Herald & Weekly Times Pty Ltd & Anor v Buckley [2009] VSCA 75

Court of Appeal (Vic)|2009-04-16|Before: NETTLE, ASHLEY and WEINBERG JJA

DEFAMATION - Pleading - Defences - Fair comment - Jury questions - Interlocutory strike-out application - Whether open to jury to conclude that ordinary reasonable reader would interpret alleged imputations as opinion derived by publisher from facts stated in publication.

APPEAL - Interlocutory matter of practice and procedure - Discovery - Appellate court loath to grant leave to appeal against refusal of particular discovery.

1 This is an application for leave to appeal against interlocutory orders of the Judge in Charge of the Major Torts List to strike out some paragraphs of the applicants' defence and refuse the applicants further particular discovery. It is convenient to deal first with his Honour's orders to strike out paragraphs of the defence.

2 By his Statement of Claim the respondent ('Mr Buckley') claims damages for defamation alleged in respect of four articles written by the second applicant and published by the first applicant in the Herald Sun newspaper and on the internet in December 2007.

3 The first article, entitled: 'Exclusive: Horse Tycoon's Cash Trail to X - X's $1 Mil Mate'; the second article, entitled: 'Life in the Fast Lane'; and the third article, entitled: 'Waking in fright at boss's city pad', were published in the Herald Sun and on the HWT website on 5 December 2007. The fourth article, entitled: 'Tycoon admits deal', was published in the Herald Sun and on the HWT website on 6 December 2007.

4 In his statement of claim, Mr Buckley alleges that:

a) The first article in its natural and ordinary meaning meant and was understood to mean that:

The plaintiff was illicitly and criminally involved in the activities of X;[1]
The plaintiff made secret and illicit payments totalling about one million dollars in cash to X;[2]
The plaintiff, as a close friend of X, acted as a stooge for X's ownership of the racehorse E;[3]
The plaintiff concealed illicit and illegal payments to X through false contracts;[4]
As part of the plaintiff's illicit and improper dealing with X, the plaintiff acquired X's property at gross under value;[5]
The plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug;[6]
The plaintiff has a criminal conviction for fraud;[7]
The plaintiff has threatened business associates and staff with retribution through his association with X;[8]
The plaintiff had such a close association with X that he permitted X to use both his Melbourne and his Surfers Paradise apartments.[9]

b) The second article in its natural and ordinary meaning meant and was understood to mean that:

The plaintiff was guilty of fraud, theft and obtaining property by deception;[10]
The plaintiff is involved in illegal business activities.[11]

c) The third article in its natural and ordinary meaning meant and was understood to mean that the plaintiff had such a close association with X that he had provided X with keys to his Southbank apartment and permitted X free use of both his Southbank apartment and Surfers Paradise apartment.[12]

d) The fourth article in its natural and ordinary meaning meant and was understood to mean that:

The plaintiff was illicitly and criminally involved in the activities of X;[13]
The plaintiff made secret and illicit payments totalling about one million dollars in cash to X;[14]
The plaintiff concealed illicit and illegal payments to X through false contracts;[15]
Each of the meanings referred to in paragraphs [6(a), (b) and (c)], by reason of the article's reference to the publications in the Herald Sun the previous day and thereby the recall to readers of those articles and the likelihood the readers of the fourth article would have read the first, second and third articles.[16]

5 By paragraph 16 of their defence, the applicants pleaded a common law defence of fair comment on a matter of public interest, and gave as particulars the following:

With respect to the meaning set out in [paragraph 6(a)(1) of the Statement of Claim], insofar as the first or fourth articles conveyed a meaning that the plaintiff's involvement in the activities of X were 'illicit and criminal' then such meaning was conveyed as a matter of comment or opinion;
With respect to the meaning set out in [paragraph 6(a)(2) of the Statement of Claim], insofar as the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit' then such meaning was conveyed as matter of comment or opinion;
With respect to the meaning set out in [paragraph 6(a)(4) of the Statement of Claim], if the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit and improper' then such meaning was conveyed as a matter of comment or opinion;
With respect to the meaning set out in [paragraph 6(a)(5) of the Statement of Claim], if the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit and improper' then such meaning was conveyed as a matter of comment or opinion;
With respect to the meaning set out in [paragraph 10(3) of the Statement of Claim], insofar as the fourth article conveyed a meaning that the payments made by the plaintiff to X were 'illicit and illegal' then such meaning was conveyed as a matter of comment or opinion;
Further, if the first or fourth articles conveyed the meanings set out in [paragraphs 6(a)(3) and (6) of the Statement of claim] and the second article conveyed the meaning set out in [paragraph 6(b)(2) of the Statement of Claim], then such meanings were conveyed as a matter of comment or opinion.

6 The judge ordered that those paragraphs of the defence be struck out on the basis that 'a jury could not reasonably conclude that the ordinary reasonable reader of the first, second and fourth articles would understand that the parts of the articles, alleged by [Mr Buckley] to give rise to the imputations [set out in paragraphs 6(a)(1) to (6), 6(b)(2) and 10(3) of the Statement of Claim], were comments by the defendants, which could form the basis of a defence of fair comment in respect of them'.[17]

7 The applicants sought leave to appeal from the judge's orders and the application first came on for hearing before Nettle and Ashley JJA on 6 March 2009. It then appeared to the court and counsel that it would be in the interests of expedition and efficiency for the application for leave to appeal and any appeal to be heard before the same court at the same time. Accordingly, on that day it was ordered that the application should stand over to be heard by the same court as would hear the appeal if leave to appeal were granted and directions were made for the expeditious preparation of the appeal. In the result, the application, and in effect the appeal, came on for hearing before all three of us on 18 March 2009 as a matter of priority.

8 The principles which govern such an application are clear. Leave to appeal against an interlocutory order ought not be granted unless manifestly wrong or, as it is more often put, attended by sufficient doubt to warrant appellate intervention, and productive of substantial injustice. The court ought exercise particular caution in interfering with an exercise of discretion in relation to an interlocutory matter of practice and procedure, and appellate restraint is especially desirable in complex cases like this which are being case managed.[18]

9 The law as to the common law defence of fair comment is also tolerably clear and, for present purposes, was accurately summarised by the judge as follows:

(1) It is for the jury, or the tribunal of fact at trial, and not the judge, to decide whether the publication, complained of by the plaintiff, constitutes a statement of fact or an expression of opinion.

