Supreme Court New South Wales Medium Neutral Citation: Anderson v News Digital Media Pty Limited [2015] NSWSC 1952 Hearing dates: 11 December 2015 Date of orders: 11 December 2015 Decision date: 11 December 2015 Jurisdiction: Common Law Before: McCallum J Decision: Imputations (a), (b), (c), (f) and (g) will go to the jury. Note that imputation (d) is not pressed. Note that imputation (e) is not pressed and leave is granted to the plaintiff to replead imputation (e). Catchwords: DEFAMATION – pleadings – imputations – form and capacity objections Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 28.2 Cases Cited: Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227 Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 Category: Procedural and other rulings Parties: Paul Anderson (plaintiff) News Digital Media Pty Limited (first defendant) Nationwide News Pty Limited (second defendant) Errol Smith (third defendant) Denice Barnes (fourth defendant) Representation: Counsel: M Richardson (plaintiff) M J Lewis (defendants) Solicitors: McAuley Hawach Lawyers (plaintiff) News Corp Australia (defendants) File Number(s): 2015/310404 Publication restriction: None Judgment – Ex Tempore 1. HER HONOUR: These are proceedings for defamation arising out of the publication of an article in the Central Coast Gosford Express Advocate newspaper and a similar piece online. The proceedings are before the Court today for the first listing. 2. The defendants have taken a series of objections to the imputations specified by the plaintiff. This judgment determines those objections. 3. The defendants sought to have the objections as to capacity determined as separate questions pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW). I think it was common ground that that is the appropriate course. 4. Save for one exception to which I will come, the rulings as to the printed article and the internet article do not raise any different question and accordingly will govern both matters complained of. The printed article takes the form of a front page piece referring to a full report on page 9. The internet publication consists of all of the material in that full report. 5. The context of the articles, as reported in the articles themselves, was the proposal by the State government to force amalgamations on some local councils. In that context, the matter complained of reported that two Wyong councillors were concerned as to the state of finances of Gosford Council, evidently apprehending the prospect of amalgamation of those two councils. 6. In the printed edition of the article, there was featured on the front page a large photograph of a concerned looking councillor standing behind a grim looking local resident who was pretending to set fire to a $20 note with the caption: "Wyong councillor Greg Best and Saratoga resident Pat Aiken symbolise Gosford Council's 'financial waste' by pretending to burn a $20 note." 1. The matter complained of continued in similar alarmist vein. 2. It is convenient to deal with the objections to three of the imputations together (namely, imputations (a), (c) and (f)) as follows: (a) The plaintiff in his role as chief executive of Gosford Council performed with such gross incompetence that the Council's finances were reduced to a disgraceful state; (c) The plaintiff in his role as chief executive of Gosford Council negligently mismanaged the Council finances to the extent that the Council found itself in a massive financial black hole; (f) The plaintiff in his role as chief executive of Gosford Council performed with such gross incompetence, the Council finances required an independent forensic audit. 1. Each of those imputations is an attribution to the plaintiff, at different levels or with different consequences, of responsibility for the financial state of Gosford Council's finances referred to in the matter complained of. The defendant submitted that none of those imputations is capable of being conveyed. 2. Before addressing that issue, it is appropriate first to determine an objection as to the form of one of the imputations since that is necessarily an anterior step to the determination of a capacity objection. It was submitted that imputation (a) is imprecise because the meaning of the term "performed" is imprecise. In my view, as submitted by Mr Richardson (who appears for the plaintiff), when taken in combination with the description of the plaintiff as "chief executive of Gosford Council", the content of the term "performed" is clear. There was no form objection to either of the other imputations in this group. 3. In my view, each of those three imputations is reasonably capable of being conveyed by the matter complained of. As indicated during argument, my first impression of the matter complained of was that it did not attribute the plaintiff with the kind of misconduct captured in the imputations since it includes his reasonable response to the concerns of the two councillors reported. Having heard from Mr Richardson, however, I am persuaded that that is an issue which should be left to be determined by the jury, recalling the high bar a defendant must meet in order to have a defamatory imputation struck from the pleading. The principles governing that determination were stated with ample clarity in the decision of the High Court in Favell v Queensland Newspapers Pty Ltd [2005] HCA 52 and have recently been reiterated by the Court of Appeal in Corby v Allen & Unwin Pty Ltd [2014] NSWCA 227. 