Federal Court of Australia

Murdoch v Private Media Pty Ltd (No 5) [2023] FCA 440

ORDERS

THE COURT ORDERS THAT:

1.    The time for the respondents to file their defence to the amended statement of claim be extended to 4.00pm on 11 April 2023.

2.    The time for the applicant to file and serve any reply to the respondents’ defence be extended to 4.00pm on 2 May 2023.

3.    The first, second and third respondents be granted leave, pursuant to r 26.11 of the Federal Court Rules 2011 (Cth), in respect of the withdrawal of the admissions at 27.22, 27.29, 27.32, 28.2, 28.10, 38, 39, 40 and 41 of the defence.

4.    The applicant’s interlocutory application dated 23 March 2023 be dismissed.

5.    The costs of both the respondents’ interlocutory application of 7 March 2023 and the applicant’s interlocutory application of 23 March 2023 be reserved and be the subject of further submissions in due course.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

WIGNEY J:

1    This is the latest instalment of interlocutory disputation in the defamation proceeding between Lachlan Murdoch and Private Media Pty Ltd and its officers and employees. As with previous judgments, I will refer to the respondents collectively as Crikey unless it is necessary to delineate between them. There are two interlocutory applications before the Court: first, an application by Crikey for an extension of time in which to file its defence; and second, an application by Mr Murdoch for all questions of “defamatory meaning” to be determined separately to, and in advance of, any question of liability.

2    It is convenient to first deal with Crikey’s application for an extension of time in which to file its defence.

EXTENSION OF TIME TO FILE A DEFENCE

3    The need for Crikey to seek an extension of time to file its defence arose in the following way. On 30 January 2023, on Mr Murdoch’s application, I granted him leave to amend his originating application and statement of claim, as well as leave to join two additional officers of Private Media – Mr Eric Beecher and Mr William Hayward – as the fourth and fifth respondents respectively. The main amendment to the originating application and statement of claim was the addition of a new cause of action in respect of the “reposting” of the original article which was alleged to contain the defamatory imputations: see Murdoch v Private Media Pty Ltd (No 4) [2023] FCA 114.

4    On 2 February 2023, the Court ordered Crikey to file and serve a defence to Mr Murdoch’s amended statement of claim on or before 28 February 2023. It is perhaps worth noting that Mr Murdoch proposed that the order concerning the filing of Crikey’s defence provide, in effect, that any changes to Crikey’s existing defence be limited to responding to the amendments to the statement of claim. The orders were ultimately not made in those terms.

5    On 24 February 2023, the Court made consent orders varying the orders made on 2 February 2023 so as to permit Crikey to file and serve its defence on or before 7 March 2023.

6    On 6 March 2023, Crikey’s solicitor wrote to Mr Murdoch’s solicitor and requested that Mr Murdoch consent to a further two weeks’ extension of time in which to file its defence. The reasons given for the request was that Crikey needed further time to consider and obtain legal advice in respect of further information and material that had come to light in recent times. That information and material, which had been disclosed and made public in the context of defamation proceedings in the United States, was said to be potentially relevant to Crikey’s defence. While the defamation proceedings in the United States were not directly related to this proceeding, the information disclosed in the context of those proceedings would appear, at first blush at least, to be relevant to some of the facts in issue in this proceeding.

7    On 7 March 2023, Mr Murdoch’s solicitor advised Crikey’s solicitor that Mr Murdoch did not consent to any further extension of time. Crikey filed its interlocutory application seeking an extension of time on 7 March 2023.

8    Crikey adduced affidavit evidence from its solicitor, Mr Michael Bradley, which explained the nature and significance of the new information and material. According to Mr Bradley, he did not have access to the relevant material until 27 February and 8 March 2023. The material was voluminous and no doubt required some time to digest.

