First Plaintiff v Defendant

2 The plaintiffs applied to strike out paragraphs 7A to 7E of the Australian Broadcasting Corporations' ('ABC') defence, pursuant to r 23.02(a) and/or (c) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), contending that the ABC's defences should be struck out because they 'did not disclose ... a defence' or 'may prejudice, embarrass or delay the fair trial of the proceeding.'

3 In a related proceeding,[3] the plaintiffs claim damages for defamation against Mr Neil Henson who participated in the ABC's 7.30 program broadcast. The plaintiffs plead the same imputations in each proceeding. In part, Mr Henson's defence mirrors the ABC's defence in this proceeding. Additionally, Mr Henson pleads honest opinion, common law qualified privilege, statutory qualified privilege and ancillary and attendant privilege. Mr Henson intends to re-plead his defence, acknowledging the plaintiffs' criticisms of the pleading of these additional defences, subject to the Court's ruling in this proceeding in respect of the common defences. I need say no more about that proceeding.

4 The plaintiffs allege each publication conveyed the following imputations:

(a) the plaintiffs had breached their obligations to vulnerable investors in the Federal Government's National Rental Assistance Scheme (the 'NRAS') by failing to account to them for money paid to them on behalf of those investors by the Government, for lengthy periods and for sometimes more than a year;

(b) the plaintiffs had ripped off vulnerable investors in the NRAS by deliberately delaying the payment of moneys received from the Government on behalf of those investors so that they could pocket the interest earned on the money; and

(c) Fenn is a hypocrite, in that he recently sought election to the Federal Senate for the Family First party, but rather than putting families first, he had instead exploited families who had invested in the NRAS for his own commercial benefit and caused them financial hardship by failing to pass on payments that had already been paid to Ethan Housing that was due and owing to those families under the NRAS, whilst at the same time profiting from the interest earned on that money.

5 To imputation (a), the ABC pleads truth at common law and justification pursuant to s 25 of the Defamation Act 2005 (Vic) (the 'Act').[4] The plaintiffs contended that the particulars of justification were not capable of justifying that imputation and/or were embarrassing.

6 To all imputations, the ABC pleads contextual truth, pursuant to s 26 of the Act.[5] The contextual imputations alleged are:

(a) the plaintiffs so conducted the business of the second plaintiff that, in July 2016, the Australian charities' regulator took the most serious action it could take and revoked the second plaintiff's charitable status (the 'first contextual imputation');

(b) in failing to provide investors with the annual incentives to which they were entitled under the NRAS within a reasonable time after the end of each financial year, the plaintiffs caused financial hardship, stress and emotional distress, and put some investors at risk of having to sell their properties or default on their mortgages (the 'second contextual imputation').

7 The plaintiffs submitted that in relation to the first contextual imputation, the defence as particularised (paragraphs 7C (7C.1 to 7C.11), 7D and 7E) was incapable of satisfying s 26(b) of the Act because it was not arguable that the first contextual imputation was sufficiently serious to outweigh any of the plaintiffs' imputations.

8 In relation to the second contextual imputation (defence - 7C (7C.12 to 7C.16), 7D and 7E), the plaintiffs submitted that:

(i) the second contextual imputation is not 'in addition to' the plaintiffs' imputations, and therefore fails to satisfy the requirements of s 26(a) of the Act;

(ii) further, or alternatively, it is not arguable that the particulars justifying the second contextual imputation are sufficiently serious to outweigh any of the plaintiffs' imputations, and therefore the defence is incapable of satisfying s 26(b) of the Act.

9 There was little disagreement between counsel as to the applicable principles. I was reminded, and I accept, that the court should exercise great caution with its jurisdiction to strike out a defence prior to trial,[6] particularly where a real question for trial can be identified. The purpose of the rule is to secure compliance with pleading rules.[7] The plaintiff is entitled to know what the defence is, to not be embarrassed by facing allegations that are unintelligible, ambiguous, vague or too general. The opposite party is entitled to sufficient precision and clarity to enable identification of the case to be met and to understand the obligations of proof and evidence to be discharged. The inquiry begins and ends with the pleadings and particulars. The fact that reasonable minds may differ about whether the pleaded material is fact or comment is a strong reason for not striking out the allegations.[8]

10 In Hunt v Times Newspaper Ltd,[9] Eady J noted with apparent approval observations in McDonald's Corp v Steel,[10] that:

