Jones v John Fairfax Publications Pty Ltd & Anor

Supreme Court of NSW|2005-03-29|Before: Simpson J

CITATION : Jones v John Fairfax Publications Pty Ltd & Anor [2005] NSWSC 1133

DECISION : (i) the plaintiff's notice of motion is dismissed; (ii) the defendants' notice of motion is dismissed.

CATCHWORDS : defamation - jury finding one imputation conveyed and defamatory - plaintiff pleads publication "throughout Australia" - plaintiff seeks leave to amend statement of claim or to discontinue interstate claims - SRC Pt 21 R 2, UCPR Pt 2 R 2 - defendants seek leave to amend their defence - when defamation trial begins - when hearing of proceedings on defamation claim begins - defence of truth - whether a defence of truth at common law available in NSW - whether Defamation Act 1974 (NSW) s15 is unconstitutional and invalid - whether Polly Peck defence available in NSW - whether defence of partial justification available in NSW - whether s15 interferes with constitutional freedom of communication, interstate intercourse - discrimination between residents of different states

Broadcasting Services Act 1992 (Cth) Defamation Act 1974 (NSW) s7A, s9, s11, s15, s16, s22 Judiciary Act 1903 (Cth), s78B LEGISLATION CITED : Supreme Court Act 1970, SCR Part 21 Rule 2, SCR Part 15 Rule 26, SCR Part 67 Rule 11(3) , Civil Procedure Act 2005, UCPR Part 14 Rule 28 Constitution of Australia s92, s117

Australian Capital Television Pty Ltd & Ors v The Commonwealth of Australia [1992] HCA 45; 177 CLR 106 Castlemaine Tooheys Ltd v South Australia [1990] HCA 1; 169 CLR 436 Chakravarti v Advertiser Newspapers Ltd [1998] HCA 36; 193 CLR 159 Cole v Whitfield [1988] HCA 18; 165 CLR 360 Cunliffe v The Commonwealth [1994] HCA 44; 182 CLR 272 David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667 Dr Manock v Advertiser News-Weekend Publishing Co Ltd [2004] SASC 164 Flick v Nash NSWCA 518 of 1986, unreported 9 February 1987 John Fairfax Publications Pty Ltd & Anor v Jones [2004] NSWCA 205 Jones v John Fairfax Publication Pty Ltd & Anor [1999] NSWSC 892 CASES CITED : Jones v John Fairfax Publications Pty Ltd & Anor [2002] NSWSC 1211 John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; 203 CLR 503 Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 Maisel v Financial Times, Ltd (No 1) [1915] 84 LJKB 2145 Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 Nationwide News v Wills [1992] HCA 46; 177 CLR 1 Polly Peck (Holdings) Plc & Ors v Trelford & Ors [1986] QB 1000 Stephens & Ors v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211 Theophanous v Herald and Weekly Times [1994] HCA 46; 182 CLR 104 Whelan & Anor v John Fairfax Publications Pty Ltd & Ors [2002] NSWSC 1028; 56 NSWLR 89 Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1

Alan Jones - Plaintiff PARTIES : John Fairfax Publication Pty Ltd - 1st Defendant David Leser - 2nd Defendant

T Blackburn SC with D Sibtain - Plaintiff COUNSEL : S Rares SC with R Glasson - Defendants MG Sexten SC with JK Kirk - NSW Attorney-General (intervening)

Blake Dawson Waldren - Plaintiff SOLICITORS : Freehills - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

20340/99 Alan Jones v John Fairfax Publications Pty Ltd & Anor

JUDGMENT 1 HER HONOUR: The issues that arise for determination in these rather unusual proceedings are identified in paragraphs 19, 29, 35, 40, 48, 58, 65, 66, 83 and 110 below. At the moment it is convenient to recite a little of the history and background to the proceedings.

history and background 2 The principal proceedings were commenced by statement of claim filed on 23 July 1999. The plaintiff (who, it is common ground, is a well-known radio broadcaster and commentator) claims that, in the edition of a daily newspaper (the Sydney Morning Herald) of 20 July 1999, the defendants published two imputations that defamed him. He expressly pleaded that the Sydney Morning Herald, and therefore the defamatory imputations, were published "throughout Australia". The subject matter of the article of which he complains was an arrangement said to have been made by the plaintiff and the AMP Society (an insurance company), pursuant to which, in return for the plaintiff's ceasing publicly to criticise the AMP, AMP financially supported a football club in which the plaintiff was involved. The plaintiff claims damages. 3 On 29 February 2000, in a trial under s7A of the Defamation Act 1974 (NSW) ("the Act"), a jury found that one of the imputations pleaded had been conveyed and was defamatory of the plaintiff. That imputation was in these terms: "The plaintiff was a dishonest broadcaster in that he secretly agreed with the AMP Society that he would cease to criticise the AMP Society on air in return for the AMP Society agreeing to provide a substantial benefit to the South Sydney Rugby League Club of which he was Director of Football." 4 This imputation has been referred to as "the plaintiff's imputation", and I shall, on occasions, adopt that phraseology. 5 On 18 March 2002 the defendants filed a defence. They admitted publication in NSW, but did not admit publication "throughout Australia". They denied that the publication was capable of conveying the plaintiff's imputation, and denied that it was capable of being defamatory of him. (These two matters were, in any event, foreclosed by an earlier decision of Levine J in Jones v John Fairfax Publication Pty Ltd & Anor [1999] NSWSC 892, unreported, 3 September 1999.) The defendants raised a number of specific defences. Under a heading "NSW DEFENCES", the defendants pleaded a defence of contextual truth, pursuant to s16 of the Act. In doing so they identified six additional imputations which they claimed had also been conveyed by the publication, which were defamatory of the plaintiff and which were substantially true and either related to a matter of public interest or were published under qualified privilege. The first of the imputations so pleaded (which have been referred to as "the defendants' imputations") was: "(a) The plaintiff was a dishonest broadcaster." 6 The only other defence pleaded under this head (that is, in respect of the NSW publication) was a defence of qualified privilege, which was particularised later in the defence so as to raise that defence both under s22 of the Act, and at common law. 7 Under a second heading, "INTERSTATE DEFENCES", the defendants pleaded various defences available under the law applicable in the different states and territories. Inter alia, in respect of each state and territory of Australia other than NSW they pleaded defences of the kind commonly referred to as "Polly Peck" defences, because they are derived from the decision of the English Court of Appeal in Polly Peck (Holdings) Plc & Ors v Trelford & Ors [1986] QB 1000. The formulation of the defences varied slightly with respect to different states and territories, dependent upon the perception of the applicable law in those states and territories; but, in each case, six additional imputations, in identical terms to those pleaded under s16 of the Act, were alleged to have been conveyed, and to be substantially true. 8 On 18 December 2002 Levine J struck out those parts of the defence that pleaded contextual truth under s16 of the Act, and also the Polly Peck defences in relation to the other states and territories: Jones v John Fairfax Publications Pty Ltd & Anor [2002] NSWSC 1211. 9 The defendants appealed to the Court of Appeal (Spigelman CJ, Hodgson and Ipp JJA). By majority (Spigelman CJ and Ipp JA) the court upheld Levine J's orders striking out the NSW contextual truth defence, but (again by majority, but on this occasion constituted by Hodgson and Ipp JJA) held that, to the extent that the interstate defences relied upon the additional imputation that the plaintiff was a dishonest broadcaster, they ought not to have been struck out: John Fairfax Publications Pty Ltd & Anor v Jones [2004] NSWCA 205. The court therefore reinstated the Polly Peck defences so far as they relied upon that single imputation. 10 The effect of the Court of Appeal decision is that, as the pleadings presently stand, the defendants are permitted to present defences to the interstate publications alleging, in effect (and putting it too broadly for precision) that, in addition to the plaintiff's imputation, found by the jury to have been conveyed and to be defamatory, they published the defendants' imputation; that that imputation also defamed the plaintiff; that it was substantially true, and that, by reason of the substantial truth of the defendants' imputation, the publication of the plaintiff's imputation did not further injure his reputation. (I do not pretend that this is a complete paraphrase of the defence as pleaded, but it is sufficiently accurate for present purposes.) 11 On 19 November 2004 the defendants filed a notice of motion seeking leave to file an amended defence. A quick reading of the then proposed amended defence suggests that it was drafted to accommodate the orders of the Court of Appeal and removed those additional imputations which the Court of Appeal had not reinstated. However, on 14 February 2005 the defendants filed an amended notice of motion, in which the same order (for leave to file an amended defence) was sought, but on this occasion the amendments proposed were very much more substantial. The proposed amendments to the plaintiff's NSW claim are set out in full below. (paragraph [37]) 12 The plaintiff opposes the grant of leave sought by the defendants. This notice of motion is one of the proceedings for present determination. 13 The decision of the Court of Appeal prompted the plaintiff also to file a notice of motion, which he did on 26 November 2004. In this notice of motion, in its original form, the plaintiff sought leave to file an amended statement of claim. The effect of the amendment then sought was the deletion of the pleading that the defendants had published the Sydney Morning Herald (and therefore the plaintiff's imputation) "throughout Australia" and specifically to limit his claim to the publication that he alleges occurred in NSW. If this amendment were granted, the plaintiff's claim would be limited to the publication in NSW, and there would (again, on the pleadings as they presently stand) remain no scope for the defendants to seek to establish that they had published their additional imputation, that the plaintiff was a dishonest broadcaster, or, more importantly, that that imputation was substantially true, or that by reason of the substantial truth of that imputation, publication of the plaintiff's imputation did not further injure his reputation. There are obviously very significant potential benefits to the plaintiff if such an order were to be made. He would not be exposed to litigating the truth of the imputation in general terms that he was a dishonest broadcaster. 14 On 14 February 2005 the plaintiff filed an amended notice of motion. He continued to seek leave to file the amended statement of claim, but sought, additionally, leave to discontinue the proceedings so far as they claimed relief in respect of the alleged publication of the imputation in the states and territories other than NSW. This was, presumably, a recognition that, by so pleading, he was asserting causes of action separate from the cause of action constituted by the publication in NSW. 15 The grant of either order is opposed by the defendants. This is the second matter for present determination. 16 The amendments sought by the defendants to be made to the defence are extensive and involve novel questions of law. What they seek to do, in respect of the publication in NSW, is:

