Gianni Versace SpA v Monte

[2002] FCA 190

Gianni Versace SpA, Santo Versace and Donatella Versace v
Frank Monte aka Francois  Ferdinand Monteneri and Arkitude Holdings Pty Limited
[2002] FCA 190 (8 March 2002)

FEDERAL COURT OF AUSTRALIA

Gianni Versace SpA, Santo Versace and Donatella Versace

v

Frank Monte aka Francois Ferdinand Monteneri
and
Arkitude Holdings Pty Limited

N1184 OF 2001

EXPLANATORY STATEMENT

It is the practice of this Court in matters which are of significant public interest to make a brief explanatory statement when delivering judgment.

The statement I now make is a short overview of some of the main issues and the findings I have made but it does not purport to comprehensively set out my reasons and findings which are contained in the judgment.  The judgment concerns only the question of liability.  The question of damages has been separated out and will be considered at a further hearing.

Precise details as to the form of appropriate Orders to be made will need to be the subject of further submissions.

THE BACKGROUND

The House of Versace is a famous Milanese fashion house.  The principal Versace company and two members of the Versace family, Donatella Versace and Santo Versace have brought proceedings against both Frank Monte and his company, Arkitude Holdings Pty Limited, essentially claiming they are guilty of false and misleading conduct concerning them and also against Frank Monte for the publication of serious defamatory imputations against them.  The Versace claim was that Frank Monte made false statements in claiming a commercial relationship with the late Gianni Versace, who Frank Monte claimed had retained his services as a private investigator and adviser. 

One central issue in the case was whether there was ever any conversation, meeting or relationship between Gianni Versace and Frank Monte in the period from January 1996 up to the murder of Gianni Versace on 15 July 1997.

Frank Monte asserted that Gianni Versace confided in him during that eighteen month period with respect to the activities and affairs of the House of Versace and the alleged activities of his brother and sister, Santo and Donatella.  The statements alleged by Frank Monte to have been made by Gianni Versace are sensational and grave in nature.  They concerned each of the three Versace applicants and were said by Frank Monte to have been based on actual conversations with Gianni Versace.  Often, the statements were cast in the form of direct quotations.

The publication of these matters was in the form of a book published by Frank Monte and Arkitude entitled The Spying Game, which was ghost written for Frank Monte to recount his life story.  Additionally, some of the imputations and representations have been extensively published in an article in The Weekend Australian colour magazine supplement, of 23-24 June 2001 and on the website maintained by Frank Monte and Arkitude, where a collection of asserted rumours, gossip, sensational newspaper articles and statements were gathered and made available to the world at large.  The website was heavily promotional of the Frank Monte image as a colourful private investigator.

Frank Monte and Arkitude have denied the allegations made.  However, no attempt was made by Frank Monte to rely on a defence of truth to any of the alleged defamatory imputations in these proceedings.  In so far as the misleading and deceptive conduct claim is concerned, Frank Monte essentially relied on denials and claimed he was an “information provider” and therefore had protection as such under the legislation in respect of the claims of misleading conduct.  This defence is largely directed to media outlets but is not confined to such outlets.

In the defamation proceedings, Frank Monte raised a number of defences at common law and under statute.  He claimed an honest belief in the truth of the statements concerning Santo and Donatella Versace derived from the alleged conversations with Gianni Versace and denied that the alleged representations had been made or that the statements would convey defamatory imputations against Santo and Donatella Versace or the company. Part of his case was also that the statements did not specifically identify Santo and Donatella Versace because they referred to the Versace business or the House of Versace, which he contended included many other people.

The representations or statements and imputations against the Versace business and Santo and Donatella Versace, on the evidence before me, are false and misleading and constitute misleading and deceptive conduct. They are sufficiently specific when considered in context, to identify the Versace company and the family.

I have found that each of Frank Monte’s statements complained of lacks any credibility whatsoever.  In particular, I am persuaded that he never had any relationship, contact or communication of any type with Gianni Versace and that his assertions to the contrary are completely untrue.  He is not within the protection of the “information provider” defence in the legislation relating to misleading and deceptive conduct.  Nor does he have any defence with respect to the claim in defamation.  I have found that he did not have any honest belief that the imputations were true.  His evidence is largely to the contrary and does not disclose any reasonable basis for the assertions.  The objective truth of the imputations was not asserted by Frank Monte and no attempt was made to establish objective truth of any of the statements apart from the claims of conversations and meetings with Gianni Versace over the eighteen month period.  Those latter assertions were untrue.

I am satisfied that damage has been suffered by each of the applicants as a consequence of communication of the material and as a consequence of the deceitful and defamatory course of conduct adopted by the respondents and that unless they are restrained from further publishing such false information, the damaging statements will continue to be propagated.  Although the book dealt with other matters, the statements relating to Versace were central to the book and constituted one of the main threads of the book.  They were also central to the article published in The Weekend Australian and to publications which were made available on the website at relevant times.

Injunctive relief should be granted to restrain further publication of the matters complained of.  The precise form of this relief will need to be settled.  The Versaces are entitled to appropriate declarations based on the findings I have made.  The matter will now be stood over to resolve the precise forms of relief at this stage and to consider the question of costs to date.  Arrangements will be made to schedule a hearing on the questions as to the nature and extent of damages claimed and to any defences in relation to the issue of damages.

I now publish my reasons.  I adjourn the Court.

JUSTICE BRIAN J TAMBERLIN

8 March 2002

FEDERAL COURT OF AUSTRALIA

Versace v Monte [2002] FCA 190

TRADE PRACTICES – whether representations in connection with supply or promotion of supply of services – misleading and deceptive conduct – false and misleading representations – alleged conversations with deceased fashion designer – whether book, newspaper article and website are in “trade or commerce” – whether applicant is an “information provider” – whether documents fabricated – whether damage has been shown – nature of the damage – whether injunctive relief should be granted – whether publications are promotional in character – whether respondents falsely representing that applicants agreed to acquire services – context of conduct complained of

DEFAMATION – libel –whether judgment entered in first proceedings – whether material relied on was speculative – whether proceedings were an abuse of process – effect of defamation claim on Trade Practices claims – whether imputations conveyed – whether question is capable of conveying an imputation – whether defamation defences available – comment – qualified privilege – public interest – cause of action – honest belief in imputations – malice

EVIDENCE – statements attributed to person since deceased – approach taken by court

WORDS & PHRASES – “trade or commerce”, “information provider”, “imputation”

Defamation Act 1974 (NSW) ss 9, 14, 15, 16, 22, 31, 32, & 33
Trade Practices Act 1974 (Cth) ss 4, 52, 53, & 65A
Fair Trading Act 1987 (NSW) ss 4, 42, 44, & 60
Statute Law (Miscellaneous Provisions) Act (No 2) 1984 (Cth)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5

Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 referred to
Jones v Dunkel (1959) 101 CLR 298 referred to
FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 479 followed
Farquhar v Bottom [1980] 2 NSWLR 380 cited
Typing Centre of NSW Pty Ltd v Northern Business College Ltd (1989) ATPR 40-943 cited
RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164 followed
Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 referred to
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 applied
Tobacco Institute of Australia Ltd v Woodward (1993) 32 NSWLR 559 cited
Prestia v Aknar (1996) 40 NSWLR 165 cited
Fasold v Roberts (1997) 70 FCR 489 cited
Plimer v Roberts (1997) 80 FCR 303 cited
Fasold v Roberts (1997) 70 FCR 489 at 531 cited
Dataflow Computer Services Pty Ltd v Goodman (1999) 46 IPR 393 cited
Firewatch Australia Pty Ltd v Country Fire Authority (1999) 93 FCR 520 cited
Global Sportsman Pty Ltd v MirrorNewspapers Ltd  (1984) 55 ALR 25 referred to
Glorie v WA Chip & Pulp Co Pty Ltd (1981) 55 FLR 310 cited
Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1983) 47 ALR 497cited
Lovatt v Consolidated Magazines Pty Ltd (1988) 12 IPR 261 discussed
Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) ATPR 40-764 cited
Advanced Hair Studio Pty Ltd v TVW Enterprises Ltd (1988) 77 ALR 615 discussed
Sykes v Reserve Bank of Australia (1997) 151 ALR 579 followed
Krahe v Freeman (1988) ATPR 40-871 distinguished
Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 followed
John Fairfax & Sons Ltd v Hook (1983) 72 FLR 190 cited
David Syme & Co v Canavan (1918) 25 CLR 234 referred to
Knupffer v London Express Newspaper Ltd [1944] AC 116 distinguished
Truth (NZ) Ltd v Bowles [1966] NZLR 303 cited
Lewis v Daily Telegraph Ltd [1964] AC 234 cited
Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171 followed
Mirror Newspapers Ltd  v World Hosts Pty Ltd (1979) 141 CLR 632 followed
Morosi v Mirror Newspapers Ltd (1977) 2 NSWLR 749 cited
Morgan v John Fairfax & Sons Ltd (No 2) (1991) 23 NSWLR 374 followed
Horrocks v Lowe [1975] AC 135 referred to
Green v Schneller [2000] NSWSC 548 followed
Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 referred to
Harris v Perkins [2001] NSWSC 258 distinguished
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 discussed
Browne v Dunn (1893) 6 R 67 discussed

GIANNI VERSACE SpA, SANTO VERSACE, DONATELLA VERSACE v
FRANK MONTE aka FRANCOIS FERDINAND MONTENERI and ARKITUDE HOLDINGS PTY LIMITED

N 1184 of 2001

TAMBERLIN J
SYDNEY
8 MARCH 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N1184 OF 2001

BETWEEN:

GIANNI VERSACE SpA
FIRST APPLICANT

SANTO VERSACE
SECOND APPLICANT

DONATELLA VERSACE
THIRD APPLICANT

AND:

FRANK MONTE aka FRANCOIS FERDINAND MONTENERI
FIRST RESPONDENT

ARKITUDE HOLDINGS PTY LIMITED
(ACN 096 646 016)
SECOND RESPONDENT

JUDGE:	TAMBERLIN J
DATE OF ORDER:	8 MARCH 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

The applicants are directed to file and serve on the respondents within fourteen (14) days draft Short Minutes of the Orders which they seek in accordance with these reasons.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N1184 OF 2001

BETWEEN:

GIANNI VERSACE SpA
FIRST APPLICANT

SANTO VERSACE
SECOND APPLICANT

DONATELLA VERSACE
THIRD APPLICANT

AND:

FRANK MONTE aka FRANCOIS FERDINAND MONTENERI
FIRST RESPONDENT

ARKITUDE HOLDINGS PTY LIMITED
(ACN 096 646 016)
SECOND RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	8 MARCH 2002
PLACE:	SYDNEY

Reasons for Judgment

1. Gianni Versace (“Gianni”) was a famous fashion designer who had a long and successful career.  He began his career as a designer in Tuscany in 1972.  Accompanied by his brother, Santo Versace, (“Santo”), he moved to Milan in 1976 and together they planned the creation of the Gianni Versace fashion label, which was founded the following year.  Gianni presented his first signature collection in Milan in March 1978.  In that year, Donatella Versace (“Donatella”), the sister of Gianni and Santo, also began to take an active role in the creative side of the business.  Later, she was to manage the Versace brand.