Relevant principles

9    The Court has a discretion to extend any time that has been fixed by order of the Court before or after that time has expired, and irrespective of whether an application for an extension of time was made before the time expired: see r 1.39 of the Federal Court Rules 2011 (Cth). The discretion arising under r 1.39 is a broad discretion constrained only by the purpose for which it was conferred, that being to relieve against injustice, and the requirement that it be exercised judicially: see Pfizer Ireland Pharmaceuticals v Samsung Bioepis Au Pty Ltd [2017] FCA 573 at [9] and Skinner v Commonwealth of Australia [2012] FCA 1194 at [9]-[11].

10    In exercising the discretion, the Court is also bound to comply with s 37M of the Federal Court of Australia Act 1976 (Cth) and exercise its powers in a way which best promotes the overarching purpose of the civil practice and procedure provisions. In that regard, it is to be borne in mind that “[t]he achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants”: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [51].

11    Parties seeking an extension of time must generally advance a reasonable explanation for the delay and the need for the extension of time: Skinner at [9]-[10]; Hawkins v Kingsway Group Ltd [2009] FCA 1073 at [3]. Other relevant considerations in respect of the exercise of the discretion include the length of the extension sought, whether the delay and extension would prejudice the other party or parties, and the history of the proceedings generally: Skinner at [11].

Mr Murdoch’s opposition to an extension of time

12    Mr Murdoch’s opposition to Crikey’s application for an extension of time was primarily based on considerations that extend well beyond the question of delay and other general case management considerations. He did, however, quibble to an extent with Mr Bradley’s evidence concerning the reasons for the delay and the point in time at which Mr Bradley and Crikey were able to access the new material. He also suggested that the application for an extension of time may cause him some prejudice because the new material was voluminous. He submitted that if Crikey were permitted to rely on the new material in its defence, it may ultimately be necessary to again vacate the trial given the issues to which that new material would inevitably give rise. The trial is currently listed to commence in October 2023.

13    Those considerations may be dealt with shortly. I am satisfied that Crikey has advanced a reasonable explanation for the delay. I largely accept Mr Bradley’s evidence in that regard, including his evidence as to when he was realistically able to access and digest the new material. I am also satisfied that, in the context of the history of the litigation generally, the delay was not so extensive as to cause any material prejudice to Mr Murdoch. I am not persuaded that the delay occasioned by the late filing of the defence is likely to result in the need to vacate the existing October trial date.

14    Mr Murdoch’s objection to Crikey’s application to extend the time in which it can file its defence focussed primarily on what he maintained were a number of manifest defects or deficiencies in the pleading of the defence that Crikey proposed to file. Crikey had provided Mr Murdoch with a draft of its proposed defence. That draft defence was the focus of much of the debate.

15    Mr Murdoch submitted that there were at least five material defects or deficiencies in the draft defence.

16    First, the draft defence included a series of new facts which were said to be relevant to Crikey’s public interest defence. Those facts were mostly facts which had apparently been gleaned from the recently disclosed material arising from or relating to the defamation proceedings in the United States. Mr Murdoch submitted, in essence, that the new facts gleaned from that material were not relevant to Crikey’s public interest defence because Mr Murdoch now admitted that the Crikey article in question concerned an issue of public interest. He also suggested that Crikey knew, or ought to have known, many of those facts and therefore could or should have included them in its original defence.

17    Second, the draft defence included a new contextual truth defence in respect of the reposted article. Mr Murdoch contended that the contextual truth defence was hopelessly defective and futile because the alleged contextual imputation was clearly not capable of being carried and clearly not capable of having the required “statutory effect”.

18    Third, the draft defence included new particulars concerning mitigation of damages which Mr Murdoch contended were vague and in some respects meaningless.

19    Fourth, the draft defence included paragraphs that were not responsive to the amendments made to Mr Murdoch’s statement of claim. Mr Murdoch submitted, in effect, that Crikey’s defence to the amended statement of claim was not permitted to be at large and that Crikey should be restricted to including new paragraphs which directly responded to the amendments to the statement of claim.

