Ainsworth v Burden - [2005] NSWCA 174

No judgment structure available for this case.

CITATION:
Ainsworth v Burden [2005] NSWCA 174
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S):
15 April 2005

JUDGMENT DATE:

21 June 2005

JUDGMENT OF:
Handley JA at 1; McColl JA at 2; Hunt AJA at 3

DECISION:
1.The appeal is allowed.; 2.The plaintiff's application to amend the particulars of malice and to supply particulars of his claim for aggravated damages is allowed.; 3.The plaintiff is to pay one-third of the defendant's costs of the seven days of the trial.; 4.The defendant is to pay the plaintiff's costs of the appeal.

CATCHWORDS:
Letter written to Police Minister by defendant imputing that plaintiff not a fit and proper person to hold gaming licence or to be associated with holder of such licence - Police Minister directs investigation into allegations made in letter - defamation action based on letter - defendant pleads defences of truth and qualified privilege - malice pleaded in answer to qualified privilege - - - - At trial plaintiff seeks to tender five judgments of Licensing Court and report of investigation into defendant's allegations all rejecting those allegations, of which defendant was aware, as evidence of malice by defendant's persistence in asserting truth of his allegations in face of their constant rejection by authorities - tender rejected by trial judge as unfairly prejudicial to defendant, as strength of findings in favour of plaintiff such that jurors unable to put them out of mind when considering defence of truth - Evidence Act 1995, s 135 - error by judge - - - - At trial plaintiff seeks to amend by adding to particulars of malice and supplying particulars of aggravated damages - judge rejects on principles of case management- similarity of issues in malice and aggravated damages - error by judge - - - - Judge rules that, after withdrawal of defence of truth and in absence of particulars of aggravated damages or of falsity, no issue of truth or falsity arose - discussion of relevance of truth and falsity in defamation - error by judge

LEGISLATION CITED:
Defamation Act 1974
Evidence Act 1995
Freedom of Information Act 1989
Gaming Machines Act 2001
Jury Act 1977
Liquor Act 1982
Ombudsman Act 1974
Registered Clubs Act 1976

CASES CITED:
Ainsworth v Burden [2002] NSWSC 172
Ainsworth v Burden [2005] NSWSC 338
Akerhielm v De Mare [1959] AC 789
Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185
Bakerland Pty Ltd v Coleridge [2002] NSWCA 30
Bloch v Bloch (1981) 37 ALR 55
Broome v Cassel & Co Ltd [1972] AC 1027
Burden v Ainsworth (2004) 59 NSWLR 506
Cadam v Beaverbrook Newspapers Ltd [1959] 1 QB 413
Clarapede v Commercial Union Association (1883) 21 WR 262
Clark v Molyneux (1877) 3 QBD 237
Clines v Australian Consolidated Press Ltd (1965) 66 SR 321
Clough and Rogers v Frog (1974) 4 ALR 615
Collier-Garland (Properties) Pty Ltd v Northern Transport Co Pty Ltd (1964) 82 WN (Pt 1) 125
Commissioner for Railways v Bielewicz (1962) 63 SR 466
Commonwealth v McLean (1996) 41 NSWLR 389
Conroy v Conroy (1917) 17 SR 680
Cropper v Smith (1884) 26 Ch 700
Derry v Peek (1889) 14 App Cas 337
Dinsdale v The Queen (2000) 202 CLR 321
DPP v Boardman [1975] AC 421
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710
Heath v Goodwin (1986) 8 NSWLR 478
Horrocks v Lowe [1975] AC 135
Horton v Jones (No 2) (1939) 39 SR 305
House v The King (1936) 55 CLR 499
Howden v Truth & Sportsman Ltd (1937) 56 CLR 416
Jones v Dunkel (1959) 101 CLR 298
Ketteman v Hansel Properties Ltd [1987] AC 189
King v John Fairfax & Sons Ltd [1983] 1 NSWLR 31
Lovell v Lovell (1950) 81 CLR 573
Maxwell v Keun [1928] 1 KB 645
Merivale v Carson (1887) 20 QBD 275
Morgan v John Fairfax & Sons Ltd (1991) 23 NSWLR 374
Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382
Ordukaya v Hicks [2000] NSWCA 180
Papakosmas v The Queen (1999) 196 CLR 297
Pfennig v The Queen (1995) 182 CLR 461
Praed v Graham (1889) 24 QBD 53
Regina v BD (1997) 94 A Crim R 131
Regina v Clark (2001) 123 A Crim R 506
Regina v Masters (1992) 26 NSWLR 450
Regina v Suteski (2002) 56 NSWLR 182
Rigby v Associated Newspapers Ltd (No 2) [1969] 1 NSWR 729
Rodgers v Rodgers (1964) 114 CLR 608
Rookes v Barnard [1964] AC 1129
Ross McConnell Kitchen v John Fairfax & Sons Ltd [1980] 2 NSWLR 845
Royal Aquarium Society v Parkinson [1892] 1 QB 431
Sali v SPC Ltd (1993) 116 ALR 625
Scott v The Queen [1989] AC 1242
Singleton v Ffrench (1986) 5 NSWLR 425
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Superintendent of Licences v Ainsworth Nominees Pty Ltd (1987) 9 NSWLR 691
The Queen v Duke (1979) 22 SASR 46
Triggell v Pheeney (1951) 82 CLR 497
Walker v Walker [1967] 1 WLR 327

PARTIES:
Leonard Hastings Ainsworth v Leslie James Burden

FILE NUMBER(S):
CA 40292/2005

COUNSEL:
R R Stitt QC / T D Blackburn SC - Appellant
C A Evatt / R K M Rasmussen - Respondent

SOLICITORS:
Dibbs Barker Gosling - Appellant
Hunt & Hunt - Respondent

LOWER COURT JURISDICTION:
Supreme Court

LOWER COURT FILE NUMBER(S):
21216/96

LOWER COURT JUDICIAL OFFICER:
Hulme J

40292/2005

HANDLEY JA
McCOLL JA
HUNT AJA
Tuesday 21 June 2005

AINSWORTH v BURDEN

Headnote

The defendant (respondent to the appeal), as a former senior police officer with the Licensing Investigation Unit, was responsible either as such an officer or (after his retirement) as a expert in the preparation of objections to the grant of gaming licences to a company associated with the plaintiff (the appellant). After his retirement from the Police Service, he wrote to the Police Minister repeating the allegations made in the objections (and thereby, on the plaintiff’s case, imputing that he was not a fit and proper person to hold a gaming licence or to be associated with the holder of such a licence). The Police Minister directed a senior detective to investigate the allegations made by the defendant in his letter.

In an action for defamation based on that letter, the defendant filed defences of, inter alia, truth and qualified privilege. The plaintiff filed a reply alleging malice in answer to the defence of qualified privilege. As the publication had taken place before the provisions of s 7A of the Defamation Act 1974 (by which the functions of judge and jury were radically altered) came into operation, the whole of the action was being heard with a jury.

Evidence of malice – Evidence Act 1995, s 136

At the trial, the plaintiff sought to tender in support of his reply five judgments of the Licensing Court accepting that the plaintiff was a fit and proper person and granting the gaming licences sought, together with the report of the investigation by the senior detective into the allegations made by the defendant in his letter to the Police Minister. All rejected the allegations made by the defendant. The inference was available that the defendant was aware of the contents of those documents. The plaintiff’s case was that they demonstrated malice on the part of the defendant by his persistence in asserting the truth of his allegations in the face of their constant rejection, after investigation, by the Licensing Court and in the subsequent investigation.

The trial judge rejected the contents of the documents on the basis that they were unfairly prejudicial to the defendant within the meaning of s 135 of the Evidence Act 1995, in that the strength of the findings in favour of the plaintiff made in those documents was such that the jurors would not be able to put them out of their minds when considering the defence of truth.

Held: It is not unfairly prejudicial to a party if material tendered by his opponent merely proves or strongly supports the opponent’s case. The judge had erred in rejecting the tender of the contents of the documents.

Regina v BD (1997) 94 A Crim R 131; Papakosmas v The Queen (1999) 196 CLR 297 followed.

Application to add to particulars of malice and to supply particulars of aggravated damages

On the first day of the trial, the plaintiff applied to amend to his particulars of malice by specifying further judgments of the Licensing Court in addition to those originally specified in his particulars and the report of the senior detective into the allegations made by the defendant in his letter to the Police Minister. He also sought to rely on his case on malice as matters in aggravation of damages also.

The trial judge rejected the application on three bases:

(i) that the “principles and practices governing the orderly conduct of litigation” argued strongly against the grant of the amendment sought being allowed “at this stage”;

(ii) that the additional case proposed “could not be adequately dealt with by those on the defendant’s side of the record without a substantial amount of work”; and

(iii) that the defendant, by stating (before the defence of truth had been filed) that the claim for aggravated damages was “not presently pressed”, had abandoned his claim for such damages.

Held: (i) The emphasis placed on principles of case management erroneously permitted the efficiency of the court procedures to prevail over the injustice caused by shutting the plaintiff out of litigating the issues already raised in the pleadings and which were clearly arguable.

Cropper v Smith (1884) 26 Ch 700; State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 applied.

(ii) There was nothing in the additional material sought to be added which raised any issue beyond the issues already raised in the particulars of malice previously supplied. Reliance on the material supporting the allegation of malice as also supporting the claim for aggravated damages raised no additional issues.

(iii) The finding that the plaintiff had abandoned his claim for aggravated damages was not fairly open, and no practitioner experienced in defamation litigation (as the defendant’s various counsel undoubtedly were) could have been misled by the statement that the claim was “not presently pressed” into believing that the claim had been abandoned.

After the defendant withdrew his defence of truth during the course of the trial, and the application to amend the particulars of malice and to supply the particulars of the claim for aggravated damages was renewed, the trial judge again rejected the application, this time on the basis of his finding that the defendant had not been ready to litigate the issues which had previously been raised by the particulars of malice.

The finding that the defendant had not been ready to litigate the issues which had previously been raised was not an issue raised by or with the parties. In the Court of Appeal, counsel for the defendant denied that his client had not been ready.

