Channel Seven Sydney Pty Ltd v Mahommed - [2010] NSWCA 335

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335

HEARING DATE(S): 5 March 2010

JUDGMENT DATE:
7 December 2010

JUDGMENT OF: Spigelman CJ at 1; Beazley JA at 2; McColl JA at 11; McClellan CJ at CL at 282; Bergin CJ in Eq at 283

DECISION: 1. Appeal allowed in part. 2. Set aside order 3 below, and in lieu thereof verdict for the respondent in respect of the third publication (the programme) of $125,000. 3. Direct the parties to calculate interest on the revised damages in accordance with these reasons and file short minutes of order setting out the substituted judgment within seven days of these reasons. 4. Reserve the costs of the appeal and the trial. 5. (a) Appellant to file and serve written submissions limited to five pages in length concerning costs (in this Court and at trial) within seven days; (b) respondent to file and serve written submissions also limited to five pages in length concerning such costs within 14 days.
[The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

CATCHWORDS: DEFAMATION – defences – substantial truth – whether necessary to prove each element of imputation a matter of substantial truth – whether element a material part of the imputation – whether sting of imputation proven to be a matter of substantial truth – Defamation Act 1974 (NSW), s 15 - DEFAMATION – defences – contextual truth – whether by reason of the substantial truth of one imputation remaining imputations did not further injure reputation – Defamation Act 1974 (NSW), s 16 - DEFAMATION – damages – mitigation of damages – evidence of bad reputation – identification of scope of reputation capable of being harmed by imputations – whether evidence of bad reputation goes to relevant sector of reputation - DEFAMATION – damages – mitigation of damages – evidence of bad reputation – post-publication evidence of bad reputation – correctness of Rochfort v John Fairfax & Sons Pty Ltd [1972] 1 NSWLR 16 - DEFAMATION – damages – mitigation of damages – bad reputation – use of judicial findings made in other civil proceedings - DEFAMATION – damages – mitigation of damages – bad reputation – use of evidence properly before the court on some other issue - DEFAMATION – damages – continuing nature of damages for injury to reputation and hurt to feelings - DEFAMATION – damages – where separate publications – assessment of amount to be awarded - DEFAMATION – damages – whether damages excessive

LEGISLATION CITED: Defamation Act 1974 (NSW)
Evidence Act 1995 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

CATEGORY: Principal judgment

CASES CITED: Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167
Ainsworth v Burden [2005] NSWCA 174
Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9
Aktas v Westpac Banking Corporation Ltd [2010] HCA 25; (2010) 84 ALJR 551
Allen v John Fairfax & Sons Ltd (Supreme Court of New South Wales, Hunt J, 2 December 1988, unreported; BC8801264
Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419
Anderson v Ah Kit [2004] WASC 194
Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225
Associated Newspapers Ltd v Dingle [1964] AC 371
Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430
Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175
Barber v Pigden [1937] 1 KB 664
Birchwood Homes Ltd v Robertson [2003] EWHC 293 (QB)
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Broome v Cassell & Co Ltd [1972] AC 1027
Burstein v Times Newspapers Ltd [2001] 1 WLR 579
Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44
Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211
Crampton v Nugawela (1996) 41 NSWLR 176
Dow Jones & Company Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575
Fawcett v John Fairfax Publications Pty Ltd [2008] NSWSC 139
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504
Goody v Odhams Press Ltd [1967] 1 QB 333
Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877
Habib v Nationwide News Pty Ltd [2010] NSWCA 34
Habib v Nationwide News Pty Ltd [2010] NSWSC 924
Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26
Hayward v Thompson [1982] 1 QB 47
Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1
Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1
Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416
John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131
John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; (2001) 53 NSWLR 541
John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205
John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227
Kaschke v Gray [2010] EWHC 1907 (QB)
Li v The Herald & Weekly Times Pty Ltd [2007] VSC 109
Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213
Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631
McBride v Walton [1994] NSWCA 199
McCrohon v Harith [2010] NSWCA 67
McDonald v Coles Myer Ltd (1995) Aust Torts Reports 81-361
Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312
Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643
Moit v Bristow [2005] NSWCA 322
Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
Myer Stores Ltd v Soo [1991] 2 VR 597
Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382
O’Hagan v Nationwide News Pty Ltd [2001] NSWCA 302; (2001) 53 NSWLR 89
Pamplin v Express Newspapers Ltd [1988] 1 WLR 116
Plato Films Ltd v Speidel [1961] AC 1090
Polly Peck (Holdings) Plc v Trelford [1986] QB 1000
Praed v Graham (1889) 24 QBD 53
Rath v Guardian News and Media Ltd [2008] EWHC 398 (QB)
Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16
Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327
Roux v Australian Broadcasting Commission [1992] 2 VR 577
Sadler & State of Victoria v Madigan [1998] VSCA 53
Scott v Sampson (1882) 8 QBD 491
Societe D'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”) (1924) 20 Ll L Rep 140
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306
Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348
Steele-Smith v Liberty Financial Pty Ltd [2005] NSWSC 398
Sutherland v Stopes [1925] AC 47
Television New Zealand Ltd v Ah Koy [2002] 2 NZLR 616
Television New Zealand Ltd v Prebble [1993] 3 NZLR 513
Television New Zealand Ltd v Quinn [1996] 3 NZLR 24
Tesco Stores Ltd v Guardian News & Media Ltd [2008] EWHC B14 (QB); [2009] EMLR 5
The Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254
Tipple v Buchanan [2005] BCL 715 (High Court of New Zealand, Panckhurst J, 20 July 2005)
Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497
Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469
Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118
Waterhouse v Broadcasting Station 2UE Pty Ltd [1985] 1 NSWLR 58
Walter v Alltools Ltd (1944) 61 TLR 39
Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331
West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387
Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028

TEXTS CITED: D K Allen et al, Damages in Tort (2000) Sweet & Maxwell
Fleming, The Law of Torts, 9th ed (1998) LBC Information Services
Gatley on Libel and Slander, 9th ed (1998) Sweet & Maxwell
Gatley on Libel and Slander, 10th ed (2004) Sweet & Maxwell
Gatley on Libel and Slander, 11th ed (2008) Sweet & Maxwell
D Ipp, "Problems with Fact-Finding" (2006) Australian Law Journal 667
A Kenyon Defamation: Comparative Law and Practice (2006) UCL Press
McGregor on Damages, 18th ed (2009) Sweet & Maxwell

PARTIES: Channel Seven Sydney Pty Ltd - Appellant
Peter Mahommed - Respondent

FILE NUMBER(S): CA 2009/298341

COUNSEL: KP Smark SC - Appellant
C A Evatt with RKM Rasmussen and MK Rollinson - Respondent

SOLICITORS: Mallesons Stephen Jaques - Appellant
Michael Corrigan Lawyers - Respondent

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 2005/20064

LOWER COURT JUDICIAL OFFICER: Kirby J

LOWER COURT DATE OF DECISION: 9 July 2009

LOWER COURT MEDIUM NEUTRAL CITATION: [2009] NSWSC 631

2009/298341

Spigelman CJ
Beazley JA
McColl JA
McClellan CJ at CL
Bergin CJ in Eq
Tuesday 7 December 2010

Channel Seven Sydney Pty Ltd v Mahommed

Headnote

[This headnote is not to be read as part of the judgment]

On 29 June 2004, the appellant broadcast an episode of its current affairs programme, “Today Tonight” featuring a story about the respondent. Its basic theme was that the respondent, who was described as a “financial adviser” and “mortgage broker”, had taken advantage of an elderly pensioner suffering from dementia and arranged borrowings on the security of her properties, and then transferred money to himself. The story was preceded by two promotional broadcasts screened between 22 and 29 June 2004.

The respondent commenced defamation proceedings against the appellant in relation to the two promotional broadcasts and the programme itself.

A jury empanelled pursuant to s 7A, Defamation Act 1974 (NSW) found 12 defamatory imputations were conveyed by the three publications. In accordance with s 7A(4), Defamation Act , the issues of any defences and damages were tried by a judge. No defences were pleaded to the six imputations conveyed by the promotional broadcasts. A defence of substantial truth was pleaded to imputations 11 (“the plaintiff charged Doreen Smith outrageous fees”) and 12 (“the plaintiff was a dishonest financial advisor and mortgage broker”) conveyed by the programme. The defence of contextual truth was pleaded in relation to the remaining imputations conveyed by the programme as published in New South Wales with the appellant pleading back the two imputations it had pleaded were substantially true and adding a further three contextual imputations.

The appellant sought to mitigate any damages awarded to the respondent by proving he was of bad reputation by reason of adverse findings Palmer J made about him in a judgment delivered after the publication of the matters complained of. It also sought to rely upon the dishonesty of the respondent established at trial in mitigation of damages in respect of all the publications and imputations.

The primary judge held the appellant had not established any of its defences. Insofar as imputation 12 was concerned, he held the appellant had to prove the respondent was both a dishonest financial adviser and a dishonest mortgage broker. As the appellant failed to prove the respondent was a financial adviser, the appellant failed to prove imputation 12 was substantially true. His Honour held he was bound by Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 to reject the case of mitigation by reason of bad reputation the appellant sought to advance based on Palmer J’s findings. In relation to mitigation based on dishonesty proved at trial, his Honour held his findings adverse to the respondent were more directly relevant to imputations 11 and 12, especially 12 – they going to dishonesty in the sense of truthfulness – than other imputations suggesting dishonesty in the sense of stealing. He also concluded that there was a substantial gulf between the dishonesty described by the matters complained of and the dishonesty proved in mitigation.

His Honour awarded the respondent $240,000 in damages – $50,000 for each promotional broadcast and $140,000 for the programme.

The appellant sought leave to argue Rochfort was wrongly decided, and also appealed against his Honour’s decision on the defences, other aspects of mitigation of damages and quantum.

Rochfort

Held, per McColl JA (Spigelman CJ, Beazley JA, McClellan CJ at CL and Bergin CJ in Eq agreeing), allowing the appeal in part, setting aside order 3 and in lieu awarding the respondent $125,000 in respect of the programme:

In relation to (1):

1 The primary judge erred in holding that the appellant failed to prove the substantial truth of imputation 12. The sting of imputation 12 was that the respondent had acted dishonestly in his capacity as a mortgage broker. The statement that he had identified himself as “a financial adviser” was not a material part of imputation 12: (at [142] - [143]).

Howden v Truth & Sportsman Ltd

Li v The Herald & Weekly Times Pty Ltd

Herald & Weekly Times Ltd v Popovic

Sutherland v Stopes

Australian Broadcasting Commission v McBride

2 The primary judge’s factual findings provided a sufficient basis upon which this Court could find that the appellant established the substantial truth of imputation 12: (at [144]).

In relation to (2):

3 While the imputation that the respondent was a “dishonest financial adviser and mortgage broker” was a grave allegation, it could not be said that by reason of its substantial truth, imputations 7 – 10 (each of which made a substantive allegation either of, or bordering on, a crime) did not further injure the respondent’s reputation: (at [145]).

4 Imputation 11 conveyed a lesser sting than imputation 12 – which expressly labelled the respondent as a dishonest person – and would not further injure the respondent’s reputation having regard to the substantial truth of imputation 12: (at [146]).

