Hooper v Phipps

Decision date: 23 April 2020

Jurisdiction: Civil

Before: Gibson DCJ

Decision: (1) Subject to the condition set out in order (2), the plaintiff is granted leave to file a Further Amended Statement of Claim pleading the imputations which are currently pleaded by the defendants as contextual imputations in the defence.
(2) The leave granted in order (1) above is granted on the condition that leave to amend be revoked nunc pro tunc in respect of any imputation proved by the defendants to be substantially true, such that, at trial, the defendants may rely upon any such imputation for the purpose of a defence under s 26 of the Defamation Act 2005 (NSW).
(3) Plaintiff pay defendants’ costs of leave to amend and of this application, with liberty to apply.
(4) These proceedings are stood over for directions only to the Defamation List on 30 April 2020.

Catchwords: TORT – defamation – defence of contextual truth pursuant to s 26 Defamation Act 2005 (NSW) – plaintiff brings application to plead additional imputation and to strike out contextual imputations – application to strike out contextual imputations abandoned – plaintiff brings application to “plead back” defendants’ contextual imputations – defendants consent conditionally upon the preservation of their entitlement to continue to rely upon the contextual truth defence already pleaded – leave granted conditional upon the defendants’ continued preservation of the contextual truth defence

Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56 – 62
Defamation Act 1952 (UK), s 5
Defamation Act 1957 (Tas), s 18
Defamation Act 1974 (NSW), s 16
Defamation Act 1992 (NZ), s 7
Defamation Act 2005 (NSW), s 26
Local Government Act 1993 (NSW), s 440G

Cases Cited: Ange v Fairfax Media Publications Pty Ltd & Ors [2010] NSWSC 645
Application of Willoughby City Council (as manager of the Talus Reserve Trust) & anor [2016] NSWSC 1717
Balzola v Federal Capital Press of Australia Pty Limited (ACN 008 394 063) & Anor [2015] NSWDC 23
Besser v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174
Boikov v Network Ten Pty Ltd; Boikov v Nationwide News Pty Ltd [2017] NSWDC 88
Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369
Chel v Fairfax Media Publications Pty Limited [2015] NSWSC 171
Corby v Channel Seven Sydney Pty Limited (Supreme Court of New South Wales, Nicholas J, 20 February 2008)
Dominello v Harbour Radio Pty Ltd t/as Radio 2GB [2019] NSWSC 403
Elliott v West Australian Newspapers Ltd [2009] HCATrans 153
Fairfax Digital Australia and New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77
Farrow v Nationwide News Pty Ltd [2017] NSWCA 246
Fleming v Advertising-News Weekend Publishing Co Pty Ltd [2010] SASC 255
Greenfield v Fairfax Media Publications Pty Ltd (No 2); Greenfield v Australian Broadcasting Corporation [2015] NSWSC 373
Jones v TCN Channel Nine Pty Ltd (No 3) [2016] NSWSC 922
Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852
Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68
New South Wales v Wraydeh [2019] NSWCA 192
Newnham v Davis (No 2) [2010] VSC 94
Pahuja v TCN Channel Nine Pty Limited [2015] NSWSC 1664
Sharp v Harbour Radio Pty Ltd (No 2) [2016] NSWSC 223
TCN Channel Nine Pty Ltd v Pahuja [2019] NSWCA 166
Willoughby City Council (in its capacity as Manager of Talus Street (R73306) Reserve Trust) [2016] NSWSC 127
Willoughby City Council (as manager of the Talus Reserve Trust) & anor [2016] NSWSC 1935
YZ v Amazon (No 7) [2016] NSWSC 637

Texts Cited: Rolph, D., Defamation Law (Thomson Reuters (Professional) Australia, 2015)
The Hon. J A McGinty MLA, Attorney General, Second Reading Speech, 13 September 2005, Western Australia, State Parliament

Category: Procedural rulings

Parties: Plaintiff: John Hooper
First Defendant: Julia Phipps
Second Defendant: Willoughby City Council

Representation: Counsel:
Plaintiff: Mr D Sibtain / Mr A Edwards
Defendants: Mr A T S Dawson SC / Mr T Senior
Solicitors:
Plaintiff: Spencer & Co Legal
Defendants: RGSLAW

File Number(s): 2019/96207

Publication restriction: None

Judgment

The application before the court

1. These are proceedings for defamation commenced by the plaintiff, an elected councillor of the Willoughby City Council (the second defendant), against that Council and its media and marketing officer (the first defendant). The first of the two publications sued upon is an email sent by the first defendant on 28 March 2018 in response to a query from a journalist employed by the North Shore Times. The second matter complained of is the subsequent North Shore Times article on 11 April 2018, headed “Talus stance led to my censure, claims Cooper”, which is asserted to have “conveyed the sense and substance of the first matter complained of” (paragraph 7 of the statement of claim).

