Kermode v Fairfax Media Publications Pty Ltd

[2010] NSWSC 852

CITATION:	Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852
HEARING DATE(S):	7 June 2010
JUDGMENT DATE :	4 August 2010
JURISDICTION:	Common Law
JUDGMENT OF:	Simpson J
DECISION:	Paragraphs 5(a), 9(a) and 13(a) and contextual imputations (A) and (C) of the Defence be struck out. The defendants have liberty to file an amended defence.
CATCHWORDS:	DEFAMATION – actions for defamation – pleading – defence – contextual truth – pleading back – whether s 26 Defamation Act 2005 allows defendants, as part of contextual truth defence, to rely on imputations pleaded by the plaintiff – form of imputations - STATUTES – Acts of Parliament – interpretation – consideration of extrinsic materials – intention of legislature – purposive approach – construction that promotes the purpose or object of s 26 does not change the result arising from the words of the section – words to be given literal and grammatical meaning – language of s 26 does not permit defendants to plead back – result diminishes the value of s 26 defence – statutory reform proposed
LEGISLATION CITED:	Defamation Act 1974 Defamation Act 2005 Interpretation Act 1987 Uniform Civil Procedure Rules
CATEGORY:	Procedural and other rulings
CASES CITED:	Allen v John Fairfax & Sons Ltd (NSWSC, unreported, 2 December 1988, Hunt J) Corby v Channel Seven Sydney Pty Ltd (NSWSC, unreported, 20 February 2008, Nicholas J) John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 Mills v Meeking [1990] HCA 6; 169 CLR 214 Newnham v Davis (No 2) [2010] VSC 94 Plato Films Ltd v Speidel [1961] AC 1090 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Waterhouse v Hickie (1995) Aust Tort Rep 81-347 Wookey v Quigley [2009] WASC 284
PARTIES:	Reginald Lionel Kermode (Plaintiff) Fairfax Media Publications Pty Ltd (First Defendant) Fairfax Digital Australia & New Zealand Pty Ltd (Second Defendant) Linton Besser (Third Defendant)
FILE NUMBER(S):	SC 2009/297885
COUNSEL:	K P Smark SC/S T Chrysanthou (Plaintiff) R G McHugh SC/M Polden (Defendants)
SOLICITORS:	Johnson Winter & Slattery (Plaintiff) Pigott Stinson Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

Simpson J

4 August 2010

2009/297885 Reginald Lionel Kermode v Fairfax Media Publications Pty Ltd & Ors

JUDGMENT

1 HER HONOUR: In these proceedings, the plaintiff claims damages arising out of three separate publications by the defendant, each of which, he pleads, defamed him. The operative initiating process is an Amended Statement of Claim filed on 27 November 2009.

2 The proceedings are governed by the Defamation Act 2005 (to which, for reasons which will appear, it will be convenient to refer as “the 2005 Act”).

3 This is a separate trial, pursuant to UCPR 28.2, of several questions that have emerged with respect to defences that have been raised on behalf of the defendants. The plaintiff seeks orders, pursuant to UCPR 14.28(1), that certain paragraphs of the Defence be struck out. The issues raised concern a defence of contextual truth pleaded by the defendants.

Background

4 For the purpose of these reasons, I will assume the accuracy of the factual matters pleaded. That, of course, does not represent any finding of fact for the purpose of the ultimate proceedings.

5 Each publication was made on 19 September 2009. The first was an article published in the print edition of the Sydney Morning Herald, a newspaper circulating in New South Wales and other states and territories. The second was published on the Internet version of the same newspaper and was in essentially identical terms. The third was also published on the Internet, on the website of the Sydney Morning Herald, and was in the form of a film. While its content had some overlap with that of the first and second publications, it was not identical.

6 The first two publications appeared under the heading “Free Ride: Mr Taxi’s $20 million windfall”. The third, the film, was entitled “The Taxi Tsar”.

7 It is plain from the content of each publication that the plaintiff was the person referred to as “Mr Taxi” and “The Taxi Tsar”.

