PK v BV (No 2)

[2008] NSWDC 297

CITATION:	PK v BV (No 2) [2008] NSWDC 297 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	8 and 9 December 2008
JUDGMENT DATE:	9 December 2008
JURISDICTION:	Civil
JUDGMENT OF:	Gibson DCJ
DECISION:	(1) Judgment for the first plaintiff for $50,000.00. (2) Judgment for the second plaintiff for $50,000.00. (3) Defendant pay plaintiffs' costs. (4) The plaintiffs' solicitors are to serve a copy of this judgment on the defendant within seven days, and thereafter have leave to bring in short minutes of order containing either a mathematically agreed interest calculation upon the damages of $100,000.00 in total, or, in the absence of agreement, such figure as the plaintiffs propose. (5) Liberty to restore in relation to the calculation of interest and any application to vary the costs order in order 3 above. (6) Exhibits retained for 28 days.
CATCHWORDS:	DEFAMATION - assessment of damages - slanders published to two person - principles relevant to limited publications - evidence - aggravated compensatory damages - impact of hopeless plea of justification - plaintiffs' children taunted at school - award of $50,000 to each of the plaintiffs
LEGISLATION CITED:	Defamation Act 1974 (NSW), s 46A Defamation Act 2005 (NSW), ss 8 and 34
CASES CITED:	Ali v Nationwide News Pty Ltd [2008] NSWCA 183 Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 Clark v Ainsworth (Supreme Court of New South Wales, 27 June 1996, Levine J, unreported) Crampton v Nugawela (1996) 41 NSWLR 176 David Syme and Co Ltd v Mather [1977] VR 516 Hennessy v Lynch (No. 3) [2007] NSWDC 268 Herald & Weekly Times Ltd v McGregor (1928) 41 CLR 254 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 Jones v Sutton (2004) 61 NSWLR 614 Jones v Sutton (No 2) [2005] NSWCA 203 Martin v Bruce [2007] NSWDC 264 PK v BV [2008] NSWDC 292 Rigby v Mirror Newspapers (1963) 64 SR (NSW) 34 Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 Trantum v McDowell [2007] NSWCA 138 Zarth v Williamson [2006] NSWCA 246
PARTIES:	First Plaintiff: PK Second Plaintiff: AK Defendant: BV
FILE NUMBER(S):	287 of 2008
COUNSEL:	Plaintiffs: Mr C J Dibb Defendant: No appearance
SOLICITORS:	Plaintiffs: Darryl Barlow & Co Defendant: No appearance

JUDGMENT

1. This is a hearing of the assessment of damages in a defamation action brought by the plaintiffs.

2. The plaintiff, by way of a statement of claim, brings proceedings for damages for two slanders on 12 and 15 February 2007. The first of these occurred when the defendant, while visiting a private home, had a conversation with a Ms BW to the following effect:

Defendant: "Why are you still friends with those two?"
BW: "P and A?"
Defendant: "Yes, of course. They have stolen money from me. They are not trustworthy. They are both snakes. P is a con man. They are not really the people you think you know."

3. The second of these occurred in the grounds of an infant school when the defendant said to a Ms SB:

Defendant: "I couldn't speak to you the other day because A was there. A and P have stolen a lot of money from us. Don't trust them. Watch your back. They will take you for all you have got."
SB: "I haven't got anything. And that's all between you and them."
Defendant: "Don't trust them. They have stolen a lot of money from us."
Later he said:
Defendant: "Don't trust P. P is a liar who has stolen a lot of money from us."

4. The defendant pleaded defences of truth, contextual truth, unlikelihood of harm and offer of amends. In a separate judgment dated 8 December 2008 (PK v BV [2008] NSWDC 292), I struck out all of those defences yesterday. Not only was each defence hopeless but, as I noted in my judgment, the defendant, despite knowing of the hearing date and being represented when the hearing date was given, failed to attend court for the purpose of defending the action. After I struck out the defences, the matter proceeded by way of assessment of damages.

