Duckett v Mitchell
[2021] VCC 1108
•19 August 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| DEFAMATION LIST |
Case No. CI-19-00265
| PAUL FREDERICK DUCKETT | Plaintiff |
| v | |
| ALAN MITCHELL | Defendant |
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JUDGE: | HER HONOUR JUDGE CLAYTON | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 August 2021 | |
DATE OF JUDGMENT: | 19 August 2021 | |
CASE MAY BE CITED AS: | Duckett v Mitchell | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 1108 | |
REASONS FOR JUDGMENT
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Subject:DEFAMATION
Catchwords: Defamatory imputations – defence – qualified privilege at common law
Legislation Cited: Corporations Act 2001 (Cth), Division 9, Part 2G.2, s232, s249D, s250V
Cases Cited:Pacific Dairies Limited v Orican Pty Ltd & Ors [2019] VSC 647; Hockey v Fairfax Media Publications Pty Ltd (2015) 237 FCR 33; Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500; Farquhar v Bottom [1980] 2 NSWLR 380; Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; Hardie v The Herald and Weekly Times Pty Ltd [2015] VSC 364; Hardie v The Herald and Weekly Times Pty Ltd [2016] VSCA 103; Jones v Skelton [1963] 1 WLR 1362; Morgan v Odhams Press Ltd [1971] 1 WLR 1239; Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186; Lewis v Daily Telegraph Ltd [1964] AC 234; Toogood v Spyring (1834) 1 Cr M & R 181; (1834) 149 ER 1044; Aktas v Westpac Banking Corporation Limited (2010) 241 CLR 79; Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; Howe & McColough v Lees (1910) 11 CLR 361; Guise v Kouvelis (1947) 74 CLR 102; Wraydeh v Fairfax Media Publications Pty Limited: Wraydeh v Nationwide News Pty Limited [2021] NSWCA 153; Wilson v Bauer Media Pty Ltd [2017] VSC 521; Belbin v Lower Murray Urban and Rural Water Corporation [2012] VSC 535; Belbin & Ors v Lower Murray Urban and Rural Water Corporation (2014) 43 VR 348; Carson v John Fairfax & Sons Ltd (1993) 178 CLR 4; Webster v Brewer(No 3) [2020] FCA 1343; Murray v Raynor [2019] NSWCA 274; Cables v Winchester [2018] VSC 392; Bolton v Stoltenberg [2018] NSWSC 1518; McDonald v Dods [2017] VSCA 129; Zaia v Eshow [2017] NSWSC 1540; KSMC Holdings Pty Ltd t/a Hubba Bubba Childcare on Haig v Bowden (2020) 101 NSWLR 729
Judgment: Damages to the plaintiff assessed in the sum of $45,000.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G R McCormick | Goldsmiths Lawyers |
| For the Defendant | No appearance | No appearance |
HER HONOUR:
1This is a claim by the plaintiff, Mr Paul Duckett, against the defendant, Mr Alan Mitchell, in defamation.
2Mr Duckett is the Chairman of the Board of Pacific Dairies Limited (“Pacific Dairies”). Mr Mitchell is a shareholder in that company.
3There is some procedural history which I will briefly outline to explain the unusual manner in which this matter was ultimately determined.
Procedural history of the matter
4Mr Duckett and a second plaintiff, Mr Raymond Taylor, who was also on the Board of Pacific Dairies, issued these proceedings in January 2019. In June 2019, Mr Mitchell filed a Defence and in July 2019, he filed an Amended Defence and Counterclaim. At that time he was unrepresented. The Counterclaim and Amended Defence were struck out by Order of Judge Smith dated 9 October 2019. Mr Mitchell subsequently retained lawyers and on 12 December 2019, filed a Further Amended Defence.
5Mr Mitchell’s lawyers ceased acting on 11 May 2020 and Mr Mitchell represented himself from that point until 8 July 2021, when new solicitors came on the record. Those solicitors were apparently retained largely to advise Mr Mitchell in relation to subpoenas he wished to pursue.
6On 12 July 2021, Orders were made by consent dismissing the second plaintiff’s claim against the defendant. This was in the context of the second plaintiff being diagnosed with a medical condition which limited his ability to fully participate in litigation.
7On 21 July 2021, the solicitors for Mr Mitchell were granted leave to cease acting. On 25 July 2021, Mr Mitchell contacted the Court by email as follows:
“I have advised the Plaintiffs representative, Mr Goldsmith that I am withdrawing from this matter due to my financial position and my mental health.