8 For the purpose of the present question, it is unnecessary to go into detail of the content of any of the publications. It is sufficient to say that they referred to the plaintiff as a person who controlled the State’s biggest and most powerful taxi companies and who has made significant amounts of money therefrom. The publications question the integrity of the plaintiff, and of public officials with whom he has dealt.

The pleadings

9 In paragraphs 5 and 7 respectively of the Amended Statement of Claim, the plaintiff pleads that the first and second publications each conveyed the following imputation:

“(a) The plaintiff had obtained a 20 million dollar windfall for his companies by improperly influencing public servants and politicians in his favour by conferring benefits upon them.”

In the alternative, in each case, he pleads that the following imputation was conveyed:

“(b) Alternatively to (a), the plaintiff had attempted improperly to influence public servants and politicians in his favour by conferring benefits upon them.”

10 In paragraph 9, he pleads that the third publication conveyed the following imputations, (again, (b) being alternative to (a)):

“(a) The plaintiff had acted improperly in that he had caused large donations to be made to the Labor Party and thereby maintained his companies’ rights in about 11 million dollars’ worth of free taxi plates;

(b) Alternatively to (a), the plaintiff had acted improperly in that he had caused large donations to be made to the Labor Party in an attempt to maintain his companies’ rights in about 11 million dollars worth of free taxi plates.”

11 The defences are set out in a Defence filed on 31 December 2009. The defendants have pleaded a variety of defences of which only one is relevant to the present proceedings. That is a defence of contextual truth under s 26 of the 2005 Act. It is this that has given rise to the principal issue for present determination.

12 In paragraph 5 of the defence, relevant to the first publication, and replicated in paragraphs 9 and 13 with respect to each of the other publications, the defendants plead:

“5 …
(a) each of [the plaintiff’s] imputations which is not found to be substantially true was published contextually to:
(i) such other imputation pleaded [by the plaintiff] as may be found to be substantially true ( the Plaintiff’s First Contextual Imputation ); and
(ii) the following imputations [there follow seven imputations the defendants claim were conveyed and were defamatory] ( the Defendants’ Contextual Imputations ) …
(b) by reason of the substantial truth of one or more of the Plaintiff’s First Contextual Imputation and/or the Defendants’ Contextual Imputations, publication of such of the imputations pleaded in paragraph 5 [of the Amended Statement of Claim] as may be found to arise and not to be substantially true did not further injure the Plaintiff’s reputation.”

13 In paragraphs 5(a)(ii) and 9(a)(ii) of the Defence, in respect of the first and second publications, the defendants have pleaded that seven contextual imputations were conveyed, lettered “A” – “G”. In paragraph 13(a)(ii), in respect of the third publication, they have pleaded that the same contextual imputations were conveyed (but subsequently excluded that lettered “B”). Of the seven contextual imputations, those lettered “A”, “B” and “C” will call for later examination. These contextual imputations are:

“(A) The Plaintiff unconscionably obtained millions of dollars in windfall gains for companies he runs, from taxi plates acquired free of charge from successive Labor governments to which the companies had given regular political donations;

(B) The Plaintiff, through companies he runs and the NSW Taxi Council, sought to influence the granting and administration of taxi licences by providing gifts to public servants, and by appointing public servants and former Premier Neville Wran to lucrative positions;

(C) The Plaintiff, has obtained undue influence with successive Labor governments, to which companies he runs and the NSW Taxi Council have given regular political donations.”

14 There are two aspects to the contextual truth defence. Both aspects are pleaded in paragraphs 5, 9 and 13. One aspect is that which pleads the contextual imputations lettered “A” – “G”. That is a conventional pleading. The other is that to be found in paragraphs 5(a)(i), 9(a)(i) and 13(a)(i). That is reliance by the defendants, as part of their contextual truth defence, on the imputations pleaded by the plaintiff. It is this that gives rise to the principal question for present determination. The question is whether, having regard to the wording of s 26, that course is available to a defendant. (Since the same issues arise in respect of each, it is convenient henceforth to refer only to paragraph 5, the pleading in respect of the first publication.)

The relevant statutory provisions

15 Section 26 of the 2005 Act is in the following terms:

“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.”

