Ell v Milne (No 8)
[2014] NSWSC 175
•07 March 2014
Supreme Court
New South Wales
Medium Neutral Citation: Ell v Milne (No 8) [2014] NSWSC 175 Hearing dates: 25, 27, 28 March, 6, 7 May 2013 Decision date: 07 March 2014 Before: McCallum J Decision: Judgment for the plaintiff in the sum of $15,000
Catchwords: DEFAMATION - defences - defence of qualified privilege at common law - email headed "letter to the editor" concerning conduct of developer sent to about 70 email addresses including newspapers, politicians and environmental groups - whether to be inferred that recipients opened and read email - whether email published on an occasion of qualified privilege - defence of contextual truth - whether defendant's contextual imputation concerning political donations proved substantially true
DEFAMATION - damages - where plaintiff did not give evidence or attend any part of hearing - whether entitled to any award for hurt to feelings or any aggravated damagesLegislation Cited: Defamation Act 2005, s 26
Evidence Act 1995, s 140Cases Cited: Andrews v John Fairfax & Sons Limited [1980] 2 NSWLR 225
Carson v John Fairfax & Sons Limited & Slee [1993] HCA 31; 178 CLR 44
Cassell & Co v Broome [1972] AC 1027
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466; (2007) 242 ALR 643
David v Abdishou [2012] NSWCA 109
Ell v Milne (No 5) [2013] NSWSC 246
Ell v Milne (No 6) [2013] NSWSC 599
Ell v Milne (No 7) [2013] NSWSC 600
Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520
Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30
Ratcliffe v Evans [1892] 2 QB 524
Roberts v Bass [2002] HCA 57; 212 CLR 1
Uren v John Fairfax & Sons Pty Ltd (1996) 117 CLR 118
Warren v Warren (1834) 1 C M & R 250Category: Principal judgment Parties: Robert Ell (plaintiff)
Katie Milne (defendant)Representation: Counsel:
T Tobin QC, B Kelleher
T Molomby SC, R Rasmussen and then L Goodchild
Solicitors:
Anthony Smith Solicitor (plaintiff)
NLS Law Pty Ltd (defendant)
File Number(s): 2010/417226 Publication restriction: None
Judgment
HER HONOUR: This is an action for defamation brought by a property developer, Mr William Robert Ell, against Ms Katie Milne, a councillor on Tweed Shire Council. The action arises out of an email headed "letter to the editor" sent by Ms Milne to a number of people, including several journalists.
The email relates principally to the council's treatment of two development applications and calls for an independent review of the developments in question. Mr Ell does not complain of any defamatory imputation arising from those parts of the matter complained of. His complaint is confined to a discrete part of the email which reports that he "supplied bail" for Mr McGurk, who was subsequently murdered. It was common ground at the hearing that Mr McGurk had a reputation for being a standover man.
The email was in the following terms (emphasis added; the underlined passage is the part particularly relied upon by Mr Ell):
Letter to the editor
From Clr Milne
Re: Cobaki and Kings Forest
Putting the Hard Word on the State Govt
I am calling on the community to demand the State Government uphold the request for an independent expert review for Kings Forest and Cobaki
Lakes, despite this amendment, passed at the February Council meeting,
Being voted down at the March meeting.
The State govt must look closely at the peculiar outcomes emanating from this Council. In a strange twist a similar motion subsequently proposed was also voted down but this time Clr Skinner who supported the original amendment but then rescinded it, changed sides again to support the new amendment. If Clr van Lieshout, who supported the original amendment, would have supported this second amendment, and not also changed sides, this second amendment would have gone through.
The State Govt must also keeping mind that Cls Polglass and Clr Youngblutt received massive donations from this developer who donated $80,000 in the 2004 election campaign to the so called Balance Team. There are serious ethical questions about either of these Councillors voting on these developments, despite Clr Youngblutt not being elected for that Council. The entire Council was sacked largely due to the siphoning of such developer funds through this Tweed Directions campaign.
It would have been a very different vote for these two mini cities if Clr Polglase and Youngblutt had removed themselves from the vote as called for by the community. Instead they relied on an extremely questionable loophole that excused them from declaring any conflict after 4 years: I ask in what other sphere are people excused from pay back obligations after 4 years for such enormous sums involved.
It would also have been a very different outcome even only if Clr Holdom who ran a community campaign had voted how her have numerously lamented they expect her too.
The developer Mr Bob Ell has made massive donations to both the State and Federal Labour and Liberal govts as well as the last Council.
The McGurk murder also raises serious concerns. According to Sydney newspapers Mr Bob Ell supplied $100,000 bail when McGurk was accused of firebombings and assault though this was later dropped. McGurk was working for Mr Ell at the time of his murder.
Even further scandal in this whole process has erupted with the unearthing by Senator Ian Cohen of advice from the Dept of Environment in 2006 that was suppressed by then Planning Minister Frank Sartor, that the entire southern and north eastern side of Kings Forest should be preserved as environmental protection zoning. Minister Sartor was later removed from his ministry but is now reinstated as Environment Minister thanks to Premier Keneally.
The Tweed community has lost faith in both the local and State Government. Council is yet to be advised by the State Govt of the outcome of the January meeting where I did manage to get a motion passed to request an independent organisation undertake a full and thorough community consultation process on these developments.
The only way to redeem this situation with any integrity is through a truly independent review by a reputable organisation such as the Sydney University Institute of Sustainable Futures.
Please write to the Premier and Planning Minister Tony Kelly now if you want to see real consultation on these subdivisions, improved sustainability and environmental outcomes, and better social planning for our future.
Regards,
Clr Katie Milne
Carool
The action alleges publication of the email on and after 30 March 2010 and is accordingly governed by the Defamation Act 2005.
