Kostov v Nationwide News Pty Ltd

[2018] NSWSC 858

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Kostov v Nationwide News Pty Ltd [2018] NSWSC 858
Hearing dates:	1 June 2018
Decision date:	08 June 2018
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Proceedings dismissed
Catchwords:	DEFAMATION – whether plaintiff’s imputations reasonably capable of arising – whether matter complained of capable of defaming plaintiff at all – meaning of defamatory – whether actions in defamation in Australia face the requirement of a threshold of seriousness as has been recognised in other jurisdictions
Legislation Cited:	Convention for the Protection of Human Rights and Fundamental Freedoms, opened for signature 4 November 1950 (entered into force 3 September 1953), Art 10
Cases Cited:	Berezovsky v Forbes [2001] EWCA Civ 1251 Burton v Crowell Pub Co 82 F(2d) 154 (1936) CPA Australia Ltd v The New Zealand Institute of Chartered Accountants (2015) 14 TCLR 149; [2015] NZHC 1854 Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227 Ettinghausen v Australian Consolidated Press Ltd (1991) 23 NSWLR 443 Farrow v Nationwide News Pty Ltd [2017] NSWCA 246 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716 Lesses v Maras [2017] SASCFC 48 Opai v Culpan [2016] NZHC 3004 Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; [2009] HCA 16 Sim v Stretch [1936] 2 All ER 1237 Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB); [2011] 1 WLR 1985 Youssoupoff v MGM Pictures Ltd (1934) 50 TLR 581
Category:	Procedural and other rulings
Parties:	Adriana Kostov (plaintiff) Nationwide News Pty Ltd (defendant)
Representation:	Counsel: Plaintiff self-represented MJ Lewis (defendant)   Solicitors: News Corp Australia Editorial Legal Office (defendant)
File Number(s):	2018/87917
Publication restriction:	None

Judgment

1. HER HONOUR: These are proceedings for defamation arising out of the publication of an article in The Daily Telegraph in print and on line. The plaintiff’s claim includes a complaint in respect of the publication of the same article in The Mercury but the defendant is not the publisher of that newspaper (the defendant has provided the plaintiff with information identifying the correct publisher but the plaintiff has not sought to add that entity as a party).

2. The proceedings came before the Court last week for the first listing, at which it is expected that a defendant will bring forward any preliminary objections to the pleading: see Practice Note SC CL 4, clauses 12 and 13. The current pleading is the amended statement of claim filed on 16 April 2018. The defendant submits that the matters complained of are incapable of conveying any of the imputations specified in that pleading and incapable of defaming the plaintiff at all.

3. In determining those objections, the test is whether the challenged imputations "could reasonably be found by a jury": Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716. Recently, in Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227, the Court of Appeal emphasised the care with which that test must be applied, adopting (at [135]) the description drawn from Berezovsky v Forbes [2001] EWCA Civ 1251 (at [16]) per Sedley LJ that the capacity determination is "an exercise in generosity not parsimony".

4. The defendant submits, in the alternative, that if the matters complained of are capable of conveying any defamatory imputation concerning the plaintiff, the claim does not surmount the “threshold of seriousness”, a requirement that has been recognised as an element of the cause of action for defamation in other jurisdictions but which has received little attention in Australia. The defendant also takes a small number of objections as to the form of the imputations which, in the result, it has not been necessary to determine.

Circumstances in which the claim is brought

5. The matters complained of concerned the hearing of sentencing proceedings against Ms Kostov’s former boyfriend, Mr Christian Iral, after he pleaded guilty to an offence of supplying a prohibited drug (cocaine). For the purpose of the proceedings on sentence, Ms Kostov wrote a letter to the sentencing judge addressing the offender’s offending, his time in custody, his attempts at rehabilitation and his plans for the future. In these proceedings Ms Kostov, who appears for herself, stated from the bar table that she was not present for the hearing of the proceedings on sentence against Mr Iral but that she did attend court in the afternoon, when sentence was passed.

6. The defendant published the article in the printed edition of the newspaper on 13 March 2018 under the headline “Hedging a bet; fund director’s plea for coke-dealing boyfriend”. The first part of the headline is a play on words referring to the fact that Ms Kostov formerly worked as a hedge fund director employed by Ms Gina Rinehart.