16 The 2005 Act has been in effect since 1 January 2006. It was enacted as part of a uniform national scheme of defamation law, and replicated in all, or most, states and territories. Its forerunner was the Defamation Act 1974 (“the 1974 Act”). Prior to the enactment of the 2005 Act, only NSW, of the Australian states and territories, had a defence of contextual truth.

17 One significant variation the 2005 Act effected to NSW law of defamation concerned the defence of truth (also referred to as a defence of justification). It removed the need for a defendant to prove that a substantially true defamatory imputation was published on an occasion of qualified privilege or related to a matter of public interest; by s 25, substantial truth became a complete defence. That had a consequential effect for the purposes of the defence of contextual truth, which is a refinement, or extension, of the defence of truth.

18 The defence of contextual truth was first introduced into the NSW law of defamation by the enactment of s 16 of the 1974 Act. Section 16 was in the following terms:

“ 16 Truth: contextual imputations
(1) Where an imputation complained of is made by the publication of any report, article, letter, note, picture, oral utterance or other thing and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of.
(2) It is a defence to any imputation complained of that:
(a) the imputation relates to a matter of public interest or is published under qualified privilege,
(b) one or more imputations contextual to the imputation complained of:
(i) relate to a matter of public interest or are published under qualified privilege, and
(ii) are matters of substantial truth, and
(c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff.”

The formulation of s 26 incorporated the variation to the defences of truth. It may be that that was all that it was intended to do. But there are other departures in the language, which I will examine below.

19 The defendants’ pleading masks the language of s 26. It is apt to a pleading under s 16 of the 1974 Act. It uses the language of that section, and not the language of s 26. A pleading raising the defence provided by s 26 would, ideally, be in the following terms:

“The matter complained of carried, in addition to the imputations pleaded by the plaintiff , the following other imputations, each of which is substantially true …”

20 The defence was directed to a particular scenario. That was a scenario in which a publication conveyed more than one defamatory imputation, of different degrees of gravity, of the same plaintiff. The plaintiff was, of course, entitled to choose any one or more of the imputations conveyed on which to sue. Equally, he or she was entitled to ignore any others. Naturally, an astute plaintiff (or his or her legal adviser) would avoid suing on any imputation(s) the truth of which it was feared the publisher would be able to prove. A rather graphic illustration is to be found in Plato Films Ltd v Speidel [1961] AC 1090.

21 Even where a plaintiff sued, for example, on an imputation (imputation (a), of which the defendant could not prove the truth) markedly less serious than another imputation (imputation (b), also conveyed by the publication, but of which the defendant could prove the truth), prior to the enactment of s 16, the defendant could not defend the claim in relation to imputation (a) by pointing to the truth of imputation (b): see the explanation given by Priestley JA in Waterhouse v Hickie (1995) Aust Tort Rep 81-347 at 62,490; see also Allen v John Fairfax & Sons Ltd (NSWSC, unreported, 2 December 1988, per Hunt J). Section 16 was enacted to overcome this situation, which might be thought to have been anomalous, even unjust, to a defendant. In Waterhouse v Hickie, Priestley JA said:

“S16 was intended to prevent this by allowing the defendant in such a case to rely in defence on all or some of the imputations not sued on [by the plaintiff].”

22 As it happened, s 16 went further. It allowed a defendant in such a case to rely in defence on such of the imputations sued upon by the plaintiff as were able to be proven true, and to balance the defamatory impact of those imputations (in conjunction with any the defendant had pleaded as contextual imputations, and proven true) against any imputations pleaded by the plaintiff but not proven to be true.

23 That form of pleading by the defendant (of signalling reliance, for the purposes of the contextual truth defence, upon imputations pleaded by the plaintiff) came to be known as “pleading back”. In essence, a defendant who pursues this course seeks to take advantage of any imputation pleaded by the plaintiff of which the defendant is able to prove the truth, and balance it, in terms of impact on the plaintiff’s reputation, against any imputation or imputations of which the defendant has not sought, or been able, to prove the truth.

24 The “pleading back” mechanism is an anticipatory measure. By “pleading back” the defendant seeks to anticipate the outcome of a defence of truth to the imputations pleaded by the plaintiff, and to take advantage of any that are successfully justified by incorporating them in the catalogue of contextual imputations pleaded and proven true.

