Forrest v Chlanda & Anor [2011] NTSC 67

PARTIES:	Forrest, David

	v

	Chlanda, Erwin

	and

	Erwin Chlanda Pty Ltd

TITLE OF COURT:	SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:	SUPREME COURT OF THE TERRITORY EXERCISING TERRITORY JURISDICTION

FILE NO:	8 of 2010 (2033396)

DELIVERED:	1 September 2011

HEARING DATES:	

JUDGMENT OF:	KELLY J

REPRESENTATION:

Counsel:
	Plaintiff:	J Stirk
	Defendants:	E Chlanda

Solicitors:
	Plaintiff:	Povey Stirk
	Defendants:	

Judgment category classification:	C
Judgment ID Number:	KEL11017
Number of pages:	13

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT ALICE SPRINGS

Forrest v Chlanda & Anor [2011] NTSC 67
No. 8 of 2010 (2033396)

	BETWEEN:

	DAVID FORREST
	Plaintiff

	AND:

	ERWIN CHLANDA
	First Defendant

	AND:

	ERWIN CHLANDA PTY LTD
		Second Defendant

CORAM:	KELLY J

DECISION ON APPLICATION TO STRIKE OUT PARAGRAPHS 7 AND 9 OF THE AMENDED DEFENCE
(Delivered 1 September 2011)