In order to plead a defence of justification, a defendant needs to believe that the words complained of are true in the relevant defamatory meaning or meanings, must intend to support that defence at trial, and have reasonable evidence to support the plea or reasonable grounds to suppose that sufficient evidence will be available by the time of the trial. It would seem to follow that, if a defendant has no evidence at the time of pleading the defence, and there is no solid basis for assuming that evidence will emerge by way of disclosure of documents or the supply of further information pursuant to a request, the court should be astute to prevent a weak plea from going forward and thus wasting everyone's time and money. There must be something going beyond bare Micawberism.[11]

11 At common law, the defendant must prove that all of the stings of the defamatory matter relied upon by the plaintiff are substantially true or the defence of justification will fail.[12] Section 25 of the Act states that a defendant must 'prove that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true'. It is sufficient to justify the sting of the pleaded imputation without the need to prove the substantial truth of every detail alleged in the pleaded imputation.[13] Details which are immaterial or trivial and do not alter the defamatory sting of the article may be ignored.[14]

12 The defamatory meaning is to be determined by the jury at trial.[15] In Hunt, Eady J observed that particulars of justification should be relevant to and supportive of the defamatory meanings which are sought to be justified.[16] Whilst some material may be provided by way of background 'it must genuinely form part of the narrative for the purpose of achieving that ultimate objective' so as to avoid 'a climate of prejudice.'[17]

13 To establish contextual truth, a defendant must prove that in 'addition to' the matter complained of, the publication carries contextual imputations that are substantially true, by reason of which the defamatory imputations of which the plaintiff complains do not further harm the reputation of the plaintiff. Section 26 of the Act states:

Defence of contextual truth

It is a defence to the publication of defamatory matter if the defendant proves that -

(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true; and

(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.

14 Particulars of contextual truth must clearly set out the publisher's case, explicitly stating the meaning to be justified with adequate disclosure of the facts, matters and circumstances that will demonstrate substantial truth. In this way, the issues are clearly identified and confined for the benefit of both the court and the parties.[18] The court must in the interpretation and exercise of the power give effect to the overarching obligation under the Civil Procedure Act 2010 (Vic).[19]

15 In assessing whether a contextual truth defence is adequately pleaded, the court should take the defendant's case at its highest in relation to the imputations alleged by the plaintiff and compare the particulars of contextual truth with the least serious of the plaintiff's imputations.[20] Focus must be on the defamatory sting allegedly conveyed by the contextual imputations set up by the defendant's plea and on the facts matters and circumstances alleged to support the substantial truth of the contextual imputations, bearing in mind that the crux of the defence is that the contextual imputations, being substantially true, do not further harm the plaintiff's reputation. These are predominately factual inquiries.

16 A contextual imputation must be 'in addition to' the plaintiff's imputation. It must differ in substance from that other imputation.[21] That evaluation can be impressionistic and a jury is not limited to the precise formulation of an imputation that is pleaded and may consider permissible variants.[22] One approach to assessing difference is to determine what the party pleading contextual truth would need to prove in order to justify the imputation, or what may be proved by way of justification to each such imputation.[23] The test may be satisfied even where the same evidence proves the truth of each imputation.[24] The focus is not on the terms of the imputation but rather the facts, matters and circumstances which prove the imputations.

17 The defence requires that the plaintiff's imputation does not further harm the plaintiff's reputation because of the substantial truth of the contextual imputation set up by the defendant. Again, this assessment is a factual question but it is amenable to a legal assessment of whether the evidence that might be called in support of pleaded particulars has the capacity to support a conclusion as to the harm, or further harm that may have occurred. In Soultanov v The Age,[25] Kaye J (as he then was) observed:

it is a matter for the judgement of the jury, bringing into court their worldly experience and knowledge of human affairs, to determine whether the defamatory imputation pleaded by the plaintiff did not further harm the reputation of the plaintiff, because of the substantial truth of the contextual imputation pleaded by the defendant.[26]

18 The plaintiffs submitted that the particulars of justification were not capable of justifying the imputation and/or were embarrassing. The parties differed in their construction of the sting carried by the imputation that needed to be substantially true for the defence to succeed.

19 The plaintiffs identified two material aspects to this imputation: firstly, that the plaintiffs had breached their obligations to investors; and secondly, the breach complained of was failing to account to the investors for money paid to Ethan Housing on their behalf. The plaintiffs submitted the imputation's sting is the failure to account, not simply the allegation of delay. That is, the injurious nature of the sting is the plaintiffs' culpability for that breach of obligation. The plaintiffs contended that the particulars of justification did not grapple with proving as true their responsibility for the breach.

