Supreme Court New South Wales Medium Neutral Citation: Ell v Milne (No 3) [2012] NSWSC 985 Hearing dates: 13 August 2012 Decision date: 14 August 2012 Before: McCallum J Decision: Defendant's application for leave to replead contextual imputations refused. Defendant to pay plaintiff's costs of the application. Catchwords: DEFAMATION - defences - contextual truth - whether truth innuendo capable of establishing defence where plaintiff's imputations alleged to arise on ordinary and natural meaning of the matter complained of - whether particulars capable of establishing truth of imputation Legislation Cited: Defamation Act 1974 Defamation Act 2005 Cases Cited: Besser v Kermode [2011] NSWCA 174 David Syme & Co Ltd v Grey (1992) 38 FCR 303 Ell v Milne [2011] NSWSC 645 Ell v Milne (No 2) [2012] NSWSC 259 Gross v Weston [2007] NSWCA 1 Hughes v Mirror Newspapers Limited (1985) 3 NSWLR 504 McMahon v John Fairfax Publications Pty Limited [2010] NSWCA 308 McMahon v John Fairfax Publications Pty Limited, 8 March 2010 (unreported); McMahon v John Fairfax Publications Pty Limited (No 6) [2012] NSWSC 224 Category: Interlocutory applications Parties: Robert Ell Katie Milne Representation: Counsel: T Tobin QC, B Kelleher (plaintiff) S Molomby (defendant) Solicitors: Stacks/The Law Firm (plaintiff) NLS Law Pty Ltd (defendant) File Number(s): 2010/417266 Publication restriction: None Judgment - ex tempore 1HER HONOUR: These are proceedings for defamation arising out of the alleged publication of an email by Ms Katie Milne, then a councillor on Tweed Shire Council, to a number of newspaper editors and interest groups. The defendant has raised defences of qualified privilege and contextual truth pursuant to s 26 of the Defamation Act. 2There has been a series of disputes between the parties as to the form of pleading of those defences. I have determined some of those disputes in my earlier judgments in these proceedings: see Ell v Milne [2011] NSWSC 645 and Ell v Milne (No 2) [2012] NSWSC 259. 3Section 26 of the Defamation Act 2005 provides: 26 Defence of contextual truth It is a defence to the publication of defamatory matter if the defendant proves that: (a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations ("contextual imputations") that are substantially true, and (b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations. 4The existing defence pleads two contextual imputations, one alleged to arise in the natural and ordinary meaning of the matter complained of and one pleaded as a true innuendo. In my first judgment I struck out the defendant's first attempt to plead the true innuendo with leave to replead that imputation. In my second judgment I struck out the repleaded true innuendo, on that occasion reserving the issue as to whether the defendant should again have leave to replead. The proceedings came before me yesterday for further hearing on that issue. This judgment determines that question. 5The first concern as to whether the defendant should have leave to replead arose from an issue raised by me in the second judgment. As already noted, the second contextual imputation was pleaded as a true innuendo. At [22] to [24] of the second judgment I noted that, in accordance with the decision of the Court of Appeal in Besser v Kermode [2011] NSWCA 174, a defence under s 26 must defeat all of the plaintiff's defamatory stings. I recorded my doubt as to whether a contextual imputation pleaded as a true innuendo is capable of meeting that requirement at [23] of the judgment, as follows: A defamatory imputation conveyed by the matter complained of in its natural and ordinary meaning harms the plaintiff's reputation in the eyes of all those to whom it is published. Conversely, a true innuendo harms the plaintiff's reputation only among those to whom it was published who knew the extrinsic facts relied upon to lend the publication its defamatory meaning. The plaintiff's remedy is confined accordingly. In light of those considerations, I doubt whether the substantial truth of a true innuendo is capable of satisfying the requirement of s26(b), since it could never address the broader harm done to the plaintiff's reputation by the imputations conveyed to all recipients of the publication. As already noted, however, that consideration was not raised in argument and should not determine the present application, since the defendant has not been heard on the issue. 6After hearing from Mr Molomby on that issue I am not persuaded that it would be appropriate to refuse leave to replead on that basis alone. There are two reasons for my conclusion. First, the point raised by me concerned the position where the class of persons who knew the extrinsic fact or facts is indisputably a subset of the class of persons to whom the matter complained of was published. It is not clear that that is the case in the present proceedings. That in my view should properly be a matter for trial. Mr Tobin submitted that the defendant has failed to provide adequate particulars in the present case of the persons who allegedly knew the extrinsic fact and that the failure in that respect should be fatal to this part of the defence. He relied on the decision of Hunt J in Hughes v Mirror Newspapers Limited (1985) 3 NSWLR 504 at 507. However, it seems to me thatm having regard to the content of the extrinsic facts and the circumstances of the matters raised therein, the question whether an inference could properly be drawn as to each of the persons to whom the matter complained of was allegedly published is one that could and should be left for trial. 