Kearney v 2HD Broadcasters Pty Limited t/as 1143 2HD
[2012] NSWSC 321
•27 July 2012
Supreme Court
New South Wales
Medium Neutral Citation: Kearney v 2HD Broadcasters Pty Limited t/as 1143 2HD [2012] NSWSC 321 Hearing dates: 3 & 4 April 2012 Decision date: 27 July 2012 Jurisdiction: Common Law Before: Davies J Decision: (1) Judgment for the First Cross-Defendant on the Cross-Claim.
(2) Judgment for the Cross-Claimant against the Second Cross-Defendant in the sum of $46,796 together with interest thereon.
(3) The Second Cross-Defendant is to pay the Cross-Claimant's costs of the Cross-Claim.
Catchwords: TORTS - defamation - caller to talkback radio program - publication of false and defamatory allegations - Plaintiff sues radio station - radio station settles with Plaintiff - cross-claim against caller - whether caller had defences to claim for defamation - reasonableness of settlement - amount of contribution to be paid by caller - claim by radio station in deceit - elements of the tort of deceit. Legislation Cited: Defamation Act 2005
Law Reform (Miscellaneous Provisions) Act 1946Cases Cited: Commercial Banking Co of Sydney Ltd v RH Brown & Co (1972) 126 CLR 337
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Edgington v Fitzmaurice (1885) 29 Ch D 459
George Wimpey and Co Ltd v British Overseas Airways Corporation [1953] 2 QB 501
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 290
Lange v Australian Broadcasting Corporation (1997) 189 CLR 520
Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492
Stott v West Yorkshire Road Car Co Ltd [1971] 3 All ER 534Category: Principal judgment Parties: Aaron Kearney (Plaintiff)
2HD Broadcasters Pty Limited t/as 1143 2HD (First Defendant/Cross-Claimant)
Newcastle FM Pty Ltd t/as New FM (Second Defendant/Cross-Claimant)
Wendy J Stephens (First Cross-Defendant)
Craig Stephens (Second Cross-Defendant)Representation: C A Evatt & R Rasmussen (Cross-Claimant)
R K Weaver and N Smith (Cross-Defendants)
Hazan Hollander (Plaintiff)
Stacks, The Law Firm (First & Second Defendants/Cross-Claimants)
Slater & Gordon (Cross-Defendants)
File Number(s): 2010/329085
Judgment
The phone call
On 23 February 2010 at 3:21am a telephone call was received by the Defendant radio station 2HD Newcastle from a caller. After the caller gave his name to the producer he was put through to the presenter of the program, Gary Stewart. The following conversation then ensued:
Presenter:Heading off to Morisset, Morning Geoff.
Caller:G'day mate, how are ya?
Presenter:Well mate, I'm ok, how are you?
Caller:I wanna know if you've got your copy of the Newcastle Herald this morning yet?
Presenter:Oh look I've got... No I haven't. I've only got the Telegraph in front of me I'm sorry.
Caller:Ok, I've just got hold of my Newcastle Herald. Front page of the paper there... local ABC broadcaster Mr Kearney done for drink driving for the third time in two years.
Presenter:Is that right?
Caller:I, um, think it's a might hypocritical how these people get on and they are all high and mighty about morals and standards and stuff yet they can't follow the law themselves. I think it's pretty bad and I think the ABC should do something about it. I don't know what they can do it about it but I don't think this bloke should be on the air. He'll be on the air tomorrow, or today, pontificating as usual.
Presenter: Mmmmm.
Caller:And that's not good enough really.
Presenter:Yeah, yes I see your point, Geoff. I'll go and chase the paper and have a look at that story but you're right. It's no good them there... um... not so much dictating but at least communicating with his listeners about the safety of road... drinking issues (as used?) for arguments sake and then going out and getting stung twice in a row or?
Caller:*Unclear* Well this is the third time in two years.
Presenter: Third time?
Caller: That he'd been charged. Yeah.
Presenter: Right.
Caller:I mean, I don't even know how you keep a licence with that sort of record.
Presenter:Yeah. Correct. No that's interesting, interesting Geoff. I'll go and chase that story, thank you.
Caller:Alright, thank you. Have a good day.
Presenter:You too, pal.
What was said by the caller was untrue in every respect. The caller did not have a copy of the Newcastle Herald. There was no story on the front page or anywhere else in the paper about the ABC broadcaster Mr Kearney. Mr Kearney had not been convicted for drink driving at all let alone for a third time in two years. Further, as the caller had never listened to Mr Kearney's station he had no basis for saying that Mr Kearney was high and mighty about morals and standards or that he would be pontificating as usual on the following day.
When Mr Kearney (the Plaintiff in these proceedings) heard about the broadcast he telephoned Mr Guy Ashford, the General Manager of the Station, to complain and to ask for an apology.