The trial of the action was conducted before me without a jury. With the consent of both parties, I determined to give rulings as to whether the imputations relied upon by Mr Ell and a contextual imputation pleaded by Ms Milne by way of defence were conveyed by the matter complained of, before proceeding to deal with the issues of defences and any damages: see Ell v Milne (No 5) [2013] NSWSC 246.
I held that the following imputations relied upon by Mr Ell were conveyed by the matter complained of:
(b) that he had a scandalous association with the murdered man Mr McGurk;
(c) that he paid $100,000 bail for a person who was suspected by police of serious crimes and violence in order to advance his business interests;
(f) that he conducted his business with regard to property development by employing a person with a reputation for violence.
Imputation (f) was held to be conveyed not in the natural and ordinary meaning of the words of the matter complained of but only by reason of the extrinsic fact that Mr McGurk had a reputation in the community as a standover man (see [20] and [28] of the judgment). However, as recorded in my earlier judgment (at [22]), Ms Milne does not dispute that all recipients of the matter complained of knew the extrinsic fact. It follows that imputation (f) was conveyed to all of the recipients of the matter complained of.
In my earlier judgment, I omitted to record my reasons for rejecting that imputation on the natural and ordinary meaning of the words used. The only reference to the proposition that Mr McGurk was a man given to violence within the matter complained of itself was a reference to the fact that Mr Ell "supplied $100,000 bail when McGurk was accused of fire bombings and assault though this was later dropped". I was of the view that a mere reference to Mr McGurk's having been accused of those offences, particularly with the qualification that the charges were later dropped, was not a sufficient basis on which the ordinary reasonable reader could leap to the conclusion that there was substance in the allegations. I acknowledge that the issue was touched on in the context of the statement that "the McGurk murder also raises serious concerns". I nonetheless concluded that, without knowing more of the reputation of Mr McGurk, the ordinary reasonable reader could not derive imputation (f) from the matter complained of except by a process of strained reasoning or being avid for scandal.
In a separate judgment, after hearing further from the parties, I ruled that imputation (c) is not defamatory: see Ell v Milne (No 6) [2013] NSWSC 599 at [5].
After I reserved my decision, Ms Milne filed a notice of motion seeking to have the proceedings dismissed as an abuse of process. I rejected that application: see Ell v Milne (No 7) [2013] NSWSC 600.
It remains to deal with four issues:
(a) the extent of publication of the email;
(b) the defence of qualified privilege relied upon by Ms Milne;
(c) the defence of contextual truth relied upon by Ms Milne;
(d) depending on the determination of those issues, damages.
Scope of publication
The purpose of the remedy of damages for defamation is to vindicate damage to reputation. As explained by the High Court in Dow Jones & Co Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575 at [26], publication must accordingly be understood to be a bilateral act (consisting in both sending and receiving), since it is only when a defamatory publication is comprehended by the reader that harm to reputation is done.
An issue arises in the present case as to the extent to which the email, which was broadly distributed, was in fact received (that is, opened and not disregarded) by those to whom it was sent. In his second further amended statement of claim filed 22 February 2013, Mr Ell alleges that Ms Milne published the letter by sending emails on 30 March 2010 to the Tweed Echo, the Tweed News, the Gold Coast Bulletin, Weekly News on the Net, the Sydney Morning Herald, the Caldera Environment Centre, to Cath Lynch of the Cabarita Beach Residents' Association and to 69 further email addresses listed in a schedule to the pleading (paragraph 3 of the pleading). It is further alleged that Ms Milne sent the email on the same day to Menkit Prince (paragraph 3A) of the pleading. It is further alleged that Ms Milne sent the letter by email on 7 April 2010 to Eloise Farrow-Smith of the Australian Broadcasting Corporation (paragraph 3B of the pleading).
It may be noted that Cath Lynch is one of the 69 people listed in the schedule to the pleading and so is mentioned twice as a person to whom the matter complained of was published.
Mr Ell further alleges that Ms Milne is liable for a series of republications, as follows:
(a) by Cath Lynch of the Cabarita Beach Residents' Association to Vince Connell, the Director of Planning and Regulation at Tweed Shire Council;
(b) by Vince Connell to the Mayor and the executive management team of the council;
(c) by Vince Connell to other councillors of Tweed Shire Council, the General Manager of the Council, the Director of Community and Natural Resources at the Council, the Director of Engineering and Operations at the Council and the Director of Technology and Corporate Services at the Council;
(d) by the Caldera Environment Centre to unnamed persons with access to the email accounts of that centre;
(e) by the Caldera Environment Centre to Kim Hollingsworth;
(f) by Kim Hollingsworth to Scott Sledge;
(g) by Scott Sledge to Andrea Vickers;
(h) by Menkit Prince to unnamed persons belonging to the Rally Round the Caldera Yahoo Group.
Ms Milne admits that the matter complained of was published to two of the people named in the schedule, Julie Boyd and Cath Lynch. There is no other express admission of publication. However, the allegation of publication to Eloise Farrow-Smith of the Australian Broadcasting Corporation and some of the allegations of republication are not traversed in the pleading and so are taken to be admitted. In particular, the following republications are not traversed:
(a) by Cath Lynch to Vince Connell;
(b) by Vince Connell to the Mayor, Warren Polglase, and to the executive management team of the Tweed Shire Council;
(c) by Vince Connell to the other councillors and officers of Tweed Shire Council;
(d) by the Caldera Environment Centre to Kim Hollingsworth;
(e) by Kim Hollingsworth to Scott Sledge.
Mr Molomby SC, who appeared with Ms Goodchild for Ms Milne, explained that Ms Milne was prepared to admit publication wherever the evidence reveals that the email was opened (because it was either replied to or forwarded to someone else). However, where there was no evidence that the email was opened by a particular recipient, Ms Milne does not accept that publication to that person is established (in the bilateral sense discussed in Gutnick).