I expect the matter to take its natural course from this point depending of what the Plaintiff seeks.
I am advised it is too late to amend my defence at this stage which would allow the evidence I hold to be presented and I don’t have the financial means for a trial.
I do not intend to appear for the directions hearing this coming tuesday 27th July nor the trial.”
(sic)
8Following this email, Mr Mitchell has played no further part in proceedings and did not attend the trial. However, he did not withdraw his Defence, and the trial proceeded undefended. The plaintiff attended to give evidence in person, and called three witnesses, whose evidence I shall deal with in more detail below.
Background
9Mr Duckett is a company director of a number of companies including Pacific Dairies. He has a Bachelor of Economics, an Advanced Diploma in Education, and has worked in senior management roles at Rio Tinto, BHP, Western Mining, Coles Myer Group and Skilled Group.
10There is some history between Mr Duckett and Mr Mitchell that predates their respective involvement in Pacific Dairies. Mr Duckett believed that Mr Mitchell was short selling stock in another company of which he was a director, Agline Pastures, and confronted him about this at a meeting in about 2012 or 2013.
11The predecessor company to Pacific Dairies was called Australian Natural Proteins and was a company involved in cropping and sheep farming, primarily in Deniliquin, New South Wales. The ANZ Bank had significant credit exposure which it was trying to reduce and the Board of Australian Natural Proteins was attempting to secure a new funder. Without going into all the detail, the bank foreclosed on the loan and administrators were appointed. A new Board, which included Mr Duckett, was then appointed. The new Board members put their own money into the company and set about trying to raise funds for a new venture involving the dairy industry. The funding that the new Board thought was secured at the time they became involved fell through, and the person who had been involved in obtaining that funding was operating in Australia without the necessary licence. Subsequently, the Board changed the name of the company in 2016 to Pacific Dairies. As Chair of the Board of Directors, Mr Duckett was trying to raise finance to purchase some dairy farms in Cobram and Finley. Despite various leads, raising funds proved difficult. Mr Duckett attributes part of the difficulty in raising funds to various “campaigns” he says were being waged on social media and in The Herald & Weekly Times. Mr Duckett believes that Mr Mitchell was involved in some or all of these campaigns and describes Mr Mitchell and his associates as “having quite a deal of fun poking away at myself and board directors and the efforts of the company at the time to raise money”.[1]
[1]Transcript 9
12At the time that Australian Natural Proteins was reformed into Pacific Dairies and Mr Duckett became Chair of the Board, he took a decision that until funds were received from a funder and the project could be launched, no director would receive any payment. One director was ousted from the board, Mr Huang, and the other directors paid him his entitlements out of their own pockets. Aside from this, no directors have been paid as the company is not yet a going concern.
13The company, although still listed, has been suspended from trading on the Australian Stock Exchange (“the ASX”) since 16 May 2016 as it does not meet the various requirements to be a trading company. Mr Duckett says the company did not oppose the ASX delisting.
14On 26 September 2018, the company held its Annual General Meeting (“the September AGM”). At that meeting, Mr Duckett was re-elected to the Board and a share issue of 14 million shares was approved to be issued to him on conversion of notes. Mr Duckett says that, because the directors were not being paid any fees until the company was viable, the fees were accruing and they were advised to convert some of those monies owing into shares.
15The Board remuneration package was also approved at the September AGM but more than 25 per cent of shareholders voted against it, thereby constituting a “first strike” for the purposes of Division 9 of Part 2G.2 of the Corporations Act 2001 (Cth). Section 250V of the Corporations Act 2001 requires that, in certain circumstances, a “spill resolution” must be put to a vote of the company members and all company directors cease to hold office immediately before the end of the “spill meeting”. The conditions that require a spill resolution include a vote against adoption of the remuneration report at two successive AGM’s, hence this vote was the first step on the path to a spill resolution being required.
16Section 249D of the Corporations Act 2001 provides a mechanism for members with at least 5 per cent of the votes to request the directors to call a general meeting. On 29 October 2018, the company received a purported notice pursuant to s249D which sought a meeting to consider the removal of Mr Duckett and two other directors, and the appointment of Mr Mitchell and others in their place.
17Pacific Dairies considered that the notice was not valid and gave notice of this on 21 November 2018.
18On 30 November 2018, a further general meeting (“the November GM”) was held and the remuneration report of the directors was not adopted. A conditional resolution to hold a spill meeting within the meaning of Division 9 of Part 2G.2 of the Corporations Act 2001 was passed. The spill meeting was fixed for 1 February 2019.
19On 17 December 2018, the company issued a press release detailing its strategy to create an integrated regional dairy group. The strategy included signing Memoranda of Understanding to negotiate interests in dairy companies in New Zealand and Fiji, retaining BlueMount Capital as advisors and focusing on cattle, sheep and goatmilk into export markets.
20On 8 January 2019, Mr Mitchell, using the pseudonym “A Muscle”, sent an email to, on his admission, 35 shareholders. I will not reproduce the email here in full. In summary, it is a “call to arms” of sorts, attempting to gain support to remove the whole board and replace them “with an action team. Our 5 nominees.” The email says:
“We enter 2019 with expectation that after more than one thousand hours of work, that it is about to pay dividends against an entrenched, and bunkered down board and the incestuous group that surrounds them, expecting to benefit from the association.”[2]
[2]Plaintiff’s Court Book (“PCB”) 164
21It refers to the recent press release and says “the strategy couldn’t catch water in a flood”. It goes on to say that a website will go “live” shortly, “projects are being evaluated and a meeting with the ASX is being negotiated”. The email then mentions “there is a snake in the group as is the case with these types of situations, where a board is under pressure to lose its perks”. It goes on to allege that threats have been made against Mr Mitchell and others and a court application had been lodged by shareholders to –
“… discover the legitimacy of every share that has been issued by this company since 2012. I am sure you agree that if you put your hard earned up to buy shares then why should others receive shares just because they can either issue them to themselves or their associates for free. You are right. IT[’]S CRIMINAL FRAUD … .”[3]
(emphasis in original).
[3]PCB 164
22The email then alleged that “PDF”, presumably Pacific Dairies, “is paying Paul Duckett $3,000 a week, Ray Taylor $770 and [scil. a] day as well as Duckett[’]s son …”. The email says that the board “has now been voted down 3 times by its shareholders” and seeks donations to cover legal costs for the proposed court action that “will most likely see the removal of this board”. It was signed by Alan Mitchell.
23On 1 February 2019, a general meeting of the company took place and the existing directors, including Mr Duckett, were re-elected by an overwhelming majority of shareholders. The nominees put forward by Mr Mitchell’s camp were overwhelmingly rejected.[4]
[4] Pacific Dairies Ltd v Orican Pty Ltd & Ors [2019] VSC 647 at paragraph [29]
24On 19 March 2019, a group of shareholders, including Mr Mitchell, called for a meeting to be held for the purposes of passing resolutions to remove the Board. That meeting was not held as Pacific Dairies instituted proceedings in the Supreme Court of Victoria seeking declarations that the requisition was entirely improper and an abuse of process.
25Proceedings were also brought on behalf of a group of shareholders alleging oppression.
26A further AGM was held on 28 November 2019 and once again, Mr Duckett was re-elected to the Board. Mr Duckett remains a Board member to this day.
The defamatory imputations
27Mr Duckett says the publication gives rise to the following defamatory imputations about him:
(a) He is engaging in criminal fraud;
(b) He is acting contrary to his obligations as a director pursuant to the Corporations Act 2001;
(c) He is being paid monies he is not entitled to by way of directors’ fees;
(d) he is favouring his own interests over that of the company
(e) the strategy he announced by the news release is entirely without merit and has been announced simply to prevent him from being removed from the Board of the company.
28Mr Mitchell admits all the imputations, except that he denies imputation (c) – that Mr Duckett is being paid monies to which he is not entitled by way of directors’ fees.
