Lambert Llewellin Silkman and Kevin Alexander Desreaux v Federal Capital Press of Australia Pty Limited and John Fairfax & Sons Limited [1989] ACTSC 60 (8 December 1989)

SUPREME COURT OF THE ACT

LAMBERT LLEWELLIN SILKMAN and KEVIN ALEXANDER DESREAUX v.
FEDERAL CAPITAL PRESS OF AUSTRALIA PTY LIMITED AND JOHN FAIRFAX
& SONS LIMITED
S.C. Nos. 608-609 of 1986
Defamation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Gallop J.(1)

CATCHWORDS

Defamation - whether article complained of capable of defamatory meaning - no new question of principle

Defamation - whether defamatory - necessity for injury to reputation by calling in question character or actions

Defamation - defences - contextual imputations pursuant to s.16 of the Defamation Act 1974 (NSW) - qualified privilege pursuant to s.22 of the Defamation Act 1974 (NSW)

Defences - truth and public benefit - no new question of principle

Damages - absence of an apology - relevance of conduct of the defendant - aggravation of damages - whether unjustifiable, improper or lacking bona fides

Damages - one award for injury wherever published - interest on damages awarded in defamation proceedings

Defamation Act 1974 (NSW), ss.16, 20, 22

Gatley on Libel and Slander, 8th Ed., 1981, para.41, 68, 327

The Conflict of Laws, 8th Ed., p 940

Cheshire's Private International Law, 8th Ed., p 275

Gardiner v. John Fairfax & Sons Pty Ltd (1942) 42 SR(NSW) 171

Lewis v. Daily Telegraph Ltd (1964) AC 234

Jones v. Skelton (1963) 3 All ER 952

Mirror Newspapers v. Harrison (1982) 42 ALR 487

Farquhar v. Bottom (1980) 2 NSWLR 380

Slatyer v. Daily Telegraph Newspaper Co. Limited [1908] HCA 22; (1908) 6 CLR 1

Keogh v. Incorporated Dental Hospital of Ireland (1910) 2 Ir R 577

Lang v. Australian Consolidated Press Ltd (1970) 2 NSWLR 408

Middle East Airlines Airliban SAL v. Sungravure Pty Ltd (1974) 1 NSWLR 323

Gorton v. Australian Broadcasting Commission and Walsh (1973) 1 ACTR 6

Morgan v. Odhams Press Ltd (1971) 1 WLR 1239

Mirror Newspapers Ltd v. World Hosts Pty LTd [1979] HCA 3; (1979) 53 ALJR 243

Parker v. John Fairfax & Sons Limited (Court of Appeal, 30th May 1980, unreported)

Sungravure Pty Ltd v. Middle Eastern Airlines Airliban SAL [1975] HCA 6; (1974-1975) 134 CLR 1

Hall-Gibbs Mercantile Agency Ltd v. Dun [1910] HCA 66; (1910) 12 CLR 84

Dawson Bloodstock Agencies Pty Ltd v. Mirror Newspapers Ltd (1979) 1 NSWLR 16

Steele v. Mirror Newspapers Ltd (1974) 2 NSWLR 348

Jackson v. John Fairfax & Sons Limited (1981) 1 NSWLR 36

Hepburn v. TCN Channel Nine Pty Ltd (1984) 1 NSWLR 386

Austin v. Mirror Newspapers Limited (1985) 3 NSWLR 354

Reader's Digest Services Proprietary Limited and Anor v. Lamb [1982] HCA 4; (1981-1982) 150 CLR 500

Andrews v. John Fairfax & Sons Limited (1980) 2 NSWLR 225

Bickel v. John Fairfax & Sons Limited (1981) 2 NSWLR 474

Toomey v. Mirror Newspapers Limited (1985) 1 NSWLR 173

Waterhouse v. Australiant Broadcasting Corporation (unreported decision of Kelly J., Supreme Court of the A.C.T., 23 June 1987)

Gutman v. Brian Clouston and Australian Consolidated Press Limited (unreported judgment, Supreme Court of the A.C.T., 13 July 1989)

HEARING

CANBERRA
8:12:1989

ORDER

(1) There be judgment for the plaintiff Silkman

against both defendants in the sum of $30,000.
(2) There be judgment for the plaintiff Desreaux
against both defendants in the sum of $18,000.
(3) The defendants pay both plaintiffs' costs.

DECISION

In these two actions heard together the plaintiffs sue the defendants for damages for defamation. The matter complained of by both plaintiffs was published by the first defendant as publisher and by the second defendant as proprietor of "The Canberra Times". The publication as pleaded was in the Australian Capital Territory and each of the States and other Territories of the Commonwealth. During the course of the hearing the publication relied upon was that in the Australian Capital Territory and New South Wales only.

2. The words complained of appeared in an article by Philip Castle and headed "High Tide at Ulladulla" at p B1 of the edition of "The Canberra Times" of Saturday, 15 February 1986, and are as follows:

"1. 'HIGH TIDE AT ULLADULLA
2. By PHILIP CASTLE
3. THE MAIN saloon bar in the Hotel Marlin at
Ulladulla was packed with more than 200 sweating
bodies. At 11.30 pm the air was thick with the
pungent odour of marijuana smoke. Most of the
men, in their early to mid-twenties, were in
thongs, shorts and T-shirts. Nearly all were
smoking roll-your-owns and had a beer in the other
hand.
4. Ulladulla is one of the prettiest towns on the NSW
South Coast, but according to some Canberra drug
users, it is a prime drug-supply centre.
5. People stood three to four deep at the bar. The
Wednesday night rock group was playing so loudly
that it was impossible to order a drink except by
sign language.
6. About 50 young people, mostly younger girls,
danced near the windows overlooking the harbour.
The girls seemed to be tidier than their male onlookers.
7. Within minutes, with a total lack of concern, a
tall young blond man drew the last roll-your-own
from a well-used blue Winfield packet.
8. He tapped the packet, then looked up questioning
at his mate standing behind him. His mate smiled,
picked up the packet and up-ended it, banging it
on the table. Out dropped a couple of small
plastic-wrapped powders which the blond promptly
pocketed.
9. The band was just finishing a bracket and the
crowd at the bar became thicker. Some of the
girls went outside to some parked cars.
10. Down the main street, the Princes Highway, which
in daylight is nearly always busy, two cars were
parked. Not a shop nor a garage was open. The
only action was at the Marlin, and the music could
be heard three blocks away.
11. A couple of guys were hitchhiking not far from the
Marlin. One, with the classical red-eyed look,
accepted a lift. He said he had been at the
Marlin but had run out of money. It, and the
Saturday and Wednesday night rock bands, was the
only bit of entertainment all week anywhere in the
district, he said. His parents used to live in
the area but had moved. He was down from
Queensland for a few weeks and was staying with
some mates.
12. He was looking for work.
13. He'd heard there was a job going for a roof
tiler's offsider at Burrill Lake. If that wasn't
on, he would go to "The Bay" to try his luck.
14. He believed that plenty of drugs were available at
the Marlin.
15. Not long ago, a Canberra heroin user had told me
that many drugs came to Canberra "over the
mountain from the South Coast and particularly
Ulladulla". She said she could always go back
there and be sure of scoring. Lots of Canberra
and Sydney people had moved there, and "the
connections are good".
16. "No worries," she said. "You can get what you
like there. If you can't get it around town, go
for a walk along the wharf". Other users have
made similar claims.
17. Certainly many of the locals believe their area is
alive to the growth of the "funny weed". Stories
abound. None want to be named, but the older,
longer residents are concerned. They speak of
increased break-ins and vandalism.
18. A volunteer bush firefighter said they often came
across irrigation gear besides streams. The
attractive-looking weed was nearby. They
sometimes pulled them up."
.............
19. "Regular drinkers at the Marlin say the faces that
appear at the Wednesday and Saturday nights rock
groups are nearly all "out-of-towners".
20. "When they come in, we have our few drinks and
then go home," a regular said. "Less than 10 per
cent would be from around here, but it's obvious
people are coming in for more than the music and
beer.""
..............
21. "Senior Constable Michael Hogan had been at Milton
for the past seven years. He was about to go to
Gosford. He put in any drug complaint to the
Nowra detectives.
22. All at the station would like to do more about
drugs in the district, but the resources would
have to be increased. He shrugged his shoulders
and said it became a question of how much the
community really wanted to do about it.
23. "We know about the Marlin, but everyone of us is
known and we wouldn't get within 50 metres of the
place," Senior Constable Hogan said. "Look at me
today, I have my complete day booked up doing
licence testing. What happens if there is a major
prang or a call-out to a domestic. You can tie
yourself up for quite a long time on a drug case
with the chances of getting a conviction pretty low."