Held: The judge’s finding resulted from a procedural error in reaching such a conclusion without hearing the parties in relation to that issue. The exercise of the judge’s discretion to reject the amendment sought had therefore miscarried. The amendment was granted.

Relevance of truth and falsity

After the defendant withdrew his defence of truth, the trial judge ruled that, in the absence of any particulars of aggravated damages or of falsity, no issue of truth or falsity of the matter complained of arose.

Held: (i) Whether or not particulars of a claim of falsity need to be given depends on the use to which that claim is put. The objective truth or falsity of the matter complained of is irrelevant to its defamatory nature. A plaintiff is nevertheless always permitted to nail the matter complained of as a lie: Such an assertion of falsity is not a claim for damages; it is, in effect, a remedy which the law of defamation provides.

(ii) If the plaintiff does assert the falsity of what was published, the defendant is entitled to meet that claim by demonstrating that what was published is true. The falsity of the matter complained of becomes relevant to the issues in the trial, and therefore to the particulars which must be given, only in relation to the extent to which the plaintiff claims that the mental distress and the hurt to his feelings caused by the defamation are increased because of that falsity. Such a claim is one for aggravated damages, and particulars of such a claim are required by SCR Part 16 r 5B to be given.

(iii) It was therefore open to the plaintiff in the present case to assert the falsity of the allegations made by the defendant in his letter to the Police Minister in order to nail the lie without having given particulars of that claim. There could have been no surprise to the defendant by such an assertion, as he came to trial ready to litigate the truth of his allegations. If, however, the plaintiff were to have gone further and asserted a greater injury to his feelings because those allegations were false, he would have been debarred from doing so in the absence of particulars or other adequate notice of a claim for aggravated damages having been given to the defendant.

Howden v Truth & Sportsman Ltd (1937) 56 CLR 416; Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185; Rigby v Associated Newspapers Ltd (No 2) [1969] 1 NSWR 729 followed. Defamation Act 1974, s 47, referred to.

0292/2005
HANDLEY JA
McCOLL JA
HUNT AJA
Tuesday 21 June 2005

AINSWORTH v BURDEN

Judgment

1 HANDLEY JA: I agree with Hunt AJA.

2 McCOLL JA: I agree with Hunt AJA.

3 HUNT AJA:

Introduction

4 Leonard Hastings Ainsworth has sued Leslie James Burden in the Supreme Court claiming damages for defamation arising out of the publication of a letter written by the defendant in 1993 to the Minister of Police.

5 The proceedings were not commenced until 1996. The plaintiff says that he was unaware of the publication of the letter until August 1996, when a copy of the letter was produced by the Police Service in response to an application made by him some years earlier pursuant to the Freedom of Information Act 1989. The trial was listed to commence on 4 April last before a jury. The publication had taken place before the provisions of s 7A of the Defamation Act 1974 (by which the functions of judge and jury were radically altered) came into operation, and the jury was necessarily to play a larger part in the proceedings than is currently the rule in defamation cases.

6 This appeal — brought by leave from rulings made by the trial judge — mainly concerns the pleadings and the particulars supplied of the issues raised in those pleadings. It is necessary, therefore, to describe those pleadings and particulars (as well as other correspondence between the legal representatives of the parties) in some detail.

7 The judgment is divided under the following headings:

The pleadings and associated particulars 8

The commencement of the trial 24

The application for leave to appeal 33

The plaintiff’s claim for damages in relation to his Nevada dealings 36

The relevance of truth and falsity 87

Admissibility of the contents of the Licensing Court judgments

and of the Mellis Report 93

Relevance of the defendant’s conduct 111

Other issues raised in the appeal 114

Costs 117

Orders 118

The pleadings and associated particulars

8 The plaintiff identifies himself in his Statement of Claim as a substantial shareholder in Aristocrat Leisure Industries Pty Ltd, a licensed manufacturer of poker machines and approved amusement devices, and as having been involved in the management of that company.

9 The letter written by the defendant to the Police Minister is dated 4 June 1993, and is headed “Leonard Hastings Ainsworth”. In it, the defendant identifies himself to the Police Minister as a former Commander of the Licensing Investigative Unit within the Police Service who had retired four years earlier, in March 1989. He says that, together with other members of that Unit, he had been the subject of complaints made by the plaintiff to the Ombudsman and to other persons in authority but that he had “not been found wanting” in relation to those complaints.

10 The defendant says that, in May 1993, he was cleared by the Deputy Ombudsman (Mr Pinnock) in an investigation which “touched on a number of the Ainsworth complaints”, following a “section 19 inquiry”. There is no description of such an inquiry in the Statement of Claim, but it would appear to have been reasonably understood by the Minister in its context as an inquiry under s 19 of the Ombudsman Act 1974 into a complaint made into the conduct of police officers made pursuant to s 13 of that Act.

11 The defendant informed the Minister that the plaintiff had commenced civil actions in the Supreme Court in 1991 “involving a number of Police, ex-Police and others, including the State of NSW, relative to the outcome of the section 19 inquiry”. As those proceedings are said to have been commenced before the s 19 inquiry had concluded, the words “relative to” would appear in that context to mean relating to the subject matter of the s 19 inquiry rather than its result. The defendant notes that no “process” had yet been issued, but that such process was very likely in the light of comments made by the plaintiff “during recent interviews”. This appears to mean that, although proceedings had been commenced by the plaintiff in 1991, the defendants to those proceedings had not been served as at 4 June 1993, the date of the letter.

12 The defendant also informed the Minister that, in 1992, he gave evidence in support of the former Sgt Lionel Hanrahan in proceedings brought against him by the plaintiff, proceedings which were “resolved by substantial financial favour” of Sgt Hanrahan on terms not to be disclosed. It is unclear from the letter whether that means that the resolution of the proceedings was financially favourable to Sgt Hanrahan or whether it means that the resolution was made possible by Sgt Hanrahan making a substantial financial contribution. The defendant in his defence of contextual truth (to which reference is made later) asserts that the letter would have been understood in the first of those two possible meanings.

13 After this lengthy preamble, the defendant arrives at what appears to be the point of his letter:

No effort has apparently been made by the Licensing Investigative Unit personnel to ascertain the outcome of such proceedings and revelations contained in the evidence.

A number of serious issues arose during the trial which, in my opinion, would call for the issue of show cause process in the Licensing Court of N S Wales.

Mr Hanrahan was legally represented by Mr Clive Evatt, assisted by Ms J Gibson instructed by Massellos & Co, Solicitors.

It might be noted that Mr Ainsworth was successful in having his company licensed an approved amusement device dealer in contentious circumstances. Evidence forthcoming in the Hanrahan proceedings would have dramatically affected such licensing decision.

I am now aware that Mr John Hatton has raised the issue of Mr Ainsworth’s suitability to be so involved in the licensing company, in Parliament.

However, it is my belief that no attempt has been made by the Licensing Investigative Unit to pursue the matter.

I submit that one of the prime functions of this Unit is to investigate any suggestion of wrong doing on the part of the licensee in the regulated poker machine gaming industry, whether an individual person or body corporate. Such function is in keeping with the views of the government of the day when introducing the relevant amending legislation (documented at the Unit Office).

The Unit was in fact well aware of the trial and importance attaching thereto, yet they have apparently deliberately chosen, or been directed, to avoid it.

In addition, there are the following aspects which warrant investigation:-

a. The evidence of the alleged bribe given by Mr E P Vibert (charged with Mr Ainsworth in early eighties) in his bankruptcy hearing.

b. Oral evidence given by Mr Ainsworth to the Queensland Parliamentary Justices Committee of 24 May, 1991 and written material supplied thereto.

c. The unauthorised supply of confidential police documents to former Deputy Commissioner John Perrin as evidenced in the Summary of Evidence prepared by Mr Pinnock.

In any analysis of the material involved, consideration would need to be given to a comparison of data contained in the following:

a. The report of Mr G Masterman, QC, former Ombudsman, in October 1986, following his investigation into a number of the earlier complaints made by Ainsworth and Vibert, (which also involved Mr Perrin).

b. The various reports made to Parliament 1984 by Mr Masterman.

c. The role of Mr John Perrin in the 1986 matter, his appointment with the Ainsworth Coy as a legal consultant and subsequent activities, especially in light of I.C.A.C. concern on this type of employment arrangement (see attached extract page 12 ICAC report March 19??).

d. The evidence of Mr Ainsworth in the Licensing Court hearings.

e. The report of the Queensland Criminal Justice Commission relating to poker machines.

f. The Summary of Evidence produced by Mr Pinnock on completion of the latest Section 19 Inquiry.

g. Comments of various judges in associated hearings.

The question of course arises as to whether or not the failure of the Unit, if it be so, to pursue these inquiries to date, constitutes a degree of neglect of duty.

In such regard, I wish to stress that this letter is not intended as a complaint, but merely as an advice as to the position as I see it, for your consideration on the action deemed necessary.

[The original letter was handwritten, and the copy attached to the Statement of Claim is a poor photostat copy (it appears to be the same photostat copy produced by the Police Service in response to the plaintiff’s Freedom of Information Act application). The year of the ICAC Report referred to is illegible in that photostat. The underlining is in the handwritten letter. At the relevant times, Mr David Landa was the Ombudsman and Mr Pinnock was the Deputy Ombudsman, and they are identified as such elsewhere in the letter.]

The extract from the unidentified ICAC Report attached to the letter refers to the case of a government employee (not Mr Perrin) who had in the course of his duties let a valuable government contract to a firm, and who then later, during his extended leave just before leaving government employment, had joined that firm as an employee. The report comments that problems would have been created even if he had not joined the firm until after leaving government employment.

14 The plaintiff has pleaded three imputations, the publication of which constitutes his causes of action:

2 that the plaintiff was not a fit and proper person to have a financial interest in a company licensed in relation to poker machines; and

3 that the plaintiff was not a fit and proper person to have a financial interest in a company licensed to be an approved amusement device dealer.

