of the 2005 Act. They also sought to raise an issue not argued before the primary judge as to whether it is appropriate to strike out contextual imputations before the tribunal of fact has determined which of the plaintiff’s imputations are carried and, where relevant, defences. Finally they questioned whether the primary judge correctly applied the principles concerning pleading contextual imputations on the strike-out application.

33. The appellants also contended that the primary judge erred in holding that an imputation of reasonably held suspicion is incapable of arising unless the matter complained of refers to the objective existence of such a suspicion, complaint or allegation concerning the plaintiffs.

34. They submitted that in Purcell v Cruising Yacht Club of Australia,[20] Kirby J held that there did not have to be a suggestion in the matter complained of that someone actually held the reasonable suspicion, [21] and that contrary to her Honour’s reasons (at [42]), Kirby J did not assume that the matter complained of reported the existence of a suspicion.

    20. Purcell v Cruising Yacht Club of Australia [2003] NSWSC 245 (“‘Purcell”).

    21. Purcell (at [31]).

Respondents’ Submissions

35. The respondents advanced little by way of argument, being mostly content to rely on the primary judge’s reasons.

36. In their written submissions, the respondents submitted, in addition to the primary judge’s reasons with respect to the reasonable suspicions contextual imputations, that whilst it may not have been necessary to plead that the suspicion or accusation was reasonable, “it was necessary [for the respondents] to identify the person making the accusation”, [22] and that the primary judge and Kirby J in Purcell were incorrect to the extent their Honours accepted otherwise. This would have required the filing of a notice of contention which the respondents had not done. An application to do so orally was rejected. My reasons for that decision appear later in this judgment.

    22. Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669 (“Sergi”) (at 679).

Consideration

37. The task of statutory construction of s 26 must begin with a consideration of the text which cannot be displaced by historical considerations and extrinsic materials. This may require consideration of the context, which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy. [23]

    23. Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 (“Alcan”) (at [47]) per Hayne, Heydon, Crennan and Kiefel JJ.

38. The stricture expressed in Alcan concerning recourse to historical considerations in the construction process is reinforced by s 6(3) of the 2005 Act. [24] The effect of that provision has been described as “unclear”. [25] Nevertheless, it has also been accepted that although the effect of s 6(3) is that “the earlier legislation in [New South Wales] is to be ignored in identifying the general law, it is not necessarily to be ignored in construing the Defamation Act 2005 [although] it should be accepted that the construction of (largely) uniform national legislation will not generally be affected by earlier legislation operating only in one State”. [26]

    24. See [17] above.

    25. Fairfax Media Publications Pty Ltd v Bateman [2015] NSWCA 154 (“Bateman CA”) (at [144]) per Basten JA (Macfarlan JA agreeing).

    26. Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369; (2014) 88 NSWLR 421 (“Born Brands CA”) (at [79]) per Basten JA (Meagher JA and Tobias AJA agreeing). In Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2013] NSWSC 1651 (at [124]), in considering the effect of a defendant’s contextual imputations as compared with the plaintiffs’ imputations, Adamson J rejected the approach to that exercise Hunt J adopted in Hepburn v TCN Channel Nine Pty Limited [1984] 1 NSWLR 386 (“Hepburn”) (at 397) because of the different causes of action under the 1974 and 2005 Acts. Basten JA did not determine whether her Honour’s conclusion in this respect was correct: Born Brands CA (at [88]).

39. It is necessary to recognise the new legal context the 2005 Act creates, in particular, the fact that the common law now governs the identification of the cause of action. [27] Further, s 26 uses different language from s 16 of the 1974 Act, which is not merely the product of the excision of the references to qualified privilege and public interest. [28] For those reasons at least, while the conceptual foundation for the contextual truth defence which became s 16 of the 1974 Act to some extent informs an understanding of s 26 of the 2005 Act, 1974 Act jurisprudence cannot be decisive as to its operation. [29]

    27. Section 8, 2005 Act; see Kermode (at [41] – [43]; [62] – [63]; [75] – [80]).

    28. See [24] above.

    29. Kermode (at [75] – [86], in particular (at [76]); see also Crosby v Kelly [2013] FCA 1343 (“Crosby”) (at [21]) per Rares J.

40. In Kermode I explained the language of s 26 in the context of the plead-back issue in that case as follows:

“[81] Fourthly, the words ‘in addition to’ … as the primary judge pointed out (at [38], [40]), correctly in my view, cannot be ‘contorted to include imputations pleaded by the plaintiff’. To conclude that the phrase in addition to…etc connotes an imputation the plaintiff has not relied upon does no more than ascribe its ordinary meaning to it. This is reinforced by the use, in the same paragraph (s 26(a)) of further alternative language emphasising the distinction between the plaintiff’s and the defendant’s imputations: ‘one or more other imputations…, the latter being defined as the ‘contextual imputations’. Kaye J took the same approach to the construction of s 26 in the Defamation Act 2005 (Vic) in Newnham v Davis (No 2) [2010] VSC 94 (at [48]) – where the point presently under consideration did not arise.”

41. The question which arises in this case concerns the nature of the “otherness” the language of s 26 requires.

42. It was common ground that s 26 requires the contextual imputations to differ in substance from the plaintiff’s.

43. The “differ in substance” requirement was a product of 1974 Act jurisprudence based on the Supreme Court Rules 1970 (NSW) (“SCR”) which governed the pleadings in defamation cases.

