Batounas v Kordatos

[1994] QCA 477

IN THE COURT OF APPEAL	[1994] QCA 477
SUPREME COURT OF QUEENSLAND	Appeal No. 13 of 1994
Brisbane
Before	Fitzgerald P. McPherson J.A. Derrington J.

[Kordatos v. Batounas]

BETWEEN:

MICHAEL THEODOSIOU BATOUNAS

(Defendant) Appellant

AND:

STEVE KORDATOS

(Plaintiff) Respondent

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 11/11/1994

The material facts are set out in the judgments of the other members of the Court.

There was no evidence that the appellant's statements to the police officer were not made in good faith except the general animosity between the parties, and the statement made by the appellant to the respondent when they met a few days after the appellant had spoken to the police. Even if the evidence referred to be considered in isolation and the appellant's failure to give evidence might more readily enable an adverse inference to be drawn against him, it does not support a finding of absence of good faith.

When the context is examined, it is even more apparent that such a finding is untenable. The respondent had borrowed and then failed to return the appellant's tools, engaging instead in obfuscation and prevarication. Understandably, the appellant sought legal advice, which he acted on. When he did so, he expressed himself in accurate, moderate terms.

To find absence of good faith in these circumstances would
be to impose unreasonable requirements, and unjustifiably
restrict the concept of privileged communications: cf.
Calwell v. Ipec Australia Ltd (1975) 135 C.L.R. 321, 332-
323.

The appeal should be allowed and the judgment below set aside. The respondent must pay the costs of the proceedings, including this appeal.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 13 of 1994

Brisbane

Before Fitzgerald P.
McPherson J.A.
Derrington J.

[Batounas v. Kordatos]

BETWEEN

MICHAEL THEODOSIOU BATOUNAS

(Defendant) Appellant

AND

STEVE KORDATOS

(Plaintiff) Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered the 11th day of November 1994

It is regrettable that the dispute out of which this appeal has arisen should have reached the courts at all. The matters which led the learned judge to give judgment for damages against the defendant are in some respects finely balanced; however, I do not consider that the result arrived at by his Honour should be disturbed.

The statement which gave rise to the plaintiff's action for damages for defamation was the defendant's report to the police in April 1991 that in 1988 he had lent some power tools and associated equipment to the plaintiff, who had failed to return them. By a letter dated 13 March 1991 (ex. 2), the defendant made a demand for their return within 7 days. The plaintiff replied by letter dated 18 March 1991 (ex. 3), in which he contested the defendant's title to the tools; in it he qualified his preparedness to give them up by attaching conditions which he was probably not entitled to impose.

It seems to me that the defendant's subsequent action in reporting the matter to the police is more likely than not to have stemmed principally from a strong sense of frustration at what the plaintiff had done to him rather than a genuine desire for the immediate return of goods of the value of some $70, which he had left in the possession of the plaintiff without prior demand for their return for a period of over two years.

One can well understand how the defendant would have felt at the time. The plaintiff, who had previously been his friend, had successfully sued him for an unpaid loan of $5,000. After the action had been instituted, he repaid the loan but without interest. The plaintiff thereupon obtained judgment against him for $288.90 and costs of $31.00 in November 1990. The defendant was apparently unsuccessful in having that judgment set aside. The plaintiff then compelled him to attend for oral examination as a debtor on 13 March 1991. On the occasion of that examination no mention was made of the tools borrowed by the plaintiff. However, it was on the same date (13 March) that the defendant wrote the first letter (ex. 2) demanding the return of the tools within 7 days. After receiving the plaintiff's reply of 18 March (ex. 3), the defendant repeated his demand by letter dated 21 March 1991 (ex.4). The correspondence concluded with a further letter dated 25 March 1991 (ex. 5) from the plaintiff insisting on compliance with the conditions stated in ex. 3 for return of the tools.

In 1991 Good Friday fell on 29 March. Allowing some leeway for the interruption presented by the Easter week- end, it was barely a working week later that the defendant reported the matter to the police at Indooroopilly on Thursday 4 April 1991. It thus seems likely that the defendant's report to the police was directly related to his having undergone oral examination at the instance of the plaintiff on 13 March 1991. The dates are close and the link provided through the correspondence is practically continuous.

