The Defence of Contextual Truth and Hore Lacy: Struggling but Still Standing

Table of Contents

1. Introductory ...... 2 2. Challenges to Contextual Imputations on the basis that they do not arise “in addition” to the Plaintiff’s Imputations ...... 3 2.1. Legal Principles ...... 3 2.2. Recent Applications ...... 7 2.3. The Appropriate Timing of an “in addition” Application ...... 10 2.4. Challenges to the Orthodoxy ...... 12 2.5. The importance of the Defence of Contextual Truth and its Proper Application ...... 14 3. Challenges to the Form of Contextual Imputations ...... 15 4. The Decision in Kermode and a Defendant’s Inability to Plead Back the Plaintiff’s Imputations as Contextual Imputations...... 17 5. The Pleading Back of Alternative Plaintiff’s Imputations as Contextual Imputations ...... 19 6. The Appropriation by a Plaintiff of Contextual Imputations ...... 22 7. Pre-Trial Challenges to the Particulars of Contextual Truth including Challenges to the Capacity of Contextual Imputations to Swamp Plaintiff’s Imputations...... 25 8. The Application of the Defence of Contextual Truth at Trial ...... 25 9. The Hore Lacy Defence and its Compatibility with NSW Practice and Procedure ...... 27 9.1. The decision in Bateman v John Fairfax Publications ...... 27 9.2. The decision in Setka v Abbott ...... 29 10. Conclusion ...... 31 Schedule Recording Pre-Trial Challenges 2013-2014 to Contextual Imputations in SCNSW ...... 33

1 1. Introductory

[1] The defence of contextual truth, never exactly a solid port in a storm for a defamation defendant, is fraying. A large proportion of pre-trial challenges to contextual imputations are succeeding, most commonly because of a failure to adhere to the requirements of s 26 but also for reasons of form and capacity. Even when a contextual imputation does survive, it can then be appropriated by a plaintiff.

1 [2] Following the decision in Kermode which removed the right of a defendant to plead back one or more of a plaintiff’s own imputations as a contextual, the practical importance for a defendant of pleading and justifying a contextual imputation has increased – otherwise, even if some but not all of the plaintiff’s imputations can be justified (unless it be a rare case where comment or qualified privilege is available), there will be no defence. It is indeed possible, although probably unwise, for a plaintiff to deliberately plead a false imputation, in an endeavour to “cover the field” and thereby eliminate the possibility of a defence of contextual truth.

2 [3] In a parallel universe, the common law defence of Hore Lacy , scarcely consistent with the defence of contextual truth, survives and prospers in the jurisdictions outside of NSW. The NSW defamation list judge recently found the defence to be inconsistent with NSW pleading practice (which with respect it clearly is), and shortly thereafter the Victorian Court of Appeal unsurprisingly disagreed, adding some unflattering observations about rules and practice north of the border. There is an issue as to whether procedural dissimilarities in the conduct of defamation trials should or will give way to the principle of uniformity, nearly a decade after the introduction of the uniform legislation.

[4] This paper will examine recent developments in the law on the s 26 Defence including strike outs for a failure to arise “in addition”, form challenges, the appropriate timing of “in addition” challenges, the pleading of alternate imputations as contextuals, and the appropriation of contextuals. It will also deal with recent developments on the rule established in Kermode,3 as well as

1 Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852. 2 David Syme & Co Ltd v Hore Lacy [2000] VSCA 24 (2000) 1 VR 667 at esp. [52]-[53] and [69]. 3 Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852.

2 the application of s 26 in a trial context before briefly discussing the recent Hore Lacy controversy.

2. Challenges to Contextual Imputations on the basis that they do not arise “in addition” to the Plaintiff’s Imputations

2.1. Legal Principles

[5] Sections 25 and 26 of the Defamation Act 2005 (NSW) (“2005 Act”) are in the following terms: 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.

4 [6] The starting point is John Fairfax Publications Pty Ltd v Jones where Spigelman CJ and Ipp J held that under the 2005 Act a contextual imputation that merely reformulated a plaintiff’s imputation at a higher level of generality was impermissible.

4 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 at [17]-[20] and [106]-[113].

3 [7] In 2010 the issue resurfaced in Ange v Fairfax Media Publications Pty Ltd & Ors,5 a decision of Simpson J. Her Honour rejected a challenge to a contextual imputation – “the Plaintiff is a pornographer” on the basis that the plaintiff had not pleaded an imputation associating him with pornography. Her Honour, with respect, was completely alive to what was at stake:

[67] The association with pornography mentioned is confined – to the ownership of more than 20 “adult shops”, and to having been fined in Queensland for the sale of banned items. Had the plaintiff pleaded an imputation asserting an association with pornography, he no doubt would have done so in narrow terms, confining himself to what was contained in the article, and thus restricting the area of discreditable conduct available to be explored by a defence of justification; but it is for that practical, pragmatic reason that he would so confine himself. There is nothing in law that would have prevented him from pleading an imputation that he is a pornographer.

[68] Equally, there is nothing that prevents the defendants doing the same thing, by way of pleading a contextual imputation.

[69] By pleading contextual imputation (i), and particularising it as it has, the defendants seeks to give the broadest possible scope to what they originally published, in order to expand, correspondingly, the scope of the inquiry into the plaintiff’s conduct. They seek to prove that the plaintiff engaged in discreditable conduct well outside the confines of what it published. By pleading imputations of the most general kind, a defendant may – to use a somewhat loaded term – manipulate the proceedings to enable it to adduce evidence of misconduct going well outside anything alleged in the matter complained of.

[70] The question is whether the defendants are permitted to do so. It was not submitted that there exists any discretionary basis upon which the defendants could be prevented from doing what they

5 Ange v Fairfax Media Publications Pty Ltd & Ors [2010] NSWSC 645.

4 seek to do. I am not aware of any such discretion. Provided that an imputation is capable of being conveyed by the matter complained of, a judge has no supervisory role in its formulation (other than as to form).

[71] A claim in defamation is directed to the damage done to a plaintiff’s reputation by the publication of what is published by the defendant. A contextual truth defence is equally directed to what is published by the defendant. Subject to the manner in which the plaintiff pleads his/her case, a defamation claim does not ordinarily open up a full-scale inquiry into the plaintiff’s character or conduct.

[72] If the fairness of allowing contextual imputations so framed to be pleaded (and proved) were an issue, the outcome of this application may have been different. But no power to direct the manner of pleading by reference to fairness was identified and I know of no relevant power.

[8] The following year, in an application brought by the same plaintiff against the same defendant but in separate proceedings involving another article, the Court arrived at a different result. See Ange v Fairfax Media Publications6 drawing in part on the decision of McColl JA in John Fairfax Publications Pty Limited v Hitchcock.7 His Honour struck out four of the five contextual imputations including “the Plaintiff is a pornographer.”8 The Court, following Jones, 9 held that an imputation pleaded as an alternative or a more general formulation of the very imputation relied upon by the plaintiff will not suffice. A difference in formulation is not enough. Rather, the inquiry involves an evaluation process which is:

[28]…one of impression taking into account the defamatory quality of each party's imputations with regard to the contents of the matter complained of which conveys them. In order to consider whether the defendants' contextual imputations are capable of being

6 Ibid at [24]-[28]. 7 John Fairfax Publications Pty Limited v Hitchcock (2007) 70 NSWLR 484 at [212]. 8 Unlike in the previous Ange case, this time the Plaintiff had pleaded an imputation “the Plaintiff is a pornographer in that he own the adult shops Pleasure Chest and Adult Shop which sell pornographic material.” The Plaintiff could thus say that he had covered off this topic. 9 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 at [17]-[20].

