Zeccola v Fairfax Media Publications Pty Ltd

[2014] NSWSC 227

Supreme Court

New South Wales

Medium Neutral Citation:	Zeccola v Fairfax Media Publications Pty Ltd [2014] NSWSC 227
Hearing dates:	13 June 2013
Decision date:	13 March 2014
Before:	McCallum J
Decision:	Defendants' contextual imputations (i), (iv)(b) and (v) struck out
Catchwords:	DEFAMATION - defences - contextual truth - whether defence liable to be struck out where no additional particulars of truth relied upon beyond the repetition of those provided in support of defence of truth - whether open to plead alternative contextual imputations - capacity of matter complained of to convey "suspicion" imputation - requirement that the existence of a suspicion objectively held by some person or authority be capable of being conveyed even though there is no requirement to identify that person or authority in the imputation DEFAMATION - defences - defence of truth at common law - whether open to plead contextual imputations alternatively as Hore-Lacy meanings
Legislation Cited:	Defamation Act 1974, s 16 Defamation Act 2005, ss 25, 26 Uniform Civil Procedure Rules 2005, r 14.28
Cases Cited:	Besser v Kermode [2011] NSWCA 174; reported as Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157 David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667 Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118 Hayson v John Fairfax Publications Pty Ltd [2007] NSWCA 376 John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434 John Fairfax Publications Pty Ltd v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484 Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd, Supreme Court of New South Wales, 14 May 2010, unreported Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2012] NSWSC 1136 Ron Woodham v John Fairfax Publications Pty Ltd [2005] NSWSC 1204 (2005) Aust Torts Reports 81-822 Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669
Category:	Interlocutory applications
Parties:	Antonio Zeccola (second plaintiff) Benjamin Zeccola (third plaintiff) Fairfax Media Publications Pty Ltd (first defendant) Brian Rosen (second defendant) Michaela Boland (third defendant) Screen Hub Pty Ltd (fourth defendant) John Paxinos (fifth defendant) Alexander Prior (sixth defendant)
Representation:	Counsel: CA Evatt, R Rasmussen (plaintiffs) ATS Dawson (first to third defendants) M Richardson (fourth to sixth defendants) Solicitors: Millens Lawyers (plaintiffs) Banki Haddock Fiora (first to third defendants) Kennedys Citigroup Centre (fourth to sixth defendants)
File Number(s):	2009/297851
Publication restriction:	None

Judgment

1. HER HONOUR: These are proceedings for defamation arising out of the publication of three articles concerning the fortunes of the Australian film industry. The first two articles were published on 15 July 2009 in The Australian Financial Review in its printed edition and on the Internet. The third was published on 20 July 2009 on a film and television news website known as Screen Hub.

1. The plaintiffs are Mr Antonio Zeccola (second plaintiff) and Mr Benjamin Zeccola (third plaintiff), who are associated with the company which trades as "Palace Films". A non-trading shelf company within the same corporate group, Palace Films Pty Ltd, was also a plaintiff. However, I dismissed the proceedings brought by it: see Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd [2012] NSWSC 1136.

1. There are six defendants to the proceedings. The first, second and third defendants ("the newspaper defendants") are represented separately from the fourth, fifth and sixth defendants ("the Screen Hub defendants"). Each group of defendants has filed a defence pleading a number of positive defences including the defences of truth and contextual truth under ss 25 and 26 of the Defamation Act 2005.

1. The plaintiffs made an oral application in the defamation list to have the contextual imputations struck out, presumably under rule 14.28 of the Uniform Civil Procedure Rules 2005. This judgment determines that application. Although separate defences have been filed on behalf of each group of defendants, the defences are in substantially the same terms and raise common issues on the present application. It is convenient to consider the arguments primarily by reference to the defence filed by the newspaper defendants.

1. Four grounds of objection to the defences were argued. Each is considered in turn below.

Particulars of contextual truth

1. The first objection relates to the particulars provided in support of the defence of contextual truth. The precise complaint is that no separate particulars have been provided as to the substantial truth of the defendants' contextual imputations. As to all but one of the contextual imputations, the structure of the pleading is simply to repeat the particulars of truth in respect of the plaintiffs' imputations (pages 18 to 33 of the newspaper defendants' defence).