On the same day (4 April) as the matter was reported to the police, the plaintiff found a recorded message on his telephone answering machine from Snr. Const. Moore of the Indooroopilly police station. He spoke to him on the following day 5 April, and found out then about the defendant's report to the police of the day before. The plaintiff attended at the police station on the day after that, which was Saturday 6 April.

It was on an occasion described by the plaintiff as "a few days after" that visit to the police station that the plaintiff and defendant met by chance in the Brisbane Mall.

There is a strong inference that on seeing the plaintiff, the defendant's treatment at the hands of the plaintiff would have been the uppermost thought in the defendant's mind. It was he who opened the conversation by saying to the plaintiff "So you went to the Indooroopilly Police Station?". The plaintiff's response was "Yes; they asked me to go there". To that the defendant said "You seen nothing yet - nothing yet".

The trial judge regarded the defendant's last remark as in the circumstances an indication that the defendant "was actuated by ill-will towards the plaintiff", so as to deprive the defendant of the excuse of qualified privilege on which he relied as a defence to the action. It is natural to link it with his first question to the plaintiff about the police station. The defendant himself did not testify at the trial, so that there was no affirmative evidence that in making the report to the police on 4 April he had done so without any vindictive motive but simply in pursuit of his claim to regain possession of his property. There was evidence from two solicitors that the defendant had consulted each of them on separate occasions, and had been advised that the most effective method of recovering his tools was by reporting the matter to the police. It is not clear when this advice was given. Naturally enough, neither of the solicitors was in a position to say that, in seeking their advice, the defendant was not affected by vindictive feelings toward the plaintiff. It may be that he was not; but, like the trial judge, I incline to the view that it was more likely that going to the police was a means of paying the plaintiff back for what he had recently put the defendant through.

The circumstances giving rise to an adverse inference against the defendant seem to me to be compelling. They are principally the timing and surrounding circumstances (including the oral examination and the correspondence) of his report to the police; the threat he made to the plaintiff in the Mall a few days later; and the link with the plaintiff's having gone to the Indooroopilly police station that was suggested by the defendant's own reference to it on that occasion. Taken with the defendant's failure to give evidence, these are all matters that, in my assessment, render a conclusion that, in making the statement to Snr. Const. Moore on 4 April 1991, the defendant was more likely than not actuated by ill-will towards the plaintiff.

I would dismiss the appeal with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 13 of 1994 (District Court No. 2959 of 1991)
Brisbane
BETWEEN:

MICHAEL THEODOSIOU BATOUNAS

(Defendant) Appellant

AND:

STEVE KORDATOS

(Plaintiff) Respondent

Fitzgerald P
McPherson JA

Derrington J

Judgment delivered 11/11/1994

Reasons for judgment of Fitzgerald P, McPherson JA and Derrington J; Fitzgerald P and
Derrington J concurring as to the orders made, McPherson JA dissenting.

Appeal allowed. Judgment below set aside. Action dismissed with costs to be taxed and the respondent to pay the taxed costs of the appeal.

CATCHWORDS:	DEFAMATION - Privilege - Complaint to Police - Good faith - Malice - whether proof of retrospectively by later threat referring to complaint - Nature and reasonableness of terms of complaint relevant to good faith - Prior conduct relevant - General mutual ill- will relevant to but not decisive of malice - Court slow to infer malice retrospective from later emotional remark
COUNSEL:	Mr L. Boccabella for the Applicant Mr A.D.J. Collins for the Respondent
SOLICITORS:	Conroy & Associates for the Applicant Greys Lawyers for the Respondent
HEARING DATE:	12th October 1994

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 13 of 1994 (District Court No. 2959 of 1991)
Brisbane
Before:	Fitzgerald P McPherson JA Derrington J

[Batounas v. Kordatos]

BETWEEN:

MICHAEL THEODOSIOU BATOUNAS

(Defendant) Appellant

AND:

STEVE KORDATOS

(Plaintiff) Respondent

JUDGMENT - DERRINGTON J

Delivered the 11th day of November, 1994

The appellant was the defendant in a defamation action in the District Court. The

defamatory statement is described in the plaint in the following way:

"3. On or about the 4th day of April 1991 the defendant made a complaint to a constable Dan Moore at the Indooroopilly Police Station, 151 Coonan Street, Indooroopilly, in the State of Queensland that the plaintiff had stolen from him, the defendant, tools to a value of $60.00 to $70.00 ("the said words")."

