David Zalmon Baffsky v John Fairfax and Sons Limited [1991] ACTSC 58; (1991) 106 FLR 21 (14 August 1991)

SUPREME COURT OF THE ACT

DAVID ZALMON BAFFSKY v. JOHN FAIRFAX and SONS LIMITED
S.C. No. 1417 of 1987
Defamation - Fair and Accurate Report - Damages
[1991] ACTSC 58; (1991) 106 FLR 21

COURT

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

CATCHWORDS

Defamation - Plaintiff well known solicitor - Publication of newspaper articles referring to report by Corporate Affairs Commission - Whether matter complained of portrayed plaintiff as being knowingly concerned in illegal and improper activities - "Improper" - Imputations - Whether allegations sufficiently reputed in matter complained of - Relevant test - Natural and ordinary meaning of words used - Reasonable reader - Knowledge of.

Fair and Accurate Report - Qualified privilege - Principles of - Whether applicable to reports tabled in other Parliaments than place of publication - Malice - Lack of good faith - Authorities.

Damages - Basis of assessment - Injury to reputation and feelings - Aggravating factors

Companies (NSW) Code, s.292

Defamation Act 1974 (NSW), s.17, s.18, s.19, s.25, Sch 2 cl 3

NSW Acts Application Act 1984

Defamation Amendment Act 1909, Sch 2 Pt 12, s.5

Wake v John Fairfax and Sons Ltd (1973) 1 NSWLR 43

ABC v Comalco Ltd (1986) 12 FCR 510

Bik v Mirror Newspapers (1979) 2 NSWLR 679

Jones v Skelton (1963) 63 SR (NSW) 644

Lewis v Daily Telegraph Ltd (1964) AC 234

World Hosts Pty Ltd v Mirror Newspapers Ltd (1976) 1 NSWLR 712

Farquhar v Bottom (1980) 2 NSWLR 380

Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293

McCormick v John Fairfax and Sons (1989) 16 NSWLR 485

Tolley v J.S. Fry and Sons Ltd [1931] UKHL 1; (1930) 1 KB 467

Hewitt v WA Newspapers (1970) 17 ACTR 15

Fullam v Newcastle Chronicle (1977) 1 WLR 651

Uren v Australian Consolidated Press Ltd (1964) NSWR 272

Packer v Mirror Newspapers (1968) 3 NSWR 436

Ron Hodgson v Belvedere Motors (1971) 1 NSWLR 472

Turner v Bulletin Newspaper Co Pty Ltd [1974] HCA 25; (1974) 131 CLR 69

Monte v Mirror Newspapers Ltd (1979) 2 NSWLR 663

Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36

Mayfield-Smith v Mirror Newspapers (1982) 2 NSWLR 419

Hepburn v TCN Channel 9 Ltd (1984) 1 NSWLR 386

Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260

Whelan v John Fairfax and Sons Ltd (1988) 12 NSWLR 148

Council of the Municipality of Drummoyne v ABC (NSWCA; Gleeson C.J., Kirby P, Priestley JA; 7/12/90; unreported)

Morosi v 2GB (1980) 2 NSWLR 418

Laws v Mirror Newspapers Ltd (SC NSW; Hunt J; 26/7/83; unreported)

John Fairfax and Sons v Hook (1983) 47 ALR 477

Webb v Times Publishing Co Ltd (1960) 2 QB 535

Hook v John Fairfax and Sons Ltd (1982) 42 ACTR 17

Blackshaw v Lord (1984) QB 1

Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41

Thom v Associated Newspapers (1964) 64 SR (NSW) 376

Thompson v Truth and Sportsman Ltd (1932) 34 SR (NSW) 21

Anderson v Nationwide News Pty Ltd (1970) 72 SR (NSW) 313

Burnett and Hallamshire Fuel Ltd v Sheffield Telegraph and Star Ltd (1960) 1 WLR 502

Cook v Alexander (1974) 1 QB 279

Horrocks v Lowe (1975) AC 135 (HL)

McKenzie v Mergen Holdings Pty Ltd (1990) 20 NSWLR 42

Readers Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500

McCarey v Associated Newspapers Ltd (No. 2) (1965) 2 QB 86

Jools v Mirror Newspapers (1984) 56 ACTR 1

Waterhouse v Station 2GB Pty Ltd (1985) 1 NSWLR 58

Uren v John Fairfax and Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118

Smith v John Fairfax and Sons Ltd (1987) 81 ACTR 1

Bogusz v Thomson (1989) 95 FLR 167

Steele v Mirror Newspapers Ltd (1974) 2 NSWLR 348

Coyne v Citizen Finance Ltd (1991) 99 ALR 252

John Fairfax and Sons Ltd v Kelly (1987) 8 NSWLR 131

MBP (SA) Pty Ltd v Gogic (1991) 65 ALRJ 203

HEARING

CANBERRA
14:8:1991

Counsel for the Plaintiff: Mr J. Spigelman QC with Mr S. Walmsley

Instructing solicitors: Messrs Snedden Hall and Gallop (Mr Bill Andrews)

Counsel for the Defendant: Mr Nicholas QC with Mr Lynch

Instructing solicitors: Messrs Mallesons Stephen Jaques

(Mr Ian Angus)

ORDER

There be judgment for the plaintiff in the sum of $68,800.00.

