Chakravarti v Advertiser Newspapers Ltd No. Scgrg-92-1688 Judgment No. S6901

CHAKRAVARTI v ADVERTISER NEWSPAPERS LTD

[1998] SASC 6901

Full Court: Doyle CJ, Perry and Williams JJ

DOYLE CJ AND PERRY J. The High Court of Australia, after hearing an appeal from this Court, has remitted two matters to this Court. First, a cross-appeal by the plaintiff (we will describe the parties by their original designation) to this Court against the assessment of damages by the trial judge. The damages, described by the trial judge as general damages, were awarded for the publication by the defendant of two libels. The cross-appeal complains that the amount awarded is manifestly inadequate. Second, one ground of an appeal by the defendant to this Court. This ground appeals against the amount awarded by the trial judge for what the trial judge described as “special damages”. The defendant submits that the amount awarded is manifestly excessive.
In short, this Court must now consider the plaintiff’s complaint that the amount awarded for general damages was inadequate, and the defendant’s complaint that the amount awarded for special damages was excessive.
Each of these matters is remitted to this Court for “... hearing and determination in accordance with the reasons of ...” the High Court.
Before proceeding to deal with the matters remitted to this Court, it is necessary to summarise the circumstances giving rise to the remitter. It is necessary also to explain and to put in context the issues that fall for decision.

A claim for defamation

The defendant is the publisher of The Advertiser newspaper. The Advertiser is published in Adelaide each day of the week other than Sunday. The Advertiser circulates throughout the State of South Australia. It is the only daily newspaper published in this State. It has a substantial circulation.
The trial judge found that two articles published in The Advertiser on 15 July 1992 and 18 July 1992 defamed the plaintiff. We will refer to them as “the first article” and as “the second article” respectively.
The articles reported part of the proceedings of a Royal Commission appointed to investigate the near collapse of the State Bank of South Australia (“the State Bank”) and of companies associated with the State Bank. One of those companies was Beneficial Finance Corporation (“BFC”), a wholly owned subsidiary of the State Bank. On 14 July the Commission heard evidence from Mr D W Simmons, who had been Chairman of BFC and also Chairman of the Board of the State Bank. The first article related to that evidence. On 17 July the Royal Commissioner made public extracts from Mr Simmons’ diaries that had been received in evidence by the Royal Commission. The second article related to this and other material.
At the time dealt with in the testimony and in the diary extracts, the plaintiff was a senior executive of BFC. Mr Baker was then the Managing Director of BFC. The plaintiff was one of a small group of executives who were next in seniority to Mr Baker. The plaintiff was mentioned in both articles.
The text of each article may be found in the reasons of the Chief Justice in the report of the previous decision of this Court at 65 SASR 527. The text of each article is also to be found in the reasons of Gaudron and Gummow JJ in the decision of the High Court at [1998] HCA 37 at [41] and at [63-65].
The case was heard by a judge sitting without a jury. His decision is reported at (1995) 181 LSJS 218. The trial judge did not make specific findings as to the meanings pleaded in the amended Statement of Claim. However, he held that both articles bore imputations which were defamatory of the plaintiff: (1995) 181 LSJS 218 at 230, 235. He rejected defences of justification and fair report. He assessed damages at $225,000 for the first article and $25,000 for the second article. He apportioned $175,000 as “economic loss” or “special damages” and $75,000 as “general damages”. He also allowed interest in the sum of $18,000, making a total verdict of $268,000: (1995) 181 LSJS 218 at 240. The defendant then appealed to this Court against the finding of liability and against the assessment of damages. The plaintiff cross-appealed on the ground that the amount awarded by way of general damages was manifestly inadequate. No complaint was made by the plaintiff about the amount awarded for special damages.
The Full Court held by a majority that the plaintiff was not entitled to succeed on the first article because it was not capable of bearing the meanings pleaded in the amended Statement of Claim. The Full Court held that the plaintiff was entitled to succeed on the second article. The Court held that the plaintiff could recover damages only in respect of the imputations in those parts of the second article which did not fairly report the proceedings of the Royal Commission. The result was that the defendant’s appeal was allowed in part, the plaintiff’s cross-appeal was dismissed and a verdict of $40,000 plus interest was substituted for that entered by the trial judge.
The plaintiff appealed to the High Court, and the defendant cross-appealed.
The High Court found that the plaintiff was entitled to succeed on both articles. It found that the plaintiff had established the first of the imputations pleaded in respect of the first article and, notwithstanding the form of the pleadings, was entitled to reply upon an imputation substantially similar to the second of the pleaded meanings: [1998] HCA 37 at [50] and [61] Gaudron and Gummow JJ, with whom Brennan CJ and McHugh J agreed at [1]. Kirby J found that each of the imputations pleaded in relation to the first article was made out at [140]. Gaudron and Gummow JJ concluded that four of the six meanings pleaded with respect to the second article were made out: [1998] HCA 37 at [72]-[76]. Kirby J was of the view that each of the pleaded imputations was established: at [145].
The High Court rejected the submission by the defendant that the judge should have held that each article was a fair and accurate report of the proceedings of the Royal Commission: Gaudron and Gummow JJ at [46] and at [70]; Kirby J to the like effect at [158].
The High Court held that the Full Court had erred in its approach to damages. It had erroneously confined the assessment of damages to those parts of the articles which it had found not to be a fair and accurate report of the proceedings of the Royal Commission. As Gaudron and Gummow JJ said at [94]:
“A report is either fair or it is not. Where privilege attaches, it attaches because it is in the public interest to publish a fair report of the proceedings in issue. It is not in the public interest to publish a report that is unfair, even if the report is accurate in part. Thus, it is inaccurate to speak of parts of an unfair report which are privileged or non-actionable unless, as earlier indicated, they are privileged on some other basis, are fair comment or have been justified.”
The High Court also held that the Full Court had erred in its approach to the assessment of damages for loss of earning capacity. We will return to this matter, because it is at the heart of the matters remitted to the Court. Suffice it to say that the Full Court was in error in failing to act upon a finding, open to the trial judge, that “... the articles resulted in a loss of earning capacity productive of actual loss”: [1998] HCA 37 at [101].
The end result was, as we said earlier, that the High Court remitted to this Court the plaintiff’s cross-appeal against the assessment of general damages. As to that, Gaudron and Gummow JJ said at [103]:
“Mr Chakravarti’s cross-appeal to the Full Court with respect to general damages was dismissed in a context in which it was wrongly held that he was not entitled to succeed on the first article and was only entitled to damages for those imputations arising out of those parts of the second article which did not fairly report the proceedings of the Royal Commission. It is thus necessary for the cross-appeal to be remitted to the Full Court for its consideration in the light of these reasons.”

