Evans, G.C. v John Fairfax Group P/L

[1994] FCA 327

GRAHAM CHARLES EVANS v. JOHN FAIRFAX GROUP PTY LIMITED, ALAN RAMSEY AND JOHN
ALEXANDER
No. ACTG18 of 1993
FED No. 327/94
Number of pages - 16
Defamation - Costs

COURT

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
NEAVES, MILES AND FRENCH JJ

CATCHWORDS

Defamation - appeal - whether trial judge erred in finding that the alleged imputations were not established - senior public servant alleged to have been defamed by newspaper article.

Defamation - imputations - words alleged to mean Minister lacked confidence in appellant - words alleged to mean a system of patronage contributed to appellant's successful career - whether the imputations relied on by the appellant were raised by the publication in question - where imprecise language used more open to imputations - look at broad impression conveyed to ordinary reasonable reader not narrow meaning of each word.

Costs - whether trial judge erred in exercise of discretion to make order for costs - whether respondents' failure to respond to appellant's demand for an apology constituted grounds for making no order as to costs - whether publication of an apology might have prevented litigation - decision of trial judge based on erroneous grounds.

Defamation Act (NSW) 1974, sub-s.9(2)
Federal Court of Australia Act 1976, sub-s.43(2)
Supreme Court Act 1933 (ACT), s.23
ACT Supreme Court Rules, O.65 r.1

Morgan v. Odhams Press Ltd. and Another (1971) 1 WLR 1239 at 1245
Mirror Newspapers Limited v. Harrison (1982) 149 CLR 293 at 301
Lewis v. Daily Telegraph Ltd. (1963) 1 QB 340 at 374
Humphries v. TWT Limited (unreported, Federal Court of Australia, 3 December 1993)

HEARING

CANBERRA, 24-25 June 1993
#DATE 27:5:1994

Counsel for the appellant: Mr. T. Hughes QC

with Mr. B.Connell

Solicitors for the appellant: Macphillamy Cummins and Gibson

Counsel for the respondents: Mr. H. Nicholas QC

with Mr. M. Lynch

Solicitors for the respondents: Freehill Hollingdale and Page

ORDER

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The cross-appeal be allowed, the order of the Supreme Court of the Australian Capital Territory that there be no order as to costs be set aside and, in lieu thereof, it be ordered that the plaintiff

(appellant) pay the defendants' (respondents') costs of and incidental to the proceedings in that Court.

3. The appellant pay the respondents' costs of the appeal and cross-appeal.

Note: Settlement and entry of orders is dealt with in order 36 of the Federal Court Rules.

JUDGE1

NEAVES, MILES AND FRENCH JJ This is an appeal against a decision of the Supreme Court of the Australian Capital Territory dismissing an action for defamation. There is also a cross-appeal against the order for costs made in the Supreme Court and there is a notice of contention in relation to findings made in the Supreme Court relating to damages.

1. The trial judge dismissed the action on the ground that the imputations upon which the appellant relied were not raised by the publication in question. The appeal is limited to that issue. There was no finding by the trial judge on the question whether the imputations, or any of them, were defamatory. Whilst the trial judge's reasons for judgment touched on that question and other questions relating to the respondents' liability, those questions are not raised in this appeal. Whether any of the imputations are made out is a matter of fact, but it is not a matter which depends in any way on the credibility of witnesses nor on the exercise of any discretionary judgment. The matter is one of inference from the publication itself and the surrounding circumstances as established by the trial judge.

2. The appellant's personal history, which provides the background to the publication, was the subject of findings by the trial judge which are not challenged. That background may be set out briefly. The appellant was born on 22 January 1943 in Williamstown, Victoria. He graduated Bachelor of Arts (with Honours) from the University of Melbourne in 1963. Within the next few years he obtained a Diploma of Education and graduated Master of Arts (majoring in History) from the same University, where he worked as a tutor and later lecturer. He joined the Department of Foreign Affairs as a trainee diplomat in 1968. He served overseas as well as in Canberra. He gained a further degree in economics from the Australian National University during this period and rose to become Counsellor at the Australian Embassy in Washington in 1980. Whilst in Washington he was awarded a Masters degree in International Policy and Planning at the John Hopkins School of Advanced International Studies.

3. For a period of about six years commencing in 1976 the appellant was a member of the Australian Labor Party. He made the acquaintance of Mr.R.J.L. Hawke in Washington in 1980 and declined an offer of a position on Mr.Hawke's staff in 1982 when Mr. Hawke was Opposition spokesperson on employment and industrial relations.

