Michael William Allworth v John Fairfax Group Pty Ltd; John Alexander and Roy Masters [1993] ACTSC 22; (1993) 113 FLR 254 (25 March 1993)

SUPREME COURT OF THE ACT

MICHAEL WILLIAM ALLWORTH v JOHN FAIRFAX GROUP PTY LTD; JOHN ALEXANDER and ROY
MASTERS
No. SC567 of 1991
Number of pages - 29
Defamation
[1993] ACTSC 22; (1993) 113 FLR 254

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Higgins J(1)

CATCHWORDS

Defamation - Pleading - Objections to imputations pleaded in statement of claim - Whether imputations differ in substance - Use of a less serious "fall-back" imputation - Ambiguity of imputation.

Defamation - Pleading - Application for leave to amend defence by addition of "contextual imputations" - Need for contextual imputations to differ in substance from imputations pleaded by plaintiff - Need to "reach the sting" of the plaintiff's imputations - Late amendment - Discretion to permit.

Defamation - Defences - Justification - S.16(2) Defamation Act 1974 (NSW) - "Polly Peck" defence - Distinction between "public benefit" and "public interest" - Relationship between s.16(2) defence and "Polly Peck" defence.

Defamation - Discovery and interrogatories - Defence claim for further and better discovery/answers - Whether truth or falsity in issue in the absence of a plea of justification - When an admission of falsity - When plaintiff relies on falsity to aggravate damage or defendant on truth as mitigation - When defendant pleads contextual imputations - When plaintiff entitled to "nail the lie" - Effect on scope of discovery and interrotatories.

Defamation Act 1974 (NSW), ss.16, 47

Defamation Act 1901 (ACT), s.6

Lewis v Daily Telegraph Ltd (1964) AC 234

Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293

Polly Peck (Holdings) PLC v Trelford (1986) QB 1000; 2 WLR 845

Whatman v John Fairfax and Sons Pty Limited (SC NSW; 20/2/80; Hunt J; unreported)

Singleton v John Fairfax and Sons Pty Ltd (SC NSW; 20/2/80; Hunt J; unreported)

Feros v West Sydney Radio Pty Ltd (NSWCA; 22/6/82; Moffitt P, Reynolds and Samuels JJA; unreported)

Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260

Anderson v Mirror Newspaper (No. 2) (1986) 5 NSWLR 735

Perkins v Nationwide News Pty Ltd (SC ACT; 28/4/92; Miles CJ; unreported)

Allen v John Fairfax and Sons Ltd (SC NSW; Hunt J; 2/12/88; unreported)

Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36

Hepburn v TCN Channel Nine Pty Ltd (1984) 1 NSWLR 386

Gardiner v John Fairfax and Sons Ltd (1942) 42 SR(NSW) 171

London Artists Ltd v Littler (1969) 2 QB 375

Allsopp v Incorporated Newsagencies Co Pty Ltd (1975) 26 FLR 238

Rofe v Smith's Newspapers Ltd (1924) 25 SR (NSW) 4

Howden v Truth and Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416

Tisdall v Hutton (1944) Tas SR 1

Glissan v Crowley (1905) 5 SR (NSW) 29

Crowley v Glissan (No. 2) [1905] HCA 31; (1905) 2 CLR 744

Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1

TWT Ltd v Moore (1991) A Def R 51,030

Waterhouse v Broadcasting Station 2GB Pty Ltd (SC NSW; Hunt J; 20/10/86; unreported)

Singleton v Ffrench (1986) 5 NSWLR 425

Goldsbrough v John Fairfax and Sons Ltd (1934) 34 SR (NSW) 524

Hobbs v Tinling (1929) 2 KB 1

Watt v Watt (1905) AC 115

Mutch v Sleeman (1928) 29 SR (NSW) 125

Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1968) 117 CLR 185

Rigby v Associated Newspapers Ltd (1969) 1 NSWLR 729

Tabe v Amalgamated Television Services Pty Ltd (1991) Aus Def R 50,025

HEARING

CANBERRA, 4 December 1992
25:3:1993

Counsel for the Plaintiff: Mr B Connell

Instructing solicitors: Messrs Macphillamy Cummins and Gibson

Counsel for the Defendants: Mr M Lynch

Instructing solicitors: Messrs Freehill Hollingdale and Page

ORDER

THE COURT ORDERS THAT:
1. Leave to amend pleadings in accordance with the terms of the

judgment granted to both plaintiff and defendants.

DECISION

HIGGINS J On 9 August 1991 the plaintiff caused a writ of summons to issue out of this Court. The cause of action alleged was defamation. The first defendant is the publisher of the "Sydney Morning Herald". The second defendant is alleged to have been its editor. The third defendant was a journalist employed by the first defendant and, apparently, the author of the matter complained of.