7. The article was presented with some prominence, occupying almost all of page 9 of the newspaper. Most of that space was taken up by the large font of the heading and a photograph of Ms Kostov leaving court. The article also included two inset photographs. One was evidently taken from Ms Kostov’s period working as a hedge fund director. The other was a small photograph of Ms Rinehart.

8. The main focus of the story was the letter written by Ms Kostov in support of Mr Iral. The article did also report on other aspects of the proceedings on sentence, including the offence to which Mr Iral had pleaded guilty and some limited detail of his background. However, it may be accepted, as submitted by Ms Kostov, that the primary focus of the article was the fact that a woman of her standing had written a letter in support of a man who had pleaded guilty to supplying cocaine.

9. The same article was published on line except under a different headline, “Cocaine dealer jailed as girlfriend director writes heartfelt letter to judge”. The online edition originally also included photographs of Ms Kostov but they were removed at her request and replaced with photographs of white powder obviously meant to depict cocaine.

10. Ms Kostov also sues on a tweet of the article by the journalist who wrote it. The words of the tweet are “cocaine dealer jailed as girlfriend director writes heartfelt letter to judge”, illustrated by a photograph of Ms Kostov leaving court with Mr Iral’s lawyer with the caption “fund director’s plea for coke dealing boyfriend”.

11. Ms Kostov contends that the article is seriously defamatory of her. Her main concerns are the prominence and sensationalism of the article, the reference to her having made a “plea” for her now former boyfriend and the description of her letter to the court as “heartfelt”. She contends that the letter was in fact no more than an objective account of relevant information. Ms Kostov is also concerned at the inclusion in the article of reference to Ms Rinehart, who has no connection with the criminal proceedings against Mr Iral, and the inclusion of a photograph of Ms Kostov from that time (compared with the less flattering photograph of her leaving court after the sentencing decision). Ms Kostov contends that the juxtaposition of two such different photographs of her suggests “a fall from grace” since the period of her employment by Ms Rinehart.

12. I can understand why Ms Kostov was upset by the article. It presents, as news, the unexceptional event of a person providing a character reference in criminal proceedings. Providing character evidence is a normal and necessary part of our criminal justice system. The fact that a person provides a reference in a criminal case does not mean that the person condones the criminal conduct for which the offender stands to be sentenced. It is a central feature of our criminal justice system that proceedings are conducted in open court and the press is of course free to report on such proceedings, but care must be taken not to do that in a way that discourages witnesses from fulfilling that important function. Nor should family members and partners of persons facing criminal proceedings be criticised for standing by their loved ones throughout the criminal process.

13. Unfortunately for Ms Kostov, while I can readily accept that it would have been upsetting to have her involvement in the sentencing proceedings reported in the manner in which it was, I do not think the article is capable of being defamatory.

14. The general test as to what is defamatory was discussed in the decision of the High Court in Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; [2009] HCA 16 at [4] to [7] per French CJ, Gummow, Kiefel and Bell JJ. The Court there approved the test stated by Lord Atkin in Sim v Stretch [1936] 2 All ER 1237, namely, that statements might be defamatory if “the words tend to lower the plaintiff in the estimation of right-thinking members of society generally”, acknowledging that the term “right-thinking” is understood to refer to ordinary, reasonable people of ordinary intelligence, experience and education. The Court also acknowledged at [4] that it is accepted “as something of an exception to the requirement that there be damage to a plaintiff’s reputation, that matter might be defamatory if it caused a plaintiff to be shunned or avoided, which is to say excluded from society.” The authority cited for that second aspect of the test as to what is defamatory is Youssoupoff v MGM Pictures Ltd (1934) 50 TLR 581 at 587, a case in which the defamatory imputation was that the plaintiff had been “ravished” by Rasputin, conduct for which she could not be regarded to be at fault but which would, in those times, cause her to be shunned or avoided or excluded from society.

