TCN Channel Nine Pty Ltd v Pahuja

[2019] NSWCA 166

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

TCN Channel Nine Pty Ltd v Pahuja [2019] NSWCA 166

Hearing dates:

7 March 2019

Date of orders:

05 July 2019

Decision date:

05 July 2019

Before:

Basten JA at [1];
Payne JA at [82];
Simpson AJA at [91]

Decision:

(1)   Allow the appeal from the judgment of McCallum J given on 23 October 2018.

 

(2)   Set aside orders (1)-(4) made by McCallum J on 29 June 2018.

 

(3)   Order that there be a new trial of the matter.

 

(4)   Direct that the costs of the first trial be determined in the course of the new trial.

 

(5)   Order that the respondent pay the appellants’ costs in this Court.

(6) Grant the respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

Catchwords:

DEFAMATION — defences — substantial truth —Defamation Act 2005 (NSW), s 25 — whether trial judge erred in withdrawing defence of substantial truth — whether sufficient evidence to support a finding of substantial truth — relevance of implausible denials of plaintiff

DEFAMATION — defences — substantial truth — contextual truth — justification of some imputations only — relevance of imputations found to be substantially true — discussion of Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174

Legislation Cited:

Defamation Act 1912 (NSW), s 7
Defamation Act 2005 (NSW), ss 6, 25, 26
Interpretation Act 1987 (NSW), s 33

Cases Cited:

Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17
Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369
Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230
Edmunds v Edmunds & Ayscough [1935] VLR 177
Edwards v The Queen (1993) 178 CLR 139; [1993] HCA 63
Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77
Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174
Hobbs v C T Tinling & Co Ltd [1929] 2 KB 1
Howden v “Truth” and “Sportsman” Ltd (No 2) (1938) 38 SR (NSW) 287
Howden v Truth & Sportsman Limited (1937) 58 CLR 416; [1937] HCA 74.
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68
Nationwide News Pty Ltd v Weatherup [2018] 1 Qd R 19; [2017] QCA 70
Roberts v Bass (2012) 212 CLR 1; [2002] HCA 57
Scruby v The Queen (1952) 55 WALR 1
Shepherd v The Queen (1990) 170 CLR 573; [1990] HCA 56
Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63
Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816

Texts Cited:

Gatley on Libel and Slander (12th ed, 2013, Sweet & Maxwell)JD Heydon, “Can Lies Corroborate?” (1973) 89 LQR 552
JD Heydon, Cross on Evidence (10th Aust ed, 2015, LexisNexis)

Category:

Principal judgment

Parties:

TCN Channel Nine Pty Ltd (First Appellant)
Nine Network Australia Pty Ltd (Second Appellant)
Ninemsn Pty Ltd (known as Nine Digital Pty Ltd) Third Appellant)
Jesse Grayson (Fourth Appellant)

  Sunil Pahuja (Respondent)

Representation:

Counsel:
Mr B McClintock SC / Mr Richardson (Appellants)
Mr K Smark SC / Ms S Crysanthou (Respondent)

  Solicitors:
Mark O’Brien Legal (Appellants)
Centennial Lawyers (Respondent)

File Number(s):

2018/208862

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law Division

Citation:

[2018] NSWSC 893; [2018] NSWSC 1575

Date of Decision:

15 June 2019; 23 October 2018

Before:

McCallum J

File Number(s):

2015/205648

headnote

[This headnote is not to be read as part of the judgment]

The respondent, Mr Sunil Pahuja, had assisted his friend, Mr Singh, in seeking a visa. Mr Singh’s student visa was not renewed and he was unsuccessful in reviewing the decision. Mr Singh was represented by a lawyer and migration agent, Mr Chand. Mr Pahuja set up a meeting between Mr Singh and a different migration agent, Mr Bebawy of Choice Migration Australia Pty Ltd. The purpose of the meeting with Mr Bebawy appeared to be to obtain a working visa requiring sponsorship (known as a 457 visa) for a fee of around $60,000. Mr Chand arranged and secretly recorded a meeting with Mr Pahuja and Mr Singh, which included a discussion of the sponsorship process and their prior meeting with Mr Bebawy.

On 28 April 2015, the appellants broadcast a segment on A Current Affair entitled “Immigration Scam: Exposed”. This included recorded extracts from Mr Chand’s meeting, as well as additional interviews with Mr Bebawy, Mr Pahuja and others. Mr Pahuja brought proceedings seeking damages for defamation. A number of imputations were held to be conveyed and defamatory; the appellants pleaded substantial truth in relation to a number of imputations, including the following:

“(a)   the plaintiff was knowingly involved in a cruel immigration scam in which overseas residents were forced to pay tens of thousands of dollars to dishonest immigration agents in order to live and work in Australia;

(h)   the plaintiff acted as fixer for a dodgy immigration agent by directing persons to that agent he knew were desperate to obtain 457 visas;

(j)   the plaintiff was knowingly involved in a cruel immigration scam in that he arranges the meetings between the foreigners and the agent.”

The appellants also sought to plead as contextual truth, the claim that the plaintiff was a liar. The trial judge withdrew from the jury the contextual truth defence and the substantial truth defence in relation to imputations (a), (h) and (j), finding that there was insufficient evidence to sustain the imputations. The issues on appeal were:

(1)   whether the primary judge erred in withdrawing the defence of substantial truth from the jury in relation to imputations (a), (h) and (j);

(2)   whether the primary judge erred in withdrawing the defence of contextual truth from the jury; and

(3)   whether there should be a retrial where only some of the imputations were found to be untrue.

The Court (Basten JA, Payne JA and Simpson AJA) allowing the appeal held:

In relation to issue (1):

(Basten JA, Payne JA and Simpson AJA):

1. When considered as a whole, there was sufficient evidence to allow the substantial truth defence to be left to the jury in relation to imputation (a): [34], [84], [119].

(Basten JA and Payne JA):

2. While imputations (h) and (j) required evidence of involvement with multiple victims of the scam, there was some evidence of such conduct from the secretly recorded statements and, the implausible denials could be taken into account so as to constitute sufficient evidence to allow the substantial truth defence to be left to the jury: [31], [84].

Edwards v The Queen (1993) 178 CLR 139; [1993] HCA 63; Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63; Scruby v The Queen (1952) 55 WALR 1; Shepherdv The Queen (1990) 170 CLR 573; [1990] HCA 56, applied.

3. On the basis that the substantial truth defence in relation to imputations (a), (h) and (j) were erroneously withdrawn, a retrial is appropriate: [3], [89].

(Simpson AJA):

4. As there was no evidence that the respondent had “directed” more than one person to Mr Bebawy, or had arranged meetings between more than one “foreigner” and Mr Bebawy, even if the respondent were found to have given deliberately false evidence that was not sufficient to support imputations (h) and (j) and the retrial should be limited to imputation (a): [114],[120]-[121],[124], [130].

Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17, applied.

Edwards v The Queen (1993) 178 CLR 139; [1993] HCA 63; Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63; Hobbs v C T Tinling & Co Ltd [1929] 2 KB 1; Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, considered.

In relation to issue (2):

(Simpson AJA):

5. The imputation pleaded as a contextual truth defence was not capable of proving that there was no further harm to the respondent’s reputation, and accordingly the judge did not err in withdrawing it from the jury: [129].

In relation to issues (2) and (3):

(Basten JA and Payne JA):

6. A conclusion as to the operation of ss 25 and 26 of the Defamation Act 2005 (NSW) is not necessary in the current circumstance: [39], [88].

(Basten JA)

7. While unnecessary to decide the issue, and accepting that there is significant uncertainty as to the operation of the defences of substantial truth and contextual truth, limiting the operation of the defences to the whole of the defamatory imputations may not be consistent with the statutory language: [73].

Defamation Act 2005 (NSW), ss 6, 25, 26; Interpretation Act 1987 (NSW), s 33.

Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369; Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230; Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77; Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174; Howden v “Truth” and “Sportsman” Ltd (No 2) (1938) 38 SR (NSW) 287; Howden v Truth & Sportsman Limited (1937) 58 CLR 416; [1937] HCA 74; Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68, considered.

Judgment

1. BASTEN JA: In 2018 the appellants unsuccessfully defended a defamation action brought against them by the respondent, Sunil Pahuja. The proceedings were heard by McCallum J and a jury. This appeal concerns the refusal of the trial judge to allow the appellants’ defence of truth to go to the jury with respect to three of five imputations found by the jury to be defamatory. There was also an appeal, dealt with largely by way of written submissions, challenging the trial judge’s refusal to allow a defence of contextual truth to be left with the jury.

2. Although not the subject of written submissions, or a challenge to the competency of the appeal, Mr Pahuja submitted that even if the primary judge had erred, there was no basis upon which to remit the matter for a rehearing. That submission relied on the unavailability of a defence of justification (substantial truth) in relation to only some of the plaintiff’s imputations.

3. For the reasons set out below, the appeal should be allowed and the judgment in favour of the respondent set aside. Because the error lay in the failure to allow the jury to determine a number of issues, it is clear that this Court cannot dispose of the matter and there will need to be a retrial. Against that possible outcome, the respondent also made submissions as to the scope of any retrial. Although any reasonable attempt to confine the issues so as to limit further costs is commendable, as is often the case with a jury trial, limiting issues in this case runs a substantial risk of causing a further miscarriage of justice. [1]

   1. Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [20] (Gleeson CJ) and [133]-[135] (Hayne J) (McHugh J and Gummow J agreeing with both).

Factual background

4. Mr Parmesh Chand was a lawyer and migration agent with a practice in Queensland. In 2011 Mr Satnam Singh’s application to extend his student visa was refused. Mr Chand acted for Mr Singh in unsuccessful Federal Court proceedings to review the visa refusal decision of the Migration Review Tribunal. Mr Singh then made arrangements to seek assistance from a different migration agent, Choice Migration Australia Pty Ltd, of which the principal was Mr Mofid Bebawy. The intention was to obtain a “457 visa” which required sponsorship from an employer in Australia. The evidence also supported an inference that Mr Singh had agreed to pay Mr Bebawy over $60,000 for his assistance, of which some $12,500 were for Mr Bebawy’s fees, $3,500 for government fees and the balance, about $45,000 was to be paid to a “sponsor” arranged by Mr Bebawy. Mr Singh’s friend, Mr Pahuja, had a role in arranging a meeting between Mr Singh and Mr Bebawy.