DECISION

On 29 October 1987 a report was tabled in the Parliament of New South Wales. It was the result of an investigation pursuant to s.292 of the Companies (New South Wales) Code. That investigation was as to -

"circumstances involving the acquisition of any
financial benefit or other interest or advantage by
Mr Abraham Gilbert Saffron through the dealings of
Harbourside Amusement Park Pty Limited trading as Luna
Park Sydney, Luna Park Merrylands and Luna Park Milsons Point."

2. It was set up on 7 April 1986.

3. Mr Baffsky, the plaintiff, was, when the investigation was set up, Chairman of Directors of Harbourside Amusement Park Pty Limited ("Harbourside"). Mr Abraham Gilbert Saffron ("Saffron") was not directly, or through any company of which he was a director or shareholder, interested in Harbourside.

4. The investigation resulted from claims by a former director of Harbourside, Mr Bryan Sydney Treasure ("Treasure") that Harbourside was, in essence, a "front" for Saffron and was being operated so as to provide illegal and tax-free profits by the "skimming" of cash which should have been declared as turnover to the State Government.

5. It was against that background that a group of three articles was published by the defendant on 28 October 1987. The by-line was that of Mr Ross Coulthart.

6. One article commenced on page 1 of "The Sydney Morning Herald" of that date. That article concluded on page 4. The other two articles were grouped with that article on page 4. There was, also, on page 4 a photograph of Luna Park.

7. The text of these articles I set out hereunder.

"SAFFRON'S CLOSE TIES WITH LUNA PARK
by Ross Coulthart
Abraham Saffron's links with the Luna Park
entertainment complex are even stronger and more
extensive than previously realised, according to a
special Corporate Affairs Commission report.
The detailed report, which was tabled in State
Parliament yesterday has confirmed many of the
previously-alleged links and uncovered a series of
others, including business, family, social, and
circumstantial connections.
Some of the main links between Mr Saffron and Luna
Park's operators which are revealed or confirmed by the
final report are:
. Saffron controls a trading trust named Arcadia
Machines which supplies the pinball and amusement
machines to Luna Park.
. A nephew of Saffron's Mr Samuel Cowper, was the
secretary and financial controller of Harbourside
at the same time that he was the director of a
trust called the Marshin Trust, which is the
"focal-point of Mr Saffron's business activities".
. Two of the original directors of Harbourside,
Mr Colman Bertram Goldstein and
Mr Harold Gerald Goldstein, are relatives of
Saffron's. Saffron and Mr Colman Goldstein have a
"social relationship". Mr Goldstein and Saffron
have also travelled together and met up overseas.
. Mr Colman Goldstein and Saffron also have a
business relationship. Saffron is found by the
report to have introduced Mr Goldstein
to offices (sic) of Mercantile Credits Ltd so that
Goldstein could get finance for the redevelopment
of Luna Park.
. Saffron also invited Mr Goldstein to visit an
amusement park in Los Angeles, which was being
managed by his son Alan Saffron. This was to view
an amusement ride so that Mr Goldstein could buy
it for Luna Park. Mr Goldstein said he believed
the LA amusement park was either owned or backed
by Abe Saffron.
. A Goldstein family company, Morrison's Outdoor
Catering Pty Ltd, paid for Saffron's fare to
travel to the US for this trip.
. Mr David Baffsky, a solicitor and present
Harbourside chairman, with whom Saffron has
extensive professional dealings, was found to have
had a role in the physical preparation of the
tender for the Luna Park lease.
. If Harbourside ever suffers cash flow problems, it
is Mr Baffsky who provides the extra funds from
his own personal accounts, according to a witness
in the CAC report.
. The former managing director of Harbourside,
Mr John Lavigne, "alluded that there was a close
relationship between Mr Baffsky and Abe Saffron in
respect to Mr Baffsky's position as a director of
Harbourside".
. A Harbourside director, Mr Brian Sydney Treasure,
also revealed that he had a business relationship
with Mr Saffron - when he was the chairman of the
Perth radio station 96-FM as early as 1978, well
before the Luna Park dealings.
. Saffron acknowledged that he knows Mr Warwick
Colbron, the solicitor who prepared Harbourside's
tender for Luna Park.

