Pahuja v TCN Channel Nine Pty Ltd (No 4)

1. [1]

   HER HONOUR: I gave the principal judgment assessing damages in these proceedings on 15 June 2018: Pahuja v TCN Channel Nine Pty Ltd (No 3) [2018] NSWSC 893. In that judgment, I omitted to publish my reserved reasons for three rulings given during the trial. This judgment sets out those reasons.

Application concerning the defence of justification

1. [2]

   The first application was the plaintiff’s application to have the defence of justification taken from the jury. The defence invoked s 25 of the Defamation Act 2005 (NSW), which provides:

2. [3]

   The imputations relied upon by the plaintiff at trial were:

3. [4]

   The defence filed 6 June 2017 sought to justify only imputations (a), (b), (d), (g), (h), (i) and (j) as being substantially true.

4. [5]

   At the conclusion of the evidence, the plaintiff sought to have the justification defence taken from the jury in its entirety (T262.27; T263.6).

5. [6]

   In developing his submissions in opposition to that application, Mr McClintock SC, who appears with Mr Richardson for the defendants, expressed the view that imputation (a) was ambiguous and ultimately made an application to have that imputation struck out on that basis (T304.44; the issue was first flagged at T286 but not pursued at that time). I rejected that application and ruled that imputation (a) would go to the jury.

6. [7]

   I made the following orders determining the plaintiff’s application:

7. [8]

   The plaintiff’s application invoked the principles stated in Greig v WIN Television NSW Pty Ltd [2009] NSWSC 632 (in turn applying principles stated in McKenzie v Mergen Holdings Pty Ltd (1990) 20 NSWLR 42; cited in Greig as McKenzie v Mervyn Holdings Pty Ltd). As established by those authorities, the task in determining such an application is to determine whether the evidence is reasonably capable of establishing the substantial truth of the defended imputations. Mr McClintock noted that the question posed for the jury as to defamatory meaning is whether the matter complained of carried the imputations “or any imputations not substantially different from them” and that must also be borne in mind. If the evidence had been capable of establishing the substantial truth of an imputation not substantially different from any of the plaintiff’s imputations, the defence as to that imputation would have had to go to the jury.

8. [9]

   In Greig at [85]-[87], McClellan CJ at CL said:

9. [10]

   Mr Smark submitted that the evidence in the present case constituted no more than a mere scintilla and was not capable of meeting the required threshold as explained in those authorities.

Rule 29.11

1. [11]

   Mr McClintock raised a threshold issue as to the approach the Court should take to the plaintiff's application. He submitted that I should deal with the matter under r 29.11 of the Uniform Civil Procedure Rules 2005 (NSW) and “take a verdict” first (by which he meant a special verdict giving answers to all of the questions raised by the defence), reserving the argument in relation to the plaintiff’s application until after obtaining those answers. The burden of the submission was that, if the jury answered the questions as to the impugned defence adversely to the plaintiff and I then reached the view that the evidence was not capable of supporting any of those answers, it would remain open to me to enter a different verdict on the strength of my ruling.

2. [12]

   Rule 29.11 provides:

3. [13]

   Mr McClintock also made passing reference (at T238.31) to s 90 of the Supreme Court Act 1970 (NSW) but the precise reliance sought to be placed on that section in the present context was not articulated. It confers authority to take a special verdict but otherwise does not appear to inform the present issue.

4. [14]

   Mr McClintock submitted that support for the approach for which he contended was to be found in the decision of Turner v Ku-ring-gai Municipal Council (1990) 72 LGRA 60 (Kirby P, Priestley and Handley JJA). Turner was a claim in negligence tried by jury. One of the grounds of negligence relied upon was the defendant Council’s failure to erect a particular kind of sign. The trial judge concluded that the Council had no power to erect such a sign and accordingly withdrew that allegation of negligence from the jury. The Court of Appeal held that the conclusion was wrong and remitted the matter for a new trial. The judgment of the Court concluded with the following obiter remarks (the rule referred to was not in force at the time of the trial):

5. [15]

   As acknowledged by Mr McClintock, the present situation is different. Mr McClintock was not able to point to any case in which a judge had concluded that there was no evidence reasonably capable of supporting a defence but had proceeded on the strength of the power in r 29.11 to leave the question to the jury notwithstanding that conclusion. He nonetheless submitted that the approach for which he contended, if not mandated, was at least very strongly suggested by the authority of Turner to be the correct approach.

6. [16]

   Mr McClintock went so far as to submit that the mere fact that the issue was being “argued like this” indicated that the matter was one upon which reasonable minds might differ, pointing to the conclusion that the court should leave the matter to the jury even if satisfied that the evidence was not reasonably capable of proving the defended imputations. In my respectful opinion that submission, which entails at least one untested assumption, must be rejected.

