Brown v Nationwide News Pty Ltd & Anor

The history of amendments leading up to the pleading in its current form is as follows. The Statement of Claim as first filed in these proceedings on 16 November 2006 brought proceedings for defamation against both defendants, and also for damages for breaches of s.52 Trade Practices Act 1974 (Cth) and s.42 Fair Trading Act 1987 (NSW) and for breach of contract against the second defendant only. The original pleading asserted both defendants "published or caused to be published" an article in The Australian on 24 April 2006.

Following objections to this document an Amended Statement of Claim was filed on 16 March 2007, in which only the first defendant was sued in relation to the publication of an article in The Australian, while the second and third defendants (the third defendant being Mr Reg Inglis, who was joined without leave), were asserted to have "caused to be republished" the said words or the effect or the substance of the said words published in The Australian by the first defendant.

A Further Amended Statement of Claim was filed on 30 March 2007. The claims under the Trade Practices Act and Fair Trading Act were abandoned and an assault claim was added.

The current pleading retains the claim for assault but also adds a claim for what maybe called "slander by conduct" (paragraph 8A and 8B). I note Mr Inglis is no longer a party to these proceedings.

As a result of these changes to the pleadings, the matter came before the court on 2 February, 9 and 29 March, 13 and 27 June 2007 before being ready to be set down for hearing. The hearing was unable to be completed on 19 October 2007 and was stood over to 22 November 2007. The plaintiff was not ready to proceed on that day and the matter was stood over part heard to 8 February 2008.

By reason of the changes in the pleading and the manner in which the case has been approached, there has been considerable confusion as to the issues in dispute. On 8 February three of the matters the subject of dispute were able to be resolved by consent orders, namely identification of the persons who heard the libel, particulars of the grapevine effect and particulars in relation to the assault. The sole remaining matters outstanding are: (a) The form and capacity of the imputations; (b) The form of the pleading against the second defendant, and in particular whether the second defendant should be sued as a publisher or a republisher: Bracks v Denoon (Supreme Court of New South Wales, Nicholas J, 14 December 2006); and (c) The form of the slander by conduct pleading.

Objections to the form and capacity of the imputations

First matter complained of 8. The text of Annexure A is set out as an annexure to this judgment. The plaintiff in paragraph 4 of the Corrected Further Amended Statement of Claim pleads that this publication conveyed the following imputations: (a) The plaintiff was ejected from the sale grounds because he attempted to engage in auction rorts (paragraphs 1, 4, 14, 18, 19, 20, 21 and 22). (b) The plaintiff was ejected from the sale grounds because Reg Inglis suspected him of attempting to engage in auction rorts (paragraphs 1, 4, 14, 18, 19, 20, 21 and 22). (c) The plaintiff was frogmarched from the sale grounds by the second defendant's security people because he gatecrashed the sale (paragraphs 1, 4, 20, 21 and 22). (d) The plaintiff behaved so badly at the sale that the second defendant's security people frogmarched him from the sale grounds in the presence of the who's who of the bloodstock world and leading buyers (paragraphs 1, 4, 20, 21, 22, 28, 31, 32 and 38). (e) The plaintiff trespassed on private property (paragraphs 20, 21 and 22). (f) The plaintiff gatecrashed the sale grounds when he knew he was not welcome and had not been invited (paragraphs 1, 4, 20, 21 and 22). (g) The plaintiff was frogmarched from the sale grounds by the Inglis people (paragraph 20). Second matter complained of 9. The publication which is Annexure B to the Correct Further Amended Statement of Claim consists of extracts from Annexure A for which solely the second defendant has been sued. The plaintiff pleads that the following imputations are capable of being conveyed: (a) The plaintiff was ejected from the sale grounds because he attempted to engage in auction rorts (paragraphs 1, 2 and 3). (b) The plaintiff was ejected from the sale grounds because Reg Inglis suspected him of attempting to engage in auction rorts (paragraphs 1, 2 and 3). (c) The plaintiff was frogmarched from the sale grounds by the second defendant's security people because he gatecrashed the sale (paragraphs 3, 4 and 5). (d) The plaintiff behaved so badly at the sale that the second defendant's security people frogmarched him from the sale grounds in the presence of the who's who of the bloodstock world and leading buyers (paragraphs 3, 4, 5, 6 and 7). (e) The plaintiff trespassed on private property (paragraphs 3, 4 and 5). (f) The plaintiff gatecrashed the sale grounds when he knew he was not welcome and had not been invited (paragraphs 3, 4 and 5). 10. In its somewhat confusing pleading the plaintiff goes on to set out a second set of imputations as arising from the alleged republication (as opposed to the mere publication) of these words spoken by the second defendant or its servant or agent Reg Inglis. These imputations which are set out in paragraph 8 of the Corrected Further Amended Statement of Claim, are as follows: (a) The plaintiff was ejected from the sale grounds because he attempted to engage in auction rorts (paragraphs 1, 4, 14, 18, 19, 20, 21 and 22). (b) The plaintiff was ejected from the sale grounds because Reg Inglis suspected him of attempting to engage in auction rorts (paragraphs 1, 4, 14, 18, 19, 20, 21 and 22). (c) The plaintiff was frogmarched from the sale grounds by the second defendant's security people because he gatecrashed the sale (paragraphs 1, 4, 20, 21 and 22). (d) The plaintiff behaved so badly at the sale that the second defendant's security people frogmarched him from the sale grounds in the presence of the who's who of the bloodstock world and leading buyers (paragraphs 1, 4, 20, 21, 22, 28, 31, 32 and 38). (e) The plaintiff trespassed on private property (paragraphs 20, 21 and 22). (f) The plaintiff gatecrashed the sale grounds when he knew he was not welcome and had not been invited (paragraphs 1, 4, 20, 21 and 22). Third matter complained of - the slander by conduct claim 11. The conduct and words set out in the slander by conduct claim, which is Annexure C to the Corrected Further Amended Statement of Claim, is set out in the schedule to this judgment. The plaintiff pleads in paragraph 8B of the Corrected Further Amended Statement of Claim that the words and conduct give rise to four imputations which are as follows: (a) The plaintiff behaved so badly that he deserved to be removed from the sale grounds. (b) The plaintiff so conducted himself that he deserved to be removed from the sale grounds. (c) The plaintiff is unfit to remain upon the sale grounds. (d) The plaintiff is so undesirable that he should be removed from the sale grounds.

