Tolega Pty Ltd v Sandell - [2011] SASC 100

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
TOLEGA PTY LTD v SANDELL
[2011] SASC 100
Judgment of The Honourable Justice Anderson
22 June 2011
MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
DEFAMATION - PRIVILEGE - QUALIFIED PRIVILEGE - IN GENERAL
DEFAMATION - PRIVILEGE - QUALIFIED PRIVILEGE - STATEMENTS MADE IN RESPECT OF A DUTY OR INTEREST - PARTICULAR STATEMENTS - IN PROTECTION OF DEFENDANT'S OWN INTEREST
DEFAMATION - PRIVILEGE - QUALIFIED PRIVILEGE - STATEMENTS MADE IN RESPECT OF A DUTY OR INTEREST - PARTICULAR STATEMENTS - ON MATTERS OF PUBLIC INTEREST - WHAT CONSTITUTES PRIVILEGED OCCASION, COMMUNICATION OR CONDUCT
Appeal from decision of a magistrate - respondent published newsletter which contained imputations defamatory of the appellant - whether common law defence of qualified privilege made out by appellant in respect of publication - whether an occasion of qualified privilege existed - whether defamatory imputations contained in the publication were sufficiently connected to the privileged occasion.
Held: Magistrate erred in determining first that the defamatory publication was not made on a privileged occasion and secondly that the defamatory imputations were not sufficiently connected to the privileged occasion - appeal allowed.
Aged Care Act 1997 (Cth) Part 4.1, s 54-2 and s 67-5; Quality of Care Principles 1997 (Cth), referred to.
Megna v Marshall [2010] NSWSC 686, applied.
Aktas v Westpac Banking Corporation Ltd [2010] HCA 25; Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; Manefield v Childcare NSW [2010] NSWSC 1420, discussed.
Adam v Ward [1917] AC 309; Holmes a Court v Papaconstuntionos [2011] NSWCA 59; Bennett v Cohen [2009] NSWCA 60, considered.

TOLEGA PTY LTD v SANDELL
[2011] SASC 100
g
Civil
ANDERSON J
Introduction

This is an appeal by way of rehearing from the decision of a magistrate who found the defendant (the present appellant) had published a newsletter containing imputations that were defamatory of the plaintiff. The Newsletter was published on 4 November 2005. The only issue on appeal is whether the magistrate correctly dealt with the issue of qualified privilege.
The magistrate found that the plaintiff had established that the words contained in the newsletter conveyed four imputations that were defamatory of the plaintiff. The plaintiff was awarded damages exceeding but reduced to the jurisdictional limit of $40,000 plus interest and costs. The issue on appeal is whether the magistrate should have found the defence of qualified privilege for defamation was made out in respect of the publication. The defendant does not appeal against the finding that the imputations were conveyed, or on the question of damages.
In an appeal by way of rehearing, the appellate court is placed in the position of the trial judge. The appellant court must decide on the proper inference to be drawn from facts that are either undisputed or are established by the findings of the trial judge. The appellate court is required to consider suggested errors of fact-finding and is obliged to give the judgment which in its opinion ought to have been given in the first instance. See Warren v Coombes (1979) 142 CLR 531 at 551 and CSR Ltd v Della Maddalena (2006) 224 ALR 1 at [16].
At the time of the defendant’s publication, the Defamation Act 2005 (SA) had not come into force.
Background
The appellant is the Approved Provider of the Bartonvale Nursing Home located at Enfield (“the Nursing Home”), pursuant to the Aged Care Act 1997 (Cth) (“the Act”). The respondent at the relevant time was employed by the appellant at the Nursing Home as a personal carer.
In mid 2005, management implemented a number of changes to staff practices at the Nursing Home in an attempt to address deficits in nursing care. Subsequently, an independent consultant was appointed by the Nursing Home to investigate allegations of harassment by the Nursing Home staff.
In a report following the investigation as well as dealing with the harassment allegations, recommendations were made that the quality of care provided at the Nursing Home be investigated as a matter of urgency.
Pursuant to Part 4.1 of the Act, Approved Providers of aged care facilities are required to meet “Quality of Care Principles” made by the Minister under the Act. Section 54-2 of the Act states that the Quality of Care Principles may set out Accreditation Standards for the provision of residential care.