As well, the 17 month long investigation, to which a
National Crime Authority investigator was seconded,
heard allegations of massive illegal skimming from the
park's takings, inadequate financial accounting, and
dubious tendering methods.
Despite this, the CAC report concluded that it could
not find any evidence that Saffron had an actual or
beneficial ownership in Luna Park. It said it could
find no evidence that Saffron was
involved in anything other than "normal business dealings".
The CAC's final report details a close relationship
between the chairman of the board of directors of
Harbourside, Mr David Baffsky, and Saffron. It quotes
evidence from the former managing director of
Harbourside, Mr John Lavigne, that there was a "close
relationship" between Mr Baffsky and Saffron in respect
of Mr Baffsky's position as a director of Harbourside.
Harbourside's directors have repeatedly denied that
there is a major link between Saffron and Luna Park.
The listed directors shown on the original tender were:
Sir Arthur T. George, Mr Michael David Edgley, Mr Brian
Sydney Treasure, Mr Harold Gerald Goldstein, and Mr
Colman Bertram Goldstein. Mr David Baffsky was not
listed as a director on the original tender.
The report also found that some of these people gave a
number of contradictory explanations as to how certain
people became associated with the tender for the lease
of the Luna Park site.
Harbourside won the lease to Luna Park as the result of
a tender submitted on June 17, 1980. That lease was
signed by the then Minister for Lands, Mr Lin Gordon,
on May 27, 1981.
The CAC inquiry into alleged links between Saffron and
the operators of Luna Park was ordered in April 1986
following allegations raised in State Parliament by the
Member for South Coast, Mr John Hatton (Independent),
in late October 1985.
The State Government initially said that it could not
give an assurance that Saffron was not the ultimate
beneficiary of the lease of Luna Park, but denied there
was anything in Luna Park of which the Government
should be ashamed. Officials of Harbourside
subsequently revealed the identities of the ultimate
beneficiaries of the Luna Park lease to dispel what
they said were "wild and totally unfounded rumours"
that Saffron was a beneficial owner of the park lease.
They also denied claims that Saffron controlled Luna
Park through "front-men".
The CAC was told to investigate whether Abe Saffron
obtained any financial benefit or other interest or
advantage through his dealings
with Harbourside. It concluded that there was "no
evidence available to the delegates that suggest that
Abraham Gilbert Saffron has any actual or beneficial
ownership in Harbourside".
It did find that the man who has the ultimate control
of Harbourside, Mr David Baffsky, had a professional
relationship with Abe Saffron.
In its conclusions, the CAC report found there was no
evidence available to suggest that Saffron's dealings
with Harbourside, through Arcadia, were other than
normal business dealings "except that the appointment
of Arcadia may have been influenced by the family
relationship between Colman Goldstein and Abraham Saffron".
Mr Colman Goldstein said he showed Saffron through Luna
Park prior to its being reopened so that he could see
where his machines would be put.
Saffron at first denied attending Luna Park either
before the machines were installed or afterwards, but
he later admitted that he went there before December
1980 with this (sic) grand-children.
There were also criticisms of the quality of Saffron's
machines. Despite this Colman Goldstein's wife
allegedly said that "Col has to put in Abe's machines
and that is it".

INQUIRY FOUND NO EVIDENCE OF SCAM
by Ross Coulthart
Allegations that a nephew of Abe Saffron was in control
of massive "skimming" of the millions of dollars in
cash takings from Luna Park are probably the most
startling of those raised in the Corporate Affairs
Commission inquiry.
Mr Raymond Treasure, the former general manager of Luna
Park operator, Harbourside, who said he resigned
"because there was tremendous hanky-panky going on" at
the park, alleged that 15 per cent of an estimated $20
million in annual cash takings was misappropriated.
According to the report he alleged that "everyone that
worked there (Luna Park) ... was fully aware that there
was incredible skimming going on all over the place".
The CAC investigated Mr Treasure's allegations but said
it could find no evidence to back them.
It did find evidence to support his claims that the
financial accounting methods at the park had been inadequate.
Mr Treasure also alleged that there was a cover-up of
the injuries sustained by members of the public in an
accident on an unsafe Luna Park ride.
Detailing the alleged cash skimming, he said the cash
was being taken out of the park in envelopes and
alleged that the skimming was under the control of a
nephew of Saffron's, Mr Samuel Cowper.
Mr Treasure said that Cowper was, in turn, under the
control of Mr David Baffsky, a solicitor who had acted
for Abe Saffron, and who was also chairman of Harbourside.
Harbourside pays the Government 5 per cent of the
takings under the terms of the lease that it has over
Luna Park. So if the takings were being skimmed, it
means that the Government could be losing a
considerable sum of money.
"It had just amazed me that a state government set up
an arrangement that they got a percentage of the take,"
Mr Treasure said in his evidence.
Mr Treasure estimated the first year's turnover at Luna
park to be in excess of $20 million cash, and described
the controls set up by the State Government as "nothing
short of pathetic".
"There weren't any controls at all and it was just a
wide-open bucket - take your money out by the bucket
load," he told the CAC.
"I could see what was going on; I had no control over
it and I can say this is going to have to last a
certain while before the Government or somebody twigs
that the place is just ... buckets of tax-free money
going out by seven figure amounts in my opinion, and I
said, well, ... that made me very nervous."
CAC investigators pressed Mr Treasure for more details
of the alleged skimming taking place at Luna Park.
"There was money going out of that place in big, fat
envelopes from closed meetings in Goldstein's office.
I have no doubt that the skim was in seven figures," Mr
Treasure said.
"We did a spot check one day without Goldstein's
knowing or Cowper knowing, by sighting one person on
one game for the day and we clocked a 15 per cent skim
on that game."
He said he saw very thick envelopes going out from
Mr Colman Goldstein's office on two or three occasions.
The meetings took place behind closed doors with
Mr Baffsky, Mr Colman Goldstein, Mr Samuel Cowper, and
possibly Mr Hal Goldstein.
He also alleged the audit control by the Government and
by the external auditors was hopeless. Auditors had
come in about a week before Luna Park opened, and in
the two and a half months that he was there, he never
saw them again.
Mr Treasure's criticisms were backed by an independent
audit of the park prepared by a senior management
auditor of the Department of Lands, Mr Michael Silk.
In his November 1985 report, Mr Silk said there was no
sound control over cash flow which did not comply with
the lease agreement for the park.

