Kingsfield Holdings Pty Ltd v Rutherford
[2016] WASC 117
•11 APRIL 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: KINGSFIELD HOLDINGS PTY LTD -v- RUTHERFORD [2016] WASC 117
CORAM: KENNETH MARTIN J
HEARD: 11, 12 & 20 NOVEMBER 2015
DELIVERED : 11 APRIL 2016
FILE NO/S: CIV 1106 of 2013
BETWEEN: KINGSFIELD HOLDINGS PTY LTD
Plaintiff
AND
IVAN RUTHERFORD
Defendant
FILE NO/S :CIV 1147 of 2013
BETWEEN :JEFFREY STEWART LEE
Plaintiff
AND
IVAN RUTHERFORD
Defendant
Catchwords:
Tort - Defamation - Slander - Publication - One hearer - True/legal innuendos - No republication - Meanings - Identification - Corporate plaintiff - Excluded corporation - Qualified privilege - Community of interest - Malice - Triviality defence - Damages
Legislation:
Defamation Act 2005 (WA), s 30, s 33, s 34
Result:
Actions dismissed
Category: A
Representation:
CIV 1106 of 2013
Counsel:
Plaintiff: Mr M L Bennett
Defendant: Mr M C Goldblatt
Solicitors:
Plaintiff: Bennett + Co
Defendant: Lawton Gillon
CIV 1147 of 2013
Counsel:
Plaintiff: Mr M L Bennett
Defendant: Mr M C Goldblatt
Solicitors:
Plaintiff: Bennett + Co
Defendant: Lawton Gillon
Case(s) referred to in judgment(s):
Adam v Ward [1917] AC 309
Ali v Nationwide News Pty Ltd [2008] NSWCA 183
Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225
Australian Broadcasting Corporation v Comalco Ltd (1986) 12 FCR 510
Barclay v Cox [1968] VR 664
Barrow v Bolt [2014] VSC 599
Barrow v Bolt [2015] VSCA 107
Birmingham v West Australian Newspapers Ltd [1999] WASC 19
Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369; (2014) 88 NSWLR 421
Bowman v MGN Ltd [2010] EWHC 895
Campbell v Wilson [1934] SLT 249
Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519
Channel Seven Sydney Pty Ltd v Parras [2002] NSWCA 202
Chappell v Mirror Newspapers Ltd (1984) A Tort Rep 68,947
Chu Siu Kuk Yuen v Apple Daily Ltd [2002] 1 HKLRD 1
Cleese v Clarke [2003] EWHC 137 (QB)
David Syme & Co v Canavan [1918] HCA 50; (1918) 25 CLR 234
Enders v Erbas & Associates Pty Ltd [2014] NSWCA 70
Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 221 ALR 186
Fraser v Holmes [2009] NSWCA 36; (2009) 253 ALR 538
Gumina v Williams [No 1] (1990) 3 WAR 342
Gumina v Williams [No 2] (1990) 3 WAR 351
Haji-Ioannou v Dixon [2009] EWHC 178 (QB)
Hall v Mostyn (Unreported, NSWSC, 18 March 1983)
Hill v Taylor (Unreported, NSWSC, 25 November 1983)
Hockey v Fairfax Media Publications Pty Ltd [2015] FCA 652
Jneid v West Australian Newspapers Ltd [2015] WASC 68
John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2006) 230 CLR 291
Jones v Sutton [2004] NSWCA 439; (2004) 61 NSWLR 614
King & Mergen Holdings Pty Ltd v McKenzie (1991) 24 NSWLR 305
Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2013] WASC 347
Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [No 2] [2014] WASC 408
Knupffer v London Express Newspapers Ltd [1944] AC 116
Lewis v Daily Telegraph Ltd [1964] AC 234
Lucas-Box v News Group Newspapers Ltd [1986] 1 WLR 147; [1986] 1 All ER 177
Maher v Nationwide News Pty Ltd [2013] WASC 254
McCarey v Associated Newspapers Ltd [1965] 2 QB 86; [1965] 2 WLR 45
Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293
Moran v Schwartz [No 5] [2016] WASC 67
Morgan v Odhams Press Ltd [1971] 1 WLR 1239
Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
Papaconstuntinos v Holmes á Court [2012] HCA 53; (2012) 249 CLR 534
Perkins v New South Wales Aboriginal Law Council (Unreported, NSWSC, No 11262 of 1991, BC 9708048, 15 August 1997)
Polly Peck (Holdings) Plc v Trelford [1986] QB 1000
Prefumo v Bradley [2011] WASC 251
Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; (2009) 238 CLR 460
Rambal v Cahill [2012] WASC 353
Rayney v Pan Macmillan Australia Pty Ltd [2014] WASC 129
Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500
Royal Antediluvian Order of Buffaloes Grand Lodge of Western Australia Under the Grand Lodge of England Inc v Spencer (Unreported, WASC, Library No 6592, 6 February 1987)
Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348
Szanto v Melville [2011] VSC 574
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331
Universal Communication Network Inc t/as New Tang Dynasty v Chinese Media Group (Aust) Pty Ltd [2008] NSWCA 1
Table of contents
Introduction
Findings as to relatively uncontroversial facts
General
Mr Ivan Rutherford (the defendant)
Mr Peter Duffield
The Wellness Centre: Jeff Lee, Susan Howard and Kingsfield Holdings Pty Ltd
The Rottnest Island meeting of Tuesday 31 January 2012 between Mr Rutherford and Mr Duffield
The 15 Spoken Words
The Duffield Letter of Tuesday, 31 January 2012
Text of the Duffield Letter of 31 January 2012
Kingsfield's lease from the RIA of its Wellness Centre premises
Seven features of the Spoken Words complained of: in the defamation context
Identification
General
Identification: Legal principles
Conclusions on Identification
Three alleged innuendo meanings of the 15 Spoken Words
The trial evidence: limited areas of factual disputation
General principles, defamation
Application of legal principles as to meanings for the current imputations of the plaintiffs
Trial witnesses generally
Some specific problems with Mr Lee's trial evidence
Chronological findings (23 January 2012 - 12 June 2014)
Ancient history: old incidents advocated as relevant by the plaintiffs
The early closure issue: factual determination concerning the operation of Quokka Joe's Café in the aftermath of its inspection by two inspectors of the health department at around 1.00 to 2.00 pm on Monday, 23 January 2012
The three innuendos said to arise from Mr Rutherford's Spoken Words
My assessment of three imputations sought to be extracted
Imputations (a) and (b)
Imputation (c)
The true innuendo extrinsic evidence
The defamatory meanings - further discussion and conclusions
The defendant's invocation of qualified privilege at common law and s 30 of the Defamation Act
Common law qualified privilege
Statutory qualified privilege
Mr Rutherford's alleged malice: qualified privilege implications
Defamation Act s 33: Defence of triviality
Plaintiffs' concluding Chakravarti submission
Injurious falsehood
Sensitivity of a defamation plaintiff
Damages: s 34 Defamation Act
Aggravated damages
Overall conclusions
KENNETH MARTIN J:
Introduction
Summer holidays on Rottnest Island are a fond memory for many West Australians. However, there is nothing pleasant about this defamation litigation, which is brought over 15 words (the Spoken Words) uttered on Rottnest Island in late January 2012. The words were spoken briefly by the defendant in a conversation with one person.
Nevertheless, the Spoken Words have given rise to these two defamation actions, which are separately pursued by the related plaintiffs, over the same words.
The plaintiff in the first action (CIV 1106 of 2013) is the corporation, Kingsfield Holdings Pty Ltd (Kingsfield). The plaintiff in the second action (CIV 1147 of 2013) is Kingsfield's sole director and shareholder, Jeffrey Lee (Mr Lee). Neither plaintiff was expressly named by the Spoken Words, which mentioned only Quokka Joe's Café.
Quokka Joe's Café was a reference to a café business located in the settlement area of Rottnest Island in January 2012.
The two actions over the same words were commenced in January 2013, at different times. Their trials have been heard together.
The sole defendant to both actions, Ivan Rutherford (Mr Rutherford), accepts that he spoke the 15 Spoken Words complained about to the one person, Mr Peter Duffield (Mr Duffield), at Rottnest Island in January 2012.
The words Mr Rutherford spoke to Mr Duffield were these:
Quokka Joe's Café had been closed following a health inspection of the café last week.
Mr Rutherford defends both these defamation actions on the basis, he:
(a)denies his Spoken Words identified Mr Lee (but he accepts that Mr Duffield, as the one person who heard the words, held a level of personal knowledge, enabling Mr Duffield to understand the words as being directed at the corporation Kingsfield, which Mr Duffield knew was the business owner and operator of Quokka Joe's Café).
(b)denies his Spoken Words to Mr Duffield were capable of carrying any of, in effect, three allegedly defamatory, alternative meanings - which both plaintiffs (with some minor adjustments) argue arise from them. The three alternative meanings alleged are challenged by Mr Rutherford as being wholly untenable, either as natural and ordinary meanings of the Spoken Words (ie, as false or popular innuendos) or, even by an augmentation to the Spoken Words of some extra aspects of Mr Duffield's personal knowledge, as the one person who heard the Spoken Words (ie, as true or legal innuendo meanings). The three meanings of the Spoken Words complained of by the plaintiffs are these:
(1)that Kingsfield (and Mr Lee) so recklessly mismanaged Quokka Joe's Café, by being indifferent as to the safety of the public, as to warrant Quokka Joe's Café being closed down by the health authorities;
(2)that Kingsfield (and Mr Lee) so negligently mismanaged Quokka Joe's Café, by failing to take proper care for the safety of the public, as to warrant Quokka Joe's Café being closed down by the health authorities;
(3)that Kingsfield was unfit to conduct a café or similar business (or as he distinctly alleges concerning himself in his action, that Mr Lee personally was unfit to be in charge of a café or similar business).
(c)says, further and alternatively, that if any of those alleged defamatory meanings could be proven as arising from out of his Spoken Words (howsoever derived), Mr Rutherford would then in defence invoke the protections of (both common law and statutory) qualified privilege as, in effect, a defamation shield (but against which both plaintiffs in turn then respond, to argue for the existence of malice in Mr Rutherford, in order to defeat his claimed qualified privilege shield against defamation).
(d)says, alternatively yet again, that he would invoke a distinct and further defamation defence shield, this time arguing for a scenario of statutory triviality, arising from s 33 of the Defamation Act 2005 (WA), and contending here, that the 'circumstances of publication', were such that the plaintiffs were 'unlikely to sustain any harm'.
Those issues present as the fundamental areas of controversy in the two trials. With this in mind, I turn to the underlying facts.
Findings as to relatively uncontroversial facts
The following relatively uncontentious facts, as I shall relate below, are found by me upon all of the trial evidence.
General
On the last day of January 2012, two men who knew each other professionally, met coincidentally one morning and had an outdoors conversation at the settlement area on Rottnest Island. No‑one else was present.
One of the men, the speaker, was the defendant, Ivan Rutherford.
Mr Rutherford was and is a long‑term business proprietor, who has been associated with various retail businesses operating on Rottnest Island across a more than 40 year period of business association with Rottnest. At the time of the conversation he was approximately 71 years of age.