(i) to raise a defence pleaded in terms of s15 of the Act, asserting that the plaintiff's imputation is a matter of substantial truth and either relates to a matter of public interest or was published under qualified privilege, or both; (as will be seen below, the terms of this pleading are apt to disguise the true intent of the pleader, which is not confined to pleading a defence under s15); and (ii) to raise a Polly Peck defence in respect of the NSW publication; and (ii) to raise a common law defence of partial justification. 17 As I have said, the issues that arise are novel and in some respects involve the application or interpretation of the Australian Constitution. Accordingly, Notice under s78B of the Judiciary Act 1903 was given to the Attorneys-General of the Commonwealth and the States and Territories of Australia. In the Notice the intention of the proposed amendments was stated, relevantly for present purposes, as follows: "9.(a) ... ;

(b) to add a plea of truth at common law and/or pursuant to the implied constitutional freedom of communication on government and political matters ( 'the Constitutional freedom' ) in each State and Territory in terms of the Defendants' Imputations;

(c) in the alternative, or in addition to (b), to allege that that defence has additional elements in terms of s15(2)(b) of the NSW Act namely that the Defendant's Imputation relates to a matter of public interest or is published under qualified privilege." 18 Only the Attorney-General of NSW exercised the right to intervene. He provided written and oral submissions to which I will come in due course. 19 The questions for determination are, therefore:

(i) whether the plaintiff should be given leave to amend the statement of claim or to discontinue the interstate components (or causes of action) of his claim;

(ii) whether the defendants should be granted leave to amend their defence as proposed. 20 So to frame the questions masks the true complexity of the issues raised. 21 Although it was filed second in time, it is convenient to deal first with the plaintiff's notice of motion. It is logical to resolve first just what originating process is to be the foundation for the litigation. Even this apparently simple issue is not without its complications.

the plaintiff's notice of motion: leave to amend the statement of claim 22 At all relevant times except the time of judgment (that is, up to and including the time of hearing) the Rules made pursuant to the Supreme Court Act 1970 applied; SCR Part 21 Rule 2 provided: "Discontinuance 2. A party making a claim for relief may, before the beginning of the trial or hearing of the proceeding on the claim (but not otherwise), discontinue the proceeding so far as concerns the whole or any part of any claim for relief made by him: (a) where he or his solicitor certifies that he does not represent any other person and all other parties having an address for service in the proceeding consent, or (b) with the leave of the court." 23 In Flick v Nash, unreported, 9 February 1987, the Court of Appeal held that the effect of SCR Part 21 Rule 2 is that once a trial has commenced no discontinuance, by leave or otherwise, is permissible and the action can be disposed of only by judgment. 24 After judgment was reserved, but before it could be delivered, the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules ("UCPR") made thereunder came into effect. By Clause 5 of Schedule 6 of the Civil Procedure Act, that Act and the UCPR apply to proceedings commenced before the commencement of that Act in the same way as they apply to proceedings commenced on or after that commencement; by sub-cl(2), a court before which proceedings have been commenced before the commencement of the Civil Procedure Act may dispense with the requirements of the UCPR and make appropriate consequential orders. 25 SCR Part 21 Rule 2 is not replicated in the UCPR. UCPR Part 12 Rule 2 appears to be the nearest counterpart to SCR Part 2 Rule 2, but is considerably less restrictive. It provides: "Discontinuance of claim by leave 12.2 The court may grant leave to a plaintiff to discontinue proceedings: (a) so far as they concern the whole of the plaintiff's claim for relief, or (b) so far as they concern a particular defendant."

The rule does not limit the power of the court to grant leave to discontinue to cases in which the trial or hearing has not commenced, as does SCR Part 21 Rule 2. 26 As a consequence, I invited the parties to make submissions as to any relevant effect of UCPR. The parties responded to the invitation. They agreed that the correct approach is to proceed as though SCR Part 21 Rule 2 were still in force. I am satisfied also that is appropriate. 27 The defendants do not consent to the discontinuance of the proceedings by the plaintiff on the interstate claims. Accordingly, if he is to be permitted to do so, he needs the leave of the court. This is so whether the leave is sought under SCR Part 21 Rule 2, or under UCPR Part 15 Rule 2.

