Lower Murray Urban and Rural Water Corporation v Di Masi

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2012 0228
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Appellant
v
FRANK DI MASI	Respondent
S APCI 2012 0229
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Appellant
v
JIM BELBIN	Respondent
S APCI 2012 0230
LOWER MURRAY URBAN AND RURAL WATER CORPORATION	Appellant
v
DON MARCIANO	Respondent

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JUDGES:	WARREN CJ, TATE and BEACH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5, 6 May 2014
DATE OF JUDGMENT:	4 June 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 104
JUDGMENT APPEALED FROM:	[2012] VSC 535 (Kaye J)

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DEFAMATION – Appeal – Jury trial – Liability – Damages – Role of jury – Role of judge – Verdicts on publication, imputations and malice – Special verdicts on facts relevant to defences – Defamation Act 2005, s 22.

DEFAMATION – Defences – Qualified privilege at common law – Statutory qualified privilege – Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 and Reynolds v Times Newspapers Ltd [2001] 2 AC 127 considered – Reasonableness – Malice – Public document – Publication of public document – Whether document ‘issued’ by an officer of the government – Whether document issued ‘for information of the public’ – Defamation Act 2005, ss 28 and 30.

DEFAMATION – Damages – Vindication – Nail the lie – Grapevine effect –Aggravated damages - Defamation Act 2005, ss 34 and 36.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Dr M J Collins QC with Mr N Kaskani	DLA Piper Australia
For the Respondents	Mr M F Wheelahan QC with Mr D P Gilbertson QC	HWL Ebsworth Lawyers

WARREN CJ
TATE JA
BEACH JA:

Introduction

Between August 2009 and August 2010, the appellant in these three appeals, Lower Murray Urban and Rural Water Corporation, published on its website a letter by the then Minister for Water (‘the Minister’s Letter’). In August 2010, each of the respondents, Frank Di Masi, Jim Belbin and Don Marciano, issued proceedings against the appellant claiming damages for defamation in relation to the appellant’s publication of the letter on the appellant’s website.

Following a 22 day jury trial and four further days of legal argument, a judge of the Trial Division entered judgment for the respondent in each of the respondent’s proceedings in the sum of $70,000 plus damages in the nature of interest of $4,677. Additionally, the appellant was ordered, in each proceeding, to pay the relevant respondent’s costs of and incidental to the proceeding on an indemnity basis.

The appellant now appeals against the judgments entered against it. In the appeals, the appellant takes issue with some of the answers given by the jury to questions put to the jury, certain of the judge’s conclusions on issues of liability that fell to be resolved by his Honour, and the judge’s assessment of the respondents’ damages.

Background facts

The proceedings below arose out of the decision by the then Minister for Water, the Honourable Tim Holding MP, on 15 August 2008, pursuant to s 87(1) of the Water Act1989 (Vic) (‘Water Act’), that the appellant be appointed to take over the whole of the functions, powers and duties of the First Mildura Irrigation Trust (‘the FMIT’). On 19 August 2008 the Minister’s determination took effect.

In September 2008, the Minister signed a letter addressed to the former customers of the FMIT about his decision to close the FMIT. The letter referred to the ‘FMIT Board members’, the ‘FMIT Board’ and the ‘Board’ and made allegations about their conduct.

The respondents were each members of the Board of the FMIT at the time of the Minister’s decision.

In September 2008, the Minister provided the Minister’s Letter to the appellant to be disseminated to the former customers of the FMIT (of which there were approximately 1,600 ratepayers or outlets who had, as a result of the closure, become customers of the appellant). The Minister’s Letter, set out on Ministerial letterhead, provided as follows:

Dear Customer,
CLOSURE OF THE FIRST MILDURA IRRIGATION TRUST
My decision to close down the First Mildura Irrigation Trust (FMIT) has understandably generated a great deal of debate in the Mildura community, and concern among former FMIT customers wanting assurances about accessing their legal entitlements to water.
My primary concern in making this decision was to safeguard the interests of those Mildura residents who depend on FMIT for irrigation services. To that end, I have provided guarantees that prices will not rise above those already approved by the Essential Services Commission, Victoria’s independent price regulator, for the next five years.
I have also provided guarantees that FMIT staff would have their jobs protected. And I have decided to appoint an FMIT customer to the Lower Murray Water Board, so that the Board has the direct benefit of your perspectives when making decisions.
Highly emotive and selective accounts of recent events have sought only to deflect scrutiny away from those responsible for FMIT’s demise. I believe that you deserve better and that is why I am writing to you to explain the reasons for my decision.
My decision was based in part on the fact that the FMIT Board members broke the law by investing $2.2 million of Victorian Government money without Treasury approval. The specific law broken was the Borrowing and Investment Powers Act 1987.
The Government loaned this money to FMIT to invest in upgrading local irrigation infrastructure, for the lasting benefit of its members. Instead, the FMIT Board invested the money in the United States sub-prime mortgage market, where it lost $2 million of its value.
This was a serious breach of trust with local irrigators, who should have been able to rely on the Board to manage the Trust’s finances responsibly and within legal limits. It also reflected an entrenched disregard for the governance and financial processes required of all water authorities to ensure that public money – your money – is being used appropriately.
This bad investment in turn led to the Board seeking Government approval to borrow another $2 million, taking its customers even further into debt, simply to raise cash for its day-to-day operations. This move crystallised concerns about its short to long-term viability.
Reports by Deloitte and the Essential Services Commission had raised serious concerns about FMIT’s viability and its commitment to properly manage its affairs. Specifically, FMIT’s small size made it acutely vulnerable to the impacts of drought and climate change, with reduced rainfall leading to lower allocations and therefore revenue.
Furthermore, demographic changes and urban encroachment around Mildura will reduce irrigated land in FMIT’s district, further undermining its capacity to trade its way out of debt in the medium to long term.
I came to Mildura twice to meet the Board to discuss these matters. I gave the Board ample time and opportunities to address the issues. Unfortunately, the Board’s responses indicated that it did not take these matters seriously and I had no choice but to shut down the Trust in the interests of local irrigators and the wider Victorian community. I have visited Mildura since then, and met with irrigator representatives to discuss the best way forward.
Since making the decision, further irregularities in the former FMIT’s management have come to light. For example, in June this year, the Board approved secret, last-minute adjustments to senior management contracts in the event of FMIT being taken over.
These adjustments provided termination payouts more than double those allowed in the Government Sector Executive Remuneration Panel’s guidelines. I also understand that tax was not withheld from the payouts, as required under Australian taxation law.
The Victorian Government and Lower Murray Water are now considering the options to recover this money so that it can be used to the benefit of all former FMIT customers, not just a few former staff.
Also enclosed is a letter from Lower Murray Water, detailing the way forward for former FMIT customers and providing assurances about pricing and delivery arrangements over coming months and years. I will encourage you to contact Lower Murray Water direct to discuss any queries.
FMIT customers and Mildura in general have much to look forward to, despite the difficult conditions caused by the ongoing drought. The Victorian Government has secured a Commonwealth commitment of up to $103 million for irrigation upgrades in the area, including in the First Mildura Irrigation District. We now all need to work together to make the most of this opportunity to secure a sustainable future for you and your family.

On or about 15 September 2008, the appellant sent copies of the Minister’s Letter in the mail to all former customers of the FMIT. Having distributed the letter, as requested, to former customers of the FMIT, Mr Leamon, the managing director of the appellant, made a decision to upload the Minister’s Letter to the appellant’s website, The appellant uploaded the Minister’s Letter on a page on its website which it had established, entitled ‘Integration of FMIT’. The Minister’s Letter was accessible from that page via a link entitled ‘Minister’s Letter to former FMIT customers’.

The circumstances which led to the Minister’s decision to close the FMIT and to sign the Minister’s Letter and cause it to be provided to the appellant with a request that the appellant send the Minister’s Letter to the former customers of the FMIT were as follows. The FMIT was established in 1895 and from that time provided irrigation services in the Mildura area. A unique feature of the FMIT was that its Board of directors was elected by local irrigators. By 2008, the FMIT had become established as ‘an icon in the Mildura community.’

In 2005, the Board of the FMIT proposed to upgrade the Mildura South Channel for which the FMIT required a significant amount of capital. In October 2006, the then Minister for Water, the Honourable John Thwaites MP, directed the FMIT that, in order to borrow the funds from the State government, it must apply to become an authority under the Borrowing and Investment Powers Act1987 (Vic)(‘BIP Act’).

The FMIT then applied to the Department of Treasury and Finance to become an authority under the BIP Act and to borrow $4.7 million for its purposes. The Department of Treasury and Finance required the FMIT to adopt a Treasury Management Policy in accordance with guidelines provided by the department. At its meeting on 20 March 2007, the FMIT Board resolved to approve a draft Treasury Policy which was put before it.

By an Order in Council dated 5 April 2007, the Governor in Council (pursuant to s 20 of the BIP Act and on the recommendation of the Treasurer) approved the FMIT investing its money in the manner described in the Schedule to the Order. The Schedule approved deposits, or investments, with the Treasury Corporation Victoria and with any authorised deposit taking institution under the Banking Act1959 (Cth).

In April 2007, the FMIT drew down its facility of $4.7 million and invested $4.2 million of that amount with Grange Securities, an investment broker. The investment was not made by the members of the FMIT Board but by the finance manager. Grange Investments was, at that time, understood to be a reputable investment broker. At the FMIT Board meetings in May and June 2007, the finance manager’s report referred to investments of $4.2 million having been made with Grange Securities but ‘there was little, or no, discussion at either Board meeting, or any ensuing Board meeting, concerning those investments.’ In particular, there was no evidence of any discussion to the effect that Grange Securities was lending funds to the United States sub-prime mortgage market.

In July 2007, the FMIT withdrew $2 million of the funds advanced to Grange Securities, for the purpose of paying an instalment on the works being undertaken on the Mildura South Channel. That withdrawal reduced the amount placed by the FMIT with Grange Securities to $2.2 million.

In mid-August 2007, the FMIT was made aware, by the Auditor-General, that Grange Securities had invested $1.5 million of its funds with Lehman Brothers Treasury Company ‘Federation AAA’ CDOs (collateralised debt obligations), and $0.7 million in Zircon Finance Limited ‘Merimbula’ CDOs. The Board learnt, at that time, that both investments had been adversely affected by the United States sub-prime mortgage market crisis. The Board of the FMIT determined to retain the investments, rather than to seek to realise them, and thus crystallise what, at that time, would have been a substantial loss on the investments.

In March 2008, the Honourable Tim Holding MP, who had by that time become the Minister for Water, issued the FMIT with thirteen directions pursuant to s 307(1) of the Water Act.

In May 2008, the Minister appointed Deloitte Touche Tohmatsu (‘Deloitte’) to investigate and prepare a report on the commercial affairs of the FMIT. The key findings of Deloitte, contained in a report dated 13 June 2008, were that the short-term, medium-term and long-term viability of the FMIT was at risk. It found that the FMIT’s short‑term viability was at risk, without additional funding, because of factors such as revenue shortfalls, and also because of the impact of the Grange Securities investments. It found that the FMIT’s medium and long-term viability was at risk because of external factors, such as the ongoing drought, demographic shifts and urban encroachment, and increased trading of water entitlements out of the FMIT district.

