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[2006] VSCA 168
Court of Appeal (Vic)
2006-08-24
BUCHANAN, CHERNOV and ASHLEY, JJ.A.
Original judgment source is linked above.
Defamation - Discovery - Facts not put in issue by plea that the words were published without making enquiry of the plaintiff to ascertain the facts - Facts not in issue without a pleading raising falsity - Presumption of falsity.
1 An article published by the appellant, whom I will call "the defendant", in The Age newspaper concerned with insider trading in company shares contained a graph showing the proximity between substantial share price movements in a mining company and the sale of shares by the respondent, whom I will refer to as "the plaintiff", and another, who were directors of the company.
2 The plaintiff instituted proceedings against the defendant claiming damages for libel. The plaintiff pleaded that the article imputed, inter alia, that he had profited from insider trading. By its defence the defendant admitted publishing the article but denied that it defamed the plaintiff. No substantive defences were pleaded. In particular, the defendant did not seek to justify the defamatory imputations alleged to be contained in the article.
3 The defendant applied to a judge in the trial division for an order for discovery by the plaintiff of specific documents said to relate to the question whether the plaintiff had engaged in insider trading.
4 The judge refused the application. His Honour held that there was no issue as to the truth of the imputations attributed to the article. In the absence of a plea of justification, the imputations arising from the article were presumed to be false. The plaintiff was under no obligation to discover documents which were not relevant to an issue in the proceedings.
5 The defendant sought leave to appeal from this decision pursuant to the provisions of s.17A(4)(1)(b) of the Supreme Court Act 1986. Two judges of this Court referred the application to the court that would hear the appeal if leave was granted.
6 Counsel for the defendant contended that the question whether the plaintiff had engaged in insider trading was put in issue by the plea in the statement of claim that the defendant published the article "without making any inquiry of the plaintiff to ascertain the facts relating to the sale by him of shares" in the company. The plea was contained in paragraph (d) of the particulars of an allegation that the defendant published the article in circumstances entitling the plaintiff "to an award of aggravated and/or exemplary damages."
7 In his submissions, counsel for the defendant characterized the plea as one supporting a claim for aggravated damages to compensate the plaintiff for injury to his feelings and mental distress caused by the manner in which the article was published. Thus the defendant's failure to ascertain the facts by enquiry of the plaintiff was only relevant if it caused additional hurt to the plaintiff, and that depended upon the facts being other than those stated in the article. If the article was true, so it was said, the defendant's failure to enquire would not have caused any additional pain to the plaintiff.
8 Counsel for the plaintiff sought to meet that contention by characterizing the plea as one supporting a claim for exemplary damages. The plaintiff was said to have pleaded in effect that the defendant was to be punished because, in failing to make any enquiries of the plaintiff, it did not act reasonably. The defendant wrongly assumed the truth of the statements in the article or did not care whether the statements were true or false because it did not pursue an obvious method of ascertaining the truth of the facts it was asserting.
9 In my view, whether the plaintiff's statement of claim is viewed as claiming aggravated or exemplary damages, paragraph (d) did not put in issue the truth of the words sued upon.
10 If the plea is viewed as the basis of a claim for exemplary damages, the nub of the allegation is that the defendant is to be punished for its failure to take an available step to ascertain the truth of a statement alleged to hold the plaintiff up to public ridicule and contempt. It is that failure which the plaintiff has alleged should lead to the award of additional damages. The plaintiff is entitled to an award of damages for the effect upon him of the making of a false statement without the plea that the defendant failed to make enquiry of the plaintiff. Accordingly, the plea relates solely to the defendant's omission. It does not put the plaintiff's conduct in issue.[1]
11 I am also of the opinion that the facts were not put in issue if paragraph (d) of the particulars is seen to found a claim for aggravated damages. I think the paragraph enables the plaintiff to contend that he suffered additional hurt or distress because the defendant apparently accepted without question that the plaintiff had engaged in insider trading. The step which the defendant must then take is to contend that the extra hurt or distress depends upon the plaintiff establishing underlying hurt because the plaintiff has been falsely accused. It is at this point that I think the defendant's argument breaks down.