2. The defences pleaded by both defendants include, relevantly for this judgment, the defence of contextual justification pursuant to s 26 of the Defamation Act 2005 (NSW) (also referred to, at relevant times in this judgment, as “the uniform legislation”).

3. The application before the court is the plaintiff’s application for leave to file a Further Amended Statement of Claim appropriating the defendants’ contextual imputations, a procedure generally described as “pleading back” (Rolph, D., Defamation Law (Thomson Reuters (Professional) Australia, 2015) at [9.170]; “Professor Rolph”). The defendants do not oppose the application for leave, provided that it is conditional upon the preservation of their entitlement to continue to rely upon the contextual justification defence under s 26 in the manner reflected in the Defence filed prior to the application to “plead back”. The question for determination, namely whether this leave should be conditional, is not as simple as it sounds; the impact of the Kermode v Fairfax Media Publications Pty Ltd [2010] NSWSC 852, as confirmed in Besser v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174 (“the Kermode decisions”), has led to the practice of “pleading back” having, to use the polite phraseology of Professor Rolph (at [9140] fn 182), “some unintended consequences”.

The submissions and evidence

4. The parties rely upon evidence as well as their oral and written submissions:

(a) The plaintiff relies upon the affidavit of Keith Robert Spencer, the solicitor for the plaintiff, sworn and filed on 26 November 2019. This principally goes to issues of bona fides in relation to the proposed amendments of the statement of claim. He was not required for cross-examination. (b) The defendants rely upon the affidavit of James Bernard Riley, the solicitor for the defendants sworn on 19 February 2020. He was also not required for cross-examination. His affidavit contains information about the factual background the subject of the defences. He sets out that there were two reports commissioned by the second defendant which led to the censure motions referred to in the matters complained of. The first of these is identified as the “Final Klassen Report” (affidavit, paragraph 4), prepared at the request of the second defendant by Ms Wendy Klassen on or about 26 July 2017. The second is the “Final Cripps Report” prepared at the request of the second defendant by Ms Alison Cripps on or about 15 June 2017 (paragraph 7). This factual background relates to a different issue to the content of Mr Spencer’s affidavit (defendants’ submissions, p. 7).

The imputations the subject of the application

5. The plaintiff has pleaded that three imputations arise from each of the matters complained of (“imputations (a) – (c)”). He now seeks leave to appropriate the two contextual imputations pleaded by the defendants (which will then become imputations (d) and (e), to make a total of five imputations.

6. The imputations pleaded by the plaintiff (with the proposed new imputations identified by underlining) would then read as follows:

(a) The plaintiff was censured by Willoughby City Council for serious misconduct.

(b) The plaintiff was censured by Willoughby City Council for serious misconduct in accordance with the recommendations of external and independent investigators.

(c) The plaintiff so seriously misconducted himself as a Councillor of Willoughby City Council that an external investigator recommended that he be censured after conducting an inquiry into the plaintiff’s conduct.

(d) The plaintiff engaged in serious misconduct.

(e) The plaintiff engaged in misconduct of such seriousness that it warranted censure.

7. It is relevant, for this application, to set out that the plaintiff has arrived at this proposed pleading in a three-stage process:

(a) In the statement of claim as initially filed, the plaintiff pleaded only imputations (a) and (b). (b) After the defence of contextual justification (including the contextual imputations set out in imputations (d) and (e) above) was pleaded, the plaintiff sought leave to add imputation (c). The plaintiff at the same time brought an application for the contextual imputations set out in imputations (d) and (e) above to be struck out. By agreement, both these applications were dismissed on the basis that the defendants would agree to the plaintiff being granted leave to plead imputation (c). (c) After this agreement was made and the hearing date for the argument vacated, the plaintiff brought a new application to “plead back”, as imputations (d) and (e), the two contextual imputations pleaded by the defendants.

8. As has been noted in most of the judgments on the “pleading back” procedure, applications of this kind generally turn on the facts of the case. As the factual background to these proceedings in part involves other court proceedings (in the Supreme Court of New South Wales), I have used the terms “Ms Phipps” and “the Council” rather than “the first defendant” and “the second defendant” where appropriate to avoid confusion. I have, however, referred to the plaintiff throughout as “the plaintiff”.

The background to these proceedings

9. The Council commenced proceedings in the Supreme Court of New South Wales (described in the submissions as “the judicial advice proceedings”) raising issues concerning the use of the Talus Reserve at Naremburn. (The relevant facts are set out in a series of judgments (Willoughby City Council (in its capacity as Manager of Talus Street (R73306) Reserve Trust) [2016] NSWSC 127; Application of Willoughby City Council (as manager of the Talus Reserve Trust) & anor [2016] NSWSC 1717 and Willoughby City Council (as manager of the Talus Reserve Trust) & anor [2016] NSWSC 1935).) As the factual dispute is set out in those judgments, I need do no more than note that the plaintiff appeared on his own behalf against the Council at one stage, and was ordered to pay certain costs in circumstances outlined by Brereton J, in two of these judgments.