44. In Morosi v Mirror Newspapers Ltd,[30] the Court of Appeal said that the requirement in SCR Pt 67 r 11(3) that a plaintiff’s imputations must differ in substance “preclude[d] the practice, formerly prevalent, of pleading many shades and gradations of substantially similar imputations.” Accordingly, on the proper construction of the SCR, an imputation specified in a statement of claim had to be “taken to include all imputations which [did] not differ in substance.”

    30. Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 (“Morosi”) (at 771) per Curiam (Moffitt P, Hope and Reynolds JJA).

41. In Jackson v John Fairfax & Sons Ltd, [31] Hunt J said it was “fundamental to the whole operation of the 1974 Act” and “basic to the scheme of s 16” that the imputation pleaded by the plaintiff and the contextual imputation pleaded by the defendant must be conveyed by the matter complained of at the same time, and that each must differ in substance from the other. His Honour based the latter proposition on Morosi, observing that “as the imputation pleaded by the plaintiff must be taken to include all other imputations which do not differ from it in substance … it follows that each party’s imputation must differ in substance from that relied upon by the other.” [32]

    31. Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36 (“Jackson”).

    32. Jackson (at 39 – 40).

42. UCPR 14.30(3) also requires the plaintiff’s imputations to differ in substance. Those rules have been held to be capable of affecting the substantive operation of the law of defamation in this State, even though the 2005 Act is part of the uniform defamation laws and the same rule is not found in other jurisdictions. [33] Accordingly, in New South Wales it should be presumed that the same position prevails under s 26 of the 2005 Act, that is to say, that contextual imputations must differ in substance from the plaintiff’s imputations.

    33. Bateman CA (at [143]) per Basten JA (Macfarlan JA agreeing; McColl JA dissenting).

43. That conclusion is also supported by the text of s 26 alone, as appears to have been accepted in Victoria. As I said in Kermode, Kaye J construed s 26 of the Defamation Act 2005 (Vic) in Newnham v Davis (No 2) [34] as imposing a “differ in substance” requirement, [35] albeit that there does not appear to be a counterpart to UCPR 14.30 in that State. [36] His Honour applied Jackson,[37] albeit without referring to its foundation in SCR Pt 67 r 11(3). Nevertheless, in my view, his Honour’s approach finds support, in any event, in the language of s 26 as a sufficient way of explaining the requirement that the matter complained of “carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations” (emphasis added).

    34. Newnham v Davis (No 2) [2010] VSC 94 (“Newnham”).

    35. Newnham (at [48]).

    36. There was no reference to such a provision in Setka (at [126]ff) where the plurality considered McCallum J’s decision in Bateman v Fairfax Media Publications Pty Ltd (No 2) [2014] NSWSC 1380 (“Bateman No 2”) and the extent to which it depended on UCPR 14.30 and other provisions of the UCPR concerning defamation pleadings in this State.

    37. Jackson (at 39 – 40).

44. That is how Nicholas J explained the insertion of the phrase “in addition to” in s 26 in Ange v Fairfax Media Publications Pty Ltd & Ors. [38] His Honour concluded that the words “in addition to” in s 26(a) removed the confusion under s 16 of the 1974 Act about what was required to establish a contextual imputation as a defence. [39] This appears to have been a reference to Allen v John Fairfax & Sons, [40] where Hunt J held that:

“[I]t is basic to the scheme of s 16 that the defendant’s contextual imputations must be conveyed by the matter complained of at the same time as [and] in addition to the imputation of which the plaintiff complains and that the defendant's contextual imputations must differ in substance from the plaintiff’s imputations to which they are pleaded.” [41] (Emphasis added.)

38. Ange v Fairfax Media Publications Pty Ltd & Ors [2011] NSWSC 204 (“Ange 2”). His Honour’s decision was an interlocutory ruling in a case in respect to which Simpson J had delivered an earlier interlocutory ruling: Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 745 (“Ange 1”).

39. Ange 2 (at [26]).

40. Allen v John Fairfax & Sons (Supreme Court (NSW), Hunt J, 2 December 1988, unrep) (“Allen – BC8801264”). Nicholas J cited the case as being a decision of the Court of Appeal but that was, with respect, incorrect.

41. Allen – BC8801264 (at 7, 12).

49. Hunt J also concluded in Allen that the “differ in substance” test was satisfied where a defendant pleaded a contextual imputation in general terms in the sense permitted by Maisel v Financial Times Ltd. [42] His Honour said:

“If the matter complained of conveys to the same ordinary reasonable reader two imputations at the same time, one of a general nature (of a Maisel type) and another of a specific nature which, even although related to the same subject matter of the general imputation, differs in substance from it, the policy behind s16 requires that the defendant be permitted to plead the former as a contextual imputation to the plaintiff's cause of action based upon the latter.” [43]

42. Maisel v Financial Times Ltd (1915) 112 LT 953 (“Maisel”) (at 955).

43. Allen – BC8801264 (at 10).

50. It is consistent with Hunt J’s earlier explanation that a contextual imputation must be carried “in addition to the imputation of which the plaintiff complains”, [44] that a general contextual imputation was permissible under such a construction of s 16, even though both the plaintiff’s and the defendant’s imputations related to the same subject matter, as long as the “differ in substance” test was satisfied.

