Cowper v Fairfax Media Publications Pty Ltd; Cowper v Australian Broadcasting Corporation

Background

1. Each of Fairfax and the ABC has published material concerning the plaintiff. It is unnecessary to detail the material. It is sufficient, for the purposes of these reasons, to indicate that each of the corporate defendants published material which, on its face, would be defamatory (leaving aside any defences) and alleged that the plaintiff, who is a financial advisor, advised clients in a manner that was inappropriate, as a consequence of which the plaintiff was terminated by his then employer (NAB) and published those materials publicly and, in particular in relation to a journalist named as the third defendant in the Fairfax proceedings, published the defamatory material to his then employer (IPAC), thereby causing his termination of employment.
2. The plaintiff claims damages for defamation and claims special damages, being loss of income associated with the effect of the defamatory material. The special damages claim relates only to the Fairfax proceedings.

Principles in pleadings

1. While it is sometimes lost on the parties to proceedings, particularly in these defamation proceedings, there are rules to pleadings. Those rules are of long standing. The first and fundamental premise, upon which the rules of pleadings depend, is that pleadings are, in summary form, a statement of the material facts that are relied upon for the cause of action in question and not the evidence by which they are to be proved: Philipps v Philippsand Ors (1878) 4 QBD 127 at 133; and see also Farwell LJ in North-Western Salt Co Ltd v Electrolytic Alkali Co Ltd [1913] 3 KB 422. Even though evidence may be relevant and will be allowed at trial, that evidence is not "a material fact" for the purpose of pleadings.
2. The second aspect, relevant particularly to these defamation proceedings, is that all defamatory material may not give rise to a defamatory imputation and some defamatory material will give rise to more than one defamatory imputation. The rule used to be that the terms of the defamatory material could not be pleaded as the imputation, but that rule was abolished.
3. Thus, at the present time, a plaintiff (or defendant in terms of contextual truth) may plead an imputation that is in the same words as the defamatory material that had been published. It is unnecessary, at this juncture, to deal with true innuendo or to expand on the foregoing, but ordinarily a defamatory meaning will be derived from the ordinary meaning of the publication.
4. Nevertheless, that which is pleaded must be the defamatory imputation, either general or specific. If a publication asserts that "X murdered Y" that assertion is an assertion of fact and, leaving aside justification, would be defamatory or give rise to defamatory imputations. As stated in a number of authorities (see, for example, Cornwell v Channel Seven Sydney Pty Ltd [2016] NSWCA 255; Abu-Lokmeh v Harbour Radio Pty Ltd [2016] NSWCA 228), an allegation that is serious enough would give rise to both specific and general imputations and in the foregoing might well give rise to imputations that "X so conducted himself as to murder Y" and also that "X is a murderer".
5. As earlier stated, notwithstanding the capacity to allege specific defamatory imputations, that which is pleaded must be an "imputation". In other words, to allege the general imputation that "X is a murderer", the particulars may well be that "X murdered Y" and further particulars may well include the date of the murder and the place of the murder.
6. The practice that has developed by pleading the defamatory material as the imputation, has led to the imputation being expressed as an allegation of fact from which the court is invited to infer harm to reputation, which is at the core of the concern in defamation law.
7. The foregoing is not intended as a criticism of any approach, but is intended to raise an issue that arises in some of these proceedings and has arisen in other proceedings. Recently, the Court dealt with the truth of an imputation expressed as a person, being a bus driver, driving "carelessly on a notorious stretch of outback road". The defendant proved that the bus driver drove carelessly, but did not prove that the careless driving occurred on "a notorious stretch of outback road". The imputation, being so expressed, was held not to have been proved to be true by the defendant.
8. In the current proceedings, the level of specificity associated with the imputations in the Statement of Claim and the contextual imputations in the defences are such that the parties, in the process of obtaining further and better particulars, have elided the distinction between pleadings, particulars and evidence. In the murder example, an indictment pleads that on A date at B location X murdered Y. Yet, on the evidence of these proceedings and others, in defamation proceedings, such a pleading would never suffice.
9. Leaving aside special damages or other categories of damage over and above the ordinary, the damages in defamation proceedings are capped at a prescribed level. The Practice Note (Practice Note SC CL 4), in dealing with the pleadings (clauses 9, 10 and 11), reiterates the general requirements for pleadings and particulars as outlined in the Uniform Civil Procedure Rules 2005 (NSW). Clauses 12, 13, 14 and 15 emphasise the need for early identification of difficulties with the pleadings and the requirement on the parties to argue them immediately.
10. The Practice Note, in Clauses 16, 17, 18 and 19, emphasises the purposes imposed by the legislature in s 56 of the Civil Procedure Act 2005 (NSW) in facilitating the just, quick and cheap resolution "of the real issues in dispute" between the parties. There must be some acknowledgment of the necessity for proportionality.
11. Further, the scheme of the Practice Note requires the parties to minimise the number of interlocutory steps that are raised before the court. In these proceedings the parties seem to have had little or no regard to that purpose.

