Hutley v Cosco

Court of Appeal (NSW)|2021-02-02|Before: Basten JA, Macfarlan JA, White JA, Rothman J

Solicitors: Harris & Company (Appellant) D'Arcy Sloman Peacock (Respondent) File Number(s): 2020/226530 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Division Citation: [2020] NSWSC 893 Date of Decision: 13 July 2020 Before: Rothman J File Number(s): 2016/332100

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

headnote [This headnote is not to be read as part of the judgment] The appellant (the defendant in the court below) and her family live in Balmain next door to the respondent (the plaintiff in the court below), who is a local builder. A dispute between the parties arose in relation to construction works being undertaken on the plaintiff's property, resulting in several incidents. In July 2016, the defendant gave an interview to a reporter in which she described aspects of the respondent's conduct. Parts of the interview critical of the defendant were broadcast as a segment of the television program, A Current Affair. The plaintiff brought proceedings in defamation against the defendant on the basis that the interview had damaged his reputation by five imputations, including, broadly, that he had endangered her life and her family, that he had bullied, harassed and physically threatened her and that he had harassed her children. In her defence the Defendant pleaded that each of the plaintiff's imputations was substantially true, and that there were six further imputations carried by the interview which were also substantially true. On 13 July 2020 a judge in the Common Law Division found in favour of the plaintiff and awarded him damages in the sum of $300,000 together with $60,000 interest. On the appeal, the defendant challenged the finding of liability and the assessment of damages. The principal issues before this Court were: (1) whether the plaintiff's imputations were substantially true; (2) whether the defendant's contextual imputations were conveyed and were substantially true; and (3) if so, how true imputations are to be used in the weighing exercise required by s 26(b) of the Defamation Act 2005 (NSW) in assessing the impact of contextual imputations on reputational damage. Held by Basten JA (Macfarlan JA and White JA agreeing) upholding the appeal: Issue (1) - whether the plaintiff's imputations were substantially true (1) Four of the five imputations pleaded by the plaintiff were found to be substantially true, as well as part of the fifth imputation. The plaintiff was found to have risked endangering the lives of the defendant and her family by placing flammable expanding foam into the vent above their kitchen gas stove. The threat to do this was also found to give substantial truth to the bullying imputation: [48]; [52]; [65]; [68]; [70]; [71]; [72]; [154]; [156]. (2) As to the fifth imputation, that the plaintiff harassed the defendant by throwing materials onto her lawn and writing about her in cement, only the second part, (that the plaintiff harassed the defendant by writing about her in cement) was found to be substantially true: [79]; [92]; [154]; [156]. Issue (2) - whether the contextual imputations were conveyed and substantially true (1) Five of the six contextual imputations pleaded by the defendant were found to be conveyed and substantially true: [94]; [96]; [105]; [108]; [117]; [122]; [154]; [156]. Issue (3) - how true imputations are to be used in the weighing exercise (1) Where contextual imputations are to be weighed against a plaintiff's imputations to determine whether further harm is caused to the plaintiff's reputation, the question is: do the plaintiff's imputations not found to be substantially true further harm the reputation of the plaintiff given the harm done by the substantially true imputations pleaded by the defendant? [142]; [146]; [154]; [156]. Fairfax Media Publications Pty Ltd v Kermode (2011) 81 NSWLR 157; [2011] NSWCA 174; Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77 considered; Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230 referred to; Mizikovsky v Queensland Television Ltd [2014] 1 Qd R 197; [2013] QCA 68 not followed.

Judgment

BASTEN JA: The appellant, Vanessa Hutley, and her family live next door to a property owned by the respondent, Anthony Cosco and his wife, Tania Cosco. The Coscos purchased their land in 2013 with a loan from Anthony's father, John Cosco. In about September 2014 Anthony Cosco submitted a development application to the local council for the construction of a new dwelling on the site. A boundary dispute arose between the parties before consent was obtained for the development. Consent was given by the Land and Environment Court on 3 June 2015; construction work commenced on 22 July 2015.
Mr Cosco was a builder who undertook the construction of a new house himself. In the course of construction of the dwelling, Mr Cosco's relationship with the appellant and her husband, Anthony Forward, soured further. Between 2014 and 2017 there was litigation between the parties, including proceedings in the Land and Environment Court.
In early July 2016 the appellant gave an interview to a reporter from the television program "A Current Affair", in the course of which she described aspects of the respondent's conduct. Extracts from the interview formed the basis of a segment of the program entitled "Vent attack" which was broadcast on 4 July 2016. Following the broadcast, Mr Anthony Cosco commenced defamation proceedings against the appellant in the Common Law Division. (It is convenient to refer to him hereafter as "the plaintiff".)
A trial before a judge (with no jury) took place in April 2019, with judgment being delivered on 13 July 2020. The trial judge, Rothman J, upheld the claim and ordered that Ms Hutley pay Mr Cosco an amount of $300,000 in damages, together with $60,000 in interest to the date of judgment. [1] The present appeal challenges the finding of liability and the amount of the damages, if liability were to be upheld.
For the reasons set out below, the appeal should be allowed and the judgment set aside.

Nature of claim

The appellant's interview with the reporter was lengthy and repetitive; for present purposes it is sufficient to set out three passages of the appellant's complaints: [2] "So when Mr Cosco started his construction, we had some concerns that the excavation was coming very close to our property and going across the boundary. We wrote to his certifier, we wrote to Mr Cosco obviously and we wrote to the council asking them to, you know, please step in and stop it. They wouldn't so we went to the Land and Environment Court and indeed it was found Mr Cosco had encroached on our property. We came to a settlement and he was to do certain things in a time frame. He didn't do those things within that time frame and again, we tried to negotiate with him and he refused to accept that we still thought there were concerns. So we went back to court for contempt proceedings and the court found in our favour that he had encroached and damages were awarded and he was to pay us the court costs which were quite considerable." "Well there's been a series of things. We've had materials thrown into our front yard, we've had things written about me in cement, we've had threats of, you know, physical harm, we've had my children being harassed, we were harassed a lot. So we had hoped this would all die down, you know, the court case had finished. We felt possibly things were going to go OK. It didn't seem to happen. It just kept flaring up again and again, and then we received a photograph from a person showing Mr Cosco putting materials in our wall in our vent and we called the police and we got our builder and we found flammable material had been pumped into our vent and the vent had been sealed. And that material had actually charred, and it's highly flammable and we were just shocked. We could have had an explosion. Our vent obviously wasn't working properly. We'd noticed that it was making a lot of noise and there was a lot of smells from the cooking. And it never dawned on us that someone could have actually done what happened." "Yeah, sure. He's just been a bully and he's put my family through hell, and he has no right to do that."
The plaintiff pleaded the following defamatory imputations: (1) Anthony Cosco has bullied Vanessa Hutley and her family; (2) Anthony Cosco threatened Vanessa Hutley with physical harm; (3) Anthony Cosco harassed Vanessa Hutley's children; (4) Anthony Cosco endangered the lives of Vanessa Hutley and her family by blocking a vent with flammable foam that could have caused an explosion or a fire in their home; (5) Anthony Cosco has harassed Vanessa Hutley by throwing materials into her front lawn and writing about her in cement.
At trial, the appellant accepted that each of the imputations pleaded by the plaintiff was conveyed and that each was defamatory. Her primary defence was one of justification under s 25 of the Defamation Act 2005 (NSW), namely that the defamatory imputations were substantially true. In addition, the appellant relied on the further defence of "contextual truth" provided by s 26 of the Defamation Act. She pleaded other imputations, which she contended were substantially true, and which resulted in the plaintiff's imputations causing no further harm to his reputation. The contextual imputations were as follows: (A) the Plaintiff pleaded guilty to maliciously damaging his neighbour's property; (B) the Plaintiff acted dishonourably by entering administration with the objective of avoiding paying his court costs to his neighbours after he lost a case against them; (C) the Plaintiff is a bad neighbour who behaves rudely and selfishly; (D) the Plaintiff is a liar; (E) the Plaintiff knowingly encroached onto his neighbours['] property during the course of an excavation; (F) the Plaintiff acted with reckless indifference to the safety and comfort of his neighbours, by blocking a vent from the cooking area of their kitchen to an opening outside of their home, with flammable expanding foam.
Over the 18 months prior to the broadcast, the appellant and her husband had taken issue with various aspects of the development. A boundary dispute, which commenced over the positioning of a dividing fence escalated when the plaintiff commenced excavations for the foundations, which led to proceedings in the Land and Environment Court and an application under s 96 of the Environmental Planning and Assessment Act 1979 (NSW) for a modification to the development application. The appellant and her husband circulated a leaflet headed, "Say NO to wealthy developers destroying Balmain". The text of the leaflet suggested that the appellant and her husband considered that the building under construction was an overdevelopment of the site and not in accordance with planning controls.
The trial judge was satisfied that primary responsibility for the poisonous relationship which developed should be laid at the feet of the appellant (the defendant in the trial court). He held: [3] "I have absolutely no doubt that the plaintiff did not bully the defendant. Rather, it was the defendant and her family that bullied the plaintiff and the workers on site." In considering whether the imputation of bullying was substantially true, the judge concluded: [4] "As I have already made clear, the Court finds that the plaintiff did not bully the defendant and her family and did not insult her in anything other than a reactionary and, relative to the defendant's conduct, insignificant manner."
The appellant challenged both the finding and the assumption underlying it. As neither she nor her husband gave evidence, findings that they had been abusive of Mr Cosco and his workers on the site were not open to challenge. However, she contended that such findings did not form a basis for denying the substantive truth of both the imputations and the contextual imputations with respect to the plaintiff's conduct. There was, she submitted, substantial objective evidence, together with admissions, which demonstrated the substantial truth of the imputations and contextual imputations.
While it is important to take into account the context within which various events occurred, the focus of the appeal must be on the reasoning with respect to the imputations themselves.
There were two foci of the dispute between the parties. One was the position of the boundary between the respective properties. This gave rise to an allegation by the plaintiff that the boundary fence had been constructed by the appellant on his (the plaintiff's) side of the boundary. He proposed to remove the fence and reconstruct it in the proper place. The position of the boundary also led to an allegation by the appellant that excavation was undertaken on her side of the boundary. There was a dispute about the positioning of a safety fence after the excavation had been undertaken, which may have been anchored on the appellant's side of the boundary.
The boundary dispute led to proceedings in the Land and Environment Court which were settled in favour of the appellant and Mr Forward. A costs order was made in their favour against the plaintiff. The failure of the plaintiff to pay the costs was the subject of the claim of dishonourable behaviour.
The second focus of dispute was the position of a vent in the wall of the appellant's kitchen, the wall being on the boundary between the respective properties. The kitchen vent was approximately 1.4 metres above ground level at the rear of the plaintiff's land. In his view the positioning of the vent was not compliant with regulations and interfered with the enjoyment of his land. When the appellant and her husband declined to reposition the vent, the plaintiff filled the vent with expandable foam which blocked the flexible ducting leading from the extractor fan in the range hood over the appellant's stove to the vent. The plaintiff was charged with malicious damage to property, an offence to which he pleaded guilty. There is no doubt that this was the most serious of the elements of misconduct alleged by the appellant in the course of the interview: it is appropriate to deal with that matter first, as did the appellant on the appeal.