Because of the manner in which it dealt with the case, the Full Court had not dealt with the defendant’s ground of appeal that the amount awarded for special damages was excessive. The basis upon which that matter was remitted to the Full Court was summarised by Gaudron and Gummow JJ as follows at [104]:

“The other matter which should be noted is that the Full Court had no need to deal with an alternative ground of appeal advanced by the Advertiser in that Court, namely, that the award of $175,000 for special damage was manifestly excessive (Ground 6). Nothing was advanced in this Court in support of that proposition. However, as it was not dealt with by the Full Court, that issue should also be remitted to that Court for its consideration but on the footing, as indicated above, that the true character of the award was with respect to past loss of earnings.”

This Court must now consider whether the amount awarded for “special damages” was manifestly excessive, and whether the amount awarded for “general damages” was manifestly inadequate. It must do so on the basis of the findings of fact that the trial judge made that are relevant to the question of damages, none of these findings having been disturbed. It must do so on the basis of the imputations that the High Court has decided were established.

Findings of fact and imputations made out

We now summarise the findings on the basis of which the trial judge assessed damages.
The plaintiff was born in 1948. He has degrees in physics and business administration. He has spent most of his working life in the finance industry. He joined BFC in 1982. By 1990 he had become the Executive Director for the Australian Business Division. As we said earlier, he was one of a small group of executives next in seniority to Mr Baker. During 1990 it became apparent that BFC and the State Bank had sustained heavy losses, and would need to make provision for further substantial losses. In August 1990 Mr Baker ceased to be employed by BFC. Relations between the plaintiff and the new Managing Director were strained. The plaintiff resigned from BFC in November 1990.
At that time the plaintiff was on a salary package of $225,000 plus bonuses. In the preceding year he received a salary of $200,000 and bonuses of about $92,000. The judge said that this gave “some idea of the kind of salaries that senior executives in the finance industry could command at that time.”
After the plaintiff left BFC he was unable to find comparable employment elsewhere. He attempted to find employment in other States of Australia, and also overseas.
In early 1991 a Royal Commissioner was appointed to inquire into the near collapse of the State Bank and BFC. These events were widely known in the South Australian community, and also received considerable publicity outside this State. The scale of losses sustained by the State Bank and by BFC attracted widespread attention. Allegations of mismanagement at senior levels were made in Parliament and before the Royal Commission. As the trial judge said, with reference to the plaintiff’s attempts to find employment, the virtual collapse of the State Bank and of BFC “did not help, nor did the publicity given to the Royal Commission hearings.”
In April 1992 the plaintiff obtained a position with Leal Boss Computer and Office Supplies Pty Ltd (“Leal Boss”). He was the General Manager, employed at a salary of $90,000 a year with superannuation and other benefits. The trial judge said:
“There was no clear arrangement as to the duration of his employment and, indeed, there was no written contract and no independent support for the plaintiff’s evidence on this subject.”

Nevertheless, there is no reason to think that the trial judge did not accept generally the plaintiff’s evidence on this topic. On the basis of the plaintiff’s evidence there were prospects of that employment with Leal Boss continuing for some time, and possibly becoming permanent.

In July 1992 the Royal Commission was taking evidence from Mr D W Simmons. On 14 July 1992 Mr Simmons gave evidence, by reference to a file note, about information that he had given to the Premier of South Australia in July of 1990 relating to loans made by BFC to certain executives, including the plaintiff. That evidence was the subject of the first article, published on 15 July 1992. The article began on the front page of The Advertiser. In brief, it dealt with the resignation of Mr Baker from BFC, the reason that the Premier had given to Parliament for that resignation, and the information that Mr Simmons had given to the Premier about the resignation. The article named three other executives, in connection with loans to executives, including the plaintiff. In particular, the article reported that the loans gave rise to “a question” of either “criminal or civil misconduct ... in relation to four Beneficial executives ...”.
In his action, the plaintiff pleaded two meanings with respect to the first article. These were that:
“(a).. the plaintiff was involved in criminal or civil misconduct, whilst an executive of Beneficial Finance, in respect of loans from Beneficial Finance to himself.
(b). The plaintiff’s conduct in receiving loans direct to himself as an executive of Beneficial Finance which loans were in excess of his entitlement was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.”

The High Court found that the first of the meanings was made out. As to the second meaning, the High Court found that the imputation of misconduct which might be criminal rather than civil with respect to loans from BFC, carried a “... distinct innuendo that, by reason of that misconduct, Mr Chakravarti was not a fit and proper person to be or remain an executive of Beneficial”: Gaudron and Gummow JJ at [50]. The High Court concluded that the slight difference between that innuendo and the innuendo pleaded, which referred to loans in excess of an entitlement, was not sufficient to lead to the result that Mr Chakravarti could not rely upon the innuendo that arose: Gaudron and Gummow JJ at [59].

In our opinion this conclusion is substantially in accordance with the conclusion reached by the trial judge. He did not deal specifically with the pleaded imputations. He expressed his conclusions as follows, at 230:
“The ordinary reader would conclude that the plaintiff’s conduct had brought him, as an executive of Beneficial, into collision with ‘the board’ (of either Beneficial or the Bank - it matters not which) and that the matter of his conduct was of such gravity that it raised a question whether it amounted to criminal or civil misconduct, with the possibility tending towards the former rather than the latter in the view of the Chairman of both Boards. While ‘the Melbourne joint venture’, reference to which had made the Premier particularly angry, was not explained, any reader was likely to infer that it was something discreditable to those involved in it who included, the article implied, the plaintiff. There was also an imputation that the plaintiff had left Beneficial under a cloud, most obviously because of his questionable conduct.”

