West Australian Newspapers Ltd v Aboriginal Nations Pty Ltd

REASONS FOR JUDGMENT HEEREY J: 2 This is an application for leave to appeal against a judgment of Higgins J of the Australian Capital Territory Supreme Court. His Honour allowed an appeal against the Master of the Supreme Court and rejected the present applicants' motion to strike out certain imputations pleaded in the respondent's statement of claim. 3 The respondent sues in respect of a publication on 14 September 1996 in the Sydney Morning Herald and a publication in substantially the same terms on the same day in the West Australian. 4 The article complained of alleges in substance that there had been an Australian Broadcasting Corporation internal investigation which had found a "conflict of interest" over the commissioning of a documentary film "More Than Legends", which had cost $300,000 to make. The article states that the Australian Federal Police had been called in by the ABC, and that the investigation was into the activities of two former senior employees of the ABC's Indigenous Program Department. Those employees are named as Mr Llew Cleaver and Mr Paul Fenech. Both are said to have resigned early the previous year to take other jobs before the investigation began. The article states, "As well as working together at the ABC, the two were part owners of a private business, Aboriginal Nations Pty Limited." The article goes on to say that in the following year that company, that is the present respondent, approached the government's film funding organisation, Australian Film Finance, for the money to make "More Than Legends". Proof of a pre-sale to a television station had to be available before a film could qualify for AFF funding. The article continues: "Mr Cleaver and Mr Fenech went to their boss, the executive producer of the Indigenous Program Department, Mr Vaughan Hinton, and proposed that the ABC buy the rights to screen the documentary as part of the 'Blackout' series. The ABC eventually approved the purchase." 5 It is said that the AFF advanced $284,667 for the movie which was to be a co-production with the respondent and the ABC, and it is also said that when it was completed, the film was delivered to the ABC which paid the respondent $50,000 or $60,000 for the rights to screen it. The article states that Mr Hinton and Mr Hamlyn, another ABC officer, say that they were never told that Mr Cleaver and Mr Fenech had a financial interest in the respondent, which received the money and which, along with AFF, now owns the film. It reports that Mr Cleaver and Mr Fenech deny that there was any conflict of interest. 6 The statement of claim pleads certain imputations which are said to flow from the natural and ordinary meaning of the publication and also a true innuendo. The former are contained in par 5 (the Sydney Morning Herald publication) and in par 7 (the West Australian publication). They are not materially different. The imputations pleaded in par 5 are as follows: "5. The first matter complained of in its natural and ordinary meaning contained the following imputations, each of which is defamatory of the Plaintiff: (a) The Plaintiff had knowingly participated in the dishonest conduct of Messrs Cleaver and Fenech in concealing from the ABC the fact that they had a financial interest in the Plaintiff when the Plaintiff stood to gain financially from a proposed transaction between it and the ABC. (b) The Plaintiff had knowingly participated in the conduct of Messrs Cleaver and Fenech in placing themselves in a position of conflict between their duty as employees of the ABC and their financial interests in the company in its dealings with the ABC. (c) The Plaintiff had dishonestly profited from the documentary "More Than Legends". (d) The Plaintiff had engaged in criminal conduct which was being investigated by the Australian Federal Police. (e) The Plaintiff had behaved in such a manner as to warrant investigation by the Australian Federal Police to determine whether it had engaged in criminal conduct." 7 The true innuendo pleaded in paragraph 8 is as follows: "8. Both the first matter complained of and the second matter complained of also contained the following imputation which is defamatory of the Plaintiff and which arises by reason of such of the facts and matters particularised below which are found to be within the knowledge of people to whom the matter complained of was published. The Plaintiff engaged in a deception of members of the public in allowing itself to be used for the profit of individual shareholders and not for the benefit of the Aboriginal community whilst claiming that it was being conducted altruistically for the benefit of the Aboriginal community in general. PARTICULARS (a) At all material times the Plaintiff had conducted its affairs on the express basis that it was to be a non-profit organisation for the purposes, among others, of promoting an increased awareness of Aboriginal history and culture and developing film-making skills among Aboriginals, and with shareholders not entitled to any dividends; (b) At a general meeting of the Plaintiff on 9 November 1994 it was resolved that the company would continue as a non-profit organisation with all shareholders not entitled to dividends; (c) The matters set out in each of (a) and (b) were widely known in the film-making community and the film industry generally." 