Cinevest Ltd v Yirandi Productions Ltd

[2001] NSWCA 68

Reported Decision: [2001] Aust Torts Reports 81-610
[2001] ACL Rep 145

New South Wales

Court of Appeal

CITATION:	CINEVEST LIMITED & ANOR v YIRANDI PRODUCTIONS LIMITED & ANOR [2001] NSWCA 68
FILE NUMBER(S):	CA 40909/99
HEARING DATE(S):	16/03/01
JUDGMENT DATE:	29 March 2001
PARTIES :	Cinevest Limited Oscar Scherl Yirandi Prouctions Limited Ted Egan
JUDGMENT OF:	Spigelman CJ at 1; Meagher JA at 57; Handley JA at 58

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	SC 20211/98
LOWER COURT JUDICIAL OFFICER :	Adams J

COUNSEL:	T Blackburn / R Glasson (Appellants) T Hale SC / M White (Respondents)
SOLICITORS:	Picone & Co (Appellants) Michael Frankel & Co (Respondents)
CATCHWORDS:	DEFAMATION - identification - whether questions of identification are for the jury to consider - Defamation Act 1974, s7A(3) - DEFAMATION - perverse decisions - connection between conduct relied on in imputations and defamation - "incompetence"
LEGISLATION CITED:	Defamation Act 1974
CASES CITED:	Cairns v John Fairfax & Sons Ltd [1983] 2 NSWLR 708 Costello v Random House Australia Pty Ltd (1999) 149 FLR 367 Dempster v Coates (NSW Court of Appeal, 11 April 1990, unreported) Drummoyne Municipal Council v Australian Broadcasting Corporation (1900) 21 NSWLR 135 Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386 Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 R v Young (1998-99) 46 NSWLR 681
DECISION:	1 Appeal allowed in part; 2 Set aside the verdict of the jury in respect of imputation (d); 3 Order a new trial with respect to imputation (d).

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40909/99
SC 20211/98

SPIGELMAN CJ

MEAGHER JA

HANDLEY JA

Thursday 29 March 2001

CINEVEST LIMITED & ANOR v YIRANDI PRODUCTIONS LIMITED & ANOR


The First Appellant (“Cinevest”) is a film company and the Second Appellant (“Scherl”) is its managing director. Cinevest and Scherl proposed to produce a film. The Second Respondent (Egan) was an instigator of the film project. A letter, purportedly on the First Respondent’s letterhead and signed by Egan, was sent to investors and potential investors in the proposed film. Cinevest was named in the letter; Scherl was not.

Both Cinevest and Scherl alleged that four imputations arose in the letter. The jury found, in relation to Scherl, that none of the imputations were conveyed. In relation to Cinevest, imputations (c) and (d), both of which were in terms that Cinevest was “incompetent”, were conveyed. However, the jury held that only imputation (c) was defamatory.

The first issue in the appeal was whether the trial judge erred in determining that the question of identification was a matter for the jury to decide under s7A of the Defamation Act 1974. The second matter in the appeal was whether the jury’s answer that imputation (d) was not defamatory was perverse or unreasonable.

Held

per Spigelman CJ, Meagher and Handley JJA agreeing

Identification

1 The concluding words of s7A(3) of the Defamation Act should be construed as if they read:

“The jury is to determine whether the matter complained of carries the imputation pleaded by the plaintiff and if it does, whether the imputation is defamatory of the plaintiff .”


2 Identification is an issue for the jury.

Perverse Decision

3 The jury found that the matter complained of conveyed the imputation that Cinevest was incompetent by reason of particular conduct. That conduct concerned the business affairs of Cinevest in its dealing with “investors”. That imputation must have an effect on the reputation of Cinevest in its business affairs. The finding that the imputation was not defamatory was perverse or unreasonable.

Cairns v John Fairfax & Sons Ltd [1983] 2 NSWLR 708 distinguished. Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386, Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 and Costello v Random House Australia Pty Ltd (1999) 149 FLR 367, referred to.

