Supreme Court of WA|2006-12-18|Before: Hasluck J

Mickelberg & Anor v Hay & Anor [2006] WASC 285 (18 December 2006)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : MICKELBERG & ANOR -v- HAY & ANOR [2006] WASC 285

Defamation - Polly Peck principle - Application by plaintiffs to strike out alternative meaning pleaded by the second defendant - Distinction between allegation of criminal conduct and belief held on reasonable grounds - Nature of particulars required to support a plea of justification in such a case - Effect of defence plea of notoriety in answer to a claim for aggravation damages

Anderson v Ah Kit [2004] WASC 194

Cash v Morris (1993) 10 WAR 518

Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519

Chase v News Group Newspapers Ltd [2002] EWCA CIV 1772

Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 8 December 1997

David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667

David Syme & Co Ltd v Mather [1977] VicRp 58; [1977] VR 516

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Gumina v Williams (No 2) (1990) 3 WAR 351

Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440

Hyams v Peterson [1991] 3 NZLR 648

Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36

Kays Holdings Pty Ltd v Nassar [1968] 1 NSWR 497

Lewis v Daily Telegraph Ltd [1964] AC 234

Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293

Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632

Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663

Nationwide News Pty Ltd v Moodie [2003] WASCA 273; (2003) 28 WAR 314

Plato Films Ltd v Speidel [1961] AC 1090

Polly Peck (Holdings) plc v Trelford [1986] QB 1000

Rakhimov v Australian Broadcasting Corporation & Anor [2001] NSWSC 10

Ronci v Nationwide News Pty Ltd [2001] WASC 239

Rookes v Barnard [1964] UKHL 1; [1964] AC 1129

Scott v Sampson (1882) 8 QBD 491

Sim v Stretch (1936) 52 TLR 669

Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1

Taylor v Jecks (1993) 10 WAR 309

Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118

Associated Newspapers Ltd v Dingle [1964] AC 371

Australian Broadcasting Corporation v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430

Berezovsky v Forbes Inc [2001] EWCA Civ 1211

Birmingham v West Australian Newspapers Ltd [1999] WASC 19

Burstein v Times Newspapers Ltd [2000] EWCA Civ 338; [2001] 1 WLR 579

Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027

Channel Seven Adelaide Pty Ltd v DJS [2006] SASC 10

DJS v Channel Seven Adelaide Pty Ltd [2006] SASC 268

Elliott v West Australian Newspapers Ltd [2006] WASC 222

Forsdike v Stone (1868) LR 3 CP 607

Hyams v Peterson [1991] 3 NZLR 648

Lawrence v McCusker [2006] WASC 173

Lim v TVW Enterprises Ltd [2002] WASC 214

Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382

Random House Australia Pty Ltd v Abbott [1999] FCA 1538; (1999) 94 FCR 296

Rigby v John Fairfax Group Pty Ltd (1994) A Def R 52-005

Shah v Standard Chartered Bank [1998] EWCA Civ 612; [1999] QB 241

Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1

Vitale v Bednall [2001] WASC 278

1 The plaintiffs, Raymond John Mickelberg and Peter Mickelberg, are pursuing a claim in defamation. The claim arises out of remarks allegedly made by the first defendant, Melvyn Craig Hay, in the course of a media conference called by him on 2 July 2004. The first defendant at that time was serving as Assistant Police Commissioner in the West Australian Police Service.

2 The words complained of were allegedly made in the immediate aftermath of a ruling handed down by the Court of Criminal Appeal on the day in question. The effect of the ruling was that certain convictions for offences allegedly committed by the plaintiffs were quashed with ancillary orders being made that there was to be no retrial.

3 For ease of reference, where the context permits, I will call the various events associated with the laying of the relevant charges and the final ruling of the Court of Criminal Appeal the "Mickelberg" case.

4 The plaintiffs have now applied to strike out certain parts of the statement of defence filed on behalf of the second defendant, that is, the first defendant's employer: The State of Western Australia.

5 The plaintiffs issued a writ of summons on 6 July 2004 against the first defendant and his employer, the State of Western Australia. Since that time there have been various interlocutory exchanges between the parties. Recent exchanges are described in the affidavit of Nicholas Anthony Egan sworn 3 August 2006, which was filed on behalf of the second defendant and in the plaintiffs' outline of submissions dated 20 October 2006.

6 The second defendant filed its statement of defence on 22 March 2005. The plaintiffs sought particulars of certain paragraphs of the defence by request dated 19 April 2005. The plaintiffs then filed their reply to the defence on 16 May 2005. I note in passing that the reply included pleas to paragraphs 14, 18 and 19 being the paragraphs the subject of the controversy presently before me.

7 Further refinement of the plaintiffs' statement of claim was the subject of an application for leave to amend heard on 21 October 2005 which led to the grant of leave to replead. It appears from par 9 of the Egan affidavit that on 12 June 2006 the second defendant consented to the plaintiffs' application for leave to file a further re-amended statement of claim. For ease of reference I will henceforth refer to the minute of proposed further re-amended statement of claim dated 12 June 2006 as the "statement of claim".

8 In July and August 2006 the second defendant presented further minutes reflecting proposed amendments to the defence of the second defendant which incorporated answers to the plaintiffs' earlier request for particulars, incorporated a number of additional particulars to par 19 of the defence, amended several material pleas and, at par 25, responded to the pleas at 12(a) and 12(b) of the plaintiffs' statement of claim.

9 The plaintiffs indicated that they would not consent to leave to amend on the basis that pars 14, 18 and 19, that were particularised and amplified by the pleas advanced by the second defendant, were objectionable and liable to be struck out. Further, it was said that full particulars of pars 8 and 21 of the pleadings were not incorporated whereas they were ordered to be provided on 10 June and 22 July 2005. The second defendant brought its application for leave to amend its defence on 3 August 2006 and programming orders were made.