An apology in the following form was published on 10 occasions on Mr Stewart's program between 2am and 4am on 24th, 25th and 26th February 2010:
On the 23rd of February on this station I had a discussion with a caller on air who was critical of ABC radio announcer Aaron Kearney. I won't repeat those but in general terms the caller made unsubstantiated claims about Mr Kearney. I want to make quite clear that Mr Kearney has never been charged or been implicated in any offence.
I want to completely retract any adverse claim that was made and on behalf of myself and this station I want to publicly apologise to Mr Kearney for the embarrassment that the broadcast may have caused him.
The proceedings
Shortly thereafter the Plaintiff engaged solicitors in relation to proceedings which were ultimately brought claiming damages for defamation. The proceedings commenced on 3 October 2010. They were ultimately settled on 23 December 2010, before 2HD had filed any defence but shortly after it had been unsuccessful in striking out some of the imputations pleaded by the Plaintiff. The proceedings were settled with a judgment for the Plaintiff in the sum of $69,836.97 with no order as to costs. The Orders were entered on 16 February 2011. The following notation appeared on the Short Minutes of Order:
The Court notes:
5.that the Plaintiff has no objection to the defendant seeking leave to file a cross claim, and the Defendant undertakes to indemnify the Plaintiff in relation to any costs and disbursements on the full indemnity basis arising from any cross claim it is permitted to bring.
On 14 February 2011, and without any leave being filed, 2HD filed a cross-claim against Wendy J Stephens and Craig Stephens. Craig Stephens was alleged to be the person who made the call to 2HD. Wendy J Stephens, his wife, was asserted in the proceedings to be the owner of the mobile phone used to make the call, although this fact was not pleaded in the Cross-Claim. It is that Cross-Claim which is the subject of this judgment.
During the hearing of the Cross-Claim agreement was reached whereby the Cross-Claim would not be pursued against Wendy Stephens. It was agreed that an order to effect that agreement would be included in this judgment.
The Statement of Claim pleaded seven allegations but two of these were abandoned before the matter was settled. The remaining imputations were these:
Particulars of defamatory meanings
(1)The plaintiff has committed the criminal offence of drunk driving, on multiple occasions, in the space of just two years;
(2)The plaintiff has so conducted himself by committing offences of drunk driving that he is unfit to be employed by the ABC as a radio presenter;
(3)The plaintiff is a hypocrite in that he preaches morals and standards that he does not himself abide by;
(4)The plaintiff's conduct in drunk driving has been so offensive as to warrant his exposure on the front page of the Newcastle Herald newspaper;
(5)The plaintiff has so conducted himself by drunk driving three times in two years, that he should not have a driver's licence.
Particulars of imputations:
The imputations are carried by the entirety of the words set out in the Schedule annexed hereto.
2HD claims contribution from Craig Stephens, the remaining Cross-Defendant, on the basis that he is a joint tortfeasor with 2HD in having defamed the Plaintiff. The Cross-Claim pleaded that Mr Stephens broadcast and published or caused to be broadcast and published the words set out in Schedule "A" to the Statement of Claim (set out in paragraph [1] above), and alleged that the words attributed to "caller" in Schedule "A" were the words spoken by Mr Stephens. It alleged the words were defamatory of the Plaintiff and as a result 2HD was obliged to settle the claim brought by the Plaintiff for $35,000 plus legal costs.
An additional or alternative claim was made that Mr Stephens knowingly made false representations of and concerning Mr Kearney being representations set out in Schedule "A".
In the Cross-Claim 2HD also claimed actual damages, compensatory damages, aggravated damages and punitive damages for deceit. The claim for aggravated damages was abandoned at the hearing.
2HD's Schedule of Damages, being the damages and costs it claims to have incurred as a result of Mr Stephen's actions, shows the damages as follows:
1.Settlement Monies paid to Aaron Kearney: $35,000.00
2.Legal Fees paid to Hazaan Hollander: $38,449.92
3.Legal Fees paid to Banki Haddock Fiora: $5,495.24
4.Legal fees paid to Stacks the law Firm: $14,589.40
5.Fees to Counsel (Mr Evatt) $12,826.00
Total $106,360.56
Plus Costs
In his Defence to the Cross-Claim Mr Stephens admits that he spoke the words attributed to the caller in Schedule "A". Apart from denials in respect of any entitlement of 2HD to damages for false representations or to any contribution or indemnity in relation to the defamation, the only substantive matter raised in that Defence was that it was 2HD who caused the words to be broadcast and published by not using the seven second delay button.
However, both in an opening address as well as in closing submissions counsel for Mr Stephens raised the matter that prior to settlement between the Plaintiff and 2HD Mr Stephens was not made a party to the proceedings. The matter was initially put on the basis of an Anshun estoppel but that position was abandoned in final submissions. The final position put was that if his client had been joined as a party to the proceedings he may have had a defence that would have led to the claim failing. When asked to say what such a defence might have been counsel for Mr Stephens said that his client may possibly have had a defence of comment or qualified privilege.
