Plaintiff v First Defendant

2 The three articles published in the Herald Sun newspaper of 5 December 2007 were, first, an article on pages 1 and 4, entitled "Exclusive: Horse tycoon's cash trail to drug lord - X $1Mil mate", secondly, an article on page 4 entitled "Life in the fast lane", and, thirdly, an article on page 5 of the newspaper entitled "Waking in fright at boss's city pad". The statement of claim refers to those articles respectively as the first, second and third articles, and I shall use the same means of identifying them. Those articles are pleaded by the plaintiff as three separate publications. In their defence, the defendants plead that the three articles should be considered as a single publication. The fourth article, published on page 8 of the edition of the Herald Sun of 6 December 2007, was entitled "Tycoon admits deal". In addition, the plaintiff complains of the publication of each of the four articles on the first defendant's website.

3 It is not useful, at this stage, to set out, in extenso, the contents or substance of the four articles. In essence, the first, third and fourth articles allege that there has been a relationship and particular dealings between the plaintiff and X ("X"), who was described in the articles as a "drug czar", "drug lord" and "drug boss". The second article relates to the circumstances in which the plaintiff, in 1990, was convicted on a charge of unlicensed securities dealing, and also relates how the plaintiff has twice been called as a witness on behalf of the prosecution in two murder trials in which the accused was one Bruce Burrell.

4 In paragraph 16 of their defence, the defendants plead a common law defence of fair comment in respect of each of the four articles. In accordance with recent authority, and in particular the decision of the Court of Appeal in Hore-Lacy v Cleary & Anor[1], the defendants provided particulars of the substance of the comment by reference to some, but not all, of the innuendos pleaded by the statement of claim. In respect of the first article, the plaintiff, in paragraph 6(a) of the statement of claim, pleaded nine false innuendos. The fair comment defence pleaded by the defendants is directed to the meanings set out in the first six of those innuendos. Those innuendos are:

"(1) The plaintiff was illicitly and criminally involved in the activities of underworld drug baron X;

(2) The plaintiff made secret and illicit payments totalling about one million dollars in cash to drug baron X;

(3) The plaintiff, as a close friend of drug baron X, acted as a stooge for X's ownership of the racehorse Miss Andretti;

(4) The plaintiff concealed illicit and illegal payments to X through false contracts;

(5) As part of the plaintiff's illicit and improper dealings with drug baron X, the plaintiff acquired X's Kilmore property at gross undervalue;

(6) The plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug."

5 Paragraph 6(b) of the statement of claim pleads two false innuendos in respect of the second article. By their defence, the defendants direct the fair comment defence to the second innuendo, namely:

"(2) The plaintiff is involved in illegal business activities."

6 Paragraph 6(c) of the statement of claim pleads one false innuendo derived from the third article. The defendants do not direct the fair comment defence to that innuendo. Paragraph 10 of the statement of claim pleads four false innuendos in respect of the fourth article. The fair comment defence, pleaded by the defendants is directed to the third such innuendo, namely:

"(3) The plaintiff concealed illicit and illegal drug payments to X through false contracts."

7 The plaintiff seeks to strike out the defence of fair comment, on the basis that the imputations, to which that defence is directed, are imputations of fact, and are not capable of being found, by a jury, to constitute comment or opinion. On the other hand, the defendants contend that if those innuendos derive from the articles, they only arise by way of deduction or inference drawn from facts stated and identified within the articles. As such, it is submitted, each of those innuendos are expressions of opinion, not statements of fact.

8 The principles which are applicable to resolving the issue raised by those contentions can be shortly stated. They were recently distilled in the judgment of Nettle JA in State of New South Wales v IJ Index PLC & Anor[2]. In order to deal with the issues which were raised by the plaintiff's summons, it is useful to restate them in a different order, namely:

(1) It is for the jury, or the tribunal of fact at trial, and not the judge, to decide whether the publication, complained of by the plaintiff, constitutes a statement of fact or an expression of opinion.[3]

(2) A judge may only strike out a defence of fair comment or (at trial) take that defence away from the jury, if the publication complained of could not reasonably be regarded by the jury, or tribunal of fact, as constituting comment by the writer.[4]

(3) A statement may be regarded as an expression of opinion, and not an allegation of fact, "... if it appears to be a deduction, inference, conclusion, criticism, judgment, remark or observation come to by the writer or speaker from facts stated or referred to by him, or in the common knowledge of the person writing or speaking and those to whom the words are addressed, and from which his conclusion may reasonably be inferred".[5]

(4) In order to qualify as comment, the publication complained of must be reasonably capable of being understood, by the ordinary reasonable reader or listener, as constituting the expression of the writer's opinion, and not an allegation of fact by the writer. For that purpose, the opinion or comment, relied on by the defendant, must not be so mixed up or intermingled with allegations of fact in the publication, that the reader or listener cannot readily distinguish between what is an assertion of fact and what is an expression of opinion by the publisher.[6]

9 It is important to bear in mind that the relevant test is not whether the writer intended to convey his or her opinion, but, rather, whether the ordinary reasonable reader of the published matter would understand it to be an expression of the writer's opinion. Thus, in Channel 7 Adelaide Pty Ltd v Manock[7], Gummow, Hayne and Heydon JJ stated:

"The question of construction or characterisation turns on whether the ordinary, reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' - not 'an exceptionally subtle' recipient, or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at'."[8]

10 In Goldsborough v John Fairfax & Sons Limited & Anor[9], Jordan CJ expressed the requirement, that the writer identify the comment with sufficient clarity, in the following terms:

"For the defence to succeed, it is essential that the whole of the words in respect of which it is relied on should be comment, that they should be fair, and that they should be on a matter of public interest. It must be indicated with sufficient clearness by the words themselves, taking them in the context and the circumstances in which they were published, that they purport to be comment and not statements of fact; because statements of fact, however fair, are not protected by this defence. In other words, it must appear that they are opinions stated by the writer or speaker about facts, which are at the same time presented to, or are in fact present to, the minds of the readers or listeners, as things distinct from the opinions, so that it can be seen whether the opinions are such that they can fairly be formed upon the facts."[10]

11 The distinction between an allegation of fact and an expression of opinion, and the test to be applied in determining whether the material complained of is capable of constituting comment, can be best understood by reference to the underlying rationale for that distinction. In Hore-Lacy v Cleary & Anor[11], I described that rationale, by reference to the judgment of Fletcher Moulton LJ in Hunt v Star Newspaper Co Limited[12], as follows:

"Where a defendant publishes a defamatory statement of fact, it may only be justified if the defendant establishes that those facts are true. On the other hand, where a defendant, on facts truly stated or identified, makes a defamatory comment about a plaintiff, the comment may be justified as 'fair', provided that it is a comment which a fair minded person might honestly hold. Thus, the law of defamation permits a considerable latitude to those who express their opinion, honestly, on facts truly stated or identified by them. The position is otherwise for those who choose to make defamatory assertions of fact about an individual. The rationale for the distinction, and for the greater latitude shown to those who make comments, is that where the speaker or writer truly states facts, and then expresses an opinion on those facts, the readers or listeners can properly judge for themselves the validity of the opinion. By contrast, where a defamatory allegation of fact is made, the reader or listener of it is presented with that fact at face value, and has no means of judging it for themselves."

12 It is necessary to set out the whole of the first article, in order to determine whether a jury might reasonably conclude that the six innuendos pleaded by the plaintiff, which the defendants assert to be fair comment, are reasonably capable of being considered by the jury to be expressions of the writer's opinion, rather than allegations of fact.

"Exclusive: Horse tycoon's cash trail to drug lord

X's $1Mil mate

Car care tycoon Sean Buckley - owner of Champion international racehorse Miss Andretti - handed about $1 million in cash to drug czar X in a series of weekly payments.

The secret payments - up to $50,000 at a time - were handed over during visits to Mr Buckley's East Melbourne hair restoration salon - an offshoot of his UltraTune empire.

Mr Buckley also arranged a bogus client contract to hide his close dealings with X.

On one occasion X was given a cash cheque drawn on Mr Buckley's company.

The exact reasons for the transactions are unknown, but it is estimated about $1 million was passed to Mr X.

Mr Buckley has always maintained he had an innocent relationship with the drug baron.

He denied the latest allegations as 'entirely false and without foundation' in a letter from his lawyers.

