Marshall v Megna
[2013] NSWCA 30
•25 February 2013
This decision has been amended. Please see the end of the decision for a list of the amendments.
Court of Appeal
New South Wales
Case Title: Marshall v Megna; Megna v Tory; Tory v Megna Medium Neutral Citation: [2013] NSWCA 30 Hearing Date(s): 31 May, 1 June 2012 Decision Date: 25 February 2013 Before: Allsop P at [1];
Beazley JA at [36];
Hoeben JA at [398]Decision: 1. Appeal dismissed in part;
2. Cross-appeal allowed;
3. Set aside the orders of the trial judge made on 25 June 2010;
4. Set aside the orders of the trial judge made 18 February 2011;
5. Judgment for the plaintiff/cross-appellant (Mr Megna) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $300,000 together with interest to be calculated;
6. Judgment for the plaintiff/cross-appellant (Mr Lloyd) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $200,000 together with interest to be calculated;
7. Order that the appellants/cross-respondents/defendants (Mr Marshall and Mr Tory) pay the following costs of the respondents/cross-appellants/plaintiffs:
(a) Of the proceedings in the court below including the costs of the s 7A jury trial;
(b) Of the appeal and the cross-appeal;
8. The parties are to recalculate the interest payable on the judgment sums on the same basis specified in the reasons of the trial judge of 18 February 2011: Megna v Marshall (No 2) [2011] NSWSC 52, at the rate of 2 per cent from 1 January 2001 up to and including the date of her Honour's judgment of 25 June 2010.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: DEFAMATION - defence of qualified privilege - common law - occasion of qualified privilege.
DEFAMATION - defence of qualified privilege - relevance - sufficient connection to privileged occasion - effect of excessive language.
DEFAMATION - defence of qualified privilege defeated by malice - statement made for purpose foreign to the privilege - basis for inferring an improper motive.
DEFAMATION - defence of qualified privilege - response to attack.
DEFAMATION - defence of qualified privilege - comment - recognisable as comment not fact - proper material for comment.
DAMAGES - relationship between harm and quantum - nature of assessment by trial judge - basis for appellate intervention.
LIMITATION OF ACTIONS - tort - defamation - contemporaneity of distribution.Legislation Cited: Civil Procedure Act 2005
Defamation Act 1974
Evidence Act 1995
Judiciary Act 1903 (Cth)
Limitation Act 1969
Uniform Civil Procedure Rules 2005Cases Cited: Adam v Ward [1917] AC 309
Aktas v Westpac Banking Corporation Limited [2010] HCA 25; 241 CLR 79
Andreyevich v Kosovich (1947) 47 SR (NSW) 357
APLA Limited v Legal Services Commissioner (NSW) [2005] HCA 44; 224 CLR 322
Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354
Australian Capital Television Pty Limited v The Commonwealth [1992] HCA 45; 177 CLR 106
Baird v Wallace-James (1916) 85 LJPC 193 at 195
Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366
Bass v TCN Channel 9 Pty Ltd [2003] NSWCA 118
Bellino v Australian Broadcasting Corporation [1996] HCA 47; 185 CLR 183
Bennette v Cohen [2009] NSWCA 60
Braddock v Bevins [1948] 1 KB 580
Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44
Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; 232 CLR 245
Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232
Clark v Molyneux (1877) 3 QBD 237
Coleman v Power [2004] HCA 39; 220 CLR 1
Cush v Dillon [2011] HCA 30; 243 CLR 298
Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575
Fraser v Holmes [2009] NSWCA 36
Goldsbrough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524
Griffith v Australian Broadcasting Commission [2010] NSWCA 257
Guise v Kouvelis [1947] HCA 13; 74 CLR 102
Harbour Radio Pty Ltd v Trad [2012] HCA 44; 86 ALJR 1256
Hawke v Tamworth Newspaper Co Ltd [1983] 1 NSWLR 699
Horrocks v Lowe [1975] AC 135
Howe v Lees [1910] HCA 67; 11 CLR 361
Huntley v Ward (1859) 6 CB (NS) 514
Justin v Associated Newspapers Ltd [1967] 1 NSWR 61
Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520
Lloyd-Jones v Allen [2012] NSWCA 230
Loveday v Sun Newspapers Ltd [1938] HCA 28; 59 CLR 503
Moit v Bristow [2005] NSWCA 322
Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749
Motyka v Gojan [2007] NSWSC 31
Mowlds v Fergusson (1939) 40 SR (NSW) 311
Nationwide News Pty Limited v Wills [1992] HCA 46; 177 CLR 1
Nevill v Fine Arts and General Insurance Co [1895] 2 QB 156
Nowlan v Marson Transport [2001] NSWCA 346; 53 NSWLR 116
Papaconstuntinos v Holmes à Court [2012] HCA 53; 293 ALR 215
Roberts v Bass [2002] HCA 57; 212 CLR 1
Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327
Skalkos v Assaf [2002] NSWCA 14
Spiller v Joseph [2010] UKSC 53; [2010] 3 WLR 1791
Stephens v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211
The Korean Times Pty Ltd & Anor v Un Dok Pak [2011] NSWCA 365
Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; 182 CLR 104
Toogood v Spyring (1834) 1 Cr M & R 181
Trad v Harbour Radio Pty Ltd [2011] NSWCA 61
White v Overland [2001] FCA 1333
Wotton v Queensland [2012] HCA 2; 285 ALR 1Texts Cited: Gatley on Libel and Slander, 11th ed (2008)
The Province and Function of Law (Harvard University Press, 1950)Category: Principal judgment Parties: David John Marshall (First Appellant/Cross-Respondent)
Richard Martin Tory (Second Appellant/ Second Cross-Respondent)
Michael Megna (First Respondent/Second Cross-Appellant)
Russell James Lloyd (Second Respondent/Second Cross-Appellant)Representation - Counsel: Counsel:
In person (First Appellant/Cross-Respondent)
A T S Dawson (Second Appellant/ Second Cross-Respondent)
T Molomby SC; R Rasmussen (Respondents)- Solicitors: Solicitors:
Bricknell Legal (Second Appellant/Second Cross-Respondent)
Etheringtons (Respondents)File Number(s): 2004/181254; 2012/105217 Decision Under Appeal - Court / Tribunal: Supreme Court - Before: Simpson J - Date of Decision: 25 June 2010 - Citation: Megna v Marshall [2010] NSWSC 686 - Court File Number(s): SC 2004/181254 Publication Restriction: No
HEADNOTE
[This headnote is not to be read as part of the judgment]
The appellants, Mr Marshall and Mr Tory, were involved in the publication and distribution of a circular under the auspices of a non-existent organisation, the Drummoyne Council Ratepayers Association. Between 1998 and 2003, approximately 28 such circulars were distributed in the Drummoyne municipality.
The respondents, Mr Megna and Mr Lloyd, brought defamation proceedings against the appellants, alleging that the publications contained defamatory imputations of them. A jury found that the circulars contained 54 defamatory imputations of Mr Megna and 35 of Mr Lloyd. The trial judge entered verdicts in favour of each of the respondents for some but not all imputations contained in the circulars.
The appellants appealed against her Honour's rejection of their defence of qualified privilege. The respondents cross-appealed against that part of her Honour's decision upholding the defence of qualified privilege.
On appeal to this Court, eight issues arose for determination:
Whether the imputations on the appeal were published on an occasion of qualified privilege?
(2) If so, whether the imputations on the appeal were relevant to the occasion of qualified privilege?
(3) Whether her Honour erred in finding that the imputations on the cross-appeal were published on an occasion of qualified privilege?
(4) Whether the appellants were motivated by malice?
(5) Whether the defences of qualified privilege and fair comment were made out in respect of the imputations alleged in the cross-claim?
(6) Whether her Honour erred in holding that the claim based on the first circular was statute-barred?
(7) Whether the damages awarded were excessive?
(8) Whether her Honour erred in ordering that the appellants pay the whole of the respondents' costs?
In the proceedings before this Court, s 78B Notices were issued to the Attorneys General of the States and Territories pursuant to the Judiciary Act 1903 (Cth) because of the appellants submission on the scope of qualified privilege. None of the Attorneys General sought to intervene.
The Court dismissed the appeal and allowed the cross-appeal.
Held per Beazley JA, Allsop P and Hoeben JA agreeing:
In respect of (1):
None of the imputations were published on an occasion of qualified privilege: [133], [134].
The trial judge erred in finding that 'public interest' in a topic is sufficient to found an occasion of qualified privilege: [133]. There is no duty for any person to convey their personal political views nor is there any reciprocal interest in persons receiving such unsolicited comments: [133].
Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520; Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749.The requirement of reciprocity means that only in exceptional cases will the publication of defamatory matter to the general public attract the privilege: [37].
Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520.The principle stated in the 'election cases' did not apply as there was no pending election: [109].
There is no independent third category of qualified privilege attaching to political comment, that does not fall within the 'election cases', and in respect of which there is no requirement of reasonableness: [120].
Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520; Roberts v Bass [2002] HCA 57; 212 CLR 1; The Korean Times Pty Ltd & Anor v Un Dok Pak [2011] NSWCA 365.In respect of (2) and (3):
For there to be an occasion of qualified privilege which protects a person from liability for defamatory publications, there must be a sufficient connection to the privileged occasion to attract the defence: [147]. Anything "not relevant and pertinent" to the discharge of the duty or the safeguarding of the interest, which creates the privilege will not be protected: [153].
Cited: Adam v Ward [1917] AC 309; Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366.Inaccurate statements or excessive or extravagant language do not of themselves prevent there being a sufficient connection to the privileged occasion: [148], [156].
Cited: Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366; Cush v Dillon [2011] HCA 30; 243 CLR 298, Adam v Ward [1917] AC 309In determining whether a sufficient connection exists, the text containing the defamatory imputations must be read in the context of the item in which they arose: [176].
In respect of (4)
The matters complained of were actuated by an improper motive: [297]. The factors relevant to this conclusion included the personal interest in the dissemination of the circulars, the language and tone of the matters demonstrated that the authors 'harboured ill will, bias and prejudice', the anonymity of the authorship, the deception involved in its publication under the auspices of a non-existent organisation and the repetitive and crushing nature of the campaign against the respondents: [288]-[289].
In respect of (5)
The defence of qualified privilege was made out by the first respondent as the matter complained of was in response to an attack: [305]. An occasion existed to repel the appellants' circulars, which characterised the respondent as dishonest, self-interested, corrupt and incompetent: [314]. The respondent's publication was in reply to this occasion because it criticised the first appellant's conduct as a Councillor: [314].
The defence of comment was made out because two conditions were satisfied: [325]-[326]. First, the defamatory matter was "recognisable as comment and not as a statement of fact" by the reader of the publication: [315]. For example, the defamatory matter must be seen as a "deduction, inference, conclusion, criticism, remark, observation, etc": [314]. Second, the matter was proper material for comment because it related to a matter of public interest: [306]. Although the trial judge gave limited attention to this defence, her conclusion that the defence was made out is upheld: [317], [323].