The other participant in the conversation was Peter Duffield. Mr Duffield was and remains a director of Sullivan Commercial Pty Ltd, which trades as McGees Property (McGees).
Since around 2006, McGees had been appointed and acted as a commercial property and leasing agent, engaged by the Rottnest Island Authority (the RIA).
The RIA is a statutory body, established under the Rottnest Island Authority Act 1987 (WA) s 5. The RIA controls and manages Rottnest Island, which is a reserve (No 16713), in the records of the Department of Land Administration: see Rottnest Island Authority Act s 4.
Both Mr Rutherford and Mr Duffield, on 31 January 2012, had travelled to Rottnest Island from the mainland by ferry, on their separate businesses for that day.
Mr Ivan Rutherford (the defendant)
Mr Rutherford took the ferry from the mainland to Rottnest Island on 31 January 2012 to attend to routine matters of business on the Island. The day trip was in way of his routine managerial oversight of two Rottnest based businesses with which he was then associated, through a corporation, Abellio Pty Ltd (Abellio). This was a corporation in which Mr Rutherford was both a director and the dominant shareholder.
Mr Rutherford, in 2012, had been associated with the operation of retail businesses on Rottnest Island then, for approximately 40 years.
The retail businesses Mr Rutherford was attending the Island to visit that day were the Rottnest Bakery and a nearby food outlet, then known as the Rottnest Café (being the former Red Rooster premises).
The two Abellio owned businesses operated from separate retail locations at the settlement area of the Island, under lease agreements either with the RIA, or were leased premises assigned to Abellio with the consent of the RIA.
The two businesses in 2012 were being managed and run for Abellio on the Island by Mr David Henderson and his wife, Samantha. In that role, the Hendersons then lived in situ on the Island.
It was Mr Rutherford's managerial practice to travel from the mainland to the Island at least once, or sometimes twice weekly in the high season on Rottnest. He would meet with the on‑location Abellio business managers, deal with any issues arising concerning the businesses' day-to-day operations and, importantly, collect the businesses' takings for banking purposes.
In 2012, Mr Rutherford was also then a longstanding member of the Rottnest Island Business Community Inc (the RIBC). This incorporated association subsequently became known as the Rottnest Island Chamber of Commerce (the RICC).
Mr Rutherford served as the Chair of the RIBC, at various times across his long retail connection with the Island's business community. His uncontradicted evidence was that he 'most probably' was serving as the RIBC's chair at this time: see ts 183. I will accept that to be the case, at 31 January 2012.
The RIBC, as an incorporated non-profit association, existed to further the interests of the private business owner retail community on Rottnest Island.
By about early morning on Tuesday, 31 January 2012, Mr Rutherford was at the Island. He had been attending to his routine business issues for Abellio, including meeting and speaking with Mr and Mrs Henderson, at either the Rottnest Bakery or at the Café, in the settlement area.
At some point during the morning, still relatively early, Mr Rutherford ventured outdoors. Somewhere proximate to the front of the location of a Subway fast food retail outlet in the settlement area vicinity, he met up with Mr Peter Duffield, who was known to Mr Rutherford, professionally.
Mr Rutherford was familiar with Mr Duffield from some past Rottnest Island related business dealings. Mr Duffield had represented the interests of the RIA. But Mr Duffield, in the past, had also acted as an appointed agent for Mr Rutherford's interests on the sale of one of Mr Rutherford's related businesses, the Red Herring restaurant, in around 2011.
The outdoors encounter that morning between the two men was not pre‑arranged. Mr Duffield was walking around the settlement area on his own business, as I relate separately. I find that the two men met wholly by chance that day. They were not social friends. Their working business relationship was cordial, but entirely professional. They chatted on this occasion, sitting down together outside in the settlement area.
A brief conversation ensued. No notes were made by either man. Part of what was spoken (the 15 Spoken Words by Mr Rutherford set out earlier - which are not in dispute) by Mr Rutherford to Mr Duffield in their conversation, provides the edifice of both defamation actions brought by Kingsfield and by Mr Lee personally against Mr Rutherford for damages to their respective reputations.
Mr Peter Duffield
Mr Duffield had also travelled from Fremantle to Rottnest Island by the morning ferry for his own business purposes, on 31 January 2012.
As a part of the agent's commercial leasing responsibilities through McGees to the RIA, Mr Duffield would usually travel across by ferry to the Island from the mainland, at least twice a month. This was a routine visit for January 2012.
It was Mr Duffield's practice to catch the early ferry to Rottnest from Fremantle. After disembarking, he would have a general walk around, by way of conducting a general 'bird's eye' view of the shops and retail premises at the settlement area. Most or all these business premises operated under leases granted to their owners by the RIA as lessor. In respect of all those tenancies, Mr Duffield would need to address the general commercial leasing issues which would arise invariably from time to time. He would then report to the RIA regularly.
As was his usual practice, Mr Duffield this last day in January 2012 went first to the Dome Café at the settlement area on the Island for a coffee. Afterwards he walked around the settlement area for a general look‑see at the various retail leased premises, paying particular attention, as he said he always did (because signage could be an issue), to outside signage.
On that day's walk around, Mr Duffield encountered Mr Rutherford.
This was in the vicinity of the Subway outlet, at the settlement area. The two men sat down outside and their conversation followed. The key words of the conversation, including the Spoken Words, were uttered by Mr Rutherford, as Mr Duffield listened.
The Wellness Centre: Jeff Lee, Susan Howard and Kingsfield Holdings Pty Ltd
Before further discussing aspects of the critical Rutherford/Duffield conversation of Tuesday, 31 January 2012 at Rottnest, it is necessary to mention a further group of persons at Rottnest Island and their allied retail shops and business establishments, also operating around the settlement area of Rottnest Island, as at January 2012. This was a group of four retail outlets, known together as the Wellness Centre.
The Wellness Centre at Rottnest Island began operating commercially in November 2006. That was after a period of premises construction had been undertaken and completed.
The corporate plaintiff in CIV 1106 of 2013, Kingsfield, is a lessee from the RIA, of the location and premises which became the Wellness Centre. Kingsfield, in January 2012, operated four businesses from that premises.
At the Wellness Centre during January 2012 there were four distinct shops or operating business outlets of Kingsfield, namely:
(a)a pharmacy business, trading as the Rottnest Island Pharmacy. The specialist pharmacy services were provided by Kingsfield's sole director and shareholder, Mr Jeffrey Lee. Mr Lee is a fully qualified and registered pharmacist;
(b)a hairdressing business, trading as 'Hair on Sommerville';
(c)a beauty and massage clinic, trading as the 'Butterfly Dreaming Retreat'. This business was operated by a massage therapist. There was also, from time to time, a beauty therapist in attendance; and
(d)a healthy food themed café, trading under what was a registered business name, 'Quokka Joe's Delicious Wholesome Food'. Given an irrepressible Australian penchant for abbreviation, this retail food outlet business, operating within the Wellness Centre, soon came to be referred to as 'Quokka Joe's Café, or sometimes, more simply, as 'Quokka Joe's'.
The sole director and shareholder of the corporation Kingsfield in 2012 was, and still today remains, the plaintiff in the second defamation action, CIV 1147 of 2013, Mr Lee.
Mr Lee is a person highly and uniquely qualified, professionally. He is not only a registered pharmacist, but is also a qualified lawyer and admitted legal practitioner in Western Australia.
Mr Lee is the principal of a law practice, trading as Avedon Lee. This law practice was, and is, operated solely by Mr Lee from out of his residence, in Princess Road, Claremont, a western suburb of Perth. That Claremont location is actually owned by the corporation Kingsfield.
As a registered pharmacist, Mr Lee was the person responsible for the running and operating of the Rottnest Island pharmacy business of the Wellness Centre, for Kingsfield. In that operational respect, he was assisted at the pharmacy business on a daily basis by his long-term de facto partner, Ms Susan Howard.
Ms Howard describes herself, as does Mr Lee, as being Mr Lee's business partner. They are clearly a team, although she is not an appointed director of Kingsfield. Nor is she a shareholder of Kingsfield.
Ms Howard's personal input, however, by way of her labours and contributions to business management, by an 'on the ground presence', undoubtedly rendered a significant contribution to the operation of Kingsfield's businesses at the Wellness Centre. Given Mr Lee's required professional commitment to the operation of the pharmacy at the Wellness Centre, Ms Howard described herself as the manager (ts 153) of Quokka Joe's Café. I find that is an apt description of her role for Kingsfield, in connection with the running of that healthy food themed outlet.
Apart from their Claremont residence on the mainland, Mr Lee and Ms Howard also had for their professional use at the time an allocated domestic residence on Rottnest Island. But they would commute from there to the mainland between residences, in effect, frequently.
Ms Howard divided her time between helping out Mr Lee in the pharmacy business as his assistant, but also providing as well her supervisory and managerial input in respect of the operations of the proximate Quokka Joe's Café business in the Wellness Centre. Her work there included the serving of customers, cooking, ordering provisions and the general managing and training of the Café's staff, as was required.
Mr Lee would also lend his hand to the day to day running of Quokka Joe's in whatever capacity was required, at times when he was not otherwise committed at the pharmacy. The family run work arrangements between the four Wellness Centre businesses were characterised by informality, proximity, flexibility and need, depending on patronage and especially the time of the year on Rottnest Island.
Neither Mr Lee nor Ms Howard would identify themselves as 'employees' of Kingsfield, as regards the four businesses conducted at the Wellness Centre in 2012. So much may be accepted, on the basis of their managerial positions, with their work across the business being executive and supervisory in part (over other employees), albeit on occasions 'hands on' when required.
The hairdressing salon in the Wellness Centre was operated for Kingsfield by a qualified hairdresser, who would travel to the Island from time to time, when arranged. Mr Lee or Ms Howard would oversee this, for Kingsfield.
The massage and beauty clinic business was staffed by one massage therapist and a beauty therapist (employed by Kingsfield).
The Quokka Joe's business of Kingsfield normally employed a chef and two other staff, above the 'hands on' inputs from Mr Lee and Ms Howard. However, obtaining suitable and reliable staff to travel to and work at Quokka Joe's on Rottnest Island was explained by Mr Lee and Ms Howard at the trial as being something of an ongoing problem for this retail business. I accept as plausible their evidence that the sourcing and retaining of reliable staff for a Rottnest Island retail business, was a problem in January 2012.
The number of employees actually engaged by Kingsfield during January 2012, is a significant issue in the Kingsfield defamation action. The issue arises in the context of that corporation needing to satisfy the definition of being an 'excluded corporation', under s 9(2)(b) of the Defamation Act to hold a viable cause of action in defamation as a corporation. That provision sets a limit for a corporation in order to be an 'excluded corporation' of it employing fewer than 10 persons, plus a requirement of the corporation not being 'related to' another corporation. Those requirements are imposed in order for the corporation to be able to lawfully pursue a cause of action in defamation, in relation to the publication of defamatory matter concerning the corporation: see s 9(1) of the Defamation Act. Otherwise trading corporations were excluded from pursuing defamation actions under the uniform defamation laws made applicable across Australia from 2006.