5 conveyed by the matter complained of at the same time as and in addition to the imputations pleaded by the plaintiff it is necessary to establish "... just what is the precise act or condition which is asserted of or attributed to the plaintiff both by the plaintiff's own imputations and by the defendants' contextual imputations" (Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36, p 41E). The scope of an imputation must be taken to include all imputations which do not differ in substance, or are less injurious, or which are but shades, nuances, and gradations of meaning of substantially similar imputations (Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749, p 771, Chakravati v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519 pp 24, 60, 139.) Where the plaintiff's imputations are more than one it will be necessary to consider all of them, separately and in combination, to determine whether a contextual imputation is carried in addition to them. The exercise requires a commonsense approach to an understanding of the publication which is expected of the ordinary reasonable reader.10

[9] A subsequent decision of McCallum J emphasises the core purpose of the defence must be borne in mind – that is, to enable a defendant to justify a meaning upon which the Plaintiff has chosen not to rely.11 Is there, to adopt her Honour’s words, an elephant in the room?

[10] Other indications include the following:

a. If the condition contained in a contextual imputation is necessarily implicit in the act identified in the plaintiff’s imputation then the contextual imputation will not arise “in addition”.12

10 Ange v Fairfax Media Publications [2011] NSWSC 204 [28]. 11 Hyndes v Nationwide News Pty Limited (2011) NSWSC 633 at [28]. See also Ell v Milne (No 5) [2013] NSWSC 246 at [29]-[31] where the Court observed “a rare illustration of the use of the defence in the circumstances intended by Parliament, that is, where the plaintiff has sued on one defamatory sting and chosen not to sue on another”. The contextual imputation involved buying favours from government by making political donations, whereas all of the Plaintiffs imputations pertained to the murder of Michael McGurk or matters of violence. 12 Ibid at [34].

6 b. An examination of what the defendant would need to prove by way of justification might also be a useful task for determining whether the contextual imputations differ in substance from the plaintiff’s imputations.13

[11] Generally, interstate jurisdictions appear to have endorsed the NSW jurisprudence on this issue.14

2.2. Recent Applications

[12] The attached schedule gives an overview of the recent decisions dealing with this ground for challenge as well as capacity and form.

[13] Some examples of the many successful challenges:

a. In Jones v TCN Channel Nine15 the Court struck out a contextual imputation “the Plaintiff is a conman.” The Plaintiff had pleaded a number of more specific allegations including “The Plaintiff is a conman in that he scams vulnerable and innocent customers of his electrician business NRE Electrics out of their money”. Even if the general imputation was capable of arising and accepting it differed in substance from the specific, the Court found it could not arise in addition.

b. In Bateman v John Fairfax (No 3), 16 the Court struck out a contextual imputation “the Plaintiff runs his Primary Health Care business without sufficient concern for the wellbeing of those who work in it”. The relevant Plaintiff’s imputations included a number of examples of poor treatment of staff such as harassment, running sweatshops, being a cruel employer, and bringing unwanted Court proceedings to force doctors to work longer hours.17

13 John Fairfax Publications Pty Ltd v Hitchcock (2007) NSWCA 364 at [188]. 14 Ives v the State of Western Australia (No 8) [2013] WASC 277 at [84]-[91], Newnham v Davis (No 2) [2010] VSC 94, Mizikovsky v Queensland Television Ltd & Ors (No 3) [2011] QSC 375 at [49]-[52]. 15 Jones v TCN Channel Nine [2014] NSWSC 1453 at [8]-[20]. 16 Bateman v John Fairfax (No 3) [2014] NSWSC 1601 at [45]-[48]. 17 Ibid at [37] and [44].

7 c. In Tauaifaga v TCN Channel Nine Pty Ltd18, the Court struck out contextual imputations that “The Plaintiff was an accessory to the theft of a plasma television” and “That the Plaintiff undertook criminal activity in the presence of her young son.” The Court held these imputations did not arise in addition to an imputation that the “Plaintiff is a shoplifter”. The Court, in a strict application of the authority in Jones19 and Ange,20 held the contextuals were “mere alternatives” of the Plaintiff’s imputation. Further, that so far as the ordinary reasonable viewer was concerned, all the imputations were simply different formulations of the same thing, namely that the Plaintiff was criminally responsible for the theft of a television.

d. In Trodden v Fairfax Media Publications Pty Ltd21 the Court struck out a contextual imputation which included the phrase “took steps to prevent members of Balmain Leagues Club from having a reasonable opportunity to consider the content of a call option”. The only difference to the Plaintiff’s imputation was that instead it contained the words “took steps to conceal the content of a call option.” Her Honour noted the subtle difference and after referring to authorities dealing with the purpose of the Defence, noted it was not “intended to allow a defendant to defeat a claim by merely tinkering with the imputations upon which a plaintiff has chosen to rely.”22 Her Honour struck out the contextual imputation, for both or either of its not arising in addition or not being capable of being a contextual imputation within the meaning of s 26(a).

[14] In terms of contextual imputations that have survived an “in addition” type challenge, it is not uncommon in this situation for the Court to have perhaps taken a view about a plaintiff attempting to quarantine some aspect of his or her criminal history, or an aspect of adverse findings by a public body:

18 Tauaifaga v TCN Channel Nine Pty Ltd [2013] NSWSC 8. 19 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205. 20 Ange v Fairfax Media Publications [2011] NSWSC 204. 21 Trodden v Fairfax Media Publications Pty Ltd [2013] NSWSC 1148 22 Ibid at [16].

8 a. In Walsh v Win NBN Television Pty Limited23 the Plaintiff had pleaded imputations that he “was arrested by the police”, “charged with various drug offences” and was “reasonably suspected by the police of committing criminal offences.” In other words the Plaintiff had carefully excised any imputation opening up any actual conduct by him. The Court rejected a challenge to various contextual imputations including “the Plaintiff had so acted as to warrant being arrested by the police.”

b. In Liu v Fairfax Media Publications 24 the Court rejected a challenge to the contextual imputation “there were reasonable grounds to suspect that the Plaintiff acted illegally as manager of an investment fund”. The relevant Plaintiff’s imputation was “The Plaintiff behaved in such a way as to warrant ASIC filing charges against him in the Equities Division of the NSW Supreme Court in October 2009.” The Court held that the imputations not only differed in substance, but that the contextual imputation was not a mere reformulation. The Plaintiff had “selectively focused on the part of the matter complained of which reports, in terms which lend themselves to an argument of legal inaccuracy.”25 The contextual imputation also relied upon other parts of the matter complained of, and had the Plaintiff wished, he too could have pleaded an imputation relying on those parts.

c. In MacDonald v Australian Broadcasting Corporation,26 the matter complained of concerned findings by the ICAC and in particular contained the following words:

Former Labor ministers Eddie Obeid and Ian McDonald made millions over mining deals in NSW. They were found to be corrupt and now face possible criminal charges.”

23 Walsh v Win NBN Television Pty Limited (unreported, NSWSC, Nicholas J, 7 May 2012). 24 Liu v Fairfax Media Publications [2013] NSWSC 7 25 Ibid at [30]. 26 MacDonald v Australian Broadcasting Corporation [2014] NSWSC 1472.

9 The publisher had an apparent difficulty on justification with the “made millions” component but obviously had available to it a wealth of material concerning the ICAC’s exposure of the Plaintiff’s corrupt conduct.

