Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd

Re: AUSTRALIAN OCEAN LINE PTY. LTD.
And: WEST AUSTRALIAN NEWSPAPERS LIMITED and WILLIAM ROSS HARVEY
No. WA G1 of 1983
Trade Practices
58 ALR 549

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

Toohey J.

CATCHWORDS

Trade Practices - whether publication of certain newspaper reports constitutes conduct falling within s.52 - whether mere reporting of opinions misleading and deceptive conduct - facts necessary to establish a misrepresentation by a newspaper - requirement that representation be likely to lead a reader into error and that applicant suffered damage as a result - whether printer "knowingly concerned" in or a party to a contravention - claim in defamation pendent to s. 52 claim

Defamation - whether words published capable of defamatory imputation - whether publication fair comment - scope of "public interest" - relevance of s.5 of Criminal Code Act (W.A.) and ss.355, 357 of Criminal Code - justification - whether report a statement of fact or opinion

Damages - mitigation - observations on measure of damages when assessing future losses - whether corporate trustee of a unit trust entitled to sue in respect of losses suffered by unit holders by reason of injury to the reputation of the corporate trustee - whether company operating at a loss entitled to damages for loss of income

Evidence - onus of proof under s.52 - effect of failure by respondents to give evidence of facts peculiarly within their knowledge

Practice and Procedure - form of pleading defamatory imputations

Trade Practices Act 1974 ss. 52, 75B, 82

Criminal Code Act 1913 (W.A.) s. 5

Criminal Code (W.A.) ss. 355, 357

HEARING

PERTH
#DATE 21:2:1985

ORDER

1. The respondents pay to the applicant damages in the sum of $125,000.

2. The respondents pay the applicant's costs of the application.

3. Execution on the judgment be stayed for a period of 28 days.

JUDGE1

The background

At about 8 am on 8 January 1982 the M.S. Dalmacija berthed at the passenger terminal in the port of Fremantle. The Dalmacija had been on a Far East Christmas cruise which left Fremantle on 14 December 1981 and took in Singapore, Hong Kong, Manila and Surabaya.
The ship encountered rough weather, particularly between Singapore and Hong Kong and off the coast of Western Australia a day or two before returning to Fremantle. Six passengers disembarked at Hong Kong and flew back to Perth.
When the Dalmacija berthed at Fremantle on 8 January representatives of the press and television were waiting, apparently as a result of information received from one or more of the passengers who had disembarked at Hong Kong. Representatives of the media included Joanne Fowler and John McCourt of the Daily News, an afternoon newspaper circulating throughout Western Australia, and Peter Cameron Cotton, a reporter with The West Australian, a morning newspaper circulating throughout the State. There was a representative or representatives from a television station, Channel 9, though these persons were never identified. Some account of the voyage of the Dalmacija was broadcast on radio that day but there was no evidence that any representative of a radio station was actually present when the ship berthed.
There were more than 150 passengers on board the Dalmacija. As neither Miss Fowler nor Mr. McCourt gave evidence, it is not possible to say how many persons they interviewed. Mr. Cotton spoke to a number of passengers; this matter is referred to in more detail later in these reasons.
The front page of the Daily News published on the afternoon of 8 January carried the dramatic headline "NIGHTMARE, SAY SHIP PASSENGERS". There followed an article occupying most of the front page, together with photographs of passengers, in which was reported the criticisms of a number of passengers concerning the voyage. Some criticisms were in direct speech and attributed to particular passengers; some were attributed to passengers without identification. The article also included material about which there was an issue whether it represented editorial comment or the reported views of passengers.
Distribution of the Daily News of 8 January was accompanied by billboards, carrying in bold lettering the words "NIGHTMARE VOYAGE SAY PASSENGERS".
The West Australian of 9 January carried on page 5 a shorter article headed "Criticism, praise for cruise ship" which reported both criticism of and praise for the cruise by passengers.
The Daily News of 11 January carried on page 7 a smaller article still, headed "Cruise passenger: Drill 'inadequate'". The article mainly related critical comments about lifeboat and safety drill by Albert Stranger, a passenger on the voyage. Mr. Stranger was one of those who left the ship at Hong Kong.
The West Australian of 12 January carried on page 5 an article headed "Passenger faults cruise-ship drill" in which there was some repetition of Mr. Stranger's criticisms together with extracts from letters written by passengers to the newspaper saying how much they enjoyed the cruise.

The parties and the causes of action
At the time of publication of these articles the Dalmacija was under charter to Australian Ocean Line Pty. Ltd., the applicant in these proceedings ("A.O.L."). The respondent, West Australian Newspapers Limited, is the publisher of the Daily News and The West Australian and Mr. Harvey is the printer of those papers.
The applicant contends that the billboards, articles and photographs were misleading or deceptive or likely to mislead or deceive within the meaning of s.52 of the Trade Practices Act 1974 and that they were also defamatory of A.O.L. In these proceedings the applicant claims damages pursuant to s.82 of the Act for conduct in contravention of s.52 and damages for defamation. As the applicant contends that very large sections of the newspaper articles were in contravention of the Act and were defamatory, I attach to these reasons a copy of each article. It will be necessary to refer to each in some detail.
The hearing occupied six weeks and 108 witnesses were called, 78 of whom travelled on the ship, either as passengers or as employees of A.O.L. There are difficult questions of fact and law to be resolved.
It may be tempting, at least from one viewpoint, to see this as a case about freedom of the press or, from another point of view, as a case about the rights of the individual. But in the end, so far as the claim under s.52 is concerned, it is a matter of coming to grips with a relatively novel piece of legislation operating in an unusual context. And, so far as the claim in defamation goes, it is a matter of determining the relevant principles of statute and common law and applying them to a complex set of facts.

The applicant
Before turning to the voyage itself and the events which gave rise to the publication of the newspaper articles, it is desirable to say something about the applicant and the M.S. Dalmacija.
A.O.L. is a company incorporated in Western Australia; it was acquired as a shelf company in December 1980 or thereabouts under the name Tarnflame Pty. Ltd. The first directors of the company were Alexander Stanislas Bajada (who has been the governing director since December 1981), his father Mario Nicholas Bajada, his uncle Max Bajada, Roland Zar and Peter Smith. The Bajadas have a family tradition of involvement in the shipping industry stemming from their grandfather who carried on business in Alexandria. Mr. Zar and Mr. Smith were the principals of a travel agency business known as Matway Travel.
Towards the end of 1980 there were discussions between the persons just mentioned regarding a proposal by Mr. Zar to charter a ship for cruises around the Australian coast and in South East Asia. Mr. Zar arrived in Western Australia from Egypt in 1949 and thereafter worked for 15 years in the passenger department of George Wills and Co. who were agents for several shipping lines including Lloyd Triestino and Blue Funnel. Between 1955 and 1972 he was manager for Western Australia of Flotta Lauro, an Italian shipping line that operated a regular passenger service between Australia and Europe. In 1972 Flotta Lauro ceased operations in this country and Mr. Zar became the Australian general manager of Singapore Australian Shipping Co. That company operated a ship-jet service out of Fremantle. In 1975 Mr. Zar set up in business as Matway Travel. Between 1975 and 1977 Matway Travel acted as general sales agent for C.T.C., a company operating Russian cruise ships out of Australia. About the end of 1977 C.T.C. opened its own office in Perth. Mr. Zar then began to look around for a ship which he could charter for cruises out of Fremantle. In 1979 he learned of the Dalmacija, a Yugoslav ship. Later he travelled to Europe to inspect the ship, sailed on her and had discussions with various persons in Yugoslavia. In this way he came to make the proposal to the Bajadas and Mr. Smith.
By an agreement in writing dated 15 January 1981 Tarnflame agreed with Hutro Union Dalmacija-Oour Dalmacijaturist ("Dalmacijaturist") as disponent owner of the Dalmacija to take the vessel on hire. The ship's owner was Jadrolinija, a Yugoslav corporation from which Dalmacijaturist had the ship under a head charterparty arrangement. It will be necessary to make further reference to the terms of the charter but it is enough for present purposes to note that the initial period of the charter was 14 November 1981 to 21 May 1982.
It will also be necessary at a later stage to explain the relationship between Tarnflame, A.O.L. and other companies and unit trusts through which the Bajada, Zar and Smith families operated.

The Dalmacija
The Dalmacija was built in Trieste in 1965. It underwent a complete modernisation in 1968-1969 and was refitted and refurbished in 1981. Its length overall is 116.8 metres; its gross tonnage is 5,650; it has a cruising speed of 15.5 knots and a maximum speed of 18 knots; it is powered by 2 main engines; it has a passenger capacity of 312 and a crew of 110.
The Dalmacija is smaller than the State ships which used to sail between Fremantle and Darwin and is smaller than the Centaur which used to ply between Fremantle and Singapore. Nevertheless it has cruised in the Mediterranean and around the West Indies and has been accorded the highest classification as a passenger vessel by the international classifying authority Bureau Veritas.

The charterparty
By the terms of the charterparty the basic rate of hire was $US12,500 a day, subject to adjustment according to circumstances. In gross the amount payable under the charterparty was some $US2,330,000 of which 10% was paid as a deposit. The balance was payable by instalments with provision for cancellation on default. Payment was to be made to the disponent owner of expenses for food because it was the owner's responsibility to provide not only a master and crew but also all food and victualling services including liquor. Provision was also made for payment to the owners of charges relating to the disembarkation of passengers at various ports. While the initial period of the charter was 6 months, there were two options for renewal for successive seasons, the first exercisable by 15 December 1981 and the second by 15 September 1982.
The charterparty itself contained an itinerary of cruises for the 1981-1982 season. It provided for three Far East cruises, some round Australia cruises and several weekend cruises off the coast of Western Australia. The first cruise was the outgoing voyage from Venice to Fremantle and the last the return voyage to Venice from Fremantle. As it happened, some changes were made to this program.
There were a number of addenda to the charterparty. By addendum No. 1, dated 11 September 1981, changes were made in the agreed rates so that the total amount payable was increased from $US2.3 million to about $US3.6 million. Special arrangements were made for discounts and adjustments in rates in the event that bookings did not meet expectations. Addendum No. 2, also dated 11 September 1981, reflected arrangements made for Dalmacijaturist to act as general sales agent in Europe, particularly for the southbound and northbound voyages. By addendum No. 3, also dated 11 September 1981, Dalmacijaturist agreed to meet some of the costs of additional advertising in Europe, having regard to what was described as the long term interests of the parties. By addendum No. 4, dated 11 December 1981, some financial concessions were made to A.O.L. by reason of the disappointing level of initial bookings. By addendum No. 5, dated 18 December 1981, Dalmacijaturist agreed to refund to A.O.L. 5% of the total hire of the Dalmacija if A.O.L. carried out the full program and made payments on the due dates. The option time limit was extended to 15 January 1982.

