Li v The Herald & Weekly Times Pty Ltd

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMON LAW DIVISION

No. 4641 of 2004

ABBIE LI	First Plaintiff
and
BY FOREVER YOUNG PTY LTD	Second Plaintiff
v
THE HERALD AND WEEKLY TIMES PTY LTD	First Defendant
(ACN 004 113 937)
and
KEITH MOOR	Second Defendant

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JUDGE:	GILLARD J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 to 28 February; 1, 2, 5-9, 13-16, 19, 20, 22, 23 and 27 March 2007
DATE OF JUDGMENT:	20 April 2007
CASE MAY BE CITED AS:	Li & anor v The Herald and Weekly Times & anor
MEDIUM NEUTRAL CITATION:	[2007] VSC 109

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DEFAMATION – Libel – Eight articles in newspapers – Some in same edition – Connected and repeated – The two articles in same edition should be one cause of action – Necessity to read whole article to determine defamatory imputations – May determine damages on global basis - Articles defamatory of person – Claim by company – Articles not defamatory of trading company – Defence of justification established by defendants – Plaintiffs fail – Observations on damages – Claim for loss of income – Necessity of proper pleading and proof – Evidence inadequate and speculative – Evidence – Use of evidence of conduct showing lack of faith in case – Circumstantial evidence.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J.M. Selimi	Starnet Legal Pty Ltd
For the Defendants	Mr W. Houghton QC with	Corrs Chambers Westgarth
Ms G. Schoff

TABLE OF CONTENTS

Parties ...................................................................................................................................................2

Basic Facts and Defamatory Articles ..............................................................................................2

The Issues ..........................................................................................................................................12

Plaintiffs’ Proofs...............................................................................................................................26

Ms Li’s Proofs ...................................................................................................................................33

1. Article 1.....................................................................................................................................34

2. Article 2.....................................................................................................................................39

3. Article 3.....................................................................................................................................40

4. Article 4.....................................................................................................................................40

5. Article 5.....................................................................................................................................42

6. Article 6.....................................................................................................................................43

7. Article 7.....................................................................................................................................48

8. Article 8.....................................................................................................................................53

Ms Li’s Prima Facie Case ................................................................................................................53

By Forever Young Pty Ltd’s Proofs ...............................................................................................54

1. Article 1.....................................................................................................................................54

2. Article 2.....................................................................................................................................55

3. Article 4.....................................................................................................................................56

4. Article 5.....................................................................................................................................57

Company’s causes of action ...........................................................................................................57

The Defences.....................................................................................................................................58

The Articles and Justification ........................................................................................................62

(i) Credibility................................................................................................................................62

(ii) Defence of Justification.........................................................................................................84

(iii) Articles 1 – 5 (inclusive) and 8............................................................................................84

(iv) Articles 6 and 7 ...................................................................................................................108

Conclusions – Liability .................................................................................................................111

(i) Ms Li’s Claims.......................................................................................................................111

(ii) The Company’s Claims ......................................................................................................112

(iii) The Polly Peck Defence of Justification ..........................................................................112

(iv) Defence of Fair Comment .................................................................................................113

Damages...........................................................................................................................................114

Special Damages – Alleged Pecuniary Loss..............................................................................118

CONCLUSION ...............................................................................................................................134

Attachment “A”.........................................................................................................................135

Attachment “B” .........................................................................................................................137

Attachment “C”.........................................................................................................................138

Attachment “D”.........................................................................................................................139

Attachment “E” .........................................................................................................................140

Attachment “F”..........................................................................................................................141

......................................................................................................................................................142

Attachment “G”.........................................................................................................................143

Attachment “H” ........................................................................................................................144

HIS HONOUR:

A proceeding instituted by writ, in which two plaintiffs seek damages for defamation arising out of the publication of eight articles in the Herald Sun newspaper in this State.
Parties
The first plaintiff, Ms Abbie Li (“Ms Li”), is a 48 year old Chinese woman, formerly a registered Chinese herbal medicine practitioner, who carried on practice at Level 4, 24 Collins Street, Melbourne from early 2000 to early 2006.
The second plaintiff, By Forever Young Pty Ltd (“Forever Young”), is a company registered in June 2001, which carried on business at the same premises as Ms Li. Forever Young employed Ms Li, who conducted the company’s business of Chinese natural therapy, including acupuncture and selling herbal remedies and “Forever Young” capsules.
The first defendant, The Herald and Weekly Times Pty Ltd (“The Herald”), is and was at all relevant times the proprietor of the daily newspaper the Herald Sun, which is widely distributed and read throughout the State of Victoria.
The second defendant, Keith Moor (“Mr Moor”), was at all relevant times an experienced journalist employed as Insight Editor by The Herald and acting in the course and scope of his employment.
Basic Facts and Defamatory Articles
Ms Li had been conducting her practice of Chinese natural therapy from premises situated at 24 Collins Street, Melbourne from early 2000. She was born in Shanghai, raised and educated in Beijing and arrived in this country in 1990. She is now an Australian citizen. She first commenced practising Chinese therapy medicine in Victoria in 1993, and in about 1995 practised from 20 Collins Street, Melbourne. In early 2000 she moved the practice to a suite of rooms on Level 4, 24 Collins Street, Melbourne. In 1996, Ms Li registered a business name “C.N.T. Chinese Natural Therapy” and thereafter practised under that name. The business name was noted in the list of tenants on the ground floor of the building at 24 Collins Street and on the door of the premises where the business was carried on. Beneath the business name on the door of the premises was the telephone number and the words:
“ACUPUNCTURE
HERB
REMEDIAL MASSAGE”
Inside the business premises appeared the statement “Chinese Natural Therapy” on a wall in the reception room and underneath that appeared the words:
“FOREVER YOUNG”.
From some time in 2001 until recently, Ms Li called herself Dr Li. The business conducted at Level 4, 24 Collins Street, Melbourne was known as Chinese Natural Therapy. She was entitled to call herself Dr Li provided it was made clear that she was a doctor of traditional Chinese medicine. When her registration under the Chinese Medicine Registration Act 2000 lapsed in mid-2006, her entitlement to call herself a doctor ceased.
On 14 June 2001, the company was registered. Ms Li was the sole director and shareholder of the company. The evidence revealed some confusion as to the particular business being operated by the company Forever Young. It is clear that the company was the manufacturer and distributor of capsules known as “Forever Young”, which were designed and sold as pills that would keep the consumer healthy and feeling young. Ms Li was employed by the company from the date of its registration and was paid a salary. Evidence, scanty as it was, led to the conclusion that the company took over the business that had been operated by Ms Li. This was evident from the copy tax returns of both Ms Li and the company for the years ending 30 June 2002 and following, and the Business Activity Statements lodged on behalf of the business from 1 July 2001. No evidence was produced concerning the acquisition of the business by the company, final company accounts for each year, annual returns or the memorandum and articles of the company. Some receipts of the business were tendered in evidence and the originals did bear the stamp of the company By Forever Young Pty Ltd. The company’s causes of action allege that it had suffered damage to its trading reputation and that it claimed economic loss as a result. The initial particulars which referred to an accountant’s report claimed a substantial loss of business by the company, allegedly as a result of the publication of the defamatory articles. The case was opened on that basis, namely, that Forever Young operated the business from 1 July 2001 and that Ms Li during all relevant times was employed by the company on an annual salary of $36,400. The tax returns provided some evidence of that trading situation.
The Chinese Medicine Registration Act 2000 (“the Act”) was enacted in the year 2000. The majority of the Act came into operation on 1 January 2002. The Act had a number of purposes, one of which was to register persons as Chinese herbal medicine practitioners and another of which was to regulate the sale of Chinese herbal medicine. The sections of the Act dealing with the registration of natural persons as Chinese herbal medicine practitioners and acupuncturists came into operation on 1 January 2002. Ms Li made application and was registered as a Chinese herbal medicine practitioner and an acupuncturist at the beginning of January 2002. The company Forever Young was not registered under that Act. By reason of s.4, only a natural person can be registered under the Act. The evidence revealed that the company Forever Young conducted the Chinese natural therapy business from 1 July 2001 through to when Ms Li’s registration under the Act lapsed in mid-2006. This is despite the fact that she had registered herself as the proprietor of the business in 1996. Questions were asked of both Ms Li and her accountant, Mr Dunstan, as to the existence of any documentation relating to the acquisition of the business by the company, but none was forthcoming.
Section 61 of the Act makes it an offence for a person, including a company, who is not registered to take or use the title of a registered Chinese practitioner or “any other title, whether in English or any other language, calculated to induce a belief that the person is registered as a practitioner under this Act.”[1]
[1] See s.61(1)(a).
Section 61(1)(c) makes it an offence “to carry out any act which is required to be carried out by or under an Act by a person registered as a practitioner under this Act.” It is also an offence for a person not registered, and this would include a company, to claim to be qualified to practise as a Chinese medicine practitioner. See s.61(1)(d). Section 61(2) makes it an offence for a person, including a company, who is not registered to use the title “Chinese medicine practitioner” or “Oriental medicine practitioner”. Section 61(3) makes it an offence for a person, including a company, who is not registered as a Chinese herbal medicine practitioner or as an acupuncturist to use a title to suggest that he, she or it is. There is no doubt that s.61 applies to a body corporate. This is clear from s.61(10), which provides that if a body corporate contravenes sub-s.(1), any person involved in the contravention is guilty of an offence. Section 63 deals with advertising and a person, which would include a company, must not advertise a Chinese medicine practice or Chinese medicine services in a manner which is intended to be misleading or deceptive or refers to or uses or quotes from testimonials or purported testimonials. It is clear from s.63(2) that the sub-section applies to a company because any person involved in the commission of the offence on behalf of the company is liable to a penalty.
During Ms Li’s evidence, the Court drew attention to the Act and raised the question whether the company was permitted to conduct the business of Chinese natural therapy. Counsel for the plaintiffs appeared to accept that it was not so permitted and as a result the alleged pecuniary loss suffered as a result of the publications was then claimed by Ms Li and not the company. The accountant who was called on behalf of the plaintiffs prepared a new report, in which the bulk of the economic loss was claimed by Ms Li. This change of approach created a number of problems for the plaintiffs. The fact was that the business during the relevant period was conducted by the company Forever Young. What was sought by the change in approach was to re-write the nature of the business activities and who was conducting the business. No mention was made of lodging amended taxation returns with the Australian Taxation Office.
The evidence revealed that on the dates of all the publications complained of, the business known as Chinese Natural Therapy was owned and operated by the company Forever Young and Ms Li was an employee.
On 26 May 2003, an article concerning Dr Li and referring to her running the business Forever Young was published in the Herald Sun newspaper of that day. At the bottom of page 1 appeared the following words:
“MEDI-BONK – REVEALED: The dodgy Collins Street doctor charging sex massages to your health insurance, EXCLUSIVE REPORT PAGE 3.”
A small photograph of Dr LI appeared between the words “MEDI-BONK” and
“REVEALED”.
The heading on page 3 was:
“INSIGHT HEALTH INSURANCE FRAUD

ƒ Doctor admits ƒ Medi claim for

fake receipts. brothel service.
Medi-bonk: the
sex cheat Doc.”