10. The plaintiff, who was still a councillor at the time, sent an email to a wide range of other councillors and staff in which he accused an officer of the Council of preparing a false affidavit, serving it by ambush and then used it in the Supreme Court to make false claims about the plaintiff. The asserted purpose of this conduct was to mislead the judge hearing the proceedings (Brereton J), so as to gain, unjustly, the costs order his Honour then made against the plaintiff in those proceedings.

11. The Council’s complaint was that, in sending an email making such accusations, the plaintiff had breached the Council’s code of conduct. An external investigator, Ms Klassen, was retained. Submissions were made by the plaintiff and the Council both before and after Ms Klassen’s draft report.

12. The findings of the Klassen Final Report were:

(a) Both the tone and content of the plaintiff’s email were overbearing and threatening towards Council staff and constituted a breach of section 6.7(e) of the Council’s code of conduct. (b) The plaintiff breached the general conduct provisions of this code of conduct because his email contained intimidation, harassment or verbal abuse, and was disrespectful. (c) While not considered to be at the serious end of the scale, the matter was not trivial.

13. The Final Klassen Report was provided to the plaintiff in July 2017. On 7 August 2017, the Council resolved to censure the plaintiff formally under s 440G of the Local Government Act 1993 (NSW) for misconduct.

14. After the draft report, but before being provided with the Final Klassen Report, the plaintiff send a second email, this time to all councillors, accusing two of the councillors (whom he called “despicable”) of carrying out “a political stunt”, engaging in “dirty grubby politics” and questioning whether they “should be on council”. This email (sent on 17 June 2017) was the subject of a second complaint that the plaintiff had breached the Council’s code of conduct. Again, the plaintiff and the Council provided submissions both before and after the draft investigation report (sent on 18 October 2017). The Cripps Final Report found that the plaintiff’s conduct in sending this email was also a breach of the code of conduct, in that it was improper and unethical, as well as being disrespectful of the two councillors he accused.

15. The article in the North Shore Times sets out the background to these issues. The plaintiff is quoted as saying that his censure, which came just before the 2017 Council elections (in which he did not stand), was designed “to drive him from council for pursuing the Talus Reserve row” (paragraph 3). His position was that his apology “should have been the end of the matter”, but that, “two days before declarations for last year’s council elections he was censured by councillors” (paragraph 12). These statements from the plaintiff are followed, in the newspaper article, by the quote from Ms Phipps’ email that “Censures are carefully considered and not taken lightly. They are only pursued in the most serious circumstances” (paragraph 13). Ms Phipps added that the Cripps Final Report recommendation for the plaintiff’s censure came after an inquiry “about [the plaintiff’s] behaviour, not about the [Talus Reserve] issue being discussed” (paragraph 14).

16. The defendants’ contextual imputations plead contextual imputations of a “broader and more serious” nature (defendants’ submissions, paragraph 10). The difference is that, whereas the defamatory sting contained in the plaintiff’s imputations are of having been censured in a report, the contextual imputations are that the plaintiff’s conduct warranted being regarded as serious misconduct, whether or not that was the basis of the report findings and/or censure motions.

The plaintiff brings applications to amend and to strike out the contextual imputations

17. The plaintiff brought an application to plead imputations 5(c) and 12(c), arguing that this new imputation in relation to each publication differed in substance from the other two pleaded imputations, as it would require proof of a “fuller investigation” rather than a “preliminary assessment” (written submissions of 13 September 2019 at paragraph 10). The plaintiff also sought orders that the contextual imputations be struck out. This was a significant step to take, as courts have refused leave to “plead back” where the initial approach taken is to seek to have them struck out rather than adopted. The nature of those submissions is therefore of significance. I particularly note:

“14 Each of those imputations is liable to be struck out. Neither is an imputation pleaded “in addition to” the Plaintiff’s imputations.

15 Each imputation purports to select elements from the Plaintiff’s imputations in an attempt to avoid the burden of proving the remainder of the elements contained in the Plaintiff’s imputations, as a whole. The Defendants seek to avoid the onus of proving true each material part of the Plaintiff’s imputations.

16 In the case of Contextual Imputation I, the Defendants seek to avoid the burden of proving that the Plaintiff was censured for serious misconduct. He was not. The defence of justification to imputation 5(a) and 12(a), and the single particular relied upon, makes it clear that the Defendants rely solely upon a formal resolution of misconduct (as opposed to serious misconduct).

17 Contextual Imputation I is not an imputation pleaded to a higher level of abstraction. Rather, it constitutes a selection of an element from the Plaintiff’s imputation 5(a). It amounts to no more than an attempt to ‘partially justify’ – a defence not available to the Defendants.