5. When the Defamation Act 1974 (NSW) was in force, the cause of action was the imputation, so the causes of action were the imputations pleaded to arise from the publications. That is no longer the case as the publication is now the cause of action rather than the imputations: s 8 Defamation Act 2005 (NSW). In ex parte proceedings such as the present, it is my view that it is not necessary for the trial judge to make formal findings as to the imputations. I have now heard evidence from each of the persons to whom the matter complained of was published as to what was said, and I should formally note that in my view each of the imputations pleaded, these being set out in my previous judgment, is published by the defendant, conveyed and defamatory.

6. Another matter I should note at the outset of this judgment is that, at the request of the parties, their names and all identifying factors have been removed from this judgment. The reasons for this were explained to me by counsel for the plaintiff, and in my view it is appropriate that such orders should be made, particularly having regard to the distress caused to the plaintiff's children by these publications.

The evidence

7. I shall first start with a description of the circumstances in which each of the plaintiffs learned of the matters complained of. Since the first plaintiff heard about them from his wife, it is appropriate that I should start by setting out her evidence. The second plaintiff said that she came to learn what was being said about her and her husband by the defendant as follows:

"Q. How did you come to learn of what was being said about you by Mr BV, the defendant?
A. In one occasion I came to learn of what he said through a friend, SB. Our children go to school together, and we used to live in the same street. So sometimes SB would take the kids to and fro [sic] school, and come and pick mine up as well. One particular day her and I went to the school together and, in passing, Mr BV said to her, 'I can't speak to you right now, because she's here,' referring to me. Over the next couple of days SB would come and take the kids to school and SB's dropped the kids off and said that she was approached by Mr BV and, and was approached and said that he couldn't speak to her when I was there, and he wanted to tell her some things about us.

…

Q. What did she say?
A. She said that he referred to P and I as not being trustworthy, that we would take them for all they have and that we were liars and that we were thieves, and to watch her back.

…

Q. How did you learn of what was said to Ms BW?
A. We were at a mutual function at a restaurant when Mrs BW asked to have a word with me outside the restaurant, and she wanted to question what she had heard by Mr BV, and we stood outside the restaurant and she referred to what had - what she had heard at Mr BV's house.

Q. What did she tell you had been said?
A. That P and I had stolen money, that P is a conman, a thief, not trustworthy, and she wanted to question - she actually questioned me. She said, 'A, is that true?'" (transcript, page 30 line 14 to page 31 line 9).

8. The second plaintiff gave some very powerful evidence about the hurt to feelings she suffered, and the impact that it had not only on herself but also her family. I shall set out this evidence in full:

"Q. What was the effect on you of these things being said?
A. Very hurt, very distraught to think that someone would be making statements of me in that fashion, hurt because they were untrue, very hurt because he also involved my children in certain statements that he made so I had to deal with the fact that both my children were being told similar things by his children at school, both children being in the same year as his two children.

Q. I'm sorry, are you saying you were concerned for the effect on your family of these things being said?
A. Yes, I am.

Q. Can you tell us what caused that concern?
A. One particular morning we were driving to school and I was speaking to my son, at the time he was six years old, he is now almost seven, and he was looking outside the window. He was in the passenger seat looking outside the window not replying to me and I said, 'D [son], look at Mummy when she's speaking to you,' because I'd have to look forward when I'm driving, and he turned around and looked at me and he was crying. It must have been for quite a while because he was very red in the face, and I said, 'D, what are you crying about?' and he said, 'Mummy, I just need to know, are we Christians?' I said, 'Yes.' He said, 'Mummy, are you a thief?' 'Where do you get that from?' He said, 'I was in Scripture and IV [BV’s daughter] called out to the teacher, "D shouldn't be in this class because his parents are thieves."' Then my daughter was in the back of the car - I'm sorry, your Honour. [The second plaintiff was weeping and had to stop.]

HER HONOUR: That's all right. You take your time. There are some tissues there.

