Favell & Anor v Queensland Newspapers Pty Ltd & Anor
[2005] HCATrans 438
[2005] HCATrans 438
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B19 of 2005
B e t w e e n -
PAUL JOSEPH FAVELL
First Appellant
DIANA GRACE FAVELL
Second Appellant
and
QUEENSLAND NEWSPAPERS PTY LTD
First Respondent
JESSICA LAWRENCE
Second Respondent
GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HEYDON J
TRANSCRIPT OF PROCEEDINGS
AT BRISBANE ON MONDAY, 20 JUNE 2005, AT 2.20 PM
Copyright in the High Court of Australia
__________________
MR G.O’L. REYNOLDS, SC: May it please the Court, in this matter I appear for the appellants with my learned friends, MR R.J. ANDERSON and MR J.C. HEWITT. (instructed by Gail Malone & Associates)
MR R.A. MULHOLLAND, QC: If the Court pleases, I appear with my learned friend, MS D.C. SPENCE, for the respondents. (instructed by Thynne & Macartney)
GLEESON CJ: Yes, Mr Reynolds.
MR REYNOLDS: Your Honours, we have handed to your Honours’ tipstaves a copy of the relevant page of the appeal book which sets out the matter complained of with paragraph numbers. If your Honours could perhaps ‑ ‑ ‑
KIRBY J: I cannot hear you, Mr Reynolds. You are a long way down there.
MR REYNOLDS: Let me start again, your Honour. Your Honours’ tipstaves should have a copy of the matter complained of with numbered paragraphs, and if your Honours could have that document handy, together with a copy of our written submissions, that will make my task easier.
KIRBY J: I assume that the document itself, the photocopy of the newspaper, never came before the court?
MR REYNOLDS: That is correct.
KIRBY J: Why was that so, given that the cases all say that the layout, the presentation, the photographs, the composition, can all be relevant to this question?
MR REYNOLDS: Quite, and we would submit that is a matter that your Honour should fairly be raising with my learned friend, considering that it was his application to strike out the pleadings.
KIRBY J: Yes, but did you tender the page?
MR REYNOLDS: No.
KIRBY J: Then I can raise it with both of you. The cases are clear that these are relevant matters: where it is in the paper, what page, and what other things are surrounding it.
MR REYNOLDS: Your Honour, we do not dispute that. We seek to take advantage of it because that is part of our argument, that it becomes very difficult on a strike‑out to knock out a case altogether which depends ultimately on evidential issues where you do not have the key document in evidence. So it is not a matter of us seeking to get away from that; we rely upon it.
If I can make some preliminary comments about the matter complained of, in that regard could I remind your Honours briefly of some paragraphs in our submissions. If your Honours go to paragraphs 55 to 58, we refer there in particular in paragraph 56 to a fairly well‑known statement from the decision of the Privy Council in Jones v Skelton which talks about a situation where:
The reader, a jury might conclude, was invited to adopt a suspicious approach and so to be guided to the real explanation of what had taken place – an explanation which the writer of the [article] did not dare to express in direct terms.
As your Honours will have seen, we rely very much on that particular statement which has been quoted and applied frequently. We submit that this particular text is capable of being construed by a jury in that particular way.
GLEESON CJ: Could I ask you a question about the procedure that has been followed in this matter. The amended application is at page 33 of the appeal book and the orders made by Justice Helman appear at page 44. Justice Jerrard in the Court of Appeal held that there was a defamatory imputation conveyed by the matter. What happened about leave to replead?
MR REYNOLDS: The order of the Court of Appeal is on page 65. No one sought to upset from the Court of Appeal the order that we have leave to replead.
GLEESON CJ: Where is the order that you have leave to replead?
HEYDON J: Paragraph 3 on page 44.
MR REYNOLDS: By implication ‑ ‑ ‑
KIRBY J: You assert in your written submissions that effectively this puts you out of Court and is ‑ ‑ ‑
MR REYNOLDS: Subject to leave to replead.
KIRBY J: I saw leave to replead with a line through it somewhere. On page 33 to which the Chief Justice took you, paragraph 1 was “That paragraphs” so-and-so “be struck out, with leave to re‑plead”, and those words are lined through. So presumably what they were seeking was just that they be struck out and that there be no leave to replead. You would have had to seek to have the leave to replead in responding to that summons.
MR REYNOLDS: Can I respond to your Honour’s question in this way, that to date we are proceeding on the basis that we have leave to replead. That is probably derived, as your Honour Justice Heydon said, at least by implication from order 3 because that order suggests that a further statement of claim can be delivered. So, providing that any appeals are not instituted or disposed of, we can then file an amended statement of claim with such further imputations as we care to rely upon.
GLEESON CJ: I just wondered if that was something that the rules had something to say about and whether we could perhaps have a look at the rules under which this application was made and dealt with.
MR REYNOLDS: Your Honour, I may have to stand corrected on that but, as I understand it, the rules have nothing relevantly to say on that issue. It is just a matter of the normal practice.
GLEESON CJ: What was the rule under which the application was made?
MR REYNOLDS: That is not precisely clear because Justice Helman does not refer to a particular rule, nor does he ‑ ‑ ‑
KIRBY J: This is part of the problem. As Justice Gummow pointed out on the special leave application, it has proceeded – and many of these applications do – as if it is in a statute‑free zone. In fact, there is a rule and the starting point for the consideration of the law if there is a written law is the written law.
MR REYNOLDS: Quite.
KIRBY J: All these cases – repeating what Justice Hunt has said, instead of starting at least with the written rule, because it varies from State to State.
MR REYNOLDS: A little, your Honour. The rules essentially ‑ ‑ ‑
GUMMOW J: We are talking about the Uniform Civil Procedure Rules of 1999, are we not, in Queensland?
MR REYNOLDS: We are. Rule 171 is the relevant rule. Then of course there is the inherent jurisdiction of the Court to strike out a pleading on the ground that it amounts to an abuse of process.
GLEESON CJ: What does the rule or anything say if a pleading is struck out on that ground about leave to replead?
MR REYNOLDS: Rule 171 does not deal with that in terms, but the practice, as I understand it to be in this Court, as indeed I understand it to be in all of the superior courts, is that once a strike‑out is effected, the Court has a discretion as to whether or not to grant leave to replead. It would exercise that discretion basically considering whether or not the defects as held could be cured in an amended pleading.