Allen v John Fairfax & Sons Ltd

John Fairfax Publications Pty Ltd v Jones

; John Fairfax Publications Pty Ltd v Blake

Whelan v John Fairfax Publications Pty Ltd

Fawcett v John Fairfax Publications Pty Ltd

In relation to (3)

5 It was for the judge to determine what the relevant sector of the respondent’s reputation was by identifying the scope of the respondent’s reputation capable of being harmed by the imputations. That is a fact-dependent exercise, requiring careful analysis of the matter complained of, not the mechanistic application of hypothetical illustrations: (at [183] – [184]).

Plato Films Ltd v Speidel

Morosi v Mirror Newspapers Ltd

Australian Broadcasting Commission v McBride

Television New Zealand Ltd v Prebble

O’Hagan v Nationwide News Pty Ltd

6 The primary judge did not err in characterising, and distinguishing, the relevant sectors of the respondent’s reputation for the purposes of mitigation as being that of a person who was a thief (imputations 1 – 10) and a person who lied (imputations 11 – 12): (at [186]).

In relation to (4)

7 The statement in Rochfort that the reputation of a plaintiff that might be put in issue in defamation proceedings is limited to the plaintiff’s reputation as accumulated from one source or another over the period of time that precedes the occasion of the libel that is in suit formed part of the ratio of that decision, and is binding on this Court to preclude evidence adverse to the respondent’s reputation which came into existence following the publication of the matters complained of: (at [202]).

Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 considered

Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430 applied

8 It is open to the Court to conclude that Rochfort was plainly or clearly wrong, and hence to overrule it, if it has a strong conviction to that effect and if the nature of the error can be demonstrated with a degree of clarity by the application of correct legal analysis: (at [202]).

Gett v Tabet

9 Damages in defamation proceedings, insofar as they act to provide solace to the plaintiff for injury to his/her reputation and hurt to his/her feelings, can address harm that occurs after publication. Damages for the injury to feelings and reputation caused by the publication of defamatory material must be assessed on their facts. It will not always be the case that injury of this sort will end or even lessen as time passes: (at [220], [236]).

Broome v Cassell & Co Ltd

Praed v Graham

The Herald & Weekly Times Ltd v McGregor

Triggell v Pheeney

Ainsworth v Burden

Habib v Nationwide News Pty Ltd

Broome v Cassell & Co Ltd

Coyne v Citizen Finance Ltd

Greig v WIN Television NSW Pty Ltd

Aktas v Westpac Banking Corporation Ltd

Mirror Newspapers Ltd v Fitzpatrick

Australian Consolidated Press v Driscoll

Amalgamated Television Services Pty Ltd v Marsden

was wrongly decided. It did not recognise the continuing nature of damage in a defamation action and is not consistent with the developments in principles governing damages requiring the court to consider actual facts at the time it assesses damages: (at [254] – [255]).

Australian Broadcasting Commission v McBride

Middendorp Electric Co Pty Ltd v Sonneveld

Television New Zealand Ltd v Quinn

Television New Zealand Ltd v Ah Koy

Tipple v Buchanan

Nationwide News Pty Ltd v El-Azzi

McCrohon v Harith

Walter v Alltools Ltd

Myer Stores Ltd v Soo

Sadler & State of Victoria v Madigan

Rochfort v John Fairfax & Sons Ltd

11 Evidence of post-publication material that goes to a plaintiff’s reputation should be admissible to ensure that the damages awarded accurately reflect the plaintiff’s reputation at the time the damages are awarded. Its admission should be approached with caution and must be carefully confined in the same sense as reputation evidence is now confined: (at [245])

12 Judicial findings, even if made post-publication, if relevant in the sense discussed, should be admissible in mitigation of damages, as they take place in open court and can be regarded, accordingly, as matters of public knowledge. The tribunal of fact should not be kept in the dark about the plaintiff’s reputation at the time it comes to consider the award of damages: (at [253])

Goody v Odhams Press Ltd

Amalgamated Television Services Pty Ltd v Marsden

In relation to (5)

13 Palmer J’s adverse findings should have been admitted at trial to the extent they were relevant to the relevant sector of the respondent’s reputation. Had the primary judge admitted those findings, it was open to him to assess their influence on the respondent’s reputation in the light of his findings and form the conclusion that they would not substantially affect his assessment of damages. To the extent it might be thought those findings and the primary judge’s adverse findings were substantially to the same effect, the fact two judges had reached the same conclusion could not increase the mitigatory effect of those findings: (at [256] - [260]).

In relation to (6)

14 The primary judge’s characterisation of the seriousness of the evidence of bad reputation adduced in mitigation of damages would have to be demonstrably wrong for this Court to set it aside. The appellant did not demonstrate any such error on his Honour’s part in this respect: (at [272]).

Rogers v Nationwide News Pty Ltd

Hobbs v CT Tinling & Co Ltd

15 It was a matter for the trial judge whether he awarded damages separately or en bloc for the imputations arising from the three matters complained of: (at [237])

Hayward v Thompson

Barber v Pigden

16 It could not be said that the amount awarded for the first two matters complained of was such that no reasonable judge could have awarded it: (at [268], [273]).

Rogers v Nationwide News Pty Ltd

Carson v John Fairfax & Sons Ltd; Carson v Slee

Webb v Bloch

Crampton v Nugawela

Moit v Bristow

17 The award of damages in relation imputations 7 – 10 conveyed the programme should be reassessed in the amount of $125,000: (at [277]).

Orders

1 Appeal allowed in part.

2 Set aside order 3 below, and in lieu thereof verdict for the respondent in respect of the third publication (the programme) of $125,000.

3 Direct the parties to calculate interest on the revised damages in accordance with these reasons and file short minutes of order setting out the substituted judgment within seven days of these reasons.

4 Reserve the costs of the appeal and the trial.

(b) respondent to file and serve written submissions also limited to five pages in length concerning such costs within 14 days.

**********

2009/298341

SPIGELMAN CJ
BEAZLEY JA
McCOLL JA
McCLELLAN CJ at CL
BERGIN CJ in EQ

Tuesday 7 December 2010

Channel Seven Sydney Pty Ltd v Mahommed

Judgment

Para

Statement of the case
12

Statutory framework
24

The matters complained of
25

FINDINGS OF THE PRIMARY JUDGE: BACKGROUND FACTS
27

The central characters
29

(a) The respondent
29

(b) Ms Smith
32

(c) Mr Trevor Steele
39

(d) Mr Tony Steele
40

The Liberty Financial transactions
47

The Steele-Smith proceedings
54

FINDINGS OF THE PRIMARY JUDGE: DEFENCES
57

Overview
57

The primary judgment: substantial truth of imputation 12
61

The primary judgment: contextual imputations
70

FINDINGS OF THE PRIMARY JUDGE: DAMAGES
75

Overview
75

The primary judgment: mitigation
81

(a) Dishonesty at trial
82

Use of the adverse trial findings
83

Sector identification
87

(b) Adverse findings in the Steele-Smith proceedings
97

Quantifying damages
101

ISSUES ON APPEAL
110

SUBMISSIONS
111

The appellant: substantial/contextual truth
112

The appellant: mitigation
116

The appellant: overruling Rochfort
121

The appellant: the Steele-Smith adverse findings
126

The appellant: damages
129

The respondent: substantial/contextual truth
130

The respondent: mitigation
132

The respondent: overruling Rochfort
133

The respondent: damages
137

CONSIDERATION
138

Substantial truth/contextual truth
138

DAMAGES
148

Mitigation: identification of sector of reputation
162

Mitigation: reception of Steele-Smith adverse findings; correctness of Rochfort
188

The decision in Rochfort
192

Rochfort – other authorities
203

New Zealand authorities: post-publication reputation
209

Use of post-publication material in defamation proceedings
214

The continuing nature of damages for defamation
219

(a) Theoretical basis for the award of interest
224

(b) Hurt to feelings caused by reaction of others post-publication
235

Conclusion on continuing nature of damages
236

False imprisonment cases
238

Analogy with common law principles
243

Whether judicial findings are analogous to convictions
249

Rochfort: conclusion
256

Admission of the Steele-Smith adverse findings: practical implications
257

Burstein v Times Newspapers Ltd [2001] 1 WLR 579
262

Damages
267

Orders
281

1 Spigelman CJ: Subject to the additional observations of Beazley JA, with which I agree, I agree with the judgment of McColl JA.

2 Beazley JA: I agree with the reasons and orders proposed by McColl JA and wish to add only the following short comment in respect of the use of judicial findings relating to a person who has been defamed.

3 As McColl JA has rightly pointed out, at [253], there are self-evident distinctions between a criminal conviction and judicial findings, including the difference in the standard of proof. Her Honour also refers, appropriately, to another possible distinction, namely, the question whether findings are of an intermediate or final nature.

4 A criminal conviction, by its nature, is an ultimate finding, not only of wrongdoing but of wrongdoing which constitutes a crime. Its strength lies both in the nature of the crime and in the standard of proof that applies in the finding of guilt. Its use as evidence of reputation, in the sense explained by McColl JA, is understandable.

5 Findings in a civil case, both of intermediate facts, including credit findings, and of ultimate facts, are made on the civil standard. Even within the civil standard, the degree of satisfaction that a court must have before reaching a conclusion varies, depending upon the seriousness of the matter in issue. Fraud is the classic example: see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. That a finding is made on the civil standard, whether on a Briginshaw basis or not, does not diminish the cogency of such a finding. There is, however, a significant difference in a finding made on the civil standard from a finding made on the criminal standard.

6 So far as questions of reputation are concerned, a demeanour-based credit finding, may be problematic. Although credit findings are an integral part of the fact finding function of a trial judge, a demeanour-based credit finding, which is often critical in the determination of a case, is far from scientific. It is a finding based upon the experience of the trial judge having seen and heard the individual in person: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [65]; see also Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at [178]. Ipp JA, in “Problems with Fact-Finding” (2006) 80 Australian Law Journal 667, said that a demeanour-based finding is “determined by a judge’s subjective experience, intuition and common sense”.

7 It is unremarkable to observe, therefore, that a demeanour-based credit finding in respect of an individual may vary as between judges. This is undoubtedly why Atkin LJ observed in Societe D'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”) (1924) 20 Ll L Rep 140 at 152:

“… I think that one ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of the evidence with known facts, is worth pounds of demeanour.”

8 The problematic nature of a demeanour-based credit finding was examined by Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306. His Honour stated, at [88]:

“There is a growing understanding, both by trial judges and appellate courts, of the fallibility of judicial evaluation of credibility from the appearance and demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the courtroom … Apart from all else, demeanour is, in part, driven by culture … Distaste or prejudice can cloud evaluation …”

9 A credit finding can be devastating, both personally upon the individual whose credit has been impugned, and in respect of that person’s reputation. Hence the importance, where available, of confirmatory or corroborative evidence to assist or support a demeanour finding.

10 As McColl JA has pointed out, the differences between a criminal conviction and findings in a civil proceeding and, I would add, the effect of those differences on the reputational use that ought to be made of such findings, were not debated on appeal. Accordingly, whilst I agree that findings made in other proceedings which, by virtue of the publication of a judgment are in the public domain, may be used by a defendant in defamation proceedings in respect of reputation, the nature of the effect which may be given to such findings, particularly if they involve a demeanour-based credit finding, will require careful consideration.