15. The plaintiff’s imputations must be measured against those tests.

16. The amended statement of claim specifies 13 imputations, as follows:

a)   The plaintiff condones or doesn’t understand the seriousness of drug use and associated criminal activity;

c)   The plaintiff, a legal professional “begged” a judge for lenience for the accused;

d)   The plaintiff took time off work in a legal field to beg and plead to a judge for lenience for criminal activity;

e)   the plaintiff was with the accused at the time of his offending;

f)   The plaintiff knew of and accepted the accused’s offending;

g)   The plaintiff condones criminal activity and believes lenience is warranted;

h)   The plaintiff believes the offending behaviour deserved leniency;

i)   The plaintiff has nothing better to do than to take time off work and plead with a judge for leniency on serious crimes;

j)    The Plaintiff does not take pride in her personal appearance;

k)    The Plaintiff was distressed at the sentencing of the accused;

l)    The Plaintiff is no longer a high flyer and has resorted to pleading to a Judge for leniency for criminal activity

m)    The Plaintiff has had a fall from grace;

n)    The Plaintiff lacks the judgment of one working in the legal field;

o)    The Plaintiff lacks the appearance of one working in the legal field;

p)    The Plaintiff should not be working in the legal field as she pleads and begs for leniency on serious criminal activity;

q)    The Plaintiff has been used by the accused for assistance during his incarceration.

17. As there is a large amount of repetition in those imputations, it is convenient to consider them in groups by reference to the relevant defamatory sting identified.

Attribution of condoning criminal activity

18. A number of the imputations include an attribution of condoning criminal conduct or failing to appreciate its seriousness (with the allied notion of making an emotive plea for leniency). Imputations (a), (c), (d), (f), (g), (h), (i), (l), (n) and (p) fall into that category.

19. Nothing in the article says in terms that the plaintiff condones the use of drugs. As I understood Ms Kostov’s argument, the imputation is said to arise as a result of the very fact that the newspaper treated her provision of a character reference as news, suggesting implicit criticism of that conduct. For the reasons outlined above, I understand Ms Kostov’s consternation at the degree of attention devoted to her participation in the criminal proceedings. Her provision of a character reference for Mr Iral was hardly newsworthy, let alone such as to warrant the large splash it received. However, what the media regards as newsworthy does not define what is defamatory. I do not think reporting of the fact of providing character evidence and support for one’s partner in criminal proceedings is capable of lowering a person in the estimation of right-thinking members of society (as that expression is understood).

20. An aspect of Ms Kostov’s complaint reflected in imputations (c), (d) and perhaps (n) and (p) is the suggestion that her support for Mr Iral was emotional and lacked objectivity. She submitted that was conveyed by the reference to her “heartfelt letter” and her “plea” for leniency.

21. Imputation (c) as it currently stands is problematic because it includes the word “begged” in quotes. The word “begged” does not appear in any of the matters complained of. The Daily Mail appears to have published the same article and advertised it with a tweet stating, “he’s a sensitive soul: Gina Rinehart’s ex-staffer begs a judge for ….”. However, the defendant is not the publisher of that newspaper. The word used in the articles published in The Daily Telegraph (published by the defendant) is “plea” in the sentence “fund director’s plea for coke-dealing boyfriend”.

22. Leaving aside that difficulty, I would accept that the article is reasonably capable of conveying the sense that the plaintiff made an emotional or heartfelt plea to the judge for leniency but it is doubtful whether that is defamatory. It will be necessary to return to the significance of that conclusion.

23. In any event, for the reasons stated, I am satisfied that imputations (a), (c), (d), (f), (g), (h), (i), (l), (n) and (p) are incapable of being carried by the matter complained of.

Attribution of being present at the time of the offending

24. Imputation (e) is that the plaintiff was with the accused at the time of his offending. There is nothing in the article to suggest that is the case. Ms Kostov submitted that the article conveys that meaning because it does not expressly state that she was not with the accused at the time of his offending. That reflects a forced, strained or overly sensitive reading of the matter complained of. In my view, imputation (e) is incapable of being carried by the article.

Imputations drawn from the photographs

25. Imputations (j), (k), (m) and (o) all concern Ms Kostov’s appearance and appear to have been drawn on the basis of the two photographs included in the matter complained of.

26. It is understandable that Ms Kostov would have a sense of grievance at having been photographed against her wish as she left court. She complains of the juxtaposition of the photograph taken at that time with the photograph drawn from her time as a hedge fund director. The latter has the appearance of having been taken in a formal setting by a professional photographer and (relevantly for present purposes) is a lovely photograph of Ms Kostov. The photograph of her leaving court is not “horrible”, as she perceives, but is perhaps less flattering. That is unsurprising, having regard to the fact that it was taken by a newspaper photographer against Ms Kostov’s wish at a time when she was presumably not expecting to be photographed.

