SAINT v JOHN FAIRFAX PUBLICATIONS PTY LTD

JOHN FAIRFAX PUBLICATIONS PTY LTD (Defendant) FILE NUMBER(S) : SC 21010 OF 2001 P Gray (Plaintiff) COUNSEL : T Blackburn (Defendant) Daniel Hrobat & Associates (Plaintiff) SOLICITORS : Freehills (Defendant)

[2003] NSWSC 580 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

John Fairfax Publications Pty Ltd (Defendant)

JUDGMENT (Contextual imputations - difference in substance - arising "at the same time and in addition to" ) 1 The jury at the s7A trial found that the matter complained of, the text of which is appended hereto, carried the following imputations defamatory of the plaintiff: 5(b) The Plaintiff so incompetently carried out her management role in running the International Division of the Australian Taxation Office as to cause almost the entire staff of that Division to quit or go on stress leave in the previous two years. (c) The Plaintiff so insensitively carried out her management role in running the International Division of the Australian Taxation Office as to reduce senior Australian Taxation Office staff to tears by publicly humiliating them. (d) The Plaintiff so incompetently carried out her management role in running the International Division of the Australian Taxation Office as to reduce senior Australian Taxation Office staff to tears at their desks. (f) The Plaintiff so incompetently carried out her management role in running the International Division of the Australian Taxation Office as to cause productivity in that Division to fall drastically in the previous two years. 2 The defendant has filed no defence pursuant to s15 of the Defamation Act 1974; that is, it has chosen not to justify the found defamatory imputations. 3 The defendant, however, has pleaded a defence under s16. The contextual imputations pleaded by the defendant are: 6(A) The Plaintiff, in the management of the International Division of the Australian Taxation Office, caused distress to a significant number of members of her staff. (B) The Plaintiff, in the management of the International Division of the Australian Taxation Office, caused dissatisfaction and unhappiness amongst a significant number of members of her staff. 4 By notice of motion the plaintiff seeks an order striking out paragraph 5 of the defence which pleads contextual truth. The bases are that the contextual imputations are first, defective in form in that they do not differ in substance from each other. Secondly, they are defective in form as they do not differ in substance from the plaintiff's imputations. Thirdly, the contextual imputations, it is said, are incapable of being carried by the matter complained of "at the same time and in addition to" the plaintiff's imputations. Fourthly, the contextual imputations are not capable of having the effect that the plaintiff's pleaded imputations are not capable of further injuring the reputation of the plaintiff (Defamation Act 1974 s16(2)(c)). 5 There are subsidiary matters relating to the particulars of truth appended to the defence and the pleading of interstate defences. 6 The plaintiff argues that the article, as the jury found, plainly conveys not merely that the plaintiff managed her Division so as to cause "distress" or "disappointment and dissatisfaction" to "significant numbers" of staff but that she: so incompetently managed the Division as to cause almost its entire staff to quit or go on stress leave (imputation 4(b)); so insensitively, and so incompetently managed the Division as to reduce senior ATO staff to tears (imputations 4(c) and (d)); and so incompetently managed the Division as to cause productivity in the Division to fall drastically (imputation 4(f)). Rather than seeking to justify the plaintiff's imputations, the plaintiff says that the defendant now by its contextual imputations seeks to back-track from the actual meanings as found by attributing to the matter complained of meanings more "abstract and more vague" and seeking to justify those pursuant to s16. 