Sydney Refractive Surgery and 3 Ors v Beaumont and 2 Ors - [2002] NSWSC 638

No judgment structure available for this case.

CITATION: Sydney Refractive Surgery & 3 Ors v Beaumont & 2 Ors [2002] NSWSC 638

FILE NUMBER(S): SC 20298/98

HEARING DATE(S): 15 May 2002

JUDGMENT DATE: 19 July 2002

PARTIES :

Sydney Refractive Surgery Centre Pty Ltd - 1st Plaintiff
Dr Michael A Lawless - 2nd Plaintiff
Dr Paul Beaumont - 1st Defendant
HSV Channel 7 Pty Ltd - 2nd Defendant
Amalgamated Television Services Pty Ltd - 3rd Defendant

JUDGMENT OF: Simpson J

COUNSEL : T Tobin QC with AR Richardson - Plaintiffs
K Smark - Defendants

SOLICITORS: Gilbert & Tobin - Plaintiffs
Mallesons Stephen Jaques - Defendants

CATCHWORDS: defamation - application by defendants to file and rely on amended defence - imputations found by jury to have been conveyed - "Polly Peck" defence - particularisation of substantial truth

LEGISLATION CITED: Defamation Act 1974

CASES CITED: Polly Peck Holdings Plc v Trelford [1986] 1QB 1000
Chakravarti v Advertising Newspapers Ltd [1998] HCA 37; 193 CLR 519
David Syme and Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667

DECISION: Refer paragraph 53

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

SIMPSON J

19 July 2002
20298/98 SYDNEY REFRACTIVE SURGERY & 3 Ors

v
Paul BEAUMONT & 2 Ors

JUDGMENT

1 HER HONOUR: In the principal proceedings the plaintiffs (Sydney Refractive Surgery Centre Pty Ltd and Dr Michael Lawless) claim damages against the defendants (Dr Paul Beaumont, HSV Channel 7 Pty Ltd and Amalgamated Television Services Pty Ltd) for defamatory imputations found by a jury, pursuant to s7A of the Defamation Act 1974, to have been conveyed by the second and third defendants on, respectively, 4 and 5 May 1998, and by the first defendant on an unspecified date shortly before then. Dr Beaumont is sued also as being liable for the republication of the defamatory imputations attributed to him.

2 The present application is an application by all defendants for leave to file and rely on an amended defence, raising significant new issues. The application is opposed by the plaintiffs.

3 For the purpose of the present proceeding only, and without purporting to make any findings of fact, I shall assume the background facts pleaded in the statement of claim. So far as it is necessary to recount them, they are as follows. The first plaintiff is a company of which Dr Lawless is a shareholder and director. Dr Lawless is an eye surgeon who performs laser eye surgery on premises maintained by the company. The second and third defendants are companies that manage and operate television station Channel Seven and broadcast, respectively, to NSW and Victoria. The first defendant is a medical practitioner and is a director of a company called Macquarie Street Excimer Laser Group Pty Ltd.

4 On 4 May 1998 the second defendant telecast in Victoria a programme called “Today Tonight”. The subject matter of the program, generally speaking, concerned the practices of the plaintiffs in advertising their services, and recruiting patients for laser eye surgery, and the information they give to prospective patients. On 5 May 1998 the third defendant telecast an identically named programme to NSW with substantially similar content. These programmes were preceded by an interview of Dr Beaumont by a journalist employed by one or both of the television companies, which interview was video recorded. Doctor Beaumont featured extensively in the two “Today Tonight” programmes. It is fair to say that he made extensive and trenchant criticisms of the conduct of each of the plaintiffs. The plaintiffs commenced defamation proceedings against each of the defendants. The video recording of the interview constitutes the first matter complained of. The Victorian telecast constitutes the second matter complained of, and the NSW telecast the third matter complained of. Each of the plaintiffs sues each of the defendants in respect of defamatory imputations conveyed by them. As I have indicated above, the fact that the imputations were conveyed and were defamatory of the respective plaintiffs was decided by a jury in February 2001 and is not now in issue.