SCR Part 21 Rule 2 28 The question that arises under SCR Part 21 Rule 2 does so solely because of the unique provisions relating to the conduct of defamation claims in this jurisdiction. By s7A of the Act, proceedings for defamation are to be determined in a three-stage process. The first stage involves the determination by a judge of whether the matter complained of is reasonably capable of carrying the imputation pleaded, and, if so, whether the imputation is reasonably capable of bearing a defamatory meaning (s7A(1)); the second stage involves a jury in deciding whether the matter complained of in fact carries any imputation pleaded, and if so, whether that imputation is in fact defamatory (s7A(3)). Where the jury returns an affirmative verdict in respect of any one or more of the pleaded imputations, the third stage involves a judge determining whether any defences raised by the defendant are established, and the amount (if any) of damages to be awarded to the plaintiff (s7A(4)). As a matter of practice it is ordinarily not the same judge who determines the capacity issues, who presides over the jury trial that is the second stage, and who determines the defence and damages issues that are the third stage. 29 Because, under SCR Part 21 Rule 2, leave may not be granted after: "...the beginning of the trial or hearing of the proceedings on the claim ..."

it is necessary to consider the interpretation of those words in the context of the resolution of a defamation claim. What is "the trial" or the "hearing of the proceedings on the claim"? On behalf of the defendants it was submitted that the trial commenced with the proceedings before the jury under s7A(3); and that, notwithstanding the fragmentation of the process required by s7A, that "trial" would continue, with the third stage, the hearing of the defences by a judge, as part of the same trial. If this is accepted, then there is no power to grant the leave the plaintiff seeks. On behalf of the plaintiff it was submitted that there are, in defamation proceedings, in fact two trials, one of which has concluded, but the second of which has not commenced. If that is accepted, then the court retains the power, if appropriate to do so, to grant leave to the plaintiff to discontinue. (Nobody suggested that "the trial" or the "hearing of the proceedings on the claim" began with any determination of capacity questions.) 30 There appears to be no authority relevant to this question. It is apparent from the judgment in Flick v Nash that SCR Part 21 Rule 2 was amended, with effect from July 1985. What does not appear from that judgment, or from any material to which I was referred, was the form of the Rule prior to amendment, or the foundation for its amendment. 31 Counsel who appeared for the plaintiff suggested that the words "the trial" are apt to apply to proceedings in this Division, while the words "hearing of the proceedings on the claim" are apt to refer to proceedings in the Equity Division. The distinction was sought to be made because the words "hearing of the proceedings on the claim" might be thought to have a broader application than the words "the trial". 32 I see no reason to make the distinction proposed. In my opinion, the words "beginning of the trial" and the words "hearing of the proceedings on the claim" were intended to encompass all proceedings in the court. The "proceedings on the claim" are the processes of the court involved in the resolution of the plaintiff's claim for damages consequent upon the publication by the defendants of imputations that defamed him. Those proceedings commenced no later than when the jury trial began. It makes no difference that the process is fragmented: once the jury had embarked upon its task, the "hearing of the proceedings on the claim" had commenced, and SCR Part 21 Rule 2 precluded the grant of leave to discontinue. I have come to the view that, by reason of the s7A(3) trial, the "hearing of the proceedings on the [plaintiff's] claim" has commenced. I am reinforced in this view by the verdict delivered by the jury. In finding one imputation pleaded by the plaintiff conveyed, and the other not conveyed, they finally determined one of the causes of action. That is because the consequence of a jury verdict under s7A(3) adverse to a plaintiff is the entry of a verdict for the defendant on that cause of action.

UCPR Part 12 Rule 2 33 Although, if UCPR Part 12 Rule 2 is the applicable rule, the court would not be without power to grant leave to the plaintiff to discontinue, I would, in any event, as a matter of discretion, have come to the same result. Sub-clause (2) of Schedule 6, clause 5 is, in my view, wide enough to permit the court, in an appropriate case, to dispense with the application of UCPR and have regard to SCR as they existed at the times the parties made material decisions about the litigation. The pleading has been part of the plaintiff's claim since its inception. The defendants have vested considerable time and energy in formulating defences to that part of the claim. It has been the subject of a ruling in this Division (by Levine J) followed by an appeal to the Court of Appeal. It was the SCR that applied at the time of the hearing of the notice of motion. 34 Discontinuance does not necessarily produce finality. In theory, at least, it would be open to the plaintiff to re-commence proceedings on the interstate claims. While that might seem to be most unlikely (having regard, among other things, to the date of the publication), and counsel were instructed to undertake that the plaintiff would not recommence proceedings on the interstate claims, the fact remains that the defendants had claims made against them which they have gone to some lengths to defend. They are entitled to judgment one way or the other on those claims. Should the plaintiff not wish to proceed with those claims then he must suffer judgment against him on them.

leave to amend 35 No detailed argument was advanced in respect of the claim for leave to amend the statement of claim as distinct from discontinuing the interstate claims. The only amendment sought is the deletion of the words "throughout Australia". To grant leave to make that amendment would be to grant leave, by the back door, to the plaintiff to do what I have just ruled he cannot do by the front door. As a matter of discretion, it seems to me that it would be wrong to take such a course. 36 Accordingly, the plaintiff's notice of motion is dismissed.

the defendants' notice of motion: application for leave to amend the defence 37 The substance of the proposed amendments is to be found in paragraph 4 of the draft amended defence. That may be set out in full: " NEW SOUTH WALES DEFENCES 4. Further and in the alternative, in answer to paragraph 5 of the Statement of Claim in respect of the publication of the matter complained of in New South Wales , the defendants say that: (a) the plaintiff's imputation: (1) is a matter of substantial truth; and (2) (A) relates to matters of public interest; and/or" (B) was published under qualified privilege. (b) further and in the alternative: (1) the matter complained of, in its natural and ordinary meaning, meant and was understood to mean: The plaintiff was a dishonest broadcaster ('the defendants' imputation') (2) the defendants imputation was true in substance and in fact; (3) the defendants imputation was not separate or distinct from the plaintiff's imputation; (4) to the extent to which the defendants prove the truth of the defendants' imputation, the matter complained of and/or the plaintiff's imputation was true in substance and in fact; (5) further and in the alternative, by virtue of the substantial truth of the defendant's imputation, the plaintiff's reputation was not further injured by the plaintiff's imputation or the matter complained of; (6) in the premises, the defendants are not liable to the plaintiff as alleged, and, if (which is denied) they be found to have proved partially but not fully that one or more of the plaintiff's imputation, the defendants' imputation and/or the matter complained of was or were a matter of substantial truth or was or were true in substance and in fact, to that extent the plaintiff's entitlement to damages is thereby extinguished or reduced; (7) further or alternatively, the defendants' imputation relates to a matter of public interest and/or was published under qualified privilege. (c) further and in the alternative, the matter complained of was published on an occasion of qualified privilege." 38 Paragraph 4(a) is a conventional plea of substantial truth in conformity with s15 of the Act. In written submissions filed on behalf of the defendants, it was stated that the proposed amendment is also intended: "(b) to plead a Polly Peck defence at common law in respect of the publication in New South Wales in the terms of the Defendants' Imputation; (c) ... to add a plea of truth at common law and/or pursuant to the implied constitutional freedom of communication on government and political matters ... in each State and Territory in terms of the Defendants' Imputation;

(d) in the alternative or in addition to (c), to allege that that defence has additional elements in terms of s15(2)(b) of the NSW Act, namely that the Defendants' Imputation relates to a matter of public interest or is published under qualified privilege; and

(e) to plead partial justification at common law in terms of Maisel v Financial Times Ltd [(1915) 84 LJKB 2145]."