In June 2008, the Board of the FMIT approved changes to the employment contracts of four of its senior officers, including the finance manager and the managing director. The effect of the changes was that if the FMIT was taken over by the appellant, those officers, at their option, would be entitled to take 12 months’ salary by resigning at any time before the end of their contract period. The FMIT Board was concerned to ensure that these officers did not resign prematurely, and seek other employment, because of uncertainty surrounding the future of the FMIT. The Board did not advise the Minister, or his department, of its approval of the changes to the contract entitlements of the four staff members. The changes, approved by the Board, were not in conformity with the Victorian Government Sector Executive Remuneration Policy guidelines, which allowed only 4 months’ remuneration in lieu of notice.

On 15 August 2008, the Minister advised the FMIT in writing of his decision that the appellant was to be appointed to take over the functions, powers and duties of the FMIT under the Water Act. The Minister attached to that correspondence a document entitled ‘Reasons for Determination’. The Minister’s decision was to take effect as from 19 August 2008. On 18 August 2008, the Minister wrote letters to the Clerk of the Legislative Council, and to the Clerk of the Legislative Assembly, requesting them to lay a copy of the ‘Reasons for Determination’ before both Houses of Parliament, as required by s 87(2)(b)(ii) of the Water Act.

The Minister’s decision to close the FMIT was met with a very strong emotional public response by the Mildura community. On 17 August 2008, there was a large public rally outside the FMIT offices, protesting against the decision.

On 19 August 2008, three of the four officers of the FMIT whose contract arrangements had been altered with the approval of the Board resigned, thus triggering their entitlements to 12 months’ salary.

On 20 August 2008, there was a large protest outside the Grand Hotel in Mildura where the appellant representatives were giving a press conference. Protestors entered the hotel and a physical scuffle ensued. Six days later, the Minister attended Mildura in order to explain his decision to close the FMIT. On that occasion, there was a very large rally outside the offices of the appellant. Angry placards were carried by some of the protesters, and some of them struck the car in which the Minister arrived.

On or about 16 September 2008, the Minister’s Letter was republished in full (with the exception of the words ‘Dear Customer’) in the local newspaper, the Sunraysia Daily.

On 8 November 2008, KordaMentha, accountants, reported to the appellant that $1.5 million of the Grange Securities investment had been recovered. That fact, at that stage, caused the allegation made by Mr Holding in the sixth paragraph of the Minister’s Letter to be false (namely, the allegation that the money invested in the United States sub-prime mortgage market had lost $2 million of its value).

During 2010 (as found by the jury) Mr Daniel Lee and Mr Cosimo Dichiera accessed the appellant’s website and downloaded and read the Minister’s Letter. Mr Lee, who was chairman of the Sunraysia Irrigators’ Council, spoke about the Minister’s Letter at, at least, one or two of the subsequent meetings of the Council (which meetings were ordinarily attended by about 30 to 40 members). Mr Dichiera spoke about the Minister’s Letter with his immediate family, his neighbours, growers and friends.

Prior to the appellant publishing the Minister’s Letter in 2010, each of the respondents had a high reputation in the Mildura district.

The respondents each originally read the Minister’s Letter in 2008. At that time, each of the respondents felt angry, appalled, distressed, embarrassed and ashamed. However, as the proceedings below were commenced by writs issued in August 2010, the respondents were only able to seek damages in respect of publications of the Minister’s Letter occurring within the one year period prior to the dates in August 2010 when the writs were issued.[1] Thus the respondents were only entitled to damages in respect of the publications constituted by the relevant downloading and reading of the Minister’s Letter in 2010. That said, in assessing damages, the trial judge found that there was a ‘grapevine effect’ originating from the publication of the letter to Mr Lee and Mr Dichiera in 2010.
[1]Limitation of Actions Act 1958 (Vic) s 5(1AAA).

Each of the respondents gave evidence in relation to the accessibility of the Minister’s Letter via the appellant’s website in 2010. Mr Belbin gave evidence that he felt disgusted, angry and upset. It brought back to him the stress, concerns and pressure to which he had been exposed in 2008, and the negative implications caused by the Minister’s Letter towards him and his character and integrity. Mr Marciano reacted with disbelief, and said that all the bad feelings he had previously felt returned to him. He felt embarrassed and ashamed. When Mr Di Masi learned that the Minister’s Letter was on the appellant’s website, he said it reinforced everything which he had felt in 2008 when he first read the Minister’s Letter. It reinforced feelings that he had betrayed his family’s reputation in the community.

The proceedings below

Each of the respondents pleaded three false innuendos. They pleaded that in its ordinary and natural meaning the Minister’s Letter was defamatory of them and meant and was understood to mean that:

(a) [the relevant respondent] broke the law by investing $2.2 million of Victorian Government money without Treasury approval;

(b) [the relevant respondent] acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market; and

(c) [the relevant respondent] approved secret, last minute adjustments to senior management contracts in the event of the FMIT being taken over.

Each respondent claimed damages, including an entitlement to aggravated damages. The bases for the claims of aggravated damages were that the appellant had no genuine belief in the truth of the Minister’s Letter at the time it was published; alternatively, the appellant was recklessly indifferent as to the truth of the letter at the time it was published; additionally, the appellant has failed or refused to apologise to [the relevant respondent] for the publication of the Minister’s Letter; and finally, the appellant continues to publish the Minister’s Letter despite having been requested to cease doing so by the solicitors for the respondents.

Originally, the appellant relied upon defences of justification pursuant to s 25 of the Defamation Act 2005 (Vic) (‘Defamation Act’), a defence of contextual truth pursuant to s 26 of the Defamation Act, a defence that the defamatory content was contained in a fair copy of a public document pursuant to s 28 of the Defamation Act, and a defence of qualified privilege under s 30 of the Defamation Act.

In November 2011, the appellant abandoned its defences of justification and contextual truth. However, at the commencement of the trial, the appellant added a defence of qualified privilege at common law.

The proceedings came on for trial in Mildura before a judge of the Trial Division and a jury of six. The conduct of the trial was bifurcated between the jury and the trial judge. It was the role of the jury to determine whether the appellant had published defamatory matter about the respondents (s 22(2) of the Defamation Act) and any disputed questions of fact on liability. It was for the trial judge to determine (if necessary) whether the matter was published on an occasion of qualified privilege at common law and/or under s 30 of the Defamation Act (s 22(5)(b) of the Defamation Act). It was common ground that, in the circumstances of the case, it would be a question of law for the judge, and not for the jury, to determine whether the Minister’s Letter was ‘issued by … an officer … of the government’ for the purposes of s 28(4)(d) of the Defamation Act. Further, by agreement between counsel, it was determined that the trial judge would decide (if necessary) whether the defence under s 28 of the Defamation Act was made out. The trial judge was required to determine any questions of law relating to liability and (if necessary) assess any award of damages.[2]
[2]DefamationAct s 22(3).

After a trial lasting 22 days, on 21 August 2012, the jury returned its verdicts by giving the following answers to the following questions in each proceeding:

1Has [the relevant respondent] established that one or more people in Victoria, in the period between August 2009 and August 2010, downloaded and read the matter complained of, and reasonably understood it to refer to [the respondent]? - - - Yes.
If yes to Question 1:

2Has [the relevant respondent] established that the matter complained of, in its ordinary and natural meaning, would have conveyed to the ordinary reasonable reader any of the following imputations, or imputations not substantially different from them:
(a)that [the respondent] broke the law by investing $2.2 million of Victorian Government money without Treasury approval? - - - Yes.
(b)that [the respondent] acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States Sub-Prime Mortgage Market? - - - Yes.
(c)that [the respondent] approved secret, last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over? - - - Yes.
If yes to Question 1:

3Has [the relevant respondent] established that the following persons downloaded and read the letter from [the appellant’s] website on or after 20 August 2009 in Victoria?
(a)Daniel Lee  Yes
(b)Glenn Milne  No
(c)Glenn Miller  No
(d)Mary Price  Yes
(e)Cosimo Dichiera  Yes
(f)Louisa Prevedello  Yes
(g)the husband of Louisa Prevedello  No
(h)Evan Rice  No
(i)Marie Marciano  No
(j)John Dimasi  No
(k)an unidentified person at Goulburn Valley            No
Water

3AHas [the relevant respondent] established that Glenn Miller downloaded the letter from [the appellant’s] website on or after 20 August 2009 in Victoria and identified the letter as that which he had previously read? - - - Yes.
4 (a) If ‘yes’ to question 3(b), are you satisfied that Glenn Milne downloaded and read the letter because he was referred to it by Mr Dimasi? - - - [Not asked because of a negative answer to question 3(b)].
(b)If ‘yes’ to question 3A, are you satisfied that Glenn Miller was referred to the letter which he downloaded on or after 20 August 2009 by Mr Dimasi? - - - No.
(c)If ‘yes’ to question 3(d), are you satisfied that Mary Price downloaded and read the letter because she was referred to it by Mrs Prevedello? - - - No.
(d)If ‘yes’ to question 3(f), are you satisfied that Louisa Prevedello downloaded and read the letter because she was referred to it by Mrs Prevedello? - - - Yes.
(e)If ‘yes’ to question 3(g), are you satisfied that the husband of Louisa Prevedello downloaded and read the letter because he was referred to it by Louisa Prevedello? - - -[Not asked because of a negative answer to question 3(g)].
(f)If ‘yes’ to question 3(h), are you satisfied that Evan Rice downloaded and read the letter because he was referred to it by Louisa Prevedello? - - - [Not asked because of a negative answer to question 3(g)].
(g)If ‘yes’ to question 3(i), are you satisfied that Marie Marciano downloaded and read the letter because she was referred to it by Mr Marciano? - - - [Not asked because of a negative answer to question 3(i)].

5If ‘yes’ to any of the persons referred to in question 3, has [the relevant respondent] established that when that person so downloaded and read the letter from the [appellant’s] website on or after 20 August 2009 in Victoria, he or she reasonably understood it to be of and concerning [the respondent]?
(a)Daniel Lee  Yes
(b)Glenn Milne
(c)Glenn Miller
(d)Mary Price  No
(e)Cosimo Dichiera  Yes
(f)Louisa Prevedello  No
(g)the husband of Louisa Prevedello
(h)Evan Rice
(i)Marie Marciano
(j)John Dimasi
(k)an unidentified person at Goulburn Valley
Water[3]
[3]Verdicts were not taken from the jury on parts (b), (c), (g), (h), (i), (j) and (k) of question 5 because of the jury’s negative answers to the corresponding parts of question 3.

5AIf ‘yes’ to question 3A, has [the relevant respondent] established that when Mr Miller so downloaded the letter from [the appellant’s] website on or after 20 August 2009 in Victoria and identified the letter as that which he had previously read, Mr Miller reasonably understood it to be of and concerning the [respondent]? - - -   Yes[4]
[4]Although the transcript records the jury’s answer as ‘yes’ for Mr Di Masi and Mr Belbin, it records the jury’s answer as ‘no’ in respect of Mr Marciano. However, nothing turns on this for the purpose of these appeals.
6Has [the appellant] established that Mr Holding caused the letter to be provided to [the appellant] with a request that [the appellant] send the letter to the former customers of the FMIT? - - - Yes.
If yes to Question 6:
7(a)       Has [the appellant] established that a substantial purpose[5] of Mr Holding was to provide information to:
[5](Emphasis in original.)
(i)the former customers of the FMIT? - - - No.
(ii)the customers of the merged FMIT and Lower Murray Water? - - -   No.
(iii)an appreciable section of the general community in and around Mildura? - - - No.
(iv)the general community in and around Mildura? - - - No.

