Feo v Pioneer Concrete (Vic) Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL Not Restricted

No. 8169 of 1994

JOHN FEO & JOHN FEO TRANSPORT PTY.LTD.

Appellants

PIONEER CONCRETE (VIC) PTY. LTD. & ORS.

Respondents

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JUDGES:	WINNEKE, P., CALLAWAY and BATT, JJ.A.
WHERE HELD:	MELBOURNE
DATES OF HEARING:	26 and 27 October 1999
DATE OF JUDGMENT:	12 November 1999
MEDIA NEUTRAL CITATION:	[1999] VSCA 180

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Defamation – Slander – Qualified privilege – Malice – Slander of a corporation in the way of its business actionable per se – Appeal against trial judge’s findings of fact – Trial judge’s advantage of seeing witnesses.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr. D.B. Baker	Peter H. Cash
For the Respondents	Mr. A.A. Monichino	Cornwall Stodart
WINNEKE, P.

The appellants John Feo and John Feo Transport Pty. Ltd. (whom I shall variously call “Feo”, “the appellants” or “the defendants”) were defendants to defamation proceedings brought against them in the Supreme Court by the respondents Pioneer Concrete (Vic) Pty. Ltd. (“Pioneer”); John William Forbes and Jim David Rowlands (in these reasons, they will be variously described by name or as “respondents” or “plaintiffs”). At the trial it was alleged that the first named appellant, acting for and on behalf of his transport company (the second appellant) published 6 separate slanders of and concerning the respondents between late 1993 and August 1994. It was contended that the gist of the slanders against the respondent company was that its practices in allotting cartage work to its contractors were riddled with corruption. It was further alleged that the gist of the slanders uttered against the personal respondents was that they, as senior executive officers of the respondent company or its holding company, had participated in the corrupt practices of the company and had received secret commissions for favours granted.
In accordance with reasons given on 18 December 1997, Southwell, J. found in favour of each respondent. He found that the words published by Feo were untrue and defamatory of each of them and were not spoken on occasions of privilege and that, even if they were, the privilege was defeated by malice. He further found that, because the words were calculated to disparage the respondent company in its trade or business by reflecting on the management of that business, the slanders were actionable at its suit in the absence of proof of special damage. Likewise his Honour found that the defamatory utterances against the individual respondents were actionable per se because the words spoken were calculated to injure those respondents not only in the way of their trade or calling, but by suggesting that they had engaged in criminal conduct.
His Honour’s findings translated into awards of damages as follows:
(a)        The Respondent Company
His Honour found that four of the slanders (which were described as “the Temby Slander”, “the second Temby Slander”, “the Stagnitti Slander” and “the second Casey Slander”) were actionable at the suit of the respondent company. He awarded sums of $1,500, $1,000, $2,000 and $1,000 respectively for each defamation making a total of $5,500. His Honour awarded total interest on those damages of $1,400.
(b)        Rowlands
His Honour found that four of the slanders (namely “the Temby Slander”, “the second Temby Slander”, “the Stagnitti Slander” and the “Susan Stagnitti Slander”) were defamatory of the respondent Rowlands. His Honour awarded damages (including “aggravated damages”) for these respective defamations in sums of $5,000, $4,000, $6,000 and $2,000, making a total award of $17,000, to which was added a total sum of $3,150 for interest.
(c)         Forbes
His Honour found that five of the slanders were actionable at the suit of Forbes. He nominated these as “the second Temby Slander”, “the Stagnitti Slander”, “the Casey Slander”, “the second Casey Slander” and the “Susan Stagnitti Slander”. He awarded damages (including “aggravated damages”) respectively in the sums of $6,000, $6,000, $6,000, $1,000 and $2,000 making a total sum of $21,000 to which total interest was added of $4,600.
Following the delivery of judgment there was a debate between the parties on the question of costs. Counsel for the respondents (plaintiffs) asked his Honour to award costs in favour of the plaintiffs and to order those costs to be taxed on the Supreme Court Scale notwithstanding the provisions of Rule 63.24 (1) of the General Rules of Procedure in Civil Proceedings 1996. The Rule requires that “unless the Court otherwise orders”, where the plaintiff has recovered damages of an amount not more than one half the amount which the County Court has jurisdiction to award, the plaintiff is to be entitled only to costs taxed on the relevant County Court scale, less an allowance for additional costs incurred by the defendants by reason of the proceedings having been brought in the Supreme Court. Even adding together the award of damages made in favour of each plaintiff, it was conceded that the total fell well below half of the limit of the County Court’s jurisdiction. Notwithstanding, his Honour exercised his discretion in favour of the plaintiffs, and ordered their costs to be paid on the Supreme Court scale.
The amended Notice of Appeal is unsatisfactory in form. It recites that the appellants intend to appeal against the whole of his Honour’s judgment without stating what this Court should order in the event that the appeal is allowed. There are 8 grounds of appeal stipulated in the notice but at the outset of the hearing we were informed by counsel that grounds 4, 5, 6 and 8 (relating to certain evidentiary and procedural rulings made by the trial judge and a subsidiary costs issue) are no longer persisted in and are abandoned. The grounds relied upon were, thus, confined to grounds 1, 2, 3 and 7. They are, relevantly, as follows:

“1. The … judge erred in finding against the evidence, … that there was no significant difference in form and substance between the pleaded words and the first and second slanders (the “Temby Slander” and the “Second Temby Slander”) … and the third slander (the “Stagnitti Slander”) and the sixth slander (the “Susan Stagnitti Slander”).
2. The learned judge erred in law in finding that the fourth slander (the “Casey Slander”) and the fifth slander (“the Second Casey Slander”) were not published on an occasion of qualified privilege and that, further, the learned judge erred in finding actual malice … .
3. The learned judge erred in law in finding that each of the slanders of Pioneer … were actionable slanders without proof of special damages [sic].
7. The learned judge erred in law and in the exercise of his discretion in ordering that costs be taxed on the Supreme Court Scale and not pursuant to rule 63.24 of the [Rules].”