Cited: Defamation Act 1974, s 30-32; Lloyd-Jones v Allen [2012] NSWCA 230; Clarke v Norton [1910] VLR 494.In respect of (6)
An award of damages for defamation involves an evaluative/ discretionary assessment of the harm caused to reputation and the hurt and distress of the defamation: [336], [338].
Cited: Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232; Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327.The trial judge did not err in considering each circular separately and making an award of damages in respect of each, regardless of the number of imputations conveyed by the particular matter complained of: [327].
Cited: Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232.Appellate intervention is only warranted when the "amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case": [332]. The trial judge's determination was outside an appropriate discretionary range: [339].
Cited: Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44.Damages fall to be reassessed in this case because of the Court's conclusion on qualified privilege and malice: [334].
In respect of (7)
The relevant limitation period for a defamation claim is six years: [343].
Cited: Limitation Act 1969, s 14.Distribution and publication are not, or at least are not usually contemporaneous: [329], [330]. Publication only occurs when the matter is read and comprehended by someone: [329].
Cited: Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575.The trial judge did not err in finding that the first circular subject of the proceedings was statute barred because there was no evidence from which an inference could be drawn that persons read the circular on or after 8 April 1998: [330].
In respect of (8)
This ground of appeal became redundant due to the nature of the disposition of this appeal. The ordinary rule that costs follow the event should apply: [349].
JUDGMENT
INDEX ALLSOP P: Additional and concurring reasons [1] BEAZLEY JA: Introduction [36] The appeal proceedings [36] Procedural issues
Further amended notice of appeal
[45]
[45]
Brief background of facts and history of proceedings [62] Issues on the appeal and cross-appeal [71] Qualified privilege [75] Principles governing common law qualified privilege [75] Trial judge's reasons [98] The respondents' argument [106] The appellants' argument [139] Is the principle stated in the 'election cases' confined to the election period? [145] Is there a privilege for political comment without the requirement of reasonableness? [156] Consideration [168] Separate position of Mr Lloyd [176] Conclusion on qualified privilege [178] Challenge on the appeal to trial judge's rejection of qualified privilege and relevance [180] Occasion of qualified privilege [185] Relevance [192] Appellants' submissions [206] Resolution of trial judge's approach to relevance in respect of the imputations subject of this appeal [210] Malice [279] General principles [279] Trial judge's determination on the question of malice [303] Respondents' submissions in respect of malice [313] Appellants' submissions on malice [321] Consideration [325] Appeal from dismissal of Mr Marshall's cross-claim [343] Defence of qualified privilege: response to an attack [347] Defence of comment [351] Principles relating to the defence of comment [355] Mr Marshall's submissions [365] Mr Megna's submissions [369] Consideration [370] The limitation defence [372] Damages [376] Legal principles [377] Trial judge's reasons [378] Appellants' submissions [379] Respondents' submissions [380] Consideration [381] Costs [394] Orders [397] HOEBEN JA: concurring reasons [398]
ALLSOP P: I have had the advantage of reading the reasons of Beazley JA to be delivered. I agree with the orders proposed by her Honour and subject to what follows with her reasons. I agree with her Honour's view that none of the communications was made on an occasion of qualified privilege. Whilst I agree with her Honour's reasons in this regard, I would prefer to express aspects of the reasoning in my own words.
There being no occasion of qualified privilege, it is unnecessary to express any views as to the individual communications and imputations and whether they were relevant to or sufficiently connected with the occasion, assuming the correctness of the primary judge's views on qualified privilege. Nevertheless, if it be necessary to engage in this task, generally, I am content to agree with Beazley JA's approach and conclusions in this respect.
Qualified Privilege
Reciprocity of duty and interest is the hallmark of the common law defence of qualified privilege; it is essential: Cush v Dillon [2011] HCA 30; 243 CLR 298 at 305 [11]; Bashford v Information Australia (Newsletters) Pty Limited [2004] HCA 5; 218 CLR 366 at 373 [9] and 416-417 [136]-[137]; Adam v Ward [1917] AC 309 at 334; Papaconstuntinos v Holmes à Court [2012] HCA 53; 293 ALR 215 at [8] and cases at footnote 5; Roberts v Bass [2002] HCA 57; 212 CLR 1 at 26 [62].
The informing legal policy is the protection of freedom of communication. The recognition of its importance means that in some circumstances freedom of communication is more important than an individual's right to the protection of his or her reputation: Cush v Dillon at 305 [12]; Aktas v Westpac Banking Corporation [2010] HCA 25; 241 CLR 79 at 89 [22]; Justin v Associated Newspapers Ltd [1967] 1 NSWR 61 at 75.
The concept of reciprocity of interest or duty and the cognate notions involved such as the common convenience and welfare of society, public or private duty whether legal or moral, and the relevant community of interest of the parties are general and stated at a high level of abstraction: Bashford at 373 [10]. Their application to a particular given conclusion requires close scrutiny of the facts of the case, the situation of the parties and the relationships and circumstances leading up to and surrounding the publication: Guise v Kouvelis [1947] HCA 13; 74 CLR 102 at 116-117; Bashford at 373 [10].
The individualisation of the broad and general concepts and principles to a particular conclusion through close scrutiny of the facts is effected by the application of the informing notions and the legal policy of the privilege to those facts: Guise v Kouvelis at 116-117. The process of reduction from the general principles to the particular question of the existence of an occasion of privilege is an evaluative one directed at assessing whether a social or moral right or duty existed: Baird v Wallace-James (1916) 85 LJPC 193 at 198; Guise v Kouvelis at 117. The correct answer is not dictated by a bright line rule enabling logical deduction or application. It is reached by ascertainment of a category of circumstance, being the existence of a sufficient community of interest to justify the recognition of an occasion of privilege, that has an indeterminate reference: Aktas at 89 [22], J Stone, The Province and Function of Law (Harvard University Press, 1950) at 185-186. The process was described by Jordan CJ in Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363 as the ascertainment, through the evidence, that "the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community ... that it should be made with impunity, notwithstanding that it was defamatory of a third party." The word "interest" is used in the broad popular sense, referring not to a matter of gossip or curiosity, but to a matter of substance beyond mere news value. The interest is to be definite, not vague or insubstantial, though it may be direct or indirect. It must be "of so tangible a nature that for the common convenience and welfare of society it is expedient to protect it": Howe v Lees [1910] HCA 67; 11 CLR 361 at 377 and 398; Andreyevich at 363-364.
Political subject matter provides fertile ground for the interplay of these general considerations apposite to the privilege. The informing legal policy of freedom of communication is vital to the health and well-being of democratic civil society. The common convenience and welfare of our society and the health of its political life depend ultimately on freedom of choice, which in turn depends upon the free availability and exchange, of information and ideas relevant to political and social choice. At one level of abstraction, all persons entitled to vote and indeed those who are not yet but will be so entitled, have a common community interest in the exchange of information and opinions on society, politics, government and politicians. Without more, however, it would be a surprising conclusion (without a broadly framed protection for any communication about politics) that an occasion of qualified privilege arose in respect of the dissemination of information or opinions relevant to politics from any person in Australia to any number of other persons in Australia. Such would be to posit shared public political interest as the foundation of qualified privilege however large or anonymous the group to whom the dissemination took place. More would need to be known about the circumstances, though it is to be noted that, as shown by the discussion in the judgment of McHugh J in Stephens v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211 at 261-264, qualified privilege may attach to publications to the world at large.
The common law has recognised the importance of the political process in the ambit of qualified privilege in the so-called election cases to which I will come in due course.
It was the perceived Constitutional importance of political discourse that saw the development of a Constitutional principle constraining the authority of Parliaments and the Executive in the exercise of their respective powers and the moulding of the law of defamation by reference to Constitutional imperatives in such cases as Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520.
The principles enunciated in the judgment of the Court in Lange (later modified, irrelevantly for present purposes, in Coleman v Power [2004] HCA 39; 220 CLR 1, and, as to which, see also later cases such as APLA Limited v Legal Services Commissioner (NSW) [2005] HCA 44; 224 CLR 322; and Wotton v Queensland [2012] HCA 2; 285 ALR 1) developed from a series of cases in which the underlying Constitutional principles, their elements and effects, including upon the common law of defamation, were variously expressed: see Australian Capital Television Pty Limited v The Commonwealth [1992] HCA 45; 177 CLR 106; Nationwide News Pty Limited v Wills [1992] HCA 46; 177 CLR 1; Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; 182 CLR 104; and Stephens.
In Stephens, McHugh J, if I may be permitted respectfully to say, after a discussion of qualified privilege of great clarity and assistance at 260-264, propounded a development of the common law of qualified privilege based on the appropriateness of recognising the freedom of discussion of the exercise of public functions and powers vested in public officials. These were not expressions of view of the existing state of the common law, but were an expression of his Honour's view as to the appropriate adaption of the common law of qualified privilege to changes in the conditions in Australian society. The primary judge set these passages out at [141] and [142] of her reasons. McHugh J said at 264-265:
"In the last decade of the twentieth century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys. How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community. Information concerning the exercise of those functions and powers is of vital concern to the community. So is the performance of the public representatives and officials who are invested with them. It follows in my opinion that the general public has a legitimate interest in receiving information concerning matters relevant to the exercise of public functions and powers vested in public representatives and officials. Moreover, a narrow view should not be taken of the matters about which the general public has an interest in receiving information. With the increasing integration of the social, economic and political life of Australia, it is difficult to contend that the exercise or failure to exercise public functions or powers at any particular level of government or administration, or in any part of the country, is not of relevant interest to the public of Australia generally. If this legitimate interest of the public is to be properly served, it must also follow that on occasions persons with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties will have a corresponding duty or interest to communicate information concerning such functions, powers and performances to members of the general public. In Jenoure v Delmege [1891] AC 73 at 77, Lord Macnaghten said that '[t]o protect those who are not able to protect themselves is a duty which everyone owes to society'.
Accordingly, it is now appropriate for the common law to declare that it is for 'the common convenience and welfare' of Australian society that the existing categories of qualified privilege be extended to protect communications made to the general public by persons with special knowledge concerning the exercise of public functions or powers or the performance of their duties by public representatives or officials invested with those functions and powers. The scientist who discovers that lack of governmental action is threatening the environment, the 'whistleblower' who observes the bureaucratic or ministerial 'cover up', and the investigative journalist who finds that grants of public money have been distributed contrary to the public interest are examples of persons who have special knowledge of matters affecting the exercise of public functions or powers or the performance of duties by public representatives or officials. If such persons, acting honestly, inform the general public of what they know about such matters, their publications will be made on an occasion of qualified privilege. The defence of qualified privilege will be available even if the information is subsequently proved to be incorrect. Thus, the occasion will still be privileged even if the 'whistleblower' mistakenly but honestly publishes information which defames another person or the scientist or journalist honestly overlooks some fact which undermines the thesis of his or her claim. The publication of erroneous information may be evidence of malice in some cases. But by itself an error in the published information will not destroy the occasion of privilege."