However, we note that the trial judge did not refer specifically to the concluding part of the second imputation, namely, that the plaintiff was not “... a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.”

On 17 July the Royal Commissioner made public an edited version of diary notes of Mr Simmons that had been received in evidence when Mr Simmons was giving evidence. On 18 July the defendant published a second article, based on the diary notes. This article also named the plaintiff. The theme of the article was again that substantial unauthorised loans had been made to senior executives of BFC.
In relation to the second article the High Court found that four of the six pleaded imputations were made out. They are as follows:
“(b).. the plaintiff was a party to a conspiracy within the State Bank group in connection with multimillion dollar unauthorized loans;
(c). the plaintiff had received one or more loans which were not approved or authorized and which provided greater benefits to him than those to which he was entitled and that the plaintiff had been involved in criminal, or at least civil, misconduct in connection with obtaining those loans;
(e). the plaintiff had engaged in criminal, or at least civil, misconduct in connection with that loan;
(f).. [t]he plaintiff’s conduct in relation to the stated loans was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.”
The trial judge did not deal in terms with the pleaded imputations. He appears to have found in favour of the plaintiff on the basis of imputations to the effect of imputations (b) and (c) and substantially to the effect of imputation (f). The qualification is necessary because he said, at 236:
“The effect of the article was to show that the plaintiff was not a fit and proper person to be or remain a Beneficial executive.”

He did not refer to other positions of trust.

For the sake of completeness we mention that Kirby J would have found in favour of the plaintiff on two further imputations, but on that point he was in dissent: [1998] HCA 37 at [143].
We return to the narrative of events. The trial judge found that the plaintiff was dismissed peremptorily from his employment by Leal Boss on 17 July. The judge said, at 239-240:
“From that time he has made persistent efforts to find other employment but without any real success. He did earn a little money last year selling insurance for 2 weeks on commission, but he found the work uncongenial and unsuited to his background and training and I do not think that one could blame him for that. So his case is that he lost his job as a result of the publication of the first article and that, because he has been unable to clear his name publicly, he has remained out of regular work ever since. He went onto unemployment benefits. The evidence on this part of the case is slender, perhaps, and is not independently supported but I am disposed to accept it. It is unrealistic to criticize the plaintiff for not calling someone from Leal Boss to say why they dismissed him. I think it likely that, if the articles had not been published but, for some reason, the plaintiff had not continued with Leal Boss, he would have obtained a good job, possibly even a better one, elsewhere, though I cannot be certain about that. The plaintiff has therefore made out his case of special damage.”
The trial judge also found that it was a proper case for aggravated damages. There were three matters that the trial judge found were established by way of aggravation.
The plaintiff’s proceedings were instituted on 24 July 1992. A Defence was filed on 21 August 1992. In that Defence the defendant pleaded justification in respect of an imputation that the plaintiff had received loans which were in excess of borrowing limits and in excess of the plaintiff’s entitlements. The defendant persisted in that plea until August 1993. In support of that imputation it relied in part upon an internal audit report that it did not actually see until January 1994, after the plea was abandoned. The second matter relied upon by the trial judge was the fact that on 30 June 1993 the Auditor-General for the State of South Australia published a report relating to the affairs of BFC. In that report he found that no adverse comment could be made of the plaintiff in respect of the loans that he had received. Nevertheless, for a further two months the defendant maintained its plea of justification of the imputation that the plaintiff was involved in civil or criminal misconduct in respect of loans. The third matter was that the defendant persisted for about seven months in a plea that the plaintiff had been in breach of the Corporations Law in respect of a particular transaction, although the defendant had no sufficient basis for believing that it could sustain that plea. The plea was abandoned in July 1993, but even after that the defendant had pursued the subject matter by way of discovery application.

To put this matter in context we mention that these pleas had been abandoned by the time that the defendant filed an Amended Defence in October 1993. The trial of the action began on 6 February 1995.
Referring to the three matters of aggravation already referred to by us, the trial judge, at 238-239, said that they:
“... show on balance, I think, that the defendant’s pleas in question were unsupportable and that the were made, at the least, without proper enquiry.”

The High Court’s approach to damages

Gaudron and Gummow JJ pointed out that the amount of $175,000 awarded by the trial judge, although described by him as special damages, was for past loss of earnings and as such was “... simply the measure of a component part of the damages for lost earning capacity.” They found that it was open to the judge to conclude that the articles resulted in a loss of earning capacity productive of actual loss: at [101]. Referring to the finding of the trial judge set out above, they said at [101]:
“Although there might be room for argument whether the evidence would support a finding that the first article resulted in the termination of Mr Chakravarti’s services, that was not the finding made at first instance. As already indicated, that finding was simply that, but for the articles, Mr Chakravarti would have been able to obtain comparable or better employment elsewhere (1995) 181 LSJS 218 at 240 per Cox J. That was a finding of fact and a finding that was clearly open on the evidence. When there is added to that finding the undisputed fact that Mr Chakravarti’s services were terminated and the evidence, which Cox J said he was disposed to accept, that Mr Chakravarti had not thereafter had regular employment, it was open to his Honour to conclude that the articles resulted in a loss of earning capacity productive of actual loss. To the extent that the Full Court reached a contrary view (1996) 65 SASR 527 at 552 per Doyle CJ, 557 per Perry J, 561 per Williams J, it was in error. And once Cox J concluded that there had been actual loss, it was open to his Honour to quantify that aspect of Mr Chakravarti’s lost earning capacity in a sum reflecting the income he otherwise could and would have earned. As will later appear, there is an outstanding question whether the sum awarded accurately reflects that loss.”
Immediately before this passage their Honours referred to the $175,000 as an award in respect of past loss of earnings. In support of that conclusion they relied upon the amount awarded and the fact that interest was awarded. They added that it had been so treated by the parties and by the Full Court: at [100]. As to the latter matters, we respectfully observe that before the Full Court the sum of $175,000 had been treated by both parties as an award in respect of loss of earning capacity generally. Rightly or wrongly, that is how it was regarded. But that is now unimportant. The plaintiff is entitled to damages on the basis of the facts as found by the trial judge and on the basis of the imputations identified by the High Court. The plaintiff has appealed against the amount awarded by way of general damages, although he did not appeal against the amount awarded in respect of loss of earning capacity. But in a case like this, it is not possible to draw a clear and precise line between damages for loss of earning capacity and damages for injury to reputation. As Kirby J said at [179]:
“However, in this case, the real gravamen of the appellant’s complaint was one of general damage to his reputation and hence to his employability as a senior finance executive. In this sense, the damage was to his economic capacity. It therefore sounded in general damages.”