A preliminary point - The test to apply in arguments about form and capacity 12. On 13 June 2007 I directed the parties to provided me with submissions on the impact (if any) of the Defamation Act 2005 (NSW) and the new defamation rules on the manner in which arguments as to form and/or capacity differs from the regime under the Defamation Act 1974 (NSW). The Defamation Act 2005 removed the imputation as the cause of action in New South Wales in respond to long standing criticisms of the kind enunciated by Andrew T. Kenyon in "Imputation or Publication: The Cause of Action in Defamation Law" (2004) 27 UNSW Law Journal 100-122. Mr Kenyon, drawing on empirical research, concluded that what appeared to be a minor legal difference was in fact an important element in the complexity of New South Wales litigation because the imputation-based cause of action has "encouraged interlocutory fights about the form of pleaded imputations, as well as encouraging imputations to be considered separately, rather than in the context of the publications in question" (at p.102). As a result the availability of defences, notably comment, were curtailed. By comparison imputation arguments occur far less frequently in common law states.

13. At p.108 of his helpful article, Mr Kenyon notes that the degree of specificity is a major question about pleading meaning. Because each imputation was a separate cause of action in New South Wales under the 1974 Act, there is a requirement that the imputations be pleaded with specificity.

14. Mr Kenyon notes with approval the comments of Justice David Levine, the New South Wales Supreme Court Defamation List Judge for almost a decade, in "The Future of Defamation Law" (31 August 1999) Lawlink at [12] in which his Honour commented that: "The amount of the Court's time, let alone litigants' resources, expended profligately in the determination of what words, sentences and phrases mean is positively scandalous; and this is at the initiation of proceedings."

15. The Court of Appeal has recently handed down a helpful decision which has explained the correct approach to imputations: Malcolm v Nationwide News Pty Ltd [2007] NSWCA 254. Although Malcolm deals with a publication brought under the Defamation Act 1974, Beazley JA pointed out that "the authorities have placed particular emphasis on the role of the jury in determining whether a pleaded imputation is conveyed by the matter complained of" (at [19]). Beazley JA went on to note at [20]: "Thus, in Sergi v Australian Broadcasting Commission [1983] 2 NSWLR 669, Glass JA at 674 stated that the question whether the imputation was conveyed should go to the jury unless it was blindingly obvious that no other conclusion was reasonably open. In Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158, Hunt CJ at CL (Mason P and Handley JA agreeing) stated at 164-165 that if reasonable persons may differ as to the conclusion to be drawn from the matter complained of, the issue as to whether the imputation was in fact conveyed must be left to the jury."
16. The question of the appropriate test for the form and capacity of imputations under the 2005 Act is the first issue I must determine. Should the meaning of defamatory publications governed by the 2005 Act be pleaded with the more liberal approach taken in actions brought in jurisdictions outside New South Wales where the common law applies (as suggested by P George in Defamation Law in Australia LexisNexis 2006 at paragraph 9.6), or does the use of the word "specify" in Part 14.30 Uniform Civil Procedure Rules 2005 (NSW) mean that the same principles about specificity, including striking out imputations because of asserted errors in form should be applied? In addition, the provisions of ss.56-62 Civil Procedure Act 2005 and s.40 Defamation Act 2005 may require the proceedings to be approached with the view of achieving a "just, quick and cheap" resolution rather than the lengthy interlocutory applications so deplored by Kirby J in Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186 at [21]-[22], and in Chakravarti v Advertiser Newspapers Ltd (1998) 154 ALR 294 at [144] (at [21] Brennan CJ and McHugh J concurred). In a number of unreported decisions of the Supreme Court such as John Finnin v John Fairfax Publications Pty Ltd and Anor (Supreme Court of New South Wales, Nicholas J, 18 April 2007, unreported), arguments on form, capacity and defamatory meaning have proceeded without any change, because the approach in the Supreme Court is that the reference to the need to "specify" the imputations in Part 14.30 Uniform Civil Procedure Rules overrides ss.56-62 Civil Procedure Act 2005 and the provisions of the Defamation Act 2005.

In the District Court, Part 49 of the District Court Rules 1973 (NSW) (repealed on 17 February 2006) and Part 14.30 Uniform Civil Procedure Rules 2005 are in more or less identical terms. The notes to Part 14.30 Uniform Civil Procedure Rules state that the test for striking out imputations is the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. The General Steel test was never referred to in relation to tests on capacity in relation to the 1974 Act (although it was relevant to other pleading issues for imputations, such as true innuendo).

The essential difference between the old and new legislation is that s.8 Defamation Act 2005 makes the publication a cause of action, whereas under the 1974 Act s.9(2) make each separate defamatory imputation a cause of action, a feature of defamation law unique to New South Wales. However, defences under the 2005 Act are now pleaded to the "matter" rather than to the imputation as was previously the case. While imputations remain of importance in defences of justification and partial justification (as to which see Part 14.31(2) and Part 14.32 and 33), and there may well be a need for specificity on some kind in such a case, the fact remains that imputations are particulars and particulars can be added to, dropped or changed at any time during proceedings including up to the time of giving judgment: Dare v Pulham (1982) 148 CLR 658 at 664.

In common law jurisdiction such as the Australian Capital Territory imputations are pleaded with a greater degree of flexibility because the imputation is not the cause of action: Aboriginal Nations Pty Ltd v John Fairfax Publications Pty Ltd and Anor [1998] ACTSC 125 at [23]-[26]. Accordingly the striking out of an imputation is not undertaken lightly and judgments routinely state that this should be done with great caution (see for example: Icon International Communications Pty Ltd v Nationwide News Pty Ltd [2005] ACTSC 110 at [4] and [13] per Crispin J).