27. However, those concerns do not easily translate into a cause of action in defamation. The publication of a photograph can be defamatory if it exposes a person to more than trivial ridicule (see Burton v Crowell Pub Co 82 F(2d) 154 (1936); Ettinghausen v Australian Consolidated Press Ltd (1991) 23 NSWLR 443, each a case involving men’s genitals). The present case is not a case of ridicule. The publication of an unflattering photograph, while potentially upsetting for the subject, is not a cause of action in itself. In the present case, nothing in the words of the matter complained of makes any suggestion of the kind captured in imputations (j), (k), (m) and (o). I do not think the inclusion of the photographs results in a publication that is capable of conveying those meanings.

Relationship with the accused

28. Finally, imputation (q) is that the plaintiff has been “used” by the accused for assistance during his incarceration. That imputation is drawn from paragraph 17 of the matter complained of, which quotes Mr Iral as having said to the sentencing judge during his proceedings on sentence “she [Ms Kostov] is willing to help me find work through her contacts and she is a very positive person to be with”.

29. I do not understand how it could be thought that those words convey the imputation captured in imputation (q), or indeed any attribution defamatory of Ms Kostov. Again, I think that is an overly sensitive reading of the matter complained of.

30. For those reasons, I am satisfied that none of the imputations specified in the amended statement of claim is capable of being carried by the matter complained of. Further, I am satisfied that the article is incapable of defaming Ms Kostov. The most the article is capable of saying is that the plaintiff made a heartfelt plea for leniency when her former boyfriend was sentenced for a serious drug offence. I do not think that meaning is capable of being regarded as defamatory.

Threshold of seriousness

31. The defendant alternatively submitted that, even if the matter complained of is capable of conveying some defamatory meaning, it would not meet the threshold of seriousness required for an action in defamation to be maintained in the Court. The existence of such a requirement has not previously been acknowledged in Australia. The defendant’s argument derives principally from the decision of Justice Tugendhat in the English case of Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB); [2011] 1 WLR 1985. That was a case in which the author of a book sued over the publication of a review of the book published in The Daily Telegraph in the UK. Part of the plaintiff’s complaint related to the following words in the review:

“She also claims that she practises ‘reflexive ethnography’, which means that her interviewees have the right to read what she says about them and alter it. In journalism we call this ‘copy approval’ and disapprove.”

32. The plaintiff contended that those words conveyed the following meanings:

“That she had given her interviewees the right to read what she proposed to say about them and alter it, a highly reprehensible practice which, in the world of journalism was known as ‘copy approval’;

That she had thereby shown herself to be untrustworthy and fatally lacking in integrity and credibility as a researcher and writer.”

33. The newspaper sought summary judgment in respect of that part of the claim. One of the grounds for that application was the application of the legal principle referred to as “the threshold of seriousness”, which would hold that the hypothetical reasonable reader must not be unduly sensitive, so that there must be a threshold of seriousness before an action in defamation could properly be maintained in the Court. The argument was based in part on Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms, opened for signature 4 November 1950 (entered into force 3 September 1953) which of course has no application in Australia. Separately, however, the principle was said to find support in binding common law principle. The newspaper submitted that the existence of a “threshold of seriousness” is supported by the following words of Lord Atkin in Sim v Stretch [1936] 2 All ER 1237 at 1242:

“That juries should be free to award damages for injuries to reputation is one of the safeguards of liberty. But the protection is undermined when exhibitions of bad manners or discourtesy are placed on the same level as attacks on character; and are treated as actionable wrongs.”

34. Justice Tugendhat’s judgment includes a careful analysis of the various definitions of what is defamatory. In Australia, I would understand the test to be as set out at [14] above. In respect of that definition, the newspaper argued in Thornton that the test “would the words tend to lower the plaintiff in the estimation of right-thinking members of society generally?” is not a complete definition of what is defamatory and that the other part of the definition is “would the lowering of the plaintiff in the estimation of such people be sufficiently serious so as to surmount the threshold envisaged (but not defined) by Lord Atkin?” (at [81]).

35. Justice Tugendhat accepted that submission, holding at [90] that “whatever definition of ‘defamatory’ is adopted, it must include a qualification or threshold of seriousness, so as to exclude trivial claims”.

