Essey v Harding - [2002] WASC 209

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: ESSEY & ANOR -v- HARDING & ANOR [2002] WASC 209

CORAM: HASLUCK J

HEARD: 22-26 APRIL, 18 JUNE 2002

DELIVERED : 30 AUGUST 2002

FILE NO/S: CIV 1190 of 1998

BETWEEN: FRED JOSEPH ESSEY
First Plaintiff
ALL-FECT DISTRIBUTORS LTD
Second Plaintiff
AND
MARLENE ANNE HARDING
First Defendant
PINEGATE HOLDINGS PTY LTD
Second Defendant
(BY ORIGINAL ACTION)
MARLENE ANNE HARDING
First Plaintiff
PINEGATE HOLDINGS PTY LTD
Second Plaintiff
AND
FRED JOSEPH ESSEY
First Defendant
ALL-FECT DISTRIBUTORS LTD
Second Defendant
(BY COUNTERCLAIM)

Catchwords:

Defamation - Newsletter circulated to school canteens - Review of product marketed by plaintiff - Whether words complained of identified plaintiff company and its managing director - Meaning of words complained of - Whether words complained of were too extreme - Whether discrepancies on label description sufficient to support plea of justification - Defence of fair comment - Whether words spoken on privileged occasion - Counterclaim in respect of plaintiff's written response to criticisms - Whether response published on a privileged occasion - Assessment of damages

Legislation:

Supreme Court Act 1935, s 32

Result:

Judgment for the plaintiffs

Category: B

Representation:

Original Action

Counsel:

First Plaintiff                :     Mr J F Hassett
Second Plaintiff            :     Mr J F Hassett
First Defendant             :     Mr J T Schoombee & Mr S L Dworcan
Second Defendant         :     Mr J T Schoombee & Mr S L Dworcan

Solicitors:

First Plaintiff                :     Tottle Christensen
Second Plaintiff            :     Tottle Christensen
First Defendant             :     Phillips Fox
Second Defendant         :     Phillips Fox

Counterclaim

Counsel:

First Plaintiff                :     Mr J T Schoombee & Mr S L Dworcan
Second Plaintiff            :     Mr J T Schoombee & Mr S L Dworcan
First Defendant             :     Mr J F Hassett
Second Defendant         :     Mr J F Hassett

Solicitors:

First Plaintiff                :     Phillips Fox
Second Plaintiff            :     Phillips Fox
First Defendant             :     Tottle Christensen
Second Defendant         :     Tottle Christensen

Case(s) referred to in judgment(s):

Adam v Ward [1917] AC 309
Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225
Australian Broadcasting Corp v McBride (2001) 53 NSWLR 430
Calwell v Ipec Australia Ltd (1975) 135 CLR 321
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Cassell & Co Ltd v Broome [1972] AC 1027
Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 8 December 1997
Coyne v Citizen Finance Ltd (1991) 172 CLR 211
Crampton v Nugawela (1996) 41 NSWLR 176
Dakhyl v Labouchere [1908] 2 KB 325
David Syme & Co v Canavan (1918) 25 CLR 234
Duane v Granrott [1982] VR 767
Edwards v Bell [1824] Bing 403
Guise v Kouvelis (1947) 74 CLR 102
Henry v TVW Enterprises Ltd (1990) 3 WAR 474
Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440
Horrocks v Lowe [1975] AC 135
Hunt v Star Newspaper Co Ltd [1908] 2 KB 309
John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131
Jones v E Hulton & Co [1909] 2 KB 444
Jones v Skelton [1964] NSWR 485
Kemsley v Foot [1952] AC 345
Kennett v Farmer [1988] VR 991
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520
Loveday v Sun Newspapers Ltd (1938) 59 CLR 503
Marks v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 14 WAR 360
Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632
Munro v Coyne [1990] WAR 333
Oracle International Pty Ltd v West Australian Newspapers Ltd, unreported; SCt of WA; Library No 970696; 11 December 1997
O'Shaughnessy v Mirror Newspapers Ltd (1970) 125 CLR 166
Penton v Calwell (1945) 70 CLR 219
Pervan v North Queensland Newspaper Co Ltd (1993) 178 CLR 309
Ratcliffe v Evans [1892] 2 QB 524
Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1
Smith's Newspapers Ltd v Becker (1932) 47 CLR 279
Telnikoff v Matusevitch [1992] 2 AC 343
Thomas v Bradbury, Agnew [1906] 2 KB 627
Todd v Swan Television and Radio Broadcasters Pty Ltd [2001] WASC 334
Triggell v Pheeney (1951) 82 CLR 497
Turner v Metro-Goldwyn-Mayer Pictures Ltd [1950] 1 All ER 449
Uren v John Fairfax & Sons (1966) 117 CLR 118
Watts v Times Newspapers [1997] QB 650
Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71

Case(s) also cited:

Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 144 ALR 528
Andreyevich v Kosovich & Publicity Press (1938) Pty Ltd (1947) 47 SR (NSW) 357
Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183
Broadway Approvals Ltd v Odhams Press Ltd [1965] 2 All ER 523
Brown v Marron [2001] WASC 100
Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519
Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361
Cock v Hughes [2001] WASC 151
Cohen v McEvoy [2001] WASC 349
Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86
FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 479
Howden v Truth & Sportsman Ltd (1937) 58 CLR 416
Howe & McColough v Lees (1910) 11 CLR 361
Huth v Huth [1915] 3 KB 32
John v MGN Ltd [1997] QB 586
Lang v Willis (1934) 52 CLR 637
McKenzie v Mergen Holdings Pty Ltd (1990) 20 NSWLR 42
Morgan v Mallard (1997) 68 SASR 184
Nixon v Slater & Gordon (2000) 175 ALR 15
Powell v Gelston [1916] 2 KB 615
Rigby v Associated Newspapers Ltd [1969] 1 NSWR 729
Robinson v Corse, unreported; SCt of WA; Library No 970004; 15 January 1997
Slipper v British Broadcasting Corporation [1991] 1 QB 283
State Bank of New South Wales Ltd v Currabubula Holdings Pty Ltd (2001) 51 NSWLR 399
Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348
Typing Centre of New South Wales Pty Ltd v Northern Business College Ltd (1989) 13 IP 627
Vinon Holdings Pty Ltd v Martin [2001] WASC 260
Weld-Blundell v Stephens [1920] AC 956
World Hosts Pty Ltd v Mirror Newspapers Ltd [1978] 1 NSWLR 189

HASLUCK J: The plaintiffs in these proceedings seek relief in respect of an article published by the defendants in September 1997 which is said to be defamatory. The plaintiffs responded to the article complained of by a circular letter dated 15 October 1997 and this, in turn, has led to the defendants seeking relief by way of counterclaim. The dispute between the parties arises out of the marketing of certain imported noodle products within the State of Western Australia. I must begin by describing the background to the dispute.

Background

The first plaintiff, Fred Essey, is a director of the second plaintiff, All‑Fect Distributors Ltd, being a company incorporated in New South Wales. He said in answers to interrogatories that he was the managing director. At all material times the plaintiff's three sons were directors of the company. It follows that although the second plaintiff is an unlisted public company, it was in many ways a family concern.
All‑Fect is a distributor of food products throughout Australia with a number of its lines being imported from overseas. All‑Fect's products are distributed within the State of Western Australia and the company is therefore obliged to comply with regulatory provisions established by Western Australian law. It seems that the business was previously known as Millers Distributing Co. The letterhead of the second plaintiff as at mid 1997 described the company as "All‑Fect Distributors Limited trading as Millers Distributing Co".
The second defendant, Pinegate Holdings Pty Ltd, is and was at all material times a company incorporated in the State of Western Australia. It is known as GUYS and is the publisher of a newsletter called "Western Australian School Canteen News". The first defendant is a director of the second defendant and writes for Canteen News. Pinegate is a company that also distributes food products.
In or about November 1994 Mr Essey and Ms Harding attended the annual general meeting of the National Confectionary Wholesalers Association in New South Wales. On the defendants' case, at that meeting Ms Harding informed those in attendance of problems with the labelling of a particular confectionary product and the reason why the product did not comply with Western Australian law. Mr Essey conceded in his evidence at the trial that he was at the conference but said that he did not meet Ms Harding. He "saw" her at the conference but was not introduced to her and therefore did not have any significant association with her prior to the events giving rise to the dispute.
One of the products brought in from overseas by All‑Fect was a product known as Mamee Noodles. Towards the end of 1996 the plaintiff ceased to handle this product. Thereafter, within Western Australia, the Mamee Noodles product was distributed by GUYS. The first defendant suggested in evidence that the financial returns to her company from distributing Mamee Noodles were insignificant. She said in her answers to interrogatories that the second defendant purchased Mamee Noodles from a wholesale food company and on‑sold the product to various schools in Western Australia. The gross revenue generated by the distribution of the product during the 1997/98 financial year was $2,019.25.
The Malaysian company Carjen Food Sdn. Bhd. is the manufacturer of JJ Noodles being a product marketed for worldwide distribution. The Malaysian company is responsible for the information appearing on the label of the product. It seems that in or about May 1997 All‑Fect became the distributor of this product within Australia. All‑Fect arranged for JJ Noodles to be marketed in Western Australia by a local distributor known as Confectionary Distributors or CD's.
The letter from All‑Fect to Mr Danny Pollard of Confectionary Distributors dated 9 July 1997 concerning the distributorship arrangement reads, in part, as follows:
"We take pleasure in confirming Confectionery Distributors as our exclusive distributors for Carjen products for Western Australia subject to the following conditions:
1.Confectionery Distributors will make the range available to all wholesalers in the state of W.A. at the same terms as they would buy from Millers Distributors:
a.Less than pallet qty. 15% w/sale discount.
b.Pallet qty. and above. 18.3% w/sale discount less 2% within terms discount.
c.FIS Metro delivery. Plus freight ex Perth country areas.
2.Confectionery Distributors to make their best efforts to penetrate all market opportunities throughout West Australia.
This agreement to be reviewed on a six monthly basis on performance."
In mid 1997, Jack Stein, a representative of All‑Fect, delivered a box of JJ Noodle snacks to GUYS school canteen supplies. In or about June 1997 Ms Harding reviewed the labelling of the packet of JJ Noodle snacks delivered by Mr Stein which contained a used by date of 30 June 1998. It was part of the defendants' case at trial that in June 1997 Ms Harding informed Mr Stein of problems with the labelling on the packet of JJ Noodle snacks that she had reviewed.
In or about August 1997, Leanne Terenciuk, canteen supervisor of Perth Modern High School sent GUYS a sample packet of JJ Noodle snacks. The labelling on the packet was the same as that reviewed by GUYS in about June 1997.
I will not set out the entirety of the words and information appearing on the packet. At this stage, it will be sufficient to say that the ingredients were described as follows: "Wheat flour, Vegetable Oil (Palm Oil), Fresh Chicken Essence, Hydrated Plant Protein, Salt, Spices and Soya Sauce". The product was said to be manufactured by Carjen and packed for All‑Fect Distributors Limited of 31‑33 Parramatta Road, Lidcombe, New South Wales. A Nutrition Information Panel appears on the packet which describes the servings per package as 2.5 and the serving size as "12g". The panel indicates that the "energy" per serving is "61(Cal)".
I pause to observe that it was common ground at the trial that the packet weighed 30 grams. This is consistent with the notion that the packet contains 2.5 servings of 12g, that is to say; 2.5 x 12g = 30g. Evidence was led at trial by the defendants to the effect that within Australia the energy quotient of food products should properly be expressed in kilojoules.

