Belbin v Lower Murray Urban and Rural Water Corporation

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MILDURA

COMMON LAW DIVISION
MAJOR TORTS LIST

S CI 2010 04662

JIM BELBIN	Plaintiff
v
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Defendant

S CI 2010 4536

FRANK DI MASI	Plaintiff
v
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Defendant

S CI 2010 04757

DON MARCIANO	Plaintiff
v
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Defendant

S CI 2010 04707

NANCY PREVEDELLO	Plaintiff
v
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Defendant

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JUDGE:	KAYE J
WHERE HELD:	Mildura
DATES OF HEARING (BEFORE JURY):	23-27, 30, 31 July, 1-3, 6-10, 13-17, 20, 21 August 2012
JURY VERDICT:	21 August 2012
DATES OF HEARING:	(Legal Argument and Damages) 8-10, 18 October 2012
DATE OF JUDGMENT:	9 November 2012
CASE MAY BE CITED AS:	Belbin & Ors v Lower Murray Urban and Rural Water Corporation
MEDIUM NEUTRAL CITATION:	[2012] VSC 535

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DEFAMATION –Letter from Minister for Water published on defendant’s website – Trial by jury – Whether letter published – Whether letter defamatory – Defence of publication of public documents – Defamation Act 2005 (Vic) s 28(1) – Defence of qualified privilege under s 30 of Defamation Act – Defence of qualified privilege at common law – Role of jury – Verdicts on publication, imputations and malice – Special verdicts on facts relevant to defences – Whether defences established – Meaning of “issued” and “for the information of the public” in s 28(4)(d) of Defamation Act – Requirements of statutory qualified privilege under s 30 of Defamation Act – Damages – Small scope of publication – Grapevine effect – No defence of truth – Cross-examination as to truth of imputations – Whether substantial truth of imputations established – Whether damages mitigated or aggravated by cross-examination – Other aggravating factors – Purposes of award of damages.

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APPEARANCES:	Counsel	Solicitors
In each case for the Plaintiffs	Mr D Gilbertson	HWL Ebsworth Lawyers
In each case for the Defendant	Dr M Collins SC and Mr N Kaskani	DLA Piper Australia

TABLE OF CONTENTS

Background......................................................................................................................................... 1

Mr Holding’s letter............................................................................................................................. 1

The pleadings..................................................................................................................................... 1

The proceeding and the issues........................................................................................................ 1

The jury’s verdicts.............................................................................................................................. 1

The effect of the jury’s verdicts: issues remaining for decision............................................... 1

Whether the defendant published the letter to Glen Miller...................................................... 1

The defence under s 28 of the Defamation Act 2005.................................................................... 1

Section 28 defence: submissions.................................................................................................... 1

Section 28 defence: conclusions..................................................................................................... 1

Defence of statutory qualified privilege: Defamation Act s 30................................................. 1

Statutory qualified privilege: submissions.................................................................................. 1

Statutory qualified privilege: conclusions................................................................................... 1

(a)       The extent to which the matter published is of public interest........................... 1
(b)      The extent to which the matter published relates to the performance of the public functions or activities of the person....................................................................................................... 1
(c)       The seriousness of any defamatory imputation carried by the matter published    1
(d)      The extent to which the matter published distinguishes between suspicions, allegations and proven facts...................................................................................................................... 1
(e)       Whether it was in the public interest in the circumstances for the matter to be published expeditiously........................................................................................................................... 1
(f)       The nature of the business environment in which the defendant operates....... 1
(g)      The sources of the information in the matter published and the integrity of those sources           1
(h)      Whether the matter published contained the substance of the person’s side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and public a response from the person....................................................................................................................... 1
(i)    Any other steps taken to verify the information in the matter published.............. 1

Damages............................................................................................................................................... 1

Damages: conclusions....................................................................................................................... 1

Damages – evidence and cross-examination as to the “truth” of the imputations................ 1

Aggravated damages.......................................................................................................................... 1

Damages: vindication of plaintiffs’ reputations.......................................................................... 1

Conclusions on damages.................................................................................................................. 1

Summary of conclusions................................................................................................................... 1

HIS HONOUR:

These proceedings arise out of the decision by the then Minister for Water, the Honourable Tim Holding MP, on 15 August 2008, pursuant to s 87(1) of the Water Act 1989 (“the Water Act”), that the defendant, Lower Murray Urban and Rural Water Corporation, be appointed to take over the whole of the functions, powers and duties of the First Mildura Irrigation Trust (“FMIT”).

The four plaintiffs (Jim Belbin, Frank Di Masi, Don Marciano and Nancy Prevedello) were members of the Board of FMIT at the time of that decision. They have each brought a proceeding for damages for defamation arising out of the publication by the defendant, on its website, of a letter by the Minister for Water, which had been originally addressed to the former customers of FMIT. In response to those proceedings, the defendant has relied on three defences, namely, a defence under s 28 of the Defamation Act 2005 (Vic) (“the Defamation Act”), that the letter published by it was a fair comment of a public document issued by an officer of the government for the information of the public, secondly, a defence of qualified privilege pursuant to s 30 of the Act, and, thirdly, a defence of common law qualified privilege. In response to the third defence, the plaintiffs pleaded malice.

The trial of the proceedings took place before a jury. In each proceeding, the jury was asked to deliver verdicts in relation to thirteen questions. By its verdicts in respect of the two first questions, the jury upheld the plaintiffs’ claims that they had been defamed by the publication of the letter in Victoria in the period of twelve months before the commencement of proceedings. By its verdicts in respect of Questions 3 to 12, the jury decided a number of disputed issues of fact, which are necessary for the determination by me of the question whether the defendant had made out the defences on which it relied. By its verdict on Question 13, the jury determined that the plaintiffs had established that the defendant had been actuated by malice in publishing the letter on its website.

Background

For more than one century before its closure in 2008, the FMIT had played a central role in the foundation and development of Mildura and its surrounding districts. In the late 19^th century, two Canadian brothers, George and Ben Chaffey, entered into an agreement with the government to establish an irrigation colony on the Murray River. For that purpose they founded the FMIT. The Trust was formally recognised by an Act of Parliament in 1895 (the Mildura Irrigation Trusts Act 1895). For the next 110 years, FMIT provided irrigation services in the Mildura area. A unique feature of the Trust was that its board of directors was elected by local irrigators, so that the Board was directly answerable to the community, and to the irrigators which it served. By the time of its closure in 2008, in the words of some witnesses in this case, FMIT had become established as an icon in the Mildura community.

At the time of its closure, there were six elected members of the Board of FMIT. Each year two members came up for election. In that way the Board members served in rotation. Mr Belbin and Mr Marciano were each first elected to the Board in 2003, and they commenced as members of the Board on 1 July 2003. Mr Belbin was chairman of the Board since that date. Mr Di Masi first joined the Board in 1988, and, except for the period 2004 to 2005, he remained on it until its closure. Mrs Prevedello was elected to the Board of FMIT in May 2008. She commenced to serve on the Board on 1 July 2008, and she attended her first Board meeting on the next day, 2 July.

In 2005, the Board of FMIT proposed to upgrade the Mildura South Channel, at an estimated cost of $2,000,000. It was then anticipated that the Trust would need to borrow approximately $3,000,000 to finance the works. Under s 243 of the Water Act, the Minister was entitled to give the Trust approval to borrow those funds. Nevertheless, in October 2006, the then Minister for Water, the Honourable John Thwaites MP, directed the FMIT that, in order to borrow the funds, it must apply to become an authority under the Borrowing and Investment Powers Act 1987 (Vic) (“BIP Act”).

As a result, FMIT made an application, in November 2006, to the Department of Treasury and Finance, to borrow $3,000,000. It subsequently amended that application to enable it to borrow the sum of $4,700,000. In response to the application, the Department of Treasury and Finance (“DTF”) required FMIT to adopt a Treasury Management Policy in accordance with guidelines provided by the department. Accordingly, at its meeting on 20 March 2007, the FMIT Board resolved to approve a draft Treasury Policy which was put before it.

By Order in Council dated 5 April 2007, the Governor in Council, pursuant to s 20 of the BIP Act, and on the recommendation of the Treasurer, approved FMIT investing its money in the manner described in the schedule to the order. In effect, the schedule approved deposits, or investments, with the Treasury Corporation Victoria (“TCV”) and with any authorised deposit taking institution under the Banking Act 1959 (Cth).

At its meeting on 17 April 2007, the Board of FMIT resolved to draw down the credit facility, provided by TCV, in full. Accordingly, on 20 April 2007, it borrowed $4.7 million from TCV. Shortly after the funds were drawn down, the Finance Manager of FMIT invested $4.2 million of the borrowed funds with Grange Securities. At the next Board meeting, on 14 May 2007, the Board papers included a report of the Finance Manager (dated 30 April 2007). That report noted that the funds, borrowed from TCV, had been placed, in four investments, with Grange Securities. At the subsequent Board meeting, on 18 June 2007, the Finance Manager’s report (dated 31 May 2007) disclosed that, of the funds borrowed from TCV, $4.2 million had been placed, in three investments, with Grange Securities. The evidence reveals that there was little, or no, discussion at either Board meeting, or any ensuing Board meeting, concerning those investments.

Grange Securities was an investment broker, which sourced investments on behalf of its clients. For a number of years before 2007, FMIT had placed funds with Grange Securities for the purpose of investment by Grange of those funds on behalf of the Trust.

In July 2007, FMIT withdrew $2,000,000 of the funds advanced to Grange Securities, for the purposes of paying an instalment on the works being undertaken on the Mildura South Channel. That withdrawal reduced the amount, placed by FMIT with Grange Securities, to $2.2 million.

In mid-August 2007, FMIT was made aware, by the Auditor-General, that Grange Securities had invested $1.5 million of its funds with Lehman Brothers Treasury Company “Federation AAA” CDOs (collateralised debt obligations), and $0.7 million in Zircon Finance Limited “Merimbula” CDOs. The Board learnt, at that time, that both investments had been adversely affected by the United States sub-prime mortgage market crisis. Having sought advice, the Board of FMIT determined to retain the investments, rather than to seek to realise them, and thus crystallise what, at that time, would have been a substantial loss on the investments.