He confirmed that the Luna Park cash management system
was easily open to abuse. For example, only 22.9 per
cent of the claimed $1.4 million of gross revenue
received over 1984/5 was accounted for by means of a
cash register or a mechanical device.
"It can be seen from Michael Silk's examination that
the system of internal control relating to the cash
takings, like any system of this nature, was not
infallible and funds could be removed from the system.
However, to achieve this, it would require collusion
between individuals operating the system," the CAC concluded.
In his evidence to the CAC, the secretary of the
Department of Lands, Mr Stanley Day, said it was not
until the questions were asked in Parliament about Luna
Park that his department decided an audit investigation
was needed.
Mr Day then told the CAC that the Department of Lands
did another audit investigation in August this year but
no weaknesses were revealed in Luna Park's cash control
system on this occasion.
He said the department had also hired a firm of
accountants to report on the audit investigations of
his department to see if "there are any further steps
that may be taken to further
safeguard the Government's share of the gross revenue".
In investigating Mr Treasure's claims, the CAC
interviewed senior management of Harbourside, including
Mr Cowper and Mr Baffsky, and employees of the Park.
All denied the claims made by Mr Treasure, so the CAC
then concluded it could find no evidence to back the
allegations.
The Harbourside company has never traded at a profit.
In 1985, it finished the year with a net loss of
$887,846. As the CAC said, "to successfully win the
tender and then not generate sufficient income to make
a net profit required an explanation".
But the State Government's take is at least protected
from the book losses because it is entitled to a
percentage from the gross turnover of the park.
Mr Treasure also alleged to the CAC that there was a
cover-up of an accident involving a roller coaster at
Luna Park which Harbourside had bought secondhand from
Dusseldorf, Germany.
He said that a lot of safety features were removed from
the ride and five weeks after it was opened (the report
does not specify the date), there was a "massive
accident" when the roller coaster rolled backwards and
injured about four people.
He described how Mr Baffsky had said after the accident
that they were going to bring in Asher Joel, "another
member of the Jewish mafia", to handle the public
relations for the park in case of any further accidents.