What was asserted in sub-paragraphs (c) and (d) was also asserted in the s78B Notice. Notwithstanding what was there stated, and whatever might have been in the pleader's mind, paragraph 4 contains nothing that could convey an intention to plead either of the matters set out in these sub-paragraphs.

the proposed s15 defence 39 S15 of the Act is in the following terms: "15 Truth generally

(1) Notwithstanding section 11, the truth of any imputation complained of is not a defence as to that imputation except as mentioned in this section.

(2) It is a defence as to any imputation complained of that: (a) the imputation is a matter of substantial truth, and (b) the imputation either relates to a matter of public interest or is published under qualified privilege."

To state the obvious, the effect of s15 is that a defendant cannot, under that section, successfully defend a defamation action merely by proving the truth of the imputation pleaded. In order successfully to defend such an action on the basis that an imputation is substantially true, the defendant must prove, not only that the imputation is a matter of substantial truth, but also either that it relates to a matter of public interest, or was published under qualified privilege. 40 There is no technical defect in the manner in which paragraph 4(a) is pleaded, and no reason, if the defendants are able to prove the necessary ingredients of the defence, that leave should not be granted. It was accepted that the imputation relates to a matter of public interest. That leaves only for determination whether the defendant ought to be permitted to embark upon the task of proving the substantial truth of the plaintiff's imputation. Particulars of the proposed defence under s15 were subscribed to the proposed defence. It was these particulars that provided the basis for the plaintiff's opposition to leave being granted to the defendants to amend in accordance with paragraph 4(a). The particulars are, counsel for the plaintiff contended, inadequate to establish the substantive truth of the imputation as pleaded. The particulars upon which the defendants proposed to rely to establish the substantial truth of the plaintiff's imputation (on which they would also seek to rely to establish the truth of the defendants' imputation) are extensive and need not be here repeated in full. They include, however, assertions that the plaintiff entered into "sponsorships" with a number of sponsors pursuant to which he agreed to provide a range of services in return for the payment of substantial benefits to him or at his direction; that substantial payments in accordance with those arrangements were made; and that, as a consequence of having made those agreements, the plaintiff "changed his on-air conduct in favour of the sponsors" in identified respects; and that, at no time during the broadcasts, did he disclose the existence of the sponsorship agreement. 41 There is, however, no reference in any of this material to the AMP Society. It will be recalled that the plaintiff's imputation is confined to the assertion that the matter complained of conveyed the imputation that he was a dishonest broadcaster because of a specific agreement with that organisation. 42 In written submissions counsel for the defendants contended that the Court of Appeal has already determined that it is open to the defendants to plead truth under s15(2) at a time when the same particulars were being pleaded in support of the interstate defences. The submission was made expressly in response to the contention of counsel for the plaintiff that the particulars are inadequate to establish the truth of the imputations. In my opinion counsel's submission represents a distortion of the judgments. Two paragraphs in the judgments, one in the judgment of Hodgson JA, and the other in the judgment of Ipp JA, were cited as a determination to the effect asserted. There is nothing in either paragraph that could reasonably be said to represent a finding that the plaintiff's imputation could be justified on the basis of the particulars of truth pleaded in relation to the defendants' additional imputations. At the time the matter was before the Court of Appeal, the defendants had not pleaded a defence under s15(2); no issue arose as to the adequacy of any particularisation. The particulars which were contained in the defence that was before the Court of Appeal were pleaded in relation to the series of imputations then pleaded as contextual imputations under s16 of the Act, and in relation to the defendants' imputations pleaded in relation to the interstate defences; their adequacy to establish those defences was not, it seems clear from the judgments, in issue in those proceedings; their adequacy, if proved, to defeat the plaintiff's imputation was certainly never under consideration in the Court of Appeal. 43 It is very likely that the particulars are adequate (if the facts on which they are based are proved) to prove the truth of the defendants' imputation, which is in general terms, as distinct from the plaintiff's imputation, which is specific as to the misconduct asserted. They are not adequate to prove the substantial truth of the plaintiff's imputation, which is a composite of a general attribution of dishonesty and the specific occasion for the attribution. 44 I will not, therefore, grant leave to amend the defence in such a way as to plead a defence of truth under s15(2) of the Act on the basis of the current particularisation. * * * 45 The plaintiff's opposition to the remaining proposed defences was put on an entirely different basis: essentially, that to grant leave so to amend the defence would be futile as, if the proposed defences had been originally pleaded, each would inevitably have been struck out as incompetent, or as disclosing no reasonable defence, or as an abuse of the process of the court: see SCR Part 15 Rule 26; UCPR Part 14 Rule 28. 46 The proposed defences were said, in the defendants' written submissions, to be:

a defence of truth at common law;
a Polly Peck defence;
a defence of partial justification. 47 I have already observed that an intention to plead truth at common law is undetectable in paragraph 4. However, all parties proceeded on an acceptance of what is contained the defendants' written submissions and I will do the same.

truth at common law 48 I have earlier set out the terms of s15 of the Act. Subs(1) makes it perfectly clear that the defence of truth at common law is not available in NSW. The defendants were, accordingly, driven to argue that s15, to the extent that it imposes that restriction, is unconstitutional and invalid. I will return to deal with the basis on which this argument was put.

