Jeffrey v Giles

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2013 0120
DAVID JEFFREY and THOMAS CURNOW	Appellants
v
VIRGINIA GILES	Respondent
S APCI 2013 0113
VIRGINIA GILES	Applicant
v
DAVID JEFFREY and THOMAS CURNOW	Respondents

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JUDGES:	WARREN CJ, TATE JA and GINNANE AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 November 2014
DATE OF JUDGMENT:	24 April 2015
MEDIUM NEUTRAL CITATION:	[2015] VSCA 70	First Revision: 28 April 2015, [36] & [54]
JUDGMENT APPEALED FROM:	[2013] VSC 268 (Pagone J)

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DEFAMATION – Publication of defamatory material on website – Whether award of damages so low as to be inappropriate – Whether search for sole cause – Whether aggravated damages should have been awarded – Whether interest should have been ordered – Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 followed – Trkulja v Yahoo! Inc LLC [2012] VSC 88 and Lower Murray Urban & Rural Water Corporation v Di Masi [2014] VSCA 104 considered – Defamation Act 2005, s 34 – Supreme Court Act 1986, s 60 – Appeal allowed.

COSTS – Leave to appeal against costs order on basis applicant was not given opportunity to refer to an offer of compromise – Costs order interim only – Effect of a pending application pursuant to s 29 of the Civil Procedure Act 2010 – Leave to appeal refused.

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APPEARANCES:	Counsel	Solicitors
For the Appellants/Respondents Jeffrey and Curnow	Mr A G Southall QC with Ms F C Spencer	Ken Smith & Associates
For the Respondent/Applicant Giles	Mr J A Ribbands with Ms K Weston-Scheuber	Barristers Duty Scheme

WARREN CJ
TATE JA:

Introduction and summary

David Jeffrey (‘Jeffrey’) and Thomas Curnow (‘Curnow’) were defamed by statements made by Virginia Giles (‘Giles’) on a website Giles created (‘the website’). A judge of the Trial Division of this Court, in proceedings for defamation brought by Jeffrey and Curnow against Giles, made findings that statements on the website were defamatory and awarded damages.[1] Jeffrey and Curnow now appeal against the award of damages as in effect manifestly inadequate;[2] that is, as not constituting the appropriate vindication of their reputations or exhibiting the appropriate and rational relationship between the harm sustained and the damages awarded, as required by s 34 of the Defamation Act 2005. In turn, Giles seeks leave to appeal against the order the judge made that she pay the costs of Jeffrey and Curnow in the proceeding they brought against her, principally on the basis that she was not afforded an opportunity to refer the judge to an offer of compromise she had made. She does not appeal the finding of defamation.[3]
[1]David Jeffrey v Virginia Giles [2013] VSC 268 (‘Reasons’).
[2]Jeffrey and Curnow’s appeal is brought pursuant to an extension of time granted on 20 September 2013. Costs of the application were reserved. The application was commenced after Giles sought leave to appeal the costs order made.
[3]Orders were made on 20 September 2013 for Giles’ leave application to be heard at the same time as the appeal brought by Jeffrey and Curnow.

For the reasons that follow we would allow the appeal. We would dismiss the application by Giles for leave to appeal.

Giles’ creation of the website

Jeffrey and Curnow are directors of Casacir Pty Ltd (‘Casacir’), a company which operates a quarry in the south of Victoria adjoining a property on which Giles and her husband had planned to retire. Giles is a director and shareholder of Shapher Pty Ltd, which is the registered proprietor of the adjoining land (‘the Shapher land’). Giles objected to the council’s approval of the quarry in proceedings at the Victorian Civil and Administrative Tribunal (‘VCAT’). She was unsuccessful in both the initial review of the council’s decision[4] and in a later enforcement proceeding.[5] Giles was also unsuccessful in an appeal to the Supreme Court of Victoria against an order made by VCAT that she pay the costs of the enforcement proceeding.[6]
[4]Giles v Baw Baw SC [2009] VCAT 61 (19 January 2009). Giles was one of a number of objectors in this proceeding.
[5]Country Endeavours Pty Ltd v Baw Baw SC [2011] VCAT 147 (7 February 2011).
[6]Country Endeavours Pty Ltd v Casacir Pty Ltd [2013] VSC 22 (8 February 2013).

In June 2011, after the VCAT hearings, Giles created the website which related to the quarry dispute, known as [1].

The substance of the defamatory statements on the website, as they related to Jeffrey, was that he had provided inaccurate, fictional and/or deceptive information at community meetings about the quarry,[8] and that he had deliberately given false testimony under oath at the VCAT hearing,[9] including testimony relating to the placement of plantings and marker posts on the Casacir quarry land;[10] the fitting of acoustic covers on drills;[11] and the security of the quarry site.[12] Defamatory statements were also made about Curnow, to the effect that he had given false evidence before VCAT.[13] The judge accepted that all of the statements conveyed, and were intended in their ordinary and natural meaning to convey, that Jeffrey and Curnow had deliberately given false evidence under oath before VCAT, and that Jeffrey would apply the orders of the Tribunal only as it pleased him to interpret them.[14]
[8]Ibid [8].
[9]Ibid [5]–[9].
[10]Ibid [6], [9].
[11]Ibid [7].
[12]Ibid [10].
[13]Ibid [12].
[14]Ibid. The defamatory statements are set out in greater detail at [22] below.

In concluding that the statements published on the website were defamatory,[15] the judge, citing Radio 2UE Sydney Pty Ltd v Chesterton,[16] found that the statements were likely to lead an ordinary reasonable person to think less of the people about whom the statements were made.
[15]Ibid [14].
[16](2009) 238 CLR 460, 465–6 [3]–[7].

In considering what damages should be awarded, the judge found that both Jeffrey and Curnow, as distinct from Casacir as a corporate entity, were entitled to consolation, reparation and vindication for the injury caused to their good reputations by Giles’ defamatory conduct.[17] This injury encompassed various detrimental effects upon Jeffrey’s health, the judge observing that ‘the evidence concerning the increase in Mr Jeffrey’s weight and deteriorating health generally may properly be seen as descriptive of injury to his feelings’.[18]
[17]Reasons, [17].
[18]Ibid [21].

The judge remarked, however, that a great deal of the evidence did not distinguish between the impact upon Jeffrey and Curnow of the defamatory words, and the impact caused by other conduct of Giles’, including other non-defamatory statements on the website.[19] This led him to conclude that the defamatory words were only one of the causes of the injury to Jeffrey and Curnow.[20] He acknowledged that there was evidence of the ‘grapevine effect’,[21] — evidence that the defamatory allegations could have spread in a way difficult to control or predict — the clearest example of which was a solicitor’s letter of demand from a dissatisfied client which made reference to complaints about Curnow’s work as published on the website.[22] However, he noted that the letter did not explicitly refer to any of the defamatory statements. He also observed that ‘[i]t is important to bear in mind that the damages to be awarded to an individual should be for the harm suffered by the individual and not that of a corporation which may not be able to sue in defamation and was not otherwise a party’.[23]
[19]Ibid [18], [21].
[20]Ibid [24]–[25].
[21]On the ‘grapevine effect’ see Gummow J’s discussion in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388, 416 [88]-[89], and Kaye J’s remarks in Belbin v Lower Murray Urban and Rural Water Corporation [2012] VSC 535, 77–79 [213]–[218] (‘Belbin’).
[22]Reasons, [26].
[23]Ibid.

The judge concluded, on the evidence before him, that those who came to hear and know of the defamatory statements on the website seemed largely to have regarded them as untrue and of little impact,[24] with at least one witness suggesting that the defamatory statements reflected more adversely upon the person making them than upon Curnow and Jeffrey. He noted that although, as Jeffrey and Curnow submitted, the website had been ‘on the internet for a lengthy period of time — over a year in total’, the length of time that the defamatory statements had been on the website, visible to visitors, was between five and seven months.[25] He recognised that Giles ought to have, but did not, identify and remove the offending words upon receipt of a letter from Jeffrey and Curnow’s solicitors asking her to do so.[26]
[24]Ibid [28].
[25]Ibid [31].
[26]Ibid [33].

Jeffrey and Curnow’s claim for damages included a claim for aggravated damages. The basis for the claim was that the defamatory statements were made in circumstances demonstrating a lack of good faith; the existence of a collateral or anterior purpose; and unjustified and unreasonable conduct on the part of Giles.[27] The claim rested upon the allegation that Giles’ lack of good faith was demonstrated by the volume of defamatory material published on the website; the frequent and continued publication of that material; and the general nature and tenor of the statements on the website. It also rested upon the allegation that Giles had been motivated, in her dealings with the quarry operation, by a desire to cause it injury in order to pressure Casacir to acquire the Shapher land at an inflated price.[28]
[27]Ibid [35].
[28]Ibid [37].