(b)has [the appellant] established that a principal purpose[6] of Mr Holding was to provide information to:
[6](Emphasis in original.)
(i)the former customers of the FMIT? - - - No.
(ii)the customers of the merged FMIT and Lower Murray Water? - - - No.
(iii)an appreciable section of the general community in and around Mildura? - - - No.
(iv)the general community in and around Mildura? - - - No.

(c)has [the appellant] established that the principal purpose[7] of Mr Holding was to provide information to:
[7](Emphasis in original.)
(i)the former customers of the FMIT? - - - No.
(ii)the customers of the merged FMIT and Lower Murray Water? - - - No.
(iii)an appreciable section of the general community in and around Mildura? - - - No.
(iv)the general community in and around Mildura? - - - No.

8Has [the appellant] established that Mr Leamon believed at all times on and after about 15 September 2008 that the letter was a legitimate part of the historical record concerning the closure of the FMIT and its merger with [the appellant]? - - - No.
9Has [the appellant] established that Mr Leamon believed at all times on and after about 15 September 2008 that the letter legitimately formed part of the Minister’s explanation for his decision to close the FMIT and merge it with [the appellant]? - - - No.
10Has [the appellant] established that it placed the letter on its website without:
(a)intending to endorse, on the website, the allegations made by the Minister? - - - No.
(b)in fact endorsing, on the website, the allegations made by the Minister? - - - No.

11Has [the appellant] established that it uploaded the letter to its website as part of the ordinary course of its business? - - - No.
12Has [the appellant] established that Mr Leamon honestly believed that [the appellant] had a duty to make the letter available on its website:
(a)at the time the letter was uploaded to [the appellant’s] website? - - - Yes.
(b)at all times prior to requesting that his staff take the letter off its website? - - - No.
(c)at all times prior to the removal of the letter from the website? - - - No.

13Has [the relevant respondent] established that the dominant motive of [the appellant], in publishing the letter, was an improper purpose, which was ulterior to a duty of [the appellant] to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water? - - - Yes.

By its verdicts in the respondents’ proceedings, the jury found that:

(a) the Minister’s Letter, published by the appellant, bore the three imputations pleaded by each of the respondents (or imputations not substantially different from those imputations);

(b) the Minister’s Letter had been downloaded and read in Victoria, between August 2009 and August 2010 by Mr Lee and Mr Dichiera; and

(c) each of Mr Lee and Mr Dichiera reasonably understood the Minister’s Letter to be of and concerning each of the respondents.

Accordingly, on the jury’s verdicts and subject to any ruling to the contrary by the trial judge, each of the respondents established two causes of action in respect of their claims in defamation against the appellant.

In October 2012, the parties returned before the trial judge for legal argument and submissions on defences and damages (including submissions on interest and costs). By reason of the jury’s verdict in response to question 13 (which was a finding by the jury that the appellant was actuated by malice at the time it published the Minister’s Letter to Mr Lee and Mr Dichiera), the appellant conceded that its defence of qualified privilege at common law could not succeed.

On 9 November 2012, the trial judge delivered his judgment in which he ruled that the appellant had not established any of the defences upon which it relied.[8] The trial judge awarded damages to each of the respondents, including aggravated damages, of $70,000. Each respondent was also awarded damages in the nature of interest in the sum of $4,677. These awards of damages exceeded the value of offers of compromise filed by each of the respondents. As a consequence, the appellant was ordered to pay each respondent’s costs of and incidental to the proceeding on an indemnity basis.
[8]Belbin & Ors v Lower Murray Urban and Rural Water Corporation [2012] VSC 535 (‘Reasons’).

The present appeals

The appellant filed a notice of appeal in each proceeding on 26 November 2012. In addition, the appellant has made applications seeking extensions of time (if necessary) in relation to its appeals from the jury’s verdicts delivered on 21 August 2012. The respondents concede that no extension of time is necessary and that the appellant’s appeals are within time. That concession is properly made. Accordingly, it is not necessary for this court to grant the appellant any extension of time.

The appellant’s grounds of appeal in each appeal are as follows:

Jury Verdicts
1.The verdicts of the jury in answer to questions 7(a) and (b) were against the evidence or the weight of the evidence and were verdicts that reasonable jurors could not reach.
2.The verdict of the jury in answer to question 8 was against the evidence or the weight of the evidence and was a verdict that reasonable jurors could not reach.
3.The verdict of the jury in answer to question 9 was against the evidence or the weight of the evidence and was a verdict that reasonable jurors could not reach.
4.The verdict of the jury in answer to question 10 was against the evidence or the weight of the evidence and was a verdict that reasonable jurors could not reach.
5.The verdict of the jury in answer to question 11 was against the evidence or the weight of the evidence and was a verdict that reasonable jurors could not reach.
6.The verdicts of the jury in answer to questions 12(b) and (c) were against the evidence or the weight of the evidence and were verdicts that reasonable jurors could not reach.

Section 28 defence
7.The trial judge erred in law in holding that the letter of the former Minister for Water, the Honourable Tim Holding MP, referred to in paragraph 24 of the judgment (Letter), was not ‘issued’ by Mr Holding for the purposes of section 28(4)(d) of the Defamation Act 2005 (Vic) (Act).
8. The trial judge erred in law in holding that if the Letter was issued by Mr Holding, it was not issued for ‘information’ within the meaning of section 28 (4)(d) of the Act.
9. The trial judge erred in law in holding that if the Letter was issued by Mr Holding for information, it was not issued for the information ‘of the public’ within the meaning of section 28(4)(d) of the Act.

Section 30 defence
10. The trial judge erred in law in holding that the appellant had failed to establish that its conduct, in republishing the Letter on its website, was reasonable in the circumstances within the meaning of section 31 (1)( c) of the Act (scil, s 30(1)(c) of the Act).

Damages
11. The trial judge erred in law in assessing damages by reference to a ‘grapevine’ effect originating from the republication of the Letter by the appellant.
12. The trial judge erred in law in holding that the appellant was not entitled to rely, by way of mitigation of damages, upon evidence of the respondent’s significant shortcomings in the discharge of his role as a member of the Board of the First Mildura Irrigation Trust.
13. The trial judge erred in law in holding that the appellant was entitled to an award of aggravated damages.
14. The damages awarded by the trial judge are manifestly excessive.

Other matters
15. His Honour erred in law in awarding indemnity costs to the respondent.

Broadly speaking, there are six areas of complaint made by the appellant on these appeals: two relate to the jury’s answers to questions posed to it, and four relate to the judge’s determination of matters within his province. Specifically, the appellant makes complaint:

(a) in ground 1, about the jury’s answer to a jury question relating to the s 28 defence (question 7);

(b) in grounds 2 to 6, about the jury’s answers to questions relevant to the qualified privilege defences, or more particularly, the qualified privilege defence in s 30 of the DefamationAct (questions 8, 9, 10, 11 and 12(b) and (c));

(c) in grounds 7 to 9, about certain conclusions made by the judge in respect of the s 28 defence;

(d) in ground 10, about a conclusion made by the judge in respect of the s 30 qualified privilege defence;

(e) in grounds 11 to 14, about the judge’s awards of damages; and

(f) in ground 15, about the judge’s costs orders.

The jury questions relevant to these appeals[9] were answered identically in each of the proceedings brought by the respondents. Question 7 was predicated on an affirmative answer to question 6. In question 6, the jury was asked whether the appellant had established that Mr Holding caused the Minister’s Letter to be provided to the appellant with a request that the appellant send the letter to the former customers of the FMIT. In each case, the jury answered question 6 in the affirmative. Question 7 (which was divided into 12 parts) was directed to whether the appellant had established that a substantial purpose, or a principal purpose, or the principal purpose, of Mr Holding was to provide information to either the former customers of the FMIT, or the customers of the merged FMIT and Lower Murray Water, or an appreciable section of the general community in and around Mildura, or the general community in and around Mildura. The jury answered ‘no’ to all parts of question 7 in each of the three proceedings. The effect of the jury’s answer to question 7 was that the jury was not satisfied that the appellant had established that, in causing the letter to be provided to the appellant with a request that it be sent to the former customers of the FMIT, it was either a substantial purpose, or a principal purpose, or the principal purpose of Mr Holding to provide information to the former customers of the FMIT, or to the customers of the merged FMIT and Lower Murray Water, or to an appreciable section of the general community in and around Mildura, or to the general community in and around Mildura.
[9]Questions 7 to 13 (jury questions 7 to 12 being relevant to grounds 1 to 6, and jury question 13 being relevant to one of the appellant’s arguments in respect of ground 10, about which we will say more below).

Questions 8 to 12 (relevant to the s 30 qualified privilege defence) were asked and answered by the jury in the terms which we have set out above.

While the appellant makes complaint about the way the judge used some of the jury’s answers to the questions posed to it, in essence, grounds 1 to 6 assert that the jury was effectively bound to accept that the defendant had established the matters enquired of in questions 7, 8, 9, 10, 11 and 12(b) and (c). At trial, both Mr Holding and Mr Leamon gave evidence. Both were subjected to detailed cross-examination. The possibility exists that the jury answered one or some of the questions they answered in the negative simply because they were not satisfied one way or the other. As has been said many times, a party seeking to overturn a jury’s negative answer to a question upon which that party bore the onus faces a particularly difficult task.[10] In the circumstances, it is convenient to deal with the complaints made about the jury’s answers to the questions posed to it by reference to the relevant issue to which each question relates.
[10]See generally, Hocking v Bell (1945) 71 CLR 430, 441-2 (Latham CJ, in dissent); Hocking v Bell (1947) 75 CLR 125, 130-1 where the Privy Council approved Latham CJ’s judgment at 71 CLR 441; Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33, 46-7 (Brennan J). See also Swain v Waverly Municipal Council (2004) 220 CLR 517.

The s 28 defence: grounds 1 and 7 to 9

Section 28 of the DefamationAct relevantly provides:

(1) It is a defence to the publication of defamatory matter if the defendant proves that the matter was contained in –
(a)a public document or a fair copy of a public document …

…
(3)A defence established under subsection (1) is defeated if, and only if, the plaintiff proves that the defamatory matter was not published honestly for the information of the public or the advancement of education.
(4)In this section –
public document means –
…
(d)any document issued by the government (including a local government) of a country, or by an officer, employee or agency of the government, for the information of the public.

As the judge noted, to succeed in its s 28 defence, the appellant had to prove that the Minister’s Letter, which it published, was a document issued by Mr Holding for the information of the public. The parties’ competing submissions in relation to this defence at trial raised three principal issues, namely:

(a) whether the Minister’s Letter was ‘issued’ by Mr Holding;

(b) whether the phrase ‘for the information of’ is construed by reference to the objective, or subjective, purpose or intention of Mr Holding; and

(c) the meaning of the phrase ‘the public’.