Kingsfield says it was an excluded corporation by it having fewer than 10 employees, in January 2012. I accept that to be the case as a matter of fact.
The Rottnest Island meeting of Tuesday 31 January 2012 between Mr Rutherford and Mr Duffield
It is agreed, in consequence of the respective pleadings exchanged in both actions, that in late January 2012 (as I have indicated earlier and as I will explain further, finding that it was on Tuesday, 31 January 2012), that Mr Rutherford uttered his 15 Spoken Words that I have earlier set out. This, as mentioned, was solely to Mr Duffield during their outdoors conversation at the settlement area at Rottnest Island that morning.
I note, in that respect, the state of the pleadings at par 2 of Kingsfield's further re‑amended statement of claim of 25 September 2015 (FREASOC), and par 3 of Mr Lee's further re‑amended statement of claim of 25 September 2015 (FREASOC). Both pleas are respectively admitted under par 2 of Mr Rutherford's defence (further re‑amended substituted defence) of 23 September 2015 to the Kingsfield action and par 3 of Mr Rutherford's re‑amended substituted defence of 23 September 2015 to Mr Lee's action.
The 15 Spoken Words
As mentioned, the Spoken Words complained of, uttered by Mr Rutherford to Mr Duffield that Tuesday morning, are the cornerstone of both defamation actions. They are agreed as being, as we have now seen:
Quokka Joe's Café had been closed following a health inspection of the café last week.
Given the parties' agreement, by their respective pleadings concerning these precise Spoken Words, there was only minimal contextual elaboration about the lead-up to them at the trial, concerning the Rutherford/Duffield conversation. Nor was there much context or elaboration concerning how the conversation had begun and ended on the day.
Consequently, the surrounding landscape for the conversation presents, at the end of the day, as a little artificial or sterile. There is, as a result, a level of surrounding vagueness about what other topics of conversation were canvassed in the conversation between the two men that morning.
However, I am satisfied from Mr Duffield's evidence that it is likely that some other commercial issues concerning the Abellio businesses associated with Mr Rutherford, were raised as well. But there is little more detail than that, towards what otherwise would appear to be a relatively brief morning conversation between the two men on 31 January 2012.
After their conversation, Mr Duffield resumed his walk and inspection around the settlement area. He then completed his business for the day at the Island and caught the ferry back to the mainland.
Mr Duffield collected his car at Fremantle and drove back to his (McGees) business premises in West Perth.
The Duffield Letter of Tuesday, 31 January 2012
Back at his office in West Perth, Mr Duffield, as a matter of his disciplined business practice, immediately attended to his list of matters arising out of that day's visit to Rottnest Island. In that respect, he dictated at least two letters.
One of the dictated letters was to Kingsfield. It was duly typed up and sent out this same day, in the post.
The letter bears on its face a date of 31 January 2012. I set this letter out in full a little later in the reasons. I will generally refer to it as the Duffield Letter. It was actually signed for Mr Duffield by his assistant, that day.
Mr Duffield's evidence on this topic, which I accept, was that this letter was dictated, typed up, signed (by his assistant) and sent out in the post - all on the same day he had travelled to the Island and participated in the conversation with Mr Rutherford.
Mr Duffield's evidence and the Duffield Letter itself enables me to fix the date of the morning conversation with Mr Rutherford at Rottnest Island with reliability, as being Tuesday, 31 January 2012.
Mr Rutherford was the only other trial witness who could give direct evidence about the date of this conversation. He was less certain about the date. Indeed, his defence pleadings contend, at the paragraphs I have already mentioned, towards the conversation taking place on Monday, 30 January 2012. But Mr Rutherford was personally unsure in his evidence at the trial about the precise date. In contrast, Mr Duffield's evidence was firm on the point.
Consequently, I am able to fix the key Rutherford/Duffield conversation as happening the same day as the endorsed date as seen on the face of the Duffield Letter, being (Tuesday) 31 January 2012.
The Duffield Letter was once, but is no longer, complained about by Kingsfield and Mr Lee as being a defamatory publication against them in its own right. But those proceedings (see CIV 1146 of 2013) are resolved and at an end.
The Duffield Letter is not argued in these two actions to be any kind of a republication - of any of the three core defamatory imputations complained of from the Spoken Words. Nor could it be - as will be apparent once its terms are examined.
Nevertheless, the Duffield Letter is of considerable surrounding forensic significance within the overall litigation. It is the basis upon which Mr Lee, when he opened the Duffield Letter from the post, as he did a day or so after it was mailed, first learned of information having been relayed to Mr Duffield by a source (then unidentified) concerning Quokka Joe's Café having been 'closed'.
Matters escalated dramatically from that point, as we will see.
It took Mr Lee some months after opening and reading the Duffield Letter to Kingsfield on 1 or 2 February 2012 to satisfy himself as to the person(s) who had actually been the source, or sources, of Mr Duffield's information underlying that communication.
Text of the Duffield Letter of 31 January 2012
The Duffield Letter displays the letterhead of McGees Property.
It is seen to be dated, as I mentioned, 31 January 2012. It was addressed to the plaintiff in CIV 1106 of 2013, Kingsfield Holdings Pty Ltd, (redacted) Princess Road, Claremont, WA, 6010, Attention Mr Jeff Lee. The letter read:
Dear Sir
RE WELLNESS CENTRE - QUOKKA JOE'S, ROTTNEST ISLAND
We refer to the above and advise that we have been advised that the Café has been closed following a Health Inspection of the premises last week.
In accordance with clause 10.1(6) of the Lease Agreement please confirm (or otherwise) the inspection and forward a copy of any Health Notices issued for the premises.
Should you have any further queries regarding this matter please contact the writer.
Yours faithfully
McGees Property
P A Duffield
Director - Commercial Department
(and bearing a longhand signature indorsement of Mr Duffield's Personal Assistant). Clearly, a publication communicated solely to the party claiming to be defamed by it will be insufficient in law to found a viable cause of action under the tort of defamation. There can be no reputational damage or injury from such a quarantined communication.
But a copy of this letter was noted as being sent as a 'cc' to the RIA, attention Mr Richard Jeffcote, Manager Works and Contract Services.
There was a minor factual issue about whether or not the cc copy of the Duffield Letter, sent in the post on 31 January 2012 ever actually reached Mr Jeffcote at the RIA, as will emerge.
But in the end, issues relating to Mr Jeffcote's receipt or otherwise of a copy of the Duffield Letter sent that day now matter very little. This is because the Duffield Letter is not argued (nor could it be ever sensibly be suggested) to carry or to republish any of the (three) defamatory imputations that are said to arise under the Spoken Words as complained of by Kingsfield and Mr Lee.
Kingsfield's lease from the RIA of its Wellness Centre premises
Since it is referred to expressly in the Duffield Letter to Kingsfield, it is convenient at an early point to explore the precise content of cl 10.1(6) of the lease as between the RIA and Kingsfield, bearing the date 3 May 2006 (exhibit 1.1.2, TB page 94). This is the source of the provision in the lease that Mr Duffield was relying upon in his request to Kingsfield for information in the Duffield Letter.
The RIA's lease to Kingsfield is in respect of the Wellness Centre premises. This is the location of the four retail outlets of Kingsfield, one of which was Quokka Joe's.
Clause 10.1(6) in that lease provides:
Obligations
The tenant must:
…..
(6)promptly give the Landlord a copy of every notice from any Authority received by the Tenant relating to the Premises; and…
The word 'Authority' is defined in cl 1.1(3) of this same Lease Agreement (unless otherwise stated) as:
'Authority' includes any governmental or public authority of any kind including the landlord acting in accordance with its powers and duties under the Rottnest Island Authority Act 1987.
Seven features of the Spoken Words complained of: in the defamation context
Before discussing further facts, I need to pause to highlight what can now be seen as seven emerged and rather unique features, surrounding the Spoken Words as they are complained of by each plaintiff from a defamation perspective.
The 15 words are argued to carry the three defamatory natural and ordinary meanings or, alternatively, the same meanings as legal (true) innuendo meanings, being said to be defamatory meanings damaging to the reputations, so it is put, of both plaintiffs. I note the following seven features.
First, it is (only) the Spoken Words heard by Mr Duffield on 31 January 2012 that are sued upon in both defamation actions, as the relevant alleged defamatory publication.
As mentioned, the Duffield Letter of the same day is no longer sued upon, not even as a republication of any imputation extractable from the Spoken Words.
The Duffield Letter, when eventually opened and read by Mr Lee after it had been dispatched to Kingsfield, is not a relevant publication that is sued upon.
Second, I repeat that it is accepted the Spoken Words were uttered by Mr Rutherford and were heard by only one person, namely, Mr Duffield.
The scenario of a defamatory publication published only to one (non‑plaintiff) recipient is conceptually open under the defamation law as being a publication. Nevertheless, the 'one-hearer' situation is rather unique for a defamation action, especially in a context of a court necessarily needing to assess from a damages perspective (if the case is proved) the potential scale of and the spread of any contended reputational damage caused by a publication to only one recipient: see Defamation Act s 34. Here, it is not pleaded or suggested that the actual words themselves as spoken by Mr Rutherford were then ever repeated to anyone else by Mr Duffield after he heard them uttered on the Island that day by Mr Rutherford.
Third, as mentioned, it is not pleaded or contended that the three core defamatory meanings, argued as arising out of the Spoken Words by Mr Rutherford, were ever republished, either by the Duffield Letter, or under any other medium, subsequent to the Rutherford/Duffield conversation of Tuesday, 31 January 2012.
Fourth, to the extent the content of the Duffield Letter of 31 January 2012 when received and read may have caused distress or upset to any reader as a defamatory publication in its own right, that is legally irrelevant in the present litigation. Moreover, a defamatory publication made to Kingsfield about Kingsfield could not found a defamation action.
Fifth, the object of the words spoken by Mr Rutherford to Mr Duffield, can be seen as being not a natural or corporate person. Their object was the then operative business, Quokka Joe's Café. That business was owned by Kingsfield, the corporation. No individual person or corporate entity is expressly identified by the 15 words. Kingsfield is not expressly identified in the Spoken Words. Nor is Mr Lee expressly named or identified by the Spoken Words.
So a hypothetical passer‑by on 31 January 2012 on Rottnest Island (hypothetically, since there was no such person) who had overheard Mr Rutherford's Spoken Words to Mr Duffield, would not know, without possessing some additional extra knowledge concerning the underlying corporate ownership and operations concerning Quokka Joe's Café, the identity of the person(s) about whom the Spoken Words were being directed as their object ‑ if at anyone at all.
Nor do the Spoken Words, assessed alone, identify as their object some generic class of ascertainable corporate or natural persons (narrow as a class, or otherwise) such as, for example, by a generic reference, say, to a 'board' of a named corporation, or to the 'members' of a club, or even to, say, the 'management' of a body or to the members of a 'club' or association of ascertainable persons.
Hence, there is here a real issue in the two trials about whether the Spoken Words, taken alone, in mentioning only 'Quokka Joe's Café', identify by implication any person corporate or otherwise.