5 The imputations found by the jury to have been conveyed are:

the first matter complained of:

(i) of the first plaintiff:

“9(a) Through its surgical staff, the first plaintiff, which is an eye surgery clinic, behaves unethically in that for its financial gain they mislead their patients about the risks of eye surgery.
(b) The first plaintiff is an eye surgery clinic which, through its surgical staff, is a party to a deceitful scheme to trick patients into signing a form purporting to give consent to surgery on their eyes by showing them a videotape which is misleading as to risks inherent in the surgery.
(c) The first plaintiff, which is an eye surgery clinic, employs on its staff a surgeon who is a disgrace to the medical profession in that he recommends eye surgery when it is not in his patients’ best interests.
(d) Surgical staff of the first plaintiff, which is an eye surgery clinic, are irresponsible eye surgeons in that they perform eye surgery without adequately warning their patients of the serious risks of permanent eye damage inherent in laser eye surgery.
(e) The first plaintiff is an eye surgery clinic which engages in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that no patient has gone blind from laser eye surgery.
(f) The first plaintiff is an eye surgery clinic which engages in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that if patients have laser surgery on their eyes they will be able to throw away their spectacles.
(h) The first plaintiff is an eye surgery clinic which participates in an arrangement to cause its patients to pay absurdly inflated costs for post-operative care.”

(ii) of the second plaintiff:

“10(b) The second plaintiff is a party to a deceitful scheme to trick patients into signing a form purporting to give consent to surgery on their eyes by showing them a videotape which is misleading as to risks inherent in the surgery.
(c ) The second plaintiff is a disgrace to the medical profession in that he recommends eye surgery when it is not in his patients’ best interest.
(d) The second plaintiff is an irresponsible eye surgeon in that he performs eye surgery without adequately warning his patients of the serious risks of permanent eye damage inherent in laser eye surgery.
(e) The second plaintiff engages in deliberately misleading marketing practices in using for potential patients a video which falsely states that no patient has gone blind from laser eye surgery.
(f) The second plaintiff engages in deliberately misleading marketing practices in using for potential patients a video which falsely states that if patients have laser surgery on their eyes they will be able to throw away their spectacles.”

the second matter complained of:

(i) of the first plaintiff:

“13(a) The first plaintiff is an eye surgery clinic which, through its surgical staff, is a party to a deceitful scheme to trick patients into signing a form purporting to give consent to surgery on their eyes by showing them a videotape which is misleading as to risks inherent in the surgery.
(c) Surgical staff of the first plaintiff, which is an eye surgery clinic, are irresponsible eye surgeons in that they perform eye surgery without adequately warning their patients of the serious risks of permanent eye damage inherent in the laser surgery.
(d) The first plaintiff is an eye surgery clinic which engages in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that no patient has gone blind from laser eye surgery.
(e) The first plaintiff is an eye surgery clinic which engages in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that if patients have laser surgery on their eyes they will be able to throw away their spectacles.
(f) The first plaintiff is an eye surgery clinic which publishes advertisements which are false in that they deliberately mislead prospective patients about the risks inherent in laser eye surgery.
(g) The first plaintiff is an eye surgery clinic which participates in an arrangement to cause its patients to pay absurdly inflated costs for post-operative care.”

(ii) of the second plaintiff:

6 Both plaintiffs plead that identical imputations (numbered 16(a) to 16(g) and 17(a) to 17(e)) defamatory of them were conveyed by the third matter complained of.