Orders

1 Appeal allowed in part.

2 Set aside the verdict of the jury with respect to imputation (d).

3 Order a new trial with respect to imputation (d).

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40909/99
SC 20211/98

SPIGELMAN CJ

MEAGHER JA

HANDLEY JA

Thursday 29 March 2001

CINEVEST LIMITED & ANOR v YIRANDI PRODUCTIONS LIMITED & ANOR

JUDGMENT

1    SPIGELMAN CJ: The First Appellant (“Cinevest”) is a company engaged in the production of films. The Second Appellant (“Scherl”) is the managing director of the First Appellant and describes himself as its “alter ego”. The First Appellant under the direction of the Second Appellant proposed to produce a feature film called “The Drover’s Boy” during 1998. In order to raise funds for this film it produced a prospectus.

2    The Second Respondent (“Egan”) was an instigator of the project which culminated in the proposed film “The Drover’s Boy”.

3    In about April 1998 a letter was dispatched to investors and potential investors in the proposed film. The letter was headed “Letter to Potential Investors”. It purported to be on the letterhead of the First Respondent (“Yirandi”) and was signed by Egan.

4    The letter asserted that an amount of $2.2 million had been raised through the prospectus issued by Cinevest. The letter said that Cinevest elected to resign from the project as and from August 1997. It was asserted that an amount of only $1.25 million of the funds originally raised was passed on to the new producer, Yirandi.

5    One particular paragraph, being the eighth paragraph of the letter, was of particular significance to the issues on this appeal. It said:

“After twelve months of disquiet and concern about Cinevest’s ability to take this great story into a great film, and after acts by them that I consider illegal, I went to the investors seeking support to have Cinevest removed. I was unable to discover any instance where Cinevest had returned money to investors in the fifteen films they had produced. Cinevest had made no appointments, had done virtually nothing towards making the film. They merely shuffled our money around their four companies.”

6    This was the crucial paragraph with respect to the imputations which arise for decision in the present case. The ninth and tenth paragraphs are referred to with respect to other imputations. They read:

“90 percent of investors supported me, and Cinevest elected to resign, effective 15 August 1997. It was not until December 1997 that they returned the last of the remaining funds. A total of only $1,250,000 was handed back to our own new licensed company, Yirandi Productions, which has me as manager.
In the prospectus I am required to state that Cinevest has made a claim to be paid an additional $1.3 million but I’m not allowed to comment. In this letter I am prepared to say that it is simply a greedy, petulant, opportunistic grab at whatever is left in the fund plus a bit more. It is I who will be after them, to recover what I consider to be misappropriated funds. I will undertake this as an investor, at no cost to the Fund, confident that I will be the victor in any legal battle.”

7    Cinevest is mentioned by name in the letter. Scherl is not mentioned by name. Accordingly, in his cause of action an issue of identification arose.

8    Each of Cinevest and Scherl allege that the same imputations arose, to use the pleading of Cinevest:

“(a) That it behaved fraudulently in relation to its work on the proposed film ‘The Drover’s Boy’.
Particulars:
This imputation arises from the eighth and tenth paragraphs of the text of the letter.
(b) That it misappropriated almost $1 million from the first defendant.
Particulars:
This imputation arises from the eighth and ninth paragraphs of the letter.
(c) That it was incompetent in its work for the proposed film ‘The Drover’s Boy’.
Particulars:
This imputation arises from the eighth paragraph of the letter.
(d) That it was incompetent in that it failed to return money to the investors in any of the fifteen films it had produced.
Particulars:
This imputation arises from the eighth paragraph of the letter (particularly the second sentence).”