But the Herald Sun can reveal the pair had a close financial and social association, linked by their love of horse racing.

X, who is banned from racecourses, has been suspected of disguising his ownership of racehorses by registering them in the names of friends and business associates.

Miss Andretti, a winner of Royal Ascot, is in Hong Kong for Sundays $2.2 million International Sprint.

The glamour mare, who won Australia's Racehorse of the Year last week, is favourite to win.

Mr Buckley's UltraTune empire - comprising car care outlets, hair restoration studios and extensive horse racing interests - is a leading Australian corporation.

But the 47-year-old businessman, who once entered into a bankruptcy arrangement, has been dogged by his association with X - right up to the time X breached bail and fled Australia on the eve of his sentencing on cocaine trafficking charges.

The Herald Sun has pieced together the strong association between X and Mr Buckley.

It also involved X's free use of the businessman's luxury Melbourne and Gold Coast apartments.

Everyone who spoke to the Herald Sun did so on condition of anonymity, fearing repercussions from one man in particular - Peter Sean Buckley.

The father of two is viewed by those who have had professional dealings with him as having a violent temper, acting like a commercial thug, and 'a man with eight different personalities'.

In 1992, he was convicted of fraud involving share dealing without a licence and using false names to operate accounts with stockbroking firms. He pleaded guilty and received a two year good behaviour bond.

He was also known to use his connection with X in business and staff situations.

Sources told of how X went to the UltraTune studio - where Mr Buckley had an upstairs office - to collect money.

'The cash was collected every week from Sean's UltraTune car service outlets - not the franchises - and taken to the Box Hill headquarters', a source said.

'It was bound together with rubber bands and placed in a brown paper bag'.

The money was sometimes collected by prostitutes, sometimes by a former Miss Nude World finalist.

It was usually delivered by a trusted senior UltraTune employee to the Ultra Hair Studio Pty Ltd Studio in Victoria Street, East Melbourne.

X would then call in and collect the cash.

'It was an open secret. A lot of people in the company were aware of it', a source said.

'They'd go upstairs and later lunch together at a small café next door. Sometimes one of Buckley's managers would join them'.

'They'd be sitting together, laughing and joking like they were old mates having a good day. Sean would often say he and X were mates'.

X would sometimes arrive in a black Mercedes driven by a young woman, which would be parked in a No Standing bay close to the hair studio. He would leave the driver behind the wheel and the engine running.

X often had a bodyguard, sources said.

'But there were times when he didn't bring protection. That is, one we could see', another witness said.

Sources said Mr Buckley later feared X visits could involve him in a possible police surveillance operation.

So he initiated a contract pretending that X was receiving laser hair treatment.

'He believed that he would explain X's weekly visits to his salon', another source said. 'Sean asked one of the staff to make up a false contract for laser (treatment) forX'.

'When asked why, Buckley turned to her and said: 'Just in case the Federal Police boys come around here'."

Sources told the Herald Sun X never received laser treatment.

'It was bull... . X had no hair and you can't grow hair on a bald head. X never received treatment', one said.

But Mr Buckley's lawyers told the Herald Sun X entered a contract with Ultra Hair for laser growth treatments 'but he quit from his contract after a few months'.

Mr Buckley publicly stated in 2004 he had inadvertently purchased X's farm at Willomavin, near Kilmore, claiming he was unaware at the time of its ownership.

Mr Buckley bought the farm, part of a Department of Justice asset seizure, for $1.1 million - several million dollars below its true value.

'I bought a farm off X. Well I didn't buy it off X, only because his wife owned it ... But I bought a farm off them, 'he told the Sunday Age six weeks ago.

'My lawyers handled everything and they executed it in the correct method. It went to the Supreme Court of Victoria and was approved'.

'And in those interviews with X when he was at the lawyer's office, he said he had a hair loss problem and he came to one of my hair loss studios, simple as that'."

14 As I have stated, the plaintiff has pleaded nine "false" innuendos as constituting the ordinary and natural meaning of the first article.[13] The defendant has directed its plea of fair comment to the first six of those innuendos. Mr S K Wilson QC, who appeared with Mr M Clarke for the plaintiff, submitted that each of those six imputations, to which the defendants have sought to plead fair comment, could only reasonably be considered to be a statement of fact, and not an expression of opinion by the writer or publisher of the first article. He submitted that none of the six imputations purport to be the opinion or deduction of the writer of the article. Each of them is drawn from statements of fact, and not expressions of opinion, in the article. The six imputations in question "wrap up" the various facts stated in the article as the underlying meaning or "stings" stated by the article.

15 Thus, Mr Wilson submitted that the allegations in the first, second, fourth and fifth innuendos pleaded in paragraph 6(a) of the statement of claim in respect of the first article, imputing illegal and criminal involvement of the plaintiff in X's activities, secret and illegal payments by the plaintiff to X, and illegal and improper dealings by the plaintiff with X, are all only capable of being understood to be allegations of fact by the publishers of the first article. Those allegations derive from particular facts stated in the article, including: the payment of large amounts of cash by the plaintiff to a well known criminal; the handing over of those monies in brown paper bags; the fact that the monies were sourced, not from franchises, but from the plaintiff's own business outlet; the fact that the cash monies were collected by unsavoury people; and the fact that X's attendance at the plaintiff's business premises was being camouflaged by a bogus contract between the parties. Each of those express statements in the article is a statement of fact. The imputations pleaded by the plaintiff in respect of them are no more than a restatement of those facts, as they would be understood by the ordinary reasonable reader of them.

16 Similarly, Mr Wilson submitted that the third innuendo pleaded in paragraph 6(a) of the statement of claim, in respect of the first article - that the plaintiff acted as a stooge for X's ownership of the race horse Miss Andretti - could only be understood as a factual allegation. That imputation derived from the factual statements contained in the article, namely, that the plaintiff owned Miss Andretti, that the plaintiff and X had a close association linked by their mutual love of horse racing, that X is banned from race courses, and that X has been suspected of disguising his ownership of race horses by registering them in the names of friends and business associates. All of those statements were statements of fact. The sum total of those statements is the imputation pleaded in paragraph 6(a)(3) of the statement of claim. Thus, Mr Wilson submitted that that imputation could only be reasonably regarded as an allegation of fact.

17 Likewise, Mr Wilson submitted that the sixth innuendo, to which the defendants pleaded fair comment in respect of the first article - that "the plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug" - was itself a statement of fact, derived directly from the allegations of fact in the article, namely, that the plaintiff was viewed by those who had professional dealings with him as having a violent temper, acting like a commercial thug, and "a man with eight different personalities". Mr Wilson submitted that each of those allegations, stated in the article, was a statement of fact. The imputation was no more than a restatement of those facts, as a factual allegation. Thus, he submitted, the imputation pleaded in paragraph 6(a)(6) of the statement of claim was only capable of being reasonably regarded by a jury as an allegation of fact, not an expression of opinion.

18 In response, Ms G Schoff, who appeared with Mr W Houghton QC for the defendants, submitted that considerable caution must be exercised in determining whether to strike out a defence, or withdraw it from a jury[14]. She further submitted that even the most explicit allegation of fact may be regarded as a comment, if it is capable of being understood by the reader, not as an independent imputation of fact, but rather as an inference from facts stated.[15] Ms Schoff submitted that the first article, which is alleged to give rise to the imputations contained in paragraphs 6(a)(1), (2), (4) and (5) of the statement of claim, does not contain the words "illicit", "criminal", "illegal", or "improper". Thus, insofar as the ordinary reasonable reader might understand the article to allege such conduct on behalf of the plaintiff, the reader must deduce or infer those meanings from the facts stated in the article. Thus, she submitted, the imputations pleaded in those sub-paragraphs of the statement of claim are necessarily the result of deductions or inferences drawn by the reader, and, as such, are expressions of opinion, not statements of fact.

19 Similarly, in respect of the allegation in paragraph 6(a)(3) of the statement of claim, Ms Schoff submitted that the article does not expressly allege that the plaintiff acted as a "stooge" for X's ownership of the racehorse Miss Andretti. The imputation, to that effect, could only be the result of an inference or a deduction drawn from the facts stated in the article, and as such constitutes an expression of opinion, and not a statement of fact.