the Polly Peck defence 49 To my knowledge it has never previously been suggested that a Polly Peck defence is available in NSW, operating in tandem with s16. At least, I was referred to no authority on the subject. The usual approach has been that s16 represents the entirety of NSW law with respect to a defendant's entitlement to defend a claim in defamation by relying upon the substantiation of imputations other than those pleaded by the plaintiff. 50 It would be an understatement to say that the decision in Polly Peck has not commanded universal admiration in Australia: see Chakravarti v Advertiser Newspapers Ltd [1998] HCA 36; 193 CLR 159 at [6]; David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; 1 VR 667; Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1 at [21]. However, it has on many occasions been applied in Australian jurisdictions and no superior court has ever held that it is, in respect of any Australian jurisdiction, bad law: see the discussion by Levine J in Whelan & Anor v John Fairfax Publications Pty Ltd & Ors [2002] NSWSC 1028; 56 NSWLR 89 at [40] - [53]. Notwithstanding the absence of any authoritative pronouncements as to the availability of a Polly Peck defence in NSW, there is good reason why, under the Act, the consensus has been that it is excluded for NSW. 51 In Polly Peck it was made clear that under the principles there stated a defendant may not do what s16 of the Act explicitly permits a defendant to do in NSW: that is, rely upon publication of an imputation different in kind or in substance from that sued upon by the plaintiff, and, by justifying that other imputation, showing that publication of the plaintiff's imputation did not further injure the plaintiff's reputation. At p 1032 of Polly Peck O'Connor LJ wrote: "Where a publication contains two or more separate and distinct defamatory statements, the plaintiff is entitled to select one for complaint, and the defendant is not entitled to assert the truth of the others by way of justification." 52 What Polly Peck permits a defendant to do is to identify such alternative meanings as it would have been open to the plaintiff to rely upon (even if the plaintiff has not done so) and seek to justify those meanings. This is really a way of saying that the defendant may identify and justify shades and gradations of the imputation(s) pleaded by the plaintiff, but may not defend the claim by identifying and justifying imputations of a different character: Dr Manock v Advertiser News-Weekend Publishing Co Ltd [2004] SASC 164 at [54]. Or, on the Polly Peck approach, a defendant may identify a "common sting" of a publication and seek to justify that sting. Or the defendant may take issue with the meaning attributed to the words in the publication by the plaintiff and seek to establish that the words published bear a different meaning and that in that meaning, the words are true. In the paragraph immediately preceding that just extracted, O'Connor LJ also wrote: "In cases where the plaintiff selects words from a publication, pleads that in their natural and ordinary meaning the words are defamatory of him, and pleads the meanings which he asserts they bear by way of false innuendo, the defendant is entitled to look at the whole publication in order to aver that in their context the words bear a meaning different from that alleged by the plaintiff. The defendant is entitled to plead that in that meaning the words are true ..." 53 What the defendant may not do under Polly Peck is to identify a defamatory imputation or imputations additional to, or "separate and distinct" from, that or those attributed to the publication by the plaintiff, and seek to justify that imputation or those imputations. Yet that is precisely what s16 permits a defendant in NSW to do. 54 Put another way, and using language more familiar in the NSW defamation law, what Polly Peck permits a defendant to do is to seek to justify an imputation or imputations not different in substance from that or those pleaded by the plaintiff. This can have no application in NSW. By SCR Part 67 Rule 11(3) a plaintiff is not permitted to rely upon two or more imputations "unless the imputations differ in substance". In Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 at 771 the Court of Appeal held: "Upon the proper construction of the rules, an imputation specified in a statement of claim must be taken to include all imputations which do not differ in substance." 55 This leaves no room in NSW for the application of Polly Peck principles. Just as a plaintiff may rely upon the different shades and gradations of meanings in imputations so long as those shades and gradations do not differ in substance, so, too, may a defendant seek to justify the various shades and gradations of meaning of those imputations. 56 Nor, given the way in which defamation proceedings are conducted, under NSW law, would it be possible to a defendant to: "... aver that in their context the words bear a meaning different from that alleged by the plaintiff"

and that in that meaning what was published was substantially true. That is because, pursuant to s7A(3), the jury has already determined that the meaning attributed to the publication by the plaintiff was conveyed. The defendant is bound by that determination. 57 And it is completely alien to the NSW process to suggest that a defendant might identify "a common sting" and seek to justify that common sting. That is quite contrary to the process that requires a plaintiff to identify the imputation or imputations which he or she alleges are conveyed, and to sue on that or those as the cause of action. 58 Implicit in the defendants' written submissions is a recognition of the difficulties they face in relying on a Polly Peck defence in NSW. They therefore argued that, for constitutional reasons, and notwithstanding the implications of the Act, the defence is available in NSW. I will return to this argument.

partial justification 59 It is not at all easy to discern what "partial justification" is intended by the pleadings. Those parts of the proposed paragraph 4 which are said to raise the defence are sub-para (4) and sub-para (6). These sub-paragraphs may here be repeated: "(4) To the extent to which the defendants prove the truth of the defendants' imputation [i.e. that the plaintiff was a dishonest broadcaster] the matter complained of and/or the plaintiff's imputation was true in substance and in fact; ... (6) In the premises, the defendants are not liable to the plaintiff as alleged, and, if, (which is denied) they be found to have proved partially but not fully that one or more of the plaintiff's imputation, the defendants' imputation, and/or the matter complained was or were a matter of substantial truth or was or were true in substance and in fact, to that extent the plaintiff's entitlement to damages is thereby extinguished or reduced; ..." 60 It may be assumed that what the defendants will seek to do is to prove the truth of the opening words of the plaintiff's imputation, they being precisely the same as the words constituting the whole of the defendants' imputation - that is, that the plaintiff was a dishonest broadcaster - but to prove the truth of those words by proving facts other than facts concerning the plaintiff's alleged arrangement with the AMP Society. 61 To support their entitlement so to defend the plaintiff's claim, the defendants cited the decision of the House of Lords in Maisel v Financial Times, Ltd (No 1) [1915] 84 LJKB 2145. Of Maisel, Hodgson JA (in the appeal in the present case) wrote: "[79] Maisel supports the proposition that, where a plaintiff in a defamation proceedings alleges to the effect that the defendant's publication meant both that the plaintiff had committed a particular discreditable act and that the plaintiff was of bad character, the defendant could put on a defence justifying the latter allegation by reference to other conduct of the plaintiff suggestive of the relevant bad character, which the defendant can then seek to prove at the trial. ... This is because, at common law, where a libel contains several charges , a defendant can justify some only and thereby mitigate damages ... the part justified must be severable from the rest, but the test of severability seems not to be very exacting..." (internal references omitted; emphasis added) 62 This passage appears in that part of the judgment which is concerned with the interstate defences. There is nothing in the judgment which suggests that Hodgson JA intended to hold that a defence of partial justification as envisaged in Maisel is available in NSW. Indeed, in the immediately preceding paragraph, his Honour wrote: "78 The extent to which the defences in question can be maintained in jurisdictions that do not have any equivalent to s16 of the New South Wales Defamation Act depends on common law principles, and in particular principles associated with the cases of [ Maisel ] and [ Polly Peck ] ..." (emphasis added) 63 A defence of partial justification in the terms proposed on behalf of the defendants simply cannot fit with the approach taken to defamation actions in NSW. Maisel envisages that a defendant might plead justification to some part of what is published by the defendant - that is, some parts of the whole of the publication, or to some, but not all, of the meanings that the plaintiff attributes to the publication. By s9 of the Act, in NSW the imputation is the cause of action. A defendant pleads defences to each cause of action pleaded by the plaintiff. 64 A comparable position under NSW law would be a defence of justification to some, but not all, of the imputations pleaded by the plaintiff. That is entirely acceptable. What is not acceptable is for the defendants to divide the plaintiff's imputation into pieces and to seek to justify only some of those pieces. 65 It seems to me that the defendants also recognised this difficulty. They therefore have sought to incorporate a defence of partial justification into the law of NSW, again by reference to constitutional doctrine.