18 Contextual Imputation II either constitutes an attempt to rephrase the Plaintiff’s imputation 5(a), which does not differ in substance. Alternatively, it constitutes a lower imputation than the Plaintiff’s imputation 5(a): viz, whilst the Plaintiff’s imputation 5(a) comprises a finding of guilt, the Defendants’ Contextual Imputation II alleges that the conduct warranted a finding of guilt (without proving the conclusion). Notwithstanding the test to be applied to applications of this kind, when compared against the lowest of the Plaintiff’s imputations, the defence of contextual truth must fail in respect of Contextual Imputation II.

19 What is clear from the Defence is that the Defendants will not attempt to prove true a critical sting complained of by the Plaintiff – namely, that external investigators recommended that the Plaintiff be censured. It is one thing to say that one’s political foes (and, potentially, former allies) took action against a counsellor. However, it is another thing altogether to say that an external independent adjudicator investigated the Plaintiff’s conduct and made adverse findings and recommendations.

20 When one compares the contextual imputations with the Plaintiff’s cause of action, it is readily apparent that the Defendants will be unable to defeat all of the stings of which the Plaintiff complains. The critical sting contained in imputation 5(b) (and 5(c), if the amendment is allowed) – that external and independent investigators made certain findings and made certain recommendations concerning the Plaintiff and disciplinary sanctions against him – is a sting which will remain undefended and unchallenged.

21 At trial, the Plaintiff will establish that, in fact, after the conduct of an external investigation, there was no such recommendation by any external investigator. The absence of that recommendation is material to each of imputations 5(b) and, if allowed, 5(c).

22 The Plaintiff submits that the contextual truth defence should be struck out.” (Plaintiff’s written submissions, 13 September 2019; footnotes and observations from the defendants’ discussion of these submissions have been omitted)

18. On 19 November 2019, the plaintiff’s solicitors advised that they proposed to bring an application to “plead back” the contextual imputations. This was accompanied by a draft of the pleading and the affidavit of Mr Spencer, which dealt with what I would call “bona fides” issues (as to the practice of filing such affidavits (New South Wales v Wraydeh [2019] NSWCA 192 at [24] – [30]).

The Kermode controversy

19. Prior to the uniform legislation and its interpretation in the Kermode decisions, the defence of contextual imputation was a significant law reform. Section 26 was initially interpreted in the same way as s 16 of the Defamation Act 1974 (NSW) and not as a defence of partial justification (compare s 5 Defamation Act 1952 (UK)), which had been enacted in Australia as s 18 Defamation Act 1957 (Tas) and in New Zealand as s 7 Defamation Act 1992 (NZ)).

20. The intention of the uniform legislation was to enact “the current law in New South Wales which carries a defence of contextual truth” (the Hon. J A McGinty MLA, Attorney General, Second Reading Speech, 13 September 2005, Western Australia, State Parliament; I note Mr McGinty’s observations were not included in the discussion of second reading speeches set out in the Kermode decisions). The manner in which s 26 was interpreted during the first five years following its enactment confirms this: Elliott v West Australian Newspapers Ltd [2009] HCATrans 153; Fleming v Advertising-News Weekend Publishing Co Pty Ltd [2010] SASC 255 at [38]-[43]; Newnham v Davis (No 2) [2010] VSC 94 at [48]; Ange v Fairfax Media Publications Pty Ltd & Ors [2010] NSWSC 645 at [50]-[52]. On the only occasion that the interpretation later to be raised in Kermode was raised, it was rejected by Nicholas J, the Defamation List Judge in the Supreme Court of New South Wales: Corby v Channel Seven Sydney Pty Limited (Supreme Court of New South Wales, Nicholas J, 20 February 2008) at [13]-[21], a decision apparently considered of such little relevance that is was never published online.

21. However, after the Kermode decisions, it is clear law that evidence of the truth of an imputation pleaded by the plaintiff (as opposed to the defendant) is at best a mitigation issue. Unsurprisingly, plaintiffs confronted by a defence under s 26 quickly discovered that this defence could be defeated by simply seeking to “plead back” such imputations so that they, too, became plaintiff’s imputations. This raised, for the first time, the “unintended” consequence described by Professor Rolph (at 9.140),

22. As this response was “unintended” in the Kermode decisions, the result has been a series of judgments seeking to respond to this tension: Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 and Born Brands Pty Ltd v Nine Network Australia Pty Ltd (2014) 88 NSWLR 421; [2014] NSWCA 369 at [86]. Decisions have at times been internally inconsistent as well (see, for example, the differing approach taken by Meagher JA at [46] and Gleeson JA at [150] to that taken by McColl JA at [21]-[34] in Fairfax Digital Australia and New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77).

