New South Wales Supreme Court CITATION : Waterhouse v David Syme & Co Ltd & 2 Ors [2000] NSWSC 817 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20876 of 1997 HEARING DATE(S) : 27 August 1999 JUDGMENT DATE : 18 August 2000 ROBERT WATERHOUSE (Plaintiff) v DAVID SYME & CO LTD PARTIES : (First Defendant) JOHN FAIRFAX PUBLICATIONS LIMITED (Second Defendant) ARTHUR HARRIS (Third Defendant) JUDGMENT OF : Levine J M Rollinson (Plaintiff) COUNSEL : J Sackar Q.C. (First & Second Defendant) In Person (Third Defendant) Brock Partners (Plaintiff) SOLICITORS : Minter Ellison (First Defendant) Freehill Hollingdale & Page (Second Defendant) CATCHWORDS : Imputations - capacity - form Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 Burrows v Knightley (1987) 10 NSWLR 651 Hall v Mostyn (unreported, 18 March 1983) Jackson v John Fairfax & Sons Pty Limited (1981) 1 NSWLR 36 Livingstone-Thomas v Associated Newspapers Limited (1969) 90 WN (Pt 1) (NSW) 233 CASES CITED : Mayfield-Smith v Mirror Newspapers Limited (1982) 2 NSWLR 419 Mirror Newspapers Limited v Harrison (1982) 149 CLR 293 Nicholson v Seidler (1990) 5 BR 363 Readers Digest Services Pty Limited v Lam (1981-1982) 150 CLR 500 Rivkin v John Fairfax Publications Limited (Levine J, unreported, 17 July 1998) Truth (NZ) v Holloway (1960) 1 WLR 997 DECISION : See paragraph 37 DLJ: 3 CAV [2000] NSWSC 817 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST No. 20876 of 1997 JUSTICE DAVID LEVINE FRIDAY 18 AUGUST 2000 ROBERT WATERHOUSE (Plaintiff) v DAVID SYME & CO LTD (First Defendant) John Fairfax Publications Limited (Second Defendant) ARTHUR HARRIS (Third Defendant) JUDGMENT (Imputations - capacity - form) 1 The plaintiff sues in respect of a publication in "The Sunday Age" on 28 September 1997 and "The Sun Herald" of the same day. The matters complained of were referred to in my judgment of 12 February 1999 (NSWSC 52: DLJT 2). 2 In respect of those publications the plaintiff contended that they carried the following imputations: (a) The plaintiff is a murderer (not go to jury). (b) The plaintiff is a torturer (not go to jury). (c) The plaintiff caused the murder of George Brown (struck out). (d) The plaintiff caused the torture of George Brown (struck out). (e) The plaintiff sent two men around to teach George Brown a lesson by violence (not go to jury). 3 The words in parentheses above reflect the orders I made on 12 February 1999 on the Motion of the third defendant Mr Harris. 4 On 12 May 1999 the plaintiff filed a Third Further Amended Statement of Claim. The three defendants have moved the Court for relief in respect to that pleading. That is not surprising. 5 In respect of "The Sunday Age" publication the plaintiff now pleads the following imputations as being conveyed in its natural and ordinary meaning (nine in number): "4. (a) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris to be a murderer. (b) The plaintiff so misconducted himself he was reasonably by Arthur Harris to be a torturer. (c) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of paying two men to murder George Brown. (d) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of paying two men to torture George Brown before killing him. (e) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of being an accessory in the murder of George Brown. (f) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of being an accessory in the torture of George Brown before he was killed. (g) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of ordering the killing of George Brown because George Brown did not substitute another horse for Risley. (h) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of ordering the torture of George Brown because George Brown did not substitute another horse for Risley. (i) The plaintiff so misconducted himself that "The Sunday Age" had reason to identify him and only him as the bookmaker who backed Risley in an article entitled "Who Killed George Brown" which alleged that persons who lost money on Risley when it failed to win paid two men to torture and murder George Brown". 6 The plaintiff now also pleads 18 true innuendos, as follows: "4A… (a) The plaintiff is a murderer. (b) The plaintiff is a torturer. (c) The plaintiff sent two men around to teach George Brown a lesson by violence. (d) The plaintiff paid two men to murder George Brown. (e) The plaintiff paid two men to torture George Brown before killing him. (f) The plaintiff was an accessory in the murder of George Brown. (g) The plaintiff was an accessory in the torture of George Brown before he was killed. (h) The plaintiff ordered the killing of George Brown because George Brown did not substitute another horse for Risley. (i) The plaintiff ordered the torture of George Brown because George Brown did not substitute another horse for Risley. (j) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris to be a murderer. (k) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris to be a torturer. (l) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of paying two men to murder George Brown. (m) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of paying two men to torture George Brown before killing him. (n) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of being an accessory in the murder of George Brown. (o) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of being an accessory in the torture of George Brown before he was killed. (p) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of ordering the killing of George Brown because George Brown did not substitute another horse for Risley. (q) The plaintiff so misconducted himself he was reasonably suspected by Arthur Harris of ordering the torture of George Brown because George Brown did not substitute another horse for Risley. (r) The plaintiff so misconducted himself that "The Sunday Age" had reason to identify him and only him as the bookmaker who backed Risley in an article entitled "Who Killed George Brown" which alleged that persons who lost money on Risley when it failed to win paid two men to torture and murder George Brown". 