5. On learning of this activity, Mr Chand arranged a meeting with Mr Singh and Mr Pahuja, in his (Chand’s) offices on 1 April 2015. Mr Chand secretly recorded the discussion and later provided the recording to Channel Nine. Channel Nine took some limited steps to investigate what appeared to be a scheme to abuse arrangements to obtain temporary work visas (known as “457 visas”) by paying the Australian businesses which were purporting to sponsor the visa applicant. On 28 April 2015, the first appellant broadcast the program as a segment on A Current Affair. It was later republished by the second appellant, an affiliate of Channel Nine.

6. The segment was entitled “Immigration Scam: Exposed”. The program included extracts from the recording made by Mr Chand in his office. Mr Pahuja is recorded as saying:

“Most of the Indians, they are willing to pay, $30,000, $40,000 … even Melbourne, Sydney … the price is very high $60,000 or $70,000.”

A significant part of the program involved a summary of aspects of the recording made by Mr Chand, together with recorded denials by Mr Bebawy.

7. On 14 July 2015 Mr Pahuja filed a statement of claim in the Supreme Court of New South Wales, seeking damages for defamation against the publishers and the journalist. The statement of claim contained a number of imputations said to be conveyed and defamatory. Those upheld by the jury read as follows:

“(a)   the plaintiff was knowingly involved in a cruel immigration scam in which overseas residents were forced to pay tens of thousands of dollars to dishonest immigration agents in order to live and work in Australia;

(d)   the plaintiff dishonestly denied knowing the unscrupulous immigration agent;

(g)   the plaintiff introduced Satnam Singh to a dodgy immigration agent, knowing that Mr Singh would have to sell his property in India to pay the excessive and unfair $60,000 fee demanded by that agent to secure a 457 visa so Mr Singh could remain in Australia;

(h)   the plaintiff acted as fixer for a dodgy immigration agent by directing persons to that agent he knew were desperate to obtain 457 visas;

(j)   the plaintiff was knowingly involved in a cruel immigration scam in that he arranges the meetings between the foreigners and the agent.”

8. The judge ruled that a defence of substantial truth (justification) under s 25 of the Defamation Act 2005 (NSW) could be left to the jury with respect to imputations (d) and (g). The jury found that (d) was true, in that Mr Pahuja had dishonestly denied knowing Mr Bebawy. They rejected the defence of truth with respect to imputation (g); as that imputation included a number of separate elements, it is not known on what basis the jury made that finding.

9. On 8 June 2018, prior to summing up to the jury, the trial judge ruled that the evidence was incapable of proving the truth of imputations (a), (h) and (j): accordingly the defence was not left to the jury with respect to those imputations. The primary basis of the appeal is a challenge to the judge’s ruling in that respect.

10. Further, the appellants relied upon a defence of contextual truth, pursuant to s 26 of the Defamation Act, based on a single contextual imputation, namely “the plaintiff is a liar”. The judge declined to leave that defence with the jury.

11. Because the appeal was limited to the correctness of the judge’s rulings in respect of those defences, it is not necessary to deal in detail with the facts, beyond those aspects of the evidence relevant to the rulings.

Substantial truth defence

12. In circumstances where there was a jury awaiting the outcome of deliberations, having made the rulings referred to above, the judge reserved her reasons. Those were provided on 23 October 2018. [2]

    2. Pahuja v TCN Channel Nine Pty Ltd (No 4) [2018] NSWSC 1575 (primary judgment).

13. The trial judge ruled that the immigration scam referred to in imputation (a) involved more than one overseas resident (that is visa applicant) and more than one dishonest immigration agent. [3] That reading was not challenged. Rather, the appellants’ challenge ran to the next step in the reasoning which, picking up the language of imputation (h), identified the phrase in imputation (a) (“knowingly involved in”) as requiring that Mr Pahuja was a “fixer” who directed more than one person to a dodgy immigration agent, namely Mr Bebawy. The judge noted the submissions by counsel for Mr Pahuja to the effect that “taken at its highest, the evidence was simply incapable of reasonably supporting any finding that any person other than Mr Singh was a victim of any conduct attributable to the plaintiff.” [4]

    3. Primary judgment at [22].

    4.    Primary judgment at [31] and [32].

14. Although not referred to in the reasons, it is possible that the judge was also having regard to imputation (j) which also used the phrase “knowingly involved” and particularised the knowing involvement by reference to arranging meetings between foreigners (plural) and the agent.

15. On the appeal, the appellants contended that the judge departed from the ordinary meaning of imputation (a) in requiring multiple acts on the part of Mr Pahuja. It was sufficient for the purpose of that imputation that Mr Pahuja was knowledgeable about the extent of the scam, which involved more than one migration agent making sizeable payments to “sponsors” to obtain their signatures on 457 applications.

16. There is some difficulty in identifying a precise, but ordinary, meaning for these imputations. They are repetitive and are written in terms which are cumulative. Imputations (d) – (j) refer to the agent, who is separately identified as “dishonest”, “unscrupulous”, “dodgy” (twice), and without epithet on one occasion. However, no such constraint was imposed on the meaning of (a) when it was left to the jury; indeed the judge gave no directions to the jury in that regard. Nor is there any way to know how the jury understood it; yet it was how the jury understood it that mattered, not how the judge understood it (unless there was only one way to understand it, in which case the jury might have been so directed). Furthermore, although context is always important to determining meaning, it is not correct to read imputations down so as to increase the degree of overlap if they can bear separate and distinct meanings. This ground was made good.

17. The appellants had an alternative, substantive, basis for their challenge, which was relevant to all three imputations. It was that the evidence supported inferences that Mr Pahuja not only knew of Mr Bebawy’s reputation and practices but had had more than one meeting with him and had directed more than one person to him. The appellants acknowledged that the parts of the evidence were less than clear, and that aspects of the evidence might support a different inference. That fact, the appellants submitted, merely demonstrated that the matter was one for the jury to resolve, and not the trial judge.

18. So much may be accepted: the question is whether there was sufficient evidence to allow that the inferences sought by the appellants were reasonably open.

19. Before turning to that evidence, it is convenient to note one further aspect in the reasoning of the trial judge. Referring to the particulars of the defence, the judge accepted that “the application fell to be determined by reference to the evidence, not the particulars.” She continued:[5]

“It was nonetheless convenient to consider the evidence under the rubric of the particulars which, as noted by Mr Smark [senior counsel for the plaintiff], should be taken to indicate the high water mark of the defendants’ case.”

5. Primary judgment at [30].

20. If, as appeared to be the inference, the appellants were to be strictly confined to their particularised defence, it was it was necessary to have regard to all the particulars with respect to imputation (a), which in fact ran to 11 paragraphs, two of which included multiple references to evidence.

21. The critical paragraph referred to three individuals Mr Pahuja was said to have assisted, namely:

1. a friend who complained to the plaintiff that Mr Bebawy charged too much;

2. another friend or associate, on whose behalf in or about February-March 2015, the plaintiff attempted to persuade Mr Bebawy to reduce his fees by $5,000; and

3. Mr Satnam Singh.

22. The judge held that with respect to (i), there was no evidence that Mr Pahuja had either recommended or introduced him to Mr Bebawy; with respect to (ii) and (iii), each patently referred to Mr Singh. [6]

    6.    Primary judgment at [31] and [32].

23. The appellants submitted that an inference that Mr Pahuja acted for more persons than Mr Singh was reasonably open, although there was no definitive evidence to that effect. Rather, the inference was to be drawn from the general knowledge as to Mr Bebawy’s practices described by Mr Pahuja in the recorded meeting in Mr Chand’s office, several of his statements being introduced with the word “generally”. Reliance was placed on the following specific passages:

Pahuja:   “And generally he charge 50 thousand for the sponsorship, ten thousand for his fees so it was altogether 66– thousand but you know, I had, you know, negotiation with him so he said that only he can remove five thousand. He was angry last month and I tried to, you know, push him to five thousand more but he said no buddy because he was, he has that much of attitude and he has so many clients.” [7]

…

Chand:   “Yeah but, yeah but, but if takes 10, the other 40 goes to the sponsor?”

Pahuja:   “That’s what you know we have noticed, that’s what I asked him that you know maybe might be getting and he said now you are offending me so you know, he’s like, according to him he is taking 10 thousand but what I believe he might be paying 25 to 30 thousand because there is one more migration agent…. They also have one lady in her office, I don’t know if she is working right now or not. One of my close, friends he got sponsorship in Gympie, and she charged 45 thousand in regional sponsorship and but he got a job and paid from that employer. 45 thousand for 6 months.” [8]

…

Pahuja:   Mofid, a friend of mine he got sponsorship from him and he recommend me to go to Mofid. I already been there last year and one of my friends you know he said he too much charges but one accountant in Sunny Bank, he sponsored in less amount 35 thousand so. But I knew about Mofid a long time ago. And, and, you know one other thing is that if anybody is willing to come from India straight away to here, he can do the same thing so that's very good. …

...

Nowadays you know that's what happening most of the Indians especially from Punjab Haryana they can't get seven each … otherwise there is a straight away [permanent residence] they are not paying anything, so everybody is needs basically a sponsor nowadays, everybody. Have you, have you heard anything about Mofid that, that he took the money and then nothing happened?