    44. Allen – BC8801264 (at 7, 11).

51. The primary judge did not refer to any authorities relevant to her conclusion that the default contextual imputations were “not of a different kind” to the respondents’ imputations. [45] However her Honour’s language in that respect reflected John Fairfax Publications Pty Ltd v Jones, [46] to which she had earlier referred when considering the respondents’ complaints about the particulars of contextual truth. [47]

    45. Primary judgment (at [26], [28]).

    46. John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 (“Jones”) (at [19]).

    47. Primary judgment (at [10]).

52. In Jones, writing of s 16 of the 1974 Act, Spigelman CJ said:

“[19] … Whether or not an imputation is a permissible alternative if pleaded by a plaintiff does not mean it is ‘another’ imputation for purposes of the s16 defence. The test for plaintiff’s imputations – differ in substance – is a necessary but not sufficient test for ‘another’ imputation, which requires a difference in kind.” (Emphasis added.)

53. Mr Dawson submitted that Spigelman CJ’s reference in Jones to a “differ in kind” requirement for a s 16 contextual imputation was merely another way of expressing the “differ in substance” requirement. That is how Nicholas J appears to have understood the reasons in John Fairfax Publications Pty Ltd v Jones, [48] in Ange 2. His Honour did not perceive any inconsistency between the members of the Bench with regard to the principles which governed the application of s 16(1) as explained by Spigelman CJ. In his Honour’s view, they agreed that the critical question for the purposes of determining whether a contextual imputation was “another imputation” for the purposes of s 16 of the 1974 Act was whether it differed in substance from the plaintiff’s imputation. [49]

    48. Jones (at [19]).

    49. Ange 2 (at [18] – [23]) .

54. Nicholas J concluded:

“In my assessment, the cases show that, for the purposes of s 26(a), to prove that the matter carried in addition to the plaintiff's imputations one or more other imputations, a defendant must show that such imputations differ in substance from the plaintiff’s imputations. Accordingly, an imputation which is pleaded as an alternative formulation of the very imputation relied upon by the plaintiff could not be one carried in addition to that imputation. Put another way, it is not enough for a defendant to show that it is another imputation merely by reference to its formulation. The statute requires that it be carried ‘in addition to’ the plaintiff’s imputation, which involves showing that it is different in substance from that imputation. For example, as in Jones, if the defamatory sting of the defendant’s broad imputation was substantially similar to the defamatory sting of the plaintiff’s narrow imputation, it would not meet the requirements of s 26(a) of the Act.” [50] (Emphasis added.)

50. Ange 2 (at [27]).

Differ in kind issue

55. Jones was determined under the 1974 Act. It concerned the question whether the defendants could rely on a contextual imputation “the plaintiff was a dishonest broadcaster”, in circumstances where, pursuant to s 7A of the 1974 Act, a jury had found the matter complained of conveyed the defamatory imputation that “[t]he plaintiff was a dishonest broadcaster, in that he [a specific act was set out]”. Levine J struck out the defendants’ contextual imputation on the basis that it was “incapable of arising generally or more specifically as sought to be advanced by the defendants by reason of the invitation to the ordinary reasonable reader referred to”. [51]

    51. Jones (at [40]).

56. The debate about the permissibility of the defendants’ contextual imputation took a different turn in the Court of Appeal where, in addition to relying upon the basis upon which the primary judge struck out that imputation, the plaintiff’s counsel submitted, relevantly, “that the defendants’ first contextual imputation was not ‘another imputation’ within s 16(1)”. [52]

    52. Jones (at [53]).

57. Spigelman CJ upheld that submission. In his Honour’s view, the words “another imputation” in s 16(1) were “not satisfied where a defendant relies on a contextual imputation which is, in substance, nothing more than an alternative way of formulating the same imputation relied on by the plaintiff, based on exactly the same words in the matter complained of and applying those words in exactly the same way.” [53] In so finding, his Honour accepted that the plaintiff’s imputation and the defendants’ contextual imputation differed in substance and, too, that a single publication may convey two or more imputations of different degrees of seriousness. Nevertheless, his Honour held that the test for a plaintiff’s imputations, that they differ from each other in substance, was a “necessary but not sufficient test for ‘another’ imputation [in s 16(1)], which requires a difference in kind.” [54] This was because, in his Honour’s view, s 16 was “directed to a situation in which the same publication conveyed imputations which differ in their character, not merely a different way of formulating the same imputation at a higher level of generality.” [55]

    53. Jones (at [16]).

    54. Jones (at [19]).

    55. Jones (at [20]).

58. The Chief Justice was of the view that the expression “another imputation” in s 16(1) demonstrated that provision was intended to remedy a defect in the common law position “in circumstances where the two imputations were of a different character, rather than different levels of generality of the same allegation, e.g. the allegation of murder, theft and failure to attend church referred to in Plato Films Ltd v Speidel [1961] AC 1090 at 1142.” [56]

    56. Jones (at [20]).

59. Hodgson JA concluded the defendants’ contextual imputation was “another imputation” within s 16(1), because “[t]he plaintiff’s imputation can reasonably be considered as involving a limited type of dishonesty, so that what must and/or may be proved by way of justification of that imputation is different from what must and/or may be proved by way of justification of the defendants’ first contextual imputation.” [57] In his Honour’s view, it would not matter if the contextual imputation “arose from precisely the same matter or allegation within the publication as does the plaintiff’s imputation”. [58] Accordingly, his Honour concluded:

“[63] Thus, the defendant’s first contextual imputation is different in substance from the plaintiff’s imputation. It arises at the same time as and is not an alternative to the plaintiff’s imputation, in that a belief is [sic, in] both imputations could consistently be held. Accordingly, it is capable of being ‘another imputation’ within s 16(1).”