Promotion of the Dalmacija
To promote the venture A.O.L. formed four committees of its board of directors - one to deal with advertising, one with finance, one with entertainment and the fourth to handle preparation of the ship. The advertising committee comprised Alex Bajada, Roland Zar and Selwyn Bajada (Max Bajada's son). Advertising consultants were engaged to carry out a campaign of promotion involving advertisements and articles in newspapers and advertisements on radio and television. Initially A.O.L. employed Ad-Link to handle its advertising. Ad-Link produced a coloured brochure entitled "Cruise With The Great White Yacht MS Dalmacija", containing details of cruises and general information relating to the ship. Because of changes made from time to time in the Dalmacija's program, there were several editions of the brochure, each in a different colour. The brochure was distributed to travel agents. It was Mr. Zar's idea to refer to the Dalmacija as "The Great White Yacht" and that description featured prominently in advertising and in references to the ship.
Some time in 1981 A.O.L. engaged as its advertising consultant the firm of McAuliffe and Goff. In several reports prepared for A.O.L., McAuliffe and Goff made recommendations for the promotion of cruises including advertising on radio and television and in the press. In the main those recommendations were adopted. In or about September 1981 McAuliffe and Goff produced a brochure entitled "On and about the Great White Yacht", containing information about cruises and about the places the Dalmacija would visit. That brochure was also distributed to travel agents.
Between February 1981 and April 1982 there was an extensive program of newspaper advertising in which the description "The Great White Yacht" was prominent.
Alex Bajada, Mario Bajada and Roland Zar were cross-examined about the use of the expression "luxury" which appeared in a number of newspaper advertisements prepared by McAuliffe and Goff relating to the Far East Christmas cruise. It appeared in such contexts as "25 days of luxury cruising", "Imagine the romance and luxury of a Far East Christmas cruise on board the Great White Yacht the MS Dalmacija" and "Treat yourself to 25 nights of all the luxury and good living you can take on board the M.S. Dalmacija". All three directors said they were opposed to the use of the word "luxury" in advertising the Dalmacija. Mr. Zar said that in his discussions with Ad-Link he mentioned that the word "luxury" was to be avoided. In his opinion, the Dalmacija was not a luxury ship. Mario Bajada said that he was not happy with the use of the word in advertising as it had been the company's policy not to use the word. He expressed the opinion to Selwyn Bajada that "luxury" should not be used; he thought it misleading to "a certain degree" (transcript 2521). Alex Bajada said that when he became aware of the use of the term "luxury" in advertisements, he told Selwyn Bajada that in his opinion the Dalmacija was not a luxury vessel. In his words, "I never allowed it to be used again". (transcript 457)
The description "luxury" was capable of misleading prospective passengers. But I do not think that anyone was misled by it. In any event its use was only of peripheral relevance to the issues in this action.
The cruise the subject of these proceedings was also advertised as a "Christmas New Year Celebrity Cruise", this being a reference to persons, associated with radio and television, who travelled on the ship.
A.O.L. negotiated a promotional scheme with radio station 6IX in which the radio station advertised the Far East Christmas cruise and offered a discount of $1,000 (for each couple) to those who booked passages with a 6IX "Getcha Card". The advertisement also noted that those who booked with a Getcha Card qualified for participation in a draw from which "One lucky traveller will receive a total refund on his or her fare". The Getcha Card advertisement appeared in October 1981 at a time when bookings for the Far East Christmas cruise were not up to A.O.L's expectations. The offer of a $1,000 discount caused some discontent among those persons who had already booked passages, a discontent which was only partly alleviated by the offer of vouchers for the casino on board ship.
A.O.L. negotiated with West Travel Service, a travel agency operated by WA Broadcasters Pty Ltd which is a wholly owned subsidiary of the first respondent, for a package European tour incorporating the southbound voyage of the Dalmacija from Venice to Fremantle. In that connection A.O.L. received favourable publicity through a number of promotional articles appearing in The West Australian and written by its travel writers.
The Dalmacija arrived in Fremantle on 8 December 1981. There was a weekend cruise from 11 to 14 December which was almost fully booked. A.O.L. obtained surveys from passengers who travelled on the maiden voyage as well as those on the weekend cruise to see whether there were any complaints or matters that might require improvement. One complaint related to the price of liquor, particularly on the weekend cruise when duty free arrangements did not apply. Under the charterparty the sale of liquor was in the hands of Dalmacijaturist. The price of liquor and of soft drinks was a matter of some criticism by passengers during the cruise the subject of this litigation.

The Far East Christmas cruise
I propose now to say something more of the Far East Christmas cruise with which these proceedings are concerned. At this point I shall not deal so much with the evidence of particular witnesses as sketch the events that later featured in the newspaper articles. It will then be necessary to refer to the articles in detail against the background that their contents are alleged by the applicant to constitute misleading or deceptive conduct and to be defamatory.
When the Dalmacija left Fremantle on 14 December 1981 she was carrying 162 passengers, 38 of whom were travelling free of charge, either because they were VIPs invited by A.O.L. or because they were what a number of witnesses referred to as "media personalities". This description was used of some half dozen or so persons, known from radio and television, who had been invited on the cruise without charge in return for their willingness to play an active role in various forms of entertainment on board No formal arrangement was made with them by A.O.L. and there was uncertainty as to just what was expected of them. As mentioned earlier, their presence was used by A.O.L. in its advertising for the cruise.
There was a cruise director, Peter Bruce de Young, who had two assistants, Rhonda Meloncelli and Karen Janeen Neilsen. These three persons were employees of A.O.L.; their duties were to look after the interests of passengers and to act as a liason with the captain and crew. These duties included preparing a daily program of activities and of information to passengers about the position of the ship and weather conditions. Some witnesses were critical of the way in which Mr. de Young carried out his duties; others praised him. The views expressed by passengers were, I think, very much a reflection of their attitudes to the cruise generally.

The coloured brochure, to which reference has been made, described the Dalmacija as "crewed by 110 professional English speaking Yugoslav officers and men ... ". The evidence indicated that, while the captain and a number of the officers spoke good English, many of those who waited on tables and attended to the cabins did not. However most passengers were able to communicate their needs without much difficulty.
The passengers' cabins were on four decks - promenade deck, upper deck, main deck and ocean deck (these are descending degrees of cost and comfort).

Lifeboat drill
The Dalmacija encountered rough weather shortly after leaving Fremantle and as a result lifeboat drill was delayed There was some uncertainty in the minds of the passengers who gave evidence just when the drill took place though most put it two or three days out of Fremantle. The ship's log, which was tendered in evidence, recorded for Thursday 17 December 1981:

"At 10.00-10.20 executed alarm exercise, 'ABANDON SHIP' for passengers and crew".

I am satisfied that this was the day on which lifeboat drill was carried out.

Each cabin contained information as to the whereabouts of lifejackets in the cabin, instructions as to how to put them on and the location to which the occupants should go in the event of an alarm. Some witnesses were critical of the way in which the lifeboat drill was conducted, saying that it was little more than a muster of passengers at boat stations, with some inspection to ensure that lifejackets were worn properly. It is clear that there was no lowering of lifeboats or instruction to passengers as to how they should behave in the event of having to board a lifeboat. It is also clear that the drill was not repeated though individual instruction may have been given to a few passengers who boarded the Dalmacija at Hong Kong.
The extent to which the correct wearing of lifejackets was checked seems to have depended on the person checking. Most witnesses said that their lifejackets were checked by a ship's officer or member of the crew or in some cases by Mr. de Young. Some said the inspection was cursory though others referred to a careful check. Some passengers (for instance James Henry Charles Lock, Thelma Annie Lock, Malcolm Nicholls, Albert John Stranger, Dolores Patricia Bailey and Elsie Maude Highet) compared the drill on the Dalmacija unfavourably with drills they had experienced on other ships.
I am satisfied that there was adequate instruction in each cabin as to the whereabouts of lifejackets, the putting on of jackets and the location of the relevant boat station. I am also satisfied that there was an organised checking of lifejackets but that the standard of checking varied considerably. The standard of lifeboat drill fell below that on a number of other passenger vessels.
When the Dalmacija reached Singapore she was unable to berth in the passenger terminal. Whether this was because the ship was late into port or because of a breakdown in administrative arrangements did not emerge with any clarity. The fact is that the berthing took place some distance from the passenger terminal and that this gave rise to complaints from a few passengers because of the distance they had to walk. However I accept the evidence of Mr. de Young that, when he learned where the Dalmacija was to berth (which was before she docked), he made arrangements through a department store in Singapore for buses to pick up and drop passengers "about a 100 yards" from the ship. It is not without significance that the complaints about disembarkation, though vociferous, were from a few. The great majority of passengers who gave evidence had no complaint to make about disembarkation in Singapore.

Singapore-Hong Kong
The Dalmacija was due in Hong Kong at 6 pm on 25 December; due to rough weather she did not berth until 8.30 am on 26 December. There was much evidence from passengers as to the condition of the weather and seas between Singapore and Hong Kong. The evidence varied a great deal as there was inevitably a subjective reaction to the conditions that were experienced. It must be remembered too that there was a high proportion of elderly persons travelling on the Dalmacija.
Some reference must in due course be made to the evidence of the passengers but it is helpful to begin with entries in the ship's log which may be taken to be a reasonably objective assessment. The Dalmacija left Singapore at about 9 pm on 21 December. The relevant entries in the log for the ensuing days were as follows:

22 December

"Strong wind blowing - NE force 6-7 Beauforts. Sea from the same quarters, strength 5-6. Ship stumbles appreciable, consequently there is a loss of speed".

23 December

"Blowing strong NE monsoon, force 7-8 Beauforts; sea very rough. Ship stumbles appreciable and there is a loss of speed".

24 December

"During the day blowing strong NE monsoon; 30-35 knots. Sea very rough; the ship is appreciable stumbling and the speed is 13 knots".

25 December

"Weather: wind moderate to strong NNE monsoon; sea from the same direction, strength 5. Ship stumbles and rolls ... At 12.30 stabilisers switched on".

The word "stumbles" is not a nautical term; the log was written in the Yugoslav language and "stumbles" is simply the translator's attempt to render a word into English. Having regard to the evidence of Captain Adams about the likely movement of the Dalmacija at the times in reference to which the word is used and also to the evidence of Mr. Lamond, and as a matter of common sense, I am satisfied that a more accurate expression is "pitches". Pitching is the motion of a ship as it travels in the direction of waves, in distinction to rolling which is the movement caused when the sea is moving into the side of the ship
The Court heard evidence from Malcolm Hugh Lamond, a meteorologist now in private practice but formerly the regional director of the Bureau of Meteorology in Sydney. Mr. Lamond was asked to examine the weather and sea conditions experienced by the Dalmacija from the time it left Fremantle on 14 December 1981 until its return on 8 January 1982. Mr. Lamond had access to a wide range of documentary material in the preparation of a report. I have no hesitation in accepting his oral and written evidence.
There is no doubt that the Dalmacija experienced strong winds and rough seas between Singapore and Hong Kong. The roughest part of the voyage was encountered on 23 and 24 December; thereafter conditions improved. I borrow this summary from Mr. Lamond's report.