The Quality of Care Principles 1997 made by the Minister under the Act set out four principle Accreditation Standards:
(1)Management systems, staffing and organisational development
(2)Health and personal care
(3)Resident lifestyle
(4)Physical environment and safe systems
There are 44 expected outcomes across the four Accreditation Standards which the Nursing Home was required to comply with at all times.
On 20 October 2005, the Commonwealth Aged Care Standards Accreditation Agency (“the Agency”) conducted a review audit of the Nursing Home. The Agency produced a report in which it identified evidence that the appellant as the Approved Provider of the Nursing Home had not complied with the Accreditation Standards (“Serious Risk Report”). It was noted in the Serious Risk Report that, “during the review audit, the assessment team identified evidence of serious risk to the health, safety or well being of residents…”. The report recommended that the Secretary to the Commonwealth Department of Health and Aging impose sanctions on the Nursing Home.
On 21 October 2005, following the Serious Risk Report, the Commonwealth Department of Health and Aging (“the Department”) issued a notice of its decision to impose sanctions on the Nursing Home under s 67-5 of the Act (“the Sanctions Notice”). The Sanctions Notice stated that the Nursing Home was not complying with the Accreditation Standards and consequently there was “immediate and severe risk” to residents in its care. In particular, the notice identified non-compliance by the Nursing Home with Accreditation Standard 2 (Health and Personal Care) and Standard 3 (Resident Lifestyle). A reason that prompted the Department to impose sanctions was because the Agency’s Serious Risk Report had found that there were specific incidents of inadequate pain and skin care management at the Nursing Home and staff practices did not respect the privacy and dignity of residents.
There were two sanctions imposed by the Department, the effect of which was:
(a)new admissions to the Nursing Home would not receive Commonwealth Government funding from 21 October to 21 January 2006; and
(b)revocation of the Nursing Home’s approval as an approved provider of aged care services unless the Nursing Home appointed an approved nurse advisor for a period of six months to assist in compliance with the nursing home’s responsibilities.
The Sanctions Notice required the appellant to promptly remove the risk to care recipients and implement appropriate procedures to ensure there is no reoccurrence of the non-compliance.
On 24 October 2005, the Agency produced a detailed document entitled “Assessment Team’s Statement of Major Findings from a Review Audit” (“Assessment Document”). The Assessment Document itemised the findings from the review audit. The Nursing Home was found to be non-compliant with the Accreditation Standards and in particular, it was found to be non-compliant in 27 of the 44 expected outcomes. It was further found that residents were at serious risk in four of the outcomes, including serious risk to privacy and dignity.
In response to the second sanction imposed by the Department, nurse advisor Carla Baron and a consultant Neil Baron were engaged by the appellant to assist the Nursing Home to comply with the Accreditation Standards. On 25 October 2005, Ms Baron sent a memorandum to staff at the Nursing Home advising them that a private investigator had been engaged to investigate certain allegations of “resident abuse”.
On 25 October 2005, the Appellant notified the respondent by letter that she was suspended from employment in response to allegations that the Respondent had bullied a member of staff.
Also on 25 October 2005, the Agency produced a report entitled “Assessment Team’s Support Contact Record”. The report detailed the four expected outcomes identified as non-compliant by the review audit as well as the improvements set by the agency to mitigate Serious Risk. In particular, the report stated that the Nursing Home must—
Ensure residents’ privacy, dignity and confidentiality is recognised and respected. Implement appropriate strategies is response to incidents of staff behaviour that impacts on residents’ dignity and ensure that staff do not threaten or intimidate residents.
The report also notes that further to a meeting with the Agency earlier that day, six Nursing Home staff had been suspended from duty and had received letters informing them that they were not to attend the home or contact any staff, residents or relatives.
On or about 26 October 2005, the South Australian Office of the Department sent a letter to residents and representatives of the Nursing Home advising them of the Agency’s concerns regarding the safety, health and well-being of residents following its audit and the sanctions that have been imposed on the Nursing Home as a result of these findings. The consequences of the sanctions are explained as:
… that the operator’s approval as a provider of aged care services will be revoked unless a nurse advisor is appointed for a period of six months and the operator will not be eligible for funding for a period of three months.
