Hyndes v Nationwide News Pty Ltd

[2011] NSWSC 633

Supreme Court

New South Wales

Medium Neutral Citation:	Matthew Jonathan Hyndes v Nationwide News Pty Limited [2011] NSWSC 633
Hearing dates:	15 June 2011
Decision date:	24 June 2011
Before:	McCallum J
Decision:	Leave granted to defendant to file a further amended defence in accordance with the Court's reasons
Catchwords:	DEFAMATION - defences - defence of truth under s25 of the Defamation Act 2005 - whether particulars of truth sought to be relied upon by the defendant liable to be struck out - defence of contextual truth under s26 of the Defamation Act 2005 - whether proposed contextual imputation capable of arising at the same time as and in addition to the plaintiff's imputations - Hore-Lacy imputation - where not truly alternative to plaintiff's imputations
Legislation Cited:	Defamation Act 1974 Defamation Act 2005 Uniform Civil Procedure Rules
Cases Cited:	Allen v John Fairfax & Sons [NSWCA, 2 December 1988, unreported] Ange v Fairfax Media Publications Pty Limited [2010] NSWSC 645 Buckeridge v Walter [2010] WASCA 134 Con Ange v Fairfax Media Publications Pty Ltd [2011] NSWSC 204 John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364 Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852 State of NSW v Deren [1999] NSWCA 22
Category:	Interlocutory applications
Parties:	Matthew Jonathan Hyndes Nationwide News Pty Limited
Representation:	Counsel K Smark SC (plaintiff) D Sibtain (defendant) Solicitors Kalantzis Lawyers (plaintiff) Blake Dawson Waldron (defendant)
File Number(s):	2009/297826
Publication restriction:	None

Judgment

1. This is an action for defamation arising out of the publication of an article in The Australian newspaper and on the Internet version of that publication. The proceedings are listed for hearing with a jury for two to three weeks commencing on 5 September 2011. The application presently before the Court is an application by the defendant for leave to amend its defence. The plaintiff does not object to the filing of a further amended defence but takes a number of specific objections to the draft amended pleading presently propounded.

Background

1. The matter complained of is an article published under the headline "Elderslie owner sails away as the heat rises". The primary focus of the article is the conduct of a person who is not a party to these proceedings, Mr Peter George. It is reported that Mr George, who was the owner of "the failed $200 million Elderslie Finance Corporation", had also been a director of EC Consolidated Capital, a company that "stole millions of dollars from investors and was liquidated in 1997". The article claimed that Mr George had recently sailed out of Sydney aboard his $3 million yacht, apparently never to return.

1. Separately, the article makes reference to another director of EC Consolidated Capital, Mr Tim Gatland, who allegedly went missing in Bangkok in 1996 and was presumed to have been murdered. The article then refers to a relationship between the late Mr Gatland and the plaintiff, stating:

Mr Gatland made headlines again in May last year when Australia's then Deputy High Commissioner in Sri Lanka, Matthew Hyndes, told the Industrial Relations Commissioner of his relationship with the conman.

Mr Hyndes told the IRC in unrelated proceedings that via a company controlled by Mr Gatland, he had helped lend money to drug-dealing Thai officials while he was on leave from the Australian embassy in Bangkok in1996. The Department of Foreign Affairs and Trade said yesterday Mr Hyndes was employed by the department but no longer held the Sri Lanka post.

1. Mr Hyndes alleges that the article was defamatory of him and carried the following meanings:

(a) that he had assisted officials of the Thai government to deal in illegal drugs by helping to lend them money; alternatively

(b) that he had knowingly assisted drug dealers by helping to lend them money;

(c) that he had helped lend money to drug dealing Thai officials while he was on leave from his employment at the Australian embassy in Bangkok in1996;

(d) that his conduct in helping Thai drug dealers had caused the Department of Foreign Affairs to remove him from his post as the Australian Deputy High Commissioner in Sri Lanka.