7 In that context it is argued that the defendant's contextual imputations, do not, as they must, differ in substance from the plaintiff's imputations and from each other: Jackson v Mirror Newspapers Limited [1981] 1 NSWLR 36 at 39G-40C; Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386 at 396E-F, 397C, 397G-398A, 399D-G; Waterhouse v Hickie (1995) Aust Torts Rep 81-347 at 62,488 per Priestly JA; McBride v Australian Broadcasting Corporation [2000] NSWSC 747 at paras [12]-[56] per Levine J; Purcell & Anor v Cruising Yacht Club of Australia & Ors [2002] NSWSC 557 at paras [8] and [11] per Levine J. 8 The defendant's contextual imputations, it is submitted, do not differ in substance from each other. Other than being "watered down", they "differ barely, if at all" in substance form the plaintiff's four imputations. They are thus bad in form and should be struck out. 9 As to the first question of whether the defendant's contextual imputations differ in substance one from the other: I am frankly unable to see any difference, in a real commonsense way, between the two imputations. It cannot be argued that they are different in gradation; it is mere playing with words to say that there is a difference between "distress" as referred to in 6(a) and "dissatisfaction and unhappiness" referred to in 6(b). The use of those words constitutes the only difference in terminology in the imputations. This is reinforced when one places each of the imputations in the context of the contents of the matter complained of. No sensible view can be reached that that matter warrants, by its terms, an express differentiation between "distress", "dissatisfaction" and "unhappiness". 10 For that reason the contextual imputations are defective in form and will be struck out. 11 If one contextual imputation was pleaded to the effect: "The plaintiff in the management of the International Division of the Australian Taxation Office caused distress, dissatisfaction and unhappiness to and amongst a significant number of members of her staff", would any such imputation differ in substance from the four found by the jury? The answer would have to be that there is certainly a difference in substance between plaintiff's imputation (f) and any such imputation along the lines referred to above. There would, however, be a serious question as to whether there would be any difference in substance between that kind of imputation and the first three of the plaintiff's imputations. My present view is that there would. 12 I am of the view, as I have indicated, that the imputations do not differ in substance one from the other and therefore should be struck out with leave to the defendant to replead. 13 The plaintiff also argued that the contextual imputations do not and cannot meet what is said to be a requirement that they be carried by the matter complained of "at the same time as and in addition to" the plaintiff's imputations. 14 The source for the phrase "at the same time as and in addition to" is in the judgment of Hunt J in Jackson v John Fairfax & Sons Ltd [1981] 1 NSWLR 36 at 39G-40B. It is desirable to set out what his Honour there said: "It is, in my view, basic to the scheme of s 16 that both of the imputations in question (that is, the imputation pleaded by the plaintiff and the contextual imputation pleaded by the defendant) must be conveyed by the matter complained of at the same time and that each must differ in substance from the other. This is fundamental to the whole operation of the 1974 Act. If the plaintiff's imputation to which the defence of contextual truth is pleaded is rejected by the jury as not being the sense in which the matter complained of was understood by the ordinary reasonable reader, there must be judgment for the defendant (assuming that that is the only imputation relied upon by the plaintiff), and the defence of contextual truth never arises for consideration. It follows, therefore, that both imputations must be conveyed by the matter complained of before any question of contextual truth can arise. Unless both imputations are conveyed at the same time to the same ordinary reasonable reader, the jury will be unable to weigh or to measure the relative worth or value of the several imputations contended for by both parties. Moreover, as the imputation pleaded by the plaintiff must be taken to include all other imputations which do not differ from it in substance (Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749, at p 771), it follows that each party's imputation must differ in substance from that relied upon by the other.