10 On 6 October 2006 the solicitors for the second defendant contacted the solicitors for the plaintiffs and invited them to bring an application to strike out pars 14, 18 and 19 of the defence filed in March 2005, if so instructed. Subsequently, the solicitor for the second defendant advised that the second defendant would not oppose leave to bring a strike out application out of time.

11 On 12 October 2006 the plaintiffs filed and served their application for leave to strike out and to strike out pars 14, 18 and 19 of the defence. On 13 October 2006 the solicitors for the second defendant presented a further minute of proposed amended defence. For ease of reference I will call this the "October minute of defence".

12 In addition to the amendments proposed by the second defendant in July, the October minute of defence amends pars 10 and 22(1) to cure outstanding requests for particulars and adds a new par 26. Further, and importantly for present purposes, the October minute of defence adds a new par 28 concerning the consequences of any finding against it of liability for any "damage or aggravated damage", and purports by its pleading in par 28 to rely upon the matters alleged at par 14 and the particulars thereto in relation to any assessment of damages. In other words, as counsel for the second defendant noted in his outline of submissions dated 13 October 2006 (at par 18) by the proposed amendment to par 28 of the defence the second defendant seeks to incorporate reference to the plea in par 14 of the defence to clarify that the plea is relied on solely in relation to the question of the assessment of loss and damage. I will return to this issue in due course.

13 It emerges from this narrative that the principal issue before me concerned the plaintiffs' challenge to the adequacy of pars 14, 18 and 19 of the second defendant's October minute of defence. More particularly, relying upon the issues raised by the plaintiffs' chamber summons dated 12 October 2006, the plaintiffs submitted that leave should be granted for the plaintiffs to bring an application to strike out pars 14, 18 and 19 of the second defendant's defence out of time and that the paragraphs in question should then be struck out. The corollary of a ruling to that effect was that the second defendant should not be allowed leave to amend in terms of the October minute of defence (which includes the paragraphs complained of) pursuant to the rule that the Court will not usually grant leave to amend a pleading into a form which ought to be struck out. See Seaman: "Civil Procedure" at par 21.5.4.

14 I pause here to note that it was suggested by the second defendant in its outline of submissions that the plaintiffs' application to strike out was misconceived because it has previously filed a reply to the second defendant's defence and thus pleaded to the paragraphs sought to be struck out. Having regard to the troubled procedural history of the proceedings, I am not persuaded to this point of view. The outcome of the various interlocutory exchanges means that it is only now that the parties have finally come close to defining their respective positions. Accordingly, the mutual waiver of their strict entitlements, to my mind, allows for the plaintiffs to pursue the present application to strike out. Accordingly, I will say nothing further about this aspect of the matter.

15 Before dealing with the pleading points raised by the plaintiffs' application to strike out, it will be useful to begin by looking at the background to the dispute.

16 I will not traverse the full history of what has proved to be an exceedingly long and complicated history of disputation and legal proceedings. For present purposes, it will be sufficient to provide an overview of the Mickelberg case and of what was said at the media conference complained of with a view to providing a framework within which the pleading points can be properly evaluated. I will draw upon the pleadings before me and the contents of the Egan affidavit. In doing so, I proceed pursuant to the precept that in dealing with an application of this kind the facts alleged in the pleading must be accepted as true.

17 The plaintiffs are brothers. It seems that in early 1983 the plaintiffs were convicted on various counts of an indictment lodged at the District Court including count 1 which alleged that between 1 April 1982 and 23 June 1982 at Perth they conspired together to defraud the Director of the Perth Mint by inducing him to part with a quantity of gold without receiving payment for it.

18 On the prosecution case, the plaintiffs were allegedly responsible for an estate agency being broken into so that cheque forms could be obtained, the acquiring of a motor vehicle, the hiring of certain premises including office premises in Subiaco which would be of assistance in carrying the alleged plan to defraud the Mint into effect, the ordering of a quantity of gold from the Mint by using false names and forged cheques, the arranging for delivery of the gold to the office premises in Subiaco on 22 June 1982 by security guards hired for the purpose, the further delivery of the gold to Jandakot Airport. I understand that the gold was not seen again after the final delivery and has not been recovered.

19 The prosecution adduced evidence bearing upon these allegations. This included circumstantial evidence relating to the user of certain bank accounts to which the plaintiffs were allegedly connected, sightings of the plaintiffs which were said to link them to the events in question and the offences charged, fingerprint evidence, and confessional statements which were said to have been made by the second plaintiff, especially in the course of being interviewed by two police officers, Hancock and Lewandowski.

20 The plaintiffs pleaded not guilty to the charges at trial and in all the years that followed have continued to profess their innocence in respect of the charges brought against them.

21 It is pleaded in par 2 of the October minute of defence that the plaintiffs were convicted of certain counts on the District Court indictment. It is said that their appeals to the Court of Criminal Appeal at that time were dismissed. In 1987 further appeals were dismissed. As a consequence of orders made by the High Court the Court of Criminal Appeal revisited certain issues concerning the second plaintiff but in the end the convictions in question were upheld. As a consequence of petitions from the plaintiffs to the Governor further appeals were heard by the Court of Criminal Appeal but these were dismissed by a judgment given in early 1999.

22 It seems that partly as a consequence of various utterances and acknowledgements of misconduct made by Police Officer Lewandowski in recent years bearing upon the matters in which he played a part the plaintiffs were able to institute further appeals against their convictions in 2002. On 2 July 2004 the Court of Criminal Appeal constituted by his Honour the Chief Justice, his Honour Justice Murray (dissenting) and his Honour Justice Steytler upheld the appeals, quashed the plaintiffs' convictions and, as I indicated earlier, ordered that there be no retrial.

