TCN Channel Nine Pty Ltd v Pahuja

1. [1]

   BASTEN JA: In 2018 the appellants unsuccessfully defended a defamation action brought against them by the respondent, Sunil Pahuja. The proceedings were heard by McCallum J and a jury. This appeal concerns the refusal of the trial judge to allow the appellants’ defence of truth to go to the jury with respect to three of five imputations found by the jury to be defamatory. There was also an appeal, dealt with largely by way of written submissions, challenging the trial judge’s refusal to allow a defence of contextual truth to be left with the jury.

2. [2]

   Although not the subject of written submissions, or a challenge to the competency of the appeal, Mr Pahuja submitted that even if the primary judge had erred, there was no basis upon which to remit the matter for a rehearing. That submission relied on the unavailability of a defence of justification (substantial truth) in relation to only some of the plaintiff’s imputations.

3. [3]

   For the reasons set out below, the appeal should be allowed and the judgment in favour of the respondent set aside. Because the error lay in the failure to allow the jury to determine a number of issues, it is clear that this Court cannot dispose of the matter and there will need to be a retrial. Against that possible outcome, the respondent also made submissions as to the scope of any retrial. Although any reasonable attempt to confine the issues so as to limit further costs is commendable, as is often the case with a jury trial, limiting issues in this case runs a substantial risk of causing a further miscarriage of justice. [1]

Factual background

1. [4]

   Mr Parmesh Chand was a lawyer and migration agent with a practice in Queensland. In 2011 Mr Satnam Singh’s application to extend his student visa was refused. Mr Chand acted for Mr Singh in unsuccessful Federal Court proceedings to review the visa refusal decision of the Migration Review Tribunal. Mr Singh then made arrangements to seek assistance from a different migration agent, Choice Migration Australia Pty Ltd, of which the principal was Mr Mofid Bebawy. The intention was to obtain a “457 visa” which required sponsorship from an employer in Australia. The evidence also supported an inference that Mr Singh had agreed to pay Mr Bebawy over $60,000 for his assistance, of which some $12,500 were for Mr Bebawy’s fees, $3,500 for government fees and the balance, about $45,000 was to be paid to a “sponsor” arranged by Mr Bebawy. Mr Singh’s friend, Mr Pahuja, had a role in arranging a meeting between Mr Singh and Mr Bebawy.

2. [5]

   On learning of this activity, Mr Chand arranged a meeting with Mr Singh and Mr Pahuja, in his (Chand’s) offices on 1 April 2015. Mr Chand secretly recorded the discussion and later provided the recording to Channel Nine. Channel Nine took some limited steps to investigate what appeared to be a scheme to abuse arrangements to obtain temporary work visas (known as “457 visas”) by paying the Australian businesses which were purporting to sponsor the visa applicant. On 28 April 2015, the first appellant broadcast the program as a segment on A Current Affair. It was later republished by the second appellant, an affiliate of Channel Nine.

3. [6]

   The segment was entitled “Immigration Scam: Exposed”. The program included extracts from the recording made by Mr Chand in his office. Mr Pahuja is recorded as saying:

4. [7]

   On 14 July 2015 Mr Pahuja filed a statement of claim in the Supreme Court of New South Wales, seeking damages for defamation against the publishers and the journalist. The statement of claim contained a number of imputations said to be conveyed and defamatory. Those upheld by the jury read as follows:

5. [8]

   The judge ruled that a defence of substantial truth (justification) under s 25 of the Defamation Act 2005 (NSW) could be left to the jury with respect to imputations (d) and (g). The jury found that (d) was true, in that Mr Pahuja had dishonestly denied knowing Mr Bebawy. They rejected the defence of truth with respect to imputation (g); as that imputation included a number of separate elements, it is not known on what basis the jury made that finding.

6. [9]

   On 8 June 2018, prior to summing up to the jury, the trial judge ruled that the evidence was incapable of proving the truth of imputations (a), (h) and (j): accordingly the defence was not left to the jury with respect to those imputations. The primary basis of the appeal is a challenge to the judge’s ruling in that respect.

7. [10]

   Further, the appellants relied upon a defence of contextual truth, pursuant to s 26 of the Defamation Act, based on a single contextual imputation, namely “the plaintiff is a liar”. The judge declined to leave that defence with the jury.

8. [11]

   Because the appeal was limited to the correctness of the judge’s rulings in respect of those defences, it is not necessary to deal in detail with the facts, beyond those aspects of the evidence relevant to the rulings.

Substantial truth defence

1. [12]

   In circumstances where there was a jury awaiting the outcome of deliberations, having made the rulings referred to above, the judge reserved her reasons. Those were provided on 23 October 2018. [2]

2. [13]

   The trial judge ruled that the immigration scam referred to in imputation (a) involved more than one overseas resident (that is visa applicant) and more than one dishonest immigration agent. [3] That reading was not challenged. Rather, the appellants’ challenge ran to the next step in the reasoning which, picking up the language of imputation (h), identified the phrase in imputation (a) (“knowingly involved in”) as requiring that Mr Pahuja was a “fixer” who directed more than one person to a dodgy immigration agent, namely Mr Bebawy. The judge noted the submissions by counsel for Mr Pahuja to the effect that “taken at its highest, the evidence was simply incapable of reasonably supporting any finding that any person other than Mr Singh was a victim of any conduct attributable to the plaintiff.” [4]

3. [14]

   Although not referred to in the reasons, it is possible that the judge was also having regard to imputation (j) which also used the phrase “knowingly involved” and particularised the knowing involvement by reference to arranging meetings between foreigners (plural) and the agent.

4. [15]

   On the appeal, the appellants contended that the judge departed from the ordinary meaning of imputation (a) in requiring multiple acts on the part of Mr Pahuja. It was sufficient for the purpose of that imputation that Mr Pahuja was knowledgeable about the extent of the scam, which involved more than one migration agent making sizeable payments to “sponsors” to obtain their signatures on 457 applications.

