Gutnick v Dow Jones & Co Inc (No 3)
[2003] VSC 407
•16 October 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
No. 7763 of 2000
| JOSEPH GUTNICK | Plaintiff |
| V | |
| DOW JONES AND COMPANY INC | Defendant |
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JUDGE: | Bongiorno J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 June 2003 | |
DATE OF JUDGMENT: | 16 October 2003 | |
CASE MAY BE CITED AS: | Gutnick v Dow Jones & Co Inc (No.3) | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 407 | |
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Tort – defamation – leave to amend defence – leave not availed of within time – plaintiff’s imputations – defendant’s imputations – qualified privilege - RSC rr.23.01; 23.02; 36.02.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J. L. Sher QC with Mr M. F. Wheelahan | Schetzer Brott Appel |
| For the Defendant | Mr T. F. Robertson SC | Brand Partners as agents for Gilbert & Tobin Sydney |
HIS HONOUR:
On 21 March 2003 I made orders in this matter striking out various parts of the defendant’s then Defence filed 14 November 2001. I reserved it leave to amend that document to recast its allegations of justification in legally acceptable terms having regard to the plaintiff’s allegations and the imputations pleaded by him as arising from the words upon which he sues and to deliver proper particulars of a claim of qualified privilege raised by it. The date by which any Amended Defence permitted by these orders was to be filed and served was 22 April 2003. This date was apparently subsequently extended by consent to 28 April 2003 (not 29 April 2003 as deposed to by the defendant’s solicitor in an affidavit sworn 22 May 2003).
In fact no amended document was filed, although, by letter dated 6 May 2003 the defendant’s solicitors purported to supply further and better particulars of its defence of qualified privilege; such particulars running to some 18 pages.
By a further letter of 19 May 2003 the defendant’s solicitors provided the plaintiff’s solicitors with a document entitled “Defence to Second Further Amended Statement of Claim”. This document, of some 74 pages, incorporated the further and better particulars of qualified privilege already delivered by the 6 May letter. The plaintiff’s solicitors response to this document was that the defence as provided was embarrassing both as to form and content and should be disallowed.
The defendant, not having availed itself of the leave granted on 21 March 2003 to amend its Defence within the time specified by the order granting leave, has lost the right to amend pursuant to that order by virtue of RSC r 36.02. The order granting leave ceased to have effect on 22 April 2003 or, perhaps, on 28 April 2003.
The Court now has before it an application by the defendant to enlarge the time for delivery of its Amended Defence and an application by the plaintiff to strike out paragraph 11 of the defendant’s original Defence (its plea of qualified privilege) for failure to provide particulars upon which it relies as establishing that publication of the relevant article occurred on an occasion of qualified privilege. Alternatively the plaintiff seeks orders striking out a number of paragraphs of the 74 page Amended Defence to which I have referred.
The two applications were heard together on 5 June 2003. In dealing with the matter it was considered convenient to examine the defendant’s proposed Amended Defence from the point of view of its efficacy as a pleading to the plaintiff’s Second Further Amended Statement of Claim and, depending upon the result of that examination, to determine what if any, relief from the consequence of non-compliance with the Rules should be extended to the defendant in respect of it.
At the hearing on 5 June Mr Sher QC for the plaintiff attacked the defendant’s proposed Amended Defence by oral argument in which he spoke to an outline of submissions already filed. Mr T F Robertson SC who appeared with Mr Mark Lynch for the defendant, responded to Mr Sher’s submissions orally on 5 June and subsequently, on 13 June 2003, filed a set of written submissions. This document provoked a further response from counsel for the plaintiff who filed a response dated 24 June 2003 to the defendant’s oral and written argument. This further argument from the plaintiff included copious references to authority.
Defendant’s proposed Amended Defence
Paragraphs 4(d) and (e)
The allegations in these paragraphs appear to seek to reopen the ruling I made on 21 March 2003[1], when I refused to strike out para 4 of the plaintiff’s Further Amended Statement of Claim. In the circumstances, having regard to that ruling, it is inappropriate for the defendant now to seek to canvas it by inserting these allegations into the Defence it now wishes to place on the record. It will not be permitted to do so.
[1][2003] VSC 79 paras 54-59.
Paragraph 5
Paragraph 5 of the defendant’s proposed Amended Defence denies that the article or any part of it was capable of bearing or in fact bears the meanings alleged by the plaintiff. But the question of the capacity of that part of the relevant article sued upon by the plaintiff to be defamatory of him has already been determined adversely to the defendant. This was the effect of the dismissal, on 21 March 2003, of its summons of 19 November 2001. If paragraph 5 is to have any efficacy as a pleading it must be confined to a denial of the libel alleged. It could not stand in its present form.