: The appellant, Channel Seven Sydney Pty Ltd, appeals from a decision of Kirby J determining issues of defences and damages under the Defamation Act 1974 (NSW) in favour of the respondent, Mr Peter Mahommed and awarding him $240,000 damages, interest and costs: Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631.

Statement of the case

12 On 29 June 2004, the appellant broadcast an episode of its current affairs programme, “Today Tonight” featuring a story about the respondent. The subject matter of the episode was dealings between the respondent, said to be a financial adviser and mortgage broker, and Doreen Smith, said to be an elderly pensioner suffering from dementia. Its basic theme was that, taking advantage of Ms Smith’s dementia, the respondent had arranged borrowings on the security of her properties, and had then transferred money to himself. The story was preceded by two promotional broadcasts screened between 22 and 29 June 2004.

13 The respondent commenced defamation proceedings against the appellant on 18 March 2005 in relation to the two promotional broadcasts and the programme itself. The matter has a somewhat complicated procedural history. It is sufficient to say that following a retrial ordered by this Court (see Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213), a jury empanelled pursuant to s 7A(3) of the Defamation Act found that the three publications carried the following twelve imputations and that each was defamatory of the respondent:

Promotion from 22 to 29 June 2004

1. The Plaintiff is a thief.

2. The Plaintiff ripped off $1 million from a dementia patient.

3. The Plaintiff took advantage of a dementia patient and took everything she had.

Promotion – 28 June 2004

4. The Plaintiff ripped off $1 million from a dementia patient.

5. The Plaintiff kept stealing money from a dementia patient.

6. Because of his dealings with a dementia patient the Plaintiff deserved to spend a lot of time in gaol.

Programme – 29 June 2004

7. The Plaintiff ripped off $1 million from a dementia patient.

8. The Plaintiff took advantage of a dementia patient and took everything she had.

9. The Plaintiff swindled Doreen Smith.

10. The Plaintiff is a thief.

11. The Plaintiff charged Doreen Smith outrageous fees.

12. The Plaintiff is a dishonest financial adviser and mortgage broker.

14 In accordance with s 7A(4) of the Defamation Act, defences and damages were then tried before the primary judge. The appellant did not plead any defence to the imputations conveyed by the promotional broadcasts (imputations 1 - 6). It pleaded a defence of substantial truth and public interest in relation to imputations 11 and 12: s 15, Defamation Act.

15 The appellant also pleaded the defence of contextual truth in respect of the imputations conveyed by the programme as published in New South Wales: s 16, Defamation Act. It pleaded back the two imputations that it had pleaded were substantially true, and added a further three, so that the contextual imputations relied upon were:

Contextual imputations

13. The Plaintiff charged Doreen Smith outrageous fees. (Also imputation 11.)

14. The Plaintiff is a dishonest financial adviser and mortgage broker. (Also imputation 12.)

15. The Plaintiff had, in his business of financial adviser and mortgage broker, knowingly taken advantage of a man he knew to be significantly disabled.

16. The Plaintiff took advantage of Doreen Smith by exploiting her age and infirm state to secure payments for his company.

17. The Plaintiff was unfit to be a financial adviser or mortgage broker.

16 The respondent conceded that if the appellant could prove either imputation 11 or 12 was substantially true, each related to a matter of public interest: primary judgment (at [6]).

17 The appellant did not plead contextual truth to the publication of the programme outside New South Wales and acknowledged that, for States other than New South Wales, the respondent must get a verdict in respect of imputations 7 to 10 (at [9]).

18 The appellant sought to mitigate the damages awarded to the respondent by proving he was of bad reputation.

19 The primary judge held the appellant had not established that any of imputations 11 (also imputation 13), 12 (also imputation 14), or 15 – 17 was substantially true and, accordingly, its s 15 and s 16 defences failed. The appellant only challenges his Honour’s conclusion in relation to imputation 12.

20 Insofar as mitigation was concerned, his Honour held he was bound by the Court of Appeal’s decision in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 to reject the case on bad reputation the appellant sought to advance based on adverse findings Palmer J made about the respondent after the publication of the matters complained of: see Steele-Smith v Liberty Financial Pty Ltd [2005] NSWSC 398 (the “Steele-Smith proceedings”).

21 The notice of appeal sought leave to argue that Rochfort was wrongly decided. A Court constituted by five judges of appeal accordingly heard the appeal.

22 The appellant also complains the award of $240,000 was excessive.

23 An underlying premise of the appellant’s submission that Rochfort was wrongly decided was that the harm which flowed from a defamatory publication was of a continuing nature, running at least from publication to trial. The respondent contested that proposition, submitting that defamation caused “a once and for all” harm at the point of publication. He submitted that decisions holding, or assuming to the contrary, were wrongly decided and this Court ought to depart from them. He sought leave, in those circumstances, to argue that the following cases which are representative of such decisions were wrongly decided:

Interest, other than in relation to damages awarded for vindication

John Fairfax & Sons v Kelly (1987) 8 NSWLR 131, per McHugh JA at 143B-143D (with whom Kirby P agreed on this point: see at 133A-B);
Marsden [2002] NSWCA at [1544]-[1547], [1555]; see also Kelly at first instance per Hunt J: Kelly v John Fairfax (1985) 1 NSWLR 462;
Australian Consolidated Press v Driscoll (1988) Aust Torts Report ¶80 175, per Mahoney JA.
(b) Hurt to feelings caused by reaction of other after publication:
Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643, per Samuels JA at 655G-656A, 657C”.

Statutory framework

24 The following provisions of the Defamation Act are relevant:

15 Truth generally

(1) Notwithstanding section 11, the truth of any imputation complained of is not a defence as to that imputation except as mentioned in this section.

(2) It is a defence as to any imputation complained of that:

(a) the imputation is a matter of substantial truth, and

(b) the imputation either relates to a matter of public interest or is published under qualified privilege.

16 Truth: contextual imputations

(1) Where an imputation complained of is made by the publication of any report, article, letter, note, picture, oral utterance or other thing and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of.

(2) It is a defence to any imputation complained of that:

(b) one or more imputations contextual to the imputation complained of:

(i) relate to a matter of public interest or are published under qualified privilege, and

(c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff.

46A Factors relevant in damages assessment

(1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded.

(2) In determining the amount of damages for non-economic loss to be awarded in any proceedings for defamation, the court is to take into consideration the general range of damages for non-economic loss in personal injury awards in the State (including awards made under, or in accordance with, any statute regulating the award of any such damages).

47 Truth or falsity of imputation

On the question of the amount of damages where it is relevant to that question that the imputation complained of was or was not true or a matter of substantial truth:

(b) evidence as to whether the imputation was or was not true or a matter of substantial truth may be adduced by any party (whether or not evidence on the subject is adduced by any other party).”

The matters complained of

25 The primary judge described the matters complained of, without complaint by either party, in the following terms (references to exhibits omitted):

‘V/O:

She kept forgetting, so this mortgage broker took everything she had.

Where’s her money?’

13 The second promotional broadcast was screened only [sic, on] 28 June 2004, that is, the day before the broadcast. It was as follows:

‘NAOMI ROBSON:

Now to tomorrow night and the million dollar dementia patient rip off. Her condition meant she kept forgetting so her mortgage broker kept stealing her money.

She has dementia mate. She can’t work.

DOREEN SMITH:

I’m just a nervous wreck. I can’t sleep.

TREVOR STEELE:

He has robbed her blind.

DAVID RICHARDSON:

Where’s the money?

PETER MAHOMMED:

What money?

DAVID RICHARDSON:

Where’s her money?

TREVOR STEELE:

I’d like to see him spend a lot of time in gaol.

DAVID RICHARDSON:

Nice car. Did she pay for that?

NAOMI ROBSON:

And I’ll have that story for you tomorrow night so until then I hope you have a great evening. Please take care and good night.’

15 The programme screened on 29 June 2004 incorporated the opening words of the first promotion, namely:

Also tonight: Stolen, stolen, stolen. It’s the million dollar rip off of a dementia patient, she kept forgetting, so this mortgage broker took everything she had.’

Nice car, did she pay for that?’

‘Now to the story of a sick woman who may lose her home and could lose a lifetime of assets all because of her dealings with a mortgage broker. Doreen Smith suffers from dementia, an illness her mortgage broker seized upon and he’s been able to swindle a forgetful Doreen out of everything she owns. David Richardson investigates.’

Peter Mahommed, David Richardson from Today Tonight. Can we ask some questions about some rather dubious mortgages you’ve set up for Doreen Smith and her illiterate son, Tony.

Oh, is that right, is it?

DAVID RICHARDSON:

Yeah.

PETER MAHOMMED:

Well, I think you’ve got all that wrong.’

‘DAVID RICHARDSON:

Really? He calls himself a financial adviser and mortgage broker, but Peter Mahommed’s so-called advice has seen an elderly woman lose everything. Where’s her money? She’s lost all of her properties because of you sir.

She hasn’t.

DAVID RICHARDSON:

Yes she has.’

I don’t know what I’m doing. That’s where I live all day, every day of my life other than the doctors I live there.

And this is his victim, 77 year old Doreen Smith, a pensioner suffering depression and dementia, now on the verge of losing the family home.

I didn’t know what I was doing. I didn’t know what I was doing, I was in another world.’

‘TREVOR STEELE:

She wanted to buy Christmas presents for people, and had she come to me I would have gave her the money.

But you didn’t know?

TREVOR STEELE:

I didn’t know, I had no idea.’

Mahommed listed Doreen as a sales manager for a company called Country Power Newspapers earning $38,000 a year.

My mother is receiving, in receipt of a war veteran’s pension and is not a sales manager.’

Son Trevor should know. He registered the name Country Power Newspapers, but it’s never got off the ground. It was never an operating business. The address for the so-called company is a derelict office on the first floor of a shopping arcade, and it wasn’t just one loan.’

How much all up did she borrow?

TREVOR STEELE:

Between $800,000 and $1.2 million.

DAVID RICHARDSON:

You’re kidding?

TREVOR STEELE:

No I’m not kidding. I’ve seen the documentation in relation to this.’

The money come through from Liberty, whether it was 80, or 100, or $150,000. Three minutes later he had tran – money transferred to his own personal account.

Bank documents showed large sums of money being transferred directly to Mahommed’s account. He says they were for outstanding fees.’

Did Peter Mahommed tell you not to tell Trevor?

DOREEN SMITH:

He told me not to tell anybody.’

Remember Doreen has a mental illness. Her doctor of 20 years told us she is not capable of making business decisions, nor is her other son, a housebound schizophrenic, who was also signed up by Peter Mahommed for a business loan.

He’s illiterate. He can’t read or write.

DAVID RICHARDSON:

Again the money was provided by Liberty Financial. No-one in this story seems to know where all the cash has gone.’

... The company claims it has bank documents proving Doreen was earning a whopping $185,000 a year, but that makes you wonder, if she was earning that much why she needed a loan at all.’

Of all the cases that I’ve seen involving mortgage brokers and money lenders, this strikes me as one of the absolute worst.

Lawyer and executive director of the Consumer Law Centre, Chris Field, agreed to examine Doreen’s mortgage documents for Today Tonight.

They’ve been introduced to a broker and a money lender, and they’ve gone from a position of comfort to potentially the poor house.’