1. In its amended defence filed on 29 October 2010, the defendant pleads defences of truth under section 25 of the Defamation Act 2005 (apparently only as to imputations (a) and (c)); contextual truth under section 26 of the Act, fair report of proceedings of public concern under section 29 of the Act and common law qualified privilege. In addition, the defendant pleads a number of matters in mitigation of damage.

1. By the proposed further amended defence, the defendant seeks to amend the contextual truth defence with a new contextual imputation and to add a plea of justification at common law. The proposed amended pleading also seeks to amend the truth defence by extending the defence to imputation (b) and refining the particulars relied upon in support of the defence.

Particulars in support of truth defence

1. The first objection raised by the plaintiff is that some of the particulars of truth are not capable of being relevant in the proof of that defence. The particulars objected to on that ground are paragraphs 7C, 19 and 20 of the proposed amended pleading. Although the plaintiff's objections to those paragraphs were brought forward in the context of the defendant's application for leave to amend, the particulars in question are not new (being in substantially the same form as particulars 7C, 12G and 12H in the present defence). However, no point was taken as to the appropriateness of determining the plaintiff's objections as an incident of the application for leave.

1. Section 25 of the Defamation Act 2005 provides:

25 Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true.

1. As already noted, the imputations sought to be proved as being substantially true are imputations (a), (b) and (c) relied upon by the plaintiff (paragraph 21 of the proposed pleading). The contentions relied upon in support of the truth defence are set out in the preceding paragraphs (7 to 20) of the proposed pleading.

1. Paragraph 7C states:

7C The plaintiff was found by the Department of Foreign Affairs and Trade to have misrepresented to the Department of Foreign Affairs the start date of his employment with the Company as being 1 July 1996.

Particular to Paragraph 7C( UCPR 15.22 )

(i) The findings are set out in the following business records of the Department of Foreign Affairs and Trade:

(A) Charges laid on 26 October 1998 by Authorised Officer (Mr Bob Tyson).

(B) "Report of Inquiry into Charges against Matthew Hyndes" dated 2 July 1992 1999,

(C) "Review of employment actions - section 33 Public Service Act 199" dated 22 May 2003.

1. The question of fact raised by the truth defence is whether it is substantially true that the plaintiff did the acts attributed to him in imputations (a), (b) and (c). The fact asserted in particular 7C, that the Department of Foreign Affairs and Trade made the finding referred to, is in my view incapable of having any bearing on that question. The forum in which the truth of the plaintiff's imputations is to be determined is this Court. The existence of findings in other forums cannot be brought to aid in that task. I am satisfied that particular 7C in the amended defence is liable to be struck out under rule 14.28 of the Uniform Civil Procedure Rules and that the defendant should not have leave to file a further amended defence that includes a particular in those terms.

1. The next particular objected to is paragraph 19 of the proposed pleading, which provides:

19. The plaintiff offered a bribe to Rutagorn Assadon Teriut with the intention of influencing the decisions regarding nominations with TTF.

Particular to paragraph 19 ( UCPR 15.22)

The representations were made by the plaintiff on 9 September 1997 to Allan John Spencer and Christopher Price.

1. The objection to particular 19 was added only during the hearing of argument. Mr Smark, who appeared for the plaintiff, submitted that the allegation of offering a bribe can have no bearing on the conduct sought to be proved by the defendant of helping lend money to drug dealers. There appears to be some force in that contention. On balance, however, I think it is a question that should be reserved for the trial judge. I note that, elsewhere in the particulars, "TTF" is alleged to have provided loans to Thai officials who were drug lords. Without a full understanding of the facts underlying the defendant's contentions, I cannot be satisfied that it is appropriate to preclude the defendant from relying on the particular contention in paragraph 19 at this stage.

1. The third particular objected to is paragraph 20, which states:

20. The plaintiff was the subject of a security clearance review and had his security clearance with the Department of Foreign Affairs downgraded on 26 September 1997 (the Security Clearance Review) as a result of:

(a) conduct by the plaintiff in connection with his employment by the Company in Thailand during the Relevant Period;

(b) the plaintiff was untruthful during a security clearance interview conducted on 9 September 1997 in relation to this conduct in Thailand during the Relevant Period;

(c) the plaintiff's involvement in attempts by companies for which he worked to bribe senior Thai officials.