3. The plaintiff Desreaux was at all material times a proprietor and the licensee of the Hotel Marlin, Ulladulla. The plaintiff Silkman was at all material times a proprietor of the said Hotel.

4. The imputations relied upon by both plaintiffs are in common form and are that the words and figures complained of in their natural and ordinary meaning were defamatory of the plaintiffs in the following respects:

"(i) That the plaintiff permitted and/or suffered
prohibited drugs to be sold on his premises.
(iii) That the plaintiff was negligent and/or
incompetent in the performance of his duty to
supervise the conduct and activities of patrons of
the hotel.
(v) That the plaintiff was guilty of encouraging the
sale and use of prohibited drugs.
(vii) That the plaintiff was not a fit and proper person
to be the licensee and/or the proprietor of a
licensed hotel.
(viii) That the plaintiff knew that drugs were being sold
in the Hotel premises but took no steps to stop
the illegal activity."

5. The joint defences of the defendants are likewise in common form in both actions. The defendants admit that they are respectively the publisher and proprietor of the daily newspaper entitled "The Canberra Times" and admit that the newspaper circulates in the Australian Capital Territory and in New South Wales but do not admit circulation elsewhere. The defendants further admit publishing the matter complained of in the Australian Capital Territory and in New South Wales. They deny that the matter complained of was in its natural and ordinary meaning defamatory of the plaintiffs and deny each and every imputation pleaded by the plaintiffs. Further, they deny that the matter complained of is capable of conveying and does in fact convey the imputations pleaded.

6. The defendants pleaded qualified privilege pursuant to s.22 of the Defamation Act 1974 (NSW) in respect of publication in New South Wales. They have pleaded truth and public benefit in respect of publication in the Australian Capital Territory. In respect of publication in New South Wales they have pleaded pursuant to s.16 of the Defamation Act 1974 (NSW) that each of the plaintiffs' imputations was published contextually in the following terms:

"(a) each of the plaintiff's imputations was published
contextually to each of the following imputations
('the contextual imputations'):
(i) the plaintiff when proprietor of the Hotel
Marlin suffered prohibited drugs to be sold
and used in that hotel;
(ii) the plaintiff was the proprietor of a hotel
in which there occurred the sale and use of
prohibited drugs;
(iii) the plaintiff was reasonably suspected by
Police of permitting and or suffering
prohibited drugs to be sold on the
premises;
(iv) the plaintiff knew that drugs were being
sold in the Hotel premises but took no
steps to stop the illegal activity.
(b) each of the plaintiff's imputations relates to a
matter of public interest particularised.
(c) each contextual imputation relates to the matter
of public interest particularised.
(d) each contextual imputation is a matter of
substantial truth.
(e) by reason that each or some of the contextual
imputations further injure the reputation of the
plaintiff."

7. Further in relation to the publication in the Australian Capital Territory, the defendants have pleaded the following primary meanings of the matter complained of and that, so understood, the matter complained of is true in substance and in fact:

"(i) the plaintiff when proprietor of the 'Hotel
Marlin' suffered prohibited drugs to be sold and
used in that hotel;
(ii) the plaintiff was the proprietor of a hotel in
which there occurred the sale and use of
prohibited drugs;
(iii) the plaintiff was reasonably suspected by Police
of permitting and or suffering prohibited drugs
to be sold on the premises;
(iv) the plaintiff knew that drugs were being sold in
the Hotel premises but took no steps to stop the
illegal activity."

8. The Hotel Marlin was built in 1948 at the corner of the Princes Highway and Wason Street, Ulladulla. It is a two-storey building with a basement bottle shop. On the ground floor it comprises a public bar, lounge bar, bistro, entrance foyer and some accommodation. On the first floor it comprises private facilities of the proprietors and managers and some additional accommodation.

9. The plaintiff Desreaux, aged 50 years, has lived most of his life in Toronto near Lake Macquarie in New South Wales. He worked as a blacksmith before becoming the licensee of the Star Hotel in Milton, New South Wales in August 1978. He held that licence until October 1979 when he acquired a 12 percent interest in the Hotel Marlin at Ulladulla. From November 1979 he jointly managed the Hotel Marlin. In June 1980 he became the licensee of the Hotel. Initially he shared the managerial duties with another and later with the plaintiff Silkman.

10. I accept the evidence of Desreaux that he and Silkman generally worked together during the day. One of them would have a few hours off in the afternoon and resume so as to enable the other to have a few hours off. They would both be present during the evening. Desreaux's duties included preparation of the dining room for breakfast, counting the tills, setting up the bars, replenishing the spirits' stock, ordering supplies, receiving and checking deliveries, helping behind the bar if necessary, and generally being present to make sure things were being properly conducted throughout the hotel.