7. [17]

   In my view, it may be doubted whether s 90 of the Supreme Court Act confers authority to require a jury to make a finding of fact as to which the trial judge has ruled, as a matter of law, the evidence is capable of supporting only one answer but it was not necessary to determine that issue.

8. [18]

   Assuming (as suggested in the annotations to Ritchie relied upon by Mr McClintock) that rule 29.11 does confer power to take a special verdict in those circumstances, I did not consider it appropriate in the circumstances of this case to take that approach. In declining to take that approach, I acknowledged the inconvenience for the parties if my ruling is wrong. However, the course contended for by the defendants was also not without difficulty and potential inconvenience. In the case of a ruling of law of the kind considered in Turner, the conclusion reached would pose no difficulty in summing up otherwise. In the case of a conclusion as to the capacity of the evidence to sustain a finding, the course invited by the defendants would have required me to sum up what I regarded to be a non-existent defence case to the jury, raising the risk of a different kind of issue on appeal (concerning the adequacy of the summing up). There would be a real question in those circumstances as to the possibility of adequately discharging the function of summing up. I took the view that, in those difficult circumstances, the appropriate course was to determine the application according to my assessment of its merits and to direct the jury accordingly.

Defendants’ application in respect of imputation (a)

1. [19]

   As already noted, imputation (a) is that the plaintiff was knowingly involved in a cruel immigration scam in which overseas residents were forced to pay tens of thousands of dollars to dishonest immigration agents in order to live and work in Australia.

2. [20]

   The difficulty with the imputation was perceived by senior counsel for the defendants only upon hearing the plaintiff’s argument as to why it could not be proved substantially true. As ultimately explained the following day, the alleged ambiguity was “what the words ‘knowingly involved in’ mean”. Mr McClintock sought to illustrate the ambiguity with an example, as follows:

3. [21]

   By reference to that example, he submitted that the ambiguity lay in “whether the knowingness is satisfied by merely the act that establishes the involvement or whether the knowingness has to go to the characteristics of the conspiracy”.

4. [22]

   I did not consider the imputation to suffer from the vice alleged. As explained with compelling clarity in the decision of the Court of Appeal in Greek Herald Pty Ltd v Nikolopoulos & Ors [2002] NSWCA 41 at [19]-[23], the words of an imputation are necessarily to be read in the context of the matter complained of. Taken in the context of the matter complained of, I thought imputation (a) was clear in attributing the plaintiff with knowingly involving himself in an ongoing scam which, to his knowledge, had seen multiple victims fall prey to multiple agents. Indeed, just as the Court held in Nikolopoulos, I considered that to seek (as the argument did) to remove the imputation from the context of the matter complained of as a whole, in which the plaintiff was directly accused of being “the fixer” for the dodgy agent, was completely divorced from the reality of the true dispute between the litigants.

5. [23]

   For completeness, I note that Mr McClintock also asserted that imputation (a) was not reasonably capable of being conveyed by the matter complained of but, having made that assertion, did not pursue it (T286.12).

Capacity of the evidence to prove the defended imputations

1. [24]

   As to the substantive application, Mr Smark accepted that the application fell to be determined taking the defendants’ case at its highest. However, he submitted that the only evidence in the defendants’ case capable of establishing the truth of the imputations sought to be justified was the secret recording referred to at [9] of the principal judgment. Leaving aside imputation (d), there was otherwise no evidence of any conduct on the part of the plaintiff of the kind attributed to him in the imputations.

2. [25]

   The argument proceeded principally by reference to the transcript of that recording, which was provided as an aid to the jury (MFI 2). As noted by Mr McClintock, the recording was the evidence to which the Court was required to have regard for the purposes of the present argument but the transcript served as a convenient basis for the argument.

3. [26]

   The burden of the plaintiff’s submissions in support of the application was that, based on the exchanges that occurred during the secretly-recorded meeting and taking those exchanges at their highest as admissions by the plaintiff, there was no evidence on the strength of which the jury could reasonably be satisfied as to at least one essential element of the imputations in particular. The premise of the argument, which I accept, is that a successful defence of truth under s 25 must entail proof of every element or material part of the imputation: Cross v Queensland Newspapers Pty Ltd [2008] NSWCA 80 at [71] per Beazley JA (as her Honour then was); Mason P and Basten JA agreeing at [1] and [229] respectively.

