Reynolds v Nationwide News Pty Ltd - [2001] WASC 116

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: REYNOLDS -v- NATIONWIDE NEWS PTY LTD & ORS [2001] WASC 116

CORAM: HASLUCK J

HEARD: 4 MAY 2001

DELIVERED : 18 MAY 2001

FILE NO/S: CIV 2325 of 2000

BETWEEN: KEVIN NOEL REYNOLDS
Plaintiff
AND
NATIONWIDE NEWS PTY LTD (ACN 008 438 828)
First Defendant
JOHN FLINT
Second Defendant
TERRY McPARLAND
Third Defendant

Catchwords:

Defamation - Application to strike out defence - Qualified privilege - Plea of the Lange qualified privilege - No plea of reasonableness of conduct in relation to publication - Adequacy of qualified privilege plea at common law - Fair comment - Facts relied on not stated - Whether defence defective

Legislation:

Rules of the Supreme Court 1971, O 20 r 19(1)(a)

Result:

Application to strike out allowed with leave to replead

Representation:

Counsel:

Plaintiff:     Mr R W Richardson
First Defendant             :     No appearance
Second Defendant         :     No appearance
Third Defendant           :     In person

Solicitors:

Plaintiff:     Gadens Lawyers
First Defendant             :     No appearance
Second Defendant         :     No appearance
Third Defendant           :     In person

Case(s) referred to in judgment(s):

Adam v Ward [1917] AC 309
Buddhist Society of Western Australia Inc v Bristile Ltd [2000] WASCA 210
Control Risks Ltd v New English Library Ltd [1990] 1 WLR 183
Henwood v Harrison (1872) LR 7 CP 606
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520
Marks v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA) (1995) 14 WAR 360
Nationwide News Pty Ltd v International Financing & Investment Pty Ltd [1999] WASCA 95
Ralph M Lee (WA) Pty Ltd v Fort (1991) 4 WAR 176
Smiths Newspapers Ltd v Becker (1932) 47 CLR 279
Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632

Case(s) also cited:

Gumina v Williams (No 2) (1990) 3 WAR 351

HASLUCK J: This is an application by the plaintiff in a defamation claim to strike out certain paragraphs of the defence of the third defendant pursuant to O 20 r 19 of the Rules of the Supreme Court 1971.
Order 20 r 19(1) provides that the court may at any stage of the proceedings order to be struck out any pleading on the ground that
(a)it discloses no reasonable cause of defence; or
(c)it may prejudice, embarrass or delay the fair trial of the action.
I digress briefly to note that the plaintiff recently brought a similar application in respect of a statement of defence filed on behalf of the first and second defendants. Written reasons were published in respect of that application on 6 April 2001. Certain portions of the relevant statement of defence were struck out but with leave to replead.
The plaintiff pleads in his statement of claim that he was at all material times the secretary of the Construction Forestry Mining and Engineering Union ("the Union"). The first defendant is the publisher of the Sunday Times newspaper. The second defendant is a journalist employed by the newspaper and the author of the article complained of. The third defendant, Terry McParland, was at all material times a member of the Union.
The plaintiff pleads that in an article published under the heading "Bribe Offer", the defendants were responsible for publishing various defamatory imputations of and concerning the plaintiff. The article commenced by saying that a bribe had been offered to kill off a challenge to Labor power broker Kevin Reynolds in next month's Union election. Dissident campaigner, Terry McParland, was told he could have what he wanted if he withdrew his candidature in the Union ballot. The article said that the offer was put to Mr McParland by the plaintiff's deputy, Joe McDonald, at a secret meeting in King's Park. The article noted that the plaintiff had not previously been opposed in elections "during his 25-year reign at the helm of the State's main construction union."
Some pages later, under the heading "Building union rebel is offered big bribe", the article went on to refer to the alleged meeting in King's Park in more detail. Reference was made to the plaintiff, Mr Reynolds, being allegedly in charge of the Labor Party's centre faction in WA and to clashes with the parliamentary leadership of the Party. Mr McParland is alleged to have told the newspaper that the bribe was indicative of corruption within the Union. Reference was also made to the role of Joe McDonald as the assistant secretary and the most visible face of the Union on construction sites.
The article said that: "Where his boss Kevin Reynolds is the brains of the organisation, Mr McDonald is the chief protagonist." The article also said that former Union senior vice-president, Ron Kinney, was due to face trial later in the year on a charge of receiving a secret commission. It was said also that the Union was embroiled in extortion allegations concerning a dispute at Murrin Murrin.
The headings and the words comprising the article are described in par 5 of the statement of claim as the words complained of.
Various imputations said to be inherent in the words complained of were set out in par 6.1 to par 6.6 of the statement of claim. For example, by par 6.1 it is said that the words meant and were understood to mean in their ordinary and natural meaning that the plaintiff had, through his agent, offered to a candidate opposing him in Union elections, a substantial bribe not to run against him. The following subparagraphs complain of alleged defamatory meanings in respect of the plaintiff offering a bribe to advance his personal interest, committing the offence of extortion in respect of the Murrin Murrin dispute, conducting himself so as to give rise to a suspicion on reasonable grounds that he was guilty of extortion, causing the summary dismissal of the third defendant out of spite and ill will and falsely representing that the third defendant had been sacked as a Union organiser for incompetency.
The statement of claim goes on to assert that the plaintiff has been injured in his character, credit and reputation as a Union official and sets out various facts and matters which are said to justify claims for compensatory and exemplary damages against all three defendants.
The third defendant, by his statement of defence, does not plead to certain paragraphs of the statement of claim on the ground that the matters pleaded are not directed to him. As to the words for which he might be held responsible the third defendant denies that they bore or were understood to bear or were capable of bearing or being understood to bear any of the meanings complained of.
In par 7 of his defence the third defendant pleads that the words complained of were published on an occasion of qualified privilege. Particulars provided in support of this plea include that (a) the words were published in the context of forthcoming union elections in which the plaintiff and third defendant were standing for election to the same office; (b) that the words were in the nature of "political discussion" as to the plaintiff's fitness for office, as a trade union leader; (c) that the words were published as "political speech" concerning a range of issues; (d) that the union was at all material times a trade union.
The third defendant goes on to plead in par 8 that the defendants had a common and corresponding interest in the subject matter of the word. I will call the defence reflected in par 7 and par 8 the "Lange privilege plea".
The third defendant says further, and in the alternative, that he was under a moral duty to publish the said words to the said first and second defendants who had a like duty and/or interest to receive them. I will call this the "common law privilege plea". It is material to note that no particulars are provided in support of the common law privilege plea directed to the question of whether the publication took place on an occasion of qualified privilege.
In par 10 the third defendant pleads that further, or in the alternative, the words complained of were fair comment made in good faith and without malice upon a matter of public interest, namely, the fitness of the plaintiff for the office of secretary of the union in the forthcoming union election. I note in passing that no particulars are provided in support of the fair comment plea and nor is there any indication as to what are the facts upon which any comment contained in the article complained of is based.