2. The matter complained of was an article in the "Sport Extra" part of the Sydney Morning Herald, page 70, of 3 August 1991. It was entitled "RAIDERS OF THE LOST CHANCE". It purported to give an account of the difficulties faced by the Canberra Raiders, a rugby league team, considered by most league fans in the Canberra region to be "simply the best" ("the Raiders"). The author promised the reader, "Salary cap excesses, overspending and financial mismanagement ...". It seemed designed to attract rather than repel the mythical reader "avid for scandal".

3. Part of the article purported to be an account of the management of the Raiders and the activities of the plaintiff as chairman of what was described as a "superboard" to manage or supervise the affairs of the various clubs associated with the Raiders.

4. The statement of claim was filed on 16 August 1991 and served on 21 August 1991. Defences were delivered on 28 October 1991 (first and third defendants) and 14 November 1991 (second defendant). By 6 March 1992 the pleadings had closed.

5. On 29 October 1992 an amended statement of claim was delivered. The amendments proposed followed a letter of 30 September 1992 from the plaintiff's solicitors and were designed to meet objections taken by new solicitors for the defendants as to the imputations pleaded. The defendants had indicated, by letter dated 21 September 1992, an intention to amend the defences to plead "contextual truth", comment and justification of some or all of the imputations.

6. The plaintiff proposed to delete two imputations which had been pleaded in the following form. Those were:-

"(e) That the plaintiff was unprofessional in that he placed
himself in a position of conflict of interest and duty by
acting as auditor for the Canberra Raiders and associated
clubs and at the same time taking on the position as
Chairman and undertaking managerial tasks.
(g) That the plaintiff was unprofessional in that he
exceeded his area of competence in providing services to the
Canberra Raiders and associated clubs."

7. The defendants in reply agreed to the amendments proposed but asserted that imputations (a) and (b) as pleaded did not differ in substance and that (h) was ambiguous.

8. Those imputations were pleaded as follows:-

"(a) That the plaintiff abused his position with the Canberra
Raiders and associated clubs to arrange a $286,000.00
payment to himself for services to those clubs.
(b) That the plaintiff dishonestly abused his position with
the Canberra Raiders and associated clubs to arrange a
$286,000.00 payment to himself for services to those clubs;
(h) That the plaintiff participated in the improper making
of cash payments to players."

9. In the meantime, discovery was given and interrogatories administered. On 24 November 1992 notices of motion were exchanged.

10. The plaintiff sought further and better answers to interrogatories. The defendants sought to have imputations (a) and/or (b), (c) and/or (d) and (h) struck out. They also sought further and better discovery.

11. The reference to (c) and (d) introduced a new element to the defendants' complaints. However, it was the same issue as was raised in relation to (a) and (b), namely, that the imputations did not differ in substance.

12. The form of those imputations was as follows:-

"(c) That the plaintiff so incompetently acted as Chairman of
the board managing the Canberra Raiders and associated clubs
and so mismanaged their affairs that he drove the Canberra
Raiders to disaster.
(d) That the plaintiff was incompetent as Chairman of a
"superboard" controlling the Canberra Raiders and associated
clubs and in the control and management of those clubs."

13. On 26 November 1992, the defendants gave notice of motion seeking leave to file an amended defence.

14. The substantive amendment proposed was to add a plea, with somewhat confusing numbering, that the matter complained of conveyed certain "contextual imputations". I will set them out, omitting the appended particulars of facts and circumstances by reason of which they were said to arise:-

"(1) The plaintiff acted unprofessionally as an accountant in
that he placed himself in a position of conflict of interest
and duty by giving financial advice to and being actively
involved in the financial management of the Canberra Raiders
while at the same time being involved in the audit of the
club.
(2) The plaintiff acted unprofessionally in that he placed
himself in a position of conflict of interest and duty by
negotiating on behalf of the chief executive of the Canberra
Raiders a salary package at a time when he was auditor to
the Canberra Raiders.
(3) The plaintiff was directly involved in decisions made by
the management of the Canberra Raiders which contributed to
the Canberra Raiders experiencing serious financial
problems."