2. The Versace business has been carried out through a network of companies, the parent of which, Gianni Versace Srl, was subsequently transformed into Gianni Versace SpA, a company owned by shareholders.  The first applicant is now the holding company of the Gianni Versace group of companies (“the group”).  This organisation has developed a network of independent franchisees which, during the 1980’s, began to open exclusive points of sale under the Gianni Versace insignia.  At the end of the 1980’s, the group took steps to develop a network of directly owned stores.  In February 1988, the group brought back licensing rights to market and manufacture perfumes and cosmetics under the insignia.  These were subsequently sold to a newly incorporated joint venture between the group and an Italian fragrance company. 

3. From the early 1980’s, the group established operations in various fashion centres throughout the world, largely in the form of boutique stores in prestigious shopping areas.  In 1993, the group diversified into the area of home accessories, including tableware and bedware.  During 1996 and 1997, the group continued to expand and set up a new flagship boutique on Fifth Avenue, Manhattan.  In 1997, the group set up a German company to regain control of its boutiques in Frankfurt and Hamburg, which had been previously managed by independent franchisees.  Throughout these two decades, the group had relied on its recognition and repute in undertaking its expansion and achieving its success.  Much of that was attributable to Gianni, who had won numerous fashion awards throughout his career.  The collections presented by him both in men and women’s high fashion achieved a high level of success and popularity.  It was clear from the evidence that by 1997, the group had become one of the pre-eminent international fashion houses.  In some circles, the Versace label is a household name.

4. Throughout 1996 and the first half of 1997, Gianni worked in Milan, New York and Miami and travelled frequently in Europe and the United States.  On 15 July 1997, while staying at his Miami villa, he was murdered in front of his home.  The authorities concluded that Gianni was murdered by a lone serial killer Andrew Cunanan, who killed himself as the police closed in on the house boat in which he was living.  Cunanan died only eight days after the murder of Gianni.

5. Since Gianni’s death, Donatella has been responsible for the creative aspects of the business.  In 1996, the first applicant had started preparing for a public listing on the Milan stock market, originally scheduled to take place in Spring 1998.  However, the operation was postponed after Gianni’s murder.

6. Santo is currently the President and joint Chief Executive Officer of the first applicant.  In his capacity as President, he manages the business and financial affairs of the group.  He has done so since 1978.  In particular, he is responsible for overseeing the manufacturing, licensing, franchising, sales, distribution, administration, finance, and legal affairs within the group.  He was the first Chairman of the group and has been personally involved in the financial and operational side of the business since its inception in 1977. 

7. Santo gave evidence that Gianni’s focus in the business was almost exclusively on the creative and fashion side.  He said that he had a close relationship with both Gianni and Donatella and that he talked to them on a daily basis about business, private and family matters.  He said that he was never informed by his brother of any relationship or contact Gianni had with Mr Frank Monte (“Monte”).  The first time Santo heard of Monte was when Monte was quoted in a number of newspapers after Gianni’s death stating that Monte had been instructed by Gianni in connection with a blackmail attempt in relation to certain ledgers.  Santo stated that he knew nothing of Gianni having received a blackmail demand.

8. Donatella worked with her brother Gianni, from 1978 until his death in 1997.  In 1987 or thereabouts, she began managing the group’s accessories collections as well as some of the group’s licences.  She gave evidence that she had a close relationship with both of her brothers and spoke with them regularly in relation to business, as well as family and private matters and that she worked extensively with Gianni in relation to the creation of collections and the preparation of fashion parades, catalogues and fashion shoots.  Vacations were also spent together.  According to Donatella, this pattern of contact continued during the period from 1996 until the murder of Gianni in 1997.  This is the period during which Monte claimed to have developed a relationship with Gianni.  Donatella said that while Gianni spent more time in Miami, he was always in contact with her and staff at the office.  She had never heard of Monte until he was quoted in newspapers after Gianni’s death in relation to suggestions of a blackmail attempt.  She was unaware of any contact, engagement or payment from Gianni, the first applicant or any company in the group concerning Monte.  She also denied an assertion by Monte that she had seen or recognised him at a commemoration function held for Gianni at the Metropolitan Museum of Art, on 4 December 1997.

9. According to the evidence of the first applicant’s General Manager, Giovanni Galbiati (“Galbiati”), who is also a Director of Gianni Versace Spa, the group has grown to have an annual turnover worldwide of 865 billion Italian lire and, as at 31 December 2000, employed 1500 people globally on a full time basis.  The group’s strategy has been to globalise the Versace brand into one signifying quality and luxury.  According to Galbiati, that image has been achieved. 

10. The evidence, which I accept, is that the Versace brand is well known and established in Australia as a luxury, quality brand as a consequence of its widespread promotion on a global scale and by the extensive marketing of Versace brand products through exclusive distributors and dedicated stores and other outlets.  In 1998, the Versace group entered into a business partnership in Australia with Sunland Group Limited (“Sunland”), which has resulted in the Palazzo Versace Gold Coast Hotel in Queensland.

    PArties

11. The applicants have been described in the preceding pages.

12. The first respondent, Frank Monte, who is also known as Francois (Franco) Ferdinand Monteneri, was a member of the New South Wales Police Force for a number of years in the 1960’s.  In 1967, he joined a private investigation firm and has carried on business as a private investigator for over thirty years.  Initially, his work mainly involved matrimonial cases.  He said that his work as a private investigator has involved him working in various places throughout the world, including a period in the 1990’s, where he worked in the United States.  He claimed to have undertaken work for numerous international celebrities and prominent organisations and corporations, whose names were listed on the website of Monte Investigation Services at According to Monte’s evidence, over the last ten years, he has eagerly sought and obtained extensive international exposure in the media.  He claimed that in 1998, he became involved full time as an author and scriptwriter.  He referred to three books, the titles of which are The Spying Game, Master Spy and Confessions of a Corporate Spy.  Curiously, having regard to these titles and the name of his website in his evidence, Monte expressed a distaste for the expression “spying” because it denoted a “sinister approach”.

1. During 1996 and 1997, Monte resided in New York.  During this period, he was in a close personal and business relationship with Justine Wallace (“Wallace”) who was called by the applicants in these proceedings.  At the time of Gianni’s murder, Monte was still recuperating in New York from a cosmetic operation.

2. On or shortly after the death of Gianni, Monte obtained international prominence by making statements and appearing in the Australian and international media, asserting claims that he had been retained by Gianni during 1996 to take care of his personal and corporate security and that he had numerous confidential conversations with Gianni as a result of which he obtained knowledge as to underlying suspicious circumstances that could have led to Gianni’s murder.  In the immediate aftermath of the murder and following, Monte claimed to have knowledge of involvement by the “Mafia” in the murder.  These claims were widely reported in the international media, including, The Observer and The Independent newspapers in the United Kingdom and, in the United States, principally on television, but also in the New York Post and New York Observer newspapers.Defamation proceedings were instituted against those media outlets by the Versace family.  In proceedings instituted in the United Kingdom, each case resulted in an apology and retraction of the allegations concerning the first applicant and as against Santo and Donatella.  Throughout this period following Gianni’s death, Monte claimed to have obtained telephone records from a former personal assistant to Gianni, Carlotta Corazza, to verify his association with the designer.  However, these were not produced to the Court.  By late 1997, Monte was claiming to journalists to have a number of “Versace files”, which allegedly contained documents proving that he had a working contract with Gianni.  He refused to provide any of these files to the Versace family or business and claimed that he had taken legal advice that he should not do so.  Monte’s allegations were provided to journalists employed by the New York Observer and the New York Post in early 1998 who subsequently published Monte’s claims.  However, the New York Post at least published a withdrawal and apology for its report shortly afterwards.

3. In May 2000, Monte signed an agreement with Pan Macmillan Australia Pty Limited (“Pan Macmillan”) for an autobiography given the working title of Frank Monte Story.  During the period stemming from 2000 to 2001, he worked with a number of ghost writers, including David Warner and Deborah Adelaide, to produce a book, ultimately entitled The Spying Game, (“the book”) which is the subject of this action.  The allegations in the book were identified in the pleadings as the “first matter complained of”.

4. The applicants claimed that Monte caused the book containing the false allegations to be published in Australia.  The Versace theme is central to the book.  The book begins with Monte waiting near Central Park Children’s Zoo in Manhattan for an alleged meeting with Gianni.  A great deal of the book is concerned with assertions relating to alleged statements by Gianni to Monte as to unlawful and reprehensible conduct by Gianni, the Versace businesses and the Versace family.  The applicants submitted that these assertions are defamatory and constituted false and deceptive conduct, based on fabrication and lies.

5. The precise number of copies of the book published was not clarified to the Court, but that is a matter which will no doubt be examined in greater detail on any later hearing as to damages.  The applicants indicated that thousands of copies of the book were received by Pan Macmillan from the printery.  A number of these were sent for review.  A large proportion were said to have been distributed to retailers, most of which were subsequently recalled.  Monte’s evidence was that close to 800 copies were sold, in addition to the copies given out to the Press.  I accept that at least the number of copies estimated by Monte were published.

6. Also the subject of this action is an article appearing in a publication in the 23-24 June 2001 edition of The Weekend Australian newspaper (“the article”), in the form of an interview with Monte.  The article included some condensed material from the book and statements attributed to Monte relating to Gianni and the Versace family and businesses.  This was referred to in the pleadings as the “second matter complained of”.  The article was the centrepiece of the colour supplement entitled The Australian Magazine which was circulated throughout Australia.  The precise circulation was not in evidence but I am satisfied that it was published to a large section of the Australian public.  The cover of the supplement shows a photograph of Monte in a large black hat with a cartoon figure of a somewhat vampish blonde with a long cigarette holder.  There is a full page colour photograph of Monte lighting a large cigar.  There are also photographs of Monte alongside celebrities, such as Donald Trump and Robert Kennedy Junior, and a photograph of Monte and Justine Wallace with the title “frank monte private investigator”.  This article alerted the applicants to the fact that Monte was continuing to make representations and allegations about his claimed involvement with Gianni.  The book was referred to and quoted by the author of the article.  The article stated:

   “Then, out of the blue, came his ultimate client.  Monte says Gianni Versace first contacted him in 1996.  After several meetings he earned the designer’s trust enough to be told about a major problem.  According to Monte, Versace said that someone called ‘Johnny the Cat’ from Milan had stolen five secret ledgers from the  company and was asking $US5 million to return them.  Versace could not go to the police because it would reveal that for years, he had been dealing with the Italian underworld.
   ‘It is explosive,’ writes Monte. ‘Versace tells me that what the ledgers reveal is that over the course of several years he has been laundering millions of ‘dirty’ dollars for Calabrian organised crime.’  The ledgers and the revelation about Gianni Versace were ‘a time bomb which could blow the House of Versace and all its occupants sky-high.’”

