(c) The plaintiffs were criminals of the worst order who had an enormous amount of illegally obtained cash in their possession".
23 Particulars of identification are provided. As I have said, the first plaintiff was named in the Manly Daily. It is alleged that the second plaintiff (Mr Preston) was "identified" in a Daily Telegraph article published on 7 November 1996 (not, as far as I can see, sued upon). Otherwise reference is made to what is said to be the plaintiffs' arrest on 28 October 1996, their being charged on that date with conspiracy to defraud and money laundering, their involvement in the aviation industry and specifically their involvement in that industry in connection with Norfolk Island.
24 By consent, pursuant to SCR Pt 31 r 2, the question of law as to the capacity of Schedule A (Media Release) to carry certain pleaded imputations was argued. The focus was on that publication insofar as any liability in the defendants for re-publication would be based only on those parts of the media release to be found in the re-published materials set out in Schedules B - G.
25 The media release is in the following terms (omitting contact details):
" Joint Operation - $6.8 Million Tobacco Revenue Evasion
29 October, 1996
State and Federal law enforcement agency officers seized $1.25 million dollars in cash and cigarettes, along with about 160 firearms yesterday when they smashed a highly organised tobacco smuggling operation, the NSW Police Service announced today.
Officers from Operation Norfolk - a four month joint NSW Police, Office of State Revenue and Australian Customs Service Operation - swooped on 24 premises across metropolitan Sydney at dawn yesterday, seizing guns, cigarettes and cash.
Minister for Police, Mr Paul Whelan said seven people were arrested and faced charges of conspiracy to defraud and money laundering - crimes which carried maximum gaol penalties of 20 years.
"As well, it is expected that proceeds of crime amounting to millions of dollars will also be confiscated," Mr Whelan said.
Commander of Special Agencies, Acting Assistant Commissioner Mal Brammer said Operation Norfolk began four months ago, targeting a number of people allegedly involved in an elaborate import-export scheme, designed to defraud State Revenue of $6.8 million in tobacco licence fees.
He said 127 State and Federal officers worked together in the operation which focused on the distribution and sale of tobacco products.
"During the operation, police from the Fraud and Drug Enforcement Agencies seized almost $750,000 in cash, $500,000 in contraband and a large number of firearms.
"The operation demonstrated the high level of co-operation between police and state and federal agencies targeting organised crime," A/C Brammer said.
Customs NSW Regional Manager, Julian Mallett said this was the first time Customs had been involved in such a Task Force with NSW agencies.
"Today's successful outcome is the result of very close co-operation and sheer hard work by all involved," Mr Mallett said".
26 The imputations under challenge on a capacity basis are 14(a), (c), (e), (g) and (h).
27 in relation to these imputations essentially the argument is what is known in the Defamation List as the "Harrison" point (Mirror Newspapers Limited v Harrison (1982) 149 CLR 293). It is argued that the matter complained of states nothing more than the assertion that seven unnamed persons were arrested and charged in respect of criminal activities. There is nothing that would lead the ordinary reasonable reader to understand of these seven people (whoever they are) that they were "guilty" of any of the charges as distinct from being suspected on reasonable grounds of having committed them.
28 Reliance is particularly placed on the well known passages of Mason J in Harrison at 299 to 301. At 300 his Honour referred to the strong current of authority which supported the view that a "report which does no more than state that a person has been arrested and has been charged with a criminal offence is incapable of bearing the imputation that he is guilty or probably guilty of that offence". As his Honour states it is the position that the ordinary reasonable reader is mindful of the principle that a person charged with a crime has the benefit of the presumption of innocence. At 301 his Honour said:
"A distinction needs to be drawn between the reader's understanding of what the newspaper is saying and judgments or conclusions which he may reach as a result of his own beliefs and prejudices. It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition. Its importance for present purposes is that it focuses attention on what is conveyed by the published material in the mind of the ordinary reasonable reader.
… I think that it is capable of bearing the imputation that the police suspected him of having committed the offence and that they had reasonable cause for doing so. That in my opinion is what the ordinary reasonable reader would understand to be conveyed by such a report".
29 A fair reading of the media release, it is argued, taking into account the proscribed ratiocination (inference upon inference) could not permit the ordinary reasonable reader to conclude that the matter complained of was asserting "guilt".