11. The plaintiff Silkman was born in Newcastle and spent his early years there. Prior to entering the hotel business he was a butcher and owned and operated butcher shops. In 1977 he and two others became the lessees of the Toronto Hotel near Newcastle. Silkman worked there as an assistant manager for about 14 months. In September 1978 he and two others purchased the freehold of the Hotel Marlin, Ulladulla. Silkman was there as an assistant manager for 13-14 months before moving back to another hotel in Newcastle. In July 1982 he returned to the Hotel Marlin, by which time Desreaux had become a partner. In April 1986 Silkman became the licensee of the Hotel Marlin. He sold his interest in the hotel in July 1988.

12. A matter is defamatory if it tends "to lower the plaintiff in the estimation of right-thinking members of society generally" (Gatley on Libel and Slander, 8th Ed., 1981, para.41) or if it "is likely to cause ordinary decent folk in the community, taken in general, to think less of him" (per Jordan CJ in Gardiner v. John Fairfax & Sons Pty Ltd (1942) 42 SR(NSW) 171 at 172). The question is not what the defendant meant or how the words were understood by the plaintiff. The meaning to be given to the words used is the meaning they would convey to the ordinary reasonable man. They are to be construed in their natural and ordinary meaning, i.e. in the meaning in which reasonable men of ordinary intelligence, with the ordinary man's general knowledge and experience of worldly affairs, would be likely to understand them (Gatley, 8th ed para.93).

13. In Lewis v. Daily Telegraph Ltd (1964) AC 234 at 258, Lord Reid said:

"There is no doubt that in actions for libel the
question is what the words would convey to the ordinary
man: it is not one of construction in the legal sense.
The ordinary man does not live in an ivory tower and he
is not inhibited by a knowledge of the rules of
construction. So he can and does read between the
lines in the light of his general knowledge and
experience of worldly affairs."

14. In Jones v. Skelton (1963) 3 All ER 952 at 958 Lord Morris, speaking for the Privy Council, said:

"In deciding whether words are capable of conveying a
defamatory meaning the court will reject those
meanings which can only emerge as the product of some
strained or forced or utterly unreasonable
interpretation. In Capital and Counties Bank v. Henty
(1882) 7 App Cas 741, Lord Selborne said (at 745)
'The test according to the authorities, is, whether
under the circumstances in which the writing was
published, reasonable men to whom the publication was
made, would be likely to understand it in a libellous
sense.'

15. The ordinary and natural meaning of words may be either the literal meaning or it may be an implied or inferred or an indirect meaning any meaning that does not require the support of extrinsic facts passing beyond general knowledge but is a meaning which is capable of being detected in the language used can be a part of the ordinary and natural meaning of words (see Lewis v. Daily Telegraph Ltd (1963) 2 All ER 151). The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader, guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction, would draw from the words."

16. In Mirror Newspapers Ltd v. Harrison (1982) 42 ALR 487 at 492-3; 56 ALJR 808, Mason J (as he then was), with whom the other members of the court agreed, said:

"A distinction needs to be drawn between the reader's
understanding of what the newspaper is saying and
judgments or conclusions which he may reach as a result
of his own beliefs and prejudices. It is one thing to
say that a statement is capable of bearing an
imputation defamatory of the plaintiff because the
ordinary reasonable reader would understand it in that
sense, drawing on his own knowledge and experience of
human affairs in order to reach that result. It is
quite another thing to say that a statement is capable
of bearing such an imputation merely because it excites
in some readers a belief or prejudice from which they
proceed to arrive at a conclusion unfavourable to the
plaintiff. The defamatory quality of the published
material is to be determined by the first, not the
second, proposition. Its importance for present
purposes is that it focuses attention on what is
conveyed by the published material in the mind of the
ordinary reasonable reader."

17. Further relevant authorities relating to the question whether the matter complained of is capable of conveying to the ordinary reasonable reader the imputations relied upon have been collated by Hunt J. in Farquhar v. Bottom (1980) 2 NSWLR 380. The following principles are taken from his Honour's judgment (at 385-386).

18. In deciding whether the matter complained of is capable of conveying to the ordinary reasonable reader the imputations relied upon by the plaintiff, the Court must be guided and directed by the test of reasonableness. It must reject any strained or forced or utterly unreasonable interpretation. It must proceed upon the basis that the ordinary reasonable reader is a person of fair, average intelligence (Slatyer v. Daily Telegraph Newspaper Co. Limited [1908] HCA 22; (1908) 6 CLR 1) who is neither perverse (ibid) nor morbid or suspicious of mind (Keogh v. Incorporated Dental Hospital of Ireland (1910) 2 Ir R 577 at 586) nor avid for scandal (Lewis v. Daily Telegraph Limited (1963) 1 QB 340 at 374, affirmed (1964) AC 234 at 260).

19. This ordinary reasonable reader does not live in an ivory tower. He can, and does, read between the lines, in the light of his general knowledge and experience of worldly affairs (Lewis v. Daily Telegraph Ltd (1963) 1 QB 340 at 358; Jones v. Skelton (1963) SR(NSW) 644; 80 WN 1061; Lang v. Australian Consolidated Press Ltd (1970) 2 NSWLR 408 at 412; Middle East Airlines Airliban SAL v. Sungravure Pty Ltd (1974) 1 NSWLR 323 at 340).

20. I refer also to Gorton v. Australian Broadcasting Commission and Walsh (1973) 1 ACTR 6 at 11 and Readers Digest Services Pty Ltd v. Lamb [1982] HCA 4; (1982) 150 CLR 500 per Brennan J. at 505-6.

21. In what might be described as "newspaper" cases, further questions may arise as to the care with which the ordinary reasonable reader would have read a sensational article, and as to the degree of analytical attention he would apply to it (Morgan v. Odhams Press Ltd (1971) 1 WLR 1239 at 1254, (1971) 2 All ER 1269), following Lewis v. Daily Telegraph Ltd (1963) 1 QB 277; Mirror Newspapers Ltd v. World Hosts Pty Ltd [1979] HCA 3; (1979) 53 ALJR 243; Parker v. John Fairfax & Sons Ltd (Court of Appeal, 30th May 1980, unreported).

22. Counsel for the defendant submitted that the onus was on the plaintiffs to prove publication of a statement conveying a disparaging meaning of the plaintiffs' person or property. To be defamatory the statement complained of must convey a personal imputation either upon character or upon the mode in which a business is carried on (Gatley, 8th Ed., para.68).

23. Counsel relied upon Sungravure Pty Ltd v. Middle Eastern Airlines Airliban S.AL [1975] HCA 6; (1974-75) 134 CLR 1. I accept the principle as submitted by counsel, although I do not derive much assistance from that case. The issue in that case was whether the matter published in New South Wales was defamatory. That question was governed by the provisions of s.5 of the Defamation Act 1958 (NSW). As Gibbs J. (as he then was) pointed out at (p 9), the section repeated almost verbatim the words of s.366 of the Criminal Code (Qld) which themselves re-enacted s.4 of the defamation law of Queensland. It was held in Hall-Gibbs Mercantile Agency Ltd v. Dun [1910] HCA 66; (1910) 12 CLR 84 that in Queensland since the passing of those laws the question whether published matter is defamatory has depended solely on whether it comes within the words of the statute, whether or not it would have been actionable as libel or slander at common law. Gibbs J. said that s.5 of the Defamation Act 1958 (NSW) was obviously intended to have the same effect as the Queensland laws which it copied, and it was therefore necessary to turn to s.5 and not to the rules of the common law to determine whether the published words, having the meaning set out in the first innuendo, were defamatory.

24. In his dissenting judgment, Stephen J. made the point that it will be no libel at common law to publish a statement which may tend to injure a man in the way of his office, profession or trade. It will only be defamatory at common law if it involves some reflection upon his personal character or upon the mode in which he carries on his business. Stephen J. cited Hall-Gibbs Mercantile Agency Ltd v. Dun, supra, and the statements in the various judgments that for words to be defamatory of a person they must charge "something discrediting his conduct or character".

25. With the repeal of s.5 of the Defamation Act 1958, it is now no longer actionable in New South Wales merely to publish an imputation of a person by which he is likely to be injured in his profession or trade. There must be injury to reputation by calling in question a person's character or actions (Dawson Bloodstock Agencies Pty Ltd v. Mirror Newspapers Ltd (1979) 1 NSWLR 16).

26. Before the article could be read as conveying a personal imputation on the character of either plaintiff or upon the mode in which either plaintiff carried on the business of the hotel, the plaintiffs would have to be identified as persons referred to in the article. The criteria which must be satisfed were stated by Samuels JA in Steele v. Mirror Newspapers Ltd (1974) 2 NSWLR 348 at 373-374. First, there must be evidence capable of satisfying the jury that persons with particular knowledge of the plaintiff believed that the article referred to the plaintiff; secondly, there must be evidence capable of satisfying the jury that the witnesses did possess the particular knowledge of the plaintiff which enabled them to make the identification they asserted; and thirdly, that those who did identify the plaintiff were ordinary sensible readers. Finally, there must be evidence capable of satisfying the jury that those with particular knowledge of the plaintiff who, as ordinary sensible readers, read the article with the degree of latitude permitted, and who honestly identified the plaintiff as the person referred to, could reasonably come to that conclusion.

27. There was plenty of evidence identifying the plaintiffs as the persons referred to in the article. Joseph Henry Saunders, a menswear retail proprietor of Ulladulla, said that he read the article and formed the view that the article was referring to the proprietors of the Hotel Marlin, namely the plaintiffs. Ronald George Woods, another local man of commerce, said that he had read the article and formed the similar view that it referred to the proprietors of the Hotel Marlin, namely the plaintiffs.

28. Kenneth George Matthews, service station proprietor of Ulladulla, and Debra Constance Hopkins, another citizen of Ulladulla, gave similar evidence. There was similar evidence from Rosemary June Morris, Raymond Herman McDonald, John Francis Ryan and Malcolm Rodney Denyer.

29. I am satisfied that persons with particular knowledge of the plaintiffs believed that the article referred to them, that they were ordinary sensible readers and that they honestly identifed the plaintiffs as the persons referred to in the article.

30. Counsel for the defendants did not really dispute that the evidence established that the plaintiffs were identified as the persons referred to in the article. The thrust of the submission on behalf of the defendants on this aspect of the case was that ordinary sensible readers would not have reasonably concluded that the plaintiffs had done the things imputed.

31. In my opinion the article complained of is capable of conveying imputations (i) and (viii), which are substantially the same, and imputation (iii). In my opinion the article is not capable of conveying imputations (v) and (vii).

32. As Fox J. said in Gorton v. Australian Broadcasting Commission and Walsh, supra, at p 11, whether the ordinary reasonable reader would have read the matter complained of as conveying the imputations "can only be a matter of impression", but I am nevertheless satisfied in that respect. The words of the article are capable of conveying to the ordinary sensible reader that drugs were sold and used on the premises, that the plaintiffs knew of that activity going on amongst the customers, that there were reasonable steps which they could and should have taken to prevent that activity, and that the plaintiffs condoned or otherwise deliberately refrained from stopping the activity. I hold that the words are capable of that meaning and further that the ordinary reasonable reader would, as a matter of fact, have read the article as conveying those statements and hence the imputations (i), (viii) and (iii). Those imputations are derogatory of the plaintiffs.
Defences - s.16 of the Defamation Act 1974 and contextual imputations

33. I turn to the defences. The parties approached the issue of liability on the basis that the defendants will not be liable, so far as publication in a particular jurisdiction is concerned, if a defence exists according to the law of that jurisdiction for the matter published there. This approach accords with the views expressed in Dicey and Morris, The Conflict of Laws, 8th Edition, p 940; Cheshire's Private International Law, 8th Edition, p 275; Gorton v. Australian Broadcasting Commission and Walsh, supra, at p 7.

34. In relation to the defence pursuant to s.16 of the Defamation Act 1974 (NSW) and the defence of substantial truth of the primary meaning of the article in relation to publication in the Australian Capital Territory, the defendants have to prove the truth of the contextual imputations and the primary meaning, in particular that the plaintiffs were reasonably suspected by the police of permitting or suffering prohibited drugs to be sold on the premises.

35. Section 16 of the Defamation Act 1974 (NSW) reads:

"16.(1) Where an imputation complained of is made
by the publication of any report, article, letter,
note, picture, oral utterance or other thing and
another imputation is made by the same publication, the
latter imputation is, for the purposes of this section,
contextual to the imputation complained of.
(2) It is a defence to any imputation complained
of that -
(a) the imputation relates to a matter of public
interest or is published under qualified
privilege;
(b) one or more imputations contextual to the
imputation complained of -
(i) relate to a matter of public interest or
are published under qualified privilege;
and
(ii) are matters of substantial truth; and
(c) by reason that those contextual imputations are
matters of substantial truth, the imputation
complained of does not further injure the
reputation of the plaintiff."

36. The defence of contextual truth provided by s.16 was discussed by Hunt J. in Jackson v. John Fairfax & Sons Limited (1981) 1 NSWLR 36. His Honour said that the defence accepts that the matter complained of conveys the imputation pleaded by the plaintiff and that no other defence has been established in relation to that imputation. It asserts that the imputation pleaded by the defendant is also conveyed by the matter complained of (such imputation being called the contextual imputation). The defence then asserts that even though the plaintiff's imputation is otherwise indefensible, such is the effect of the substantial truth of the defendant's contextual imputation upon the plaintiff's reputation, that the publication of the imputation of which he complains did not further injure his reputation.

37. His Honour considered and identified the issues of law which will arise in relation to a defence of contextual truth (it having already been found that the matter complained of is capable of conveying the imputation pleaded by the plaintiff, to which the defence of contextual truth is pleaded by the defendant). He reformulated the issues when he came to consider them again in Hepburn v. TCN Channel Nine Pty Ltd (1984) 1 NSWLR 386. They are expressed as follows:

"(1) Does the defendant's contextual imputation (or the
combined effect of those contextual imputations
where more than one, and where appropriate to be
so combined) differ in substance from the
plaintiff's imputations to which it is or they are
pleaded as a defence?
(2) Is the defendant's contextual imputation (or the
combined effect of those contextual imputations
where more than one, and where appropriate to be
so combined) capable of being conveyed by the
matter complained of at the same time as and in
addition to the plaintiff's imputation to which it
is or they are pleaded as a defence?
(3) Is the nature of the defendant's contextual
imputation (or the combined effect of those
contextual imputations where more than one, and
where appropriate to be so combined) such that its
or their substantial truth is capable of being
rationally considered by the jury as so affecting
the plaintiff's reputation that the plaintiff's
imputation to which it is or they are pleaded did
not further injure that reputation?
(4) Is there evidence upon which the jury could find
that the contextual imputation is substantially
true?
(5) Does the contextual imputation relate to a matter
of public interest or was it published under
qualified privilege?"

38. In my opinion the contextual imputations relied upon by the defendant do differ in substance from those pleaded by the plaintiff. To allege that a person permitted or suffered prohibited drugs to be sold on his premises is different to alleging that the person was reasonably suspected by police of permitting or suffering prohibited drugs to be sold on the premises. The former is far more serious than the latter.

39. I am also of the opinion that in addition to the imputations relied on by the plaintiffs the article is capable of conveying the contextual imputation that the plaintiffs were reasonably suspected by police of permitting or suffering prohibited drugs to be sold on the premises. But I do not think that the substantial truth of the contextual imputation (suspicion) is capable of being rationally considered as so affecting the plaintiffs' reputations that the imputations for which the plaintiffs complain did not further injure their reputations. The contextual imputation is less defamatory than the imputations of which the plaintiffs complain.

40. In Hepburn v. TCN Channel Nine Pty Ltd, supra, Hunt J. said at p 405:

"The Defamation Act 1974, s 16(2)(c), requires the
defendant to establish that the publication of the
plaintiff's imputation 'does not further injure the
reputation of the plaintiff'. That phrase should, in
my view, be construed in the sense of 'does not cause
additional injury to the reputation of the plaintiff'.
The defence afforded by s 16 does not raise an issue
simply of whether the combined effect of the
defendant's contextual imputations is greater than the
effect of the plaintiff's imputation to which they are
pleaded. The defendant would not succeed even if the
jury were satisfied that that was the situation, for
obviously the plaintiff's imputation would still have
some effect upon the plaintiff's reputation
notwithstanding the effect of the truth of the
defendant's contextual imputations. I am told that, in
a previous unreported judgment of mine, I referred to
the defendant's contextual imputations as 'in effect
swamping' the plaintiff's imputation. Certainly, if
that were the situation, the defence of contextual
truth would succeed. But it is not necessary that the
defendant's contextual imputation should 'swamp' the
plaintiff's imputation. That is to put it too high
altogether, if indeed that is what I said (the judgment
itself has not been produced). But the defendant must
satisfy the jury that, such is the nature of his
contextual imputations, their truth so affected the
plaintiff's reputation that the publication of the
plaintiff's imputation to which they are pleaded did
not cause additional injury to that reputation."

41. I am of the opinion that the proper basis for a defence pursuant to s.16 does not arise. The imputations of which the plaintiffs complain are not capable of being swamped or subsumed by the contextual imputation of suspicion pleaded by the defendants. And as I have already stated, I do not think that the substantial truth of the contextual imputation (suspicion) is capable of being rationally considered as so affecting the plaintiffs' reputations that the plaintiffs' imputations did not further injure their reputations.

42. But, in any event, the substantial truth of the contextual imputation of suspicion has not been established on the evidence. There was evidence that the local police entertained a suspicion that drugs were available at the Hotel Marlin. Sergeant Brian Dennis Peters, who was Sergeant in Charge in the town of Milton, near Ulladulla, from April 1982 gave evidence that he had received certain information concerning drugs in the Hotel Marlin. He said that between 1982 and 1986 he received numerous complaints and other information about the purchase and use of drugs at the hotel. He accepted the information as being correct because of the source of the information. On a number of occasions he spoke to the plaintiff Desreaux to the effect that complaints had been received and Desreaux had denied any knowledge of such activities and expressed the view that such activities were not taking place at the hotel. Sergeant Peters had not spoken to the plaintiff Silkman on the subject. Sergeant Peters had visited the hotel from time to time, was alert to observe any drug activities, but never detected any such activities. The reputation of the Hotel Marlin with police in the area was that it was a place where drugs were sold and used.

43. Sergeant Peters further gave evidence that the author of the article, Philip Castle, came to see him in the Milton Police Station on 6 February 1986, as is reflected in the article itself. Sergeant Peters made an appropriate entry in his occurrence pad which was tendered in evidence (Exhibit 1). Sergeant Peters identified in evidence a criminal information form dated 4 December 1985 which came into existence in the course of Operation Noah, a yearly operation conducted by the New South Wales Police designed to encourage the detection of drug offences. The criminal information report recites an allegation about the fishing fleet out of Ulladulla Harbour and then goes on to state:

"Drug Squad have made enquiries regarding vessels
operating from Ulladulla and nearby Marlin Hotel where
consistent allegations of drug use are heard but all
enquiries appear to be with negative results. Drug
Squad Wollongong are aware of the above allegations.
I am of opinion drug use and selling of drugs take
place at Marlin Hotel, Ulladulla, but all efforts to
detect offenders have been with negative results. ..."

44. In cross-examination Sergeant Peters said that any report to police of a serious nature would become the subject of an occurrence pad entry. Prior to Castle's visit on 6 February 1986, there had been no significant report of any drug activity at the Hotel Marlin which Sergeant Peters had thought necessary to record on an occurrence pad.

45. Sergeant Thomas John Hanlon of the Australian Federal Police gave evidence that he was stationed at Wollongong between April 1976 and March 1985. It was part of his duties to investigate the commission of offences against Commonwealth law, including the importation of drugs. As a result of information obtained from Commonwealth offenders, he formed the suspicion that drugs were available at the Hotel Marlin.

46. I am satisfied on the evidence that around about 5 February 1986 both members of the New South Wales Police Force and the Australian Federal Police Force entertained a suspicion that drugs were available and drug transactions were being carried out at the Hotel Marlin. But I am not satisfied that any members of either Police Force entertained a suspicion that either plaintiff was permitting or suffering prohibited drugs to be sold on the premises. Accordingly I reject the defence based upon contextual imputations pursuant to s.16 of the Defamation Act 1974 (NSW).

47. I also reject the defence of substantial truth of the primary meaning of the article pleaded in relation to publication in the Australian Capital Territory. In my opinion the primary meaning is not that the plaintiffs were reasonably suspected by police of permitting or suffering prohibited drugs to be sold on the premises. Nor has the truth of that imputation been established.

48. I proceed to examine whether the defendants have proved the truth of imputations (i) and (viii), which are substantially the same, and imputation (iii). They are the imputations which I have found the article capable of conveying and which are derogatory of the plaintiffs.
Imputations (i) and (viii)

49. I remind myself that the sting of the article is that the plaintiffs knew that prohibited drugs were being sold on the premises and permitted or suffered that to happen. It would not be sufficient to make out the truth of the imputation that drugs were sold on the premises. The defendants will only succeed if they establish knowledge on the part of the plaintiffs and permission or tolerance of drugs being sold.

50. There was evidence that drugs were used on the premises on the night of 5 February 1986.

51. Philip Charles Castle, the author of the article, gave evidence that he visited the Hotel Marlin on 5 and 6 February 1986 for the specific purpose of research for the article. On Wednesday, 5 February 1986 he went to the Hotel Marlin, visiting first the main saloon area. He said in evidence that he made the observations which he subsequently reported in the article and that the article is an accurate record of those observations. He gave evidence in detail of the observations. In cross-examination he maintained that he had smelt quite a strong smell of marijuana smoke within the saloon.

52. Steven Beggs, school student of Farrer in the Australian Capital Territory, gave evidence that he would spend holidays at Ulladulla in the first three weeks of January each year. During that time he would go to the Hotel Marlin two or three times a week, usually Wednesday, Friday and Saturday nights. His purpose in visiting the hotel was to buy marijuana, listen to the live band on Wednesday nights and to buy alcohol. On those visits he had been able to buy marijuana without difficulty.

53. In cross-examination it was established that his visits to the hotel commenced in 1987 when he was 15 years of age. Because his visits were outside the relevant period, Beggs' evidence did not assist the defendants in proving the truth of the sting of the article.

54. Roy Dallos gave evidence that he was a resident of Mollymook, which is very near Ulladulla, between 1981 and 1987. Occasionally he would visit the Hotel Marlin, particularly on a Friday night when there were live bands. He said that the Hotel Marlin had a reputation as the place to purchase drugs. In late 1983 he sold amphetamines in the Hotel Marlin on one occasion. He was subsequently arrested, charged and pleaded guilty to two charges of possession of amphetamines. He was not charged in relation to the transaction in the hotel. There was no evidence from Dallos suggestive of any intolerance or knowledge on the part of either plaintiff in drug dealing in the hotel.

55. Dean Noble of Torrens in the Australian Capital Territory gave evidence that between 1985 and late 1988 he would visit his father very frequently at a caravan park at Merry Beach, Kioloa, south of Ulladulla and stay with his father. During those stays he would visit the Hotel Marlin from time to time. He said that he had been offered marijuana in the hotel on more than one occasion, but he had never accepted such an offer. Noble did not give any evidence connecting either plaintiff with those transactions.

56. Both plaintiffs and employees of the hotel gave evidence of their own observations of drug dealing in the hotel. The plaintiff Desreaux said that he had smelt marijuana in the bars on some three or four occasions. He took steps to see where the smell was coming from. On two occasions he found people smoking marijuana, ejected them from the hotel and told them not to return. Otherwise he had no knowledge of any use or dealing in drugs in the hotel. The policy of the management was that smoking marijuana would not be tolerated.

57. The plaintiff Silkman gave evidence that he had not observed any persons smoking marijuana on the night of 5 February 1986. He gave evidence about the police raid of the hotel on the following Wednesday, 12 February 1986. Apparently the police arrived armed with a search warrant and body searched everybody in the hotel. As a result one person was apprehended and charged with possession of a small quantity of marijuana. Silkman said that no police officer had ever discussed with him the availability of drugs in the hotel.

58. Mrs Debra Constance Hopkins had worked at the hotel for approximately six years as a bar attendant. She said that she had observed marijuana being smoked on the premises on only one occasion. She was not able to give a definite date. On that occasion she asked the girls involved to leave the hotel. Otherwise she had never seen people smoking marijuana on the premises or any evidence to suggest that people were dealing in drugs in the hotel, nor had she ever smelt it on any other occasions.

59. Malcolm Rodney Denyer was employed as a barman at the hotel from about November 1982 until August 1986. He said in evidence that on 5 February 1986 he was at work and did not smell any marijuana. On one occasion in the previous four years he had smelt marijuana. He looked for the person responsible but did not find anyone. He was told later that the person responsible had been asked to leave the premises. On no other occasion did he ever smell marijuana on the premises.

60. Far from being satisfied that the defendants have established the truth of the imputations, I find that the plaintiffs were conscious of the likelihood that large numbers of young people congregating in the hotel might resort to drugs and trafficking in drugs. They had a firm policy that the use of drugs and the disposition of drugs would not be tolerated in the hotel. The staff, knowing that that was the policy of the management, supported the policy and did what they could to suppress any such activity. I accept the evidence of the plaintiff Desreaux that he did whatever he could to ensure that drugs were not consumed on the premises.

61. Further, I accept the evidence of the various members of staff, for instance Mrs Hopkins, that although she recognised the existence of the possibility of young people consuming drugs on the premises, the Hotel Marlin was not one of those places where that activity was tolerated. The staff knew the policy and sought to prevent such behaviour.
Imputation (iii)

62. It follows from what I have already said that I am not persuaded that the defendants have made out the truth of the imputation that the plaintiffs were negligent or incompetent in their duty to supervise the conduct and activities of the patrons of the hotel.
Qualified Privilege

63. The defence of qualified privilege under s.22 of the Defamation Act 1974 (NSW) applies to publication in New South Wales. The onus is on the defendants to establish the reasonableness of their conduct. The relevant provisions are:

"Multiple publication.
20.(1) For the purposes of this section -
...
(c) an occasion is one of qualified privilege if, but
only if -
(i) it is an occasion of qualified privilege
"under the law apart from this Act; or
(ii) the circumstances of the publication afford
a defence of qualified privilege under
section 21 or section 22."

64. This action is concerned only with the defence of qualified privilege provided by s.22. The essential ingredients of the defence of qualified privilege under this section are set out in s.22(1).

"Information.
22.(1) Where, in respect of matter publlished to any
person -
(a) the recipient has an interest or apparent interest
in having information on some subject;
(b) the matter is published to the recipient in the
course of giving to him information on that
subject; and
(c) the conduct of the publisher in publishing that
matter is reasonable in the circumstances,

there is a defence of qualified privilege for that publication."

65. It was submitted on behalf of the plaintiffs that the defendants had failed to establish the necessary ingredient of reasonable conduct under sub-paragraph (c).

