Dominello v Harbour Radio Pty Limited t/as 2GB

Consideration

1. The principles which apply to the amendment of a Statement of Claim are well known. In Horton v Jones & Ors (No 2) [1939] NSWSR p 35; (1939) 39 SR (NSW) 305 Jordan CJ (with whom Halse Rogers J and Owen J agreed) said at 309-310: "[it] is now a commonplace that if a party to legal proceedings establishes to the satisfaction of the Court that he is genuinely desirous of amending his pleadings for the purpose of modifying or otherwise altering some existing claim or defence, or of introducing a new ground of claim or a new matter of defence, he should be permitted to do so, subject to the imposition of such terms as may be proper, unless the proposed amendment is so obviously futile that it would be struck out if it appeared in any original pleading, or unless it is one that it would be impossible to allow upon any terms without causing substantial injustice to another party to the proceedings. The question whether an amendment would cause substantial injustice must, of course, depend upon the circumstances of the particular case."
2. Statements to similar effect were made by the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175: "102 The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment. 103 The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case." (Footnotes omitted.) (Rule 21 of the Court Procedure Rules 2006 of the ACT is similar in its effect to ss 56-64 of the Civil Procedure Act 2005 (NSW).)
3. A body of law has developed relatively recently concerning the amending of Statements of Claim in defamation matters where the amendment sought is the adding of contextual imputations taken from a Defence filed in the proceedings. The relevant principles were conveniently summarised by McCallum J in Chel v Fairfax Media Publications Pty Limited [2015] NSWSC 171 where her Honour said: "3 A plaintiff in a defamation action must specify the imputations upon which he or she relies: r 14.30 UCPR. It is a defence to the publication of defamatory matter if the defendant proves that those imputations are substantially true: s 25 of the Defamation Act 2005 (NSW). Separately, it is a defence if the defendant proves that, in addition to those imputations, the matter carried other imputations that are substantially true and the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations: s 26 of the Defamation Act. 4 The defendant's contextual imputations must necessarily be imputations other than those of which the plaintiff complains. 5 It is, I think, beyond doubt that the Court has a discretion to allow a plaintiff to amend his or her pleading so as to adopt a contextual imputation pleaded by a defendant: Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852 at [41] per Simpson J; approved in Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157 at [88] to [89] per McColl JA; cited with approval in Holt v TCN Channel 9 Pty Ltd (2014) 85 NSWLR 96 at [23] per Macfarlan JA; Gleeson JA and Sackville AJA agreeing; and see my decision in Hall v TCN Channel 9 Pty Ltd [2014] NSWSC 1604. … 17 The simple fact is that there is nothing in the statute to prohibit a plaintiff from relying on an imputation which happens, as a matter of history, first to have been pleaded by a defendant as a contextual imputation. As a matter of practicality, however, to do so requires an amendment with the leave of the Court. Whether leave should be granted is a discretionary judgment to be made according to the dictates of justice in the individual case. … 21 … The pleading difficulties created by the current state of the law were explained by Gibson DCJ in Mallegowda as follows (at [20]-[22]): "20. Following Kermode, a s 26 defence could not be pleaded to a plaintiff's imputations, and was restricted to those imputations which a defendant pleaded which were different in substance. This has, unfortunately, resulted in increasingly convoluted contextual justification imputations, as defendants searched to find "different" imputations to plead contextually. The problem was that a plaintiff would then seek leave to "plead back" these imputations, leaving the defendant without the benefit, if such an application was granted, of no separate imputations to ground a s 26 defence. 21. It was against this background that courts began to refuse plaintiffs leave to do so (see Ahmed v Nationwide News Pty Ltd and Waterhouse v Age Co Ltd, supra). The basis for the argument that the plaintiff could not plead these imputations back is that case management, or delay, principles, mean that the plaintiff has to get the imputations right the first time, as McCallum J notes in Hall v TCN Channel Nine Pty Ltd [2014] NSWSC 1604, citing McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 307). In Waterhouse v Age Co Ltd, Nicholas J held that a plaintiff who failed to identify all the imputations had thereby disqualified himself from being able to rely upon any contextual imputation later pleaded by the defendant, no matter how short the delay or how obscure the contextual imputation, on the basis that the plaintiff had to get the imputations "right the first time, at risk of refusal to amend at a later time": Waterhouse v The Age Pty Ltd, citing Giles JA in McMahon at [49]. Given the difficulties of pleading imputations, and the absence of judicial guidance as to how a plaintiff is to identify every imputation available, this was a counsel of perfection, as well as being inconsistent with the right of any party to amend particulars and pleadings generally. 22. These convoluted pleadings in turn caused complexities at the trial level, as Mr Rasmussen noted, referring to trials in which he had appeared. It did not resolve the problem caused to defendants by the watering down of the defence; it simply added to the burden of the trial judge in determining how the jury should be addressed and in determining, when assessing damages, how to take into account different findings by the jury as to the success or failure of the imputations in question." 22 Those remarks acknowledge the potential unfairness of precluding a plaintiff from relying upon an imputation that has escaped the imagination of the pleader but which, upon being identified, the plaintiff wishes to embrace in the vindication of his or her reputation."