…

I heard only one thing about him that later on when the time comes for the nomination he, normally, he asks to get more money later on and that's clarified, clarified to him that's the only money he is, he is paying to you, that's what you agreed with him. He won't pay anything more. In case if employer asks more, he will be responsible.” [9]

7.    Interview, par 47.

8.    Interview, pars 50 and 51.

9.    Interview, pars 100, 102 and 106.

24. In his evidence in chief, Mr Pahuja said that the first time he had ever been to the offices of Choice Migration was on 30 March 2015. [10] On that occasion he said that he attended with Mr Singh but did not go into the office, waiting in the reception area for “very short time, roughly around two minutes.” [11] He denied knowing what Mr Bebawy charged other people, [12] and denied he had ever represented any applicants for visas in their dealings with Mr Bebawy. He denied trying to persuade Mr Bebawy to reduce his fees, [13] and in cross-examination he asserted that everything suggesting he had knowledge of Mr Bebawy’s practice and fees was a “fabrication”. [14]

    10.    Tcpt, 05/06/17, p 56(25)-(37).

    11.    Tcpt, p 58(5).

    12.    Tcpt, p 59(25).

    13.    Tcpt, p 59(30).

    14.    Tcpt 06/06/17, pp 106(25)-107(13), 116(3)-(10), 117(1)-(33), 135-140.

25. The appellants’ case was that the claims of fabrication were patently false and that Mr Pahuja had a detailed and reasonably intimate knowledge of Mr Bebawy’s practices. When asked about his statement that Mr Bebawy got angry with him “last month” when he sought to negotiate a lower fee, he claimed that was a fabrication, because he had never been there before the visit with Mr Singh on 30 March 2015. He did not suggest that there was such a negotiation on behalf of Mr Singh. It was therefore open to a jury to conclude that particular (ii) did not refer to Mr Singh.

26. This was material, the appellants submitted, from which a jury could readily draw an inference that Mr Pahuja had had dealings with Mr Bebawy on at least one prior occasion, which must have been with another person whom he was assisting. His apparent attempt to distance himself even from the assistance given to Mr Singh by saying that he had not entered the office with Mr Singh (although he had helped Mr Singh by attending meetings on more than one occasion, including with Mr Chand), and that he had remained in the waiting room for no more than two minutes, relying on Mr Singh to provide to him all the information about the fees which he passed on to Mr Chand, demonstrated such a high level of anxiety about his association with Mr Bebawy as to render his denials highly implausible.

27. There was an issue as to whether it was open to the appellants to rely upon any inference that Mr Pahuja had lied in his evidence when he denied involvement in the alleged scam. [15] The judge rejected the proposition in the following terms:

“[35]   The argument was a difficult one. I had understood the defendants to accept, in the context of an earlier argument (as to the admissibility of MFI 5), that where a witness is disbelieved in the denial of a proposition, his denial cannot be used to prove the positive proposition. If authority were needed for that proposition (which I would hold to be a matter of logic), it may be found in a decision drawn to my attention by the parties of Hobbs v Tinling [1929] 2 KB 1. However, in opposing the application to have the defence taken from the jury, Mr McClintock appeared to contend that the plaintiff’s denial of any involvement in the scam, if disbelieved by the jury, could afford a basis for finding the matters denied as facts. I did not accept that proposition. …”

15. Primary judgment at [34].

28. The appellants contended that that conclusion was inconsistent with the reasoning of the High Court in Edwards v The Queen,[16] to which the judge had been taken in the course of submissions. The appellants also referred to Steinberg v Federal Commissioner of Taxation,[17] and Cross on Evidence. [18]

    16. (1993) 178 CLR 193 at 208; [1993] HCA 63.

    17. (1975) 134 CLR 640 at 694; [1975] HCA 63.

    18.    JD Heydon, Cross on Evidence (10th Aust ed, 2015, LexisNexis), [33435].

29. It is no doubt true that one cannot torture a statement, “I did not do the act,” to extract an admission that “I did do the act”. [19] However, if there is evidence to the contrary, a conclusion that the witness is lying to avoid admitting the truth of what is put to him or her, may well constitute affirmative evidence. As JD Heydon observed in 1973, [20] referring to the facts in Scruby v The Queen:[21]

“Thus the admitted payment of money to a little girl who charged the accused with a sexual offence was held not to be corroboration, being equally consistent on the facts with guilt and innocence, but a false denial of such payment is corroboration.”

19. Edmunds v Edmunds & Ayscough [1935] VLR 177 at 186 (Lowe J): Cross on Evidence [15210].

20.    “Can Lies Corroborate?” (1973) 89 LQR 552, 553.

21. (1952) 55 WALR 1.

30. It is not necessary to cite extensive authority for the proposition that a person may make an admission against interest by conduct. A lie in relation to a material issue may constitute such conduct. Steinberg was a case in which the purpose for which land was acquired, either for use or for resale, was a critical fact. The trial judge (Mason J) had rejected the appellant’s evidence. In dismissing the appeal, Gibbs J stated: [22]

“The fact that a witness is disbelieved does not prove the opposite of what he asserted: … Hobbs v Tinling …. It has sometimes been said that where the story of a witness is disbelieved, the result is simply that there is no evidence on the subject …, but although this is no doubt true in many cases it is not correct as a universal proposition. There may be circumstances in which an inference can be drawn from the fact that the witness has told a false story, for example, that the truth would be harmful to him; and it is no doubt for this reason that false statements by an accused person may sometimes be regarded as corroboration of other evidence given in a criminal case ….”

22.    Steinberg at 694.

31. There is no logic which denies that proposition, especially in circumstances which involve a party as a witness claiming that everything that he said in a recorded meeting (which he had no reason to think was being recorded) was “false” or a “fabrication”. He was either lying at the meeting, or he was lying in denying the truth of what he said at the meeting. It should have been accepted that his evidence, if disbelieved, could have provided support for the defence as pleaded by the appellants. No doubt the jury might have been given appropriate warnings as to the possibility of other explanations, but this was not a criminal trial and the circumstances were in any event somewhat unusual.

32. It is true that the trial judge heard Mr Pahuja give evidence and this Court lacks that advantage. However, the judge did not rely upon that fact, nor suggest that there was some aspect of his demeanour or some other factor not capable of being derived from a transcript which demonstrated that the jury could not reasonably have concluded that he was lying in the witness box.

33. For these reasons, the trial judge was in error in withdrawing the defence of truth from the jury with respect to imputations (h) and (j).

34. For reasons given above, imputation (a) did not require a finding that Mr Pahuja had introduced more than one person to Mr Bebawy; the evidence that he was knowingly involved in a “scam” to obtain 457 visas could have been satisfied by the steps he took with respect to Mr Singh’s application. It was reasonably open to the jury to accept the evidence contained in the tape of the recorded meeting without having to draw a positive inference from any lies which may have related to his role at the meeting. Accordingly, it was an error to withdraw the defence of truth from the jury with respect to imputation (a).

Operation of defences - truth and contextual truth

35. The defence of contextual truth is covered by s 26 of the Defamation Act, which needs to be read in association with s 25:

25   Defence of justification

It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true.

26   Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a)   the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and

(b)   the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.

36. The issues raised at trial were twofold. First, there was a question as to whether the defence of justification in s 25 and thus also in s 26, is an all or nothing matter: in other words, is the reference to “defamatory matter” in the chapeau capable of a distributive operation so that a contextual imputation may provide a defence with respect to one part of the defamation, but not with respect to another?

37. The second issue related to the relevance of imputations which have been relied on by the plaintiff and found to be conveyed and defamatory, but to which the publisher has successfully relied upon the s 25 defence, showing that they were substantially true. The reference to a contextual imputation being carried “in addition to the defamatory imputations of which the plaintiff complains” has been held to mean that, even if substantially true, they cannot be relied upon as contextual imputations.

38. The trial judge held that she was bound to answer both questions adversely to the submissions of the appellants. That meant that the contextual imputation relied upon had to be capable of preventing the totality of the defamatory imputations causing further harm and that no reliance could be placed for this purpose on any imputation relied on by the plaintiff which had been proved substantially true. [23] The judge concluded:

“[48]   … I was of the view that the imputations on which the plaintiff had succeeded, particularly imputation (a), were so serious that the evidence regarding the plaintiff's lies was simply incapable of meeting the statutory test.”

23.    Primary judgment at [42] and [45].

39. On one view it is unnecessary to address this matter further because there must be a retrial with respect to the truth of the imputations subject to a defence which was withdrawn from the jury. On that view, it will not be possible to know the potential harm to the plaintiff’s reputation until it is known which imputations unlawfully caused such harm. In this Court, the contextual imputation pleaded was said to involve the fact that the plaintiff had repeatedly told lies under oath about his involvement with Mr Bebawy. However, that complaint could not form part of a contextual imputation derived from the publication of the defamatory matter. The denials under oath occurred at the trial. They may have been relevant to the question of damages, but not to the defence under s 26. The appellants did not challenge the findings as to the construction of s 26 adopted by the trial judge.

40. It follows that, subject to an issue as to the operation of s 25 raised by the plaintiff, the appellants should succeed with respect to their complaints about the withdrawal of their defence with respect to three imputation being withdrawn from the jury. Ordinarily that conclusion would necessitate a retrial. The plaintiff resisted that conclusion on the basis that it was not open to a defendant to succeed on a defence of substantial truth unless it justified the whole of the defamatory matter, and not just individual imputations. Because, the argument proceeded, there was no longer any claim that imputation (g) was substantially true, the defence must fail in any event. The plaintiff accepted that the justified imputations could be taken into account in reducing damages, but asserted that there was no challenge to the assessment of damages. [24] The plaintiff further submitted that an imputation relied on by the plaintiff but successfully justified by the defendant under s 25 could not be taken into account against the plaintiff in support of a defence of contextual truth under s 26. [25]

    24.    Tcpt, 07/03/19, p 46(5)-(15).

    25.    Tcpt, p 47(15)-(30).

41. Although counsel submitted that her propositions flowed from the ordinary meaning of s 25 and s 26, that is by no means self-evidently correct. Indeed, the authorities demonstrate a significant level of confusion as to the operation of ss 25 and 26 of the Defamation Act and even as to the proper approach to resolving the issues of construction. It is therefore necessary to consider how those provisions operate.

