AUSTRALIAN CONSOLIDATED PRESS LTD v PATTON SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, KIRBY P and PRIESTLEY JA 20 June 1990, 28 June 1990 [1990] NSWCA 14 DEFAMATION — imputations — separate trials concerning — one of two imputations pleaded by plaintiff upheld by David Hunt J — defendant pleads contextual imputations — Smart J finds that the matter complained of is not capable of conveying the contextual imputations — defendant appeals against both orders — held: (Gleeson CJ; Kirby P and Priestley JA concurring) (1) (affirming David Hunt J) The matter complained of was capable of conveying the defamatory imputation that the plaintiff had consented to a verdict for the defendant in her first action rather than face a trial where the defendant could establish that she had engaged in serious criminal activity; and (2) (reversing Smart J) The contextual imputations pleaded by the defendant to establish the truth of the original allegations made against the plaintiff were permissible under s16 Defamation Act 1974 and should go to the jury. DEFAMATION — practice — separate trials — possible need for future consideration of raised by Kirby P John Fairfax and Sons Ltd v Foord (1988) 16 NSWLR 706 referred to. Defamation Act 1974, s16. Gleeson CJ These are two appeals, brought by leave, against decisions following separate trials of certain questions that aro, e in an action for damages for defamation. In each appeal the appellant is the defendant in the action and the respondent is the plaintiff. The first appeal is against a decision of Hunt J given on the issue of the capacity of the matter published by the defendant to convey two imputations pleaded by the plaintiff. His Honour held that the matter was capable of conveying the first of the two imputations pleaded and was not capable of conveying the second of the two imputations. The defendant appeals against the decision in relation to the first imputation. There is no cross-appeal concerning the decision in relation to the second imputation. Following the decision of Hunt J the defendant filed a defence which placed reliance upon certain contextual imputations pursuant to s16 of the Defamation Act 1974. The plaintiff thereupon sought and obtained a separate trial of a question concerning the capacity of the matter published to convey the contextual imputations relied upon by the defendant. That trial was held before Smart J who found in favour of the plaintiff and held that the matter was not capable of conveying any of the contextual imputations relied upon. The defendant also appeals against the decision of Smart J. The appeals were argued together and it is convenient to deal with them both at the same time. The respondent has sued the appellant in respect of an article about certain previous litigation between the same parties. The article the subject of the present action was published in The Bulletin. The previous litigation arose out of an article published in Australian Business. The appellant is the publisher of both The Bulletin and Australian Business. 2 UNREPORTED JUDGMENTS The article in The Bulletin, which was in some respects an article upon the subject of press freedom and defamation actions, recounted the history of the plaintiff's action in respect of the article in Australian Business. The principal subject matter of that earlier article was a businessman named Mr Butler. Mr Butler and his wife had been kidnapped. At a trial of the alleged kidnappers the Crown case was that they committed the crime under instructions from two Sydney women who were seeking to recover a debt owed by Mr Butler. The present plaintiff sued for defamation, alleging that the article in Australian Business identified her as linked to the kidnapping. She was, apparently, connected with a company that was owed money by Mr Butler. The article in The Bulletin stated that shortly before the action was due to come on for hearing the respondent instructed her counsel to consel to a verdict for the defendant. It is what appeared in the article leading up to that piece of information that gave rise to the respondent's complaint in the present action. The Bulletin article recited that the publisher's defence to the first defamation action was that the report in Australian Business was substantially true and related to a matter of public interest. In particular, the defence case was that the respondent had in truth instructed the kidnappers of Mr Butler and that the respondent was the type of person who was prepared to engage in the criminal activity of obtaining money by unlawful means and was prepared to organise the use of violence in order to recover money allegedly owing to her. Two particular portions of The Bulletin article are presently of special significance. The article included the following statements: HACP also had the evidence of a handwriting expert to link Patton with 'operational notes' found on the kidnappers when they were arrested." (ACP is obviously an abbreviation for the name of the appellant.) "In the end, ACP had invested a great deal of time and money in gathering evidence for its defence. Although a consent verdict in its f avour does not prove the truth of the allegations against the plaintiff, it vindicates the effort and expense involved in defending such an action. Above all, the verdict justifies a publisher's willingness to defend at all costs any article which it believes to be written accurately. " Bearing in mind that, as the article in The Bulletin states, Australian Consolidated Press Limited is the