4. Mr Lewis, who appears for the defendants, submitted that the imputations, and particularly (f), require the reader to draw an inference upon an inference which is not permissible. 5. In my view, there is ample reference in the express terms of the matter complained of to notions that would convey the implication of incompetence or mismanagement. The matter complained of in fact uses the term "mismanagement" and the phrase "financial mismanagement". Further, as submitted by Mr Richardson, the plaintiff is the only person identified in the matter complained of as being an officer of the council or being likely to bear any responsibility for the state of affairs reported. By the nature of his very role as chief executive officer, the words are at least capable of attributing him with that responsibility. Those imputations will go to the jury. 6. The next objection is to imputation (b): (b) The plaintiff in his role as chief executive of Gosford Council authorised financial waste by the Council so serious that it was akin to lighting cash with matches. 1. The imputation as pleaded refers to the plaintiff having authorised financial waste. In response to an objection to that imputation, Mr Richardson proposed amending the imputation by replacing the word "authorised" with the phrase "knowingly oversaw". 2. Mr Lewis submitted that the proposed amendment does not cure the difficulty contending that the proposed new imputation is ambiguous. 3. In my view, the proposed change does cure any difficulty as to the meaning of the imputation. Specifically, I reject the submission that the inclusion of the word "knowingly" is confusing. In my view, a distinction can be drawn in theory between the role of a person in a position such as that of chief executive officer in bearing responsibility for events of which he in fact had no knowledge on the one hand and, on the other hand, in fact being aware of the conduct whilst in a position of responsibility. Clearly the proposed new imputation intends to capture the latter. In my view, the proposed new imputation is capable of arising and is not bad in form. 4. There was an objection to imputation (d) but that imputation is not pressed. 5. Imputation (e) is: (e) The plaintiff in his role as chief executive of Gosford Council dishonestly tried to cover up the state of the Gosford Council's finances from Wyong councillors. 1. Mr Richardson, after debating the terms of that imputation in argument, indicated that he would not press the imputation but seeks leave to replead it. In my view, that is appropriate. 2. Finally, imputation (g) is: (g) The plaintiff lied when he claimed to the Express Advocate that the Gosford Council financial statements were sound. 1. It is in respect of this imputation that there is an important difference between the printed article and the appearance of the article on the internet. The printed article in fact includes reference to a statement by the plaintiff that the Council's financial statements were "sound" in the following passage on the front page: "However, Gosford Council chief executive officer Paul Anderson hit back saying its financial statements were sound and already audited once a year." 1. The internet version of the article, as already noted, did not include that material which appeared on the front page of the printed edition of the newspaper. However, there is, in both matters complained of, at the end of the piece, an extended report of the plaintiff's reaction to the concerns expressed in respect of Gosford Council's financial statements. 2. My first impression was that that explanation was sufficiently compelling to remove any suggestion that the plaintiff had lied in claiming that the financial statements were sound. Upon reflection (and having heard from Mr Richardson), I think that is also an issue which must be left to the jury. 3. The attribution of dishonesty is said to come from the words appearing at paragraph 22(a) in the printed edition where Councillor Best is quoted as having said: "Wyong has done the hard yards over the past five years and we don't want to squander it propping up Gosford. In my view, they have got a black hole and they know it." 1. Mr Richardson placed emphasis on the overall tenor of the matter complained of, which he submitted is not a balanced piece. He referred to the large number of extravagant adjectives employed in the description of the state of finances of Gosford Council, combined with the colourful illustration of cash being burned. In those circumstances, he submitted that the careful response attributed to the plaintiff could not be regarded as one which would outweigh any suggestion of false concealment of a problem on his part to the point where the imputation could properly be withdrawn from the jury. Upon reflection, I think I must accede to those submissions. 2. For those reasons, the rulings are that imputations (a), (b), (c), (f) and (g) will go to the jury. I note that imputation (d) is not pressed. I note that imputation (e) is not pressed and I grant leave to the plaintiff to replead imputation (e). ******** 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: 21 December 2015