Registered Clubs Act

Liquor Act

Registered Clubs Act

Gaming Machines Act

15 The plaintiff also pleaded a claim for aggravated damages, but gave no particulars of the facts and circumstances on which he relied to establish that claim as required by SCR Part 16 r 5A. That Rule had replaced the similar provision (limited to defamation actions) in Part 67 r 12(d) in 1988. The defendant sought such particulars in November 1996, and the plaintiff replied, on 14 March 1997:

Th e claim for aggravated damages is not presently pressed.

16 In his amended Defence, the defendant has admitted that he published the handwritten letter. In the context of the limited allegation of publication in the Statement of Claim to which it is pleaded, this is an admission of publication to the Police Minister only. (Subsequently, an admission was made on behalf of the defendant that the letter was also published to the various police officers who, at the direction of the Police Minister, carried out an investigation into the allegations made by the defendant (see par [38] infra). The defendant has denied that the letter was capable of conveying the pleaded imputations and that those imputations were capable of defaming the plaintiff. These are issues of law, and it has already been held, in a separate trial pursuant to Part 31 r 2, that the letter is capable of conveying the pleaded imputations and that those imputations are capable of defaming the plaintiff. The defendant has not pleaded in the alternative that the letter did not in fact convey the imputations or that, if the imputations were in fact conveyed, they did not in fact defame the plaintiff. Both issues, when raised, are for the jury to determine, but they are presently admitted by the defendant on the pleadings.

17 The substantive defences pleaded are:

Defamation Act

(b) the circumstances of the publication were such that the plaintiff was not likely to suffer harm (Defamation Act, s 13);

(c) absolute privilege (the nature of which is not identified in either the pleading or the particulars);

(d) comment relating to matters of public interest, nominated as the conduct of police officers, the awarding of licences for approved amusement device dealers, police investigation of allegations of wrongful conduct and the duty of police officers to pursue inquiries (Defamation Act, Division 7);

(e) substantial truth relating to those nominated matters of public interest or published under qualified privilege (Defamation Act, s 15);

(f) contextual truth — that:

(2) the plaintiff paid Sgt Hanrahan substantial financial damages rather than continue contesting Sgt Hanrahan’s claims against him for defamation and abuse of legal process; and

(3) the plaintiff’s association with his co-defendant should be investigated by the police to determine whether the plaintiff was a party to the payment of a bribe by Mr Vibert to Mr Rex Jackson MLA, in that the bribe was paid in exchange for Mr Jackson having proceedings against the plaintiff and Mr Vibert dropped;

(iii) both the plaintiff’s imputations and the contextual imputations related to the nominated matters of public interest or were published under qualified privilege; and

(iv) by reason of the contextual imputations being matters of substantial truth, [the publication of] the plaintiff’s imputations did not further injure the plaintiff’s reputation (Defamation Act, s 16).

18 Included in the Defence are twenty-two pages of particulars of truth. Subsequently, 111 pages of further particulars of truth (in single-spaced typing) were supplied.

19 In answer to the defence of qualified privilege, the plaintiff’s Reply pleads that the defendant was actuated by express malice in the publication of the letter. The particulars of that allegation, as required by Part 67 r 19, identify a number of actions taken by the defendant during the period from 1985 to 1988 (in his role as a member of the Licensing Investigative Unit), and one action taken by the defendant in 1992 (after he had retired from the Police Service), which are alleged to have been unfairly detrimental to the plaintiff and his interests.

20 The plaintiff also gave particulars before the trial of a specific part of his claim for damages. This specific claim for damages gave rise to the first ruling made by the trial judge against the plaintiff in the trial, and it is convenient at this point to make a brief reference to an event which is important to the way the plaintiff sought to outline his case at the trial. This event occurred during 1992-1993. The plaintiff’s company had made an application for a dealer’s licence in the State of Nevada in the USA. The plaintiff says that there is in that State a two-stage procedure. The first stage consists of an investigation. If the applicant passes that investigation, it is said, the next stage granting approval and a licence is formal only. The plaintiff’s case is that his company had passed through the investigation successfully, and that the formal grant of the licence was listed for hearing in July 1993. It was just before that hearing that the defendant wrote his letter to the Police Minister.

21 As a result of that letter having been written, the Minister directed Detective Chief Inspector Mellis and another officer to investigate the allegations made by the defendant. In the course of that investigation, a Sgt Osborne wrote to the Nevada Gaming Control Board informing that Board that the investigation being conducted was into the plaintiff’s suitability to be associated with the exercise of his company’s poker machine and amusement device dealer’s licences. As a consequence of Sgt Osborne’s letter, the plaintiff says, the Nevada Gaming Control Board re-opened its inquiry into the application under consideration. The plaintiff says that he was forced to withdraw his company’s application under penalty that his company would be unable to re-apply for a period of twelve months. Because of the ongoing inquiries in New South Wales in consequence of the defendant’s letter, the plaintiff says, it was impracticable for his company to re-apply in Nevada for some years, and the letter by Sgt Osborne thus resulted in substantial loss and damage to the plaintiff. Notice of such a case on damages was given to the defendant’s solicitors by letter dated 5 July 2002. That notification does not appear to have excited any inquiry by the defendant as to how the plaintiff sought to make him liable for such a consequence.

22 Sgt Osborne’s notification to the Nevada Gaming Control Board has not been put forward by the plaintiff as a separate publication of the gist of what is in the defendant’s letter to the Police Minister. It did not therefore have to be pleaded in the Statement of Claim. It was put forward solely on the issue of damages, as indicated to the defendant in the July 2002 letter. This was again confirmed in a letter sent to the defendant’s solicitor on 31 March 2005, a few days before the hearing commenced. The March 2005 letter does not formulate any new claim, it merely gives notice as to how the plaintiff proposes to prove his claim notified in July 2002 that the defendant was liable for damages in relation to his Nevada dealings. There is no suggestion in the correspondence before this Court that the defendant had sought these particulars at any time since notice of the claim had been given him in July 2002.

23 The additional particulars supplied in the letter of 31 March 2005 allege that the defendant knew, when he wrote to the Police Minister on 4 June 1993, that the application by the plaintiff’s company to what is now described as the Nevada Gaming Commission was listed for hearing the following month, and that he deliberately intended the letter to coincide with that hearing. It is alleged that the defendant believed that the Police Minister would set in progress an inquiry into that letter, and that he knew and believed that the natural and probable consequence of such an inquiry would be that the Nevada Gaming Commission would be advised of the fact of that inquiry, because officers from that Commission had previously been making inquiries in Australia investigating the plaintiff and his company. The defendant is alleged to have intended his letter to the Police Minister to prejudice the application by the plaintiff and his company in Nevada fatally, or to delay or to defeat it. Many of these allegations appear to be based, at least in part, on a record of interview with the defendant by Sgt Osborne, in which the defendant suggested an investigation into the plaintiff’s relationship with an officer of the “US Nevada Gaming Board” and into any irregularities in the application the plaintiff’s company had made to that Board — matters he had not identified in his letter to the Police Minister.

The commencement of the trial

24 The following brief description of the relevant events which occurred during the trial is given in order to provide an immediate context to the various issues raised during those proceedings which are the subject of this appeal. These issues will be dealt with separately after referring to the application for leave to appeal.

25 On the first day of the trial, senior counsel for the plaintiff sought successfully to have some important issues determined by the judge before he opened to the jury. On that day, the judge indicated that he thought it would be unlikely that he would permit the plaintiff to expand his case on damages relating to his dealings in Nevada so late in the day. The issue was, however, left on the basis that senior counsel for the plaintiff would not open the material in dispute to the jury, but would raise the issue again for a ruling before embarking on proof of the claim.

26 On the second day, the judge held that a number of decisions of the Licensing Court granting licences to the plaintiff’s company — together with another document which assumed some importance in the plaintiff’s case, the report of Detective Chief Inspector Mellis (referred to as the “Mellis Report”) — were not within the plaintiff’s case as then formulated. In order to make these documents admissible, an application was made to amend the particulars of malice and to supply particulars of the plaintiff’s claim for aggravated damages. This application was refused. (The Mellis Report is dated 3 June 1994, and is headed “Complaint by Mr LJ Burden, former Police Inspector to the Minister of Police and Emergency Services concerning Leonard Hastings Ainsworth”. Paragraphs 1-2 of that report state that Detective Chief Inspector Mellis and another officer had been directed to investigate the allegations made by the defendant in his letter dated 4 June 1993 to the Police Minister, the subject of this action. The report does in some respects go beyond those allegations — apparently as a result of Sgt Osborne’s interview with the defendant.)

27 Further submissions were made in relation to the Mellis Report on the third day of the trial. The judge said that he thought that certain portions of that report were admissible in accordance with the Evidence Act 1995, but he rejected the tender of the whole document. There was no final determination of what parts of the report would be admissible.

28 On the fifth day of the trial, the judge rejected certain documents which identified in a limited way the decisions given by the Licensing Court granting licences to the plaintiff’s company dealt with earlier. Those documents identified the result of those decisions but not the reasons which had been given for those decisions. They had been tendered in response to some of the reasons given by the judge for rejecting the decisions themselves, and in an endeavour to overcome those reasons.

29 On the same day, during the course of the opening address by the plaintiff’s senior counsel to the jury, the judge discharged the jury on the defendant’s application. The basis of that decision was that counsel had referred to the Mellis Report in the course of his address, notwithstanding that no final decision had been given on its admissibility, and that the references were to parts of the report which the judge then stated were inadmissible. One of the grounds the judge gave for rejecting what were otherwise apparently accepted as relevant parts of the report was that the views which Detective Chief Inspector Mellis had expressed on issues which arose in these proceedings were strongly in favour of the plaintiff, and that the jury’s knowledge of those findings would be unfairly prejudicial to the defendant.