23 It was against this background that the first defendant in his capacity as Assistant Police Commissioner called the media conference complained of. This was held shortly after the ruling of the Court was announced. The statement of claim and the October minute of defence contain lengthy passages of transcript from the conference. At the hearing before me I was presented by consent with the full transcript of the conference marked up to show the passages referred to in the respective pleadings.

24 It appears from the transcript that when asked his reaction to the Court of Criminal Appeal's decision the first defendant began by saying that "We have to accept the umpire's decision on this one." He said that the decision was not an embarrassment because the police did their business in an entirely different way from 20 years ago. He said that it was impossible to control speculation and each case had to be judged on its merits.

25 The questioner went on to suggest that the judgment quashing the convictions did not mean that the Mickelbergs did not do the Mint swindle, it meant that they were wrongly convicted. The first defendant responded: "Well, that's correct, I mean you've got to look at the appeal in the context of what the Judges are saying". He went on to refer to problems arising from the lapse of time and with witnesses and to the fact that the plaintiffs had spent time in prison. He added: "So I think these are the type of issues the Judges have taken into consideration". He doubted that the police service had issues to raise with the case any more. He said that this was not a case of being unsolved but "a case of not proven". He said further that "I think the Judges have said this, that given appropriate direction, would the original jury have come up with the same verdict. Now we could speculate till the cows come home on that and who would know, who would know the answer to that".

26 The first defendant went on to say that he was "not here to talk about what the Mickelbergs have done and what crimes they have committed". There was no intention by the police service to make a formal apology at this stage. The first defendant commented on the roles of Police Officers Hancock and Lewandowski and noted that because of his death prior to the appeal Hancock was not available to give evidence during the appeal. The transcript then reflected this exchange (with the first defendant being identified by his initials "MH"):

"MH: Yes, I mean a lot of troops will probably be disappointed because in their minds clearly they would see the Mickelbergs being very guilty of the offences, um, and it is a disappointment to them but the fact of the matter is that they are all professional police officers and all understand the legal system very very clearly and they have all had disappointments before in trials, so they just get on with their business and eh, eh, put it aside, because it's not just appeals where you lose cases, you lose cases at trial as well.

Q. One of the um, one of the things that Lewandowski was saying was that he always maintained his belief that the Mickelbergs were guilty, what's your belief having seen the evidence in the case?

MH: Well, my belief is the same, is exactly the same. I have seen the evidence in its total form and I, I mean well once again we can speculate about what the original jury would have done having all the facts available to it about Lewandowski's evidence, um, but, put aside the Lewandowski evidence and this has been argued of course in the appeal court, that there is an abundance of evidence which suggest, to point the finger in their direction. So that evidence is still there, that hasn't been expunged or taken away in any way, it still exists today and one can't ignore it."

27 This exchange was followed by a discussion about compensation in the course of which the first defendant said that the police service did not apologise to criminals when they got acquitted at trial. He said that police officers arrest people because they believed a person has committed a crime. The first defendant went on to say that:

"Clearly, the arrest of the Mickelbergs, at the time was because the general opinion was they had committed an offence - now if that was the opinion at the time, because of the evidence, the majority of that evidence is still there today."

28 When asked whether there was any change in the evidence, the first defendant observed that it had been "tainted a bit" because of what Lewandowski had said, but the fact of the matter was that because a person gets acquitted at a trial, or at an appeal, "we just don't go around apologising to people because we charge them in the first place".

29 The first defendant was asked about the situation if they (the Mickelbergs) did not do it and the real Mint swindlers were out there somewhere. The questioner went on to say: "or is it a case that the police are so confident that they fingered the right people that it is not worth going down any rabbit holes, I mean, what's your view?" The first defendant relied this way:

"Look, this case has been investigated five times, the question is quite hypothetical but all roads lead to the same place."

30 In their statement of claim the plaintiffs described the offences of which they had been convicted (the "Mint swindle offences") and went on to describe the orders made by the Court of Criminal Appeal on 2 July 2004. They referred to certain parts of what was said at the media conference and described the same as the "First Defendant's Publication". At par 6 of the statement of claim the plaintiffs pleaded the imputation complained of in these terms:

"6. In its natural and ordinary meaning the First Defendant's Publication meant, and was understood to mean, that the plaintiffs and each of them had committed as criminal acts each of the Perth Mint swindle offences."

31 The plaintiffs pleaded further at par 7 that by reason of the publication the plaintiffs and each of them had been brought into hatred, contempt and ridicule, had been lowered in the estimation of right-thinking members of the community and had been exposed to be shunned and avoided by right-thinking members of the community. The plaintiffs said in par 8 that the publication was made in circumstances where it was intended or likely that republication would occur. It was said in par 9 that the publication was lacking in bona fides, was unjustifiable and unreasonable in a manner which had aggravated the hurt, damage and distress of the plaintiffs in that the publication was gratuitous and made recklessly. The pleading contained further allegations bearing upon the plaintiffs' claim for damages, aggravated damages and exemplary damages.