66. The relevant principles were stated by the Privy Council in Austin v. Mirror Newspapers Limited (1985) 3 NSWLR 354 at 360:

"But where a jury has rejected a defence of fair comment
upon the ground that the facts upon which the comment
is based are not substantially true the starting point
of the inquiry must be the ascertainment of those facts
which the jury have found to be untrue. A newspaper
with a wide circulation that publishes defamatory
comments on untrue facts will in the ordinary course of
events have no light task to satisfy a judge that it
was reasonable to do so. Those in public life must
have broad backs and be prepared to accept harsh
criticism but they are at least entitled to expect that
care should be taken to check that the facts upon which
such criticism is based are true."

At 361:

"If the defence of comment fails, because the facts are
untrue, and it emerges that neither the journalist nor
anyone else made any proper inquiry to ascertain the
true facts, this is a consideration that must loom
large in an evaluation of the reasonableness of the
publisher's conduct in publishing the article."

At 363:

"A publisher that is a limited company can only
discharge the duty to act reasonably through its
servants or agents and in the present case it seems
clear that the company were relying upon Mr Casey to
produce an article that it was reasonable for them
to publish. If in these circumstances it is found
that the journalist not only got his facts wrong but
had also failed to take reasonable care to ascertain
them the publishers of the newspaper must stand in
the shoes of their journalist for the purposes of
considering whether their conduct in publishing the
article was reasonable. The newspaper, the
publisher, cannot be allowed to hide behind their
journalist on the ground that it never occurred to
them that their journalist would be so careless.
The newspaper must stand or fall by the conduct of
its own journalists. Very different considerations
will of course apply to the publication of an
article by an independent contributor who cannot be
considered as either the servant or agent of the
newspaper. An independent contributor is in no
sense the alter ego of a newspaper for the purpose
of producing the article and in such circumstances
his reliability and reputation will be a very
important matter in considering whether the conduct
of the publisher was reasonable in accepting and
publishing the article if it turns out to be
defamatory and untrue."

And later:

"When a journalist wishes to make such a trenchant and
potentially damaging attack it is in the interests of
society that he should be expected to take all
reasonable steps to ensure that he has got his facts
right. The media has enormous power both for good and
ill and it would be a sorry day if newspapers were
encouraged to believe that under the shield of
qualified privilege the reputations of individuals
could be attacked by slip-shod journalism that would
provide no defence of comment because the facts on
which the attack was based were not true. Where the
defence of comment has failed because the jury has
found the facts to be untrue, a judge should examine
the circumstances leading up to the publication of
those false facts very closely before concluding that
it was reasonable to publish them."

And at 364-365:

"There will of course be cases in which despite all
reasonable care the journalist gets the facts wrong,
but a member of the public is at least entitled to
expect that a journalist will take reasonable care to
get his facts right before he launches an attack upon
him in a daily newspaper. If on inquiry it is found
that the facts are not true and that reasonable care
has not been taken to establish them courts should be
very slow to hold that the newspaper is protected by
statutory qualified privilege. The public deserve to
be protected against irresponsible journalism. The
defence of comment provides such protection by
insisting upon the newspaper establishing the
substantial truth of the facts upon which it comments.
It cannot surely have been the intention of the
legislature that this protection should be
substantially stripped away by the introduction of the
statutory defence of qualified privilege. But this
will be the result if a newspaper is able to hide
behind the actions of a careless or an irresponsible
journalist or if the court takes too indulgent a view
of the conduct of a journalist who failed to check his
facts."

The following factors were submitted as relevant to the question whether the conduct of the defendants had been reasonable in the circumstances the imputations were untrue; the article concentrated on spreading rumour and innuendo and was written in such a way as to suggest a greater problem than existed in fact; in other words, the article was written in an exaggerated way.

67. It was also relevant, so it was submitted, that the author of the article had never checked the facts or even spoken to the plaintiffs before the publication of the article, and that the article should have been rewritten in the light of the unsuccessful raid conducted at the hotel one week after the author's observations at the hotel on the night of 5 February 1986. As an example of the exaggeration, counsel for the plaintiffs relied upon the evidence of Sergeant Peters that he had not told the author of the article "We have not seen a lot of charges and only a few kills" as stated in the article.

68. There is much force in the submissions made on behalf of the plaintiffs. I find that Castles did not check the facts with the plaintiffs or anyone else in the hoel. Nor did he ever consider re-writing the article after the unsuccessful raid on 12 February 1986. The defendants have failed to make out the defence of qualified privilege as they have not proved reasonableness in all the circumstances.

69. Accordingly, all defences fail and I proceed to the question of damages. Damages

70. Damages are to be awarded for the lowering of the plaintiffs' reputations in the eyes of those who know them and are to be a vindication of the reputation in the minds of those who know them or know of them. Further damages are to be awarded for the distress, upset and indignation suffered by the plaintiffs (Andrews v. John Fairfax Limited (1980) 2 NSWLR 225).

71. I am satisfied that at the time of the publication of the article both plaintiffs were respected citizens of Ulladulla. The plaintiff Desreaux first learned about the article on the day of publication. I accept Desreaux's evidence that he was hurt and angry about the article. He immediately sought legal advice from a local firm of solicitors. He did not seek an apology, nor has he ever received an apology from the defendants. He said that he was hurt by the fact that he had not been offered an apology and claimed also to have been hurt by the particulars furnished by the defendants. I attach little significance to his evidence that he was hurt by the absence of an apology and by the particulars.

72. Although the article was canvassed in local newspaper articles, there was no objective evidence that either plaintiff was shunned or avoided by the people of Ulladulla or the district. There was no objective evidence of either plaintiff's hurt and neither plaintiff gave evidence of the other's hurt. The newspaper articles to which I have referred were supportive and comforting.

73. The plaintiff Silkman gave evidence of his hurt feelings when he read the article in "The Canberra Times". He said he thought it was very unfair and he became very upset. He too consulted local solicitors. He has not sought any apology from the defendants and he said in evidence that he was very disappointed and hurt by the fact that he had not received any apology. He further claimed to be hurt by the plea of truth. He described himself as being "devastated". I accept that Silkman's feelings were hurt by the article itself but I attach little weight to his added grievance from the pleadings and the particulars.

74. The writ of summons was issued on 17 April 1986. An amended statement of claim was delivered on 5 June 1989. There were a number of amendments to the defences. The action was heard on 5-9 June and 13 June 1989.

75. The defendants' estimate of the circulation of "The Canberra Times" issued on 15 February 1986 was, in New South Wales, 7,994. The defendants also tendered figures for net sales on the south coast of New South Wales. The figures for newsagencies supplied south of Bateman's Bay totalled 1,272 and for newsagencies north of Bateman's Bay, 358. Ulladulla is, of course, north of Bateman's Bay. The net circulation of "The Canberra Times" on 15 February 1986 was 63,718. "The Canberra Times" is a responsible newspaper published daily. Its biggest circulation is on Saturday of each week. 15 February 1986 was a Saturday. I bear in mind that each copy of "The Canberra Times" published on 15 February 1986 might well have been read by more than one reader.