9 During the course of the case, an issue arose as to whether identification was a matter that had to be determined by the jury or by the judge, in accordance with a division of functions in s7A of the Defamation Act 1974. Adams J determined that this was a matter for the jury and, accordingly, left the matter to the jury in the form of a composite question in terms of the four imputations asserted in the proceedings, denoted (a) to (d) inclusive above. The form of the question, to quote only the first of the imputations left to the jury with respect to Scherl, was as follows:

“Has the plaintiff Mr Oscar Scherl satisfied you that the publication conveyed the following imputations (or any imputations not substantially different from them):
(a) That Mr Scherl behaved fraudulently in relation to his work on the proposed film ‘The Drover’s Boy’?
…”

10    Imputations (b), (c) and (d) were set out in the same form. The jury answered “No” to all four of these imputations in the case of Scherl.

11    In the case of Cinevest the jury answered “No” to the equivalent question with respect to imputations (a) and (b). However it answered “Yes” with respect to imputations (c) and (d). They were put to them in the following way:

“Has the plaintiff Cinevest Limited satisfied you that the publication conveyed the following imputations (or any imputations not substantially different from them)
…
(c) That Cinevest was incompetent in its work for the proposed film ‘The Drover’s Boy’?
(d) That Cinevest was incompetent in that it failed to return money to investors in any of the fifteen films it had produced?”

12    A further question put to the jury was:

“Has the plaintiff Cinevest Limited satisfied you that any imputation in question 1 to which you have given a YES answer was defamatory?”

13    The jury answered this question “Yes” with respect to imputation (c) and “No” with respect to imputation (d).

14    Accordingly, the answer of the jury is that the matter complained of did in fact convey both imputations (c) and (d), but only imputation (c) was defamatory of Cinevest.

15    The two matters that arise on appeal are: Did his Honour err in leaving the question of identification to the jury? Is the jury’s answer to the question of whether or not imputation (d) was defamatory perverse or unreasonable so as to allow this Court to intervene?

Is Identification an Issue for the Jury?

16 The first ground of appeal turns on the proper construction of s7A of the Defamation Act 1974. That section provides:

“7A(1) If proceedings for defamation are tried before a jury, the court and not the jury is to determine whether the matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff and, if it is, whether the imputation is reasonably capable of bearing a defamatory meaning.
(2) If the court determines that:
(a) the matter is not reasonably capable of carrying the imputation pleaded by the plaintiff, or
(b) the imputation is not reasonably capable of bearing a defamatory meaning,
the court is to enter a verdict for the defendant in relation to the imputation pleaded.
(3) If the court determines that:
(a) the matter is reasonably capable of carrying the imputation pleaded by the plaintiff, and
(b) the imputation is reasonably capable of bearing a defamatory meaning,
the jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory.
(4) If the jury determines that the matter complained of was published by the defendant and carries an imputation that is defamatory of the plaintiff, the court and not the jury is:
(a) to determine whether any defence raised by the defendant (including all issues of fact and law relating to that defence) has been established, and
(b) to determine the amount of damages (if any) that should be awarded to the plaintiff and all unresolved issues of fact and law relating to the determination of that amount.
(5) To the extent that section 88 of the Supreme Court Act 1970 applies to proceedings for defamation, it applies subject to the provisions of this section.”

17    The construction of this section requires reference to subsections (1) and (2) of s9 which are as follows:

“9(1) Where a person publishes any report, article, letter, note, picture, oral utterance or other thing, by means of which or by means of any part of which, and its publication, the publisher makes an imputation defamatory of another person, whether by innuendo or otherwise, then for the purposes of this section:
(a) that report, article, letter, note, picture, oral utterance or thing is a matter , and
(b) the imputation is made by means of the publication of that matter.
(2) Where a person publishes any matter to any recipient and by means of that publication makes an imputation defamatory of another person, the person defamed has, in respect of that imputation, a cause of action against the publisher for the publication of that matter to that recipient:
(a) in addition to any cause of action which the person defamed may have against the publisher for the publication of that matter to that recipient in respect of any other defamatory imputation made by means of that publication, and
(b) in addition to any cause of action which the person defamed may have against that publisher for any publication of that matter to any other recipient.”