publisher of both Australian Business and The Bulletin, the "publisher" referred to in the concluding paragraph quoted above is, of course, the publisher of The Bulletin article. It follows that the statement of belief in the accuracy of the original article is a statement of the belief held by the publisher of The Bulletin article. Furthermore, although there is nothing in The Bulletin article which states that the respondent knew, at the time she instructed her counsel to consent to a verdict for the defendant in the first action, that the defendant had available to it the evidence of a handwriting expert, the article in The Bulletin informs readers, not only that the publisher of the article believes in the truth of the allegations contained in the first article, but also that there was independent evidence available to it to support those allegations. This reinforces the message that the allegations in the original article were true. It may be added that, as the ordinary reader would clearly understand, if the original allegations were true, the person who would best know that would be the respondent herself. The imputation the subject of the first appeal, which was held by Hunt J to be an imputation that The Bulletin article was capable of conveying, was expressed as follows: URJ AUSTRALIAN CONSOLIDATED PRESS LTD v PATTON (Gleeson CJ) 3 "The plaintiff consented to a verdict in her defamation action in favour of Australian Consolidated Press Ltd because she was frightened that the defendant could establish she had engaged in serious criminal activity." The sole issue before Hunt J was whether the matter was capable of conveying that imputation. There was no argument about whether the imputation was one which a jury could find to be defamatory. Nor was the precise form of the imputation in issue. It may be noted that there is a certain lack of clarity about the imputation as framed. It is not clear whether the gist of it is that the respondent was a coward or that she was a criminal. In this Court her counsel contended for the former interpretation, and said that the battleground upon which the respondent was seeking to fight the present action related to her reasons for consenting to a verdict for the defendant in the first action rather than to the question of the truth or falsity of the allegations originally made against her. There is, however, an element of ambiguity in that statement. If the article in The Bulletin had simply stated, in terms, that the appellant had commenced a defamation action against Australian Consolidated Press Limited and then pulled out of the action because it looked as though the defendant was going to be able to prove that the appellant had engaged in criminal activities, it may be thought that the sting in that article was the suggestion that the appellant was a criminal rather than the suggestion that she was an incautious litigant or a person who started a fight she was afraid to finish. However that may be, and even allowing that some elements of uncertainty exist in relation to the imputation as framed, the issue before Hunt J was whether the matter was capable of conveying the imputation. His Honour held that it was, and I have no doubt as to the correctness of that decision. It was submitted on behalf of the appellant that the article contains no express statement of the reasons why the respondent consented to judgment in the first action and in particular that it neither states nor implies that the reason she did so was that she was conscious of the truth of the allegations against her. It was pointed out, correctly, that there may be many reasons why a person who has commenced a court case might decide not to go through with it. It might equally be observed, however, that the author of the article did not mention any such reasons, or say anything that might draw the attention of a reader to the possibility that they might have existed in the present case. Far from being of the view that the meaning contended for by the respondent is so forced or strained or unreasonable that it should not be permitted to go to a jury, I consider that it would be well open to a jury to conclude that the matter published carried the imputation of which complaint is made. The ordinary reasonable reader could well conclude, from a reading of the article as a whole, that whatever other reasons for the abandonment of the action might exist in theory, the actual reason was that assigned in the imputation. The appeal against the decision of Hunt J should be dismissed. For closely related reasons I consider that the appeal against the decision of Smart J should succeed. The contextual imputations pleaded by the appellant are as follows: "(i) the Plaintiff instructed three men to collect a debt owing by Terry Butler International to Probe Management Pty Limited by unlawful means, including force; 4 UNREPORTED JUDGMENTS (ii) the Plaintiff so conducted herself in relation to the collection of a debt allegedly owing by Terry Butler International to Probe Management Pty Limited so as to give rise to the reasonable suspicion that she instructed three men to collect the debt by unlawful means, including force; (iii) the Plaintiff was the type of person who was prepared to engage in the criminal activity of obtaining money by unlawful means; (iv) the Plaintiff was the type of person who was prepared to organise the use of violence in order to recover money allegedly owing to her; (v) the Plaintiff was directly involved in the commission of a serious criminal offence." In