William Robert Ell v Katie Milne

[2011] NSWSC 645

Supreme Court

New South Wales

Medium Neutral Citation:

William Robert Ell v Katie Milne [2011] NSWSC 645

Hearing dates:

17 June 2011

Decision date:

27 June 2011

Before:

McCallum J

Decision:

Defendant directed to provide proper particulars of defences of truth and contextual truth of contextual imputation 8(a)(i).

Contextual imputation pleaded in paragraph 8(a)(ii) struck out.

Catchwords:

DEFAMATION - defences - adequacy of particulars of truth - contextual truth - whether contextual imputations pleaded by defendant capable of arising - whether bad in form - whether particulars of contextual truth adequate

Legislation Cited:

Civil Procedure Act 2005
Defamation Act 2005

Cases Cited:

Allen v John Fairfax & Sons [NSWCA, 2 December 1988, unreported]
Ange v Fairfax Media Publications Pty Limited [2010] NSWSC 645
Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106
Con Ange v Fairfax Media Publications Pty Ltd [2011] NSWSC 204
Godman v Times Publishing Co Ltd [1926] 2 KB 273
John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484
Livingston-Thomas v Associated Newspapers (1969) 90 WN (Pt1) (NSW) 223
Papaconstuntinos v Holmes a Court [2009] NSWSC 903
Rajski v Bainton (1990) 22 NSWLR 125

Category:

Interlocutory applications

Parties:

William Robert Ell (plaintiff)
Katie Milne (defendant)

Representation:

Counsel
T Tobin QC with B Kelleher (plaintiff)
T Molomby with L Goodchild (defendant)
Solicitors
Stacks the Law Firm (for the plaintiff)
Neisha Shepherd (for the defendant)

File Number(s):

2010/417226

Publication restriction:

None

Judgment

1. This is an action for defamation brought by a property developer, Mr William Ell, arising out of an email sent by Ms Katie Milne, then a councillor on Tweed Shire Council. Ms Milne sent the email to a number of newspapers and to two special interest groups, the Caldera Environment Centre and the Cabarita Beach Residents Association. Mr Ell alleges that the email was republished in two further emails distributed to people within the Council (the Director of Planning and Regulation, the Mayor and the Executive Management Team).

1. The application before the Court is the plaintiff's application (brought by notice of motion filed 20 May 2011) to have parts of Ms Milne's defence struck out and alternatively seeking orders requiring Ms Milne to provide proper particulars of those parts of the defence.

Background

1. Styled "Letter to the Editor", the email questions the integrity of a number of decisions of Tweed Shire Council concerning certain developments. The email calls for an independent expert review of those decisions. Ms Milne states that the State Government must "look closely at the peculiar outcomes emanating from this Council", with a reminder that two councillors received "massive donations from this developer who donated $80,000 in the 2004 election campaign to the so called Balance Team". Evidently, as revealed later in the email, the developer referred to is Mr Ell. The email continues:

There are serious ethical questions about either of these Councillors voting on these developments, despite Clr Youngblutt not being elected for that Council. The entire Council was sacked largely due to the siphoning of such developer funds through this Tweed Directions campaign.

It would have been a very different vote for these two mini cities if Clr Polglase and Youngblutt had removed themselves from the vote as called for by the community. Instead they relied on an extremely questionable loophole that excused them from declaring any conflict after 4 years: I ask in what other sphere are people excused from pay back obligations after 4 years for such enormous sums involved.

1. After asserting that Mr Ell has also made "massive donations" to both the State and Federal Labor and Liberal governments, the email continues:

The McGurk murder also raises serious concerns. According to Sydney newspapers Mr Bob Ell supplied $100,000 bail when McGurk was accused of firebombings and assault though this was later dropped. McGurk was working for Mr Ell the time of his murder.

1. The meaning of those remarks is to be read in the context of the opening words of the following paragraph, which refer to "even further scandal" arising from certain advice to the Department allegedly having been suppressed by the then Planning Minister.

