Balzola v Federal Capital Press of Australia Pty Limited

The Plaintiff's Submissions

1. In respect of the particulars of truth set out in the Further Amended Defence, the plaintiff acknowledged the test he had to meet in persuading the court to strike out the plaintiff's claim in accordance with General Steel Industries Inc v Commissioner for Railways (NSW) ('General Steel') (1964) 112 CLR 125 at 130. It was further submitted that to prosecute a defence of truth, the onus was on the defendants to prove substantial truth of the imputations. Counsel for the plaintiff submitted that the particulars did not support the allegation that the plaintiff was a key figure in a "franchise" aimed at denying religious freedom to Muslims. Rather, he had acted as solicitor properly instructed to oppose development applications referred to and had provided legal advice. It would be different if he was a progenitor or if he was part of the organisation opposing such applications. However, in acting in his capacity as a solicitor, he was in no way denying religious freedom to Muslims. Further, whilst he had given a presentation at Parliament House to the Christian Democratic Party, he could not be responsible for any co-speakers' views in any other presentation made on that occasion.
2. In respect to the second imputation, counsel for the plaintiff did not concede that the plaintiff was a "Christian activist". It was submitted that the particulars provided did not demonstrate any underlying purpose of denying Muslims religious freedom or that he was someone who opposed development applications for the building of mosques on religious grounds without regard to the merit of the application.
3. In respect of the third imputation that the plaintiff "pretends to represent the Concerned Canberra Citizens", the particulars set out no details of the pretence. Rather, the plaintiff was a solicitor who represented that group as their solicitor.
4. In respect of the three contextual imputations sought to be pleaded by the defendants, counsel for the plaintiff submitted that the first, namely, that the plaintiff "is a hypocrite", was in substance the same imputation arising from the imputations relied on by the plaintiff. As the authorities demonstrated, to be a contextual imputation, the matters alleged must differ in substance from those imputations pleaded by the plaintiff. Contextual imputation (A) did not, and therefore should be struck out.
5. Counsel submitted that contextual imputation (B), namely, that the plaintiff is "an intolerant person …" does not arise at all from the matters pleaded, or alternatively was so similar to the imputations relied on by the plaintiff that it should not be allowed at all. Further, counsel submitted that contextual imputation (C), namely, that the plaintiff "a Sydney solicitor, is meddling in local planning issues in Canberra .." was in substance the same, if not very similar, to the plaintiff's imputations.