29Mr Mitchell pleads a defence of qualified privilege at common law. In mitigation of damages, Mr Mitchell says that, if Mr Duckett has suffered any damage, which is denied, that damage is mitigated by the judgment of Sifris J in Pacific Dairies Limited v Orican Pty Ltd & Ors.[5]
[5] Ibid
30In that case, two proceedings were brought before the Court. The first was an application by the company to set aside the request made in March 2019 by certain members of the company for the directors to hold a general meeting (“the Meeting Proceeding”). The second was an application by William Clarke, the former Chief Executive Officer of Australian Natural Proteins, under s232 of the Corporations Act 2001 in respect of the conduct of the directors (“the Oppression Proceeding”). In the Oppression Proceeding orders were sought, including the removal of the current directors, including Mr Duckett, and the setting aside of the issue of certain shares and options to directors. His Honour, Sifris J, determined that the evidence did not establish that the various share and option issues were improper and the issue of shares and options as consideration for the payment of directors’ fees does not amount to oppressive conduct. The amounts were owing, the company did not have the cash resources to pay the fees and there was no evidence other than assertions that the fees were too high. His Honour added that “for what it is worth, they do not appear to be excessive”.[6] His Honour also noted that the failure to call a meeting pursuant to the 19 March 2019 request was not oppressive conduct. The meeting on 1 February 2019 had occurred to appoint directors, and the existing directors were voted in by a substantial majority of the shareholders. The Oppression Proceeding was dismissed. The Meeting Proceeding was also dismissed, his Honour finding that the courts will not lightly interfere with members’ rights to requisition a meeting and thus declarations would not be made, but also noting that the AGM was due to be held in November 2019 in any event, which somewhat superseded the relevance of the declarations sought in relation to the March requisition, that meeting never having been held. His Honour noted that:
“… although I have some concerns in relation to management and the financial state of the Company, the point of oppression has not been reached.
In any event, if I am wrong and the jurisdiction is enlivened, I would not, in the exercise of my discretion and in the circumstances, and in particular given the forthcoming AGM, make any of the orders. The main order sought, namely the removal of the directors …, can and is best decided by the fully informed shareholders at the AGM. Shareholder democracy should take its course. … .”[7]
[6] Ibid at paragraph [55]
[7] Ibid at [65]-[66]
31Although the defendant admits all the imputations bar one, I am still required to be satisfied that the imputations are made out pursuant to the well-settled principles which are encapsulated in the following passage from the judgment of White J in Hockey v Fairfax Media Publications Pty Ltd:[8]
“… The question is whether ordinary reasonable readers would have understood the matters complained of in the defamatory senses pleaded. The ordinary reasonable meaning of a matter may be either its literal meaning or that which is implied or inferred by the matter. It includes inferences and conclusions which the ordinary reasonable person draws from the words used, taking into account the observation of Lord Reid in Morgan v Odhams Press Ltd … at 1245, that the reader may engage in a certain amount of ‘loose thinking’.
…
Ordinary reasonable readers are taken to be persons of ordinary intelligence, experience and education, who are neither perverse nor morbid nor suspicious of mind, nor avid for scandal. They do not live in ivory towers and can and do read between the lines in the light of their general knowledge and experience. They do not engage in over‑elaborate analysis in search for hidden meanings, nor do they adopt a strained or forced interpretation. They are not lawyers and their capacity for implication may be greater than that of lawyers.
The ordinary reasonable reader does not look at the matter complained of in isolation but rather in the whole context in which it is published … .”
[8](2015) 237 FCR 33 at 49-50, paragraphs [63]-[65]. See also Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500, 505; Farquhar v Bottom {1980] 2 NSWLR 380 at 386; Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460 at 466-467, paragraphs [1]-[5]; Hardie v The Herald and Weekly Times Pty Ltd [2016] VSCA 103 at paragraph [46]
32The attributes of the hypothetical ordinary reasonable reader have been described in a number of authorities.[9] In Lewis v Daily Telegraph Ltd,[10] Lord Reid described such a hypothetical person as one who is not “avid for scandal”.[11] Such a person:
“… does not live in an ivory tower and he is not inhibited by a knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs.”[12]
[9]Jones v Skelton [1963] 1 WLR 1362 at 1370 (Lord Morris of Borth-y-Gest); Morgan v Odhams Press Ltd [1971] 2 All ER 1156 at 1245 (Lord Reid); Favell v Queensland Newspapers Pty Ltd (2005) 221 ALR 186 at 190 (Gleeson CJ, McHugh, Gummow and Heydon JJ)
[10] [1964] AC 234
[11] Ibid at 260
[12] Ibid at 258
33If any of the imputations are made out, the second question is to determine whether those imputations are defamatory. Words are defamatory when the imputation lowers the person’s reputation in the eyes of reasonable members of the community, or causes the person to be ridiculed, shunned or avoided by members of the general public.[13]
[13]Radio 2UE Sydney Pty Ltd v Chesterton (supra); applied in Hardie v The Herald and Weekly Times Pty Ltd[2015] VSC 364 and considered in Hardie v The Herald and Weekly Times Pty Ltd [2016] VSCA 103, with some discussion as to the “shun or avoid” approach as being exceptional and related to certain special attributes of the plaintiff
34Turning now to look at each of the imputations:
(a) He is engaging in criminal fraud
35This one causes no difficulty at all. Mr Mitchell expressly says that the conduct of the Board, of which Mr Duckett was the Chair, in issuing shares to themselves or their associates “for free” is criminal fraud.
(b) He is acting contrary to his obligations as a director pursuant to the Corporations Act 2001
36Mr Mitchell describes the Board as “entrenched”, “bunkered down”, surrounded by an “incestuous group” that expects to “benefit from the association”. He says that the Board is “under pressure to lose its perks”. I am satisfied that these statements, together with the allegation of criminal fraud, carry an imputation that he is acting contrary to his obligations as a director. Clearly, engaging in criminal fraud would be contrary to a director’s obligations.
(c) He is being paid monies he is not entitled to by way of directors fees
37Mr Mitchell says that Mr Duckett is being paid $3,000 a week. Mr Duckett gave evidence that this was simply not true and that he had been paid nothing in monies since becoming a director, but had received share and options issues in lieu of payment. I am satisfied that the reference in the email to “perks” and the amount of money alleged to be paid to Mr Duckett each week, in addition to the allegation that he is engaging in criminal fraud in relation to the issue of shares and options, would, in the mind of the hypothetical ordinary reader, give rise to an imputation that Mr Duckett was not entitled to those fees.
(d) He is favouring is own interests over that of the company
38The reference to the entrenched and bunkered down Board, the “incestuous group” that surrounds the Board, the allegation that their press release shows “just how desperate they have become”, and the allegation that threats that have been made to Mr Mitchell in the context of a board under pressure because it might lose “its perks”, carry the imputation that Mr Duckett favours his own interests in receiving “perks” and a large salary, over the interests of the company.
(e) The strategy he announced is entirely without merit and has been announced simply to prevent him from being removed from the Board
39I am satisfied that the statements:
“The incumbent board has fired its defence announcement regarding a strategic strategy. Due diligence shows just how desperate they have become. The strategy couldn’t catch water in a flood.”[14]
and the following paragraph:
“Our strategy is now in full swing. As you are aware the spill meeting is scheduled for 1 feb. The how to vote card is attached to this email. Already movement from the board[’]s side to ours sees Ducketts re election unlikely.”[15]
(sic)
[14]PCB 164
[15]PCB 164
carry the imputations that the strategy released by Mr Duckett was merely a defensive move to try to stave off his removal from the Board, and had no merit.
40Accordingly, the imputations are made out. Mr Mitchell admits, and I am satisfied, that those imputations are defamatory of Mr Duckett.
The defence of qualified privilege
41The common law recognises that, where the publisher of a defamatory statement has a relevant duty or interest to make that statement and the recipient of the statement has a corresponding duty or interest to receive it, a defence of qualified privilege may arise.
42As set out in the foundational passage of Parke B in Toogood v Spyring:[16]
“In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well-known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits.”
(emphasis added)
[16] (1834) 1 Cr M & R 181 at 193; (1834) 149 ER 1044 at 1049-1050
43To establish the defence of qualified privilege, the defendant must establish the following (per Heydon J):[17]
(a) that the communication was published on a privileged occasion;
(b) that the communication was related to the occasion; and
(c) that there was no malice in the publication.
[17] Aktas v Westpac Banking Corporation Limited (2010) 241 CLR 79
44The defence requires there to be reciprocity of interest and duty between the maker of the statement and the recipient of it.[18]
[18]Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 373, paragraph [9]
45The term “interest” is not used in any narrow or legalistic sense, but refers to a relevant moral, social or legal interest or duty. The interest must be more than mere gossip or curiosity, it must be a “matter of substance apart from its mere quality as news”.[19]
[19] Howe & McColough v Lees (1910) 11 CLR 361 at 398
46To decide whether the defence applies, a “close scrutiny” must be had of the circumstances of the case, the relationships between all concerned and the events leading up to the publication.[20]
[20] Guise v Kouvelis (1947) 74 CLR 102 at 116
47The Court must consider to whom the publication was directed and the means by which it was made.
48The onus is on the defendant to establish that the defence applies. In a case in which the defendant has not appeared, put on any evidence, or made any submissions, the Court is unable to undertake the necessary close examination of the circumstances so as to determine whether there was an occasion of qualified privilege and whether, if so, the statements made were germane to the occasion and consequently protected[21] or fell outside the occasion.
[21]Wraydeh v Fairfax Media Publications Pty Limited: Wraydeh v Nationwide News Pty Limited [2021] NSWCA 153; Bashford v Information Australia (Newsletters) Pty Ltd (supra)
49There is no evidence before the Court about the recipients, other than Mr Duckett’s evidence that a friend of his wife’s and the wife of his accountant both received the email. It is not clear whether they received it from Mr Mitchell or whether it was forwarded to them by third parties. Consequently it is impossible to determine that there was sufficient reciprocity of interest to give rise to an occasion of qualified privilege.
50There is no evidence before the court other than the background provided by Mr Duckett, to determine whether, in the event that there was an occasion of qualified privilege, the statements were germane to the occasion.
51It is not for Mr Duckett to establish that an occasion of qualified privilege does not exist, or that the statements made were not germane to the occasion.
52Consequently, the defence must fail.
Assessment of damages
53The plaintiff seeks damages for non-economic loss and injunctive relief.
54There are well-established principles for assessing damages in defamation, such principles helpfully summarised by John Dixon J in Wilson v Bauer Media Pty Ltd[22] as follows:
[22] [2017] VSC 521 (“Wilson”) at paragraph [59]
(a) damages should provide consolation for hurt feelings, damage to reputation and vindication of the plaintiff’s reputation;[23]
[23] Belbin & Ors v Lower Murray Urban and Rural Water Corporation [2012] VSC 535 at paragraph [242]
(b) damages ought to reflect the high value which the law places upon reputation and, in particular, upon the reputation of those whose work and life depends upon their honesty, integrity and judgment;[24]
[24] Wilson (supra) citing Carson v John Fairfax & Sons Ltd (1993) 178 CLR 4
(c) the gravity of the libel and the social standing of the parties are relevant to assessing the quantum of damages necessary to vindicate the plaintiff. The award must be sufficient to convince a bystander of the baselessness of the charge;
(d) there must be an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded;
(e) the extent of publication and the seriousness of the defamatory sting are pertinent considerations;
(f) in determining the damage done to a plaintiff’s reputation, the Court should also take into account the “grapevine” effect arising from the publication;[25]
(g) it is well accepted that injury to feelings may constitute a significant part of the harm sustained by a plaintiff;[26] and
(h) aggravated damages are a form of compensatory damages and, where appropriate, form part of the general damages awarded to a successful plaintiff for non-economic loss, designed to reflect aggravation caused to a plaintiff’s hurt or injury by reason of some conduct of the defendant.
[25]Belbin & Ors v Lower Murray Urban and Rural Water Corporation (2014) 43 VR 348 at 388-390
[26] Wilson (supra) citing Carson vJohn Fairfax & Sons Ltd (supra) at 71
55Aggravated damages may also be appropriate where the conduct of the defendant has increased the injury suffered by the plaintiff. Aggravated conduct may include a failure to apologise.
56Mr Duckett gave evidence that the impact of the defamation had been profound, both professionally and personally. He first became aware of the email when a friend of his wife’s, who is also a shareholder in the company, told him about it. She was upset and did not show Mr Duckett the email as she thought it would upset him. He was then told about it from his friend, Earl Hayes, who forwarded him a copy. He describes being shocked and taken aback. He had never been accused of fraudulent behaviour and it “had quite an impact”. He was concerned that it was going around to people that he knew and that it would affect their opinion of him. He heard from various friends who had seen the email. His accountant also raised it with him, as the accountant’s wife was a shareholder and was concerned that the allegations might have some substance. He spoke with his accountant and felt that he had managed to reassure both his accountant and the accountant’s wife that there was no substance to the email. The accountant’s wife subsequently voted for Mr Duckett at the AGM.
57Friends from his swim club made joking but hurtful remarks to him, causing him to join a different club. It is not clear whether these remarks were about the email or about media articles or posts on the website “Hot Copper”. As none of the media articles or Hot Copper posts are the subject of this proceeding, it is not appropriate to consider the impacts of those unrelated publications.
58Mr Duckett said that he had many nights of interrupted sleep as a result of the email. It caused him great stress. He said there were moments when, whilst in the ocean, it went through his head that “all of this would go away if I just kept swimming”.[27] However, he said he would never do that to his family.