GLEESON CJ: How did Justice Helman exercise his discretion?
MR REYNOLDS: It would appear that his Honour published a judgment which ends at page 43 and concludes, “I shall invite further submissions on the orders”, and then made the orders on page 44 which, as we have noted, implicitly allow the plaintiff to file a further statement of claim with fresh imputations.
KIRBY J: You say there is implicit a right to file a further statement of claim?
MR REYNOLDS: Yes.
KIRBY J: I would have thought that on the basis of an opinion by his Honour that no reasonable reading of the matter complained of could give rise to defamatory implications, that it is inherent in that conclusion that it is futile to allow you to replead.
MR REYNOLDS: That is inconsistent, we submit, with order 3 on page 44 at about line 27, which gives us leave to file a further amended statement of claim on or before a particular date provided that an appeal has not been instituted.
GUMMOW J: Is not the real point that there was no order made under rule 293, as Justice McPherson discussed at paragraph [22] in the Court of Appeal of his judgment?
MR REYNOLDS: There was no such ‑ ‑ ‑
GUMMOW J: In other words, no judgment for the defendant.
MR REYNOLDS: No, and at no stage ‑ ‑ ‑
GUMMOW J: There has been no judgment for the defendant but the plea has gone. You assume you can have another go.
MR REYNOLDS: Quite. More importantly perhaps, at page 44 at line 25, the application for judgment under rule 293 is dismissed. There was never any appeal from that, so that again suggests that the action is to continue on and if the defect as found in the statement of claim can be cured, then the action can proceed.
Can I deal then with the first of the meanings which we rely upon which are set out in our submissions at paragraph 11(b), which is a “reasonable suspicion” imputation. Your Honours will see from our submissions that the plaintiffs were reasonably suspected by the police of committing the crime of arson, which both the primary judge, Justice Helman, and the Court of Appeal found to be incapable of arising.
In the Court of Appeal Justice Jerrard looked at that imputation and in the end, if your Honours go to page 64 of the appeal book, found that a similar but slightly different imputation was capable of arising. If your Honours go to about line 12 of page 64, he says:
The critical innuendo which I consider is capable of being conveyed [is] that reasonable grounds exist for suspecting the Favells may have ultimately been responsible for causing the destruction of those premises –
As we said in our written submissions, there are only two differences between that particular meaning which Justice Jerrard found to be capable of arising and the meaning which my clients relied upon.
The first difference derives from Justice Jerrard’s use of the words “may have ultimately been responsible” which seeks, it would seem, to draw a distinction between someone that actually lit the match and somebody who procured another person to light the match. The problem, as we have pointed out in our submissions, with that difference being relied upon is that it is not a difference in substance because you are just as much guilty of arson if you procure somebody else to burn your house down as if you light the match yourself. So we submit, and the respondent does not seem to want to lock horns with us on that issue, that that difference is of no import at all.
The second and more important difference is that in Justice Jerrard’s formulation there is no statement that the suspicion is held by the police. So the question, we submit, becomes whether there is anything in the text of the matter complained of that is capable of suggesting that the suspicion that exists on reasonable grounds that the Favells are guilty of arson was one held by the police. We have said in our submissions, if your Honours go to paragraphs 17 and 18 of the matter complained of, that those paragraphs virtually say in terms that the police hold a suspicion. The arson investigation unit says that:
“All fires –
and I interpolate, including this one –
are treated as suspicious –
they hold a suspicion –
and we will follow all lines of inquiry” –
that is investigating.
KIRBY J: But it is a rather low level suspicion, is it not? It is only the suspicion that attaches to all fires, most of which are going to be innocent.
MR REYNOLDS: Possibly, but the point that is being taken against us is there is no suggestion that the police hold a suspicion. The point that I am making in response is those paragraphs are clearly capable of suggesting that the police, if a suspicion exists, in fact hold it. Again, this argument proceeds upon the basis that the imputation found by Justice Jerrard is capable of arising and we do not understand there to be any dispute about that.
What is more, if your Honours go to page 62 of the appeal book at about line 28, your Honours will see paragraph 8. Justice Jerrard found that this innuendo was capable of arising and that is:
that the two wealthy lawyers who were being investigated by the police –
So that is slightly inconsistent for his Honour to find that the article ‑ ‑ ‑
KIRBY J: Where are those words “investigated by the police” in the matter complained of?
MR REYNOLDS: Quite, and that presumably is upon the basis of there being some suspicion which attaches to the Favells, my point being that if the article is capable of suggesting that they are being investigated by police, it is capable of suggesting that the police hold a suspicion about them.
KIRBY J: At some stage, not necessarily now, I would be interested to know whether your submission is that it was impossible without defamation to have a report juxtaposing the burning down of the house, the existence of the dispute concerning the development application and the bringing in of the arson squad. Was it possible to report those facts, which at least arguably are matters of legitimate public concern or interest?
MR REYNOLDS: Can I answer your Honour in this way. The answer is perhaps that one would need to be very careful, extremely careful, and certainly the way those issues have been reported in this particular matter complained of do not achieve an innocuous publication of those particular facts. If I can move then to the second meaning, which is the ‑ ‑ ‑
GLEESON CJ: May I interrupt you again to ask you where we are heading. The pleader between pages 7 and 9 of the appeal book in paragraphs 19, 20 and 21 set out a large number of imputations. For example, the pleading proceeds upon the basis that there is a difference between saying that the plaintiff committed the crime of arson and saying that the plaintiff is an arsonist. You will find that in paragraphs (j) and (k) on lines 36 and 37 of appeal book 7. Justice Helman, apparently by implication with leave to replead, struck out the whole of paragraphs 19, 20 and 21. That order was upheld in the Court of Appeal. You simply invite us to set aside the orders of Justice Helman. Are we supposed to go through paragraphs 19(a) to (l) one by one?
MR REYNOLDS: No. Justice Helman at paragraphs [6] to [10] of his judgment – and we make this point at paragraph 11 of our submissions – explained why he proceeded in the way he did. What he did in essence was to review all of the imputations, take out the one about lying, put that to one side, and he said all of the other imputations are premised explicitly or implicitly upon the suggestion that the plaintiffs committed the crime of arson or they were reasonably suspected of committing that crime. He found that those two meanings or elements of the meanings were incapable of arising and, because they were common to all the imputations except the liar imputation, struck out all of them only on that basis, leaving imputation (i), the liar imputation, to be dealt with separately. He then dealt with that separately.