On my assessment, taken alone, they do not identify any natural or corporate person upon their natural and ordinary meaning.
Sixth, uniquely on the present facts, Mr Duffield, as the only person to ever hear the Spoken Words, was personally knowledgeable about the underlying business details and structure concerning the ownership and operation of Quokka Joe's Café at the Wellness Centre. It is admitted on the pleadings that Mr Duffield knew the Spoken Words would extend to capture the corporation Kingsfield as an object.
As commercial leasing agent for the RIA, through McGees, Mr Duffield knew all the underlying details about which corporate entity actually owned and operated the Wellness Centre and the Quokka Joe's Café food outlet business, within the leased premises. This was, of course, the corporation Kingsfield, and to whom Mr Duffield then directed his Duffield Letter, on the same day he had conversed with Mr Rutherford at Rottnest Island.
Something is sought to be made by the plaintiffs of the fact the Duffield Letter was sent by Mr Duffield to Kingsfield, but was marked to the attention of Mr Jeff Lee. But that nomenclature was appropriate and accurate. It was addressing a formal written communication to the lessee corporation at the Wellness Centre to the attention of Kingsfield's sole director, that fact also being known to Mr Duffield. Even so, it is crystal clear the Duffield Letter was addressed to Kingsfield the corporation, not to its director, Mr Lee ('Dear Sir', notwithstanding).
Seventh, the Spoken Words complained of are the subject of Kingsfield's defamation action brought against Mr Rutherford, under CIV 1106 of 2013, commenced by writ on 23 January 2013.
As I earlier mentioned, under the Defamation Act, and subsequent to the commencement of uniform defamation legislation right across Australia on 1 January 2006, only 'excluded corporations', as identified by s 9(1), may now legitimately pursue a cause of action for the tort of defamation.
At trial, Mr Lee and Ms Howard gave evidence that Kingsfield, at January 2012, engaged less than 10 full‑time employees in the employ of that corporation.
Mr Rutherford's pleaded defence does not admit that assertion. His defence has required that position to be formally proved, if it is the case.
From the evidence of Mr Lee and Ms Howard, which I will accept on this issue, I do find it proved that Kingsfield at relevant times in January 2012, employed less than 10 full‑time employees.
Consequently, Kingsfield was, I find, relevantly, an excluded corporation for the purpose of meeting s 9 of the Defamation Act.
It is open, therefore, to Kingsfield as a corporation to pursue a cause of action in defamation, if it can otherwise make good the other required elements to sustain such a cause of action in CIV 1106 of 2013, by reference to Mr Rutherford's Spoken Words of 31 January 2012.
Identification
General
The corporation Kingsfield pursues its action in defamation against Mr Rutherford, but as seen, so does Mr Lee personally in a separate action.
Mr Lee brings that separate action, CIV 1147 of 2013, against Mr Rutherford, grounded on Mr Lee contending that the very same Spoken Words, also carry defamatory meaning(s) towards him personally.
Mr Lee contends by his own action for (almost) the same three defamatory imputations Kingsfield complains about from the Spoken Words: see his FREASOC pars 4(a), (b) and (c).
As I apprehend Mr Lee's defamation claims under his action, he is not suggesting an 'either/or' scenario, as regards the possible applicability of the Spoken Words to himself, as their object (that is, either to Kingsfield or, alternatively, to himself).
Rather, Mr Lee is contending the Spoken Words did engage to address Kingsfield but then, as well, and albeit they mention only 'Quokka Joe's Café', upon their suggested natural and ordinary meanings, he argues, they extend further in their reach, to also embrace him, as a further and additional object, along with Kingsfield.
Identification: Legal principles
As seen, the Spoken Words only refer to Quokka Joe's Café. However, an inferred identification of Kingsfield from the Spoken Words is uncontroversial. It is essentially admitted on the pleadings. It would have been made out in Mr Duffield by his personal knowledge about the Wellness Centre business structures, in any event. That is by reason of Mr Duffield's undoubted comprehensive personal knowledge about the underlying ownership positions concerning Quokka Joe's Café and the Wellness Centre uniquely held here, by him - as sole hearer of the Spoken Words.
As regards Mr Lee, however, his identification under the Spoken Words position is not admitted by Mr Rutherford and remains highly problematic.
To resolve this foundational controversy, I first need to address the legal principles concerning identification of plaintiffs under defamation law.
In David Syme & Co v Canavan [1918] HCA 50; (1918) 25 CLR 234, a civil jury's determination that a plaintiff had not been identified in a newspaper report of a public meeting, concerning what was said by one speaker about an association of returned soldiers opposed to conscription, was reinstated at the final appeal by the High Court of Australia. At (238) Isaacs J, in allowing the appeal, said as regards the issue of identification of that plaintiff:
The words complained of were found by the jury to be defamatory, that is to say, they tended to create a bad opinion of any person to whom they could be shown to refer. But the jury also found that they did not refer to the plaintiff. The plaintiff was not specifically named. The test of whether words that do not specifically name the plaintiff refer to him or not is this: Are they such as reasonably in the circumstances would lead persons acquainted with the plaintiff to believe that he was the person referred to? That does not assume that those persons who read the words know all the circumstances or all the relevant facts. But although the plaintiff is not named in words, he may, nevertheless, be described so as to be recognized; and whether that description takes the form of a word picture of an individual, or the form of a reference to a class of persons of which he is or is believed to be a member, or any other form, if in the circumstances the description is such that a person hearing or reading the alleged libel would reasonably believe that the plaintiff was referred to, that is a sufficient reference to him. But that is a fact, and it is a fact the burden of proving which to the satisfaction of the jury is upon the plaintiff. That is established by cases of the highest authority, such as Le Fanu v Malcomson 1 HLC 637; and Hulton and Co v Jones (1910) AC 20.
See also Barton J (237) and Rich J (240).
Beyond a natural and ordinary meaning (which is obviously problematic here on the Spoken Words) Mr Lee also relies upon the extrinsic knowledge of Mr Duffield, in order to establish his own personal identification under the Spoken Words.
Mr Lee invokes an asserted level of knowledge said to reside within Mr Duffield, concerning Mr Lee's alleged personal identification (see CIV 1147 of 2013, the plaintiff's FREASOC par 4, particulars (b)), on the alleged basis:
Mr Duffield knew the plaintiff was a director of Kingsfield and was the natural person most associated with it and being in charge of it, and its business operations …
However, Mr Duffield's evidence given at the trial upon the identification issue concerning Mr Lee (which I accept) was merely this (ts 253):
How did you understand the words which Mr Rutherford had uttered to you in the settlement area on 31 January 2012?---I understood that he said to me that the café had closed and there had been a health inspection.
To whom did you understand those words to refer?---Sorry, that - - -
When he told you the café had been closed, following a health inspection, to whom did you understand those words to refer?---To the Quokka Joe's Café.
A basis, therefore, for the asserted identification of Mr Lee as an additional object of the Spoken Words beyond Kingsfield, albeit the words do not expressly or impliedly refer to Mr Lee, from extrinsic evidence out of the asserted knowledge of Mr Duffield, must fail. Mr Duffield's evidence did not assist Mr Lee in this regard. See, as to the law concerning extrinsic evidence to identify a plaintiff, Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348, 362 [F] - [G] (Hutley JA):
The designation of a person not explicitly named as the person defamed is the laying of an innuendo: Le Fanu v Malcolmson (1848) 1 HLC 637; 9 ER 910. It is, therefore, for the judge to rule if the innuendo is a permissible one for the jury to consider: see also the passage from the judgment of Starke J in Lee v Wilson (1934) 51 CLR 276 at 285 quoting with approval the remarks of Scrutton LJ in Cassidy v Daily Mirror Newspapers Ltd [1929] 2 KB 331 at 339, 341. The same passage was approved by Lord Pearson in Morgan v Odhams Press Ltd [1971] 1 WLR 1239 at 1266, 1267.
These observations in Steele v Mirror Newspapers were applied by Commissioner Pullin QC (as his Honour then was) in Gumina v Williams [No 1] (1990) 3 WAR 342, 344. His Honour observed:
If, as in this case, it is necessary to rely on extrinsic facts to identify the plaintiff as the person about whom the defamatory remarks were published, then the designation of the plaintiff as the person defamed is the laying of an innuendo and there is no justification for distinguishing innuendos as to identity from other true innuendoes: [applying the observations of Hutley JA at 362] see Steele v Mirror NewspapersLtd [1974] 2 NSWLR 348 at 362 and CSBP & Farmers Ltd v Western Broadcasting Services Pty Ltd (Unreported, WASC, Library No 6593, 10 February 1987).
That is the law in this State, notwithstanding reference by the plaintiffs in their opening written submissions to an unreported decision of Hunt J, Hall v Mostyn (Unreported, NSWSC, 18 March 1983).
A true innuendo evidentiary basis relied upon to support Mr Lee's alleged personal identification from within or by the Spoken Words, based on the personal knowledge of Mr Duffield, fails.
That still leaves, as regards Mr Lee, his other contended basis towards his identification in the Spoken Words, in the alternative, by his par 4 particulars (a), on a basis that:
In its natural and ordinary meaning the Publication was of and concerning [Mr Lee] as [Mr Lee] was the natural person most closely associated as being responsible for and in charge of Quokka Joe's Café which was a business concerned with the sale of food and beverages.
That alternate submission as to Mr Lee's personal identification must be rejected as untenable.
In a context of defamatory publications concerning corporations, there may arise, on occasion, some ancillary potential for a corporation's officers to be personally 'roped in' to be captured by generic terminology of a publication. Hence, a reference to 'the board' or to 'management' may be enough to 'hit' all holders of such offices at the time as an ascertainable class of potential plaintiffs. But each publication really needs what is a bespoken assessment towards plaintiff identification, on a case by case basis.
Reliance was placed by Mr Lee on my reasons in Rambal v Cahill [2012] WASC 353. There, in rather different circumstances, I observed at [31]:
Alleging Perdaman is engaged in an abuse of process or a malicious prosecution against Lanco would be a charge of significant gravity. Fabrications do not happen accidently. A fabrication requires a fabricator or fabricators. For a corporate entity such as Perdaman, its senior officers and decision makers are here in my view squarely drawn into the frame by the intrinsic character of the serious charge against Perdaman.
See also my observations at [33] in Rambal, addressing Hill v Taylor (Unreported, NSWSC, 25 November 1983) and the remarks of Lord MacKay in Campbell v Wilson [1934] SLT 249, 252. I note as well in this sphere of plaintiff identification under defamation law: Morgan v Odhams Press Ltd [1971] 1 WLR 1239, 1245 and Universal Communication Network Inc t/as New Tang Dynasty v Chinese Media Group (Aust) Pty Ltd [2008] NSWCA 1 [43] quoting Morgan.
It is certainly true that what is said under a publication about the conduct or activities of a corporation can, in principle, extend to embrace the corporation's otherwise unidentified directors, as the proper objects of some defamatory imputation. That was the case in Rambal with a charge there as to something being fabricated. But every case is different. Ultimately, the issue of plaintiff identification is one of fact, as Isaacs J observed in Canavan.