Mr Stephens also challenged the amount of the settlement between the Plaintiff and 2HD as not being reasonable although this was not pleaded in the Defence to the Cross-Claim.
Events postdating the broadcast
As noted earlier, when 2HD was notified by Mr Kearney of the broadcast, Mr Ashford immediately arranged for an apology to be published some ten times over the following three days. Negotiations then ensued in relation to the payment of damages.
Mr Ashford formed an early view that there was something suspicious about the call. He accepted in evidence that, putting aside carelessness in making wrongful assertions, if the call had been malicious it could only have been intended to hurt one of two entities. One possible intent, he said, was to injure Mr Kearney. The alternative intent would be to inflict harm on 2HD (and/or its presenter) by causing it to defame Mr Kearney and become liable to him. Mr Ashford formed an early view that it was the second of these intentions that was operative.
One reason that caused him to have that view was that on the previous day 2HD had broadcast what was called a blooper concerning Mr Kearney. Mr Kearney had been reporting on a football match but left the microphone on unknowingly and said things that he might not have intended should have gone to air. When Mr Kearney rang Mr Ashford the day after the defamatory broadcast he made reference in passing to the fact that he did not appreciate 2HD having broadcast the blooper.
Because Mr Ashford had formed this view he undertook certain steps to try to track down who had made the telephone call to the station to see if that person could be linked in any way with Mr Kearney. To that end he hired a private investigator who obtained from Telstra the name of the owner of the mobile phone used to make the call to the station. The private investigator went out to the Stephens' home in Thornton and talked to Mr Stephens. Mr Stephens confirmed to the private investigator that he had made the call on that mobile phone. Although the mobile phone was in his wife's name he used it as his work phone and had possession of the phone at all times. Before he would say anything beyond that, Mr Stephens said he wanted to obtain some further advice.
There was tendered in evidence copies of a series of tweets made by Mr Ashford on the website known as Twitter. It appears from those tweets that the information identifying Mr and Mrs Stephens was first available to 2HD by 14 May 2010. The tweets also disclose that by 29 June 2010 2HD had offered the Plaintiff $30,000, although whether this was inclusive of costs was not made clear. A further tweet of 5 July 2010 said "75 down to 35 hmmm civil action pending" suggesting that the Plaintiff had agreed to take $35,000 at that time, although whether inclusive of costs or otherwise was also not made clear.
On 19 August 2010 Stacks the Law Firm, acting for 2HD, wrote to Mr Stephens detailing the call that had been made on 23 February 2010. The letter said that the solicitors were aware that Mr Stephens had made the call and had admitted doing so. The letter went on to say:
In light of the ramifications of the telephone call, and the financial loss which our client is now facing, due to the defamation proceedings, we are writing to you to seek your response before we commence proceedings against you, or alternatively, join you as a Defendant in respect to proceedings which we anticipate will be commenced against our client in the Supreme Court in due course.
...
We confirm that our client will be looking to you to compensate it in relation to any damages which have to be paid to Mr Kearney.
2HD apparently received no response to that letter.
On 1 October 2010 Stacks wrote again to Mr Stephens in these terms:
Broadcasting Operations Pty Limited ats Kearney
We refer to this matter, and to our letters to you dated 19 and 25 August 2010, copies of which are enclosed.
As we indicated to you in our previous correspondence, we confirm that our client holds you responsible for the damages claim which is being made by Mr Kearney for defamation.
Our client requires you to contribute to the settlement of the claim in the full amount that is being claimed, together with our client's costs to date.
We confirm that we have been advised by Mr Kearney's solicitor, that he is willing to accept $50,000.00, inclusive of costs, before he commences proceedings.
We intend to try to negotiate a figure with him which will be less than that sum however, we are unable to be certain whether or not he will accept a lesser sum.
The purpose of this correspondence, is to put you on notice of the settlement negotiations, and offer you an opportunity to be involved with those negotiations at this stage.
If you choose to ignore this letter, you will not be able to object later, once we reach a settlement with Mr Kearney's lawyers.
Once a settlement is reached with Mr Kearney's lawyers, we are instructed to commence proceedings against you by way of a Statement of Claim.
As we have indicated above, the purpose of this correspondence is to advise you of the proposed settlement, and to give you an opportunity to take part in the settlement. If you choose to ignore this correspondence, and we settle with the Plaintiff, we will be holding you responsible for the entire sum, plus our costs, plus the costs of commencing proceedings against you and finalising that claim.
If the matter does settle for $50,000.00 inclusive of costs, we do not believe that any judge would say that that sum was not reasonable.