Ground 7
On the hearing of the appeal, counsel for the appellants conceded that ground 7 (the “costs appeal”) required the court’s leave before it could be argued (s.17A(1)(b) Supreme Court Act 1986). Accordingly a summons seeking such leave was filed, supported by an affidavit sworn by the first appellant. Counsel for the respondents opposed the application for leave and, after hearing argument, the Court refused its leave and said that it would give brief reasons for doing so when it published its reasons for judgment. The sole ground upon which leave was sought was that the judge had erred in the exercise of the discretion given by Rule 63.24 of the Supreme Court Rules by concluding that it had been open to the appellants to have the proceedings transferred to the County Court pursuant to the Courts (Case Transfer) Act 1991 and the rules made pursuant to that Act. The appellants wished to contend that s.30(2)(b) of the Act would have precluded such a course of action. I joined in the Court’s order refusing leave for a number of reasons. First, this Court has frequently said that good cause will need to be shown before its leave will be given pursuant to s.17A(1)(b) of the Act to appeal against a trial judge’s discretionary order as to costs. The reasons for the Court’s practice were adverted to by Batt, J.A. in Etna & Anor. v. Arif & Ors [1999] VSCA 99 at [60]-[68]. In particular will the Court be slow to grant its leave where, as here, the basis upon which leave is sought was not argued before the trial judge. The trial judge is the person best equipped to decide questions of costs, but he can only do it on the basis of arguments put before him by counsel. In any event, the judge did not found his decision solely on the basis of the point now raised and, for my own part, I was not persuaded, following argument in this Court, that it had been clearly demonstrated that his Honour was in error in exercising his discretion in the manner in which he did.
Accordingly, the only grounds which were argued before us were grounds 1,
2 and 3.
The Facts
Before considering the grounds of appeal, it is necessary to turn briefly to the facts, as disclosed in evidence, and found by the trial judge.
The “Pioneer Group” of companies is a large manufacturer of concrete for pouring and, for that purpose, owns and operates quarries throughout the country. The respondent company is a member of the Group and, relevantly, it engages in activities in Victoria which involve the quarrying of sand and stone and the movement of those materials to batching plants, including plants at Werribee and Geelong. For these purposes it uses a large number of tip-trucks – some which it owns and operates and others provided by contractors who are either retained on a “fixed” contract basis or casually engaged.
The appellants (Mr. Feo and his company) were, from 1992, engaged by the respondent company as cartage contractors on a “fixed contract”. Some years before he obtained that contract, Feo had been engaged as an “owner-driver” of his truck on contract to Enzo Transport, which in turn had a contract from Pioneer. It seems that in the course of carrying out his duties for Enzo between 1988 and 1992, Feo became aware of certain activities which suggested that an executive of Pioneer (one Montgomery) was engaging in improper dealings with Enzo. As a result of the information provided by Feo, Enzo lost its contract and Montgomery and other personnel employed by Pioneer had their services terminated. The respondent, Rowlands, who was then general manager of the “Quarry Group” regarded Feo’s information as “valuable” to the company and offered the appellants a “fixed contract” for 4 years with an option for a further 2↔ years. The routes, which the contract specified were to be worked by the appellants, were routes to be “shared” with another contract carter of which one Krestas was the proprietor.
His Honour found that it did not take long for Feo to form a belief that he was receiving less favourable treatment in the manner in which the respondent company was allocating work – both as to the number of trips allocated and the manner of allocation. In his Honour’s view – and he heard the witnesses including Feo – Feo became obsessed with the idea that corruption was rife throughout the company, and that such corruption spread to its senior executives, specifically Rowlands and Forbes. This belief in respect of the former stood in stark contrast to the view which Feo had formed of Rowlands in October 1992 when he had written of his “honesty and integrity”.
By mid 1993, as his Honour found, Rowlands had been informed of 12 to 14 occasions upon which Feo had made allegations of “bad practice” within the company and which had been made to and about employees and officers of the company. Rowlands determined to speak to Feo but was unable to do so. He then compiled a facsimile to him in strong words on 15 June 1993 in which, inter alia, he wrote:
“I have had enough of your use of my name in threats being made to personnel in the transport division. I am satisfied of the integrity of the people involved in this division and will not have you canvassing your misguided beliefs any longer. …
You are almost the highest earner of all time within the company, a fact you don’t seem to appreciate. Cause me any more of your stupid trouble and I will make you the lowest earner faster than you could imagine. …”
Feo made no response to these asseverations.
Shortly after these events Feo telephoned one Moschini, the company’s area manager in the North and Western Regions and told him that the Transport Manager, one Sawry, was “on the take” and that Rowlands was “turning a blind eye”. Moschini, and his immediate superior, Paul Casey, went to see Feo. According to Moschini the allegations were repeated. Feo produced the “warning” which he had received from Rowlands. Casey also gave a version of this conversation which his Honour found was “substantially accurate”. Casey said that Feo’s allegation was that he had information against Rowlands, Forbes, Krestas and Sawry, who, so he maintained, were in “a corrupt alliance”. His Honour regarded Casey as “an entirely reliable witness” and rejected the evidence of Feo when he denied that, in this conversation, he had mentioned corrupt practices.
The Alleged Slanders
These were the background events against which the alleged slanders, relied upon by the respondents, were published. It is necessary to refer briefly to those allegations, the evidence given in respect of them and the judge’s findings.
The “first Temby Slander”
It was alleged that, on 16 December 1993, Feo had rung Peter Temby, a radio operator with the respondent company, and said words to the effect:
“… there are corrupt activities going on in Pioneer, Peter. Jim Rowlands, Hamelex, Denis Sawry, Ferris and Frank Duck are all in it together.”
Temby gave evidence which was, as his Honour found, “substantially to the same effect” as the words pleaded. He rejected a submission that there were significant differences. No point is now made about his Honour’s finding in that regard.
The “second Temby Slander”
Temby had reported the contents of the call of the 16 December to his superior, Connell. On 18 December 1993, when Feo again called Temby, asking him to call Feo back “after work” to discuss ”corrupt practices”, Connell arranged for the return call to be made on a “hands free phone” at Pioneer and that he and one Sergeant would listen. Connell made notes. Thus, the conversation occurred. The pleaded allegation was that Feo said words to the effect:
“Peter, there’s a lot of corruption going on within Pioneer. … Rowlands and Forbes are on the take. I’m working for Dr. Schubert (the Chief Executive Officer of the holding company) investigating corruption within Pioneer. … I’ve got proof and if you’d like to see it I can prove it.”
Temby and Connell gave evidence that Feo had uttered words substantially in the terms pleaded. Feo, in his evidence, denied that he had used words referring to corruption or that he had said that Rowlands and Forbes were “on the take”.
On 21 January 1994 Connell made what he called a short and concise report on the first and second “Temby” conversations, using his notes of the second conversation. This report was tendered and became Exhibit 3 at the trial. It was submitted to his Honour that he should not be prepared to find that Feo had used the words alleged because the “report” did not state in terms that Feo had accused Rowlands and Forbes of being “on the take”. His Honour rejected this submission.
The “Stagnitti Slander”; 26 May 1994
Mr. and Mrs. Stagnitti were proprietors of a company which owned a truck. Mr. Stagnitti was the driver. In 1988 he had worked for Enzo Transport which lost its contract with Pioneer in the circumstances previously referred to. In 1993 Stagnitti approached Pioneer and asked whether, on the basis that he purchased a new truck, he could get some more work. It appears that, although no promises were made, he in fact bought a new truck. In 1993, whilst he was doing some work for Pioneer, he met up with Feo who had told him that he (Stagnitti) had been “set- up” by Pioneer, that Rowlands was “a crook” and that Sawry, Hamelex and Ferris were all corrupting the company. (Hamelex, a company, and Ferris were contractors). Stagnitti reported this conversation to his wife who, thinking there was something in it, spoke to Forbes who referred her to Rowlands. Rowlands, she said, seemed to want to help and referred her to one Carrucan, the Victorian Manager of the quarry division.
Commencing early in 1994, Feo regularly rang Mrs. Stagnitti at home. She said his recurring complaint was that Rowlands and Forbes and “everyone at Pioneer” was corrupt. Rowlands and Forbes were “crooks”. He asked Mrs. Stagnitti to assist him in getting information. Feo said that Rowlands was “on the take”, that he had a “mistress” and that his daughter “had died of an overdose”. As his Honour noted, these latter allegations were the subject of unchallenged denials given by Rowlands on the trial.
On 26 May 1994 Feo rang and spoke to Mrs. Stagnitti and asked if Mr. Stagnitti could listen in on the “other line”. Thereafter Feo used words which were the subject of the “Stagnitti slander” and in respect of which, as his Honour found, the Stagnittis’ evidence was in substantially the same terms as the slander pleaded. Inter alia, according to Mr. and Mrs. Stagnitti, Feo said that Rowlands and Forbes were crooks, that they were being “paid off” by Krestas, that they and others were corrupt, that he was going to the Australian Securities Commission (“ASC”), and that “Pioneer was the biggest corruption place you could ever work for”. Mrs. Stagnitti was interviewed by a solicitor for Pioneer on two occasions shortly after this conversation and notes of those interviews became Exhibit 4.
In his evidence, Feo admitted making many calls to Mrs. Stagnitti but denied making any call on 26 May and further denied making any of the statements alleged. It was submitted to his Honour at trial that, having regard to what were described as “significant differences” between the notes of interview and the words alleged to have been used by Feo in the alleged conversation of 26 May, his Honour should not find that those words had been published. His Honour refused to accede to the submission and found that the words had been published.
The “Casey Slander” and the “Second Casey Slander” (15 June 1994 and 16 June 1994)
In response to a request, Paul Casey telephoned Feo on 15 June. This was some 12 months after Casey had last spoken to Feo. Casey said that Feo asked him whether he was “calling from a mobile”; he wanted to know because Rowlands could monitor such calls by reference to records. He then alleged that, 4 years previously, 120 cubic metres of concrete had left the Werribee plant without being recorded. He then referred to Krestas and continued:
“Krestas got his job back with Pioneer because he knew John Forbes, Rowlands and Mario Gulino (another contractor). Did you know that Krestas paid big money to John Forbes to get his job back? Did you know that Stagnitti’s wife had rung John Forbes? Stagnitti is a sub- contractor involved with Rowlands and Sawry. After the phone call, Stagnitti got his job back. Rowlands is plotting against me and is definitely out to get me. I gave him confidential information about the people stealing from Pioneer Quarries and then he has gone to these same people and told them what I told him.”
Casey had to terminate the conversation because he had another engagement. Feo asked him to call him back the next day. Casey, after reporting the substance of the call to Rowlands, was told to keep notes of the return call. He then arranged for Moschini to be present when he called the next day. In Moschini’s presence he rang Feo on 16 June 1994. The conversation was fairly lengthy but, in the course of it, he said that Feo made the following statements (the “Second Casey slander”):
“Krestas paid big money to John Forbes to get his job back. Rowlands
is out to get me.
Give them a message from me. If they don’t ‘get off my back’, then I am going to the Commission, you know the A.S.C. I’ve got information on Pioneer that I know they would be interested in.”
Casey said that Feo had repeated the allegations he had made in the previous call.

