Fairfax Media Publications Pty Ltd v Zeccola

Fairfax Media Publications Pty Ltd and others (appellants) appealed to the New South Wales Court of Appeal against an order of McCallum J striking out certain imputations pleaded in defence of contextual truth. The plaintiffs had pleaded imputations concerning the appellants' failure to return profits, withhold returns, and dishonour distribution commitments. The appellants sought to rely on a defence of contextual truth, arguing that the publications also carried imputations of general financial default, which they contended were substantially true and mitigated the harm caused by the pleaded imputations.

The central legal issues before the Court of Appeal were whether the imputations relied upon for the defence of contextual truth, as provided by section 26 of the *Defamation Act 2005* (NSW), must differ in kind as well as in substance from the imputations pleaded by the plaintiffs. The court also considered whether the "differ in substance test" was a sufficient exposition of section 26, and whether the imputations pleaded by the defendants were capable of being "other imputations" carried "in addition to" the plaintiffs' imputations. Furthermore, the court had to determine if an imputation of "reasonable suspicion" could be pleaded in defence, particularly when the holder of that suspicion was not identified. Finally, the court considered whether it was appropriate to strike out these contextual imputations prior to trial.

The Court of Appeal held that section 26 of the *Defamation Act 2005* (NSW) requires that the contextual imputations must differ in substance from the imputations pleaded by the plaintiff, but not necessarily in kind. The court found that the "differ in substance test" was a sufficient exposition of the section. The court also determined that the imputations of general financial default pleaded by the appellants were capable of being "other imputations" carried in addition to those pleaded by the respondents. However, the court agreed that an imputation of "reasonable suspicion" where the holder of the suspicion is not identified is not capable of being pleaded as a contextual imputation.

The appeal was allowed in part. The order of McCallum J striking out certain of the appellants' contextual imputations was set aside. The respondents were ordered to pay fifty per cent of the appellants' costs, with a certificate under the *Suitors’ Fund Act 1951* (NSW) available if otherwise qualified.