GLEESON CJ: What is the result of your success in this appeal if you succeed? That pleading is left standing in that form.
MR REYNOLDS: It is, but we would not dispute that if the respondent wishes to raise what might be called other pleading arguments in relation to the imputations that have been pleaded, that is other than those dealt with by Justice Helman and the Court of Appeal, then they would be free to do so.
GLEESON CJ: Where – here or where?
MR REYNOLDS: They are not free to do so here because they have not raised it by way of a notice of contention or put any submissions before your Honours as to some alternative basis for justifying the orders made by the primary judge or, for that matter, by the Court of Appeal. Those other sorts of matters, without going into them, were not raised before the Court of Appeal and have not been raised by way of notice of contention in this Court.
HEYDON J: What you are talking about I think is grounds 2 and 3 in paragraph [6] on page 42 of Mr Justice Helman. He says:
secondly, prolixity; and thirdly, the failure to plead alternative imputations as such.
In paragraph [11] he says:
It is not necessary that I consider the second and third grounds of the challenge –
because ground 1 was more extensive.
MR REYNOLDS: Quite.
HEYDON J: So what you are saying is if you succeed here, the defendant can make a further application in relation to those two grounds on the basis they have not been dealt with.
MR REYNOLDS: Quite, but it would not be an abuse of process for them to file a fresh application seeking to strike out the imputations on those bases.
HEYDON J: Or some of them.
MR REYNOLDS: Or some of them or perhaps additional ones.
GLEESON CJ: Should we remit the matter on the basis that there were arguments against the form of the pleading that were not dealt with in the Supreme Court?
MR REYNOLDS: Your Honour, it is probably unnecessary for that because we have been granted, subject to any right of appeal, leave to replead. If I can say this, I would anticipate that if this appeal is successful that my clients would wish to replead and do a little bit better job with the meanings that have been pleaded.
KIRBY J: I hope a briefer job too. I mean, burning down the contents, burning down the house. Why does this happen? I realise that this Court has said the imputation is the defamation and that has led to this rather unfortunate development, but it is a very boring pleading.
GUMMOW J: It is a development that started in New South Wales, I think.
KIRBY J: It began in New South Wales by statute and then it has sort of been spread from there by the common law into other States instead of, as used to be the law in Queensland, that you just rely on the document.
MR REYNOLDS: We say it still is, as your Honours will have noticed from our submissions.
KIRBY J: It would be no bad thing if it were instead of all of this boring pleading.
MR REYNOLDS: With great respect, no doubt my clients will be emboldened to hear your Honour say that. We have put the submission in paragraph 18 of our submissions where we point out in substance that the practice when this Code was the law in New South Wales from 1958 to 1974 when some of your Honours practised in this area, the practice was that a plaintiff was not tied completely to the pleaded meanings and yet there is a suggestion in a recent case here that somehow for some reason that position has been changed.
GUMMOW J: That is Robinson v Laws, is it?
MR REYNOLDS: Quite. It is perhaps an issue that arises at a very low level in this case because we would submit that your Honours ultimately will not have to decide that because we will be able to show that these imputations are capable of arising without having to rely on this reserve parachute, if I can put it that way, in paragraph 18 – in other words, relying on some other form of meaning upon the assumption that our pleaded meaning does not quite get there, if I can put it that way.
I apologise for not making clear to your Honours exactly how I was proceeding, but I would assume that from paragraph 11 of our submissions your Honours would understand why I was directing myself immediately to these three forms of imputation. I have dealt with 11(b). Can I deal with 11(a) which is that the plaintiffs committed the crime of arson. If your Honours go to our written submissions to paragraphs 71 and 72, your Honours will see that we rely upon some statements there in cases in this area.
KIRBY J: Those words “in this area” are pregnant with meaning because this brings me back to what Justice Gummow said on the special leave. Why is not the correct legal starting point what the governing law in the form of a rule was in respect of an application to strike out the pleading ‑ ‑ ‑
MR REYNOLDS: Your Honour is, with respect ‑ ‑ ‑
KIRBY J: ‑ ‑ ‑ instead of all these things that judges have said addressed to different pleading rules or practices?
MR REYNOLDS: Can I answer your Honour in this way. Of course your Honour is correct. Logically the anterior question in this appeal is for your Honours to work out ‑ ‑ ‑
KIRBY J: Yes, but if we teach that, that is not a bad thing to teach in an appellate court, that if there is a written law as usual, then it is not surprising you start with a written law, the rule.
MR REYNOLDS: One does. The difficulty is that, as your Honours appreciate, there are all sorts of different interpretations that have been placed upon that rule and the inherent jurisdiction to strike out. I have an hour to address your Honours and I want to submit ultimately that this case will not depend ultimately for its resolution upon a decision by your Honours as to which precise test should be applied on a strike‑out. What I want to suggest is that on whatever tests your Honours apply, my clients succeed. Lest I not cover the possibility that your Honours will think that ultimately the case depends upon a precise resolution of the appropriate test, I am going to deal with that towards the end of my submissions.
KIRBY J: That is always the problem. The Bar loves the common law, loves what judges say, hates what Parliament, the rule makers, say. The correct legal place to start is the written law. Justice Gummow made this point in the special leave and I agree entirely with it. Until judges start doing that, they are likely to get things upside down.
MR REYNOLDS: I am in your Honours’ hands. If your Honours want to ‑ ‑ ‑
KIRBY J: You proceed in the usual old way, trot out what Justice X said and Justice Y. It does not seem to me the correct legal way.
MR REYNOLDS: I will be taking your Honours to the rule in due course, if I may put it that way. If I deal then with this arson imputation, your Honours will see from paragraph 71 that if the Court is of the view that the pleaded words are capable of suggesting the “reasonable suspicion” imputation, then the question will then become whether there is anything in those words which is capable of suggesting that that suspicion is well founded. We refer to the oft‑quoted statement of Lord Devlin in paragraph 72 that “Loose talk about suspicion can very easily” – we underline those words – “convey the impression that it is a suspicion that is well founded.”