The judge rejected Jeffrey and Curnow’s contention that Giles had deliberately built the house on her block as close as possible to the boundary fence adjoining the quarry in order to frustrate its operations, finding instead that, in accordance with Giles’ evidence, the location of the house was the only feasible one given the features of the block of land in question.[29] The judge’s finding that Giles was not motivated by a collateral purpose is unchallenged on this appeal.
[29]Ibid [43].

The judge considered that the defamatory statements on the website may have demonstrated an obsession and a desire to be difficult but did not reveal that Giles acted with a lack of good faith and did not justify an award of aggravated damages:

The existence of the website, and the defamatory words published in it, may reflect badly upon the defendant but not in a way that justifies the award of aggravated damages. It may show obsession and, perhaps, an unreasonable determination to make things difficult for those operating a neighbouring quarry but I do not think the website, or specifically the defamatory words published on it, show a lack of good faith, the existence of a collateral or anterior purpose of extracting an inflated price for the Shapher property, or constitute unjustified and unreasonable conduct sufficient to entitle the awarding of aggravated damages in defamation.[30]

[30]Ibid [55].

He also rejected the argument that Giles’ conduct at trial warranted aggravated damages because of her failure to proffer an apology until the conclusion of her submissions at trial. He considered that the fact that an apology was offered at all was a matter in her favour and observed that her conduct at trial was ‘otherwise generally unimpeachable’.[31]
[31]Ibid [57].

He accepted Giles’ evidence of her reason for creating the website, namely, to ensure that the operation of the quarry complied with regulatory requirements, stating:

[Giles’s] opposition was to the quarry and its operation. The plaintiffs expressed some willingness to purchase the Shapher land and Mrs Giles entertained that possibility albeit upon terms which were not agreed to. The bulk of the material from the Quarry Fight website tendered in evidence is consistent with Mrs Giles’ oral testimony about her purpose in operating the website and the words expressed in it. In parts she used clearly inappropriate language but she was doing so in her expression of dissatisfaction and not with the intention of putting collateral pressure upon Casacir to acquire the Shapher land at an inflated price. Her purpose was, rather, to seek to ensure that the operation of the quarry complied with what she understood to be their obligations however irritating to regulators and to the quarry operators her chosen method may have been.[32]

[32]Ibid [56].

Jeffrey and Curnow proffered a range for the appropriate quantum of damages as being between $60,000 and $80,000 for Jeffrey and between $40,000 to $50,000 for Curnow. The judge rejected the range proffered as inappropriate although he considered the defamation to be serious:

The plaintiffs seek damages (including what their submissions said was a modest award for aggravated damages) in the range of $60,000 to $80,000 for Mr Jeffrey and $40,000 to $50,000 for Mr Curnow. I am not satisfied that damages in those amounts are appropriate. The defamatory words are serious and ought never to have been made. They ought to have been removed immediately from the website when complaint was made of their existence. There was no sufficient justification in Mrs Giles waiting to obtain legal advice after receiving the writ and, in any event, she ought not to have waited for the writ. She was specifically on notice by 23 August 2011 that her website contained words which she should have removed. The fact that little, if any, actual damage was done to the reputation of the plaintiffs, or that little injury was specifically referrable to the defamatory words does not lessen the fact of the defamation and the plaintiffs’ entitlement to damages.[33]

[33]Ibid [58].

Ultimately, the judge awarded damages of $12,000 to Jeffrey and damages of $8,000 to Curnow:

1.The Defendant [Giles] is to pay damages in the amount of $12,000 to Mr David Jeffrey and damages in the amount of $8,000 to Mr Thomas Curnow.

He also ordered Giles to pay the costs of Jeffrey and Curnow but in doing so linked the order for costs to an application Giles had made pursuant to s 29 of the Civil Procedure Act2010 (‘the s 29 application’). Section 29 of the Civil ProcedureAct deals with orders a court may make when it is satisfied that a breach of the parties’ overarching obligations under the Civil Procedure Act has occurred. In particular, it empowers a court to make any orders for costs, including an order that costs be paid arising from the contravention of the overarching obligations. Paragraph 2 of his Honour’s orders is the order in relation to which Giles seeks leave to appeal. Its terms have given rise to the query whether it was intended as an interim or final order:

2.The Defendant is to pay the costs of the Plaintiffs other than those costs referable only to the issue of aggravated damages unless there be some further or other order made in connection with or pursuant to the summons and application filed 17 May 2013 under s 29 of the Civil Procedure Act 2010 (Vic).

The appeal

Jeffrey and Curnow appeal on the following grounds, many of which are inter-related:

1.In his award of general damages to each of the appellants, the trial judge failed to give sufficient weight to the evidence about the degree of personal distress, hurt and humiliation and injury to reputation caused to and/or suffered by the appellants as a result of the defamatory publications including that:
a)the appellants were directors of Casacir Pty Ltd which owned and operated a quarry business which had some 40 employees;
b)Jeffrey was the third generation of a family construction, earthmoving and road building business which operated in the Latrobe Valley;
c)Mr Jeffrey’s family had a good name in the region as a family that was honest and reliable;
d)Mr Jeffrey found it ‘biting’ that the website said, in effect, ‘he was a crook’;

e) Mr Jeffrey was ashamed of what had been written about him;
f)the effect of the defamatory words on Mr Jeffrey was like having a criminal record;
g)Mr Jeffrey was a man of strong religious beliefs who placed great importance upon the giving of an oath on the Bible;
h)as well as being a director of Casacir, Mr Curnow also conducted a road building and stabilisation business through a group of companies which had some 200 employees across the Gippsland region;
i)the remarks offended Mr Curnow and made him feel fairly disgusted and really angry;
j)Mr Curnow was very concerned about the impact the defamatory words might have upon him and his reputation within the industry.

2.In his award of general damages to each of the appellants, the trial judge failed to ensure that an appropriate and rational relationship was achieved between the harm sustained by each of the appellants, and the amount of damages awarded to them, contrary to s 34 of the Defamation Act 2005 (Vic).
3.In his award of general damages to each of the appellants, the trial judge failed to ensure the awards signalled to the public the vindication of the appellants having regard to:
a) the gravity of the defamatory publications;
b) the falsity of the allegations;
c)that the defamatory words were on a publicly available website for approximately five to seven months;
d)the dissemination of the defamatory words within the quarry and road stabilisation industries and more broadly;
e)the good reputation and social standing of Mr Jeffrey and Mr Curnow as businessmen and employers in the community; and
f)the lack of any alternative remedies to Mr Jeffrey and Mr Curnow for the purposes of vindication.

4. In finding that:
a)with respect to Mr Jeffrey, it was impossible to say with any precision what injury was due or referable to the defamation and what was due or referable to the website as a whole or to other conduct of Mrs Giles;
b)‘[t]he need to ensure that there is an appropriate and rational relationship between the harm to Mr Jeffrey and the amount of damages to be awarded requires some consideration of the extent to which any injury was caused by the defamation’;
c)with respect to Mr Curnow, it was not possible to determine with precision what injury was caused by the defamatory words as distinct from any like impact caused by the website as a whole or the other annoying conduct of Mrs Giles and the other objectors; and that
d)‘little injury was specifically referable to the defamatory words’, and thereby (impliedly) discounting the appellants’ entitlement to damages, the trial judge erred in posing the wrong questions for determination.

5.The trial judge erred in law in failing to award a sum by way of aggravated damages to each of the appellants when:
a)the defamatory remarks were part of an overall campaign brought by the respondent that was calculated to ‘make things as difficult as possible’ for the appellants;
b)the defamatory remarks were entirely false and had no foundation;
c)the defamatory remarks were published on a publicly available internet site for between five and seven months;
d)the respondent continued to add defamatory remarks in September and October 2011 after the appellants’ solicitors had written to her complaining about defamatory aspects of the website;
e)the respondent continued to attempt to justify the defamatory remarks throughout the hearing;

f)the respondent attempted during the trial to construe words plainly intended to allege that the appellant had deliberately or intentionally lied under oath as meaning something otherwise and failed to apologise until the conclusion of her closing submissions.

6.The trial judge erred in failing to give damages in the nature of interest to the appellants from the commencement of the proceeding to the date of the judgment over and above the damages awarded in accordance with s 60 of the Supreme Court Act 1986 (Vic).

Jeffrey and Curnow invite this Court to reassess the damages and interest to be awarded to them or, in the alternative, to remit for redetermination the issue of the quantum of damages, including aggravated damages and interest.

At the hearing of the appeal, the issues were clarified as three-fold: (1) Were the awards of general damages so low as to be inappropriate? (2) Ought the judge have awarded aggravated damages? and (3) Should the judge have ordered interest? The first issue is raised by grounds 1–4 of the grounds of appeal. The second issue is raised by ground 5 and the third issue is raised by ground 6. We will deal with each issue in turn before considering the application made by Giles for leave to appeal.

(1) Were the awards of damages so low as to be inappropriate?

