Fairfax Digital Australia & New Zealand Pty Ltd v Kazal

1. [1]

   McCOLL JA: I have had the benefit of reading Gleeson JA’s draft reasons for granting Fairfax Digital Australia and New Zealand Pty Ltd, Mr Linton Besser and Ms Kate McClymont (Fairfax) leave to appeal against the decision of McCallum J in Oscar Kazal v Fairfax Media Publications Pty Ltd [1] striking out Fairfax’s defence of contextual truth and certain of its particulars in mitigation of damages, but dismissing the appeal.

2. [2]

   I agree with his Honour’s conclusion that a defamatory plaintiff’s imputation found to be substantially true for the purposes of the defence of justification in s 25 of the Defamation Act 2005 (NSW) (2005 Act) does not cease to be one “of which the plaintiff complains” for the purposes of the defence of contextual truth for which s 26 of the 2005 Act provides. The consequence of this conclusion is that to the extent Beech-Jones J held to the contrary in Chel v Fairfax Media Publications (No 6), [2] his Honour, with respect, erred. I also agree with Gleeson JA’s reasons, save to the extent to which they conflict with the observations which follow. I agree with the orders his Honour proposes.

3. [3]

   I make the following additional observations which presume familiarity with the background facts and issues as explained by Gleeson JA.

4. [4]

   At the heart of Fairfax’s submissions was its contention that injustice would flow to a defendant if a plaintiff could rely, in defeating a contextual truth defence, on imputations which do not harm the plaintiff’s reputation because they have been found to be substantially true for the purposes of a s 25 defence. [3]

The common law

1. [5]

   In considering the question whether such injustice does in fact exist on the proper construction of the 2005 Act, it is important to bear in mind that pursuant to s 6(2), the 2005 Act “does not affect the operation of the general law in relation to the tort of defamation except to the extent that this Act provides otherwise (whether expressly or by necessary implication).”

2. [6]

   A defamation action “is fundamentally an action to vindicate a man’s reputation on some point as to which he has been falsely defamed”. [4] At common law once the plaintiff proved an imputation conveyed by the matter complained of to be defamatory, two matters at least were presumed. First, that some damage would inevitably be caused to the plaintiff’s reputation by the publication of defamatory matter. [5] Secondly, that the matter complained was false. [6]

3. [7]

   The plaintiff did not have to lead evidence on the issue of falsity. [7] The plaintiff’s case went to the jury on the issue of damages with the uncontradicted presumption that the published matter was false. [8] The plaintiff was, however, entitled to lead evidence of falsity in any case, and so achieve some restoration of reputation, [9] and demonstrate increased hurt so as to attract a larger award of damages. [10]

4. [8]

   A “corollary of the rule that the plaintiff did not have to prove falsity was that, without a plea of justification on the record, the defendant could not lead evidence of the truth of the publication in mitigation of damages.” [11]

5. [9]

   Because “the law will not permit a man to recover damages in respect of an injury to a character which he either does not, or ought not, to possess,” [12] at common law, justification was an affirmative defence. [13] It was also, a complete defence. [14] If a defence of substantial truth was established, there was “deemed in law to have been just cause or excuse for the publication of the defamatory matter”. [15] The reason this is so can be seen from two decisions.

6. [10]

   First, in Rofe, Street ACJ explained that under the common law:

7. [11]

   Secondly, in Chase v Newsgroup Newspapers Ltd, in the English Court of Appeal, Brooke LJ explained that “a successful plea of justification is an absolute defence to a claim in libel because it shows, as a matter of objective fact, that a claimant is not entitled to the unblemished reputation which he/she claims to have been damaged by the publication of which complaint is made.” [17]

8. [12]

   At common law, where a defendant is not able to justify all the imputations carried by a matter complained of, the defendant may nevertheless seek to justify any one of several distinct defamatory meanings raised by a plaintiff’s claim. [18] This is known as partial justification. [19] Views differ as to whether it is a defence to the cause of action, which is the publication of defamatory words or merely relevant to the question of damages, and if proven, results in a reduction in damages. [20]

9. [13]

   In Howden, [21] Evatt J explained that a plea of partial justification to a severable part of the defamatory matter was:

10. [14]

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

11. [15]

    Where partial justification was established, the imputation found to be substantially true could be relied upon by the defendant in mitigation of damages. [22] At common law, consistently with the effect of partial justification being to bring the plaintiff’s reputation “down” to its “proper level”, it was the duty of the judge to direct the jury not to give damages in respect of such part or parts as had been justified. [23] Thus the substantially true imputation has work to do in the damages sphere. The presumption that some damage would inevitably be caused to the plaintiff’s reputation by the publication of defamatory matter has been rebutted to the extent to which the tribunal of fact considers the substantially true plaintiff’s imputation has lowered it.

The 2005 Act

1. [16]

   The expression “defamatory imputation” is used throughout the 2005 Act to identify a plaintiff’s particular complaints about the publication of defamatory matter, even though, pursuant to s 8, a person has a single cause of action for defamation in relation to that publication. [24] The legal concept s 8 invokes is based on the common law concept of an actionable wrong for the publication of defamatory matter about a person. That provides the context in which ss 25 and 26 operate. [25]

2. [17]

   As I said in Kermode, [26] s 26 “is framed by s 8 in terms of the common law cause of action [and a] defence of contextual truth must defeat the whole defamatory matter (cause of action) of which the plaintiff complains, that is to say all of the plaintiff’s stings”.

3. [18]

   As is the case at common law, pursuant to s 25, proof by a defendant that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true is a complete defence. This is not least because as is manifest and, as Ashley JA said in Elliott, [27] the defence of truth under s 25 enshrines the common law concept of justification throughout Australia. [28] Implicit in the adoption of the common law concept of justification, in my view, is that the two common law presumptions to which I earlier referred apply once a plaintiff establishes that a matter complained of has conveyed imputations which are defamatory of and concerning that plaintiff. [29] There is, in my view, nothing in the 2005 Act which provides otherwise (whether expressly or by necessary implication). [30]

4. [19]

   Indeed, the contrary is the case. Textual support for this conclusion can be found in s 26. The text of s 26, in my view, reflects the common law presumption that some damage is caused to the plaintiff’s reputation by the publication of the defamatory matter as reflected in both the defamatory imputations of which the plaintiff complains and, too, the contextual imputations. It is that presumption which is the basis for the s 26(b) weighing exercise. If the harm caused by the substantial truth of the contextual imputations outweighs the harm caused by the defamatory imputations, the contextual truth defence succeeds.

5. [20]

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

6. [21]

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

7. [22]

   The logic of the construction of, in particular, ss 25 and 26 of the 2005 Act, as well as the context, general purpose, policy and consistency and fairness of those provisions, [31] is such that there is a relationship between the two provisions. Both defences concern the defences involving issue of truth. Section 25 concerns what can be called the defence of truth in its pure common law sense. Section 26, on the other hand, is a statutory construct, whose origins and purpose were explained in Kermode. Nevertheless, they are linked by fact that for the purposes of determining the defences of truth under each provision the plaintiff’s defamatory imputations are the same. It would offend the principles of statutory construction to which I have referred if a s 25 finding that a plaintiff’s defamatory imputation was substantially true were not given the effect the common law gave to such a conclusion. As Meagher JA has said, “[s]o far as possible, the corresponding language in s 26, a successive and ‘complementary’ provision, should be given the same meaning”. [32]

8. [23]

   There was also an interrelationship between ss 15 and 16 of the 1974 Act, albeit that it operated differently to the manner in which, in my view, ss 25 and 26 interrelate. Once an imputation was found to be substantially true for the purposes of s 15 of the 1974 Act, the plaintiff’s cause of action in respect of that imputation had failed. [33] Nevertheless because pursuant to s 16 a defendant could plead back a plaintiff’s imputation, a finding for the purposes of s 15 that the imputation was substantially true flowed through to the tribunal of fact’s consideration of the s 16 defence, [34] albeit that it operated on what might conveniently be called the defendant’s side of the ledger. That of course is the operation for which the appellant has unsuccessfully contended in respect of a substantially true plaintiff’s imputation in the s 26 context.

9. [24]

   Once the interrelationship between the defences of truth and contextual truth under the 2005 Act is understood, it can be seen that there is a flow on effect from a finding for the purposes of s 25 that one, or some, but not all of a plaintiff’s imputations are substantially true to the tribunal of facts consideration of the s 26(b) exercise.

10. [25]

    In Mizikovsky, Fraser JA held that a plaintiff’s imputation found to be substantially true for the purposes of s 25 was to be included in the questions submitted to the jury for consideration in the s 26(b) context, regardless of the substantial truth finding. [35] It was implicit in his Honour’s decision that the jury was to pay no consideration for the purposes of s 26 to the substantial truth finding.