We await your urgent advice within the next 7 days, failing which we will commence proceedings as foreshadowed in this and earlier correspondence. (emphasis added)
Assessment of witnesses
Three persons gave evidence in the matter. The first was Guy Ashford, the General-Manager of Radio Station 2HD New FM Newcastle. The second witness was Gary Stewart, the radio announcer who took the call from Mr Stephens on the night concerned. The third witness was Mr Stephens. There was no evidence from Mrs Stephens although she was present in Court during the hearing. I shall return to that matter presently.
(a)Guy Ashford
I found Mr Ashford to be an honest and straightforward witness. A good deal of the cross-examination of Mr Ashford was directed to a suspicion he formed at an early time that the radio station was being set up by the call made by Mr Stephens. As mentioned earlier, he had a suspicion that the Plaintiff, Mr Kearney, or someone on his behalf may have been involved.
His initial suspicions were raised because he thought the call itself was an unusual one where the allegations made by the caller were untrue in every respect. When he found out about the blooper tape he thought that there was too much of a coincidence in the fact that 2HD had played such a tape the day before, which had upset the Plaintiff, and then this extraordinary call had been made by Mr Stephens resulting in 2HD having defamed Mr Kearney.
In my opinion, it was not surprising that Mr Ashford had the suspicions that he did. It was not clear, however, how those suspicions are relevant to any issue involving the claim made against Mr Stephens. Mr Weaver of counsel for Mr Stephens was certainly critical of Mr Ashford for having published a series of tweets during the time investigations were ongoing into who it was that had called 2HD and the settlement negotiations that subsequently ensued between the Plaintiff and 2HD. Perhaps it was unwise for Mr Ashford to have published those tweets but, again, it is difficult to understand how they impact upon the issues between 2HD and Mr Stephens.
There was some suggestion that the suspicions and the investigations led to an increase in the legal costs now claimed as part of the settlement. I shall return to that when discussing the reasonableness of the settlement.
A matter that was of some significance concerning Mr Ashford's evidence was the matter of what is called the kill or delay button. This is the facility available to the radio announcer to prevent material being broadcast. It involves a delay between the time words are spoken and when those words go to air. It enables an announcer to prevent the material going to air after words are spoken by pressing the button.
It was put to Mr Ashford that "with the benefit of hindsight it's a shame" the announcer did not use the button. Mr Ashford did not agree. He said the way the caller introduced the topic by making reference to a story that was published on the front page of the newspaper which was in front of the caller would have caused the announcer to believe that what was about to be said was already in the public arena. In my opinion, Mr Ashford's view about this matter accorded with common sense.
(b)Gary Stewart
I found Mr Stewart to be an honest and straightforward witness. Mr Stewart said that he first moved to Newcastle and took up his position with 2HD on 15 August 2005 after transferring from another radio station in the group of stations run by the Coralis family. He said that he had never heard of Mr Kearney until his name was mentioned in the conversation. He said he had no reason to know Mr Kearney because Mr Kearney was not an opposition broadcaster to Mr Stewart.
Mr Stewart was asked about his failure to use the kill button. He was asked if, when he heard the words "local ABC broadcaster Mr Kearney", the alarm bells had gone off. He said they had not because of what the caller said about the matter being on the front page of the newspaper. He said he had only needed to use the kill button a handful of times in the seven years he had been broadcasting on 2HD, and those times had all involved inappropriate language. He said that if somebody says to him in a call that there is a story on the front page of a newspaper about something he accepts that as legitimate. For reasons similar to those I gave in relation to Mr Ashford I accept Mr Stewart's evidence in this regard.
It is necessary to be practical here. If the announcer was to doubt statements of fact made by callers he would be using the kill button all the time. There was nothing inherently unlikely in what Mr Stephens said to Mr Stewart. He claimed to have a copy of the Newcastle Herald in front of him and made reference to what he said was a story on the front page. Mr Stewart did not have a copy of the newspaper at that time. It was not reasonable to expect him to use the kill button until such time as he could verify the truth of what was being said to him.
It should also be noted that none of the remarks made by Mr Stewart were other than responsive and questioning of what was being said to him. He did not take up the matter except to make a general statement about "them" talking about road safety and then getting "stung".
(c)Mr Stephens
Mr Stephens was not a satisfactory witness. The starting point was that when he rang 2HD (or 2SM as he claims) he did not, on his own admission, tell the truth. He admitted that he did not have the Newcastle Herald when he rang and that he had never seen it. There is, therefore, reason to scrutinise his evidence carefully. I mention some particular matters.
First, Mr Stephens denied that he gave his name as "Geoff" or "Geoff of Morisset". In relation to the reference to Morisset it is difficult to understand how Mr Stewart could have come to say "heading off to Morisset" before he said good morning to Mr Stephens unless someone had informed Mr Stewart that the caller was from Morisset. It is significant in that regard that Mr Stephens admitted in his evidence that when he made the telephone call he was at Morisset.