15. Those "Contextual Imputations" were said to arise from the natural and ordinary meaning of the matter complained of, not by reason of extrinsic facts known to particular persons or groups. Thus, if the contextual imputations pleaded arise, they have to do so by reference to the understanding of the "ordinary reasonable reader" (see Lewis v Daily Telegraph Ltd (1964) AC 234). That reader, whilst not overly cynical and suspicious (see Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293) may well "read between the lines" and take account of a background knowledge of affairs and events. Thus, the ordinary reasonable reader would know that professional persons do have codes of ethics constraining their conduct and might well have an understanding of those constraints or at least some of them. That person might also have an understanding of matters alluded to in the matter complained of which had been the subject of public exposure from time to time in the media. The "information explosion" of recent times may well have increased the reservoir of background knowledge which the ordinary reasonable reader may be presumed to possess.

16. The pleading continues:-

"(a) Each of the Contextual Imputations:
(1)was published contextually to the Imputations (that
term is not defined in the pleading. It is apparently
a reference to the imputations now pleaded in paragraph
6 of the amended statement of claim) (which related to
matters of public interest and/or were published under
qualified privilege);
(2) was a matter of truth or substantial truth;
(3) related to matters of public interest and/or was
published under qualified privilege.
(b) The plaintiff's reputation was not likely to be further
injured by the publication of the imputations as pleaded in
paragraph 6 of the statement of claim by reason of the truth
or substantial truth of the Contextual Imputations."

17. The defendants followed with another notice of motion, dated 4 December 1992, seeking further and better discovery. Alternatively, the defendants seek to cause, by subpoena, the production of documents held by the plaintiff's accounting firm, KPMG Peat Marwick.

18. It is apparent that the issues raised as to the scope of the discovery process, both as to documents and interrogatories, depend in large measure on the extent to which the imputations relied upon by the plaintiff should be permitted to stand and whether the defendants should be permitted to plead the "contextual imputations" set out in the proposed paragraph 11A. The question whether, and the extent to which, truth or falsity of the matter complained of is in issue is also relevant.

19. The defence of "contextual imputations" is pleaded only to publication found to have occurred in New South Wales and the Australian Capital Territory. It is, in terms, apt to invoke s.16, Defamation Act 1974 (NSW).

20. Section 16(2) provides,

"It is a defence to any imputation complained of that -
(a) the imputation relates to a matter of public interest or
is published under qualified privilege;
(b) one or more imputations contextual to the imputation
complained of -
(i) relate to a matter of public interest or are
published under qualified privilege; and
(ii) are matters of substantial truth; and
(c) by reason that those contextual imputations are matters
of substantial truth, the imputation complained of does not
further injure the reputation of the plaintiff."

21. The statute law of the Australian Capital Territory contains no such provision. It seems, however, that the defendants intend also to invoke by this paragraph the "Polly Peck" defence (see Polly Peck (Holdings) PLC and Ors v Trelford and Ors (1986) QB 1000; 2 WLR 845). It is not apparent why that latter defence is not sought to be pleaded in respect of publication in the other jurisdictions of Australia where that defence would be available.

The plaintiff's imputations
22. The defendants do not submit that the imputations pleaded by the plaintiff should be struck out as incapable of arising from the matter complained of. Nor is it submitted that they are not capable of being found to be defamatory of the plaintiff.

23. It has been said on numerous occasions that it is most important that false issues are avoided in defamation actions. False issues are most encouraged when a plaintiff pleads exaggerated or ambiguous imputations. Precision is required to avoid inappropriate attempts by the defendants to plead justification. (See, for example, Whatman v John Fairfax and Sons Pty Limited (SC NSW; 20/2/80; Hunt J; unreported); Singleton v John Fairfax and Sons Pty Ltd (SC NSW; 20/2/80; Hunt J; unreported); Feros v West Sydney Radio Pty Ltd (NSWCA; 22/6/82; Moffitt P, Reynolds and Samuels JJA; unreported); Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260; Anderson v Mirror Newspaper (No. 2) (1986) 5 NSWLR 735.)

24. Precision in pleading tends also to reduce the need for defendants to introduce contextual imputations.

25. Nevertheless, it is important not to take too restrictive a view of what imputations should be permitted to go forward to a tribunal of fact. (See, for example, the differing approach of Hogan M and Miles CJ in Perkins v Nationwide News Pty Ltd (SC ACT; 28/4/92; Miles CJ; unreported) as to what was "capable" of arising as a defamatory imputation.) On the basis of the test referred to in that matter by the Chief Justice, no imputation pleaded in this case by the plaintiff seems to me to be unarguably incapable of arising at all. I make that observation because it seems to me that, even though the parties are content to allow litigation to proceed on the basis of the pleaded imputations, the court has a public duty to strike out unarguable imputations, (having given each party a chance to be heard on the issue) even on its own motion.

26. That issue does not arise here. It follows that it is necessary only to consider the objections raised by the defendants.