Feo, in his evidence, did not significantly dispute the terms of these publications, but said that he had made the allegations in the second call, and not in the first. (Feo’s version of the conversation, in terms approximating Casey’s evidence, was set out in the appellants’ “further amended defence” filed pursuant to order of the trial judge on 8 December 1997 – paragraph 25.2). Feo said however that the words “Krestas paid big money to John Forbes to get his job back” were preceded by the words “Susan Stagnitti told me that …”. His Honour found that the words were spoken on the occasions and in the manner deposed to by Casey.
The “Susan Stagnitti Slander” – August 1994
There was evidence that, between June 1994 and August 1994, Feo had continued to make allegations and complained that the allocation of work between him and Krestas was unfair. On 12 July, Geoff Wakeman, Pioneer’s Transport Manager, returned from holidays to be informed by staff that Feo had been abusing the company staff. He wrote to Feo and told him that his truck would be “stood down” for a week. In August, Feo called Mrs. Stagnitti. The conversation was said to contain the sixth slander (the “Susan Stagnitti Slander). According to Mrs. Stagnitti, Feo said (inter alia):
“I have mentioned your names to the auditor. They will ring you. I have told them that it came from you that the Mafia had told you that Forbes and Jim Rowlands were on the take … .”
Shortly after this publication, the respondent company reacted and terminated the appellant’s contract on the ground of breaches which included particulars of the defamatory statements. On 4 October 1994, the present proceedings were issued.
In the light of the facts as found, it is appropriate now to turn to the grounds of appeal which remain.
Ground 1
It is not entirely clear to me what is the meaning or consequence of this ground. On its face it appears to put in issue his Honour’s findings, in respect of four alleged slanders that there was “no significant difference in form and substance” between the words pleaded and those proved. However, during the course of the hearing, it became clear that the appellants were only challenging his Honour’s findings in respect of the “Second Temby Slander” and the “Stagnitti Slander”. It was the appellants’ submission that, on the evidence before him, his Honour should not have found that any words spoken by the first appellant on those two occasions bore a meaning defamatory of the respondents. It seems to me that it is only by a charitable construction of the ground of appeal that it can be said that this submission falls within it. Counsel for the respondents raised no objection to the submission being made and, accordingly, the Court entertained it.
Essentially, the appellants’ argument is that his Honour’s findings of fact in relation to the “second Temby slander” and the “Stagnitti slander” were against the evidence and the weight of the evidence, because that evidence did not entitle him to find that the defamatory “sting” or substance pleaded in respect of these slanders had in fact been proved. It was submitted that the “most reliable evidence” which his Honour had before him in respect of the words used in the “second Temby slander” was the written memorandum which had been made by Connell on 21 January 1994 which purported to set out, inter alia, a record of the conversation which had occurred on the 18 December 1993 (Exhibit 3). Because this memorandum did not specifically refer to the statement said to have been made by Feo that “Rowlands and Forbes are on the take”, and did not even mention Forbes, it was not open to the judge to have found, as he did, that these words were spoken. Because the words, so it was submitted, were the only words alleged which could have been defamatory of Rowlands and Forbes, his Honour should have found that the words uttered on that occasion were not defamatory of the individual respondents. In similar fashion, it was submitted that the “most reliable” evidence which his Honour had before him in respect of the “Stagnitti slander” on 26 May 1994 was to be found in the notes of the recorded interview which Susan Stagnitti conducted with the solicitor on 31 May (Exhibit 4). It was submitted that, because there was no specific reference in these notes to the alleged defamatory statements as having been made on 26 May 1994 – as distinct from other occasions upon which it was recorded that such words had been uttered - it was not open to the judge to find that words defamatory of Rowlands and Forbes had been uttered on this occasion. Counsel laid particular emphasis on the evidence of Connell that he had listened to the conversation of 18 December with a view to being a witness, and on the evidence of Mrs. Stagnitti that she had been aware that her interview was being recorded for legal purposes.
It is no longer the law that it is necessary, in order to prove an actionable slander, for the precise words alleged in the statement of claim to be proved with precision by a plaintiff, provided that the plaintiff has proved that a material and defamatory part of them has been published or that words to substantially the same effect were published. It is enough if the plaintiff proves that words were published which conveyed to the mind of a reasonable listener the meaning of the words pleaded (Tournier v. National Provincial & Union Bank of England [1924] 1 K.B. 461 at 478 per Scrutton, L.J.; 487-8 per Atkin, L.J.).
In giving evidence about the conversation of 18 December 1993 (the “second Temby slander”) both Temby and Connell deposed to the fact that Feo had uttered words substantially in accordance with those which were alleged – namely that corruption was rife within the company, that Forbes and Rowlands were “on the take” and that he (Feo) had been retained by Dr. Schubert (the Chief Executive Officer of the holding company) to assist in the investigation of the corruption. Likewise, in respect to the conversation which was alleged to have occurred on 26 May 1994 (the “Stagnitti slander”) both Mr. and Mrs. Stagnitti gave evidence that Feo had uttered words to the effect of those which were pleaded – namely that “Rowlands and Forbes are crooks. They are being paid off by Krestas to keep his job” and that Feo was “going to bring them down by going to the ASC”, that “Rowlands and Forbes are corrupt” and that “Pioneer is the biggest corruption place you could work for”.
The submissions made to this Court pursuant to ground 1 were a repeat of those which had been made to the judge at the trial. In the face of those submissions his Honour, in careful reasons, said that he was satisfied that the words alleged to have been uttered on the occasions of 18 December 1993 and 26 May 1994 had in fact been uttered. His Honour specifically rejected Feo’s evidence that he had not published such words to Temby and also rejected his evidence that he had not spoken to Mrs. Stagnitti on 26 May. His Honour found that the witnesses called by the respondents, who had deposed to these conversations, were witnesses of truth, and that Feo was an unimpressive witness whose word he would not accept where it conflicted with the evidence of others. His Honour was not prepared to accept the submission made by appellants’ trial counsel that, having regard to the discrepancies which existed between the evidence given and the contents of notes made subsequently of the relevant conversations (Exhibits 3 and 4), he should not be satisfied that the words alleged had been uttered in the respective conversations. It was submitted in this Court that the judge was in error in rejecting this submission because each of Connell and Mrs. Stagnitti had conceded that the content of the respective written records was true, and that such concessions were irreconcilable with their evidence. Counsel referred to R. v. Thynne [1977] V.R. 98, a case concerning the admission into evidence of a previous inconsistent statement.
In my view, there is nothing which has been argued in support of ground 1 which would lead me to interfere with his Honour’s findings of fact in relation to the disputed issues. It is apparent from what I have so far said that his Honour’s findings were made in the face of conflicting evidence and that his resolution of those issues was very much dependent upon the view which he formed of the credibility of the witnesses who gave the evidence. I am not persuaded by the argument that his Honour was obliged to find that there was irreconcilable conflict between the evidence of the relevant witnesses and the contents of Exhibits 3 and 4. The content of those documents and the evidence of the witnesses were not mutually inconsistent, in the sense that one version could not co-exist with the other. In these circumstances it would be rare for an appellate court to interfere with the trial judge’s findings. As Brennan, Gaudron and McHugh, JJ. observed in Devries v. Australian National Railways Commission (1993) 177 C.L.R. 472 at 479:
“More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact. If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge ‘has failed to use or has palpably misused his advantage’ or has acted on evidence which was ‘inconsistent with facts incontrovertibly established by the evidence’ or which was ‘glaringly improbable’.”
To my mind, there is nothing to suggest that this very experienced trial judge has done or failed to do any of the things referred to in that passage in arriving at his findings which are now impugned. His Honour paid careful regard to the submission that he should not be prepared to find that the words claimed to have been published by Feo in the telephone conversations of 18 December 1993 and 26 May 1994 were in fact published. He gave careful reasons for rejecting that submission and no basis, in my view, has been disclosed in this Court for concluding that those reasons were in error.