Mr Holding became the Minister for Water in 2007. In November 2007, his Department advised him of the issues which had arisen as a result of the investment by FMIT with Grange Securities. In particular, those issues concerned the amount of loss to which FMIT might be exposed, and whether the investment was outside the authority given to FMIT under the BIP Act.

Accordingly, the Minister wrote a letter to Mr Belbin, the chairperson of FMIT, on 28 November 2007, seeking answers to five questions concerning the investment. Mr Belbin responded to that letter on the same day. Subsequently, on 8 March 2008, Mr Holding met with Mr Belbin, Mr Di Masi, and Mr Matheson, the managing director of FMIT, at the offices of FMIT in Mildura. At that meeting, he provided the representatives of FMIT with thirteen directions, which he intended to give to FMIT pursuant to s 307(1) of the Water Act.

FMIT responded to those directions, and Mr Belbin wrote a letter to Mr Holding dated 12 May 2008 advising him to that effect. In the meantime, FMIT wrote to the Departmental Secretary of the Department of Sustainability and Environment (“DSE”), seeking approval to access a $500,000 overdraft accommodation previously approved by the Treasurer, and also requesting an “additional financial accommodation” for $1,500,000 to meet ongoing business cash flow requirements. The additional financial accommodation, in fact, consisted of a rollover of $1.5 million of the monies advanced by TCV, which FMIT would otherwise have been required to repay to TCV.

In about late May 2008, Mr Holding decided to appoint Deloitte Touche Tohmatsu (“Deloitte”), to investigate and prepare a report on the commercial affairs of FMIT. Deloitte undertook that investigation, and submitted a report to the Minister dated 13 June 2008. The key findings of Deloitte were that the short-term, medium-term and long-term viability of FMIT was at risk. It found that the FMIT short term viability was at risk, without additional funding, because of factors such as revenue shortfalls, and also because of the impact of the Grange Securities investments. It found that FMIT’s medium and long-term viability was at risk because of external factors, such as the ongoing drought, demographic shifts and urban encroachment, and increased trading of water entitlements out of the FMIT district.

In June 2008, the Board of FMIT approved changes to the employment contracts of four of its senior officers, namely, the business manager, the engineering services manager, the finance manager, and the managing director. The effect of the changes was that if FMIT was taken over by the defendant, those four staff members, at their option, would be entitled to take 12 months’ salary by resigning at any time before the end of their contract period. The Board approved the changes because there had been speculation, in the media, as to the future of the FMIT, and in particular as to whether it was to be compulsorily merged with the defendant. The Board was concerned to ensure that its four senior staff members did not resign, and seek other employment, because of the uncertainty surrounding the future of FMIT. The Board did not advise Mr Holding, or his department, of its approval of the changes to the contract entitlements of the four staff members.

In late June 2008, FMIT received a copy of the Deloitte report. On 2 July 2008, Mr Holding attended, and addressed, a meeting of the FMIT Board. There were some differences in the accounts given in evidence, on the one hand, by Mr Belbin and Mr Di Masi, and, on the other hand, by Mr Holding, as to what was said at the meeting. It is not necessary for me to resolve those differences for the purposes of the issues which I must decide. It was, however, common ground that at the meeting, Mrs Prevedello spoke to Mr Holding, and she told him that that meeting was her first as a member of the Board of FMIT.

On 11 July 2008, Mr Belbin, on behalf of FMIT, wrote to Mr Holding enclosing the response by FMIT to the Deloitte report. In the meantime, Mr Holding had commissioned a second report by Deloitte, in which Deloitte was requested to model the effect of any decision by him to merge FMIT with the defendant. In particular, Mr Holding wished to ascertain whether there would be any adverse effect on the customers of FMIT arising from such a merger. The second Deloitte’s report was provided to the Minister on 14 July 2008. Mr Holding did not make a copy of it available to FMIT. However, in late July, Mr Di Masi obtained a copy of it unofficially.

In early August 2008, Mr Holding reached the conclusion that he should direct that the defendant be appointed to take over the functions, powers and duties of FMIT. On 15 August 2008, he telephoned Mr Belbin, and advised him of his decision. On the same day, he sent to Mr Belbin, by facsimile, a letter advising him of his decision that the defendant be appointed to take over the functions, powers and duties of FMIT under the Water Act. He attached to that letter a document entitled “Reasons for Determination”. The Minister’s decision was to take effect as from 19 August 2008. On 18 August 2008, Mr Holding wrote letters to the Clerk of the Legislative Council, and to the Clerk of the Legislative Assembly, requesting them to lay a copy of the reasons for his determination before both Houses of Parliament, as required by s 87(2)(b)(ii) of the Water Act.

The decision by Mr Holding to close FMIT, and to merge it with the defendant, was met with a very strong emotional public response by the Mildura community. On 17 August, there was a large public rally outside the FMIT offices, protesting against the decision. On 19 August, Mr Belbin issued a press release on behalf of FMIT, entitled “FMIT reject claims of illegal investments”. On the same day, three of the four senior managers of FMIT resigned, thus triggering their entitlements to twelve months’ salary pursuant to the adjustments, which had been approved to their employment contracts. The Minister’s decision took place at midnight on 19 August. On the next day, the defendant held a press conference at the Grand Hotel. There was a large protest outside the hotel, and some of those who were protesting entered the hotel. A physical scuffle ensued. Six days later, Mr Holding attended Mildura in order to explain his decision. As a result, there was a very large rally outside the offices of the defendant. Angry placards were carried by some of the protestors, and some of them struck the car in which Mr Holding arrived.

Mr Holding’s letter

Subsequent to the merger of FMIT with the defendant, Mr Holding’s staff prepared a letter, which he signed, to be sent to former FMIT customers. Mr Holding’s advisor contacted Mr Ronald Leamon, the managing director of the defendant, and requested him to facilitate the distribution of the letter to former FMIT customers. The letter was provided to Mr Leamon in electronic form. Having received it, the defendant distributed it, in the mail, to the former customers of FMIT. The letter was accompanied by a letter, which Mr Leamon had prepared on the defendant’s letterhead, and which provided information, to the former customers of FMIT, of the arrangements for the forthcoming season.

Having distributed the letter, as requested, to former customers of FMIT, Mr Leamon then made a decision to publish the Minister’s letter on the defendant’s website. Subsequent to the decision of the Minister to merge FMIT with the defendant, the defendant had established a page on its website, entitled “Integration of FMIT”. On that page, it provided a link entitled, “Minister’s letter to former FMIT customers”, which enabled any person, who clicked that link, to download and read Mr Holding’s letter. These proceedings arise out of the publication by the defendant of the Minister’s letter on its website.

It is necessary to set out the whole of the Minister’s letter. It is as follows:

“Dear Customer,
CLOSURE OF THE FIRST MILDURA IRRIGATION TRUST
My decision to close down the First Mildura Irrigation Trust (FMIT) has understandably generated a great deal of debate in the Mildura community, and concern among former FMIT customers wanting assurances about accessing their legal entitlements to water.
My primary concern in making this decision was to safeguard the interests of those Mildura residents who depend on FMIT for irrigation services. To that end, I have provided guarantees that prices will not rise above those already approved by the Essential Services Commission, Victoria’s independent price regulator, for the next five years.
I have also provided guarantees that FMIT staff would have their jobs protected. And I have decided to appoint an FMIT customer to the Lower Murray Water Board, so that the Board has the direct benefit of your perspectives when making decisions.
Highly emotive and selective accounts of recent events have sought only to deflect scrutiny away from those responsible for FMIT’s demise. I believe that you deserve better and that is why I am writing to you to explain the reasons for my decision.
My decision was based in part on the fact that the FMIT Board members broke the law by investing $2.2 million of Victorian Government money without Treasury approval. The specific law broken was the Borrowing and Investment Powers Act 1987.
The Government loaned this money to FMIT to invest in upgrading local irrigation infrastructure, for the lasting benefit of its members. Instead, the FMIT Board invested the money in the United States sub-prime mortgage market, where it lost $2 million of its value.
This was a serious breach of trust with local irrigators, who should have been able to rely on the Board to manage the Trust’s finances responsibly and within legal limits. It also reflected an entrenched disregard for the governance and financial processes required of all water authorities to ensure that public money – your money – is being used appropriately.
This bad investment in turn led to the Board seeking Government approval to borrow another $2 million, taking its customers even further into debt, simply to raise cash for its day-to-day operations. This move crystallised concerns about its short to long-term viability.
Reports by Deloitte and the Essential Services Commission had raised serious concerns about FMIT’s viability and its commitment to properly manage its affairs. Specifically, FMIT’s small size made it acutely vulnerable to the impacts of drought and climate change, with reduced rainfall leading to lower water allocations and therefore revenue.
Furthermore, demographic changes and urban encroachment around Mildura will reduce irrigated land in FMIT’s district, further undermining its capacity to trade its way out of debt in the medium to long term.
I came to Mildura twice to meet the Board to discuss these matters. I gave the Board ample time and opportunities to address the issues. Unfortunately, the Board’s responses indicated that it did not take these matters seriously and I had no choice but to shut down the Trust in the interests of local irrigators and the wider Victorian community. I have visited Mildura since then, and met with irrigator representatives to discuss the best way forward.
Since making the decision, further irregularities in the former FMIT’s management have come to light. For example, in June this year, the Board approved secret, last-minute adjustments to senior management contracts in the event of FMIT being taken over.
These adjustments provided termination payouts more than double those allowed in the Government Sector Executive Remuneration Panel’s guidelines. I also understand that tax was not withheld from the payouts, as required under Australian taxation law.
The Victorian Government and Lower Murray Water are now considering the options to recover this money so that it can be used to the benefit of all former FMIT customers, not just a few former staff.
Also enclosed is a letter from Lower Murray Water, detailing the way forward for former FMIT customers and providing assurances about pricing and delivery arrangements over coming months and years. I will encourage you to contact Lower Murray Water direct to discuss any queries.
FMIT customers and Mildura in general have much to look forward to, despite the difficult conditions caused by the ongoing drought. The Victorian Government has secured a Commonwealth commitment of up to $103 million for irrigation upgrades in the area, including in the First Mildura Irrigation District. We now all need to work together to make the most of this opportunity to secure a sustainable future for you and your family.”