11. [26]

    In rejecting the submission of the appellant (the unsuccessful plaintiff) that the trial judge should not have permitted the jury to consider for the purposes of the s 26(b) exercise the imputation he had pleaded which the jury had found to be substantially true, Fraser JA held that “no other construction is fairly open on the statutory text”. His Honour rejected the appellant’s submission that the words “defamatory imputations” in s 26(a) might be read as meaning “‘imputations giving rise to an action in defamation’ (ie a successful action)”, saying the words of s 26(a) left no real scope for that meaning. His Honour added:

12. [27]

    As is apparent, I disagree with respect, with that proposition. It does not take into consideration the fact that s 25 reproduces the common law defence of justification bringing with that the presumptions to which I have referred, including that of falsity, with consequential implications in the event of a s 25 substantial truth finding for the purposes of the s 26 defence.

13. [28]

    It is also not apparent that the proposition I have formulated was advanced in Mizikovsky. I agree with Fraser JA that the proposition the appellant in Mizikovsky was clearly advancing, that a substantially true plaintiff’s imputation “disappeared” for contextual truth purposes, was incorrect.

14. [29]

    However, for the reasons I have explained, to the extent that Mizikovsky assumes that the jury is directed to ignore the effect of a substantially true plaintiff’s imputation in considering the s 26(b) exercise, in my view, I would respectfully disagree with that approach.

15. [30]

    The question of how a substantially true plaintiff’s imputation could be taken into account for s 26(b) purposes, otherwise than by being pleaded back by a defendant, did not arise in Kermode which concerned a pleading point.

16. [31]

    As I said in Abou-Lokmeh v Harbour Radio Pty Ltd: [37]

17. [32]

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

18. [33]

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

19. [34]

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

20. [35]

    MEAGHER JA: I have had the benefit of reading in draft the judgment of Gleeson JA. I agree that leave should be granted and the appeal dismissed with costs: for the reasons given by his Honour in relation to the striking out of particulars relied on in mitigation of damage; and for the following reasons in relation to the remaining and principal question.

21. [36]

    That question is whether a plea of contextual truth under Defamation Act 2005 (NSW), s 26 may adopt, as contextual imputations, those of the imputations pleaded by a plaintiff that are subsequently found to be carried, defamatory and “substantially true”. The answer to that question turns on the interpretation of the following provisions appearing in that Act (and other uniform defamation laws):

22. [37]

    Under the uniform defamation laws, as at common law, the cause of action for defamation consists in the publication of defamatory matter of and concerning a person: 2005 Act, s 8. By contrast, under the Defamation Act 1974 (NSW), each defamatory imputation published by a matter constituted a separate cause of action. For that reason, a defendant was able to escape liability by a combination of defences, each directed to some only of those imputations, even though no single defence was satisfied in relation to all the imputations.

23. [38]

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

24. [39]

    Fairfax’s argument instead directs attention to the language used to identify the two groups of imputations by reference to which ss 25 and 26 operate. The first group is fully identified in s 25 as “the defamatory imputations carried by the matter of which the plaintiff complains”, reduced by successive ellipses in paras (a) and (b) of s 26 to “the defamatory imputations”. The second group consists of “one or more other imputations”, labelled the “contextual imputations”. These two groups are expressed to be mutually exclusive, such that no imputation may be a member of both groups simultaneously: Kermode at [79]–[80].

25. [40]

    Fairfax’s plea of contextual truth adopts as “contextual imputations” whichever of the imputations in the respondent’s second further amended statement of claim as “are found to be conveyed and defamatory” and “substantially true”. Relying on Chel v Fairfax Media Publications Pty Ltd (No 6) [2017] NSWSC 230 at [19], [42], [43] (Beech-Jones J), Fairfax submitted to the primary judge (McCallum J), and on appeal, that a defamatory imputation found to be substantially true ceases to be an imputation “of which the plaintiff complains”; that it thereby ceases to be one of the “defamatory imputations” within s 26(b); and that, for that reason, and consistently with the conclusion in Kermode, it becomes capable of being adopted by a defendant as a “contextual imputation” and treated as such by a jury undertaking the weighing exercise in s 26(b). In purported application of Kermode, the primary judge rejected that argument: Kazal v Fairfax Media Publications Pty Ltd [2017] NSWSC 44 at [35] (McCallum J). The following considerations support the correctness of her Honour’s conclusion in response to that argument.

26. [41]

    First, for the purpose of s 25, imputations found to be substantially true undoubtedly remain “defamatory imputations carried by the matter”. That much is necessary for the continued operation of that provision. So far as possible, the corresponding language in s 26, a successive and “complementary” provision, should be given the same meaning: see Registrar of Titles (WA) v Franzon (1975) 132 CLR 611, 618 (Mason J, Barwick CJ and Jacobs J agreeing).

27. [42]

    Secondly, the references to defamatory imputations of which “the plaintiff complains” direct attention to the plaintiff’s pleaded claim for relief, rather than to that claim as affected by subsequent factual findings. In the Explanatory Note to the Defamation Bill 2005, the outline of cl 26 describes the defamatory imputations of which a plaintiff “complains” as those “the plaintiff has chosen to proceed with”, plainly a reference to the final form of pleading as pressed: see the extract in Kermode at [35]. If the position were otherwise, the availability of the defence urged by Fairfax would depend on there being a finding of substantial truth made before the final formulation and determination of a plea of contextual truth: Judgment [34].

28. [43]

    Thirdly, a bare finding as to the substantial truth of some only of a plaintiff’s defamatory imputations does not necessarily deny his or her entitlement to continue complaining of those imputations, or forensic interest in doing so. That much follows directly from the proposition that a defence of justification cannot operate pro tanto to extinguish liability in tort. In any event, the evidence available for use in quantifying damages may depend on the continuance of such a complaint: see Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 at 119–120 (Neill LJ); John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 at [47]–[52] (Handley JA, Spigelman CJ and McColl JA agreeing). It is conceivable that evidence properly admitted with respect to such an imputation may assist a plaintiff’s case as to the injury to reputation caused by another defamatory imputation. What is more, a plaintiff may appeal against the finding as to substantial truth and thereby maintain his or her complaint in law.

29. [44]

    Fourthly, although the argument made by Fairfax was not in terms addressed by Kermode or Mizikovsky, its rejection for the reasons above is wholly consistent with the analysis in each: see especially Kermode at [78]–[81]; Mizikovsky at [14]–[18]. In my view, those authorities are also entirely consistent with one another. Read with [47], [50] and [78]–[80], McColl JA’s observations in Kermode at [86(c)] and [86(d)] do nothing more than identify pleas in mitigation of damages based on substantial truth and the defence under s 26 as available “courses of action” for a defendant. The assertion of any such inconsistency could not justify a refusal to follow and apply Mizikovsky: cf Chel at [37].

30. [45]

    Finally, Fairfax’s argument was not addressed by this Court in Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369, in which there was no issue as to the construction or application of s 25 or s 26. The primary issue concerned the admissibility and use of expert evidence relevant to the substantial truth of defamatory imputations pleaded by the plaintiff. In considering the defendant’s plea of contextual truth, the trial judge (Adamson J), sitting without a jury, had proceeded on the assumption (contrary to her findings in fact) that four defamatory imputations were carried, only one of which was not substantially true, and two further, contextual imputations were carried and substantially true. And her Honour found that this defence would have been made out irrespective of whether the three true plaintiff’s imputations were included as “defamatory imputations” within s 26(b). As recorded in the judgment on appeal in Born Brands at [88]–[90], the issue between the parties related to the expert evidence, and neither party sought to “expose any inconsistency in the authorities”. Accordingly, Basten JA’s tentative observations at [80]–[87] concerning the 2005 Act, ss 25 and 26, Kermode and Mizikovsky are merely that, and not a binding part of that decision.

31. [46]

    Whilst agreeing that the primary judge did not err in rejecting the construction of ss 25 and 26 urged by Fairfax, McColl JA at [22]–[34] above advances a construction of s 26(b) which would require the trier of fact to take account of any earlier finding as to the substantial truth of a plaintiff’s imputation in undertaking the comparative exercise called for by that subsection. Whether s 26(b) operates in that way was not in issue or the subject of argument in this appeal. For that reason, this is not an occasion for considering whether any proposition to the contrary in Mizikovsky should not be followed. Furthermore, the following textual consideration would at least cause me to hesitate before so holding.

32. [47]

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

33. [48]

    GLEESON JA: The applicants, Fairfax Digital Australia & New Zealand Pty Limited and two journalists, Mr Linton Besser and Ms Kate McClymont (together Fairfax), seek leave to appeal from the decision of McCallum J in Oscar Kazal v Fairfax Media Publications Pty Ltd [38] striking out both the defence of contextual truth and the particulars Fairfax pleaded in mitigation of damages.

34. [49]

    Fairfax complains about her Honour’s conclusion that it is not open to a defendant relying upon the defence of contextual truth as provided by s 26 of the Defamation Act 2005 (NSW) (the 2005 Act), to contingently “plead back” the plaintiff’s imputations (insofar as they are found to be substantially true) as part of that defence. Fairfax also complains about her Honour’s conclusion that certain reputation particulars do not properly stand as particulars of mitigation of damages and should be struck out.