20 In contrast, the defendant submitted that the sting of the imputation was the delay, as it is the failure to account in a timely fashion that is said to have caused prejudice to investors. The defendant pointed to a number of examples within the publications to illustrate its point that the ordinary reasonable reader would understand the sting of the imputation as focussing on the delay in accounting to investors. Further, it was argued the plaintiffs' submissions tended to conflate obligation in its natural and ordinary meaning with a legal obligation, when on any view the pleaded imputation is not that specific. The obligation being justified may have been created by expectation.

21 It is clearly open to a jury to conclude that the sting of the imputation arose from the plaintiffs' failure by delay in complying with obligations arising from expectations engendered by the plaintiff's conduct, to make payments to investors. Both parties acknowledge that a delay in accounting for investor's entitlements assists in defining the sting of the imputation, although reasonable minds may differ as to how it focuses on the plaintiffs' culpability for that delay or the prejudice to investors that is alleged. It may be a matter of whether the jury considers the defendant's interpretation of the imputation carried is the proper construction of the publication or a permissible variant of the imputation alleged. Alternatively, causing prejudice might be thought to be culpable in the sense being advanced by the plaintiffs, or the jury may not be much persuaded by the distinction to be put to it as to the imputation carried by the publications Either way, these are matters for a trial.

22 The plaintiffs' contentions rather depended on their construction of the sting of the imputation. However, whether the defence is capable of succeeding must be assessed on the basis that the jury may accept the defendant's construction of the imputation as carried or as a permissible variant and look for proof of the substantial truth of that sting, or it may accept the plaintiffs' construction and look at the facts and circumstances through that prism. Either approach is reasonably open.

23 Turning now to the particulars, 7A.1-7A.12 set out the background to the NRAS. The plaintiffs submitted that these background particulars are irrelevant, given that no breach of these provisions has been asserted. The defendant conceded that the particulars provide background information in relation to the operation of the scheme. So much is obvious. The defendant contended that the background will be relevant for context and understanding the nature of the rental assistance scheme in general terms. I agree. Such background information is not strictly necessary in the particulars, but it is likely to be the subject of relevant and admissible evidence. The narrative about the relevant scheme may assist the jury to assess the relevant imputations. The particulars do no harm. No false issue is raised. The trial will not be unnecessarily extended, and the proper function of particulars is otherwise discharged. No basis to strike out particulars 7A.1-7A.12 was demonstrated.

24 The particulars at 7A.13-7A.17 identify circumstances about Ethan Housing's involvement in the NRAS. Paragraph 7A.15 states that on 3 December 2012, Ethan Housing was registered as a charity with the Australian Charities and Not-for-profits Commission ('ACNC'). 7A.16 states that on 25 July 2016, the charitable status of Ethan Housing was revoked by the ACNC. The revocation was backdated to

25 The plaintiffs submit that Ethan Housing's charitable status is irrelevant to imputation (a) and that the inclusion of these particulars introduced irrelevant material that will ultimately create prejudice and cause delays at trial. The defendant conceded that the matters alleged in 7A.15-7A.16 are no more than background for the imputation but submitted that that such provisions are relevant to the contextual truth defence.

26 I accept the plaintiffs contention that the particulars relating to Ethan Housing's charitable status cannot support the justification defence, and are irrelevant and embarrassing in that context. Particulars 7A.15-7A.16 will be struck out. The same allegations are repeated in the particulars of the s 26 defence and are further considered in that context.

27 The particulars at 7A.18-7A.19 identify agreements between Ethan Housing and the investors under which each investor paid an annual fee to Ethan Housing that was equivalent to 7.5% of the incentive provided by the Federal and State/Territory Governments for each NRAS approved dwelling the investor owned. Ethan Housing agreed to ensure the dwelling complied with the requirements of the scheme; that it would submit statements of compliance for the dwelling to the relevant body; and ensure the incentive provided by the Federal Government for the dwelling was passed on to the investor.

28 The plaintiffs submitted that these particulars were not related to any allegedly breached obligations and did not address the time for payment of incentives to the investor or identify any obligations relevant to delayed payment of incentives.