From this discussion, it is apparent that the following issues of law will arise in relation to a defence of contextual truth (it having already been found that the matter complained of is capable of conveying the imputation pleaded by the plaintiff to which the defence of contextual truth is pleaded by the defendant): (1) Does the contextual imputation relied upon by the defendant differ in substance from that pleaded by the plaintiff? (2) Is the contextual imputation capable of being conveyed by the matter complained of at the same time as and in addition to the imputation pleaded by the plaintiff? (3) Is the nature of the contextual imputation such that its substantial truth is capable of being rationally considered by the jury as so affecting the plaintiff's reputation that the imputation of which the plaintiff complains did not further injure that reputation? (4) Is there evidence upon which the jury could find that the contextual imputation is substantially true? (5) Does the contextual imputation relate to a matter of public interest or was it published under qualified privilege?" (emphasis added)

15 The above passage is, of course, well known. The issue set out in paragraph (2) above is a curious one. It does no more than merely state the obvious in my respectful view, and if it is to be an issue in the scheme of things one might come to the view that it should be issue (1). The issue is concerned only with the question of capacity. Another way of framing it would be to state that s16 has work to do if the matter complained of carries the imputations pleaded by the plaintiff and "as well" carries the imputation(s) pleaded by the defendant. If the answer to a question so framed is in the affirmative them considerations as to difference in substance (Hunt J's issue (1)) can be considered, and ultimately the s16(2)(c) question. 16 I would have to come to the conclusion that an imputation of the form referred to above arguably could arise from the matter complained of. That is an antecedent step as I have said to the question of difference in substance. 17 If that position were reached, that is, capacity and difference in substance, then the real issue, in the end, would be that under s16(2)(c). In that regard, in the light of the decision of the Court of Appeal in John Fairfax Publications Pty Ltd v Blake [2001] 53 NSWLR 541, the resolution of it will have to be left to the trial. I must say conformably with the observations I made in Purcell & Anor v Cruising Yacht Club of Australia Pty Ltd & Ors [2002] NSWSC 557 at paragraph [14], with which I note Kirby J was in agreement in his judgment in the same matter ([2003] NSWSC 245 at paragraph [76]), that any such contextual imputation, if "weighed" against the four plaintiff's imputations, must clearly fail the s16(2)(c) test. 18 Additionally I would say this, however: in relation to the particulars appended to the defence in support of the pleaded contextual imputations, I would not be persuaded that they disclose no case that could be made in support of the truth of those contextual imputations (were they permitted to remain). 19 This is an instance where, as the plaintiff contended, the imputations found by the jury are trenchant. Imputations of the kind proposed by the defendant are not so trenchant; by comparison they are watered down. However to the extent that they are less trenchant and notwithstanding elements in common, a difference in substance may be asserted as I have said. 20 I will strike out paragraph 5 of the defence. 21 The plaintiff does not pursue any "interstate" component. The plaintiff pleaded in her amended statement of claim (paragraph 2) publication "throughout New South Wales and the other States and Territories of Australia". That paragraph can be taken as amended by deleting the words "and…Australia". Overall, I see no basis for a special order in favour of the defendant with respect to what became an otiose part of the whole of a defence to be struck out (i.e. paragraph 5). 22 The orders are:

1. Paragraph 5 of the defence is struck out with leave to replead within 14 days.
2. The defendant is to pay the plaintiff's costs.
3. I stand the matter over to the Registrar's Defamation Directions List on 11 July 2003.

Page 4

1. Tax officials reduced to tears
2. By Matthew Benns
3. Almost the entire staff of an elite Australian Tax Office Department has quit or gone on stress leave in the past two years.
4. Conditions in the International Tax Division on the ninth floor of Centrepoint in the Sydney CBD are so bad that an independent investigator has been appointed.
5. Senior tax officials have been reduced to tears at their desks and claim the department is "a very unhappy ship indeed".
6. The department's health and safety representative has issued three improvement notices.
7. In the latest notice he wrote: "Over the last two years I have been requested to assist five distraught people from the ninth floor of Centrepoint and in particular from the International Tax Division.
8. Since first contacting the Deputy Commissioner another member of the ITD staff has gone on what I believe to be four weeks' stress-related leave".
9. The department is run by Assistant Commissioner Jillian Saint, who took sick leave last week as independent consultant Peter Grills conducted his inquiry.
10. Ms Saint's executive assistant is on stress leave and was joined last week by her personal assistant.
11. One member of staff said: "I have seen senior tax officers with years of experience, men in their 50s, weeping at their desk after being publicly humiliated."
12. The staff member estimated that in two years 20 staff from the department had taken stress leave, extended leave, resigned or requested transfers. Not one of the 15 staff who were in the department two years ago is there today.
13. "Productivity has gone through the floor because of al the upset," the officer said. "The International Tax Division is supposed to be the pinnacle of an auditor's career. Instead people cannot wait to leave".
14. Community and Public Sector Union spokesman Michael Tull said a process was in place to investigate the problem. "I don't want to say anything further that could jeopardise that process."
15. The revelations came after bad publicity for the ATO including three negative reports by the Australian National Audit Office.
16. An ATO spokesman said: "We have no comment."

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