Assaf v Skalkos [1999] NSWSC 1328

New South Wales Supreme Court CITATION : Assaf v Skalkos [1999] NSWSC 1328 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 18374/99 HEARING DATE(S) : 01/11/99-17/12/99 JUDGMENT DATE : 9 November 1999

PARTIES : Joseph Assaf & Anor v Theodore Skalkos & Anor JUDGMENT OF : Carruthers AJ at 1

COUNSEL : T E F Hughes QC/K Rees (Plaintiffs) S M Littlemore QC/J R McKenzie (Defendants) SOLICITORS : Mallesons Stephen Jaques (Plaintiffs) T Lazaropoulos (Defendants) CATCHWORDS : Defamation - pleadings - whether on the pleadings defendants may raise defence to alleged imputation that the words complained of should not be construed in their natural and ordinary meaning, but were trade terms. CASES CITED : Bright v Sampson & Duncan Enterprises Pty Ltd [1985] 1 NSWLR 346 DECISION : See para 33.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION CARRUTHERS AJ Tuesday, 9 November 1999 CLD18374/93 Joseph ASSAF & ANOR v Theodore SKALKOS & ANOR EX TEMPORE JUDGMENT- see page 426 of transcript

1 HIS HONOUR: One of the burdens of a trial Judge, particularly in defamation proceedings, is to be required to deal, en passant, as it were, with difficult procedural and legal problems during the course of the trial. 2 One such difficult situation has arisen in this particular case and it arises in this fashion. 3 The matter does have a long history, the original statement of claim having been filed in 1993. However, for present purposes it is sufficient if I deal with the more recent history of the matter. 4 On 19 March this year, Levine J heard an application by the plaintiffs to file a second further amended statement of claim. That document contained, in relation to the first plaintiff, an imputation in the following form: "7(a) He exploits the ethnic communities in Australia, for his own selfish financial purposes, by selling government advertising to media organisations at exorbitant prices." 5 A similar imputation was pleaded in respect of the second publication. Relevantly, it should be noted, that counsel for the defendants submitted in relation to that imputation that it was not capable of arising with regard to either publication. 6 In a reserved judgment, dated 30 April 1999, his Honour said: "I am persuaded in relation to each publication that unarguably neither matter complained of is capable of conveying an imputation in the form pleaded as in (a). However carefully one reads each matter complained of (in English) one cannot be persuaded at all of any notion of "exploitation" of the ethnic communities by selling government advertising to media organisations at exorbitant prices." 7 His Honour then held that the amendment would not be allowed in respect of the imputation pleaded in paragraph (a). 8 I am informed that in the history of this matter that is the first occasion on which an imputation in that form had been pleaded. 9 Accommodating themselves to his Honour's finding, the further amended statement of claim was not proceeded with by the plaintiffs in that form, but a further application was made on 14 May 1999 to his Honour for leave to file in Court a second further amended statement of claim with amendments to those imputations which were sought to be filed on 19 March 1999. Those amendments included the imputation in the present form in relation to both publications: "He exploits publishers of ethnic community newspapers for his selfish financial purposes by selling government advertising to them at exorbitant prices." 10 I am unaware of the extent of debate that was engaged in by respective counsel before his Honour on 14 May, but, in any event, his Honour ruled on 19 May that the subject imputation will go to the jury, having concluded that the matters complained of were capable of conveying that imputation (as pleaded in the second further amended statement of claim) and that the imputation was capable of being defamatory. 11 I am only concerned here, I repeat, with the first imputation. 12 The defendants thereupon filed a second further amended defence, which included paragraph 4, in the following terms: "The defendants deny that each of the matters complained of in their natural and ordinary meaning is capable of bearing or in fact bears any of the imputations pleaded in paragraph 7 of the Second Further Amended Statement of Claim ("the imputations")." 13 One could take paragraph 4 of the defence to refer to both paragraphs 7 and 7A of the second further amended statement of claim, which his Honour gave leave to the plaintiffs to file on 14 May 1999. 14 It has always been the plaintiffs' case that the alleged actionable defamation is based on the natural meaning of the words complained of in the articles, or perhaps I should refer to them as publications, because one is a letter to the Prime Minister. 15 This is the way in which the case was clearly opened by Mr Hughes of Queen's Counsel, for the plaintiffs, before the jury when the matter commenced on 1 November 1999. 16 However, as the case has developed it has been made clear by Mr Littlemore of Queen's Counsel, for the defendants, in relation to the imputation which is the subject of this judgment, that because of certain words used in the publications, and particularly the use of the verb "sell" or "sold" in quotes, the relevant parts of the publications embrace what may conveniently be referred to as, trade terms, and when one understands those trade terms the defendants contend the publications in fact do not bear, and could not be taken to bear, the subject imputation. It is conceded, however, that, allowing for those trade terms, the material could be capable of a defamatory imputation, but in a different form to that pleaded by the plaintiffs. 