25 It was with respect to litigation under s 16 of the 1974 Act that the practice of “pleading back” the plaintiff’s imputations arose. It did not receive universal acceptance. In Waterhouse v Hickie Priestley JA said;

“The only restriction on imputations available from the material complained of (the publication) will be that the imputation sued on by the plaintiff as a cause of action can not be relied on in a s16 defence to that cause of action. The reference in s16(1) to ‘another imputation’ seems to make that clear (if it was not clear in any event).”

26 However, it is clear that that statement by Priestley JA was obiter, and it certainly did not halt the practice. The practice had the considerable benefit of achieving the objective of the enactment of s 16: ie after determination of the preliminary issues of:

(i) whether the imputations pleaded by the plaintiff were conveyed and were defamatory; and

(ii) whether the contextual imputations pleaded by the defendant were conveyed and were defamatory; and

(iii) which (if any) of all of those imputations had been proven to be true,

of putting before the jury the ultimate question: of all those imputations conveyed, and defamatory, and having regard to those proven to be true: was the plaintiff’s reputation further injured by those imputations of which the defendant had not proved truth? The exercise was a balancing one; all true defamatory imputations were put in one side of the scale, all unproven defamatory imputations in the other. If the defamatory impact of those that were true equalled or outweighed those that were not true, then the defence of contextual truth would succeed – because the plaintiff’s reputation would not be further injured by the publication of those that were untrue. If, on the other hand, the defamatory impact of those that were true did not equal or outweigh those that were untrue, it could not be said that the plaintiff’s reputation was not further injured by the publication of the unproven defamatory imputations, the defence would fail, and the plaintiff would be entitled to a verdict. (Whether damages would be adjusted by reference to any proven imputations is a question not argued and to which I refer without attempting to decide.)

27 That was an eminently sensible way of achieving justice between the parties and of achieving the objects of the s 16 defence. It would have defeated the purpose of s 16 to exclude from the ultimate balance any imputations pleaded by the plaintiff, and successfully defended as true by the defendant.

28 All that is, in a sense, preliminary. That was the position under the 1974 Act. The next – and the real – question is whether the 2005 Act replicates that position.

29 I have no doubt that it was intended to do so. There are, however, significant differences between the language of s 16 and that of s 26. On behalf of the plaintiff it was contended that those differences are such that the practice of “pleading back” the plaintiff’s imputations is not available under s 26. He accordingly seeks an order under UCPR 14.28(1), that those portions of the Defence that seek to “plead back” the imputations pleaded by the plaintiff be struck out.

30 That s 26 was not intended to effect any substantive change in the manner in which the defence of contextual truth operates appears from extrinsic materials available to be considered under s 34 of the Interpretation Act 1987. I bear in mind, however, that contained within s 34 are limitations on the purposes for which such materials may be used. In short such materials may be used as an aid to interpretation to confirm that the ordinary meaning of the text of the statute is the meaning to be given to it, or to determine its meaning where the statute is ambiguous or obscure, or if its ordinary meaning would lead to a manifestly absurd or unreasonable result.

31 In the second reading speech introducing the 2005 Act, the Attorney General, Mr Debus, said:

“Clause 26 provides for a defence of contextual truth. There is already a defence of contextual truth under the existing New South Wales Act. The purpose of the defence is basically to prevent plaintiffs from taking relatively minor imputations out of their context within a substantially true publication.”

There is nothing in this to suggest that there was any intention to make any alteration to the manner in which the contextual truth defence operates.

32 Similarly, in the Explanatory Note that accompanied the presentation of the (then) Bill, the following appears:

“ Clause 26 provides for a defence of contextual truth. The defence deals with the case where there are a number of defamatory imputations carried by a matter but the plaintiff has chosen to proceed with one or more but not all of them. In that circumstance, the defendant may have a defence of contextual truth if the defendant proves:

‘[The explanatory memorandum then set out s 26(a) and 26(b)]’

There is a defence of contextual truth under the existing law of New South Wales … The defence of contextual truth created by the proposed Act, unlike the general law, will apply even if the contextual imputations are separate and distinct from the defamatory imputations of which the plaintiff complains.”