The test in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 which was referred to by the Court of Appeal in Malcolm at [20] is referred to in the Practice Notes at Part 14.30.20 as being particularly relevant to actions brought under the old legislation; the question is whether it is appropriate for s.8 Defamation Act 2005.

In Clarke & Anor v Melbourne University Publishing Ltd trading as Melbourne University Press [2007] NSWDC 189 at [19] I considered the issue of the correct way to approach attacks on imputations pleaded in actions governed by the Defamation Act 2005. I noted and followed the capacity test enunciated by the High Court in Favell v Queensland Newspaper Pty Ltd. The publication which was under consideration in these proceedings was not a publication in New South Wales and therefore the publication (not the imputations) was the cause of action. I considered that the test applicable for imputations in those circumstances would be of more utility than the decisions in this State, because the requirement that the imputations be pleaded with specificity related to the fact that under the Defamation Act 1974 (NSW) the imputations, not the publications, are the cause of action. This decision is the subject of an application for leave to appeal.

Shortly after this decision, the Court of Appeal handed down its decision in Malcolm v Nationwide News Pty Ltd. The Court of Appeal at [20] (which is set out above) restated the tests in Sergi and Marsden, and this decision is now referred to in Supreme Court decisions concerning form and capacity rather than the General Steel test. I do not see anything in the Court of Appeal's passing comments at [20] to create a new requirement for reasonableness under the 1974 Act or the 2005 Act.

However, the defendants submit that I have misread Malcolm, and that the test imposed by Beazley JA in Malcolm at [20] requires the same strictness and precision under the 2005 Act as there was under the 1974 Act. The General Steel test is, therefore, not applicable to applications to strike out imputations.

If the defendants' interpretation of Malcolm is correct, this will disappoint not only academics like Mr Kenyon but also the legislators who, in drafting the 2005 Act, hoped to reduce the lengthy and expensive interlocutory battles on the form and capacity of imputations that made defamation cases so productive of complexities and legal costs. In view of the defendant's submissions concerning the correct test to apply, and noting that my two judgments in Clarke are the subject of an applications for leave to appeal, I will consider questions of form and capacity issues for the first two publications on the test proposed by the plaintiff as well as the test proposed by the defendants. In view of my findings concerning the slander by conduct action (which will depend on the evidence at the trial, including visual evidence of the security guards and their uniforms) I have accepted the plaintiff's submission that it is premature to hold a separate trial, so I have not made rulings about these imputations (although I have noted some errors in form concerning two of the imputations).

I now turn to a consideration of the individual imputations. The publication is, in terms of capacity, fairly straightforward.

First matter complained of, Imputation 4(a) - "The plaintiff was ejected from the sale grounds because he attempted to engage in auction rorts." 26. The matter complained of is headed "Horse trading at its very best" and the double meaning in "horse trading" becomes clear when journalist goes on to describe the auction as "extraordinary" for, among other reasons, the fact that it was "refreshingly honest sale for the thoroughbred industry". Proof of this comes from the median price, which is "the fairest of all sale measures" (paragraph 6). Mr Tony Arrold, the journalist, notes that: "No southern hemisphere yearling venue has seen the likes of this sale before, but now that it has happened rest assured it can happen again." (paragraph 7)

Paragraph 13 notes that: "What has been hard to put a lid on in the bloodstock market for many years at this, and almost every other significant sale, is the rorts that have gone on that leave a public perception that something was not as it had been presented."

Paragraph 14 then gives what is called "a classic example" and paragraph 15 notes that the 2006 Australian Yearling sale was "almost totally clean of such nonsense, although there are strong suspicions over one yearling at the top end of the market - and there seems to be no secret among industry players as to what that was all about."

Mr Arrold concludes in paragraph 16 that this was "an honest sale" because everyone was getting above their reserved prices. Paragraph 18 notes that the Inglis company, like all other auctioneers, "has to turn a blind eye" to rorts and arrangements since this job is simply to auction the horse to the highest bidding and expect their appropriate fee from the vendor "rort or no rort".

Paragraph 19 then states that: "The integrity of world bloodstock sales has come under close scrutiny in the past two years."

It is immediately after that that there is the reference to the plaintiff in paragraphs 20 to 22. It the opening session, "to the bewilderment of those not fully understanding the implications - the Inglis security people frog-marched a person from the sale grounds." Hint is given when it refers to the fact that the same two parties who recently concluded a defamation case on the steps of a Sydney court house were involved.

Immediately following this, "by sheer coincidence" we learn that Mr Jess Jackson, who has laid fraud charges against industry participants in the United States, including bloodstock agents and a prominent trainer.

The reference to the plaintiff being frogmarched from the opening session of the Tuesday auction, is at the end of an article talking about eradicating rorts. This imputation would survive any test, whether the same, more or less particularity for precision in pleadings is required.

The admonitions of Beazley JA to leave jury questions to the jury are appropriate to note here. It is quintessentially a jury question whether the circumstances in which the plaintiff was frogmarched from the sale grounds had something to do with his integrity (paragraph 19) or prior involvements in rorts and arrangements (paragraph 18).

It was urged upon me that the publication asserted only that the "same two parties" had recently concluded a defamation case. However, the subject matter of that defamation case is not referred to. The ordinary reasonable reader, who is capable of indulging in some loose thinking, might have concluded that the defamation case had something to do with allegations about honesty, particularly since the reference to the case being concluded on the steps of a Sydney court house is followed by reference to other court proceedings in United States brought by a Mr Jackson in relation to rorts.

Objection is also made on the basis that attempting to engage in auction rorts is an imputation on its own and the reference to being ejected is mere surplusage.

I am troubled by the excessive formality in making such an objection to a particular. It is not asserted that this is a rolled up plea; it is an attempt really to "straightjacket" (to use the word employed by Hutley JA in Sergi) the plaintiff into an imputation which resembles less closely what is stated in the matter claimed of.

While I note the warnings of the defendants for the need for precision in the form of imputations, objections as to form of imputations ought in my view to have less importance under the Defamation Act 2005 (NSW) because imputations are not causes of action but mere particulars of a publication. Requirement of specificity should be treated with caution in relation to particulars. There is no philological, semantic or semiotic basis for asserting that the English language lacks precision and requires specificity in this unnecessary fashion. However, even on the more stringent test proposed by the defendant, this imputation is not objectionable in form. Therefore, imputation 4(a) will go to the jury.