20 Finally, Ms Schoff submitted that the imputation pleaded in para 6(a)(6) of the statement of claim was, on its face, an expression of opinion, and not a statement of fact. Ms Schoff placed emphasis on the fact that the article stated that those who had had dealings with Buckley "viewed" him as having a violent temper, acting like a commercial thug, and being like a man with eight different personalities. As such, she submitted, the article was capable of being understood as an expression of opinion, by those who knew the plaintiff, as to the nature of his character and personality. Accordingly, she submitted that the imputation pleaded in paragraph 6(a)(6) is capable of being considered by a jury to constitute an expression of opinion, rather than an allegation of fact.

21 In my view, the answer to the question raised by the submissions, which I have just summarised, lies in an analysis and understanding of the role of imputations in the law of defamation. In this case, as I have stated, the plaintiff alleges that each of the four articles, of which he complains, was defamatory of him in its ordinary and natural meaning. In respect of the first article, the plaintiff has pleaded nine "false" innuendos, to six of which the defendants have directed a defence of fair comment. The innuendos pleaded by the plaintiff constitute what the plaintiff, in the proceeding, contends are the meanings which an ordinary reasonable reader would understand that the first article were intended by the defendants to convey.

22 Originally, and until about the 1960s or later, it was not commonplace for a plaintiff to plead "false" innuendos, particularly where those innuendos were obvious, and where the defamatory allegation complained of emerged clearly from the express language of the publication. For example, where an article alleged that a plaintiff had stolen large sums of money from his employer, it was not necessary for the plaintiff to plead the meanings which the plaintiff intended to allege that that article bore. However, by about the 1960s, the practice had emerged of plaintiffs pleading "innuendos", where the ordinary meaning of a publication was not so clear, or where the meaning to be relied on by the plaintiff constituted what the plaintiff regarded as the defamatory "sting" of the publication. In 1964, in R v Lewis[16], it was noted by the House of Lords that, as part of that practice, plaintiffs pleaded "false" innuendos notwithstanding that the defamatory meaning of the publication complained of, in its ordinary sense, might be obvious.[17] Nevertheless, the principle, as identified by the Full Court of the Supreme Court of Victoria in Barclay v Cox in 1968[18], remained that the issue to be determined by a jury was not whether the plaintiff had made out the false innuendos pleaded by him but, rather, whether the jury was satisfied that the publication complained of, in its ordinary and natural meaning, was defamatory of the plaintiff.

23 Subsequent to those cases, there have been a number of developments in the practice of pleading innuendos in the field of defamation. In particular, a substantial body of case law has developed, where a defendant seeks to plead justification to an alternative, or different, meaning to that pleaded by the plaintiff.[19] However, those authorities have not altered the fundamental point which is relevant for this case, namely, that a "false" innuendo is no more than the ordinary and natural meaning which a plaintiff alleges a publication conveyed to the reader or listener of it.

24 In my view, central to the issues of this case is a proper understanding of what is constituted by a "false" innuendo. It is fundamental to the law of defamation that the question whether a particular publication is defamatory of a plaintiff, and the related issue as to what (if any) defamatory meanings were conveyed by the publication, is determined by reference to the standard of the "ordinary reasonable" reader or listener of the publication. The authorities emphasise that that hypothetical person does not necessarily construe and understand a publication in the same way as a lawyer. The ordinary reasonable reader or listener is described by the law as someone who is not "avid for scandal", and who is neither "unusually suspicious nor unusually naïve".[20] Such a person does engage in a degree of loose thinking, and is understood to read between the lines.[21]

25 The mental processes of the hypothetical "ordinary reasonable" reader or listener were described by Lord Reid in Lewis v Daily Telegraph Limited[22] in the following terms:

"The ordinary man does not live in an ivory tower and he is not inhibited by a knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs. ... What the ordinary man would infer without special knowledge has generally been called the natural and ordinary meaning of the words. But that expression is rather misleading in that it conceals the fact that there are two elements in it. Sometimes it is not necessary to go beyond the words themselves, as where the plaintiff has been called a thief or a murderer. But more often the sting is not so much in the words themselves as in what the ordinary man will infer from them, and that is also regarded as part of their natural and ordinary meaning. Here there would be nothing libellous in saying that an inquiry into the appellant's affairs was proceeding: the inquiry might be by a statistician or other expert. The sting is in inferences drawn from the fact that it is the fraud squad which is making the inquiry. What those inferences should be is ultimately a question for the jury, but the trial judge has an important duty to perform."[23]

26 In similar terms, Lord Morris of Borth-Y-Gest, delivering the judgment of the Privy Council in Jones v Skelton[24], stated:

"The ordinary and natural meaning of words may be either the literal meaning of it or may be an implied or inferred or indirect meaning: any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words. ... The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words. The test of reasonableness guides and directs the court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."[25]

27 Ultimately, of course, the focus is what the ordinary reasonable reader would understand the article intended to convey to him or her. In other words, the focus is on the actual meaning to be ascribed to the words contained in their publication. Thus, in Mirror Newspapers Limited v Harrison[26] Mason J stated:

"A distinction needs to be drawn between the reader's understanding of what the newspaper is saying and judgments or conclusions which he may reach as a result of his own beliefs and prejudices. It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition. Its importance for present purposes is that it focuses attention on what is conveyed by the published material in the mind of the ordinary reasonable reader."

28 Thus, in determining whether a publication is defamatory, the court takes into account that the hypothetical recipient of it - the ordinary reasonable reader or listener - may undergo a process of implication or inference. That recipient of the publication is not confined to an understanding of the words conveyed in their literal sense; rather, as the authorities to which I have referred make plain, the law takes into account that the recipient of the material may indulge in deduction, inference or implication. However, to postulate that an imputation may derive from a publication by a process of implication or inference by the reader or listener of the publication, is not to say that the imputations, thus derived, were understood by the ordinary reasonable reader or listener as the comment or opinion of the publisher. That is, there is an important distinction between inferences or implications by the hypothetical ordinary reasonable reader of the publication complained of, on the one hand, and, on the other hand, an understanding by the ordinary reasonable reader of the publication that imputations, pleaded by a plaintiff, were conveyed to that reader as the opinion or comment of the writer of the articles. That distinction is particularly important, bearing in mind the principle, which I have earlier stated, that to qualify as comment, the publication must clearly identify the allegation, complained of by the plaintiff, as the deduction, opinion or conclusion of the writer. In my view, the submissions on behalf of the defendants largely ignore that distinction, and thus confuse and conflate the inferential processes undergone by the ordinary reasonable reader, with the proposition that the imputations, pleaded by the plaintiffs, constitute opinions or comments understood to be conveyed by the writer of the articles.

29 Bearing that proposition in mind, I turn, then, to the imputations pleaded by the plaintiff in respect of the first article, to which the defendants have directed a plea of fair comment. It is true, as submitted by Ms Schoff, that the article does not expressly assert any of the six innuendos, pleaded by the plaintiff in respect of the first article, to which the defendants have directed their fair comment defence. In a sense, the reader, to understand the first article in each of the senses pleaded by the plaintiff, must undergo a process of implication or inference. However, that is not the same as saying that the first article, in the meanings pleaded by the plaintiff, was understood by the ordinary reasonable reader to be thereby conveying the writer's opinion or comment on the facts contained in the article.

30 All of the factual allegations, on which the imputations pleaded by the plaintiffs are based, are clearly stated as facts in the first article. It was not submitted on behalf of the defendants that the first article contained any express opinion or comment. Further, on their face, each of the six imputations, pleaded in paragraph 6 of the statement of claim, to which the defendants' plea of fair comment is directed, is factual. The plaintiffs rely on the various facts, which were referred to by Mr Wilson in his submissions to me, to found the imputations pleaded in sub-paragraphs 1, 2, 4 and 5 of paragraph 6(a) of the statement of claim, namely, as to the alleged criminal involvement of the plaintiff in the activities of X (imputation number 1), the making of secret and illicit payments by the plaintiff to X (imputations 2 and 4), and the involvement of the plaintiff in illicit and improper dealings with X (imputation number 5). If those imputations derive from the article, they would be found to constitute the meaning of the article, ascribed by the ordinary reader, taking into account the facts referred to by Mr Wilson. In one sense, the jury will have understood the ordinary reader to have undergone a process of implication, inference or the like. However, that is not the same as finding that the imputations, relied on by the plaintiff, were inferences or deductions of the writer conveyed as such to the ordinary reasonable reader. It is one matter for a publisher of material to identify a number of specific facts, and to express an opinion, comment or deduction based on those facts. It is quite another matter for the publisher of material to identify particular facts, and then leave it for the reader, as a "matter of impression"[27] to derive the same meaning from those facts. In the first instance, the express deduction by the writer would be capable of constituting comment; in the latter instance, the impression formed by the ordinary reasonable reader would not be understood as the comment or opinion of the writer.