This, too, would suggest that the intention of the NSW legislature was, effectively, to re-enact s 16, with appropriate modifications to reflect the variations effected to the defence of truth.

33 The interstate counterparts of s 26 of the 2005 Act (as enacted in Western Australia and Victoria as part of the national approach to defamation law) has been the subject of consideration on at least two previous occasions. In Wookey v Quigley [2009] WASC 284, Hasluck J outlined the purpose of the section. His Honour said:

“62 My understanding is that this provision covers the situation where the plaintiff draws a particular allegation out of the material complained of but ignores some other more serious allegation, possibly because the defendant might be able to justify it. In that situation it is open to the defendant to raise and justify the more serious imputation in order to establish that the plaintiff's reputation has not actually been damaged as alleged by the plaintiff in seeking to confine his complaint to the less serious imputation selected by him.”

34 In Newnham v Davis (No 2) [2010] VSC 94, Kaye J said;

“48 The first point … is whether the contextual imputations pleaded by the defendant are, or are capable of being, additional to the imputations pleaded by the plaintiff. It is clear, from the express terms of s 26(a), and also from the structure of a contextual truth defence, that the contextual imputations must be ‘additional to’ the imputations pleaded by the plaintiff. Section 26(a) expressly requires that the contextual imputations arise ‘in addition to’ the defamatory imputations of which the plaintiff complains. The structure of s 26 is such that it requires a comparison, by the Court, of two sets of imputations to be derived from the defamatory material, namely, the plaintiff’s imputations, and the contextual imputations. Thus, as Hunt J stated in the John Fairfax & Sons Ltd case [ Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36], it is necessary that the contextual imputations relied on by the defendant ‘differ in substance’ from those pleaded by the plaintiff.”

35 In neither of these cases did the present issue arise. Although Kaye J was concerned with the words in s 26 “in addition to the defamatory imputations of which the plaintiff complains”, what was there under consideration was whether the contextual imputations pleaded on behalf of the defendant differed in substance from those imputations pleaded on behalf of the plaintiff. The issue was not whether a defendant could rely upon imputations pleaded by a plaintiff.

36 Notwithstanding my view that the intention behind the enactment of s 26 was to maintain the status quo, I have concluded that what was enacted failed to do so. This emerges from an analysis of the language of s 26.

37 Section 26 provides a defence of contextual truth where the imputations pleaded by the defendant are “in addition to the defamatory imputations of which the plaintiff complains”. That is to be contrasted with s 16, which provided a defence of contextual truth where “an imputation is made by [a] publication … and another imputation is made by the same publication …”.

38 Section 16 required focus upon each imputation pleaded by the plaintiff, compared with “another” (that is, any other) imputation made by the same publication. There is nothing in s 16 that precludes “another imputation” being another imputation pleaded by the plaintiff. It may be that that was because by s 9 of the 1974 Act, each imputation published gave rise to a cause of action. Whether that was the explanation or not probably does not matter. By contrast with s 16, the words “in addition to the defamatory imputations of which the plaintiff complains” in s 26 cannot be contorted to include imputations pleaded by the plaintiff.

39 In John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205, with respect to s 16, Spigelman CJ drew attention to the words “another imputation” in that section. That was in the context of contextual imputations of the same or a similar genre to those pleaded by the plaintiff – ie whether the contextual imputations pleaded by the defendant differed in substance from the imputations pleaded by the plaintiff.

40 The same attention must be given to the words “in addition to” contained in s 26. As I have said, by no amount of gymnastics can they be contorted to include an imputation pleaded by the plaintiff.

41 Senior counsel who appeared for the defendants advanced a pragmatic argument against this construction. It was that, in any case where a defence of contextual truth is pleaded by a defendant, a plaintiff may defeat that defence by simply adopting the contextual imputations as imputations of which he or she complains. In doing so, a plaintiff would lose nothing, because, by pleading the imputations as contextual imputations, the defendant has signalled an intention to prove their truth. By adopting (or, put more pejoratively, “appropriating”) the contextual imputations pleaded by the defendant, the plaintiff could deprive the defendant of a defence under s 26. That has, in fact, occurred on at least one occasion: Corby v Channel Seven Sydney Pty Ltd (NSWSC, 20086/2007). Senior counsel’s proposition is correct, but it cannot be allowed to dictate the proper approach to statutory construction.

