Brabazon v Western Mail Ltd

[1985] FCA 88

Re: GEOFFREY BRABAZON
And: WESTERN MAIL LTD (1985) 8 FCR 122
No. WA G1 of 1984
Trade Practices - Damages
58 ALR 712 / 4 IPR 408 / (1985) ATPR para 40 - 549

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.(1)

CATCHWORDS

Trade Practices - misleading and deceptive conduct - publication of a newspaper report concerning the applicant - whether report misled or deceived the relevant audience - whether report that applicant charged with an offence likely to mislead readers into believing there was reasonable cause to suspect that the applicant was guilty - test to be applied when considering whether conduct contravenes s.52 of the Trade Practices Act

Damages - observations on the scope of loss or damage recoverable under s.82 - whether damages to feelings and reputation recoverable

Words and Phrases - 'loss or damage'

Trade Practices Act 1974 ss.52, 82

Trade Practices - Misleading and deceptive conduct - Publication of newspaper report concerning applicant - Whether report likely to mislead or deceive readers - Conduct to be judged by reference to class of possible victims - Whether publisher and proprietor of newspaper a trading corporation - Trade Practices Act 1974 (Cth), ss 52, 82.

Damages - Whether damages recoverable under s 82 of Trade Practices Act 1974 (Cth) may include damages for injury to reputation - Trade Practices Act 1974 (Cth), ss 52, 82.

HEADNOTE

(1) The publication of statements, including statements of opinion, made in the ordinary course of the publication of a newspaper is capable of constituting misleading and deceptive conduct within s 52 of the Trade Practices Act 1974 (Cth).

(2) The character of the respondent's conduct is not to be tested by reference to its effect or likely effect only on the reasonable man, but by reference to the entire class of "possible victims" in an objective assessment.

(3) The question of whether there has been a breach of s 52 must be decided by reference to the conduct of the respondent and not by reference to other circumstances for which it is not responsible.

(4) The respondent, a publisher and proprietor of a newspaper in Western Australia, was engaged in trade and commerce and was a trading corporation amenable to jurisdiction under the Act.

(5) (obiter) The words "loss or damage" in s 82 of the Act are wide enough to include injury to reputation.

Global Sportsman Pty Ltd v. Mirror Newspapers Pty Ltd (1984) 2 FCR 82; Australian Ocean Line Pty Ltd v. West Australian Newspapers Ltd and William Ross Harvey (1983) 4 ALR 497; Taco Co of Australia Inc v. Taco Bell Pty Ltd (1982) 42 ALR 177; Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd (1982) 149 CLR 191; Mirror Newspapers Ltd v. Harrison (1982) 5 ALJR 808; Steiner v. Magic Carpet Tours Pty Ltd (1984) 6 ATPR 40-590; Ratcliffe v. Evans (1892) 2 QB 524, referred to.

HEARING

Perth, 1985, February 27-28; March 1, 14. #DATE 14:3:1985
APPLICATION

Application for damages for alleged contravention of s 52 of the Trade Practices Act 1974.

A J Camp, for the applicant.

W G Martin, for the respondent.

Cur adv vult

Solicitors for applicant: R. J Butcher & Co.

Solicitors for respondent: Keall Brinsden.

SMW

ORDER

1. Application be dismissed.

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

Application dismissed

JUDGE1

The applicant is the secretary of the Kalgoorlie-Boulder Racing Club. He took up that position in January 1982 and held it until late 1983 when he was dismissed following his disqualification for 12 months under the rules of racing of The Western Australian Turf Club ("the WATC"). He was re-employed after the period of his disqualification and he still holds the position of secretary.

1. The applicant seeks damages against the respondent for a contravention of s.52 of the Trade Practices Act 1974. That contravention is said to have arisen from an article in The Western Mail of Saturday 27 November 1982. The article was quite short and a copy is attached to these reasons. It should be stressed that the applicant's claim is based solely on s.52; there is no claim in defamation in the accrued jurisdiction of this Court.

2. The Hannans Handicap was run at Kalgoorlie on 1 September 1982. It is the main race in an annual racing event known as the Kalgoorlie Round. Following the running of the race an inquiry was held by the stewards of the WATC. The inquiry opened in Kalgoorlie on 3 September 1982, that is two days after the race. It was conducted by the stewards under the rules of racing, more formally known as the Australian Rules of Racing, as adopted by the Conference of Delegates of the Principal Clubs on 18 April 1965. The rules have no statutory backing; they are consensual in nature.