20    Fifth, the draft defence included the withdrawal of deemed admissions made in Crikey’s original defence.

21    Needless to say, Crikey disputed that the draft defence, or any part of it, was deficient, defective or futile for any of the reasons advanced by Mr Murdoch.

Should an extension of time be granted in the circumstances?

22    There may be cases where an application for an extension of time to file a defence may be refused because the defence that is to be filed contains defects which would, if the defence were filed, be liable to be struck out: see, for example, Edwards v Nine Network Australia Pty Ltd [2022] FCA 509. In such cases, it may be more expeditious, less expensive and more efficient to address and resolve the pleading issues at the time of the application for the extension of time, rather than subsequently in the context of a strike-out application. In my view, however, this is not such a case.

23    I am not persuaded that it would be more expeditious, economical or efficient to finally resolve Mr Murdoch’s many and varied complaints concerning Crikey’s draft defence in the context of its application for an extension of time. Indeed, in my view, were I to adopt the position advocated by Mr Murdoch and refuse to extend the time for Crikey to file its defence, that would almost inevitably lead to further and potentially endless interlocutory disputes. If, on the one hand, I simply refused to grant an extension of time because of what were said to be deficiencies in the draft defence, Crikey would almost inevitably file a further application for an extension of time based on a different draft defence. That could potentially give rise to a further round of arguments in respect of the new draft of the defence. If, on the other hand, I granted an extension of time to file a defence, but only a defence which did not include some or all of the offending paragraphs, it is likely that Crikey would subsequently file an application to amend its defence to remedy the deficiencies.

24    The point that should perhaps be emphasised in this context is that the order sought by Crikey is for an extension of time to file a defence. Crikey did not apply for an order permitting it to file a particular defence within the extended period. Nor was it required to do so, though it did furnish a draft of the defence that it proposed to file.

25    For the reasons essentially already given, Crikey has adequately explained its delay in filing its defence. I am also satisfied that Mr Murdoch would not, in all the circumstances, be prejudiced by the relatively short delay occasioned by Crikey’s inability to file its defence within the time previously ordered. The appropriate order to make in those circumstances is to extend the time within which Crikey can file a defence.

26    That is not to say that, if the defence which Crikey in due course files is in the form of the draft defence which has been furnished to date, Mr Murdoch will in any way be precluded from applying to strike out that defence. Nor should anything said in this judgment necessarily be construed as the Court giving its imprimatur in respect of every aspect of the draft defence that has been furnished to date. The main point, for present purposes, is that the defence that Crikey ultimately files may not be the same as the draft defence. Crikey may well choose to take on board some of the criticisms that Mr Murdoch has levelled at the draft defence and file a defence which addresses some or all of those criticisms. Thus, there may be no occasion for Mr Murdoch to move to strike out the defence ultimately filed by Crikey. I am not, in all the circumstances, persuaded that Crikey’s application for an extension of time should be approached as if it were a de facto strike-out application.

27    As for Mr Murdoch’s reliance on the decision in Edwards, this case is distinguishable from Edwards in at least two important ways.

28    First, in Edwards, the respondent who was in default in respect of the filing of its defence failed to proffer any reasonable explanation for its default. The same cannot be said in respect of Crikey’s failure to file its defence within time.

29    Second, the pleading issues or defects that were raised and addressed in the context of the extension of time application in Edwards were relatively straightforward and easy to resolve. The same cannot be said to be the case here. Despite the colourful and emphatic terms in which Mr Murdoch’s counsel derided parts of Crikey’s draft defence, some of the pleading issues that have been raised are difficult, complex and substantive. I am not persuaded that the issues are as straightforward as counsel for Mr Murdoch would have it.

30    In my view, it is both inappropriate and problematic to deal with the pleading issues in the context of Crikey’s extension of time application. In those circumstances, I do not propose to dwell at length on the alleged defects in the draft defence. It suffices to make the following brief observations.