The Defendant's Publication

In September 1997 Ms Harding wrote a piece for Canteen News and this was published by Pinegate in the September 1997 edition of the newsletter. It was a matter of controversy at the trial as to the manner in which the newsletter was published.
Ms Harding said in evidence that the newsletter was sent to approximately 200 school canteens in Western Australia - mainly primary schools - which canteens were existing customers of GUYS. The newsletter was enclosed with accounts sent to recipients and on the defendants' case no other publication was intended or occurred. The purpose of drafting and sending the newsletter to the local school canteens was to alert school canteen supervisors and managers to the importance of proper and accurate assessment of canteen food products and the need for them to take account of the labelling of such products.
Ms Harding said in her answers to interrogatories that approximately 178 copies of the September 1997 edition of the newsletter were distributed to canteens. She said further that:
"In addition some copies were available for customers of the First Defendant who visited the First Defendant's premises on a walk‑in basis."
Ms Harding confirmed in her evidence at the trial that the newsletter could be picked up from the counter by customers visiting the defendant's premises. There was also evidence to this effect from a Ms Faranda.
The plaintiffs adduced evidence from a wholesale distributor that he chanced upon and read a copy of the newsletter in a school canteen. It is material to note that the format of the newsletter, which resembles a newspaper broadsheet, suggests that it was intended to reach a circle of readers beyond those individuals such as managers and bookkeepers who would usually attend to the payment of accounts. It would be immediately apparent to any reader in Western Australia that the makeup of the newsletter resembles the masthead of The West Australian newspaper.
On the plaintiffs' case, a factor in the defendants' decision to publish the article was Pinegate's role as a company marketing a competing product, namely, Mamee Noodles. The defendants denied this allegation. Ms Harding said in evidence that although she had met Mr Essey some years earlier at the Leura Conference. She did not know of his connection to the defendant company. In mid‑1997 she spoke to a Mr Stein of All‑Fect about the JJ Noodles product as a product that might be of interest to the defendant company for school canteens. She reviewed the product at that stage and drew Mr Stein's attention to certain discrepancies on the label and understood that he was going to have these matters sorted out. When Ms Terenciuk of the Perth Modern School canteen referred the JJ Noodles product to her sometime later she was annoyed to find that the labelling had not been corrected. This state of affairs prompted her to write a strongly worded review of the product for the GUYS newsletter.
I digress briefly to note that Mr Stein did not give evidence at the trial as he is no longer with the plaintiff company. Ms Harding was cross‑examined vigorously about this aspect of the matter. She was referred to an affidavit sworn by her in these proceedings some years ago in which she purported to give an account of the events leading up to publication of the newsletter complained of but made no mention of a conversation with Mr Stein. Her affidavit refers simply to her husband having spoken to a sales representative about certain defects. Against this background, let me now turn to the contents of the newsletter.
The piece written by Ms Harding, being the words complained of in these proceedings, appear under two headings in what is described as the "Statewide Edition" of Canteen News for September 1997. The first heading is "The Healthy State". The second heading is "Health Thieves!".
Under the heading "The Healthy State" the author of the article refers to the fact that the Health Department of Western Australia is conducting an assessment of the nutrition policies and practices of the food industry in Western Australia. It is said that these are the policies and the plans made for the benefit of the whole of the State. Reference is made to Ms Harding of GUYS having been requested to participate in the research in late August. The comment is then made that protective legislation is "of less than no help if Western Australian companies cheat us of that protection." It is said further "By design (greed), to take our money and run, or by ignorance, there can be no excuse for any Western Australian company to sell, market or supply products, especially into schools, that are outside of the legal requirements that are set by law to protect us!"
Beneath the heading "Health Thieves!" the author goes on to say that on the same day "that Marlene participated in the research for the W.A. Health Dpt, Marlene was requested by a canteen supervisor to comment on a "new product" that looked like it might be suitable for schools."
The author of the article says further that "disappointment reigned" when the sample of the new product arrived at GUYS Morley warehouse and turned out to be a product that had "already been rejected by GUYS".
The author of the article goes on to say that a long stretch of the imagination would be needed to consider the product to be suitable for schools. She says that "illegal marketing through claims made on the packaging, and what GUYS considers to be down right cheating on the nutritional panel put the product outside any consideration it might have got on its true merits. And GUYS questions the very legality of the product."
The author says further that the legal position concerning food packaging and labelling is covered under the Health Act. Amongst other comments, the author puts the rhetorical question: "Can there really be any businesses in WA that are so greedy for profit - or so ignorant of the law relating to their business that they deliberately put people in danger by compromising the dietary information on foodstuffs they sell?" The author immediately answers her rhetorical question in the affirmative and goes on to say that this type of cheating has become such a common occurrence that unless something is done there is a danger it might be accepted as normal business practice. She then says that GUYS has chosen to use the offending packaging "to illustrate just how some manufacturers, importers and distributors attempt to cheat and profiteer with their illegal products. Especially at the expense of our children."
The author of the article reminds readers that the Western Australian Health Act has a very specific formula for the nutrition information on food packaging so that balanced and nutritional menu choices "in your canteen" can be made. She says that there is no legal requirement for manufacturers to put nutritional informative charts on their products but if they chose to do so then they must follow strict legal guidelines in showing just what the energy intake is from the product. The article refers to some of the requirements in more detail.
Towards the end of the article this passage appears:
"The cheating and illegally packaged J.J Noodles are imitations of the very acceptable and legally manufactured Mamee Noodles that have been around successfully for a very long time. Mamee Noodles are made, imported and sold by only reputable companies, who certainly would reject the opportunity of making a few extra bucks by taking on questionable products such as J.J Noodles."
The author of the article mentions that Mamee Noodles are made by a family company in Malaysia from Australian wheat. Mamee Noodles are so confident about their product that in the short term, GUYS will be offering samples to every child in WA primary schools on a roll out programme, with the permission of the school principal. GUYS is absolutely confident that Mamee Noodles has for many, many years formed part of a good wholesome balanced diet for students (and adults) "without resorting to cheating and illegal activity."

The author of the article goes on to say that GUYS is "pretty certain" that there will be a product recall on JJ Noodles in the relatively short term in order to protect the integrity of Western Australian health regulations. The author says further that any company that is actively selling the product in Western Australia should be utterly ashamed of their ignorance of food regulations and wonders aloud whether Canteen News should be canvassing for all food suppliers to be licensed in order to provide protection from "charlatans and cheats" who "put their own 'two bobs worth' before of our rights and our health". There is then a suggestion that the maker and distributor of the packet in question has deliberately understated the energy values of the product.
The author concludes by saying:
"Whether there is MSG, preservatives or artificial colour in the product, that contains Soya Sauce and Spices, is something that we would like to see on an official report from the Australian Government Analytical Laboratories, in view of the already compromised labeling? Perhaps one of the distributors in this State, or the importer would like to provide one for publication!"
It was common ground at the hearing that the newsletter included another page on which appeared a photographic image of the JJ Noodle packet bearing the heading "Under the Microscope". Various parts of the information on the package are marked up. The word "cheat" appears in bold print capital letters on three occasions with the following caption: "This pack was designed on a 30g single serve!"; "Should also show 256kj/2137kj"; "Calories must have kj value shown (4.19 times bigger)".
There is no explicit reference to the photographic page in the main text but it was said to form part of the words complained of. However, it is material to note an oblique reference to the marked up photographic image of the JJ Noodles packet in that portion of the text where it is said:
"To that end, GUYS has chosen to use the offending packaging to illustrate just how some manufacturers, importers and distributors attempt to cheat and profiteer with their illegal products."
I note also that although there was no explicit reference to Mr Fred Essey, or to his company All‑Fect, in the main body of the text, there are at least three references to the product JJ Noodles. The photographic page reproduces that part of the printed packet in which the product is said to be packed for All‑Fect Distributors Limited of 31‑33 Parramatta Road, Lidcombe, New South Wales.

Answers to Interrogatories

The first defendant in her answers to interrogatories acknowledged that she was the author of the article. She provided the original of the matter complained of to her assistant, Ms Susanne Rabbitt. Most of the words of the matter complained of were probably written on or about the last Thursday of September 1997. The second defendant was responsible for distributing the newsletter to the various school canteens.
The first defendant went on to say further in her answers that she did not know that Mr Essey was connected at all or in any way with the second defendant and did not intend the newsletter to refer to him. She conceded that before publishing the matter complained of she did not cause any tests to be carried out on the product JJ Noodles. She used "her own knowledge and experience to analyse the information on the packaging". She knew that including soya sauce in the list of ingredients was incorrect because soya sauce is not a generic ingredient and if the product did contain soya sauce, then it would have contained MSG, colouring and preservatives.
The answers to interrogatories addressed some additional questions concerning the first defendant's state of knowledge at the time she wrote the article and the source or information upon which various assertions in the articles were based.
The first defendant knew that the list of ingredients on the packaging of JJ Noodles failed to state that the product contained mineral salts because this appeared from the list of ingredients. She knew that the list incorrectly stated that the product contained fresh chicken essence because chicken essence cannot be "fresh" and further that "fresh chicken" essence cannot be an ingredient of dehydrated noodles. She knew that the quantity of protein stated in the list was incorrect because, in her opinion, the quantity of protein in the nutritional panel had been misstated due to the representation that each package of JJ Noodles contained 2.5 serves, where it was actually one serve.
Further, she knew from the application of her own knowledge and experience that one or more of the protein, fat, sugar or total kilojoule values were incorrect. She repeated this view in respect of the quantity of fat and sugars in the product, and in respect of the quantity of sodium also save that her belief concerning the incorrect quantity of sodium was supported by the inclusion of soya sauce in the list of ingredients. It was apparent from the list that the quantity of potassium had not been stated on the packaging.
It appears from the answers to interrogatories that the information or source which gave rise to the first defendant's knowledge was said to be "On the basis of the First Defendant's judgment and 30 years in the hospitality and catering industry, and reading the packaging". She contended that she had engaged in communications with the plaintiffs with regard to the proposed subject matter of the article prior to its publication in that she, as a director of the second defendant, discussed with Mr Essey the importance of Australian labelling requirements in relation to a new product produced by Nestle at the National Confectionary Wholesalers Association Conference on or about 4 to 6 November 1994 in the Blue Mountains, New South Wales. It is significant that no mention was made of her supposed conversation with Mr Stein in mid‑1997.
In response to the question of what action was taken by her upon learning of the alleged breaches of the Health (Adoption of Food Standards Code) Regulation 1992, being a matter referred to in the article, Ms Harding said in her answers to interrogatories that she reported the alleged breaches to the Western Australian Health Department on 1 December 1997 and to the New South Wales Western Sector Public Health Unit on 5 December 1997.