   (I interpolate here that this reference to “the House of Versace” was a misquote.  In fact, the book referred to “a time bomb [which could] blow Versace’s business and all its occupants sky high”.  For reasons given below, this is a distinction without a difference).

   “Monte says Versace was terrified that the Mob’s links with his business might be revealed.  At the same time, he says Versace fretted about the worsening relationship with his family back in Italy.  In 1996, Monte claims that Versace told him that his family was trying to cut off his money in the belief that he had AIDS.
              Versace asked Monte to oversee an AIDS test for him. ‘He hands me three phials of blood marked A, B and C and asks me to take these to a doctor, along with a payment of $20,000,’ writes Monte.  ‘Versace wants to know if he is HIV-positive.’  It turns out that one phial contained the blood of a child, the other contained HIV-infected blood and the third was clear.  Versace’s blood was in the third sample; he was clear.
              Eventually, says Monte, Versace decided that his best option was to go public and tell people that criminals had infiltrated his business. Monte advised Versace that if his intentions were to become known, his life would be in grave danger and that he needed to boost his personal security.  However, Monte says, his advice was ignored. ‘The possibility that he might actually be killed outright doesn’t seem to occur to him,’ writes Monte.  ‘He feels safe in Miami.’  Months later, with Monte in New York recovering from a facelift, Versace was shot dead.
              Even though he was not Versace’s bodyguard, did Monte feel guilty about his inability to protect his client?  On the contrary, he turned up on the Nine Network’s A Current Affair and told Ray Martin that he felt ‘lucky’, because he could easily have been killed alongside Versace – a comment that caused the Nine switchboards to light up.  Monte did throw himself into investigating the death – a move that saw him appear on talk shows across the US.
              As in the Rockefeller case, Monte has adopted a contrary view of Versace’s death.  He does not believe the FBI’s claim that he was murdered by gay serial killer Andrew Cunanan – who committed suicide days later on a nearby houseboat.  He believes Versace’s family or the Italian Mob may be among the suspects, but for legal reasons he will go no further. ‘Do I know who killed Gianni Versace? No,’ Monte writes. “I simply have my suspicions … it was not Andrew Cunanan.’”

7. Set out below is a copy of the cover of The Weekend Australian supplement for 23-24 June 2001 as described above.

   
   
   

8. The publishers of The Weekend Australian have apologised in respect of the article and withdrawn the statements. Proceedings were instituted against Pan Macmillan by the present applicants in the Supreme Court of New South Wales. It also apologised. The applicants have accepted a formal Offer of Amends made by Pan Macmillan under Division 8 of the Defamation Act 1974 (NSW) (“the Defamation Act”).

9. Since 1997, the respondents have maintained a website with the domain name This website contained material about Monte, including photographs, together with a large number of newspaper articles concerning Monte and the applicants, including the Versace business.  It included the article in The Weekend Australian, which was reproduced in full on the website.  As at 29 July 2001, the website domain name was registered in the name of “Monte Investigation Group”.  The contact person in relation to administration, technical and billing was Frank Monte of Monte Investigation Group, 630 Fifth Avenue, New York.  The website remains accessible on a worldwide basis. 

10. I am satisfied that Monte caused to be published both the book and the article.

    Nature of the case – DECEITFUL CONDUCT

11. These proceeding were brought by the applicants to restrain the further publication of material, claimed to constitute misleading and deceptive conduct contrary to the Trade Practices Act 1974 (Cth) (“TP Act”) and the Fair Trading Act 1987 (NSW) (“the FT Act”). Claims were also made under other provisions of these two Acts. In addition, the applicants alleged that they have been defamed by the respondents. Further relief was sought in the nature of damages, both compensatory and exemplary, and costs. This part of the proceedings is not concerned with the amount of damages, but with questions of liability and remedies other than damages.

    Pleadings

12. The proceedings commenced on 10 August 2001 and the amended statement of claim was filed in court on 29 October 2001.

13. The applicants contended that the book contained the following false and misleading representations.

    As against the Versace Company:

    “14(a)     One or more of the Versace companies was criminally involved with the mafia.

    (b)One or more of the Versace companies had been laundering millions of ‘dirty’ dollars for Calabrian organised crime.

    (c)One or more of the Versace companies maintained secret ledgers that recorded it had been dealing with the Italian underworld.

    (d)One or more of the Versace companies was associated with a mobster from Milan called ‘Johnny the Cat’.

    (e)One or more of the Versace companies was being blackmailed because of its criminal involvement with the Italian underworld.

    (f)One or more of the Versace companies had been infiltrated by organised crime.”

    aS AGAINST SANTO:

    “(g)Santo Versace was criminally involved with the Italian underworld.

    (h)Santo Versace was criminally involved in laundering millions of ‘dirty’ dollars for Calabrian organised crime.

    (i)Santo Versace was reasonably suspected of murdering Gianni Versace.

    (j)Santo Versace was involved in maintaining secret Versace company ledgers that recorded transactions with organised crime.

    (k)Santo Versace was reasonably suspected of murdering Gianni Versace in order to conceal that the Second Applicant [Santo] was engaged in criminal activity.

    (l)Santo Versace was being blackmailed by a mobster.”

    AS AGAINST DONATELLA:

    “(m)Donatella Versace was criminally involved with the Italian underworld.

    (n)Donatella Versace was criminally involved in laundering millions of ‘dirty’ dollars for Calabrian organised crime.

    (o)Donatella Versace was reasonably suspected of murdering Gianni Versace.

    (p)Donatella Versace was involved in maintaining secret Versace company ledgers that recorded transactions with organised crime.

    (q)Donatella Versace was reasonably suspected of murdering Gianni Versace in order to conceal that the Third Applicant [Donatella] was engaged in criminal activity.

    (r)Donatella Versace was being blackmailed by a mobster.”

14. In addition, the applicants contended that the book contained the following statements which are false and misleading:

    “(s)Frank Monte or one or more of the Monte companies was employed or engaged by Gianni Versace.

    (t)Frank Monte or one or more of the Monte companies had a personal relationship with Gianni Versace.

    (u)Frank Monte or one or more of the Monte companies had a business relationship with Gianni Versace.

    (v)Frank Monte knew the matters referred to in (a) to (r) by reason of one or more of the relationships described in (s), (t) and (u).”

15. The use of the expression “personal” relationship in subpar (t) is intended to allege, as I read it, that Monte made false and misleading representations that discussions took place between Monte and Gianni in a business context in the course of which Gianni confided in Monte.

16. In addition, the applicants pleaded that Monte and Arkitude Holdings Pty Limited (“Arkitude”) made the above false representations through a website, and continued to keep those allegations on the website whilst believing them to be false.  It was also said that Monte organised the publication of excerpts from the book, including the excerpts in the article described above.  The applicant also pleaded in par 15A of the amended statement of claim that, by reason of publishing the book, Monte falsely represented in trade and commerce that the book is a work of fact. 

17. In relation to the false representations made by the respondents on the website, which is a publication available on a worldwide basis, the applicants relied on, among other matters, the publication of the representations and the continuation of publication of materials on the website, even after commencement of this proceeding, notwithstanding that some of the material was the subject of Orders by the High Court of the United Kingdom, restraining further publication in proceedings to which Monte was not a party but which the publishing newspapers had been a party.

18. The applicants contend that damage has been suffered by them and that Monte and Arkitude intended, threatened and were continuing to repeat their conduct.

19. The applicants’ claim in defamation was made against Monte only in respect of material published in the book and the article. In particular, the claim relied on his giving of authorisation for the book to be made available to The Weekend Australian for publication of the article.  The defamatory imputations alleged are essentially the same as the representations alleged in relation to the misleading and deceptive conduct claims set out in detail above, with the exception of subpars (s) to (v) inclusive, which were not included in the defamation action.

20. In the amended defence, Monte claimed that he submitted the manuscript of the book to Pan Macmillan and they revised, edited, and rewrote parts of it before printing the book. Arkitude contended that it had no connection or association with the book. There were denials by both respondents as to the allegations relating to breaches of the TP Act and FT Act. The defence also submitted that Monte is a “prescribed information provider” within the meaning of the TP Act and the FT Act, thus exempting Monte from the operation of the relevant provisions of those Acts. In addition, the respondents relied on a general right of freedom of speech pursuant to the Australian Constitution, although no other particulars were given in relation to this matter and the matter was not argued. As to the claim in defamation, there were denials, together with the non-admission of a number of the allegations and a range of statutory and common law defences.

    statements relating to deceased persons

21. Experience teaches that considerable caution should be exercised by a court before accepting an account of conversations attributed to a person since deceased, particularly where the conservations are central to the issues in question.  In this respect the observations of Wilcox J in Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 at 253, are apposite to the present case:

    “… it is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death.  Of course, that is not to say that such evidence cannot be true; it obviously may.  But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in the usual way.”

22. In the case of Monte’s book this observation is of particular significance because the book contained what are said to be extensive conversations with Gianni and Aristotle Onassis, both of whom are dead.  In the case of Onassis, as counsel for the applicants pointed out, Monte felt that he could use his name freely and without any permission because he was dead.  He had previously claimed categorically that he had obtained permission to list all clients named in his promotional brochure.

    WITNESSES

    Frank monte

23. The oral evidence of Monte extended over four days of detailed testimony and extensive cross-examination.  Having regard to the internal inconsistencies in his evidence, the inherent improbability of his claims in relation to his relationship with Gianni, the fabricated facsimiles and suspect documentary evidence relied on by him in relation to alleged appointments with Gianni, the evidence of Dr Strach and the unshaken evidence of other witnesses called in contradiction of his evidence, including the cumulative effect of documentary evidence furnished by travel documents and records kept in the ordinary course of the Versace business, I do not accept his evidence in relation to any matter where it was unsubstantiated by reliable documentary evidence and where it conflicted with the evidence of any other witness.  In many instances, where Monte specified a date, reference to contradictory documentary evidence cast strong doubt on his assertions.  Monte’s approach to confidentiality obligations under the alleged “agreement” he provided to Gianni, which he described as “a worthless piece of paper”, his reference to “poetic licence”, his modus-operandi, his readiness to improvise evidence and speculate on an opportunistic basis to advance his case from the witness box, and his false assertion that he had approval to use the names of his clients in advertising material, reinforce the conclusion that no reliance can be placed on his evidence with respect to facts in issue.