The article took up most of page 3 and contained two photographs of Dr Abbie Li and a photograph of the ground floor entrance to the premises at 24 Collins Street, Melbourne. One of the photographs showed Dr Abbie Li in front of the sign “Forever Young”. There is no doubt that the article critically attacks Dr Li, who is the subject of it, and the reference to “Forever Young” is in a context that Dr Li was running that business.
Ms Abbie Li and the company Forever Young claim that they were defamed by the words appearing on page 1 and the article on page 3 (“1st article”).
Attached to these reasons and marked with “A” is a copy of the front page and page 3 of the newspaper.
The article which appeared on page 3 noted at the end of the fifth column, the following:
“BROTHEL aids
medi fraud, Page 23.”
An article appeared on page 23 of the same newspaper under the heading:
“Brothel aids medi fraud”.
Immediately below that was a smaller heading, which stated:
“An illegal brothel on ritzy Collins Street is providing sex
services with false receipts that can be claimed on private health insurance. KEITH MOOR reports.”
Included in the article is another photograph of Dr Abbie Li, who is said to be a “brothel operator”, and a photograph showing two packets of pills, two receipts and a business card of By Forever Young Pty Ltd with the name “Dr Abbie Li TCM”. Much of the article repeats what was said in the first article.
Both plaintiffs claim that this article also defames each of them (“2nd article”).
Attached to these reasons and marked “B” is a copy of the article.
On the following day, 27 May 2003, The Herald published an article on page 10 under the heading:
“Powers pounce
on sex frauds
Medi-bonk: the
sex cheat doc.
Yesterday’s Herald Sun.”
This article included a photograph of Dr Abbie Li said to be “weeping”, and it repeated much of what had been said the previous day and noted that there was a likely three-way investigation into the activities of Dr Abbie Li.
The first plaintiff, Ms Li, claims that the article defamed her (“3rd article”).
Attached to these reasons and marked “C” is a copy of the article.
Nearly two months later, on 14 July 2003, in an early edition of the Herald Sun published and distributed that day appeared an article under the heading:
“HBA bans
‘Medi-bonk’
herbalist”
This article included a small photograph of Abbie Li and it was noted that she had been struck off HBA’s list of recognised service providers. Again, the allegations that had been revealed in May were repeated and it was noted that there were a number of bodies investigating Ms Li’s activities.
Both plaintiffs claim that the article defamed them (“4th article”).
Attached to these reasons and marked “D” is a copy of the article.
On the same day, in a later publication of the paper, The Herald published an article under the heading:
“HBA bans
‘Medibonk’
Herbalist”
This article is a condensed form of the article which appeared earlier that day, and it repeats the same serious allegations against Ms Li.
Both plaintiffs claim that they were defamed by this article (“5th article”).

Attached to these reasons and marked “E” is a copy of the article.
Soon after the first article was published, a conman, Michael Williams, made contact with Ms Li and offered his assistance. She stated in evidence that she thought he was a lawyer. She provided certain information to him, including documents relating to the business. Some time around July 2003, Ms Li engaged a firm of solicitors, Coadys, in relation to the defamatory articles. The firm wrote a letter of demand to the defendants, whose solicitors responded by denying any liability. No proceeding was instituted on behalf of either plaintiff at that stage. Coadys ceased to act for the plaintiffs. Ms Li continued to have substantial contact with the conman Williams and during the months of September and October spent many days with him, giving him instructions and also documents. Williams died at the end of October 2003.
In early February 2004, Mr Moor attended on Ms Li at the Collins Street premises and asked her to listen to a tape recording which he had obtained from the conman Williams. The tape purported to contain recorded conversations between the conman and Ms Li. The conversations covered alleged sexual relationships with a former Federal politician and a Melbourne barrister. The evidence revealed that Ms Li, after listening to the tape, admitted her voice was recorded on the tape, became extremely annoyed with Mr Moor and refused to talk to him. On 20 February 2004, a proceeding was instituted in this Court by the plaintiffs’ present solicitors, the plaintiff at that time being By Forever Young Pty Ltd, which sought damages against The Herald and Mr Moor for the publication of defamatory articles in the previous year. Ms Li was not joined as a party. The statement of claim is carefully drawn. It is asserted that the company was carrying on business at Suite 1, Level 4, 24 Collins Street, Melbourne and that the articles published on 26 May 2003, 27 May 2003 and 14 July 2003 were defamatory of the company and disparaged its business. The particulars of the alleged defamatory imputations asserted that “the plaintiff through its director Dr Li” was intentionally committing fraud on health insurers, operating an illegal brothel, issuing receipts for acupuncture when she did not perform such treatment, issuing receipts for remedial massages when she did not provide such treatment, providing sexual services to a customer, and a number of other alleged defamatory imputations. It is noted that the alleged defamatory imputations involved the conduct of Dr Li. Whether the writ was served before the next article was not clarified in evidence.
On 23 February 2004, The Herald published in the newspaper an article concerning Ms Li. At the top of page 1 appeared the words:
“BLACKMAIL
REVEALED:
THE FEDERAL MP,
THE LAWYER & THE CONMAN – Page 5”
Appearing to the right of this headline is a photograph of the conman Williams.
On page 5 appeared an article under the heading:
“The conman, the federal
MP and the lawyer
Blackmail”
The article was also written by Mr Moor. It contained three photographs. The top photograph showed the sign on the door of Dr Li’s business, which contained the words “Chinese Natural Therapy”, the business telephone number and the services provided. There was a photograph of Dr Li with the statement underneath that she “ran an illegal brothel from her natural therapy business.” There was also a large photograph of the conman Michael Williams.
The article in the main dealt with the conman Williams, but nevertheless contained a number of serious allegations made against Dr Li.
Ms Li claims that the front page and article defamed her (“6th article”).
Attached to these reasons and marked with “F” is a copy of the front page and the article.
The article on page 5 took up the whole page and at the foot of the seventh column appeared the words:
“The missing tape, Page 12”
In the same edition of the Herald Sun at page 12, appeared an article under the heading:
“Case of the missing tape
Mystery unsolved as contact died”
This article took up most of page 12. It contained a photograph of the front of the building at 24 Collins Street, Melbourne. It repeated much of what was said in the earlier article, although it did add further allegations.
Ms Li claims that the article defamed her (“7th article”).
Attached to these reasons and marked “G” is a copy of the article.
The writ issued on behalf of the company Forever Young was served sometime in February 2004 and the defendants entered an appearance on 26 February 2004.
On 17 June 2004, The Herald published an article in the newspaper on page 15 under the heading:
“Police arrest
brothel owner”
The article contained two photographs of Dr Li, one taken in the year 2003, and another taken when she was arrested on the previous day, 16 June 2004. The article noted that detectives took her in for questioning after executing a search warrant on her business, and it went on to repeat some of the serious matters that had been alleged against her in previous articles.
Ms Li claims that the article defamed her (“8th article”).
Attached to these reasons and marked “H” is a copy of the article.
On 29 April 2004, a summons was issued by the plaintiff’s solicitors seeking orders, inter alia, that the proceeding be entered in the Major Torts list and Ms Li be added as a plaintiff in the proceeding. On 25 June 2004, Bongiorno J ordered that the proceeding be entered into the Major Torts list and the summons was otherwise adjourned to 17 September 2004. On that day, it was adjourned to 24 September 2004. It was adjourned again. On 23 November 2004, the plaintiff company changed solicitors. On 10 December 2004, Ms Li was joined as a party to the proceeding. This was some 18 months after the first publication complained of. Ms Li was granted leave to file an amended statement of claim. Ms Li pleaded eight causes of action in libel and sought general damages and also damages for a significant loss of custom suffered by her. The second plaintiff, the company Forever Young, also sought damages.
The author of each of the publications complained of was the second defendant, Mr Moor.
The Issues
Ms Li claims she was defamed in each of the articles and accordingly has eight causes of action in libel against the defendants. The company Forever Young claims that it was defamed in the first, second, fourth and fifth articles.
The Defamation Act 2005 came into operation on 1 January 2006. The new Act does not apply to this proceeding.[2] Accordingly, this proceeding is to be considered and determined in accordance with the common law.
[2] See s.46(1) of the Act.
Ms Li has the burden of proving the following elements in each cause of action in libel on the balance of probabilities:
(a)       that the words were published of and concerning her;
(b)      that the words were in a permanent form;
(c)       that the words were published to a third person;
(d)      that the words were published by the named defendants;
(e)       that the words were defamatory of her.
As The Herald is the proprietor of the newspaper Herald Sun and responsible for its publication, it is unnecessary for Ms Li to prove that Mr Moor, its employee, was acting in the course and scope of his employment with The Herald. However, in any event, it has been admitted.
Subject to the defendants establishing any defence to the prima facie case, Ms Li is entitled to recover an award of damages if she establishes the above elements of proof. Damages are presumed and she is not required to prove any actual damage. Ms Li has pleaded that she suffered a significant psychiatric reaction to the articles and continues to suffer from a psychiatric condition. In addition, she claims that she has suffered significant loss of custom and economic loss. Accordingly, if she establishes her case and the defendants fail to establish any defence to her case, she has to prove those matters if she wishes to claim damages in respect economic loss.
In each of Ms Li’s causes of action the alleged defamatory imputations are said to arise on the normal meaning of words, that is, she relies on the false innuendo. Whether the words are defamatory is a question of fact and involves two issues. They are, what do the words mean, and are the imputations defamatory? The intention of the defamer is not relevant to the question of liability. Whether or not the words are defamatory is a matter for the tribunal of fact, namely, myself as a judge sitting alone, and no evidence can be called to establish what the words mean or whether they were defamatory. In Reader’s Digest Services v Lamb,[3] Brennan J, speaking for the Court, said:[4]