Impairment of the plaintiff’s earning capacity and damages for injury to his reputation are interlinked. The Court must now, in considering the plaintiff’s cross-appeal, have regard to any amount awarded for loss of earning capacity or, as the High Court has identified the relevant amount, for past loss of earnings. The issue is whether, having regard to the amount awarded by the trial judge for loss of earnings, however identified, the amount awarded by way of general damages is manifestly inadequate. It would be artificial and unrealistic on the plaintiff’s cross-appeal in respect of general damages to treat the issue of compensation for loss of earning capacity as foreclosed by the failure of the plaintiff to appeal against the amount awarded by the judge for what the judge called “special damages”. At the end of the day the plaintiff is entitled to damages, and there is no doubt that this is a case in which those damages must include compensation for lost earning capacity. The proper assessment of those damages cannot be prevented by the manner in which the trial judge categorises the damages.

In any event, taking account of broader considerations of fairness, on the further hearing of the appeal the Court gave leave to the plaintiff to amend his Notice of Cross-Appeal to claim that the amount of $175,000, however it might be described, was inadequate. The Court took the view that the effect of the remitter by the High Court was that it should decide whether the overall amount of $268,000 awarded by way of damages including interest was manifestly inadequate or manifestly excessive. There is no unfairness to the defendant in disposing of the appeal on that basis.
In relation to the quantum of damages, Gaudron and Gummow JJ said at [103]:
“On any view, the imputations were of a kind that could be expected seriously to injure Mr Chakravarti in his capacity as a professional employee in the finance industry and, thus, warrant a very substantial award of general damages.”

In this context it is also of significance that, as we have already pointed out, they clearly regarded the amount of $175,000 as an award for past loss of earnings, and not for loss of earning capacity generally. When referring to the remitter of the defendant’s appeal, they said in terms that it was remitted on the basis “... that the true character of the award was with respect to past loss of earnings”: at [104].

In relation to the award by the trial judge of $75,000 for general damages, Kirby J said that both articles conveyed serious imputations: at [180]. He said that this was “... especially so for a senior finance executive whose earning capacity depended upon a reputation for probity and personal integrity.” He regarded the amount awarded for general damages as “parsimonious”: at [185].
In our opinion this Court must now consider whether the overall amount awarded was excessive or was inadequate. It must consider both aspects of the plaintiff’s entitlement to damages. That is, damages for loss of earning capacity and damages for injury to reputation. The two are closely linked.

Further evidence

When the appeal came on for hearing, the plaintiff sought to adduce further evidence of efforts that he had made to obtain employment since the delivery of judgment by the trial judge. The plaintiff had filed an affidavit that summarised the evidence that he wished to give. The effect of the evidence was that he had had little success in obtaining employment to which he was suited, despite making many applications. For a period of about three months he had obtained employment as a consultant at an annual rate of about $182,000. That was said to show his potential to earn income. In his affidavit he said that he was currently working as a taxi driver. The plaintiff also sought to tender articles published by the defendant reporting the judgment of the trial judge and the judgment of the High Court. It was contended by the plaintiff that the defendant’s coverage of the plaintiff’s successes was unfair, and would tend to show that his reputation had not been vindicated by the decision of the Court. This material was also said to be relevant to the issue of aggravated damages.
The defendant opposed the application. If the application were allowed, it not unreasonably wished to cross-examine the plaintiff. It suggested that if further evidence were to be given, the matter should be remitted to the trial judge.
The plaintiff supported his application on the basis that the further evidence was relevant and material to the assessment of damages, and would enable the Court to consider the issue of damages on the basis of facts, rather than speculation about what might have happened between the date of judgment and the present time. It was submitted that justice would not be done if the evidence were not admitted.
The Court has a wide discretion to receive further evidence on the hearing of an appeal. The power is conferred by r95.15(b) which provides that when hearing an appeal the court
“may in its discretion receive further evidence upon any question of fact.”

The terms of this rule, unlike its predecessor O48 r14(1), do not distinguish between evidence of matters occurring before trial and after trial. However, the discretion is expressed in completely general terms. There is no reason why, within the ambit of such a generally expressed discretion, the more liberal approach taken under the previous rule to the admission of evidence of facts occurring after trial should not continue to be taken. The approach taken under the earlier rule appears from the decision of this Court in Peterhaensel v Woodman [1971] SASR 333.

In our opinion the general approach to be taken to the exercise of the discretion is that taken by Bray CJ in Peterhaensel v Woodman. That was the view taken by this Court in Spargo v Greatorex (1992) 59 SASR 1 at 16-17. In Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 the Court of Appeal of New South Wales considered the meaning of s75A of the Supreme Court Act 1970, which also distinguished between further evidence on appeal concerning matters occurring after trial and concerning matters occurring before trial. The Court of Appeal took an approach to that provision which appears to us to be the same as the approach taken by Bray CJ in Peterhaensel. We propose to follow the approach taken in both cases.
The essence of that approach is that usually fresh evidence will not be admitted if it bears on an area of uncertainty in which the trial judge has made an estimate; but that usually fresh evidence will be admitted if a basic assumption underlying the trial judge’s approach has been falsified: Peterhaensel at 336-337 Bray CJ. However, we emphasise that what is involved is the exercise of a broad discretion.
In our opinion it is not enough to say that matters relevant to the assessment of damages may have changed since trial, or that further evidence will enable a confident finding of fact to be made about a matter that otherwise would be the subject of inferences, or even worse of speculation. More than that must be shown to justify the reception of further evidence. The need for a more restrictive approach than that arises from the public interest in there being an end to litigation, and from the need, as a matter of practical justice, to put an end at some point to the process of factual enquiry.
It fell to the trial judge to assess damages for loss of earning capacity on the basis of findings made by him on the evidence then before him. Throughout Australia an appeal against the assessment of damages is usually determined on the basis of the facts as they were before the trial judge. This is so, even though in many cases further events will have occurred between trial and appeal which are relevant to the assessment of damages. That this is so is illustrated by the many personal injury cases in which the application of the above principles has been considered. The reception of further evidence on appeal is the exception rather than the rule.
The trial judge had to consider the plaintiff’s claim for loss of earning capacity. He did that. We have set out his findings relating to loss of earning capacity. As to the future he said, at 240:
“The successful outcome of this case should do much to restore the plaintiff’s reputation but it cannot be expected that he will make a full economic recovery overnight.”