We would submit that those words are a fortiori first, where a suspicious approach has been invited; secondly, where the question is whether the imputation is capable of arising, not whether it in fact arises; and thirdly, where this issue arises on a strike‑out. If your Honours go to page 62 of the appeal book, your Honours will see in about the middle of the page a series of numbered paragraphs, where Justice Jerrard reproduces, in some form at least, some of the submissions that were made to the Court of Appeal about the various innuendoes or implications that were capable of arising. Your Honours might place perhaps a tick next to Nos 5, 7, 8 and 9 and that is because in the following paragraph Justice Jerrard in substance said that each of those implications was capable of arising.
My submission is this, that those four implications certainly taken together are capable of suggesting that the suspicion is well founded. The first of them is, I would submit, enough probably on its own to reach that point. That is No 5:
that the Favells had a motive for arson, namely to eliminate their neighbours opposition to their development application;
I submit that a statement as to motive for committing the crime is easily capable of suggesting that suspicion of that crime is well founded. Likewise with No 7 there on the same page, which is perhaps a little bit inelegantly expressed, which may be my fault, the point that is being made there is that the matter complained of is capable of suggesting that whoever lit the fire is likely to have been given security access by the owners because the fire was started internally by someone who was able to permeate the very tight security. That is the second matter which we submit is capable of suggesting the suspicion was well founded. The third is No 8, which is a reference to a perfect alibi which the Favells had. The fourth is No 9:
that the fire had occurred in conjunction with a set of extraordinary circumstances, namely that the –
minders for some unexplained reason were not present there at 4.00 am on the particular night. Now, my point, shortly stated, is that when one takes each of those matters which are not disputed by the respondent, they are cumulatively capable of suggesting that the suspicion is well founded. We add to that two matters. They are matters in that list, Nos 10 and 6, which your Honours might put a cross against because they were rejected by Justice Jerrard. No 10 is:
that Mr Favell’s sister –
that is incorrectly recorded there, it should read “Mr” rather than “Mrs Favell’s sister” –
did not wish to be associated with what had occurred –
If your Honours go to paragraph 8 of the matter complained of, you will see that ‑ ‑ ‑
KIRBY J: It was Mr Favell’s sister, was it not?
MR REYNOLDS: It was, and that is made clear by paragraph 8. It is said “that she did not ‘wish to be identified’”, which we say is capable of suggesting that she did not want to be associated with what had happened. It was, after all, the cousins – that is made clear from paragraph 6 – who were minding the house. More importantly though is No 6, which provides an overlap between this meaning and the liar meaning. No 6 reads:
that Mrs Favell lied when she was challenged in relation to a motive for committing arson;
Now, I will deal with that as the next imputation, but the point that I make at the moment is that if one of the suspects tells a lie in relation to her motive, then that is capable of suggesting that the suspicion which attaches to her is well founded. So we say ultimately that there are six matters in these implications from this matter complained of which are capable of arising which are capable of suggesting that the suspicion which Justice Jerrard agrees with is well founded.
That leaves me only to deal with the third and final imputation, which is the imputation that the plaintiff is a liar. I had better state that more accurately. The imputation stated in paragraph 11(c):
[the plaintiff wife] lied about neighbourhood reactions to the proposed development ‑ ‑ ‑
McHUGH J: But you do rely on the first one, do you, “the plaintiffs committed the crime of arson”?
MR REYNOLDS: Quite.
GLEESON CJ: That is what you mean by “well founded”.
MR REYNOLDS: That is the argument about “well founded”. I am sorry, I have just been addressing your Honours for five minutes on that imputation.
GLEESON CJ: You do not disagree with Justice Jerrard’s conclusion that it carried the imputation that your client was reasonably suspected of procuring arson, but you say it carries the further imputation which was that your client was correctly suspected of procuring arson.
MR REYNOLDS: We disagree with Justice Jerrard that that is relevantly the only imputation that is conveyed. What I do is focus on the difference between his Honour’s imputation and a reasonable suspicion by the police imputation ‑ ‑ ‑
GLEESON CJ: But you go further than him. You say this article carries the imputation that your client is guilty of procuring arson.
MR REYNOLDS: Not at all, because your Honour is saying ‑ ‑ ‑
GLEESON CJ: What do you mean by a well-founded suspicion if you do not simply mean a reasonable suspicion?
MR REYNOLDS: I am sorry, I am picking up on your Honour’s use of the language “carries the imputation”. What I suggest is that this text is capable of conveying the imputation. I am sorry, I hope your Honour does not think I am being pedantic ‑ ‑ ‑
GLEESON CJ: You say it is capable of conveying the imputation that your client is guilty of procuring arson.
MR REYNOLDS: Quite.
GLEESON CJ: And that is the step beyond Justice Jerrard’s conclusion that you go.
MR REYNOLDS: Quite, because to jump from suspicion to guilt I have to show that there are some things capable of arising from the article which are capable of suggesting that the suspicion is well founded, and I point to ‑ ‑ ‑
McHUGH J: I do not know why you keep talking about suspicion in this context insofar as the first imputation is concerned. I would have thought that your case is that here you have a multi-million dollar house which is going to be redeveloped to have on it a five-storey block of units. It is the subject of a hostile reaction by neighbours, public protest meetings about it are going to be held. Your clients fortuitously happen to be overseas. The people who are minding the place fortuitously happen to be away that night. It has such security that the fire brigade are hindered in attempting to get into the place. The fire starts at 4.00 am. The wife lies when she says that the neighbours are happy about the plans. Given all that context, an ordinary reasonable reader would say, “Of course they did it and they have put somebody up to it”.
MR REYNOLDS: And that is the way we put it to a jury, but I did not want your Honours to think that there was any correlation between your Honours and a jury, and that is why I have perhaps put it – and I accept the criticism ‑ ‑ ‑
KIRBY J: Well, ultimately, we have to consider whether this is a matter that should go to a jury or was capable of being decided by a jury favourable to the sorts of considerations that Justice McHugh was mentioning.
MR REYNOLDS: Quite.
McHUGH J: I suppose you can add one further factor, that the police have not yet ruled out arson.
MR REYNOLDS: Well, more than that. The arson unit regarded it as suspicious. There are further things in there.