Particulars to paragraph 20 ( UCPR 15.22)

The findings of the Department of Foreign Affairs and Trade were set out in the following business records:

(i) Department of Foreign Affairs and Trade in Minute dated 26 September 1997.

(ii) Department of Foreign Affairs and Trade Minute dated 18 June 1998.

1. As with the existence of a finding of the Department (sought to be relied upon in particular 7C), the existence of a decision of the Department to downgrade the plaintiff's security clearance is not capable of proving the substantial truth of the plaintiff's imputations. The critical issue is the conduct of the plaintiff, not the findings or decisions of others as to any aspect of his conduct. Accordingly, I am satisfied that particular 12H in the amended defence is liable to be struck out under rule 14.28 of the Uniform Civil Procedure Rules 2005 and that the defendant should not have leave to file a further amended defence which includes a particular in that form.

1. I am further satisfied that, as submitted by Mr Smark, particulars 7C and 20 in their present form are not proper particulars in mitigation of damage, for the same reasons. If what is in truth sought to be established is that the plaintiff had a bad reputation within the Department, that should be made explicit. The fact that there was a security clearance review which resulted in the plaintiff's clearance being downgraded could not in itself mitigate the plaintiff's damages.

Plaintiff's imputations "pleaded back"

1. The second objection to the proposed amended pleading may be dealt with briefly. Paragraph 23 of the proposed amended pleading states:

23. By reason of the substantial truth of the Contextual Imputation and/or one or more of any of the imputations pleaded by the plaintiff in paragraph 4 of the Amended Statement of Claim (Plaintiff's Imputations) , the publication by the defendant of any of the Plaintiff's Imputations (which is denied) to the extent that they were defamatory (which is also denied) did not further harm the reputation of the plaintiff (my underlining).

1. The objection is confined to the words underlined, which represent an attempt by the defendant to rely on the alleged truth of the plaintiff's own imputations to found a defence of contextual truth. It has been held in this Court that such a course (commonly referred to as "pleading back" the plaintiff's imputations) is not permitted under section 26 of the Defamation Act 2005: see Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852 at [36] to [52] per Simpson J.

1. An appeal against the decision in Kermode has been heard by the Court of Appeal and that Court has reserved its decision. The defendant did not seek to persuade me in the meantime that the decision of Simpson J is plainly wrong and that I should not follow it. Mr Sibtain, who appeared for the defendant, submitted only that the defendant ought to be entitled to preserve its position by amending the defence so as to plead back the plaintiff's imputations pending the resolution of the appeal in Kermode and any application for special leave that might be made.

1. I do not think that is the appropriate course. In the absence of any submission that I should not follow Kermode , I think I should proceed on the basis that, on the present state of the law, a defendant is not entitled to maintain a defence of contextual truth under s 26 of the 2005 Act by pleading back the plaintiff's imputations. That is sufficient warrant for refusing leave to make the amendment sought.

1. In any event, to the extent that it is possible or necessary to "preserve the defendant's position", that is achieved by the acknowledgment very fairly made by Mr Smark on behalf of the plaintiff that, in the event that the Court of Appeal overturns the decision of Simpson J in Kermode before the trial of the present proceedings, it would be open to the defendant to conduct the trial on the basis of the appellate decision.

New contextual imputation

1. The plaintiff's remaining objections raise, in different ways, the vexed question of the extent to which a defendant in a defamation action is confined to meeting the case on the plaintiff's terms. The wrestle over that issue in the present case is prompted by two parts of the proposed further amended defence: a new contextual imputation and a plea of common law justification.

1. It is convenient first to address the plaintiff's objection as to the new contextual imputation, which is:

That the plaintiff was willing to lend money to persons whom he believed to be drug dealers.

1. Section 26 of the Defamation Act 2005 provides:

26 Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations ("contextual imputations") that are substantially true, and

(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations .

1. It was submitted on behalf of the plaintiff that the contextual imputation is not capable of arising from the matter complained of; is not capable of arising at the same time as and in addition to the plaintiff's imputations and is not capable of having the statutory effect (that, by reason of its being substantially true, the plaintiff's imputations do not further harm his reputation) .

1. Mr Smark noted that the contextual imputation is entirely based in paragraph 14 of the matter complained of (set out above) which identifies a particular act. He submitted that the matter complained of makes no allegation about the plaintiff other than that act and is not capable of giving rise to the different imputation of willingness to undertake such an act.

Mr Smark submitted, alternatively, that even if the imputation is capable of arising, it does not satisfy the requirement of section 26 that it be "another imputation".

1. I apprehend a measure of tension between those alternative contentions. I have come to the conclusion that the first is wrong and the second is right.

1. The principles to be applied in determining whether a defendant should be permitted to rely upon a contextual imputation are conveniently collected in the decision of Nicholas J in Con Ange v Fairfax Media Publications Pty Ltd [2011] NSWSC 204 at [13] and following. His Honour noted that the issues which will arise in relation to a defence of contextual truth under the 2005 Act are similar to those which arose under the Defamation Act 1974, but also noted that there is some difference in the language of the two sections, as pointed out by Simpson J in Ange v Fairfax Media Publications Pty Limited [2010] NSWSC 645 at [50] to [52].

1. The defence accepts that the matter complained of conveys the plaintiff's imputation and that no other defence is available to the cause of action based upon that imputation: Allen v John Fairfax & Sons [NSWCA, 2 December 1988, unreported] per Hunt J (it should perhaps be noted in that context that, under the 2005 Act, the imputation is no longer the cause of action: cf s 9 of the 1974 Act).

1. In John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484, McColl JA summarised the relevant authorities at [212] as follows:

(a) the defence of contextual truth under s 16 was created to fill a lacunae (sic) in the common law by enabling a defendant to justify a meaning of the matter complained of upon which the plaintiff had not relied;

(b) a contextual imputation must be another imputation from the plaintiff's imputation; the test of whether it differs in substance from the plaintiff's imputation is a necessary but not sufficient test for 'another' imputation, which requires a difference in kind ( Jones ); it must be a "truly alternative" imputation ( Hepburn );

(c) a contextual imputation may plead a different "sting" entirely from that relied upon by the plaintiff; and

(d) a plea of contextual truth admits that the matter complained of conveyed the imputations relied upon by the plaintiff, does not seek to justify those imputations (save where a contextual imputation singly, or in combination, pleads back one of the plaintiff's imputations), but seeks to establish that by reason of the substantial truth of the contextual imputation(s), the imputation complained of does not further injure the reputation of the plaintiff.

1. The decision in Hitchcock incidentally provides an illustration of the likelihood that good legal minds will differ as to the application of those principles in any particular case. In approaching the difficult task raised by the present application, I have found it useful to bear in mind the explanation of the defence summarised in the first principle started by McColl JA in Hitchcock , that the defence enables a defendant to justify a meaning of the matter complained of upon which the plaintiff has chosen not to rely. As the matter was put by Mr Smark in argument, the reason for the defence is to require the plaintiff to deal with "the elephant in the room".

1. Accepting those principles, Mr Sibtain noted that it has never been the case that a plaintiff is prevented from pleading an act and a condition arising from the same matter. He submitted that the contextual imputation sought to be relied upon by the defendant in the present case is the condition that arises from the act of helping to lend money to drug dealers. Thus, he submitted, the imputation arises at the same time, but differs from those relied upon by the plaintiff.

1. I think there is force in Mr Sibtain's submission that the matter complained of is capable of imputing both an act and a condition. For that reason, I do not accept Mr Smark's submission that the contextual imputation is incapable of arising from the matter complained of.

1. The difficulty with the proposed contextual imputation, in my view, is that it cannot arise at the same time as and in addition to the plaintiff's imputations. I accept that, as a matter of logic, it is possible for words to convey an act and, separately, a condition. In the present case, however, the condition in question (willingness to lend money to persons the plaintiff believed to be drug dealers) is necessarily implicit in the act identified in the plaintiff's imputations, and so is not a different meaning that arises from paragraph 14 of the matter complained of at the same time as those imputations.