The letter also stated that:
The Department has asked the approved provider to arrange a meeting to give information to all residents, relatives and representatives about the current situation.
By letter dated 27 October 2005, the Aged Rights Advocacy Service Inc (“ARAS”) wrote to Mr Baron explaining it had been involved in discussions with residents and their families in response to the allegations levelled at the Nursing Home. ARAS noted that residents and their family representatives had voiced their concerns regarding longstanding bullying and victimisation of residents across a period of months and even years. ARAS stated that management of the Nursing Home should address this “most serious situation” urgently. The letter states:
The allegations are about a group of staff members, and their repeated, organised and intentional behaviours. The allegations are indicative of staff misusing their power to target and dominate very vulnerable older people who are unable to defend themselves for fear of retribution.
The meeting for residents and representatives was held on 4 November 2005 and was attended by approximately 60 people. At the meeting, the process of the Agency’s review audit was detailed, along with measures taken by the Nursing Home to address deficiencies. On that same day, a newsletter was prepared by the Appellant which set out, “Information given to Residents and Relatives at a Meeting on 04.11.05”. The Newsletter stated that “serious allegations” had been made at the meeting “in relation to bullying and harassment of residents by some staff members”. The Newsletter also stated that:
As a result of these serious allegations four personal carers and two nursing staff were suspended on full pay on October 25^th 2005 pending further investigations. Two additional personal carers were suspended on October 29^th 2005.
And that:
Some of the behaviour that has been alleged during the investigations plays no part in an aged care facility and unacceptable behaviour must be stopped.
The respondent instituted proceedings in the Adelaide Magistrates Court claiming damages including aggravated damages against the appellant for alleged defamation arising from the publication of the Newsletter by the appellant. The respondent claimed that whilst she was not named in the Newsletter, she could be identified by recipients of the Newsletter. The appellant denied that any imputation reasonably conveyed by the Newsletter was defamatory, and in any event the Newsletter was published on an occasion of qualified privilege and was protected by that privilege. The Magistrate found in favour of the respondent.
Grounds of Appeal
The appellant raised nine grounds of appeal in its Notice of Appeal, which can be grouped and summarised as follows:
1.Grounds 1, 3, 8: The Magistrate ought to have considered all material circumstances and made findings that the circumstances in which the communication was published were such as to give rise to the requisite duty or interest in the publisher and a reciprocal interest in the recipient in receiving the publication, this creating an occasion of qualified privilege. The Magistrate ought in the circumstances to have found that the publication in question was on and in connection with an occasion of qualified privilege, that the plaintiff did not seek to make out malice, and consequently the plaintiff’s case be dismissed.
2.Grounds 2, 6, 7: The Magistrate erred in law when considering the material circumstances that gave rise to an occasion of qualified privilege and why the alleged defamatory matter was sufficiently connected to the privileged occasion to attract the defence. The Magistrate ought to have found that the publication was on and in connection with an occasion of qualified privilege and dismissed the plaintiff’s claim.
3.Grounds 4 and 5: The Magistrate ought, in circumstances where malice was not contended for by the plaintiff, to have proceeded on the basis that the falsity of the publication was irrelevant.
On appeal, the appellant seeks that the Court set aside the judgment of the magistrate in favour of the respondent and that the respondent’s claim be dismissed and that judgment be entered in favour of the appellant. The appellant also seeks that the respondent pay the appellant’s costs of the Magistrates Court action and the costs of the Appeal.
Issues
The magistrate found at [183] that the Newsletter contained imputations that were defamatory of the respondent, namely that:
1.In the course of her work as a personal carer the respondent bullied and harassed aged and otherwise vulnerable residents of the Nursing Home;
2.The respondent was unfit to work with aged persons as a personal carer.
There is no appeal in respect of the magistrate’s finding that those defamatory meanings were conveyed.
There was no plea of justification by the appellant and there was no plea of malice by the respondent.
The only question to be decided on this appeal is whether the common law defence of qualified privilege was made out by the appellant in respect of the Newsletter publication. In particular, whether the defamatory imputations contained in the Newsletter, even if made on an occasion of qualified privilege, are entitled to be protected because the defamatory remarks are sufficiently connected to the privileged occasion. That is, are the remarks “relevant, germane or sufficiently connected” to the occasion?