“Where no true innuendo is pleaded and the published words clearly related to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees – Lord Selborne’s reasonable men … or Lord Atkin’s right thinking members of society generally or Lord Reid’s ordinary men not avid for scandal … - would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation.”
(Emphasis added).
[3] (1982) 150 CLR 500.
[4] At 505.
In considering the issues it is necessary to take into account what the reasonable, average reader would think when he or she reads the article. It does involve a matter of impression and, to an extent, a degree of loose thinking. It is accepted that the average person has a greater capacity to draw an inference than a lawyer. The average reader relies upon his general knowledge, experience of human affairs and common sense.[5]
[5] See Mirror Newspapers v Harrison 149 CLR 293 at 301.
Whether or not the words are defamatory depends upon whether the words lower the plaintiff in the estimation of right-thinking people generally. Lord Atkin in Sim v Stretch, [6] speaking for the House of Lords, stated the test as follows:
“The question, then, is whether the words in their ordinary signification are capable of being defamatory. Judges and textbook writer alike have found difficulty in defining with precision the word ‘defamatory’. The conventional phrase exposing the plaintiff to hatred, ridicule and contempt is probably too narrow. The question is complicated by having to consider the person or class of persons whose reaction to the publication is the test of the wrongful character of the words used. I do not intend to ask your Lordships to lay down a formal definition, but after collating the opinions of many authorities I propose in the present case the test: would the words tend to lower the plaintiff in the estimation of right-thinking members of society generally?”
[6] See Sim v Stretch [1936] 2 All ER 1237 at p.1240.
His Lordship’s test has been often quoted, and always with approval, and is regularly applied in the cases in determining whether or not the words complained of are defamatory of the plaintiff.
The defendants in their defence have raised a number of issues. They do not dispute that the words were published of and concerning Ms Li, that the words were in permanent form and published to readers of the paper, and that the defendants were responsible for the publication. However, they put in issue the element of proof whether the words were defamatory of Ms Li. They also put in issue the question of damages, including the allegation of mental injury and the claim for monetary loss.
It is well established law that in considering and determining the question whether the words complained of are defamatory, the context in which the words are used must be considered. As a general rule, the defendant publisher is entitled to have the whole of the publication in which the words complained of appear before the Court, in order to determine whether the words, taken in context and after considering the article as a whole, defame the plaintiff. It is not open to the plaintiff to seek to exclude other parts of the article. The other parts may qualify the meaning of the words complained of. In the old case of Chalmers v Payne,[7] Alderson B at ER p.68 said:
“In one part of this publication, something disreputable to the plaintiff is stated, but that is removed by the conclusion; the bane and the antidote must be taken together.”
[7] (1835) 2 C M & R 156; 150 ER 67.
That principle has been applied often. See Gatley on Libel and Slander[8] and John Fairfax Publications Pty Ltd v Rivkin.[9]
[8] 10th ed at para 3.29.
[9] (2003) 77 ALJR 1657 at para 187.
Another principle of law, which is well established and cannot be ignored, is that the words in the end have but one meaning.[10] The natural and ordinary meaning is that meaning which is reasonably understood by the ordinary reader using his or her general knowledge, experience of life and common sense.
[10] Reader’s Digest Services v Lamb, supra at p.505.
Articles 1 and 2 were printed on the same day and in the same newspaper. The first article comprises the headline which appeared on page 1 and the article which appeared on p.3, and the second article appeared at page 23. Both articles dealt with the same material, the first article referred to the second article and the alleged defamatory imputations are the same or very similar. In my opinion, the two articles should not have been the subject of separate causes of action.
The first article referred to the second. The second article repeated much of what the first had to say. The articles appeared in the same newspaper, separated by 20 pages. It is a reasonable inference that the reasonable reader would have read both articles within a space of minutes. To divide the publication into two separate causes of action cuts across the rule that the defendant publisher is entitled to have the whole article considered and the words complained of construed in context and after taking into account the words as a whole.
It is important from the publisher’s point of view to have the whole article considered on the issue of whether the words are defamatory. The circumstances of the publication, the words used and the context may have an effect upon the imputation conveyed to the reasonable reader. The rule that the publication must be taken as a whole has been the law for many years. In Thornton v Stephen,[11] it was held that in an action for a libel contained in a newspaper, the publisher had the right to have read as part of the plaintiff’s case another part of the same newspaper referred to in the libel complained of. This was to determine the meaning of the words and whether they were defamatory. The general rule may have to be qualified where a plaintiff only sues in respect to a distinct and severable charge without the common sting. That is not the position in the present case. See also Hedley v Barlow.[12]
[11] (1837) 2 M & ROB 45; 174 ER 209.
[12] (1865) 4 F & F 225 at 228; 176 ER 541 at 542.
In Gordon v Amalgamated Television Services Pty Ltd,[13] Hunt J said:[14]
“Where the publication sued upon is in written form, a plaintiff is obliged to include within his pleading every passage which materially alters or qualifies the complexity of the imputation complained of … the justification of that rule is the principle that the effect of the matter complained of must be taken from the whole of what has been published.”
See also World Hosts Pty Ltd v Mirror Newspapers Ltd.[15]
[13] [1980] 2 NSWLR 410.
[14] At 413.
[15] [1976] 1 NSWLR 712 at 725.
In Burrows v Knightley,[16] Hunt J summarised the law as follows:[17]
“Where the matter complained of contained in a newspaper refers to other material in the same newspaper, the plaintiff may be required to tender that other material in his case: [authorities referred to] provided that such other material is capable of affecting the sense of the matter complained of: [authorities referred to]. Where there are two separate publications by the defendant, the plaintiff is entitled to (or may be obliged to) have them considered together in order to determine the sense in which either was understood, provided that they are sufficiently connected and identified with each other [authorities referred to].”
[16] (1987) 10 NSWLR 651.
[17] At 655 et seq.
The principles have been recently discussed in a number of New South Wales cases – see the recent Court of Appeal decision of The Age Corporation Limited v Beran.[18]
[18] [2005] NSWCA 289.
Speaking for the Court, Hodgson JA said in that case:[19]
“42. There may be cases where reasonably-minded people could consider either classification valid, so that it is prima facie open for a plaintiff to plead parts as individual publications, and also plead their combination as a publication, but nevertheless where this should not be permitted because it introduces confusion and complexities into the case wholly unwarranted by any advantage to the plaintiff, and thus can be considered embarrassing. …
43. The question then is, is the material as published in The Age such that the only view reasonably open is that this was one publication? In my opinion, plainly not. No part of the second section of The Age material appeared on page 1; and the first section on page 1 did not indicate that what was on page 13 was to be read together with what was on page 1 as part of the same whole. … Reasonable readers could well read what appeared on page 1 of The Age and not read what appeared on page 13. In my opinion, this was a case where reasonably-minded people could regard the two sections as separate publications, and could also regard them as part of a whole: that is, they could regard both possible classifications as being valid.”
[19] At [42] – [43].
His Honour went on to observe that it was not a case where pleading the two sections separately introduced such complexity or confusion that it should not be permitted. It is noted that his Honour’s observations were made in relation to a pleading summons and, secondly, his Honour’s observations were in respect to a proceeding in New South Wales subject to the Defamation Act 1974.
Nevertheless, in my respectful opinion, the observations made by Hunt J do apply to the present proceeding. In my opinion, it is open to the defendants to require the Court in considering the question of whether the words complained of were defamatory of Ms Li to consider both articles which appeared in the same newspaper.
The approach of dividing up the cause of action also creates some difficulties in relation to damages. This is because a plaintiff would be entitled to recover damages in respect to each separate cause of action. Fortunately, this is a difficulty that can be overcome. In Barber v Pigden,[20] the jury was directed to consider three separate slanders as one for the purpose of determining the quantum of damages. The Court of Appeal held that there was nothing in the Judicature Act or Rules of the Court which specified that separate verdicts and judgments were invariably necessary in respect of separate causes of action contained in the same writ. The question whether one or more causes of action could be included in one verdict or judgment depended upon the exercise of a trial judge’s judicial discretion in all the circumstances of the case. In that case, there was no objection to the course taken at trial. The case stands for the proposition that in appropriate cases, one may consider separate causes of action as one for the purpose of determining the total damages. This may overcome the problem of the separate causes of action in respect to the one newspaper publication. However, there may be problems relating to the making of offers of compromise if it is left to trial the question whether the Court should assess a global sum for two or more causes of action. However, I would think that in the circumstances, the Court could take into account on the question of costs whether offers were made and the effect of same.
[20] [1937] 1 KB 664.