7 The same sets of imputations are now pleaded also with respect to "The Sun Herald" article, with the appropriate substitution in imputations (i) and (r). 8 The "extrinsic facts" (SCR Pt 67 r 12(c)) are required to be set out and they are as follows: "(a) In March-April 1984 the Plaintiff (Robert Waterhouse) was a leading bookmaker who fielded at the Rosehill Racecourse and other Sydney Metropolitan racecourses. (b) In 'The Daily Mirror' of 21 November 1986 the headlines on the front page read 'Racehorse Trainer Murder: Bookie Link - Fresh Lead: Torture Murder Victim George Brown'. Parts of the following article read: 'Dramatic new evidence has emerged in the 2 ½ year mystery surrounding the torture - murder of racehorse trainer George Brown. Detectives were today checking out information which suggests the 39 year old victim, originally thought to have been killed because of a betting disaster was 'hit' on the orders of a leading bookie. The new lead indicates that two men were hired to execute the trainer - possibly because he refused to co-operate with a race fixing scheme. …………………… At the time police worked on the theory that he had been murdered over the dismal performance of a racehorse called 'Risley' at Brisbane's Doomben track two days earlier. ALLEGATIONS The horse was heavily backed in Brisbane and Sydney bringing its price down from 12-1 to 8-1, finished 2- last. But sources inside the racing world have now prompted detectives to follow up the allegations which point to a bookmaker and a race fix'. (c) (i) In a statutory declaration made by Mr David Waterhouse on 9 September 1997 and supplied by him to members, officers and staff of the NSW Thoroughbred Racing Board, Mr R Stitt QC, Mr A Hartnell, Mr T King, the plaintiff and his legal advisers, the third defendant and his solicitors (Verekers), journalists and other persons the identity of whom are as yet unknown to the plaintiff, he said to the plaintiff in his presence was shown the article in 'The Daily Mirror' of 21 November 1986 whereupon the plaintiff said to his father (William Waterhouse) 'They're going to arrest me over the George Brown murder'. (ii) Mr David Waterhouse in the said statutory declaration further said that he then had a conversation with Robert Waterhouse as follows:- D Waterhouse: Why are you worried? This story refers to 'a leading bookie' - you don't have a licence, it can't be you.' R Waterhouse: 'But when George Brown was murdered, I did have a licence and I was a leading bookie.' D Waterhouse: 'What would you have to do with George Brown?' R Waterhouse: 'He was involved in a couple of ring-ins for me but don't ask me any more questions - I don't want to talk about it'. (iii) Mr David Waterhouse annexed a photocopy of the article in 'The Daily Mirror' of 21 November 1986 including the headlines on the front page to his said statutory declaration. (d) In about September 1997 the third defendant made a statutory declaration which among other things included the words attributed to him in annexures 'A' and 'B'. The third defendant supplied copies of the statutory declaration to journalists including Mr Alex Mitchell and Mr Andrew Rule, to Mr David Waterhouse and to other persons the identity of whom re not yet known to the Plaintiff. The third defendant in the said declaration and in conversation with Mr Rule and other journalists sought to convey the impression that the plaintiff was involved in the murder of Mr Brown. (e) At the time of publication (28 September 1997) the third defendant and Mr David Waterhouse were engaged in a campaign to prevent the TRB from setting aside an order warning off the plaintiff from racecourses. Persons with knowledge of the above facts included the persons referred to in paragraphs (c) and (d) above together with members of the public who read 'The Daily Mirror' of 21 November 1986 referred to in paragraph (b) above. When the said persons and members of the public read the articles in 'The Sunday age' and 'The Sun-Herald' of 28 September 1997 the imputations referred to in paragraph 4A and 6A of the amended statement of claim were conveyed to them by reason of their knowledge of all or some of the said extrinsic facts. Other persons who had knowledge of the extrinsic facts and who had the imputations conveyed to them included friends, relatives and business associates of the plaintiff and his legal advisers. The plaintiff also relies on the grapevine effect". 9 With respect to imputations (natural and ordinary meaning) 4(a) to (h) it is to be noted that the suspicion of Arthur Harris founds the charge contained in each. 10 It has to be assumed on the capacity question that the matters complained of are capable of suggesting that the plaintiff misconducted himself in some way. The imputations, on that assumption, are narrowed by the effect of the misconduct in terms of Mr Harris' suspicions. 