Structure of judgment

Before addressing that issue, it is helpful to explain the structure of the judgment discussed below. It commenced with some background details, including setting out the imputations and contextual imputations [5] and noting the witnesses who were called. [6] The judge then reproduced in full a transcript of the broadcast of the segment from "A Current Affair", [7] although the defamatory publication identified in the statement of claim was the interview with the program's reporter. There followed a section dealing with "inferences" which might be drawn from the evidence, [8] and a summary of the evidence given by lay witnesses. [9]
The next section set out the expert evidence of Ms Jones and Mr Cafe, [10] relevant to the justification of imputation (4). The judge then reproduced a "Chronology of events" prepared by the plaintiff. [11] Under a heading, "Principles", there is found a number of general statements of legal principles, but also findings that the plaintiff's imputations were conveyed and were defamatory. [12] (These findings are not challenged.)
The dispositive findings appear under the heading "Defendant's Submissions and Consideration thereof". [13] Of that part, the last element, dealing with the defence of honest opinion may be disregarded: it was rejected, but the rejection was not the subject of the appeal. [14]
The final section dealt with the assessment of damages. It is clear that the damages were assessed almost entirely by reference to the effect of republication of edited extracts from the interview by Channel 9, found to be authorised by the appellant. Quantum was challenged on the appeal, but need not be addressed, given the conclusions reached as to liability.

Statutory provisions

As the appeal turned on the defences of justification and contextual truth, it is convenient to set out the relevant provisions of the Defamation Act: 25 Defence of justification It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true. 26 Defence of contextual truth It is a defence to the publication of defamatory matter if the defendant proves that - (a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and (b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.
Subject to one matter, the operation of s 25 is not controversial; the operation of s 26 is. However, controversial issues should not be addressed unless that is necessary to dispose of the appeal. It is, therefore, convenient to deal first with the substantial truth of the plaintiff's and the defendant's imputations. That will provide a basis to identify the issues as to the operation of s 26 which need to be resolved.

Plaintiff's imputation (4) - damage to vent

As the worst conduct involved the blocking of the vent for the extractor fan over the appellant's kitchen gas stove, it is convenient to commence with the imputation directed specifically to that conduct. On 9 February 2016 the plaintiff sprayed expandable foam into the vent. In the course of her interview with the reporter, the appellant stated, [15] "…we received a photograph from a person showing Mr Cosco putting materials in our wall in our vent and we called the police and we got our builder and we found flammable material had been pumped into our vent and the vent had been sealed. And that material had actually charred, and it's highly flammable and we were just shocked. We could have had an explosion. Our vent obviously wasn't working properly. We'd noticed that it was making a lot of noise and there was a lot of smells from the cooking. And it never dawned on us that someone could have actually done what happened. … It's just shocking. I mean, you know, this is our home. My children cook, do their homework here. I mean, it is terrifying to think that on our way home from work, you know, they could have just been making a sandwich and an explosion could have happened or a fire, and, you just don't think someone could do that. It was shocking."
The reporter took the appellant back over various aspects of her account and asked the question: [16] "So on the Saturday [13 February 2016], when did you realise something wasn't right?" The appellant answered: "Well over a time we heard that the vent wasn't operating very well and we found smoke in the house and there was a lot of grease around. But really, until we got the photograph and our builder came around and discovered what was in the vent, we had no idea, I mean - … This is [what] he found. And you can see here it had started to char. This was all the way through the vent and then the flaps had been sealed shut."
The program which went to air contained eight passages from the interview relevant to the foam in the kitchen vent, including the last passage set out above and the last sentence of the first passage set out above, commencing "My children cook … an explosion could have happened, or a fire."
This material was the subject of imputation (4), ("endangering the lives of the appellant and her family by blocking a vent with flammable foam"); it was also relevant to imputation (1) (bullying the appellant and her family), and was the subject of contextual imputation (F), (acting with "reckless indifference to the safety and comfort of his neighbours").
In circumstances which will be considered below, the plaintiff was charged by police with an offence under s 195(1)(a) of the Crimes Act 1900 (NSW) of intentionally or recklessly destroying or damaging property, namely the flue from the extractor fan in the range-hood. He entered a plea to the charge and was placed on a good behaviour bond.
The evidence supporting the truth of imputation (4) was, first, the information on the Soudal expanding foam can. The label noted: "Extremely flammable aerosol. Pressurised container may burst if heated. … Keep away from heat, hot surfaces, sparks, open flames and other ignition sources. No smoking. Do not spray on an open flame or other ignition source. Do not pierce or burn, even after use."
A report obtained for the appellant prepared by Belinda Jones of FireForensics noted that the ingredients obtained from the safety data sheet for the product indicated that it contained the propellants isobutane and propane. Ms Jones annexed to her report material safety data sheets for both compounds. The sheet dealing with propane identified a "fire or explosion hazard" as "explosive air - vapour allowed to leak to atmosphere." Flammable limits in air were identified for both products. Ms Jones expressed the opinion that "a fire and possibly an explosion could easily occur if the propellant … contacted an operating burner."
Further, on the basis of tests which she undertook, Ms Jones concluded that the foam itself was highly flammable and able to burn readily, even after an ignition source had been removed, until it "cured". In a supplementary report, responding to a report prepared by Anthony Cafe for the plaintiff, Ms Jones stated: "17. Conclusion of Soudal Foam behaviour based on flammability and explosive limits capabilities and burn tests completed are that: a. If the propellants were to exit the exhaust vent after the Soudal Foam was dispersed into the vent, that the propane and isobutane would likely explode and/or cause a fire if the stove top were on at the time."
Mr Cafe was taken to that evidence in cross-examination and agreed with it. [17] Mr Cafe also agreed that both propane and isobutane were highly flammable [18] and gave the following evidence: [19] "Q. … And perhaps if you just look at 5.2 of your report. If, at the time the Soudal foam was sprayed into the vent, you assume that there was a flame on the stove, but the fan was not operating. You'd agree with me, wouldn't you - I think this is what you're saying there, that there is a risk of the compounds in question - propane and isobutane, igniting. A. That's correct. Q. That would in fact result in an explosion, wouldn't it? A. It would be a - an explosion, or what they call as a - it's a flashfire, right, where you've got a gas and you've got an ignition source, and then it lights, and it just flashes. But it's not an explosion that bends the walls and blows the windows out. It's only localised, right. Q. … if such a flash, or ignition … occurred, it's highly likely that it would set fire to the foam from which the propane and the isobutane had been released. That's correct, isn't it? A. That's correct. Yes. Q. That's in the hypothesis that I said to you: fan off, stove on. A. Yes."
Imputation (4) must be understood by reference to four elements. First, it referred to the act of blocking the vent with expandable foam. That element was not in dispute. Secondly, it identified the foam as "flammable". Thirdly, it described an event which "could have happened", namely an explosion or a fire. Fourthly, it identified a characteristic of the act of blocking the vent with flammable foam, namely, endangering lives. The element of endangerment follows from the possibility of a fire or explosion. The thrust of the imputation was that the action of the plaintiff could have led to a fire or small explosion in the kitchen, if the stove had been in operation at the time he sprayed the foam into the vent.
The judge rejected the submission that the imputation was proven to have been substantially true. The reasoning requires the bringing together of a number of disparate passages in the judgment. The section headed "Defendant's Submissions and Consideration thereof" commenced with the following passage: "[164] The defendant accepts in her Closing Submissions that each of the imputations conveyed are defamatory and, as outlined above, the Court has independently determined that issue. As earlier stated, the defendant pleads justification (or substantial truth), contextual truth and honest opinion. The Court has already dealt with the contextual imputations. [165] As to the defence of truth, the defendant refers to the agreement of the plaintiff that, on 9 February 2016, he sprayed 'Expandafoam' into the vent of the defendant's property. There is no issue in the proceedings that the plaintiff did this."
The last sentence in [164] is curious: it is repeated at [279], when the judge dealt with the contextual imputations, which even at that point had not been the subject of findings that they were conveyed, or that they were substantially true. The sentence may have been out of place.
Secondly, although the judge did not say so, it is apparent from the content of [165] that he commenced with imputation (4). That subject-matter appears to continue until [193]. On one view, the basis of rejection was set out almost immediately in the following terms: "[167] The defendant relies upon the proposition that the can reads 'extremely flammable' and that it is 'inconceivable' that a builder 'could not have known that the propellants were highly flammable'. The difficulty with such a submission is that it is not the 'propellants' that is the subject of any statement by the defendant in the interview or in the broadcast. Nor is it the propellants that were the subject of any imputation. The imputation relates to the expanding foam blocking the vent; not the application of the foam."
The reasoning then diverted to consider a submission by the defendant that, in pleading guilty to the charge of malicious damage to property, the plaintiff had accepted the account of the offence in the police facts sheet tendered in the Local Court, which included the following statement: "The Accused sprayed an aerosol can of an expanding foam substance for twenty to thirty seconds to block this vent. Blocking this vent stops the flow of smoke from leaving the kitchen creating a fire hazard. The Accused filled the entire air vent with foam and continued to finish erecting the fence."
On the appeal, the Court was told that this document was not admitted in evidence at the trial; although the plaintiff was cross-examined about it, he denied having read it. In any event, whether the imputation was conveyed did not depend upon an admission made by the plaintiff in criminal proceedings. Nor in fact was the basis of the fire hazard accurately described in the police facts sheet. Accordingly, the judge's reasoning at [168]-[176] (dealing with the submission that the plaintiff had admitted creating a fire hazard) may be disregarded.
The third matter dealt with by the trial judge was the evidence of "warnings" said to have been given to the appellant by the plaintiff, to the effect that he would "block the vent" if she did not move the vent to a position where it could lawfully operate as a kitchen flue.
It appears that the appellant's case at trial was that no such "warnings" were given. The warnings were more in the nature of threats, namely that if the appellant did not reconstruct part of her dwelling in a manner proposed by the plaintiff, then he would take the matter into his own hands and block the vent. The judge dealt at [177]-[184] with the evidence that the plaintiff told the appellant he would block the vent if she did not move it in a timely fashion, which he accepted. However, the fact that a warning may have been given, and even repeated, has little bearing on the substantial truth of the imputation. The real significance of the "warnings" may have been as evidence of bullying, a point dealt with below in relation to imputation (1).
In what appears to be a dispositive passage, the judge reasoned as follows: [20] "[186] I accept the defendant's submission that the plaintiff's fourth imputation is cast in objective terms. It refers to the endangerment of the lives of the defendant and her family by blocking a vent with 'flammable' foam. [21] [187] The evidence before the Court does not support the proposition that the lives of the defendant and her family were put in danger by the blocking of the vent with the foam or otherwise. Further, there is no suggestion in the evidence that the 'flammable foam' could have caused an explosion or a fire in the home of the defendant and her family. [188] Moreover, on the evidence before the Court, I am not satisfied that even at its application, the propellants utilised to insert the flammable foam could have caused a fire or an explosion, except in the circumstance that, when the propellants were expelled from the can, the stove was in use and the extraction vent was not in use."
The underlying distinction made in these paragraphs, and in [167] set out at [34] above, is between the effect of inserting "flammable foam" and the effect of "the propellants utilised to insert the flammable foam".
It is implicit in the passage at [188], that, in the circumstances noted, the propellants could have caused a fire or an explosion. The judge did not affirmatively state that he would have been satisfied as to that fact, partly because he had already rejected the proposition that imputation (4) related to the propellants (as opposed to the foam) and partly because, as the subsequent reasoning demonstrates, he was not satisfied that the stove was in fact in use at the time of the offending conduct.
Three points are relevant in relation to this reasoning. First, on the basis of the expert evidence identified above, the judge should have been affirmatively satisfied as to the substantial truth of the imputation if the stove were in use, but the extractor fan not in use. (If the extractor fan had been in use, the propellants would not have reached the stove.) Secondly, the contents of the can contained a single compound product: the foam was useless without the propellants and the propellants had no function without the foam. On the basis that the foam itself was not flammable, the reference in the imputation to "flammable foam" must, in its ordinary meaning, have been understood to refer to the compound product. Thirdly, whether the stove was in fact in use at the time of the plaintiff's misconduct was not an element of the imputation, which was expressed in a conditional sense, namely that spraying flammable foam "could have" caused an explosion or fire in the home: there was no suggestion that it did. It was the taking of the risk which rendered the allegation of endangerment defamatory, and the existence of the risk which the appellant sought to demonstrate was substantially true.
That the judge relied upon the fact that the stove was not in use appears from the next passage in the reasoning, which stated that "[t]he evidence before the Court is that the vent and/or stove was not used until 13 February 2016". [22] There was no dispute the stove was not in use when the plaintiff sprayed the foam through the vent into the flue. The judge continued: "There is also the conclusion, to which I have already referred, that, if the stove were in use, the plaintiff would have been able to smell the gas or the food being cooked, and, as it was not in use at the time of the application of the can, even the application of the foam and the propellants could not have caused a fire. Further, the plaintiff was aware it was not in use and there is no suggestion in evidence, nor was there cross-examination, to suggest that … the plaintiff was unaware whether the stove was in use; or that, if it were in use, the plaintiff would have inserted the foam anyway."
The reference in the first sentence to the earlier finding as to smelling the gas or food being cooked is a reference to the following earlier passage: "[116] There is no evidence to suggest that, if the stove were in use, it would not be obvious to a person who was standing at the point where the extraction vent meets the wall, or, otherwise expressed, the point where, if the fan in the vent were operating, the fumes would be extracted to the outside. I infer that any cooking that was occurring could have been smelt at the extraction point. Gas too could have been smelt. [117] I draw comfort, in reaching the foregoing conclusion from the evidence of the plaintiff, which, in this regard, went unchallenged. The plaintiff remarked that, on 10 October 2015, he and Alistair Tait, another worker on site, smelt bacon and eggs being cooked, which smells emanated from the vent. They were standing in the yard; not directly at the vent."
This reasoning should not be accepted. It should be inferred that when, some four months earlier, the smell of cooking emanated from the vent that the extractor fan was on. More relevantly, the inference that "gas" could have been smelt if the stove were on was not open on the evidence and is contrary to common experience.
The affirmative finding at [189] that the plaintiff was "aware it was not in use" appears to have turned on the inference that he would have smelt gas if it had been in use: there was, as the remainder of the sentence accepted, no evidence one way or the other from the plaintiff. Further, the finding is not consistent with the ultimate use to which the judge put this evidence in the section "Conclusion and damages": "[385] Further, notwithstanding that the plaintiff's imputation and the contextual imputation in relation to the filling of the vent, relates to 'the flammable foam' and not the propellants, it seems to me that, over and above the fact of the offence having been committed, the circumstances in which the plaintiff took the law into his own hands, despite the warnings given to the defendant, is something that the Court should take into account in diminishing the damages that it would otherwise award. I also take into account that the propellants could have been dangerous and were sprayed, even though it is on my findings, most unlikely that any substantial damage could have been occasioned thereby."
There may have been an argument that the kind of explosion envisaged by Ms Jones, and accepted by Mr Cafe, was not one which would be likely to have caused death. The same might be said of a flash fire caused by the propellant igniting over the stove. However, the listener or viewer of the program would not be expected to make such nice distinctions: nor was such a point taken.
The evidence established, and indeed the trial judge appears in some passages to have accepted, the substantial truth of imputation (4), which was by far the most serious imputation relied upon.