57. Jones (at [61]).

58. Jones (at [62]).

60. Ipp JA accepted that “the same words may be capable of bearing a broad defamatory meaning and a narrow defamatory meaning” and that “if a plaintiff sues for defamation, relying only on the narrow meaning of the words, the broad meaning will ordinarily be ‘another meaning’ within the meaning of the phrase in s 16(1) of the Defamation Act 1974”. [59] However he disagreed with Hodgson JA because he did not think that the matter complained of in Jones had “both broad and narrow meanings”. Rather, the meaning of the plaintiff’s imputation and the defendants’ contextual imputation was, in effect, the same, that the general character of the plaintiff was that of a dishonest broadcaster. [60] He added that in theory it would have been open to the defendant to attempt to justify, under s 15(2) of the 1974 Act, the imputation found by the jury. [61]

    59. Jones (at [110]).

    60. Jones (at [111]).

    61. Jones (at [114]).

61. Hodgson JA explained why he disagreed with Spigelman CJ’s conclusion and also commented on Ipp JA’s views as follows:

“[99] I agree with Spigelman CJ that a formulation of the same imputation at a higher level of generality is not ‘another imputation’ within s 16(1); it was for that reason that I rejected many of the defendant’s contextual imputations, apart from the first. Mere ‘anonymising’ is not enough. However, if a formulation at a higher level of generality makes the imputation different in substance, then this is not a formulation of the same imputation at a higher level of generality. In the present case, my view is that an imputation of general dishonesty as a broadcaster is at least capable of being substantially different (because wider and more thorough-going) from an imputation of dishonesty as a broadcaster in that a particular act is performed; and accordingly this aspect of the defence should not have been struck out in advance of the hearing.”

[100] I do not believe that my approach unreasonably subjects plaintiffs to being caught in the ‘Maisel’ trap. I think it is generally consistent with the approach at general law, illustrated by Maisel and Polly Peck, and also with [the] policy behind s 16(2) of the Act, that if defamatory material truly carries an imputation that swamps the plaintiff’s imputation and can be justified, the defendant should be able to rely on this, either as an outright defence or at least in mitigation of damages.

[101] Whereas Spigelman CJ accepts that the contextual imputation may differ in substance from that found by the jury, Ipp JA holds that the meanings of the two imputations are in substance the same. I have already indicated my disagreement with that. Furthermore, if it is right, it seems to me that the defendant could justify the plaintiff’s imputation by reference to other acts of dishonesty. Certainly this would seem to be so at general law, at least if the second proposition in Polly Peck is correct. That is, on Ipp JA’s view, there is an overall charge that the plaintiff is a dishonest broadcaster, and in so far as the plaintiff referred to a particular act of dishonesty, this would, on his view, be an inseverable part or aspect of this overall charge. Thus I agree with Ipp JA that, on his approach, the defendant could attempt to justify under s 15(2) of the Act, and the interstate defences should not be struck out.” (Emphasis added.)

62. As will be apparent, Ipp JA agreed with Hodgson JA on the matter of principle concerning whether a broadly expressed contextual imputation could be another imputation for the purposes of s 16(1). Neither judge embraced Spigelman CJ’s “differ in kind” proposition. [62]

    62. This also appears to have been the view of the primary judge who, in Liu v Fairfax Media Publications Pty Ltd [2013] NSWSC 7 (at [18]), observed that “the disparate processes of reasoning of the three members of the Court in [Jones] preclude the articulation of a single, neat proposition for which it stands.”

63. In Crosby, Rares J considered an application to strike out a defence of contextual truth advanced on the basis, it appears, both that the contextual imputations did not arise from the matter complained of, and were “too general”, I infer in the sense rejected by Spigelman CJ in Jones. [63] Crosby was governed by Ch 9 of the Civil Law (Wrongs) Act 2002 (ACT) which “mirror[ed] the reforms brought when uniform Defamation Acts were enacted by each of the States and Territories of the Commonwealth in about early 2006.” [64] Section 136 of that Act is in the same terms as s 26 of the 2005 Act.

    63. Crosby (at [14]). I draw that inference because Rares J considered Jones in some detail, in particular, Spigelman CJ’s conclusion that “a general contextual imputation cannot meet a pleaded more specific imputation under the 1974 Act”: Crosby (at [23]).

    64. Crosby (at [11]).

64. Rares J discussed the genesis of the defence of s 16 of the 1974 Act afforded, observing that it was “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.” [65] His Honour added that the effect of the defence was that “the plaintiff cannot now so confine, at will, the field of forensic battle by his or her choice of imputations complained of because of the statutory defence of contextual truth.” [66]

    65. Crosby (at [18]).

    66. Crosby (at [19]).

65. Rares J expressed the view that Spigelman CJ and Ipp JA’s reasoning in Jones was “of little assistance because the passage of the uniform Defamation Acts created a new legal framework in which the new statutory defences of justification and contextual truth work” and was “not binding on the construction of s 136”. [67] His Honour rejected the applicants’ submission that their imputations precluded the respondent from being able to rely on his contextual imputation for two reasons. First, he concluded that the matter complained of was capable of conveying the contextual imputation. Secondly, he found that the contextual imputation was not “the same as” the applicants’ imputations and conveyed “a different, and potentially broader, sting than the applicants’ imputations.” [68] His Honour’s approach to testing the legitimacy of the contextual imputation by comparing its sting to the applicants’ imputations reflects that Nicholas J adopted in Ange 2.