4. In 1982 the appellant left the Department of Foreign Affairs in order to accept a promotion to the position of Assistant Secretary, International Development Finance Branch, Overseas Economics Relations Division, Department of the Treasury. After twelve months in that position he was transferred to the head position in the Overseas Economic Relations and Trade Branch within Treasury.

5. Following the election on 5 March 1983, the appellant was offered a three year appointment on the staff of the Prime Minister as Principal Private Secretary. He accepted the invitation after consulting Mr. John Stone and Sir Geoffrey Yeend and receiving advice that there was no impropriety in that course.

6. In about April 1986 the appellant applied for the vacant position of Deputy Secretary, Department of the Prime Minister and Cabinet. He sought no assistance from the Prime Minister in this endeavour and did not even advise the Prime Minister of his application. His application was considered by a merit selection board and he was successful. Whilst holding the position of Deputy Secretary he acted at least twice as Secretary to the Department of Prime Minister and Cabinet.

7. In November 1986 Cabinet accepted the recommendations of the acting Chair of the Public Service Commission and appointed the appellant Secretary to the Department of Resources and Energy. Senator Gareth Evans was the Minister responsible for that Department at the time of the appointment. Following the election in May 1987 there was a re-organization of the Australian Public Service. The Department of Primary Industry and the Department of Resources and Energy were merged. The responsible Minister of the new "mega department" was Mr. John Kerin, who had been the previous Minister for Primary Industry. It was Mr. Kerin's wish that the Secretary to the former Department of Primary Industry, Mr. Geoffrey Miller, be appointed Secretary to the new merged Department. However, after advice and deliberation, Cabinet appointed the appellant as Secretary, with the proviso that should a suitable vacancy elsewhere occur after about twelve months, the appellant would be offered that vacancy and Mr. Miller would be offered the position held by the appellant.

8. In May 1988 the appellant resisted a suggestion that he transfer to the Department of Defence, offering as a reason that he lacked sufficient management expertise and preferred a department within the economic area.

9. In September 1988 the appellant was appointed to the position of Secretary to the Department of Transport and Communications. That Department was also the result of a combination of two former Departments. The responsible Minister at the time of the appellant's appointment was Senator Evans, but by the time the appellant took up the position, Senator Evans had become Minister for Foreign Affairs and Trade.

10. It was whilst the appellant continued to serve as Secretary to the Department of Transport and Communications that the following article appeared on p.17 of the Sydney Morning Herald of 14 April 1990.
    

"Cosy in the Corridors of Power

2. Alan Ramsey

3. Two days after the elections, John Singleton hosted a Labor victory party at his Sydney restaurant. Bob and Hazel Hawke were there. So were a lot of other people from the Labor campaign. Some bizarre things happened that night.

4. One was the spectacular arrival of a horse and rider in the restaurant. Another was Hazel Hawke's objection to sitting opposite the wife of a particular Labor adviser. The couple moved.

5. A third was Bob Hawke's speech.

6. What some people remembered later was Hawke's extravagant praise of Sandy Hollway, the bureaucrat who runs his Canberra office, and Hawke's failure to make similar mention of Geoff Walsh, his staff political adviser. The lapse generated a lot of Labor gossip.

7. So did the incident of the seating arrangements.

8. Hollway is a career public servant. Walsh is a Labor loyalist. Insiders say Walsh's role in the campaign was crucial as a restraining influence and conduit between the campaign organisation and Hawke. Hollway, as always, was the office chief of staff, the efficient smoother of office administration.

9. Well before the campaign, Hollway's promotion as a Deputy Secretary within the Department of Prime Minister and Cabinet was confirmed, even though he remained on Hawke's staff. Yet he surprised some people as to how involved politically he seemed to be in the Hawke campaign. Hollway chaired the small group that put together the initial draft of Hawke's policy speech. An he flitted back and forth between Canberra and the campaign caravan.

10. Had Labor lost the election, Hollway was secure in his promotion to his new position in the Prime Minister's Department - as distinct from the Prime Minister's personal staff - where he would serve his new political master, Andrew Peacock. In the meantime, he was helping write the campaign speech for Peacock's opponent.

11. A delicate business.

12. Before polling day, Geoff Walsh had been thinking about his future, irrespective of whether Labor won or not. Apparently Hawke was unaware of this until a senior minister mentioned it to him. Hawke is said to have been upset Walsh had not told him first he might go.

13. Whatever the reason, the absence of Walsh's name was apparent when Hawke that night singled out various people, particularly Sandy Hollway, for special mention. The incident soured more than a few Labor people. Meanwhile, Walsh is out of Canberra on a couple of weeks' leave.

14. If Geoff Walsh goes, his departure would accelerate the turnover of people from Hawke's staff which is about to take place. Having done his stint in the King's personal service, Hollway is now due to take up his new post in the upper reaches of the Department of the Prime Minister and Cabinet (PMC).