(a) blocking the vent

The simple proposition that the plaintiff bullied the appellant and her family does not invite or permit precise semantic analysis. Bullying can occur in a number of ways, including by acts of physical coercion or oppression, or by aggressive language. As the trial judge correctly noted, it does not require a power imbalance, at least in some abstract sense such as financial resources, social status or level of education. However, although words can be used as a weapon, it does not follow that exchanges of verbal abuse and insults necessarily involve bullying, even mutual bullying. The clearest act of bullying in the present case was the malicious damage to the flue of the extractor fan from the kitchen used by the appellant and her family. Once aware of the fact that he had been caught red-handed on camera, at which point he ceased denying any knowledge of the conduct in question, the following exchange took place with the police officer investigating the incident: "Anthony COSCO: … The vent shouldn't be there and it will [be] blocked again if it keeps blasting stuff at my property. It's meant to be either at a certain distance above ground level or on the roof. It shouldn't be blowing into someone's back yard. I've spoken to them about it and they did nothing about it. … It's a health hazard and needed to be dealt with. SC Humphrey: So you took matters into your own hands and blocked it up to resolve the problem? Anthony COSCO: Yes because Council wouldn't do anything about it and Work Safe have been around and it's been an Issue."
In evidence-in-chief, the plaintiff stated: [23] "Q. Did you say anything to [the appellant] specifically in the week between 6 and 8 February? A. Yes. Q. What did you say? A. I said we were working in the vicinity of the alcove, the vent, and Vanessa was obviously coming out and checking and doing her thing. I told her that if the vent is not blocked by the time we come to covering over that section of the fence with the palings, that I will block it, and I said, 'If you haven't blocked it by the time we get there, I'm going to block it. So whatever you do, do not use your rangehood, because the vent won't be functioning.'"
In cross-examination, the plaintiff was taken to that passage and the following exchange occurred: [24] "Q. You gave her a warning, you say. A. Yes, well, I didn't - that wasn't the first time I said that to her."
Whether the first discussion constituted a request or a demand, it is clear that that later conversation contained a threat. The plaintiff was requiring that the appellant undertake work on her own property to vary the position of the kitchen extractor vent. Being unable to persuade her that the work should be carried out and carried out immediately, the appellant took matters into his own hands and rendered the extractor flue ineffective by blocking it. Threatening to damage someone else's home because they do not promptly comply with your requests is the act of a bully, as is carrying out the threat. For that reason alone, imputation (1) was shown to be substantially true.

(b) reactive conduct

At the trial, the appellant's case was that the blocking of the vent occurred without warning; in the course of submissions in this Court, senior counsel for the appellant submitted that, prior to the trial, the appellant was not aware that the evidence set out above would be given by the plaintiff and the express threat, coupled with its execution, was not relied upon as a primary act of bullying. There was, he submitted, no reason that such evidence could not be relied upon in this way on an appeal by way of rehearing. So long as the plaintiff had an opportunity to respond (and senior counsel for the plaintiff did not suggest otherwise) that submission should be accepted.
The appellant also took issue with the proposition that any conduct of the plaintiff towards her and her family which may have been characterised as insulting or bullying was of lesser significance than, and was merely reactive to, the appellant's own conduct. Of the conduct relied upon by the appellant, the judge said that all was "the product of a reaction by the plaintiff to the grossly offensive bullying instigated by the [appellant], her husband and her son." [25] The suggestion with respect to the son was that he had abusively addressed the plaintiff and workers on the building site as "dumbass" and "moron". No doubt such conduct was offensive and, as the trial judge found, reflected the attitudes of his parents. However, there is no suggestion that either the plaintiff or his workers reacted to any conduct on the part of the 12-year old boy. It would hardly have been justifiable had they done so.
The judge dealt at some length with three particular conversations, the first of which occurred on 22 July 2015, the second on 10 October 2015 and a third on 31 January 2016, each of which was recorded. They included much verbal abuse, involving both the appellant and her husband on the one part and the plaintiff and his wife on the other. The recorded conversations demonstrate the parties (other than Ms Cosco) trading insults and speaking over one another. Although in principle it may be possible for multiple parties to bully each other, in my view the trading of insults in the present context did not involve bullying.
The judge referred to Ms Cosco's evidence of the fixing of surveillance cameras pointing into the Cosco yard and the taking of a video recording from the back lane by the appellant. These events were said to have occurred after the Coscos commenced occupying the premises and the building work had been completed, namely after April 2017. [26] The judge noted that "[e]ach of the foregoing filming incidents may be a criminal offence, and is certainly an appalling breach of privacy." [27] However, that material should be disregarded for present purposes as it occurred long after the allegations of bullying were made in the course of the appellant's interview with the reporter in July 2016. Whatever was referred to in that interview cannot have been reactive to later conduct by the appellant or her husband.