In relation to the name that he denied giving, "Geoff", it is significant that Mr Stewart not only commenced the call after referring to Morisset by saying "Morning Geoff" to which Mr Stephens responded, but Mr Stewart called him "Geoff" two further times during the phone call without Mr Stephens correcting him.
His explanation in relation to Mr Stewart calling him Geoff was that he did not hear him say "Morning Geoff" although he believed that he heard him saying "Heading off to Morisset". His explanation for the later references to Geoff were that he gets called "Greg" and has been called Greg for most of his life so he did not give it a second thought. He said he probably heard Mr Stewart call him Geoff but he could not give any other explanation about why he did not correct him.
I do not accept these explanations. Nor do I accept that he told the first person to whom he spoke that his name was Craig. It is difficult to think of any reason for providing a false name other than to cloak himself with some measure of anonymity in case what he was imparting was not accurate.
Secondly, he gave evidence that he did not believe he was speaking to Mr Stewart whilst he was on the air. I do not accept that evidence. He agreed that he spoke to another person first and was then put through to Mr Stewart. Not only was he a very frequent caller to talk-back programs (as he admitted) but he had his radio on in the car before he rang. The call itself, and what was said, does not sound like a discussion in advance of speaking on the air.
Thirdly, after Mr Stephens found out that he was likely to be sued, so far from apologising to Mr Kearney or 2HD, he sent an email to Mr Ashford and to many of 2HD's principal advertisers threatening to shoot himself outside 2HD's offices and saying that it would adversely affect the radio station's ratings and advertising revenue. He claimed that this was the act of a desperate man, and that he was depressed and suicidal. Whilst that may have been the case, it is behaviour that causes me to scrutinise his evidence carefully. That behaviour and his behaviour in ringing the radio station in the first place both suggest that he is prepared to say anything without considering the consequences or to say things without having any basis for what he says.
Fourthly, Mr Stephens denied ringing 2HD. He said he rang 2SM. It can be accepted that the two stations are in the same group. Two things suggest this evidence of which station he rang should not be accepted. First, the conversation Mr Stephens had with Mr Stewart was about a local Newcastle identity whom Mr Stephens said was referred to in the Newcastle Herald. The likelihood that Mr Stephens was ringing a Sydney radio station about that is not high. Moreover, it is not apparent why a Sydney radio presenter would have a copy of the Newcastle Herald at 3.21am on the day of its publication. Secondly, in an email sent by Janene Micallef from Stacks to Mrs Stephens on 28 February 2011 she confirmed a conversation with Mrs Stephens where Mrs Stephens told her that her husband had rung 2HD. When Mrs Stephens replied to this email she did not deny that she had said that. Nor did Mrs Stephens, who was present at court, give evidence to deny she had said that, although an issue about it had clearly been raised in the cross-examination of Mr Stephens.
Is the Cross-Defendant liable?
In the present case the claim made on the Cross-Claim is a claim for contribution or indemnity on the basis of s 5 Law Reform (Miscellaneous Provisions) Act 1946. In order for 2HD to recover contribution or an indemnity from Mr Stephens not only must 2HD prove that it was a tortfeasor (Stott v West Yorkshire Road Car Co Ltd [1971] 3 All ER 534 at 537) but it must show that Mr Stephens is a tortfeasor. A cross-defendant has the right to assert that it was not a tortfeasor in reliance upon any defences that would be available to it when sued.
Mr Stephens accepted that what he said was defamatory of the Plaintiff and that saying that he thought the ABC should sack him was something that would hurt the Plaintiff. Accordingly, Mr Stephens is a tortfeasor referred to in s 5.
Mr Stephens' submission that he has somehow been prejudiced by the failure to join him to the proceedings before settling with the Plaintiff cannot be accepted. Mr Stephens submitted that the decision in Stott was authority for the point that a cross-defendant is unable to raise defences that it might have raised had it been joined earlier. In fact the decision is to the contrary. Salmon LJ said (at 538) when discussing the decision of the House of Lords in George Wimpey and Co Ltd v British Overseas Airways Corporation [1953] 2 QB 501:
The decision in that case really came to no more than this, that if one is seeking to bring in a third party, one cannot, by making use of the third party procedure, deprive him of a statutory defence which he might have had, had he originally been brought into the action as a defendant.
That is why Counsel for Mr Stephens was correct to abandon any reliance on Anshun.
It is necessary to consider, therefore, the two defences identified by Counsel for Mr Stephens.
(a)Comment
The defence of fair comment on a matter of public interest under the common law is essentially the same as the defence of honest opinion provided in s 31 of the Defamation Act 2005. That section relevantly provides:
31 Defences of honest opinion
(1)It is a defence to the publication of defamatory matter if the defendant proves that:
(a)the matter was an expression of opinion of the defendant rather than a statement of fact, and
(b)the opinion related to a matter of public interest, and
(c)the opinion is based on proper material.