There is no challenge to the award of damages by the magistrate if the appellant is unsuccessful on the appeal.
Magistrate’s reasons
The magistrate commences her consideration of qualified privilege at [236] of her reasons and deals with general considerations and a discussion of the leading authorities.
The defence of qualified privilege is available to a person who publishes a defamatory statement in the discharge of a legal, social or moral duty where the statement is made to a person with a corresponding duty or interest to receive it: Adam v Ward [1917] AC 309 at 334. The rational for the defence is that the law places a greater premium on freedom of communication over the right of an individual to protection against damage to reputation: Aktas v Westpac Banking Corporation Ltd [2010] HCA 25 at [22].
The magistrate correctly identified at [237] that the common law defence of qualified privilege involves three strands of inquiry, which can be summarised as:
1.Whether the circumstances in which the communication was published were such as to give rise to the requisite duty or interest in the publisher, and the reciprocal interest in the recipient in receiving the publication, thus creating an occasion of qualified privilege (a question of law);
2.Whether the content of the communication was “relevant, germane or sufficiently connected to that occasion or subject matter” to attract the defence (a question of fact); and
3.If both occasion and relevance are established, whether the plaintiff can establish that the occasion was misused such as to give rise to a finding that the publisher was actuated by express malice.
See: Megna v Marshall [2010] NSWSC 686 at [50].
Her Honour then deals with the first inquiry as to whether there was an occasion of qualified privilege.
The magistrate stated at [257] her finding that the appellant had a duty to publish the Newsletter:
[257]… the defendant had a duty to publish information to the residents, relatives and representatives of Bartonvale about the audit that evidence of serious risk to the health of residents had been found and what the defendant was going to do or had done to address the situation....
Her Honour further stated at [259] that the recipients, being the limited readership of the residents, relatives, representatives and staff of Bartonvale, had a reciprocal interest in receiving the publication:
[259]The recipients of the newsletter clearly had an interest in being informed of the subject matter. Therefore, I conclude that “an occasion” did exist.
The question is whether the magistrate found at [259] that the first strand of inquiry had been satisfied. On the face of it there appears to be such a finding.
Her Honour then appears to have attempted in her reasons to deal with the whole field of qualified privilege in the various discussions which followed from [260]-[268]. However, she was only dealing at that stage with the question of whether there was an occasion of qualified privilege. This was after she concluded that “an occasion” did exist. Following the discussion from [260]-[268], Her Honour ultimately concluded that the publication did not occur on an occasion of qualified privilege and this seems to be at odds with the earlier finding.
Mr Trim QC for the appellant critically analysed Her Honour’s reasons and submitted that the entirety of Her Honour’s discussion at [260]-[268] was in relation to issues that were irrelevant to the first strand of inquiry. Mr Swan responded to the effect that at the end of the day any possible confusion in Her Honour’s reasons is only of concern if it can be shown that the magistrate has actually misdirected herself on the law. He submitted that the magistrate’s consideration from [255] to [268] was to be considered as a whole.
It is difficult to analyse the reasons of Her Honour. They are not clear and there is obviously some confusion in the steps which Her Honour takes in discussing the various aspects of the law. As I have said, the finding that an occasion did exist is, on the face of it, at odds with the finding that there was no occasion of qualified privilege.
If Her Honour was saying in her reasons that there was not an occasion of qualified privilege: see [268] – then I disagree. If on the other hand Her Honour is saying that there was an occasion of qualified privilege but the statements made by the defendant are irrelevant to that occasion then I also disagree for the reasons I give later.

The magistrate proceeds to deal from [269] to [275] with the second inquiry as to whether the communication was relevant and sufficiently connected to the privileged occasion so as to attract the defence.
Her Honour considers this second strand in the event that she is wrong in relation to the first strand of inquiry: see [269]. Her Honour states at [270]:
[270]I accept, therefore, that although “an occasion” did exist, that occasion did not result in an occasion of qualified privilege and therefore the answer to the first inquiry is in the negative.
Again it seems that Her Honour may be confusing the different strands of the inquiry.
The magistrate then considers the benefit to society of the Newsletter publication at [273] where she states:
[273]I further note that there was no evidence led by the defendant as to “audience” interest. Nor was there any evidence led as to what benefit or advantage to the residents, their relatives and representatives could possibly have arisen from the defamatory communication.