35. [50]

    As these orders are interlocutory, Fairfax requires leave to appeal. [39] Mr Kazal opposed the grant of leave.

36. [51]

    Appellate courts exercise particular caution in reviewing interlocutory rulings in matters of practice and procedure. [40] However, it may be accepted, as Fairfax submitted, that the striking out of the contextual truth defence raises a question of principle as to the proper construction of s 26 of the 2005 Act and whether this Court’s decision in Fairfax Media Publications Pty Ltd v Kermode [41] governs the manner in which that defence may be relied upon in the course of the trial. Leave should be given in respect of this question.

37. [52]

    As to the striking out of the mitigation particulars, Mr Kazal drew attention to the terms of the defence which Fairfax subsequently filed on 15 March 2017. This defence included as particulars of the honest opinion defence all of the particulars of mitigation of damages which were struck out by the primary judge, and then pleaded (by incorporation) as particulars of mitigation of damages the new particulars of honest opinion. (It is not apparent whether Fairfax obtained the prior leave of the Court to introduce these new matters.)

38. [53]

    Mr Kazal submitted that it is premature for this Court to deal with a question about striking out the particulars of mitigation when those very particulars are now the subject of a fresh strike out application by Mr Kazal before the primary judge. [42] Fairfax responded that if the Court were to grant leave and uphold the appeal in relation to the striking out of particulars of mitigation of damages, then the defence, as it previously stood, would be reinstated. [43]

39. [54]

    Given that the matter has been fully argued and a determination may assist the resolution of the fresh pleading disputes below, leave to appeal should also be given in respect of this question.

Background

1. [55]

   The proceedings arise out of the publication of two articles in the on-line edition of the Sydney Morning Herald, one headed “Bad company” on 19 March 2013 (the author of which is the third defendant, Mr Besser) and the other headed “Where angels fear to tread” on 4 May 2013 (the author of which is the fourth defendant, Ms McClymont). Both articles identify the plaintiff, Mr Oscar Kazal, as the person who is the subject of the articles.

2. [56]

   The issues between the parties are contained in the second further amended statement of claim filed 10 May 2016, the defence filed 8 June 2016 and the reply filed 25 July 2016.

3. [57]

   In respect of the first article, Mr Kazal pleaded in par 13 of his claim that the publication carried the following imputation:

4. [58]

   In response to the first matter complained of, Fairfax pleaded denials; defences of qualified privilege under s 30 of the 2005 Act; honest opinion under s 31 of the 2005 Act; and pleas in bar. Fairfax does not rely upon any defence of justification under s 25 of the 2005 Act, or contextual truth under s 26 of the 2005 Act in relation to the first matter complained of.

5. [59]

   In respect of the second article, Mr Kazal pleaded in par 16 of his claim that the publication carried the following seven imputations:

6. [60]

   In response to the second matter complained of, Fairfax pleaded denials; defences of justification under s 25 of the 2005 Act and at common law (but only in relation to the imputations pleaded in par 16(a), (d), (e) and (g) of the claim); qualified privilege under s 30 of the 2005 Act; honest opinion under s 31 of the 2005 Act; and pleas in bar. In addition, Fairfax pleaded (in par 15(b)) a defence of contextual truth under s 26 of the 2005 Act as follows (emphasis in original):

7. [61]

   In the alternative, Fairfax pleaded (in pars 19 and 20) a number of matters to support its contention that if Mr Kazal had suffered any damage as a result of the publication of either the first or second matter complained of, any damages he was awarded should be mitigated by the matters there particularised. The matters particularised in par 20 of the defence (set out over 25 pages) were said to be directly relevant to the contextual background against which the allegedly defamatory statements were made.

8. [62]

   In his reply, Mr Kazal pleaded malice by Fairfax and gave as particulars the excessive number of articles that Fairfax wrote about him amounting, it was asserted, to a malicious campaign from September 2010 to date. The particulars of that plea identified 30 articles, which included the two articles the subject of these proceedings.

9. [63]

   Mr Kazal applied to strike out Fairfax’s contextual truth defence in par 15(b) of the defence. He also applied to strike out whole of the mitigation particulars on the basis of relevance as they concerned Mr Kazal’s family, not Mr Kazal himself.

Relevant legislative provisions

1. [64]

   The objects of the 2005 Act are stated in s 3 to be:

2. [65]

   Section 6 of the 2005 Act provides that the Act does not affect the operation of the general law in relation to the tort of defamation except to the extent that the Act provides otherwise (whether expressly or by necessary implication): s 6(2). Section 6(3) provides that the general law from time to time applies for the purposes of the 2005 Act as if the earlier legislation in the Defamation Act 1958 (NSW) and the Defamation Act 1974 (NSW) had never been enacted.

3. [66]

   Sections 8, 25 and 26 of the 2005 Act provide:

4. [67]

   The term “substantially true” is defined in s 4 to mean “true in substance or not materially different from the truth”.

5. [68]

   Section 22 deals with the respective roles of the tribunal of fact (where there is a jury) and the judge, and relevantly provides:

6. [69]

   Section 34 of the 2005 Act provides that in determining the amount of damages to be awarded in any defamation proceedings, the Court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded.

7. [70]

   By s 38(1) of the 2005 Act, evidence is admissible on behalf of the defendant in mitigation of damages, for the publication of defamatory matter in relation to the following matters:

8. [71]

   Section 38(2) provides that nothing in s 38(1) operates “to limit the matters that can be taken into account by a court in mitigation of damages”.

Pleading rules

1. [72]

   The Uniform Civil Procedural Rules 2005 (NSW) (UCPR) deal with pleading of defamation defences generally. UCPR, r 14.31 provides:

2. [73]

   This rule requires all defences to be specifically pleaded, except to the extent that the rules otherwise permit an abbreviated form of pleading that refers to a recognised ground of defence.

3. [74]

   UCPR, r 14.33 deals with the defence of contextual truth and provides:

4. [75]

   Neither party sought to make any point that the terms of the pleading rules in UCPR, rr 14.31(2)(b) and 14.33(2)(c) were inconsistent with the terms of s 26 of the 2005 Act, in that the rules seems to assume that the defence of contextual truth is pleaded to each defamatory imputation, rather than the defamatory matter.

A. Striking out defence of contextual truth

1. [76]

   The primary judge concluded that par 15(b) of the defence should be struck out because it failed to plead a defence within s 26 of the 2005 Act. Her Honour held that the plea of contextual truth was inconsistent with this Court’s decision in Kermode that it is impermissible for a defendant to “plead back”, as a contextual imputation, defamatory imputations of which the plaintiff complains. Her Honour viewed Kermode as not confined to a pleading point but as governing the course of the trial. According to this view, an imputation sued upon by a plaintiff but proved true by the defendant may only be relied upon in mitigation of damages, and may not be relied upon for the purpose of the defence of contextual truth under s 26 of the 2005 Act.

2. [77]

   Her Honour rejected Fairfax’s submission that two later decisions of this Court [44] – Born Brands and Balzola - permit a defendant to contingently rely at trial upon the plaintiff’s imputations (insofar as they are found to be substantially true) as part of the defence of contextual truth, and not only by way of mitigation of damages.

3. [78]

   Her Honour noted at [25] that Born Brands, and the decision of the Queensland Court of Appeal in Mizikovsky v Queensland Television Ltd [45] (discussed by Basten JA in Born Brands), were not directed to the precise issue raised in the present case because in those cases the defendant had a permissible plea of contextual truth, that is, one which specified contextual imputations additional to those relied upon by the plaintiff, rather than only relying, contingently, upon the plaintiff’s imputations. After referring to the remarks of Basten JA in Born Brands at [86], her Honour continued at [28]:

4. [79]

   Her Honour observed at [29] that Balzola involved the refusal of an application for leave to appeal, and did not address the complexity of how the separate tasks of determining the contextual truth defence (to be determined by the jury) and a defendant’s reliance on true imputations to mitigate damages (which are to be assessed by the judge) are to be undertaken “holistically”, as suggested by Basten JA in Born Brands.

5. [80]

   In concluding that Fairfax’s argument overlooked the significance of the statutory division of roles between the judge and the jury, her Honour said at [34]-[35]:

Grounds of appeal – contextual truth defence

1. [81]

   The five grounds of appeal directed to the contextual truth defence are connected. Grounds 1, 3, 4 and 5 each raise the proper construction of s 26. Ground 2 raises a narrow point - whether Kermode is limited to a pleading point.

2. [82]

   Ground 1 contends that her Honour erred in holding that Kermode precluded a contingent pleading of the kind proposed by Fairfax. Grounds 3, 4 and 5 reflect Fairfax’s argument on construction of s 26. Ground 3 contends that her Honour erred in failing to find that an imputation pleaded by a plaintiff, which is found to be true, ceases to be one of the defamatory imputations "of which the plaintiff complains" for the purpose of s 26(a) of the 2005 Act.