42 During the course of argument I toyed with the notion that the intention of the legislature might be achieved if an extended meaning were given to the words “of which the plaintiff complains”, so that focus was placed upon imputations of which the plaintiff complains after any defence of truth had been determined. However, attractive as the proposition was as a means of restoring what I consider to have been the Parliamentary intention, it will not work. The “imputations of which the plaintiff complains” are those which the plaintiff pleads.

43 I have also considered whether, by taking a purposive approach to the construction of s 26, I could avoid this result. Section 33 of the Interpretation Act requires preference to be given to a construction that would promote the purpose or object underlying the statutory provision the interpretation of which is under consideration.

44 I do not think that this provision can avoid the result which stems from the words of the section. In considering the Victorian equivalent of s 33 (s 35(a) of the Interpretation of Legislation Act 1984 (Vic)), Dawson J, in Mills v Meeking [1990] HCA 6; 169 CLR 214, said:

“[T]he literal rule of construction, whatever the qualifications with which it is expressed, must give way to a statutory injunction to prefer a construction which would promote the purpose of an Act to one which would not, especially where that purpose is set out in the Act. Section 35 … must, I think, mean that the purposes stated in [the statutory provisions under consideration] are to be taken into account in construing the [statutory provisions], not only where those provisions on their face offer more than one construction, but also in determining whether more than one construction is open … The approach required by s 35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman . Section 35 requires a court to construe an Act, not to rewrite it, in the light of its purposes .” (italics added)

45 I am, of course, conscious of the decision of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355, as a result of which attention to the intention of the legislature is to be given, even where that leads to a construction at odds with the grammatical meaning of the words used.

46 That was, however, in the context of legislation that contained within it provisions that indicated clearly what the intention of Parliament was. It is necessary to construe the words of any individual provision in the context of the statute as a whole.

47 Here, although I have stated my opinion that the NSW Parliament intended, essentially, to re-enact s 16, that conclusion is drawn, not from the words of any other provisions in the 2005 Act, but from the extrinsic materials. There is nothing in the 2005 Act, other than s 26 itself, which casts any light upon what Parliament intended.

48 Since argument was not directed to the rules of statutory interpretation, it would not be appropriate to attempt a thorough analysis of those rules as they apply to the present question. However, I am satisfied that the starting point is the words of the statute, that they do not permit any alternative construction, and to permit the defendants to rely upon imputations pleaded on behalf of the plaintiff would be to give the section a meaning that is not available on its plain words – that is, in effect, to rewrite the section.

49 In this respect, it is not without significance that s 26 came into existence in the way it did as part of the enactment of uniform national defamation legislation. It is one thing to be persuaded that the NSW legislature intended not to change the availability of the practice of “pleading back” of contextual imputations; that intention cannot be attributed to the legislatures of other states and territories, which had no pre-existing equivalent.

50 In Corby v Channel Seven Sydney Pty Ltd (NSWSC, unreported, 20 February 2008) Nicholas J took a different view. His Honour held that s 26 has the same effect as s 16, and that a defendant is entitled to “plead back” the imputations pleaded by the plaintiff.

51 I regret that I am unable to agree with this approach. In my opinion, whether a defendant can rely upon imputations pleaded by the plaintiff for the purposes of a s 26 defence depends upon an analysis of the language of the section. I am well aware of the principles of comity that, in general, require a judge to follow a decision of a judge of co-ordinate status unless convinced that that decision is “plainly wrong”. I am conscious also of the pre-eminent position in the world of defamation law of Nicholas J, and of my own temerity in departing from his decision in Corby. That decision was, however, an extempore decision on an interlocutory basis, in respect of one of the first cases to come before the Court under the 2005 Act.

52 In those circumstances, and as I have firmly come to a different view, I consider it my duty to give effect to that view.