In concluding, as I do, that this ground of appeal has not been made good, I am not unconscious of the fact that an appellate court has an obligation to review the findings of the trial judge, including findings of fact - even where those findings have been based at least in part on an assessment of demeanour of witnesses – and to substitute its own findings if it concludes that the trial judge was wrong (SRA (N.S.W.) v. Earthline Constructions (1999) 73 A.L.J.R. 306, especially per Kirby, J. at 322-5). In this case, however, there was nothing in the material before the trial judge which suggests to me that, in concluding as he did, he had misused the material which was at his disposal or in any other way determined the relevant facts in a manner which was not open to him.
I would, accordingly, reject ground 1.
Ground 2
In support of this ground the appellants submitted that the learned judge was in error in concluding that the two “Casey Slanders” were not published on an occasion of qualified privilege and that he further erred in finding that, even if they were, the privilege was defeated because the publications were actuated by express malice.
The text of the two slanders which are the subject of this ground and which were published on 15 and 16 June 1994 has been set out in paragraphs 23 and 24 of these reasons. In each of the publications which his Honour found to have been made, and which the appellants did not seriously dispute, Feo said words to the effect that:
“Krestas paid big money to John Forbes to get his job back [with
Pioneer]”.
In the second conversation he also said that he had “information on Pioneer” which would be of interest to the ASC.
Before uttering the first words to which I have referred in the preceding paragraph, Feo had spoken of a theft of concrete from Pioneer’s Werribee plant some 4 years previously. Having regard to the context in which these words had been used, his Honour was satisfied that Feo had identified Krestas as the person who had been involved in that theft. His Honour found that these words were defamatory of Forbes in that they meant and were understood to mean that Forbes had accepted a secret commission in return for providing favours to one of the company’s sub- contractors. On the hearing of this appeal, appellants’ counsel sought to contend that his Honour had erred in concluding that the “Casey Slanders” were defamatory of Forbes. When it was pointed out that the ground of appeal did not put his Honour’s finding in contest, counsel sought leave to amend the grounds. Leave was refused.
Although the further amended defence, filed by the appellants with leave of the judge on the last day of the hearing, contended that each of the defamatory statements alleged by the respondents was published on an occasion of qualified privilege, the appellants’ trial counsel had conceded that the defence, if it could be made good at all, could only apply to the “Casey slanders”. In respect of those slanders, his Honour rejected the defence, finding that the occasions upon which the words were published were not privileged and further that, on the assumption that they were, the respondents had satisfied him that the privilege had been defeated by the existence of express malice. It is appropriate to first look at the findings which his Honour made in respect of malice because, if those findings cannot be impugned, it is conceded that this ground of appeal cannot succeed. His Honour said:
“It is in the present case not necessary to deal in detail with the question whether qualified privilege applies to any of the slanders, for the reason that, in my opinion, the evidence of the existence of malice, as it is understood by the law, is so overwhelming as to negate the privilege that may otherwise have existed.”
[His Honour then went on to state reasons why, in his view, the “Casey slanders”
were not published on a privileged occasion, and continued]:
“However, whether or not that be correct, the defence [i.e. of qualified
privilege] … would have been negated by actual malice.
In the first place, Feo did not claim any belief that Rowlands or Forbes were “crooks” or were “on the take”. I am satisfied that he had no evidence to justify even a suspicion of such conduct. At the very least he was indifferent to the truth of his words, an indifference which “is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that the published matter is true” – per Charles, J.A., Cooke v. Wood, Court of Appeal, unreported, 11 December 1997 at 13 … . Put another way, there was a reckless indifference to the truth or falisity of his statement. … .
Proof by the plaintiffs of this indifference would suffice to negate any qualified privilege. However, the plaintiffs have in my opinion also established that Feo was motivated by an improper purpose. His ultimate purpose cannot, I think, be regarded as improper – that was to obtain a larger share of the work. … .
However, his immediate purpose … was to instil fear into Pioneer executives, and to denigrate his competitor Krestas. So he insinuated that the latter was, in some improper manner associated with Montgomery; so he suggested a re-opening of the earlier investigation [to which I have referred in paragraph 10 of these reasons]; he sought the assistance of those within Pioneer (and Mrs. Stagnitti) to dig up evidence of which he had none; I think he hoped that if corruption there was, allegations of it and threats of investigation would instil fear into anyone who was corrupt, and if there was no corruption, executives who may honestly have been thoroughly satisfied that there was no corruption would fear that future investigation would not only reveal nothing, but be upsetting and destabilising to the staff. Feo, I think, hoped that all of this would induce those executives to give him a larger share of the work; he had once been rewarded for reporting impropriety, and he hoped for a similar reward. In aid of his immediate purpose, he lied about having Dr. Schubert’s authority to investigate. Futhermore, he exhibited spite in making hurtful remarks about Rowland’s personal and family life. All of this, in my opinion, goes to show that the plaintiffs have discharged the onus of proving malice.”
It is, thus, apparent that his Honour found that the respondents had discharged the onus of proving malice, thereby defeating the existence of any privilege, on two distinct bases; first because the appellants had no honest belief in the truth of the defamatory matters which were published, or at least were recklessly indifferent to their truth or falsity and, secondly, because they had misused the occasion for an ulterior and dominant purpose other than the one for which the privilege was accorded.
It was not contended that the principles in accordance with which his Honour had purported to make these findings were mis-stated. The law recognises that, in respect of certain defamatory publications, the public interest in providing an effective remedy enabling plaintiffs to vindicate their reputations against the harm inflicted should be subordinated to the competing public interest which permits persons to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so. The privilege so afforded, however, has limits. It will be defeated by proof of express malice, which is to be distinguished from the malice which the law presumes to attend the publication of defamatory statements (Taylor v. Hawkins (1851) 16 Q.B. 308 at 321 per Lord Campbell, C.J.). As to express malice, Lord Diplock said in Horrocks v. Lowe [1975] A.C. 135 at 149-150:
“What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue. With some exceptions … the privilege is not absolute but qualified. It is lost if the occasion which gives rise to it is misused. For in all cases of qualified privilege there is some special reason of public policy why the law accords immunity from suit – the existence of some public or private duty, whether legal or moral, on the part of the maker of the defamatory statement which justifies his communicating it or of some interest of his own which he is entitled to protect by doing so. If he uses the occasion for some other reason he loses the protection of the privilege. … .
The motive with which a person published defamatory matter can only be inferred from what he did or said or knew. If it be proved that he did not believe that what he published was true this is generally conclusive evidence of express malice, for no sense of duty or desire to protect his own legitimate interests can justify a man in telling deliberate and injurious falsehoods about another, save in the exceptional case where a person may be under a duty to pass on, without endorsing, defamatory reports made by some other person.
Apart from those exceptional cases, what is required on the part of the defamer to entitle him to the protection of the privilege is positive belief in the truth of what he published or, as it is generally though tautologously termed, “honest belief”. If he publishes untrue defamatory matter recklessly, without considering or caring whether it be true or not, he is in this, as in other branches of the law, treated as if he knew it to be false. But indifference to the truth of what he publishes is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that it is true. …
Even a positive belief in the truth of what is published on a privileged occasion … may not be sufficient to negative express malice if it can be proved that the defendant misused the occasion for some purpose other than that for which the privilege is accorded by law. The commonest case is where the dominant motive which actuates the defendant, is not a desire to perform the relevant duty or protect the relevant interest, but to give vent to his personal spite or ill will towards the person he defames. … There may be instances of improper motives which destroy the privilege apart from personal spite. A defendant’s dominant motive may have been to obtain some private advantage unconnected with the duty or interest which constitutes the reason for the privilege.”
(See also Cooke & Anor. v. Wood, Court of Appeal, unreported, 11 December 1997, per Charles, J.A. at pp. 8-9; McKenzie v. Mergen Holdings Pty. Ltd. (1990) 20 N.S.W.L.R. 42 at 46, per Clarke, J.A.)