"It is evident that for the entire voyage to Hong Kong, the M.V. Dalmacija has steered nearly directly through a surge (wind maxima) in the NE monsoon, caused by a strong high pressure ridge extending south from central Asia, whereby generally prevailing NE winds at about 20-25 knots have increased to 25-30 knots and occasionally bordered on the threshold of gale force (33 knots). Although the vessel pitched appreciably, roll should have been minimised as the sea and swell was nearly directly head on. The weather remained mostly fine and cloudy with the temperature a mild 23-25 C". (Exhibit 66 p.5)

It seems that word got around on the ship that the rough weather experienced was associated with typhoon "Lee". This view was rejected by Mr. Lamond who commented in his report:

"At no stage during the entire voyage did the vessel encounter rough seas or weather conditions caused by tropical cyclones. The strong winds and rough seas encountered for part of the voyage resulted from surges in the prevailing, steady direction, trade winds - or monsoons - associated with high pressure (fine weather) systems and typical of regular oceanic conditions, though varying in latitude, throughout the year in both hemispheres". (Exhibit 66 p.2)

At the time the centre of typhoon Lee entered the South China Sea south of Manila on 26 December 1981, the Dalmacija had already berthed or was about to berth at Hong Kong, about 750 nautical miles to the northwest of the storm centre.
From an examination of long term records and climatic statistics Mr. Lamond was of the view that December-January is a time when the combined probability of a tropical cyclone or typhoon occurring in the region traversed by the Dalmacija is near the minimum for all months of the year. In his further view, the December-January period represents a close-to-optimum period of the year for more pleasant weather conditions at ports of call in the South China Sea. Any criticism of A.O.L. for planning the Far East Christmas cruise when it did cannot be sustained.
There is no doubt that some passengers found conditions between Singapore and Hong Kong very uncomfortable indeed. A number were disconcerted by what they described as a shuddering in the Dalmacija in rough seas. The Dalmacija has twin screws, each controlled by a governor. When they come out of the water (as they do to some extent in rough weather or swells) their speed is automatically reduced though, for a very short time, it actually increases. The speed increases again when the screws go below the water. Captain Adams explained that when the propellers come out of the water there is a time before the number of revolutions is reduced and for that time the ship is shaken or shudders.
Captain Adams referred to a phenonomen known as synchronization, a term used to describe the situation where the length of a ship is equal to or somewhat less than the distance between swells. In such a case the ship tends to lift and fall into the trough between the swells. Captain Marsh used the term "synchronization" in relation to the rolling of a ship rather than its pitching. He explained that, whatever term is used, if a ship is long enough to fit from one swell to the next, it is less likely to pitch than a shorter vessel. But, in Captain Marsh's view, other factors have to be considered including the speed at which the ship is travelling. Because of its size the Dalmacija is more vulnerable to pitching than a longer vessel.
As advertised the Dalmacija was due to arrive in Hong Kong on Christmas Day. Two of the "media personalities" (Anne Elizabeth Sanders and Christopher John Bartlett) had planned to have Christmas dinner ashore. There was no evidence that any other passengers had so planned, indeed the advertising spoke of Christmas day on board the Dalmacija. In any event, Miss Sanders and Mr. Bartlett were most enthusiastic supporters of the Far East Christmas cruise. Christmas lunch and dinner were on board the ship which berthed the following morning in Hong Kong.
Some passengers criticised the lack of preparation for Christmas. I am satisfied that the ship was decorated for the occasion, though to an extent on the initiative of some of the passengers. On Christmas Eve carols were sung and Midnight Mass was celebrated. On Christmas Day there was a non-denominational service. A number of passengers, including Margot Caroline Siemer who assumed the role of Mother Christmas, organised Christmas festivities which seem to have been well attended though it must be remembered that at the time the Dalmacija was passing through some of the worst seas she encountered on this particular voyage
Some passengers were critical of the absence of what they regarded as a traditional Australian Christmas lunch. The evidence was that the meal was of a high standard but that some resented the absence of a Christmas pudding. There was some adverse reaction in the dining room when the Christmas meal was served; there was a banging of bottles and shouting over the absence of a Christmas pudding. This noise undoubtedly emanated from a table where a few "media personalities" were seated. I suspect that the "demonstration" was intended to be light hearted but that the circumstances of the Christmas lunch later assumed greater proportion in the minds of some passengers who were discontented with other aspects of the cruise.
When the Dalmacija reached Hong Kong, six passengers left and flew back to Australia at their own expense. Of these, only Mr. and Mrs. Stranger gave evidence. I am satisfied they left the ship because of Mrs. Stranger's ill health (she was complaining of giddiness, due it seems to the rough conditions between Singapore and Hong Kong) and her reluctance to face more days at sea and the possible aggravation of her condition. Dr. and Mrs. Laurie and Mr. and Mrs. Ridley, the other passengers who left the ship at Hong Kong, did not give evidence.

Hong Kong-Manila-Surabaya-Fremantle
The Dalmacija left Hong Kong at about 4 pm on Sunday 27 December 1981. Once again the ship's log provides the most reliable guide to the weather encountered thereafter. There is nothing to suggest that between Hong Kong and Manila and Manila and Surabaya there were rough seas. Passengers spoke in glowing terms of the weather and seas between Manila and Surabaya.
Some passengers complained of delays in disembarkation, both at Manila and Surabaya. It is not easy to assess how far these complaints were justified, in particular what was meant by delays, for some time must necessarily elapse in the disembarkation of more than 150 passengers. Some passengers spoke of holdups in disembarkation at Manila and Surabaya but were not critical of the ship's organisation in this respect. They said that the holdups were due to the actions of local officials. There is no doubt that the attitude of passengers to disembarkation was to a large extent a reflection of their general attitude. In other words, there were some passengers who had complaints about many aspects of the cruise and others who said they thoroughly enjoyed themselves.
The first indication in the ship's log of a deterioration in the weather after the Dalmacija left Surabaya appeared in the entry for Wednesday 6 January 1982 which read:

"Sailing along the West Australian Coast. Weather: strogh (presumably strong) SSW wind 6-7 (25-30 knots); sea very rough; ship stumbles appreciable and losses on speed".

The entry for Thursday 7 January read:

"Sailing along the West Australian Coast ... During the morning hours strong wind from SSW, force 6-7; sea from the same direction, 6 Beauforts. Wind and sea abating during the day".

A number of passengers found the last day or so out of Fremantle the most uncomfortable of the voyage. It may be that, having experienced good weather for a number of days, they did not expect to encounter rough seas again before disembarkation at Fremantle. Witnesses spoke of rumours that passengers had sat up all night or stayed on deck, in some cases wearing lifejackets. No doubt the rumours gained strength by repetition. The concrete evidence was as follows.
Bettie Mary Haynes said that on the night before disembarkation at Fremantle she was apprehensive because of the shuddering of the Dalmacija and she got out her lifejacket. So too did her companion, Ivy Ella Carmody. However they did not put on the jackets nor did they leave their cabin.
Eunice Gwen Smith was travelling on her own. One night (she thought it was two nights before disembarkation at Fremantle) she sat on the floor of her cabin wearing her lifejacket. She described that occasion as "the roughest part of the trip that I can remember". (transcript 2812)
David Martin Kleeman, who was 19 at the time, was travelling with his parents, though after the Dalmacija left Singapore he was in a cabin on his own. He described how, as the ship was coming down the coast of Western Australia ("I think it was about opposite Shark Bay or somewhere in that region" - transcript 3003), there was a continual banging as the bow of the ship hit the water. He was fearful for his safety, mainly because he was some distance from any reasonable exit, and so he went on deck with his lifejacket. This was about 2 am and he remained there for three hours or so; as dawn was breaking he returned to his cabin. He carried his lifejacket; he did not wear it. While he was on deck, Mr. Kleeman spoke to a woman who was sitting in a deck chair and wearing a lifejacket. He said that the woman was on deck when he arrived and, to the best of his recollection, was still there when he left. Mr. Kleeman was unable to identify the woman and, although many passengers gave evidence, the person was not identified.

The publications in question
It is now convenient to deal with the newspaper reports in the order in which they were published.

Daily News 8 January 1982
As part of the distribution of the Daily News on 8 January 1982, billboards carried the words:

"NIGHTMARE VOYAGE SAY PASSENGERS".

Mention has already been made of the headline on page 1 of the Daily News. It read:

"NIGHTMARE, SAY SHIP PASSENGERS"

This was followed immediately by the sentence:

"Perth people on a 25-day Christmas holiday cruise returned to Fremantle today saying the voyage was a nightmare".

It should be said immediately that there was no evidence nce that any passenger on the Dalmacija told either of the Daily News reporters that the voyage was a nightmare. For that matter there was no evidence that any passenger made such a remark to Mr. Cotton, the reporter from The West Australian. While it is conceivable that a passenger may have made some such remark (although there was no evidence of this), it is inherently unlikely that a number of passengers did so. I say this, having regard to the many passengers who were called as witnesses by the applicant and the respondents, none of whom testified to making such a remark. In examination-in-chief Alex Bajada said that when he was interviewed by the Daily News reporters on board the Dalmacija on the morning of 8 January the word "nightmare" was not put to him. It is significant that in the course of a lengthy and thorough cross-examination it was never suggested that any reporter had mentioned the word to him.
Against the objection of the respondents' counsel I allowed a question to be put to passengers in these terms:

"Was the description of the voyage as a nightmare an accurate or inaccurate description?".

Objection was taken on the ground that A.O.L. did not suggest the term "nightmare" had been used with its literal meaning and that therefore witnesses were being asked to do no more than express a subjective opinion. I took the view that the expression "nightmare" had a well understood meaning in the context of the publications viz. a terrifying or horrible experience and that witnesses should be allowed to express a view as to whether the word was accurate or not as a description of the voyage. Such evidence would be evidence of a fact, not merely an expression of opinion.
Seventythree witnesses were asked whether the description "nightmare" was accurate. The vast majority said it was inaccurate, many describing it as totally inaccurate. One of the passengers, Bettie Mary Haynes, said of the term "I think it is exaggerated. ... I think that there is a certain amount of truth in it but it is an exaggerated report" (transcript 1040). Another passenger, Eoin Harrop Cameron, said that he did not think the description was entirely accurate of the voyage as a whole, though between Singapore and Hong Kong it was perhaps a nightmare to him. He added, "Nightmare is not a term that I would probably use anyway. I would probably say that it was the pits or something like that" (transcript 1311). Marie Elizabeth Bertha Gardiner said that to some people the cruise would be a nightmare and she thought it an accurate description of the voyage. This was a somewhat curious statement for Mrs. Gardiner's particular complaint was of the food on the ship.

I should add for completeness that in The West Australian of 13 January 1982 there appeared a letter from Hans Gunther Rosendorff. Mr. Rosendorff, who died on 1 August 1983, was a well known bridge exponent; he was a guest of A.O.L. on the Far East Christmas cruise, in return for which he gave bridge lessons on board ship. Mr. Rosendorff's letter included this passage:

"It is true that the trip between Singapore and Hong Kong was a nightmare (I was so seasick that I wished the ship would sink), but she proved her seaworthiness".