The Plaintiff relevantly pleaded this imputation: “The ICAC has found that the Plaintiff had made millions of dollars from corrupt mining deals in NSW”. The Defendant pleaded contextual imputations “the Plaintiff was found by ICAC to be dishonest” and “the Plaintiff was found by ICAC to have abused his position as a government minister.” The Plaintiff’s challenge to the contextual imputations failed, the Court emphasizing other portions of the matter complained of apart from the “made millions” component and finding that the contextual imputations imputed “something of a different character to the Plaintiff from the notion of ‘making millions’ from corrupt deals captured in the Plaintiff’s imputations”.27

2.3. The Appropriate Timing of an “in addition” Application

[15] A contest arises as to the appropriate timing of this application. Should the point be taken pre-trial? Or is the appropriate time the moment the jury answers the Questions concerning whether a plaintiff’s imputations are conveyed and defamatory? It is only at this later point that the Court and the parties may identify with certainty, the imputations actually faced by a defendant.

[16] Plaintiffs want the issue settled pre-trial – in that way, any redundant particulars of truth (often trawling beyond the subject matter of an article) can be excised and, from a commercial perspective, the defendant is forced to confront any mediation or settlement discussions without the (very probably unwarranted) confidence inspired by a Defence of contextual truth. Defendants want to wait – their chances of holding on to their contextual can only increase if the jury knocks out one or more of the plaintiff’s imputations, if for no other reason than there may then be less surviving material against which the “in addition” question will be

27 Ibid at [14].

10 applied. Furthermore, they can hold on to their Defence and particulars of justification until trial – forcing a Plaintiff to run the gauntlet.

28 [17] In Jones v TCN Channel Nine, the Court decided against deferring the decision on the “in addition” question until the trial. The Court considered the theoretical possibility of the jury rejecting the relevant Plaintiff’s imputation while finding the contextual imputation conveyed; such an outcome was assessed as “very unlikely”. That, together with considerations of fairness (including in this case the expansion of the issues by interlocutory processes such as subpoenas and discovery likely to flow from the retention of a contextual imputation framed in general terms) led the Court to determine the issue pre-trial.

29 [18] In Bateman v John Fairfax (No 3), the Court would have permitted the deferral of the determination of whether one of the contextual imputations arose in addition to the Plaintiff’s imputations (but not for other contextuals), until after the jury’s verdict. In the event that particular contextual imputation failed on other grounds.

[19] Two complicating factors on this point:

a. The writer is not aware of any recent attempt to take a jury’s verdict on the imputations and then adjourn for argument as to whether the contextual imputations arose in addition to the surviving plaintiff’s imputations.30 If the jury was only to be asked whether the plaintiff’s imputations were conveyed and defamatory before such an adjournment and argument, that would begin to look awfully like a trial under Section 7A of the old Defamation Act 1974 (NSW) (“1974 Act”). Another option would be have the jury deal with justification as well before any such adjournment.

28 Jones v TCN Channel Nine [2014] NSWSC 1453 at [32]-[37]. 29 Bateman v John Fairfax (No 3) [2014] NSWSC 1601 at [55]-[58]. 30 In McMahon v John Fairfax Publications (No 6) at [4]-[6] and [49]-[78], McCallum J outlines a bifurcation of the jury’s task which did mean that the jury dealt with contextual truth separately and after dealing with the earlier issues. The “in addition” point does not seem to have been raised at this time, although there had been pre-trial determinations on this issue – see McMahon v John Fairfax Publications (No 3) [2012] NSWSC 196 at [61]-[65]. There was instead argument on the proper directions to be given to the jury about the defence of contextual truth. The Plaintiff pursued a cause of action in injurious falsehood meaning some degree of unusual complication in the questions required for the jury.

11 However, assuming a defendant failed to justify, that would mean there would be two addresses, one on justification and another on contextual justification. It would also mean that the jury would not be told of the contextual imputations until very late in the piece. That is to say, that while it would certainly possible to conduct a trial in this fashion, it does not seem a particularly convenient course.

b. Perhaps the most compelling reason for deferring the determination of whether a contextual imputation arises “in addition” to a plaintiff’s imputations is when the plaintiff’s imputation is frankly a stretch and where common sense would suggest the jury is more, or at least as likely, to find the contextual imputation arises. Unfortunately, a Court considering this factor would need to make an assessment about the probability of various results to be reached by a jury. That is no doubt possible, but seems rather contrary to the philosophy underpinning the determination of capacity arguments – namely the sacred entitlement of a jury to have its say on whether any reasonably arguable imputation arises and is defamatory.

2.4. Challenges to the Orthodoxy

31 [20] In Crosby v Kelly, Rares J in the Federal Court held that that the authority of John Fairfax Publications Pty Ltd v Jones32 did not apply to s 26 of the Defamation Act 2005 and further that there was no requirement under s 26 for a contextual imputation beyond the need to differ in substance. His Honour accordingly allowed a general contextual imputation “the Plaintiff is a hypocrite”, to stand next to a very specific imputation concerning the misleading nature of push polling.33

34 [21] In Bateman v Fairfax Media Publications Pty Ltd (No 3), the Plaintiff unsuccessfully challenged the traditional interpretation of John Fairfax

31 Crosby v Kelly [2013] FCA 1343. 32 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205. 33 Crosby v Kelly [2013] FCA 1343 at [3] and [22]-[29]. 34 Bateman v Fairfax Media Publications Pty Ltd (No 3 [2014] NSWSC 1601.

12 Publications Pty Ltd v Jones, 35 arguing that there was no additional requirement for a contextual imputation beyond the need for it to differ in substance from a Plaintiff’s imputation, and alternatively that if this was wrong, there was no warrant for construing the findings in Jones36 (a decision that dealt with s 16 of the 1974 Act) as applying to the interpretation of s 26 of the 2005 Act. The Plaintiff, relying on the decision in Crosby,37 also argued that the two Ange decisions38 were in error insofar as they adopted Jones on this point. The Court at [8]-[35] in what is with respect, a well-reasoned decision, analysed the history of the jurisprudence and rejected the Plaintiff’s challenge, emphasising above all the purpose of the defence – which is to stop a plaintiff avoiding serious stings in defamatory matter by selective pleading.

[22] The Court of Appeal is presently reserved on an appeal against a decision to strike out a contextual imputation as not arising “in addition” to a plaintiff’s imputations. In Zeccola v Fairfax Media Publications Pty Ltd [2014] NSWSC 227 at [20]-[28], McCallum J struck out the contextual imputation that “the Plaintiff permitted Palace Films to default on its payment obligations to producers of Australian films”. The relevant Plaintiff’s imputation was “The Plaintiff acted wrongfully in permitting Palace Films to withhold returns due to producers of successful films”.

[23] Apart from emphasising the qualitative difference between the two imputations, the Defendant’s appeal papers raise arguments along the following lines:

a. The inapplicability of John Fairfax Publications Pty Ltd v Jones39 to s 26 and the 2005 Act;

b. The inappropriateness of the Court striking out contextual imputations for not arising “in addition” prior to the trial. In particular the inappropriateness in considering whether to strike

35 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205. 36 Ibid. 37 Crosby v Kelly [2013] FCA 1343. 38 Ange v Fairfax Media Publications Pty Ltd & Ors [2010] NSWSC 645 and Ange v Fairfax Media Publications Pty Ltd & Ors [2011] NSWSC 204 39 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205.