FAMILY TRUST AT HEART OF EMPIRE
In 1980 Abe Saffron was running scared.
Believing somebody might try to murder him, he set
about rearranging his complex commercial empire,
establishing a small family trust as the core of his
operations.
In the event of Saffron being murdered by his enemies,
the Marshin Trust would provide for his family, so he
put his sisters and a nephew in as directors.
The CAC investigators who interviewed Saffron concluded
that the Marshin Trust was the "focal
point" of Saffron's business empire, although it
apparently pulled in only about $1.2 million worth of
income during the 1985 financial year.
The Marshin Trust provided CAC investigators with yet
another series of links between Saffron and Luna Park.
Harbourside, the operators of Luna Park, and the
Marshin Trust are linked in three ways.
The first major Marshin link was through
David Zalmon Baffsky, a partner in the legal firm,
Simons and Baffsky. Saffron is also a well-known client
of this firm. Mr Baffsky is also chairman of
Harbourside and one of the major shareholders.
During 1981 and 1982, the Marshin Trust made
distributions totalling $155,000 to a company called
China Acceptance. Then later, in 1983, David Baffsky
used $70,000 in funds he got from China Acceptance to
invest in Harbourside.
This raised the possibility that there was a direct
financial link between Saffron's private trust and Luna
park. But, although the CAC was suspicious, it
accepted Mr Baffsky's explanations and concluded "it is
unlikely that the funds distributed from the Marshin
Trust are the same as those that were subsequently
placed into Harbourside."
The second link was provided by Saffron's nephew,
Samuel King Cowper, who was a director of the Marshin
Trust between June 1980 and July 1985.
For part of this same period he was the accountant,
company secretary and financial controller for Harbourside.
When Mr Cowper was asked about his role in the Marshin
Trust he denied attending its meetings. But the CAC
had minutes of Marshin's directors meetings which
showed he was present. Mr Cowper claimed "privilege"
when he was challenged about his earlier denials.
The final Marshin-Luna Park link was by virtue of the
Trust being the repository of all the income from
another Saffron company, Arcadia Machines.
It was Arcadia which got the tender to supply and run
the various amusement machines at Luna park, although
the CAC investigators found there had been no true
tendering process.
"There would appear to be some doubt that the selection
of Abraham Saffron's trading trust to supply amusement
machines to Luna Park was an arms-length transaction"
the report said."

8. The plaintiff, then a Sydney solicitor and partner in a firm known as Simon and Baffsky, read those articles on the day they were published.

9. He said that he was aware of the Harbourside report. He felt that report had cleared him of any suggestion that he had been knowingly concerned in any illegal or improper conduct. Accordingly, he says that he was "angry and upset" when he read what Mr Coulthart had written. He said he was left with the impression that the articles portrayed him as being knowingly concerned in such illegal and improper activities, which he felt did not fairly represent the Harbourside report or the truth of the matter.

10. Mr Baffsky is active and well-known in both legal and commercial circles. He is and was involved in foundations supporting schools and hospitals. He also enjoys a high reputation in and is involved with the affairs of the Jewish community.

11. During that day, the plaintiff was contacted by about twenty persons. The plaintiff was asked whether he had any relationship with Saffron over and above that arising (as they all knew) from the fact that the plaintiff and his firm had provided legal services to Saffron.

12. The plaintiff said that he found having to explain himself to these persons "very uncomfortable". Even last year (1990), the question of his relationship with Saffron was raised by a Japanese architect who had, apparently, read the articles.

13. It was said that the articles made the following imputations against the plaintiff:-

"(a) That the plaintiff has participated in the
criminal embezzlement of large sums of money from
Harbourside;
(b) That the plaintiff has so conducted himself as to
give rise to the suggestion that he had
participated in the criminal embezzlement of large
sums of money from Harbourside;
(c) That the plaintiff engaged in an improper
association with reputed criminal,
Mr Abraham Saffron;
(d) That the plaintiff had so conducted himself as to
give rise to the suggestion that he had engaged in
an improper association with a reputed criminal,
Mr Abraham Saffron;
(e) That the plaintiff assumed the position of
Chairman of Harbourside and acted as such so as to
provide Mr Abraham Saffron with a falsely
respectable front for his illegal activities;
(f) That the plaintiff was knowingly concerned in the
removal by Harbourside of safety features on a
roller coaster which caused that roller coaster to
be a serious danger to the public;
(g) That the plaintiff attempted to conceal the true
facts concerning a serious roller coaster accident
at Luna Park so as to prevent the public learning
that the accident had been caused by Harbourside's
reckless removal of the roller coaster's safety features;
(h) That the plaintiff was a member of a group of
organised criminals and participated in their
criminal activities."

14. The plaintiff denied that there was any truth in any of these imputations. The defendant did not in any way seek to challenge that denial.

15. Mr Robert Corlett and Mr Russell Bainton QC testified to the plaintiff's good character and favourable reputation. There was no challenge by the defendant to their evidence attesting as it did to the reputation for competence, honesty and integrity enjoyed by the plaintiff.

16. Indeed, it was asserted by the defendant that no defamatory imputation arose from the articles. It follows that it is common ground that Treasure's allegations were absolutely false insofar as they cast any aspersions upon the plaintiff.

17. The Harbourside report was referred to in other newspapers. "The Financial Review" (28 October 1987) headed its report "NO SAFFRON LINK WITH LUNA PARK". "The Telegraph" reported the opposite and, referring to Saffron as "convicted tax cheat", headed its report "SAFFRON LINKED TO LUNA PARK". It reported that link, however, as confined to relationship by blood to some Harbourside directors and as the supplier of some "amusement and pinball machines" through Arcadia Amusements and Vending Pty Limited ("Arcadia"), a Saffron owned and controlled company. "The Telegraph" said the Harbourside report disclosed that the supply contract could have been influenced by those relationships. Those articles did not mention the plaintiff.