In my opinion, in this case the articles which appeared in the same edition of the newspaper should have formed one cause of action. That is, articles 1 and 2, and articles 6 and 7. They were connected, they dealt with much the same subject matter, and the alleged defamatory imputations were similar. Articles 4 and 5 appeared in separate editions of the newspaper on 14 April 2003 and the second article was an abridged version of the first, and I think in those circumstances it was appropriate to treat them as separate causes of action.
However, no objection was taken to dividing up the articles into separate causes of action and the case was presented, conducted and concluded on that basis. Accordingly, the Court will treat each article as a separate cause of action and consider and determine each cause of action separately. However, in my opinion, the defendant is entitled to rely upon both articles in the publications on 26 May 2003 and on 23 February 2004 to determine whether the words complained of in each article were defamatory and in what sense.
The defendants relied upon three defences. The onus of proof rests upon each defendant. The standard is on the balance of probabilities.
In accordance with the modern practice, Ms Li pleaded the defamatory imputations which she relies upon in each article. However, she is not strictly bound by the pleaded imputations. In the end, the meaning of the words and their defamatory nature is a question for the tribunal of fact, in this case myself, as the judge sitting alone.[21] On the other hand, the pleaded imputations delineate the issues with respect to the meanings and whilst the Court would permit a degree of variation of the pleaded imputations, in the sense that the tribunal of fact may not necessarily accept the imputation as pleaded, the plaintiff, Ms Li, is bound by those imputations. The defendants have pleaded justification to the imputations pleaded by Ms Li. However, the defence specified which particular imputations the defence of justification meets. It is the contention of each defendant that the imputations which are not the subject of the plea of justification are not defamatory imputations.
[21] See Barclay v Cox [1968] VR 664.
The law presumes that the defamatory words complained of are false and Ms Li does not have to prove that they are untrue. The defence is concerned with meeting the sting of the defamation, that is, the defamatory imputations as found by the tribunal of fact. The publisher must not only prove the truth of the words complained of in their literal meaning, but also the truth of the defamatory sting. The defence must meet the sting of the matter complained of. In Howden v The Truth and Sportsman Ltd,[22] Dixon J said:[23]
“The defence depends upon the substantial truth of the defamatory meanings conveyed by a libel. Every material part of the imputations upon the plaintiff contained in the words complained of must be true; otherwise the justification fails as an answer to the action.”
(Emphases added).
[22] (1937) 58 CLR 416.
[23] At p.420-1.
At common law it is not necessary for the defendants in this proceeding to prove the truth of every detail of the words established as defamatory. In the very early case of Edwards v Bell,[24] decided in 1824, Burrough J said:
“As much must be justified as meets the sting of the charge, and if anything be contained in the charge, which does not add to the sting of it, that need not be justified.”
[24] (1824) 1 Bing 403 at 409; 130 ER 162 at 165.
In the case of Sutherland v Stopes,[25] Lord Shaw said:[26]
“It remains to be considered what are the conditions and breadth of a plea of justification on the ground of truth. The plea must not be considered in a meticulous sense. It is that the words employed were true in substance and in fact. I view with great satisfaction the charge of the Lord Chief Justice when he made this point perfectly clear to the jury, that all that was required to affirm that plea was that the jury
should be satisfied that the sting of the libel or, if there were more than one, the stings of the libel should be made out. To which I may add that there may be mistakes here and there in what has been said which would make no substantial difference to the quality of the alleged libel or in the justification pleaded for it.”
(Emphases added).
[25] [1925] AC 47.
[26] At p.79.
It is open to the defendant to prove partial justification of the defamatory words complained of. This can arise where the words complained of contain more than one defamatory imputation or are severable in some way. In those circumstances, the defendant may justify part only of the defamatory words. This is not a defence. At common law the defendant remained liable to pay damages in respect to the part not justified.
More recently in Plato Films Ltd v Speidel,[27] Lord Denning said:[28]
“Although the newspaper cannot justify in whole it can justify in part. It can plead that, in so far as the words meant that he had been convicted twice, they were true and thus bring the two convictions before a jury … This rule is based on sound sense. Seeing that the law does not permit a defendant, in mitigation of damages to produce evidence which tends to justification, it must permit him to adduce the self same evidence when pleaded in partial justification … if it were not so, the plaintiff would recover damages for a character which he did not possess or deserve; and this the law will not permit.”
[27] [1961] AC 1090.
[28] At p.1142.
In addition to the justification defence, the defendants have pleaded what is known as a Polly Peck defence.[29] The progenitor to the Polly Peck decision was an earlier decision of Lucas-Box v News Group Newspapers Ltd.[30] In that case, the Court of Appeal held that a defendant publisher who sought to plead justification to meanings different but similar to those relied upon by the plaintiff, was bound to plead those meanings. The defence is well established law in England and is available in Australia, although some criticism has been made by two members of the High Court in Chakravarti v Advertiser Newspapers Ltd.[31]
[29] See Polly Peck (Holdings) plc v Trelford [1986] QB 1000.
[30] [1986] 1 WLR 147.
[31] (1998) 193 CLR 519.
In Herald and Weekly Times Ltd v Popovic,[32] I discussed the defence at pp.62 et seq. At page 67, I said:
“In my opinion, the Polly Peck defence is appropriate where first the plaintiff does not plead the proper imputations arising from the words complained of and forming the basis of the plaintiff’s case, and secondly, where there is a common sting which is not separate and distinct from the way the plaintiff has pleaded his case. Justice and fairness to both parties require a Polly Peck defence where a defendant proposes to plead justification in relation to meanings which are conveyed by the words complained of forming the basis of the plaintiff’s case. But the defence is not available as a partial justification and is not available where there is a separate and distinct defamatory imputation not relied upon by the plaintiff which is not inextricably bound up with the way the plaintiff has pleaded the imputations. The Court must be vigilant to ensure that what is pleaded as a Polly Peck defence is a proper and permissible one.”
[32] (2003) 9 VR 1.
The defendants have pleaded a Polly Peck defence in relation to the front page headline and the first article when read together, and the third, fourth and fifth articles, and have pleaded what the words meant and were understood to mean. Particulars have been given.
Finally, the defendants have relied upon the defence of fair comment upon a matter of public interest. Like the other two defences, the defendants have the burden of proof. In the Popovic case, I discussed the defence of fair comment at pp.53 et seq. I adopted what Lord Nicholls said in Cheng v Tsey Chun Paul,[33] when his Lordship was sitting as a member of the Court of Final Appeal in Hong Kong. In order to prove the defence, His Lordship said it was necessary to prove:
[33] [2003] HKLRD 418.
“First, the comment must be on a matter of public interest. Public
interest is not to be confined within narrow limits today.
Second, the comment must be recognisable as comment, as distinct
from an imputation of fact …
Third, the comment must be based on facts which are true or
protected by privilege … if the facts on which the comment purports
to be founded are not proved to be true or published on a privileged
occasion, the defence of fair comment is not available.
Next, the comment must explicitly or implicitly indicate, at least in general terms, what are the facts on which the comment is being made. The reader or hearer should be in a position to judge for himself how far the comment was well founded.
Finally, the comment must be one which could have been made by an honest person however prejudiced he might be, and however exaggerated or obstinate his views.”
Whether the matter is a matter of public interest is a question of law. The other elements of proof are questions of fact.
The plaintiffs have not delivered a reply to the defences.
The issues can therefore be summarised as follows:
(i)       Were the words complained of defamatory in the meanings stated by the Ms Li?
(ii)      Have the defendants established their defence of justification?
(iii)    In the alternative, have the defendants proven the Polly Peck defence?
(iv)    In the alternative, if the defendants have failed to prove the defence of justification, have they proven fair comment?
Turning to the claim by the company Forever Young, it is noted that it is a body corporate. A corporation has only a limited right to protection from the publication of defamatory words. The general rule is that a trading corporation may bring an action in respect of the publication of a defamatory matter which affects its business or trading reputation. For example, an allegation which attacks the honesty of the business methods employed by the corporation.[34] Other examples may be an attack upon the financial position of a trading company and a critical appraisal suggesting inefficiency. On the other hand, a corporation cannot be injured in its feelings, which means that allegations that would be actionable at the suit of an individual would not be defamatory of a corporation.
[34] See South Hetton Coal v North Eastern News Association [1894] 1 QB 133.
The present proceeding is complicated by the fact that in the articles there is no reference to a company By Forever Young Pty Ltd but there is a reference to a trading name “Forever Young”. A trading firm – and this would include a trading business name - could be defamed in its trading name. In the South Hetton Coal case,[35] Lord Esher MR said:
“With regard to a firm or a company, it is impossible to lay down an exhaustive rule as to what would be a libel on them. But the same rule is applicable to a statement made with regard to them. Statements may be made with regard to their mode of carrying on business, such as to lead people of ordinary sense to the opinion that they conduct their business badly and inefficiently. If so, the law will be the same in their case as in that of an individual, and the statement will be libellous.”
[35] supra, at p.139.
However, a firm and a business name are not legal entities. By reason of the Rules of Court, it is open to sue in the name of a firm. However, where a person trades as a business name, it is necessary to sue in the name of the person. It is well-established that the partners in a firm may bring a proceeding jointly in respect of words published which are defamatory of the firm as a whole. There are complications in the present proceeding because the company By Forever Young Pty Ltd has sued on the basis that the words complained of conveyed to the reasonable reader that the company had been libelled in a business sense. But as earlier stated, that company, although it purported to conduct the business of Chinese natural therapy, was not permitted to operate a business as a Chinese herbal medicine practitioner or an acupuncturist.
In order for a trading corporation to establish a case in libel, it is necessary for the company to prove the following:
(a)       That the words complained of were published of and concerning it;
(b)     That the said words concerned its business or trading reputation;
(c)       That the words were in a permanent form;
(d)      That the words were published to a third person;
(e)       That the words were published by the named defendants;
(f)       That the words were defamatory of it in its business or trading reputation.
No claim has been made by any legal entity alleged to be trading as the name “Forever Young”.
The defendants’ defence put in issue whether the words complained of were defamatory of the trading reputation of the company, and also whether the words were published of and concerning the company. Otherwise, the other elements of proof were admitted.
The defendants also rely upon the defences of truth and fair comment against the company Forever Young. Accordingly, the issues are:
(i)       Did the company Forever Young have a business trading reputation?
(ii)      Were the words complained of published of and concerning the company?
(iii)    Are the words complained of defamatory of the trading or business reputation of the company Forever Young?
(iv)    If the words complained of were defamatory of the trading reputation of the company, have the defendants proven the truth of the defamatory imputations?
(v)      In the alternative, have the defendants proven the defence of fair comment?
A matter that must be considered in relation to the claim brought by the company Forever Young is that the company is not named in the articles and the context in which the name “Forever Young” was used is stated, that is, that Dr Li traded as Forever Young. What the reasonable reader understood by the words used and what they conveyed, are matters that will have to be considered and determined. As published, the articles refer to what is a business name. The articles convey that the business name was operated by Dr Li. But the articles deal with Dr Li’s conduct in operating the business. These matters will have to be further considered.
Plaintiffs’ Proofs
Ms Li claims that each of the eight articles was defamatory of her. The company Forever Young claims that it was defamed in the first, second, fourth and fifth articles published on 26 May 2003 (two articles) and 14 July 2003 (two articles). It is necessary to consider each article and to determine the meaning of the words complained of and whether they were defamatory.
A person communicates his or her thoughts and intentions by his or her native language. We are dealing with the publication of a number of articles in Australian English. What the writer may have intended to convey may not be properly expressed. On the other hand, the person who reads the words may arrive at a different conclusion than that intended by the writer. There is no doubt, and it is a trite observation, that different minds may come to different conclusions upon reading the same words. As has been said many times, Australian English is at best an imperfect means of expressing one’s thoughts, hopes and intentions. The language may be ambiguous, obscure or uncertain, or the reader may not possess a particularly good knowledge of language and may understand the words in a completely different way to that intended by the writer. As Diplock LJ said in Slim v Daily Telegraph Ltd:[36]
“Everyone outside a court of law recognises that words are imprecise
instruments for communicating the thoughts of one man to another.”
[36] [1968] 2 QB 157 at 171.
This trial is by judge alone. The meaning of the words complained of and whether they are defamatory of and concerning the plaintiff are questions best answered by a jury. When a judge has to decide the questions, the judge has to be careful that he or she does not approach the questions in a formal way, such as the manner in which one might approach the interpretation of a will. Hence, an overly meticulous approach to the question does not accord with the process that the average reader of a newspaper such as the Herald Sun engages in.
The average person reads the article usually only once, may be attracted to the article by the headline, and gains at best an impression of what is being conveyed by the language.
I respectfully agree with what Callinan J said in John Fairfax Publications v Rivkin,[37] where his Honour said:
“It is true that an article has to be read as a whole. But that does not mean that matters that have been emphasised should be treated as if they have only the same impact or significance as matters which are treated differently. A headline, for example, expressed pithily, and necessarily incompletely, but designed to catch the eye and give the reader a predisposition about what follows, may well assume more importance than the latter. … The order in which matters are dealt with can be significant. The capacity of the first paragraph of an article, the ‘intro’, to excite the reader’s attention is a matter upon which editors place store. The language employed is also of relevance. …
True it may be that readers may take an article or articles on impression, but the fact that they may do so is likely to have the consequence that ideas and meanings conveyed by graphic language will create the strongest impressions. Of course publishers are entitled to use colourful and seductive language, but in using it they may run the risk of seducing readers into believing only what is colourful and on occasions scandalous, rather than the facts conveyed by straight reportage.”
[37] (2003) 77 ALJR 1657 at 1699.
The principles which guide the tribunal of fact to determine what the words mean and whether they are defamatory of and concerning the plaintiff have been discussed in a variety of cases. It has been accepted by the courts that the average reader is more likely to read into words matters that on a strict analysis of the words used would not be conveyed. The average person is more likely to find that particular words are defamatory than a lawyer or judge.
Lord Reid in Lewis v Daily Telegraph[38] said:
“The ordinary man does not live in an ivory tower and is not inhibited by the knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs.”
[38] [1964] AC 234 at 258.
Following on from what his Lordship said in that case, he stated in Morgan v Odhams Press Ltd:[39]
“If we are to follow Lewis’ case … and take the ordinary man as our guide then we must accept a certain amount of loose thinking. The ordinary reader does not formulate reasons in his own mind: he gets a general impression and one can expect him to look again before coming to a conclusion and acting upon it. But formulated reasons are very often an afterthought.
The publishers of newspapers must know the habits of mind of their readers and I see no injustice in holding them liable if readers, behaving as they normally do, honestly reach conclusions which they might be expected to reach. If one were to adopt a stricter standard it would be too easy for purveyors of gossip to disguise their defamatory matter so that the judge would have to say that there is insufficient to entitle the plaintiff to go to trial on the question of whether that matter refers to him, but the ordinary reader with perhaps more worldly wisdom would see the connection and identify the plaintiff with consequent damage to his reputation for which the law would have to refuse him reparation.”
[39] [1971] 1 WLR 1239 at 1245.