3. [83]

   Ground 4 contends that her Honour erred in failing to find that an imputation pleaded by a plaintiff which is found to be true, may be relied upon by a defendant as an "other", contextual, imputation for the purpose of s 26(b) of the 2005 Act.

4. [84]

   Ground 5 is related and contends that her Honour erred in holding that Kermode governs the course of the trial, such that a true plaintiff’s imputation may only be relied upon in mitigation of damages and may not be relied upon for the purpose of the defence of contextual truth under s 26.

The parties’ submissions

1. [85]

   Fairfax did not submit that Kermode was wrongly decided. [46] To have done so they would have needed leave to reopen the correctness of that decision, which they did not seek to do. Instead, Fairfax sought to distinguish Kermode by arguing that it is limited to a pleading point. On this reading, the submission continued, Kermode does not govern the course of the trial with respect to a defence of contextual truth under s 26.

2. [86]

   Fairfax acknowledged in argument that the difference between impermissible pleading back and a contingent pleading may be a ‘‘semantic”. Nevertheless, Fairfax characterised the defence in par 15(b) as “a contingent notification of the stance that will be taken at trial. [47]

3. [87]

   Fairfax submitted that Kermode did not decide the fate at trial of a “true plaintiff’s imputation” [48] for the purposes of s 26(b). Fairfax accepted that this issue had been decided in Mizikovsky, but submitted that the construction of s 26(b) in Mizikovsky is “plainly wrong” and should not be followed.

4. [88]

   The construction of s 26 for which Fairfax contends, adopted the reasoning of Beech-Jones J in Chel v Fairfax Media Publications (No 6). [49] Fairfax submitted that s 26(a) is to be read as containing a temporal condition that a defamatory imputation ceases to be one “of which the plaintiff complains” if the tribunal of fact finds the imputation substantially true (for the purposes of the justification defence under s 25). According to the submission, a true plaintiff’s imputation is capable of being an “other imputation” for the purposes of s 26(a). On this approach, an imputation of which the plaintiff complains that is found by the tribunal of fact to be conveyed, defamatory and substantially true, is “lost” to the plaintiff for the purposes of s 26, and contrary to the reasoning in Mizikovsky, remains lost when addressing the further harm issue in s 26(b).

5. [89]

   Fairfax argued that there is no basis in principle why, for the purposes of the s 26 defence, a plaintiff ought to be able to rely upon a true plaintiff’s imputation on the question of whether the defamatory imputations do not further harm the reputation of the plaintiff because of the contextual imputations which are proven to be substantially true. Fairfax accepted that this may sometimes involve or require a two-stage process by the jury in carrying out of its task as the tribunal of fact. However that is no reason, Fairfax submitted, to reach a different conclusion as to the operation of s 26.

6. [90]

   Fairfax submitted that the primary judge’s decision concerning what would be permitted at trial has the effect that the underlying rationale of the contextual truth defence will be significantly weakened. According to the submission, where some, but not all, of the plaintiff’s imputations have been proved substantially true, the defendant should not be limited to a plea in mitigation of damages. That result was described by Fairfax as both “unfair” and “grotesque”. [50]

7. [91]

   In oral argument, Fairfax submitted that “an imputation can change from being one of which the plaintiff complains to being one of which the plaintiff can no longer complain.” [51] While candidly accepting that this argument involved the “transmogrification” at trial of a plaintiff’s imputation to a contextual imputation for the purposes of s 26(a), [52] Fairfax submitted that it should be permissible to formulate some way in which this construction of s 26 can be pleaded. The contingent pleading relied upon in this case was advanced by Fairfax as providing that means. [53]

8. [92]

   Fairfax also accepted that the taxonomy of its argument assumed a differential operation of s 26 if no justification defence was pleaded under s 25. [54] That followed, Fairfax acknowledged, because in the absence of the s 25 defence being pleaded the issue of substantial truth would only arise under s 26(b) with respect to the contextual imputations and not the defamatory imputations of which the plaintiff complains.

9. [93]

   Mr Kazal sought to uphold the reasoning of the primary judge. He submitted that the construction of s 26(a) of the 2005 Act in Chel is wrong and, in any event, the primary judge’s reasoning does not depend on the correctness of the decision in Mizikovsky with respect to s 26(b).

10. [94]

    Mr Kazal further submitted that whether a plaintiff can rely upon a true plaintiff’s imputation in the weighing exercise under s 26(b) is distinct from whether a defendant can rely on such an imputation. While Mr Kazal suggested that there is a third possibility - that a true plaintiff’s imputation does not count on either side of the so-called s 26(b) “equation” - he submitted that the primary judge did not err in the present case because there is no textual basis for counting a true plaintiff’s imputation on the defendant’s side of the s 26 “equation”. That is, a plaintiff’s imputation found to be substantially true, does not change character or “transmogrify” to a contextual imputation for the purposes of s 26.

Contextual truth defence

1. [95]

   It is not in dispute that the defences in ss 25 and 26 operate in the context that the publication of defamatory matter is now the basis of a cause of action in defamation, unlike the position under s 9(2) of the Defamation Act 1974 (NSW) (1974 Act) where the basis was the publication of a defamatory imputation.

2. [96]

   The defence of justification under s 25 is established by the defendant proving “that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true”. It is well-established that the defence of justification under s 25 and at common law operates on an all or nothing basis, that is, all the defamatory imputations must be proved to be true. [55] Fairfax did not argue to the contrary. [56]

3. [97]

   The defence of contextual truth under s 26, also takes as its starting point “the defamatory imputations of which the plaintiff complains”, but s 26 operates differently to s 25. First, a contextual imputation must be carried by the matter complained of “in addition” to the defamatory imputations of which the plaintiff complains (s 26(a)). A contextual imputation must differ in substance from the plaintiff’s defamatory imputations. [57]

4. [98]

   Second, by its terms, the defence is established if the contextual imputations are substantially true (s 26(a)), and if the plaintiff’s defamatory imputations “do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations” (s 26(b)). The requirement to prove no further harm to the plaintiff’s reputation focuses on the facts, matters and circumstances which establish the substantial truth of the contextual imputations. [58]

5. [99]

   The defence of contextual truth has been described as a statutory supplement to enable a defendant to prove a complete defence based on the truth of a more substantial sting in the publication than other sting(s) that the plaintiff has chosen to complain of but which the defendant may not be able to prove to be true substantially. [59]

6. [100]

   In Abou-Lokmeh v Harbour Radio Pty Ltd, [60] McColl JA referred with approval to the statement by McCallum J in McMahon v John Fairfax Publications Pty Ltd (No 3) [61] that “the defence [of contextual truth] does not compare imputation with imputation. [Its] essence … is to permit the defendants to put the plaintiff’s imputations in their factual context according to the content of the whole of the article”.

7. [101]

   Third, the history of the enactment of the 2005 Act and, in particular s 26, was surveyed by McColl JA in Kermode. [62] Reference was made to the Explanatory Memorandum and the Second Reading speech [63] . It is not necessary to repeat that history. It is sufficient to note that McColl JA observed that the language of s 26 of the 2005 Act is different from the defence of contextual truth in s 16 of the 1974 Act, and s 26 is set in a different statutory context. As indicated, the publication of defamatory matter is now the basis of the cause of action under the 2005 Act (s 8), unlike the position under the 1974 Act (s 9(2)) where the basis was the publication of defamatory imputations. McColl JA expressed similar remarks concerning the differences between s 16 of the 1974 Act and s 26 of the 2005 Act in Fairfax Media Publications Pty Ltd v Zeccola. [64]

8. [102]

   Kermode involved a separate trial under UCPR, r 28.2 of certain questions raised by a strikeout application in respect of a contextual truth defence. (The terms of those questions are not reproduced in the judgment of the trial judge.) The defendant had “pleaded back” the plaintiff’s imputations and three further contextual imputations by way of a defence of contextual truth under s 26. The trial judge (Simpson J) described this form of pleading back as follows: [65]

9. [103]

   Simpson J concluded that the defence of contextual truth provided by s 26 of the 2005 Act did not permit a defendant to “plead back” any or all of a plaintiff’s imputations. That decision was upheld by this Court in Kermode (McColl JA, Beazley JA and Giles JA agreeing).

10. [104]

    The reasons of McColl JA [66] may be summarised as follows. The defence of contextual truth in s 26 must defeat the whole defamatory matter of which the plaintiff complains, the publication of which is the plaintiff’s cause of action. The focus of the defence of contextual truth is on comparing the defendant’s contextual imputations with the plaintiff’s cause of action. The use of the definite article in both sub-paragraphs of s 26 (“the defamatory imputations”) focuses attention on the plaintiff’s imputations as a group and emphasises that the defence has to respond to all those imputations (being the plaintiff’s cause of action). The words “in addition to” in s 26(a) cannot be construed as including imputations pleaded by the plaintiff. Further, the structure of the 2005 Act and the language of s 26 belie any legislative intention to allow the “pleading-back” practice which had prevailed under s 16 of the 1974 Act to continue under the 2005 Act.