15. Also leaving are two other career officers: Hawke's economics adviser, Rod Sims, who also becomes a Deputy Secretary in PMC, and his foreign policy adviser, John Bowan, who is returning to Foreign Affairs.

16. Bowan is one of the last of the originals who joined Hawke's staff back in 1983. So is Walsh, although Walsh's service, unlike Bowan's has not been continuous. Walsh, Hawke's first press secretary, went off to the ILO in Geneva at the beginning of 1986 and didn't return until early 1988.

17. If Walsh now leaves, only Hawke's personal secretary, Jean Sinclair, who came with him from the ACTU, would be left of the old gang. And even Jean Sinclair, who had major surgery for cancer last year, may not stay on.

18. One of the intriguing constants of the Hawke office is its status as a transit house for those who pass through on their way to bigger and brighter things. That may well be a barometer of how well Hawke recruits. It may also say something about the enhanced power and influence of his department.

19. Whatever the case, working for Bob Hawke damages nobody's career, least of all the public servants. Chris Conybeare is just another example.

20. Conybeare was Sandy Hollway's Predecessor as Hawke's chief of staff. He, like Hollway, joined Hawke from PMC and, as Hollway now plans, left Hawke to return as a Deputy Secretary to his old department. That was in 1988. This week, a fortnight after the elections, Conybeare became the Government's newest departmental head when Cabinet appointed him Secretary of the Department of Immigration, Local Government and Ethnic Affairs.

21. A great career path, isn't it?

22. Graham Evans came first.

23. Evans, from Foreign Affairs, was Hawke's original principal private secretary in 1983. Three years later, Cabinet appointed Evans departmental head of Energy and Resources. After the 1987 elections, when Hawke and Mike Codd, the head of the Prime Minister's Department, reorganised the entire public service structure, Evans got the top job in the amalgamated Primary Industries and Energy portfolio.

24. It didn't last. Evans and his minister, John Kerin, didn't get on. Kerin hadn't wanted Evans as his departmental head and their relationship never improved. So Cabinet accommodated Graham Evans as head of Transport and Communications under his old ministerial boss, Gareth Evans."

25. Evans major and Evans minor had worked together in Energy and Resources before the 1987 reorganisation. Graham Evans is still running transport and Communications, now in tandem with Kim Beazley, while Gareth Evans has moved on to save the world in Foreign Affairs.

26. Now Conybeare, who followed Graham Evans into Hawke's office, has followed him up the escalator to departmental head status. And Sandy Hollway, who replaced Conybeare, is on his way too.

27. Other old Hawke Faithfuls haven't done badly either.

28. Peter Barron, an original staff political adviser, left to become an executive assistant to Kerry Packer in 1986. Bob Sorby, Barron's successor, has been an executive in Alan Bond's shaky empire since late

1988. It's as cosy there as it is in the PM's department. Two former Hawke advisers teamed up with two old media mates, one now trying to eat the other.

29. There's another coincidence.

30. The swaggering factional heavy, Graham Richardson, hand-picked both Barron and later Sorby from his NSW Labor network for Hawke's staff. Richardson in 1983 named Barron one of his two closest personal friends (the other was Laurie Brereton). And guess what portfolio Graham was keen - some might even say desperate - to have in the new Government? Transport and Communications. Some colleagues say Richardson is still in a foul mood at being lumped with unglamorous Social Security.

31. Other Hawke staffers over the years have also kicked on. Cabinet appointed Hawke's first economics adviser, Ross Garnaut, Ambassador to China. Steve Sedgwick, Garnaut's successor, became a Deputy Secretary in Finance. Allan King, a private secretary is now a lobbyist for the Seven television network. Jeff Townsend, Bob Mitchell and David Buckingham, all of them seconded from the public service, all have senior posts in the bureaucracy.

32. And then there's Mike Codd.

33. Codd was the public servant Labor didn't want in 1983. Ralph Willis and the ACTU saw Codd as tainted by Fraser. So Labor shuffled him out of his sensitive post as departmental head of Industrial Relations and into the relative backwater of the Industries Assistance Commission.

34. Codd was back in favour within two years, aided by the subtle manoeuvring of his public service patron, Sir Geoffrey Yeend, head of the Prime Minister's Department and, at the time, the most powerful figure in the bureaucracy. By 1985 Codd was again a departmental head. A year later he was Yeend's successor at PMC - the pinnacle of bureaucratic power these days. It's as much a measure of Codd's ability as it was Yeend's clever playing of the politicians that Mike Codd achieved all this in little more than three years. No department has more influence with this Government than the Department of Prime Minister and Cabinet. And it is an influence exercised by Codd, as it was by Yeend, through his influence with Hawke.