Jeffrey and Curnow submit that the general damages awarded by the trial judge were so low as to fall outside the appropriate range and were contrary to s 34 of the Defamation Act, which provides as follows:

34 Damages to bear rational relationship to harm
In determining the amount of damages to be awarded in any defamation proceedings, the court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded.[34]

Pursuant to s 35(1), the maximum amount of damages that could have been awarded to each of the two appellants for non-economic loss was $339,000.[35]

[34]The ‘harm’ referred to includes all the forms of harm for which the three purposes of defamation law are designed to compensate, at common law: see [24] below. See Cerutti v Crestside Pty Ltd [2014] QCA 33, [27]; Roberts v Prendergast [2013] QCA 47, [23].

[35]See Victorian Government Gazette G25 21 June 2012, 1293.

Jeffrey and Curnow rely on the finding that there was no doubt about the dissemination of the defamatory words within the quarry and road stabilisation industries and more broadly.[36] They submit that the defamatory words as found by the judge represented serious imputations against their character and reputations. Amongst the defamatory statements on the website were the following:
[36]Reasons, [27].

1)In relation to the enforcement hearing, I [Giles] was appalled that David [Jeffrey] had sworn to facts that were obviously untrue and provably so, and that he knew were untrue.
I was even more shocked to see that he took the oath, with his hand on the bible — and then provided information that was not true. I can only assume from this that swearing on the bible meant very little to him.[37]
[37]Ibid [5].
2)David then had to agree that there were no plants planted on the northern boundary or around the dam — proving he committed perjury at the tribunal.[38]
[38]Ibid [6] (original emphasis).
3)Further, in David Jeffrey’s affidavit dated 6 September, he himself said that ‘Up until early January 2010 [the drill] did not have the “acoustic cover” fitted. There was no cover available in Australia from the manufacturer’ (in spite of stating at the 2008 tribunal hearing that there was one in Australia and that they had made arrangements to use it!).[39]
[39]Ibid [7] (original emphasis).
4)I contend, however, that it is Casacir, David [Jeffrey] and Tom [Curnow] that seem to have interpreted things how they want to interpret them … Some examples of such ‘interpretations’ from experience appear to be that:
·they don’t actually have to have the required 2 community meetings a year if they don’t want to, and that the information provided at those meetings does not have to actually be accurate, factual and truthful if they would rather provide inaccurate, fictional and/or deceptive information that makes it sound as if they had actually done what they were supposed to do;
·they can provide provably inaccurate sworn information to the tribunal, (which in effect deceives the tribunal) if they want to.[40]

5)Isn’t it interesting that someone can so clearly swear to things that are not so and apparently feel justified and no compunction in doing so …
Went out to the site again today and still nothing seems to have changed: still no plantings in some of the locations David swore there were plantings … many posts still cannot be seen from the one next to it (in spite of David having sworn that they could be seen from the next one) … but Casacir seems to have no qualms about the continued failure to comply with sworn testimony and conditions and undertakings![41]
6)Casacir (and therefore David Jeffrey & Tom Curnow) did not comply — again — this time with the Order … How pathetic, and again, interpreting things how they wanted.[42]
7)… the site was unsecured — as is normal practice, in spite of what David Jeffrey swore in his affidavits and under oath. Not only were a number of gates unlocked, but the one to the direct north of the quarry entrance was standing wide open![43]

[40]Ibid [8] (original emphasis).

[41]Ibid [9] (original emphasis).

[42]Ibid [11] (original emphasis).

[43]Ibid [10].

Jeffrey and Curnow describe these statements as ‘emphatic’, ‘grave’ ‘damaging’, ‘repetitive’, and ‘continuous’. As is apparent from their grounds of appeal, they submit that they are proud of their individual reputations, and very concerned about the impact that the defamatory words might have within the quarry and road stabilisation industries of which they, and their families, are a part. They submit that the damages awarded were so low as not to reflect the high value the law places on reputation, nor to reflect the fact that their work and life depended upon their honesty and integrity.

They submit that damages awarded for defamation serve three purposes: (1) consolation for the personal hurt and distress caused by the publications; (2) reparation for the harm done to the plaintiff’s personal and (if relevant) business reputation; and (3) vindication of the plaintiff’s reputation.[44] They emphasise that vindication is the core or the crux of an award of general damages.[45]
[44]Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, 60–1, 69–70 (‘Carson’).
[45]Lower Murray Urban & Rural Water Corporation v Di Masi [2014] VSCA 104 (‘Lower Murray’), [107].

The amount allowed for consolation and reparation should reflect the subjective extent of the defamation on the plaintiff.[46] As Lord Diplock remarked in Broome v Cassell & Co Ltd:[47]

The harm caused to the plaintiff by the publication of a libel on him often lies more in his own feelings, what he thinks other people are thinking of him, than in any actual change made manifest in their attitude towards him.[48]

[46]Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327, 350 [69] (‘Rogers’).

[47][1972] AC 1027.

[48]Ibid 1125.

The mode and extent of publication, a failure to retract the publication or apologise, and the persistence in allegations of justification or truth may give further currency to defamatory publications by extending their capacity to harm a plaintiff’s reputation, apart from any additional injury to feelings.[49] These latter matters were argued relevantly to justify an increase in compensatory damages in addition to being relevant to an award of aggravated damages.[50]
[49]Herald and Weekly Times v McGregor (1928) 41 CLR 254, 262–3 (‘McGregor’).
[50]In Clark v Ainsworth (1996) 40 NSWLR 463, 473, Abadee AJA recognised that the authorities did not preclude conduct representing a failure to apologise being included as a component in general compensatory damages ‘merely because it cannot be taken into consideration on the issue of aggravated damages unless the absence of apology is found to be improper, unjustifiable or lacking in good faith’. See [50]–[51] below.

Furthermore, in considering the appropriateness of a sum awarded in vindication of a plaintiff’s reputation, it is necessary to have in mind that the harm done by a defamatory statement does not end upon its publication. An award of damages must be sufficiently large to vindicate a plaintiff once and for all, into the future. As the judge recognised,[51] the award must be sufficient to ensure that, the defamation having spread along the grapevine, and being apt to emerge ‘from its lurking place at some future date’, it signals to the public the vindication of the plaintiff by demonstrating the baselessness of the allegations.[52] The gravity of the publications, the social standing of the parties and the availability (or lack of availability) of alternative remedies are all relevant to an assessment of the quantum of damages necessary to vindicate a plaintiff.[53]
[51]See [8] above.
[52]BroomevCassell & Co Ltd [1972] AC 1027, 1071 (Lord Hailsham LC). See also Rogers (2003) 216 CLR 327, 368 [134] where Callinan J spoke about the potential for a defamatory statement to constitute a public record for the future or a ‘rough draft of the truth for historical purposes’.
[53]Carson (1993) 178 CLR 44, 60–1, 70.

Jeffrey and Curnow submit that, while the judge appeared to accept that these principles were applicable,[54] the paucity of the damages he awarded indicate that an error had occurred. They emphasise, in reliance on Carson,[55] that an appellate court can intervene to prevent a miscarriage of justice if it is convinced that the damages awarded are so high or so low that they are outside the range of what could reasonably be regarded as appropriate to the circumstances of the case. As appellate review of an award of damages is governed by the principles in House v the King,[56] it is not necessary for a specific error to be identified. If it appears that the result is unreasonable or plainly unjust, the appellate court may infer, in accordance with the last category of review recognised in House v the King, that there has been a failure to exercise properly the discretion in fixing the amount to be awarded. In House v The King Dixon, Evatt and McTiernan JJ said:

It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.[57]

[54]See, in particular, Reasons, [15]–[17].

[55](1993) 178 CLR 44, 61–2.

[56](1936) 55 CLR 499, 504–5. See Rogers (2003) 216 CLR 327, 348 [62]–[64] (Hayne J).

[57](1936) 55 CLR 499, 505.

Interference with an award of damages is not warranted if the appellate court is only of the view that it would have fixed damages in some other amount.

In support of the proposition that the award was outside the range of appropriate damages and failed to fulfil the purpose of vindication, Jeffrey and Curnow submit that although the judge found that little or no damage to Jeffrey and Curnow’s reputations had occurred,[58] their beliefs that their business reputations may have been harmed by the defamatory words were relevant to the assessment of damages for their subjective distress and hurt, regardless of whether their reputations had in fact been so harmed.[59] Moreover, the gravity of the defamatory statements was significant, as was their broad dissemination, and there was a lack of alternative remedies by which to achieve vindication.
[58]Reasons, [28]–[30], [58].
[59]Relying on Lord Diplock’s observations in Broome v Cassel & Co Ltd [1972] AC 1027, 1125 (see [25] above) and Ali v Nationwide News Pty Ltd [2008] NSWCA 183, [97]–[123] (Tobias and McColl JJA).