1. Mr Evatt, who appears with Mr Rasmussen for the plaintiffs, submitted that the contextual imputations are liable to be struck out on that basis alone. He specified that it was not contended that the particulars of truth are incapable of sustaining the plaintiffs' imputations. The application was based on the submission that it is well settled that the defence of contextual truth entails comparison of the plaintiff's imputations, not with the contextual imputations themselves but with the particulars in support of the contextual imputations. Mr Evatt submitted, in effect, that such comparison is not possible in the present case, since the defendants have given no particulars in support of the contextual imputations but "simply rely on the plaintiffs' imputations" (T7).

1. Mr Evatt relied upon the decision of the Court of Appeal in John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434. That decision was concerned with s 16 of the Defamation Act 1974, but Mr Evatt submitted that it is of equal authority in respect of the 2005 Act, suggesting that there is no significant difference between s 16 of the 1974 Act and s 26 of the 2005 Act (T7.13).

1. Whilst it probably makes no difference in the present case, the proposition that authorities concerned with s 16 of the 1974 Act are of equal authority in respect of s 26 of the 2005 Act must be approached with some caution. Mr Evatt was no doubt referring to the similar language of the relevant part of the two sections. Section 16 of the 1974 Act applied if it was established (among other things) that "by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff". The cognate requirement of s 26 of the 2005 Act is "the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations".

1. However, it does not follow from that similarity of language that there is no significant difference between the two defences. The proper construction of s 26 was considered by the Court of Appeal in Besser v Kermode [2011] NSWCA 174; reported as Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157. Following a comprehensive analysis of the context in which the section was introduced, McColl JA (with whom Beazley and Giles JJA agreed) said at [77] to [78]:

The shift from the defamatory imputation to the defamatory matter as the cause of action sets the context for understanding s 26. This is first apparent from the direction in s 26 to there being in the circumstances there provided a "defence to the publication of defamatory matter". This refers to the single cause of action constituted by the publication of such matter "even if more than one defamatory imputation about the person is carried by the matter": s 8, 2005 Act. It is language repeated, as I have earlier remarked, in each other defence under the 2005 Act. In contrast, a defence under s 16 (and s 15) of the 1974 Act went to the "imputation complained of".

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".

1. It is necessary to consider the decision in Blake in that context. In that case, the newspaper had published an article stating that Mr Blake had been found guilty of offences of assault occasioning actual bodily harm against a 12-year-old boy and possessing a prohibited weapon. In fact, by the time of publication, those convictions had been overturned. Accordingly, the newspaper could not prove the truth of imputations expressed in the present tense concerning the convictions. The newspaper sought to rely upon contextual imputations evidently based on the underlying allegations. The appeal was brought following the refusal by the defamation list judge, Levine J, to allow that course. One of the grounds on which his Honour had struck out the contextual imputations was that they were not, either alone or in combination, capable of satisfying the requirement set out above (that, by reason of the substantial truth of the contextual imputations, the plaintiff's imputations do not further injure his reputation).

1. It was in that context that Spigelman CJ expressed the view that the task to be performed under s 16 is not one of "weighing imputation against imputation". His Honour said (at [5] to [6]):

Section 16(2)(c) does not focus attention on a contextual imputation as such but on the proposition that such an imputation is a "matter of substantial truth". It is "by reason" of such "substantial truth" that a defence to an imputation pleaded by a plaintiff can be made out on the basis that the plaintiff's imputation does not "further injure the reputation of the plaintiff". For purposes of determining whether the s16 defence is capable of being made out, the Court must focus on the facts, matters and circumstances said to establish the truth of the contextual imputation, rather than on the terms of the contextual imputation itself.

Hodgson JA emphasises the use of the words "further injure" and notes that a person's reputation is injured by the publication of an imputation. I accept that s16 (1) requires that, for an imputation to be contextual, it must be "made by the same publication". However, s16 (2)(c) does not begin with words to the effect "by reason of the publication of the contextual imputation" or "by reason of the injury caused by the publication of the contextual imputation". The drafter appears to have assumed that there was such injury and then directed attention to "substantial truth" which, in my opinion, ought be taken into account in formulating the conclusion for which s16 (2)(c) calls.

1. As revealed by those remarks, Hodgson JA disagreed (at [61]). However, Rolfe A-JA agreed with the Chief Justice (at [70]) and accordingly the decision stands as binding authority on that issue.