24. In many instances some corroborative evidence from persons said to have been involved could have been called.  None were called.  The lack of any documentary record or independent testimony or evidence of any other kind to support his case, in circumstances where Monte claimed to have had a confidential working relationship with an internationally famous designer over a period of eighteen months, is a cogent indication that there in fact was no relationship between Gianni and Monte.  This was especially so after it became evident to Monte that, following the death of Gianni on 15 July 1997, his assertions of a relationship with Gianni were immediately and vigorously challenged by the Versace business and family and one would therefore expect that any documentary evidence which corroborated his claims would be carefully preserved to verify his assertions.  However, no evidence in the nature of banking documents, documents relevant to funds paid or received, telephone records or other credible objective material was provided to the Court to corroborate any of Monte’s assertions relating to his relationship with Gianni.  By way of example, one such assertion was that he organised for Gianni to undertake an AIDS test.  However, no evidence was called in relation to the doctor said to have been in charge or the technician who had allegedly carried out the test after receiving a substantial payment.  No other person who may have been privy to Monte’s claimed contacts with Gianni was called, apart from his son, James, whose evidence I do not accept in relation to this aspect.  Many of Monte’s claimed communications with Gianni, according to Monte’s own evidence, were not followed up with either decision or action.  Many of the events recounted by Monte and, in particular, the story relating to Abu Akhtar in Egypt, travel well beyond the limits of credibility.  The countervailing evidence, especially when considered cumulatively, points strongly away from the scenario advanced by him as to what transpired over the eighteen months of his alleged retainer by Gianni.

1. Monte tendered an invitation to a memorial celebration in memory of Gianni at the Metropolitan Museum of Art, New York held on 4 December 1997.  However, Monte was not on the list of invitees.  His evidence did not advance the substance of his case as to any relationship with Gianni.  In fact, the invitation proved nothing except that Monte at some time was able to get hold of a printed invitation.  He said that he was present at this memorial and was recognised by Donatella.  She denied ever seeing him and I prefer her evidence on this question.  Given the tone of the communications between solicitors for the Versace family and Monte during 1997, after the death of Gianni, it is highly unlikely that he would have been invited or knowingly admitted to the function.  By that time, in the eyes of the Versace family, Monte was plainly persona non grata.

   Santo Versace

2. An attempt was made to attack Santo’s credibility on the basis of a taxation investigation and conviction in relation to alleged bribery of public officials at first instance in Italy in 1997, which was later reversed on appeal.  No mention was made in the book of the reversal of this decision which was in 1998, (prior to publication of the book and article), although there was a reference to the fact that the conviction was under appeal.  Santo admitted to the initial conviction and the imposition of a substantial penalty, but sought to explain it as part of a concerted crackdown by fiscal authorities on the operations of Italian fashion houses.  He pointed to the fact that the decision was reversed on appeal.  When giving evidence, he answered questions honestly and directly and I am satisfied that his evidence as to his business relations with his family should be accepted.  There was no successful attack in cross-examination on Santo’s testimony, nor was there any credible countervailing evidence.  Other evidence called for the applicants was consistent with Santo’s evidence.  Of course, Santo’s evidence cannot be taken to be conclusive as to the activities of his brother, Gianni, at all times.  Gianni undertook a large amount of travel and the two brothers were in different locations for a great deal of the relevant period in 1996 - 1997.  Nevertheless, his evidence points to a continual and open communication between members of the Versace family, both commercially and personally. In particular, I accept his evidence as to the closeness of family relations with Gianni.

   Donatella Versace

3. Donatella’s evidence was not successfully challenged in cross-examination. Nor was any countervailing evidence adduced to warrant disbelief of her testimony.  I accept her evidence particularly as to the close family and commercial relationship between her and her brothers and the open communication they shared.  Her evidence as to the activities of her brother Gianni was limited because they were apart for much of the time.  However, when taken into account with other evidence, it provided support to the absence of any relationship between Monte and Gianni and to the unlikelihood of Gianni having made allegations against her and Santo of the extreme serious nature, as claimed by Monte.

   JAmes Monte

4. James Monte (“James”) furnished a brief affidavit as to an alleged encounter between his father, Frank Monte and Gianni in Miami on or about 2 January 1997.  Gianni’s documentary travel records, including airline tickets, indicated that Gianni was in New York at this time.  For reasons given elsewhere, I do not accept that this meeting or any meeting between Monte and Gianni ever took place.  The unusual circumstances of this “meeting”, with James standing nearby, and the lack of any subsequent action following the meeting as contemplated by his evidence as to what he was told had transpired between his father and Gianni, served to reinforce the documentary evidence detailing Gianni’s travel movements.  I have reached the conclusion that James’ evidence cannot be accepted.  It was clear from the cross-examination that James acted at the direction of his father in relation to the activities of Arkitude and his relationship with his father appears to be a close one. His father is the sole shareholder of Arkitude, which employs James.  In cross-examination his recollection was poor and select.  I am satisfied on the evidence that his father has been a dominant influence on him in the conduct of the affairs of Monte Investigations Services in the relevant period from 1996 to the present time.  I do not accept his evidence where it conflicted with other evidence in relation to the alleged Miami meeting.

5. Although it is common ground that James went to Egypt in July 1996, his version of events is significantly different from that of his father as recounted in the book.  He claimed that he went to Cairo to meet a man called Abu whose other name he was not told.  If Monte’s evidence were to be accepted, there was an “agreement” between himself and Gianni dated 19 July 1996, which specified, in Monte’s handwriting, “Meet or locate Mr Akhtar in Egypt or other place”.  In the book, Monte stated that Gianni wanted to talk to James about what happened in Cairo and that this discussion was to take place early in 1997.  There was reference in the book to “the Arabs”, to the fact that the Arabs had threatened Monte and James and it was apparently agreed that Monte, James and Gianni would “go through everything at length in a few days”.  Within this context, where Gianni allegedly wanted to meet James, it is, to say the least, highly improbable that James would have been left standing across a street in Miami on 2 January 1997 while his father had a conversation with Gianni in respect of which nothing further occurred.  Moreover, even according to Monte’s account, the conversation with Gianni on that occasion made no reference to any activities in Egypt involving James.  James’ evidence did not provide any relevant corroboration for the allegations of Monte which are complained of.

   Justine Wallace

6. The evidence of Ms Wallace should be approached with considerable caution.  She was featured prominently in the book.  Both in chief and under cross-examination, it was evident that her recollection was not accurate in a number of respects and that she bore strong animosity towards Monte.  Her evidence as to her relationship with Monte was, in part, quite inconsistent.  However, notwithstanding these reservations, her evidence as to Monte stumbling across an original Versace facsimile in a New York street and filing it away for future reference on the basis that it may be useful at some future time has the ring of truth and was consistent with her statements that before Gianni’s death, Monte had spoken of Gianni to others as a client.  Her evidence was also consistent with a conclusion that Monte fabricated the facsimiles produced to the Court or was at least aware of their fabrication for the purpose of supporting his claims to an association with Gianni.  I am satisfied on the evidence referred to below that Monte was responsible for their fabrication.  Further, and independently of Wallace’s evidence, I am satisfied that there is a high probability that Monte obtained at least one authentic Versace facsimile before Gianni’s death and it was the existence of this document that contributed to Monte having the confidence to seek out and secure the extensive publicity he so successfully obtained after the murder.

   OTHER WITNESSES

7. A number of other witnesses associated with the House of Versace in Milan and the United States were called for the applicants, by video-link, including Giovanni Galbiati, the first applicant’s Group General Manager; Marta Colombo, his personal assistant; Carlotta Corazza, who for a short period was junior personal secretary to Gianni; Antonio Panizza, the auditor for the first applicant; Rebecca Sprizza, secretarial assistant for the applicants’ United States counsel; and Daniele Ballestrazzi, the Chief Financial Officer of the group.  Mr Ballestrazzi testified as to the travel records of Gianni.  There was no basis in the evidence led by the applicants for rejecting the substance of their evidence.  They were all available for cross-examination if required.  This evidence was not successfully challenged in cross-examination in the instances where there was cross-examination.  There was no counter evidence to contradict the evidence led by the applicants and I accept it.  I have kept in mind the association of the witnesses with the Versace business by reason of their employment by the Versace companies but I see no reason on the evidence before me to doubt their testimony or the authenticity of documentary material furnished by them.

   ANTONIO D’AmICO

8. The evidence was that during various parts of the period from early 1996 until the death of Gianni, his close and constant companion was Antonio D’Amico (“D’Amico”).  The evidence of Juan Deleon (“Deleon”), Gianni’s New York chauffeur, reinforced the existence of this close relationship.  Deleon stated that it was not the practice of Gianni to walk unaccompanied in public and that he was always accompanied by D’Amico.  D’Amico swore an affidavit, but it was not read in evidence.  No explanation was given for not calling D’Amico apart from the submission that he was not a necessary witness.  Reliance was placed by the respondents on the principle in Jones v Dunkel (1959) 101 CLR 298 at 321-2. It was argued that that principle touches on the present case because it is designed to strengthen the drawing of an inference available on other material before the Court. In the present case, I do not think that there is any inference available on the evidence, looked at as a whole, relating to the representations and conduct of Monte which could be strengthened by calling D’Amico. I therefore do not discount the force of the applicant’s evidence by reason of the failure to call D’Amico.

   REPRESENTATIONS – LEGAL ISSUES

9. This case does not call for a delineation of any boundary between the limits of consumer protection law and that body of law concerning defamation. Such a task would be fruitless because they are clearly capable of covering the same ground to come extent. The provisions of the TP Act and FT Act must be given their natural and ordinary meaning. If provisions of that legislation overlap to some extent with the traditional area of defamation law, it is not appropriate to read down the legislation by reference to any inferential or implied constraint that there should not be any such overlap. This approach has been established in the case of the common law principle of passing off in its relation to Trade Practices legislation. It is therefore no defence to a claim under the TP Act or the FT Act to argue that the field is already covered by the law of defamation. There is no reason why the Trade Practices or Fair Trading legislation should be read down to “accommodate” this body of law.

10. In particular, when deciding on the reach of the “information provider” exemptions in the legislation, it is necessary to read these provisions in each of the Acts as a whole, taking into account the circumstances in which these provisions came to be inserted in the legislation.  The task for the Court is to consider the operation of those sections in the circumstances before it and not to limit the scope of the legislation by reference to the common law or legislation relating to defamation.

11. In these proceedings, the basic claims under ss 52 and 53 of the TP Act and ss 42 and 44 of the FT Act, for misleading and deceptive conduct and for the making of false representations in trade or commerce, were essentially that:

    ·the respondents made and threatened to make certain representations in trade and commerce;

    · those representations are false;

    ·by reason of the respondents’ conduct in making and threatening to make those false representations, the applicants have suffered damage.

    Furthermore, it is said, the respondents have each engaged and are threatening to engage in conduct that is misleading and deceptive.