First matter complained of, Imputation 4(b) - "The plaintiff was ejected from the sale grounds because Reg Inglis suspected him of attempting to engage in auction rorts." 39. I repeat my observations and findings in relation to imputation 4(a) and reject the objection to imputation 4(b) on the same basis. The question of whether the plaintiff attempted to engage in a rort but was found out, or was merely suspected of attempting to engage in a rort, will be an issue for the determination of the jury. This is a typical example of an imputation of suspicion of wrongdoing as a fall-back to an imputation of actual wrongdoing. No request was made by the defendants to plead this as a fall-back; this is an issue which can be resolved at the trial in any event.

First matter complained of, Imputation 4(c) - "The plaintiff was frogmarched from the sale grounds by the second defendant's security people because he gatecrashed the sale." 40. Objection was taken to the word "frogmarched" on the basis that it is "unacceptedly imprecise and ambiguous".

41. The word "frogmarch" originated in about 1871, according to Wikipedia. It was a word used when describing the forcible removal of prisoners, because they were carried face-down with one person holding each limb, so they looked like frogs. That literal meaning has, in our more enlightened times, passed into history, but the word is still used in the description of anyone who is being forcibly relocated in a degrading or humiliating manner.

42. This word appears in the publication. Objections to the use of the actual words in the matter complained of need to be viewed with caution in light of the Court of Appeal's increasing acceptance of imputations using the literal language of the publication: see Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213 at [29] per McColl JA; John Fairfax Publications Pty Ltd v Blake; David Syme & Co Ltd v Blake (2001) 53 NSWLR 541 at [52]-[54] per Hodgson JA. The word "frogmarched" has such a precise and strong meaning that to require the plaintiff to restate it would be indulging in what Kirby J in Favell (at [21]) called "excessive refinement" by a pleader "armed with a bank of dictionaries and a thesaurus" (cited in Wafawarova v Australian Broadcasting Corporation [2007] NSWSC 1212 at [7] per Nicholas J).

43. However the difficulty with the concept of "gatecrash" is that to gatecrash a function means to attend a function to which the person had not been invited. This was a public auction and the plaintiff was frogmarched away because he was not welcome at the premises, not because he was a gatecrasher. If this was a private function to which he had not been invited, this imputation would clearly be available. However, this is an auction and Mr Inglis has noted that the auction was open to the public, so this needs to be seen in its proper context.

44. Either on the General Steel test or the "reasonableness" test, the imputation of gatecrashing does not capture the sting of the matter complained of and the imputation is struck out with leave to replead, in the event that the plaintiff wishes to find a better word than "gatecrash". (I note that leave to replead may technically not be necessary under the 2005 Act; this was not a matter upon which I received submissions from the parties.)

First matter complained of, Imputation 4(d) - "The plaintiff behaved so badly at the sale that the second defendant's security people frogmarched him from the sale grounds in the presence of the who's who of the bloodstock world and leading buyers." 45. The reason for removal of the plaintiff at a public auction is not stated, but the ordinary reasonable reader could infer that he had in some way drawn attention to himself at the sale by his conduct and that this was the reason for his being frogmarched out of this public auction. Whether such an imputation is conveyed will be a matter for the jury as reasonable minds may differ (to quote the more stringent test) as to whether or not this imputation is conveyed. I reject the objection to "frogmarched", for the reasons set out above.

First matter complained of, Imputation 4(e) - "The plaintiff trespassed on private property." 46. There is nothing in the matter complained of to say that the plaintiff is a trespasser. To the contrary, this was a public auction open to everyone and a large crowd was present. The reference to the land being private property needs to be seen in context.

47. The imputation of trespassing is one of those rare imputations where it is blindingly obvious that it cannot be conveyed, and this imputation is struck out.

First matter complained of, Imputation 4(f) - "The plaintiff gatecrashed the sale grounds when he knew he was not welcome and had not been invited." 48. Again, this imputation contains a series of misconceptions. This was a public auction which everyone could attend. There is no reference to any invitation list. The publication does, however, hint that there was prior bad blood and by inference the plaintiff might have known that he would be unwelcome at the auction. This imputation is struck out with leave to replead.

First matter complained of, Imputation 4(g) - "The plaintiff was frogmarched from the sale grounds by the Inglis people." 49. This imputation is clearly conveyed. I reject the objection to "frogmarch" for the reasons set out more fully above and this imputation will go to the jury.

Second matter complained of, Imputation 6(a) - "The plaintiff was ejected from the sale grounds because he attempted to engage in auction rorts." 50. I repeat my earlier findings. This imputation will go to the jury.

Second matter complained of, Imputation 6(b) - "The plaintiff was ejected from the sale grounds because Reg Inglis suspected him of attempting to engage in auction rorts." 51. I repeat my earlier findings. This imputation will go to the jury.

Second matter complained of, Imputation 6(c) - "The plaintiff was frogmarched from the sale grounds by the second defendant's security people because he gatecrashed the sale." 52. I repeat my earlier findings and strike out this imputation with leave to replead.

Second matter complained of, Imputation 6(d) - "The plaintiff behaved so badly at the sale that the second defendant's security people frogmarched him from the sale grounds in the presence of the who's who of the bloodstock world and leading buyers." 53. I repeat my earlier findings and strike out this imputation with leave to replead.

Second matter complained of, Imputation 6(e) - "The plaintiff trespassed on private property."

54. I repeat my earlier findings and strike out this imputation, without leave to replead, as it is clearly not conveyed.

Second matter complained of, Imputation 6(f) - "The plaintiff gatecrashed the sale grounds when he knew he was not welcome and had not been invited." 55. I repeat my earlier findings and strike out this imputation with leave to replead.

