Fairfax Media Publications v Zeccola

McCOLL JA: The applicants, Fairfax Media Publications Pty Ltd, Brian Rosen and Michaela Boland, seek leave to appeal, and appeal, from a decision of McCallum J striking out contextual imputations the applicants had pleaded in response to a statement of claim filed by the respondents, Antonio and Benjamin Zeccola, seeking to recover damages in defamation. [1] The respondents are associated with a company which trades as “Palace Films”. [2]

Screenhub Pty Ltd, John Paxinos and Alexander Prior respectively were the fourth, fifth and sixth defendants below (the “other defendants”). They were represented separately below. [3] They are the third, fourth and fifth respondents to the appeal and have filed a submitting appearance.

The proceedings are governed by the Defamation Act 2005 (NSW) (the “2005 Act”).

The Court heard argument on the question whether leave to appeal should be granted and on the substantive appeal concurrently on the basis that, if leave is granted, the appeal will be determined without further argument.

After the decision in this matter was reserved, the applicants’ solicitor drew the Court’s attention to two decisions delivered after the hearing which he submitted were potentially relevant: Bateman v Fairfax Media Publications Pty Ltd (No 3) [4] and Setka v Hon Tony Abbott MP and Australian News Channel Pty Ltd. [5] The Court directed the parties to file supplementary submissions addressing those decisions, which they each did.

For the reasons which follow I am of the view that leave to appeal should be granted as the case raises issues of importance concerning the defence of contextual truth for which s 26 of the 2005 Act provides. I will refer to the applicants as the appellants henceforth.

For the reasons that follow I am of the view that the appeal should be allowed in part, but otherwise dismissed.

The proceedings arise out of claims for defamation in respect of three articles:

The appellants were all alleged to have published the AFR – print and AFR – online articles. The second and third appellants were also alleged to have published the Screenhub article as, too, were the other defendants.

The imputations relevant to the appeal are identical as between the AFR article (both the print and online versions) and, save as to one to which I refer below, the Screenhub article. The respondents relevantly pleaded the following imputations as having been published of and concerning each of them:

Two separate defences were filed, one on behalf of the appellants and the other on behalf of the other defendants, but in substantially the same terms and raising common issues. [9]

The appellants pleaded justification pursuant to s 25 of the 2005 Act to each imputation the respondents relied on. They also pleaded contextual truth to each matter complained of.

They relied upon nine contextual imputations in relation to the first and second respondents respectively, including:

The reasonable suspicion contextual imputations were pleaded in the alternative to the contextual imputation that:

The respondents applied pursuant to Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 14.28 to strike out the default contextual imputations and the reasonable suspicion contextual imputations.

The strike-out application was made on the same grounds in relation to both the appellants’ and the other defendants’ defences. The primary judge determined the issues by reference to the appellants’ defence. Mr A T S Dawson of Counsel, who appeared for the appellants in this Court and below, said that it was accepted that, to the extent there was commonality between the appellants’ and the other defendants’ defences, the outcome of this application would apply to the latter as well. Mr C A Evatt of Counsel, who appeared for the respondents with Mr R Rasmussen on the application and below, did not demur.

Section 6 of the 2005 Act provides:

Section 26 of the Defamation Act provides:

The history of the enactment of the 2005 Act and, in particular, s 26, was set out in Fairfax Media Publications Pty Ltd v Kermode. [13] Relevantly, the Explanatory Memorandum to the Bill which became the 2005 Act explained the defence of contextual truth as follows:

In the Second Reading Speech to the Defamation Bill 2005, which became the 2005 Act, the Attorney General, the Hon Bob Debus MP, referred to cl 26 as follows:

The reference to the defence of contextual truth in the Explanatory Memorandum and the Second Reading Speech under the existing New South Wales Act was to s 16 of the Defamation Act 1974 (NSW) (the “1974 Act”), which provided:

Two differences between s 16 of the 1974 Act and s 26 of the 2005 Act should be noted.