* * *

7 Following the jury verdict the plaintiffs filed what was described as a Fourth Amended Statement of Claim. On 25 May they filed a Fifth Amended Statement of Claim. As I understand it, the amendments to the latest documents were made solely to reflect the jury verdicts and to delete imputations not found by the jury to have been conveyed. On 7 May 2001 each defendant separately filed a defence to the Fourth Amended Statement of Claim. On 18 March 2002 they filed the notice of motion on which the present application is founded, seeking leave to file amended defences. For the first time, the defendants seek to plead defences of substantial truth to all imputations except imputation (b) in the first matter complained of, and imputation (h) in the second matter complained of, and of contextual truth pursuant to s16 of the Defamation Act 1974 (NSW). The contextual truth defence is pleaded as an anticipatory measure against the possibility that some, but not all, of the pleaded imputations might be found to be substantially true; in that event, they plead, by reason of the substantial truth of those imputations that they will have justified, the publication of the remaining (unjustified) imputations did not further injure the reputations of the plaintiffs. They do not seek to plead any additional contextual imputations. Further, in relation to the Victorian telecast, the defendants seek to raise the defence known as a “Polly Peck” defence (Polly Peck Holdings Plc v Trelford [1986] 1QB 1000.)

8 The plaintiffs oppose the grant of leave to file the amended defences. Their opposition is based solely on what they assert is the futility of a grant of leave, arguing that, if defences in the terms of those proposed were filed in time and without the need for leave, or upon leave being granted, they would inevitably be struck out as defective. Two distinct matters were raised. The first concerned the particularisation, alleged to be inadequate, of the plea of substantial truth; the second that a “Polly Peck” defence is not available under Victorian defamation law and that the rules of private international law would not permit such a defence to be raised in a NSW claim on a defamation published in Victoria.

9 As to the first basis of opposition, the argument of the plaintiffs was that the particulars given, taken as a whole, are not capable of establishing the substantial truth of any of the imputations and, accordingly, the amendment should not be permitted.

10 I approach this question on the assumption that the defendants will be able to prove all and only the facts particularised; that is, that the whole of the defendants’ case on truth is encapsulated in the particulars given; that the defendants will be able to adduce evidence to sustain each fact particularised; and that they will not be permitted to go beyond those facts and inferences legitimately drawn from such facts as are found.

11 On that basis, the plaintiffs argued the defendants would inevitably fail on their attempt to prove the substantial truth of any imputations. For their part, the defendants have made some concessions. These emerge principally in correspondence between the parties, but were also made by counsel for the defendants during the course of argument. One point he made is that the more appropriate course, if the particulars are inadequate, is for the plaintiffs to seek further and better particulars. There is merit in this, but there is also merit in the plaintiffs’ response that these proceedings have been on foot for a very long time and (despite the frightening dimensions of the Court file) do not appear to have made a great deal of progress.

12 It is necessary to attempt to give some sort of overview, which will necessarily be fairly comprehensive, of the facts and circumstances asserted by the defendants as supporting the contention that the imputations were substantially true. These included such (presumably) uncontroversial facts as that the first plaintiff conducted the business of an eye surgery clinic and for that purpose employed or retained the services of a number of surgical staff including the second plaintiff and that it required patients to sign a standard consent form and used a promotional video tape, part of which was shown in the telecasts. What follows is a narrative of the essential facts asserted by the defendants. The promotional videotape was provided to some prospective patients and was employed for marketing purposes. When it was sent to prospective patients it was not, or was not usually, accompanied by the consent pro-forma. The videotape was misleading in a number of respects, including a claim that laser eye surgery had never resulted in blindness and that no one had ever lost the sight of an eye as a result of laser eye surgery; that in ten years of laser eye surgery, using Excimer lasers, there had been no adverse side effects; that risks of infection and scarring were no more than theoretical and that the procedure was safe and that patients would almost certainly not need to wear glasses post surgery. In reality, a number of side effects and complications potentially result from laser eye surgery and some patients are left with some loss of vision. The videotape, with two exceptions, fails to refer to these side effects. Nor does the consent form contain disclosure of serious risks associated with bilateral eye surgery. The videotape was also misleading in that it presented the experience and surgical outcome of one patient as typical and created “an overly reassuring impression” of the procedure. The surgical staff of the first plaintiff were aware of relevant current literature. 1997 and 1998 British guidelines recommend against bilateral laser eye surgery and that a minimum period of four to twelve weeks elapse between eye treatments. Nevertheless, having knowledge or constructive knowledge of this, the first plaintiff’s surgical staff on occasions performed bilateral laser eye surgery. Advertising guidelines issued by the Council of the Royal Australian College of Ophthalmologists warn that advertising containing patient endorsement or testimonial would be construed as a representation that the particular patient’s experience was typical or representative of the general experience of patients unless there is a clear and conspicuous disclosure to the contrary.