31 There is nothing in the first article which would identify the imputations, pleaded in paragraph 6(a)(1), (2), (4) and (5) of the statement of claim, to constitute the opinion or comment of the writer of the article. Rather, if those imputations are accepted by a jury, they will be held to constitute the "sting" or underlying meaning of the article as understood by the ordinary reasonable reader of it. The imputations themselves are essentially factual. Accordingly, in my view, there is nothing about the article, or the imputations, which would entitle a jury to reasonably conclude that those imputations were comments or opinion conveyed by the publishers of the first article. For those reasons, I do not consider that a jury could reasonably conclude that any of those imputations were capable of constituting comment by the writer.

32 For the same reason, in my view a jury could not reasonably conclude that the imputation pleaded in paragraph 6(a)(3) of the statement of claim - that the plaintiff is a close friend of drug baron X, and acted as a stooge for X's ownership of the racehorse Miss Andretti - constituted comment by the writer. The plaintiff relies on the allegations, in the article: that the plaintiff and X had a close financial and social association linked by the horse racing; that X, who is banned from race courses, and has been suspected of disguising his ownership of race horses by registering them in the names of friends and business associates; and that Miss Andretti is owned by the plaintiff. Again, it is true that the article does not, in express terms, allege that the plaintiff, as a close friend of X, acted as a stooge for his ownership of the race horse Miss Andretti. However, that imputation is alleged as the "sting" of the parts of the article to which I have just referred. While, again, that meaning may be the product of a process of implication or construction undertaken by the ordinary reasonable reader, that does not mean that the imputation pleaded and relied on by the plaintiff constitutes an expression of opinion by the writer of the article. The allegations contained in the article are entirely factual, and the defendants do not contend to the contrary. The imputation itself is couched as a factual allegation. It is not expressed as an opinion or deduction of the writer of the article. Rather, it is expressed as the sting or imputation conveyed to the ordinary reasonable reader by facts stated in the article. As the authorities, to which I have referred, make plain, the onus lies on the publisher to identify the comment or opinion which is sought to be defended as fair comment. None of the imputations pleaded by the plaintiff in respect of the first article - including the third imputation - are identified, at all, as the opinion or deduction of the publisher of the article.

33 The sixth imputation pleaded in respect of the first article, to which the defendant has pleaded fair comment, is contained in paragraph 6(a)(6) of the statement of claim, namely, that "the plaintiff is a businessman with a dangerous schizoid personality, who acts as a commercial thug". That imputation is pleaded as deriving from the section of the first article which states:

"The father of two is viewed by those who have had professional dealings with him as having a violent temper, acting like a commercial thug, and 'a man with eight different personalities'."

34 Ms Schoff submitted that the use of the verb "viewed" by the writer is capable of conveying, to the reader, that the description of the plaintiff in that passage constituted the opinion of the person quoted by the article. In my view, no reasonable jury could construe that passage as an expression of opinion, as distinct from an allegation of fact. The allegations contained in that passage are basically factual. The use of the phrase "is viewed" would not be reasonably capable of leaving open a finding by a jury that the imputation constituted an expression of opinion conveyed by the article. Further, and in any event, the article does not identify, or refer to, any facts on which the alleged "opinion" is based. For those reasons, I do not consider that the imputation pleaded in paragraph 6(a)(6) of the statement of claim is capable of being considered by the jury to constitute comment or opinion, which might be the subject of a fair comment defence.

35 Accordingly, I do not consider that a jury could reasonably conclude that the ordinary reasonable reader of the first article would understand that the imputations, alleged by the plaintiff to be derived from the first article, were comments by the writer of the article, for the purposes of a defence of fair comment as pleaded by the defendants in respect of those imputations.

36 As I have already stated, the plaintiff has pleaded two imputations deriving from the second article, entitled "Life in the fast lane". The defendant has directed its fair comment defence to the second imputation, namely that the second article meant that "the plaintiff is involved in illegal business activities".

37 The second article commences by stating that, in 1990, the plaintiff had been brought back to Australia from Hong Kong to face 29 charges of defrauding two stockbroking firms of more than $500,000. It related that the plaintiff, subsequently, pleaded guilty in the County Court to unlicensed securities dealing, for which he was released on a two year good behaviour bond. The article then proceeded to state that 15 years later the plaintiff was a prosecution witness in two murder trials in which the accused was one Bruce Burrell, who was described in the article as a "one time business associate" of the plaintiff. The article states that the plaintiff's association with Burrell came to light when New South Wales detectives found a copy of an affidavit Burrell had written, indicating that he had given evidence in an impeding dispute over the ownership of the plaintiff's UltraTune business. In evidence, the plaintiff stated that when he had asked Burrell for a statutory declaration to assist him in a Supreme Court proceeding relating to the ownership of UltraTune, Burrell had asked for $15,000, and had threatened the plaintiff when he refused to pay that sum to Burrell. The article also stated that the plaintiff had refused a request by Burrell to provide to him a letter stating that he had worked for UltraTune, to assist Burrell with an application to a bank for a loan.

38 As I have stated, the second imputation pleaded by the plaintiff, as deriving from the second article, is that the plaintiff is involved in illegal business activities. It is to that imputation that the defendants have directed their defence of fair comment. In my view, if the article conveyed the second imputation pleaded by the plaintiff, a jury could not reasonably conclude that that imputation constituted an expression of opinion or comment by the writer of the article. The second article, by its terms, is entirely factual. The imputation itself is factual. The article does not expressly allege that the plaintiff is involved in illegal business activities. If that imputation derives from the second article, it would constitute, again, an impression, implication or inference derived from the article by the ordinary reasonable reader. However, it would be by that process that the ordinary reasonable reader understood the article to be alleging that the plaintiff is involved in illegal business activities. That proposition is not stated, or identified, in the article as the opinion of the writer. Rather, if the imputation derives from the article, it constitutes the factual sting conveyed by the various facts, contained in the article, on which the plaintiff relies. For those reasons I do not consider that a jury could reasonably conclude that the imputation pleaded by the plaintiff (if it derives from the second article) constituted an expression of opinion or comment by the defendants, so as to provide the foundation to the defendants of a fair comment defence in respect of it.

39 As I have stated, the plaintiff pleads four imputations deriving from the fourth article, which was published on 6 December 2007. The defendant has directed its defence of fair comment to the third imputation. That imputation - "the plaintiff concealed illicit and illegal payments to X through false contracts" - is identical to the fourth imputation pleaded, in paragraph 6(a)(4) of the statement of claim, in respect of the first article. The fourth article commenced, effectively, by summarising the allegations contained in the first article. It then proceeded to allege that the "bogus" laser hair treatment contract assigned by X had been initiated by the plaintiff to conceal the real reason for the plaintiff's visits. The article alleged that the plaintiff never received laser treatment. It then proceeded to deal with the purchase by the plaintiff of X's Kilmore property.

40 In essence, the third imputation pleaded by the plaintiff derives, substantially, from the same facts in the fourth article, which were the basis of the same imputation alleged to have derived from the first article. There is nothing in the fourth article which identifies the imputation as an expression of the writer's opinion, or as the result of a process of deduction undertaken by the writer of the article. Rather, if the imputation derives from the fourth article, it would constitute the result of a process of construction, of the type of which I have already described, undertaken by the ordinary reasonable reader of it. For the same reason which I have stated for rejecting the defence of fair comment in respect of the imputation contained in paragraph 6(a)(4) of the statement of claim, in my view a jury could not reasonably conclude that the ordinary reasonable reader of the article would understand that the imputation, pleaded in paragraph 10(3) in respect of the fourth article, constituted a comment by the writer of the article.