McHUGH J: No, but they regard all fires as suspicious until the contrary is proved ‑ ‑ ‑
MR REYNOLDS: Again, it is the arson unit that is there, not the ‑ ‑ ‑
McHUGH J: ‑ ‑ ‑ as a matter of practice, but as at the time when this article was published the contrary had not been proved as far as they were concerned.
MR REYNOLDS: It all adds to the flavour and the suggestion seems to be that the fire started internally in a house, the security of which was extremely difficult to permeate – that is another aspect. Then there is the financial incentive of being able to eliminate this opposition of the neighbours because they can then build the block of units.
GLEESON CJ: I have not followed that.
MR REYNOLDS: Well, if the opposition to development in the area from the neighbours is based upon keeping this old house, then ‑ ‑ ‑
GLEESON CJ: I missed that. Where does that appear?
MR REYNOLDS: It is not in terms, your Honour.
GLEESON CJ: What if it is based upon objecting to have a block of home units there?
MR REYNOLDS: Well, that is no doubt the other side of the objection, which could be twofold.
GLEESON CJ: I do not see anything in this article at the moment that indicates that the development application will be facilitated by the disappearance of the house.
MR REYNOLDS: Well, if your Honour goes to paragraph 14, it is said that:
“No, the meeting –
that is, between the objecting neighbours –
won’t go ahead now. It’s all gone.”
That suggests that their concern was to keep the old home there.
GLEESON CJ: So this was a heritage issue, was it?
MR REYNOLDS: Well, it does not say that, but that is the ‑ ‑ ‑
McHUGH J: Well, they say they wanted to keep the character of the street, as it was. That was why they were objecting.
MR REYNOLDS: Yes, and not wanting these blocks of units ‑ ‑ ‑
McHUGH J: They talk about:
The ambience of New Farm is being destroyed because of all these units going up.
MR REYNOLDS: Quite.
KIRBY J: But the destruction of the old house would not change the development approvals from domestic residential to home units, would it?
MR REYNOLDS: But it eliminated the neighbour’s opposition and it may be – we do not know – that one of the reasons why the development may not have gone through was ‑ ‑ ‑
McHUGH J: This is where you have to rely on the loose thinking of the average reader.
MR REYNOLDS: As your Honour knows, one does not put that to the forefront of one’s argument but ultimately ‑ ‑ ‑
McHUGH J: Why?
MR REYNOLDS: ‑ ‑ ‑ I will be reminding your Honours of that. That is what is known in this Court as the vibe of the article. Your Honour Justice McHugh, with respect, is quite correct. I have put the argument to your Honours in an overly analytical way and your Honour reminds me of how much more simply it could be put to a jury, but breaking the various steps up ‑ ‑ ‑
McHUGH J: But that is the way you have to look at, is it not, the way a jury would look at it, as to whether there is a case to go to the jury?
MR REYNOLDS: Yes, one relies on that ‑ ‑ ‑
McHUGH J: You do not sit down and analyse these things to the nth degree sitting back.
MR REYNOLDS: Except for this, your Honour. If one can show that adopting a highly analytical approach the imputation is capable of arising, one does not have to rely really on loose thinking at all and one can then add the submission which your Honour has reminded me of, and that is that if one allows for loose thinking you would simply point to the nuances raised – the impressions raised by these various matters in the article, which is more the way one would address a jury in a matter like this.
If I can go then to the final imputation, which is the liar imputation, which is set out at paragraph 11(c). This is a little more complex, so I will take up I hope only a fraction more time with this. We put this essentially two ways. The first is deliberately creating a misleading impression that the neighbours generally were happy about the development. The way we suggest that is capable of arising is by reference to three things: first of all, the impression that the neighbours generally were happy. If your Honours go to paragraph 17, there is a question asked of Mrs Favell in general terms:
Asked about the reaction from neighbours –
that is, neighbours generally –
to the application for development on the property Ms Favell said: ‘We provided copies of the plans to both neighbours and they were fine about it’.
Now, we submit that that paragraph is capable of conveying the suggestion that this was an impression created by Mrs Favell that the neighbours generally were happy about the development. Can I give your Honours perhaps an example to make my point. If on a form someone was asked, “Are your children healthy?” and the reply was, “Both of my daughters are healthy” when the four sons had typhoid, I would submit that statement is easily capable of creating a misleading impression. So here there is a general question asked in relation to neighbours generally and the answer that is given uses the word “both” which could easily create the misleading impression that the neighbours generally are fine or happy about the application.
The article, secondly, is easily capable of suggesting that that answer is misleading because if your Honours go to paragraphs 9 to 14, those paragraphs talk about the dissent in the area, the protest meetings, none of the neighbours being happy and the strong ‑ ‑ ‑
KIRBY J: And in paragraph 2 that the owners of the house had put in the application to build a five-storey block of units. So that is the context in which this has been ‑ ‑ ‑
MR REYNOLDS: Quite, and the impression clearly from paragraphs 9 to 14 is that the neighbours generally are unhappy about this particular development.
McHUGH J: But you have to rely on a capacity for readers to be loose thinking because, first, a reader looking at this analytically would say, “Well, if they burnt it down, it wasn’t going to advance their cause very far. The opposition is to units being built on the site and the fact that the house is down doesn’t advance that in any shape or form.” Secondly, a reader might say, “Well, it looks as if Mrs Favell was distressed. She said they are devastated and they are flying home as quickly as possible.”
MR REYNOLDS: Can I deal with the matter your Honour first raised, and I have dealt with it before. Paragraph 14 indicates that the basis for the neighbour’s objection was that they wanted to keep the house there as it was. “Now that the house has gone they are not going ahead with the meeting”, which suggests, or is capable of suggesting, that their opposition has evaporated. Now, that suggests that the operative cause of their opposition is the desire to keep the ambience of the area, that is, keep that particular building there, and now that it has gone they are no longer concerned. Certainly the paragraph is capable of suggesting that.
If your Honours look at this notion of creating a misleading impression, the question and answer are capable of being construed that way. It is clear that it is misleading because the neighbours generally, from paragraphs 9 to 14, are against the development. The only issue really is whether or not there is any material in the article which is capable of suggesting that Mrs Favell would be aware that the neighbours generally were against the application.
KIRBY J: Yes, but if she in fact said this and in fact the neighbours had made a protest, why should that be incapable of being said without defamatory imputation? I mean, it is the truth of the matter.