31    First, as for Mr Murdoch’s complaint concerning the pleading of additional facts in respect of the public interest defence, I am not satisfied that Crikey was previously aware of those facts and therefore could, or should, have included them in its initial defence. In any event, that complaint cannot apply in respect of the fourth and fifth respondents.

32    More significantly, I am not, at this point at least, persuaded that the mere fact that Mr Murdoch has now admitted that the Crikey article in question concerned a matter of public interest necessarily means that the additional facts are irrelevant to any fact in issue and cannot be included in the pleading. It would appear from the draft defence that Crikey also relies on some of the additional facts in support of its so-called “Lange defence”, its defence of contextual truth and in mitigation of damages. I am therefore not persuaded at this point that the additional facts would, if included in the defence which is ultimately filed, be liable to be struck out.

33    I am also not satisfied that the pleading of the additional facts will necessarily mean that the October trial date will have to be vacated. It may perhaps be accepted that some of the additional facts may raise some new issues of substance if they are seriously in contest. It is, however, difficult to see, at first blush at least, that there could be any serious dispute about many of the additional facts, which appear to be largely matters of public knowledge. It follows that the fate of the October trial may well depend on the approach taken by Mr Murdoch in his reply to the defence.

34    Second, as for the pleading of the new contextual truth defence in the draft defence, there may, as Mr Murdoch submitted, perhaps be an element of ambiguity in the use of the word “culpable” in the pleaded contextual imputation. It may be necessary for Crikey to provide further particulars to clarify the meaning of “culpable”, as used in the pleaded contextual imputation. Does it, for example, refer to moral or ethical blameworthiness, or legal culpability? Crikey should, perhaps, reflect on this before finalising its defence.

35    There may turn out to be other issues with the proposed contextual truth defence as currently pleaded in the draft defence. There may, for example, be an issue as to whether the alleged contextual imputation was conveyed by the reposted article. There may also be an issue as to whether the contextual imputation, if conveyed and found to be substantially true, “swamped” the harm to Mr Murdoch’s reputation caused by the other imputations found to have been conveyed by the article: cf s 26(1)(b) of the Defamation Act 2005 (NSW). Crikey may also ultimately have difficulty in proving the substantial truth of the contextual imputation.

36    These are potentially difficult issues. I am not, however, at this point at least, persuaded that they are strike-out points. At first blush they appear to be issues the resolution of which should occur at the final hearing. I am not persuaded at this point that the proposed contextual truth defence is manifestly hopeless, or that Crikey should be precluded from filing a defence including a contextual truth defence along the lines of that proposed. In saying that, I do not intend to preclude Mr Murdoch from bringing an application to strike-out the contextual truth defence if it appears in the filed defence in its current form.

37    Third, as for the additional paragraphs in the draft defence concerning the mitigation of damages, there appears to be some force in Mr Murdoch’s submissions concerning the deficiencies or defects in paragraphs 37.4 and 37.5 of the draft defence. In relation to paragraph 37.4, this pleading appears to be at odds with the established principles concerning the proof of reputation in defamation cases. It would also appear that that paragraph is not properly particularised. What exactly are the facts in the published documents referred to in paragraph 37.4 which are said to be relevant to the mitigation of damages? Crikey should reflect on Mr Murdoch’s submissions concerning paragraph 37.4 and, at the very least, include in the defence proper particulars as to how the publication of the matters identified could possibly bear on Mr Murdoch’s reputation at the relevant time.

38    As for paragraph 37.5, absent further particularisation, that paragraph would be liable to be struck out: see Edwards at [18]-[20] and [46]-[47]. What are the particular “facts, matters and circumstances” that may be proved in the context of Crikey’s defence that may bear on the damage suffered by Mr Murdoch if his claim is made out. In the absence of further particulars, the plea in paragraph 37.5 is effectively meaningless.