First, the s 26 defence is “a defence to the publication of defamatory matter”, whereas the s 16 defence is “a defence to any imputation complained of”. The wording of s 26 reflects the changed focus of the 2005 Act under which the cause of action for defamation arises in relation to the publication of the defamatory matter. [16] Under the 1974 Act, where a person published any matter to any recipient and by means of that publication made an imputation defamatory of another person, the person defamed had a cause of action against the publisher in respect of that imputation for the publication of that matter to that recipient. [17] Accordingly, each imputation was a separate cause of action to which the defendant had to plead. [18]

Secondly, the parts of s 16 I have emphasised above mirrored the requirement in the defence of substantial truth under s 15 of the 1974 Act that, in addition to proving the imputation was substantially true, the defendant had to prove the imputation either related to a matter of public interest or was published under qualified privilege. That requirement does not appear in the justification defence under s 25 of the 2005 Act.

The respondents raised two objections to the appellants’ defences relevant to this appeal. The first was that the default contextual imputations did not constitute “other imputations” capable of arising “in addition to” the respondents’ imputations for the purposes of s 26 of the 2005 Act (the “differ in kind issue”).

The second objection was that the reasonable suspicion contextual imputations were not capable of being carried by the matters complained of (the “capacity issue”).

Mr Evatt, who appeared for the respondents below and on appeal with Mr R Rasmussen, submitted that the default contextual imputations were virtually the same as the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x). [19]

For ease of comparison, the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x) are:

The primary judge determined this objection as follows:

Mr Evatt submitted the reasonable suspicion imputations were not capable of being carried by the matters complained of because there was nothing in any of the three matters complained of which suggested that any person held any such suspicion. The primary judge upheld that objection as follows:

The order recorded on the cover sheet of the primary judgment is “Defendants’ contextual imputations (i), (iv)(b) and (v) struck out”. The parties accept that contextual imputation (viii)(b) should also have been struck out for consistency. It is clear that her Honour’s order was intended to refer to each paragraph of the defence in which the appellants had pleaded respectively the default contextual imputations and the reasonable suspicion imputations.

The appellants complained of two errors in the primary judge’s reasons. First, they contended that her Honour misconstrued s 26 of the 2005 Act in striking out the default contextual imputations as not being different in kind to the respondents’ imputations. They submitted this issue raised the questions of the correct approach to pleading contextual imputations pursuant to s 26 of the 2005 Act and whether, and to what extent, authorities relating to s 16 of the 1974 Act inform the proper construction of s 26 of the 2005 Act. They also sought to raise an issue not argued before the primary judge as to whether it is appropriate to strike out contextual imputations before the tribunal of fact has determined which of the plaintiff’s imputations are carried and, where relevant, defences. Finally they questioned whether the primary judge correctly applied the principles concerning pleading contextual imputations on the strike-out application.

The appellants also contended that the primary judge erred in holding that an imputation of reasonably held suspicion is incapable of arising unless the matter complained of refers to the objective existence of such a suspicion, complaint or allegation concerning the plaintiffs.

They submitted that in Purcell v Cruising Yacht Club of Australia, [20] Kirby J held that there did not have to be a suggestion in the matter complained of that someone actually held the reasonable suspicion, [21] and that contrary to her Honour’s reasons (at [42]), Kirby J did not assume that the matter complained of reported the existence of a suspicion.

The respondents advanced little by way of argument, being mostly content to rely on the primary judge’s reasons.

In their written submissions, the respondents submitted, in addition to the primary judge’s reasons with respect to the reasonable suspicions contextual imputations, that whilst it may not have been necessary to plead that the suspicion or accusation was reasonable, “it was necessary [for the respondents] to identify the person making the accusation”, [22] and that the primary judge and Kirby J in Purcell were incorrect to the extent their Honours accepted otherwise. This would have required the filing of a notice of contention which the respondents had not done. An application to do so orally was rejected. My reasons for that decision appear later in this judgment.

The task of statutory construction of s 26 must begin with a consideration of the text which cannot be displaced by historical considerations and extrinsic materials. This may require consideration of the context, which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy. [23]

The stricture expressed in Alcan concerning recourse to historical considerations in the construction process is reinforced by s 6(3) of the 2005 Act. [24] The effect of that provision has been described as “unclear”. [25] Nevertheless, it has also been accepted that although the effect of s 6(3) is that “the earlier legislation in [New South Wales] is to be ignored in identifying the general law, it is not necessarily to be ignored in construing the Defamation Act 2005 [although] it should be accepted that the construction of (largely) uniform national legislation will not generally be affected by earlier legislation operating only in one State”. [26]

