Boikov v Network Ten Pty Ltd; Boikov v Nationwide News Pty Ltd

The history of these proceedings

1. The plaintiff's claims arise from the publication of a broadcast by Network Ten on 30 July 2014 ("the Network Ten proceedings") and the publication of a number of articles by Nationwide News on 30 and 31 July 2014 ("the Nationwide News proceedings"). Each of the proceedings was commenced on 28 July 2015. Following objections to the imputations, Amended Statements of Claim were filed on 16 September 2015.
2. On 17 August 2016, McLoughlin SC DCJ listed the claims for a five week jury trial, commencing 21 August 2017.
3. Shortly thereafter, the defendants advised their intention to plead an Amended Defence. On 6 October 2016 I made the following orders in respect the Network Ten proceedings: 1. The defendant is to administer any interrogatories on or before 13 October 2016. 2. The parties to serve verified answers to interrogatories on or before 28 October 2016. 3. The defendant to provide the plaintiff's solicitor with a copy of any proposed amended defence by 18 November 2016. 4. The proceedings be listed for directions on 1 December 2016.
4. Also on 6 October 2016, the following orders were made in relation to the Nationwide News proceedings: 1. The plaintiff is to administer any interrogatories on or before 13 October 2016. 2. The parties are to serve verified answers to any interrogatories by 2 November 2016. 3. The defendant to provide the plaintiff's solicitor with a copy of any proposed amended defence by 18 November 2016. 4. Pursuant to s 26 of the Civil Procedure Act, the parties attend a mediation on or before 30 November 2016. 5. The proceedings listed for directions on 1 December 2016.
5. On 30 November 2016, the defendants in each of the Network Ten and Nationwide News proceedings served their proposed Amended Defences. I made the following orders on 1 December 2016 in the Network Ten proceedings: 1. The plaintiff is to notify the defendant whether he consents to the defendant being granted leave to file the Amended Defence served on 30 November 2016 on or before 9 December 2016. 2. On the condition that the plaintiff's consent is given in accordance with order (1) above, the defendant is granted leave to file and serve the Amended Defence on or before 16 December 2016. 3. The defendant is to serve verified answers to interrogatories by 15 December 2016. 4. The plaintiff is to serve verified answers to interrogatories by 17 February 2017. 5. The proceedings be listed for directions or any argument in respect of the proposed Amended Defence on Thursday 2 March 2017 in the Defamation List (subject to compliance with Civil Practice Note 6). 6. Reserve the issue of costs in relation to the defendant's failure to comply with the timetable for interrogatories on two prior occasions and the late service of the Amended Defence.
6. The orders made on that occasion in relation to the Nationwide News proceedings were as follows: 1. The plaintiff is to notify the defendant whether he consents to the defendant being granted leave to file the Amended Defence served on 30 November 2016 on or before 9 December 2016. 2. On the condition that the plaintiff's consent is given in accordance with order (1) above, the defendant is granted leave to file and serve the Amended Defence on or before 16 December 2016. 3. The parties are to serve verified answers to any interrogatories by 16 December 2016. 4. The parties to complete mediation by 17 February 2017. 5. The proceedings be listed for directions or any argument in respect of the proposed Amended Defence on Thursday 2 March 2017 in the Defamation List (subject to compliance with Civil Practice Note 6).
7. On 2 March 2017, I made the following further orders in relation to both these proceedings: 1. Grant leave to the defendant to file the Amended Defence in court, in the form served on the plaintiff on 30 November 2016, and dispense with the need for service. 2. The plaintiff is to serve verified answers to interrogatories on or before 16 March 2017. 3. Any applications by the parties in relation to costs previously reserved are to be notified to the other party on or before 16 March 2017. 4. The plaintiff's application for leave to file a further amended statement of claim adopting the defendant's contextual imputations, and any costs applications notified in accordance with order (3) above, are listed for argument in the Defamation List on Thursday 30 March 2017 and/or directions.
8. In the Amended Defences the defendants plead a defence of contextual truth pursuant to s 26 of the Defamation Act 2005 (NSW) ("the Act") based upon the following contextual imputations: 1. The plaintiff conducted himself in a manner which warranted him being monitored by ASIO. 2. The plaintiff was being monitored by ASIO.

