Radio 2UE Sydney Pty Ltd v Chesterton
[2009] HCATrans 9
[2009] HCATrans 009
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S474 of 2008
B e t w e e n -
RADIO 2UE SYDNEY PTY LTD
Appellant
and
RAY CHESTERTON
Respondent
FRENCH CJ
GUMMOW J
HEYDON J
KIEFEL J
BELL J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 10 FEBRUARY 2009, AT 10.17 AM
Copyright in the High Court of Australia
MR R.G. McHUGH, SC: May it please the Court, I appear with my learned friend, MS J. CHAMBERS, for the appellant. (instructed by Banki Haddock Fiora)
MR C.A. EVATT: I appear with MR R.K.M. RASMUSSEN for the respondent, your Honours. (Instructed by Beazley Singleton Lawyers)
FRENCH CJ: Yes, Mr McHugh.
MR McHUGH: Your Honours, the question in this appeal is not whether or not it is possible for somebody to be defamed in respect of their business reputation, but what the test is and a good deal of the cases that are in my friend’s submissions seem to be directed to the false first issue rather than to the second. As your Honours would have apprehended from the written submissions, which I do not propose to take your Honours through, the central proposition in the appellant’s case is that for an imputation to be defamatory at common law it must either satisfy what we have called the Gardiner test – Gardiner v John Fairfax – namely, that ordinary decent people in the community or ordinary reasonable people, or right‑thinking people, all of which for these purposes are the same, would, as a result of the publication, tend to think the less of the plaintiff.
As your Honours would also have seen from the written submissions, the unanimous decision of this Court in Reader’s Digest Services v Lamb holds that the standard to be applied is a standard common to society as a whole. The hypothetical referee, the ordinary reasonable person, is taken to embody the standards and values of the whole of the community rather than any particular section.
The fundamental submission is either an imputation satisfies that general test or it falls into the historical exceptions or anomalies of what are the shun and avoid cases for serious illness or perhaps rape on the one hand, or the idea of ridicule on the other, which have a long historical pedigree in this area and if an imputation does not satisfy any of those tests, it is not defamatory at common law. The Court of Appeal in Gacic, as your Honours no doubt are now aware, took a very different view. What I was proposing to do was to start in Gacic, show your Honours what happened in that case and how, I submit, with respect, this area of the law has run off the rails ever since, and then take your Honours to this Court’s decision in Gacic where there were some comments made on the subject matter, before returning to the trial in this matter.
Gacic in the Court of Appeal is reported in (2006) 66 NSWLR 675. The principal judgment is that of Justice Beazley. If I might take your Honours first to page 678. At paragraph 29 – this becomes important for the test that is applied later – your Honours will see that there are four imputations set out. Your Honour Justice Bell no doubt remembers this fondly.
As your Honours will see from the last sentence in paragraph 30, the jury found that imputations (b) and (d) were not conveyed so that the case on those imputations did not go off on the question of defamatory, but rather on what the publication meant and (d), significantly, was the plaintiff is incompetent as a restaurant owner in a particular respect. So the two that were left were (a) and (c), the selling of unpalatable food and the providing of some bad service. If I can take your Honours down to 32 on the same page, Justice Beazley records what the appellant’s case was, namely:
that those imputations had injured their business, trade or profession as owners of the restaurant and were thus defamatory.
That is, that what made them defamatory was the fact that they injured business, trade or profession. Her Honour refers to that as “business defamation” throughout. The only authority cited in favour of that is the paragraph from Gatley on Libel and Slander, 10th edition, set out there, paragraph 2.7. I am going to have to take your Honours back to that later in some detail once I have finished going through Gacic, but that is the sole authority. Your Honours will see the words in italics:
To say of a person carrying on any trade or profession or holding any office that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation in his trade, profession or office –
Just stopping there, in my submission, those words “may not even lower him in the estimation of others” in the context in which they appeared were clearly directed to the idea of somebody’s moral reputation or what is called in the authorities “general character and conduct”. The point that was sought to be made – and this becomes clear when your Honours see the most recent edition of Gatley in which this paragraph has been changed, to make the point that I am making to your Honours now.
GUMMOW J: Is this the first time it appeared in Gatley in the 10th edition?
MR McHUGH: My friend, Mr Evatt, says no. I have not checked that, but we can try to have a look over lunch, but probably in some form it has been there. The significant thing, as Justice McColl pointed out below, in this case is that this appears in a section of Gatley which was not directly concerned with the standard of opinion, the test for defamatory meaning. The point Justice McColl made was that you had to read this in the context of the whole chapter and shortly I will take your Honours to the two editions and show your Honours a few of the relevant differences between the two editions.
The important point for present purposes, though, is that is the extent of the authorities cited. It does not go beyond that in support of what is called “business defamation”. If your Honours come to the top of page 679 at paragraph 33, my learned friend, Mr Evatt, who was counsel also in this case, had put a case to the jury based solely on this idea of business defamation. Your Honours see in the quotation that it was put on the footing that it:
[was] likely to injure the [appellant’s] reputation in their business, trade or profession as restaurant owners. Any imputation which suggests some unfitness or incompetence for a trade, business or profession is defamatory –
Not maybe and not by reference to any other standard, but ipso facto is defamatory. The respondent, who was represented by Mr Blackburn of senior counsel, put it quite differently. At paragraph 34 your Honours will see in the last of the quoted paragraphs within 34 that:
The test of whether something is defamatory is whether the thing would tend to make ordinary decent people in the community think the less of the [appellant].
That is what I have been calling the Gardiner test or the orthodox test. Mr Blackburn, as the rest of that page shows, repeatedly put that proposition to the jury as the basis upon which the case should be decided. If your Honours come over to 39, the only qualification on that your Honours will see in the quotation within 39:
“Is the ordinary reader going to think, or decent people, going to think the less of somebody?
And then Mr Blackburn had added:
I should tell you that it is only fair to say that it can also be defamatory of somebody if you impugn their professional competence in their job.
Those words are significant because they explain why it is that on appeal Mr Blackburn never took the point that I am taking now. Indeed, when Gacic got to the High Court, this question about whether there was a separate species of business defamation was never actually at issue in the High Court.
HEYDON J: So you say Gacic was not only per in curiam, but not the subject of argument?
MR McHUGH: Yes, and that is very important when we get to this Court in Gacic. So if I can take your Honours across the page to 681 to the direction which your Honour Justice Bell gave in the case, it is recorded at 41, in the second paragraph:
Generally, defamatory means having the tendency to lower a person in the estimate of ordinary, right‑thinking members of the community -
the Gardiner test. Again, about four lines from the end of that:
Generally, defamatory means having the tendency to lower a person in the estimate of ordinary right‑thinking members of the community but equally, and importantly for this case, defamatory has the meaning of having a tendency to injure the [appellant] in his or her profession or trade by the suggestion of unfitness or incompetence.
So, your Honour, as the trial judge put it to the jury on both bases, Mr Evatt’s basis and Mr Blackburn’s basis and neither counsel seems to have complained at trial about the way in which the direction was put. If your Honours then come over the page to 46, here Justice Beazley is dealing with Mr Blackburn who appeared for the defendant’s comments. Taken in isolation, the last sentence in the comment made by senior counsel for the respondents correctly stated the meaning of “business defamation”. That is the one I just took your Honours to at paragraph 39:
However, the comment as a whole was both misleading and, in my opinion, incorrect. It did not draw the jury’s attention to the distinct nature of business defamation. In particular, the comment did not inform the jury that there could be business defamation even though the defamatory statement did not lower the defamed person in the estimate of right thinking members of the community.
So that was what was wrong with Mr Blackburn’s address and coming over to the next page at paragraph 50, Justice Beazley dealt with a criticism of the direction which had been given:
In my opinion, the direction given by her Honour was wrong. It was incumbent upon her Honour to direct the jury that in the case of a business defamation, it did not matter whether the published material lowered the person in the eyes of right‑thinking members of the community.
So what the Court held in Gacic was that there was a completely different test and that it was in fact wrong not to make clear to the jury that there was a separate standard ‑ ‑ ‑
GUMMOW J: Where does Justice Beazley give content to this expression “business defamation”?
MR McHUGH: That is the great difficulty with the case, your Honour, with respect. I will take your Honours to the closest we get, but there is no ultimate content given to it. If I can take your Honours to paragraphs 56 and 57 over the page:
The food served in any restaurant is its essential business. If the food is “unpalatable” the restaurant fails on the very matter that is the essence of its existence. This is especially so of a purportedly high class restaurant. To say of a restaurateur of such an establishment that they sold “unpalatable” food injures that person in their business or calling and because of that, is defamatory.
So it seems that the criterion is does it injure or tend to injure the person in their business. There is no reference even to reputation in that sentence which is one of the difficulties, but more importantly, I submit, there is no content given which would assist a trial judge in directing a jury and that was exactly the problem Justice Simpson had in the present case - and I will take your Honours to that eventually – as to how one directs a jury.
KIEFEL J: Could I just take you back to the words “in the eyes of right‑thinking members of the community” at paragraph 50. I do not think that is explained anywhere in her Honour’s reasons, at least the meaning that her Honour is giving to it. Do you say that in the context of her Honour’s judgment that is informed by what her Honour means by “business defamation”?
MR McHUGH: Yes. It is informed by what Mr Blackburn, as counsel for the defendant in the case, had put to the jury, which is set out back at page 679, that is the idea that ordinary decent people would tend to think the less. If your Honour is asking me specifically about the idea of right‑thinking members of the community, that is a phrase that comes up repeatedly in these cases. It is associated with a case, Sim v Stretch in England. It is, in my submission, treated as essentially synonymous with what Sir Frederick Jordan said in the Gardiner Case. I can take your Honours to all of those in due course, but it captures the idea of a cross‑section of the community. That is exactly what Justice Brennan said in this Court giving the judgment of the Court in Lamb.
FRENCH CJ: It is not limited to people of a particular set of moral standards. It is really covering the ordinary, reasonable person when we ‑ ‑ ‑
MR McHUGH: In fact, if it will assist your Honour, I should go to Lamb now.
KIEFEL J: No. I will not take you out of your course, but I think it is misunderstood sometimes, that phrase.
MR McHUGH: If it is meant to represent ‑ ‑ ‑
KIEFEL J: A narrower class.
MR McHUGH: A narrow class, it is subject occasionally to academic criticism and criticism in the judgments. But it is not on that basis that I am suggesting it should be understood. It is not the sense in which Sir Frederick Jordan used the concept of ordinary decent people in the community. It is not the sense in which Justice Brennan used it in Lamb.
GUMMOW J: The trouble is, the ordinary decent people – I am not disagreeing with you at all – might not know enough about the particular profession. To say the solicitor does not know the first thing about fiduciary duties may not strike the ordinary person as much.
MR McHUGH: That is why a case of that kind tends almost always to be pleaded as a true innuendo case. True innuendo being the situation where the natural and ordinary meaning of the words does not convey to the ordinary reasonable reader the particular meaning. But when it is published to a person who is aware of an extrinsic fact, that is, extrinsic to the article, which adds the extra dimension, the classic case is if you say X spends a lot of time going to 57 Smith Street, that says nothing. But if you know that 57 Smith Street is a brothel, it has quite a different meaning.
KIEFEL J: This is Lewis v Daily Telegraph, Tolley v Fry?
MR McHUGH: All of those cases.
KIEFEL J: The point there made about true innuendo may be of some relevance in an understanding of why it can still work that the jury applies the test of an ordinary reasonable person because they are given the information as an extrinsic fact, so there is no need for a narrower view from a narrower class. It simply relates to the jury just being better informed by reference to the extrinsic fact.
MR McHUGH: To build on what your Honour has put to me, it is important to keep in mind that there are two dimensions to this. The first is what does it mean and the second is, is it defamatory? As to the first dimension, the extrinsic fact assists the jury to understand what the thing meant to the recipient, but as to whether it is defamatory, the jury is expected to apply the standards of society as a whole once the matter is understood in the particular way, and that is the point Justice Brennan was getting at.
GUMMOW J: What you have just been saying in exchange with Justice Kiefel may be the key to this case. It shows the lack of necessity for any sub‑class of business defamation.
MR McHUGH: Yes, with respect.
KIEFEL J: It is understood in that way you would view the “business defamation” – just the use of that term – may focus upon, as you have just taken us to, damage to the business itself and, therefore, the wrong action, whereas, if the injury to someone’s reputation in the way of their profession or trade is understood to be an aspect of their reputation as a whole it may simply – in some cases, but not all – require additional evidence for the jury to be able to determine whether it was defamatory.
MR McHUGH: To determine whether it meant the thing that is alleged to be defamatory.
FRENCH CJ: The notion of community standards, of course, sometimes gives rise to a conflation with moral judgments and a person’s moral standing in the community. We are certainly not confined to that territory here. If you say of somebody “He is not much of a lawyer” and you are ‑ ‑ ‑
MR McHUGH: That may well be defamatory, by reference to what the ordinary person would think. It is defamatory of the plaintiff in respect of his or her business.
FRENCH CJ: That is why a return of right thinking can again slide us into that kind of moral territory. As I said, back in 1908 in Slatyer’s Case, Chief Justice Griffith equated a notion of right thinking, which he described as somewhat ambiguous, in context as – he called it “a man” – a person, I suppose of fair, average intelligence. That is the same as your ordinary, reasonable reader, I suppose. Sorry, that is Slatyer, (1908) 6 CLR 1 at 7.
MR McHUGH: That is so. Your Honour, an example of where the issue arises, to take something reasonably topical, or current, is imputations of homosexuality. There was a time in New South Wales prior to 1984 when it was contrary to the criminal law to engage in homosexual sexual acts between males, even consenting. It is not difficult to see that at that time ordinary people in the community applying whatever is supposed to be the standard of what Justice Brennan calls the “hypothetical referee” might consider it defamatory. The world has turned about very considerably in that period, and your Honour Justice Bell has given a decision in one of the Rivkin Cases to the effect that it was no longer capable of being defamatory merely to say of somebody that he was a homosexual, because community standards change. So, to come back to what your Honour the Chief Justice was putting to me, there will be some moral element involved in some cases, not all.
FRENCH CJ: In some cases. But you do not require it as a condition of characterisation of a statement as defamatory.
MR McHUGH: The ultimate question here is what is the standard to be applied? If one thinks that reputation necessarily means the esteem in which the plaintiff is held, defamation must mean that that esteem has been damaged or lowered, and the question simply is what is the criterion one applies? In Gacic what Justice Beazley seems to have been saying was, it is enough if you can show damage to the business. In my submission, there is no authority ‑ ‑ ‑
GUMMOW J: That undermines injurious falsehood, necessity for malice and special damage.
MR McHUGH: Hugely. I have struggled, your Honour, for two years now to try to think of a case that would not meet Justice Beazley’s test and which would only be actionable in injurious falsehood and I cannot think of one.
FRENCH CJ: A reputation on your submission is the necessary gateway.
MR McHUGH: That is right. Now just to return to Gacic because I will need to take your Honours to what this Court was not taken to. Paragraph 57 was very much to the same effect as what I just put about 56, that is, that it all turn on injury to the business. If your Honours turn through to 687, the issue at the top just before paragraph 73 concerned whether or not the court could substitute its own verdict for the jury’s verdict, and that was the issue in which Gacic came up to this Court. In that connection, in the last sentence of paragraph 72, Justice Beazley said:
The question whether a restaurant serves unpalatable food or provides some bad service does not raise questions of community standards of the type discussed in Cairns v John Fairfax –
which is a morals defamation case. That is the context in which members of this Court came to say things about community standards in Gacic. So I will have to come back to that when we get to this Court. If I can take your Honours down to paragraph 106 on page 688, Justice Ipp essentially agreed with Justice Beazley but had some additional comments to make about the question under section 108 of the Supreme Court Act about substituting a verdict, so I do not need to take your Honours further there. If I just come back to Justice Handley at the beginning of the judgment, at page 676 his Honour summarised what had happened and in the last couple of sentences says:
The judge should not have left the first alternative to the jury. The plaintiffs had pleaded their case only on the second basis –
that is, business defamation –
and their counsel had addressed the jury accordingly. The first basis was entirely irrelevant.
Indeed, in paragraph 1 his Honour says he had agreed with Justice Beazley. Then over at paragraph 10 on page 677, on the second question about whether it was appropriate for the Court of Appeal to substitute its verdict in favour of the plaintiff, his Honour said:
If an exception to those principles –
that is about not doing so –
were ever to be recognised in defamation cases this could occur in relation to imputations which tend to injure the plaintiff in his trade or business where general community standards are less important.
Although his Honour does not indicate in what extent or to what degree or what the criterion is for saying they are less important. So that was what happened in the Court of Appeal. Now, could I take your Honours, as quickly as I can, to three decisions which were not cited to the Court of Appeal which show what the Court of Appeal did just cannot be justified. The first is the decision of this Court in Mirror Newspapers v World Hosts 141 CLR 632.
GUMMOW J: This was on section 5 of the 1958 Act?
MR McHUGH: It was and this is the key to understanding the history because Justice Mason and Justice Jacobs give the judgment of four of the Justices and they contrast the position at common law. If I could take your Honours first to page 632 at the start of the judgment where your Honours will see just under the catch words the text of section 5 set out. This was the Code definition which had a long history in Queensland and came in in 1958 in New South Wales:
Any imputation concerning any person . . . by which the reputation of that person is likely to be injured –
which, in my submission, is the orthodox concept –
or by which he is likely to be injured in his profession or trade –
which is the injurious falsehood concept –
or by which other persons are likely to shun or avoid or ridicule or despise him, is called defamatory.
So that is the historical ‑ ‑ ‑
GUMMOW J: The third branch, that is Princess Youssoupoff, is it?
MR McHUGH: Yes. It might seem somewhat strange today, although depending – in my submission, it would have to be a question for a jury whether it is defamatory to say of somebody that through no fault of their own they have been raped. It would have to be a jury question, but it is on that shun and avoid theory, the idea being that one is essentially ostracised from society as a result of it. If I can take your Honours through to 635 where the text of the article appears. It is important to know that World Hosts was the owner of the restaurant. The heading says “Caprice Owner Declared Bankrupt” and then refers to somebody else, George Countis. The issue was, was this referring to the owner being World Hosts or was it referring to somebody else? So that is the context in which it arose. If I can take your Honours over to 637, just at the foot of the page, to see what the Court of Appeal had thought it meant. In that last paragraph:
An appeal by the defendant was dismissed by the Court of Appeal. The Court held that a jury could find that readers who believed that Countis was a shareholder or an owner of the plaintiff would understand the report to be asserting that the plaintiff was financially unsound because Countis had been declared bankrupt and thus it was defamatory of the plaintiff –
That was the reasoning in the Court of Appeal under the 1958 Act. Coming over to 638 – this is the most important portion of it – I think your Honour Justice Gummow pointed out in light of what appears at the start of the first full paragraph on the page that there was a aspect of repetition to these cases, but on the footing that we are dealing with different counsel, if your Honours come to the foot of 638. This is Justices Mason and Jacobs giving judgment also for Justice Gibbs and Justice Stephen:
Before the Defamation Act, 1958 (NSW) altered the law of defamation in that State the plaintiff had to prove at common law that the defendant published to a third party a statement about the plaintiff of a kind likely to lead the recipient as an ordinary person to think the less of him.