Motion to Strike Out Paragraphs of Defence and Particulars

1. Some time ago, the Court issued orders in relation to two aspects, reasons for which were reserved and were, to some extent, overtaken by a number of other applications by one or other of the parties. It is necessary to issue the reasons for judgment for the earlier orders.
2. The orders related to a strike out motion by the plaintiffs to the defence and particulars of the defence and, in particular, paragraphs 133, 134 and 135 of the defence in the Fairfax proceedings, being the justification defences to imputations 17(b), 17(c), 19(b) and 19(c) in the Fairfax and ABC proceedings respectively. In the ABC proceedings, the equivalent strike out goes to paragraphs 173, 174 and 175.
3. In each case, the defendants plead that the imputations, said to arise from the defamatory material (namely that the plaintiff had so misconducted himself as a financial planner working for the NAB that it was obliged to compensate 53 of his clients and, further, that the plaintiff, as a financial planner working for the NAB, had given such poor financial advice to nine of his clients that it resulted in them each suffering severe financial loss) are true. Each of those imputations are sought to be justified by each of the defendants.
4. The particulars of the truth of those imputations are the particulars that are sought to be struck out and allege that NAB paid monetary compensation to 53 former clients of the plaintiff for losses suffered as a consequence of inappropriate advice provided by him; the total compensation paid in respect of the 53 former clients was approximately $2,500,000; and in paragraph 135, NAB has, since 6 March 2015, "paid compensation to an unknown additional number of the plaintiff's former clients" and "paid additional compensation to an unknown number of the plaintiff's former clients".
5. As already stated, the same particulars are provided at paragraphs 173, 174 and 175 of the ABC Amended Defence.
6. Particulars were sought of each of the payments to which the defendants refer, being the date of each payment, the name of the client, the amount of the payment and the reason for the payment.
7. The defendants, and each of them, have stated that they had given the best particulars available. The plaintiff moves to strike out the particulars on the basis that a defendant, raising a justification defence, is obliged to give appropriately detailed and specified particulars of the facts, matters and circumstances said to give rise to the defence. The plaintiff relies upon the proposition that the defendant must know the truth of the imputation and the basis for the truth at the time of the publication and that the defendant must specify the particulars relied on with the same particularity as in an indictment: Hickinbotham v Leach (1842) 10 M. & W. 361; 152 ER 510, per Alderson B at 510.9 (in argument); Zierenberg v Labouchere [1893] 2 QB 183, per Lord Esher MR at 186.1; Wooton v Sievier [1913] 3 KB 499; Sims v Wran [1984] 1 NSWLR 317, per Hunt J at 328E; and Crosby v Kelly [2013] FCA 1343, per Rares J at [33].
8. The strike out application for the particulars relies upon the statement in Zieremberg (at 187.9) to the effect that, if the defendant is unable to give sufficiently precise particulars, the defence of justification must fail and the defendant will not be allowed to pursue it. Further, the plaintiff submits that the defendants cannot refuse to provide proper particulars for justification until after discovery, interrogatories or subpoenae, because of the proposition that the defendants must be taken to know the information upon which the publication is based at the time that the publication occurs.
9. As Ashhurst J said in J'Anson v Stuart (1787) 1 T. R. 748; (1787) 99 ER 1357, a defamation defendant who has published material that is defamatory should be armed with the information to establish the truth of those allegations (see also Ashcroft v Foley [2012] EWCA Civ 423).
10. There is an issue in the proceedings as to whether the NAB dismissed the plaintiff or whether he resigned. I do not in these reasons for judgment enter into that controversy.
11. Nevertheless, I have some serious doubt as to whether the fact, if it were the fact, that an employer dismissed the plaintiff on account of alleged misconduct amounts to a defamatory imputation. It is defamatory material, but it may not be an imputation as to the reputation of the plaintiff. Rather, it seems to be material from which such an imputation arises.
12. The conduct for which it is said the employee was dismissed, if alleged, would be defamatory. However, the particulars provided and the further particulars sought do not ask for particulars of the conduct, namely the time and date or content of the advice, but the particulars of the compensation paid by NAB.
13. On one view, at least, the fact that NAB paid compensation to former clients of the plaintiff is evidence of a conclusion reached by NAB, which may or may not prove misconduct by the plaintiff.
14. It is, on that analysis, hearsay or an opinion. It is also a conclusion which the Court, in this case the jury, must reach without the assistance of the employer's opinion. The concern that the Court, as presently constituted, has in relation to the foregoing imputations matters little. The pleadings and particulars are not sought to be dismissed on any of the foregoing bases.
15. Rather, the pleadings and particulars are sought to be struck out, because they do not provide sufficient particulars to justify the proof of the truth of the imputation pleaded by the plaintiff. Further, it is said that the defendants do not have the ability to obtain that proof, because they ought to have been in a position to know the truth of the imputation before publishing it, in order to raise a defence of justification.
16. Essentially, the submission on behalf of the plaintiff, in my view, takes the principle too far. The defendant must know the particulars that give rise to the justification that is pleaded by the defendants, but the defendants do not need the evidence to prove those particulars or that pleading. That is the reason that the Court, in these reasons, started with the general proposition that pleadings are not to contain evidence.
17. Assuming (as the Court must for the purpose of these reasons) that the allegation that the plaintiff conducted himself in a manner that caused NAB to dismiss him is a defamatory imputation (the truth of which is alleged by the defendants) and assuming (for the same reasons) that the allegation that the plaintiff advised clients in such a way that it caused NAB to pay compensation to 53 clients is of itself and in those terms a defamatory imputation, then the particulars state the number and the facts from which the plaintiff would know the case it must meet. This is sufficient particularity.
18. The proof of the number is a matter that is capable of being obtained from subpoenae, discovery or other methods of production.
19. Nevertheless, the allegation that there were an unknown number of persons, who are also unknown, to whom compensation was paid in an unknown amount, is not a matter upon which the defendants can rely or on which they can seek to adduce evidence, because the plaintiff does not know the case he must meet.
20. For the foregoing reasons, the Court made the orders in relation to the strike out motion on 7 October 2016 and those orders were relevant to various issues raised in relation to the production of documents.

