MA CHING KWAN v JOHN FAIRFAX PUBLICATIONS PTY LTD [1998] NSWCA 282

MA CHING KWAN v JOHN FAIRFAX PUBLICATIONS PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, MEAGHER and HANDLEY JJA

14 July 1998, 30 July 1998

DEFAMATION — PLEADINGS — IMPUTATIONS — AMBIGUITY — "WRONGFUL" — CAPACITY OF PUBLICATION COMPLAINED OF TO CONVEY PLEADED IMPUTATIONS

The defendant appealed by leave from a decision pursuant to SCR Pt31 that imputations pleaded by the plaintiffs were capable of being conveyed by the matter complained of.

HELD: (1) Imputations containing the word "wrongfully" should be struck out under SCR Pt15, r26(1)(b). Amalgamated Television Services Ltd v Marsden (1998) 43 NSWLR 158; Drummoyne MC vy Australian Broadcasting Corporation (1990) 21 NSWLR 135; Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 applied. (2) An imputation that the first plaintiff was "the kind of person" who would act for a certain purpose did not differ in substance from an imputation that he had already acted for that purpose where the matter complained of stated unequivocally that this had already occurred. Accordingly it should be struck out under SCR Pt67, r11(3). (3) An imputation that the second plaintiff, a company controlled by the first plaintiff, "was prepared to assist" the first plaintiff was not reasonably capable of being conveyed by the matter complained of where this made it clear that the first plaintiff controlled the second plaintiff.

Mason P I agree with Handley JA. Meagher JA I agree with Handley JA.

Handley JA These are appeals by leave of this Court from two decisions of Levine J that imputations did not disclose causes of action reasonably capable of arising from the article complained of in the Financial Review of 17 January 1994.

In the first decision on 30 November 1995 the Judge held that imputations in the amended statement of claim did not arise but he granted leave to amend. The further amended statement of claim of 14 December 1995 was then filed but the Judge held that the re-pleaded imputations had not overcome the difficulties identified in his earlier decision and still did not disclose causes of action which could go to the jury. The appellants obtained leave to appeal against this decision, and presumably to avoid a res judicata objection sought and obtained leave to appeal out of time from the earlier decision. This was not necessary because the issues were not the same and the earlier decision was interlocutory.

Mr Sackar QC for the appellants did not press the appeal from the first decision, and Mr Nicholas QC for the respondent did not contend that the earlier order, unless reversed, created a res judicata which determined the fate of the appeal from the second decision.

The publication complained of stated that the first appellant who controlled the Oriental Daily News, a mass circulation Chinese newspaper in Hong Kong, was about to launch a new English language newspaper (the Eastern Express) in Hong Kong, that his uncle had been arrested in Hong Kong in 1977 on drug trafficking allegations, and that in 1978 his father and uncle "the Oriental Daily's original owners, exiled themselves to Nationalist Taiwan... lest they fall foul of Hong Kong authorities seeking them on suspicion of drug trafficking". The article continued:

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"Against this backdrop, Hong Kong abounds with rumours as to why the E E (the Eastern Express) has appeared, ranging from its provision of a liberal voice to arranging an amnesty for the Ma patriarchs".

The publication did not identify the second appellant or suggest that the Eastern Express would be published by a different company from that publishing the Oriental Daily News.

The re-pleaded imputations in respect of the first appellant in paraS of the further amended statement of claim were:

"(a) The first plaintiff established a newspaper for the purpose of wrongfully exerting pressure on authorities not to pursue drug trafficking allegations against his father and uncle.

(b) The first plaintiff abused his position of wealth and influence to establish a newspaper for the purpose of exerting pressure on authorities not to pursue drug trafficking allegations against his father and uncle;

(c) The first plaintiff was the kind of person who would abuse his position of wealth and influence to establish a newspaper for the purpose of exerting pressure on authorities not to pursue drug trafficking allegations against his father and uncle".

The re-pleaded imputations in para6 in respect of the second appellant, a Hong Kong corporation, and a subsidiary in the group headed by Oriental Press Group Ltd, of which the first appellant was said in the statement of claim to be Chairman, were:

"(a) The second plaintiff assisted the first plaintiff to establish the second plaintiff's newspaper for the purpose of wrongfully exerting pressure on authorities not to pursue drug trafficking allegations against the first plaintiff's father and uncle.