This passage appeared in a letter which was generally commendatory of the voyage and which was written because, in Mr. Rosendorff's words, it was "time that the saga of the Dalmacija was put into perspective".
Thus there was no evidence that any passenger said to any of the reporters that the voyage was a nightmare and there was evidence that the overwhelming majority of the passengers, at least of those called as witnesses, rejected the description.
The article continued:

"But almost as soon as it left WA waters things started to go wrong. Passengers reported that huge seas battered the 5650-tonne ship which they said was too small for the open sea".

Again, in the absence of any testimony from the reporters, there was no evidence that any passenger did "report" in these terms. In so far as it is a reasonable construction to place on the paragraph that huge seas battered the Dalmacija almost as soon as it left West Australian waters, it is highly unlikely that anyone would have made the statement. While some passengers experienced discomfort between Fremantle and Singapore, it was the result of swells rather than huge seas.
Certainly some passengers who gave evidence thought that the Dalmacija was too small for the seas encountered. They were not of course offering an expert or technical opinion but rather expressing their concern at the way the ship pitched and rolled at times. I have little doubt that an opinion that the ship was too small for the seas was initiated by one or more passengers, thought to have some knowledge of these matters, and that it then gained some currency. But, objectively, the evidence showed that the Dalmacija had sailed in various places throughout the world and that she was equipped to withstand the sort of conditions encountered on this voyage.
John Adams was a retired master mariner and harbour master with extensive experience of the navigation of ships in the South China seas. In 1949 he was appointed master of the MV Gorgon, a ship of the Blue Funnel Line carrying passengers and cargo from Fremantle to Malaysia. Before retirement Captain Adams had been with the Fremantle Port Authority as pilot, senior pilot, deputy harbour master, harbour master and divisional manager operations and relieving general manager.
In March 1982 Captain Adams travelled on the Dalmacija on a round Australia voyage, as a guest of A.O.L. to advise and assist the captain of the ship in matters of navigation by reason of his knowledge of local conditions. As a paying passenger, he and his wife travelled from Fremantle to Venice on the concluding voyage of the Dalmacija at the end of the 1982 summer season. In his opinion the Dalmacija had the most up to date navigational aids, the captain and crew were proficient and the ship was stable. On the round Australia cruise, the Dalmacija encountered rough seas off the eastern coast of Australia and, in Captain Adams' opinion, she "behaved very well". The Dalmacija was equipped with Denny Brown stabilisers to reduce rolling. In Captain Adams' view the ship was adequate to handle the open sea. In his further opinion she was not too small for the open sea and was adequate to carry passengers in a reasonable degree of comfort in rough seas.
When the Dalmacija was off the eastern coast of Australia, Captain Adams noticed an action of the ship that was described by a number of witnesses who travelled on the Far East Christmas cruise. In rough weather the propeller came out of the water and, in Captain Adams' words, "when the nose goes down and the tips of the propeller come out of the water it is a shaking feeling, a bit of a shudder" (transcript 571). The shudder was caused by the propeller coming out of the water and gaining extra revolutions. Captain Adams thought there was nothing unusual about the action of the Dalmacija in this respect. This is a matter referred to earlier in these reasons.
There was also evidence from Roy Ernest Marsh, a ship's master who had been with the State Shipping Service for more than 35 years. Captain Marsh had been in command of ships for 27 years, including State ships sailing between Fremantle and Darwin.
Captain Marsh thought he had seen the Dalmacija on one occasion but was not familiar with the ship. He was able to explain the significance of the Dalmacija's classification by Bureau Veritas (an organisation which he described as one of the "top classification societies") as "of the highest class" (transcript 2003). Captain Marsh had been shown a copy of the brochure describing various features and attributes of the Dalmacija and, in his opinion, the suggestion that the ship was unable to handle the open sea was "an absolutely ludicrous statement". (transcript 2004)
In Captain Marsh's view, the fact that a ship's propeller may come out of the water, either partly or wholly, in seas such as those encountered between Singapore and Hong Kong was nothing unusual. He described the action as producing a shuddering effect and causing the after end of the ship to shake a little bit. This, he said, was not a technical problem. The Dalmacija was a twin screw ship, having not one single large propeller but two fairly small ones. In his words:

"... if you get a ship length, a ship speed, and a swell, or a length between crests of a swell, there can be occasions where the whole lot coincide and the stern of the ship will lift out of the water". (transcript 2008)

The Daily News article continued:

"At least six passengers refused to continue the $3500 voyage and left the ship in Hong Kong.

They told of poor sanitary conditions, foul cabin smells, chaos when disembarking at foreign ports and no Christmas festivities".

The evidence was that six passengers left the ship in Hong Kong. Apart from Mr. and Mrs. Stranger, there was no evidence why they did so. There was no evidence that "they" told the reporters the matters mentioned in the article. Certainly there was evidence from Mrs. Carmody that she had to leave the door of her cabin open at times because of a smell in the toilet and there was evidence from Mr. Metcalf and Mrs. Gibbons of continuing cabin toilet smells. They were not persons who left the ship at Hong Kong. A few other passengers spoke of smells of temporary duration. To some extent these smells may have been attributable to the particular brand of disinfectant used but I am satisfied that in some cases it was due to toilet blockages associated with rough weather. There was evidence of smells in the public toilets. It is hard to know what to make of the reference to "poor sanitary conditions", as distinct from cabin smells. There was no evidence of poor sanitary conditions. As to chaos when disembarking at foreign ports, as already mentioned some passengers complained of delays in disembarkation. To some extent this may have been due to inadequate organisation on the ship but in some cases it was undoubtedly due to delays on the part of the port authorities. Any statement by a passenger that there were "no Christmas festivities" would undoubtedly have been untrue; I have made reference to this matter already.
Apart from the particular comments I have made on the matters mentioned in the paragraph quoted, the paragraph is misleading in so far as it suggests a continuing series of conditions.
The article continued with two quotations attributed to passengers. One referred to the "tub" being "OK for a trip up the Swan River" and another that the Dalmacija is "not the Queen Elizabeth, that's for sure". No witness gave evidence of having made such a statement and of course there was no evidence from the reporters that anyone did so.
There followed this paragraph:

"High seas whipped up by Typhoon Lee just before Christmas Day forced the ship to divert near Manila".

The ship was not diverted near Manila. Mr. de Young pointed out that to avoid any winds from the typhoon the Dalmacija sailed, not directly from Hong Kong to Manila, but to the north of the Phillipines and then south to Manila.
The next paragraph was preceded by the heading "Life-jackets" and read:

"Many passengers became sick and on return more rough weather near the WA coast led to some passengers putting on life-jackets".

Again there was no evidence that anyone made these statements to the reporters though, as mentioned earlier, there was evidence that one passenger did put on a lifejacket during the rough seas encountered just out of Fremantle. There was evidence that three passengers made sure their lifejackets were at hand. The reference to lifejackets was amplified in the following paragraph in which this statement was attributed to a passenger:

"'We were so frightened we sat up all night with our life-jackets on,' Mrs. Margo Bailey, of Bicton said".

Not only was there no evidence that Mrs. Bailey made such a statement but there was direct evidence that she did not. The error was picked up by the Daily News shortly after publication of the article of 8 January, as a result of a complaint by Mrs. Bailey. In the Daily News of January 15 appeared a short passage under the heading "Wrong person" in which it was said that the comments attributed to Mrs. Bailey "were not her comments but those of another passenger interviewed at the same time". Who that passenger was was not stated and there was no identification of the person during the proceedings.
The next passage read:

"About two-thirds of the passengers interviewed said the Dalmacija was far too small to handle the open seas. They feared for their safety".

Since we do not know whom the reporters interviewed, the accuracy of the statement that two-thirds of those interviewed said the Dalmacija was far too small to handle the open seas cannot be tested, except to say that there was no evidence to support the passage.
The next passage read:

"ABC breakfast announcer, Eoin Cameron, said he had no criticism of the crew, but rough weather and chaotic port visits convinced him not to go on a similar cruise".

Prominent in the article was a photograph of Mr. Cameron, below which the following appeared:

"Mr. Eoin Cameron

... 'I won't go again'".

This was one of the few occasions on which it was possible to test the accuracy of remarks attributed to passengers. Mr. Cameron was interviewed by Mr. McCourt of the Daily News. I am satisfied from the evidence of Mr. Cameron and Mrs. Cameron, who was present when her husband was interviewed, that Mr. Cameron told Mr. McCourt he enjoyed the cruise and that, when he was asked whether he would go again in the Dalmacija, the question was put in regard to his willingness to sail again that day. His reply was that he and his wife had been away from their children for some time and that he would not wish to sail again so soon. The report was quite misleading in so far as it suggested an unwillingness on Mr. Cameron's part ever to sail again on the Dalmacija.
The next paragraph read:

"However, other media personalities who were given free promotional trips by the organisers, said they had no complaints".

Perhaps all that can be said about this paragraph is that it damned with faint praise. Persons answering the description "media personalities" gave evidence; some, particularly Mr. Hawkes, Miss Sanders and Mr. Bartlett were enthusiastic in their praise of the cruise. Indeed The West Australian article of 9 January reported Miss Sanders as saying that "she had a most enjoyable and relaxing holiday aboard the ship" and Mr. Bartlett as saying that "he had an excellent cruise and most passengers did not complain during the voyage".
The article was then broken with a heading "Not suited" which was followed by seven paragraphs of criticism attributed to Mrs. Joan Ridley. Mrs. Ridley was not called as a witness and there was no evidence that she made any of the remarks attributed to her. Nor did the evidence justify the remarks attributed to Mrs. Ridley that the cruise "was grossly over-charged, the fares were expensive for what was offered, the food was mediocre ...".
The next paragraph referred to Mrs. Pamela Laurie, another of those who left the ship at Hong Kong. Mrs. Laurie was shown speaking to reporters and was described as "a disgruntled passenger who flew back from Hong Kong with her husband". Certain statements were directly attributed to Mrs. Laurie and there followed a paragraph referring to carol singers hanging on to ropes in the ship's lounge and passengers being told to sit and brace themselves in showers during rough weather. In my view this passage should be read, not as continuing statements attributed to Mrs. Laurie, but as editorial comment. There is no doubt that carol singers did, because of the rough weather, hang on to ropes while singing. The reference to passengers being told to sit and brace themselves in showers during rough weather was misleading. Passengers were told that, if they happened to be in the shower when rough weather was encountered, they should brace themselves.
What was directly attributed to Mrs. Laurie was the following:

"Christmas Day was a joke. There was not even Christmas pudding.

There was not a sign saying Happy Christmas. We got a passenger who was a bit of a sign writer to do it".

One of the passengers, Raymond Arthur Gibson, said that a few days before Christmas he made up a cardboard sign "for Merry Christmas and A Happy New Year". (transcript 1092)
A following passage read:

"One cabin, booked by prominent businessman, Mr. Charles Eckart and his wife, was said to have a vile smell".