constitutional issues 66 Although there was a degree of overlap between the two, it seems to me that the defendants' propositions in relation to the constitutional matters fall into two categories. The contention that s15 of the Act is invalid had two (or possibly three) bases. These were:

(i) asserted interference with an implied constitutional freedom of communication (at least in respect of government and political matters); (ii) s92 of the Constitution, enshrining freedom of interstate trade, commerce and intercourse; (iii) s117 of the Constitution, prohibiting discrimination between residents of different states.

constitutional freedom 67 I set out in full this section of the submissions made in writing on behalf of the defendants: "23. The regulation of radio broadcasting is a matter in respect of which the Parliament of the Commonwealth has legislated in the Broadcasting Services Act 1992 (Cth) ('the BSA'). The plaintiff's conduct, and that of his erstwhile colleague, Mr John Laws, the subjects of the matter complained of, involved inter alia the plaintiff's behaviour as a radio broadcaster and inquiries by a number of authorities, including the Australian Broadcasting Authority and the Federal parliament. 24. As the plaintiff originally alleged, the publication of the matter complained of was ' throughout Australia'. Each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia, as the Court held in Lange v Australian Broadcasting Corporation. 25. Certainly, the integrity of those who use, and the manner in which they use, licences to broadcast radio programs under the BSA is such an interest. If, as the Court of Appeal has held, the defendants can plead a defence of truth for publications in Australia outside New South Wales, of the same matter complained of, that the plaintiff is a dishonest broadcaster, the chilling effect of the plaintiff's contention here is that even if it could be proved, such a truth must be silenced in this State because of a technical rule of pleading. 26. If the plaintiff be correct, the implied constitutional freedom of communication is clearly burdened by the NSW Act in an inappropriate manner." (footnotes omitted) 68 For a number of reasons, the defendants' arguments must be rejected. 69 Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 at 571.5 was cited as authority for the proposition that, notwithstanding the provisions of the Act, discussion of the issues the subject of the matter complained of is protected by reason of an implied constitutional freedom of communication on such matters. 70 Lange was a case in which the proceedings were commenced in this jurisdiction. It was the provisions of the very Act now under consideration that were before the High Court. The proceedings were brought by the former Prime Minister of New Zealand against the Australian Broadcasting Corporation ("the ABC"). It may be assumed that the publication of which he complained related to government or political matters. The ABC sought to plead a "constitutional freedom" defence based on two earlier decisions of the High Court: Theophanous v Herald and Weekly Times [1994] HCA 46; 182 CLR 104; Stephens & Ors v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211. 71 The effect of the decision in Lange was to extend, or modify, the existing defence of qualified privilege at common law in such a way as to accommodate particular constitutional imperatives incremental to the system of representative government for which the Constitution provides. The first thing to note about the decision in Lange is that it was focussed upon communication on matters of government and politics. A state law that unduly inhibits freedom of communication on such matters will contravene the freedom implied by the constitutional system of representative government. What was in issue in Lange was not the constitutional validity of any provision of the Act or state law, but the existence or availability of a defence of protection implied in the Constitution, of publication of material relevant to securing representative government which is the foundation of the Constitution. At p 559 the Court wrote: "Freedom of communication on matters of government and politics is an indispensable incident of that system of representative government which the Constitution creates ..." 72 The Court upheld the proposition that the Constitution protects that freedom of communication between the people concerning political or government matters which enable the people to exercise a free and informed choice at elections. The Court, however, held that the law of defamation in NSW did not cut across that protection. It survived because of the existence of the s22 defence of qualified privilege. 73 It was, presumably, to address the need for a political or government element that counsel for the defendants included paragraph 23 of their written submissions. Counsel plainly recognised that they may be in some difficulty in passing over the threshold and establishing that the matter complained of concerned "matters of government and politics" or was relevant to "that system of representative and responsible government provided for by the Constitution". Unless they could show that the defendants' publication somehow involved those matters, Lange is irrelevant. 74 Counsel suggested that a number of circumstances brought them within these portals. One of these was that radio broadcasting is a matter of regulation by the Commonwealth Parliament in the Broadcasting Services Act 1992; and that (drawing upon facts asserted in the matter complained of) the plaintiff's conduct, and that of a former colleague, were the subject of enquiries by a number of authorities, including the Australian Broadcasting Authority and the Federal Parliament. 75 There was no evidence that the plaintiff holds, or has ever held, any elected office or other position connected with government or politics. It is not sufficient, to bring the publication within the protection afforded by the decision in Lange, to show that the subject matter of the publication has something to do with some matter on which the Federal Parliament had legislated; nor that the conduct of the plaintiff might be the subject of some enquiry by a Commonwealth Authority. 76 I reject the contention that the subject matter of the matter complained of could conceivably be said to be in relation to matters of government and/or politics. That is sufficient to dispose of this issue. However, there are other reasons why the argument should fail. 77 At p 561 their Honours wrote: "However, the freedom of communication which the Constitution protects is not absolute. It is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution. The freedom of communication required by ss 7 and 24 [concerning the composition of the Senate and the House of Representatives] and reinforced by the sections concerning responsible government and the amendment of the Constitution operates as a restriction on legislative power. However, the freedom will not invalidate a law enacted to satisfy some other legitimate end if the law satisfies two conditions. The first condition is that the object of the law is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government or the procedure for submitting a proposed amendment to the Constitution to the informed decision of the people which the Constitution prescribes. The second is that the law is reasonably appropriate and adapted to achieving that legitimate object or end ..." 78 And, at pp 567 - 8: "When a law of a State or Federal Parliament legislature is alleged to infringe the requirement of freedom of communication imposed by ss7, 24, 64 or 128 of the Constitution, two questions must be answered before the validity of the law can be determined. First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s128 for submitting a proposed amendment of the Constitution to the informed decision of the people ... If the first question is answered 'yes' and the second is answered 'no', the law is invalid." 79 The Court held that, while the NSW law did place a burden on communications of the kind in question, it was not (when interpreted in the light of the extended defence of qualified privilege available in respect of communications on such matters), an undue burden; and that, to the extent that it does impose such a burden, it goes no further than is reasonably necessary in order to protect reputation. 80 What was under consideration in Lange was whether the defence there pleaded was available as a matter of law. True it is that s15 was not raised in that case. However, the High Court held that the defence based there upon the same asserted constitutional freedom (but clearly in relation to matters of government and politics) was not available. In respect of the defence of qualified privilege provided by s22 of the Act, the Court held that the Constitution itself confers no private right of defence and that the Act places no undue burden on the freedom of communication required by the Constitution. 81 The decision in Lange upholding the adequacy of the NSW law in relation to qualified privilege as it applies to discussion of government or political matters must guide the decision in this matter. There is no reason to conclude that s15(2) is other than: "... reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government ..." 82 S15 of the Act is not invalid, nor restricted in its operation, by reason that it imposes an unacceptable impediment on the freedom of communication on government and political matters recognised in Lange.

s92: freedom of interstate trade 83 The defendants' next argument was that s15 of the Act contravenes s92 of the Constitution and is, accordingly, invalid. The Solicitor-General for NSW, who appeared on behalf of the Attorney-General intervening, correctly characterised the argument advanced on behalf of the defendants as "opaque". 84 It is, therefore, appropriate to set out the submissions in the terms they were made of the behalf of the defendants: " Freedom of Interstate Intercourse 27. To the extent that the law of New South Wales (or any other jurisdiction) interferes with the absolute freedom of intercourse or communication among the States of publications which are within the terms of the defendants' pleading relating to the Defendants' Imputation, that law is invalid by reason of section 92 of the Constitution.