Paragraph 8 - Justification
In paragraph 8 the defendant raises a new plea of justification; its original plea of justification having been struck out on 21 March 2003. Its leave to amend to re-plead justification was confined to amendments to be made in accordance with the Court’s ruling of that date. However it now seeks to put on the record a plea of justification in respect of three imputations which it supports by 53 pages of particulars. The plaintiff attacks these imputations as not answering the case he makes in his Second Further Amended Statement of Claim.
Paragraph 8(a)
In paragraph 8(a) the defendant has recast the imputation it pleaded in para 9(a) of its original Defence of 14 November 2001 to delete the words “. . . but hypocritically and dishonestly takes advantage of religious charities for personal gain”.
This verbal contraction of the defendant’s original imputation effects a substantial widening of its plea of justification. In the form now proffered it would not meet the sting of the libel alleged by the plaintiff so as to comply with the law as expounded in David Syme & Co Ltd v Hore-Lacey[2]. Whilst, as I held in my ruling of 21 March 2003, there may be no relevant distinction (in Hore-Lacey terms) between the defendant’s imputation that the relevant words meant that the plaintiff masqueraded as a reputable business man and the plaintiff’s own imputation that those words meant that he masqueraded as a reputable citizen, that imputation, to which the defendant must respond if it seeks to justify the libel, included that the reason he so masqueraded was that he was a tax evader who laundered large amounts of money through Nachum Goldberg. Such an imputation is not met by a simple assertion that he masqueraded as a reputable business man.
[2](2000) 1 VR 667.
Although to be effective the defendant’s imputation must answer the plaintiff’s case in terms, which it fails to do, its deficiencies can be simply demonstrated by looking at the particulars supplied as allegedly supporting it. Those particulars run to some 22 pages of wide ranging allegations by which it purports to establish the plea. None of those particulars mentions tax evasion or money laundering by the plaintiff. Nor do they mention Goldberg as the channel through which the plaintiff carried out money laundering. Even if every one of them was proved it would not advance a proper plea of justification on the defendant’s behalf. In putting these particulars forward the defendant is merely, yet again, avoiding meeting the plaintiff’s case head on.
Paragraph 8(a) does not provide an appropriate plea of justification in respect of any of the plaintiff’s imputations. Had it appeared in a pleading regularly served it would have been liable to be struck out pursuant to RSC r 23.02, as would the particulars in paragraphs numbered 8.1 to 8.13. These particulars suffer from many other defects as well, but having regard to the fact that they will not be permitted in support of the plea in paragraph 8(a) there is no need for me to deal with them at any further length. Were they to remain in the pleading either in support of the plea of justification or, as dealt with below, as particulars in support of a plea in mitigation of damages the trial of this proceeding would be quite unjustifiably prolonged and embarrassed.
Paragraph 8(b)
In paragraph 8(b) the defendant alleges that the words sued upon by the plaintiff mean that he masqueraded as a reputable business man when he was a dishonest and/or a disreputable business man. Neither this imputation nor the particulars of it provided in paragraphs 8.13 to 8.25 of the impugned document meet any of the plaintiff’s imputations in a permissible sense. The extension of the imputation already pleaded in paragraph 8(a) in this paragraph is no more efficacious as a defence to the plaintiff’s claim than is paragraph 8(a). It, and the particulars purporting to support it, would also be struck out of a regularly filed and served pleading.
Paragraph 8(c)
This imputation, which is that the plaintiff has been masquerading as a reputable citizen when he was a dishonest and/or disreputable business man reasonably suspected of involvement with Nachum Goldberg, a convicted tax evader, links the plaintiff and Goldberg. But it does not justify the plaintiff’s imputation that his association with Goldberg was as a tax evader who laundered money through Goldberg or any permissible variant of that imputation.
Whether some permissible variation of the plaintiff’s imputation of his being a big (or the biggest) customer of Goldberg could be spelt out of an imputation which speaks of his being “reasonably suspected of involvement” with Goldberg or not, the vice in paragraph 8(c) is that it, again, does not meet the plaintiff’s case that the words of which he complains mean that in his association with Goldberg he was a tax evader and a money launderer.
The particulars supplied in support of this plea concentrate on Goldberg’s activities. They refer to the plaintiff only to suggest that he was “. . . reasonably suspected by prosecutors and/or by the defendant” to have been involved in money laundering with Goldberg. Such a particular suffers from many defects, not the least of which is that it does not support the imputations sought to be justified.
Paragraph 8(c) and its particulars would not be permitted to remain in a regularly filed and served pleading.
Overall, the defendant’s new pleas of justification do not comply with the legal requirements for pleas of justification laid down by the Court of Appeal in Hore-Lacey. They and the particulars supplied in purported amplification of them would, if permitted to remain on the record, embarrass and delay the fair trial of the proceeding not to mention widen the scope of discovery enormously. There is much in the plaintiff’s argument that the proposed amendments raise a large number of false issues which ought not be permitted to be agitated in this proceeding.