18. "The Age" (28 October 1987) reported "PROBE FINDS NOTHING AMISS IN SAFFRON HARBOURSIDE LINKS". That article was by-lined "Ross Coulthart, Sydney". This article did refer to "a close relationship" between the plaintiff and Saffron and that the plaintiff as a solicitor "had extensive professional dealings" with Saffron. It did not, however, detail Treasure's allegations as the articles in "The Sydney Morning Herald" did.

19. On 4 November 1987, the plaintiff's law firm, on his behalf, wrote to complain of the articles in "The Sydney Morning Herald". They said the articles imputed:-

"(a) That Mr Baffsky engaged in an association with
Mr Abraham Saffron concerning an alleged financial
interest of Mr Saffron in the operation of Luna
Park and in circumstances suggesting activity on
Mr Baffsky's part designed to cloak or dissemble
that financial interest.
(b) That Mr Baffsky participated in the unlawful or
improper withdrawal of large sums of money in cash
from Harbourside Amusements Pty Limited, the
operator of Luna Park, of which company he was a
director and substantial shareholder."

20. It was further contended that the articles did not fairly present the Harbourside report. A draft apology was presented.

21. On 12 November 1987, the defendant replied. It did not accept:-

"(i) that the imputations you allege arise from the
article; and
(ii) that the article is not a fair summary of the CAC report."

22. The invitation to apologise was declined.

23. This letter, the plaintiff says, caused him further disappointment and distress.

24. Proceedings were then commenced in this Court on 20 November 1987. On 10 December 1987, the plaintiff's firm wrote to the defendant's solicitors. It renewed the plea for an apology. On 14 December 1987, the plaintiff wrote to the Editor of "The Sydney Morning Herald". It was a plea for the media to stop linking his name to Saffron's. He pointed out that his "link" with Saffron was merely that he (amongst others) had undertaken legal work on a professional basis for Saffron.

25. On 23 December 1987, a reply was sent to Mr Baffsky by the defendant. It corrected the plaintiff's assertion that no previous reply had been sent. On 24 December 1987, the defendant's solicitors, effectively, reiterated the defences asserted by the defendant itself on 12 November 1987.

26. It is fair to observe that the defendant has consistently maintained those defences in its pleadings and in its conduct of this case before this court.

27. Was the matter complained of defamatory of the plaintiff? It is, of course, no answer to allegations which in terms impute unlawful and deceitful activity to say that they are allegations made by a third party merely being repeated by the defendant. (See Wake v John Fairfax and Sons Ltd (1973) 1 NSWLR 43; ABC v Comalco Ltd (1986) 12 FCR 510.)

28. The real question is whether those allegations are so apparently and expressly refuted in the matter complained of, that, as read and understood by an ordinary reader, they would convey no inference defamatory of the plaintiff.

29. It is the defendant's contention that the case is similar to Bik v Mirror Newspapers (1979) 2 NSWLR 679. In that case, the reported statements, whilst repeating an allegation made against the plaintiff, also reported that it had been completely refuted. There were expressions of pleasure that the plaintiff was finally cleared of any suggestion of blameworthiness. The "antidote" more than banished the "bane".

30. Certainly, it would not be necessary to go as far as the article in Bik's case to provide an "antidote". It would be enough if the reader, of the kind to be assumed, would regard the article as asserting the plaintiff's innocence of any wrongdoing.

31. The characteristics of the "average" reader have been variously described:-

Jones v Skelton (1963) 63 SR (NSW) 644 (PC), 650 -
"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."

32. The test for the jury was said to be that of the understanding of "the reasonable reader" or "reasonable and fair minded readers" (651).

33. In Lewis v Daily Telegraph Ltd (1964) AC 234, Lord Reid described the "average reader" in the context of an allegation that (inter alia) the plaintiff's affairs were being investigated by the fraud squad, as

"... the ordinary man, not avid for scandal ... I do
not think he would infer guilt merely because an
inquiry is on foot." (260)

34. The plaintiff's name is not mentioned in the headlines to the various articles, but it is clearly reasonable to assume that the whole of the articles in question would be perused by the "reasonable reader" (see, for example, World Hosts Pty Ltd v Mirror Newspapers Ltd (1976) 1 NSWLR 712, 725).

35. The test was elaborated upon by Hunt J. in Farquhar v Bottom (1980) 2 NSWLR 380, 385-6:-

"...I must be guided and directed by the test of
reasonableness. I must reject any strained, or forced,
or utterly unreasonable interpretation ... I must
proceed upon the basis that the ordinary reasonable
reader is a person of fair, average intelligence ...
who is neither perverse ... nor morbid or suspicious of
mind ... nor avid for scandal ...
...He can, and does, read between the lines, in the
light of his general knowledge and experience of
worldly affairs ... the ordinary reasonable reader is a
layman, not a lawyer, ... his capacity for implication
is much greater than that of the lawyer ...
...The ordinary reasonable reader of such an article is
understandably prone to engage in a certain amount of
loose thinking..."