13 out a single contextual imputation (divorced from the other contextuals) given the language of s 26;

[24] On this issue the Plaintiff’s response relied on the terms of her Honour’s judgment. The Appeal was heard on 11 November 2014 and judgment is reserved.

2.5. The importance of the Defence of Contextual Truth and its Proper Application

[25] Finally, it is worth referring to an important decision in which the “in addition” or “another imputation” requirement seems to have been accorded a reduced importance.

40 [26] In NSW v Deren, a Plaintiff had pleaded two imputations alleging his participation in sexual assaults. Each of his imputations was tied to “a Sydney Kindergarten.” The Defendant had pleaded a contextual imputation “the Plaintiff is a child molester.” It is plain from the judgment that the Defendants had no evidence as to the assaults at the Sydney Kindergarten but they alleged other specific sexual assaults against children and also relied upon a televised admission by the Plaintiff of a “need to touch young girls in their private parts.”

[27] The trial judge held that the contextual imputation was incapable of arising at the same time and in addition to the Plaintiff’s imputations. The Court of Appeal reversed the decision:

[85] In the appeal, it was argued for the second plaintiff that the publication complained of was not capable of being understood as making the contextual imputation (i). In my opinion it is so capable. It seems to me that the words of the publication are quite capable of bringing to the mind of the reasonable reader two ideas, one being that the first plaintiff had committed five indecent assaults on very young children from a Sydney kindergarten in the last ten months and the other that such a man must be a habitual molester of children. Of course, the two ideas have much in common but

40 New South Wales v Deren & Anor [1999] NSWCA 22.

14 they nevertheless seem to me to be distinct ideas generated by the same matter.

[28] The decision, with respect, is a sensible and fair application of the defence. An ordinary reader reading that a man is alleged to have molested five children in a Sydney kindergarten might have conveyed to him both the meaning about the kindergarten, and a more general meaning about a predilection for molesting children.

[29] However, the decision does not sit easily with some of the decisions discussed above including John Fairfax v Jones41. Accepting the uniquely serious subject matter of the decision in Deren42, and distinct community views about the probability of recidivism amongst paedophiles, there remains an issue as to why other forms of allegations of multiple offences are somehow less likely to give rise to an independent general meaning. If a broadcaster is alleged to have told a number of lies why would a viewer or reader not have conveyed to them a general meaning of dishonesty on top of the individual lies? If a man is the “largest distributor of adult pornography on the east coast” and owns two adult shops why would a reader not have conveyed to them a general meaning that he is a pornographer? If a business person is accused of ripping off a half dozen clients in separate transactions then why cannot such a matter convey a general meaning that he is a conman?

3. Challenges to the Form of Contextual Imputations

43 [30] Concepts of precision in the pleading of a plaintiff’s imputations apply equally to the pleading of contextual imputations.44

[31] An issue arises as to the extent, if any, as to which considerations of fairness and/or practical justice should impact upon a Court’s determination of whether a contextual imputation, particularly if it is general in nature, ought to be struck

41 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205. 42 New South Wales v Deren & Anor [1999] NSWCA 22 . 43 See for instance Drummoyne v Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137-138 per Gleeson CJ; at 155F per Priestley JA. 44 Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 90 at [32]-[34] and [42]-[43].

15 out as imprecise. In Ange v Fairfax Media Publications Pty Ltd,45 Simpson J had observed in the context of her discussion of the principles in Jones46 affecting the pleading of general contextual imputations, that the fairness of permitting a defendant to plead in this way was not a relevant consideration.

[32] Earlier in a different context, the Court of Appeal had considered that when examining a challenge to the precision of a contextual imputation, issues of fairness or practical justice did arise:

[31] But in my opinion, the question of whether the contextual imputation is sufficiently precise and specific raises considerations of “practical justice” as indicated by Drummoyne; and in this regard, it is relevant to consider to what extent this contextual imputation is based on material that supports it, otherwise than through the respondent’s imputations and the appellants’ other contextual imputations. If it is not supported otherwise than by inference from these other imputations, which the appellants can address directly, it could well be unjust to allow the appellants to defend on the basis of this contextual imputation by ranging widely over alleged discreditable conduct of the respondent having nothing to do with matters raised by the broadcast.47

[33] The Court of Appeal, relying in part on considerations of practical justice, then upheld a decision to strike out as imprecise a contextual imputation “The Plaintiff is not a fit and proper person to supervise other scientists”. The Court observed that a “huge range of conduct” could be marshalled in support of a truth defence to such an imputation, and that even if the particulars of truth presently relied upon were confined to the broadcast, the possibility of an amendment with particulars delving into fresh matters remained.48

49 [34] In King v Fairfax Media Publications (No 2) (“King”) the Plaintiff challenged all seven contextual imputations pleaded by the Defendant on the basis of imprecision. The Court upheld the challenge and struck out each of the

45 Ange v Fairfax Media Publications Pty Ltd [2010] NSWSC 645 at [72]. 46 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205. 47 Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 90 at [31]. 48 Ibid at [35]. 49 King v Fairfax Media Publications (No 2 [2014] NSWSC 1244.

16 contextuals. Her Honour referred to Hodgkinson,50 and noted the need for the particulars of contextual justification to “bear a reasonable relationship both to the contextual imputation itself and to the published material relied upon by the Plaintiff.”51

[35] In King, the first matter complained of contained the prominent headline “Wal King approved Iraq bribe”. The opening paragraphs included some general allegations of bribery and corruption before later descending into specificity. The Defendants had not pleaded truth to the central allegation and the contextual imputations tended towards generality, and the lower range in terms of seriousness e.g. “The Plaintiff conducted himself in such a corrupt manner as to make him unfit to hold the office of CEO of a large international company” and “The Plaintiff has engaged in serious corporate misconduct with respect to Leighton Holdings’ international empire”.

[36] The Defendants have sought leave to appeal from the decision in King. The nub of the submissions on appeal appears to be that once a general imputation is capable of arising, questions of form fall away. A challenge is also made to the Court’s consideration of notions of practical justice when dealing with form challenges to contextual imputations.

[37] Generally speaking, aside from the notion of “practical justice” developed in Hodgkinson52 and applied in King, form challenges to contextual imputations appear to proceed in a comparable to form challenges against a plaintiff’s imputations.53

4. The Decision in Kermode and a Defendant’s Inability to Plead Back the Plaintiff’s Imputations as Contextual Imputations.

54 [38] In Besser v Kermode , the Court of Appeal held that s 26, in contrast to its predecessor in the 1974 Act55, did not permit a defendant to plead back as a

50 Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 90. 51 King v Fairfax Media Publications (No 2) [2014] NSWSC 1244 at [11]. 52 Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 90. 53 See for instance Ell v Milne (No 2) [2012] NSWSC 259 at [7]-[28], Bateman v Fairfax Media Publications Pty Ltd (No 3) [2014] NSWSC 1601 at [41]-[43], [58], Trodden v Fairfax Media Publication Pty Ltd [2013] NSWSC 1148 (McCallum J) at [4]-[11]. 54 Besser v Kermode [2011] NSWCA 174 at [75]-[86]. 55 s 16 of the Defamation Act 1974 (NSW).

17 contextual imputation, one or more of the Plaintiff’s imputations against those other Plaintiff’s imputations ultimately found to be false. The Court relied on the structure of the Act and the precise words of s 26 to support this conclusion. There cannot, with respect, be much doubt that the literal meaning of s 26 supports the conclusion reached by the Court in Besser v Kermode and in that sense the decision is clearly correct. What is (again with respect), perhaps regrettable, is that the Court did not adopt or endorse the concerns of the primary judge Simpson J,56 who held that the construction, whilst being the only one reasonably available, was liable to work injustice, did not reflect the intentions of the legislature and warranted being brought to the attention of those responsible for statutory reform.