29 The defendant submitted that these particulars set out a number of contractual obligations owed by Ethan Housing to its investors. It submitted that given the incentives were not paid in a timely manner, a jury could infer that one or more of those contractual obligations were breached. It further contended that these particulars are relevant to the way the plaintiffs induced the investor's expectations as to what a reasonable investor could reasonably expect under the agreement, particularly that Ethan Housing would complete all tasks and activities in relation to the payments.

30 Whatever construction of the imputation be adopted by the jury, assessment of the defence will require focus on the agreements between Ethan Housing and the investors, which suggests that agreements will be relevant evidence at trial. These particulars give notice of that evidence. No basis to strike out particulars 7A.17-7A.19 was demonstrated.

31 Next, the particular 7A.20 set out representations by Ethan Housing via its website (www.ethanhousing.com.au) in relation to the timing and nature of payments between 2012 and 2013. These included representations that the incentives would be received by Ethan Housing by cash payment, and passed onto investors after an audit was completed; that the incentives would be paid bi-annually in cash; that the investor would earn at least $109,228 in tax-free income for every NRAS approved dwelling; and that they would enjoy positive cash flow.

32 The plaintiffs contended that these particulars were vague and do not specify details such as to which investors these representations relate and who made the representations. I do not agree. As the defendant submitted, these representations are relevant to how payments were supposed to be made and that it was intended to operate 'like clockwork.' They identify circumstances on which the defendant will rely to establish the substantial truth of the imputation.

33 These particulars are relevant to the manner in which the incentives were intended to be passed onto the investor, and what the investors could expect from participation in the scheme. The relevant extracts from the Ethan Housing website and publications could be adduced at trial to show that these representations set out how the scheme was intended to operate and as a corollary, how delays were not consistent with those representations.

34 It is unnecessary to specify the exact investors to which these representations were intended. Reliance by investors is not identified as an issue. Evidence that these representations were published on the Ethan Housing website or provided to investors by Ethan Housing, is a relevant circumstance supporting a contention that the imputation was substantially true.

35 The particulars at 7A.21-7A.24 also set out a number of representations made by Ethan Housing to investors. From these particulars, the defendant submitted that the investors have at all relevant times had a reasonable expectation that they would receive their incentives from Ethan Housing within a reasonable time after the end of each NRAS year. It is contended that by reason of those representations, the plaintiffs owed an obligation to provide incentives to investors in a timely manner, and the plaintiffs breached that obligation. However, the plaintiffs contend that these particulars are embarrassingly vague, and that only 7A.23 comes near to the subject of the imputation. No legal obligation was identified in the manner in which the plaintiffs define the imputation.

36 The plaintiffs plead the imputation in general terms and, as the defendant submitted, it might be an equitable, moral or social obligation that was breached. Relevantly, it is an obligation in the ordinary English sense of the word that is pertinent to justification.

37 I do not accept the submission that the representations are embarrassingly vague simply because they refer to investors in general terms. These representations appear to be aimed at scheme participants who are identifiable. It is for the jury to determine at trial whether representations were conveyed and gave rise to the alleged expectation, imposed upon the plaintiffs the alleged obligation, and constitute a circumstance that points to the substantial truth of the imputation.

38 The particulars in 7A.20-7A.25 identify that the defendant may support the truth defence with evidence probative of whether the investors had a reasonable expectation that the payments would be made to them within a reasonable time. It would be open to a jury to make such a finding and to infer that the plaintiffs had assumed obligations in relation to the timing of incentive payments if evidence can be adduced to show that Ethan Housing received the incentives in cash from the government; proposed to pay the incentives to investors after an audit process in August and September each year; had represented that the incentives would be paid as soon as Ethan Housing received them from the government; and that Ethan Housing would take steps to ensure that investors would receive their incentives without complication and on time at the end of the NRAS year. No basis to strike out particulars 7A.20-7A.24 was demonstrated.

39 The particulars at 7A.26 set out a number of specific instances in which Ethan Housing did not provide all investors with the full amount of their incentives within various periods of time after the conclusion of the relevant NRAS year, ranging from 5 months to over a year. These particulars are relevant to the subject of the imputation. These particulars also function to give notice of the evidence of delay. I do not accept that the particulars go to the issue of vulnerability of the investors and have no relevance other than to create a climate of prejudice to the plaintiffs, as they contended.