WITNESS: My daughter was in the back of the car. D [daughter] then started crying and said, 'Mummy, I've heard similar things from EV [BV’s daughter] in the playground and I've spent the last three days in the girls' toilet at lunchtime because the kids teased me.' I then took them to school and told them to try and be nice to both IV and EV [BV’s daughters] and that it's a grown up issue and it has nothing to do with them. When I went home I told P about it and we did address the issue with all our children - we have eight - and we felt the need—

Q. You have how many children?
A. Eight children, and we felt the need to sit them all down and explain in case they heard something outside our home.

DIBB

Q. Were you told by your solicitor Mr B that Mr BV's defence included an assertion that what he'd said about you was all true?
A. Yes.

Q. How did that affect you?
A. Very shocked, very hurt, very concerned that he's still making comments to people that we know and to mutual friends as well that we've lost that were very dear to us.

HER HONOUR

Q. Sorry, did you say friends you've lost?

HER HONOUR: Can we hear some evidence about that, Mr Dibb?

DIBB: Yes, your Honour.

Q. Have you noticed a decline in social invitations since before these statements were made about you?
A. Sorry, can you ask that question again.

Q. Have you lost social invitations? Do you get invited out less since these things were said?
A. I believe so, yes.

HER HONOUR

Q. What makes you believe that? Tell us what makes you believe that.
A. We have quite a few friends that we have lost through Mr BV speaking to them. They don't speak to us any more. They don't invite us to functions that we used to attend together. I now see them in the street and they turn their head the other way. They've actually approached other close friends and told them things that they've heard so it's sort of - these other close friends have not taken notice, but we have lost quite a number. If I had to think off the top of my head probably four or five very dear friends that we've spent many years together." (transcript, page 31 line 18 to page 32 line 45)

9. Throughout this evidence, the second plaintiff was deeply distressed, and weeping and at times difficult to hear because she was sobbing. When she returned to her seat, her husband, the first plaintiff, was also in tears.

10. The first plaintiff, although less emotional in presentation, gave evidence of the distress and upset caused to him by reason of the publications as follows:

"Q. What effect did these statements have on you when you heard about them?
A. Apart from the fact that I was deeply hurt that BV was actually saying words of that sort of nature, I think I was quite shocked. I was very shocked, actually. I didn't know what to make of it. I was shocked. I'm actually still shocked.

Q. Was that shock affected by your knowledge that what was being said about you was false?
A. Correct." (transcript, page 23 line 42 to page 24 line 1)

11. The first plaintiff told the court that he and the defendant were family friends and had been in a business arrangement for 12 years. He had met the defendant at church and they shared a common interest in theology. Over the years they had been very close.

12. The plaintiff said in his evidence that as the Chief Executive Officer of a company which was considering a public float in the future, he was concerned not only for the impact of the publication on his personal reputation but upon his company, as his reputation in the company is very important. There is no pleading of special damages, but nevertheless, for the reasons explained by the Court of Appeal in Crampton v Nugawela (1996) 41 NSWLR 176, I can take into account, to a limited degree, that the reputation of a professional person for honesty is sometimes that person's whole life, and not merely something that is personally hurtful.

13. As the first plaintiff himself said, his business was built on trust and "words can stick" (transcript, page 25 line 28). His evidence was that the defendant had been "in the centre of my influence, with all my friends and all my business dealings for the last 12 years" (transcript, page 25). In particular, he was concerned about the effect on his family:

"Q. Have you been concerned about the effect on your family?
A. I've been very concerned about the effect on my family, because our children were always - like, our two families were very close. Our children were very close. My youngest daughter and his youngest daughter were best friends at school, and the words that have come back from the children is just - I'm shocked. I'm just shocked at their - at the behaviour of BV. I'm just shocked." (transcript, page 26 lines 31-37)

14. The plaintiff called witnesses who gave evidence of what was said, and also of the extent to which there had been what is commonly called the "grapevine effect". I note there is no pleading to this effect, so I have been careful, since the defendant was not put on notice as to such a plea, not to place too much weight on it.

15. Ms SB had known the plaintiffs for about two years. Her husband was just starting to get into business with the first plaintiff. She was asked whether the statements made by the defendant [the second matter complained of] had any affect on her view of the plaintiffs, and she replied: "A little bit" (transcript, page 16).