That is the orthodox Gardiner test –
The essence of the action in defamation was that the publication of defamatory matter operated as a disparagement of the plaintiff’s reputation.
Your Honours will frequently see reference in these cases to the concept of disparagement, but, in my submission, it means exactly what Justices Mason and Jacobs said, that it is something that tends to make the reasonable reader think less.
Consequently, malicious statements which injured a man’s business or his goods but did not disparage his reputation were not actionable in defamation though they were actionable as injurious falsehoods . . . But a plaintiff whose reputation was disparaged by a defamatory statement could recover as damages any business loss –
Entirely unsurprising. That paragraph is, with respect, entirely contrary to the approach taken by the Court in Gacic because the central proposition is that it ‑ ‑ ‑
GUMMOW J: Was the Court of Appeal referred to World Hosts?
MR McHUGH: No. The Court of Appeal was not referred to any of the cases I am about to take your Honours to.
FRENCH CJ: Or Sungravure either.
MR McHUGH: I have skipped over Sungravure which is the first in High Court sequence.
FRENCH CJ: That is just Justice Mason is really pickup what he said in Sungravure.
MR McHUGH: Yes. What your Honour the Chief Justice puts to me is correct. If your Honours then come to 640 about point 4 on the page:
But the decision of this Court in Sungravure Pty Ltd v Middle East Airlines Airliban SAL shows that the Defamation Act, 1958 did not require that an imputation to be actionable should disparage the plaintiff’s reputation. It was enough that –
and then this is really a paraphrase of section 5:
Consequently, when a report defamed the owner of a named business, without naming him, and the imputation was likely to injure that business, it was enough in our opinion for the plaintiff to prove that he was the owner –
and that is what is so fundamentally different.
Justice Aickin - I can take your Honours very quickly to page 643 in the middle of the page, the second of his Honour’s paragraphs states that the 1958 Act effected some ‑ ‑ ‑
GUMMOW J: The top of 641 of Mirror Newspapers 141 CLR may be important too. About line 6:
But in the law of defamation the expression “natural and ordinary meaning” ‑ ‑ ‑
MR McHUGH: Yes, includes ‑ ‑ ‑
GUMMOW J: It goes on to refer to Lewis v Daily Telegraph.
MR McHUGH: There is a point about extrinsic facts. I should take your Honours to the foot of page 641:
With respect to the members of the Court of Appeal, who all thought otherwise, we do not think the plaintiff’s case as presented was one of innuendo arising from extrinsic facts. We exclude the fact that the plaintiff was the owner of the restaurant for reasons which we have already given. Once that is excluded there are no extrinsic facts on which the plaintiff relies to support the imputations.
Then at the foot of page 642 about five lines from the end:
Consequently, although we agree with the Court of Appeal to thinking that the report was capable of bearing the defamatory meaning put to the jury, we do so on the footing that it is not a special or secondary meaning depending on extrinsic facts, but is one which is capable of arising on the natural and ordinary meaning of the words used.
Importantly, that is all in the context of the statutory definition of what “defamatory” means. Coming back to 643 and Justice Aickin, in the middle of the page his Honour pointed out that the Act “effected some fundamental changes in the law of New South Wales” and referred to Sungravure and then in the middle says:
At common law the essence of defamation was the publication of a statement containing imputations which reflected adversely on the plaintiff’s reputation or character either personally or in his trade, profession or business.
Over the page at 644 in the middle of the page there is a paragraph that begins, “The decision in the Middle East Airlines Case”, which is Sungravure. If your Honours come down about six lines:
At common law the position had been that statements which injured a man’s business, but did not reflect on his reputation might in appropriate cases be actionable as “injurious falsehood”, but were not defamatory.
Then his Honour makes the point that the 1958 Act subsumed the two separate concepts under a single statutory notion. So that was a case under the 1958 Act but which contrasted the position at common law. Can I take your Honours next to Dawson Bloodstock Agency v Mirror Newspapers, [1979] 1 NSWLR 16. It is a very short decision of Justice Begg. This was after the 1958 Act had been repealed. The 1974 Act restored the common law position. If I can take your Honours to page 17 first, in the middle of the page his Honour pointed out in argument that:
the matter raised important considerations of the effect of the Defamation Act, 1974 for the first time . . .
The plaintiff’s statement of claim relies on the publication . . . in two editions of the defendant’s newspaper, of an article dealing with a virus disease affecting bloodstock horses which represented a serious threat to the breeding industry and which, it was alleged, forced the closure of Dawson Stud.
Your Honours see there is a reference to Sungravure in the middle of the next paragraph, and then, at the paragraph that begins next to point G on that page:
The Sungravure case established that the Defamation Act, 1958 expanded the common law concept of defamatory matter -
and the very words that I am pointing to, which your Honours will recall are essentially the words Justice Beazley used in Gacic to say what the test was:
without it being necessary for the imputation to relate to some act or conduct disparaging of the plaintiff -
which means to think the less. Over the page, his Honour says the common law was restored and then, at the paragraph that begins at letter B:
In my opinion, it is clear that that new Act removes the expansion of the common law . . . I agree with the submission made by Mr. Nicholas . . . that it is now no longer actionable merely to publish an imputation of a person by which he “is likely to be injured in his profession or trade”; and that the common law notion of “disparaging imputation” referred to by Mason J. . . . is now the relevant law. Applying these considerations to the articles complained of in the present action, in my judgment it is not actionable merely to assert that the breeding stud was forced to close by reason of a highly contagious and dangerous virus. It would be necessary to allege carelessness or incompetence on the part of the owners or managers, that is, to be actionable there must be a publication of material which is disparaging to the reputation of the persons concerned. Their reputation must be injured by the calling in question of their character or their actions.
Just one other judgment I will take your Honours to, which was not referred to in Gacic but which your Honour Justice Gummow referred to in the High Court in Gacic and which we handed up this morning, is Boyd’s Case. Do your Honours have Boyd there – Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449. This is a decision of Justice Hunt, who upon any view would be regarded as one of the great authorities in this area. Your Honours will see on page 451 it concerned Les Boyd, who was a famous professional football player. The article, in paragraph (2) of the judgment, is headed “BOYD IS FAT, SLOW AND PREDICTABLE”. I will not take your Honours through the whole of the history of it. If I can take your Honours over to 452, to the foot of the page there is a paragraph that begins:
(11) To be defamatory of the plaintiff, the imputation relied upon must be such as is likely to cause ordinary decent folk in the community, taken in general, to think the less of him: Gardiner . . . At common law, in general, an imputation, to be defamatory of the plaintiff, must be disparaging -
which is this concept of thinking the less. There is then reference to what happened in Sungravure and then, about five lines down:
I say that this is “in general” the position, as the common law also recognizes as defamatory an imputation which, although not disparaging, tends to make other person “shun or avoid” . . . as well as an imputation that displays the plaintiff in a ridiculous light -
which is exactly the proposition that I have opened to your Honours. His Honour then goes on to apply those tests. If I take your Honours just quickly through to 454, at paragraph (21) on that page, the defendant had submitted:
that to say of a professional footballer that he is unfit by reason of injury to play as well as he would otherwise have been expected to play may, perhaps, be injurious to him in that occupation as a professional footballer; but it does not affect his reputation and cannot be defamatory -
There is reference to a New Zealand decision, Henderson v Thompson. His Honour Justice Hunt points out that it was held:
that an imputation of unfitness for any particular calling . . . is defamatory only where the unfitness is shown to arise by reason of lack of skill, or experience, or honesty, or industry on the part of the plaintiff. The imputation of unfitness is not defamatory, unless there is some disparagement of him which lowers his reputation -
Then finally in relation to ridicule over at 456 there is a paragraph that begins towards the top of the page with (33):
The plaintiff says that the matter complained of ascribes to him characteristics which are not expected of a first grade Rugby League footballer––that he is fat and slow . . . He takes the stand that, without more, the imputation is thus defamatory of him . . . He says that that reader would, nevertheless, think the less of him, because as a first grade Rugby League footballer he is in that condition.
There is then an analogy drawn with a ballerina and Justice Hunt says:
I do not see how, in either case, the description is defamatory unless that condition is shown or suggested to have resulted from some cause for which the plaintiff is blameworthy –
He says it does not fall under “shun or avoid”, it does not fall under “ridiculous” and it does not “amount to a disparagement of the plaintiff”. So the case went off on that basis.
Now, just stopping there, those three cases all involved professional people or businesses. Dawson Bloodstock was a breeding stud, Sungravure was an airline, World Hosts was a restaurant, Mr Boyd was a professional footballer. Yet, in none of those cases was it suggested that there was a separate category of business defamation to which the orthodox test did not apply.
KIEFEL J: Would it have been possible to argue in Boyd that one of the imputations was of incompetency and that he had contributed to his own obesity?
MR McHUGH: Your Honour, I would have to go back to look at the matter to see whether that was available.
KIEFEL J: But we will not reflect on Boyd so much, but is it possible in such a case where it is said simply that someone is fat, it may nevertheless reflect upon their reputation in the context of what they do, and reflect back on them personally.
MR McHUGH: I accept what your Honour puts to me and the question for the jury would be does an ordinary reasonable reader or a right‑thinking person – whatever one wants to describe the hypothetical referee as – does that person tend to think the less of the plaintiff as a result of the publication? If that test is satisfied I have no complaint.
FRENCH CJ: When you say “think the less of” you mean in terms of competence?
MR McHUGH: Whatever the aspect of reputation is. There is no doubt that one can have a reputation as a good husband, but a bad businessman or as the contrary and the question is whether or not the attack takes place in the relevant part of the reputation that the person is complaining about and then, whether this hypothetical referee would think that the publication tended to make people, by ordinary community standards, think the less.
Now, just stopping on the question of ordinary community standards, the whole point about the jury is that they are taken to understand what ordinary community standards are without evidence. That is what Justice Brennan held in the Lamb Case that I am going to come back to and that is one of the reasons why the idea that there could be a sectional test was rejected. But the position in the United States is quite ‑ ‑ ‑
KIEFEL J: May I just interrupt you there. His Honour was not putting out of account though evidence – proper evidence – of extreme facts to prove a true innuendo. He was assuming that that was understood in what he was saying.
MR McHUGH: Yes, there would be no doubt about that at all. But the way in which the issue arose was that there was evidence admitted, as is often the case, on the question of damage, which showed that among a particular group of people the imputation was particularly damaging. So it had hurt the plaintiff in his reputation in that way, but that is once liability has already been established. What Justice Brennan held is that the evidence of the opinions of those people about the effect of this imputation among a particular community, which happened in Lamb to be journalists, was not relevant on the question whether or not it was defamatory. It was only relevant to prove actual damage and that was the distinction that his Honour was drawing and that is the context in which the issue arose.
KIEFEL J: That is a distinction between the extrinsic fact and the opinion held by others.
MR McHUGH: No, it is the distinction between the use to which the evidence could be put. The evidence was admissible on damage, but not on liability in that case and so the question of extrinsic facts does not directly arise, but there is no suggestion that Justice Brennan was suggesting one cannot have a true innuendo case, which is the point your Honour raised with me.
KIEFEL J: Say in the case of the rugby league footballer, one who was overweight, it might depend upon their position in the field and what is involved in the position in the field. That would be an extrinsic fact brought before the jury to understand what was really being conveyed about their physical condition.
MR McHUGH: Yes, it is perfectly conceivable that one could have an extrinsic fact saying that somebody who plays at inside centre should not be fat and that what it was conveying in saying that was a fat inside centre ‑ ‑ ‑
KIEFEL J: His unfitness for the ‑ ‑ ‑
MR McHUGH: Incompetence, unfitness, or whatever, and then one applies the general community standards test, would ordinary people tend to think the less of him as a result? So that is the analytical framework. I had said to your Honours that I would take you to what happened in Gatley. I do not wish to spend too long on this but I do need to take your Honours to it. What we have done ‑ ‑ ‑
HEYDON J: According to Mr Evatt, the same paragraph was in Gatley from the time of the 7th edition edited by Mr Philip Lewis.
MR McHUGH: Well, it has changed in the 11th.
HEYDON J: In what respect?
MR McHUGH: I will show your Honours now. I have handed up to the Court a moment ago, before your Honours came on the bench, copies of the 10th and 11th edition. The copies have been subjected to a highlighter, the purpose of which is to indicate what is different. I cannot give your Honours a warranty they record everything and I should tell your Honours that not everything that is highlighted is relevant, but we were trying to be neutral in identifying what the differences were. Your Honours will recall that the crucial paragraph for Justice Beazley is paragraph 2.7 and if your Honours open the 10th edition to page 36 at the foot – I have to apologise, this is in small type in the way in which it has been copied – your Honours see what the original version was and those words that are highlighted towards the end seem to have come out. The crucial passage is the one on page 37 that starts in the second line:
To say of a person carrying on any trade or profession, or holding any office, that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation –
If I can take your Honours in the 11th edition to the same paragraph, which is on page 46 at the foot of the page and at the top of page 47, your Honours see the same sentence appears again:
To say of a person carrying on any trade or profession, or holding any office, that he is incompetent at it, may not lower him in the estimation of others –
and these are the new words –
in the sense that they will think less of his general character –
that is, the idea of his general personal attributes as opposed to thinking the less of him in some business sense. That was the point I was making earlier, that if one reads the passage in the 10th edition correctly, in my submission, that is the way in which one would have understood it any event when one reads the context of the whole of this section of Gatley. But the learned authors have made it clear here and the reason they have made it clear is because they also refer to Chesterton in the Court of Appeal, the very case with which your Honours are dealing at other points throughout this chapter which show that they are alive to what the problem is. I should just point out, your Honours, very quickly where that is. In the 11th edition, if your Honours come back to page 38, your Honours will see there is a large slab in the middle of the page that has been highlighted and the corresponding passage in the 10th edition was – and your Honours will see that the highlighting in the 10th edition on page 29 said:
Perhaps, therefore, there is need for a further category of defamatory words as likely to damage the claimant in his trade, business or profession.
In the 11th edition there seems to have been a retreat from that flag:
Without suggesting that there is a separate tort of “business defamation”, as a practical matter it has been thought necessary where the words denigrate the claimant’s business or professional capacity to recognize that words may be defamatory even though they in no way reflect on the character of the claimant.
Character in the sense of personal understandings, and then –
It may be that those “community standards” of “right‑thinking people” of which the jury is the ultimate guardian have less of a role in these cases and it has been suggested –
although Gatley does not endorse it –
that the correct approach is to ask –
and your Honours will see the footnote there, footnote 9, takes your Honours to Justice Hodgson’s judgment in Chesterton that I will have to take your Honours to when we come to it.
FRENCH CJ: So the bounds of your argument are that it is not sufficient to show injury flowing from the claimed defamatory statement, that is to say, injury to your business, but it is not necessary to show damage to your, as it were, moral reputation in the community. It is enough to show damage to your reputation as a competent business person, for example.
MR McHUGH: By reference to community standards.
FRENCH CJ: Which is code for what ordinary, reasonable people would think.
MR McHUGH: That is right.
FRENCH CJ: The term “community standards” gets you back to tests for obscenity and things like that, you know. It runs the risk of conflating the moral dimension.
MR McHUGH: I certainly do not mean to do that. Your Honour has put to me a few times that that has to be kept steadily in mind.
GUMMOW J: There is a certain moral dimension to it, though, because the incompetent solicitor is holding him or herself out.
MR McHUGH: There may often be. When we come to the surgeon example in this Court in Gacic, to say of somebody that he is carrying out surgeries which are potentially life threatening when he is incompetent at it must have a moral dimension. I have never had any difficulty with the surgeon example. But even if you try to think of something more neutral – say of an accountant that he does not realise that he is not as good at adding up as he should be, one is getting away from the element of holding himself out and knowing that it is wrong and then it would be a question for the jury. Does the ordinary person tend to think the less of an accountant of whom that is said?
BELL J: Mr McHugh, do you accept that the common law has always recognised that an averment that a person is incompetent in the conduct of their trade or profession is defamatory.
MR McHUGH: It is capable of being defamatory; not necessarily defamatory. It is a question for a jury, that is the tribunal of fact in any case whether in the circumstance of the publication and by reference to the understanding of ordinary people in the community the publication would make ordinary people tend to think the less. I am trying to think of an example of a job that is not necessarily highly socially valued. I can take this example. To say of somebody, “He is an incompetent thief”. Does that make ordinary, reasonable people think the less of him?
There are cases about informers. It is an example of where the right‑thinking element comes in. There are cases that say that although it might be damaging to an individual among the criminal class with whom he associates to say he has been talking to the police, ordinary, decent people in the community would not think the less of an informer because he is doing his social duty. That is one of the reasons why it has to be a cross‑section of society as a whole.
FRENCH CJ: The term “snitch” is uncomplimentary, but not for damage reasons.
MR McHUGH: Correct, your Honour, with respect. Yes. To come back to your Honour’s question, it is certainly capable in most cases of being defamatory, but the difficulty is the idea that as soon as one identifies the imputation as one of incompetence it is automatically defamatory because if that were the case the jury would have to be directed that as soon as they find that it conveys incompetence it is defamatory. Your Honours will recall that in Gacic in my submission one of the reasons why that case went wrong was because the jury rejected the incompetence imputation. So the plaintiff was left with two imputations that did not actually spell out incompetence and that were quite removed. That is why, with respect to my friend, he ran in the Court of Appeal to this idea of business defamation, which had not been heard of since the 1974 Act.
I was not going to take your Honours to everything in Gatley. I should point out that the scheme of the chapter is – and I will work off the 11th edition – first of all to make some general remarks. Then at page 41 in the 11th edition in what is headed “Section 1. What is Defamatory” to refer to the old formulation of “Hatred, contempt or ridicule” which everybody accepts is too narrow. There is then an analysis of what “ridicule” might involve in the intervening pages. At 2.6 your Honours will see the concept of shunning and avoiding and then at 2.7 we have the paragraph which was at the heart of Gacic.
Then if your Honours come over to page 50 in the 11th edition, at 2.10 there is a section on “Standard of Opinion” and this has not been changed so far as we have been able to determine. Gatley says:
Though the issue may need to be further considered by the courts, the present position is that to be defamatory in English law an imputation must tend to lower the claimant in the estimation of right‑thinking members of society generally.
That was in the 10th edition. It cannot be reconciled with what I describe as a misinterpretation of paragraph 2.7. I will not take your Honours through all of the ins and outs and twists and turns. Then there are some references to Gacic and to the Court of Appeal in Chesterton throughout and, as I said, not everything that is highlighted is relevant, it is simply what is different. Interestingly, if I can take your Honours to page 64, your Honours will see at the top of the page, four lines down:
We may have reached the stage where it would be proper for a judge to withdraw from the jury an allegation without more that a woman was cohabiting outside marriage or that a man was a practising homosexual –
And, interestingly, in the earlier version at page 53 of the 10th edition they had said:
We have perhaps not yet reached the stage –
So that shows that the authors of Gatley themselves are conscious of the way in which it has evolved.
GUMMOW J: I never thought of Gatley as a bible in this area.