36. In Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293, applying such a test, Gibbs C.J. accepted that a statement that a person had been arrested and charged conveyed no imputation that he is, or probably is, guilty of the offence charged but could convey an imputation that he was reasonably suspected by responsible authorities of such an offence (see also Mason J., 301).

37. I also note that the mere fact that the plaintiff is described as having acted as a solicitor does not prevent a defamatory inference from arising. Nevertheless, if the defamatory inference is contended to arise merely from an assertion of such a connection it may well be insufficient, (for example, see McCormick v John Fairfax and Sons (1989) 16 NSWLR 485, 495-6, per Hunt J.).

38. The allegations concerning "skimming" and of "covering up" an accident caused by ignoring safety standards (or by-passing them) do not depend on any particular assumptions. They are clearly defamatory. However, the suggestions of "links" with "Abraham Saffron" (or "Abe Saffron") are also said to convey defamatory imputations.

39. Those imputations depend on an assumption that Saffron is "a reputed criminal". Indeed, they require a conclusion that Saffron is believed by the average reader to be an organised crime figure. It is obvious enough that the court has no personal knowledge supporting the truth or falsity of such a contention.

40. There was no evidence called to suggest that Saffron had such a reputation.

41. Notwithstanding this, the very mention of possible links between Saffron and Harbourside and the possibility that Saffron had acquired a "financial benefit or other interest or advantage" seems to have warranted the Corporate Affairs Commission of New South Wales (CAC) being directed to conduct an investigation. It seems to have been regarded as significant for persons interviewed by the investigators to seek to distance themselves from Saffron (see, for example 12.13 - 12.14, CAC Report). The "Telegraph Mirror" was able, without apparent fear of contradiction, to refer to Saffron as a "convicted tax cheat".

42. If the reputation of Saffron was not a matter of public knowledge, an imputation arising from such reputation would be a true innuendo only. Thus, unless I am able to conclude that the average reader could and would draw an inference that Saffron was a reputed criminal, the imputations framed in reliance on that finding will not be capable of being defamatory of the plaintiff in their natural and ordinary meaning (see Tolley v J.S. Fry and Sons Ltd [1931] UKHL 1; (1930) 1 KB 467; Jones v Skelton (supra); Lewis v Daily Telegraph Ltd (supra)). It is otherwise, of course, where a limited class of readers, having special knowledge, know the facts by reason of which the alleged defamatory imputation arises. In that situation, true innuendoes must be pleaded and proved (see Hewitt v WA Newspapers (1970) 17 ACTR 15; Fullam v Newcastle Chronicle (1977) 1 WLR 651; World Hosts Pty Ltd v Mirror Newspapers Ltd (supra)).

43. It seems to me that it would require an unrealistic judicial disingenuousness to pretend a lack of awareness of the reputation of Saffron in the general community. No doubt, a lawyer would point out that despite that reputation, Saffron has not been found guilty of running organised crime activities. Nevertheless, that is his reputation and "noscitur a sociis" ("by their friends you will know them") or guilt by association is certainly part of the ordinary reader's perception, if the association in question is presented as being out of the ordinary or tainted with illegality.

44. It would not be defamatory to point out that the plaintiff provided legal services to Saffron. It is defamatory to suggest that he had a personal interest in advancing Saffron's illegal purposes or activities.

45. I now turn to the imputations pleaded. They are each alleged to depend for their defamatory "sting" on the natural and ordinary meaning of the words used in the matter complained of. In every jurisdiction other than New South Wales, those meanings are merely particulars (see Uren v Australian Consolidated Press Ltd (1964) NSWR 272; Packer v Mirror Newspapers (1968) 3 NSWR 436; Ron Hodgson v Belvedere Motors (1971) 1 NSWLR 472; Turner v Bulletin Newspaper Co Pty Ltd [1974] HCA 25; (1974) 131 CLR 69).

46. That differentiation, however, quite properly makes little difference in pleading. It is desirable that imputations alleged by a plaintiff appear in a pleading, particularly where the matter complained of is extensive. It is also reasonable to demand of such imputations a degree of precision and accuracy similar to that demanded by the Rules and practice in New South Wales (see Monte v Mirror Newspapers Ltd (1979) 2 NSWLR 663; Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36; Mayfield-Smith v Mirror Newspapers (1982) 2 NSWLR 419; Hepburn v TCN Channel 9 Ltd (1984) 1 NSWLR 386; Morris v Newcastle Newspapers Pty Ltd (1985) 1 NSWLR 260; Whelan v John Fairfax and Sons Ltd (1988) 12 NSWLR 148; Council of the Municipality of Drummoyne v ABC (NSWCA; Gleeson C.J., Kirby P, Priestley J.A.; 7/12/90; unreported)).