41 For the reasons which I have set out above, I consider that a jury could not reasonably conclude that the ordinary reasonable reader of the first, second and fourth articles would understand that the parts of the articles, alleged by the plaintiff to give rise to the imputations pleaded in paragraphs 6(a)(1) to (6), 6(b)(2), and 10(3) of the statement of claim, were comments by the defendants, which could form the basis of a defence of fair comment in respect of them. For those reasons, the defence of fair comment pleaded in paragraph 16 of the defence should be struck out. Paragraph 17 of the defence pleads a similar defence under s 31 of the Defamation Act 2005. It was common ground that the same considerations apply to that defence as to the common law defence of fair comment[28]. Accordingly, the defence pleaded in paragraph 17 of the defence should also be struck out.

Plaintiff's application for further particulars

42 The second part of the plaintiff's application before me is for an order for further and better particulars of the defence, or alternatively orders striking out those parts of the defence to which, it is alleged, the defendants have failed to provide adequate particulars. The application is concerned with the adequacy of particulars provided by the defendants in respect of their plea of contextual truth pursuant to s 26 of the Defamation Act 2005 (defence paragraphs 6(a), 15) and the defendants' plea of truth pursuant to the common law and s 25 of the Defamation Act (in paragraph 14 of the defence).

43 In paragraph 6(a)(iii) of the defence, the defendants plead three contextual imputations in respect of the first article, namely that the first article in its ordinary and natural meaning meant and was understood to mean that:

(1) The plaintiff was illicitly involved in the activities of underworld drug baron X.

(2) The plaintiff concealed illicit payments to X through a false contract.

(3) The plaintiff is a person with a violent temper who acts like a commercial thug and a person with eight different personalities.

The defendants in paragraph 14 of the defence plead the truth of those contextual imputations.

44 The plaintiff's request for particulars sought particulars of the activities of X, in respect of which it was alleged (in the first contextual imputation) that the plaintiff was illicitly involved. In response, the defendants referred to sub-paragraph (iii) of the particulars subjoined to paragraph 14 of the defence. Those particulars allege that from in or about October 2003 to in or about July 2004, X, or someone on his behalf, attended at the plaintiff's premises on an almost weekly basis to collect cash payments of $25,000, and sometimes $50,000, totalling about $1,000,000, which included on one occasion a cheque made out to cash.

45 The plaintiff submitted that those particulars are inadequate, because they do not identify the activities of X, in which it is alleged the plaintiff was involved. In response, Ms Schoff submitted to me that the particulars are adequate, because the activity of X, in which it is alleged the plaintiff was involved, was the receipt by him of large cash payments from the plaintiff.

46 In my view, the particulars, as they presently stand, do not make it clear that the "activities" of X, to which the first contextual imputation refers, are those identified by Ms Schoff. On the contrary, it seems more likely that the particulars contained in sub-paragraph (iii) under paragraph 14 of the defence are directed to the allegation of illicit involvement by the plaintiff in X's drug trafficking activities. In order to make the defendants' position clear to the plaintiff, therefore, the defendants should deliver further particulars in the terms of what was put to me by Ms Schoff, namely, that the alleged activities of X in which, in the contextual imputation, it is alleged the plaintiff was involved, was the receipt by X of payments from the plaintiff.

47 The second contextual imputation contained in paragraph 6(a)(iii) of the defence is that the plaintiff concealed illicit payments to X through a false contract. In paragraph 14 of the defence, the defendants pleaded truth to that contextual imputation. In their further particulars, the defendants referred to sub-paragraph (vi) of the particulars under paragraph 14, as particulars of justification of that contextual imputation. Sub-paragraph (vi) of the particulars, in substance, stated that the plaintiff instructed one of his employees to draw up a contract between X and a company purportedly with respect to hair replacement treatment which X did not receive, and that he told the employee that the purpose of the contract was "just in case the Federal Police boys come around here". Mr Wilson submitted that the particular is not sufficient to justify the contextual imputation pleaded. For, he submitted, under the "false contract", X was to make payments to the plaintiff. Yet the contextual imputation pleaded is that the plaintiff concealed illicit payments made by him to X.

48 In response Ms Schoff submitted that the particulars are adequate. In essence, the bogus hair replacement contract provided a pretext for the attendance by X at the plaintiff's premises, thereby concealing the true purpose of his attendance there, namely, for the purposes of X receiving large payments in cash from the plaintiff. Thus explained, in my view the particulars would be adequate. However, for the purposes of clarity, and to avoid future dispute, the defendants should provide further particulars making explicit the explanation thus provided to me by Ms Schoff.

Particulars of justification pleaded to plaintiff's imputations

49 In paragraph 14 of the defence, the defendants plead, in addition to the truth of the contextual imputations, a defence of truth to the imputations pleaded by the plaintiff in paragraphs 6(a)(2), (5), (8) and (9), paragraph 6(c), and paragraph 10(2) of the statement of claim. The plaintiff seeks further particulars of that plea pertaining to some of those imputations.

Particulars of justification of imputation contained in paragraph 6(a)(2) of statement of claim

50 In paragraph 14 of the defence, the defendants plead truth insofar as the first and fourth articles conveyed the imputation set out in paragraph 6(a)(2) of the statement of claim, namely, that the plaintiff made secret and illicit payments totalling about $1,000,000 in cash to X. By further particulars the defendants, in respect of that plea, refer to sub-paragraphs (iii) to (vi) of the particulars provided under paragraph 14. In substance, those particulars allege that between October and July 2004, X collected cash payments totalling $1,000,000 at the plaintiff's hair salon; that the plaintiff claimed in a television interview that he made those payments pursuant to a lease agreement in relation to a horse property at Kilmore which he had agreed to purchase from X; that the payments were made to X at a time when X's assets were the subject of orders obtained by the Director of Public Prosecutions pursuant to the Confiscations Act 1997; and that the plaintiff had instructed one of his employees to draw up a bogus contract between X and the plaintiff's company relating to hair replacement treatment, in case the Federal Police investigated. Mr Wilson complained, with some force, that those particulars did not specify how the payments, made by the plaintiff to X, were said, by the defendants, to be illegal. Recognising the force in that submission, the defendants obtained leave from me to amend their particulars to include two further particulars, namely: that the payments were not made pursuant to the lease agreement as claimed (on television) by the plaintiff or for any other legitimate purpose; and that the payments were made in breach of the confiscation order. Thus, Ms Schoff submitted that the defendants pointed to large payments of cash by the plaintiff to X, for which no legitimate purpose could be identified. Further, the defendants would seek to prove that the payments were not made pursuant to the lease agreement as claimed by the plaintiff. In addition, the plaintiffs would seek to establish that the payments were made in breach of the confiscation order obtained by the Director of Public Prosecutions in respect of X's assets.

51 Mr Wilson submitted that the further particulars still did not solve the deficiency which existed in respect of the original particulars, namely, the precise identification of the nature of the illegality of the payments alleged to be made by the plaintiff to X. However, in my view, the particulars provided are sufficient to put the plaintiff on notice as to how the defendants seek to contend to the jury that the payments, which the defendants allege the plaintiff made to X, were illegal. In essence, the plaintiff will face a case that, contrary to his assertion on television, the payments were not made pursuant to the lease agreement, nor for any other legitimate purpose, and further or alternatively they were made in breach of the confiscation order made in respect of X's assets. While the defendants do not, by their particulars, seek to assert any specific illegality in respect of the payments, their defence, as elaborated by the further particulars (as amended) is that the payments were made for an unspecified, but nonetheless unlawful purpose. In my view, that is sufficient to put the plaintiff on notice as to the case he will meet. It will be a matter for the jury whether the defendants thereby establish, pursuant to the onus on them, that the payments made were illicit. For those reasons, I consider that the particulars provided by the defendants in respect of the imputation pleaded in paragraph 6(a)(2) of the plaintiff's statement of claim are now sufficient.

Particulars of justification to imputation in paragraph 6(a)(5) of statement of claim

52 The plaintiff complains that the defendants have failed to provide sufficient particulars of the defence (pleaded in paragraph 14 of the defence) of justification to the imputation in paragraph 6(a)(5) of the statement of claim, namely, that as part of the illicit and improper dealings with X, the plaintiff acquired X's Kilmore property at a gross under value. In their further particulars, the defendants refer to sub-paragraphs (iii), (iv) and (v) of the particulars provided under paragraph 14 of the defence, and provided as further particulars: that the plaintiff was a sole director of Horse Farm Pty Ltd; that on 16 February 2005, pursuant to a transfer of land signed by the plaintiff, that company became the sole proprietor of the Kilmore farm; and that the consideration paid for the property was $1,000,000 which was grossly under its true value.