1. Mr Ell alleges that the email conveyed the following defamatory imputations:

(a) that he was implicated by his own wrongful conduct in the murder of Mr McGurk;

(b) that he had a scandalous association with the murdered man Mr McGurk;

(c) that he paid $100,000 bail for a person who was suspected by police of serious crimes of violence in order to advance his business interests;

(d) that he paid $100,000 bail for a person who was suspected by the police of serious crimes of violence because the plaintiff approved the use of violence in his business ventures;

(e) that he paid $1000,000 bail for services rendered by Mr McGurk as a standover man;

(f) that he conducted his business with regard to property development by employing a person with a reputation for violence.

1. In her defence filed 3 March 2011, Ms Milne denies that the defamatory imputations were conveyed and pleads defences of qualified privilege at common law, truth (as to imputation (b)) and contextual truth.

Defence of qualified privilege

1. The defence of qualified privilege is pleaded in paragraph 6 of the defence, as follows:

The defendant says that any publication or republication of the matter complained of (which are not admitted) was subject to qualified privilege at common law by reason of the existence of a common and mutual interest between herself as publisher and the recipients in the subjects of the publication, being matters of public interest.

Particulars of Public Interest

The integrity and independence of the processes of government.

The character of persons and their associates involved in developments having major public impact.

1. The particulars sought of that defence by Mr Ell (as refined during argument) are:

(a) Can the defendant identify each recipient of the publications having an interest in receiving information on the subject of the communication?

(b) Please particularise the basis on which it is said that the matter complained of relates to the character of persons and their associates involved in development and identify the persons and their associates.

(c) Please particularise the basis on which it is said that the matter complained of relates to the integrity and independence of the process of government.

1. The first request is answered on the pleadings. The recipients of the publication are identified in the amended statement of claim. The defence alleges that the recipients had the interest identified. In terms, it is an allegation made in respect of each recipient identified in the amended statement of claim.

1. As to requests (b) and (c), Mr Molomby submitted on behalf of Ms Milne that those requests effectively ask him to make submissions as to the proper construction of the matter complained of. In my view, there is force in that complaint. It was submitted on behalf of the defendant that clear identification of the particular duty and interest relied upon is necessary as the measure of the evidence that will be admitted at trial. Mr Tobin of Queen's Counsel, who appeared for Mr Ell, reminded me that the case of Papaconstuntinos v Holmes a Court [2009] NSWSC 903 (subsequently overturned on appeal) provided ample illustration of the difficulties that can arise if that does not occur. That was a case, however, in which the respective interests of publisher and recipient were quite different.

1. In the present case, as submitted by Mr Molomby, the interest relied upon is a broad matter of public interest alleged to be common to both publisher and recipient. Bearing in mind my obligations under sections 56 and 58 of the Civil Procedure Act 2005, I am not persuaded that the further particulars sought by the plaintiff are required.

Defence of truth

1. Ms Milne pleads the defence of truth to the imputation that the plaintiff had a scandalous association with the murdered man Mr McGurk.

1. The particulars of truth are:

(a) the plaintiff supplied $100,000 bail for Michael McGurk when he was charged with fire bombings and assault.

(b) McGurk had a reputation in the community as a standover man.

(c) The plaintiff considered various property and business proposals put to him by McGurk and accepted some.

(d) The Plaintiff used one of McGurk's companies for his own commercial purposes.

(e) The Plaintiff made loans to McGurk.

1. It was submitted on behalf of Mr Ell that, taken at their highest, those particulars are not capable of constituting a scandalous association, which is the sting of the imputation sought to be justified. The sum of the allegations is that Mr Ell provided bail for, and had some business dealings with, a man who had a reputation as a standover man.