Paragraphs 9, 10 and 11 – Qualified Privilege
The leave given to the defendant to amend its defence in respect of qualified privilege was, in terms, confined to supplying appropriate particulars of the acts, facts, matters or circumstances by reason whereof it claims that the words complained of by the plaintiff were published on an occasion of qualified privilege. Rather than supply those particulars in substitution for the particulars which had been struck out, the defendant has deleted paragraph 11 of its original defence and replaced that paragraph with paragraphs 9, 10 and 11 purporting to deal with internet publication, print publication and newsstand publication of the matter sued upon. Those three paragraphs which, depending upon how they are counted, have over 120 sub-paragraphs, extend over some 15 pages of the 74 page document. The concept of particulars has apparently been abandoned in favour of a series of allegations, the overwhelming majority of which appear to have little or nothing to do with the question of qualified privilege. Again a very large number of issues are raised which will have no effect other than that of delaying and embarrassing the fair trial of this proceeding.
The plaintiff's counsel submitted that the defendant’s plea of qualified privilege is designed to effect “. . . a spurious relevance in respect of factual allegations which are not otherwise relevant to the plaintiff’s case, thereby enabling (it) to raise allegations under the false umbrella of a qualified privilege defence.”
The defendant submits that the presence or absence of the requisite duty/interest and reciprocal interest/duty required to raise a defence of qualified privilege cannot be determined without a factual contest. Whilst this is undoubtedly correct, the present inquiry is directed not to what facts might ultimately be proved in support of a plea of qualified privilege but rather how such a plea should be particularised in the interests of defining the issues which should go forward for trial.
Whilst a careful examination of paragraphs 9, 10 and 11 of the impugned document might enable the dissection from those paragraphs of material which could constitute particulars of the occasion or occasions of qualified privilege upon which the defendant wishes to rely the paragraphs themselves are so prolix and, in many instances, redolent of facts which have nothing to do with the issue of qualified privilege they would not have been allowed to stand had this pleading been filed and served in a timely manner.
Before leaving the issue of qualified privilege I should note the defendant’s submission that the Court should revisit the striking out of the particulars originally given by the defendant under paragraph 11 of its defence seeking to raise a defence of Lange qualified privilege. Even if I were able to do so, nothing I have heard in argument from the defendant would induce me to take that course. I note that in my reasons of 21 March I specifically declined to permit the defendant to deliver any further particulars in support of a defence of Lange qualified privilege and on 3 October 2003 the High Court refused special leave to appeal in respect of the order of 21 March.
Paragraph 12 – reasonableness
In paragraph 12 of its proposed Amended Defence the defendant raises a defence of “reasonableness”. It asserts that because publication took place in New Jersey and alleges that it was lawful in that State it is entitled to raise such a defence whether publication was on an occasion of qualified privilege “or otherwise”.
In his submissions the plaintiff argued that the purported defence raised by the defendant in paragraph 12 has its origins in a passage in the judgment of the High Court when it dismissed the defendant’s appeal in respect of the decisions of this Court as to jurisdiction and forum non conveniens.[3]
[3]Dow Jones and Company Inc v Gutnick [2002] HCA 56 at paragraph 51.
But the case being discussed by the High Court at paragraph 51 of its judgment is that in which the publisher’s conduct has “all occurred outside the jurisdiction”. That is not this case. Indeed it is inherent in the High Court judgment that the tort of which the plaintiff complains is a tort committed in the State of Victoria. The publisher’s conduct cannot be said to have all occurred outside Victoria. Had that been the case the decisions of this Court, the Court of Appeal and the High Court in the case to which I have referred would have been different.
No leave was reserved in this Court’s decision of 21 March to the defendant to raise a completely new defence such as that contained in paragraph 12 of the document under discussion. As there is no substance in that defence in this case leave to amend its original Defence to add that plea would have been refused.
Paragraph 13 – mitigation
In paragraph 13 of its proposed Amended Defence the defendant raises a number of matters which it seeks to plead in mitigation of the plaintiff’s damages.
Paragraph 13 contains 11 sub-paragraphs. Some of those sub-paragraphs, although of doubtful efficacy as far as mitigation is concerned, would not prolong the trial of this proceeding or unduly expand the scope of discovery or other interlocutory processes if they were permitted to stand. However, sub-paragraphs (h), (i), (j) and (k) appear to be an attempt by the defendant to put in issue again the matters raised in the particulars given under its plea of justification. As such they seek to put in issue particular acts of alleged misconduct on the part of the plaintiff in support of an argument that he has (or had) a diminished reputation. Some of those particulars even relate to events which occurred after the publication of the matter sued upon by the plaintiff. In either case such evidence is inadmissible on the issue of mitigation.[4] As Cave J said in Scott v Sampson the admission of such evidence would give rise to interminable issues which would have but a remote bearing on the question in dispute. In this instance having regard to the allegations made by the defendant in its particulars of justification such a proposition is entirely apt. Those sub-paragraphs, at least, would have been struck out of a regularly filed and served pleading.