Third matter complained of, Imputation 8B(a) - "The plaintiff behaved so badly that he deserved to be removed from the sale grounds." 56. I have indicated in my findings concerning the plea of slander by conduct that I have accepted the plaintiff's contention that it is premature to determine the issue because what happened when the plaintiff was led away will be the subject of oral evidence at the trial. Accordingly I have not made any findings as to the imputations.

Third matter complained of, Imputation 8B(b) - "The plaintiff so conducted himself that he deserved to be removed from the sale grounds." 57. While I will not make any findings for the reasons set out above, I can comment on issues of form of the imputation. The defendant objected to the words "so conducted himself". However, the decision of the Court of Appeal in Rigby v John Fairfax Group Pty Ltd and Ors (New South Wales Court of Appeal, 1 February 1996, unreported) at 13 considered the use of this structure to be acceptable where it is clear that the plaintiff has done something, so if I were the trial judge and this imputation were conveyed I would permit the plaintiff to use this structure.

Third matter complained of, Imputation 8B(c) - "The plaintiff is unfit to remain upon the sale grounds." 58. I make no findings, but I warn the plaintiff that "unfit" does not convey an act or condition. It is merely a restatement, in rhetorical form, of one or more of the other imputations and liable to be struck out at the trial.

Third matter complained of, Imputation 8B(d) - "The plaintiff is so undesirable that he should be removed from the sale grounds." 59. I make the same comment about this imputation as 8B(c).

Is the second defendant a publisher or republisher? 60. The publication involving the first defendant is straightforward. The claim pleaded against the second defendant in paragraph 5 is that the second defendant by itself and by its servant and agent Reg Inglis "published" the words in schedule B, which is the second matter complained of, some time in April 2006. The third publication, set out in paragraph 7 of the pleading, asserts that "On or about 24 April 2006 the Second Defendant by itself, and by its servant and agent Reg Inglis caused to be republished in The Australian the said words or the effect or the substance of the said words of and concerning the Plaintiff which are set out in Annexure 'A' hereto". Annexure A is of course the newspaper publication.

61. I shall deal with each of these pleadings in turn.

The pleading in paragraph 5 62. The pleading in paragraph 5 is asserted to be a summary of words spoken by Mr Inglis to Mr Tony Arrold, a journalist with The Australian.

The second defendants submit that it is not open to the plaintiff to merely plead a portion of an article written by The Australian; the whole of the publication must be pleaded, and my attention is drawn to the decision of Nicholas J in Bracks v Denoon (Supreme Court of New South Wales, 14 December 2006, unreported).

The facts in Bracks v Denoon were as follows. The defendant published material which was incorporated by another person in a letter of September 2006 sent by him to fellow members of the AJC. The plaintiff contended that Mr Denoon was liable as a republisher for the publication by the third party, and contended it was sufficient merely to plead that Mr Denoon's contribution was set out in the third party's letter without providing any other particulars. In other words, the plaintiff sought to plead as the relevant publication, "the Denoon segment divorced from the contents of the Smyth-Kirk letter of which it is plainly a part".

Nicholas J noted that publication is a bilateral act in which the publisher makes information available and the third party has it available for his or her comprehension. Nicholas J (at [9]) held that the publication of what he called "the Denoon segment" in the whole of the Smyth-Kirk letter could not be seen as separate and distinct from the act of publication of the whole of that letter because it was communicated to the reader as part of a letter. That was the comprehensible form by which the matter was published.

Each communication of defamatory material is a separate publication and gives rise to a separate cause of action: Toomey v Mirror Newspapers Ltd (1985) 1 NSWLR 173 at 178. A further cause of action will arise however if the matter is repeated or if the original material is further distributed on what may fairly be regarded as a separate occasion: Gatley on Libel and Slander 10th ed, [6.2]. Where a person's defamatory statement is published by another in the course of providing other information, such as where a person writes a letter to the editor, the letter writer may not be responsible for imputations that might legitimately arise from the entire publication: Cutler v McPhail [1962] 2 QB 292, explained in Toomey at 182E-183G.

Problems of this sort often arise where information is given to a journalist by a third party. In Hanrahan v Ainsworth and Anor (1985) 1 NSWLR 370, an anonymous letter was shown by the defendant to a journalist and portions of the letter were then published in the Sydney Morning Herald with an accompanying article. The publication was similarly shown to an ABC employee, and portions of the anonymous letter was shown on the ABC program Nationwide. The plaintiff sued the defendant (who showed the anonymous letter to the two journalists) for the publication to these journalists and then for republication in the corresponding media outlets.

Hunt J (at [372F-373A]) held that the unusual circumstances meant that this was a good example of the type of case where separate trial of the issue could not and should not be conducted. This was because the jury would have to first determine in relation to each of the journalist the degree to which the first defendant should be held responsible for his actions (and perhaps words) when he passed it on. Accordingly, it was premature to consider the imputations conveyed and also to consider issues of publication.

Hunt J noted that liable for republication would involve the jury determining effectively what the matter complained of was, that is the degree to which the first defendant should be held responsible for the substantial republication and therefore what imputations were conveyed. However, that is not the issue here. The issue here is that the plaintiff has sued the second defendant for making the statements set out in the schedule to a journalist who subsequently published them. It is a claim for publication, as the terms of paragraph 5 make clear. The concerns expressed by Hunt J in Hanrahan v Ainsworth and Anor need to be dealt with with some caution. The defamatory capacity of the two initial publications depended very much on the circumstances in which the person giving the letter adopted, repudiated or discounted the contents of the anonymous letter when he published it. The nature of the defamatory imputations published in handing over the letter would of course varied according to such circumstances as Hunt J noted at 372F-373A. Handing over an anonymous letter is very different from speaking actual words.

In the present case, the second defendant has not put in issue the question what words were spoken. This is a different situation to the situation in Hanrahan v Ainsworth and Anor. However, if the second defendant is relying upon Bracks v Denoon as authority for the fact that a person is not entitled to bring proceedings other than upon the whole publication as it reaches the recipient, that is very much mistaking the matter. Bracks v Denoon was a claim for republication, not publication and furthermore the segment of the letter sued upon clearly formed a part of the whole of the publication, from which I infer there is other material in the matter complained of which could bear upon the imputations.

