Cotter v John Fairfax Publications Pty Ltd - [2003] NSWSC 503

No judgment structure available for this case.

CITATION: Cotter v John Fairfax Publications Pty Ltd [2003] NSWSC 503

HEARING DATE(S): Monday 26 May 2003 - Tuesday 3 June 2003

JUDGMENT DATE:
22 July 2003

JUDGMENT OF: Simpson J

DECISION: Damages of $100,000 awarded to plaintiff

CATCHWORDS: defamation - justification defence - contextual truth defence - failure to comply with legal obligations - publication of imputations that further injure the reputation of the plaintiff - interstate defences - aggravated damages

LEGISLATION CITED: Defamation Act 1974, (NSW) s7A, s15, s16, s46, s46A
Local Government Act 1919 (NSW)
Local Government Act 1993, (NSW) s360, s373, s442, s443, s448, s449, s451, s457,
Evidence Act 1995 (NSW) s45, s140
Motor Accidents Compensation Act 1999 (NSW) s134

CASES CITED: Allen v John Fairfax and Sons Ltd, unreported, 2 December 1988
Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, unreported, 24 December 2002
Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225
Briginshaw v Briginshaw (1938) 60 CLR 336
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Cassell & Co Ltd v Broome [1972] AC 1027
Clark v Ainsworth (1996) 40 NSWLR 463
Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739; unreported, 7 September 2001
John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 451
Jones v Dunkel (1959) 101 CLR 298
Polly Peck (Holdings) plc v Trelford [1986] 1 QB 1000
Triggell v Pheeney (1951) 82 CLR 497

PARTIES :
Barry Cotter - Plaintiff
John Fairfax Publications Pty Ltd - Defendant

FILE NUMBER(S): SC 20360/97

COUNSEL: T Molomby SC with R Rasmussen - Plaintiff
TD Blackburn with ATS Dawson - Defendant

SOLICITORS: Joseph G Capogreco & Associates - Plaintiff
Freehills - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

SIMPSON J

Tuesday 22 July 2003

20360/97
Barry COTTER v JOHN FAIRFAX PUBLICATIONS PTY LTD
JUDGMENT

1 HER HONOUR: By statement of claim filed on 24 April 1997 the plaintiff, Mr Barry Cotter, claims damages against the defendant, John Fairfax Publications Pty Ltd, in respect of defamatory imputations published by it on 11 April 1997.

2 The matter of which the plaintiff complains appeared in the form of a news item in The Sydney Morning Herald, a daily newspaper circulating principally in Sydney, but also in other states and territories of Australia. It is relatively short, and it is convenient here to set it out in full. The reproduction of the news item which is in evidence shows that it appeared on page 3 of the newspaper and occupied a single column on the far right hand side of the page. At the top of the column was a photograph, identified as a photograph of the plaintiff, and captioned:

“… under fire from Marrickville council opponents.”

3 A headline reads:

“Probe into Mayor’s Decade of Deals”

4 The by-line of the author, Robert Wainwright, described as “Local Government Writer” followed. The body of the news item reads:

“Business interests and property purchases of the Mayor of Marrickville, Councillor Barry Cotter, have been referred to the Department of Local Government for investigation.

The council’s general manager, Mr Colin Mills, has taken the action as a result of questions about Cr Cotter’s business affairs, lodged last week by four councillors who are political opponents.

They have detailed a decade of property and business transactions by Cr Cotter and asked why some had not been noted on his annual pecuniary interest declaration.

In a matter to be discussed at next Tuesday’s council meeting, the opponents also raise questions about Cr Cotter’s business relationship with Mr Evan Lee, an architect and ALP member, who prepared the design brief for the council’s proposed $28 million Civic Centre development on the site of the old Marrickville Hospital.

Cr Cotter and Mr Lee are directors of Evbaca Pty Ltd (formerly Evan Lee Management Pty Ltd), which owns a block of flats in Dulwich Hill. They also have shares in a house in Newtown.

They were appointed directors of Evbaca on March 21, 1996, and Cr Cotter informed Mr Mills four days later. On March 28 Cr Cotter attended a meeting of the project team, of which he was not a member, where there were discussions about quotations for the preparation of a design brief. A week later, the project team awarded the contract to Mr Lee’s architect firm, Evan Lee Pty Ltd.

At a council meeting on June 18, Cr Cotter moved the motion that accepted the design brief prepared by the company. A subsequent ‘hospital site probity review’ prepared for the council by Fraud Prevention Services Pty Ltd warned that ‘attention should be paid in the drafting of the tender brief to ensure that Evan Lee Pty Ltd does not have an advantage over other tenders.’

It said: ‘If the design brief drafted by Evan Lee becomes the basis of the tender brief, any possible concerns of the other tenderers could be increased.’

Mr Lee’s consortium is one of a number of companies which have lodged expressions of interest in tendering for the project if it goes ahead.

Cr Cotter told a steering committee in February that he would step aside if discussions reached a stage of approving a contract for the project.

He conceded yesterday that he had misunderstood the requirements of the Act to declare directorships and property interests, and has asked Mr Mills to put his mistake on the public record.

But Cr Cotter denied there was any impropriety in his association with Mr Lee, insisting he played no part in awarding the contract. Cr Cotter said he attended the March 28 meeting, where he ‘made a few comments’ and left.

‘By law I am not required to declare an interest but it was always my intention to do so when I believed a decision would confer a financial benefit for Mr Lee,’ he said.

Mr Lee said he had tried to discuss the Civic Centre development with Cr Cotter but the mayor had refused: ‘Barry won’t even talk to me about it.’

Of the matters referred to the department, Mr Mills said in a letter to Cr Sylvia Hale that Cr Cotter had admitted failing to include in his 1995-96 declaration of pecuniary interests that he was a director in three companies: Jowai Holdings Pty Ltd; Binco Pty Ltd; and Jellyfish Productions Pty Ltd. He also did not include details of two properties he owned in Glebe Point Road, Glebe, and Hordern Street, Newtown.”

5 On 14 June 2001 a jury, empanelled pursuant to the provisions of s7A of the Defamation Act 1974, found that the item conveyed three imputations that defamed the plaintiff. They are:

“(b) That he sought, by attending as Mayor of Marrickville a meeting of a project team of which he was not a member, to influence the decision of that team in favour of an architect with whom he had a private business relationship;

(d) that there are reasonable grounds to suspect that as a member of Marrickville Council he has engaged over a period of ten years in business and property deals which have conflicted with his duties as a member of council;

6 Following the jury determination the defendant filed a defence, which was subsequently amended at least twice. As the matter went to trial, the defendant relied upon only two defences: a defence that each of imputations (b) and (f) is substantially true and relates to a matter of public interest as provided by s15 of the Defamation Act; and a defence of contextual truth, as provided by s16 of the Defamation Act. By this defence the defendant pleaded that, by reason of two further imputations, published contextually to the imputations of which the plaintiff complains, each of which it asserts to be substantially true and to relate to a matter of public interest, the publication of the imputations of which the plaintiff complains did not further injure his reputation. For completeness, I here mention that the defendant also “pleaded back” imputations (b) and (f) as pleaded by the plaintiff, signifying its intention to rely on either of those found to be substantially true in support of the s16 defence of contextual truth. There is no defence of justification to imputation (d).

7 Initially, the defendant pleaded the contextual imputations as follows:

“(1) The plaintiff, as Mayor of Marrickville Council failed over a substantial period of time to comply with his obligations of disclosure as a councillor;

8 At the commencement of the trial, senior counsel for the plaintiff sought to have determined as a preliminary issue whether the matter complained of conveyed the contextual imputations pleaded. Having heard argument I ruled that contextual imputation (1) was conveyed, but that contextual imputation (2) was not. The defendant thereupon sought, and was granted, leave to amend. In its final form, contextual imputation (2), which I then held was conveyed, reads:

Although there is room for an argument that these imputations do not differ in substance, I permitted the defendant to plead both in reliance on the decision of Hunt J (as he then was) in Allen v John Fairfax and Sons Ltd, unreported, 2 December 1988.

* * *

9 It is convenient now to recount, briefly, some historical matters.

background facts

10 The area of factual contention was relatively narrow; the dispute between the parties, which is significant, concerns what inferences should be drawn from the established, and largely non-controversial, facts.

11 At the time of the publication, the plaintiff held the office of Mayor of the Marrickville Council (“the Council”). He was a member of the Australian Labor Party. The Marrickville municipality is to be found in the inner west of the city of Sydney. The plaintiff had held the office of Mayor since 1991, and retained it up to, and including, the date of hearing. He was first elected to the Council as an alderman in September 1987.

12 When he was first elected to the Council, and when he first assumed the office of Mayor, local government and councils were subject to the provisions of the Local Government Act 1919. That Act was repealed and replaced by the Local Government Act 1993 (“the 1993 Act”), which came into effect on 1 July 1993.

13 The 1993 Act effected considerable changes in the administration of local government. It introduced formally, for the first time, standards concerning the disclosure of pecuniary interests by members of councils, in circumstances where those interests might be affected by decisions in which councillors participated, and where decisions might (or might be perceived to be) affected by the interests. The interests to which the 1993 Act is addressed are pecuniary interests. Those provisions are of central importance to the defence of contextual truth. By s442(1) a pecuniary interest is defined as:

“… an interest that a person has in the matter because of a reasonable likelihood or expectation of appreciable financial gain or loss to the person or another person with whom the person is associated as provided in section 443.”

14 As indicated in the closing words of s442(1), s443 casts additional light upon, and extends the reach of, the concept of “pecuniary interest”. By sub-s(2) a person is taken to have a pecuniary interest in a matter if, inter alia, a partner of that person has a pecuniary interest in the matter. By sub-s(3)(a), a partner of a person who has a pecuniary interest in a matter is not taken to have a pecuniary interest in the matter if he or she is unaware of the partner’s pecuniary interest.

15 By s451(1) a councillor or a member of a council committee who has a pecuniary interest in any matter with which the council is concerned and who is present at a meeting of the council or committee at which the matter is being considered must disclose the nature of the interest to the meeting as soon as practicable. By sub-s(2) the councillor or member must not be present at, or in sight of, the meeting of the council or committee at any time during which the matter is being considered or discussed, or at any time during which the council or committee is voting on any question in relation to the matter.

16 By s457 a person does not, by reason of non-disclosure, breach s451 if he or she did not know and could not reasonably have been expected to have known that a matter under consideration at a meeting was one in which he or she had a pecuniary interest.

17 The 1993 Act also contains provisions obliging councillors to prepare and submit to the General Manager of the council returns disclosing pecuniary interests, the first within three months of election as a councillor, and thereafter annually. A form for the purpose is prescribed by regulation. The form contains provision for disclosure of interests in real estate; sources of income (with separate provision for identification of income from an occupation, from a trust, and from other sources); gifts; contributions to travel; interests and positions in corporations; positions in trade unions and professional business associations; debts; disposition of property; and discretionary disclosures.

18 By s440(1) all councils were required to prepare and adopt a code of conduct to be observed by councillors, members of staff, and delegates; and, by sub-s(3), to review its code of conduct and make any appropriate changes within twelve months of each council election. The 1993 Act does not appear to contain any provisions rendering the Code of Conduct enforceable at law.

19 In each of the years 1993/4, 1994/5, and 1995/6, the plaintiff submitted returns of pecuniary interests in the prescribed form. It will be necessary, at a later point in these reasons, to consider in more detail the content of the information thus provided by him.

20 In or about May 1994 the Council adopted a Code of Conduct (exhibit 14, tab 16). (The cross-examination of the plaintiff, by reference to the document itself, suggested that this was done in March 1994, but this does not appear to be in accordance with an extract of the Council minutes, and there is no significance in the discrepancy.) Part 4 of the Code deals with conflicts of interest. The Part deals briefly with pecuniary interests, merely stating that a person who has a pecuniary interest must comply with the 1993 Act. It deals a little more fully with non-pecuniary interests, identifying a non-pecuniary interest as:

“… any private or personal interest which does not pertain or relate to money (e.g. kinship, friendship, membership of an association, society or trade union or involvement or interest in an activity).”

“Where the interest in question is a non-pecuniary one, the person with the interest should not do anything which he or she could not justify to the public and should avoid any occasion for reasonable suspicion or the appearance of improper conduct or the partial performance of his or her public or professional duty.

The onus is on the individual to declare an interest whether perceived or real. Such disclosure should be made promptly and in writing (or in cases of urgency made orally and confirmed in writing) to the council, mayor or general manager as appropriate.”

21 In August 1996 the Council adopted a revised Code of Conduct (exhibit 14, tab 17). The present significance of the new Code of Conduct lies in the expansion of the stated policy on non-pecuniary interests.

22 On 15 July 1997 the Council adopted a policy entitled “Conflicts of Interest”. This policy restated the statutory definition of “pecuniary interest”, and the previously adopted definition of “non-pecuniary interest”.

23 Under the heading of “NON-PECUNIARY INTERESTS”, the following appears:

(a) a person with a private or personal interest is not prejudicially influenced in the performance of his or her public or professional duties by that interest; or

24 There followed some detailed guidance on how to decide whether a conflict of interest exists. Unlike disclosure of a pecuniary interest, disclosure of a non-pecuniary interest again did not necessarily disqualify the person concerned from participation in debate or decision-making.

25 By s360(1) of the 1993 Act, regulations may be made providing for the conduct of meetings of councils and council committees of which all members are councillors. By sub-s(2), a council may adopt a code of meeting practice that incorporates and supplements (consistently with the regulations) those provisions. By sub-s(3) meetings of council and council committees (where all members of the committee are councillors) must be conducted in accordance with a code of meeting practice adopted by the council.

26 From time to time, in accordance with s360, the Council adopted successive codes of meeting practice. In general terms the Code (for example, exhibit 14, tab 19, dated March 1998) again restated or paraphrased the statutory provisions and the provisions of the Codes of Conduct, relating to conflicts of interest, as to both pecuniary and non-pecuniary interests. Part 7, under the heading “NON-PECUNIARY INTERESTS” states:

“59(1) A Councillor, member of staff or delegate must avoid and appropriately resolve any conflict or incompatibility between his or her private or personal interests and the impartial performance of his or her public or professional duties. [Policy]”

27 For some years the plaintiff had known a man called Evan Lee. Mr Lee was an architect. He was, like the plaintiff, a member of the Australian Labor Party. In 1996 the plaintiff and Mr Lee formed a business association, the principal purpose of which appears to have been the acquisition, renovation, and sale at a profit of property. It is the business association with Mr Lee that provides the foundation for the bulk of the defendant’s case that imputations (b) and (f), and the contextual imputations, are substantially true.

28 A company called Evan Lee Management Pty Ltd, of which Mr Lee had been a director and shareholder, was renamed Evbaca Pty Ltd (“Evbaca”). On 21 March 1996 the plaintiff, Mr Lee, and Ms Catherine Walton were appointed as directors of Evbaca, the plaintiff and Mr Lee each holding 37.5 per cent of the shares. Ms Walton’s directorship ceased on 23 June 1997.

29 Either using Evbaca as a vehicle, or in their own names, the plaintiff and Mr Lee participated in a number of property transactions. In or about June 1996 Evbaca acquired a property at 344 New Canterbury Road Dulwich Hill. Dulwich Hill is in the Marrickville municipality. The property was a two-storey block of flats. The intention of the plaintiff and Mr Lee was to renovate the flats, convert the building to strata title, and sell the units. On 11 June 1996 Evbaca lodged with the Council a Development Application which was subsequently approved.

30 In about April 1998 Evbaca also became the registered proprietor of a property at 16 Georgina Street Newtown. This was outside the Marrickville Municipality. Property renovation works were undertaken. The property was subsequently sold.

31 On 8 June 1996, the plaintiff, Mr Lee, and Ms Marjorie Maude Lee (Mr Lee’s mother) contracted in their joint names to purchase a property at 78 Chelmsford Street Newtown, also outside the Marrickville municipality. The plaintiff and Mr Lee each held twenty-five per cent of the property and Ms Lee fifty per cent. At the time of purchase that property was in a derelict state. It was converted to two individual residences, one of which was transferred to Ms Lee, and the other jointly to the plaintiff and Mr Lee, and thereafter sold.

32 In July 1997 the plaintiff was appointed a director of and became a fifty per cent shareholder in Irolake Pty Ltd (“Irolake”), a company of which Mr Lee was already a director and shareholder. Prior to the plaintiff’s appointment as director, Irolake had contracted to purchase a property at 64 Kingston Road Camperdown. The plaintiff and Mr Lee guaranteed funds borrowed by Irolake in respect of the purchase. This property, too, was a block of flats which was converted to strata title, and the units sold.

33 On these facts it is hardly surprising that the plaintiff does not dispute that, at least from 21 March 1996, Mr Lee was his partner within the meaning of s443(2) of the 1993 Act and that, accordingly, he (the plaintiff) would be taken to have a pecuniary interest in any matter in which Mr Lee had a pecuniary interest. The disclosure provisions of the 1993 Act were therefore activated. The plaintiff was obliged, by s451, to disclose those interests at any meeting of the Council or committee at which such a matter was to be considered, and to absent himself from such a meeting at any time during which the Council or committee was considering or discussing or voting upon any question in relation to the matter.

* * *

the justification defence

34 The defendant has set out to prove the substantial truth of each of imputations (b) and (f), and of contextual imputations (1) and (2). It has not sought to prove that imputation (d) is substantially true. Proof of the truth alone of a defamatory imputation is not sufficient to establish the defence. It is necessary also that the defendant establish that the imputation relates to a matter of public interest, or was published under qualified privilege (Defamation Act s15). It was not contested that each imputation related to a matter of public interest and, accordingly, those matters can be put to one side. In the circumstances of this case, all the defendant needs to prove is the substantial truth of either or both of the imputations.

35 S140 of the Evidence Act 1995 provides:

In Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, unreported, 24 December 2002, the Court of Appeal held that the standard of proof to be applied under s140(2)(c ) is the standard referred to in Briginshaw v Briginshaw (1938) 60 CLR 336. Here the defendant alleges that the plaintiff misused his position as Mayor in order to benefit an associate. Such an allegation is a grave one. The imputations are, in essence, of corruption as Mayor. It is, perhaps, not as grave as the allegations the defendant in Marsden sought to prove, but is, nevertheless, one which calls for due scrutiny in the terms drawn from Briginshaw . That is the standard of proof I propose to apply.

* * *

evidence

36 It will be necessary to examine in detail the evidence upon which the defendant relies in order to establish the truth of the various imputations.

imputation (b)

37 This imputation is that, by attending a meeting of a Project Team of the Council, the plaintiff sought to influence the decision of the Project Team in favour of Mr Lee, with whom the plaintiff had a private business relationship. The relevant facts may be stated succinctly.

38 In about the middle of 1995 the Council purchased a property which had formerly been the Marrickville Hospital. It was contemplating the construction of a Civic Centre on the site. It established a Steering Committee to oversee the development of the site, and created a “Project Team”, although precisely what the functions of this body were is not apparent from the evidence. All members of the Project Team were Council officers. No councillor was a member.

39 A joint meeting of the Steering Committee and Project Team, at which the plaintiff was present, took place on 7 December 1995 (exhibit 14, tab 6). There it was agreed to prepare a “parameter-based design control brief” and to invite expressions of interest in the project from architects. External consultants were engaged and suggested the names of three firms of architects who might be invited to develop the design brief. Mr Lee’s firm was not one of the three. The Council’s Manager, Property Development (Mr Tony Fazio), added two additional names to the list, one of whom was Evan Lee Architects Pty Ltd, Mr Lee’s firm. A file note (exhibit 14, tab 7) records that each of the firms nominated by Mr Fazio had previously carried out satisfactory work for the Council. All five firms were invited to lodge a submission and quotation for the development of the design brief. Two of the firms originally named declined to do so, citing excessive workloads as the reason. The remaining three firms accepted the invitation and presented their concepts.

40 On 28 March 1996 a daytime meeting of the Project Team took place. The minutes of that meeting (exhibit 14, tab 8) record those in attendance. The plaintiff is shown to have been present for a little over one hour, but to have left before the meeting concluded. All other attendees were members of the Council staff. There were no councillors other than the plaintiff present. The submissions received from three firms of architects, including that of Mr Lee, were presented to the meeting. The meeting resolved to engage Mr Lee’s firm to prepare the design control document. This appears from the minutes to have occurred while the plaintiff was present. He did not vote, and had no entitlement to vote. The minutes record four reasons for the selection of Mr Lee’s firm. The fee to be paid is recorded as $16,000.

41 The circumstances in which the plaintiff came to attend the meeting were thoroughly explored in evidence. His evidence (the only direct evidence) was as follows. The meeting took place on the third floor of the Council’s offices. He happened to alight from the lift at that floor, with the intention of going to his office, and observed that the meeting was in progress. The Council’s General Manager, Mr Colin Mills, called to the plaintiff and asked him to attend the meeting. The plaintiff did so. He had previously had no intention of doing so, and had made no preparation for it. He had not known that the meeting was scheduled and had no reason to be there, and did not know what items were on the agenda for discussion. (T108)

42 Some attempt was made in cross-examination to establish that the plaintiff had, in fact, been aware that the subject of the allocation of the design brief for the Civic Centre would be discussed at the meeting, but this attempt failed.

43 The plaintiff’s account of the circumstances in which he came to attend the meeting received some support from a document signed by Mr Mills (who has since died). This was a letter written by Mr Mills to the Department of Local Government on 24 April 1997 (exhibit M). Mr Mills wrote:

“I invited the Mayor to attend the meeting shortly before its commencement to give some guidance on some issues on the agenda including the potential provision of community facilities (eg childcare centre) and a letter from the Department of Health on a boundary adjustment.”

44 I accept the plaintiff’s account of his attendance at the meeting. There is nothing to contradict it, it seems to me to be plausible, it is consistent with what Mr Mills recorded, and I found no basis from the manner in which the plaintiff gave his evidence to doubt his truthfulness.

45 The plaintiff said that he had little recollection of the meeting because his attendance was unplanned and he had made no preparation for it. He accepted that he almost certainly made some remarks at the meeting but could not recall on what topics. Nor did he recall Mr Mills giving any reason for his invitation to the plaintiff to attend and participate, or delineating the matters in relation to which he sought the plaintiff’s contribution.

46 There was, however, other evidence of what the plaintiff said. Mr Russell Thompson, who in 1996 was the Council’s Coordinator, Community Relations, attended the meeting. He recalled a discussion about the competing tenders and that this discussion was, in respect of each tenderer, “in a fair amount of detail”. He recalled that, when the discussion turned to the tender by Mr Lee’s firm, the plaintiff:

“said that Evan Lee was capable of carrying out the design brief.” (T401)

“‘I have no doubt that Evan Lee and Associates will be able to carry out that stage.’” (T401)

47 He also recalled the plaintiff stating that Mr Lee’s firm had recently completed a major project in the Central Business District.

48 Mr Don Johnston, who in 1996 was the Manager of Finance at the Council, was also a member of the Project Team. He, too, recalled that the subject of the competing tenderers was discussed in some detail, and he recalled that, in response to a question asked about Mr Lee’s experience, the plaintiff responded:

“to the effect that Mr Lee has experience in similar projects as he worked on the Sydney Central Plaza project.” (T424)

“words to the effect that Mr Lee had substantial experience in preparing design briefs and similar and evidenced it by reference to the Sydney Central Plaza project.” (T424)

49 I have no difficulty in accepting as a fact that the plaintiff made remarks to the effect of those given in the evidence of these two witnesses. This being so, it is unnecessary to take time in determining a rather complex issue that arose as a result of the cross-examination of Mr Thompson. Counsel for the defendant tendered a statement made by Mr Thompson, invoking s45 of the Evidence Act 1995. Senior counsel for the plaintiff objected to the admission of the statement. Neither counsel was equipped properly to argue the tender and I then deferred ruling upon it. Counsel for the defendant subsequently provided a written submission, but the issue was never finally pressed or resolved. Since I have accepted Mr Thompson’s evidence in full, and since I consider it unlikely that the statement takes the matter any further (I did not at the time read the document), I am of the view that admission of the statement could not advance the defendant’s case. I do not propose to resolve the question of admissibility.

50 Imputation (b) focuses upon the plaintiff’s purpose in attending the meeting. For the defendant to succeed in the justification defence in relation to this imputation, it is necessary that it establish that the plaintiff had the necessary intention, or purpose. Counsel for the defendant has submitted, correctly, that it is not necessary that it prove that the plaintiff had a positive consciousness of wrongdoing.

51 Counsel for the defendant relied upon certain aspects of the evidence concerning the surrounding circumstances. For example, he pointed to the content of Mr Mills’ letter of 24 April 1997, in which Mr Mills referred to the issues on which, in inviting him to attend the meeting, he sought the plaintiff’s guidance. These were community facilities “(e.g. child care centre)” and a letter from the Department of Health on a boundary adjustment. No reference was made by Mr Mills to any contribution the plaintiff may have been able to make in relation to the selection of architects to prepare the design brief for the Civic Centre. If this is correct, then, on the defendant’s argument, the plaintiff is deprived of any sanitization of his conduct that he might otherwise derive from Mr Mills’ invitation.

52 I accept that the selection of architects is not shown to have been a matter on which Mr Mills considered that the plaintiff might have a contribution to make to the meeting or a reason for his invitation. It was therefore contended on behalf of the defendant that, as a consequence, the plaintiff’s participation in the meeting on that subject matter does not gain any protection from Mr Mills’ invitation. I do not accept that. The imputation is directed to the plaintiff’s attendance at the meeting – not at what he said. If, as I accept, he attended at the invitation or request of Mr Mills, that is relevant to the fundamental question of whether his purpose in doing so was to influence the meeting in favour of his friend and associate. In any event, a conclusion that the plaintiff did not gain protection from Mr Mills’ invitation does not prove that the plaintiff’s purpose, in speaking as I have found that he did, was to influence the decision of the members of the Project Team.

53 Another matter on which the defendant relied concerned the inferences it contended could and should be drawn from the evidence of Messrs Thompson and Johnston. Each of these witnesses claimed to have a reasonably clear recollection of the statements attributed to the plaintiff of which they gave evidence, but little other recollection of the meeting. From this, counsel for the defendant argued, it could and should be inferred that the plaintiff had made those remarks with a degree of vigour which could be contrasted with anything he (or others) had said in relation to other matters discussed at the meeting. Senior counsel for the plaintiff responded to this argument by pointing out that each of the witnesses had been approached and asked to turn his mind to the events of the meeting only in very recent times – more than six and up to seven years after the event – and that each had been specifically asked to turn his mind to the particular, identified, subject matter: that is, whether the plaintiff said anything at the meeting about the architects then under consideration. This, he suggested, would or could cause an unconscious bias in the recollections of the two witnesses.

54 I do not think a great deal can be made of the recollections of these witnesses of what the plaintiff said on this subject matter to the exclusion of other subject matters. It is correct, as senior counsel for the plaintiff pointed out, that that subject matter was what they were expressly asked about and gave consideration to. I do not think it says anything about the forcefulness with which the plaintiff made the remarks in question.

55 Moreover, although ample opportunity was present, both before and during the course of the trial, neither witness was asked in evidence about the manner in which the plaintiff said what was attributed to him.

56 A final matter referred to by counsel for the defendant concerned

cross-examination of the plaintiff as to the potential impact of his remarks upon the members of the Project Team. Although he was extensively cross-examined on the subject, the plaintiff steadfastly refused, until a very late stage, to accept that his expression of opinion about Mr Lee’s capacity as an architect might have influenced members of the Project Team in Mr Lee’s favour. Ultimately, he did, in a half-hearted way, answer “well, perhaps” to that question. Reliance upon this evidence appeared to be placed in relation to the assessment of the plaintiff’s credibility.

57 I confess to having initially experienced a certain amount of scepticism about the plaintiff’s position on this issue. It seemed to me (and in the absence of evidence to the contrary) probable that, as the Mayor, the plaintiff’s views would be likely to influence some members of the Project Team. But there was no evidence to support this, and, on reflection, it is really no more than an impression based upon assumptions about the manner in which councils, and in particular the Council, operate. It is an impression based upon factual ignorance of the strengths and weaknesses of the Council officers concerned and relationships between them and the plaintiff, and other councillors and officers of the Council. I do not think it appropriate to draw inferences from such scanty and insubstantial information. Moreover, the likelihood of the plaintiff’s views affecting members of the Project Team might depend upon the manner, and, in particular, the forcefulness and intensity with which they were expressed, as to which there is no evidence.

58 As I have indicated above, the focus of the imputation is upon the plaintiff’s intention in attending the meeting. I am satisfied that his attendance was, as he said, the result of a chance encounter with, and an invitation by, Mr Mills. It is of some significance that the imputation asserts that he sought to achieve his purpose “by attending” the meeting – not by the detail of his participation in it or what he said. But even if the imputation were to be given a liberal interpretation and to encompass the assertion that he sought to bring about the alleged influence by the content of his participation, I am not satisfied that it has been proved. It seems to me to be most likely that what the plaintiff said represented genuine participation in a discussion, which included a question about Mr Lee’s abilities which was almost incidental, and the plaintiff’s response thereto. I do not mean to imply by this that it was wise for the plaintiff to speak as he did in the circumstances but I am unable to be satisfied that he “sought” to influence the decision of the Project Team in favour of Mr Lee.

59 Late in the proceedings an issue arose concerning the application of the principle stated by the High Court in Jones v Dunkel (1959) 101 CLR 298. This concerned the absence from the proceedings of the Council officers other than Mr Mills (who has died) and Messrs Thompson and Johnston, both of whom have since left the Council and taken up employment elsewhere, and were called by the defendant. There was no evidence as to the current positions of the remaining members of the Project Team, numbering four, none of whom was called. Counsel for the defendant signalled his intention of making “a vigorous Jones v Dunkel submission” in relation to their absence. He tendered two letters from the solicitor for the Council, and it was this which provoked the introduction of the Jones v Dunkel argument. Senior counsel for the plaintiff made it clear that he did not intend to make a similar submission against the defendant and the tender was accordingly withdrawn. Nevertheless, counsel for the defendant pressed the argument that the defendant was entitled to the benefit of an inference drawn in accordance with the Jones v Dunkel principle against the plaintiff. In the course of a written submission on that topic, he asserted that senior counsel for the plaintiff conceded that these potential witnesses were “in the plaintiff’s camp”. Although senior counsel responded to other matters contained in that written submission, he did not contest the assertion that he made such a concession. Accordingly, although the concession does not appear ever to have been expressly made, it is, I think, safe to proceed upon the basis that that represents the plaintiff’s position.

60 Responding to the substance of the defendant’s contention, senior counsel for the plaintiff referred to the history of the proceedings. In a written submission he stated that there was no need for the plaintiff to consider calling witnesses on this issue until the amended defence was filed in November 2002, more than six years after the meeting. Although this is somewhat cryptic, I take it that it was in the amended defence filed on that date that the defendant first particularised the conduct of the plaintiff on which it relies in order to support its defence of justification and therefore first put the plaintiff on notice that factual matters relating to the meeting might be in issue. Further, senior counsel argued, the plaintiff and his legal representatives were unaware of the precise proposition to which a reply might be made until Messrs Thompson and Johnston had in fact given their evidence, and that this was more than seven years after the meeting. He accordingly invited an inference that the absence of the witnesses is explicable by the likely fading of memories.

61 In my opinion this invites less of an inference, and more of speculation. It would have been open to the plaintiff’s legal representatives to have adduced evidence, for example, that they had made enquiries of the members of the Project Team but their recollections were such as to render any evidence that they might give of little or no value. This was not done.

62 Notwithstanding this, in my opinion the debate proved to be a sterile one. The evidence given by Messrs Thompson and Johnston, although explored in cross-examination, was not contested. I have accepted that evidence in full. I have declined to draw the further inference urged upon me by counsel for the defendant concerning the manner in which the plaintiff made his remarks. Even if I were to draw, against the plaintiff, the full Jones v Dunkel inference, the principles stated in that case would not permit me to plug any gaps in the evidence in that regard.

63 The most I could draw by way of inference from the failure of the plaintiff to call other members of the Project Team, is, as counsel acknowledges, that any evidence they could give would not assist the plaintiff, and that any inferences to be drawn from the evidence against the plaintiff’s case may more confidently be drawn. The Jones v Dunkel inference does not permit a finding of fact otherwise not open. There is no conclusion or inference to be drawn from the absence of other members of the Project Team. There is simply no evidence, and no evidence from which an inference could properly be drawn, concerning the manner in which the plaintiff spoke.

64 The defendant has not succeeded in establishing the truth of imputation (b).

imputation (f)

65 This imputation is to the effect that, as Mayor of Marrickville, the plaintiff deliberately so conducted himself in relation to the Civic Centre development as to give a financial benefit to Mr Lee. The precise terms of the imputation are of some importance. There is a latent ambiguity in its formulation. On one view, it may be read as focussing upon the plaintiff’s conduct and motivation, but not upon any actual results of his conduct. On that view, the imputation accuses the plaintiff of behaving in the manner stated, for the reason stated, whether or not his conduct was effective in achieving the result sought, that is, an actual financial benefit to Mr Lee. The other interpretation is that the words “so conducted himself as to give a financial benefit” mean that the desired end was in fact achieved. I prefer the second construction. As I interpret the imputation, proof of its substantial truth entails proof that, as a result of the plaintiff’s conduct, deliberately engaged in, Mr Lee actually realised a financial benefit. It would not be sufficient to prove that the plaintiff deliberately so conducted himself as to seek that objective.

66 In order to justify imputation (f) the defendant cited, inter alia, the same matters as it relied upon in order to justify imputation (b); it also relied upon some additional evidence. Besides the meeting of the Project Team of 28 March, there were two additional meetings attended by the plaintiff, to which the defendant pointed. These were a combined meeting of the Steering Committee and Project Team which was held early in the morning of Tuesday 11 June 1996, and a Council meeting of 18 June 1996 (the minutes of which are, respectively, exhibit 14, tabs 13 and 14).

67 The minutes of the former record that Mr Lee attended and presented his draft design brief. This was followed by discussion. The minutes do not disclose that any vote was taken at this meeting.

68 At the Council meeting of 18 June the Steering Committee presented a Business Paper which concluded with a recommendation that the Council adopt the design brief prepared by Mr Lee’s firm and adopt a process for project delivery outlined earlier in the Business Paper. I infer that the recommendation of the Steering Committee was, at least in part, a result of the discussion that had taken place at the meeting of 11 June. Attached to the Business Paper were three appendices of which the first (according to the note on the Business Paper) consisted of extracts from Mr Lee’s design brief; and the second was a report from “Jeff Roorda and Associates”. Elsewhere in the exhibits (exhibit 14, tab 17) Jeff Roorda is identified as “from Jeff Roorda and Associates”, the firm which suggested the names of the three architectural partnerships originally proposed to the Council as suitable to be invited to develop the design brief. It was accepted during the course of the evidence that Jeff Roorda and Associates was an external and independent consultant and project manager, although its precise expertise is not apparent. Although the Business Paper to which the report constituted an appendix was in evidence as exhibit 14, tab 14, the report from Jeff Roorda and Associates was not in evidence. The content of the Business Paper is of considerable importance. It bears a notation “G.M. 66” indicating that it was prepared by the Council’s General Manager, Mr Mills.

69 As indicated above, the second recommendation was that the Council:

“adopt the process for project delivery including community consultations outlined in Chapter 4 of this Report.”

70 A section of the Report is headed “Project Delivery”. Included in that part of the Report is the following:

“The objective is to select contractors for the design and construction of the entire site’s development by an open and transparent process which will result in an affordable Civic Centre designed and built in accordance with the design brief by experienced and capable contractors.

In order to achieve this objective the following process is considered to provide maximum control of the outcome, along with appropriate decision points for community input.

(i) Expressions of Interest will be invited on the basis of the design brief for the proposed development through public advertisement. … The merit of applications will be measured against defined criteria including their demonstrated technical and financial capabilities for completion of the project, as well as the impact on Council of the financial plan presented by the applicants.

(ii) The most meritorious submissions will be determined by Council, and short-listed for assessment of the affordability of these.

(iii) A précis of the short-listed submissions will be used to consult with the community and determine the mandate for proceeding with the project. This round of community consultation will be a critical decision point for Council, and will determine the future of the project and the site.

71 The document made it clear that the options for project delivery were presented in greater detail in the report from Jeff Roorda & Associates, which was attached to the Business Paper, but not included in the exhibits. It is not entirely clear to me what was intended by the reference to “contractors for the design and construction” of the project, and this was not the subject of any explanatory evidence. But it seems to me that the reference to “contractors for the design and construction” of the project must have been a reference to architects as well as builders. The significance of this will become apparent.

72 In considering whether the defendant has established the substantial truth of this imputation it is convenient to break the imputation into its component parts. There are four of these: -

(i) that the plaintiff had a private business relationship with Mr Lee;

(ii) that, in his capacity as Mayor of Marrickville, the plaintiff engaged in certain conduct;

(iii) that that conduct had the effect of conferring a financial benefit on Mr Lee;

73 In order to succeed in the defence, it is necessary that the defendant establish the substantial truth of each component part. The first, that the plaintiff had a private business relationship with Mr Lee, is not in issue. The plaintiff concedes that he was “in partnership” with Mr Lee. To prove the second, that the plaintiff engaged in certain conduct in his capacity as Mayor of Marrickville, the defendant identified the plaintiff’s participation in the three meetings: the Project Team meeting of 28 March; the joint meeting of the Steering Committee and Project Team of 11 June; and the Council meeting of 18 June. The defendant’s reliance upon the meeting of 28 March extends to the remarks, broadly supportive of Mr Lee’s candidature, which I have already accepted were made by the plaintiff. Although the minutes of the meeting of 11 June do not record any formal resolution, it is apparent from the Business Paper subsequently prepared, that at that meeting (or after, and plainly as a consequence of, it) that it was agreed to endorse and recommend to the Council acceptance of Mr Lee’s proposal; at the Council meeting of 18 June, chaired by the plaintiff, that recommendation was adopted. Moreover, it was adopted on the motion of the plaintiff. All of the conduct relied upon by the defendant has been established. All was engaged in by the plaintiff in his capacity as Mayor. The substantial truth of the second component has therefore been established.

74 The third component, that the plaintiff’s conduct had the effect of conferring a financial benefit upon Mr Lee, is more controversial. I am satisfied that the decision taken at the first meeting (28 March) did have the effect of conferring a financial advantage upon Mr Lee. However, that is not precisely the point in issue. The question is whether the plaintiff’s conduct (as distinct from the decision taken at the meeting) had that effect. The conclusion that it did is inescapable. It is not to the point that the same decision may have eventuated with or without the plaintiff’s participation. The point is that, at the first meeting, the plaintiff’s remarks supported Mr Lee, and, undoubtedly, helped to allay any uncertainty about Mr Lee’s capacity in the minds of the Council’s officers, particularly those who raised the issue which prompted the plaintiff’s remarks. As a result, Mr Lee’s firm was selected and retained to prepare a design for the Civic Centre.

75 The same does not hold true in relation to the plaintiff’s conduct at the joint meeting of the Steering Committee and the Project Team (11 June). There is no evidence of the nature of the plaintiff’s participation or of anything that he said at that meeting. More importantly, for present purposes, the most that could be said about what happened at that meeting was that it gave rise to a recommendation to the Council that Mr Lee’s design brief be adopted. It did not, and apparently could not, have the effect of directly conferring any financial benefit upon Mr Lee. It was, possibly, a step in the process to the resolution of the Council to adopt his design brief and in that sense, once the recommendation was adopted by the Council, was a contributing factor, in the event that the decision of Council conferred a financial benefit upon him, to that result. Whatever the plaintiff did at the meeting of 11 June, it did not, of itself, have the effect of conferring a financial benefit upon Mr Lee. The question which then arises is whether the resolution of the Council at the meeting of 18 June conferred such a benefit upon Mr Lee, and if so, whether the plaintiff’s conduct contributed to that effect.

76 Counsel for the defendant argued that the resolution to adopt Mr Lee’s design inevitably put him in an advantageous position with respect to the next stage of the Civic Centre and other projects, enhanced his reputation and goodwill, and gave him material on which to promote his talent and achievements, and that this amounted to a financial benefit.

77 It is because of this argument that I have extracted above, at some length, the process for project delivery, recommended by the Steering Committee, and adopted by the Council. In my opinion what there appears makes it plain that Mr Lee was in no favoured position in relation to the next stage of the project. If he had wished to tender for the project he would have had to do so in open competition with other tenderers. Neither the decisions of either or both of the meetings after 28 March, nor the conduct of the plaintiff, gave Mr Lee any financial advantage in this respect. As to the defendant’s argument that the decision to adopt his design brief was likely to have enhanced his reputation and goodwill, I consider that this is both speculative and too remote. The only respect in which the defendant has proved that the plaintiff’s conduct resulted in a financial benefit for Mr Lee is in relation to the meeting of 28 March. That is sufficient to establish the substantial truth of the third component.

78 The final question is whether the defendant has proved that the plaintiff engaged in that conduct deliberately, with the purpose of achieving the stated result. For the reasons I have given in relation to imputation (b), I am not so satisfied.

79 The defendant has not proved the substantial truth of imputation (f).

the contextual truth defence

80 S16 of the Defamation Act provides:

“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.

81 I have already held that the two contextual imputations were in fact conveyed by the matter complained of. There was no issue that, like the imputations pleaded on behalf of the plaintiff, these imputations relate to a matter of public interest. What remains for the defendant to prove is that either of them is, or both are, substantially true; and that, by reason of the substantial truth of either or both, the publication of imputations (b), (d) and (f) did not further injure the reputation of the plaintiff. In other words, it is for the defendant to establish that the contextual imputations were (or either one of them was) not only true, but also of such significance as to overwhelm the impact of imputations (b), (d) and (f). I will return to this question after considering whether the defendant has established the truth of either or both of these imputations. The defendant also gave notice of its intention to rely on either of the imputations pleaded by the plaintiff that it successfully justified, but having regard to my conclusions in relation to those imputations, that plea is of no further relevance. S16(2)(c) is to be applied in accordance with the construction given to it by Spigelman CJ and Rolfe AJA in John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 451.

contextual imputation 1

82 This imputation is that the plaintiff, as Mayor of Marrickville Council, failed over a substantial period of time to comply with his obligations of disclosure as a councillor. The defendant seeks to prove that, in a number of ways, the plaintiff failed to comply with his obligations under the 1993 Act and/or the applicable Code of Conduct and/or the Code of Meeting Practice. It is convenient here to reiterate that s449 required the annual completion and lodgement of a return of disclosure of interests in the prescribed form and s451 required disclosure of any pecuniary interest the plaintiff had in any matter which was before a Council or Council committee meeting, and non-participation in the consideration of any such matter. The plaintiff was at all relevant times obliged to declare any pecuniary interest in any matter coming before a meeting of the Council or meeting of a committee of the Council, and to refrain from participation in such meetings; by reason of the extended definition of “pecuniary interest”, that obligation encompassed disclosure in any matter in which Mr Lee had a pecuniary interest in the subject matter of the meeting. The plaintiff also had obligations in relation to non-pecuniary interests. These obligations were less clearly defined. By the 1994 Code of Conduct, which was in force until August 1996 (and therefore at the time of the various meetings to which I have already referred) the plaintiff was enjoined not to do anything which he could not justify to the public, and to avoid any occasion for reasonable suspicion or the appearance of improper conduct or the partial performance of his public or professional duties. An onus lay upon him to declare any non-pecuniary interest. It is immaterial that the obligations imposed by the Code of Conduct and the Code of Meeting Practice were not enforceable at law, or that breach of their provisions may attract no legal sanction.

83 The imputation as framed does not specify whether the “obligations” with which it imputed that the plaintiff failed to comply were those imposed by statute, and legally enforceable, or those imposed by the Code of Conduct. The defendant seeks to justify this imputation by reference to the statutory requirements already mentioned (s449 and s451 of the 1993 Act), the Code of Conduct, and the Code of Meeting Practice adopted by the Council as applicable from time to time. It relies upon a number of instances of the plaintiff’s conduct, which, it argued, constitute non-compliance with one or other of the obligations so imposed. The matters relied upon by the defendant may be categorised into six groups. These are:

1. inadequacies in the content of the plaintiff’s disclosure of interests returns pursuant to s449, which failed to comply with the requirements of the section;

2. the plaintiff’s participation in the meeting of the Project Team of 28 March 1996, and his failure to disclose a pecuniary or non-pecuniary interest in the subject matter of the meeting, said to be non-compliance with s451 and the 1994 Code of Conduct;

3. the plaintiff’s participation in the combined meeting of the Steering Committee and Project Team of 11 June 1996, and his failure to disclose a pecuniary or non-pecuniary interest in the subject matter of the meeting, said to be non-compliance with the requirements of s451;

4. the plaintiff’s participation in the Council meeting of 18 June 1996, and his failure to disclose a pecuniary or non-pecuniary interest in the subject matter of the meeting, said to be non-compliance with s451;

5. the plaintiff’s participation in Council meetings and decisions involving projects in respect of which Mr Lee was the architect, and his failure to disclose a pecuniary or non-pecuniary interest in the subject matter of the meetings, said to be non-compliance with the applicable Code of Conduct and Code of Meeting Practice.

6. the plaintiff’s participation in meetings and decisions concerning developments in which a Mr Larry Hand (said to be a friend of the plaintiff) was involved, and his failure to disclose a non-pecuniary interest in the subject matter of the meeting, said to be non-compliance with the applicable Code of Conduct, Code of Meeting Practice, and Conflict of Interests Policy.

84 I will deal with each of these in turn. It will be necessary to make more extensive reference to aspects of evidence including some evidence not yet touched upon.

(i) Failure adequately to disclose interests in written returns: s449

85 The plaintiff had inadequately completed the returns required by s449. In June 1998, acting on a complaint made against the plaintiff by four Marrickville councillors, the Director-General of the Department of Local Government referred a report of an investigation into the complaint to the Local Government Pecuniary Interest Tribunal. Two documents which emanated from that Tribunal as a result were tendered in evidence by consent and may conveniently be used as the source of the factual matters upon which the defendant relies. The first document is entitled “Statement of Prima Facie Facts and Issues” and is dated 2 July 1998 (exhibit 11). The second is a “Statement of Decision” forwarded to the plaintiff and the Director-General of the Department on 2 December 1998 (exhibit 10).

86 Contained in exhibit 11, and subsequently acknowledged by the plaintiff to be correct, is a table detailing various instances of non-compliance with the requirements of s449. This shows that in his return filed for the year 1993/1994, the plaintiff identified directorships in five corporations. One of the companies was incorrectly named. The address of none of the companies was given. In his return for the 1994/1995 year, the plaintiff disclosed directorships in five corporations, two of which were incorrectly named and as to none of which was an address given. In his return for the year 1995/1996 the plaintiff failed to disclose directorships in six corporations of which disclosure was required. He declared his directorship in Evbaca but did not provide its address. He failed to disclose his interest in two real estate properties of which he was the registered proprietor, and failed to disclose the source of “rental income” which he did declare.

87 This evidence thus reveals a number of instances of non-compliance with the statutory obligation over a three-year period. The plaintiff conceded as much. It will be necessary to return to consider the implications of this circumstance at a later point in these reasons.

88 A hearing of the Local Government Pecuniary Interest Tribunal took place, at which the plaintiff provided an explanation for his admitted statutory breaches. The Tribunal (constituted by Mr K Holland QC) considered all the material including the plaintiff’s explanations. Mr Holland stated that he had given serious consideration to imposing a period of suspension upon the plaintiff but, having accepted his explanation, instead severely reprimanded him. The view taken by the Tribunal of the seriousness of the plaintiff’s conduct is not a matter to which I can properly have regard in the outcome of the present proceedings. My task is to determine whether those failures, either taken alone or in conjunction with other matters, constitute failure over a substantial period of time to comply with obligations of disclosure.

(ii) failure to disclose pecuniary interests: s451

(a) the meeting of 28 March 1996

89 Extensive reference has already been made to the meeting of the Project Team attended by the plaintiff on 28 March 1996 and it is unnecessary to restate the relevant facts (see paras [37] to [50] above). It is not in dispute that the plaintiff did not declare any pecuniary interest at that meeting. For present purposes, the defendant relies upon the plaintiff’s participation in that meeting, and his failure to declare a pecuniary interest, as a failure to comply with the requirements of s451 of the 1993 Act. This gave rise to an interesting question.

90 The competing arguments may be stated with relative simplicity. Regrettably, the answer is not so clear.

91 The plaintiff’s position (that is the position taken by him personally, in his evidence, and that taken on his behalf through senior counsel) was that the meeting of the Project Team did not come within s451 because it was not a “council committee”. S451(1), it will be recalled, is relevantly in the following terms:

“(1) A councillor or a member of a council committee who has a pecuniary interest in any matter with which the council is concerned and who is present at a meeting of the council or committee at which the matter is being considered …”

92 On behalf of the plaintiff it was put that the reference to “committee”, where it secondly appears, must be taken as a reference to a “council committee” which appears in the opening clause of the sub-section. So far, as a matter of linguistics, I am of the view that the plaintiff is on firm ground. But I am not sure where that takes him.

93 The plaintiff’s position is that “a council committee” must be taken to mean a committee constituted by councillors – that is, elected representatives, and not officers, of the Council. If that interpretation were correct, then s451 would not be applicable.

94 The 1993 Act contains no definition of “committee”. There are, however, certain references in the statute to committees of which two are of particular significance. S355 deals with the manner in which a council exercises its functions. This may be, for instance, by the council by means of the councillors or employees, agents or contractors, partly in conjunction with another person or persons, or with another council or councils, or by delegation – or, pursuant to s355(b), “by a committee of the council”. S355 does not identify what is meant by “a committee of the council” – that is, whether that is a committee constituted by councillors, or whether it may extend to a committee constituted exclusively (as was the Project Team) by officers of the Council or even to a committee constituted by a combination of councillors and officers.

95 By s373:

“A council may resolve itself into a committee to consider any matter before the council”,

96 Ss 360 and 376 are important sections in aid of this question of construction. S360 provides as follows:

committees of councils of which all the members are councillors

a committee of the council of which all the members are councillors

97 S376 is in the following terms:

a committee of the council of which all the members are councillors

98 The reason the two sections are important for present purposes is that they demonstrate that the legislature envisaged the creation of council committees of which all members are councillors; but the implication is clear that the legislature also envisaged the creation of council committees of which all members are not councillors. Such a committee may be constituted exclusively by non-councillors such as council officers; or by a mix of councillors and non-councillors. S360(3) is an explicit provision governing the conduct of meetings of committees of which all members are councillors which does not apply to council committees otherwise constituted. Indeed, s451 itself contemplates membership of a council committee by individuals other than councillors. If that were not so there would be no point to the reference to “a member of a council committee” in the opening words of sub-s(1).

99 There is no reason to construe the reference to “council committee” as narrowly as is contended for on behalf of the plaintiff. I am satisfied that the Project Team was, for the purposes of s451, a council committee.

100 The plaintiff did have a pecuniary interest, by reason of his partnership with Mr Lee, and Mr Lee’s pecuniary interest in the subject matter of the meeting, in the matter being considered at that meeting. It was therefore incumbent upon him, pursuant to s451, to disclose the nature of the interest and to absent himself from the meeting, while the meeting considered and voted upon the selection of the design brief. This instance of non-compliance by the plaintiff with his obligations of disclosure is also made out.

(b) the meeting of 11 June 1996

101 The argument of the defendant in relation to the meeting of 11 June is also that the plaintiff was under an obligation pursuant to s451 to disclose a pecuniary interest. That, the argument goes, was because Mr Lee stood to gain financially as a result of any decision made at the meeting (see the definition of “pecuniary interest” in s442(1)). The plaintiff does not contest that this was a meeting within s451, nor that, if Mr Lee stood to gain financially from any decision there made, the plaintiff was under an obligation to disclose a pecuniary interest. It is the question of whether Mr Lee did have a reasonable likelihood or expectation of appreciable financial gain that is here in issue. The plaintiff argued that the meeting did not, and could not, confer any financial benefit upon Mr Lee. No vote was taken and the most that was done at the meeting resulted in a recommendation that his design brief be adopted. Contrary to the argument put on behalf of the defendant, the Council was already under a liability (incurred on 28 March) to Mr Lee in respect of his fees for the preparation of the design brief, and what occurred at this meeting incurred no further financial obligation to him. But if subsequent acceptance by the Council of the recommendation of the meeting itself entailed the reasonable likelihood or expectation of an appreciable financial benefit for Mr Lee, in the sense, for example, that he could have anticipated preference in the allocation of a contract for the further progress of the Civic Centre, I would have concluded that this meeting was one which required the plaintiff to declare an interest by reason of s451. But, for reasons I have already given, I do not think that is the case (see paras [75] to [77] above). The recommendation was part of a chain of events which led to the Council’s adoption of Mr Lee’s design. The Business Paper presented to the Council meeting of 18 June made it perfectly plain, as I have previously observed, that Mr Lee, if he wished to tender for the project, would have to do so in equal competition with other tenderers. Of course, I recognise that, at the time of the 11 June meeting, that Business Paper had not come into existence, but it plainly records the standard policy of the Council. The decision of the meeting of 11 June did not confer any financial benefit on Mr Lee. More accurately, there was no reasonable likelihood or expectation of appreciable financial gain (or loss) to Mr Lee as a result of the matters discussed and decided at the meeting. There was therefore no breach of s451 in the plaintiff’s failure to disclose a pecuniary interest at that meeting.

(c) the Council meeting of 18 June 1996

102 What I have said above also disposes of the contention that the meeting of 18 June was such as to require disclosure by the plaintiff of a pecuniary interest. Again, by reason of the expressed policy in the Business Paper, Mr Lee could not reasonably anticipate or expect appreciable financial gain as a result of the meeting. It was therefore not necessary for the plaintiff to disclose a pecuniary interest.

(d) development applications

103 The defendant next identified a number of Development Applications that came before the Council, and in relation to each of which Mr Lee was the architect. I propose only to refer in detail to two. The first of these was a project at 140-152 New Canterbury Road, Petersham. The registered proprietor of the property appears to have been a company, Admak Investments Pty Ltd, of whom Mr Joseph Pinto was a director (exhibit 14, tab 41). In December 1996 Mr Lee, as architect, applied for development approval. The application excited considerable opposition from residents. In October 1997 the Council’s Development and Environmental Services Committee (“DES Committee”) recommended refusal of the application, giving reasons for that recommendation. At a Council meeting of 7 October 1997 the Council unanimously resolved to defer further consideration of the matter pending inspection by councillors. Inspection took place, at which the plaintiff and Mr Lee (inter alia) were present. At a Council meeting on 21 October, a motion was passed (by a majority) indicating the Council’s support for the development subject to appropriate conditions. At a Council meeting of 18 November a rescission motion was put and defeated. Development approval was finally given, by majority (which included the plaintiff) at a meeting of 9 December 1997. At none of the meetings did the plaintiff disclose any pecuniary or non-pecuniary interest.

104 A similar matter involved a Building Application, dated March 1997, in relation to a property at 30 Excelsior Parade Marrickville. The owner of the property, a Mr Michael Hassan, was the applicant. Mr Lee was identified as the architect. This application was also controversial, bringing forth residents’ objections. It also resulted in a recommendation of partial refusal by the DES Committee, which gave reasons. At a DES Committee meeting of 3 June 1997 it was resolved by majority that the application be referred for mediation. Following mediation, at a DES Committee meeting of 1 July 1997, in which the plaintiff participated, the application was approved on conditions. (It is not clear, but it appears that this decision was made by the DES Committee by delegated authority.) At no stage did the plaintiff declare a pecuniary or non-pecuniary interest in the matter.

105 Some confusion arose in the evidence in relation to this project. Initially, in his evidence, the plaintiff thought it was possible that Mr Lee was doing the work without fee and therefore could not be said himself to have a pecuniary interest in the matter. He then recalled that another Councillor, Councillor Tadros, had some involvement and had, in fact, disqualified himself from participating in the discussion. In re-examination, after having had the opportunity to consider the matter overnight, the plaintiff confirmed that he had been told that Mr Lee was not to receive fees for this project, and that Councillor Tadros was himself meeting some of the Council fees charged.

106 The defendant’s principal argument is that Mr Lee had a pecuniary interest in the decisions made by the Council in relation to these applications; that, by reason of the plaintiff’s relationship with Mr Lee, he also had a pecuniary interest; and that, accordingly, by s451 he was obliged to disclose his interest at any meeting at which the applications were being considered and voted upon, and to refrain from any participation in the discussion or voting. The defendant’s alternative position was that the plaintiff had non-pecuniary interests in the matter, by reason of which he should have made disclosure.

107 What was firstly in dispute was whether Mr Lee had a pecuniary interest in the matters before the Council and the DES Committee. It is necessary to examine further the evidence in relation to this.

108 At the plaintiff’s request, Mr Lee provided him with a letter concerning his interest in the Petersham project (exhibit N). This letter was dated 6 October 1997 (that is, postdating the meetings concerning the Marrickville application) and was in the following terms:

“This letter is to confirm to you advice provided over the weekend.

This firm has been engaged as Architects to design and submit plans for the project.

Our fees are payable irrespective of approval or non-approval.

This firm or its principals or staff have no financial interest in the project nor is there any agreement to receive future fees should the application be approved.”

109 The plaintiff himself said in evidence that, in his experience, an architect who prepared plans for a Development Application could not necessarily expect to be, and often was not, retained for the preparation of a Building Application or subsequent work. The plaintiff had no reason to believe that Mr Lee had any pecuniary interest in the outcome of either Development Application. It is not suggested that the plaintiff himself had any pecuniary interest in the projects other than by reason of his association with Mr Lee. Axiomatically, if Mr Lee had no pecuniary interest in the projects, then neither did the plaintiff. The only interest Mr Lee had was as architect.

110 The existence of a pecuniary interest, as defined in s442, does not depend upon the subjective knowledge or perception of the person whose pecuniary interest is under consideration. However, by s443(3)(a), a person is not taken to have pecuniary interests of the kind here attributed to the plaintiff (that is, a derivative interest coming into existence only by reason of a partner’s pecuniary interest) if he/she is unaware of the partner’s pecuniary interest.

111 Here, I accept that the plaintiff took steps to acquaint himself with Mr Lee’s position in relation to the Petersham project and received from Mr Lee information that, he said, satisfied him that Mr Lee had no financial interest contingent upon approval or refusal of the application, because fees due to him did not depend upon approval; putting that together with the plaintiff’s own evidence that Mr Lee could not reasonably expect to be retained for further work if the Development Application were granted, it could not be said that Mr Lee had a reasonable likelihood or expectation of appreciable financial gain from the decision; but, even if he did, the plaintiff was unaware of that circumstance.

139 That evening, in accordance with his usual practice, the plaintiff called in to a local hotel. As soon as he did so the publican approached him and pointed to a copy of The Sydney Morning Herald which was either on the bar or a table and was opened at the page on which the article written by Mr Wainwright appeared. The publican asked the plaintiff some questions framed in accusing terms. It was obvious to the plaintiff that the clientele of the hotel had been discussing the article.

140 The following day, Saturday, Ms Caird visited the plaintiff at his home and spent about an hour discussing the article and matters arising therefrom with the plaintiff. I take this to be an indication of the seriousness with which acquaintances of the plaintiff, including personal friends, treated its publication. Later on the same day when the plaintiff was shopping in Newtown he was accosted by a person he did not know who accused him of corruption.

141 A regular council meeting was scheduled for the following Tuesday evening. One topic for discussion on the agenda concerned the redevelopment of the Marrickville Hospital site. This was attended by a very large number of residents and was, the plaintiff said:

“the most unruly meeting I have ever attended at Marrickville Council.” (T75)

“because of almost riotous behaviour by some members of the gallery.” (T75)

142 During the course of the meeting photocopies of the Wainwright article were circulated in the public gallery. The meeting was the subject of a further news report in The Sydney Morning Herald the following day, also written by Mr Wainwright. Under the headline:

“Mayor jeered and taunted”,

“Cr Cotter insists he asked Mr Mills to do so.”

143 The publication of this article added to the plaintiff’s concern and distress. He said he thought it was a very unbalanced article and presented the conduct of the meeting in a manner that was prejudicial to him. He took issue with the photograph (the same photograph as had appeared in the previous article) which he considered gave him an appearance “of being angry and wild”. He considered the article was very selective in its content. He referred to a number of matters that had occurred at the meeting which were omitted from the article. He took issue with the use of the word “insists” in the sentence extracted above, concerning the reference of the matters to the Department of Local Government. The plaintiff considered that the use of the word suggested some cynicism (or scepticism) about the truth of what he had said. He said:

“I think it attempted to show me as a person under siege, someone who the public had correctly turned on. I think it tried to show me as someone who perhaps was trying to hide things, that I was a person under pressure trying to cover up what I might be doing.” (T91)

144 The next day yet another news item appeared in The Sydney Morning Herald, this time over the by-line of Paola Totaro. This item bore the headline:

“Cotter urged to stand down.”

145 Ms Totaro reported that the State Opposition had called upon the plaintiff to stand down as Mayor until a full inquiry into his financial and business affairs had been conducted. The publication of this article angered the plaintiff, again because he perceived that it lacked balance, and that the headline was so drafted as to attract attention.

146 Comments and questions from acquaintances of the plaintiff continued. On 11 April, the day of publication, the plaintiff’s solicitors wrote to the defendant, indicating some “untruths” contained in the article, and pointing out that the author had omitted (maliciously, it was suggested) to state that it was the plaintiff who had initiated the reference of the matters to the Director General of the Department of Local Government. The plaintiff’s solicitors sought publication of a correction, retraction and apology in terms they set out in the letter.

147 On 22 April, eleven days later, the defendant wrote to the plaintiff’s solicitors, responding to some of the matters raised, and declining to publish an apology. The defendant invited the plaintiff to submit a letter to the editor of suitable length for publication, which, it said, would be favourably considered. The plaintiff considered this to be an unsatisfactory way in which to resolve the issue which had arisen. He said he was very disappointed in the content of the letter and the refusal of the defendant to acknowledge that Mr Wainwright had been provided with information that contradicted some of what he had written. He did not act upon the invitation to submit a letter to the editor. The plaintiff gave his reasons for this. This was because he took the view that the article was extremely unfavourable and that to submit a letter would merely be seen as self serving and would not result in the defendant’s acknowledgment that it had been wrong. It would be seen as a self-justification or might even ignite more debate on the issue. An apology, in the plaintiff’s view, would be a clear indication that the defendant accepted that it had been in error. Far from having any attraction to him, the plaintiff thought the proposal by the defendant contained detriment to him.