Section 30 of the Defamation Act 2005 (NSW)

1. The defendants rely upon qualified privilege for the publication of material that is said to be defamatory of the plaintiff. In so doing the defendants rely upon the provisions of s 30(1)(c) of the Defamation Act 2005 that the conduct of the defendants in publishing the material "is reasonable in the circumstances".
2. The provisions of s 30(3) of the Defamation Act provides criteria for "reasonableness", one of the considerations being "the sources of the information in the matter published and the integrity of those sources".
3. Pursuant to the provisions of s 126K of the Evidence Act 1995 (NSW), the plaintiff seeks an order under s 126K(2) that the defendants supply the names of sources who are otherwise unwilling to provide their identity.
4. Before the Court, the defendant has indicated that some of the sources upon which reliance was based for the publication of the material are willing to have their names disclosed. Some are not. The provisions of s 126K of the Evidence Act are in the following terms: 126K Journalist privilege relating to identity of informant (1) If a journalist has promised an informant not to disclose the informant's identity, neither the journalist nor his or her employer is compellable to give evidence that would disclose the identity of the informant or enable that identity to be ascertained. (2) The court may, on the application of a party, order that subsection (1) is not to apply if it is satisfied that, having regard to the issues to be determined in the proceeding, the public interest in the disclosure of the identity of the informant outweighs: (a) any likely adverse effect of the disclosure on the informant or any other person, and (b) the public interest in the communication of facts and opinion to the public by the news media and, accordingly also, in the ability of the news media to access sources of facts. (3) An order under subsection (2) may be made subject to such terms and conditions (if any) as the court thinks fit
5. A condition precedent exists for the operation of s 126K(1) of the Evidence Act, namely, that the journalist "has promised an informant not to disclose the informant's identity". It is submitted that for the provisions of s 126K to operate, the promise by the journalist must have occurred before the information was provided.
6. I take the view that if information were provided without any understanding that the information was not to be "sourced", then the source of the information must be available. But the understanding as to the non-disclosure of the identity of the person providing the information may be as much custom or practice or derived from the terms of the conversation than an express prior promise to an informant.
7. Indeed, one can easily imagine a situation where information is provided "as background" and the journalist therefore contacts the source to ask whether any of that information may be disclosed and a promise is given, at that later time, not to disclose the informant's identity. Such a promise would suffice, in my view, to give rise to the provisions of s 126K of the Evidence Act. I am satisfied that s 126K operates in relation to the undisclosed sources.
8. The provisions of s 126K of the Evidence Act operate of their own force, in the circumstances where a promise of the kind just described has been made. The Court, in dealing with an application for an order under s 126K(2), starts from the proposition that the legislature has provided a prima facie position that is overturned on the discretion of the Court.
9. In exercising the discretion conferred on the Court by s 126K(2) of the Evidence Act, the Court must be satisfied that the public interest in the disclosure of the identity of the informant outweighs any likely adverse effect of the disclosure on the informant (or any other person) and the public interest in the communication of facts to the news media by the public and the news media's ability to gain access to sources of facts.
10. I take the view that the promises or understandings of the kind earlier referred to are in place and the provisions of s 126K(1) of the Evidence Act operates. The identity of the source is for the purpose of obtaining evidence or material that goes to one criterion of reasonableness pursuant to the terms of s 30(3) of the Defamation Act. Such information would not be conclusive.
11. Ultimately, the jury will take the view that the publication of the material was reasonable or not reasonable and it will base that conclusion on a number of factors, including the information that was in the hands of the publishers at the time of the publication.
12. The protection of whistle blowers and sources of information to the media is an important aspect of our democratic society. It seems to me that nothing has been provided that satisfies the Court that the public interest in the disclosure of the identity of the informants outweighs the criteria that must be balanced against it. As a consequence no order will be made under the provisions of s 126K(2) of the Evidence Act on the application of the plaintiff.
13. Given the attitude of the Court to the plaintiff's application under s 126K of the Evidence Act, and the matters discussed therein, the Court is not of the view that the defence, insofar as it relies upon sources for the information, should be struck out. The absence of the sources is a matter that may be raised, subject to any ruling of the trial judge, with the jury, but is not a matter that ought give rise to the striking out of the claim for reasonableness or for qualified privilege under s 30 of the Defamation Act.