1. As held in Kermode, a defence of contextual truth under s 26 of the 2005 Act "must defeat the whole defamatory matter (cause of action) of which the plaintiff complains, that is to say all of the plaintiff's stings". Accordingly, applying the principles stated in Blake to the defence under the 2005 Act, the task is to focus on the facts, matters and circumstances said to establish the truth of the contextual imputations (rather than on the terms of the contextual imputations themselves) to determine whether, because of the substantial truth of those matters, the plaintiff's defamatory imputations (considering all of the plaintiff's stings) do not further harm his or her reputation.

1. Mr Evatt's argument ultimately reduced to the proposition that the defence sought to be relied upon by the defendants in the present case is incapable of meeting the test in Blake because there are no discrete facts, matters or circumstances provided in support of the contextual imputations beyond those that will establish the truth of the plaintiffs' imputations (if they do) and hence no possibility that the plaintiffs' imputations do not "further injure" their reputations.

1. Mr Dawson, who appears for the newspaper defendants, disputed the correctness of that proposition. He submitted that Blake does not stand for the proposition that a defendant may not rely upon the same particulars to prove the substantial truth of the plaintiff's imputations and also to prove the substantial truth of the contextual imputations. He noted that Mr Evatt's submission implicitly assumes that the defendants' particulars of truth are not capable of establishing anything more serious than the plaintiffs' imputations. He submitted that, in the absence of any specific attack levelled at the detail of the particulars (a task which was not undertaken by Mr Evatt), I could not be satisfied in those terms.

1. I have a measure of sympathy for Mr Evatt's position. In Kermode at [37], McColl JA recorded the remarks of the Attorney General in his second reading speech that the purpose of the defence "is basically to prevent plaintiffs from taking relatively minor imputations out of their context within a substantially true publication". It has been described elsewhere (by Mr Smark SC) as a defence which forces the plaintiff to deal with the elephant in the room. A contextual truth defence structured as it is in the present case, that is, one in which the same material has been gathered to meet both the plaintiff's imputations and the contextual imputations, has the air of aspiration.

1. Unfortunately, I feel constrained by the limited way in which the argument was put to reject it. Except in one specific respect, I did not understand Mr Evatt to embrace the proposition that the contextual imputations are not "other" imputations "in addition to" the plaintiff's imputations (see T7.31-7.35 and T9.7-9.11). His argument was not directed to the terms of the contextual imputations but only to the structure of the defence in providing no particulars of contextual truth other than repeated particulars of truth.

1. Without having been taken to the detail of the particulars by Mr Evatt, a task expressly invited by Mr Dawson in his oral submissions, I do not think I can conclude that the device adopted by the defendants, as inauspicious as it may appear, of itself establishes that the defence must fail. In any event, as noted by Mr Richardson on behalf of the Screen Hub defendants, the particulars themselves do not mark the outer limits of what may be proved at trial. They indicate, "in effect, topics on which evidence may be lead": Hayson v John Fairfax Publications Pty Ltd [2007] NSWCA 376 at [20] per Hodgson JA; Tobias and Santow JJ agreeing at [23] and [24].

1. Separately, Mr Evatt did submit that contextual imputation (i) relating to the second plaintiff is virtually the same as the second plaintiff's imputation (q) (the same point is made in respect of contextual imputation (v) relating to the third plaintiff and the third plaintiff's imputation (w)).

1. The contextual imputation is that the second plaintiff permitted Palace Films to default on its payment obligations to producers of Australian films. The plaintiffs' imputation is that the second plaintiff acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films.

1. The defendants' submissions have not persuaded me that the contextual imputation is a more serious, different allegation than the combination of the plaintiffs' imputations. The defendants submitted that the sting of the contextual imputation is defaulting on payment obligations generally, whereas the plaintiffs' imputation selects the more specific and less serious sting of withholding "returns" on successful films. It was submitted that the matters complained of refer to payment obligations other than returns. There are references to a failure to meet a "distribution guarantee". Further, the first article reports the third plaintiff's denial that Palace ever failed to meet "a distribution guarantee or payment schedules". Mr Richardson noted that the third matter complained of specifically distinguishes between "reneging on distribution guarantees at different stages of production" and withholding "producers returns".

1. However, consideration must also be given to the plaintiffs' other imputations. Imputation 12(p) is:

that the second plaintiff is a hypocrite in that he purports to be the greatest supporter of Australian films while allowing Palace Films to dishonour distribution commitments by embarking upon a strategy of not returning profits to the producers of those films.

1. There is also imputation 12(r), which is:

that the second plaintiff permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so.