148 There were some additional matters on which the plaintiff relied in the overall assessment of damages. One of these concerned the manner in which the defendant had conducted its defence. Initially, he said, the defendant pleaded defences that did not involve any assertion that what it had published was true; at some stage, as is apparent, the defence changed to one of partial justification. The plaintiff said that he found this very distressing, because:

“They had put me through a huge amount, they had been asserting all along that they weren’t trying to say anything that, you know, had the effect of damaging me, and here they were now, after all these years after the case had started and after it had been to the jury, changing their defence to a different position.” (T131)

149 The plaintiff said that the pending case had placed him under a great strain, particularly in the context of his political activities. Even quite recently some derogatory remarks about him had been made from the public gallery at a Council meeting and this brought home to him the realisation that the article could continue to damage him. As a consequence, he and Mr Lee had agreed that they could no longer conduct business in Marrickville and had ceased to do so. Even though they continued to engage in business activities outside the Marrickville Municipality, their activities had been quite severely curtailed.

150 The plaintiff’s evidence was that he believed that his reputation, prior to publication, was “exceptional”. He thought he was highly regarded in his community in terms of his work and that this enhanced his enjoyment in his work. He perceived the publication of the article as providing a foundation for his political opponents and he considered that some members of the community probably still believed in the truth of the contents of the article. Others would have retained doubts.

151 There is no reason not to accept the evidence of the plaintiff in relation to matters going to the quantification of damage, or, indeed, generally. As I have observed above, there was nothing in the way that he gave his evidence and nothing in the objectively ascertainable circumstances that cause me to doubt his veracity or reliability. In reaching this conclusion I have had regard to lengthy submissions put to me by counsel for the defendant in relation to the assessment of the plaintiff’s credibility. These involved a certain reluctance to accept the findings of the Pecuniary Interests Tribunal. As I said during argument, I reject the proposition that any such reluctance bears upon whether or not I accept the plaintiff as a truthful witness.

152 Also called in the plaintiff’s case on the issue of his reputation were a number of witnesses. Their evidence can be dealt with succinctly. Mr Anthony Albanese is a member of the Federal Parliament for an electorate which encompasses the area of the Marrickville municipality. He has known the plaintiff since about 1979. When asked about the plaintiff’s reputation prior to the publication in April 1997, Mr Albanese gave a somewhat expansive answer. He portrayed the plaintiff in the context of the dispute concerning the construction of the third runway at Sydney Airport, which I have already mentioned. He contrasted the plaintiff’s reputation amongst members and supporters of the Australian Labor Party with the reputation, or perception, of the party amongst its adherents. In that context he said that the plaintiff’s role was as a figurehead and very important politically and for the Australian Labor Party at the time. Much of this went to the plaintiff’s character as distinct from his reputation. When pressed in relation to the plaintiff’s reputation, Mr Albanese was a little more concise, saying that the plaintiff’s reputation was “of someone of great integrity” (T348). The esteem in which Mr Albanese himself held the plaintiff was such that he was heavily involved in Mr Albanese’s election campaign in the 1996 Federal election. Mr Albanese said he would not have agreed to this if the election had occurred after the publication of the article.

153 Mr Albanese was also aware of discussion in the local community about the article and its contents.

154 Mr Peter Fitzgerald was, at the time of giving evidence, the General Manager of the Botany Bay City Council. He had been involved in one way or another in local government for many years, having been an elected alderman in the Drummoyne Council over many years, and Mayor for some of that time. He has known the plaintiff since before 1988 when both were elected to adjoining councils. Mr Fitzgerald said that, up to April 1997, the plaintiff’s reputation from his point of view was “absolutely unblemished” and “absolutely pristine”. (T393)

155 The final witness was Mr Shane Lester, the licensee of the Courthouse Hotel at Newtown, to which the plaintiff went on the evening of the publication. His evidence went to the response, as he perceived it, of the clientele of the hotel to the article. Essentially, he said that many people used the article as the base for “having a go” (T399) at the plaintiff in a light-hearted manner but with cynical overtones. He said that, even at the date he gave evidence, the matter was still being discussed from time to time.

156 It should not be overlooked that in cross-examination of the plaintiff, it was elicited that, in the local government election that followed the publications, he was re-elected with an increased majority. (T139)

157 All of these matters are relevant to the assessment of compensatory damages.

aggravated damages

158 In the Amended Statement of Claim the plaintiff particularised his claim in aggravation of damages in the following way:

“(a) the defendant’s failure to apologise though requested to do so by letter of 11 April 1997 from the plaintiff’s solicitors,

(b) the prominence and space given to the publication, in particular its position at the top right of page 3, accompanied by a photo of the plaintiff;

(c) the publication of an article headed ‘Mayor jeered and taunted’ on page 3 of The Sydney Morning Herald on 16 April 1997.

(d) the defendant’s publication of an article headed ‘Cotter urged to stand down’ on page 6 of The Sydney Morning Herald on 17 April 1997.
(e) the defendant’s plea of justification to imputations (b) and (f).

(f) the defendant’s plea of contextual truth.

(g) the plaintiff’s knowledge that the imputations are false.
(h) the maintenance upon the record by the defendant until the day of the trial of pleas of qualified privilege which pleaded the reasonableness, bona fides, and public benefit of the defendant’s conduct in publishing the imputations.”

159 At the conclusion of the proceedings, the plaintiff, through his senior counsel, abandoned reliance on particular (b), but maintained reliance on all other particulars.

160 In Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225, Glass JA quoted from the speech of Lord Reid in Cassell & Co Ltd v Broome [1972] AC 1027 at 1085, in which his Lordship said:

“It has long been recognised that in determining what sum within that bracket should be awarded, a jury, or other tribunal, is entitled to have regard to the conduct of the defendant. He may have behaved in a high-handed, malicious, insulting or oppressive manner in committing the tort or he or his counsel may at the trial have aggravated the injury by what they there said. That would justify going to the top of the bracket and awarding as damages the largest sum that could fairly be regarded as compensation.”

161 Glass JA added:

“Conduct of the kind there impugned could add to the compensatory damages because it aggravated the injury and increased the harm done to the plaintiff. Since compensatory damages could, ex hypothesi, only be given for harm done to the plaintiff, the common law regarded such matters of aggravation as falling within the relevant harm proved.”

162 His Honour considered that the effect of any such conduct upon the plaintiff could be demonstrated by inference without the need for direct evidence. Failure to make inquiries and failure to recant prior to trial were two matters which, his Honour considered, were available so to be taken into account.

163 Hutley JA also regarded the failure of a defendant to retract or apologise as a matter proper to be taken into account in the calculation of damages. However, he considered that recklessness in the publication must be shown to have affected the plaintiff in order to be relevant harm and thereby to have aggravated the damages.

164 In Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at [66], Mason CJ, Deane, Dawson and Gaudron JJ wrote:

“… we have difficulty in understanding how the mere absence of an apology can aggravate damages. Whereas publication of an apology may mitigate damage, thereby reducing the harm suffered by a plaintiff in a defamation case, and so reduce the damages awarded, the failure to publish an apology does not increase the plaintiff’s hurt or widen the area of publication. No doubt want of an apology may be a relevant factor in establishing that a defendant is motivated by a desire to injure the plaintiff but that does not mean that the want of an apology itself aggravates the plaintiff’s injury. Furthermore, it is of the utmost importance that juries should be instructed that any award of aggravated damages must be confined to what is truly compensation for relevant harm and must not include any element of punitive damages. Otherwise an invitation to award aggravated damages by reference to the defendant’s conduct before and at the trial may be understood as an invitation to award punitive damages.”

165 This statement of the High Court, however, can no longer be taken at face value. In Clark v Ainsworth (1996) 40 NSWLR 463 Sheller JA and Abadee AJA scrutinised the basis on which the absence of an apology might be used in the assessment of damages, including aggravated damages. Sheller JA noted:

“Only unjustifiable or improper conduct by the defendant can be taken into account in giving aggravated damages.”

166 His Honour rejected a submission there made on behalf of the defendant that a failure to apologise could increase the damages only if it was shown that that was improper or unjustifiable or demonstrated lack of bona fides. Ultimately, his Honour identified a distinction between a defendant’s failure to apologise as a factor in a claim for aggravated damages, which would require a plaintiff to particularise and prove that the failure involved or was part of a course of unjustifiable or improper conduct by the defendant, and the failure to apologise as contributing to the plaintiff’s hurt caused by the persistence in and continued spread of the matter published.

167 It seems to me that what this means is that the failure to apologise may be taken into account in aggravation of damages, but only where the failure is accompanied by, or part of, a course of unjustifiable and improper conduct on the part of the defendant. The failure to apologise is relevant in a more general sense to the assessment of non-aggravated compensatory damages as part of the distress caused to the plaintiff as a result of the persistence of the defendant in maintaining the imputations.

168 Abadee AJA wrote:

“In my opinion a mere refusal or failure to apologise is relevant to general compensatory damages, and is capable of being included as a component of such damages.”

169 Simos AJA agreed with both Sheller JA and Abadee AJA.

170 I am plainly bound by the decision in Clark v Ainsworth and must apply it in the consideration of the plaintiff’s claim for aggravated damages, especially in relation to that aspect of the defendant’s conduct which forms the basis of the first particular.

171 In considering all particulars, I bear in mind the observation of Sheller JA to the effect that only unjustifiable or improper conduct of the defendant can be taken into account in an award of aggravated damages. That means it is necessary individually to consider each of the instances of conduct asserted by the plaintiff as giving rise to aggravation of the damage caused by the publication of the defamatory imputations.

172 The first question is whether or not the defendant’s failure to apologise did amount to unjustifiable or improper conduct. The plaintiff’s solicitor wrote to the defendant promptly, on the day of publication (exhibit D). He asserted that the article contained “a number of untruths” of which Mr Wainwright was clearly aware and had chosen to ignore despite being informed by the plaintiff of the facts. He detailed errors he asserted to be contained in the article, these being the suggestion that the plaintiff’s business dealings over a period of ten years were being investigated; the deliberate and (it was suggested) malicious omission to report that it was the plaintiff who had requested Mr Mills to refer his business interests to the Director General of the Department of Local Government; and the statement that four political opponents of the plaintiff had detailed a decade of property and business transactions.

173 A reply to this letter was not written until 22 April (exhibit K). A detailed response was then provided to the assertions made on behalf of the plaintiff. One thing that cannot here be overlooked is imputation (d) – the imputation that there are reasonable grounds to suspect that as a member of Marrickville Council the plaintiff had engaged in business deals which conflicted with his duties as a member of the Council. The defendant made no attempt to justify this imputation. Another relevant matter emerges from the answers to interrogatories administered by the plaintiff to the defendant. The defendant said that it did not intend to convey any of the imputations; it did not believe in the truth of any of the imputations; it had no belief as to whether any of its readers might understand the article to convey any of the imputations; that, relevantly, in relation to imputations (b) and (f), Mr Wainwright had given consideration to whether any of the readers of The Sydney Morning Herald might have understood the article to convey those imputations of the plaintiff but that the defendant had given no consideration to that question in relation (relevantly) to imputation (d).

