Hardie v The Herald and Weekly Times Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

S CI 2013 5974

RAELENE HARDIE	Plaintiff
v
THE HERALD AND WEEKLY TIMES PTY LTD and ANDREW RULE	Defendants

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JUDGE:	WHELAN JA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 and 29 May and 1–4 June 2015
DATE OF JUDGMENT:	22 July 2015
CASE MAY BE CITED AS:	Hardie v The Herald and Weekly Times Pty Ltd
MEDIUM NEUTRAL CITATION:	[2015] VSC 364

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DEFAMATION – Newspaper articles imputed plaintiff’s strip club is venue in which police give secret tip-offs to members of outlaw motorcycle gangs – Whether defamatory of plaintiff’s business reputation – Lack of qualification, knowledge, skill, capacity judgment or efficiency need not be imputed – Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460 and John Fairfax Publications Pty Ltd v Gacic (2007) 230 CLR 291 considered and applied; Drummond-Jackson v British Medical Association [1970] 1 WLR 688 explained – Imputation of serious corrupt criminal activity taking place at plaintiff’s venue would lead ordinary reasonable person to think less of plaintiff – Defence of qualified privilege not made out – Damages of $90,000 awarded.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S K Wilson QC with Ms E Nikou	Mills Oakley Lawyers
For the Defendants	Dr M J Collins QC with Ms R L Enbom	M+K Lawyers

TABLE OF CONTENTS

Pleadings and issues to be determined.......................................................................................... 2

The publications................................................................................................................................. 5

The Herald Sun news article......................................................................................................... 5
The Herald Sun colour piece........................................................................................................ 6
Website publication...................................................................................................................... 7
‘Ice’ community information session......................................................................................... 7
The Triple M broadcast................................................................................................................ 8

Significant legal issues.................................................................................................................... 10

Whether imputations are conveyed......................................................................................... 10
Whether imputations are defamatory...................................................................................... 12
Relevant legal conclusions........................................................................................................ 26

Do the publications convey the imputations pleaded?............................................................ 27

Imputation (a): The plaintiff runs a venue that is regularly attended by members of an outlaw motorcycle gang................................................................................................................. 27
Imputation (b): The plaintiff runs a venue in which police give secret tip-offs to members of outlaw motorcycle gangs that hinder police investigations and frustrate search warrants 27
Imputation (c): The plaintiff is a brothel madam.................................................................. 29
Imputation (d): The plaintiff runs a brothel at Club Rawhide in Shepparton.................. 31

Was imputation (a) justified? Are members of an outlaw motorcycle gang ‘regulars’ at Club Rawhide?........................................................................................................................................................ 31

Were the imputations conveyed defamatory?............................................................................ 37

Imputations (a), (c) and (d)........................................................................................................ 37
Imputation (b).............................................................................................................................. 37

Defence of qualified privilege....................................................................................................... 40

Significance of the Club Rawhide components of the articles............................................. 41
Mr Rule’s sources and investigations...................................................................................... 42
Recipients’ interest in the defamatory matter......................................................................... 46
Malice............................................................................................................................................ 46
What is the ‘matter’ in s 30(3) of the Defamation Act?............................................................. 47
Have the defendants established the qualified privilege defence in relation to imputation (b)? 49
(a).... The extent to which the matter published is of public interest............................................... 49
(b).... The extent to which the matter published relates to the performance of the public functions or activities of the person.................................................................................................................................... 49
(c).... The seriousness of any defamatory imputation carried by the matter published.................... 49
(d).... The extent to which the matter published distinguishes between suspicions, allegations and proven facts 50
(e)..... Whether it was in the public interest in the circumstances for the matter published to be published expeditiously......................................................................................................................... 50
(f)..... The nature of the business environment in which the defendant operates............................. 50
(g).... The sources of the information in the matter published and the integrity of those sources.... 50
(h).... Whether the matter published contained the substance of the person’s side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person 50
(i)..... Any other steps taken to verify the information in the matter published............................... 51
(j)..... Any other circumstances that the Court considers relevant................................................. 51

Other issues....................................................................................................................................... 51

Judgment of Dixon J.................................................................................................................... 51
Aggravated damages.................................................................................................................. 52
Publication on the website, at the ‘ice meeting’ and in the Triple M broadcast............... 53

Effect of the publication on Mrs Hardie personally and on her business reputation........ 54

Quantum............................................................................................................................................ 58

HIS HONOUR:

On 16 May 2013 the Herald Sun published a front page article about investigations being conducted by Victoria Police into police officers suspected of having corrupt relationships with outlaw motorcycle gangs in the Goulburn Valley. A group called ‘The Outlaws Motorcycle Club’ (the ‘Outlaws’) was named in the article. The article said that members of this group are ‘regulars at a raunchy strip venue, named Club Rawhide’.

The front page article continued on page 4. Above it on page 4 was a longer article by the same author, Andrew Rule. Mr Rule described the front page article as a ‘news article’ and the longer article as a ‘colour piece’. In the colour piece, Mr Rule referred to Club Rawhide more extensively, suggesting that it is a venue where corrupt police and the Outlaws did, or could, depending upon the interpretation of what was written, meet to exchange information. The person who ‘runs’ Club Rawhide was referred to by the name ‘Madam Black Mercedes’.

The part owner and manager of Club Rawhide is the plaintiff, Raelene Hardie. She alleges, in substance, that she was defamed by the two articles which she says state that she runs a venue regularly attended by members of an outlaw motorcycle gang, at which police gave secret tip-offs to them, and that she is a brothel madam, running a brothel at Club Rawhide.

Members of the Outlaws did attend Club Rawhide from time to time, but there is no evidence that Club Rawhide is, or ever was, a venue for meetings between corrupt police and members of the Outlaws. Mrs Hardie is not a brothel madam, and Club Rawhide is not a brothel.

The Herald Sun and Mr Rule deny liability for defamation on a number of grounds. Principally, they say that what was said about the Outlaws regularly attending the club was true, that what was said about Club Rawhide as a venue was not defamatory of Mrs Hardie and was protected by qualified privilege if it was, and that the articles did not say that Mrs Hardie was a brothel madam or that Club Rawhide was a brothel.

For the reasons set out below, my principal conclusions are these:

1the statement that members of the Outlaws regularly attend Club Rawhide was true;
2what was said about Club Rawhide as a venue for meetings between corrupt police and the Outlaws was defamatory of Mrs Hardie and was not protected by qualified privilege;
3Mrs Hardie is not a brothel madam but the articles did not say that she was;
4Club Rawhide is not a brothel but the articles did not say that it was.

I have assessed the damages suffered by Mrs Hardie as a consequence of the defamatory statement made about her, being that the club which she runs is a venue at which corrupt police meet members of the Outlaws, at $90,000.

Pleadings and issues to be determined

The first defendant, Herald and Weekly Times Pty Ltd, is the publisher of the Herald Sun newspaper. The Herald Sun has extensive circulation throughout Victoria and is also circulated interstate. Articles in the Herald Sun also appear on the first defendant’s website. These articles were posted on the website upon publication and they remained on the website at the time of publication of these reasons.

The second defendant, Mr Rule, is the associate editor of the Herald Sun and was the author of the two articles.

The defamatory imputations that Mrs Hardie alleges were conveyed by the two articles are the following:

(a)the plaintiff runs a venue that is regularly attended by members of an outlaw motorcycle gang;
(b)the plaintiff runs a venue in which police give secret tip-offs to members of outlaw motorcycle gangs that hinder police investigations and frustrate search warrants;

(c) the plaintiff is a brothel madam; and
(d) the plaintiff runs a brothel at Club Rawhide in Shepparton.

The defendants deny that any of the defamatory imputations were conveyed.

The plaintiff pleads the same defamatory imputations in relation to the website publications.

The plaintiff alleges a re-publication of the imputations at a community information session concerning the drug ‘ice’ held on 18 February 2014 in Shepparton. It is alleged that approximately 150 people from the local community attended the event and that a hand-out, which was a reproduction of the Herald Sun colour piece, was distributed to attendees. It is alleged that the defendants authorised that re-publication or that the re-publication was the natural and probable result of the earlier publications. All of these allegations are denied by the defendants.

Mrs Hardie also pleads a separate defamation against Mr Rule alone. This separate claim concerns an appearance by Mr Rule on 17 May 2013, the day after publication of the articles in the Herald Sun, on a radio breakfast program on Triple M in Melbourne. It is alleged that Mr Rule again defamed the plaintiff by repeating the imputations that she is a brothel madam and that she runs a brothel at Club Rawhide. These allegations are denied by Mr Rule.

Finally, the plaintiff claims aggravated damages by virtue of a variety of factors.

In their defence, the defendants contend that the imputation referred to above as (a) (Outlaws are regulars) was true in substance and in fact, by reason of which the defendants have a defence of justification at common law and pursuant to s 25 of the Defamation Act 2005. They also contend that insofar as any of the matters complained of were defamatory, the recipients of the information had an interest in having the information, the matters were published in the course of giving them that information, and the conduct of the defendants was reasonable, by reason of which the defendants have a defence of qualified privilege pursuant to s 30 of the Defamation Act.[1]
[1]There was no reliance on qualified privilege apart from that provided for by statute.

Through the course of the trial the issues between the parties narrowed.

The defendants accepted that imputation (a) (Outlaws are regulars) was conveyed. The significant issue in relation to imputation (a) was whether or not it was true.

There was significant controversy as to whether imputations (c) and (d) (brothel madam) were conveyed. The defendants’ position was that the use of the term ‘Madam Black Mercedes’ did not convey an imputation that Mrs Hardie was a brothel madam or that Club Rawhide was a brothel.

In relation to imputation (b) (secret tip-offs), there was dispute as to whether the pleaded imputation was conveyed, and there was a significant issue as to whether imputation (b), if conveyed, was defamatory of Mrs Hardie. The defence of qualified privilege, which was relied upon in relation to any imputation found to be defamatory, focused upon imputation (b).

There was controversy on the issue of the effect of the publications on Mrs Hardie. Amongst other things, the defendants contended that her principal concern was the damage done to her business. No claim was made on Mrs Hardie’s behalf to recover damage done to the business. Her claim was expressly confined to damage done to her personally. She is not the sole owner of Club Rawhide. No claim was made for injurious falsehood.

The matters relied upon as aggravation were all matters of controversy.

Accordingly, the principal issues to be decided are the following:

1Do the articles convey the pleaded imputations (b), (c) and (d) and did the Triple M broadcast convey imputations (c) and (d)?
2Was imputation (a) substantially true? Were members of the Outlaws motorcycle gang regulars at Club Rawhide?
3To the extent the imputations were conveyed and were not justified, were they defamatory of her?
4Was imputation (b) conveyed on an occasion of qualified privilege?
5Was there a re-publication at the ‘ice’ meeting which was authorised by the defendants or the natural and probable consequence of publication on the internet?
6Insofar as Mrs Hardie was defamed, what was the effect upon her and upon her reputation?
7If the defendants are liable, are there grounds for aggravated damages?
8If the defendants are liable, what is the quantum of damages?