16. Mr JP had known the plaintiffs for about four years. He had met them when they were selling an item of household furniture and then, a year later, met the first plaintiff at a franchise expo where their respective businesses were on display. They started talking about businesses, and he accepted a position in the plaintiff's company. The plaintiff, he said, was highly respected prior to the publication. He heard on the grapevine through "a couple of people, mutual friends of ours" (transcript, page 18) that the defendant was saying that the first plaintiff was a thief and a liar. He was asked:

"Q. Did this effect your view of [the plaintiffs]?
A. For a split second I had to think about it. But having dealings with P in many occasions and listening to other businesses that have dealings with P, I had no bad feedback, as opposed to only BV saying so." (transcript, page 18 lines 15-18)

17. Ms BW, to whom the first matter complained of was published, had been good friends of the plaintiffs for about 25 years, and was a godparent to one of their children. She said that both the plaintiffs had a high reputation before publication, and she described her response to what was said, as follows:

"A. Well, I've known them for such a long time, and I knew that they were very lovely people, and I've never had any problems in my part being with them. But of course, you know, listening to things like that, you sort of think to yourself, 'Maybe something is true,' you know, and you sort of put a little doubt in your head, and you think okay, and you just ask questions, and go away and say, 'No, it's impossible. 25 years of friendship and nothing has ever happened to me, so how can this be true?'

Q. So, ultimately, you say it didn't affect your view of Mr PK.
A. Absolutely, as any human being would.

Q. And Ms AK, did what was said affect your view of her?
A. Of AK? Just with all the words that he would say, the dealings that, you know, that was supposed to be the stolen money and all that, and I'm thinking these people wouldn't do anything like that, they couldn't do anything like that.

Q. It made you think, did it?
A. Yeah, it made me think that, you know, maybe it's true, but I stopped and thought - and as I said, after 25 years of knowing these people, nothing like that has ever happened to me, so why all of a sudden happening to BV?" (transcript, page 21 lines 24-44)

18. Mr CP had known the plaintiffs through the church and business dealings for about 26 years. He knew about what was said, because the plaintiffs had told him. It did not affect his relationship with either of them, because, as he said, "I have a long standing relationship," but it certainly surprised him that such statements were made (transcript, page 28). He said that the plaintiffs both had high reputations prior to publication of the matters complained of.

Damages

19. The first issue to consider is the question of appropriate damages for two very limited publications in circumstances where the grapevine effect was not pleaded. I had the opportunity to consider a similar submission in Hennessy v Lynch (No. 3) [2007] NSWDC 268.

20. Whether or not the grapevine effect is pleaded, it is part of the natural pain of mind which accompanies such publications that a plaintiff will fear repetition: Rigby v Mirror Newspapers (1963) 64 SR (NSW) 34; Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at [69], [73], [80] and [82] per Hayne J. Brennan J made a similar point in Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 70-71, as did McHugh J at 104. In Jones v Sutton (2004) 61 NSWLR 614 at 631 the court noted that the plaintiff was entitled to be compensated for the risk of repetition. There was, however, a grapevine effect pleaded in that case.

21. The evidence shows that the matters complained of were two publications, each to one person, and in each case the recipient of the publication, (despite a long and friendly relationship with the plaintiff in the case of the second publication in particular) felt some reservations. The second plaintiff's evidence that Ms BW took her outside the restaurant at which they were dining with other friends to ask if these allegations were true is very powerful evidence of damage as well as hurt to feelings.

22. There is consideration of the range of damages for limited publications in the decisions of the Court of Appeal in Trantum v McDowell [2007] NSWCA 138 and Zarth v Williamson [2006] NSWCA 246. Trantum v McDowell is of particular assistance, since the defendant in that case, as is the case here, did not participate in the trial at all, and has made no submissions in relation to either liability or quantum. The Court of Appeal in that case considered that an award of $50,000.00 was an appropriate award for a publication to 16 people where a claim for aggravated compensatory damages had been made.

23. There were strong aggravated compensatory damages issues in Trantum v McDowell, as is the case here, and both cases share the fact that a defence of truth has been pleaded by a defendant who has not attended court for the purpose of putting his case.