Here, the content of the Spoken Words is seen to simply mention an abbreviated business name, Quokka Joe's Café. That was in the context of that business having been 'closed'. A past closure observation about a retail food business does not mention or imply any particular conduct or an activity which could, as was the case in Rambal (by reference to the term 'fabrication') extend or broaden the scope of the uttered words, so as to necessarily embrace on a pejorative basis the personal inputs of the Kingsfield corporation's directors, or its management: see more generally, Channel Seven Sydney Pty Ltd v Parras [2002] NSWCA 202 [34], especially at [45] - [46], [54] and [57] (Mason P).
Conclusions on Identification
So, for the present case, as an issue of fact, bearing in mind that there was only ever one verbal publication of the Spoken Words to one person, Mr Duffield, an identification of Mr Lee is not established here as to his being (as well as Kingsfield the corporation) an object of the Spoken Words.
Consequently, Mr Lee's action CIV 1147 of 2013 fails on that starting basis alone, as regards the scope of the Spoken Words. Nevertheless, at places in these reasons I will go on to evaluate further issues on the basis of my assumption, made in the alternative, that Mr Lee might have been able to surmount and survive what is this fatal obstacle to his own defamation action.
There is, I would conclude, no real difficulty in evaluating Kingsfield the corporation as the entity that was the inferred object of the Spoken Words, in the present wholly unique underlying circumstances.
The identification circumstances are unique because the Spoken Words were only ever heard by one person, Mr Duffield. He held, as has now been seen from the terms of his contemporaneous Duffield Letter and then from his trial evidence (which I accept), detailed knowledge about the surrounding ownership and management structures in place at the Wellness Centre and Quokka Joes Café. As I assessed his evidence, he understood the Spoken Words by Mr Rutherford as being applicable to the corporation, Kingsfield, but not to Mr Lee. His letter sent the same day bears that out.
My own objective analysis of the Spoken Words, as regards their object(s), is to that same end conclusion - putting aside all Mr Duffield's evidence on this issue.
The one person to whom the Spoken Words were published, assessed what he heard as being applicable to the corporation, Kingsfield. There is nothing to support the argument that they also referred to Mr Lee as well (ts 253).
Moreover, that was not an unreasonable assessment by Mr Duffield, bearing in mind the Spoken Words expressly mention an inanimate object, Quokka Joe's Café. Nor did the Spoken Words carry along with them some broad and allied, negatively encompassing criticism of a personal kind - as might be then attributable to all natural person employees or staff of a business, such as the staff generally being, for instance, 'rude', or 'unfriendly', or 'incompetent'. Nothing along those lines was said here. The factual word used here was 'closed', as regards the past trading of Quokka Joe's Café, nothing more.
I would assess Mr Duffield's conclusions as to the object of the words just being Kingsfield, as he heard and understood them, to be perfectly logical and reasonable.
That analysis is fatal to Mr Lee's personal defamation action CIV 1147 of 2013. He simply was not identified, either expressly, impliedly or from the personal knowledge of Mr Duffield. The Spoken Words do not extend to draw in Mr Lee as one of their objects, on any basis.
The Spoken Words, even with the added ingredient of Mr Duffield's extrinsic knowledge about the ownership details and structural operation of the Quokka Joe's Café business at the Wellness Centre, were reasonably understood by Mr Duffield to merely be directed at Kingsfield. That on the pleadings and at trial has been accepted on behalf of the defendant, Mr Rutherford (ts 253 and 318 - 319).
Three alleged innuendo meanings of the 15 Spoken Words
The three defamatory imputation meanings contended for as arising from the Spoken Words by Kingsfield (as well as by Mr Lee, in close substance) rest at the heart of the two defamation actions. I have set them out at the commencement of these reasons, but I now set them out again - with some phrases emphasised in bold for explication purposes.
The three contended meanings of the Spoken Words complained of by both plaintiffs are:
(a)that Kingsfield (and Mr Lee) so recklessly mismanaged Quokka Joe's Café by being indifferent as to the safety of the public as to warrant Quokka Joe's Café being closed down by the health authorities;
(b)that Kingsfield (and Mr Lee) so negligently mismanaged Quokka Joe's Café by failing to take proper care for the safety of the public as to warrant Quokka Joe's Café being closed down by the health authorities;
(c)that Kingsfield was unfit to conduct a café or similar business (or as he alleges concerning himself, that Mr Lee was unfit to be in charge of a café or similar business). (my emphasis in bold)
Imputations (a) and (b) above can be seen as similarly structured, conceptually. A key distinction between (a) and (b) is that they range in their differing gradations of seriousness, as between contending for meanings of 'recklessly' mismanaged, and 'negligently' mismanaged.
They vary as well, in another key aspect of their responsive gradations. This is as between the plaintiffs being either 'indifferent' to the safety of the public, or by some (lesser) contrast, in 'failing to take proper care for' the safety of the public.
Imputations (a) and (b) commonly contend for a defamatory meaning as to the mismanagement of Quokka Joe's Café (by someone), then towards either a state of indifference to, or a failure to take proper care for, the safety of the public. This commonly then culminates as suggested conduct such as to 'warrant' Quokka Joe's Café being 'closed down' by the health authorities.
Imputation (c) can be seen to be constructed somewhat differently, in its concept, to (a) and (b). It contends for the most serious of the 'wounds' said to be delivered by the Spoken Words. This is by the contention of (c) as to either Kingsfield being said to be unfit to conduct a café or similar business or, slightly differently for Mr Lee, that he is unfit to be in charge of a café or similar business.
Even at first blush, the higher level pitched (c) imputations can be seen as something of a stretch, in terms of extracting such a severe meaning from out of the 15 Spoken Words. That is so particularly when there is nothing otherwise apparent within the 15 words to say, suggest, or explain why it was that Quokka Joe's had come at a time to have 'been closed by health authorities'.
I return to discuss later in the reasons why I would, in the end, reject all these three contended defamatory meanings as not arising from the Spoken Words.
Whilst, of course, the trial evidence does not influence my required assessments as to the natural and ordinary meanings of the Spoken Words, it is nevertheless convenient to assemble it all together now, before advancing to discuss why the three meanings must, in the end, all be rejected as not arising from the Spoken Words.
The trial evidence: limited areas of factual disputation
Evidence at the trial was adduced from five witnesses.
Three witnesses were called by the plaintiffs - namely, Mr Jeffrey Lee, his de facto and business partner, Ms Susan Howard, and a Mr David Henderson. Mr Henderson was a former manager of the Rottnest Bakery and Rottnest Café for Abellio. Mr Henderson attended the trial under a subpoena from the plaintiffs.
For the defendant, evidence was elicited at the trials first from the defendant to both actions, Mr Ivan Rutherford, and subsequently from Mr Peter Duffield.
The scope of factual clashes of evidence in the trial evidence was relatively narrow. I have already related in the reasons a substantial body of what are uncontroversial underlying facts.
Beyond that, as already mentioned, the Spoken Words by Mr Rutherford to Mr Duffield of Tuesday, 31 January 2012, are admitted fully. That was the case effectively from the time Mr Rutherford's pleaded defences were filed in both actions.
Nevertheless, there emerged at the trial three lever arch volumes of documents proposed to be tendered as the trial bundle (exhibits 1.1 through 1.3) and containing some 224 tabs for distinct documents - none of which was objected to, at least in terms of their introduction into evidence. But some documents in that proposed trial bundle were not referred to at all during the trial. Accordingly, they have been excised by me from the residually accepted trial bundle. (The excised documents are noted in emails from my Associate of 26 November 2015 and 15 December 2015 to the parties' respective solicitors.) There was a post‑trial request from the plaintiff's solicitors that about 50 or so of these documents that were not referred to in evidence or in submissions nevertheless be received. This submission must be rejected. The excised documents have no relevance to trial issues on either side. No specifically targeted relevance submission towards a particular document was made by the plaintiff's lawyers. Consequently, that excised batch of not referred to documents is only a distraction against the (many) other issues left to be resolved.
In terms then of factual disputation, the core residual issues requiring my resolution essentially distil now from the trial to these:
(a)a causation of the closure issue, post the health department officials' inspection of Quokka Joe's Café, on Monday, 23 January 2012, which I will explain;
(b)whether Mr Rutherford falsely claimed at a subsequent face to face meeting that he had with Mr Lee and Ms Howard on Rottnest Island in August 2012, that he was not the source of the information which had led to Mr Duffield's letter asking about Quokka Joe's having been closed. (Mr Rutherford's evidence at trial was that he could not remember then (ie, in late 2015) what he said at that August 2012 meeting. However, Mr Lee and, particularly, Ms Howard held a clear recollection of Mr Rutherford denying to them that he was the source of Mr Duffield's closure information. So if it becomes at all a relevant issue, I accept their versions, in preference to Mr Rutherford's lack of memory on that issue.); and
(c)issues of fact arising out of the plaintiffs seeking to show alleged malice in Mr Rutherford when he uttered his Spoken Words to Mr Duffield, on 31 January 2012.
The malice challenge against Mr Rutherford was essentially the same in both defamation actions. It largely emerged out of late pleaded Replies on the part of the respective plaintiffs. Essentially, a four-fold malice attack was put against Mr Rutherford, by reference to assertions that:
(i)his Spoken Words to Mr Duffield were published for a collateral purpose, to 'distract' Mr Duffield and, therefore, the RIA from 'health and safety issues experienced, and being experienced, by the (Abellio‑owned) Rottnest Bakery and the Rottnest Café';
(ii)that the Spoken Words were uttered by Mr Rutherford for a collateral purpose of seeking to 'ingratiate himself' with Mr Duffield, in circumstances where Mr Rutherford's associated corporation, Abellio, 'was in substantial arrears to the RIA and had sought commercial concessions from the RIA via its agent, Mr Duffield';
(iii)the Spoken Words were published to Mr Duffield by Mr Rutherford for a collateral purpose of, or influenced by his desire to, 'damage the plaintiff's business as a close competitor of the Rottnest Café and Rottnest Bakery'; and that
(iv)Mr Rutherford spoke his words to Mr Duffield with a reckless indifference as to their truth. This contention is essentially advanced upon an underlying negative premise of fact that Quokka Joe's Café had not been required to close and that it did not close - as a result of any inspection by the health authorities of Western Australia on 23 January 2012. I deal with that factual premise in the course of these reasons. Further, it is said by way of challenge to him as regards his asserted malice that Mr Rutherford had not personally observed the health inspection on 23 January 2012 (as is accepted factually) and hence that Mr Rutherford was in a position to 'verify the accuracy of the publication through enquiry with either Kingsfield or an officer of Kingsfield prior to making the publication' - but that he did not. This challenge seems also to be predicated upon the plaintiffs rejecting any causation closure conclusion, as regards the trading closure of Quokka Joe's Café as a result of and following the health inspection of 23 January 2012. It is, therefore, closely tied to the first factual controversy I identified under (a) above.
Thus, the areas of factual disputation arising in the trial unfolded as relatively confined to that just mentioned handful of discrete but, nevertheless, important issues.