7The second reason I am not persuaded that it would be appropriate to refuse leave only on the basis of the matter I raised in my earlier judgment is that the correctness of the tentative view I there expressed is itself an issue better left to be determined at trial rather than on a peremptory basis. The issue requires careful analysis of a number of juridical concepts not previously determined in respect of the 2005 Act. 8The first is the nature of the cause of action itself. Section 26 affords a defence to "the publication of defamatory matter". As already noted, it is established that the defence must defeat all of the plaintiff's defamatory stings. What is not clear, however, is whether it must do so in respect of each person to whom the matter complained of was published. 9At first glance, it would appear that it must. Section 8 of the 2005 Act states: 8.Single cause of action for multiple defamatory imputations in same matter A person has a single cause of action for defamation in relation to the publication of defamatory matter about the person even if more than one defamatory imputation about the person is carried by the matter. 10However, Mr Molomby raised an issue as to whether that section says anything on the subject of the common law principle as to the plurality of causes of action referred to by Gummow J in David Syme & Co Ltd v Grey (1992) 38 FCR 303 at 324. Under s 9 of the Defamation Act 1974, a plaintiff had a cause of action for defamation in respect of each individual imputation conveyed by the matter complained of. Plainly, s 8 of the 2005 Act directs attention to the position that obtained under the 1974 Act. 11In David Syme it was noted that at common law there will be "a plurality of causes of action constituted by the publication and sale of a newspaper". The apparent statutory indivisibility of the cause of action under the 2005 Act may refer only to the indivisibility of the cause of action so far as individual imputations are concerned, which came into force in the context that previously a separate cause of action existed in respect of each individual imputation. Conversely, it may have been intended to have an impact on the common law principle to which I have referred. That is an issue of some complexity, which in my view should not be determined on a strikeout or like application. 12Secondly, even if s 8 is to be construed as creating a single, indivisible cause of action in respect of the plurality of publications of defamatory matter, it is not beyond doubt in my view that a contextual truth defence can be attritional, in the sense that establishment of the defence only insofar as it concerns those persons to whom a true innuendo was conveyed might reduce the damages payable. In Besser v Kermode McColl J provided a helpful summary of the ways in which a defamatory publication can be justified by defences of truth and contextual truth (at [86]; Beazley and Giles JJA agreeing at [1] and [2] respectively): In summary, a defendant seeking to justify the defamatory matter under the 2005 Act may take the following courses of action, some statutory, some based on the common law: (a) prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true: s 25; (b) prove that rather than the defamatory imputations pleaded by the plaintiff, the defamatory matter carries nuance imputations which are substantially true; (c) to the extent that the defendant fails to establish all the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, rely on those proved to be true in mitigation of the plaintiff's damages: partial justification; and (d) to the extent the defendant can not prove that the defamatory imputations carried by the defamatory matter of which the plaintiff complains are substantially true, prove that it carries contextual imputations that are substantially true, by reason of which the defamatory imputations do not further harm the reputation of the plaintiff: s 26. 13It seems to me to be at least arguable that a defendant could, by relying on a contextual imputation pleaded as a true innuendo, seek to defend publication to those to whom the matter complained of was published who knew the extrinsic facts and to argue that the publication of the contextual imputation had the statutory effect prescribed in s 26(2) (so far as those persons were concerned) and so defend the publication to that extent, leaving the defendant liable only for damages for publication to those to whom the matter was published who did not know the extrinsic facts. 14I touched on those principles in my decision in McMahon v John Fairfax Publications Pty Limited (No 6) [2012] NSWSC 224, where I expressed the view that although defences under the Act including those under s 25 and s 26 are defences to "the publication of defamatory matter" and require the defendant to defeat all of the plaintiff's stings, nothing in the language of the Act as analysed in Besser v Kermode would appear to preclude defence by a process of attrition. Perhaps more accurately, that analysis would allow reliance on a contextual true innuendo as a defence to part only of the publication of defamatory matter, recognising that the extent of publication is always relevant in assessing the extent of harm. 15The foregoing discussion should at least demonstrate that the issues are ones of complexity which should not determine a strikeout application. 