3. Rule 175 of the rules of racing is headed "OFFENCES" and lists various types of conduct punishable by the committee of any club or by the stewards. Rule 175(a) bears the marginal note "Fraudulent practices" and reads:
   
   

"(a) Any person, who, in their opinion, has been guilty of any dishonest, corrupt, fraudulent or improper practice or any dishonourable action in connection with racing."

1. The rules contemplate disqualification of a person as one form of punishment. A consequence of disqualification is that the person may not enter any racecourse under the control of any club (rule 182).

2. At the inquiry on 3 September the applicant and Mr. B. Dawson who was the jockey on Our Leader, one of the horses in the Hannans Handicap, were called as witnesses. Mr. Dawson was charged with a breach of rule 175(hh) relating to the use or possession of any electric or electronic apparatus or any improper contrivance capable of affecting the performance of a horse in a race or training gallop. He was found guilty of the charge in respect of each count and was disqualified for a period of 10 years. No action was taken against the applicant at that stage.

3. On 29 October 1982 a further inquiry was held, this time into incidents occurring after the running of the Hannans Handicap. Of the six stewards who conducted the inquiry, two had sat on the earlier inquiry. The applicant and Mr. Dawson were again called as was Mr. Percy, a committeeman of the Kalgoorlie-Boulder Racing Club. Some evidence was taken and the inquiry resumed on 26 November 1982. At this time the applicant was charged with a breach of rule 175(a), particularised in this way as appears from the transcript of proceedings:
   
   

"We are charging you under that rule with an improper practice in that you, as Secretary of the Kalgoorlie-Boulder Racing Club on the 1st September 1982

(a) had in your possession an electronic apparatus which you failed to report or hand over to the stewards immediately;

(b) disposed of the electronic apparatus without telling the stewards immediately; and

(c) denied having been given an electronic apparatus when questioned by the stewards".

1. The inquiry was further adjourned, it would appear because the applicant wished to have a witness present.

2. The inquiry did not resume until 18 November 1983. No detailed explanation was given to the Court as to why the delay occurred but I infer from what was said that the applicant sought to challenge in the Supreme Court of Western Australia the proceedings against him. Presumably that challenge was unsuccessful. On 18 November the stewards found the applicant guilty of the charge and disqualified him for 12 months. The applicant appealed to the committee of the WATC against conviction and punishment. He abandoned his appeal against conviction; his appeal against punishment was dismissed.

3. Some reference to this later history is necessary to understand the circumstances in which the application was brought. But the publication complained of by the applicant took place on 27 November 1982, that is the day after the applicant had been charged but before he was dealt with.

4. It should be said at the outset that the applicant acknowledged that everything in the newspaper report was literally correct. He was charged under a rule of racing that deals with fraudulent practices; stewards did take this action during a two hour inquiry at the WATC's offices at Perth; the inquiry was held into incidents which occurred after the running of the Hannans Handicap; the stewards did call the applicant and Mr. Percy; no mention of the charge was made in the official press release issued by the chairman of stewards; the applicant did tell The Western Mail that he had been charged; Mr. Percy did then read rule 175(a); the chairman of stewards did later confirm that the applicant had been charged and did say that he had not put this in the report because he (the applicant) might be cleared next Friday; the jockey was disqualified for 10 years and Messrs. Chisholm and Wake were at the inquiry but were not called.

5. However the applicant contended that the report cannot be read literally, in particular that it would not be read so by the relevant audience being persons connected with racing or interested in racing. The statement of claim pleads that the newspaper report was misleading or deceptive or was likely to mislead or deceive purchasers and readers of the newspaper into error in the following respect:
   
   

"The meaning of the words contained in the headline and paragraphs 1, 2 and 3 of the said article was that after a two hour inquiry into incidents relating to the running of the Hannans Handicap at Kalgoorlie on the 1st day of September 1982 the stewards of the Western Australian Turf Club had reasonable cause to suspect that the Applicant was guilty of a count of fraudulent practice calculated to affect the running of the Hannans Handicap".

1. Some reference should be made to the circumstances in which the report came to be written. At the conclusion of the hearing on 26 November 1982 the applicant left the WATC's offices in which the inquiry was being held. Waiting outside were Mr. Percy, Mr. Farmer (who was the racing editor for The Western Mail and who reported the matter for that newspaper) and one or more other journalists. There was a brief conversation between the applicant and Mr. Percy before the applicant spoke to those present. According to Mr. Farmer, whose evidence I accept, the applicant said he had been charged. He gave no details of the charge but Mr. Percy had a book containing the rules of racing and read aloud the rule under which the applicant was charged. It was common ground that Mr. Percy read out rule 175(a).