The publications
The Herald Sun news article

The news article, which began on the front page and continued on page 4, concerned a story that internal investigators for Victoria Police, referred to as ‘Taskforce Eagle’, were, or ought to be, investigating corrupt or improper relationships between police officers and outlaw motorcycle gangs in the Goulburn Valley. It was suggested that the existence of these relationships was indicated by the fact that several police raids, which had been expected to discover weapons, drugs and other incriminating material, had been unusually unsuccessful. It was said that in one case cannabis plants had ‘vanished overnight’. The premises in question were all said to be linked to the Outlaws which had chapters in Shepparton and Kyabram. The news article then continued:

Members of both groups[2] are regulars at a raunchy strip venue, named Club Rawhide, in an industrial estate that’s walking distance from Shepparton police station and two popular hotels.

[2]In the context it is clear this means both groups of the Outlaws — Shepparton and Kyabram.

The story went on to refer to a belief that listening devices in one regional police station had been found. References were then made to various other relationships which were said to be a cause of concern. No further reference was made to Club Rawhide in the news article.

The Herald Sun colour piece

The colour piece was written in a different style to the news article. To adopt Mr Rule’s description, it was written in a ‘jocular manner with a sort of a sardonic edge’.

There are 29 substantive paragraphs in the colour piece. It is necessary to quote the middle 14 paragraphs in full.

After referring to the subject matter of the news article, and to some unrelated issues, the article continued:

Not just any old outlaws — The Outlaws, one of the oldest ‘one percenter’ biker clubs around. They have two local chapters — one in Shepparton and one across the river at Kyabram. The whisper is these bands of brothers disagree on the issue of manufacturing and selling drugs.
They certainly have no objections to the local strip joint, Club Rawhide, set up in an industrial building next to a car yard overlooking the railway line.
It’s around the corner from two of Shep’s biggest pubs — and the police station, which is handy if members need to attend in either professional or pleasure-seeking capacity.
Police were called there late on the night of December 7, because a prominent local footballer and his mates were filmed punching and ‘stomping’ some other rocket surgeons, in a brawl a magistrate called ‘extreme violence’ when he sentenced them this month.
They appealed and got bail. If they lose, they will go inside. This would interfere with the local hero’s footy career but it might not do any harm to membership of his other club, which happens to be The Outlaws.
In a case spookily like the cult television series Sons of Anarchy, it turns out the local hero and his dad are both in the biker club.
In fact, he was excused attending a football coaching camp last season because he had a prior social engagement with The Outlaws.
It was an invitation he couldn’t refuse.
Of course, it’s good that police arrested the bikies and brawlers so efficiently at Club Rawhide. Madam Black Mercedes, who runs the place, will be grateful.
It’s unlikely our ’hero’ will hold too many grudges, as The Outlaws and a few country police officers seem to have a healthy mutual respect. Locals suggest Rawhide is a convenient common ground for the two groups to unwind after a hard day at the office. As drinkers do the world over, they probably talk shop and swap business cards and phone numbers.
That might or might not explain why so many police raids around the Goulburn Valley have drawn blanks in recent times.
A former local detective has heard that at least eight search warrants have resulted in police finding no guns, no drugs and, sometimes, nobody home. When the law came knocking, The Outlaws were outdoors. In one case, huge cannabis plants vanished overnight.
Suspicious minds have pointed investigators toward a person who allegedly got a heads-up from a superior that Taskforce Eagle was circling.
Whether Eagles dare wreck the chummy Club Rawhide ambience is yet to be seen.

The Outlaws is a club identified as an outlaw motorcycle gang by the Australian Crime Commission.

In final submissions the defendants accepted that the news article and the colour piece are to be read as a single composite publication.

Website publication

The news article and the colour piece were both published on the Herald Sun website. Whilst the format is different, the content is the same. The Herald Sun website enables and encourages viewers to share published articles via email and social media and to download and save them.

‘Ice’ community information session

On Tuesday 18 February 2014 a community information session on the drug ‘ice’ was held at the Shepparton Senior Citizens Centre. A person or persons unknown produced a poor photocopy or photocopies of the colour piece, in a reformatted form, and that document or those documents were at the meeting.

Mrs Hardie became aware of the document or documents through a friend, Max Cimmono, who sent a message to her daughter. After Mrs Hardie complained, one of the organisations involved in the meeting wrote to her. That letter was tendered. Relevantly, it reads:

This letter is in response to our telephone conversation today regarding a document on display at the Community Education Forum on ICE held in Shepparton on Tuesday 18^th February, 2014.
I would like to thank you for bringing this mater to my attention.
After an internal review it has been determined that this document had been placed on the table without FamilyCare’s knowledge or approval and at no stage did FamilyCare staff distribute this document.
To give you some context a number of local service providers were asked to bring their agency brochures, flyers or literature on the night to be displayed on the table. I now realise we should have had a better system in place to ensure all displayed material had been approved by FamilyCare.
I am deeply concerned regarding the upset this has caused you and therefore offer my full apology.
I will further investigate this matter next week and if I find any other information I will contact you immediately.

The photocopied document is of poor quality but it can be read. The meeting itself, but not the document of concern, was reported on in the local paper.

The Triple M broadcast

As a result of the publications in the Herald Sun on 16 May 2013, Mrs Hardie rang Mr Rule that same day. Amongst other things, Mrs Hardie complained about the reference which had been made to her as ‘Madam Black Mercedes’. The relevant substance of her complaint was that she was being portrayed as a brothel madam. Mr Rule told her that that had not been his intention and that if he had thought it would be interpreted that way he would not have used the word. Mr Rule told her that he was going on Triple M the following morning and that he would clarify the matter. In his evidence he said that he may well have used the word ‘apologise’.

Mr Rule has a regular segment on Triple M. He undertakes this segment in his personal capacity but with the approval of his employer, the first defendant, on the basis that the segment promotes stories published by the first defendant.

The following morning Mr Rule appeared on the breakfast program on Triple M. Triple M is not broadcast on radio in Shepparton. Residents in Shepparton can listen to it over the internet. The Melbourne audience is approximately 85,000 people.

A long section of the audio recording from the broadcast that morning was tendered and a transcript of the portion of the broadcast in which Mr Rule participated was also tendered.

In the relevant part of the broadcast Mr Rule began by clarifying another matter which had appeared in the Herald Sun the day before, in the same articles. He then moved to what he described as ‘another apology’ and said that this was ‘from Madam Rawhide’. He corrected that to ‘Club Rawhide’ which he then referred to as follows: ‘It’s a strip club — it’s a respectable strip club.’

One of the other presenters asked if he was referring to Madam Black Mercedes from his story and Mr Rule said ‘But we’re going to correct that …’. Mr Rule then referred to the phone call he had received in which Mrs Hardie had said to him ‘I’m not a madam’. Mr Rule continued:

And I said, ‘M’am, I meant that in a most respectful way, as people do when they talk about the Queen. In no other connotation.’ So she swallowed that but she’s not that happy.

Mr Rule went on to say that ‘we sorted that out’ and that then she had said that she used to have a black Mercedes but that she didn’t any more. Mr Rule continued:
So I’m here to apologise about that, to the proprietor of Club Rawhide, which is a family friendly strip venue …

The other presenters laughed at that point.

Two conclusions in relation to this broadcast can be stated at this point.

First, having listened to the broadcast and having heard Mr Rule’s evidence about it and about the phone call which prompted it, I accept that Mr Rule had intended to make it clear that he had not meant to suggest that the manager of Club Rawhide was a brothel madam. I also accept that in the broadcast he was trying to do that.

Secondly, his attempts to clarify what he had meant were ineffective. The tone of the segment is jocular and flippant from beginning to end. When recounting Mrs Hardie’s call Mr Rule adopted what was apparently intended to be an imitation of her voice. Laughter punctuates the relevant interchange. It is impossible to know whether anything said is being said seriously or not. The final reference to ‘a family friendly strip venue’ confirms, it seems to me, that everything said is potentially flippant and not to be taken seriously.

It was suggested that Mr Rule’s reference to Mrs Hardie having ‘swallowed that’ was a ‘double entendre’. Mr Rule’s evidence was that that was not what he intended.

Significant legal issues

Before turning to the question of whether the pleaded imputations were conveyed, it is necessary to address the legal principles which apply in relation to that issue, and in relation to the related issue of whether an imputation which is conveyed is defamatory.

Whether imputations are conveyed

There was no controversy between the parties before me as to the legal principles which apply in determining whether a pleaded imputation is conveyed, but it is necessary to briefly set those principles out. This was not a case where either party contended for any ‘permissible variant’ of the pleaded meanings.[3]
[3]Setka v Abbott [2014] VSCA 287 [56]–[57] relying on David Syme & Co Ltd v Hore-Lacy (2000) 1 VR 667, 686–8 [53]–[54], [57]–[59].

In Reader’s Digest Services Pty Ltd v Lamb, Brennan J (with whom Gibbs CJ, Stephen, Murphy and Wilson JJ agreed) said:

Where no true innuendo is pleaded[[4]] and the published words clearly related to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees — Lord Selborne’s reasonable men (Capital and Counties Bank v Henty) or Lord Aitken’s right-thinking members of society generally (Sim v Stretch) or Lord Reid’s ordinary men not avid for scandal (Lewis v Daily Telegraph Ltd) — would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v Deane), being a standard common to society generally (Miller v David; Myroft v Sleight; Tolley v JS Fry & Sons Ltd).[5]

The latter part of this passage was more recently quoted and adopted by French CJ, Gummow, Kiefel and Bell JJ in Radio 2UE Sydney Pty Ltd v Chesterton (‘Radio 2UE’).[6]

[4]A true innuendo is a defamatory meaning conveyed as a result of extrinsic facts known to the recipients which give an otherwise innocent meaning a defamatory sense.

[5](1982) 150 CLR 500, 505–6 (citations omitted).

[6](2009) 238 CLR 460, 468 [7].

From this passage important principles can be extracted. They are well settled in both England and Australia. They were not controversial. Relevantly, those principles are:

1The simple question as to whether published words are defamatory involves two issues: whether the imputation was conveyed; and, if conveyed, whether it was defamatory.
2The issue of whether an imputation was conveyed is to be determined objectively, in the sense that it is determined in accordance with the meaning which would be given to the words by hypothetical referees, described in more recent times as ‘ordinary reasonable people’.[7]
3The hypothetical referees are taken to have a uniform view of meaning. The law of defamation adopts what is generally referred to as the ‘single meaning rule’.

[7]Ibid 467 [6].

The ‘single meaning rule’ means that notwithstanding that different people might understand a statement in different ways the Court must arrive at one single meaning. The rationale for this rule is said to be that it strikes a balance between freedom of speech and protection of reputation. It is recognised that the adoption of a single meaning will in some cases mean that a plaintiff might fail notwithstanding that some people, perhaps many people, understood the statement in a defamatory sense; and, by the same token, that a defendant might fail notwithstanding that some people, perhaps many people, did not understand the statement as conveying a defamatory meaning.[8] In most cases, after discarding ‘outlying interpretations’ it will be possible to conclude that there is only one fair and reasonable interpretation of the matter published.[9]
[8]Ten Group Pty Ltd v Cornes (2012) 114 SASR 46, 62 [48]–[50] (‘Cornes’); Slim v Daily Telegraph Ltd [1968] 2 QB 157, 172–3.
[9]Cornes (2012) 114 SASR 46, 91 [170].