The judge held that the Minister’s Letter was not ‘issued’ within the meaning of that word as used in the definition of ‘public document’ in s 28(4)(d). His Honour said:

86The first question, concerning the defence raised under s 28 of the Defamation Act, concerns the meaning of the word ‘issued’ in the definition of ‘public document’ in s 28(4)(d). In particular, the question is whether the letter written by Mr Holding was ‘issued’ by the government (or by an officer, employee or agency of the government).
87The various definitions of ‘public document’ in s 28(4) differentiate between a document which is ‘published’ (subparagraph (a)), a document which is ‘issued’ (subparagraph (d)), and a document which is ‘kept’ (subparagraph (e)). Unsurprisingly, the Defamation Act, and s 28, use the verb ‘publish’ in the sense in which it is understood in defamation law, as connoting the communication of defamatory material, about a person, by a defendant to another person.
88Section 28(4)(e) contemplates circumstances in which a record or any other document is ‘kept’ by an Australian jurisdiction, a statutory authority, a court, or under legislation of an Australian jurisdiction, and which becomes published. Similarly s 28(4)(d) contemplates documents, which may be ‘issued’ by a government (or an officer, employee or agency of the government), and which are published.
89Clearly, a document may be kept without being published; conversely, a document may be published without being kept. Similarly, the verb ‘issue’ and the verb ‘publish’ are not synonymous. Not every document published by a government, or by an officer, employee or agency of the government, would, per se, be issued by the government (or by the officer, employee or agency of the government). Conversely, while a document issued by the government may thereby be published by the government, it does not follow that each document, issued by a government (or an officer, employee or agency of the government), is thereby ‘published’ as that word is understood in defamation law.
90It is important, in construing ‘issued’, to bear in mind the context in which that word is found. In particular, it is significant that s 28(4)(d) only applies to a document which has been issued by a government (or by an officer, employee or agency of the government), and to a document which has been so issued for the information of the public. Ordinarily, when a government, or an agency, issues a document, it is for the purposes of giving or pronouncing a mandatory direction, or for disseminating a particular warning. Thus, in the context of the operations of governments and agencies of government, a health department might issue a relevant warning; likewise the Bureau of Meteorology might issue a storm warning. Similarly, as I stated, a document issued may contain a mandatory direction or command. Thus, a writ of summons may be issued; directions, edicts and proclamations may, equally, be issued.
91The factor, which is common to each of those usages of ‘issued’, in the context of a governmental document, is to be found in the official nature of the document, and in the manner in which the document itself is made public. That construction is reinforced by reference to the other defined meanings of ‘public document’ in s 28(4). Each of the documents, referred to in the other subparagraphs of the definition, are formal, official documents. Thus, subparagraph (a) relates to reports or papers published by a Parliamentary body, or records of the proceeding of a Parliamentary body; subparagraph (b) relates to judgments, orders or other determinations of courts and tribunals; subparagraph (c) relates to reports or other documents authorised to be published, or required to be presented or placed, before a Parliamentary body by the law of any country; subparagraph (e) refers to records or other documents open for inspection by the public, which are kept by an Australian jurisdiction, an Australian statutory authority, an Australian court, or under legislation of an Australian jurisdiction.
92That construction of ‘issued’, in s 28(4)(d), gains some support from the judgment of Jordan CJ in Campbell v Associated Newspapers Limited[11]. That case concerned the construction of s 29(1)(g) of the Defamation Act 1912 (NSW), which provided a defence for the publication, in good faith, of ‘… any notice or report issued for the information of the public … ‘. In construing that phrase, Jordan CJ stated:[12]
‘The notice or report must be of genuinely official nature, and must be issued in such circumstances that it may fairly be regarded as issued for the information of the public. It is not, of course, for this Court to assume to lay down rules for what is, and what is not, proper to be made the subject of a governmental or police notice or report. I see no reason for doubting that an authoritative announcement of an official character made or handed to members of the press for publication in their respective newspapers would, or at least could, constitute a notice or report issued for the information of the public …’ .[13]
93In this case, the letter was written by Mr Holding, as the Minister for Water, to the former customers of the First Mildura Irrigation Trust, as an explanation for the action which he had already undertaken in closing down the Trust, and merging it with the defendant. In the fourth paragraph of the letter, Mr Holding stated that he wished to counter what he described as ‘highly emotive and selective accounts’ of recent events, and explain the reasons for his decision. It would, in my view, be contrary to the ordinary meaning of the word ‘issued’, and to the meaning of that word in its statutory context, to characterise the dissemination by Mr Holding of that letter as the ‘issue’ by him of it. The letter did not contain the relevant official character or quality, which is common to the other documents defined in s 28(4). Nor did it belong to the type of documents which are, ordinarily, understood to be described as being ‘issued’ by a government, or by an officer, employee or agency of the government. Rather, as I have observed, the letter constituted the explanation by Mr Holding of the decision, which he had made to close the First Mildura Irrigation Trust, of which the persons, to whom the letter was sent, were customers at the time of its closure. For those reasons, I do not consider that the letter by Mr Holding was ‘issued’ by him for the purposes of s 28(4)(d) of the Act.[14]

[11](1948) 48 SR (NSW) 301 (‘Campbell’).

[12]Ibid 303.

[13]See also Blackshaw v Lord [1984] 1 QB 1, 24 (Stephenson LJ), 38 (Dunn LJ).

[14]Reasons [2012] VSC 535 [86]-[93] (citations in original).

The judge’s conclusion that the Minister’s Letter was not ‘issued’ within the meaning of s 28(4)(d) of the DefamationAct was sufficient for his Honour to dispose of the appellant’s s 28 defence. However, his Honour went on to deal with the second s 28 issue (the proper construction and application of the phrase ‘for the information of’) and the third s 28 issue (the proper construction and application of the expression ‘the public’). In respect of the second s 28 issue, his Honour said:

95The second issue, concerning s 28(4)(d), related to the construction of the phrase ‘for the information of’. As I have noted, Dr Collins submitted that the question, whether the document was issued ‘for the information of’ the public, is to be determined objectively, without regard to the subjective intentions of the author, or of the agency, which issued the document.
96As a matter of plain construction, the phrase ‘for the information of the public’ qualifies the passive verb ‘issued’. In that way, it describes the purpose served by the issue of the document by the government (or by an officer, employee or agency of the government). In other words, the phrase is not descriptive of the document itself, but, rather, it prescribes the purpose or reason for the issue of the document.
97An inquiry, as to whether the document was issued ‘for the information of the public’, must, necessarily, involve some determination of the purpose of the issue of the document. Even if, as Dr Collins has submitted, the purpose of the issue of the document is to be ascertained by reference to the document and the background circumstances, the court would, by that process, be drawing an inference, from those factors, as to the purpose of the particular agency or person, who issued the document.
98There is nothing in s 28(4)(d) which restricts such an inquiry to an examination of the document alone. Indeed, Dr Collins recognised the artificiality of such a narrow proposition. He submitted that the question, whether the document was issued for the information of the public, could be determined, not only by reference to the document, but also by reference to the effect, which the document had on the minds of persons to whom the document was published. In that respect, Dr Collins referred to and relied on the evidence of a number of witnesses, who regarded the letter as Mr Holding’s attempt to provide an explanation for his decision to close the FMIT. Dr Collins also accepted that the question, whether the document was issued for the information of the public, is to be determined by reference to the background circumstances in which the document was issued.
99Pausing there, if, as Dr Collins submits, it were permissible to determine the question, whether the document was issued for the information of the public, by reference to the effect which the document had on the minds of the recipients of it, there is no logical reason why it would not be permissible to ascertain the purpose of the issue of the document by reference to the intention of the person issuing it. If the subjective effect of the document on the minds of the recipients is a relevant factor to take into account, in determining whether the document was issued for the information of the public, equally, or indeed even more so, it would be relevant to take into account any evidence concerning the actual purpose of the agency or the person who was responsible for the issue of the document.
100Dr Collins submitted that a construction of the phrase ‘for the information of the public’, which involved an inquiry into the subjective intention of the agency or person responsible for the issue of the document, would introduce a degree of uncertainty into the application of the defence under s 28(4)(d), which could not have been intended by the legislature. In particular, he submitted that such a construction would leave any republisher of the document (such as a media outlet) at the whim of the subjective intention of the agency or person, who originally issued the document.
101There are, in my view, two answers to that proposition. First, the degree of uncertainty involved in such a construction would be considerably less than the uncertainty which would result if (as Dr Collins submitted) the question, whether the document was issued for the information of the public, is to be determined by reference to the effect which the document had on the minds of the recipients of it. Secondly, and more importantly, the uncertainty, contended for by Dr Collins, is more apparent than real. If the verb ‘issued’ is construed in the manner in which I have already concluded, there would be few government documents, containing information, which would not be issued for the provision of that information to the public. In other words, any uncertainty of the kind contended for by Dr Collins would only result if, contrary to my earlier conclusion, the verb ‘issued’ were to be construed as synonymous with ‘published’. Otherwise, if the verb ‘issued’ is properly construed, ordinarily, if not almost invariably, a document ‘issued’ by the government (or an officer, employee or agency of the government), which contained information, would manifestly be issued for the provision of that information to the public.
102Dr Collins’ principal submission, on this aspect of the construction of s 28(4)(d), was that if the question whether the document was issued for the information of the public is to be determined by reference to the subjective intention of the agency or person responsible for issuing it, there would be a necessary tension between subsection (4)(d), and subsection (3), of s 28.
103I do not accept that there is any such tension, or anomaly, in cases in which someone, other than the original author of the document (for example a media outlet), publishes it, and seeks to rely on s 28(4)(d). In such a case, the protection afforded by s 28(1) would apply, provided that the document, which was so republished, was a document which was originally published for the purpose of providing the information in it to the public. In such a case, s 28(1) would protect the re-publisher of such a document, unless the plaintiff, pursuant to subsection (3), is able to demonstrate that the republisher did not publish the document honestly for the information of the public or the advancement of education. In other words, provided that the document was originally issued for the information of the public (that is, for the purpose of providing that information to the public), the document may be republished with impunity, unless the plaintiff is able to prove that the re-publisher did not publish the document honestly for the information of the public or the advancement of education. In that way, the two subsections work harmoniously, and there is not, as contended by Dr Collins, any tension between them.
104On the other hand, it is correct, as Dr Collins has contended, that s 28(3) would have no function in a case where the plaintiff sued the original agency or person, who was responsible for issuing the document, and where the agency or person sought to bring the document within s 28(4)(d). In such a case, in order that a defence based on s 28(1) and s 28(4)(d) succeed, the person or agency, responsible for issuing the document, would be required to prove that the document was issued for the information of the public. Thus, in such a case, a plaintiff would not need to resort to s 28(3). The onus of proof of the purpose of the agency or person, responsible for the original issuing of the document, would lie on that agency or person.
105However, such a conclusion would not, as Dr Collins submitted, ‘deprive’ subsection (3) of any effect. First, as I have already observed, subsection (3) has potential application in all cases in which a plaintiff sues the republisher of a document which falls within s 28(4)(d). Secondly, s 28(3) would also have potential application in cases of the publication (or republication) of any document falling within subparagraphs (a) to (c) and (e) to (g) of the definition of ‘public document’ in subsection (4). Indeed, the documents defined in s 28(4)(a)(c) and (f) are documents which are ‘published’ by a particular agency or institution. Section 28(1) provides a defence to the publication, by those agencies and institutions, of such documents. In each such case, the plaintiff would be entitled to invoke s 28(3) in response to such a defence.
106Thus, I do not accept the contention that s 28(3) would be deprived of effect, if the phrase, ‘for the information of the public’, in s 28(4)(d), was construed so as require the defendant to establish that the document in question was published for the purpose of providing the information, in it, to the public.
107For those reasons, I do not accept the submission by Dr Collins that, in an appropriate case, evidence, and a verdict by a jury, as to the subjective purpose of the original author of a document, issued by a government (or by an officer, employee or agency of the government), is irrelevant to determining whether that document was issued ‘for the information of’ the public. As I stated, ordinarily, the purpose of the agency or person, who issued the document, be ascertained by a process of inference in the document, and, if necessary, from the surrounding circumstances. However, in such a case, such an inference would be directed to ascertaining the specific purpose for which the agency or person, responsible for the document, issued it.
108In the present case, having considered the document, the relevant background circumstances, and Mr Holding’s evidence, the jury, in answer to Question 7, found that the defendant had not established that a substantial purpose, a principal purpose, or the principal purpose, of Mr Holding, in disseminating the document, was to provide information to any of the following persons, namely: the former customers of FMIT; the customers of the merged FMIT and Lower Murray Water; an appreciable section of the general community in and around Mildura; or the general community in and around Mildura. For the reasons I have stated, I consider that that finding, as to Mr Holding’s purpose in disseminating the document, is relevant to, and conclusive of, the question whether the letter published by Mr Holding was issued by him ‘for the information of’ the public for the purposes of s 28(4)(d). Based on the jury’s finding, the answer to that question must be in the negative.[15]

[15]Reasons [2012] VSC 535 [95]-[108].