2. There was some debate between counsel as to the capacity in which Mr. Percy acted during the incident just described. He was not only a committeeman but was also a Kalgoorlie solicitor and he was known to the applicant in both capacities. Although there are passages in the evidence of the applicant and Mr. Percy before the stewards suggesting that on the day of the Hannans Handicap the former sought the advice of the latter as a legal practitioner, I am not persuaded that, during the incident outside the WATC's offices on 26 November 1982, Mr. Percy was acting as the applicant's solicitor. But I am persuaded that it was with the applicant's express or implied authority that Mr. Percy read out rule 175(a) and that he did so after the applicant had identified to him rule 175(a) as the rule under which he had been charged. I am also satisfied that during this incident the applicant said nothing to those present of having been charged with improper practice.

3. The operation of s.52 of the Trade Practices Act in relation to the publication of statements in a newspaper was considered by the Full Court of this Court in Global Sportsman Pty. Ltd. v. Mirror Newspapers Pty. Ltd. (1984) 2 FCR 82 and more recently in Australian Ocean Line Pty. Ltd. v. West Australian Newspapers Limited & William Ross Harvey (unreported decision of Toohey J. delivered 21 February 1985). It is apparent from the judgment of the Full Court that the publication of statements, including statements of opinion, made in the ordinary course of the publication of a newspaper can constitute misleading and deceptive conduct within s.52. The court said that there is no definable boundary between conduct which is misleading or deceptive or likely to mislead or deceive and material which is defamatory (at p.86). The court emphasised that a contravention of sub-s.52(1) is established by conduct which is misleading or deceptive or which is likely to mislead or deceive, a question that the court must determine for itself (at p.87). The court further emphasised that while information may be misleading or deceptive or likely to mislead or deceive, it is only conduct which is misleading or deceptive or likely to mislead or deceive which attracts the operation of sub-s.52(1) (at p.87). The publication of incorrect information may constitute conduct in contravention of s.52 but only if the conduct contains or conveys a misrepresentation (at p.90).

4. Referring to Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 ALR 177 and to Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 CLR 191, the court said there is no contravention of s.52 unless error or misconception results from conduct of the respondent and not from other circumstances for which it is not responsible. The character of the respondent's conduct is not tested by reference to its effect or likely effect only on the reasonable man, but by reference to the entire class of "possible victims" (at p.91).

5. It is against that background that one must consider the claim made by the present applicant that the publication of the article in The Western Mail constituted misleading or deceptive conduct or conduct likely to mislead or deceive. One must ask - what was there about the conduct of the respondent that was misleading or deceptive? The applicant acknowledges that what appeared in the article was literally correct, in particular that he was charged by the stewards under a rule of racing that deals with fraudulent practice. But he says that the headline and the first three paragraphs of the article were likely to mislead readers into believing that the stewards had reasonable cause to suspect that he was guilty of a count of fraudulent practice calculated to affect the running of the Hannans Handicap. The applicant further says that the misleading nature of this implication is sufficiently evidenced by the fact that the stewards did not charge him with a count of fraudulent practice but with a count of improper practice.

6. The article must be read in its entirety; it is not appropriate to fasten on to one or more passages, ignoring others which are part of the context.

7. A mere statement that a person has been arrested and has been charged with a criminal offence is incapable of bearing the imputation that he is guilty of that offence. Mirror Newspapers Ltd. v. Harrison (1982) 56 ALJR 808. In that case Mason J. thought that such a statement was "capable of bearing the imputation that the police suspected him of having committed the offence and that they had reasonable cause for doing so" (at p.812). Gibbs C.J. and Brennan J. expressly left that question open.