18 This aspect of the appeal arises because of the concluding words of s7A(3) which, to repeat, are: “The jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory”. The Appellant’s case is that the jury is given only two tasks to perform: whether the publication “carries the imputation” and “whether the imputation is defamatory”. In neither respect is there any express reference to the jury deciding anything about the person who is the plaintiff. That is to say the phrase “carries the imputation” does not extend to the issue of determining about whom the imputation is conveyed. Similarly the determination of whether the imputation is defamatory does not extend to a determination of whether or not the imputation is defamatory of a particular person.

19 The first difficulty with the Appellants’ construction is that in the very next subsection the legislature has acted on the basis that the issues of both publication and of identification have in fact been determined by the jury. To repeat the introductory words of s7A(4):

“If the jury determines that the matter complained of was published by the defendant and carries an imputation that is defamatory of the plaintiff, the court and not the jury is …”

20    The two sets of italicised words - “published by the defendant” and “of the plaintiff” - do not appear expressly as matters for jury determination in subsection (3). However, they are assumed to have been so determined on the face of the immediately succeeding subsection.

21    In my opinion the context of the legislation requires the concluding words of subsection (3) to be construed as if they read:

“The jury is to determine whether the matter complained of carries the imputation pleaded by the plaintiff and if it does, whether the imputation is defamatory of the plaintiff .”

22    When the legislature used the words “carries the imputation” in the concluding part of subsection (3), the definite article “the” was intended to be a reference back to the phrase in subsection (3)(a) “the matter is reasonably capable of carrying the imputation pleaded by the plaintiff”.

23    There is no similar reference to the plaintiff in subsection 3(b) which, of itself, would justify the addition of the words “of the plaintiff” after the words “whether the imputation is defamatory”. However, the same conclusion arises by reason of the use of the phrase “the matter complained of” in the part of subsection (3) which qualifies both of the issues for jury determination.

24    By subsection 9(2) a “person defamed” is given “a cause of action” for publication of “matter” and that is so “in respect of that imputation”. The reference to “that” in this part of subsection (2) is a reference to the immediately preceding words of that subsection namely: “an imputation defamatory of another person”. Accordingly, in this respect the reference to the person defamed is part of the definition of the cause of action encompassed, where second appearing, by the word “imputation” unadorned by repetition of the words “of another person”.

25    Furthermore, a cause of action is given to “the person defamed” for publication of “matter”. That word is defined in s9(1) for purposes of s9 in terms of a publication by means of which “the publisher makes an imputation defamatory of another person”. Again, the words “of another person” are not repeated when the word “matter” is used subsequently in subsection (2).

26 When, in s7A(3), the words “matter complained of” are employed, they are intended to encompass proceedings by a person who asserts that an imputation is conveyed about him/her/itself and that that imputation is defamatory of that same person. It was on that basis that the legislature inserted the reference “of the plaintiff” in s7A(4).

27 For these reasons the text of s7A(3) should be construed as if it contained the additional words I have emphasised in par [21] above. This is not to add words to the subsection but to construe the section with a particular effect, which is more readily expressed by rewriting the section in a form containing additional words. (See R v Young (1998-99) 46 NSWLR 681 at [6], [12] to [16]. Identification is an issue for the jury.

A Perverse Decision?

28    The second aspect of the appeal concerns the answers given to the questions by the jury. The jury found in answer to (d) that the matter complained of conveyed the imputation of incompetence in the specific respect alleged. Nevertheless the jury found that the imputation was not defamatory.