Imputations (a) and (b)
27. The complaint is they do not differ in substance. That depends on whether "abused his position" conveys the same accusation against the plaintiff as "dishonestly abused his position". Pleading a serious, then a less serious "fall-back" imputation, is permissible (see Anderson v Mirror Newspaper (No. 2) (supra)). That enables the defendant to focus more particularly on the imputations to which it can arguably plead justification or relevantly justified contextual imputations.

28. The concept of "abuse" of position in the context of the matter complained of, is used in the sense of misuse or perversion of position, an unjust or corrupt practice. The word "dishonestly" connotes an awareness by the plaintiff of his misuse of his position to obtain the advantage referred to. It is possible that the plaintiff could be considered by a tribunal of fact to stand accused by the matter complained of unethical behaviour in obtaining a benefit to which otherwise he stood entitled. That is, that the accounting work was done to the value suggested. Alternatively, it could be taken to infer that value was not given and that the plaintiff knew it. The latter would warrant the term "dishonestly", the former might not.

29. I consider, therefore, that imputations (a) and (b) do "differ in substance", (b) being a more serious category of abuse of position than (a). The plaintiff should, however, be required to particularise, by use of an appropriate qualifying adverb the term "abuse" in (a) (for example, "carelessly", "unethically"). I will not seek to draft that qualification but it needs to be expressed so as to indicate that the area covered by (b) is excluded. The remaining area of "abuse" should be defined so as to distinguish between an advertent, though not dishonest, abuse of position and an inadvertent or even improper act which constitutes an abuse of office.

Imputations (c) and (d)
30. Imputations (c) and (d) each charge the plaintiff with incompetence in the control and management of the so-called "superboard". Although different words are used to describe it, in the context of the matter complained of, the same entity is described in each imputation.

31. The distinction between the two imputations, a tribunal of fact might conclude, is that (c) is directed towards incompetence as demonstrated by a particular series of acts, namely, the management by the plaintiff of the affairs of the clubs referred to. Imputation (d) is wider. It alleges that the plaintiff lacked competence for the position. I conclude, therefore, that (d) does differ in substance from (c).

32. However, the drafting of (c) and (d) is such as to cause some potential for confusion. Imputation (c), by use of "and" in line three, could be construed as two allegations. It has not been put forward that way. I think, for example, to replace "and" by "in that he" would more accurately express the intended imputation. I would allow the plaintiff to reframe that imputation to clarify it accordingly.

33. Similarly, although it is not an important matter, in (d) the term "controlling" is presumably included in "managing". If so, the words following "a" in the final line are redundant. If there is doubt as to whether controlling includes "managing" that term could be added. As framed, the imputation could lead to a question as to whether the phrase "and in the control and management of those clubs" adds something to the imputation. It should, I think, be amended so as to remove any possible ambiguity.

34. However, none of the amendments I have suggested follow from the defendants' objections to the imputations in question. Imputation (h)

35. Imputation (h) is objected to as ambiguous. It does refer to a particular practice. It is a practice said to be "improper". That is not a term strong enough to encompass something against the criminal law. It suggests an offence against some perceived rule of ethics or morals. It could also refer to something which is also unlawful in the civil sense. For example, a refusal to pay a debt properly due, depending on the circumstances, could be "improper". There needs, however, to be a connotation of moral opprobrium.

36. Imputation (h) must be read in the context of the matter complained of. It refers only to one area of "cash" payments to players. That is the alleged "practice" described in paragraph 30 of the matter complained of -

"It was a regular practice after an auction, held to raise funds
for the club, to meet player demands with cash. An auction
typically earns $30,000 - $10,000 in cheques, $10,000 in promises
and $10,000 in cash. If a player needed an advance, it was met
via this immediate source. Ironically, accounting fees of
$286,000 were paid to Allworth for his audit of the Canberra
Group, much of which concerned Raiders' finances."

37. There is a further allegation that could be construed as one of "improper" payments to players. Paragraph 23 refers to the plaintiff and another person. It suggests that those persons, referred to as "the Raiders pair", knew that the "salary cap" had been exceeded. It implied that their stated claims to the contrary were knowingly false or, at least, that they were too incompetent to realise that their stated position was untenable. The latter would not be "impropriety" but the former would be. If the allegation in (h) refers to the making of "sponsor and league club work" payments which were not then counted towards the salary cap, then the allegation would be ambiguous. It is not, however, possible to construe that allegation as relating to a practice of making "cash payments".

38. In my view, (h) clearly focusses on the practice referred to in paragraph 30.

39. The imputation is thus one of "participation" in that "practice". The making of cash advances to players is not otherwise referred to in the article. It is not possible, in my opinion, to conclude from the article that making cash advances in the circumstances mentioned was "improper". The practice would become "improper" if the article conveyed the impression that such payments were being concealed from the NSW Rugby League (or, possibly, the Australian Taxation Office). It could also be defamatory of the plaintiff to assert that, as auditor, he had failed to notice that such payments had been made. Imputation (h) could, therefore, be intended to impute a participation in an improper concealment of monies.

40. Imputation (h) should be clarified. The level of participation and, as a consequence, the degree of impropriety or incompetence imputed to the plaintiff should be stated.

41. It follows that I uphold the defendant's objection to imputation (h). The plaintiff will have leave to replead it.

Contextual Imputations
42. Under s.16, Defamation Act 1974 (NSW) the defence pleaded is to those imputations pleaded by the plaintiff which are proved to arise from the matter complained of and be defamatory of the plaintiff. Those imputations, if any, found not to arise, will not be relevant for the purpose of this defence. At this stage, the question is only whether the imputation or imputations pleaded by the defendants are capable of being conveyed by the matter complained of.

43. In some cases, extrinsic facts may be relevant to demonstrate that the defendant's imputations are conveyed contemporaneously with the matter complained of, although not by it (see, for example, Allen v John Fairfax and Sons Ltd (SC NSW; Hunt J; 2/12/88; unreported)).

44. That is not the present case. That which is conveyed by the matter complained of is alleged by all parties to be conveyed by it without the aid of any extrinsic facts.

45. There are, of course, some matters particularised by the defendants which could be construed as extrinsic facts. Details of the plaintiff's position with Touche Ross and Co, KMG Peat Marwick, the Australian Institute of Chartered Accountants, and as a registered Company Auditor are particularised. Those matters do not seem, however, to add to or detract from the imputations in question.

46. I take it that the relevance of those particulars is simply to show that the impact of the alleged "unprofessional" acts will be more serious amongst colleagues in the accounting profession. That is, that the plaintiff would be regarded not merely as lacking competence but also as lacking in ethical standards. The imputations pleaded by the defendant, insofar as they are capable of arising, need to be capable of equalling or overreaching the sting conveyed by each defamatory imputation alleged by the plaintiff and held to arise (see Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36, 39-40 per Hunt J). The particulars as to the plaintiff's status could assist in that respect.

47. The Contextual Imputations alleged must, alone or in combination, insofar as they can be combined, differ in substance from the imputation or imputations pleaded by the plaintiff. Otherwise it does not differ from a plea of justification simpliciter (see Hepburn v TCN Channel Nine Pty Ltd (1984) 1 NSWLR 386, 399 per Hunt J).

48. Contextual Imputations (1) and (2) are capable, in my view, of "reaching" the sting of the plaintiff's imputation (a). The abuse of position, if not "dishonest", could be regarded as, at least, unethical. If the other two possible abuses in Contextual Imputations (1) and (2) were made out, a tribunal of fact could conclude that, though the allegation as to the $286,000.00 payment to the plaintiff's firm might be untrue, the Contextual Imputations, if true, were sufficiently serious to equal that imputation.

49. It was not challenged that the imputations all related to matters of public interest.

50. However, Contextual Imputation (3), of incompetence, cannot possibly, even in the context of (1) and (2), be relevant to plaintiff's imputation (a). It does not add to them. Leave to plead it in relation to (a) is denied.

51. Plaintiff's imputation (b) is framed in terms of "dishonesty". None of the Contextual Imputations goes so far. Even in combination they do not go so far. Leave to plead the Contextual Imputations to plaintiff's imputation (b) is denied.

52. Imputation (c) is of incompetence as also is (d) and (f). Contextual Imputations (1) and (2) allege a lack of ethical conduct. Which is more serious is a matter for the tribunal of fact. Imputation (3) is also an accusation of incompetence. However, that allegation seems to me to repeat or be coextensive with (c) and (d). It follows that leave to amend to plead (3) to imputations (c) and (d) should be denied.

53. Imputation (f) differs in substance from (3). However, (3) could not possibly succeed in "reaching" (f). It should not, therefore, be permitted to be pleaded in relation to (f).

54. That leaves imputation (h). It has to be substantively amended. Unless it is repleaded so as to assert that the allegation is of dishonesty, allegations of failure to meet ethical standards as set out in (1) and (2), could be available contextual imputations. Again, however, (3) does not appear to be relevant in relation to such an allegation. Accordingly, I would deny leave to amend the defence to include (3) in relation to imputation (h) but reserve liberty to apply in the event that the repleading of (h) renders it relevant.

"Polly Peck" defence
55. The defendant has not separately pleaded this defence. It has apparently assumed that s.16 and "Polly Peck" defences are coextensive. This is not a valid assumption in one respect at least. The s.16 defence is to the pleaded imputations. The "Polly Peck" defence is to the matter complained of which is alleged to convey some or all of the imputations particularised. It will need to be amended to reflect that difference.

56. The New South Wales plea depends on a qualifying factor of "public interest". "Truth" or justification at common law involves no such qualifying factor. However, s.6 of the Defamation Act 1901 (ACT, formerly NSW), qualifies the defence of truth by reference to "public benefit". "Fair comment", at common law, is qualified by "public interest" (see Gardiner v John Fairfax and Sons Ltd (1942) 42 SR (NSW) 171).

57. What is or is not a matter of public interest may be interpreted widely or narrowly (see London Artists Ltd v Littler (1969) 2 QB 375, 391 per Lord Denning MR; cf Allsopp v Incorporated Newsagencies Co Pty Ltd (1975) 26 FLR 238 244-5 per Blackburn J). It can be decided only by reference to the nature of the matter made public and the context of its publication. To say that a matter is of public interest is to say that it is not merely of private concern but a matter which properly might concern the ordinary reasonable reader as a member of the public.

58. Whether a wider or narrower view is taken does not seem to me to matter greatly in this case. On any view of it, the administration of the Raiders was of great public concern and interest at least in New South Wales and this Territory. The conduct of the plaintiff in relation to that subject matter was within the ambit of that area of concern and interest.

59. The next question is whether "public benefit" is a different concept from "public interest". Certainly, "public benefit" focusses on the apparent purpose of the publication rather than the nature of the subject matter. However, it is not to be expected that a discernible public benefit must be shown to have resulted from publication to enable a plea of justification to succeed. Rather, it seems to me that the public benefit criterion is satisfied if the publication discusses or raises for public discussion or information matters which are properly of public concern. In other words, public benefit will result from the publication of matters of public interest.

60. Both the opinion of Street ACJ in Rofe v Smith's Newspapers Ltd (1924) 25 SR (NSW) 4, 21-2 and that of Evatt J in Howden v Truth and Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416, 427 concerning "public benefit" concentrate on protection from publication of matters which, for whatever reason, ought to remain private. This is a "negative" test. If a publication ought not to be made on privacy grounds there will not be "public benefit" in making it. It seems to be assumed that, if publication would not offend privacy concerns, it will satisfy the public benefit test.

61. The negative nature of "public benefit" is, perhaps, emphasised by Glissan v Crowley (1905) 5 SR (NSW) 29. Public benefit was held to be present even if no publication was, in fact, made to "the public". Indeed, public benefit might have been retarded by publication to the public generally (see Crowley v Glissan (No. 2) [1905] HCA 31; (1905) 2 CLR 744, 756 per Griffith CJ).

62. In Tisdall v Hutton (1944) Tas SR 1, Clark J equated "public benefit" with "public good".

63. I conclude that the matters published in this case could be considered by a tribunal of fact not only to concern matters of public interest but also to be for the public benefit that they be published as they were. There is no discernible difference. Indeed, it is difficult to conceive of a situation where one criterion would be satisfied but not the other.

64. The nature of the "Polly Peck" defence was discussed by Miles CJ in Woodger v Federal Capital Press of Australia Pty Ltd (1992) 107 ACTR 1, 21-24.

65. I considered contextual imputation defences generally in TWT Ltd v Moore (1991) A Def R 51,030.

66. Neither of those decisions dealt with a situation where the alleged contextual imputation arises otherwise than from the natural and ordinary meaning of the matter complained of (see, for example, Allen v John Fairfax and Sons Ltd (supra)). I can see no reason why Allen's case would be treated differently at common law (modified as it is in this Territory by s.6 Defamation Act 1901) than under s.16.

67. So far as this Territory and New South Wales at least are concerned, I do not find the form of the pleading, save for the qualification already mentioned, to be objectionable. Subject to that, the form of pleading suitable to raise a s.16 defence seems to me to be apt to plead a "Polly Peck" defence.

68. It follows that, substantively, the defendant is entitled to plead the same contextual defences to alleged publication in this Territory as to alleged publication in New South Wales.

Discretion - late amendment
69. In Perkins v Nationwide News Pty Ltd (supra) it was noted that a late amendment to pleadings is not a matter of right. The party seeking it must show that the amendment can be made without injustice.

70. In the present case, the plaintiff's amendments are productive of no injustice to the defendants. Indeed, the defendants are advantaged by the fact that the plaintiff has chosen to confine his case by withdrawing some imputations. However, the defendants' amendments stand in a different light. The defendants did not plead justification to any of the imputations pleaded in the original statement of claim. Justification is a plea which has the tendency to prolong a trial. It is a plea not lightly to be made. Had justification been pleaded, a choice by a plaintiff to confine the imputations by deleting some of them, might well have justified the defendants amending a defence to plead the deleted imputations as contextual imputations. That is not, however, the case here. To seek now to raise contextual imputations, whether or not similar to those deleted by the plaintiff, is no different from seeking to make a late plea of justification.

71. In Waterhouse v Broadcasting Station 2GB Pty Ltd (SC NSW; Hunt J; 20/10/86; unreported) it was suggested that such conduct on the part of the defendants should receive little sympathy and be visited with "severe penalties".

72. At this stage of the action, however, I am satisfied that the amendments sought by the defendants can be made without injustice provided that their belated decision to raise contextual justification does not prejudice the plaintiff as to costs.

Discovery
73. The defendants claim that the plaintiff should give further and better discovery. Without a plea of justification the defendant had not undertaken to prove the truth of the imputations allegedly conveyed by the matter complained of.

74. However, the defendants say the plaintiff has raised the issue of truth by pleading that the falsity of the allegations against him was a matter aggravating damages.

75. Section 47 of the Defamation Act 1974 (NSW) provides that, so far as it is relevant to quantum, truth or falsity is not presumed. McHugh JA in Singleton v Ffrench (1986) 5 NSWLR 425 noted that, even apart from s.47, a plaintiff could adduce evidence of falsity of the matter complained of to show increased hurt, whilst a defendant could adduce evidence of truth in mitigation of damage. The latter proposition is subject to the qualification expressed by Jordan CJ and Halse Rogers J in Goldsbrough v John Fairfax and Sons Ltd (1934) 34 SR (NSW) 524 to which I refer below. Of course, that qualification is relevant only insofar as jurisdictions outside New South Wales are concerned.

76. I understand McHugh JA (442-3) in Singleton really to be pointing out that where truth alone is a defence, as in Victoria, South Australia, Western Australia and the Northern Territory, a failure to plead justification may well lead to the falsity of the matter complained of being assumed. However, where truth alone is no defence, all that can be assumed from the absence of a plea of justification is that the defence cannot be made out. In this Territory, for example, the absence of a plea of justification would not necessarily deny truth, it could deny public benefit only.

77. However, the presence or absence of a presumed admission of falsity does not necessarily render evidence of truth of all or part of the matter complained of admissible in mitigation of damages. Halse Rogers J in Goldsborough (supra) expressed the rule as follows,

(546) "Logically, I can see no reason why truth should be
allowed to be set up in mitigation of damages. In an action for
libel damages are given for injury to a man's reputation and,
unless the statements complained of can be shown to have been
published for the public benefit, there seems no reason why the
defendant should be allowed to escape lightly for the wrong he
has done mereby (sic) by showing that he has, after all, only
spoken the truth. A man's reputation may be well established in
a community, and the community may have no interest whatever in
the publication of certain matters derogatory to the plaintiff,
matters which may have been forgotten, or which may affect only
his private character and relations, and to allow damages to be
minimised, merely because a defendant can establish that what he
has said is true, seems to me to rest on no logical basis."

78. Referring to Hobbs v Tinling (1929) 2 KB 1, Jordan CJ noted that where truth alone is a defence it could not be proved in mitigation without having been pleaded as a defence. (See Watt v Watt (1905) AC 115.) It had, apparently, been the practice in New South Wales, before Goldsborough's case, to lead evidence of truth in mitigation, although truth alone was no defence.

79. His Honour said,

(530) "... I am of opinion that, as a general rule, it is not
legitimate to give evidence of truth in mitigation of damages
where justification has not been pleaded. There are, however,
exceptional cases where the evidence might be given without such
a plea, e.g., where the libel consists of a statement that the
plaintiff has a bad reputation, or to rebut a claim for exemplary
damages, as where the plaintiff contends that the defamatory
facts alleged are the gratuitous invention of the defendant."

80. That statement may be compared with that of Ferguson J, (expressing the opinion also of Street CJ and Campbell J) in Mutch v Sleeman (1928) 29 SR (NSW) 125.

81. Of course, at common law the plea of truth is not to individual innuendoes (unless true innuendoes) but rather to the whole of the matter complained of. That does not usually make a great difference as the matter published is complained of only insofar as it is defamatory. Thus, if the plaintiff complains of several parts of a publication making several defamatory charges against him, the truth of part only of those statements and thus of some of the charges would not justify the publication as a whole. Truth would not be established. Nevertheless, Ferguson J noted,

(134) "But while the plea of justification ceased to be
available as a defence upon failure to prove it in its entirety,
it was still open for the defendants to rely in mitigation of
damages upon the truth of all or any of the defamatory statements
which they might succeed in proving."