5. [16]

   There is some difficulty in identifying a precise, but ordinary, meaning for these imputations. They are repetitive and are written in terms which are cumulative. Imputations (d) – (j) refer to the agent, who is separately identified as “dishonest”, “unscrupulous”, “dodgy” (twice), and without epithet on one occasion. However, no such constraint was imposed on the meaning of (a) when it was left to the jury; indeed the judge gave no directions to the jury in that regard. Nor is there any way to know how the jury understood it; yet it was how the jury understood it that mattered, not how the judge understood it (unless there was only one way to understand it, in which case the jury might have been so directed). Furthermore, although context is always important to determining meaning, it is not correct to read imputations down so as to increase the degree of overlap if they can bear separate and distinct meanings. This ground was made good.

6. [17]

   The appellants had an alternative, substantive, basis for their challenge, which was relevant to all three imputations. It was that the evidence supported inferences that Mr Pahuja not only knew of Mr Bebawy’s reputation and practices but had had more than one meeting with him and had directed more than one person to him. The appellants acknowledged that the parts of the evidence were less than clear, and that aspects of the evidence might support a different inference. That fact, the appellants submitted, merely demonstrated that the matter was one for the jury to resolve, and not the trial judge.

7. [18]

   So much may be accepted: the question is whether there was sufficient evidence to allow that the inferences sought by the appellants were reasonably open.

8. [19]

   Before turning to that evidence, it is convenient to note one further aspect in the reasoning of the trial judge. Referring to the particulars of the defence, the judge accepted that “the application fell to be determined by reference to the evidence, not the particulars.” She continued: [5]

9. [20]

   If, as appeared to be the inference, the appellants were to be strictly confined to their particularised defence, it was it was necessary to have regard to all the particulars with respect to imputation (a), which in fact ran to 11 paragraphs, two of which included multiple references to evidence.

10. [21]

    The critical paragraph referred to three individuals Mr Pahuja was said to have assisted, namely:

11. [22]

    The judge held that with respect to (i), there was no evidence that Mr Pahuja had either recommended or introduced him to Mr Bebawy; with respect to (ii) and (iii), each patently referred to Mr Singh. [6]

12. [23]

    The appellants submitted that an inference that Mr Pahuja acted for more persons than Mr Singh was reasonably open, although there was no definitive evidence to that effect. Rather, the inference was to be drawn from the general knowledge as to Mr Bebawy’s practices described by Mr Pahuja in the recorded meeting in Mr Chand’s office, several of his statements being introduced with the word “generally”. Reliance was placed on the following specific passages:

13. [24]

    In his evidence in chief, Mr Pahuja said that the first time he had ever been to the offices of Choice Migration was on 30 March 2015. [10] On that occasion he said that he attended with Mr Singh but did not go into the office, waiting in the reception area for “very short time, roughly around two minutes.” [11] He denied knowing what Mr Bebawy charged other people, [12] and denied he had ever represented any applicants for visas in their dealings with Mr Bebawy. He denied trying to persuade Mr Bebawy to reduce his fees, [13] and in cross-examination he asserted that everything suggesting he had knowledge of Mr Bebawy’s practice and fees was a “fabrication”. [14]

14. [25]

    The appellants’ case was that the claims of fabrication were patently false and that Mr Pahuja had a detailed and reasonably intimate knowledge of Mr Bebawy’s practices. When asked about his statement that Mr Bebawy got angry with him “last month” when he sought to negotiate a lower fee, he claimed that was a fabrication, because he had never been there before the visit with Mr Singh on 30 March 2015. He did not suggest that there was such a negotiation on behalf of Mr Singh. It was therefore open to a jury to conclude that particular (ii) did not refer to Mr Singh.

15. [26]

    This was material, the appellants submitted, from which a jury could readily draw an inference that Mr Pahuja had had dealings with Mr Bebawy on at least one prior occasion, which must have been with another person whom he was assisting. His apparent attempt to distance himself even from the assistance given to Mr Singh by saying that he had not entered the office with Mr Singh (although he had helped Mr Singh by attending meetings on more than one occasion, including with Mr Chand), and that he had remained in the waiting room for no more than two minutes, relying on Mr Singh to provide to him all the information about the fees which he passed on to Mr Chand, demonstrated such a high level of anxiety about his association with Mr Bebawy as to render his denials highly implausible.

16. [27]

    There was an issue as to whether it was open to the appellants to rely upon any inference that Mr Pahuja had lied in his evidence when he denied involvement in the alleged scam. [15] The judge rejected the proposition in the following terms:

17. [28]

    The appellants contended that that conclusion was inconsistent with the reasoning of the High Court in Edwards v The Queen, [16] to which the judge had been taken in the course of submissions. The appellants also referred to Steinberg v Federal Commissioner of Taxation, [17] and Cross on Evidence. [18]

18. [29]

    It is no doubt true that one cannot torture a statement, “I did not do the act,” to extract an admission that “I did do the act”. [19] However, if there is evidence to the contrary, a conclusion that the witness is lying to avoid admitting the truth of what is put to him or her, may well constitute affirmative evidence. As JD Heydon observed in 1973, [20] referring to the facts in Scruby v The Queen: [21]

19. [30]

    It is not necessary to cite extensive authority for the proposition that a person may make an admission against interest by conduct. A lie in relation to a material issue may constitute such conduct. Steinberg was a case in which the purpose for which land was acquired, either for use or for resale, was a critical fact. The trial judge (Mason J) had rejected the appellant’s evidence. In dismissing the appeal, Gibbs J stated: [22]

20. [31]

    There is no logic which denies that proposition, especially in circumstances which involve a party as a witness claiming that everything that he said in a recorded meeting (which he had no reason to think was being recorded) was “false” or a “fabrication”. He was either lying at the meeting, or he was lying in denying the truth of what he said at the meeting. It should have been accepted that his evidence, if disbelieved, could have provided support for the defence as pleaded by the appellants. No doubt the jury might have been given appropriate warnings as to the possibility of other explanations, but this was not a criminal trial and the circumstances were in any event somewhat unusual.

21. [32]

    It is true that the trial judge heard Mr Pahuja give evidence and this Court lacks that advantage. However, the judge did not rely upon that fact, nor suggest that there was some aspect of his demeanour or some other factor not capable of being derived from a transcript which demonstrated that the jury could not reasonably have concluded that he was lying in the witness box.

22. [33]

    For these reasons, the trial judge was in error in withdrawing the defence of truth from the jury with respect to imputations (h) and (j).