It is necessary to recognise the new legal context the 2005 Act creates, in particular, the fact that the common law now governs the identification of the cause of action. [27] Further, s 26 uses different language from s 16 of the 1974 Act, which is not merely the product of the excision of the references to qualified privilege and public interest. [28] For those reasons at least, while the conceptual foundation for the contextual truth defence which became s 16 of the 1974 Act to some extent informs an understanding of s 26 of the 2005 Act, 1974 Act jurisprudence cannot be decisive as to its operation. [29]

In Kermode I explained the language of s 26 in the context of the plead-back issue in that case as follows:

The question which arises in this case concerns the nature of the “otherness” the language of s 26 requires.

It was common ground that s 26 requires the contextual imputations to differ in substance from the plaintiff’s.

The “differ in substance” requirement was a product of 1974 Act jurisprudence based on the Supreme Court Rules 1970 (NSW) (“SCR”) which governed the pleadings in defamation cases.

In Morosi v Mirror Newspapers Ltd, [30] the Court of Appeal said that the requirement in SCR Pt 67 r 11(3) that a plaintiff’s imputations must differ in substance “preclude[d] the practice, formerly prevalent, of pleading many shades and gradations of substantially similar imputations.” Accordingly, on the proper construction of the SCR, an imputation specified in a statement of claim had to be “taken to include all imputations which [did] not differ in substance.”

In Jackson v John Fairfax & Sons Ltd, [31] Hunt J said it was “fundamental to the whole operation of the 1974 Act” and “basic to the scheme of s 16” that the imputation pleaded by the plaintiff and the contextual imputation pleaded by the defendant must be conveyed by the matter complained of at the same time, and that each must differ in substance from the other. His Honour based the latter proposition on Morosi, observing that “as the imputation pleaded by the plaintiff must be taken to include all other imputations which do not differ from it in substance … it follows that each party’s imputation must differ in substance from that relied upon by the other.” [32]

UCPR 14.30(3) also requires the plaintiff’s imputations to differ in substance. Those rules have been held to be capable of affecting the substantive operation of the law of defamation in this State, even though the 2005 Act is part of the uniform defamation laws and the same rule is not found in other jurisdictions. [33] Accordingly, in New South Wales it should be presumed that the same position prevails under s 26 of the 2005 Act, that is to say, that contextual imputations must differ in substance from the plaintiff’s imputations.

That conclusion is also supported by the text of s 26 alone, as appears to have been accepted in Victoria. As I said in Kermode, Kaye J construed s 26 of the Defamation Act 2005 (Vic) in Newnham v Davis (No 2) [34] as imposing a “differ in substance” requirement, [35] albeit that there does not appear to be a counterpart to UCPR 14.30 in that State. [36] His Honour applied Jackson, [37] albeit without referring to its foundation in SCR Pt 67 r 11(3). Nevertheless, in my view, his Honour’s approach finds support, in any event, in the language of s 26 as a sufficient way of explaining the requirement that the matter complained of “carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations” (emphasis added).

That is how Nicholas J explained the insertion of the phrase “in addition to” in s 26 in Ange v Fairfax Media Publications Pty Ltd & Ors. [38] His Honour concluded that the words “in addition to” in s 26(a) removed the confusion under s 16 of the 1974 Act about what was required to establish a contextual imputation as a defence. [39] This appears to have been a reference to Allen v John Fairfax & Sons, [40] where Hunt J held that:

Hunt J also concluded in Allen that the “differ in substance” test was satisfied where a defendant pleaded a contextual imputation in general terms in the sense permitted by Maisel v Financial Times Ltd. [42] His Honour said:

It is consistent with Hunt J’s earlier explanation that a contextual imputation must be carried “in addition to the imputation of which the plaintiff complains”, [44] that a general contextual imputation was permissible under such a construction of s 16, even though both the plaintiff’s and the defendant’s imputations related to the same subject matter, as long as the “differ in substance” test was satisfied.