The defendants cited and relied upon a passage from the recent English Court of Appeal decision in Cruddas v Calvert where Longmore LJ said:

In libel, the artifice of a putative single meaning requires the Court to find an approximate centre point in the range of possible meanings. If, instead, a court at first instance selects as the single meaning for libel purposes one of the peripheral meanings in the range relevant to malicious falsehood, an appellate court may very well be satisfied that it has erred, because the single meaning has, generally speaking, to be the (or a) dominant one.[10]

That case concerned a claim for malicious falsehood. Longmore LJ (Rafferty LJ and Sir Stephen Sedley agreeing) held that the rule did not apply to such claims and held that it was the duty of the judge at trial to identify all the reasonably available meanings which a substantial number of persons would have understood and to then decide the remaining issues in respect of those meanings which are in fact false and damaging.[11] The defendants here were concerned to emphasise the importance of the distinction between the law of defamation and the law of malicious falsehood in this context.

[10][2013] EWCA Civ 748 [32]. See also ibid 91–2 [168]–[172], [175], 98–9 [194], [197].

[11][2013] EWCA Civ 748 [30].

Excellent summaries of the relevant authorities on the well accepted general principles to be applied in determining whether an imputation is conveyed may be found in recent Australian decisions: Ten Group Pty Ltd v Cornes[12] and Hockey v Fairfax Media Publications Pty Ltd (‘Hockey’).[13] I adopt those summaries without producing yet another.
[12](2012) 114 SASR 46, 73–5 [91]–[94].
[13][2015] FCA 652 [63]–[73].

Whether imputations are defamatory

There was very little difference between the parties in their articulation of the broad general position. They each submitted that the test (or tests) was whether the words used were likely to lead ordinary reasonable people to think less of the plaintiff, whether they tended to make the plaintiff be shunned and avoided, or whether they exposed the plaintiff to hatred, contempt or ridicule. Each placed substantial reliance upon the High Court decision in Radio 2UE.[14]
[14](2009) 238 CLR 460.

The submissions made were significantly in conflict in relation to the proper application of this test (or tests).

The defendants submitted that in Radio 2UE the High Court, whilst recognising each of the components of what the defendants described as the ‘traditional tests’, had endorsed as the standard test for defamatory meaning whether a person’s standing in the community or the estimation in which people hold that person has been lowered, or whether the imputation is likely to cause people to think less of the plaintiff. The defendants submitted that the ‘shun and avoid’ test is properly to be confined to specific rare situations, being communicable diseases and sexual assault. Importantly, the defendants submitted that where a claim is made which relates to the business reputation of a person the correct test, which it was submitted the High Court decision in Radio 2UE requires, is whether the words reflect upon the person’s fitness or ability to undertake what is necessary for that business. In the specific context of imputations (a) (Outlaws are regulars) and (b) (secret tip-offs) it was submitted that ‘axiomatically’ an imputation can only be defamatory if it imputes a lack of qualification, knowledge, skill, capacity, judgment or efficiency on the part of the plaintiff.

The plaintiff, on the other hand, placed reliance upon the ‘shun and avoid’ concept, and also emphasised that the High Court in Radio 2UE had adopted an analysis which did not compartmentalise a plaintiff’s business, professional or personal reputation. It was submitted that there is no need for the publication to impute wrong-doing to the plaintiff or to disparage her. It is sufficient if the imputations cause people to shun or avoid her. It was submitted that in this particular case the plaintiff’s personal and business reputation were inextricably linked and that the publication had an effect on the plaintiff’s reputation which was distinct from the effect upon the business of the plaintiff, notwithstanding that the evidence indicated that the latter did also occur. Like the defendants, the plaintiff relied on the High Court judgment in Radio 2UE but also relied upon passages from the judgment of Mason J (as he then was) in Sungravure Pty Ltd v Middle East Airlines Airliban SAL (‘Sungravure’).[15]
[15](1975) 134 CLR 1.

The defendants’ submission that an imputation against the plaintiff in her business or profession ‘axiomatically’ will be defamatory only if it imputes a lack of qualification, knowledge, skill, capacity, judgment or efficiency was said to be established by the High Court decision in Radio 2UE and the decision of the English Court of Appeal in Drummond-Jackson v British Medical Association (‘Drummond-Jackson’).[16] It is necessary to review those two authorities, and two other decisions of the High Court decided between them, in order to determine whether this asserted axiom exists.
[16][1971] 1 WLR 688.

Drummond-Jackson concerned a scientific paper in the British Medical Journal about a particular dental technique. The article suggested that the technique was unsafe. The plaintiff was a dentist who was particularly associated with the use of this technique, and was named as such in the article. The plaintiff issued a writ and pleaded the entirety of the scientific paper as constituting a libel of him. The defendant sought to strike out the statement of claim. The issue for the Court of Appeal was whether the words pleaded, which was the entire article, were capable of being understood as being defamatory of the plaintiff personally. No innuendo was pleaded and the plaintiff relied upon the natural and ordinary meaning of the words.

Lord Denning MR, in dissent, emphasised that the words could be defamatory only if they were defamatory of the plaintiff and not of his technique.[17] Libel is personal and subjective. By way of contrast, lawful criticism of goods or of a design or of a system or a technique is impersonal and objective. Lord Denning MR held that the scientific paper was not capable of constituting a libel and that the statement of claim should be struck out.[18]
[17]Ibid 694.
[18]Ibid 694–5.

Lord Pearson and Sir Gordon Willmer reached a different conclusion. They decided that the statement of claim should not be struck out.

Lord Pearson referred to the fact that the plaintiff’s name and practice were closely associated with the technique in issue.[19] Lord Pearson then said:

In the circumstances I think it would be open to 12 reasonably-minded jurymen to come to the conclusion that the severe attack which this article makes on the technique involves an attack on the plaintiff’s reputation as a dentist.[20]

[19]Ibid 697.

[20]Ibid.

Lord Pearson then asked himself the question: how could it be argued that the article could not reasonably be given a defamatory meaning? He answered it by saying that it could only be so argued on the basis of a narrow view being taken as to the scope of defamation of a person in his trade, business or profession.[21] After asking and answering that question Lord Pearson turned to the reported cases involving defamation of traders who sold goods. This is the passage cited and relied upon by the defendants as ‘axiomatically’ requiring that an imputation cannot be defamatory in business or trade unless it imputes lack of qualification, knowledge, skill, capacity, judgment or efficiency. Lord Pearson referred to a number of authorities and quoted at length from South Hetton Coal Co Ltd v North-Eastern News Association Ltd (‘South Hetton Coal’) where a contrast had been drawn between statements which concerned only the goods sold in a business and those that might relate to a person’s conduct of the business.[22] The particular analogy employed concerned the sale of wine. Lord Pearson went on:

I doubt whether the analogy sought to be drawn in the present case between a trader’s goods and a professional man’s technique is sound. Goods are impersonal and transient. A professional man’s technique is at least relatively permanent, and it belongs to him: it may be considered to be an essential part of his professional activity and of him as a professional man. In the case of a dentist it may be said: if he uses a bad technique, he is a bad dentist and a person needing dental treatment should not go to him.
In any case, words may be defamatory of a trader or business man or professional man, though they do not impute any moral fault or defect of personal character. They can be defamatory of him if they impute lack of qualification, knowledge, skill, capacity, judgment or efficiency in the conduct of his trade or business or professional capacity. … It can be suggested that the article complained of in the present case impliedly imputes to the plaintiff lack of judgment and lack of efficiency in the conduct of his professional activity, inasmuch as he has adopted and practised and recommended a method of anaesthetising patients which (as the article says) is dangerous for the patients and may impede good dentistry. That suggestion is worthy to be considered by the jury or the judge acting as a jury, and should not be withdrawn from them or him.[23]

[21]Ibid 698.

[22][1894] 1 QB 133, 139.

[23]Drummond-Jackson [1971] 1 WLR 688, 698–9.

It is important to recall that in that case the plaintiff had not pleaded an imputation that it was being asserted he lacked judgment or lacked efficiency. The entire article was pleaded. The article attacked the technique which he used and with which he was associated.

It seems to me that Lord Pearson concluded that the assertion that a dentist uses a bad technique was capable of being defamatory without more.[24] The observations he made about imputing lack of judgment and lack of efficiency came after he had reached that conclusion and were introduced by the phrase: ‘In any case, …’.
[24]See also Gorman v Barber (2004) 61 NSWLR 543, 551 [34].

Sir Gordon Willmer perhaps made this point clearer. He said:

The essential feature of the case is that the plaintiff is a practising dental surgeon, and the gist of his case is that the article complained of is unjustifiably critical of the way in which he carries on his practice, thereby damaging his professional reputation.[25]

[25]Drummond-Jackson [1971] 1 WLR 688, 702.

It is reading too much into Drummond-Jackson to analyse it as standing for the proposition that an imputation against a plaintiff in the plaintiff’s business, profession or trade can only be defamatory if it imputes lack of qualification, knowledge, skill, capacity, judgment or efficiency.

The two High Court decisions decided between Drummond-Jackson and Radio 2UE, to which I have referred, are Sungravure,[26] upon which the plaintiff relied, and John Fairfax Publications Pty Ltd v Gacic (‘Gacic’).[27]
[26](1975) 134 CLR 1.
[27](2007) 230 CLR 291.

Sungravure was decided under the Defamation Act 1958 (NSW). Under that Act it was specifically provided that an imputation was defamatory not only where the person’s reputation was injured but also where ‘he is likely to be injured in his profession or trade’. As the High Court emphasised repeatedly, this statutory position differed from the position at common law.[28]
[28](1975) 134 CLR 1, 9 (Gibbs J), 13-14 (Stephen J) and 21–2 (Mason J).

The issue in Sungravure was whether the particular statements in question were statements made ‘concerning’ the person allegedly defamed. A fictional story had allegedly asserted that the plaintiff, an airline, faced a serious risk of hijacking.

The issues in Sungravure were quite different to those which arise here. The plaintiff before me sought to rely on passages from the judgment of Mason J (as he then was). In my view, those observations are of no assistance given the statutory context in which they were made. One observation by Gibbs J (as he then was) in that case is noteworthy, because it foreshadowed the very issue which was to arise in Gacic. Gibbs J said:

Thus, to say guests at a particular inn will find bad food and poor service may be regarded as an imputation concerning the innkeeper. Although theoretically it is possible to regard every statement about the goods or services in which a man trades as an imputation of some sort about the trader, it would be unreal to take that view where the statement was a perfectly general one and applied no more to one trader than to all.[29]

[29]Ibid 11.

Gacic concerned a review of a restaurant called Coco Roco. For present purposes it is unnecessary to address all the imputations alleged and all the issues raised in the proceeding. The imputations of significance which were pleaded in Gacic were these:

(a) The plaintiffs sell unpalatable food at Coco Roco.

(c) The plaintiffs provide some bad service at Coco Roco.

The plaintiffs owned the restaurant. The defendants published the review.

At trial the jury found that the imputations referred to above as (a) and (c) had been conveyed by the review but were not defamatory. The jury found that other imputations pleaded had not been conveyed. A verdict was entered for the defendants. The restaurant owners appealed to the Court of Appeal. The New South Wales Court of Appeal addressed two issues.[30] The first issue was whether the trial judge had incorrectly directed the jury as to how they were to determine if the imputations were defamatory. What the New South Wales Court of Appeal decided on that issue was subsequently held to be incorrect by the High Court in Radio 2UE. I will return to that issue.
[30]Gacic v John Fairfax Publications Pty Ltd (2006) 66 NSWLR 675.

The second issue dealt with by the New South Wales Court of Appeal in Gacic was the question of whether a verdict ought to be entered for the restaurant owners in relation to imputations (a) and (c) on the basis that no jury properly directed could reasonably have reached any other verdict than that those imputations were defamatory. In relation to the second issue Beazley JA (with whom Handley and Ipp JJA relevantly agreed) said:

The food served in any restaurant is its essential business. If the food is ‘unpalatable’ the restaurant fails on the very matter that is the essence of its existence. This is especially so of a purportedly high class restaurant. To say of a restaurateur of such an establishment that they sold ‘unpalatable’ food injures that person in their business or calling and because of that, is defamatory. In my opinion, no reasonable jury properly directed could reach any other verdict.
Service is also an integral part of the experience of dining. Good service is expected at a high class restaurant. It is part of what the patron pays for. It is almost trite to say that poor service, even occasional poor service within the one dining experience, will not be tolerated by patrons of an expensive ‘swank’ restaurant. To say, therefore, that the appellants provided ‘some bad service’ at Coco Roco, even though the damnation was not total, would injure a person in their business or calling as a restaurateur and was likewise defamatory. No reasonable jury properly directed could reach any other verdict.[31]

The New South Wales Court of Appeal held that it had the power to direct a verdict for the restaurateurs and it did so.

[31]Ibid 684 [56]–[57].

The High Court (constituted by Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ, with Kirby J dissenting) upheld the Court of Appeal’s conclusion that no reasonable jury, properly instructed, could find that imputations (a) (unpalatable food) and (c) (poor service) were not defamatory, and held that the Court of Appeal had properly entered verdicts in favour of the restaurateurs.

One of the arguments put to the High Court by the unsuccessful reviewer reflected the argument put before me on behalf of the defendants. That argument was that to say a restaurant sells unpalatable food or provides poor service does not reflect upon the owners personally at all and is accordingly not defamatory.

Gleeson CJ and Crennan J rejected that argument. They quoted a long passage from the judgment of Beazley JA, which included the portion I quoted earlier, and then continued:

This reasoning appears to us to be correct. It was argued for the appellants that an ordinary reasonable reader might take the article in question as a criticism of the chef, not the owners of the restaurant, and, further, that a condemnation of some food or some service would not necessarily reflect on the reputation of the restaurateurs as traders. These arguments are unpersuasive …[32]

[32](2007) 230 CLR 291, 296 [9].

Gummow and Hayne JJ also quoted the same passage from Beazley JA which I quoted earlier. They then continued:

In this Court, the appellants have not demonstrated any error in those critical passages. The respondents properly emphasised that the fundamental difficulty here in the path of the appellants lies in the concept of ‘tendency’ which pitches the common law test at a fairly low threshold. It is sufficient that the imputation ‘be such as is likely to cause ordinary decent folk in the community, taken in general, to think the less of [the plaintiff]’.[33]

[33]Ibid 309 [53] (citation omitted) referring to Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449, 452.

Callinan and Heydon JJ observed that a jury was not at liberty to decide that words which were ‘inescapably or unmistakably defamatory’ were not defamatory and said that where a jury took such an unreasonable or perverse view ‘as here’ the Court of Appeal was entitled to determine the issue itself.[34] They went on:

The evidence here, the review only, was all one way. The fact that the respondents did not ask for a directed ‘verdict’ or answers as perhaps they might have, does not mean that the Court of Appeal was disqualified from reversing the jury’s decision. They were, having regard to the clear meaning of the words of imputation (a) and (c), and the jury’s unreasonable determinations in respect of them, bound to do so.
…
The appellants submitted that a community standard or standards could properly bear upon the question, indeed effectively determine, whether the imputation that the respondents, as restaurateurs, sell unpalatable food and provided some bad service at their restaurant was conveyed, not conveyed, or conveyed and defamatory.
We would reject that submission. Business capacity and reputation are different from personal reputation. Harm to the former can be, as here, inflicted more directly and narrowly than harm to a person’s reputation. A person who does not have an admirable character may be a very good restaurateur. It might be possible to say things about him or her personally that are not defamatory, but not about that person as a restaurateur in relation to the conduct of the restaurant. Restaurant standards rather than community ones are the relevant standards in that situation. No community standard or value could obliterate or alter the defamatory meaning of the imputations in this case. It is unimaginable, in any event, that the estimation of the respondents in the mind of any adult person, let alone a reasonable reader, would not be lowered by a statement that they sold unpalatable food and provided bad service at their restaurant, and did so for considerable sums of money.[35]

[34]Ibid 350 [184].

[35]Ibid 351 [187]–[190].

I turn now to the decision in Radio 2UE. The principal judgment in that case was the joint judgment of French CJ, Gummow, Kiefel and Bell JJ. In that joint judgment relevant passages from the judgments in Gacic, to which I have referred, were adopted and endorsed.[36]
[36]The passage from the judgment of Gummow and Hayne JJ was cited in Radio 2UE at 467 [5] and 478 [40] and the passage in the judgment of Callinan and Heydon JJ was cited at 467 [5], 468 [10] and 476 [32].

The joint judgment in Radio 2UE confirmed that the ‘general test’ of whether a statement is defamatory is ‘whether the published matter is likely to lead an ordinary reasonable person to think the less of a plaintiff’.[37] It was also accepted that a matter might be defamatory if it caused a plaintiff to be ‘shunned or avoided’ but that was described that as ‘something of an exception to the requirement that there be damage to a plaintiff’s reputation’.[38]
[37](2009) 238 CLR 460, 467 [5].
[38]Ibid 467 [4].

The particular imputations which were the subject of Radio 2UE were not relevantly similar to those relied upon here or those relied upon in Gacic. The imputations arose out of a radio broadcast in which comments were made by the presenter about the plaintiff journalist. The directly personal nature of what was said in Radio 2UE was very clear. It was contended that what had been said had damaged the plaintiff in both his personal reputation and his reputation as a journalist, and the issue on appeal in Radio 2UE was whether what had been said by the Court of Appeal in Gacic about the test to be applied in relation to imputations concerning a person’s business or profession had been correct. The Court of Appeal had held that where a person was allegedly defamed in their business or professional capacity it was not the general test which applied but a more specific test directed at whether the imputations tended to injure the plaintiff in his or her trade or business. The joint judgment rejected that proposition. It held that the correct approach was as follows:

It was necessary that the jury in this case be told that the imputations as to the plaintiff’s professional reputation were to be adjudged by reference to whether they would be likely to make an ordinary reasonable person think less of the plaintiff. In doing so they were to assume that that hypothetical person applied whatever community standards as were appropriate and relevant to the imputations.[39]

[39]Ibid 482 [53].

The error was as follows:

The Court of Appeal in Gacic was in error in requiring a jury to be directed that the general test as to whether an imputation is defamatory is not to be applied in cases involving defamation in the way of a plaintiff’s business or professional reputation.[40]

[40]Ibid 483 [60].

Two passages from the joint judgment in Radio 2UE were relied upon by the defendants before me in support of what was said to be the ‘axiom’ that an imputation as to a person’s business or profession will be defamatory only if it imputes a lack of qualification, knowledge, skill, capacity, judgment or efficiency.

The first passage was the following:

It is not in dispute that persons may be defamed in their business reputation. The common law has for some time recognised that words may not only reflect adversely upon a person’s private character, but may injure a person in his or her office, profession, business or trade. This may be so where the words reflect upon the person’s fitness or ability to undertake what is necessary to that business, profession or trade. But in each case the injury spoken of is that to the person’s reputation.
The remedy which the law provides for injury to a person’s business or professional reputation must be distinguished from that for malicious statements which result in damage not to the reputation but to the business or goods of a person. The former is provided by an action for defamation, the latter by that for injurious falsehood. Lord Esher MR explained the distinction in South Hetton Coal Co Ltd v North-Eastern News Association Ltd. A false statement that a wine merchant’s wine is not good, which is intended to and does cause loss to the wine merchant’s business, is an injurious (or ‘malicious’) falsehood. A statement reflecting upon that person’s judgment about the selection of wine, and therefore upon the conduct of his business, may be defamatory of him. Gummow J observed in Palmer Bruyn & Parker Pty Ltd v Parsons that the action for injurious falsehood is more closely allied to an action for deceit.
The distinction between defamation and injurious falsehood has some relevance to these proceedings, which are brought under the Defamation Act 1974 (NSW). That Act repealed the Defamation Act 1958 (NSW). The 1958 Act imported a meaning of defamation from the Criminal Code (Qld), which was extended beyond that of the common law and included injurious falsehood. The common law requirement that the plaintiff’s reputation be disparaged, for matter to be found defamatory, was thereby removed. It was sufficient, relevantly, that an imputation concerned the plaintiff and was likely to injure the plaintiff in his or her profession or trade. The 1974 Act reverted to the common law requirements of what is defamatory. Accordingly for present purposes, a publication must have an effect upon the reputation of the plaintiff rather than upon the business, trade or profession of the plaintiff as such.[41]

[41]Ibid 468–9 [10]–[12] (citations omitted).

Amongst the cases cited in relation to the effect of the various New South Wales legislative provisions was Sungravure, to which I have already referred.

The other passage relied upon by the defendants was the following:

The concept of ‘reputation’ in the law of defamation comprehends all aspects of a person’s standing in the community. It has been observed that phrases such as ‘business reputation’ or ‘reputation for honesty’ may sometimes obscure this fact. In principle therefore the general test for defamation should apply to an imputation concerning any aspect of a person’s reputation. A conclusion as to whether injury to reputation has occurred is the answer to the question posed by the general test, whether it be stated as whether a person’s standing in the community, or the estimation in which people hold that person, has been lowered or simply whether the imputation is likely to cause people to think the less of a plaintiff. An imputation which defames a person in their professional or business reputation does not have a different effect. It will cause people to think the less of that person in that aspect of their reputation. For any imputation to be actionable, whether it reflects upon a person’s character or their business or professional reputation, the test must be satisfied.[42]

[42]Ibid 477 [36] (citations omitted).

The passages relied upon from the joint judgment in Radio 2UE do not impose the ‘axiomatic’ requirement for which the defendants contend. Any such requirement could only have been imposed by rejecting the High Court’s analysis in Gacic. The analysis in Gacic was not rejected. Relevantly, it was endorsed.

In Radio 2UE the joint judgment emphasised that the High Court in Gacic had not considered the issue of the application of the general test for defamation. The joint judgment analysed the judgments of Gleeson CJ and Crennan J and of Callinan and Heydon JJ in Gacic as having applied the general test, rather than the erroneous test which had been suggested in the New South Wales Court of Appeal.[43] The joint judgment quoted the passage from the judgment of Callinan and Heydon JJ, which I quoted earlier, where they had stated that it was ‘unimaginable’ that the estimation of the restaurateurs in the mind of any reasonable reader would not have been lowered by the imputations about unpalatable food and poor service which had been made in that case.[44]
[43]Ibid 472–3 [21]–[25].
[44]Ibid 473 [24].

The joint judgment in Radio 2UE was concerned to emphasise the importance of the application of the general test. In applying that test an ordinary reasonable person should be expected to draw upon ‘such community standards as may be relevant, in order to answer the question whether there has been injury to that reputation’.[45] The judgment went on:

In some cases injury to reputation may appear so obvious that a standard, which may unconsciously be applied, is not identified. And in some cases such a conclusion may be possible without the need to identify a standard. It may be obvious that people will be thought the less of simply because of what is said about them.
The imputations in Gacic were considered to fall within this latter category.[46]

[45]Ibid 480 [46].

[46]Ibid 480 [47]–[48].

The joint judgment in Radio 2UE endorsed what the High Court had said in Gacic in relation to the issue of whether imputations (a) and (c) in that case were defamatory, while rejecting what the New South Wales Court of Appeal had said in Gacic about the test to be applied when it was alleged that imputations had been made damaging a person’s business reputation.

Heydon J in Radio 2UE held that it was unnecessary to decide these issues as the imputations there were inescapably and unmistakably defamatory no matter what test was applied.[47] In that context he cited what he and Callinan J had said in Gacic.
[47]Ibid 486 [69].

I do not accept the defendants’ submission that an imputation against a person in their business or profession can be defamatory only if it imputes a lack of qualification, knowledge, skill, capacity, judgment or efficiency on the part of the plaintiff, if what is meant by that submission is that such a plaintiff must plead and prove an imputation to that effect. In my view, that submission, in effect, seeks to require a plaintiff to articulate the reasoning process by which the ordinary reasonable reader would think less of the person in their business or profession. I find this proposition to be inconsistent with both Drummond-Jackson and Gacic, and with Radio 2UE which relevantly endorsed what was said in Gacic.

As is recognised in Gacic, and as has been stated in other cases,[48] a statement might be made about a person’s business which damages that business but which does not lower the reputation of the business owner or manager in the mind of the ordinary reasonable person. Goods or services can be disparaged without defaming the person who sells or provides them.
[48]See, eg, South Hetton Coal [1894] 1 QB 133, 139; Sungravure (1975) 134 CLR 1, 11.

The plaintiffs in Gacic did not plead that the review had implied that they were incompetent. As was pointed out by the defendants in that case, there are reasons why a restaurant might serve unpalatable food or provide poor service which have nothing to do with the competence of the restaurateur. The High Court made it clear, however, that if the statement made had the effect of lowering the personal business reputation of the plaintiff, as opposed to merely damaging the plaintiff’s business, that satisfied the general test. The High Court made it clear in Radio 2UE that in all but exceptional cases it is the general test which is to be applied, but it also endorsed the analysis in Gacic as to whether those imputations were defamatory.

Turning then to the plaintiff’s submissions on the test to be applied, those submissions tended to conflate the general test with the circumstance which the joint judgment in Radio 2UE described as ‘something of an exception’, being that a matter also might be defamatory if it causes a plaintiff to be shunned or avoided. The case cited in the joint judgment in respect of that exception was Youssoupoff v Metro-Golden-Mayer Pictures Ltd.[49] In that case, it was held that a woman had been defamed when it had been asserted that she had been raped notwithstanding that there was no suggestion of fault on her part, and the court referred to other circumstances where that might also be the position, being assertions that a person was insane or suffering from certain diseases or other cases where no direct moral responsibility could be placed upon the plaintiff.[50]
[49](1934) 50 TLR 581.
[50]Ibid 587.

In Berkoff v Birchall, Phillips LJ observed in respect of the application of the ‘shun and avoid’ approach:

It is not easy to find the touchstone by which to judge whether words are defamatory which tend to make other persons shun or avoid the plaintiff, but it is axiomatic that the words must relate to an attribute of the plaintiff in respect of which hearsay alone is enough to provoke this reaction.[51]

[51][1996] 4 All ER 1008, 1020. See also Radio 2UE Sydney Pty Ltd v Chesterton [2008] NSWCA 66 [90]; Mallik v McGeown [2008] NSWCA 230 [80]; Todd v Swan Television and Radio Broadcasters Pty Ltd (2001) 25 WAR 284, 301–302 [95]; Khor v Nationwide News Pty Ltd [1999] VSC 38 [9].

It seems to me that the plaintiff’s conflation of the general test with the principles referable to defamation on the basis referred to as ‘shun or avoid’ is not correct. The ‘shun or avoid’ approach is exceptional and is related to certain special attributes of the plaintiff. Special attributes of the plaintiff of the kind referred to in Youssoupoff and Berkoff are not present here.

There is one reported decision which might be seen as inconsistent with this conclusion. In David Regan & Co Pty Ltd v West Australian Newspapers Ltd[52] two judges of the Western Australian Court of Appeal, overturned a decision of a Master on a strike out application and used the language of ‘shun and avoid’ in doing so. The claim was founded upon a statement in a local newspaper that a local estate agency had employed a person who had been found guilty of acting dishonestly or deceptively. In my view, that case is properly analysed as one where it was found to be arguable that the imputations constituted a reflection upon the business reputation of the estate agency.[53] The use of ‘shun or avoid’ terminology there was unnecessary and inexact. To the extent the Western Australian Court of Appeal departed from Radio 2UE’s emphasis upon the application of the general test, I must follow Radio 2UE.
[52][2007] WASCA 14.
[53]Ibid [17] (Pullin JA) and [34]–[35] (Buss JA). Pullin JA relied considerably on the English Court of Appeal decision in Aspro Travel Ltd v Owners Abroad Group PLC [1996] 1 WLR 132 which was a case addressed in terms of effect upon business reputation and not the ‘shun and avoid’ exception.

Relevant legal conclusions

My conclusions are as follows:

(a)The test to be applied in all but exceptional cases is whether the imputation would be likely to make an ordinary reasonable person think less of the plaintiff.
(b)This general test applies to cases involving defamation in the way of a plaintiff’s business or professional reputation. The defendants’ asserted ‘axiomatic’ qualification to the test is not part of the law.
(c)This is not one of those cases where the ‘shun or avoid’ approach applies.

Do the publications convey the imputations pleaded?
Imputation (a): The plaintiff runs a venue that is regularly attended by members of an outlaw motorcycle gang

The news article and the colour piece, the website, and the reproduction of the colour piece which was at the community meeting all conveyed the imputation that Club Rawhide is regularly attended by members of an outlaw motorcycle gang, being the Outlaws.

The plaintiff is the part owner and manager of Club Rawhide. She is the ‘face’ of Club Rawhide. She is well known as the manager of Club Rawhide in the Shepparton community generally, and to many patrons of Club Rawhide whether they are from Shepparton or elsewhere. People in Shepparton and many patrons of Club Rawhide, who read the articles or heard the broadcast, would have identified the plaintiff as the ‘Madam Black Mercedes’ who ‘runs the place’. There is an issue as to how widespread that identification was proved to be, to which I will return.

The defendants in final submissions accepted that imputation (a) was conveyed. The focus of their submission in relation to this imputation was the defence of justification. I will deal with that immediately after addressing whether the other pleaded imputations were conveyed.

Imputation (b): The plaintiff runs a venue in which police give secret tip-offs to members of outlaw motorcycle gangs that hinder police investigations and frustrate search warrants

The defendants submitted that there were at least three gradations of possible meaning when attempting to identify the imputation conveyed by a statement concerning whether particular conduct occurred. These gradations were said to be: that the conduct occurred (level 1); that there are reasonable grounds to suspect that the conduct occurred (level 2); and that whether the conduct occurred is being investigated or there are grounds for investigating whether the conduct occurred (level 3). It was submitted that imputation (b) relied upon the level 1 meaning, namely that the plaintiff runs a venue in which police in fact give secret tip-offs to members of outlaw motorcycle gangs. It was submitted that if this ‘level 1’ meaning was not accepted the plaintiff’s claim failed. The defendants submitted that the imputation pleaded ‘travels well beyond a reasonable interpretation’ of what was written. It was submitted that at best the articles might impute a level 2 meaning, that there are reasonable grounds to believe that police give secret tip-offs to members of outlaw motorcycle gangs at Club Rawhide. It was submitted that the plaintiff had in respect of this imputation ‘pitched her case too high’.

In the colour piece and the news article (read as a composite publication), Mr Rule writes that:

·Both chapters of the Outlaws have ‘no objections to the local strip joint, Club Rawhide’, and that they are ‘regulars’ there.
·Club Rawhide’s location is ‘handy if members [of the local police] need to attend in either professional or pleasure-seeking capacity’.
·Locals suggest Club Rawhide ‘is a convenient common ground for the two groups to unwind’. The ‘two groups’ are the Outlaws and ‘a few country police officers’. These two groups have ‘a healthy mutual respect’. ‘As drinkers do the world over, they probably talk shop and swap business cards and phone numbers’.
·It is yet to be seen whether the Victoria Police anti-corruption investigators, Taskforce Eagle, will dare to ‘wreck the chummy Club Rawhide ambience’.

Elsewhere, the articles either state or clearly imply that Taskforce Eagle is or ought to be investigating police officers suspected of corrupt or improper relationships with outlaw motorcycle gangs, which are claimed to have resulted in secret tip‑offs, and which are likely to constitute the explanation for the removal of incriminating material prior to the arrival of police with search warrants in ‘over at least eight’ instances, most of which were ‘linked’ to the Outlaws.

Mr Rule described the colour piece as being written in a ‘sardonic’ tone. I agree with that description. The tone is cynical and ironic. The tone encourages the reader to make the obvious connections, to read between the lines, and not to be naïve.

The ordinary reasonable person reading the colour piece and the news article would, in my view, receive the message which the plaintiff alleges was conveyed in imputation (b). I do not accept that the message is that there are reasonable grounds to suspect that Club Rawhide is a venue for the meetings. It seems to me that the article says that the meetings do occur. Club Rawhide is a convenient common ground, according to ‘locals’ in the colour piece, it is not a possible or potential common ground. The ‘chummy Club Rawhide ambience’ is something which exists, according to the colour piece, and it remains to be seen whether Taskforce Eagle will ‘dare’ to wreck it. Of more significance, however, is the overall impression. The article conveys to the reader the clear message that only the naïve would fail to realise what is in fact occurring when the ‘two groups’ meet on their ‘common ground’ at Club Rawhide and ‘talk shop’ giving expression to the ‘healthy mutual respect’ which it is suggested they have for each other.

In my view, imputation (b) is the single meaning which ought to be adopted.

Imputation (c): The plaintiff is a brothel madam

Club Rawhide is described as a ‘raunchy strip venue’ in the news article and as ‘the local strip joint’ in the colour piece. There is no other reference to anything with a sexual connotation in the text of the articles. The articles are about police corruption. They are not about sex.

The word ‘madam’ is both an honorific and a name given to a female manager of a brothel. As an honorific, it is now somewhat archaic and is rarely used.

The evidence was that there certainly were people who interpreted the colour piece as asserting that Mrs Hardie was conducting a brothel at Club Rawhide. Mr Rule himself was sufficiently concerned by that possible connotation to see the need to correct it after Mrs Hardie rang him about it, and he attempted to do so, albeit ineffectively. The fact that some people interpreted what was said that way is not the relevant issue, however. Evidence is not admissible on the question of meaning.

Mason J (as he then was) observed in Mirror Newspapers Ltd v Harrison:

It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff.[54]

[54](1982) 149 CLR 293, 301.

Club Rawhide offers entertainment of a very sexually explicit nature. The nature of the entertainment offered is such that Mrs Hardie has gone to considerable lengths to regulate the behaviour of the women who provide the entertainment, inside and outside the club, and the behaviour of the patrons who seek out that form of entertainment. All of the evidence before me indicated that Mrs Hardie conducts this business in a professional manner. The very nature of the business, however, means that the risk of prostitution occurring is inevitably present. That is why Mrs Hardie adopts strict rules and practices in relation to it. That is also why it would take little to excite in some readers a belief that prostitution was occurring. Some readers would hold beliefs and prejudices about strip clubs which mean they would adopt that conclusion.