13 I take it that this is intended to constitute a caution to surgeons advertising in this way to ensure that advertising is not misleading or misunderstood or capable of being misunderstood.

14 The video, however, contained a patient endorsement without such a caution. The first plaintiff had entered into “co-management” arrangements with optometrists pursuant to which a payment was made to those optometrists “per eye referred”. Surgical staff of the first plaintiff performed laser eye surgery, including, on occasions, bilateral laser eye surgery, without warning that there were risks associated with that practice. The videotape conveyed (erroneously) the meaning that patients who had laser eye surgery would be able to throw away their glasses. The second plaintiff was a party to the decision to use the videotape.

15 The above reflects the facts and matters initially particularised by the defendants as justifying those imputations they propose to justify. By letter dated 4 April 2002 the solicitors for the plaintiffs gave notice of their objection to the filing of the amended defences, and outlined the deficiencies they perceived. As a result the solicitors for the defendant wrote to the plaintiffs’ solicitors indicating their intention to add to or vary the particulars in certain respects. They propose to add an assertion that the first plaintiff conducted its business of an eye surgery clinic for financial gain. They propose to make explicit what was (probably) previously implicit, that the patient’s endorsement of the treatment which appeared on the video would be construed as a representation that that patient’s experience was typical or representative of the experiences generally achieved and that, on the contrary, a number of the plaintiffs’ patients had experienced different and less favourable outcomes than those shown on the video but that no disclosure that the representation should not be so taken was made in the video. They proposed adding an assertion that the widely recognised definition for legal blindness in Australia and overseas is 20/200 (or 6/60) vision. Finally, they proposed making an explicit reference to extracts from the promotional video which were shown on the telecast, in the context of their claim that the video conveyed the meaning that patients who had the surgery would be able to throw away their glasses.

16 The other criticisms of the proposed defences were rejected, with reasons given.

17 It is appropriate to treat the proposed defences as including the matters conceded in the letter of 2 May.

18 The defendants, therefore, have essentially set for themselves the task of proving that the plaintiffs actively mislead patients by the use of promotional videotape, which in some respects was misleading because of omissions and in others by reason of statements expressly made; of presenting an atypical patient experience as typical; of deliberate or conscious non-disclosure of risks associated with the surgery they promoted, recommended and performed; of ignoring or acting contrary to professional guidelines; of entering into arrangements with optometrists pursuant to which the optometrists receive payment for patient referrals; and of doing this for their own financial gain.

19 Notwithstanding this, in a step by step analysis relating the imputations pleaded to the numbered particulars, the plaintiffs have argued that, even if the defendants succeed in establishing the truth of all these matters, no imputation would be shown to be substantially true. It is therefore necessary to examine each imputation in the context of the particulars which the defendants claim can be proved and will establish its substantial truth. It is, of course, open to the defendants to seek to establish some matters by inferences and conclusions legitimately drawn from facts that are proven to be true.

20 The first imputation considered is that numbered 9(a). The essential accusation in this imputation is of unethical behaviour on the part of the first plaintiff. The argument put was that no factual matters have been raised in support of the allegation of unethical behaviour. It was put that notwithstanding reference to certain practice and advertising guidelines, the particulars contain no specific allegation of a breach of the guidelines, nor an explanation of how a breach (if alleged and proved) would constitute unethical behaviour. A particular matter raised was that the particulars failed to allege that the experience of the patient presented on the promotional video was atypical or unrepresentative.