30 On the sixth day of the trial, the defendant withdrew the defences of statutory qualified privilege, truth and contextual truth. The remaining defences are common law qualified privilege, unlikelihood of harm (Defamation Act, s 13) and absolute privilege. Leading counsel for the defendant informed this Court that he had also withdrawn the defendant’s reliance on the truth of the plaintiff’s imputations and of his own contextual imputations in mitigation of damages and the allegation in his particulars of mitigation that the plaintiff had a bad reputation. The plaintiff’s delay in prosecuting the proceedings remains as the only particular in mitigation of damages.

31 On the same day, the plaintiff renewed his application to amend his particulars of malice and to supply particulars of his claim for aggravated damages, in order to make the decisions of the Licensing Court and the Mellis Report admissible. The judge gave a decision the next day, the seventh day of the trial, adhering to his previous rulings rejecting the admissibility of the Licensing Court decisions and the application to amend the particulars of malice. He again indicated that parts of the Mellis Report may be admissible in accordance with the Evidence Act. He said that, in the light of the withdrawal of the defence of truth, the prejudice which had previously led him to reject those parts on which counsel for the plaintiff had opened to the jury was not as strong as it had previously been, and that he would revisit its admissibility when the plaintiff’s case was further advanced.

32 Later on the seventh day of the trial, the judge sought to encapsulate his previous rulings in the one judgment with some additional reasons for those decisions. He recorded the submission by senior counsel for the plaintiff that the rulings he had made greatly impeded the plaintiff’s case and what counsel had wished to put to the new jury in his opening address, a submission which the judge accepted. Counsel informed the judge that he wished to test those rulings in this Court, as they had effectively “gutted” the plaintiff’s case. The defendant did not oppose an adjournment to enable an application for leave to appeal to be made, although his counsel stated that he would oppose this Court embarking on a hearing. The judge adjourned the case whilst this Court was approached.

The application for leave to appeal

33 The application for leave to appeal and the proposed grounds of appeal were argued before this Court after the proceedings in the Common Law Division had been stayed (except to discharge the new jury called). The proposed grounds of appeal raised a substantial number of issues to be determined. At the conclusion of the argument, leave to appeal was granted and the decision on the appeal was reserved. The parties were directed to inform the judge that there was no prospect that the trial could proceed before the new jury which had been called. The plaintiff was directed to file his Notice of Appeal. The new jury was subsequently discharged.

34 It is necessary to make it plain that leave to appeal from decisions made during the course of a trial — particularly a jury trial — will not be granted lightly: Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382 at [24] – [25]. In that case, the issue raised in the application for leave to appeal was one of fundamental importance in the law of defamation concerning the nature of evidence which is relevant to a plaintiff’s reputation, involving the possible reversal of a long-standing decision of this Court, and one which would have required a substantial amount of research and argument. Because of the lateness of the issue being raised, it was not appropriate to delay the trial to enable the applicant to seek to have the long-standing decision of this Court reversed. The present appeal does not involve issues of that nature. And, whereas in El-Azzi a subsequent reversal of a decision at the trial to follow the long-standing decision of this Court meant only a retrial as to damages, a subsequent reversal of the decisions of the trial judge in the present case would require the whole case to be reheard. Moreover, a number of the rulings made by the trial judge appeared on their face to be erroneous and indicated the very real possibility of a misunderstanding of the issues which had arisen. If left standing, those decisions were likely to have substantial and deleterious consequences if the trial were to proceed without those errors being corrected. It was for these reasons, which are unusual and hopefully extraordinary, that leave to appeal was granted.

35 I turn now to the issues which arose at the trial and which have led to the present appeal.

The plaintiff’s claim for damages in relation to his Nevada dealings

36 It is unclear from the material placed before this Court just how the issue concerning the plaintiff’s claim for damages in relation to his Nevada dealings arose on the first day of the trial before the plaintiff’s claim was opened to the jury, but it would seem that there was an objection by the defendant to the letter of the 31 March 2005 to which reference has been made in pars [22] – [23] supra.

37 In the judgment the judge gave that day, he took the view that the plaintiff was at that late stage bound by the case of which he had already given notice in 2002. In that judgment, the judge referred to another letter from the plaintiff’s solicitors, one dated 22 May 2002, as “particularising the way in which the plaintiff formulates his case”, and he suggested that the letter of 31 March 2005 was inconsistent with that letter.

38 So far as it could be relevant at all, the letter of 22 May 2002 merely gives particulars of publication — to Mr Griffiths (the Minister at that time), and to Detective Chief Inspector Mellis and their respective staffs to whom access was given, the staff of the latter being identified as Detective Chief Inspector Allen, Detective Inspector Richardson, Detective Sgt Clark, Detective Senior Constable Paris, Sgt Osborne, Sgt Fenwick and Sgt Hanrahan. Although none of this is made clear in the plaintiff’s Statement of Claim, the defendant’s leading counsel conceded before this Court that the publication to the various police officers fell within the original publication of the defendant’s letter to the Police Minister (Appeal Transcript, T 47). It would be as well that the extent of this publication is now made clear in the Statement of Claim. However, as it has already been pointed out (par [22] supra), the effect of Sgt Osborne’s letter on the plaintiff’s dealings in Nevada went only to the issue of damages resulting from the publication of the letter to the Police Minister; it was not based on any separate publication of the defendant’s letter to the Nevada authorities. There was therefore no inconsistency between the later letter of 31 March 2005 and the particulars of publication given on 22 May 2002.

39 The judge went on to say in his judgment on the first day of the trial:

sic

40 The judge appears to have misunderstood the letter of 31 March 2005 as expanding the plaintiff’s claim for damages notified in July 2002. That letter did no more than explain to the defendant, despite the fact that he had not sought any further particulars of the claim, how the plaintiff proposed to prove his claim in relation to the Nevada dealings notified in July 2002. The additional particulars supplied could only have assisted the defendant, by describing the nature of the evidence to be called. He was not being asked to meet any new case beyond that of which he had been given notice in July 2002. The ruling was, of course, only tentatively expressed at that stage, but the judge was in error when he prevented senior counsel for the plaintiff from opening this to the jury as part of the plaintiff’s case.

Application to amend particulars of malice and to supply particulars of aggravated damages

41 After some discussion on the first day of the trial concerning the way in the plaintiff put his case on the issue of malice (in reply to the defence of qualified privilege pleaded), the plaintiff’s solicitors identified his case on malice — in a letter dated 4 April 2005 — as being based on the following particulars:

[Those particulars were:

(l) The defendant was party to the decision to raise fifty-five (55) grounds of objection to an application by the Plaintiff for an Amusement Device Dealer’s Licence to be heard before Mr Hammond SM, in May 1985.

(m) The Defendant was party to the decision to withdraw many of the fifty-five (55) grounds of objection to the Plaintiff’s licensing application before Mr Hammond SM in the Licensing Court in May 1985.

(n) The defendant was involved in decisions affecting the conduct of proceedings before the Court’s [sic] dealing with the Plaintiff’s licensing application, necessitating forty-two (42) days of actual hearings spread over a period of three (3) years.]

2. Letters of 3 March 1999 and 29 January 2001 providing further and better particulars.

[Both letters gave further details of the particulars of malice provided in the Reply, including the three paragraphs already quoted. Paragraph 2(b) of the same particulars asserted that, after the plaintiff’s company had been granted a licence (which the defendant had unsuccessfully opposed), the defendant had in November 1985 sought to influence the Corporate Affairs Commission to investigate the company’s financial affairs. The 2001 letter says:

(i) there was no possibility that any of the Ainsworth companies were insolvent due to a tax assessment of $30 million, and

(ii) there was no illegality or impropriety in relation to the two different sets of audited statements as at 30 June 1984.

It must be inferred that the defendant had no honest belief that the Corporate Affairs Commission would find that any of the Ainsworth companies were insolvent or that there was any impropriety in relation to the sets of audited statements and therefore that the approach to the Corporate Affairs Commission was motivated by malice.

The 2001 letter also asserts that the defendant had no honest belief in a number of the other allegations he had made to various statutory authorities to the prejudice of the plaintiff and his company.]

3. Persistence in the particulars of truth as set forth in the letter dated 5 February 2001 from the defendant [the 111 page letter already referred to] notwithstanding the judgments of the Licensing Courts of New South Wales being:

· 30 August 1985 – Hammond LM

· 27 May 1988 – Full Bench of the Licensing Court

· 29 November 1988 – Full Bench of the Licensing Court granting Poker Machine Manufacturer Licence

· 17 August 1988 – Collins LM

· 25 August 2001 – Full Bench of the Licensing Court

[Brief reference has already been made to the Mellis Report, and I will return to it shortly.]

42 It is the plaintiff’s case that the defendant, being the senior officer of the Police Licensing Investigative Unit, was responsible for the investigation of the applications made by the plaintiff’s company for gaming licences under the Liquor Act and the Registered Clubs Act, and for preparing and signing the objections lodged by the police to the grant of those licences. In the first of those applications, one for an amusement device dealer’s licence heard by Mr Hammond in 1985, the defendant had lodged extensive objections. After a long hearing, the magistrate found that the objections were not sustained, that the plaintiff was a fit and proper person, and he granted the licence. The police appealed to the Full Bench of the Licensing Court. The appeal was by way of a rehearing de novo: Superintendent of Licences v Ainsworth Nominees Pty Ltd (1987) 9 NSWLR 691 at 692, 694, 705. The defendant lodged the same objections, and there was another lengthy hearing. The plaintiff says that the objections were again ultimately not sustained, the Full Bench found that he was a fit and proper person, and the licence was again granted.

43 The Mellis Report identifies a number of other steps taken in the litigation before the plaintiff’s application heard by Mr Hammond was ultimately successful in 1988. On 21 March 1986, the Full Bench initially allowed the appeal from Mr Hammond’s decision. The plaintiff appealed to the Supreme Court, which allowed the appeal in a form which restored the decision of Mr Hammond granting the licence: Ibid at 705. That decision was itself reversed by the Court of Appeal, but the order made was to remit the proceedings to the Full Bench of the Licensing Court for a re-hearing by that Court because of the different understandings between the parties as to the basis on which the previous appeal was to be conducted: Ibid at 694. In a detailed decision on 27 May 1988, the Full Bench found that the plaintiff was a fit and proper person to hold a licence, dismissed the appeal brought by the police against Mr Hammond’s decision on 30 August 1985, and granted the licence. The Chairman commented:

It is apparent from the documentation in the present case notwithstanding a very thorough investigation, that nothing untoward has been unearthed that reflects in any way on the company or any of its office holders.