Correspondence

Mr Essey was informed by one of his distributors that the September 1997 edition of Canteen News had made adverse criticisms of his company. Passages from the article were read to him by telephone. He said in evidence that he felt "furious." He referred the matter to his solicitors, the law firm Hassett Dixon.
The publication led to various exchanges between the parties. On 3 October 1997, the solicitors for the plaintiffs, Hassett Dixon, sent a facsimile to Ms Harding requesting responses in relation to a number of claims made by her in the publication. The letter reads in part as follows:
"We act for All Fect Distributors Ltd. sole distributors of J.J. Noodles.
We refer to your September 1997 publication of the West Australian School Canteen News and the highly defamatory imputations contained therein.
We are instructed to commence defamation proceedings, however, before so doing, we wish to know:
(a)what laws do you allege have been contravened by representations in the packaging of "the cheating and illegally packaged J.J. Noodles"?
(b)how is the packaging or composition of J.J. Noodles "outside the legal requirements that are set by law to protect us"?
(c)has their been a product recall on J.J. Noodles?
(d)on what basis do you say J.J. Noodles were "designed as a 30g single serve"?
(e)under what requirement "must" calories have a kj value on packaging?
We do not believe you can show any contravention of the provisions of a statute by our client. If this is so, and since your article plainly alleges illegality, it would appear that you have a case to answer.
Kindly advise as to what you are prepared to answer of the above and whether you are prepared to publish a retraction. In the event that you do not reply to this letter, it will be produced in Court in the question of costs."
On 7 October 1997 Ms Harding, as the author of the article, sent a facsimile to Hassett Dixon. She provided the law firm with the responses that they had requested. The relevant letter reads in part as follows:
"Following are answers to your questions:
(a)Health Act (1911) as amended.
(b)as set out in Health Act (1911) as amended.
(c)Guys was "pretty certain that there would be a product recall in order to protect the integrity of the WA Health Regulations" as soon as any responsible local distributor brought the breaches to the attention of the National distributor of JJ Noodles.
(d)(i) 30g pack sizes of snack food were specifically designed by major manufacturers (the standard set) "to enable youngsters to enjoy snack food without over indulging.
(ii)The single pellets of the product are displayed cartoon fashion as "ready to eat". There are not 2 1/2 pellets to a packet.
(e)Health Act (1911) as amended.
I would suggest that your clients read the whole of the article, in context and act in accordance with the conscience.
Perhaps if they need litigation as a means of settling their business - a preferred option would have been to pre‑consult an expert, or to become experts themselves when dealing with the legal requirements of supplying foodstuffs particularly when targeting young people.
Under the circumstances that the truth is my defence in all of your accusations of defamation, please advise me of your clients intentions.
The fact that I have been required personally to return to Perth, out of time, to answer these questions in order to mitigate costs will be introduced in Court in the question of costs."

The Plaintiffs' Publication

It was against this background that on or about 15 October 1997 the plaintiffs sent a letter to canteen supervisors and buyers for all schools in Western Australia. This is borne out by a letter dated 21 October 1997 in which Mr Stein, on behalf of the second plaintiff, wrote to Confectionary Distributors in Western Australia about the plaintiff's publication and described it as "the letter which Fred has sent to every school in WA." He urged Confectionary Distributors to arrange for their representatives and wholesalers to take the letter and a sample of the product to schools. He said:
"The catch crys must be 'Judge for yourself' and 'Are we going to allow this un‑Australian conduct?'"
It appears from the evidence given by Mr Essey at trial that the plaintiffs did not make any inquiry of the defendants as to which school canteens the defendant's publication had been sent to. In his answers to interrogatories the first plaintiff had this to say about distribution of his circular letter:
"The first plaintiff cannot specify each person to whom the circular was published other than to say it was the first plaintiff's instruction to his staff to send the circular 'to the canteen buyer of all major primary and high schools in Western Australia'. All circular's were mailed on or about 15 October 1997. The basis of the first plaintiff's instruction to his staff was that he believed major primary and high schools in Western Australia were the recipients of the September 1997 edition of the West Australian School Canteen News published by the defendants and the first plaintiff sought to address those same recipients."
The plaintiffs' circular letter is on the printed letterhead of All‑Fect Distributors Ltd with the address of the company being given as 31‑33 Parramatta Road, Lidcombe, New South Wales. On this occasion the printed letterhead contains no reference to Millers Distributing Co but the letter is signed by Mr Fred Essey, Managing Director "All‑Fect Ltd t/a Millers Distributing Co." It is an open letter directed simply "To the canteen supervisor/buyer". Mr Essey accepted in his answers to interrogatories that he signed the letter and caused it to be distributed.
The letter commences by drawing the reader's attention to the September issue of the West Australian School Canteen News. It goes on to say that:
"In this issue we have been labeled as cheats, charlatans and profiteers regarding J.J Noodle Snack. We give you this opportunity to judge for yourselves, and allow us to put forward certain facts".
The author of the letter says further that the Australian market is a free market that thrives on competition. The reader is told that up to the end of 1996 the plaintiff company sold Mamee brand noodles to retail at 35 cents per packet but by 1997, after it ceased handling the Mamee range, the retail price dramatically increased to a price of 50 cents per packet. The author of the letter suggests that this questions the integrity and intentions of the writer of the article complained of and asks rhetorically: "Who is profiteering?".
The author of the plaintiffs' letter goes on to say that other claims made in the article about illegal packaging, possible recall of product, danger to health are all examples of deliberate, misleading and false information. He asserts that "our product" has been assessed by AQIS (Australian Quarantine and Inspection Service) and has complied with all Australian food standards. He says further that currently there is no legal requirement to print on packaging a nutritional information panel. The mere fact that energy values have been stated in calories and not kilojoules is not a measure of cheating. He observes that the Mamee brand does not bother to supply the consumer with any nutritional information at all. He denies that the reference to a serving size of 12gm on the JJ product is a form of cheat packaging because the product is sold to be consumed by small children to adults alike and servings will vary from child to adult.
The penultimate paragraph of the plaintiffs' letter reads as follows:
"The company producing this article in the West Australian School Canteen News (September issue) has clearly demonstrated by supplying untrue information and facts that their intentions are questionable. Why are they trying to mislead you? Deliberate misuse and practice to fool people is a method of business that does not belong and can not be tolerated in Australia. Existing customers of this company should be aware of improper conduct and be wary of their true integrity. The purpose and aim of this article is not in good faith and a very poor attempt to prevent fair and honest trade."
For ease of reference I will henceforth call the article published by the defendants "the defendants' publication". I will refer to the circular letter dated 15 October 1997 published by the plaintiffs as "the plaintiffs' publication".
Mr Essey acknowledged under cross examination that prior to sending out the plaintiffs' publication he did not make any attempt to contact the defendants with a view to finding out the price at which they were selling Mamee Noodles. His information from his business colleagues in Western Australia was that Mamee Noodles were being sold at 50 cents and he was therefore of the view that the comments made in his circular letter were appropriate. He confirmed also that he did not make any attempt to find out from the defendants the names of the school canteens or other parties to whom the September 1997 issue of the Canteen News had been dispatched. He said that he was too angry and upset about what had happened to contemplate making such an approach.
Before leaving this part of the narrative, I note in passing that certain of the plaintiffs' interrogatories were directed to the effect or supposed effect of the plaintiff's publication. Ms Harding said in her answers to the interrogatories that she had been spoken to in a way that suggested the plaintiffs' publication had been read with the result that the reader thought less of Ms Harding as a consequence, in the sense of undermining her standing and reputation. The relevant particulars were that on or about 15 October 1997 Leanne Terenciuk (from the Perth Modern School canteen) spoke to her about the matter and forwarded the plaintiffs' publication to Ms Harding. The latter then moved away from GUYS business to distance herself from it and gave up her consultancy work. Further, Leanne Terenciuk communicated to Ms Harding that the circular had caused a fuss with the Parents and Friends Association of the Perth Modern School.

Subsequent Events

Ms Harding said in evidence that on or about 15 October 1997 she received a copy of the plaintiffs' publication from Ms Terenciuk. On 21 October 1997 she sent a facsimile to the plaintiffs' solicitors Hassett Dixon. The thrust of this communication was that despite providing Hassett Dixon with the responses that they had requested, the plaintiffs had nevertheless chosen to circulate the plaintiffs' publication to school canteen supervisors and buyers. The defendants' facsimile further requested responses in relation to claims made by the plaintiffs in the plaintiffs' publication.
There were further exchanges between the parties in which the prospect of legal proceedings was mentioned. On 20 November 1997 the plaintiffs issued a writ of summons seeking relief in respect of the defendants' publication.
In the months of December 1997 and January 1998 the defendants directed certain enquiries to State Health Departments concerning the JJ Noodles product. These enquiries led eventually to the formulation of certain expert opinions which I will return to later. However, for the sake of an orderly narrative, it is material to note that as a consequence of these enquiries a Mr Biffin, a senior food inspector attached to the Western Sector Public Health Unit of New South Wales, looked into the matter and apparently had a discussion with Mr Essey in the course of preparing his report.
Mr Essey was unable to recall such a discussion with Mr Biffin, but under cross examination was prepared to accept that he may have been interviewed. Mr Biffin's letter dated 29 January 1998 to the defendants' solicitors suggested that as a result of Mr Biffin's discussion with Mr Essey, the word "fresh" in relation to chicken essence would be removed from the JJ Noodles label.
The Biffin letter to the defendants' solicitors (the "Biffin letter") reads in part as follows:
"Investigation of your clients complaint of breaches of the labelling provisions under the Food Standards Code has involved examination of the current warehouse stock of J.J. Noodles, interview with the principal of All‑Fect Distributors Pty Ltd sole distributor of the product and enquiries with the overseas manufacturer to determine the products specifications.
As regards your clients concerns I advise as follows:
1.The statement 'fresh chicken essence' in the ingredient list will be amended omitting the word 'fresh' from future imports.
Enquiries revealed that soya sauce was not an ingredient in the product and the statement in the ingredient list was an error. The words 'soya sauce' do not appear on the current labels.
2.Where the name and address of the manufacturer are set out on the label and the address contains the name of the country in which the food was produced, the name and address shall be taken to satisfy the country of origin statement required under Food Standards Code A1 (4)(a). In any case the statement 'Product of Malaysia' appears on the current label.
3.The nutrition information panel on current labels is not in compliance with A1 of the Food Standards Code as the energy value is not expressed in kilojoules. Clause (c)(i)(D) requires the average energy values to be expressed in kilojoules or both in kilojoules and in Calories.
The serving size information set out in the nutrition information panel satisfies the requirements under current legislation provided, of course, that the quantities of nutrients claimed are correct. No factors or guidelines are laid down for determining the serving size statement and is at the discretion of the manufacturer/seller of the product.
5.Enquiries to date reveal that statements 'no added MSG', 'no preservatives' and 'no artificial colours' on the current label are correct and not misleading or deceptive.
It should also be noted that the statement 'no added MSG' is common usage on food labels to indicate monosodium glutamate has not been added to the product during manufacture as opposed to natural levels of MSG with may exist in the components of the product.
As a result of your clients complaint the importer has been instructed to ensure the labelling on future imports of J.J. Noodle Snacks complies with the requirements under the Food Standards Code.
Samples of the product will also be submitted for chemical analysis in due course to confirm the statements made on the label are not false or misleading."