The primary judge did not refer to any authorities relevant to her conclusion that the default contextual imputations were “not of a different kind” to the respondents’ imputations. [45] However her Honour’s language in that respect reflected John Fairfax Publications Pty Ltd v Jones, [46] to which she had earlier referred when considering the respondents’ complaints about the particulars of contextual truth. [47]

In Jones, writing of s 16 of the 1974 Act, Spigelman CJ said:

Mr Dawson submitted that Spigelman CJ’s reference in Jones to a “differ in kind” requirement for a s 16 contextual imputation was merely another way of expressing the “differ in substance” requirement. That is how Nicholas J appears to have understood the reasons in John Fairfax Publications Pty Ltd v Jones, [48] in Ange 2. His Honour did not perceive any inconsistency between the members of the Bench with regard to the principles which governed the application of s 16(1) as explained by Spigelman CJ. In his Honour’s view, they agreed that the critical question for the purposes of determining whether a contextual imputation was “another imputation” for the purposes of s 16 of the 1974 Act was whether it differed in substance from the plaintiff’s imputation. [49]

Nicholas J concluded:

Jones was determined under the 1974 Act. It concerned the question whether the defendants could rely on a contextual imputation “the plaintiff was a dishonest broadcaster”, in circumstances where, pursuant to s 7A of the 1974 Act, a jury had found the matter complained of conveyed the defamatory imputation that “[t]he plaintiff was a dishonest broadcaster, in that he [a specific act was set out]”. Levine J struck out the defendants’ contextual imputation on the basis that it was “incapable of arising generally or more specifically as sought to be advanced by the defendants by reason of the invitation to the ordinary reasonable reader referred to”. [51]

The debate about the permissibility of the defendants’ contextual imputation took a different turn in the Court of Appeal where, in addition to relying upon the basis upon which the primary judge struck out that imputation, the plaintiff’s counsel submitted, relevantly, “that the defendants’ first contextual imputation was not ‘another imputation’ within s 16(1)”. [52]

Spigelman CJ upheld that submission. In his Honour’s view, the words “another imputation” in s 16(1) were “not satisfied where a defendant relies on a contextual imputation which is, in substance, nothing more than an alternative way of formulating the same imputation relied on by the plaintiff, based on exactly the same words in the matter complained of and applying those words in exactly the same way.” [53] In so finding, his Honour accepted that the plaintiff’s imputation and the defendants’ contextual imputation differed in substance and, too, that a single publication may convey two or more imputations of different degrees of seriousness. Nevertheless, his Honour held that the test for a plaintiff’s imputations, that they differ from each other in substance, was a “necessary but not sufficient test for ‘another’ imputation [in s 16(1)], which requires a difference in kind.” [54] This was because, in his Honour’s view, s 16 was “directed to a situation in which the same publication conveyed imputations which differ in their character, not merely a different way of formulating the same imputation at a higher level of generality.” [55]

The Chief Justice was of the view that the expression “another imputation” in s 16(1) demonstrated that provision was intended to remedy a defect in the common law position “in circumstances where the two imputations were of a different character, rather than different levels of generality of the same allegation, e.g. the allegation of murder, theft and failure to attend church referred to in Plato Films Ltd v Speidel [1961] AC 1090 at 1142.” [56]

Hodgson JA concluded the defendants’ contextual imputation was “another imputation” within s 16(1), because “[t]he plaintiff’s imputation can reasonably be considered as involving a limited type of dishonesty, so that what must and/or may be proved by way of justification of that imputation is different from what must and/or may be proved by way of justification of the defendants’ first contextual imputation.” [57] In his Honour’s view, it would not matter if the contextual imputation “arose from precisely the same matter or allegation within the publication as does the plaintiff’s imputation”. [58] Accordingly, his Honour concluded:

Ipp JA accepted that “the same words may be capable of bearing a broad defamatory meaning and a narrow defamatory meaning” and that “if a plaintiff sues for defamation, relying only on the narrow meaning of the words, the broad meaning will ordinarily be ‘another meaning’ within the meaning of the phrase in s 16(1) of the Defamation Act 1974”. [59] However he disagreed with Hodgson JA because he did not think that the matter complained of in Jones had “both broad and narrow meanings”. Rather, the meaning of the plaintiff’s imputation and the defendants’ contextual imputation was, in effect, the same, that the general character of the plaintiff was that of a dishonest broadcaster. [60] He added that in theory it would have been open to the defendant to attempt to justify, under s 15(2) of the 1974 Act, the imputation found by the jury. [61]