42. Regrettably, it is not easy to summarise succinctly the operation of the law in this area. To the extent that this Court bears part of the responsibility for that situation, it is desirable that it be rectified, so far as possible. However, the submissions did not fully address the conflicts, nor invite this Court to reconsider any existing authority. Sufficient should be said to reject the plaintiff’s contention that, in the event that the errors identified in the notice of appeal are upheld, no retrial is warranted

43. There appear to be two somewhat inconsistent reasons for the current level of uncertainty. On the one hand, significant attention has been given to understanding the contextual background of the legislation, relevantly said be the “common law” principles governing defamation. That turns on the statement in s 6(2) of the Defamation Act that the Act “does not affect the operation of the general law in relation to the tort of defamation except to the extent that this Act provides otherwise (whether expressly or by necessary implication).” Accepting that to be so, it does not follow that the common law will necessarily provide useful guidance at the initial stage of construing the Defamation Act. In particular, it is quite unlikely that the “common law” will provide relevant guidance when construing the statutory defence of contextual truth, being a defence unavailable at common law. Indeed, assistance in construing the Act by reference to New South Wales case law is a particularly fraught exercise in circumstances where s 6(3) requires that the general law is to be understood as if the Defamation Act 1958 (NSW) and the Defamation Act 1974 (NSW) “had never been enacted”.

44. The principal cases in this Court have elided the language of s 6, preferring to refer to “the common law”, rather than the statutory reference to “the general law”. Thus, in Fairfax Media Publications Pty Ltd v Kermode [26] and Fairfax Digital Australia & New Zealand Pty Ltd v Kazal,[27] the “general law” was only referred to when quoting s 6 (or the explanatory memorandum), whereas there were 30 and 25 references respectively to the “common law”.

    26. (2011) 81 NSWLR 157; [2011] NSWCA 174.

    27. (2018) 97 NSWLR 547; [2018] NSWCA 77 at [13].

45. The concept of the common law, in such a context, is somewhat fraught. If it is taken to refer exclusively to judge-made law, allowance would have to be made for the fact that there have been Defamation Acts in New South Wales since 1901. [28] Relevantly for present purposes, s 7 of the Defamation Act 1912 (NSW) made express provision with respect to the defence of justification which was considered Howden discussed below.

    28. Defamation Act 1901 (NSW) and the Amendment Act No 22 of 1909 (NSW). That Act was followed by the Defamation Act 1912 (NSW), which remained in force until replaced by the 1958 Act.

46. Further, many of the English cases referred to as revealing the “common law” arose at a time when English law was also the subject of statutory enactments. A leading text on defamation law in the UK, [29] refers to the Libel Act of 1792 [30] which was followed by numerous Libel Acts in the course of the 19th century, followed by a major consolidation in the Defamation Act 1952 (UK), which has been significantly affected by the Human Rights Act 1998 (UK), and was replaced by the Defamation Act 2013 (UK). It is true that none of these Acts produced a code, and earlier legislation had less coverage than later legislation.

    29.    Gatley on Libel and Slander (12th ed, 2013, Sweet & Maxwell) [34.4].

    30.    32 Geo 3 c 60 (Fox’s Act 1792).

47. It is no longer practicable to unscramble the principles which now constitute the tort of defamation so as to identify which aspects were entirely judge-made law, which derived from statute and which resulted from judicial interpretation of statutes. It is likely that such an understanding underlay the use by the drafter of the uniform Defamation Acts of the term “the general law in relation to the tort of defamation”, rather than the common law. That reference should be understood to include general legal principles which cannot readily be traced immediately to a specific statutory provision. That in turn provides a useful context to understand s 6(3) requiring that “the general law as it is from time to time applies for the purposes of this Act as if the following legislation had never been enacted” referring to the 1958 and 1974 Defamation Acts in this State. Accordingly, the better course in considering whether there is inconsistency between the 2005 Act and the general law is to consider the legislation by reference to broader general law principles, rather than by reference to specific rules said to be part of “the common law” of defamation.

39. The second, and potentially conflicting approach, has been to read these provisions as if they contained no element of nuance or ambiguity. However, there is undoubtedly ambiguity at a number of levels.

40. First, a superficial consideration of both sections might lead to the conclusion that each provides a singular defence which either provides an answer to the plaintiff’s cause of action in defamation, or it does not. That is because the statutes provide “a defence to the publication of defamatory matter”. On the other hand, what the defendant must demonstrate under s 25 to be substantially true is not “the defamatory matter” but “the defamatory imputations carried by the matter of which the plaintiff complains”. Accordingly, and appropriately, a defendant will plead the substantial truth of the imputations identified by the plaintiff. A similar structure may be found in s 26. This reasoning led McColl JA in Kermode to the following conclusions:

“[78]   This markedly different language highlights the sea-change the 2005 Act has wrought to defamation law in this State. Although s 26 created a new defence for all Australian jurisdictions other than this State, it is framed by s 8 in terms of the common law cause of action. A defence of contextual truth must defeat the whole defamatory matter (cause of action) of which the plaintiff complains, that is to say all of the plaintiff's stings: see [47] above. Thus s 26 postulates that the defence of contextual truth must carry contextual imputations ‘in addition to’ those ‘of which the plaintiff complains’.

[79] Secondly, when the tribunal of fact comes to the weighing exercise the contextual truth defence entails (see … s 26(b)) it must be able to conclude that because of the substantial truth of the contextual imputations ‘the defamatory imputations’ - that is to say the plaintiff's cause of action - do not further harm the plaintiff's reputation. Once again the focus is on comparing the defendant's contextual imputations with the plaintiff's cause of action.

[80]   Thirdly, the use of the definite article in both sub-paragraphs of s 26 (‘the defamatory imputations’) focuses attention on the plaintiff's imputations as a group - emphasising that the defence has to respond to all the plaintiff's imputations (cause of action). In contrast, s 16(2) of the 1974 Act used the indefinite article, directing the defence to ‘any imputation complained of’, thus permitting the pleading-back of any other of a plaintiff's imputations to another.

[81]   Fourthly, the words ‘in addition to ...’, as the primary judge pointed out … correctly in my view, cannot be ‘contorted to include imputations pleaded by the plaintiff’. To conclude that the phrase ‘in addition to...etc’ connotes an imputation the plaintiff has not relied upon does no more than ascribe its ordinary meaning to it. This is reinforced by the use, in the same paragraph (s 26(a)) of further alternative language emphasising the distinction between the plaintiff's and the defendant's imputations: ‘one or more other imputations...’, the latter being defined as the ‘contextual imputations’. Kaye J took the same approach to the construction of s 26 in the Defamation Act 2005 (Vic) in Newnham v Davis [31] - where the point presently under consideration did not arise.

[82]   Finally, I do not discern any legislative intention in the extrinsic materials to which I have referred that the s 26 defence was to continue the pleading-back practice which prevailed under s 16 of the 1974 Act. Rather, in my view, the structure of the 2005 Act and the language of s 26 belie any such intention. The New South Wales Attorney General said, in the Second Reading Speech to the Bill which became the 2005 Act, in reference to cl 26 that there would be a defence of contextual truth under the 2005 Act, that there had been one under the 1974 Act and that ‘[t]he purpose of the defence [was] basically to prevent plaintiffs from taking relatively minor imputations out of their context within a substantially true publication’. That position is still open under s 26.”

31. (No 2) [2010] VSC 94 at [48].

50. If correct, a similar approach must be adopted to the defence of justification under s 25, to the extent the language is similar. Despite the pleading in the present case, which involved imprecise imputations with a high degree of overlap, properly pleaded imputations should be precise and distinctive. It must follow that to plead substantial truth to three out of five defamatory imputations cannot provide a defence to the plaintiff’s whole cause of action and, presumably, should thereby be struck out, unless it is permitted to remain as a pleaded defence against the possibility that the other two imputations (which are not substantially true) may be rejected by the jury as either not conveyed or not defamatory. In the present case, the defendant was allowed to plead substantial truth to seven out of 11 pleaded imputations without demur; the other four were rejected by the jury as not conveyed or not defamatory.

51. There is a further problem with this construction of the legislation: how is a successful defence of substantial truth with respect to fewer than the whole number of pleaded imputations to affect the plaintiff’s cause of action if they do not constitute a “defence” to the whole cause of action? Assuming some effect, there are two possible outcomes. One is that those imputations must from then on be disregarded, so that they cannot harm the plaintiff’s reputation, nor support a defence of contextual truth. The alternative is that they diminish the plaintiff’s reputation prior to assessment of the harm caused by the other imputations.

52. One way of achieving the latter effect is, contrary to the apparent conclusion in Kermode at [82], to allow the defence to contingently “plead back” any of the plaintiff’s imputations found to be substantially true. The reason why that was found to be inappropriate under s 26 was that the defendant’s contextual imputations were described in par (a) as being “in addition to” the defamatory imputations of which the plaintiff complains. Section 26(a) has been held to create two categories of imputation being, first, those of which the plaintiff complains and, secondly, the “additional” imputations relied on by the defendant.

53. In seeking to summarise the more extensive statements set out above, McColl JA in Kermode stated:

“[86]   In summary, a defendant seeking to justify the defamatory matter under the 2005 Act may take the following courses of action, some statutory, some based on the common law:

(a) prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true: s 25;

(b)   prove that rather than the defamatory imputations pleaded by the plaintiff, the defamatory matter carries nuance imputations which are substantially true;

(c)   to the extent that the defendant fails to establish all the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, rely on those proved to be true in mitigation of the plaintiff's damages: partial justification; and

(d)   to the extent the defendant can not prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, prove that it carries contextual imputations that are substantially true, by reason of which the defamatory imputations do not further harm the reputation of the plaintiff: s 26.”

54. The language of “nuance imputations” and “partial justification” appear to be the courses of conduct “based on the common law”, as discussed in Kermode at [50] (partial justification) and [56] (nuance meanings). It was said that partial justification could be relied upon in mitigation of damages: Kermode at [59(c)]. Although the principles stated at [86] were said to rely partly on the Defamation Act and partly on the common law, the reasons did not address the question of consistency with s 25 and s 26 of the Act.