44 The second application was for a poker machine manufacturer’s licence in 1988. The Full Bench was advised by the police that, after an investigation of the plaintiff, no objection was to be raised. The licence was granted. The plaintiff has not given this Court the details of the hearing before Mr Collins LM in August 1988 (referred to in the last letter of particulars), other than that the plaintiff was found to be a fit and proper person to hold a licence and the licence was granted, despite the objections lodged by the defendant. The material before this Court sheds no light on what occurred between the grant of the licence by Mr Collins in August 1988 and the decision of the Full Bench of the Licensing Court in August 2001, but by that time the defendant had retired from the Police Service. The defendant nevertheless asserted in the particulars of truth he supplied of his defence in these proceedings in February 2001 that such particulars of truth covered “more or less the same ground” as the grounds of objection filed by the police in the Licensing Court to applications by the plaintiff over the previous twenty years (page 3, par 5).

45 It is the plaintiff’s case that the Mellis Report also rejected all of the matters raised by the defendant in the proceedings in the Licensing Court and all of the matters raised by him in his letter to the Police Minister. The letter of 4 April 2005 identifying the plaintiff’s case on the issue of malice (quoted in par [41] supra) identifies the relevance of the Mellis Report and the decisions in the Licensing Court as demonstrating that the defendant had persisted in his defence of truth notwithstanding that all of the matters on which he relied had been investigated and dismissed in those proceedings and in that report.

46 Malice in the usual sense of the word means a desire to injure the person defamed or the existence of personal spite towards that person. It is unnecessary to discuss here any of the extended meanings of malice in the law of defamation. If a malicious state of mind on the part of the defendant in either of these two senses is established as the dominant motive for the publication of defamatory matter, any qualified privilege claimed for that publication is lost, notwithstanding that the defendant had either a belief in the truth of what has been published or a duty to publish it: Horrocks v Lowe [1975] AC 135 at 149. In any event, in relation to the defendant’s belief in the truth of what has been published, there is sometimes a fine line to be drawn between, on the one hand, such a belief resulting from ignorance, excessive enthusiasm, intellectual eccentricity or an inability to reason and, on the other hand, a blind or reckless adherence to such a belief, through malice or perversity or in the face of every evidence to the contrary of what has been published. The former is still regarded as an honest belief, the latter is malice which destroys any qualified privilege claimed. It is not always easy to draw that line. Nor are some of the cases easy to reconcile; compare, for example, the statement of Lord Esher MR in Merivale v Carson (1887) 20 QBD 275 at 281-282 with the statements of the same judge earlier in Clark v Molyneux (1877) 3 QBD 237 at 248 (as Brett LJ) and later in Royal Aquarium Society v Parkinson [1892] 1 QB 431 at 444.

47 The persistence by the defendant in asserting the truth of the allegations in his letter to the Police Minister, notwithstanding the constant rejection of his allegations, after investigation, by the Licensing Court and by the inquiry instigated by his letter, is relied on by the plaintiff not only as evidence of malice in reply to the defence of qualified privilege but also as a matter in aggravation of damages. What is evidence of malice will usually also aggravate damages, subject only to the restriction imposed by s 46(3)(b) of the Defamation Act. Much (but not all) of that which aggravates damages will also be evidence of malice. The state of mind or conduct on the part of the defendant on which the plaintiff in the present case relies as part of his case on malice — that he sent the letter to the Police Minister and persisted for a long time in asserting the truth in the circumstances already outlined — are such matters which are relevant to both issues (malice and aggravated damages) as demonstrating either that the defendant did not have any honest belief in the truth of what he wrote or that he pursued the plaintiff repeating those allegations with some other animus against him: See, generally, Praed v Graham (1889) 24 QBD 53 at 55; Derry v Peek (1889) 14 App Cas 337 at 376; Triggell v Pheeney (1951) 82 CLR 497 at 513-514; Akerhielm v De Mare [1959] AC 789 at 805; Rookes v Barnard [1964] AC 1129 at 1221; Broome v Cassel & Co Ltd [1972] AC 1027 at 1073; Morgan v John Fairfax & Sons Ltd (1991) 23 NSWLR 374 at 386.

48 In order to establish for these purposes the defendant’s persistence in asserting the truth of his allegations in the face of constant rejection of those allegations, after investigation, by the Licensing Court and in the Mellis Report, it is necessary for the plaintiff to prove that the defendant was aware of the contents of the judgments which had been given, for it is the contents of those judgments which are said to demonstrate to any honest-minded person that the defendant’s allegations were untrue. The inference that the defendant was aware of the contents of those judgments is clearly open (and almost irresistibly so) on the material in the defendant’s particulars of truth. The inference that the defendant would have been aware of the contents of the Mellis Report in response to his letter to the Police Minister which is the subject of this action is also clearly open.

49 The plaintiff was accordingly entitled to place the contents of each of the judgments from the Licensing Court and of the Mellis Report before the jury in order to prove the relevant state of mind and conduct of the defendant. There were a number of issues raised during the trial as to the admissibility of these documents, which are more conveniently dealt with later in the judgment (see pars [87] et seq, infra). It is sufficient at this stage to state that the contents of those documents were admissible in evidence provided that the allegation of the defendant’s persistence in the truth of his allegations in the face of constant rejection of those allegations fell within the plaintiff’s case as then formulated.

50 As already stated, the judge held that the documents enumerated in the third paragraph of the letter quoted in par [41] supra were not within the plaintiff’s case as then formulated, and an application was made to amend the particulars of malice and to supply particulars of the plaintiff’s claim for aggravated damages. This application was refused the same day (par [26] supra), renewed on the sixth day of the trial and refused again the next day (par [31] supra).

51 In the usual course, an application to amend a pleading will be granted unless the pleading (or that part of the pleading) as sought to be amended would have been struck out if it had been contained in the original pleading: Horton v Jones (No 2) (1939) 39 SR 305 at 309-310; Cadam v Beaverbrook Newspapers Ltd [1959] 1 QB 413 at 425; Commissioner for Railways v Bielewicz (1962) 63 SR 466 at 468; Heath v Goodwin (1986) 8 NSWLR 478 at 482. It would be struck out (and thus the amendment will not be permitted) only where the claim is manifestly groundless: General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 at 129. It was not suggested that the present claim sought to be added was manifestly groundless, nor could it be suggested.

52 A judge does, however, have a discretion to refuse an amendment. An appeal based upon the judge's refusal to grant an amendment is thus one against the exercise of a discretion, and it will be allowed only where it has been established that the judge has erred in the proper exercise of that discretion: Conroy v Conroy (1917) 17 SR 680 at 684; Collier-Garland (Properties) Pty Ltd v Northern Transport Co Pty Ltd (1964) 82 WN (Pt 1) 125 at 127. There is a strong presumption in favour of the correctness of the decision, but that presumption will be overcome where it is shown that the judge has acted on some wrong principle, or has given weight to extraneous or irrelevant matters, or has failed to give weight or sufficient weight to relevant considerations, or has made a mistake as to the facts. Even if the precise nature of the error may not be discoverable, it is sufficient that the result was so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise that discretion: House v The King (1936) 55 CLR 499 at 504-505; Lovell v Lovell (1950) 81 CLR 573 at 532-534; Rodgers v Rodgers (1964) 114 CLR 608 at 619-620; Dinsdale v The Queen (2000) 202 CLR 321 at [3]. If the appellate court is satisfied that there has been an injustice to one of the parties as a result of the judge's exercise of discretion, it is under a duty to review the order made: Maxwell v Keun [1928] 1 KB 645 at 653; Collier-Garland (Properties) Pty Ltd v Northern Transport Co Pty Ltd (at 127); Bloch v Bloch (1981) 37 ALR 55 at 58-59; Walker v Walker [1967] 1 WLR 327 at 330.

53 The plaintiff complains of a number of rulings by the judge in relation to various issues which arise out of his refusal of the application to amend, and which are said to have been erroneous.

(i) The emphasis on the lateness of the application as an answer to that application

54 The judge had already expressed the firm view in his judgment on the first day of the trial that late amendments would be a “rare occurrence” in this trial (see par [39] supra). In his judgment on the second day of the trial, when rejecting the application to amend the particulars of malice and to supply particulars of aggravated damages, the judge said:

This case was commenced in 1996 and has been the subject of numerous separate hearings of one sort or another, either at first instance in the Court of Appeal or I think on one occasion in the High Court since. It has been set down for four weeks.

sic

55 When the plaintiff renewed his application to amend his particulars of malice and to supply particulars of aggravation of damages following the withdrawal of the defendant’s defences of truth and contextual truth (among others), the judge said, in his first judgment on the seventh day of the trial:

supra

[…]

In short I take the view that it would not be appropriate at this late stage of a case commenced in 1996 where the amended reply was filed in June 1999 and where there have been numerous interlocutory applications and where some weeks have been set aside for the hearing to permit amendment of the reply in the manner suggested.

56 These statements by the judge demonstrate that, in his judgment on the second day of the trial, he had considered “the principles and practices governing the orderly conduct of litigation” (or the principles of case management, as they are usually described), although finding it unnecessary to rely on them on that occasion. The judge actually relied on those principles in the first judgment he gave on the seventh day of the trial, when he held that it was not appropriate “at this late stage” of the case to permit an amendment where some weeks had been set aside for the hearing. The reference to such principles is to the many statements made by the courts in this State and elsewhere concerning the relevance of case management principles to the exercise of discretion in procedural decisions, following the decision of the House of Lords in Ketteman v Hansel Properties Ltd [1987] AC 189, leading up to the decision of this Court in GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 716 and to the decision of the High Court in Sali v SPC Ltd (1993) 116 ALR 625. In the last of those cases, the High Court said (at 636):

The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard.