The alleged publication by the second defendant to the journalist is similar to the publication of a letter to a newspaper and the principles explained by Hunt J in Toomey v Mirror Newspapers Ltd at 182E-183G would therefore apply.

Consequently, I reject the plaintiff's submissions that the matter is not capable of a separate trial and, as will be apparent, I have not made findings in relation to the imputations. However, I also reject the defendant's assertion that the plaintiff must plead that the publication by the second defendant to the journalist must include the journalist's ultimate work product, including the balance of the article, in circumstances where none of that material conveys imputations of and concerning the plaintiff. The second defendant cannot be held liable for material which has been added by the journalist.

The pleading in paragraph 7 73. As to the publication in paragraph 7 of the pleading, which is pleaded as a republication, this does create some real difficulties. Gatley note at [6.36] that there are certain situations in which it will be readily held that the defendant is responsible for the consequences of further publication. In some cases the original publisher authorises or intends the publication be passed on. Thus if a person tells a reporter a story defamatory of the plaintiff, he will be liable for the publication in the newspaper: see the cases collected at footnote 75 to [6.36] in Gatley.

Strictly speaking, the publication by the second defendant to the journalist is the original publication, and the question then arises whether the second defendant is liable for damage caused by further publication in the first defendant's newspaper. As Gatley points out at [6.35], in such a case the claimant has a choice. He may sue the defendant for both the original publication and for the republication as two separate causes of action or sue the defendant in respect of the original publication only, but seek to recover as a consequence of that original publication the damage which he has suffered by reason of its repetition, so long as the damage is not too remote. Gatley notes that the cases do not always distinguish clearly between two situations and in many cases it will make no practical difference.

It is not clear to me the basis upon which the plaintiff submits it is not possible for there to be a separate trial of capacity of the imputations from this publication. Clearly I am in the same position as the trial judge, and the plaintiff has not taken me to any issues that would be before the trial judge which are not before me.

The second defendant submits that I should follow Bracks v Denoon where Nicholas J decided (at [4]) that it was not open to a plaintiff to plead a segment of the later publication of the matter complained of divorced from the balance of the later publication because the factual issue for trial was whether the later publication taken as a whole was a republication of the original publication.

Taken literally, this would mean that no plaintiff could bring proceedings over a reference in a book or in a newspaper without suing over the entire edition as the plaintiff points out in written submissions.

I was not provided with a copy of the matter complained of in Bracks v Denoon but it would appear to me that the matter complained of clearly had other references to the plaintiff, from which the portion is called "the Denoon matter" cannot be "divorced" (paragraph 3). That is not the case here. The publication concerns matters unrelated to the plaintiff, namely the very successful bloodstock sale.

It will be a question for the jury at the trial whether the republication that was authorised by the second defendant were the words spoken about the plaintiff or the whole of the contents of the publication. The question of whether or not his providing of information about the plaintiff to the journalist, bearing in mind that the journalist was writing about the auction sales, will no doubt be subject of evidence that is not before me. However, for the reasons already set out above, that is not a reason for my not ruling upon the imputations arising from this publication on issues of form and capacity, bearing in mind that my rulings will be identical to the rulings for the first defendant in relation to the first matter complained of.

The pleading of the slander by conduct 80. An action for defamation may be based upon conduct rather than words. In Cook v Cox [1812] 105 ER 552 Lord Ellenborough CJ gave the illustration of a person holding up an empty purse. This has come to be called a "dramatic pantomime", and cases where such an action is pleaded include shoplifting cases (Tumbarella v Kroger Co 85 Mich App 482, 271 NW 2d 284 (1978)) or, in the case of Bishop v New South Wales (Supreme Court of New South Wales, Levine J, 12 March 1998, unreported), Bishop v New South Wales [2000] NSWSC 842, Bishop v New South Wales [2000] NSWSC 1042, an actual pantomime.

The precise actions observed by the persons who saw the plaintiff being led away by the security officers will be a matter for the trial. At present I do not have their statements. Consequently I am not in the same position as the trial judge.

In written submissions the plaintiff's counsel draws my attention to a number of warnings about separate trial issues and submits (at paragraph 22 of the written submissions) that the separate trial procedure is inappropriate given that the alleged conduct is very much in dispute as between the plaintiff and defendant.

In Hanrahan v Ainsworth and Anor (1985) 1 NSWLR 370 at 372F - 373A Hunt J warned that where there were substantial disputes about the nature and extent of the publication, a separate trial should not be conducted. The justification for a separate trial is to save time and expense, but it is only possible where the judge hearing the application is in the same position as the trial judge.

In the course of argument I inquired whether the security guards were recognisable because they wore uniforms or otherwise looked the part, and what it was about their conduct that was relied upon. Neither counsel for the plaintiff nor counsel for the second defendant could paint a picture for me of just what happened. It may be that the only persons who can do this are the witnesses who will give evidence at the trial.

As presently pleaded, the second defendant knows the case to meet. I decline to make any further orders in relation to the form of the slander by conduct pleading, as this should be a matter for the trial judge.

Application for costs 86. Each of the first and second defendants made submissions for special costs orders.

The first defendant submits that there are two particular considerations which should be reflected in the costs order I make. On 13 June 2007, for the purposes of hearing on 19 October, I ordered the first defendant to file and serve any submission in relation to the manner in which imputations should be considered under the Defamation Act 2005 (NSW) and whether this differed from the procedure under the Defamation Act 1974. Those submissions were prepared and provided to the court on 27 September 2007. It is submitted that the plaintiff did not dispute any of those submissions, although the plaintiff now submitted that these questions should not be determined separately. It is submitted that the first defendant had been put to considerable expense to establish a series of legal propositions which are not in dispute, namely the basis upon which separate questions are involved. It is submitted that the first defendant should have its costs of the preparation of those submissions.

However, I asked the first defendant's counsel to provide these submissions after he submitted to me that the enactment of the Defamation Act 2005 made no difference to the manner in which imputations arguments should be conducted, notwithstanding the fact that imputations are no longer the cause of action and are now particulars of the cause of action (which is the publication). The plaintiff's position at all relevant times was to refer to decisions of Nicholas J which refers to the test as being the General Steel test, a point which is made to the Uniform Civil Procedure Rules 2005 (NSW).