Ms Milne's admissions are enough to establish the cause of action, for which purpose it is enough if the defamatory matter has been received by a single person (other than the plaintiff). However, the dispute as to the extent of publication must be resolved for the purpose of considering the defence of qualified privilege at common law and as informing the question of damages, if it arises.
The onus of proving publication rests on Mr Ell. No oral evidence was called on that issue, or indeed at all. The case was proved by the tender of documents evidently obtained on discovery from Ms Milne. As already noted, those documents reveal instances in which the email must have been opened by the recipient because it was the subject of a reply or a forwarding email. In particular, Ms Milne received replies from Luis Feliu (tab 6, exhibit A), Julie Boyd (tab 7, exhibit A) and Cath Lynch (tab 9, exhibit A) on 30 March 2010, each of which demonstrated familiarity with, and encouragement of, the contents of the email, as well as an intention to circulate its substance to others. Relevantly Luis Feliu, in his reply, advised Ms Milne that he had made a correction to the open letter, presumably with the intention of later disseminating the edited version. His email was in the following terms:
Thanks for that timely letter Katie! I've been bothered about all these issues, Ken just wrote some great backburners on them as well...
I've changed Labor and Liberal 'govts' to 'parties' (as per donations)...
Later that afternoon, Ms Milne received a reply from Julie Boyd, who wrote to assure her that she had sent her "letter out to everyone so hope they respond", adding further: "Have you sent it [the matter complained of] to Kevin Rudd - if not I think you should!" The last of the replies of 30 March came from Cath Lynch of the Cabarita Beach Residents' Association, who stated simply, "Have forwarded to those members who are on the Internet and asked them to pursue."
Another reply of sorts, addressed primarily to one Kim Hollingsworth but "cc'd" to and also addressing Ms Milne in direct terms, was from Scott Sledge on 2 April 2010 (tab 11, exhibit A), who expressed his familiarity with the contents of Ms Milne's "Cobaki and Kings Forrest Letter to Ed" stating, "Thanks Kim, it is a great letter. Katie, which media did you send this to? Can we quote you?"
Finally, Menkit Prince replied to Ms Milne in an email dated 4 April 2010 (tab 12, exhibit A) which was also sent to the "Rally Round the Caldera" group (of which she was a fellow member). She congratulated Ms Milne for her letter and set out an edited version of it, to which she referred in her reply as "My letter to Premier and Kelly". Publication was not admitted by Ms Milne in relation to Ms Prince; however, it would appear from the contents of the email that she in fact both received and read the matter complained of in full.
Apart from those specific instances where it is accepted that the recipient opened and read the email, Mr Ell's case rests on inference. There is early authority for the proposition that proof of the posting of a letter is prima facie evidence of its publication to the addressee: see Warren v Warren (1834) 1 C M & R 250, cited recently by the Court of Appeal in David v Abdishou [2012] NSWCA 109. One of the issues in David was whether the respondents had "published" a petition by circulating it at a meeting. The appellant submitted that it was sufficient to establish publication that the petition was made available by the respondents and that each person attending the meeting had it available for his or her comprehension, regardless of whether that person actually read or comprehended it. In that context, the Court considered the issue of proof by inference. McColl JA said (at [286] to [287]; Beazley JA and Sackville AJA agreeing at [1] and [392] respectively):
It is self-evident that a plaintiff can prove publication without calling evidence in every case that the matter complained of was in fact communicated to a third party. As Gatley says (at [6.9]), if the plaintiff "proves facts from which it can be inferred that the words were brought to the attention of some third person, he will establish a prima facie case". This will be so if it is a matter of reasonable inference that the matter complained of was "actually seen and read by some third party": Gatley (at [34.9]). Such an inference will be particularly obvious "where the matter is contained in a book or distributed in the news media where in practice it would seem impossible to rebut the inference and in such a case it would seem that the presumption of publication would be impossible to displace": Gatley (at [6.14]). Similarly, as the examples given in Gatley (at [34.8]) indicate, proof that a defamatory letter was sent through the post is prima facie evidence of publication to the person to whom it was addressed: Warren v Warren (1834) 1 C M & R 250. The contents of defamatory matter in a telegram are "necessarily communicated to all clerks through whose hand it passes": Williamson v Freer (1874) LR 9 CP 393 (at 395). Publication may also take place where defamatory matter is placed on a notice board in a position in which it could be read by any passer by: Byrne v Deane [1937] 1 KB 818 (at 829) per Greer LJ; see also Greene LJ (at 838).
However, while the appellants conducted the case on the basis that the jury could infer that at least one person read the petition, they could only get to that stage by calling evidence as to what happened at the meeting. As is apparent from the account of the trial neither of their witnesses on this issue could positively state that any one person read the petition throughout. The appellants then put the submission to the jury that they should infer from those witness' evidence that at least one person did so. As I discuss later in these reasons, it was a matter for the jury whether they were prepared to draw that inference.
It is doubtful whether the principle accepted in Warren in respect of letters is appropriate in the case of email. As revealed in the passage set out above, it is necessary to consider whether it is a matter of reasonable inference that the matter complained of was "actually seen and read by some third party". Mr Molomby identified a series of considerations pointing to the likelihood that many of the recipients would not have opened the email in the present case.
First, Mr Molomby noted that the email is headed "Letter to the editor" and so would be seen at a glance not to be personal to the recipient in the case of many of those to whom it was sent. Secondly, he submitted that the subject matter of the email, whilst of keen interest to some people, would be less so to others. Mr Molomby further submitted that the intense focus in the opening parts of the email upon the specifics of amendments passed and then rescinded at council meetings would quickly have lost the interest of many people who opened the email. He noted that the imputations relied upon by Mr Ell come exclusively from a specific passage of the email which appears more than halfway through the document.
There is force in those submissions. However, I do not think I can conclude that no single person opened and read the email other than those who replied to it or forwarded it on to someone else. It is, of course, impossible to know which of the people to whom the email was sent opened it. I am nonetheless comfortably satisfied that I should infer that some of the people who did not reply to or forward the email still opened it and read it. It is impossible to quantify that class except to say that I am comfortably satisfied the email was probably read by more than a few people but considerably fewer than the complete list of persons to whom it was sent.
In the case of the republications relied upon, in addition to proving the element of publication to those additional people, it is necessary for Mr Ell to establish some basis on which Ms Milne is liable for the republication by another person. For that purpose, it is enough if is established that Ms Milne implicitly authorised each of the republications or that republication was the natural and probable consequence of her publishing the matter complained of: Speight v Gosnay (1891) 60 LJQB 231. Ms Milne has not admitted that element. However, I am satisfied that republication was the natural and probable consequence of her initial email. In particular, I have had regard to the heading "Letter to the editor" and its opening words, which make a call to the community to put "the hard word" on the State government for an independent review of the two development applications discussed. I have also had regard to the relatively wide initial circulation of the email including the fact that it was sent to a number of newspapers.
I am satisfied that Ms Milne is liable for any established republication. However, as with the primary publication, it is difficult to know the extent of republication. I think it is likely in the case of the two republications attributed to Vince Connell that the email would have been opened and read by some of the people on Tweed Shire Council to whom he sent it. However, as to the republications by the Caldera Environment Centre and Menkit Prince, there is simply no evidence before me on the strength of which I can reach any conclusion as to the extent to which the forwarded email was opened and considered by any additional person.
Defence of qualified privilege at common law
Ms Milne relies on the defence of qualified privilege at common law, asserting the existence of a common and mutual interest between herself as publisher and the recipients of the publication, being matters of public interest. In particular, she alleges that the publication related to the following subjects of public interest:
(a) the integrity and independence of the processes of government;
(b) the character of persons and their associates involved in developments having major public impact.
As recently emphasised by the Court of Appeal, the hallmark of the defence is reciprocity of duty or interest between the person making the statement and the recipient of the statement: see Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30 at [3] per Allsop P; Hoeben JA agreeing at [398].
In Megna the Court held that, leaving aside the Constitutionally-founded privilege concerning discussion of government and politics recognised in Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 (which is subject to a requirement that the defendant's conduct in publishing the matter complained of be reasonable), there is no broad category of qualified privilege based on shared presumed political interest (at [9] to [25] per Allsop P; at [156] to [175] per Beazley JA). The defendant's defence in the present case comes close to asserting otherwise.
In a short separate judgment, the President noted that the trial judge's task of determining whether an occasion of privilege arises is an evaluative one. His Honour explained the nature of that task as follows (at [5]):
The concept of reciprocity of interest or duty and the cognate notions involved such as the common convenience and welfare of society, public or private duty whether legal or moral, and the relevant community of interest of the parties are general and stated at a high level of abstraction: Bashford at 373 [10]. Their application to a particular given conclusion requires close scrutiny of the facts of the case, the situation of the parties and the relationships and circumstances leading up to and surrounding the publication: Guise v Kouvelis [1947] HCA 13; 74 CLR 102 at 116-117; Bashford at 373 [10].
That task was rendered difficult in the present case by a lack of evidence. First, as already explained, Mr Ell's case did not prove which of the relatively large number of people to whom the email was sent or republished opened it, his case resting on the probability that at least some of them did.
More problematically, Ms Milne also adduced no evidence. Accordingly, a "close scrutiny" of the situation of the parties and the relationships and circumstances leading up to and surrounding the publication is not possible.
Those difficulties arose in the context that the onus is on Ms Milne to prove that the recipients of the matter complained of had the requisite interest. In Lange, the High Court said (at 572):
At common law, once an occasion of qualified privilege is found to exist, the privilege traditionally protects a communication made on that occasion unless the plaintiff is actuated by malice in making the communication. But, apart from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients. If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth. Publication beyond what was reasonably sufficient for the occasion of qualified privilege is unprotected. Because privileged occasions are ordinarily occasions of limited publication - more often than not occasions of publication to a single person - the common law has seen honesty of purpose in the publisher as the appropriate protection for individual reputation. As long as the publisher honestly and without malice uses the occasion for the purpose for which it is given, that person escapes liability even though the publication is false and defamatory. But a test devised for situations where usually only one person receives the publication is unlikely to be appropriate when the publication is to tens of thousands, or more, of readers, listeners or viewers.
As to the existence of an occasion of qualified privilege in the context of widespread publication, Stephenson LJ in Blackshaw v Lord and Others [1983] 2 All ER 311; [1984] QB 1 (at 26D-E) said (citations omitted):
The subject matter must be of public interest; its publication must be in the public interest. That nature of the matter published and its source and the position or status of the publisher distributing the information must be such as to create the duty to publish the information to the intended recipients, in this case the readers of the "Daily Telegraph." Where damaging facts have been ascertained to be true, or been made the subject of a report, there may be a duty to report them, provided the public interest is wide enough. But where damaging allegations or charges have been made and are still under investigation, or have been authoritatively refuted, there can be no duty to report them to the public.
Against those principles, Mr Tobin submitted that there can be no defence of qualified privilege at common law in the present case, owing to the width of publication and Ms Milne's failure to discharge her onus to show an interest on the part of all of the recipients in having the information.
Mr Molomby submitted that, at least as to some of the republications, the existence of the relevant interest could be inferred on the strength of the identity of the office or group to which the email was sent. As already noted, Mr Vince Connell, the Director of Planning and Regulation at Tweed Shire Council, republished the email to a number of councilors and council officers. Separately, the email was sent to a number of groups which, on the basis of their title, may be thought to have an interest in protecting the environment. That, however, is a matter of speculation.