(2) A judge may only strike out a defence of fair comment or (at trial) take that defence away from the jury, if the publication complained of could not reasonably be regarded by the jury, or tribunal of fact, as constituting comment by the writer.

(3) A statement may be regarded as an expression of opinion, and not an allegation of fact, '... if it appears to be a deduction, inference, conclusion, criticism, judgment, remark or observation come to by the writer or speaker from facts stated or referred to by him, or in the common knowledge of the person writing or speaking and those to whom the words are addressed, and from which his conclusion may reasonably be inferred'.

(4) In order to qualify as comment, the publication complained of must be reasonably capable of being understood, by the ordinary reasonable reader or listener, as constituting the expression of the writer's opinion, and not an allegation of fact by the writer. For that purpose, the opinion or comment, relied on by the defendant, must not be so mixed up or intermingled with allegations of fact in the publication, that the reader or listener cannot readily distinguish between what is an assertion of fact and what is an expression of opinion by the publisher.[19]

10 As his Honour remarked, it is important to bear in mind that the relevant test is not whether the writer intended to convey his or her opinion, but rather whether the ordinary reasonable reader of the published matter would understand it to be an expression of the writer's opinion.[20]

11 This application for leave to appeal is, however, complicated by differences between the way in which the application was conducted below and the way in which the applicants seek to conduct it on appeal.

The way in which the application was argued below

12 When the matter was before the judge below, counsel for the applicants submitted that:

[I]nsofar as the ordinary reasonable reader might understand the article to [convey any of the imputations, other than that alleged in paragraph 6(a)(3)], the reader must deduce or infer those meanings from the facts stated in the article. Thus, ... the imputations pleaded in the [subject] paragraphs of the statement of claim are necessarily the result of deductions or inferences drawn by the reader, and, as such, are expressions of opinion, not statements of fact.[21]

13 In other words, the argument then advanced on behalf of the applicants was as simple - and, as will be seen, illogical - as that:

Comment consists of deduction.
The alleged imputations may only be derived by a reader by a process of deduction.
Therefore, the alleged imputations must be comment.

14 Not surprisingly, the judge rejected the argument, thus:

[T]o postulate that an imputation may derive from a publication by a process of implication or inference by the reader or listener of the publication, is not to say that the imputations, thus derived, were understood by the ordinary reasonable reader or listener as the comment or opinion of the publisher. That is, there is an important distinction between inferences or implications by the hypothetical ordinary reasonable reader of the publication complained of, on the one hand, and, on the other hand, an understanding by the ordinary reasonable reader of the publication that imputations, pleaded by a plaintiff, were conveyed to that reader as the opinion or comment of the writer of the articles. That distinction is particularly important, bearing in mind the principle, which I have earlier stated, that to qualify as comment, the publication must clearly identify the allegation, complained of by the plaintiff, as the deduction, opinion or conclusion of the writer. In my view, the submissions on behalf of the [applicants] largely ignore that distinction, and thus confuse and conflate the inferential processes undergone by the ordinary reasonable reader, with the proposition that the imputations, pleaded by the [respondent], constitute opinions or comments understood to be conveyed by the writer of the articles.[22]

15 The application for leave to appeal is also complicated by the fact that, with the one exception already mentioned, the applicants accepted below that there was nothing in any of the articles capable of identifying the alleged imputations as statements of opinion as opposed to statements of fact. Subject to the one exception mentioned, the applicants' argument at that stage consisted solely of the contention that, because the alleged imputations could only be derived by a reader by a process of deduction or inference, the imputations had to be in the nature of comment.

16 The judge, therefore, determined the application (as it was then presented to his Honour), thus:

It was not submitted on behalf of the defendants that the first article contained any express opinion or comment....

There is nothing in the first article which would identify the imputations, pleaded in paragraph 6(a)(1), (2), (4) and (5) of the statement of claim, to constitute the opinion or comment of the writer of the article. Rather, if those imputations are accepted by a jury, they will be held to constitute the "sting" or underlying meaning of the article as understood by the ordinary reasonable reader of it. The imputations themselves are essentially factual. Accordingly, in my view, there is nothing about the article, or the imputations, which would entitle a jury to reasonably conclude that those imputations were comments or opinion conveyed by the publishers of the first article. For those reasons, I do not consider that a jury could reasonably conclude that any of those imputations were capable of constituting comment by the writer.[23]

17 The one exception mentioned concerned imputation pleaded in paragraph 6(a)(6) of the Statement Claim[24] which, as pleaded, was alleged to derive from a section of the first article which stated that:

The father of two is viewed by those who have had professional dealings with him as having a violent temper, acting like a commercial thug, and 'a man with eight different personalities'.

18 Counsel for the applicants argued below that the participle 'viewed' in that passage was capable of conveying to the reader that the manner in which the respondent was described was simply the opinion of those persons who were referred to in the publication as having had professional dealings with the respondent.

19 The judge rejected that contention too. His Honour said that:

In my view, no reasonable jury could construe that passage as an expression of opinion, as distinct from an allegation of fact. The allegations contained in that passage are basically factual. The use of the phrase 'is viewed' would not be reasonably capable of leaving open a finding by a jury that the imputation constituted an expression of opinion conveyed by the article. Further, and in any event, the article does not identify, or refer to, any facts on which the alleged 'opinion' is based. For those reasons, I do not consider that the imputation pleaded in paragraph 6(a)(6) of the statement of claim is capable of being considered by the jury to constitute comment or opinion, which might be the subject of a fair comment defence.[25]

20 The argument which the applicants now seek to put is different to their argument below in the following respects:

They no longer contend that it necessarily follows from the fact that an imputation can only be derived by deduction or inference that the imputation is comment. Now, they seek to contend instead that, if the imputations alleged in this case would have carried to the ordinary reasonable reader, they would have been perceived by the reader as deductions or inferences drawn by the publisher from facts stated in the publication, and thus as imputations of comment.