53 The result is that it is not open to the defendants to “plead back” the plaintiff’s imputations. It will be necessary to strike out those paragraphs of the defence that seek to take that course.

54 I wish to make it perfectly clear – in case I have not already – that I regard this as a most regrettable result. It does not reflect what I apprehend the legislature to have intended to do. In my opinion the legislature intended to re-enact (with appropriate modifications to reflect alterations in the defence of truth, but not otherwise) the effect of s 16. I am satisfied that s 26 was reworded as it was through inadvertence; that the drafters did not have in mind depriving the defendants of the right they had previously had to bring before the jury all true defamatory imputations (whether initially pleaded by the plaintiff or the defendant) and to measure them against all unproven defamatory imputations. And I am satisfied that the result can work injustice to defendants.

55 If it were open to construe the words of s 26 in the way for which the defendants contend, and the way in which Nicholas J did, I would do so. But, in my firm view, the language of the section does not permit that course to be taken.

56 So strongly am I of the view:

(i) that the construction I have adopted is not only correct, it is the only one open;

(ii) that that result does not achieve what the Parliament had in mind; and

(iii) that that result significantly diminishes the value of the s 26 defence;

that I propose, through the avenues available, to draw these reasons to the attention of those charged with the responsibility of statutory reform.

57 There is an additional issue concerning the pleading of the contextual truth defence.

58 As I have mentioned at the outset of these reasons, the plaintiff complains of only one imputation in respect of each publication, although he has, in each case, pleaded an alternative. In those circumstances, the defendants’ pleading, in paragraphs 5, 9 and 13, that:

“Each of those imputations [that is, the imputations pleaded on behalf of the plaintiff] which is not found to be substantially true was published contextually to:

(i) such other imputation pleaded [by the plaintiff] as may be found to be substantially true …”

is inappropriate. There are not multiple imputations pleaded by the plaintiff in respect of any publication which can be set up against one another by way of s 26 balance. If, in respect of any publication, the primary imputation is found to have been conveyed, and defamatory, its alternative will not be considered. Certainly the truth of the alternative will not arise as an issue. There will therefore not be an imputation found to be substantially true and another not found to be substantially true. The same will occur if the primary imputation is not found to have been conveyed, but the alternative is. In those circumstances, the truth of the primary imputation will not be considered. It is not possible, for the purposes of a contextual truth defence, to set the alternative imputations pleaded by the plaintiff against one another.

59 Since, as I have indicated, I propose to strike out that part of the defence, it is unnecessary to say more.

Contextual imputations: do they differ in substance from the plaintiff’s imputations?

60 Contextual imputations pleaded on behalf of a defendant must differ in substance, both from those pleaded on behalf of the plaintiff, and from each other. This was well established under s 16 of the 1974 Act and has not been altered by the wording of the 2005 Act.

61 Pleaded contextual imputations are not permissible if, properly seen, they are no more than an alternative way of formulating the imputations relied on by the plaintiff: John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205.

62 Objection is taken to the three contextual imputations set out above. On behalf of the plaintiff it was contended that they do not differ in substance from those pleaded on behalf of the plaintiff in paragraphs 5 and 9, and are therefore not imputations “in addition to” those of which the plaintiff complains.

63 There is a complexity in this, in that the plaintiff’s imputations are pleaded alternatively. That means that it is necessary to set the contextual imputations against each of the plaintiff’s imputations.

64 Contextual imputation (A) is:

“The Plaintiff unconscionably obtained millions of dollars in windfall gains for companies he runs, from taxi plates acquired free of charge from successive Labor governments to which the companies had given regular political donations.”

The plaintiff’s imputations are, alternatively:


“(a) The plaintiff had obtained a 20 million dollar windfall for his companies by improperly influencing public servants and politicians in his favour by conferring benefits upon them;

(b) … the plaintiff had attempted improperly to influence public servants and politicians in his favour by conferring benefits upon them.”

65 I have concluded that contextual imputation (A) does not differ in substance from, and therefore is not “in addition to” plaintiff’s imputation (a). Both involve accusations that the plaintiff obtained a large sum of money, improperly, by conferring benefits on public servants or politicians. Of course, the two are not identical, but their substance is the same.