This way of putting the matter does not depend upon reasonableness of the communication. McHugh J propounded a broad category of qualified privilege based on the honest dissemination to the general public of special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties.
These views of McHugh J were a minority view. The majority (Mason CJ, Toohey and Gaudron JJ in a joint judgment, and Deane J in a separate judgment) expressed the matter differently.
One of the expressed tasks of the Court in Lange was to reconsider previous statements of principle in order to (see 556):
"... settle both constitutional doctrine and the contemporary common law of Australia governing the defence of qualified privilege in actions of libel and slander."
After a discussion of the Constitutional principles at 557-568, the Court turned to defamation at 568-575. The Court recognised at 569-570 that the law of defamation, as it stood, imposed an undue burden on the required freedom of communication because:
"... the law as so understood arguably provides no appropriate defence for a person who mistakenly but honestly publishes government or political matter to a large audience. In Lang v Willis (1934) 52 CLR 637, this Court held that election speeches made to large audiences of unidentified persons are not necessarily privileged even if the speeches deal with matters of general interest to the electors. In that respect, the common law as hitherto understood in Australia has simply reflected the English common law."
The Court then, at 570, recognised the need for reciprocity of interest or duty as the essential element to qualified privilege. It continued, however (at 570):
"Only in exceptional cases has the common law recognised an interest or duty to publish defamatory matter to the general public. However, the common law doctrine as expounded in Australia must now be seen as imposing an unreasonable restraint on that freedom of communication, especially communication concerning government and political matters, which "the common convenience and welfare of society" now requires. Equally, the system of government prescribed by the Constitution would be impaired if a wider freedom for members of the public to give and to receive information concerning government and political matters were not recognised. The "varying conditions of society" of which Cockburn CJ spoke in Wason v Walter (1868) LR 4 QB 73 at 93 now evoke a broadening of the common law rules of qualified privilege." (Citations omitted.)
Immediately following this passage, the Court set out part of what McHugh J had said in Stephens, being the first of the two paragraphs set out above. This was not done as a statement of operative principle, but as an explanation of why it had come about that the varying conditions of society required a broadening of the common law rules of qualified privilege. The Court then went on to say (at 571):
"However, the common law of defamation can and ought to be developed to take into account the varied conditions to which McHugh J referred. The common law rules of qualified privilege will then properly reflect the requirements of ss 7, 24, 64, 128 and related sections of the Constitution."
The Court then formulated, at 571-575, an extended common law rule for qualified privilege by recognising, conformably with the Constitution, the interest in each member of the Australian community in disseminating and receiving information, opinions and arguments concerning government and political matters in Australia. The expression of the matter at 571-572 was as follows:
"Accordingly, this Court should now declare that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. The duty to disseminate such information is simply the correlative of the interest in receiving it. The common convenience and welfare of Australian society are advanced by discussion - the giving and receiving of information - about government and political matters. The interest that each member of the Australian community has in such a discussion extends the categories of qualified privilege. Consequently, those categories now must be recognised as protecting a communication made to the public on a government or political matter. It may be that, in some respects, the common law defence as so extended goes beyond what is required for the common law of defamation to be compatible with the freedom of communication required by the Constitution. For example, discussion of matters concerning the United Nations or other countries may be protected by the extended defence of qualified privilege, even if those discussions cannot illuminate the choice for electors at federal elections or in amending the Constitution or cannot throw light on the administration of federal government.
Similarly, discussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable. Thus, the extended category of common law qualified privilege ensures conformity with the requirements of the Constitution. The real question is as to the conditions upon which this extended category of common law qualified privilege should depend.
At common law, once an occasion of qualified privilege is found to exist, the privilege traditionally protects a communication made on that occasion unless the plaintiff is actuated by malice in making the communication. But, apart from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients." (Citations omitted.)
The conditions of exercise of the privilege were then fashioned. The expression of those conditions was preceded by further discussion of the common law of qualified privilege at 572, including discussion of the protection of qualified privilege only when publication is to a limited number of recipients. The Court said at 572:
"If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth. Publication beyond what was reasonably sufficient for the occasion of qualified privilege is unprotected. Because privileged occasions are ordinarily occasions of limited publication - more often than not occasions of publication to a single person - the common law has seen honesty of purpose in the publisher as the appropriate protection for individual reputation. As long as the publisher honestly and without malice uses the occasion for the purpose for which it is given, that person escapes liability even though the publication is false and defamatory. But a test devised for situations where usually only one person receives the publication is unlikely to be appropriate when the publication is to tens of thousands, or more, of readers, listeners or viewers." (Citations omitted.)
The Court then stated that the criterion for application of the broader category of qualified privilege was to be reasonableness (573):
"... reasonableness of conduct seems the appropriate criterion to apply when the occasion of the publication of defamatory matter is said to be an occasion of qualified privilege solely by reason of the relevance of the matter published to the discussion of government or political matters. But reasonableness of conduct is imported as an element only when the extended category of qualified privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience." (Emphasis added.)
This was not a rule laid down only for mass media (however one defines such an innominate class), though there was a recognition of the need to protect communications of a political kind to a wide audience. It was a fashioned extension to the common law of qualified privilege based on a Constitutionally founded interest in all in the community to disseminate and receive information, opinions and argument concerning government and politics as long as the conduct is reasonable.
The extension of qualified privilege in Lange resulted in the existence of qualified privilege relating to political matters in two categories: first, the category concerning communications among or to electors in the course of an election, such as recognised in Braddock v Bevins [1948] 1 KB 580; and, secondly, the category in Lange.
In Roberts v Bass [2002] HCA 57; 212 CLR 1, this distinction was noted: see Gleeson CJ at 9-10 in particular. However, in the light of how the case had been presented the Court did not attempt to reconcile or harmonise the two categories by any reformulation of the law. Nor did the Court recognise a third category concerning non-mass media political communication based on either the views of McHugh J in Stephens or of the Court in Lange shorn of the condition of exercise of reasonableness.
The first category, the election cases, was referred to or discussed in Roberts v Bass: Gleeson CJ at 12-14 [11]-[14]; Gaudron, McHugh and Gummow JJ at 29 [72]-[73], Kirby J at 61 [167] and Hayne J at [222]-[223]. It is founded on the honest statement of what is believed to be the truth, unqualified or conditioned by reasonableness, but as Gleeson CJ said in Bass at [14] "in the course of an election contest." See also Gaudron, McHugh and Gummow JJ at [73] in the passages cited by Beazley JA. I agree with the expression of views of Beazley JA as to the substantive limits of the election cases.
There is no basis to conclude from either Lange or Roberts v Bass that the election cases have established a category of qualified privilege otherwise not previously recognised based on the public interest in the dissemination of information or opinions about governmental or political matters shorn of any condition of exercise of reasonableness. I also agree with the views of Beazley JA in this regard. I also refer to and agree with the analysis of Nicholas J in The Korean Times Pty Ltd v Un Dok Pak [2011] NSWCA 365 at [90]-[101] and in Lloyd-Jones v Allen [2012] NSWCA 230 at [49]-[62].
With the utmost respect to the primary judge, I cannot agree that any of these communications was made on occasions of qualified privilege. There was no election campaign under way, in any substantive sense. The election cases such as Braddock v Bevins do not avail the appellants. The Lange category and its condition of reasonableness was, understandably, eschewed by the appellants.
The essential underpinning of legal reasoning of the primary judge that led her Honour to conclude that there were occasions of qualified privilege is to be found at [141]-[146] of her reasons. In those paragraphs, the primary judge, in substance, applied the second paragraph from the extract from the judgment of McHugh J in Stephens. That led her Honour to the conclusion that it mattered not that the statements were not made in the course of an election since they concerned the exercise of functions and powers by public representatives. The interest of electors in having information about their representatives was continuous and so the community of interest existed.
That, with respect, is a significant departure from, or development of, Lange and Braddock v Bevins. It was made because of a perception that the statement of principle by McHugh J in Stephens as to the operative principle (as opposed to the articulation of why the common law should be developed) was approved by the High Court. It was not. To adopt this course is to fashion a category of qualified privilege based on the interest of all in the community in the manner expressed by the Court in Lange, without the condition of reasonableness. That development requires the rearticulation of Lange in the light of the election cases. That is a matter for the High Court. If I may say with respect to the views of Beazley JA in this regard, it may be that there are powerful considerations in favour of such a rearticulation and that suggest that McHugh J's views in Stephens have great force. That, however, is for the High Court.
Here anonymous pamphlets from a non-existent organisation were placed indiscriminately in the letterboxes of complete strangers, albeit in the local government area of Drummoyne. Thus, the recipients were strangers who lived or worked in Drummoyne. It can be accepted that many had the right (and duty) to vote in Council elections. There was no election called or in contemplation.
The error in the primary judge's conclusions as to the existence of occasions of qualified privilege can be seen at [181]-[185] of her Honour's reasons. There it was said that if the content of the circulars related to the affairs and administration of the Council then each occasion would have been of qualified privilege. The necessary reciprocity in that subject matter was between Mr Marshall and Mr Tory (as the anonymous distributors) and anyone else in the Council area to whom the material was disseminated. At [189] the primary judge said:
"For the purpose of the first question, I will proceed upon the basis (as mentioned earlier in this judgment) that Mr Marshall was a Councillor on the Council; that Mr Tory had a relevant interest in Council matters; and that the circulars were distributed to recipients who were ratepayers and residents of the Drummoyne municipality, and had a legitimate interest in receiving information (and opinion or comment) on the functioning of the Council and its Councillors including its Mayor."
This approach goes beyond the existing categories of qualified privilege (that is the election cases and Lange). This approach posits information about the functioning of local government as a sufficient basis for reciprocity between, on the one hand, unidentified persons and, on the other, complete strangers whose only connection with the subject matter is that they live or work in the local government area, accepting that many will be electors in the area. To conclude that such is an occasion of qualified privilege is to fashion a broad category of qualified privilege based on shared presumed political interest, without the conditioning of reasonableness articulated in Lange. If it were correct, it would apply Australia-wide to dissemination of political views and opinions to all Australians about national politics without any condition of exercise of reasonableness.
The primary judge expressed the view at [134] that Braddock v Bevins was not an authority limited to circumstances where there is an election. The words of the Court of Appeal were plainly in the context of an election. At 590, the Court referred to "a good deal of authority for the view that qualified privilege extends to communications by one elector to another in relation to a candidate at an impending election." The Court then said that it would be curious if the interest and duty between electors were to be seen as higher than between elector and candidate. The framework of analysis was expressly an impending election. The statement of principle at 592 (quoted by the primary judge at [76] of her reasons) was made in that express framework and should be understood as authority for that. This is how Gleeson CJ understood the matter in Roberts v Bass at 13 [14]. Gaudron, McHugh and Gummow JJ at 29 [72] said that the assumption made by the parties that Braddock v Bevins gave effect to the common law of Australia was correctly made. Gleeson CJ had earlier (at 9 [4]) expressed the terms of the assumption of the parties: the category of common law privilege recognised in Braddock v Bevins "[relates] to communications to thousands of electors in the course of an election".