174 It seems to me that what the defendant recognised it could not justify was the imputation that the misconduct it attributed to the plaintiff had continued over a period of ten years. That this was incorrect was drawn to the attention of the defendant by the plaintiff’s solicitor in the letter of 11 April. He advised the defendant that questions raised of the plaintiff’s non-disclosures related only to the period between 1 July 1995 and 30 June 1996. (It is true that subsequent investigations by the Pecuniary Interests Tribunal found non-disclosures over a period of three years, but this was not known at the time of this correspondence.) Counsel for the defendant argued that the absence of any belief in the truth of the imputations evidenced by the answers to interrogatories, could not be used in aggravation of damages because, that being unknown to the plaintiff at the time, it could not have increased his distress. But that is to overlook the effect of the passage from Sheller JA’s judgment in Ainsworth. His Honour does not suggest that knowledge by the plaintiff of the impropriety or unjustifiability of the defendant’s conduct is a pre-requisite of the award of aggravated damages. It is clear that conduct of the defendant post-dating publication may be found, and this, too, would not necessarily be known to the plaintiff.

175 I have concluded that the failure to apologise in relation to imputation (d) was unjustifiable. The defendant had the opportunity to make its own inquiries and these would (or should) have brought to its attention the untruth of the imputation. In this respect, at least, the failure of the defendant to accede to the plaintiff’s request for an apology was unjustified. I have concluded that this should be taken into account in aggravation of damages.

176 The failure to apologise in relation to imputations (b) and (f) is in a different category. It is plain enough that the defendant’s position has changed in relation to these imputations during the preparation for trial. At the time the interrogatories were answered (the date of which is not clear from exhibit S which, however, bears a notation with a date of 15 November 2001) the defendant did not believe that either of those imputations was true. Some time later, obviously, its investigations gave it cause to believe those imputations were true and, for that reason, it set out to justify them. Although I have rejected the defence in relation to each of those imputations, I am not of the view that the defence was plainly untenable nor that the defendant’s conduct in attempting to establish their truth was improper or unjustifiable. An apology would have been plainly inconsistent with the position ultimately adopted by the defendant. I do not think that the failure to apologise in relation to those imputations should be treated as a matter aggravating damages.

177 The next matters on which the plaintiff relied in aggravation of damages was the publication of the successive news items on 16 and 17 April, arising from the Council meeting of 15 April. I have already alluded to the evidence given by the plaintiff as to his perception of the imbalance of each of these items. A principal complaint made on his behalf appears to be that in neither of those news items was it made plain that the questions that had been raised concerning the plaintiff’s “business interests” and pecuniary interest disclosures was, at that time, limited to the 1995/1996 year. In written submissions it was suggested that each article exaggerated and overstated the controversy. Senior counsel also pointed to what were said to be some factual inaccuracies in the reports – for example, in the 17 April item, a member of State Parliament was quoted as saying that the plaintiff had failed to declare his directorship in Evbaca although this was wrong and, so it was said, known to the defendant to be wrong. That reference was contained in the report in a quotation directly attributed to the member of Parliament. I do not think the defendant should be criticised for not correcting a factual inaccuracy in those circumstances.

178 Even on the plaintiff’s own account of the meeting of 15 April, a great deal of hostility and controversy was displayed. So far as I can judge, it could not be said that the news item of 16 April was seriously inaccurate in its description of the meeting: it may have had a slant unfavourable to the plaintiff but it is not such as could be described as distorting the facts, either deliberately or otherwise. Nor, so far as the evidence goes, could the item of 17 April, which was principally a report of proceedings in Parliament, although it also made reference to the meeting of 15 April. I do not perceive the publication of either of these items as being unjustifiable or improper and they are therefore not available to be used in aggravation of damages.

179 The next matter on which the plaintiff relies in support of his claim for aggravated damages concerns the pleas of justification to imputations (b) and (f), and of contextual truth. However, in written submissions, it was explicitly stated that it was not asserted that the plea of truth to imputation (b) was improper, nor the plea of truth of contextual imputation 1. What was put was that the pleas of justification to imputation (f) and contextual imputation 2 were improper because neither carried the defendant’s case further than the attempt to justify the earlier imputation. (That is, the attempt to justify imputation (f) went no further than the attempt to justify imputation (b); and the attempt to justify contextual imputation 2 went no further than the attempt to justify contextual imputation 1). This is certainly not so in relation to imputations (b) and (f): the defendant adduced considerably more evidence in its attempt to press the truth of imputation (f) than it did to prove the truth of imputation (b).

180 I have already indicated that I do not think the attempt to prove the truth of the imputations was unjustifiable or improper and I accordingly do not consider that this basis for aggravated damages is made out.

181 No further argument was addressed to particulars (g) or (h), that is, the plaintiff’s knowledge of the falsity of the imputations, and the maintenance upon the record by the defendant of pleas of qualified privilege. In my opinion they are not sufficient to justify aggravation of damages: the falsity of the imputations is a matter to be taken into account in relation to damages generally but does not, at least in this instance, in my opinion, aggravate the harm done to the plaintiff. Nor, in my opinion, can reliance on a plea of qualified privilege aggravate the damages in the context of a defence which was ultimately conducted on the basis of the asserted truth of the imputation.

182 I have already mentioned the provisions of s46A of the Defamation Act, directing me to take into consideration “the general range of damages for non-economic loss in personal injury awards in” NSW. Included in that are the provisions of the statutes regulating the award of any such damages. Pursuant to s134 of the Motor Accidents Compensation Act 1999, the maximum amount that may be awarded in respect of non-economic loss arising from a motor vehicle accident to which that Act applies is $284,000.

183 I do not find it easy to comply with the directive otherwise contained in s46A(2). I find it impossible to compare the damage done by injury to reputation with the damage done by any physical injury. No material was put before me by either party from which I could gauge “the general range of damages for non-economic loss” in claims for damages for personal injury. The assessment of damages for non-economic loss for personal injury is, within appropriate ranges, a discretionary matter, subject to the evaluation of the determining judge. It depends upon an understanding of the evidence on which the claim is based and which is put before the judge. Notwithstanding this, I have done my best, in what is undoubtedly an inadequate way, to do as I am directed.

184 What was put before me on behalf of the plaintiff was a schedule containing sums awarded by judges in defamation cases since the introduction of s46A. The information contained in this document included, in each case, the imputation found to have defamed the plaintiff, the nature of the publication, the extent of the audience, and the sum awarded. Given the paucity of the information conveyed in the document (necessarily so) and the discretionary nature of an award of damages, the schedule is of limited assistance.

185 In the present case, the answers to interrogatories have established that 220,533 copies of The Sydney Morning Herald of 11 April 1997 were sold in NSW, and relatively small numbers in the other States and Territories of Australia; that the total estimated number of readers of The Sydney Morning Herald at that date in NSW was approximately 898,000 and in the Australian Capital Territory approximately 51,000. The newspaper was also available on the internet but there was no information as to the extent of access to that service. It is relevant to the assessment of damages that the item complained of was placed in a relatively prominent position on page 3 of the newspaper and in such a fashion as to attract the eye of even a casual reader. The pithy headline would undoubtedly also have attracted attention (as it was, no doubt, designed to do) of casual as well as more committed readers.

186 Some of the damages awards to which I was referred were published by way of electronic media, either television or radio. I take into account that a newspaper publication is more enduring than a publication of that kind, and is, unlike an electronic broadcast, susceptible readily of rereading, and of passing on to others.

187 The case itemised on the schedule most nearly comparable to the present is that of Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739; unreported, 7 September 2001. In that case, the plaintiff, a former Assistant Commissioner of Police, sued on three separate publications, contained in three separate editions of The Sydney Morning Herald, conveying, in all, four defamatory imputations. The estimated readership was, in each case, of an order broadly similar to the present. The imputations were also relevantly similar, in that they suggested that the plaintiff acted improperly or corruptly in the performance of his duties as Assistant Police Commissioner. In respect of the two imputations conveyed by the first publication, McClellan J awarded the plaintiff a total of $180,000; in respect of the single imputation conveyed by the second publication, $100,000; and in respect of the single imputation conveyed by the third, $104,000. I do not treat the award of damages in Jarratt as a precedent; rather, it helps to solidify a view of the quantification of damages at which I had independently arrived.

188 Although each imputation constitutes a separate cause of action, and it may sometimes be appropriate to make a separate award of damages in respect of each (as, for example, before the introduction of the 7A procedure, where a defence of qualified privilege, which had to be decided by a judge after jury verdict, was pleaded), that is not the case here. One single award of damages including such aggravation as has been established, will suffice. I have come to the view that the sum proper to compensate the plaintiff for the damage done to his reputation, including aggravated damages to the extent that I have held they may properly be awarded, is $100,000. That is the sum I propose to award.

**********

Last Modified: 08/11/2003

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Citations

Cotter v John Fairfax Publications Pty Ltd [2003] NSWSC 503

Most Recent Citation

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CITATION:	Cotter v John Fairfax Publications Pty Ltd [2003] NSWSC 503
HEARING DATE(S):	Monday 26 May 2003 - Tuesday 3 June 2003
JUDGMENT DATE:	22 July 2003
JUDGMENT OF:	Simpson J
DECISION:	Damages of $100,000 awarded to plaintiff
CATCHWORDS:	defamation - justification defence - contextual truth defence - failure to comply with legal obligations - publication of imputations that further injure the reputation of the plaintiff - interstate defences - aggravated damages
LEGISLATION CITED:	Defamation Act 1974, (NSW) s7A, s15, s16, s46, s46A Local Government Act 1919 (NSW) Local Government Act 1993, (NSW) s360, s373, s442, s443, s448, s449, s451, s457, Evidence Act 1995 (NSW) s45, s140 Motor Accidents Compensation Act 1999 (NSW) s134
CASES CITED:	Allen v John Fairfax and Sons Ltd, unreported, 2 December 1988 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419, unreported, 24 December 2002 Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Briginshaw v Briginshaw (1938) 60 CLR 336 Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 Cassell & Co Ltd v Broome [1972] AC 1027 Clark v Ainsworth (1996) 40 NSWLR 463 Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739; unreported, 7 September 2001 John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 451 Jones v Dunkel (1959) 101 CLR 298 Polly Peck (Holdings) plc v Trelford [1986] 1 QB 1000 Triggell v Pheeney (1951) 82 CLR 497
PARTIES :	Barry Cotter - Plaintiff John Fairfax Publications Pty Ltd - Defendant
FILE NUMBER(S):	SC 20360/97
COUNSEL:	T Molomby SC with R Rasmussen - Plaintiff TD Blackburn with ATS Dawson - Defendant
SOLICITORS:	Joseph G Capogreco & Associates - Plaintiff Freehills - Defendant