CITATION: Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9 This decision has been amended. Please see the end of the judgment for a list of the amendments.
COUNSEL: T S Hale SC/R Rasmussen (Appellants) J R Sackar QC/K P Smark SC/E Raper (Respondent)
SOLICITORS: Penhall & Co (Appellants) Mallesons Stephen Jacques (Respondent)
CATCHWORDS: DEFAMATION - defences - privilege - qualified privilege - privileged occasion - reciprocity of duty and interest - connection between defamatory imputation and privileged occasion - defamatory imputation concerning dishonoured cheques DAMAGES - assessment of damages in actions for defamation – assessment of damages in actions for breach of contract
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9
Case
[2009] NSWCA 9
Decision Date
CaseChat Overview and Summary
This case concerned appeals by Mr Aktas and Homewise Pty Limited (Homewise) against decisions of the trial judge. The dispute arose from Westpac Banking Corporation Ltd's (Westpac) conduct in dishonouring cheques issued by Homewise, which Mr Aktas was associated with. The jury found that Westpac's actions conveyed several defamatory imputations concerning Mr Aktas and Homewise's financial standing and ability to meet its obligations. Mr Aktas and Homewise claimed damages for defamation and Homewise also claimed damages for breach of contract.
The primary legal issues before the Court of Appeal were whether the publication of the defamatory imputations by Westpac was protected by qualified privilege, and if not, the assessment of damages for defamation and breach of contract. Specifically, the court had to determine if there was a reciprocity of duty and interest between Westpac and the payees of the dishonoured cheques, and whether the defamatory imputations were sufficiently connected to that privileged occasion. The court also considered the assessment of damages, including the principles of reparation, consolation, and vindication, and the impact of time on the damage suffered, as well as the issue of mitigation of loss.
The Court of Appeal found that the occasion of publication was privileged. It reasoned that Westpac, having decided to refuse payment of the cheques, had a duty to communicate this decision to the payees or their banks, who had a corresponding interest in receiving such communication. The endorsement "Refer to Drawer" was considered conventional and relevant to this privileged occasion, thus extending privilege to the imputations conveyed. Consequently, the court determined it was unnecessary to fully re-examine the damages for defamation. However, the court did uphold Homewise's appeal in part regarding contractual damages, quashing the original award and substituting a new sum.
Orders
Orders of the court
1.The appeal by Mr Aktas dismissed with costs. 2.The appeal by Homewise upheld in part. The award of damages for contract in the court below quashed and an award of damages in the sum of $117,000 substituted. 3.Otherwise the appeal by Homewise dismissed. Homewise ordered to pay 60 per cent of Westpac's costs of the appeal.
Background
Background to the litigation
No further correspondence was received from the appellants before proceedings issued in November 2002.Staff resignations at Homewise and background of the dispute with Century 21 At the beginning of December 1997, Homewise employed a number of people. By June 1998 some of the employees, notably Mr Branley, who was the licensee, Mr Kong, who was a senior sales executive, Mr Shi and Ms Wheat had left. The appellants claimed that their departure was a direct result of Westpac’s conduct. Mr Branley and Mr Kong left Homewise to set up a Century 21 office in Lidcombe in the first quarter of 1998. Although there were indications, particularly in evidence from Mr Nagle, the local member of Parliament, that Mr Branley may have left because of possible damage to his reputation from the defamation, the trial judge found that Westpac’s conduct was not the primary reason for their departures (at [8]). Her Honour found that Mr Shi’s departure was immaterial because, although he left in March 1998, he returned and resumed duties for two periods in April and June 1998. Her Honour also found that Ms Wheat left Homewise’s employ for unrelated reasons (at [9]). Neither Mr Branley nor Mr Kong gave evidence at the trial. There was evidence, which her Honour accepted, that Century 21 had been looking to engage a franchisee in Lidcombe. Mr Aktas confirmed that Century 21 had already destabilised his office by December 1997 by approaching some of his staff. Her Honour found that the troubles at Homewise with dishonoured cheques may have hastened the departure of employees who were intent on leaving in any event. There is no reason to doubt the correctness of her Honour’s finding. The imputations found by the jury In respect of Mr Aktas, the jury found that the matter complained of conveyed the following defamatory imputations:“(a)That Mr Paul Aktas had caused Homewise Realty Pty Limited to pass a valueless trust account cheque.