1. There are identical imputations for the third plaintiff.

1. As already noted, the decision in Kermode holds that the defence of contextual truth is directed to (and must defeat) all of the plaintiff's defamatory stings. I am not persuaded that there is a difference in kind between an allegation of default on payment obligations to producers of Australian films and allegations of dishonouring distribution commitments by not returning profits or dishonouring distribution commitments by not distributing films as agreed.

1. It is difficult to compare the particulars of truth relied upon in support of those several imputations due to errors and omissions in the numbering of the defence (the paragraph references in (7)(a) on page 33 appear to be wrong; the references in (52)(a) and (53)(a) on page 46 are incomplete and the copy of the defence provided to the Court is missing page 45).

1. In any event, having regard to all of the plaintiffs' imputations, I am not persuaded that contextual imputations (i) and (v) meet the requirement of s 26 that they be "other" imputations capable of arising "in addition to" the plaintiffs' imputations. The sting is, in my view, not of a different kind - it is essentially the same. It is an allegation of failure to meet obligations duly undertaken in respect of the distribution of films. Those contextual imputations must be struck out.

Alternative contextual imputations

1. Mr Evatt's second objection related to the pleading of alternative contextual imputations, as follows (paragraph 19(a)(iv) of the defence):

(a) the second plaintiff acted wrongfully in permitting Palace Films to continue to trade when it was insolvent; or, alternatively

(b) there are reasonable grounds to suspect that the second plaintiff permitted Palace Films to trade when it was insolvent.

1. Mr Evatt submitted that a defence of contextual truth should not plead contextual imputations in the alternative to each other. He submitted that to do so is against the purpose of the defence.

1. Mr Dawson noted that no authority had been cited to support that proposition. He indicated, however, that the defendants would be prepared to plead the alternatives as stand-alone imputations to solve the dispute.

1. As it turns out, an authority cited by Mr Dawson on a different point later in argument (but not handed up in court) provides an example of alternative contextual imputations passing without comment from Nicholas J in a carefully-reasoned and thorough analysis of the defence of contextual truth: see Ron Woodham v John Fairfax Publications Pty Ltd [2005] NSWSC 1204 also reported in (2005) Aust Torts Reports 81-822 (the contextual imputations are set out at [3] of the judgment).

1. Although the point was not argued in that case, the decision in Woodham suggests that there is no reason in principle why a contextual imputation of lesser seriousness cannot be pleaded as an alternative to a more serious contextual imputation. Whilst the pleading of alternative contextual imputations may be undesirable for the complexity they bring to an already complex defence, I do not think there is any principled basis for prohibiting that approach.

Capacity

1. Mr Evatt's third objection to the contextual truth defence was that neither of the alternative contextual imputations set out above is capable of being conveyed.

1. The first alternative is that the second plaintiff acted wrongfully in permitting Palace Films to continue to trade when it was insolvent. Mr Evatt acknowledged that, prior to the dismissal of the proceedings at the suit of the first plaintiff, I ruled (in favour of Palace Films Pty Ltd) that the imputation "that [Palace] is insolvent" was capable of arising: Palace Films Pty Ltd v Fairfax Media Publications Pty Ltd, Supreme Court of New South Wales, 14 May 2010, unreported (at [60]).

1. However, Mr Evatt submitted that the articles do not have "the extra link necessary to sheet home insolvency to the second and third plaintiffs". There is a degree of tension between that submission and the plaintiffs' reliance upon imputations (q) and (r) set out above. Imputation (q) is that the second plaintiff acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films. Imputation (r) is that the second plaintiff permits Palace Films to dishonour distribution commitments by not distributing a film despite having agreed to do so. Each of those imputations assumes that the first matter complained of attributes the governance of Palace Films to the second and third plaintiffs. The matters complained of are replete with references to that effect.

1. The defendants further noted that, so far as the second plaintiff is concerned, his case is put on the basis that, although he is not named, the matter complained of was published to persons who knew he was a director of Palace Enterprises Pty Ltd, the entity which trades as Palace Films and Palace Cinemas. It was submitted that, to the extent that that is established, it could hardly be said that the matter complained of is not capable of conveying the imputations that attribute control of that entity to him.

1. For those reasons, I am satisfied that the first alternative imputation is capable of being conveyed by the matter complained of in each case.