...
(5)For the purposes of this section, an opinion is based on proper material if it is based on material that:
(a)is substantially true, or
(b)was published on an occasion of absolute or qualified privilege (whether under this Act or at general law), or
(c)was published on an occasion that attracted the protection of a defence under this section or section 28 or 29.
Certainly, it is likely that Mr Stephens would have been able to prove that what he said was an expression of an opinion and that it was one related to a matter of public interest. However, sub-s 5 requires that the opinion is based on proper material which (relevantly here) had to be material that was substantially true for the defence to succeed. The material was not true in any respect. The defence of honest opinion would not have been able to be made out even if it had been pleaded.
(b)Qualified privilege
The defence of qualified privilege is found in s 30 of the Defamation Act 2005. That section provides:
30 Defence of qualified privilege for provision of certain information
(1)There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that:
(a)the recipient has an interest or apparent interest in having information on some subject, and
(b)the matter is published to the recipient in the course of giving to the recipient information on that subject, and
(c)the conduct of the defendant in publishing that matter is reasonable in the circumstances.
(2)For the purposes of subsection (1), a recipient has an apparent interest in having information on some subject if, and only if, at the time of the publication in question, the defendant believes on reasonable grounds that the recipient has that interest.
(3)In determining for the purposes of subsection (1) whether the conduct of the defendant in publishing matter about a person is reasonable in the circumstances, a court may take into account:
(a)the extent to which the matter published is of public interest, and
(b)the extent to which the matter published relates to the performance of the public functions or activities of the person, and
(c)the seriousness of any defamatory imputation carried by the matter published, and
(d)the extent to which the matter published distinguishes between suspicions, allegations and proven facts, and
(e)whether it was in the public interest in the circumstances for the matter published to be published expeditiously, and
(f)he nature of the business environment in which the defendant operates, and
(g)he sources of the information in the matter published and the integrity of those sources, and
(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, and
(i)any other steps taken to verify the information in the matter published, and
(j)any other circumstances that the court considers relevant.
(4)For the avoidance of doubt, a defence of qualified privilege under subsection (1) is defeated if the plaintiff proves that the publication of the defamatory matter was actuated by malice.
(5)However, a defence of qualified privilege under subsection (1) is not defeated merely because the defamatory matter was published for reward.
It seems to me that the success or otherwise of this defence for Mr Stephens would turn on whether the publishing was reasonable in the circumstances. When I take into account the seriousness of the defamatory imputations carried by what was said (sub-s 3(c)) and weigh this against the source of the information in the matter published and the integrity of that source I do not consider that it could be said the conduct of the Cross-Defendant in publishing the matter was reasonable.
I note also what was said in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 574:
Whether the making of a publication was reasonable must depend upon all the circumstances of the case. But, as a general rule, a defendant's conduct in publishing material giving rise to a defamatory imputation will not be reasonable unless the defendant had reasonable grounds for believing that the imputation was true, took proper steps, so far as they were reasonably open, to verify the accuracy of the material and did not believe the imputation to be untrue.
Furthermore, the defendant's conduct will not be reasonable unless the defendant has sought a response from the person defamed and published the response made (if any) except in cases where the seeking or publication of a response was not practicable or it was unnecessary to give the plaintiff an opportunity to respond.
It cannot be said that Mr Stephens took any steps at all to verify the accuracy of the material. He simply accepted the word of a complete stranger he met at a truck stop. Whilst he may have honestly believed it (although the accompanying lie he told to Mr Stewart about having the newspaper might suggest otherwise) that belief cannot be sufficient. Needless to say, he did not seek a response from Mr Kearney first.
In my opinion no defence of qualified privilege would be made out even if it had been pleaded.
The delay button
Mr Stephens pleaded what might be regarded as defence of causation. He asserted that by failing to use the delay button it was 2HD that caused his words to be published.
For reasons I have given earlier when considering the evidence of both Mr Ashford and particularly Mr Stewart, nothing was said by Mr Stephens which required the use of that button. To the contrary, I accept Mr Stewart's evidence that when Mr Stephens indicated that he was reading from the front page of the paper which he had in front of him he regarded him as a legitimate caller and that what he said was correct.
In any event, to succeed on a defence of causation Mr Stephens would need to show that the failure to use the button was a novus actus interveniens. Particularly in the light of what he said about having the newspaper in front of him he fails in that regard. At best the failure to use the button, all other things being equal, was one of the causes of the defamation. What Mr Stephens said was also a cause.
Was the settlement reasonable?
When considering this matter (although it was not pleaded as a defence or as a matter in reduction of any verdict) it is relevant to consider whether Mr Stephens had the opportunity to participate in or comment upon the settlement negotiations.