Some people did conclude that Club Rawhide was a brothel and that Mrs Hardie was a brothel madam because Mr Rule referred to her as ‘Madam Black Mercedes’. But that does not mean that the ordinary reasonable person reading the news article and the colour piece would understand what was being said as being that Mrs Hardie was herself a brothel madam.

I do not consider imputation (c) to be the single meaning which should be adopted. In my view, it is not an approximate centre point in the range of possible meanings and it is not the dominant meaning, notwithstanding that some persons, perhaps many persons, may have interpreted it in that way. My reasons for this conclusion are as follows.

(a)The news article and the colour piece are not about sex. No reference is made to the form of entertainment offered or the activities of the women who provide entertainment at the club.
(b)Although the term ‘madam’ is a term which can apply to the female manager of a brothel, that is not its only use. The use of this somewhat archaic honorific in the course of an article written in a sardonic tone would not, in my view, be reasonably interpreted as a serious statement that the person who ‘ran’ Club Rawhide was in fact the manager of a brothel.
(c)A conclusion that Mrs Hardie was the manager of a brothel could only be drawn if the reader was prepared to read into the use of the expression considerations which do not arise out of the text of the article but arise instead out of beliefs or prejudices the reader holds in relation to strip clubs of this kind and the people who run them.

The focus of the defendants’ case in relation to this imputation was that what was said did not convey it. It was not suggested that it was justified. The submissions made on qualified privilege did not address it. My conclusion is that imputation (c) was not conveyed.

For like reasons I do not consider that imputation (c) was conveyed in the Triple M broadcast. The broadcast did not improve the situation but it did not make it worse either. Mr Rule’s attempts to disabuse those who had interpreted his article as suggesting Mrs Hardie was a brothel madam of that notion were ineffective for the reasons I have given. But I do not consider that an ordinary reasonable person would have interpreted what was said as conveying the precise opposite of what Mr Rule was attempting to convey.

Imputation (d): The plaintiff runs a brothel at Club Rawhide in Shepparton

The analysis here is the same as that in relation to imputation (c).

Was imputation (a) justified? Are members of an outlaw motorcycle gang ‘regulars’ at Club Rawhide?

There is no doubt that prior to December 2012 members of the Outlaws attended Club Rawhide from time to time. Mrs Hardie gave evidence as to how regularly they attended, as did her head of security, a former barmaid, two patrons, and an acquaintance of Mrs Hardie. The witnesses and counsel referred to the Outlaws as ‘bikies’.

Mrs Hardie said bikies never attended in groups of more than two or three and came as individuals or in groups of two ‘very rarely’.

Of the two patrons, Ms Eve Hasan, who had known Mrs Hardie for 12 years and attended the club with her partner ‘about every six, eight weeks’ as well as on other occasions, gave evidence that she could ‘never’ remember seeing any person at the club that was identifiable as a bikie. Mr Dean Jafer, who had known Mrs Hardie for about 25 years and attended the club about once a month, gave evidence that bikies, either individually or in groups, would not be seen in the club ‘often’, and that when the club was located at its previous premises he saw bikies there ‘once every maybe year or so’.

Mr Adrian Vandermeer, a local building supplies salesman who had known Mrs Hardie for 30 years in a professional capacity, gave evidence that the club was not a ‘bikie haunt’.

Mrs Hardie’s head of security, Mr Zito, said bikies came in ‘every six weeks maybe’ in groups of ‘two or three’.

Ms Duke, the former barmaid, worked at Club Rawhide until December 2012. She maintained that members of the Outlaws had not been ‘regulars’ when she worked there as she considered a regular to be someone who was there every week. The evidence she gave in chief as to how often bikies had attended while she worked there was as follows:

What about bikies? Did you ever see people come into the club who you knew to be bikies or members of the bikie gang? – – – Yes.
When they came in by what means did you recognise or identify them as a member of the Outlaws bikie gang? – – – I wouldn’t ever notice actually just the name but they had their leather vests on. They would pull up on their bikes maybe. They had their leather vests. They had long hair, beards. Typical bikie persona, I guess, if you can say that.
With what sort of frequency would they attend the club up until the time you stopped work in about December 2012? – – – Not that often. Once or twice a month, maybe.
In what sort of numbers did they attend? Did they come in as singles or doubles? – – – At least two, up to maybe five, six. Not very often though.
At the time they came in did they ever cause any trouble that you can remember? – – – No.
At any time the bikies came in do you ever remember them talking to any person who you knew to be a police officer? – – – They kept to themselves.
Who kept to themselves? – – – The bikies kept to themselves. They didn’t even talk to other patrons.

I accept this evidence. To the extent that it is inconsistent with other evidence on the subject, I prefer the evidence of Ms Duke. Apart from a very positive impression which I formed of her, her evidence was consistent with evidence of what occurred during an incident at the club on the night of 7/8 December 2012. Ms Duke herself was not working that night.

On the night of 7/8 December 2012 a fight occurred at Club Rawhide. The police attended and a number of people were charged. It is to that incident that reference was made in the colour piece when Mr Rule wrote that ‘police arrested the bikies and brawlers’ and that ‘Madam Black Mercedes’ would be grateful.

Mrs Hardie gave a detailed account of the incident. She has 16 CCTV cameras at Club Rawhide and extracts from the footage capturing the incident that night were tendered. In cross-examination Mrs Hardie was taken through the CCTV footage and she explained what was depicted.

The relevant events began when a member of the Outlaws, referred to as ‘Gypsy’, arrived at Club Rawhide and parked in the disabled car park to the side of the building. When asked whether the bikies were allowed to park their bikes in the disabled car spot, Mrs Hardie responded: ‘He always did because he is disabled.’

Gypsy then entered the front of the club. He was greeted by one of the security officers, Gurpreet Singh, at the door and was greeted again by the person at the front desk, Nick Skipper. Neither Mr Singh nor Mr Skipper gave evidence. Viewing the footage it seems to me that Gypsy was greeted by them as someone familiar. When it was put to Mrs Hardie that he was greeted as someone fairly well known she did not deny it but she said that ‘we say hello to everyone’ and that ‘Nick shakes just about everyone’s hand’. She agreed that Gypsy has been in the club on many occasions wearing his ‘colours’, being a reference to the insignia of the motorcycle club. He was wearing ‘colours’ on this occasion.

The other source he was referring to was V. In his evidence-in-chief Mr Rule said V expressed concerns about one matter (which is not relevant) and then continued:

So he was most concerned about that scenario and he further told me about Club Rawhide. He mentioned in passing who ran it and that it was Mrs Raelene Hardie. That was the first time I had heard Mrs Hardie’s name. However, he was at pains to tell me that Club Rawhide, although it was a strip club and attracted the sort of people who attend strip clubs, that he had nothing particularly against Raelene Hardie. He thought she ran a pretty clean strip club, as far as strip clubs go. He certainly did not suggest that it was anything more than a strip club.

As is apparent, Mr Rule’s account of what V had told him about Club Rawhide added nothing of relevance in the present context to what D had said.

When asked in evidence-in-chief about the totality of his investigations concerning the Outlaws, police and Club Rawhide Mr Rule said:

Well, it was clear that outlaw motorcycle gang members in the district in the entire Goulburn Valley did have links with corrupt police. It seemed clear from what I have been told. That was borne out by the fact that Taskforce Eagle had gone there to and bugged a police station, which was a pretty serious move, I would have thought, so there was that clear connection between corrupt police and outlaw motorcycle members who are drug dealers and gun runners and so on. It was suggested to me by both those sources that if not others, that the — a natural meeting place, among anywhere else around Shepparton, would be somewhere like Club Rawhide because it was highly unlikely that police would actually visit the Outlaws clubhouse, unless they were raiding the place. I don’t think they would visit in a social capacity. It would be too obvious, too blatant and too brazen. So they would naturally tend to meet, perhaps casually, elsewhere. It was suggested to me that Club Rawhide was a fairly natural, neutral place where from time to time a meeting could take place. At no time would I suggest that’s an exclusive arrangement that that would be the only place people would meet.

On the basis of what Mr Rule said in evidence-in-chief the relevant information obtained from D and V was nothing more than speculation to the effect that Club Rawhide was a possible place where police and motorcycle gang members could meet. Mr Rule interprets his colour piece as saying no more than that. In my view, what he wrote went beyond that and went beyond what he had been told. Instead of suggesting that Club Rawhide was one of a number of potential locations where corrupt police and members of motorcycle gangs could meet, what he wrote asserted that it was a venue where they did in fact meet.

When it was put to him in cross-examination that the information he had obtained did nothing more than suggest the possibility of meetings at Club Rawhide, he maintained that what he had been told was ‘stronger than that’ but then went on:

It was suggested to me that that was the place where certain bikies and their associates and friends went from time to time and obviously good neutral ground to speak to police or people connected with the police, intermediaries or whatever it might be...

When it was put to him that what he had been told was nothing but speculation he responded that it was ‘informed speculation’. When it was put to him that what he was told amounted to nothing more than ‘guessing’, he said that he thought guessing made it sound too flimsy and that it was stronger than that. When asked why he had written that corrupt police frequented the club, he referred to a history of questionable behaviour by police in the Shepparton area generally and then added that he believed from time to time some of those people (being the police) would attend Club Rawhide.

Throughout most of his cross-examination Mr Rule maintained an account consistent with what he had given in evidence-in-chief, namely that Club Rawhide ‘would be the sort of place’ where the things referred to in his story could occur. At times in his cross-examination, however, he asserted that he had been told that it was not a place where they could meet but a place where they would meet[57] and did meet.[58] As senior counsel for the plaintiff submitted, he did change his evidence on this point.
[57]Transcript 390.
[58]Transcript 405–6.

Towards the end of Mr Rule’s cross-examination on this issue I suggested to him that if a person had read his article and interpreted it as conveying the message that corrupt police and bikies did meet at Club Rawhide that would go beyond what he had been told. I asked him whether that was right and he responded:

It is, in the sense that I haven’t any proof of people meeting there, in the way that we had proof that the bikies attend the place because we know that from the Collyer incident. I have no proof of a particular deal being done there by particular people. That is true.[59]

[59]Transcript 410.

Mr Rule agreed with the proposition I had put to him but then addressed it as if the issue was one concerning proof. My impression watching him give his evidence was that he gave an honest and frank account of what his sources had told him during his evidence-in-chief. He thinks his articles accurately reflect what he had been told. In my opinion they do not.

Mr Rule was prepared to accept a proposition put to him by senior counsel for the plaintiff that his articles suggested Club Rawhide was a probable meeting place.[60]
[60]Transcript 415 and 418.

Recipients’ interest in the defamatory matter

Under the Defamation Act, in order for the defence of qualified privilege to apply to a defamatory matter the recipients must have an interest or apparent interest in having information on some subject and the defamatory matter must be published to the recipient in the course of giving to the recipient information on that subject.

The defendants submitted that the character of the interest which the recipient was required to have in having information in relation to the relevant subject matter was not the narrow kind of interest which was required under the common law qualified privileged defence but the more expansive form of interest adopted in New South Wales authorities under s 22 of the Defamation Act 1974 (NSW). The cases cited were Barbaro v Amalgamated Television Services Pty Ltd,[61] Austin v Mirror Newspapers Ltd,[62] John Fairfax Publications Pty Ltd v Zunter,[63] Echo Publications Pty Ltd v Tucker (No 3)[64] and Griffith v Australian Broadcasting Corporation.[65]
[61](1985) 1 NSWLR 30.
[62][1986] 1 AC 299
[63][2006] NSWCA 227.
[64][2007] NSWCA 320.
[65][2010] NSWCA 257.