In summary, then, the Biffin letter identified the following errors in the JJ Noodles packaging: soya sauce was not an ingredient, the energy value was expressed in calories rather than in kilojoules and the words "chicken essence" should not be preceded by the word "fresh". The letter notes that the error concerning soya sauce had been corrected and in future the word "fresh" would not be used. Mr Biffin's tone does not suggest that he harboured any acute concerns about the packaging or possible threats to the health of children or consumers generally. His letter suggests that, subject to further tests, the shortcomings in the packaging have been attended to in a satisfactory manner.

The Statement of Claim

The plaintiffs by their re‑amended statement of claim say in par 5 that the words comprising the defendants' publication in their natural and ordinary meaning conveyed certain imputations each of which are defamatory of the first plaintiff. Particulars of identification are provided to the effect that the first plaintiff is, and was at all material times, the managing director of the second plaintiff; the second plaintiff manufactured and marketed the product JJ Noodles. It is said that these facts were known to the readers of the Western Australian Canteen News.
The imputations complained of in par 5 of the claim are as follows:
(a)Mr Essey caused All‑Fect to engage in serious breaches of the laws of Western Australia ("the plaintiffs' first imputation")
(b)Mr Essey was so greedy for profits that he caused the second plaintiff to deliberately put the health of consumers of its product at risk ("the plaintiffs' second imputation)
(c)Mr Essey caused All‑Fect to endanger the health of children who used its products ("the plaintiffs' third imputation)
(d)Mr Essey caused All‑Fect to cheat consumers by the deceptive marketing of its products ("the plaintiffs' fourth imputation").
In par 6 of the statement of claim imputations in much the same form are said to be defamatory of All‑Fect, with similar particulars of identification being provided as to the plaintiff company.
The plaintiffs plead in par 7 that by reason of the publication of the matter complained of, each of the plaintiffs has been injured in their reputation, standing profession, occupation and credit and has been and will be held in public, odium, ridicule, scandal and contempt and have suffered and will continue to suffer damage. The plaintiffs claim damages and exemplary damages.
I will return to the particulars pleaded in support of the claim for exemplary damages in due course. In essence, however, it is alleged that the defendants' published the words complained of knowing that they were false or with a reckless disregard to their truth and falsity. Further, they were marketing a product in competition with the plaintiff company and did not attempt to verify the information purportedly provided in the Canteen News.

The Statement of Defence

The defendants by their re‑amended defence and counterclaim deny that the plaintiffs are entitled to the relief claimed or any relief. They deny that the words are defamatory of the plaintiffs as alleged and say further that if it be held that the defendants' publication was defamatory the publication is true in substance and in fact in so far as it contains allegations of fact. Particulars of the facts and circumstances are set out at some length in par 6 of the statement of defence concerning the defence of justification.
I will return to the particulars concerning the justification plea later. However, in essence, it is pleaded by the defendants that All‑Fect engaged in serious breaches of the laws of Western Australia. As to the allegation in par 5(b) of the statement of claim concerning the plaintiffs' second imputation that All‑Fect was so greedy for profits that it put the health of consumers of its product at risk the defendants refer to certain events which are said to have put the plaintiffs on notice that the packaging of the plaintiffs' product required correction. In that regard, reference is made to the plaintiffs' attendance at the Leura Conference in 1994 and to approaches made to representatives of the plaintiff company by the defendants in mid 1997.
The defendants say further that if the first and second imputations are held to be matters of opinion and comment then the defendants rely upon the matters pleaded in support of the defendants' fair comment defence.
The defendants say in par 6A of the statement of defence that the defendants were, in any event, entitled to publish the allegation set out in par 5(a) of the statement of claim that the first plaintiff caused the second plaintiff to engage in serious breaches of the laws of Western Australia as fair comment on matters of public interest. Particulars of facts relied upon for comment are then set out and include a plea that All‑Fect engaged in breaches of the laws of Western Australia. A defence of fair comment with accompanying particulars is set out also in regard to the other imputations.
The defendants say in par 9 of the statement of defence that the defendants' publication was published on an occasion of qualified privilege. Particulars are provided in support of that plea to the effect that the defendants published Canteen News as a newsletter in Western Australia by sending it by mail to a circle of readers consisting of persons or corporations that operate in or have an interest in the operation of school canteens in this State and are customers of Pinegate Holdings. It is said that Ms Harding has specialised knowledge of health and regulatory issues concerning products marketed for school canteens and the defendants' publication was reasonable in the circumstances as to the mode, manner and extent of publication. It is said further that the defendants and each of them had an interest in the matters complained of by the plaintiffs, and the readers of Canteen News had a reciprocal and corresponding interest in receiving information on such matters.
In par 10, par 10A, par 11, par 12 and par 13 of the statement of defence the defendants set up pleas of justification, fair comment and qualified privilege in respect of the claims for relief advanced by All‑Fect. I will return to the particulars in support of that aspect of the pleading in due course.
The defendants say further that neither plaintiff has any relevant standing or reputation in Western Australia. They deny that any apology was appropriate in the circumstances of the case and they deny that the plaintiffs are entitled to exemplary damages or any damages at all.

The Defendants' Counterclaim

At par 16 of the amended defence and counterclaim the defendants advance a counterclaim against the plaintiffs in respect of the plaintiffs' publication. The defendants say in par 20 that the words comprising the plaintiffs' publication in their natural and ordinary meaning conveyed certain imputations each of which are said to be defamatory of Ms Harding.
The imputations complained of are as follows:
"20.1The First Defendant caused misleading information to be published in the September 1997 issue of Canteen News;
20.2The First Defendant deliberately caused misleading information to be published in the said issue of Canteen News;
20.3The First Defendant caused false information to be published in the said issue of Canteen News;
20.4The First Defendant deliberately caused false information to be published in the said issue of Canteen News;
20.5The First Defendant does not have the qualifications to express an opinion on matters such as illegal packaging and health dangers posed by such packaging in relation to products such as JJ Noodles;
20.6The First Defendant showed blatant ignorance in expressing an opinion on matters such as illegal packaging and health dangers posed by such packaging in the said issue of Canteen News;
20.7The First Defendant in causing to be published in the said issue of Canteen News comments on JJ Noodles had a purpose and aim that was not in good faith;
20.8The First Defendant in causing to be published in the said issue of Canteen News comments on JJ Noodles attempted to prevent fair and honest trade;
20.9The First Defendant engaged in the practice of fooling people as a method of doing business."
In par 21 of the statement of defence and counterclaim one finds imputations to the same effect pleaded in respect of the second defendant, Pinegate.
The defendants plead in par 22 that by reason of the matters pleaded, the first and second defendants and each of them have been injured in their reputation, standing, profession, occupation and credit and have been held and will be held up to public ridicule, contempt and hatred and have suffered and will continue to suffer damage. In addition to the claim for damages they claim exemplary damages by reasons of matters referred to in the pleadings. I will return to these particulars in due course. However, in essence, it is said that the plaintiffs published the matter complained of knowing that the imputations were false or with a reckless disregard as to their truth or falsity.

The Plaintiffs' Reply

The plaintiffs by way of a reply join issue with the defendants as to the defences of justification, fair comment and privilege. Importantly, they seek to negate the two latter defences by alleging that the defendants' publication was not made in good faith and was actuated by malice and/or an improper motive, that is to say, a desire to disparage the plaintiffs' product JJ Noodles as a product that was competing with the defendants' product Mamee Noodles.
As to the defendants' counterclaim, the plaintiffs deny that the imputations complained of can be drawn from the words appearing in the plaintiffs' publication or that such words are defamatory of the defendants. Further, they seek to avoid liability by setting up defences of justification and qualified privilege.

The Defendants' Reply

The plaintiffs' amended defence to counterclaim is the subject of a reply filed on behalf of the defendants. They admit that the second defendant, Pinegate, marketed Mamee Noodles but deny that this inspired the defendants' publication. They say further that the plaintiffs' publication is not protected by privilege because it was made for an improper purpose, namely, to retaliate and to disparage products being marketed by the defendants.
I must now proceed to deal with the various issues raised by the pleadings. It will be useful to begin by looking at some legal principles and related matters bearing upon the issue of identification.