(b) The second plaintiff was prepared to assist the first plaintiff to establish the second plaintiff's newspaper for the purpose of wrongfully exerting pressure on authorities not to pursue drug trafficking allegations against the first plaintiff's father and uncle.

(c) The second plaintiff was prepared to assist the first plaintiff to abuse his position of wealth and influence by establishing the second plaintiff's newspaper for the purpose of exerting pressure on authorities not to pursue drug trafficking allegations against the first plaintiff's father and uncle".

The respondent had also raised pleading objections but the Judge dealt with the defendant's challenge to the re-pleaded imputations as a matter of substance. He said:

"".. it is contended that the article is capable of being understood as conveying a notion of 'lack of rightfulness' and thus wrongdoing in some moral sense founded upon the exercise by the plaintiffs of their immense power and wealth to establish a newspaper to bring pressure in some way to permit the patriarchy to be back together again in the face of the allegations relating to drug trafficking. It was argued that it was morally wrong because it is arguably open that to use one's status and one's wealth merely because one has it and merely because it is one's father, and not because the father is innocent, then it is open to say it is morally wrong because it is an abuse of that wealth and status. The fact that it might be morally commendable to take steps to bring back the patriarchy goes, it is said, to the resolution of this matter by permitting that imputation to go to the jury. The availability of competing views as to whether it is 'morally wrong', or 'morally commendable' in the end does not resolve the problem when the first component of it (morally wrong) is not in fact pleaded in the imputation. What

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has to be determined is whether the matter complained of is capable of conveying that which has been pleaded namely 'wrongfully exerting pressure', 'abusing his position of wealth and influence', 'the kind of person who would abuse his position of wealth and influence'.

For the defendant it is argued in effect that once one starts talking about 'moral unrightfulness' one is departing from the imputations as pleaded... the plaintiff is in effect 'stuck' with the position that there is nothing in the matter complained of which to the ordinary reasonable reader would give rise to any notion of 'impropriety', 'abuse', (which incorporates impropriety) or, if it were pleaded, a notion of 'moral unrightfulness'."

The respondent sought to raise its pleading objections in this Court, but had not filed a notice of contention. Mr Sackar did not claim that the appellants had been prejudiced and both counsel urged the Court to decide all questions rather than remit any to the Judge, or leave them open for argument on a further application in the Defamation List. The Court should take this course.

The imputation pleaded in para5(a) is that the first appellant established the newspaper for the purpose of "wrongfully exerting pressure" on the authorities. The term "wrongful" is inherently ambiguous. The imputation does not indicate why the purpose referred to was wrongful and the possibilities range from breach of the law, criminal or civil, to breach of some moral or ethical standard. For this reason para5(a) fails to define the imputation with sufficient precision and should be struck out under SCR Pt15, r26(1)(b). See Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158, 161-3; Drummoyne MC v Australian Broadcasting Corporation (1990) 21 NSWLR 135 ("corrupt" ambiguous); and Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260, 271 ("improper" ambiguous).

The word "wrongful" does not appear in imputation 5(b), which is otherwise in the same terms as imputation 5(a). Imputation 5(c) is similar but the assertion that the first appellant had abused his position to establish a newspaper for the purpose referred to is replaced by the assertion that he "was the kind of person" who would do this.

Mr Nicholas submitted that an imputation that the first appellant "was the kind of person" who would establish the newspaper for the stated purpose does not differ in substance from an imputation that he had actually established the newspaper for that purpose. This is correct where the publication asserts that the relevant act had already occurred. Imputation 5(c) should therefore be struck out under SCR Pt67, r11(3).

Imputation 5(b) is not without its difficulties. The statement that the father and uncle had exiled themselves for the purpose stated might be capable of conveying the imputation that they were guilty of drug trafficking, particularly in the case of the uncle who was stated to have been arrested on such charges. Flight from justice is an implied admission by conduct, and evidence of such flight is admissible in criminal proceedings although not conclusive. See Hatch v Lewis (1861) 2 F & F 468, 479, (175 ER 1145, 1150); R v Gay (1976) VR 577, 586.