The Defendants' Submissions

1. Learned counsel for the defendants relied on a thorough written outline setting out the relevant principles and the defendants' case. Counsel relied on two preliminary points, namely: 1. The plaintiff's application to strike out the particulars of truth was misconceived in that it elevated the role of particulars to that of evidence to be relied on in the case. The court should therefore be careful not to judge the particulars as the highest level to which the evidence at trial will rise. It is a question for the trial judge to determine whether, as a matter of capacity, the evidence is capable of establishing truth, and if it does not, that defence will be removed from the jury. 2. The General Steel test applied and therefore before the defence could be struck out the court would need to be satisfied that the defendants' case as pleaded was hopeless to the extent that it could never be established.
2. In respect of the justification defence, counsel submitted that the plaintiff had mischaracterised the meaning of the plaintiff's imputations, and what was required to be proved. For example, on the plaintiff's first imputation, the word "franchise" simply meant an organised, business-like opposition, "akin to a franchise". Whether the imputation has a different meaning falls for determination by the trial judge, and should not be determined on a strike-out application. There was ample material in the particulars to support the imputation that it was an organised opposition.
3. In respect of supporting the justification defence, and the defence pursuant to s 26 of contextual imputations, not all the particulars relied on the plaintiff's role as solicitor. It was properly conceded that if the defendant only relied on the plaintiff being a solicitor, the defendants would have a very weak case. What was particularised here was that the plaintiff held other positions, and held views which went beyond his role as solicitor and from which, the defendants submitted, it could be inferred that he was a person involved to further his own agenda to prevent or oppose Islamic institutions being built. Relevant to that, was the contention that as a Sydney based lawyer, he was acting in applications in the ACT and Victoria to oppose such institutions.
4. Counsel submitted that the particulars provided ample basis for the defendants to establish that the imputations are substantially true. If, at the end of the evidence, the defence falls short, it is then open for the plaintiff to apply to the trial judge to have the defences taken away from the jury. However, at this stage, it was not established that they were so hopeless that they should fall to be struck out in accordance with General Steel principles.
5. The same submissions were made in respect of the two other imputations, namely, that he was an activist and that he pretended to represent Concerned Canberra Citizens opposing the building of a mosque on traffic and planning issues.
6. In opposing the plaintiff's application to strike out paragraph 10B(b) of the defence, it was submitted that there were two bases for the plaintiff's application, namely: 1. "Each of the contextual imputations are not reasonably capable of being conveyed by the Matters Complained Of; and 2. Each of the contextual imputations are not reasonably capable of being an imputation - in addition - to the plaintiff's imputations within the terms of s 26." Both these bases raise questions of capacity. To strike out the pleading on a capacity basis, the court must be satisfied that no reasonable jury could be satisfied that the test in s 26 was established, relying on the High Court's decision in Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186 and Malcolm v Nationwide News Pty Limited [2007] NSWCA 254. If they were matters about which reasonable minds would differ, the imputations must be left to the jury.
7. Counsel further submitted that it was inappropriate to strike out contextual imputations at all in advance of a trial. It was submitted that a matter can only carry a contextual imputation "in addition to" an imputation of which the plaintiff complains if the matter in fact carries that plaintiff's imputation. Counsel submitted "that is, the section clearly requires that the two imputations be carried together, and that the plaintiff's imputation be defamatory."
8. Thus, at trial, if a plaintiff loses a first imputation, there can be "nothing contextual" about a contextual imputation pleaded by the defendants. In other words, the court was being asked to assume each of the plaintiff's imputations will be established and held to be defamatory. This was contrary to the principle in General Steel.
9. Further, counsel relied on McMahon v John Fairfax Publications Pty Limited (No. 6) [2012] NSWSC 224 where McCallum J held that: "'For the purpose of the defence the defamatory imputations' referred to in s 26 excludes any found by the jury to be substantially true."