They no longer accept that, apart from the one exception mentioned, there was nothing in the articles capable of identifying the alleged imputations as statements of opinion as opposed to fact. Now they seek to contend instead that there were two passages in the first article which would or at least arguably could assist the reasonable reader to infer that, insofar as any of the imputations may have been conveyed, the imputation was 'a deduction or inference come to by the writer from the other facts set out in the article'. The two passages relied upon are:

The exact reasons for the transactions are unknown, ...

The Herald Sun has pieced together the strong association between X and Mr Buckley.'[26]

21 In relation to the imputation pleaded in paragraph 6(a)(6) of the Statement of Claim, the applicants continue to rely on the statement in the first article that:

The father of two is viewed by those who have had professional dealings with him as having a violent temper, acting like a commercial thug, and a 'man with eight different personalities'.

Application to be decided on the basis of the applicants' new argument

22 The respondent opposes the applicants' change of argument and contends that it would be unfair to permit such a change for the first time on appeal. But senior counsel for the respondent frankly and fairly conceded that the change would not be productive of any prejudice which could not be met by an appropriate order for costs. We propose, therefore, to deal with the application on the basis of the applicants' newly formulated argument.

(i) First article - Imputation in paragraph 6(a)(1)

23 We start with the imputation alleged in paragraph 6(a)(1) of the Statement of Claim, that:

The plaintiff was illicitly and criminally involved in the activities of X,[27]

to which the defence of fair comment as pleaded was confined to the imputed proposition that Mr Buckley's alleged activities were engaged in illicitly and criminally, thus:

With respect to the meaning set out in [paragraph 4(a)(1) above], insofar as the first or fourth articles conveyed a meaning that the plaintiff's involvement in the activities of X were 'illicit and criminal' then such meaning was conveyed as a matter of comment or opinion.

24 In the way in which the matter has now been argued, the question is whether, if the effect of the first article was to characterise Mr Buckley's alleged conduct as having been engaged in 'illicitly and criminally', there was there anything about the article which identified that characterisation of the conduct as an expression of opinion as opposed to a statement of fact.

25 Based upon the applicants' new argument, it appears to us that there were four possible indications of that kind. The first is that the words 'illicitly and criminally' do not appear anywhere in the first article. They can only be arrived at by a process of inference drawn from the facts stated in the article and, arguably, so much would be apparent to a reader of the article.

26 As has been seen, a comment can be made by stating a value judgment or stating a fact if it is apparent to the reader that it is a deduction derived from other facts.[28] Parity of reasoning implies that an imputation of fact or value judgment may be perceived of as a comment if it is apparent to the reader that the imputation is a deduction or inference derived from other facts. Consequently, inasmuch as the absence from the article of the words 'illicitly and criminally' may have made it apparent to the ordinary reasonable reader of the first article that the words 'illicitly and criminally' could only be arrived at by a process of inference drawn from the facts stated in the article, we think that the absence of those words from the article was reasonably capable of being a significant, although of course not determinative, indication that the imputation was a comment.

27 Secondly, the words 'illicitly and criminally' are intrinsically judgmental. To say of an act that it is 'illicit' is to convey that it is improper, and by and large the assessment of impropriety requires an element of judgment. Similarly, to pronounce an act 'criminal' is to suggest a process of decision or conclusion as to its criminality deduced from something else. The point may not be as strong in the case of something characterised as 'criminal' as it is with something characterised as 'illicit'. To some extent, 'criminality' conveys the idea of a contravention of the criminal law, and thus it may connote an objectively established contravention of the law as opposed to contravention of the more pendulous and subjective notions of 'impropriety'. But the idea of judgment is implicit in both 'illicit' and 'criminal' and the use of the hendiadys tends to colour each term with the qualities of the other.

28 Thirdly, as appears from the judge's reasons,[29] the only facts stated in the article from which the alleged imputation was capable of being derived were that:

Buckley made payments of large amounts of cash to X.

Buckley handed over those moneys in brown paper bags.

The moneys were sourced, not from franchises but from Buckley's own business outlet.

The fact that X's attendance at Buckley's premises was camouflaged by a bogus contract between the parties.

29 It follows that the effect of the allegation made in paragraph 6(a)(1) of the Statement of Claim was that a reader of the first article would infer from those stated facts that the publisher of the first article intended to convey that the payments were illicit and illegal or, perhaps more precisely, were made for purposes which were illicit and illegal and, therefore, were made illicitly and illegally.

30 As the applicants now contend, however, a reader of the first article was also presented in the article with the express statement of fact that: 'The exact reasons for the transactions are unknown, but it is estimated about $1 million passed to X'. Arguably, therefore, readers of the first article were on notice that any imputation that the payments were made illicitly and illegally could logically have been no more than a conclusion to which the publisher of the article had come on the basis of the facts alleged - an inference or evaluation or judgment which the publisher had derived or inferred from the stated facts - and thus was a comment.

31 Fourthly, there is the statement in the first article that 'the Herald Sun has pieced together the strong association between X and Mr Buckley'. On one view of the matter, that suggests that the publisher may not have known all the facts concerning the relationship - and so could not say as a fact that the payments were improper - but rather had formed an opinion as to their illegality or impropriety as a result of drawing an inference from the facts which were stated.

32 We do not overlook that the question of whether the alleged imputation is to be characterised as one of fact or opinion is to be decided according to whether the ordinary reasonable reader of the first article would understand it as an implication of fact or opinion. As Gummow, Hayne and Heydon, JJ explained in Channel Seven Adelaide v Manock:[30]

The question of construction or characterisation turns on whether the ordinary reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' - not 'an exceptionally subtle' recipient or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at.

33 Nor do we suggest that an ordinary reasonable reader of the Herald Sun newspaper would consciously undertake the sort of analysis of the text that we have endeavoured to set out in the preceding paragraphs. Such conclusions as a reader of that kind might draw from the first article would likely be very much a matter of overall impression derived from a once-over-lightly assessment of the contents.

34 But as has been seen, the question for present purposes is not whether such a reader would judge the implication to be one of fact or opinion, but simply whether the imputation is one which a jury might reasonably conclude would be construed by an ordinary reasonable reader as one of opinion. And logically, the fact that indicators of opinion can be identified by a process of hermeneutic exposition implies the existence of a reasonable possibility that those indicators may have operated subconsciously on the mind of the ordinary reasonable reader.