55. It may be doubted whether the principle of partial justification identified in Kermode was entirely consistent with earlier authority. In Howden v “Truth” & “Sportsman” Limited, [32] a publication by the defendant alleged that the plaintiff had been convicted and sentenced on charges involving dishonesty. The defendant’s plea of truth went only to the conviction and sentence, which had in fact been set aside. The High Court concluded that the allegations were not true. (Section 7 of the Defamation Act 1912 (NSW) required that the plea should also demonstrate that the publication was for the public benefit.) Evatt J stated:[33]

“Even in England, where truth alone is a defence, a justification of part only of a number of defamatory statements is not always allowed. ‘Where the libel cannot be severed, or is not divisible in its nature, but contains in substance one charge, the defendant must justify it as a whole; a single sentence or portion of a sentence cannot be picked out and justified’ (Gatley on Libel and Slander, 2nd ed (1929), p 554). Where part only of a libel can be justified, no further complication arises. Such a justification in part is possible for two reasons, first, so far as concerns civil liability in England, ‘the speaking of the truth is not a ground of legal liability at all’ (T A Street, Foundations of Legal Liability, (1906), vol 1, p 275) so that ‘the very conception of defamation involves the idea of falsity’ (Ibid, p 300); secondly, because of such general conception, the evidence of truth in relation to a defamatory imputation, if established after an apt pleading, may be regarded as entirely obliterating that imputation, and as leaving the ground open for dealing with the residue of the untrue imputation. In other words, the defence of truth can operate ‘distributively,’ and so may protect pro tanto.”

32. (1937) 58 CLR 416; [1937] HCA 74.

33. 58 CLR at 431.

56. When the matter came back to the Supreme Court, an amended plea was struck out. The publisher appealed, in the course of considering which, Jordan CJ stated:[34]

“There can be no doubt that, at common law, in a civil action, ‘a justification need not be to the whole, but may be to a part. If a man say that a certain neighbour of his was guilty of manslaughter and was also a thief, it is perfectly open to take a plea in justification of either charge only’: Sutherland v Stopes. [35] It is, however, necessary that the part sought to be separately justified should be severable, and also that the pleading should clearly indicate exactly what the severed part is which is sought to be separately justified.”

34. Howden v “Truth” and “Sportsman” Ltd (No 2) (1938) 38 SR (NSW) 287 at 290.

35. [1925] AC 47 at 78.

57. It follows from these statements, assuming that they reflect “the general law”, that justification in part was permissible as a defence with respect to truly distinct and separate imputations. Howden was relied upon by McColl JA when the operation of s 26 of the Defamation Act arose in Kazal. Again referring to the “common law”, McColl JA stated:

“[12]   At common law, where a defendant is not able to justify all the imputations carried by a matter complained of, the defendant may nevertheless seek to justify any one of several distinct defamatory meanings raised by a plaintiff’s claim. This is known as partial justification. Views differ as to whether it is a defence to the cause of action, which is the publication of defamatory words or merely relevant to the question of damages, and if proven, results in a reduction in damages.”

Then, following the extract as to severable parts of a defamatory matter explained by Evatt J in Howden, McColl JA continued:

“[14]   Evatt J’s view that an imputation found to be entirely true was obliterated cannot be taken at face value. Such a dramatic consequence was, as I have explained, only appropriate where a justification defence succeeded completely. More accurately, where a defendant establishes only one, or some, of several of a plaintiff’s imputations to be substantially true, to that extent, the plaintiff’s reputation has been ‘brought down’ to its ‘proper level’.”

58. McColl JA addressed the inter-relationship of s 25 and s 26 in Kazal in the following terms:

“[20] When the effect of a finding for the purposes of s 25 that a defamatory imputation is substantially true is that the plaintiff’s reputation is lowered to that extent, the significance of this conclusion for the purposes of s 26(b) is apparent. While the substantially true imputation is still an imputation of which the plaintiff complains, the finding that it is substantially true has the effect of lowering the plaintiff’s reputation. This is reflected in the fact that it can be relied upon in mitigation of damages.

[21]   However, in my view, once a plaintiff’s imputation has been found to be substantially true, that finding cannot be ignored. It must be given effect, not only for the purposes of mitigation of damages, but, too, in considering any contextual truth defence. In my view, a plaintiff is not entitled to have the tribunal of fact consider the s 26(b) exercise, without considering when determining whether the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations, that any plaintiff’s defamatory imputation found to be true has already harmed the plaintiff’s reputation.

59. If, as accepted at [20], a substantially true imputation “has the effect of lowering the plaintiff’s reputation” it is not clear why a jury should be directed to ignore that fact in applying the weighing exercise required by s 26(b). That is quite a different exercise from applying the finding in mitigation (reduction) of damages, an exercise which must derive from the general law, as it finds no reflection in the Defamation Act.

60. McColl JA continued in Kazal:

“[32]   When putting ‘the plaintiff’s imputations in their factual context according to the content of the whole of the article’, it is clearly relevant for the tribunal of fact to consider that by reason of the substantial truth of one or more of those imputations, any presumption that the plaintiff’s reputation has suffered damage by reason of the publication of that imputation has been rebutted and the plaintiff’s reputation has, accordingly, already been lowered to that extent. It remains open to the plaintiff to complain of that imputation and to submit that the effect of the finding of substantial truth does not weigh the s 26(b) scales in the defendant’s favour.

[33]   The s 26 defence still operates to defeat the plaintiff’s cause of action, according to the tribunal of fact’s determination on the s 26(b) weighing exercise, but with the ‘true’ nature of the plaintiff’s reputation able to be considered in that context.

[34]   On the construction I have advanced, it is unnecessary for a defendant to plead or particularise the effect of a substantially true plaintiff’s imputation for the purposes of s 26. That will follow as a matter of law.”

61. This reasoning is not presently the law in this State. It attracted the disagreement of the majority in Kazal. Meagher JA identified the question in issue as “whether a plea of contextual truth under … s 26 may adopt, as contextual imputations, those of the imputations pleaded by a plaintiff that are subsequently found to be carried, defamatory and ‘substantially true’.”[36] Importantly, there was a qualification with respect to the question so identified:

“[38] The applicants in this appeal (Fairfax) did not submit that the same course was necessarily available under the uniform defamation laws. Specifically, it did not submit that a plea of justification under s 25 or contextual truth under s 26 could be directed, and operate pro tanto as a defence, to that part of the cause of action for publication of defamatory matter that related to particular defamatory imputations. It accepted in oral argument that pleas of justification under s 25 or the common law (as opposed to pleas in mitigation of damages often misleadingly called ‘partial justification’) fail unless all defamatory imputations carried by the defamatory matter and pleaded by the plaintiff were proved to be substantially true. That concession accords with a proposition assumed or decided in intermediate appellate courts, namely, that each of the defences under ss 25 and 26 operates on an all-or-nothing basis: see Fairfax Media Publications Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174 esp at [46], [47], [77], [78] (McColl JA, Beazley and Giles JJA agreeing); Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 at [14], [15] (Fraser JA, Holmes JA and Fryberg J agreeing); but see Rose v Allen & Unwin Pty Ltd [2015] NSWSC 991 at [8] (McCallum J). Accordingly, what follows assumes that proposition to be established and not challenged.”

36. Kazal at [36].

62. There is a difference between the substantially true imputation falling away and the substantially true imputation ceasing to be a defamatory imputation complained of by the plaintiff and becoming “capable of being adopted by a defendant as a contextual imputation”, as pleaded by the appellant in that case. [37] Meagher JA rejected the reasoning of McColl JA, suggesting that her approach had not been adopted by either party, and continued:

“[47]   The reference in s 26(b) to the defamatory imputations ‘further’ harming the plaintiff’s reputation seems to presuppose that the substantial truth of the contextual imputations may (through publication) cause some ‘harm’ to the plaintiff’s reputation. If that is so, the sense in which ‘harm’ is used in the provision would not be limited to actionable injuries at common law; instead, it would comprehend any lowering of a plaintiff’s reputation in the community, whether deserved or not: cf Rofe v Smiths Newspaper Ltd (1924) 25 SR (NSW) 4 at 21–22 (Street ACJ). It would seem to follow that the substantial truth or falsehood of any of ‘the defamatory imputations’ would be irrelevant in determining whether those imputations ‘further harm’ the plaintiff’s reputation in the necessary sense.”

37. Kazal at [40].

63. Gleeson JA also rejected the approach of McColl JA:

“[149]   In my view, a defamatory imputation does not cease to be one ‘of which the plaintiff complains’ (s 26(a)) if it is found by the tribunal of fact to be substantially true in the context of a different defence (s 25) which, by hypothesis, has failed. That is, the meaning of the imputations answering the description of ‘the defamatory imputations of which the plaintiff complains’ in s 26(a) does not change at trial. This is sufficient to dispose of grounds 1, 3, 4 and 5.

[150] Insofar as McColl JA at [22]-[34] above, advances a construction of s 26(b) which would allow the tribunal of fact to take account of any earlier finding (for the purpose of s 25) as to the substantial truth of a plaintiff’s imputation in undertaking the comparative or weighing exercise under the subsection, that was not in issue or the subject of argument in this appeal, and I respectfully agree with the observations of Meagher JA at [46]-[47] above.”

64. In Chel v Fairfax Media Publications (No 6),[38] decided before Kazal, Beech-Jones J, in the course of a trial, was required to choose between two propositions in relation to the operation of s 26. The defendant had established the truth of some, but not all, of the plaintiff’s imputations. Neither party suggested that the harm caused by the justified imputations should be considered as resulting from the imputations of which the plaintiff complained, for the purposes of the contextual truth defence. Rather, the plaintiff submitted that those imputations which had been held to be substantially true should be disregarded in carrying out the weighing exercise under s 26(b); the defendant submitted that such imputations could be taken into account on the defendant’s side of the balance, as they were no longer imputations of which the plaintiff complained.

    38. [2017] NSWSC 230.

64. Beech-Jones J first considered whether he was bound to follow the judgment of the Queensland Court of Appeal in Mizikovsky v Queensland Television Ltd. [39] He observed that Mizikovsky would require that the success of a defendant in demonstrating the substantial truth of some of the plaintiff’s imputations should be disregarded for the purposes of s 26, so that those imputations remained in the balance on the plaintiff’s side of the record as demonstrating part of the harm suffered (the position later approved in Kazal). Beech-Jones J accepted that that (counterintuitive) conclusion was inconsistent with Kermode and other authority in New South Wales and should not be followed. This Court had already suggested that Mizikovsky and Kermode could not stand together. [40] (Neither party in Chel had suggested otherwise.)