MR McHUGH: No, of course not.
GUMMOW J: Gatley is now in the 12th edition which is showing some signs of blockage of the arteries. Every case has to be put in there and you lose your critical edge about saying whether you think you agree with it or disagree with it.
MR McHUGH: The other thing is that the reality is that the law of defamation in the United Kingdom has been heavily affected by developments in Europe and somewhat faithfully ‑ ‑ ‑
GUMMOW J: To their credit, they are trying to incorporate non‑English cases.
MR McHUGH: They are and New South Wales, for better or worse, has long been regarded as perhaps a capital of this subject and it is not surprising that the cases keep coming through. But what your Honour puts to me is entirely correct. I should point this out though. In the footnote to 2.7 back in the 10th edition your Honours will recall there was that sentence that has caused the problem. Footnote 70 is the authority for the proposition and footnote 70 directs the reader’s attention to paragraphs 2.26 and following. I will not take your Honours through it in any length, but paragraphs 2.26 and 2.27 have also been reworked a little bit in the 11th edition and your Honours will see in the highlighting on page 72 of the 11th edition:
It is defamatory of a surgeon to say that although he is of excellent character he is “past it” and his hands shake; but it is not defamatory of a musician to say that he is at present too ill to fulfil his engagements.
Your Honours will see the footnotes take us back to Gacic and analysis of those cases. So, in my submission, what the authors of Gatley have done is realise they have been misunderstood in the 10th edition and tried to make things clearer in the 11th, all the while maintaining the necessity that the standard of opinion is what I have been calling the Gardiner test.
GUMMOW J: Pollock said:
It is actionable to charge a barrister with being a dunce, or being ignorant of the law; but not a justice of the peace, for he need not be learned –
at all. A comment on the English system, perhaps, in the Thirteenth edition of Pollock at page 251.
MR McHUGH: I was about to say that case may reflect the time in which it was decided.
GUMMOW J: Yes, but coming back to what Justice Bell said to you, Pollock said “the words complained of:
must either amount to a direct charge of incompetence or unfitness, or impute something so inconsistent with competence or fitness that, if believed, it would tend to the loss of the party’s employment or business.
MR McHUGH: Might I ask of your Honour when that was decided? Is it before ‑ ‑ ‑
GUMMOW J: It is the last edition Pollock wrote – 1929.
MR McHUGH: That may be difficult to reconcile with Ratcliffe v Evans. I was hoping to avoid taking your Honours to that decision. It is 1892 and I will not take your Honours through it, but that is the case which makes clear that in English law it either has to be defamatory of you, and if it is not defamatory of you, you have an action in injurious falsehood by analogy with slander of title in those cases, and the crucial element being the need to prove actual damage. There are cases from before Ratcliffe v Evans that are sometimes difficult to accommodate entirely into the framework that I am describing, but in my submission, at least since the 20th century and I understand your Honour Justice Gummow says that is a work from the 1920s, but at least since Gardiner’s Case in New South Wales, in my submission, you have to be able to show that ordinary people would think the less or fall within “shun and avoid” or “ridicule” which may be in a sense dying. Shun and avoid, at least, may be dying as a class. It is certainly not the mainstream of defamation.
BELL J: Going back to history, was it not the case that an imputation of incompetence in one’s trade or profession was actionable without proof of damage in the same way that an imputation that you had the French pox was? If one is to distinguish Ratcliffe v Evans it is that any imputation that is malicious and false and damages you in business may be an injurious falsehood, the distinction is between an assertion that damages your business and an assertion that goes to your competence to conduct your business.
MR McHUGH: Your Honour, I am not sure that that is right. I would like to consider it over the luncheon adjournment, but the history was there were some slanders which were actionable without proof of special damage, but very many required proof of special damage and it may be that what your Honours ‑ ‑ ‑
FRENCH CJ: I though reflection on your professional capacity was one of those, was it not?
MR McHUGH: But that would mean only that one did not have to prove special damage, not that the test of whether or not it was defamatory was any different. That is the point I think I might want to make after lunch.
BELL J: It is just that when you opened, you drew a distinction between those categories of case in which the Gardiner test applies and some categories such as the “shun and avoid” class. All I am raising with you is whether historically an imputation going to competence to carry out a trade or profession was not in the same line of territory as the “shun and avoid”.
MR McHUGH: I will check that, but your Honour I think the answer to that is going to be no. In fact, there had been an issue in the 19th century about whether, to come back to your Honour the Chief Justice’s issue, whether or not one had an action if the publication went beyond one’s moral character at all. Decisions like Capital and Counties Bank v Henty make clear that you can sue in defamation even though the relevant sector of your reputation is your business reputation. But I do not think it goes quite as far as what your Honour was putting to me. I think the history in fact was running in the opposite direction. But I will look at that over lunch and see what the answer is.
FRENCH CJ: It is a long time till lunch.
MR McHUGH: If I do not get that far I may have to put in a note.
KIEFEL J: In the case of imputations of incompetence it would be possible to claim a special damage, the loss to your earnings though as a result of that even though it reflected upon your reputation.
MR McHUGH: Exactly. Once one gets over the liability threshold a whole world of damages conceivably opens up and there is often evidence of the very kind your Honour has described. Particularly in employment cases, if somebody shows that they lost a particular job and have been unable to replace the income stream that is exactly what happens.
KIEFEL J: So in one sense it may be that the notion of business defamation elides the two notions of liability and damage and that is one of the points of distinction.
MR McHUGH: My great criticism of what happened in Gacic is that if the proposition is only that it is necessary that there be a tendency to injure you in your business, then there is nothing left of injurious falsehood but really something which always required special damage changes completely.
GUMMOW J: Section 8 of the New South Wales 1974 Act provided that slander is actionable without special damage.
MR McHUGH: Yes. That is the reason why I am struggling to answer your Honour’s question, because in the whole of my time it has been a distinction that has not mattered.
BELL J: I accept that. I am looking at the history of it.
MR McHUGH: I know. I am only apologising for my ignorance, but I will certainly look at the question. I should take your Honours to what happened in Gacic 230 CLR 291 in this Court. Before I embark on this, as I said to your Honours before, leave was not sought or granted in that case on the question of business defamation, it was only on the question under section 108 of the Act about substituting a verdict. It was common ground that something called business defamation existed, and there was no argument on it.
I might start with Justice Kirby, not only because he is the one most helpful to me, but also because he is the one who sets out the history of what had happened most clearly. If I can take your Honours to page 315, at the foot of the page in paragraph 74:
Business defamation: It was also common ground that a class of defamation exists (described as “business defamation” (89)) where published material conveys defamatory imputations that injure a plaintiff in the plaintiff’s business, trade or profession.
Upon one view, an injury to a business . . . amounts to nothing more than a particular form of damage ‑
The point your Honour Justice Kiefel has been making -
suffered in consequence of the general wrong of defamation. The tort itself is constituted by the lowering of the subject of the publication in the estimation of ordinary persons with whom the subject has dealings, whether such dealings are personal, societal, occupational or otherwise.
That is essentially the Gardiner test. His Honour, in paragraph 76, although this is all obiter in light of what his Honour has just said ‑ ‑ ‑
HEYDON J: And dissenting.
MR McHUGH: And your Honour Justice Heydon points out dissenting - I will have to come back to that question, but his Honour expresses his own view that it is arguably an illustration of an error to elevate a particular category into a species of the wrong as distinct from simply an instance of its operation. Although there does not seem to have been argument on this, his Honour had looked into the question and at paragraph 77 dealt with the 1958 Act and the statutory definition under section 5.
Then over at paragraph 78 his Honour referred to Sungravure at the top of that paragraph. In paragraph 80 his Honour points out that the 1958 Act was repealed. Then at 81 his Honour says in the fourth line:
Given the agreement of the parties on this issue, I will not attempt to re‑express the law of defamation at common law upon which the respondents relied. Any such re‑expression or re‑conceptualisation must await a case in which the grounds of appeal require this Court to address the relevance to the cause of action (as distinct from the damage) of the particular capacity or relationship in which the harm to reputation is said to have been done.
and here we are. Paragraph 82, again, his Honour made clear that these matters were not at issue and then in paragraph 83 his Honour pointed out one of the difficulties that Justice Simpson experienced in this case, that:
One particular problem [with] . . . “business defamation” is identifying the relevant audience in whose eyes the complaining party’s reputation has then been diminished. Does it remain all ordinary people in the community, “taken in general” –
which is the Lamb test –
Or, in the case of business defamation, is it confined –
His Honour then goes and gives examples. In the middle of 84, just after the reference to The Sydney Morning Herald, his Honour again says:
On the premise that has been adopted, I accept, as the appellants do, that a misdirection occurred.
So his Honour was critical of the idea, but said that was the way the case was proceeding. I should take your Honours back, then, to the decision of the Chief Justice and Justice Crennan, page 294. In light of the agreement between the parties it is hardly surprising that their Honours opened their judgment in paragraph 2 in the way in which they did:
The case concerns that form of defamation which involves injury to business reputation, that is, the publication of imputations that have a tendency to injure a person in his or her business, trade, or profession.
That is essentially Justice Beazley’s formulation. Your Honours will see there is no particular reference to authorities supporting that as a test if it is intended to be a statement of a test. As I say, it is not surprising, given the way in which the case was conducted, that that is how their Honours approached it.
GUMMOW J: What they seem to be concerned to do in that paragraph is to dispel the notion of moral shortcomings, that is all.
MR McHUGH: Yes, and if it is understood that way, it is not propounding an alternative test.
FRENCH CJ: At the trial in this matter counsel expressly asked the judge to make a direction by reference to paragraph 2, I think Mr Rasmussen, and that particular example, in fact, in paragraph 2 was picked up in the judge’s ‑ ‑ ‑
MR McHUGH: There was some criticism made of me for not having run this point at trial. I suppose I will have to show your Honours that I did, in due course, that is, that I pressed this point, that her Honour should not give what I would call a Gacic direction. Towards the end of that paragraph there is the surgeon example, and just taking the sentence ‑ ‑ ‑
GUMMOW J: I am not sure that is a good example, actually. It seems to me to be morally delinquent for some surgeon with bad eyesight to go around operating on people.
MR McHUGH: I could not agree more with what your Honour puts to me. The one thing I would say is, if your Honour ‑ ‑ ‑
GUMMOW J: That might be criminally negligent.
MR McHUGH: If one looks up five lines from the end, “If, however, X were a surgeon”, just focusing on that idea, if that were stated in the publication, then it would be a publication in the natural and ordinary meaning that your Honour’s meaning would be conveyed. If it was known only to some people and not stated in the publication that he was a surgeon, then it would be a true innuendo case. That comes back to your Honour Justice Kiefel’s point about meaning. That affects the meaning but not whether or not it is defamatory.
GUMMOW J: The difficulty is in paragraph 2 that I think induced Justice Hayne and myself to stay out of this.
MR McHUGH: Yes, and I am coming to that shortly. I should take your Honours to page 295, about eight or 10 lines down in the paragraph 6:
In brief, the Court of Appeal held that the combined effect of counsel’s address and the trial judge’s directions was to mis‑state the nature of business defamation –
So what their Honours are doing is setting out what had happened below and then, coming back to the surgeon example, although contrary to what your Honour Justice Gummow has put to me, their Honours said:
even though that would not reflect badly on his character or his personal conduct.
GUMMOW J: Yes, well, I just do not agree with that. You can read it out to me.
MR McHUGH: No, I am saying that if their Honours approached it in that way it gives support to what your Honour has just put to me about paragraph 2, that they are focusing on the idea about personal character. The fact that the example ‑ ‑ ‑
GUMMOW J: I am going to approach this case on the basis that paragraph 2 does not represent any useful contribution to this appeal.
MR McHUGH: May it please the Court.
GUMMOW J: My colleagues may not have that view. I am just telling you what my position is.
MR McHUGH: May it please the Court. I should take your Honours quickly to paragraph 9 on 296 where their Honours – bearing in mind that the issue was the issue about section 108 of the Defamation Act and the question whether the court could substitute its verdict – in that context their Honours said at paragraph 9, “This reasoning appears to us to be correct”, referring to what had happened below. But, as I put to your Honours, it is limited in that way. Then at 298 at the end of paragraph 13 at the foot of the page:
There were not, as was argued, “community standards”, bearing upon the question whether to say that a restaurant has unpalatable food and bad service has a tendency to injure the proprietors in their business –
Now, that is a question about which one might debate, but it is in the 108 context. Your Honour Justice Gummow and Justice Hayne deal with this at page 309 at paragraph 53.
FRENCH CJ: Just going back to that passage for a moment, the reference to the statement:
There were not, as was argued, “community standards”, bearing upon the question whether –
et cetera, again, that shows the difficulty of using terms like “community standards”, I suppose, does it not?
MR McHUGH: Yes, it does and it is both that point and the fact that if one has embraced the proposition that the question is whether it “has a tendency to injure the proprietors in their business” ‑ ‑ ‑
FRENCH CJ: You were calling for a community standards test in this case, were you not?
MR McHUGH: Yes, but community standards understood in the way in which Justice Brennan used the term in Lamb, which is social, moral, the whole range.
FRENCH CJ: Properly subsumed in the ordinary reasonable reader.
MR McHUGH: As the hypothetical referee.
FRENCH CJ: Yes.
MR McHUGH: Your Honour Justice Gummow at page 309, paragraph 53:
In this Court, the appellants have not demonstrated any error in those critical passages.
GUMMOW J: It was not me. It was a joint judgment, was it not?
MR McHUGH: I am sorry, yes it was. It was your Honours, Justice Gummow and Justice Hayne:
The respondents properly emphasise that the fundamental difficulty here in the path of the appellants lies in the concept of “tendency” which pitches the common law test at a fairly low threshold. It is sufficient that the imputation “be such as is likely to cause ordinary decent folk in the community, taken in general, to think the less of [the plaintiff]”.
The authority that your Honour has given is Boyd. So your Honours, Justice Gummow and Justice Hayne, in my submission, either embraced the orthodox test, or to use your Honour’s phrase “stayed out of it”.
GUMMOW J: We were just trying to decide the case on the section.
MR McHUGH: Then Justice Kirby was next. The final judgment is the joint judgment of your Honours, Justice Heydon and Justice Callinan. If I can take your Honours to page 351. I should make this clear that the reason why I am constraining to do this is that the court below in the present appeal ‑ ‑ ‑
GUMMOW J: I understand that.
MR McHUGH: ‑ ‑ ‑ felt that it was bound in some way by comments made in this Court in Gacic. Page 351, again in the context of the section 108 issue, your Honours, Justice Heydon and Justice Callinan referred to the relevance of community standards at paragraph 189 and particularly 190:
We would reject that submission. Business capacity and reputation are different from personal reputation. Harm to the former can be, as here, inflicted more directly and narrowly than harm to a person’s reputation. A person who does not have an admirable character may be a very good restaurateur.
Just stopping there, your Honour, all of those propositions are consistent with the general test, in my submission. They are simply identifying that there are different aspects of reputation.
It might be possible to say things about him or her personally that are not defamatory, but not about that person as a restaurateur in relation to the conduct of the restaurant. Restaurant standards rather than community ones are the relevant standards in that situation. No community standard or value could obliterate or alter the defamatory meaning of the imputations in this case. It is unimaginable, in any event, that the estimation of the respondents in the mind of any adult person, let alone a reasonable reader, would not be lowered by a statement that they sold unpalatable food and provided bad service –
So in my submission, your Honour is deciding the case that whichever test is applicable, whether it is orthodox test or the narrower test that was propounded in Gacic, on either basis the same result would apply. Undoubtedly your Honour was expressing a preference, as was Justice Callinan in that decision, for restaurant standards as the applicable ones and the submission I make is the issue about business defamation was not before the Court. The High Court in this case was not taken to any of the authorities that I have taken your Honours to this morning and again, to the extent it is relevant to the disposition of the section 108 issue – I have to accept that it is ratio – but to the extent that it is a comment upon an issue that was not before the Court, in my submission, it is simply obiter in the absence of argument.
HEYDON J: It is dealing with an argument set out in 189, but it is not the argument before the Court today.
MR McHUGH: Yes, your Honour, I think I have to accept that - which had to do with community standards, which does not seem to have been well defined. I should now take your Honours to what happened at trial in this case and the way in which the jury was addressed by my friend. In the appeal book at page 31, about line 25, my friend opened:
Now I said it is the first part of a defamation action. Defamation is about reputation. It is about what right thinking members of the community think about a person or your business or, in this case, your reputation as a journalist. Are things said about you that would tell against your reputation, your business reputation as a journalist or your standing in the community among right thinking members of the community.
My friend seems to have been putting it on both bases, but perhaps without distinguishing clearly, and then in the next paragraph it becomes clearer. In the third line:
Any imputation or meaning which suggests unfitness or incompetence for a trade or profession is defamatory.
So that is being put as a necessary conclusion.
Any imputation which causes persons to shun or avoid another or exposes a person to ridicule . . . is defamatory and an imputation which causes right thinking members of the community to think less of you is defamatory.
These seem to be being put as different tests. Then there was evidence called. If I can take your Honours through to appeal book 72, your Honours will find the jury questions at appeal book 161. Your Honours may find it easier to follow parts of the addresses by reference to the questions because the jurors by this stage of the hearing are given a copy of the questions so they can follow. At the top of page 72 in the appeal book, at about line 5, my friend said:
Now I want to deal with question 2.
Question 2 is whether or not the plaintiff has established that the said imputation was defamatory of him. My friend goes through imputation (a). Your Honours will see at about line 20 that he puts the orthodox test. Then in relation to imputation (b), which is “the plaintiff is a bombastic, beer bellied buffoon”, he puts, at line 30, the business defamation test:
if you thought that would injure him and his professional reputation as a journalist –
then it is said that the same applies to (c). That is at line 32. In relation to imputation (d), which is not referred to as (d) but it is the one that appears in the quotation at about line 37, there does not seem to have been a reference to the test, or perhaps that was in relation to (c). At line 40 it was given both tests:
that would affect his professional reputation as a journalist and people would think less of a person who is fired.
In relation to (e) there is not much reference to a test. Over at 73, at line 27 or so:
It would injure the plaintiff in the esteem of right thinking members of the community.
So that is the orthodox test. Then at appeal book 74, at about line 47, in relation to imputation (h), which was a true innuendo imputation, just before line 50:
Well, that is clearly likely to damage the reputation of the person both in the eyes of the community and perhaps professionally.
So it is being put that there are two different possible tests. Then at the foot of page 75 – I will come back to the concept of abuse later – but in the second‑last line:
So even if there is some abuse, these words spoken by Mr Laws, are they likely to affect adversely, to injure the reputation of the plaintiff, either in the eyes of right thinking members of the community or in his trade or profession as a journalist?
So at the very least this must have been confusing but, more particularly, my friend has put both versions to them.
I will need to come back in a different context to the way in which I addressed them. I addressed them on the orthodox test basis. If I can take your Honours through to the summing‑up.
HEYDON J: You can trust the two tests. You defend the reasoning of Justice McColl, who dissented in the Court of Appeal?
MR McHUGH: In large measure, yes.