In written submissions, the appellant identified two main acts of misconduct which constituted bullying. The first was the blocking of the flue to the vent, which has already been discussed; the second was the hiring of a private investigator to prepare possible complaints of criminal conduct on the part of the appellant and her husband. It is convenient to deal with that matter next.
Following the proceedings in the Land and Environment Court, there was correspondence between the appellant's solicitor, Grant Hansen of Holman Webb Lawyers, and the plaintiff. On 4 May 2016 Mr Hansen wrote to the plaintiff enclosing two reports suggesting deficiencies in the steps which had been taken pursuant to the consent orders made in the Land and Environment Court on 28 August 2015. The plaintiff replied by letter dated 9 May 2016. In part that letter was a reply to the substance of the two reports; the letter also raised a number of allegations of misconduct on the part of the appellant and her husband. Shortly thereafter, on 23 May 2016, the plaintiff wrote again to Mr Hansen complaining that she and Mr Forward had "induced their builder to trespass onto my property without permission and change the protruding gravity-flap vent to a flat louvred plate." The plaintiff continued: "I have now retained a private investigator, Jonathan Alt of Daris Group, to investigate when and how this trespass occurred. This may lead to trespass charges against your client. … My investigator will also be investigating the handwriting on envelopes impersonating my bankruptcy trustee that were posted to Dry Dock Hotel, Father John Therry Catholic Primary School, and Paul Pearce my PCA. … He will be investigating the circumstances and events surrounding an anonymous letter placed in letter boxes surrounding my development opposing my s 96 application [for variation of the development consent]. … I have foreshadowed in my letter of 9 May that I will be investigating further your client's application to the LPI for a determination survey. … In addition I have lodged a complaint with OLSC [Office of the Legal Services Commissioner] regarding both your client (who is a practicing solicitor) and your knowledge of the various surveys and circumstances surrounding the LPI application. … In my letter of 9 May I have foreshadowed the potential claims I am contemplating regarding malicious intent of your clients as well as encroachment and trespass." Copies of the letter were sent to the appellant and Mr Forward.
Mr Alt had indeed been engaged. On 18 July 2016 he wrote to the Commander, Leichhardt Local Area Command of NSW Police, noting: "I have been engaged by Mr Vince D'Arcy, Solicitor, to prepare complaints for referral to the NSW Police on behalf of Mr John and Anthony Cosco. These complaints are both complex and extensive, and [it] is the contention of the Cosco's [sic] that they are criminal and serious in nature." An attachment to the letter identified seven potential criminal charges with attachments totalling 183 pages.
The trial judge noted at [198] the reliance by the appellant on the engagement of Mr Alt to investigate her and Mr Forward and provide information to the police on possible criminal charges, as an element demonstrating the "power imbalance" between the parties, although in written submissions the appellant had also expressly denied that it was necessary to find a power imbalance to establish bullying.
The trial judge stated at [202] that "[t]he evidence before the Court is that Mr Alt was hired by the plaintiff's father; not the plaintiff." [28] The plaintiff did state in his evidence that the investigator was hired by his father, [29] however, the judge made no reference to the letters referred to in [58] and [59] above which identify the plaintiff as at least one of those instructing the investigator.
The trial judge returned to the engagement of Mr Alt as itself an element of the bullying relied upon by the appellant, after dismissing particulars relating to the plaintiff's father Mr John Cosco forwarding letters of complaint to the Law Society and to the employers of both the appellant and Mr Forward. The judgment continued: "[253] Similarly, it was the plaintiff's father who engaged Mr Alt, the private investigator. The plaintiff had nothing to do with his engagement or his terms of reference. The mere fact that the plaintiff, on request, provided a statement of conduct by the defendant and/or Mr Forward is not sufficient to allow the use of Mr Alt as proof of 'bullying'. [254] In fact, Mr Alt was engaged by a solicitor for the purpose of investigating whether there had been criminal conduct that was required to be referred to the police. The engagement commenced after the anonymous letter was circulated in the plaintiff's neighbourhood. There is a strong inference available that the letter was written or instigated by either the defendant or Mr Forward, but it is irrelevant for the purposes of the Court's task."
The only evidence that it was Mr John Cosco who hired the investigator was that of the plaintiff. The documentary material demonstrated that, while Mr John Cosco was undoubtedly involved in the arrangements with Mr Alt and paid his fees, the plaintiff was intended to be the beneficiary of the work and was closely involved in briefing Mr Alt. The letters sent by the plaintiff to the appellant's solicitor stated expressly that he had "retained" Mr Alt. Further, Mr Alt, himself a former police officer, was unlikely to have misrepresented the true position in writing to a police inspector as to the source of his instructions. The finding of the trial judge that the plaintiff had no part in this conduct is unsustainable.
The briefing of a private investigator to prepare such material in relation to the appellant and her husband, arising out of a private dispute as to the lawfulness of a building development, would, in the ordinary meaning of the term, amount to bullying. It did not cease to have that quality because it was reactive to perceived wrongs. In fact of the numerous matters the subject of Mr Alt's brief, two led to charges being laid against the appellant and her husband, both of which were dismissed, with costs.
The conduct demonstrated the substantial truth of imputation (1).

(d) other matters

There were a number of other particulars of conduct relied upon by the appellant as bullying. As the matters considered above were sufficient to establish that the defence was made good with respect to imputation (1), it is unnecessary to refer to more than one other matter relied on by the appellant, especially as some overlap with other imputations. In May 2016 the plaintiff sent a complaint concerning the appellant to the Legal Services Commission alleging that she "misleadingly and deceptively took steps to validate with the Land and Property Information NSW a single survey offset point" as the basis for a judgment in the Land and Environment Court, resulting in the consent orders of 28 August 2015. The plaintiff alleged that the survey relied upon was known by the appellant and her solicitor to have been based on an error, or should have been so understood. Further, the complaint alleged that the appellant had "intentionally, deceitfully and misleadingly" failed to submit to the Court two more recent surveys which demonstrated the error. The motive was said to be "to deceptively steal my land." [30]
The trial judge accepted that it was the plaintiff who sent the complaint, although he stated that his father had drafted it and he had signed it, without reading it. The judge accepted that he was responsible for it. [31] The judge's finding in that regard continued: "[251] The complaint letter attached the plaintiff's letter of 9 May 2016. The two letters together are insulting and make a number of allegations that have not been proved and could not be."
This finding was sufficient to establish that the complaint should properly be regarded as conduct demonstrating the substantial truth of the imputation that the plaintiff had bullied the appellant and her family. Taken with the other matters, the defence to imputation (1) was made good.

Plaintiff's imputation (2) - threat of physical harm

Imputation (2) alleged that the plaintiff had threatened the appellant with physical harm. As discussed above, the so-called "warnings" that the plaintiff would block the vent above the kitchen stove extractor flue were, in effect, a threat to the plaintiff and her family. The judge appeared to accept that the statements constituted "a threat of damage to property." [32] However, he found they did not constitute "a threat to the [appellant] of physical harm." The judge also noted that "the imputation that the 'plaintiff endangered the lives' of the defendant and her family is significantly more serious than 'malicious damage to property'." [33]
Once it is accepted that imputation (4) was substantially true and the plaintiff had endangered the lives of the appellant and her family by blocking the vent, because the flammable foam could have caused an explosion or fire in the home, it followed that a threat to take such a step was a threat to cause physical harm to the appellant and her family. Accordingly, the substantial truth of imputation (2) was established.

Plaintiff's imputation (3) - harassing appellant's children

Imputation (3) related only to harassment of the children. The trial judge noted that the appellant relied upon the conduct in relation to the vent and conversations in relation to that matter. He treated the issues raised by the third imputation as covered by the reasoning with respect to "the earlier imputations", which should be understood to include imputation (4), which the judge had already dealt with. [34]
It was not submitted that threats did not constitute a form of harassment. Accordingly, the conduct accepted with respect to the threats to block the vent, thereby endangering both the appellant and her family, involved harassment of the children. Acceptance of the substantial truth of those imputations carried with it the conclusion that imputation (3) was substantially true. It is not necessary to consider the reliance on conversations, which were of relatively little significance.

Plaintiff's imputation (5) - throwing material onto the front lawn and writing abuse in cement