[1]	In the course of making objections to the defendants’ witness statements, the plaintiff made an oral application to strike out paragraphs 7 and 9 of the amended defence, and the reference to paragraph 7 in paragraph 8.  As the matter is on a tight timetable to the trial which starts on 5 September 2011, and solicitors for the plaintiff had given informal notice to the defendants of the intention to make the application a week beforehand, I agreed to hear the application at the time set down for the hearing of the objections.  No notice of the application was given to the Court.
[2]	The plaintiff argued the strike out application on three bases:
(a)	the defendants cannot, as a matter of law, plead and justify an alternative meaning to that pleaded by the plaintiff;
(b)	the meanings pleaded by the plaintiff at paragraphs 10(b) and (c) of the amended statement of claim are in fact conveyed by the article; and
(c)	the evidence sought to be adduced by the defendants is insufficient to prove that there are grounds to suspect fraud and raises no higher that a suggestion of negligence or incompetence.
[3]	A strike out application is not the occasion for deciding the factual issues raised in grounds (b) and (c) above.  Provided the meaning pleaded by the defendants is a possible meaning – ie one capable of arising from the article complained of, then the meaning in fact conveyed is a matter to be determined at trial.  Similarly, it is not appropriate on a strike out application to analyse the evidence with a view to seeing if the defendants’ case can be made out.  Provided the pleading of justification pleads facts which could justify the meaning pleaded by the defendants, the question of whether the evidence adduced by the defendants is sufficient to prove the pleaded facts is a matter for trial.
[4]	In relation to ground (a) above, the plaintiff relies on obiter dictum of Brennan CJ and McHugh J in Chakravarti v Advertiser Newspapers Ltd at paragraphs [6] to [8], concluding, at paragraph [8]:
“Under the modern system, articulating an alternative meaning could conceivably make explicit the ground for denying a pleaded imputation. But it would be only in such a case that a defendant's plea of a new defamatory meaning might be supportable as a plea which prevents the plaintiff being taken by surprise. A plea of justification, fair comment or qualified privilege in respect of an imputation not pleaded by the plaintiff does not plead a good defence. It is immaterial that the defendant can justify or otherwise defend the meaning which it attributes to the publication. In our view, the Polly Peck defence or practice contravenes the fundamental principles of common law pleadings. In general it raises a false issue which can only embarrass the fair trial of the actions.”
[5]	The plaintiff, in written submissions, submitted that this represents the law in Australia having received general approbation by intermediate appellate courts “except where the defendant’s meaning is not more than a shade or nuance of the meaning pleaded by the plaintiff”. 
[6]	The defendants rely on David Syme & Co Pty Ltd v Hore-Lacy, as analysed in an article by Professor Andrew T Kenyon; “Perfecting Polly Peck: Defences of Truth and Opinion in Defamation Law and Practice” [2007] Vol 29 Sydney Law Review 651. 
[7]	On the contention by the plaintiff in the present application that “the Polly Peck defence” is not available in Australia, intermediate appellate courts having given “general approbation” to the remarks of Brennan CJ and McHugh J in Chakravarti, Professor Kenyon says:
“It is correct that the Queensland Court of Appeal held the defence was not recognised under the state’s former defamation code.  However, that code had significant differences from the common law and based the cause of action on the plaintiff’s pleaded imputations.  This meant that it more closely resembled the former NSW position than it did the common law.  The former Queensland approach is not relevant to the common law and the uniform Defamation Acts.  Decisions in other Australian states – such as Victoria, South Australia and Western Australia – do recognise a form of Lucas-Box different meaning and Polly Peck common sting meaning.  The most influential decision on the issue in those states has been Hore-Lacy which modifies but does not remove these defences. Under the Hore-Lacy test, a defendant can defend a meaning that is not substantially different from, and not more injurious than, the plaintiff’s imputation.
Four Questions under the Hore-Lacy Approach
On the test set out in Hore-Lacy, a judge would ask four questions of a pleaded defence meaning.  (All except the third question also arise under the English common law approach to defence meanings.)  First, is the defence meaning capable of arising from the publication?  If the meaning is incapable of arising because, for example, only an unreasonable recipient who was ‘avid for scandal’ would think it was the publication’s meaning, then the defence meaning cannot be argued.  Second, does the defence meaning arise from a separate and distinct allegation in the publication, about which the plaintiff does not complain?  If it does, the defence meaning cannot be argued.  For instance, an allegation about not paying taxes cannot be answered under these defences by proving the truth of a separate and distinct allegation concerning murder.  Third, is the defence meaning not substantially different from and not more injurious than the plaintiff’s imputation?  This is the question added by Hore-Lacy to the assessment of defence meanings, and just what ‘not substantially different’ encompasses is considered further below.  Fourth, could proposed evidence establish the truth of the defence meaning or, more accurately, are proper particulars of fact provided capable of supporting the defence? …”
[references omitted] 