With respect to the third s 28 issue (the construction and application of the expression ‘the public’), his Honour said:

109The third issue, concerning the application of s 28(4)(d), is whether the document was published by Mr Holding for the information of ‘the public’. As I stated, Dr Collins submitted that the phrase ‘the public’, in that context, means an appreciable section of the general community, to be contrasted with an individual or a group of individuals in their capacity as individuals, or an internal group of which the author of the document in question is a part. On the other hand, Mr Gilbertson submitted that, while ‘the public’ may consist of an appreciable section of the general public, it could not consist of a closed class, the identity of all members of which could be ascertained.
110In my view, the construction contended for by Dr Collins is too wide, in that it embraces groups of persons who would not, ordinarily, be properly understood to constitute ‘the public’. When pressed, Dr Collins accepted that his definition of ‘the public’, for the purposes of s 28(4)(d), would have the result that a letter written by the Attorney-General to each member of the Victorian Bar would constitute a document published by the Attorney-General ‘for the information of the public’.

111The shortcoming in Dr Collins’ definition is that, by definition, a communication, specifically confined to a group of individuals, who form part of a group, could not, in ordinary parlance, be understood to be a communication for the information of ‘the public’. Thus, in the example to which I have just referred, a letter written by the Attorney-General, the distribution of which was confined to members of the Victorian Bar, could not sensibly be understood to be a communication ‘for the information of the public’.
112In construing ‘the public’, it is important not to disregard the context in which it is found in s 28(4)(d). In particular, it is necessary that the document be issued by the government (or an officer, employee or agency of the government) for the information of ‘the public’. Certainly, a document may be publicly issued, which only affects, or indeed is directed to, a particular group of the public, such as the consumers of a particular product or service. However, such a document would be issued for the information of ‘the public’, notwithstanding that only a specific group, or confined number, of the ‘public’ may be affected by or interested in it.
113For the purposes of s 28(4)(d), ‘the public’ need not necessarily be constituted by the whole of the Victorian public. Certainly, in its context, a document would be issued by the government for the information of the public, if it was issued or published to members of a geographic region or locality, such as, in this case, the Mildura community. The feature of such a document, which would constitute it a communication for the information of ‘the public’, is that it is distributed to, and for the information of, the whole of the relevant community. That construction, in my view, is consistent with the ordinary sense in which ‘the public’ is understood, and indeed reflects the first definition of ‘public’ in the Macquarie Dictionary, namely: ‘of, relating to, or affecting the people as a whole or the community, state or nation: public affairs’.
114Such a construction of the phrase ‘the public’, in subsection (4)(d), is supported by the use of the word ‘public’ in other provisions in the Act. Section 28(4)(e) provides that a ‘public document’ means any record or other document ‘open to inspection by the public’ that is kept by an Australian jurisdiction, an Australian statutory authority, an Australian court, or under legislation of an Australian jurisdiction. In that context, the phrase ‘the public’ clearly means the people or the community as a whole, as distinct from a closed confined class of the community. Section 29(1) of the Act provides a defence for the publication of a fair report of ‘any proceedings of public concern’. Section 29(4) defines the phrase ‘proceedings of public concern’. Subparagraphs (a) to (g) and (n) of s 29(4) all refer to proceedings ‘in public’ of institutions such as international conferences, courts or arbitral tribunals of any country, inquiries, proceedings of local government, or proceedings of a law reform body of any country. In that context, the phrase ‘proceedings in public’ clearly connotes proceedings which are open to the community or people as a whole, as distinct from being open only to an appreciable, but select, group of people.
115The three cases, to which Dr Collins referred, and which construe ‘public’ in different statutory contexts, are of only limited utility. The construction given to that word in each case must, necessarily, depend upon its particular statutory context. However, in any event, they provide little support to the construction contended for on behalf of the defendant.
116In Biga Nominees Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia, the plaintiff claimed an exemption from sales tax in respect of a forklift used by it in the operation of its railway terminal. It claimed that exemption on the basis that the forklift was used exclusively ‘in connection with the … operation or maintenance … of a railway providing, primarily and principally for use by the public, a service of transport of … goods’. Southwell J held that the forklift was not used ‘exclusively in connection with the operation of a railway’. His Honour further considered that, if the plaintiff was operating a railway, the railway was providing a service ‘primarily and principally for use by the public’ within the meaning of the specified exemption. His Honour reached that conclusion because the plaintiff had advertised the service in a manner which made it probable that those members of the public, interested in container railway transport, would be aware of the service, and the plaintiff had a large number of such customers. In other words, Southwell J reached the conclusion that the service operated by the plaintiff was for ‘use by the public’, because it was available to particular consumers in the public who wished to use its service.
117In Lee v Evans, the defendant was convicted by a magistrate of an offence under s 4(a)(i) of the Registration of Business Names Act 1928 to 1961 (SA), for making use of or reference to a business name in an invitation ‘to the public’ to deposit money with, or lend to, that entity. In that case, the appellant had approached two members of the public, who were previously unknown to him, and invited them to invest in his company. He then approached two other unknown persons, with a similar invitation. The High Court held that the appellant had not made an ‘invitation to the public’, because his invitation had only been addressed to specific individual persons in the public. In other words, while the persons approached by the appellant had been selected from the public, the invitation, made by the appellant to them, was not an invitation ‘to the public’, but, rather, was made to a specific person who formed a member of the public.
118In Rank Film Production & Ors v Collins S Dodds, the owners of copyright in certain films sought a declaration that the screening by an occupier of a motel of movies, by means of a video cassette recorder connected to television sets in various rooms, without a licence to do so, was an infringement of the copyright, on the basis that the motel proprietor had, contrary to s 86(b) of the Copyright Act 1968 (Cth) caused the film to be ‘seen in public’. Rath J granted the declaration. His Honour held that, although the films were screened in the privacy of the individual motel rooms, nonetheless they were ‘seen in public’.
119In Rank Film Productions, as Rath J noted, the rights which the plaintiffs were seeking to vindicate were their valuable proprietary rights. The question, in effect, was whether the defendant, by its conduct, had injured the ability of the plaintiff to exploit its proprietary rights for profit. It was in that context that the phrase ‘in public’ was construed by Rath J. The essential distinction, for the purposes of copyright law, was, on the one hand, between the display of the film in a domestic setting, and, on the other hand, the display of the film to persons who, as guests of the motel, saw it as members of a section of the public. Understood in that context, there is little in the decision in the Rank Film Production case which lends support to the construction contended for on behalf of the defendant.
120In the present case, the letter, written by Mr Holding, was specifically sent, on his instruction, to those persons who, at the time of the closure of FMIT on 15 August 2008, were customers of FMIT. The information was issued for their information, and for their information alone. That group of persons was a closed class, the identity of each member of which could be ascertained at the time at which Mr Holding caused the letter to be sent to them. In that way, if Mr Holding did ‘issue’ the letter, he did not do so ‘for the information of the public’, but, rather, for the information of each individual customer of FMIT at the time of its closure.[16]

[16]Reasons [2012] VSC 535 [109]-[120] (citations omitted).

The appellant commenced his submissions in this Court by asserting that the trial judge approached the application of the statutory defences (ss 28 and 30 of the DefamationAct) ‘through the wrong prism’. It was submitted by the appellant that the judge failed to take into account the object of, and the public policy considerations that underlie, the relevant statutory defences. Those defences, it was submitted, ‘were designed to affect a rebalancing of the law of defamation’ – being a rebalancing of the competing public interests of freedom of expression on the one hand, and the right to the protection of one’s reputation on the other hand.[17]
[17]Cf ss 13(b) and 15 of the Charter of Human Rights and Responsibilities (Section 1(1) of the Charter of Human Rights and Responsibilities provides: ‘This Act may be referred to as the Charter of Human Rights and Responsibilities and is so referred to in this Act’. The convention is to refer to an Act by its short title (as expressed in the Charter by s 1(1)) and thus there is no need to refer to the Charter as the ‘Charter of Human Rights and Responsibilities Act 2006 (Vic)’: see the Interpretation of Legislation Act (Vic), s 10(1)(e); Deming No 456 Pty Ltd v Brisbane United Development Corporation Pty Ltd (1983) 155 CLR 129, 162 (Wilson J).

In support of this submission, the appellant relied upon s 3(b) of the DefamationAct. Section 3(b) provides that ‘the objects of this Act are … to ensure that the law of defamation does not place unreasonable limits on freedom of expression and, in particular, on the publication and discussion of matters of public interest and importance’. While the appellant acknowledged that it was also an object of the Act ‘to provide effective and fair remedies for persons whose reputations are harmed by the publication of defamatory matter’,[18] it submitted that this object (dealing only with the provision of remedies) did not cut across the object set out in s 3(b).[19] That said, as the High Court has repeatedly stated, the task of statutory construction must begin and end with a consideration of the statutory text.[20]
[18]Defamation Act s 3(c).
[19]But see, the Second Reading Speech for the Defamation Bill in the Legislative Assembly, Victoria, Parliamentary Debates, Legislative Assembly, 7 September 2005, 635, (Rob Hulls, Attorney-General):
‘The Model Laws [upon which the Defamation Bill was based] reflect a sensible and pragmatic approach to the simplification of defamation law and aim to balance the policy objectives of protecting the reputation of individuals without unduly impacting on freedom of expression.’
[20]Thiess v Collector of Customs (2014) 88 ALJR 514, 518 [22] (‘Thiess’), albeit that the statutory text must be considered in its context; and that that context includes legislative history and extrinsic materials. See further, the reference at Thiess [2014] 88 ALJR 514, 518 [23] to Cabell v Markham (1945) 148 F 2d 737, 739, quoted in Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629, 644 [27]. See also s 35(a) of the Interpretation of Legislation Act 1984 (Vic) as to the preference for a construction that would promote the purpose or object underlying an Act.