1. It was submitted on behalf of Mr Ell that the reputation of Mr McGurk cannot of itself be a basis for the defence. Mr Tobin relied upon the decision in Livingston-Thomas v Associated Newspapers (1969) 90 WN (Pt1) (NSW) 223 at 231-2. The short proposition which may be derived from that passage of the judgment is that the capacity of a publication to defame a person is less when the sting of the article is primarily directed at some other person, touching the plaintiff only by reason of his relationship with that person. Thus Jacobs JA expressed the view that it might be defamatory of a man to say that his mother was a whore or that his father was a murderer, but that a publication which reported that a man's father had become a voluntary patient at a mental hospital was not capable of defaming the son.

1. The primary sting of the relevant part of the matter complained of in the present proceedings is that Mr McGurk had a reputation as a stand-over man. The relevant relationship is that the plaintiff had some business dealings with that man and agreed to provide bail for him in a substantial sum (presumably intended to mean that he agreed to be a surety in that sum for a grant of bail by the Court).

1. As to the defendant's reliance on the allegation concerning Mr McGurk's bail, Mr Tobin submitted that the provision of bail cannot found an allegation of scandalous association. Bail is granted in the context that the person charged is presumed innocent unless and until convicted.

1. In my view, there is force in those submissions. The provision of surety for bail says nothing about a person's guilt or innocence of the offence charged, but speaks only to the likelihood that the person will appear in court when next required to do so and will comply with any conditions of the bail granted in the meantime. For like reasons, I do not think that the provision of surety for bail for a person with a bad reputation says anything about the person who provides the security. It is not capable of being understood as scandalous.

1. For those reasons, in my view, the particulars given are incapable of proving an association between the plaintiff and Mr McGurk of the nature or character alleged in the imputation.

Defence of contextual truth

1. Paragraph 8 of the defence raises the defence of contextual truth under section 26 of the Defamation Act 2005, which provides:

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 .

1. The principles to be applied in determining whether a defendant should be permitted to rely upon a contextual imputation are conveniently collected in the decision of Nicholas J in Con Ange v Fairfax Media Publications Pty Ltd [2011] NSWSC 204 at [13] and following. His Honour noted that the issues which will arise in relation to a defence of contextual truth under the 2005 Act are similar to those which arose under the Defamation Act 1974, but also noted that there is some difference in the language of the two sections, as pointed out by Simpson J in Ange v Fairfax Media Publications Pty Limited [2010] NSWSC 645 at [50] to [52].

1. In John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484, McColl JA summarised the relevant authorities at [212] as follows:

(a) the defence of contextual truth under s 16 was created to fill a lacunae (sic) in the common law by enabling a defendant to justify a meaning of the matter complained of upon which the plaintiff had not relied;

(b) a contextual imputation must be another imputation from the plaintiff's imputation; the test of whether it differs in substance from the plaintiff's imputation is a necessary but not sufficient test for 'another' imputation, which requires a difference in kind ( Jones ); it must be a "truly alternative" imputation ( Hepburn );

(c) a contextual imputation may plead a different "sting" entirely from that relied upon by the plaintiff; and

(d) a plea of contextual truth admits that the matter complained of conveyed the imputations relied upon by the plaintiff, does not seek to justify those imputations (save where a contextual imputation singly, or in combination, pleads back one of the plaintiff's imputations), but seeks to establish that by reason of the substantial truth of the contextual imputation(s), the imputation complained of does not further injure the reputation of the plaintiff.

1. The contextual imputations pleaded by Ms Milne in paragraph 8 of the defence are:

(i) that as a developer the plaintiff has attempted to buy the favours of State government and the local council by making large donations to political parties and election campaigns (referred to in argument as "the political donations imputation");

(ii) that as a developer, the plaintiff gave support, by providing $80,000 to Tweed Directions before the 2004 Council elections, to an electoral fraud by which the people of Tweed were duped and deceived (referred to in argument as "the electoral fraud imputation").

1. The first objection to that pleading is to the contextual imputations themselves. Mr Tobin submitted that the matter complained of is incapable of conveying imputations in those terms. He noted that the making of donations to political parties is a lawful act. That, of course, is an uncontroversial proposition. Perhaps more controversially, Mr Tobin sought to draw support for his capacity argument from the implied constitutional freedom of communication in relation to public affairs and political discussions. Mr Tobin relied upon the decision of the High Court in Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106 at [169] where it was held that the implication of freedom of political communication extends to all levels of government, including Local Councils (I note that Mr Tobin referred to that decision as authority for the proposition that there is "an implied constitutional right to that effect". It is perhaps preferable to refer to the relevant protection as relating to a freedom rather than conferring a right).