Hodgson JA explained why he disagreed with Spigelman CJ’s conclusion and also commented on Ipp JA’s views as follows:

As will be apparent, Ipp JA agreed with Hodgson JA on the matter of principle concerning whether a broadly expressed contextual imputation could be another imputation for the purposes of s 16(1). Neither judge embraced Spigelman CJ’s “differ in kind” proposition. [62]

In Crosby, Rares J considered an application to strike out a defence of contextual truth advanced on the basis, it appears, both that the contextual imputations did not arise from the matter complained of, and were “too general”, I infer in the sense rejected by Spigelman CJ in Jones. [63] Crosby was governed by Ch 9 of the Civil Law (Wrongs) Act 2002 (ACT) which “mirror[ed] the reforms brought when uniform Defamation Acts were enacted by each of the States and Territories of the Commonwealth in about early 2006.” [64] Section 136 of that Act is in the same terms as s 26 of the 2005 Act.

Rares J discussed the genesis of the defence of s 16 of the 1974 Act afforded, observing that it was “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.” [65] His Honour added that the effect of the defence was that “the plaintiff cannot now so confine, at will, the field of forensic battle by his or her choice of imputations complained of because of the statutory defence of contextual truth.” [66]

Rares J expressed the view that Spigelman CJ and Ipp JA’s reasoning in Jones was “of little assistance because the passage of the uniform Defamation Acts created a new legal framework in which the new statutory defences of justification and contextual truth work” and was “not binding on the construction of s 136”. [67] His Honour rejected the applicants’ submission that their imputations precluded the respondent from being able to rely on his contextual imputation for two reasons. First, he concluded that the matter complained of was capable of conveying the contextual imputation. Secondly, he found that the contextual imputation was not “the same as” the applicants’ imputations and conveyed “a different, and potentially broader, sting than the applicants’ imputations.” [68] His Honour’s approach to testing the legitimacy of the contextual imputation by comparing its sting to the applicants’ imputations reflects that Nicholas J adopted in Ange 2.

The primary judge in this case re-visited the “differ in kind” issue extensively in Bateman which, as I have said, was handed down after judgment was reserved in this case. On my reading of her Honour’s reasons, she somewhat moved away from the emphasis she had given to that “test” in previous decisions. [69] Her Honour rejected the submission the appellants rely upon in this case that the only requirement of a contextual imputation is “that it must meet the requirement of the rules that it differ in substance from the imputations relied upon by the plaintiff.” In her Honour’s view to state a test in those terms would, “equally, put a gloss on the terms of the section.” [70]

Ultimately, however, in her Honour’s view, the question was “whether a contextual imputation is reasonably capable of satisfying the terms of s 26(a) [a] … question [which] must be answered with an understanding of the purpose, and limits, of the defence, properly construed.” [71]

While her Honour concluded that Spigelman CJ’s analysis of the proper operation of the defence under the 1974 Act in Jones “was correct and held true for the s 26 defence,” [72] she concluded:

Accepting the limited use which may be made of 1974 Act authorities in construing the 2005 Act, I would nevertheless make the following observations.

First, I respectfully disagree with Spigelman CJ’s conclusion that a “differ in kind” test reflected the purpose of the defence of contextual truth. His Honour based this conclusion on the illustrations of the defect in the common law position identified in Plato Films Ltd v Speidel, [73] where “the two imputations were of a different character, rather than different levels of generality of the same allegation, e.g. the allegation of murder, theft and failure to attend church”. [74] However Plato Films did not resolve the question of the defence the text of s 16 afforded. In my view the purpose of the contextual truth defence is better expressed more broadly, namely that a plaintiff should “not be able to avoid serious stings in defamatory matter by selective pleading.” [75]

Further, to the extent Spigelman CJ referred to Hunt J’s decision in Allen, [76] his Honour did not refer to Hunt J’s acceptance in that case of the proposition that a general contextual imputation of a Maisel nature could be pleaded in defence to a specific plaintiff’s imputation even though they related “to the same subject matter” as long as they differed in substance. [77] That is, in effect, the approach Hodgson JA and Ipp JA each adopted in Jones, albeit without express reference to Allen.