In answer to that, the appellant pleaded in his defence as follows:

"3A. As to paragraph 3 of the Plaint, the defendant does not adopt the word "complaint" but says that the defendant spoke to a Senior Constable D.P. Moore and told him that the defendant had lent the plaintiff certain tools for the plaintiff to build a playhouse for the plaintiff's children and that after the defendant made demand for the return of these tools, the plaintiff had failed to return those tools to the defendant. The defendant further says that he hold Senior Constable Moore that the defendant had received legal advice that the failure to return the tools after the demand could amount to stealing. The defendant told Senior Constable Moore that the replacement value of the goods was about $200.00 but the actual value was between $60.00 and $70.00. Save as aforesaid, the defendant denies the allegations in paragraph 3 of the Plaint."

The general terms of the relevant conversation were described in evidence by Senior

Constable Moore, and he was uncontradicted because the appellant did not give evidence.

However he could not give the precise details of the appellant's words. In answer to the question:

"What were the circumstances that were stated to you?", he replied: "That in April 1990 Mr

Batounas loaned a friend, Mr Kordatos, the above-mentioned property to build some - a playhouse

for his children. Since then they had a falling out and he made several attempts to obtain the

property back and this wasn't done." He was not sure whether the appellant had used the word

"stealing".

In addition, the appellant produced to him three letters passing between the parties. There

had been four in all commencing with a request by the appellant for the return of the tools. While

not denying the loan, the respondent in reply had suggested that a friend of the appellant had claimed

ownership of the tools and the respondent demanded some written authority before he would hand

them over. The appellant then demanded the return of the tools by a letter on which the respondent

typed places for a signature by the appellant and two witnesses and wrote to the appellant saying

that if the letter was signed in the presence of two witnesses and sent back to him he would deal

with the appellant's request for the return of the tools. He did not say that he would return them in

that event.

The attitude of the respondent in this correspondence was not very praiseworthy, but it was

written as part of a bitter dispute between former friends who had fallen out. He had obtained

judgment against the appellant for the recovery of moneys lent and interest, and other litigation was

pending or threatened.

More relevantly, no inference adverse to the appellant could be drawn from the fact that he

produced to the police only three of the four letters constituting the correspondence. There was no

evidence as to which letter was missing. The entire correspondence was before the court, and it is

difficult to understand how the appellant could have derived any advantage by failing to produce any part of it to the police. Moreover, the reason for its non-production was not apparent, and it would

be speculative to conclude that any document was deliberately withheld for an improper purpose.

The respondent also led evidence from two solicitors who had advised the appellant before

he made his complaint to the police. After privilege was waived, each of them told the Court that he

had advised the appellant of his civil remedy but also advised him that it would be more practical to

seek the assistance of the police to recover the goods; and each acknowledged that in his advice to

the appellant he had used the word "stealing" as a possible description of the respondent's conduct.

The learned Trial Judge was quite puzzled that the appellant should have consulted two

separate firms of solicitors on the matter before going to the police. That puzzle was never resolved,

but nothing adverse to him can reasonably be inferred from this material. It might at least be

observed that he did not seize upon the first piece of advice to go to the police as a means of

harassing the respondent. This may be some small indication of the absence of malice, which is the

central issue in this matter. Moreover there cannot be the slightest inference of malice from the fact

of his making of the complaint for he had a seemingly genuine claim and had been advised by both

solicitors to do so.

The only other relevant evidence, and something upon which the learned Trial Judge placed

considerable importance, was a remark made by the appellant to the respondent on a chance

meeting in the Queen Street Mall in Brisbane a few days after the respondent's visit to the police

station. The uncontradicted evidence of the respondent is as follows:

"He said to me 'So you went to Indooroopilly Police Station' and I said 'Yes they

asked me to go there.' You see nothing yet he said to me - nothing yet."

The learned Trial Judge reasonably regarded the last words of the appellant as a threat. He

related the reference in the threat to the appellant's earlier complaint to the police, and this too is

entirely reasonable as the threat came immediately after the reference in the conversation to the

Indooroopilly Police Station. He also found that it indicated that the appellant was actuated by ill- will towards the respondent. It was common ground that at the time of the complaint both parties

harboured ill-will towards each other and undoubtedly the threat itself was actuated in part by ill-

will; but its probative force in establishing retrospectively the existence of bad faith in the making of

the complaint to the police is of course a different matter.