On 19 August 2010, as noted above, Stacks wrote to Mr Stephens asking for his response before they either commenced proceedings against him or joined him in proceedings which they expected to receive from the Plaintiff. Mr Stephens did not respond to that letter.
Again, as noted earlier, Stacks wrote to Mr Stephens on 1 October 2010 informing him of the amount the Plaintiff was prepared to accept. I have highlighted the parts of that letter which clearly put Mr Stephens on notice of the negotiations and offered him the opportunity to take part in the settlement. Mr Stephens did not respond to that letter.
It was suggested by his counsel that he may not have received these letters. Three matters suggest otherwise. The two letters were tendered without objection from Mr Stephens. Both were correctly addressed to the Stephens' residence, and the October letter was sent by registered post. Secondly, no questions were asked of Mr Stephens by his counsel concerning the receipt or otherwise of these letters. I am entitled to draw a Jones v Dunkel inference that the asking of such a question would have exposed facts unfavourable to Mr Stephens: Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418. Thirdly, in the email from Janene Micallef of 28 February 2011 to Mrs Stephens, to which I referred earlier, Ms Micallef confirms a conversation she says she had with Mrs Stephens where Mrs Stephens (inter alia) confirmed receipt of the letters of 19 August 2010 and 1 October 2010. Mrs Stephens replied to that email but did not dispute what Ms Micallef asserted that she had said. Nor did Mrs Stephens give evidence at the hearing to dispute the receipt of the letters.
In my opinion there is no basis to the suggestion made on behalf of Mr Stephens that he had no opportunity to take any part of, or have any input into, the settlement negotiations. Moreover, the letters gave him adequate notice that proceedings were likely to be commenced so that he could have sought legal advice, if he had chosen to do so, about whether or not he should apply to be joined to the proceedings, if they were commenced only (as indeed they were) by the Plaintiff against 2HD.
Counsel for Mr Stephens agreed that the amount of the settlement moneys paid to the Plaintiff ($35,000) was reasonable. However, he submitted that the legal fees were not reasonable. In particular he submitted that legal fees paid to Hazaan Hollander of some $38,000 up to the filing of a Statement of Claim were not reasonable. Further, counsel submitted that the legal fees incurred by 2HD were excessive because of the amounts expended pursuing Mr Ashford's conspiracy theory.
What is significant when considering the reasonableness of the settlement is that in the letter of 1 October 2010 Stacks informed Mr Stephens that the Plaintiff was willing to accept $50,000 inclusive of costs before commencing proceedings. The letter went on to point out to Mr Stephens that if the matter settled for $50,000 inclusive of costs Stacks did not believe that any judge would say that that sum was not reasonable.
No explanation was provided for why 2HD did not agree to settle the proceedings for that amount of money. Given that the Plaintiff engaged solicitors shortly after the broadcast an offer to settle for $50,000 inclusive of costs was a very reasonable sum.
The failure to settle at that time resulted in proceedings being commenced with an interlocutory dispute concerning the imputations, a dispute which was determined partly against 2HD. By that stage no defence had been filed, and it appears that the decision of Nicholas J to refuse to strike out some of the imputations led to the settlement for a figure more than what 2HD could have settled for in October 2010.
In my opinion, the starting point for considering what contribution Mr Stephens should make should be the sum of $50,000 plus 2HD's legal costs and not the figure of $106,360.56 or the figure of $69,836.97.
What contribution should the Cross-Defendant make?
The contribution to be apportioned between tortfeasors is such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage (s 5 Law Reform (Miscellaneous Provisions) Act 1946; and see Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492 at 494).
In my opinion only one thing relieves Mr Stephens of being required to pay the whole of the $50,000 plus 2HD's legal costs. Radio stations which employ the talkback format doubtless obtain considerable benefit from such programs which is derived from the cost of producing such programs set against the ratings and concomitant advertising revenue which flows to them. These stations must be aware that all sorts and conditions of persons are likely to ring them. In saying what they do to the presenter some will be venal, some will be stupid, some will be reckless. But the station makes the medium for publication available and must be considered to have taken the risk that, from time to time, things will be said that will result in a liability being incurred by the station.
This conclusion is not inconsistent with my finding that it was reasonable for Mr Stewart not to have used the delay button. It does not involve a finding of any wrongdoing (whether in a tortious sense or otherwise) on Mr Stewart's part. 2HD must share some responsibility simply as a result of enabling the publication by the talkback format.
Nevertheless the major responsibility must be apportioned to Mr Stephens. If he had not lied about having the newspaper in front of him and asserting that what he was about to say was on the front page I have little doubt that the conversation would not have gone to air. In my view he should bear 80% of the $50,000 plus 2HD's legal costs.