Accordingly, I respectfully disagree with those first instance decisions which have concluded that Jones held that s 16 of the 1974 Act required a defendant to plead contextual imputations which not only differed in substance from the plaintiffs’ imputations, but also “differed in kind”. To the extent that view relies upon the proposition that Ipp JA endorsed Spigelman CJ’s reasons, it is incorrect. Rather, Ipp JA agreed with Hodgson JA on the point of principle that a broad defamatory meaning will “ordinarily” be another meaning within s 16(1) of the 1974 Act. [78] Their Honours parted company on the question whether, as a matter of fact, the contextual imputation in that case satisfied that test.

Further, with respect, I do not understand to what part of s 26 McCallum J was referring in Bateman when her Honour found that “on the proper construction of the section” a “differ in substance” test was not a sufficient exposition of the s 26 criterion. [79] To the extent if at all, her Honour’s statement leaves room for a “differ in kind” test as a free-standing criterion, I would respectfully disagree, for the reasons I have given. In my view the text of s 26 does not support that conclusion.

Accordingly, in my view the primary judge erred in striking out the default contextual imputations because there was not a “difference in kind” from the respondents’ imputations and because the “sting is … not of a different kind”. [80]

The respondents did not file a notice of contention contending that if the Court disagreed with her Honour’s reasons for striking out the default contextual imputations, her Honour’s conclusion should be upheld for some other reason.

Mr Dawson submitted that if the Court was of the view that the primary judge only disallowed the default contextual imputations on the “differ in kind” basis, then the respondents’ objection to the default contextual imputations was exhausted.

In my view it is sufficient to deal with this aspect of the case by determining whether the default contextual imputations are capable of being “other imputations” carried “in addition to” the respondents’ imputations.

The primary judge ultimately tested this issue not only by comparing the default contextual imputations to the respondents’ imputations 12 and 16(q) and (w) and 19(t) and (x), but also to their imputations 12(p) and 12(r). [81] The appellants challenged that approach, but in my view, the question can be resolved without deciding that challenge.

By way of reminder, the default contextual imputations were:

The respondents’ three imputations to which her Honour compared the default contextual imputations focussed specifically on three forms of default:

However, as the appellants submitted, in my view, the matter complained of referred to a wider field of financial default than that selected by the respondents. Critically, the matter complained of stated:

As I have said, the respondents did not contend the default contextual imputations were not capable of being carried by the matter complained of. I would understand that concession to be at least directed to accepting the default contextual imputations were capable of being carried by those passages of the matter complained of set out above. In my view, those passages were capable of carrying the default contextual imputations in addition to the respondents’ imputations to which the primary judge compared them.

An imputation of general financial default is capable of being substantially different from the specific instances of such default the respondents have selected. [83] One way of testing that issue is to determine what the party pleading justification or contextual truth would need to prove in order to justify the imputation. [84] That test can be satisfied even if the same evidence proves the truth of each imputation. [85]

It would, in my view, be open to a jury to conclude that the default contextual imputations differed in substance from the respondents’ imputations.

The primary judge erred in striking out the default contextual imputations.

In their notice of appeal the appellants raise the question whether it was appropriate to strike out contextual imputations at all in advance of a trial. This issue was addressed in their Supplementary Submissions. The appellants did not object to the primary judge hearing the strike out application and it would ordinarily be inappropriate to entertain such an objection on appeal. However, lest failure to consider the submission may set another hare running in the Defamation List, I would make the following observations.

The appellants first submitted that although the primary judge had struck out their default contextual imputations, her Honour had not struck them out where they were also pleaded as part of their Hore-Lacy [86] defence. As they remained as part of the defence, there was no utility in striking them out in another part of the defence. As the respondents submitted, this submission failed to take account of McCallum J’s decision in Bateman (No 2) where her Honour struck out the Hore-Lacey defence as not being applicable in this State. Her Honour’s decision was upheld by this Court in Bateman CA. If it has not already been struck out, I would assume the appellants’ Hore-Lacy defence will be soon. [87]

Secondly, the appellants submitted that striking out the contextual imputations prior to trial was premature because it assumed that one or more of the respondents’ imputations would be found to be conveyed and defamatory by the jury. They also contended that the question whether the contextual imputations differed in substance from the respondents’ imputations was a matter for the jury, referring to s 22(2) of the 2005 Act and Setka. [88] They submitted that unless it was unarguable that the contextual imputations failed to meet the requirements of s 26, it was premature to determine, before trial, that an aspect of the defence should not be left to the jury.