Mr. Eckhart did not testify and there was no evidence that he made such a remark. It may be that, on a fair reading of the paragraph, the statement is not attributed to Mr. Eckhart but might well have been made by someone else. But there was no evidence that anyone made such a statement to the reporters. There was however evidence that the Eckharts' cabin did have an unpleasant smell and that this continued throughout the voyage.
The following passage read:

"Another passenger who visited their cabin said: 'The bathroom smelled like a septic tank on the blink'.

Daily News reporters found the smell in the bath and toilet almost unbearable".

There was no evidence as to who made such a statement or that anyone did. Again, since the Daily News reporters did not testify, there was no evidence that they found the smell in the Eckharts' cabin "almost unbearable". There was evidence that the reporters visited the Eckharts' cabin with Alex Bajada and Peter de Young. Mr. Bajada told how Mr de Young explained to the reporters the problems encountered with plumbing in bad weather and how cabins and toilets were cleaned at least once a day. Mr. Bajada said that when he and the others went to the cabin there was "a very, very strong chemical smell" in the toilet (transcript 375). It was "unpleasant" (transcript 533) but he would not describe it as "unbearable" and it did not permeate into the cabin itself. Mr. de Young gave evidence of the same incident, describing the smell in the bathroom and toilet as "a strong smell but ... not unbearable or vile". (transcript 1621)
The next passage read:

"Angry passengers who left the ship in Hong Kong turned up at the Fremantle terminal to retrieve luggage they had been unable to get off the ship".

This was an unfortunate piece of reporting. Apart from the fact that there was no evidence that any passenger had made a remark to the reporters to justify the sentence, it is quite clear from the evidence of Mr. de Young that when passengers left the ship at Hong Kong they were told that they could leave whatever luggage they wished. It was known to Mr. de Young that these passengers intended to fly back to Perth and he appreciated that there would be limits to the amount of luggage they could take with them. Not only was it not correct to say that passengers had been unable to get luggage off the ship; A.O.L. made special arrangements regarding baggage to suit the convenience of the passengers.
The balance of the article referred to the Dalmacija being on lease to A.O.L. and contained some comments by Mr. Alex Bajada largely relating to the unavoidability of the bad weather the Dalmacija had encountered.

The West Australian 9 January 1982
The first article in The West Australian appeared on 9 January and was headed "Criticism, praise for cruise ship". In this case the Court had the benefit of evidence from the reporter in question.
Mr. Cotton gave evidence that he was instructed by his chief of staff to go to the Fremantle passenger terminal because the Dalmacija had berthed that morning. He was told that there had been some "complaints and problems" with the cruise and was instructed to "go and find out what was happening" (transcript 2279-2280). He was aware that reporters from the Daily News were present but he did not co-operate with them and carried out his own interviews. Mr. Cotton said that he "interviewed" (transcript 2281) 25 to 35 persons. Later he explained that he spoke to that number of persons but some did not wish to be quoted. About 12 to 15 were agreeable to being named and it was in respect of those persons that he took notes. Two of those to whom statements were attributed in the article were not interviewed at the ship. At the suggestion of the chief of staff, later that day, Mr. Cotton rang a telephone number and spoke to Miss Sanders and Mr. Bartlett. Their comments were the only ones of a favourable nature from a named passenger. The article noted:

"All passengers questioned by The West Australian agreed that the food and service were excellent".

The article attributed some statements to Mr. de Young but, as to passengers, mentioned only Lady Molly Virtue, Mr. Howard Gliddon and Mrs. Vera Grady. Lady Virtue and Mr. Gliddon did not give evidence; their comments as reported were critical of the performance of the Dalmacija in the open sea.
There is an issue as to whether Mrs. Grady made the remarks attributed to her and I set out in full the passage relating to her.

"Mrs. Vera Grady of Alexandra Road, East Fremantle said that one woman went on deck with her life-jacket on fearing the worst, and six people flew home from Hong Kong.

'I went to Mass every day we were out because I thought that if we were going to go down, I would go down "good"' Mrs. Grady said".

Mr. Cotton was not able to recall particular conversations with the persons referred to in the article and did not keep notes taken at the time. However he insisted that any remarks in quotations accurately recorded what he heard people say.

Mrs. Grady gave evidence that as she was leaving the ship on 8 January a person, whom she identified as a reporter because he was carrying a pad, asked her how she found the trip. She replied "I had a ball". She added "I even went to Mass because it made me feel good a couple of days". She denied that she said to the reporter that she went to Mass because she thought that if the ship went down she would go down "good". She also denied that she mentioned a woman going on deck with her lifejacket. She said "No, I did not. I did not see any woman with a life jacket". (transcript 662)
The respondents called as a witness David Martin Kleeman to whom reference has already been made. He recalled Mrs. Grady on board the Dalmacija and said that he had a "vague recollection" one day hearing her say to another woman something like:

"I'm going every day because if the thing does go down I'm going to go down good" or something to that effect. (transcript 3004)

This was just before or after Mass which was celebrated each day by Father Bertram Adderley, now deceased.

I do not accept that Mrs. Grady made the remarks attributed to her in the newspaper article about a woman with her lifejacket on or wanting to go down "good". Mr. Kleeman's evidence of earlier remarks was very vague and there was no reason offered why he should recall these particular remarks after such a long time. On the other hand Mrs. Grady's conduct after the report appeared was consistent with her evidence. When she read the article which appeared in the Saturday edition of The West Australian she telephoned the newspaper to speak to "the editor-in-chief or somebody that was up high". It was her intention to complain of the remarks attributed to her. She was told that the editor was not in; she said that she would ring back. She rang again on Sunday and was told that it was the editor-in-chief's day off. She rang again on Monday and spoke to someone whom she thought was the editor. She complained about the report, saying that it was "all lies". She added "Something has to be done about it, please". The person at the other end, a male, said "Well I am very sorry. It must have been this other reporter or it must have been a new one ... I will do something about it". She added "I heard no more". (transcript 675-678)
It seems to me unlikely that Mrs. Grady would have gone to so much trouble to challenge the report and try to have it corrected if the remarks had been correctly attributed to her. It may be argued that she made the remarks and regretted having done so when she saw them in print. But this was not put to her in cross-examination. Mr. Cotton interviewed a number of people at the ship and, in the disorganised way in which the interviews were necessarily conducted, it would have been quite easy to confuse the identity of persons to whom he spoke and not to record their remarks with complete precision, particularly in the case of Mrs. Grady who was a somewhat effervescent person. Mention has already been made of the statement wrongly attributed to Mrs. Bailey, though of course not by Mr. Cotton.
The article in The West Australian contained a number of statements not attributed to any particular passenger but to passengers in general. It began: "Some of the 140 passengers who returned yesterday from a 25-day cruise in the M.S. Dalmacija claimed that the ship was not suitable for Australian waters". Reference was made to the fact that "They were constantly sea sick" and that "Many passengers planned to complain to Australian Ocean Line about the ship's performance and the lack of arrangements for passengers at ports". A fair reading of the article is that these complaints were widespread.
It is significant that the reported statements favourable to A.O.L. were made by other passengers who "came to the defence of the ship after reading reports in yesterday's Daily News". This tends to suggest that none of the statements made to Mr. Cotton was favourable, a conclusion which is at variance with the tenor of the evidence of so many passengers and is at variance with the passage already quoted, relating to food and service.
Mr. Cotton said that, while the contents of the article as published were much as he wrote it, the order of contents was altered by the sub-editor. He (Mr. Cotton) had the critics "high in the story" and those who were defending the ship "at the tail-end of the article". (transcript 2269)
There is no doubt that both the heading and contents of this article were more balanced than the Daily News article in so far as both heading and contents contained praise and criticism.

Daily News 11 January 1982
The second Daily News article appeared on 11 January and was headed "Cruise passenger: Drill 'inadequate'".
This article was devoted almost entirely to the comments of Mr. Albert Stranger who left the Dalmacija at Hong Kong with his wife.
The article began with some remarks attributed to Mr. Stranger, in indirect speech, regarding the inadequacy of life boat and safety drill on board the Dalmacija. It included a statement, again in indirect speech, that "if a disaster had occurred during a recent cruise to Hong Kong, the passengers in the ship Dalmacija would not have known what to do". These remarks were correctly attributed to Mr. Stranger who had been a petty officer in the Royal Australian Navy for nine years and was indeed critical of the lifeboat and safety drill on board the ship.
Mr. Stranger's criticisms were directed at the infrequency of lifeboat drill and its inadequacy in terms of the instruction given to passengers and the checks carried out. As already mentioned, lifeboat drill was carried out on one occasion only and seems to have been confined to the identifying of passengers at their correct mustering stations and to a check, sometimes perfunctory, to see that lifejackets were in position.
Again the article contained criticisms said to have emanated from a number of passengers but supported only by a limited number of comments. The article in question contained these passages:

"The Dalmacija, which returned to Fremantle on Friday from a 25-day cruise to Hong Kong and Manila, was criticised by many of the 150 passengers when they disembarked.

There were complaints of the ship's apparent inability to handle open seas, sub-standard conditions and lack of Christmas festivities during the cruise".

There was no evidence that "many of the 150 passengers" made criticisms to the Daily News reporters. The expression "sub-standard conditions" is a damning one, unqualified by any context in which it appeared. Yet there was no evidence that any passenger spoke to reporters of sub-standard conditions; nor did any passenger do so in the course of evidence.
Further criticisms, correctly attributed to Mr. Stranger, were as follows:

"There were no organised sports on the ship and passengers were expected to pay very high prices for drinks".

It is not the position that there were no organised sports on board though many passengers who gave evidence were critical of the lack of space set aside for sporting activities. Because of the weather, the swimming pool was in use very little in the early stages of the cruise. There was only one table tennis table and deck quoits were hampered by lack of equipment.
Many witnesses gave evidence regarding the price of drinks on board. Naturally passengers expected that when the Dalmacija was in the open sea liquor would be at duty free prices, considerably lower than those paid ashore. In so far as this criticism calls for some objective determination, the evidence was very vague indeed. Not often did a witness speak of a particular price as distinct from commenting that prices were too high or were reasonable. It seems likely that Dalmacijaturist did not pass on to passengers the full benefit of freedom from excise duties when the ship was at sea. As already noted, this was a matter that had emerged before the Far East Christmas cruise and it was brought to the attention of Dalmacijaturist by A.O.L. which itself had no control over prices.
The article concluded with a statement attributed to Mr. Max Viskovich that the cruise was "first class", that it was "a lovely ship" and that he and his wife and daughters "all enjoyed it thoroughly".

The West Australian 12 January 1982
The fourth article, that in The West Australian of 12 January, was headed "Passenger faults cruise-ship drill".
This article took up the theme of the Daily News article and referred to criticism by Mr. Albert Strange (undoubtedly Mr. Stranger) that "emergency drills on board the ship were inadequate". It expressed the further view of Mr. Strange that "if there had been an emergency in the ship during the voyage total panic would have broken out". In evidence Mr. Stranger agreed that he made these remarks to a reporter.
These remarks were followed by the following passage:

"(The Dalmacija was criticised by some of the 140 passengers who returned on Friday from a trip to Hong Kong and Manila. They said that the shop (sic) performed poorly on the open sea and that there was little organisation of deck-board activities for the passengers)".