35. Malcolm Fraser regenerated the bureaucratic power of PMC in the late 1970s. Yeend and Codd simply continued the trend through their influence with Fraser's successor. Who leads whom might be a nice exercise in Yes, Prime Minister. And maybe that's as it's always been.

36. Ron Brown may not agree.

37. Mick Young, as Immigration Minister, recruited Brown in 1987 from his job as executive director of SBS to head up the Immigration Department. Bob Hawke announced last Tuesday Brown "intended to make a career change" and "retire" in July from the Commonwealth Public Service. The same announcement handed Brown's job to Chris Conybeare, Hawke's old chief of staff.

38. Ron Brown isn't saying much at all.

39. But on Tuesday night others in the Government were saying unpleasant things about how Brown, post-election, was being levered aside by pressure from professional ethnic groups and the Office of Multicultural Affairs in Hawke's department to re-establish their influence in favour of a more flexible immigration policy.

40. Cosy but nasty."

(The numbering of paragraphs has been added for convenience and follows that set out in the schedule to the further amended statement of claim.)

1. The article was accompanied by a cartoon showing Mr. Hawke standing by the side of a swimming-pool. An unidentified figure is shown jumping from a springboard and disappearing off the top of the frame of the cartoon.

2. The action was brought against the first respondent as publisher, the second respondent as author and the third respondent as editor of the newspaper. Damages were claimed for the publication of the article in all the States and Territories of Australia.

3. In his statement of claim the appellant alleged that the article in its natural and ordinary meaning was meant and was understood to mean as follows:
   

"(a) The plaintiff's career advancement in the Commonwealth Public Service was only the result of the patronage from the Prime Minister.

(b) The plaintiff, in his capacity as Secretary of the Department of Primary Industry and Energy, lacked the confidence of his Minister, Mr. John Kerin.

(c) The plaintiff was a person whose successful career in the Public Service was due more to his enjoyment of a nasty system of patronage than to anything else.

(d) The plaintiff was prepared to advance his career through cronyism rather than on the merits of the performance of his duties."

1. In respect of the publication within New South Wales the appellant alleged that the defamatory meanings alleged in the statement of claim were the imputations that arose from the article within the meaning of sub-s.9(2) of the Defamation Act 1974 of that State.

2. For the purposes of the appeal, no distinction needs to be drawn between defamatory meanings and imputations. It is convenient to use the term "imputations" throughout these reasons for judgment.

3. At the appeal counsel abandoned reliance upon imputation (a) and argued but faintly in support of imputation (d).

4. It is well established that in deciding whether an imputation arises from the matter complained of, the Court must approach the question from the standpoint of the ordinary reader and that in doing so the Court will bear in mind that the ordinary reader will indulge in a certain amount of loose thinking: Morgan v. Odhams Press Ltd. and Another (1971) 1 WLR 1239 at 1245.

1. At the same time, as Mason J, as he then was, said in Mirror Newspapers Limited v. Harrison (1982) 149 CLR 293 at 301:
   

"A distinction needs to be drawn between the reader's understanding of what the newspaper is saying and judgments or conclusions which he may reach as a result of his own beliefs and prejudices. It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition. Its importance for present purposes is that it focuses attention on what is conveyed by the published material in the mind of the ordinary reasonable reader."

1. Although the ordinary reader is not suspicious of mind by nature, nor avid for scandal, the language of the publication as a whole may excite suspicion in the mind of that reader. Where that is so, the reader is the more likely to read between the lines and take the matter complained of to convey a meaning which causes the reader to think less of the plaintiff. The words of Holroyd Pearce LJ in Lewis v. Daily Telegraph Ltd. (1963) 1 QB 340 at 374 were endorsed by Mason J in Harrison at 302:
   

"When persons publish words that are imprecise, ambiguous, loose, fanciful or unusual, there is room for a wide variation of reasonable opinion on what the words mean or connote. The publisher can hardly complain in such a case if he is reasonably understood as having said something that he did not mean. But when words with a precise and well-known meaning are used without the addition of any expressions which could impart some other flavour to them, it is not fair to twist them from their normal sense."

1. Brennan J in Harrison at 304 approved of the following remarks made by Lord Devlin when Lewis was in the House of Lords, (1964) AC 234 at 285:
   

"... it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt: but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded."