[27]Transcript 28
59Mr Duckett felt that the imputations had negatively impacted his work and professional reputation. He said that the managing director of Soil Management, one of the companies of which he was a director, suggested to him that it would be better to step down from the Board until the court case was dealt with. He did so; however, it would appear that that suggestion was in relation to the Supreme Court proceedings before Justice Sifris, detailed above.
60He had been asked to tender for some work with BHP but was subsequently advised that BHP would not be proceeding with his tender. He felt that this was strange and inconsistent with his previous relationship with BHP. This occurred around the time of the email and he felt that the damage to his reputation may have impacted on BHP’s desire to proceed with him.
61He was also asked to resign from another board after negative articles started to appear in the media, particularly The Herald & Weekly Times and on a website called Hot Copper, which he attributes to Mr Mitchell. However, on questioning, it appears that the negative impacts on his reputation that Mr Duckett perceived in his professional life were more likely the result of the publications in media and on social media sites. He said that he does not believe that these companies would have been privy to the email itself.
62Mr Nick Mitropoulos gave evidence on behalf of Mr Duckett. He manages a food importing business and has known Mr Duckett professionally for about four years. He says that, in his opinion, Mr Duckett is a very authentic and honest man, and that he has “extreme respect” for his integrity and values. He was not aware of any allegations about Mr Duckett other than through this proceeding and thought that the allegation of criminal fraud and other allegations were inexplicable.
63I accept Mr Mitropoulos’ evidence of Mr Duckett’s good character. His evidence also indicates that, whatever the grapevine effect of the publication may be, it did not extend so far as to have reached Mr Mitropoulos.
64Mr Carl Phillips also gave evidence. He is General Manager of Human Resources for Costa Group, a large grape growing group. He knows Mr Duckett from their work together at Coles Myer Group. He views Mr Duckett as a mentor and says that he has always been an important person and someone that Mr Phillips could talk to around personal and professional issues. He describes Mr Duckett as someone with strong values based around transparency, truth and commitment to doing the right thing. He was aware of the allegation of fraud made against Mr Duckett, though it was not clear in what circumstances he became aware of this allegation. He was “completely surprised” and “stunned”. He referred to “a couple of articles” about Mr Duckett, which I take to mean the media articles. He noted that any suggestion of impropriety would be taken very seriously by any organisation looking to engage a director or appoint a consultant. Companies would invariably do background checks and even an allegation which had not been resolved would be viewed dimly and could result in Mr Duckett losing out on work opportunities. Again, it is difficult to imagine in what circumstances companies undertaking due diligence would become aware of the email publication. I accept that they could come across the media reports, but they are not before this Court.
65Finally, Mr Renato Marasco gave evidence for the plaintiff. He currently works for Woolworths in employee and industrial relations. He met Mr Duckett at Coles Myer Group and left Coles Myer Group with Mr Duckett to work at Skilled Group. He describes Mr Duckett as having an “outstanding character”. He was horrified by the allegations and thought that they were very serious. From his work at Woolworths, he knows that a charge of criminal conduct can result in termination. Such allegations would affect the employability of a person, as a company might be put off hiring a person, whether as an employee or a consultant, with such an allegation hanging over them.
66Again, whilst I accept that it is undoubtedly true that companies would be loath to employ a person against whom credible criminal allegations were made, I am not satisfied that the plaintiff has established that the grapevine effect is in operation in such a way as to make it likely that any of the allegations in the email would be likely to come to the attention of anyone outside the relatively small circle of shareholders in Pacific Dairies. The sort of background checks likely to be conducted by companies that might retain Mr Duckett may well involve searches of traditional and social media, but there is no evidence that this email has been published on any website or is otherwise available on any accessible forum, other than in the private email accounts of the recipients. Other than the defendant’s admission that it was published to 35 persons, and the plaintiff’s evidence that it was seen by at least two people – his accountant’s wife and a friend of his own wife, both of whom were shareholders – there is no evidence about the extent of publication.
67I accept that, within the group of recipients, there is likely to have been some modest “grapevine” effect; that is, that the email may have circulated to other shareholders and some people related to those shareholders, such as the accountant who apparently was not a shareholder. I am not persuaded that the grapevine effect would extend to this being generally in the public domain such that large companies such as BHP would be aware of it, or persons undertaking background checks would be aware of it. It seems more likely that the impact that Mr Duckett describes in his professional life arose from the publicly available social media posts and articles in The Herald & Weekly Times. I am unable to determine the extent to which those articles damaged his reputation, and it is difficult on the evidence to disentangle the consequences of any damage arising from those publications from the damage alleged to have arisen from this publication. It appears, from Mr Duckett’s evidence, that the distress and embarrassment he felt arose from a combination of all the publications, and also the likely stress of the Supreme Court litigation. In assessing damages in this case, I must limit my enquiry to the damage caused by this publication.