In approaching these questions, it is necessary to take into account the whole article.
It is well established that not only must the words complained of be taken in context, but also the particular article must be considered as a whole. Hence, innocent words may by reference to the balance of the article be defamatory, and words which may appear to be defamatory, when read in context and taking into account the publication as a whole, may not convey to the reasonable reader a defamatory imputation.[40]
[40] See Neville v Fine Arts Co [1897] 1 AC 68 at 72, and Capital and Counties Bank v Henty (1882) 7 App Cas 741 at 771.
Nevertheless, although one must consider the words in context and taking into account the whole article, it does not follow that the tribunal of fact must treat each part of the words complained of as having equal impact. The location of the words, the words used, and any particular emphasis, may all lead to a conclusion that the words, taken in context and after considering the article as a whole, are defamatory.
It follows that although part of an article may convey a defamatory meaning, that defamatory meaning may be excluded by a consideration of the whole article.
Another principle of law which has been well established, and which is apposite in considering the later articles, concerns words which publish views of a defamatory nature of a third party. It is no defence to repeat what others have said, whether it be rumour or assertion, and say that the publisher is not liable for the publication. The law stated in the 4th edition of Gatley on Libel and Slander[41] was endorsed by the Privy Council in “Truth” (NZ) Ltd v Holloway[42] as follows:
“Every re-publication of a libel is a new libel, and each publisher is answerable for his act to the same extent as if the calumny originated with him.”
[41] At 106.
[42] [1960] 1 WLR 997 at 1,002.
Of course, again, one must not overlook the basic principle that one must consider the words in context and after taking into account the full publication. It is no defence for a publisher to say that he was merely repeating what another person has said and therefore it is no more than an allegation or suspicion. Whether or not it does convey the defamatory imputation is a question of fact and the publisher is not excused by merely stating a rumour. This is made clear by what Lord Devlin said in Rubber Improvement Limited v Daily Telegraph Ltd,[43] where his Lordship stated that one cannot escape liability for defamation by making some observation that “I have been told that” or “It is rumoured” and saying “Well, it is true, that is what has been rumoured or has been asserted.” That is correct as a general proposition. However, in considering the words complained of, it is necessary to consider the context. The surrounding words or circumstances may lead to a different conclusion. In Wake v John Fairfax & Sons Ltd,[44] the Court said:
“There can be little doubt that the nature and quality of the defamatory publication may vary, dependent on whether it is a report of what another has said and whether it is adopted, repudiated or discounted. The purpose of the re-publication will also have a significant bearing.”
[43] [1964] AC 234 at 283.
[44] [1973] 1 NSWLR 43 at 49.
The Court quoted what Griffith CJ stated in Ronald v Harper,[45] where his Honour said:
“It is said that when a person repeats a slander he adopts it as his own. This is a very good general rule, but I decline to adopt it as a rule of invariable application. Words injurious to another may be used under such circumstances as to show that the person who has repeated them gives them his own authority. It is entirely a matter of fact, and I do not think that, in a case such as this, the jury, in finding the defendant used these words, intended to find that he meant to reaffirm the charge.”
[45] (1910) 11 CLR 63 at 77.
The Court of Appeal pointed out that the Chief Justice was not purporting to exhaustively state the law on the topic, and it then stated what I have set out above.
In the end, of course, it is a question of considering the words in context, after taking into account the whole of the words used in the article and whether in the circumstances the words do convey a defamatory sting.
Headlines loom large in this proceeding and it is necessary to say something about them.
In Charleston v News Group Newspapers Ltd,[46] the House of Lords was concerned with a case where the plaintiffs, well-known actors in “Neighbours”, were portrayed by headlines, photographs and captions as being involved in sexual activities. However, it was clear upon reading the whole article that it was not being suggested that they had. As Lord Bridge said:[47]
“The plaintiffs must have found this publication deeply offensive and insulting. Many people will not only deplore this kind of gutter journalism but will think that the law ought to give some redress to the plaintiffs against the publication of such degrading faked photographs irrespective of what the accompanying text may have said. I have considerable sympathy for this point of view.”
[46] [1995] 2 AC 65.
[47] At p.69.
It was noted that the issue in the proceeding was whether or not the plaintiffs were entitled to succeed because certain parts considered in isolation were capable of bearing a defamatory meaning, although the whole article was not considered to be defamatory. Lord Nicholls of Birkenhead said:[48]
“At first sight one would expect the law to recognise that some newspaper readers will have seen only the banner headline and glanced at the picture. They will not have read the text of the accompanying article. In the minds of these readers, the reputation of the person who is the subject of the defamatory headline and picture will have suffered. He has been defamed to these readers. The newspaper could have no cause for complaint if it were held liable accordingly. It has chosen, for its own purposes, to produce a headline which is defamatory. It cannot be heard to say that the article must be read as a whole when it knows that not all readers will read the whole article.
To anyone unversed in the law of defamation, that, I venture to think, would appear to be the common sense of the matter. Long ago, however, the law of defamation headed firmly in a different direction. The law adopts a single standard for determining whether a newspaper article is defamatory: the ordinary reader of that newspaper. I leave aside cases where some readers may have special knowledge of facts which would cause them to give the words a different meaning.
In principle this is a crude yardstick, because readers of mass circulation newspapers vary enormously in the way they read articles and the way they interpret what they read. It is, indeed, in this very consideration that the law finds justification for its single standard. The consequence is that, in the case of some publications, there may be many readers who understand in a defamatory sense words which, by the single standard of the ordinary reader, were not defamatory. In respect of those readers the plaintiff has no remedy. The converse is equally true. So a newspaper may find itself paying damages for libel assessed by reference to a readership many of whose members did not read the words in a defamatory sense.
I do not see how, consistently with this single standard, it is possible to carve the readership of one article into different groups: those who will have read only the headlines, and those who will have read further. The question, defamatory or no, must always be answered by reference to the response of the ordinary reader to the publication.
This is not to say that words in the text of an article will always be efficacious to cure a defamatory headline. It all depends on the context, one element of which is the layout of the article. Those who print defamatory headlines are playing with fire. The ordinary reader might not be expected to notice curative words tucked away further away down in the article. The more so, if the words are on a continuation page to which the reader is directed. The standard of the ordinary reader gives a jury adequate scope to return a verdict meeting the justice of the case.”
(Emphases added).
[48] At p.73.
Another principle, which was reaffirmed in the Charlston case, is the principle that in the end, the tribunal of fact must arrive at one and only one meaning, even though common sense states that different readers may reach different conclusions as to what the words were conveying. The House of Lords approved what Diplock LJ (as he then was) said in Slim v Daily Telegraph Ltd,[49] where his Lordship said:
“Where, as in the present case, 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 will 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’.”
[49] [1968] 2 QB 157 at 173.
Later, Diplock LJ said:[50]
“Juries, in theory, must be unanimous upon every issue upon 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 a function of adjudicating upon the meaning of words in civil actions for libel.”
[50] At 174.
Lord Nicholls, in the Charleston case,[51] after making reference to what he described as the “single standard” observed:
“I do not see how, consistently with this single standard, it is possible to carve the readership of one article into different groups: those who will have read only the headlines, and those who will have read further. The question, defamatory or no, must always be answered by reference to the response of the ordinary reader to the publication.
This is not to say that words in the text of an article will always be efficacious to cure a defamatory headline. It all depends on the context, one element in which is the layout of the article. Those who print defamatory headlines are playing with fire. The ordinary reader might not be expected to notice curative words tucked away further down in the article. The more so, if the words are on a continuation page to which a reader is direct. The standard of the ordinary reader gives the jury adequate scope to return a verdict meeting the justice of the case.”
[51] Supra at 74.
In the end, it is a question of what the reasonable reader would understand the words to mean in their normal and natural meaning.
With those principles in mind, I now consider each of the articles.
Ms Li’s Proofs
Each of the articles refer to Ms Li. I am satisfied that she has proven on the balance of probabilities elements (a) – (d) (inclusive) of each of her causes of action, that is, the words complained of were published of and concerning her, they were in permanent form, they were published to readers of the newspaper, and were published by the defendants. No argument was advanced to the contrary.
The remaining issue in each of her cases is – do the words complained of defame her? In accordance with the modern practice, Ms Li has pleaded in her amended statement of claim the defamatory imputations upon which she relies. She pleads what is known as the false innuendo, that is, that the defamatory meanings are found in the words complained of and do not rely upon proof of extrinsic facts. As the tribunal of fact, the Court is not bound by the plaintiff’s imputations and in the end, the decisions as to what the words mean, whether the words complained of are defamatory and if so, in what sense, are matters for the Court.
This is a trial by judge sitting alone. The parties have conducted the case on the basis of the pleaded imputations. It is convenient to consider the meaning of the words complained of and the pleaded defamatory imputations, but the Court is not bound by the exact wording of the imputations pleaded. Nevertheless, I will proceed on the basis that the pleaded imputations identify what Ms Li asserts the words mean in a defamatory sense.
Once the Court has determined what the words complained of mean, the question is, do they defame the plaintiff?
I now turn to consider each article.
1. Article 1
The words complained of in Article 1 are found on the front page and page 3 of the Herald Sun published on 26 May 2004.
The front page of the paper deals with an important incident in the history of this country, namely, the resignation of the Governor-General. Across the base of the front page in bold capital letters is the following: “MEDI-BONK”
Next to that is a small photograph of Ms Li and next to the photograph is a reference to the revelation of the “dodgy Collins Street doctor charging sex massages to your health insurance.” Turning to page 3, there is a bold heading asserting “INSIGHT” and a reference to “HEALTH INSURANCE FRAUD”. It is then noted that the doctor admitted the fake receipts and that there was a Medi claim for brothel service, and the phrase “Medi-bonk: the sex cheat Doc” appears. There are two photographs of Ms Li.
The article takes up most of page 3 and is a hard-hitting article attacking Ms Li which would attract the attention of the average reader of the paper.
At the bottom of the last column of the article published on page 3 appeared the words –
“BROTHEL aids
medi fraud, Page 23”
On page 23 appeared the second article published in the Herald Sun on 26 May 2003. Much of what appeared on page 3 is repeated. Although the plaintiffs have pleaded the articles as separate causes of action, in my opinion the Court must consider both articles to determine whether the words complained of are defamatory of Ms Li.
In her pleading, Ms Li has pleaded nine separate defamatory imputations in the first article. The defendants do not dispute the majority of the pleaded imputations. However, they dispute the imputations alleging Ms Li indulged in sexual intercourse with her patients and that she held herself out as a legitimate Chinese medical practitioner when she was a prostitute. It is convenient to deal first with the non-contentious matters. In my opinion, the words convey to the reasonable reader the following imputations reflecting on the reputation of Ms Li:
(a)       That she operated an illegal brothel in Collins Street;
(b)      That she was a prostitute in the sense of receiving money for the provision of sexual services;
(c)       That she was a dishonest person who was prepared to permit her patients to defraud the health insurance system by providing fake receipts to them after providing herbal products and sexual services which were not claimable on their health insurance;
(d)      That she performed sexual services for reward on a person whom the Herald Sun arranged to visit her business premises and gave him a receipt for a remedial massage which would be claimable from some private health insurers, including Medibank Private;
(e)       That she provided fake medical receipts to patients so that they could claim the cost of the sexual services at her illegal brothel from their health insurer;
(f)       That she had dishonestly supplied herbal medicines to patients and provided other services which were not claimable on health funds and provided fake receipts for claimable services which had not been provided, to enable the patients to make fraudulent claims upon their health insurers; and
(g)      That she provided fake receipts to enable her clients to claim on their private health insurers.
Imputations (c), (f) and (g) cover much the same ground. Ms Li pleaded further defamatory imputations which the defendants deny.
It was pleaded that as an alternative to imputation (d) referred to above, Ms Li had unlawfully engaged in sexual intercourse with a person whom the Herald Sun had arranged to visit the premises and gave him a fake receipt for remedial massage. A variation of this imputation was pleaded that she had engaged in sexual intercourse for reward and provided fake medical receipts so that the patients could claim the cost on Medibank and HBA. The defendants deny that the imputations were conveyed by the article.
In support of the submission that the words conveyed those imputations, Mr Selimi of Counsel, who appeared on behalf of Ms Li, relied upon the word “Medi-bonk” appearing at the bottom of page 1 and in the headline on page 3. He submitted that the word “bonk” was a slang expression which meant sexual intercourse. Reference to the Shorter Oxford English Dictionary on Historical Principles published in 1950 fails to reveal a word known in the English language as “bonk”. However, the Collins Concise Dictionary of the English Language, 2nd edition, being the Australian edition published in 1988, reveals the word “bonk” as meaning first “to hit”, and secondly, “to have sexual intercourse (with)”.
My understanding, based upon general knowledge and experience of life, leads me to the same conclusion as to the use of the word “bonk”. It does mean to hit but it also means to have sexual intercourse. Mr Selimi submitted that the references to clients claiming for sex, to Ms Li running an illegal brothel, and to Ms Li providing a person with a sexual service and giving him a receipt for an $80 remedial massage, all lead to the conclusion that the phrase “Medi-bonk” means that the sexual services were in fact sexual intercourse. Another word that is a slang expression for sexual intercourse is a four letter word beginning with “f”. In common parlance, to be described as “effed” in a certain context means being placed in a position of being taken advantage of or deceived. In my view, in considering the article as a whole and in particular the reference to “sex massages” on the first page, I do not accept that the phrase “Medi-bonk” conveys to the reasonable reader that the sex and the sexual services were in fact sexual intercourse. In my view, “Medi-bonk” means in the context of the article that the Medibank insurer was deceived and accordingly was “shafted” in the sense of being cheated. I do not accept that the pleaded imputations are to be found on a reasonable reading of the two headlines and the article. The whole thrust of the article concerns massages, although it cannot be denied that the phrase “a sexual service” could cover sexual intercourse. But on a fair reading of the headlines and the whole article, the inference that is open to the reasonable reader is that the sexual services were involved in the massage.
My conclusion is reinforced by a number of other matters. First, on page 3, the article describes what the representative of the legal brothel industry received at Ms Li’s premises. It stated that she had provided him with a sexual service and given him a receipt for an $80 remedial massage. In the second article published the same day the “sexual service” is amplified. The article stated:
“He didn’t get Linda or Suzanne, but Dr Li herself did oil his body and
provide a massage, which included a sexual service.”
The article went on to quote a portion of a statutory declaration made by the representative. The article stated:
“’Dr Li instructed me to lie on my back. Dr Li removed and dropped the towel that had covered my buttocks,’ his statutory declaration says.
It then goes into graphic detail about the sexual services provided by
Dr Li.”