    39. [2014] 1 Qd R 197; [2013] QCA 68 (Fraser JA, Holmes JA and Fryberg J agreeing).

    40. Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369 at [80], [86].

65. The substantive issue in Chel was whether a defamatory imputation found to be substantially true was no longer an imputation of which the plaintiff complains and was therefore one which could be relied on by the defendant as a contextual imputation; the alternative was that it should simply be disregarded. Beech-Jones J concluded that it was correct to say that the imputation was no longer one of which the plaintiff complained, but that it could not simply be disregarded. Section 26 “does not contemplate the existence of a defamatory imputation found to be substantially true that is not either a ‘defamatory imputation of which the plaintiff complains’ or ‘[an]other imputation … that [is] substantially true’. A defamatory imputation found to be substantially true must be one or the other.” In Kazal, both McCallum J (the trial judge) and this Court unanimously rejected the first limb, namely that the justified imputation is no longer one of which the plaintiff complains. [41]

    41. Kazal at [40].

A purposive interpretation – s 25 and s 26

67. It is patent from the contradictory state of the case law that the language of s 26 is not easy; its interpretation involves choices. Reasoning which focuses upon the words used in ss 25 and 26, as if there were no choices to be made, is untenable. If a choice has to be made regard must be had to the requirement of s 33 of the Interpretation Act 1987 (NSW) that a construction that would promote the purpose or object underlying the provision shall be preferred to a construction which would not promote that purpose or object.

68. It is convenient to start by identifying the key choices by reference to the language of the provisions. First, as was noted in Kazal, both provisions refer to “the defamatory imputations of which the plaintiff complains”. [42] This phraseology, it was suggested, could only refer to the imputations pleaded by the plaintiff, which were a fixed group of imputations and did not change over time. The plaintiff did not cease to complain about imputations which were found to be substantially true.

    42. Section 25 adds the words “carried by the matter” after “imputations”, but nothing turns on that.

69. An alternative approach has regard to the sequential determination of the issues in a defamation trial. The imputations pleaded may be found by the judge or jury not to be conveyed, or, if conveyed, not to be defamatory. If an imputation fails at either of these points, one never reaches s 25; in other words, the jury (or judge) will never be asked to consider whether it is substantially true. It seems uncontroversial that such an imputation will fall away for all further purposes in the trial; however, it must follow that the reference in ss 25 and 26 to “the defamatory imputations of which the plaintiff complains” is not to a fixed and immutable group of imputations.

70. Further, practice, though not the statute, involves the defence of justification (s 25) being addressed before the defence of contextual truth (s 26). Accepting that process, there is nothing in the statutory language to suggest that a reducible category of defamatory imputations of which the plaintiff complains cannot be further reduced by the removal of those found to be substantially true, before considering the defence of contextual truth.

71. Nor is the use of the term “harm” in s 26 necessarily inconsistent with that conclusion. The section requires one to ask whether a substantially true contextual imputation (or the underlying charge) causes “further harm” to the plaintiff’s reputation. The underlying purpose of the tort of defamation is to allow a person to recover damages for harm caused to his or her reputation, but not by speaking the truth. It is arguably inconsistent with that purpose to allow the plaintiff to continue to rely upon harm caused by an imputation found to be substantially true for the purpose of defeating a defence of contextual truth.

72. The case against this reasoning rests in part on the fact that the plaintiff’s cause of action arises from the publication of defamatory matter and not, as under the 1974 Act, a separate cause of action with respect to each imputation. However, that reasoning relies upon the repeal of the 1974 Act in order to construe a provision of the 2005 Act. That would appear to contradict the prohibition in s 6(3). Furthermore, as explained in Howden, justification of part of the defamatory charge has always been possible, where the charge contains separate and severable allegations.

73. Section 25 requires the defendant to prove that specific imputations are substantially true; it does not say that the defence arises only if the defendant proves that all the defamatory imputations are substantially true. It is not inconsistent with the language of s 25 that a defamatory imputation which is substantially true should be disregarded in considering the harm done to the reputation of the plaintiff. It has been held that the weighing exercise in s 26 does not involve the weighing of the imputations, but the weighing of the harm done by the material upon which the imputations are based. [43] Section 26 provides that it is the harm caused by the substantially true imputations relied on by the defendant which fall onto its side of the scale.

    43. Nationwide News Pty Ltd v Weatherup [2018] 1 Qd R 19; [2017] QCA 70 at [46] (Applegarth J, Fraser JA and Douglas J agreeing).

74. It is only if the term “harm” in s 26(b) covers both lawful and tortious harm that this exercise could be justified. The reasoning that it does depends on the assumption that the plaintiff’s imputations, even if justified by the defendant, do not fall away. But the purpose of the statute is to provide compensation for harm tortiously caused. The plaintiff has no right to rely upon harm which is not tortiously caused. It does not promote the apparent purpose of the provision to place substantially true allegations on the plaintiff’s side of the scale. The purposive approach suggests that (i) the interpretation of “harm” as covering the effects of both tortious and lawful statements may be erroneous, and (ii) the underlying implication that the plaintiff’s imputations are those that appear in the pleading, may be wrong.

75. The final question is whether the defendant is entitled to rely upon imputations pleaded by the plaintiff which have been proved to be substantially true. Once it is accepted that imputations not conveyed, or not defamatory, or found to be substantially true fall out of the category of imputations of which the plaintiff complains for the purposes of s 26, the statutory purpose is not served by denying the defendant the right to rely upon those imputations just because they were relied on, unsuccessfully, by the plaintiff. To deny the availability of such a course would be to encourage plaintiffs to plead the most serious imputations available, even if they believe them to be substantially true, in order to deny a defendant the right to rely upon the lawful effect of such a charge on the reputation of the plaintiff. Such a result would be a triumph of pleading rules over the substantive purpose of the tort. On a purposive approach it would not be accepted in the absence of clear language to that effect.

Conclusions

76. Despite foreshadowing before the trial judge a challenge to the reasoning in Kazal, that challenge was not mounted by the appellants on the appeal. The trial judge was required to, and did, follow Kazal in concluding that the defendants could not call in aid defamatory imputations relied upon by the plaintiff shown to be substantially true. [44] Despite doubts that the approach of the majority in Kazal was consistent with Kermode, it is to be followed until this Court is invited to reconsider it and does so.

    44. Primary judgment at [42].

Orders

77. The judge made orders awarding damages in an amount of $300,000, together with interest on the judgment at the rate of 3.5% from the date of publication, being 28 April 2015: see orders (1) and (2) made on 29 June 2018. Costs orders were made against the appellants, including costs on an indemnity basis from 31 August 2015: orders (3) and (4). The notice of appeal sought orders allowing the appeal, and setting aside orders (1)-(4), together with an order that there be a new trial on all issues including damages and an order for the appellants’ costs in this Court.

78. Even on the respondent’s case, a successful plea of justification to fewer than the whole of the imputations relied on by the plaintiffs may affect the assessment of damages. It is true that the appellants did not challenge the assessment made on the basis of the findings at trial, but it does not follow they would not be entitled to seek a lower award of damages in the event that other imputations were found to be justified. For that reason, the respondent’s resistance to an order for a retrial must be rejected.

79. Ultimately there were no specific submissions as to how the issues on a retrial could be limited, so as to avoid a rehearing of the whole matter. In the absence of precise submissions in that regard, no constraint should be imposed.

80. The appellants have succeeded without agitating the foreshadowed challenge to the correctness of the reasoning in Kazal. Although a specific argument with respect to the contextual imputation pleaded by the defendant has been rejected, the appellants have been entirely successful in the relief they sought and should have their costs of the appeal.

81. The Court should make the following orders:

1. Allow the appeal from the judgment of McCallum J given on 23 October 2018.

2. Set aside orders (1)-(4) made by McCallum J on 29 June 2018.

3. Order that there be a new trial of the matter.

4. Direct that the costs of the first trial be determined in the course of the new trial.

5. Order that the respondent pay the appellants’ costs in this Court.

6. Grant the respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

82. PAYNE JA: In Edwards v The Queen (1993) 178 CLR 193 at 208-209; [1993] HCA 63, Deane, Dawson and Gaudron JJ said:

“There is a difference between the mere rejection of a person’s account of events and a finding that a person has lied. A lie is a deliberate untruth. To conclude that a statement is a lie is to conclude that the truth lies elsewhere. In some circumstances, a finding that a person lied will necessarily involve acceptance of the contrary. However, the fact that a person has lied does not of itself establish a specific contrary proposition.

Ordinarily, the telling of a lie will merely affect the credit of the witness who tells it. A lie told by an accused may go further and, in limited circumstances, amount to conduct which is inconsistent with innocence, and amount therefore to an implied admission of guilt. In this way the telling of a lie may constitute evidence. When it does so, it may amount to corroboration provided that it is not necessary to rely upon the evidence to be corroborated to establish the lie. At one time it was thought that only a lie told out of court could amount to an implied admission, but the distinction is not logically supportable and is no longer drawn. When the telling of a lie by an accused amounts to an implied admission, the prosecution may rely upon it as independent evidence to ‘convert what would otherwise have been insufficient into sufficient evidence of guilt’ or as corroborative evidence.

But not every lie told by an accused provides evidence probative of guilt. It is only if the accused is telling a lie because he perceives that the truth is inconsistent with his innocence that the telling of the lie may constitute evidence against him. In other words, in telling the lie the accused must be acting as if he were guilty. It must be a lie which an innocent person would not tell. That is why the lie must be deliberate. Telling an untruth inadvertently cannot be indicative of guilt. And the lie must relate to a material issue because the telling of it must be explicable only on the basis that the truth would implicate the accused in the offence with which he is charged. It must be for that reason that he tells the lie. To say that the lie must spring from a realization or consciousness of guilt is really another way of saying the same thing. It is to say that the accused must be lying because he is conscious that ‘if he tells the truth, the truth will convict him’.”