I am simply unable, on the strength of the scant evidence before me, to undertake the examination required in order to form an evaluative judgment as to whether a privileged occasion existed. With little more evidence to inform the undertaking of that task than a list of names and email addresses revealing that the matter was sent to journalists, politicians, special interest groups and a series of individuals about whom I know nothing, Ms Milne's case on the issue of qualified privilege reduces, in effect, to the contention that, since he is a property developer involved in developments having major public impact, Mr Ell's character is properly a matter of interest to the public at large. That proposition is rejected by the authorities to which I have referred.
For those reasons, I am not satisfied that the matter complained of was published on an occasion of qualified privilege.
In case that conclusion is wrong, I should address two further issues. Mr Tobin submitted that, if the matter complained of was published on an occasion of qualified privilege, the particular part of the matter complained of which is the focus of Mr Ell's claim (the McGurk paragraph) was irrelevant to the occasion. I do not accept that submission. I consider that material to be clearly relevant to the topics identified by the defendant as being of public interest.
Secondly, Mr Tobin submitted that I should be satisfied that the publication was actuated by malice on the part of Ms Milne. On that issue, the onus of proof is on Mr Ell to prove that the occasion was used for a purpose or motive foreign to the interest that protected it. However, as explained by Gaudron, McHugh and Gummow JJ in Roberts v Bass [2002] HCA 57; 212 CLR 1 at [76], improper motive "must not be confused with the defendant's ill-will, knowledge of falsity, recklessness, lack of belief in the defamatory statement, bias, prejudice or any other motive than duty or interest for making the publication".
In the absence of evidence from any witness, the allegation of malice was necessarily based on the content and tone of the matter complained of. On my reading of it, including the impugned passage, I see no basis for inferring any improper motive on the part of Ms Milne. On the contrary, the letter reads as a passionate plea for a broader community discussion of the topics of public interest identified in support of the defence. Had it been necessary to decide this issue, I would not have been satisfied that the defence of qualified privilege was defeated by malice.
Contextual truth defence
Ms Milne relies on the defence of contextual truth under s 26 of the Defamation Act. Section 26 provides:
It is a defence to the publication of defamatory matter if the defendant proves that:
(a) the matter carried, in addition to the defamatory imputations of which the plaintiff complains, one or more other imputations (contextual imputations) that are substantially true, and
(b) the defamatory imputations do not further harm the reputation of the plaintiff because of the substantial truth of the contextual imputations.
In my earlier judgment in Ell v Milne (No 5), I found that the matter complained of conveyed the following contextual imputation (pleaded at paragraph 8(a)(i) of the defence to second further amended statement of claim):
(i) that as a developer [Mr Ell] has attempted to buy the favours of state government and the local council by making large donations to political parties and election campaigns.
The first issue is whether Ms Milne has proved the substantial truth of that imputation. In that context, Mr Tobin reminded me of the provisions of s 140(2)(c) of the Evidence Act 1995, which lists "the gravity of the matters alleged" as a mandatory consideration in the application of the civil standard of proof. Mr Tobin cited the decision of the Full Court of the Federal Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466; (2007) 242 ALR 643, where the Court observed (uncontroversially) that the effect of the mandatory considerations specified in that section is that, "the more serious the consequences of what is contested in litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion": at [30] per Weinberg, Bennett and Rares JJ.
In this case, the accusation that Mr Ell "attempted to buy the favours of state government and the local council" is undoubtedly a serious one. It is necessary to have close regard to the strength and weakness of the evidence (and the inferences that can properly be drawn from the evidence) before I could be comfortably satisfied as to the substantial truth or otherwise of the contextual imputation.
It is important to consider precisely what the imputation alleges. The sting of the imputation is the assertion that Mr Ell attempted to buy favours (by the method of making large political donations). That is, in substance, an accusation of a species of corruption. It is stronger than an assertion of attempting to influence or persuade. To "buy favours" is to secure the certainty of a favourable outcome by agreement and regardless of propriety. The imputation thus amounts, in effect, to an assertion that Mr Ell attempted to corrupt the ordinary processes of State and local government by making political donations.
The contention that the imputation was substantially true was, to a degree, rhetorical. It was contended, in effect, that the making of large political donations is inherently corruptive of those processes.
The principal evidence relied upon to prove the imputation was the donations themselves. It should be noted that none of the donations was made by Mr Ell personally. Ms Milne tendered a list of political donations made between December 2000 and February 2007 by two companies allegedly controlled by Mr Ell, Leda Holdings Pty Ltd and North Steyne Investments Pty Ltd (exhibit 2).
Mr Ell admits that, at all material times, he was a director of Leda Holdings and that, from November 2003, he was a director of North Steyne Investments (exhibit 4, answers to interrogatories 32-33). In respect of the donations made by those companies, Mr Molomby invited me to infer, with particular reference to the documents in exhibit 2, that Mr Ell was the "controlling mind behind all the transactions" (T88).
The documents include invoices and letters often addressed to or "care of" Mr Bob Ell. Many bear what appears to be his signature. It seems likely that Mr Ell was aware of and in many instances directly authorised at least some of the political donations of Leda Holdings and North Steyne Investments.
The largest of the donations was made by North Steyne Investments on 7 October 2005 to the NSW ALP in the amount of $110 000.00 (exhibit 2, tab 8). According to Mr Ell, that was the fee payable to become a "Foundation Member of the NSW Labor Party's Business Dialogue" (exhibit 4, answer to interrogatory 24(b)). It was evidently paid by North Steyne Investments in order to secure Foundation Membership for Leda Holdings at the election of Mr Ell (exhibit 4, answer to interrogatory 24(c)).
Mr Molomby submitted that the only conceivable reason for the payment being made in the name of North Steyne was "to conceal the fact that the money was coming from Leda" (T89). Whilst the fact that the donation was made by one company apparently for the benefit of another might arouse suspicion, I do not think any sinister inference can safely be drawn as to Mr Ell's state of mind from that bare fact.