57 However, the High Court had since that case emphasised that, in Sali, it was dealing with an application for an adjournment, not to amend the pleadings to raise a new issue: State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154. So far as an application for such an amendment is concerned, the High Court drew attention in that case (at 152-153) to the views of Bowen LJ in Cropper v Smith (1884) 26 Ch 700 at 710:

Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.

Clough and Rogers v Frog

As the defence, if established, would be a complete answer in either action, the amendments sought should have been allowed unless it appeared that injustice would thereby have been occasioned to the respondent, there being nothing to suggest fraud or improper concealment of the defence on the part of the appellants. With the exception of the suggestion of prejudice arising in respect of the loss of the possible claim against the nominal defendant, the matters relied upon by the respondent in opposition to the amendment sought go at the most to delay and irregularity only, matters which are relevant to costs but do not constitute injustice to the respondent in the sense in which that expression is used.

JL Holdings

Sali v SPC Ltd

[…]

Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.

58 That is not to say that the lateness of the application was irrelevant to the factors on which the judge had to exercise his discretion. The delay in making the application created a heavy onus on the plaintiff to demonstrate that the defendant was not prejudiced by the additional issues being raised at that stage in a way which, as Lord Esher MR once put it, could not be compensated by an order for costs: Clarapede v Commercial Union Association (1883) 21 WR 262 at 263; see also Horton v Jones (No 2) (at 309-310); Commissioner for Railways v Bielewicz (at 468). But neither the plaintiff’s delay nor the efficiency of court procedures (or the principles of case management) was, in itself or the two in combination, an answer to the application made.

59 The judge erroneously permitted the efficiency of the court procedures to prevail over the injustice caused by shutting the plaintiff out from litigating the issues in question.

(ii) The assessment of the prejudice to the defendant

60 In his judgment on the second day of the trial, the judge said:

I read … the vast bulk of those decisions last night and it is apparent from that consideration that they could not be adequately dealt with by those on the defendant’s side of the record without a substantial amount of work, both in appreciating all that is said and in taking instructions from the plaintiff [scil defendant] in respect of many of those matters.

I have been informed, without dissent, that last Friday an application was made to Justice Greg James for a stay of these proceedings on the basis of ill-health on the part of the defendant, an application which was refused, but in circumstances where Justice James apparently accepted the fact of the defendant’s ill-health. That ill-health it is submitted is likely to be exacerbated by strain and would impose yet a further burden were the defendant required at this stage to have to deal with the additional matters raised by the decisions subsequent to those of Mr Hammond.
[The proceedings before Mr Hammond were the only ones referred to in the earlier particulars.]

[…]

In my view the burden which the amendment would impose on the defendant’s side of the record, whether or not the defendant’s ill-health is taken into account, is such that the amendment should not be allowed.

61 In his first judgment on the seventh day of the trial, the judge added:

supra

However, this is not a conclusion which I draw. Indeed I remain of the view that the probability is to the contrary.

In part I am influenced at arriving at this conclusion by the terms of Mr Evatt’s remarks to the jury array when addressing them [on behalf of the defendant] pursuant to section 38(8) of the Jury Act [1977] [informing them of the identity of the principal witnesses to be called by the defendant] and to which remarks Mr Stitt has made reference on a number of occasions [on behalf of the plaintiff]. The terms of those remarks were, to say the least, tentative if not inconsistent on the topic of witnesses to be called and by comparison with the hundred odd pages of particulars and the pleadings on the issue of truth certainly suggested to my mind that preparation on those issues was by no means as complete as may have been expected from the documents.

The withdrawal of the defence of truth argued strongly in the same direction.

62 Before dealing with the various matters of injustice or prejudice claimed, reference should be made to the efficacy of an order for costs in the present case, as did the High Court in the JL Holdings case (at 154-155). The defendant has an indemnity from the State Government, unqualified as to amount in respect of damages and costs, so far as this litigation is concerned. This was proved by the defendant’s solicitor in proceedings before G James J (to which reference is made in par [79], infra): Ainsworth v Burden [2005] NSWSC 338 at [5] – [6]. There is no dispute that an order for costs can be met by the plaintiff.

63 The application to amend by adding to the particulars of malice did not raise any issues which had not already been raised some time earlier by the pleadings, particulars and correspondence in one form or another as the case stood on the first day of the trial. The only parts of the case which the plaintiff put forward on the issue of malice in the letter of 4 April (see par [41] supra) which had not previously been expressly identified as part of that case were (i) the Licensing Court judgments of Mr Collins LM in August 1988 and of the Full Bench in August 2001, and (ii) the contents of the Mellis Report.

64 The judgment of Mr Hammond SM on 30 August 1985 is expressly identified in the particulars of malice filed with the Reply. The judgment of the Full Bench in May 1988 is encompassed by the reference in par (n) of the particulars filed with the Reply to the proceedings being “spread over three years” (quoted in par [41] supra). Further particulars of the particulars filed with the Reply, supplied by letter dated 29 January 2001, had identified the inference for which the plaintiff contended as arising from the matters specified in the Reply as being that the defendant had no honest belief in the allegations which had been made before Mr Hammond. That letter had also identified the inferences for which the plaintiff contended as arising from the fact that the allegations made before the Full Bench were withdrawn in November 1988 as being that there had been no basis for making them, and that the intention of the defendant had not been to raise bona fide objections in the Licensing Court but to injure the interests of the plaintiff.

65 The issues raised before Mr Collins LM in August 1988 and the Full Bench of the Licensing Court in August 2001 fall within the period of “over twenty years” of objections filed by the police which the defendant said covered “more or less” the same ground as the particulars of truth supplied in January 2001 (see par [44] supra). No suggestion has been made that those issues differed in any significant way from those raised in either the previous or the subsequent proceedings in the Licensing Court, and they were thus encompassed in the warnings given that the defendant’s belief in the truth of the objections taken in those previous and subsequent proceedings was challenged.

66 As already stated, the plaintiff’s argument is that these judgments and the Mellis Report had rejected all of the defendant’s allegations in the various objections taken to applications by the plaintiff for gaming licences and that the defendant’s persistence in these allegations, notwithstanding all those rejections, demonstrate either that the defendant could not have any honest belief in the truth of what he wrote or that he pursued those allegations with some other animus against the plaintiff.

67 The defendant’s persistence in these allegations in his defence of truth was the subject of a pleading skirmish over the period 2002-2004, when the plaintiff applied to strike out the defences of truth and contextual truth on the basis that the judgments of the Licensing Court were judgments in rem. He was successful at first instance: Ainsworth v Burden [2002] NSWSC 172; but that decision was reversed on appeal: Burden v Ainsworth (2004) 59 NSWLR 506. Special leave to appeal was refused by the High Court on 30 April 2004.

68 On 25 June 2004, and following that ultimately unsuccessful pleading skirmish, the plaintiff’s solicitors wrote to the defendant’s solicitors identifying in general terms the way in which he sought to use the defendant’s persistence in his defences of truth, stating in relation to the particulars of that defence supplied on 5 February 2001:

scil

sic

Your client is well aware that virtually all of these allegations have been the subject of repeated investigation by the Licensing Court and have been found to be without foundation. Yet your client seeks to reventilate all these matters in the knowledge that they have been found to be groundless, and, more seriously, in the knowledge that they have provided no impediments to our client being associated with gaming licences.

Your client’s particularization of these matters is a transparent attempt to delay or frustrate the prosecution of our client’s claim.

69 The absence of bona fides on the part of the defendant in his persistence in his defence of truth was thus fairly, and constantly, raised in the correspondence well prior to the date of the trial. In order to establish that absence of bona fides, it was absolutely essential for the plaintiff to prove the contents of the judgments which are said to demonstrate to any honest-minded person that the defendant’s allegations were untrue. No legal representative of the defendant could have understood otherwise. The plaintiff was, of course, at fault in not making this clear in the particulars filed with the pleadings, but it was clear beyond any doubt in the correspondence well before the date of the trial that the plaintiff’s complaints could only be established by the tender of the contents of the Licensing Court judgments.

70 The contents of the Mellis Report similarly are said to demonstrate to any honest-minded person that the defendant’s allegations were untrue. That report had not been the subject of any prior notice in the correspondence but, at least so far as it deals with the objections taken by the defendant in the Licensing Court and the allegations made in his letter to the Police Minister, the addition of the contents of that report to the evidence in the trial goes no further than the judgments of the Licensing Court other than further confirmation, after a fresh investigation, that the allegations were untrue. The defendant could not therefore have been prejudiced by the inclusion of the later Licensing Court judgments and the Mellis Report in the particulars.

71 The case the plaintiff wished to put forward in aggravation of damages was rejected by the judge in his second judgment on the seventh day of the trial (the “encapsulation” judgment), on the basis that it had been “abandoned” as a result of the letter dated 14 March 1997 in response to a request for particulars of the claim for aggravated damages in the Statement of Claim (which remains there) stating that “[t]he claim for aggravated damages is not presently pressed”: The judge added:

I have ruled that that claim … may not be litigated in this hearing, save and except to the extent it may arise in consequence of the conduct of the defendant and his legal advisers during the course of the proceedings from last Monday until now.

supra

93 I return now to the issues relating to the admissibility of the contents of these documents (see par [49] supra).

94 The contents of the Licensing Court judgments and of the Mellis Report were not tendered in order to prove the truth of what was said in those documents. Although each of the plaintiff’s imputations is that he is not a fit and proper person to be involved in various aspects of licensed gaming, and although each of those documents make findings that the plaintiff is a fit and proper person to be involved in licensed gaming, the documents were not tendered to prove the truth of those findings. On the basis that the defendant was aware of the contents of those documents (see par [48] supra), they were tendered in order to demonstrate that the defendant’s state of mind or conduct in continuing to assert the truth of the allegations he made in his letter to the Police Minister— in the face of the constant rejection of those allegations — was evidence of malice destroying any privilege claimed and a matter in aggravation of damages. On that basis, the contents of the documents were admissible.