What about the withdrawals? The money goes into her account, $20,000 here, $25,000 to you.

You see you need to check your facts.

DAVID RICHARDSON:

I have checked my facts.

PETER MAHOMMED:

Well you haven’t -

CHRIS FIELD:

It’s cases like this that show you just what can go wrong in the mortgage broking industry and one of the reasons why things can go wrong is because mortgage brokers aren’t licensed and not effectively regulated, and it’s high time that occurred.”

26 Although the respondent was not named in the first and second promotions, his image was shown on the screen. The appellant accepted that he was identified in both (see [341], [344]).

FINDINGS OF THE PRIMARY JUDGE: BACKGROUND FACTS

27 The appellant does not challenge any of the primary judge’s factual findings.

28 The primary judge considered the background of the respondent (at [35] - [40]), his clients, Ms Smith and her son Trevor Steele (at [47] - [59]), and Liberty Financial Pty Ltd (“Liberty Financial”), the company through which the respondent organised loans for Ms Smith and Mr Tony Steele (at [41] - [46]). His Honour then set out his findings of fact as to the dealings between the respondent and the Smith-Steele family (at [61] - [203]). I will set out the gist of the material which sets the context for his Honour’s consideration of the defences, the issue of mitigation and damages.

The central characters

(a) The respondent

29 The respondent had started his employment life in retail then moved into superannuation before becoming a mortgage broker in 1989. He did not require qualifications for that work which involved introducing a client to a lender to arrange a loan (see [35] - [37]). He was not a financial adviser (at [38]), being “someone who is licensed to give financial advice” (at [39]).

30 In 2002 the respondent’s company, Vestecorp Financial Services Pty Limited (“Vestecorp”), entered a Standard Introducer Agreement with Liberty Financial clause 1.3 of which provided:

or is reasonably likely to be, declined by a lenders mortgage insurer

31 As the primary judge explained (at [46]) Liberty Financial’s “loans were referred to as ‘low doc’ loans [which the respondent] explained…meant:

(b) Ms Smith

32 Turning to the other subjects of the matters complained of, it is of some significance to note that Ms Smith (also known as Mrs Steele-Smith) had what his Honour, rather understatedly, described (at [47]) as “a colourful past”. She was born in 1928. She had a history of criminal convictions for a range of offences involving dishonesty (false pretences, goods in custody, stealing, forging and uttering, dishonestly obtaining a valuable thing by deception, obtaining property by a wilfully false promise) dating back to 1952. She had served numerous terms of imprisonment. In 1971 she brought defamation proceedings in respect of a newspaper article relating to a police investigation into an allegation of theft of 50,000 tons of low quality off-grade wheat, valued at $5 million. She claimed she was identified as the miscreant. She obtained a verdict of $45,000, but it was set aside on appeal and a new trial ordered: Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348. The new trial never took place. In fact, Ms Smith was charged with the offences which were the subject of the article, was convicted of false pretences in relation thereto and sentenced to 6 years imprisonment with a non parole period of 3½ years (see [47] - [54]).

33 During the years 1997 to 2001, Ms Smith secured a substantial contract with NorthPower, the energy authority in the Newcastle region (at [55]). That contract was terminated on 23 August 2001 (at [196]). His Honour described the contract as one Ms Smith secured “with a substantial corporation when she was almost seventy years old” (at [94]). Turnover under the contract was in excess of $5 million (at [82]). Shortly after she met the respondent, Ms Smith asked him to help her apparently to recover from NorthPower certain invoices she believed it had not paid. She asked Mr Mahommed to undertake the task of reconciling her invoices with the payments revealed by her bank statements (at [95]).

34 Ms Smith did not give evidence.

35 All the matters complained of described Ms Smith as having dementia. The programme described her as having a “mental illness”. It depicted her with her hand shaking. Dr Seth Manners, who had been the family’s treating doctor for several decades, gave evidence. He regularly saw Ms Smith in respect of various physical and psychological problems. He said she did not suffer from dementia (at [86]).

36 The respondent’s evidence was that when he met Ms Smith “she was ‘pretty impressive’ … had no tremor … [and] did not appear to be either dull or sedated” (at [83]). Having been shown documents relating to her contract with NorthPower, he concluded she was “switched on” (at [83]).

37 The programme also depicted Trevor Steele saying his mother was “in receipt of a war veteran’s pension”. There was no evidence of this, apart from his assertion. Even assuming that assertion to be accurate, the primary judge found there was no evidence that it had been disclosed to Mr Mahommed (at [85]).

38 The primary judge found (at [94]) that the respondent’s account of his meeting with Ms Smith and Trevor Steele was plausible. He accepted that he was impressed. He observed that Ms Smith’s life in crime suggested that she was a good talker. He described “[h]er recent track record with NorthPower [as] formidable.” He concluded “[s]he appeared to be a woman of substance.” He also found (at [99]) that the respondent had no knowledge of her criminal past.

(c) Mr Trevor Steele

39 Ms Smith’s son, Trevor Steele, also had a criminal history – including both offences of violence (assault with intent to rob) as well as dishonesty (receiving, obtaining a financial advantage by false pretences, passing a valueless cheque, obtaining money by deception) – in his case dating back to 1976 (see [56] - [58]). He did not give evidence.

(d) Mr Tony Steele

40 The respondent gave evidence both before Palmer J and the primary judge to the effect that that he had spent somewhere between ten and twelve hours with Mr Tony Steele, Ms Smith’s other son, and did not notice anything unusual about the way he spoke (at [121], [123]).

41 Tony Steele was referred to in the programme as “illiterate” and a “housebound schizophrenic”. The primary judge heard evidence from Dr Manners who had treated Tony Steele since the mid-1980s (see [124]). He said Tony Steele had been diagnosed as schizophrenic at the age of 17 years and had been admitted to psychiatric hospitals on seven or eight occasions. As his Honour summarised Dr Manners’ evidence:

‘A. ... his speech is often slow and stilted, he doesn’t necessarily follow a logical course in a conversation, he’ll interrupt a conversation and go off in another direction. I’ll just refer to – he does not have much conversation other than pleasantries because he doesn’t volunteer information, you have to seek information from him.’

126 … [He] was very much under the influence of his brother Trevor (T 302). If he were asked to sign a document, he probably would do so…”.

42 Dr Manners thought it was “extremely unlikely that [Tony Steele] would understand” a Power of Attorney he had apparently given to a solicitor or a document appointing that solicitor as his “Enduring Guardian” (at [127] - [128]).

43 According to Dr Manners, Tony Steele would “[a]part from a sometimes frozen face, … appear normal” to someone unaware of his medical history (at [129]).

44 His Honour recited, and apparently accepted (at [120]), the respondent’s evidence that when he saw Tony Steele give evidence before Palmer J, he hardly recognised him as:

“His head was shaved. He looked like he had not had a bath for a week. He was dressed in dirty shorts, a shirt and thongs (T 48). His appearance was in marked contrast to the way he looked when he had seen him dressed to go to a local club (T 48). He was incoherent.”

45 The primary judge described Tony Steele’s appearance before him as follows:

“133 Mr Tony Steele was called to give evidence. He walked with a marked limp. He was dressed normally. His head had not been shaved. Indeed, he presented well. As Dr Manners remarked, at first he appeared to be reasonably normal. His answers were limited, but generally responsive. Within a relatively short time, however, the limits of his comprehension and the quirkiness of his reactions were apparent. … I believe that the limits of his literacy would soon have been obvious, had time been spent with him, and especially if documents had been placed in front of him. I cannot accept that Mr Mahommed spent one and a half hours interviewing him, without recognising that he suffered from a mild mental illness. I reject as false Mr Mahommed’s evidence that he spent ten to twelve hours with him and regarded him as normal. That evidence, I believe, was false to the knowledge of Mr Mahommed when he gave it.”

46 On 21 May 2002 Tony Steele and his sister, Denise Robinson, executed a Deed of Trust pursuant to which Ms Robinson held one share in a company, Maxwell Developments Pty Limited (“Maxwell Developments”), in trust for Tony Steele. Ms Robinson was also a director of Maxwell Developments. The remaining shares were the property of Tony Steele. Maxwell Developments purchased a property in Blacksmiths which was valued at approximately $300,000 and was unencumbered (at [160], [164]). Despite the declaration of trust in Tony Steele’s favour, the primary judge found (at [165]) that “Doreen Smith regarded Maxwell Developments as a ‘family company’.” The Blacksmiths property was used as security for some of the Liberty Financial loans referred to below.

The Liberty Financial transactions

47 The appellant’s defence of substantial truth/contextual truth was based on the respondent’s conduct in arranging loans with Liberty Financial on behalf of Ms Smith and Tony Steele in the period 17 June 2002 to 8 April 2004 – five for Ms Smith and four for Tony Steele (two personal loans and two advances to Maxwell Developments).

48 The primary judge dealt carefully with each loan application. There is no complaint about his findings in relation thereto. It will be convenient to refer only to the salient points which underpin his Honour’s ultimate findings.

49 Ms Smith applied for the first loan of $35,000 which she said was needed “for a new business”. She told the respondent that her family and she “have set up a new business called Country Power Newspapers, we are in the process of obtain(ing) a contract to supply marketing services to Country Energy.” She had an unencumbered property to provide as security for the loan. Her accountant confirmed she was establishing a business for which she needed approximately $50,000 for the purchase of equipment and other business assets (at [66] - [69]). In due course Liberty Financial agreed to advance her $50,000 (at [72]). Within a month of the first advance Ms Smith sought a further loan of $40,000 to buy a car for the business. After completion of further paperwork, Liberty Financial also advanced that sum (at [73] - [76]).

50 The next loan transaction the respondent undertook was in relation to Tony Steele, who Ms Smith told him “need[ed] a loan of $80,000 for working capital in his business” (at [103]). The respondent met Tony Steele and, he said, received information from him to make the loan application. Security for the loan was an unencumbered property in Swansea Tony Steele owned (at [105] - [108]).

51 I have set out above the primary judge’s findings about the respondent’s observations of Tony Steele. His Honour also found (at [145]) that the respondent “gave on oath a false explanation of his dealings with Tony Steele in his affidavit and evidence before Palmer J [and] then repeated the same false explanation to this Court.” Despite this, his Honour was “not persuaded … that [the respondent’s] dishonesty extended to an absence of belief concerning the business that Ms … Smith intended to pursue, in which she would usefully employ her sons.” He had (at [145]):

“…the strong impression, at least during 2002, that Mr Mahommed was, to some extent, under the spell of Doreen Smith, a practiced fraudster who, I infer, was very plausible.”

52 As time passed and the respondent became more familiar with Ms Smith’s affairs, particularly her dealings with NorthPower, the primary judge concluded he would have recognised that income information she gave him in 2003 for the purpose of increasing her loan secured on her property from $130,000 to $300,000 was “fantasy” (at [193]) and false (at [194]; see also [200]).

53 When he came to damages, the primary judge summarised his adverse findings, which touched on the respondent’s honesty (at [289]). It is convenient to set that summary out at this point before turning to his consideration of the defences:

“First, Mr Mahommed, when making applications for a loan on behalf of a client, was obliged to furnish the lender with accurate information. The lender required an estimate of the applicant’s assets (including the value of household items, motor vehicles and money in the bank). It also required a statement of earnings. In three applications, Mr Mahommed made an upward adjustment of the value of certain assets or income (the first Smith application (supra paras [100]-[102]); the first Steele application (supra para [109]) and the second Steele application (supra para [117])).