53 In my view, the particulars are insufficient, because they do not provide proper particularisation of the allegation that the Kilmore property was purchased at "gross under value". The defendants should provide proper particulars of how it is alleged that the consideration paid by the plaintiff's company for the Kilmore property constituted a "gross under value". I do not consider that such particulars would involve matters of evidence. Rather, the plaintiff is entitled, by particulars, to proper notice of the case which he will meet at trial, which, presumably, will be that the property was acquired by his company at a sum significantly less than the proper market price. In my view, the particulars provided by the defendants would be inadequate unless they identified what the defendants will say, in broad terms, constituted the proper market value of the property at the time of the transfer.

Particulars of imputation in paragraph 6(a)(9) of the statement of claim

54 In paragraph 14 of the defence, the defendants plead justification of the imputation, contained in paragraph 6(a)(9) of the statement of claim, namely, that the plaintiff had such a close association with drug baron X that he permitted X to use his Melbourne and his Surfers Paradise apartments.

55 In response to the plaintiff's request for further particulars, the defendants referred to sub-paragraph (vii) of the particulars under paragraph 14 of the defence, which stated:

"(vii) The plaintiff provided X with a key to his apartment at Southbank and on two occasions permitted X to use his apartment on the Gold Coast free of charge. The plaintiff told an employee that X needed access to the telephone in the plaintiff's Southbank apartment as he believed his own apartment was bugged and at one time because his own apartment was being renovated."

56 Mr Wilson submitted that the particulars provided in respect of the imputation pleaded in paragraph 6(a)(9) of the statement of claim are inadequate for two main reasons. First, the defendants have failed to provide sufficient particularity relating to the circumstances in which, and times at which, the plaintiff provided X with access to his apartments at Southbank and on the Gold Coast. Further, it be submitted that the defendants are obliged to identify the employee referred to in the particulars.

57 In my view, the particulars are insufficient for the first, but not the second, reason identified by Mr Wilson. The allegation that the plaintiff provided X with a key to his own apartment at Southbank, and on two occasions permitted X to use his apartment on the Gold Coast free of charge is, in my view, too wide. The defendants should provide further particulars of that allegation. The particulars should identify the approximate number of occasions upon which the plaintiff provided X with the key to the apartment at Southbank, and, at least in general terms, the dates on which, or period in which, the plaintiff provided X with a key to his apartment. Similarly the defendants should provide particulars as to the approximate dates on which - or period of time in which - the plaintiff twice permitted X to use his apartment on the Gold Coast.

58 On the other hand, I do not consider that the defendants are required to identify the employee referred to in the second sentence of the particulars. Strictly speaking, the second sentence contains matters of evidence. The defendants will only be able to make good the second sentence by calling the employee as a witness. The gist of the second sentence is that the reason that X needed access to the telephone and the plaintiff's apartment was because he believed his apartment was bugged, and at one time because his own apartment was being renovated. The defendants have - unnecessarily - foreshadowed that they will seek to prove that fact by an admission, to that effect, alleged to have been made by the plaintiff to an employee. Provided that sufficient particulars are given in relation to the first sentence in the particulars, in my view the defendants are not required to identify the employee referred to in the second sentence.

59 The plaintiff also seeks further particulars of paragraph 14 of the defence, insofar as it pleads justification to the imputation in paragraph 10(2) of the statement of claim. That imputation is identical to the imputation pleaded in paragraph 6(a)(2) of the statement of claim. For the same reasons which I have expressed in relation to the particulars as to the plea of justification in respect of that imputation, I do not consider that the defendants should be required to give further particulars in relation to the plea of justification in respect of the imputation in paragraph 10(2) of the statement of claim.

60 Finally, the plaintiff complains of the failure of the defendants to give particulars of the plea of justification to the imputation pleaded in paragraph 6(c) of the statement of claim in respect of the third article. That imputation is identical to the imputation contained in paragraph 6(a)(9) of the statement of claim in respect of the first article. For the reasons which I have given above in respect of the particulars relating to that imputation, the defendants should provide further particulars of the plea of justification in respect of that imputation.

61 The defendants by summons seek further discovery from the plaintiff pursuant to rule 29.08 of the Rules of the Supreme Court. Initially, the application related to 14 categories of documents in respect of which the defendants claimed further discovery. However, in the course of the application some, but not all, of those matters have been resolved.

62 Before considering the different categories of documents of which the defendants seek further discovery, it is necessary, first, to outline some facts by way of background. The plaintiff controls a company called Horse Farm Victoria Pty Ltd. By a contract of sale dated 30 October 2003, that company purchased a property at Kilmore from Finchfield Holdings Pty Ltd, a company controlled by the wife of X. The contract was expressed to be subject to a lease between Finchfield and Ultra Thoroughbred Racing Pty Ltd, a company also controlled by the plaintiff. The lease provided for payments of rent of $49,999 per annum, increasing to $52,000 per annum, for a three year period. That rent was to be payable monthly in advance. However, the lease also provided for a three year rent free period, provided that the tenant met obligations, prescribed by the lease, to improve the property. In particular, the lease provided that the tenant must spend a minimum of $150,000 on various items specified in the lease by way of improvement to the property.

63 The contract of sale and the lease are relevant in relation to at least two issues raised by the four articles of which the plaintiff makes complaint in these proceedings. First, they are relevant to the allegation that the plaintiff's company purchased the Kilmore property at a gross under value. Secondly, they are relevant to the question whether cash payments, admitted to be made by the plaintiff to or on behalf of X, were made pursuant to the obligations of the tenant under the lease. With that background in mind, I turn to the categories of documents in respect of which the defendants seek further discovery.

Category 1 - the conveyancing file of Fetter Gdanski Lawyers in relation to the purchase of the Horse Farm

64 The defendants seek discovery of the file of Fetter Gdanski, who acted as solicitors on behalf of Horse Farm Victoria Pty Ltd in the purchase of the Kilmore property. The defendants submit that the file is relevant to the question whether the transaction was at arm's length, the question whether the sale price was at a gross under value, and the question as to whether the transaction occurred in contravention of a restraining order made under the Confiscation Act in respect of the property.

65 In my view, the defendants have failed to establish that the file of Fetter Gdanski would be relevant to any of the first two purposes which I have thus summarised. Nothing has been put before me which would suggest that the file is relevant to the question whether the property was purchased at an under value, and whether the purchase proceeded on an arm's length basis. Further, the question whether the sale occurred in contravention of a restraining order is a matter of law. For those reasons the plaintiff is not required to make discovery of the Fetter Gdanski file.

Category 2 - all documents evidencing financial expenditure on the Horse Farm pursuant to the lease from 3 September 2003 top 31 August 2006

66 The defendants have sought discovery of documents relating to financial expenditure on the Horse Farm, because they are relevant to the issue whether the tenant, Ultra Thoroughbred Racing Pty Ltd, had an obligation to pay rent to Finchfield during the relevant period. In argument, Mr Wilson accepted that the documents were relevant for that purpose, and also as being relevant to the question of the value of the property. An issue arose as to the type of documents which ought to be discovered by the plaintiff. That issue was resolved on the basis of the acceptance of the principle that the plaintiff be required to make discovery of the relevant documents relating to financial expenditure by the plaintiff or companies controlled by him on the farm in the period 3 September 2003 to 31 August 2006. However, for practical purposes, the plaintiff will initially only be required to make discovery of relevant ledger records of the companies responsible for making payments in respect of expenditure on the Horse Farm during the period nominated. The question whether any underlying documents should be discovered may need to be subsequently considered, once the defendants have had the opportunity to examine the relevant ledger documents, which are to be discovered to them by the plaintiff.

Category 3 - bank statements and original cheque stubs from 3 September 2003 to 31 August 2003 for each of the bank accounts for each of the following persons or entities: the plaintiff; Clarson Holdings Pty Ltd; Ultra Hair Studio Pty Ltd; Ultra Thoroughbred Racing Pty Ltd; Horse Farm Victoria Pty Ltd; UltraTune Australia Pty Ltd

67 Documents discovered by the plaintiff demonstrate that each of the five companies, referred to above (with the exception of Horse Farm Victoria Pty Ltd) made payments to or on behalf of X. The defendants submit that the plaintiff must have in his possession, power or control cheque butts and bank statements relevant to those payments. Further, it is submitted that the plaintiff should be required to discover all the bank statements and cheque butts of both himself and the five companies, referred to, in order to test the plaintiff's claim that the only payments made to or on behalf of X were those recorded in the documents so far discovered.