Her Honour then ultimately concludes at [275]:
[275]… The plaintiff’s suspension was not relevant, germane or sufficiently connected to the subject matter of the newsletter. …
Mr Trim submitted that the magistrate misdirected herself by confusing the relevant tests for the first and second strands of inquiry and in ultimately concluding that the plaintiff’s suspension was not relevant to the subject matter of the Newsletter.
Whilst I consider that Her Honour has fallen into error for some of the reasons submitted by Mr Trim, I have to decide the matter on the basis that it is a re-hearing. That means that I have to decide whether the plaintiff has established on the balance of probabilities, first, that there was an occasion of qualified privilege and, second, whether the defamatory statement made on that occasion was relevant to the publication.
Because of the conclusions which I have reached regarding both the occasion of qualified privilege and the question of whether the statements made were relevant to the occasion, I do not find it necessary to resolve in detail each of the various complaints made by Mr Trim regarding the magistrate’s reasons. I deal with his arguments shortly. In my view Her Honour has clearly proceeded on some misunderstanding of what was required in her analysis. I will deal with that in more detail when analysing the submissions put by counsel.
Submissions by counsel
Mr Trim submitted that the magistrate erred in finding that the appellant failed to establish the defence of qualified privilege. Mr Trim argued that the defendant established the Newsletter was published on an occasion of qualified privilege and that the imputations contained in the Newsletter were sufficiently connected to that occasion. It was submitted that the magistrate made a number of mistakes in her reasoning and as such Her Honour’s decision was ultimately erroneous. Therefore, he argued, the respondent’s claim ought to have been dismissed.
(a) The occasion of qualified privilege
Mr Trim submitted that the magistrate misdirected herself as to what is involved in satisfying the first strand of inquiry, that is, whether the occasion was a privileged occasion (a question of law).
Mr Trim submitted that the magistrate confused the strands of enquiry necessary to make out the defence of qualified privilege. It was further submitted that Her Honour misinterpreted two High Court decisions including her reference to a dissenting judgment as authoritative.
It is the appellant’s submission that the magistrate’s finding at [250], namely that the Newsletter was published in circumstances creating an occasion of qualified privilege, is where the first inquiry should have ended. It was argued that the only inquiry then left in establishing the defence of qualified privilege was whether the imputations were relevant or sufficiently connected to the occasion which attracted the privilege.
Mr Trim argued that the magistrate erred at law by misdirecting herself in her considerations at [260]-[267] leading to her erroneous conclusion at [268] that “although ‘an occasion’ did exist, that occasion did not result in an occasion of qualified privilege”.
Her Honour stated at [260] that:
[260]The further question which arises is whether the defendant has fairly and properly conducted himself in the exercise of [the privileged occasion].
Mr Trim submitted that such a consideration is not relevant to the first strand of inquiry. Whether a defendant has fairly and properly conducted himself is only relevant to the third strand of inquiry, the issue of malice, which was not pleaded by the respondent in this case: see the footnote to the magistrate’s reasons at [237]. Such an inquiry as to the defendant’s conduct presupposes that a privileged occasion already exists. As stated by the majority in the High Court decision of Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at [22]:
[22]If the occasion is privileged the further question which arises is whether the defendant “has fairly and properly conducted himself in the exercise of it”...
Mr Trim submitted that the fact that it was found that the information conveyed in the Newsletter was not correct is irrelevant to the issue of qualified privilege where the issue of malice is not relevant to this matter. It is the appellant’s case that the magistrate ought, in circumstances where malice was not contended for by the plaintiff, to have proceeded on the basis that the falsity of the publication was irrelevant. In the case of Manefield v Childcare NSW [2010] NSWSC 1420 Kirby J stated at [107]:
[107]The defendant has the onus of establishing that the defamatory imputations were published upon a privileged occasion and were relevant to that occasion. But once these requirements are satisfied, a number of things flow. First, the contents of the communication are protected, including the defamatory imputation, whether they be true or false and whether “harsh or hasty” (Huntley v Ward [1859] ER 589; (1959) 6 CB (NS) 514 at 517), whether reasonable or unreasonable (Roberts v Bass (supra [89]), per Gleeson CJ at [14]). The privilege protects the communication whether “it be expressed as fact or as an opinion” (Megna v Marshall (supra [87]) at [59]). Secondly, there is a presumption that the defendant publisher believed the truth of what was published. In Morgan v John Fairfax & Sons Limited (1990) 20 NSWLR 511, Hunt J said this: (at 542)
The common law presumes the existence of such a belief in the truth (where it is relevant) as soon as the occasion of qualified privilege has been established, and it requires the plaintiff then to establish its absence (as constituting malice).