29    A similar issue arose in Cairns v John Fairfax & Sons Ltd [1983] 2 NSWLR 708. In that case a jury found that an imputation, to the effect that the plaintiff was “improperly involved in a romantic or sexual association”, was not defamatory. The word “improper” in the question left to the jury is analogous, but not equivalent, to the word “incompetent” in the two imputations in the present case. In Cairns v Fairfax Hutley JA said at 710:

“It was accepted that to succeed the appellants had to show that upon the most favourable meaning of the imputation, to the upholding of the judgment, the second finding of the jury was perverse.
In my opinion this amounts to deciding that to say of a married woman (and also of a married man) that she (or he) has an improper romantic association with a married member of the opposite sex was necessarily defamatory. Not every statement that a person has done something improper is defamatory; for example, spitting in public is improper, but a jury’s decision that a statement that ….spits in public was not defamatory could not be set aside as perverse. The imputation of criminality is not always defamatory ( Berry v British Transport Commission [1961] 1 QB 149 at 166), the imputation of mere impropriety must be in the same position.
The imputation of an ‘improper’ romantic relationship could cover a steep gradation of activity. Demonstrations of romantic interest by a married woman in a married man may be improper, in that they embarrass his wife, but a jury could think they did not defame him …

The imputation of an improper adulterous relationship would be harder to justify as not being defamatory, but the reputations of Antony and Cleopatra have not been lowered in the eyes of the public by their romance and in other days the title of the King’s Mistress was one of honour …
In my opinion, the simultaneous finding that there was the allegation of improper adultery between the two appellants and the finding that this is not defamatory is unusual, but not perverse in these days. The judgment of the jury as to what is the effect on reputations of misconduct in the field of correct sexual morality is not likely to be rejected. It has been strengthened by the abandonment of official standards.”

30    Mahoney JA also posed the relevant question in terms of whether or not the jury’s verdict was “perverse” (at 718F). His Honour found that the word “improperly” in the imputation “conveyed no more than that the plaintiff’s involvement in the association was contrary to the obligations of their marriages or, more accurately, that it was improper because it was so. It was not suggested that the involvement was improper for any other reason”. (719B). His Honour concluded:

“It was, in my opinion, open to the jury to conclude that such a reader would not see every act or association which was inconsistent with the obligations of a man’s marriage as being (to use a term which I mean for this purpose to be equivalent to defamatory) discreditable. There are, of course, some acts or associations inconsistent with the moral or social obligations of the marriage state which would be seen as necessarily discreditable. Not all of them must be seen to be so. Within …… limits, it is in such a case as this for the jury to determine what, in the relevant society, is the view of reasonable or right thinking people on such a matter. I do not think that the jury is this case would be going beyond proper limits if it concluded that not every breach of the relevant obligations of marriage would be discreditable.
But was it open to the jury to conclude that a sexual association in breach of such obligations would yet not be such? I think that it was. Such a question is not to be answered by reference to the current religious or ethical principles as such. The defamatory nature of the imputation is to be judged by reference to the general community standards … Such an association would, I think, be seen as contrary to the current religious or ethical principles, but it would be open to the jury to conclude for example, that the general community standards by which a sexual association is to be judged are not those of current religious or ethical principles. In my opinion, it would be open to the jury to conclude that a reasonable or right thinking member of the community would take the view that religious or ethical principles, as currently understood or propounded, impose too high or too rigid a standards of sexual morality and that the standards by which the community judges sexual associations are, if not lower and more flexible, at least different.”

31    Samuels JA dissented. His Honour posed the test in terms of “Was the jury’s verdict unreasonable?” (716G). His Honour held that the question:

“…admitted only of an affirmative answer; and the negative answer was, beyond argument, unreasonable. The imputation found alleged an association to which the jury attached a pejorative epithet - improper- and which was contrary to obligations undertaken to a marriage partner. I fail to understand how ordinary members of the community applying current community standards could fail to regard such an implication as defamatory.” (717D-E)

32    This authority on the word “improper” is not determinative of a case involving the word “incompetent”.

33    The use of the word “improper” in an imputation said to be defamatory poses particular difficulties as pointed out by Hunt J in Hepburn v TCN Channel Nine Pty Ltd [1984] 1 NSWLR 386 at 403-404 and Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260 at 271-272. See also Costello v Random House Australia Pty Ltd (1999) 141 FLR 367 at 379-381 per Higgins J.