General principles, defamation
Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500, 506 contains the classic observations made by Brennan J concerning the dual conjoint dichotomy requirements to show a defamatory publication, namely for a plaintiff to show:
(a)the meanings as contended for by the defamation plaintiff are actually conveyed by the content of the publication that is complained of; and
(b)if so, that these asserted meanings are 'defamatory' of the plaintiff.
For the present trials, no submissions at all have been advanced on the part of Mr Rutherford that if the meanings contended for against him do arise from the Spoken Words, that they are not defamatory meanings. So much is expressly accepted by the defendant's written opening submissions, par 33. Hence, the heavy first contest here is over whether the meanings as contended for by Kingsfield, and similarly by Mr Lee, arise or not from the Spoken Words of Mr Rutherford.
To that end, I turn to legal principles applicable to the foundational issue of meaning ascertainment under Australian defamation law.
In Maher v Nationwide News Pty Ltd [2013] WASC 254, upon what was an interlocutory strikeout application, I addressed applicable principles in that context of dealing with popular or false innuendo (ie, a meaning arising from the natural and ordinary meaning of the words of a publication assessed by reference to the hypothesised ordinary reasonable reader): see [18] - [22] of those reasons. At [22], I distinguished a popular (false) innuendo meaning from the distinct scenario of a legal (true) innuendo, explaining that for a legal innuendo meaning 'there is some extra knowledge held in a class of reader to be assimilated and assessed along with the words of the publication'.
Since I published those reasons in July 2013, I have read the reasons of White J in the Federal Court of Australia in Hockey v Fairfax Media Publications Pty Ltd [2015] FCA 652 (published 30 June 2015). Those reasons, with respect, contain a helpful and comprehensive statement of general defamation principles concerning meanings within publications. It is convenient, therefore, to repeat what his Honour said on the issue of meaning under Australian defamation law at [63] - [73]. His Honour wrote:
[63]The principles to be applied in the determination of this issue are settled, having been stated in numerous authorities: Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; (2009) 238 CLR 460 at [5]–[6]; John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 201 ALR 77 at [26]; Reader's Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 505 - 6; Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 164–5; Farquhar v Bottom [1980] 2 NSWLR 380 at 386 - 7; Charleston v News Group Newspapers Ltd [1995] 2 AC 65 at 69 - 74. The question is whether ordinary reasonable readers would have understood the matters complained of in the defamatory senses pleaded. The ordinary reasonable meaning of a matter may be either its literal meaning or that which is implied or inferred by the matter. It includes inferences and conclusions which the ordinary reasonable person draws from the words used, taking into account the observation of Lord Reid in Morgan v Odhams Press Ltd [1971] 1 WLR 1239 at 1245, that the reader may engage in a certain amount of 'loose thinking'. Lord Reid went onto to say:
The ordinary reader does not formulate reasons in his own mind: he gets a general impression and one can expect him to look at it again before coming to a conclusion and acting on it. But formulated reasons are very often an afterthought.
[64]Ordinary reasonable readers are taken to be persons of ordinary intelligence, experience and education, who are neither perverse nor morbid nor suspicious of mind, nor avid for scandal. They do not live in ivory towers and can and do read between the lines in the light of their general knowledge and experience. They do not engage in over-elaborate analysis in search for hidden meanings, nor do they adopt a strained or forced interpretation. They are not lawyers and their capacity for implication may be greater than that of lawyers.
[65] The ordinary reasonable reader does not look at the matter complained of in isolation but rather in the whole context in which it is published: John Fairfax & Sons Ltd v Hook (1983) 72 FLR 190 at 195. The context includes all the surrounding circumstances.
…
[67]The more sensational an article in a newspaper, the less likely it is that the ordinary reasonable reader will read it with the degree of analytical care which may otherwise be given to a book and the less the degree of accuracy which may be expected by the reader: Marsden at 165. Conversely, the ordinary reasonable reader of a serious publication may be taken to read it more cautiously and critically, especially having regard to the opportunity to reflect on its contents.
[68]Generally, courts do not take a narrow view of the meaning conveyed to reasonable readers by words which are imprecise, ambiguous, loose, fanciful or unusual: Marsden at 165.
[69]In determining what is reasonable in any case, a distinction must be drawn between what ordinary reasonable readers (drawing on their own knowledge and experience of human affairs) could understand from what the publisher has said in the matter and the conclusion which the readers could reach by taking into account their own beliefs which have been excited by what was published. It is the former, and not the latter, which is pertinent.
…
[72]The meaning which the respondents intended to convey by the words they published is irrelevant to the ascertainment of their natural and ordinary meaning. Even if they did not intend their words to defame Mr Hockey, they will still be liable if the ordinary reasonable reader understood them in that way. Similarly, evidence as to the actual understanding of the words by those who read them is immaterial.
[73]The determination of the natural and ordinary meaning of words involves the application of the 'single meaning' rule. This rule was explained by Diplock LJ in Slim v Daily Telegraph Ltd [1968] 2 QB 157 at 173 - 5:
[When] words are published to the millions of readers of a popular newspaper, the chances are that if the words are reasonably capable of being understood as bearing more than one meaning, some readers will have understood them as bearing one of those meanings and some would have understood them as bearing others of those meanings. But none of this matters. What does matter is what the adjudicator at the trial thinks is the one and only meaning that the readers as reasonable men should have collectively understood the words to bear. That is 'the natural and ordinary meaning' of words in an action for libel.
…
The decision as to defamatory meanings which words are capable of bearing is reserved to the judge, and for this reason, and no other, is called a question of law. The decision as to the particular defamatory meaning within that category which the words do bear is reserved to the jury, and for this reason, and no other, is called a question of fact. But the recognition that there may be more than one meaning which reasonable men might understand words to bear does not absolve the jury from the duty of deciding upon one of those meanings as being the only 'natural and ordinary meaning' of the words. Juries, in theory, must be unanimous upon every issue on which they have to adjudicate; and since the damages that they award must depend upon the defamatory meaning that they attribute to the words, they must all agree upon a single meaning as being the 'right' meaning. And so the unexpressed major premise, that any particular combination of words can bear but a single 'natural and ordinary meaning' which is 'right', survived the transfer from judge to jury of the function of adjudicating upon the meaning of words in civil actions for libel.
But where an action for libel is tried by a judge alone without a jury, it is he who has to arrive at a single 'right' meaning as 'the natural and ordinary meaning' of the words complained of; and with the concentration of functions in a single adjudicator, the need for his distinguishing between meanings which words are capable of bearing and the choice of one 'right' meaning which they do bear disappears. (original emphasis)
See also Charleston v News Group Newspapers Ltd at 71 ‑ 2; and Ten Group Pty Ltd v Cornes [2012] SASCFC 99; (2012) 114 SASR 46 at [34], [47] - [50].
Those recent and comprehensive observations helpfully explain the legal landscape towards meaning ascertainment in a defamation action.
More specifically, as to defamatory meanings, I also note that in Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369; (2014) 88 NSWLR 421, Basten JA (with whom Meagher JA & Tobias AJA agreed) rendered some resonant observations concerning the fundamental need for defamatory imputations as formulated in a plaintiff's statement of claim to be precise and clearly expressed. His Honour said at [21]:
The language of defamatory publications is often imprecise and capable of a range of meaning. One important purpose of pleading imputations is for the plaintiff to identify that meaning which is said to be conveyed and is defamatory. An imputation which is imprecise, unclear or ambiguous is an inadequate pleading.
Returning to my reasons in Maher, under the heading 'The Proper Formulation of Imputations', I addressed the need for imputations in a defamation action to be drawn with some precision, at [27] - [31]. I said:
[27]Meanings contended for by a plaintiff must be exact, either popular (false) innuendo arising exclusively from the words of the publication, or a legal (true) innuendo, arising out of the words as augmented by further knowledge held by the particular reader. The imputation must capture the true essence of the 'sting' of the publication concerning alleged wounds to the plaintiff's character complained of. An imputation must be a precise distillation of the essential grievance: see in this respect the observations by Stephen J in Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1, 17 - 18; Hunt J in Monte v Mirror Newspapers Ltd; and Commissioner Pullin QC in Gumina v Williams [No 1].
…
[29]Formulated imputations also lay down the platform upon which pleaded defences (particularly a defence of justification raising the truth or substantial truth of the imputation) may seek to be advanced by a defendant. Absent requisite precision in formulating a plaintiff's imputations, there are likely to be generated diverting flowthrough consequences in subsequent pleadings which may impinge on the efficient running of a trial.
[30]Imprecision in the formulation of a plaintiff's imputations can arise through:
(a)an imputation not being reduced to its absolute essence out of the words complained of;
(b)an imputation being cluttered by unnecessary words or concepts; and
(c)a mixing or merging of more than one essential grievance, so as to create overall confusion or uncertainty as to the intended meaning.
[31]... I repeat the observation of Anderson J in Taylor v Jecks (319):
[d]istinct imputations should be distinctly pleaded so that the defendant can deal with them separately, otherwise there is potential for much confusion.
See also, Anderson J's following evaluation of the imputations in that case, including as to whether the presence of unnecessary words manifested a deficiency sufficient to undermine a pleaded imputation (Taylor v Jecks (319)).
To that same end, I would add the observations of Steytler J, as his Honour then was, made in Birmingham v West Australian Newspapers Ltd [1999] WASC 19 [7]. His Honour had said, relevantly:
… Next, an imputation must express the precise act or condition asserted of or attributed to the plaintiff or with which the plaintiff was charged (Monte v Mirror Newspapers Ltd, supra, at 678) and should not be ambiguous or contain irrelevant matter (Taylor v Jecks, supra, at 316 ‑ 319). Thirdly, whether the words complained of are capable of conveying an allegedly defamatory meaning contended for is a question of law.
Steytler J's further observations concerning an objective standard applicable to the assessment of reasonable people understanding a publication in a libellous sense, are addressed in the balance of [7]. They are in terms that accord with the observations from the reasons of White J in Hockey v Fairfax.
I conclude this section by adding the recent observations of Edelman J in Rayney v Pan Macmillan Australia Pty Ltd [2014] WASC 129, where his Honour, in, with respect, lucid terms, explained the rationale underlying a deployment in defamation law of the objective standard by reference to an ordinary and reasonable reader. His Honour said:
The ordinary reasonable person is a legal construct. He or she is not a fiction who is supposed to represent some judicial guess about the likely behaviour of the general public. Instead the reasonable ordinary reader is constructed to illustrate the boundaries of legal rights; in this case the boundary between the right to reputation and the freedom of speech [40].
Application of legal principles as to meanings for the current imputations of the plaintiffs
My collected observations concerning the requirements for clarity and precision in the formulation of a defamatory imputation bear directly upon my negative assessments of imputations (a) and (b), as already seen now in the reasons.
As formulated, those imputations would violate each of the principles I identified in [30] of the Maher reasons. Both imputations are anything but clear. They are multi-faceted. Neither captures an essential 'sting' from the Spoken Words. Neither imputation is seen to be reduced to an absolute essence.