83. A deliberate lie told in consciousness of guilt may be considered by the jury with other evidence in order to determine guilt to the requisite standard. A lie of this kind can be a “strand in the rope” in a circumstantial case: see Shepherdv The Queen (1990) 170 CLR 573; [1990] HCA 56 cited in Edwards at 210. A fortiori, a lie told by a plaintiff in the context of a defamation hearing (whether in or out of court), if told in consciousness of guilt, may constitute evidence against the plaintiff. Whether the plaintiff lied and whether any lie was told in consciousness of guilt were, in the present case, questions for the jury.

84. I agree with Basten JA, for the reasons given by his Honour that the defence of truth should not have been taken away from the jury with respect to imputations (h) and (j). I also agree, for the reasons given by Basten JA, that imputation (a) did not require a finding that Mr Pahuja had introduced more than one person to Mr Bebawy and that the defence of truth should not have been withdrawn from the jury in relation to imputation (a).

85. The issue about the operation of s 25 of the Defamation Act was only raised in this Court by junior counsel for the respondent at the conclusion of the respondent’s oral submissions. It was a submission premised on the argument that the power of this Court to order a new trial was not engaged here by reason of the absence of an appeal from the damages judgment in Pahuja v TCN Channel Nine Pty Ltd (No 3) [2018] NSWSC 893 coupled with the jury’s finding that imputation (g) was conveyed and was not true.

86. The argument about the correct construction of s 25 of the Defamation Act advanced in this Court was not the subject of any written submissions from the respondent or any notice of contention. The argument had been foreshadowed at the trial and withdrawn as opposing counsel objected that he had no notice of the argument:

“CHRYSANTHOU: We withdrew it because Mr McClintock said he was taken by surprise so we didn't press the argument.”

87. The appellant submitted that this Court should not address a difficult argument about the proper construction of s 25 of the Defamation Act which had been raised, and then withdrawn, before the primary judge and which was not the subject of any written submission or proper notice in this Court. I agree. It is not appropriate, under the guise of an argument about whether there must be a new trial, to determine the proper construction of s 25 of the Defamation Act in circumstances where that construction issue had been raised before the primary judge and then withdrawn.

88. This case is not an appropriate vehicle to consider the difficult issues about ss 25 and 26 of the Defamation Act or the content of the “general law” referred to in that Act. Such consideration should await a case where the issues squarely arise and each side is given a proper opportunity to address the case. This is not least because, properly to address these questions, it may be necessary to consider the correctness of at least one previous decision of the Court.

89. The findings concerning imputations (a), (h) and (j) are dispositive of the appeal. This Court cannot itself decide the remaining issues between the parties and there must be a retrial. It is undesirable for this Court to try and confine the issues to be determined in that retrial and I agree with Basten JA that this Court should not do so.

90. I agree with the orders proposed by Basten JA.

91. SIMPSON AJA: The relevant facts and circumstances are set out in detail in the judgment of Basten JA, which I have read in draft. It is unnecessary to repeat them. The following assumes a familiarity with the facts as there recounted.

92. In short, Mr Pahuja sued on a television program (“A Current Affair”) which, he pleaded, conveyed a number of imputations defamatory of him. The theme of the program, reflected in the pleaded imputations, was what was portrayed as an exploitative and dishonest migration scheme in which Indian nationals seeking approval to live in Australia were charged extortionate sums of money by a migration agent, Mr Mofid Bebawy. Mr Pahuja pleaded, in various formulations, that the program imputed to him dishonest and unscrupulous involvement in the scheme.

93. Of seven imputations pleaded by Mr Pahuja, the jury found five to have been conveyed and to have been defamatory. The appellants pleaded, under s 25 of the Defamation Act 2005 (NSW), that each was substantially true. The primary judge permitted that defence to go to the jury only in respect of imputations (d) and (g). Those imputations were:

“(d)   The plaintiff dishonestly denied knowing the unscrupulous immigration agent.

(g)   The plaintiff introduced Satnam Singh to a dodgy immigration agent, knowing that Mr Singh would have to sell his property in India to pay the excessive and unfair $60K fee demanded by that agent to secure a 457 visa so Mr Singh could remain in Australia.”

The jury found that imputation (d) was a matter of substantial truth but that the appellants had not proved the truth of imputation (g).

94. The primary judge determined that the evidence on which the appellants relied was not capable of establishing the substantial truth of imputations (a), (h) or (j) and therefore declined to allow the defence to go to the jury in respect of those imputations.

95. The appellants also pleaded a defence of contextual truth under s 26 of the Defamation Act. The primary judge declined to allow that defence to go to the jury.

96. The appellants now appeal against the orders subsequently made. They assert that the refusal to allow the jury to consider the defence of substantial truth in relation to imputations (a), (h) and (j) was erroneous, as was her Honour’s refusal to allow the defence of contextual truth to go to the jury.

97. The presently relevant imputations are:

“(a)   The plaintiff was knowingly involved in a cruel immigration scam in which overseas residents were forced to pay tens of thousands of dollars to dishonest immigration agents in order to live and work in Australia;

(h)   The plaintiff acted as a fixer for a dodgy immigration agent by directing persons to that agent he knew were desperate to obtain 457 visas;

(j)   The plaintiff was knowingly involved in a cruel immigration scam in that he arranges the meetings between the foreigners and the agent.”

98. The first issue on the appeal concerns whether the primary judge erred in declining to allow the jury to consider the defence of substantial truth in relation to imputations (a), (h) and (j) (or any of them). The second issue concerns her refusal to allow the jury to consider the defence of contextual truth.

98. The case the appellants proposed to make to support the defence of substantial truth was particularised in a Defence to the Further Amended Statement of Claim filed in court on the second day of the trial. It relied exclusively on the content of the conversation of 1 April 2015 between Mr Pahuja, Mr Satnam Singh and Mr Pramesh Chand, to which reference is made in the judgment of Basten JA at [5] and [23], and which was recorded secretly by Mr Chand. The recording was Exhibit 1 in the trial. An agreed transcript was made available to the jury and to this Court. It was (and is) the appellants’ case that statements made by Mr Pahuja in the conversation implicated him in Mr Bebawy’s migration scheme, and thus proved the truth of the imputations. The appellants also placed some reliance on evidence of bank records of Mr Singh. Other than that, the appellants did not adduce any evidence to support their claim that the imputations were substantially true. As will appear below, however, they sought to rely on evidence given by Mr Pahuja and Mr Singh in the trial, in a manner to which I will come.

99. In order for the appellants to succeed on the defence, it was therefore necessary that the appellants establish the truth of what was said during the course of the conversation, and any inferences that could be drawn therefrom.

100. The name “Mofid” (Bebawy) was mentioned at an early stage in the conversation, by Mr Chand. Thereafter there were statements attributed to Mr Pahuja capable of the construction that he had a degree of familiarity with Mr Bebawy’s operation. For example, in answer to a question by Mr Chand about the fees charged by Mr Bebawy, Mr Pahuja said “60, 61 thousand in total”. As recorded in the transcript, he added:

“And generally he charge 50 thousand for the sponsorship, ten thousand for his fees, so it was all together 66 thousand but you know, I had, you know, negotiation with him so he said that only he can remove five thousand. He was angry last month and I tried to, you know, push him to five thousand more but he said no buddy because he was, he has that much of attitude and he has so many clients.”

102. There were other statements from which an inference might be drawn that Mr Pahuja had had some dealings with Mr Bebawy.

103. However, Mr Pahuja and Mr Singh gave evidence in the trial to the effect that what they had said in the course of the conversation was not true. Mr Pahuja said that he had not, before 30 March 2015, met Mr Bebawy or had a telephone conversation or any other communication with him. He said that he and Mr Singh had deliberately misled Mr Chand about what they asserted to be a superior service provided by Mr Bebawy as a migration agent. (Mr Chand was himself a migration agent who had provided some services to Mr Singh, although Mr Singh was dissatisfied with the outcome.) Mr Pahuja’s explanation was that they were trying to make Mr Chand jealous. It was the appellants’ case that these explanations were patently false and improbable and:

“… so poor and unconvincing that they actually bolstered the case made by the Appellants …”

104. The appellants therefore had two contradictory accounts of Mr Pahuja’s activities or involvement with which to deal. On the one hand, there was the incontrovertible evidence (although subject to interpretation) of what Mr Pahuja had said, as captured in the tape recording. On the other hand, there was the evidence in Mr Pahuja’s case that the inferences the appellants sought to have drawn from the recording could not be drawn because the statements therein made were not true. If the appellants could not persuade the jury that what was said in the tape recorded conversation represented the truth, they could not succeed in the defence of truth of any of the presently relevant imputations.

105. The preliminary issue is whether the evidence – as a whole – provides a sufficient basis to warrant the question of substantial truth going to the jury. That required, in the first instance, an evaluation of the content of the tape recorded conversation, and of the available inferences from that conversation. For that purpose, it was neither necessary nor appropriate to consider the explanation of the recording given in evidence. If the recording, of itself, were sufficient to establish the truth of the imputations (or any of them) it was not necessary to go any further. That alone would have been sufficient to allow the defence to go to the jury and it would not have been necessary to consider the evidence given by Mr Pahuja and Mr Singh.

106. If, however, the evidence on the tape recording were not sufficient of itself to be capable of establishing the truth of the imputations (or any of them) a secondary, and more difficult, question arises: were the appellants entitled to rely on what they contend was the falsity of the evidence given by Mr Pahuja in particular, and Mr Singh, in further support of an inference that the imputations were true?

107. The question then is what inferences would be available to a jury were it to conclude that Mr Pahuja’s explanations for the content of the tape recorded conversation and his denials (for example) of knowing Mr Bebawy were false?

108. The appellants’ contention is that they would be entitled to invite the jury to draw an inference that the denials were made and the explanations given out of a consciousness that the truth – that is, the truth of what was recorded and the inferences to be drawn from what was recorded – would implicate him in one or more of the types of misconduct asserted in the imputations.

109. The primary judge accepted a submission made on behalf of Mr Pahuja that:

“26 … a successful defence of truth under s 25 must entail proof of every element or material part of the imputation.”