68 In response, Mr Wilson accepted that the plaintiff was required to discover bank statements and cheque butts relating to the payments, made to or on behalf of X, which are identified in the documents so far discovered. However, he submitted that the plaintiff should not be required to discover the broader category of documents claimed by the defendants. He described the defendants' application for that broader category as a fishing expedition. He submitted that cheque butts and bank statements were not relevant to the issue raised in the pleadings, namely, whether the plaintiff made large cash payments to X.

69 In my view, the submissions made by Mr Wilson are correct. The defendants seek to justify imputations, inter alia, that the plaintiff made large and illegal cash payments to or on behalf of X at his hair salon. In response, the plaintiff has stated that the only payments he made to or on behalf of X were those contained in documents discovered by him. Those documents disclose that two payments were made to or on behalf of X by cash, and the rest were made to bookmakers and other persons for and on behalf of X by cheque. In my view, the broader discovery sought by the defendants would not be relevant to the issue whether the plaintiff made cash payments to or on behalf of X in the period referred to in the article. Accordingly, in respect of the third category, the plaintiff is not required to discover all the cheque butts and bank statements of himself and the five companies, referred to by the defendants, save and insofar as those documents evidence the payments, referred to the plaintiff's discovered documents number 4 and 76, made by the plaintiff (or his companies) to or on behalf of X.

Category 4 - financial statements and full accounting records from 3 September 2003 to 31 August 2006 for Ultra Thoroughbred Racing Pty Ltd and Horse Farm Victoria Pty Ltd

70 The defendants seek discovery of the books of account of the purchaser and the tenant in order to ascertain what payments were made pursuant to the contract of sale and the lease, and also as relating to the value of the Horse Farm. As I understood him, Mr Wilson did not argue that the defendants are not entitled to those documents. In my view, that concession is correct, and the defendants should have discovery from the plaintiff of the accounting documents of the two companies which record or evidence any payments made pursuant to or in respect of the contract of sale or the lease.

Category 5 - financial statements and all ledger entries pertaining to payments made to or on behalf of X, Finchfield Holdings Pty Ltd and or any other person or entity associated with X from 3 September 2003 to 31 August 2006 for Clarson Holdings Pty Ltd; Ultra Hair Studio Pty Ltd; UltraTune Australia Pty Ltd

71 The defendants seek the financial statements and ledger entries, referred to in this category, in order to ascertain how payments made to or on behalf of X by the plaintiff and his companies have been treated in the books of account of the relevant companies. Mr Wilson, in submission, did not seek to argue against the proposition that those documents are discoverable, provided that the obligation to make discovery only related to documents "pertaining to payments" made to or on behalf of X, Finchfield or entities associated with X. In my view that concession is correct and those documents are discoverable by the plaintiff to the defendants.

Category 6 - copies of the plaintiff's tax returns for the financial years ended 30 June 2003 to 2008

72 The defendants do not pursue further discovery of this category, because the plaintiff has now indicated that he will not be pursuing a claim for special damage.

Category 7 - complete and unretracted minutes of all the meetings of the directors of Ultra Thoroughbred Racing Pty Ltd and Horse Farm Victoria Pty Ltd for the period 3 September 2003 to 31 August 2006

73 The plaintiff has discovered some, but not all, of the minutes of meetings of the directors of the purchaser and tenant of the farm property. The defendants submit that, as the circumstances of the purchase and running of the horse farm are an issue in the proceeding, any meetings of the directors of those two companies are also relevant. Mr Houghton submitted that the defendants are entitled to complete minutes of the lessee company and the purchaser company, in order to test the circumstances of the purchase of the property, the circumstances of the lease payments, the circumstances of the variation of the lease payment, the improvements to the property, and the ultimate settlement of the purchase of the property in February 2005.

74 In response Mr Wilson submitted that the plaintiff had made discovery of all minutes which are relevant to those topics.

75 The defendants have not been able to point to any document or evidence indicating their grounds for a belief that the plaintiff may have in his possession or power minutes of the two companies which should have been discovered relevant to the topics identified by Mr Houghton. Nor is there anything about the nature or circumstances of the case, which would indicate that the plaintiff has failed to make discovery in that respect. Accordingly, there is no basis under r 29.08(2) whereby I should make an order in the broader terms sought by the defendants.

Category 8 - documents evidencing any lease payment or other notices received by or from Finchfield Holdings Pty Ltd and Horse Farm Victoria Pty Ltd in respect of the lease of the horse farm during the period 3 September 2003 to 31 August 2006

76 The defendants submit that the documents in this category are relevant to the plaintiff's assertion that the payments made to X, identified in the discovered documents, were made pursuant to the obligations of the tenant under the lease. The defendants submit that, that being so, the plaintiff should discover any further documentation evidencing those payments, and in particular any relevant tax invoices rendered to the lessee company.

77 In the submissions on behalf of the plaintiff in response to the application for discovery, it is made clear on behalf of the plaintiff that the payments, identified in the discovered documents, made to or on behalf of X were made pursuant to the obligations under the lease. Thus, in this case, the defendants will seek to establish that the plaintiff made cash payments, totalling $1 million, to X, at his hair studio, for illicit purposes. In response the plaintiff will say that he did make payments, totalling $450,000, and predominantly by cheque, to and on behalf of X. The plaintiff has not conceded that those payments were made directly to X, at his hair studio. Further the plaintiff will say that any payments, which were made for, to or on behalf of X, were made in respect of the lease obligations of Ultra Thoroughbred Racing Pty Ltd to Finchfield. In my view, the issues thus identified do enliven the question as to whether the payments, admittedly made by the plaintiff and his companies to or on behalf of X and his entities, were made in respect of the lease obligations of Ultra Thoroughbred Racing Pty Ltd. Thus, any documents reflecting on the character of those payments are discoverable by the plaintiff. In light of the amount of payments made, particularly in comparison to the apparent obligations of the lessee under the lease, I consider that there is force in the submission by Mr Houghton that the plaintiff should be required to swear a further affidavit as to whether there are any relevant documents to be discovered by him relating to this topic. I shall therefore order that the plaintiff make, file and serve such an affidavit.

Category 9 - records of payments made to any bookmaker between 3 September 2003 and 31 August 2006 by: the plaintiff; Clarson Holdings Pty Ltd; Ultra Hair Studio Pty Ltd; Ultra Thoroughbred Racing Pty Ltd; Horse Farm Victoria Pty Ltd; UltraTune Australia Pty Ltd

78 The defendants seek discovery of this category of documents, because documents discovered by the plaintiff reveal that he, or companies associated with him, made payments to various bookmakers for and on behalf of X. In correspondence between the parties' solicitors, the plaintiff's solicitors have asserted that those payments were made by the plaintiff to satisfy the obligation of his company to make lease payments to Finchfield.

79 As I understand it, the defendants seek discovery both of the source documents relating to the payments made to bookmakers on behalf of X, and also to the broader category of documents, encompassing any payments made by the plaintiff, or his five entities, to bookmakers in the three year period nominated. In my view, the defendants are entitled to discovery of any primary documents evidencing the payments by the plaintiff to bookmakers on behalf of X, as revealed in the documents already discovered by the plaintiff. However, the defendants are not entitled to discovery of the broader category of documents sought by them, namely, records of payments made by or on behalf of the plaintiff and his five companies to any bookmaker during the three year period. That class of documents is too wide, and the application for discovery of them is, in my view, fishing. Accordingly, I shall direct that the plaintiff make discovery to the defendants of any documents relating to, or evidencing, payments made by the plaintiff or his companies to bookmakers for or on behalf of X or any of his companies during the period 3 September 2003 and 31 August 2006.

Category 10 - any receipts or correspondence regarding payments or bets or other arrangements passing between the plaintiff and/or any person on his behalf and any bookmaker between 3 September 2003 and 31 August 2006

80 For the reasons which I have given in relation to category 9, I do not consider that the defendants are entitled to any further discovery in respect of category 10, other than the primary documents evidencing the payments made by the plaintiff or his companies on behalf of X or his companies to bookmakers.