In his answers to interrogatories, Mr Ell stated that he made political donations to exercise his right as a citizen in the interest of his business and the wider community and in particular to encourage groups known to support economic growth (answer 17(d) in exhibit 4). In the same document, he acknowledged that most if not all of the donations were solicited by representatives of the donee party.
It was submitted on behalf of Ms Milne that there was a measure of tension between those two answers and that I should infer that the real purpose behind donating the sums requested and attending various donor events was to "buy the favours" of those in government and local council who were, or might in the future be, in a position directly to advance Mr Ell's business interests (T103).
Mr Molomby also relied on the pattern of donations in the relevant period. In particular he noted that the NSW Liberal Party, which is known to support economic growth, received only two of the numerous donations made during the relevant period (exhibit 1). Mr Molomby submitted that the pattern of payments demonstrates that donations were made not to "groups known to support economic growth" (as asserted in the answers to interrogatories) but only to those in government or as contingency payments to those who may soon be in government. Mr Molomby submitted on that basis that it could be inferred that the donations were made for the nefarious purpose of attempting to acquire a right to favourable treatment in respect of Mr Ell's development proposals.
That Mr Ell was seeking a direct benefit for his development projects rather than merely wishing to assist "groups known to support economic growth" was also said to be evident in the absence of donations at a federal level over the relevant period. Mr Molomby submitted, in effect, that federal government policy has a greater impact on economic growth and limited influence in the sphere of planning law and development consent. The absence of donations at a federal level was said to betray the true purpose of Mr Ell's donations as being an attempt to buy favours for himself.
Apart from the inference said to arise from the donations themselves, Mr Molomby relied on a letter dated 8 December 2005 addressed to the then Minister for Planning, the Honourable Frank Sartor, written by Mr Ell. Mr Molomby submitted that the letter demonstrates, at least inferentially, a specific instance in which Mr Ell expected favourable consideration in relation to a development application (exhibit 6).
The letter indicates that Mr Ell had previously attended a Christmas drinks function with the Minister and the Premier. The letter expresses Mr Ell's surprise that the Minister was apparently not aware of Mr Ell's company's "3A application" in relation to the potential development of an area known as Kings Forest. Copies of earlier correspondence between representatives of one of Mr Ell's companies and the Minister's department regarding the 3A application were enclosed. The letter concluded (exhibit 6, letter 2):
We took [sic] forward to hearing back from you as soon as possible and look forward to a successful completion of this matter.
Mr Molomby submitted that the letter reveals a connection between the payment of $110,000 for Leda Holding's membership as a Foundation Partner in the Business Dialogue program (one of the benefits of which was ten invitations to the "Premier's Private Christmas Drinks": exhibit 7, p 6) and an attempt to secure the Minister's preferential treatment of the pending application.
In particular, Mr Molomby relied upon the sequence of those events: Leda Holdings obtained membership of the Business Dialogue in October 2005 (exhibit 1); in November of that year, Leda Holdings applied to have its Kings Forest project declared a State Significant Development under the State Environmental Planning Policy (Major Projects) Act 2005 (exhibit 6, letter 1); Mr Ell subsequently attended the Premier's Private Christmas Drinks and finally, in December 2005, Mr Ell sent the letter to the Minister for Planning discussed above (exhibit 6, letter 2). It was submitted that that course of events substantiates the allegation that the donation was an attempt to buy favours.
Returning to the terms of the contextual imputation, Mr Molomby submitted that the simple fact that money was paid by Mr Ell justified the use of the term "buy" in the context of the imputation (T103). As already indicated, I think that is a rhetorical contention. It assumes that there is no such thing as a political gift and that all political donations are inherently corruptive. That is an opinion to which some members of the community may adhere but I do not think it is appropriate to treat it as a fact or an established premise for the purposes of determining Ms Milne's contextual truth defence.
None of the documents in evidence, nor any inference that may be fairly drawn from them, reasonably sustains a finding that Mr Ell attempted to buy the favours of the NSW State Government and the Tweed Shire Council. I am not satisfied that the contextual imputation has been proved to be substantially true.
It follows that it is not necessary to determine the second issue raised by the defence (whether because of the substantial truth of the contextual imputation the defamatory imputations established by Mr Ell do not further harm his reputation). In case my conclusion as to the truth of the contextual imputation is wrong, I should indicate that, had it been necessary to decide that second issue, I would not have been persuaded of that element of the defence. Having regard to the seriousness and the difference in kind of the conduct alleged in the plaintiff's imputations, I consider that his reputation would have been further harmed by those imputations even if the context were that the contextual imputation was true.
Damages
It follows that Mr Ell is entitled to an award of damages. The purposes of an award of general damages for defamation are threefold, as explained by the High Court in Carson v John Fairfax & Sons Limited & Slee [1993] HCA 31; 178 CLR 44 at 60 (citations omitted):
The three purposes no doubt overlap considerably in reality and ensure that "the amount of a verdict is the product of a mixture of inextricable considerations". The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant's personal and (if relevant) business reputation and vindication of the appellant's reputation. The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant. Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant's reputation. "The gravity of the libel, the social standing of the parties and the availability of alternative remedies" are all relevant to assessing the quantum of damages necessary to vindicate the appellant.
In determining the amount of damages to be awarded for those purposes, the court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded: s 34 of the Defamation Act. The maximum amount that may be awarded for those purposes is presently capped at $355,500: Gazette No 65 of 31.5.2013, p 2307. That is the cap that applies to the whole claim in the proceedings even though each email that was opened and read technically constitutes a separate publication: see Davis v Nationwide News Pty Limited [2008] NSWSC 693 per McClellan CJ at CL at [8] to [9].