95 The judge rejected the documents on different bases, although he reserved until later in the trial the admissibility of parts of them in accordance with the Evidence Act (as business records pursuant to s 69). The principal basis for the rejection of those documents — and, in particular, for the rejection of the Mellis Report — was that they were unfairly prejudicial to the defendant. This was a reference to s 135 of the Evidence Act, which provides:

(a) be unfairly prejudicial to a party; […].

96 Of the Licensing Court judgments, the judge said (in the first judgment on the fifth day of the trial) that they would “undoubtedly be greatly prejudicial to the defendant” because:

The sting of the documents, to my mind, lies in not only the finding that the plaintiff was fit and proper, but a finding in the face of contest, and detailed contest, on that issue and a finding, not only once but on at least four occasions and on the fifth, statements to the effect that after thorough enquiry the police have no objections to raise.

97 Of the Mellis Report, the judge said (in the judgment of the third day of the trial) that it:

[…] is liable to have a prejudicial – possibly heavily prejudicial, effect in that respect. That prejudicial effect would be unfair.

Evidence Act

Among the defences pleaded is one of truth and that is obviously a central issue in the case.

[…]

In its terms the report is of substantial weight in opposition to the claim by the defendant as to the truth of the publication. As counsel for the plaintiff pointed out to the jury, Inspector Mellis’s investigation was extensive and, I may add, he was firm in his conclusions.

In no insignificant measure it is indeed the force in Inspector Mellis’s report which has led me to conclude that it should not be admitted because, while his conclusions are not as I would see it evidence which the jury could take into account on the issue of the plaintiff’s fitness or as to the truth of the matters alleged in the defendant’s letter, I would see it as almost impossible for the jury to put what Inspector Mellis had said out of their mind.

There would be great danger that what he had to say might be unfairly prejudicial for a party, indeed I would put the matter more highly, and this notwithstanding that as a general proposition I take the view that jurors are able to adhere to judge’s rulings as to what they can or cannot take into account. My decision in this case is influenced in large part by the strength of the Mellis report, at least on its face.

This strength, and the emphasis which was placed on the terms of the report by counsel for the plaintiff in his opening, lead me to the conclusion that I should grant the application to discharge the jury.

98 Following the defendant’s withdrawal of his defence of truth, and when the issue of the admissibility of the Mellis Report was again being argued, the judge accepted (in the first judgment on the seventh day of the trial) that the document could be relevant to the issue of aggravated damages in the event that the conduct of the defendant or his counsel became relevant to the very limited basis on which he would permit that issue to be raised — that is, if the truth of the imputations was maintained during the seven days since the trial was listed for hearing. In effect, he left this issue to be determined in the course of the trial, saying:

Evidence Act

My reservation arose partly because of what I see as the prejudicial effect of Mr Mellis’s report, in particular insofar as it expresses Mr Mellis’s opinion on the issue of the plaintiff being a fit and proper person, the contrary being the tenor of the imputation alleged. I held last week when truth was an issue raised by the defence that I would, pursuant to s 135 of the Evidence Act, exercise my discretion not to permit the tender of that report and if truth or falsity is or remains an issue in the case, notwithstanding the withdrawal of the defence, or becomes an issue by reason of any further amendment of the pleadings or particulars I would again reject the tender of Mr Mellis’s report. The report’s prejudicial nature also caused me to defer a final ruling until evidence on the topic of aggravated damages arising from the conduct of the case demonstrated that the report should be admitted.

Evidence Act

99 The judge has wrongly interpreted what is comprehended by the expression “unfairly prejudicial” in s 135. It is not unfairly prejudicial to a party if the material tendered by his opponent merely proves or strongly supports the opponent’s case. The phrase “unfairly prejudicial” or the cognate phrase “unfair prejudice” is used not only in s 135 but also in s 136 and s 137, and the meaning to be given to each of those phrases must be the same — whether or not a weighing exercise is contemplated: Regina v BD (1997) 94 A Crim R 131 at 139. The prejudice to which each of the sections refers is not that the evidence merely tends to establish the case of the party tendering it; it means prejudice which is unfair to the other party because there is a real risk that the evidence will be misused by the jury in some unfair way: DPP v Boardman [1975] AC 421 at 456; The Queen v Duke (1979) 22 SASR 46 at 47-48; Scott v The Queen [1989] AC 1242 at 1258-1259; Regina v Masters (1992) 26 NSWLR 450 at 479; Pfennig v The Queen (1995) 182 CLR 461 at 487-488, 528; Regina v BD at 139; Papakosmas v The Queen (1999) 196 CLR 297 at [29], [91], [98]. See also ALRC 26, vol 1, pars 644, 957.

100 In the present case, the plaintiff relies on the very facts (1) that the Licensing Court on four occasions, in the face of detailed contests, rejected the same allegations made by the plaintiff in his letter to the Police Minister and found that the plaintiff was a fit and proper person, and on another occasion because, after a thorough inquiry, the police had raised no objection to the grant of a licence; and (2) that Detective Chief Inspector Mellis reached firm conclusions, in a forceful report, rejecting the allegations made by the plaintiff in his letter. It is the strength of the findings in each case, and the forceful way in which Chief Inspector Mellis couched those findings, that the plaintiff says should have demonstrated to any honest-minded person that the defendant’s allegations were untrue. It was of vital importance to the plaintiff’s case on malice and aggravated damages to prove the defendant’s perverse persistence in the truth of his allegations in the face of constant rejection of those allegations, after investigation, by the Licensing Court and in the Mellis Report. The material was strongly probative of the plaintiff’s case on malice and damages.

101 In those circumstances, the evidence could be excluded only if its probative value to the plaintiff’s case was “substantially outweighed” by the danger that the evidence might be unfairly prejudicial to the defendant. Even if there was a danger that the strength of the evidence supporting the plaintiff’s case could have some effect on the jury’s view of the defendant’s claim that the allegations were true, that does not mean that its probative value and importance to the plaintiff’s case are substantially outweighed by that danger. It is only by erroneously interpreting the expression “unfairly prejudicial” in the way the judge did that such evidence could have been rejected in the balancing exercise required.

102 At the stage when there was a defence of truth still being put forward by the defendant, the judge appears to have concluded that, because he thought that the jurors would find it “practically impossible” to put the documents out of their minds when considering the defence of truth, the perceived prejudice could not have been cured or reduced pursuant to s 136 of the Evidence Act by limiting the use to which the documents could be put to that for which they were tendered. In a sense, the judge’s conclusion only demonstrates the strength of the plaintiff’s case that these documents would have persuaded any honest-minded person that the allegations were false, and thus their importance to the plaintiff’s case.

103 When the defence of truth was withdrawn, and the issue of truth or falsity was of less importance to the defendant’s case because it was relevant only to damages (see pars [90] – [91] supra), the consideration of a direction pursuant to s 136 became all the more important. Such an order could not have prejudiced the plaintiff, who was in any event prevented by the Evidence Act from using the Licensing Court judgments in order to prove the falsity of the allegations (see par [109] infra). He did not seek to use the judgments or the Mellis Report for that purpose. A strong direction to the jury would of course have been needed, both at the time of the tender and in the summing-up, as to the limited use to which the documents could be put. At that stage, however, the judge said that, notwithstanding the withdrawal of the defence of truth, should the truth or falsity remain an issue in the trial in any way, he would again reject the evidence on the basis of prejudice to the defendant’s case. The only way in which truth or falsity remained relevant (as it always had been relevant) was to the issue of damages.

104 It was submitted by the plaintiff that this ruling by the judge after the defence of truth had been withdrawn was so unreasonable as to be unsupportable, and that sufficient basis for interfering with his decision in accordance with House v The King. I accept that there is considerable force in that submission, as the part which falsity could play in relation to damages is very much less than it would have played in relation to a defence of truth. It is, however, sufficient to say that the decision could only be justified by the judge’s erroneous interpretation of s 135, that evidence which proved or supported the plaintiff’s case was unfairly prejudicial to the defendant within the meaning of that section. That was the fundamental error which the judge made.

105 Nor was there any real scope for the application of s 135 on the basis that the defendant would be procedurally disadvantaged by the admission of this evidence, assuming that such a disadvantage falls within s 135, an issue on which there is conflicting authority and which need not be resolved in the present case: cf Commonwealth v McLean (1996) 41 NSWLR 389 at 400-402; Papakosmas v The Queen at [93]; Ordukaya v Hicks [2000] NSWCA 180 at [6], [35] – [40]; Regina v Clark (2001) 123 A Crim R 506 at [164]; Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 at [55]; Regina v Suteski (2002) 56 NSWLR 182 at [126] – [127]. According to the plaintiff’s case, the defendant had been involved in each of the Licensing Court proceedings either as the former Commander of the Licensing Investigative Unit within the Police Service or the person who was responsible for the preparation of the Licensing Court hearings, so he had previously had an opportunity to test (or to have tested) the material which the Licensing Court had accepted. Similarly, he was involved in the inquiry by Chief Inspector Mellis, and had had assisted that inquiry with avenues of investigation.

106 The rejection of the documents pursuant to s 135 was therefore erroneous.

107 The other basis considered for the rejection of the Licensing Court judgments was s 91 of the Evidence Act, which provides:

(2) Evidence that, under this Part, is not admissible to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose.

108 The judge referred in the judgment on the second day of the trial to the fact that he had indicated during argument that he did not regard the judgments as being admissible having regard, particularly, to the terms of s 91, and he returned to the subject when the plaintiff tendered what were described as the coversheets of the Licensing Court judgments in response to the indication he had given during argument that s 91 prevented the tender of the judgments themselves. In the first judgment given on the fifth day of the trial, the judge expressed the view that even these coversheets ran into problems with s 91, although he acknowledged that s 91(2) would have permitted their tender where not tendered to prove the facts found in the judgments, that the plaintiff was a fit and proper person to hold a gaming licence. He nevertheless held that they were inadmissible because of s 135.