There was evidence that the defamatory statements caused Jeffrey and Curnow significant hurt, distress and upset. Jeffrey gave evidence that he was distressed, embarrassed and humiliated by the defamatory statements. He was a man of strong religious belief who placed great importance upon the giving of an oath on the Bible as he had done at VCAT, and his evidence was that he felt that the allegation that he had perjured himself was someone questioning his belief and faith. He was ashamed of what had been written about him and offended by what was said. The defamatory statements had a profound impact upon him; he considered that being accused of lying under oath, lying against his family values, his personal values and his family’s beliefs, was like being accused of murder or a heinous crime.

Curnow gave evidence that the defamatory statements offended him greatly and made him feel disgusted and really angry. He was particularly offended by the allegation that, under oath, he had provided provably incorrect information that deceived VCAT, because he had not given evidence at VCAT at all.[60] He was concerned that there would be damage to his reputation, especially given that his word was valued in the quarry and road stabilisation industries; it was the slur contained in the defamatory statements that upset him greatly. The damages awarded were argued to be insufficient to compensate for this distress.
[60]Reasons, [25].

Further, Jeffrey and Curnow submit that the judge failed to make any, or any adequate, allowance for the conduct of Giles that was also relied upon in support of a claim for aggravated damages.[61] This included the fact that the defamatory material remained on the website for many months after Giles was first notified of Jeffrey and Curnow’s legal concerns and, moreover, was added to during that period.[62] It is argued that the fact that the defamatory statements remained on the website for that period of time, available for access by the public, could only have increased its capacity to cause injury to Jeffrey and Curnow, as did Giles’ persistence in her attempts to justify the defamatory words and her failure to apologise before close to the end of the trial.
[61]See Ground 5.
[62]See McGregor (1928) 41 CLR 254, 262–3. See [26] above.

Moreover, although there was no evidence that witnesses who had visited the website had actually seen the defamatory words, it was argued that this was cured by the proposition in Lower Murray Urban & Rural Water Corporation v Di Masi[63] that even in the absence of actual harm having been caused to the reputation of a plaintiff, what is of central importance is that each award of damages has to be sufficient for the purposes of vindication.
[63][2014] VSCA 104, [107].

Counsel for Giles concedes that the awards of damages made to Curnow and Jeffrey were at the low end of the scale, but he submits that they represent a rational and proportionate outcome. More generally, Giles responds to the submissions of Jeffrey and Curnow by arguing that, as the findings of the imputations and characterisation of the defamatory statements upon which Jeffrey and Curnow rely are set out in the judge’s reasons,[64] it can be assumed that they were taken into account as part of the global assessment of damages. To the extent that the judge’s assessment does not readily tally with the evidence of Jeffrey and Curnow, Giles submits that it can readily be inferred that the judge was not persuaded that the subjective injury was necessarily as Jeffrey and Curnow had portrayed it in their evidence.
[64]See, in particular, Reasons, [18]–[25].

In our view, the awards made by the judge were so low as to be manifestly inadequate. In Lower Murray, a figure of $70,000, awarded at trial for defamatory statements contained in a letter and published on a website was held by this Court to be ‘well within range, if not relatively modest’.[65] The letter was written by the then Minister for Water for the State of Victoria, in which an imputation was made of financial impropriety by certain directors of the First Mildura Irrigation Trust. In other cases, statements made on the internet by various internet search engines, carrying imputations of the plaintiff’s association with serious criminal offenders, have attracted awards of $225,000[66] and $200,000.[67] The view has been expressed that the ‘choice of the Internet as the medium for the publication of defamatory material may be an important factor in determining the extent of compensatory damages’[68] not only because of ‘its interactive nature, its potential for being taken at face value, and its absolute and immediate worldwide ubiquity and accessibility’,[69] but also because of the possibility of retrieval by anyone who is computer literate:

In the past, a defamatory article in a newspaper might have been quickly forgotten and accessible only to an intrepid researcher prepared to spend hours in a dusty archive or pouring over microfiche film. Today, the same article stored in an online archive may be able to be retrieved in a matter of seconds by anyone with a computer or other Internet-enabled device, an Internet connection, and a passing familiarity with the formulation of search engine inquiries. Where defamatory material remains accessible in the wilds of the Internet as the ordinary consequence of its original publication, and where there is no hope of successfully corralling the matter by a permanent injunction at the end of a defamation trial, the measure of damages ought thus to be increased to reflect the extent of the injury caused by the original publication and the risk that it will cause future damage to the claimant.[70]

[65]Lower Murray [2014] VSCA 104, [106].

[66]Trkulja v Yahoo! Inc LLC [2012] VSC 88, [60] (Kaye J).

[67]Trkulja v Google (No 5) [2012] VSC 533, [55]–[56] (Beach J). This is discussed at [43]–[45] below.

[68]Matthew Collins, The Law of Defamation and the Internet (Oxford University Press) (3^rd ed, 2010), 385 [20.10]

[69]Barrick Gold Corp v Lopehandia (2004) 71 OR (3d) 416, [44], as quoted by Collins, op cit, 385 [20.10] where the Ontario Court of Appeal explained the basis for distinguishing Internet defamation from other more standard forms of publication.

[70]Collins, op cit, 385 [20.11]. See also Matthew Collins, Collins on Defamation (Oxford University Press, 2014), 420 [21.20], [21.21].

Comparisons between awards of damages in different cases, while of assistance, can never provide a complete answer to the question of the adequacy of an award, given that each case is likely to raise distinct issues. Nevertheless, we consider that the awards made by the judge border on the derisory, especially given the serious nature of the imputations, the mode of publication, and the persistence[71] with which Giles engaged in the defamation. In particular, the imputation that Jeffrey was a person who was prepared to engage in an act of deception on oath before a formal body such as a tribunal is a grave allegation which must have been felt severely by someone of strong religious belief, and the nature of the allegation would clearly undermine his reputation for honesty and integrity. We do not consider that a sum of $12,000 was sufficient to vindicate his reputation or to compensate for his distress. So too, we do not consider that the award of $8,000 demonstrated the unfounded nature of the imputations against Curnow or provided appropriate redress for the anxiety caused to Curnow about his business reputation, and thus the viability of his business, arising from the groundless slur Giles made about him in the defamatory statements. We consider that the awards were manifestly unjust and the discretion miscarried within the meaning of House v The King.
[71]See especially the matters referred to at [49]–[50] below.

While the conclusion we have reached renders it unnecessary to identify any specific error in the judge’s reasons, in our view, an error in the judge’s reasons can be found. On the one hand, the judge appears to take into account the need to vindicate the reputations of Jeffrey and Curnow and he mentions the harm each of them has suffered. He accepts that the defamatory statements were serious and causally contributed to that harm. With respect to Jeffrey, the judge says: ‘[t]he conclusion to be drawn from the evidence as a whole is that the defamatory words were one of the causes to the injury to Mr Jeffrey’.[72] On the other hand, he emphasises repeatedly that the harm Jeffrey and Curnow suffered was caused not only by the defamatory statements on the website but also by other conduct of Giles and by other objectors to the quarry. He implicitly proceeds on the basis that the damages to be awarded are to compensate harm only where the harm has been solely caused by the defamatory statements. In our view, he should have considered what harm was caused by the defamation, and determined what damages should be awarded so as to ensure there was an appropriate and rational relationship between those damages and the harm the defamation had caused, regardless of whether that harm was also causally contributed to by other matters. Instead, he excludes from the need for compensation, reparation or vindication, any harm caused by the defamation that also resulted from some other cause. He therefore treats the inability to disentangle the causal contributions to the harm made by the defamatory statements from other difficult or irritating conduct by Giles, or other objectors, as a hurdle that is impossible to overcome. The significance the judge attaches to the ‘disentangling’, and his concern that precise disentanglement is ‘impossible’,[73] arises because he is searching for a sole cause. In other words, in his assessment of the appropriate award of damages to be made to compensate the harm Jeffrey and Curnow sustained he implicitly excludes all that harm which arises from multiple causes. In our view, the judge erred by imposing a requirement that the harm for which an award of general damages was to be made was that for which the defamatory statements were the sole cause.[74]
[72] Reasons, [24]. With respect to Curnow he said (at [25]): ‘As with Mr Jeffrey however, it is not possible to determine with precision what injury was caused by the defamatory words as distinct from any like impact caused by the website as a whole or the other annoying conduct of Mrs Giles and the other objectors’. See [41] below.
[73]Reasons, [21].
[74]This was the basis of ground 4 of the grounds of appeal, which we would uphold, but these considerations also rested on grounds 1–3, which we would also uphold.

