Schiff v Nine Network Australia Pty Ltd (No 3) - [2023] FCA 336

FEDERAL COURT OF AUSTRALIA
Schiff v Nine Network Australia Pty Ltd (No 3) [2023] FCA 336

File number(s): NSD 1086 of 2021

Judgment of: JACKMAN J

Date of judgment: 14 April 2023

Catchwords:
PRACTICE AND PROCEDURE – application for leave to further amend defence – application to strike out defence – where strike out application dealt with by reference to further amended defence – whether proceedings should be dismissed against the second respondent

DEFAMATION – whether particulars of justification are defective – where particulars provide a basis for establishing a possibility of knowledge but insufficient to establish a probability of knowledge – suspicions or opinions of guilt held by a regulatory or investigative body not sufficient to prove guilt – whether particulars, if assumed to be established, provide a defence of justification

Legislation:
Federal Court Rules 2011 (Cth) rr 16.41, 16.43

Defamation Act 2005 (NSW) ss 4, 25, 38

Cases cited:
Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632

Burstein v Times Newspapers Ltd [2001] 1 WLR 579

Channel Seven Sydney Pty Ltd v Mohammed [2010] NSWCA 335; (2010) 278 ALR 232

Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165

Herron v HarperCollins Publishers Australia Pty Ltd (No 2) [2022] FCAFC 119

LCA Marrickville Pty Ltd v Swiss Re International SE [2022] FCAFC 17; (2022) 290 FCR 435

O’Brien v Australian Broadcasting Corporation [2017] NSWCA 338; (2017) 97 NSWLR 1

Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473

Rushv Nationwide News Pty Ltd (No 2) [2018] FCA 550; (2018) 359 ALR 564

Schiff v Nine Network Australia Pty Ltd (No 2) [2022] FCA 1120

Division: General Division

Registry: New South Wales

National Practice Area: Other Federal Jurisdiction

Number of paragraphs: 76

Date of hearing: 6 April 2023

Counsel for the Applicant: Ms S Chrysanthou SC and Mr N Olson

Solicitor for the Applicant: Kennedys (Australasia) Partnership

Counsel for the Respondents: Mr D Sibtain SC and Mr M Lewis

Solicitor for the Respondents: Minter Ellison

ORDERS

NSD 1086 of 2021

BETWEEN:
PETER DAVID SCHIFF

Applicant

AND:
NINE NETWORK AUSTRALIA PTY LTD

First Respondent

THE AGE COMPANY PTY LTD

Second Respondent

NICHOLAS MCKENZIE (and others named in the Schedule)

Third Respondent

ORDER MADE BY:

JACKMAN J

DATE OF ORDER:

14 APRIL 2023

THE COURT ORDERS THAT:
1.Leave to file a Further Amended Defence in the form annexed to the respondents’ Interlocutory Application dated 20 March 2023 and marked “A” be refused.
2.The respondents be given leave to re-plead paragraphs 13 and 14 and the particulars of justification.
3.Any re-pleading of the proposed Further Amended Defence be provided to the applicant by 12 May 2023.
4.The matter be stood over to 19 May 2023 at 9.30am for a further case management hearing before me.
5.The respondents pay the applicant’s costs of the interlocutory application dated 20 March 2023.

Note: Entry of orders is dealt with in Rule 39.32 of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FCA 336
Decision Date: 14 April 2023

CaseChat Overview and Summary

Schiff v Nine Network Australia Pty Ltd (No 3) involved a defamation claim brought by the plaintiff against the defendants for alleged defamatory statements made in a television program broadcast by the second defendant. The defendants sought leave to file a further amended defence and the plaintiff applied to strike out parts of the proposed further amended defence. The Federal Court had to decide whether the defendants should be granted leave to further amend their defence and if any parts of the defence should be struck out.

The court found that the defence of justification would require particulars of actual knowledge by Schiff that he was doing business with criminals and money launderers and was unconcerned about that. The court determined that the particulars provided by the defendants were insufficient to establish a probability of knowledge, and therefore, were defective. The court noted that suspicions or opinions of guilt held by a regulatory or investigative body were not sufficient to prove guilt. However, the court held that the respondents should have leave to re-plead the defence of justification and the particulars of justification, taking into account the court's reasons for the shortcomings of their pleading.

The court found that the defendants' reliance on the Burstein principle for mitigation of damages was also defective as there were no particulars provided as to what was said to be the relevant background context. The court held that leave to rely on this aspect of the pleading should be refused, with leave to re-plead. The court also noted that the defendants had not yet had an opportunity to argue their substantive challenge to the defence of justification.

The court refused leave to file a Further Amended Defence in the form annexed to the respondents’ Interlocutory Application dated 20 March 2023. The court granted the respondents leave to re-plead paragraphs 13 and 14 and the particulars of justification. The court ordered that any re-pleading of the proposed Further Amended Defence be provided to the applicant by 12 May 2023 and the matter be stood over to 19 May 2023 at 9.30am for a further case management hearing before the court. The court also ordered that the respondents pay the applicant’s costs of the interlocutory application dated 20 March 2023.

Orders

Orders of the court

1. Leave to file a Further Amended Defence in the form annexed to the respondents’ Interlocutory Application dated 20 March 2023 and marked “A” be refused.