Identification

In order to succeed in a claim for damages for defamation, the plaintiff must establish that the matter complained of was published, that it related to him, and was defamatory. It is not essential that he should be specifically named, provided there is some form of description which in the circumstances is such that a person reading it would reasonably believe that it referred to the plaintiff: David Syme & Co v Canavan (1918) 25 CLR 234 at 238.
It is not necessary for everyone to know to whom the article refers; but the plaintiff must prove that ordinary readers of the document who knew him would have understood that it referred to him. It does not have to be established that the defendant intended to refer to the plaintiffs: Jones v E Hulton & Co [1909] 2 KB 444 at 454 ‑ 455.
I note from Tobin & Sexton's: "Australian Defamation Law and Practice" at 6005 that where the plaintiff is named in the matter complained of there is no difficulty with identification. It is not necessary to prove that the recipient of the publication knew the plaintiff.
In this case, I note also that the annotated label formed part of the defendants' publication, and bore the second plaintiff's name. The relevant words on the photographic image of the label are as follows "Packed for All‑Fect Distributors Ltd" with the address of the company being given as "31‑33 Parramatta Rd Lidcombe NSW." In my view, the ordinary reasonable reader would conclude that the product was being distributed within Australia, and thus within Western Australia, by the second plaintiff, All‑Fect, and that the defendants' attack upon "Health Thieves" and "businesses in WA that are so greedy for profits" included All‑Fect.
A different and more difficult question in the present case is whether the ordinary reasonable reader of the article would infer that the first plaintiff was aware of the relevant conduct of the second plaintiff and caused the second plaintiff to so act.
It will be useful to say something further at this point as to which persons should properly be regarded as the persons to whom the publication was made or as the readers of the words complained of.
The defendants contended that the readers of the article should be confined to the canteen manageresses to whom the publication was sent by mail and possibly to some of their assistants. However, I consider that the readers of the article or the persons to whom the publication was made included those persons by whom the publication would ordinarily be read. Such readers include persons entering into school canteens and persons entering into the defendants' premises where the newsletter was on the front counter.
Evidence bearing upon this issue included the following matters.
Mr Essey gave evidence at the trial that he was the managing director of the plaintiff company and, as the biggest shareholder, effectively the person in control of the company. He referred to the plaintiffs' use of Millers Distributing Co as a business name. He described his business connections in Western Australia and referred to various distributors in Western Australia such as CDs, Centra, Greenleaf, Perth Candy and some others. He spoke of being in regular contact with the individuals attached to these various distributors and of speaking to them often by phone. On his account, one distributor, Mr Joyce acquainted him with the contents of the newsletter complained of. Mr Joyce read the article to him and in due course faxed a copy of it to him. Mr Essey described his anger upon hearing of what was in the newsletter.
It emerged from the evidence of Mr Essey that Mr Joyce is a confectionary wholesaler in Perth. A Mr Ray Stace at that time was a senior figure with Confectionary Distributors or CDs, and Mr Danny Pollard was also associated with that company. Mr Ray Stace rang to cancel the CD's order for JJ Noodles soon after publication of the defendants' newsletter.
Mr Stace of Confectionary Distributors gave evidence that he knew of Mr Fred Essey as a principal in All‑Fect and Millers Trading Co. The copy of the newsletter that he saw came to him not from a sales representative but from a sub‑wholesaler. As far as he was concerned, as at 1997, Millers was the name for Mr Essey's company and he concluded that the newsletter was directed to the plaintiff company.
Mr Fraser gave evidence at the trial. He is a principal of Perth Candy Co which supplies products to schools. He gave evidence that in one canteen he saw the newsletter complained of and associated the article concerning the JJ Noodles product with All‑Fect because he knew that Mr Essey's company was the distributor of the product. His evidence was to the effect that he understood that Mr Essey was the owner of the plaintiff company and what the plaintiff company did could be attributed to the actions of Mr Essey. He held Mr Essey in high esteem and had heard nothing derogatory of him. When Mr Fraser read the article he thought that it was degrading to Mr Essey and his business. The article stopped him carrying the JJ Noodles product.
Mr Fraser affirmed under cross‑examination that the newsletter was not sent to him by GUYS. He saw the newsletter in one instance at a school canteen. The newsletter was lying on a bench inside the school canteen. He was accustomed to going into school canteens in the course of doing business with the manageresses or ladies working in the canteens. By the look of it, he didn't understand the newsletter to be a private document. He read it by picking it up, as one reads a magazine while waiting for someone to arrive. As far as he was concerned the Essey organisation was known as Millers as at 1997.
A Mr Peter Verbunt gave evidence. He is a principal in Greenleaf Distributors. He said that as far as he was concerned Mr Fred Essey was the founder and person in charge of the plaintiff company. He, (Verbunt), attributed the actions of the plaintiff company to Mr Essey. Mr Richard Barton of Blackpool Rock Candies gave evidence to similar effect.
There was a considerable degree of controversy at the trial as to whether the newsletter was visible in school canteens and could be seen by visitors to the premises. The evidence from Ms Terenciuk and Ms Bowler of the Perth Modern School canteen had a bearing upon this aspect of the matter. They were cross‑examined at some length about such matters and it did seem from the evidence of Ms Bowler that there was a notice board in the canteen at the Perth Modern School upon which the GUYS newsletter was sometimes displayed. She said in her witness statement:
"The newsletter was sent to Leanne Terenciuk. Leanne used to pin it up on the notice board in the canteen and leave it there for a few weeks for people to read."
She conceded under cross‑examination that the notice board was about 8 to 10 paces from the waiting area by Leanne's desk to which sales representatives would come on business.
This brings me to an issue concerning republication that was raised by the defendants. I was urged to find that the readers of the defendants' newsletter should be characterised narrowly as those persons to whom the newsletter was sent with periodical accounts. The defendants did not authorise republication to third parties and should therefore not be held responsible for any such republication.
I am not prepared to make such a finding. In my view, the format of the newsletter made it inevitable that the document would be read by persons other than the direct recipient. The newsletter served a promotional purpose and was intended to be read generally by persons coming to school canteens or by those who came to the defendants' premises. I find that it was in fact read by persons other than those to whom the defendants' accounts were mailed.
Accordingly, I consider that the readership of the newsletter extends beyond those persons who received the newsletter with their accounts and included visitors to school canteens such as Mr Fraser and other sales representatives. To the extent that such a finding is necessary, I find that the defendants authorised republication to such persons.
It follows from this discussion that, in my view, readers of the defendants' publication included visitors to the defendants' premises and to school canteens. Some readers such as those sales representatives who were involved in the distribution of the plaintiffs' products were aware that All‑Fect traded also as Millers Distributing Co and that the first plaintiff, Fred Essey, was the principal figure in those organisations. The defendants adduced evidence to this effect from several witnesses including Mr Stace and Mr Fraser. I find that Mr Fraser picked up and read the defendants' publication in a school canteen in the manner described in his evidence, and concluded that the distributor of JJ Noodles under attack was Mr Essey.
There was some controversy at the trial as to whether Mr Fred Essey could properly be characterised as the managing director of the second plaintiff. However, I am satisfied that he was essentially the controlling figure in the company and that the witnesses I have just mentioned were of the view that he was the subject of the attack. I am therefore satisfied that ordinary reasonable readers who knew the first plaintiff understood that the defendants' publication referred to the first plaintiff in addition to the second plaintiff.

The Nature of the Defendants' Publication

An imputation will be defamatory if it tends to lower the plaintiff in the estimation of right thinking members of the community: Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 at 447.
In deciding whether or not the words are capable of conveying an allegedly defamatory meaning, the Court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. The Court will assume that the ordinary reader is a person of fair average intelligence who does not live in an ivory tower, who is not unduly suspicious or naïve or avid for scandal and is not inhibited by strict rules of construction: Slatyer v Daily Telegraph Newspaper Co Ltd (1908) 6 CLR 1.
What the ordinary man, not avid for scandal, would read in the words must be a matter of impression. The impression will inevitably include a certain amount of loose thinking: Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632. The test of whether the words "complained of" are capable of conveying an allegedly defamatory meaning is whether, under the circumstances in which the words were published, people to whom the publication was made would be likely to understand them in a defamatory sense: Jones v Skelton [1964] NSWR 485.
I have noted in my review of the pleadings that the defendants set up a plea in answer to the plaintiffs' claim that the words were not defamatory of the plaintiffs as alleged. This gives rise to an initial question as to whether the pleaded imputations relied upon by the plaintiffs can be said to arise from the words complained of, bearing in mind that the article in question was lengthy and contained a host of criticisms. I have already found that each of the plaintiffs is identifiable as a subject of the defendants' attack.
I consider that the pleaded imputations can be said to arise from the words complained of. It is clear from the article that the main thrust of the defendants' critique is that the distributor of the JJ Noodles product is in breach of various laws, is greedy for profits, and is seeking to cheat consumers by the deceptive marketing of its products. The various observations are gathered together under the heading "Health Thieves!". I will not repeat the various constituents of the article, but, to my mind, the pleaded imputations can be regarded as a fair distillation of the words complained of in their natural and ordinary meaning, that is to say, that the distributor engaged in serious breaches of the laws of Western Australia ("the first imputation"); that he was so greedy for profits that he deliberately put the health of consumers at risk ("the second imputation"); that he endangered the health of children who used his products ("the third imputation"); that he had cheated consumers by the deceptive marketing of his products (the fourth imputation).
An important consequence of my finding that the pleaded imputations are to be found in the words complained of is that my attention will henceforth be focused upon the imputations rather than upon the loose conglomeration of words comprising the article complained of. The imputations clearly amount to more than random criticisms. Each imputation reflects a grave assertion. This is of particular importance in regard to the defence of justification, for it is the imputation contained in the words that has to be justified, not the literal truth of the words, nor some other, similar charge not contained in the words: Gatley on Libel and Slander (9th ed) par 11.6. In the present case, for example, where the first imputation speaks of "serious" breaches of the laws, it will not be sufficient for the defendants to establish that the plaintiffs were responsible for some comparatively minor infringements.
I consider also that the imputations complained of are capable of conveying a meaning defamatory of each plaintiff in that people to whom the publication was made would be likely to understand the imputations in a defamatory sense. The imputations reflect grave assertions that would inevitably tend to lower the subject of the attack in the estimation of right thinking members of the community.
It follows from earlier discussion that as both plaintiffs were identified by the words complained of, they were defamed by such words. They are therefore entitled to relief by way of damages unless the defendants are excused from liability by any of the matters raised by way of defence, namely, justification, fair comment or qualified privilege.