The defendants' position

1. The defendants do not oppose the plaintiff's application, provided that this leave is conditional upon the preservation of the defendant's entitlement to continue to rely upon the s 26 contextual justification it already has in relation to these imputations. Orders of this kind have been examined and explained in Pahuja v TCN Channel Nine Pty Ltd [2015] NSWSC 1664 at [3]; Sharp v Harbour Radio Pty Ltd (No 2) [2016] NSWSC 223 at [28]-[30] and Hibbert v Nationwide News Pty Limited (District Court Proceedings 2014/60638, Mahony SC DCJ): no judgment is available for this ruling, but counsel in these proceedings fortunately also appeared in those proceedings).
2. The defendants have provided a form of order to encapsulate such a ruling: "1. Subject to the condition set out in order 2, the plaintiff is granted leave to file a Further Amended Statement of Claim pleading the imputations which are currently pleaded by the defendant as contextual imputations in the Amended Defence. 2. The leave granted in order 1 above is granted on the condition that leave to amend be revoked nunc pro tunc in respect of any imputation proved by the defendants to be substantially true, such that, at trial, the defendants may rely upon any such imputation for the purpose of a defence under s. 26 of the Defamation Act 2005 (NSW)."
3. The defendants ask the court to exercise its discretion not to grant the plaintiff the leave to amend sought, other than subject to this condition. They draw my attention to Exhibits B and C, evidence recently obtained on discovery which they claim shows the high likelihood of this contextual imputation (which is what the matter complained of is really all about) being proved true. In those circumstances, they argue, the only reason for the pleading back of the imputation is to avoid the impact of the s 26 defence, as opposed to seeking vindication of reputation.

The plaintiff's submissions

1. Mr Rasmussen submits that the entitlement to "plead back" the defendants' contextual imputations should be unfettered, and that there are no special features in this case warranting such an order. The hearing date is several months away and the defendants have been on notice of this application for some time. He also submits that the evidence asserted to be relied upon in relation to the truth of the contextual imputations is weak and unpersuasive.

The relevant principles in relation to the amendment of pleadings

1. Before considering the circumstances in which late amendments are permitted in defamation proceedings, I first note s 64 Civil Procedure Act 2005 (NSW) provides: "64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate."
2. As to the overarching obligations of litigation, s 58 provides: "58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56(3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case."
3. As Ms Barnett points out in her helpful written submissions, s 64(1) gives the Court a general discretionary power to grant leave to amend pleadings. Section 64(2) relevantly provides that "all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings". The Court's power pursuant to s 64 is expressly stated to be subject to s 58 of the Civil Procedure Act 2005 (NSW). Section 58(1) relevantly provides that in deciding whether to make an order permitting the amendment of the pleading, "the court must seek to act in accordance with the dictates of justice".
4. However, these provisions need to be seen in the context of proceedings which are listed for hearing in a very short period of time. While this is partly due to the application by the defendants to amend, there is an additional problem in that the reasons for that late amendment come from the provision of documents obtained under subpoena, a step the defendants could not take until after the completion of discovery.
5. I also take into account that applications for leave to amend, and in particular leave to amend at a late stage, turn on their own facts. This means that applications of a similar kind are of assistance to the court but ultimately any determination of this issue depends upon the facts of the case.
6. I also take into account the special circumstances of late amendments in defamation proceedings, which have been the subject of consideration in a series of judgments and practice rules over the past thirty years. Late amendments in relation to the pleading back of contextual imputations form a subset of these applications, and it is helpful to consider how other judges have approached this issue.