A question of the correct approach to issues of form and capacity of imputations under the Defamation Act 2005 is a significant issue in this court, the Supreme Court and the Court of Appeal. I have referred elsewhere to a number of decisions on this issue. As it happened, the Court of Appeal confidentially handed down Malcolm v Nationwide News Pty Ltd on 18 September 2007. This case is now generally referred to by Nicholas J in the Supreme Court as providing the appropriate guideline as to the approach to take: see Wafawarova v Australian Broadcasting Corporation[2007] NSWSC 1212; David v Abdishou [2007] NSWSC 1195 and Robinson v Brighton [2007] NSWSC 1125.

It was appropriate that both parties make clear their view about how the Defamation Act 2005 is to be interpreted in the absence of appellate guidance on this subject. There is no reason for a special costs order in such circumstances. The view taken by the plaintiff and the defendants on this issue were contrary to the written submissions of the counsel for the first defendant, very different, and it was appropriate that I should invite the parties to set this out in some details, particularly in circumstances where Mr Hmelnitsky submitted that the General Steel test was not the correct test, contrary to what appears in the notes to the Uniform Civil Procedure Rules 2005 and contrary to the practice of Nicholas J in decisions prior to Malcolm of referring to the General Steel test as the appropriate authority.

The second reason is the delay of the plaintiff in determination of the matter. There certainly has been delay and I have taken this into account in my costs orders.

The first defendant's objections related solely to form and capacity. The second defendant's objections related to other issues, including the quite substantial amendments by the plaintiff to the causes of action.

This application has been before the court on the following relevant dates, with the following results: (a) The matter was listed for directions on 2 February 2007. (b) The matter was listed on 9 March 2007 but argument did not proceed because there was an application for an amendment. (c) On 29 March 2007 there was a further application for an amendment. (d) The matter was listed on 13 June 2007 for directions. (e) The matter was listed again on 27 June 2007 for directions. (f) The matter was listed on 19 October 2007 at 2:00pm. Counsel for the first defendant made his submissions. Counsel for the second defendant commenced his submissions. The matter could not be completed by 4:00pm and was stood over part heard to 22 November 2007. (g) The matter was re-listed for 22 November 2007. Counsel for the plaintiff was not ready to proceed and the matter had to be adjourned. (h) The matter was listed for argument on 8 February 2008 and the hearing of the application was concluded.

The second defendant complained there had been no less than four versions of the plaintiff's pleading including the current pleading, which is entitled "Corrected Further Amended Statement of Claim".

The first defendant seeks orders as follows: (a) The plaintiff pay the first defendant's costs of the preparation of its submissions dated 27 September 2007; and (b) The plaintiff pay the first defendant's costs of 19 October 2007, 22 November 2007 and 8 February 2008.

The second defendant seeks the costs of and incidental to the hearing up to and including 13 June 2007 on the basis that these are costs thrown away by the amendments made to the plaintiff's pleading. The costs of the hearing on 19 October, 22 November (where the plaintiff was not ready) and 8 February 2008 should be paid forthwith given the delay and extensive amendments made in the varies pleadings. He seeks orders as follows: (a) The plaintiff is to pay the defendants' costs thrown away by all amendments to the Statement of Claim, such costs to include the costs of and incidental to the hearings on 2 February 2007, 9 March 2007, 29 March 2007, 7 June 2007 and 13 June 2007; (b) The plaintiff is to pay the defendants' costs of and incidental to 22 November 2007; (c) The costs referred to in orders (a) and (b) above are payable forthwith; (d) Appropriate costs orders reflecting his success in the hearing of the application.

The plaintiff resists these applications, although counsel for the plaintiff conceded that he was unready for the 22 November argument, and also that costs thrown away by reason of amendments should be paid.

Although the parties referred to general principles only and did not refer to the provisions of the Civil Procedure Act 2005 or the Defamation Act 2005, both these Acts contain provisions about the proportionality of costs (Civil Procedure Act 2005 s.60, Defamation Act 2005 s.40). Section 57 refers to the "Objects of case management" as including "the timely disposal of the proceedings… at a cost affordable by the respective parties" and s.56 refers to the need "to facilitate the just, quick and cheap resolution of the real issues in the proceedings".

Defamation proceedings invariably involve interlocutory applications about the form of the Statement of Claim. These can be long drawn out that may perhaps when compared to other litigation, seem to require an unnecessary degree of precision about matters which ought to be comparatively simple.

There has been substantial delay in the hearing of this application by reason of the amendments of the plaintiff's pleadings, and by reason of the unreadiness of the plaintiff on 22 November 2007. These are however matters which are appropriate for the usual costs orders.

The point in s.57 Civil Procedure Act having proceedings dealt with "at a cost affordable by the respective parties" is that I should have regard to all of the parties in the case. The making of a significant number of orders for costs assessable forthwith is a procedure reserved for cases where there has been a significant or flagrant disregard for timetables, or the bringing of a hopeless application or other conduct warranting a departure from the usual rule.

In the present case, the plaintiff has had a difficult cause of action to plead, under relatively new legislation, where the correct approach to a number of the issues was as yet unclear. Apart from the plaintiff's unreadiness for the 22 November hearing, there was no conduct by the plaintiff warranting any special orders.

It is regrettable that the plaintiff was not ready on 22 November. However, for busy legal practitioners in their final weeks of term, unreadiness for a part heard hearing is, in my view, not a matter warranting a costs order such as assessing the costs forthwith. It is not good case management to visit parties with costs orders of this kind for relatively small infractions, particularly in an application where the plaintiff has enjoyed success in relation to a number of the issues in contention.

Both defendants have had significant success in their application to strike out imputations. They should be entitled to their costs of this application and to the costs thrown away by reason of the plaintiff's amendments to the Statement of Claim, which has delayed the proceedings for both defendants. The defendants should also have their costs of the hearing of 22 November 2007.

However, the plaintiff should be entitled to a costs order for the argument concerning issues of publication and slander by conduct.