[8]	I do not think that Chakravarti is authority for the proposition that “the Polly Peck defence” is not available in Australia.  More particularly it is not authority for the proposition that the version of “the Polly Peck defence” relevant to this case (referred to by Professor Kenyon as “Lucas-Box different meaning”) in which the defendant pleads and seeks to justify a less serious imputation than that pleaded by the plaintiff, is not available in Australia.  The remarks of Brennan CJ and McHugh J relied on by the plaintiff were not just “not adopted” by the other members of the Court, they are not supported by the judgment of Gaudron and Gummow JJ or that of Kirby J.   
[9]	One of the issues in Chakravarti was whether the article complained of bore the meanings pleaded in the statement of claim and, if not, whether it bore some other defamatory meaning upon which the plaintiff could rely – that is to say, how strictly should the plaintiff be held to the meanings pleaded in the statement of claim.  Gaudron and Gummow JJ noted that that issue arose in a context in which the defendant had pleaded, in relation to that article, that it did not bear either of the meanings set out in the statement of claim but had a less injurious meaning and that, so understood, it was true in substance and in fact, and said:
“Although there is no requirement in that regard, it is now common practice for a plaintiff to specify in his or her Statement of Claim the meaning or meanings which, as a matter of ordinary language, are said to be conveyed by the material upon which he or she sues. Whilst the pleading of different shades of meaning is not to be encouraged, distinct or specific meanings should be pleaded and one indication of distinctness or specificity "would be whether the justification would be substantially different. And since the decision in Lucas-Box v News Group Newspapers Ltd, a defendant who seeks to justify a different meaning has generally been required to plead or give particulars of that other meaning.”   
[references omitted] 
[10]	At paragraph [53] their Honours set out the position as it evolved in the English authorities, including Polly Peck. They do not disapprove of Polly Peck; rather, in the immediately following paragraph, their Honours remark:
“The Australian authorities follow much the same pattern as that to be found in the United Kingdom.”
[11]	The pattern discerned was a tendency in the cases to confine the parties to the pleaded meanings (and in doing so require defendants to plead alternative meanings) followed by later cases which held that the practice of pleading some specific meaning or meanings could not alter the position at common law that the judge decided what meanings were fairly open and left to the jury all such meanings and that, therefore “neither the judge nor the jury were ... confined to the meanings asserted by the parties".
[12]	Gaudron and Gummow JJ concluded, (at paragraph [60]):
“As a general rule, there will be no disadvantage in allowing a plaintiff to rely on meanings which are comprehended in, or are less injurious than the meaning pleaded in his or her Statement of Claim. So, too, there will generally be no disadvantage in permitting reliance on a meaning which is simply a variant of the meaning pleaded. On the other hand, there may be disadvantage if a plaintiff is allowed to rely on a substantially different meaning or, even, a meaning which focuses on some different factual basis. Particularly is that so if the defendant has pleaded justification or, as in this case, justification of an alternative meaning. However, the question whether disadvantage will or may result is one to be answered having regard to all the circumstances of the case, including the material which is said to be defamatory and the issues in the trial, and not simply by reference to the pleadings.” 
[emphasis added]
[13]	There was no suggestion by their Honours that it was not open to the defendant to plead justification of an alternative meaning.  
[14]	In paragraph [139] of his judgment in Chakravarti, Kirby J discussed the principles involved in the pleading of imputations.  He pointed out that: 
“In some jurisdictions (eg New South Wales) each imputation upon which a plaintiff relies in a defamation action is no longer a particular of what is to be put forward at the trial. It is a separate cause of action to which the publisher must separately plead.  In such a statutory context, the need for exact precision in the statement of each cause of action is obvious and essential………… Without the clear authority of statute, this approach should not be extended to jurisdictions which have not so far embraced it.  South Australia has not done so.  That State has no legislation equivalent to the New South Wales Act.  Its requirements as to the pleading of imputations must therefore be ascertained from general rules governing particularity in the pleading of civil claims as elaborated by principles of the common law generally accepted in defamation pleadings.
……
“In jurisdictions where this matter is not regulated by statute, courts have commonly exercised a measure of discretion and flexibility where the essence of the sting of the defamation complained of at the end of the trial does not exactly, or entirely, coincide with the imputations which were pleaded. ……………. I agree, in this regard, with the comments of the Full Court of the Supreme Court of Victoria in National Mutual Life v GTV. Speaking with approval of the now common practice of pleading "false innuendos", that Court said: 
"But the practice did not, and in our opinion could not, alter the position at law that the meaning of the words was ultimately a question for the jury, and that the jury must be at large in finding the true meaning amongst such possible meanings as were left to them by the judge, and that the judge was not bound to confine the jury to the false innuendos asserted by the plaintiff." 