21 In support of the imputation the defendants rely on a number of asserted facts, including professional body recommendations against bilateral laser eye surgery and the plaintiffs’ performance of such surgery notwithstanding, the guidelines contraindicating the use of patient endorsement or testimonial, and the plaintiffs’ use of such a testimonial notwithstanding and in the absence of the disclosure recommended in the guidelines; and the “co-management” arrangements with optometrists.

22 Contrary to the plaintiffs’ argument, I am satisfied that a tribunal of fact could find, on proof of these matters, that the plaintiffs had behaved unethically. It is not necessary, in my opinion, that an assertion be made that the experience of the particular patient is atypical or unrepresentative. It is enough to assert that the plaintiffs acted contrary to specific guidelines. That is not to say that a tribunal of fact would necessarily draw an inference of unethical behaviour; it is sufficient if such a conclusion would be open to the tribunal of fact on proof of those matters. I am satisfied that it would be.

23 A secondary argument was that no particulars were offered in support of the allegation of financial gain, or of linking the financial gain to the asserted unethical behaviour. Again, in my opinion, proof of the facts asserted would be sufficient to leave open an inference that the plaintiffs acted as they did for financial gain. Some realism must attend the approach to pleadings. There is no reason to believe that the plaintiffs conducted their practices for any reason other than financial gain.

24 The next group of imputations to be considered are those numbered 9(b), 10(b), 13(a), 14(a), 16(a) and 17(a).

25 These are the imputations which allege that each plaintiff is a party to a deceitful scheme to trick patients into signing a form purporting to give consent to eye surgery by the use of a misleading video tape. The argument put on behalf of the plaintiffs is that the particulars are not capable of establishing that their conduct (assuming it to be proven) amounts to “a deceitful scheme to trick”. I disagree. The particulars specifically assert that the surgical staff of the first plaintiff (including the second plaintiff) knew the various other matters pleaded, and were familiar with and maintained their familiarity with clinical literature relevant to laser eye surgery. This imputes to the plaintiffs knowledge of the allegedly misleading nature of the video tape, and the facts which made it misleading, of the adverse side effects or complications which could follow laser eye surgery, but that these facts were omitted from the video tape which they used to promote their surgery.

26 The tribunal of fact could draw the conclusion that this behaviour did indeed constitute “a deceitful scheme to trick”. It would be possible for the tribunal to find dishonesty or deceitfulness established by those particulars.

27 Imputations 9(c) and 10(c) are that each plaintiff, is (in the case of the second plaintiff) or employs (in the case of the first plaintiff) a surgeon who is a disgrace to the medical profession in that he recommends eye surgery when it is not in his patients’ best interests.

28 Three matters were raised as demonstrating that the particulars pleaded would be insufficient to establish the substantial truth of this imputation. These are:

(i) that no particulars are raised in support of the allegation that the second plaintiff is “a disgrace to the medical profession”;

(ii) that no particulars are raised in support of the allegation that the surgery was recommended by the plaintiffs;

(iii) that the particulars do not allege that bilateral eye surgery was not in the best interests of whichever patients the defendants allege received the plaintiffs’ recommendations.

29 That a person is “a disgrace to the medical profession” is intrinsically a matter of opinion and judgment to be drawn from established facts. There can be no factual particular that a person is “a disgrace to the medical profession”; what must be established are foundational facts from which such a conclusion could reasonably be drawn. The plaintiffs argued that, even if bilateral eye surgery is recommended against by a set of practice guidelines, there is no allegation in the proposed defence that failure to observe such guidelines is disgraceful, or even marginally inappropriate, behaviour.

30 It appeared to be common ground that the eye surgery referred to is bilateral eye surgery, contrary to the professional guidelines.