8. In my view the article in The Western Mail, taken in its entirety, did not carry the meaning and was not likely to mislead or deceive readers into believing that after a two hour inquiry into incidents related to the Hannans Handicap the stewards had reasonable cause to suspect that the applicant was guilty of a count of fraudulent practice calculated to affect the running of the handicap. To begin with, it is not at all evident from the article that there was suspicion that the applicant was guilty of a count of fraudulent practice as opposed to some other count. The article quite carefully stated that the applicant had been charged under a rule of racing that deals with fraudulent practices and spelt out the rule in its entirety, thereby indicating that although it carried the sub-heading "Fraudulent practices" (more accurately, marginal note), the rule was not so confined. But, more than that, I do not think that the article implied that the stewards had reasonable cause to suspect that the applicant was guilty of any offence. It referred to the press release issued by the chairman of stewards which said simply that the inquiry had been further adjourned to allow witnesses to be called. It reported that the applicant said he had been charged. It went further and stated that, while the chairman confirmed that the applicant had been charged, he had not put this in the release because "he (the applicant) might be cleared next Friday". For good measure, it should be noted that the newspaper article referred to an inquiry into incidents which occurred after the running of the handicap, not to something calculated to affect its running.

9. The Court should not construe the article in some unreal way, quite divorced from the fact that it related to horse racing (an activity in which there are often allegations of misconduct) and that persons reading the article would not read it with quiet detachment. But, when all that has been said, I do not accept that the article carried the meaning which the applicant seeks to attach to it. Donald John Caporn, a witness called by the applicant, said of the article:
   
   

"... I felt that it insinuated that he had been charged with a fraudulent practice which, to me, meant that he was in cahoots with the jockey". (transcript 125)

1. Another witness, Ross William Stevenson, said that when he read the article he thought:
   
   

"Geoff (the applicant) has been charged on a fraudulent count and that he had to wait for an appeal and in some way he had been fraudulent with the jockey". (transcript 132)

1. The applicant's brother, Paul Edward Brabazon, said that he understood from the article that the applicant "... was charged with a fraudulent practice. To me, that inferred criminal involvement". (transcript 154)

2. But those are not the meanings the applicant has sought to attach to the article. He has quite deliberately pleaded a particular meaning and it is one that the words used do not readily bear. The Court must decide objectively whether conduct is misleading or deceptive or likely to mislead or deceive (Parkdale v. Puxu per Gibbs C.J. at 198-199). For the reasons given earlier, the applicant has failed to establish that the article was misleading or deceptive or likely to mislead or deceive in the manner alleged by him.

3. Furthermore, if anyone was misled in the way the applicant suggests, that person was not misled by the conduct of the respondent. If anything he or she was misled by the conduct of the applicant, unintentional though it may have been, in failing to explain to Mr. Farmer, whom he knew to be a journalist and likely to report the incident, the particular offence with which he had been charged. The respondent did no more than accurately report what the applicant and Mr. Percy said to Mr. Farmer. And if the applicant suffered loss or damage, it was not by conduct of the respondent done in contravention of s.52; it was by reason of his own conduct in what he said and failed to say after the inquiry on 26 November 1982.

4. These conclusions make it unnecessary to consider the question of damages recoverable by the applicant. But in view of a quite fundamental submission made by the respondent, I should say something about the matter. The respondent contended that in a claim under s.82 of the Trade Practices Act damages are the gist of the action and furthermore that the section provides a remedy for damage which is in the nature of special damage only. It was said that s.82 is analogous to an action on the case, requiring proof of special damage. In the present case, no special damage was pleaded or attempted to be proved. Indeed there was no claim for economic loss except that, in the vaguest way, it was suggested that, if at some future date the applicant should seek employment in another race club, the damage to his reputation by reason of publication of the article in The Western Mail is likely to make it difficult for him to obtain other employment. In my view, no such case was established. If the applicant will be at a disadvantage in the future in seeking other employment, it will be because of his disqualification for 12 months and because, having appealed against his conviction and disqualification, he abandoned his appeal against the former.

1. The applicant's claim as formulated was confined to damages to his feelings and reputation. In the respondent's submission, this could not sustain a claim under s.82 of the Trade Practices Act. There is no authority directly in point. The Global Sportsman case was decided on a case stated in which the respondent conceded that damage to credit, character and reputation alleged to have been suffered by the second applicant was loss or damage within the meaning of s.82. In the A.O.L. case, to which reference has been made, the applicant claimed and proved special damage and damage in the nature of economic loss. Steiner v. Magic Carpet Tours Pty. Ltd. (1984) ATPR 40-490 was a claim under s.52 of the Trade Practices Act in regard to an arranged tour of Bali. The applicants claimed damages, not only for out of pocket expenses, but also compensation for distress occasioned to them and for the mental illness suffered by one of the applicants. Wilcox J. dismissed the application so that it was unnecessary for him to consider the question of damages. Furthermore the respondents conceded that s.82 was sufficiently wide to include the loss of enjoyment of a holiday and the distress and inconvenience caused by the unavailability of proposed accommodation. His Honour regarded that concession as "correctly made" (at p.45,642) and continued on that page:
   
   

"Section 82 is unrestricted except by the requirement that the loss or damage suffered by the applicant be the result of the respondent's contravention of the legislation. Damages in respect of such matters have been allowed in relation to breach of contract to provide accommodation of a particular standard".