In my view none of the communications was made on an occasion of qualified privilege.
A procedural question
As Beazley JA puts it at [155] the argument about the politically founded category of qualified privilege was "raised ... in an alarmingly non-specific way". Her Honour has accepted that it was raised. For my part, that is a charitable view. This Court has said on a number of occasions that judges should be presented with issues with clarity: see by way of example, Nowlan v Marson Transport [2001] NSWCA 346; 53 NSWLR 116 at [28] - [29] approving White v Overland [2001] FCA 1333 at [4]. The Parliament has also said so, in effect, in the Civil Procedure Act 2005 (NSW), ss 56-60. Parties and counsel have a basal obligation to be clear about what issues are being raised for disposition. If issues are raised obliquely or hesitatingly and are not grasped by a trial judge, a party cannot complain in this Court. Efficient disposition of issues in litigation depends upon the clear identification of issues.
Damages
I agree with the views of Beazley JA on damages. I would only add that I do not think that any award for Mr Megna could exceed the figure proposed by her Honour.
BEAZLEY JA:
Introduction
The appeal proceedings
This is an appeal from the decision of Simpson J in which her Honour entered verdicts in favour of each of the respondents, Mr Megna and Mr Lloyd, and awarded them damages for some but not all imputations contained in a series of circulars published by each of the appellants, Mr Marshall and Mr Tory. Her Honour awarded the first respondent, Mr Megna, damages in the sum of $395,000 and the second respondent, Mr Lloyd, damages in the sum of $220,000.
The appellants submitted that the circulars containing the imputations, on which the respondents succeeded, were each published on an occasion of qualified privilege contrary to the findings of her Honour and that her Honour further erred in finding that the communications were not relevant to the occasion. The appellants also appealed against the quantum of damages awarded and against her Honour's costs orders.
The respondents cross-appealed against her Honour's findings that other publications upon which they sued were published on an occasion of qualified privilege. The respondents also cross-appealed against her Honour's finding that the publications found to be published on an occasion of qualified privilege were not motivated by malice. The respondents also contended that the first matter complained of was not defeated by reason of the Limitation Act 1969, s 14.
The trial judge also dismissed a cross-claim, brought by Mr Marshall against Mr Megna, in which he alleged he had been defamed by two articles in a publication entitled Veritas published by Mr Megna. In his defence to the cross-claim, Mr Megna pleaded that the imputations were made on an occasion of qualified privilege and were also protected by the defence of comment pursuant to the Defamation Act 1974, ss 30-32. Her Honour found that each publication was made on an occasion of qualified privilege and that the second publication was protected by the defence of comment.
Mr Marshall has appealed against the dismissal of the cross-claim on the ground that her Honour either failed to consider or erred in her findings both on qualified privilege and comment.
It will be convenient at this point to identify the imputations subject of the appeal and the cross-appeal.
The imputations the subject of the appeal were: 6(a), 8(b), 8(c), 12(a), 12(b), 12(c), 12(d), 14(a), 14(b), 14(c), 14(d), 14(e), 18(a), 24(a), 24(c), 24(d), 24(e), 24(f), 26(a), 26(b), 26(c), 26(d), 26(f), 26(g), 28(b), 28(c), 28(d), 30(a), 32(e) and 32(f).
The imputations subject of the cross-appeal, being those in respect of which her Honour held were published on an occasion of qualified privilege were: 2(a), 2(b), 2(c), 2(d), 2(e), 4(a), 4(b), 4(c), 6(c), 6(d), 6(e), 8(a), 10(a), 10(b), 10(c), 10(d), 10(e), 10(f), 10(g), 16(a), 16(b), 18(b), 18(c), 18(d), 20(a), 20(b), 20(d), 22(a), 22(b), 22(c), 22(d), 22(e), 22(f), 22(g), 28(a), 28(e), 28(f), 28(g), 30(b), 30(c), 30(d). 30(e), 32(a), 32(b), 32(c), 32(d), 34(a), 34(b), 34(c), 34(d), 34(e), 34(f), 34(g) and 34(h).
Procedural issues
Further amended notice of appeal
At the commencement of the hearing of the appeal, Mr Marshall sought leave to further amend his amended notice of appeal by amending ground 4, adding a new ground 6 and amending ground 7 (which had been numbered 6 in the amended notice of appeal). The respondents objected to leave being granted in respect of grounds 4 and 6. They raised no objection to the amendment to the renumbered ground 7.
The Court refused leave in respect of the proposed amendments relating to grounds 4 and 6 at the time that the application was made, but reserved its reasons until the final judgment in the matter. The reasons below are the Court's reasons for its decision to refuse leave to amend those grounds.
The amendments sought to be made were as follows (the underlined portion of ground 4 being the proposed amendment to that ground). The new ground 6 is also underlined, so as to accord with the format of the proposed further amended cross-claim:
"4: The Court erred in failing to consider whether the imputations conveyed by the matter complained of in the first cross claim was conveyed as fact or comment. The Court should have held that the imputations were not conveyed as fact nor comment, and the first cross respondent knew that the subject matters were neither fact nor comment to either part of the first cross claim.
...
6. Conduct of respondents and their Legal Representatives when appearing before Justice Studdert 7A hearing and before Justice Simpson in the Trial in that in both instances evidence was tendered which was obtained by improper and illegal means and put to both Judges as if it had been legally and properly obtained and in doing so the barristers for both respondents lied continuously to each Judge when they were fully aware of the impropriety of the evidence being presented, and relied upon, by the respondents."
The proposed amendment to ground 4 was intended to be supported by an affidavit of Mr Marshall of 12 pages with nearly 190 pages of annexures. It appears that some at least of this material is new material that was not in evidence in either part of the proceedings at first instance.
The respondents objected to ground 4 on the basis it made no juridical sense. The proposed amendment pleaded that the imputations were neither fact nor comment. On that basis, there was "no terrain left". An imputation could be pleaded as either fact or comment. As the respondents pointed out, this proposed pleading, in effect, confused the issues of comment and qualified privilege.
Mr Marshall submitted that there was confusion in the submissions as to whether what was pleaded in the cross-claim was comment or fact. He contended, however, that it was in fact "fiction" and informed the Court that he had provided all the details of how Mr Megna had knowingly written "a whole load of lies".
The respondents' submission in respect of ground 4 is correct and, for that reason alone, leave should be refused to amend ground 4. The proposed introduction of new evidence is a further reason to reject this amendment.
The proposed new ground 6 was intended to be supported by an affidavit of Mr Marshall of 62 pages with another 330 pages of annexures.
The respondents submitted that the issue raised by the proposed new ground 6 had not been raised at trial so that it was contrary to both principal and justice for the matter to be raised on appeal for the first time: see Coulton v Holcombe [1986] HCA 33; 162 CLR 1. Further, Mr Marshall had not raised this issue in his appeal against the jury verdict in the s 7A trial: see Tory v Megna [2007] NSWCA 13, notwithstanding that part of the complaint raised in proposed new ground 6 relates to the conduct of the s 7A trial.
Mr Marshall responded that he had attempted "in broad detail ... to uncover the facts of what took place". He also said that "all of these facts were not available" to him at the time of the s 7A trial because of the "craft" with which counsel for the opposing parties had conducted that hearing.
Again, the respondents' submission must be accepted. Not only was the issue proposed to be raised in this new ground not raised in the trial below, it was totally unrelated to the issues on the appeal. For both reasons, this ground was rejected.
A complication arose in the course of the hearing of the appeal. The appellants contended that the extended defence of qualified privilege, articulated in Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520, applied to all publications on government and political matters but the requirement that the publisher's conduct be reasonable only applied to cases of publication by the mass media. The complication that this argument raised was twofold. First, there was a question as to whether the argument had been advanced at first instance. The second was whether the argument raised a constitutional issue.
Although these issues arose on the cross-appeal, it is convenient to deal with them at the outset because they throw up for consideration the basis upon which the trial judge determined that the defence of qualified privilege applied. It also gives rise to another complication. If the appellants do not succeed in defending their success on qualified privilege on the imputations subject of the cross-appeal, they ought not to succeed on their argument on qualified privilege on the appeal. The respondents did not file a notice of contention in respect of her Honour's findings of qualified privilege in relation to the imputations that are the subject of the appeal. However, given that the arguments of both the appellants and the respondents on the question of qualified privilege were overarching, it is appropriate to overlook that irregularity, being only one of many of which all parties were guilty in this matter.
During the course of the opening address to the trial judge, senior counsel for the respondents informed her Honour that the appellants, in an interlocutory hearing, had informed the Court that they relied upon the common law defence of qualified privilege that did not include any aspect of reasonableness. Senior counsel continued, "It is common law qualified privilege other than as contained in Lange". Senior counsel for the appellants responded to this as follows:
"That's basically right. My friend, I think, puts it necessarily in a summary way and, therefore, perhaps an overly simplistic way.
What is said by the High Court in Lange is still relevant to the question of the availability of common law qualified privilege as a defence, but not as extended in Lange so as to include a requirement of reasonableness. There's a case referred to in Roberts v Bass in the High Court called Braddock v Bevins, which is the common law qualified privilege defence - and which you Honour is no doubt familiar with. My friend is right to the extent that he says I'm not proposing to adduce any evidence of reasonableness because it forms some elements of the defence that is raised by paragraph 39."
The trial judge, at [21], understood from this exchange that the appellants' sole defence was that of qualified privilege at common law, including as articulated in Braddock v Bevins [1948] 1 KB 580, adopted by the High Court in Roberts v Bass [2002] HCA 57; 212 CLR 1 and applied by this Court in Bennette v Cohen [2009] NSWCA 60 and Fraser v Holmes [2009] NSWCA 36. Her Honour, at [2], added:
"A related defence, concerning the publication of defamatory material on political issues (see Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520) has not been invoked and expressly disclaimed. The substantial difference between what are, in effect, two strands of the same defence, is that the defence as explained in Lange requires proof, by the defendant, of reasonableness of conduct. Given that the Lange defence is not invoked, it is not necessary, in this case, for either defendant to establish that his conduct was reasonable."
The appellants submitted that they had argued a wider case than identified by the respondents in the extract above at [58], and as had been stated by her Honour at [21] of the primary judgment. The respondents accepted this may have been so, although the precise parameters of the argument before the trial judge remained obscure. The appellants nonetheless identified two arguments they said were properly before the Court. First, whether there was an occasion of qualified privilege that did not require reasonableness. Secondly, whether the principle laid down in the 'election cases' extends beyond the period in which an election is being conducted. I am satisfied that the second of these arguments was advanced in the Court below and it appears from [21] of the primary judgment, that some version of the first was also argued.
The appellants also submitted that if the cases relating to political comment in respect of elections was confined to the election period, the law required development so as to be compatible with the constitutional freedom of political communication recognised in Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; 182 CLR 104 and further articulated in Lange. This led to the Court requiring notices to be given to the Attorneys General of the States and Territories pursuant to the Judiciary Act 1903 (Cth), s 78B. None of the Attorneys General sought to intervene in the proceedings in this Court. The extent to which the Court needs to deal with the questions raised in the s 78B notices will be considered later in these reasons.