30 Particularly with respect to imputations 14(g) and (h) it is argued that the matter complained of is incapable of giving rise to any suggestion of membership of an organised and armed crime syndicate. I do not agree with that component of the defendants' submissions. The language of the media release readily admits of a notion of membership of a crime syndicate which was armed.
31 In relation to 14(h), first, Mr Lynch disclaimed any understanding of the use of the word "smuggle" in its terms of its meaning "cuddle, fondle, caress" (see Short OED). Nonetheless he said that the matter complained of was incapable of the assertion as to "smuggling" being made in respect of the unidentified plaintiffs in any event. I reject this component of the defendants' submissions.
32 Mr Caspersonn for the plaintiff argued that Schedule A goes beyond a simple report of arrest and charge. Its tone, language and format clearly would have an impact on the ordinary reasonable reader of it in terms of the scale of the Police operations, the scale of the crime and the scale of the "haul". The ordinary reasonable reader (identified as the "Bankstown mechanic"), it was submitted, does not know the law and would have no problem in understanding that a crime had been committed and that the ring had been smashed. Thus, it is argued as I understand it, that the impact of all that it is said about the crime, the investigation, the "seizure" would lead to a legitimate inference, not founded on an antecedent inference that the "seven people who were arrested and faced charges" in fact were guilty.
33 Particular attention was paid to parts of the media release, for example, that refer to "proceeds of crime, amounts of money being seized as contraband," a highly organised tobacco smuggling operation and a "successful outcome." These references, it was argued, would in effect eliminate any chance of the first inference of reasonable suspicion arising as is referred to in Harrison, but rather would constitute an express statement (let alone an implication) that went beyond the foundation for the laying of the first inference.
34 Submissions of this nature have been recently dealt with by the Court of Appeal in Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158. Hunt CJ at CL said at 166F:
"What must be emphasised is that it is the test of reasonableness which guides any court in its function of determining whether the matter complained of is capable of conveying any of the imputations pleaded by the plaintiff. In determining what is reasonable in any case, a distinction must be drawn between what the ordinary reasonable reader, listener or viewer (drawing on his or her own knowledge and experience of human affairs) could understand from what the defendant has said in the matter complained of and the conclusion which the reader, listener or viewer could reach by taking into account his or her own belief which has been excited by what was said".
35 His Honour went on to deal with the distinction between an implication and an inference as follows:
"It is necessary to emphasise the important distinction between an implication and an inference. An implication is included in and is part of that which is expressed by the publisher. It is something which the reader (or listener or viewer) understands the publisher as having intended to say. An inference is something which the reader (or listener or viewer) adds to what is stated by the publisher; it may reasonably or even irresistibly follow from what has been expressly or impliedly said, but it is nevertheless a conclusion drawn by the reader (or listener or viewer) from what has been expressly or impliedly said by the publisher: cf Lubrano v Gollin and Co Pty Ltd (1919) 27 CLR 113 at 118; Rose v Hvric (1963) 108 CLR 353 at 358. It is the reader's (or listener's or viewer's) own conclusion" (167B-C) .
36 His Honour went on to say:
"An inference is drawn from an inference when the reader, listener or viewer draws an inference which is available in the matter complained of and then uses that inference as a basis (at least in part) from which a further inference is drawn. The publisher is held responsible for the first of those inferences but not for the second because - as I have already said - it is unreasonable for the publisher to be held so responsible. In Mirror Newspapers Ltd v Harrison (at 300), the High Court illustrated the process which leads to an inference upon an inference in the case where the matter complained of states that the plaintiff had been charged with an offence. The first inference available from that statement (for which the publisher is held responsible) is that the police believed the plaintiff to be guilty or had a ground for charging him. (The phrase "reasonable cause" is substituted for "ground" at page 301.) The second inference, which is based at least in part upon that first inference (and thus is not one for which the publisher is held responsible because it is unreasonable to do so), is that the plaintiff is in fact guilty of the offence charged. (The cases referred to by the High Court are Lang v Australian Consolidated Press Ltd and Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16.) That requirement of reasonableness must apply in every case. There can, however, be no unreasonableness involved in making the publisher responsible for an inference drawn by the reader (or listener or viewer) from a statement which the publisher is reasonably understood to have intended to imply in the matter complained of".
37 His Honour concluded his analysis of the authorities by stating:
" What the Privy Council was saying in Jones v Skelton is that, if the publisher invites the adoption of a suspicious approach, it is reasonable for him to be responsible for at least some conclusions reached for which it would not otherwise have been reasonable to make him responsible. A degree of conjecture or guesswork is therefore permitted which would not otherwise be permitted. However, the requirement of reasonableness still applies. The publisher is not responsible for every conclusion which may have been reached by such conjecture or guesswork " (169E-F).