11. [105]

    McColl JA summarised the courses of action open to a defendant seeking to justify defamatory matter under the 2005 Act as follows: [67]

12. [106]

    Contrary to Fairfax’s submissions which adopted the remarks of Beech-Jones J in Chel, [68] I do not read the introductory words (“to the extent”) in [86(d)] of Kermode as suggesting an acceptance that the “defamatory imputations of which the plaintiff complains” in s 26 are only those of the plaintiff’s imputations which are found to be conveyed, defamatory but not substantially true. On a fair reading and given the context of her Honour’s remarks, those introductory words should be taken as only intending to address whether or not the justification defence under s 25 has been made out, being that to which McColl JA had referred in the immediately preceding sub-par [86(c)].

13. [107]

    Insofar as McColl JA left open in Kermode the question of whether an “alternative” meaning pleaded by the plaintiff can be pleaded by the defendant as a contextual imputation, that does not assist Fairfax’s argument. As McColl JA noted, this would depend upon whether the plaintiff’s alternative imputation answers the description in s 26(a) of “the defamatory imputations of which the plaintiff complains”, given the requirement in s 26(a) that a contextual imputation needs to be “in addition to” the imputations pleaded by the plaintiff. McColl JA said: [69]

14. [108]

    Fairfax submitted that these remarks of McColl JA support their argument that s 26 permits a pleading of a defence which contingently “adopts” and seeks to establish the substantial truth of the plaintiff’s imputations. I do not agree. In my view, McColl JA was suggesting, without deciding, a different point. That point was that an “alternative” imputation might not answer the description in s 26 of an imputation “of which the plaintiff complains”, if the jury finds that one imputation is conveyed (and is defamatory) and hence does not need to consider whether an alternative imputation is conveyed and is defamatory because that allegation has, in effect, been abandoned by the plaintiff.

15. [109]

    In Mizikovsky, the Queensland Court of Appeal [70] rejected the challenge to the trial judge’s instructions to the jury that when they considered the s 26 defence, they should take into account all of the defamatory imputations complained of by the appellant, including those which the jury found to be substantially true.

16. [110]

    After noting that the trial judge had adopted the literal meaning of s 26, namely, it requires the defendant to prove that “the defamatory imputations” – meaning all of the imputations of which the plaintiff complains – do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations, [71] Fraser JA observed that the literal meaning of s 26 was adopted by this Court in Kermode in holding that a defendant is not able to “plead back” a plaintiff’s defamatory imputation in a defence of contextual truth. [72]

17. [111]

    Fraser JA rejected the appellant’s argument that absurd results would flow from the literal construction of s 26, and concluded that no other construction is fairly open on the statutory text, giving the following reasons (citations omitted). [73]

18. [112]

    Fraser JA concluded: [74]

19. [113]

    In Born Brands, Basten JA observed [75] that there appeared to be confusion within the cases dealing with the operation of s 26. Basten JA remarked that on one view, the judgment of this Court in 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. [76] After referring to the summary of the courses available to a defendant as set out in Kermode, [77] Basten JA said: [78]

20. [114]

    Basten JA then referred to Mizikovsky and the unsuccessful attempt by the appellant/plaintiff in that case to exclude from the jury’s consideration of the contextual imputations all of the defamatory imputations which he had pleaded but which had been proved to be substantially true, and remarked [79] (emphasis added):

21. [115]

    Basten JA did not find it necessary to express any final view on these issues since neither party had sought to expose any inconsistency in the authorities. [80]

22. [116]

    Two things should be said immediately about Born Brands. First, the remarks of Basten JA concerning the possible operation of the justification and contextual truth defences in ss 25 and 26 were tentative, plainly obiter and are not binding on this Court.

23. [117]

    Second, the construction of those defences did not arise on the appeal in Born Brands. In that case, the plaintiff had complained of four allegedly defamatory imputations (a), (b), (c) and (d). The defendant had pleaded a defence of justification under s 25 to imputations (b), (c) and (d), and two further contextual imputations as a defence under s 26. The trial judge, Adamson J, found that none of the plaintiff’s imputations were carried, but went on to deal with the additional issues. Her Honour found that, if carried, none of the imputations were not defamatory; that if carried and defamatory, the defendants had established the justification defence to imputations (b), (c) and (d); that the first contextual imputation was not carried, but if carried was substantially true, and that the second contextual imputation was substantially true. [81]

24. [118]

    While Adamson J declined to follow the trial judge’s decision in Mizikovsky and expressed a preference for the approach in McMahon v John Fairfax Publications Pty Limited (No. 6) [82] when dealing contingently with the contextual truth defence, her Honour went on to find that the defence of contextual truth would have been established even if all of the plaintiff’s imputations (including the true plaintiff’s imputations) were taken as a whole and weighed in the balance as “defamatory imputations” within s 26(b). [83] The correctness of those different approaches, was not in issue on appeal in Born Brands.

25. [119]

    Balzola does not take the matter any further. It involved an unsuccessful application for leave to appeal from a decision of the District Court judge striking out two contextual imputations from the defence in circumstances where the plaintiff had successfully obtained leave to amend to re-plead the contextual imputations (originally pleaded in the defence) as plaintiff’s imputations. That is, the plaintiff had successfully appropriated the defendant’s contextual imputations. The remarks of Emmett JA and Sackville AJA that it is arguable in light of the observations of Basten JA in Born Brands that, even if a defendant cannot plead any of the plaintiff’s imputations as a contextual imputation, the defendant may still be able to rely on the truth of those imputations as “overwhelming” any imputations not proved to be true, were obiter. [84]

26. [120]

    Chel involved rulings given in the course of a trial, where the parties had agreed that there should be two phases of the jury’s deliberations with respect to defences. The defendants had given notice to the plaintiff by letter well in advance of the trial, that they would seek to deploy such of the plaintiff’s imputations as were found to be substantially true as part of the defence of contextual truth. [85] A jury had found four of seven pleaded imputations were conveyed and were defamatory, and that two of these four imputations were substantially true. Beech-Jones J ruled that in the second phase of the jury’s deliberations, in addition to one contextual imputation that had been pleaded by way of defence, the two defamatory imputations which had been found by the jury to be true could also be considered by the jury as contextual imputations when applying s 26(b).

27. [121]

    After reviewing the decisions of this Court in Kermode, Born Brands and Balzola, as well as the decisions of the trial judge (Dalton J) in Mizikovsky v Queensland Television Ltd & Ors (No 3), [86] and the Queensland Court of Appeal in Mizikovsky, Beech-Jones J remarked that the judgments are not easily reconciled. [87] Beech-Jones J considered that the approach stated in Mizikovsky was problematic because it was not contended for by either party before his Honour, before expressing the view that Mizikovsky is “plainly wrong”. [88]

28. [122]

    The reasoning of Beech-Jones J may be summarised as follows. [89] Kermode is binding authority for a construction of s 26(a) that precludes an imputation from simultaneously being both a “defamatory imputation of which the plaintiff complains” and “one or more other imputation … that [is] substantially true”. However, as Kermode was directed to an argument at the pleading stage, it could not, and did not, address whether the proper construction of s 26(a) is such that, once an imputation has been found to be substantially true, it can no longer be an imputation of which the plaintiff complains. The text of s 26 does not contemplate the existence of a defamatory imputation found to be substantially true that is neither a “defamatory imputation of which the plaintiff complains” nor “[an]other imputation .. that [is] substantially true”. A defamatory imputation found to be substantially true must be one or the other. While the word “complains” is not defined, nothing in the text of s 26 suggests that the imputations of which a plaintiff complains are fixed from the moment they are pleaded. Preference should be given to a construction of s 26 which enables the jury to consider whether the truth of the facts, matters and circumstances affecting a plaintiff’s reputation is such that no further harm is done to his or her reputation by the publication of defamatory imputations not shown to be true. Further, there is no rational reason for allowing a plaintiff to rely on a set of damning imputations they pleaded that were also found to be true to defeat a defence of contextual truth.

Ground 2: What did Kermode decide?

1. [123]

   It is convenient first to address the narrow point raised by ground 2, whether Kermode is limited to a pleading point.

2. [124]

   In my view, Kermode establishes that for the purpose of pleading a defence of contextual truth, s 26(a) of the 2005 Act precludes an imputation from being both a “defamatory imputation of which the plaintiff complains” and “one or more other imputation … that [is] substantially true”. Kermode makes it is impermissible for a defendant to ‘plead-back’ imputations of which the plaintiff complains as an anticipatory measure, that is, anticipating the findings of the tribunal of fact in relation to any defence of justification under s 25.

3. [125]

   It can be accepted, as Basten JA said in Born Brands, [90] that on one view the judgment of this Court in 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.

4. [126]

   On the other hand, as Mr Kazal submitted, the striking out of the ‘pleading-back’ defence in Kermode involved a question of substantive law which informed the approach to the pleading. Of necessity, the decision in Kermode involved the proper construction of s 26. But what reasoning was essential in Kermode for this Court’s decision to uphold the trial judge’s decision to strike out the pleading-back defence? In my view, the ratio of Kermode is confined to a pleading point.

5. [127]

   That the construction of s 26 which informed the approach to the pleading in Kermode also governs the course of trial seems to be implicit in the summary in Kermode at [86]. However, insofar as Kermode is to be read as stating the operation of s 26 at trial, I respectfully consider that those remarks are strictly obiter. They were not necessary for the decision under appeal in Kermode.

6. [128]

   It follows that I would uphold ground 2. In my view, accepting that the remarks in Kermode deserve appropriate deference, Kermode is not determinative of what is permissible at trial with respect to a defence of contextual truth.

Grounds 2, 3 and 4: Construction of s 26

1. [129]

   In accordance with the established principles of statutory construction, it is necessary to begin with a consideration of the text. In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) the plurality stated [91] that construction must begin with a consideration of the text itself and that the language which has been actually employed in the text is the surest guide to legislative intention. The plurality also stated that the meaning of the text may require consideration of the context which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.

2. [130]

   In SZTAL v Minister for Immigration, [92] the plurality emphasised the importance of considering the text in context when making the following remarks:

3. [131]

   It is also necessary to keep in mind the remarks of the plurality in Project Blue Sky Inc v Australian Broadcasting Authority: [93]

4. [132]

   As is apparent from the authorities referred to above, s 26 has given rise to difficulties of construction. The difficulty with the meaning of the words in s 26(a) (“the defamatory imputations of which the plaintiff complains”) flows through the meaning to be given to the abbreviated words in s 26(b) (“the defamatory imputations”).

5. [133]

   Starting with s 26(a), this provision focuses attention on the imputations carried by the matter and draws a distinction between the “defamatory imputations” carried by the matter of which the plaintiff “complains” and the substantial truth of “other” imputations carried by the matter “in addition” to the plaintiff’s imputations.

6. [134]

   Acceptance of Fairfax’s transmogrification argument involves the proposition that the imputations which meet the meaning of the phrase “defamatory imputations of which the plaintiff complains” (s 26(a)), may change at trial depending upon the findings of the tribunal of fact.

7. [135]

   That construction has little textual support. While the word “complains” is not defined in the 2005 Act, it is difficult to identify a basis for giving a temporal condition to the operation of s 26(a) in the manner contended for by Fairfax. Against this, there are a number of pointers the other way.

8. [136]

   First, starting with the text I agree with the remarks of Fraser JA in Mizikovsky [94] that the words “defamatory imputations” in s 26(a) convey nothing about the truth or falsity of those imputations, as appears also from the use of the same words in s 25.

9. [137]

   Second, acceptance of a temporal condition in s 26(a) would involve giving the word “complains” a different meaning in s 26(a) to the same word in s 25. For the purpose of the defence of justification under s 25, imputations found to be substantially true remain “defamatory imputations carried by the matter of which the plaintiff complains”. That is necessary for the continued operation of the defence of justification. In s 26(a), the same word is used (“complains”) in the expression “plaintiff complains” to refer to a complaint. That language more naturally directs attention to the plaintiff’s complaint set forth in the statement of claim, rather than subsequent determinations by the tribunal of fact of the substantial truth of the plaintiff’s imputations in a different context, under s 25.

10. [138]

    That the word “complains” should be read in the same way in ss 25 and 26 is consistent with the ordinary principles of statutory construction which require that an Act be construed so far as possible to give the same meaning to the same words wherever those words appear in the statute. [95]

11. [139]

    Third, I find no support in the text of s 26 for the argument that an imputation ceases to be one “of which the plaintiff complains” (s 26(a)) if it is found by the tribunal of fact to be substantially true in the context of a different defence (s 25) which, by hypothesis, has failed. If that is what the 2005 Act meant it did not say so.

12. [140]

    There is a related difficulty with Fairfax’s argument. It requires giving s 26 a differential operation depending on whether the defendant pleads a justification defence under s 25. That involves reading words of limitation into s 26, and ignores that the words “defamatory imputations” in s 26(a) refer more naturally to the plaintiff’s complaint set forth in his or her pleading.

13. [141]

    Fourth, the submission that the result of the primary judge’s construction is “unfair” and “grotesque” for a defendant, should be rejected. That a defendant cannot deploy a ‘pleading-back’ defence, as was available under the 1974 Act, reflects the different language of s 26 of the 2005 Act to s 16 of the 1974 Act, and the different statutory context of the 2005 Act. As Basten JA observed in Born Brands, [96] the construction of (largely) uniform national legislation will not generally be affected by earlier legislation operating only in one state.

14. [142]

    That a defendant might be better placed in defending a defamation claim under s 26 if the plaintiff’s imputations that meet the meaning in s 26(a) may change at trial is hardly unfair. For the purpose of the justification defence under s 25, the substantial truth of some of the defamatory imputations carried by a matter (partial justification) does not extinguish liability for the cause of action in tort, though it may be relevant to mitigation of damages, for example, to justify particular imputations concerning a relevant sector of the plaintiff’s life. [97] Similarly, there is no reason why the same use should not be made in assessing damages of evidence led in support of a failed defence based on the truth of contextual imputations. [98]

15. [143]

    That the reform in the uniform Defamation Acts in 2005 could have gone further and permitted the defendant to plead back the plaintiff’s imputations by way of a defence of contextual truth, as had been permissible in New South Wales under the 1974 Act, does not assist Faifax’s argument. As Fraser JA observed in Mizikovsky, [99] s 26 represents a significant reform of the defamation law for all jurisdictions other than New South Wales which had no contextual truth defence. [100]

16. [144]

    Fifth, it is not to the point that the summary propositions set out in Kermode at [86] were not intended as an exhaustive statement of the courses available to a defendant. That is, other defences are available in appropriate cases. [101] But that does not detract from the appropriateness of a sequential approach by the tribunal of fact where defences are pleaded under ss 25 and 26.

17. [145]

    Sixth, Fairfax’s challenge to the decision in Mizikovsky did not squarely address the Marlborough Gold principle. In Australian Securities Commission v Marlborough Gold Mines Ltd [102] a case involving the proper construction of the Corporations Law (Cth), then uniform state law, the High Court said:

18. [146]

    In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [103] , the plurality emphasised:

19. [147]

    The meaning of the expression “plainly wrong” was considered in Gett v Tabet [104] in the context of the question as to when an intermediate appellate court ought to depart from its own decisions in relation to a matter of common law. The Court stated: [105]

20. [148]

    It is unnecessary to add to the debate in the authorities concerning how to determine whether a court is “convinced” that an interpretation is “plainly wrong”. [106] For the reasons given above, I am not persuaded that the construction of s 26(a) in Mizikovsky [107] is “plainly wrong” in the sense that that expression is used in the authorities. It follows that I respectfully consider that Chel was wrongly decided.

21. [149]

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

22. [150]

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

B. Particulars in mitigation of damages

1. [151]

   Under the heading “Mitigation of damages”, Fairfax pleaded in pars 19 and 20 of their defence certain facts and matters in mitigation of damage to Mr Kazal’s reputation, if the allegedly defamatory imputations are proven and the other defences are unsuccessful. It is not necessary to refer to the detail of the mitigation particulars in par 19, as they were not the subject of the strikeout application.

2. [152]

   The particulars in par 20 of the defence are relied on as matters directly relevant to the contextual background against which the allegedly defamatory statements were made. To provide context for what follows it is of assistance to set out in summary form the lengthy particulars pleaded in par 20 which extend over 25 pages:

3. [153]

   Some additional observations should be made. First, the particulars in pars 20.2-20.10 assert that it can be inferred from the matters referred to in pars 16.1-16.10 of the defence, that Mr Kazal:

4. [154]

   Second, no particulars are given identifying some connection between Mr Kazal with the appointment of Karl Kazal as honorary trade envoy for the NSW Government (pars 20.11-20.13).

5. [155]

   Third, one particular is given asserting that Mr Kazal was connected with Charif Kazal’s dispute with the Child Support Agency. The particular asserted that it can be inferred that Mr Kazal took an active role in this matter, including by claiming that he had loaned his brother, Charif Kazal, $31,218.76, thereby assisting Charif Kazal as part of an active plan by the Kazal family to use donations and other benefits provided to politicians to obtain an unmerited benefit (par 20.34).

6. [156]

   Fourth, one particular is given asserting that Mr Kazal was connected with the matters particularised under the heading “Andrew Kelly” and the various properties located in The Rocks. The particular asserted that Mr Kazal was involved in the running of the businesses and leasing of properties in The Rocks identified in the particulars, along with other members of the Kazal family (and stood to gain financially from the success of those businesses) (par 20.83).

7. [157]

   Fifth, one particular is given asserting that Mr Kazal was connected with Mr Kelly’s role in working for Kazal family businesses while still employed by SHFA. The particular asserted that Mr Kelly met Charif Kazal at Eastbank, at a restaurant operated by the Kazal family and at which Mr Kazal worked (par 20.87).

8. [158]

   Sixth, no particulars are given seeking to connect Mr Kazal with the matters concerning the ICAC complaint, investigation and report described as Operation Vesta (pars 20.111-20.121).

9. [159]

   Before the primary judge, Mr Kazal complained that the par 20 mitigation particulars were not about him as the plaintiff. He emphasised that the structure of the mitigation particulars made either undifferentiated allegations about the “Kazal family”, or one or more named members of the “Kazal family”, not being him as the plaintiff, or about a Kazal entity such as Kazal Bros Pty Ltd.

10. [160]

    Mr Kazal further complained that without clear particulars of why these allegations ought to mitigate the harm caused to his reputation, the particulars were nothing but a diversion and did not identify the facts, matters and circumstances as to why his reputation is to be regarded as affected by this material. Mr Kazal submitted that whatever the precise limits of proof of “background facts” to a defamatory publication (referring to Burstein v Times Newspapers Ltd) [108] , the facts sought to be proved have to be about the plaintiff and that the present particulars were not so drawn.

11. [161]

    Fairfax’s response sought to justify the par 20 mitigation particulars on the basis that their case is that the Kazal family conducted itself as a family business and accordingly the reputation particulars related to Mr Kazal as the plaintiff. Fairfax submitted that some of Mr Kazal’s brothers, including Charif Kazal, had engaged in corrupt conduct in the running of the family business, that Mr Kazal was very closely involved in the family business and “we allege a number of matters that he must have known about”. [109] Fairfax also submitted that the particulars related to the relevant sector of Mr Kazal’s life, being his close involvement in the running of the family businesses. [110]

12. [162]

    In addition, Fairfax argued that, as the mitigation particulars were also relevant to the defence of honest opinion, the striking out of the mitigation particulars would not have a substantial impact on the costs of the proceedings or the length of the trial. [111]

13. [163]

    After referring to the parties’ competing submissions as to whether the mitigation particulars concerned Mr Kazal, her Honour found (at [45]) that, so far as the particulars (in par 20.1) repeated par 16.1 to 16.10 of the defence relating to the particulars of truth, that “the Kazal family conducted itself as a family business”, that was an unhelpful exposition of the case to be put at trial by the Fairfax.

14. [164]

    Her Honour further found that while many of the particulars sought to be struck out were also relied upon in support of the honest opinion defence, that did not obviate the need to determine whether the particulars can properly stand as particulars of mitigation: at [47].

15. [165]

    Her Honour then addressed three aspects of the particulars. The first concerned the conduct of “the Kazal family” ranging from political donations, hosting politicians at restaurants, paying for or facilitating travel by politicians, and proposing the appointment of Karl Kazal as “honorary trade envoy for the NSW Government”. Her Honour found that it was unclear how any of that conduct could be visited upon the plaintiff, to his discredit. She noted that the highest the matter was put in pars 16.1-16.10 (relating to the contention that the Kazal family conducted itself as a family business) was that the plaintiff “approved of or acquiesced in” the impugned conduct: at [49].

16. [166]

    The second concerned the conduct of Mr Charif Kazal, particularly concerning a dispute with the Child Support Agency. Her Honour described this topic as “large” and its putative impact on the plaintiff’s reputation as “tenuous”: at [50].

17. [167]

    The third concerned the Kazal family’s dealings with Mr Andrew Kelly, an executive director of the Sydney Harbour Foreshore Authority (SHFA). Her Honour found that the scope of the evidence that would be introduced by these particulars was “enormous” and appeared to have nothing to do with the plaintiff beyond the contention in par 20.83 that he was “involved” in the running of “the business” and the leasing of the properties identified and that he stood (along with other members of the family) to gain financially from the success of those businesses: at [51].

18. [168]

    While accepting the need for caution before striking out particulars, her Honour found that the effect of allowing the particulars would be to introduce a wholly separate case by a “side wind”: at [52].

19. [169]

    Her Honour concluded that the basis upon which the matters particularised are capable of mitigating any damage to Mr Kazal’s reputation was “obscure” and that the material sought to be introduced was “large”: at [52]. Accordingly, her Honour struck out the mitigating particulars in par 20 of the defence.

Grounds of appeal – particulars of mitigation

1. [170]

   Fairfax contend that her Honour erred in striking out the particulars of mitigation because:

   1. (1)

      the facts particularised were directly relevant to the contextual background in which the allegedly defamatory publication came to be made, evidence of which would be admissible in assessing what damage the publication had caused Mr Kazal (ground 6).

   2. (2)

      those particulars were also relied upon for the defence of honest opinion under s 31 of the 2005 Act (ground 7).

   3. (3)

      her Honour had regard to irrelevant considerations, namely the possible scope of the evidence relevant to the particulars of mitigation, because that evidence would be admissible in any event in relation to the honest opinion defence (ground 8).

The parties’ submissions

1. [171]

   Fairfax commenced by emphasising the well-recognised need for caution in exercising the strike-out power. Fairfax submitted that evidence of particular acts of misconduct on the part of the plaintiff tending to show his or her character and disposition was admissible in mitigation of damages where the matters are directly relevant to the contextual background in which a defamatory publication came to be made [112] or where the evidence is properly before the Court on another issue as here, it was submitted, the defence of honest opinion. [113]

2. [172]

   To the extent that the mitigation particulars are not specifically directed to the plaintiff, but to the overall Kazal family, Fairfax submitted that they are so directed on the footing that the plaintiff is part of that family unit and its activities in the manner described at par 16.1 to 16.10 of the defence. To exclude these matters from consideration of the trial, the submission continued, would be to exclude directly relevant background context and to put the court at risk of assessing damages in “blinkers” in the way that Burstein and Coxon have disapproved.

3. [173]

   In oral argument, Fairfax submitted that the plea of malice by Mr Kazal is a “close variant” of Fairfax’s contention (in par 20 of their defence), that conduct engaged in by one Kazal family member is necessarily endorsed or condoned by the others. Fairfax submitted that while 28 of the 30 articles particularised by Mr Kazal in the plea of malice only refer generically either to the Kazals or the Kazal family or in some cases other specific family members, but not Mr Kazal, [114] Mr Kazal is to be taken as asserting in his reply that any article about any Kazal family member or the Kazals includes himself. [115]

4. [174]

   In seeking to uphold her Honour’s decision, Mr Kazal submitted that:

   1. (1)

      par 20 of the defence has the hallmarks of a “roving inquiry”, containing 121 sub-paragraphs over 25 pages, making wide-ranging and serious allegations of corruption and misconduct against members of the Kazal family, going well beyond the material on which Fairfax rely in support of their justification defences;

   2. (2)

      the primary judge correctly found that these particulars lacked anything but the most tenuous connection to the plaintiff personally;

   3. (3)

      Burstein is qualified by two subsequent decisions of the English Court of Appeal – Turner v News Group Newspapers Ltd (Turner) [116] and Warren v The Random House Group Ltd (Warren) [117] , which emphasise there needs to be a sufficient degree of connection between the “Burstein particulars” and the matter complained of;

   4. (4)

      the par 20 particulars are not “clearly relevant” to the plaintiff’s reputation in the sense required by Turner, their relevance can only be by innuendo, by inviting the reader to deem the plaintiff guilty by association with his brothers;

   5. (5)

      a familial relationship does not make a person responsible for every item of misconduct of other family members regardless of awareness or approval by that person.

5. [175]

   In response to Fairfax’s reliance upon the 28 articles referred to by Mr Kazal in his reply setting out particulars of malice, Mr Kazal submitted that the particulars of malice only went to identification of Mr Kazal; not that Mr Kazal in fact did something as a member of the Kazal family. [118]

Relevant principles – admissibility of evidence of reputation

1. [176]

   It is necessary to say something first about the admissibility of evidence of reputation in mitigation of damages in a defamation trial. The starting point is the common law rule in Scott v Samson. [119] While a defendant may seek to rely upon evidence of the plaintiff’s bad reputation in mitigation of an award of damages, evidence of specific acts of misconduct on the part of the plaintiff tending to show his or her character or disposition, as distinct from general bad reputation, is inadmissible. [120]

2. [177]

   The justification for this exclusionary rule is pragmatism and fairness. [121] It has been said that the exclusionary rule reflects the need to prevent trials becoming extended by the investigation of new allegations about the plaintiff’s past life, and also a concern about the lack of relevance of evidence which has “but a very remote bearing on the question in dispute”. [122] The concern is “to prevent [defamation] trials from becoming roving inquiries into the plaintiff’s reputation, character or disposition”. [123]

3. [178]

   However, there are exceptions or limitations to the exclusionary rule in Scott v Samson. The exclusionary rule does not apply to evidence of past criminal convictions. [124]

4. [179]

   Nor does the exclusionary rule apply to evidence of facts directly relevant to the contextual background of the publication. In Burstein, the English Court of Appeal held that evidence of specific acts of misconduct on the part of the plaintiff tending to show his or her character and disposition is admissible where “it is directly relevant to the context in which a defamatory publication came to be made. [125] The stated rationale in Burstein for this exception is to avoid the danger that the jury would be required to assess damages in blinkers. [126]

5. [180]

   Nor does the exclusionary rule apply to evidence properly admitted in relation to a defence [127] or partial justification. [128] In Turner, Keene LJ referred to Pamplin [129] where the defendants were allowed to rely, in mitigation of damage, on evidence adduced in support of a plea of justification which ultimately failed, and observed [130] that it has long been established that evidence of “specific acts properly admitted on such a plea may [nonetheless] be taken into account by the jury when assessing damages even though the plea has failed”. [131] However, Keene LJ also noted that to be used for this purpose, the evidence must related to “the relevant sector of the plaintiff’s life”. [132]

6. [181]

   As explained in Holt v TCN Channel Nine Pty Ltd: [133]

7. [182]

   Pamplin was applied in John Fairfax Publications Pty Ltd v Zunter [134] where it was noted that there was no reason why the same use should not be made in assessing damages of evidence led in support of a failed defence based on the truth of contextual imputations.