Imputation 5(b) does not plead that the first appellant abused his position of wealth and influence because his purpose was to secure an amnesty for persons either guilty of drug trafficking, or reasonably suspected of such guilt. The imputation of abuse appears to depend on the use of wealth and influence to obtain an amnesty for close family members.

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"Abuse" like "wrongful" and "improper" is a word of uncertain meaning depending on its context. In my judgment there is a real risk that this uncertainty would prove embarrassing at any trial. However during argument Mr Sackar agreed that this imputation should be understood as containing its own dictionary, defining the abuse alleged to have been conveyed by the publication. It therefore meant that the first plaintiff "abused his position of wealth and influence because he established a newspaper" for the stated purpose. The imputation so understood is not uncertain.

The first question then is whether the publication was reasonably capable of conveying that imputation. It stated that the first plaintiff, a man of wealth and influence, had established the Eastern Express. The rumoured reasons for doing so included "arranging an amnesty for the Ma patriarchs".

The use of a newspaper to "arrange" an amnesty would involve, either by implication or inference, its use to marshal public opinion in support of that amnesty. This would then exert pressure on the relevant authorities. In my opinion therefore that part of the imputation, which refers to "the purpose of exerting pressure on authorities", is supported by the publication.

The publication does not identify the person or persons with whom it is hoped to arrange the amnesty and the Judge thought there was some difficulty about this. However an amnesty would have to be arranged with the person responsible for major criminal prosecutions or someone more senior in government who was in a position to direct or influence the decisions of that person. There is a necessary implication that it would be arranged with appropriate persons, and the imputation is therefore supported by the publication.

The remaining question is whether the imputation, so construed, is reasonably capable of being defamatory. It states in substance that he intended to abuse his position of wealth and influence as the controller of a newspaper to secure a benefit for close family members which would enable them to avoid investigation, and perhaps trial on drug trafficking allegations. People without wealth and influence could not obtain such a benefit in this way.

In my opinion, it would be open to a jury to find that the ordinary reasonable reader would think less of a newspaper proprietor who would use his power and influence to obtain unmerited favours from government officials for members of his close family. The ordinary reasonable reader may be more inclined to take that view when the favours would enable those persons to avoid the normal operation of the criminal justice system for allegations and charges of drug trafficking. However a jury might think that this is just how such a reader would expect the proprietor to behave, and that adherence to a higher standard lacked reality in such a case. Whether the imputation, if found, was defamatory is therefore a jury question. I would uphold the appeal in relation to this imputation, but direct that it be amended to reflect the meaning accepted by Mr Sackar.

The remaining issues concern the imputations pleaded by the second appellant. Imputations 6(a) and 6(b) include assertions that the newspaper was established for the purpose of "wrongfully" exerting pressure on the authorities. They should also be struck out pursuant to SCR Pt15, r26(1)(b).

Imputation 6(c) corresponds with imputation 5(b) and asserts that the company "was prepared to assist" the first plaintiff to abuse his position for the purpose referred to. This imports an independent decision by the second plaintiff, but this is inconsistent with the publication which asserts or implies that the Eastern Express is controlled by the first plaintiff. It follows that the publication is not reasonably capable of conveying this imputation. There are other difficulties but

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these were not argued and need not be considered. Compare New South Wales Aboriginal Land Council v Jones (CA, 17/3/98, not yet reported).

The first appellant has therefore saved one imputation, but only because it was treated as amended so as to clarify its meaning. In my opinion therefore the appellants should pay the respondent's costs of these appeals.

The following orders should be made.

(1) Appeal allowed in part;

(2) Order of Levine J of 7 June 1996 that imputation 5(b) in the further amended statement of claim not go to the jury set aside;

(3) Declare that imputation 5(b) discloses a cause of action reasonably arising from the publication complained of;

(4) Direct the first appellant to amend imputation 5(b) in accordance with the reasons of this Court;

(5) Appeals otherwise dismissed;

(6) Appellants to pay the respondent's costs of both appeals.

Counsel for the appellant: J R Sackar QC/L McCallum Solicitors for the appellant: Clayton Utz Counsel for the respondent: W H Nicholas QC

Solicitors for the respondent: Freehill Hollingdale & Page