    The applicants submitted that the respondents falsely represented an affiliation between Monte and/or the Monte group of companies and Gianni and/or the applicants in contravention of s 53 of the TP Act and s 44 of the FT Act. The claimed affiliation is that Monte or one of his companies had Gianni or companies of his as a client. It was further claimed that the respondents falsely represented that Gianni, or one or more of the Versace companies, agreed to acquire his, its or their services contrary to s 53(bb) of the TP Act and s 44(d) of the FT Act. The applicants also submitted that the respondents falsely represented that their services for private investigation have or had the sponsorship or approval of Gianni or any of the Versace companies contrary to s 53(c) of the TP Act and s 44(e) of the FT Act.

12. Section 52 of the TP Act provides:

    “52 Misleading or deceptive conduct

    (1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

    (2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).”

13. Section 42 of the FT Act is in identical terms to s 52 of the TP Act, with the exception that s 42(1) refers to “[a] person” whereas s 52(1) refers to “[a] corporation”.

14. Section 53 relevantly provides:

    “53 False or misleading representations

    A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:
    …

    (bb)falsely represent that a particular person has agreed to acquire goods or services;

    (c)represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

    (d)represent that the corporation has a sponsorship, approval or affiliation it does not have;

    …”

15. Section 44 of the FT Act is in similar terms to s 53 of the TP Act.

16. At the heart of the applicants’ case is the contention that there was never a relationship of any kind between Monte and Gianni.  If there was a relationship, the basis for most of the allegations complained of is destroyed.  It was submitted that the relationship which was said to have been evidenced by telephone conversations, meetings, facsimiles, agreements, diary notes, appointment books, and the direct observations of James in respect of one alleged encounter between Monte and Gianni, never in fact existed.

    Monte/Gianni ‘relationship’ – factual findings

17. The relationship was said to have begun after an appearance on 17 January 1996 by Monte on a television show aired by the American Broadcasting Corporation network, in which Monte talked about private investigation techniques.  Monte said that after the television show was aired, he received a telephone call from a person whom he later knew to be Gianni. According to Monte, the caller said he was interested in talking about security and described himself as Gianni, an Italian businessman, in New York.  Monte said that, to the best of his recollection, the telephone call was on Thursday 21 March 1996, and that he subsequently met with Gianni on that day.

18. The meeting was said to have taken place at 5 East Sixty-Fourth Street, Manhattan.  Monte said that he had a conversation with Gianni at the Café Pierre.  Gianni wanted to talk about security for his houses.  He offered to send Monte some shirts but Monte declined.

19. Airline tickets were tendered by the applicants as evidence of the travel movements of Gianni.  These support the inference that Gianni was not in New York on 21 March 1996.  They record that he was booked to fly from New York to Miami on 9 March 1996 and return on 25 March.  It is possible that Gianni made a detour to New York between those dates.  However, such a conclusion would be pure speculation without any evidentiary basis.  In addition, there was evidence from Gianni’s personal chauffeur in New York, Deleon, which I accept, that it would be most unusual for Gianni to walk through New York on his own.  He was usually accompanied by his close friend, D’Amico.  Deleon was working for Gianni from June 1996 onwards but I accept his evidence as to Gianni’s normal patterns of conduct as there is nothing to suggest that in early 1996 his behaviour differed to that in mid-1996.  This evidence is not conclusive, but it again points to a finding against Monte having had a meeting with Gianni on 21 March 1996.  Deleon said that he was closely aware of Gianni’s movements in New York in 1996 and 1997 and that Gianni never mentioned a meeting with Monte.  Nor did he recall Gianni ever going to the Café Pierre.  Monte had a record in his appointment book for 21 March 1996 in which there is a reference to “Italian man”.  However, Monte was unsure whether this was a reference to Gianni.  For reasons I will elaborate on later, I consider that the appointment book is a suspect document and I am not prepared to rely on the accuracy of anything recorded in it relating to Gianni.

20. There is no other appointment book entry or documentary record of any kind in relation to this first alleged meeting between Monte and Gianni.  One would ordinarily expect some record, note or confirmation of this meeting.  There were also no witnesses of any kind to this encounter. 

21. Monte claimed that between April and July 1996, he received more telephone calls from Gianni and that the two met several times, always at the same place, which was a bench in Central Park near the Children’s Zoo.  He claimed Gianni asked him questions about bugging, security and kidnapping and that he gave Gianni his telephone numbers and Gianni always called him by the name “Franco” and never referred to him by the name of Monte. Monte claimed that he told Gianni that he could not give a firm estimate of the cost of guarding him and his stores against theft but if Gianni paid him a retainer of $US one million per year, Monte would see what he could do.  This offer was not taken up by Gianni and there was no note or record of this alleged exchange and no other witnesses called to substantiate it.  Monte said that in another of the meetings, Gianni brought a number of listening devices and Monte gave him some advice as to the range of the listening devices and their quality.  Nothing seemed to have eventuated from this conversation.  The suggestion in Monte’s affidavit was that there were a number of meetings in that period at Central Park.

22. During the period from the end of April to the end of June 1996, Gianni’s travel records, which I accept as genuine, indicated that Gianni was only in New York between 1-9 May 1996.  Monte could not point to any entry in his appointment book to support any meeting with Gianni during this period.  From Monte’s appointment book, it appeared that he was in Los Angeles until 3 May.  Therefore, it would appear that there were only six days in the two month period suggested by Monte in which the alleged meetings could have taken place.  This does not sit easily with the suggestion that over the two months, there was a number of meetings and discussions.

23. On 29 May 1996, there was an appointment book entry, in the middle of which appeared the words “items for Versace”.  According to the handwriting and document expert, Dr Strach, whose evidence was accepted by Monte’s expert and counsel, the words “items for Versace” were written in different ink to the rest of the entry, indicating that they were probably inserted at a different time.  He could not say when they were entered.  This was one of the features of the appointment book which, in my view, renders it unreliable as containing records of conversations or meetings between Monte and Gianni.  In his affidavit, Monte made no reference to 29 May or any “items for Versace”.  I do not accept that any of these meetings, alleged to have taken place between April and the end of June 1996, took place.

1. On 3 June 1996, Monte stated that Gianni called him and Monte sent by way of facsimile, a contract for unspecified security operations and a retainer.  This document was sent back unsigned.  There was an appointment book entry for this date which stated “fax from Versace”.  I do not accept that the entry was made on that day or that it affords any evidence of any contact with Gianni.  The entry was written in different ink to other surrounding entries.  On the evidence, I do not accept it as a genuine record. 

2. In relation to the facsimile referred to above, some copy facsimiles were produced by Monte and tendered but all these were shown by Dr Strach, whose evidence I accept, to have been fabricated in relation to both date and content.  The subject of the facsimiles and evidence relating to them is dealt with below.

3. Monte claimed that Gianni called him in Miami on 8 June 1996.  According to Monte, Gianni inquired as to how easy it would it be for someone to kidnap him in New York or Miami.  Monte further claimed that there was another call from Gianni on 9 June 1996 relating to surveillance by the Federal Bureau of Investigation (“FBI”).  However, the appointment book entry for that date made reference to “ringing back Versace at 2pm”. This is inconsistent with Monte’s claim of Gianni calling him.  I find that these conversations did not take place.

4. In early July 1996, (Monte said later it was 2 July), Monte stated that Gianni telephoned him at home in New York and asked him to meet for coffee at Nelos restaurant coffee shop on Madison Avenue.  He said that there was a discussion about money laundering and blackmail by someone Gianni allegedly called “Johnny the Cat”, a Calabrian criminal, who took Gianni’s handwritten records and was demanding $US five million for their return.  There was discussion about Monte going to Milan.  However, travel records and hotel vouchers, which were not challenged by the respondents, indicated that this meeting probably did not take place because Gianni was in Italy, on 2 and 3 July 1996 and a copy of the hotel receipt from the “Hotel Ritz” showed that he was in Paris between 4 and 10 July 1996.  The travel records also indicated that Gianni was in New York from 10 to 13 July.  Monte alleged that another conversation took place “a few days later”, after 5 July, at Central Park near the Children’s Zoo, in which Gianni referred to an Algerian man, named Abu, who was the flatmate of “Johnny the Cat”, and who was said to have the ledger books.  Monte was asked to go to Milan and “pay him off”.  A few days later, in a telephone conversation with Monte, Gianni was said to have promised to give James a dozen suits.  However, there was no indication that these suits were ever sent or received and it was not mentioned by either Monte or James in their evidence.

5. There was an entry in the 1996 appointment book for Friday 5 July referring to Gianni and a problem with books.  According to the evidence of Dr Strach, this entry was probably written out of sequence with entries in the surrounding pages.  This conclusion was reached through an analysis of latent writing impressions on the pages surrounding the appointment book entry.  Dr Strach identified the entry as suspect.  I am satisfied that this reinforces the doubt on any meeting having been held in early July of 1996.

6. Monte alleged that a further meeting took place with Gianni on 6 August 1996 in which there was discussion about Santo and Donatella.  There was no entry in the 1996 appointment book in relation to this.  Monte claimed that he recalled the appointment because it was shortly after his son James came back from the Egyptian assignment with Abu and they needed to give a report to Gianni.  A meeting was said to have taken place in a restaurant in Barney’s Department Store on Madison Avenue.  There was no reference in Monte’s recollection of the meeting to any report as to James’ activities.  Monte however, recalled that a number of serious allegations were supposedly made by Gianni against Santo and Donatella in that conversation.  According to Monte, he told Gianni that he could provide him with around the clock protection but Gianni declined this offer.  There was no evidence provided to corroborate this meeting.  I am satisfied that it did not take place.

7. There were more telephone conversations alleged to have taken place on various dates.  In the 1996 appointment book, entries relating to Gianni appeared on the dates of 20, 25 and 26 October 1996.  Dr Strach, found that these entries were made out of sequence with entries appearing on the surrounding pages.  The corollary of Dr Strach’s findings in relation to these particular entries is that it would be unsafe and unreliable to proceed on the basis that these entries were made on the date under which they were written.  Thus, they could have been written at any time.  On the basis of Dr Strach’s evidence, which was not challenged, I conclude that it would be unsafe to treat these as genuine entries and accept them at face value.  In relation to a number of other entries in the 1996 appointment book, Dr Strach noted that they were made in different ink from that used for most surrounding entries.  These entries appeared beneath the following dates: 3 June, 5 July, 31 July, 29 November, 30 November and 31 December 1996.  The entries for 29 and 30 November were also out of sequences with entries on surrounding pages.   I do not consider any of these to be genuine entries.

8. Monte claimed that Gianni called him “a few times” on 30 November 1996 about possible meetings.  They met at 5 East Sixty-fourth Street and walked to Central Park.  Thereafter, they supposedly went to the lower level restaurant at Barney’s Department Store where they discussed blood analysis.  Monte claimed he was given money for his “past efforts”.  There was no record in relation to the receipt, payment or deposit of this money, nor any contemporaneous note made of the payment.  Nor is the amount specified.