Imputation (5) involved harassment of the appellant by two specific actions, namely (i) throwing fencing materials into her front lawn, and (ii) writing about her in cement. These incidents may be dealt with separately, as they were by the trial judge.
Dealing first with the fence palings, the judge rejected the defence on two bases. First, he said that the appellant had not proved that she was harassed by the conduct. Secondly, he found that the appellant was "the instigator of that conduct." [35]
The first finding assumed that it was necessary for the appellant to establish that she "felt harassed." [36] There was no discussion in this Court as to the ordinary meaning of the term "harassed". It may, however, be assumed that it refers to conduct which is unwelcome to the person harassed and is of a kind which might be expected to cause annoyance, offence, humiliation or intimidation. However, it is not necessary that the person targeted give evidence that the conduct was unwelcome, or had that particular effect. Both elements may be inferred from the circumstances in which the conduct occurs. Uninvited intrusions by strangers having no implied licence onto another person's property may readily be found to have those characteristics.
In relation to the second matter relied upon by the trial judge, if the appellant was indeed "the instigator" of the conduct it would, no doubt, not constitute harassment. However, what appears to have been intended was that the conduct in question was not instigated by the appellant, but was a response to her conduct. That requires explication.
The evidence established that there was a dispute as to the position of a dividing wood paling fence between the two properties. The appellant and her husband formed the view that it was on their property and pushed part of the fence over onto the plaintiff's property. He apparently broke it up and placed the palings back into the front yard of the appellant's property. What ensued, over a day or two, was described by the plaintiff in his evidence as a "throwing match." [37] The description given by the plaintiff was in fact of a dispute between him and the appellant's husband.
No doubt the behaviour on each side was unedifying and was part of an ongoing disagreement as to where the boundary lay. The events took place in October 2015, after consent orders had been made in the Land and Environment Court, but before steps had been taken to comply with them.
Whether this conduct should be characterised as involving harassment of the appellant depends largely upon the context. Although the imputation, being limited to two specific acts must have contributed little to the overall defamatory effect of the published material, on balance no error is established on the part of the trial judge in rejecting the defence of substantial truth with respect to this particular.
The second particular contained within the imputation involved writing in cement on the footpath outside the appellant's house, "VH Old Moot", with an arrow pointing in the direction of the appellant's home.
The trial judge dismissed the defence with respect to this aspect of the imputation, simply noting that there was no suggestion that the plaintiff himself wrote the message in the cement. [38] There is no doubt that at some stage in the first half of 2016 such graffiti did appear on the footpath. Indeed, the word "moot" was inscribed in the footpath on two occasions, once with the additional reference to "Old Racist Moot", and on a helmet used by one of the workers, Mr Russell, and on a refrigerator door, originally on the plaintiff's property, but later left on a trailer in the street. It was agreed that, in context, the term "moot" was used as described in the Macquarie Dictionary as a "colloquial" reference to the vagina. The trial judge stated: "[221] … There is no suggestion that any of this graffiti was created by anyone other than Mr Russell. More relevantly, there is no suggestion that anyone other than Mr Russell knew the term, 'moot', before these proceedings. Given the defendant's constant abuse of the workers, they have quite independent bases for animosity towards her."
Although the matter was not explored in the course of appeal, this specific finding was inconsistent with the chronology. One of the plaintiff's employee's, Mr Russell, hosed the appellant in the street on the evening of 31 January 2016 when he apparently thought she was placing empty bottles in the skip outside the plaintiff's house. The judge also found that Mr Russell was dismissed by the plaintiff "just after the hosing incident." [39] That implied that he was dismissed in early February 2016. The finding supported a view that the plaintiff was neither complicit in, nor condoned, harassment of the appellant.
The chronological list of exhibits prepared for the purposes of the appeal dated the "VH Old Moot" graffiti written in concrete as having occurred on 22 February 2016, the photograph of the helmet with the words "Old Moot" on 5 March 2016, and the words "VH Racist Old Moot" written in concrete on 4 May 2016. This material was tendered by the appellant. Accepting the date of Mr Russell's dismissal, as found by the trial judge, it is implausible that he was the employee responsible for the conduct in question, as found by the trial judge.
However, the plaintiff's evidence was inconsistent with the finding that Mr Russell had been dismissed shortly after the hosing incident. The plaintiff stated that Mr Russell had worked for him on the site from "maybe November [2015] till June [2016] possibly, so he started before the hosing incident and then he worked up until May or June, I believe. I think it was about six months." [40] Accordingly, he could have been responsible for all the offending conduct, but the plaintiff took no steps to dismiss or discourage him.
The plaintiff gave the following evidence in relation to the words on the fridge: [41] "Q. The words on the fridge were visible to anyone who happened to be walking past, or indeed riding past, weren't they? A. Yes. Q. In particular, they were visible to my client and her partner, Mr Forward, weren't they? A. Correct. Q. In fact, that's obviously how they took the photograph, because they became aware of them? A. Correct, I'm just not sure why if she was so offended by it, she didn't push it over."
The plaintiff also agreed that he had called the appellant "Muttley" in exchanges; [42] had told her that she was "the runt of the litter"; [43] that in the course of giving evidence in the Local Court about a month after the fridge was put out on the street he had been asked who was responsible for the writing, denied that it was he and when asked, "Did you ask who wrote it?" answered "No". He said that he believed it was Matthew Russell. [44]
Following the hosing incident on 31 January, the plaintiff attended the premises and an altercation occurred in the course of which the following exchange took place: "AC: You've been putting stuff in my skip, everyone's been putting stuff in my skip. VH: I haven't put stuff in the fucking- AC: He had a bloody reason to set - he saw you."
When taken to this exchange in his evidence at the trial, he agreed it was "possible" that he intended to finish the sentence with "set the hose on you" and when asked, "Did it ever occur to you to apologise to Ms Hutley?" answered, "With the animosity between us, I didn't think it appropriate." [45]
Further, the evidence was that the words depicted on the helmet sat on the building site for some time: the photograph showed the helmet on the reinforcing rods prior to a concrete pour. It was also the plaintiff's evidence that the writing on the fridge had been present for some time before the fridge was placed in the plaintiff's trailer out the front of the work site. [46]
This evidence was relied upon by the appellant in support of the following submission to the trial judge: [47] "The inference is plain that the Plaintiff tolerated and indeed encouraged a culture where it was acceptable to direct vile abuse at the [appellant]. It is not surprising that one of his workmen thought it would be an acceptable thing to turn a hose on the [appellant], and equally unsurprising that the Plaintiff would have viewed the act as justified."
The appellant submitted before the trial judge that it should be inferred from the cumulative effect of this evidence relating to various incidents that the conduct was condoned by the plaintiff. It was not sufficient for the plaintiff to establish that it was not he who had written the various offending messages. Accordingly, the plaintiff's submission that "either Mr Cosco did the writing in cement or he did not" was not an adequate answer to the inference sought to be drawn from the evidence. [48]
The appellant's submission should be accepted. To say that the plaintiff harassed the appellant by certain conduct may be substantially true if the conduct occurred, and it was conduct of the plaintiff's employee condoned by him, even if not expressly endorsed. The second matter addressed in imputation (5) was proved to be substantially true. However, that did not create a defence to the whole of this imputation, viewed in isolation from (i) other imputations, or (ii) the defamatory matter as a whole.
It is therefore necessary to address the second defence of contextual truth.

Contextual imputation (F) - reckless indifference to safety and comfort

On the basis that imputation (4) was conveyed by the publication, it must follow that contextual imputation (F) was also conveyed, it being a less serious imputation arising from the blocking of the vent with flammable expanding foam. Unless it were not possible to rely upon the substantial truth of imputation (4), which is not suggested, there is no reason to deal further with contextual imputation (F): it follows from the finding with respect to imputation (4) that this imputation is substantially true.

Contextual imputation (A) - malicious damage to property

The fact that the plaintiff was charged with malicious damage to property resulting from his action in blocking the vent is therefore related to the conduct the subject of contextual imputation (F). The judge accepted that (A) was plainly true and that it was a different imputation from those pleaded by the plaintiff. The trial judge accepted that it should be taken into consideration in assessing damages, but was not an imputation arising from the original interview between the appellant and the reporter, because it was not referred to in the course of that exchange.
This reasoning was correct; it reflects the manner in which the case was pleaded and run. Although the pleading of defamatory matter was limited to statements made in the course of the original interview, reliance was placed on the fact that the interview was given for the purpose of further publication on the television program and hence the republication was with the authority of the appellant. However, other defamatory statements made in the course of that program, which were substantially true, could not be relied upon for the purposes of providing a defence under s 26 in respect of the original publication of the defamatory matter.

Contextual imputation (B) - entering administration

Contextual imputation (B) alleged that the plaintiff had acted "dishonourably" when, having consented to judgment against him including the payment of costs, he entered administration with the objective of avoiding paying the debt. Critical to this claim is an understanding of the circumstances in which the costs order was made, by consent.
As noted above, development consent was granted on 3 June 2015. Work commenced on the property shortly thereafter, with a subcontractor undertaking excavation along the boundary between the appellant's and plaintiff's properties. On 18 August 2015 the appellant's solicitor wrote to the certifying authority advising that the excavation already extended below the base of the footings of his client's property and attached a surveyor's letter indicating that the excavation encroached on the appellant's land. An immediate stop work order was sought. The following day, being Wednesday 19 August 2015, the solicitor, Mr Grant Hansen, sent an email to the plaintiff advising that an urgent application would be made to the duty judge the following morning, as the encroachment had not ceased. Interim injunctive relief was granted on 20 August 2015.
On 28 August 2015 the proceedings were settled on condition that the plaintiff build a retaining wall by 28 September 2015 and the area between the wall and the boundary of the appellant's property was to be backfilled. A new fence was to be built by 9 October 2015. Finally, the plaintiff was to pay the appellant's costs of the proceedings. It was those costs, together with subsequent costs orders made against the plaintiff, which he failed to pay and were ultimately disposed of by entering into a personal insolvency agreement with a largely nominal distribution to creditors. The plaintiff gave evidence that he was in receipt of $100,000 per month by way of loans paid by his father and secured against the property he was building. He said, "There was money for the build, and then money for personal expenses, which was all part of the loan." [49]
The costs which the plaintiff agreed to pay were in the order of $52,000. Further costs orders made in the Land and Environment Court proceedings were not assessed, but there was an offer by the appellant's solicitor to settle the claim for a payment of a little over $100,000, together with the assessed costs of $52,000 with respect to the earlier agreement.
In cross-examination, it was put to the plaintiff that he could "easily have accessed funds to pay" the appellant, which he denied. [50] The questioner continued: "Q. You see, in fact you went into the personal insolvency agreement I suggest for the sole purpose of avoiding paying my clients? A. No, I went into the personal insolvency agreement in the - for the sole purpose of doing it on my own terms, and not having Ms Hutley and Mr Forward's liquidator come in and destroy me. Q. I don't quite understand that. Would you explain what you mean by that, Mr Cosco? A. Destroy me financially."
The plaintiff agreed that his father, Mr John Cosco, had paid his costs of the Land and Environment Court proceedings and the costs of the contempt proceedings. [51] He had paid the costs of proceedings in nuisance in the Supreme Court and was funding the plaintiff's costs of the defamation proceedings. He agreed that his father had been in court "the whole time", presumably meaning for the duration of the defamation proceedings up to that time. In addition, it was his case that his father paid a substantial sum to the private investigator.
A chronology of the proceedings in the final judgment in the Land and Environment Court set out the documentary history of the dispute in relation to the boundary and the excavation, noting that many of the communications with engineers and others involved in the work were from the plaintiff's father, who was present with the plaintiff when the agreement was reached.
Mr John Cosco was clearly involved in the settlement of the proceedings. If, despite owning a valuable residential property, the respondent had no means to pay the costs he was agreeing to pay, without assistance from his father, it would have been sharp practice on his part if he either agreed to pay the costs knowing that no moneys would be forthcoming or, not knowing whether his father would meet the costs, in failing to ask him that question before agreeing to the settlement. The settlement involved other expenditure in order to remedy the problems with the excavation. It should be inferred that father and son were acting together and that each was aware of what was required of him under the terms of the settlement. The costs were as much part of the development project as the payments to the excavator whose work gave rise to the trespass.
The language of the imputation is somewhat awkward: the term "dishonourable" is apt to apply to a person who engages in particular kinds of conduct, rather than describing a particular characteristic of the conduct. However, the appellant established on the balance of probabilities that the decision not to pay the costs, but to allow the respondent to seek relief under the Bankruptcy Act 1966 (Cth) was a joint decision of the plaintiff and his father. He cannot escape responsibility for what was in substance sharp practice in circumstances where he had obtained and continued to obtain money from his father for related activities, but did not obtain sufficient to pay what was clearly a cost of the construction work which his father was funding. In this sense the plaintiff acted dishonourably. The imputation was substantially true.

Contextual imputation (C) - behaving rudely and selfishly

The trial judge rejected this imputation, although the grounds for that conclusion are not entirely clear. [52] First, he cast doubt on what the term "bad neighbour" meant "in the context of this dispute or at all." Read in the context of the imputation itself, it should be understood to mean a person who behaved rudely and selfishly in his dealings with his neighbours. However, it appears that the imputation was dismissed on the basis that it covered nothing "in addition to" the imputations pleaded by the plaintiff. The judge concluded that the defamatory publication did not indicate that the plaintiff behaved "rudely or selfishly" "over and above the plaintiff's imputations and over and above the contextual [imputations] otherwise pleaded". [53]
This conclusion was challenged by the appellant. The language of "over and above" suggested that any contextual imputation must be potentially more damaging than the other contextual imputations combined and the most serious of the plaintiff's pleaded imputations or, perhaps, the combined effect of the plaintiff's imputations. However, that is no more true of contextual imputations than of a plaintiff's imputations. They frequently overlap and will usually vary in terms of the seriousness of the consequences for a person's reputation. It is sufficient that the contextual imputation is different from each particular imputation relied on by the plaintiff.
As to the substance of the imputation, it was no doubt true there was fault on both sides and that both the appellant and her husband on the one hand, and the plaintiff on the other, behaved rudely and acted without proper regard for the interests of the other side. It was clear to the civil standard of proof that the imputation was conveyed by the words used by the appellant and that the imputation was substantially true. Its adverse effect on the plaintiff's character was relatively limited.