MR REYNOLDS: Your Honour, I am trying to put an argument that a misleading impression was created. I look to the impression that was created. I say that it is misleading. For an imputation that she is a liar to arise, I have to show some material which is capable of showing that she appreciated ‑ ‑ ‑
KIRBY J: I suppose your answer to my question is, “Well, that is exactly the sort of thing a jury has to sort out and they ought to have the opportunity to do this, and judges should not, except in clear cases, usurp to themselves a decision that takes it away from the constitutional tribunal.”
MR REYNOLDS: Quite, because I can show on a strictly logical basis how these matters arise, and if I can do that I do not even have to resort to loose thinking or a general impression or the like because I am already there as a matter of strict construction of this article, which is the way I am trying to put it to your Honours, to appeal to your Honours as judges rather than jurors. So I am breaking this first way of getting to this meeting up into three steps and I have reached the third step, which is that there is material capable of suggesting that Mrs Favell knows that the neighbours generally are unhappy about the development.
Before I take your Honours to some specific parts of the text which is capable of conveying that, could I say a couple of things. The first is that where, as we see here from paragraphs 9 to 14, there is wholesale opposition from neighbours to a development and where it is the subject of a formal development application, I would submit that an ordinary reader would think it very likely that if there is wholesale opposition from the neighbours then the owner would be aware of that. If you have a development application, you live in the area and you have put in your development application to the council or what have you, most people would think that if there was wholesale opposition from the neighbours to that you would be aware of that at some level.
Secondly, if your Honours go to page 62 at line 23, your Honours will see No 5, which your Honours have probably ticked, wherein Justice Jerrard says that the article is capable of suggesting:
that the Favells had a motive for arson, namely to eliminate their neighbours opposition –
If your Honours just focus on those words for a moment which Justice Jerrard says are capable of arising, it is at least implicit in that paragraph that Mrs Favell is aware of the neighbours’ opposition because if she has a motive for arson, namely to eliminate the opposition, that assumes that she is aware of it. So Justice Jerrard’s reasoning, we say, is at least consistent with the idea that the article is capable of suggesting that Mrs Favell knows generally about the opposition from neighbours.
Now, as to the precise portions of the text which suggest that Mrs Favell is aware of general opposition from neighbours to the development, can I point your Honours first of all to paragraph 10, where it is stated that none of the neighbours are happy; to the second leg of paragraph 1, which says that the development application is controversial, which suggests that there has been some form of prolonged publicly‑stated opposition of which the neighbours are likely to have been aware; thirdly, in paragraphs 9, 12 and 14 there is reference to a planned meeting, which is capable of suggesting that there had been some form of communication between those in the area, by circulars or advertisement or the like, of which the owner would be likely to be aware; fourthly, there are paragraphs 9 to 14, which, we submit, are capable of suggesting that the neighbours in the area are vocal in their opposition and highly condemnatory of the development; and finally, paragraph 11, which suggests that the building of the units has previously caused controversy in the area of the kind which a neighbour like Mrs Favell would be likely to have been aware.
Your Honours, the bottom line is this: when one has regard to all of those matters, an ordinary reasonable reader is unlikely to come away from reading this particular text thinking that Mrs Favell would have no knowledge that the neighbours generally were opposed to her development. Now, if that is the case, that is, she knew that neighbours generally were opposed to the development, to answer that question in that way, that is, a general question about the reaction of neighbours generally, she says “both neighbours . . . were fine about it”, creates a misleading impression that the neighbours generally were fine about it when she knows that that is not right.
GLEESON CJ: Putting the third imputation to one side for the moment ‑ ‑ ‑
MR REYNOLDS: The liar?
GLEESON CJ: ‑ ‑ ‑ yes – whichever way you turn, your argument depends upon the proposition, or the assumption, or the implication, that the occurrence of the fire would facilitate the proposed development.
MR REYNOLDS: May.
GLEESON CJ: May.
MR REYNOLDS: Capable of suggesting that it may.
GLEESON CJ: Why should that be? Why does it help you get a block of home units built on your land to have your house burnt down?
MR REYNOLDS: Because it depends what the source of the opposition is. The source of the opposition may be unilateral or there may be two aspects to it. There is an indication here in the article that the principal source of concern on the part of the neighbours is to keep this old residence here. So if you can eliminate their opposition based upon keeping that old building there, then you are in a rough sense halfway there. On the other hand, those who are not particularly concerned about whether you knock over the old building and perhaps build a new two-storey residence but whose real concern is the building of units, their opposition may not be eliminated. But the fact that this article says that “the meeting won’t go ahead now”, that is, the meeting between those who are opposing this development, suggests that the principal, perhaps the only, source of concern was that they wanted to preserve this old building.
Now, I am trying to put that in response to your Honour the Chief Justice in a logical way. Of course, as your Honour Justice McHugh has reminded me, the ordinary reasonable reader, reading this probably only the once, in getting a general impression and having some looseness of thinking about the analysis, might well think of it in some ways even more obviously that the neighbours’ opposition had been eliminated by burning the house down. Why? Because the impression one gets is that there was a lot of vocal opposition and now that the building had been burnt down the opposition has evaporated and the mission in effect has been accomplished. That is more the impression ‑ ‑ ‑
McHUGH J: That is why I said to you you have to rely on some loose thinking, that you cannot rely on a reader who goes about this in a careful, analytical way and says, “Well, their cause isn’t necessarily advanced very much, and probably isn’t advanced very much, simply by burning the place down. They still have to get approval to the development application.” But you have to rely on the fact that it appears from the article that to a casual reader that the game is over now because the meeting is not going to go ahead and the opposition has been effectively sidetracked or derailed.
MR REYNOLDS: That is the looser way of approaching it but, again, I would submit, even as a matter of logic, the dominant of the two principal motives that are touched on here seems to be to preserve the old building and it is said that the neighbours’ opposition in effect evaporated once it had been burnt down.
GLEESON CJ: I thought you might have been going to put a quite different argument. I thought you might have been going to put that the author of the article and the publisher of the article evidently thought there was some connection between the fact of the fire and the fact of the development application, otherwise why mention the two together? What is the relevance to the information about a fire of a development application?