35 Finally, on this point, we add the observation of Kirby J in Channel Seven v Manock that:[31]

Part of the process of judgment and evaluation[32] involves a recognition of the great importance which the defence of fair comment affords to the enjoyment of comparatively free expression of opinions in Australia. Exclusion of the defence of fair comment at an interlocutory stage, in advance of a trial on the merits ... is a most serious step. It deprives a defendant of a most important defence. It is a defence especially significant for a publisher...operating in the public media. It requires a very clear case to warrant sending such a defendant to trial without the opportunity of argument based on that defence. Loss of the defence might happen at trial, when the merits of the case are before ...the jury... That is one thing. Pre-trial exclusion of the defence, effectively as unarguable, is quite another.

36 In our view, once it is seen that there was an express statement in the article that the exact reasons for the transaction were not known, and a statement that the publisher had had to piece together the relationship, it is reasonably arguable that a jury could find that the imputation alleged in paragraph 6(a)(1) of the Statement of Claim was a statement of opinion.

37 Counsel for the respondent pressed upon us the alternative argument that the words: 'the exact reasons for the transactions are unknown', might be taken to imply that all that the publisher could do was state the facts without commenting on the reasons for the transactions, and that the words 'the Herald Sun has pieced together the strong association between X and Mr Buckley' might be taken to mean that the Herald Sun had pieced together factual matter evidencing a strong association between the two men. Counsel also emphasised, repeatedly that, in order for something to pass as a fair comment, it must appear clearly as comment and not be so mixed up with the facts that the reader or listener cannot distinguish between

37 what is report and what is comment.[33]

38 But accepting that there is that alternative argument and that, at the end of the day, a publisher must make clear what is intended to be taken as comment as opposed to fact, it is not without significance that most if not all of the learning on the need for clarity in separation between fact and opinion arises out of cases where a putative comment has been expressly set out in a publication among a number of statements of fact, or where a defence of fair comment has been taken to an alleged imputation pleaded in terms which track fairly closely the words of a statement actually made in the publication. Hence, the sense of well known aphorisms like the statement of Cussen J in Clarke v Norton[34] that, if a person mixes up fact and comment, he runs the risk of a jury saying in general to a defamatory statement that it would reasonably infer it to be a statement of fact.

39 This case is unusual in that the alleged imputations are pleaded in terms which are substantially different to the terms of any statement actually made in the publication and are pitched at a level of abstraction significantly higher than that of any statement actually made in the publication. We were not referred to any other case in which imputations have been pleaded in terms and at a level of abstraction so far removed from the statements actually made in a publication, still less to any other case in which it has been necessary for a court to consider the degree of clarity required to distinguish between fact and comment in relation to imputations of this kind.

40 Bearing in mind that it is for the jury and not ordinarily for a judge upon an interlocutory application to determine whether an imputation is fact or opinion, and that a judge should not take the question away from the jury, or strike out a pleading of fair comment, unless the imputation is not reasonably capable of being regarded as opinion,[35] it seems to us that we should be most hesitant to deprive a defendant of a defence of fair comment to imputations of the type alleged in paragraphs 6(a)(1).

41 Counsel for the respondent submitted that so to conclude would be to throw 'the defamation world' on its head by saddling the jury with an intractable burden of attempting to draw high level intellectual distinctions between the factual sting of a publisher's factual statements and implicit conclusory comments deduced or inferred by the publisher from those factual statements. In counsel's submission, the task of juries in defamation proceedings is already sufficiently complex without facilitating developments of that kind.

42 If, however, that is the consequence of allowing the question to go to the jury, it seems to us that it is a problem of the respondent's own making. For in the absence of any authoritative guidance, and therefore approaching the matter on the basis of principle, we take the view that, if a plaintiff chooses to put his case on the basis of imputations so far diverging from the terms and level of abstraction of any statement actually made in a publication, it is only fair that the defendant should be entitled to have the jury consider whether imputations so removed from the text could be anything other than a deduction or inference drawn by the publisher from the statements actually made in the publication. Where a plaintiff wishes to avoid the jury being taxed with intellectual demands of that kind, the remedy is to plead imputations in terms and at a level of abstraction which more closely accord with the terms of publication.

43 In the result, although the judge was not in error in dealing with the matter in the way in which it was presented to him, it appears to us in light of the applicants' new argument that the defence of fair comment to the imputation pleaded in paragraph 6(a)(1) of the Statement of Claim should not have been struck out.

(ii) First article - Imputation in paragraphs 6(a)(2), (4) and (5)

44 We go next to the imputation alleged in paragraph 6(a)(2) of the Statement of Claim:

The plaintiff made secret and illicit payments totalling about one million dollars in cash to X,[36]

to which the defence of fair comment pleaded was that:

With respect to the meaning set out in [paragraph 6(a)(2) above], insofar as the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit' then such meaning was conveyed as matter of comment or opinion.

45 It is convenient to deal at the same time with the imputation pleaded in paragraph 6(a)(4) of the Statement of claim:

The plaintiff concealed illicit and illegal payments to X through false contracts,

to which the defence of fair comment pleaded was that:

With respect to the meaning set out in [paragraph 6(a)(4) above], if the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit and illegal' then such meaning was conveyed as a matter of comment or opinion,

and the imputation pleaded in paragraph 6(a)(5) of the Statement of Claim:

As part of the plaintiff's illicit and improper dealing with X, the plaintiff acquired X's property at gross under value,

to which the defence of fair comment pleaded was that:

With respect to the meaning set out in [paragraph 6(a)(5) of the Statement of Claim], if the first or fourth articles conveyed a meaning that the payments made by the plaintiff to X were 'illicit and improper' then such meaning was conveyed as a matter of comment or opinion.

46 In our view, similar reasoning applies in each of these cases as to the defence of fair comment pleaded to the imputation alleged in paragraph 6(a)(1) of the Statement of Claim. Indeed, it may be that because of the express statement in the first article that the exact purpose of the payments was not known, and because the imputations alleged in paragraphs 6(a)(2), (4) and (5) are expressly or implicitly tied to the nature and thus the purpose of the payments, the applicants are on stronger ground here than in relation to the imputation alleged in paragraph 6(a)(1).