This passage was followed by further statements of a critical nature concerning lifeboat drill, again attributed to Mr. Strange. There followed a rebuttal by Mr. Alex Bajada on behalf of the Dalmacija's master, Captain Nadramija, in these terms:

"'We reject the allegations that the ship's crew did not attend lifeboat drill ...

All passengers' life jackets were checked and normal lifeboat drill was carried out a few days after the ship left Fremantle'".

The article concluded with extracts from three letters written to The West Australian by passengers from the Dalmacija, saying how much they enjoyed their cruise "though they agreed with some of the criticisms". The letters emanated from Mrs. Bertha Curtis who wrote:

"I enjoyed myself so much, in spite of rough seas, that I have booked for another cruise in February";

from Mr. and Mrs. S. Sainken who wrote:

"The Dalmacija does more than her fair share of pitching and tossing, but if one is young at heart, yearns for crisp salt air and is a reasonable sailor, the cruise becomes quite an adventure";

and from Mrs. Roma Cribb who wrote:

"I cannot agree with the '25 days of hell' comment - anyone who could not find something happy and good to remember must be a very unhappy person, wherever he or she may be".

The article concluded with a further reference to the letter writers in these terms:

"They all said that criticism of the ship had been exaggerated".

Mr. and Mrs. Sainken gave evidence and their testimony was consistent with the statements attributed to them in the newspaper article. This article, like the previous one in The West Australian, contained some mixture of criticism and praise though, in view of its headline and the emphasis attached to Mr. Strange's remarks in the early parts of the article, it was on balance critical of the cruise.

The interviewing process
There was of course no evidence from the Daily News reporters as to how they went about interviewing passengers. Mr. Cotton said that, while he went to the passenger terminal with the idea that there would be people with complaints about the cruise, he did not "specifically" seek out those who had complaints (transcript 2281). The reporters were at the terminal on an assignment. They were not there to conduct some form of inquiry. They were under no legal obligation to interview all the passengers or even to secure a balanced picture of the Far East Christmas cruise. But a failure to present in the newspaper articles a balanced picture of the cruise carried the risk that A.O.L. might do what it in fact has done - complain of misleading and deceptive conduct and complain that it was defamed.
The matter of selectivity in the choice of those interviewed and of those reported is of particular significance in the case of the newspaper articles complained of because of the clear implication in those articles that what was being reported were the views of most or many of those who travelled on the Dalmacija. Equally clearly this was not the case.
And it is hard to resist the conclusion that, particularly in the case of the first Daily News article, the reporters were not greatly interested in expressions of praise for the Dalmacija. It is enough to refer to the evidence of Margot Caroline Siemer, Phyllis Mary Sullivan, Lynette Kaye Butler, Mabel Annie McCulloch, David Hawkes, Cyril David Cribb, Muriel Louise Nimmo, Philip James Harris, Dianne Evelyn Hammond and Ellen Norah Parry, all of whom spoke to reporters (in most cases identified as Daily News reporters) of their enjoyment of the cruise but whose remarks were not noted, certainly not reported.

Approaches to the respondents
Alex Bajada saw the billboard "Nightmare Voyage Say Passengers" and bought a copy of the Daily News of 8 January. He read the article on board the Dalmacija about 4 pm, just before he was to leave on the ship for one of the advertised weekend cruises. He returned to Fremantle at about 8 am on 11 January and then saw the article in The West Australian of 9 January.
On the morning of 11 January there was a meeting of directors of A.O.L. as a result of which an appointment was made to see Mr. Hummerston, the editor of the Daily News. The meeting took place later that day or the next day. It was attended by Alex Bajada, Mario Bajada, Roland Zar and Mr. Hummerston. Mr. Hummerston was known to Mr. Zar but Alex Bajada was the spokesman for A.O.L.
Alex Bajada told Mr. Hummerston that the directors of A.O.L. were very unhappy about the article in the Daily News. He said that to depict the cruise as a nightmare was "totally wrong and totally unfair to a company which was a West Australian company and to a company that believed it was offering a good product for the West Australian market" (transcript 402). He said that there had already been a bad reaction to the article in that, the day after it was printed, 5 passengers had rung the A.O.L. office to cancel their passages. He added that travel agents were reportedly removing the A.O.L. brochures from their shelves and that the telephones at A.O.L. "had gone completely dead". (transcript 403)
Mario Bajada complained that, even if there had been a section of the voyage between Singapore and Hong Kong that had been particularly bad, there was no way that one could have called the entire cruise a nightmare.
Alex Bajada and the other directors took the various criticisms in the Daily News article and responded to them, acknowledging that there had been some problems, particularly relating to plumbing.
Mr. Hummerston explained that he had not been the editor on 8 January, adding that "he had hoped that the reporters had got their story right because it had certainly worried him" (transcript 405). He said that it was unfortunate that there had not been any major international story on 8 January because, if there had been, the account of the cruise of the Dalmacija would not have ended up on the front page. He also said that he would not have printed the account on the front page and would not have used the word "nightmare".
The directors of A.O.L. asked Mr. Hummerston for a retraction of the article; in response Mr. Hummerston said that they could speak to Miss Fowler. The three directors spoke with Miss Fowler. None was very clear as to the precise matters discussed except to say, in a general way, that they went through the Daily News article pointing out their disagreement with its contents. As to the subject of smells in the Eckharts' cabin, Alex Bajada said that Miss Fowler was insistent that the smell was very strong and unbearable. Alex Bajada agreed, in cross-examination, that Miss Fowler maintained that her report was correct and fair.
In response to the approach made by A.O.L. to Mr. Hummerston, an article appeared on page 3 of the Daily News of 13 January 1982 under the heading "DIRECTORS DEFEND CRUISE SHIP". The article reported the opinion of A.O.L. that claims that the cruise was a nightmare were "exaggerated". In reporting that the directors were upset by claims from passengers that they had not enjoyed the cruise, the article repeated alleged statements by passengers that the ship could not handle the open sea, that there were no Christmas festivities, that lifeboat drill was inadequate and that drink prices were high. The article also included this statement:

"One couple who booked a luxury cabin complained of a foul smell in the bathroom that could not be removed by the ship's stewards".

The balance of the article contained statements by the directors regarding the seaworthiness of the Dalmacija and a rebuttal of other criticisms including those relating to the price of liquor. There was nothing in the article which could be described as a retraction of what had appeared in the Daily News on 8 and 11 January.
Following the appearance of the Daily News article of 13 January, the directors of A.O.L. arranged to see Mr. Slattery, the managing director of the first respondent. That meeting took place some days later and was attended by Alex Bajada, Mario Bajada and Roland Zar on the one hand and Mr. Slattery and Mr. Hummerston on the other. Neither Mr. Hummerston nor Mr. Slattery gave evidence. I accept the evidence of the A.O.L. directors as to what took place at their meetings with Mr. Hummerston, Miss Fowler, and then with Mr. Hummerston and Mr. Slattery.
At this last meeting Alex Bajada was again the spokesman for A.O.L. Mr. Bajada complained that the Daily News article of 8 January was "totally inaccurate and totally unfair and totally inappropriate for a company which was West Australian-based, where a lot of West Australian money was at stake" (transcript 411). He pointed out to Mr. Slattery that there had been a number of cancellations of A.O.L. cruises, that A.O.L. brochures were being removed from the offices of travel agents and that "we were in a position of losing a lot of money" (transcript 412). Mr. Bajada said that the Daily News article of 13 January was "a virtual regurgitation of their original article" (transcript 413), an opinion which, in my view, had substance. Mario Bajada again raised the question of the use of the word "nightmare" in the billboards and article in the Daily News, asserting that there was no justification for the use of the word. According to Mario Bajada, "Mr. Slattery replied that he also thought the word was a strong word but that possibly we also had some problems on the ship". (transcript 2515)
Alex Bajada asked Mr. Slattery for a "proper retraction which would give a proper response to the article that had been written in the Daily News" (transcript 413). Mr. Slattery did not offer a retraction of the Daily News article but he did suggest that there be a "follow-up article done by another reporter" (transcript 415). At that time the ship was on its second Far East cruise and Alex Bajada suggested that a reporter contact the ship by radio telephone. He offered to provide a list of passengers and that the reporter could choose those to whom he or she wished to speak. He added "I also insisted that the newspaper print a statement giving our answer to the publicity we had been given by the newspaper". (transcript 415)
A Daily News reporter, Amanda Platell, contacted the Dalmacija at sea and on 25 January there appeared an article under the heading:

Revenue Expense (Loss)

Initial Projection 3,582,129 3,417,184 164,945 Actual 2,252,957 3,393,504 (1,140,547)

Variation (1,329,172) 23,680 (1,305,492)

========= ========= ========= "

Mr. Sullivan's report continued with a section described as "Further consideration of the financial effect of and reasons for the shortfall in passenger occupancy levels". In that section he set out to look at the booking sheets for the Dalmacija (derived from exhibit 52), selecting the period closest to the publication date of the newspaper articles. He examined the booking level for a period of approximately 3 months prior to departure of the principal voyages. Mr. Sullivan said:

"The reason for the selection of the three months was that the period ideally should be as long as possible but it if was going to be meaningful from the point of view of comparing what had happened prior to the date of publication of the articles and after the publication of the articles, there was a limit to how long that period could be and how useful the analysis would be. Three months was selected as being the most appropriate of the relevant alternative options that were available". (transcript 2630-2631)

His object was to look at the percentage increases occurring in voyages 1, 3 and 5 (departure dates 12 November 1981, 14 December 1981 and 11 January 1982 respectively) compared with increases in voyages 7, 8 and 9 (departure dates 8 February, 5 March and 30 March 1982 respectively) and in addition to look at the general level of bookings within the last three months before departure of the principal cruises.
In his report Mr. Sullivan said that the number of cancellations could not be accurately determined from the booking sheets but he classified a net decline in bookings between two booking sheet dates as cancellations. In his view:

"To the extent that new bookings occurred this cancellation figure is understated. The understatement is likely to be greater for the months subsequent to 15.1.82 when booking sheets were not prepared weekly.