I accept that submission. The relevant interest required by s 30(1)(a) of the Defamation Act is not the narrow interest required at common law. It includes the genuine interest of the public at large in having information on public affairs such as police corruption.

Malice

The plaintiff submitted that the defence of qualified privilege if it otherwise were to apply is defeated by s 30(4) of the Defamation Act because the publication was activated by malice. Malice in this context does not mean ill-will, bias, prejudice or a disregard for the truth. It means that an occasion of qualified privilege must not be used for a purpose or motive foreign to the duty or interest that protects the making of the statement.[66] No such motive or purpose was postulated, or was suggested by any of the evidence. If the defence otherwise applies, malice will not defeat it.

What is the ‘matter’ in s 30(3) of the Defamation Act?

[66]Roberts v Bass (2002) 212 CLR 1, 30–1 [75]–[76].

In addressing s 30(3) senior counsel for the defendants submitted that the ‘matter’ referred to in paragraphs (a)–(i) was the entirety of the publication in which the imputations complained of appeared and not the imputations complained of themselves. Thus, for example, in relation to (a) the issue to be addressed would be the extent to which the entirety of the two articles was of public interest, not just the things said about Mrs Hardie.

As a matter of statutory construction I do not accept this approach. Section 30(1) provides a defence for the publication of ‘defamatory matter’. The only ‘defamatory matter’ here is what was said about Mrs Hardie. The section then sets out three requirements which the defendant must prove to have this defence. The first requirement concerns the existence of an interest in having information on some ‘subject’ (s 30(1)(a)). That ‘subject’ is potentially broader than the defamatory matter. The second is that the ‘matter’, which it seems to me must be the ‘defamatory matter’ already referred to, must be published in the course of giving the recipient information on the ‘subject’, which is the potentially broader concept (s 30(1)(b)). Finally, the conduct of the defendant in publishing ‘that matter’ must be reasonable (s 30(1)(c)). The reference to ‘that matter’ must, it seems to me, be a reference to the ‘defamatory matter’ already referred to.

When one then moves to s 30(3), where the circumstances the Court may take into account in determining reasonableness are set out, the issue is ‘whether the conduct of the defendant in publishing matter about a person is reasonable in the circumstances’. Any doubt about the ambit of the ‘matter’ in the context is resolved, it seems to me, by the fact that the issue the sub-section is addressing is the publication of matter ‘about a person’. This can only be the person defamed. The ‘matter’ must be the ‘defamatory matter’.

Section 30 closely reflects what were the provisions of s 22 of the Defamation Act 1974 (NSW), save that that Act contained no counterpart to s 30(3) until 2002. Under s 22 of the Defamation Act 1974 (NSW), it was held that the publication of each imputation had to be reasonable.[67] As has recently been explained by White J in Hockey, there are problems in the application of authorities on s 22 of the Defamation Act 1974 (NSW) to s 30 of the Defamation Act 2005 (NSW) which is identical to the Victorian provision.[68] White J nevertheless concluded that the reasoning adopted in the New South Wales authorities on s 22 was applicable to s 30.[69]
[67]Morgan v John Fairfax and Sons Ltd (No 2) (1991) 23 NSWLR 374, 387–8.
[68][2015] FCA 652 [314]–[317].
[69]Ibid [318]–[320].

Senior counsel for the defendants relied on the broad definition of ‘matter’ in s 4. It includes, amongst other things, ‘an article’. The submission was that as ‘matter’ is a defined term, wherever it appears in s 30 one should read the reference as a reference to the entire article (or here, the composite of the two articles). Thus, in s 30(3) the enquiry is as to the reasonableness of the entire article. I do not accept that. The references to ‘matter’ in s 30 are references back to the ‘defamatory matter’ in the opening words of the section. Further, in the specific context of s 30(3) what is to be assessed is the ‘matter about a person’. The enquiry in s 30(3) must be about the defamatory aspects of the article as only they are ‘defamatory matter’ ‘about’ the relevant person.

White J in Hockey reached the same conclusion applying, for the reasons he explained, the New South Wales authorities on s 22. His conclusion, with which I respectfully agree, was:

… the term ‘defamatory matter’ appears to be used as a composite expression that is, as a term for the defamatory content of a matter whether it be a single imputation or multiple imputations. Accordingly, it is the respondents’ conduct in publishing those matters which s 30(1)(c) requires to have been reasonable.[70]

[70]Ibid [320].

I also adopt, with respect, his observation:

It is not readily to be supposed that s 30 is intended to allow a defendant to avoid liability for a defamation by establishing that its conduct in publishing an article was, considered generally, reasonable even though its conduct in including a defamatory imputation in the article was unreasonable.[71]
[71]Ibid [319].

Have the defendants established the qualified privilege defence in relation to imputation (b)?

The readership of the Herald Sun did have an interest in having information on the subject of police corruption in the Goulburn Valley. Imputation (b) was published to that readership in the course of giving them information on that subject. Mr Rule believed that the recipients had that interest and that belief was based upon reasonable grounds. The assertion of malice is rejected.

The sole remaining issue then is whether the conduct of the defendants in publishing imputation (b) about Mrs Hardie was reasonable in the circumstances. I will address this issue by reference to the factors listed in s 30(3) of the Defamation Act.

(a) The extent to which the matter published is of public interest
The story about police corruption in the Goulburn Valley was of public interest, but, as Mr Rule himself conceded, the component which concerned Club Rawhide was ‘colour’. The public interest aspects of the story could have been written without it. But even though Club Rawhide was only included for ‘colour’, it was portrayed as having a prominent role. It was portrayed in that way in the text of the colour piece and that portrayal was emphasised by the accompanying photographs. There are three photographs — the Outlaws’ club house, the police station and Club Rawhide. The photograph of Club Rawhide is the top photograph and is the biggest.
(b)The extent to which the matter published relates to the performance of the public functions or activities of the person
Mrs Hardie has no relevant public functions or activities.

(c)The seriousness of any defamatory imputation carried by the matter published
Whilst imputation (b) was defamatory of Mrs Hardie it did not state that she was a knowing party to the secret tip-off meetings. The imputations would have been more serious if that had been stated. The defamatory imputation is nevertheless serious, in my view. Her business premises, which she personally ‘runs’, is said to be the venue for very serious criminal corrupt conduct.
(d)The extent to which the matter published distinguishes between suspicions, allegations and proven facts
It seems to me that Mr Rule failed to distinguish between suspicions, allegations and proven facts. The tone in which the colour piece was written made any such distinction difficult. Mr Rule may believe that he was not suggesting Club Rawhide was in fact the venue for secret meetings but in my view that is not what he wrote.
(e)Whether it was in the public interest in the circumstances for the matter published to be published expeditiously
It was not suggested that urgency of publication was relevantly a factor to be considered here.

(f)The nature of the business environment in which the defendant operates
This was not suggested to be a relevant factor.

(g)The sources of the information in the matter published and the integrity of those sources
This was a case where Mr Rule, as a journalist, did not identify his sources other than by initials and a description. Senior counsel for the plaintiff did not seek any such identification. In such circumstances, it seems to me that it is impossible to make any assessment of the integrity of the sources. In the context of this case, however, the more important point is that what Mr Rule wrote went beyond what his sources had told him.
(h)Whether the matter published contained the substance of the person’s side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person
The published material did not contain the substance of Mrs Hardie’s side of the story and no attempt at all was made by the defendants to obtain and publish a response from her. This was justified by Mr Rule by the need to preserve the exclusivity of the story. That is of course an approach which necessarily sacrifices the interests of the plaintiff to those of the defendants.
(i)Any other steps taken to verify the information in the matter published
Mr Rule suggested that what he had been told by D and V had been put by him to a variety of unidentified further sources in the local area and they had not contradicted what had been said. The ‘other steps’ taken by Mr Rule do not assist him in establishing the reasonableness of the publication given my conclusion that he went beyond what his sources D and V had told him.
(j)Any other circumstances that the Court considers relevant
In my view, it is relevant that the Club Rawhide component of the story was not of importance but was included because it added ‘colour’.

My conclusion is that the conduct of the defendants in publishing the defamatory matter constituted by imputation (b) was not reasonable in the circumstances. What was written went beyond what Mr Rule’s sources had told him about Club Rawhide. What was written did not distinguish between suspicions, allegations and proven facts. What was written about Club Rawhide was not important in relation to the significant public interest aspects of the story. It was unreasonable for Mr Rule not to contact Mrs Hardie before publishing the story. If he had contacted Mrs Hardie he may have discovered, as was revealed during the trial, that there is no evidence whatsoever of corrupt police, or indeed any police, ever meeting members of the Outlaws at Club Rawhide.

Other issues
Judgment of Dixon J

In May 2014 Dixon J heard and determined a strike out application brought by the defendants.[72] Dixon J refused to strike out the pleaded imputations. Before me, the plaintiff submitted that it was an ‘abuse of process’ for the defendants to repeat submissions they had made to Dixon J. I reject that. Dixon J decided nothing more than that the pleaded imputations were capable of being found to have been conveyed and to have been defamatory. Nothing prevents the defendants repeating the same submissions when the issue is whether they were in fact conveyed and defamatory.
[72]Hardie v The Herald and Weekly Times Pty Ltd [2014] VSC 232.

Aggravated damages

The plaintiff submitted that the circumstances in this case warrant an award of aggravated damages.[73] The circumstances relied upon were the following:
[73]The statutory maximum does not apply to damages for non-economic loss if the circumstances of the publication of the defamatory matter are such as to warrant an award of aggravated damages: s 35(2) Defamation Act 2005.

(a)the defendants’ failure to properly investigate the allegations;
(b)the defendants’ malice;
(c)the failure to apologise;
(d)the repetition of ‘madam’ in the Triple M broadcast;
(e)Mr Rule’s attempt in his phone call with Mrs Hardie to ‘bounce’ her;
(f)the website publications remain on line;
(g)the ‘realisation’ of the plaintiff’s fears of republication by what occurred at the ‘ice’ meeting;
(h)Mr Rule’s alleged conduct in laughing at the plaintiff as she entered the courtroom on the first day of the trial.

This is not a case for aggravated damages.

The case itself has been conducted responsibly by the defendants.

I heard both Mr Rule and Mrs Hardie give evidence about Mr Rule allegedly laughing at the plaintiff. She took offence. He maintains it was a misunderstanding. I cannot determine which of them is correct. The incident is not a proper basis for aggravated damages.

The plaintiff’s case as to three of the four imputations has failed. I do not see the defendants’ failure to apologise or the continued presence of the articles on the website as justifying aggravated damages in those circumstances. Of course, given my conclusions, the publications should now be removed from the first defendant’s own website, and I assume they will be.

For the reasons set out in respect of the defence of qualified privilege, I reject the claim of malice.

I have addressed the issues of the defendants’ investigations, the Triple M broadcast, and the ‘ice’ meeting. Those matters do not warrant aggravated damages.