Qualified privilege

The plaintiff submits that the Lange qualified privilege plea and the common law qualified privilege plea, as the pleas are expressed in the pleading, do not disclose a reasonable defence and further, and in any event, are presented in a form which may prejudice, embarrass or delay the fair trial of the action.
It will be useful to look briefly at the principles bearing upon the issues raised by the plaintiff.
The common law recognises that there are occasions upon which, on grounds of public policy and convenience, a person may make statements about another which are defamatory and in fact untrue. On such occasions of privilege a person is protected if the statement was fairly warranted by the occasion and so long as it is not shown that he made the statement with malice, that is to say, knowing it to be untrue or with some indirect or improper motive. These occasions are called occasions of qualified privilege, for the protection which the law, on grounds of public policy, affords is not absolute but depends on the honesty of purpose with which the defamatory statement is made. Gatley on Libel and Slander, 9th ed, par 14.1.
Generally speaking, privileged occasions are those where the maker of the statement has a duty to make the statement and the recipient has a corresponding interest to receive it.
No privilege arises if the exigency of the situation does not warrant the protection of the common interest by the means employed. Whether the duty or interest contended for by a publisher exists must be determined upon a consideration of the surrounding circumstances and what is reasonable in those circumstances. Occasionally there may arise cases where privilege may attach to publication of use in a newspaper but in most cases a qualified privilege will not be available because there is no community of interest between the publisher and the general body of readers. Adam v Ward [1917] AC 309; Smiths Newspapers Ltd v Becker (1932) 47 CLR 279 at 304; Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632 at 658.
The position at common law can be conveniently illustrated for present purposes by reference to Marks v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA) (1995) 14 WAR 360. In that case the plaintiff Marks made comments about a redevelopment proposal for the old Swan Brewery site and about the defendant union's actions in opposing the project. The union published an article in its journal, bearing upon the actions of the plaintiff whereupon the plaintiff sued the defendant for libel. Owen J held that a defamatory publication made in reply to an attack by a person where the purpose of the publication is to vindicate the character or actions of the publisher is privileged, but the response must be commensurate with the occasion. He was prepared to accept that the union was entitled to explain its stance to its members in a widely disseminated journal. He held, however, that the union comments went beyond the requirements of the occasion with the result that the defendant was not entitled to the protection afforded by the defence of qualified privilege. In other words, defamatory material will only be protected by the privilege if it is relevant to the matters at the heart of the duty or interest: Henwood v Harrison (1872) LR 7 CP 606 at 622.
The decision of the High Court in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 reflected various developments in this area of the law and marked out an extension to the defence of qualified privilege in regard to political discussion.
The High Court noted at p 570 that the basis of the common law rule is that reciprocity of interest or duty is essential to a claim of qualified privilege at common law. Only in exceptional cases has the common law recognised an interest or duty to publish defamatory matter to the general public. However, the common law doctrine as expounded in Australia must now be seen as imposing an unreasonable restraint on that freedom of communication, especially communication concerning government and political matters, which the common convenience and welfare of society now requires.
Accordingly, the High Court went on to indicate at 571 that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. Consequently, the categories of qualified privilege must now be recognised as protecting a communication made to the public on a government or political matter.
The High Court said further that a publisher relying on that category of qualified privilege to protect a publication that would otherwise have been held to have been made to too wide an audience must establish that its conduct in making the publication was reasonable in all the circumstances. As a general rule, a defendant's conduct in publishing defamatory material will not be reasonable unless the defendant had reasonable grounds for believing the defamatory imputation was true, took proper steps so far as they were reasonably open to verify the accuracy of the material, and did not believe the imputation to be untrue. The privilege will be defeated if the plaintiff proves that the publication was actuated by ill‑will or other improper motive.
The application of the Lange principle can be conveniently illustrated for present purposes by reference to two recently decided cases in this State, namely, Nationwide News Pty Ltd v International Financing & Investment Pty Ltd [1999] WASCA 95 and by the Buddhist Society of Western Australia Inc v Bristile Ltd [2000] WASCA 210.
The respondent in the Nationwide News case had made a complaint about the services provided by a certain bank's home loan hotline. Some media coverage about the matter included reference to statements made by the Chairman of the Australian Competition and Consumer Commission and by the managing director of the bank.
The article complained of allegedly suggested that the plaintiff had attempted to extort money from the bank and, when that failed, that it had reported the matter to the ACC out of malice and to place the bank under unfair commercial pressure.
Nationwide News raised various defences including a plea that the article was published on an occasion of qualified privilege in that it was a communication made to the public on a government or political matter in the manner allowed for by the Lange rule.
Owen J noted that a Lange qualified privilege plea will often give rise to a threshold question as to whether the material amounts to information, opinions or arguments concerning government and political matters that affect the Australian people. Owen J noted that the High Court gave little guidance on that issue with the result that it remains to be worked out on a case by case basis.
In the event, a majority of the Full Court held that the parts of the article that refer to the conduct of the respondent on the one hand and which comment on the actions of the ACC and its chairman on the other were quite separate and distinct. The latter parts were not sufficiently connected to the former to make them relevant to the discussion about the appropriateness of the actions of the chairman of the ACC. Accordingly, the impugned statements about the conduct of the respondent were not relevant to the communication about government or political matters. This meant that the Lange qualified privilege defence could not be maintained.
The Full Court also held that the trial Judge was right to conclude that in making the comments about the respondent's conduct when the occasion was, purportedly, one of communications concerning the activities of the chairman of the ACC, the publisher of the article went beyond the bounds for which the privilege exists in a way that could not be regarded as reasonable.
This brings me to the second of the two cases, namely, the Buddhist Society case.
In this case the Buddhist Society had placed material on its web files which were said to be defamatory of the plaintiff in complaining about the operation of the plaintiff's heavy haulage vehicles on a route which ran past the Buddhist Society's monastery. The material on the website included an open invitation to readers to write a letter of protest to the Minister for the Environment and a letter of protest to the plaintiff's managing director. A suggested form of letter to each proposed recipient was included in the web files.
The Full Court held that each letter should be regarded as a discrete publication with the result that the Lange defence could only apply to the letter raising a political issue. The Full Court also held, consistently with the reasoning of the High Court in Lange, that reasonableness of conduct was an essential element of the qualified privilege in question with the result that the defence could not be made out unless the publisher proved reasonableness of conduct as part of his case. It followed that it was not for the plaintiff to prove that the conduct of the publisher was unreasonable but for the publisher to prove that his conduct was reasonable. This meant that the defence was not sufficiently pleaded unless there was an express averment not only that the material was of the kind that might be protected by the qualified privilege but also that the making of the publication was reasonable.
In practical terms this seems to require that a defendant who seeks to rely upon the Lange qualified privilege defence must plead firstly (as in the Nationwide News case) that the publication was reasonable in being sufficiently connected to the matter in controversy and a reasonably appropriate form of response; and, secondly, that the defendant had reasonable grounds for believing the defamatory imputation was true and had taken proper steps to verify the accuracy of the published material.
When I apply these principles to the circumstances of the present case it becomes apparent immediately that the statement of defence of the third defendant, as presently expressed, does not disclose a reasonable defence because par 7 and par 8 do not set out the facts and matters upon which the third defendant relies in contending that its conduct was reasonable in publishing the material complained of. Further, and in any event, even if the particulars given can be regarded as an assertion by implication that the defendant's conduct was reasonable, bearing in mind the references to a forthcoming union election, it seems to me that, in any event, the pleading in its present form must be struck out as embarrassing. The plaintiff has to be told, in order to know what case is being advanced by the third defendant in regard to this issue, what facts and matters the third defendant intends to rely upon at trial in order to establish that his conduct was reasonable.
It follows from earlier discussion concerning the Nationwide News case that a threshold issue may also be thought to arise as to whether the words complained of can truly be characterised as a form of political discussion. Political discussion is generally thought to relate to the relationship between citizens and government and the policies, structure, composition, role obligations, purposes or activities of government. See Ralph M Lee (WA) Pty Ltd v Fort (1991) 4 WAR 176. In the present case, there is indeed some reference in the Sunday Times article to the plaintiff's involvement in political affairs but, on another view of the matter, it might be argued to the contrary that the article was essentially concerned with the internal affairs of a particular union and the activities of union officials.

