Hughes v ISPT Pty Ltd (No. 2)

[2010] NSWDC 282

CITATION:	Hughes v ISPT Pty Ltd (No. 2) [2010] NSWDC 282
HEARING DATE(S):	10 December 2010
JUDGMENT DATE:	10 December 2010
JURISDICTION:	Civil
JUDGMENT OF:	Gibson DCJ
DECISION:	(1) Application by the plaintiff to strike out the defence of contextual truth on the basis of Kermode is dismissed (Gibson DCJ to email judgment to the parties). (2) Costs reserved.
CATCHWORDS:	TORT – defamation – application to strike out defence of contextual truth – conflicting decisions as to the interpretation of s 26 Defamation Act 2005 (NSW) in two Supreme Court decisions – impact on a defendant of loss of this defence and consequential adjournment of the trial – application refused
LEGISLATION CITED:	Defamation Act 1974 (NSW), s 16 Defamation Act 2005 (NSW), s 26
CASES CITED:	Ahmed v Nationwide News Pty Ltd [2010] NSWDC 268 Corby v Channel Seven Sydney Pty Ltd (Supreme Court of NSW, 20 February 2008) Creighton v Nationwide News Pty Ltd (No. 2) [2010] NSWDC 192 Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386 Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852 NRMA Insurance Ltd v Amalgamated Television Services Pty Ltd (Supreme Court of New South Wales, Hunt J, 14 July 1989)
PARTIES:	Plaintiff: Tanjhena Hughes First Defendant / Cross-Claimant: ISPT Pty Ltd (ACN 064 041 283) Second Defendant: Jones Lang LaSalle (NSW) Pty Ltd (ACN 002 851 925) Third Defendant: Australian Independent Retailers Pty Ltd (ACN 004 678 675) trading as Big W Cross-Defendant: Centauri Security (ABN 56 320 335 442) Second Cross-Defendant: Jones Lang LaSalle (VIC) Pty Ltd (ACN 004 582 423)
FILE NUMBER(S):	3945 of 2008
COUNSEL:	Plaintiff: Mr R Rasmussen First Defendant / Cross-Claimant: Mr A T S Dawson Second Defendant / Second Cross-Defendant: Mr R Potter First Cross-Defendant: Ms T Berberian
SOLICITORS:	Plaintiff: Etheringtons Solicitors First Defendant / Cross-Claimant: Colin Biggers and Paisley Lawyers Second Defendant / Second Cross-Defendant: Marque Lawyers First Cross-Defendant: Wotton + Kearney

Judgment

[1] These proceedings were listed for hearing by the Judicial Registrar on 5 August 2010, for 5 days, for the week commencing 14 March 2011. The Judicial Registrar also stood the matter over for directions to Friday 3 December 2010. This directions listing was referred to me. At the directions hearing on 3 December, the parties dealt expeditiously, and largely by agreement, with a list of outstanding matters.

[2] When the matter came before me on 10 December I heard, and dismissed, the plaintiff’s application to strike out the first defendant’s s 26 defence. These are my reasons for refusal to do so.

The pleadings

[3] The plaintiff in these proceedings has pleaded the following imputations:

(a) the plaintiff is a thief;

(b) the plaintiff is a shoplifter;

(c) the plaintiff had stolen from almost every shop in the Marketplace at Wagga Wagga;

(d) the plaintiff so conducted herself as to warrant being banned from the Marketplace Shopping Centre, Wagga Wagga and the Big W Store.

[4] The defendant has pleaded a defence of contextual justification to imputation 6(a) only. The pleadings assert that by reason of the substantial truth of this imputation, the other imputations pleaded do not further harm the reputation of the plaintiff (paragraph 10 of the Defence).

[5] The operation of the defence of contextual truth under s 16 Defamation Act 1974 is explained in Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386. In practical terms, the relationship between the plaintiff’s imputations and the defendant’s imputations in a defence of partial justification results in the pleading being framed in one of the following three ways:

(a) The defendant may rely upon the truth of one or more of the plaintiff’s imputations to “swamp” those of the plaintiff’s other imputations for which the defence of truth is not pleaded, as has occurred here; or

(b) The defendant may elect not to rely upon any of the plaintiff’s imputations, but to plead that different imputations arise, and that the truth of the defendant’s imputations will “swamp” the plaintiff’s imputations; or

(c) The defendant may rely upon the truth of one or more of the plaintiff’s imputations as well as the truth of any additional imputations pleaded only by the defendant.