The pleadings

In each proceeding, the plaintiffs pleaded that the letter, as published by the defendant, in its ordinary and natural meaning, bore three imputations, which were defamatory of them. The first two imputations were based on the fifth, sixth, seventh and eighth paragraphs of the letter, concerning the investment of the money borrowed by FMIT from TCV. The third imputation arose from the twelfth, thirteenth and fourteenth paragraphs of the letter, which related to the approval by the Board of FMIT of the adjustments to the contracts of four senior officers of FMIT. The imputations relied on by each plaintiff were that:

(a)The plaintiff broke the law by investing $2.2 million of Victorian Government money without Treasury approval;
(b)The plaintiff acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market;
(c)The plaintiff approved secret last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over.

In the interlocutory stages of the proceeding, the defence pleaded by the defendant underwent a series of amendments. In each proceeding, the first three versions of the defence contained a plea of justification. That plea was omitted from the defence at the time the trial commenced. At trial, the defendant relied upon a defence under s 28 of the Defamation Act, that the letter was a fair copy of a public document. The defendant contended that the letter of Mr Holding was a “public document” pursuant to s 28(4)(d), because it was a document issued by an officer of the government for the information of the public. Thus, the first substantive defence for the defendant was that the letter of Mr Holding, published by it, was a copy of a document issued by an officer of the government (the Minister for Water) for the information of the public.

The second defence relied on by the defendant was a defence of qualified privilege under s 30 of the Act. In the course of the trial, I granted the defendant leave to amend its defence by adding to it a defence of qualified privilege at common law.[1] Pursuant to that amendment, the defendant pleaded that it had a duty to publish the Minister’s explanation, for his decision to merge FMIT with the defendant, to a number of categories of persons, namely: its customers and potential customers; former customers of FMIT; persons who requested a copy of the letter by going to the defendant’s website for the purpose of seeking it out; the general public of the community in and around Mildura. In response to the defence of qualified privilege at common law, the plaintiffs in each case pleaded malice.
[1]Belbin & Ors v Lower Murray Urban Rural Water Corporation (Ruling No 2) [2012] VSC 360.

The proceeding and the issues

In each proceeding, the plaintiffs had, in its writ, opted for trial by judge and a jury of six. Before the jury was empanelled, Dr M Collins SC, who appeared with Mr N Kaskani for the defendant, submitted that the trial should not proceed before a jury. I did not uphold that submission, and I directed that the trial should proceed before a jury.[2]
[2]Belbin & Ors v Lower Murray Urban Rural Water Corporation (Ruling No 1) [2012] VSC 359.

The first questions in the trial concerned the issue of publication of the letter, and the issue of the identification of each plaintiff as a person referred to in the allegations in the letter about which the plaintiffs complained. The plaintiffs, by their pleading, restricted their claim to any publication of the letter in Victoria. Each proceeding was issued on 20 August 2010. Thus, the plaintiffs were confined to a claim arising from the publication of the letter, by the defendant, in the period of twelve months before August 2010 in Victoria.[3]
[3]Defamation Act 2005 (Vic) s 5(1)AAA.

As the claim in the case concerned the publication of the letter on the internet, in order to establish the publication of it by the defendant, it was not sufficient for the plaintiffs to prove that the defendant uploaded the letter onto its website. In Dow Jones & Co Inc v Gutnik,[4] Gleeson CJ, McHugh, Gummow and Hayne JJ held that publication occurs where the material is available in comprehensible form. Thus, in the case of material published on the world wide web, their Honours held that such material would not be published, until it was downloaded onto the computer of a person who has used a web browser to pull the material from the web server. Ordinarily, it appears to have become assumed, in defamation trials arising from publications on the internet, that, to prove publication, the plaintiff must demonstrate that a person, or persons, downloaded the material and read it.[5] In this case, the plaintiffs were not referred to by name in the letter published by the defendant. Accordingly, it was common ground that each plaintiff must prove that at least one person, in Victoria between August 2009 and August 2010, downloaded and read the letter from the defendant’s website, and reasonably understood it to refer to the particular plaintiff.[6]
[4](2002) 210 CLR 575, 607 [44].
[5]Compare David v Abdishou [2012] NSWCA 109, [259].
[6]Steele v Mirror Newspapers Limited [1974] 2 NSWLR 348, 371, 373-4 (Samuels JA); Universal Communication Network Inc t/as New Tang Dynasty v Chinese Media Group (Aust) Pty Ltd & Chan [2008] NSWCA 1, [42]-[43] (McColl JA); Gardner v Nationwide News Pty Ltd [2007] NSWCA 10, [43]-[45] (Bryson JA).

In its defence in each proceeding, the defendant admitted that, during the period of twelve months ending in August 2010, the letter was downloaded and viewed by persons in Victoria. However, the defendant, in each proceeding, did not admit that the letter was published of and concerning the plaintiff, and, by its defence, and at trial, it maintained that the letter concerned the conduct of the Board of FMIT, of which the plaintiff was a former member.

Thus, the first issue, in each proceeding, was whether each plaintiff had established that one or more people in Victoria, in the period between August 2009 and August 2010, downloaded and read the letter, and reasonably understood it to refer to the plaintiff. That issue was addressed in the first question for the jury. Towards the end of the trial, the defendant conceded that the correct answer to that question, in each case should be “Yes”. However, the question was left to the jury, because it provided a textual precursor to the next four questions.

At trial, one issue concerned the extent of the publication of the letter in the relevant time period to persons who read it, and reasonably understood it to refer to a particular plaintiff. That issue was relevant to the defence of qualified privilege. The plaintiffs called a number of witnesses, who stated that they had downloaded the letter during the relevant period. The defendant accepted that one witness, Cosimo Dichiera, in the relevant period in Victoria, had downloaded and read the letter, and reasonably understood it to refer to each plaintiff. It also conceded that another witness, Mary Price (the sister of the plaintiff, Nancy Prevedello), had, in the relevant period, downloaded and read the letter, and reasonably understood it to refer to Mrs Prevedello.

The defendant called an expert witness, Mr Mark Liddle, who had examined the log files of the defendant over the relevant period. Mr Liddle’s evidence, which was not contested, was that the log files only recorded a limited amount of visits to the particular page on the defendant’s website, which contained the Minister’s letter, during the relevant period. Further, the records contained in the log files did not match the evidence of some of the witnesses as to the date on which, or the period in which, they had downloaded and read the letter.

Mr Liddle gave an explanation as to how those witnesses might have downloaded and read the letter when they visited the internet, without accessing it from the defendant’s website. He stated that if a person has, on the internet, visited a page on a website previously, and if that person wishes to visit it again, that person may not, necessarily, access it from the website of the original source; rather, on the previous visit, the user’s computer system may have cached the page. He also explained that a number of internet service providers have large boxes, which are dedicated to storing cached material. In such a case, if a person accesses the internet to download a page from a website, the person may, instead, receive the relevant information from the cached information of the internet service provider.[7]
[7]The plaintiff did not contend that, in either such case, the defendant might be liable for the publication of the letter; cf. Speight v Gosnay (1891) 7 TLR 239.

The issues, relating to the extent of publication of the letter, in the twelve months before August 2010, to persons who read it and reasonably understood it to refer to the plaintiffs, were addressed in questions 3, 3A, 4, 5 and 5A for the jury.

Question 3 asked whether particular persons downloaded and read the letter. In the end, it was common ground that two of the persons referred to in that question – Mary Price and Cosimo Dichiera – did download and read the letter from the defendant’s website in the relevant period in Victoria. In final address, the plaintiffs conceded that five of the other persons, referred to in question 3, did not download and read the letter from the defendant’s website in that period in Victoria. Thus, the jury were required to consider whether the remaining four persons, referred to in question 3, had downloaded and read the letter from the defendant’s website on or after 20 August 2009 in Victoria.

Question 5 asked, in respect to such persons, whether the plaintiff had established that when the person downloaded and read the letter from the defendant’s website on or after 20 August 2009, he or she reasonably understood it to be of and concerning the plaintiff. In the end, taking into account concessions by each side, the contested issues concerned five of the persons who, the plaintiff alleged, had downloaded and read the letter during the relevant period.

Question 3A was expressed in different terms. It referred to a witness, Glenn Miller, who had downloaded and read the letter from the defendant’s website in late 2008. He gave evidence that, in 2010, he again visited the defendant’s website, but on that occasion, he only read the first and last sentences of the letter. Having done so, he satisfied himself that it was the same letter as that which he had downloaded and read on the website in late 2008. Question 3A asked whether the plaintiffs had established that Mr Miller had downloaded the letter from the defendant’s website on or after 20 August 2009 in Victoria, and identified the letter as that which he had previously read. In the end, that question was not in contention; it was agreed that the answer to it should be “Yes”. Question 5A addressed the issue whether the plaintiff had established that, when Mr Miller downloaded the letter from the defendant’s website on or after 20 August 2009 in Victoria, and identified it as that which he had previously read, Mr Miller reasonably understood it to be of and concerning the plaintiff.

Question 4 addressed the question whether, if a particular witness did download and read the letter in the relevant period, that witness did so because he or she was referred to it by one of the plaintiffs, or a representative of the plaintiffs.

The next issue concerned the question of whether the letter, as published by the defendant, was defamatory of the plaintiffs. As I have stated, the defendant disputed that the letter, as published by it on its website, bore the three imputations alleged by the plaintiffs, or any imputations not substantially different from them. The defendant did concede that if the jury were satisfied that the letter bore any of the imputations alleged by the plaintiffs, or any imputations not substantially different from them, the letter would be defamatory of the plaintiffs.

Section 22(3) of the Act requires that if the jury finds that the defendant has published defamatory matter about the plaintiff, and if no defence on behalf of the defendant succeeds, the judge, and not the jury, is to determine the amount of damages to be awarded to the plaintiff. It was common ground that, in each case, I should put questions to the jury asking whether the plaintiff had established that the letter, published by the defendant on its website, would have conveyed to the ordinary reasonable reader any of the imputations, or imputations not substantially different from the imputations, alleged by the plaintiffs.