34    In Hepburn, Hunt J referred to Cairns v John Fairfax and said at 403G:

“The difference between the views expressed by the members of the Court of Appeal related not to how the matter complained of should have been construed (for that task had already been carried out by the jury) but to how the imputation which the jury accepted would have been construed by that jury.”

35    His Honour was concerned to establish the necessity for precision in the pleading of imputations. The same issue arose in Morris v Newcastle Newspapers where his Honour said:

“The description of the plaintiff’s attempted intervention as ‘improper’ is, of course, one of very uncertain import. The trouble that can be caused by the inclusion of the word ‘improper’ in an imputation is well illustrated in the case of Cairns & Morosi v John Fairfax & Sons Limited [1983] 2 NSWLR 708; it is discussed in Hepburn v TCN Channel Nine Pty Limited [1984] 1 NSWLR 386 at 403-404. For this reason, the word ‘improper’ should not be used in imputations unless the context in which it is so used makes clear its intended meaning (and the degree of impropriety involved). Where the matter complained of itself uses the word ‘improper’, the pleaded imputation should be expressed in terms which demonstrate the precise sense (that is, the degree of impropriety) in which the plaintiff contends the word would have been understood …”. (271F-G)

36    The issue in the present case turns on whether the word “incompetent”, at least with respect to a corporation engaged in business, is of the same character as the word “improper”.

37    The 9th edition of Gatley on Libel and Slander, London, (1998), states in par [2.7]:

“To say of a person carrying on any trade or profession, or holding any office, that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation in his trade, profession or office.”

38    In pars [2.26] and following, the authors return to the proposition that an imputation that tends to injure a person’s reputation in a business, trade, profession, calling or office is defamatory and say at [2.26]:

“To be actionable, words must impute to the plaintiff some quality which would be detrimental, or the absence of some quality which is essential, to the successful carrying on of his office, profession or trade.”

39    At par [2.27] the authors conclude:

“It is not, however, necessary that there should be an imputation of conduct which is morally wrong, an imputation of incompetence will do: ‘… words may be defamatory of a trader or businessman or professional man, though they do not impute any known fault or defect of personal character. They can be defamatory of him if they impute lack of qualifications, knowledge, skill, capability, judgment or efficiency in the conduct of his trade or business or professional activity.”

40    Later in par [2.27] the authors say:

“… if there is an imputation of misconduct or incompetence in the operation of a company’s business that would be a libel on the company.”

41    The test that must be met for this Court to interfere with a jury’s verdict is a high one. The jury’s finding must be rejected as perverse or unreasonable. The jury found that the matter complained of conveyed an imputation of incompetence with respect to the affairs of the business. The word “incompetent” did not appear in the matter complained of. This was the imputation found to be conveyed by the jury.

42    The word “incompetent” also appeared in imputation (c) which the jury found to be defamatory. I do not find there to be a necessary inconsistency between these two findings. This is not a case where the jury found an imputation to be defamatory but found republication of the same imputation not to be defamatory. (As in Dempster v Coates (NSW Court of Appeal, 11 April 1990, unreported)). The issue in this case is whether, there being an imputation of incompetence by reason of certain conduct, the jury must logically have concluded that the imputation, in the context, was defamatory.

43    The Appellants submit that the allegation of incompetence on the part of a producer of films is necessarily defamatory and the finding to the contrary is perverse and unreasonable. The Respondents submit that it was open to the jury to make the finding with respect to imputation (d). They submitted that the word “incompetent” was no more conclusive than the majority of this Court held the word “improper” to be in Cairns v John Fairfax.

44    TS Hale SC who appeared for the Respondents submitted that in accordance with the practice of this Court to require precision in the drafting of imputations, the balance of imputation (d) in the words “in that it failed to return monies to investors in any of the fifteen films”, should be understood as if it were a “definition” of the term “incompetence”. I do not agree that the use of a word like “definition” is appropriate. The additional words in the imputation refer to the manifestation of an “act or condition” of the First Appellant which the jury identified to be that of “incompetence”. It is not correct to suggest that the jury’s finding implied that the word “incompetence” was being used in some special sense. Rather, the natural and ordinary meaning of that word was satisfied by reason of particular conduct. The “act or condition” attributed to the plaintiff (see e.g. Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 136-137), was that of incompetence by the conduct specified.