It could not have been, and was not, contended upon the hearing of this appeal that the trial judge was not conscious of these principles in reaching his conclusion that the appellants were motivated by express malice in making the defamatory publications to Casey on 15 and 16 June 1994. Rather, it was submitted that he had misapplied the principles because it was not open to him on the evidence to find that Feo did not have a genuine and honest belief in the truth of the words which he published to Casey. It was contended that his Honour should have paid greater heed to the evidence of Forbes that Krestas had, some four years previously, been “stood down” by the company until he had paid reparation to it for monies which it claimed that he owed. It was further put that his Honour should have paid greater heed to Feo’s evidence that he was only repeating to Casey what he had been told by Mrs. Stagnitti (evidence which his Honour rejected) and that he did not believe that his statement that “Krestas had paid big money to John Forbes to get his job back” meant that Krestas had bribed Forbes. Counsel submitted that, in the light of this evidence, his Honour had failed to pay adequate attention to the principle that courts should be “very slow to draw the inference that a defendant was so far actuated by improper motives as to deprive him of the protection of the privilege unless they are satisfied that he did not believe that what he said … was true or that he was indifferent to its truth or falsity”. (Horrocks v. Lowe, supra, at 150 per Lord Diplock; Bellino v. Australian Broadcasting Commission (1996) 185 C.L.R. 183 at 191, per Brennan, C.J.; Calwell v. Ipec Australia Ltd. (1975) 135 C.L.R. 321 at 332, per Mason, J.).
It was further submitted by counsel that his Honour had erred in concluding that express malice had been established by failing to confine himself to the relevant publications made to Casey and by travelling outside those publications and considering other conduct by Feo in determining whether malice had been established. As I understood this submission, it was that to find that malice had destroyed a privilege which attached to a particular “occasion”, the evidence of malice had to be found in the statements published on that occasion. The demonstration of the erroneous approach taken by the judge, it was contended, was to be found in his conclusion that Feo had no honest belief that Rowlands and Forbes were “crooks” or “on the take”, when there was no evidence that such words were used by Feo in the conversations which he had with Casey.
In my opinion there is no substance in this latter contention. In some cases evidence of malice will be found inherent in the words used on the occasion for which privilege is claimed. The nature of the language used and/or its lack of relevance to the occasion may itself enable the court to conclude that the defendant had no honest belief in the truth of what he or she was publishing, or disclose the improper purpose which would defeat the privilege. But, in many cases, the court will legitimately have recourse to conduct of the defendant extraneous to the impugned publication for the purposes of determining whether the occasion in question had been misused. In such cases, the relevant malice will normally only be established by inferences drawn from proven facts. As Clarke, J.A. said in McKenzie v. Mergen Holdings, supra, at 51:
“Proof of malice involves, almost in every case, the drawing of inferences from proven facts. What the plaintiff seeks to persuade [the court] is that because of the defendant’s conduct prior to and following the publication of the defamatory statement, or in some cases, because of the exaggerated terms of the defamatory statement itself, or a combination of both, the inference should be drawn that the defendant was actuated by malice in defaming the plaintiff.”
(See also Horrocks v. Lowe, supra, at 151).
In this case, his Honour was well entitled to look at the entire course of Feo’s conduct, before and after the publications to Casey, to determine whether the respondents had established to his satisfaction that, in making those publications, Feo had no honest belief in the allegations which he made and/or was using the occasion for an improper purpose. In my opinion, the evidence available to his Honour amply justified the conclusions to which he came. The utterances made to Casey clearly contained the imputation that Forbes had taken a bribe from Krestas to enable the latter to retain or regain his contract with Pioneer, which is another way of saying that Forbes was a “crook” and “on the take”. In concluding that Feo had no honest belief in the truth of such statements, the judge was entitled to have regard to the circumstances in which, at other times, he had made similar allegations. Furthermore, in the light of the course of conduct in which Feo had engaged over a lengthy period, his Honour was entitled to reject his evidence that he was not intending to imply that Forbes had taken a bribe from Krestas. His Honour had seen and listened to Feo, and had observed his demeanour, whilst he was giving his evidence. He found him to be an unimpressive witness whose evidence he was not prepared to accept unless it coincided with other evidence. Further, the whole of the evidence which was before him entitled him to find, as he did, that in publishing the defamatory words to Casey, Feo was primarily motivated by the improper purpose of seeking an unwarranted advantage for himself and his company at the expense of his competitor Krestas. It is significant that this latter finding, which would be sufficient in itself to establish malice, was not challenged on the hearing of this appeal.
The transcript of the evidence supports, in my view, his Honour’s conclusion that the evidence of relevant malice was “overwhelming”. His Honour’s conclusion was one of fact and was obviously based, not only on the evidence as it was recorded, but upon his observations of the witnesses, particularly Feo. In that respect, his Honour, in finding the relevant facts, had an advantage which this Court cannot replicate. There is nothing in the record of the evidence or in his Honour’s conclusions which would lead me to the view that, in reaching his conclusion that the appellants were motivated by malice, he had misused the advantage which he had or that his conclusion was an improbable one.
For these reasons, ground 2 has not been made out, and it is unnecessary to determine the other “limb” of counsel’s argument – namely that his Honour was in error in finding that the defamatory comments published to Casey were not published on a “privileged occasion”.