47 More precisely, in our view it is reasonably arguable that, because of the express disclaimer of knowledge of the exact purpose of the payments, it would have been apparent to the reader that the publisher could not have known that the payments were for an illicit or illegal purpose and, if so, that any imputation to the effect that the payments were for an illicit or illegal purpose would carry to the reader as a conclusory expression of opinion derived by a process deduction or inference from the facts stated.

48 Once again, therefore, although the judge was not in error in dealing with the matter in the way in which it was presented to him, it now appears to us on the basis of the applicants' new argument that the defence of fair comment to the imputations pleaded in paragraphs 6(a)(2), (4) and (5) of the statement of claim should not have been struck out.

(iii) First article - Imputation in paragraphs 6(a)(3)

49 The position in relation to the imputation pleaded in paragraph 6(a)(3) of the Statement of Claim is different. As pleaded the imputation is that:

The plaintiff, as a close friend of X, acted as a stooge for X's ownership of the racehorse E,

to which the defence of fair comment pleaded was that:

Further, if the first or fourth articles conveyed the meanings set out in [paragraph 6(a)(3)] and the second article conveyed the meaning set out in [paragraph 6(b)(2)] then such meaning [was] conveyed as a matter of comment or opinion.

50 The judge struck out that defence on the basis that:

The imputation itself is couched as a factual allegation. It is not expressed as an opinion or deduction of the writer of the article. Rather, it is expressed as the sting or imputation conveyed to the ordinary reasonable reader by facts stated in the article. As the authorities, to which I have referred, make plain, the onus lies on the publisher to identify the comment or opinion which is sought to be defended as fair comment.[37]

51 With respect, we agree with his Honour that the ordinary reasonable reader of the first article would not understand the imputation to be an expression of opinion.

52 Admittedly, as the judge said, there was not an express statement in the first article that Mr Buckley acted as a stooge for X's ownership of the racehorse E. Consequently, if that meaning were to be discerned from the article it could only be discerned by a process of inference based on the facts stated and photographs presented in the article. And in principle, as has been explained, that might be taken as an indicator that the imputation had been derived and was a comment.

53 But, relevantly, the facts stated in the first article were these:

Exclusive: Horse tycoon's cash trail to X.

X's $1mil mate.

Car care tycoon Sean Buckley - owner of champion international racehorse E - handed about $1 million in cash to X in a series of weekly payments.

Mr Buckley has always claimed he had an innocent relationship with X.

He denied the latest allegations as 'entirely false and without foundation' in a letter from his lawyers.

But the Herald Sun can reveal the pair had a close financial and social association lined by their love of horse racing.[38]

X, who is banned from race-courses, has been suspected of disguising his ownership of racehorses by registering them in the names of friends and business associates.

E, a winner at Royal Ascot, is in Hong Kong for Sunday's $2.2 million International Sprint.

54 There were also three photographs presented in the article, which apparently were intended to illustrate the propositions just set out: one of X with a caption under it reading: 'Above X and right, Sean Buckley with E'; then, next to that, a photograph of Mr Buckley apparently leading E by a halter; and then, on the next page, one of Mr Buckley with two other people with a caption underneath it reading: 'Toffs for the day: Sean Buckley (centre) celebrates E's win at Royal Ascot in England this year'.

55 In our view, if those stated facts and photographs conveyed the imputation that Mr Buckley owned E on behalf of X, the imputation would undoubtedly have presented to the ordinary reasonable reader as an imputation of fact.

56 Counsel for the applicants argued that the express statement that the Herald Sun had 'pieced together' the relationship between X and Mr Buckley was just as much an indicator that the publisher did not know that Mr Buckley's relationship extended to him acting as a stooge for X's ownership of E (and so could do no more than draw that conclusion as a matter of deduction or inference from the facts stated), as it was an indicator that the publisher did not know the cash payments were made for criminal and improper purposes (and so could do no more than draw that conclusion as a matter of deduction or inference from the facts stated).

57 But there is a difficulty with that submission in this context, in that the imputation here is pleaded in terms of fact as opposed to the sort of judgmental conceptions of criminality and impropriety adopted in paragraphs 6(a)(1), (2) and (4). Additionally, whereas in relation to paragraph 6(a)(1) the statement as to having pieced the relationship together had to be read together with the statement as to not knowing the exact purpose of the cash payments, and the latter provides a logical basis for conclusion that any imputation as to the payments being for an illegal purpose had to be deductive comment, the statement as to not knowing the exact purpose of the payments does nothing logically to undermine the apparent certitude of the imputation that Mr Buckley owned the horse E on behalf of X, and there is no statement in the article disclaiming knowledge of whether Mr Buckley owned E on behalf of X.

58 Finally, on this point, the words 'the Herald Sun can reveal [that] the pair had a close financial and social association' appear to us to be calculated to convey the impression that the imputation that Mr Buckley owned the horse on behalf of X was an imputation of fact of which the publishers knew and so could reveal.

59 In the result we do not consider that the judge's order striking out the fair comment defence to paragraph 6(a)(3) of the statement of claim is attended by sufficient doubt to warrant the grant of leave to appeal.

(iii) First article - Imputation in paragraphs 6(a)(6)

60 We turn to the defence of fair comment to the imputation pleaded in paragraph 6(a)(6) of the statement of claim. As pleaded the imputation is that:

The plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug,

to which the defence of fair comment pleaded was that:

Further, if the first or fourth articles conveyed the meanings set out in [paragraph 6(a)(6)] and the second article conveyed the meaning set out in [paragraph 6(b)(2)]thereof then such meaning [was] conveyed as a matter of comment or opinion.

61 In concluding that that defence should be struck out, the judge said this:

The sixth imputation pleaded in respect of the first article, to which the defendant has pleaded fair comment, is contained in paragraph 6(a)(6) of the statement of claim, namely, that 'the plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug'. That imputation is pleaded as deriving from the section of the first article which states:

The father of two is viewed by those who have had professional dealings with him as having a violent temper, acting like a commercial thug, and 'a man with eight different personalities'.