16Leaving those issues aside, the plaintiff opposed leave to amend the contextual imputation previously struck out by me on two further grounds. First, Mr Tobin invoked what might conveniently be referred to as the "simply too late" basis for opposing an amendment, which derives from the decision of Nicholas J in McMahon v John Fairfax Publications Pty Limited, 8 March 2010 (unreported), upheld by the Court of Appeal: [2010] NSWCA 308. Nicholas J held that, shortly stated, it was "just simply too late" for that step [of amending the imputation again] to be taken": at [13]. The Court of Appeal strongly endorsed his Honour's approach: at [32] to [35] per Allsop P; at [59] to [61] per Giles JA; Young JA agreeing with Allsop P at [63]. 17I would not regard the President's judgment in McMahon as mandating a prescriptive approach. Each case must, of course, be judged according to its own facts and circumstances. Whilst the fact that the contextual imputation has twice previously been strikeout is certainly a relevant consideration, I regard it as a preferable approach to determine the application to amend brought forward yesterday on its merits. 18The second basis for opposing the amendment was that, in Mr Tobin's submission, the particulars provided in support of the proposed new imputation are not capable of sustaining it. The proposed new imputation (as further amended by Mr Molomby on his feet during argument yesterday) is: That as a developer he knowingly took part in a scheme to deceive the electors of Tweed Shire, in that he donated $80,000 to Tweed Directions immediately before the 2004 Tweed Shire Council election for the purpose of supporting the election campaigns of groups of candidates who deceptively presented themselves to the public as not in alliance with or owing allegiance to other candidates or any political party or organisations, while not revealing that they were all supported by Tweed Directions, and he knowing of that deception. 19Particulars in support of that imputation were provided in a separate document. In my view, the critical aspect of the imputation so far as a consideration of the adequacy of the particulars is concerned is that it attributes to the plaintiff a state of mind as at the time he made certain donations, namely, knowledge of the deception attributed to the groups of candidates referred to. It is well established that a state of mind is a fact as to which the person asserting its existence must provide adequate particulars of the facts, matters and circumstances from which it is to be inferred. If authority were needed for that proposition, it may be found in the decision of the Court of Appeal in Gross v Weston [2007] NSWCA 1 at [32] per Hunt AJA; Handley and McColl JJA agreeing at [1] and [2] respectively. 20I have carefully reviewed the particulars provided in the separate document by Mr Molomby yesterday. In my view, as submitted by Mr Tobin, there is nowhere to be found in that document an adequate statement of any facts, matters and circumstances on the strength of which the state of mind attributed to the plaintiff in the proposed new contextual imputation could conceivably be inferred. 21Mr Molomby submitted that knowledge on the part of the plaintiff of deception by the candidates is to be inferred from the fact that he made two large donations to their campaign on the basis that he must have "known what they stood for ". He submitted that when one makes donations of the kind alleged one "well knows what the money is to be used for". That submission, with great respect to Mr Molomby, did not lend any content to the allegations set out in the particulars. As submitted by Mr Tobin, this is the third occasion on which the defendant has had an opportunity to articulate the basis for the contention implicit in earlier argument and now expressly sought to be pleaded as to the plaintiff's state of mind at the time he made the donations in question. 22For the reason that the particulars are incapable of sustaining the imputation in my view the defendant should not have leave to plead it. 23It remains to deal with a question as to the costs of the earlier applications and the application yesterday. There can be little doubt that the defendant should pay the plaintiff's costs of the application. Mr Tobin submitted that those costs should be able to be assessed forthwith. That is an order which would probably be within the discretion of the court to make in accordance with well-established principle where a discrete issue is determined and where that occurs probably well in advance of the likely final determination of the proceedings. However, having regard to the identity of the parties in the present proceedings, who are each individuals, I have a concern that to make an order in those terms might stymie the defendant's defence of the claim brought against her. For that reason I am not persuaded that I should exercise my discretion to make an order in those terms. The order is that the defendant pay the plaintiff's costs of the applications to amend the defence. 24I make orders 1 to 8 in the form of orders handed up by Mr Tobin as amended by me. ********** 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. Decision last updated: 27 August 2012