40 The particulars at 7A.27 set out a number of circumstances that the defendant submitted are relevant to the issue of the financial vulnerability of investors to delay in payment of incentives by the plaintiffs. Specifically, the particulars point to circumstances in which the investors did not have direct access to the incentives from the government; the investors were responsible for all ongoing costs associated with their NRAS approved dwellings; and the investors relied upon Ethan Housing to provide their incentives in a timely manner to assist with cash flow and outgoing expenses.

41 Particular 7A.27.4 alleges that prior to March 2015, some investors used independent property management companies with no connection to the plaintiffs to provide tenancy and property management services for their NRAS approved dwellings. The defendant alleged in 7A.27.5 that from around the same time, Ethan Housing purported to require investors to engage the services of a property management company approved by Ethan Housing, referred to as 'Ethan Residential', to provide tenancy and property management services. The particulars at 7A.27.6-7A.27.7 allege that whilst nothing under the Scheme prevented investors from using Ethan Housing for NRAS compliance purposes only, some investors who did not wish to engage Ethan Residential felt compelled to do so because they feared losing their incentives if they failed to comply with the demands of Ethan Housing.

42 The plaintiffs submitted that these matters were irrelevant, raised a false issue and will cause delay at trial, and achieved nothing beyond creating a climate of prejudice to the plaintiffs.

43 The defendant submitted that these particulars were relevant to the issue of vulnerability. Evidence at trial in support of these particulars may be used by the jury to infer that there was a power imbalance and that Ethan Housing exerted pressure on investors for financial gain as investors could not afford undue delay in the payment of incentives. The particulars identified how the investors were vulnerable in a number of ways, given that unless the plaintiffs made payments in a timely manner they would suffer the consequences set out in 7A.27.1-7A.27.3. It was submitted that evidence - that investors would be prejudiced unless the incentives came in a timely manner having regard to cash flow and ongoing costs - could be used by the jury in assessing the truth of the imputation that the plaintiffs breached obligations owed to vulnerable investors.

44 The link between the sting of the imputation and the particulars relating to the requirement for investors to engage in further services provided by Ethan Housing, is found in the circumstance that the imputation concerns exploitation by a delay in payment to vulnerable investors. Vulnerability is not an immaterial or trivial aspect of the imputation that may be ignored when seeking to establish substantial truth. It may be arguable that while investors were vulnerable in the circumstances identified in 7A.27.1-7A.27.3, vulnerability is stretched too far by the allegation that the investors felt compelled to utilise additional services of Ethan Housing for fear that they would not be paid their incentives in time if they failed to do so. That is a matter for the jury to determine. I do not think that it would not be open to a reasonable jury to draw that inference

45 In summary, I am not satisfied that the defence of justification is so clearly unsustainable on the facts and circumstances particularised that it could not possibly succeed. Those particulars will support evidence that will be capable of justifying the sting of the imputation, whether it be interpreted by the jury as the plaintiffs contend or as the defendant contends. Self-evidently the particulars may more comfortably establish substantial justification of the imputation as the defendant would have it construed, which is a sufficient basis to allow the defence to stand. I am not persuaded that it is not arguable that a jury may find that the defamatory imputation as the plaintiffs construed is substantially true.

46 With the exception of particulars 7A.15-7A.16 which will be struck out, the plaintiffs' application to strike out the defence of justification is refused.

47 The plaintiffs submitted that the first contextual imputation characterises Ethan Housing's failure to comply with its obligations as being 'with respect to record keeping'. Posited as a failure in record-keeping, the first contextual imputation is not sufficiently serious that the plaintiffs' imputations could not and did not cause any further injury to the plaintiffs.

48 The defendant rejected the plaintiffs' characterisation of the first contextual imputation. It is contended that the record-keeping failure was coloured by the context - the revocation of Ethan Housing's charitable status, which is the most serious sanction available to the regulator under the terms of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (the 'ACNC Act'). The defendant submitted that the revocation of Ethan Housing's charitable status implied that its record keeping failure amounted to a very grave failure to comply with the law.

49 The particulars at 7C.1 and 7C.2 allege that on 3 December 2012, Ethan Housing was registered as a charity with the ACNC, a Commonwealth statutory body operating as Australia's independent national regulator of charities. The defendant conceded these are background particulars. Particulars 7C.5, which sets out the regulatory role of ACNC is also background and 7C.6 derives from correspondence sent by the ACNC to the ABC. Evidence about these matters will be admissible at trial and these particulars can stand.