[39] There are many examples that could be employed to point up the difficulties flowing from the Besser v Kermode construction of s 26. Put simply a plaintiff, well advised57 and intent on covering the field, might be defamed as a serial fraudster (true) and a person liable for a violent assault (false). He can himself plead both imputations and benefit from a guaranteed win – as the truth of the fraudster imputation may only be permissibly taken into account in mitigation of damages, but not on any of the defences. Why is it not a matter for a jury as to whether such a plaintiff deserves to win or lose by a simple application of s 26?

[40] Recently in Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 (“Born Brands”), the Court of Appeal very tentatively posited an alternate view of the structure of s 26:

[86] The reasoning in Kermode and Mizikovsky (which may not be entirely consistent with each other) appears to assume that the defences in ss 25 and 26 are to be applied sequentially and (at least in the case of Besser) in the order in which they appear in the Act. However, there is an alternative reading of the legislation, namely that the tribunal of fact must

56 Kermode v Fairfax Media Publications [2010] NSWSC 852 at [54]-[56]. See also the similar comments of Gibson DCJ in Hughes v ISPT Pty Ltd (No. 2) [2010] NSWDC 282 at [20]-[21]. 57 An interesting question arises as to whether a responsible solicitor could sign a certificate on such a plea. In a technical sense, so long as the statement of claim does not allege the falsity of the imputations, there might be a dubious argument that the matter is the cause of action, and that even if it conveys true imputations, so long as it conveys false imputations there is an entitlement to claim damages. Accordingly it could be said there is nothing misleading about such a statement of claim. However when all is said and done, given the particulars of meaning or imputations are there first and foremost to point up how the Plaintiff says she is defamed – as the basis of the claim for damages, it would seem quite wrong for a true imputation to be deliberately pleaded.

18 consider holistically the effect of the defamatory matter on the reputation of the plaintiff, deciding at the end of the day whether, by reference to the imputations pleaded by both plaintiff and defendant, any imputations which have not been shown to be substantially true cause any further harm to the reputation of the plaintiff once the effect of the substantially accurate imputations has been assessed.

[87] As noted by McCallum J in McMahon, in different cases the positions of the respective parties may differ. The position adopted by each party is likely to depend upon the relative seriousness of the imputations pleaded by each. That is illustrated by the claims of absurd results which might flow from the adoption of one course or the other: McMahon at [67]; Mizikovsky at [16].

[88] It is not appropriate to say more about these issues in the present case as neither party sought to expose any inconsistency in the authorities, although the issue was raised in written submissions before the trial judge …..58

[41] Basten JA at [82] of Born Brands went so far as to say that on one view Besser v Kermode “was confined to a pleading point and did not need to answer the separate question as to whether a defendant could nevertheless rely upon imputations which it had proved to be substantially true as overwhelming the defamatory effect of an imputation to which it had not pleaded or established a defence of substantial truth.” That observation, with respect, seems at odds with the quite determined reasoning in Besser v Kermode.59

[42] Ultimately in Born Brands the Court of Appeal held that the defence of contextual truth succeeded against the sole surviving plaintiff’s imputation found to be conveyed, defamatory and not justified.60

5. The Pleading Back of Alternative Plaintiff’s Imputations as Contextual Imputations

58 Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 at [86]-[88]. 59 Besser v Kermode [2011] NSWCA 174 at [84]. 60 See Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 at [88]-[89].

19 [43] One potential exception to the finding in Besser v Kermode, outlined in that case, 61 was a situation where a plaintiff had herself pleaded alternate imputations. The Court of Appeal observed if a jury found one was conveyed and not the other, then the plaintiff ceased to rely on the alternative imputation and that arguably it then ceased to become an imputation “of which the plaintiff complains” in the language of s 26. Accordingly, it was arguable that a defendant could plead the alternative imputation as a contextual. The Court of Appeal did not express a concluded view but did observe the dubious practical utility in a defendant adopting the less serious alternative imputation in circumstances where the jury had found the more serious alternative arose.

[44] On three more recent occasions the issue of alternative imputations and contextual truth defences have come before the defamation list judge:

a. In Zeccola v Fairfax Media Publications Pty Ltd62 the Court dealt with a challenge by the Plaintiff to the pleading of two alternate contextual imputations along the lines of guilt and suspicion. The Court, although concerned by the complexity of the technique, permitted the approach observing there was no reason in principle why a contextual imputation of lesser seriousness could not be pleaded as an alternative to a more serious contextual imputation.63

b. In Kelly v Fairfax Media Publications Pty Ltd (No 2)64 the Plaintiff challenged the Defendant’s adoption of one of its alternatives as a contextual imputation. Her Honour expressed some doubt about the obiter in Besser v Kermode but nonetheless proceeded on the basis that a defendant would be entitled to plead a plaintiff’s alternative imputation as a contextual so long as it was another imputation arising in “addition” in accordance with the

61Besser v Kermode [2011] NSWCA 174 at [90]-[91]. The imputations themselves were set out at [11] and [12]. One example of a pair of alternatives: “The Plaintiff had obtained a 20 million dollar windfall for his companies by improperly influencing public servants and politicians by conferring benefits upon them” and in the alternative “The Plaintiff had attempted to improperly influence public servants and politicians in his favour by conferring benefits upon them.” 62 Zeccola v Fairfax Media Publications Pty Ltd [2014] NSWSC 227 at [29]-[33]. 63 Ibid [34]-[37], where the Court went on to strike out the reasonable suspicion imputation as incapable of arising. That decision forms part of the appeal discussed at Section 2.4 above. 64 Kelly v Fairfax Media Publications Pty Ltd (No 2) [2014] NSWSC 166

20 requirements of s 26. In this case, proceeding on that basis, the contextuals were struck out as the only difference between the alternates was “one of the degree of seriousness of the conduct in question, which is in substance the same conduct”.65

c. In Hall v TCN Channel Nine Pty Ltd66 the Court dealt with an application by the Defendant to strike out certain of the Plaintiff’s imputations following the adoption by the Plaintiff of a number of contextual imputations (the decision is dealt with in more detail below). Her Honour accepted the Defendant’s argument that following the Plaintiff’s appropriation of two of the contextuals, they could only be relied upon as an alternative to an existing Plaintiff’s imputation.67 However the Court rejected a submission (based on Besser v Kermode) that having established the two Plaintiff’s imputations as alternatives, the Defendant was entitled to plead the fallback (in fact its former contextual) as a fresh contextual.68 Applying the same approach as in Kelly, 69 the Court held that even though the Defendant had a legal entitlement to plead back the alternative as a contextual, it would not here be permitted to do so because the alternatives did not arise in addition to each other. The reason was the imputations were true alternatives – if the first was rejected only then the second would come to be considered - and it would then be one of the imputations of which the Plaintiff complained, and accordingly unavailable as a contextual. Conversely, if the jury accepted the first alternative, they could not find the alternative arose as a contextual as they were true alternatives.