[Counsel for Buckley] submitted that the use of the verb 'viewed' by the writer is capable of conveying, to the reader, that the description of the plaintiff in that passage constituted the opinion of the person quoted by the article. In my view, no reasonable jury could construe that passage as an expression of opinion, as distinct from an allegation of fact. The allegations contained in that passage are basically factual. The use of the phrase 'is viewed' would not be reasonably capable of leaving open a finding by a jury that the imputation constituted an expression of opinion conveyed by the article. Further, and in any event, the article does not identify, or refer to, any facts on which the alleged 'opinion' is based. For those reasons, I do not consider that the imputation pleaded in paragraph 6(a)(6) of the statement of claim is capable of being considered by the jury to constitute comment or opinion, which might be the subject of a fair comment defence.[39]

62 With respect, we agree with his Honour. The article does not identify or refer to any facts on which the alleged 'opinion' is based. There is also a more fundamental problem that the reported 'view' that Mr Buckley is like a man with eight personalities is expressly attributed to those persons who have had professional dealings with him. The statement that such people so view Mr Buckley is a statement of fact that such people regard him in that manner. It does not say or imply anything about the opinion of the publisher.

63 In the result, we do not consider that his Honour's order striking out the defence of fair comment to the imputation pleaded in paragraph 6(a)(6) of the Statement of Claim is attended by sufficient doubt to warrant the grant of leave to appeal.

64 We go to the second article, in respect of which the imputations pleaded are:

The plaintiff was guilty of fraud, theft and obtaining property by deception;
The plaintiff is involved in illegal business activities.

The defence of fair comment is confined to the second of those imputations, as follows:

If the ...second article conveyed the meaning set out in [paragraph (b)], ... then such meaning [was] conveyed as a matter of comment or opinion.

65 In striking out that defence, the judge said this:

As I have stated, the second imputation pleaded by the plaintiff, as deriving from the second article, is that the plaintiff is involved in illegal business activities. It is to that imputation that the defendants have directed their defence of fair comment. In my view, if the article conveyed the second imputation pleaded by the plaintiff, a jury could not reasonably conclude that that imputation constituted an expression of opinion or comment by the writer of the article. The second article, by its terms, is entirely factual. The imputation itself is factual. The article does not expressly allege that the plaintiff is involved in illegal business activities. If that imputation derives from the second article, it would constitute, again, an impression, implication or inference derived from the article by the ordinary reasonable reader. However, it would be by that process that the ordinary reasonable reader understood the article to be alleging that the plaintiff is involved in illegal business activities. That proposition is not stated, or identified, in the article as the opinion of the writer. Rather, if the imputation derives from the article, it constitutes the factual sting conveyed by the various facts, contained in the article, on which the plaintiff relies. For those reasons I do not consider that a jury could reasonably conclude that the imputation pleaded by the plaintiff (if it derives from the second article) constituted an expression of opinion or comment by the defendants, so as to provide the foundation to the defendants of a fair comment defence in respect of it.[40]

66 As the judge observed, the second article was in terms entirely factual. It did not expressly allege that Mr Buckley was or had been involved in illegal business activities. But it stated that he was in Hong Kong waiting for E's big race and that:

['he] must be experiencing a feeling of déjà vu.

It was from the former British protectorate that [he] was brought back to Australia to face 29 charges of defrauding two stockbroking firms of more than $500,000.

That was in 1990, and the Melbourne Magistrates' Court was told that Mr Buckley had allegedly traded in credit using false names to open and operate accounts with stockbroking firms.

He was sent for trial in the County Court where he was given a two-year good behaviour bond after pleading guilty to unlicensed securities dealing

He had pleaded not guilty to counts of theft, obtaining property by deception, and fraudulently inducing a person to deal in securities.

Fifteen years later, Mr Buckley again found himself in court.

This time it was in the NSW Supreme Court as a prosecution witness in the kidnap-murder trial of the notorious Bruce Burrell, a one-time business associate of Mr Buckley.

67 There was then a description of Burrell's crimes, and criminal proceedings against Burrell in which Mr Buckley had been called as a Crown witness, including reference to the fact that Burrell had been found guilty of murdering Kerry Whelan and awaited sentence, and that a previous sentencing judge had described Burrell as a 'cold remorseless killer'. The article then continued:

Mr Buckley's association with Burrell came to light when NSW detectives found a copy of an affidavit Burrell had written, indicating he had given evidence in an impending court dispute over the ownership of UltraTune.

68 That was followed in the article by a report of evidence given by Mr Buckley to the effect that he was a director of UltraTune and in late 1996 or early 1997 Burrell had asked for a letter to support a loan application, which Mr Buckley had refused to provide because Burrell was not an employee; and that when Mr Buckley had asked Burrell to make a statutory declaration in connection with civil proceedings concerning UltraTune, Burrell had demanded $15,000 which Mr Buckley had refused to pay.

69 The effect of all that, as the judge said, was that, if the second article conveyed the imputation alleged, namely, that Mr Buckley was involved in illegal business activities, it could only be by reason of a process of deduction - presumably, along the lines that, because Mr Buckley had previously been charged with theft, obtaining property by deception, and fraudulently inducing a person to deal in securities; had pleaded guilty to unlicensed securities dealing; and had once been associated with the 'notorious Bruce Burrell', Mr Buckley was deduced to be 'involved in illegal business activities'. Nevertheless, if the imputation derived from the article, it constituted the factual sting conveyed by the various facts contained in the article, and, without some indication that the imputation as so derived represented an expression of opinion, a jury could not reasonably conclude that the imputation thereby conveyed constituted an expression of opinion.

70 With respect, we agree with the judge. The second article is in terms entirely factual. Mr Buckley claims that the second article, discretely considered, conveyed the pleaded imputation. He alleges, in substance, that the article's reference to past facts pertaining to his business activities and to his contact in different ways with the criminal justice system carried the imputation that he was presently engaging in illegal business activities. The defence relevantly responds to Mr Buckley's claim by focusing upon the second article, pleading that, if the particular imputation were conveyed, it was conveyed as comment. That being the state of the pleadings, there is no occasion to consider whether, by reference to one or more of the other articles, the imputation, if conveyed, might arguably be regarded as comment. The pleadings invite consideration of the second article, entire in itself[41] and, as they stand, reflect the freestanding content of the article.