substance the contextual imputations relied upon assert the truth of the original allegations made against the respondent. The appellant's contention is that The Bulletin article conveys the clear message that those allegations were true. In other words, the appellant contends that, if The Bulletin article defamed the respondent, and if it carried an imputation which was in substance one of cowardice in relation to her conduct in the first defamation proceedings, that imputation was contextual to far more serious imputations of alleged criminality, and the provisions of s16 of the Defamation Act apply. Smart J held that The Bulletin article did not assert or imply the truth of the allegations of criminal conduct on the part of the respondent. His Honour said that the ordinary reasonable reader would conclude that this was "a carefully constructed article which avoided saying that the allegations made in the earlier article were true". However, his Honour also said that such a reader would form the impression that the respondent believed that the allegations v.ere true. It is true that there is a distinction, which may sometimes be of importance, between saying that a person is a criminal and saying that a person is believed to be a criminal. Where, however, the publisher of the statement is the person who is also said to entertain the relevant belief, so that the substance of the statement is: "I believe that X is a criminal" the distinction may diminish in importance. In the present case it diminishes to the point of non-existence. As was earlier pointed out, the article does three things. First, it reports the original allegations that were made against the respondent. Secondly, it informs the reader that the appellant had and has in its possession independent evidence of the truth of the allegations. Thirdly, it concludes by informing the reader of the appellant's belief in the truth of the allegations. If that amounts to an attempt care fully to avoid imputing criminality to the respondent it is interesting to speculate as to what the appellant would have written if it had deliberately set out to impute criminality. I consider that an ordinary reasonable reader of the article would take from the matter published the imputation that the respondent was guilty of the conduct alleged against her in the first article. Certainly, at the very least, it would be open to a jury to reach such a conclusion. The appeal against the decision of Hunt J should be dismissed with costs. The appeal against the decision of Smart J should be allowed. The order of Smart J should be set aside and in lieu thereof the claim for a ruling that the contextual imputations pleaded by the appellant are not available to go to a jury should be dismissed. The respondent should pay the appellant's costs of this appeal and of the proceedings before Smart J and, if otherwise entitled, should have a Certificate under the Suitors Fund Act. Kirby P I agree with Gleeson CJ that the appeal against the order of David Hunt J should be dismissed with costs. URJ AUSTRALIAN CONSOLIDATED PRESS LTD v PATTON (Priestley JA) 5 Counsel for the respondent (plaintiff) appeared to resile somewhat from his original assertion that the gist of the imputation, as framed to go to the jury, was that the respondent was a coward rather than a criminal It seems that this possibility had not been raised until the matter came to this Court. The framing of the imputation may need reconsideration, for the sting of the matter complained of is, if anything, the suggestion of criminality on the part of the respondent, not cowardice in the face of litigation. I agree with Gleeson CJ that the contextual imputations pleaded in the defence should go to the jury. I agree with the Chief Justice's reasons and with the orders which he proposes in those proceedings. I reserve to a future case where it is necessary to decide it (and where the matter has been argued), the wisdom of this proliferation of separate trials in defamation proceedings. The Court was informed that it is virtually unique in Australia to this State. I recognise that the facility for separate trials is afforded by Pt31 R2 of the Supreme Court Rules. I also recognise that, occasionally, a separate trial of an issue may be beneficial, particularly where it may dispose of the entire litigation. However, the interlocutory costs and delays, the proliferation of appeals and the potential which the procedure presents for separating the parties from the jury all raise serious questions as to the desirability of the procedure which may one day need to be considered as a question of principle. Cf John Fairfax and Sons Limited v Foord (1988) 12 NSLWR 706, 713, 728. Priestley JA I agree. (Pursuant to leave to appeal to the Court of Appeal earlier granted) 1. Appeal from the order of Hunt J dismissed with costs; 2. Appeal from the order of Smart J allowed and in lieu thereof, order: (a)that the order of Smart J be set aside; (b)that in lieu thereof, the claim for a ruling that the contextual imputations pleaded by the appellant are not available to go to the jury, be dismissed; (c)the respondent to pay the appellant's costs of the appeal and of the proceedings before Smart J; and (d)in respect of the costs of the appeal from the order of Smart J the appellant have, if otherwise so qualified, a certificate under the Suitors' Fund Act 1951. Counsel for the Appellant: McPhee QC Solicitors for the Appellant: Gadens Ridgeway Counsel for the Respondent: C Evatt Solicitors for the Respondent: MJ Ward and Co