65 Ibid at [24]. The two alternates were “the Plaintiff is corrupt in that, while a senior public servant, he provided favourable treatment to the Kazal family, a powerful property family, in connection with the granting and administration of leases by the Sydney Harbour Foreshore Authority in exchange for secret benefits, including lavish holidays in Abu Dhabi” and “the Plaintiff accepted bribes while he was a senior state public servant”. 66 Hall v TCN Channel Nine Pty Ltd [2014] NSWSC 1604. 67 By example, the Plaintiff’s imputation was that “The Plaintiff had so conducted himself in the conduct of his building business that the Department of Fair Trading refused to renew his building license”. The Defendant’s contextual, appropriated by the Plaintiff was “The Plaintiff had so conducted the business of his company the Extension Factory that the Department of Fair Trading refused to renew its building license.” The Defendant argued that the Plaintiff’s imputation conflated the individual and corporate entity, whereas as its contextual more accurately recorded he thrust of the allegation. 68 Hall v TCN Channel Nine Pty Ltd [2014] NSWSC 1604 at [23]-[29]. 69 Kelly v Fairfax Media Publications Pty Ltd (No 2) [2014] NSWSC 166.

21

70 [45] Practically speaking, an analysis of the reasoning in Kelly (where the pleading of contextual based on an alternative Plaintiff’ imputation of lesser seriousness was disallowed) and in Hall71 (where the pleading as a contextual of a true alternative was disallowed) suggests that the fleeting and narrow crack in the door left open at the tail end of the decision in Besser v Kermode has been closed.

6. The Appropriation by a Plaintiff of Contextual Imputations

[46] The entitlement of a plaintiff to appropriate contextual imputations and thereby deprive the defendant of a defence is now firmly established. See Besser v Kermode72 where the Court observed that appropriation by a plaintiff of a contextual imputation was an open course.73 See also Holt v TCN Channel Nine74 citing this passage in Besser v Kermode.

[47] Two earlier decisions appeared to prohibit such appropriations:

a. In Waterhouse v The Age Company Ltd & Ors75 Nicholas J refused an application by a plaintiff seeking to adopt contextual imputations into the Statement of Claim. His Honour held as follows:

[26] By the amendment the issues as to truth or falsity of the imputations, and resulting harm to reputation, would be raised on the plaintiff's pleadings, which include the claim for aggravated damages that harm was increased by the falsity of the imputations. However, the defence already raises the same questions, and includes the plea in mitigation that harm was reduced by the truth of the imputations. It follows, in my opinion, that for the agitation of questions as to truth or falsity of the imputations, and resulting harm to reputation, it is not necessary to allow the amendment sought by the plaintiff. The plaintiff did not identify any other

70 Kelly v Harbour Radio Pty Ltd [2013] NSWSC 9. 71 Hall v TCN Channel Nine Pty Ltd [2014] NSWSC 1604. 72 Besser v Kermode [2011] NSWCA 174, 81 NSWLR 157 at [88]-[89]. 73 Before this time in Creighton v Nationwide News Pty Ltd (No. 2) [2010] NSWDC 192 Gibson DCJ had permitted an appropriation relying on earlier dicta of] Simpson J in Kermode v John Fairfax Media Publications Pty Ltd [2010] NSWSC 852. 74 Holt v TCN Channel Nine [2014] NSWCA 90 at [23]. 75 Waterhouse v The Age Company Ltd & Ors [2012] NSWSC 9.

22 question in controversy which necessitated the grant of leave to amend to include it in these proceedings. Accordingly, leave to amend under s 64(2) CP Act should be refused.

…

[29] If the amendment was permitted, the defendants would be deprived of the right to have the issue of harm under s 26 determined by the jury. In my opinion, such a result would work a grave injustice to them in these proceedings.

[30] This is not a case in which the amendment would impede the progress of the litigation or otherwise cause delay, or would waste public resources. It is not required to avoid a multiplicity of proceedings. The application stems only from the fact that the imputations were pleaded in the defence of contextual truth.

[31] Taking into account all the circumstances of the case, I find the plaintiff would suffer no injustice by the refusal of leave. It is reasonable to suppose that at the time he learnt of the publications, or soon thereafter, the plaintiff would have had a good idea of the defamatory meanings which harmed his reputation and hurt his feelings. There has been full opportunity to identify and plead them, and those he chose were adhered to in opposition to the defendants' challenge earlier referred to. In McMahon (par 49) Giles JA referred to the importance of getting the framing of imputations right the first time, at risk of refusal of leave to amend at a later time.

b. See also Ahmed v Nationwide News.76

77 [48] However, more recently in Hall v TCN Channel Nine Pty Ltd the defamation list judge permitted an appropriation:

76 Ahmed v Nationwide News [2010] NSWDC 268. 77 Hall v TCN Channel Nine Pty Ltd [2014] NSWSC 1604 at [30]-[36].

23 [35] I confess I have not found this issue easy to determine. On the one hand, it seems unsporting to pull the contextual truth rug from underneath the defendants' feet. On the other hand, I accept, as submitted by Ms Chrysanthou, that there is no property in an imputation. Leaving aside the apparent unfairness of depriving the defendants of an aspect of their defence, the application to amend at this point would readily be granted in accordance with accepted principle.

[36] In that context, I have also had regard to my view that, although the plaintiff's original imputations and the adopted contextual imputations technically meet the requirement of differing in substance, I would consider that, on the strength of the particulars provided in the amended defence, the defendants have a respectable prospect of persuading the jury that even the plaintiff's original imputations are substantially true.

[49] With great respect, her Honour’s chief point is sound – there is no property in an imputation. If it arises as a contextual, it arises as a Plaintiff’s imputation and as a starting point there does not seem to be any reason why a Plaintiff should not be able to rely upon it if she or he wishes.

[50] However, the substantial difficulty with this appropriation issue stems again from the wording of s 26 as exposed in the decision in Besser v Kermode. The effect of the finding in that case allows a plaintiff to appropriate a true contextual imputation for purely tactical reasons in order to pull the contextual truth rug from underneath the defendant’s feet. Once the plaintiff owns the imputation, even if it is proved true (assuming at least one other false imputation is available) it cannot be employed in aid of a defence. This reality will make some amendment applications by plaintiff’s of this kind very troubling, but there will probably rarely be available any decent legal reason to refuse them. One possibility is the Court’s consideration of limited evidence on substantial truth – if after perusing such evidence it really looks as though the plaintiff is appropriating an imputation that may very well be true (and had earlier been ducked), then in those circumstances the reasons for refusing the appropriation application would be compelling.

24 7. Pre-Trial Challenges to the Particulars of Contextual Truth including Challenges to the Capacity of Contextual Imputations to Swamp Plaintiff’s Imputations.

78 [51] In former times, plaintiffs would not infrequently challenge the defence of contextual truth on the basis that the contextual imputations were incapable of “swamping” the Plaintiff’s imputations and/or that the particulars of truth appended to the contextual imputations could not, even if made out, sustain the imputation. Since the decision in Hayson v John Fairfax,79 in which the Court of Appeal reminded parties that particulars are merely “topics on which evidence may be lead” and declined to strike out a contextual truth defence on this ground, challenges of this kind are now rare.

80 [52] In Zeccola v Fairfax Media, a challenge to the sufficiency of particularisation of contextual imputations failed. In Ell v Milne (No 3)81 the Court did strike out a contextual imputation on the basis that it could not be sustained by the particulars. However, it was a third attempt and it seems to have been fairly clear that the particulars in question had steadfastly declined to provide any detail fleshing out a state of mind on the part of the Plaintiff, in circumstances where that state of mind was critical to the terms of the contextual imputation.