23. [34]

    For reasons given above, imputation (a) did not require a finding that Mr Pahuja had introduced more than one person to Mr Bebawy; the evidence that he was knowingly involved in a “scam” to obtain 457 visas could have been satisfied by the steps he took with respect to Mr Singh’s application. It was reasonably open to the jury to accept the evidence contained in the tape of the recorded meeting without having to draw a positive inference from any lies which may have related to his role at the meeting. Accordingly, it was an error to withdraw the defence of truth from the jury with respect to imputation (a).

Operation of defences - truth and contextual truth

1. [35]

   The defence of contextual truth is covered by s 26 of the Defamation Act, which needs to be read in association with s 25:

2. [36]

   The issues raised at trial were twofold. First, there was a question as to whether the defence of justification in s 25 and thus also in s 26, is an all or nothing matter: in other words, is the reference to “defamatory matter” in the chapeau capable of a distributive operation so that a contextual imputation may provide a defence with respect to one part of the defamation, but not with respect to another?

3. [37]

   The second issue related to the relevance of imputations which have been relied on by the plaintiff and found to be conveyed and defamatory, but to which the publisher has successfully relied upon the s 25 defence, showing that they were substantially true. The reference to a contextual imputation being carried “in addition to the defamatory imputations of which the plaintiff complains” has been held to mean that, even if substantially true, they cannot be relied upon as contextual imputations.

4. [38]

   The trial judge held that she was bound to answer both questions adversely to the submissions of the appellants. That meant that the contextual imputation relied upon had to be capable of preventing the totality of the defamatory imputations causing further harm and that no reliance could be placed for this purpose on any imputation relied on by the plaintiff which had been proved substantially true. [23] The judge concluded:

5. [39]

   On one view it is unnecessary to address this matter further because there must be a retrial with respect to the truth of the imputations subject to a defence which was withdrawn from the jury. On that view, it will not be possible to know the potential harm to the plaintiff’s reputation until it is known which imputations unlawfully caused such harm. In this Court, the contextual imputation pleaded was said to involve the fact that the plaintiff had repeatedly told lies under oath about his involvement with Mr Bebawy. However, that complaint could not form part of a contextual imputation derived from the publication of the defamatory matter. The denials under oath occurred at the trial. They may have been relevant to the question of damages, but not to the defence under s 26. The appellants did not challenge the findings as to the construction of s 26 adopted by the trial judge.

6. [40]

   It follows that, subject to an issue as to the operation of s 25 raised by the plaintiff, the appellants should succeed with respect to their complaints about the withdrawal of their defence with respect to three imputation being withdrawn from the jury. Ordinarily that conclusion would necessitate a retrial. The plaintiff resisted that conclusion on the basis that it was not open to a defendant to succeed on a defence of substantial truth unless it justified the whole of the defamatory matter, and not just individual imputations. Because, the argument proceeded, there was no longer any claim that imputation (g) was substantially true, the defence must fail in any event. The plaintiff accepted that the justified imputations could be taken into account in reducing damages, but asserted that there was no challenge to the assessment of damages. [24] The plaintiff further submitted that an imputation relied on by the plaintiff but successfully justified by the defendant under s 25 could not be taken into account against the plaintiff in support of a defence of contextual truth under s 26. [25]

7. [41]

   Although counsel submitted that her propositions flowed from the ordinary meaning of s 25 and s 26, that is by no means self-evidently correct. Indeed, the authorities demonstrate a significant level of confusion as to the operation of ss 25 and 26 of the Defamation Act and even as to the proper approach to resolving the issues of construction. It is therefore necessary to consider how those provisions operate.

8. [42]

   Regrettably, it is not easy to summarise succinctly the operation of the law in this area. To the extent that this Court bears part of the responsibility for that situation, it is desirable that it be rectified, so far as possible. However, the submissions did not fully address the conflicts, nor invite this Court to reconsider any existing authority. Sufficient should be said to reject the plaintiff’s contention that, in the event that the errors identified in the notice of appeal are upheld, no retrial is warranted

9. [43]

   There appear to be two somewhat inconsistent reasons for the current level of uncertainty. On the one hand, significant attention has been given to understanding the contextual background of the legislation, relevantly said be the “common law” principles governing defamation. That turns on the statement in s 6(2) of the Defamation Act that the 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).” Accepting that to be so, it does not follow that the common law will necessarily provide useful guidance at the initial stage of construing the Defamation Act. In particular, it is quite unlikely that the “common law” will provide relevant guidance when construing the statutory defence of contextual truth, being a defence unavailable at common law. Indeed, assistance in construing the Act by reference to New South Wales case law is a particularly fraught exercise in circumstances where s 6(3) requires that the general law is to be understood as if the Defamation Act 1958 (NSW) and the Defamation Act 1974 (NSW) “had never been enacted”.

10. [44]

    The principal cases in this Court have elided the language of s 6, preferring to refer to “the common law”, rather than the statutory reference to “the general law”. Thus, in Fairfax Media Publications Pty Ltd v Kermode [26] and Fairfax Digital Australia & New Zealand Pty Ltd v Kazal, [27] the “general law” was only referred to when quoting s 6 (or the explanatory memorandum), whereas there were 30 and 25 references respectively to the “common law”.

11. [45]

    The concept of the common law, in such a context, is somewhat fraught. If it is taken to refer exclusively to judge-made law, allowance would have to be made for the fact that there have been Defamation Acts in New South Wales since 1901. [28] Relevantly for present purposes, s 7 of the Defamation Act 1912 (NSW) made express provision with respect to the defence of justification which was considered Howden discussed below.

12. [46]

    Further, many of the English cases referred to as revealing the “common law” arose at a time when English law was also the subject of statutory enactments. A leading text on defamation law in the UK, [29] refers to the Libel Act of 1792 [30] which was followed by numerous Libel Acts in the course of the 19th century, followed by a major consolidation in the Defamation Act 1952 (UK), which has been significantly affected by the Human Rights Act 1998 (UK), and was replaced by the Defamation Act 2013 (UK). It is true that none of these Acts produced a code, and earlier legislation had less coverage than later legislation.