39    Fourth, I am not persuaded that parts of the draft defence would be liable to be struck out on the basis that they are not responsive to the amendments that Mr Murdoch made to his statement of claim. In any event, that criticism cannot apply in respect of the fourth and fifth respondents, who are yet to file a defence. Moreover, if it came to it, I would be inclined to grant the first to third respondents leave to include the allegedly unresponsive paragraphs in the defence given that the facts pleaded in those paragraphs only became apparent to Crikey as a result of the recent disclosure of material from the defamation proceedings in the United States.

40    Fifth, as for Mr Murdoch’s claim that the draft defence includes the withdrawal of deemed admissions made in the initial defence, that claim was based on the fact that, in its initial defence, Crikey pleaded that it did not admit certain facts. The effect of r 16.07 of the Rules is that allegations that are not specifically denied are taken to be admitted, though a plea by a party that they do not know and therefore cannot admit an allegation is taken to be a denial. Mr Bradley’s evidence was to the effect that the instances in the initial defence where Crikey pleaded that it did not admit certain allegations were largely the result of oversight. Crikey intended, in those instances, to plead that it did not know and cannot admit those allegations. That oversight has been corrected in the draft defence. I accept Mr Bradley’s evidence that the deemed admissions in the initial defence were the product of oversight. I would in those circumstances be inclined to grant leave to permit the deemed admissions to be withdrawn.

SEPARATE DETERMINATION OF DEFAMATORY MEANING

41    Mr Murdoch’s application for the separate determination of the issues concerning defamatory meaning can be dealt with fairly briefly. I accept that in some defamation cases it may be appropriate to determine the issue of defamatory meaning as a separate and preliminary question. If that is to occur, however, it should be raised by the parties and dealt with at an early stage of the proceeding.

42    The difficulty with Mr Murdoch’s application for the separate determination of defamatory meaning is that the matter has now been listed for trial in October 2023. The matter has also already been the subject of considerable interlocutory dispute which has taken up much court time. I have very limited availability between now and October in which to hear and decide the question of defamatory meaning, particularly given that the question of defamatory meaning in this case would appear to be by no means easy or straightforward. It also appears to me that any finding I make in respect of defamatory meaning would almost inevitably be appealed by the losing party. The stakes in this matter are high and neither party appears to be prepared to take a backward step. If any judgment I delivered in respect of defamatory meaning was appealed, the October trial date would almost certainly have to be vacated.

43    In all the circumstances, I do not at this stage consider that it would be efficient or expeditious to order the separate determination of the issue of defamatory meaning.

APPROPRIATE ORDERS

44    I turn, then, to the appropriate orders. I propose to extend the time within which Crikey must file its defence.

45    Crikey proposed that its defence be filed on or before 6 April 2023. It seems to me, having regard to the significant issues that have been raised during this hearing concerning the draft defence, that Crikey should be permitted some short further period of time in which to reflect on those issues and consider modifying or clarifying some aspects of its defence before it is filed. In those circumstances, I would be prepared to extend the time within which Crikey is to file its defence to 11 April 2023. I will make consequential orders in respect of the filing of a reply. I will also grant leave to Crikey to withdraw the deemed admissions in its existing defence.

46    Accordingly, I will make the following orders. First, the time for the respondents to file their defence to the amended statement of claim be extended to 4.00pm on 11 April 2023. Second, the time for the applicant to file and serve any reply to the respondents’ defence be extended to 4.00pm on 2 May 2023. Third, the first to third respondents be granted leave, pursuant to r 26.11 of the Rules, in respect of the withdrawal of the admissions at 27.22, 27.29, 27.32, 28.2, 28.10, 38, 39, 40 and 41 of the defence. Fourth, the applicant’s interlocutory application dated 23 March 2023 be dismissed.

47    It would, in all the circumstances, be appropriate to reserve the question of costs of the respective interlocutory applications of Crikey and Mr Murdoch. It may be necessary for the question of costs to be the subject of further submissions.

Associate:

Dated:    8 May 2023