Where, as in South Australia, there is no jury trial, the entitlement of the judge to consider the meaning of the entire matter complained of, notwithstanding the pleaded imputations, is even more clear.”
[references omitted] 
[15]	This accords with the approach taken by Gaudron and Gummow JJ.  Once it is accepted that the tribunal of fact is entitled “to consider the meaning of the entire matter complained of, notwithstanding the pleaded imputations”, then the rationale for a strict pleading approach, which the selected portion of the judgment of Brennan CJ and McHugh J in Chakravarti seems to endorse, disappears. 
[16]	It seems to me that the position in the Northern Territory is as stated by Ormiston JA and Charles JA in Hore-Lacy, consistently with the positions of Gaudron and Gummow JJ and Kirby J in Chakravarti.
[17]	The plaintiff ought to be kept within the broad confines of the pleaded meaning, although allowing the tribunal of fact to determine the precise imputations for itself.  The defendants should be permitted to plead that the words complained of have a not more serious and not substantially different meaning which the defendants may justify on the facts, provided the meaning pleaded by the defendants is capable of arising from the matter complained of, and that meaning does not arise from a separate and distinct allegation about which the plaintiff does not complain. 
[18]	Relying on Hore-Lacy and Chakravarti, Professor Kenyon contends that under the common law and the uniform Defamation Acts, imputations of guilt and suspicion should not be seen as substantially different, unlike the position under the old 1974 New South Wales Act.  Such a distinction made sense under the old New South Wales Act, as the cause of action was based on making “an imputation defamatory of another person” and each imputation would therefore need to be separately pleaded.  There would appear to be no reason in logic to make such a distinction at common law or under the NT Defamation Act where the tribunal of fact is not confined to the meaning pleaded by the plaintiff. 
[19]	In this case, the plaintiff has not relied on particular words in the article complained of as bearing the pleaded meanings; the whole article is set out in the amended statement of claim.  The imputations pleaded by the plaintiff in paragraph 10 of the amended statement of claim are that:
(a)	the plaintiff has behaved in such a way as principal of First National Real Estate Framptons as to deserve to be stood aside as southern region representative of the Real Estate Institute of Northern Territory Inc;
(b)	the plaintiff is suspected by police of having engaged in fraud as principal of First National Real Estate Framptons;
(c)	the plaintiff has conducted the business of First National Real Estate Framptons in such a way as to allow it to be suspected by police of engaging in fraud.
[20]	The defendants have pleaded in paragraph 7 that rather than conveying either of the imputations set out in sub-paragraphs (b) and (c) of paragraph 10 of the amended statement of claim, the article in its natural and ordinary meaning conveyed the following imputation: that there are grounds to inquire into the possibility of fraud on the part of Framptons First National Real Estate, of which the plaintiff is one of the principals. 
[21]	I am satisfied that the meaning pleaded by the defendant in paragraph 7 is a meaning capable of arising from that article.  Whether that is in fact the natural and ordinary meaning of the article is a matter to be determined at trial.
[22]	It also appears to me that the meaning pleaded by the defendants in paragraph 7 does not arise from a separate and distinct allegation in the article about which the plaintiff does not complain; and the meaning attributed to the article by the defence is not substantially different from that pleaded by the plaintiff in paragraphs 10(b) and (c) – and not more injurious.   
[23]	On the face of it, the imputation pleaded in paragraph 10(b) of the amended statement of claim, that the plaintiff “is suspected by police of having engaged in fraud as principal of First National Real Estate Framptons” does not say anything about the plaintiff at all – it is a statement about the police.  However, the plaintiff in written submissions has submitted that the imputations pleaded by the plaintiff “are clearly level two imputations of suspicion on reasonable grounds”.  I agree that a statement that a person is suspected by police of having engaged in fraud normally carries with it the implication that there are grounds to suspect that the person is guilty of fraud.  I do not see that as substantially different from the meaning pleaded in paragraph 7 of the amended defence that there are grounds to investigate the possibility of fraud by Framptons, of which the plaintiff is a principal.  The defendants’ pleaded meaning is simply a related, but less serious imputation.  Importantly, it seems to me that the two meanings are sufficiently similar that, if the court were to find as a fact that the article bore the meaning pleaded by the defendants in paragraph 7, and the defendants failed to justify that meaning (or establish one of the other defences), the plaintiff would be entitled to judgment on the existing state of the pleadings. 
[24]	Particulars of the facts supporting the plea of justification of that meaning have been given in paragraph 9 of the amended defence and, although I am not convinced that all of the facts pleaded in paragraph 9 are material to the plea of justification of the meaning pleaded by the defendants (namely that there are grounds to enquire into the possibility of fraud on the part of Framptons, of which the plaintiff is a principal) the plaintiff has not applied to strike out any irrelevant parts of paragraph 9. 
[25]	The application to strike out the whole of paragraphs 7 and 9 and that part of paragraph 8 of the amended defence which refers to paragraph 7, is dismissed.