1. In the present appeal, Mr. Hughes QC for the appellant emphasised the context of the article as a whole, in which context the reference to the appellant was set. The words in the headline "Cosy in the corridors of power", (echoed in the last line of the article, "Cosy but nasty") bring to the article a degree of imprecision, ambiguity or looseness of the kind to which Mason J referred in Harrison. They indicate to the reader that the author was concerned about a situation in which some of those who held high office in government service did so in conditions which assured comfort and security to them but after having attained such office in circumstances which right-thinking persons would consider morally questionable. The headline appears alongside the cartoon with its graphic suggestion that Mr. Hawke stands behind the rapid rise of those who achieve the sort of power the subject of the article.

2. Other examples of looseness of expression occur within the article: for instance, the reference in para.18 to the "intriguing" constancy of the Prime Minister's office having the status of a "transit house" for people progressing through the senior ranks of the Public Service, the question in para.21 "a great career path, isn't it?", the reference to "another coincidence" in para.29. The latter reference indeed is so vague and ambiguous as to be almost meaningless, except to the extent that it suggests that the author's use of irony conveys the opinion that there is something sinister in the selection of Mr. Barron and Mr. Sorby to the Prime Minister's staff and in the appointment of Senator Richardson as Minister for Social Security.

3. It should be borne in mind that the ordinary reader of the article was not likely to be the reader typical of the whole of the readership of the newspaper. By the time the reader reaches para.8 or 9, it is obvious that the article is descending into a great deal of particular detail about individual persons and departments within the Public Service who were not likely to be widely known among the general public. It is unlikely that anybody would read as far as para.22 who did not have more than an ordinary interest in the Australian Public Service and federal ministers. It was a reader with that particular sort of interest and familiarity who would be expected to persevere to read as far as the first reference to the appellant at para.22 and beyond. That reader would have a modest fund of knowledge about the workings of government and about appointments to and within the public service. That reader would expect that, whilst promotion would depend on merit, the concept of merit for promotion to the very highest levels would be an elastic one. The reader was likely to have an interest in and perhaps a sketchy knowledge of the reorganisation of the Australian Public Service in 1987 and of reallocation of portfolios among Ministers, but not of the careers of the various public servants mentioned. The reader would be unlikely to think that there was anything particularly remarkable about experience in the Prime Minister's Department or the support of the head of that Department being regarded as being relevant in the assessment of merit for such purposes. The reader may have regarded the possible influence of the Prime Minister on the careers of some of the persons mentioned as being of interest However, even the reader with the interest and knowledge mentioned would not subject the article to the detailed and critical examination to which it was subjected in the Supreme Court and in this Court in the hearing of the appeal.

4. The tone of the article is set in its treatment of the first of the topics with which it deals. That topic concerns a speech said to have been made by the then Prime Minister at a party to celebrate the victory of the Labor Party at the 1990 federal general election. The Prime Minister is said to have bestowed "extravagant" praise on a public servant, who had been seconded to become one of the members of his personal staff, in respect of his meritorious service during the election campaign but to have made no reference to the efforts of another staff member who, in the eyes of those referred to as "insiders", was thought to be equally, if not more deserving, of praise. The ordinary reasonable reader was invited to draw the conclusion the Prime Minister did not treat merit as the sole criterion for the bestowal of praise.

5. The same theme is carried forward into a later part of the article which deals with the career paths after leaving his service of those who had been members of the Prime Minister's personal staff. The then Prime Minister's office is described as having "status as a transit house for those who pass through on their way to bigger and better things". Particular attention is paid in the article to officers of the Australian Public Service who had served for a time on the Prime Minister's personal staff. Each of those officers is said to have been promoted to a very senior position in the Australian Public Service or to have been appointed as the Secretary to a Department of State. The article does not suggest that the officers concerned lacked the competence or the necessary qualifications for the positions to which they were promoted or appointed but it invites the reader to speculate how the relevant procedures could have resulted in so many of such officers being selected for advancement. The suggestion seems to be that the selections cannot be explained simply as a series of coincidences and could not have been made solely on merit. The reader is invited to conclude that an element in the selection was the influence of the Prime Minister or of the successive holders, identified in the article, of the office of Secretary to the Department of the Prime Minister and Cabinet. The article would convey to the ordinary reasonable reader that the relevant procedures had been manipulated in an undesirable, even in an improper though unidentified, manner so as to ensure that the careers of officers who had served on the Prime Minister's personal staff were advanced.

6. The appellant is identified in the article as one of the group who have been beneficiaries of the system. The appellant is said to have benefited on three occasions. The first was when he was appointed as Secretary to the Department of Resources and Energy. The second occurred in 1987 when he became the Secretary to the Department of Primary Industries and Energy contrary, so the article asserts, to the wishes of the then Minister of that Department, Mr. Kerin. The third occasion was when Cabinet "accommodated" the appellant by appointing him as head of the Department of Transport and Communications.