The error is apparent in the following passages of the judge’s reasons:

In this case, the plaintiffs led evidence about such matters as their individual personal distress and hurt, and potential injury to their reputation both personal and in business. Mr Jeffrey gave evidence of his family’s longstanding good name in the region as a ‘family [that] were good to do business with, [and were] honest, [and] reliable’. Mr Curnow gave evidence of his businesses through various companies building up a reputation over many years of integrity upon which people could rely. A great deal of the evidence, however, did not distinguish between the impact upon the plaintiffs of the defamatory words and the impact upon the plaintiffs of other conduct by Mrs Giles. It is important to bear in mind the context in which the defamatory words were published in an endeavour to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiffs and the amount of damages awarded. The context in which the defamatory words were published by Mrs Giles were of an ongoing series of disputes about the operation of the Casacir quarry at Neerim North. Mrs Giles’ conduct in opposing the quarry was annoying to Mr Jeffrey and Mr Curnow, as were the formal proceedings in VCAT. In that context, it is not easy to disentangle the impact upon Mr Jeffrey and Mr Curnow of the defamatory publications from the impact upon them of the other conduct and the (non-defamatory) publications having a similar effect upon them. Nor is it easy to disentangle the damage done to the individuals from that done to Casacir.
...
I have no doubt that the defamatory publications injured the feelings of Mr Jeffrey but it is impossible to say with any precision what injury was due to or referable to the defamation and what was due to or referable to the website as a whole or to the other conduct of Mrs Giles. The need to ensure that there is an appropriate and rational relationship between the harm to Mr Jeffrey and the amount of damages to be awarded requires some consideration of the extent to which any injury was caused by the defamation. Mr Jeffrey’s own testimony about the injury he felt is admissible to establish the natural grief, distress and embarrassment which he suffered concerning the nature of the imputation which he believed the publications would convey to others. … Both Mr Jeffrey, and the others who were called to give evidence about the matter, gave evidence about the physical impact upon him of learning about the defamatory publications. Mr Jeffrey said that he had put on a lot of weight in the last couple of years, that he was taking blood pressure tablets and that he was not sleeping well. … In relation to his weight, it is clear that Mr Jeffrey was what was described as ‘a heavy man’ long before any defamatory publication. The increase to his weight occurred during a period of irritation by tribunal proceedings, by other conduct against the Quarry by Mrs Giles and other objectors and by the publications on the website as a whole apart from the defamatory statements. When cross examined about the matter by Mrs Giles, Mr Jeffrey attributed his condition to the existence of the website rather than specifically to the defamatory words when saying that he ‘might have been happier before the website but [he is] certainly distressed since’.[75]

[75]Reasons, [18], [21] (emphasis added).

In these passages, the judge moves from the uncontested proposition that there is a need to consider what harm was caused by the defamation to the erroneous proposition that damages may only be awarded in respect of harm in relation to which there is no other cause.

The same error is apparent in the judge’s reasons when he focuses upon the harm done to Mr Curnow:

The evidence of Mr Curnow’s injury to his feelings was, in contrast, different to that of Mr Jeffrey. Mr Curnow described his own reactions to the defamatory words as feeling ‘fairly disgusted’ and ‘really angry’, but conceded that his reaction was unlike that of Mr Jeffrey. Much of the defamatory words referable to Mr Curnow were factually incorrect. … He was … angry and offended by what had been said about him, and was understandably concerned about the impact the defamatory words might have within the industry. It was a major concern for him that others in the industry, particularly employees and customers, might read the defamatory words on the website. The Baw Baw Shire Council was one of his major customers. At least one of his employees had called him about concerns expressed by VicRoads and by Baw Baw Shire Council workers. At least one customer (dissatisfied with workmanship for other reasons), referred to what appeared on the website (albeit not to the defamatory statements) in support of a complaint. As with Mr Jeffrey however, it is not possible to determine with precision what injury was caused by the defamatory words as distinct from any like impact caused by the website as a whole or the other annoying conduct of Mrs Giles and the other objectors.[76]

[76]Ibid [25] (emphasis added).

Jeffrey and Curnow submit, and we agree, that the judge erroneously applied a requirement that it was necessary for the defamatory statements to be the sole cause of any harm for which compensation would be awarded. Where causation is in issue, it is only necessary that the tortious conduct be a cause of the plaintiff’s injury; it is not necessary that it be the sole cause.[77] Once that is established, the plaintiffs are entitled to general damages that have an appropriate and rational relationship to the harm they have sustained. Having found that the defamatory statements causally contributed to the harm suffered by Jeffrey and Curnow, the judge erred by impliedly discounting their entitlement to damages because he found there were other concurrent causes of their harm. This accounts for, and explains, the inappropriately low level of damages he awarded. In effect the judge reduced the damages to which Jeffrey and Curnow were entitled by eliminating from his assessment any harm for which there was a concurrent cause. This was the wrong test and he erred in applying it. In doing so, he fell into specific error under the rubric of House v the King.
[77]March v E & MH Stramare Pty Ltd (1991) 171 CLR 506, 509, 521-3, 530, Rigby v Mirror Newspapers Ltd [1964] NSWR 868.

There may well be occasions where a plaintiff can establish that only certain words or images convey a defamatory imputation, while others do not. Such were the circumstances in Trkulja v Google (No 5).[78] There the plaintiff complained of two types of allegedly defamatory publications, an ‘images matter’ and a ‘web matter’. The images matter consisted of images of the plaintiff appearing on the internet beside Tony Mokbel and various other people either known to have committed serious criminal offences or against whom serious criminal allegations had been made. The web matter consisted, among other things, of an article in which the plaintiff was alleged to have known the identity of a hit man who had tried to kill him. The plaintiff pleaded with respect to both matters that they conveyed the imputation that he was so involved with crime in Melbourne that his rivals had hired a hit man to murder him. He was successful against Google Inc on the images matter only and this was limited to a particular time period.[79] In summarising the jury verdict, Beach J said:

The net effect of the jury’s answers to the questions … is that the plaintiff established an entitlement to damages against Google Inc in respect of the images matter for publications between 11 October 2009 and 31 December 2009 (both dates inclusive). In respect of the images matter, the plaintiff established one defamatory imputation (both as a false innuendo and as a true innuendo), namely, ‘the plaintiff was so involved with crime in Melbourne that his rivals had hired a hit man to murder him’. … The plaintiff’s case against Google Inc, in respect of the web matter, failed because Google Inc established the defence of innocent dissemination for the whole of the period of publication the subject of the proceeding (2009).[80]

[78][2012] VSC 533 (‘Trkulja No 5’).

[79]The plaintiff sued both Google Inc and Google Australia. He failed against Google Australia, in respect of the images matter and the web matter, on the issue of publication.

[80]Trkulja No 5 [2012] VSC 533, [12].

In considering the assessment of damages, Beach J was alert to the need to limit the compensation awarded to the consequences flowing from the images matter and not that arising from the web matter that had failed. He was also alert to the need to limit the compensation awarded so it did not include the harm done by other publications for which another internet search engine, Yahoo, was responsible. He appreciated that disentangling those consequences was difficult. As he said:

The plaintiff gave evidence of the devastation, hurt feelings and stress caused to him by the publication of the images matter and the web matter. I accept that these matters were significant. However, I also accept Google Inc’s submissions as to the difficulty of disentangling the consequences of the publication of the images matter (being the only publication upon which the plaintiff was successful) from not only the publication of the web matter — but also the publications for which the plaintiff has received damages from Yahoo. Additionally, it must be remembered that no damages are awardable in respect of the imputation found to have been conveyed by the images matter prior to 11 October 2009.[81]

[81]Ibid [45].

Ultimately, his Honour considered that the proper focus in the circumstances of the case was to ensure that the award of damages vindicated the reputation of the plaintiff and that the problems of disentanglement and the like had ‘particular relevance in respect of the issues of damage to reputation and hurt feelings and the like — rather than to the issue of vindication’.[82] He said:

In my view, whatever view one takes of the actual damage to reputation and hurt feelings, the amount of the damages to be awarded must be sufficient (in the words of some of the authorities) to ‘nail the lie’ in respect of the imputation upon which the plaintiff has succeeded.[83]

[82]Ibid [52].

[83]Ibid [53]. See also Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519, 202-3 (Kirby J).

By contrast, here the judge perceived the difficulty of disentanglement as an insuperable or impossible obstacle requiring the exclusion from consideration of all that harm not solely arising from the defamatory statements. In awarding damages by reference to that harm which was solely caused by the defamatory statements he appears to have lost sight of the need for the damages awarded to be of a sufficient quantum to vindicate the reputation of those defamed. In our view, the judge failed to arrive at a sum which vindicated the reputations of Jeffrey and Curnow; he failed ‘to demonstrate, to the bystander, the baselessness of the allegation … in the defamatory material’[84] — that is, he failed to ‘nail the lie’.
[84]Trkulja v Yahoo! Inc LL [2012] VSC 88, [60] (Kaye J), referring to Broome v Cassell & Co Ltd [1972] AC 1027, 1071 (Lord Hailsham LC).

In our view, the award of damages was so low as to be inappropriate. The award should be set aside.

(2) Ought the judge have awarded aggravated damages?