9. These purported entries in the 1996 appointment on 29 and 30 November referred to “Cat”, which Monte said is a reference to Gianni.  He said that this was the name used by him, in the interest of discretion, so as not to disclose the identity of his client.  However, the expression “Cat” was also used in an entry of 26 October 1996, next to which there was an entry in the adjacent column using the name “Versace”.  There were also numerous other references to “Versace” in the appointment book, in addition to meetings with “Versace” and the like.  This is quite inconsistent with the improvised explanation proffered in the witness box by Monte.  Monte’s claim that “Cat” was used as a code because there was an escalation in the seriousness of Gianni’s affairs, is simply not credible given that the word “Versace” was used throughout the appointment books, including the records for 1997.

10. As mentioned earlier, there was a further alleged meeting between Monte and Gianni on 2 January 1997 in Miami.  James was allegedly nearby but could not hear any of the conversation, although he stated that he recognised Gianni from shows on television.  However, travel documents indicated that Gianni was not in Miami on 2 January 1997.  He flew from Miami to New York on 30 December 1996.  Again, these records were not challenged in cross-examination.  There was also no indication of any evidence to support a possibility that Gianni made a trip back to Miami.  Such a conclusion could not be reached on the material.  Furthermore, the claim of James being left in waiting across the road while his father spoke with Gianni cannot be substantiated, especially when one considers that James stated that his father said to him after the alleged meeting:

    “Well that went well, he wants us to meet again in a few days, so we will go to the Breakers Hotel and wait for his call.  He wants us to do some more work.” 

11. There was no indication of any follow up on the suggestion of a further meeting “in a few days” in the affidavits of either James or Frank Monte.  This only serves to reinforce the conclusion that it cannot be said that any meeting took place between Monte and Gianni where James was present.

12. There was an earlier appointment book entry for 6 December 1996 mentioning Gianni and a facsimile.  This related to Monte allegedly receiving a facsimile regarding blood samples and then forwarding the original facsimile and documents to a private Milan address of Gianni.  There was simply no corroboration of this suggestion.  No records have been produced from a doctor regarding the blood samples, or of the charges for the test which Monte alleged he arranged to have carried out at the request of Gianni.

13. In addition to the above anomalies in the evidence relied on by the respondents, further discrepancy is found in the lack of resolution in relation to a number of agreements that arose from alleged conversations between Monte and Gianni.  For example, Monte made reference to offering Gianni protection for $US20,000 per week, with Monte’s son and a SAS commando to be with Gianni around the clock for six days continually.  According to Monte, Gianni stated that he would call Monte the following day.  There was no follow up on this conversation.  There was also said to have been a discussion concerning Monte carrying out an urgent stocktake of some stores in New York because Gianni had suspected that jewellery was being stolen.  The magnitude, nature and extent of such a stocktake make it highly unlikely that such an enormous task would have been given to Monte.  In fact Monte agreed that the stocktake did not take place. In addition, there was also reference to a conversation on 30 May 1997, when Gianni allegedly referred to sending a gift to Monte’s home.  There was no record of any gift ever having been sent or received.  There was also a supposed reference in that conversation to Monte and James and some “mercenaries” being available by the end of July and mid-August, but again, there was no indication of any arrangements having been made for the assembly of such persons.

14. Having regard to the evidence referred to above, the inherent likelihood as to what one would expect had Monte’s assertions been true, and the absence of any record or corroboration of any kind that could be safely relied on, I have reached the firm conclusion that there was never any relationship, business, confidential or otherwise, between Monte and Gianni.  Statements made to the contrary in the book, the article, on the website and on oath by Monte are false.  I do not accept that Monte ever spoke or otherwise communicated with Gianni, either in person, or by facsimile or telephone as alleged in the book, the article, the website and in his sworn evidence to this Court.

    FAcsimiles RELIED ON BY MONTE

15. In support of his claim of a relationship with Gianni, Monte relied on a series of facsimiles allegedly from Gianni, although purportedly signed in his name by his junior personal assistant, Carlotta Corazza, with her initials “CC”.  The reliance on these facsimiles was in addition to the reliance on the appointment books for 1996 and 1997 and a number of loose sheets of paper which he claimed to be diary pages.

16. The copy facsimiles referred to in the affidavit evidence, which were produced to the Court, were the subject of a detailed document and handwriting analysis by Dr Strach.  I am satisfied that Dr Strach was well qualified to give expert evidence as to the authenticity of the documents and I accept that he offered his evidence with expertise, appropriate diligence and caution.  No evidence to the contrary was called for the respondents.  In fact, the evidence by Dr Strach relating to the analysis of handwriting in the appointment books and diary pages was accepted on behalf of the respondents.  With respect to the material concerning the facsimiles, Monte conceded that after hearing Dr Strach’s evidence, together with the evidence of other witnesses, he could not rely on the evidence of those facsimiles to support his claim of having had any relationship or contact with Gianni.  A handwriting expert was consulted by the respondents and was present in Court during part of the cross-examination of Dr Strach.  However, no evidence was brought by the respondents to challenge the evidence or conclusions of Dr Strach.  Monte simply resorted to highlighting the limitations in the evidence given by Dr Strach.

17. In his first report Dr Strach, who holds a Doctor of Philosophy in Chemistry and continues to practise as a forensic handwriting and document examiner, concluded in relation to the facsimiles relied on by Monte as follows:

    “A likely scenario for the appearance of the fax cover page details … is that they originated in a genuine fax transmission from Gianni Versace.  Original details have been removed and on copies of the ‘cleaned’ fax transmission new messages have been typed, computer printed or photocopied.  Parts of the fax TTI headers have been removed to avoid the presence of obvious duplication.  Literal cut and paste or other image manipulation processes along with several reproduction steps would have been used to produce various versions of the documents examined.”  (Emphasis in original)

18. In carrying out his handwriting analysis, Dr Strach had regard to genuine signatures and documents furnished to him by the applicants.  He compared those with the questioned documents produced by Monte.

19. After Dr Strach’s first report, further documents produced to him by Monte were considered by him in a second report.  In this second report, Dr Strach stated that he had received and examined “originals” (earlier generation copies) of some of the questioned documents referred to in his first report.  He then proceeded to analyse these earlier generation copies, carrying out his analysis by reference to the presence of what he described as vertical, linear voids in the documents under examination.  He concluded that it was highly probable that the facsimile cover pro forma sheet details reproduced on the documents examined by him originated in the one facsimile transmission.  He went on to make further findings to the effect that the logical inference from his examination was that the genuine facsimile transmission used to create the questioned documents contained lines that had been cut off.  The subsequent documents furnished to him were to some extent clearer documents than the earlier documents.  This group of clearer documents was not tendered on behalf of Monte in evidence.  Dr Strach considered that there was “very strong evidence” that all of the message texts on the questioned documents had been added to an existing facsimile transmission and this reinforced his conclusion as to the likely scenario referred to in the first report which he put as being a highly probable explanation for his observations.

20. On all the facsimile cover sheets there was the House of Versace medallion emblem.  Above the name “Gianni Versace” at the bottom of each page there appeared the initials “CC” which Monte said were the initials of Carlotta Corazza.  Her name was incorrectly spelt in the book and the affidavits sworn by Monte.  The evidence indicated that she had been a junior personal assistant to Gianni between March 1996 to July 1997.  Her evidence was that the initials on the documents produced by Monte were not in her handwriting and that she had never heard of Monte at the time the reported documents had been dated.  She gave evidence that she had never signed or sent any facsimiles to Monte.  Her evidence was not shaken in cross-examination and I accept it.  At the request of counsel for Monte, she wrote her initials rapidly on a sheet of paper and these were made available to the respondents.  No evidence was called by the respondents to the effect that the handwritten initials on that sheet were in any way similar to those on the facsimiles.  One such facsimile relied on was dated 8 October 1996.  This October facsimile contained a somewhat terse assignment to Monte that he was to meet Abu at the Beverley Hills Hotel, California on 19 October 1996 and that Abu would call him.  It further stated there had been a funds transfer to “Amex”.  Above the italicised words “Gianni Versace” on the facsimile, there appeared the initials “CC”.

21. In addition, the facsimiles in question were dated from 31 May 1996 through to 8 October 1996.  Ms Corazza’s evidence was that by September 1996 she was not working at the Via Gesù office of Gianni Versace SpA in Milan from which the facsimiles appear to have been sent according to the address on the cover page, but that she had moved to the administrative section of another office.  This supported her evidence that it was highly unlikely that she did send any facsimiles to Monte.  It was also apparent that it was highly unlikely that she would have had the authority to sign facsimiles or confidential material on behalf of Gianni.

22. Carlotta Corazza also denied Monte’s assertion that she obtained or agreed to obtain any telephone records at any time from Monte which he wanted so as to verify his relationship with Gianni.  She said that she never spoke with him in the period in question and that as at July 1997 she did not even know how to get such records because it was outside her field of responsibility.

23. Doubt is further cast upon the authenticity of the facsimiles when one examines documents claimed to have been attached to two facsimiles in particular.  On two occasions, an agreement was said to have been entered into between Monte and Gianni for the provision of investigative services.  The two agreements were substantially in the same form.  These documented agreements were allegedly sent by way of facsimile, on which there appeared the initials “CC”.  The agreements themselves were purportedly signed by Carlotta Corazza by way of her initials “CC”.  One problem lay in the fact that there was an inherent improbability that Gianni or Carlotta Corazza would have signed any of the purported ‘Agreement for Service And Authority To Perform Assignment’ Monte claimed to have sent to Gianni.  The handwriting on both, with the exception of the initials “CC”, is that of Monte.  The agreements were purportedly binding as between Sobranie Pty Limited (the investigator) and Gianni, an individual of Via Gesù, Milan.  According to Australian Securities and Investment Commission (“ASIC”) records, Monte’s two sons, James and Adam, were directors of Sobranie Pty Limited between 1992 and 1998, and 1994 and 2000 respectively, while Monte was a director from 24 September 1992 until 6 April 1994.  The consideration for the 31 May 1996 agreement was $5,000 in what appeared to be US dollars.  The work specified in the agreement was for the performance of confidential inquiries and the provision of advice.  There was a confidentiality clause as to the client’s affairs and an hourly rate specified at $US 100 per hour.  The “instructions” for information obtained by the investigator were to be treated as confidential and not to be disclosed by the investigator to third parties, other than the client, without express written consent of the client or pursuant to a court order.  It is to be noted in passing that Monte did not hesitate, after the death of Gianni, to seek out publicity and disclose his alleged commercial relationship with Gianni.  His explanation when questioned about his attitude to the non-disclosure appeared to be that Gianni (like Onassis) had passed away and that therefore the obligation no longer applied.