45    The defamatory sting is in the word “incompetent”. It may well be that a failure to return money to the investors over the course of making fifteen films would not necessarily indicate anything adverse about the producer of those films. Film making is a notoriously difficult business particularly in Australia. Many films serve promotional or educational purposes with no objective of return of funds. Even, in the case of a film made for “investors”, a failure to return money to investors may not be a manifestation of “incompetence” at all.

46    It would have been perfectly appropriate for the jury to find that an imputation of ‘incompetence’ was not in fact conveyed, by reason of the fact that the conduct specified in the pleaded imputation did not constitute “incompetence”. Furthermore, there will be cases in which conduct of a particular character is found to manifest “incompetence” but incompetence in the specified respect is not defamatory. That may be so because incompetence of that character does not impinge on a person’s reputation in a relevant way, e.g. to say a person is an incompetent golfer will not affect his or her trade reputation.

47    That cannot, in my opinion, be said of the imputation in the present case. The particular of the conduct relied on concerned the business affairs of the corporation in its dealings with “investors”. That must, in my opinion, have an effect on the reputation of that corporation in its business affairs. The appeal should be allowed.

Orders

48    The Appellants submitted that if the Court found against the Appellants with respect to the first matter but in favour of the Appellants on the second matter, then the appeal should be allowed with respect to both Appellants. There is no proper basis for doing so.

49    With respect to the Second Plaintiff the jury found that none of the imputations had been made out. Accordingly, the question of whether or not any such imputations were defamatory was irrelevant. The appeal of the Second Appellant must be dismissed.

50    The First Appellant submitted that, if it succeeded on the second matter raised in the appeal, then, because the jury had not properly performed its duty with respect to the second question on imputation (d), all questions should be remitted, save those on which the Appellant won below. It submitted that with respect to the First Appellant, imputations (a) and (b) should be remitted; imputation (d) should only be remitted with respect to whether or not it is defamatory. The Court should not remit either question with respect to imputation (c) or the first question with respect to imputation (d). This is a convenient but insupportable submission.

51    There is no warrant for remitting imputations (a) and (b) for further trial. There is no aspect of any basis for the error with respect to imputation (d) that could impinge on either of these two imputations.

52    The position with respect to imputation (c) is not so clear. The word “incompetent“ appears in both imputations. The Court is not in a position to determine precisely what mental process the jury went through in order to answer the two questions with respect to imputation (d) in the way it did. Nevertheless, the two answers about imputation (c) are perfectly logical and supportable. I do not see any reason why the error with respect to (d) should cast doubt on the answers with respect to (c).

53    The position is otherwise with respect to the first question relating to imputation (d), namely whether that imputation was conveyed. It may very well be that the jury’s thought processes hinged on whether or not the particular behaviour said to be incompetent was in truth a matter of competence in a film maker. The two questions are inextricably intertwined. More careful deliberation may well lead to a different answer with respect to whether or not the behaviour of failing to return money to investors constituted incompetence in the natural and ordinary meaning of that word.

54    Accordingly, in my opinion, with respect to the Second Plaintiff, the order should be that the matter be remitted for a new trial on imputation (d).

55    Two issues were argued on appeal. The Second Appellant lost his ground of appeal. The First Appellant was successful in part. Both Appellants were represented by the same solicitors and counsel. There is no relevant distinction. The two issues were of comparable complexity. The proper order as to costs is that there should be no order.

56    The orders I propose are:

1 Appeal allowed in part.

2 Set aside the verdict of the jury with respect to imputation (d).

3 Order a new trial with respect to imputation (d).

57    MEAGHER JA I agree with Spigelman CJ.

58    HANDLEY JA: I agree with Spigelman CJ.

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