1. The present debate in not in the same territory as, for example, the question whether a statement that a man had sexually assaulted a child on a particular occasion conveyed, at the same time, the imputation that he was a child molester: cf State of New South Wales v Deren [1999] NSWCA 22. In my view, to say that a person helped to lend money to drug dealers and to say that he was willing to do so amounts essentially to the same thing. The proposed contextual imputation does no more than to identify a necessary or implicit element of the charge encapsulated in the plaintiff's imputations.

1. Accordingly, I do not think that the defendant should have leave to amend its defence to include that contextual imputation.

Common law justification

1. It remains to consider the plaintiff's objection to paragraph 24 of the proposed amended pleading, which seeks to raise a case of justification at common law. Whether referred to as a defence or a pleading practice, the defendant's approach reflects the principles stated in the decision of the Victorian Court of Appeal in David Syme & Co Limited v Hore-Lacy [2000] VSCA 24; (2000) 1VR 667. In that context, it is convenient to refer to the proposed amendment as the Hore-Lacy imputation.

1. Following reformulation during the course of argument, the amendment propounded is in the following terms:

24 Further and alternatively, the matter complained of was true in substance and in fact in the following meaning, which is not substantially different from the plaintiff's imputations (a), (b) and (c);

The plaintiff assisted Thai officials whom he knew were engaged in serious criminal activities by facilitating loans to those persons.

1. The pleading of a Hore-Lacy imputation finds its origin in the proposition that a plaintiff enjoys some degree of flexibility as to the meanings on which he chooses to conduct his case, in the sense that he does not have to prove that the matter complained of conveyed the exact meanings alleged. He will succeed so long as the jury is satisfied that the matter conveys those meanings or meanings that do not differ in substance from those meanings. That being so, it is equally open to a defendant to contend for some slight variation from the plaintiff's imputations and to prove the truth of the slightly varied meaning.

1. From that principle has arisen a practice among defendants of pleading such nuances upon the plaintiff's imputations as may fairly fall within the scope of the principle, so as to put the plaintiff on notice as to the meanings the defendant will seek to justify.

1. As already noted, the relevant principles are stated in the decision of Hore-Lacy . The main judgment in that case was that of Charles JA. In light of the complexity of the principles stated, it is appropriate to set out the relevant passages in full. His Honour said (at [52] to [54]):

[52] From these passages it would seem that all members of the Court in Chakravarti would take the view that a plaintiff could, after pleading specific meanings by way of false innuendo, succeed at trial on a meaning other than the meanings pleaded, provided that the meaning was not substantially different from and was not more injurious than the meanings pleaded, and that the defendant was not in all the circumstances unfairly prejudiced by allowing that meaning to go to the jury. Whether the meaning was substantially different would presumably be tested by asking whether the defendant would have been entitled to plead a different issue, adduce different evidence or conduct the case on a different basis (Brennan CJ and McHugh J in Chakravarti ) or possibly whether the justification would be substantially different (Gaudron and Gummow JJ). If, on the other hand, the plaintiff sought at trial to establish a substantially different or more injurious meaning, his action would fail unless the judge permitted him to reformulate his case with the usual consequences as to adjournment and costs. See, eg Gatley on Libel and Slander, 9th ed (1998).

[53] The principal criticisms of the practice sanctioned in Polly Peck , of permitting a defendant to plead and justify a meaning different from that contended for by the plaintiff are that such an approach allows the defendant to raise false issues which can only embarrass the fair trial of the action and will on occasions unfairly prevent a plaintiff from pursuing a claim in defamation, in the manner explained by Brennan CJ and McHugh J in Chakravarti . The setting up of false issues by the defendant in this way may well make admissible a substantial body of evidence that would otherwise be irrelevant and thus greatly lengthen proceedings. But it seems to me that the same criticisms would not hold good if the defendant were limited to justifying a meaning which was one upon which the plaintiff might himself obtain a verdict on the pleadings as they stand.