Justification re Defendants' Publication

The defendants pleaded in par 6 of the statement of defence and counterclaim that if it were to be held that the defendants' publication was defamatory of the first plaintiff (which was denied) then the publication was true in substance and in fact in so far as it contains allegations of fact. The defendants purported to rely on the circumstances that the first plaintiff, Mr Essey, at all material times controlled the activities of the second plaintiff, All‑Fect, and thus caused the company to engage in the activities the subject of the relevant imputation. A similar line of defence is reflected in par 10 concerning All‑Fect. In each case particulars are provided of the facts and matters relied on in support of the plea of justification.
Before turning to the various imputations and the question in each case as to whether the imputation complained of is true in substance and in fact it will be useful to look at the principles bearing upon this issue.
It is a defence to an action in defamation to establish that the imputation in respect of which the defendant is sued is true. The essence of such a plea is that if the words complained of bear the defamatory meaning contended for by the plaintiff then those words, so understood, are true. It is important to understand that the defendant must prove that the defamatory imputation is true. It is not enough for him to prove that he believed that the imputation was true, even though it was published as belief only: Gatley on Libel and Slander (9th ed) par 11.4. As much must be justified as meets the sting of the charge, and if anything be contained in the charge, which does not add to the sting of it, that need not be justified: Edwards v Bell [1824] Bing 403 at 409.
If the matter complained of contains defamatory statements both of fact and of opinion, the defendant, under a plea of justification, must prove that the statements of fact are true and that the statements of opinion are correct.
I noted earlier that it is the imputation contained in the words which has to be justified, not the literal truth of the words, nor some other, similar charge not contained in the words. This has two consequences. First, the defendant may succeed in a plea of justification even though what he has said may be inaccurate in a number of respects. Secondly, he may not, under a plea of justification prove the truth of other facts damaging to the plaintiff's reputation, even if they would be no less damaging to that reputation. The issue of what may be advanced under a plea of justification is therefore closely linked to the meaning or meanings which the defamatory words are reasonably capable of bearing.
Broadly stated, the plaintiffs' position at trial concerning this issue was that irrespective of whether some minor shortcomings in the labelling could be demonstrated, it was not open to the defendants to rely upon a plea of justification because the imputations conveyed by the words complained of were disproportionate to the matters under notice. It was not open to the defendants to condemn the plaintiffs as cheats and profiteers or otherwise to make extremely disparaging comments of the kind appearing in the newsletter upon the basis of a few comparatively harmless inadequacies in the labelling.
The plaintiffs submitted that the words complained of identified three alleged labelling shortcomings, namely, the calories/kilojoules issue; the soya sauce issue; and the serving size issue. The last should be immediately discounted as the experts seem to agree that this was a matter of manufacturer's discretion. There was no occasion for extreme allegations of greed, profiteering or charlatanism with the result that the plea of justification could not succeed. The plaintiffs had made a mistake on the soya sauce matter, and that mistake was in the process of correction prior to publication. The serving size issue was a matter of debate but, at worst, the plaintiffs had been genuine in their belief that it was permissible to distinguish between adult and child size serves. Further, it was not open to the first defendant to rely simply upon her own state of knowledge or her beliefs as to what the position was concerning certain issues.
This brings me to the evidence of the various experts.

Experts

The defendants led evidence from Glyn Farrell who is a registered public analyst under the WA Health Act. He was instructed to conduct a chemical analysis of two packets of JJ Noodle Snacks. He described his methods at some length. It appears from his two reports dated 3 April 1998 that he identified various discrepancies between the nutritional information on the package and the contents of the package. His second report reads in part as follows:
"(a)The Food Standards Code requires that Energy values be declared in terms of kilojoules with the option of including calories if desired, it is not an either - or option. The Energy values should read 244kj/serve and 2040kj/100g.
(b)The obtained protein content was only 66% of that claimed in the nutritional panel.
(c)The obtained sugar content was only 20% of that claimed in the nutritional panel.
(d)The obtained sodium content was only 41% of that claimed in the nutritional panel.
(e)No figure for potassium was declared in the nutritional panel the obtained figure was 125mg/100g, the Food Standards Code require that this figure be declared.
(f)The declared sugar content of 17g/100g appears to be an error when one considers that a soft drink, which could be regarded as being 'sweet', contains approximately 10% sugar."
The plaintiffs led evidence from Murray Hoare. He is a senior food and agricultural chemist at the Chemistry Centre of Western Australia. He referred to carrying out certain tests concerning a sample of noodles. He provided a response to Mr Farrell's report. In essence, he said that the major constituents of the food product agreed "reasonably well" with the claims on the label of the product. He said that for the most part variations of the magnitude described by Mr Farrell are common to most products, save that as to sugar and sodium the differences were greater than would ordinarily be explained by batch variations and the labelling was inaccurate in that regard. He noted that the energy levels should have been stated in kilojoules. He said that no‑one's health was put at risk by these misdescriptions as they were simply too small to be significant to any dietary programme. In any event, having less sugar and salt than is described harms no‑one in that the consumer is simply eating a "blander" product than would otherwise be the case.
The defendants also led evidence from Margaret Miller who is a public health nutrition consultant. She said that some breaches of the Food Standards Code had occurred in the labelling of JJ Noodles, of which the most serious was the use of calories rather than kilojoules as the unit of energy content. She said that the consequences of the breaches would depend on who consumed the noodles, how often and over what period. Where a person consumed JJ Noodles occasionally as part of a balanced diet and did not use the nutrition information panel to plan their energy intake, the risk to health would be minimal. The lack of information about potassium content could have serious health consequences for a very small number of people with chronic renal failure, hypertension or congestive heart failure who are taking diuretic medication.
Ms Miller said further that in a case of reasonable consumption over the course of a school year, the misdescriptions on the nutrition panel would have a negligible effect on a child's weight. She said in a supplementary statement that tolerance levels on labels for nutrient composition are not definite and are quite vague.
Ms Miller was cross‑examined at some length. She conceded, in regard to the serve sizes, that a person would have to eat a considerable amount of the product for their health to be put at risk by the misdescription complained of in the review. She said that discrepancies were not uncommon on labels and that an undertaking to fix a description would probably be sufficient for the authorities in most cases. It was unlikely that a product would be recalled where such an undertaking was provided. It did not surprise her that there was no recall in the present case. She was pressed strongly and agreed that there was not likely to be any immediate threat to the health of consumers arising from the discrepancies complained of in the present case.
She agreed in general terms with the evidence of Mr Hoare that as to the sugar and salt issue, a blander food product would not represent any real threat to health save for consumers with renal or diabetic problems.
It is against this background, and having regard also to the evidence of the first defendant, Marlene Harding, that I must return to the plaintiffs' imputations. The defendants contended that the various imputations should be considered individually. The defendants brought forward evidence and arguments in support of a plea of justification concerning each imputation.
It will be useful to look at each imputation in turn.

The par 5(a) or First Imputation

The words complained of were said to convey an imputation that the first plaintiff caused the second plaintiff to engage in serious breaches of the laws of Western Australia.
The defendants submitted that the second plaintiff breached the Australian and New Zealand Food Standards Code as a result of its failure to correctly list the ingredients of JJ Noodles Snacks on the package and to ensure that the nutritional panel on the package complied with the Code. The defendants placed reliance upon an alleged admission by the first plaintiff that he did not consider nutritional panels and what appears on them as important and that children did not read nutritional panels. They placed reliance also upon the views reflected in the reports of Mr Farrell and Ms Miller.
In reviewing the relevant legal principles I noted that a plea of justification must be directed to the imputation. Further, the defendants must prove that statements are true and statements of opinion correct. In the present case, the first imputation concerns a "serious" breach. I characterise this as an expression of opinion by the first defendant but I am not satisfied that the opinion is correct. There appears to have been a degree of non‑compliance with the prescribed standards but having regard to the opinion of Mr Hoare and the cross‑examination of Ms Miller, I am not satisfied that it can be characterised as a serious breach. I find against the defendants on this issue.

The par 5(b) or Second Imputation

The words complained of were said to convey an imputation that the first plaintiff was so greedy for profits that he caused the second plaintiff to deliberately put the health of consumers of its product at risk.
The defendants submitted in regard to this imputation that there was evidence the activities of the first plaintiff were profit driven. As an importer of confectionary products into Australia for over 23 years, the first plaintiff knew or ought to have known of the legal requirements in Western Australia in relation to food labelling but ignored them.
It was said further that the plaintiffs were informed by the defendants, through Jack Stein in mid 1997 of problems with the labelling of JJ Noodles Snacks but failed or neglected to change the labelling prior to publication of the newsletter. The first plaintiff admitted that he did not consider nutritional panels and what appeared on them as important and said that children did not read nutritional panels. The plaintiffs did not check the accuracy of the label before sending the product to Western Australia. Mr Essey conceded that everything was left to Carjen in Malaysia.
It follows from my earlier finding and the weight I give to the opinion of Mr Hoare that I am not satisfied that the plaintiffs put the health of consumers at risk. The evidence of Mr Hoare was to the contrary. Mr Farrell and Ms Miller drew attention to shortcomings in the labelling, but Ms Miller tended to agree with Mr Hoare under cross‑examination. I am not convinced, when the evidence of the defendants' experts is considered as a whole, that they went so far as to suggest that the health of consumers was actually put at risk.
This finding would, of itself, be sufficient to dispose of the justification plea. However, in any event, I am not satisfied that Mr Essey acted as alleged because he was greedy for profits.
It will be convenient at this point to say something about the credibility of Mr Essey and Ms Harding.
Mr Essey gave evidence at the trial in a forthright manner. He did not claim to have any particular expertise in regard to matters of labelling or accountancy. It followed from this that he was rather vague in describing the level of business he transacted in the various States of Australia. The evidence he gave concerning the adverse financial effect of the alleged defamation was therefore not compelling. Nonetheless, I regarded him generally as a reliable witness. He accepted that he was in a business to make a profit but I give weight to his denial of the charge that he was greedy for profits and indifferent to health issues.
Ms Harding was somewhat garrulous as a witness and keen to emphasize her credentials as a person well‑versed about food standards and health issues. I accept that she was knowledgeable about such matters and had a genuine concern for the welfare of students. However, the language used in the newsletter suggests that she was inclined to be over‑zealous, and there were indications in the evidence that she was inclined to put a favourable gloss on her activities. Her evidence about the Leura conference was not convincing and I am not persuaded that she spoke to Mr Stein about the JJ Noodles product in mid July as alleged for had she done so, mention would have been made of this in her pre‑trial affidavit and answers to interrogatories. These matters were relied upon to justify the extremity of her annoyance and her denunciation of the plaintiffs as charlatans and profiteers.
It follows from these observations that, at the end of the day, I am not satisfied that the first plaintiff was so greedy for profits that he caused his company to deliberately put the health of consumers of its product at risk. I find that the evidence adduced by the defendants at trial did not justify the extremity of the allegations made against the plaintiffs.

The par 5(c) or Third Imputation

The words were said to convey an imputation that the first plaintiff caused the second plaintiff to endanger the health of children who used its products.
The defendants relied upon the evidence of Margaret Miller, a nutritionist, who indicated that as a result of the incorrect and negligent labelling of JJ Noodles Snacks, the health of consumers was put at risk, particularly those with special dietary requirements. This was said to be supported by the evidence of the first defendant, Ms Harding.
As I have already indicated, the plaintiffs relied upon the evidence of its expert, Murray Hoare, to the effect that the discrepancies were of a minor kind and not sufficient to have any real impact upon health. It follows from my earlier finding under par 5(b) above that I am not satisfied that the opinion reflected in this imputation is correct.