8. The Application of the Defence of Contextual Truth at Trial

[53] In McMahon v John Fairfax Publications Pty Limited (No 6)82 McCallum J dealt with an application concerning the appropriate direction to be given to a jury on contextual truth. In circumstances where the jury had found that one of the Plaintiff’s imputations was true, the issue was whether when undertaking the balancing exercise prescribed by s 26 the jury should

78 John Fairfax Publications Pty Limited v Blake [2001] NSWCA 434, McBride v Australian Broadcasting Corporation [2000] NSWSC 747 (also strike-outs on basis of form and incapacity to arise), Sutherland v ACP Publishing Pty Limited [2000] NSWSC 1139. 79 Hayson v John Fairfax Publications Pty Ltd [2007] NSWCA 376 at [20]. 80 Zeccola v Fairfax Media Publications Pty Ltd [2014] NSWSC 227 at [6]-[19]. The Plaintiff alleged that the fact that the particulars of justification were the same as the particulars of contextual truth meant the latter defence must fail. Her Honour, whilst noting that this structure was “inauspicious”, declined to strike out the Defence. 81 Ell v Milne (No 3) [2012] NSWSC 985 at [18]-[22]. See also McMahon v John Fairfax Publications (No 3) [2012] NSWSC 196 at [25]-[52] where the Court declined to strike out particulars of justification prior to trial. A challenge to a contextual imputation, at least partly based on its inability to swamp the Plaintiff’s imputations, was deferred; see [24]. 82 McMahon v John Fairfax Publications Pty Limited (No 6)82 [2012] NSWSC 224 at [51]-[78].

25 include the true imputation. Put another way is a jury to compare the facts, matters and circumstances that have made out the truth of the contextual imputations against all of a plaintiff’s imputations or only those which the jury has found not to be substantially true? Her Honour took the view that jury should exclude consideration of plaintiff’s imputations found to be a matter of substantial truth.

83 [54] In the course of her decision in McMahon (No 6), her Honour explored an example proffered by the defendant’s counsel of an article conveying imputations that a plaintiff was a murderer, a thief and a litterbug. Suppose a plaintiff sued only on murderer and litterbug, and a defendant pleaded thief as a contextual. Assuming that murderer and thief were true but litterbug was not, the position taken by the plaintiff would compel a verdict in his favour. This is because the allegation of murder – even though true – would have to be balanced against the evidence establishing the plaintiff is a thief.

[55] Her Honour observed that this analysis would enable a plaintiff to avoid the sting of the thief imputation by selective pleading.84 The example proffered is with respect a compelling reason in favour of the conclusion her Honour ultimately reached.

85 [56] In Mizikovsky v Queensland Television Limited the Queensland Court of Appeal took a different approach and upheld a trial judge’s direction to a jury to balance the evidence establishing the contextual imputation, against all of the Plaintiff’s imputations, even those that were true. The decision does not with respect, grapple with the careful analysis undertaken by McCallum J in McMahon (No 6),86 a few weeks earlier. It has not been followed by two other judges of the NSW Supreme Court in subsequent decisions.87 Furthermore, it

83 Ibid at [68]-[71]. 84 Ibid at [71]. See also Besser v Kermode [2011] NSWCA 174 at [85]. 85 Mizikovsky v Queensland Television Limited [2013] QCA 68 at [14]. 86 McMahon v John Fairfax Publications Pty Limited (No 6) [2012] NSWSC 224 at [51]-[78]. 87 Born Brands v Nine Network Australia Pty Ltd (No 6) [2013] NSWSC 1651 at [121] and Phillips v Robab Pty Limited [2014] NSWSC 1520 at [59]. In an appeal from Born Brands (No 6) - Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWSCA 369 at [80], the Court of Appeal noted the division between the single judges in NSW and the Court of Appeal in Qld but did not resolve the issue either way. However, the language of paragraph [86]-[87] arguably tends to indicate some discomfort with both Mizokovsky and Kermode whereas the reasoning of McMahon (No 6) is not even impliedly criticised.

26 arrives at an unreasonable result, which unlike the comparable finding in Besser v Kermode, is not compelled by the language of the statute.

[57] There appears to be unanimity on the notion that neither judge nor jury is required to find a contextual imputation is defamatory – that test is not part of the defence.88

9. The Hore Lacy Defence and its Compatibility with NSW Practice and Procedure

9.1. The decision in Bateman v John Fairfax Publications

89 [58] So far as the writer is aware not only has the defence of Hore Lacy never succeeded in NSW, it has also never gone to a jury. Nonetheless, it appears periodically in defences, usually to be retired at a time when a forthcoming trial focuses minds on less esoteric issues.

[59] At the outset the significant differences between a Hore Lacy and a contextual truth defence should be noted. Hore Lacy requires imputations that are not substantially different from the Plaintiff’s imputations (or nuances), and imputations that are equal to or less serious than the Plaintiff’s imputations – the rationale being that a Plaintiff herself may succeed on such imputations even if she has not pleaded them. Contextual Truth (in potted summary) requires imputations that do differ in substance, and that are so serious (at least when considering the evidence put forward to prove justification rather than the terms of the contextual imputations themselves)90 that no further damage can be done to the Plaintiff by the publication of the false imputations.91

88 See McMahon v John Fairfax Publications Pty Ltd (No 3) [2012] NSWSC 196 at [18] and Mizikovsky v Queensland Television Limited [2013] QCA 68 at [21]-[26]. 89 David Syme & Co Ltd v Hore Lacy [2000] VSCA 24 (2000) 1 VR 667 at esp. [52]-[53] and [69]. 90 John Fairfax Publications Py Ltd v Blake [2001] NSWCA 434 at [5] and [70]. 91 In Woodham v John Fairfax Publications [2005] NSWSC 1204 Nicholas J held that a defendant could not deploy a single imputation in both a contextual truth defence, and a Hore Lacy defence, because of these critical differences. The approach was approved in John Fairfax Publications Pty Limited v Hitchcock (2007) 70 NSWLR 484 at [235]-[237].

27 92 [60] In Besser v Kermode the Court of Appeal, in obiter dealing with the common law options available to defendants in search of a justification defence, clearly implied that it considered the Hore Lacy defence to be valid law. This is not surprising given the terms of s 24 of the Defamation Act 2005 which expressly preserved the common law defences in existence at the time of enactment.

93 [61] In Bateman v Fairfax Media Publications (No 2) the defamation list judge struck out a Hore Lacy ‘Defence’ as having a tendency to cause prejudice, embarrassment and delay in the proceedings.94 Her Honour found that the defence “had no work to do having regard to the law and practice in this state.”95 Her Honour observed that, having reached this conclusion, ss 56 and 58 of the Civil Procedure Act 2005 militated strongly in favour of the pleading being struck out. The following aspects of the reasoning96 are significant:

a. In interstate jurisdictions more latitude is granted to a plaintiff to contend at trial that nuance meanings or meanings other than she has pleaded are conveyed. There is thus a risk that the defendant will be confronted by an imputation not pleaded at the trial;

b. In NSW, the rules of pleading97 require greater precision in the pleading of imputations. If a plaintiff wishes to advance a lesser or nuance meaning then he or she must plead such a meaning. A defendant is therefore not exposed to the risk of having to meet an un-pleaded meaning and thus the rationale for the ‘defence’ falls away;

c. In NSW, a jury is not asked whether the matter complained of has defamed the defendant but instead whether the matter complained

92 Besser v Kermode [2011] NSWCA 174 [58]-[59] and [86]. See also John Fairfax Publications Pty Limited v Hitchcock (2007) 70 NSWLR 484 at [21], [40] and [233] and John Fairfax Publications v Zunter [2006] NSWCA 227 at [42]. 93 Bateman v Fairfax Media Publications (No 2) [2014] NSWSC 1380. 94 See UCPR 14.28. 95 Bateman v Fairfax Media Publications (No 2) [2014] NSWSC 1380 at [50]. 96 Ibid at [33]-[57]. 97 See UCPR 14.30, 14.31 and 14.32.