24. In Trantum v McDowell the proceedings were brought pursuant to Defamation Act 1974. These proceedings are brought pursuant to the Defamation Act 2005, and s 34 is the operative section. However, there are considerable similarities between the two sections, notwithstanding the cap on damages, and a great deal of guidance can be obtained in the correct method of assessment of quantum by having regard to Rogers v Nationwide News Pty Ltd, concerning the manner in which s 46A(2) should be applied.

25. In Rogers v Nationwide News Pty Ltd the High Court, and in particular Hayne J, explained the manner in which a trial judge should approach the issue of damages for reputation, and specifically explained in what way there should be any comparison between awards for defamation and other awards of general damages, and how the trial judge should go about identifying what are the features or characteristics of the particular case should be considered, and what features or characteristics were relevant to compare with other cases. In particular, Hayne J at 354 noted that any comparison which is drawn must look to the particular plaintiff, not to what others may have thought of the defamatory words that got published, or what kinds of physical injuries (in the case of personal injury awards) were sustained.

26. A comparison between the matter complained of and the imputations in Zarth v Williamson, Trantum v McDowell and Martin v Bruce [2007] NSWDC 264 shows a degree of topical similarity, in that there are allegations of wrongdoing, such as dishonesty, in circumstances of a high level of personal vindictiveness, and that the allegations are put very much as an overstatement. I have carefully followed the reasoning of Hayne J in Rogers v Nationwide News Pty Ltd as well as the analysis of the appropriate range of awards considered by the Court of Appeal in Trantum v McDowell and Zarth v Williamson.

27. Consequently, although I have given very significant weight to the fact that these are two oral publications to two persons where the degree of damage may appear to the casual observer to be reasonably slight, they are made in circumstances in which the impact upon the plaintiff's family, and in particular upon the plaintiff's children, has been particularly strong.

28. I also take into account, although to a small degree, the question of failure to apologise (Clark v Ainsworth (Supreme Court of New South Wales, 27 June 1996, Levine J, unreported)), but in the present case this is really more an issue of relevance to the issue of aggravated compensatory damages, to which I now turn.

Aggravated compensatory damages

29. The plaintiff brings a claim for aggravated compensatory damages on the basis of the defendant's conduct in publishing the matters complained of. The issue of aggravated compensatory damages in defamation has been explained to be compensatory in character: Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 at 241. Whether aggravated compensatory damages are awarded will depend on whether the character of the defendant's conduct means that it has had an additional affect on the subjective mental pain and distress suffered by the plaintiff, in other words, whether the blow to the plaintiff's pride has been or must have been worsened by what was done: David Syme and Co Ltd v Mather [1977] VR 516 at 526.

30. Samuels JA in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 136 noted that aggravated compensatory damages could be awarded on the basis that the injury to the plaintiff's feelings had been increased by the falsity of the allegations made. Both plaintiffs gave evidence that the allegations were false, and, as the second plaintiff in particular explained, this increased the hurt to feelings.

31. The correct approach to the assessment of the quantum of such damages is explained in Crampton v Nugawela at 188 by Mahoney A-CJ. The court is restricted to compensating the plaintiff for loss actually suffered by him as the result of the defamation, but in assessing those damages, the court may adopt the highest level of damages open as compensatory damages. This is a test endorsed by the Court of Appeal in Ali v Nationwide News Pty Ltd [2008] NSWCA 183.

32. What are the features warranting the award of aggravated compensatory damages here? The first and most obvious is the bringing of a defence of truth. Filing a defence of truth recklessly will inflame the damages: Herald & Weekly Times Ltd v McGregor (1928) 41 CLR 254 at 262. This was, moreover, a hopeless defence and one which I have struck out: PK v BV. Even if the defendant had attended and led evidence along the lines particularised (and I note I have set out the particulars in some detail in my judgment of 8 December), these particulars would establish no more than some kind of commercial dispute about a late payment. There is nothing in the particulars to support the truth of any of the imputations.