As I have already observed in a previous decision[8], such a procedure is a significant departure from the long standing practice in Victoria, which developed following the decision of the Full Court in Barclay v Cox[9]. However, unless such questions are asked of the jury, then if the jury did return a verdict in favour of the plaintiff, and if it was necessary for me to assess damages, it would not be possible for me to know, for that purpose, the basis upon which the jury had found, in effect, that the letter was defamatory of the plaintiff. Thus, the second question for the jury, in each case, was whether the plaintiff had established that the matter complained of, in its ordinary and natural meaning, would have conveyed to the ordinary reasonable reader any of the imputations, or imputations not substantially different from the imputations, alleged by the plaintiffs.
[8]Trkulja v Yahoo! Inc LLC & Anor [2012] VSC 88, [8].
[9][1968] VR 664.

It has been long established that, at common law, it is for the judge, and not the jury, to decide whether the matter complained of was published on an occasion of qualified privilege. In such a case, the jury, and not the judge, determines any disputed questions of fact, but the decision, as to whether the matter was published on a privileged occasion, is a question for the judge as a matter of law.[10] Section 22(2) of the Act provides that the jury is to determine whether any defence raised by the defendant has been established. However s 22(5)(b) provides that nothing in s 22 requires or permits a jury to determine any issue that, at general law, is an issue to be determined by the judicial officer. Thus, it was accepted that is for me as the trial judge, and not the jury, to determine whether the defendant has established its defence of qualified privilege, both at common law and pursuant to s 30 of the Act, subject, of course, to the jury to determining any disputed issues of fact in relation to those defences.[11]
[10]Hebditch v MacIlwaine [1894] 2 QB 54; Calwell v Ipec Australia Limited (1975) 135 CLR 321, 329; Herald & Weekly Times Limited v Popovic (2003) 9 VR 1, 11 [12] (Winneke ACJ), 28 [106]-[112] (Gillard AJA).
[11]See also Davis v Nationwide News Pty Ltd [2008] NSWSC 699; (2008) 31 NSWLR 606, 608 (McClellan CJ at CL).

In order to establish a defence of qualified privilege under s 30 of the Act, the defendant must, inter alia, establish that its conduct in publishing the matter was reasonable in the circumstances.[12] It is now well accepted that it is for the judge, and not the jury, to determine whether the conduct of the defendant as the publisher of the material was reasonable, subject, again, to the jury determining any disputed issues of fact in relation to that question.[13] There were a number of disputed facts, which it was necessary for the jury to determine, in order to enable me to decide whether the defendant has made out its defence of qualified privilege, either at common law or pursuant to s 30 of the Act. Those issues were addressed in Questions 8 to 12 for the jury.
[12]Section 30(1)(c).
[13]Morgan v John Fairfax & Sons Limited (1990) 20 NSWLR 511, 517-520 (Samuels AP), 525-526 (Mahoney JA), 538-540 (Hunt AJA); See also Herald & Weekly Times Limited v Popovic (above), 11 [12] (Winneke P); 30 [118] (Gillard AJA).

At the conclusion of the evidence, there was some discussion with counsel as to whether I should decide whether the letter was published by the defendant on an occasion of qualified privilege, before final addresses, and before the jury were asked to consider its verdicts. However, after some discussion, it was accepted by both sides that it would not be appropriate for me to determine, at that stage, the question of whether the letter was published on an occasion of qualified privilege.

That course was adopted for a number of reasons. There were still outstanding questions of fact, which were necessary to be resolved by the jury, to enable me to determine the question of whether the defendant had established the defences on which it relied. The argument, relating to whether the defendant had established the defences, and the preparation and delivery of a ruling in relation to that question, would have taken some time. The trial had already exceeded the time estimate which I had given to the jury panel. I was concerned that there not be any further delay in the trial before final addresses, and my final directions to the jury. Further, I apprehended (with some justification) that the question, whether the letter was published on an occasion of qualified privilege, is not clear cut. The principles, relating to that defence, have been stated by the authorities in general terms. The question, whether the defence applies in a specific case, commonly admits of some debate. Thus, it was common ground that, even if I were to decide against the defendant in relation to the application of the defence of qualified privilege in this case, I should require the jury to deliver a special verdict on the question of whether the plaintiff had established that the defendant had published the letter with malice. In those circumstances, it was common ground, with which I agreed, that I should not determine the question of qualified privilege before the jury decided, by its verdicts, the questions left for its consideration.

The Defamation Act does not contain any provision, similar to s 22(5)(b), reserving the question of the application of the defence under s 28(1) of the Act for decision by the judge. However, it was common ground that, in the circumstances of this case, it would be a question of law for me, as the trial judge, and not for the jury, to determine whether the letter, published by the defendant, was a copy of a document “Issued by … an officer … of the government” for the purposes of s 28(4)(d) of the Act. For that purpose, the jury were asked to determine the question whether the subjective purpose of Mr Holding, in publishing the document, was “for the information of the public”. Questions 6 and 7 were addressed to that issue.

Finally, it is well established that the question, whether the defendant was actuated by malice in publishing the letter, is a question of fact for the jury[14]. In order to prove malice, the plaintiff was required to prove that the dominant motive of the defendant, in publishing the letter, was an improper purpose, which was ulterior to a duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water.[15] The issue, whether the plaintiff had established malice in that sense, was addressed in Question 13 for the jury.
[14]Adam v Ward [1917] AC 309, 318 (Lord Finlay LC); Oldfield v Keogh (1941) 41 SR(NSW) 206.
[15]Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57, [75]-[79] (Gaudron, McHugh and Gummow JJ); Horrocks v Lowe [1975] AC 135, 149 (Lord Diplock).

The jury’s verdicts

The trial before the jury lasted a little over four weeks. The jury, in each of the four cases, delivered its verdicts on 21 August 2012.

By its verdicts in each case, the jury found that the letter, published by the defendant, bore each of the three imputations alleged by the plaintiffs (Question 2). The jury found that the letter had been downloaded and read in Victoria, between August 2009 and August 2010, by four persons, Mr Daniel Lee, Ms Mary Price, Mr Cosimo Dichiera, and Ms Louisa Prevedello. (Question 3). The jury further found that Mr Lee and Mr Dichiera reasonably understood the letter to refer to each of the four plaintiffs. Ms Price and Ms Louisa Prevedello each reasonably understood the letter to refer to the plaintiff Mrs Prevedello (Question 5). The jury were satisfied that Louisa Prevedello downloaded and read the letter, because she had been referred to it by Mrs Prevedello (Question 4(d)). The jury further were satisfied that, when Mr Glenn Miller downloaded the letter from the defendant’s website in July 2010 and identified the letter as that which he had previously read (in late 2008), Mr Miller reasonably understood it to be of and concerning Mr Di Masi and Mr Belbin (Question 5A). The jury was not satisfied that Mr Miller had been referred to the letter (in 2010) by Mr Di Masi. (Question 4(b)).

By its answers to Question 7, the jury found that the defendant had not established that a purpose of Mr Holding (whether a substantial purpose, a principal purpose, or the principal purpose of Mr Holding) was to provide information: to the former customers of FMIT; to the customers of the merged FMIT and the defendant; to an appreciable section of the general community in and around Mildura; or to the general community in and around Mildura. As I shall discuss later, those questions, determined by the jury, might be relevant to the defence raised by the defendant under s 28 of the Defamation Act.

As I have earlier stated, Questions 8 to 12 related to factual issues concerning the defences of qualified privilege. By its verdicts in respect of those questions, the jury found as follows: that the defendant had not established that Mr Leamon believed, at all times after 15 September 2008, that the letter was a legitimate part of the historical record concerning the closure of FMIT and its merger with the defendant (Question 8); the defendant had not established that Mr Leamon believed, at all times after 15 September 2008, that the letter legitimately formed part of the Minister’s explanation for his decision to close FMIT and merge it with the defendant (Question 9); the defendant had not established that it had placed the letter on its website without intending to endorse the allegations made by the Minister (Question 10(a)); the defendant had not established that it placed the letter on its website without, in fact, endorsing on the website the allegations made by the Minister (Question 10(b)); the defendant had not established that it uploaded the letter to its website as part of the ordinary course of its business (Question 11); the defendant had established that Mr Leamon honestly believed that the defendant had a duty to make the letter available on its website at the time the letter was uploaded to the defendant’s website (Question 12(a)), but the defendant had not established that Mr Leamon honestly believed that the defendant had a duty to make the letter available on its website at all times before requesting the staff of the defendant to take it off its website, or at all times before its actual removal from the website (Questions 12(b) and (c)).

Finally, the jury, by its answer to Question 13, found that the plaintiff had established that the dominant motive of the defendant, in publishing the letter, was an improper purpose, which was ulterior to a duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water. Thus, the jury, by special verdict, found that the plaintiff had established that the defendant was actuated by malice in publishing the letter on its website.

It is appropriate that I pay proper tribute to the work performed by the jury in this case. The trial was long. A number of witnesses were called. A substantial amount of detailed evidence was given concerning the circumstances leading to the closure of FMIT. A large number of exhibits were tendered. For that purpose, the jury had two folders of copy exhibits. The exhibits were regularly referred to in evidence. At all times the jury were most conscientious in paying attention to the evidence, and in referring to the exhibits which were under discussion. The verdicts of the jury reflected the close and careful attention which the jury had consistently paid, throughout the case, to the evidence, to counsel’s addresses, and to my directions. Indeed, such was the close attention paid by the jury to my final directions that, at one stage, during those directions, a juror drew to my attention an error which I had made in summarising the evidence of one of the witnesses. The performance by the jury in this case fully vindicates the faith which the courts have long held in trial by jury as the most fair and appropriate method of determining such cases.

The effect of the jury’s verdicts: issues remaining for decision

As a result of those verdicts, the plaintiffs have succeeded in establishing that the defendant published, in Victoria in the period August 2009 to August 2010, matter which was defamatory of each of them. As a consequence of the jury’s answer to Question 13, any defence, which the defendant would otherwise seek to rely on by way of qualified privilege at common law, would not succeed.

Accordingly, the following four issues remain for determination by me, namely:

(1)Whether the plaintiff has established that the defendant published the letter to Glenn Miller in the period August 2009 to August 2010.
(2)The defence of publication of a fair copy of a public document under s 28 of the Defamation Act.
(3)The statutory defence of qualified privilege under s 30 of the Act.
(4)Subject to my determination of the defences, the issue of damages.