32 The second defendant by its October minute of defence described the Mint swindle offences in greater detail and set out the full history of the various appeals. The second defendant then added the following pleas:

"12. In his judgment upholding the appeals of the Plaintiffs Justice Steytler, with whom the Chief Justice generally agreed, concluded, inter alia, that:

(a) there was now a very significant doubt as to the police evidence;

(b) the prospect was reasonably open that a reasonable jury would not be prepared to place reliance upon any evidence of admissions made to the police by the First Plaintiff;

(c) there was a substantial amount of circumstantial evidence against the First Plaintiff. The circumstantial evidence was powerful;

(d) there undoubtedly remained a strong case against the First Plaintiff, even putting to one side the police evidence of admissions allegedly made by him and putting to one side also, the evidence of Holz;

(e) the circumstantial evidence was not, in the absence of reliance upon the police evidence, such as to inevitably have led to a conviction of the First Plaintiff;

(f) there remained a significant body of circumstantial evidence against the Second Plaintiff;

(g) the circumstantial evidence against the Second Plaintiff raised serious suspicions against him but did not establish the case against him beyond reasonable doubt;

(h) had all the evidence now available been put before the jury in addition to the evidence at the original trial, there was a significant possibility that the jury, acting reasonably, would have acquitted the Plaintiffs.

13. In his dissenting judgment Justice Murray concluded, inter alia, that:

(a) the circumstantial case remaining against the first Plaintiff was compelling. It would be open to a reasonable jury considering that evidence to be persuaded of the First Plaintiff's guilt beyond reasonable doubt. The deletion of the evidence of Lewandowski and Hancock of the interrogation on 26 July 1982 would not so impact upon the strength of that case as to cause a conclusion that the First Plaintiff's convictions constituted a miscarriage of justice.

(b) having regard to the mix of circumstantial and direct evidence there would remain a powerful case against the Second Plaintiff and it would be open to a jury to conclude beyond reasonable doubt that he was guilty of the offences for which he was charged. The evidence which should be discarded from further consideration would have no significant impact in weakening the case against the Second Plaintiff;"

33 This brings me to the contentious paragraphs in the October minute of defence.

34 The second defendant pleaded at par 14 of the October minute of defence that at all material times it was notorious that the plaintiffs had been convicted of offences in relation to the swindle of gold bullion from the Perth Mint (14(a)); that the plaintiffs had repeatedly asserted that they had been wrongly convicted of those offences (14(b)(i)); and police officers had fabricated evidence against them (14(b)(ii)). For ease of reference, I will call this the "par 14 defence plea of notoriety". The particulars presented in support of that plea were exceedingly lengthy and set out in Schedules A, B and C to the pleading with an intimation that further particulars might be provided after discovery and the administration of interrogatories. Broadly described, the particulars consisted of a list of references to various news items in the media concerning the Mickelberg case over many years.

35 At par 15 of the October minute of defence the second defendant denied that the first defendant called the subject media conference but admitted that he spoke the words complained of. Particulars were provided of the words which were said to be of and concerning the plaintiff. The plaintiff went on to say at par 16 that the first defendant spoke certain additional words at the press conference which were not included in the statement of claim and upon which the second defendant wished to rely. The additional words were then set out.

36 The second defendant (at par 17 of the October minute of defence) denied that in its natural and ordinary meaning the publication bore or was understood to bear, or was capable of bearing, the meaning pleaded at par 6 of the statement of claim, or any meaning defamatory of the plaintiffs. Importantly, for present purposes, this was followed by a further plea as follows:

"18. Alternatively, the second defendant says that if, which is denied, the first defendant's publication bore or was understood to bear, or was capable of bearing any meaning defamatory of the plaintiffs, it meant or was understood to bear the following meaning:

(a) There are reasonable grounds to believe that the plaintiffs each committed the offences in respect of which their convictions had been quashed ("the Mint swindle offences")."

37 I note in passing that this plea is presented awkwardly in that sub-paragraph (a) is not followed by any further sub-paragraph, and thus, in circumstances where the intention of the pleader clearly was to set up a "Polly Peck" plea, the plea could have been presented as a single assertion that the words complained of meant or were understood to bear the meaning that there are reasonable grounds to believe that the plaintiffs each committed the offences in respect of which their convictions had been quashed. I will call this the "par 18 alternative meaning plea".

38 It is said in par 19 of the October minute of defence that the second defendant repeats par 18 of the defence and says that the words so understood were true in substance and in fact ("the par 19 plea of justification"). Particulars of facts or matters to be relied upon are then set out and run for many pages including reference to Schedule D to the pleading.

39 Broadly described, the particulars supporting par 19 indicate that, in seeking to substantiate its par 19 plea of justification in respect of the par 18 alternative meaning plea, the second defendant intends to rely upon the history of the Mickelberg case detailed in the pleadings including reference to the Mint swindle convictions, the various appeals and what was said by the first defendant at the media conference. The second defendant will rely also upon the terms of the judgment of the Court of Criminal Appeal delivered on 2 July 2004 and upon the nature of the evidence adduced at the original trial of the plaintiffs for the Mint swindle offences and at the subsequent appeals. The nature of that evidence, including reference to various aspects of the circumstantial evidence, is set out in the particulars in great detail and at considerable length.

40 The second defendant sets up pleas of fair comment and qualified privilege as defences to the claim at pars 20 and 21 respectively of the October minute of defence, with the defence of Lange qualified privilege being set out at par 22 of the defence. The balance of the pleading is directed to the issue of damages. In that respect, par 28 of the defence reads as follows:

"28. In further answer to the plaintiffs' statement of claim, the second defendant says that if it is liable for any damage or aggravated damage sustained by the plaintiffs by reason of the first defendant's conduct, pursuant to s 137(5) of the Police Act 1982 or otherwise as alleged, which is denied, the second defendant relies upon the matters alleged at par 14 herein, and the particulars thereto, in relation to any assessment of damages."

41 Before turning to the plaintiffs' application to strike out pars 14, 18 and 19 of the October minute of defence (which broadly correspond with the earlier defence filed 22 March 2005 mentioned in the plaintiffs' chamber summons), it will be useful to look at the principles bearing upon an application to strike out of this kind.