This submission should also be rejected. It is always a matter for the Court to determine the question whether, as a matter of law, a pleading is capable of satisfying a statutory requirement. That position is preserved by s 22(5) of the 2005 Act. It has long been held in this context that both the plaintiff and the defendant have to plead by anticipating how the jury may interpret the matter complained of. [89] Determining questions of capacity is essential to the efficient conduct of both jury trials and the trials generally, and to the Court’s obligations to ensure the just, quick and cheap resolution of the real issues in the proceedings. [90]

Mr Dawson acknowledged, on the capacity issue, that the matters complained of did not speak in terms of any suspicion held by any individual person or authority. However, he submitted, and the primary judge accepted that, as a matter of principle, there is no requirement that a “suspicion” imputation identify the person holding the relevant suspicion. [91]

Her Honour set out Kirby J’s statement of principle in Purcell and also referred to Greig v WIN Television NSW Pty Ltd. [92] However her Honour held that those authorities did not establish “that every article that is capable of conveying an imputation of guilt is also capable of conveying an imputation of reasonably-held suspicion [nor] that it is enough if the matter complained of excites suspicion in the mind of the ordinary reasonable reader. [93]

Purcell arose from a press conference given by members of the Race Review Committee of the Cruising Yacht Club of Australia (the “CYC”) when handing down its report on the Sydney Hobart Yacht Race 1998. During the race, six crew members of the Sword of Orion had lost their lives in a storm. In the course of the press conference, journalists questioned Committee members about a report from the Sword of Orion that a passing yacht, the Margaret Rintoul II, had failed to respond to its distress signals during the storm.

Mr Purcell, the owner and captain of the Margaret Rintoul II, brought defamation proceedings against the CYC, its Commodore and two speakers at the press conference.

The defendants pleaded contextual truth, in particular the following contextual imputation:

The plaintiff sought to strike out that contextual imputation on the bases that it was defective in form in that it did not identify who held the reasonable suspicion and, in any event, was incapable of being conveyed by the matter complained of. [94]

Kirby J discussed the first issue in the terms set out by the primary judge. As his Honour emphasised, the issue must ultimately be determined by reference to the words published and whether, in that context, there was a need to identify the person who held the suspicion. [95] In Purcell, the matter complained of not only said that the CYC “had sufficient evidence of gross misconduct on the part of Margaret Rintoul II, in not going to the aid of the Sword of Orion, when dismasted, to refer the issue to the Protest Committee”, but also gave a graphic description of the conditions. In that context, the Commodore answered a journalist’s questions about the safety of a yacht trying to get close to a boat that was in distress, by saying he would be “speculating in terms of what the conditions were on Margaret Rintoul or the other boat as to whether that was an option that was available or in fact a safe or prudent option that was available to them.” [96]

In such circumstances, Kirby J applied the “undemanding” test for capacity, to hold the contextual imputation was not defective. It was in that context that his Honour made the statement upon which the appellants rely, which, in context, was:

As is apparent, this was a statement particular to the case, not a statement of general principle.

His Honour then considered an issue which does not arise here, namely the plaintiff’s submission that where the attack was by the CYC Investigating Committee and no-one else, a contextual imputation which presupposed a general attack was not capable of being conveyed.

In Greig, the matter complained of was a newspaper article that discussed the circumstances of a meeting between the plaintiff, the Deputy Mayor of Shellharbour City Council, and “private communication representatives”, and the plaintiff’s subsequent receipt of two Blackberry devices. It reported that “Questions [were] being raised” about the meeting and that the “ICAC did not deliver a finding, however suggested the issue instead be referred back before Council’s Code of Conduct Committee.” [97]

The plaintiff pleaded two imputations each prefaced by the proposition, “the plaintiff conducted herself in such a way so as to give rise to the reasonable suspicion that …” [98] The defendant sought to strike out the imputations pursuant to UCPR 14.28(1)(b) as tending to cause embarrassment in the proceedings on the basis that “without identification of the holder of, or of the basis for, the suspicion, the imputations as formulated may lead to confusion”. [99]

Nicholas J rejected that submission, holding that the imputations specified the act or condition which the plaintiff claimed to be attributed to her by the matters complained of and which provided the basis for the reasonable suspicion that she had acted corruptly, “i.e.: that in handling a planned councillor technology upgrade for the Shellharbour City Council she accepted Blackberry devices from private communications representatives”. [100]

Mr Dawson submitted that the primary judge’s conclusions that a “defamatory sting that a person is reasonably suspected of something must have its foundation in something to that effect stated or conveyed by inference in the matter complained of” and that “I do not think the articles are about the existence of a reasonably held suspicion” [101] misunderstood the nature of an imputation of objective suspicion.