Learned counsel for the appellant argued that it was wrong to relate the reference in the

threat to the complaint because in the context of the general complex pending litigation between the

parties, the reference was at least equivocal, and the respondent had not discharged his onus of

proof. This view is untenable. Not only is the inference as found the more likely one in the context

of the total conversation, but the appellant's failure to give evidence entitled the Court more

comfortably to draw the inference adverse to him which he could easily have disestablished by a

suitable explanation: Jones v. Dunkel (1959) 101 C.L.R. 2998. His absence from the witness-box

cannot be used to construct evidence that is not there, nor to draw an inference that the facts should

not reasonably bear particularly where his evidence could not advance the enquiry; but where the

adverse inference is clearly reasonable and he could have identified the matters to which he was

referring, his failure to give evidence very properly led to the result which it did.

This concludes the review of the evidence, which was uncontradicted. On these facts, the

learned Trial Judge found that there was defamation, that the occasion was one in which privilege

could apply, but that it was unavailable to the appellant because the defamation was not made in

good faith because of malice. As it has already been noticed, the last finding is the critical one, but it

is still necessary to discuss some other features which have a bearing on it.

The question whether the word "stealing" was used by the appellant in his complaint to the

police appears to have occupied a lot of the attention of counsel and the Court below. Having

regard to the appellant's own pleading, the learned Trial Judge properly found that it was used. Its

significance, however, appears to have been the subject of some confusion. Even without its use,

the complaint which the appellant admits that he made to the police, that the respondent was wrongfully refusing to return his property, constituted a clear defamation. It alleged wrongful

conduct by the respondent, and whether it alleged an offence or not, such an allegation was

defamatory.

No doubt the focus that was placed on the word was the result of the limited allegation in

the plaint, but that was amendable, and having regard to the fullness of the appellant's explanation of

the facts to the police and to the fact that the reference to stealing may well have been in terms of an

opinion as to the possibility that the conduct had amounted to stealing, there was nothing of

substance or crucial in the point in relation to the question whether defamation had occurred.

The only significance of the use or otherwise of the word "stealing" is its relevance to the

issue of malice. In general it is a more serious allegation to suggest that the conduct complained of

amounts to a criminal offence, but if the full facts and circumstances are fairly explained, and if it is

said to be a matter of opinion only that the conduct may amount to an offence, then that seriousness

is suitably modified. This is relevant to malice for an excessive complaint in inflammatory language

may indicate malice while a reasonable and fair complaint may imply the contrary. Consequently,

the mere use of the word "stealing" while having some significance on this issue must always be read

in the light of its context and the total colour of the full communication.

On this issue, consideration must also be given to any other relevant conduct that manifests

the party's state of mind. Just as the learned Trial Judge in his search for signs of malice or good

faith correctly extended his consideration to the statement later made by the appellant, so too the

fullness and fairness of the appellant's account to the police, the presence or absence of

inflammatory or excessive language, his having consulted two solicitors before going to the police,

and his having gone to the police on the advice of both solicitors must be taken into account. Just as

words that are utterly disproportionate to the facts may amount to evidence of malice [Spill v. Maule

(1869) L.R. 4 Ex 232], conversely the absence of excessive language may be some evidence of its

absence: Sinclair v. Bjelke Petersen (1984) 1 Qd.R. 484 at 492. So too the accuracy of the facts and the fullness and fairness of the account given may indicate good faith, despite the existence of a

general ill-will. These are not principles of law but rather matters of circumstantial evidence leading

to an inference of one conclusion or the other, and apart from the remark made in the street, they

tend to favour the appellant's good faith.

Unfortunately these matters have not found mention in relevant discussion in the reasons

given by the learned Trial Judge. Despite the unsatisfactory nature of the evidence of the terms of

the complaint made to Senior Constable Moore, there were no findings as to its circumstances

which touched on the issue of malice. On that topic, the only discussion below related to the

conversation in the Mall described above. Because he was of opinion that the remarks alone

indicated that the appellant was actuated by ill-will towards the plaintiff, the learned Trial Judge

expressed himself satisfied on the probabilities that the appellant was motivated by a spirit of spite or

revenge towards the plaintiff and that he had made the complaint of stealing to the police to

embarrass or humiliate him.