23. Mr Sibtain submits that what he calls “the Kermode controversy” has been “quelled” by the refusal of Basten JA, in TCN Channel Nine Pty Ltd v Pahuja [2019] NSWCA 166 at [76], to reconsider the Court of Appeal’s decision (plaintiff’s submissions in reply).

24. However, Basten JA’s observations are obiter, and neither Payne JA nor Simpson JA joined in his Honour’s observations. While I accept Mr Sibtain’s submission that the approach taken in TCN Channel Nine Pty Ltd v Pahuja means that the principles set out in Fairfax Digital Australia and New Zealand Pty Ltd v Kazal remain binding, this is not a reason for refusing to impose conditions upon leave to amend, for reasons of the kind explained by, for example, Hoeben CJ at CL in Dominello v Harbour Radio Pty Ltd t/as Radio 2GB [2019] NSWSC 403.

25. In summary, the practical result is that plaintiffs may now plead (or plead back) imputations that they know are likely to be found true, even though the Court of Appeal has acknowledged that the pleading of an imputation which the plaintiff knows to be true may amount to abuse of process: Farrow v Nationwide News Pty Ltd [2017] NSWCA 246. However, defendants have an answer to this. A claim that there is some form of disentitling conduct may be grounds for refusal of leave to plead back, as occurred in in Dominello v Harbour Radio Pty Ltd t/as Radio 2GB at [50]-[52], where Hoeben CJ at CL, referring to Farrow v Nationwide News Pty Ltd and YZ v Amazon (No 7) [2016] NSWSC 637, refused leave to plead back on the basis that the plaintiff refrained from pleading imputations deliberately, and only sought leave to plead back to defeat the s 26 defence*.*

26. There is no reason why principles such as these should not be just as relevant to a grant of leave on a conditional basis as well as to a refusal of leave to amend. It would be invidious for a party who sought conditional leave to be in an inferior position.

27. The plaintiff’s opposition to the grant of leave on a nunc pro tunc basis is that there is “nothing ulterior to be inferred from the plaintiff’s resistance to the orders sought” (submissions in reply, paragraph 10). This submission appears to acknowledge that, if there were some ulterior motive, such as deliberate avoidance of the meanings, that would be sufficient grounds for refusal of leave to amend other than conditionally.

28. I am satisfied that, where a plaintiff seeks leave to “plead back” a defendant’s contextual imputations, leave can be granted conditionally if it is for the same reasons as those for which leave can be refused, or for some other case management or discretionary factor. While each case turns on its facts, where there is consent to replead, but conditional upon the s 26 defence remaining, the following broad categories are likely to be relevant where the making of orders to this effect are contested:

(a) Factors which would have been relevant if the defendants had asked the court to refuse the application (for example, challenging the capacity of the imputations or pleading an imputation that is true). I have set out the factors identified by the defendants, arising from the facts of this case, in paragraphs 29 – 50 below. (b) Factors relevant under ss 56 – 62 of the Civil Procedure Act 2005 (NSW), such as the timing of the application (where such an application is otherwise unexceptionable, but is brought shortly before the trial) and/or issues going to the exercise of discretion of the kind generally relevant to any application for leave to amend.

Factors relied on by the defendants

29. Whether leave is granted, refused, or granted conditionally, the same factors tend to apply.

30. While the defendants do not argue that the plaintiff should be denied the opportunity to plead back the contextual imputations, they rely, in seeking that leave be conditional, upon a series of factors that have led to refusal to grant leave, including:

(a) The delay in bringing this application, in circumstances where the application to plead back was in fact only made at or after an application to strike out the contextual imputations (Jones v TCN Channel Nine Pty Ltd (No 3) [2016] NSWSC 922 at [2], [5] and [8]-[9]). The absence of explanation for this delay is also relied upon (submissions, paragraphs 6 (i) – (iii) and (v)). (b) The plaintiff is asserted to have deliberately avoided pleading the imputations which are now sought to be pleaded back which is impermissible: Chel v Fairfax Media Publications Pty Limited [2015] NSWSC 171 at [22]-[23]. The plaintiff’s imputations (a) and (b), in particular, are submitted to be narrowly cast, in that they related to the censure imposed on him, as opposed to the broader question of whether the plaintiff, independently of the report censures, had engaged in serious misconduct. Imputation (c), although appearing to go further, does not in fact do so. (c) The contextual imputations are claimed to be based on substantially true facts, where the circumstances are such that “the only purpose of the amendment is to prevent the defendant using them as a defence under s 26 of the Act”: Dominello v Harbour Radio Pty Ltd t/as Radio 2GB at [48] – [52] (submissions, paragraph 6(vi) – (viii)). (d) The plaintiff’s initial attempt to strike out the contextual imputations.