As I have said earlier, the appellant submitted that the Magistrate’s finding at [268] is irreconcilable with her earlier findings at [257]-[259]. It was submitted that the earlier findings are correctly made and are consistent with the evidence.
Mr Trim also submitted that the magistrate, in her discussion of the law, misinterpreted two authorities, the result of which was that Her Honour relied upon rejected propositions as a basis for her reasoning. It was submitted that in determining whether a privileged occasion existed, Her Honour attempted to analyse the majority decision in Aktas by referring to the analysis of that decision by Kirby J in Manefield. Mr Trim submitted that the passages in Manefield at [111]-[119] relied upon by the Magistrate were adopted as if they constituted the ratio in Aktas when in fact they were merely a recitation of the plaintiff’s submissions in Manefield as to why no occasion of qualified privilege arose. This submission is correct. Her Honour has clearly confused the issue.
Mr Trim argued that the magistrate made an error in referring to a dissenting judgment as authoritative. Her Honour, in setting out the plaintiff’s submissions, referred to the dissenting reasons of McHugh J in Bashford at [73], [74] and [77] in relation to the issue of volunteering information. The magistrate stated at [235]:
The plaintiff submitted that the statement in this case is volunteered. Where a statement is volunteered, this will often be a decisive factor in determining that the occasion was not privileged.
Her Honour at [252] also erroneously referred to a passage in Bashford at [77]-[78] as being part of the majority judgment. The passage is instead again from the dissenting judgment of McHugh J in respect of a voluntarily published statement. McHugh J’s statements have recently been criticised by the New South Wales Court of Appeal in Holmes a Court v Papaconstuntionos [2011] NSWCA 59.
These criticisms, whilst justified in my view, do not necessarily lead to the conclusion that the judgment must be set aside.
Counsel for the respondent, Mr N. Swan, submitted that strict adherence to the strands of inquiry is not required in determining whether the defence of qualified privilege is made out.
Mr Swan submitted that the magistrate’s consideration of the first strand of inquiry, at [255]-[268] of her reasons, should be read as a whole. Mr Swan argued when that approach is adopted, it becomes clear that Her Honour has acknowledged that there was potentially “an occasion” relevant to qualified privilege, but that that occasion did not give rise to qualified privilege which was of any relevance to an allegation that the plaintiff had bullied and harassed aged and vulnerable residents.
Mr Swan submitted that the mere fact that the appellant may have had a duty to provide information to the residents, relatives and representatives of the Nursing Home arising from the Serious Risk Report is of no assistance to the appellant when it comes to considering whether the recipients had a reciprocal interest in receiving the publication conveying allegations as to the conduct of the respondent.
Mr Swan referred to the decision of McHugh J in Bashford at [63] as authority for the proposition that the defendant must not only have a duty in making a communication, the interest must be shown to exist in making the actual communication complained of. Although the appellant correctly pointed out McHugh J was in dissent in this case, Mr Swan submitted that this criticism is of not one of substance, as although dissenting from the majority in his outcome, McHugh J was not at odds with the majority in his reasoning on this topic.
Mr Swan also referred to the decision of Gummow J in Bashford in arguing that the privilege must attach to the defamatory imputation made and not just the communication as a whole. Gummow J stated at [135]:
The defence of qualified privilege is a plea and a confession and, as such, is predicated upon the existence of a defamatory imputation to which the privilege attaches. To speak of qualified privilege attaching to a non defamatory statement is to ignore this fundamental characteristic.
Mr Swan further submitted that for reciprocal interest to exist in the recipient, the recipient must have a need to know the information and the publisher a duty to provide it so as to enable the recipient to make an informed decision with respect the his affairs: see Bennett v Cohen [2009] NSWCA 60 per Tobias JA. Mr Swan argued that a publication of an allegation which goes beyond that necessary for qualified privilege will result in the extra statement not coming within the privilege. It was argued that it was therefore appropriate for the magistrate to consider at [260] whether the appellant had fairly and properly conducted itself – such a consideration is a separate concept to that of malice.