50 The plaintiffs submitted that particulars 7C.3 and 7C.4 go beyond background and are irrelevant as are the particulars in 7C.7. With respect to paragraph 7C.9, the plaintiffs submitted that the various allegations of breaches of the ACNC Act were irrelevant to the first contextual imputation, being a failure of record keeping. Moreover, there was no allegation that any of the matters listed in 7C.6 were the only reasons to revoke charitable status or that the plaintiffs had engaged in any such conduct.

51 The defendant emphasised the need to inform the jury that charitable status is a privileged position and that the regulator treats revocation of charitable status as being of the most serious of sanctions. The particulars in 7C.8-7C.10 foreshadow evidence that, if accepted by the jury, would show what the ACNC investigation entailed, how it was conducted and what the outcome was, in the context of the remainder of the particulars related to the first contextual imputation.

52 I reject the plaintiffs' characterisation of the first contextual imputation as a mere, or relatively inconsequential, record-keeping failure. In my opinion, it would be open to a jury, after considering the evidence that these particulars would permit, to viewed the sting of the imputation about the record keeping failure in the context of the ACNC enforcing its most serious sanction after its investigation into Ethan Housing's activities and operations. The jury could reasonably conclude that the first contextual imputation was a serious imputation of a grave failure to comply with the law.

53 To establish the defence, the jury must compare this imputation with the least serious of the plaintiffs' imputations, which is imputation (a) concerning breach of obligations. A jury could reasonably accept that the first contextual imputation is in addition to each imputation. It is at least arguable that a jury could find the revocation of charitable status differs in substance from that contained in imputation (a) and is sufficiently serious such that the plaintiffs' imputation did not cause any further injury to the plaintiffs. It would be open to a jury to find that breach of statutory obligations that attracted the regulators most serious sanction would not further harm the plaintiffs' reputation beyond any harm from breach of private obligations owed to investors. This is a matter of fact for the jury and I am not persuaded that evidence in support of these particulars will lack the capacity to permit a reasonable jury to so reason.

54 The plaintiffs have not established that the contextual truth defence based on the first imputation is so obviously untenable or unarguably bad to warrant being struck out.

55 The plaintiffs submitted first, that the second contextual imputation does not attribute any blame to the plaintiffs for the alleged delays in payments being made to investors and therefore cannot further harm the reputation of the plaintiff. Second, the second contextual imputation is not 'in addition to' the plaintiffs' imputations. The imputations are substantially the same - the plaintiffs' imputation being a breach of obligations and the second contextual imputation relating to a failure to account. Thus the second contextual imputation is not capable of swamping the plaintiffs' imputations.

56 The plaintiffs submitted that there is no assertion that they were aware of some of the consequences investors may have suffered that are illustrated by the particulars. The particulars do not identify the plaintiffs' actual culpability as an issue relevant to the defence. They merely allege the stressful effect of the delayed payments on a number of identified investors that, assuming proved, would not be sufficient to show that the second contextual imputation is different in substance to that of the plaintiffs' imputation (a) and is not 'in addition to' the plaintiffs' imputation. This conclusion, they submitted, was reinforced by the fact that the same particulars are relied on for both the justification defence to imputation (a) and for the second contextual imputation (see particular 7C.12).

57 Particular 7C.15 states that several investors 'became frustrated and stressed by the failure of Ethan' Housing to respond adequately and in a timely manner to their legitimate concerns about delays in payment of incentives. The plaintiffs submitted that this particular raised a false issue, was irrelevant and created a climate of prejudice.

58 In reply, the defendant submitted that the second contextual imputation would be understood as alleging that by virtue of failing to provide the investors with incentives in a timely manner, the plaintiffs caused financial hardship, stress and emotional distress and put some investors at risk of having to sell their properties or default on their mortgages. The sting of the imputation resides in the adverse consequences suffered by the investors.

59 The second contextual imputation is 'in addition to' imputation (a) - that the plaintiffs failed to comply with their obligations to the investors by delay in payment of the incentives - as it goes one step further because its sting is that as a result of such failure, the plaintiffs caused financial hardship, stress and emotional distress, and put some investors at risk of having to sell their properties or default on their mortgages. The defendant conceded that the particulars relied on for the justification defence were repeated, but submitted that the additional particulars of the contextual truth defence (in paragraphs 7C.13-16) focus on the actual consequences experienced by the investors.