With reference to the possible ameliorative effect of publicity he said, at 240:

“It is not to be assumed that the result of these proceedings will be published in the defendant’s newspaper with anything like the prominence given to the articles that libelled him, if indeed it is published at all. The defendant was careful no to give the Court any undertaking on the matter.”

Thus, the judge made findings on the matters that are the subject of the further evidence that the plaintiff wishes to lead.

The present case is not one in which some event has occurred which falsifies an assumption upon which the trial judge’s assessment was made. The effect of the proposed evidence is, broadly, to show that the plaintiff has continued to have great difficulty in obtaining employment to which he is suited. That is a matter on which the judge has already made a finding. He expected the difficulty to continue. He did not say for how long. The further evidence that is sought to be led does no more than provide a basis for a specific finding on a matter on which the judge had to make a prospective assessment. Granted, it suggests that the plaintiff’s difficulty obtaining suitable employment has continued. It tends to dispel any cause for optimism about the plaintiff’s prospects. But in almost every case the judge has to make a prospective assessment making the best of what is available. This is part of the process of assessing damages.
If that evidence were to be admitted in the present case, it seems to us that it would equally follow that had the plaintiff obtained a good position soon after trial, the defendant would be entitled to prove that in reduction of the damages awarded to the plaintiff. To allow further evidence merely because it removes a necessary element of prediction and assessment would tend to erode the finality of the trial judge’s decision on damages.
As we have already said, this is not a case in which the proposed evidence falsifies an assumption upon which the trial judge acted. Nor is it a case in which the proposed evidence establishes a fact which, while perhaps consistent with the judge’s award, could hardly have been contemplated by the trial judge. There was no reason at all for the trial judge to think that the plaintiff’s difficulty in obtaining employment would quickly come to an end. He did not so find.
Nor do considerations of commonsense and fairness, to our minds, require the admission of the evidence: see Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 297 Gleeson CJ. In an ideal world it is always better to act on fact rather than speculation or inferences from facts. But there is a real public interest in the finality of litigation, and in a limit to the scope of the inquiry undertaken as part of the judicial process. The admission of the evidence would require, as a matter of fairness, at the least that the defendant have the opportunity to cross-examine the plaintiff on the evidence. It might also require that the defendant be at liberty to adduce any evidence that it might wish to lead in relation to the plaintiff’s further attempts to obtain employment. Nor is this a case in which our own sense of justice is offended by not admitting the evidence.
For those reasons we joined in the decision of this Court, during the hearing of the appeal, to refuse to admit the further evidence.
For completeness we should add that it was an aspect of the plaintiff’s submissions that the trial judge’s assessment of damages had proceeded on a basis that had been entirely supplanted by the High Court’s conclusions as to the imputations that were made out. It was submitted that the differences between the imputations found by the trial judge and those found by the High Court meant that it was now a matter of reassessing damages afresh, without regard to the trial judge’s award. We do not accept that the imputations found by the High Court differ substantially from those found by the trial judge. But, in any event, in our submission that is not the point. The imputations found to arise from the articles published by the defendant do not, in this case, control or affect the scope of the evidence that is relevant on the issue of damages. Even if the imputations found by the High Court are wider in their scope and more damaging than the imputations found by the trial judge, that does not render relevant evidence that would not have been relevant and admissible before the trial judge. In terms of the relevance and admissibility of evidence going to damages, nothing has changed.

Basis upon which damages fell to be assessed by the trial judge

We have already set out the imputations that must be taken to have been established.
The trial judge referred to the impact upon the plaintiff’s employment prospects, after he resigned from BFC in November 1990, of the collapse of BFC and of the publicity given to the Royal Commission hearings. Despite that, the plaintiff obtained employment with Leal Boss. The fact that he was able to do so, before the publication of the articles, is a significant matter. However, the fact that he accepted employment at a much lower level of remuneration is indicative of the difficulties that the plaintiff faced in getting suitable employment after he had left BFC. The trial judge accepted that after publication of the first article, and because the plaintiff was “unable to clear his name publicly” he had been out of regular work. The trial judge found that but for the publications by the defendant, the plaintiff after leaving Leal Boss would have obtained as good a job as he had there, and perhaps a better one.
From the time that the plaintiff’s employment at Leal Boss was terminated until trial, was a period slightly in excess of 30 months. On the findings of the trial judge, but for the publication of the article, the plaintiff would have earned in that period about $225,000 (gross) more than he did earn, that is two and a half years at a gross salary of $90,000. The actual figure might have been somewhat more or less. Precision is not possible.
But the allowance for loss of earning capacity must have regard to potential net earnings after tax. Bearing that consideration in mind the amount of $175,000 awarded by the trial judge for loss of earnings to the date of trial, could not be said to be manifestly inadequate.
On the trial judge’s findings it was to be expected that the plaintiff’s difficulty in obtaining employment would continue for some time. It was impossible to say for how long. There was no reason to assume that that difficulty would continue forever. On the other hand, there was no reason to assume that it would be of a short duration, or that once the plaintiff obtained employment the effect of the defamatory imputations would cease thereafter.
It must not be overlooked, as Gaudron and Gummow JJ pointed out at [99], that the trial judge’s finding that if the articles had not been published but for some reason the plaintiff had left Leal Boss, he would have obtained as good a job or possibly a better one elsewhere, was
“... a finding of lost earning capacity or, perhaps, more accurately, a finding which supports a finding to that effect. Lost earning capacity, if it is or may be productive of actual loss, is loss which is capable of assessment in money terms.”