31 Further, the plaintiffs claimed that the defendants cast their net too wide when they described the conduct of the plaintiffs as “recommending” bilateral eye surgery. Finally, they claim there is no allegation that bilateral eye surgery was not in the best interests of a particular patient. This last matter may be disposed of quickly. The particulars claim that bilateral eye surgery is to be avoided (apart, presumably, from emergencies). In my opinion, it would be open to a tribunal of fact to conclude that a surgeon who recommended bilateral eye surgery in the face of clear professional guidelines, and stated risks, was a disgrace to the medical profession. Again, I make it plain that I do not consider that the tribunal of fact would be bound to reach that value judgment, but would be able to.

32 Imputations 9(d), 10(d), 13(c), 14(c), 16(c) and 17(c) are to the effect that the surgical staff of the first plaintiff, including the second plaintiff, are irresponsible eye surgeons in that they perform eye surgery without adequately warning patients of the serious risks of permanent eye damage inherent in laser eye surgery. These, it seems to me, are somewhat lesser imputations than those just considered, and focus, not only on the performance of bilateral eye surgery, but of doing so in the absence of adequate warnings of serious eye damage. The plaintiffs complained of the allegation of irresponsibility, as they did of the allegation that the second plaintiff is a disgrace to the medical profession, arguing that no standard or benchmark is alleged to have been breached. For the reasons earlier given, I am of the view that an allegation of irresponsibility as an eye surgeon is a value judgment to be drawn from proven facts and circumstances. The second argument is that there are no particulars of a failure adequately to warn. This is plainly misconceived. In the particular numbered P29 the following is pleaded:

“Surgical staff of the first plaintiff have performed bilateral laser eye surgery on patients from time to time without warning such patients of the matters referred to in paragraph P12 above.”

33 Particular P12 incorporates an earlier catalogue of risks associated with bilateral laser eye surgery, the effect of which is said to be exacerbated when both eyes are operated on simultaneously. To proceed in such a way without warning a patient of the dangers could, in my view, be taken to amount to irresponsibility. Further, it was said that no particulars of failure to warn are given, but, in the particular I have already extracted, that assertion is expressly made.

34 The next group of imputations are those numbered 9(e), 10(e), 13(d), 14(d), 16(d) and 17(d). These are the imputations to the effect that the plaintiffs engage in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that no patient has gone blind from laser eye surgery.

35 Three points were, essentially, made on behalf of the plaintiff. The first was that the defendants have provided only one example of a medical journal article citing an instance of a patient suffering an effective loss of vision. The plaintiffs pointed out that that article does not support the assertion made on behalf of the defendants. When this matter was raised during the course of oral argument counsel for the defendants conceded that this was so. In the particulars another such article is mentioned, but, as senior counsel for the plaintiffs pointed out, this article post-dates the publication of the matters complained of.

36 Secondly, the plaintiffs complained that no particulars have been provided to support the defendants’ definition of “legal blindness”, and noted, in any event, that the imputation does not refer to “legal blindness”. Finally, they complain that no particulars are provided of how the promotional videotape is said to have been “deliberately” misleading, nor of how it is said that the plaintiffs, particularly the second plaintiff, became aware of the article such as to be a party to the “deliberately misleading practices”.

37 It may be that, in respect of these imputations, the plaintiffs are on stronger ground than they have previously been. It is essential to justification of the relevant imputations that the defendants establish the falsity of the proposition that no patient has gone blind from laser eye surgery, and, on the present state of the proposed pleading, there is little, if anything, to support that contention. Having regard to counsel’s concession as to the content of the single medical journal article which predates the publication of the matters complained of, and having regard also to the conclusions I have reached in relation to other matters raised in this proceeding, it seems to me that the defendants should have a further opportunity to particularise a justification of these imputations if they wish to do so.

38 I should note that the third of the matters raised on behalf of the plaintiffs is, in my view, of little moment. What the defendants are required to do at this stage is to state facts on which they propose to rely in order to establish the substantial truth of the imputations – they are not required to provide evidence by which they will seek to support the substantial truth of the imputations.