8 The Master acceded to the strike-out application, holding that the imputations 5(a) to 6(e) and the corresponding imputations in par 7 were not capable of arising from the matter complained of. The matter was then re-heard before Higgins J. 9 The strike-out application was brought under O 23 r 28 and O 29 r 4 of the Rules of the Supreme Court of the Australian Capital Territory. O 23 r 28 provides: "A court may, at any stage of the proceedings, order to be struck out or amended any matter in any endorsement or pleading which is unnecessary or scandalous or may tend to prejudice, embarrass or delay the fair trial of the action, and may in any such case, if it or he thinks fit, order the costs of the application to be paid as between solicitor and client." 10 Order 29 r 4 provides: "The court may order any pleading to be struck out on the ground that it discloses no reasonable cause of action or answer and in any such cause, or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the court may order the action to be stayed or dismissed or judgment to be entered accordingly as is just." 11 Higgins J referred to two leading authorities on the law relating to the capacity of published matter to convey defamatory meanings, Jones v Skelton [1963] 1 WLR 1362 at 1371 and Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at 167. After discussing the arguments as to the imputations alleged, his Honour said (at par 21): "For present purposes it is enough to say that the matter complained of is open to the interpretation that imputations against the named part-owners are capable of arising also against the plaintiff. It is open to conclude that the imputations portray the named individuals as the operating force of the plaintiff, ie as its 'alter ego'". 12 This being an application for leave to appeal, it is necessary to apply the principles laid down by a Full Court of this Court in Decor Corporation Pty Limited v Dart Industries Inc (1991) 33 FCR 399. In essence those principles require a court to consider whether the order complained of is attended with sufficient doubt and whether substantial injustice would arise to the party seeking leave if leave were not granted. This being a matter of practice and procedure there is also the question whether it attracts the further layer of appellate restraint discussed by the High Court in Adam P. Brown Male Fashions Proprietary Limited v Philip Morris Incorporated (1981) 148 CLR 170. In that case the High Court citing with approval the well-known statement of Jordan CJ in Re The Will of F.B. Gilbert (1946) 46 NSWSR 318 at 323 and warned that a "tight rein" should be kept on such appeals. 13 Senior Counsel for the applicants argued that the order of Higgins J was not a discretionary one since it involved the question of the capacity of a publication to convey the defamatory meanings alleged, which is a question of law. However, the fact that the word "may" is used in both rules points to a conclusion that a discretionary power is conferred. It is not necessary to express any final conclusion as to this since my view would remain the same even if Higgins J's order were not discretionary in the strict sense. Certainly there is no doubt that it is a matter of practice and procedure. 14 I note that there have already been two determinations by judicial officers on this interlocutory dispute. The action commenced on 18 April 1997, that is more than two years ago, in respect of a publication in September 1996. There has not yet been a defence filed. The law of defamation should be able to provide a speedy vindication (or otherwise) of allegedly damaged reputation. The progress of this case, or rather the lack thereof, is a sad reflection on the extent to which the application of the law of defamation in Australia can fall short of that aim. 15 I consider that leave should not be granted. The decision of Higgins J does not effectively determine any rights of the parties. It is still open to the applicants to contend at trial that the publications do not convey the imputations alleged. Indeed, it would still be open to them to contend that the publications are not capable of conveying the imputations alleged. The decision of his Honour on the strike-out application would not in my view create any issue estoppel to prevent such an argument being raised. 16 By contrast, if the applicants had sought a binding determination of any legal question, they could have applied for a preliminary trial under O 37 r 2. This highlights an element of unfairness in the approach adopted by defendants in the present situation. A strike-out application is brought. If it fails, the defendant can still run the same argument at trial. If it succeeds, it may stop the plaintiff. Even if unsuccessful, such applications can wear down the plaintiff's resolve and financial resources. So defendants have nothing to lose in bringing such applications. I would not wish to see that potential unfairness compounded by the routine grant of leave to appeal should defendants' applications fail. 17 Moreover, it is conceded that the true innuendo will still go to trial. While undoubtedly this raises different issues, there will still be a substantial overlap with the issues raised by para 5 and 7, and in particular the relationship between Messrs Cleaver and Fenech and the respondent. 18 At most, the applicants' argument comes down to a contention that Higgins J incorrectly applied well settled principles. I have not entered on the merits of this dispute and express no view one way or the other. It is sufficient to say that, for the reasons I have already mentioned, leave should be refused. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Miles, Heerey and Finn JJ.