Secondly, when called upon to provide an explanation for such changes before Palmer J, and before this Court, Mr Mahommed said different things at different times. Collectively, his explanations were improbable. It is likely that in each case he changed the figures to put the applicant in a rather better light. Strangely, he did so although he recognised that such material was of marginal relevance and that the primary determinant, in terms of approval from the lender, was the value of the real estate being offered as security (supra paras [101], [109], [144]-[146]).

Thirdly, in October 2003 and again in April 2004, Mr Mahommed submitted applications to the lender on behalf of Doreen Smith, which included a statement of income which he knew to be false or in respect of which he was wilfully blind, failing to ask obvious questions which would have revealed its falsity (supra paras [193]-[200]). I believe he did so partly out of friendship and partly out of self interest. Again, from his perspective, he was aware that the primary determinant, in terms of approval, would be the real estate security.

The Steele-Smith proceedings

54 As I have said, the appellant sought to persuade the primary judge to use the adverse findings (the “Steele-Smith adverse findings”) Palmer J made about the respondent in mitigation of damages. The primary judge explained this litigation, which arose from the Liberty Financial loans the respondent arranged, as follows:

Mr Mahommed was joined in the action

Steele-Smith & Ors v Liberty Financial P/L & Anor

55 The appellant accepted that because the Steele-Smith adverse findings were made after publication of the matters complained of, Rochfort precluded the primary judge from taking them into account (see [293]). It also sought to argue that those findings were admissible “on the analogy of convictions, statements about a person in open court were part of the public record and available in mitigation” (see [333]). It failed on that submission also, as I shall explain.

56 The appellant seeks, as I have said, to challenge Rochfort. It also seeks to challenge his Honour’s ruling that Palmer J findings were not admissible on the second basis for which it contended. I will set out when dealing with mitigation the particular findings Palmer J made which the appellant invited his Honour to take into account.

FINDINGS OF THE PRIMARY JUDGE: DEFENCES

Overview

57 As I have said, no defence was pleaded to imputations 1 – 6 (the imputations conveyed by the promotions). The appellant accepted below (at [9]), and accepts on appeal, that the respondent is entitled to a verdict in respect of those imputations.

58 The primary judge held (at [218]) the defence of substantial truth was not made out in relation to imputation 11 (“the Plaintiff charged Doreen Smith outrageous fees”). It was, therefore, no longer available as part of the contextual imputation defence (at [229]). This decision is not challenged on appeal.

59 The primary judge also held (at [228]) that the appellant had failed to prove the substantial truth of imputation 12 (“the Plaintiff is a dishonest financial adviser and mortgage broker”). Accordingly, imputation 12 was no longer available as an element of the appellant’s contextual truth defence (at [229]).

60 The primary judge found that the substantial truth of each of the remaining contextual imputations (imputations 15 – 17) was not made out (at [229] - [238]). That finding is not challenged on appeal. Thus, in relation to the defences, the only remaining issues are the substantial truth of imputation 12, and whether, by reason of its substantial truth, imputations 7 – 11 did not further injure the respondent’s reputation: s 16(2)(c), Defamation Act.

The primary judgment: substantial truth of imputation 12

61 The primary judge commenced his consideration of the substantial truth of imputation 12 by observing (at [220]) that it reproduced the statement by Mr Richardson, the appellant’s journalist that:

Really? He calls himself a financial adviser and mortgage broker, but Peter Mahommed’s so-called advice has seen an elderly woman lose everything. Where’s her money? She’s lost all of her properties because of you sir.”

62 The primary judge (at [221]) approached the issue of the substantial truth of imputation 12 on the basis that the appellant had to prove that:

“1. The plaintiff was a financial adviser; and

2. The plaintiff was a mortgage broker; and

3. That in both capacities, he was dishonest.”

63 There was no dispute that the respondent was a mortgage broker. He denied, however, ever being or having claimed to be a financial adviser – pointing out that he did not hold a licence to conduct such a business (see [222]).

64 The appellant contended that that the words of the imputation were ordinary words, to be given their ordinary and natural meaning, that the phrase, “financial adviser”, was not a term of art and, in any event, submitted the respondent did give advice to his clients as to which financial product would best suit their needs so that, in ordinary parlance, was he gave “financial advice” (see [223]). Alternatively it contended that, if his Honour did not accept that the respondent was a financial adviser, the imputation would be shown to be substantially true if the Court were to find that the plaintiff was a “dishonest mortgage broker” (see [224]).

65 The primary judge rejected the appellant’s alternative submission (at [225]), holding that the appellant had to show the respondent was dishonest in both capacities. Although in his view “[t]he phrase ‘financial adviser’ in present day usage has perhaps reached the point where it is a recognisable group or profession in the same way as a lawyer, a doctor, an engineer or an architect”, he said he would “approach the phrase ‘financial adviser’ upon the basis of the ordinary meaning of those words.”

66 His Honour accepted (at [226]) the respondent’s evidence that he did not provide financial advice, but was a mortgage broker solely engaged in the arrangement of business and investment loans for his clients.

67 His Honour also accepted (at [227]) that the respondent knew a licence was required in order to provide financial advice, that he had no such licence, and that he refrained from giving advice because he was unlicensed.

68 Having failed to establish the respondent was a financial adviser, the appellant failed to prove the substantial truth of imputation 12. His Honour made no finding as to whether the respondent was a dishonest mortgage broker.

69 His Honour’s findings in relation to substantial truth obviated the need for him to consider the contextual truth defence in relation to that imputation (at [238]).

The primary judgment: contextual imputations

70 The remaining contextual imputations were:

16. The Plaintiff took advantage of Doreen Smith by exploiting her age and infirm state to secure payments for his company.

17. The Plaintiff was unfit to be a financial adviser or mortgage broker.”

71 Contextual imputations 15 and 17 both depended on the respondent being a financial adviser. Both, in the primary judge’s view, failed for that reason alone (see [230] - [232]). Insofar as contextual imputation 15 was concerned, his Honour added that he was not satisfied, for the reasons he had already given, that the respondent knew that Tony Steele was significantly disabled. In his Honour’s view (at [230]) it was probable “that he dealt principally with Doreen Smith (and to a lesser extent, Trevor Steele), spending little time with Tony Steele beyond obtaining his signature.”

72 Insofar as contextual imputation 16 was concerned, the primary judge rejected its basic factual sting: that the respondent had taken advantage of Ms Smith by exploiting her age and infirm state. While Ms Smith was elderly, his Honour rejected (at [236]) the proposition that she suffered from dementia or was infirm. Rather:

“… I accept that Mr Mahommed was impressed by her. He found her to be ‘sharp’ (T 54). His impression conformed to the description provided by Doreen Smith’s daughter (supra para [174]).

73 Accordingly the primary judge held the appellant had not established the substantial truth of contextual imputation 16. Having held the appellant had failed to establish the substantial truth of all contextual imputations, his Honour did not consider the remaining issues which could arise on the defence such as weighing the contextual imputations against the respondent’s imputations separately (see [238]).

74 The appellant accepted that John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 (Special Leave Refused: John Fairfax Publications Pty Ltd v Zunter [2007] HCATrans 64) determined that a “Polly Peck” defence (see Polly Peck (Holdings) Plc v Trelford [1986] QB 1000) was not available in respect of the publication of the matters complained of outside New South Wales and that his Honour was bound by that decision to reject the defences it had pleaded relying on that principle (see [239]). The appellant formally submitted at trial that Zunter had been incorrectly decided – a submission it has not repeated in this Court.

FINDINGS OF THE PRIMARY JUDGE: DAMAGES

Overview

75 The primary judge dealt first with the respondent’s reputation. He noted (at [241]) that his mother had given unchallenged evidence “that her son had an excellent reputation before the programme, specifically as a mortgage broker within the finance industry [and] had a reputation for being trustworthy, hard working and very honest”.

76 He recorded (at [243]) the “very significant audience” of the matters complained of. The appellant’s estimate, according to interrogatories, was 1,532,000 viewers throughout Australia, with the audience in New South Wales estimated to be 442,391. While no estimates were made of the audience in respect of each matter complained of, his Honour inferred that, in each case, it was substantial and that some viewers would have seen all three broadcasts.

77 His Honour next dealt with hurt to feelings. This subject deserved extensive treatment because it recorded the strenuous endeavours on the respondent’s part to bring to the appellant’s notice prior to the broadcasts the facts concerning his dealings with the Steele-Smiths. This included an interview with Mr Richardson prior to the promotions being aired during which the respondent showed him documents from his files, and Mr Richardson promised to check the story and come back to him before broadcasting anything (see [247] - [248]). After the promotions were broadcast (without Mr Richardson having been in contact again) the respondent contacted the appellant again and spoke to a Mr Frank Pangallo, who was identified as the Production Manager, to whom he described, I assume at that stage the promotions, as “incorrect”, and said “You need to stop this”. In response to his request for “more information or evidence”, the respondent faxed 158 pages of documents to Mr Pangallo which he contended in the fax coversheet “irrefutably disproves those allegations”. Mr Pangallo said he would “read it overnight and … come to you in the morning” (see [251] - [252]). None of the respondent’s conversations with either Mr Richardson or Mr Pangallo was challenged (see [253]). Neither Mr Richardson nor Mr Pangallo was called. When the appellant did not contact him the next morning, the respondent contacted “his solicitors who telephoned Channel 7 and put them on notice that, were they to screen the programme, litigation would ensue” (see [256]).

78 The primary judge set out in detail the respondent’s reaction to the programme being broadcast, his family’s reaction and that of relatives, friends and clients. He received “anonymous abusive calls” and “was told by a friend that his name had been ‘bandied about’ at a function … as a person who ‘rips off old ladies’ ” (at [261]). He ultimately moved house because of the level of discomfort with his neighbours. He also separated from, and later divorced, his wife in 2007. While there was no evidence that the programme caused the separation, his Honour inferred that it did not help. He had not continued in his business as a mortgage broker because his work “dried up”. The appellant did not apologise and, his Honour found, the respondent was obliged to come to court for two weeks to vindicate his reputation, matters he found contributed to his hurt to feelings (see [244] - [269]).

79 The primary judge concluded that the respondent was entitled to an award of aggravated damages on the basis of his knowledge that the imputations are false, holding:

Rigby v Associated Newspapers (No 2)

80 The primary judge rejected a claim for aggravated damages based on the conduct of the trial (see [274]). He also rejected the respondent’s claim for exemplary damages in States other than New South Wales. While he held (at [286]) that “[t]he programme was certainly not an impressive piece of investigative journalism”, he was also prepared to accept (at [282]) that the appellant had also been duped by Ms Steele “a practised fraudster [who] was very plausible [and that] [i]t is hard to reconcile the feeble pensioner depicted on the screen with the woman who accumulated a significant criminal record in her lifetime and, at the age of 69, secured a substantial contract with a large corporation for the next five years.” He concluded (at [285]) that the documents the respondent had provided to the appellant:

“… simply demonstrated that there had been a series of loans. It confirmed that Doreen Smith, a feeble old woman, and Tony Steele, a schizophrenic and invalid pensioner, had been represented as having earned significant salaries. The documents did not capture Doreen Smith’s real personality, and the representations she had made to Mr Mahommed. Nor did they answer the false suggestion made by Trevor Steele that Mr Mahommed had taken Doreen Smith’s money and that of Tony Steele.”