2. The respondents be given leave to re-plead paragraphs 13 and 14 and the particulars of justification.

3. Any re-pleading of the proposed Further Amended Defence be provided to the applicant by 12 May 2023.

4. The matter be stood over to 19 May 2023 at 9.30am for a further case management hearing before me.

5. The respondents pay the applicant’s costs of the interlocutory application dated 20 March 2023.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

A defence of justification would require particulars of actual knowledge by Schiff that he is doing business with criminals and money launderers, and is unconcerned about that. If I had not found particulars 14, 27, 33, 39, 55 and 70 to be defective, then I would have found that the cumulative effect of the proposed particulars was capable of supporting a defence of justification for this imputation. Conclusion on Defence of Justification Accordingly, leave to rely on paragraph 13 of the proposed Further Amended Defence should be refused, together with the particulars provided for the defence of justification as set out in the proposed Further Amended Defence. In my opinion, the respondents should have leave to re-plead paragraph 13 and the particulars of justification. Although this is the third attempt by the respondents to plead their defence, the applicant’s substantive challenge to the defence of justification has not been heard and decided until now. In my opinion, the respondents should have a further opportunity, taking into account my reasons as to the shortcomings of their pleading, to plead a defence of justification, as well as mitigation of damages, if they are instructed to do so. While this may prejudice the applicant in terms of the prolongation of the proceedings, and (as a speculative possibility) in terms of the amount of security for costs, any such prejudice is outweighed in my opinion by the necessity in the interests of justice of affording the respondents a further opportunity to re-formulate their defence.Paragraph 14: Mitigation of Damages In relation to the mitigation of damages, the respondents rely on: (a) the substantial truth of such of the imputations as are ultimately proved to be true; (b) matters proved in support of the defences; and (c) the circumstances in which it is proved that the matters complained of were published: paragraph 14(a)-(c). The respondents accept that if the Court refuses leave for the defence of justification in paragraph 13 and its particulars, it follows that leave would be refused for sub-paragraph 14(a)-(b). As to paragraph 14(c), the applicant does not complain about this aspect of the pleading. Sub-paragraph 14(d) relies upon background context material as a factor in mitigation of damages pursuant to s 38 of the Defamation Act. This is an invocation of the so-called “Burstein principle”, recognised in Burstein v Times Newspapers Ltd [2001] 1 WLR 579. No particulars are given in the current proposed Further Amended Defence as to what is said to be the relevant background context other than a generalised reference to the proposed particulars of justification, which I have rejected. In Rushv Nationwide News Pty Ltd (No 2) [2018] FCA 550; (2018) 359 ALR 564 at [45], Wigney J said that mere resort to the label “directly relevant background context” is not sufficient as a pleading. Leave to rely on sub-paragraph 14(d) should be refused in the absence of particulars, with leave to re-plead. Although the submissions at this interlocutory hearing dealt with the constraints which apply in invoking the Burstein principle, this is not the occasion for determining what aspects of the current proposed particulars of justification are capable of being re-fashioned for the purpose of mitigation of damages.The Position of the Second Respondent

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	NSD 1086 of 2021
Judgment of:	JACKMAN J
Date of judgment:	14 April 2023
Catchwords:	PRACTICE AND PROCEDURE – application for leave to further amend defence – application to strike out defence – where strike out application dealt with by reference to further amended defence – whether proceedings should be dismissed against the second respondent DEFAMATION – whether particulars of justification are defective – where particulars provide a basis for establishing a possibility of knowledge but insufficient to establish a probability of knowledge – suspicions or opinions of guilt held by a regulatory or investigative body not sufficient to prove guilt – whether particulars, if assumed to be established, provide a defence of justification
Legislation:	Federal Court Rules 2011 (Cth) rr 16.41, 16.43 Defamation Act 2005 (NSW) ss 4, 25, 38
Cases cited:	Australian Broadcasting Corporation v Chau Chak Wing [2019] FCAFC 125; (2019) 271 FCR 632 Burstein v Times Newspapers Ltd [2001] 1 WLR 579 Channel Seven Sydney Pty Ltd v Mohammed [2010] NSWCA 335; (2010) 278 ALR 232 Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165 Herron v HarperCollins Publishers Australia Pty Ltd (No 2) [2022] FCAFC 119 LCA Marrickville Pty Ltd v Swiss Re International SE [2022] FCAFC 17; (2022) 290 FCR 435 O’Brien v Australian Broadcasting Corporation [2017] NSWCA 338; (2017) 97 NSWLR 1 Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473 Rushv Nationwide News Pty Ltd (No 2) [2018] FCA 550; (2018) 359 ALR 564 Schiff v Nine Network Australia Pty Ltd (No 2) [2022] FCA 1120
Division:	General Division
Registry:	New South Wales
National Practice Area:	Other Federal Jurisdiction
Number of paragraphs:	76
Date of hearing:	6 April 2023
Counsel for the Applicant:	Ms S Chrysanthou SC and Mr N Olson
Solicitor for the Applicant:	Kennedys (Australasia) Partnership
Counsel for the Respondents:	Mr D Sibtain SC and Mr M Lewis
Solicitor for the Respondents:	Minter Ellison

ORDER MADE BY:	JACKMAN J
DATE OF ORDER:	14 APRIL 2023