[4]Scott v Sampson (1882) 8 QBD 491 at 505; Bracegirdle v Bailey (1859) 1 F&F 536; Jones v Stephens (1882) 11 Price 235 at 265.
Conclusion
In light of the above I conclude that had the proposed amended defence of the defendant been delivered within the time limited by the order of 21 March it would have been properly struck out under RSC r. 23.02. Much of it is vexatious. To permit many of the matters sought to be raised by it to be litigated would prejudice, embarrass or delay the fair trial of this proceeding. Accordingly there is no basis for the Court to exercise its discretion in favour of the defendant to permit it to file the proposed pleading as an Amended Defence notwithstanding non-compliance with the order of 21 March.[5]
[5]But see Glanville v Glanville (1937) 32 TasLR 82; Lamshed v Lamshed [1962] SASR 190; Attorney General v Wylde (1946) 47 SR(NSW) 99.
This case has already been delayed and fragmented by a number of interlocutory applications including appeals and applications for leave to appeal to the Court of Appeal and the High Court. The trial date originally fixed for 5 November 2003 has had to be vacated. The prolixity of the document with which this ruling is concerned demonstrates that the case is at risk of becoming out of control. The plaintiff argues that this is entirely the fault of the defendant. It is neither necessary nor desirable that I make any observation as to this submission. It is sufficient if I now take such measures as I can to control the interlocutory processes in this proceeding tightly from now on. To this end I will make orders designed to bring the pleadings to a close shortly and will, if necessary, make other orders at short notice designed either to obviate or expedite other interlocutory processes. The defendant will be given a short time to amend its pleading properly and a date will be fixed now for any challenge to that pleading to be heard.
The defendant’s application to extend time to comply with the orders for amendment made on 21 March 2003 will be dismissed. If it wishes to amend its defence of 14 November 2001 (having regard to the orders of 21 March 2003 striking out parts of it) then it must serve any proposed amended defence on the plaintiff by 27 October 2003. If the plaintiff objects to the form and/or substance of any such proposed amended defence then he must serve notice of his objections on the defendant by 31 October 2003. Such objections and the defendant’s application to amend its defence of 14 November 2001 will be heard by the Court on 5 November 2003.
On the plaintiff’s summons of 27 May 2003 such particulars of paragraph 11 of the defendant’s defence as it supplied by letter dated 6 May 2003 will be struck out pursuant to RSC rr.23.02.
The intended effect of the orders which I have described above will be to place the defendant, at this time, as if it had never sought to amend its original defence as affected by the order made by the Court on 21 March 2003. If the defendant does not serve any proposed amended defence on the plaintiff by 27 October 2003 the case will proceed to trial on the pleadings as they then stand subject only to the plaintiff’s right to file and serve any Reply to the defendant’s defence by 5 November 2003.
Orders
The formal orders the Court will make are as follows:-
(A) On the defendant’s summons filed 22 May 2003:-
(1)That the defendant’s application that the time provided by the Order of 21 March 2003 for the filing of an Amended Defence to the plaintiff’s Second Further Amended Statement of Claim be extended be dismissed.
(2)That if the defendant seeks to make any further application to amend its Defence of 14 November 2001 then it must make such application returnable before the Court on 5 November 2003 and serve it together with any proposed Amended Defence on the plaintiff by 27 October 2003 and not otherwise.
(3)That if the plaintiff objects to the form and/or the substance of any such proposed Amended Defence then he must serve notice of his objections upon the defendant by 31 October 2003.
(4)That if the defendant does not serve any application to amend its Defence upon the plaintiff in accordance with (2) above, then the plaintiff have such leave as is necessary to file a Reply to the defendant’s Defence of 14 November 2001, by 5 November 2003.
(5)That the defendant pay the plaintiff’s costs of this summons.
(6)That this Order be drawn up by the solicitors for the plaintiff and signed by a Judge pursuant to RSC r.60.04.
(B) On the plaintiff’s summons filed 27 May 2003:-
(1)That the particulars of paragraph 11 of the defendant’s Defence of 14 November 2001 supplied by letter dated 8 May 2003 be struck out.
(2)That the defendant pay the plaintiff’s costs of this summons.
(3)That this Order be drawn up by the solicitors for the plaintiff and signed by a Judge pursuant to RSC r.60.04.
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