4. The most recent addition to the jurisprudence in this area further complicates the position of a defendant when a plaintiff wishes to adopt a contextual imputation pleaded in the Defence. In Fairfax Digital Australia and New Zealand Pty Ltd v Kazal [2018] NSWCA 77; 97 NSWLR 547 the Court (McColl, Meagher and Gleeson JJA) held that once a contextual imputation has been pleaded by a plaintiff it cannot be relied upon by a defendant. It rejected a proposition which had been raised by Basten JA in Kermode to the effect that once a matter went to trial, even though a defendant had not pleaded contextual imputations, if any contextual imputations were found to be true the defendant could contingently rely upon them as a defence. The present position is that once an imputation is one of which the plaintiff complains, it can never be relied upon by a defendant to make out a defence under s 26 of the Act.
5. It is against that background that this application by the plaintiff to amend his Statement of Claim must be considered.
6. Going back to first principles, it cannot be said that there was excessive delay in this matter. This is so despite no explanation being offered as to why (the Defence having been filed on 14 December 2018) nothing was done about amending the Statement of Claim until the notification on 7 March 2019. Nevertheless, that delay of itself is not sufficient to preclude the amendment sought by the plaintiff.
7. A striking feature of the plaintiff's application is the almost complete absence of any explanation of why the amendment was being sought. All that was said in the Etherington affidavit was "[we thought] that the imputations as contained in the Statement of Claim adequately distilled the key defamatory stings conveyed by the matter complained of concerning the plaintiff". This is despite the fact that on any analysis of the evidence, if this amendment were allowed, the defendant would be seriously prejudiced in that it would be precluded from relying upon what appears to be a strong contextual truth defence under s 26 of the Act.
8. A comparison of the present imputations with the contextual imputations makes clear that they are significantly different. The difference goes much further than a subtle or nuanced interpretation. The difference is such as to require some explanation. Most obviously, the present imputations have as their sting 'corruptly benefiting a developer'. The contextual imputations, however, have as their sting 'threats and intimidation by a Minister to members of a Council to try and get his way'.
9. It is also clear that the present imputations are based on the obvious mistake in the radio news item that the plaintiff wanted the DA approved. By contrast, the contextual imputations are of a more general kind and do not adopt a position either favouring or opposing the DA. There is a focus on the threat concerning party preselection and an assertion that the conduct was so serious that it deserved to be referred to ICAC. It follows that the contextual imputations differ in important respects from the present imputations. That places considerable doubt on the only explanation offered by the plaintiff for the amendment.
10. It is accepted that looked at in isolation the contextual imputations are subject to interpretation and may have a different meaning depending upon background and other factors. In this case, however, the capacity for such differences in interpretation is significantly reduced when one has regard to the content of the SMH article. When one considers the contextual imputations against that background, as already indicated, the sting becomes obvious. Similarly, the issues to which words such as "corruptly" and "linking" are directed, are significantly narrowed. The scope for interpretation is, therefore, also similarly limited.
11. It is not without importance that the contextual imputations are fully consistent with the SMH article. Moreover, there is no evidence that the plaintiff believes that the contextual imputations are untrue. This is in circumstances where the evidence in the Burke affidavit strongly tends to establish that they are true.