12 In my opinion all that the pleading in paragraph (d) of the particulars adds is the failure to enquire. The paragraph does not compel or, for that matter, entitle either party to prove what is not in issue. Put another way, if the defendant is right, the facts would always be in issue, with or without a plea such as that contained in paragraph (d) of the particulars, for falsity of a statement said to be defamatory is a cause of hurt and distress and that is so whether or not the maker of the statement makes enquiry as to its truth.
13 Counsel for the defendant did submit that the truth of the imputations and the words sued upon was always in issue, irrespective of the pleadings.[2] He relied upon a statement by Windeyer, J. in Australian Consolidated Press Ltd. v. Uren[3], in which his Honour said:
"The truth or falsity of the words is irrelevant to the question whether they are actionable but not, I think, to the amount of damages if they be defamatory. A jury is always likely to think that heavier damages should be given to the gratuitous publication of statements that are false than would be appropriate if the same statements were true. A plaintiff is always permitted to go into the witness box to say that what was said of him was a lie. If he does so, surely the defendant should be permitted to call evidence to answer him? If he does not, must the defendant remain silent on the matter unless he has pleaded truth and public benefit? An answer to this question was long ago given in New South Wales. It was held that a defendant could call evidence of the truth of his statements with a view to mitigating damages although he had not pleaded justification."
"Whatever the position at common law, there is not in New South Wales (or elsewhere in Australia where the law is the same) any reason for saying that in the absence of a plea of truth and public benefit a libel is presumed to be untrue."
His Honour was concerned with an action brought in New South Wales at a time when the law of defamation was codified by the Defamation Act 1958.[4]
14 It is well established at common law that a plaintiff in a defamation suit is not required to plead or prove that the imputations of which he complains are false.[5] The other side of the coin is that, without a plea of justification, the defendant cannot lead evidence of the truth of the publication in mitigation of damages.[6]
15 The trial judge relied upon the presumption that the words sued upon were false. Counsel for the appellant submitted that was an error. The presumption is derived from a decision of Lord Ellenborough, C.J. in Roberts v. Camden[7]. His Lordship extended the principle that falsity of the words sued upon in a defamation action is not an element of the cause of action. His Lordship said that: " ... the words, not having been so justified [by special pleading] must be assumed to be false." As falsity is not an element of the cause of action, no presumption of falsity can arise from the failure of the defendant to plead truth.[8] The existence of the presumption has been accepted in common law jurisdictions for so long that it may now be too late to correct the error from which it arose.
16 In any event, in the present case, with or without the presumption, the truth or falsity of the words sued upon was not in issue. Truth or falsity of the words only becomes relevant if a party puts it in issue. A plaintiff might claim aggravated or exemplary damages in a manner which raises falsity.[9] A defendant can raise truth by pleading justification. In this case neither party put truth or falsity in issue.
17 For the foregoing reasons I am of the opinion that the trial judge's decision was clearly correct. I would refuse leave to appeal from the decision.
18 I would also refuse leave to appeal from the impugned decision for the reasons given by Buchanan, J.A.
19 I agree with Buchanan, J.A., for the reasons which his Honour gives, that the application for leave to appeal should be refused. But I wish to add a little to what his Honour has said.
20 First, if the presumption of falsity of defamatory imputations is an error springing from the corruption of the principle, dating from the seventeenth century, that a plaintiff is neither required to aver nor prove that defamatory matter was published "falsely and maliciously," it is an error which occurred nearly 200 years ago[10], and an error which has become entrenched in the common law of defamation. Thus, for example, the presumption has been applied in this State[11], and has been said to be the law in the United Kingdom in very recent times.[12]
21 Further, the presumption has attracted certain consequences. In jurisdictions
unaffected by statute, it has operated, in effect, to deny a defendant the right to allege truth in mitigation of damages except if a plea of justification had been raised. The explanation why this should be so was described by Walsh J in Rigby v. Associated Newspapers Ltd[13] as follows:
"In England the primary reason for refusing to allow the defendant to use such evidence to mitigate damages was that, if proved, truth would be a complete defence, and that a defendant who does not plead what would be a defence should not be permitted to elicit the same facts to reduce damages."