When the hearing resumed, for submissions on those four issues, Mr Gilbertson applied, in each case, for leave to amend the plaintiffs’ replies to plead malice in response to the statutory defence of qualified privilege. That application was opposed by the defendant. I refused leave to the plaintiffs to amend their replies, on the basis that such an amendment would occasion irreparable prejudice to the defendant.[16]
[16]Belbin & Ors v Lower Murray Urban and Rural Water Corporation (Ruling No 3) [2012] VSC 473.

Whether the defendant published the letter to Glen Miller

The first question, then, is whether the plaintiffs, in each case, have established that the defendant published the letter to Glen Miller in the period August 2009 to August 2010. That question is relevant to the issue of qualified privilege, and also to the issue of damages.

In his evidence, Mr Miller stated that in late 2008 he saw the letter on the internet, and read a hard copy of it. He said that he understood the reference, in the letter, to the FMIT board members to be a reference to Mr Di Masi and to Mr Belbin. Mr Miller stated that in 2010 he saw the letter again on the internet. However, he did not read it. The relevant passage of his evidence is as follows:

“When you saw that (the letter) on the internet in 2010 did you read it? … No I certainly didn’t. I simply wanted to confirm that it was still the same one that I had read a couple of years before.
Were you confirmed in your mind that it was the same letter? … Yes.
How did you do that? … I read the first line and the last line, the signature at the bottom of Minister Holding.
You didn’t read any other parts of the letter? … Not at that point. It seemed to me to be the letter that I had actually read some time before.”

The jury was asked two questions in relation to this issue. Question 3A asked whether the plaintiff had established that Glen Miller downloaded the letter from the defendant’s website on or after 20 August 2009 in Victoria, and identified the letter as that which he previously read. The jury gave an affirmative answer to that question. Question 5A asked whether the plaintiff had established that when Mr Miller so downloaded the letter from the defendant’s website on or after 20 August 2009, and identified it as that which he had previously read, Mr Miller reasonably understood it to be of and concerning the plaintiffs. The jury gave an affirmative answer to that question in the case of Mr Belbin and Mr Di Masi, and a negative answer in the cases of Mrs Prevedello and Mr Marciano.

The principles relating to what is necessary, to constitute publication for the purposes of defamation, are not in dispute. In essence, it is well established that, for publication to occur, the material must be communicated to a third person, who must comprehend it. In Webb v Bloch[17], Isaacs J stated:

“To publish a libel is to convey by some means to the mind of another the defamatory sense embodied in the vehicle … .”

[17](1928) 41 CLR 331, 363.

In Gutnick v Dow Jones & Company Inc[18], Hedigan J was concerned with the question as to the location which matter, uploaded onto the internet, was published. His Honour stated:

“I have concluded that the law in defamation cases has been for centuries that publication takes place when and where the contents of the publication, oral or spoken, are seen and heard, (ie made manifest to) and comprehended by the reader or hearer. … I therefore conclude that delivery without comprehension is insufficient and has not been the law.”[19]

[18][2001] VSC 305.

[19]Ibid, [60].

That analysis of “publication” was accepted as correct, on appeal, by the High Court in Dow Jones & Company Inc v Gutnick[20], Gleeson CJ, McHugh, Gummow and Hayne JJ, in their joint judgment stated:

“[25]The tort of defamation, at least as understood in Australia, focuses upon publications causing damage to reputation. …
[26]Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer. Until then, no harm is done by it. This being so it would be wrong to treat publication as if it were a unilateral act on the part of the publisher alone. It is not. It is a bilateral act – in which the publisher makes it available and a third party has it available for his or her comprehension.”[21]

[20](2002) 210 CLR 575, 600.

[21]See also David v Abdishou [2012] NSWCA 109, [259]-[260] (McColl JA).

Dr Collins submitted that the plaintiffs have not proven that the defendant published the letter to Mr Miller. In particular, he submitted that there was no evidence that when Mr Miller saw the letter on the internet in 2010, he recollected the contents of the letter which he had previously read in 2008, or that he recollected the particular allegations conveyed in the letter. Dr Collins submitted that the facts, found by the jury in answer to question 3A and question 5A, are not sufficient to prove the relevant comprehension by Mr Miller of the content of the letter in 2010.

In response, Mr Gilbertson submitted that, in order to prove that the letter was published by the defendant to Mr Miller in 2010, it is not necessary that when Mr Miller saw the letter on the internet, he recalled what he had read earlier in 2008. Mr Gilbertson submitted that it was sufficient that Mr Miller recognised, in 2010, the letter which he had read in 2008.

Mr Gilbertson conceded that it could not be inferred from Mr Miller’s evidence, or from the jury’s answer to Question 5A, that, when he saw the letter on the internet in 2010, he recollected the contents of it.

In my view, that concession is fatal to the proof by the plaintiffs of the publication of the letter to Mr Miller in 2010. As Isaacs J stated in Webb v Bloch[22], the essence, of the tort of defamation, is the communication of the defamatory imputations by the defendant to the plaintiff. In order that there be such a communication, it is necessary that the defamatory imputations be brought to the mind of the relevant recipient, in this case Mr Miller. If, for example, having seen the letter on the internet in 2010, he was able to recall sufficiently the contents of it to be reminded of the defamatory imputations contained in it about the plaintiffs, that may have been sufficient publication in 2010 by the defendant to Mr Miller. However, as conceded by Mr Gilbertson, the evidence of Mr Miller did not amount to that. Accordingly, I am not satisfied, on the evidence, and on the findings by the jury, that the plaintiffs have proven that the defendant, in 2010, published the letter to Mr Miller.

The defence under s 28 of the Defamation Act 2005

[22](1928) 41 CLR 331.

The first defence relied on by the defendant, in each action, is a defence under s 28 of the Defamation Act, that the letter was contained in a “public document”. The defendant contended that Mr Holding’s letter was a “public document” pursuant to s 28(4)(d), because it was a document issued by an officer of the government (Mr Holding) for the information of the public.

The relevant provisions of s 28 are as follows:

“(1)It is a defence to the publication of defamatory matter if the defendant proves that the matter was contained in –
(a)a public document or a fair copy of a public document …

(4) In this section –
‘public document’ means –
…
(d)any document issued by the government (including a local governance) of a country, or by an officer, employee or agency of the government, for the information of the public.”

To succeed on this defence, the defendant must prove that the letter, which it published, was a document issued by Mr Holding for the information of the public. The competing submissions in relation to the defence raised three principal issues, namely:

(i)Whether the letter was “issued” by Mr Holding.
(ii)Whether the phrase “for the information of” is construed by reference to the objective, or the subjective, purpose or intention of Mr Holding.
(iii)The meaning of the phrase “the public”.

Section 28 defence: submissions

Dr Collins submitted that the letter was “issued” by Mr Holding. He referred to the 21^st, 23^rd and 24^th meanings of the verb “issue” in the Macquarie Dictionary, namely: “to print (a publication) for sale or distribution … to send out; discharge emit; to be sent or put forth authoritatively or publicly as a writ, money etc”. Dr Collins noted that Mr Holding’s letter was written on Ministerial letterhead, and that it was signed by Mr Holding as a Minister of the Crown. It was addressed to a particular group of persons (the customers of the FMIT) affected by the decision to merge FMIT with Lower Murray Water. Mr Holding directed that the letter be sent to Lower Murray Water for the purpose of communicating it to that group of people. Accordingly, he submitted, the letter was “issued” by Mr Holding.

Dr Collins submitted that the question, whether the document was issued by Mr Holding “for the information of the public”, should be determined by reference to the objective purpose of Mr Holding’s letter, and not by reference to his subjective purpose or intention. He submitted that the purpose of s 28 is to protect innocent re-publishers of documents issued by a government, or by an officer, employee or agency of the government. If the republisher is required, in each case, to prove the subjective intention of the officer, employee or agency of the government in issuing the document, any media outlet, republishing a governmental document, would be left at the whim of the unknown subjective intention of the original author of it. Dr Collins submitted that such a construction would subvert the clear intention of s 28(4)(d).

Dr Collins further submitted that s 28(4)(d) is to be contrasted with s 28(3), which provides that a defence, established under subsection (1), is defeated if the plaintiff proves that the defamatory matter was not published honestly for the information of the public or the advancement of education. In that way, Dr Collins submitted, subsection (3) makes the subjective intention of the republisher (and not the original author) relevant. He submitted that it would be anomalous if, under s 28(4)(d), the republisher is required to prove the subjective intention or purpose of the original author of the public document, whereas subsection (3) casts the onus on the plaintiff to prove the intention of the re-publisher.

Dr Collins submitted that that anomaly would be even more pronounced in a case against the original author of the particular document. In such a case, if s 28(4)(d) is interpreted by reference to the subjective intention of the author, s 28(3) would be redundant. Dr Collins submitted that, in that way, there would be an inconsistency between s 28(3) and s 28(4)(d), if the subjective intention or purpose of the original author is relevant to the determination whether, for the purposes of s 28(4)(d), the document was issued “for the information of the public”.

Dr Collins further submitted that the letter was issued by Mr Holding for the information of “the public” under s 28(4)(d) of the Act. He submitted that the phrase “the public”, for the purposes of s 28(4)(d), means an appreciable section of the general community, to be contrasted with an individual or single entity, a group of individuals in the capacity as individuals, or an internal group of which the author of the document is a part. In other words, he submitted that the phrase “the public” means a group of people in the community, as distinct from a number of people as individuals, being a group of people external to the group of which the author was a part.

Dr Collins submitted that if the phrase “the public” is not construed to mean a particular group or section of the community, the phrase would be devoid of any meaning. In particular, he submitted that it is not necessary to publish matter to the whole of the Victorian (or Australian) population, to constitute a publication to “the public”. In support of that construction, he relied on the first, ninth and sixteenth meanings of “the public” in the Macquarie Dictionary namely: “Of, relating to, or affecting the people as a whole or the community, state or nation …; a particular section of the people: the novel reading public; … (‘the public interest’) the benefit or advantage to a whole community, as opposed to the individual … “. Dr Collins also referred to a number of authorities which interpret “public” in other statutory contexts.[23]
[23]Bigar Nominees Pty Ltd v Commissioner of Taxation (Commonwealth) (1991) 104 FLR 74, 93-94; Lee v Evans (1964) 112 CLR 276, 293-4; Rank Film Production Pty Ltd v Dodds [1993] 2 NSWLR 553, 558-9.