Motion to amend each defence in each proceeding

1. As illustrated in these reasons, these matters are to be heard together and are listed for hearing for four weeks commencing 21 November 2016. If the matter does not proceed at the time it is currently listed, it cannot be heard until 2018, at the earliest.
2. The defendants now seek to pursue, in their defence, for the first time, an allegation that the plaintiff "forged" documents. This is said to be raised in a Further Amended Defence to the Further Amended Statement of Claim.
3. In the Fairfax proceedings, the further amended defence adds, relevantly, particulars 123(e) and paragraphs 123A-123F. Equivalent amendments are sought in the ABC proceedings.
4. In short, there are two substantive amendments proposed, being a justification by the defendants alleging forgery by the plaintiff and particulars in support; and particulars of the review by IPAC, which goes both to the question of justification and, relevantly in the Fairfax proceedings only, the amelioration of special damages.
5. The five imputations (four imputations in the Fairfax pleadings and one in the ABC pleadings) that are sought to be added assert: that the plaintiff "had forged documents"; had misconducted himself …. "by forging his clients' signatures and manipulating documents"; "had forged clients' signatures"; "had reconstructed file records"; and, in the ABC pleadings, that the plaintiff was dismissed by NAB "for falsifying documents and forging signatures".
6. The defendants say that these matters arise from material produced on subpoena. It is necessary to harken back to the issues with which the Court is now dealing.
7. First, the plaintiff alleges the publication of defamatory material. As a consequence of that allegation, the defendant justifies the publication on the basis of truth. The allegation of forgery is a whole new proceeding which does not, directly, relate to any imputation upon which the plaintiff relies nor any justification upon which any of the defendants have, hitherto, relied.
8. The new case that is now sought to be added will significantly prejudice the plaintiff and force the vacation of the dates already set. Moreover, the allegation of forgery is only indirectly associated with the substantive issue between the parties as to whether damages are to be awarded for what is said to be defamatory material published by them.
9. The material upon which the defendants rely for the allegations in question do not, on their face, amount to proof that the plaintiff forged documents. The material, if accepted, does amount to the reconstruction of files.
10. The material produced on subpoena and which has been adduced on the motion revolves around whether clients were provided with a review by the plaintiff or on his behalf. The plaintiff seems to suggest that the clients were provided a review of their investments and insurance status, from time to time, which review was given orally. The clients, at least on some of the evidence that has been adduced for the purpose of the motion, deny having been given any such review.
11. When the issues came before NAB in its internal review, it seems that the evidence (including admissions) was that the plaintiff instructed his assistant to reconstruct (or construct) file notes of the conversation said to have occurred by telephone.
12. There is no admission, or proof, other than the testimony, which has yet to be adduced of the clients, that the reviews did not occur. More importantly, there is, on my understanding of the material, no evidence that the plaintiff "forged" a document. He certainly reconstructed notes, if the material is accepted, but did not affix to any such notes a signature of a client as alleged in the defence.
13. To the extent that the Amended Defence depends upon that which has been produced on subpoena, the documents do not go so far as to prove, or even allege, forgery by the plaintiff of clients' signatures. More importantly, the issue is, at best, peripheral, given that it does not relate directly to any of the allegedly defamatory material.
14. Most importantly, the effect of adding the defence, at this late stage, would be that the plaintiff would need time to investigate any such allegation and adduce its own material in relation thereto and the hearing date that has been fixed for months would need to be vacated.
15. For the foregoing reasons, the Court is not satisfied that the amendment ought to be allowed at this stage and leave to further amend the defences in the proceedings before the Court is refused.