76. The Hotel Marlin, and hence the plaintiffs, featured fairly prominently in the overall context of the article on the drug scene in Ulladulla. Admittedly, the article deals not only with the Hotel Marlin but also with the fishing industry and the local school. However, the author keeps coming back to the Hotel Marlin. Many Canberra people would know the Hotel Marlin. It is a well known landmark on the south coast. I have already found that both plaintiffs were respected citizens of Ulladulla. In addition, the plaintiff Desreaux was reasonably well known in some circles in Canberra, where the bulk of the circulation took place.

77. In dealing with the gravity of the damage to the plaintiffs' reputations, I follow with respect the dicta of Brennan J. in Reader's Digest Services Proprietary Limited and Anor v. Lamb [1982] HCA 4; (1981-1982) 150 CLR 500 at 507:

"When the libel is proved, some general damage is
presumed (English and Scottish Co-operative Properties
Mortgage and Investment Society Ltd. v. Odhams Press
Ltd. (1940) 1 KB 440 at p 455, 461) but there is no
reason in principle why evidence should not be admitted
to show the gravity of the damage done to a plaintiff's
reputation by the making of a defamatory imputation
independently established (see per Bowen L.J. in
Ratcliffe v. Evans (1892) 2 QB 524, at p 530; Ingram
v. Lawson (1840) 6 Bing (NC) 212 at pp 216, 217 (133
ER 84, at pp 85-86)). A jury is entitled to take
into account in assessing general damages the effect of
the libel on those who read it (Herald and Weekly Times
Ltd. v. McGregor [1928] HCA 36; (1928) 41 CLR 254, at p 263), bearing
in mind that some readers will regard the defamation
more seriously than others (Australian Consolidated
Press Ltd. v. Uren [1966] HCA 37; (1966) 117 CLR 185, at p 215). In
making its assessment, a jury is properly assisted by
evidence that the making of the defamatory imputation
found by them had an especially adverse impact upon the
plaintiff's reputation in the eyes of some group or
class in the community. 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. But if the
imputation is defamatory according to the standards of
the community generally, a particular impact of the
defamatory imputation may be proved."

78. I have already referred to the absence of any apology to the plaintiffs by the defendants and the evidence of both plaintiffs that the failure to apologise caused them added distress. Andrews v. John Fairfax & Sons Limited (1980) 2 NSWLR 225 makes it clear that the conduct of the defendant may be taken into account in aggravation of compensatory damages if it is such as to increase the hurt which the libel has caused or may be supposed to have caused. The nature of the conduct covers a wide span of circumstances as may be seen from the cases quoted in Gatley, 8th Ed., para 1327 at 544-545. The defendants' conduct need not be malicious, but if it is to affect the damages it must be in some way unjustified, improper or lacking in bona fides (Andrews v. John Fairfax & Sons Limited pp 248-250 per Glass JA, and Bickel v. John Fairfax & Sons Limited (1981) 2 NSWLR 474 at 495-497 per Hunt J.).

79. In Andrews v. John Fairfax & Sons Limited Hutley JA said at p 243:

"The failure of the defendants to retract or
apologise has been traditionally regarded as a matter
of aggravation, as it is part of 'the whole conduct of
the defendant from the time the libel was published
down to the time they (the jury) give their verdict'."

Hutley JA concluded that if the jury thought that the
failure to apologise was unjustifiable and if they were satisfied that the failure of the defendant to retract promptly "was producing harm suffered by (the plaintiff) they were justified in awarding aggravated damages".

80. In my opinion the failure of the defendants to apologise could not be regarded as unjustifiable, improper or lacking bona fides. Nor do I accept that the failure to apologise caused either plaintiff further harm. I accept that the reason for not apologising was a belief that the article was not defamatory. In this opinion, those in management of the defendants were wrong, but minds may well differ on whether the article was defamatory. The necessary elements of oppressive or unconscious wrongdoing are not established on the evidence.

81. I take into account the fact that both defendants have been put through the stress of litigation affecting their good names and reputations. I take into account also the fact that the author of the article did not take what I would regard as a simple and prudent course of checking his facts with the plaintiffs.

82. I proceed to assess damages for the publication in the Australian Capital Territory and in New South Wales. It seems to be well settled law that in proceedings for defamation the common law permits a plaintiff who has pleaded a single cause of action against a newspaper defendant to recover as ordinary compensatory damages for the injury to his reputation caused by the entire issue of that newspaper published by the defendant, be it within the State in which the action is brought or elsewhere (Toomey v. Mirror Newspapers Limited (1985) 1 NSWLR 173; Waterhouse v. Australian Broadcasting Corporation, unreported decision of Kelly J., 23 June 1987).

83. In my judgment, the article was more damaging to the plaintiff Desreaux. He was, as I have already found, well known not only on the south coast but also in Canberra. The plaintiff Silkman apparently has no particular connection with Canberra.

84. In my opinion an adequate and reasonable assessment of damages against both defendants in respect of the plaintiff Desreaux is $25,000 and I assess that sum.

85. In respect of the plaintiff Silkman, I assess the sum of $15,000.

86. In Gutman v. Brian Clouston and Australian Consolidated Press Limited (delivered 13 July 1989), I considered the question whether interest should be awarded on damages for defamation. I venture to repeat what I said in that matter.

"In Bogusz v. Thomson and Another, Miles CJ
declined to award interest on the same basis as in
actions for breach of contract or personal injury. In
Australian Consolidated Press v. Driscoll (1988) A
Torts R. 80-175, the Court of Appeal of New South Wales
held that interest was appropriately awarded on damages
for defamation because the award comprised damages for
vindication relating to the date of publication and
damages for injury to reputation and injury to feelings
accruing between the time of publication and the trial
of the action. The Court of Appeal there reviewed its
earlier decision in John Fairfax & Sons Limited v.
Kelly (1987) A Torts R 80-091; (1987) 8 NSWLR 131 and
adopted the reasoning of McHugh JA, as he then was, in
that case.
The usual rate of interest applied by this court
in areas other than defamation is 14 percent and the
court usually takes account of the fact that all the
damage is not suffered when the cause of action accrues."

87. Applying that approach to the award of $25,000 in respect of the plaintiff Desreaux, and adjusting the resultant figure somewhat, I think that an appropriate award of interest in his case is $5,000. Accordingly there will be judgment for the plaintiff Desreaux against both defendants in the sum of $30,000.

88. In applying the same approach to the award of $15,000 in respect of the plaintiff Silkman, I think that an appropriate award of interest is $3,000. Accordingly there will be judgment for the plaintiff Silkman against both defendants in the sum of $18,000.

89. I order that the defendants pay both plaintiffs' costs.