(b) Hurt to feelings caused by reaction of others post-publication

235 The decision in Mirror Newspapers Ltd v Fitzpatrick demonstrates that evidence of the reaction of people to the plaintiff after seeing the defamatory publication is admissible, on the basis that it is relevant to proving the damage done to the plaintiff’s reputation (see Hutley JA (at 646 - 647), Samuels JA (at 655 - 657) and Priestley JA (at 665)). The respondent did not advance any argument as to why such evidence was not admissible – merely identifying it as a genre of evidence which this Court would have to rule was inadmissible if his argument that Rochfort was correctly decided was to be sustained. In my view this Court should not entertain such a submission in relation to a category of evidence classically admissible as evidence that the defamation caused people to shun and avoid (or generally think less of) the plaintiff.

Conclusion on continuing nature of damages

236 It may well be the case, as McClellan CJ at CL observed in Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 (at [5]) that “[i]t is commonly accepted that the primary damage to a plaintiff’s reputation and injury to feelings is occasioned at the time of publication and shortly thereafter”. However, critical to that statement is the qualifying word “primary”: damages for the injury to feelings and reputation caused by the publication of defamatory material must be assessed on their facts. It will not always be the case that injury of this sort will end or even lessen as time passes. Belief in the sting of the imputations may become more entrenched; the number of the plaintiff’s acquaintances who are aware of the imputations may increase; the plaintiff’s awareness of the lower regard in which he is held, and the consequent loss of self-esteem, may grow over time. These are factual matters that the current framework for assessing damages enables the court to consider. The proposition for which the respondent contends would artificially constrain the court’s capacity to assess the extent of any damage done.

237 In my view the respondent has not demonstrated that the cases he referred to (at [23]) above were wrongly decided.

False imprisonment cases

238 The proposition that damages to a person's reputation may continue up to the time damages are assessed (and that evidence going to mitigate or aggravate that damage up to that time is admissible) is supported by the false imprisonment cases.

239 In Walter v Alltools Ltd (at 40) Lawrence LJ (Mackinnon LJ and Cassels J agreeing), said:

A false imprisonment does not merely affect a man's liberty; it also affects his reputation. The damage continues until it is caused to cease by an avowal that the imprisonment was false

240 Clarke JA followed Walterv Alltools Ltd in McDonald v Coles Myer Ltd (1995) Aust Torts Reports ¶81-361 (at 62,684 - 62,685), a claim for wrongful arrest and false imprisonment. His Honour noted that the passage from Walter v Alltools “was cited without comment by the High Court in Triggell v Pheeney immediately prior to its statement that the conduct of the defence may be taken into consideration as improperly aggravating the injury done to a plaintiff in a libel case if there is ‘a lack of bona fides in the defendant's conduct or it is improper or unjustifiable’.” Although his Honour expressed the view that statements in Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (at 243) and Mirror Newspapers Ltd v Fitzpatrick (at 660) would tend, in the context of libel, to deny the correctness of what Lawrence LJ said in Walter v Alltools I do not, with respect, understand those passages in that sense. I am also of the view that the High Court (Dixon, Williams, Webb and Kitto JJ) in Triggellv Pheeney – a defamation case – cited Walter v Alltools Ltd with approval as demonstrating analogically the continuing effect in a defamation case on the damage to the plaintiff’s reputation of the defendant’s failure to apologise or retract the defamatory statement and to persist in it to the end – as long as that failure demonstrated the defendant was lacking in bona fides and/or was acting unjustifiably and/or improperly: Waterhouse v Broadcasting Station 2UE Pty Ltd [1985] 1 NSWLR 58.

241 Walter v Alltools Ltd was also followed in Myer Stores Ltd v Soo, a case of false imprisonment (at 603) per Murphy J; (at 633) per McDonald J. Murphy J (at 603) after referring to Walter v Alltools Ltd commented that “[t]he principle invoked appears to be analogous to that applicable in defamation claims”, referring to authorities dealing with the aggravation of damages caused by a defendant’s post-publication conduct, for example pleading, but not proving, truth, and failure to apologise.

242 Charles JA drew a similar analogy in Sadler & State of Victoria v Madigan (at [63]) where he referred to statements in Coyne v Citizen Finance Ltd (at 237) per Toohey J and (at 241) per McHugh, J to the effect that in defamation proceedings the conduct of the defendant down to verdict is a matter on which the plaintiff may rely as aggravating the damages.

Analogy with common law principles

, 9^th ed (1998) Sweet & Maxwell (at [1.11]) dealing with the topic “Principle and precedent in defamation”, observed that:

“Arguments by analogy from other torts are not, in practice, treated as of much relevance to the decision of a new point in the law of defamation for English law has always treated defamation as firmly rooted in its historical origins, and not as open to the development and rationalisation that is acceptable elsewhere in the common law.”

^th

“Even if defamation is regarded as a self-contained tort rather than a coherent structure covering the whole ground of protection of reputation in the broad sense, the courts have sometimes shown themselves willing to allow restrictive rules of defamation to be outflanked by reference to other, overlapping heads of liability.”

244 It is clear that the authors did not regard the “defamation … as a self-contained tort” proposition as excluding the application of common law principles, as they pointed out (9^th edition at [6.34]; see now 11^th edition at [6.36] - [6.42]) for example, in dealing with republication, that “[c]ases of defamation are subject to no peculiar rule, but are governed by the general principles of tort with regard to causation and remoteness of damage.”

245 It is pertinent in this context to observe that, as I explained in McCrohon v Harith [2010] NSWCA 67 (at [54]) (with Campbell JA and Handley AJA’s agreement):

Johnson v Perez

Miliangos v George Frank (Textiles) Ltd

Johnson v Perez

Golden Strait Corporation v Nippon Yusen Kubishika Kaisha

Johnson v Perez

Gagner Pty Ltd trading as Indochine Cafe v Canturi Corporation Pty Ltd

246 In particular, as was explained (at [56] ff) “the general rule will yield if, at the time damages are assessed, the court is aware of new and material facts relevant to the assessment because courts prefers actual facts to speculation, prophecies, conjecture and guessing”. It is unnecessary to repeat the discussion of authorities undertaken in McCrohon. Suffice it to say that notwithstanding the statement in Gatley (at [1.11]) there appear to me to be sound reasons why, if there is relevant post-publication material which goes to a plaintiff’s reputation, that evidence should be admissible to ensure that the damages awarded accurately reflect the plaintiff’s reputation at the time the damages are awarded. That approach is consistent with the approach in Plato Films v Spiedel (at 1142) per Lord Denning which supports the admissibility of evidence properly before the Court on some issue because otherwise “the plaintiff would recover damages for a character which he did not possess or deserve; and this the law will not permit.” In my opinion the admissibility of such material should not be confined to cases where, for example, the defendant has only partially established a defence of truth or comment. As long as its admission is carefully confined in the same sense as reputation evidence is now confined, such post-publication evidence should, in my view, be admitted. However its admission should be approached with caution – the defendant should not be permitted to “divert the course of the trial from the true issues”: Television New Zealand Ltd v Prebble (at 525) per Cooke P.

247 I would add that it appears that such evidence may, prima facie, be admissible pursuant to s 47(b) of the Defamation Act which is not limited as to time, but as that section was not debated on appeal I will not express any final view on the matter.

248 Accordingly, in my opinion, it would be open to the Court to overrule Rochfort. However, before reaching a conclusion on this it is appropriate to consider the distinction between convictions and judicial findings.

Whether judicial findings are analogous to convictions

249 In Goody, a defamation case, when dealing with the admissibility of prior convictions as evidence of bad reputation, Lord Denning MR (Danckwerts and Salmon LJJ agreeing) held (at 340 - 341):

They are very different from previous instances of misconduct, for those have not been tried out or resulted in convictions or come before a court of law. To introduce those might lead to endless disputes

250 The issue of the admissibility of adverse trial findings was considered in Marsden (at [1392] ff). It was not necessary for the Court to come to a concluded view as the issue had not been raised at trial. Nevertheless their Honours opined (at [1396]), “[o]n the cases on mitigation of damages because the plaintiff has a bad reputation, findings in a judgment may go to the plaintiff’s reputation, including where the judgment post-dates the publication of the defamatory matter.” After discussing Goody, the Court said:

Goody

Findings in civil litigation made in open court could be regarded as evidence of bad reputation because matters of public knowledge and taken to be known, or because likely to come to the attention of those who knew the plaintiff, in the same manner, but they are not necessarily in the same position as convictions for criminal offences

251 There was no reference to Rochfort in the Court’s reasons. However, when discussing (at [1403]) the use of a judgment which post-dates the publication of the defamatory matter, the Court referred to Quinn, Middendorp and (at [1405]) ABC v McBride. Rochfort was critically discussed on the admissibility of post-publication findings in the latter two cases. The Court in Marsden concluded:

Middendorp Electric Co Pty Ltd v Sonneveld

To adapt what Gillard J said, it might be thought incongruous to award substantial damages to a plaintiff whose reputation, by reason of the findings of the trial judge, has been destroyed at the time the judgment in [sic, is] pronounced. The Court is telling the world the plaintiff has a good reputation at the date of judgment, yet the truth is that he has no reputation.

1407 But the situations are different. Courts act on evidence, and the court’s findings are not themselves evidence in the proceedings – they are, of course, not known until judgment is delivered. The Goody v Odhams Press Ltd public knowledge cannot apply, and the notoriety of the unknown findings and their effect in fact on the plaintiff’s reputation cannot be an issue in the proceedings. Thus there is not true incongruity in a court awarding damages on the basis of a good reputation but making findings actual or notional publication of which may (or may not) be detrimental to the plaintiff’s reputation, since the court cannot properly pay regard to the effect of its findings on the plaintiff’s reputation.
1408 That courts act on evidence, and not otherwise, is fundamental to our legal system. It would be undesirable that a plaintiff claiming damages for defamation should have taken into account against him findings which are not known until judgment is given, without the opportunity to address whether or to what extent the findings do affect his reputation….”

252 For the purposes of this case, these observations in Marsden appear to relate more to the admissibility of the adverse trial findings than the Steele-Smith adverse findings. I note that the respondent did not submit at trial, or on appeal, that Marsden precluded the primary judge from taking the adverse trial findings into account in mitigation – no doubt because this evidence was regarded as falling into the category of evidence admissible in mitigation because it was otherwise properly before the court. The conclusion the Court reached in Marsden was considered by McClellan CJ at CL in Habib v Nationwide News Pty Ltd [2010] NSWSC 924 (at [30] - [32]) when considering whether he should take into account in mitigation of damages adverse credit findings he had made about the plaintiff. His Honour expressed the view that the Court’s view may not appeal to a jury applying common sense, but concluded (at [33]) that he should follow Marsden having regard to the strength of the view there expressed.