[54] Nor should a defendant be unfairly prejudiced if the defendant were limited to pleading a meaning which was sufficiently close (in the manner already suggested) to the plaintiff's meanings, so that the plaintiff himself could succeed upon that meaning on the pleadings as they stand. If the defendant is limited to pleading a meaning on which the plaintiff would be permitted to go to the jury, a false issue is not thereby raised. The issues are instead identified and confined, to the benefit of the court and the parties. Of course, if the plaintiff cannot make good a meaning amongst those identified, his action must fail, and the defendant has no need to plead any other meaning.

1. Ormiston JA agreed, stating (at [22] to [24]):

[22] If that be correct, then a defendant should not need to, nor be permitted to, plead or rely on a meaning other than one which is not more serious and otherwise is not substantially different. Unfortunately, defamation actions are frequently cases of considerable subtlety. Again, unfortunately, many articles in the press (or elsewhere) these days are devised on the "no smoke without fire" premise, so that many allegations take a form which might be construed by the jury as alleging highly improper activity though on detailed analysis the elements of the allegation would appear less serious. It is this sort of case which might go to the jury with the plaintiff pleading imputations of high impropriety and the defendant asserting that its meaning referred to less serious peccadillos which it wished to justify. The "smoke" could therefore be justified but it would remain for the jury (or judge) to decide whether the imputation was still one of "fire". Particulars of a plea of truth of the less serious imputations of "smoke" would appear to be either bad or irrelevant if the only allegations on the record are the plaintiff's imputations of "fire", unless the defendant's case of "smoke" explicitly forms part of its pleading.

[23] It follows that in substance I would agree with the analysis and conclusions of Charles JA in his judgment which I have had the benefit of reading. It also follows that, with regret, I cannot agree in the analysis of Callaway JA which I have also had the benefit of reading. With many of his sentiments, especially as to precision of pleading, I would agree, but the Court is here dealing with certain rules of pleading and practice in defamation actions which seem in a number of respects to have required an approach different from that applicable to other proceedings. Lucas-Box cannot, in my opinion, be treated as wrongly decided, as I do not feel that this Court is free to overrule the rule which enables a plaintiff in a defamation action to take advantage of any meaning of a publication which is fairly open to the jury or judge, within the meaning of the authorities, even if we were inclined to disagree with it. Perhaps that rule still has its virtues inasmuch as the English language has never been precise in that there are so many synonyms and variants for every word and phrase, and looseness of expression, to the extent of permissiveness, has been recently encouraged by both educators and lexicographers. Not that the law of defamation ever assumed that people always said what they meant or meant what they said. In recognition of these difficulties it has always made allowances for human weakness by permitting the pleading of and reliance on imputations. In further concession to this weakness, the rules of practice may be seen to have been modified so as to prevent unmeritorious reliance on the specific words chosen by the plaintiff's pleader as that might unfairly prevent the Court from resolving the merits of the plaintiff's claim.

[24] I must for the present purpose assume that the existing rule of trial practice is an appropriate concession to these vagaries of language. The pleading rule which Charles JA and I would adopt from the authorities ought to reduce the present confusion so as to reduce the potential injustices to a minimum by providing both parties with an efficient but not excessive degree of flexibility. The plaintiff ought to be kept within the broad confines of his present complaint, although allowing the jury to work out the precise imputations for themselves, while the defendants will be able to say that the articles have a not more serious and not substantially different meaning which they are able to justify on the facts, if they wish to do so. At present I would not read the defendants as having gone beyond meanings which are essentially the same as those pleaded by the plaintiff inasmuch as they are not significantly different, nor are they more serious. They must, however, show in what way they propose to demonstrate that they are true by relating their particulars of justification to the various imputations pleaded on each side. Subject to what Charles JA has to say on this matter, the appeals should therefore be dismissed.