HEYDON J: She says in paragraph 191 at page 239 that:
the jury should, in my view, be directed that the question whether the imputations are defamatory turns on whether the hypothetical referee . . . would conclude that they tend to injure the plaintiff’s reputation in the relevant trade, business or professional respect.
Is that not what you are calling the second of Mr Evatt’s two tests?
MR McHUGH: It is close to what my friend, Mr Evatt, put and that last step in her Honour’s conclusion has to be understood in light of what her Honour said earlier about community standards and I can take your Honour through that but I would not defend that as being a sufficient direction. In my submission, you would have to go further and say it is by reference to – as your Honours see – whose standards are taken to reflect those of ordinary right‑thinking people as a necessary requirement in every case.
Now, if my friend is understood as having addressed them on a rolled‑up basis with all of those concepts in together, he may have been getting close to that, but if my friend is understood as having addressed the jury on the basis that there were two alternative approaches, one being whether ordinary people tend to think the less, and the other whether it tended to injure one in one’s business, then the necessary connection to ‑ ‑ ‑
HEYDON J: Not in one’s business – one’s reputation, in the professional or business respect?
MR McHUGH: That then begs the question about what reputation means and what the measure of it is because merely to say to a juror in a direction, “If you understand this to injure his reputation you should find it is defamatory” does not give them adequate guidance as to what the criterion is for deciding whether or not it is defamatory.
HEYDON J: I gather neither you nor Mr Evatt handed a form of words to Justice Simpson as the correct direction. Rather you addressed.
MR McHUGH: I do not think I did, and I know that my friend, Mr Rasmussen, on the next morning after we had the argument handed up a document and I just do not recall whether it had a form of words on it or not.
HEYDON J: In your submissions, did you, as it were, “propound the precise formula” that the judge was invited to adopt?
MR McHUGH: I think I did. I was going to take ‑ ‑ ‑
GUMMOW J: We have to be sure about that, do we not?
MR McHUGH: Yes, and I am going to take your Honours to what exactly I put to her Honour. What I wanted to do ‑ ‑ ‑
HEYDON J: Hindsight is a marvellous thing in jury trials.
MR McHUGH: I accept entirely the difficulty with that. I had intended to come to what I put to her Honour in a different context later in the argument.
HEYDON J: Take it in your own order.
MR McHUGH: I will undertake to come back to that in due course. The way in which her Honour summed up to them appears first at 138 in the appeal book. In paragraph 19 of the summing‑up her Honour puts the orthodox test:
If you say yes in answer to that question to any of the imputations, then you ask yourself was that imputation defamatory, that is did it damage the reputation of Mr Chesterton. In that respect the test to apply is the test of ordinary reasonable members of the community. If the ordinary reasonable member of the community considered that the imputation was defamatory of the plaintiff, Mr Chesterton, then that imputation is defamatory of him. I will refine that in a little while, but that is the general test.
There is no criticism of her Honour in respect of that at all. Over on page 140 at paragraph 25:
Now I told you that I would say some more about the meaning of defamatory and I can do that fairly quickly. It means something that is disparaging, something that is derogatory, something that is damaging to reputation and this is important, something that would make ordinary, decent members of the community think less of the plaintiff.
So that again is the orthodox Gardiner test that I had been propounding. If your Honours then come through to 145, at paragraph 54:
There is something I should have mentioned but I think I have lost my notes. I have mentioned something that is defamatory is something that is disparaging or derogatory to reputation and you measure that against community standards. That is, what would ordinary decent people in the community think? That is the test that you apply in relation to the ‑
Your Honours, it says “sixth imputation”. It was ultimately common ground in the Court of Appeal that that should read “six”.
You listen to the broadcast. You ask yourselves what that would have conveyed to ordinary reasonable listeners, and in doing so, you apply the standards of the community. What would ordinary decent people in the community have drawn from that? And you also apply that to whether or not it was defamatory, you apply the standards of ordinary decent members of the community.
I have no difficulty with any of that; that was exactly what I was asking her Honour to do. Paragraph 56:
In other words, by reference to those people, would any of these imputations, if conveyed, have damaged Mr Chesterton’s reputation?
At 57 the problem arrives.
There are two different ways in which a person can be defamed. One is in his personal reputation. Somebody might publish something about a person that injures him in his personal reputation; in other words, right-thinking members of the community would think the less of him because of what was published.
Those words, “in other words” show that her Honour is saying “for personal reputation this is the test” and there is a strong congruence between those two in what follows. Paragraph 58:
There is another way in which a person can be defamed. It was adverted to by Mr Evatt as “business reputation”. In fact, in this case, it probably would be more accurate to say Mr Chesterton claims to have been defamed in in relation to the practice of his profession as a journalist.
Interestingly, to come back to your Honour Justice Heydon’s point, not in his reputation as a journalist but defamed in relation to the practice of his profession as a journalist. These imputations really divide into those two categories. So her Honour is putting to them that there are two different types of defamation. In the next line in 59 it was agreed that the reference to (b) should have been a reference to (e), so:
Imputations (a), [(e)], (f), (g) and (h) are all the first kind, that is they are imputations of something personal about Mr Chesterton’s personal reputation. If you decide that any of those imputations have been conveyed by the broadcast, then you ask whether that imputation would be regarded by ordinary right‑thinking members of the community as defamatory, as damaging to his reputation.
Paragraph 60 - we are now back to the other category:
Imputations (b), (c) and (d) are imputations concerned with Mr Chesterton’s reputation in his profession as a journalist ‑ ‑ ‑
HEYDON J: Which needs to be read with your criticism of paragraph 58.
MR McHUGH: Yes, in my submission:
and in that respect you ask yourselves whether the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist.
FRENCH CJ: Do you say that to the extent there is something identifiable as a business reputation, we are really just talking about a particular aspect of personal reputation.
MR McHUGH: Yes. In respect of that, there is no separate test. So there is no difficulty with her Honour saying there are different aspects to one’s reputation and some of these imputations focus on some aspects and others on other aspects, but the difficulty is that her Honour’s direction clearly, in my submission, and this was accepted by the Chief Justice below, is distinguishing between two different kinds of defamation and, although she does not say it explicitly, it is absolutely clear implicitly that the community standards test, as I am calling it, the test referred to in 57, is excluded for the business defamation imputations. The test that they are given is the one in 60. In that respect you ask yourselves whether the imputations, if conveyed, damaged him in that respect – that is, in the practice of his profession as a journalist – not whether ordinary people would tend to think the less of him.
The reason why this is such an acute issue really comes from the imputations themselves. If I can take your Honours to the jury questions. If your Honours go back to page 161, the ones that were characterised as business imputations were (b), (c) and (d). Just looking at (b), it is difficult to see that that has anything much to do with business on its own terms. It has to be understood, as my friend tried to put it to the jury, on the basis that he is a journalist and it is defamatory to say of him that he is bombastic.
HEYDON J: Not that he is beer bellied.
MR McHUGH: That does not seem to have anything to do with that aspect and, your Honour, there was evidence about that issue – “that as a journalist the plaintiff is not to be ‑ ‑ ‑
GUMMOW J: What does this word “journalist” mean, by the way?
MR McHUGH: In the context of this case it was accepted that he was a columnist with The Daily Telegraph. I have done probably everyone and most of all myself a disservice by not starting with the broadcast. I should take your Honours – it is very brief – back to page 10 in the appeal book. This was a broadcast on the John Laws show on 8 August 2005, which was a morning program, and it begins with language that was hugely abusive:
1.Well that bombastic, beer‑bellied buffoon Ray Chesterton, writes a column in the Telegraph called “The Final Word.” Well it’s not the final word today.
2.What’s the matter with you Ray?
3.I mean, you know, I always knew you were a bit of a creep, but can’t you get over it?
4.He was fired by 2UE and blames me for it. He’s never got over it and he talks about the Joey Johns saga –
Your Honours, Joey Johns was a leading rugby league footballer –
and say (sic) –
it is not transcribed –
Meanwhile the Johns saga is starting to run out of motivation.
5.You know that when 70‑year‑old disc jockeys are drawn into the fray to support the argument.
To explain something to your Honours, the evidence on this was not admissible before the jury so I had to address them on the basis that a reader would understand it in this fashion. What had actually happened was that Mr Chesterton had written an article in The Daily Telegraph.
FRENCH CJ: The one that appears at page 132 of the appeal book, I think. Are you saying that was not in evidence?
MR McHUGH: No, your Honours. I think what happened was ‑ ‑ ‑
FRENCH CJ: It is described here as a document before Simpson J.
MR McHUGH: Yes. I do not think it was ultimately in evidence. No, your Honours, I should say, I am told it was in evidence, but there is a question about the use to which it could be put. Let me explain it in this fashion. Your Honours will see that towards the right‑hand side of page 132 in the last paragraph:
Meanwhile, the Johns saga is starting to run out of motivation. You know that when 70‑year‑old disc jockeys are drawn into the fray to support the argument, resources are short and the end, thankfully, is near.
That is the paragraph that Mr ‑ ‑ ‑
FRENCH CJ: That is the man who went off to play for an English team.
MR McHUGH: Twenty‑five years later. So, if your Honours come back to page 10 what Mr Laws had done was read out that paragraph on air, that is paragraph 5 in the transcript your Honours have. The difficulty is that the ordinary reasonable listener does not have a copy of the article in front of him. So I had to address the jury on the basis that ordinary reasonable listeners would understand that Mr Laws was reading from an article and it would be obvious to everyone that he is taking that as a reference to himself and a slight upon himself.
GUMMOW J: What you want from us is a new trial, in effect.
MR McHUGH: Yes.
GUMMOW J: That is right, is it not?
MR McHUGH: Yes, which will go for probably one and a half days. Then your Honours see paragraph 6. This is also important about abuse:
6.I talked to Joey Johns because I wanted to, because he is a friend of mine, a word you probably wouldn’t understand because I doubt you’d have any, and those that you do have call you ‘Ankles’ –
That term “Ankles” is what led to a true innuendo case as to what that word means.
FRENCH CJ: Species of low life.
MR McHUGH: Yes:
7. I don’t know. Why can’t you get over it, Ray?
Repeatedly saying, “Why can’t you get over it” and then –
8. Well, I suppose you have some kind of inferiority complex.
Now, I will take your Honours to it later because it is relevant on the question of retrial, but the way in which I addressed the jury in summary was to say an ordinary reasonable listener receiving this would not take any actual defamatory meaning from it at all. They would understand it as what is known in the trade as “mere vulgar abuse”. That is a tirade of abuse that does not actually stick with anyone. There was plenty of ammunition in the broadcast itself.
So, when one goes back to the jury questions, page 161, they pick up some of the things that were directly said, “the plaintiff is a bombastic, beer bellied buffoon”, for example, in (b), but (b), (c) and (d) are the three business reputation imputations and it is difficult to see why (b) is more of a business imputation than (e). I mean, at least (e) refers to his employment.
FRENCH CJ: You are not attacking their characterisation? You are attacking the test which was applied in putting the questions about them to the jury?
MR McHUGH: I certainly am, although one of the arguments that we have made in our written submissions is the very difficulty of characterising things appropriately. If there is a different test, if what I have, let us call it the “hypothetical referee” test, the “community standards” test, the Gardiner test, is said not to apply to business imputations, then the necessity to be able to characterise things correctly for that purpose becomes hugely important.
There are very few situations where a plaintiff does not have any job at all and you can make almost anything an imputation about the plaintiff’s job with sufficient creativity. That is one of the real problems with creating this separate category, in my submission. So, if I come back to the summing‑up, I just need to take your Honours to the last few paragraphs at about page 147. In paragraph 61 her Honour gave an illustration:
a person might say “X” is a thoroughly decent person, but he is getting old, his eyesight is poor and his hands tremble. You probably would not think any less of “X” if you heard that said about him. But, if you knew that “X” was a surgeon who depended on good eyesight and a steady hand, you might think, well, that does not do his professional reputation any good, I would not want that person operating on me.
Paragraph 62 is important:
So what is then said about him is something that damages him in his professional reputation, although it would not have damaged him in his personal reputation. That is the distinction between the two classes of imputations that you have here.
The only reason why there could be a different result would have to be because there is a different test applied. That conclusion necessarily involves the proposition that there is a different test for professional reputation. Then in 63 your Honours see “professional reputation”, “personal reputation”, “professional reputation”, “personal reputation” and the distinction that is being drawn. Paragraph 64 makes the same point.
In the Court of Appeal – I will just deal very quickly with this – Chief Justice Spigelman, page 173 of the appeal book, in the first paragraph of his Honour’s judgment, said:
I agree with her Honour –
that is Justice McColl –
that Mr Evatt’s submission that her Honour directed that the jury determine the business reputation imputations in accordance with a “community standards” approach should be rejected. I agree with her Honour that, considered as a whole, the direction to the jury would have been understood as not requiring the jury to assess whether the three business reputation imputations were defamatory in accordance with the standards of the general community.
Justice McColl – I will not take your Honours to it but I can give you the reference – dealt with at appeal book page 194.
FRENCH CJ: So we are only concerned in any case of defamation with the question whether the personal reputation, whether it be in its moral aspect or its business competency aspect or some mix of both, which Justice Gummow adverted to before, is lower in the eyes of the ordinary reasonable reader. A test in those terms would be sufficient unto the day, on your submissions.
MR McHUGH: Yes, on my case. And preserving the historical categories of shun and avoid and ridicule but do not enter into this.
FRENCH CJ: All that kind of language has certain connotations which might confuse, I suppose.
MR McHUGH: Yes. But all I am wanting to say in answer to your Honour’s question is that, in propounding that as the general test I am not wishing to exclude those other historical currents, that is all. But for the issue that is before the Court in this case, in my submission, the test that your Honour just put to me is an adequate test and that the jury, as Chief Justice Spigelman accepted, were directed to understand that they were not required “to assess whether the three business reputation imputations were defamatory in accordance with community standards”.
I should take your Honours further through what happened in Chesterton in the Court of Appeal. In paragraph 3 of page 173 Chief Justice Spigelman dealt with Justice McColl’s reasoning and said:
The relevant passages were an essential part of the reasoning of this Court in Gacic. The Court should not depart from such previous authority unless it is clearly satisfied that the decision was erroneous. McColl JA has set out with force and clarity the reasons why such a conclusion should be drawn. Nevertheless, I have come to the view that the defects her Honour identifies are not sufficiently clear or determinative to justify the Court departing from a recent judgment of this Court which has, in relevant respects, attracted support from the High Court on appeal.
There are two issues that arise from that. The first is the statement that “it attracted support from the High Court on appeal” and in the submission that I have already put to your Honours I submit that is not a correct way of characterising what happened. In any event, there was never an issue before this case that bound the Court of Appeal – sorry, in Gacic in this Court, which bound the Court of Appeal.
The second point is that his Honour does not refer to the argument which I put, the same argument I have put to your Honours today, that Gacic was decided per incuriam; that there was no argument on the relevant authorities, and so the significance of the fact that it is a recent decision is, in my submission, very much diminished.
HEYDON J: You are saying you did put your per incuriam argument, but it is not dealt with in effect?
MR McHUGH: Yes, it is not dealt with by Chief Justice Spigelman, but I certainly put the argument very strongly and it is taken up in Justice McColl’s decision. Then if we pass down to paragraph 11, after a consideration of some of the authorities discussed in Justice McColl’s judgment, at paragraph 11, the Chief Justice said:
Injury to the reputation of a person in his or her trade, profession or business is also a matter which directs attention to a narrower section of the community than the whole. It is, in my opinion, arguable that, accordingly, the relevant test is not of the character for which the appellant contends.
Dealing with the second sentence first, his Honour seems to have decided the case on the basis that it was enough that it was arguable that I was wrong given that Gacic was a recent decision of the Court of Appeal. In relation to the first proposition that injury to the ‑ ‑ ‑
GUMMOW J: The ambiguity is in the phrase “directs attention”.
MR McHUGH: Yes. On one reading of Gacic in the High Court, his Honour may be referring back to what he had said at paragraph 3. If his Honour has read the case in that way, then he would take that view. The difficulty with that is that, in my submission, it cannot be reconciled with Lamb. The time has come where I really need to take your Honours to Reader’s Digest v Lamb 150 CLR 500. If I can take your Honours first of all to page 502 where everyone agreed with Justice Brennan, Justice Murphy adding an additional comment about “reasonable” or right‑thinking members of society generally. Over at 503, in the middle of the page (ii) is the imputation that:
The plaintiff, in order to secure a sensational newspaper story, exploited the tragedy that had befallen an old friend.
Lamb himself was a journalist of sorts. The paragraph after the one I have just taken your Honours to makes clear that that imputation (ii) was the only one at issue. What my submission is, plainly that has got to with his business. It just could not be clearer that it has to do with his conduct in his business. If we come over to 505, at the foot of the page Justice Brennan says:
Where no true innuendo is pleaded . . . the issue of libel or no libel can be determined by asking whether hypothetical referees – Lord Selborne’s reasonable men (Capital and Counties Bank v Henty) or Lord Atkin’s right‑thinking members of society generally (Sim v Stretch) or Lord Reid’s ordinary men not avid for scandal (Lewis v daily Telegraph Ltd) – would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluation the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v Deane), being a standard common to society generally –
Then down at the foot of the page, about eight lines from the end:
But the moral or social standard by which the defamatory character of an imputation is determined is not amenable to evidentiary proof; it is pre‑eminently a matter for the jury to give effect to a standard which they consider to accord with the attitude of society generally.
Then over at 507, about seven or eight lines down – I will not take your Honours through the whole of this – it is a discussion about the relevance of the damages evidence, but about halfway down the page at the end of the line on the right:
Of course, care must be taken to ensure that evidence of the attitude of particular groups of classes is not misused: it is neither material to, nor admissible upon, the issue of the defamatory nature of the imputation made. The defamatory nature of an imputation is ascertained by reference to general community standards, not by reference to sectional attitudes.
Those words “general community standards” have so long stuck in my brain that that is the phrase I always use, but it is clear in this judgment that his Honour is using it to wrap up everything that is at 506. That was the basis upon which Lamb was decided and that sectional views were irrelevant.
If I come back to page 176 in the appeal book, in my submission the proposition in paragraph 11 that injury to professional or business reputation “directs attention to a narrower section of the community than the whole” just cannot be reconciled with Lamb. Justice Hodgson takes that head‑on in a passage I am about to come to. I should take your Honours finally to paragraph 14 in the Chief Justice’s judgment:
In the case of an imputation directed to the impact upon reputation generally – whether by means of lowering estimation or by means of shunning and avoiding – it will be appropriate and, on occasions, necessary to ensure that the jury is aware that community standards is the relevant test. In the case of impact upon the reputation of a person of a trade, professional or business character, it will, on the above analysis, usually be unnecessary to ensure that the jury is made explicitly aware that it is the standards of the persons who interact with the plaintiff in those respects which are pertinent.
The two difficulties with that are, first, the Lamb issue and, secondly, what his Honour seems to be contemplating is that the trial judge not direct the jury at all on what the applicable standard is in respect of business imputations.