13. [47]

    It is no longer practicable to unscramble the principles which now constitute the tort of defamation so as to identify which aspects were entirely judge-made law, which derived from statute and which resulted from judicial interpretation of statutes. It is likely that such an understanding underlay the use by the drafter of the uniform Defamation Acts of the term “the general law in relation to the tort of defamation”, rather than the common law. That reference should be understood to include general legal principles which cannot readily be traced immediately to a specific statutory provision. That in turn provides a useful context to understand s 6(3) requiring that “the general law as it is from time to time applies for the purposes of this Act as if the following legislation had never been enacted” referring to the 1958 and 1974 Defamation Acts in this State. Accordingly, the better course in considering whether there is inconsistency between the 2005 Act and the general law is to consider the legislation by reference to broader general law principles, rather than by reference to specific rules said to be part of “the common law” of defamation.

14. [48]

    The second, and potentially conflicting approach, has been to read these provisions as if they contained no element of nuance or ambiguity. However, there is undoubtedly ambiguity at a number of levels.

15. [49]

    First, a superficial consideration of both sections might lead to the conclusion that each provides a singular defence which either provides an answer to the plaintiff’s cause of action in defamation, or it does not. That is because the statutes provide “a defence to the publication of defamatory matter”. On the other hand, what the defendant must demonstrate under s 25 to be substantially true is not “the defamatory matter” but “the defamatory imputations carried by the matter of which the plaintiff complains”. Accordingly, and appropriately, a defendant will plead the substantial truth of the imputations identified by the plaintiff. A similar structure may be found in s 26. This reasoning led McColl JA in Kermode to the following conclusions:

16. [50]

    If correct, a similar approach must be adopted to the defence of justification under s 25, to the extent the language is similar. Despite the pleading in the present case, which involved imprecise imputations with a high degree of overlap, properly pleaded imputations should be precise and distinctive. It must follow that to plead substantial truth to three out of five defamatory imputations cannot provide a defence to the plaintiff’s whole cause of action and, presumably, should thereby be struck out, unless it is permitted to remain as a pleaded defence against the possibility that the other two imputations (which are not substantially true) may be rejected by the jury as either not conveyed or not defamatory. In the present case, the defendant was allowed to plead substantial truth to seven out of 11 pleaded imputations without demur; the other four were rejected by the jury as not conveyed or not defamatory.

17. [51]

    There is a further problem with this construction of the legislation: how is a successful defence of substantial truth with respect to fewer than the whole number of pleaded imputations to affect the plaintiff’s cause of action if they do not constitute a “defence” to the whole cause of action? Assuming some effect, there are two possible outcomes. One is that those imputations must from then on be disregarded, so that they cannot harm the plaintiff’s reputation, nor support a defence of contextual truth. The alternative is that they diminish the plaintiff’s reputation prior to assessment of the harm caused by the other imputations.

18. [52]

    One way of achieving the latter effect is, contrary to the apparent conclusion in Kermode at [82], to allow the defence to contingently “plead back” any of the plaintiff’s imputations found to be substantially true. The reason why that was found to be inappropriate under s 26 was that the defendant’s contextual imputations were described in par (a) as being “in addition to” the defamatory imputations of which the plaintiff complains. Section 26(a) has been held to create two categories of imputation being, first, those of which the plaintiff complains and, secondly, the “additional” imputations relied on by the defendant.

19. [53]

    In seeking to summarise the more extensive statements set out above, McColl JA in Kermode stated:

20. [54]

    The language of “nuance imputations” and “partial justification” appear to be the courses of conduct “based on the common law”, as discussed in Kermode at [50] (partial justification) and [56] (nuance meanings). It was said that partial justification could be relied upon in mitigation of damages: Kermode at [59(c)]. Although the principles stated at [86] were said to rely partly on the Defamation Act and partly on the common law, the reasons did not address the question of consistency with s 25 and s 26 of the Act.

21. [55]

    It may be doubted whether the principle of partial justification identified in Kermode was entirely consistent with earlier authority. In Howden v “Truth” & “Sportsman” Limited, [32] a publication by the defendant alleged that the plaintiff had been convicted and sentenced on charges involving dishonesty. The defendant’s plea of truth went only to the conviction and sentence, which had in fact been set aside. The High Court concluded that the allegations were not true. (Section 7 of the Defamation Act 1912 (NSW) required that the plea should also demonstrate that the publication was for the public benefit.) Evatt J stated: [33]

22. [56]

    When the matter came back to the Supreme Court, an amended plea was struck out. The publisher appealed, in the course of considering which, Jordan CJ stated: [34]

23. [57]

    It follows from these statements, assuming that they reflect “the general law”, that justification in part was permissible as a defence with respect to truly distinct and separate imputations. Howden was relied upon by McColl JA when the operation of s 26 of the Defamation Act arose in Kazal. Again referring to the “common law”, McColl JA stated:

24. [58]

    McColl JA addressed the inter-relationship of s 25 and s 26 in Kazal in the following terms:

25. [59]

    If, as accepted at [20], a substantially true imputation “has the effect of lowering the plaintiff’s reputation” it is not clear why a jury should be directed to ignore that fact in applying the weighing exercise required by s 26(b). That is quite a different exercise from applying the finding in mitigation (reduction) of damages, an exercise which must derive from the general law, as it finds no reflection in the Defamation Act.

26. [60]

    McColl JA continued in Kazal:

27. [61]

    This reasoning is not presently the law in this State. It attracted the disagreement of the majority in Kazal. Meagher JA identified the question in issue as “whether a plea of contextual truth under … 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’.” [36] Importantly, there was a qualification with respect to the question so identified:

28. [62]

    There is a difference between the substantially true imputation falling away and the substantially true imputation ceasing to be a defamatory imputation complained of by the plaintiff and becoming “capable of being adopted by a defendant as a contextual imputation”, as pleaded by the appellant in that case. [37] Meagher JA rejected the reasoning of McColl JA, suggesting that her approach had not been adopted by either party, and continued:

29. [63]

    Gleeson JA also rejected the approach of McColl JA:

30. [64]

    In Chel v Fairfax Media Publications (No 6), [38] decided before Kazal, Beech-Jones J, in the course of a trial, was required to choose between two propositions in relation to the operation of s 26. The defendant had established the truth of some, but not all, of the plaintiff’s imputations. Neither party suggested that the harm caused by the justified imputations should be considered as resulting from the imputations of which the plaintiff complained, for the purposes of the contextual truth defence. Rather, the plaintiff submitted that those imputations which had been held to be substantially true should be disregarded in carrying out the weighing exercise under s 26(b); the defendant submitted that such imputations could be taken into account on the defendant’s side of the balance, as they were no longer imputations of which the plaintiff complained.