60 It is not uncommon to have substantial overlap between imputations pleaded by a plaintiff and contextual imputations set up by a defendant, but the particulars show that the evidence to be adduced to prove the truth of the second contextual imputation would differ to that required to prove the truth of the plaintiff's alleged imputation. That follows because the second contextual imputation is in addition to and capable of swamping the plaintiff's imputation by reason of the specific consequences faced by various identified investors. At trial, evidence could be led in support of these particulars that might persuade a jury about the financial hardship and emotional distress experienced by those investors, which is a matter that the defendant must prove to succeed in its defence. The facts and circumstances that may demonstrate the truth of the second contextual imputation range over a greater factual matrix and are much more specific than those that may demonstrate the truth of the plaintiff's imputation (a).

61 The plaintiffs have not persuaded me that it is not arguable that the second contextual imputation is not different in substance to the more general imputations of a failure to comply with obligations by a delay in payment to investors,[27] or that it is not arguable that the sting of the second contextual implication is not sufficiently serious and could not further harm the reputations of the plaintiffs.

62 However, I would add that the blanket cross-referencing of the particulars supporting the justification defence to the justification of the second contextual imputation involves some overreach. The allegations particularised in paragraphs 7A.27.5-7A concerning the possible engagement of Ethan Residential may raise issues of stress and emotional distress but are not sufficiently connected to the second contextual imputation. I agree with the plaintiffs' submission that the cross referencing by paragraph 7C.12 must be appropriately restricted.

63 Subject to the amendment required to limit the cross-referencing alleged in paragraph 7C.12, the plaintiffs' application to strike out the defence of contextual justification is refused.

[1] An item broadcast on the ABC's 7.30 on 12 December 2016 ('the Program').

[2] The Program together with an edited transcript and other material was published on the ABC website and a news article based on the Program was published on the ABC website.

[6] Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245, 261-262 [33] (Gummow, Hayne and Heydon JJ); Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416, 424 (Evatt J).

[7] Meckiff v Simpson [1968] VicRp 7; [1968] VR 62, 70.

[8] Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245, 261-262 [33] (Gummow, Hayne and Heydon JJ).

[9] [2012] EWHC 110 ('Hunt').

[10] [1994] EWCA Civ 41; [1995] 3 All ER 615.

[11] [2012] EWHC 110 [28] citing McDonald's Corp v Steel [1994] EWCA Civ 41; [1995] 3 All ER 615; See also Johnston v Holland [2016] VSC 422 [39].

[12] Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; (2011) 81 NSWLR 157, 172-173 [59]; Howden v Truth & Sportsman [1937] HCA 74; (1937) 58 CLR 416, 420-421 (Dixon J); Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1, 57-58 [279] (Gillard AJA).

[13] Sutherland v Stopes [1925] AC 47, 79 (Lord Shaw).

[14] Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1, 63 [306] (Gillard AJA).

[15] Ibid 57 [276]-[277] (Gillard AJA).

[16] [2012] EWHC 110 [24].

[18] Johnston v Holland [2016] VSC 422 [11] citing Setka v Abbott [2014] VSCA 287; (2014) 44 VR 352.

[19] Civil Procedure Act 2010 (Vic), s 8.

[20] Compare McMahon v John Fairfax Publications Pty Limited (No 3) [2012] NSWSC 196 [22].

[21] Abou-Lokmeh v Harbour Radio Pty Ltd [2016] NSWCA 228 [30]-[40] (McColl JA); Newnhan v Davis (No 2) [2010] VSC 94 [48]-[50]; Fairfax Media Publications Pty Ltd v Zeccola [2015] NSWCA 329; (2015) 91 NSWLR 341, 352- 354 [43]-[54] (McColl JA).

[23] Abou-Lokmeh v Harbour Radio Pty Ltd [2016] NSWCA 228 [31] (McColl JA).

[24] Fairfax Media Publications Pty Ltd v Zeccola [2015] NSWCA 329; (2015) 91 NSWLR 341, 360 [83] (McColl JA); Saint v John Fairfax Publications Pty Ltd [2002] NSWSC 312 [11]-[12]; Purcell v Cruising Yacht Club of Australia Pty Ltd [2003] NSWSC 245 [44]-[47].

[25] Soultanov v The Age [2009] VSC 145; (2009) 23 VR 182.

[27] See eg, Abou-Lokmeh v Harbour Radio Pty Ltd [2016] NSWCA 228 [42]-[43] (McColl JA).