MR REYNOLDS: Quite, and once one touches on this topic of a development application and a fire and the arson investigation unit and it is embellished and tweaked up in the way this particular article is, the combination cumulatively of all of those things creates a general impression. I do not resile from an argument based more generally upon the impression created by the article – indeed, I rely on it. I am trying to appease what I assume to be your Honour’s desire for some logical interpretation of the text to give your Honours ‑ ‑ ‑
GLEESON CJ: I think amongst the various adjectives that are thrown in on this, one of them is “fair‑minded”.
MR REYNOLDS: Right at the end of the line though, your Honour, we have an ordinary reasonable ‑ ‑ ‑
GLEESON CJ: No, not avid for scandal is the one right at the end of the line.
MR REYNOLDS: Yes, but that is the jury’s issue.
GLEESON CJ: Of the various resorts for the desperate.
MR REYNOLDS: No, reasonableness does not come in until right down the end of the line, not here now, and that is ‑ ‑ ‑
KIRBY J: Yes, but why does it come in? This is a fiction that is invented by judges to make them feel more comfortable in making decisions which they take upon themselves and then blame on this reasonable, ordinary, not too clearly thinking reader, who – Justice Helman seemed rather dismissive when he said, “Well, we are told that this is a person who has a knowledge of worldly affairs”. But why do we think in those terms? Why do we not think in terms of your right, prima facie, unless it is a very clear case, to have the matter passed upon by a jury of fellow citizens? Why invent this fiction and then keep sticking to it and adding little elements of personality to it as every new case comes up with some new purported feature?
MR REYNOLDS: Your Honour, as I said to the Chief Justice, we do not seek to escape from the ultimate test which has existed for a very long time, this notion of an ordinary reasonable reader ‑ ‑ ‑
KIRBY J: I know it has, but that does not mean that – we have a case that Justice McHugh, reading the special leave hearing, did not seem very keen to give you special leave in this case. You had to really work hard to get it because of the way these cases are always so divisive. Judges disagree, probably because of different starting premises about your right.
MR REYNOLDS: The point that your Honour is getting at is one that we have dealt with in our submissions at paragraph ‑ ‑ ‑
KIRBY J: Not very much. It is more really in the respondents’ submission, where he refers to the developments of the law in England – Lord Woolf saying that Chief Justice Barwick overstated it in the General Steel’s Case, at least so far as the law of England is concerned, and that really we turned it on its head. We have been inventing this reasonable person instead of talking about the need for a very, very clear case to keep you from having a jury of citizens as distinct from a wise old judge pass on the matter.
MR REYNOLDS: Your Honour, I would say that is precisely the issue we have raised in those paragraphs, from 23 following, of our submissions. What has happened – and I do not have the time to go into this, but your Honours may want to have a look at it. If your Honours look at this test from Farquhar v Bottom which was applied in this case and look at the passages in the Marsden Case, which we have referred to in our submissions, your Honours will see that there is a slide from a strict analysis such as this Court engaged in Naxakis about whether there is a case to go to the jury to an easier test for defendants, namely, whether or not the article is reasonably capable of conveying the imputations.
Now, the slide is not quite apparent from the statements in Farquhar v Bottom; it is more apparent in Marsden, but where it is apparent in the judgments in this case is in various passages wherein Justice Helman in particular proceeds to give his opinion as to what meaning is conveyed by the article rather than looking at whether or not a jury could properly conclude that the meaning was conveyed which, we submit, ultimately depends upon whether the evidence was such – I withdraw that – where we submit that there would be evidence to go to a jury, unless the evidence was such that no reasonable jury could come to the conclusion that the imputation was conveyed.
Now, in the light of what your Honour Justice Kirby is putting to me, I do submit that there is too much water under the bridge for me to challenge the test of an ordinary reasonable reader, and I do not, but what I do suggest is that if your Honours look at this test of if there is a case to go to the jury and look at the way some of the judges have approached it, your Honours will see that there is this creeping feature to which I have referred, which has perhaps crept in particularly to Justice Helman’s treatment of this issue. Your Honours, I am in the unfortunate position that I have now taken up more than my fair share of time ‑ ‑ ‑
GLEESON CJ: Do not worry about that. We have now got back to the position where we started. Rule 171 says that the basis for striking out the pleading in this case must have been that it disclosed no reasonable cause of action.
MR REYNOLDS: Quite.
GLEESON CJ: What is your submission as to whether Justice Helman, in applying that rule, had to ask himself a question of the General Steel kind or a question of law of a kind that a trial judge at a defamation case would have to rule on when defence counsel was suggesting that it should not get to the jury?
MR REYNOLDS: Well, I submit, if I can put it in two propositions with a third as a possible qualification on that. I submit that the test applied by Justice Helman, which Justice Jerrard and Justice Philippides agreed with, which is the test from Farquhar v Bottom, which is a test of whether an issue should go to a jury, I would say that is wrong in two respects at least.
The first is that it makes no allowance for the high degree of certainty required before a strike‑out can occur. In that regard, we rely quite heavily upon a statement of Justices Gaudron, McHugh, Gummow and Hayne in a decision of Agar v Hyde (2000) 201 CLR 552, in particular, at paragraph 57 from pages 575 to 576. Your Honours’ tipstaves should have a photocopy of the relevant pages. Your Honours will see that there is a reference at the bottom of page 575 to:
a court . . . should not decide the issues raised . . . in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way . . . The test to be applied has been expressed in various ways –
and there is a footnote reference to Dey’s Case and General Steel –
but all the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
So the proposition I am advancing here is that a judge dealing with a strike‑out has to reach a high degree of certainty about the ultimate outcome of the trial at the trial, that is.
Now, if your Honours look at Justice Helman’s judgment and Justice Jerrard’s, with whom Justice Philippides agreed, there is no reference to their Honours attaining that high degree of certainty, whatever degree it is, which is required before a strike‑out can occur. That is the first matter. The second matter which is closely related to this, and it is the matter that your Honour Justice Kirby raised with me first up in this case, which is that their Honours at first instance and in the Court of Appeal, and I might add, notwithstanding argument on this point, have made no allowance at all, on the issue of certainty or strike‑out, for the extent to which the evidence at the trial, that is, the article in the newspaper, may affect the determination of the issue. So they are the two problems ‑ ‑ ‑
KIRBY J: But it would have been open to you to tender the matter complained of in its pristine form, and if you did not do that, why would not one assume that there is nothing in that?