68Nevertheless, I do accept that the email had an impact on Mr Duckett and caused him a degree of hurt, distress and embarrassment and he is entitled to damages for those consequences. I also accept that the award of damages must be sufficient to vindicate his reputation and to convince a bystander of the baselessness of the charge.
69I accept that Mr Mitchell’s conduct has aggravated the damages by causing additional stress and embarrassment. Despite the decision of Sifris J in September 2019, Mr Mitchell has never apologised or retracted his remarks. When served with a Concerns Notice, he responded to the plaintiff’s solicitor with a baseless allegation that the solicitor had a conflict of interest. Whilst unrepresented, he pursued fruitless avenues in the litigation which were not sustainable on the pleadings, including attempts to subpoena numerous parties for irrelevant documents and obtain further and better particulars from Mr Duckett. The plaintiff urges on me a conclusion that he also spoke with a journalist from The Herald & Weekly Times and disclosed confidential information about the health status of the former second plaintiff. The evidence that it was Mr Mitchell who provided that information is persuasive but not overwhelming. Nevertheless, it adds to a picture of an entirely unrepentant defendant who in no way resiles from his allegations, even after failed litigation in the Supreme Court, and even after his attempts to get Mr Duckett and the other Board members removed were met with an overwhelming lack of support from the majority of shareholders. There is something of the flavour of a vendetta in Mr Mitchell’s conduct towards Mr Duckett.
70Mr Duckett submits that the appropriate award of damages is in the vicinity of $150,000 and points to recent decisions including the decision of Webster v Brewer (No 3)[28] in which the defamed plaintiffs were awarded $350,000 and $225,000 respectively. There are certainly numerous recent decisions in which awards in the vicinity of $150,000 have been awarded to plaintiffs; however, in many of those cases the defamatory publications were widely disseminated on social media sites such as Facebook and seen by many thousands of people.[29]
[28][2020] FCA 1343
[29]See for example Cables v Winchester [2018] VSC 392; Bolton v Stoltenberg [2018] NSWSC 1518; McDonald v Dods [2017] VSCA 129; Zaia v Eshow [2017] NSWSC 1540
71In comparison, cases where the defamatory publications were confined to a small group have seen significant smaller awards of damages. For example the New South Wales Court of Appeal overturned the trial judge in Murray v Raynor[30] and held that, had it upheld the verdict, the award of damages by the trial judge was manifestly excessive and should be reduced to $25,000. In the case of KSMC Holdings Pty Ltd t/a Hubba Bubba Childcare on Haig v Bowden,[31] the New South Wales Court of Appeal held that an award of damages by the trial judge of $237,970.22 was manifestly excessive and would have been reduced on appeal to $40,000, though in that case, the Court overturned the verdict in favour of Mr Bowden and upheld a defence of qualified privilege. That case involved very serious defamatory imputations made to a small group of people (35 parents whose children attended the childcare centre).
[30][2019] NSWCA 274
[31](2020) 101 NSWLR 729
72In this case, the defamatory publication was to a relatively small group of people. The group was at least 35 people and there is no evidence upon which I can be satisfied that it was seen by significantly more people. There is evidence of a limited grapevine effect which does not, I have found, extend to Mr Duckett’s professional circles. Having regard to all the circumstances of this case, including the seriousness of the allegations and the extent of the publication and the harm to Mr Duckett’s reputation and the aggravating conduct of the defendant, I consider that an award of $45,000 is an appropriate sum.
73Mr Duckett also seeks an injunction. Having regard to the conduct of Mr Mitchell, which I consider to have the flavour of a vendetta, the fact that his conduct during the interlocutory stages of this case indicates he in no way resiles from any of his statements, and his continued casting of aspersions on the plaintiff and his solicitors in submissions and correspondence with the Court, an injunction preventing Mr Mitchell from further publication is appropriate. I will make Orders that Mr Mitchell is restrained from publishing or causing to be published in any form, or maintaining online for downloading, or uploading so as to make available for publication online, the email dated 8 January 2019 at 6.12pm and any other matter to the same purport or effect.
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