42 It will be convenient first to look at certain legal principles bearing upon the plaintiffs' application to strike out pars 18 and 19 of the October minute of defence which concern the second defendant's par 18 alternative meaning plea and the related par 19 justification plea, being pleas advanced pursuant to the so-called Polly Peck principle. This brings into play reasoning reflected in the decided cases as to how imputations ought to be pleaded.

43 Order 20 rule 19 of the Rules of the Supreme Court 1971 (WA) provides that the Court may strike out any pleading on the ground that it discloses no reasonable course of action or may prejudice, embarrass or delay the fair trial of the action. No evidence is admissible on such an application. As I have indicated, the convention is that all the facts alleged must be accepted as true.

44 The parties seeking to strike out must demonstrate that the plea is so obviously untenable it cannot possibly succeed or is manifestly groundless: Taylor v Jecks (1993) 10 WAR 309. However, there is a need for caution in exercising the power to strike out in order to ensure that the party whose plea is attacked is not improperly deprived of an opportunity for the trial of his case by the appointed tribunal. A court must be careful not to risk stifling the development of the law by summarily rejecting a line of defence where there is a reasonable possibility that, as the law develops, it will be found that the defence in question has merits: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.

45 In a defamation action of this kind the plaintiff must set out by way of a pleaded imputation the meaning which he or she alleges ordinary readers would infer from the words complained of unless the defamatory meaning is so clear that distillation is obviously unnecessary. The imputation must express the precise act or condition asserted of or attributed to the plaintiff or with which the plaintiff is charged: Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663 at 687. An imputation will be defamatory if it tends to lower the plaintiff in the estimation of right-thinking members of the community: Sim v Stretch (1936) 52 TLR 669 at 671; Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 at 447.

46 The Court will assume that the ordinary reader is a person of fair, average intelligence who does not live in an ivory tower, who is not unduly suspicious or naïve or avid for scandal and who is not inhibited by strict rules of construction: Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1.

47 The ordinary and natural meaning of words may be either the literal meaning or an inferred or an indirect meaning, not requiring the support of extrinsic facts. What the ordinary man, not avid for scandal, would read in the words must be a matter of impression. The impression will inevitably include a certain amount of loose thinking: Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632.

48 These principles indicate that care must be exercised in ensuring that the imputation crafted from the words complained of truly reflects the meaning of the words and is one which is capable of adversely affecting the plaintiff in the estimation of right-thinking members of society.

49 The decided cases indicate that a defendant is entitled to look at the whole publication in order to aver that in their context the words complained of bear a meaning different from that alleged by the plaintiffs. The defendant is entitled to plead that in the meaning thus contended for the words are true, and to give particulars of the facts and matters upon which he relies in support of his plea: Polly Peck (Holdings) plc v Trelford [1986] QB 1000.

50 This principle has been applied in a number of cases in this State upon the basis that a defendant who wishes to justify the words complained of in a meaning different from the meaning pleaded by the plaintiff must plead the meaning relied upon by the defendant and must plead justification in terms which make it clear that it is that meaning which is sought to be justified: Gumina v Williams (No 2) (1990) 3 WAR 351.

51 The Polly Peck principle was considered recently by the Full Court in this State in Nationwide News Pty Ltd v Moodie [2003] WASCA 273; (2003) 28 WAR 314. In that case, the plaintiff had pleaded that the words complained of conveyed meanings to the effect that the plaintiff had acted as a Mafioso in the course of performing his duties as Chief Executive of a hospital. The defendant sought to advance a Polly Peck plea that the words complained of had a different meaning, namely, that the plaintiff was dictatorial and secretive in his management style, and in that meaning they were true. The Full Court examined the reasoning in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519 in the course of observing that a plaintiff is not necessarily confined at trial to the exact imputations pleaded. It followed that a defendant may plead and justify alternative meanings that are less injurious and not substantially different from those pleaded by the plaintiff. It was held that the defendant's meanings were of that nature and could be pleaded.

52 Steytler J was of the view that because there was no clear majority in Chakravarti against the continuance of the practice of pleading Polly Peck defences, the practice should be permitted to continue at least until there has been further guidance from the High Court. However, the extent to which a defendant will be permitted to plead defamatory meanings different from those pleaded by a plaintiff will be constrained by the extent to which a plaintiff might himself or herself be permitted to rely at the trial upon imputations other than those pleaded.

53 McLure J was of the view that the test that the Polly Peck plea must be a "nuance or variant, not substantially different or more serious from that proposed by the plaintiff" as formulated by Ormiston JA in David Syme & Co Ltd v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667 was arguably unduly narrow having regard to the reasons of the majority of the High Court in Chakravarti.

54 These cases suggest that the Polly Peck defence must be confined to imputations and meanings similar to the imputations contended for by the plaintiff (that is; alternative meanings that are less injurious and not substantially different from those pleaded by the plaintiff), bearing in mind that the plaintiff is entitled to single out and complain only of certain passages or aspects of the publication in question, provided that he does not thereby deprive the defendants of reliance upon the common sting in the allegation: Templeton v Jones [1984] NZCA 14; [1984] 1 NZLR 448.

55 These principles can be difficult to apply in regard to discussion in which the name of the plaintiff is linked to wrongdoing or certain crimes.

56 A statement that a person is guilty of crime conveys the imputation that he is guilty and the same is generally true if the author of the statement says that there is a rumour that the person is guilty. Such imputations must be justified by proof of guilt, not by proof that the statement was made or that the rumour exists. But the same does not apply to statements that a person is under suspicion or investigation, for this must surely offend against the ideas of justice which reasonable persons are supposed to entertain whereby a person is presumed innocent unless and until his guilt has been established by a plea to that effect or the trial process. For example, in Lewis v Daily Telegraph Ltd [1964] AC 234 it was held by the House of Lords that statements to the effect that a fraud squad was enquiring into the affairs of a certain company and its chairman were not capable of meaning that the plaintiffs were guilty of fraud, for a person would not draw that conclusion unless he was unduly unfair in his approach to the situation.