253 Insofar as the Steele-Smith adverse findings are concerned, however, Marsden supports the proposition that judicial findings which are in the public domain – even if made post-publication, may be admissible. The Court did not elaborate on the distinction it perceived between convictions and judicial findings – although some distinctions are self-evident: at the most elemental level the standard of proof required before the requisite conclusion is reached. Another distinction may be whether the findings are of an intermediate or ultimate nature. These issues were not debated on appeal. The respondent did not contend that the Steele-Smith adverse findings were inadmissible on any basis other than their post-publication status.

254 In my view, such findings, if relevant in the senses already discussed, should be admissible. Save as to the standard of proof, they appear otherwise to stand on much the same footing as convictions: they took place in open court and can be regarded, accordingly, as matters of public knowledge. The tribunal of fact should not be kept in the dark about the plaintiff’s reputation at the time it comes to consider the award of damages

255 In my view Rochfort was wrongly decided. It did not recognise the continuing nature of damage in a defamation action – a position well established at the time it was decided. Moreover the developments in the principles governing the award of damages I have discussed also require the Court to consider “actual facts”.

Rochfort

: conclusion

256 In my view this Court should overrule Rochfort. I would allow grounds 9 and 10.

Admission of the Steele-Smith adverse findings: practical implications

257 The effect of this conclusion is that the Steele-Smith adverse findings should have been admitted at trial to the extent they were relevant to the relevant sector of the respondent’s reputation.

258 However there are, in my view, good reasons for concluding that the admission of the Steele-Smith adverse findings would not have affected the damages the primary judge awarded. First, they were, as the appellant acknowledged substantially the same findings arising from the same transactions as the adverse trial findings. However, significantly, it is clear that Palmer J and Kirby J drew different conclusions about the nature of the respondent’s conduct. Palmer J, for example, held (at [101]) that the respondent “deliberately made false entries” in Tony Steele’s loan applications and (at [102]) “that he was ‘improving’ the figures in Mr Tony Steele’s loan application for the purpose of making the application look more attractive to the prospective lender”.

259 In contrast, the primary judge concluded (at [289]) that while the respondent made an upward adjustment of the value of certain assets or income, and changed the figures to put the loan applicants in a rather better light, he did so although he recognised that such material was of marginal relevance and that the primary determinant, in terms of approval from the lender, was the value of the real estate being offered as security and also (in relation to Ms Smith) that he included a false statement of income, partly out of friendship and partly out of self interest, even though, again, he was aware that the primary determinant, in terms of approval, would be the real estate security. If one allows for the proposition that the adverse trial findings are as cogent as the Steele-Smith adverse findings, even though they have not seen the light of day before the damages award is announced, then, in my view the reasonable assessor of the respondent’s reputation may well be inclined to take the more favourable view of the respondent the primary judge formed than that Palmer J did.

260 In my view had the primary judge admitted the Steele-Smith adverse findings it was open to him to assess their influence on the respondent’s reputation in the light of his own findings and form the conclusion that they would not substantially affect his assessment of damages.

261 Finally, I would observe that to the extent it might be thought the Steele-Smith adverse findings and the trial adverse findings were substantially to the same effect, the fact two judges had reached the same conclusion could not increase the mitigatory effect of those findings.

Burstein v Times Newspapers Ltd [2001] 1 WLR 579

262 Before I turn to the quantum of damages I will deal briefly with Burstein.

263 It is unclear whether the appellant sought to rely on appeal on the proposition that the Steele-Smith adverse findings should have been received as evidence of directly relevant background context in accordance with Burstein (at [41]). It so submitted at trial, while recognising that limits of relevance, sector and timing had to be observed in admitting the evidence on a Burstein basis. It referred to Burstein in its written submissions on appeal as considering the reception of sector identification evidence. It also referred to Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469 where I note Keene LJ discussed (at [56]) the difficulties which may arise in determining what constituted “directly relevant background” and accepted the need for courts to proceed with some caution in applying Burstein.

264 As I have said Burstein was referred to with approval in ABC v McBride without any substantive discussion. It is described in Gatley, 11^th ed (at [35.43]) as “a new category of admissible evidence”. It is apparent from English authorities that its proper application is still undecided, including the question whether “directly relevant background” can include post-publication facts – a proposition it might be thought is a contradiction in terms: see Rath v Guardian News and Media Ltd [2008] EWHC 398 (QB) per Tugendhat J (at [94], [99]); Tesco Stores Ltd v Guardian News & Media Ltd [2008] EWHC B14 (QB); [2009] EMLR 5 per Eady J (at [55]) (referring to observations on a number of occasions that the true ratio or ratios of Burstein “are by no means easy to divine”); Kaschke v Gray [2010] EWHC 1907 (QB) per Stadlen J (at [44] - [48]).

265 In West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387 (Special Leave Refused: Elliott v West Australian Newspapers Ltd [2009] HCATrans 153) Steytler P (with whom McLure JA relevantly agreed) also observed (at [63]) that the scope of the decision in Burstein was “to some extent uncertain and its application may be difficult in particular cases”, referring to Birchwood Homes Ltd v Robertson [2003] EWHC 293 (QB) and generally, Gatley,10th ed (at [27.25], notes 2 and 3 and [33.43]), and A Kenyon, Defamation: Comparative Law and Practice (2006) UCL Press (at 350).

266 In the absence of substantive argument from either party on the application of Burstein, I do not consider it appropriate to delve into its possible ramifications in this case.

Damages

267 The parties’ submissions on the damages issue were succinct amounting to little more, with respect, than an assertion on the appellant’s part that they were excessive, particularly if its submissions on mitigation were accepted, and, on the respondent’s part to an assertion that they were modest or moderate. The respondent also contended that the size of the award for the programme reflected the primary judge’s displeasure at the respondent and his mitigation of the damages.

268 In Moit v Bristow [2005] NSWCA 322 I explained (with Beazley JA and Campbell AJA’s agreement):

John Fairfax Publications Pty Ltd v O'Shane (No 2)

Crampton v Nugawela

Carson v John Fairfax & Sons Ltd

Crampton v Nugawela

121 In Broome v Cassell and Co [1972] AC at 1071, Lord Hailsham of St Marylebone LC said that the damages awarded for defamation must be such that ‘in case the libel, driven underground, emerges from its lurking place at some future date, [the plaintiff] must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge’. Mahoney ACJ referred to that statement with approval in Crampton v Nugawela (at 193), a case decided after s 46A came into force, and held (at 194 - 195) that ‘[t]he award must be sufficient to ensure that, the defamation having spread along the “grapevine”… and being apt to emerge “from its lurking place at some future date”, it was “sufficient to convince a bystander of the baselessness of the charge” ’.”

269 The appellant’s complaint that the damages awarded were excessive invites appellate review of an exercise of discretion: Rogers v Nationwide News Pty Ltd (at [62]) per Hayne J. If an appellate court is convinced, not that in its own view the amount awarded is too high or too low, but that the amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case, it should intervene to prevent a miscarriage of justice: Carson (at 61 - 62) per Mason CJ, Deane, Dawson and Gaudron JJ.

270 In Rogers v Nationwide News Pty Ltd Hayne J observed that (at [74]) that s 46A of the Defamation Act draws attention to the fact that “damages awarded for defamation must take their proper place in the administration of justice…[and] must stand in a proper relationship with awards for the non-economic consequences of personal injury.” He accepted (at [74]), however, that:

“The relationship which s 46A(2) identifies is not, however, some precise or mathematical relationship between particular cases of defamation and personal injury or between particular classes of such cases. To do that would compare the incomparable.”

271 When considering the issue of a rational relationship between the relevant harm and the amount of damages (s 46A) it must be recalled that a person’s reputation is accorded high value. “[M]urdering a man's reputation by a scandalous libel may be compared to murdering his person”: Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 (at 364) per Isaacs J. As Mahoney ACJ (Handley JA concurring) said (at 193) in Crampton v Nugawela (1996) 41 NSWLR 176, “[i]n some cases, a person's reputation is, in a relevant sense, his whole life.”

272 Even though a plaintiff may not come to court with a perfect reputation, s/he does not lose his right to damages. As Greer LJ said in Hobbs v CT Tinling& Co Ltd [1929] 2 KB 1 (at 46) “a man with a damaged character is entitled to have his damaged character protected, and if newspapers for their own purposes falsely allege that he has been guilty of crimes and misconduct the jury might well consider that even a man of bad character ought not to have his character made out to be blacker than the proved facts warrant.”

273 In challenging his Honour’s use of the adverse trial findings in mitigation the appellant appeared to accept his Honour’s characterisation of the respondent’s conduct in changing the values of the Ms Smith’s assets as “a mild form of dishonesty” compared to what was said about him on the programme (see [330]). However it criticised, as, in effect, too benign, his Honour’s treatment (see [331]) of the respondent’s false explanations before Palmer J and himself. It will be recalled that his Honour described this conduct on the respondent’s part as “serious and repeated dishonesty” – a lie, but one made in the context of the matters complained of and although “foolish” as “a very human reaction … which does not necessarily suggest a pervasive dishonesty in [the respondent’s] character.” The appellant described the respondent’s false explanations in court as involving technically the elements of perjury. I have no doubt that the primary judge was cognisant of the implications of the respondent giving false evidence on two occasions. It was a matter for his Honour to evaluate the respondent in the context of the events which led to him giving that evidence and the impression he formed of him at trial and thus to characterise the seriousness of his conduct. His Honour’s characterisation would have to be demonstrably wrong for this Court to set it aside. In my view the appellant did not demonstrate any such error on his Honour’s part in this respect.

274 I will deal first with the appellant’s complaint that the primary judge should not have treated the matters complained of as separate publications for the purpose of awarding damages. It was, in my view, a matter for his Honour whether he awarded damages separately or en bloc for the imputations arising from the three matters complained of. As his Honour said (at [337]) “ ‘whether one or more causes of action are to be included in one verdict or judgment will depend upon the exercise of the trial Judge’s judicial discretion’ (Hayward v Thompson [1982] 1 QB 47, per Lord Denning MR at 62 quoting Scott LJ in Barber v Pigden [1937] 1 KB 664 at 684).” However it is also important to recall that in arriving at each verdict, his Honour was “mindful of the fact that there was likely to be a substantial overlap in the viewing audience” (at [337]). Once it is accepted that his Honour took the issue of overlap into account, it cannot be said, in my view that his Honour erred in a sense attracting appellate intervention, in awarding separate damages for the imputations conveyed by the three matters complained of, or in the amounts awarded for the first two broadcasts. Although they were broadcast in the short promotional material, it will be recalled that each conveyed grave allegations of theft against the respondent with the second imputing that he “deserved to spend a lot of time in gaol”. As his Honour said (at [339]), “[e]ach of the imputations was serious [and] in combination, they were devastating to the plaintiff’s reputation”. In my view it cannot be said that the amount his Honour awarded for the first two matters complained of was such that no reasonable judge could have awarded it: Rogers v Nationwide News Pty Ltd (at [65]) per Hayne J.

275 If all things had been equal I would have reached the same conclusion in relation to the award of $140,000 in relation to the programme. However that award cannot stand in light of my conclusion that imputation 12 was substantially true and, accordingly, that the appellant has established its defence to that imputation, and, further, in light of my conclusion that the appellant has established its defence of contextual truth in relation to imputation 11. Accordingly the respondent is only entitled to damages for imputations 7- 10.