Jeffrey and Curnow submit that the judge erred in failing to award aggravated damages, in circumstances where he had made a finding that the publication of the defamatory words on the website was motivated by an unreasonable determination to fight the quarry and make things as difficult as possible for its operators, and where the defamatory imputations were made at least in part to further Giles’ own interests. This submission somewhat exaggerates the judge’s finding, as he was careful to say that Giles’ publication of the defamatory statements on the website ‘may show obsession and, perhaps, an unreasonable determination to make things difficult for those operating a nearby quarry’.[85] Moreover, the interest which Giles aimed to further was described in innocuous terms by the observation that ‘[p]lainly Mrs Giles did not want the quarry next to the land upon which she hoped to retire’.[86]
[85]Reasons, [55].
[86]Ibid.

However, Jeffrey and Curnow rely also upon the response Giles made to their solicitor’s letter, in which concern was expressed about the defamatory remarks on the website. Her response was to continue to publish such remarks as well as uploading the letter itself, with a published response. Much of this response continued Giles’ attempt to assert the accuracy of, and to justify, the defamatory imputations. Giles did not remove the defamatory statements from the website until seven months after the receipt of the solicitor’s letter, and two months after Giles received Jeffrey and Curnow’s writ and statement of claim commencing the proceeding. The judge rejected Giles’ contention that the length of time the defamatory statements were on the website was partly due to the fault of Jeffrey and Curnow in not taking action quickly enough to identify the offending words so she could remove them.

Jeffrey and Curnow point to Giles’ attempt during the trial to amend her defence to include pleas of truth and contextual truth,[87] and to the fact that although this application was refused Giles continued to attempt to establish the truth of the defamatory remarks in evidence and through her cross-examination of the plaintiffs.[88] They point also to Giles’ attempts during the trial to ‘construe words plainly intended to allege that [Jeffrey and Curnow] had deliberately or intentionally lied under oath as meaning something otherwise’,[89] and, as mentioned above, her failure to apologise until the conclusion of her closing submissions.[90] However, there is little support for the view that the absence of an apology can aggravate damages, although the giving of an apology can mitigate damage. As Mason CJ, Deane, Dawson and Gaudron JJ said in Carson:

[W]e have difficulty in understanding how the mere absence of an apology can aggravate damages. Whereas publication of an apology may mitigate damage, thereby reducing the harm suffered by a plaintiff in a defamation case, and so reduce the damages awarded, the failure to publish an apology does not increase the plaintiff’s hurt or widen the area of publication. No doubt want of an apology may be a relevant factor in establishing that a defendant is motivated by a desire to injure the plaintiff but that does not mean that want of apology itself aggravates the plaintiff’s injury.[91]

[87]See Association of Quality Child Care Centres of New South Wales v Manefield [2012] NSWCA 123, [147] where it was held (Beazley JA, with McColl JA and Tobias AJA agreeing) that an application to amend the defence to allege truth and to plead contextual truth, although it had been refused, had added to the respondent’s ‘annoyance and hurt’.

[88]Reasons, [35].

[89]This was associated with the claim Giles made that she had not known that ‘perjury’ necessary involved deliberate conduct. The judge rejected her argument: Reasons, [13].

[90]See [26] and [33] above.

[91](1993) 178 CLR 44, 66. This is not to say that when an apology is given it may be so delayed or so limited as to be ‘inadequate and indeed insulting’: see Carson (1993) 178 CLR 44, 118 (McHugh J).

Giles submits that the judge reached his conclusion as to the award of aggravated damages following careful consideration of the long series of events constituting the dispute between the parties. She submits that the judge’s statement of principle for an award of aggravated damages was correct. He said:

The award of aggravated damages depends upon finding conduct on the part of the defendant which, although not malicious, is ‘unjustifiable, improper or lacking in bona fides’ which increased the injury to the feelings of the plaintiff.[92]

[92]Reasons, [36] (citation omitted). See Triggell v Pheeney (1951) 82 CLR 497, 514; Belbin [2012] VSC 535, [328] (Kaye J).

Giles further submits, and we agree, that the judge was correct to conclude that the circumstances here did not justify an award of aggravated damages as the defamation was not the product of a lack of good faith, the existence of a collateral or anterior purpose or unjustified and unreasonable conduct. Rather, it was the product of a campaign by Giles to dispute the right of Jeffrey and Curnow, through their company, to carry on the quarrying operation — conduct which did not meet the necessary threshold in question.

In our view, none of the behaviour of Giles highlighted by Jeffrey and Curnow demonstrates that the judge was in error in refusing to award aggravated damages. However, we consider that the behaviour relied upon in support of the claim for aggravated damages ought be taken into account in the award of compensatory damages this Court orders.

(3) Should the judge have ordered interest?

No order for the payment of interest was made by the trial judge, despite a claim for interest having been made in the statement of claim. Jeffrey and Curnow submit that this constitutes appellable error on the basis of s 60(1) of the Supreme Court Act 1986 (Vic) which they construe as providing that, in the absence of good cause to the contrary, the judge was bound to award interest from the commencement of the proceedings to the date of the judgment over and above the damages awarded. Section 60(1) provides, relevantly, as follows:

The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate … as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.

Giles emphasized the words ‘on application in any proceeding’ in s 60 to support the competing construction that it is necessary to enliven the section that an actual application for interest be made and not merely foreshadowed in the prayer for relief in a statement of claim. She submits that as no such application was made by Jeffrey and Curnow in their final submissions or on the day that orders were pronounced, s 60 was not engaged and no error arose.

In response, Jeffrey and Curnow emphasized the ‘obligatory language (“must”) in which the entitlement to interest is expressed’.[93] However, as the Full Court said in Clarke v Foodland Stores Pty Ltd[94] in respect of s 58(1) of the Supreme Court Act which is relevantly in similar terms,[95] the entitlement is prima facie only:

It is true that the direction in s 58(1) that the court allow interest is in mandatory terms: ‘the Court must on application … allow interest to the creditor on the debt or sum’ recovered. But that is immediately qualified by the clause ‘unless good cause is shown to the contrary’ and so, notwithstanding that the basic injunction is mandatory, it is correct, in our opinion, to describe the section as providing a prima facie rule that the plaintiff is entitled to interest. The entitlement to interest, which is prescribed by the section, may be overturned by good cause being shown ‘to the contrary’.[96]

[93]Victorian Workcover Authority v Esso Australia Ltd (2001) 207 CLR 520, 546 [69].

[94][1993] 2 VR 382 (Fullagar, Marks and JD Phillips JJ).

[95]Section 58 relates to proceedings for a debt or sum certain.

[96]Ibid 388.

Jeffrey and Curnow submit also that the circumstances in which judgment was delivered effectively precluded them from having any opportunity to make an oral application for interest. To this extent, their argument went beyond a question of the construction of s 60. The manner in which judgment was delivered is discussed below. Suffice it to say here that we accept that there was a good deal of miscommunication at the time of the delivery of judgment, and this led to there being no proper opportunity afforded to Jeffrey and Curnow to make a formal application for interest to give effect to the prayer for relief in their further amended statement of claim, if such a formal application is necessary. Given the confusion arising at the time of judgment, Jeffrey and Curnow should not now be precluded from persisting with an application for interest and we consider that it would be unjust not to permit them to do so. Giles was clearly on notice that interest was sought but there was no opportunity afforded to her to argue that there was good cause for interest not to be awarded. It was therefore unclear whether Jeffrey and Curnow’s prima facie entitlement to interest was defeated or not.

In the circumstances of the case, which are unusual, we consider that the question of interest ought be further argued, and determined, in the s 29 application. The court hearing the s 29 application is not precluded from making ‘any order’ (s 29(3)) and this may subsume an order for interest on an award of damages. The judge may deal with the application for interest under s 60 of the Supreme Court Act. It will be necessary, as we discuss below, for that court to determine the matter of the costs below, as we consider that this was what was intended by the judge. During the course of the hearing of the s 29 application Giles can be afforded an opportunity to demonstrate that she has good cause why Jeffrey and Curnow should not be afforded the interest to which they are undoubtedly prima facie entitled. Any interest to be awarded would need to be calculated by reference to the award of damages that this Court determines is appropriate.

Conclusion on Jeffrey and Curnow’s appeal

We would allow the appeal and set aside paragraph 1 of the orders.

We consider that this Court should assess the general damages to be awarded for itself as this would save the time and expense of a further hearing on remitter. With respect to the substantive defamation proceeding, there are no necessary findings of fact still to be made and no further investigation required. However, there is an issue arising as a result of the disclosure to this Court of an offer of compromise. Given this issue, we discuss further below the disposition of the appeal.