(b) That Mr Paul Aktas had failed to ensure that Homewise Realty Pty Limited was able to meet its obligations to clients entitled to payment of moneys from its trust account.(c) That Mr Paul Aktas had failed to ensure that Homewise Realty Pty Limited did not default in the payment to clients of moneys from its trust account.(d) That Mr Paul Aktas had failed to ensure that Homewise Realty Pty Limited paid its debts as they fell due.” In respect of Homewise, the jury found that the matter complained of conveyed the following defamatory imputations:“(a) That Homewise Realty Pty Limited was unable to pay its debts as they fell due.(b) That Homewise Realty Pty Limited was unable to meet its obligations to clients entitled to payment of moneys from its trust account.(c) That Homewise Realty Pty Limited had defaulted in the payment to the clients of moneys from its trust account.(d) That Homewise Realty Pty Limited had passed a valueless trust account cheque.” In their original statement of claim, the appellants also pleaded the following imputations concerning Mr Aktas:“(a)the First plaintiff passed a cheque that he knew to be valueless(b) the First plaintiff passed a trust account cheque that he knew would not be honoured on presentation at the bank”These imputations were abandoned in the amended statement of claim.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
CLELLAN CJ
The issue was raised in the present case because the respondent conceded at trial that it had no interest or duty in publishing the imputations found by the jury. That concession was sought to be withdrawn on the appeal. There being no prejudice to the respondent leave to withdraw the concession should be granted. However, the fact that it was made and on further reflection, no doubt after the publication of the judgment of McColl JA in Lindholdt, withdrawn, is of no consequence. The defence was correctly pleaded.Conclusion with respect to qualified privilege In my judgment the matter giving rise to each of the imputations was published on a privileged occasion. Having decided to refuse payment of the cheques Westpac had a duty to communicate its decision to the payees or their banks. The payees had the necessary interest in receiving that communication. The endorsement “Refer to Drawer” was conventional advice using an expression common to banking arrangements. Its use by Westpac was relevant to the privileged occasion and accordingly the imputations which the jury found to arise were themselves privileged.Damages The trial judge assessed damages in defamation for Mr Aktas in the sum of $50,000. She assessed damages for Homewise in the sum of $117,000. Her Honour awarded the sum of $84,500 to Homewise for the breach of its contract with Westpac. The appellants challenge each decision. In particular her Honour’s finding that the appellants unreasonably failed to mitigate and the consequences of that failure are disputed. Because I am satisfied that the publication was protected by qualified privilege it is not necessary to determine the damage issues relevant to the claim in defamation. However, I am of the opinion that the challenges should fail. An award of damages in defamation serves three purposes. It provides reparation for the harm done to the plaintiff’s reputation; consolation for distress or hurt to the plaintiff’s feelings; and vindication of the plaintiff’s reputation: Carson v John Fairfax & Sons Limited [1993] HCA 31; (1993) 178 CLR 44 (at 60). The first two purposes are frequently considered together. In John Fairfax & Sons Limited v Kelly (1987) 8 NSWLR 131 McHugh JA (with whom Kirby P relevantly agreed) discussed the impact of time on damage caused by a defamation. There may be continuing damage to feelings and reputation after publication right up to the date of the verdict (at 143):“In many cases the award will reflect an amount for continuing injury to feelings and reputation to the date of verdict. Hence the amount awarded may, and usually will, be higher than the amount which would have been awarded as at the date of publication or even as at the date of the writ.”See also Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 the Court of Appeal (Beazley, Giles and Santow JJA). However, the nature and extent of the damage suffered as a result of a defamation depends on the particular facts. It may be that most of the damage to the plaintiff was suffered close in time to the publication, such that continuing damage was minimal: Vilo v John Fairfax & Sons Ltd [2000] NSWSC 1206 (at [25]). The Court of Appeal adopted that view of the facts in Marsden, holding that “the substantial injury to reputation was immediate” (at [1555]). I came to the same conclusion in Davis v Nationwide News Pty Limited [2008] NSWSC 946 (at [14] – [15]).