If the defendants had not proven justification, in my opinion Ms Li would be entitled to general damages, including aggravated damages, in the order of $250,000 as a global sum for general damages for the eight separate causes of action. If, however, the defendants partially justified the imputations but did not establish truth to all, then the amount of damages would be less. However, it is impossible to make any meaningful decision or observation because it depends upon the particular imputation which was not proven truthful. Partial justification would result in a lesser sum of damages. Indeed, depending upon what defamatory imputations were proven as true, if the more grave and serious defamatory imputations were established as true, then success by Ms Li in relation to less grave imputations may result in a very small sum of damages.
In Grobbelaar v News Group Newspapers Ltd,[89] the plaintiff, a well-known professional soccer player and goalkeeper, was the subject of an article alleging that he accepted bribes to fix the result of games. There was clear evidence that he entered into corrupt agreements but there was no evidence that in fact he took steps in a game to throw a match. The House of Lords held that as a result of the clear evidence that he had entered into corrupt agreements, he had no reputation and, accordingly, although it was not proven that he had in fact indulged in suspect play during games, the appropriate award of damages was nominal, namely, £1. Lord Bingham of Cornhill said:[90]
“The tort of defamation protects those whose reputations have been unlawfully injured. It affords little or no protection to those who have, or deserve to have, no reputation deserving of legal protection. Until 9 November 1994 when the newspaper published its first articles about him, the appellant’s public reputation was unblemished. But he had in fact acted in a way in which no decent or honest footballer would act and in a way which could, if not exposed and stamped on, undermine the integrity of the game which earns the loyalty and support of millions. Even if the newspaper had published no more than what, on my interpretation of the jury’s verdict, it was entitled to have published, the appellant would have been shown to have acted in a way which any right thinking person would unequivocally condemn. It would be an affront to justice if a court of law were to award substantial damages to a man shown to have acted in such flagrant breach of his legal and moral obligations.”
(Emphasis added).
[89] [2002] 1 WLR 3024.
[90] At 3036.
For example, in the present case, if the plaintiff had succeeded on one imputation which had not been proven true, namely, that she had engaged in sexual intercourse for reward, as was alleged to have been conveyed by the first, fourth and fifth articles, and it having been proven that she had provided sexual services to her clients and provided fake receipts, in my opinion an award of damages would be no more than nominal, namely, $10. However, it is difficult to make any worthwhile observations concerning this aspect of the case and I say no more in respect to compensatory damages.
If the defendants had failed to prove the truth of any of the more serious defamatory imputations, then in my view, there would be a strong case for an award of exemplary damages based on the repetition of the particular defamatory imputation over a long period of time.
Special Damages – Alleged Pecuniary Loss
The plaintiffs claimed that the publication of the articles caused each pecuniary loss. The inadequate pleading and the presentation of the plaintiffs’ cases in respect to the alleged pecuniary loss raised a number of difficulties for the plaintiffs.
The Court expects and requires that the best evidence be adduced to prove pecuniary loss. Further, claims for pecuniary loss must be properly pleaded with particulars. As earlier observed, the particulars in this case were inadequate. The Court drew plaintiffs’ counsel’s attention to the inadequacy and required him to prepare and file written particulars of the special damages claim. The new particulars, whilst providing some information, were also totally inadequate. It was apparent in the first week of the trial during Ms Li’s evidence that her evidence on the issue at that time was inadequate and vague. The Court reminded plaintiffs’ counsel a number of times that the Court expected the best evidence available. The primary source of the best evidence was Ms Li. She conducted the businesses and she stated she kept records. The law has always required that where a claim is made for pecuniary loss arising from the commission of a tort, the claim must be properly pleaded and strictly proven.
At the outset, it is important to emphasise that the plaintiffs claimed special damages for loss of income. The case was not pleaded or presented on the basis that the plaintiffs suffered general damages resulting from a decline in their businesses due to the publication of the defamatory articles. Such losses can be claimed as general damages. See Andrews v John Fairfax & Sons Ltd.[91] Nevertheless, if a claim was made for loss of custom as part of the claim for general damages, in my opinion it would be necessary for the plaintiff to give particulars or plead in a way which forwarned the defendant that such a claim was being made. Rules 13.07 and 13.10 of the Rules of Court[92] require the provision of particulars.
[91] [1980] 2 NSWLR 225.
[92] See also the observations of Hunt J in respect to the New South Wales position in Bickel v John Fairfax & Sons Ltd [1981] 2 NSWLR 474.
The nature of the pleading, the necessity for particularity in a claim for pecuniary loss and proof of same were stated by Bowen LJ in Ratcliffe v Evans,[93] where his Lordship, speaking for the Court, said:
“In all actions accordingly on the case where the damage actually done is the gist of the action, the character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry. The rule to be laid down with regard to malicious falsehoods affecting property or trade is only an instance of the doctrines of good sense applicable to all that branch of actions on the case to which the class under discussion belongs.”
(Emphasis added).
[93] [1892] 2 QB 524 at 532.
His Lordship’s observations were in respect to a malicious falsehood claim, but in my respectful opinion, his Lordship’s observations apply generally and in respect to the present proceeding.
The claim for pecuniary loss was not properly pleaded. When the writ was issued in the name of the company only, it was asserted that it had been seriously injured in its credit and reputation and had suffered and would continue to suffer loss and damage. No particulars were given of any claim for economic loss, although it may have been inferred that since it was a trading company, its loss would have been of a pecuniary nature. In the amended statement of claim delivered after Ms Li was joined as a party, it was asserted that she had suffered loss and damage and the particulars stated that she had suffered “significant loss of custom, particulars of which shall be provided in due course.” The same allegation was made in respect to the company being injured in its trading reputation and it was asserted that it had suffered significant loss of custom. No particulars were in fact supplied. No criticism can be levelled at the defendants’ advisers because they were not obliged to require the plaintiffs to carefully consider a claim for special damages. The point was made by Slade J in Longdon-Griffiths v Smith,[94] where his Lordship said:
“I agree that where no special damages are claimed the defendant is well advised to let sleeping dogs lie, and he can hardly be expected to ask for particulars of the claim for special damage where none is alleged.”
[94] [1950] 2 All ER 662 and 678.
It would be a matter of judgment for the defendant and its adviser as to whether or not it should agitate the issue.
In the further amended statement of claim filed on 1 March 2006 pursuant to leave granted by Harper J on 6 February 2006, the particulars subjoined to paragraph 126, which dealt with the allegation that Ms Li had suffered damage, were amended to state:

“(b)

As a result of the publication of the articles the first plaintiff has suffered significant loss of custom and economic loss, full particulars of which are contained in an expert report of Brian Jones dated 21st December 2005 filed herein.”

There was a similar claim made on behalf of the second plaintiff. This is not a proper way to give particulars of a claim for lost income and pecuniary loss. The Court on the first day of the trial informed plaintiffs’ counsel that the particulars were inappropriate and required the filing of particulars. The following day, Mr Selimi produced a document which claimed a total “estimated economic loss” of $4,740,616. There were eight heads of claim identified. Again, reference was made to the report of Brian Jones. The Court emphasises once again that this is not the proper way to particularise a claim for loss of income. By failing to give proper thought and attention to this part of the claim, and relying upon a report which, in my view, was inadequate, vague and largely inadmissible, the plaintiffs’ claims for economic loss were based upon inadequate evidence, speculation and evidence of doubtful authenticity and validity. When he produced the revised particulars, Mr Selimi was asked to identify which particular plaintiff was making which particular claim in respect to the various heads of economic loss. He did so, but later changed the party claiming some of the heads of loss.
The pleading of the claim should not have been difficult and full particulars should have been given. It would have focussed the minds of the plaintiffs and their advisers as to how their claims should be proven. The general rule relating to the measure of damages and their assessment was stated by Lord Blackburn in Livingstone v Rawyards Coal Co,[95] where his Lordship defined the measure of damages as:
“That sum of money which would put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.”
[95] (1880) 5 App Cas 25 at 39.
That dictum has been often quoted, always with approval, and applies to the measure of damages in both tort and contract. It has been followed in Australia.[96]
[96] Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185 at 191.
Applying that formula, it would not have been difficult to plead and present a case, if in fact any economic loss had been suffered. It would have been a fairly simple exercise to prove the loss, provided, of course, there was evidence of substance based upon primary source materials as to the income derived by the business and the downturn in income after the publication of the defamatory articles. It would not have been difficult, if it was the fact, that the publication of the defamatory articles caused a loss or downturn in custom. Production of satisfactory documents relating to past income up to the date of the first publication would have demonstrated the capacity of the business to derive income, and production of the primary documents recording the trading activities of both plaintiffs thereafter would have revealed, if it be true, a loss of custom which could be calculated with some degree of certainty. The application of the assessment formula requires the Court to consider what would have been the position if the tort had not been committed, and to compare it with what actually did happen after the commission of the tort. The hypothetical situation is compared with the actual situation.
In the first few days of the trial, the Court raised the question of who was conducting the Chinese medical practice. At that time, the evidence was that the company was conducting the business and employing Ms Li on a salary. Ms Li was the sole director and shareholder of the company. The company was registered on 14 June 2001. The quarterly Business Activity Statements and the company tax returns for the period from 1 July 2001 through to the present revealed that the company purported to conduct the Chinese natural therapy business, which included the sale of Forever Young capsules. On the other hand, the evidence revealed that the business name known as C.N.T. Chinese Natural Therapy, was first registered on 26 September 1996 and was continuing as a business up until 26 September 2005. The proprietor of the business was Ms Abbie Li, the first plaintiff. No documents were produced relating to the company or its acquisition of the business after it was registered. On the other hand, some of the incomplete and very rough documents produced by the accountant, Mr Dunstan, who was the accountant for both plaintiffs during the relevant period, tended to support the view that the company was operating the business. This was despite the fact that there had been a business name registration and that the name on the door of Ms Li’s premises in Collins Street was not the company but the description “C.N.T. Chinese Natural Therapy.”
The Court drew attention to the provisions of the Chinese Medicine Registration Act 2000. Part 2, which came into operation on 1 January 2002, concerned registration. A natural person could apply for registration as a Chinese herbal medicine practitioner and an acupuncturist. There is nothing in the Act which enabled a company to be so registered. The evidence established that Ms Li was registered in the year 2002. Part 5, which also came into operation on 1 January 2002, deals with offences and any unregistered person, which would include a company, who took or used the title of a registered Chinese medicine practitioner committed a criminal act. I have earlier discussed the potential liability of the company Forever Young under the Act. The problems concerning the company conducting the business were pointed out by the Court to counsel for the plaintiffs, who then informed the Court that the claims for economic loss would be made by Ms Li, and not the company, in relation to the conduct of the Chinese therapy medical practice. This was despite the fact that the Business Activity Statements, the tax returns and the few accounts that were tendered showed that the company operated the business from 1 July 2001 to the year 2005. In addition, the receipts given to patients contained a stamp which showed that it was the company that had received the money for services rendered and had provided the receipt. Mr Selimi then informed the Court that the company was no longer making the claims for lost income of the Chinese natural therapy business and that Ms Li was making the claims. He informed the Court the accountant, Mr Jones, was preparing a supplementary report.
This change created difficulties for the plaintiffs. What the plaintiffs sought to do was to undo what in fact had occurred, and to attempt to re-write the history between 1 July 2001 to 2005 in respect to the conduct of the business operated at the Collins Street premises.
When Ms Li gave evidence, no attempt was made to adduce documentary evidence of day to day accounts of the business activities. She was cross-examined about the lack of primary accounting documents. The Court reminded her counsel of the necessity of proper proofs. When criticisms were first made by the Court with respect to the inadequate evidence being called in relation to the financial position of the business, the Court was informed that the accountant, Mr Dunstan, was not going to be called as a witness. The tax returns and Business Activity Statements for the years 2002-2004 were not lodged until 2005. Apparently they were lodged by Mr Dunstan. Ms Li, in answer to a number of probing questions as to what records she had kept and why the documents were lodged so late, stated that it was the fault of Mr Dunstan. Ms Li herself did not produce any documents relating to the financial conduct of the business. She stated that she had kept daily sheets of the business activities but that she had handed them to the conman Williams. They had disappeared. Some documents from Mr Dunstan’s file were made available to Mr Jones. They are copies of summaries prepared by Ms Li and some draft accounts prepared by Mr Dunstan. These documents were made available to Mr Jones when he prepared his economic loss report in December 2005. No mention is made of them in his first report. Mr Jones stated that he did not rely on them. He said that he relied on the copy of taxation returns, many of which were prepared and lodged well after the defamatory articles were published. The documents are referred to in his supplementary report, which was delivered in the course of the trial. The documents were not discovered and were made available to the defendants’ lawyers only after the proceeding had commenced. Ms Schoff of counsel, for the defendants, informed the Court that her instructing solicitors had been chasing primary documents for a very long period of time, and the only documents that were eventually produced were those contained in the supplementary report of Mr Jones produced in the course of the trial. To say the least, the documents are very rough and ready and do not provide a very adequate foundation for a claim for loss of income or business loss. The reason why Mr Dunstan did not lodge the documents until the year 2005 was not explored in evidence and appeared to relate to some personal matter which was not identified.
Overall, the Court was left in a position where there was little evidence produced, and the evidence that was produced raised more questions than it gave answers, and provided little or no certainty.
During the course of her evidence, Ms Li produced a number of copy tax returns for herself and the company. Her personal tax returns were for the financial years ending 30 June 2000 through to 2004. The return for the year ending 30 June 2000 was lodged on 2 April 2001 by her accountant, Mark Dunstan. The return for the following year was lodged on 21 May 2004, and the returns for the two following years were lodged on 23 March 2005. The returns were evidently prepared and lodged by Mr Dunstan. The explanation for the delay was less than convincing. Ms Li stated that she did not want to go into the reasons, other than it was the fault of her accountant. At that stage it was envisaged that he would not be called as a witness. When he was called, he accepted that he failed to lodge the returns in time. The company return for 30 June 2002, which was its first year of operation, was lodged on 21 May 2004, as was the following year’s return. The return for 30 June 2004 was lodged on 23 March 2005. Again, all company returns were prepared and lodged by Mr Dunstan and again, the explanation for the delay was the fault of the accountant.
The Business Activity Statements lodged in the business name of Cntchinese Natural Therapy (sic) were produced by Ms Li in her evidence. The Statement for the first period to 31 December 2000 was lodged on 12 December 2001. The Statements for the following two quarterly periods were also lodged on the same date. The one to September 2001 was lodged on 28 June 2005. The following quarterly Statements up to April 2004 were all lodged on the same date. The Statement to June 2004 was lodged on 3 August 2005. Again, blame for the delay was laid at the door of Mr Dunstan. Mr Dunstan gave evidence and did not suggest otherwise. It is noted that the Business Activity Statements were lodged in the name of Cntchinese Natural Therapy. Yet it is clear from both the company returns and Ms Li’s personal tax returns that in the period from mid-2001, the company was conducting the Chinese natural therapy business. The evidence of Mr Dunstan was less than satisfactory. He was vague. He could not explain why certain documents were not produced. He appeared to work off very rough summaries of the business activities prepared by Ms Li. He did not produce any company documents relating to its business activities. He produced what were rough and ready draft profit and loss statements and the company’s copy tax returns. Ms Li provided him with periodic summaries of the business activities. Mr Dunstan did not produce any proper company accounts. There appeared to be real uncertainty as to whether it was the company or Ms Li who was conducting the business during the relevant period. The copy tax returns, the receipt books and the summaries prepared by Ms Li led to the conclusion that it was the company, and this conclusion was supported by the evidence of Mr Dunstan and the early evidence of Ms Li. On the other hand, the Business Activity Statements suggested otherwise.