36. His Honour noted at [93] that the existence of a requirement of a threshold of seriousness would explain why the law of defamation presumes that damage has been suffered by a claimant. His Honour said:

“If the likelihood of adverse consequences for a claimant is part of the definition of what is defamatory, then the presumption of damage is the logical corollary of what is already included in the definition. And conversely, the fact that in law damage is presumed is itself an argument why an imputation should not be held to be defamatory unless it has a tendency to have adverse effects upon the claimant. It is difficult to justify why there should be a presumption of damage if words can be defamatory while having no likely adverse consequence for the claimant.”

37. In my respectful opinion, there is much force in that reasoning. Justice Tugendhat’s carefully reasoned judgment has persuaded me that the definition of “defamatory” adopted in Australia must equally comprehend a qualification or threshold of seriousness so as to exclude trivial claims.

38. Mr Lewis, who appears for the defendant, noted that the principle in Thornton has been approved by the High Court of New Zealand in CPA Australia Ltd v The New Zealand Institute of Chartered Accountants (2015) 14 TCLR 149; [2015] NZHC 1854 at [120] per Dobson J and cited with approval in Opai v Culpan [2016] NZHC 3004 at [32] per Bell J.

39. In a more recent decision of the Full Court of the Supreme Court of South Australia in Lesses v Maras [2017] SASCFC 48, the principle in Thornton was interpreted perhaps differently. The Court said at [125]:

“The passage from the judgment of Tugendhat J relied upon by Mr Lesses should be understood as merely an elucidation of the requirement that, to be defamatory, an imputation must tend to lower the estimation of the plaintiff by the community and an emphasis that an adverse opinion may be expressed about a person without its having such a tendency. The seriousness of the adverse opinion is obviously a factor to be taken into account in determining whether its expression does tend to lower the estimation of the plaintiff by the community. The passage should not be understood as creating an additional element of the cause of action for defamation.”

40. Mr Lewis very properly drew that passage to my attention during argument in the present case, apprehending it to derogate from his argument. Upon reflection, I do not think it does. Whether the “threshold of seriousness” is characterised as an additional element of the cause of action for defamation or simply an aspect of the definition of what is defamatory, the Court in Lesses acknowledged that the “seriousness” of an adverse opinion is “obviously a factor to be taken into account” in determining whether an imputation meets the Sim v Stretch test. The judgment in Lesses was after a trial; there is no reason not to extend that reasoning to a pre-trial question as to whether an action can be maintained.

41. Finally, Mr Lewis submitted that, leaving aside any analysis of Thornton, there is already a threshold of seriousness recognised at common law in Australia. He relied on the decision of Hunt J in Ettinghausen at 448 where his Honour referred with approval to the principle stated in Burton v Crowell Pub Co that, “because the matter complained of was calculated to expose the plaintiff to more than trivial ridicule, it was prima facie actionable, despite the fact that it asserted nothing about the plaintiff himself ….” (emphasis added).

42. Those remarks provide some reinforcement for my conclusion that the principle stated in Thornton may appropriately be held to apply in Australia.

Application of the threshold of seriousness in the present case

43. If my conclusion is wrong that the matter complained of is incapable of defaming Ms Kostov, I consider that the claim must be dismissed on the basis that it fails to meet the threshold of seriousness. To the extent that the article focusses on Ms Kostov’s provision of support for the offender when he faced serious charges, it appears to be true: cf Farrow v Nationwide News Pty Ltd [2017] NSWCA 246. It should be noted in that context that Ms Kostov evidently understood the word “heartfelt” to indicate love or romance whereas the ordinary meaning of that word is “sincere”.

44. In any event, I do not think the attribution of emotion or lack of objectivity in a context where Ms Kostov’s then boyfriend was being sentenced to a term of imprisonment, if even defamatory, is sufficiently serious to sustain an action in defamation according to the principle stated in Thornton.

45. For those reasons, I am satisfied that the plaintiff’s claim should be summarily dismissed.

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Amendments

05 July 2018 - Amendments to paras [5], [11], [30]: insert the word "former" in front of the word "boyfriend";

[43] deletion of words "her boyfriend", replaced with "the offender".

[44] insertion of word "then" in front of "boyfriend".