The application by Giles for leave to appeal against costs

Giles seeks leave to appeal against the costs orders made against her, as set out above.[97] The substance of Giles’ complaint is that the judge did not afford her procedural fairness, as he did not provide sufficient opportunity for her, as an unrepresented litigant, to bring to his attention an offer of compromise dated 28 November 2012 (‘the 28 November 2012 Offer of Compromise’) in which she offered to compromise the proceeding by paying Jeffrey and Curnow $40,000 as ‘the settlement sum’. As the damages ultimately ordered were significantly lower than the figure represented by the 28 November 2012 Offer of Compromise, she submits that the 28 November 2012 Offer of Compromise would have had a bearing on costs and was a matter that the judge would have been obliged to take into consideration, had he been made aware of it. The costs consequences of a failure to accept an offer of compromise that is more favourable than the amount of damages ultimately awarded are provided for in r 26.08(3) of the Supreme Court (General Civil Procedure) Rules 2005 (‘Rules of Court’) which, at the relevant time, read as follows:

Where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim to which the offer relates not more favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders —
(a)the plaintiff shall be entitled to an order against the defendant for the plaintiff’s costs in respect of the claim up to and including the day the offer was served taxed on a party and party basis; and
(b)the defendant shall be entitled to an order against the plaintiff for the defendant’s costs in respect of the claim thereafter taxed on a party and party basis.

[97]See [17] above.

As Jeffrey and Curnow collectively received less than half the settlement sum proposed by Giles, Giles seeks an order that Jeffrey and Curnow pay her costs in accordance with r 26.08(3). Giles submits that counsel for Jeffrey and Curnow at trial had been subject to an obligation, due to Giles’ status as a self-represented litigant, to alert the court to relevant offers of compromise when costs came to be considered. This obligation, she submits, arises both from counsel’s overriding duty to the court, and from the overarching obligations enshrined in the Civil Procedure Act.

On the final day of the trial, in concluding her submissions in reply to the court, Giles advised the judge as follows:

GILES: In finishing: Yesterday I submitted the following document to the Plaintiffs, with it being refused. I consider it an answer that solves all the problems and I’ll be having it formally and properly drawn up by a lawyer and filed with the court and served on the Plaintiffs next week. Do you want to see that, your Honour, it was an offer of compromise?
HIS HONOUR: No, no, I certainly don’t, it’s not matter (sic) that I can take into account I’m afraid.
GILES: Okay. Well, that’s my reply, sir.

The judge then qualified his remark by stating that it was not appropriate for an offer to be put at the end of the final address, as it meant that part of Giles’ defence in the proceeding relied upon a matter which had not been tendered in evidence and to which the other party had not had a chance to respond. He concluded by saying that: ‘the best thing to do at this stage is for me just to say, it’s not something that I should take into account at all’.

Upon delivery of judgment at the end of the trial, some five weeks later, the judge moved immediately to the question of what costs order should be made in the proceeding. He then indicated that he was aware of the summons filed by Giles pursuant to the s 29 application which the judge said he understood contained matters that Giles sought to put before him as relevant to what she might say about costs. The following exchange ensued:

HIS HONOUR: In the substantive matter, the orders that I propose to make, subject to any questions about costs, are that there be an award for damages for Mr Jeffrey in the amount of $12,000, and for Mr Curnow in the amount of $8,000. I should indicate, as it may be relevant to the question of costs, that I have made no allowance for costs on the head of aggravated damages, and I publish my reasons.
There are, I think, now two matters that I need to deal with. I assume, Mr Southall that you will be seeking costs.
SENIOR COUNSEL: Yes, your Honour.
HIS HONOUR: I have been informed that there has been a summons filed by the defendant and I should inform the parties that I have read the summons. I have looked at the first page of the application and have not read any further than the first page of the application and have not read the affidavit.
As I understand the summons, it was that Mrs Giles was seeking to put before me matters relevant to what she might say about costs and I did not think it appropriate that I should take into account any of the factual matters on the substantive proceeding. So I did not read any of it ahead of that matter.

The judge also indicated that he considered that the s 29 application ‘should not now go ahead on the material without the parties having read what I have written’. He then stated:

What I thought, upon arid reflection, was that I should do the following. I should order that any costs that you have incurred — your parties have incurred — other than those referable only to the aggravated damages point will be paid by Mrs Giles … subject to — unless there is another order hereafter about costs, and otherwise refer the summons and application for the Listing Master for directions … if any. That is my current intention.[98]

He then indicated that as a result of the substance of his reasons for judgment, Giles’ affidavit in support of her s 29 application affidavit might need to be amended, and Jeffrey and Curnow might wish to file affidavits in response. It was for this reason that the judge suggested that ‘directions might be a sensible course’. The possibility was raised that the matter might return to the judge, as he said: ‘I am not going to exclude the possibility that the Listing Master might refer the matter back to me’.

[98]Emphasis added.

When Giles expressed a concern that she might be precluded from taking any further action after the order was made, the judge said:

I am proposing simply to refer your current summons and application … to the Listing Master for her to give pre-trial directions, if any, on that point … That will give you all some time to think through what you should or should not do and I hope that all the parties will, at some stage, take cognisance of the view that ending disputes is a good thing. Disputes cannot go on forever.

He then pronounced orders in the following way:

The orders that I will make so far as costs are concerned, Mrs Giles, are that you pay the costs of the Plaintiffs, other than those concerning only the aggravated damages … unless there be some further or other order made in connection with or pursuant to the summons and application [under s 29 of the Civil Procedure Act]. That, I think, preserves everybody’s position as best I think I am capable of doing.[99]

[99]Emphasis added.

At this point Senior Counsel for Jeffrey and Curnow unsuccessfully sought to make a reference to settlement offers:

Yes. Your Honour, in respect of the order for costs, does your Honour bear in mind and you may well, but s 40(2)(a) of the [Defamation] Act provides that ‘Without limiting sub-s.(1), a court must, unless the interests of justice otherwise require, (a) if defamation proceedings are successfully brought by a plaintiff’ whatever that might mean ‘and costs in the proceedings are to be awarded to the plaintiff, or to costs of and incidental to the proceedings, to be assessed on an indemnity basis if the court is satisfied the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff’.
Now, as I read that, I am being premature.

The following exchange then took place:

HIS HONOUR: Yes, I think …
SENIOR COUNSEL: At the very least I am being premature.
HIS HONOUR: At the very least you are being premature. I did not think it applied however.

SENIOR COUNSEL: Thank you, your Honour.

The judge then formally referred the s 29 application to an associate justice for directions.

At the hearing of the appeal, the parties were granted leave to file further written submissions addressing the matters discussed in those portions of the trial transcript that we have set out immediately above. The parties were invited to make submissions on the question of whether there is an obligation on counsel and lawyers to inform the court, upon judgment being delivered, of any offers of compromise having been made.

Jeffrey and Curnow submit that although there were a number of complex matters which could potentially have been addressed before the judge concerning the costs of the proceeding, including reserved costs, what they described as ‘numerous offers of compromise and Calderbank offers’, and r 63.24(1.1) of the Rules of Court,[100] the transcript of the hearing clearly shows that neither party was afforded any time to consider the lengthy reasons for judgment in order to establish what submissions, if any, ought to be made in regard to these matters, nor given any reasonable opportunity to address the judge on those matters or, as described above, in Jeffrey and Curnow’s case, to apply for interest. They submit that the form of the order proposed by the judge, along with his comment that it was ‘subject to’, as well as the terms of the order that ‘unless there be some further or other order made in connection with or pursuant to the summons and application’, were together liable to generate confusion in the parties as to whether the costs order was akin to an interim rather than a final order. This uncertainty was further engendered by the judge’s remarks that he would give the parties time to think through what they should do, and that this would ‘preserve everybody’s positions’. The understanding that the costs order was only an interim order was reinforced by the judge’s agreement with the characterisation by Senior Counsel that the attempt to raise the question of settlement offers in the context of the Defamation Act was ‘premature’. As a result of these matters, Jeffrey and Curnow submit, their counsel were left with the impression that the question of the parties’ position on the costs of the proceeding was being preserved, and that they were all being afforded some time to think through their positions before costs were revisited under the guise of the s 29 application at a later date — potentially by the judge himself, in the event that the matter was referred back to him by the Listing Master.[101]
[100]This provides: ‘Where in a proceeding for libel or slander the plaintiff recovers by judgment or otherwise an amount (exclusive of costs) not exceeding $50,000, the plaintiff shall, unless the Court otherwise orders, be entitled only to the costs to which the plaintiff would have been entitled if the plaintiff had brought the proceeding in the County Court less an amount equal to the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the Supreme Court instead of the County Court, but shall not be required to pay the defendant any amount by which the additional costs exceed the costs payable to the plaintiff’.
[101]See [66] above.

Giles submits that she was subject to a similar impression. In her second affidavit, sworn 26 July 2013, she states that, by reason of the words in paragraph 2 of the orders beginning with ‘unless there be some further or other order’, she was ‘under the impression that there was no need to address costs at that time or by means of Appeal’. In her third affidavit, sworn 14 February 2014 in support of her application for leave, she swears that:

Having been told on 18 April 2013 that it was inappropriate to raise the subject of Offers of Compromise, I felt that it might be inappropriate to argue anything that might have arisen in relation to the original Offer of Compromise before His Honour on 23 May 2013. When His Honour indicated that the costs application was to be referred to Associate Justice Daly I simply assumed that all issues in relation to the costs including the consequences of the judgment falling well short of the amount offered, would then be dealt with by the Associate Justice.