Ms Li did not produce any other documentation concerning the income derived by her business of Chinese Natural Therapy and the sale of the Forever Young capsules. She was cross-examined about the lack of documentation. She said that she had daily sheets recording the financial transactions of the business, which she had handed over to Mr Williams, and that these had disappeared.
The bundle of documents which had not been discovered, and which had been provided to Mr Jones in December 2005 and revealed in his supplementary report, was tendered in evidence. The documents contain a number of what could be described as rough and ready draft profit and loss statements of the business prepared by Mr Dunstan, which were provided to the plaintiffs’ former solicitors on or about 12 April 2005 but not discovered. They comprised draft profit and loss accounts for the financial years ending June 2002, 2003 and 2004. Behind each draft profit and loss statement was a summary of the receipts and expenses of the business in the handwriting of Ms Li, the subject matter of each transaction being in English and Chinese. It was these summaries prepared by Ms Li which formed the basis of the rough and ready profit and loss statements. They in turn were used as the source material for the taxation returns which were returned many years after the event, and well after the first publication.
Ms Li’s evidence as to her financial position was unsatisfactory and, bearing in mind her overall lack of credibility, must be viewed with enormous suspicion in relation to any value that can be placed upon it. Her evidence as to the amount that she earned from her job at the Hyatt Hotel in more recent times was also vague. She asserted that she cleared about $1,000 a week. Mr Dunstan’s evidence was also somewhat vague. No proper accounts for either the business or the company were produced. Despite the fact that a company was apparently operating the business, there were no company accounts and no attempts to produce any annual returns or any records of any annual meetings of the company. Ms Li was not able to enlighten the Court as to whether any such accounts existed, or had ever existed, or whether any annual meetings took place. It is noted from the company search that annual returns were lodged, but apparently late. Despite the fact that it appeared that the company took over the business some time in mid 2001, no documents evidencing any transfer of the business were produced. The question was raised with Mr Dunstan. No documents were forthcoming. Mr Dunstan was unable to enlighten the Court either as to these important questions or as to the preparation and adoption of proper accounts for either business. The evidence was left in an entirely unsatisfactory state.
In my opinion, it is impossible for the Court to determine with any degree of certainty whether there had been any loss of income by either Ms Li or the company after the publication of the articles. The appointments book revealed that business appeared to fall off for the balance of the year 2003 after the publication of the first article. The three women who had been working in the premises did not work after the publication of the first article. There were no other source materials available. Ms Li did not produce any receipt books. However, there is some evidence to suggest that business did fall away, although to what extent cannot be ascertained with any degree of certainty. Of course, having found that the assertion that she was conducting a brothel was established, it is not surprising that the three women disappeared and that business dropped off. Reference to the appointments book up to the publication of the first article on 26 May 2003, showed that in the preceding month the business was busy. As earlier stated, it would not have been a difficult exercise to prove, if it was the fact, that the publication of the articles caused a drop in the income of the business. Production of reliable accounts from before and after the first publication, and deposed to as being accurate and truthful by Ms Li, would have been a basis for establishing a loss. No documents were forthcoming. The evidence that was produced could only be described as extremely doubtful, incomplete and uncertain. It did not need an expert witness to prove the loss.
The evidence of Mr Jones as an expert was also unsatisfactory. If he did read the code of conduct prescribed by Order 44 of the Rules of this Court in respect to the evidence of an expert, he did not understand the code. He asserted in his first report that he understood his duty to the Court. I do not accept that he did so understand.
The first exercise that Mr Jones performed in his revised report was to determine the loss of income of the Chinese medical practice carried on by Ms Li. He determined the loss of profit from 1 July 2003 to 31 December 2005 at a figure of $94,853. His evidence was not expert evidence. That is not to say that a court may not be assisted by an accountant preparing a summary of the source material to determine the levels of income on an annual basis. The tribunal of fact is usually assisted by an accountant preparing a summary of the source material. However, it is not expert evidence. It is a summary to assist the tribunal of fact and to avoid the time spent by the tribunal of fact in calculating the loss from the proven source material itself.[97] However, a summary has no evidentiary value if the source material is not tendered in evidence. The source material must provide an accurate basis for the summary. What Mr Jones did was to project the business income at the end of the financial year 30 June 2003 based upon the growth over the previous four years’ trading. In order to ascertain the previous four years’ trading, he treated the business, which was at that time conducted by the company, as being conducted by Ms Li because of the problems with the Act. He determined that there had been a 49% growth over this four year period and he then projected an expected business income increase of 49% for the year 1 July 2003 to 30 June 2004. His approach was fallacious. It was nonsense. He then added another substantial increase from the year 2004 to 2005, and then capped the amount for the following two years. His exercise was fallacious, had no basis in logic and was pure speculation. Assuming that one could place any reliance upon the financial figures that were produced by Ms Li and Mr Dunstan, and indeed they were scanty, incomplete and uncertain, there is no way that one could add from 1 July 2003 to 30 June 2004 an anticipated increase of 49% based on the past trading. I reject his evidence. An exercise could be carried out but the uncertainty of the basic figures makes it extremely difficult to come up with any figure that would satisfy any test of certainty. In addition, there is the problem of who, in fact, was deriving the income. The fact was it was the company. It would be contrary to law to permit it to claim a loss, taking into account that it had no legal right to conduct a business of Chinese natural therapy.
[97] See R v Mitchell [1971] VR 46 and Smith v The Queen (1970) 44 ALJR 467 at 469.
Mr Selimi finally, and somewhat desperately, submitted that Ms Li would be entitled to loss of income based upon the fact that she was receiving $36,400 gross salary from the company during the relevant period. However, I am not satisfied that there is any evidence that she received less than that thereafter. Indeed, her evidence was that when she was working at the Hyatt she took home about $1,000 a week.
Mr Jones in his report then turned to the loss of business value. Again, a problem arises with respect to valuing the business. The Chinese natural therapy business was in fact conducted by the company during the relevant period. This was contrary to law. Mr Jones carried out an exercise in which he sought to determine the future maintainable profits on an annual basis of what were described as the “personal services” provided by the business and the “associated herbal tonic sales”, which apparently were the Forever Young capsules. Having done that, he then multiplied that figure by three. The case as presented was that the impact of the defamatory articles was such that it destroyed the Chinese natural therapy business, including the business selling the Forever Young capsules. One method to determine the loss suffered is to value the business as a going concern for the purposes of sale to a willing but not over-anxious purchaser. In valuing the business as a going concern, one method is to take the annual future maintainable profits and adjust for any particular extraordinary items and then determine an appropriate multiplier to reach the value of the business. The multiplier must be the subject of expert evidence. I was not persuaded that Mr Jones was an expert in the area of valuing Chinese natural therapy businesses or indeed similar types of businesses. Mr Jones frankly admitted that the choice of the multiplier of three was based upon a general rule of thumb across businesses. He was unable to provide an appropriate multiplier based upon any study of the sale of Chinese medical therapy businesses. His so-called expert evidence in relation to the multiplier I do not accept. I am not persuaded that he was an expert in that area. This claim has real problems, again, because the company was operating the business. I am by no means persuaded that there was any goodwill. Indeed, it may be said that the business was very personal, in that it depended upon Ms Li’s ability as a Chinese medical therapist and masseuse, and that it did not have any goodwill at all. There was no evidence as to the number of Chinese medical therapist businesses in this State. Indeed, they are clearly of recent establishment in this State and whether there is any real market for the businesses was not established. In my opinion, the plaintiffs have failed to prove what value should be put on the loss of the business. In any event, the business was conducted by the company. As a matter of law it was not permitted to conduct the business.
Mr Jones also sought to carry out an exercise to determine the loss on a book that had been published by Ms Li. The evidence revealed that she had published a book called Eating for Life. I am by no means persuaded that she was ever able to sell these books. Indeed, the evidence was that she gave many of them away. Reference to the book shows a number of English errors which, quite frankly, made it difficult to understand what the book was about. I am not persuaded by any of the evidence that there was a market for this book. Accordingly, any such claim for loss of profit from the sale of that book has not been proven. Mr Jones’ evidence was pure speculation. He was not an expert in the field of the sale of books. Ms Li’s evidence relating to the book was vague and uncertain.
Mr Jones then did an exercise on the publication of a second book. The evidence revealed that Ms Li, with the assistance of others, had drafted another book called Forever Young, Ancient Chinese Secrets for Eternal Youth. The manuscript had been prepared and was tendered in evidence. She evidently started work on the book in early 2003. She had contact with a publisher and some discussions took place. She was given a draft agreement by the publisher to consider and the stage was reached where negotiations had commenced but had not been finalised. The project was aborted as a result of the publication of the first article. The publisher, Mr David Tenebaum, gave evidence to the effect that he thought the book may have sold. He admitted that he had never published a similar book before. He stated that he expected the first print would be 3,000 books and that hopefully, over a number of years, they could be sold. If this had occurred, Ms Li would have received 10% of the sale price, which means she would have made approximately $3 per book. He thought that she may be involved in the direct selling of another print of 5,000 books. All this evidence was based upon hope and expectation. Mr Tenenbaum was a publisher and had been for some years, but had never published this type of book. Whether or not Ms Li’s second book would have had any success was highly debatable. The Court notes that there are any number of books on the market promising all types of things about staying young and the effect of certain diets. Doing the best I can on what would be described as a hope and an expectation of future sales, if I had to assess an amount of damages in respect to this head of damage, I would assess it at $10,000.
A claim was also made for the production and distribution of the Forever Young capsules. This would have been a claim by the company. It manufactured the capsules and apparently sold them. Mr Jones did an exercise to show that he thought the company over a five year period would have earned a profit in the order of $218,602. His exercise was based on the fact that he thought the company could sell about 30,000 bottles of capsules. The problem with his exercise is that there is no credible evidence in the past to support future sales of such a quantity of pills. Again, this was an area where Ms Li could have given evidence, if indeed there was any evidence, as to the sales of the product in the past and whether there were any clients who were prepared to purchase the pills. There was some evidence that clients did purchase the capsules and that there were some repeat clients. But there was a complete absence of any reliable record of past sales. To talk about the future of the product in the absence of credible evidence of past sales is nothing more than pure speculation. Of course, to read the future is impossible. But in determining what the future may hold for a product, the history of the sales of the product provides a springboard to reach a conclusion. The evidence as to the past was absent. This claim would also fail.
A feature of Mr Jones’ original report and later report concerned what he described as a head of damage being the loss of commercial opportunity to generate future income for a herbal tonic, namely, the capsules. He stated in his original report that an important part of the loss was connected with the trademark registration. He was of the view that a trademark registration would have protected the business from future potential competition, but would not have affected the pursuit of the commercial opportunity. In his first report he did an exercise and said that a loss related to the trademark registration. He reported that the collapse of the sales of the capsules allegedly caused by the publication of the defamatory articles resulted in a loss of $2,850,000. His exercise is flawed and his result is nonsense. He misunderstood the effect of a registered trademark. The registered trademark provides protection to a distinctive mark or device attached to or accompanying an article intended for sale, the purpose being to inform the world that it was manufactured or sold by a particular business. In other words, it is the means by which the product is advertised to the world. The phrase “Forever Young”, as the evidence revealed, was already the subject of a registered trademark by others. The distinctive accompanying mark or device is what is protected. Mr Jones in his original report proceeded on the assumption that Ms Li did have a trademark and that it would contribute to the value of the “Forever Young” product. He proceeded on the assumption that there was no restriction to “Forever Young” selling the trademark and that it had value. He then valued the loss of the potential of the trademark over a period of five years and came up with a figure of $2,850,000. In his supplementary report, he noted that in fact that Ms Li did not have a registered trademark. Nevertheless, he did another exercise and came up with a figure of $1,000,093.11. His reasoning is flawed. It is based on pure speculation. He is not an expert in the area of valuing trademarks. He is not an expert in valuing the loss of the business which may have had a form of trademark. The fact is that the business could continue to sell the product in the way it was always sold, irrespective of whether the trademark was registered or not. There was no evidence that the publication of the articles caused a drop in sales. There was no evidence that the publication of the articles had any effect on a so-called trademark. I do not accept the evidence of Mr Jones. His evidence was also double dipping. His earlier exercise concerned the alleged loss of the business. Part of the business was the sale of the capsules. If there was a loss of that part of the business dealing with the sales of the capsules, the loss should be calculated as part of the loss of the business.
The defendants’ solicitors engaged a chartered accountant, Mr Joe Dicks, who prepared a report dated 25 January 2007. He considered the original report of Mr Jones. He drew attention to the fact that when seeking to calculate the alleged loss of profits as a result of the publications, there was insufficient information to make a proper assessment. In respect to the alleged loss of business value, he drew attention to the fact that Mr Jones used a multiple of three and he questioned the methodology used. Mr Dicks concluded that the alleged loss on the publication of the first book by Ms Li was based upon insufficient evidence, and he was unable, on the evidence before him, to reach any conclusion as to the expected publication of the second edition. He again noted the lack of evidence in relation to the claim assessed by Mr Jones as to the production, sale and distribution of herbal tonic, and made a rough estimation that it could be $120,000. Of course, in the end, it is a matter for the Court based upon the evidence placed before it. He also noted the claim by Mr Jones concerning the value of the trademark and noted that neither Mr Jones nor he had the necessary expertise. I agree entirely with the criticisms made by Mr Dicks of the attempts by Mr Jones to prove any economic loss.
In conclusion, the presentation of the case on damages for economic loss was totally inadequate, lacking in evidence and based on speculation. It would not have been a difficult exercise to work out the loss of income, if there was any, and any loss of business value due to the publication of the defamatory articles. Other than the possibility of a loss on the sale of the second manuscript, and this is highly doubtful, it is difficult to determine what pecuniary loss was suffered as a result of the publication of the articles.
CONCLUSION
The defendants have established justification to the defamatory imputations in each of the articles the subject of the eight causes of actions brought by Ms Li. Accordingly, her claim must be dismissed. In my opinion, the second plaintiff, the company, was not defamed in its business or trading reputation and its claims must also fail. But if I am wrong in relation to that conclusion, I am satisfied that insofar as the business was conducted by Ms Li in the business name of Forever Young, and if the trading reputation of that business name was defamed by any of the four articles specified, the defendants have proven the truth of the imputations made on the basis that Ms Li was conducting the business, and the defamatory imputations established as true against her must also result in the claims brought by the company failing.
Subject to submissions by counsel, I propose to dismiss the proceeding. There will be judgment for the defendants. I will hear the parties on the question of costs.
Attachment “A” Attachment “B” Attachment “C” Attachment “D” Attachment “E” Attachment “F” Attachment “G” Attachment “H”

fake receipts.	brothel service.
Medi-bonk: the
sex cheat Doc.”

[2007] VSC 109

20 April 2007