While the appellant submitted that the judge looked at the statutory defences through the wrong prism, the appellant contended that ‘quite separate’ from this submission, the judge misconstrued ss 28 and 30. In summary, the appellant attacked the judge’s treatment of s 28 as follows. First, it was contended that the word ‘issued’ was read in a way ‘flatly’ inconsistent with authorities both in England and Australia; inconsistently with the ordinary meaning of the word in the law of defamation; and inconsistently with its ordinary dictionary meaning.[21] Secondly, the appellant submitted that ‘for information’ was interpreted in a way that muddied objective and subjective considerations – in a way which did not pay regard to the internal structure of s 28 of the DefamationAct. The submission was that because of the existence of s 28(3) of the DefamationAct, there was no room for the consideration of any subjective element in s 28(4)(d) (relevant subjective elements being dealt with (it was submitted) by s 28(3)). Thirdly, the appellant submitted that the words ‘the public’ were given too narrow an interpretation by the judge.
[21]As to which, the appellant relied upon the twenty first, twenty third and twenty fourth meanings of the verb ‘issue’ the Macquarie Dictionary (Macmillan Publishers Group, 4^th ed 2005), namely: ‘To print (a publication) for sale or distribution’; ‘To send out; discharge; emit’; and ‘To be sent out or put forth authoritatively or publicly as a writ, money, etc’. But see further, the ninth meaning given on page 137 of Volume VIII of the Oxford English Dictionary (Oxford University Press 2^nd ed, 1989), namely: ‘To give or send out authoritatively or officially; to send forth or deal out in a formal or public manner; to publish; to emit, put into circulation (coins, banknotes, stamps and the like)’.

The heart of the appellant’s complaint concerning the judge’s treatment of the word ‘issued’ in s 28(4)(d) concerns the statement by his Honour that:

Ordinarily, when a government, or an agency, issues a document, it is for the purposes of giving or pronouncing a mandatory direction, or for disseminating a particular warning.[22]

[22]Reasons [2012] VSC 535 [90].

The appellant then complains that the judge reasoned from this statement to an observation that a writ may be issued and that directions, edicts and proclamations may, equally, be issued. His Honour then said that what was common to each of these usages of ‘issued’, in the context of a government document, was to be found in the official nature of the document, and in the manner in which the document itself was made public.[23] The appellant submits that this approach gives too narrow a construction to the word ‘issued’. In support of its submissions on this point, the appellant relied upon the English decisions of Blackshaw v Lord,[24] Boston v W S Bagshaw & Sons,[25] Flood v Times Newspapers Ltd,[26] Adie v News Group Newspapers Ltd[27] and McGrath v Dawkins.[28]
[23]Ibid [91].
[24][1984] 1 QB 1, 23-4 (‘Blackshaw’).
[25][1966] 1 WLR 1126 (‘Boston’).
[26][2012] 2 AC 273, 309, [116] (‘Flood’).
[27][2002] EWHC 2295 (QB) (‘Adie’).
[28][2012] EWHC B3 (QB), [40] (‘McGrath’).

Blackshaw[29] concerned the defence of privilege provided for in s 7 of the Defamation Act 1952 (UK). Section 7 together with Part II of the schedule to that Act made privileged the publication in a newspaper of:

A copy or fair and accurate report or summary of any notice or other matter issued for the information of the public by or on behalf of any government department, officer of state, local authority or chief officer of police.

[29][1984] 1 QB 1.

In issue in Blackshaw[30] was whether what was said by a government department’s press officer in answer to a journalist’s question following a press conference was protected by the privilege provided for by s 7 of the 1952 UK Act. Stephenson LJ dealt with the issue in the following terms:

The judge approached the words of the paragraph ‘in not a strictly literal sense but in a fairly liberal way’, to include information painfully extracted by journalists, like a tooth, from an official of a government department acting in the course of his employment, as well as formal statements released to the press by the government department. That seems to me to pay too little attention to the word ‘issued’ and to the language’s indication that the matter issued must be of the same kind as a notice. It would unduly restrict the words to confine them to written hand-outs, including photographs, sketches or other pictorial representations … ; but it is right to confine them to official notices and the like such as, for example, the police message broadcast on television in Boston v W S Bagshaw & Sons [1966] 1 WLR 1126, the only reported case on the paragraph: ‘statements of a genuinely official nature formally issued for the information of the public’, in the words accepted by Jordan CJ considering a statutory provision in similar terms in Campbell v Associated Newspapers Ltd (1948) 48 SR(NSW) 301, 303. It may be right to include in the paragraph’s ambit the kind of answers to telephoned interrogatories which Mr Lord quite properly in the discharge of his duty to his newspaper, administered to Mr Smith. To exclude them in every case might unduly restrict the freedom of the press and I did not understand Mr Eady to submit to the contrary. But information which is put out on the initiative of a government department falls more easily within the paragraph than information pulled out of the mouth of an unwilling officer of the department … .[31]

[30]Ibid.

[31]Ibid 23-4.

From this decision, it was submitted that any approach requiring a document to be of an official nature so as to be capable of being issued and so as to have in fact been issued, in the way of a writ or the like, would be erroneous. As the English authorities to which we were taken show, in appropriate circumstances, a press release might constitute matter issued for the information of the public.[32]
[32]See for example, Flood [2012] 2 AC 273, 309 [116], a decision of the Supreme Court of the United Kingdom concerning the qualified privilege defence provided by the operation of s 15 and schedule 1 of the Defamation Act 1996 (UK) in relation to the publication of ‘a fair and accurate copy of or extract from a notice or other matter issued for the information of the public by or on behalf of … the government’.

The respondents submitted that the English cases relied upon by the appellant did not provide support for the construction it advanced. First, they submitted that McGrath[33] was of no assistance because it involved the construction of different statutory language that expressly distinguished between the concepts of publishing and issuing.[34] Next they submitted that the decision in Boston[35] turned on its own facts and did not engage with the construction of the corresponding English provision; Flood[36] also was not concerned with the construction of the English provision but rather with the evaluation of a Reynolds[37] defence. In respect of Blackshaw,[38] they submitted that in the corresponding provision, distinguished by its use of the phrase ‘notice or other matter’ as opposed to the word ‘document’, the verb ‘issue’ must be understood in the context of the issue of ‘official notices and the like’. They further contended that the submissions addressed by his Honour in Adie,[39] involving as it did an interlocutory application to strike out the corresponding statutory defence that was found by his Honour to be hopeless, offered no support for the appellant’s construction. In our view, the different statutory context in which these cases were decided mean that the English decisions can only be of limited assistance to the appellant.
[33][2012] EWHC B3 (QB).
[34]See McGrath [2012] EWHC B3 (QB), [40] and the definition of ‘a commercial publisher’ in s 1(2) of the Defamation Act 1996 (UK).
[35][1996] 1 WLR 1126.
[36][2012] 2 AC 273.
[37]Reynolds v Times Newspapers Ltd [2001] 2 AC 127 (‘Reynolds’).
[38][1984] 1 QB 1.
[39][2002] EWHC 2295 (QB).

The only Australian authority to which this Court was taken in relation to the meaning of the word ‘issued’ in s 28(4)(d) was the decision of Campbell,[40] to which the trial judge referred.[41] In that case, in construing the phrase ‘ … any notice or report issued for the information of the public … ‘, Jordan CJ stated:

[73]Mrs Prevedello was also a plaintiff at the trial below. She recovered a judgment of $85,000 plus interest plus indemnity costs against the appellant, but the appellant did not appeal that judgment.

[74]Ibid [182]-[186].

Thus one can see that the judge determined the issue of reasonableness, required by s 30(1)(c) in order for the s 30 defence to succeed, against the appellant without looking at subjective factors and without looking at conduct beyond the time at which the Minister’s Letter was uploaded to the appellant’s website.

The appellant attacked the judge’s treatment of the issue of reasonableness by asserting (as it did with the s 28 defence) that his Honour looked at the defence ‘through the wrong prism’. The appellant submitted that the judge did not take into account the ‘beneficial objects’ of the defence; and that his Honour treated the list of matters in s 30(3) as tests that the appellant had to pass in order to make out the s 30 defence. Further, it was submitted that the judge treated reasonableness ‘as a counsel of perfection’, and that his Honour did not give weight to matters that told in favour of reasonableness. Central to this submission was a submission that it was reasonable for a public utility to place a letter from the responsible Minister on its website.

At trial, the appellant submitted to the judge that ‘it was reasonable, assessed objectively, and having regard to the factors in s 30(3), for the [appellant] to upload the letter to the website in September 2008’. Shortly after this submission, the appellant’s counsel then addressed the various paragraphs set out in s 30(3). After addressing these paragraphs, the appellant’s counsel then noted that the Minister’s Letter had been uploaded to the ‘FMIT integration section of the website’. A submission was then made that the Minister’s Letter on the website was ‘akin to an historical archive’.

The judge did not accept the submission that the Minister’s Letter formed some part of a historical archive, or that its presence on the website was ‘akin to an historical archive’. With respect, failing to accept this submission did not involve any error on the judge’s part. When one examines the relevant page of the appellant’s website, as it was when it contained a hyperlink to the Minister’s Letter, one sees that the relevant part of the website purports to deal with (perhaps amongst other matters) the ‘latest news’ about the FMIT integration. The Minister’s letter was accessible by clicking on the second of three links under the heading ‘Latest news …’. This was no historical archive. Further, and in any event, the ‘historical archive’ submission was not entirely consistent with the evidence given of Mr Leamon as to the content of FMIT of the FMIT integration section of the website. This (the FMIT integration section of the website) was, as the respondents submitted a ‘dynamic area of the website’, containing such material as ‘current pricing’.

In argument before us, the appellant noted the similarities between the paragraphs in s 30(3) and the 10 matters, identified by Lord Nicholls of Birkenhead in Reynolds,[75] which might be taken into account when determining whether Reynolds qualified privilege was made out. The appellant then submitted that the matters listed by Lord Nicholls in Reynolds[76] were not ‘a series of hurdles to be negotiated by a publisher before [it can] successfully rely on qualified privilege’. In making this submission, the appellant relied upon the speech of Lord Bingham of Cornhill in Jameel (Mohammed) v Wall Street Journal Europe Sprl.[77] The appellant then submitted that the judge impermissibly used the paragraphs of s 30(3) of the DefamationAct as a series of tests or hurdles that the appellant had to overcome in order to succeed with the s 30 defence. There is nothing in this submission.
[75][2001] 2 AC 127, 205.
[76]Ibid.
[77][2007] 1 AC 359, 377, [33] (‘Jameel’). See also the speech of Lord Hoffman at 384, [56].

It may be accepted that s 30(3) finds its origins in the speech of Lord Nicholls in Reynolds.[78] It may also be accepted that the various paragraphs of s 30(3) are, consistently with Jameel[79], not individual tests by which the s 30 defence might be defeated. However, that is not what the judge did. The judge’s reasons are entirely responsive to the appellant’s submissions made at trial. A significant portion of the appellant’s submissions made at trial on the question of reasonableness under s 30 of the DefamationAct were, as one might have expected, devoted to the various paragraphs in s 30(3). In his reasons, the judge did no more than respond to the appellant’s submissions, analysing and determining the relevance of (if any) the matters identified in s 30(3).
[78][2001] 2 AC 127. Certainly, the equivalent of s 30(3) of the DefamationAct – being s 22(2A) of the 1974NSW Act – was first enacted in 2002 (some three years after Reynolds was decided).
[79][2007] 1 AC 359.