The freedom of intercourse in section 92 included freedom of the exchange of information and/or of matter which is otherwise capable of being subject to the Constitutional freedom or freedom of speech and opinion.

The law of New South Wales, if it operates to prevent the defendants relying on the Defendants' Imputation as a defence as alleged in the proposed pleading, discriminates against or subjects to a disability (namely the absence of the defence relating to the Defendants' Imputations): (a) publications of the same information in that State as compared to in each or one or more of the other Australian jurisdictions in relation to freedom of speech and opinion and/or intercourse; (b) residents of New South Wales who are subjects of the Queen and who publish matter alleged to be defamatory and residents of other States who publish the same matter in that State or those States contrary to section 117 of the Constitution.

The impermissible burden placed on the interstate trade, commerce or intercourse is the unavailability in New South Wales of a defence otherwise available in all other States and Territories in Australia. This burden must discriminate against a publisher who would otherwise have a defence in respect of an identical publication outside New South Wales." (footnotes omitted) 85 S92 of the Constitution relevantly provides as follows: "On the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free." 86 At the outset of this discussion, it is pertinent to note that, in the context of a s92 case, the High Court has expressly recognised the independent right of a state to legislate with respect to matters allocated to it by the Constitution. In Castlemaine Tooheys Ltd v South Australia [1990] HCA 1; 169 CLR 436, the Court made this observation: "In determining what is relevantly discriminatory in the context of s92, we must take account of the fundamental consideration that, subject to the Constitution, the legislature of a State has power to enact legislation for the well-being of the people of that State. In that context, the freedom from discriminatory burdens of a protectionist kind postulated by s92 does not deny to the legislature of a State power to enact legislation for the well-being of the people of that State unless the legislation is relevantly discriminatory. Accordingly, interstate trade, as well as intrastate trade, must submit to such regulation as may be necessary or appropriate and adapted either to the protection of the community from a real danger or threat to its welfare or to the enhancement of its welfare." 87 The problem confronting the Court in Castlemaine Tooheys involved legislation enacted by the State of South Australia for the purpose of environmental protection. The legislation had an incidental effect of disadvantaging one brewer as distinct from other brewers. Having considered a number of American decisions, the Court wrote: "So, the fact that a law regulates interstate and intrastate trade evenhandedly by imposing a prohibition or requirement which takes effect without regard to considerations of whether the trade affected is interstate or intrastate suggests that the law is not protectionist. Likewise, the fact that a law, whose effects include the burdening of the trade of a particular interstate trader, does not necessarily benefit local traders, as distinct from other interstate traders, suggests that the purposes of the law are not protectionist. On the other hand, where a law on its face is apt to secure a legitimate object but its effect is to impose a discriminatory burden upon interstate trade as against intrastate trade, the existence of reasonable non-discriminatory alternative means of securing that legitimate object suggests that the purpose of the law is not to achieve that legitimate object but rather to effect a form of prohibited discrimination." (pp 471 - 472) 88 It seems that the defendants do not wish to argue that s15 interferes with trade or commerce, and those concepts can be put to one side. What the defendants wish to argue is that s15 imposes an unacceptable restriction on "intercourse" among the states. 89 The High Court has identified a distinction between "trade and commerce" on the one hand, and "intercourse" on the other: see, for example, Cole v Whitfield [1988] HCA 18; 165 CLR 360 at 388, 394. 90 Communication is one form of intercourse the absolute freedom of which is guaranteed by s92: see Australian Capital Television Pty Ltd & Ors v The Commonwealth of Australia [1992] HCA 45; 177 CLR 106 ("ACTV"); Nationwide News v Wills [1992] HCA 46; 177 CLR 1. 91 The defendants' submission that the freedom of intercourse between the states enshrined in s92 includes freedom of the exchange of information and/or of matter which is otherwise capable of being subject to the constitutional freedom or freedom of speech and opinion may therefore be accepted. It was also argued that the exposure of the defendants to a liability to pay damages amounted to a burden, or interference, with freedom of intercourse. This latter proposition may also be accepted: see Lange, p 568. 92 The guarantee is not of itself absolute: see ACTV, per Mason CJ at 142; Cunliffe v The Commonwealth [1994] HCA 44; 182 CLR 272 at 366. 93 In ACTV Mason CJ observed that the guarantee of freedom of communication does not postulate that the freedom must always and necessarily prevail over the competing interests of the public. 94 His Honour proposed a distinction between restrictions on communication which target ideas or information - which, generally speaking, would be more difficult to justify - and restrictions upon an activity or mode of communication by which ideas or information are transmitted. Even in the first class of case, his Honour held, it would be necessary to weigh the competing public interests, although ordinarily paramount weight would be given to the public interest in freedom of communication (p 143). His Honour then proposed a test to be applied in cases where infringement is asserted, in the following terms: "If the restriction imposes a burden on free communications that is disproportionate to the attainment of the competing public interest, then the existence of the disproportionate burden indicates that the purpose and effect of the restriction is in fact to impair freedom of communication. In weighing the respective interests involved and in assessing the necessity for the restriction imposed, the Court will give weight to the legislative judgment on these issues. But, in the ultimate analysis, it is for the Court to determine whether the constitutional guarantee has been infringed in a given case. And the court must scrutinise with scrupulous care restrictions affecting free communication in the conduct of elections for political office for it is in that area that the guarantee fulfils its primary purpose." (footnotes omitted) 95 In Cole v Whitfield the Court had before it a case which involved an asserted interference with the freedom of trade and commerce, and not intercourse. However, the following passage, in which the Court outlined the approach to be taken in those circumstances, is, in my opinion, of general application. The Court wrote: "In the case of a State law, the resolution of the case must start with a consideration of the nature of the law impugned. If it applies to all trade and commerce, interstate and intrastate alike, it is less likely to be protectionist than if there is discrimination appearing on the face of the law. But where the law in effect, if not in form, discriminates in favour of intrastate trade, it will nevertheless offend against s92 if the discrimination is of a protectionist character. A law which has as its real object the prescription of a standard for a product or a service or a norm of commercial conduct will not ordinarily be grounded in protectionism and will not be prohibited by s92. But if a law, which may be otherwise justified by reference to an object which is not protectionist, discriminates against interstate trade or commerce in pursuit of that object in a way or to an extent which warrants characterisation of the law as protectionist, a Court will be justified in concluding that it nonetheless offends s92. The adoption of an interpretation prohibiting the discriminatory burdening of interstate trade will not of course resolve all problems. It does, however, permit the identification of the relevant questions ..." (p 408) 96 It is difficult to fit the defendants' contentions into this analysis. Far from arguing that s15 is protectionist of intrastate intercourse, the defendants' submissions amount to a contention that intrastate communications (intercourse) are more heavily burdened than communications in, or with, other states or territories. That is because, on the defendants' analysis, the s15 defence is more limited and restrictive than defences that are available in respect of publication in those other states and territories. 97 It does not, in my view, matter that this is so. If a state law burdened intrastate trade or commerce (or intercourse) more heavily than interstate trade or commerce (or intercourse), then it may well still be prohibited by s92. 98 But the short answer is that s15 is not protectionist, and it does not discriminate against interstate intercourse. S15 applies equally in respect of all publications in NSW. 99 Further, to the extent that s15 does impose any burden upon communication in NSW compared with communication in other states, it is amply justified by the objects to which it is directed. This is consistent with the recognition, in Lange, of the importance of legislation protecting reputation and the balance of that purpose against the equally desirable object of maintaining freedom of communication. 100 The defendants' argument is, in my opinion, misconceived. Notwithstanding the large number of cases concerning s92 that have come before the High Court, counsel for the plaintiff were unable to identify a single decision which would support the propositions they put. I do not propose to trawl through all of those cases. I will content myself with referring to a sample. 101 I reject the argument that s15 is, to any extent, invalid by reason of s92.