7. With this synopsis of the most relevant parts of the article in mind, it is necessary to return to the issue raised by the appeal, namely whether the trial judge erred in finding that imputations (b), (c) and (d) as set out earlier in these reasons were not established.

Imputation (b)
29. The reader is informed in para.23 that the appellant was appointed from the Department of Foreign Affairs to the position of the Prime Minister's original Principal Private Secretary in 1983, was appointed by Cabinet as departmental head of "Energy and Resources" three years later, and appointed to the "top job" in the combined Primary Industries and Energy portfolio in 1987 after re-organisation of the Public Service structure by the Prime Minister and the head of his Department. Although there are some factual errors in that information, it was not argued that para.23 was defamatory.

1. Paragraph 24 immediately focuses on the relationship between the appellant and his Minister in the amalgamated department and his further appointment to the position of head of the Department of Transport and Communications. The allegation is that the relationship between the appellant and the Minister was such that they did not get on and as a consequence the appellant was "accommodated" by Cabinet and moved to the other department. The statement that the two men did not "get on" is vague and, as Mr. Hughes submitted, vagueness has to be considered in the context of intrigue and suspicion set by the earlier paragraphs of the article and the context of the article as a whole. However, the imputation relied on is that the appellant lacked the confidence of his Minister, not that they simply did not "get on" together.

2. According to the ordinary meaning of the words, which are in common use, the statement that the two men did not "get on" implies that there were personal differences between them which led to difficulties and stresses within their relationship. Blame for this situation is not attributed to one man or the other. No reasonable reader is likely to think the less of the appellant in this regard. The further statement that the appellant had to be "accommodated" by a move to another Department by Cabinet says nothing about any lack of confidence on the part of the Minister.

3. If imputation (b) were simply that the appellant lacked the confidence of his Minister, then it would be so wide that it would be difficult to discern any defamatory effect or tendency. However, the reference is restricted to that relating to the appellant in his capacity as Secretary to the Department and to that extent it links the alleged lack of confidence to the appellant's position of Secretary. Even so, the suggested meaning can have relevance to the general thrust of the article only if the reader takes the meaning to be that the Minister lacked confidence in the appellant's competence as Secretary or in his integrity or in both.

4. The ordinary reader would know that, as a matter of human experience, the failure of people to "get on" with others is due to an almost infinite variety of reasons. The assertion that the appellant and the Minister did not "get on" is preceded and followed immediately by what the reader would take to be an explanation: the Minister had preferred his previous head of department rather than the appellant to be head of the new amalgamated department. The Minister in this regard had been overruled by those responsible for the re-organisation of the Public Service structure. That re-organisation had resulted in the amalgamation of departments and the appointment of the appellant as head of one of the amalgamated departments, the one for which Mr. Kerin was the responsible Minister. In those circumstances, the reader would not be surprised to learn that the Minister and the departmental head appointed for him did not "get on" and that the relationship never improved during the relatively short time during which the appellant remained in that position. But the reader would not take the further step of inferring that the stress in the relationship, the failure to "get on", was due to the Minister lacking confidence in the appellant's ability to perform the duties of the office or in the appellant's integrity. The reader's knowledge that such stresses in human relationships, even between Minister and departmental head, are of great variety and complexity would stand in the way of the reader taking the article to mean that Mr. Kerin lacked confidence in the appellant's capacity as departmental head or in his integrity.

5. The trial judge was correct in finding that imputation (b) was not made out.

Imputation (c)
35. There appear to be four propositions contained within this imputation:

1. That the appellant had a successful career in the Public Service.

2. That his success was due to a number of factors, one factor being his enjoyment of a system of patronage.

3. That the system was "nasty".

4. That the appellant's enjoyment of the system of patronage was more influential than any other in its contribution to his success.

1. There is little difficulty in seeing that the reader would have read the article to mean that the appellant had achieved success in his Public Service career and that patronage had occurred with respect to appointments at a senior level within the Public Service during the time of his career. There is not much difficulty in seeing further that the article meant to the reader that this element of patronage had been "enjoyed" by the appellant, to the extent that he was the recipient of its benefits. The issue is whether the reader would take the article to mean that the appellant's enjoyment was of a "nasty" type of patronage. The pejorative flavour and the indeterminate content of the word "nasty" does not help answer the question, but as the article employs the word itself in the last hard-hitting and conspicuous one line paragraph, the publishers are unable to avoid the effect of its pervasiveness. The imputation that the system of patronage was "nasty" is made out.