Now, if I can take your Honours then to Justice Hodgson, who starts on the same page, his Honour did not say he agreed with the Chief Justice and the Chief Justice did not say that he agreed with Justice Hodgson. If I can take your Honours to paragraph 19 on page 177: I will not read to your Honours subparagraphs (1) or (2), subparagraph (2) being concerned with general character and conduct, but subparagraph (3) is the difficulty:
However, in a case where the plaintiff alleges that the tendency is to injure his or her business reputation, then the ordinary reasonable reader must be considered as viewing the matter in the light of the reader’s understanding of what are the requirements for fitness or competence for the plaintiff’s business -
So it is some kind of sectional test. It is not clear on what basis the jury is to know how the reader forms a view about what those requirements are. To come back to your Honour Justice Gummow’s point about a ‑ ‑ ‑
HEYDON J: It is “the” reader, and that reader is “the” ordinary, reasonable reader in (3) and (2). So that is the reader we are talking about. We are not talking about sectional readers.
MR McHUGH: Your Honour, I accept that, but it is:
the ordinary, reasonable reader must be considered as viewing the matter in the light of the reader’s understanding –
the ordinary, reasonable reader’s understanding:
of what are the requirements for fitness or competence for the plaintiff’s business ‑ ‑ ‑
HEYDON J: What is wrong with that?
MR McHUGH: If they are addressed in terms of would an ordinary person tend to think the less, having regard to whatever the hypothetical referee is taken to understand about the requirements for capacity or fitness, there is no difficulty.
GUMMOW J: It has to be read with paragraph 20, does it not?
MR McHUGH: Yes. To stay with your Honour Justice Heydon’s question for a moment, it seems to be contemplating that it is enough that the jury be told if the imputation is one of not meeting the requirement for fitness it is necessarily defamatory; that it would seem to follow automatically on this test.
HEYDON J: It does not actually say that: “viewing the matter in the light of”.
MR McHUGH: Perhaps if I go back to subparagraph (2).
HEYDON J: None of this is about what juries must do or must not do. It is a matter of approach.
MR McHUGH: Yes. Well, in the way in which it is expressed I have to accept what your Honour has put to me, but ultimately it must form itself into a jury direction at some point. The question is in light of the reasoning that his Honour advances in these two paragraphs, what is the distinction that is going to be drawn before the jury. In subparagraph (2) at the top of 178 his Honour says:
In a case where the plaintiff alleges that the tendency is to injure his or her reputation in the area of general character and conduct, then the ordinary reasonable reader must be considered as accepting community standards and viewing the matter in the light of those standards ‑ ‑ ‑
GUMMOW J: Some dichotomy set up or assumed between general character and conduct and other material.
MR McHUGH: Yes. And general character and conduct embracing community standards and other conduct embracing the standard of the particular profession.
GUMMOW J: Lamb is pushed into the first category at paragraph 21.
MR McHUGH: Yes, and, in my submission, there is ‑ ‑ ‑
GUMMOW J: And you say it is not?
MR McHUGH: Well, it just cannot be constrained in that way. There is nothing in Lamb itself that would authorise that. If there were a separate species of business defamation, I ask rhetorically, how is Lamb not a case of business defamation? If one looks at the imputation that the plaintiff is a bombastic, beer bellied buffoon, it is impossible, in my submission, to say that that is more to do with business than the imputation in Lamb’s Case about improperly using his friendship to get a newspaper article. Lamb, in my submission, cannot be constrained in that way. It does not admit of that possibility on its terms and if this is correct, then Lamb must be wrongly decided, in my submission. Therefore, it must fall under the matter of logic that Lamb does not admit of the way in which his Honour attempts to confine it in paragraph 21.
BELL J: Mr McHugh, you accepted earlier that an imputation conveying that a person is incompetent in the conduct of a trade or profession may be defamatory.
MR McHUGH: Yes.
BELL J: So an imputation of a person who is in the business of being a television repair man, that he is hopelessly incompetent, may be capable of being defamatory?
MR McHUGH: Yes, but on the test would ordinary people tend to think the less of him. It may be tend to think the less of him in that respect, but it always has to come back to that test, in my submission. That is a question for the jury.
BELL J: Yes. So applying the ordinary standards of right‑thinking members of the community or ordinary decent members of the community there is an issue as to whether, accepting that the imputation conveyed is of incompetence in the conduct of your profession, nonetheless it may not lower you in the estimate of members of the community.
MR McHUGH: I accept entirely what your Honour puts to me. If we can come back to what has happened in Chesterton, I asked the court to overrule Gacic in the Court of Appeal on the issue which the Court of Appeal decided on business defamation. Leave was not given to me to do that. There is no clear ratio from Justice Spigelman and Justice Hodgson, so Gacic stands as an authority in New South Wales saying that it was necessary to direct the jury that community standards have got nothing to do with a business defamation.
That is the difficulty that we are in and that is why I have spent so much time taking your Honours through it, because ultimately we are in this unsatisfactory position that Gacic stands. It is not clearly qualified by ratio in Chesterton and that is the direction that has to be given in a business matter.
Your Honours, that was what happened in the Court of Appeal below. I should take your Honours to an issue which I asked your Honour the Chief Justice and Justice Gummow on the special leave application to reserve to this argument, namely the extent of a retrial, whether the retrial should be granted only in respect of the so‑called business reputation imputations ‑ ‑ ‑
HEYDON J: Are we not jumping over one thing? Maybe you were coming to it later. You were talking about whether it should be a retrial on all imputations or just the so‑called business defamation ones, but do you not have to demonstrate that there has been some substantial wrong or miscarriage on the part of Justice Simpson’s conduct?
MR McHUGH: Yes, I do. I was going to do that in the course of what I was doing, but both in relation to the business imputations and more generally. I should say this; that the launch pad for my argument is the acceptance below by Chief Justice Spigelman and Justice McColl recorded in paragraph 1 of the Chief Justice’s judgment; namely that they were directed, considering the direction as a whole, on the basis that they were not required:
to assess whether the three business reputation imputations were defamatory in accordance with the standards of the general community.
If I am right in my general proposition that they had to be directed on that basis, in my submission, it is a substantial wrong, almost automatically because on the crucial test of one of the crucial issues – and this was the main issue that I went to the jury on in this case – the whole substratum of my argument was destroyed and I will show your Honours how that was so as we go through the way in which I put the argument to them because I addressed on the orthodox point. If I can take your Honours to 86 ‑ ‑ ‑
GUMMOW J: I am sorry to interrupt you, but this distinction of business defamation, was it thrown up on the pleadings?
MR McHUGH: No. I can take your Honours to the pleadings ‑ ‑ ‑
GUMMOW J: I mean you people luxuriate in pleadings. That is the place I would have thought to find it. If there is this separate category, one would plead it, I imagine.
MR McHUGH: This issue arose below ‑ ‑ ‑
GUMMOW J: And you would demur to it.
MR McHUGH: There was no pleading ‑ ‑ ‑
GUMMOW J: It would come up as a demurrer.
MR McHUGH: There was no pleading of business defamation. There was no pleading of harm at all. There was not even the usual hatred, ridicule or contempt. Your Honours will see that - I am in the statement of claim that starts at page 2. I do not need to take your Honours through it. One of my complaints below was that I had run the case on the understanding, until my friend started to address, that it was run on the orthodox basis, that there was no pleading of harm at all.
Strictly, your Honour, I could have complained before the case started that there was no averment at all and had the case struck out. I did not and I proceeded on the footing that it was an orthodox case. My friend then addressed on business defamation in the course of his address and I addressed on the orthodox test and where Gacic can be understood in the Court of Appeal as being decided on the basis of a pleading point, that it was pleaded exclusively as business defamation ‑ ‑ ‑
GUMMOW J: Gacic was, was it not?
MR McHUGH: That is what is said in the Court of Appeal but there is reference to it in something I saw yesterday, I think it might have been in the High Court judgments – I will try to turn it up – that shows that the averment was actually not so different from the usual one. It said “hatred, ridicule, contempt, business, profession, trade”, but it was accepted below – and I certainly cannot cavil with this – it was accepted in Gacic that that case was run entirely as business defamation. So to answer your Honours question shortly, no, there was no pleading at all in that regard.
HEYDON J: You say there was no allegation of damage, but there are particulars under the UCPR rule 15.32 damages, and also (e) of that does rather grift us into the relationship of an employed journalist with his employer.
MR McHUGH: Your Honour, that paragraph (e) is in connection with the idea of what the plaintiff would have known about the person and that these things were untrue, and so those particulars were advanced on the basis that they are, in effect, evidence of malice and that the damages should be increased on that basis but that there was no separate pleading, in the usual fashion ‑ ‑ ‑
HEYDON J: Yes, but so what?
MR McHUGH: Your Honour, I am just answering Justice Gummow’s question. The case comes on understood as an orthodox case, by me at least. My friend opens on the basis that it is in respect of three imputations concerned with business defamation. There was not, for example, anywhere, including in the particulars to which your Honour has drawn my attention, any suggestion that imputations, whichever they were, (b), (d) and (e) – I cannot remember now which they are – were to be understood as business as opposed to general imputations. So, your Honour, my submission is that the pleading does not go very far one way or the other. It is simply a neutral issue in the case at this stage.
GUMMOW J: When we were talking about pleading, there is no innuendo?
MR McHUGH: No, there was a true innuendo case pleaded in respect of that term “Ankles” and there was another imputation that he was a liar on the teetotaller basis. It was put that he is really a teetotaller and to say that he has got a beer belly shows that he is a liar. I should tell your Honours, the jury accepted all of the imputations were conveyed and that all were defamatory. So there was a clean sweep against me. I do not rely on it now, but if your Honours are at all interested in it, the question of the pleading arose at page 107 in the appeal book. I do not want to go back to it now. What happened was, in the middle of page 107 at line 40, her Honour said:
I don’t suppose Mr McHugh is going to tell me that he is taken by surprise ‑‑
At first I answered “No” in relation to that and then at some other point we came back to it. I can find that later. But, your Honour, it does not really go far one way or the other. The question is whether the direction was correct. Can I take your Honours to appeal book 81. This is where my address commences. I cross‑examined but I did not go into evidence, as best I recall, so I had the last address. At the top of page 81 I have characterised the exchange between Chesterton and Laws where I have said that Laws is responding to what has happened. At line 5:
They are both very well established journalists and the crucial point about it is that what he says, what Laws says is essentially just abuse in the sense of its something that is insulting or it’s something that is offensive, but it is not actually defamatory. It is not something that actually tends to make you think the less of Mr Chesterton.
HEYDON J: I am sorry, what was that precise reference again?
MR McHUGH: It is page 81 of the appeal book, at lines 8 to 12. It is the connection between the general test and the point about abuse. I do not wish your Honours to be distracted by the law about mere vulgar abuse. We have given the reference, it should be on your Honours’ trolleys. The decision in the Court of Appeal is Bennette v Cohen 64 NSWLR 81 at page 98 – I do not wish to take your Honours to it now – where Justice Bryson, giving the judgment of the Court of Appeal, accepting that there was a well‑established argument along these lines that it was open to the jury to find, either on the question that it was conveyed or on the question whether it was defamatory, that the ordinary reasonable reader just would not take any notice of it because they would interpret it only as abuse. Certainly there is no suggestion that abuse and defamatory are mutually exclusive categories, something can be both, and that is a question for the jury. That was the basis upon which I went to the jury.
If your Honours stay on 81 and come down to line 25 or so, because what I am going to suggest to you is that an ordinary reasonable listener would not come away from this broadcast taking away any real defamatory meaning at all, that is the broadcast as a whole, and that is important because I was putting this argument in relation to everything that was said, not just in relation to particular instances. Then if I can take your Honours to 86 at the top at about line seven:
What does defamatory mean? The crucial point about “defamatory” is that it means that ordinary reasonable people, the same ordinary reasonable listeners I have been talking to you about, would actually tend to think the less of the plaintiff as a result of hearing it. If you think about it, that’s quite a high standard. It’s: Would you actually really, as an ordinary reasonable listener, tend to think less of the plaintiff because of it? If all you think is that Laws is having a bit of a spray when he calls Chesterton a creep or a buffoon or ankles, if that’s all you get, you ask yourself: Would an ordinary reasonable listener think less of Chesterton as a result of hearing it? That’s important in this case and that’s where we say abuse comes in.
Then in the next paragraph you will see again the reference to tending to think the less of him. Twice that appears in that paragraph. Coming down to the bottom of the page, line 53:
Now, I’m just about to get to the facts of this case but the last real point I want to make about the law here is what is wrapped up in this idea of abuse. When is something abuse as opposed to defamatory? Remember I have just said to you “defamatory” means something that would tend to make ordinary reasonable people think the less of the plaintiff. That’s to do with your reputation and how people feel towards you, on the one hand. This idea of abuse is about things that are offensive or insulting but which don’t necessarily go on to have an affect on your reputation. Obviously something can be insulting and also affect your reputation. It’s up to you as jurors to decide which category it falls into.
Then down at line 37 or so:
Now, I want to suggest to you that this whole broadcast falls into that category of abuse, the references to him being a buffoon.
Then your Honours will see there is a whole list of all of the things; beer bellied buffoon, creep, inferiority complex. Then down at line 52:
The point is: Against that background a reasonable listener is going to understand that as a trade‑off of insults between them but not as having a lasting defamatory meaning.
Then, your Honours, over the page at about line 12, again I come back to this idea of thinking the less of him. Then at about line 18 again I refer to the whole broadcast, taking all the imputations together and I put it very distinctly there both in relation to question 1, which is whether or not it was conveyed, and question 2, whether or not it was defamatory.
I will not take your Honours over the following several pages where I went through imputation by imputation, but I ran this argument in respect of essentially all of the imputations and I put it both on the question of conveyed and on abuse. I should say that there may be one. In fairness I should acknowledge at page 91 I put the abuse argument on whether or not it was conveyed. Then at line 25 on page 91 I said:
Now, if you’re against me on that in relation to 1(e) and you think this is really what is being said, then when you get to 2(e) I have to acknowledge that will be a matter for your common sense to answer; I’ll not going to put any other submission to you about it.
In my submission, they would understand the phrase “any other submission” as being anything other than the general points I have been making about abuse, but in fairness I should point that out.
I will not take your Honours through all of those, but the way in which I addressed the jury was making an absolute link between the general test, tending to think the less, and the concept of abuse. It was my principal argument. Not my only argument, but my principal. What her Honour’s summing‑up did, first of all in respect of the business reputation imputations very clearly took that argument away from me entirely. If your Honours understand the direction to the jury as excluding reference to community standards then everything that I said to the jury in respect of those three imputations loses the substratum upon which the argument was erected.
So to answer your Honour Justice Heydon’s question, in my submission that occasioned a substantial wrong or miscarriage in respect of those three. As to the question whether I should get a retrial on all issues my argument is simply this ‑ ‑ ‑
GUMMOW J: Now, Justice McColl would not have given you this.
MR McHUGH: That is so, but her Honour – if I can take your Honour to what her Honour said on this – her Honour understood my argument on abuse as having been – this is page 240, 195. Her Honour said:
I cannot accept this submission. First, the primary judge (at [17]) directed the jury that the question whether the imputations were conveyed was determined by applying the “ordinary reasonable listener”. That was the critical question to which the vulgar abuse submission was directed.
That is her Honour’s reasoning, in essence, on this and the passages that I have just taken your Honours through show that that is not a correct statement of the way in which my argument was advanced. The argument on abuse was put on both question 1 and question 2, but very particularly tied up with the test under question 2, that is the test of what is defamatory. So in my submission if this were a majority judgment that would have been an error of law against which I was appealing.
So to come back to what I was saying as to a retrial generally, I put the argument to the jury on the basis that the whole matter would be understood as abuse and not as defamatory. Once her Honour drew the distinction in the direction between business defamation and general defamation any argument that proceeded from the whole matter again collapsed. That is why what her Honour directed them on undermined me in respect of the personal – the so‑called personal reputation imputations as well.
Now, one other issue relevant to retrial here is this is not a case – if your Honours accept that there will be a retrial in respect of at least the business reputation imputations, then what we are looking at is in the ordinary course a one‑day or a one‑and‑a‑half day retrial. My experience is I do not think ‑ ‑ ‑
HEYDON J: And an appeal to the Court of Appeal and an application for special leave to this Court.
MR McHUGH: If your Honour is contemplating a further round ‑ ‑ ‑
HEYDON J: I am.
MR McHUGH: One would very much hope that that would not be the case, once we have guidance from this Court as to how the trial should be conducted. But in any event if there is to be a retrial it will be very short and the question is will it be substantially increased by increasing into it or adding into it these other imputations. In my submission, it will make no difference to the resources that have to be devoted, to the time that it will take, to the costs to the parties. That, in my submission, is a relevant discretionary factor that your Honours can take into account in determining the extent of the retrial.
There is one other matter which is the way in which the case was conducted and the justice of what happened below. What my friend did was push adamantly for a Gacic direction. Can I take your Honours to 99 at the foot of the page at line 53:
Also the only defamatory meaning he –
which is a reference to me –
put was people thinking less of the plaintiff. He didn’t mention that the defamatory sting could also injure the plaintiff’s business reputation which is a recognised head of injury as well. There are two basic tests; with the words “lower the esteem of the plaintiff in the minds of right thinking members of the community or would the words have a tendency to injure the plaintiff in his business or trade or profession as a journalist” –
which is the Gacic test. Then at 104, line 33 – after it your Honours will see at the top of the page at line 10 I referred to Lamb. Down at line 33 my friend says:
Could I come back to that business reputation. An appeal succeeded to the Court of Appeal where that direction wasn’t put or put clearly that the plaintiff could suffer injury to his business as well as right thinking members of the community. That’s Gacic.
So he is saying that that is applicable in this case. Over the page on 105, line 10:
The defendant responded by saying it wouldn’t make ordinary right thinking members of the community think less of the plaintiff and the Court of Appeal agreed that there were two tests. It is unreported.
So that is the basis upon which my friend went to her Honour. What happened in the Court of Appeal, though, if your Honours go to 191 in the book at paragraph 63:
In his written submissions Mr Evatt accepted that the “prevailing test for defamatory meaning for injury to personal reputation and business reputation appears to be community standards”, although he suggested that Callinan and Heydon JJ may have rejected the community standards test in Gacic. He submitted, in any event, that the primary judge had applied the community standards test for which the appellant contended. When pressed in oral argument, Mr Evatt accepted that the community standards test was the standard to be applied to “business defamation”, a submission which was starkly at odds with that which he advanced at the trial and for which he successfully contended in Gacic in this Court.
If your Honours will just pardon me a moment I want to turn something up. Then at 241 in the appeal book – this was on a question of costs:
In this case Mr Evatt persuaded the primary judge to direct the jury in accordance with what he submitted was the proper interpretation of Gacic, a submission he effectively abandoned in this Court. In my view, in such circumstances, it is appropriate to order –
and there was a special order about costs. Now, the relevance of that is I protested that what my friend was doing was contrary to principle. He insisted on it occurring. That is the whole reason why we are here. He effectively abandoned his position in the Court of Appeal. Having read my friend’s submissions in this Court he seems again, at least to some extent, to have abandoned Gacic in his submissions and we will see what he says orally about it. But in my submission the justice of the case really requires, in this situation, that we get a retrial on all issues.