There was a significant decline in the net movement in bookings for the month ending 15.1.82 compared to both the preceding and subsequent months". (p.6)

The latter proposition did not represent a factor in his analysis.
Mr. Sullivan's review of booking trends for cruises 1, 3 and 5 indicated that a relatively high level of bookings occurred in the three months prior to departure, the peak of bookings being in the month of departure or the month prior thereto (report p.6). The passenger increases were - cruise 1 (242%), cruise 3 (327%), cruise 5 (232%). However the percentage increases for the later cruises were - cruise 8 (190%), cruise 9 (131%), cruise 10 (106%).
Mr. Sullivan dealt with cruises 8 and 9 (the round Australia cruises) together because some bookings took in each cruise. It will be remembered that each cruise involved a combination of sea travel and some other form of travel. The number of bookings for the period of three months prior to departure totalled 199 compared to final numbers of 304. In Mr. Sullivan's words:

"While the figure of 314 (this was corrected to 304 in evidence) understates total bookings because the booking sheets ceased just over 2 weeks prior to the departure of cruise 9 it also reflects bookings at 15.1.82 for cruise 9 which was 1 week after the newspaper articles". (p.7)

He continued:

"If we apply to bookings of 199 a factor of 232% (the lowest percentage increase for major preceding cruises as set out in section 5.2) the final passenger numbers would have been 462, an additional 158 passengers. However this figure of 158 is overstated by possibly in the order of 25% because the booking sheets include free of charge tickets and possibly exclude late cancellations. Therefore an estimated and additional 118 passenger bookings (i.e. 75% of 158 additional passengers) would have been achieved based on the assumptions made all other things being equal.

If we cost the 118 full passengers at an average figure of $2,600 (net of commission) this represents a loss of revenue of $307,000 and after deducting $40,000 for variable food and port costs this represents a loss of revenue in the order of $267,000 which would have turned a gross loss of over $70,000 to a gross profit in the order of $190,000". (p.7)

Mr. Sullivan said that he believed the assumptions used were reasonable "given that cruises 8 and 9 were, prior to 8.1.82, receiving at least a similar level of support as cruises 3 and 5 in the market place". (p.7)
In evidence Mr. Sullivan said that he made a comparison between the number of bookings on a date three months prior to the respective departure dates of cruises 8 and 9 with the number of bookings on dates 3 months prior to the respective departure dates of cruises 3 and 5 because he "wished to see that the figures did not indicate there was, if you like, a significant different level of support for cruises 8 and 9 to cruises 3 and 5" (transcript 2652). He added:

"The purpose of the comparison was really, if you like, a cross-check from my own point of view in regard to the basis of analysis that I was applying; the basis of it is that I am applying percentage increases in voyages 3 and 5 to 8 and 9 and I wish to feel that at least in broad terms 8 and 9 appeared to be receiving, in the market-place, a similar level of support". (transcript 2653)

As to cruise 10, this cruise did not depart until more than 3 months after the newspaper articles appeared. Mr. Sullivan's approach to this cruise was as follows. The level of bookings to the month ended 15.1.82 was similar to that for cruise 8; there was no build up of bookings in the 3 months prior to departure as there was for other cruises. He continued:

"Certainly the level of bookings at 15.1.82 exceeded that for cruises 3 and 5 at an equivalent time prior to departures. If we use 62 as the number of passengers 3 months prior to departure (the number on the booking sheet at 29.1.82) and apply an increase of 232% (refer section 5.3) it indicates that potentially there could based on the assumptions made have been 144 final passengers. We do not consider that a reduction in the order of 25% (refer section 5.3) should be applied because the bookings in mid-january should not have been effected

(sic) by such factors as free of charge bookings and a good occupancy level for cruises 8 and 9 would reasonably have increased the interest of potential passengers. We have compared the total of 144 potential passengers with the final estimated number of full paying passengers as per appendix F of 79 escalated by 15% to give 91 (note that the booking sheets ceased to be prepared from 12.3.82)

If we cost an additional 53 passengers (144 potential less 91 estimated final booking sheet passengers) at an average fare of $2,600 (net of commission) this represents additional gross revenue of $138,000 which after allowing $19,000 for variable food and port costs represents net loss of revenue in the order of $119,000". (p.8)

Dealing with cruise 7, Mr. Sullivan said he understood that originally this was to be a third Far East cruise but that, in late June 1981, it was altered to the first round Australia cruise. He added:

"Bookings had been slow for this cruise largely because the Western Australian Government Tourist Bureau was not prepared to promote it with only a short lead time. We consider passenger numbers would not have reached the levels obtained for the other Round Australia cruises". (p.8)

The basis of Mr. Sullivan's opinion regarding the level of passenger numbers was exhibit G, the summary of bookings on long cruises taken from the booking sheets. This round Australia cruise was in fact replaced by five coastal cruises and two short cruises to nowhere. These were the cruises organised by West Travel Service.
In Mr. Sullivan's view, cruise 7 was "clearly in difficulty prior to 8.1.82 as it only had 33 total bookings some 6 to 7 weeks prior to departure". He said:

"From a review of bookings in the month prior to departure of other cruises estimated additional passenger bookings would not have generated as much revenue as the new short cruises did. More passengers and/or a better return per passenger could reasonably have been expected for cruise 7". (p.8)

He agreed that there was nothing in the documentation providing a basis for that opinion which was "purely a statement of my opinion on the general information available" (transcript 2672). He concluded in respect of cruise 7 that while there was no reliable evidence available, an additional net revenue of $50,000 should have been achievable "based on the financial success of the short cruises 2, 4 and 6. However if any further delay had occurred in restructuring this cruise such an improvement would probably not have occurred". (p.9)
I think it is necessary to set out verbatim Mr. Sullivan's summary, on a cruise basis, of what he described as the "estimated financial effects subsequent to the publication date of the newspaper articles". (p.9). There is in this summary an implication that the newspaper articles had an adverse financial effect on certain of the cruises. This is not a matter on which Mr. Sullivan was equipped to comment and I disregard the implication for the purposes of assessing the relevance of his report. It was of course open to the applicant to submit, as it did, that the newspaper articles had this adverse financial effect.

"A SUMMARY BY CRUISE OF THE ESTIMATED FINANCIAL EFFECTS SUBSEQUENT TO THE PUBLICATION DATE OF THE NEWSPAPER ARTICLES
6.1 Cruises 1, 3, 5
The first article followed cruise 3, (Far East 1) and cruise 5 (Far East 2) commenced within a few days of its publication. The newspaper articles could not have had any adverse financial effect on these cruises which incurred the following estimated gross losses per Appendix F.

Cruise 1 208,501 Cruise 2 123,577 Cruise 3 234,603 566,681 =======

6.2 Cruise 7

While this cruise was replaced by a number of shorter cruises it was never going to be financially successful. Additional net revenue in the order of $50,000 should have been achievable leaving the cruise's gross loss still in excess of $200,000.

6.3 Cruises 8 & 9

As set out in section 5.3 of this report a combined gross loss of over $70,000 could based upon the assumptions we have made have been a profit in excess of $190,000.

6.4 Cruise 10

Based upon the assumptions made in section 5.4 of this report additional revenue of $119,000 could have been earned.

6.5 Short Cruises 2, 4 6

Only cruise 6 commenced after 8.1.82 and we have ignored this cruise for the purposes of our calculations.

6.6 Adjustment made to total gross loss are set out below.

Total

Cruise Gross Loss

No. (App. F) Adjustments Reference

- Allocation of adjusted projected gross loss

1,3,5 566,681 Section 6.1 7 276,988 50,000 Sections 6.2 and 5.5 8 & 9 70,635 70,635 Sections 6.3 and 5.3 10 231,432 119,000 Sections 6.4 and 5.4 2,4,6 (67,358) Section 6.5 1,078,377 239,635

1,162,000 258,000 Adjusted to total actual gross loss (refer Appendix F).

- Adjustment for estimated gross profit

8, 9 - 190,000 Sections 6.3 and 5.3 1,157,000 448,000

Total gross loss 1,140,000 Less adjustments 448,000

Adjusted gross loss 692,000 Add actual overhead expenses 535,115

Less actual other income 81,317

Adjusted operating loss 1,145,798

=========

The actual operating loss incurred was $1,594,345 as per Appendix C which is $448,547 more than the adjusted operating loss".

As mentioned earlier, Mr. Sullivan's report and the evidence in support of it were the subject of considerable cross-examination by counsel for the respondents. In addition the respondents called Ian Robert James, senior lecturer in the Department of Mathematics at the University of Western Australia, who produced a report entitled "Analysis of estimated effects of publication of articles on passenger numbers", being an analysis of Mr. Sullivan's report. It may be noted that Dr. James gave his report a title which misunderstood the purpose of Mr. Sullivan's report. This misunderstanding continued in ss. 1 and 2 of Dr. James' report. The main basis of the criticism made by Dr. James of Mr. Sullivan's report was what he described as the "main assumption in the adjustment procedure ... that all cruises (despite their differing natures) should have similar percentage increases in bookings in the three months prior to departure" (exhibit 84 p.3). Dr. James criticised this assumption for a number of reasons which may be summed up in the following way:
(1) Mr. Sullivan was inconsistent in the units offare used in his calculations. Full fare equivalents were used for cruises 8, 9 and 10 while sectors were included as equivalent to full fares for cruises 1, 3 and 5. In Dr. James' view "Large increases in sector bookings in the three months prior to departure have led to exaggerated percentage increases" (p.8).
(2) Mr. Sullivan included free of charge passengers in his calculations along with paying passengers except for what Dr. James described as "a fairly arbitrary adjustment of 25% to account for free-of-charge passengers and late cancellations on cruises 8 and 9" (p.8). He continued:

"Using the Arthur Young estimates of numbers of paying passengers, and assuming all free-of-charge passengers were booked in the three months prior to departures gives for cruise 5 and estimated final booking of 147% that at three months prior to departure. This would suggest little effect of the newspaper articles on bookings for cruises 8 and 9, but the assumptions made require validation by more comprehensive booking data". (p.8)

(3) Graphs prepared by Dr. James of the booking trends indicated quite different profiles for the different cruises. He noted:

"In particular, cruise 10 appears to have received good early bookings followed by relatively low increases over the booking period, and this would suggest that the percentage increase method of prediction is of doubtful validity". (p.9)

(4) In Dr. James' opinion, proper predictions of bookings for cruises 8, 9 and 10 required detailed information on paying passenger bookings and patterns in bookings from cruises 1, 3 and 5 which could be extrapolated to the situations for cruises 8, 9 and 10. In his view:

"Apart from cruise 3 there is some evidence that approximately linear trends may be appropriate, but validation of this rests on more detailed data". (p.9)

In Mr. Malcolm's submission, "Mr. Sullivan's exercise was never put forward as an exercise in statistical probability. It is the kind of exercise than one would expect a qualified chartered accountant and auditor, with a background of experience in the analysis of performance of businesses to undertake, doing the best he could, to compare the performance before 8 January with the performance after 8 January" (transcript 3304). In his further submission, it was for the Court to determine whether in the light of all the other evidence which had been given it would be reasonable to assume that the performance of the later voyages, in terms of booking patterns, would be at least as good as the worst case amongst the previous voyages. He invited the Court to find that such an assumption was a reasonable assumption, doing the best one can with the limited amount of data available to compare performance on a before and after basis. In answer to Mr. Gleeson's submission that in any event A.O.L. was facing a substantial operating loss in January 1982 he submitted: "It is just as possible for a company which is currently operating at a loss to lose income from the continuation of its business, as it is for a company that happens to be operating at a profit to lose income" (transcript 3304). He added that there was evidence of a dramatic decline in inquiries about the Dalmacija and that in such a situation it was, almost by definition, impossible to identify persons who, but for something they had read in the newspaper articles, might have seriously considered making a booking.
I agree that Mr. Sullivan did not set out to offer an exercise in statistical probability nor, as I have said, did he set out to estimate the effect of the newspaper articles on A.O.L's operations. No doubt Mr. Sullivan's approach is open to objection in matters of detail but I am satisfied that it presents in a very general way a picture of a decline in bookings for the cruises on the Dalmacija after 8.1.82. That leaves the question whether any of that decline can be attributed to the newspaper articles themselves. In his final address Mr. Gleeson emphasised the operating loss of $1.6 million facing A.O.L. and the financial difficulties that the venture was in by the end of 1981 including a threat by the owners of the Dalmacija to terminate the charterparty because of a default in payment.
In relation to Mr. Sullivan's report he submitted:

"Just taking it voyage by voyage, there can be no suggestion that cruises 1, 3 and 5 were affected in any way by any of the bad publicity but cruise 5 was an absolute disaster. Cruise 7 was cancelled for lack of interest not relating to the bad publicity. If we look at cruise 8, the bad publicity occurred during the period ending 15 January 1982 - I am sorry, some of it did - the number of net new bookings during the period ending 15 January 1982 was 6; that was the lowest that it had been. In the next month immediately following the bad publicity the net new bookings was 34 ... It is interesting to note, for example, ... that there were more cancellations in respect of the south-bound voyage than there were in respect of the north-bound voyage. In relation to the falling off of inquiries, it is also important to bear in mind the consideration of common sense ... that you would expect the level of inquiries to diminish over the progress of the season as the number of avilable cruises diminished. In November 1981 you could book on any of these cruise. By March 1982 you could only book, I think, on the voyage back from Western Australia to Europe. Is it surprising, therefore, that there would be a lower level of inquiry in March of 1982 than there would be in November of 1981?". (transcript 2996)

There is force in these submissions and I am not at all persuaded that A.O.L's operating loss of $1,594,345 would have been reduced by an amount in the order of $450,000 as Mr. Sullivan suggested. But I am satisfied that his report, as amplified in oral testimony, evidenced a decline in bookings after 8 January 1982. Equally I am satisfied that in large part this was due to the Daily News article of 8 January. That conclusion is warranted by the evidence led on behalf of A.O.L. to which I have already referred, including the fall in the level of approaches to A.O.L. and travel agents. Furthermore, it is in the nature of things highly likely that an article written in the terms of the Daily News report of 8 January, with the prominence it received in the paper itself and through the billboards, would have caused members of the public to turn their attention away from the cruises of the Dalmacija.
In terms of the Daily News report of 8 January 1982, I do not think that any useful distinction may be drawn between those parts that constituted misleading or deceptive conduct and those parts that were defamatory. Substantially all the passages complained of by A.O.L. in that report answer both descriptions.

Damages - assessment
The evidence established to my satisfaction that, primarily as a consequence of publication of the Daily News article of 8 January 1982, and to some extent of the other Daily News article and The West Australian report of 9 January, A.O.L. suffered substantial financial loss. To a limited extent that loss is capable of reasonably precise calculation in so far as the company lost $25,000-$30,000 by reason of cancellations shown to have been made as a result of the reaction of intending passengers to publication of the Daily News article.
It is reasonable to conclude from the evidence of the directors and staff of A.O.L. and from the evidence of travel agents that a substantial number of persons immediately lost interest in one or other of the cruises. From the very nature of things it is impossible to say how many intending or prospective passengers lost interest. But, having regard to the volume of inquiries made to A.O.L. and its associated offices before 8 January 1982 and the interest shown through travel agents, it can hardly have been less than 50. And in many cases the inquirer would have been acting on behalf of a spouse or friend as well as himself or herself. The cost of each booking depended on the cruise and the class of cabin but I accept Mr. Sullivan's assessment of an average fare of $2600 (see Exhibit 82 p.7). Of course we are concerned here, not with cancellations but with loss of interest on the part of those who were at least potential passengers on one of the Dalmacija's cruises. The figures to which I have just referred do no more than offer some guidance to the income lost by A.O.L.
Having regard to the evidence of the directors of A.O.L. and of travel agents, it is likely that a program of cruises over 3 years would have proved a viable venture though the evidence did not establish that it would have returned to A.O.L. in its capacity as trustee any substantial profit. However, to project the figures mentioned in the preceding paragraph beyond the 1981-1982 season is to engage in speculation. But I am satisfied that publication of the Daily News article of 8 January 1982 had such immediate financial consequences for the company as to make a decision not to renew the option or options on the charterparty inevitable. That is not to say that the options would have been exercised in any event for there is no doubt that A.O.L. was in serious financial difficulties by January 1982. But had the cruises after the Far East Christmas cruise been booked to or beyond break even point it is likely that at least the first option would have been exercised.
In respect of both the claim under s.52 of the Trade Practices Act and the claim for defamation, the applicant confined its claim for damages to financial loss suffered as a result of publication.
The task of a Court in making an assessment of future loss is often one of great difficulty. In carrying out that task the Court should have regard to what was said by Lord Diplock in Mallett v. McMonagle (1970) AC 166 at p 176:

"The role of the court in making an assessment of damages which depends upon its view as to what will be and what would have been is to be contrasted with its ordinary function in civil actions of determining what was. In determining what did happen in the past a court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depend upon its view as to what will happen in the future or would have happened in the future if something had not happened in the past, the court must make an estimate as to what are the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards".

Where the Court is required to decide on the balance of probabilities, the degree of that probability is not to be reflected in the assessment of damage. If an applicant establishes the probability that damage has been caused by reason of the respondent's conduct, the applicant is entitled to damages resulting therefrom; equally if the applicant fails on a balance of probabilities to establish damage, it is not entitled to damages on some scaled down basis. See Sykes v. Midland Bank Executor Co. (1971) 1 QB 113 at 130; Norwest Refrigeration Services Pty. Ltd. v. Bain Dawes (W.A.) Pty. Ltd. (1984) 58 ALJR 521 at 529.
But where a Court is called upon to assess damages which, in the words of Lord Diplock, "depend on its view as to what will happen in the future or would have happened in the future if something had not happened in the past", the Court is permitted and indeed required to make an estimate of the chances that the particular thing will happen or would have happened and to reflect those chances in the amount of damages it awards.
There is another and quite different principle that operates in the assessment of damages. It appears in the judgment of Dixon and McTiernan JJ. in Fink v. Fink (1946) 74 CLR 127 at 143 where their Honours said:

"Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages".

Equally if the present applicant can satisfy the Court that it has sustained loss by reason of the respondents' conduct, the difficulties of estimating that loss do not of themselves stand in the way of a substantial award of damages.
It was the respondents' submission that since all newspaper articles contained criticism of the Dalmacija and the cruise it was not possible to judge the effect of such passages as might be held to constitute misleading or deceptive conduct or to be defamatory. The answer to that objection is that the Daily News article of 8 January 1982 was in its substance a contravention of s.52 of the Trade Practices Act and was in its substance defamatory. The evidence left no doubt that this article produced the adverse reaction from the public. Again it was said that some of this reaction might have been produced by the television and radio broadcasts about the Far East Christmas cruise. The content of any radio broadcast did not appear in evidence but there was tendered the script of the Channel 9 report (Exhibit 26). Certainly this contained criticism of the Dalmacija's performance at sea. But there was no evidence of any reaction produced by radio or television and there was direct evidence of the impact of the Daily News article. In any event publication of the same libel by other persons on other occasions is irrelevant in mitigation of general damages: Associated Newspapers Ltd. v. Dingle (1964) AC 371.
It was common ground between the parties that, if the applicant succeeded both in respect of its claim under the Trade Practices Act and its claim for defamation, there should be one award of damages. The applicant accepted that, in the particular circumstances of the present case, the Court should not distinguish between damages payable pursuant to s.82 of the Trade Practices Act and damages payable for defamation. In each case it was loss of income for which the applicant was to be compensated. I am of the opinion that A.O.L. is entitled to an award of damages in the sum of $125,000, a sum which reflects the Court's assessment of the effect of cancellations, of immediate loss of interest in the Dalmacija and more long term loss of interest by reason of publication of the Daily News article of 8 January 1982.

Liability of second respondent
Mr. Harvey was sued as the printer of the Daily News and The West Australian. Since I have held the first respondent liable in damages no practical questions arise in regard to Mr. Harvey's liability. But he has been joined and it is necessary to say something about his position.
So far as the claim in defamation is concerned, his position is similar to that of the first respondent. As the printer of defamatory matter, he is liable in damages to the applicant.
As to the claim under the Trade Practices Act, the statement of claim alleges that in printing the articles and associated matter Mr. Harvey engaged in conduct in breach of s.52. Alternatively, it is said, he was a party to or was knowingly concerned in the contravention of the Act by West Australian Newspapers Limited.
There was no evidence relating to Mr. Harvey's position or duties. Paragraph 39 of the statement of claim asserts him to be the printer of each newspaper and para. 17 pleads that he was the printer of the billboards. Those allegations are admitted. Paragraph 35(a) of the statement of claim pleads that Mr. Harvey printed the articles, photographs, captions, billboards and newspapers "in the knowledge that the said newspapers were intended for publication to the public generally represented by purchasers and readers of the said newspapers". That allegation is admitted but a subsequent allegation that Mr. Harvey was "knowingly concerned in or a party to" the contravention of sub-s.52(1) by the first respondent is denied. Since Mr. Harvey is not a corporation, his liability depends upon the operation of s.75B of the Trade Practices Act. The applicant did not rely upon s.6 of that Act.
In so far as the applicant relies upon s.75B of the Act to hold Mr. Harvey liable, reference may be made to Yorke v. Lucas (1983) 49 ALR 672. See also Sent v. Jet Corporation of Australia Pty. Ltd. (1984) 54 ALR 237. It was held in Yorke v. Lucas that to show that a person has "aided or abetted" a contravention (para. 75B(a)) or has been "party" to a contravention (para. 75B(c)) it is necessary to establish, in the first case, that the person had actual or constructive knowledge of all the essential facts constituting the contravention and, in the second case, that he participated in or assented to the contravention with actual or constructive knowledge of all the essential elements of the contravention. It is not necessary to prove either the intention of the person alleged to have been involved in the contravention or that the person knew that those facts constituted an offence.
In Mr. Gleeson's submission, for Mr. Harvey to be knowingly concerned in a contravention of s.52 it would be necessary to prove that he was printing material which he knew to be misleading. In my view this submission goes beyond what is required by s.75B, read in the light of Yorke v. Lucas. Given the respondents' admission that Mr. Harvey printed the relevant material and did so in the knowledge that it was intended for publication, I am of opinion that he was both a party to and was knowingly concerned in the contravention of the first respondent for he had actual or constructive knowledge of the contents of each publication and it was the contents that gave rise to the contravention.
There will be judgment against both respondents in the sum of $125,000.

[1985] FCA 42

21 FEBRUARY 1985