57 In Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293, the High Court held that a communication which does no more than state that a person has been arrested and charged with a criminal offence is not capable of bearing the imputation that he or she is guilty or probably guilty of that offence.

58 These cases underline the distinction between a statement imputing guilt with respect to criminal conduct and a statement of mere suspicion. A plea which sets up an imputation of mere suspicion without more is not capable of carrying a defamatory meaning. However, if the statement complained of extended beyond mere suspicion and contained the assertion that the suspicion was held on reasonable grounds which themselves objectively lead to a conclusion that the person charged is probably guilty of the crime charged, then it could be regarded as defamatory: Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36 at 43.

59 In Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 8 December 1997 the Full Court in this State was concerned with a letter written by the appellant to the Police Fraud Squad which purported to be an official complaint about the conduct of the Union Secretary. The Full Court held as to a first imputation pleaded by the plaintiff that the ordinary, reasonable reader would have inferred from the words complained of that the author believed that the respondent was guilty of criminal misconduct. Accordingly, the words complained of were capable of bearing the imputation pleaded.

60 In dealing with the second imputation, the Full Court noted that a plea which sets up an imputation of mere suspicion, without more, is not capable of carrying a defamatory meaning. However, to say that someone believed there was a "prima facie case" brings with it an assertion that the person has so conducted himself as to give reasonable grounds for the other person to hold the suspicion. However, it is necessary to support the imputation by pleading the precise act or condition asserted of or attributed to the alleged wrongdoer. One way to test it, is to consider what must be proved in order to justify the truth of the imputation in so far as it concerns the alleged wrongdoer. The Full Court held that, in the circumstances of the case before it, the second imputation had failed to identify the precise act or condition complained of. Further discussion about issues of this kind appears in Rakhimov v Australian Broadcasting Corporation & Anor [2001] NSWSC 10 and in Ronci v Nationwide News Pty Ltd [2001] WASC 239.

61 In Hyams v Peterson [1991] 3 NZLR 648 a solicitor in the Department of Justice who had undertaken an investigation into unlawful commercial activity or white collar crime was thought to be one of those responsible for circulating a memorandum containing allegations about a group of business people labelled as "The Gang of 20". During the ensuing news media publicity the solicitor remained adamant in his call for an inquiry and his assertions that there was evidence of fraud. The Court of Appeal held that to say that there are grounds for suspecting a person of fraud or other discreditable conduct is, although defamatory, often different from and less serious than an assertion of his guilt. Cooke J observed at 655 that cases such as Lewis v Daily Telegraph Ltd (supra) and Mirror Newspapers Ltd v Harrison (supra) recognise that for practical purposes there can be an imputation of suspicion so strong as to be indistinguishable from guilt; it must always be a question of fact how far the defamatory meaning goes.

62 In Cash v Morris (1993) 10 WAR 518 the respondent claimed damages for defamation in respect of a published article which referred to the respondent as "a person reasonably suspected of involvement in criminal activity". The applicant's application for leave to appeal claimed that the words in question were capable of meaning that the respondent was reasonably suspected by police internal investigators of being involved in criminal activities. The Full Court held that the respondents were entitled to plead in support of a plea of justification any facts which were reasonably capable of giving rise to grounds for suspicion on the part of police internal investigators that the respondent was involved in criminal activities.

63 Let me now return to the circumstances of the present case.

The second defendant's par 18 alternative meaning plea

64 The plaintiffs contended in par 6 of the statement of claim that in its natural and ordinary meaning the publication or words complained of meant and were understood to mean that the plaintiffs and each of them had committed as criminal acts each of the Perth Mint swindle offences.

65 Pursuant to the Polly Peck principle the par 18 alternative meaning plea contended for by the second defendant was that the words complained of meant or were understood to bear the meaning that there were reasonable grounds to believe that the plaintiffs each committed the Mint swindle offences in respect of which their convictions had been quashed.

66 In essence, counsel for the second defendant submitted that the alternative meaning sought to be justified by the second defendant was a variant of, or not substantially different from, the meaning relied upon by the plaintiffs. It did not however convey exactly the same meaning as that relied on by the plaintiffs because there is a difference between an imputation that a person did an act and an imputation that there are reasonable grounds to believe that a person did an act. The alternative meaning fell within the boundaries marked out by the Full Court in Moodie (supra) in that the defendant was seeking to justify an alternative meaning that was less injurious and not substantially different from that pleaded by the plaintiff. In other words, there is a difference between an imputation that a person did an act and an imputation that there are reasonable grounds to believe that a person did an act.

67 Counsel for the second defendant submitted that in England three categories of imputation have been recognised. The sting of a libel may be capable of meaning that a claimant has in fact committed a criminal offence. Alternatively, it may be suggested that the words mean that there are reasonable grounds to suspect that he or she has committed an offence. A third possibility is that the words mean that there are grounds for investigating whether an offence has been committed: Chase v News Group Newspapers Ltd [2002] EWCA CIV 1772 at 45.

68 Defence counsel went on to submit that the observations of Cook J in Hyams v Peterson (supra) suggest that categorisation should not be treated as decisive. Imputations can have a variety of different shades or gradation of meaning. It must always be a question of fact how far the defamatory meaning goes. The publication made at the subject media conference, read as a whole, was capable of conveying the alternative imputation relied on by the second defendant.