8. [183]

   In Holt v TCN Channel 9 Pty Ltd, the position was summarised as follows: [135]

9. [184]

   That the application of the test in Burstein may be difficult in particular cases was acknowledged in Turner. [136] The Australian authorities are to similar effect. [137] In Turner, Keene LJ expressed the view that there was a need for the courts to proceed “with some caution” in applying Burstein given that it represented a modification of the long-standing rule in Scott v Samson.

Disposition of grounds of appeal

1. [185]

   Pleadings and particulars must identify with sufficient clarity the case the parties have to meet and that conduct, such as fraud, must be pleaded specifically and with particularity. [138] That applies to the particulars of mitigation of damages relied upon by Fairfax in the present case. Here the “particulars” were incorporated as part of the pleading.

2. [186]

   UCPR, r 14.28(1) provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading discloses no reasonable cause of action or defence, or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the Court. Although the notice of motion upon which Mr Kazal moved to strike out par 20 of the defence was not included in the materials before the Court, it seems that the strikeout application relied upon this power conferred by the UCPR.

3. [187]

   It is well accepted that there is a need for caution when exercising the strikeout power to ensure that the party whose pleading is attacked will not be improperly deprived of an opportunity for the trial of their case. [139]

4. [188]

   The relevant question is not whether the matters pleaded in par 20 of the defence are in themselves sufficient to disclose a reasonable defence to the plaintiff’s claim, but whether it would be open to the defendant upon the pleading to prove facts at the trial which would arguably be relevant to an assessment of damages. [140]

5. [189]

   The starting point is par 16.1-16.10 of the defence. These paragraphs are repeated in par 20.1 and relied upon by Fairfax in pars 20.3, 20.6 and 20.9 for the inference that Mr Kazal “approved of or acquiesced in” the making of political donations, the hosting of politicians, and the payment of or facilitation of travel by politicians.

6. [190]

   The primary judge described these particulars (that the Kazal family conducted itself as a family business) as an unhelpful exposition of the case to be put at trial. I agree. The essential problem is that pars 16.1-16.10 contain only broad generalisations and lack precision concerning the business and family association between Mr Kazal and the other members of the Kazal family. These paragraphs are inadequate to support the suggested inference, which is critical in par 20, that Mr Kazal approved of or acquiesced in certain conduct of other members of the Kazal family, as referred to in pars 20.3, 20.6 and 20.9.

7. [191]

   The pleading in pars 16.1-16.10 and par 20 does not identify any facts, matters and circumstances relied upon for the assertions, first that Mr Kazal had knowledge of the impugned conduct by other members of the Kazal family and secondly, that he was involved in some way in such conduct. An inference of approval or acquiescence in some conduct cannot be drawn from a mere business or family association. Pars 16.1-16.10 and pars 20.1-20.10 fail to state how it is said that Mr Kazal signified his approval or acquiescence in the conduct of other family members. For example, it is not asserted that Mr Kazal was present at any meeting with Charif Kazal at which it was agreed that a particular Kazal family company would make a political donation with a view to furthering their family business interests (par 20.4).

8. [192]

   The particulars of the appointment of Karl Kazal as honorary trade envoy for the NSW Government (pars 20.11-20.13) do not identify any conduct of Mr Kazal that could support a suggestion that he had any connection with this appointment. The particulars are inadequate.

9. [193]

   The primary judge described the particulars concerning Mr Charif Kazal’s dispute with the Child Support Agency as a “large” topic and its putative impact on Mr Kazal’s reputation as “tenuous”. I agree.

10. [194]

    These particulars are broad and lack any precision in identifying some conduct of Mr Kazal that could support a suggestion that he was involved in the alleged “active plan by the Kazal family” to obtain an “unmeritorious benefit”, let alone that he had any knowledge of that alleged plan. Insofar as there is mention of Mr Kazal in par 20.34, it is not asserted in the particulars that the claim by Mr Kazal that he had loaned his brother, Charif Kazal, $31,218.76 was untrue or inaccurate in any respect.

11. [195]

    Before the primary judge, Fairfax acknowledged that par 20.34 required amendment. [141] However, no amendment was forthcoming in response to the strike-out application. Nor did Fairfax seek to amend par 20.34 on appeal. The particulars are inadequate.

12. [196]

    The particulars concerning the Kazal family’s dealings with Mr Kelly of SHFA do not identify some connection between the Mr Kazal’s asserted involvement in the running of the businesses and leasing of Kazal family properties in The Rocks and the impugned conduct of the Kazal family in their dealings with Mr Kelly. Again, these particulars lack any precision and are inadequate.

13. [197]

    The particulars concerning Mr Kelly’s role in working for the Kazal family businesses whilst still employed by SHFA, do not rise any higher than that Mr Kazal worked at the restaurant at which Mr Kelly met with Charif Kazal on 12 April 2007. It is not pleaded that Mr Kazal was present at that meeting. It is not pleaded that Mr Kazal had any knowledge of or approved the (unpleaded) discussions at that meeting.

14. [198]

    The particulars lack any precision in identifying some conduct of Mr Kazal that could support a suggestion that Mr Kazal was involved with Mr Kelly’s role in working for Kazal family businesses whilst still employed by SHFA. The particulars are inadequate.

15. [199]

    The particulars concerning the ICAC complaint, investigation and report described as Operation Vesta, including the findings by ICAC that Mr Kelly engaged in corrupt conduct and that Charif Kazal acted corruptly, do not identify any conduct of Mr Kazal that could support a suggestion that he was involved in the conduct of either Mr Kelly or Charif Kazal, the subject of ICAC’s corrupt conduct findings. Again, the particulars are inadequate.

16. [200]

    As presently framed, I do not consider that it is arguable that the matters pleaded in par 20 of the defence are directly relevant background context that would be admissible in assessing the damage caused to Mr Kazal by the alleged defamatory publications. The matters pleaded in par 20 are inadequate to arguably raise questions of involvement by Mr Kazal in the alleged corrupt dealings with government authorities by other members of the Kazal family. The matters in par 20 involve a mere “roving inquiry” into Mr Kazal’s business and family association with other members of the Kazal family who are alleged to have engaged in corrupt conduct. [142] Par 20 of the defence does not disclose a reasonable defence of mitigation of damages. It is also embarrassing, and has a tendency to cause delay in the proceedings.

17. [201]

    While the primary judge observed that “many” of the mitigation particulars in par 20 were also relied upon by Fairfax in support of the honest opinion defence, the correct position is that all of the mitigation particulars were relied upon by Fairfax in support of the honest opinion defence. Nonetheless, I do not regard that slight mis-description by her Honour to be material.

18. [202]

    Plainly, the primary judge took this matter into account, [143] however, as her Honour correctly observed, that did not obviate the need to scrutinise the par 20 particulars. That inadequate particulars are also relied upon for another defence does not provide a bootstraps argument against striking out of such particulars. Ground 7 is not established.

19. [203]

    Par 20 of the defence failed to plead specifically and with particularity matters directly relevant to the contextual background in which the publications were made. Having regard to the deficiencies in par 20, there was no error by the primary judge in taking into account the possible scope of the evidence relating to the particulars of mitigation. Ground 8 is not established.

20. [204]

    In my view, there was no error by the primary judge in striking out par 20 of the defence.

Conclusion and orders

1. [205]

   Fairfax has failed on both issues raised on appeal. There is no reason why costs should not follow the event: UCPR, r 42.1.

2. [206]

   Accordingly, I propose the following orders:

   1. (1)

      Grant leave to appeal.

   2. (2)

      Direct the appellants to file and serve a notice of appeal in accordance with the draft notice of appeal contained in the White Book within 7 days.

   3. (3)

      Appeal dismissed.

   4. (4)

      The appellants to pay the respondent’s costs of the appeal.