And they went on to point out at [101] that it was open to Cox J to conclude, and that he had concluded, that there had been actual loss.

The award of damages for lost earning capacity must reflect not only the loss suffered to date of trial, but loss likely to be suffered in the future. The assessment of the amount to be allowed for loss of future earning capacity is attended by the usual difficulties in determining what the future might have held for the plaintiff in that respect, if the libels had not been published.

Before they were published, he was earning at the rate of an annual salary of $90,000 gross, or say $75,000 after tax.
If the libels had not been published, in time he might have surmounted whatever diminished perception of his employability as a finance manager in the eyes of potential employers, might have stemmed from his prior association with BFC. But whether or not he might eventually have achieved a higher level of earnings than $75,000 net after tax, is speculative. Even so in our opinion the damages award for loss of earning capacity in that respect had to be substantial. Those damages had to be assessed on the basis that the difficulty in obtaining employment was likely to continue for some time, and might continue even after the plaintiff succeeded in obtaining employment. The fact that he had been unable to obtain satisfactory employment for a period of almost three years, up to the date of trial, was significant. Under this head, in light of the High Court’s reasons and the other considerations to which we have referred, we consider that an award of $450,000 is required for loss of earning capacity since trial, in addition to the sum awarded for loss to the date of trial.
We turn to the award of damages for matters other than loss of earning capacity. We remind ourselves of the link between the two.
In Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 the High Court upheld a decision of the Court of Appeal of New South Wales setting aside as excessive damages awarded by a jury. In the course of considering whether the verdict was excessive, Mason CJ and Deane, Dawson and Gaudron JJ referred to the purposes to be served by damages awarded for defamation in a case in which no claim is made for particular economic loss. We treat what they say as applicable to the aspect of damages now under consideration. They said (at 60-61):
“Specific economic loss and exemplary or punitive damages aside, there are three purposes to be served by damages awarded for defamation. The three purposes no doubt overlap considerably in reality and ensure that ‘the amount of a verdict is the product of a mixture of inextricable considerations’. The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant’s personal and (if relevant) business reputation and vindication of the appellant’s reputation. The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant. 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.” (Footnotes omitted.)
The submissions by the parties in this case canvassed the relevance of awards of damages in person injury actions. In Carson the same members of the High Court dealt also with this issue. Their Honours held that it is permissible, and indeed appropriate, for an appellate court considering an award of damages to bear in mind the scale of awards in cases of serious personal injury. Their Honours said (at 57-58):
“In Coyne, Mason CJ and Deane J considered that it is legitimate for an appellate court considering an appeal against the quantum of damages in a defamation case to bear in mind ‘the scale of values’ applied in dealing with appeals in cases of serious physical injury. There is no occasion here to repeat the reasoning advanced in support of that conclusion. That conclusion does not deny that the harm suffered in defamation cases differs from the ‘tearing of flesh and bone and the pain of body’ suffered in personal injury cases nor that ‘precise comparisons’ should not be drawn between the different types of cases. But for an appellate court which must test the quantum of a defamation award against some criteria to be prohibited from considering awards of general damages in personal injury cases would exclude reference to a potentially relevant criterion.” (Footnotes omitted.)

As we understand their Honours, their approach is summarised by the following short statement (at 58-59):

“And the foundation of that relationship must be the scale of awards for general damages in cases of serious physical injuries which, in their severity and disabling consequences, transcend injury to reputation.” (Footnote omitted.)

We apply these principles in considering the award of damages for loss other than loss of earning capacity in the present case. We bear in mind the general scale of damages awarded for serious personal injury. However, we make it clear that we regard such matters as providing no more than very general guidance. Perhaps it will help if we indicate that by way of general damages for loss other than loss of earning capacity, counsel for the plaintiff sought an award of $500,000. A consideration of the amount awarded in personal injury cases leads us to the conclusion that such an award would be excessive.
We have given some thought to the decision of the High Court in Coyne v Citizen Finance Limited (1991) 172 CLR 211. In that case the plaintiff was a property developer, promoter and marketer. An article published in a daily newspaper attributed fraud to the plaintiff in the conduct of his business. In the words of Toohey J (at 233):
“The publication was therefore seriously defamatory of him in a way that went to his business reputation, as well as his personal reputation, and was therefore likely to have an impact on his capacity to earn.”

It was not a case in which the plaintiff contended for specific financial loss as a result of the defamatory publication. However, it was a case in which the majority of the High Court considered that the jury were entitled to find that the plaintiff had lost income as a result of the publication: Toohey J at 233, McHugh J at 241. It was held that an award of $150,000 by way of damages was not manifestly excessive. We bear that in mind.

In that case the High Court referred also to the use that may be made by a Full Court, in considering an award of damages, of standards that prevail in the State in question. Mason CJ and Deane J, who dissented in the result, said this (at 214):
“A decision by an appellate court that a jury’s award of damages for defamation should not be allowed to stand necessarily involves an element of value judgment. Such a decision may properly be influenced by local community circumstances and standards about which a member of a State or Territory Supreme Court will ordinarily be much better informed than a member of this Court. The question for this Court on an appeal from the Full Court’s decision in such a case is whether the Full Court fell into error in reaching the conclusion that it did. In resolving that question, it is important that this Court give due weight to the views of the local Full Court about the permissible range of damages in the circumstances of a particular case before superimposing its own views. It is also important to identify with some precision the question which arose for the determination of the Full Court.”

Dawson J agreed with the reasons of Toohey J. Toohey J (at 222) referred to the fact that by Western Australian standards the award was “very high”, but went on to hold that the Full Court had erred in setting aside the jury’s award. McHugh J said (at 239-240):

“However, the reasonableness of this jury's verdict is to be determined by the standards which prevail in Western Australia and not by the standards which prevail in New South Wales or, for that matter, any other State of Australia.”

But he went on to say that jury awards were relatively rare in Western Australia, and that being so a Full Court should be “slow to condemn” a jury verdict as unreasonable.