4. [27]

   While Mr Smark addressed a number of the elements of the imputations, the focus of the argument was that there was no evidence on the strength of which the jury could reasonably be satisfied on the balance of probabilities that the plaintiff was involved in an ongoing scam involving multiple victims. In focusing on that issue, Mr Smark did not concede that the evidence was reasonably capable of establishing that the plaintiff was knowingly involved in any conduct of the kind alleged in respect of the single person the subject of the secret meeting, Mr Singh. However, he submitted that, on any view of the evidence and taking it at its highest in favour of the defendants, Mr Singh was the only person the subject of any admission during the secret meeting.

5. [28]

   Mr Smark submitted that each of imputations (a), (b), (h), (i) and (j) entails as an essential element required to be proved substantially true that the scam or other conduct identified extended to more than one victim.

6. [29]

   Mr Smark developed the argument by reference to the particulars of the defence, which included the following:

7. [30]

   As submitted by Mr McClintock, the application fell to be determined by reference to the evidence, not the particulars. It was nonetheless convenient to consider the evidence under the rubric of the particulars which, as noted by Mr Smark, should be taken to indicate the high water mark of the defendants’ case.

8. [31]

   Mr Smark’s submissions persuaded me that, taken at its highest, the evidence was simply incapable of reasonably supporting any finding that any person other than Mr Singh was a victim of any conduct attributable to the plaintiff. As to the person ostensibly referred to in particular 2(a), there was no evidence of any recommendation or introduction by the plaintiff; exhibit 1 was certainly incapable of proving any such matter. No evidence was led to support particular 2(b) and that allegation was expressly abandoned. Particulars 2(c) and (d) both evidently referred to Mr Singh.

9. [32]

   I considered that the defence suffered from the same vice as the matter complained of itself, resting on inferences drawn too readily and without proper foundation in the material obtained by the journalist. As submitted by Mr Smark, there could be only one victim proved and there was no evidence whatsoever of any introduction or referral of any other person to Mr Bebawy by the plaintiff.

10. [33]

    Mr McClintock submitted that the plaintiff's application was flawed in focusing almost entirely on the exchange at the meeting transcribed in MFI 2. He submitted, with respect correctly, that the Court is required to consider not just that material but all of the evidence in the defendants' favour. While that is plainly correct, the difficulty was that, upon analysis, in my assessment, there was no other evidence capable of proving the relevant component of the imputations.

11. [34]

    An aspect of the defendants’ argument, upon which significant reliance was placed, was that it would be open to the jury to conclude that the plaintiff had lied in his evidence when he denied involvement in the alleged scam. Mr McClintock submitted that, because the plaintiff had admitted lying on the tape to the solicitor on a particular issue, it would be open to the jury to reject everything he said in the witness box. The argument required acceptance of the further step in the reasoning that, if the jury rejected what the plaintiff had said in the witness box, that is, if they concluded that his denial of being involved in the scam was false, it would be open to them to conclude that he was in fact involved in the alleged (otherwise unproved) scam.

12. [35]

    The argument was a difficult one. I had understood the defendants to accept, in the context of an earlier argument (as to the admissibility of MFI 5), that where a witness is disbelieved in the denial of a proposition, his denial cannot be used to prove the positive proposition. If authority were needed for that proposition (which I would hold to be a matter of logic), it may be found in a decision drawn to my attention by the parties of Hobbs v Tinling [1929] 2 KB 1. However, in opposing the application to have the defence taken from the jury, Mr McClintock appeared to contend that the plaintiff’s denial of any involvement in the scam, if disbelieved by the jury, could afford a basis for finding the matters denied as facts. I did not accept that proposition. As noted by Mr Smark, the defendants bore the onus of proof of the defence and were required to prove the imputations by cogent evidence. The defendants could point to no evidence (beyond perhaps the merest scintilla) capable of proving involvement by the plaintiff in a scam involving multiple victims and multiple agents.

13. [36]

    Imputations (d) and (g) did not involve the element of multiple victims. I took the view that the evidence was reasonably capable of proving those imputations. Mr Smark initially submitted that, if the jury was left with only imputation (d), I should take that the truth defence from the jury on the basis that it could not on its own establish the defence under s 25. However, he accepted that the submission raised a novel issue not previously determined by this Court and ultimately the submission was abandoned in circumstances where it was acknowledged that Mr McClintock had not had an opportunity to present a fully prepared argument.

Application concerning the defence of contextual truth

1. [37]

   The third ruling related to the defendants' defence of contextual truth under s 26 of the Defamation Act. It was common ground that the jury should first be directed to give answers to questions as to whether the imputations specified by the plaintiff were carried by the matter complained of, whether the imputations were defamatory of him and as to the defence of truth.

2. [38]

   The jury found that the broadcast conveyed the following imputations defamatory of Mr Pahuja:

3. [39]

   In accordance with my ruling explained above, the defence of justification was left to the jury only in respect of imputations (d) and (g). The jury rejected the defence in respect of imputation (g) but found that imputation (d) was substantially true.