39 The next group of imputations are those numbered 9(f), 10(f), 13(e), 14(e), 16(e) and 17(e). These are the imputations to the effect that the plaintiffs engage in deliberately misleading marketing practices in supplying potential patients with a video which falsely states that if patients have laser surgery on their eyes they will be able to throw away their spectacles.

40 Once again, one of the criticisms made of the particulars is that they do not, in terms, allege that the misleading behaviour asserted was engaged in “deliberately”. As before, I consider this is a matter which the defendants may set out to prove by inference. Whether or not they are successful is a matter for the trial judge. Further, the plaintiffs complained that the particulars do not allege that video included relevantly false or misleading information, nor that the claim was made in respect of all patients, nor that the patient who appeared in the video had an atypical experience. In my opinion it is not necessary for the particulars to be as specific as these arguments would suggest. Whether or not the particulars are sufficient to establish the substantial truth of these imputations is, likewise, a matter for the trial judge.

41 The final matter put on behalf of the plaintiffs in relation to the imputations made reference to a warning in the promotional video to the effect that a patient’s vision might be less crisp following surgery. This, in my opinion, is a matter for argument as to the substantial truth of the imputations but is not relevant to the capacity of the proposed particulars to prove the substantial truth of the imputation.

42 The final imputations to be considered are those numbered 13(f) and 16(f). These are the imputations that the first plaintiff publishes advertisements that are false in that they deliberately mislead prospective patients about the risks inherent in laser eye surgery. Yet again, the substance of the criticism of the particulars was that there is no particular to support that part of the imputations in which it is suggested that the promotional tape was “deliberately” misleading. This must be dealt with in the same way as similar claims in relation to earlier imputations. Whether the defendants prove that misleading conduct is deliberately misleading is a matter of the inferences that will be drawn by the trial judge.

43 I will not refuse leave to the defendants to file the proposed amendment on the basis of futility.

44 In relation to the Victorian broadcast the defendants propose to plead a defence consistent with the decision of the English Court of Appeal in Polly Peck (Holdings) Plc v Trelford [1986] 1QB 1000. The salient passage in that case read:

“In cases where the plaintiff selects words from a publication, pleads that in their natural and ordinary meaning the words are defamatory of him, and pleads the meanings which he asserts they bear by way of false innuendo, the defendant is entitled to look at the whole publication in order to aver that in their context the words bear a meaning different from that alleged by the plaintiff. The defendant is entitled to plead that in that meaning the words are true and to give particulars of the facts and matters upon which he relies in support of his plea, as he is required to do by RSC, O82. It is fortuitous that some or all of those facts and matters are culled from parts of the publication of which the plaintiff has not chosen to complain.

Where a publication contains two or more separate and distinct defamatory statements, the plaintiff is entitled to select one for complaint, and the defendant is not entitled to assert the truth of the others by way of justification.

Whether a defamatory statement is separate and distinct from other defamatory statements contained in the publication is a question of fact and degree in each case. Several defamatory allegations in their context may have a common sting, in which event they are not to be regarded as separate and distinct allegations. The defendant is entitled to justify the sting, and once again it is fortuitous that what is in fact similar fact evidence is found in the publication.” (at 1032)

45 The plaintiffs have argued that the Polly Peck defence is (if it ever was) no longer available in Victoria and forms no part of the law of Victoria. If that is so, the defendants would not be permitted to raise the defence in relation to the Victorian broadcast in a NSW Court.

46 Having extracted the passage from Polly Peck which I have quoted above, to support their contention that a Polly Peck defence is not available in Victoria, the plaintiffs relied heavily upon the judgment of Brennan CJ and McHugh J in Chakravarti v Advertising Newspapers Ltd [1998] HCA 37; 193 CLR 519. At [6] their Honours wrote:

Polly Peck

47 As counsel for the defendants has pointed out, this statement, despite its vigour, is the expression of a minority view. The principal judgment (with which, subject to their views on the Polly Peck defence, and to one other reservation, Brennan CJ and McHugh J agreed) was delivered by Gaudron and Gummow JJ. Their Honours appear to have accepted the validity of a Polly Peck pleading. Similarly, Kirby J, who delivered a separate judgment, expressed no views such as those of Brennan CJ and McHugh J.