There is also a witnessed ancillary deployment in (a) and (b) of extra and unnecessary concepts. There is a merging of more than one essential grievance in both imputations, creating underlying confusion and uncertainty. Had there been a jury for these trials I would have hesitated long and hard before allowing them to receive imputations (a) and (b).
But since, for this case, I came to be the arbiter of both fact and law and neither of imputations (a) and (b) was conceptually challenged by the defendant prior to the trial, I grapple with them as best I can. I confront that task discretely, later in the reasons.
Trial witnesses generally
For this case, I had the considerable forensic advantage of having the witnesses' evidence led in traditional fashion, viva voce, rather than by the tendering of written witness statements for the evidence in chief of each witness. The basis for the trials proceeding on viva voce evidence in chief stemmed from the fact that, at an earlier interlocutory stage in the litigation, the trials for three actions (as they stood at that time) were to be jury trials, at the behest of the plaintiffs - see my reasons in Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [No 2] [2014] WASC 408. The plaintiffs in the residual two actions subsequently did not seek trials before a civil jury.
On that basis, by programming directions as case manager, I had earlier ordered that only summaries of the evidence in chief be exchanged between the parties, prior to trial. The exchange of summaries meant that parties would still broadly be put on notice of the evidential territory proposed to be covered by each trial witness in chief.
My oversight of this process as case manager has demonstrated for me the superiority of this process, as an instrument for more reliably ascertaining true facts, where there is dispute. Here, very considerable clarifications and adjustments emerged at the trials towards the earlier exchanged witness evidence summaries, prior to witnesses' evidence being led at the trial. This was in circumstances where, had a formal witness statement been prepared, and exchanged for proposed tender, I tend to doubt whether the corrected inaccuracies in the earlier exchanged evidence would have been picked up and corrected before the evidence was tendered at trial. The leading of the evidence cured that.
Furthermore, a more traditional leading of the witnesses through their evidence in this trial enabled me to better assess and assimilate that evidence and also to evaluate the overall credibility of a witness's testimony. This allowed a more balanced perspective, rather than simply observing key witnesses from the beginning under their cross‑examination, or later, in a generally brief re‑examination (if any).
Another large forensic advantage I assessed was that precious trial hours were not lost here by needlessly debating evidentiary objections to multiple paragraphs of the exchanged witness statements, as routinely occurs in commercial cases. At trial, there were only a handful of easily resolved objections to evidence in chief of witnesses, as that evidence was being elicited viva voce.
Here, the trial time saved in not needing to deal with hosts of sterile, multi‑faceted evidentiary objections to endless rambling paragraphs of lawyer influenced witness statements, more than balanced time consumed in the leading of the witnesses' evidence in chief in traditional fashion. In this trial, both counsel sensibly led their witnesses through their evidence in chief at times. They did not object where the evidence in chief was uncontroversial, and it was led helpfully and quickly under this process.
His Honour continued to observe:
There are difficulties in knowing precisely where to place the emphasis in the different passages in Chesterton. The exegesis referred to by the trial judge related both to the facts of Chesterton itself and to those which arose in Gacic. Although expressed at a higher level of generality, context was important. The court was seeking to identify and expunge a particular erroneous approach. The plaintiffs in Gacic were restaurateurs; the plaintiff in Chesterton was a journalist. Each involved a publication which was claimed to harm the plaintiff(s) through an attack on their or his business operations. The present case was different in three significant respects. First, one of the applicants is a corporation: assuming, correctly as will be explained below, that the corporation is entitled to sue in defamation, the point of distinction between business and reputation is less clear than with an individual unless harm to business is treated as a reference purely to economic loss. Secondly, in each of Gacic and Chesterton there was an individual business or person who was the subject of the publication. In the present case, that is not so. The subject matter of the broadcast was not Babywedge as a specific product, but rather the category of sleep positioners for babies. The fact that it was possible to identify the applicants' product as an example of the class did not mean that the focus of the broadcast was the individual product. Thirdly, the focus of the broadcast was not particular conduct or behaviour of the applicants, but information concerning the safety of products which they (amongst others) offered for sale [34].
See also [35] in terms of the examples given at the other end of the spectrum.
For the present case, my assessment is that a truncated and distilled imputation simply contending that Kingsfield had been defamed by the Spoken Words, under a meaning that Quokka Joe's Café had been closed after an inspection by the health department, would simply be a bare factual assertion as to the Quokka Joe's Café business itself, and not to the entities standing behind the business.
That, in my assessment, is the likely explanation for why a closure causation conclusion had always, prior to the plaintiffs' closing verbal submissions, been exhibited by the plaintiffs as coupled to extra factual and event augmentations (ie, as to mismanagement, public safety, recklessness, lack of care, etc). The augmentations served to hide the closure conclusion from a more transparent evaluation and categorisation as an injurious falsehood (assuming falsehood of the underlying facts could be proven, a dubious proposition in its own right).
The fall-back Chakravarti imputation submission, therefore, brief and undeveloped as it was, concerning a lesser imputation in meaning as to causing Quokka Joe's to be closed, must also be rejected as not being an arguable defamatory imputation.
Sensitivity of a defamation plaintiff
A sensitive plaintiff submission was put as a part of the plaintiffs' claims for damages, supported by reference to a passage from Ali v Nationwide News Pty Ltd [2008] NSWCA 183 [77] - [78]. At par 166 of the plaintiffs' written closing submissions this was said:
Mr Lee's reaction to the letter [meaning the Duffield Letter of 31 January 2012, which is not sued upon] was against a background of Mr Lee's previous history of dealings with the RIA …
That position was elaborated on in closing by Mr Bennett for the plaintiffs: see ts 385 - 386. Further support was sought by calling in some observations from the third edition of Duncan and Neil on Defamation (2009). An extract from par 2313 was relied upon:
Damages are awarded to compensate the claimant for his mental distress and, of course, some claimants are more sensitive than others and will suffer greater injury. If the claimant were to suffer psychiatric illness as a direct result of the publication of a libel, this may be reflected in the award of damages.
Advancing that proposition, the learned authors of Duncan and Neil refer to a Hong Kong decision, Chu Siu Kuk Yuen v Apple Daily Ltd [2002] 1 HKLRD 1. There it was said that an award of general damages could take into account adverse effects on the claimant's health, as established by medical evidence: see [86] and [112] of that decision. (It goes without saying that such a submission could not apply to a corporate plaintiff such as Kingsfield in a defamation action ‑ as inanimate corporations are not vulnerable to such sensitivities.)
Essentially, the submission advanced here goes to an alleged sensitivity or vulnerability in Mr Lee personally, as a defamation plaintiff, assuming he could, contrary to all my primary conclusions, establish his own identification under the Spoken Words and that he had been defamed (see also ts 387).
My summary formulation of the following proposition from the closing arguments was accepted by counsel for Kingsfield and Mr Lee (ts 387):
Because of a pretty unfortunate history of disputation with the Rottnest Island Authority and others over a long period of time since I've been there, when I learned ultimately of the Duffield communication to Rutherford and the imputations that were in it, I was more than unusually upset by it because I had effectively been softened up by an unfortunate history of my experiences on Rottnest Island.
In this area, I note some further observations rendered in Ali v Nationwide News Pty Ltd , where Tobias and McColl JJA said at [77] - [78]:
Finally under these general observations, we would observe that the defendant must take the plaintiff as it finds him or her: Humphries v TWT Ltd (1993) 113 FLR 402 at 418 - 419 per Miles CJ, Bashford v Information Australia [2000] NSWSC 665 at [42] per Davies AJ.
Humphries was reversed on appeal, but on the point that the damages Miles CJ awarded were inadequate: Humphries v TWT Ltd (1993) 120 ALR 693. The Court (Gallop, Davies and von Doussa JJ) implicitly approved (at 706) Miles CJ's statement that the particular sensitivities of the plaintiff were relevant to the award of damages. They concluded (at 706) that 'the award made by the trial judge was so low that it failed to provide compensation appropriate to the injury to the appellant's feelings as found by him, and failed to provide a sum that, even in conjunction with the correction and apology, was sufficient to nail the falsity of the imputations'.
The observations in Aliv Nationwide News Pty Ltd were made under a section of the reasons of their Honours dealing with legal principles and, most relevantly, as regards a subtopic of damages in defamation, at [70] - [78].
One reliable example of taking a defamation victim as found emerges under the observations of Gleeson CJ and Crennan J in John Fairfax Publications Pty Ltd v Gacic. Their Honours there observed at [2]:
Suppose someone says: 'X is a thoroughly decent person, but he is showing signs of age; his eyesight is poor, and his hands tremble'. That would not be a reflection on X's character. It would be likely to evoke sympathy rather than hatred, ridicule or contempt. If, however, X were a surgeon, the statement could be damaging …
But towards allowing the widespread admission into evidence of a plaintiffs' general sensitivity to defamation, based on admitting evidence as to a series of unrelated incidents from the past in dealing with parties other than the defendant, going well beyond evidence of some consequential medical condition, then some measure of caution is surely called for. Defamation trials face the prospect of being rendered even longer, more complex and expensive to run than they currently are by unfettered excursions into a time-consuming catalogues of calamities assembled by a plaintiff from bygone days designed to advance their asserted sensitivity to the defendant's alleged defamation.
The pragmatic forensic consequences of pursuing, assembling and then admitting such bucketloads of past event evidence needs to be carefully considered, in my respectful view.
In the end here, the contention was that the past events raised went to show Mr Lee's sensitivity vis-à-vis an appropriately higher award of damages. But balanced against that was the saga of the many past (but sketchy) tales of commercial woe involving third persons, all unburdened therapeutically at the trial. This is in circumstances where none of these sensitivity incidents were pleaded or discovered upon (or, at least, not comprehensively so) and the duration of trial was increased as these incidents were recounted.
The permissible range of defamation plaintiff sensitivity evidence as a matter of policy demands careful limits, in my respectful view. Here it is not necessary to resolve the issue finally, given the overall negative conclusions I have reached on other determinable issues against both plaintiffs.
Ali v Nationwide News Pty Ltd, I see, is referred to in the 12th edition of Gatley at par 9.4, page 331, footnote 43. Mentioning that case, followed by a Queen's Bench decision, Cleese v Clarke [2003] EWHC 137 (QB) [40], and a further Queen's Bench decision, Bowman v MGN Ltd [2010] EWHC 895, the learned authors of Gatley observe:
But this cannot mean that a genuine but exaggerated reaction to a minor libel leads to a large award of damages.
I would respectfully endorse that observation.
As regards a hurt feelings and a sensitivity claim by a corporation like Kingsfield, this is simply untenable conceptually. In Lewis v Daily Telegraph, Lord Reid observed at 262:
A company cannot be injured in its feelings, it can only be injured in its pocket. Its reputation can be injured by a libel but that injury must sound in money. The injury need not necessarily be confined to loss of income. Its goodwill may be injured.
See also in that sphere Australian Broadcasting Corporation v Comalco Ltd (1986) 12 FCR 510; Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (Mahoney JA); and McCarey v Associated Newspapers Ltd [1965] 2 QB 86; [1965] 2 WLR 45 (Lord Diplock), all of which are referred to by Franklyn J in Royal Antediluvian Order of Buffaloes Grand Lodge of Western Australia Under the Grand Lodge of England Inc v Spencer (Unreported, WASC, Library No 6592, 6 February 1987).