1. The alternative imputation is that there are reasonable grounds to suspect that the second plaintiff permitted Palace Films to trade when it was insolvent. Mr Evatt submitted that there is nothing in the matter complained of to suggest that any person held the suspicion referred to.

1. Mr Dawson acknowledged that the articles do not speak in terms of any suspicion held by any individual person or authority. He conceded that the imputation was put on the basis that the primary imputation might be carried only weakly, in effect as something only to be suspected rather than confidently inferred. Mr Dawson indicated that it was for that reason that the two imputations were pleaded as alternatives. He submitted that there is no requirement that a "suspicion" imputation identify the person holding the relevant suspicion.

1. That submission, as far as it goes, finds ample support in authority. As noted by Mr Dawson, there is a helpful discussion of the relevant principles in the decision of Kirby J in Purcell v Cruising Yacht Club of Australia [2003] NSWSC 245. His Honour said (at [28] to [29]):

A plaintiff, in framing an imputation, or a defendant in framing a contextual imputation, may, according to the defendants, formulate the imputation in one of two ways. Either the suspicion must be attributed to an authority figure, such as the police, or the imputation (as here) must be framed in terms of "reasonable grounds to suspect", or the plaintiff having acted in such a way as to warrant suspicion. To say that the police "suspect" a person of murder is defamatory. It is also defamatory to say that there are reasonable grounds for suspecting that person committed murder.

I accept the defendants' argument. That, however, is not the end of the matter. The issue must ultimately be determined by reference to the words published. In the context of those words, is the defendants' contextual imputation conveyed? In that context, is there a need to identify the person who held the suspicion? It is suggested that different issues arise, depending upon the level of detail provided by the publication. If the publication, to use the defendants' example, simply makes a bold allegation that there are reasonable grounds for suspecting a particular person of murder, then the imputation (without identifying the person who had the suspicion) would be carried. If, however, the publication provided an explanation for the suspicion, and it plainly depended upon matters of expertise, then the position, it was suggested, may be different. The message to the ordinary reasonable listener, in those circumstances, would be that there were reasonable grounds in the minds of experts to suspect that a particular person had committed the crime of murder.

1. However, what emerges from Purcell is that the issue arose in the context of an article dealing with the official treatment of an identified allegation of misconduct. Kirby J's analysis assumed that the matter complained of reported the existence of a suspicion. His Honour's point was that the imputation did not have to name or identify who held that suspicion, so long as it was evidently held reasonably. That is why this issue has generally arisen in the context of articles dealing with matters such as the fact of a person having been arrested and charged with an offence; the findings of a Royal Commission (cf Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669); the reference of a complaint to the protest committee of a club (Purcell) or the reference of a matter to ICAC (cf Greig v WIN Television NSW Pty Ltd [2007] NSWSC 1118).

1. It does not follow from those authorities that every article that is capable of conveying an imputation of guilt is also capable of conveying an imputation of reasonably-held suspicion. Nor do those authorities hold that it is enough if the matter complained of excites suspicion in the mind of the ordinary reasonable reader. In my view, the defendants' alternative imputation in the present case conflates two concepts. It conflates the sting of the imputation and the force with which it is conveyed. The defamatory sting that a person is reasonably suspected of something must have its foundation in something to that effect stated or conveyed by inference in the matter complained of.

1. If an article reports the fact that a complaint or allegation has been referred to an authority, an imputation may be conveyed that the person is reasonably suspected of certain conduct, whether or not the holder of the suspicion is named. But if an article merely hints at a particular meaning, the territory for dispute is whether it in fact conveys that meaning. The weakness with which a particular meaning is conveyed cannot be overcome by watering down the defamatory sting from saying the plaintiff behaved in a certain way to saying only that he was suspected of having behaved in that way.

1. I do not think there is anything in the matters complained of in the present case to point to the objective existence of any suspicion, complaint or allegation that the plaintiffs behaved in a certain way. The articles either say that the plaintiffs acted wrongfully in permitting Palace Films to continue to trade when it was insolvent or they do not. I do not think the articles are about the existence of a reasonably held suspicion.

1. For those reasons, I have concluded that the alternative contextual imputation is incapable of being conveyed and must be struck out.

Hore-Lacy pleading

1. Mr Evatt's final objection related to the pleading under the heading "Hore-Lacy" (a reference to the principles stated in David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667). Mr Evatt noted the emergence of an argument that the so-called Hore-Lacy defence is not a substantive defence at all and should, where pleaded, be struck out (at least in this State). However, Mr Evatt did not seek to press that point in argument before me, evidently taking the view that it is foreclosed by the decisions of the Court of Appeal in Kermode and in John Fairfax Publications Pty Ltd v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484.