The plaintiff’s arguments in reply

31. The plaintiff’s first submission is that conditional orders are rarely sought and still more rarely granted; where such orders are made, it is either by consent or for reasons relating to specific facts. Mr Sibtain suggested that there were only four or five relevant cases. In Balzola v Federal Capital Press of Australia Pty Limited (ACN 008 394 063) & Anor [2015] NSWDC 23 (Mahony SC DCJ), there was limited analysis of the issue and the judgment appeared to be intended to preserve the status quo. The grant of conditional leave in Boikov v Network Ten Pty Ltd; Boikov v Nationwide News Pty Ltd [2017] NSWDC 88, arose because the amendment was sought very close to the trial. The few other decisions on this point (such as Pahuja v TCN Channel Nine Pty Limited [2015] NSWSC 1664 and Greenfield v Fairfax Media Publications Pty Ltd (No 2); Greenfield v Australian Broadcasting Corporation [2015] NSWSC 373) contained conditional leave orders only because these were made by consent.

32. In Pahuja v TCN Channel Nine Pty Ltd*,* McCallum J noted (at [3]) that the orders were by consent, but added that the making of consent conditional orders was “a sensible course”. In fact, agreement to such orders was described by her Honour as “common practice” in Sharp v Harbour Radio Pty Ltd (No 2) [2016] NSWSC 223 at [28]-[30]:

“28 The defendants have indicated in correspondence that they would accede to what is becoming common practice in this list that, where a plaintiff wishes to appropriate a defendant's contextual imputation, the defendant consents to that course on the basis that the right is reserved to challenge the appropriation at trial in the event that evidence of the substantial truth of the contextual imputation and the plaintiff's knowledge of that truth is adduced. That was the approach taken by me in the matter of Pahuja v TCN Channel Nine Pty Limited [2015] NSWSC 164 at [3], at the urging of the parties in that case.

29 Having made that indication, Mr Richardson made a formal submission that the authorities which allow a plaintiff to appropriate a contextual imputation are wrong. He accepted, however, that that submission could only be made as a formal submission in this Court, there being appellate authority to the contrary in Kermode at [88]-[89]; approved in Holt v TCN Channel Nine Pty Ltd [2014] NSWCA 90 at [23] per Macfarlan JA; Gleeson JA agreeing at [90]; Sackville A-JA agreeing at [94]-[95].

30 In the circumstances, the appropriate course in my view is for the Court to note the submission by way of formal qualification to the basis on which the defendants consent to any appropriation by the plaintiffs of the contextual imputation in their pleadings.”

33. McCallum J’s description of this being “common practice” is of significance when considering whether the plaintiff’s inference that such orders, when challenged, are rarely sought, is that such orders should be made only in rare cases. The relatively sparse number of judgments considering the issue of conditional leave is not an indication that the orders sought in this application are unusual or onerous, or that there need be no further inquiry into the facts of the case by reason of these factors.

Did the plaintiff challenge the capacity of the contextual imputations?

34. There are two issues to determine: first, whether the plaintiff did in fact challenge the capacity of the contextual imputations and, second, whether this would be a ground for conditional leave.

35. As to the first of these, Mr Sibtain submits that, unlike the unsuccessful plaintiff in Chel v Fairfax Media Publications Pty Limited, “the plaintiff has not raised a challenge to capacity and then sought to adopt those imputations he eschewed” (submissions in reply).

36. That is not what the relevant extract of the plaintiff’s submission to the court on his application to strike out these imputations (which is set out at paragraph 17 above) shows. While the plaintiff abandoned the strike-out application shortly before the date set aside to hear it, the strike-out argument did not need to have been pursued to finality. A similar submission was made in Jones v TCN Channel Nine Pty Ltd (No 3) at [2], [5] and [8]-[9]. McCallum J stated:

“2 In short, the purpose of the proposed amendment is to allow the plaintiff to appropriate contextual imputations pleaded in a defence filed on 12 February 2016. Notice of the application was given promptly after that date, although in the context of the interlocutory history of these proceedings, that probably does not tell the full story. The complete history to the application is set out in the affidavit of Mr Vasilios Kalantzis sworn 20 April 2016.

…

5 The focus of the contest in argument today has been, rather, whether the Court should exercise that discretion. Mr Richardson submitted, by reference to a colourful analogy comparing a beautiful retail shop display with one in which the mannequins are bare, that the argument for allowing the amendment in this case is considerably less attractive than the application I rejected in Chel. A principal consideration in his submissions on that issue is the fact that the affidavit of Mr Kalantzis sworn in support of the application asserts that the plaintiffs are of the view that the contextual imputations are not carried by the matter complained of and are not carried in addition to the plaintiff's imputation.