24. The agreement of 19 July 1996, said to have been enclosed with the facsimile of 22 July, was almost identical to the May agreement, except for the retainer, which was shown to be as $20,000 (in unspecified currency).  The assignment also differed in so far as it dictated for the investigator to “meet or locate Akhtar in Egypt or other place”, a somewhat open ended and non-conclusive assignment.  There was no detail as to what is to or what may happen when Akhtar is met or located, despite the fact that the client was to provide to the investigator all such information, documents and other cooperation as the investigator may require.  This whole scenario smacks of unreality.  I do not accept it.  There was a reference in the facsimile message allegedly signed by Carlotta Corazza on behalf of Gianni to “Money as before” yet there was no evidence of any banking records, note, receipt or other documents as to the payment or expenditure of this money.  Monte took the view that because the agreement was a New South Wales document it was not in any way binding upon the parties.  He said that Gianni only wanted to have something in writing for his own comfort or satisfaction.  It is difficult to see what comfort or satisfaction the agreement could give.  Again, this seems highly improbable and undermines any attempt to assert the authenticity of the documents and the facsimiles in general.

1. The relevant approach for present purposes for a determination of this question is that prescribed by Hunt A-JA in Morgan v John Fairfax & Sons Ltd (No 2) (1991) 23 NSWLR 374 at 387-388:

   “(1) The conduct must have been reasonable in the circumstances to publish each imputation found to have been in fact conveyed by the matter complained of. The more serious the imputation conveyed, the greater the obligation upon the defendant to ensure that his conduct in relation to it was reasonable. Of course, if any other defence (such as truth or comment) has already been established in relation to any particular imputation found to have been so conveyed, it is unnecessary to consider the reasonableness of the defendant’s conduct in relation to the publication of that particular imputation.
   (2) If the defendant intended to convey any imputation in fact conveyed, he must (subject to the exceptional case discussed in Barbaro’s case, and perhaps also that discussed in Collins v Ryan) have believed in the truth of that imputation.

   (3) …

   (4) The defendant must also establish:

   (a)that, before publishing the matter complained of, he exercised reasonable care to ensure that he got his conclusions right, (where appropriate) by making proper inquiries and checking on the accuracy of his sources;

   (b)that his conclusions (whether statements of fact or expressions of opinion) followed logically, fairly and reasonably from the information which he had obtained;

   (c)that the manner and extent of the publication did not exceed what was reasonably required in the circumstances; and

   (d)that each imputation intended to be conveyed was relevant to the subject about which he is giving information to his readers.

   The extent to which the inquiries referred to in par (4)(a) should have been made will depend upon the circumstances of the case, in particular the nature and the source of the information which the defendant has obtained, and whether the position, standing, character and opportunities of knowledge of the informant (as perceived by the defendant himself) are such as to make his belief in the truth of that information a reasonable one:…. It is necessary to keep in mind that each of the matters referred to in par (4) are relevant to the reasonableness of the defendant’s conduct; they do not raise questions independently of that issue…
   Bearing in mind the precept of the Privy Council in Austin v Mirror Newspapers Ltd (at 360) that it would be impossible to give any comprehensive definition of what conduct will be held to be reasonable in the circumstances, and that it would be most unwise to attempt to do so, the above propositions do not purport to be exhaustive.” (Emphasis added)

2. For reasons given earlier I have concluded that the conversations and meetings between Gianni and Monte never took place and that his claims to have any relationship with Gianni are mere fabrications.  It was submitted that even on these findings it would be open to the Court to find that it was reasonable for Monte to publish the imputations found to have been conveyed and reliance was placed on the reasons of Lord Diplock in Horrocks v Lowe [1975] AC 135 at 150 as follows:

   “… 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. The freedom of speech protected by the law of qualified privilege may be availed of by all sorts and conditions of men. In affording to them immunity from suit if they have acted in good faith in compliance with a legal or moral duty or in protection of a legitimate interest the law must take them as it finds them. In ordinary life it is rare indeed for people to form their beliefs by a process of logical deduction from facts ascertained by a rigorous search for all available evidence and a judicious assessment of its probative value. In greater or in less degree according to their temperaments, their training, their intelligence, they are swayed by prejudice, rely on intuition instead of reasoning, leap to conclusions on inadequate evidence and fail to recognise the cogency of material which might cast doubt on the validity of the conclusions they reach. But despite the imperfection of the mental process by which the belief is arrived at it may still be ‘honest,’ that is, a positive belief that the conclusions they have reached are true. The law demands no more.” (Emphasis added)

3. In my view, in the present case the publication by the respondent is properly characterised as untrue defamatory matter published recklessly without considering or caring whether it be true or not, such that the publication is not the truth of what is published.

4. In his affidavit Monte stated that he believed that the representations conveyed by the book and the imputations conveyed by the article were true. He also stated that the representations and imputations conveyed by the book and the article were honest comments which he believed he was entitled to make.  Notwithstanding this, in cross-examination, Monte did not assert that any of the imputations allegedly conveyed against the company and Santo were true. His testimony was that, in relation to the imputations alleged in subpars 27(a), (b), (c), (d), (e), (f) and 28(a), (b), (c), (d), (e) and (f), he did not know one way or the other whether they were, as a matter of fact, true or false.  He said that he had not investigated them and had not intended to convey them in his book.  In respect of the imputations conveyed against Donatella, Monte did not assert the truth of subpars 29(c), (e) and (f).  He did, however, submit that he had reasonable grounds to assert the truth of the imputations alleged in subpars 29(a), (b) and (d).  In my view, he did not have any such grounds in the light of the rejection by the Court of any association with Gianni.

5. In the present case I do not consider that the action of Monte in publishing the material was reasonable.  He made no inquiries as to the objective truth of any of the allegations and made not attempt to furnish any evidence in relation to it, either oral or documentary.  The allegations were extremely grave and reasonable conduct would require some investigation before publication.  He made some general inquiries with the police in Miami and collected gossip and rumours from a number of media sources which were not substantiated in any objective way and repeated them without verification.  He fabricated a non-existent relationship with Gianni.  He could not point to any credible documentary evidence to support any allegation and I have found that he fabricated some of the documentary material he relied on.  He failed to refer to the reversal of the conviction of Santo Versace on appeal and he made a large number of grave, unsubstantiated, and sensational allegations against each of the applicants without any foundation.  In the case of Donatella and Santo this was done with malice in publishing the material.  Accordingly, the defence based on qualified privilege has not been made out.

   COMMENT

6. Monte relied on the defence of comment under s 32 of the Defamation Act. To make out this defence it is necessary that the comment be based either on proper material for comment or to some extent on such material.

7. Monte submitted that such proper material is found in the alleged conversations which he had with Gianni.  Inquiries made to knowledgeable and reputable journalists were also relied on together with various newspaper articles in evidence and some other general inquiries which were referred to in broad terms.

8. Because I have held that the conversations with Gianni did not take place, this basis for comment does not exist.  The newspaper articles so far as relevant simply generate and recirculate rumours, speculation and gossip about the applicants, without providing any evidentiary factual basis. Inquiries made of so called reputable and knowledgeable journalists do not elevate the gossip, in the absence of any tangible, factual supporting material, to the level of proper material for comment.  This material has not been shown to be a matter of any substantial truth or indeed of any truth.

9. It is also important to take into account, when considering the defence of comment, that most, if not all, of the allegations made by Monte, were provided as statements of fact, what Monte had been told by Gianni, not as matters of comment.  There was some speculation as to what may have happened in the light of what Monte was told, but this speculation was itself based on the false premise that there was a relationship, contact or discussion with Gianni.

10. Furthermore, the defence is defeated by s 33(2).  In so far as this case is concerned, this section provides that a defence of comment does not apply if it is shown that when the comment was made it did not represent the opinion of Monte.  As mentioned above, the evidence in cross-examination was that Monte admitted that he never believed any of the imputations in par 27 against the company were true.  When asked about the imputations concerning Santo he said that he did not believe the imputations in par 28 to be true.  In relation to Donatella, he said that only subpars 29(a) and (b) and (d) were objectively true and that his belief was held as a result of what he was allegedly told by Gianni and from reading newspaper clippings and information from journalists and inquiries.  He did not assert that he believed any other imputations against Donatella were true.  In these circumstances the defeasance provision in s 33(2) in relation to comment is applicable to counter Monte’s defence.

11. A further ground on which the defence of comment is defeated is that the so called comment was not related to a matter of public interest within s 31 of the Defamation Act.

12. Section 31 of the Defamation Act provides that the defence of comment is not available unless the comment relates to a matter of public interest. The notion of public interest was considered by Simpson J in Green v Schneller [2000] NSWSC 548, where her Honour applied the High Court decision in Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183. At [24] of her reasons, after referring to Bellino, her Honour stated:

    “There the majority held that the concept of a subject of public interest entails the notion that the person or institution whose activities are involved has engaged in activities that either inherently, expressly or inferentially invite public criticism or discussion. … A salacious interest by members of the public in a particular subject matter, of which they had no previous knowledge and which was introduced to them by the very publication in question, does not translate the subject matter of the publication into a matter of public interest …”

13. Her Honour’s remarks are especially apposite in the circumstances of the present case.  Scandalous gossip and rumour giving rise to curiosity or interest cannot create a topic of public interest which can then be relied on to justify the repetition of that material, on the ground that it invites public criticism or discussion.

14. In Bellino, Dawson, McHugh and Gummow JJ at 219-221 said:

    “… a ‘subject of public interest’ was understood in the law of defamation to refer to the conduct of a person engaged in activities that either inherently, expressly or inferentially invited public criticism or discussion …

    For the purpose of s 377(8), the subject of the public interest need not be concerned with the conduct of the plaintiff.”  (Emphasis in Original)

15. In one sense the conduct of the applicants or those involved in the Versace business could possibly be a matter of “interest” to the public.  This does not mean that groundless allegations of reprehensible conduct attract comment on such non-existent conduct.  There must first be some activity or conduct which has occurred or is considered on reasonable grounds to have occurred in respect of which comment can be made.  Under the guise of comment, groundless assertions cannot be fabricated and then “commented” upon by way of evaluative appraisal so as to make good a defence of comment.  That, in substance, is what Monte’s case in relation to comment amounts to once it is accepted (as I have found) that the matters referred to by him, namely the conversations with Gianni, never took place.  I do not accept Monte’s submission on this aspect.

    MALICE

16. Although I have found that the respondents have failed to make good their defence of qualified privilege, the element of malice was alluded to during the hearing before me and in the submissions made by the parties.

17. If proven by the plaintiff or applicant, malice on part of a defendant or respondent serves to defeat a defence of qualified privilege. The law relating to malice seeks to protect the community from action occasioned by improper or malicious motive. The classic enunciation of the law is found in Lord Diplock’s reasoning in Horrocks v Lowe [1975] AC 135, where his Lordship stated at 149:

    “ …the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial……he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. ‘Express malice’ is the term of art descriptive of such a motive. Broadly speaking, it means malice in the popular sense of a desire to injure the person who is defamed and this is generally the motive which the plaintiff sets out to prove.”