MR REYNOLDS: With very great respect, only an incompetent counsel would do that because it would ‑ ‑ ‑
KIRBY J: In a pure strike‑out? This is life and death.
MR REYNOLDS: It would deprive his client of an argument when he is not the moving party ‑ ‑ ‑
KIRBY J: Save it up for the Court of Appeal.
MR REYNOLDS: It is not a matter of saving it up, your Honour, the ‑ ‑ ‑
KIRBY J: Save it up for the High Court.
MR REYNOLDS: That is effectively what has happened.
KIRBY J: We do not have enough to do. It does not seem sensible.
MR REYNOLDS: The defendant, who is the publisher of this newspaper, the respondent to this appeal, chose not to put that matter before the court. It is not a matter for my client to try and remedy that deficiency as the respondent to this form of application. Now, I said to your Honours there was possibly a third caveat, which unfortunately was the issue that I had hoped to spend most time on. I am in your Honours’ hands as to the extent to which your Honours would like me to elaborate on this, but the ultimate third caveat is the question of the appropriate test to be applied on a strike‑out, and I am in a position where I can address your Honours in that ‑ ‑ ‑
GLEESON CJ: Go ahead.
MR REYNOLDS: Thank you. Your Honours, I would submit, as I did earlier, that ‑ ‑ ‑
GUMMOW J: Well, we are construing these words “discloses no reasonable cause of action” in rule 171, and also what is described – I do not quite understand it – as the inherent jurisdiction, which somehow comes from heaven or somewhere.
MR REYNOLDS: Can I make a couple of points. I know your Honour is eager, as am I, to come to the text of the rule and I will give your Honour my assurance that I will construe it in due course.
GUMMOW J: Well, I just wanted to make a claim that in General Steel itself, which is in the original jurisdiction of this Court, what was being applied, on one way of looking at it, was Order 26 rule 18 which used those words in the 1952 High Court Rules.
MR REYNOLDS: Yes. There is no doubt about that. In the end ‑ ‑ ‑
GUMMOW J: Words that are all over the place in various jurisdictions.
MR REYNOLDS: Chief Justice Barwick in the end, on my recollection, did not resort to the inherent jurisdiction, but rather returned the matter on – I think it is Order 26 rule 18 as it formerly was under the rules.
GUMMOW J: Yes, that is right.
MR REYNOLDS: Your Honours, I have three ‑ ‑ ‑
GUMMOW J: It is a judicature rule ‑ ‑ ‑
MR REYNOLDS: It is, it came from Order 25 rule 4 in the rules that came in around 1880 after the Judicature Acts were passed. That is a matter dealt with in our submission. Your Honours, we have ‑ ‑ ‑
McHUGH J: But the theory of the rule, is it not, the rationale of the rule, is that cases are not to be stopped summarily, unless it is clear that there is no cause of action to go to the jury. The test of reasonable cause of action in rule 171 is the same question that the judge would have to ask him or herself at the conclusion of the evidence of the trial, but 171 enables that power of the judge to be short circuited by a summary application, but the burden of the authorities is that that summary jurisdiction can only be exercised when the judge has no doubt that the action will fail at that stage.
MR REYNOLDS: Quite, and ultimately ‑ ‑ ‑
McHUGH J: I know people go back to General Steel but I have always thought that what Sir Owen Dixon said in Dey’s Case is a better explanation.
MR REYNOLDS: Quite. There is something we want to submit rather curious has happened here and if your Honours go to this rule, your Honours will see that there are relevantly a couple of important words. In paragraph (a) there is the word “reasonable” – I will come back to that – and in paragraph (e) there are the words “otherwise an abuse of the process of the court”. Now, what happened was that this Court in a case called Burton (1908) 7 CLR 76 considered the inherent jurisdiction to strike out on the ground of abuse of process and took what one might call a very pro‑plaintiff view of the law which was precisely the same view which Justice Dixon took in the decision in Dey to which your Honour Justice McHugh has just referred.
What happened was that in Dey’s Case the Court, again looking at the Court’s inherent jurisdiction, adopted an entirely different approach and held that they could resolve on a strike‑out a debatable question of law over Sir Owen Dixon’s quite vigorous dissent. I have not been able to make a list of all of the cases that would fall under this heading, but it would seem that what has happened as a matter of practice in this Court, is that since Dey’s Case there have been a number of appeals which have come to this Court in the normal way where debatable questions of law have been resolved, yay or nay, without there being any discussion of whether the Court should proceed to resolve a debatable question of law, in particular, on a strike‑out application.
Can I give your Honours a couple of examples. One is Esanda v Peat Marwick (1997) 188 CLR 241 and another is State of New South Wales v Lepore (2003) 212 CLR 511 where two of the three cases involve a strike‑out. There are no doubt others, but we just have not had the time to compile a complete list. What has happened is by some matter of practice in effect this Court seems to have adopted the view espoused by the majority in the Dey Case without there ever having been a decision of this Court which addresses with any precision what the precise test ought to be on a strike‑out, either under a rule like 171 or in the inherent jurisdiction.
GLEESON CJ: Why should it be precise, bearing in mind the range of matters to which it has to be applied? Why should it not be flexible?
MR REYNOLDS: The suggestion that I would like to make is that the variety of tests referred to by Sir Garfield Barwick in General Steel, all of those tests, albeit exhibiting a degree of flexibility, as your Honour the Chief Justice puts it to me, are problematical ‑ ‑ ‑
GLEESON CJ: But what we are here concerned with is how you apply these words “no reasonable cause of action” to a defamation case in which the argument is that the matter sued on by the plaintiff is incapable of conveying the imputation relied upon. That is the context in which these words “no reasonable cause of action” have to be applied. It is not self‑evident that you would take exactly the same approach in that context as you would take in a case where there might be, for example, a new area of law being considered.
AT 4.29 PM THE MATTER WAS ADJOURNED
UNTIL TUESDAY, 21 JUNE 2005
Key Legal Topics
Areas of Law
-
Negligence & Tort
-
Evidence
Legal Concepts
-
Duty of Care
-
Negligence
-
Causation
-
Damages
-
Expert Evidence
0
3
0