In the present case, the plaintiffs' past commercial event sensitivity to defamation evidence as led, carried a further no doubt unintended consequence for the plaintiffs in leading it. In the end it bore against, as a factor, my overall assessment of the reliability of Mr Lee. I dealt with this in an earlier section of these reasons. My perception was that Mr Lee over time had been pushed by dint of too many past unhappy experiences at Rottnest Island, to an unsettled position of seeing daggers around almost every corner - when there were none.
Mr Lee's reaction to what was a rather benignly phrased Duffield Letter of 31 January 2012, by instructing lawyers CBH to send the response of 3 February 2012 on behalf of Kingsfield, displays what looks to be an abnormal level of hypersensitivity at the time. It echoed the reference by Macbeth to a 'dagger of the mind, a false creation'.
It is also opportune at this point to once again re-emphasise a point addressed at the outset, as was accepted in closing by counsel for the plaintiffs, that any hurt or distress occasioned to anyone as a result of reading the content of the Duffield Letter of 31 January 2012, must be, legally, irrelevant. That written communication is not contended, in itself, to carry any of the defamatory imputations complained of in this action. The Duffield Letter was not sued upon as being any sort of republication of the three core defamatory imputations that the plaintiffs complain about in this litigation, arising from the Spoken Words of Mr Rutherford that were heard only by Mr Duffield: see ts 359.
Damages: s 34 Defamation Act
In the hypothetical event I had found that Kingsfield (or Mr Lee) had surmounted the fatal obstacles which will see their actions fail, so as to show that one or other of them had been defamed under the Spoken Words, then the last issue that would have presented would have been as to a level of an appropriate award of damages.
In embarking upon a defamation damages quantification evaluation, I would have needed to respect the injunction of s 34 of the Defamation Act. It provides:
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.
The direction under s 34, to align any damages award to the 'harm sustained' by an 'appropriate and rational relationship', would have presented some real obstacles for either plaintiff in this particular case. Fundamentally, this is because, as seen by present circumstances, the Spoken Words as heard by Mr Duffield, in the end, delivered no reputational harm at all to Kingsfield, or to Mr Lee.
The Spoken Words were heard only by Mr Duffield. They were not repeated by him to anyone else. Mr Duffield did not assess the Spoken Words as being pejorative of Kingsfield, of the Quokka Joe's business, or of Mr Lee. His Duffield Letter sent to Kingsfield did not amount to any republication of the contended imputations under the Spoken Words. Mr Duffield himself did not draw any of the three pejorative innuendo meanings which have been contended for as arising from the Spoken Words by the plaintiffs.
Of course, the Duffield Letter itself sent to Kingsfield could never be a defamatory publication, in that it was sent to the plaintiff. It would need to be communicated to or at least seen by someone else other than the allegedly defamed plaintiff. It was contended this was Mr Jeffcote of the RIA, as the only other person to receive a copy of the Duffield letter (had he received it). But, at least as at 3 February 2012, Mr Jeffcote had not received a copy of the Duffield Letter from Mr Duffield. He said as much in his email to CBH (exhibit 1.2.93, TB pages 430 ‑ 431).
Mr Jeffcote only ever received a copy of the Duffield Letter because he had requested Kingsfield's lawyers, CBH, to send it to him after receiving the copy of their communication to him. They duly acceded to his request. So, even if the Duffield Letter had (hypothetically) carried one or more of the imputations of the Spoken Words (with it now being accepted it did not) the only reason Mr Jeffcote received a copy of the Duffield Letter, in the end, was because of it being sent to him by Kingsfield's lawyers, CBH.
Fundamentally, however, the Spoken Words as overhead by Mr Duffield, on his evidence (which I fully accepted) caused no harm to be sustained to the reputations of Kingsfield, or Mr Lee. This was because, clearly, Mr Duffield formed no pejorative views or conclusions whatsoever about Kingsfield, Mr Lee or about Quokka Joe's. He simply sent off his letter seeking more information from Kingsfield, asking about whether Quokka Joe's Café had been closed or not - a reasonable thing to have done in the circumstances and a question very easily responded to in order to set the factual record straight, if it needed to be done.
Any pain or hurt sustained by Mr Lee around 31 January to 3 February 2012 (corporations, of course, under defamation law not being amenable to the suffering of hurt or distress, in contradistinction to human plaintiffs) was as a consequence of his reading the Duffield Letter sent to Kingsfield. But that is irrelevant. The Duffield Letter carried none of the argued defamatory imputations said to be extractable from the Spoken Words themselves, either as popular or legal innuendo meanings.
So, any subsequent hurt or distress suffered by Mr Lee arises not as a result of the Spoken Words - uttered by Mr Rutherford just to Mr Duffield - but from an overblown reaction to that event, after Mr Lee read and reacted to the Duffield Letter.
In all these circumstances, where no detectable reputational harm, nor any relevant hurt or distress, has been shown to have been sustained from the Spoken Words, and taking account of the neutral reactions of the only person who heard them, the 'appropriate and rational' relationship between that phenomenon and an amount of damages (hypothetically assuming liability were to be proved) would suggest that any damages award must, at best, be nominal for Mr Lee and for Kingsfield.
Here, the amount of $10 would prima facie present as being on the high side of a nominal award for each plaintiff, had that been required.
Aggravated damages
Arguments were also run at the trial by both plaintiffs to the effect that any damages ought to be be increased, arising from two particular features, namely:
(a)the (subsequently not maintained by the defendant) earlier pleas of justification, as seen in Mr Rutherford's prior pleaded defences; and
(b)(as regards Mr Lee only, since Kingsfield as a corporation accepts it cannot legitimately advance any claim for exacerbated hurt of this kind) that Mr Rutherford in the period prior to these defamation actions been commenced in January 2013, had explicitly denied being the source of the information to Mr Duffield, concerning Quokka Joe's having 'been closed' in January 2012.
On my assessment, neither matter can provide, in the hypothetical event it were necessary to evaluate damages arguments, a sound basis for an award of aggravated damages.
As regards earlier pleas in Mr Rutherford's defences as to justification, my assessment is that the imputation pleas that went to trial concerning the three meanings contended for, arising out of the Spoken Words, evolved somewhat over time, as the actions have progressed towards a trial. That was across the period 2013 - 2015. Imputation (a) is long standing. But imputation (b) emerged as a relatively new imputation before the trial. Imputation (c), under amendments, was pruned over time, to eradicate an even greater narrative component.
Given the evolving character of the imputations over time, for both the plaintiffs, I would not assess the earlier justification pleas as warranting an award of aggravated damages.
The earlier justification pleas essentially contended that the health officials' visit to Quokka Joe's, in a causative sense, had brought about a closure of Quokka Joe's, in the aftermath of that inspection. From my assessment of the underlying facts now undertaken, that was not an unreasonable or provocative averment under Mr Rutherford's then defences, in all the circumstances. That is so particularly given my factual findings that for cleaning purposes Quokka Joe's did suffer a period of closure observed by Mr Henderson on Monday 23 January 2012. That closure period was a result of the health inspection earlier that day.
Towards the second, so called aggravating feature, as regards only Mr Lee, once again the plea is not conceptually supportable. The fact of Mr Rutherford's face‑to‑face denial at a meeting in August 2012, to Mr Lee and Ms Howard, that he was not Mr Duffield's source of the information concerning the January 2012 closure of Quokka Joe's, is still, on my assessment, causatively and legally irrelevant. Hurt or distress sustained by Mr Lee by reason of his becoming frustrated through drawn out endeavours to finally satisfy himself to his particular threshold of satisfaction about who actually was the source of the Duffield information, does not arise from defamatory imputations in the Spoken Words of 31 January 2012 (assuming there were any).
Mr Lee had, of course, been openly told as early as 2 May 2012 by Lawton Gillon, acting as solicitors for Mr Duffield, that Mr Rutherford was the source of the information. That was not good enough for Mr Lee. He required a direct admission from Mr Rutherford himself. At the face‑to‑face meeting of August 2012 at Rottnest Island, he and Ms Howard heard Mr Rutherford deny he was the source (on my finding) of Mr Duffield's information. I would not condone such conduct by Mr Rutherford. But it is distinct to and legally irrelevant to the Spoken Words.
It is only the defamatory meanings of the Spoken Words which can deliver a relevant injury to a plaintiff's reputation. So a cloudy possible identity of the speaker of defamatory words, or a speaker's subsequent failure to make an admission, presents as something of a side issue. Hypothetically, assuming again that:
(a) one or more of the defamatory meanings had been made good here (contrary to all my conclusions); and
(b)Mr Lee had been identified as an object of the Spoken Words (again contrary to my primary conclusions)
then even on such optimistic premises, I would still conclude that any ongoing identity ascertainment frustrations as were encountered by Mr Lee are not legally relevant. They were of his own making.
What was a drawn out process across most of 2012 until January 2013, with Mr Lee needing to satisfy himself about who was Mr Duffield's source about Quokka Joe's having been closed (recognising the Duffield Letter itself carries no defamatory imputations and was not a republication) is irrelevant, in a legal sense to any wounds, if any, delivered as defamatory meanings by the Spoken Words.
It is those defamatory meanings themselves that wound and injure a reputation. Uncertainty here in Mr Lee post‑2 May 2012 over the actual person who had uttered the Spoken Words to Mr Duffield does not conceptually increase the reputational harm or the hurt carried by any defamatory imputations, if proven. It is the substance and content of the imputations themselves that wound, or possibly, a subsequent failure to apologise for them. The issue of how long it takes for a would be plaintiff to become fully satisfied that defamatory words were uttered by a particular speaker is something else, even in the face of a denial as to authorship from the person.
A claim for aggravated damages on this basis alone would also fail, conceptually, had it been necessary to evaluate.
Overall conclusions
Both plaintiffs' actions must, in consequence of the conclusions now reached under these reasons, be dismissed.
An order dismissing both actions will issue upon publication of these reasons. All associated costs issues will be reserved. Concerning orders as to costs and the like, the parties should have a reasonable opportunity to confer over a minute of orders giving effect to these reasons.
To assist the parties, I observe now that the defendant, having been successful in defeating both actions, is, prima facie, entitled to an award of his taxed costs of defending both actions to their successful outcomes at the trials. Prima facie, some upward adjustment of scale limits in identified respects also seems appropriate, given the complexity of the underlying issues and their scope.
The defendant should prima facie have his costs of two actions, but assessed on the basis of one action, since both actions were tried together.
If the parties cannot agree upon a minute of orders within, say, 14 days, residual issues as to costs and consequential orders seem to me amenable to being resolved by an exchange of programmed written submissions for a determination upon the papers.
Consequently, upon publication of these reasons, I will order that the plaintiffs' actions be dismissed and that all other orders in respect of costs or ancillary orders are to be reserved. Those issues are preferably to be dealt with under either a minute of consent orders or, should there be disagreement, by a programmed exchange of written submissions on the papers.
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