Vindication of the plaintiff's reputation
Mr Ell did not give evidence, did not call a single witness and did not attend any part of the hearing. There was no evidence of the kind commonly called in defamation cases from persons who can attest to a plaintiff's good reputation.
It does not follow that there is no entitlement to an award for damage to reputation. Mr Ell enjoys the benefit of a legal presumption, upon proof of the publication of a defamatory imputation, that some damage is caused to reputation for which damages must be awarded: Ratcliffe v Evans [1892] 2 QB 524 at 528. Such an award must be sufficient to vindicate Mr Ell and will necessarily reflect the nature of the matter complained of and the extent of its publication (cf Uren v John Fairfax & Sons Pty Ltd (1996) 117 CLR 118 at 150). The award must serve to vindicate Mr Ell by operating to "convince a bystander of the baselessness of the charge": Cassell & Co v Broome [1972] AC 1027 at 1071.
As submitted by Mr Molomby, although the plaintiff is presumed to be a person of good reputation, what that means is that he is presumed to come to Court with an untarnished reputation, "not a reputation as a hero" (T130).
Mr Molomby submitted that, without evidence of reputational damage or distress, only nominal damages should be awarded to Mr Ell. Mr Molomby specified that he meant truly nominal damages, in the order of, say, one dollar. So far as damage to reputation is concerned, I do not think that would be a correct approach. I do not think it can be said that the damage to Mr Ell's presumed good reputation can be vindicated by an award of nominal damages.
The imputations on which Mr Ell has succeeded are serious: it has been alleged that he had a scandalous association with the murdered man Mr McGurk and that he conducted his business with regard to property development by employing a person with a reputation for violence. A competing consideration is of course the limited scope of publication, discussed in detail above. But even noting the limited scope of publication proved by Mr Ell, an award of one dollar would be derisory and would not meet the object of vindicating his presumed reputation.
Consolation for the wrong done
Mr Tobin submitted that Mr Ell is entitled to damages for hurt to his feelings notwithstanding his failure to give evidence.
As noted by Mr Molomby, it is extremely unusual for a plaintiff not to give evidence. It was a course taken by the late Mr Kerry Packer when he sued the ABC for a program on Lateline which was found to have conveyed the imputation that he was a corporate crook: Packer v Australian Broadcasting Corporation (1993) 116 FLR 306. Significantly, however, two witnesses were called in Mr Packer's case (including his son) to give evidence of his response to the broadcast, which had been one of hurt and outrage.
Higgins J acknowledged having difficulty assessing the component for hurt to feelings, largely due to the absence of direct evidence from the plaintiff. His Honour was troubled by the possibility that Mr Packer's response was in part due to another aspect of the program which was not defamatory (his being associated with a class of entrepreneurs whom he evidently considered beneath him). His Honour was nonetheless prepared to infer that at least a portion of Mr Packer's distress was attributable to the defamatory meaning complained of.
The program was broadcast throughout Australia. Mr Packer was awarded $40,000 by way of general damages and an additional $5000 for aggravated damages including increased hurt due to the publication of an "appallingly incompetent and arrogant 'apology'".
I do not accept that Mr Ell is entitled to damages for distress or hurt to his feelings in the present case. There is no legal presumption of hurt feelings. That aspect of the claim should only sound in compensation where it is established as a fact on the evidence. It is a matter which could conceivably be established by inference but it is not an inference I am prepared to draw in the present case. Mr Ell's failure to give evidence was unexplained. The fact that he did not attend a single minute of the hearing speaks against his having suffered any real distress or hurt caused by the publication. There was no evidence as to the circumstances in which the matter complained of came to his attention or as to his reaction to it. Hurt is not the only conceivable emotional response Mr Ell might have experienced.
Aggravated damages
The plaintiff also claims that his damages are aggravated by Ms Milne's failure to apologise, Mr Ell's knowledge of the falsity of the allegations, Ms Milne's recklessness in publishing the matter complained of without making inquiries as to the truth of the imputations, her failure to make enquiries of Mr Ell prior to publication "as a consequence of which the matter complained of came to his notice without forewarning" and the conduct of the defence including the withdrawal of a plea of truth, statements made by senior counsel in open court and the non-admission of the publication of the matter complained of.
There can be an award of aggravated damages in defamation even where there is no evidence that the matters relied upon came to the attention of the plaintiff and exacerbated any hurt to feelings. Mr Tobin drew my attention to the decision of the Court of Appeal in Andrews v John Fairfax & Sons Limited [1980] 2 NSWLR 225 especially at [74], page 250A. It is clear from that decision that a connection between the aggravating behaviour and an augmented sense of hurt can be presumed. However, those remarks were made in the context that Mr Andrews had given "eloquent evidence" of the hurtful impact of the publication (at [49], page 243G). The gist of the complaint on appeal seems to have been that he should not have been awarded aggravated damages in the absence of specific evidence as to the incremental impact of the aggravating behaviour, a proposition rejected by the Court.
What is also clear from the decision in Andrews is that damages may only be award for such relevant harm as is established on the evidence, whether by direct evidence or as a matter of inference. It is accordingly necessary to focus on the capacity of the alleged aggravating factors to increase the injury to the plaintiff: cf Triggell v Pheeney (1951) 82 CLR 497 at 513 to 514 per Dixon, Williams, Webb and Kitto JJ.
In Waterhouse v Station 2GB Pty Ltd (1985) 1 NSWLR 58, Hunt J noted (at 75) that aggravated compensatory damages are usually awarded only in relation to the injury to the plaintiff's feelings but are not necessarily so limited and that "there may be conduct which has the effect of increasing the injury to the plaintiff's reputation as well". As his Honour's discussion reveals, it is also important to be careful not to award punitive damages.
In the present case, most of the particulars of aggravated damage relied upon by Mr Ell are incapable of increasing injury to reputation and, in the absence of evidence from him, cannot be found to have been a factor causing or augmenting any hurt to his feelings.