    67. Crosby (at [21], [23]).

    68. Crosby (at [25], [28]).

66. The primary judge in this case re-visited the “differ in kind” issue extensively in Bateman which, as I have said, was handed down after judgment was reserved in this case. On my reading of her Honour’s reasons, she somewhat moved away from the emphasis she had given to that “test” in previous decisions. [69] Her Honour rejected the submission the appellants rely upon in this case that the only requirement of a contextual imputation is “that it must meet the requirement of the rules that it differ in substance from the imputations relied upon by the plaintiff.” In her Honour’s view to state a test in those terms would, “equally, put a gloss on the terms of the section.” [70]

    69. Her Honour referred to her decisions in Liu; Tauaifaga v TCN Channel Nine Pty Ltd [2013] NSWSC 8; Kelly v Harbour Radio Pty Ltd [2013] NSWSC 9, but clearly the primary judgment in this case falls into the same class.

    70. Bateman (at [23]).

67. Ultimately, however, in her Honour’s view, the question was “whether a contextual imputation is reasonably capable of satisfying the terms of s 26(a) [a] … question [which] must be answered with an understanding of the purpose, and limits, of the defence, properly construed.” [71]

    71. Bateman (at [23]).

68. While her Honour concluded that Spigelman CJ’s analysis of the proper operation of the defence under the 1974 Act in Jones “was correct and held true for the s 26 defence,” [72] she concluded:

“[32] Perhaps there is less complexity in the authorities than the foregoing discussion suggests. Ultimately, the question is whether the defence as pleaded is reasonably capable of meeting the requirements of the section, properly construed. In accordance with s 26(a), one requirement of the defence is that a contextual imputation must be an ‘other’ imputation carried in addition to the imputations of which the plaintiff complains.

…

[35]   In my view, whether or not one wishes to adopt the language of difference in character or kind, it is clear that, on the proper construction of the section, an imputation which merely meets the technical pleading requirement of differing in substance from a plaintiff's imputation will not necessarily, for that reason alone, be capable of falling within the terms of s 26(a). Each case must be determined on its own facts. If the operation of the section otherwise defies precise explanation or prediction, that is a reflection of the fact that the tort of defamation is exquisitely concerned with the meaning of words, which (were it not for the discipline of the Civil Procedure Act 2005) could be debated endlessly.” (Emphasis added.)

72. Bateman (at [23]), referring to Jones (at [16] – [20], [33]).

Construction issue: conclusion

69. Accepting the limited use which may be made of 1974 Act authorities in construing the 2005 Act, I would nevertheless make the following observations.

70. First, I respectfully disagree with Spigelman CJ’s conclusion that a “differ in kind” test reflected the purpose of the defence of contextual truth. His Honour based this conclusion on the illustrations of the defect in the common law position identified in Plato Films Ltd v Speidel,[73] where “the two imputations were of a different character, rather than different levels of generality of the same allegation, e.g. the allegation of murder, theft and failure to attend church”. [74] However Plato Films did not resolve the question of the defence the text of s 16 afforded. In my view the purpose of the contextual truth defence is better expressed more broadly, namely that a plaintiff should “not be able to avoid serious stings in defamatory matter by selective pleading.” [75]

    73. Plato Films Ltd v Speidel [1961] AC 1090 (“Plato Films”) (at 1142).

    74. Jones (at [15] – [16]).

    75. Kermode (at [85]).

71. Further, to the extent Spigelman CJ referred to Hunt J’s decision in Allen, [76] his Honour did not refer to Hunt J’s acceptance in that case of the proposition that a general contextual imputation of a Maisel nature could be pleaded in defence to a specific plaintiff’s imputation even though they related “to the same subject matter” as long as they differed in substance. [77] That is, in effect, the approach Hodgson JA and Ipp JA each adopted in Jones, albeit without express reference to Allen.

    76. Jones (at [11] – [13]).

    77. See above (at [49]).

72. Accordingly, I respectfully disagree with those first instance decisions which have concluded that Jones held that s 16 of the 1974 Act required a defendant to plead contextual imputations which not only differed in substance from the plaintiffs’ imputations, but also “differed in kind”. To the extent that view relies upon the proposition that Ipp JA endorsed Spigelman CJ’s reasons, it is incorrect. Rather, Ipp JA agreed with Hodgson JA on the point of principle that a broad defamatory meaning will “ordinarily” be another meaning within s 16(1) of the 1974 Act. [78] Their Honours parted company on the question whether, as a matter of fact, the contextual imputation in that case satisfied that test.

    78. Jones (at [107]).

73. Further, with respect, I do not understand to what part of s 26 McCallum J was referring in Bateman when her Honour found that “on the proper construction of the section” a “differ in substance” test was not a sufficient exposition of the s 26 criterion. [79] To the extent if at all, her Honour’s statement leaves room for a “differ in kind” test as a free-standing criterion, I would respectfully disagree, for the reasons I have given. In my view the text of s 26 does not support that conclusion.