Counsel for the defendant provided the Court with a schedule of awards of damages made for defamation in the States and Territories of Australia. We must say that we find the process of comparison extremely difficult, when allowance is made for the different circumstances of each case, and the limited number of cases that are available to be surveyed. Our impression, and it really is no more than that, is that awards in this State have been relatively modest. We refer to Petersen v Advertiser (1995) 64 SASR 152 where an award of $85,000 was made. My belief is that that was regarded as a substantial award. It pales into insignificance when compared with jury awards in particular, made in other States, but we are by no means sure that much can be made of that sort of comparison.
We have considered the decision of the Court of Appeal of New South Wales in Crampton v Nugawela (1996) 41 NSWLR 176. There the Court of Appeal declined to set aside, as excessive, an award of $600,000 made by a jury in favour of a medical practitioner. By reason of the jury’s verdict the defendant, another medical practitioner, was to be taken to have accused the plaintiff of lying in respect of a matter going to the plaintiff’s professional conduct, and to have persisted in that accusation of a long period and without any justification, for purposes which involved his own self-advancement. It was a case in which it was open to the jury to have included a substantial sum in respect of economic loss. It is this in particular which makes the process of comparison so difficult. However, we do note that Handley JA (at 197) and Giles A-JA at 202 were of the opinion that the jury might have awarded about $278,000 for economic loss, and therefore proceeded on the basis that the award for non-economic loss might have been of the order of $300,000. As well as bearing this figure in mind, we have given careful consideration to the observations made by the members of the Court of Appeal, in particular Mahoney A-CJ, in relation to the assessment of damages in such cases
We are cautious about putting too much weight upon a jury verdict as setting a standard for the assessment of damages by a judge sitting alone. Defamation cases are tried by judge alone in this State. We are also inclined to the view that, to the extent that Crampton v Nugawela sets a standards, it sets a standard which has not prevailed in this State. We are nevertheless influenced by that decision, and by a more general consideration of damages awarded in other cases, to come to the conclusion that it would be appropriate to increase the level of damages awarded in this State for defamation.
We return to the present case. We remind ourselves, first of all, of the purpose of the award of general damages. We bear in mind amounts awarded for pain and suffering in the cases of serious personal injury. We remind ourselves of the general level of awards in this State, but emphasise again that the number of cases is relatively small and does not provide much by way of guidance. We bear in mind, as best we can, the level of awards in other States and in the Territories of Australia. We consider the nature of the injury done, and the importance of the need for vindication as well as consolation for personal distress and hurt. We remind ourselves that the damage to the plaintiff’s reputation was damage of a type to which a person working in the finance industry would be particularly vulnerable, because it was damage to his reputation for honesty.
We consider that the case called for an award by way of general damages of $125,000, as to which for the purposes of calculating interest the amount of say $75,000 might fairly be regarded as applicable to the period before trial, which is the period during which, most damage would have been done to his reputation. It is necessary also to allow for the circumstances of aggravation found by the trial judge. On that basis we would increase the amount awarded to $140,000. We do not regard the aggravation as particularly significant. It is confined to the effect of the pleadings on Mr Chakravarti. We would apportion the whole of that amount to the period before trial.

It follows from this that, in the light of the trial judge’s findings of fact and the imputations found by the High Court, the amount awarded by the trial judge for general damages was manifestly inadequate. The judge awarded $75,000 for both pre trial and post trial components of this head of damage.