Now, I had said at one stage that I would take your Honours to how I raised the point below and what happened. I do not know whether your Honours would prefer to hear that in reply or now and I cannot remember if that is the topic that I undertook to your Honour Justice Heydon to address?
HEYDON J: You did.
MR McHUGH: If it is, I am happy to deal with it now.
HEYDON J: I just think if one is criticising a trial judge, with respect, with close verbal analysis it is interesting to know what material she had to work with.
MR McHUGH: I will take your Honours to that now. Can I take your Honours to 108 in the book? At the foot of the page at page 108, line 50, I dealt first with a Gacic point and then remember I said earlier that I ‑ ‑ ‑
HEYDON J: This is the second day.
MR McHUGH: Yes, this is the morning.
HEYDON J: It is just before the jury is to be directed.
MR McHUGH: That is right. What happened was that the day before an issue had arisen. We went away overnight to consider what the position would be. I came back in the morning and addressed her Honour on the points, having had a chance to read Gacic. If your Honours will recall, on the page before at line 40 there was a reference to whether I was taken by surprise by the pleading and I had answered no. This is where I came back to it at the foot of page 108:
Your Honour asked me whether I was taken by surprise. I must say to your Honour that I had read the pleading, I had seen there was no averment of defamation and I had assumed that it was the usual averment.
HER HONOUR: You did make an affirmative submission yesterday that it was pleaded as an ordinary defamation.
So I went through the business defamation particulars and that is as far as that point went. Then, in the middle of page 109 at line 20, I said to her Honour:
there is a terrible misconception that permeates my friend’s submission and indeed permeates Gacic –
and then I tried to distinguish Gacic on a pleading point ultimately, I think. Next to line 30 your Honours will see the reference to Dawson v Bloodstock. Down at line 40 there is the reference within Dawson v Bloodstock to Sungravure and I said to her Honour at 50 that “Disparaging is the crucial concept” – very much the submission I would put to your Honours today. Over at page 110, at about line 40:
Now the important point here is that in removing the expansion in the 58 Act about something which is likely to injure them in the professional trade, the 1974 Act regime returned to the common law world where it was necessary to show by reference to the standards of the community at large that one had been hurt in one’s reputation.
Then I gave an explanation about different aspects of one’s reputation.
GUMMOW J: I am sorry to interrupt you, but that, as it were, turning taken by Sir Samuel Griffith which found its way into the New South Wales 1958 Act – was that commented in Gatley? Have they got themselves across the twists and turns in the Australian situation?
MR McHUGH: It is, and I will not take your Honours to it, but there is in highlighting on the two versions I have given your Honours a reference to exactly that issue, and in the 10th edition they contrast the position under the Code States because it continued in Queensland up until the 2005 Uniform Defamation Act and then in the 11th edition in the footnote they say it used to be different under the Code States. So they still refer to that. That may explain some of those cases.
GUMMOW J: That is what I am wondering about.
MR McHUGH: Yes. They are well and truly aware of it. I should say this, in relation to what happened in Gacic in the High Court, Justice Callinan no doubt would have been very familiar with the Code understanding of what defamation was and it would be no surprise to Justice Callinan at all that there would be something known as business defamation that consisted of injury merely to the business.
GUMMOW J: Do we have the relevant section in the 2005 Act which restores the common law – the uniform Act?
MR McHUGH: Yes, it has been put in. It is somewhere in the material. It is in. Coming back to page 110 in the book, the purpose of all of this was to demonstrate to her Honour that Gacic was decided per incuriam. I say at the foot of page 110 that there was a new category created. Over at 112 at about line 40 I am explaining about the necessity for ‑ ‑ ‑
HEYDON J: It is not much good telling a trial judge that presumably the Court of Appeal is per incuriam, they are bound by it, no arguments.
MR McHUGH: That was where we ended up, your Honour. I must say, this argument came on in some haste, the argument, and I put to her Honour that if it was per incuriam, she was not obliged to follow it, but her Honour, I submit entirely correctly, rejected my submission, although all of this was relevant to give her Honour the context in which she had to direct. I then referred to the problem about the test at the top of page 113:
Your Honour, I am sorry, by “when” I meant what is the test . . . it is not enough to say it is damaging.
I went through and gave arguments about injurious falsehood in the middle of that page. Then at line 37 I put to her Honour that the issue was not alive in the High Court. So that is all context. Then at page 118 ‑ ‑ ‑
GUMMOW J: What are you doing handing up High Court transcript, page 113? This adds a new parallel to life.
MR McHUGH: Your Honour, it happens all the time.
GUMMOW J: Maybe it should stop.
MR McHUGH: No, your Honour. It was relevant to show that the issue had not been before the Court. It was a bit of transcript in which, in the course of the argument in Gacic ‑ ‑ ‑
GUMMOW J: You would not know that unless you had the notice of appeal and the written submissions.
MR McHUGH: No, because, with respect, Mr Blackburn was asked about it. He said he felt a sense of grievance about the point and Justice Kirby said, “Have you raised it?” And he said, “No, it is not in the notice of appeal”. Justice Kirby then said, “Well, do not waste our time”. Your Honour, that is how it came up.
FRENCH CJ: You really risk poking around in the entrails once we get into transcripts.
MR McHUGH: That is what happens in a trial when issues arise on the hop. At line 50 on page 118 her Honour said:
HER HONOUR: That’s binding on me and when you put it together with some very strong obiter from two members of the High Court, what do I do? You might be right, but you’ve got to go to the High Court to establish your right.
MCHUGH: First, your Honour, I am sure, will accept that I am duty‑bound to take the point ‑
Then I have said at line 20 –
I think that is as far as I can take that.
The point was not taken in Gacic. Then, your Honours, over at 127 –in fact, I should stop at 121 on which my relies. At line 35 on 121 her Honour puts to me:
So there are two distinct categories and I would direct them that in relation to these what I’ll call the personal defamations, they apply community standards. I wouldn’t explicitly say to them they don’t apply community standards in relation to business defamations. I propose to say whatever was drawn from the Chief Justice and Justice Brennan and possibly even given them an illustration given by them.
That is the reference to the illustration in paragraph 2 and I say:
If your Honour was minded only to address them to put it the way that it was put in paragraph 2 of the High Court, I don’t think that that would cause a problem. My fundamental concern is the idea that they should not be directed that in relation to business defamation--
. . .
McHUGH: ‑ ‑ ‑ they discard community standards.
In fairness to her Honour I should go to 122 at about line 15:
HER HONOUR: But the Court of Appeal is going to say I didn’t follow‑ ‑
Gacic. Then at line 25, her Honour says:
What do you say the test is? I am looking at 46 –
that is paragraph 46 of Gacic in the Court of Appeal –
What do they say the test is? They don’t.
Then her Honour says:
They say you don’t take into account community standards and that is exactly what they criticised Justice Bell for.
Over the page at line 20 on page 123, I said to her Honour:
but the direction which your Honour, I submit, should give is that there is the general proposition that defamatory matter is that which tends to make people think the less of you, ordinary members of the community think the less of you and then your Honour should certainly say there are different aspects to one’s reputation and your Honour can refer to what is at paragraph 2 of the High Court decision as to the different aspects of business reputation and personal reputation and so on. If your Honour gives that sort of direction, then there is no difficulty.
Then, finally, her Honour indicated at the foot of 126 what she was going to say. That is at line 50. She said:
Then I’ll tell them there is another species of defamation which is business defamation.
Your Honours should interpret the direction that her Honour gave in light of the indication of what her intention was as expressed at 126 “there is another species”, and then after her Honour had indicated what she would do at line 10 I asked whether her Honour had finished indicating what the direction was going to be, and I said at line 15:
MCHUGH: Your Honour, I don’t wish to [cavil] with what your Honour is saying, I don’t wish to be heard further on it, but I just wish to have recorded clearly that, in my submission, your Honour should simply state the general test without tying it in to any particular imputations and secondly, that your Honour should not say that there is a separate species of business defamation. But your Honour has heard me already about all of that. I just don’t want it to be said in another place that I caved in -
after arguing the point for half an hour.
Then the very last thing I will say to your Honours before I sit down is at 148 in the book, after her Honour had given the summing‑up, at paragraph 70 on that page she asked me if there was anything I wanted and I responded, “Your Honour has already heard everything I want to say” on that. So I well and truly lost the argument. But that is the way in which the issue was explained to her Honour and her Honour felt bound – and I have to accept in this Court – she was bound by the Court of Appeal in Gacic. She set out to give a Gacic direction, she succeeded in doing that. In my submission, it was an error and one which occasioned a substantial miscarriage in respect of all imputations. May it please the Court.
HEYDON J: It is not really an error to follow a decision of the Court of Appeal.
MR McHUGH: No. Well, your Honour, this is a linguistic difficulty that I have always had in relation to this issue in this case. Her Honour did not in that sense err, but at the same time the legal direction that she gave was, in my submission, an error of law. So, although her Honour was bound and constrained to do what the Court of Appeal had said, the direction that she gave ultimately was, in my submission, wrong at law.
KIEFEL J: If Gacic is found to be in error at the decision in the Court of Appeal, what impact should that have on costs if there is a retrial?
MR McHUGH: In my submission, in view of what happened below, in view of the fact that this was a direction that was pressed for by counsel, even after I gave a very lengthy explanation for why it was inevitably wrong and that it was per incuriam, it was pressed for, we get to the Court of Appeal, it is effectively abandoned, we end up here, in those circumstances, in my submission, the appropriate order of this Court as to costs would be to award my client the costs of the first trial which miscarried on that basis.
Now, that is an unusual course in the ordinary case, the retrial. The cost of the first trial would be left to the determination of the judge on the second trial or they might be taken to be costs in the second trial. But, in my submission, the particular circumstances here, when my friend appeared in Gacic throughout and at first instance and abandoned the Court of Appeal, justify a costs order of that kind as to what is the justice of the case. May it please the Court.
FRENCH CJ: Thank you, Mr McHugh. We will adjourn until 2.15.
AT 12.47 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM:
MR McHUGH: Your Honours, I had finished what I wanted to say, save for a few matters from before lunch that I had to return to. Your Honour Justice Gummow asked for the references in the Gatley extract to the Code and, without taking your Honours to them, in the 10th edition it is page 60, footnote 86, and in the 11th edition, page 72, footnote 293. Your Honour Justice Gummow also asked whether the Court had been provided with copies of the provision in the 2005 Act that takes us back to the common law, and I think I answered that we had given those to your Honour. That was not true at the time that I said it, but it is now. Your Honours’ associates or tipstaves have copies and it is section 6 of the 2005 Act in New South Wales. The uniform Acts around the country sometimes appear in different pieces of legislation so the numbers are not always identical.
I did say before the break that the document at page 132 of the appeal book, which was a copy of the article, was in evidence. It was not in evidence before the jury. It was used in the course of an argument with Justice Simpson but it is not in evidence. The last question is the one that your Honour Justice Bell raised with me about slander. We have provided to your Honours’ associates Chapter 4 of Gatley just at the end of lunch. The short point is, what your Honour put to me was entirely correct, in England at least. If I can take your Honours in that extract to 4.1, which is page 139 of the 11th edition of Gatley. In the second sentence:
At common law libel is always actionable per se. Generally speaking, slander is not so actionable and a person defamed can only succeed on proof of “special damage” arising as the direct and natural and reasonable result of the publication –
However, there were four exceptions and at 4.2 they are set out. One is imputations of crime, one is imputations of infectious disease. Over the page is the one in which we are interested:
Where the words are calculated to disparage the claimant in any office, profession, calling, trade or business held or carried on by him at the time of publication.
And a statutory exception in relation to chastity. The important point about the word “disparage” there is that it captures the notion of reputation that we have addressed this morning. The sense in which World Hosts explains that that means thinks the less, in my submission, is applicable. If your Honours turn through to page 147, your Honours will find an expansion on the topic about disparagement of the plaintiff in any office. At the top of page 148:
However, the rule generally only applied if the words were spoken “in the way of” the office, etc. Thus in Jones v Jones the defendant stated that the plaintiff, a schoolmaster, had committed adultery with the caretaker’s wife and a verdict for the plaintiff was set aside because the words were spoken without reference to his profession.
What this is all directed to is the question of whether or not it was necessary to prove damage. It is not in any way directed to the question, what is the standard of opinion against which the question of defamatory has to be measured?
KIEFEL J: Although other text writers – I think, Halsbury in the 4th edition, I did not bring it with me – also makes the point that nevertheless the damage had to be to reputation, although by reference to office.
MR McHUGH: Yes, exactly. So an example given on the opposite page, 4.17 in the middle of the page, your Honours see a reference written by a solicitor and it said that it came “from that pimp Hopwood” and in the middle of the page:
The action failed because in writing the reference the plaintiff was not acting in a professional capacity but as a friend and the words were therefore not spoken of him “in the way of “ his profession or did not “touch” his professional reputation, even though they mentioned his profession.
So, your Honours, that explains the point that your Honour raised with me earlier. I can just give your Honours the references to the sections. Under the 1958 Act by a combination of sections 5, 7, 8, 9 and 10 it seems that that distinction fell away about slander. Under the 1974 Act, it was section 8 and under the 2005 Act it was section 7 which abolishes the distinction. So it has not been a relevant concept in New South Wales law for half a century, but it survives in England. May it please the Court.
GUMMOW J: Now, just a minute. Your opponent relies, I think, quite heavily on what he says he gets out of Prattenv The Labour Daily Ltd [1926] VLR 115.
MR McHUGH: Your Honour that was a case as I recall that was concerned ‑ ‑ ‑
GUMMOW J: I am not sure it need worry you really.
MR McHUGH: No.
GUMMOW J: Look at the bottom of page 124. The problem, I think, in that case was the judge’s charge to the jury, a relevant portion of which appears at page 121 under the paragraphs (a) and (b) about three‑quarters of the way down the page:
it could not be defamatory for the defendants to say that plaintiff was incompetent as a Minister -
because that did not touch his reputation as a man, whatever that means.
MR McHUGH: It just seems to be completely ‑ ‑ ‑
GUMMOW J: If you go to 120 in Mr Justice Cussen’s judgment at the bottom of 124:
It follows from the authorities cited . . . that, in an appropriate case, the Chief Justice’s charge would put a meaning too restricted . . . the real ground of action in this respect is that there has been a diminution of reputation, and there may be such a diminution in respect both of personal and official, etc., character.
MR McHUGH: And there is nothing controversial about that.
GUMMOW J: But you embrace that, do you not?
MR McHUGH: I entirely embrace it, your Honour. That was why I did not trouble to deal with this. May it please the Court.
FRENCH CJ: Thank you, Mr McHugh. Yes, Mr Evatt.
MR EVATT: Thank you, your Honour. We submit that the issue for the Court is clear and as presented by the appellant a little vaguer. In paragraph 61 of her summing‑up to the jury, Justice Simpson – that is at appeal book 146, line 50 said:
Let me give you an illustration of this: a person might say “X” is a thoroughly decent person, but he is getting old, his eyesight is poor and his hands tremble. You probably would not think any less of “X” if you heard that said about him. But, if you knew that “X” was a surgeon who depended on good eyesight and a steady hand, you might think, well, that does not do his professional reputation any good, I would not want that person operating on me.
Now, that illustration is similar, if not identical, to the illustration given by Chief Justice Gleeson and Justice Crennan in paragraph 2 in Gacic in the High Court and by Justice Beazley in paragraph 32 of Gacic in the Court of Appeal and it is picked up – although my friend has not referred to it – in his notice of appeal.
The notice of appeal in this appeal, your Honours, is at page 248 of the appeal book and grounds 2(a), the first ground, at lines 40 to 50:
The Court of Appeal (Spigelman CJ and Hodgson JA, McColl JA dissenting) erred:
(a) in refusing to overrule or, alternatively, in refusing leave to the appellant to invite the Court to overrule its earlier decision in Gacic v John Fairfax Pty Limited (2006) 66 NSWLR 675 (which had held that because of “the distinct nature of business defamation”, it is necessary “to direct the jury that in the case of a business defamation, it did not matter whether the published material lowered the person in the eyes of right‑thinking members of the community”), notwithstanding that Gacic was decided per incuriam, and contrary to longstanding authority –
Chief Justice Gleeson and Justice Crennan picked up the example referred to in Gatley in paragraph 2.17 and which had been referred to Justice Beazley. The issue is, is that right or is it wrong? If we look at what the High Court said in Gacic 230 CLR 291, the Chief Justice and Justice Crennan at page 294, paragraph 2, “The case concerns that form of defamation”, in other words, we are looking at a form of defamation. We are not looking at a separate category, a special category, a different tort. We are looking at that form of defamation which involves injury to business reputation.
FRENCH CJ: Would you accept that her Honour would have correctly directed the jury if she had asked them to consider whether in respect of these imputations they would cause ordinary reasonable readers to think less of the plaintiff?
MR EVATT: If she had given that direction as to the business reputation imputations, that would not be satisfactory, but it would be satisfactory for the personal reputation.
FRENCH CJ: What else should she have said, or what less should she have said? Reading your written submissions, I got the impression there was a convergence between the test you were propounding and that which Mr McHugh put in oral submissions in discussion with the Court.
MR EVATT: What she could have said is exactly what your Honour the Chief Justice said, but added “or would the words cause persons to shun or avoid or not to deal with the plaintiff”, in other words, just add something that would – because even though the words may not cause the ordinary reasonable reader to think less of the plaintiff in his personal reputation, they would cause the reader to think less of the plaintiff by reason of his profession. It is a very slight alteration.
FRENCH CJ: This is put to you in the context of a discussion I suppose the other members of the Court were having with Mr McHugh, whether personal reputation has different aspects; there may be a moral aspect, there may be your reputation as a business person or professional, there may be an overlap between the two in respect of, say, the incompetent doctor who continues to operate. So if one accepts that the words “personal reputation” can subsume both, if you like, moral and business reputation, would not such a test be sufficient, provided that is made clear?
MR EVATT: It may not quite flesh it out. We have on the left‑hand side personal reputation, on the right tendency to injure business reputation. There is a considerable overlap, but there must be some examples where injury to business reputation would not overlap or concur with injury to personal reputation. But nonetheless, we say that is defamatory and it is not necessary to always link the imputation to personal reputation to be defamatory. Can I take the Court to John Fairfax v Punch 31 ALR 624 at page 632. This is Mr Justice Brennan when he was in the Federal Court, your Honours, and I have pointed out in my submissions that this judgment of his was less than 18 months before his judgment in Reader’s Digest. It is at the second‑last paragraph, about four lines down;
It was submitted that the articles –
that is the defamatory articles –
did not disparage the respondent merely by saying that 250 dairymen who were members of the Country Party no longer had confidence in him. It was submitted that such a statement is not defamatory, for it does not lower the respondent in the estimation of right thinking people: it does not impute to him any discreditable conduct or quality.
The submission is not well founded. A person may be defamed by an imputation of a disability affecting the performance of the functions of his office, although the imputation does not expose him to hatred, contempt or ridicule.