For the moment, there appears to be no need to express a view about this latter issue because I have made a determination in any event that par 7 and par 8 should be struck out on the grounds that the Lange privilege plea, as presently formulated, does not disclose a reasonable defence and is embarrassing. I will allow the third defendant leave to replead these paragraphs and it may be that the repleading will be sufficient to cover all issues.
When I turn to the defence of common law qualified privilege reflected in par 9, it becomes apparent that the plea of privilege in its present form is not sufficient. It follows from earlier discussion concerning the legal principles that the third defendant is obliged to set out the facts and matters which are said to give rise to an occasion of privilege. In other words, the defendant is obliged to indicate the basis upon which he says that he was under a legal or moral duty to publish the words to the first and second defendants and the basis upon which those defendants had a like duty and/or interest to receive the words in question.
I have already noted that according to the decided cases a newspaper is not generally thought to have a community of interest with its readers in respect of matters published in its columns sufficient to give rise to the requirement of reciprocity. Thus, in the context of the present case, it becomes particularly important for the third defendant to set out exactly why it is said there was a duty upon him to place the matters of concern to him before the defendant publisher and the second defendant as one of its journalists. Again, I will not seek to resolve any such issue at this stage because I will allow to the third defendant leave to replead its common law qualified privilege plea in par 9. It may be that issues of the kind I have just mentioned will be sufficiently addressed in the repleaded statement of defence.