Again, there is a body of authority which says that, even where a defendant pleads justification of defamatory imputations, discovery by the plaintiff should ordinarily be limited to matters particularised by the defendant in respect of that defence.[14] A defendant should not have discovery from the plaintiff in advance of particularization.[15]
22 In the event, I think that it is too late to correct the supposed error. In that connection, it may also be observed that the intent of the model legislation reflected by the Defamation Act 2005[16] is to enshrine the common law concept of justification[17] throughout Australia.[18] It should be inferred that the choice was made cognisant of the existence of the presumption, and of the law as it had differently developed in non-common law jurisdictions - both with respect to the existence or otherwise of the presumption, and to the significance of that matter upon the question of damages.
23 Second, the application below was initiated by a Summons, filed on behalf of the defendant, which for more than one reason was arguably defective. By paragraph 3 of the Summons, which is presently relevant, orders were sought "pursuant to Rule 29.11 or otherwise." I doubt that Rule 29.11 was in point; whilst, so far as the words "or otherwise" might call Rule 29.08 into play, the Summons was not drafted in a manner appropriate to that sub-rule. None of this was the subject of debate, at first instance or in this Court. It was sensible to deal with the substance of the matter. Nonetheless, it should not be supposed, because the matter was dealt with in such a way, that either the learned judge below or this Court accepted that the Summons was good in form.
[1] Cf. Aldridge v. John Fairfax & Sons Ltd. [1984] 2 N.S.W.L.R. 544 at 549 - 50 per Hunt, J.
[2] In that event, pleas by defendants that the words sued upon are true would be redundant.
[3] [1966] HCA 37; (1966) 117 C.L.R. 185 at 205.
[4] See Singleton v. Ffrench (1986) 5 N.S.W.L.R. 425 at 441 - 4 per McHugh, J.A.
[5] Rowe v. Roach (1813) 1 N&S 304; Motel Holdings Ltd. v. Bulletin Newspaper Co. Pty. Ltd. [1963] S.R. (NSW) 208 at 212 per Sugerman, J.
[6] Underwood v. Parks (1743) 2 Stra 1200; Watt v. Watt [1905] A.C. 115 at 118 per Earl of Halsbury, L.C.; Hobbs v. Tinling [1929] 2 K.B. 1 at 17 - 18 per Scrutton, L.J., at 38 per Greer, L.J. and at 48, 50 per Sankey, L.J.; Plato Films Ltd. v. Speidel [1961] A.C. 1090 at 1133 - 4 per Lord Denning; Singleton v. Ffrench, above, at 442 per McHugh, J.A.
[7] [1807] EngR 404; (1807) 9 East 93.
[8] See Spencer Bower, Actionable Defamation, 2nd ed., p 236.
[9] See, for example, Glare v. John Fairfax Publications Pty. Ltd. [1999] VSC 390.
[10] Roberts v. Camden [1807] EngR 404; (1807) 9 East 93 at 95.
[11] A v Ipec Australia Ltd v. Crew [1973] VicRp 4; [1973] VR 39 at 47-48.
[12] Jameel and anor v. Wall Street Journal Europe Sprl [2005] 2 W.L.R. 1577, particularly at [4],[35] and [55]-[57] per Lord Phillips M.R. for the Court.
[13] [1969] 1 N.S.W.R. 729 at 738.
[14] See Gatley on Libel and Slander, 10th Ed (2004) para 31.8 and the cases there cited.
[15] Although a plaintiff's discovery in respect of matters particularized may lead on to additional particularization.
[17] Though subject to a somewhat different notion of contextual truth.
[18] Other states, including N.S.W., passed mirror legislation during 2005. The N.S.W. Act, No. 77 of 2005, commenced on 1 January 2006. It repealed the Defamation Act 1974 (N.S.W.).
Age Company Ltd
Elliott [2006] VSCA 168