Mr Swan submitted that the magistrate correctly found at [262] that:
… the defendant at the time of publication knew it was false information.
He argued that falsity of information is a relevant consideration in determining whether the appellant had a duty to convey the defamatory imputation that the respondent was guilty of bullying residents, and further that the law does not recognise any duty in the appellant to publish information it knows is false.
It was argued by the appellant that the magistrate had misdirected herself at [235] in relation to the issue of volunteering information. The respondent however supports the magistrate’s consideration. Mr Swan again relied on the dissenting judgment of McHugh J in Bashford, this time in support of the proposition that the volunteering of information will often be a decisive factor against a finding of qualified privilege.
It was submitted that the magistrate correctly determined that the appellant voluntarily published the defamatory material to serve its own interest – there was no reciprocal interest in the recipient receiving defamatory material. Rather, Mr Swan argued that the appellant had engaged in a public relations exercise and was wishing to assure the authorities and the residents that it was capable of operating a nursing home to prevent losing residents.
Mr Swan, who appeared for the plaintiff, argued on the first limb that the magistrate made the correct decision but he accepts that her reasoning was somewhat confusing. Mr Swan attempted to roll the relevant questions into one which he said was consistent with the authorities. He submitted that at the end of the day the question was whether the publication went beyond what was covered by any privilege.
I later deal with these arguments and conclude that on the first limb the magistrate erred in her conclusion.
(b) The second inquiry: relevance
Mr Swan argued that the defamatory imputation that his client bullied and harassed residents was not relevant, germane or sufficiently connected to the privileged occasion. I will now deal with that aspect.
The magistrate went on to consider from [269] the second strand of inquiry in the event she was “wrong in relation to the first strand of inquiry”. Mr Trim submitted that the magistrate misdirected herself in what is involved in satisfying the second inquiry of qualified privilege, that is, whether the publication that defamed the appellant was sufficiently connected to the privileged occasion to attract the defence (a question of fact).
Her Honour stated at [270]:
... I consider that the defendant went beyond what was germane and reasonably appropriate to the occasion in publishing the additional matter that the plaintiff was guilty or suspected of bullying and harassing residents. There was no benefit or advantage to society, which has been identified by the defendant in doing so...
The “benefit or advantage to society” was a consideration by the majority of the High Court in Aktas at [35]. Mr Trim submitted that this consideration was relevant only to the first strand of inquiry. The majority did not discuss the second strand of inquiry because it found the first strand was not satisfied. Aktas is not in any way concerned with the issue of relevance. Therefore, the appellant contended that the magistrate also erred in considering the High Court’s decision in relation to the second strand of inquiry.
Mr Trim further submitted that the magistrate’s reasons at [270]-[275] were erroneous in that Her Honour focused on the inaccuracy of the imputations derived from the Newsletter. It was argued that the falsity of that which is contained in the imputation is irrelevant. The question is whether there is a necessary relationship between the imputations and subject matter of the publication. See Bashford at [191].
Mr Trim interpreted from Her Honour’s earlier remarks, particularly at [256]-[257], that the “subject matter of the newsletter” was the health, safety or well-being of the residents. It was submitted that the parts of the Newsletter which defamed the appellant related to that subject. The defamatory parts related to the steps taken by the appellant to rectify the problems identified. That is, the suspension of staff in response to a report prepared by the Agency which found abuse of residents and identified evidence of “serious risk to the health, safety or well being of residents”. It was argued the defamatory imputations arising from the Newsletter were sufficiently connected to the subject as, like the rest of the Newsletter, they concerned the health, safety and or well-being of residents at the Nursing Home and what was being done for their welfare.
Conversely, Mr Swan submitted that the appellant has determined the scope of the occasion too widely such that the qualified privilege would cover a multitude of publications. He contended that even in circumstances where an occasion of qualified privilege may be said to exist, the protection of qualified privilege will not attach to any parts of the communication which are not relevant to the privileged occasion. It is the respondent’s case that the defamatory imputations identified in the Newsletter are unconnected and irrelevant to the main statement and therefore are not protected.