    79. Bateman (at [35]).

74. Accordingly, in my view the primary judge erred in striking out the default contextual imputations because there was not a “difference in kind” from the respondents’ imputations and because the “sting is … not of a different kind”. [80]

    80. Primary judgment (at [26], [28])

75. The respondents did not file a notice of contention contending that if the Court disagreed with her Honour’s reasons for striking out the default contextual imputations, her Honour’s conclusion should be upheld for some other reason.

76. Mr Dawson submitted that if the Court was of the view that the primary judge only disallowed the default contextual imputations on the “differ in kind” basis, then the respondents’ objection to the default contextual imputations was exhausted.

77. In my view it is sufficient to deal with this aspect of the case by determining whether the default contextual imputations are capable of being “other imputations” carried “in addition to” the respondents’ imputations.

78. The primary judge ultimately tested this issue not only by comparing the default contextual imputations to the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x), but also to their imputations 12(p) and 12(r). [81] The appellants challenged that approach, but in my view, the question can be resolved without deciding that challenge.

    81. Primary judgment (at [23] – [24]).

79. By way of reminder, the default contextual imputations were:

“the [first/second respondent] permitted Palace Films to default on its payment obligations to producers of Australian films”.

80. The respondents’ three imputations to which her Honour compared the default contextual imputations focussed specifically on three forms of default:

“that the [first/second respondent] is a hypocrite in that he purports to be the greatest supporter of Australian films while allowing Palace Films to dishonour distribution commitments by embarking upon a strategy of not returning profits to the producers of those films[;]

that the [first/second respondent] acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films[; and]

that the [first/second respondent] permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so.”

81. However, as the appellants submitted, in my view, the matter complained of referred to a wider field of financial default than that selected by the respondents. Critically, the matter complained of stated:

“[14]   Palace’s executive director, Benjamin Zeccola, says the company remains a great supporter of local films but its schedule of titles in production is barren. The reason, [15] according to more than 10 well-placed industry sources, is that Palace became so slow in returning profits to film producers that federal film funding agency the Film Finance Corporation blacklisted the company.

[16]   ‘Palace were not paying up,’ explains Brian Rosen, who was chief executive of the FFC when the decision was made two years ago and who has since returned to being an independent film producer.” [82]

82. The numbering in the quote reflects the paragraph numbers the respondents’ legal representatives placed on the matter complained of handed to the Court for the purposes of argument.

82. As I have said, the respondents did not contend the default contextual imputations were not capable of being carried by the matter complained of. I would understand that concession to be at least directed to accepting the default contextual imputations were capable of being carried by those passages of the matter complained of set out above. In my view, those passages were capable of carrying the default contextual imputations in addition to the respondents’ imputations to which the primary judge compared them.

83. An imputation of general financial default is capable of being substantially different from the specific instances of such default the respondents have selected. [83] One way of testing that issue is to determine what the party pleading justification or contextual truth would need to prove in order to justify the imputation. [84] That test can be satisfied even if the same evidence proves the truth of each imputation. [85]

    83. Cf Jones (at [99]).

    84. Singleton v John Fairfax & Sons Ltd (Supreme Court (NSW), Hunt J, 20 February 1980, unrep); Jones (at [61]) per Hodgson JA.

    85. Saint v John Fairfax Publications Pty Ltd [2002] NSWSC 312 (at [11] – [12]) per Kirby J Purcell (at [44] – [47]) per Kirby J.

84. It would, in my view, be open to a jury to conclude that the default contextual imputations differed in substance from the respondents’ imputations.

85. The primary judge erred in striking out the default contextual imputations.

Ruling on contextual imputations

86. In their notice of appeal the appellants raise the question whether it was appropriate to strike out contextual imputations at all in advance of a trial. This issue was addressed in their Supplementary Submissions. The appellants did not object to the primary judge hearing the strike out application and it would ordinarily be inappropriate to entertain such an objection on appeal. However, lest failure to consider the submission may set another hare running in the Defamation List, I would make the following observations.

87. The appellants first submitted that although the primary judge had struck out their default contextual imputations, her Honour had not struck them out where they were also pleaded as part of their Hore-Lacy [86] defence. As they remained as part of the defence, there was no utility in striking them out in another part of the defence. As the respondents submitted, this submission failed to take account of McCallum J’s decision in Bateman (No 2) where her Honour struck out the Hore-Lacey defence as not being applicable in this State. Her Honour’s decision was upheld by this Court in Bateman CA. If it has not already been struck out, I would assume the appellants’ Hore-Lacy defence will be soon. [87]

    86. David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; [2000] 1 VR 667.

    87. The defence as filed did not plead defences specific to publications in the other States and Territories. The majority decision in Bateman CA would now appear to make that necessary as its effect is that defences in this State differ from that, for example, in Victoria where Hore-Lacy defences are permitted: see Setka. Prior to hearing Bateman CA the Court notified the parties that the respondents in that case intended to contend that both Setka and Hore-Lacy were “plainly wrong” and should not be followed. The Court directed the parties to notify the Court by 30 April 2015 if they wished to supplement their submissions in light of the argument in Bateman CA. No such notification was received from either party.

88. Secondly, the appellants submitted that striking out the contextual imputations prior to trial was premature because it assumed that one or more of the respondents’ imputations would be found to be conveyed and defamatory by the jury. They also contended that the question whether the contextual imputations differed in substance from the respondents’ imputations was a matter for the jury, referring to s 22(2) of the 2005 Act and Setka. [88] They submitted that unless it was unarguable that the contextual imputations failed to meet the requirements of s 26, it was premature to determine, before trial, that an aspect of the defence should not be left to the jury.