[6] While a defendant can plead and rely upon only its own imputations to “swamp” those of the plaintiff (the method set out in (b) above), in practice, the vast majority of contextual truth claims, such as the claim in these proceedings, rely upon proving the truth of one or more of the plaintiff’s imputations. This is in part because a defendant cannot plead minor variants of the plaintiff’s imputations of the “almost got it right” variety (NRMA Insurance Ltd v Amalgamated Television Services Pty Ltd (Supreme Court of New South Wales, Hunt J, 14 July 1989)). Another, and equally compelling, reason is that a plaintiff is then entitled to “plead back” the defendant’s contextual imputations, a practice so common that defendants rarely contested it (Creighton v Nationwide News Pty Ltd (No. 2) [2010] NSWDC 192 (“Creighton”) at [20]).

[7] Defences of partial justification reliant upon proof of one or more (but not all) of the plaintiff’s imputations have been a feature of defamation pleadings for the last 35 years, first under s 16 Defamation Act 1974 (NSW), and now under s 26 Defamation Act 2005. However, Simpson J, in a decision handed down on 4 August 2010, has held that while the intention appears to have been to continue this practice, the wording of s 26 is defective: Kermodev Fairfax Media Publications Pty Ltd [2010] NSWSC 852 (“Kermode”). This decision conflicted with a prior decision Nicholas J, the defamation list judge: Corby v Channel Seven Sydney Pty Ltd (Supreme Court of NSW, 20 February 2008) (“Corby”). An application for leave to appeal from Kermode is listed for hearing on 29 April 2011.

[8] As both Simpson J and Nicholas J noted in their judgments, despite their Honours’ differing conclusions as to the adequacy of the legislation to express it, the intention of the legislators was that s 26 of the uniform legislation drafted in 2005 would copy the provisions of s 16 Defamation Act 1974 (NSW); the question was whether the legislators had done so. If that is not the case, s 26 will require amendment.

[9] The Court of Appeal’s decision will have ramifications for the defence throughout Australia. The central purpose of the uniform legislation was that, for the first time, defamation law in Australia would be uniform, to prevent the injustice of inconsistent results in different States and Territories, and the nature and extent of statutory defences was the subject of discussion, research and agreement between the Attorneys-General for the States and Territories prior to legislation in each jurisdiction.

[10] The question is, however, what should occur in proceedings where a s 26 has been pleaded, especially where (as is the case here) the hearing is imminent? There are two inconsistent decisions of a single judge in the Supreme Court, and although the appeal is listed for hearing on 29 April 2011, there is a likelihood that the NSW Court of Appeal may not hand down a decision for some months. If there is an appeal to the High Court of Australia, considerable delay could be involved, given the possible need for there to be amendments in all jurisdictions.

[11] Defamation is a tort for which a speedy remedy has long been held by the courts to be desirable. The complexity of legal issues and costs are considerable and, for defendants, there is the additional burden that most defendants, including media defendants, are uninsured. The prospect of litigants around Australia having to wait several years for appellate guidance is unattractive. The prospects for these litigants of losing their trial date is viewed by them with great concern, as an evil to avoid if at all possible.

[12] This same problem came before me earlier this year, in Creighton. The defendant in those proceedings (which, like these proceedings, had an imminent trial date) asked me to refuse to permit the plaintiff to plead back the defendant’s imputations, as the defendant would otherwise lose the defence of contextual justification, asserting that this would be an abuse of process. I refused to do so, noting that in Kermode at [41] Simpson J had referred to the “pragmatic argument” that the plaintiff could defeat the defence in this way should deter her Honour from striking out the defence.

[13] However, in Ahmed v Nationwide News Pty Ltd [2010] NSWDC 268 (“Ahmed”) Bozic DCJ declined to adopt the same reasoning as I adopted in Creighton, holding, at [17], that an exercise in discretion was involved in allowing an amendment, and not an exercise in statutory construction. His Honour refused to permit the plaintiff to plead back the defendant’s imputations, holding it would be an abuse of process to do so. Thus, in addition to the conflicting findings of Nicholas J in Corby and Simpson J in Kermode concerning the construction of s 26, there are conflicting decisions between judges in this court as to what to do next.