Finally, when Mrs Hardie rang Mr Rule on 16 May, Mr Rule raised with her matters he thought might embarrass her which had little or nothing to do with the articles. Mr Rule said that he had done that as a form of defence. With commendable frankness, he described it as an attempt to ‘bounce’ her. In other words, he attempted to deflect her complaint about him by raising matters possibly embarrassing to her. This conduct was rude and uncalled for. But on both of their accounts the two of them got over that initial foray and then discussed the matter of principal concern, which was the use of the word ‘madam’. Essentially they came to an understanding that Mr Rule would apologise the following day on the Triple M radio appearance. Mrs Hardie was upset about the unsatisfactory nature of the apology Mr Rule gave. I can understand that but, in my view, the circumstances are not a basis for aggravated damages.

My conclusion is that the matters relied upon do not warrant aggravated damages, either individually or in combination.

Publication on the website, at the ‘ice meeting’ and in the Triple M broadcast

It was submitted on behalf of the defendants that there was no evidence that any person had read the news article or the colour piece on the website. There are over 50,000 subscribers to the Herald Sun online. Between 29 April 2013 and 2 June 2013 there were almost 120 million hits on the Herald Sun website. In this same period over 1,600,000 unique visits to the website occurred. In the circumstances, I am prepared to infer that the publications were read on the website by members of the public.

The position in relation to the community meeting concerning the drug ‘ice’ on 18 February 2014 is different. The evidence does not establish any more than that a poor reproduction or reproductions of the colour piece were placed ‘on display’ on a table at that meeting. Approximately 150 people attended the meeting. In the absence of evidence I am not prepared to infer that the article was published to any person at that meeting. In the circumstances, it is unnecessary to decide whether publication would have been authorised, or the natural and probable consequence of the original publications.

The Triple M broadcast was undoubtedly heard by listeners in Melbourne. The evidence was that there were people who heard the Triple M broadcast who knew Mrs Hardie and who identified her as the person being talked about. The only imputations allegedly made in that broadcast are imputations (c) and (d). In my view those imputations were not conveyed in the broadcast.

Effect of the publication on Mrs Hardie personally and on her business reputation

The defendants submitted that Mrs Hardie’s major concern in relation to what had been written was that it had impacted negatively upon her business. In the course of her evidence she referred a number of times to the fact that her business had been ‘destroyed’, that she had suffered a very significant downturn in business, and that she may well have to close down. Mrs Hardie’s business partner gave evidence to a similar effect.

Counsel for Mrs Hardie emphasised that she makes no claim for business losses and that the only claim she makes is in relation to the effect of the defamation upon her and upon her business reputation.

Evidence was lead as to a decrease in custom at the club since publication of the articles. It was suggested by the defendants that this was due to a downturn in the local economy since 2009. Mrs Hardie and her business partner, Mr Haynes, gave evidence that six weeks after publication of the articles they ceased opening the club on one of the three nights it was previously open, and that over the last two years business had gone down about 40%. It is difficult to determine the reasons why people have in recent times stopped frequenting the club. In my view, some patrons would have stopped attending because of the articles. Whilst compensation for loss to the business is not sought, the evidence of loss of patronage is relevant to the issue of injury to Mrs Hardie’s business and personal reputation. I accept that in Mrs Hardie’s case her business and her personal reputation are inextricably intertwined.

Mrs Hardie gave evidence that she was disgusted, upset and ‘gutted’ by what had been written about her. Her evidence was that the suggestion that her venue was a meeting place for corrupt police and bikies had made her feel ‘terrible’. She made it clear that she was also very upset by what she interpreted to be the suggestion that she was a brothel madam.

The other witnesses called on behalf of the plaintiff confirmed that Mrs Hardie was ‘totally distraught’ and ‘terribly upset’ by what had been written about her.

Mrs Hardie gave evidence that she was especially upset by the reaction of strangers and acquaintances in the small community of Shepparton. She said that people avoided and ignored her after the articles were published and that that had continued to this day. She said that it had been suggested to her that bikies owned the club. Her business partner also gave evidence that people were saying that bikies ‘ran the show’.

As to the reaction of people in Shepparton, the evidence of Ms Duke was particularly compelling. Ms Duke gave evidence of meeting Mrs Hardie in the supermarket in Shepparton at a time when she had not yet read the article. When asked to describe what occurred she said:

People were kind of taking a wide berth and looking at us weirdly and I have said to Raelene, ‘What’s going on? Why are they not looking at us? Why are they looking at us this way?’, type thing. I had a little boy with me and I thought maybe they were looking at him but it wasn’t that kind of look. It was a look of disgust. I could see people kind of walking around us and glaring at us. I don’t know if ‘glaring’ is the word but it wasn’t a nice look I was getting.

The aspect of the publication that Ms Duke said was referred to by local people with her was that they thought Mrs Hardie was a madam and that Club Rawhide was actually a brothel.

Mrs Hardie has managed the club, which she also part owns, for 20 years. Before that she ran a restaurant and a clothing store, both in the Shepparton area. As a local businesswoman she had been held in high regard. She is still held in high regard by the patrons and staff who were called on her behalf before me, as counsel for the defendants emphasised in submissions and in cross-examination. Those close to Mrs Hardie may not have thought less of her as a result of what had been written about corrupt police and outlaw bikies meeting at her club for criminal activities, but in my view many others would have. The articles created what I think can fairly be described as a scandal in the regional community. What Mr Rule wrote put Mrs Hardie at the centre of that scandal.

The Herald Sun is a leading newspaper in Victoria. It is very widely circulated. The articles were published on the internet website of the Herald Sun as well. They are still there.

The defendants submitted that only a limited number of people would have identified Mrs Hardie as ‘Madam Black Mercedes’. In one sense, that is true. Only people who knew Mrs Hardie as Club Rawhide’s manager would have identified her. But Mrs Hardie is well known in Shepparton and she is well known as Club Rawhide’s manager. Many people in Shepparton would have identified her. Many who did not initially do so would have learnt who ‘Madam Black Mercedes’ was from others. As Mr Rule observed in a different context, everyone in Shepparton knows everyone. Mrs Hardie would also have been identified by some patrons of Club Rawhide who are not from Shepparton. She is at the club whenever it is open and is readily identifiable as the manager. Both Mrs Hardie and her business partner explained that they had set out to attract custom from people travelling to and through Shepparton, particularly those doing so on a regular basis.

As a group within Victoria or within Australia, those who would have identified Mrs Hardie may be said to be comparatively small in number. But that comparatively small group constitutes a large part, if not almost the entirety, of the community in which she lives and works, and has done all her life.

It is necessary to attempt to disentangle imputation (b) (which is defamatory) from imputations (c) and (d) (which I have concluded were not conveyed). Taken in the broad, the damage to Mrs Hardie’s business reputation has been very considerable, but a significant part of that damage has been caused by the fact that some people reached a conclusion about ‘Madam Black Mercedes’ based upon beliefs or prejudices they have in relation to strip clubs rather than upon what it was that Mr Rule actually wrote.

Imputation (a) also needs to be taken into account. It was true, and, while in my view an ordinary reasonable person would not have thought less of her because of it, some people would have, and the defendants are not liable for that.

The defendants also relied on the fight of 7/8 December 2012 that took place in the club and upon another incident which occurred in 2007. They submitted her business and personal reputation had also been affected by those matters.

The fight on 7/8 December 2012 would have had some effect on Mrs Hardie’s business reputation, and reminding people of it would also have had an effect. I do take that into account. The defendants are not liable for that. In the circumstances, I do not think the effect on her reputation would have been significant. The incident was already sometime in the past by the time of the relevant publications. It seems to have been a ‘one off’ incident. Mrs Hardie responded to the incident with a ban on those involved. The only connection between the fight and the defamatory imputation is the involvement of the Outlaws in both.

I do not consider that the 2007 incident has any significance. It is old and entirely unrelated to the matters the subject of the articles.

The defendants also made submissions as to damages relying upon the sexually explicit nature of the entertainment at Club Rawhide. Those submissions would have been relevant to the ‘brothel’ imputations (imputations (c) and(d)) which I have found were not conveyed. As to imputation (b), the fact that Mrs Hardie runs a legal business that many might find distasteful does not of course mean that her business and personal reputation can be besmirched with relative impunity. I did not interpret the defendants to be maintaining that their submissions as to the sexually explicit nature of the entertainment were relevant to damages concerning the imputations other than the ‘brothel’ imputations.

Mrs Hardie is also entitled to damages for her hurt feelings. Again, it is necessary to attempt to disentangle the hurt caused by imputation (b) from the hurt caused by some readers’ interpretation of the use of ‘Madam’.

Mrs Hardie does not seek any special damages.

Quantum

Section 34 of the Defamation Act requires that an award of damages bear ‘an appropriate and rational relationship’ with ‘the harm sustained by the plaintiff’. In arriving at an award with an appropriate and rational relationship to the harm sustained regard must be had to the purposes of damages in defamation law: ‘consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant’s personal and (if relevant) business reputation and vindication of the appellant’s reputation.’[74]
[74]Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, 60. See also Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118, 150.

I have considered the maximum damages that may be awarded for non-economic loss pursuant to s 35 of the Defamation Act 2005.[75]
[75]Section 35 of the Defamation Act 2005 provides for the capping of damages for non-economic loss. Section 35(1) of the Act sets the maximum amount of damages at $250,000 or ‘any other amount adjusted in accordance with this section from time to time (the maximum damages amount) that is applicable at the time damages are awarded.’ Section 35(3) of the Act provides that the Minister must in each succeeding year declare by order published in the Government Gazette the amount that is to apply in respect of s 35(1). These amounts are set out in the table below.

I have also considered the damages awarded in defamation proceedings in this Court in recent years.[76]
[76]Jeffrey v Giles [2015] VSCA 70; Gluyas v Canby [2015] VSC 11; Cripps v Vakras [2014] VSC 279; Lower Murray Urban & Rural Water Corporation v Di Masi [2014] VCSA 104; Belbin v Lower Murray Urban and Rural Water Corp [2012] VSC 535; Gluyas v Junior [2013] VSC 3; Trkulja v Google Inc LLC (No 5) [2012] VSC 533; Trkulja v Yahoo! Inc LLC [2012] VSC 88; Amanatidis v Darmos [2011] VSC 163; French v Herald and Weekly Times Pty Ltd (No 2) (2010) 27 VR 171; Ayan v Islamic Co-ordinating Council of Victoria Pty Ltd [2009] VSC 119; Smith v Dahlenburg [2008] VSC 557.

The defendants submitted the defamatory imputation was ‘mild’. I do not accept that. The imputation was that the club she manages and part-owns is the venue for serious criminal conduct between corrupt police and outlaw motorcycle gang members. The imputation was of a serious nature and was unjustified.

In all the circumstances I assess damages at $90,000.

- - -

Date of operation of cap Statutory cap

1 Jan 2006 $250,000

1 July 2006 $259,500

1 July 2007 $267,500

1 July 2008 $280,500

1 July 2009 $294,500

1 July 2010 $311,000

1 July 2011 $324,000

1 July 2012 $339,000

1 July 2013 $355,500

1 July 2014 $366,000

1 July 2015 $376,500

Date of operation of cap	Statutory cap
1 Jan 2006	$250,000
1 July 2006	$259,500
1 July 2007	$267,500
1 July 2008	$280,500
1 July 2009	$294,500
1 July 2010	$311,000
1 July 2011	$324,000
1 July 2012	$339,000
1 July 2013	$355,500
1 July 2014	$366,000
1 July 2015	$376,500

[2015] VSC 364

22 July 2015