1. The distinction between the defence of contextual truth and the Hore-Lacy approach is nicely explained in the judgment of McColl JA in Hitchcock. Although her Honour reached a different conclusion on the facts in that case, it is clear that her Honour's analysis of the relevant legal principles enjoyed the concurrence of the other members of the Court: per Ipp JA at [21]; per Tobias JA at [40]. McColl JA said (at [239]):

The critical point is that the conceptual underpinnings of the defences are entirely separate. The s 16 defence requires a defendant to plead a truly alternative imputation to the plaintiff's imputation to satisfy the requirement that it be "another imputation" for the purposes of s 16(1). The Hore-Lacy approach entitles a defendant to plead imputations not substantially different from, or, as I would put it, not truly alternative to a plaintiff's imputations. If a s 16 contextual imputation is truly alternative to the plaintiff's imputation, it cannot be one on which a plaintiff in a common law jurisdiction would have been entitled to get a verdict from a jury.

1. Accordingly, as submitted by Mr Smark, it may be seen that whereas a contextual imputation must be different from the plaintiff's imputations, a Hore-Lacy imputation will not be permitted if the difference is more than one of nuance.

1. Mr Smark submitted that the imputation sought to be relied upon by the defendant in the present case in paragraph 24 of the further amended defence falls foul of those principles. The plaintiff's imputations focus very specifically on drugs. No other criminal activity is identified in the plaintiff's imputations. The Hore-Lacy imputation, by its inclusion of the phrase " serious criminal activities", is a significant expansion upon that case.

1. Mr Smark submitted that, testing that proposition against paragraph [52] of the judgment of Charles JA in Hore-Lacy (set out above), it may be seen that the proposed Hore-Lacy imputation in the present case is a "side step manoeuvre" calculated to enable the defendants to shift the forensic battleground from drugs to bribery. That apprehension is borne out by the particulars of truth relied upon by the defendant.

1. Mr Sibtain submitted that the question whether different evidence will be required to justify the Hore-Lacy imputation is not determinative. He drew my attention to the decision of the Western Australian Court of Appeal in West Australian Newspapers Limited v Elliott (2008) 250 ALR 363 at [75] per McLure JA (it is clear from the judgment that, in referring to a Polly Peck defence, her Honour was referring to what I have called the Hore-Lacy approach). Her Honour said:

[75] A Polly Peck defence would be otiose if it only applied to imputations which, if justified, would establish the truth of the substance or sting of the plaintiff's pleaded imputations. In such a case a defendant would simply justify the plaintiff's imputations. This is consistent with the technical rules for pleading imputations which require that separate imputations be pleaded if different evidence is required to justify the meaning: Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 at 543; Lewis v Daily Telegraph Ltd [1964] AC 234 at 282. It necessarily follows that a Polly Peck defence of its nature must permit a defendant to plead and justify an imputation which is different from the imputations pleaded by the plaintiff in the sense that different evidence would be required to justify it.

1. Curiously, the Court in Elliott was composed of only two judges, and it is probably fair to say that the other member of the bench (Steytler P) did not embrace her Honour's remarks. Two years later, however, her Honour reiterated those remarks, as President of the Court by that time and with the concurrence of two other judges: see Buckeridge v Walter [2010] WASCA 134 at [37] per McLure P; Owen and Buss JJA agreeing at [46] and [47] respectively.

1. Any difference between the principle stated by McLure P and the principles stated in Hore-Lacy may be more perceived than real. One can readily imagine examples of an imputation that is not truly alternative to those relied upon the plaintiff but that would permit the defendant to rely upon some different evidence. This is not such a case, in my view. The proposed Hore-Lacy imputation is truly alternative to the plaintiff's imputations and would substantially expand the battleground in the present case. It would allow the defendant to seek to prove knowledge on the part of the plaintiff of any kind of serious criminal activities on the part of Thai officials, where the plaintiff's case is specifically circumscribed by reference to knowledge of dealings in drugs. I do not think that leave should be granted to include a plea in those terms.

1. I grant leave to the defendant to file a further amended defence in accordance with these reasons.

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Decision last updated: 24 June 2011