10. It was therefore inappropriate to strike out the contextual imputations at a preliminary stage, relying on Bateman v Fairfax Media Publications Pty Limited (No. 3) ('Bateman') [2014] NSWSC 1601 per McCallum J. That applied in this case where a justification defence was also pleaded. In support of contextual imputation (A), counsel submitted there was ample material to support the imputation. The test to be determined on this application was that set out by McCallum J in Bateman at [32] as follows: "Ultimately, the question is whether the defence as pleaded is reasonably capable of meeting the requirements of the section, properly construed. In accordance with s 26(A), one requirement of the defence is that a contextual imputation must be 'an other imputation' carried in addition to the imputations of which the plaintiff complains."
11. The imputation that the plaintiff was a hypocrite was clearly a different imputation from each of the plaintiff's imputations and therefore the first contextual imputation (A) should be allowed.
12. Similarly, it was submitted that there were ample particulars of intolerance upon which to support the second contextual imputation (B). It was submitted that the ordinary reasonable reader would infer that the plaintiff was using his position as a lawyer to wage a campaign that he personally believed in. This was at a capacity level, different to the plaintiff's imputations and therefore should be allowed. Similarly, counsel submitted that there was ample material in the Matters Complained Of to support a finding that it was open to the ordinary reasonable reader to understand the article to be alleging that the plaintiff was meddling in affairs that did not concern him for the purpose of furthering his own agenda.
13. It was submitted that in comparing the contextual imputations to the plaintiff's imputations, they were both different in substance and in kind. The first contextual imputation had a sting in the character of the plaintiff being a hypocrite, a concept that was not captured in any of the plaintiff's imputations. The sting in respect of the second contextual imputation was that the plaintiff was in character, intolerant, and again this was not captured by his imputations. The third contextual imputation dealt with his conduct as a Sydney based solicitor and it was submitted it was a different concept from the plaintiff's imputations.
14. The question of whether each of the contextual imputations were "in addition" to the plaintiff's imputations was a question of fact and therefore a matter for the jury. The court would only strike out the contextual imputations if it was satisfied to the very high test of whether a jury properly instructed could not find them to be "in addition to" the plaintiff's imputations. The plaintiff had not satisfied that test here and therefore the plaintiff's application should be refused, and the matters should be left to the jury.
15. On the question of whether the plaintiff should be granted leave to plead the contextual imputations as part of the plaintiff's imputations, following rejection of the plaintiff's application to have them struck out, learned counsel referred the court to the Court of Appeal decision in Fairfax Media Publications Pty Limited v Kermode (2011) 81 NSWLR 157. It was submitted that the court had held that s 26 allows a defendant to use a substantially true but different imputation as a contextual imputation as a sword and if the plaintiff were granted leave to amend to re-plead by way of that imputation, a sword would be taken out of the defendants' hands.
16. The usual principles of the exercise of judicial discretion applied to this decision. Counsel submitted that the history of the litigation was relevant, namely, that the plaintiff had had ample opportunity to plead all imputations upon which he relied, and was now relying on a Second Further Amended Statement of Claim filed in February 2014. The court would have regard to the overriding purpose and objects set out in ss 56-58 of the Civil Procedure Act 2005 (NSW) and the Practice Note relevant to defamation proceedings in the District Court in refusing the plaintiff's application to re-plead.
17. In support of the defendants' application to strike out the Amended Reply to the Further Defence filed on 7 October 2014, counsel submitted that Particular (vii), namely, "that the Second Defendant had become personally involved in defeating the opposition to the mosque", was embarrassing and should be struck out. Particulars had been sought and the particulars provided by the letter dated 5 November 2014 (ex B) were insufficient to allow the defendants to know what "personally involved" means.
18. Particular (ix), namely, "the filing and maintenance of a defence of truth and contextual truth by the defendants knowing that neither defence has any prospects of success and solely for the purpose of further damaging the reputation of the plaintiff at trial" was unsupported by particulars, namely, the facts, matters and circumstances that gave rise to the knowledge referred to and constituted a serious allegation against the defendants' solicitors and was very embarrassing. Absent proper particulars as to the facts, matters and circumstances supporting it, that particular should not be allowed to stand.
19. The defendants did not seek to strike out paragraph (4) of the Reply, however, paragraph (5) of the Reply pleads that at the time the defamatory article was published the defendants were actuated by malice and seeks to rely on the same particulars. However, there are no particulars of the state of mind of the commentator sufficient to be capable of defeating the defence as pleaded. It was therefore submitted that paragraph five was embarrassing and should be struck out.