Then his Honour goes over the page to refer to Pratten, Justice Cussen. On page 633, lines 15 to 20, Mr Justice Brennan refers to Lord Blackburn in Capital and Counties Bank:
A libel for which an action will lie is defined to be a written statement published without lawful justification or excuse, calculated to convey to those to whom it is published an imputation on the plaintiffs, injurious to them in their trade, or holding them up to hatred, contempt, or ridicule –
and further down the page at line 40, Justice Brennan refers to Lord Herschell in Alexander v Jenkins:
It is quite clear that as regards a man’s business, or profession, or office, if it be an office of profit, the mere imputation of want of ability to discharge the duties of that office is sufficient to support an action. It is not necessary that there should be imputation of immoral or disgraceful conduct.
GUMMOW J: You forgot to look at page 634, I think, Mr Evatt. Justice Brennan went on at the bottom of the page to refer to the Queensland Code and he said, “The Code is not to be equated with the common law”.
MR EVATT: No, that is right, your Honour. The Queensland Code is similar to section 5 of the 1958 Act.
GUMMOW J: Indeed. Then he says:
injury to a plaintiff’s profession or trade without disparagement of reputation does not suffice to make an imputation defamatory.
MR EVATT: I do not think that qualifies what his Honour has said. Finally, just getting back to page 633, his Honour did refer to Mr Justice Bray at line 35 in Potts v Moran. The case of Potts v Moran is on my list of authorities but I am reading it here:
It is clear that it is defamatory to impute to a man inefficiency or incapacity in his occupation unless that occupation is unlawful. To do so defames him, not only in the eyes of those of the same occupation or those connected with him in his occupation, but in the eyes of the community generally, or the reasonable members of it.
Your Honour, there is one other authority I would like to take the Court to. Mr Justice Beaumont said something very similar in Random House v Abbott (1999) 167 ALR 224. At page 231, paragraph [22], Justice Beaumont, about four lines down:
A person may be defamed by an imputation of a disability in the performance of the functions of his or her office, although the imputation does not expose him or her to hatred, contempt or ridicule. A false statement about a person to his or her discredit is defamatory. Thus to attribute to a person a want of capacity as the holder of an office will be defamatory. The mere imputation of a lack of ability to discharge the duties of that office is sufficient. It is not necessary that there should be an imputation of immoral or disgraceful conduct -
which is a reflection on personal character.
FRENCH CJ: I do not think Mr McHugh would have any difference from you on that point.
MR EVATT: No. I - very much we are rowing in the same river. He is just on the wrong side of the bank. Your Honour, when you look at those authorities, I would ask your Honour Justice Gummow to revisit Pratten, which does seem to be in accord with what was said by Justice Brennan, Mr Justice Beaumont and some of the authorities to which they referred. The Readers Digest Case – in his judgment in this case from which there is an appeal, Mr Justice Hodgson expressed the opinion that the Readers Digest Case concerned personal imputations only. My friend says no, that is not right, it relates to professional business reputation.
If you look at the imputation in the Readers Digest Case 150 CLR 500, at page 503, Justice Brennan in the middle of the page sets out the three imputations. Number (iii) was taken from the jury and, to be correct, I was in error in my submissions – imputation (i) was not found by the jury. Imputations (i) and (ii) went to the jury but the jury did not find (i). They found (ii):
The plaintiff, in order to secure a sensational newspaper story, exploited the tragedy that had befallen an old friend.
That is a personal imputation – betraying or exploiting an old friend really has nothing to do with business reputation.
Then when we look at page 506, at the top of that page, Mr Justice Brennan equates as synonymous the various tests of “Lord Selborne’s reasonable men”, “Lord Atkin’s right-thinking members of society”, “Lord Reid’s ordinary men not avid for scandal”, but he is considering an imputation relating to personal reputation. If he was saying that different rules or considerations applied to professional injury or tendency to injure professional reputation, he would have said so because less than 18 months after the Punch judgment – and I ask the Court not to accept my friend’s submissions on that – Mr Justice Brennan clearly distinguished between what was required for an injury to professional or trade reputation and personal reputation.
It was a bit misleading of my friend to concentrate on the Reader’s Digest Case because that raises another issue about sectional parts of the community. We are not saying or advocating sectional parts. What we say is that an imputation to be defamatory, and we recommend as the best test the reasonable man, that there are some difficulties with right‑thinking members of the community, if I have time to deal with them, an imputation can injure, in the eyes of the right‑thinking member of society or the reasonable man or the member of the jury, his personal reputation or the reasonable jury can conclude that that imputation, although it would not injure personal reputation, such as honesty, integrity, it could injure the business reputation.
My friend seems to think that is impossible. In that regard I would draw the Court’s attention to my friend’s submissions in reply at page 2. This is a five‑page document I think filed last Thursday, your Honour. On my copy it has 5 February 2009. If you turn to page 2 and paragraphs 4 and 5 in the middle of the page, Mr McHugh submits:
First, the proposed test for “business defamation” usurps the orthodox test, which turns on general community standards, and replaces it with a test based on sectional standards –
That is wrong, your Honour. No one has advocated that –
contrary to long standing authority which bound the Court of Appeal, including this Court’s decision in Reader’s Digest –
The Court’s decision in Reader’s Digest was not concerned with injury to professional reputation. Then if we look at paragraph 5:
The proposed test is also, with respect, unworkable. How should a trial judge identify for the jury the relevant section of the community against whose standards the imputation is to be measured? For example, in Gacic, what “restaurant standards” were the relevant standards to be applied by the jury in that situation? Should the jury have been directed to apply the standards of regular patrons of Tetsuya’s –
which I think is an upmarket restaurant, your Honour –
or those of Harry’s Café de Wheels? What if the publication is silent as to the nature of the restaurant?
Your Honour, we are not dealing with this sort of situation. In Gacic the imputation was the restaurant served unpalatable food or the second imputation that some of the service was poor. Every member of the community would know that a restaurant should not serve unpalatable food, should not have bad service or poor service and they are entitled to come to the conclusion that those imputations, taking into account they are reasonable persons, they take into account their knowledge of the world, that a restaurant that serves unpalatable food must injure the reputation of the restaurant owner even though it does not injure the restaurant owner’s personal character.
The same applies to Chesterton, in this case, your Honour. All these things are – the three business reputations, (b), (c) and (d), are within the knowledge of the reasonable man. There is no question of extrinsic facts. If the imputation was that the restaurant failed to prepare a meal in accordance with a recipe of so‑and‑so and left out certain ingredients that would not be within the knowledge of the reasonable man. They could not possibly come to any conclusion affecting that restaurant’s capacity. That would be a question for extrinsic facts.
One case that came close was Drummond‑Jackson. In Drummond‑Jackson [1970] 1 WLR 688, Lord Pearson at 698 and 699:
words may be defamatory of a trader or business man or professional man, though they do not impute any moral fault or defect of personal character. They can be defamatory of him if they impute lack of qualification, knowledge, skill, capacity, judgment or efficiency in the conduct of his trade or business or professional activity –
The only point about that case, it did, in my opinion, involve a rather complicated dental technique. I do not know whether it was complicated or not, but it was probably not within the knowledge of some members of the community. What the appellant wants is a ruling from this Court that unless the imputation injures the reputation of the plaintiff in his personal capacity, whether that be honesty, integrity or it could include incompetence, but whatever the imputation is it must relate directly or indirectly back to his personal character or some lack of it. So if it is to include business injury defamation then the imputation must relate to some inadequacy in the person’s character or some incompetence or some lack of care or some recklessness to reflect on his personal reputation.
What they are saying is that the example given by Chief Justice Gleeson and Justice Crennan in paragraph 2 and referred to in paragraph 6 of the High Court Gacic, and what was said by Justice Beazley in paragraph 32, is wrong. It has been referred to in Gatley. Could I take your Honours to the 11th edition of Gatley. Having relied so much on Gatley in this case, can I say, your Honours, while I am not saying that Gatley has feet of clay, but Gatley is trying to reconcile and put together every defamation case in New South Wales, Australia, England, many places in the world, a rather difficult feat, your Honour. Could I take your Honours, however, to the 11th edition of Gatley, page 38, which has been read by Mr McHugh. At page 38, paragraph 2.1, about a third of the way down of the big paragraph:
Indeed, in the case of insolvency or incompetence in trade it is only possible to bring the case within any of the tests by giving a broad meaning to “shun or avoid” so that it includes others being unwilling to do business with him.
Just interrupting, “shun or avoid” has been part of defamation pleading for well over 100 years. The pleading is that the plaintiff is brought into public hatred, ridicule and contempt and is shunned and avoided. That test, criticised as too general, covers everything. If “shun or avoid” means, as it seems to, that people would not do business or continue to be clients or customers of the plaintiff, then that 100‑year‑old test would cover every aspect of injury to reputation, be it personal, professional. Carrying on with the quote from Gatley ‑ ‑ ‑
FRENCH CJ: Well, you might have a beer with the tremulous doctor but never go to him for an operation, “shun or avoid” would not apply in that circumstance.
MR EVATT: Why would it not cover it, your Honour? I mean, it is not ideal, but you would tend to shun and avoid the surgeon whose hands are trembling ‑ ‑ ‑
FRENCH CJ: You did not run your case on this basis, did you?
MR EVATT: I thought I did.
FRENCH CJ: “Shun or avoid”?
MR EVATT: Your Honour is quite right. I did not run the case on “shun or avoid”, but Justice Crennan, in the application for leave, pulled me up and asked me what the audience was for injury to personal reputation, injury to business reputation. She wanted to know what the audience was, in other words, what the tests were, and it did occur to me when I was writing these submissions in response to what she said that the old pleading could cover it. However, that is quite true. That is the first time I have brought it up in the submissions in this Court. In any event, just to finish this passage:
Without suggesting that there is a separate tort of “business defamation” –
law, there is not one. It is all defamation. It is not even a part or a special category of defamation. I think when Justice Kirby referred to that I think he was being a little ironic. It is just another form of defamation –
as a practical matter it has been thought necessary where the words denigrate the claimant’s business or professional capacity to recognize that words may be defamatory even though they in no way reflect on the character of the claimant. It may be that those “community standards” of “right‑thinking people” of which the jury is the ultimate guardian have less of a role in these cases –
I do not even say that, but I do say that the right‑thinking members of the community test is suspect and if we got back to the role of the reasonable person, we would have no troubles. He goes on –
and it has been suggested that the correct approach is to ask whether the tendency of the words is to convey to the reader that the claimant’s fitness or competence falls short of what are generally necessary for the business or profession.
That is exactly what Justice Hodgson said in this case. Then they go on to quote:
Thus in John Fairfax Publications Pty Ltd v Gacic no reasonable jury could find that an allegation that the food was unpalatable and the service bad at an expensive restaurant was not defamatory of the person running it –
and they quote the High Court. If I could just briefly finish that line.
FRENCH CJ: Justice Hodgson does not apply a simple did it injure him in his profession as a journalist. He takes it through the gateway of reputation and critically says that ultimately that is what the trial judge did. Not at paragraph 60, but in the two following paragraphs of her direction.
MR EVATT: Yes, if we could just look at what Justice Hodgson said.
FRENCH CJ: Page 180, I think.
MR EVATT: No, it is page 177. Justice Hodgson starts paragraph 19 and goes over to page 178. Did your Honour say 178?
FRENCH CJ: No, sorry, I was referring to what he said at paragraph 28 on page 180 “I agree with McColl JA”.
MR EVATT: That is just some error in her Honour’s judgment.
FRENCH CJ: No, what I am putting to you is that he basically said the test has to go through the gateway of reputation. It is not a simple did it injure him in the practice of his profession as a journalist, but did it do so by damaging him in respect of his reputation in that profession.
MR EVATT: Yes, your Honour.
FRENCH CJ: Then he characterised what the trial judge had said as taking the test through the gateway of reputation in paragraphs 61 and 62 of her direction even though she looked like she was putting up a direct injury test in paragraph 60, but when you read the whole thing she was running a reputational test.
MR EVATT: Correct, your Honour. If I can take your Honour to appeal book page 178. Justice Hodgson said in paragraph 2:
In a case where the plaintiff alleges that the tendency is to injure his or her reputation in the area of general character and conduct, then the ordinary reasonable reader must be considered as accepting community standards and viewing the matter in the light of those standards: that is, there must be a tendency to convey to the ordinary reasonable reader who accepts community standards that the plaintiff’s character or conduct falls short of the standards.
Everybody, I think, in this Court says that that is the position, including my friend. Now, where we are at issue is paragraph 3:
However, in a case where the plaintiff alleges that the tendency is to injure his or her business reputation, then the ordinary reasonable reader must be considered as viewing the matter in the light of the reader’s understanding of what are the requirements for fitness or competence for the plaintiff’s business –
Your Honour, there is one in Gatley. I think it is paragraph 2.36. The defamation was that the plaintiff, a barrister, knows no law. The barrister knows no law. It was found to be defamatory. Now, that would not injure - cause a person to think less of the plaintiff’s personal character.
GUMMOW J: It depends what you mean by “personal character”.
MR EVATT: Of course it does, your Honour, but there has to be some definition. If personal character includes professional reputation it is hard to define. Gatley points out in one of the paragraphs that the House of Lords is yet to come up with a definition of this. Of course it means that, but ‑ ‑ ‑
GUMMOW J: Why not character, why personal character? What is the force of the word “personal” in the phrase “personal character”?
MR EVATT: But if I said it is so‑and‑so, a barrister ‑ ‑ ‑
GUMMOW J: Well, what is the answer to it?
MR EVATT: He knows no law, that would be defamatory, but it would not necessarily injure or cause a reasonable man to think less of his personal reputation. It is the same with ‑ ‑ ‑
FRENCH CJ: The problem arises more acutely – the same problem – with respect to the word “reputation”. If we take reputation to mean what people think of you ‑ ‑ ‑
MR EVATT: Which we do.
FRENCH CJ: ‑ ‑ ‑ then people can think of you in different ways. They can think of your moral character and that might attract a judgment referenced to community standards. They might think of your competence as a professional or the notion of community standards might not be so applicable there because of its moral connotation. But is there any reason that all of those things cannot be subsumed within the notion of reputation and there are just different ways of looking at how a particular statement affects reputation? It may affect your moral reputation, it may affect your reputation for competence or capacity to carry on a particular profession; it may be a bit of both.
MR EVATT: Yes, but, your Honour that is my submission.
FRENCH CJ: Yes, all right. You are all rowing in the same boat you say?
MR EVATT: We are certainly all rowing in the same boat, your Honour.
FRENCH CJ: And you say her Honour was rowing in the same boat, too?
MR EVATT: Justice Simpson?
FRENCH CJ: Yes.
MR EVATT: Yes, your Honour.
FRENCH CJ: And that is what Justice Hodgson said.
MR EVATT: But just finish - I cut Justice Hodgson off at about line 20 on page 178:
there must be a tendency to convey to the ordinary reasonable reader that the plaintiff’s fitness and/or competence falls short of what, in the understanding of the ordinary reasonable reader, are the requirements for the plaintiff’s business.
Now, what is wrong with that as a test? I mean he is a barrister. The ordinary, reasonable reader would expect him to know some law. He is a doctor, a surgeon. The reasonable reader would expect him to not be drunk when he is carrying out an operation.
I think many people look at our profession for our reputation, whether it be an archbishop or judge or eminent surgeon or vice‑chancellor and personal reputation really often only comes into question when it is attacked. Say of somebody, “Well, he is a thief”. Nobody thought about him being a thief one way or the other. I think business or professional reputation is extremely important. That is Mr Justice Hodgson’s test that I commend.
The only other test that I want to raise is again in Gatley, again the 11th edition, your Honour, at page [39], 2.1. Does your Honour have that?
FRENCH CJ: The 11th edition?
MR EVATT: The 11th edition.
FRENCH CJ: Yes.
MR EVATT: Actually, it is in 2.1 in both editions. Page [39], up the top, the authors of Gatley refer to the second restatement:
a statement is defamatory if it tends to harm the reputation of another so as to lower him or her in the estimation of the community or to deter third parties from associating or dealing with him or her.
I cannot see what is wrong with that. It is bringing the “hatred, ridicule and contempt” and “shun and avoid” up to date. Gatley goes on to say at page [52], paragraph 2.12 – they refer to the American approach, they refer to Mr Justice Holmes in a decision of Peck v Tribune 1909, which is exactly 100 years ago – I get the feeling they are a little circumspect about the American approach. In paragraph 2.12, about 10 lines down:
should the matter ever come before the House of Lords it will be necessary to consider whether there may be advantages in the test used in the United States.
This Court may very well pre‑empt the House of Lords. I think we all agree that in this abstract, unreal world of defamation this is an important issue. It is nice in defamation to get a bit away from real life.
There are a few other matters I would like to raise. It is about the directions given to the jury by Justice Simpson. They start at appeal book 145 at paragraph 54 – that is relevant here – and go over to paragraph 64 in appeal book 147. It is our submission that her Honour’s directions were without fault, do not need to be altered as far as this case is concerned ‑ ‑ ‑
FRENCH CJ: You would accept that paragraph 60, taken by itself, would be wrong?
MR EVATT: Can I take you to paragraph 60. What she says there:
Imputations (b), (c) and (d) are imputations concerned with Mr Chesterton’s reputation in his profession as a journalist and in that respect you ask yourselves whether the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist.
What, of course, she meant was damaged him or had a tendency to damage him in his reputation in that respect. My friend on page 14, paragraph 50 of his written submissions points out that there was no evidence of damage and it was wrong and therefore should be grounds for a new trial. But he did not take a direction on it. He did not correct her Honour. He did not pick her Honour up on that fault. He remained mute. But more to the point, in paragraphs 61, 62 and 64 of my friend’s written submissions – this goes over three pages – he said that her Honour’s submissions to the jury were – page 17 of his submissions, paragraph 61 – “The directions were confusing”. Then over on paragraph 62:
The “business defamation” direction undermined the vulgar abuse submission.
My friend spent about 10 minutes here this morning pointing out that this just was not a case where personal reputation clashed with business reputation. He ran strongly a case that none of the imputations were defamatory because they were all vulgar abuse, rejected by the jury for every imputation. He is going on to say that – paragraph 64:
Read against the backdrop of the parties’ addresses to the jury, the summing up as a whole was confusing and likely to mislead the jury, as well as prejudicial to the appellant’s vulgar abuse submission.
Is this Court going to run this again, vulgar abuse?
The misdirection was likely to have tainted the jury’s determinations in respect of all imputations and as such, the misdirection –
Leaving aside what my friend’s submissions were about personal reputation vis‑a‑vis business reputation, he was duty bound, if he was of the opinion that what he said in paragraphs 62, 63, 64 and 61 was correct, to hand up to her Honour the directions that he sought. Instead of that at appeal book page 148 she finishes summing‑up at paragraph 70:
Mr McHugh, is there anything you want?
McHUGH: Your Honour has already heard everything I want to say.
HER HONOUR: Do you have anything, Mr Rasmussen?
He went on for about three or four pages. But why should he be allowed now to come to this Court complaining about ‑ ‑ ‑
FRENCH CJ: It does not mean he accepts the legal correctness of her Honour’s direction at that point. The question is whether he had adequately raised what he wanted to do before the direction. That is the real issue, not what he said here.