38 I do not agree with the defendants' submission that the publication is no more than a mere report of arrest and charge. The florid account of the criminal enterprise smashed elevates the publication beyond that. Nor do I agree, that as a media release, its impact is that for which the plaintiff contends, namely, to compel the inference of guilt as the only inference, indeed the only one "invited" from what is expressly stated or otherwise implied in the matter complained of.
39 Applying still the test of reasonableness as reiterated by Hunt CJ at CL in Marsden, the conclusion I reach is that any inference of guilt is not available by way of resting upon an implication, "invitation" let alone on the antecedent inference of suspicion.
40 I decide the separate question of law as to imputations 14(a), (c), (e), (g) and (h) in favour of the defendant, holding that the matter complained of is incapable as a matter of law of carrying such imputations.
41 The next matter for determination is the imputation pleaded in paragraph 20(a) arising from Schedule H to the ASC being an alleged oral publication by D4 on 29 October 1996. Schedule H is in the following terms:
"Schedule H
I think it serves notice on all of these crooks that they can't get away with it. They're not only crooks, they're pretty dumb as well.
If you're involved in these scams, we're coming to get you and we'll get you and we've done it again".
42 Imputation 20(a) is "the plaintiffs are stupid and guilty of having criminally defrauded the State of millions of dollars of tobacco taxes".
43 The first argument is that it is a "rolled-up" imputation containing two quite separate components namely, "stupidity" and "guilt". It was argued for the plaintiff that this is an instance where the defendant is bound by the very words spoken, their succinct nature and indeed, brevity; see Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137D - F and otherwise generally per Gleeson CJ.
44 I am not persuaded by the submissions for the plaintiff that the quality of the publication is such as to permit the combination of the two separate entities. It seems clear to me that what the Minister is there saying is that the people are "crooks" and the people are "dumb" (as crooks).
45 It was argued for the defendant that this imputation is incapable of arising as a matter of law (assuming it to be bifurcated) in terms of an assertion of guilt either as to stupidity or criminality. This is a clear case where applying the test of reasonableness it can be understood that the publisher was imputing "guilt" to the persons to whom he was referring.
46 Accordingly, I strike out imputation 20(a) as being bad in form.
47 Any imputations leave to replead which is granted and which contain the component to the effect that the plaintiffs' are "guilty of having criminally defrauded the State of millions of dollars of tobacco taxes" and, separately, "stupidity" are capable as a matter of law of arising in terms of the assertion of guilt. In this respect it is to be noted particularly that the plaintiff is pleading, or will be pleading, such an imputation by way of true innuendo.
48 It is with respect to the imputations said to arise from Schedule I that the problems referred to in respect of the first matter complained of (the media release) acutely arise.
49 Schedule I is in the following terms:
"Seven people have been arrested. $750,000 in cash has been confiscated. 160 weapons have been confiscated.
The haul of weapons includes prohibited firearms, automatics and semi automatic.
If criminals attempt to deprive the state of millions of dollars, they will pay the price.
It seems they need a lot of protection. There are prohibited weapons and semi-automatic and automatic weapons.
Be in no doubt, this was a big money operation".
50 The imputations said to arise from that publication are as follows:
"25(a) The plaintiffs were criminals who had defrauded the State of New South Wales of millions of dollars.
(b) The plaintiffs were dangerous and violent criminals who had an enormous number of illegal firearms in their possession.
(c) The plaintiffs were criminals of the worst order who had an enormous amount of illegally obtained cash in their possession".
51 With respect to this publication I am not prepared to accede to the defendants' position that there can be no drawing of an imputation of guilt. This seems to me to be the case where no "conjecture" or "guess work" is involved in drawing the inference from the clear statement by the publisher about "criminals" who "needed a lot of protection".
52 Accordingly, I hold that the matter complained of is capable as a matter of law of carrying the pleaded imputations and determine the separate question accordingly.
53 Before further orders are made under Pt 31 r 2 as to trial by jury of issues under s 7A of the Defamation Act 1974 the matter will have to be listed for "intense" directions. The s 7A trial will be of necessity of some complexity involving, as it does, allegations of publication, re-publication, identification and true innuendos.
54 Accordingly, the formal orders are: