Frank Kelly v the Federal Capital Press of Australia Pty Limited [1994] ACTSC 99 (23 September 1994)

SUPREME COURT OF THE ACT

FRANK KELLY v. THE FEDERAL CAPITAL PRESS OF AUSTRALIA PTY LIMITED
No. SC220 of 1994
Number of pages - 5
Defamation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A. HOGAN

CATCHWORDS

Defamation - Pleadings - Innuendos - Whether capable of arising - Whether desirable to determine question of law in interlocutory proceedings - True innuendos - Whether necessary to allege publication to persons having knowledge of extraneous facts.

Love v Mirror Newspapers (1980) 2 NSWLR 112.
Vlasic v Federal Capital Press (1976) 9 ACTR 1.

HEARING

CANBERRA, 16 September 1994
23:9:1994

Counsel for the Plaintiff: Mr Sexton

Instructing Solicitors: Colquhoun Murphy

Counsel for the Defendant: Mr G. Richardson SC

Instructing Solicitors: Minter Ellison Morris Fletcher

ORDER

THE COURT ORDERS THAT:

1. The application be dismissed.
2. The Defendant pay the Plaintiff's costs.

DECISION

MASTER A. HOGAN This is an application to strike out certain innuendos in a plaintiff's Statement of Claim in defamation, and to require the plaintiff to amend another part of the pleading.

2. The plaintiff is a senior Commonwealth Public Servant, and was formerly the Comptroller General of Customs. On 10 February 1994 the defendant published in the Australian Capital Territory, in New South Wales and in the other States and the Northern Territory a newspaper containing the following article;

"The removal of the Comptroller-General, Frank Kelly, to a feather bed
in the Department of Industry, Technology and Regional Development has
proved to be a tactical blunder which the Opposition lost no opportunity
to exploit in the Senate yesterday.
It is true that Mr Kelly is a statutory officer and the very protections
that are necessary for people with such statutory powers as the
Comptroller-General's also provide, at times, too much protection
against sacking, which can only be done by both Houses of Parliament.
If the job were simply abolished by legislation, Mr Kelly might still be
able to claim breach of contract against the Commonwealth.
However, Senator Schacht admitted on Monday that he had not sought
advice from the Attorney-General's Department about sacking Mr Kelly.
"I didn't have to", Senator Schacht said.
The Commonwealth is a little sensitive at present about a few recent
six-figure payouts it has made behind the scenes.
The matter of Mr Kelly was clearly popped into the "too hard" basket,
perhaps prematurely.
There is still a matter before the Senate Privileges Committee which
might yet have a bearing.
If the committee considers, as alleged by some, that he misled the
Parliament while Comptroller-General, his position may be reviewed
again.
He should not, as has been claimed, be seen as an innocent scapegoat for
the Midford affair. Though not Comptroller-General at the time of the
first Customs raid on Midford, he was Collector-General in NSW where the
case originated, and he became Comptroller-General later. The issue
snow-balled and as Comptroller-General he failed to quash it although he
had ample opportunity.
Senator Schacht is right in his view that any blood lust on the part of
those who wish to see Mr Kelly sacked would have probably been aroused
even further had he received two years' pay in lieu of notice.
But perhaps he should have stood Mr Kelly aside pending the outcome of
the privileges matter and while seeking advice from Attorney-General's.
Even Senator Schacht is not talking about a golden career for Mr Kelly
beyond the two remaining years of his contract. However, the worry in
some quarters is that at DITARD he might be in a position to influence
the Customs reform process from behind the scenes.
Of course the Opposition spokesman on everything, Senator Bronwyn
Bishop, hit the nail on the head when she said on Monday, "The question
is, you just heard the minister say that the cultural change that was
outlined in the Midford report and again in this report depends on
coming from within.
"How can you possibly hope for ordinary members of the Customs Service
to bring about that cultural change when you see the man who is
responsible rewarded at the top with a golden parachute?"
(irrelevant material excluded)
The Conroy review of the Australian Customs Service is called The
Turning Point. Perhaps, at long last, it will be.
The process will be painful and will no doubt break many hearts among
the old guard at Customs. Yet others in the service have been longing
for a result of this kind.
With $25 million worth of compensation to redress, there can surely be
no lack of political will for the task within the Federal Cabinet."

3. Paragraph 7 of the Statement of Claim, so far as is relevant, alleges;

"7. The matter complained of was defamatory of the plaintiff in its
natural and ordinary meaning.
Particulars of Imputations
(a) The plaintiff carried out his duties as Collector of Customs in
New South Wales so incompetently that a criminal prosecution was
commenced against the Midford company, without there being a proper
basis for the initiation of those proceedings.
(b) The plaintiff carried out his duties as Collector of Customs in
New South Wales so incompetently that a criminal prosecution was
commenced against the Midford company, that resulted in the payment by
the Australian government of $25 million in compensation.
(c) The plaintiff carried out his duties as Comptroller-General of
Customs so incompetently that he failed to take an opportunity to end a
prosecution against the Midford company that had been commenced without
there being a proper basis for the initiation of those proceedings.
(d) The plaintiff carried out his duties as Comptroller-General of
Customs so incompetently that he failed to take an opportunity to end a
prosecution against the Midford company that resulted in the payment by
the Australian government of $25 million in compensation."

4. Paragraph 8 sets out a number of true innuendos, and commences;

"8. By reason of the facts and matters set out hereunder, the matter
complained of conveyed the imputations particularised in paragraph 7
hereof:"

5. The defendant submits firstly that the published matter is not capable of giving rise to the imputations set out in paragraph 7. That is a question of law, and there is no doubt that it may be determined on an interlocutory basis. Whether it is desirable that it should be so determined is another matter. In this Court defamation actions are tried by judge alone, and the reasons that make it convenient for points of law to be determined in interlocutory proceedings in jurisdictions where trial is by jury do not always apply in this Court.

6. This is particularly true of the question whether published material is capable of giving rise to particular innuendos in its natural and ordinary meaning, which is usually capable of being decided by the trial judge at the same time as deciding whether it does in fact give rise to them.

7. In this particular case, counsel for the defendant did not point out any respect in which the trial would be lengthened or the preparation for it made more difficult if the innuendos were not struck out. It was simply asserted that it would be embarrassing to be required to plead to the allegations if they were not capable of being supported. I am not persuaded that there would in fact be any such embarrassment to the defendant in this case.

8. I most respectfully agree, in this context, with the decision of Hunt J in Love v Mirror Newspapers (1980) 2 NSWLR 112. See especially pages 126 - 128. This application is not, in form, an application for the preliminary disposal of a point of law under O.29 r.2, but to strike out part of a pleading under O.29 r.4. But where, as here, the objection to the pleading raises a pure point of law, I think that the same discretionary considerations apply.

9. I note that exactly the same imputations as those attacked as false innuendos in paragraph 7 of the Statement of Claim are alleged as true innuendos in paragraph 8.

10. I think that there is a distinct possibility of embarrassment at the trial if I were to decide the objections one way and the trial judge were to form a different view at the trial, if there were no appeal from my decision.

11. Nevertheless, in deference to the arguments of counsel, I have considered the objections. I have read the published matter, without attempting to subject it to strict legal or textual analysis, but attempting to do so as much like an ordinary reasonable reader as I am capable, given the disadvantages of a legal education and many years of practice. I do not have to decide whether the imputations alleged do arise. All I can say is that, after reading the published material and then reading the imputations, I am not prepared to rule that any one of them is not capable of arising from the published material.

12. In the circumstances, I do not think any useful purpose would be served by my going back over each of them and attempting to justify each of them by cross referencing each to particular phrases and sentences in the published material.

13. The defendant is perfectly free to attempt to persuade the judge at the trial, either that the imputations alleged could not arise, or that they do not in fact arise.

