New South Wales Court of Appeal CITATION: Hayson v. John Fairfax Publications Pty. Limited [2007] NSWCA 376 HEARING DATE(S): 11 December 2007 JUDGMENT OF: Hodgson JA at 1; Santow JA at 23; Tobias JA at 24 EX TEMPORE JUDGMENT DATE: 11 December 2007 DECISION: Application for leave to appeal dismissed with costs. CATCHWORDS: DEFAMATION - Pleadings - Contextual truth - Application to strike out pleadings dismissed - Application for leave to appeal - Whether sufficient doubt about primary judge's decision shown. Armitage v Double Bay Newspapers Pty. Limited, Hunt J, 26 September 1991 CASES CITED: Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 190 Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 PARTIES: Edward Hayson - claimant John Fairfax Publictions Pty. Limited - respondent FILE NUMBER(S): CA 40527/07 COUNSEL: Mr. R. McHugh SC with Mr. M. Richardson for claimant Mr. T. Blackburn SC with Mr. R. Glasson for opponent SOLICITORS: Johnson Winter & Slattery, Sydney for claimant Freehills, Sydney for opponent LOWER COURT JURISDICTION: Supreme Court - Common Law Division LOWER COURT FILE NUMBER(S): SC 20300/06 LOWER COURT JUDICIAL OFFICER: Nicholas J LOWER COURT DATE OF DECISION: 13 July 2007 LOWER COURT MEDIUM NEUTRAL CITATION: [2007] NSWSC 763 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40527/07 SC 20300/06 HODGSON JA SANTOW JA TOBIAS JA Tuesday 11 December 2007 HAYSON V. JOHN FAIRFAX PUBLICATIONS PTY. LIMITED Judgment 1 HODGSON JA: On 13 July 2007, Nicholas J dismissed with costs a notice of motion brought by the claimant, who is the plaintiff in defamation proceedings. He sought an order that "paragraphs (a)(ii)-(vi) of the defence be struck out". The claimant seeks leave to appeal from that order. 2 I will be proposing that leave be refused, and I will give reasons. In my opinion, the matters relied on do not raise sufficient doubt about the correctness of the result to justify leave being granted. In giving reasons I will be expressing some views about the substance of the matter. These views are intended merely to justify the refusal of leave and not to be final determinations of the matter, so that these views are not intended to rule out the matters being explored further in the event that there is an appeal from the result of the trial. 3 The proceedings arise out of an article in The Sydney Morning Herald newspaper of 10 to 11 June 2006, under the heading, "The Brothel Owner, League Stars and a Mystery Betting Plunge". The imputations relied on are pleaded as follows in the amended statement of claim: 3. The matter complained of in its natural and ordinary meaning conveyed the following imputations each of which was defamatory of the Plaintiff: (a) that the Plaintiff was in partnership with a major heroin dealer; (b) that the Plaintiff had breached the criminal provisions of the Corporations Act by managing a company when an undischarged bankrupt; (c) that the Plaintiff had committed a criminal offence by lodging documents with the Australian Securities & Investment Commission containing a fictitious name; (d) that the Plaintiff had provided the services of prostitutes to NRL players and jockeys in exchange for inside information concerning the outcome of football matches or horse races; (e) that the Plaintiff had made substantial profits by betting on the outcome of NRL matches with the benefit of inside information which had been illegitimately obtained through his connection with the Johns brothers; (f) that the Plaintiff lied to a Sydney Morning Herald journalist when he denied that he had any involvement with the Stilettos brothel. 4 In its defence, in addition to denials, the opponent has pleaded truth, contextual truth, and qualified privilege. The pleading of contextual truth is as follows: Contextual Truth 5. Further and in the alternative to paragraph 4 above, the defendant says the matter complained of, in its natural and ordinary meaning: (a) carried, in addition to such of the imputations of which the plaintiff complains as are found by the jury to arise and be defamatory, the following imputations of and concerning the plaintiff (the Contextual Imputations): (i) the plaintiff runs a brothel (Contextual Imputation 1) (ii) the plaintiff changed his name in order to deceive persons with whom he dealt, including the company regulator, about his status as an undischarged bankrupt (Contextual Imputation 2) (iii) the plaintiff changed his name with the intention of being unlawfully involved in the management of companies while an undischarged bankrupt (Contextual Imputation 3) (iv) the plaintiff so conducted himself as to give rise to a reasonable suspicion of participating in race fixing (Contextual Imputation 4) (v) there were reasonable grounds to suspect that the plaintiff was involved in race fixing (Contextual Imputation 5) (vi) the plaintiff behaved unscrupulously by manipulating the odds in a greyhound race (Contextual Imputation 6) (b) each of the Contextual Imputations is substantially true; (c) each of the Plaintiff's Imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations. 5 As required under rule 15.23, particulars of the facts, matters and circumstances relied upon to establish the substantial truth of each contextual imputation are included in the defence. At the time of the hearing before the primary judge, discovery by the defendant had not been given and interrogatories had not been administered. 6 We are told that that is still the position. The claimant takes the position that the issues in relation to which discovery is to be given are to some extent dependent on the result of this hearing, and that is apparently one reason why the claimant has not given discovery. 