Dr Collins submitted that the letter was issued by Mr Holding for the information of the public. He submitted that it was sufficient that the defendant demonstrate that, objectively, a substantial purpose of the letter was to inform the former customers of FMIT of Mr Holding’s reasons for closing the FMIT; it was not necessary that the defendant demonstrate that the sole, or dominant, purpose of the letter was to provide that information to the public. Dr Collins further submitted that the former customers of FMIT are an appreciable section of the community, to be contrasted with an individual or single entity, and thus constitute “the public” for the purposes of s 28(4)(b).

In response, Mr Gilbertson submitted that the defendant had failed to establish a defence under s 28(4)(d) of the Act for three reasons. First, he submitted that Mr Holding did not “issue” the letter. Mr Gilbertson noted that s 28(4) distinguished between documents which are “issued”, documents which are “kept”, and documents which are “published”. He submitted that the word “issued” must be construed by reference to the requirement that the document be issued by the government, or by an officer, employee or agency of the government. Thus, he submitted that not every document, written by an officer, employee or agency of the government, is “issued” for the purposes of s 28(4)(d). In particular, he submitted that, in order that the document be issued, it must serve an official purpose, or be official in its character.

Mr Gilbertson supported that construction by reference to the decision of the Full Court of New South Wales in Campbell v Associated Newspapers Ltd[24], which was concerned with s 29(1)(g) of the Defamation Act 1912 (NSW).[25] He submitted that the official reasons, given by Mr Holding for deciding to merge FMIT with the defendant, were contained in the letters, which he wrote to the Clerk of the Legislative Council and to the Clerk of the Legislative Assembly dated 18 August 2008, and which were laid before both Houses of Parliament. By contrast, Mr Holding’s letter was distributed, at the request of Mr Holding, to the former customers of the FMIT.
[24](1948) 48 SR(NSW) 301, 303.
[25]See also Blackshaw v Lord [1983] 1 QB 1, 23-24, 38.

Mr Gilbertson next submitted that the subjective purpose of the author of the document is relevant to determining whether, for the purposes of s 28(4)(d), the document was issued “for the information of the public”. He submitted that the distinction, sought to be drawn by Dr Collins, between the subjective purpose and the objective purpose of the author, is unhelpful. In particular, the determination of the objective purpose of the author would, in any case, involve an element of uncertainty. Further, he submitted that the construction, for which the plaintiffs contended of s 28(4)(d), would not create any inconsistency between that provision and subsection (3), or any anomaly of the kind contended for by Dr Collins. Mr Gilbertson submitted that subsection (4)(d) is concerned with the subjective purpose of the author of the document. By contrast, he submitted, subsection (3) is concerned with the honesty of the publisher of the document. In particular, he submitted that an author of a document may have a purpose to inform the public, for the purpose of s 28(4)(d), but that purpose may be proven to be dishonest under s 28(3). In support of that proposition, Mr Gilbertson relied on the decision of Hunt J in Waterhouse v Broadcasting Station 2GB Pty Ltd[26], which concerned the construction of s 26 of the Defamation Act 1974 (NSW).
[26][1985] 1 NSWLR 58, 63-64.

Mr Gilbertson further submitted that the construction, contended for by Dr Collins, would itself produce an anomaly. In particular, if the letter, objectively considered, was for the purpose of providing information to the public, but Mr Holding wrote it for an ulterior motive, the plaintiffs would have no recourse against the defendant for re-publishing it. Mr Gilbertson submitted that a defence under s 28 is essentially a derivative defence, in which the re-publisher could be in no better position than the original author of the document.

Finally, Mr Gilbertson submitted that, in any event, Mr Holding did not issue the letter for the information of “the public”. Mr Gilbertson accepted that, for the purposes of s 28(4)(d), the “public” might consist of an appreciable section of the general public. However, he submitted that, in order to constitute “the public”, that section of the public could not constitute a closed class, of which the identity of all the members could be ascertained. If the persons, to whom the document was published, belong to a closed class, the members of that class would not be defined by being members of the public; but, rather, they would be defined by reference to the specific criterion which set them apart from the public and made them part of that class.

In support of that construction, Mr Gilbertson referred to a passage from the judgment of Windeyer J in Lee v Evans[27], in the context of whether an invitation, to a member of the public, could constitute an invitation to the public, and thus be a prospectus. There, Windeyer J stated:

“The essence of an invitation to the public is not in the manner of its communication or in the number of the persons to whom it is communicated. The criteria are rather, are the recipients of the invitation persons chosen at random, members that is of the general public, the public at large, all and sundry: or are they a select group to whom and to whom alone the invitation is addressed, so that if an outsider sought to respond to it he would be told that he was not one of those invited to come in.”

[27](1964) 112 CLR 276, 292.

Mr Gilbertson submitted that the letter, distributed by Mr Holding, was sent to a closed class of persons, namely, the persons who were the customers of FMIT at the time of its closure on 15 August 2008. Mr Gilbertson submitted that a letter, sent to persons constituting that class of individuals, could not be characterised as a letter distributed to “the public”.

Section 28 defence: conclusions

The first question, concerning the defence raised under s 28 of the Defamation Act, concerns the meaning of the word “issued” in the definition of “public document” in s 28(4)(d). In particular, the question is whether the letter written by Mr Holding was “issued” by the government (or by an officer, employee or agency of the government).

The various definitions of “public document” in s 28(4) differentiate between a document which is “published” (subparagraph (a)), a document which is “issued” (subparagraph (d)), and a document which is “kept” (subparagraph (e)). Unsurprisingly, the Defamation Act, and s 28, use the verb “publish” in the sense in which it is understood in defamation law, as connoting the communication of defamatory material, about a person, by a defendant to another person.

Section 28(4)(e) contemplates circumstances in which a record or any other document is “kept” by an Australian jurisdiction, a statutory authority, a court, or under legislation of an Australian jurisdiction, and which becomes published. Similarly s 28(4)(d) contemplates documents, which may be “issued” by a government (or an officer, employee or agency of the government), and which are published.

Clearly, a document may be kept without being published; conversely, a document may be published without being kept. Similarly, the verb “issue” and the verb “publish” are not synonymous. Not every document published by a government, or by an officer, employee or agency of the government, would, per se, be issued by the government (or by the officer, employee or agency of the government). Conversely, while a document issued by the government may thereby be published by the government, it does not follow that each document, issued by a government (or an officer, employee or agency of the government), is thereby “published” as that word is understood in defamation law.

It is important, in construing “issued”, to bear in mind the context in which that word is found. In particular, it is significant that s 28(4)(d) only applies to a document which has been issued by a government (or by an officer, employee or agency of the government), and to a document which has been so issued for the information of the public. Ordinarily, when a government, or an agency, issues a document, it is for the purposes of giving or pronouncing a mandatory direction, or for disseminating a particular warning. Thus, in the context of the operations of governments and agencies of government, a health department might issue a relevant warning; likewise the Bureau of Meteorology might issue a storm warning. Similarly, as I stated, a document issued may contain a mandatory direction or command. Thus, a writ of summons may be issued; directions, edicts and proclamations may, equally, be issued.

The factor, which is common to each of those usages of “issued”, in the context of a governmental document, is to be found in the official nature of the document, and in the manner in which the document itself is made public. That construction is reinforced by reference to the other defined meanings of “public document” in s 28(4). Each of the documents, referred to in the other subparagraphs of the definition, are formal, official documents. Thus, subparagraph (a) relates to reports or papers published by a Parliamentary body, or records of the proceeding of a Parliamentary body; subparagraph (b) relates to judgments, orders or other determinations of courts and tribunals; subparagraph (c) relates to reports or other documents authorised to be published, or required to be presented or placed, before a Parliamentary body by the law of any country; subparagraph (e) refers to records or other documents open for inspection by the public, which are kept by an Australian jurisdiction, an Australian statutory authority, an Australian court, or under legislation of an Australian jurisdiction.

That construction of “issued”, in s 28(4)(d), gains some support from the judgment of Jordan CJ in Campbell v Associated Newspapers Limited[28]. That case concerned the construction of s 29(1)(g) of the Defamation Act 1912 (NSW), which provided a defence for the publication, in good faith, of “… any notice or report issued for the information of the public … “. In construing that phrase, Jordan CJ stated:[29]

“The notice or report must be of genuinely official nature, and must be issued in such circumstances that it may fairly be regarded as issued for the information of the public. It is not, of course, for this Court to assume to lay down rules for what is, and what is not, proper to be made the subject of a governmental or police notice or report. I see no reason for doubting that an authoritative announcement of an official character made or handed to members of the press for publication in their respective newspapers would, or at least could, constitute a notice or report issued for the information of the public … .”[30]

[28](1948) 48 SR(NSW) 301.

[29]Page 303.

[30]See also Blackshaw v Lord [1984] 1 QB 1, 24 (Stephenson LJ), 38 (Dunn LJ).

In this case, the letter was written by Mr Holding, as the Minister for Water, to the former customers of the First Mildura Irrigation Trust, as an explanation for the action which he had already undertaken in closing down the Trust, and merging it with the defendant. In the fourth paragraph of the letter, Mr Holding stated that he wished to counter what he described as “highly emotive and selective accounts” of recent events, and explain the reasons for his decision. It would, in my view, be contrary to the ordinary meaning of the word “issued”, and to the meaning of that word in its statutory context, to characterise the dissemination by Mr Holding of that letter as the “issue” by him of it. The letter did not contain the relevant official character or quality, which is common to the other documents defined in s 28(4). Nor did it belong to the type of documents which are, ordinarily, understood to be described as being “issued” by a government, or by an officer, employee or agency of the government. Rather, as I have observed, the letter constituted the explanation by Mr Holding of the decision, which he had made to close the First Mildura Irrigation Trust, of which the persons, to whom the letter was sent, were customers at the time of its closure. For those reasons, I do not consider that the letter by Mr Holding was “issued” by him for the purposes of s 28(4)(d) of the Act.

That conclusion is sufficient to dispose of the defence, in each action, based on s 28 of the Act. However, in deference to the submissions by counsel, I shall consider the other two issues raised concerning the correct construction to s 28(4)(d) of the Act.

The second issue, concerning s 28(4)(d), related to the construction of the phrase “for the information of”. As I have noted, Dr Collins submitted that the question, whether the document was issued “for the information of” the public, is to be determined objectively, without regard to the subjective intentions of the author, or of the agency, which issued the document.