s117: discrimination between residents of different states 102 Linked with, or incorporated into, the argument concerning s92 was reliance upon s117 of the Constitution, which provides as follows: "A subject of the Queen, resident in any State, shall not be subject in any other State to any disability or discrimination which would not be equally applicable to him if he were a subject of the Queen resident in such other State." 103 In my opinion, it cannot be said that s15 is a law which in any way discriminates between states, or imposes burdens (whether intentionally or coincidentally) upon one state (or residents of one or more states) as distinct from another state (or residents of other states). All that s15 does is to provide, in statutory form, limitations on the manner in which a defamatory publication may be defended by reason of the truth of what is published. The section applies equally to anybody who litigates in defamation in NSW. 104 It is the fact that NSW has seen fit to legislate in relation to that defence in a way that is different to the manner in which other states (or territories) have done gives rise to the present argument. But that is an incident of the Federal system. Each state's defamation law will impact differently, and, almost inevitably, will be perceived to be more favourable to one party than another; if the plaintiff's arguments were to be accepted, no law of defamation could survive. 105 The attack upon s15 (and, it may be, s16) based upon s92 or s117 of the Constitution, or some combination of the two, must fail. Ss15 and 16 of the Act are general in their terms, and of general application. 106 No invalidity in either section has been established.

Federal common law 107 The defendants' argument in this respect was no easier to follow thatn the s92 argument. 108 The following submission was made: "32. Because the publication of the matter complained of occurred in each State and Territory, it was done in Federal jurisdiction and thus under the Federal common law. The consequence of this must be that the common law Polly Peck defence is available in NSW in respect of publication in NSW."

(It is worth interpolating here that in each successive version of the defence or proposed amended defence, the defendants have admitted publication in NSW but steadily declined to admit publication "throughout Australia".) 109 In Lange the Court wrote: "The Constitution, the Federal, State and Territorial laws, and the common law in Australia together constitute the law of this country and form 'one single jurisprudence' ... Within that single system of jurisprudence, the basic law of the Constitution provides the authority for the enactment of valid statute law and may have effect upon the content of the common law." (p 564) 110 Counsel argued that there exists in Australia a "single choice of law" or a "single Federal common law" for defamatory publications; and that the defence recognised in Polly Peck is part of that Federal common law. The consequence of this, counsel appeared to argue, is that any state statute law which is inconsistent with the asserted Federal common law, is, to the extent of the inconsistency, invalid. I would be prepared to accept, in conformity with Whelan, that the Polly Peck defence is, at least arguably, available in states and territories other than NSW. For the reasons I have given above, it is not available in NSW. Thus, notwithstanding s15 of the Act, the Polly Peck defence may be pleaded in respect of the interstate publications. 111 The application of those principles has given rise to a good deal of debate. In Whelan v John Fairfax Pty Ltd [2002] NSWSC 1028; 56 NSWLR 89, after considering the authorities, Levine J wrote: "Until there are enunciated clear and authoritative statements from the appropriate appellate courts in each state and territory in which the problem arises ... the ultimate decision as to the availability of the Polly Peck defence will have to be determined by the High Court." 112 Reliance was placed upon the decision of the High Court in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; 203 CLR 503. 113 In my opinion, the argument advanced confuses two distinct issues: the choice of the law to be applied where a tort has interstate elements, and the existence of a Federal or Commonwealth common law. This was the concern of the Court in Rogerson. 114 In written submissions, counsel isolated as "the only issue" whether the Polly Peck defence is available, as a matter of law, in NSW, and submitted that it is. I have already held that it is not. The present argument does not alter my view. 115 In writing, as it has on different occasions, to a single federal common law, the High Court was not, in my opinion, intending to override the right of State and Territory legislatures to legislate, including in a way that alters common law principles, on matters within their jurisdiction. The defendants' submission, if accepted, would have significant implications in respect of that right. 116 Accordingly, this basis of the defendants' argument must also be rejected. 117 Perhaps as a last resort, counsel for the defendants also submitted: "38. Section 15 of the Act was intended by the [LRC] to effect a 'partial codification' of the defence of truth and not to effect a full codification despite the presence of s15(1). The LRC was concerned to modify the common law only in those respects in which it found the common law defective, the LRC not favouring an attempt to make a general code of the law of defamation." 118 As authority for these propositions counsel pointed to the report of the Law Reform Commission of NSW ("the LRC"), published in 1971, following a reference to it to review, inter alia, the law and practices of the Court in relation to libel and slander. One paragraph in that report to which reference was made was paragraph 19, which opens with the words: "Although we do not favour an attempt to make a general code of the law of defamation ... " 119 However, also identified by counsel as supporting the proposition stated was paragraph 58 of Appendix D of the Report, which consists of notes on the Bills and the rules which the LRC proposed. Paragraph 58 reads: "The Bill leaves to the common law large parts of the law of privilege and it is intended to leave for defences under other Acts and for such general defences in the law of tort as leave and licence and accord and satisfaction. Section 11 has these objects in view. Its effect is cut down as regards the defence of truth (s15(1)) and as regards the law relating to comment (s29(2)). In these fields the Bill embarks upon a partial codification." 120 S11, as enacted, provides: " 11. Common Law defence etc

The provision of a defence by this Part does not of itself vitiate, diminish or abrogate any defence or exclusion of liability available apart from this Act." 121 I have already set out the provisions of s15(1) which expressly exclude s11. Whatever the LRC intended in respect of the continuing availability of the common law in relation to defending a defamatory publication on the basis of truth, the legislation as enacted is perfectly clear and leaves no room for any defence of truth other than as stated in that sub-section. 122 The result is that the defendants' notice of motion will also be dismissed. 123 The orders I make are:

(ii) the defendants' notice of motion is dismissed. 124 The parties may make submissions as to costs.

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.

Defamation Act 1974(NSW)

At a glance

Court

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Before

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Judgment (48 paragraphs)

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Legislation Cited (3)

Cases Cited (16)