71 The situation here is thus unlike that arising in respect of some of the imputations which Mr Buckley pleads were conveyed by the first article; for in that case, there was arguably an indication within the article that, if those particular imputations were conveyed, they were conveyed as comment.

72 The situation here is also unlike that arising in respect of the fourth article; for, although there was nothing in the text of the fourth article to suggest that, if the three pleaded imputations were conveyed, they were conveyed as comment, the fourth article had a block insert of the banner headline of the first article; and it recapitulated, making specific reference to that article, certain of the allegations made therein. As will later be seen, it thereby drew attention to the first article - within which there was material arguably intimating that, if the three pleaded imputations common to the first and fourth articles were conveyed, they were conveyed as comment.

73 It is true that the second article, in common with the first article, referred to Mr Buckley's ownership of E. But it did so to set the scene for the revelation that (as the article alleged) Mr Buckley had been brought back to Australia from Hong Kong years before to face fraud charges. It is also true that there was fleeting reference in the first article to that past alleged criminal conduct and, arguably, it may have carried to the mind of a reader of the second article. Nonetheless, the allegations of fact detailed in the second article raised and developed matters which were essentially different in time and subject-matter to the content of the first, third or fourth articles; and the relevant imputation is not pleaded in respect of those other articles.

74 In our opinion, if the relevant imputation was conveyed by the second article, it was unarguably conveyed as an assertion of fact, albeit fact unstated. Nothing in the second article was sufficient to identify it as comment and, as the pleadings stand, there is no basis to look for such an indication beyond the second article. The circumstance that, if the imputation was conveyed, it would be the reader's deduction from facts stated, does not tell to the contrary.

75 We come last in this section of the matter to the fourth article, and hence to the third imputation pleaded in paragraph 10(3) of the statement of claim:

The plaintiff concealed illicit and illegal drug payments to X through false contracts.

insofar as the fourth article conveyed a meaning that the payments made by the plaintiff to X were 'illicit and illegal' then such meaning was conveyed as a matter of comment or opinion.

76 The judge struck out that defence on the basis, he said, that:

In essence, the third imputation pleaded by the plaintiff derives, substantially, from the same facts in the fourth article, which were the basis of the same imputation alleged to have derived from the first article. There is nothing in the fourth article which identifies the imputation as an expression of the writer's opinion, or as the result of a process of deduction undertaken by the writer of the article. Rather, if the imputation derives from the fourth article, it would constitute the result of a process of construction, of the type of which I have already described, undertaken by the ordinary reasonable reader of it. For the same reason which I have stated for rejecting the defence of fair comment in respect of the imputation contained in paragraph 6(a)(4) of the statement of claim, in my view a jury could not reasonably conclude that the ordinary reasonable reader of the article would understand that the imputation, pleaded in paragraph 10(3) in respect of the fourth article, constituted a comment by the writer of the article.[42]

77 With respect, we disagree. As we see it, the issues here are the same as those which apply to the defence of fair comment pleaded to paragraph 6(a)(4), except that there is no express statement in the fourth article, as there was in the first article, to the effect that the exact reasons for the transactions were unknown. The fourth article, however, referred back to the first article, as follows: 'Yesterday, the Herald Sun reported that Mr Buckley had paid X about $1million in cash payments', and in our view that reference was arguably sufficient to incorporate the denial of knowledge of the purpose of the payments into the known facts for the purposes of the fourth article. As Gleeson, CJ noted in Channel Seven Adelaide v Manock,[43] although the reader must be able to identify the facts on which a comment is based, it is not necessary that the facts be stated in the terms of the communication itself. It is enough if the facts are:

'... sufficiently indicated or notorious to enable persons to whom the defamatory matter is published to judge for themselves how far the opinion expressed in the comment is well founded'.[44]

78 For similar reasons to those which we have given with respect to the defence of fair comment pleaded in relation to the imputation alleged in paragraph 6(a)(4) of the Statement of Claim, we think it fairly arguable that an ordinary reader of the fourth article would understand that the supposed imputation of illicitness and illegality was deductive and therefore comment in the relevant sense.

79 Finally on the question of fair comment, counsel for the applicants sought to withdraw a concession made below, that the defence of honest opinion afforded by s 31 of the Defamation Act 2005 was not relevantly different to the common law defence of fair comment, and submitted that, even if the common law defence of fair comment pleaded in answer to the imputation alleged in paragraph 6(a)(6) of the Statement of Claim was properly struck out, the defence of honest opinion afforded by s 31(1) of the Act and pleaded in answer to that imputation in paragraph 17 of the Defence is available and should not have been struck out.

80 Section 31(1) of the Act provides that:

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

proves that-

(a) the matter was an expression of opinion of the defendant rather than a statement of fact; and

(b) the opinion related to a matter of public interest; and

(c) the opinion is based on proper material.

81 Counsel contended that, whereas under the common law defence of fair comment a defendant must show that the alleged defamatory imputation was an expression of opinion, under the statutory defence it is necessary for a defendant only to show only that the 'defamatory matter' was an expression of opinion. Thus, in counsel's submission, while a common law defence of fair comment is liable to be struck out if it fails to meet or to meet substantially the alleged imputation in answer to which it is pleaded, a defence under s 31 does not need to meet the pleaded imputations and so will not be struck out for failing to do so.

82 In our view, that submission is beside the point. It may be (although for present purposes it is unnecessary to decide) that a s 31 defence does not need to meet the imputation in answer to which it is pleaded. But whether or not a defence under s 31 must meet an alleged imputation, the defences in this case were not struck out for failing to meet the relevant imputations. In fact, they did meet the alleged imputations. They were struck out because in each case the imputations could not reasonably be conceived of as imputations of comment.

83 Counsel for the applicants further submitted that the distinction between the common law defence of fair comment and the statutory defence of honest opinion was important because as, under the former, all of the facts on which the comment is based must appear in the publication or otherwise be apparent to the reader but, under the latter, it is necessary only to show that the opinion is honestly based on 'proper material' which, according to counsel, need not be known to the reader.