MR EVATT: But he does not even pretend to have raised the vulgar abuse, confusing, he should have said, “Look, your directions on vulgar abuse were so confusing, it is likely to mislead the jury and they are prejudicial to our vulgar abuse submission”. There is nothing like that at all. You see, he wants a new trial on all imputations, including the personal injury imputations. Justice McColl was firmly against that. That is at appeal book 239 at paragraph 193:
Mr McHugh submitted that if the Court upheld the appeal there should be a new trial on all imputations. I can see no warrant for that course. Each of the respondent’s imputations was a separate cause of action: s 9, 1974 Act. There are no inter‑connected issues of fact relevant to the question whether the personal reputation imputations and the business reputation imputations are conveyed, and, if they are, whether they are defamatory . . .
Mr McHugh argued that the effect of the primary judge's directions undermined an argument he advanced that the matter complained of was not defamatory because it amounted to no more than vulgar abuse. He argued that the effect of the jury not being properly directed as to the business reputation imputations would have been to confuse the jury considering his argument –
why did he not say so at the time –
in respect of all the imputations that they were not conveyed because they would not lead ordinary reasonable people to think the less of the respondent, but, rather, ordinary reasonable people would understand the matter complained of as mere vulgar abuse.
I cannot accept this submission. First, the primary judge (at [17]) directed the jury that the question whether the imputations were conveyed was determined by applying the “ordinary reasonable listener”. That was the critical question to which the vulgar abuse submission was directed. Secondly, as I have explained the effect of the summing‑up was to distinguish clearly between the test to be applied by the jury in considering whether the personal as opposed to the business reputation imputations were defamatory. The primary judge clearly directed . . .
Accordingly no error has been demonstrated –
Why should they get a retrial of five out of the eight imputations? That is only, excepting for the sake of this submission, that the Court is against me on the three business reputation imputations which I ask it not to. I put it in my written submissions at page 16, paragraphs 40, 41 and 42, why I think Mr McHugh did not put his submissions before the summing‑up to her Honour as clearly – I was going to say as clearly as he has put them to this Court, but I am not quite satisfied they are all that clear here either.
The rule is that directions must be clearly sought at the conclusion of a summing‑up. The rule is not dead. It was propounded in Singleton v Ffrench and I have referred to that in paragraph 44 of my submissions on page 14. It was mentioned recently, this rule, which is:
If a party is to rely as a ground of appeal on a misdirection in the summing‑up, his Counsel must specify at the trial that portion of the summing‑up which he requires to be withdrawn. If any further direction is needed, Counsel must specify with precision what direction the trial Judge should give.
All my friend did say, “Well, look, I mentioned all this before”. He did too, over 15 pages of directions, nothing crystal clear or specific, and the rule still stands. Justice Heydon breathed some life into it again in the case of Evans v The Queen (2007) 241 ALR 400 at page 460. Justice Heydon mentioned that in a criminal case. Although his Honour dissented, I do not think the dissent had much to do with that. Justice Crennan agreed with Justice Heydon, but I do not again know that it had much to do with that point.
This all becomes important when we consider costs here. It used to be that appeals from defamation actions came to this place after verdict and complaints were made, verdict too high, too low, wrong statement of law, but the tendency these days is that appeals come up here in the interlocutory stages. We have only had a section 7A trial in this. We have got a long way to go. There is no defence. What have I led my client into? We had the decision in Gagic. It seemed sensible and common sense what Justice Beazley said, what Gatley said at paragraph 2.7 and what Chief Justice Gleeson and Justice Crennan said. It is not per incuriam.
There is abundant authority for it in some of those cases that I referred to today, even if Justice Gummow excludes Pratten, which I do not think he should. But leaving that aside, there is Mr Justice Brennan in Punch, Justice Beaumont in Random House and the others that I have mentioned. It cannot be said it is per incuriam and without authority. All these cases were in the 10th edition of Gatley and in the 11th, and my friend, I think, in fairness to him, could not find them. That is the fault, in my opinion, of the authors. The later editions of Gatley are four times longer than the earlier editions which seem more simple and easier to read.
In any event, I ask the Court to take into account that there has been no substantial miscarriage of justice here. That is rule 51.53 of the Uniform Civil Procedure Rules, which are on my friend’s authority. Even if there was a misdirection, there has to be a substantial miscarriage of justice. I would say that there was none and one would anticipate the jury coming back with the same verdict every time. I do not see why my friend should even suggest to the Court that he should be allowed to run his vulgar abuse, and he also ran a defence of reply to attack which is invalid, but although he is entitled to run vulgar abuse, he should not be allowed to do that again. Does it matter if I do not go to quarter past four?
FRENCH CJ: It certainly does not.
MR EVATT: If I sat down earlier? Am I expected to?
KIEFEL J: Could I ask you, Mr Evatt, if you could expand, please, on your paragraph 52 in your written submissions, the last sentence which has regard to, as I infer, the trial judge’s approach being founded on Gagic and what should happen to costs?
MR EVATT: Paragraph 52.
KIEFEL J: Paragraph 52, yes.
MR EVATT: That is about costs. It is not usual to read that paragraph, I do not think it is in cases, but this is an extraordinary case. It relates to what occurred at a 7A trial. As I said there is no defence. The trial probably will not be on for a year or so. Justice Simpson relied on – and I did – what the Court of Appeal and High Court said in Gacic. I have the feeling that the other side were sitting there in readiness to pounce the next time a business defamation imputation came up.
But we rely on the Court of Appeal. We rely on what was said by Chief Justice Gleeson and Justice Crennan and also Justices Heydon and Callinan. I notice that Justice Gummow and Justice Hayne were more circumspect. They kept to the issue, although I would like to take issue with Justice Gummow and Justice Hayne about Boyd, which I think is just a personal injury reputation rather than a professional. But there are very unusual circumstances here. The Court might take that into consideration.
Usually when a second trial is ordered the usual order is that the costs of the first trial are at the discretion of the court in the second trial. It is pretty well an invariable order, or certainly in defamation actions. So the costs of the first trial are at the discretion of the trial judge for the first trial, but staring us at the face if we are unsuccessful – if we are successful in holding the five personal reputation imputations then that might resound in costs in our favour. But we really run the risk of costs for the Court of Appeal and this Court, including leave, which is a formidable task for a private citizen, not that many private citizens come to this Court, but it is unusual to come to this Court and to hear before Justice Simpson that a decision of the Court of Appeal in Gacic in the High Court was all wrong. They got it mixed up.
I do not think I can add to that without treading on any toes. I will allow my friend three‑quarters of an hour for submissions in reply, your Honour.
FRENCH CJ: Lawyers are not like nature permitted to fill a vacuum. Thanks, Mr Evatt.
MR McHUGH: Your Honours, I have already put orally and in writing all of the matters upon which I would rely.
GUMMOW J: What do you want to say about Punch?
MR McHUGH: In response to what my friend said I was going to say unless there is some specific matter – if I might have Punch. Your Honours, the short answer is the one that your Honour Justice Gummow drew to my friend’s attention at page 634, 31 ALR, where Justice Brennan said:
injury to a plaintiff’s profession or trade without disparagement of reputation does not suffice to make an imputation defamatory.
So the central concept remains – disparagement of reputation, and with this case, which emerged from the Federal Court, and similarly Abbott and Costello v Random House, which came up from the ACT, in all cases where there was no jury the court has to proceed with some caution in approaching statements in the particular case about what is defamatory because in cases where there is no jury, the reasoning of the judges tends often – and I mean no criticism by this – to obscure the distinction between what was found to be defamatory in the particular case, and what the test of what is defamatory is. So, for example, one might say making a finding of fact, it is defamatory to say of X that he is incompetent without in so doing laying down a general proposition for all time that all imputations of incompetence are necessarily defamatory.
That brings me to what your Honour the Chief Justice put to my friend about sectors of reputation. The only thing I would say in relation to that is that in every case the question must be would ordinary people – the hypothetical referee – tend to think less of the person in the particular respect?
FRENCH CJ: I just wanted to try to draw that together to get some precision from you. So that had the trial judge – and we have to, of course, examine this from the point of view of what the judge is saying to the jury; there is all this stuff about Gacic swirling around in the back and community standards and jury does not know anything about that, all they hear is what the judge is directing them and if she had said to them in this case, if what was said about Mr Chesterton would cause ordinary, reasonable listeners to think less of him as a journalist then that is defamatory. I think you would accept that as a correct test, would you not?
MR McHUGH: I would have no difficulty with that.
FRENCH CJ: So the real question is then, does that differ in substance as distinct from semantic form, and if so, how from what she said at 61 and 62 where she spoke of “reputation” instead of “thinking less”.
MR McHUGH: In my submission, it does and I will have to come back very quickly to why that is so, but I answered your Honour’s question a moment ago in saying I would no difficulty with that formulation. In my submission, the correct way for the jury to be directed is to be told that the issue is “would it make the ordinary reasonable listener tend to think the less of the person in terms of whatever the particular respect is”.
FRENCH CJ: As a journalist?
MR McHUGH: In this case that would be sufficient, given that that is the nature of the imputation. It would not be necessary for the judge in every case to add those words “as a journalist”, but it would not be inappropriate.
FRENCH CJ: All this stuff about community standards is a distraction really, when one has regard to this simple test.
MR McHUGH: In one sense I embrace what your Honour says and accept it, but only on the footing that when your Honour says language about community standards is a distraction ‑ ‑ ‑
FRENCH CJ: It may not be in a moral context, a moral character, but just in relation to this kind of situation.
MR McHUGH: Well, no, your Honour. As Justice Brennan said in Lamb in the passage to which your Honours have been taken, its standards are moral or social of the general community. Now, it may be that the language of community standards tends to distract people because it raises questions of religious standards or moral standards of that kind in people’s ordinary understanding of the term, but if community standards is understood to embrace moral standards, social standards, what I think Justice Kirby referred to as occupational standards, but as understood by ordinary people in the community, then there is no difficulty with it.
The ordinary way in which a jury is addressed is not in the language of community standards. The ordinary way in which a jury is addressed is the way in which Justice Simpson in this case, in the earlier parts of her direction to which I took your Honours, addressed the jury, that that is the ordinary test of what is defamatory, something that tends to make somebody think the less. That is really as far as the direction need normally go.
A trial judge, of course, would be at liberty in a particular case to say the particular sector of reputation at issue in this case was the person’s professional reputation or reputation as a husband or whatever it might be. But I am not disagreeing with what your Honour is putting to me. I am only saying that community standards is meant to capture the idea that it is the standards applicable, so far as ordinary reasonable people in the community ‑ ‑ ‑
FRENCH CJ: You say her Honour’s references to professional reputation were not sufficient to meet the test as formulated and which you accepted?
MR McHUGH: That is right. There are two points to what I would say on that. The first is merely to refer to reputation does not assist the jury. The jury, in my submission, have to be instructed directly that the question is whether the imputation would tend to make people think the less, and that that is what harm to reputation means. In the particular directions it is really the fact that you have got paragraph 57 saying there are two ways in which it can happen and stating what I would describe is the orthodox test at 57 – this is appeal book 146 – then at 58 they are told there is another way, which is suggesting it is not that test, and there is no reference to the orthodox test within 58, then at 59 we are back to personal reputation and the orthodox test and at 60, again, we have gone the other way and her Honour is very clearly delineating between the two classes, as she calls them, at paragraph 62. In 60 there is no reference at all to the idea of tending to think the less.
What her Honour refers to is only the word “reputation” without giving it content. She has already distinguished business reputation from personal reputation and all that her Honour has said is whether the imputations, if conveyed, damaged him in that respect – that is, in the practice of his profession as a journalist. In my submission, as the Chief Justice below accepted, her Honour’s direction read as a whole made that distinction. That is why his Honour the Chief Justice below had to go on to consider Gacic.
GUMMOW J: What do you say about Justice Hodgson?
MR McHUGH: Justice Hodgson’s test – we are back at appeal book 177. That is where paragraph 19 begins. Then we come through at 178 to subparagraph (3). Part of the difficulty with subparagraph (3) is that his Honour is clearly distinguishing what is in subparagraph (2) from subparagraph (3). In subparagraph (2) his Honour is referring to “community standards” and saying that the ordinary reasonable reader must accept them but in ‑ ‑ ‑
GUMMOW J: That becomes clear from paragraph 24, does it not – what the judge says at paragraph 24?
MR McHUGH: Yes. His Honour is certainly not criticising what Justice Beazley said in that regard at all. He is embracing that. So, one comes back to subparagraph (3) and what his Honour says is:
the ordinary reasonable reader must be considered as viewing the matter in the light of the reader’s understanding –
that is the ordinary reasonable reader’s understanding –
of what are the requirements for fitness or competence for the plaintiff’s business –
That is really stated again after the colon, that the person “falls short of what” are those requirements. If his Honour is intending to convey by that that it is enough to direct the jury that if what is imputed is a falling short of whatever the standard is and that is automatically defamatory, then, in my submission, his Honour is in error and that seems to be the effect of what his Honour is putting in light of paragraph 24 and paragraph 19(2). His Honour seems to be saying that as soon as the jury finds that the imputation conveys the falling short of some standard, it is automatically defamatory, and, in my submission, there is an extra step that is required before one can say it has been harmful to reputation and that is that the consequence of that process of reasoning is that the ordinary reasonable listener thinks the less. It may well be ‑ ‑ ‑
FRENCH CJ: Is that not picked up in his words in paragraph 24 that he does not read Justice Beazley’s judgment as failing to recognise the necessity that imputations must reflect on the plaintiff’s reputation? Whether that is a correct characterisation of Justice Beazley’s judgment or not does not matter for a moment, but he is maintaining the importance of the reputational criterions or condition.
MR McHUGH: His Honour certainly is, and that is in response to an argument I put below that when one read, I think, paragraphs 56 and 57 of Gacic in the Court of Appeal, there was no reference to reputation in the test. Your Honour is entirely correct that his Honour Justice Hodgson accepts that reputation is the key. The point I am making is that in subparagraph (3) of paragraph 19 there seems to be a jump between a falling short of a standard of competence and harm to reputation.
GUMMOW J: If that is right, how did his Honour manage to uphold the bifurcated form of direction of the trial judge? That is what is mystifying me at the moment.
MR McHUGH: Your Honours, in paragraph 28 his Honour agreed there was an error in the last few lines of paragraph [60] and then he said – sorry. In paragraph 28 of appeal book page 180 in second sentence:
The question is not whether the imputations damaged the plaintiff in the practice of his profession as a journalist, but rather whether they tended to damage him in respect of his reputation.
His Honour takes the view of the summing‑up that, read as a whole, it still referred to reputation.
FRENCH CJ: You do not cavil with his proposition there. The question is whether they attempted to damage him in respect of his profession as a journalist. You accept that as a proper test.
MR McHUGH: I am sorry, I did not quite follow the words that came ‑ ‑ ‑
FRENCH CJ: The proposition, the question is whether they attempted to damage him in respect of his reputation in his profession as a journalist. You accept that as a correct statement.
MR McHUGH: I do. The question is, what is the test? In my submission, they must always be told.
FRENCH CJ: You are saying you need to say more than that in order to apply the test.
MR McHUGH: Yes.
FRENCH CJ: Reference to reputation is not enough. People do not understand what it means.
MR McHUGH: That is right. It has never been, in my experience, and I will be very surprised if my friend suggests otherwise, that the jury is directed that “defamatory” means something that affects your reputation. They are always told what is in the orthodox direction, which appeared in the earlier paragraphs of her Honour’s judgment. Your Honour, the particular concern in this case is the juxtaposition of those paragraphs that alternate in the direction, where it is very clear that her Honour is saying to the jury, “This idea of tending to think the less only applies to personal imputations”. In my submission, read as a whole – and that is the way in which Chief Justice Spigelman read it – it is being excluded.
HEYDON J: Paragraph 25 on page 140 her Honour said that “defamatory” is something that is disparaging, derogatory, damaging to reputation and makes ordinary decent members of the community think less of the plaintiff.
MR McHUGH: Yes.
HEYDON J: So in her repeated use of the expression “professional reputation” in the first two lines of paragraphs 60, 61, 62, 63 and 64 is she not saying that when you are dealing with imputations on professional reputation you are talking about something damaging to it, something that would make ordinary decent members of the community think less of the plaintiff?
MR McHUGH: Your Honour, I accept the first part – something damaging to it, but the second part of what your Honour puts, that is something which tends to make ordinary, decent people think the less - in my submission, no.‑
HEYDON J: This is a very short summing‑up.
MR McHUGH: I accept that, your Honour, but my point about it is this. If she had only had the direction that is given at paragraph 25 on 140 and equally the one at 19 on 138 which is substantially to the same effect, if that was all that there was and then her Honour referred, for example, to what is in paragraph 60 there would not be the difficulty, but the difficulty arises because when her Honour gets to paragraph 57 she erects a dichotomy between business and personal which, in my submission, if it is put as being two different ways and two different tests as her Honour is here, it cannot be sustained.
So what your Honour puts to me, in my submission, would be correct were it not for what happens between 57 and 64 where the two things are distinguished and that is the real problem here. It is entirely clear that what they were being told was this is a situation dealing with business imputations where “community standards”, as I have been calling them, or “the tendency of ordinary people to think the less” does not apply. Her Honour was absolutely concerned that she was bound by the need to give a Gacic direction.
I can only take your Honours back in 124 of the appeal book to the way in which the argument went. Mr Rasmussen, who was appearing on the second day, at about line 30 on 124 advanced the idea that there was a different test and her Honour was very troubled about what she said, what the standards were. Your Honours come over to 125, at about line 42, her Honour said:
The Court of Appeal says, and it is accepted at least by some in the High Court, that community standards are not the test for a business reputation defamation.
RASMUSSEN: Yes.
HER HONOUR: As far as I can see, they haven’t told us what the test is.
FRENCH CJ: This is all invisible to the jury. What we are really concerned about is what was said to the jury and whether they could have been misled by an incorrect application.
MR McHUGH: I accept that entirely. I rely on this because, your Honours, this illuminates the way in which her Honour addressed the jury. I have put to your Honours ‑ ‑ ‑
FRENCH CJ: Not to the jury it does not.
MR McHUGH: No, no but to your Honours it does in this sense. Her Honour made very clear in this passage that she understood – and equally the passage at the foot of 126 at line 50 where she said:
I’ll tell them there is another species of defamation which is business defamation.
Her Honour was concerned to comply with Gacic. She had said repeatedly, “I am bound by Gacic. That is what I have to direct them on”. Gacic required that they be told that what I call community standards did not apply in these cases. So, although it is implicit in the way in which her Honour delivered the ultimate direction, her Honour’s intention very clearly when she delivered it was to draw that distinction to them.
That is all I can put to your Honours, but if there is any question of, in effect, demeanour or how her Honour would have gone about it or what her Honour would have said, her Honour’s intention was to do the very thing that in my submission she did.
Unless there are any other particular questions on which your Honours need to hear me, in particular, if your Honours are troubled by the suggestion that the point was not taken, then I would say only this. Her Honour ruled after full argument, told us what the direction would be beforehand, that there was no occasion to go back afterwards. May it please the Court.
FRENCH CJ: Thank you, Mr McHugh. The Court will reserve its decision. The Court adjourns to 9.15 tomorrow morning.
AT 3.49 PM THE MATTER WAS ADJOURNED
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