Contextual imputation (D) - being a liar

The trial judge accepted that the evidence established at least three occasions on which the plaintiff lied on oath or lied to police. Although the judge did not accept that he had lied on oath in the course of the present proceedings, as the appellant submitted, on occasion he did. Nevertheless, the trial judge rejected the contextual imputation on two bases: first, he held that the imputation did not arise from the matter complained of; secondly, he held that it was necessary to establish that the plaintiff was "an habitual liar". [54]
In the course of the interview, the reporter told the appellant that the plaintiff had said that he (the plaintiff) felt that "he is the victim, that he's been a victim of ongoing bullying and harassment from your family"; the appellant responded, "I deny that completely." The trial judge set out this exchange and concluded: "[299] The denial by the defendant of a claim by the plaintiff is not an allegation that the plaintiff is telling a known untruth, which would be a necessary allegation if the imputation that he was a liar were to arise from the interview."
The following further statements were taken into account, but dismissed on a similar basis: "[300] The defendant relies upon [66], [69], [71] and [73] of the original interview, as well as the passage to which the Court has just referred. The reference to [66], is intended to be a reference to [67] of Schedule A which describes an allegation put to the defendant by the journalist that the plaintiff was merely 'trying to seal the vent to stop fumes escaping and protect his children who would be playing there' in which the defendant says, 'I just can't treat that as a serious answer'. And, in a second take of the answer for the purpose of the broadcast, the defendant replied 'that just can't possibly be true'. [301] Further, the defendant, in order to establish that this contextual imputation was conveyed, relies upon the defendant's response to being told that the plaintiff claims that he has 'been the victim of a long-running campaign of bullying and harassment' which was: 'It's outrageous. It's ridiculous and I completely deny it'. And, in a second take of that answer, responds 'oh that's completely untrue'. [302] The allegation of lack of truth at both [69] and [73] is a reference to the statement of fact, not the maker of the statement. In other words, the allegation or imputation rises no higher than a statement that facts are not true; it does not imply that the maker of the statement is lying or is a liar. This is especially so in circumstances where the ordinary reasonable viewer, hearing the interview, would understand that there would be claims, back and forth, between disputing neighbours and that each of them may have different perceptions of the same conduct. Denial, if it be limited to denial or a statement that a particular fact is untrue, does not, in the conclusion which I have reached, amount to an allegation that the plaintiff is a liar."
This reasoning cannot be accepted. No doubt the content of an allegation can be denied without calling the person who makes the allegation a liar. However, a vehement denial of the truth of a statement about conduct to which both were parties could well cause the listener who knows neither party, nor the circumstances of the events described, except through the descriptions provided by the appellant, to infer that she was calling the plaintiff a liar. It is more than probable that many people would draw that inference. Accordingly, the imputation was properly conveyed by several statements, and certainly the cumulative effect of several statements, made in the course of the interview.
Nor can the proposition be accepted that the imputation was not substantially true unless it were shown that the plaintiff was an habitual liar. It is true that there are lies and lies; it is also true that one might not characterise a person in general terms a "liar" unless he or she lied on more than one occasion. However, the plaintiff lied on a number of occasions, both when giving evidence on oath and when dealing with police. These lies were not insignificant or trivial: they exhibited an attitude towards authority which carried with it a significant qualification of his good reputation. The lies should be recorded.
When interviewed by police in relation to the allegation of malicious damage to property, namely the damage to the air vent on the side of the appellant's house, he was asked if he could tell the police "anything about any damage": he replied "Nup". That was a lie. He was then asked, "Did you at any stage apply something to the vent or touch it in any way?" To which he answered "No". That was a lie. He was asked further questions about the extractor fan and the vent, and whether he had expander foam on his site on the date in question. The officer then repeated the original question in precise terms: "So I will ask you again, did you damage the vent by placing expander foam inside to block it, whilst erecting your fence?" To which he replied "No".
This material gave rise to three lies in the course of a few minutes in circumstances where there could have been no doubt as to what the officer was asking and no doubt that the plaintiff lied. He was then shown a photograph of him in the act of squirting the can of expander foam into the vent and immediately said, "Oh jeez, that's funny. That's me blocking an illegal vent."
After the incident when the appellant was hosed on the footpath on 31 January 2016, he was asked by police for the identity of the person who did it and, as the trial judge found, "lied to the police". In giving evidence before the magistrate in the Local Court he volunteered the information that he had "no idea" who had written graffiti in the footpath: that, as the trial judge also accepted, was a lie on oath to the magistrate.
Given the nature of the lies and the circumstances in which they were told, the imputation that the plaintiff was a liar was established as substantially true.

Contextual imputation (E) - encroaching on neighbour's property during the excavation

The judge dealt with this imputation in the following passage: "[304] There was an encroachment during the course of an excavation. The evidence before the Court is clear. The plaintiff gave evidence that he encroached upon the defendant's property. [305] The encroachment was 100 mm clear of the common boundary and occurred 6 m underground. It occurred in the following circumstances. The rock was being cut; it was a large rock being cut by a 'huge rock saw' the contractor or worker 'obviously didn't have it dead plum'; and it angled at the very last cut; and it encroached at the very bottom of the excavation. [55] … [306] A number of facts are clear from the evidence that was adduced. First, it was not the plaintiff that was operating the rock saw. Secondly, a mistake was made by the worker who was operating the rock saw. Thirdly, the plaintiff was only aware of the encroachment after it had occurred. The evidence is inconsistent with the plaintiff 'knowingly' encroaching onto his neighbour's property. The substantial truth of the fifth contextual imputation is not established."
Senior counsel for the plaintiff noted that, although the judge dealt with the substantial truth of the imputation, he did not consider whether it was conveyed by the publication. She contended it was not conveyed. She further submitted that the sting of the imputation lay in the word "knowingly". The effect of that word was to require contemporaneous knowledge of the encroachment, on the basis that the encroachment occurred at a particular point in time, namely on the last cut being undertaken by a large rock saw at the bottom of the excavation. She submitted that the plaintiff had accepted in evidence that there had been an encroachment, but in terms consistent with him becoming aware of that fact after the event.
In the course of the interview with the reporter, the appellant referred to encroachment in a number of passages. Two of the passages were in general terms; however, the allegation was repeated in terms which referred expressly to excavation. The appellant stated: [56] "So when Mr Cosco started his construction, we had some concerns that the excavation was coming very close to our property and going across the boundary. We wrote to his certifier, we wrote to Mr Cosco obviously and we wrote to the council asking them to, you know, please step in and stop it. They wouldn't so we went to the Land and Environment Court and indeed it was found Mr Cosco had encroached on our property. We came to a settlement and he was to do certain things in a time frame. He didn't do those things within that time frame and again, we tried to negotiate with him and he refused to accept that we still thought there were concerns. So we went back to court for contempt proceedings and the court found in our favour that he had encroached …."
Contrary to the plaintiff's submissions in this Court, the imputation was undoubtedly conveyed. The element of knowing contravention may have flowed from either of two propositions: first, that the appellant wrote to the plaintiff asking him to desist but he did not; secondly, after the Land and Environment Court had found encroachment he did not take timely steps to rectify the situation so that the encroachment continued over a period of time. This gives colour to the temporal element in the imputation of knowing misconduct.
The evidence did not establish that the plaintiff knew that the excavation was encroaching when it took place. However, his acceptance of the finding of the Land and Environment Court establishes that, thereafter, he knew that the excavation encroached: he therefore knowingly allowed the encroachment to continue beyond a period within which he had agreed to rectify the situation. To this extent, the imputation was true: that element was sufficient to establish its substantial truth.