84 We reject that submission for two reasons. First, we do not consider that there is any difference between the common law and the statute as to the need for facts on which a comment or opinion is based to appear in the publication or otherwise be apparent to the reader. The idea of expanding the defence of comment or opinion to cases where the facts are unspecified and unknown was rejected by the Law Reform Commission (on whose report the legislation is largely based),[45] and there is nothing in the Proposal for uniform defamation laws released by the States and Territories in July 2004[46] or in the proposed bill which they released in November 2004, or in the Explanatory Memorandum or Second Reading Speech[47] which suggests any difference in that respect. To the contrary, all the indications are that the two were meant to be the same.

85 Secondly, the applicants have not sought to rely on any facts other than those stated in the articles - the only particulars given under paragraph 17 of the Defence are those given under paragraph 16 - and so, even if it were possible to base a statutory defence of honest opinion on facts not disclosed to the reader (and we do not think it is) it would be nothing to the point in this case.

86 It remains to consider the judge's order refusing further particular discovery.

87 The applicants sought particular discovery of bank statements and original cheque stubs from 3 September 2003 to 31 August 2006 for each of the bank accounts of Buckley and his companies Clarson Holdings Pty Ltd, Ultra Hair Studio Pty Ltd, Ultra Thoroughbred Racing Pty Ltd, Horse Farm Victoria Pty Ltd and Ultra Tune Australia Pty Ltd. The judge refused the application on the basis that those documents:

would not be relevant to the [pleaded issue] whether [Buckley] made cash payments to or on behalf of X in the period referred to in the article ... save and insofar as those documents evidence the payments, referred to [in Buckley's] discovered documents number 4 and 76, made by [Buckley] (or his companies) to or on behalf of X'.[48]

88 The applicants now contend that his Honour's decision is attended by sufficient doubt and productive of sufficient injustice to warrant the grant of leave to appeal because, in their submission, it denies them the documents necessary to test the truth of Buckley's asseveration that the payments identified in his discovered documents numbered 4 and 76 were the only payments made by him to or on behalf of X.

89 In our view, the judge was correct and, with respect, we cannot improve on his Honour's reasons for refusing the application.

90 We add, however, that even if there were any doubt about his Honour's decision (and in our view there is not), we would not be disposed to intervene. An appellate court must exercise particular caution before interfering with an exercise of discretion in relation to a matter of practice and procedure and, whilst it is arguable whether an application pursuant to Rule 29.08 involves the exercise of a discretion, as was said in Bailey v Farrow Mortgage Services Pty Ltd: ' an appeal from an order making or refusing an order under that rule raises the same or similar considerations'.[49] This court will not interfere with an order for or refusing particular discovery unless it is clearly attended by error and productive of substantial injustice and, in this case, the applicants have failed to satisfy us of either requirement.

91 In the result we are disposed to allow the application to appeal in respect of the defences to paragraphs 6(a)(1), 6(a)(2), 6(a)(4), 6(a)(5) and 10(3) of the Statement of Claim. To that extent, we would treat the appeal as instituted and heard instanter and allowed. In lieu of the orders striking out those defences there should be an order that the application to strike them out be dismissed. Otherwise the application for leave to appeal will be dismissed.

[1] Statement of Claim, paragraph 6(a)(1).

[2] Statement of Claim, paragraph 6(a)(2).

[3] Statement of Claim, paragraph 6(a)(3).

[4] Statement of Claim, paragraph 6(a)(4).

[5] Statement of Claim, paragraph 6(a)(5a).

[6] Statement of Claim, paragraph 6(a)(6).

[7] Statement of Claim, paragraph 6(a)(7).

[8] Statement of Claim, paragraph 6(a)(8).

[9] Statement of Claim, paragraph 6(a)(9).

[10] Statement of Claim, paragraph 6(b)(1).

[11] Statement of Claim, paragraph 6(b)(2).

[12] Statement of Claim, paragraph 6(c).

[13] Statement of Claim, paragraph 10(1).

[14] Statement of Claim, paragraph 10(2).

[15] Statement of Claim, paragraph 10(3).

[16] Statement of Claim, paragraph 10(4).

[18] Bank of New Zealand v Spedley Securities Ltd (in liq) (1992) 27 NSWLR 91, 95.

[19] Reasons, [8]. Citations omitted.

[24] 'The plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug'.

[26] Applicants' written outline of argument, [4].

[28] Channel Seven Adelaide v Manock [2007] HCA 60; (2007) 232 CLR 245, 263 [35].

[31] [2007] HCA 60; (2007) 232 CLR 245, 298[120] in diss, but not in point of principle.

[32] Of whether to strike out an allegation of fair comment.

[33] O'Brien v Marquis of Salisbury [1889] 6 TLR 133: Clarke v Norton [1910] VicLawRp 83; [1910] VLR 494, 506, aff'd on appeal [1911] HCA 4; (1911) 12 CLR 13; Goldsborough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524, 531; Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245, 262[35] (Gummow, Hayne and Heydon JJ).

[35] Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716, 1719[6]; Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 232 CLR 245, 261[33] (Gummow, Hayne and Heydon JJ).

[41] In this respect, the matter is unlike Pervan v North Queensland Newspaper Co Ltd [1993] HCA 64; (1993) 178 CLR 309, 317-318. There it was held that the approach of the trial judge and the Full Court had been erroneous in point of principle. What should have been determined, but was not, was whether words published in response to factual material which was already in the public domain could arguably be characterised as comment.

[43] [2007] HCA 60; (2007) 232 CLR 245, 253[5], citing Pervan v North Queensland Newspaper Co [1993] HCA 64; (1993) 178 CLR 309, 327.

[44] Pervan v North Queensland Newspaper Co, ibid.

[45] The Law Reform Commission Report No. 11, UNFAIR PUBLICATION: Defamation and privacy, AGPS Canberra 1979, [130].

[46] SCAG Working Group of State and Territory Officers, Proposal for Uniform Defamation Laws, July 2004, esp, Recommendation 15; Australian Government Attorney-General's Department, Revised outline of a possible national defamation law, July 2004, 'Honest Opinion', 16-18, and Annexure.

[47] Hansard, Assembly, 7 September 2005, Defamation Bill, Second reading, 633-634.

[49] Unreported, VSCAD 23 August 1994 (Ormiston and Coldrey JJ), BC 946091.

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