…

8 There are two important differences between this case and the circumstances in Chel. One is that what had been submitted in Chel by the plaintiff was that the imputations were incapable of arising, whereas in the present case it is acknowledged by the plaintiff that they are capable of arising; it is just that his counsel, Ms Chrysanthou, is of the view that those imputations are not in fact conveyed.

9 More importantly, however, with one exception, the contextual imputations sought to be appropriated here carry the same, or substantially the same, defamatory sting as the plaintiff's imputations. The difference rests in the fact that the plaintiff's imputations allege that the matter complained of attributed him with having done certain things in the capacity of an owner of a particular business, whereas the contextual imputations rest on an attribution that he did those things in the capacity of general manager of the business. The evidence of Mr Kalantzis as to his belief as to whether the imputations are conveyed must be assessed in that specific context, which entails a degree of subtlety or nuance that did not arise in Chel.”

37. I am satisfied that the plaintiff did in fact challenge the imputations and that only after being obliged to abandon this application was this application raised.

38. Paragraph 9 of McCallum J’s judgment above alludes to an additional issue, namely whether the defendants’ imputations should have been pleaded in the first place, in that they were not only obviously conveyed but also defamatory stings of a different nature to those imputations which the plaintiff was planning to plead.

39. In considering this submission, I take into account that, in Sharp v Harbour Radio Pty Ltd (No 2) at [9], McCallum J lamented that one of the unforeseen complications of Kermode was that a plaintiff “now has an incentive to trawl the matter complained of for every pleadable imputation so as to foreclose the risk of facing a contextual truth defence.” (This is not only a problem for plaintiffs, because, as her Honour goes on to add, “[a] defendant in turn has an incentive to discern even further different meanings”). I am conscious that these pleading burdens mean that great care should be taken in determining just how “different” a defendant’s contextual imputations need to be for the purpose of “pleading back” arguments.

40. However, in the present case, the plaintiff has gone some way to avoid the sting of the contextual imputations, in that these raise a broader and more serious issue than the factual conclusions of the reports, namely whether the conduct of the plaintiff was in fact serious misconduct. The plaintiff acknowledged as much by first pleading imputation (c), before bringing this application.

41. I am satisfied that the contextual imputations raise clear imputations of serious misconduct generally, which substantially differ from the more limited imputations pleaded by the plaintiff.

42. The presence of either one of these grounds is sufficient for a condition to be placed on the granting of leave. The fact that both grounds are made out makes this a strong case for the granting of the orders sought by the defendants.

43. The defendants raise an additional factor for consideration, namely whether the plaintiff sought to avoid pleading imputations that could be true.

Did the plaintiff seek to avoid imputations that could be true?

44. In Dominello v Harbour Radio Pty Ltd t/as Radio 2GB, Hoeben CJ at CL said:

49 Further, on that state of the evidence, I am not persuaded that the intention behind the proposed amendment is for the plaintiff to vindicate his reputation against the defamatory meanings in the defendant’s contextual imputations. In the absence of any evidence to the contrary, and in the absence of any assertion either in these proceedings or in the interview given by him to the SMH that the contextual imputations are false, I am led to the conclusion that on balance there is no proper basis for the amendments sought and that this application gives rise to an abuse of process.

50 As McCallum J said in Farrow v Nationwide News Pty Ltd [2017] NSWCA 246 (Basten JA and Sackville AJA agreeing):

“35 The submission that a plaintiff’s imputation does not “challenge” anything is technically correct in that falsity of an imputation is not an element of the cause of action. All a plaintiff is required to establish is that the matter complained of was published and that it conveyed a defamatory imputation; truth is a defence. It does not follow that a plaintiff can properly institute an action seeking damages for a defamatory imputation he or she knows to be true. In my respectful opinion, it is manifestly an abuse to invoke the court’s process to obtain a remedy to which the applicant is indisputably not entitled or else put a defendant to proof of that which cannot be denied.

…

38 … The abuse of process lies in having instituted proceedings which, for whatever tactical reason commended itself to the pleader, sought a remedy for the applicant on the strength of imputations the truth of which cannot properly be controverted by her.”

51 McCallum J made observations to similar effect in YZ v Amazon (No 7) [2016] NSWSC 637 where her Honour said:

“32 Ms Chrysanthou, who appears for Amazon, submitted that, if the plaintiff has knowingly sued on true imputations, that in itself is an abuse of the Court’s processes. She submitted that the position is no different from the position of a plaintiff who, for example, deliberately sues on a true imputation so as to prevent the defendant from being able to plead that imputation as a contextual imputation, taking advantage of the principles considered in the decision of the Court of Appeal in Besser v Kermode [2011] NSWSC 174 (reported as Fairfax Media Publications Pty Ltd v Kermode 81 NSWLR 157) at [88]-[89]. Certainly, if it were established that the plaintiff had deliberately sued on imputations she knew to be true for a purpose ulterior to the purpose of vindicating her reputation (such as for the purpose of excluding a plea of contextual truth to other imputations), that would, in my view, amount to an abuse of process.”