28 of conveys certain meanings. Those meanings are taken to include all meanings which do not differ in substance;

d. Hore Lacy is not a defence but a principle relating to the proper pleading of justification at common law;

e. The Plaintiff had no intention (in accordance with NSW practice) of asking the judge or jury to find any alternative meaning that differed in substance from his own meanings. Accordingly, there being no suggestion that the Plaintiff would depart from the pleaded case, the Defendant found itself obliged to defend the pleaded case.

[62] Ultimately her Honour struck out the pleading. The Court did so with some diffidence, mindful of the language of the decision in Besser v Kermode, but distinguishing that decision as not having considered the compatibility of Hore Lacy with NSW practice.

9.2. The decision in Setka v Abbott

98 [63] A month later in Setka v Abbot the Victorian Court of Appeal dismissed an appeal by a Plaintiff against a decision to uphold a Hore Lacy pleading the subject of a pre-trial challenge. The Court of Appeal emphatically affirmed the Defence. In the course of its reasons the Court distinguished Bateman v John Fairfax (No 2)99 as a decision confined to the law and practice in NSW.100 However the Court of Appeal then criticised aspects of the reasoning in Bateman v John Fairfax (No 2),101 observing:

a. Hore Lacy is a defence and not a pleading practice, and moreover it is not a peculiarly Victorian defence, but also a defence forming part of the common law of West Australia, South Australia and the Australian Capital Territory.

98 Setka v Abbott [2014] VSCA 287. 99 Bateman v Fairfax Media Publications (No 2) [2014] NSWSC 1380. 100 Setka v Abbott [2014] VSCA 287 at [130]. 101 Ibid at [131]-[141].

29 b. The decision in Bateman (No 2)102 paid no or insufficient regard to the sections in the Defamation Act 2005 preserving the common law, including common law defences.103

c. UCPR 14.30, 14.31 and 14.32 are in effect remnants from the 1974 Act in which each imputation gave rise to a separate cause of action. They have doubtful utility in the context of the 2005 Act.

d. Even if UCPR 14.30-14.32 are in play and even if the need for precision in pleading stands unchanged in NSW, the defence of Hore Lacy is still applicable. A Plaintiff can succeed in NSW on an un-pleaded variant of a pleaded imputation as “each pleaded imputation is taken to comprehend all imputations that do differ in substance from it”.104 A defendant seeking to justify must plead the defence before trial. The decision in Bateman 105 has the consequence that defendants would have to plead justification “en bloc” to meet “unidentified but permissible variants.”106 This would generate unfairness to both parties.

[64] An application for special leave to appeal to the High Court in Setka is pending. An application for leave to appeal to the NSW Court of Appeal is also pending in Bateman (No 2). In one sense it would be a matter of real gravity for the High Court to strike down a defence that has been alive and prospering in a majority of States for more than a decade. It may well be that a straightforward view is taken that if NSW pleading and trial practice is inconsistent with the common law, then NSW will just have to adjust.

102 Bateman v Fairfax Media Publications (No 2) [2014] NSWSC 1380. 103 ss 6(2) and 24 of the Defamation Act 2004. 104 While this is certainly true, this may mean different things north and south of the border. There is no necessary consistency between the Hore Lacy assessment of what is a permissible “nuance” imputation, and the NSW assessment of whether an imputation would be struck out as not differing in substance. When one examines the plaintiff’s meanings and the defendants’ Hore Lacy variants at paragraph [5]-[8] of Setka, it has to be said that if those meanings were pleaded in NSW by the Plaintiff as additional meanings they would survive a differing in substance challenge – whatever other problems the Hore Lacy meanings might have they clearly differ in substance as that term is understood in this state. The plaintiff’s meanings are very specific and the defendant’s meanings are excessively general. 105 Bateman v Fairfax Media Publications (No 2) [2014] NSWSC 1380. 106 Setka v Abbott [2014] VSCA 287 at [109].

30 [65] However, the most basic rationale underpinning Hore Lacy is the entitlement of a plaintiff to succeed on meanings that are not pleaded. In 2014, this seems inconsistent with the policies of quick and cheap justice that now appear in one manifestation or another in the various legislation and rules of Court in the different States. Further, the notion of permitting a jury to return with nuance meanings of its own does not seem terribly practical. If a jury’s entitlement to do so is more theoretical than real, then that is a further reason for suggesting Hore Lacy is not really necessary. In the end what is the problem with confining a plaintiff to her pleadings? And once a plaintiff is so confined, then a defendant may either justify the pleaded imputation, or plead and justify its own imputations via contextual truth and that can be the end of the matter.

10. Conclusion

[66] The decision in Besser v Kermode increased the importance for a defendant to plead independent contextual imputations, without which it would have no truth related defence, even if it could defend some or most of a plaintiff’s pleaded imputations as matters of substantial truth. This appears to have generated a considerable amount of activity and jurisprudence, in the course of which plaintiffs have enjoyed considerable success in striking out contextual imputations, most often on the basis that they do not arise “in addition” to the imputations of the Plaintiff, or are otherwise incapable of arising or defective in form. It may well be that without the impact of Besser v Kermode, many of these contextual imputations would never have seen the light of day and become susceptible to the scrutiny of the Court.

[67] Contextual imputations of a general kind have encountered particularly rough waters. One can readily understand a long line of authority that seeks to constrain defendant publishers from grasping for general meanings to justify, when they cannot justify what they actually published. Apart from the unfairness, this course can greatly increase the costs and length of defamation proceedings, as they are opened up into a kind of roving inquest into a plaintiff’s life and history. However, as the example of the Deren107 case shows, there will be occasions when allowing a contextual truth defence that raises issues of real gravity is what justice and fairness demands – even when that

107 New South Wales v Deren & Anor [1999] NSWCA 22.

31 contextual truth defence lacks a very close identification with the published matter.

[68] It is trite to say that each case will depend on its own facts. What is perhaps regrettable is that considerations of fairness, while accorded a limited relevance on questions of form, are not part of the Court’s overall supervisory jurisdiction on the issue of whether a contextual imputation accords with the requirements of s 26, or indeed of whether a s 26 defence should be allowed at all. As an example, in circumstances where the particulars of contextual truth raise fresh matters not contained within the particulars of justification, and where those fresh matters are significant and (even if not relating to the precise subject of the matter complained of) are substantially germane to the sting, a Court should be able to examine big picture considerations of fairness on any strike out application.

[69] In NSW, the defence of Hore Lacy has played no role of significance. It is possible, that if the High Court grants special leave in the Setka matter, that any substantive decision in that matter may have a real impact on practice and procedure on defamation pleading and trials in this state. The appeal in Bateman (No 2) may also generate such a result. The suggestion that juries, dissatisfied with the pleaded meanings submitted to them, should be entitled to find alternative meanings (especially meanings as resoundingly different as those pleaded by the defendant in Setka), seems an anachronism and is certainly at odds with at least 40 years of practice and procedure in NSW. However, if Hore Lacy really is good law, things may need to change.

Matthew Richardson

32