31. [65]

    Beech-Jones J first considered whether he was bound to follow the judgment of the Queensland Court of Appeal in Mizikovsky v Queensland Television Ltd. [39] He observed that Mizikovsky would require that the success of a defendant in demonstrating the substantial truth of some of the plaintiff’s imputations should be disregarded for the purposes of s 26, so that those imputations remained in the balance on the plaintiff’s side of the record as demonstrating part of the harm suffered (the position later approved in Kazal). Beech-Jones J accepted that that (counterintuitive) conclusion was inconsistent with Kermode and other authority in New South Wales and should not be followed. This Court had already suggested that Mizikovsky and Kermode could not stand together. [40] (Neither party in Chel had suggested otherwise.)

32. [66]

    The substantive issue in Chel was whether a defamatory imputation found to be substantially true was no longer an imputation of which the plaintiff complains and was therefore one which could be relied on by the defendant as a contextual imputation; the alternative was that it should simply be disregarded. Beech-Jones J concluded that it was correct to say that the imputation was no longer one of which the plaintiff complained, but that it could not simply be disregarded. Section 26 “does not contemplate the existence of a defamatory imputation found to be substantially true that is not either a ‘defamatory imputation of which the plaintiff complains’ or ‘[an]other imputation … that [is] substantially true’. A defamatory imputation found to be substantially true must be one or the other.” In Kazal, both McCallum J (the trial judge) and this Court unanimously rejected the first limb, namely that the justified imputation is no longer one of which the plaintiff complains. [41]

A purposive interpretation – s 25 and s 26

1. [67]

   It is patent from the contradictory state of the case law that the language of s 26 is not easy; its interpretation involves choices. Reasoning which focuses upon the words used in ss 25 and 26, as if there were no choices to be made, is untenable. If a choice has to be made regard must be had to the requirement of s 33 of the Interpretation Act 1987 (NSW) that a construction that would promote the purpose or object underlying the provision shall be preferred to a construction which would not promote that purpose or object.

2. [68]

   It is convenient to start by identifying the key choices by reference to the language of the provisions. First, as was noted in Kazal, both provisions refer to “the defamatory imputations of which the plaintiff complains”. [42] This phraseology, it was suggested, could only refer to the imputations pleaded by the plaintiff, which were a fixed group of imputations and did not change over time. The plaintiff did not cease to complain about imputations which were found to be substantially true.

3. [69]

   An alternative approach has regard to the sequential determination of the issues in a defamation trial. The imputations pleaded may be found by the judge or jury not to be conveyed, or, if conveyed, not to be defamatory. If an imputation fails at either of these points, one never reaches s 25; in other words, the jury (or judge) will never be asked to consider whether it is substantially true. It seems uncontroversial that such an imputation will fall away for all further purposes in the trial; however, it must follow that the reference in ss 25 and 26 to “the defamatory imputations of which the plaintiff complains” is not to a fixed and immutable group of imputations.

4. [70]

   Further, practice, though not the statute, involves the defence of justification (s 25) being addressed before the defence of contextual truth (s 26). Accepting that process, there is nothing in the statutory language to suggest that a reducible category of defamatory imputations of which the plaintiff complains cannot be further reduced by the removal of those found to be substantially true, before considering the defence of contextual truth.

5. [71]

   Nor is the use of the term “harm” in s 26 necessarily inconsistent with that conclusion. The section requires one to ask whether a substantially true contextual imputation (or the underlying charge) causes “further harm” to the plaintiff’s reputation. The underlying purpose of the tort of defamation is to allow a person to recover damages for harm caused to his or her reputation, but not by speaking the truth. It is arguably inconsistent with that purpose to allow the plaintiff to continue to rely upon harm caused by an imputation found to be substantially true for the purpose of defeating a defence of contextual truth.

6. [72]

   The case against this reasoning rests in part on the fact that the plaintiff’s cause of action arises from the publication of defamatory matter and not, as under the 1974 Act, a separate cause of action with respect to each imputation. However, that reasoning relies upon the repeal of the 1974 Act in order to construe a provision of the 2005 Act. That would appear to contradict the prohibition in s 6(3). Furthermore, as explained in Howden, justification of part of the defamatory charge has always been possible, where the charge contains separate and severable allegations.

7. [73]

   Section 25 requires the defendant to prove that specific imputations are substantially true; it does not say that the defence arises only if the defendant proves that all the defamatory imputations are substantially true. It is not inconsistent with the language of s 25 that a defamatory imputation which is substantially true should be disregarded in considering the harm done to the reputation of the plaintiff. It has been held that the weighing exercise in s 26 does not involve the weighing of the imputations, but the weighing of the harm done by the material upon which the imputations are based. [43] Section 26 provides that it is the harm caused by the substantially true imputations relied on by the defendant which fall onto its side of the scale.

8. [74]

   It is only if the term “harm” in s 26(b) covers both lawful and tortious harm that this exercise could be justified. The reasoning that it does depends on the assumption that the plaintiff’s imputations, even if justified by the defendant, do not fall away. But the purpose of the statute is to provide compensation for harm tortiously caused. The plaintiff has no right to rely upon harm which is not tortiously caused. It does not promote the apparent purpose of the provision to place substantially true allegations on the plaintiff’s side of the scale. The purposive approach suggests that (i) the interpretation of “harm” as covering the effects of both tortious and lawful statements may be erroneous, and (ii) the underlying implication that the plaintiff’s imputations are those that appear in the pleading, may be wrong.

9. [75]

   The final question is whether the defendant is entitled to rely upon imputations pleaded by the plaintiff which have been proved to be substantially true. Once it is accepted that imputations not conveyed, or not defamatory, or found to be substantially true fall out of the category of imputations of which the plaintiff complains for the purposes of s 26, the statutory purpose is not served by denying the defendant the right to rely upon those imputations just because they were relied on, unsuccessfully, by the plaintiff. To deny the availability of such a course would be to encourage plaintiffs to plead the most serious imputations available, even if they believe them to be substantially true, in order to deny a defendant the right to rely upon the lawful effect of such a charge on the reputation of the plaintiff. Such a result would be a triumph of pleading rules over the substantive purpose of the tort. On a purposive approach it would not be accepted in the absence of clear language to that effect.