It will be the task of the costs assessor to separate the costs of these applications and apportion them to the relevant party at the conclusion of these proceedings.

Orders

1. Imputations 4(a), 4(b), 4(d), 4(g), 6(a) and 6(b) will go to the jury.
2. Imputations 4(c), 4(f), 6(c), 6(d) and 6(f) struck out with leave to replead.
3. Imputations 4(e) and 6(e), struck out.
4. Dismiss the second defendant's application concerning the pleadings of paragraphs 5, 7 and 8A-8C.
5. The plaintiff pay the defendants' costs of the following: (a) The argument concerning capacity; (b) The costs thrown away by reason of amendments to the Statement of Claim; and, (c) The costs of the hearing on 22 November 2007.
6. The second defendant pay the plaintiff's costs for the application to strike out paragraphs 5, 7 and 8A-8C of the Statement of Claim.
7. Dismiss the second defendant's claim for costs to be assessable forthwith.

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First matter complained of [Picture with caption "Australian Yearling sale trade up 30pc, average up 40pc, median up 20pc" and "Prize pair: Yarraman Park's top selling Redoute's Choice offspring, the $2.3 million Exact colt, left, and the record $3 million Deja Slew colt - Picture: Chris Hyde"]

AN extraordinary sale for vendors and auctioneer, an extremely tough sale for buyers, but a refreshingly honest sale for the thoroughbred industry.

That was the 2006 Australian Yearling sale staged by William Inglis and Son at its Newmarket sales complex in Sydney over three selling sessions last week.

Four hundred and six yearlings, representing an astonishing 90 per cent clearance, fetched $117.13 million for a 29.3 per cent hike in trade, while the average rocketed 40 per cent upwards, from $207,295 to $288,497.

The median price, the fairest of all sale measures, rose 20 per cent to $180,000 while the $1 million barrier was passed 14 times, including a record colt and filly among three that topped $2 million.

No southern hemisphere yearling venue has seen the likes of this sale before, but now that it has happened rest assured it can happen again.

All the indicators were there that the sale could at least match the boom event of 2005 - for growth of something like 5-8 per cent in the average.

However, anyone predicting a 40 per cent rise would have run the risk of being certified, or put away for causing a public disturbance.

As in every year, and as for most major sales, the vendor and the auctioneer work hard to make the sale a success.

A good year for them is not such a bright time for the buyer if they are required to pay 12 or 15 per cent more, on average, for a yearling than they would have 12 months ago.

However, the market can scarcely complain about that. The nation is chugging along merrily.

Interest rates are down, unemployment figures are near zero and the stockmarket is surging ahead at a high cruising speed. What has been hard to put a lid on in the bloodstock market for many years at this, and almost every other significant sale, is the rorts that have gone on that leave a public perception that something was not as it had been presented.

A classic example was a yearling sold privately prior to the sale, with an arrangement for that yearling to go into the ring and bring the top, or near top, price in an exercise of ego or a future investment with other parties.

The 2006 Australian Yearling sale was almost totally clean of such nonsense, although there are strong suspicions over one yearling at the top end of the market - and there seems to be no secret among industry players as to what that was all about.

So this was not only the mother of all sales, it was an honest sale - for a very clear reason.

One vendor spelt it out simply: "No sense in mucking about, everyone is getting above their reserve prices."

The Inglis company, like all other auctioneers, has to turn a blind eye to rorts and "arrangements" since it is its job merely to set up and and sell the horses for the vendor to the highest bidder, and expect the appropriate fee from the vendor for doing so - rort or no rort.

The integrity of world bloodstock sales has come under close scrutiny in the past two years.

In Tuesday's opening session last week saw - to the bewilderment of those not fully understanding the implications - the Inglis security people frog-marched a person from the sale grounds.

This action involved the same two parties that recently concluded a defamation case on the steps of a Sydney court house.

Reg Inglis, managing director of the Inglis company, said the auction was public, but it was held on private private and the company had the right to bar entry to any individual.

Day one, by sheer coincidence, was attended by Jess Jackson, from the US, among the platoon of international visitors.

Jackson, who made his millions in the wine industry, has emerged as one of the major new bloodstock buyers in the US over the past five years.

He is also in the forefront in bringing more transparency to the bloodstock industry there, after having experienced rorts first-hand, he claims.

The wine magnate had laid fraud charges against six industry participants, including bloodstock agents and a prominent trainer, over undisclosed commissions and kickbacks that occurred during the investment of tens of millions of dollars on Jackson's behalf in private and public horse and stud property dealings.

Jackson did not buy here, but he must surely have been impressed with what he saw.

Second matter complained of

1. The Inglis Company, like all other auctioneers, has to turn a blind eye to rorts and "arrangements" since it is its job to set up and sell the horses for the vendor to the highest bidder, and expect the appropriate fee from the vendor for doing so - rort or no rort.

The integrity of world bloodstock sales has come under close scrutiny in the past two years.

In Tuesday's opening session last week out security people frogmarched John Brown from the sale grounds on my orders.

John Brown brought a defamation case against me which came on for hearing in the District Court on 12 April 2006 and was settled on the steps of the Court.

The auction is public but it is held on private property and the company (the second Defendant) has the right to bar entry to any individual.

The Australian sale drew a Who's who of the bloodstock world including managers for the Sheiks of Dubai, Koolmore, men from Ireland and agents from South Africa, Japan, Hong Kong, New Zealand and England.

Leading buyers spent substantial sums in purchasing yearlings.

Conduct Two of the second Defendant's security officers approached the Plaintiff who was in the sale grounds. After speaking the words referred to below they escorted the Plaintiff from the sale grounds at a brisk pace. The two security officers crowded and leaned against the Plaintiff while he was being taken from the grounds so as to infringe on his space and cause him apprehension.

Words Security Office: You've got to remove yourself from the grounds. Plaintiff: What for. Security Officer: You know what for. Plaintiff: I don't know what for. Who told you to remove me? Security Officer: Take it up with management.

17/03/2008 - Typographical Errors - Paragraph(s) Catchwords and paragraph 12

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