276 In approaching the task of reassessing damages, I am mindful of the fact that while the primary judge awarded the respondent aggravated damages in respect of the programme, he also took the adverse trial findings into account in mitigation of the damages for imputations 11 and 12, particularly the latter (see [348]). For the reasons earlier expressed, in my view addition of the Steele-Smith adverse findings to the equation does not alter the picture, particularly having regard to the apparently greater insight the primary judge was able to form about the respondent’s motivation in the circumstances.

277 I am also conscious that the process of reassessment should not, if at all possible, impinge on the primary judge’s award to the extent it related to imputations 7 – 10. Having regard to his Honour’s reasons I would infer that he regarded the 6 imputations conveyed by the programme as on a continuum – with imputation 11 being the least serious, imputation 12 more serious than that and 7 – 10 being the most serious. I am also acutely conscious that the primary judge’s award cannot be deconstructed as between imputations on a mathematical basis: Rogers v Nationwide News Pty Ltd (at [64]) per Hayne J.

278 Any revised figure must take into account the findings on aggravation the appellant did not challenge, as well as the fact the matters it established in mitigation did not run as to imputations 7 – 10. Approaching the matter on the basis that the damages cannot be arrived at through calculation, I would be of the view that the appropriate award in relation to the programme is $125,000.

279 I would reject grounds 7, 11 and 12.

280 I would allow ground 8.

Orders

281 It will, accordingly, be necessary for the verdict in respect of the programme to be set aside. The appeal has, however, only succeeded in part. In my view the parties should be invited to make submissions both as to the costs of the trial and the appeal in the light of that partial success: cf Uniform Civil Procedure Rules 2005 (NSW) 42.1.

282 I propose the following orders:

1 Appeal allowed in part.

2 Set aside order 3 below, and in lieu thereof verdict for the respondent in respect of the third publication (the programme) of $125,000.

4 Reserve the costs of the appeal and the trial.

(b) respondent to file and serve written submissions also limited to five pages in length concerning such costs within 14 days.

283 McClellan CJ at CL:

I agree with McColl JA.

I agree with McColl JA

**********

Citations

Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335

Most Recent Citation

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119

Brisciani v Piscioneri (No 4) [2016] ACTCA 32

Fairfax Digital Australia & New Zealand Pty Ltd v Kazal [2018] NSWCA 77

Cases Cited

54

Statutory Material Cited

4

Australian Broadcasting Corporation v McBride [2001] NSWCA 322

Briginshaw v Briginshaw [1938] HCA 34

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CITATION:	Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335
HEARING DATE(S):	5 March 2010
JUDGMENT DATE:	7 December 2010
JUDGMENT OF:	Spigelman CJ at 1; Beazley JA at 2; McColl JA at 11; McClellan CJ at CL at 282; Bergin CJ in Eq at 283
DECISION:	1. Appeal allowed in part. 2. Set aside order 3 below, and in lieu thereof verdict for the respondent in respect of the third publication (the programme) of $125,000. 3. Direct the parties to calculate interest on the revised damages in accordance with these reasons and file short minutes of order setting out the substituted judgment within seven days of these reasons. 4. Reserve the costs of the appeal and the trial. 5. (a) Appellant to file and serve written submissions limited to five pages in length concerning costs (in this Court and at trial) within seven days; (b) respondent to file and serve written submissions also limited to five pages in length concerning such costs within 14 days. [The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
CATCHWORDS:	DEFAMATION – defences – substantial truth – whether necessary to prove each element of imputation a matter of substantial truth – whether element a material part of the imputation – whether sting of imputation proven to be a matter of substantial truth – Defamation Act 1974 (NSW), s 15 - DEFAMATION – defences – contextual truth – whether by reason of the substantial truth of one imputation remaining imputations did not further injure reputation – Defamation Act 1974 (NSW), s 16 - DEFAMATION – damages – mitigation of damages – evidence of bad reputation – identification of scope of reputation capable of being harmed by imputations – whether evidence of bad reputation goes to relevant sector of reputation - DEFAMATION – damages – mitigation of damages – evidence of bad reputation – post-publication evidence of bad reputation – correctness of Rochfort v John Fairfax & Sons Pty Ltd [1972] 1 NSWLR 16 - DEFAMATION – damages – mitigation of damages – bad reputation – use of judicial findings made in other civil proceedings - DEFAMATION – damages – mitigation of damages – bad reputation – use of evidence properly before the court on some other issue - DEFAMATION – damages – continuing nature of damages for injury to reputation and hurt to feelings - DEFAMATION – damages – where separate publications – assessment of amount to be awarded - DEFAMATION – damages – whether damages excessive
LEGISLATION CITED:	Defamation Act 1974 (NSW) Evidence Act 1995 (NSW) Supreme Court Act 1970 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
CATEGORY:	Principal judgment
CASES CITED:	Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 Ainsworth v Burden [2005] NSWCA 174 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 Aktas v Westpac Banking Corporation Ltd [2010] HCA 25; (2010) 84 ALJR 551 Allen v John Fairfax & Sons Ltd (Supreme Court of New South Wales, Hunt J, 2 December 1988, unreported; BC8801264 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 Anderson v Ah Kit [2004] WASC 194 Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Associated Newspapers Ltd v Dingle [1964] AC 371 Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430 Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175 Barber v Pigden [1937] 1 KB 664 Birchwood Homes Ltd v Robertson [2003] EWHC 293 (QB) Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Broome v Cassell & Co Ltd [1972] AC 1027 Burstein v Times Newspapers Ltd [2001] 1 WLR 579 Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211 Crampton v Nugawela (1996) 41 NSWLR 176 Dow Jones & Company Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575 Fawcett v John Fairfax Publications Pty Ltd [2008] NSWSC 139 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 Goody v Odhams Press Ltd [1967] 1 QB 333 Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 Habib v Nationwide News Pty Ltd [2010] NSWCA 34 Habib v Nationwide News Pty Ltd [2010] NSWSC 924 Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 Hayward v Thompson [1982] 1 QB 47 Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1 Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1 Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; (2001) 53 NSWLR 541 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 Kaschke v Gray [2010] EWHC 1907 (QB) Li v The Herald & Weekly Times Pty Ltd [2007] VSC 109 Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213 Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631 McBride v Walton [1994] NSWCA 199 McCrohon v Harith [2010] NSWCA 67 McDonald v Coles Myer Ltd (1995) Aust Torts Reports 81-361 Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643 Moit v Bristow [2005] NSWCA 322 Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 Myer Stores Ltd v Soo [1991] 2 VR 597 Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382 O’Hagan v Nationwide News Pty Ltd [2001] NSWCA 302; (2001) 53 NSWLR 89 Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 Plato Films Ltd v Speidel [1961] AC 1090 Polly Peck (Holdings) Plc v Trelford [1986] QB 1000 Praed v Graham (1889) 24 QBD 53 Rath v Guardian News and Media Ltd [2008] EWHC 398 (QB) Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327 Roux v Australian Broadcasting Commission [1992] 2 VR 577 Sadler & State of Victoria v Madigan [1998] VSCA 53 Scott v Sampson (1882) 8 QBD 491 Societe D'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”) (1924) 20 Ll L Rep 140 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306 Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348 Steele-Smith v Liberty Financial Pty Ltd [2005] NSWSC 398 Sutherland v Stopes [1925] AC 47 Television New Zealand Ltd v Ah Koy [2002] 2 NZLR 616 Television New Zealand Ltd v Prebble [1993] 3 NZLR 513 Television New Zealand Ltd v Quinn [1996] 3 NZLR 24 Tesco Stores Ltd v Guardian News & Media Ltd [2008] EWHC B14 (QB); [2009] EMLR 5 The Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254 Tipple v Buchanan [2005] BCL 715 (High Court of New Zealand, Panckhurst J, 20 July 2005) Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469 Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 Waterhouse v Broadcasting Station 2UE Pty Ltd [1985] 1 NSWLR 58 Walter v Alltools Ltd (1944) 61 TLR 39 Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387 Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028
TEXTS CITED:	D K Allen et al, Damages in Tort (2000) Sweet & Maxwell Fleming, The Law of Torts, 9th ed (1998) LBC Information Services Gatley on Libel and Slander, 9th ed (1998) Sweet & Maxwell Gatley on Libel and Slander, 10th ed (2004) Sweet & Maxwell Gatley on Libel and Slander, 11th ed (2008) Sweet & Maxwell D Ipp, "Problems with Fact-Finding" (2006) Australian Law Journal 667 A Kenyon Defamation: Comparative Law and Practice (2006) UCL Press McGregor on Damages, 18th ed (2009) Sweet & Maxwell
PARTIES:	Channel Seven Sydney Pty Ltd - Appellant Peter Mahommed - Respondent
FILE NUMBER(S):	CA 2009/298341
COUNSEL:	KP Smark SC - Appellant C A Evatt with RKM Rasmussen and MK Rollinson - Respondent
SOLICITORS:	Mallesons Stephen Jaques - Appellant Michael Corrigan Lawyers - Respondent
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 2005/20064
LOWER COURT JUDICIAL OFFICER:	Kirby J
LOWER COURT DATE OF DECISION:	9 July 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	[2009] NSWSC 631

Para
Statement of the case	12
Statutory framework	24
The matters complained of	25
FINDINGS OF THE PRIMARY JUDGE: BACKGROUND FACTS	27
The central characters	29
(a) The respondent	29
(b) Ms Smith	32
(c) Mr Trevor Steele	39
(d) Mr Tony Steele	40
The Liberty Financial transactions	47
The Steele-Smith proceedings	54
FINDINGS OF THE PRIMARY JUDGE: DEFENCES	57
Overview	57
The primary judgment: substantial truth of imputation 12	61
The primary judgment: contextual imputations	70
FINDINGS OF THE PRIMARY JUDGE: DAMAGES	75
Overview	75
The primary judgment: mitigation	81
(a) Dishonesty at trial	82
Use of the adverse trial findings	83
Sector identification	87
(b) Adverse findings in the Steele-Smith proceedings	97
Quantifying damages	101
ISSUES ON APPEAL	110
SUBMISSIONS	111
The appellant: substantial/contextual truth	112
The appellant: mitigation	116
The appellant: overruling Rochfort	121
The appellant: the Steele-Smith adverse findings	126
The appellant: damages	129
The respondent: substantial/contextual truth	130
The respondent: mitigation	132
The respondent: overruling Rochfort	133
The respondent: damages	137
CONSIDERATION	138
Substantial truth/contextual truth	138
DAMAGES	148
Mitigation: identification of sector of reputation	162
Mitigation: reception of Steele-Smith adverse findings; correctness of Rochfort	188
The decision in Rochfort	192
Rochfort – other authorities	203
New Zealand authorities: post-publication reputation	209
Use of post-publication material in defamation proceedings	214
The continuing nature of damages for defamation	219
(a) Theoretical basis for the award of interest	224
(b) Hurt to feelings caused by reaction of others post-publication	235
Conclusion on continuing nature of damages	236
False imprisonment cases	238
Analogy with common law principles	243
Whether judicial findings are analogous to convictions	249
Rochfort: conclusion	256
Admission of the Steele-Smith adverse findings: practical implications	257
Burstein v Times Newspapers Ltd [2001] 1 WLR 579	262
Damages	267
Orders	281