As a matter of plain construction, the phrase “for the information of the public” qualifies the passive verb “issued”. In that way, it describes the purpose served by the issue of the document by the government (or by an officer, employee or agency of the government). In other words, the phrase is not descriptive of the document itself, but, rather, it prescribes the purpose or reason for the issue of the document.

An inquiry, as to whether the document was issued “for the information of the public”, must, necessarily, involve some determination of the purpose of the issue of the document. Even if, as Dr Collins has submitted, the purpose of the issue of the document is to be ascertained by reference to the document and the background circumstances, the court would, by that process, be drawing an inference, from those factors, as to the purpose of the particular agency or person, who issued the document.

There is nothing in s 28(4)(d) which restricts such an inquiry to an examination of the document alone. Indeed, Dr Collins recognised the artificiality of such a narrow proposition. He submitted that the question, whether the document was issued for the information of the public, could be determined, not only by reference to the document, but also by reference to the effect, which the document had on the minds of persons to whom the document was published. In that respect, Dr Collins referred to and relied on the evidence of a number of witnesses, who regarded the letter as Mr Holding’s attempt to provide an explanation for his decision to close the FMIT. Dr Collins also accepted that the question, whether the document was issued for the information of the public, is to be determined by reference to the background circumstances in which the document was issued.

Further, the defences pleaded by the defendant in each of those proceedings were public documents. By those defences, the defendant was placing, on the record, that it stood by and maintained the truth of the allegations, made by it, of which the plaintiffs complain. In that way, the defendant persisted in, and continued to assert, the imputations, which defamed the plaintiffs. By that conduct, the defendant also aggravated the damage to the reputations of each plaintiff.

In that context, the failure of the defendant to apologise for the defamatory imputations published by it about each of the four plaintiffs constitutes a further aggravating factor. By that stage, the defendant had not only published the defamatory allegations about each of the plaintiffs (including Mrs Prevedello), but it had also, by three successive defences, maintained that the imputations, pleaded by the plaintiffs, were substantially true. That plea was removed, by its deletion in the third amended defence (pleaded 16 November 2011), without any explanation, or without the defendant, in any way, retracting the allegation. Having defamed the plaintiffs, and having in three successive defences claimed that the defamatory imputations were true, the defendant, by failing to retract the allegations and apologise for them, aggravated the damage to the plaintiffs.

The third, and allied, aggravating factor, arises out of the conduct of the defence of the defendant at the trial of each of the four proceedings. Notwithstanding that the defendant had made the decision to omit, from its defence in each proceeding, the plea of justification, senior counsel for the defendant, at a very early stage of the trial, made it plain that the defendant sought to prove the truth of the allegations contained in the letter about which the plaintiffs complain.

In opening the plaintiffs’ case to the jury, Mr Gilbertson had summarised the circumstances in which the money, borrowed from TCV, had been placed with Grange Securities for investment. In particular, he pointed out that the Board of FMIT did not resolve to invest the money with Grange Securities. He also noted that the defendant did not rely on a defence of truth. He outlined the defences relied on by the defendant, including the defence of qualified privilege. He contended that the plaintiffs would establish that the conduct of the defendant, in publishing the letter on the internet, was unreasonable, because the defendant knew, or ought to have known, that a number of matters in the letter were not true. He then outlined those matters, including the allegation that FMIT had invested $2.2 million of Victorian Government money without Treasury approval in the United States sub-prime mortgage market.

In cross-examination of the first witness, Mr Lee, Dr Collins commenced to ask questions concerning allegations, which had appeared in the local newspaper in 2008 concerning the investment with Grange Securities. Mr Gilbertson objected. Dr Collins stated that the cross-examination was relevant to the defence of qualified privilege. However, and in front of the jury, he sought to foreshadow that the cross-examination was relevant to the issue of the truth, or falsity, of the imputations which were pleaded. He submitted that he was entitled to do so because, in opening the case, Mr Gilbertson had put the truth or falsity of the imputations in issue. In making that submission, Dr Collins stated:

“Having done that, I am entitled … to cross-examine as to the truth or falsity of the imputations pleaded by the plaintiff. My friend has put them in issue and I am entitled to answer them and the line of questioning, although primarily directed to the media coverage, will also go in due course to the substantive allegation about the truth or falsity of the imputations.”

That, then, was the basis upon which Dr Collins embarked on detailed cross-examination of Messrs Belbin, Di Masi and Marciano, which was directed to establishing that the investments were in breach of the BIP Act, that those three plaintiffs had failed to comply with their duties as directors in supervising the investments, and that, in doing so, they had breached their legal obligations to FMIT.

As I have already stated, the matters, adduced by Dr Collins in cross-examination, do not provide a justification, either wholly or partially, to the three imputations relied upon by the plaintiffs, and, in particular, to the first two imputations.

In addition, Dr Collins specifically raised the question of the truth of the allegations, in opening the defendant’s case to the jury. He pointed out that “the plaintiffs” did not dispute that FMIT broke the law by investing $2.2 million of taxpayer money in the United States sub-prime mortgage market. He contended that therefore the investments were illegal. He said “there is no doubt about that and all of the plaintiffs admitted to you in the course of their evidence that as directors of the Board of FMIT they owed legal obligations … to act in the best interests of the Trust and to act in a financially responsible way”. He then stated: “… there cannot be any doubt that the Board in 2007 breached those obligations and that in doing so the Board members at that time did break the law”.

To support those propositions, Dr Collins quoted, from the transcript, passages of the cross-examination by him of Mr Marciano and Mr Di Masi. Having done so, he reiterated the proposition that the Board members in 2007 “broke the law; they breached their legal obligations to act in the best interests of the Trust in a financially responsible manner”.

Pausing there, counsel’s submissions, at that point, went well beyond what was appropriate for an opening to a jury. First, it is not the function of an opening to argue the case, although, no doubt as an aspect of good advocacy, counsel is entitled to some latitude in that respect. However, secondly, and more importantly, the truthfulness, or otherwise, of the imputations was not a matter for the jury; Dr Collins, at the outset, had sought to justify his cross-examination, in relation to that aspect of the case, as being relevant only to the issue of damages. That issue was not an issue which was to be determined by the jury, and it was irrelevant to the opening.

There were two other features of the opening by senior counsel for the defendant, which, in my view, added to the aggravating nature of the conduct of the defendant in the case. First, he stated that, in the course of his evidence, Mr Belbin “sought to blame” the Finance Manager and Managing Director of FMIT for making the “illegal investments”. He noted that the plaintiffs did not call either of them, to give evidence, and that “they have not been given the chance to defend themselves”. Dr Collins then alleged “… they were used, we suggest to you, as an attempt to deflect attention away from the Board’s failure to oversee the finances and operations of the Trust in a proper and financially responsible manner”.

As I have already stated, the evidence of Messrs Belbin, Di Masi and Marciano was not disputed, in cross-examination, that the Board had had nothing to do with the placement of the funds with Grange Securities, but, rather, that those investments had been made by the management of FMIT. The contention, that that evidence was in some way an attempt to make scapegoats of the two officers of FMIT, and to deflect attention from the Board, was unjustified and it was inappropriate.

In addition, in opening the defendant’s case to the jury, senior counsel raised the question why the plaintiffs had brought a case against the defendant, and not against the Minister. On three occasions, he alleged that the proceedings, brought by each of the plaintiffs, was “an attempt to shoot the messenger”. That contention was without foundation. It fell outside the permissible bounds of what might be put in opening. More importantly, the submission was irrelevant to any issues, which the jury would be required to determine in the case.

It is clear that from the outset of the case, up to and including the conduct of the trial, the defendant was intent on mounting a vigorous defence of the proceedings, which was its right. However, as the foregoing discussion reveals, in doing so, the defendant pleaded defences of truth, which could not be sustained on the evidence; it pursued the allegation of truth at trial, when the matters raised by it did not meet the imputations, pleaded by the plaintiffs; it wrongly, before the jury, accused the plaintiffs of making the senior staff of FMIT scapegoats in order to deflect attention from their own shortcomings; and it accused the plaintiffs of having an ulterior motive for bringing the proceedings.

One further example, of such conduct by the defendant of its case, is to be found in the first five defences pleaded by the defendant. In the first defence, and in each of the four successive amended defences filed after it, in each proceeding, the defendant maintained that it had removed the Minister’s letter from the website in late 2009. That plea was important, given that right up to trial, and including at trial, the issue of publication was very much in dispute in each proceeding. In fact, the defendant had kept a log of each visit to the page on its website, on which it had published the Minister’s letter. That log demonstrated a number of visits to the page in 2010. Further, and more significantly, Mr Leamon, in his evidence, stated that, after he received a facsimile from Mr Di Masi’s solicitors dated 29 July 2010, he instructed the staff of FMIT to remove the letter from the website (although, as it turned out, the letter was not removed from the website for another twelve months).

In those circumstances, Mr Leamon, and thus the defendant, knew that the letter remained on its website at least until late July 2010. It is inexplicable that, in light of that fact, the first four defences, pleaded by the defendant, should have maintained that it had been removed in 2009. That plea remained on the third amended defence (dated 16 November 2011) up to the start of the trial. It only was removed from the defence by the fourth amended defence, which, pursuant to leave given by me, was filed and delivered on 30 July, the fifth day of the trial.

Finally, I consider that the malice of the defendant in publishing the letter, as found by the jury, also constitutes a further aggravating factor. By its answer to Question 13, the jury found that the dominant motive of the defendant, in publishing the letter on its website, was an improper purpose, which was ulterior to any duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water. It is true, as Dr Collins has observed, that the jury were not asked to specify any particular ulterior motive which actuated the defendant in publishing the material. However, that point does not disturb the finding by the jury, namely, that the dominant motive of the defendant, in publishing the material, was improper, and it was ulterior to any sense by the defendant of a duty to publish the reasons of Mr Holding for deciding to merge FMIT and the defendant. In the background context of the publication of the letter by the defendant – and in particular, the role of the defendant in taking over the whole of the assets and undertaking of FMIT – the fact (as found by the jury) that the dominant motive of the defendant, in publishing the letter, was an improper and ulterior motive, was, of itself, an aggravated factor.