109 It is clear that s 91 does not prevent the tender of judgments which contain findings as to the existence of facts relevant to the issues in the trial in which they are tendered. It merely prevents the judgments from being tendered for the purpose of proving the existence of those facts. If they are admissible for some other purpose — as they are in the present case, in order to demonstrate that they would have persuaded any honest-minded person that the defendant’s allegations were false — they may not then be used to prove the existence of those facts, a consequence which would otherwise have flowed from s 60 of the Evidence Act. In any event, the facts which the coversheets would have established were that a company associated with the plaintiff had made an application for a gaming licence, the police had objected to the grant of that licence, the terms of the grounds of objection, the rejection of the objection and the grant of the licence. None of the those facts was “a fact that was in issue” in the Licensing Court proceedings, and s 91 did not exclude the coversheets stating those facts.

110 In my opinion, therefore, the judge erred in rejecting the Licensing Court judgments and the Mellis Report, and they should have been admitted on the material which was before him.

Relevance of the defendant’s conduct

111 The plaintiff complains of the restriction imposed by the judge on his case of aggravated damages based on the defendant’s conduct to his conduct since the first day of the trial. A passage from his second judgment on the seventh day of the trial quoted earlier (in par [98] supra — the paragraph commencing “A fourth issue”) refers to the claim being “based upon the defendant’s conduct of the proceedings since the beginning of last week”. The judge had also said (in the first judgment on the seventh day of the trial):

The defence of justification was maintained from the commencement of these proceedings on Monday of last week until yesterday. It is accepted by counsel for the defendant and something which I would have held in any event that the conduct of a defendant and his counsel during the course of a hearing may be relevant on the question of aggravated damages. Counsel accepted that a claim in that regard was still available to the plaintiff if otherwise the requirements of aggravated damages were established […].

112 The plaintiff submits that the jury was entitled to consider in assessing damages the whole conduct of the defendant from the time he sent his letter to the Police Minister down to the time it gives its verdict: Praed v Graham (at 55); Triggell v Pheeney (at 513); and that the judge was in error in imposing such a restriction. That submission is correct. The judge’s ruling, however, appears to have been based on his earlier ruling that the plaintiff had abandoned his claim for aggravated damages when he said in 1997 (before the defendant had even pleaded) that his claim for aggravated damages was “not presently pressed”, and his refusal to permit the plaintiff to supply particulars of that claim (see par [71] supra).

113 I have already held that the judge erred in that ruling (par [73] supra). As I have also allowed the plaintiff’s application to supply particulars of his claim for aggravated damages (par [86] supra), the plaintiff may rely in the new trial (subject to the particulars being updated) on the defendant’s conduct from the time of publication in aggravation of damages in accordance with that authority.

Other issues raised in the appeal

114 In his Notice of Appeal, the plaintiff sought orders setting aside each of the rulings made by the trial judge during the course of the trial, and making rulings on each issue in his favour. That would not be appropriate. At a new trial, the trial judge is not bound by the rulings made at the earlier trial. In this judgment, I have:

supra

Those rulings will protect the plaintiff from suffering from similar errors being made in the new trial. The additional particulars of malice and the particulars of the claim for aggravated damages to be supplied may be reformulated as well as up-dated from those identified in the letter of 4 April 2005.

115 The defendant has applied for the following orders:

116 The defendant has not provided any submissions in support of the orders he seeks. The plaintiff has had no opportunity to respond. Although it is clear that there needs to be a substantial review of the state of the pleadings and particulars in this case, each of the first and second orders sought is not without some controversy, and it is not possible for this Court to make such orders without the assistance of proper submissions. This case was indeed far from being ready for trial when it was given a hearing date. Most of the issues which have arisen should have been the subject of applications in the Defamation List before the case was given such a date. In my opinion, that is where the defendant’s application should now be made, so that the Defamation List Judge (rather than this Court) will have control of the proper preparation for the new trial.

Costs

117 The plaintiff has had complete success in the appeal and, in my view, he is entitled to the costs of the appeal. As to the costs of the trial:

he must (as I have already said — par [86] supra) suffer a costs order against him for leaving it to the last moment to make his application to amend (although he should not be responsible for the costs incurred as a result of the trial date being lost). Taking those matters into account, I would order the plaintiff to pay one-third of the defendant’s costs of the seven days of the trial.

Orders

118 I propose that the following orders be made:

------------------------

22/06/2005 - Date of judgment delivered ommitted - Paragraph(s) On cover sheet

Citations

Ainsworth v Burden [2005] NSWCA 174

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Ainsworth v Burden [2002] NSWSC 172

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CITATION:	Ainsworth v Burden [2005] NSWCA 174 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	15 April 2005
JUDGMENT DATE:	21 June 2005
JUDGMENT OF:	Handley JA at 1; McColl JA at 2; Hunt AJA at 3
DECISION:	1.The appeal is allowed.; 2.The plaintiff's application to amend the particulars of malice and to supply particulars of his claim for aggravated damages is allowed.; 3.The plaintiff is to pay one-third of the defendant's costs of the seven days of the trial.; 4.The defendant is to pay the plaintiff's costs of the appeal.

CATCHWORDS:	Letter written to Police Minister by defendant imputing that plaintiff not a fit and proper person to hold gaming licence or to be associated with holder of such licence - Police Minister directs investigation into allegations made in letter - defamation action based on letter - defendant pleads defences of truth and qualified privilege - malice pleaded in answer to qualified privilege - - - - At trial plaintiff seeks to tender five judgments of Licensing Court and report of investigation into defendant's allegations all rejecting those allegations, of which defendant was aware, as evidence of malice by defendant's persistence in asserting truth of his allegations in face of their constant rejection by authorities - tender rejected by trial judge as unfairly prejudicial to defendant, as strength of findings in favour of plaintiff such that jurors unable to put them out of mind when considering defence of truth - Evidence Act 1995, s 135 - error by judge - - - - At trial plaintiff seeks to amend by adding to particulars of malice and supplying particulars of aggravated damages - judge rejects on principles of case management- similarity of issues in malice and aggravated damages - error by judge - - - - Judge rules that, after withdrawal of defence of truth and in absence of particulars of aggravated damages or of falsity, no issue of truth or falsity arose - discussion of relevance of truth and falsity in defamation - error by judge
LEGISLATION CITED:	Defamation Act 1974 Evidence Act 1995 Freedom of Information Act 1989 Gaming Machines Act 2001 Jury Act 1977 Liquor Act 1982 Ombudsman Act 1974 Registered Clubs Act 1976
CASES CITED:	Ainsworth v Burden [2002] NSWSC 172 Ainsworth v Burden [2005] NSWSC 338 Akerhielm v De Mare [1959] AC 789 Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 Bloch v Bloch (1981) 37 ALR 55 Broome v Cassel & Co Ltd [1972] AC 1027 Burden v Ainsworth (2004) 59 NSWLR 506 Cadam v Beaverbrook Newspapers Ltd [1959] 1 QB 413 Clarapede v Commercial Union Association (1883) 21 WR 262 Clark v Molyneux (1877) 3 QBD 237 Clines v Australian Consolidated Press Ltd (1965) 66 SR 321 Clough and Rogers v Frog (1974) 4 ALR 615 Collier-Garland (Properties) Pty Ltd v Northern Transport Co Pty Ltd (1964) 82 WN (Pt 1) 125 Commissioner for Railways v Bielewicz (1962) 63 SR 466 Commonwealth v McLean (1996) 41 NSWLR 389 Conroy v Conroy (1917) 17 SR 680 Cropper v Smith (1884) 26 Ch 700 Derry v Peek (1889) 14 App Cas 337 Dinsdale v The Queen (2000) 202 CLR 321 DPP v Boardman [1975] AC 421 General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 Heath v Goodwin (1986) 8 NSWLR 478 Horrocks v Lowe [1975] AC 135 Horton v Jones (No 2) (1939) 39 SR 305 House v The King (1936) 55 CLR 499 Howden v Truth & Sportsman Ltd (1937) 56 CLR 416 Jones v Dunkel (1959) 101 CLR 298 Ketteman v Hansel Properties Ltd [1987] AC 189 King v John Fairfax & Sons Ltd [1983] 1 NSWLR 31 Lovell v Lovell (1950) 81 CLR 573 Maxwell v Keun [1928] 1 KB 645 Merivale v Carson (1887) 20 QBD 275 Morgan v John Fairfax & Sons Ltd (1991) 23 NSWLR 374 Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382 Ordukaya v Hicks [2000] NSWCA 180 Papakosmas v The Queen (1999) 196 CLR 297 Pfennig v The Queen (1995) 182 CLR 461 Praed v Graham (1889) 24 QBD 53 Regina v BD (1997) 94 A Crim R 131 Regina v Clark (2001) 123 A Crim R 506 Regina v Masters (1992) 26 NSWLR 450 Regina v Suteski (2002) 56 NSWLR 182 Rigby v Associated Newspapers Ltd (No 2) [1969] 1 NSWR 729 Rodgers v Rodgers (1964) 114 CLR 608 Rookes v Barnard [1964] AC 1129 Ross McConnell Kitchen v John Fairfax & Sons Ltd [1980] 2 NSWLR 845 Royal Aquarium Society v Parkinson [1892] 1 QB 431 Sali v SPC Ltd (1993) 116 ALR 625 Scott v The Queen [1989] AC 1242 Singleton v Ffrench (1986) 5 NSWLR 425 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 Superintendent of Licences v Ainsworth Nominees Pty Ltd (1987) 9 NSWLR 691 The Queen v Duke (1979) 22 SASR 46 Triggell v Pheeney (1951) 82 CLR 497 Walker v Walker [1967] 1 WLR 327
PARTIES:	Leonard Hastings Ainsworth v Leslie James Burden
FILE NUMBER(S):	CA 40292/2005
COUNSEL:	R R Stitt QC / T D Blackburn SC - Appellant C A Evatt / R K M Rasmussen - Respondent
SOLICITORS:	Dibbs Barker Gosling - Appellant Hunt & Hunt - Respondent

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	21216/96
LOWER COURT JUDICIAL OFFICER:	Hulme J