Conclusions

1. [76]

   Despite foreshadowing before the trial judge a challenge to the reasoning in Kazal, that challenge was not mounted by the appellants on the appeal. The trial judge was required to, and did, follow Kazal in concluding that the defendants could not call in aid defamatory imputations relied upon by the plaintiff shown to be substantially true. [44] Despite doubts that the approach of the majority in Kazal was consistent with Kermode, it is to be followed until this Court is invited to reconsider it and does so.

Orders

1. [77]

   The judge made orders awarding damages in an amount of $300,000, together with interest on the judgment at the rate of 3.5% from the date of publication, being 28 April 2015: see orders (1) and (2) made on 29 June 2018. Costs orders were made against the appellants, including costs on an indemnity basis from 31 August 2015: orders (3) and (4). The notice of appeal sought orders allowing the appeal, and setting aside orders (1)-(4), together with an order that there be a new trial on all issues including damages and an order for the appellants’ costs in this Court.

2. [78]

   Even on the respondent’s case, a successful plea of justification to fewer than the whole of the imputations relied on by the plaintiffs may affect the assessment of damages. It is true that the appellants did not challenge the assessment made on the basis of the findings at trial, but it does not follow they would not be entitled to seek a lower award of damages in the event that other imputations were found to be justified. For that reason, the respondent’s resistance to an order for a retrial must be rejected.

3. [79]

   Ultimately there were no specific submissions as to how the issues on a retrial could be limited, so as to avoid a rehearing of the whole matter. In the absence of precise submissions in that regard, no constraint should be imposed.

4. [80]

   The appellants have succeeded without agitating the foreshadowed challenge to the correctness of the reasoning in Kazal. Although a specific argument with respect to the contextual imputation pleaded by the defendant has been rejected, the appellants have been entirely successful in the relief they sought and should have their costs of the appeal.

5. [81]

   The Court should make the following orders:

   1. (1)

      Allow the appeal from the judgment of McCallum J given on 23 October 2018.

   2. (2)

      Set aside orders (1)-(4) made by McCallum J on 29 June 2018.

   3. (3)

      Order that there be a new trial of the matter.

   4. (4)

      Direct that the costs of the first trial be determined in the course of the new trial.

   5. (5)

      Order that the respondent pay the appellants’ costs in this Court.

   6. (6)

      Grant the respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

6. [82]

   PAYNE JA: In Edwards v The Queen (1993) 178 CLR 193 at 208-209; [1993] HCA 63, Deane, Dawson and Gaudron JJ said:

7. [83]

   A deliberate lie told in consciousness of guilt may be considered by the jury with other evidence in order to determine guilt to the requisite standard. A lie of this kind can be a “strand in the rope” in a circumstantial case: see Shepherd v The Queen (1990) 170 CLR 573; [1990] HCA 56 cited in Edwards at 210. A fortiori, a lie told by a plaintiff in the context of a defamation hearing (whether in or out of court), if told in consciousness of guilt, may constitute evidence against the plaintiff. Whether the plaintiff lied and whether any lie was told in consciousness of guilt were, in the present case, questions for the jury.

8. [84]

   I agree with Basten JA, for the reasons given by his Honour that the defence of truth should not have been taken away from the jury with respect to imputations (h) and (j). I also agree, for the reasons given by Basten JA, that imputation (a) did not require a finding that Mr Pahuja had introduced more than one person to Mr Bebawy and that the defence of truth should not have been withdrawn from the jury in relation to imputation (a).

9. [85]

   The issue about the operation of s 25 of the Defamation Act was only raised in this Court by junior counsel for the respondent at the conclusion of the respondent’s oral submissions. It was a submission premised on the argument that the power of this Court to order a new trial was not engaged here by reason of the absence of an appeal from the damages judgment in Pahuja v TCN Channel Nine Pty Ltd (No 3) [2018] NSWSC 893 coupled with the jury’s finding that imputation (g) was conveyed and was not true.

10. [86]

    The argument about the correct construction of s 25 of the Defamation Act advanced in this Court was not the subject of any written submissions from the respondent or any notice of contention. The argument had been foreshadowed at the trial and withdrawn as opposing counsel objected that he had no notice of the argument:

11. [87]

    The appellant submitted that this Court should not address a difficult argument about the proper construction of s 25 of the Defamation Act which had been raised, and then withdrawn, before the primary judge and which was not the subject of any written submission or proper notice in this Court. I agree. It is not appropriate, under the guise of an argument about whether there must be a new trial, to determine the proper construction of s 25 of the Defamation Act in circumstances where that construction issue had been raised before the primary judge and then withdrawn.

12. [88]

    This case is not an appropriate vehicle to consider the difficult issues about ss 25 and 26 of the Defamation Act or the content of the “general law” referred to in that Act. Such consideration should await a case where the issues squarely arise and each side is given a proper opportunity to address the case. This is not least because, properly to address these questions, it may be necessary to consider the correctness of at least one previous decision of the Court.

13. [89]

    The findings concerning imputations (a), (h) and (j) are dispositive of the appeal. This Court cannot itself decide the remaining issues between the parties and there must be a retrial. It is undesirable for this Court to try and confine the issues to be determined in that retrial and I agree with Basten JA that this Court should not do so.

14. [90]

    I agree with the orders proposed by Basten JA.

15. [91]

    SIMPSON AJA: The relevant facts and circumstances are set out in detail in the judgment of Basten JA, which I have read in draft. It is unnecessary to repeat them. The following assumes a familiarity with the facts as there recounted.

16. [92]

    In short, Mr Pahuja sued on a television program (“A Current Affair”) which, he pleaded, conveyed a number of imputations defamatory of him. The theme of the program, reflected in the pleaded imputations, was what was portrayed as an exploitative and dishonest migration scheme in which Indian nationals seeking approval to live in Australia were charged extortionate sums of money by a migration agent, Mr Mofid Bebawy. Mr Pahuja pleaded, in various formulations, that the program imputed to him dishonest and unscrupulous involvement in the scheme.