66 Accordingly, contextual imputation (A) is not “in addition to” plaintiff’s imputation (a).

67 Is it necessary, then, to consider whether it differs in substance from plaintiff’s imputation (b)? I have concluded that it is not.

68 That is because contextual imputation (A) falls only to be compared with the plaintiff’s imputation (b) in the event that the plaintiff fails to establish that imputation (a) was conveyed. If he succeeds in establishing that, then there will be no need to consider the plaintiff’s imputation (b). It is only if the plaintiff fails in that endeavour, that imputation (b) will be considered.

69 But, since I have found that contextual imputation (A) does not differ in substance from plaintiff’s imputation (a), it follows that, if the plaintiff fails to establish that imputation (a) was conveyed, the defendants must also fail to establish that contextual imputation (A) was conveyed.

70 I will therefore strike out contextual imputation (A).

71 I would note, however, that I do not consider that contextual imputation (A) differs in substance from the plaintiff’s imputation (b). The plaintiff’s imputation (b) asserts an attempt, as distinct from a successful transaction; that is lesser than, and different from contextual imputation (A).

72 Contextual imputation (B) is:

“(B) The Plaintiff, through companies he runs and the NSW Taxi Council, sought to influence the granting and administration of taxi licences by providing gifts to public servants, and by appointing public servants and former Premier Neville Wran to lucrative positions.”

73 The critical difference between contextual imputation (B) and plaintiff’s imputation (a) is that, in the former, there is no assertion that the plaintiff obtained money as a result of the conduct alleged against him. That is a very significant distinction.

74 I am satisfied that contextual imputation (B) differs in substance from, and is therefore “in addition to” plaintiff’s imputation (a).

75 However, should the plaintiff fail to establish that imputation (a) was conveyed, then he will have to fall back upon imputation (b). I am satisfied that contextual imputation (B) does not differ in substance from, and is therefore not “in addition to” the plaintiff’s imputation (b).

76 Whether the defendants may rely upon contextual imputation (B) will depend upon whether or not the plaintiff succeeds in establishing that imputation (a) was conveyed. If he does not, then the defendants will not be permitted to rely upon contextual imputation (B). Of course, it may be that this is properly a matter for the trial judge.

77 Contextual imputation (C) is:

“(C) The Plaintiff, has obtained undue influence with successive Labor governments, to which companies he runs and the NSW Taxi Council have given regular political donations.”

78 I forebear to comment upon the inelegance of the draftsmanship of this imputation, which renders its meaning obscure. If I read it correctly, it translates to something to the following effect:

“By reason of regular political donations given by companies run by the plaintiff, and by the NSW Taxi Council, the plaintiff has obtained undue influence with successive Labor governments.”

79 A preliminary objection taken to contextual imputation (C) is that, in part, it asserts discreditable conduct on the part of the NSW Taxi Council in giving regular political donations, but that that does not impute any act or condition to the plaintiff. It is therefore incapable of giving rise to any imputation defamatory of him.

80 Second, it was argued that the imputation does not identify any act or condition defamatory of the plaintiff.

81 There is substance in this complaint. It arises from the inelegance of the draftsmanship (as to which I again forebear to comment). It can be remedied by the application of a thoughtful draftsman’s pen. As it stands, however, it must be struck out for reasons other than the obscurity of its meaning.

82 It was also argued that it is not an imputation “in addition to” either of those pleaded on behalf of the plaintiff. I am satisfied that it does differ in substance from the plaintiff’s imputation (a), in that it makes no reference to the acquisition of monetary gain; it differs in substance from the plaintiff’s imputation (b) because it goes further than asserting an attempt to influence, and asserts the completed act of obtaining undue influence.

83 I would not strike out contextual imputation (C) on that basis.

84 A different complaint was made about the pleading of the contextual truth defence in respect of the third publication. However, since it appears that this is the subject of discussion between the parties, and it appears that any defect can easily be remedied, it is unnecessary to rule thereon.

85 The order I make is that paragraphs 5(a), 9(a) and 13(a) and contextual imputations (A) and (C) of the Defence be struck out. The defendants are to have liberty to file an amended defence.

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