69 On the other hand, counsel for the plaintiffs submitted that par 18 was liable to be struck out on the grounds that the words complained of were incapable of giving rise to the meaning contended for by the second defendant. The par 18 alternative meaning was not a permissible alternative meaning in that the imputation contended for was not the ultimate distillation of the alleged defamatory meaning. Moreover, the imputation did not express the act or condition asserted of or attributed to the plaintiffs or with which the plaintiffs were charged.

70 It follows from my review of the legal principles that in dealing with these respective contentions I proceed from the premise reflected in Moodie's case that in this State the practice of pleading Polly Peck defences should be permitted to continue at least until there has been further guidance from the High Court. A defendant may justify alternative meanings that are less injurious and not substantially different from those pleaded by the plaintiff. Consistently with that approach and the reasoning reflected in Hyams v Peterson (supra) I consider that it is open to a defence pleader in the course of arriving at a distillation of the words complained of to arrive at a formulation that there are reasonable grounds to believe that a person did an act which is more than an assertion of suspicion and is capable of injuring the reputation of the person affected. It is a question of fact as to how far the defamatory meaning goes.

71 When I apply this approach to the first matter raised by counsel for the plaintiffs I consider that I am entitled to have regard not only to that part of the media conference characterised by the plaintiffs as the publication complained of but also to the additional passages relied upon by the second defendant. In reviewing what was said, with a view to determining whether the words are arguably capable of conveying the meaning contended for by the second defendant I must keep in mind that the ordinary and natural meaning of words may be either the literal meaning or an inferred or an indirect meaning, not requiring the support of extrinsic facts. What the ordinary man would read in the words is a matter of impression and this will inevitably include a certain amount of loose thinking.

72 To my mind, the words complained of do not contain a clear and unequivocal assertion by the speaker that the plaintiffs are guilty of the Mint swindle offences. The words are certainly open to the interpretation that the speaker has reservations about the wisdom of the Court of Criminal Appeal's ruling and is of the view that evidence exists which might be sufficient to justify a finding to the contrary. Nonetheless, the various exchanges were surrounded by qualifications to the effect that the umpire's decision had to be respected, it was a matter of weighing up the evidence, speculation about other outcomes or scenarios were not appropriate, and the police service had been and was acting in accordance with established legal procedures concerning the presentation of cases which did not allow for apologies if convictions were overturned.

73 When these qualifications are added to the particular passages complained of by the plaintiffs which are said to amount to an assertion of guilt, it seems to me that to the mind of the ordinary man, not avid for scandal, the distillation of the words arguably does not come down to a bare assertion that the plaintiffs were guilty of the Mint swindle offences. A less injurious assertion is being made but one that is not substantially different from the meaning contended for by the plaintiffs. It is therefore arguably open to the pleader to arrive at a distillation of the kind contended for in the par 18 alternative meaning plea that there were reasonable grounds to believe that the plaintiffs committed the offences. I would not be prepared to strike out the plea on this ground.

74 As to the second matter raised by counsel for the plaintiffs, I accept, having regard to the legal principles mentioned earlier, that the proposed distillation must express the act or condition asserted of or attributed to the plaintiffs. This brings me to the reasoning in Rakhimov (supra) and my own reasoning in Ronci's case (supra). In that case the alternative meanings contended for pursuant to the Polly Peck principle included a plea that the plaintiff was suspected on reasonable grounds of killing a named person. I was of the view that the suspicion raised by the words complained of was arguably referable to the plaintiff's conduct because she was said to have been present at the death and was the party who was subsequently questioned at length by the police. I took account of the observations of Levine J in Rakhimov's case concerning the use of the passive voice in regard to a pleading of this kind. However, in the end, I was not persuaded that the imputations contended for were obviously untenable or manifestly groundless, and I was not prepared to strike out the pleas in question.

75 I consider that the same approach is applicable to the circumstances of the present case. The attribution of a condition to the plaintiffs in a passive voice is permissible. It is not strictly necessary to plead that the plaintiffs "so conducted" themselves to warrant the reasonable grounds for the belief, especially in circumstances where it would be obvious to an ordinary listener at the media conference in question that the events underlying the Mint swindle offences were of considerable complexity but linked essentially to activities allegedly undertaken by the plaintiffs.

76 Accordingly, I am not prepared to strike out the par 18 alternative meaning plea on this ground.

77 In par 19 of the October minute of defence the second defendant repeats par 18 of the defence and says that the words so understood were true in substance and in fact. In earlier discussion, I described, in a summary form, the nature of the particulars of facts or matters set out in support of this plea.

78 Counsel for the plaintiffs submitted that the issues arising as to this matter were inextricably linked with the plaintiffs' objection to the par 18 alternative meaning plea. It was said, in essence, that if, when properly distilled, the par 18 alternative meaning plea amounted simply to an assertion of guilt then it was not open to the second defendant to rely upon the history of the matter and the lines of reasoning in various judgments concerning the strength of the allegations made against the plaintiffs and to set out at great length a summary of the circumstantial evidence from which inferences of guilt could be drawn. In strict analysis, on that view of the matter, the plea of justification required that particulars be provided which showed that the second defendant at trial would be seeking to establish that the plaintiffs were in fact guilty of the Mint swindle offences, notwithstanding the ruling of the Court of Criminal Appeal.

79 It was said further by the plaintiffs that the justification sought to be pleaded at par 19 was an attempt to usurp the authority of the Court of Criminal Appeal and the plea was accordingly an abuse of the process of the Court. Paragraph 19 was frivolous and vexatious and would prejudice, delay and embarrass the fair trial of the action and was therefore bad at law.

80 It follows from my earlier ruling that I must proceed from the premise that the par 18 alternative meaning plea can be advanced. Thus, the matters the second defendant is seeking to rely upon in order to justify the imputation the subject of the alternative meaning plea are the fact of the plaintiffs' initial convictions, the outcomes of the subsequent appeals, the terms of certain of the judgments on appeal and the nature of the evidence adduced at the original trial.