Category 11 - all documents evidencing the plaintiff's "loan account" referred to in discovered document 24

81 The plaintiff has conceded that this category of documents is discoverable and an order shall be made for its discovery accordingly.

Category 12 - all documents evidencing the cash payments made to X and referred to in discovered document 24

82 The plaintiff discovered document 24, which comprised a memorandum from himself to one Albert Chong (the in house counsel for the plaintiff's group of companies) dated 4 December 2003 entitled "Lease of farm from X". In that document the plaintiff stated that he, under some pressure from X, had agreed to increase the lease payments to $150,000 per annum, and that X had asked for cash payments to be made to him so that he could punt on horses on behalf of himself and his wife. The plaintiff further stated in the memorandum that all monies would be debited to his loan account and that he would keep a running balance of any outstanding funds which would be later adjusted.

83 The defendants submit that the plaintiff should provide discovery of any documents relating to any cash payments made to X pursuant to that memorandum. In response, Mr Wilson has submitted that all documents relating to cash payments have been discovered by his client. In my view, the memorandum which has been discovered by the plaintiff, document 24, does raise an issue as to whether any further cash payments were made in accordance with that memorandum. Accordingly, the plaintiff should discover any documents relevant to any such payments, and, if there be no such payments, should swear an affidavit to that effect.

Category 13 - all correspondence to and from the plaintiff regarding X and the newspaper and internet articles referred to in the statement of claim

84 The plaintiff's solicitors have conceded that the documents in category 13 are relevant, and discovery will be made of them.

Category 14 - emails from Fetter Gdanski to Robert James Lawyers (X's solicitors) prior to September 2004

85 For the reasons which I have stated in respect of the documents in category 1, I do not consider that the documents in category 14 are discoverable. No order shall be made for their discovery.

86 For the reasons which I have expressed in this judgment, and subject to hearing from counsel, the following orders should be made on the plaintiff's summons dated 27 June 2008:

(1) Paragraphs 16 and 17 of the defence be struck out.

(2) The defendants deliver further and better particulars of the defence as follows:

(a) Further particulars of the defence, in paragraphs 14 and 15, of truth of the contextual imputations pleaded in paragraph 6(a)(iii)(1) and (2) in accordance with paragraph [46] and [48] of these reasons.

(b) Particulars of the defence of justification, in paragraphs 14 and 15, of the imputation pleaded by the plaintiff in paragraph 6(a)(5) of the statement of claim, stating and specifying how and in what manner and in what respect it is alleged that the purchase by the plaintiff of X's Kilmore property was at "gross under value".

(c) Particulars of the defence of justification, in paragraphs 14 and 15 of the defence, to the imputation pleaded by the plaintiff in paragraph 6(a)(9) and paragraph 6(c) of the statement of claim, specifying in respect of the particulars contained in sub-paragraph (vii) under paragraph 14 of the defence -

(i) the approximate number of occasions upon which the plaintiff is alleged to have provided X with the key to his apartment at Southbank and the approximate dates on which, or period in which, the plaintiff provided X with that key to his apartment.

(ii) particulars as to the approximate dates on which, or period of time in which, the plaintiff allegedly twice permitted X to use his Gold Coast apartment.

87 In respect of the application by the defendants for further discovery by summons dated 21 October 2008, the following orders should be made:

(1) The plaintiff make discovery of all relevant ledger records evidencing financial expenditure on the horse farm pursuant to the lease between Finchfield Holdings Pty Ltd and Ultra Thoroughbred Racing Pty Ltd from 3 September 2003 to 31 August 2006.

(2) The plaintiff make discovery of bank statements and cheque butts for the bank accounts of each of the following persons or entities:

relating to, or evidencing, the payments noted on plaintiff's discovered documents number 4 and 76.

(3) The plaintiff make discovery of all financial statements and accounting records from 3 September 2003 to 31 August 2006 for Ultra Thoroughbred Pty Ltd and Horse Farm Victoria Pty Ltd recording or evidencing any payments made by those companies in respect of the purchase and/or lease of the property described as 445 and 465 Forbes Moranding Road, Kilmore from Finchfield Holdings Pty Ltd.

(4) The plaintiff make discovery of all financial statements (including balance sheets, cheque requisition statements, profit and loss statements and tax returns) and all ledger entries pertaining to payments made to or on behalf of:

from 3 September 2003 to 31 August 2006 for or on behalf of each of the following entities:

(5) The plaintiff make, file and serve an affidavit deposing whether there are any documents in his possession, power or control evidencing any lease payment or other notices received by or from Finchfield Holdings Pty Ltd and Horse Farm Pty Ltd in respect of the lease of the horse farm during the period 3 September 2003 to 31 August 2006, and make discovery of any such documents.

(6) The plaintiff make discovery of records of payments between 3 September 2003 and 31 August 2006 by:

to any bookmaker for or on behalf of Mr X and/or any entities or companies associated with X.

(7) The plaintiff make discovery of all documents evidencing the plaintiff's "loan account" referred to in discovered document number 24.

(8) The plaintiff make, file and serve an affidavit as to whether there are in his possession, power or control, any documents as to any cash payments made to X or to any person on behalf of X in accordance with discovered document 24, and the plaintiff make discovery of any such documents.

(9) The plaintiff make discovery of all correspondence to and from the plaintiff regarding X and the newspaper and internet articles referred to in the statement of claim.

[1] [2007] VSCA 314, [81] and following.

[2] (2007) 17 VR 80; [2007] VSCA 212, [47] and following.

[3] O'Shaughnessy v Mirror Newspapers Limited [1970] HCA 52; (1970) 125 CLR 166, 173 to 174 (Barwick CJ, McTiernan, Menzies and Owen JJ), 177 (Windeyer J).

[4] Pervan v North Queensland Newspaper Co Limited [1993] HCA 64; (1993) 178 CLR 309, 317.

[5] State of New South Wales v IJ Index PLC & Anor (above), [48] (Nettle JA).

[6] Channel 7 Adelaide Pty Ltd v Manock (2007) 241 ALR 468; [2007] 8 HCA 60.

[9] (1934) 34 SR (NSW) 525, 531.

[10] See also Clarke v Norton [1910] VicLawRp 83; [1910] VLR 494, 506 (Cussen J).

[11] [2008] VSC 215, [31].

[12] [1908] 2 KB 308, 319.

[14] Oakley v 3AW Southern Cross Radio Pty Ltd [1999] VSCA 96, [15]; Channel 7 Adelaide Pty Ltd v Manock [2007] HCA 60; (2007) 241 ALR 468, [33] (Gleeson CJ).

[15] Channel 7 Adelaide Pty Ltd Manock, Ibid, [35] (Gummow, Hayne and Heydon JJ).

[16] [1964] AC 234.

[18] [1968] VicRp 87; [1968] VR 664.

[19] See for example Polly Peck (Holdings) Plc v Trelford [1986] QB 1000; Chakravarti Advertiser Newspapers Limited (1998) 193 CLR 519; National Mutual Life Association of Australasia Limited v GTV Corporation Pty Ltd [1989] VicRp 66; [1989] VR 747; David Syme & Co Limited & Anor v Hore-Lacy [2000] VSCA 24; (2000) 1 VR 667.

[20] Lewis v Daily Telegraph Limited [1964] AC 234, 259 to 60 (Lord Reid); 277 (Lord Devlin).

[21] Morgan v Odhams Press Limited [1971] 1 WLR 1239, 1245 (Lord Reid); Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158, 165 (Hunt CJ); Steele v Mirror Newspapers Limited [1974] 2 NSWLR 348, 372-3 (Samuels JA); John Fairfax Publications Pty Ltd v O'Shane [2005] NSWCA 164, [29] (Giles JA).

[22] [1964] AC 234, 258.

[23] See also at page 260; 277 (Lord Devlin).

[24] [1963] I WLR 1362, 1370 to 1371.

[25] See also Grubb v Bristol United Press Limited [1963] 1 QB 309, 327 (Holroyd Pearce LJ); Capital and Counties Bank v Henty & Sons (1880) 5 CPD 514, 536 (Cotton LJ).

[26] [1982] HCA 50; (1982) 149 CLR 293, 301.

[27] Lewis v Daily Telegraph Limited (above), 260 (Lord Reid).

[28] Compare Holmes v Fraser [2008] NSWSC 570, [51]-[54] (Simpson J).