Interest

Before dealing with the calculation of interest which it is proper to allow on the judgment as varied, it is necessary to deal with certain matters raised by Mr Gray QC.
He contended that the judgment of the trial judge as varied in whatever manner the Court might think appropriate, having regard to the remitter from the High Court, should speak from the date upon which this Court, that is the Full Court, pronounces its judgment.
Such an approach has obvious consequences with respect to the calculation of those elements of the award which fall to be calculated up to the date of trial, which for this purpose, ordinarily means up to the date upon which judgment following the trial, is pronounced. In effect he was asking the Full Court to reassess the allowance for loss of earning capacity and for general damages up to the date upon which this Court pronounces its judgment, and as well that interest under s31C of the Supreme Court Act be calculated up to the same date.
He sought support for that approach in the judgment of the High Court in Nicol v Allyacht Spars (1988) 165 CLR 306.
In that case the High Court upheld an appeal from the Full Court of the Supreme Court of Queensland which had in turn rejected an appeal by the appellant against the dismissal of his claim for damages against the respondent, that dismissal having been ordered by the judge at first instance.
The judgment of the High Court included an order that directed the entry of judgment for the plaintiff against the defendant for a money amount “together with interest”.
A dispute arose as to the date from which interest should be calculated. The Court held, that although s37 of the Judiciary Act 1903 (Cth) empowered the court to “give such judgment as ought to have been given in the first instance”, that did not mean that the judgment of the High Court should be regarded as speaking from the date upon which the trial judge had made the order of dismissal. Rather, the judgment of the High Court took effect from the date it was pronounced (see HCR O43r3).
Nonetheless the High Court held that under s37 it had power to include an amount of interest as a component of the sum for which judgment was given.
In the course of its decision the High Court referred to the dicta of Lord Buckmaster in Nitrate Producers SS Co Ltd v Short Bros Ltd [1922] All ER 710 at 712:-
“... where judgment is, for the first time, directed to be entered in favour of any litigant party by this House, the date which that judgment will bear must be the date when the order is made. It is, of course, a totally different proposition where the effect of an order in this House is to restore a judgment of the court of first instance which has been reversed by an order of the Court of Appeal. In that case the judgment of the court of first instance is expressly restored and remains standing as from the date when it was given. But, in this case, there was no judgment until the time when it was directed that that judgment should be entered and made.” (Emphasis added.)
After referring to the distinction made by Lord Buckmaster in that passage, the judges of the High Court (Mason CJ, Brennan, Dawson, Toohey, Gaudron JJ) continued (at 311-312):
“The distinction is of importance if regard is had to Gould v Vaggelas (1985) 157 CLR 215. In that case the trial judge, Connolly J, had awarded the plaintiff damages of $1,427,500. On appeal the Full Court of the Supreme Court of Queensland reduced the award to $700,000; on further appeal the High Court restored the judgment of the trial judge. In dealing with the question as to the interest payable on the judgment, the High Court referred to the order of the Full Court that ‘there be interest at the rate of twelve (12) per cent on the judgment sum from date of judgment ...’ and said (157 CLR at 274):
‘The order plainly varies the judgment given by Connolly J by substituting a different sum for the figure set out therein. The ‘date of judgment’ remains 18 September 1981 [the date when Connolly J made his order] and it is from this date that the award of interest at the rate of 12 per cent per annum is to be calculated. That this must be so is demonstrated by the problem that would arise if the order of the Full Court were taken to set a new date of judgment, arguably leaving the original judgment of Connolly J to attract the statutory interest in accordance with s73 of the Act until varied at the later date.’ ”(Our emphasis.)
In this case the effect of the judgment of this Court will be to vary the judgment pronounced by the trial judge so as to increase it substantially. Consistently with the approach sanctioned in Gould v Vaggelas, the judgment as varied will be effective from the date upon which it was originally pronounced by Cox J, that is, from 27April 1995. That it should speak from that date, and be resealed so as to give expression to the variation in the amount of the judgment which will follow upon the order of this Court, is consistent with the practice of this Court in cases where a judgment under appeal is varied.
Furthermore the calculation of all pre judgment elements in the award of damages must be to the date upon which Cox J initially pronounced judgment. That also is consistent with the practice of this Court and avoids the obvious inconvenience which would ensue if in every case when an appeal is brought, there was to be a recalculation of damages to the date upon which the appeal court hears the matter or gives judgment on appeal.
If such a course was to be followed it would not in any event affect the outcome (subject to any variation ordered by the appeal court) as it could only serve to increase the prejudgment allowance and decrease the post judgment allowance by the same amount.
To follow the course which we have indicated is appropriate, will be to Mr Chakravarti’s advantage. This is because the total money judgment pronounced in favour of Mr Chakravarti as varied by order of this Court, dating however from 27 April 1995, will bear interest under the Supreme Court Rules (R84.19) from that date to the date of payment, that rate of interest being slightly in excess of ordinary commercial rates. On the other hand, as to the elements in the assessment which bear pre-judgment interest under s30C of the Supreme Court Act, the elements reflecting non-economic loss bear interest at the rate of 4% and the elements reflecting economic losses bear interest at a commercial rate of interest (see Wheeler v Page (1982) 31 SASR 1, MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657).
The period over which pre-judgment interest falls to be calculated is in the discretion of the Court (Supreme Court Act s30C(2)(b). In this case, we see no reason why the entitlement to interest on the pre-judgment non-economic loss allowance should not run from the date of the publication of the libels. Likewise, the pre-judgment economic loss should be calculated from July 1992, when the plaintiff lost his position with Leal Boss.
As the economic loss accumulates over the relevant period, one half of the full calculation of interest should be allowed. Most of the non-economic loss however, was suffered close to the time of the publication of the libels, so that only a small discount by reference to the accumulating nature of the loss should be made as to that element.
In this case, in our opinion, an appropriate rate of interest to apply to the pre judgment economic loss, namely the allowance for pre-judgment loss of earning capacity of $175,000 is 10 %.

Subject to those comments as to the calculations of interest, a lump sum in lieu of interest should be awarded under s30C(3).
In the result the total award including interest as varied by order of this Court will be:
General Damages
Pre-judgment   90,000
Post-judgment   50,000
Economic Loss
        Pre-judgment   175,000
        Post-judgment   450,000
Interest      31,000
TOTAL JUDGMENT  $796,000
The judgment under appeal should be varied so as to increase the amount awarded to $796,000 inclusive of interest to date of trial.

Further evidence relating to the reassessment of the damages

We have decided that the appeal succeeds and that the Court should reassess Mr Chakravarti’s damages. We have reached a conclusion as to the amount of damages that should be awarded. In Warr v Santos [1973] 1 NSWLR 432 the Court of Appeal of the Supreme Court of New South Wales held that if a court on appeal reassesses damages awarded by a trial judge, the court may more readily admit further evidence bearing upon the assessment of damages than it would if the further evidence were put forward as a basis for interfering with a judgment that is otherwise unimpeachable. The logic of the reasoning is that if the court has decided that in any event the damages are inadequate, and proceeds to reassess the damages instead of ordering a new trial on the issue of damages, the court should more readily admit further evidence because, in the event of a new trial, all relevant evidence could be presented.
In the present case neither party suggested that there should be a new trial on damages. In our opinion the starting position remains that the court reassesses the damages on the evidence at trial. We accept that the court may more readily admit further evidence if it has decided that damages should be reassessed, and has so decided without having to rely upon further evidence. But we consider that the public interest in the finality of litigation requires that even in such a case there should be good reason before the court re-opens issues dealt with at the trial. If an issue is re-opened, justice would require that each party be permitted to present evidence bearing on that issue. This seems to have been the approach taken in Warr v Santos.
The only reason for admitting the evidence in the present case is that it will, if ultimately accepted, remove an element of uncertainty with which the trial judge had to deal in assessing damages for future loss of earning capacity. The evidence does not falsify any assumption upon which the case proceeded. It does not disclose events that the trial judge could not have contemplated as a possibility, or even as a probability. The evidence is not required to complete the picture in relation to other evidence which the court should admit in support of the appeal.
In the exercise of our discretion, we are not persuaded that the issue of Mr Chakravarti’s employment prospects after the time of the trial should be re-opened as part of the reassessment of the damages.

Conclusions

It follows that, in our opinion, the plaintiff’s cross-appeal against the award of general damages should be allowed. Even had the plaintiff not been permitted to amend his Notice of Cross-Appeal, it would have been necessary for this Court to increase the amount awarded by way of general damages. In light of the amendment allowed, the Court should now simply substitute what it considers to be the appropriate amount by way of damages, the Court having concluded that the judge’s overall award was manifestly inadequate. The judgment of the trial judge should be varied to provide for an award of damages to the plaintiff in the sum of $796,000 inclusive of interest to 27 April 1995.
The defendant’s appeal against the assessment of damages for “special damages” must be dismissed.

WILLIAMS J. I concur.

[1998] SASC 6901

14 October 1998