11 The relevant passages of the matter complained of which refer to Mr Harris are paragraphs 47 - 53 and 63 - 66 of the first matter complained of (The Sunday Age) and paragraphs 27 to 29 and 37 - 40 of the second matter complained of (The Sun Herald). Reliance by the plaintiff is put on paragraphs additional to those namely, 34, 35, 45, 56 and 71 to 77 and 80 of the first matter complained of which contained no reference to Mr Harris. 12 An ordinary reasonable reading of both matters complained of, taking into account those paragraphs that refer to Mr Harris, does no more than suggest that Mr Harris had made an accusation in relation to the plaintiff of trying to cover up the "nobbling" of a greyhound at Wentworth Park and of the plaintiff's attempting to implicate Mr Harris in a "scam" to deflect blame from himself. On the other hand, in relation to the horse "Risley" running at Doomben, it will be understood that the plaintiff had asked Mr Harris to check the betting price on that horse and that the plaintiff had said to Mr Harris that he had already placed a bet on it. After the race Mr Harris said to the plaintiff that the horse had done nothing. The next day, the reader would understand, Mr Harris telephoned the plaintiff and said that the police thought George Brown might have been murdered to which the plaintiff had replied that he had already heard. 13 The ordinary reading of these articles could give rise to an understanding, in my view, that the only misconduct of the plaintiff referred to by Mr Harris was in connection with a greyhound. 14 There is no foundation for any suggestion of misconduct as between the plaintiff and Mr Brown that is capable of arising in itself or leading to the ordinary reasonable reader concluding that any such "misconduct" (and that would be a matter for inference), would lead to the other inference which, in my view, more starkly is not available, that Mr Harris suspected the matters attributed in imputations (a) to (h). The "inference upon an inference" process is not available as a foundation for liability in a publisher: Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at 167. 15 As to imputation (i) in the course of his submissions Mr Harris remarked, pertinently, that in addition to any inference upon inference involved in a reader coming to conclusion constituted by the imputation, it would also involve an illogical grotesquerie: namely, the requirement to understand that each and every person who lost money on Risley was somehow involved in a conspiracy to murder and torture George Brown. This imputation in each case, in my view, is a tortured, irrational, illogical, strained and artificial construction of the matter complained of. 16 As a matter of law I would hold each matter complained of incapable of conveying imputations (a) - (i). 17 Imputations (a) to (g) are flawed by reason of the use of that most unfortunate of expressions in drafting of imputations "so misconducted himself". 18 The origins of this drafting lie in Jackson v John Fairfax & Sons Pty Limited (1981) 1 NSWLR 36 at 41B The form of such an imputation is very much dependent upon the implication that police officers would need to hold an honest belief before charging a person and the implied basis for that belief. The form of the imputation in Jackson's case and subsequent cases is to the effect that the plaintiff "so conducted himself". The use of the word "misconducted" amounts to an assertion of guilt. No doubt it is used by the pleader to add gravity to the structure of the imputation. 19 Neither of the matters complained of are, as I have already held, capable in any way of asserting guilt. 20 It is time for serious reflection to be given to the use in imputations of such phrases as "the plaintiff so conducted himself" or "the plaintiff so misconducted himself …" That reflection would involve asking the very simple question: would an ordinary reasonable reader/viewer/listener simply think in such terms as to a meaning the relevant publication might convey. I say, in passing, that it would be arguable that it would be neither "natural" nor "ordinary" for such a recipient of a publication to formulate a meaning in those terms. 21 Further, the matters complained of refer to two men being sent round to deal with George Brown. Imputations (a) and (b) involve a suggestion that Mr Harris suspected that the plaintiff was one of them. There is no foundation in either matter complained of for that formulation. If there was they would not differ in substance from (c) and (d). Imputations (e) and (f) by adopting the word "accessory" I accept is vague and imprecise; on the other hand, if the status of being an accessory was the payment, then imputations (e) and (f) do not differ in substance from (c) and (d). 22 As to (g) and (h) the words "because George Brown did not substitute another horse for Risley" add nothing to the sting (cf. Mayfield-Smith v Mirror Newspapers Limited (1982) 2 NSWLR 419). If that be right and that epexegesis be struck out, imputations (g) and (h) do not differ in substance from imputations (c) and (d). In any event there is a legitimate complaint, in terms of form, as to the vagueness of lack of precision in "ordering". 