2. The ultimate question relating to imputation (c) is whether the reader would take the article to mean that the enjoyment of this particular type of patronage contributed more than anything else to the appellant's success in his Public Service career. The submission on behalf of the appellant relied heavily on the statement in the article that as a result of the failure of the relationship between the appellant and Mr. Kerin, Cabinet "accommodated" the appellant by appointing him head of the Department of Transport and Communications, for which the responsible Minister was Senator Evans, the appellant's "old ministerial boss". The article goes on to refer to "Evans major and Evans minor" having worked together in "Energy and Resources" before the 1987 reorganisation. Finally, explicit reference to the appellant follows in which Mr. Conybeare is stated to have followed the appellant both into the Prime Minister's office and "up the escalator to departmental head status". The article moves on to describe the careers of "other old Hawke faithfuls" who "haven't done badly either".

3. The word "accommodate" is likely to have been taken in its ordinary sense, in the context, of extending a kindness or favour. Such accommodation is extended to a recipient by the person conferring the favour; without more, the recipient plays no more than a passive role, a role which is consistent with being no more than the object of patronage. But there is nothing in the assertion that the person said to be the recipient of a favour or the object of patronage in the course of a successful career owes that success in the career to the favour or the patronage more than to other factors. In particular there is no warrant for the reader to infer that it was alleged in the article that the appellant lacked sufficient competence and experience to justify his progress within the Public Service or his continuing to occupy high office there. There is nothing in the article to suggest that the appellant somehow connived or encouraged or was in anyway party to decisions relating to his career which he knew would be made not because of his talents and experience but because he was being extended a favour which his personal qualities and suitability for appointment did not justify.

4. It was submitted on behalf of the appellant that the reader would know that "kings play favourites" and that the article had running through it a theme of that nature which the reader would take to mean that progress in the appellant's career was owed to his association from the early years of his career with the Prime Minister, Mr. Hawke, and with the Prime Minister's Department. Assuming this to be so, it is a considerable leap from an acknowledgment that the appellant served in the Prime Minister's Department and was well known to the Prime Minister to a conclusion that the appellant's success in his career was not justified by his experience and capacity. His service in the Prime Minister's Department would, in the expectation of the ordinary reader of this article, be as likely to give him positive and legitimate qualities for advancement as to make him the object of unjustified favours. His association with the Prime Minister would be seen as no less likely to lead to the Prime Minister recognizing the appellant's capacity than it would be to entice the Prime Minister or others under his influence to arrange unmerited promotion of the appellant. Imputation (c) has not been made out.

Imputation (d)
40. At the appeal the appellant neither abandoned nor pressed reliance on the imputation that he "was prepared to advance his career through cronyism rather than on the merits of the performance of his duties". This is little more than a re-statement of imputation (c). The term "cronyism" replaces that of "a nasty system of patronage". Comparison is made explicitly with the meritorious performance of duties instead of with other factors generally. What has been said above with regard to imputation (c) applies. Imputation (d) is not made out.

Costs
41. The trial judge decided that there should be no order for costs in favour of any party. The effect was that the respondents, although successful in obtaining judgment against the appellant, were deprived of an order for costs in their favour. They have lodged a cross-appeal against the trial judge's decision as to costs and, the appeal being unsuccessful, this Court has to consider and determine the cross-appeal.

1. The power of the Supreme Court to award costs is found in s.23 of the Supreme Court Act 1933 (ACT), the relevant parts of which provide as follows:
   

"Costs

23.(1) The Court shall have jurisdiction to award costs in all matters brought before the Court, including matters dismissed for want of jurisdiction.

(2) Subject to any other law of the Territory (including Rules of Court), the Court may determine -

(a) the amount of costs of and incidental to proceedings in the Court, including the administration of an estate or trust; and

(b) by whom and to what extent such costs are to be paid.

(3) Nothing in this section shall alter the practice which would otherwise be followed in any criminal cause or matter or in proceedings on the Crown side of the Court."

1. Order 65 r.1(1) of the ACT Supreme Court Rules provides:
   

Costs, with certain exceptions, to be in the discretion of the Court 1.(1) Subject to the provisions of any Act and these Rules, the costs of and incidental to all proceedings in the Court, and in Chambers, including the administration of estates and trusts, shall be in the discretion of the Court.

1. This provision is in terms identical for practical purposes with sub-s.43(2) of the Federal Court of Australia Act 1976 which provides as follows:
   

"(2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge."

1. Despite the terms of provisions like O.65 r.1 in many jurisdictions in Australia, there is a general expectation that in civil cases costs follow the event and that a successful party will obtain an order for costs in favour of that party: see Latoudis v. Casey (1990) 170 CLR 534 at 543, 561.

2. However, whatever the practice, the words of the rule are clear and the trial judge had a discretion to make no order as to costs. This Court will not set aside a discretionary decision of that nature unless it is shown to be based on some error or is so manifestly unjust that error is to be implied.