17. [93]

    Of seven imputations pleaded by Mr Pahuja, the jury found five to have been conveyed and to have been defamatory. The appellants pleaded, under s 25 of the Defamation Act 2005 (NSW), that each was substantially true. The primary judge permitted that defence to go to the jury only in respect of imputations (d) and (g). Those imputations were:

18. [94]

    The primary judge determined that the evidence on which the appellants relied was not capable of establishing the substantial truth of imputations (a), (h) or (j) and therefore declined to allow the defence to go to the jury in respect of those imputations.

19. [95]

    The appellants also pleaded a defence of contextual truth under s 26 of the Defamation Act. The primary judge declined to allow that defence to go to the jury.

20. [96]

    The appellants now appeal against the orders subsequently made. They assert that the refusal to allow the jury to consider the defence of substantial truth in relation to imputations (a), (h) and (j) was erroneous, as was her Honour’s refusal to allow the defence of contextual truth to go to the jury.

21. [97]

    The presently relevant imputations are:

22. [98]

    The first issue on the appeal concerns whether the primary judge erred in declining to allow the jury to consider the defence of substantial truth in relation to imputations (a), (h) and (j) (or any of them). The second issue concerns her refusal to allow the jury to consider the defence of contextual truth.

23. [99]

    The case the appellants proposed to make to support the defence of substantial truth was particularised in a Defence to the Further Amended Statement of Claim filed in court on the second day of the trial. It relied exclusively on the content of the conversation of 1 April 2015 between Mr Pahuja, Mr Satnam Singh and Mr Pramesh Chand, to which reference is made in the judgment of Basten JA at [5] and [23], and which was recorded secretly by Mr Chand. The recording was Exhibit 1 in the trial. An agreed transcript was made available to the jury and to this Court. It was (and is) the appellants’ case that statements made by Mr Pahuja in the conversation implicated him in Mr Bebawy’s migration scheme, and thus proved the truth of the imputations. The appellants also placed some reliance on evidence of bank records of Mr Singh. Other than that, the appellants did not adduce any evidence to support their claim that the imputations were substantially true. As will appear below, however, they sought to rely on evidence given by Mr Pahuja and Mr Singh in the trial, in a manner to which I will come.

24. [100]

    In order for the appellants to succeed on the defence, it was therefore necessary that the appellants establish the truth of what was said during the course of the conversation, and any inferences that could be drawn therefrom.

25. [101]

    The name “Mofid” (Bebawy) was mentioned at an early stage in the conversation, by Mr Chand. Thereafter there were statements attributed to Mr Pahuja capable of the construction that he had a degree of familiarity with Mr Bebawy’s operation. For example, in answer to a question by Mr Chand about the fees charged by Mr Bebawy, Mr Pahuja said “60, 61 thousand in total”. As recorded in the transcript, he added:

26. [102]

    There were other statements from which an inference might be drawn that Mr Pahuja had had some dealings with Mr Bebawy.

27. [103]

    However, Mr Pahuja and Mr Singh gave evidence in the trial to the effect that what they had said in the course of the conversation was not true. Mr Pahuja said that he had not, before 30 March 2015, met Mr Bebawy or had a telephone conversation or any other communication with him. He said that he and Mr Singh had deliberately misled Mr Chand about what they asserted to be a superior service provided by Mr Bebawy as a migration agent. (Mr Chand was himself a migration agent who had provided some services to Mr Singh, although Mr Singh was dissatisfied with the outcome.) Mr Pahuja’s explanation was that they were trying to make Mr Chand jealous. It was the appellants’ case that these explanations were patently false and improbable and:

28. [104]

    The appellants therefore had two contradictory accounts of Mr Pahuja’s activities or involvement with which to deal. On the one hand, there was the incontrovertible evidence (although subject to interpretation) of what Mr Pahuja had said, as captured in the tape recording. On the other hand, there was the evidence in Mr Pahuja’s case that the inferences the appellants sought to have drawn from the recording could not be drawn because the statements therein made were not true. If the appellants could not persuade the jury that what was said in the tape recorded conversation represented the truth, they could not succeed in the defence of truth of any of the presently relevant imputations.

29. [105]

    The preliminary issue is whether the evidence – as a whole – provides a sufficient basis to warrant the question of substantial truth going to the jury. That required, in the first instance, an evaluation of the content of the tape recorded conversation, and of the available inferences from that conversation. For that purpose, it was neither necessary nor appropriate to consider the explanation of the recording given in evidence. If the recording, of itself, were sufficient to establish the truth of the imputations (or any of them) it was not necessary to go any further. That alone would have been sufficient to allow the defence to go to the jury and it would not have been necessary to consider the evidence given by Mr Pahuja and Mr Singh.

30. [106]

    If, however, the evidence on the tape recording were not sufficient of itself to be capable of establishing the truth of the imputations (or any of them) a secondary, and more difficult, question arises: were the appellants entitled to rely on what they contend was the falsity of the evidence given by Mr Pahuja in particular, and Mr Singh, in further support of an inference that the imputations were true?

31. [107]

    The question then is what inferences would be available to a jury were it to conclude that Mr Pahuja’s explanations for the content of the tape recorded conversation and his denials (for example) of knowing Mr Bebawy were false?

32. [108]

    The appellants’ contention is that they would be entitled to invite the jury to draw an inference that the denials were made and the explanations given out of a consciousness that the truth – that is, the truth of what was recorded and the inferences to be drawn from what was recorded – would implicate him in one or more of the types of misconduct asserted in the imputations.

33. [109]

    The primary judge accepted a submission made on behalf of Mr Pahuja that:

34. [110]

    The primary judge accepted, as submitted on behalf of Mr Pahuja, that:

35. [111]

    In my respectful opinion, that is too narrow an interpretation of imputation (a). Proof of the truth of that imputation does not, in my opinion, require proof that Mr Pahuja was himself involved in multiple instances of exploitation of overseas residents seeking visas permitting them to work in Australia. What it requires is proof that the “scam” in which he was said to have been involved exploited overseas residents (plural). The overall content of the recorded conversation was capable of proving that Mr Bebawy’s activities extended to more than one such person and that Mr Pahuja was “knowingly involved” in that activity. To repeat, it was the “scam” which needed to be shown extended to multiple “victims”; it was not necessary that the appellants show that Mr Pahuja had a role in relation to more than one “victim”. What the appellants had to prove was that Mr Pahuja was “knowingly involved” in the “scam”, and that the “scam” extended to more than one “victim”.