The Plaintiff's Submissions in Reply

1. Counsel submitted that the plaintiff had subscribed sufficient particulars of the state of mind of the commentator, Ms Abdel Rahman, to support paragraph (5) of the Reply, and if necessary, should be given leave to further amend the Reply to re-plead it.
2. In respect of particular (2)(ix) of the Reply, the particulars provided demonstrated post-publication conduct which was capable of elucidating the state of mind of the defendant as at the date of publication. Counsel further submitted that particulars had been provided of the personal involvement sufficient to support the particular in (vii) of the Reply.
3. Counsel submitted that the comment of a stranger defence pursuant to s 31 of the Act was a matter for the trial judge to determine after evidence had been completed in the trial.
4. In response to the defendants' submissions on the plaintiff not being allowed to plead back the contextual imputations, counsel submitted that Macfarlan JA in Holt v TCN Channel Nine Pty Limited (2014) 86 NSWLR 96 had left the door open for a plaintiff to re-plead contextual imputations alleged against him as it was unpredictable as to what imputations might be upheld by the jury. There was no unfairness in the plaintiff being allowed to re-plead contextual imputations and it would also allow the jury to determine all issues at once.

Legal Principles

1. Rule 14.28(1) of the UCPR provides as follows: "(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: 1. discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or 2. has a tendency to cause prejudice, embarrassment or delay in the proceedings, or 3. is otherwise an abuse of the process of the court."
2. The test to be applied in determining an application to strike out pursuant to this rule is well established - see General Steel, supra at [130]; Agar v Hyde (2000) 201 CLR 552 at [575- 576] and Favell v Queensland Newspapers Pty Limited (2005) 221 ALR 186 at [6]. The power should be exercised only in plain and obvious cases, and not where there is a real issue to be tried.
3. Section 26 of the Act provides as follows: "26 Defence of contextual truth It is a defence to the publication of defamatory matter if the defendant proves that: 1. 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 2. The defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations."
4. The principles as to whether a defendant should be permitted to rely on a contextual imputation were set out by Nicholas J in Con Ange v Fairfax Media Publications Pty Limited & Ors [2011] NSWSC at [13] to [26]. They were applied by McCallum J in Hyndes v Nationwide News Pty Limited [2011] NSWSC 633 at [28] - [30]. Her Honour said: "30 In John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484, McColl JA summarised the relevant authorities at [212] as follows: 1. The defence of contextual truth under s 16 was created to fill a lacunae (sic) in the common law by enabling a defendant to justify a meaning of the matter complained of upon which the plaintiff had not relied; 2. A contextual imputation must be another imputation from the plaintiff's imputation; the test of whether it differs in substance from the plaintiff's imputation is a necessary but not sufficient test for 'another' imputation, which requires a difference in kind (Jones); it must be a "truly alternative" imputation (Hepburn); 3. A contextual imputation may plead a different "sting" entirely from that relied upon by the plaintiff; and 4. A plea of contextual truth admits that the matter complained of conveyed the imputations relied upon by the plaintiff, does not seek to justify those imputations (save where a contextual imputation singly, or in combination, pleads back one of the plaintiff's imputations), but seeks to establish that by reason of the substantial truth of the contextual imputation(s), the imputation complained of does not further injure the reputation of the plaintiff."

Determination of the Plaintiff's Application to Strike out the Particulars of the Defence of Justification

1. It is trite to state that the purpose of particulars is to enable the opposing party to know what case it has to meet. The particulars should set out the facts, matters and circumstances upon which the pleading party relies, and therefore intends to call evidence in relation to, to make out its case. I accept the first preliminary point raised by counsel for the defendants and set out in [13(1)] above, that it is a question for the trial judge to determine whether, as a matter of capacity, the evidence is capable of establishing the truth of the imputations. For that reason, I am not prepared at an interlocutory stage to strike out the particulars set out in paragraph 10B(1)(a) to (g) of the Further Amended Defence. Nor am I prepared to strike out paragraphs 1(h) to (cc), as matters outlined therein give rise to a triable issue, namely, whether if proved they would make out a defence of truth. That is a matter for the trial judge to determine at the conclusion of the evidence.
2. I therefore decline to strike out the particulars as pleaded in the Further Amended Defence.

Determination as to Whether the Contextual Imputations (A), (B) & (C) Should be Struck Out

1. The first contextual imputation, namely, "(A) The plaintiff is a hypocrite …" is an imputation which is different in substance and kind to the three imputations pleaded by the plaintiff. It carries with it a different "sting" from those imputations and the defendant should be allowed to rely on it.
2. Similarly, contextual imputation (B), namely, "The plaintiff is an intolerant person …" is different both in substance and kind to the three imputations relied on by the plaintiff. Again, it has a different "sting" from those imputations and the defendant should be allowed to rely on it.
3. The third contextual imputation, namely, "(C) The plaintiff, a Sydney solicitor, is meddling in local planning issues in Canberra ..." is not different in substance or in kind to those imputations relied on by the plaintiff. The defendant focussed on the words contained in the article, namely, "Sydney based lawyer", however, the same meaning would be inferred by the ordinary reasonable reader in respect of the second and third imputations relied on by the plaintiff. It involves the same concepts, viz, opposing development applications on religious grounds and against the Islamic faith. To that extent, the "sting" would be the same and hence it could not be said that the contextual imputation (C) arose in addition to those two imputations. For that reason the defendant should not be entitled to plead contextual imputation (C).