Effect of findings as to substantial truth of imputations

In the light of these findings it is necessary to turn to the operation of s 25 and s 26 of the Defamation Act.
The defence to plaintiff's imputation (5) was established in part only: the first part of the imputation cannot be ignored as immaterial, with the consequence that the imputation as a whole was not substantially true. That finding raises a question as to the effect of s 25 of the Defamation Act, which provides for a defence "to publication of defamatory matter". That language reflects the fact that a plaintiff has a single cause of action for defamation "in relation to the publication of defamatory matter" even if the matter carries more than one defamatory imputation: Defamation Act, s 8. Although it is true that the defence must be made out in whole, or it fails, there is a question as to whether the test is to be applied imputation by imputation, or by reference to the defamatory matter as a whole. In the present case, five imputations were pleaded. The defence of justification fails with respect to one part of an imputation limited in effect and relating to a minor aspect of the defamatory nature of the publication. In that case, it might be thought that the defence of justification has been established, because the defamatory material, viewed as a whole, has been shown to be substantially true. If that approach is not correct, it is necessary to consider the defendant's contextual imputations. The parties appeared to accept that that course is required.
There is then a live question as to the relationship between s 25 and s 26 of the Defamation Act. The first step in relation to the contextual imputations is to determine whether they are conveyed and whether they are substantially true. Assuming those matters are made good, the second step is to determine whether, because of the substantial truth of the contextual imputations, "the defamatory imputations do not further harm the reputation of the plaintiff". That step requires a weighing (or balancing) exercise, the parameters of which have never been definitively resolved.
The question is: which of the defamatory imputations pleaded by the plaintiff are to be placed in the scales for the purpose of the balancing exercise under s 26(b)? The possibilities are, (i) all the imputations pleaded by the plaintiff, (ii) those imputations pleaded by the plaintiff which are found to have been conveyed by the publication, (iii) those imputations conveyed and defamatory, or (iv) only those imputations conveyed and defamatory which are not substantially true.
One point is clear: as explained by McColl JA in Fairfax Media Publications Pty Ltd v Kermode, [57] s 26 does not permit a defendant to adopt any of the plaintiff's imputations as a contextual imputation, so as to place the plaintiff's imputations which are shown to be substantially true into the scale on the same side as the defendant's imputations. That practice, colloquially referred to as "pleading back", is precluded by the requirement in s 26 permitting the defendant to plead imputations "in addition to" those pleaded by the plaintiff, and prove that one or more of those "other" imputations was or were substantially true. [58]
However, the fact that the defendant cannot place on his or her side of the scale (as diminishing the plaintiff's reputation) any of the imputations pleaded by the plaintiff, whether substantially true or not, does not resolve the question as to what must be placed in the plaintiff's side of the scale. Of the first three options set out above, the least plausible is the first. That is, a balancing exercise dealing indiscriminately with all the pleaded imputations, including those found not to have been conveyed by the publication, would make a nonsense of the test of harm to the reputation of the plaintiff caused by the defamatory matter. The language of s 26(a) ("the matter carried … in addition to the defamatory imputations of which the plaintiff complains") appears to refer only to imputations which are conveyed and found to be defamatory. Of course, prior to a trial, the only exercise available on a strike out application may be to deal with the imputations as pleaded, but that merely casts doubt on the value of strike out applications brought on the pleadings. This reasoning applies equally to imputations found not to be defamatory; it would make no sense to give them any further role in the trial.
Accordingly, what should be placed in the scale on the plaintiff's side should be limited to those of the plaintiff's pleaded imputations which are found to have been conveyed and to be defamatory: the next question is whether they should include those proved to have been substantially true pursuant to s 25, or whether any true imputation should be excluded from the balancing exercise.
Although the answer to this question is not entirely clear, there is no doubt that the language of s 26(b) is consistent with the exclusion of any of the plaintiff's imputations which are shown to be substantially true. The exercise under s 26(b) requires consideration of "harm" to the plaintiff's reputation. The principle underlying both s 25 and s 26 is that a plaintiff cannot obtain damages for the publication of defamatory matter which is substantially true. It would undermine that principle if s 26(b) required the harm done by true contextual imputations to be weighed against the harm done by substantially true imputations pleaded by the plaintiff. Thus, both the ordinary meaning of the reference in s 26(b) to imputations not further harming the plaintiff's reputation, and a purposive approach to interpreting that language, support the conclusion that the plaintiff's imputations which have been shown to be substantially true should not be included in the weighing exercise under s 26(b). This conclusion is supported by an understanding of the underlying principles governing the tort of defamation, discussed below.
This approach is not inconsistent with the clear intention of s 26(a) to prevent a defendant adopting (pleading back) the plaintiff's true imputations, in order to place them on the defendant's side of the scale. Rather, it simply requires that the true imputations be disregarded. Secondly, while that exercise assumes a staged process of assessment, by which any defence under s 25 would need to be addressed before dealing with the balancing exercise under s 26, such a feature is not a disqualifying consideration. Section 26 itself must involve a staged process of first determining whether the publication "carried" the imputations, whether the imputations were substantially true and then undertaking the balancing exercise. This is an unremarkable exercise in a defamation case which inevitably requires consideration of various steps in an orderly fashion.
The language of s 26(a) ("the defamatory imputations of which the plaintiff complains") does not in terms exclude pleaded imputations which are found not to be conveyed. Yet common sense requires that the language must be read as implicitly identifying only those imputations which have been conveyed, and found to be defamatory (not merely those complained of). The language is also silent as to the exclusion of substantially true imputations, but the exercise of implicit exclusion is otherwise necessary; a purposive approach provides the best basis for determining the scope of such implicit exclusions. That approach supports the exclusion of substantially true imputations pleaded by the plaintiff, which should therefore be disregarded in the balancing exercise.
Finally, it may be said that the alternative approach (allowing the true imputations to remain in the scale on the plaintiff's side) does not produce injustice because evidence of the substantial truth of some of the plaintiff's imputations will be taken into account in assessing damages. However, if the substantially true contextual imputations would mean that the untrue imputations pleaded by the plaintiff caused no further harm to his or her reputation, then the question of damages should not arise. If, on the other hand, the plaintiff succeeds on liability because the contextual imputations do not prevent the plaintiff's imputations, taken as a whole from causing further harm to the plaintiff's reputation, there may be a strong case for awarding no (or nominal) damages. However, awarding no damages tends to render the finding of liability incoherent.
Although McColl JA in Kermode envisaged that the substantially true imputations pleaded by the plaintiff could be relied on "in mitigation of the plaintiff's damages" (described as "partial justification") [59] the construction preferred above is not inconsistent with that conclusion: it was simply not addressed. The present issue did arise, however, in Fairfax Digital Australia & New Zealand Pty Ltd v Kazal. [60] By that stage, it was apparent that differing approaches had been adopted in Mizikovsky v Queensland Television Ltd [61] and by a single judge in this Court, namely Beech-Jones J in Chel v Fairfax Media Publications (No 6). [62]
In Kazal, this Court was faced with a number of contradictory decisions; proper attention was given to whether the decisions identified the precise point in issue in Kazal itself and whether some opinions were obiter. It is first appropriate to note the issue which was raised in Kazal, as identified by Meagher JA: "[40] Fairfax's plea of contextual truth adopts as contextual imputations whichever of the imputations in the respondent's second further amended statement of claim as 'are found to be conveyed and defamatory' and 'substantially true'. Relying on Chel v Fairfax Media Publications (No 6) [2017] NSWSC 230 at [19], [42], [43] (Beech-Jones J), Fairfax submitted to the primary judge (McCallum J), and on appeal, that a defamatory imputation found to be substantially true ceases to be an imputation of which the plaintiff complains; that it thereby ceases to be one of the 'defamatory imputations' within s 26(b); and that, for that reason, and consistently with the conclusion in Kermode, it becomes capable of being adopted by a defendant as a contextual imputation and treated as such by a jury undertaking the weighing exercise in s 26(b). In purported application of Kermode, the primary judge rejected that argument: Kazal v Fairfax Media Publications Pty Ltd [2017] NSWSC 44 at [35] (McCallum J). The following considerations support the correctness of her Honour's conclusion in response to that argument."
A submission in those terms could be peremptorily dismissed: it was, as Meagher JA noted, inconsistent with the Court's approach in Kermode in relation to "pleading back". To disregard a substantially true imputation pleaded by the plaintiff in carrying out the balancing exercise under s 26(b) was one thing; to call it in aid on the defendant's side of the balance was quite another. The latter was arguably inconsistent with Kermode and was little more than a device to avoid the conclusion in Kermode. Kermode was an interlocutory application based on pleadings (as was Kazal). It turned on possible ways of reading the reference in s 26(a) to "the defamatory imputations of which the plaintiff complains" and the same words in abbreviated form in s 26(b), namely "the defamatory imputations".
There were three judgments in Kazal. McColl JA accepted that the prohibition on a defendant pleading back one of the plaintiff's imputations found to be substantially true meant that a substantially true imputation pleaded by the plaintiff could not flow through to "the defendant's side of the ledger." [63] McColl JA also agreed that a successful plea of substantial truth to a specific imputation did not mean the imputation "disappeared": it remained relevant in mitigation of damages, but also for the balancing exercise under s 26(b). Having regard to common law principles, she concluded that "it is clearly relevant for the tribunal of fact to consider that by reason of the substantial truth of one or more [plaintiff's] imputations, any presumption that the plaintiff's reputation has suffered damage by reason of the publication of that imputation has been rebutted and the plaintiff's reputation has, accordingly, already been lowered to that extent", although it does not "weigh the s 26(b) scales in the defendant's favour." [64]
Meagher JA noted that "[w]hether s 26(b) operates in that way was not in issue or the subject of argument in this appeal." [65] Nevertheless, he cast some doubt upon its correctness in the following passage, with which Gleeson JA agreed: [66] "[47] The reference in s 26(b) to the defamatory imputations further harming the plaintiff's reputation seems to presuppose that the substantial truth of the contextual imputations may (through publication) cause some 'harm' to the plaintiff's reputation. If that is so, the sense in which 'harm' is used in the provision would not be limited to actionable injuries at common law; instead, it would comprehend any lowering of a plaintiff's reputation in the community, whether deserved or not: cf Rofe v Smith's Newspapers Ltd (1924) 25 SR (NSW) 4 at 21-22 (Street ACJ). It would seem to follow that the substantial truth or falsehood of any of the defamatory imputations would be irrelevant in determining whether those imputations 'further harm' the plaintiff's reputation in the necessary sense."
The apparent simplicity of the text of s 26 is clearly seen as beset with problems. The purposive approach set out above as a basis for resolving the problems takes into account the common law principle explained by McColl JA in both Kermode and Kazal, namely that the purpose of an action in defamation is to vindicate a person's reputation on some point as to which he or she has been "falsely defamed". [67] McColl JA continued: "At common law once the plaintiff proved an imputation conveyed by the matter complained of to be defamatory, two matters at least were presumed. First, that some damage would inevitably be caused to the plaintiff's reputation by the publication of defamatory matter. [68] Secondly, that the matter complained was false. [69] "
The defence of substantial truth involved a rebuttal of these two presumptions. So much appeared from two earlier decisions quoted by McColl JA: "[10] First, in Rofe, [70] Street ACJ explained that under the common law: '… as the object of civil proceedings is to clear the character of the plaintiff, no wrong is done to him by telling the truth about him. The presumption is that, by telling the truth about a man, his reputation is not lowered beyond its proper level, but is merely brought down to it.' [71] (Emphasis added) [11] Secondly, in Chase v Newsgroup Newspapers Ltd, in the English Court of Appeal, Brooke LJ explained that a successful plea of justification is an absolute defence to a claim in libel because it shows, as a matter of objective fact, that a claimant is not entitled to the unblemished reputation which he/she claims to have been damaged by the publication of which complaint is made. [72] (Emphasis added)"
None of this denies the proposition that a "non-actionable" statement may harm a person's reputation: there is, however, a curious anomaly in the proposition that while a defendant can place in the scales for the balancing purpose imputations which are substantially true to demonstrate absence of "further harm", the plaintiff can rely upon imputations which are substantially true as if they caused actionable harm.
There is both principle and logic behind the proposition accepted by McColl JA that the plaintiff's imputation which is defamatory, but substantially true, has already lowered the plaintiff's reputation and that lowering should be accepted for the purposes of the balancing exercise under s 26(b), when assessing the effect of the substantially true imputations pleaded by the defendant. Nevertheless, that approach is perilously close to having the same effect as allowing the defendant to plead back the plaintiff's imputation so as to place it on the defendant's side of the balance. That would be to undermine the requirement of s 26 that the defendant cannot rely upon imputations other than those which are different from and in addition to the plaintiff's imputations. Accordingly, the preferable course is simply to remove from the balancing exercise the substantially true imputations pleaded by the plaintiff and ask whether the imputations not shown to be true caused harm beyond that caused by the true contextual imputations.
There remains a question as to whether this construction is precluded by the reasoning of the Queensland Court of Appeal in Mizikovsky. The ratio of the relevant passages in Mizikovsky is hard to identify. The relevant ground of appeal alleged that, in giving directions to the jury with respect to the s 26 defence, the trial judge had erred "in failing to direct the jury that they should only take into account the defamatory imputations which had not been found to be true in determining whether the appellant's reputation had not been further harmed because of the substantial truth of the contextual imputations". [73] The Court concluded that the trial judge was correct to instruct the jury that they should "take into account" all the defamatory imputations complained of by the plaintiff, including those which the jury found to be substantially true. [74] (How they were taken into account appears not to have been in issue.) Fraser JA continued: "[20] I would add that, as the respondents argued, the only effect of the jury taking into account the substantially true imputation in the assessment of the contextual truth defence was to make it more difficult for the respondents to succeed on that defence. If that was an error, it did not prejudice the appellant and it would not justify setting aside the judgment."
The reasoning in Mizikovsky sought to apply the reasoning of McColl JA in Kermode. In fact, as explained by McColl JA in Kazal, the reasoning relied upon, which must have depended upon how the case was presented, was not entirely in accord with her reasoning in Kermode. To the extent that McColl JA in Kazal disagreed with the conclusion reached in Mizikovsky, her reasoning is persuasive. Further, the point decided in Mizikovsky did not arise in Kermode. Finally, it is by no means clear why the appellant in Mizikovsky presented an argument apparently subversive of his interests. Given the curious circumstances in which the matter was argued before the Queensland Court of Appeal, in my view this Court should not feel bound to follow the conclusion reach in Mizikovsky.
In the longer term, this difficulty has been resolved by an amendment to s 26 which will allow a defendant to "plead back" imputations of the plaintiff which the defendant seeks to justify under s 25 as being substantially true. Success on those imputations will then have their full effect by being placed in the balance on the defendant's side. Nevertheless, the issue is, on one view, determinative in the present case and should be determined. Overall, the contextual imputations discussed below are less damaging than the overall effect of the plaintiff's imputations, disregarding the findings that most of the latter are substantially true. If the reasoning set out above is incorrect, and the contextual imputations held to be substantially true must be weighed against all of the plaintiff's imputations, giving full effect to their defamatory meaning, the plaintiff must succeed. On the other hand, because the only imputation pleaded by the plaintiff which is not substantially true has a relatively minor defamatory consequence for his reputation, the substantial truth of several of the contextual imputations would allow the defence to succeed.
The preferable construction of s 26(b), which is at least consistent with its ordinary meaning and is required by a purposive construction, means that the balancing exercise under s 26(b) places in the scales of harm the plaintiff's imputations to the extent only that they are not substantially true and, in the defendant's scale, the contextual imputations which are conveyed, and are substantially true. The result is that the plaintiff's imputations found to be substantially true are not to be placed in the scale on the defendant's side, nor are they used to diminish the reputation of the plaintiff prior to the balancing exercise being undertaken. The question to be determined is, therefore: do the plaintiff's imputations not found to be substantially true further harm the reputation of the plaintiff given the harm done by the substantially true imputations pleaded by the defendant?