Additionally, the appellant’s submission that the judge failed to take into account the matters which, the appellant said, told in favour of reasonableness, is without merit. The judge engaged in a careful and detailed analysis. The fact that any particular submission (of which there were many) was not set out in the judgment does not suggest, in the circumstances of the lengthy analyses performed by his Honour, that it was not taken into account. The proper inference in this case is that, consistently with the reasons that were given by the judge, any submission not expressly referred to was necessarily rejected.[80] For completeness, we note the appellant asserted that the necessary fact that the appellant knew the matters in the Minister’s letter were wrong was not established. In our view, such conclusion was plainly open on the evidence and underpinned his Honour’s decision.
[80]Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598, 1610 [62], where Gleeson CJ, McHugh, and Gummow JJ said:
‘A judge’s reasons are not required to mention every fact or argument relied upon by a losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such fact and arguments would be evidence that he or she had not properly considered the losing party’s case.’

Having examined the relevant matters in s 30(3), the judge then gave the reasons that we have already set out for concluding that the conduct of the appellant in publishing the letter was not reasonable.[81] Further, as the judge said, in reaching that conclusion, the judge confined his consideration of matters to the time at which the Minister’s Letter was uploaded onto the internet and, in addition, he disregarded subjective factors. With respect, we see no error in the judge’s approach. Contrary to the appellant’s submission, there is nothing in the judge’s reasons to show that the judge treated reasonableness ‘as a counsel of perfection’. The judge was right, and for the reasons he gave, to conclude (confining himself to the time at which the letter was uploaded and disregarding subjective factors), that the appellant had not established that its conduct in uploading the letter was reasonable in the circumstances as required by s 30(1)(c).
[81]Reasons [2012] VSC 535 [182]-[186].

Further, and for the same reasons given in respect of the jury’s answer to question 7 (about which complaint is made in ground 1), the appellant’s complaints about the jury’s negative answers to questions 8, 9, 10, 11 and 12(b) and (c) (grounds 2 to 6) are without substance.[82] The jury was not bound to accept the evidence of Mr Leamon. The fact that the jury’s answer to question 12(a) indicates that they may have accepted his evidence in respect of the matter identified in that question is beside the point. The jury’s answer to question 12(a) does not cut across, or in any way invalidate, the judge’s conclusions (which were supported by detailed reasons) on the issue of reasonableness.
[82]See again, Hocking v Bell (1945) 71 CLR 430, 441-2; Hocking v Bell (1947) 75 CLR 125, 130-1; Calin v Greater Union Organisation Pty Ltd (1991) 173 CLR 33, 46-7.

The judge, confining his consideration to the time at which the Minister’s Letter was uploaded onto the internet, and disregarding any subjective factors, concluded that he was not satisfied that the conduct of the appellant in publishing the letter on its website was reasonable in the circumstances, then went on to deal with matters later in time[83] and the subjective factors contended for by the respondents.[84]
[83]Reasons [2012] VSC 535 [187]-[189].
[84]Ibid [190]-[192].

However, in view of the conclusions we have already expressed, it is not necessary for us to analyse these reasons. Grounds 2 to 6 and 10 must be rejected for the reasons we have given. That said, we should say for the sake of completeness that we see no error in his Honour’s reasoning or conclusions in relation to the circumstances as they developed after the uploading of the Minister’s Letter and the subjective matters referred to by the judge.[85] His Honour concluded that these matters reinforced the conclusion already reached. With respect, we agree.
[85]Ibid [187]-[192].

In the course of dealing with subjective matters, the judge said that his conclusion on reasonableness (reached, as we have said, without reliance upon any subjective matters) was reinforced by the jury’s answer to question 13. Question 13 was the malice question asked in respect of the appellant’s common law qualified privilege defences. In their answer to question 13 in each proceeding, the jury found that the respondents had established that the dominant motive of the appellant in publishing the Minister’s Letter was an improper purpose, which was ulterior to the duty of the appellant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge the FMIT with the appellant.

The appellant contends that it was not permissible to take into account the jury’s answer to a malice question relevant to common law qualified privilege, for the purposes of the issue of reasonableness in respect of the s 30 defence. There is no substance in this submission. While it may be accepted that it would have been wrong for the judge to have taken the answer and relied on it as establishing s 30(4) malice (if that had been pleaded), given that (as we have concluded) subjective matters can be relevant at the s 30(3) stage, there is nothing wrong in a conclusion that, publishing a letter for a purpose ulterior to the duty for which the publisher contended, tells against a conclusion in favour of the publisher that the publication was reasonable in the circumstances. However, and in any event, the jury’s answer to question 13[86] was not the basis for his Honour’s conclusions on the issue of reasonableness.
[86]Which was not challenged by the appellant.

Damages: grounds 11 to 14

The appellant makes four principal complaints about the judge’s assessment of the respondents’ damages. First, it is submitted that the judge erred in assessing damages by reference to a ‘grapevine’ effect (ground 11). Secondly, it is contended that the judge erred in holding that the appellant was not entitled to rely, by way of mitigation of damages, upon evidence of the respondents’ significant shortcomings in the discharge of their roles as members of the board of the FMIT (ground 12). Thirdly, it is contended that the judge erred in holding that the respondents were entitled to awards of aggravated damages (ground 13). Finally, it is contended that the damages awarded to each respondent ($70,000 in each case) were manifestly excessive (ground 14).

There is nothing in any of these complaints. Even if one concluded that there was no real grapevine, and that none of the respondents were entitled to aggravated damages, and that there had been some shortcomings by the respondents in the discharge of their roles as members of the FMIT board (which shortcomings, if any, do not appear to have risen to anything like the seriousness of the defamatory imputations published in respect of them), in our view, the awards of $70,000 for each respondent were well within range, if not relatively modest. These were, as the appellant’s counsel conceded at trial, particularly serious defamatory imputations. More particularly, as the judge put it:

The allegations made by Mr Holding in his letter, and the imputations found by the jury, were grave, and were calculated to cause substantial harm to the reputations and standing of each of the plaintiffs.[87]

[87]Ibid [174].

Each respondent gave evidence of significant hurt feelings. While no evidence was called that the reputations that any of the respondents possessed were actually damaged by the publications to the two recipients (Mr Lee and Mr Dichiera), that is not an entirely unusual event in defamation proceedings. People who think less of a plaintiff after a defamatory publication rarely come forward to give evidence on that plaintiff’s behalf. The real point is that each award of damages had to be sufficient for the purposes of vindication.[88] In our view, any smaller award to any of the plaintiffs would have called into question whether or not the object of vindication (nailing the lie[89]) had been met.
[88]But see also ss 34 and 36 of the DefamationAct.
[89]See Hewitt v Pacific Magazines Pty Ltd [2009] SASC 323, [11]; French v Herald and Weekly Times Pty Ltd (No 2) (2010) 27 VR 171, 194[87].

Appeals to this Court are brought against orders – not reasons. Looking at the awards of damages of $70,000 for each respondent, we see no error. In our view, the awards are well within range and we would not disturb them.

While what we have said is sufficient to dispose of grounds 11 to 14, for the sake of completeness, we will deal briefly with the appellant’s complaints concerning the grapevine, mitigation and aggravated damages.

It is trite to say that damages are at large in defamation proceedings. In fact, damages are more at large in defamation proceedings than perhaps any other cause of action. The expression ‘grapevine effect’ has been used as a metaphor to help explain the basis upon which general damages may be recovered in defamation proceedings.[90] As Lord Atkin put it in Ley v Hamilton:[91]

It is precisely because the ‘real’ damage cannot be ascertained and established that the damages are at large. It is impossible to track the scandal, to know what quarters the poison may reach: it is impossible to weigh at all closely the compensation which will recompense a man or a woman for the insult offered for the pain of a false accusation.

[90]Palmer Bruyn & Parker v Parsons (2001) 208 CLR 388, 416, [88].

[91](1935) 153 LT 384, 386.

In the present case, the judge set out in some detail the evidence which his Honour (correctly in our respectful view) found established that there was a grapevine effect. Specifically, his Honour said:

220Mr Lee, who is, and at the material time was, Chairman of the Sunraysia Irrigators Council, stated that he spoke about the letter, which he had seen on the internet, at at least one or two of the subsequent meetings of the Council. He said that ordinarily such meetings are attended by about 30 or 40 members. Mr Lee stated ‘… it was certainly a point of discussion at at least one or two of those meetings’.
221Mr Dichiera, who is a horticulturist and viticulturist, stated that, after he had seen the letter on the internet in July 2010, he commented on it to his wife and his children. He also said that he spoke about it to other growers, whenever he came across a ‘mate’. He gave an instance of a conversation, which he had had with a neighbour, with whom he had discussed the letter, in circumstances in which both of them expressed some surprise that there had not been a letter of amendment or retraction of it. He said that he could not put a number on the amount of growers, to whom he had spoken about the letter after he had seen it on the internet, but he said that it would crop up from time to time in response to newspaper articles concerning water issues. He said that sometimes the letter was raised in jest, provoking comments to the effect that there was a lost investment which was not really lost.
222The evidence, to which I have just referred, establishes that Mr Lee and Mr Dichiera spoke to other growers, and other members of the Mildura community, about the letter, after they had seen it on the internet. Further, the evidence also establishes that discussions of the type, which Mr Lee and Mr Dichiera had with other members of the community, were likely to have revived the memories of those persons of the contents of the Minister’s letter, which had earlier been published, by the Sunraysia Daily News, in 2008. As Mr Lee stated in cross-examination, the Minister’s letter had been the subject of ongoing discussion since 2008. The allegations contained in the letter, and the circumstances leading to the closure of FMIT, had been the subject of hot public debate in 2008, which had continued for some time.
223The evidence also satisfies me that, once Mr Lee and Mr Dichiera had discussions with other members of the community, concerning the letter published by the defendant on its website, it is likely that discussion of that matter would have spread to a reasonable extent in the Mildura community. In the context of the antecedent publicity given to the allegations made by Minister Holding about the plaintiffs, it is most probable that those discussions would, inter alia, have concerned the allegations in the letter published by the defendant on the internet. In cross-examination, Mr Marciano, somewhat graphically, described the process of dissemination, by a process of hearsay, of such matters in a rural community. Mr Marciano was asked whether, if he wanted to get information out concerning the FMIT to the whole of the Mildura public, he could do that by sending a letter just to FMIT irrigators. Mr Marciano responded:
‘I don’t think you even have to do that. If you had three or four people or ten people in Mildura it would be just as good as a letter, everybody would know, it’s word of mouth. We all know each other. In Melbourne you don’t know people in Melbourne because Melbourne is a big place. But here in Mildura wherever you go, what you do and how you do it everybody knows us, everybody.’