Fair comment

The third defendant pleads in par 10 of the statement of defence that further, or in the alternative, the said words were fair comment made in good faith and without malice upon a matter of public interest, namely, the fitness of the plaintiff for the office of secretary in the forthcoming union election. I have already noted that particulars have not been provided in support of this plea.
It is a defence to an action for defamation for the defendant to prove that the words complained of were published by him as fair comment on a matter of public interest. Fair comment on matters of public interest is deemed of such surpassing social importance in a democratic community as to outweigh the competing claim to unqualified protection of individual reputation. Nonetheless, for the defence to be available, it must be indicated with reasonable clarity by the words themselves, taking them in their context and the circumstances in which they were published, that the imputations conveyed by them are to be understood as comment, not statements of fact: Fleming "The Law of Torts", 9th ed, page 648.
The defence, it is sometimes said, cannot succeed unless the opinion stated is based on facts actually presented, or in fact present, to the minds of the readers or listeners, so that they may be in a position to judge whether it is such as might be fairly formed on the facts.
In O 20 r 13A(2) of the Rules of the Supreme Court provides that where the defendant alleges that, insofar as the words complained of consist of statements of fact, they are true in substance and in fact, and insofar as they consist of expressions of opinion, they are fair comment on a matter of public interest, or pleads to the like effect, he must give particulars stating which of the words complained of he alleges are statements of fact and of the facts and matters he relies on in support of the allegation that the words are true.
There are a number of other rules bearing upon the manner in which the defence of fair comment must be pleaded, including the requirement that the defendant must also spell out with precision what is the comment which he or she will say attracts the defence of fair comment: Control Risks Ltd v New English Library Ltd [1990] 1 WLR 183 at 189. In the present case, however, these rules need not be explored for the time being because it is immediately apparent that in its present form par 10 of the statement of defence is not sufficient. In the absence of sufficient particulars as to the facts and matters relied upon in support of the plea, a reasonable defence has not been disclosed and the plea in its present form must be struck out. It is also embarrassing. Leave to replead will be allowed in respect of this matter also.

Summary

In summary then, I will allow the plaintiff's application. The consequence is that par 7 to par 9 inclusive and par 10 of the third defendant's statement of defence will be struck out pursuant to O 20 r 19, but upon the basis that the third defendant will be allowed to replead. I am conscious that the third defendant was unrepresented at the hearing before me. Accordingly, subject to any further submissions made by the parties, I consider that a period of 28 days ought to be allowed to the third defendant to file and serve an amended statement of defence reflecting any repleading as it will probably be necessary for the third defendant to obtain legal advice in respect of the matters dealt with in this application. I will hear from the parties as to the question of costs.