1. Mr Tobin submitted that, although this issue has not been determined in Australia, it is likely that the lawfulness of making political donations is protected by the implied freedom. As a means of testing that proposition, he submitted that the State could not legislate to prohibit the making of political donations, since any such legislation would be liable to be struck down as infringing upon the implied freedom. In those circumstances, Mr Tobin submitted that it would produce incoherence in the law (in the juridical sense) if forbidding the making of donations was unlawful (as infringing upon the implied freedom protected by the Constitution) but the making of them was regarded in law as being capable of causing ordinary members of the community to shun and avoid the donor.

1. In considering that submission, it is not necessary for me to determine the interesting question whether freedom of political donation is to be implied in the Constitution. The difficulty with the argument, with great respect to the learning and ingenuity of its author, is that it assumes a false dichotomy. The premise of the argument is that an allegation of conduct that is lawful is not capable of conveying a defamatory sting. That is plainly wrong, in my view. I do not think any jurisprudential incoherence results if the common law provides that an allegation of conduct that is lawful is nonetheless capable of being defamatory.

1. The gist of contextual imputation (i) is that, by making the "massive donations" referred to in the email, Mr Ell was attempting to buy the favours of State Government and Local Council. In my view, the email is capable of conveying that imputation. Mr Tobin did not suggest that the contextual imputation otherwise fails to satisfy the requirements of section 26 of the Act. It may be acknowledged that the primary focus of the email is on the compromised position of those who received the benefit of the donations rather than the motivation of Mr Ell in making them. Nonetheless, the contention in the email that the receipt of large donations by councillors gave rise to "payback obligations" on their part is plainly capable, in my view, of giving rise to an inference that the donations were made with that expectation on the part of Mr Ell. I am satisfied that a jury could properly understand the email to convey the meaning expressed in the political donations imputation.

1. The plaintiff's second complaint is that the particulars provided are incapable of proving the truth of that imputation. The only particulars provided are a list of donations made by two companies (presumably associated with the plaintiff). In my view, those particulars are plainly inadequate to prove the truth of the political donations imputation. As submitted by Mr Tobin, the sting of the imputation is directed to the motive with which Mr Ell is alleged to have made the donations in question. A bare list of donations allegedly made says nothing of the plaintiff's motive in making them.

1. Mr Tobin noted that there is nothing wrong in principle with donations being made by developers to enhance the prospects of election of candidates with a "sympathetic vision". There would need to be more than that to the conduct of Mr Ell to sustain the contextual imputation. Mr Molomby submitted that the position in the present case may be likened to the circumstances of a bar-keeper who regularly provides local police with free drinks. He submitted that the provision of the drinks would in itself be enough to found an inference that the bar-keeper was attempting to buy favours in return.

1. I do not think that is an apt analogy. People ordinarily have to pay for their drinks in a hotel, and the giving away of free drinks in itself calls for an explanation. Conversely, as explained by Mr Tobin, the making of political donations does not in itself call for an explanation but it may do so, according to the circumstances of the individual donor and the circumstances of the donations themselves.

1. Returning to the present case, it might readily be thought that there is a significant difference between a donation to the campaign of a person running for election to the State Parliament and a donation to a person running for election to a Local Council. The powers exercised by State Government and Local Councils are different. The decisions of Local Council whether to approve development applications plainly have the capacity to have a fairly immediate and direct impact on the commercial interests of the applicant developers.

1. If the political donations imputation is to be sustained, it will have to supported by detailed particulars of the facts, matters and circumstances on the basis of which it is contended that Mr Ell made the donations with the motive attributed to him in the imputation (to buy the favours of either State Government or the Local Council). The present particulars are plainly inadequate for that purpose.