1. I do not think it is profitable to argue, as the respondent argued, by analogy from cases of injurious falsehood though in Ratcliffe v. Evans (1892) 2 QB 524 the Court of Appeal held that evidence of a general loss of business, as distinct from the loss of particular known customers, was sufficient to support such an action. In Ratcliffe v. Evans at p 528 Bowen L.J. said of the expression "special damage":
   
   

"At times (both in the law of tort and of contract) it is employed to denote that damage arising out of the special circumstances of the case which, if properly pleaded, may be superadded to the general damage which the law implies in every breach of contract and every infringement of an absolute right: see Ashby v. White 2 Ld. Raym. 938. In all such cases the law presumes that some damage will flow in the ordinary course of things from the mere invasion of the plaintiff's rights, and calls it general damage. Special damage in such a context means the particular damage (beyond the general damage), which results from the particular circumstances of the case, and of the plaintiff's claim to be compensated, for which he ought to give warning in his pleadings in order that there may be no surpose at the trial. But where no actual and positive right (apart from the damage done) has been disturbed, it is the damage done that is the wrong; and the expression 'special damage,' when used of this damage, denotes the actual and temporal loss which has, in fact, occurred".

1. In the case of a claim under s.82 of the Trade Practices Act, there is no actual and positive right which may be disturbed and as to which the law presumes some damage. Section 52 proscribes certain conduct and a person who suffers loss or damage by that conduct may recover that loss or damage by action. That is not to say that special damage must be shown; the question is whether the applicant has suffered loss or damage by the respondent's conduct in contravention of s.52. The Act itself offers no other guidance save that, by reason of s.4K, a reference to loss or damage includes a reference to injury.

2. The present question is not one of the measure of damages under s.82; rather it is one of the nature of the compensation that may be recovered. The words "loss or damage" are wide in their operation as appears from the illustrations provided in Stroud's Judicial Dictionary 4th Ed. 674-678, 1577-1580. Damages for mental distress have been awarded in certain cases of breach of contract (Athens-MacDonald Travel Service Pty. Ltd. v. Kazis (1970) SASR 264; Jarvis v. Swan Tours Ltd. (1973) 1 QB 233; Jackson v. Horizon Holidays Ltd. (1975) 1 WLR 1468; Cox v. Philips Industries Ltd (1976) 1 WLR 638; Heywood v. Wellers (1976) 1 QB 446) and of tort (Shelley v. Paddock (1978) 2 WLR 877; Jaensch v. Coffey (1984) 54 ALR 417). Damages for injury to reputation of course lie at the very heart of actions for defamation. Whether an individual, whose reputation has been damaged by misleading or deceptive conduct in the form of a newspaper report, should be compensated for that injury to reputation, whether or not there is accompanying economic loss in the form of special or general damage, is a matter of interpretation of the Trade Practices Act. In my view the words "loss or damage" are wide enough to include such compensation; however the loss or damage suffered must be the result of conduct done in contravention of s.52.

3. As the applicant has failed to establish misleading or deceptive conduct on the part of the respondent, there is no need to explore the question of damages further. It is enough to say that no financial loss has been established and, if the applicant were entitled to damages, it would be confined to such injury to his reputation as he was able to establish.

4. The respondent is sued as a trading corporation formed within the limits of the Commonwealth of Australia for the purposes of the Trade Practices Act. That allegation is denied in the defence. However the respondent admits further allegations that it is a company duly incorporated in accordance with the laws of Western Australia and that at all material times it has been the publisher and proprietor of The Western Mail, a weekend newspaper having extensive circulation throughout Western Australia. In my view the respondent, in publishing its newspaper throughout Western Australia, was engaged in trade and commerce. I refer to what I said in the A.O.L. case at p.81. I am satisfied that the respondent is a trading corporation and that it is amenable to jurisdiction under the Trade Practices Act. But, for the reasons already given, the application must be dismissed.