In Bashford at [194], Kirby J referred to the need to define the scope of qualified privilege but pointed out:
… scientific precision is impossible by the use of such formula, in every case a judgment is evoked. In some instances the titillating character of an irrelevant defamatory imputation in an otherwise justifiable context will be plain. But in other cases the issues will be more debatable …
I do not consider this to be a case where the irrelevance of the defamatory imputations is clear. As I say later, there are reasons which point to the imputations being relevant to the privileged occasion.
Conclusion
I find that the appellant succeeds in this appeal. The Newsletter was published on an occasion of qualified privilege. I am satisfied that the circumstances were such as to give rise to the requisite duty or interest in the publisher, and the reciprocal interest in the recipient in receiving the publication. I agree with respect that the learned magistrate erred in determining that whether the defendant has fairly and properly conducted itself is relevant to the first strand of inquiry. I agree that such a consideration goes to the issue of malice and is only relevant to the third strand of any inquiry but not relevant to this case.
I do not agree with the respondent’s submission that there was no reciprocity of interest by the residents, relatives and representatives of the Nursing Home in receiving the publication. I find that the respondent incorrectly submitted that there must be reciprocity of interest in conveying the defamatory imputations as to the conduct of the appellant.
In my view, the first strand of the inquiry requires only that the publication itself have the requisite interest to the reader, not the defamatory imputations that flow from the publication. The connection between the imputations and the publication goes to the relevance issue and is to be considered in the second strand of inquiry.
In respect of the appellant’s criticisms that the magistrate incorrectly interpreted the decisions of the High Court in Aktas and Bashford, I agree with Mr Swan that it may not matter if the magistrate has nevertheless reached the correct result. It is difficult to determine what impact Her Honour’s misdirection to herself had on her determination that the occasion was not a privileged one. In any event, such consideration is not relevant given that I have found that an occasion of qualified privilege existed.
The ultimate conclusion at [268] that an occasion existed, but was not an occasion of qualified privilege can, although not clearly expressed, be understood as Her Honour saying that there was a potentially privileged occasion which did not lead to a positive finding because of the way that the defendant conducted itself. This could only be relevant if malice was an issue. Her Honour noted earlier at [237] that malice was not an issue. To that extent the reasons are incorrect.
I conclude that the magistrate was most likely attempting to say that there was not an occasion of qualified privilege even though the facts and surrounding circumstances were sufficient to create the potential for such an occasion. That is because Her Honour did not regard the defamatory statements as being sufficiently relevant to the occasion of privilege.

If that is what Her Honour was saying then I respectfully disagree. I have earlier dealt with the background facts leading up to the publication of the Newsletter.
That background includes the relevant steps taken by the Agency and the way in which the Nursing Home dealt with the adverse findings against it.
It is my view that the Newsletter was an appropriate way of discharging the duty owed by the Nursing Home. It was faced with serious allegations and as a result was requested by the relevant authority to act promptly. The Agency set out steps which it required the Nursing Home to take. It set them out in the document referred to earlier at [18] in a heading entitled “Improvements set by the agency to mitigate serious risk in the four expected outcomes”. In a series of requirements the appellant was therefore required to “ensure that the staff do not threaten or intimidate residents”.
The Agency then specifically commented in its report on the advice it had been given by the management of the Nursing Home that some staff had been suspended. The letter which followed from the Agency to the Nursing Home advocated that management address “this most serious situation urgently”. The letter referred to issues including long-standing bullying and intimidation of residents.
Finally the Australian Department of Health and Aging in its letter of 27 October 2005 required the Nursing Home to arrange a meeting “to give information to all residents, relatives and representatives about the current situation”.
The Newsletter was composed and distributed after the meeting referred to earlier. In my view it cannot be said that the defamatory material is not relevant, germane or sufficiently connected with the privileged occasion for the practical reasons I have just outlined. The Nursing Home decided to tell the whole story. Even though defamatory and inaccurate, the statements were, as I have said, sufficiently connected with the privileged occasion.
I find that the second strand of inquiry was satisfied so as to attract the defence of qualified privilege. The publication that defamed the appellant was sufficiently connected to the privileged occasion so as to attract the defence.
I allow the appeal. I will hear the parties as to costs.