17 The matter has arisen during the cross-examination of the first plaintiff who is still giving evidence in the proceedings, although during the course of argument Mr Littlemore has indicated to me that he has no intention of further cross-examining the plaintiff in relation to the subject imputation, so far as this particular point is concerned. 18 Mr Hughes has submitted, during the course of argument yesterday, and this morning, that the burden of proof lies upon the defendants to displace the natural meaning of the subject words. He referred me in this regard to the following passage from paragraph 3.14 of the ninth edition of Gatley on Libel and Slander: "Where a party contends that the words should not be construed in their natural and ordinary meaning (as where the plaintiff pleads an innuendo based on an extrinsic fact which makes apparently innocent words defamatory or the defendant claims that the circumstances in which the words were used prevented them being understood in the defamatory sense) the burden of proof lies on him." 19 Indeed, a similar passage is to be found at para 114 of the eighth edition of Gatley, which is the edition most commonly used by the legal profession in this State. The wording there is slightly different: "But if either party alleges that the words were reasonably to be understood in a meaning other than their natural and ordinary meaning, and in that meaning were either defamatory or not defamatory, as the case may be, the burden of proof is on that party." 20 Of course, in order to pursue the matter which the defendants seek to pursue with regard to the alleged trade meaning of certain parts of the publications, it would be necessary for the defendants to call evidence and perhaps cross-examine witnesses for the plaintiffs. Whether relevant evidence would be called by the plaintiffs I do not know. 21 Mr Littlemore has submitted that this is not a matter which needs to have been pleaded by way of defence. He submits that it is purely an evidentiary matter and the defendants are not raising, in this regard, a positive defence, but are raising material which, as I understand it, undermines the assertions by the plaintiffs that the subject imputation is capable of arising from the relevant parts of the publications. 22 This has taken us to a detailed consideration of Pt 15 r 13(2)(b) of the Supreme Court Rules, which deals with matters for specific pleading. 23 The plaintiffs contend that the relevant portion of the rule is that in a defence, the party pleading shall plead specifically any matter: "(b) which, if not pleaded specifically, may take the opposite party by surprise." 24 I have no doubt that the matter which was raised during the course of the cross-examination of the first plaintiff, to which I have already made reference, has in fact taken the plaintiffs by surprise. It was not adverted to during the interlocutory hearing before Levine J, and was not, in particular, raised when he made the judicial finding pursuant to Part 31 of the Rules dealing with separate decision of questions arising in the proceedings. 25 Rule 13 must be read in the light of the current philosophy of litigation in this Court, that each party should have adequate particulars of the other party's case for the proper and expeditious conduct of litigation. One could parenthetically add that this philosophy is particularly relevant to the conduct of complex defamation proceedings. 26 It is, I think, consistent with the judgment in Bright v Sampson & Duncan Enterprises Pty Ltd. (1985) 1 NSWLR 346. 27 A question has arisen as to whether para 4 of the second further amended defence, and in particular the second limb of that paragraph, sufficiently raises the matters on which the defendants seek to rely with regard to trade terms. 28 I am faced with a paragraph that involves some difficulty of construction, and I am not persuaded that the paragraph is appropriately worded to embrace the matter which the defendants seek to raise. 29 We have not yet reached a stage in this case where any amendment to the defence which specifically raised this particular point, and gave sufficient particulars thereof, would necessarily inhibit the plaintiffs from dealing with the matter as the case progresses. That has a very significant bearing on my approach to this particular problem, because obviously with a matter of this nature, particularly bearing in mind its long history, it is eminently desirable that the parties be given the opportunity - unless one of them suffers from some irreparable prejudice - of ensuring that all matters in issue between the parties are resolved, so far as they can be, at first instance. 30 Accordingly, the approach which I propose to take is to hold that, in my view, the matters which have been raised fall within r 13(2)(b) of the Supreme Court Rules and are not sufficiently raised by para 4 of the defence, which I am satisfied is the appropriate defence. I do not see how this problem can fairly be resolved by any amendment to para 5, or any further particularisation. 31 Accordingly, I propose to allow the defendants, if they are so minded, to seek leave to amend the second further amended defence by specifically pleading the matters associated with the alleged reference to trade terms in the publications, and providing the plaintiffs with such particulars thereof as the plaintiffs may seek. Obviously, if the defendants seek that leave then these matters will have to be dealt with expeditiously by both parties. 32 If the procedure, which I have foreshadowed, is one that the defendants seek to avail themselves of, then it would be necessary, of course, to consider the situation when the amended pleading has been formulated and the particulars have been given. 33 Otherwise, I hold that on the present pleadings, it is not open to the defendants to raise the challenge, if I can use that expression, to the subject imputation by reference to the asserted trade terms in the publications.