Amendments in relation to contextual justification

1. The significant impact of Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157 continues to be felt. It appears to be generally accepted that the unfortunate wording of s 26 of the uniform legislation, which led to this result, is unlikely ever to be amended.
2. This has led to further complications. The authorities are divided as to what use may be made by a defendant at trial of any imputation pleaded by the plaintiff, as a comparison of Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421 at [86] with Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197 demonstrates. As Basten JA noted in Born Brands Pty Ltd v Nine Network Australia Pty Ltd, Fairfax Media Publications Pty Ltd v Kermode and Mizikovsky v Queensland Television Ltd are not entirely consistent with each other. In addition, there is a third problem, in that the approach taken by Basten JA in Born Brands Pty Ltd v Nine Network Australia Pty Ltd is itself suggestive of a third avenue of approach, as the New South Wales Court of Appeal noted in Federal Capital Press of Australia Pty Ltd v Balzola [2015] NSWCA 285 at [25].
3. In Kazal v Fairfax Media Publications Pty Ltd [2017] NSWSC 44, McCallum J noted: "[35] The better view, in my respectful opinion, is that the decision in Kermode is not confined to a pleading point but governs the course of the trial. An imputation relied upon by a plaintiff but proved true may be relied upon in mitigation of damages but does not, in my view, become a "contextual imputation" for the purpose of a defence under s 26."
4. Similarly, in Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230 at [35]-[44], Beech-Jones J held that imputations relied upon by the plaintiff but found to be substantially truth can be relied upon by the defendant as contextual imputations for the purpose of a s 26 defence.
5. While, as the defendants point out in their helpful written submissions, this controversy need not be determined on this application, one illustration of the difficulty in relation to this application is that, if the approach taken by McCallum J in Kazal v Fairfax Media Publications Pty Ltd is preferred, the defendants will be deprived of the ability to rely upon their s 26 defence in the manner adopted by Beech-Jones J and, it would appear, also on the interpretation taken by the New South Wales Court of Appeal in Federal Capital Press of Australia Pty Ltd v Balzola.
6. The degree of complexity which will be introduced into the trial by this problem is particularly apparent in the present case, as the defendants state that the second of the contextual imputations is highly likely to be established at trial, having regard to material recently produced under subpoena. ASIO has now produced material which the defendants claim will prove that ASIO was indeed monitoring the plaintiff, in that it accessed and printed his Facebook page on 25 July 2014, five days prior to the publication of the matters complained of. It is submitted that, in these circumstances, where this imputation is true will not sound in damages for the plaintiff if the application is granted on an unconditional basis, the defendants will be denied the ability to defend the proceedings on the basis of the substantial truth of this imputation because the plaintiff is seizing on the "loophole" of pleading this imputation despite it being true.
7. The defendants submit that the plaintiff's application, in those circumstances, is not brought for the purposes of vindication, but to achieve a forensic advantage by pleading an imputation he knows to be true, which the Court of Appeal has held, in Toben v Nationwide News Pty Ltd [2016] NSWCA 296, to amount to an abuse of process.
8. The defendants also point to the lateness of the application. Late amendments in defamation were for many decades the subject of special sanctions and rules, some of which were set out by Hunt J in his Honour's Defamation List Announcement of 14 October 1988. Applications for late amendment which could result in the adjournment of the trial were either refused or the subject of orders of a remedial nature, such as the service of affidavits in relation to late amendments of justification. These two factors - the complexity of defamation jury trials and the discouragement of late amendment in defamation proceedings - need to be borne in mind when dealing with late applications to amend.

Reasons for the late amendment

1. A late amendment which is likely to have a significant impact on the trial must generally be explained, for the reasons set out by the High Court in Aon Risk Services Australia v Australian National University (2009) 258 ALR 14.
2. The defendants complained that the plaintiff has supplied no evidence in support of his application for leave to amend in the way of explanation for delay which is stated to be four months since the plaintiff was notified of the defendants' intention to raise these matters in the Amended Defence, in circumstances where the plaintiff's legal representatives (and for that matter the plaintiff) had been aware of the documents produced under subpoena. It is submitted that the true purpose of the plaintiff is not to plead imputations by which he complains he has been injured in his feelings and reputation but take advantage of the acknowledged loophole in the legislation in relation to the defence of contextual justification, either to prevent the defendants from relying upon the defence of justification or to introduce such complexity into the jury questions as will cause difficulties at the trial.
3. This inference is asserted to arise from: 1. The plaintiff's conduct in resisting the conditional order set out above. If the plaintiff's true intention were to seek damages and vindication of his reputation with respect to the contextual imputations, this purpose would be served by the making of the orders proposed by the defendants. However, the plaintiff's resistance to these orders is telling. It reveals that the plaintiff's true intention is to deprive the defendants of a properly pleaded defence (a purpose that would not be achieved by the making of the conditional orders); 2. The fact that these imputations have not been pleaded by the plaintiff, despite having had ample opportunity to do so and despite being explicitly on notice of those imputations for approximately four months since the service of the proposed Amended Defences, and despite being advised by experienced defamation counsel; 3. The fact that no explanation for the delay has been provided.
4. For these reasons the defendants submit it would not be "just" within the meanings of s 56(1) and/or s 57(1)(a) of the Civil Procedure Act 2005 (NSW) to allow the amendment without conditions as set out above.
5. Alternatively, the defendants submit it is an abuse of process to make use of a procedural power in a manifestly unfair way: Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 per Lord Diplock; Walton v Gardiner (1993) 177 CLR 378 at 393 - 394; Rogers v the Queen (1994) 181 CLR 251 at 255, 286 - 287; Jeffery & Katauskas v SST Consulting Pty Ltd (2009) 239 CLR 75 at 93, 103 - 104, [56].