18. Thus, the improper motive that a plaintiff will usually seek to establish is an intention on the part of the defendant to cause injury to the plaintiff through the defamatory material. Normally, a failure on the part of the defendant to inquire into the truth, knowledge of the falsity of the defamatory material or recklessness as to whether the matter complained of was true or otherwise false, will serve to indicate the improper motives underlying a defendant’s actions.

19. In the present case, the applicants submitted that Monte’s actions were on occasion manifested by inherent malice towards members of the Versace family, and in particular, Santo and Donatella.  Although these assertions have no impact on the outcome of these proceedings in so far as I have concluded that the respondents have failed in their defence of qualified privilege, I will nevertheless address the issues raised by the parties in relation to Malice.

20. In essence, I accept the submissions by the applicants.  I am satisfied in the present case having regard to the nature and gravity of the allegations made and the absence of any basis presented for publicly making such imputations in relation to all the matters complained of, which I have found to be made, Monte was motivated by malice, particularly in relation to imputations relating to Donatella and Santo.  The affidavit of Monte, which failed to mention the reversal on appeal of the conviction of Santo, coupled with the extremely grave allegations against Donatella and Santo in relation to the murder of their brother which were presented on an entirely false basis, are in my view, sufficient to establish malice as an operative factor in the making of the representations and imputations.  The affidavit evidence of Monte, which goes to extreme lengths to attack Donatella with baseless assertions founded on non-existent conversations not in the book or the article, clearly emanates from a deep seated and bitter resentment towards her.  There was no evidentiary basis in this case for such an attack.  I am satisfied that Monte, in relation to the matters complained of, acted with reckless disregard to the accuracy of that material in failing to make any substantial inquiries.  It is to be noted that malice was not the sole motivation.  I am also satisfied that Monte acted to promote his reputation and his business as a private investigator, as an author, and generally to procure maximum publicity and work for his business and sales for the book.

    ABUSE OF PROCESS

21. The respondents argued that there has been an abuse of process in this matter because two sets of proceedings have been instituted arising out of what is said to be the same material.  On 26 July 2001, the applicants caused proceedings to be issued in the Supreme Court against Pan Macmillan.  In the statement of claim in that proceeding, the applicants complained that Pan Macmillan published the book The Spying Game in about June 2001 and that it made the book available to a journalist for The Australian newspaper. The statement of claim then alleged that the newspaper published the article of 23-24 June 2001. In respect of both publications attributed to Pan Macmillan, that is to say the book and the article, the same defamatory imputations are pleaded in the present proceedings in defamation in the amended statement of claim. The present proceedings were commenced on 10 August 2001. The Supreme Court proceeding was settled on 23 October 2001 when the applicants in this proceeding accepted an Offer of Amends under Division 8 of the Defamation Act. Pan Macmillan agreed with a proposal by the solicitors for the applicants that the applicants would prefer for steps to be taken in the performance of the agreement to the Offer of Amends after the Federal Court proceedings in this matter had been completed.

22. The abuse of process alleged by the respondents was that the request by the solicitors of the present applicants to postpone performance of the agreement in relation to the Offer of Amends was in effect an agreement to delay judgment in the Supreme Court proceedings. It was further submitted that the intention was to avoid the effect of s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (“LRMP Act”) which provides as follows:

    “5(1)   Where damage is suffered by any person as a result of a tort …:

    (a)…

    (b)If more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered … against tort-feasors liable in respect of the damage … the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action”  (Emphasis added)

23. In the present case there has been no judgment delivered in relation to the Supreme Court proceedings so that one cannot speak of “a” judgment first given. Accordingly, the above section does not apply to these proceedings.

24. The proposal in the Offer of Amends made by Pan Macmillan on 3 August 2001 did not provide for the entry of judgment against Pan Macmillan in relation to damages so that there can be no question of abuse of process to avoid or detract from the operation of s 5(1)(b) of the LRMP Act. The Offer of Amends involved the publication of corrections or apologies, letters of advice incorporating an apology, explanations to any person who might have expressed concern to the applicants about matters raised in relation the applicants in the book and an offer to pay all proper and reasonable legal costs. The letter purported to explain why Pan Macmillan claimed that it had innocently published the material, how it had been misled and the steps it had taken to remedy the situation. Pan Macmillan also provided a statutory declaration as to how it came to publish the book and the steps it took to withdraw it from circulation.

1. Reliance was placed by the respondents on the decision in Harris v Perkins [2001] NSWSC 258 where Newman AJ held that in circumstances where there had been a judgment given for $20,000, it was an abuse of process for the successful plaintiff to bring further proceedings in respect of the second and third reprints of the book against different defendants whom he alleged were also publishers and distributors of the book. His Honour considered that s 5(1)(b) would be contravened or circumvented. As I have found above, the circumstances of this case differ. There has not been a judgment entered in relation to the Supreme Court proceedings. The finding by Newman AJ is not in point in this case because judgment had previously been entered in that matter.

2. It was also contended that the commencement and continuance of the federal proceedings was an abuse of process, apparently on the basis that the principle enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, at 598 is applicable. This principle is sometimes referred to Anshun Estoppel.  In substance that principle dictates that a court requires the parties to litigation to bring forward their whole case so that the courts will not (in the absence of special circumstances) permit the same parties to re-open the same subject for litigation in respect of a matter which might have been brought forward as part of the issues in contest in the first proceeding, but which has not been brought forward only because the parties have from negligence, inadvertence, or accident omitted part of their case.  It was submitted that, based on the principles in Anshun, proceedings will be struck out in relation to an issue which could have and should have been litigated in earlier proceedings.

3. In my opinion, Anshun Estoppel is not relevant in the present case because the parties in the two cases are different. In addition, different causes of action are involved, namely, the action under the TP Act and FT Act, in addition to the action in defamation. Different defences apply and different remedies are sought. In addition to injunctive relief, the applicants in these proceedings seek Orders in the form of declarations. Accordingly, I do not consider that the respondents have made good any defence based on abuse of process, in the form of Anshun Estoppel or any continuation or circumvention of the provisions of the LRMP Act.

   Browne v Dunn

4. Mr Evatt submitted that the evidence of James and Monte as to the alleged Miami meeting on 2 January 1997 should be accepted because there was no cross-examination directed to either witness to contradict the evidence relating to that meeting.  It was said that it would be unfair to allow the applicants to submit to the contrary in the absence of an express challenge.

5. In my view there has not been any breach of procedural fairness or of the more narrowly defined principle in Browne v Dunn (1893) 6 R 67. Essentially, where it is intended to contradict a witness on a particular point, attention must be drawn to that fact or point in cross-examination. In the present case it has been clear at all times that the applicants’ case was that there has never been any contact between Gianni and Monte. The evidence of Daniele Ballestrazzi in his affidavit of 26 October 2001 and the attached travel records were specifically directed to that issue. The evidence of Ballestrazzi contradicted evidence in relation to Monte allegedly meeting Gianni on 2 January 1997 in Miami. However, no evidence was adduced in response to it by the respondents. There was no indication, apart from pure speculation, that any significant material could have been put to either James or Monte to contradict Ballestrazzi’s evidence other than by way of a bald assertion. The submission of Mr Evatt was simply that if the matter had been specifically raised, James or Monte “may have referred to objective evidence that Gianni attended a New Year’s Eve party on 31 December 1996 in Miami”. There was no documentary or other material or testimony offered to support such a suggestion. Accordingly, I do not accept this submission.

   DAMAGEs

6. The present part of the proceedings is concerned only with liability and relief other than damages.  The question of the detailed nature and extent of damages occasioned by the breaches which I have found to be made out will be considered at a subsequent stage of these proceedings.  It was suggested by the respondents in this case that the applicants have not suffered any damage.  This submission is clearly untenable.  For present purposes in order to determine what are appropriate Orders at this point of the case, it is only necessary to determine whether there is the probability that some damage has been made out and whether it is likely that the misleading and deceptive conduct and the defamatory imputations will cause future damage if allowed to be further published.  In the case of defamation, on the findings I have made, some damage is presumed.

7. There is at this stage no precise evidence as to any specific amount of any damage which has been suffered.  The evidence of Mr Beaton, a marketing consultant, as to the reputation of the Versace brand, and as to the susceptibility of the Versace brand names to damage as a consequence of the making of the representations and imputations, strongly support the applicants’ case that they have suffered substantial damage to date and that more damage is anticipated.  The evidence in relation to damages alluded to the adverse effect on confidence in terms of public perception, particularly among professionals.  Mr Beaton considered that there would be substantial impact on morale of the employees in the business.  He further considered that the Versace brand was particularly susceptible to damage because of the identification of the Versace brand with the Versace family.  He did not consider that a judgment in favour of the applicants would necessarily counter the negative publicity from the publications and representations which have been made to date.  He prepared charts which confirmed that the Versace brand continued as a highly valuable business following the death of Gianni, with worldwide revenues currently at around AUD $ one billion per year.  In addition to the evidence of Mr Beaton, there was evidence from Giovanni Galbiati, the General Manager, of Gianni Versace SpA.  He gave details as to the branding and promotional activities of the business and the extent of the Versace trade mark portfolio.  He explained the “incalculable damage” to the Versace brands and to the morale of employees as a consequence of the representations and allegations complained of.  In particular, he considered that the representations and imputations have been made at the critical time during the transition of the business, following the death of Gianni, which in turn maximised their adverse impact on the business.

8. The applicants’ evidence as to damage was uncontradicted and not shaken in cross-examination.  It accords with likely expectations. From the serious criminal nature of the allegations detailed earlier in these reasons, it would follow that the business of the applicant company and the reputations of Santo and Donatella are likely to have been damaged and that they will continue to be damaged if the representations are repeated.  Accordingly, I am satisfied that present actual damage and likely future damage in the event of repetition has been established.

   CONCLUSION

9. On the issue of liability I am satisfied that the representations and imputations have with minor exceptions, been made and were false and misleading.  I am satisfied that the defamation claims have been established.  I am also satisfied that damage has been and will continue to be suffered by the applicants as a consequence of the representations and imputations.  The applicants are therefore entitled to appropriate injunctive relief and to declarations in respect of these matters.  I direct the applicants to file and serve on the respondents a draft of the Orders which they seek in accordance with these reasons.  I direct the applicants to file a timetable for the determination of damages in this matter.  The matter is to be listed for resolution of these questions with my Associate, to be arranged within fourteen (14) days.

I certify that the preceding two hundred and seven (207) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:            8 March 2002

Counsel for the Applicants:	W H Nicholas QC R Cobden
Solicitor for the Applicants:	Baker & McKenzie
Counsel for the Respondents:	C Evatt G Hanson
Solicitor for the Respondents:	Horowitz & Bilinsky
Dates of Hearing:	29, 30, 31 October 2001 1, 2, 5, 6, 7, 16 November 2001 4, 10, 11 December 2001
Final Written Submissions:	15 January 2002
Date of Judgment:	8 March 2002