The vacation of the date generally

1. The complication in relation to the vacation of the date arises because of the unfortunate situation of the fourth defendant. Confidential affidavits have been filed and have been read by the Court. Given their confidential nature, the Court will not recite or summarise the contents.
2. It is sufficient, for present purposes, to recount that the fourth defendant will not be available for the trial, either as a party or as a witness. The defendants submit that they were intending to call the fourth defendant as a witness.
3. It is necessary to recount, in very brief terms, the role of the fourth defendant. The fourth defendant had no contact with the sources for the article and did not write the article or, herself, publish it. The fourth defendant's role was essentially as a conduit for the obtaining of a picture of the plaintiff that was published with the article in the Fairfax proceedings and as an editor.
4. No evidence that can be or might be adduced from the fourth defendant cannot be adduced from others or through documents. The defendants (being the defendants in the Fairfax proceedings) submit that her evidence would corroborate evidence of the third defendant, the author of the article.
5. That corroboration must be confined to corroboration that there was no admission or statement that could be implicitly an admission that would prove malice. The likelihood of such a statement being made (assuming, and obviously not deciding, that that was the subjective intention of the third defendant) is well nigh impossible. If it were not the third defendant's subjective intention then the qualification in the foregoing by the use of the description "well nigh" should be removed.
6. In other words, other than evidence that may be confirmatory of conversations between the third and fourth defendants and/or the fourth defendant and other employees of the Fairfax interests, nothing is added to the factual matrix by the evidence of the fourth defendant. Obviously, the plaintiff cannot rely upon any inference associated with the failure of the defendants to call the fourth defendant and, as I understand it, there is no allegation of anything controversial in the conversations in which the fourth defendant was involved or in her conduct, of itself.
7. In a further Confidential Affidavit filed in Court on 7 November 2016 and read by the Court at that time, the defendants have given greater particularity of the issues associated with the fourth defendant. It seems unlikely that the fourth defendant would be available to give evidence for at least six months, if not longer and, while the Court, as presently constituted, has great sympathy for the situation and hopes that the fourth defendant will be in a position to give evidence even earlier, that is not a possibility upon which the Court can act.
8. Despite the difficult circumstances, the Court is not satisfied that it should vacate the hearing dates. Nevertheless, the defendants are not precluded from further application in relation thereto if, given the greater capacity for a trial judge to be apprised of all of the evidence and the significance of any evidence to be given by the fourth defendant, the trial judge were of a different view.
9. During the course of the application to vacate the dates, part of the material related to the question of special damages. One of the suggestions (albeit without formal application) was that the question of damages or the quantification of special damages could be heard separately.
10. In my view, such a decision must be, in the complicated circumstances of these proceedings, determined by the trial judge. It seems that the issue of special damages, relating as it does to the loss of income subsequent to the publication of the defamatory material, is a matter that could be the subject of separate additional evidence, possibly adduced while the jury is considering issues as to liability.
11. Nevertheless, there is an intermingling of evidence on liability and damages, including special damages. I am not, at this stage and on the present material, prepared to make any order associated with the separation of the question of damages or special damages as an issue to be tried separately from the other issues in the proceedings.
12. At the same time, it seems to be a matter best determined by the trial judge, bearing in mind the manner in which the trial is to be conducted.
13. For the foregoing reasons, the Court made the orders it has made over the last period in relation to the subject matters with which the Court has now dealt and refuses the application to vacate the hearing dates.

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: 16 November 2016