    88. Setka (at [298] – [299]).

89. This submission should also be rejected. It is always a matter for the Court to determine the question whether, as a matter of law, a pleading is capable of satisfying a statutory requirement. That position is preserved by s 22(5) of the 2005 Act. It has long been held in this context that both the plaintiff and the defendant have to plead by anticipating how the jury may interpret the matter complained of. [89] Determining questions of capacity is essential to the efficient conduct of both jury trials and the trials generally, and to the Court’s obligations to ensure the just, quick and cheap resolution of the real issues in the proceedings. [90]

    89. Hepburn (at 398 – 399).

    90. Section 56(1), Civil Procedure Act 2005 (NSW); see also Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 (at [5] – [6]) per Hunt J; Lachaux v Independent Print Ltd [2015] EWHC 620 (at [2]).

Reasonable Grounds to Suspect

90. Mr Dawson acknowledged, on the capacity issue, that the matters complained of did not speak in terms of any suspicion held by any individual person or authority. However, he submitted, and the primary judge accepted that, as a matter of principle, there is no requirement that a “suspicion” imputation identify the person holding the relevant suspicion. [91]

    91. Primary judgment (at [40] – [41]).

91. Her Honour set out Kirby J’s statement of principle in Purcell and also referred to Greig v WIN Television NSW Pty Ltd. [92] However her Honour held that those authorities did not establish “that every article that is capable of conveying an imputation of guilt is also capable of conveying an imputation of reasonably-held suspicion [nor] that it is enough if the matter complained of excites suspicion in the mind of the ordinary reasonable reader. [93]

    92. Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118 (“Greig”); see [30] above.

    93. Primary judgment (at [43]).

92. Purcell arose from a press conference given by members of the Race Review Committee of the Cruising Yacht Club of Australia (the “CYC”) when handing down its report on the Sydney Hobart Yacht Race 1998. During the race, six crew members of the Sword of Orion had lost their lives in a storm. In the course of the press conference, journalists questioned Committee members about a report from the Sword of Orion that a passing yacht, the Margaret Rintoul II, had failed to respond to its distress signals during the storm.

93. Mr Purcell, the owner and captain of the Margaret Rintoul II, brought defamation proceedings against the CYC, its Commodore and two speakers at the press conference.

94. The defendants pleaded contextual truth, in particular the following contextual imputation:

“11(a) there were reasonable grounds to suspect, on the basis of the material before the committee investigating the 1998 Sydney to Hobart Race, that the First Plaintiff was guilty of gross misconduct in that he failed to stop and render assistance to the crew of a disabled yacht in the course of that race.”

95. The plaintiff sought to strike out that contextual imputation on the bases that it was defective in form in that it did not identify who held the reasonable suspicion and, in any event, was incapable of being conveyed by the matter complained of. [94]

    94. Purcell (at [18]).

96. Kirby J discussed the first issue in the terms set out by the primary judge. As his Honour emphasised, the issue must ultimately be determined by reference to the words published and whether, in that context, there was a need to identify the person who held the suspicion. [95] In Purcell, the matter complained of not only said that the CYC “had sufficient evidence of gross misconduct on the part of Margaret Rintoul II, in not going to the aid of the Sword of Orion, when dismasted, to refer the issue to the Protest Committee”, but also gave a graphic description of the conditions. In that context, the Commodore answered a journalist’s questions about the safety of a yacht trying to get close to a boat that was in distress, by saying he would be “speculating in terms of what the conditions were on Margaret Rintoul or the other boat as to whether that was an option that was available or in fact a safe or prudent option that was available to them.” [96]

    95. Purcell (at [29]).

    96. Purcell (at [30]).

97. In such circumstances, Kirby J applied the “undemanding” test for capacity, to hold the contextual imputation was not defective. It was in that context that his Honour made the statement upon which the appellants rely, which, in context, was:

“[31] The ordinary reasonable listener is assumed to be an intelligent and fair minded person. He or she is assumed to be capable of a certain amount of loose thinking. However, the test for capacity is undemanding. Although many listeners may recognise that the suspicion of misconduct depended upon the views of experts, others may not. On balance, I believe that the imputation is not defective in form. It does not require an identification of those who held the reasonable suspicion.”

98. As is apparent, this was a statement particular to the case, not a statement of general principle.

99. His Honour then considered an issue which does not arise here, namely the plaintiff’s submission that where the attack was by the CYC Investigating Committee and no-one else, a contextual imputation which presupposed a general attack was not capable of being conveyed.

100. In Greig, the matter complained of was a newspaper article that discussed the circumstances of a meeting between the plaintiff, the Deputy Mayor of Shellharbour City Council, and “private communication representatives”, and the plaintiff’s subsequent receipt of two Blackberry devices. It reported that “Questions [were] being raised” about the meeting and that the “ICAC did not deliver a finding, however suggested the issue instead be referred back before Council’s Code of Conduct Committee.” [97]

     97. Greig (at [4]).

101. The plaintiff pleaded two imputations each prefaced by the proposition, “the plaintiff conducted herself in such a way so as to give rise to the reasonable suspicion that …” [98] The defendant sought to strike out the imputations pursuant to UCPR 14.28(1)(b) as tending to cause embarrassment in the proceedings on the basis that “without identification of the holder of, or of the basis for, the suspicion, the imputations as formulated may lead to confusion”. [99]

     98. Greig (at [2] – [3]).

     99. Greig (at [5]).

102. Nicholas J rejected that submission, holding that the imputations specified the act or condition which the plaintiff claimed to be attributed to her by the matters complained of and which provided the basis for the reasonable suspicion that she had acted corruptly, “i.e.: that in handling a planned councillor technology upgrade for the Shellharbour City Council she accepted Blackberry devices from private communications representatives”. [100]

     100. Greig (at [10]).

103. Mr Dawson submitted that the primary judge’s conclusions that a “defamatory sting that a person is reasonably suspected of something must have its foundation in something to that effect stated or conveyed by inference in the matter complained of” and that “I do not think the articles are about the existence of a reasonably held suspicion” [101] misunderstood the nature of an imputation of objective suspicion.