Determination as to Whether the Plaintiff Should be Entitled to Plead Back the Contextual Imputations

1. In two recent cases, the Court of Appeal has held that it is still open to a plaintiff to adopt a defendant's pleaded contextual imputations by pleading them back - see Fairfax Media Publications Pty Limited v Kermode, supra, and Holt v TCN Channel Nine Pty Limited, supra. Prior to that, there were conflicting decisions by Justices of the Supreme Court as to whether plaintiffs were permitted to adopt contextual imputations pleaded by the defendant (see for example - Nicholas J in Waterhouse v The Age Company Limited & Ors [2012] NSWSC 9 and Hall v TCN Channel Nine Pty Limited, supra, per McCallum J).
2. It is now beyond doubt that the plaintiff has an entitlement to adopt a defendant's pleaded contextual imputations - see Petty v Zhao (No. 2) [2015] NSWDC 18 per Gibson DCJ at [7]. However, the court retains a discretion as to whether leave should be given to amend. The defendant has submitted here that the court should not exercise that discretion because it is late in the proceedings, the plaintiff now relying on a Second Further Amended Statement of Claim as a result of earlier interlocutory proceedings.
3. I am not persuaded that the application comes so late in the proceedings that leave should not be granted to the plaintiff to re-plead the contextual imputations. No issue of prejudice was raised other than that the defendant would lose the advantage of its defence pursuant to s 26. This was the same argument raised in Kermode and Holt and rejected by the Court of Appeal. I therefore grant leave to the plaintiff to re-plead contextual imputations (A) and (B) by way of a Third Further Amended Statement of Claim.

Determination of the Defendants' Application to Strike Out Parts of the Reply to the Further Amended Defence

1. As set out in paragraph six above, the defendants seek to strike out particulars in paragraph 2(b)(vii) and (ix) in the Reply to the Further Amended Defence filed by the plaintiff. The basis of the application is that the plaintiff has not provided proper particulars as to the facts, matters and circumstances which make out those two allegations. The particulars that were provided in respect of (vii) are as follows: "The Second Defendant's personal involvement in the campaign is to be inferred from the subjects that she focussed upon when writing articles about the mosque opposition. These were alleged religious and racist motivation of the Concerned Citizens of Canberra, the alleged lack of proper planning basis for the opposition to the mosque by any resident, and concentration upon details of the extreme views voiced in opposition and their alleged religious or racist motivation, the labelling of the plaintiff and the matters complained of as being the key figure in a franchise that had the aim of denying the religious freedom of Muslims when in prior articles that key figure was Irwin Ross and when she had no basis for the assertion by her that there was in fact a franchise; the labelling of the plaintiff as an activist in the matter complained of when she knew the Plaintiff was acting as the solicitor on the record of the Concerned Citizens of Canberra in court proceedings."
2. Those particulars do not support the allegation of personal involvement of the second defendant, a journalist employed by the first defendant. They merely restate the various strands underlying the plaintiff's case. To that extent, the particular is embarrassing and I therefore strike it out.
3. I also strike out the particular (ix) on the basis that there are no particulars supporting the allegation that the filing and maintenance of a defence of truth and contextual truth by the defendants was done knowing that neither defence had any prospects of success and solely for the purpose of further damaging the reputation of the plaintiff. The pleading is embarrassing and should be struck out.
4. In respect of the application to strike out paragraph five of the Reply, the particulars are, in my view, inadequate to support the allegation; however, I grant leave to the plaintiff to re-plead the allegation of express malice.

Orders

1. I therefore make the following orders: 1. The plaintiff's oral application to strike out the particulars pleaded in support of the defence of justification is refused. 2. The plaintiff's application to strike out the contextual imputations pleaded pursuant to s 26 of the Act is refused in respect of contextual imputations (A) and (B). 3. The plaintiff's application to strike out contextual imputation (C) is upheld. 4. I grant leave to the plaintiff to further amend his Statement of Claim to plead back contextual imputations (A) and (B) against the defendants. 5. I strike out particulars contained in paragraph 2(b)(vii), (ix) and 5 of the Reply to the Further Amended Defence. 6. I grant leave to the plaintiff to re-plead paragraph 5 of the Reply to the Further Amended Defence.
2. As each party was partly successful in its respective application, I order that each party pay his, her, or its own costs of the applications.

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: 06 March 2015