82. In adducing such evidence, the defendant was limited to proof of facts stated in the libel. However, a defendant could also adduce evidence of a plaintiff's bad reputation and put to a plaintiff giving evidence any matter relevant to the plaintiff's credit, assuming that to be in issue.

83. The reference to Hobbs v Tinling (supra) is apt. That was a case where no justification of any of a string of defamatory statements was pleaded. Thus, on discovery, the plaintiff had no need to produce documents disproving or otherwise those allegations the defendant did not assert to be true. He was not obliged to produce documents relevant only to cross-examination as to credit. Scrutton LJ, in that case, went on to consider the scope of evidence in mitigation of damages. However, his Lordship did not consider the case where several defamatory accusations were made in the one libel and part only could be justified. That situation might well now be covered by the "Polly Peck" defence. His Lordship's assertion that, absent a plea of justification, evidence of truth of a libel (or part of it) was not open in mitigation must, therefore, be confined to the case where the evidence of truth goes to the whole of the matter complained of and not merely part of it.

84. It follows that, at least where truth alone is no defence, there is no presumption that the matters complained of by the plaintiff as defamatory are false. The truth or falsity of those or some of those matters will be in issue if,

. the defendant pleads justification thereto;
. the plaintiff relies on the falsity thereof to aggravate damages;
. the defendant pleads contextual truth and those matters are
relevant to that plea.

85. If the defendant wishes to prove truth in mitigation but not justification, the logical difficulty referred to by Halse Rogers J will still arise. That logical difficulty is not averted by s.47 of the Defamation Act 1974. A defendant could always lead evidence in mitigation if it was not, in reality, an attempt to plead justification, but rather to demonstrate that the extent of the hurt to the plaintiff was diminished. However, truth may increase the hurt to the plaintiff, as Halse Rogers J so eloquently points out in Goldsborough (supra, 566). Whether truth is capable of being mitigatory would need to be considered in the individual case.

86. Where truth alone is a defence, whilst there is no presumption of falsity, a failure to plead justification will be taken as an admission of falsity (see Goldsborough (supra) 529).

87. It is nevertheless, worth noting that the apparent reversal of the practice of enabling a defendant to call evidence of truth of some or all of the matters complained of in mitigation which was assumed to follow from Goldsborough, has not been universally approved. I cannot myself see how it could have had that effect without Mutch v Sleeman (supra) being overruled. That it was so taken in New South Wales, however, is clear enough.

88. Windeyer J has expressed considerable doubt as to the correctness of Goldsborough. His Honour was not persuaded that a defendant could not adduce evidence of the truth of statements made in the matter complained of in mitigation of damages (see Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1968) 117 CLR 185, 204-5). In Rigby v Associated Newspapers Ltd (1969) 1 NSWLR 729, Jacobs JA affirmed the right of a plaintiff, even at common law, to "nail the lie" by proving falsity whether or not the defendant had admitted falsity. If that course was open to a plaintiff, it would follow that a defendant could not be prevented from seeking to adduce evidence as to the same issue.

89. In my opinion, on the pleadings as they stand, it is open to the plaintiff to seek affirmatively to prove the falsity of the matter complained of. In some circumstances, it will be open to a defendant to establish the truth thereof in whole or in part. In all jurisdictions, therefore, truth or falsity of the matters complained of is in issue. Documents relevant to that issue are, subject to the usual exceptions, discoverable (see Tabe v Amalgamated Television Services Pty Ltd (1991) Aus Def R 50,025).

90. I give leave to the parties to seek directions as to whether some documents are available not on discovery but on subpoena and as to whether particular documents should be included or excluded from the discovery process.

Answers to Interrogatories
91. There was an application by the plaintiff seeking further and better answers to interrogatories. Some answers were denied on the basis that the questions did not relate to matters in issue between the parties. It seemed a little paradoxical that the answer given was by defendants who were seeking to put falsity in issue by a plea of contextual truth but, nevertheless, I have now ruled that truth or falsity of the statements made in, and the imputations arising from, the matter complained of are able to be put in issue. They have been put in issue by both the plaintiff and the defendants. It follows that further and better answers will be required. Truth or falsity is, on the pleadings and particulars as they stand, a real issue.

92. It may be that there will be other objections requiring resolution. I will simply reserve leave to the parties to seek further directions concerning answers to interrogatories.