Brief background of facts and history of the proceedings
Mr Megna was the Mayor of Drummoyne Local Council (the Council). Mr Lloyd was the General Manager. Mr Marshall was a resident and a one-time councillor on the Council. Mr Tory was a resident.
From about 1998 onwards, a circular was distributed in the Drummoyne municipality, purportedly under the auspices of the Drummoyne Council Ratepayers Association. There was no such organisation. Over a period of five and a half years from 1998 to 2003, approximately 28 circulars were distributed in the Drummoyne municipality. The circulars dealt with matters relating to local government issues in the Drummoyne municipality. Mr Megna and Mr Lloyd brought proceedings against Mr Marshall and Mr Tory alleging that these publications contained defamatory imputations of them.
Although there was no evidence of the actual extent of the distribution of the circulars, the evidence disclosed that there were about 12,000 rateable properties in the Drummoyne municipality and about 30,000 residents. Subsequently, with the merger of Drummoyne Council with Concord Council to form the City of Canada Bay Council in 2000, an additional 10,000 rateable properties were added to the local government area, increasing the population by approximately 25,000 persons.
There was some evidence of publication outside the Drummoyne municipality, admitted over objection. However, the respondents confined their argument on the appeal to publication within the Drummoyne municipality, but submitted that the recipients of the circulars were not necessarily residents or ratepayers. This argument was directed to denying a reciprocity of duty and interest which was at the heart of their argument on qualified privilege. The evidence disclosed that 20 per cent of ratepayers in the Drummoyne municipality were businesses. Whilst there were no figures of the percentage of persons employed in businesses who were also residents, the evidence disclosed that approximately half the employees of the Council itself were not residents. The respondents submitted that it could be inferred that that figure would be replicated in other businesses in the area. The respondents submitted that residents and persons engaged in businesses in the Drummoyne municipality, including employees, who were not ratepayers, had no necessary interest in the affairs of the Council or the conduct of the Mayor and the General Manager in respect of Council affairs.
The appellants did not accept that the extent of the publication was to all ratepaying properties in the local government areas and contended that the evidence of publication was somewhat limited. They pointed to Mr Megna's evidence that he received from or was shown copies of the circular by his mother-in-law, who was a local resident, and from members of Council staff who lived within the municipality and that he was told about the circulars by residents in Concord. However, in evidence to which the appellants did not refer, Mr Megna also said that he had seen Mr Marshall distribute the letters in a number of streets in the municipality and that on those occasions he had seen Mr Marshall place a circular in each letterbox in the street. There was also evidence from Mr Lloyd, who did not live in the municipality, that he was shown copies of the circulars when employees of the Council brought them into work.
Mr Megna pleaded that he had been defamed in 17 circulars conveying 60 imputations. Mr Lloyd pleaded he had been defamed in 15 circulars conveying 35 imputations.
In a trial before a jury conducted pursuant to the Defamation Act, s 7A, the jury found that the matters complained of contained 54 defamatory imputations of Mr Megna and 35 of Mr Lloyd. The imputations defamatory of Mr Megna included that he was incompetent as Mayor, was a sneak and, as Mayor of the Drummoyne municipality, manipulated the Council's agenda to prevent residents being able to address the Council about the performance of the General Manager. The principal defamatory imputation of Mr Lloyd was that he was incompetent as a General Manager. As is apparent from the period over which the defamatory conduct occurred and the number of publications involved, the campaign was prolonged and, on the finding of the trial judge, particularly vitriolic.
The jury made no finding as to the authorship of the circulars. Rather, the relevant guilty publication found against both Mr Marshall and Mr Tory was that they distributed the circulars. There was some evidence before the jury that Mr Marshall also had some involvement in printing the circulars. However, her Honour observed, at [7], that it is not known what the jury made of that evidence.
Following the jury's verdict and in accordance with the procedure prescribed by the Defamation Act, defences were filed by Mr Marshall and Mr Tory in which they pleaded the defamatory publications were made on occasions of qualified privilege. Mr Marshall and Mr Tory pleaded a limitation defence in respect of the defamatory imputations contained in the first circular: see the Limitation Act, s 14. Mr Marshall also pleaded fair comment. In response to the qualified privilege defence, Mr Megna and Mr Lloyd denied that the publications were made on occasions of qualified privilege and pleaded that they were motivated by malice.
The trial judge rejected the qualified privilege defence in respect of the imputations identified at [43] above as the imputations on the appeal. Her Honour upheld the defence of qualified privilege in respect of the imputations identified at [44] above as the imputations on the cross-appeal. Her Honour also rejected that the appellants were motivated by malice. Her Honour held that the first matter complained of was statute-barred. The result of her Honour's determination was that Mr Megna was successful in respect of 26 imputations in 10 circulars and Mr Lloyd was successful in respect of 7 imputations in 5 circulars.
On Mr Marshall's cross-claim the trial judge upheld the defences of qualified privilege and fair comment.
Although the above sufficiently states the outcome of the hearing, it is useful at this point to set out the issues identified by the trial judge as arising for determination and her conclusion in respect of each issue. The issues were as follows:
(1) Whether the publications were made on an occasion of qualified privilege. Her Honour considered there were three strands to that inquiry: reciprocity of duty and interest, relevance to the occasion and malice: see at [50] and [175].
(2) The meaning of 'communication' for the purposes of the defence of qualified privilege. Her Honour held that a communication had to have content, that is, it had to convey information or state an opinion: see at [59] and [118].
(3) The relationship between the question of relevance to the privileged occasion and malice: see at [51]. Her Honour accepted, at [86], that the assessment of relevance to the occasion and questions of malice could share an evidentiary foundation.
(4) Whether an occasion of qualified privilege may be defeated by excessive language. Her Honour concluded that the tone of a publication did not disqualify the occasion as one of qualified privilege: see at [129].
(5) Whether the principle stated in the 'election cases' was confined to the period of an election campaign. Her Honour concluded that the 'election cases' were not so confined: see at [134]-[146].
(6) Whether the defence of qualified privilege was available where there was widespread distribution. Her Honour accepted that there was in fact widespread distribution in this case but that such distribution did not defeat the defence in the circumstances where those who lived and worked in the municipality had an interest in the affairs of the Council: see at [147]-[152].
(7) Whether the fact that the publications were volunteered denied the occasion of privilege. Her Honour held that it was not the law that there had to be a 'pressing need' for a volunteered statement for the defence of qualified privilege to be available: see at [159]-[162]. This view of the legal position in respect of volunteered statements has subsequently been held by the High Court to be correct: see Papaconstuntinos v Holmes à Court [2012] HCA 53; 293 ALR 215.
(8) Whether the defence of qualified privilege was available in a case where the authorship was anonymous. Her Honour rejected that the defence was unavailable in such circumstances: see at [167]-[171].
(9) Whether the abusive tone of the publications established malice. Her Honour held that the tone of the publications did not establish malice and that malice had not otherwise been made out: see at [598]-[602]; [611].
Issues on the appeal and cross-appeal
The following issues arose for determination on the appeal and the cross-appeal:
(1) Whether the imputations on the appeal were published on an occasion of qualified privilege;
(2) If so, whether the imputations on the appeal were relevant to the occasion of qualified privilege;
(3) Whether her Honour erred in finding that the imputations on the cross-appeal were published on an occasion of qualified privilege;
(4) Whether the appellants were motivated by malice;
(5) Whether the defences of qualified privilege and fair comment were made out in respect of the imputations alleged in the cross-claim;
(6) Whether her Honour erred in holding that the claim based on the first circular was statute-barred;
(7) Whether the damages awarded were excessive;
(8) Whether her Honour erred in ordering that the appellants pay the whole of the respondents' costs.
Qualified privilege
Principles governing common law qualified privilege
Before considering the principles that govern the defence of common law qualified privilege, a reference to the position taken by the appellants and respondents respectively is helpful so as to understand the basis upon which each sought to analyse the authorities. The appellants contended that her Honour had correctly recognised that there was no distinction, for the purposes of the defence of qualified privilege, between an 'election case' and a 'political discussion' case. Their ultimate argument was that there was a species of qualified privilege for political comment outside what was described as 'the election period' that was not qualified by the requirement of reasonableness. The respondents submitted that there was no such category and that her Honour had erred in finding that 'public interest' in a topic was sufficient to found an occasion of qualified privilege.
A person who publishes defamatory matter is protected from liability if the publication was made on an occasion of qualified privilege: see the Defamation Act, s 22 (which preserved the common law defence of qualified privilege). Legal discourse concerning the defence of qualified privilege usually commences with the following statement of Parke B in Toogood v Spyring (1834) 1 Cr M & R 181:
"If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits."
This statement, albeit well entrenched in the jurisprudence of the law of qualified privilege, is properly to be understood as a statement of the policy behind qualified privilege and not as a complete statement of the law on the subject: Papaconstuntinos v Holmes a Court at [28]-[29].
An observation to like effect is to be found in the reasons of the plurality in Cush v Dillon [2011] HCA 30; 243 CLR 298 at [12], where their Honours said:
"The defence of qualified privilege is based upon notions of public policy, that freedom of communication may in some circumstances assume more importance than an individual's right to the protection of his or her reputation. The question of whether the person making a defamatory statement was subject to some duty or was acting in the protection of some interest, in making the statement, is to be understood in this light."
In Aktas v Westpac Banking Corporation Limited [2010] HCA 25; 241 CLR 79, the plurality (French CJ, Gummow and Hayne JJ) noted, at [22], that:
"In Justin v Associated Newspapers Ltd, Walsh JA said that the 'broad principle' underlying qualified privilege is that occasions exist in which it is desirable as a matter of public policy that freedom of communication should be given priority over the right of the individual to protection against loss of reputation. It also has been said that the categories (if there be utility in a system of categories) of occasions of qualified privilege are not closed and cannot be rendered exact. Cases of reciprocity, or as Griffith CJ put it, 'community of interest', supply a recognised category, which in turn has an indeterminate reference. The limits of that range of reference in a given case are to be placed by regard to the 'broad principle' identified by Walsh JA and to the remarks of Dixon J in Guise v Kouvelis as follows:
'But the very width of the principles governing qualified privilege for defamation makes it more necessary, in deciding how they apply, to make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication.'" (citations omitted)
Kiefel J, after referring, at [89], to the "public interest in maintaining freedom of communications which are necessary to everyday life" and noting that the law regarded it as "preferable 'that individuals should occasionally suffer than that freedom of communication between persons in certain relations should be in any way impeded'", stated, at [95]-[96]:
"For the defence of qualified privilege to apply there must, in the circumstances surrounding the publication of the defamatory matter, be an 'occasion' for the communication in question, as the passage from Toogood v Spyring cited above requires. In addition, the communication must be necessary to that occasion ('fairly warranted') and made with honest purpose.