While it was reasonable to conclude that the threat was made with ill-will at that time, and

that there was generally a strong mutual ill-will between the parties which probably existed at the

time when the complaint was made to the police, however, this alone is not sufficient to support a

finding of bad faith as the motivation for that complaint, particularly having regard to the

circumstances in which it was made, including those circumstances prompting it.

Despite his reference to his earlier act of complaining to the police, which could have some

significance, the inferences that can be safely drawn from the appellant's threat must be limited in

these circumstances. It does not follow that, when the complaint was made, it was necessarily made

with malice. The appellant had been trying to recover his property, with some unfortunate resistance

by the respondent. His demand may have been provoked as a pay-back for the respondent's

actions against him, but he was still entitled to it and the respondent's conduct left him with little

choice but to continue if he wished to recover it and to keep his self-respect. He had been advised by two solicitors to go to the police. Had he done so in good faith, it is still clearly open that in a

later emotional discussion with the respondent he might make a spiteful threat of future action by

reference to the recent earlier action. Conduct of this kind is far from unknown in human affairs.

Further, although the threat was made maliciously, it is also necessary to study its content

before drawing inferences of serious anterior malice. Its terms do not expressly suggest that the

threatened activity would be improper, though it is open to find that some veiled implication to that

effect might be drawn from it. However, the appellant appears to have at least an arguable ground

for future proper action. A frustrated complainant acting in good faith might well have used exactly

the same words without any adverse implication, and although the appellant harboured ill-will to the

respondent, he was also frustrated in obtaining his rights. It is easy to regard the threat as pregnant

with a tacit suggestion of improper responses, but its terms were comparatively mild and still

consistent with a threat of nothing more than legitimate action. Consequently, it is again desirable to

have recourse to other available material to help to resolve this somewhat equivocal point. Some

consideration must also be given to personality factors and the emotional circumstances in which the

threat was made.

It is not intended to suggest that, so far as it went, the inference drawn from this statement

by the learned Trial Judge was not one of the inferences open to be drawn. Rather it is intended to

consider fully the competing inferences and other factors which bear upon the relative strength of the

competing inferences.

There is a principle that the Court should not be too quick to find evidence of malice in the

terms of defamatory material published on a privileged occasion because to do so would restrict

considerably, if not defeat, the protection which the common law confers on privileged

communications: Laughton v. Bishop of Sodor and Man (1872) L.R. 4 P.C. 495; Adam v. Ward

(1917) A.C. 309; both cited with approval in Calwell v. Ipec Australia Ltd (1975) 135 C.L.R. 321

at 332-333 per Mason J (as he then was). The remark made by the appellant in the Mall does not come within that class of material but there are some analogous features that would support a

similarly cautious approach in this case. Where there is nothing about the circumstances of a

defamatory statement to suggest bad faith, as distinct from ill-will, that would defeat privilege to

which it would otherwise be entitled, the Court should hesitate before inferring bad faith

retrospectively from an equivocal statement made on a later occasion, particularly if it is made in

emotional circumstances.

Fortunately in its review of the inferences that should be drawn from the facts, this Court is

not burdened with any difficulty relating to credibility in its assessment of the evidence. Further, as

all the facts on this issue, except for that discussed above, were before the court, the appellant's

failure to give evidence has little practical effect on the result.

When all of the competing factors and their respect weight are properly taken into account,

it should not be inferred that the appellant's threat made in the Mall was probably more than a

spontaneous angry response by one who felt himself wronged and who seized upon his recent bona

fide action as a means of exaggerating his threat. Nor, even in the atmosphere of ill-will that

prevailed, can any inference be drawn from it that the appellant had probably been guilty of bad faith

when he had made the complaint. Because such an inference is the only foundation for any finding

of bad faith, the respondent has failed to discharge his onus of proving it. The appellant's plea of

privilege therefore succeeds.

The appeal should be allowed and the judgment below set aside. The action should be

dismissed with costs, to be taxed, and the respondent should pay the costs of the appeal, to be

taxed.