In Henry v TVW Enterprises Ltd (1990) 3 WAR 474 a television programme about a certain technique of dental care was thought to have defamed a dentist who was not directly identified by imputing that he was infected with a contagious disease. General damages of $60,000 were awarded having regard to the integrity and reputation of the plaintiff and the fact that the defamation struck at the heart of his self‑respect. Exemplary or punitive damages of $40,000 were awarded against the presenter in respect of the reckless action by the editor of including the footage when he appreciated that some people might identify the plaintiff.
In Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 8 December 1997 allegations were made that the branch secretary of a trade union and other officials of the union had misused their positions in relation to the salaries they were receiving. A letter written by the defendant to the officer in charge of the Police Fraud Squad, purporting to lodge an official complaint, was held to be defamatory. The trial judge noted that the plaintiff was distressed by the publication and no apology was forthcoming. While the publication was to a limited number of persons, publication to them would tend to be highly detrimental to the respondent because they were in effect his employers. It was a deliberate publication of a serious libel calculated to bring the defendant down and was actuated by express malice. The trial judge awarded $30,000 by way of compensatory damages and an additional $15,000 as exemplary damages. These awards were upheld by the Full Court on appeal. The Full Court was not persuaded that the amounts were so low as to be outside the range of a proper award.
More recently, in Heytesbury Holdings Pty Ltd v City of Subiaco (supra) the plaintiff sued for libel in respect of a press release which had been the subject of limited publication. The press release suggested that the plaintiff company was not a good corporate citizen by reason of its refusal to pay certain moneys owed to the local municipality. The press release indicated also that the plaintiff had not been a good tenant or a good ratepayer. These imputations were held to be defamatory of the plaintiff and were not excused by the defences of fair comment and qualified privilege.
Steytler J held that whilst a corporation may not be awarded damages for injured feelings, it may receive an award of general damages in order to repair damage caused by the injury to its business or trading reputation without proof of any specific loss of business. His Honour affirmed the rule that in the case of libel, damage arising from a publication is presumed: Ratcliffe v Evans [1892] 2 QB 524 at 530 applied. In the circumstances, an award of $5,000 inclusive of interest was held to be appropriate in order to compensate the plaintiff company and to vindicate its reputation. No basis for an award of exemplary damages was held to have been made out.
When I turn back to the circumstances of the present case, I take account of the fact that the defendants' publication was directed to a comparatively narrow circle of readers, that is to say, persons associated with school canteens. I take account of the fact also that the plaintiff company was not generally known to the readership although, as I have found, there were readers who identified the plaintiff company and its managing director as the subject of the attack. Nonetheless, the defendants' publication was an influential forum for the expression of opinion which did have an impact upon the business reputation of both plaintiffs. It follows from earlier discussion that the damage arising from a publication held to be defamatory is presumed. There is some evidence before me that in the present case the defendants' publication led to consequences adverse to the plaintiff company.
I have previously noted that, in my view, the language used by the first defendant was disproportionate to the requirements of the occasion. I am satisfied on the evidence before me that the first plaintiff was undoubtedly annoyed when the contents of the article were brought to his attention. I take account also of the fact that an apology and retraction was sought by his solicitors but no satisfactory response was received. Indeed, the defendants continued to assert that the plaintiff company was in breach of the regulatory requirements and maintained their stance at the trial of the action. However, I consider that the first defendant wrote the article with a mixture of motives and although the words she used were misguided, and ultimately defamatory, I should not overlook the fact that she believed she was contributing to a debate in the public interest.
I am not convinced that the first plaintiff was deeply hurt at a personal level by the words complained of and I am not persuaded that this case is one in which it can be said that the defamation struck at the heart of the first plaintiff's self‑respect. The first plaintiff acknowledged that he was in business to make a profit and was obviously familiar with the abrasive nature of competitive business operations. I have noted that although a company may recover damages for injury to its business reputation it does not receive an award of damages for injured feelings.
When I draw these various considerations together I consider that the first plaintiff is entitled to an award of compensatory damages including aggravated damages. I consider that the aggravated damages in the present case are principally referable to the extremity of the language used and the failure to apologise when an apology was sought. I am influenced also by the defendants' improper purpose in seeking to promote their own product at the expense of a rival product. I consider that the first plaintiff should be allowed the sum of $40,000 by way of general damages. The second plaintiff, being the plaintiff company, will be allowed the sum of $20,000 by way of general damages, being a figure that does not include any component for aggravated damages.

The Plaintiffs' Claim for Exemplary Damages

It emerged from my earlier review of the pleadings that the plaintiffs' statement of claim includes a claim for exemplary damages. The facts and matters relied on in support of such a claim are set out in par 9 of the claim and include reference to the second defendant having published the matter complained of knowing that it would have a tendency to lower the reputations of the plaintiffs in the estimation of those to whom the newsletter was likely to be published; cause those persons to shun and avoid the plaintiffs and to bring the plaintiffs and each of them into odium, ridicule and contempt. Such knowledge is to be inferred from the fact that the imputations are obviously defamatory and the emotive and inflammatory language used. Reference is made also to the alleged fact that the second defendant marketed noodles to school canteens in competition to the second plaintiff.
The plaintiffs say further that the second defendant published the matter complained of knowing that it was false or with a reckless disregard to the truth or falsity of it. Such knowledge is to be inferred from the falsity of the meanings and the fact that no attempt was made to contact the plaintiffs or either of them to seek to determine the truth of the matters complained of. It is said further that the second defendant has refused to apologise and has maintained a spurious defence of justification to the plaintiffs' claim.
The defendants submitted that the plaintiffs should not be awarded exemplary damages because the defendants did not intend the article complained of to be identified by readers of the newsletters as relating to the plaintiffs. The first defendant simply used JJ Noodles Snacks as an illustration of improper labelling and did not know that the product was associated with either plaintiff. The publication was not motivated by malice or by a need or desire to advance the defendants' commercial interest in relation to Mamee Noodles. This was apparent from the comparatively small revenue generated by the second defendant in respect of the Mamee Noodles product. There was evidence before the Court that Ms Harding was in fact looking for a substitute product for Mamee Noodles for school canteens. When these various matters were taken into account the claim for exemplary damages could not be sustained.
I have to say that I am persuaded by the defendants' submissions in regard to the plaintiffs' claim for exemplary damages. I have noted in my review of the decided cases that exemplary damages will be awarded in circumstances in which there is a conscious wrong doing in contumelious disregard of another's rights or in circumstances in which it is open to the Court to find that the defendant recklessly attacked the plaintiff's reputation. It is true, as I have already found, that the defendants' publication was disproportionate to the requirements of the occasion. However, I have noted also that the defendants' actions were partly influenced by a misguided understanding of what her entitlements were in contributing to a debate about a matter of public interest. In these circumstances, I am not persuaded that an award of exemplary damages is appropriate.

Summary as to Plaintiffs' Claim

In summary, then, the first plaintiff will be awarded the sum of $40,000 by way of general damages which should be taken to include an allowance for aggravated damages. The second plaintiff will be allowed the sum of $20,000 by way of general damages. The plaintiffs' claim for exemplary damages will be dismissed.
The plaintiffs' statement of claim included a claim for interest pursuant to s 32 of the Supreme Court Act 1935. Previously decided cases indicate that interest ought to be awarded to a successful plaintiff in a defamation action to the extent that it is fair and proper on the amount of his damages from the date of publication to the date of judgment: John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 143 per McHugh JA. Accordingly, the plaintiffs will be allowed interest on the award of damages from 1 October 1997 to the date of judgment at the rate of $6.00 per centum per annum.

The Defendants' Counterclaim

The defendants alleged that the first plaintiff, Mr Essey, was the author of the plaintiffs' publication and acted for All‑Fect Distributors, the second plaintiff, in publishing the circular letter in question which was addressed to the "Canteen Supervisor/Buyer". The defendants' case was that this publication was sent to all schools in Western Australia as well as to all distributors and to potential buyers. No attempt was made by the plaintiffs to ascertain from the defendants to whom the defendants' publication had been sent. The defendants contend that these matters and especially the extent of the circulation have a bearing upon issues relating to qualified privilege and damages.
It was further alleged by the defendants that the defendants were known to the recipients of the GUYS newsletter in September 1997 who would readily identify the defendants when reading the plaintiffs' publication in October 1997. The defendants relied upon evidence given at the trial that in October 1997 Ms Harding had a high profile in the canteen food industry as a result of the newsletter, her consultancy work and visiting many school canteens as a principal of GUYS. Reference was made also to the conferences co‑ordinated and presented by the first defendant in 1995 at the Perth Town Hall, which was attended by about 350 persons, and a further conference in 1996 at the University of Western Australia.
The defendants pleaded that their reputations were damaged by the matter complained of which in its natural and ordinary meaning conveyed various imputations each of which was defamatory of the defendants, namely, that they caused misleading information to be published in the September 1997 issue of Canteen News (par 20.1 and par 21.1); that they deliberately caused misleading information to be published (par 20.2 and par 21.2); that they caused false information to be published (par 20.3 and par 21.3); that they deliberately caused false information to be published (par 20.4 and par 21.4); that they did not have the qualifications to express an opinion on matters such as illegal packaging and health dangers posed by such packaging in relation to products such as JJ Noodles (par 20.5 and par 21.5); that they showed blatant ignorance in expressing and publishing an opinion on such matters (par 20.6 and par 21.6); that their comments on JJ Noodles had a purpose and aim that was not in good faith (par 20.7 and par 21.7); that their comments on JJ Noodles attempted to prevent fair and honest trade (par 20.8 and par 21.8); that they engaged in the practice of fooling people as a method of doing business (par 20.9 and par 21.9). I will call these assertions the counterclaim imputations.
The plaintiffs by their defence to the counterclaim admit that the plaintiffs' publication was mailed to certain schools in Western Australia. They deny that the counterclaim imputations are imputations that are fairly able to be drawn from the words in the publication and defamatory of the first and/or the second defendant. As I indicated earlier, the plaintiffs also raised pleas of justification and qualified privilege. They say that the plaintiffs' publication was made in order to mitigate the damage occasioned by the defendants' publication.
Having regard to the legal principles previously discussed, I must first consider whether the counterclaim imputations are fairly able to be drawn from the words in the publication and are defamatory of each of the defendants. It will then become necessary to consider the various defences raised by the plaintiffs' defence to the counterclaim.
I consider that the imputations complained of can be drawn from the words in the plaintiffs' publication and are defamatory of each of the defendants. The evidence before me clearly establishes that the first defendant and her company were well‑known in the school canteen community and I therefore have little doubt that the defendants were identified by the words complained of and that their reputations were adversely affected. It therefore becomes necessary to look closely at the defences to the counterclaim.