He contended that Purcell and Greig were authority for the proposition that a defendant can plead an imputation of there being reasonable grounds to suspect on the basis of conduct by the plaintiff, irrespective of whether any person in fact holds the suspicion and whether the matter complained of referred to the holding of such a suspicion.

I would reject that submission. Both Purcell and Greig concerned the question whether imputations which did not identify who held a “reasonable suspicion” were defective in form. In each case it was clearly arguable from the matter complained of that someone held such a suspicion. In Purcell the question whether the contextual imputation was defective was considered in circumstances where the matter complained of was a press conference about a Report under which the plaintiff was referred to the Protest Committee to investigate an allegation of gross misconduct on the part of the plaintiff. In Greig the imputations were pleaded in the context of the ICAC having been involved and referring the matter to the Council’s Code of Conduct Committee.

Kirby J made it clear in Purcell that the issue ultimately turned on the matter complained of. [102] It is clear that Nicholas J was of the same view in Greig because his Honour, as I have said, found each of the plaintiff’s imputations was grounded in the matter complained of.

As Mr Dawson accepted that the matters complained of did not speak in terms of any suspicion held by any individual person or authority, it was, in my view, open to the primary judge to find that the reasonable suspicion contextual imputation was not capable of being carried by the matters complained of. That was clearly the basis upon which her Honour struck out those imputations. [103] In my view her Honour did not err in so ordering.

Mr Evatt sought to support the primary judge’s second ruling by contending that if a reasonable suspicion imputation was pleaded, it was necessary to identify the person making the accusation. This would have required the filing of a draft notice of contention for inclusion in the White Book. [104] This had not been done despite a direction by the Court of Appeal Registrar on 21 July 2014 that the respondents file and serve any draft notice of contention by 29 September 2014. When this was drawn to Mr Evatt’s attention, he orally sought leave to file a draft notice of contention.

The Court refused that application. Mr Evatt gave no explanation for failing to comply with the Registrar’s direction. The Court should not condone a blatant breach of a direction intended to ensure the proper conduct of an appeal by granting such an indulgence.

The consequence is that the appeal should be allowed in part. Her Honour’s order striking out the default contextual imputations should be set aside, but the appeal should be otherwise dismissed. In such circumstances I am of the view the respondents should pay fifty per cent of the appellants’ costs.

I propose the following orders:

MACFARLAN JA: I agree with the judgment of McColl JA.

SACKVILLE AJA: I have had the advantage of reading the judgment of McColl JA.

I agree that s 26(a) of the Defamation Act 2005 (NSW), as a matter of construction, requires that contextual imputations pleaded by a defendant differ in substance from the plaintiff's imputations. It is not necessary that they also differ "in kind". I reach this conclusion both for the reasons given by McColl JA and those given by Rares J in Crosby v Kelly.

If the Primary Judgment is read alone (that is independently of the other decisions of the primary Judge to which McColl JA refers), it is not necessarily obvious that the primary Judge required any more than a difference in substance between the appellants' default contextual imputations and the respondents' imputations. It is true that her Honour said that she was not persuaded that there was a "difference in kind" between the default contextual imputations and the respondents' imputations. But her Honour did not refer to the passage in John Fairfax Publications Pty Ltd v Jones that suggests that the difference must not only be "in substance" but also "in kind". On one view, the primary Judge's reasoning is consistent with an application of an "in substance" test.

However, McColl JA interprets the Primary Judgment as requiring that a contextual imputation differs both in substance and in kind from the plaintiff's imputations. With some hesitation, I accept that interpretation of the Primary Judgment.

I agree with McColl JA that it is open to a jury to conclude that the default contextual imputations differ in substance from the respondents' imputations.

I agree with the orders proposed by McColl JA.