14. The second objection to the pleading is that there is no allegation that the matter complained of conveyed the imputations "to those with knowledge of" the facts and matters set out in the paragraph as supporting the innuendo, with particulars of those persons.

15. I agree with the submission of counsel for the plaintiff that it is not necessary to include such a statement in the allegation.

16. In Vlasic v Federal Capital Press (1976) 9 ACTR 1 Blackburn J was considering the part played by extrinsic evidence in proving that the defamatory matter related to the plaintiff. I think that the same principles apply to the question whether the defamatory matter bore the imputations alleged, being true innuendos. At p.10 Blackburn J said, after quoting a statement made by Samuels JA in Steele v Mirror Newspapers (1974) 2 NSWLR 348 at 373;

"But he went on to point out that in Hough v London Express Newspaper
Ltd (1940) 2 KB 507; (1940) 3 All ER 31, it was held unnecessary to call
persons to say that they did understand the words in a defamatory sense,
provided that it was proved that there were people who might so
understand them. His Honour also referred to other authorities and then
expressly refrained from resolving the question.
Hough's Case concerned the question whether words were defamatory though
prima facie not so, but what is before me is the question of reference
to the plaintiff. There is a surprising variety in the words chosen by
various authorities to state the question of fact to be decided. Thus in
Knupffer's Case [1944] UKHL 1; (1944) AC 116 at 121; (1944) 1 All ER 495 at 497, Lord
Simon LC said: "...does the article, in fact, lead reasonable people,
who know the appellant, to the conclusion that it does refer to him?" In
the same case Lord Porter said (AC) at 124; (All ER) at 499: "The
question whether the words refer in fact to the plaintiff is a matter
for the jury...."
In Morgan's Case (1971) 1 WLR 1239 at 1253; (1971) 2 All ER 1156 at
1170, Lord Morris of Borth-y-Gest said: "It then became a matter of fact
for the jury to decide whether some readers (knowing certain
circumstances) would reasonably understand that the article referred to
the plaintiff." At (WLR) p 1252; (All ER) at 1170, his Lordship stated
the question of law - for the judge - as: "the question whether the jury
could decide that some readers (having knowledge of certain
circumstances) would reasonably understand the words as referring to the
plaintiff."
On this, Moffit P in Steele's Case (at 352) succinctly commented:
" 'Could' and 'would' precisely state the true question."
In Gatley, 7th ed, at par 294, the question is stated thus: "...it is a
question of fact for the jury whether the words were reasonably
understood to refer to the plaintiff."
In my opinion, the proper conclusion in principle is that it is not
essential that there should be a witness who gives evidence that he took
the words to refer to the plaintiff. From all the evidence, which may
not include that of such a witness, the jury may decide that there
probably were persons who did so. This conclusion is consistent with the
words I have quoted of Lord Morris, and of Moffit P, and with the law
applicable to the analogous question of the defamatory nature of the
words (Hough's Case, supra). I do not believe that the words of Lord
Simon, of Samuels JA, or of Gatley, are to be taken as meaning that if
the words complained of do not expressly refer to the plaintiff, and no
witness testifies to having taken them to refer to the plaintiff, the
plaintiff must fail."

17. I realise that the defendant is not seeking particulars of the witness or witnesses to be called by the plaintiff to prove knowledge of the facts in paragraph 8 (a) to (f).

18. It may also be necessary, as counsel for the plaintiff conceded, that the plaintiff should give sufficient particulars to enable the defendant to know the case that it will be required to meet, concerning the innuendos in paragraph 8.

19. But that does not mean that the pleading must allege that the words bore those meanings to any persons or class of persons. The allegation sufficiently alleges that the matter complained of conveyed the imputations to someone. The question for the tribunal of fact will be whether any person or persons probably did take from the published material the meaning or meanings alleged.

20. The application is dismissed. I order the defendant to pay the plaintiff's costs.