81 To my mind, when these matters are considered in conjunction, they are arguably matters capable of establishing reasonable grounds for the formation of a reasonably held belief as to guilt, viewed objectively. In other words, in justifying an imputation such as the par 18 alternative meaning plea the second defendant is not restricted to relying on underlying allegations of fact.

82 To my mind, there is support for this view to be found in Cash v Morris (supra) where it was held that a defendant was entitled to plead any facts which were reasonably capable of giving rise to grounds for suspicion on the part of the police investigators. This included the fact of certain statements made to those investigators.

83 This approach accords with the recognition in other areas of the law that the matters that may provide reasonable grounds for a suspicion or belief in a fact are not confined to those which would be admissible in Court in order to establish the fact: George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at 116; Kays Holdings Pty Ltd v Nassar [1968] 1 NSWR 497 at 504.

84 It follows from these observations that I am not persuaded that particulars in the form pleaded should be struck out on the grounds that they are untenable or manifestly groundless. Accordingly, I will dismiss the application to strike out par 19 of the October minute of defence.

85 I must now return to the application to strike out par 14 of the October minute of defence. In doing so, I remind myself that the par 14 defence plea of notoriety was said to be relied upon by the second defendant simply in relation to the question of the assessment of loss and damage, being linked to the later defence plea concerning damages in the new par 28 of the October minute of defence.

86 The second defendant pleaded at par 14 that at all material times it was notorious that the plaintiffs had been convicted of offences in relation to the swindle of gold bullion from the Perth Mint and had repeatedly asserted that they had been wrongly convicted of those offences. Lengthy particulars were provided alluding to the history of the matter and media reports and other events concerning the same. Counsel for the second defendant submitted that this was linked to the further plea at par 28 of the October minute of defence concerning the assessment of any damages or aggravated damages awarded to the plaintiffs should liability be established.

87 In Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 Windeyer J noted at 149 that aggravated damages are given to compensate the plaintiff when the harm done to him by wrongful act was aggravated by the manner in which the act was done. On the other hand, exemplary damages are intended to punish the defendant, and presumably to serve one or more of the objects of punishment - moral retribution or deterrence.

88 In relation to aggravated damages Lord Devlin said in Rookes v Barnard [1964] UKHL 1; [1964] AC 1129 at 1221 that the motives and conduct of the defendant may be taken into account where they aggravate the injury done to the plaintiff. He observed that there may be malevolence or spite or the manner of committing the wrong may be such as to injure the plaintiff's proper feelings, dignity and pride. These are matters which the jury can take into effect in accessing the appropriate compensation.

89 In David Syme & Co Ltd v Mather [1977] VicRp 58; [1977] VR 516 Lush J said that aggravated damages may be awarded if the defendant's conduct aggravates the subjective hurt to the plaintiff. They cannot be awarded merely for reasons of indignation felt by the jury, but only if the evidence points to the conclusion that the blow to the plaintiff's pride, however it may be called, has been or must have been worsened by what was done.

90 Counsel for the plaintiff submitted that the categories of matters that may be led in mitigation of damage by a defendant have been determined by the House of Lords in Plato Films Ltd v Speidel [1961] AC 1090, adopting the decision of Cave J in Scott v Sampson (1882) 8 QBD 491. It was said that the common characteristic of all matters that may lead to mitigation is that they pertain to an aspect of the bad character or poor conduct of the plaintiff. However, in this case, the matters sought to be relied upon by the second defendant are not founded in any allegation of bad character or poor conduct, and accordingly should be disallowed.

91 The second defendant submitted that the conduct complained of in making the publication should be viewed in the context of the background circumstances surrounding the media conference. These included the alleged notoriety of the plaintiffs in relation to Mint swindle convictions and repeated assertions that they had been wrongly convicted of those offences and that police officers had fabricated evidence against them.

92 Counsel for the second defendant submitted that in the circumstances it was inevitable that a spokesman for the police service would be called upon to comment on the ruling handed down by the Court of Criminal Appeal, and that allowance had to be made for this underlying reality. He submitted further that evidence of background context directly relevant to the damage which the plaintiffs claim has been caused by the words complained of is admissible for the purposes of mitigating damages: Anderson v Ah Kit [2004] WASC 194 at par 31.

93 I see force in the submissions made by counsel for the second defendant. The legal principles mentioned earlier indicate that the assessment of damages will be influenced by whether what was said gave rise to an unnecessary hurt or was said in circumstances likely to create unnecessary hurt. It seems to me that in the circumstances of the present case the first defendant could arguably be regarded as acting in the performance of a public duty to state the position of the police service with respect to a long-standing matter of controversy in the public domain. To my mind, given the history of the Mickelberg case, and a legitimate public interest in the workings of the police force and the legal system, the first defendant's actions cannot be characterised as malicious or irresponsible. Accordingly, I am not prepared to hold that the par 14 plea should be struck out upon the basis that it is untenable or manifestly groundless.

94 The plaintiff will be allowed leave to bring a strike out application in respect of the second defendant's defence filed 22 March 2005. The application to strike out pars 14, 18 and 19 of the defence filed 22 March 2005 as refined by the October minute of defence will be dismissed. The second defendant will be allowed leave to amend its statement of defence in terms of the October minute of defence. I will hear from the parties as to whether any further orders or directions are required.

Mickelberg & Anor v Hay & Anor [2006] WASC 285

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Judgment (159 paragraphs)

Mickelberg & Anor v Hay & Anor [2006] WASC 285 (18 December 2006)

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Legislation Cited (1)

Cases Cited (16)