Defences to Counterclaim

The plaintiffs rely on the defence of justification in relation to the defendant's counterclaim. The plaintiffs are therefore obliged to satisfy the Court that the imputations conveyed by the publication were true.
The defendants submitted that there was a lack of truth. The line of attack in the plaintiff's publication concerning Mamee Noodles was misconceived and in error. There was evidence before the Court that the defendants sold Mamee Noodles for 35 cents, not 50 cents as stated in the plaintiff's publication. It was said further that there was an insufficient basis for an attack upon the defendants.
I am not satisfied that in the circumstances of the present case the counterclaim can be defeated by the plaintiffs' plea of justification. I have noted in earlier discussion that the plea of justification must be directed to the imputations that are found to be reflected in the words complained of. In this case, the emphasis in the imputations is upon the deliberate quality of the defendants' actions. In earlier discussion I acknowledged that the first defendant was knowledgeable about foods standards and had a concern for the welfare of students. Her defamatory statements were occasioned by the over‑zealous nature of her conduct and by a protective attitude towards her own products, rather than by a wilful determination to mislead. I am not persuaded that the matters raised by way of justification are sufficient.
The plaintiffs rely also on the defence of qualified privilege in relation to the defendants' counterclaim. The plaintiffs say essentially that the plaintiffs' publication was made in reply to an attack on the character of the plaintiffs in the publication and that the publication was fairly relevant to the accusations made against the plaintiffs. The plaintiffs recognised that the onus of proof lay upon them to establish that the letter was published on an occasion of qualified privilege.
The plaintiffs submitted that when a person has been attacked seriously and abusively, the terms of his reply are not to be measured in nice or precise scales: Penton v Calwell (1945) 70 CLR 219 at 243. According to Lord Oaksey in Turner v Metro-Goldwyn-Mayer Pictures Ltd [1950] 1 All ER 449 at 471:
"The law does not concern itself with niceties in such matters. If you are attacked by a prize fighter you are not bound to adhere to the Queensbury rules in your defence."
In other words, a certain latitude is afforded to the person attacked to make his reply.
It is true that the plaintiffs' publication suggests that the claims it was seeking to answer were of "unqualified opinion" and showed blatant ignorance of the true facts and suggested that the defendants had unjustly misinformed their readers and made false representations of fact. However, these comments were made on an occasion of qualified privilege in that the plaintiffs had a duty and interest to respond to an attack and did so by an appropriate means and in a proportionate manner.
When the matter was viewed in that light, the first plaintiff was entitled to describe the matter complained of as, in general terms, untrue information and was entitled to question the intentions of his competitor as the author of the attack. He honestly believed that an attempt was being made by a competitor to stop sales of his product.
The defendants contended at the trial that the qualified privilege claimed by the plaintiffs in respect of the counterclaim never arose because the defendants' publication had not identified the plaintiffs. Further, and in any event, the plaintiffs' publication went far beyond a legitimate reply and was not published in good faith. Further, malice on the part of the first plaintiff (which could be attributed to the second plaintiff) was to be found on the basis that the first plaintiff's demeanour given in the witness box showed that he wrote the letter to vent his personal spite and ill‑will towards the first defendant and her business, and to exact revenge.
It was significant, the defendants argued, that the first plaintiff on his own admission did not make any enquiries or check as to the range of the defendants' publication or as to the nature of the defendants' involvement in the sale of Mamee Noodles either as to price or as to the extent of the sales. Further, he failed to make any enquiries or check whether the label complied with Western Australian law before writing the plaintiffs' publication. It could therefore be inferred that the first plaintiff had no factual basis for questioning the integrity, honesty, bona fides and business practice of the defendants. A finding should be made that the plaintiffs' publication was written out of spite and with a specific intention to inflict maximum harm on the reputations and business standing of the defendants. Further, the plaintiffs introduced irrelevant matters into the publication by emphasising the allegedly improper motives of the first defendant and GUYS.
I recognise that if the defendants' publication did not identify either of the plaintiffs to its readers then it could be forcefully argued that an occasion of privilege did not arise in respect of the plaintiffs' publication. However, as I have already indicated, I consider that the plaintiffs were identified and the consequence of such a finding is that there is a basis for saying that the plaintiffs were entitled to respond to the trenchant attack that had been made upon them provided that what was done did not exceed the exigencies of the occasion.

It follows from this that I consider that the plaintiffs' publication and the counterclaim imputations reflected in it were assertions made on an occasion of qualified privilege and that this line of defence is open to the plaintiffs.
The first plaintiff's evidence at trial was to the effect that he sought to send his reply to those same schools he thought had received the matter complained of. His evidence as a whole suggests he tried to make his response proportionate to the problem he sought to cure. In my view, having been subjected to a trenchant attack, some latitude should reasonably be allowed to the plaintiffs in seeking to answer the attack. They had to move quickly. Constraints of time and circumstance did not permit them to make a full inquiry as to the scale of the defendants' operations and the circulation of its newsletter. In that regard, it is important to bear in mind that there had been exchanges between the solicitors for the plaintiffs and the first defendant and those exchanges had failed to produce a satisfactory result. The defendants were uncooperative and defiant.
It follows from these observations that I am satisfied that the counterclaim imputations were published on an occasion of privilege. I consider that the nature of the plaintiffs' response was commensurate to the requirements of the occasion. I am not satisfied that the claim of privilege is negated by malice or improper purpose. It follows that, in my view, the defendants' counterclaim should be dismissed.

Defendants' Counterclaim for Damages

It follows from the conclusion I have just expressed that it is not strictly necessary for me to deal with the defendants' counterclaim for damages. However, for the sake of completeness, and in case I be wrong in the conclusion I have come to, I will proceed to deal with the question of compensation as if the defendants' claim had succeeded. In doing so, I draw upon the principles concerning damages in defamation previously reviewed. I will not repeat them.
The defendants by their counterclaim claim both compensatory and exemplary damages. This plea is reflected in par 22A of the counterclaim. It is said that the plaintiff's publication was published by the first plaintiff to recipients intentionally knowing that the same would have a tendency to bring the defendants and each of them into public ridicule, hatred and contempt and to cause the recipients to avoid having any business dealings with the defendants. Such knowledge is to be inferred from the circumstances that the imputations in the counterclaim are obviously defamatory and the exaggerated and emotive language used. Reference is also made to the attribution of improper motives to the defendants. It is said further that the first plaintiff published the matter complained of knowing that it was false or with a reckless disregard as to truth or falsity. Further, the plaintiffs have refused to publish an apology and have maintained untenable pleas of justification.
The defendants rely upon evidence that Ms Harding was the predominant representative of GUYS in the school canteen market and essentially personified GUYS. The plaintiffs' publication was published to all schools in Western Australia and potential buyers and, on the defendants' case, was used as a tool in a sustained commercial campaign. They say that substantial damages awards have been made in instances where the career and professional prospects of individuals have been seriously affected by defamation. Coyne v Citizen Finance Ltd (supra); Carson v John Fairfax & Sons (supra); Crampton v Nugawela (1996) 41 NSWLR 176.
The defendants rely upon evidence given by the first defendant at trial that as a result of the plaintiffs' publication she lost all confidence in herself with the result that she ceased to work at GUYS and distanced herself from the business. Her personal career as a school canteen consultant in her own right and as the personification of GUYS in the school canteen market has been substantially damaged.
The defendants submitted in support of the claim for exemplary damages that the plaintiffs' publication was used as part of a campaign to gain financial advantage for the plaintiffs and to advance their commercial interests in the Western Australian school canteen market through their State distributors. In that regard, reference is made to the letter from Mr Stein to Confectionary Distributors dated 21 October 1997 in which the latter firm is urged to publish the plaintiffs' publication to every school, with free samples of JJ Noodles Snacks, using their "own reps and wholesalers". It is also stated "We believe that you and the wholesalers drawing from you have a unique opportunity to greatly increase your overall business in the school canteen area." The defendants also placed reliance upon the fact that no apology has been offered by the plaintiffs to the defendants, and the first defendant's conduct at trial was the very opposite to an apology. The plaintiffs persisted with a defence of justification.
The plaintiffs submitted that the alleged impact of the plaintiffs' publication upon the first defendant was exaggerated. The respective publications gave rise to a debate about the adequacy of labelling but this could not be regarded as responsible for the first defendant's alleged lack of confidence. Evidence and allegations concerning the supposed curtailment of her career were not convincing and were out of proportion to the matters under notice. Further, and in any event, there was no compelling evidence from the various witnesses called by the defendants concerning the standing of GUYS in the school canteen community which suggested that canteen managers or staff thought any less of the first defendant as a consequence of the plaintiffs' publication. The first defendant's answers to interrogatories refer to her standing and reputation having been undermined in the eyes of Ms Terenciuk of the Perth Modern School canteen but this was a very limited basis for the claim and did not appear to be supported by Ms Terenciuk's evidence at the trial. Her evidence at the trial was directed to showing complete support for the first defendant.
As to exemplary damages, the plaintiffs submitted that no such damages should be allowed. On any view of the matter, the plaintiffs' publication was a response prompted by the defendants' earlier attack upon the plaintiffs. Even if it be thought that the plaintiffs had exceeded the boundaries of privilege, it could not be said that they had acted unreasonably or in a contumelious manner that was deserving of the punishment implicit in an award of exemplary damages. Likewise, an apology could not reasonably be expected of the plaintiffs in circumstances where they were simply responding to a prior attack.
If it be held, contrary to my earlier findings, that the defendants, or either of them, are entitled to compensatory damages, I consider that an award must, in any event, proceed from the premise that the plaintiffs were essentially responding to a prior attack, and that the nature of the plaintiffs' response was comparatively restrained. Nonetheless, a finding in favour of the defendants imports an acknowledgement that they were subjected to a deliberate attack. When I weigh up these competing considerations, I consider that the first defendant would be entitled to recover the sum of $30,000 by way of general damages and the second defendant would be entitled to recover the sum of $15,000. In the circumstances of the present case, I am not persuaded that the plaintiffs acted in contumelious disregard of the defendants' rights, for, essentially, the plaintiffs were responding to a prior attack. I am not persuaded that the defendants are entitled to recover exemplary damages.

Overall Summary

In summary, then, the first plaintiff will be awarded the sum of $40,000 by way of general damages. The second plaintiff will be allowed the sum of $20,000 by way of general damages. The plaintiffs' claim for exemplary damages will be dismissed. The plaintiffs will be allowed interest on the total award of damages from 1 October 1997 to the date of judgment at the rate of $6.00 per centum per annum.
The defendants' counterclaim will be dismissed.