12. The Burke affidavit establishes that: 1. the plaintiff made calls about the DA to Crs Pickering, Stott, Maggio and Yedelian; 2. the plaintiff by his own admission in an interview with the SMH made those telephone calls; 3. the plaintiff admits that he said to Cr Pickering that if he supported the DA then "that would be a line in the sand and that I would lose confidence in him"; 4. the plaintiff admits that he said to Cr Stott "that if she rejected the advice of Council officers then she would need to justify that decision to the 50 odd preselectors and the broader community"; 5. Cr Stott felt threatened and intimidated by the telephone call in relation to her preselection; 6. Cr Stott made a "public interest disclosure" to the general manager of the Council about her telephone conversation with the plaintiff; 7. Cr Pickering was so concerned about the telephone call he received from the plaintiff that he sought legal advice about it and raised it with Anthony Roberts, the Planning Minister for NSW; 8. Mr Roberts confirmed that Mr Pickering had raised the matter with him on 26 April 2017; 9. Cr Laxale had referred the matter to ICAC; 10. the Council voted in favour of the Holdmark DA; 11. Cr Stott lost her Liberal Party preselection; and 12. Cr Pickering also lost his Liberal Party preselection.
13. The plaintiff's attack on this evidence, and on the Burke affidavit generally, is to the effect that its content is based on hearsay and is therefore inadmissible in these proceedings. That submission is incorrect. These are interlocutory proceedings and the evidence therefore comes within the exception to the hearsay rule in s 75 of the Evidence Act 1995 (NSW). The contents of the Burke affidavit and the SMH article itself are also admissible pursuant to s 70 of the Civil Procedure Act.
14. On that state of the evidence, and given the content of the SMH article, it is surprising that no proceedings in defamation have been brought against Fairfax Media. On its face the SMH article appears to be significantly more damaging to the plaintiff than the radio broadcast. Importantly, there is no evidence that anything in the Burke affidavit or in the SMH article is untrue. Finally, there is no evidence, in particular from the plaintiff, to the effect that anything in the contextual imputations is false.
15. While there is no obligation on the plaintiff to file an affidavit in support of the application to amend, in the circumstances of this case the plaintiff needed to satisfy the Court that there is a proper purpose for the amendment. The failure to do so means that there is no evidence to support a finding that there is a proper purpose for this amendment. This provides a further basis for the inference that not only are the contextual imputations substantially true but that the only purpose of the amendment is to prevent the defendant using them as a defence under s 26 of the Act.
16. Further, on that state of the evidence, I am not persuaded that the intention behind the proposed amendment is for the plaintiff to vindicate his reputation against the defamatory meanings in the defendant's contextual imputations. In the absence of any evidence to the contrary, and in the absence of any assertion either in these proceedings or in the interview given by him to the SMH that the contextual imputations are false, I am led to the conclusion that on balance there is no proper basis for the amendments sought and that this application gives rise to an abuse of process.
17. As McCallum J said in Farrow v Nationwide News Pty Ltd [2017] NSWCA 246 (Basten JA and Sackville AJA agreeing): "35 The submission that a plaintiff's imputation does not "challenge" anything is technically correct in that falsity of an imputation is not an element of the cause of action. All a plaintiff is required to establish is that the matter complained of was published and that it conveyed a defamatory imputation; truth is a defence. It does not follow that a plaintiff can properly institute an action seeking damages for a defamatory imputation he or she knows to be true. In my respectful opinion, it is manifestly an abuse to invoke the court's process to obtain a remedy to which the applicant is indisputably not entitled or else put a defendant to proof of that which cannot be denied. … 38 … The abuse of process lies in having instituted proceedings which, for whatever tactical reason commended itself to the pleader, sought a remedy for the applicant on the strength of imputations the truth of which cannot properly be controverted by her."
18. McCallum J made observations to similar effect in YZ v Amazon (No 7) [2016] NSWSC 637 where her Honour said: "32 Ms Chrysanthou, who appears for Amazon, submitted that, if the plaintiff has knowingly sued on true imputations, that in itself is an abuse of the Court's processes. She submitted that the position is no different from the position of a plaintiff who, for example, deliberately sues on a true imputation so as to prevent the defendant from being able to plead that imputation as a contextual imputation, taking advantage of the principles considered in the decision of the Court of Appeal in Besser v Kermode [2011] NSWSC 174 (reported as Fairfax Media Publications Pty Ltd v Kermode 81 NSWLR 157) at [88]-[89]. Certainly, if it were established that the plaintiff had deliberately sued on imputations she knew to be true for a purpose ulterior to the purpose of vindicating her reputation (such as for the purpose of excluding a plea of contextual truth to other imputations), that would, in my view, amount to an abuse of process."
19. I am persuaded that the situations described by McCallum J in those decisions are analogous to the present matter where the plaintiff is seeking an amendment that is intended to prevent the defendant raising a defence to which it would otherwise be entitled rather than vindicate any attack on his reputation.

Orders

1. For the above reasons, the application for leave to amend the Statement of Claim to include the contextual imputations is refused.

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