First matter complained of
3 The article in the print newspaper was published under the headline "Money has a starring role in locally made movies". It discussed the high dependence on money of the Australian film-making industry and, in that context, reported that one film distributor, Palace Films, had become "so slow in returning profits to film producers that Federal film funding agency, the Film Finance Corporation, blacklisted the company". The plaintiffs in these proceedings are that company, Palace Films Pty Ltd, and its two directors, Mr Antonio Zeccola and Mr Benjamin Zeccola.
4 The defendants to the action based on that publication are Ms Michaela Boland, the journalist under whose by-line the article was published, Mr Brian Rosen (whom Ms Boland interviewed for the purpose of the article) and two Fairfax companies. They have objected to every defamatory imputation pleaded by Palace Films in respect of the first matter complained of other than those expressly allowed in my earlier judgment.
5 I should record that the plaintiffs have agreed to remove paragraph 11 of the pleading following an election to sue Mr Rosen as an original publisher of the whole of the material in each of the three matters now complained of: see my earlier judgment at [24] to [25]. As a result of that change a further amended document has been distributed but not filed. It is convenient to adopt the numbering of that document.
6 The imputations pleaded by the plaintiffs in respect of the first matter complained of are set out in paragraph 12 of the amended pleading. Imputation 12(a) is:
"that [Palace Films] was blacklisted by the Film Finance Corporation because it did not pay profits due to film producers".
7 Mr Rasmussen, who appeared for the plaintiffs, acknowledged during argument that the article does not go so far as to charge that Palace Films did not pay profits. Rather, the criticism is that the company was too slow to pay those profits. He sought leave to amend that imputation so as to read that Palace Films was blacklisted by the Film Finance Corporation because it was too slow to pay profits due to film producers. Leave should be granted to amend so as to rely on an imputation in those terms.
8 Imputation 12(b) is:
"that [Palace Films] deliberately failed to honour its distribution commitments thereby placing in jeopardy the production of Australian Films".
9 The imputation is a repleading of an earlier imputation that Palace Films failed to provide distribution guarantees thereby disadvantaging film producers. That imputation was rejected in my earlier judgment for the reasons stated at [45] to [46].
10 The Fairfax defendants and Mr Rosen object to the new imputation both as to form and on the basis that it is not capable of being conveyed by the article. As to form, it is submitted that the imputation is bad for imprecision by reason of the use of the phrase "distribution commitments", the meaning of which is unclear.
11 Separately, the Fairfax defendants complain that the phrase "placing in jeopardy the production of Australian films" was a formulation rejected in my earlier judgment at [45]. I do not think that is quite what was said in that passage of my earlier judgment. The difficulty with the earlier imputation was that it identified an outcome without identifying any discreditable act or condition causing that outcome.
12 A further objection by the Fairfax defendants is that the term "deliberately" is unclear as to whether it means part of a strategic decision or simply the result of having run out of money.
13 As to capacity, the defendants object that the article says nothing about "deliberate" actions and says nothing about any action of Palace Films placing Australian film production in jeopardy. The capacity objection cannot be considered divorced from the objection as to form. I would observe, however, that to my reading the article is not so innocuous as suggested by the defendants.
14 In my view, there is force in the complaint as to the use of the phrase "distribution commitments". That phrase is used in the article but in quite a different sense from the sense in which it appears to be used in the imputation. In order to explain that conclusion, it is necessary to give close consideration to the whole article.
15 The critical statements in the article are that although Palace is a great supporter of local films, its schedule of titles in production is barren; that the reason for that circumstance is that Palace became so slow in returning profits to film producers that the Film Finance Corporation blacklisted it; that both the Film Finance Corporation and Screen Australia had decided not to accept "distribution commitments" from Palace until certain commercial arrangements were concluded; that the company's executive director Benjamin Zeccola was denying that it had failed to deliver returns to film producers; that aggrieved producers would probably work with the company again; that Palace "owed money on quite a few films"; that Mr Zeccola contended that the company had never failed to meet "a distribution guarantee or payment schedule"; that one producer had complained about being unable to seek "more funds from private investors" as they had not received returns, due to Palace's slow payment; that as Palace Films' slate stalled, producers of films about to go into production found their "distribution guarantees" failed to materialise and that the Film Finance Corporation "stepped into the breach" and "paid the distribution guarantee".
16 Thus the structure of the film industry as described in the article is that film producers (and their investors down the line) rely on film distributors (such as Palace Films) to distribute their films and remit the returns. If those returns are not paid promptly, film producers are left in a weak position to seek the further investment funds they require for the production of future movies.
17 The impression that emerges from a careful reading of the article is that the distribution company plays an important role in the profitability of the film. The article refers (if obliquely) to two aspects of that role. One is the distribution of the film. The article quotes one director as saying that it was "fair enough" that Palace did not distribute his movie, despite having agreed to:
"He said when the teen thriller was finished, it just wasn't the right fit for Palaces' art house style".
18 The second aspect of the distributor's role referred to in the article is the return of profits to the film producer. Presumably, such profits can only be earned if the film is successfully distributed.
19 I have explained these matters at some length in order to demonstrate the ambiguity of the contention that Palace Films "deliberately failed to honour its distribution commitments". It could mean that Palace Films deliberately chose not to distribute films despite having agreed to, as in the case of the teen thriller referred to. Alternatively, it could mean that, having distributed films as agreed, Palace Films embarked on a deliberate strategy of not returning the profits to the producer of the film, or that it knowingly failed to return those profits because it was unable to do so.
20 Mr Rasmussen complained that the difficulty arises from the fact that the meaning of the term "distribution commitments" is not clearly defined in the article itself. I accept that it takes some reading to work out what kind of commitment is being referred to in different parts of the article but I think it can be gleaned that there are the two different roles to which I have referred. Ultimately, the task of articulating the case that will be put as to what those words mean is that of the pleader. In my view, the imputation in its present form is imprecise and must be struck out.
21 It is convenient to consider imputations 12(c) and 12(d) together. They are:
(c) "that [Palace Films'] conduct in the Australian Film industry is dishonourable".
(d) "that [Palace Films'] conduct in failing to honour its distribution commitments is dishonourable".
22 For the reasons discussed above in respect of imputation 12(b), in my view imputation 12(d) is imprecise for its reference to a failure to honour "distribution commitments".
23 Imputation 12(c) raises the issue whether a publication dealing with a specific incident or specific conduct is capable of supporting a general imputation. In my earlier judgment, I referred to the discussion of the relevant principles in Nationwide News Pty Limited v Warton [2002] NSWCA 377 at [56] to [61]. In that case, Heydon JA (as his Honour then was) explained that, although it has been recognised "as a general proposition" that a publication dealing with a specific incident is incapable of supporting a general imputation, that proposition does admit of exceptions in particular circumstances. The task is to pay "close and careful attention to the specific circumstances with a view to determining whether the specific conduct alleged in a particular case, unlike specific incidents alleged in other cases, can support a general imputation": at [60]; Handley JA agreeing at [1]; Hodgson JA agreeing at [63].
24 Since the imputation which identifies the specific conduct in the present case is to be struck out for imprecision, it is not possible to undertake that task at this stage.