Balancing exercise

Because the trial judge found that none of the contextual imputations were both conveyed and substantially true, he was not required to embark on the exercise prescribed by s 26(b). On the basis of the findings set out above, that exercise is necessary.
On the construction of s 26(b) set out above, the balancing exercise requires little analysis. If one discards the plaintiff's imputations established to be substantially true, the remaining imputation (5) can have had a quite limited effect on the plaintiff's reputation. By contrast, the cumulative effect of the contextual imputations (B)-(F) would have been substantial. Accordingly, it may readily be accepted (and should be accepted) that imputation (5) did no further harm to the plaintiff's reputation.

An alternative outcome

If, however, the approach to the balancing exercise under s 26(b) adopted above is incorrect, it is necessary to weigh the effect of the plaintiff's imputations taken as a whole, against the harm caused by the substantial truth of the defendant's contextual imputations. The result must be different: imputation (4) (endangering lives by blocking a vent with flammable foam which could have caused an explosion or fire in their home) is undoubtedly an extremely serious allegation. It would, as the judge found, have done significant harm to the plaintiff's reputation. Further, the general allegations of bullying, threats and harassment, dealing with conduct extending over a period of time and not limited to a single dangerous act, would have done further harm. By contrast, the contextual imputations were undoubtedly of a lesser character. Although their effects, noted above, would (other than (C)) have been significant, there can be little doubt that further harm was done by the plaintiff's imputations.
On that approach, liability was established. However, it would then be necessary to reassess the damages awarded by the trial judge, taking into account the substantial truth of the plaintiff's imputations and the contextual imputations, as found above. Because all the serious allegations were substantially true, the only possible outcome is to award nominal damages. A conventional figure is $100. Accordingly, if the preferred course (which would lead to a finding of no liability) were not adopted, the amount of damages to be awarded would be $100.

Costs

The appellant has been successful on the appeal and should have her costs in this Court.
So far as the costs of the trial are concerned, on the preferred approach set out above, the plaintiff was entirely unsuccessful and, accordingly, the order for costs made by the trial judge should be set aside and the plaintiff ordered to pay the defendant's costs of the trial. Even if nominal damages were awarded, the same result should follow.

Orders

The foregoing reasons should result in the following orders: 1. Allow the appeal and set aside orders (1)-(5) made in the Common Law Division on 13 July 2020. 2. In lieu thereof: 1. order that the amended statement of claim dated 3 March 2017 be dismissed; 2. order that the plaintiff pay the defendant's costs of the proceedings in the Common Law Division. 1. Order that the respondent pay the appellant's costs in this Court. 2. If sought, grant the respondent a certificate under the Suitors' Fund Act 1951 (NSW).
MACFARLAN JA: I agree with the judgment of Basten JA and with his Honour's proposed orders. In particular, I agree that: 1. With one limited qualification, the appellant established the substantial truth of the imputations pleaded by the plaintiff. Most importantly, the appellant established the substantial truth of Imputation (4) which was that the plaintiff "endangered the lives of Vanessa Hutley and her family by blocking a vent with flammable foam that could have caused an explosion or a fire in their home". Further, the appellant established the substantial truth of other serious imputations such as that the plaintiff bullied the appellant and her family. This was so notwithstanding that, as Basten JA points out, findings by the primary judge that the appellant and her husband had been abusive of the plaintiff and his workers on the site next door were not open to challenge. 2. The appellant also established that a number of contextual imputations that she pleaded were conveyed and were substantially true. The lies that the plaintiff was proved to have told to the police and the Local Court amply justified the imputation that the plaintiff is a liar. 3. On the basis that, in the balancing exercise for which s 26(b) of the Defamation Act provides, the plaintiff's imputations that have been established to be substantially true are excluded from consideration, Imputation (5), which in part was not shown to be substantially true, did not "further harm" the reputation of the plaintiff because of the substantial truth of a number of the contextual imputations.
On this basis, the appellant's defences under ss 25 and 26 of justification and contextual truth succeeded and her appeal should be allowed.
WHITE JA: I agree with Basten JA.

Endnotes

Cosco v Hutley (No 2) [2020] NSWSC 893 ("Cosco").
Amended statement of claim, Sch A, pars 12, 17 and 55.
Cosco at [208].
Cosco at [255].
Cosco at [7].
Cosco at [9].
Cosco at [13].
Cosco at [16]-[28].
Cosco at [29]-[91].
Cosco at [92]-[128].
Cosco at [129]-[133].
Cosco at [135]-[153], [164].
Cosco at [164]-[335].
Cosco at [310]-[335].
Amended statement of claim, Sch A, par 17: part of second passage set out at [6] above..
Amended statement of claim, Sch A, par 111.
Tcpt, 11/04/19, p 379(20).
Tcpt, p 377(45).
Tcpt, p 378(38).
At [185] the judge referred to the expert evidence being relied upon in relation to "this contextual imputation": however, otherwise the whole section now under discussion appeared to deal with imputation (4).
If it were subjective and proved to the criminal standard, which is unnecessary in these proceedings, it is a capital offence, carrying 25 years' imprisonment. It is fundamentally more serious than an offence under s 195(1)(a) of the Crimes Act: see Crimes Act, s 198 (intent to endanger life) and s 196 (intent to cause injury).
Cosco at [189].
Tcpt, 08/04/19, p 87(7)-(17).
Tcpt, p 162(13).
Cosco at [256].
Cosco at [87] and tcpt, pp 342-343.
Cosco at [89].
As counsel for the appellant noted, the rest of [202] appears to be unrelated to that sentence, dealing with a submission as to onus of proof.
Tcpt, 08/04/19, pp 94(32)-95(29).
Complaint, p 3, par 2.
Cosco at [250].
Cosco at [258].
Cosco at [258].
Cosco at [259].
Cosco at [278].
Cosco at [262].
Tcpt, p 266(48).
Cosco at [261].
Cosco at [211].
Tcpt, p 200(24).
Tcpt, p 201(50).
Tcpt, p 195(23).
Tcpt, p 196(20)-(34).
Tcpt, p 203(9)-(38).
Tcpt, p 158(33).
Tcpt, p 201(23)-(45).
Defendant's closing submissions, par 58.
Respondent's written submissions, 9 December 2020, par 24.
Tcpt, p 219(45).
Tcpt, p 225(38).
Tcpt, p 226924)-(30).
Cosco at [290].
Cosco at [290].
Cosco at [291]-[297].
Tcpt p 209, (1)-(13)..
Amended statement of claim, Schedule A, par 12.
(2011) 81 NSWLR 157; [2011] NSWCA 174 (Beazley and Giles JJA agreeing).
Kermode at [70]-[71], [77]-[82].
Kermode at [86(c)].
(2018) 97 NSWLR 547; [2018] NSWCA 77.
[2014] 1 Qd R 197; [2013] QCA 68 (Fraser JA, Holmes JA and Fryberg J agreeing)..
[2017] NSWSC 230 at [42]-[44].
Kazal at [23].
Kazal at [32].
Kazal at [46].
Kazal, per Gleeson JA at [150].
Kazal at [6].
Ratcliffe v Evans [1892] 2 QB 524 at 528; Gatley on Libel and Slander (12th ed, 2013, London, Sweet & Maxwell) at [32.51].
Roberts v Camden (1807) 9 East 93 at 95; 103 ER 508 at 509; Singleton v Ffrench (1986) 5 NSWLR 425 at 442 (McHugh JA; Samuels JA agreeing); The Age Co Ltd v Elliot (2006) 14 VR 375; [2006] VSCA 168 at [15] (Buchanan JA; Chernov JA agreeing); at [20] (Ashley JA).
Rofe v Smith's Newspapers Ltd (1924) 25 SR (NSW) 4, 21-22.
Rofe at 21-22.
[2002] EWCA Civ 1772 at [33] (Rix and Keene LJJ agreeing).
Ground (c) in Mizikovsky as the heading before [11].
Mizikovsky at [19].

Amendments 14 September 2021 - [24] Replaced "could've" to "could have" [52] Amended "conversations" to "conversation" [69] Amended "...flue was..." to "...flue were..." [99] Amended first date to read "28 August 2015" [109] Inserted comma after "submitted" and before "on occasion" [112] Replaced "give rise to the inference in" with "cause" and "might well" with "to". [128] Inserted "first" before "three". [135] In quote amended "Fairfax Medica" to "Fairfax Media" Foonote 56 - "Amendment" to "Amended" Footnote 70 - Amended citation to (1924). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 September 2021

Suitors' Fund Act 1951(NSW)

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