7 The notice of motion was put on three bases: first, that the contextual imputations (iv), (v) and (vi) were incapable of being conveyed by the publication; second, that contextual imputations (iv) and (v) were bad in form and/or did not differ in substance from each other; and third, that the particulars were incapable of establishing the substantial truth of contextual imputations (ii) to (vi) inclusive. 8 On the first basis, the primary judge stated that the question of capacity proceeded as a separate question for decision under rule 28.2, and then stated principles applicable to the question. He also said that the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, applied to the exercise of discretion in deciding whether or not an imputation should be struck out. 9 He then considered each of the contextual imputations (iv) to (vi), and rejected the first two bases of challenge. 10 On the third basis of challenge, the primary judge pointed out that the particulars were couched in terms which indicated they were a bare summary of issues to be raised, based on information presently available to the defendant. He said that the particulars could be amended as a result of discovery and interrogatories, and that the evidence at the trial could expand on these particulars; and at least partly on that basis, rejected the third ground relied on in support of the notice of motion. 11 Accordingly, he dismissed the notice of motion. 12 In supporting the application for leave to appeal, Mr McHugh SC for the claimant directed his arguments as to capacity particularly to the contextual imputations (iv) and (v). He submitted that the material in the publication was not capable of supporting the existence of reasonable suspicion about race fixing, and developed that submission with reference to the publication. He also submitted that the primary judge was in error in applying the test in General Steel to the determination of a separate question, although he conceded that the matter was never constituted before the primary judge as the determination of a separate question. 13 Having regard to the fairly undemanding test for capacity, in my opinion sufficient grounds are not shown for doubt about the primary judge's view that the material in the article was capable of conveying the contextual imputations the subject of this submission. 14 In relation to the question of form, Mr McHugh submitted that the use of the expression "participating in" in contextual imputation (iv), and the use of the expression "involved in" in contextual imputation (v), made those imputations too vague and too general; and he referred to the decision of Armitage v Double Bay Newspapers Pty. Limited, Hunt J, 26 September 1991. 15 He submitted also that the contextual imputations were in a form that made them insufficiently specific, raising considerations of practical justice of the type referred to in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135; and that they were not formulated so that the facts, matters and circumstances that could be relied on to establish their truth bore a reasonable relationship to both the contextual imputation and the publication relied on; and in that respect he relied on Australian Broadcasting Corporation v Hodgkinson [2005] NSWCA 190 at paragraphs [31] to [38]. 16 Again in that matter, also having regard to the contents of the published material, and in this respect having regard to the particulars given, I do not think sufficient doubt is shown about the result reached by the primary judge to justify the grant of leave to appeal. 17 On the third matter, Mr McHugh submitted that on one view of the primary judge's reasons, he considered he did not have the power to strike out the pleading on the basis put forward. Mr. McHugh went through the particulars, and submitted that, taking them at their highest, they could not possibly make out the truth of the contextual imputations. 18 He submitted that the reliance by the primary judge on the continuing availability of discovery was inappropriate, because discovery had to be governed by the issues as defined by the pleadings and particulars, rather than vice-versa. He submitted that, to the extent that the primary judge relied on the point that evidence at the trial might go beyond the particulars, that too was an error. 19 In my opinion, the primary judge did rely on the two matters mentioned earlier in these reasons in rejecting this particular basis of challenge; and to the extent that he relied on them, in my opinion there is insufficient doubt on the correctness of this approach to justify the grant of leave. 20 For my part I would accept that there could be circumstances where particulars fall so far short of being capable of supporting the truth of imputations that it could be justified to strike out imputations. However, the particulars do not themselves indicate the outer limits of what may be proved. They indicate, in effect, topics on which evidence may be led. But the full effect of evidence led within the particulars may be greater than what the bare particulars themselves indicate. 21 I am not persuaded at this stage that the particulars in this case fall so far short of being able to permit evidence that could establish the truth of the contextual imputations that the contextual imputations should be struck out. 22 For those reasons, I would propose that the application for leave to appeal be dismissed with costs. 23 TOBIAS JA: I agree. 24 SANTOW J: I also agree. 25 HODGSON JA: The order of the court is the application for leave to appeal is dismissed with costs. ********** 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. 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