36. [112]

    The content of the recorded conversation, taken as a whole, was capable of establishing those two facts.

37. [113]

    In my opinion, therefore, the evidence of the recorded conversation alone was sufficient to warrant to truth of imputation (a) being left to the jury.

38. [114]

    It is otherwise in relation to imputations (h) and (j). These imputations explicitly assert conduct on the part of Mr Pahuja by “directing persons” (imputation (h)), and arranging meetings between “foreigners” and Mr Bebawy (imputation (j)). The evidence in the tape recording was not capable of establishing that Mr Pahuja had directed more than one person to Mr Bebawy or that he had arranged meetings between more than one “foreigner” and Mr Bebawy.

39. [115]

    That makes it necessary to consider the secondary element of this aspect of the appeal. The appellants’ case is that the jury could use what they (the appellants) contended was the palpable falsity of the evidence given in the trial by Mr Pahuja and Mr Singh to establish the truth of what was said in the conversation, and therefore the truth of the imputations. Would the jury have been entitled to factor into its consideration of the truth of the imputations Mr Pahuja’s evidence in the trial? This argument proceeds on the assumption that the jury accept the appellants’ contention that the evidence he gave (and, possibly, the evidence that Mr Singh gave) was deliberately false.

40. [116]

    The primary judge rejected the appellants’ argument, on the basis that proof that a witness has lied in respect of a factual proposition does not establish the converse. She referred to Hobbs v C T Tinling & Co Ltd [1929] 2 KB 1, in which Scrutton LJ said:

41. [117]

    In Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63 Gibbs J (as he then was) said:

42. [118]

    In a defamation case, the following was said:

43. [119]

    That the statement in Hobbs is not, and cannot be, a blanket proposition, can be illustrated by the jury’s verdict in this case in relation to imputation (d), which was:

44. [120]

    But such a conclusion could not establish that Mr Pahuja “acted as a fixer” for Mr Bebawy, by directing persons seeking visas to him (imputation (h)); nor could it establish that he “arranges meetings between the foreigners” and Mr Bebawy.

45. [121]

    What the appellants cannot avoid is that the imputations of which they set out to establish the truth accused Mr Pahuja of “directing persons [plural] to” Mr Bebawy and of “arrang[ing] meetings between the foreigners [plural] and” Mr Bebawy. Each of those necessitates proof of Mr Pahuja’s involvement with more than one “person” or “foreigner”.

46. [122]

    Even if the jury were to accept that Mr Pahuja’s explanation in his evidence was deliberately false, the most that it could do is to reinforce or strengthen the inference that what he said in his recorded conversation was true. But, as I have already concluded, there is nothing in that conversation that is capable of establishing his involvement with respect to more than one “person” or more than one “foreigner”. A finding that the evidence given in the trial was false could not be used to fill the gaps in the appellants’ evidence. The position is analogous to that which arises where a witness, who might be expected to be called by a party, is not called, and no explanation is provided: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. The unexplained absence of the witness may permit any inference adverse to the party that is available on the evidence to be drawn with more confidence; it does not permit adverse findings of fact for which there is no basis in the evidence: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 at [232] (per Heydon J). The falsity (if the jury so found) of the evidence given in the trial by Mr Pahuja could not make up for deficiencies in the appellants’ case.

47. [123]

    Since the content of the recorded conversation was insufficient to prove the truth of either imputation (h) or imputation (j), any lies told by Mr Pahuja in his evidence could not give rise to inferences not otherwise available.

48. [124]

    The primary judge was therefore correct, in my opinion, to decline to allow the truth of imputations (h) or (j) to go to the jury on the basis that their truth could be established (or supported) by false evidence given by Mr Pahuja in the trial.

49. [125]

    Section 26 of the Defamation Act provides as follows:

50. [126]

    Although the appellants had initially pleaded three contextual imputations, at trial they relied on only one, as follows:

51. [127]

    In support of the truth of the proposed contextual imputation, the appellants relied on what were asserted to have been false statements made by Mr Pahuja in a statutory declaration, in an affidavit, and in his evidence in the trial.

52. [128]

    The primary judge declined to allow the proposed defence to go to the jury on the basis that, even if the truth of the imputation were established, it could not satisfy the s 26 test – that is, that by reason of the substantial truth of the contextual imputation, the imputations found to have been conveyed and to have been defamatory (and which were not otherwise defended) “do not further harm the reputation of the plaintiff”.

53. [129]

    On appeal, the argument advanced against this ruling depended on the nature of the false statements attributed to Mr Pahuja, and the context in which they were said to have been made. That, however, is not the text of the imputation. The appellants did not seek to plead an imputation that Mr Pahuja lied on oath, or that he had lied in circumstances in which he was bound by statute to be truthful; they pleaded only that he was “a liar”. There are many grades and shades of lying, some more serious than others. In order to establish the relative seriousness of a contextual imputation against defamatory imputations proved by a plaintiff, the evidence in support of the contextual imputation is, in my opinion, irrelevant. I agree with the primary judge that, even if the truth of the contextual imputation were established – that is, that Mr Pahuja was a liar – that was not capable of establishing that the defamatory imputations found by the jury did not further harm Mr Pahuja’s reputation. I would therefore not uphold the appeal in relation to the defence of contextual truth.

54. [130]

    The consequence of these conclusions is that, in my opinion, the defence of substantial truth to imputation (a) ought to have been determined by the jury. There must be a new trial with respect to that issue. In other respects I would dismiss the appeal.

55. [131]

    It follows from my conclusion with respect to the defence of substantial truth to imputation (a) that the award of damages cannot stand and the orders made on 29 June 2018 must be set aside. There is some complexity in the formulation of the precise orders that should follow. In my opinion the parties have had a proper adjudication of all issues other than the substantial truth of imputation (a) and (potentially) the quantum of damages to be awarded (the latter because the award made was based upon the falsity of imputation (a)). There is no purpose in relitigating the issues that have been determined, and, indeed, it is doubtful that it would be proper to do so.

56. [132]

    Were this not a minority judgment, I would consider the appropriate course to be to invite submissions from the parties as to the ambit of a new trial and the orders that should be made. Since this is a minority judgment, it is neither necessary nor appropriate to take that course. These reasons are sufficient indication of the nature of the orders I would make.