Trodden v Fairfax Media Publication Pty Ltd

JUDGMENT 1HER HONOUR: These are proceedings for defamation arising out of the publication of an article in the printed version of the Sydney Morning Herald and in its on-line edition. The application before the Court is the plaintiff's application in effect to have the defence of contextual truth struck out. The articles concern dealings between the Balmain Tigers Rugby League Football Club and a company associated with a former player at that club, Mr Ben Elias. The plaintiff was at the time of publication of the articles the Chairman of the Board of the Club. The article reported the circumstances in which heads of agreement were signed by the plaintiff on behalf of the club for Mr Elias's company to "take over the proposed redevelopment of the club." 2The plaintiff relies on the following imputations: (a) The plaintiff had, by signing a heads of agreement on behalf of Balmain Leagues Club for development tof a property owned by the club, without public auction or open tender, contravened the Registered Cubs Act; (b) The plaintiff as President of the Balmain Leagues Club, had so incompetently managed the affairs of the Balmain Leagues Club as to plunge it into inextricable debt and risk its future; (c) The plaintiff had behaved in a bullying manner by snatching a microphone from a local resident at a members meeting so as to stop that resident from expressing views in opposition to those of the plaintiff; (d) The plaintiff took steps to conceal the content of a call option from members of the Balmain Leagues Club so that those members were prevented from learning that the agreement would plunge the club into debt despite handing over all its land to a company 50% owned by Benny Elias's company Fordmont; (e) The plaintiff breached his duties as President of the Balmain Leagues Club, by signing a heads of agreement to dispose of the club's property that was not in the interests of the members of that club; 3By their defence filed 18 June 2013 the defendants have at paragraph 10 pleaded the defence of contextual truth under section 26 of the Defamation Act 2005. The plaintiff objects to each of two contextual imputations relied upon by the defendants. 4The first contextual imputation is: By signing a Heads of Agreement to dispose of the Club's property with a company 50% owned by Benny Elias's company Fordmont, the plaintiff allowed his relationship with and trust of Benny Elias to prevail over the interest of members of the club (the whole of the First Matter Complained Of and in particular lines 1-10, 29-47, 61-76, 108-269). 5The plaintiff objects to that imputation on the basis that it is incapable of arising. As the submission was developed by Mr Richardson on behalf of the plaintiff, it was further submitted that the imputation was liable to be struck out as imprecise. 6The imputation is said to arise primarily from the following paragraphs of the matter complained of, although the whole of the matter complained of was relied upon. First, in paragraph 12 the article describes Mr Elias as a person who, "had the connections and trust of the club, vital for the redevelopment deal." Secondly, in paragraph 22 of the article there is a quote attributed to a resident who was opposed to the redevelopment as follows: I was shouted down and booed when I disagreed with what the Board was telling us. Then David Trodden snatched the microphone off me. The message the Board was giving was that Benny was acting in the club's best interests and that of course we should trust him...we were told he was a white knight. 7Thirdly, in paragraph 34 of the article, a statement received by the Herald from the plaintiff was reported as follows: Mr Trodden said all club audited finances, including loans and repayments, had been documented and distributed to members in a transparent process. "Ben Elias's relationship with Balmain Leagues is not a business one - he is one of our greatest players and hard working supporters," he said. 8It may be accepted that those paragraphs suggest a connection between Mr Elias and the Club and, further, that he enjoyed the trust of the Club. It is also open, as frankly acknowledged by Mr Richardson, to understand the article to mean that Mr Elias enjoyed Mr Trodden's personal trust arising from the circumstance of their having served on the Board together and confirmed in the remarks attributed to the plaintiff in the article. 9A difficulty in determining whether the imputation is conveyed arises from the point developed by Mr Richardson in argument that the imputation attributes the allegedly poor decision to sign the heads of agreement to the plaintiff's "relationship with and trust of" Mr Elias without specifying what the relationship is alleged to have been. 10Ms Brown, who appeared for the defendants, indicated that it was not suggested that the imputation means Mr Elias was a friend of the plaintiff's. If that is not the meaning, then it is difficult to know precisely what is alleged and whether it is anything more than the existence of the prior association between Mr Elias and the Club, as opposed to any separate personal relationship between Mr Elias and the plaintiff. 11If no personal relationship is alleged between those two men it is hard to see that the article is capable of saying anything more than that the plaintiff trusted Mr Elias in his dealings with him and that his trust turned out to be misplaced. It is doubtful whether a meaning so expressed would be defamatory. In any event, I am persuaded that in its present form the imputation is bad in form as being as imprecise and I accept that it should be struck out. I will hear Ms Brown as to whether she would seek leave to replead that imputation. 