In determining whether there was an occasion for the making of the statement communicated, attention is principally directed to the interest the defendant had in making it. Earlier in his judgment Parke B referred to such an occasion arising where the statement is:
'fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned.'
In such cases, he explained, the occasion allows for the qualified defence." (citations omitted)
Reference should also be made to the recent High Court decision Harbour Radio Pty Ltd v Trad [2012] HCA 44; 86 ALJR 1256. The issue in that case was the nature of the reciprocity of interest where there has been a public reply to public criticism. Nonetheless, the observation of the plurality (Gummow, Hayne and Bell JJ), at [20], is relevant to the circumstances of the present case, which involved publication to a large number of people:
"... it is only in exceptional cases that the common law has recognised an interest or duty to publish defamatory matter to the general public": see Lange at 570.
Their Honours made the further comment, at [27], that whilst the use of vigorous language was a characteristic of public debate in Australia, "in the conduct of public affairs the law, in general, does not encourage persuasion by public vilification and by an abdication of reason".
In Lange, the Court observed, at 570, that the basis of the common law rule was that reciprocity of interest or duty was essential to a claim of qualified privilege at common law. For that reason it was only in exceptional cases that a publication of defamatory matter to the general public attracted the privilege. The Court explained why this was so, at 572:
"[A]part from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients. If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth."
It will be necessary to return to Lange later in these reasons.
The trial judge's decision in this case predated the High Court's decisions in Atkas, Cush v Dillon, Papaconstuntinos and Harbour Radio v Trad. It was not suggested that these decisions changed or modified the principles relating to qualified privilege at common law, which have been well worked out in the case law. For that reason, I consider it sufficient to refer only to a small number of cases where the principle has been discussed.
It is convenient to commence with Andreyevich v Kosovich (1947) 47 SR (NSW) 357 and Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366.
In Andreyevich v Kosovich, Jordan CJ stated, at 363:
"To succeed [in their defence of qualified privilege], it was necessary that [the defendants] should show by evidence that both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community of New South Wales, that it should be made with impunity, notwithstanding that it was defamatory of a third party."
This statement was directly adopted by McHugh J in Bashford, at [55], where his Honour stated:
"It is of the first importance to understand that references to concepts such as 'the common convenience and welfare of society' and similar phrases record a result and explain why the communication and the relevant duty or interest gave rise to an occasion of qualified privilege. Such concepts are not the determinants of whether the occasion is privileged. They must be distinguished from the question whether society would recognise a duty or interest in the publisher making, and the recipient receiving, the communication in question."
His Honour then quoted the passage from Andreyevich v Kosovich to which I have just referred and continued, at [55]:
"It is only when the defendant has a duty to publish or an interest in publishing the particular communication and the recipient has a corresponding duty or interest that the occasion is privileged. It is only when this reciprocity of duty and interest is present that the common law regards publication of the communication as being for the common convenience and welfare of society."
Although his Honour was in dissent and his statement relating to volunteered statements was rejected in Papaconstuntinos v Holmes à Court, the observations just quoted are accepted statements of general principle. See also Gummow J in Bashford at [140], who also adopted the above passage from the judgment of Jordan CJ in Andreyevich v Kosovich.
In Moit v Bristow [2005] NSWCA 322, McColl JA (Beazley JA and Campbell AJA (as his Honour then was) agreeing) stated, at [78]-[79]:
"In order to determine whether a publication was made on an occasion of qualified privilege, the court examines all the circumstances of the case. These include the nature of the defamatory communication, the status or position of the publisher, the number of recipients and the nature of any interest they had in receiving it, and the time, place and manner of, and reason for, the publication. After considering these matters, the court makes a judgment as to whether the publisher had a duty or interest that justified making the publication and whether the recipients, or some of them, had a duty to receive or interest in receiving it: Bashford per McHugh J at [54]; see also Gleeson CJ, Hayne and Heydon JJ at [10]; Gummow J at [139]; Callinan J at [235].
In order to establish a publication was made on an occasion of qualified privilege, the publisher must call evidence which establishes 'that both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community of New South Wales, that it should be made with impunity, notwithstanding that it was defamatory of a third party': Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363 per Jordan CJ; applied in Bashford by McHugh J at [55]; by Gummow J at [140]."
In Bennette v Cohen, at [25], Ipp JA set out a number of propositions that his Honour considered were to be derived from the authorities relating to qualified privilege, not including the extended form of privilege referred to in Lange:
"(a) The test for common law qualified privilege is usually expressed at a very high level of generality and abstraction;
(b) In practice, however, the close scrutiny required of all the circumstances of each case results in common law qualified privilege having a relatively limited or narrow practical application;
(c) The scrutiny required depends on the facts of each case and there is no closed set of criteria that must be applied or considered, and;
(d) Guidelines have been established that assist in the scrutiny that is required. These include:(i) As a matter of public policy, it must be in the general interest of the whole community that the type of material in question be published, notwithstanding that it is defamatory of a third party;
(ii) The occasion must not be used for some purpose or motive foreign to the interest that protects the making of the statement. Further, there must be a significant connection between the defamatory material and the privileged occasion;
(iii) The interest that gives rise to qualified privilege must be real and direct;
(iv) ...
(v) If a publication is made to a large audience, a claim of qualified privilege at common law will fail unless the members of the audience all have an interest in knowing the truth, and;
(vi) The interest should not give officious and interfering persons a wide licence to defame."Campbell JA, at [206], expressed agreement with these propositions. His Honour also commented upon the relationship between public interest and qualified privilege. Campbell JA, at [207], stated:
"It seems uncontroversial that the notion of the public interest operates as a means of limiting the sorts of reciprocal duty or interest that can give rise to qualified privilege. However one does not enquire whether the particular statement that was defamatory was made in circumstances such that the reciprocal interest of the maker and recipient of the statement was such that the making of that statement itself advanced the welfare of society and the public interest. Rather, the requirement of public interest, for the existence of qualified privilege operates at a higher level of generality, that the duty or interest of both maker and recipient is such that it is in the public interest that a person should be free to make that type of statement in the type of circumstances where the particular statement in question was made." (original emphasis)
His Honour added, at [209], that the case law bore out that it was:
"... by reference to the type of communication involved in the defamatory utterance, rather than the particular defamatory utterance itself, that the public interest is to be gauged": see Toogood v Spyring
In addition, I repeat the comment that I have made above in respect of the occasion not being one of qualified privilege. The deception that lay behind Mr Marshall's involvement in the circulars bore this undoubted feature. Anonymity of the author(s) and the concealment of Mr Marshall's role in the publication of the circulars prevented ratepayers from making a proper assessment of the material contained in the circulars. The principals behind the circulars clearly intended to represent the content of the circulars as being the genuine expression of concern of an association of ratepayers as to matters occurring in the municipality.
Had the recipients of the circulars been advised that the circulars contained the opinion of a political opponent, they would have been able to assess, for themselves, the content for themselves. Was the content merely a rant? Was it merely an attempt to belittle a political opponent? Was there merit in the matters raised? Or were the circulars a combination of these possibilities? In my opinion, the very fact of the deception was evidence that the principals behind the circulars were intent on concealing their identity and preventing the ratepayers from being able to properly evaluate the material. In my opinion, that was the improper purpose in the publication of the circulars.
The case of malice is even stronger in respect of Mr Lloyd. He was a paid public servant. He was not standing for political office. Yet the circulars consistently made reference to lies he had told and to his incompetence. This could only have been a personal attack upon him with a motive of having him removed from his position. The stridency of the public vilification, together with the other factors to which I have referred, including the deceitful covert publication of the circulars was evidence of and, in my opinion, sufficient to prove, malice.
Accordingly, even if the matters complained of, which are subject of the cross-appeal, were published on an occasion of qualified privilege, the occasion was defeated by malice. For both these reasons, the cross-appeal must succeed.
Appeal from dismissal of Mr Marshall's cross-claim
Mr Megna published two allegedly defamatory matters of Mr Marshall in a publication entitled Veritas. Only the second publication was found to be defamatory. It contained the following two items:
"FIRST ISSUE FEEDBACK
The first edition of this newsletter has certainly caused a reaction in the community. I have received many letters and calls of support and comments of 'it's about time you replied to the Drummoyne Council Ratepayers' Association monthly circular.'
But it caused an even bigger reaction at the November Council meeting from two Councillors belonging to the Drummoyne Municipality Residents' Association (DMRA - notice the similarity in the names of both organisations?)
Cr David Marshall, President of the above DMRA, who has admitted to delivering the defamatory monthly circulars, sat back and let his running mate, Cr [MW], attack me on one component of my letter. What was his only complaint? He didn't find a fault in Cr Marshall delivering defamatory material, nor in his support of big development and acting for developers. He didn't even get upset that Cr Marshall was exposed with running down the Senior Citizens' Club. No, what Cr [W] found offensive was that I told residents how he walked out of the Mayoral elections in September and didn't vote, claiming to be sick, but returned for dinner with a full appetite. How does he have the hide to deny it when he was witnessed by a full public gallery, Council staff and all the Councillors?
AWARD-WINNER
How's this for hypocrisy? Last month, Council and Abbotsford Cove received an award from the Housing Industry Association for Quality Urban Practice. Speaking to the item, Cr Marshall launched into a scathing attack on the development, parading himself as Drummoyne's anti-development Councillor. During the 1995 Council elections, he campaigned against the development at the old Nestles' site and polled very well at the Abbotsford School polling booth. But who moved at the first meeting after the elections that the development proceed? No prizes for guessing ... Cr Marshall! What's the old saying about fooling some of the people some of the time?"
These items conveyed the following two imputations:
"(a) that Mr Marshall had been exposed running down the Drummoyne Senior Citizens' Club; and
(b) that Mr Marshall was a hypocrite in that prior to the 1995 Council election he had criticised a development at Abbotsford Cove which he then voted in favour of, once elected to Council."
Although Mr Megna admitted that the imputations were defamatory, he pleaded that they were published on an occasion of qualified privilege being a response to an attack. He also pleaded the defence of comment in respect of the second of these two imputations.
The trial judge upheld the defences. Mr Marshall has appealed against each of these findings.
Defence of qualified privilege: response to an attack
The trial judge considered, at [625], that although the evidence was confusing, it was a reasonable inference that the first Veritas publication was conceived as a means of responding to the publication of the Ratepayers' Association circulars, and that this applied to the second. Nonetheless, her Honour recognised that it was still necessary to determine whether the particular content of the second Veritas publication that conveyed the imputations was properly characterised as a response to an attack.
Her Honour concluded, at [627], that given the wide variety of issues that had been subject of the appellants' circulars, and the sustaining and continuing nature of the attack contained in them, that it was proper to construe the second Veritas publication as being a response to attack. This was so notwithstanding that the items in the second Veritas publication were not directly responsive to matters that had been published in the circulars. Rather, her Honour considered that it was a legitimate form of response for Mr Megna to raise issues concerning Mr Marshall's conduct in relation to Council matters.