33. As indicated, the hurt to feelings was increased by reason of the falsity of the imputations and this is an appropriate matter, on the facts in this case, for the awarding of aggravated compensatory damages.

34. Finally, there is the issue of the apology. The initial response, according to Exhibit A, was to deny the allegations of the plaintiff; to advise that in any defamation proceedings, if commenced, would be "strenuously defended" to accuse the second plaintiff of making defamatory statements, and to threaten defamation proceedings against both the plaintiffs by the defendant.

35. The defence that was filed provides an apology which is best characterised by the expression "too little and too late." Does this give rise to aggravated compensatory damages in itself, or does it prevent a claim being made for failure to apologise? I do not know what I am to make of an apology that says, "I can see that at the time of the said statements, I had no evidence or then current basis for making allegations of criminal behaviour against the plaintiffs." It does not sound at all as if the defendant is apologising. An apology that is not a genuine approach is not an apology at all: Jones v Sutton (No 2) [2005] NSWCA 203 at [47]. The facts in those proceedings were that the plaintiff sought to obtain an apology which would have effectively silenced a political opponent forever, not to mention in relation to everything she had ever said about them in the past. The apology offered in these proceedings is similarly unconvincing. Its role in aggravated compensatory damages is, however, limited.

Conclusions concerning damages

36. I have had regard to the principles of law and evidence in this case as set out above. I accept the warnings of the Court of Appeal as to the appropriate range of damages for publications of a very restricted nature. However, this is a case where, notwithstanding the imposition of a cap on damages, and notwithstanding the very limited extent of publication, the aggravating features must place the damages at the very top of the range that is appropriate.

37. The circumstances in which the defendant's children insulted the plaintiffs’ children, including making statements in the course of a scripture class, and leading to school bullying which had the plaintiffs’ daughter hiding in the girl's toilet for three days, required the plaintiffs to sit down with all of their children to explain what has happened, "in case they heard something outside our home" (transcript, page 32). This is very powerful evidence.

38. The defendant must have been aware of the very close relationship between his children and the plaintiffs’ children, and for a dispute between adults to be used as a punitive weapon in the school yard is conduct which shows aggravating features of the highest kind. In fact, I cannot recall ever reading any defamation judgments referring to repetition amongst children. It must be a very rare occurrence, and, in my view, is an appropriate matter for aggravated compensatory damages.

39. The imputations published of and concerning each of the plaintiffs were matters of great seriousness, and the impact upon not only them but their family was severe. Hurt to feelings was at a very high level. The plaintiffs gave evidence in a frank and straight forward manner, and there are aggravating features of a very high degree.

40. On the other hand, when awarding damages, I must give very great weight to the limited extent of publication of the matter complained of, namely to two persons, as well as to the lack of formal “grapevine” evidence of there being repetition to a limited number of persons. I must also have regard to the legislative policy in introducing the cap on damages.

41. Each of the plaintiffs has given evidence about the hurt to the feelings that each of them suffered. Although each has pleaded slightly different imputations, each of them has suffered equally. It is my view that each of the plaintiffs should be awarded the same sum. Taking all of the above matters into account, I assess damages for the first plaintiff at $50,000.00 and for the second plaintiff at $50,000.00.

Interest and Costs

42. I have not been addressed concerning interest or costs. I propose to make orders, including a grant of liberty to apply, in the event that any of the parties wishes to make submissions in relation to interest and costs. I have, however, made an order for costs to follow the event, which can be varied in the event of an application.

Orders

(1) Judgment for the first plaintiff for $50,000.00.

(2) Judgment for the second plaintiff for $50,000.00.

(3) Defendant pay plaintiffs' costs.

(4) The plaintiffs' solicitors are to serve a copy of this judgment on the defendant within seven days, and thereafter have leave to bring in short minutes of order containing either a mathematically agreed interest calculation upon the damages of $100,000.00 in total, or, in the absence of agreement, such figure as the plaintiffs propose.

(5) Liberty to restore in relation to the calculation of interest and any application to vary the costs order in order 3 above.

(6) Exhibits retained for 28 days.

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11/12/2008 - Typographical error - Paragraph(s) Catchwords