12The second contextual imputation is: The plaintiff took steps to prevent members of the Balmain Leagues Club from having a reasonable opportunity to consider the content of a call option, with the consequence that few members would have been aware that the deal with Rozelle Village would immediately plunge the club back into debt, despite handing over all its land to Rozelle Village (the whole of the First Matter Complained Of and in particular lines 186-193). 13The only difference between that imputation and the plaintiff's imputation (d) is that the plaintiff's imputation alleges he "took steps to conceal the content of a call option" whereas the contextual imputation alleges that he "took steps to prevent members of the Balmain Leagues Club from having a reasonable opportunity to consider the content of a call option." There is a subtle difference, it may be accepted, between actively concealing and preventing a reasonable opportunity to consider something. I would accept that there is some difference at least in nuance between those two meanings. 14The plaintiff submitted, however, that the imputation does not meet the requirement of section 26(a) of the Defamation Act 2005 to establish that the matter complained of carried the contextual imputation "in addition to" the defamatory imputations of which the plaintiff complains. 15Mr Richardson reminded me of my discussion of the relevant principles in Hyndes v Nationwide News Pty Ltd [2011] NSWSC 633 at [28] to [31]. Although it is lengthy, it may be convenient to set out that passage in full: 28. The principles to be applied in determining whether a defendant should be permitted to rely upon a contextual imputation are conveniently collected in the decision of Nicholas J in Con Ange v Fairfax Media Publications Pty Ltd [2011] NSWSC 204 at [13] and following. His Honour noted that the issues which will arise in relation to a defence of contextual truth under the 2005 Act are similar to those which arose under the Defamation Act 1974, but also noted that there is some difference in the language of the two sections, as pointed out by Simpson J in Ange v Fairfax Media Publications Pty Limited [2010] NSWSC 645 at [50] to [52]. 29. The defence accepts that the matter complained of conveys the plaintiff's imputation and that no other defence is available to the cause of action based upon that imputation: Allen v John Fairfax & Sons [NSWCA, 2 December 1988, unreported] per Hunt J (it should perhaps be noted in that context that, under the 2005 Act, the imputation is no longer the cause of action: cf s 9 of the 1974 Act). 30. In John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484, McColl JA summarised the relevant authorities at [212] as follows: (a) the defence of contextual truth under s 16 was created to fill a lacunae (sic) in the common law by enabling a defendant to justify a meaning of the matter complained of upon which the plaintiff had not relied; (b) a contextual imputation must be another imputation from the plaintiff's imputation; the test of whether it differs in substance from the plaintiff's imputation is a necessary but not sufficient test for 'another' imputation, which requires a difference in kind (Jones); it must be a "truly alternative" imputation (Hepburn); (c) a contextual imputation may plead a different "sting" entirely from that relied upon by the plaintiff; and (d) a plea of contextual truth admits that the matter complained of conveyed the imputations relied upon by the plaintiff, does not seek to justify those imputations (save where a contextual imputation singly, or in combination, pleads back one of the plaintiff's imputations), but seeks to establish that by reason of the substantial truth of the contextual imputation(s), the imputation complained of does not further injure the reputation of the plaintiff. 31 The decision in Hitchcock incidentally provides an illustration of the likelihood that good legal minds will differ as to the application of those principles in any particular case. In approaching the difficult task raised by the present application, I have found it useful to bear in mind the explanation of the defence summarised in the first principle stated by McColl JA in Hitchcock, that the defence enables a defendant to justify a meaning of the matter complained of upon which the plaintiff has chosen not to rely. As the matter was put by Mr Smark in argument, the reason for the defence is to require the plaintiff to deal with "the elephant in the room". 16It may be seen from those principles that the defence of contextual truth was not intended to allow a defendant to defeat a claim by merely tinkering with the imputations upon which a plaintiff has chosen to rely. It is a plea of confession and avoidance. As noted by McColl JA in John Fairfax Publications Pty Limited v Hitchcock [2007] NSWCA 364; (2007) 70 NSWLR 484 at set out above, the defence admits that the matter complained of conveyed the plaintiff's imputations. It does not seek to justify those imputations, but seeks to establish that by reason of the truth of the imputations in the context of which those imputations were published, the plaintiff's imputation does not further injure his or her reputation. 17Viewed against those principles, it is plain in my view that the plaintiff's second contextual imputation is not apt properly to invoke the defence. Whether that is because it does not arise "in addition to" the plaintiff's imputations or rather whether the proper legal conclusion is that it is not capable of being a "contextual imputation" within the meaning of section 26(a) may be a matter of debate. I am satisfied that, for the reasons I have given, the defendant's reliance upon the imputation is apt to cause embarrassment in the conduct of the hearing and is liable accordingly to be struck out. ORDERS: (1)that contextual imputations (i) and (ii) be struck out. (2)that the defendants pay the plaintiff's costs of the application.