Ground 3
The appellants’ counsel contended, in support of this ground, that his Honour was in error in finding that the two “Temby slanders”, the “Stagnitti slander” and the “second Casey slander” were defamatory of the corporate respondent, Pioneer; and that, in any event, the publications were not actionable without proof of special damage or, as I understood the argument, without some proof of “probable income loss”. Although the first part of this argument stretched the ambit of the ground of appeal to its outer limits, the Court permitted argument to embrace both “limbs”, after counsel for the respondents informed us that it would not cause inconvenience or embarrassment to him. The relevant publications (to which I have earlier referred in these reasons) were alleged and found by the judge to contain words to the following effect:
“Do you know there are corrupt activities going on in Pioneer.”
“There is a lot of corruption going on within Pioneer … , I’m working for Dr. Schubert [C.E.O. of the Group] in investigating corruption within Pioneer.”
“Pioneer is the biggest corruption place you could ever work for; Rowlands, Forbes, Hamelex and Sawry are all corrupt; I’ve got evidence and I am going to bring them down by courts, fraud squad, media and the A.S.C.”
“Give them [meaning Forbes and Rowlands] a message from me. If they don’t leave me alone, I’m going to the ASC. I’ve got information on Pioneer that I know they would be interested in …”
The respondents alleged that these statements were defamatory of Pioneer in the way of its business in that, in their natural and ordinary meaning, they meant and were understood to mean that the company, through its executive officers, engaged in corrupt – meaning dishonest – business activities or that it acquiesced in its officers engaging in such activities; and that the company had engaged in breaches of the law of the type which would interest regulating authorities or were serious enough to be of concern to them.
His Honour found that the words were defamatory of Pioneer and were calculated to injure the company in its trading character and were actionable without proof of special damage. The damages which he assessed in favour of Pioneer were indeed “modest” and no attack has been made upon them in this Court.
The essence of the appellants’ argument to this Court has been that his Honour was wrong to have found that the publications were defamatory of Pioneer in the way of its business because none of the offending words would be understood as having been “aimed at” Pioneer but rather at the individual executives named. In any event, it was submitted, it is not defamatory of a corporate entity to say that it is “corrupt” because a company cannot be guilty of corruption. In this respect, counsel relied upon certain passages in the judgment of Lopes, L.J. in South Hetton Coal Company Ltd. v. North-Eastern News Association Ltd [1894] 1 Q.B. 133 at 141 and the brief and ex tempore judgment of Day, J. in Manchester Corporation v. Williams [1891] 1 Q.B. 94 at 96 (a case involving a non-trading corporation).
For my own part, I am unpersuaded by these arguments. It is not in issue that a trading corporation, such as Pioneer, can sue upon a defamatory publication calculated to injure it in its trading character. It has been said that there are some defamatory statements which, if published of and concerning individuals, would be actionable at the suit of those individuals, but if published of and concerning a trading corporation would not be actionable at its suit. A typical example given is a statement alleging that a corporation committed a crime which could not be committed by it. This was the gist of the passage in the judgment of Lopes, L.J. in the South Hetton Coal Company case relied on by counsel for the appellants. But much will depend upon what the ordinary person would understand the words to mean. If they are capable of conveying an imputation that the company, through its responsible officers, is carrying on its trade or business in a dishonest fashion or has been so incompetent as to permit its business to be so conducted, the publication will be actionable at the suit of the company and will be so because the words are calculated to disparage the corporation in the way of its business. So much, as it seems to me, was accepted by Lord Esher M.R. in the South Hetton Coal Company case when he said (at 139):
“Statements may be made with regard to their [that is corporations’] mode of carrying on business such as to lead people of ordinary sense to the opinion that they conduct their business badly and inefficiently. If so the law will be the same in their case as it is in that of an individual, and the statement will be libellous.”
Indeed, as the authors of Gatley on Libel and Slander (9th Ed, 1998) note, the law has moved on in respect of defamatory statements published of and concerning trading corporations in the century which has passed since the South Hetton case was decided. In paragraph 8.18 (p.183) the authors say (omitting footnotes):
“There are obiter dicta from which it might be inferred that a trading corporation or company could not maintain an action of libel in respect of an imputation of corruption. It is submitted that these dicta state the law too widely, and that a trading corporation … can maintain an action in respect of an imputation of corruption or, indeed, of any other wrongful conduct, if the imputation is calculated to injure it ‘in the way of its business’, which may simply mean that people are, as the result of the libel, reluctant to deal with it.”
In any event, as the learned authors go on to point out in the same paragraph (at 184), the interpretation of the defamatory words should not be constrained by technical rules of the criminal law. The real question is whether the words, properly understood, convey an imputation which is injurious to the trading reputation of the company (cf. D.& L. Caterers Ltd. v. D’Ajou [1945] K.B. 364 at 365-6 per Lord Goddard).