4. [40]

   The defendants had pleaded a contextual imputation "that the plaintiff is a liar". After the jury's verdict was taken as to the first set of questions, the plaintiff made an application to have the contextual truth defence taken from the jury (transcript of Summing Up, T38). Both parties addressed this issue briefly and, on the part of the defendants, with a measure of resignation in light of my earlier rulings as to the defence of justification.

5. [41]

   The basis for the application was that the imputation that the plaintiff is a liar, if true, was not reasonably capable of meeting the test stated in section 26 of the Defamation Act. That section provides:

6. [42]

   I should record the parties’ position as to imputation (d) (that the plaintiff dishonestly denied knowing the unscrupulous immigration agent). As already noted, the jury found that imputation to have been carried by the matter complained of and defamatory but found that it was substantially true. Mr McClintock accepted that, as I held in Oscar Kazal v Fairfax Publications Pty Ltd [2017] NSWSC 44 at [35], the decision of the Court of Appeal in Besser v Kermode (2011) 81 NSWLR 670; [2011] NSWCA 174 precludes the defendants from adopting that substantially true imputation as a contextual imputation for the purpose of applying the test in s 26 (since the trial in the present case, my decision in Kazal has been upheld on appeal: Fairfax Digital Australia and New Zealand Pty Ltd v Kazal [2018] NSWCA 77 per Gleeson JA at [134]-[147]; McColl and Meagher JJA agreeing at [2] and [39]-[44]). Mr McClintock formally submitted that approach was wrong without expanding up on that submission. In accordance with the approach in Kermode, the defendants accordingly were not permitted to rely upon imputation (d) as a contextual imputation.

7. [43]

   Separately, Mr McClintock invited me to adopt the approach taken by Beech-Jones J in “Chel” (presumably a reference to his Honour’s decision in Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230). That was also put as a formal submission, it being accepted that I would not leave the plaintiff’s imputation (d) to the jury as a contextual imputation.

8. [44]

   The defendants sought to establish the truth of the contextual imputation that the plaintiff is a liar by reference to four matters. First, that the plaintiff lied to the journalist, Mr Grayson; secondly, that he lied in a statutory declaration; thirdly, that he lied in an affidavit and fourthly that he lied on his oath in the witness box. Mr McClintock submitted that those matters were capable "of overcoming the defamatory effect of [the plaintiff’s imputations]".

9. [45]

   It was common ground that the test to be applied in determining the application was as stated by the Court of Appeal in John Fairfax publications Pty Ltd v Blake; David Syme & Co v Blake [2001] NSWCA 434. As submitted by Mr Smark, in determining whether the defamatory imputations "do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations", it is necessary to have regard to the combined effect of all of the plaintiff’s imputations. Significantly, the imputations on which the plaintiff succeeded included imputation (a), that the plaintiff was knowingly involved in a cruel immigration scam in which overseas residents were forced to pay tens of thousands of dollars to dishonest immigration agents in order to live and work in Australia. Mr Smark reminded me in that context that, at the insistence of the defendants, it had been determined during the hearing (in the ruling explained above) that the imputation of being "knowingly involved" was to be understood distributively, that is, as an imputation that the plaintiff knew it was a scam; knew it was cruel; knew it involved multiple overseas residents; knew they were forced to pay tens of thousands of dollars and knew that the persons to whom they were forced to pay those sums were dishonest immigration agents.

10. [46]

    The other imputations similarly raised serious allegations including characterising the plaintiff as "a fixer", directing persons he knew were desperate to obtain visas to a dodgy immigration agent (imputation (h). Mr Smark further noted that, in addition to the general imputations of involvement in a cruel scam, there was the specific imputation imputing the plaintiff with engaging in the same conduct in respect of his own friend.

11. [47]

    In short, Mr Smark submitted that the notion that a person who was a liar could not have their reputation suffer further by reason of defamatory imputations alleging knowing involvement in such a cruel scheme would be liable to be set aside as perverse.

12. [48]

    Mr McClintock submitted that the matter was not one in which the Court could be prescriptive about the likely individual views of the jury as to the morality and rectitude of particular acts. He submitted that it would at least be open to the jury to take the view that "it is worse to tell a lie in a courtroom to win a court case than to do what is set out in imputation (a)". Even if that is correct, it does not follow that the statutory test in s 26 is capable of being satisfied. I was of the view that the imputations on which the plaintiff had succeeded, particularly imputation (a), were so serious that the evidence regarding the plaintiff's lies was simply incapable of meeting the statutory test. For those reasons, I ruled that the defence of contextual truth would not go to the jury.