The plaintiff's submissions

1. The reasons for the plaintiff not pleading these imputations earlier are set out in the affidavit of William Allen dated 29 March 2017. He is the solicitor for the plaintiff. He states that he is not experienced in defamation and relied on counsel to plead all available imputations. He states, on information and belief, that the plaintiff told him that "each of the proposed contextual imputations…are [sic] false" (paragraph 12), which I find most unhelpful.
2. The scant and unhelpful nature of the plaintiff's submissions were a critical factor in my decision. The defendants, by comparison, not only supplied careful written submissions but extracts from the evidence which they assert will establish the truth of the imputation.
3. That evidence is not addressed by the plaintiff beyond the bald statement of the solicitor for the plaintiff (who acknowledges his lack of expertise in this field) that his client has told him these imputations are false.
4. Mr Rasmussen also pointed to the number of times that a party was granted leave in other proceedings to amend without this restriction and to the length of time until the hearing for the defendants to come to terms with this amendment. There was, he submitted, no special magic about the contextual imputations the subject of this application, which closely resembled the plaintiff's own imputations.

Conclusions

1. While parties to applications such as the present are entitled to be cautious about revealing evidence which will be led at the trial in applications such as the present, the total absence of any engagement by the plaintiff's legal representatives in relation to the evidentiary issues means that I am faced with a picture of evidence under subpoena submitted to be critical by the defendants which is not answered in any way by the plaintiff other than the bald statement, on information and belief, that the contextual imputations are false.
2. Mr Allen's affidavit is similarly unhelpful in terms of explaining the reason for this application to amend taking so long to be heard that the trial is a matter of months away. Both parties have been aware of the hearing date since these proceedings were set down on 17 August 2016, of the defendants being granted leave to plead these contextual imputations late last year, and that the documents produced under subpoena which led to that amendment say what they say, whether that supports their respective cases or not. (In view of the imminence of the trial it is best not to disclose that information in this judgment).
3. As is set out above, where the facts of the case warrant the making of such a condition, other judges have been prepared to place a proviso upon the granting of leave. Having regard to the evidence here, I am satisfied that this is such a case.
4. For the above reasons, I am satisfied that, having regard to the evidence produced and the issues raised by the defendants in their written submissions, this is a case where leave to amend should be granted, but only upon the conditions sought by the defendants.

Costs

1. There are a number of outstanding costs issues in relation to interlocutory proceedings, as is clear from my orders on 1 December 2016 as set out above. In addition, I reserved the costs of the application in relation to the manner of hearing of these proceedings in my judgment of 5 August 2016.
2. The defendants ask me to determine the costs of that application now. They argue that the plaintiff has sought an indulgence, and that they have been successful in the application, in that the proviso they sought has been granted. The plaintiff could have agreed to this course and avoided both the delay and expense of this argument.
3. These are submissions of considerable persuasive value, and Mr Rasmussen's submissions were of a perfunctory nature.
4. However, I am of the view, given the imminence of the hearing that this is an appropriate matter to be determined by the trial judge. Accordingly, I reserve all costs issues to the trial judge, including the costs of this application for leave to amend.

Orders in Boikov v Network Ten Pty Ltd (2015/220364) 1. Grant leave to Dailymail to produce documents in court, in response to a notice to produce to the plaintiff, which will be marked as documents produced as if under subpoena by the Subpoena Registry. 2. Orders in accordance with the confidentiality regime as set out in the document headed Order dated 30 March 2017 filed in court today. 3. Subject to the condition set out in order (4), the plaintiff is granted leave to file a Further Amended Statement of Claim pleading the imputations which are currently pleaded by the defendant as contextual imputations in the Amended Defence. 4. The leave granted in order (3) above is granted on the condition that leave to amend be revoked nunc pro tunc in respect of any imputation proved by the defendants to be substantially true, such that, at trial, the defendants may rely upon any such imputation for the purpose of a defence under s 26 of the Defamation Act 2005 (NSW). 5. Costs of this application reserved to the Trial Judge.

Orders in Boikov v Nationwide News Pty Ltd (2015/220729) 1. Grant leave to Dailymail to produce documents in court, in response to the defendant's 16 March 2017 subpoena, which will be marked as documents produced as if under subpoena by the Subpoena Registry. 2. Orders in accordance with the confidentiality regime as set out in the document headed Order dated 30 March 2017 filed in court today. 3. Subject to the condition set out in order (4), the plaintiff is granted leave to file a Further Amended Statement of Claim pleading the imputations which are currently pleaded by the defendant as contextual imputations in the Amended Defence. 4. The leave granted in order (3) above is granted on the condition that leave to amend be revoked nunc pro tunc in respect of any imputation proved by the defendants to be substantially true, such that, at trial, the defendants may rely upon any such imputation for the purpose of a defence under s 26 of the Defamation Act 2005 (NSW). 5. Costs of this application reserved to the Trial Judge.

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: 01 May 2017