In our view, it is readily apparent that at the time of the delivery of judgment all parties were left in a state of confusion as to the status of the costs order the judge had made. We agree that it was unclear whether it had the status of a final order or whether it was only an interim order to be affected by, and revisited in the course of, the hearing of the s 29 application. The words ‘unless there is another order hereafter about costs’[102] can be plainly understood as indicating that the order the judge was about to make on costs was no more than an interim order, which might be varied or vacated and substituted by a later order made in the course of the disposition on the s 29 application. This impression was reinforced when the judge expressly acknowledged that the matter might return before him after directions had been made by an Associate Justice.[103] This was further reinforced by the fact that the judge indicated that he considered: (1) that the summons in the s 29 application raised matters relevant to what Giles might say about costs;[104] and (2) that the application should not go ahead without the parties reading his reasons for judgment which might be relevant to the issues in the s 29 application.[105] It is apparent that Senior Counsel for Jeffrey and Curnow understood that the order the judge was about to make on costs was an interim order because this explained why he described his reference to settlement offers in the context of s 40(2)(a) of the Defamation Act as ‘premature’.[106] When the judge acceded to that characterisation[107] this must have confirmed for Senior Counsel that his understanding was correct. The question arises: If the judge intended his costs order to be a final order why did he agree that references to previous attempts at compromising the proceeding were premature? If the costs order was intended as a final order, any relevance of s 40(2)(a) of the Defamation Act would have been immediate.[108]
[102]Ibid.
[103]Ibid.
[104]See [65] above.
[105]See [66] above.
[106]See [69] above.
[107]See [70] above.
[108]More generally s 40 of the Defamation Act (headed ‘Costs in defamation proceedings’) relevantly provides: ‘(1) In awarding costs in defamation proceedings, the court may have regard to — (a) the way in which the parties to the proceedings conducted their case (including any misuse of a party’s superior financial position to hinder the early resolution of the proceedings); and (b) any other matters that the court considers relevant. (2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise) — (a) if defamation proceedings are successfully brought by a plaintiff and the costs in the proceedings are to be awarded to the plaintiff — order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff’.

In our view, the judge intended that paragraph 2 of the orders was only an interim order on costs and that matters relevant to costs were to be revisited on the s 29 application. We consider counsel for Jeffrey and Curnow were correct to interpret the costs order made by the judge as an interim order in relation to which both they and Giles would be given a proper opportunity to make submissions upon costs, having taken stock of the judgment on the substantive proceeding and having considered what was referred to as the numerous settlement offers made during the course of the proceeding. Against that background, the question of whether there is a general obligation on counsel and lawyers to inform the Court, upon judgment being delivered, of any offers of compromise having been made, is not here relevant. We consider that it is not relevant because, even if there were such a duty,[109] (about which we make no determination), it could only be enlivened at the time when the occasion arises for submissions to be made on costs. While in the ordinary course this might be the time of delivery of judgment, it is plainly not so when the judge indicates that there will be a later occasion for submissions to be made on costs. It is not unusual for submissions to be made on costs at a time after the parties have had a reasonable opportunity to absorb the reasons for judgment or for there to be a separate costs hearing in complex matters. The judge appeared to indicate here that there would be a later occasion for submissions to be made on costs, and all the parties had good reason to understand from what he said that this is what he intended. In those circumstances, it would be wrong to conclude that there had been any failure by counsel for Jeffrey and Curnow to discharge an obligation they owed to the Court.
[109]On the question of the duties owed to a court by counsel when appearing against an unrepresented litigant see Hoe v Manningham City Council [2011] VSC 37; Noone, Director of Consumer Affairs v Operation Smile (Australia) Inc (No 2) [2011] VSC 153; Director of Consumer Affairs Victoria v Scully (No 2) [2011] VSC 239; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; and Laferla v Birdon Sands Pty Ltd [1998] NTSC 80.

Furthermore, it would also be wrong to conclude, as Giles asserted, that counsel for Jeffrey and Curnow failed to meet an obligation they owed to assist the Court to discharge its duties to an unrepresented litigant, namely ‘to draw attention to matters that might reasonably bear upon the Court’s decision which, in a case where all the parties were represented, could be expected to be referred to by the opposing practitioners’.[110]
[110]Noone v Operation Smile (Australia) Inc (No 2) [2011] VSC 153, [14].

We consider that paragraph 2 of the judge’s order should stand. However, it only has the status of an interim order and the judge who determines the s 29 application may consider it appropriate to set it aside. In the s 29 application Giles should be given an opportunity to rely upon the 28 November Offer of Compromise. While this issue may not have been raised by Giles’ affidavit in support of the s 29 application, the hearing of that application should provide a proper opportunity for Giles to make submissions on the basis of the 28 November Offer of Compromise, although it may have little relevance given our disposition below. Nevertheless, Giles should be given an opportunity to raise whatever matters she considers relevant before final orders are made.

We would refuse to grant Giles leave to appeal paragraph 2 of the orders the judge made.

Conclusion on Giles’ application for leave to appeal against costs

The application made by Giles for leave to appeal against costs should be dismissed.

Disposition

We mentioned above[111] that the existence of the 28 November 2012 Offer of Compromise had been disclosed to the Court. However, we consider that this poses no difficulty because we consider that the sum mentioned in the 28 November 2012 Offer of Compromise was considerably below what we assess to be an appropriate and proportionate award of damages that will achieve consolation for the personal hurt and distress Jeffrey and Curnow have suffered, reparation for the injury done to their personal and business reputations, and, importantly, vindication of their reputations. In Trkulja v Yahoo! Inc LLC[112] Kaye J emphasised the need to ensure that an award of damages is large enough to vindicate a plaintiff once and for all:

As an award of damages is directed to vindicating the plaintiff, the award is required to be treated as sufficiently large to vindicate him once and for all, into the future.[113]

[111]See [60] above.

[112][2012] VSC 88.

[113]Ibid [57].

We consider the existence of the 28 November 2012 Offer of Compromise to be irrelevant. Furthermore, it emerged during the submissions made on Giles’ application for leave to appeal against costs that there had been multiple offers of compromise made, and perhaps Calderbank offers as well. These offers have not been disclosed to the Court and thus the Court remains unaware of any of their details.[114] In our view it would be desirable and appropriate for this Court to set aside the award of general damages made by the judge and in lieu of that order substitute its own award, thus saving the unnecessary effort and expense of a re-trial.
[114]See [73] above.

At trial, the range submitted as appropriate for the quantum of damages had been $60,000–$80,000 for Jeffrey and $40,000–$50,000 for Curnow.[115] On the appeal, Jeffrey and Curnow submit that in light of the recent decision of Lower Murray,[116] where the sum of $70,000 was treated as ‘relatively modest’, the estimates proffered at trial should not be regarded as constraining this Court’s discretion. As discussed above,[117] other recent cases involving the choice of the Internet for publication of defamatory material have attracted sums considerably in excess of that. Here the defamatory imputations were serious, were published on the Internet with all the accessibility and retrievability that medium commands, and they caused considerable harm to both Jeffrey and Curnow. There is a need for their reputations to be vindicated. Moreover, the behaviour of Giles identified above,[118] while not supporting an award of aggravated damages, should be taken into account in the award of compensatory damages. This is especially so in respect of Giles’ response to the letter from the solicitors for Jeffrey and Curnow. Far from treating the letter with the seriousness it deserved, Giles used the letter as providing a further opportunity for her to continue to publish the defamatory imputations, which she delayed in removing. In our view, an award of $75,000 for Jeffrey and $65,000 for Curnow stands in an appropriate and rational relationship to the harm sustained. We would order that, in lieu of paragraph 1 of the orders, Giles is to pay damages in the amount of $75,000 to Jeffrey and damages in the amount of $65,000 to Curnow.

[115]Reasons, [58].

[116][2014] VSCA 104. See [36] above.

[117]See [37] above.

[118]See [49]–[50] above.

GINNANE AJA:

I agree with Warren CJ and Tate JA that Mr Jeffrey’s and Mr Curnow’s appeal should be allowed for the reasons that their Honours give. I agree with their Honours’ disposition of the appeal.

I would grant Mrs Giles leave to appeal and allow her appeal, because I consider that the parties were not given sufficient opportunity to put submissions about the costs of the trial before the trial judge ordered that Mrs Giles pay the costs of the plaintiffs, other than those referable only to the issue of aggravated damages, unless there be some further or other order made in connection with or pursuant to the summons and application filed 17 May 2013 under s 29 of the Civil Procedure Act 2010 (Vic). I would set aside that costs order.

I would leave to the judge who hears the s 29 application, the question of the costs of the trial. I would reserve liberty to apply if the s 29 application does not proceed.

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[2015] VSCA 70

24 April 2015