It must next be determined what the appropriate figure is for legal costs. 2HD first retained Banki Haddock Fiora. That firm seems to have acted until about August 2010 when Stacks were retained. The Cross-Claimant paid fees to Banki Haddock Fiora of $5,495.24. There was no evidence to suggest (as Mr Stephens submitted) that these costs were increased by Mr Ashford's pursuit of his conspiracy theory. To the extent that costs were incurred in tracking down who made the call I consider they were legitimately incurred.
A number of tax invoices from Stacks to 2HD were in evidence. The first of these detailed fees up to 8 December 2010 totalling $7,671.40. The invoice included $2,750 for Counsel's fees. It is apparent from the first invoice that Counsel was not briefed until October 2010. By that time Mr Stephens had been told by Stacks in their letter of 1 October that the Plaintiff was prepared to settle for $50,000 inclusive of costs. When 2HD was informed of that offer was not made clear. The Plaintiff commenced proceedings on 3 October.
Although Mr Stephens did not respond to the letter of 1 October there was no evidence that 2HD delayed settling the matter because of Mr Stephens' silence.
Deducting Counsel's fees of $2,750 from the total of the invoice leaves $4,921.40. Approximately half of the solicitors' time charged for in the invoice was in respect of the period up to 5 October 2010. There were some disbursements incurred. If 2HD had settled the matter shortly after 1 October 2010 for $50,000 inclusive of costs I consider a fair figure for the 2HD's costs to the conclusion of the matter to be $3,000 for Stacks and $5,495 for Banki Haddock Fiora - a total of $8,495. Mr Stephens should not have to bear Stacks' costs incurred after that time.
Accordingly, the amount of the contribution that Mr Stephens should pay 2HD is $46,796 ($50,000 + $8,495 = $58,495 x 80%). Interest is payable from the date of payment of the settlement figure by 2HD.
Deceit
2HD asserts that Mr Stephens is also liable in deceit because he made false representations to Mr Stewart and 2HD. 2HD submits that if this is found the measure of damages is the whole of 2HD's loss and not simply a contribution to it.
The difficulties with this cause of action can first be identified in the pleading of it by 2HD. Paragraph 11 of the Cross-Claim says:
Further and in addition the Cross-Defendants knowingly made false representations of and concerning the Plaintiff which said representations are set out in the Schedule 'A" and attributed to "Caller" and are set out in the imputations pleaded in the Statement of Claim.
The representations are not precisely identified. There is no pleading that Mr Stephens intended that 2HD would act upon the representations nor any pleading that 2HD did in fact act in reliance on those representations to take some action or refrain from taking some action. These are essential elements of the tort: Edgington v Fitzmaurice (1885) 29 Ch D 459 at 482; Commercial Banking Co of Sydney Ltd v RH Brown & Co (1972) 126 CLR 337 at 343.
These are not technical points. In submissions 2HD said that the representation on which it acted was the statement Mr Stephens made that he was reading from the Newcastle Herald. It was that statement, 2HD submitted, that resulted in Mr Stewart not hitting the delay button. It is difficult to see how that statement is a "false representation of and concerning the Plaintiff".
Moreover, as far as the false representations about the Plaintiff are concerned, namely, his being convicted of drunk driving for the third time, Mr Stephens' evidence was that he honestly believed it was true because of what he had been told. Although, as I said earlier, the lie Mr Stephens told about having the paper in front of him might suggest that he did not honestly believe what he had been told about the Plaintiff, the whole tenor of the conversation with Mr Stewart suggests that he did honestly believe what he had been told. His whole concern was to see that something should be done regarding the Plaintiff, principally to get him off the air. Whilst his methodology was entirely misplaced (he couldn't explain what he thought 2HD could do about the Plaintiff) the matters he expressed to Mr Stewart point to someone who did believe what he was saying rather than someone who was maliciously spreading information he knew to be false.
He was asked if there was any particular reason that he said the newspaper was in front of him. He said:
Not really. In the past I have rung radio stations and I've been told, you heard it from Gary, you heard it from Bill. They don't take thirdhand information. I don't have an explanation except to say I just said it. I believed it was true. I had no reason to doubt it was true. The bloke who told me was convinced, I believed him.
I accept this part of Mr Stephens' evidence. It is consistent with what I concluded about him, that he is a man who speaks and acts without thinking of the consequences. Apart from his call to Mr Stewart, his subsequent email to Mr Ashford, copied to the advertisers, is support for that conclusion.
Mr Stephens did not intend to mislead Mr Stewart or 2HD about the Plaintiff.
The claim in deceit fails.
Conclusion
I make the following orders:
(1) Judgment for the First Cross-Defendant on the Cross-Claim.
(2) Judgment for the Cross-Claimant against the Second Cross-Defendant in the sum of $46,796 together with interest thereon.
(3) The Second Cross-Defendant is to pay the Cross-Claimant's costs of the Cross-Claim.
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Decision last updated: 27 July 2012
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