     101. Primary judgment (at [43], [45]).

104. He contended that Purcell and Greig were authority for the proposition that a defendant can plead an imputation of there being reasonable grounds to suspect on the basis of conduct by the plaintiff, irrespective of whether any person in fact holds the suspicion and whether the matter complained of referred to the holding of such a suspicion.

105. I would reject that submission. Both Purcell and Greig concerned the question whether imputations which did not identify who held a “reasonable suspicion” were defective in form. In each case it was clearly arguable from the matter complained of that someone held such a suspicion. In Purcell the question whether the contextual imputation was defective was considered in circumstances where the matter complained of was a press conference about a Report under which the plaintiff was referred to the Protest Committee to investigate an allegation of gross misconduct on the part of the plaintiff. In Greig the imputations were pleaded in the context of the ICAC having been involved and referring the matter to the Council’s Code of Conduct Committee.

106. Kirby J made it clear in Purcell that the issue ultimately turned on the matter complained of. [102] It is clear that Nicholas J was of the same view in Greig because his Honour, as I have said, found each of the plaintiff’s imputations was grounded in the matter complained of.

     102. Purcell (at [29]).

98. As Mr Dawson accepted that the matters complained of did not speak in terms of any suspicion held by any individual person or authority, it was, in my view, open to the primary judge to find that the reasonable suspicion contextual imputation was not capable of being carried by the matters complained of. That was clearly the basis upon which her Honour struck out those imputations. [103] In my view her Honour did not err in so ordering.

    103. Primary judgment (at [45]).

Notice of contention

108. Mr Evatt sought to support the primary judge’s second ruling by contending that if a reasonable suspicion imputation was pleaded, it was necessary to identify the person making the accusation. This would have required the filing of a draft notice of contention for inclusion in the White Book. [104] This had not been done despite a direction by the Court of Appeal Registrar on 21 July 2014 that the respondents file and serve any draft notice of contention by 29 September 2014. When this was drawn to Mr Evatt’s attention, he orally sought leave to file a draft notice of contention.

     104. UCPR 51.13(4).

109. The Court refused that application. Mr Evatt gave no explanation for failing to comply with the Registrar’s direction. The Court should not condone a blatant breach of a direction intended to ensure the proper conduct of an appeal by granting such an indulgence.

Orders

110. The consequence is that the appeal should be allowed in part. Her Honour’s order striking out the default contextual imputations should be set aside, but the appeal should be otherwise dismissed. In such circumstances I am of the view the respondents should pay fifty per cent of the appellants’ costs.

111. I propose the following orders:

1. Grant leave to appeal;

2. Appellants to file the notice of appeal in the form of the draft appearing in the White Book at page 34 within seven days;

3. Appeal allowed in part;

4. Set aside order 1 made by McCallum J on 13 March 2014 insofar as her Honour struck out the appellants’ contextual imputations 19(a)(i), and (v), 27(a)(i) and (v) and 35(a)(i) and (v);

5. Respondents to pay fifty per cent of the appellants’ costs and have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise qualified.

112. MACFARLAN JA: I agree with the judgment of McColl JA.

113. SACKVILLE AJA: I have had the advantage of reading the judgment of McColl JA.

114. I agree that s 26(a) of the Defamation Act 2005 (NSW), as a matter of construction, requires that contextual imputations pleaded by a defendant differ in substance from the plaintiff's imputations. It is not necessary that they also differ "in kind". I reach this conclusion both for the reasons given by McColl JA and those given by Rares J in Crosby v Kelly.

115. If the Primary Judgment is read alone (that is independently of the other decisions of the primary Judge to which McColl JA refers), it is not necessarily obvious that the primary Judge required any more than a difference in substance between the appellants' default contextual imputations and the respondents' imputations. It is true that her Honour said that she was not persuaded that there was a "difference in kind" between the default contextual imputations and the respondents' imputations. But her Honour did not refer to the passage in John Fairfax Publications Pty Ltd v Jones that suggests that the difference must not only be "in substance" but also "in kind". On one view, the primary Judge's reasoning is consistent with an application of an "in substance" test.

116. However, McColl JA interprets the Primary Judgment as requiring that a contextual imputation differs both in substance and in kind from the plaintiff's imputations. With some hesitation, I accept that interpretation of the Primary Judgment.

117. I agree with McColl JA that it is open to a jury to conclude that the default contextual imputations differ in substance from the respondents' imputations.

118. I agree with the orders proposed by McColl JA.

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APPENDIX (86.7 KB, pdf)  |  text only version(60.1 KB, rtf)

Endnotes

Amendments

12 August 2016 - Amendment to paragraph reference in endnote 88.

Decision last updated: 12 August 2016