Mr Marshall, whilst accepting that an occasion existed to repel or reply to the attacks made in the circulars, there was nothing in Veritas in response to the circulars. I do not agree. The attack on Mr Megna was that he was a dishonest Councillor, intent on his own self interest, corrupt and incompetent. The attack on Mr Marshall in Veritas was an attack on Mr Marshall's conduct as a Councillor, namely, that he was a hypocrite and had run down the Senior Citizens' Club.
In my opinion, her Honour correctly held that the second Veritas was published on an occasion of qualified privilege in the sense of being a response to an attack. Given that conclusion there is no necessity to deal with Mr Marshall's further complaint in his written submission, at [39], that there was a disjunction between her Honour's conclusion in relation to Veritas and her conclusion in respect of the circulars.
Defence of comment
The trial judge upheld the defence of comment on the basis that she accepted Mr Megna's claim that the comment was his own, that the material contained in the publication was material on which a comment of hypocrisy might be made, and that it had not been suggested that the statements in the matter complained of were not factually correct. It followed, in her Honour's view, that for the purposes of the Defamation Act, s 30(2), that the statements of fact in the publication were "of substantial truth": at [633].
Mr Marshall, in his further amended notice of appeal, contended that the trial judge failed to consider whether the second imputation was conveyed as fact or comment and erred in holding that the comment was based on proper material for comment: see grounds 4 and 5.
The defence of comment is provided for by the Defamation Act, ss 30-32. Sections 30 and 31 provided:
"30 Proper Material
(1) For the purposes of this section, but subject to subsection (2), proper material for comment means material which, if this Division had not been enacted, would, by reason that it consists of statements of fact, or by reason that it is a protected report within the meaning of section 24, or for some other reason, be material on which comment might be based for the purposes of the defence or exclusion of liability in cases of fair comment on a matter of public interest.
(2) A statement of fact which is a matter of substantial truth is proper material for comment for the purposes of this section, whether or not the statement relates to a matter of public interest.
(3) The defences under this Division are available as to any comment if, but only if:
(a) the comment is based on proper material for comment, or
(b) the material on which the comment is based is to some extent proper material for comment and the comment represents an opinion which might reasonably be based on that material to the extent to which it is proper material for comment.(4) There is no special rule governing the nature of the material which may be the basis of comment imputing a dishonourable motive or governing the degree of foundation or justification which comment imputing a dishonourable motive must have in the material on which the comment is based.
31 Public interest
The defences under this Division are not available to any comment unless the comment relates to a matter of public interest."
The defence only applies to comment by the defendant: s 32(1). Section 32(2) provided that the defence is:
"... defeated if, but only if, it is shown that, at the time when the comment was made, the comment did not represent the opinion of the defendant."
Principles relating to the defence of comment
In Hawke v Tamworth Newspaper Co Ltd [1983] 1 NSWLR 699 at 704, Hunt J dealt with the defence of comment as follows:
"In every case where comment is relied upon as a defence, there is a preliminary legal issue as to whether the statement in question is capable of being construed as a comment (in that it is an opinion which could possibly be held on the material indicated as its basis), followed by the factual issue as to whether that statement is to be construed in fact as an expression of opinion - which is answered in part by asking whether the ordinary reasonable reader would have understood the statement as having been intended by its author to be an expression of opinion based upon sufficiently indicated material: Bickel's case [1981] 2 NSWLR 474, at 490, 492."
As his Honour also pointed out, relevant to the issue in this case, the material upon which the comment is based must be stated expressly or impliedly in the matter complained of. The point of this requirement is that recipients of the information must be able to form an opinion for themselves whether or not they agree with the opinion based upon that material.
The principles governing the defence of comment were discussed by the High Court in Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; 232 CLR 245, where Gummow, Hayne, and Heydon JJ said at [35]:
"Distinguishing fact and comment. In Brent Walker Group Plc v Time Out Ltd, Bingham LJ said:
'The law is not primarily concerned to provide redress for those who are the subject of disparaging expressions of opinion, and freedom of opinion is (subject to necessary restrictions) a basic democratic right. It is, however, plain that certain statements which might on their face appear to be expressions of opinion (as where, for example, a person is described as untrustworthy, unprincipled, lascivious or cruel) contain within themselves defamatory suggestions of a factual nature. Thus the law has developed the rule ... that comment may only be defended as fair if it is comment on facts (meaning true facts) stated or sufficiently indicated.' (emphasis added)" (citation omitted)
Their Honours next referred to the remarks of Jordan CJ in Goldsbrough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524 at 531-532, that for the defence of fair comment to succeed, "it is essential that the whole of the words in respect of which it is relied on should be comment". As Jordan CJ explained:
"It must be indicated with reasonable clearness by the words themselves, taking them in the context and the circumstances in which they were published, that they purport to be comment and not statements of fact; because statements of fact, however fair, are not protected by this defence. In other words, it must appear that they are opinions stated by the writer or speaker about facts, which are at the same time presented to, or are in fact present to, the minds of the readers or listeners, as things distinct from the opinions, so that it can be seen whether the opinions are such that they can fairly be formed upon the facts." (original emphasis)
In emphasising the distinction between comment and fact, their Honours in Channel Seven Adelaide continued, at [35] ff:
"35 A 'discussion or comment' is to be distinguished from 'the statement of a fact'. 'It is not the mere form of words used that determines whether it is comment or not; a most explicit allegation of fact may be treated as comment if it would be understood by the readers or hearers, not as an independent imputation, but as an inference from other facts stated.' As the passages quoted from Bingham LJ and Jordan CJ above illustrate, the distinction between fact and comment is commonly expressed as equivalent to that between fact and opinion ...
36 The question of construction or characterisation turns on whether the ordinary reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' ... not 'an exceptionally subtle' recipient, or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at'.
...
45 ... It is often said ... in addition to the rule ... that the fair comment defence does not apply to material unless it is in truth comment rather than fact, there is a rule that material cannot be fair comment unless 'the facts on which it is based are stated or indicated with sufficient clarity to make it clear that it is comment on those facts'. That is, the alleged comment must be sufficiently linked to facts being commented on by reason of those facts being stated in the publication containing the comment, or being referred to in it, or being notorious.'" (citations omitted)
In Lloyd-Jones v Allen [2012] NSWCA 230 Nicholas J, having reviewed the authorities, summarised what needed to be established for the defence of comment to succeed in the following terms, at [43]:
"In short, to be protected by the defence of fair comment or honest opinion, the defamatory matter must be recognisable as comment and not as a statement of fact. The first necessary step is the objective exercise to decide whether the reader (or viewer or listener) is able to identify the communication as a comment rather than a statement of fact (Gleeson CJ in Manock par 4)."
The defence of comment was also considered by this Court in Trad v Harbour Radio Pty Ltd [2011] NSWCA 61 (and was not subject of the appeal to the High Court). The Court (Tobias, McColl and Basten JJA) noted, inter alia, the reference, in Gatley on Libel and Slander, 11th ed (2008) Sweet & Maxwell at par 12.6 to the distinction between fact and comment and the authors' reference therein to the statement of Cussen J in Clarke v Norton [1910] VLR 494 at 499 that:
"Though 'comment' is often equated with 'opinion' this is an over-simplification. More accurately it has been said that the sense of comment is 'something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, remark, observation, etc.'"
It is to be noted that the defence of comment will not be available in relation to a statement capable only of being a statement of fact: Griffith v Australian Broadcasting Commission [2010] NSWCA 257 at [54]; Spiller v Joseph [2010] UKSC 53; [2010] 3 WLR 1791 and Harbour Radio v Trad at [57].
Assuming that Mr Megna, who pleaded fair comment, established that the imputation was comment and was based on proper material for comment, Mr Marshall bore the onus of establishing that the opinion was not honestly held by Mr Megna: Hawke v Tamworth Newspaper Ltd at 716.
As can be seen from her Honour's reasons, very little attention was given to the defence of comment. Her Honour is not to be criticised for that as she undoubtedly considered the defence had been made out and the matter fell for consideration at the end of an extremely arduous task.
Mr Marshall's submissions
Mr Marshall complained that her Honour failed to give consideration to the threshold question whether the imputations were conveyed as comment. In making this complaint, Mr Marshall contended that her Honour's error related to both imputations. However, as I have already indicated, the defence of comment related only to the second of the two imputations. Accordingly, I propose to disregard Mr Marshall's submissions insofar as they relate to the first imputation.
The article from which the second imputation arose appeared under the heading "AWARD WINNER" as set out above, at [343].
The sting in the imputation was that Mr Marshall is a hypocrite. In my opinion that is a comment or expression of opinion. It is an inference drawn from the facts stated, that is, that Mr Marshall took one position in respect of a development at one point of time and the opposite position later. It was not merely an assertion of fact, as Mr Marshall contended.
Mr Marshall also complained that her Honour erred in holding that the imputations were based on proper material for comment. He argued that her Honour's conclusion, that it was "not suggested" otherwise, was not correct. In this regard, Mr Marshall referred to his written submissions at trial which, relevantly, were in the following terms:
"Mr Megna made a limited attempt to prove (in a thoroughly hearsay fashion) his source of information in relation to the second imputation ... however that evidence falls far short of establishing the truth of the matters stated about Mr Marshall in relation to the charge of hypocrisy."
The submission was reiterated on the appeal.
Mr Megna's submissions
Mr Megna responded that, not only did he give evidence on this question, that evidence was uncontradicted. Mr Megna's evidence was that he had read Mr Marshall's literature during the 1995 election campaign in which Mr Marshall had campaigned heavily against the Nestles' development. Mr Megna also gave evidence that Mr Marshall had received a fairly high vote at the Abbotsford polling booths as compared to his vote in other booths. Mr Megna also said that he was present at the Council meeting where the question of the development was up for consideration and saw Mr Marshall vote for the development to proceed.
Consideration
Although Mr Marshall's complaint that the first part of Mr Megna's evidence relating to the literature he read during the election campaign was hearsay, no objection was taken to that evidence at the time the evidence was given. Once given, however, this was evidence in the case admitted for all purposes: the Evidence Act 1995, s 59 and s 60. It was not sufficient for the objection to be taken in final submissions or on the appeal. The balance of the evidence was direct evidence of what Mr Megna saw and heard. Accordingly, the material upon which the comment was based was proper material for comment. It should also be noted that, contrary to his submission in this Court, Mr Marshall did not suggest in his submission to the trial judge that the material upon which the comment was based was not correct. Rather, Mr Marshall's attack was that the material was not sufficient to establish what was stated about him in relation to the charge of hypocrisy.
It follows that I would reject grounds 4 and 5 of Mr Marshall's appeal.
The limitation defence
The respondents commenced proceedings in this matter by filing a statement of claim on 7 April 2004. The relevant limitation period for a defamation claim is six years: the Limitation Act, s 14. Accordingly, the limitation period in this matter commenced on 8 April 2004.
The trial judge held that the first circular subject of the proceedings was statute barred in that the inference, from the evidence was that it was published, at the very least before the end of March 1998.
The evidence revealed that the circulars were distributed just after the middle of the month named in them. The first circular was dated March 1998 and was distributed by about the third week in March. The appellants' argument was that distribution and publication do not occur at the same time, and that a publication only occurs when the matter is read and comprehended by someone: Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575.