[14] The parties in this litigation are all anxious to keep the hearing date. They tell me this is the only defamation trial listed for hearing in this court in 2011. The first defendant says that the hearing can still take place if its position is preserved in the same way as occurred in Creighton, namely if I determine this application as if Kermode not handed down. This would mean that I would refuse to strike out the s 26 defence. However, that is contrary to the finding of Bozic DCJ that Kermode should be followed.

[15] The defendant in Ahmed pleaded a defence of contextual truth to only some of the plaintiff’s imputations (as is the case here), as well as pleading two additional contextual imputations (which Bozic DCJ refused to permit the plaintiff to plead back). However, Bozic DCJ did not follow Simpson J’s decision in Kermode and strike the defence to these imputations out (at [27]), despite noting (at [11]) that the decision was strongly persuasive and should be followed, and relying upon Kermode to refuse the plaintiff leave to plead back the defendant’s contextual imputations (which is actually contrary to the course Simpson J adopted in Kermode at [41]).

[16] The explanation for this can be found in Ahmed at [26], where his Honour describes s 26 as a defence which “enables the defendant to identify imputations not pleaded by the plaintiff and to use in a cumulative way all the contextual imputations identified against all the plaintiff’s imputations” (i.e. only the kind of defence described in [5(b)] above). If the plaintiff were permitted to plead these defendant’s imputations back, the defence would fail, his Honour explains at [27]. His Honour’s decision does not address the problem of a defence where the defence is pleaded to an imputation of the plaintiff’s. (I also note that the defendant in Ahmed cannot rely upon the truth of any of the plaintiff’s imputations to support the s 26 defence, the defence would fail anyway, particularly since these are imputations of criminal guilt and corruption as opposed to the contextual imputation of conduct warranting investigation).

[17] The defence of contextual truth in New South Wales has been settled and recognized for 35 years. The issue before the NSW Court of Appeal in Kermode is whether the statute as currently drafted reflects that law, or whether statutory amendment is required. As the legislation is intended to be uniform around Australia, this is clearly an issue of some importance for the other States and Territories of Australia.

[18] It would involve the parties in needless expense, as well as require the adjourning of the trial, if I were to take the same approach as that taken in Ahmed, as it would be necessary to strike out the first defendant’s defence, since it pleads back one of the plaintiff’s imputations and not a separate and unpleaded contextual imputation.

[19] Simpson J’s judgment has triggered the appeal process which will determine whether statutory amendment is necessary for s 26 to mean what it is generally supposed to mean, but it would be a triumph of form over substance, and productive of unnecessary legal costs and delay, if the defence were to be struck out in all other proceedings where the defence is pleaded, when the likely result will be clarification or amendment.

[20] I am conscious of the undesirability of different views between judges of this court as to how to deal with s 26 defences pending the outcome of Kermode. The safest course, in my view, is to note cautiously the conflicting views of Nicholas J and Simpson J, and to continue to interpret s 26 in the time-honoured way it has been interpreted, on the understanding that if there is a gap in the legislation that gap will be attended to. The only other alternative is to adjourn all proceedings in which the defence is pleaded and, given what the parties say about the difficulty of obtaining hearing dates, I accept that this should be avoided if possible.

[21] The principal aim of the uniform defamation law was that it should be uniform, and the problems that have arisen as a result of Kermode indicate the threat to uniformity and to the efficient disposal of actions where there a decision of one judge in one jurisdiction as to the uniform law creates this kind of unexpected difficulty. If statutory amendment is required in New South Wales, it will also be required in the other States and Territories. If that occurs, perhaps the legislative draftsmen can give consideration to some more speedy avenue of appellate redress for problems with interpretation of the uniform law, such as the insertion of a statutory provision for a right of appeal to a court of Federal jurisdiction, to avoid a patchwork of amendments creating potential inconsistencies in the respective jurisdictions around Australia.

[22] I note that after discussion with the parties I reserved the costs of this application. There are other applications before the court to amend pleadings which may trigger the vacating of the hearing date, and it is appropriate to wait for those to be determined.

(1) Application by the plaintiff to strike out the defence of contextual truth on the basis of Kermode is dismissed (Gibson DCJ to email judgment to the parties).
(2) Costs reserved.

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