Dealing with the alleged factors of aggravation in turn, an apology may have mitigated injury to reputation but I am not persuaded that the absence of an apology has aggravated such injury.
Mr Ell has given no evidence of his knowledge of the falsity of the imputations.
Ms Milne's alleged recklessness in publishing the matter complained of without making inquiries as to the truth of the imputations is not logically a factor that aggravates injury to reputation - the letter says what it says.
Ms Milne's failure to make enquiries of Mr Ell prior to publication "as a consequence of which the matter complained of came to his notice without forewarning" is a factor which might have aggravated the injury to Mr Ell's feelings but it is not logically capable of aggravating injury to reputation.
In my view, the only particulars of aggravation capable of increasing injury to reputation are three of the four particulars relating to the conduct of the defence. Those particulars are set out at paragraph 12 of the second further amended statement of claim as follows:
(i) the pleading of justification and the maintaining of that plea on the record until 25 July 2011;
(ii) the pleading and the particularization of the plaintiff's alleged participation in an electoral fraud until struck out respectively by McCallum J on 22 March 2012 and 10 December 2012 and maintained thereafter in open court by counsel for the defendant on 18 February 2013;
(iii) the statements of senior counsel for the defendant in open court on 17 June 2011.
A fourth particular relating to the conduct of the defence complains of the non-admission of the publication of the matter complained of notwithstanding the existence of documents demonstrating that the email must have been read by some people. I do not think that it is a factor capable of increasing injury to reputation.
For an award of aggravated damages it must be demonstrated that the impugned conduct was lacking in bona fides or improper or unjustifiable in all the circumstances: Triggell v Pheeney at 514 per Dixon, Williams, Webb and Kitto JJ. The plea of justification, withdrawn well before the final hearing, is a factor capable of increasing the injury to Mr Ell's reputation. The pleading of the defence may have extended the "vitality" of the defamation in the sense considered by the majority of the High Court in The Herald and Weekly Times Ltd v McGregor (1928) 41 CLR 254 at 263. Equally, the contextual imputation alleging electoral fraud, which was struck out before trial, was in my view unjustifiably maintained and may have increased the effect of the libel.
However, I am not persuaded that the degree to which those factors have in fact aggravated the injury to the plaintiff's reputation is more than very slight. I accept, as submitted by Mr Tobin, that those are matters which have been put on the record and which remain on the record in a formal sense "for many moons". However, the matter has not received the kind of attendance in the public gallery as in some cases over which I have presided. There was no evidence of its having been reported. In my assessment of the circumstances of this particular case, I doubt whether the conduct of the defence in this litigation would have received any serious attention in any person's assessment of Mr Ell's reputation.
It remains to consider the remarks of Mr Molomby complained of by Mr Ell. The impugned remarks were made on 17 June 2011 in the context of argument as to the particulars been provided in support of the contextual truth defence. At that stage, the only particulars in support of the defence were a list of donations allegedly made by Mr Ell (or companies allegedly controlled by him).
In that context, anticipating a submission that political donations are legal, Mr Molomby said (transcript page 19, reproduced at page 45 of exhibit A):
We can all envisage late night gangster movies when the gangster said: "I just gave him a birthday present. What's wrong with a present? It was his birthday". A publican can give a person free drinks but if the drinks are given to the local police regularly as they come through the hotel will (sic) and that is captured on CCTV and demonstrable but one does not have more than that; what is - when that is published - the imputations that arise from it? The imputation that arises in loose terms was the publican was softening up the police so that when there is a brawl and they are needed they will come faster and give better service and so when, there is some trouble of any sort that the publican might get a soft touch. But none of these purposes are specified in the nature of the transaction. It is a generalized, as I say, softening up, buying of favours in advance for whatever circumstances turns out to trigger the need.
Later, Mr Molomby said (at transcript page 31, reproduced at page 47 of exhibit A):
The nature of such conduct in life usually does not allow great specificity. If somebody is softening up someone by giving repeatedly large whacks of money that is usually all that could be said. That is the reality of life. Not just this situation. It is how such transactions work and notoriously work. One could never realistically go beyond that. Of course there is very good practical reasons why it is done that way. It is so the favourable result ensued cannot be tracked back. There wasn't a brown paper bag passed under the lamplight at midnight. Somebody who stood as a candidate didn't have to go to their own pocket for the campaign because some friendly man came to the campaign allowing them to keep money in the pocket. That is how it works.
At the time of that argument, Mr Tobin immediately expressed his shock at those remarks and flagged his intention to rely upon them in aggravation of damages, since they amounted to a suggestion in open court of corrupt conduct on the part of the plaintiff. As already noted, however, there is no suggestion that the remarks were reported to Mr Ell and upset him. They are relevant, if at all, only to the issue of damage to reputation, not hurt to feelings.
I am not persuaded that the remarks were lacking in bona fides or improper or unjustifiable in the required sense. In assessing issues of this kind, some allowance must be made for the flourishes of advocacy. A barrister is required fearlessly to uphold his client's interests. There is no single correct or appropriate standard of conduct for that often difficult task. Litotes can be effective but it is not compulsory. I would accept that Mr Molomby's submissions entailed the use of colourful analogy and perhaps a degree of exaggeration or at least eccentricity. His argument was not successful, but I do not think it was improper or unjustifiable such as to aggravate Mr Ell's damages.
In my view, having regard to the limited extent of publication established on the evidence and the fact that the award is confined to damage to Mr Ell's presumed reputation with no component for distress or hurt to feelings, the appropriate award (including very slight aggravation for the conduct of the defence) is the sum of $15,000.
Orders
I order that there be judgment for the plaintiff in the sum of $15,000.
It will be necessary to hear the parties as to costs.
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Decision last updated: 13 March 2014
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