That conclusion is not now challenged. However, the ambit of “proof of every element or material part of the imputation”, at least as applied to imputation (a), is in dispute. The need to prove “every element or material part of the imputation”, her Honour concluded, meant that it was necessary that the appellants prove (inter alia) that Mr Pahuja was himself involved in the activities of Mr Bebawy with respect to “overseas residents” – that is, more than one such person.

110. The primary judge accepted, as submitted on behalf of Mr Pahuja, that:

“… taken at its highest, the evidence was simply incapable of reasonably supporting any finding that any person other than Mr Singh was a victim of any conduct attributable to [Mr Pahuja] … As submitted by [senior counsel for Mr Pahuja], there could be only one victim proved and there was no evidence whatsoever of any introduction or referral of any other person to Mr Bebawy by [Mr Pahuja].”

111. In my respectful opinion, that is too narrow an interpretation of imputation (a). Proof of the truth of that imputation does not, in my opinion, require proof that Mr Pahuja was himself involved in multiple instances of exploitation of overseas residents seeking visas permitting them to work in Australia. What it requires is proof that the “scam” in which he was said to have been involved exploited overseas residents (plural). The overall content of the recorded conversation was capable of proving that Mr Bebawy’s activities extended to more than one such person and that Mr Pahuja was “knowingly involved” in that activity. To repeat, it was the “scam” which needed to be shown extended to multiple “victims”; it was not necessary that the appellants show that Mr Pahuja had a role in relation to more than one “victim”. What the appellants had to prove was that Mr Pahuja was “knowingly involved” in the “scam”, and that the “scam” extended to more than one “victim”.

112. The content of the recorded conversation, taken as a whole, was capable of establishing those two facts.

113. In my opinion, therefore, the evidence of the recorded conversation alone was sufficient to warrant to truth of imputation (a) being left to the jury.

114. It is otherwise in relation to imputations (h) and (j). These imputations explicitly assert conduct on the part of Mr Pahuja by “directing persons” (imputation (h)), and arranging meetings between “foreigners” and Mr Bebawy (imputation (j)). The evidence in the tape recording was not capable of establishing that Mr Pahuja had directed more than one person to Mr Bebawy or that he had arranged meetings between more than one “foreigner” and Mr Bebawy.

115. That makes it necessary to consider the secondary element of this aspect of the appeal. The appellants’ case is that the jury could use what they (the appellants) contended was the palpable falsity of the evidence given in the trial by Mr Pahuja and Mr Singh to establish the truth of what was said in the conversation, and therefore the truth of the imputations. Would the jury have been entitled to factor into its consideration of the truth of the imputations Mr Pahuja’s evidence in the trial? This argument proceeds on the assumption that the jury accept the appellants’ contention that the evidence he gave (and, possibly, the evidence that Mr Singh gave) was deliberately false.

116. The primary judge rejected the appellants’ argument, on the basis that proof that a witness has lied in respect of a factual proposition does not establish the converse. She referred to Hobbs v C T Tinling & Co Ltd [1929] 2 KB 1, in which Scrutton LJ said:

“But rejecting his denials does not prove the fact he denies, of which there is, and can be, no other evidence.” (at 19)

and:

“But by destroying that evidence you do not prove its opposite. If by cross-examination to credit you prove that a man’s oath cannot be relied on, and he has sworn he did not go to Rome on May 1, you do not, therefore, prove that he did go to Rome on May 1; there is simply no evidence on the subject.” (at 21)

Hobbs has long been accepted in Australia. It is not, however, an absolute proposition. In some instances, a finding that a person has lied will necessarily involve acceptance of the contrary. But the fact that a person has lied does not of itself establish a specific contrary proposition: Edwards v The Queen (1993) 178 CLR 193; [1993] HCA 63.

117. In Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63 Gibbs J (as he then was) said:

“It has sometimes been said that where the story of a witness is disbelieved, the result is simply that there is no evidence on the subject … but although this is no doubt true in many cases it is not correct as a universal proposition. There may be circumstances in which an inference can be drawn from the fact that the witness has told a false story, for example, that the truth would be harmful to him [His Honour referred to criminal cases in which false statements may be regarded as corroboration of other evidence]. Moreover, if the truth must lie between two alternative states of fact, disbelief in evidence that one of the state of facts exists may support the existence of the alternative state of facts …” (internal citations omitted)

118. In a defamation case, the following was said:

“If the tribunal of fact rejects the defendant’s evidence that he or she positively believed in the truth of what he or she published, it does not logically follow that the plaintiff has proved that the defendant did not believe in the truth of the publication or had an improper motive. Rejection of the defendant’s evidence, combined with other evidence, may lead to the conclusion that the defendant had no belief in the truth of the publication or knew that it was false. But mere rejection of the defendant’s evidence does not logically and automatically lead to any conclusion as to what his or her state of mind was.” (Roberts v Bass (2012) 212 CLR 1; [2002] HCA 57 per Gaudron, McHugh and Gummow JJ)

Their Honours went on to refer to the passage already quoted from Hobbs.

119. That the statement in Hobbs is not, and cannot be, a blanket proposition, can be illustrated by the jury’s verdict in this case in relation to imputation (d), which was:

“(d)   The plaintiff dishonestly denied knowing the unscrupulous immigration agent.”

The finding that Mr Pahuja had “dishonestly denied knowing [Mr Bebawy]” necessarily established that he did know Mr Bebawy. No alternative, as a matter of logic, is available. That, possibly, on the principles stated in the passages in Edwards extracted in the judgment of Payne JA, might have been able to be used to support an inference that Mr Pahuja was knowingly involved in a “scam” conducted by Mr Bebawy, and therefore the truth of imputation (a). But I have already concluded that the conversation of 1 April was sufficient to do that. Recourse to untruthful evidence (if the jury found Mr Pahuja’s evidence to be untruthful) would add nothing.

120. But such a conclusion could not establish that Mr Pahuja “acted as a fixer” for Mr Bebawy, by directing persons seeking visas to him (imputation (h)); nor could it establish that he “arranges meetings between the foreigners” and Mr Bebawy.

121. What the appellants cannot avoid is that the imputations of which they set out to establish the truth accused Mr Pahuja of “directing persons [plural] to” Mr Bebawy and of “arrang[ing] meetings between the foreigners [plural] and” Mr Bebawy. Each of those necessitates proof of Mr Pahuja’s involvement with more than one “person” or “foreigner”.

122. Even if the jury were to accept that Mr Pahuja’s explanation in his evidence was deliberately false, the most that it could do is to reinforce or strengthen the inference that what he said in his recorded conversation was true. But, as I have already concluded, there is nothing in that conversation that is capable of establishing his involvement with respect to more than one “person” or more than one “foreigner”. A finding that the evidence given in the trial was false could not be used to fill the gaps in the appellants’ evidence. The position is analogous to that which arises where a witness, who might be expected to be called by a party, is not called, and no explanation is provided: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. The unexplained absence of the witness may permit any inference adverse to the party that is available on the evidence to be drawn with more confidence; it does not permit adverse findings of fact for which there is no basis in the evidence: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 at [232] (per Heydon J). The falsity (if the jury so found) of the evidence given in the trial by Mr Pahuja could not make up for deficiencies in the appellants’ case.

123. Since the content of the recorded conversation was insufficient to prove the truth of either imputation (h) or imputation (j), any lies told by Mr Pahuja in his evidence could not give rise to inferences not otherwise available.

124. The primary judge was therefore correct, in my opinion, to decline to allow the truth of imputations (h) or (j) to go to the jury on the basis that their truth could be established (or supported) by false evidence given by Mr Pahuja in the trial.

Contextual truth

125. Section 26 of the Defamation Act provides as follows:

“26   Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that:

(a)   the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and

(b)   the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.”

126. Although the appellants had initially pleaded three contextual imputations, at trial they relied on only one, as follows:

“That the plaintiff is a liar.”

127. In support of the truth of the proposed contextual imputation, the appellants relied on what were asserted to have been false statements made by Mr Pahuja in a statutory declaration, in an affidavit, and in his evidence in the trial.

128. The primary judge declined to allow the proposed defence to go to the jury on the basis that, even if the truth of the imputation were established, it could not satisfy the s 26 test – that is, that by reason of the substantial truth of the contextual imputation, the imputations found to have been conveyed and to have been defamatory (and which were not otherwise defended) “do not further harm the reputation of the plaintiff”.

129. On appeal, the argument advanced against this ruling depended on the nature of the false statements attributed to Mr Pahuja, and the context in which they were said to have been made. That, however, is not the text of the imputation. The appellants did not seek to plead an imputation that Mr Pahuja lied on oath, or that he had lied in circumstances in which he was bound by statute to be truthful; they pleaded only that he was “a liar”. There are many grades and shades of lying, some more serious than others. In order to establish the relative seriousness of a contextual imputation against defamatory imputations proved by a plaintiff, the evidence in support of the contextual imputation is, in my opinion, irrelevant. I agree with the primary judge that, even if the truth of the contextual imputation were established – that is, that Mr Pahuja was a liar – that was not capable of establishing that the defamatory imputations found by the jury did not further harm Mr Pahuja’s reputation. I would therefore not uphold the appeal in relation to the defence of contextual truth.

130. The consequence of these conclusions is that, in my opinion, the defence of substantial truth to imputation (a) ought to have been determined by the jury. There must be a new trial with respect to that issue. In other respects I would dismiss the appeal.

131. It follows from my conclusion with respect to the defence of substantial truth to imputation (a) that the award of damages cannot stand and the orders made on 29 June 2018 must be set aside. There is some complexity in the formulation of the precise orders that should follow. In my opinion the parties have had a proper adjudication of all issues other than the substantial truth of imputation (a) and (potentially) the quantum of damages to be awarded (the latter because the award made was based upon the falsity of imputation (a)). There is no purpose in relitigating the issues that have been determined, and, indeed, it is doubtful that it would be proper to do so.

132. Were this not a minority judgment, I would consider the appropriate course to be to invite submissions from the parties as to the ambit of a new trial and the orders that should be made. Since this is a minority judgment, it is neither necessary nor appropriate to take that course. These reasons are sufficient indication of the nature of the orders I would make.

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Endnotes

Decision last updated: 05 July 2019