The immediate and irremediable difficulty that the respondents' argument faced was that there was no evidence from which an inference could be drawn that persons read the circular on or after 8 April 1998. Accordingly, no error has been demonstrated in her Honour's conclusion that the action, insofar as it was based on the first circular, was statute barred.
Damages
At trial, Mr Megna succeeded in his claims in respect of 10 circulars and a total of 26 imputations. Mr Lloyd succeeded in respect of the publication of five circulars and a total of seven imputations.
Legal principles
The Defamation Act provides for the award of damages as follows:
"46 General
(1) In this Part relevant harm means, in relation to damages for defamation:
(a) harm suffered by the person defamed, or
(b) where the person defamed dies before damages are assessed, harm suffered by the person defamed by way of injury to property or financial loss.(2) Damages for defamation shall be the damages recoverable in accordance with the common law, but limited to damages for relevant harm.
(3) In particular, damages for defamation:
(a) shall not include exemplary damages, and
(b) shall not be affected by the malice or other state of mind of the publisher at the time of the publication complained of or at any other time, except so far as that malice or other state of mind affects the relevant harm."46A Factors relevant in damages assessment
(1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded ..."
Trial judge's reasons
The trial judge approached the assessment of damages by considering each circular separately and making an award of damages in respect of each, regardless of the number of imputations conveyed by the particular matter complained of. Her Honour considered, at [651], it was necessary so as to properly assess the extent and nature of the imputations, the evidence of injury to the reputations of each of the respondents and the hurt and distress each had experienced. In the result, the total damages, in total, awarded to Mr Megna was the sum of $395,000, and to Mr Lloyd, the sum of $220,000.
Appellants' submissions
The appellants contended that in adopting that approach her Honour failed to have regard to the mandatory consideration specified by the Defamation Act, s 46A, namely, that there be an appropriate and rational relationship between the relevant harm and the amount of damages. They contended that the total damages awarded was excessive in that they were "outside the range of what could reasonably be regarded as appropriate to the circumstances of the case": Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44 at 61-62; Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327 at [62] per Mason CJ, Deane, Dawson and Gaudron JJ.
Respondents' submissions
The respondents submitted that the appellants had failed to demonstrate any basis for appellate intervention. In particular, the respondents pointed out that they had been the subject of successive publications essentially repeating the same sting, that is, lying and incompetence: see Carson, at 54-55, where the plurality noted the cumulative effect of successive publications, that is, the later publications compound harm of the earlier publications.
Consideration
A trial judge is entitled to determine the approach to the assessment of damages so as to adequately vindicate the plaintiff's reputation and compensate for the hurt and distress caused by the defamation. Thus, it was entirely appropriate for her Honour to assess damages by having regard to each circular: see Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232 where McColl JA, at [274], stated:
"... It was ... a matter for [the trial judge] whether he awarded damages separately or en bloc for the imputations arising from the three matters complained of. As [the trial judge] said ... 'whether one or more causes of action are to be included in one verdict or judgment will depend upon the exercise of the trial Judge's judicial discretion'." (citations omitted)
McColl JA continued:
"... [I]t is also important to recall that in arriving at each verdict, his Honour was 'mindful of the fact that there was likely to be a substantial overlap in the viewing audience' ... Once it is accepted that his Honour took the issue of overlap into account, it cannot be said that his Honour erred in a sense attracting appellate intervention,' in awarding separate damages for the imputations conveyed ..."
As I understand the appellants' submissions, they do not assert that her Honour was in error in approaching each of the matters complained of separately and determining the award of damages in respect of each matter. Rather, as I understand it, the complaint is directed to the end result.
An award of damages for defamation involves an evaluative assessment of the harm caused. This has been said to involve an exercise of discretion: Rogers, at [62] per Hayne J. Whether an award of damages is called evaluative or discretionary, the principle governing appellate intervention was stated by the plurality in Carson, at 61-62, in the following terms:
"If an appellate court is convinced, not that in its own view the amount is too high or too low but that the amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case, the proper performance of its functions will require it to intervene to prevent a miscarriage of justice." (citation omitted)
The damages awarded by her Honour were high. However, as I have concluded that the cross-appeal should succeed, the respondents are entitled to damages in respect of all imputations save for those arising from the first matter complained of, as those imputations are statute barred. Accordingly, damages have to be reassessed in any event. For that reason, I do not consider it necessary to give separate reasons in respect of the award of damages in their entirety or any individual award, thereof. However, it is apparent from the damages that have concluded are appropriate compensation for the harm to reputation and the hurt caused by the defamatory matters, that I consider her Honour's total awards of damages were outside an appropriate discretionary range.
Both parties indicated a preference for this Court to reassess damages should they be unsuccessful and, given the lengthy litigious history between the parties, that is the preferable course. The remarks that follow are to be read as applying to damages for all the imputations, save for those that are statute barred.
In reassessing damages, I do not propose to adopt the process engaged in by her Honour. Rather, I consider that the preferable course is to assess the total award of damages in each case as a single sum. However, in doing so I have had close regard to her Honour's reasons given in respect of the individual award of damages, as well as to her account of the evidence adduced in respect of damages. In this regard, the parties did not suggest that her Honour's summary was inadequate or in any way erroneous. Nor did they draw the attention of the Court to any part of the evidence to which they considered this Court ought especially to have regard.
The defamatory publications were continuous over an extended period of time. Prior to the publication of the defamatory matters, there was evidence that each respondent had enjoyed a high reputation in their respective professional positions. There was also evidence of the impact the matters complained of had upon those reputations and of the significant hurt the publications have caused each respondent. Whilst much of the defamatory material was of a serious nature, a small sample will suffice to demonstrate both the vitriol and the repetitive and compounding effect of the attacks on the respondents.
In the fifth matter complained of, being the September 1998 circular, the following appeared under the heading: "YELLOW, THE COLOUR OF WHIMPS":
"Wanted at the next Council Elections: 'Councillors with Guts.'
...
Don't let us forget the lies, mistakes and devious dealings by Lloyd toward the ratepayers ...
There is no need to list Lloyd's lies and blunders. Our circulars are full of them. Why have Councillors allowed Lloyd to blatantly facilitate State Government Policy in many areas of Drummoyne Council arrangements, to change the face of this Municipality in form and life style, to bludge on incompetence and a complete vacuum of leadership and community initiatives? Why have they backed a sneak? In particular, with a voting majority now at hand, what 'watchdog' role have the Liberal faction adopted in Lloyd's stealthy implementation of Labor systems and procedures? You've got it - none!" (original emphasis)
The seriousness of this defamatory publication is so obvious it speaks for itself. No wonder, as Mr Lloyd said in his evidence, he came to dread the third Thursday of each month, when the circulars could be expected to be distributed: at [671].
In the eleventh matter complained of, being the June 1999 circular, the following statement was made in large bold type: "MEGNA ... AND LLOYD CAN CONTINUE THEIR RANGE OF LOCAL ABUSES UNTIL THERE IS AN ELECTION". This was a seriously defamatory statement about the publicly elected Councillor and an employed public servant.
The last circular was issued in August/September 2003. The defamatory imputations were derived from the following passage:
"In an article in the Glebe and Inner West Weekly Newspaper dated 11th June, 2003, the local Community and the authors of the 'Community View' Newsletter have been issued an invitation by Michael Megna 'to put up or shut up over allegations made by the newsletter issue dated May 2003. We apologise to our readers for the delay in a response, but, as one can see, the attached summary of deception, self-interest, political corruption, manipulation, lie after lie, payback, cheating and straight out public dishonesty is immense, and these are only some of the major matters held. This Newsletter has no agenda, political or otherwise."
This matter could not have landed a heavier blow upon a person in public office, who had played a significant and respected role in the community. Nothing was left unsaid. As a public figure, Mr Megna was called corrupt, a cheat, dishonest, self-interested in a way that was "immense" and, according to the article, that was only part of the story.
In my opinion, having regard to the defamatory material and the almost incessant attack upon the respondents an award sufficient to vindicate each respondent's reputation and to compensate for their hurt and distress would be $300,000 to Mr Megna and $200,000 to Mr Lloyd.
Costs
The trial judge delivered a separate judgment in respect of costs: Megna v Marshall (No 2) [2011] NSWSC 52. The appellants had argued that some order other than that costs follow the event: see Uniform Civil Procedure Rules 2005 (UCPR), r 42.1, should be made in circumstances where the respondents had been successful in respect of a portion only of the pleaded imputations. The orders proposed recognised an entitlement in the respondents to an order for indemnity costs from 25 January 2006 being the date that each respondent had made an offer of compromise. However, the appellants contended that they should pay 50 per cent of Mr Megna's costs, and that he should pay 50 per cent of their costs, representing an approximation of the degree of success of each in prosecuting and/or defending the claim. In Mr Lloyd's case, the suggestion was that the appellants pay 20 per cent of his costs and he pay 80 per cent of their costs.
Her Honour refused that application and held that the respondents were entitled to the whole of their costs of and including the s 7A trial. Her Honour also ordered that the respondents were to have 90 per cent of their costs of the proceedings following the s 7A trial, those costs to be paid on an indemnity basis as and from 26 January 2006.
Having regard to my conclusion on the appeal and on the cross-appeal, this ground of appeal has become redundant and, in my opinion, costs should follow the event. The appellants are entitled to their costs of the trial at first instance, including the s 7A trial. The Court is unable to determine whether those costs should be paid on an indemnity basis from 26 January 2006, as there is nothing before the Court as to the amount of any offer made by the appellants. If the appellants seek such an order, they should make an application pursuant to UCPR, r 36.16.
An adjustment will also have to be made to the amount of interest payable on the judgment sum. The parties will be directed to attend to this calculation. Accordingly, the orders I propose are:
Orders
1. Appeal dismissed in part;
2. Cross-appeal allowed;
3. Set aside the orders of the trial judge made on 25 June 2010;
4. Set aside the orders of the trial judge made 18 February 2011;
5. Judgment for the plaintiff/cross-appellant (Mr Megna) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $300,000 together with interest to be calculated;
6. Judgment for the plaintiff/cross-appellant (Mr Lloyd) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $200,000 together with interest to be calculated;
7. Order that the appellants/cross-respondents/defendants (Mr Marshall and Mr Tory) pay the following costs of the respondents/cross-appellants/plaintiffs:
(a) Of the proceedings in the court below including the costs of the s 7A jury trial;
(b) Of the appeal and the cross-appeal;
8. The parties are to recalculate the interest payable on the judgment sums on the same basis specified in the reasons of the trial judge of 18 February 2011: Megna v Marshall (No 2) [2011] NSWSC 52, at the rate of 2 per cent from 1 January 2001 up to and including the date of her Honour's judgment of 25 June 2010.
HOEBEN JA: I agree with Beazley JA and the additional observations of Allsop P.
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Amendments
27 Feb 2013 Incorrect party name amended Paragraphs: 35
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34
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