3. From the trial judge's reasons for his decision on costs, it appears that two factors in particular led him to the conclusion that there should be no order as to costs. One factor was the failure of the respondents to reply to a letter of demand for an apology written on the appellant's behalf on 18 April 1990. The trial judge considered that the letter should have prompted a proper response and that the entire litigation may have been avoided had the respondents published a correction of certain statements in the article, thereby providing "a suitable and true vindication of the plaintiff's reputation".

4. Whilst the possibility could not be excluded that an apology may have avoided the litigation, the evidence did not suggest that it was a strong likelihood. Furthermore, the appellant was not seeking merely an apology, as the following exchange in cross-examination suggests:
   

"It is right to say is it not that you certainly had in mind from the time that you instructed your solicitors and that the letter was written on 18 April to bring proceedings against the newspaper? -- What I had hoped was that the newspaper would agree to tender an apology and damages and that would be the end of the matter.

Tendering an apology and damages? -- Well, my legal costs.

But it was certainly in your contemplation that if that didn't happen that you would institute proceedings, was it not? -- I knew that that - if there was not an apology tendered I would have to consider that option. I did not take a decision on whether to proceed, in fact, to institute proceedings for some time after that."

1. It is difficult to see why the possibility that a defendant might have taken a course which would have avoided the litigation should necessarily deprive the defendant of costs where the defendant is successful following a hearing on the merits, as in the present case. In this respect the trial judge appears to have taken the view that if the appellant had cast his case differently, he might have been successful. In his reasons for judgment on liability, the trial judge canvassed the possibility that different imputations might have been relied upon and that a true innuendo might have been pleaded. The trial judge said that his conclusion that he was precluded from finding for the appellant on a true innuendo was "regrettable".

2. The other factor which influenced the trial judge on the question of costs was his view that the statement in the publication that the appellant and Mr. Kerin "did not get on" was a lie and that it was necessary for the appellant to commence litigation in order to "nail the lie". However, whilst it is true that after publication the respondents were presented with a letter from Mr. Kerin denying the allegation relating to the nature of the relationship between himself and the appellant, there is no evidence that the respondents at any previous time were aware, or should have been aware, of the contents of Mr. Kerin's letter or of his attitude. The truth of the publication was not in issue. There was no evidence that the statement in question was a lie.

3. Since the decision in the Supreme Court, this Court has handed down its judgment in Humphries v. TWT Limited (unreported, 3 December 1993). According to the judgment of the Court a correction of an error contained in a defamatory publication, or an apology, or a combination of both, does not vindicate the plaintiff's reputation in the same way or to the same extent as a judgment of a court in favour of a plaintiff. Hence a plaintiff does not have to rest content with a published apology, and an apology does not stand in the way of an award of substantial damages for injury to reputation or injury to feelings. The principle so stated runs contrary to the hypothesis presented in the present case that an apology may have avoided litigation.

4. The decision on costs in the Supreme Court does not appear to be based on a finding that the respondents had unnecessarily prolonged the hearing, although the trial judge did mention that a plea of qualified privilege was abandoned on the day of the commencement of the hearing and that publication, which was within the knowledge of the first respondent and admitted in answers to interrogatories, was put in issue. On the other hand, it should be observed that the appellant's claim for exemplary damages was not abandoned until the end of the appellant's case. It would not have been proper to deprive the respondents of costs for the way in which they conducted the litigation.

5. The decision not to award costs against the appellant was based on erroneous grounds. This Court must determine the matter of costs of the trial for itself. No reason has been demonstrated why the ordinary rule of practice should not be applied and costs follow the event. The appellant should pay the respondents' costs of the proceedings in the Supreme Court.

Notice of contention
54. The trial judge made some brief findings on the question of damages and fixed the sum which he would have awarded if the appellant had recovered judgment. The respondent has filed a notice of contention challenging certain of the findings and the sum fixed. No doubt the trial judge intended to be of assistance to the parties in reaching some compromise should the judgment against the plaintiff be set aside. However, in the event, the respondents maintain the judgment in their favour. It is not open to this Court to consider the findings on damages or the provisional award of damages.

Costs of appeal
55. No reason was advanced why the costs of the proceedings in this Court should not follow the event. The respondents have been successful in resisting the appeal and in prosecuting the cross-appeal and should have their costs.

1. The following orders should be made:
   

1. The appeal is dismissed.

2. The cross-appeal is allowed, the order of the Supreme Court that there be no order as to costs be set aside and, in lieu thereof, it be ordered that the appellant pay the respondents' costs of and incidental to the proceedings in that Court.

3. The appellant pay the respondents' costs of the appeal and cross-appeal.