52 I am persuaded that the situations described by McCallum J in those decisions are analogous to the present matter where the plaintiff is seeking an amendment that is intended to prevent the defendant raising a defence to which it would otherwise be entitled rather than vindicate any attack on his reputation.”

45. This is a serious claim to make. The plaintiff’s solicitor was not cross-examined on his affidavit. Additionally, I would be reluctant to make a finding of absence of bona fides on the current (and limited) particulars of justification in the pleading and submissions, in terms of defining what additional “truth” (i.e. in addition to the two reports) it is that the plaintiff seeks to avoid.

46. Mr Sibtain submits that his client has acted with the utmost bona fides and that I should refuse to entertain the defendants’ submission that the plaintiff’s conduct is to deprive the defendants of a s 26 defence. He also challenges the defendants’ submissions that they have “a properly pleaded and complete defence” (submissions, paragraph 23), noting that the particulars of truth are essentially a restatement of what is in the reports and do not add material explaining, for example, occasions when the council had not followed up an adverse report warranting a censure, or prior misconduct of a similar kind by the plaintiff.

47. As was raised during oral submissions, one of the relevant factors acknowledged in the report was whether the plaintiff had a history of prior similar conduct (about which the report writer did not have information). If that was the case, that additional conduct could be evidence which, although not known to the report writer, was known to the Council and thus a factor in deciding that the conduct was serious enough to warrant the censure motion passed.

48. There is considerable merit in Mr Sibtain’s complaints that the additional material referred to by the defendants in oral and written submissions, as well as in the affidavit of evidence relied upon by them, does not seem to have made its way into the particulars of truth, which effectively merely rely upon a description of the reports. What the defendants need to do is to outline why the censure followed the report and what they mean by the statement that councillors are censured only in the most serious circumstances. If, for example, the plaintiff had offended on other occasions which were not revealed to the report writers (as appears to be the kind of evidence they and/or the defendants may have had in mind), that needs to be set out in proper form.

49. On the particulars of justification as currently set out, I do not see that the defendants have identified the truth of the broader imputations, as opposed to the content of the reports, sufficiently clearly to warrant such a finding by me. What I do see, however, as is noted above, is that the plaintiff initially confined his imputations to the report findings and consequent censure. When confronted with contextual imputations which focussed on his behaviour, as opposed to the literal findings in the reports, he sought to plead his way out of the situation by proposing his own alternative (imputation (c)) and seeking to strike out the contextual imputations, only bringing an application to plead these back after this earlier stratagem was the subject of further consideration. These are sufficient to warrant the granting of leave to be conditional.

Case management and discretion issues

50. The defendants also complain of delay. In Boikov v Network Ten Pty Ltd; Boikov v Nationwide News Pty Ltd, the principal reason for the leave to amend being conditional was that the amendment was sought shortly before trial, as is noted at [31]-[32].

51. No such concerns arise here. While the defendants point to the delaying of the bringing of this application until after the plaintiff abandoned the previous application of seeking to strike out the imputations, that is not a case management issue sufficient to warrant conditional leave.

52. As to discretionary issues, the entitlement of a party to amend pleadings need not be traversed. The defendants did not identify any grounds of this kind.

Costs and other orders

53. For the reasons set out above, the plaintiff is granted leave to amend, but subject to the condition sought to be imposed by the defendants.

54. I note the plaintiff’s counsel has agreed to put the schedules of the matters complained of in proper order when the amended statement of claim is filed, but I have not made a formal order to this effect.

55. As to costs, the plaintiff is seeking an indulgence in terms of seeking leave to amend and would always be expected to pay costs thrown away by reason of the amendment. The defendants have been successful in their application for restrictions being placed on that leave. Costs should follow the event. I have, however, granted liberty to apply in the event that either party seeks some different order.

56. The parties are at liberty to agree to Short Minutes of Order for the future conduct of the proceedings. The return date of 30 April 2020 is for administrative purposes only and this date may be vacated by agreement between the parties.

Orders

1. Subject to the condition set out in order (2), the plaintiff is granted leave to file a Further Amended Statement of Claim pleading the imputations which are currently pleaded by the defendants as contextual imputations in the defence.
2. The leave granted in order (1) above is granted on the condition that leave to amend be revoked nunc pro tunc in respect of any imputation proved by the defendants to be substantially true, such that, at trial, the defendants may rely upon any such imputation for the purpose of a defence under s 26 of the Defamation Act 2005 (NSW).
3. Plaintiff pay defendants’ costs of leave to amend and of this application, with liberty to apply.
4. These proceedings are stood over for directions only to the Defamation List on 30 April 2020.

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Amendments

06 March 2026

Publication restriction lifted – decision republished.