1. Mr Evatt's objection to the Hore-Lacy pleading in the present case was more specific. The defence states (at paragraph 20):

In further and alternative answer to paragraphs 11 and 12 of the statement of claim, if it is found that any of the first contextual imputations do not differ in substance from the plaintiff's first imputations, the first, second and third defendants say as follows:

(a) they will rely on that contextual imputation as being the meaning of the first matter complained of and as the meaning by which it was understood: and

(b) that meaning was substantially true.

1. Mr Evatt submitted that, if the defence does exist, the pleading set out above is not the way to plead it. He advocated, as the proper form of pleading, a defence taken from other proceedings (for which he gave credit to Mr Sibtain of counsel) as follows:

The matter complained of was true in substance and in fact in the following meaning [meaning specified], which is not different in substance from [the plaintiff's imputations].

1. Mr Dawson explained that the object of his pleading was, in effect, to cover all bases. One of the requirements of a contextual imputation is that it must differ in substance from the plaintiff's imputations. Mr Dawson wishes to ensure that, in the event that his contextual imputations do not meet that requirement, it will be open to the defendants to rely upon the same imputations as Hore-Lacy meanings rather than contextual imputations (and that there will be no complaint of surprise in that event).

1. Mr Dawson submitted that his approach finds support in the decision of Nicholas J in Ron Woodham v John Fairfax Publications Pty Ltd referred to above. Without taking me to the decision during argument, Mr Dawson submitted that it stands as authority for the proposition that, if a contextual imputation differs in substance from the plaintiff's imputations, it can be relied upon as a contextual imputation and that, if it does not differ in substance from the plaintiff's imputations, it can be relied upon as a Hore-Lacy meaning (T42). Mr Evatt responded, with equal confidence, that the decision "doesn't help my friend".

1. It is true that the judgment in Woodham does not state, in terms, the principle articulated by Mr Dawson but the result Nicholas J allowed assumed its correctness. That conclusion was reached in circumstances where his Honour had already made a finding that the defendant's imputation did not meet the requirements of a contextual imputation, and that has not occurred in the present case. His Honour said (at [63]):

I have found that (D) [a contextual imputation] does not differ in substance from 4(f) [one of the plaintiff's imputations]. Therefore, in my opinion, it is available to the defendant for the purpose of the remaining interstate defences.

1. Mr Evatt noted that Mr Dawson had not explained in the present case how the imputation that the second plaintiff acted wrongly in causing a company to trade whilst insolvent is a mere nuance to any of the plaintiffs' imputations. There is some force in that point but it only addresses the most extreme example (the contextual imputation that differs most from the plaintiffs'). Mr Evatt did not submit that the other contextual imputations plainly differ in substance from the plaintiffs' imputations. Indeed, as explained above, he has been successful in submitting that one of the contextual imputations carries no different sting from the plaintiffs' imputations.

1. I acknowledge that it seems unlikely that the comprehensive and cautious approach reflected in Mr Dawson's pleading will ultimately be of any great assistance to the defendants, but I cannot be sure. Acknowledging the approach taken by Nicholas J in Woodham, I do not think a basis has been established for striking out that part of the defence. It has always been permissible to plead inconsistent defences in the alternative.

1. As hinted by Mr Evatt, however, the alternatives are not to be left to the jury. It will be necessary for a ruling to be given at the trial (or else an election made) as to whether each of the defendants' imputations can properly be left as a contextual imputation and, if not, whether it can be left as a Hore-Lacy meaning. The pleading nonetheless serves as notice to the plaintiffs of the two ways in which the imputations will potentially be relied upon.

1. I note that the proceedings are already listed on 7 April 2014 in the Defamation List. I will hear the parties as to costs on that occasion.

1. The orders are:

(1)   that contextual imputations 19(a)(i), (iv)(b) and (v); 27(a)(i), (iv)(b) and (v) and 35(a)(i), (iv)(b) and (v) in the defence filed by the first, second and third defendants be struck out.

(2)   that contextual imputations 9(a)(i), (iv)(b) and (v) in the defence filed by the fourth, fifth and sixth defendants be struck out.

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Decision last updated: 13 March 2014