In this case, his Honour found that the impugned publications were defamatory of the company because they conveyed the imputation that it was either trading illegally through its senior officers or, at least, was acquiescing in such activities. In my view the publications are capable of conveying such imputations and it was open to his Honour to find that they did. I cannot accept counsel’s submission that, properly understood, they only conveyed imputations defamatory of the individuals named. The repeated statements that there was “corruption within Pioneer”, that the company was “the biggest corruption place you could ever work for” and that the first named appellant was assisting the chief executive officer to investigate such corruption within the company and, further, that such information which he had “on Pioneer” would be of interest to the corporate regulating authority, clearly entitled his Honour to find that the statements were published of and concerning the company and were calculated to injure it in its trading character. As Griffith, C.J. said in Barnes & Co. Ltd. v. Sharp (1910) 11 C.L.R. 462 at 474:
“It is, however, plain that a defamatory statement to the effect that a trading company carries on its business in a dishonest … manner is likely to injure its reputation in the way of its business.”
Furthermore, it is too late in the day to submit, as counsel did, that such defamatory statements are not actionable without proof of special damage or, as it was put, without proof of “probable income loss”. For a long time now it has been held that defamatory words spoken of a corporation and calculated to injure it in the way of its business or trading character are actionable per se – that, is, without proof of special damage (D.& L. Caterers Ltd. v. D’Ajou, supra, per Lord Goddard at 366; per Du Parcq, L.J. at 367; Gatley (9th Ed), paragraph 4.18, p.115 (footnote 2); Tsolakkis Nominees Pty. Ltd. v. National Australia Bank Ltd, Court of Appeal, unreported, 4 June 1998 per Batt, J.A. (with whom Brooking and Phillips, JJ.A. concurred) at 17; Michael Kay & Anor. v. John Charles Chesser & Anor, Court of Appeal, unreported, [1999] VSCA 83, per Ormiston, J.A. (with whom Tadgell and Charles, JJ.A. concurred) at [12]-[16]).
Counsel’s submission, as it seems to me, confuses actionability with the measure of damages to be assessed. He referred us to Lord Reid’s statement in Lewis v. Daily Telegraph Ltd. [1964] A.C. 234 at 262 where his Lordship said:
“A company cannot be injured in it feelings, it can only be injured in its pocket. Its reputation can be injured by a libel and that injury must sound in money. The injury need not necessarily be confined to loss of income. Its goodwill may be injured.”
Counsel also referred us to Mount Cook Group Ltd. v. Johnstone Motors Ltd [1990] 2 N.Z.L.R. 488 where, at 497, Tipping, J., having cited the above passage in Lewis v. Daily Telegraph, went on:
“The line between reputation as such … and goodwill must often be a fine one, but the emphasis is on the fact that damages can be awarded to a company only in respect of commercial loss, however suffered, and not on account of other forms of harm and damage to reputation as are available when the plaintiff is a human being.”
These statements were called in aid, by counsel, as support for the proposition that a corporation has no action for slander unless some income loss is alleged and proved. Such a proposition, as I see it, overstates the true position at law because, if it were accepted, the clearly established principle that a slander of a corporation in the way of its business is actionable per se would be subverted. As Stable, J. put it in the case of D.& L. Caterers Ltd. v. D’Ajou [1945] K.B. 210 at 215:
“… where the slander is calculated to injure reputation in respect of … business … the action may be brought by a company without allegation or proof of actual damage, since the law presumes it.”
His Lordship’s view was approved by the Court of Appeal (see D. & L. Caterers Ltd. v. D’Ajou, supra; see also, Kay & Anor. v. Chesser & Anor, supra, per Ormiston, J.A. at [12]).
The true view is, in my opinion, that where a corporation has been slandered in the way of its business, the slander is actionable per se, and it is unnecessary to either allege or prove special damage. That does not mean that the presumed damage to its reputation can only be compensated if calculable in precise money terms. As Ormiston, J.A. said in Kay’s case, supra, at [12], damages are not to be assessed for injury to the company’s “reputation as such”, but are to be assessed “having regard to financial and commercial considerations by which a corporation’s reputation is ordinarily assessed”. In some cases the damages assessed may only be nominal; particularly where the court cannot be satisfied that the nature of the defamatory imputation, or the breadth of its publication, has caused significant harm to the trading reputation of the corporation defamed. However, that is not to say that the defamatory publication is not actionable at the suit of the corporation. If no proof is tendered of specific loss, the assessment of damages is to be made on the material available to the court and the view which it forms of the loss likely to have been suffered by the company as a consequence of the defamatory material which it finds to have been published of and concerning the entity in the way of its business (cf. Australian Broadcasting Commission v. Comalco Ltd. (1986) 12 F.C.R. 510 per Neaves, J. at 588 and Pincus, J. at 604). In this case, as I have said, no appeal has been brought against his Honour’s assessment of damages, no doubt because of its modesty.
For these reasons it is my view that ground 3 has not been made out. In those circumstances the appeal must be dismissed.

CALLAWAY, J.A.:

I agree that this appeal should be dismissed, and I joined in the refusal of leave to appeal the costs order, substantially for the reasons assigned by the learned President for each of those decisions at [1-36] and [48-58]. So far as ground 2 is concerned, I am content to say that one of the bases on which the learned trial judge found express malice was not challenged on appeal. In those circumstances, as counsel for the respondents pointed out, the ground was bound to fail.

BATT, J. A.:

I also agree that this appeal, from what is a model judgment, should be dismissed for the reasons given by the President. I too do not find it necessary to reach a conclusion on whether the Casey slanders were spoken on occasions of qualified privilege, for the judge was clearly right in finding actual malice.
The reasons which the President has stated in [6] are those for which I joined in the Court’s order refusing leave to appeal from the order as to costs. I would, however, elaborate the final reason by adding that, when it is appreciated that the rule to which the trial judge referred, that is, rule 11 of the Courts (Case Transfer) Rules 1991, relates to Part 3 of the Courts (Case Transfer) Act 1991 and when regard is had to ss.3(2) and 16(1) of that Act, I am unpersuaded of any specific error of law on the judge’s part.

[1999] VSCA 180

12 November 1999