23 As to imputation (i); in addition to the illogicality that prevents it from being capable of arising, its formulation is at best cumbersome and at worst quite imprecise if not indeed meaningless. 24 I would therefore, in any event, hold that those imputations incapable, as I have said, of arising as a matter of law, would otherwise be struck out as being embarrassing in that each is defective in form. 25 I turn now the pleading of the true innuendos. It is to be noted that the plaintiff seeks, by pleading true innuendos, to replead the imputations held in my earlier judgment to be incapable of being conveyed namely, (a), (b) and (e). 26 It is appropriate to plead an imputation by way of true innuendo when by reason of special facts or circumstances known to the recipients of the publication, the matter published has an extrinsic or secondary meaning. The plaintiff must plead and prove the extrinsic facts as well as the meanings alleged to arise from those facts being known by the recipients. They are distinct from meanings which arise from the natural and ordinary meaning (Truth (NZ) v Holloway (1960) 1 WLR 997 at 1000; see also Readers Digest Services Pty Limited v Lam (1981-1982) 150 CLR 500 at 505-507. 27 With respect to so-called extrinsic fact (a) arguably it is not a fact extrinsic to either matter complained of at all: paragraph 51 "by the time Risley went to the barrier at Doomben the Sydney races at Rosehill were over. Harris was waiting for Robbie Waterhouse to finish his bookmaking work when Waterhouse asked him to run an errand". It seems to me quite clear that there is a reference to the plaintiff's status as a bookmaker and the fact that he was a "leading" bookmaker who fielded at Rosehill and other Sydney metropolitan racecourses adds nothing. 28 As to so-called particulars of extrinsic facts (b), (c) and (d), these, as was submitted for the defendants, appear to be particulars more going to identification (which is unnecessary) and incapable of adding any extrinsic or secondary meaning. They point to that same type of confusion to which Hunt J referred in Hall v Mostyn (unreported, 18 March 1983) at 5. 29 Further, particulars (b), (c) and (d) are publications prior to the matters complained of which are incapable of being understood as "facts". Whatever those prior publications may mean to the persons who had read them, the defendant cannot be made liable for an imputation conveyed to a reader who erroneously believes in the existence of a particular extrinsic fact which, if it did exist, would support such an imputation: Livingstone-Thomas v Associated Newspapers Limited (1969) 90 WN (Pt 1) (NSW) 233 at 235; Mirror Newspapers Limited v Harrison (1982) 149 CLR 293 at 301. The establishment of the fact of the publication of prior material is one thing: the establishment of the extrinsic facts set out in those publications is quite another: Burrows v Knightley (1987) 10 NSWLR 651 at 656; Rivkin v John Fairfax Publications Limited (Levine J, unreported, 17 July 1998); Nicholson v Seidler (1990) 5 BR 363. These three so-called extrinsic facts are not extrinsic facts and particularise nothing capable of giving rise to the imputations pleaded by way of true innuendo. 30 Extrinsic fact (e) provides no information at all as to "facts" knowledge of which would enable the reader to understand the matter complained of to convey the imputations. 31 Otherwise the submissions in complaint of the form of the imputations are still valid. 32 I find accordingly on the separate determination pursuant to SCR Pt 31 r 2 that, as a matter of law, the matters complained of are incapable of conveying the imputations pleaded as arising from the natural and ordinary meaning or the imputations pleaded by way of true innuendo. 33 I add that in any event all those imputations would have been amenable to being struck out by reason of defects in form. 34 This is the second occasion on which the Court has had to give consideration to the causes of action arising from the two publications upon which the plaintiff hopes to sue. On both occasions the plaintiff has failed. 35 In the course of submissions no opportunity arose for the consideration of whether the proceedings should be dismissed on the basis that no reasonable causes of action had been disclosed. 36 The appropriate course, in my view, is not to grant automatic leave to replead. The plaintiff will formally have to move the Court by Notice of Motion accompanied by a proposed Fourth Further Amended Statement of Claim which he might seek to file (absent consent from the defendants). 37 The formal orders are: 1. As a matter of law the matters complained of are incapable of carrying the imputations pleaded in paragraphs 4, 4A, 6 and 6A of the Third Amended Statement of Claim. 2. Within 21 days the plaintiff is to file a Notice of Motion returnable on 13 October 2000 formally seeking leave to file a Fourth Amended Statement of Claim. 3. By 4.00pm on Wednesday 11 October 2000 the parties are to have exchanged written outlines of submission with respect to such leave application. 4. The plaintiff is to pay the costs of the first and second defendants and the expenses of the third defendant. 5. The matter is listed for argument on 13 October 2000. *********** Last Modified: 09/27/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.