224Based on that evidence, I am satisfied, on the balance of probabilities, that the publication by the defendant of the letter to the four recipients,[92] in 2010, formed the wellspring of a ‘grapevine’ effect, whereby the allegations about the plaintiffs contained in the letter, published by the defendant, were discussed between, and made known to, a moderately substantial number of members of the Mildura and surrounding communities, in addition to the four recipients of the letter. [93]

[92]The reference to four recipients is a reference to the fact that at trial there was a fourth plaintiff. Two other people (in addition to Mr Lee and Mr Dichiera) gave evidence at trial that they also downloaded the Minister’s Letter in the relevant period, and that they read it and understood it to be of and concerning this fourth plaintiff.

[93]Reasons [2012] VSC 535 [220]-[224].

The appellant submitted that this evidence was not sufficient to establish a grapevine effect because there was no evidence that Mr Lee or Mr Dichiera passed on the content of the letter during the conversations to which the judge referred. The judge did not accept this submission. With respect, we agree with the judge. The evidence of the grapevine effect in this case (set out above) was sufficient for damages to be awarded on the bases upon which they were awarded by the judge. It was not necessary for either of the recipients (Mr Lee and Mr Dichiera) to give evidence that they actually stated, or endorsed, the defamatory words and/or the stings to the people with whom they discussed the Minister’s Letter in 2010. It is, as Lord Atkin said, precisely because one cannot know to what quarters the poison may reach, that evidence of the kind given in this case is regarded as sufficient to engage the grapevine notion for the purpose of assessing general damages.[94]
[94]See paragraph [110] above.

In ground 12, complaint is made that the trial judge erred by holding that the appellant was not entitled to rely, by way of mitigation of damages, upon evidence of the respondents’ ‘significant shortcomings’ in the discharge of their roles as members of the Board of the FMIT.

The judge dealt with the appellant’s mitigation argument as follows:

314As I have already stated, the evidence, elicited in the cross-examination of Messrs Belbin, Di Masi and Marciano, did not prove the truth of the critical allegation contained in the first two imputations, namely that the Board members had invested the monies, borrowed from the Victorian Government. Secondly, the cross-examination did not prove that, when the investment was made, the plaintiffs knew that Grange Securities was lending funds to the United States sub-prime mortgage market. Thus, in terms of the second imputation, the defendant has failed to prove, not only that the plaintiffs invested the borrowed monies, but that they invested it in the United States sub-prime mortgage market.
315Dr Collins submitted that the first two imputations related to the reputations of each of the three plaintiffs for compliance with legal obligations, and for financial responsibility. He submitted that the matters elicited in cross-examination, which I have already summarised, demonstrate very serious financial irresponsibility by Messrs Belbin, Di Masi and Marciano, which, he asserted, was a direct cause of the failure of FMIT. In essence, as I stated, Dr Collins submitted that those three plaintiffs do not deserve an unblemished reputation for compliance with legal obligations, for financial responsibility, or for good corporate governance.
316The submission, made by Dr Collins, substantially overstates the effect of the evidence elicited from the three plaintiffs in cross-examination. Certainly, the evidence establishes, and indeed it was accepted by Mr Di Masi and Mr Marciano, that there were shortcomings by the then members of the Board in the performance of their functions. The Board members should have known, but did not know, of the terms of the Order in Council dated 5 April 2007, which prescribed the investments, which might be made by FMIT in respect of funds borrowed by it from the government. Further, when the finance manager of FMIT reported having placed the funds, borrowed from TCV, with Grange Securities, the Board ought to have ascertained just how Grange Securities was investing, or intending to invest, those funds.
317However, those observations fall well short of sustaining the proposition relied on by Dr Collins. First, the undisputed evidence was that, at that time, Grange Securities was understood to be a reputable investment broker. It had sourced investments on behalf of a number of clients, including FMIT, for some years. There was no evidence which, in any way, ought to have put the members of the Board of FMIT on notice that Grange Securities was placing, or might place, the monies, borrowed from TCV, in high risk investments. Secondly, the placement of those investments with Grange Securities must be considered in the then context, and not, solely, with the wisdom of hindsight. The undisputed evidence (of Mr Belbin) was that he ascertained, later in 2007, that a large number of government business organisations had invested monies with Grange Securities, and that those investments had been approved. Based on that advice, Mr Belbin wrote to the Treasurer seeking approval to hold the Grange Securities investments.
318Thirdly, it is an overstatement to maintain that the shortcomings of the Board members, to which I have referred, directly caused the failure of the Trust. In his letter, Mr Holding gave, as a reason for his decision, the fact that the Board had invested the money, borrowed from TCV, with the United States sub-prime mortgage market. However, as I have already pointed out, that statement was factually incorrect; the Board did not make the investment. Further, there is no evidence that, if the Board, on learning of the investment, had made appropriate inquiries of the finance manager, FMIT would have recovered the investment. The only evidence, as to that issue, is that in July 2007 FMIT drew down $2,000,000 of the funds invested with Grange Securities, in order to pay for some of the irrigation works, which it was then undertaking. That evidence, without more, is an inadequate basis for an inference that if the Board had made appropriate inquiries of the finance manager, the balance of the monies, invested with Grange Securities, would have been recovered. The proposition made by Dr Collins, in that respect, is based on speculation, and not on evidence.
319As I stated, the evidence, which was elicited from Mr Belbin, Mr Di Masi and Mr Marciano in cross-examination, does demonstrate shortcomings by those plaintiffs, as members of the FMIT Board, in the discharge of their roles. Those shortcomings were not insignificant. However, even taken at their highest, the shortcomings by those three plaintiffs, in the performance of their functions as Board members, were substantially less serious than the unsubstantiated defamatory allegations published by the defendant of and concerning them, as reflected in the first two imputations found by the jury.
320It is one matter to allege that the plaintiffs failed in their duties as members of the Board, first, by not ascertaining the legal restrictions on investments which might be made by FMIT, and, secondly, by not inquiring of the finance manager of FMIT as to the investments which Grange Securities had made, or was intending to make, with monies borrowed by FMIT from the government, and that thus the plaintiffs failed to ascertain that the investments made by Grange Securities were contrary to the legal limits contained in the Order in Council and prescribed under the BIP Act. It is an entirely different, and far more serious, matter for the defendant to allege, as it did, that: each of the four plaintiffs broke the law by investing $2.2 million of Victorian Government money without Treasury approval; and that each of the four plaintiffs acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market. In that way, in my view, the matters elicited in cross-examination from the three plaintiffs do not have a material effect in mitigating the damages to be awarded to the plaintiffs.
321As I have already observed, in relation to the third imputation, the evidence adduced in cross-examination does establish that, in June 2008, the Board did approve adjustments to the provisions of the contracts of four senior officers, which entitled those officers to substantial termination payments, if FMIT were taken over during the next twelve months. Those changes, approved by the Board, were not consistent with the Victorian Government Sector Executive Remuneration Policy guidelines. The Board did not advise the Minister, or his Department, of the changes to the contracts.
322However, as I have also stated, those facts do not, in substantial measure, meet the fundamental sting of the third imputation, namely that the Board acted in a sinister and furtive manner which was in total disregard of its corporate responsibilities. Rather, as I have already noted, the uncontested evidence of the three plaintiffs was that the changes to the contracts were made for a good commercial purpose, namely, in order to ensure that FMIT retained important members of staff at a time when the loss of the services of any of them might have been critical. In that way, the matters established in cross-examination, fall well short of justifying the sting of the third imputation, particularly in the context of the letter of the Minister which was published by the defendant.
323For those reasons, I am not persuaded that the matters, elicited by the defendant in cross-examination, mitigate the damage occasioned to Messrs Belbin, Di Masi and Marciano as a result of the defamatory imputations published of them by the defendant.[95]

[95]Reasons [2012] VSC 535 [314]–[323].

While mitigation evidence does not necessarily have to meet the relevant sting (as to do so might involve a complete justification), it must be sufficiently relevant to the sting so as to result in, or disclose, a proper basis for some moderation of the damage and consequential damages. In this case, it is not correct to say that the judge failed to have regard to the evidence referred to by the appellant as mitigating damage and damages. In essence, the judge concluded that what had been established so far as any shortcomings might be concerned was a considerable distance from the gravity of the stings published by the appellant. We see no error in his Honour’s approach or conclusions in this regard – particularly when one pays proper attention to the relative modesty of the awards of damages to each respondent in this case.

We turn now to the issue of aggravated damages. Consistently with authority,[96] the judge did not break down his awards into components for pure compensatory damages and aggravated compensatory damages. Having regard to the state of the authorities, this was an appropriate course for the judge to take. That said, from the judge’s reasons, one might infer that the amounts awarded for aggravated damages were not likely very large.
[96]See Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, 72; Herald & Weekly Times Ltd v Popovic (2003) 9 VR 1, 77[385].

The appellant makes complaint that the judge identified six factors which formed a basis for an award of aggravated damages. However, the appellant submits that in respect of four of these matters it was open to each respondent to give evidence of increased hurt – yet not every respondent gave such evidence in respect of all of the relevant matters. It is then submitted that the awards of aggravated damages should have been different between the respondents, depending upon what evidence of hurt feelings was given by each respondent in respect of each relevant factor. In our view, these submissions would require a court to descend to an artificial level of precision in attempting to break down what are, as we have already said, only moderate awards of damages. There is no utility in taking such an approach in the present cases.

Further, in so far as the appellant’s submissions were predicated on a submission that aggravated damages could only be awarded in respect of increased hurt to feelings, we reject that submission. While aggravated damages in defamation cases are most often awarded in respect of an increased hurt to feelings, caused by some conduct of the defendant which was not bona fide, justifiable or proper,[97] they are not confined only to an increase in hurt feelings. In an appropriate case, they fall also to be awarded where relevantly unjustifiable conduct[98] causes an increased injury generally.[99]
[97]See Triggell v Pheeney (1951) 82 CLR 497.
[98]Or not bona fide or improper.
[99]See Broome v Cassell & Co [1972] AC 1027, 1085; Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, 71; Herald & Weekly Times Ltd (2003) 9 VR 1, [383]–[384].

What we have said is sufficient to dispose of the appellant’s grounds of appeal relating to the judge’s awards of damages. However, before leaving the issue of damages (or more particularly, aggravated damages) in this case, we wish to deal with one further matter. The judge was somewhat critical of the appellant’s counsel at trial – and in particular in relation to the way in which the appellant’s case was opened before the jury. There can be no doubt that counsel, in opening a case, should not make submissions to the jury. The opening of a case is a time to outline the evidence that a party proposes to call. We do not cavil with what the judge said about the undesirability of counsel making contentious arguments during the course of an opening.

However, as to the judge’s criticism concerning the appellant’s references to damages issues in the appellant’s opening, we would be less critical than was the judge. It is to be remembered that the Defamation Act contemplates a single trial (with the judge and jury having different functions) rather than a liability trial before the jury, followed by a damages trial before the judge.[100] In the circumstances, it seems inevitable to us (subject to case management by the trial judge) that a party will or may, in opening their case, make reference to matters that will not be relevant so far as the jury is concerned. This is an issue that needs to be managed individually on a case by case basis by the trial judge.
[100]See Greig v WIN Television NSW Pty Ltd [2009] NSWSC 876; Trkulja v Google (No 5) [2012] VSC 533, [10].

Conclusion

These appeals must be dismissed.

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[2014] VSCA 104

4 June 2014