Indeed, it is relevant that, by its answer to question 9, the jury determined that the defendant had not established that Mr Leamon believed, at all relevant times, that the letter legitimately formed part of Mr Holding’s explanation for his decision to close FMIT and to merge it with Lower Murray Water. In addition, in answer to question 8, the jury found that the defendant had not established that Mr Leamon believed that the letter was a legitimate part of the historical record concerning the closure of FMIT and its merger with the defendant. Those facts (as found by the jury) reinforce the finding, of an ulterior and improper motive, as an aggravating factor.

Damages: vindication of plaintiffs’ reputations

The third aspect, of an award of damages for defamation, consists of the role such an award plays in vindicating the reputation of the plaintiff. That aspect was referred to in the passage from the judgment of the plurality in Carson v John Fairfax & Sons Ltd[114], to which I have earlier referred.[115] Immediately after that passage, their Honours stated:[116]

“Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant’s reputation. ‘The gravity of the libel, the social standing of the parties and the availability of alternative remedies’ are all relevant to assessing the quantum of damages necessary to vindicate the appellant.”[117]

[114](1993) 178 CLR 60.

[115]See para [211] above.

[116]Ibid, 61.

[117]Citation omitted.

The role of an award of damages, in vindicating the reputation of a plaintiff, was described by Lord Hailsham in Broome v Cassell & Co Ltd[118], in terms which have been applied in a number of subsequent decisions. His Lordship stated:

“In actions of defamation and in any other actions where damages for loss of reputation are involved, the principle of restitutio in integrum has necessarily an even more highly objective element. Such actions involve a money award which may put the plaintiff in a purely financial sense in a much stronger position than he was before the wrong. Not merely can he recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge.”

[118][1972] AC 1027, 1071.

In Angel v Stainton[119], the plaintiff, an 81-year-old defence equipment supplier, claimed damages in respect of a defamatory letter, published to five influential recipients, which erroneously suggested that he had received a custodial sentence, some years ago, for illegal arms dealing. In awarding damages, Eady J stated:[120]

“In the circumstances of this case, it seems to me that the most important factor in arriving at an assessment of the appropriate compensation is that of the impact on Mr Angel’s feelings and the distress caused. I have no doubt at all that this was significant. … As to vindication, this is less important in a situation where there has been only limited publication and no evidence of any actual diminution in the claimant’s reputation. Nevertheless, if I were to award only a modest sum of compensation in respect of an allegation of criminality, there would remain a real possibility that some people, coming to learn of the award, might think that there was no smoke without fire.”[121]

[119][2006] EWHC 637 (QB).

[120]Ibid, [27].

[121]See also “KC” v MGN Ltd [2012] EWHC 483, [37]; Cooper v Turrell [2011] EWHC 3269, [98] (Tugendhat J); Sent & Prime Life Corporation Ltd v John Fairfax Publications Pty Ltd & Hills [2002] VSC 429, [77] (Nettle J); French v The Herald & Weekly Times Pty Ltd (No 2) [2010] VSC 155, [87] (Beach J); Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739, [112] (McClellan J).

The corollary of the principle, that an award of damages has an important role in vindicating the reputation of the plaintiff, once and for all, is that, ordinarily, damages are awarded to a plaintiff on the basis that they will be sufficient to ensure that he or she will not suffer any future loss of reputation by reason of the publication of the defamatory material.[122]
[122]John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131, 143 (McHugh JA); Carson v John Fairfax & Sons Pty Ltd (1993) 178 CLR 44, 77 (Brennan J).

The authorities, to which I have referred, make it clear that an award of damages is not only designed to vindicate the reputation in the eyes of the persons to whom the defamatory material was directly published; rather, an award of damages must also be sufficient to vindicate the plaintiff in the eyes of those to whom, by the process referred to as the “grapevine” effect, the defamatory imputations have been disseminated, as a result of the defamatory publication for which the defendant is liable.[123]
[123]See also Crampton v Nugawela (1996) 41 NSWLR 176, 194-6; Prendergast v Roberts [2012] QSC 144, [31].

In this case, it has been properly conceded by the defendant that the three defamatory imputations, found by the jury, were serious. In those circumstances, I consider that the principle of vindication does have a role to play in determining the damages to be awarded to each of the plaintiffs. That principle does, to some extent, have greater importance, because the defendant pleaded justification in its first three defences, and, secondly, sought to prove the truth of the imputations at the trial of the proceeding.

Conclusions on damages

In conclusion, then, the allegations, constituted by the three defamatory imputations, published by the defendant in relation to each of the four plaintiffs, were serious. At the time at which the defendant published its letter, in 2010, the plaintiffs each still had good reputations for responsibility, integrity and public service. Although, in the case of Messrs Belbin, Di Masi and Marciano, the letter was only published directly to two recipients, and, in the case of Mrs Prevedello, to four recipients, I am satisfied that, by the “grapevine”, or “poison spreading”, effect, the defamatory imputations contained in the letter, published by the defendant, became more widely disseminated within the Mildura and surrounding communities.

In that way, I am satisfied that the reputations of each of the four plaintiffs have suffered quite substantial damage as a consequence of the publication by the defendant of the letter. In reaching that conclusion, I take into account the fact that the reputations of each of them had suffered a significant blow, arising, first, from the closure of FMIT in 2008, and, secondly, by the publication of Mr Holding’s letter in the local newspaper at that time. Nevertheless, I am satisfied that the repetition of the defamatory allegations contained in the letter, by the defendant, materially aggravated that damage. The publication of the letter by the defendant occurred at a time when the issues, relating to the closure of FMIT, were still current and of interest to the Mildura community. The repetition by the defendant of the defamatory imputations reinforced the allegations made by Mr Holding in his letter in 2008. As found by the jury, by publishing the letter, the defendant gave its endorsement to the defamatory imputations contained in it.[124] Further, the publication by the defendant of the letter in 2010, after it had been originally published in 2008, made the defamatory imputations in it, about the plaintiffs, more memorable, and more likely to have a lasting effect.
[124]The jury’s answers to Questions 2 and 10 in each proceeding.

As I have already indicated, I am satisfied that the publication of the letter by the defendant was particularly hurtful to each of the plaintiffs, and occasioned each of them genuine distress. They had each suffered considerable embarrassment and hurt arising from the closure of FMIT in August 2008, and from the publication of Mr Holding’s letter in 2008. However, I am satisfied that their feelings of distress, embarrassment and humiliation were quite substantially revived and aggravated by the publication of the letter by the defendant in 2010.

In particular, the publication of the letter by the defendant was significantly distressing to Mrs Prevedello. Having not joined the Board of FMIT until 1 July 2008, she had nothing to do whatsoever with any of the events referred to by Mr Holding in his letter. In spite of that fact, her reputation had been publicly attacked by Mr Holding in his letter in August 2008. In those circumstances, the further publication of the letter by the defendant in 2010 understandably and justifiably enraged Mrs Prevedello. It was evident, from her demeanour in the witness box, that her feelings of anger and hurt, caused by the defendant’s actions, have not sensibly diminished.

As I have already concluded, I am also satisfied that there are a number of aggravating factors deriving from the conduct of the defendant, from the time at which it published the letter on the internet, up to and including the conduct of the trial in the proceeding. In the case of Mrs Prevedello, I am satisfied that the extent of that aggravation was greater than that in the case of the other three plaintiffs. It is extraordinary that the defendant pleaded justification to the claim by Mrs Prevedello in its first three defences. Having done so – without any basis at all upon which to sustain such a defence – the defendant deleted the plea from its fourth defence (its third amended defence), without any apology, retraction or explanation.

As I have also stated, I consider that the concept of vindication, in each case, has relevance, because I am satisfied that the publications, which have been proven, have been the source of ongoing dissemination, in the Mildura community, of the defamatory imputations contained in the letter published by the defendant, because of the seriousness of those defamatory imputations and because the defendant, in the interlocutory stages of the proceedings, and at trial, has asserted the truth of those imputations.

Based on those considerations, I therefore consider that Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages, and that Mrs Prevedello is entitled to an award of $85,000 damages.

Summary of conclusions

For the foregoing reasons, I have reached the following conclusions, which I summarise as follows:

(1)The plaintiffs have not proven that the defendant, in 2010, published Mr Holding’s letter to Mr Glenn Miller.
(2)The defendant has not established its defence of publication of a public document under s 28 of the Defamation Act 2005.
(3)The defendant has not established a defence of qualified privilege under s 30 of the Defamation Act 2005. In particular, I have reached that conclusion because, although each of the recipients of the letter (Mr Lee, Mr Dichiera, Mrs Price and Louisa Prevedello) had an interest in having information on the subject contained in the letter; and the letter was published to those recipients in the course of giving them information on that subject; I am not satisfied that the conduct of the defendant, in publishing the letter, was reasonable in the circumstances. Indeed, I am satisfied that that conduct was not reasonable in the circumstances.
(4)Accordingly, each of the plaintiffs are entitled to an award of damages, including aggravated damages, as follows:
(a)Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages.
(b)Mrs Prevedello is entitled to an award of $85,000 damages.

The combined effect of the verdicts by the jury, and of my conclusions, can be stated as follows. In the period of twelve months before the issue of the proceeding, in August 2010, the defendant published Mr Holding’s letter on its website, which contained defamatory imputations of and concerning each of the four plaintiffs, Mr Jim Belbin, Mr Frank Di Masi, Mr Don Marciano and Mrs Nancy Prevedello. In particular, the letter alleged of and concerning each of those four persons:

(a)That he (or she) broke the law by investing $2.2 million of Victorian Government money without Treasury approval;
(b)That he (or she) acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market.
(c)That he (or she) approved secret last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over.

The defendant did not, in its defence of the proceedings at trial, plead that the allegations, so published by it about the plaintiffs, were true. Accordingly, each of those allegations are presumed to be untrue. The defendant has failed to establish a defence under s 28 of the Defamation Act, of publication of a public document, a defence of qualified privilege at common law, or a defence of qualified privilege under s 30 of the Defamation Act. Accordingly, the plaintiffs are each entitled to an award of damages, including aggravated damages. Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages against the defendant. Mrs Prevedello is entitled to an award of $85,000 damages against the defendant.

I shall hear counsel on the questions of interest and costs.

[2012] VSC 535

9 November 2012