1. The second contextual imputation (the electoral fraud imputation) is pleaded as a true innuendo. Leaving aside difficulties with its formulation on that basis, I do not think the imputation should be permitted to stand in its present form. The first difficulty is that it is impossible to understand precisely what it means.

1. During the course of argument, Mr Molomby tendered material referred to in the pleading of the extrinsic facts said to lend the electoral fraud meaning to the email. The material in question was the findings of a public inquiry into Tweed Shire Council and an announcement by the Minister for Local Government made on 25 May 2005, that, in light of those findings, he had dismissed the Tweed Shire Council. The imputation alleges that Mr Ell gave financial support to the councillors the subject of those findings and that decision by the Minister. However, it fails to identify whether it is alleged that he did so knowing that, by doing so, he would assist those councillors to perpetrate the electoral fraud identified.

1. As submitted by Mr Tobin, the allegation made in the contextual imputation is a serious one. The plaintiff is entitled to be informed of the conduct he is accused of with the same specificity that would be appropriate for an indictment in a criminal case: Godman v Times Publishing Co Ltd [1926] 2 KB 273 at 287; Rajski v Bainton (1990) 22 NSWLR 125 at 135 and 140. If any such imputation is to be relied upon, it will have to be recast in terms that identify with specificity the act or condition allegedly attributed to Mr Ell.

1. A separate difficulty with the imputation is the way in which it has been pleaded as a true innuendo. The imputation is alleged to arise by reason of "certain extrinsic facts known to the recipients of the matter complained of, viz, that the Tweed Directions campaign was, as found by a public inquiry pursuant to section 740 of the Local Government, and announced by the Minister for Local Government to the Parliament on 25 May 2005, an electoral fraud by which the people of Tweed were duped and deceived".

1. It is doubtful whether those allegations are either adequate or proper as particulars of extrinsic facts. A defamatory imputation is conveyed as a "true innuendo" where the matter complained of conveys a meaning not found within the four corners of the publication itself but by reason of a further fact known to the person to whom the publication is made. The principle is commonly illustrated by the example of a statement that a man was seen leaving a house at a nominated address. Such a statement is not defamatory in itself but would be defamatory to any person who knew the fact (extrinsic to the publication) that the house in question was a brothel.

1. The allegation made in the email is that Mr Ell "donated $80,000 in the 2004 election campaign to the so called Balance Team" and the further statement "the entire Council was sacked largely due to the syphoning of such developer funds through this Tweed Directions campaign".

1. The contextual imputation relied upon is that Mr Ell in fact gave his support to an electoral fraud. It is expressed as a conclusion.

1. The difficulty is that the so-called extrinsic fact relied upon in support of it is expressed in the same terms, as a conclusion. What is required is for the defendant to identify the facts known to the recipients of the matter complained of that give rise to that conclusion. The fact that those were the findings of the public inquiry and the content of the announcement by the Minister is irrelevant (except to the extent that they may assist in establishing that the extrinsic facts were known to the recipients). The critical task, which has not yet been undertaken by the defendant, is to identify the facts, matters and circumstances on the basis of which it is contended that there was electoral fraud in the 2004 Tweed Shire Council Election.

1. In any event, I do not think the imputation can stand, for the reasons already given.

Relief sought

1. The plaintiff sought orders striking out the relevant paragraphs of the defence. I am not persuaded that that is the appropriate relief at this stage. I think that the defendant should have a further opportunity to replead the contextual imputation and to provide proper particulars in accordance with these reasons.

1. Accordingly, the orders I make are:

(1) That the defendant provide proper particulars of the defence of truth pleaded in paragraph 7 of the defence.

(2) That the defendant provide proper particulars of the defence of contextual truth based on the contextual imputation pleaded in paragraph 8(a)(i) of the defence.

(3) That the contextual imputation pleaded in paragraph 8(a)(ii) be struck out with leave to replead.

1. I will hear the parties as to costs.

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Decision last updated: 30 June 2011