48 In my opinion Chakravarti is not authority for the proposition that the High Court has declared the Polly Peck defence out of bounds to the common law of defamation in those states of Australia where that subject is not governed by specific statutory provisions.

49 However, the plaintiffs also argued that the Polly Peck defence had, in effect, been outlawed for Victoria by that state’s Court of Appeal in David Syme and Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667. In that case, Ormiston and Charles JJA, in separate judgments, made extensive reference to the judgments in Chakravarti and made it plain that they shared the views of Brennan CJ and McHugh J. However, on my reading of the judgments, their Honours fell short of holding that the Polly Peck defence was unavailable in Victoria. At [59] for example, Charles JA wrote:

“I agree with Ormiston JA therefore, for the reasons he gives, that a defendant which pleads that he proposes to justify meanings by way of false innuendo other than those alleged by the plaintiff, should plead those meanings and that it should plead justification in terms which make clear the version of meaning of the publication to which that justification is directed. In my view the defendant is obliged to do so, in order to comply with RSCrr13.07(1) and 13.10.”

50 Ormiston JA wrote ([21]):

“It would therefore seem desirable, if it was not already required by authority, both that defendants should plead the meanings by way of false innuendo or imputation which they place on the publication relied upon and that they should plead justification in terms which makes clear the version or versions of meaning of the publication to which that justification is directed.”

51 In my opinion these passages make it plain that their Honours, far from holding that the Polly Peck defence was unavailable in Victoria, reluctantly accepted that it was, and went as far as they could in devising pleading rules or principles by which the defence could be raised and pursued.

52 There is thus no basis, by reason of the pleading of a Polly Peck defence, to refuse the defendants leave to amend their pleadings as proposed.

53 I therefore grant leave to the defendants to file amended defences, substantially in accordance with those the subject of the notice of motion, and subject only to further particularisation of the substantial truth of the imputations to which I have referred.

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Last Modified: 07/23/2002

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Citations

Sydney Refractive Surgery and 3 Ors v Beaumont and 2 Ors [2002] NSWSC 638

Most Recent Citation

Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028

Cases Citing This Decision

2

Sydney Refractive Surgery Centre Pty Ltd v Beaumont [2003] NSWSC 688

Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028

Cases Cited

2

Statutory Material Cited

1

Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37

David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24

CITATION:	Sydney Refractive Surgery & 3 Ors v Beaumont & 2 Ors [2002] NSWSC 638
FILE NUMBER(S):	SC 20298/98
HEARING DATE(S):	15 May 2002
JUDGMENT DATE:	19 July 2002
PARTIES :	Sydney Refractive Surgery Centre Pty Ltd - 1st Plaintiff Dr Michael A Lawless - 2nd Plaintiff Dr Paul Beaumont - 1st Defendant HSV Channel 7 Pty Ltd - 2nd Defendant Amalgamated Television Services Pty Ltd - 3rd Defendant
JUDGMENT OF:	Simpson J

COUNSEL :	T Tobin QC with AR Richardson - Plaintiffs K Smark - Defendants
SOLICITORS:	Gilbert & Tobin - Plaintiffs Mallesons Stephen Jaques - Defendants
CATCHWORDS:	defamation - application by defendants to file and rely on amended defence - imputations found by jury to have been conveyed - "Polly Peck" defence - particularisation of substantial truth
LEGISLATION CITED:	Defamation Act 1974
CASES CITED:	Polly Peck Holdings Plc v Trelford [1986] 1QB 1000 Chakravarti v Advertising Newspapers Ltd [1998] HCA 37; 193 CLR 519 David Syme and Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667
DECISION:	Refer paragraph 53