47. However, I observe that there is a greater need for precision where the purpose is to ensure that each side knows what case is to be met at trial. It is different where there is no complaint of surprise or misunderstanding before trial but a complaint of imprecision is made at the hearing. The real purpose of the specification of the cause of action is to ensure that the matter really at issue is fairly tried and determined. It is as much the defendant's responsibility as it is the plaintiff's to ensure that the pleadings are, before trial, properly adapted to that end. It may be, of course, that a particularised imputation cannot be sustained because it is extravagantly or imprecisely pleaded. There may be other cases where the imputation describes several possible defamatory meanings but the defendant has failed to ask the plaintiff to specify the particular meaning the plaintiff will seek to establish as being conveyed by the matter complained of. To leave such a complaint until final address is to invite the response that the defendant either well understood the particular meaning being contended for by the plaintiff or was prepared to accept the imprecision and meet the various possible meanings allegedly imputed by the matter complained of.

48. I now turn to consider whether the imputations particularised do in fact arise from a fair reading of the matter complained of.

49. Imputations (a) - (b) - participation in the criminal embezzlement of large sums of money from Harbourside.

50. Even without regard to Saffron's reputation, the inference is clear that the articles allege an illegal misappropriation of funds for criminal purposes.

51. The following quotations from the matter complained of make this clear.

(50-53) "As well, the 17 month long investigation, to
which a National Crime Authority investigator was
seconded, heard allegations of massive illegal skimming
from the park's takings, inadequate financial
accounting, and dubious tendering methods."
(109-119) "Allegations that a nephew of Abe Saffron
was in control of massive "skimming" of the millions of
dollars in cash takings from Luna Park are probably the
most startling of those raised in the Corporate Affairs
Commission inquiry.
Mr Raymond Treasure, the former general manager of Luna
Park operator, Harbourside, who said he resigned
"because there was tremendous hanky-panky going on" at
the park, alleged that 15 per cent of an estimated $20
million in annual cash takings was misappropriated.
According to the report he alleged that "everyone that
worked there (Luna Park) ... was fully aware that there
was incredible skimming going on all over the place".
(125-127) "Detailing the alleged cash skimming, he
said the cash was being taken out of the park in
envelopes and alleged that the skimming was under the
control of a nephew of Saffron's, Mr Samuel Cowper."
(131-133) "Harbourside pays the Government 5 per cent
of the takings under the terms of the lease that it has
over Luna Park. So if the takings were being skimmed,
it means that the Government could be losing a
considerable sum of money."
(136-157) "Mr Treasure estimated the first year's
turnover at Luna park to be in excess of $20 million
cash, and described the controls set up by the State
Government as "nothing short of pathetic".
"There weren't any controls at all and it was just a
wide-open bucket - take your money out by the bucket
load," he told the CAC.
"I could see what was going on; I had no control over
it and I can say this is going to have to last a
certain while before the Government or somebody twigs
that the place is just ... buckets of tax-free money
going out by seven figure amounts in my opinion, and I
said, well, ... that made me very nervous."
CAC investigators pressed Mr Treasure for more details
of the alleged skimming taking place at Luna Park.
"There was money going out of that place in big, fat
envelopes from closed meetings in Goldstein's office.
I have no doubt that the skim was in seven figures," Mr
Treasure said.
"We did a spot check one day without Goldstein's
knowing or Cowper knowing, by sighting one person on
one game for the day and we clocked a 15 per cent skim
on that game."
He said he saw very thick envelopes going out from
Mr Colman Goldstein's office on two or three occasions.
The meetings took place behind closed
doors with Mr Baffsky, Mr Colman Goldstein,
Mr Samuel Cowper, and possibly Mr Hal Goldstein."

52. There are exculpatory references.

(120-122) "The CAC investigated Mr Treasure's
allegations but said it could find no evidence to back
them. It did find evidence to support his claims that
the financial accounting methods at the park had been
inadequate."
(187-190) "In investigating Mr Treasure's claims, the
CAC interviewed senior management of Harbourside,
including Mr Cowper and Mr Baffsky, and employees of
the Park. All denied the claims made by Mr Treasure,
so the CAC then concluded it could find no evidence to
back the allegations."

53. These exculpatory references are, in my opinion, insufficient to remove the defamatory sting created by the repetition of Mr Treasure's allegations.

54. The effect of the "no evidence" assertions is further reduced by references which tend to support Mr Treasure's credibility.

(121-122) "It did find evidence to support his
(Treasure's) claims that the financial accounting
methods at the park had been inadequate."
(162-166) "Mr Treasure's criticisms were backed by an
independent audit of the park prepared by a senior
management auditor of the Department of Lands,
Mr Michael Silk. In his November 1985 report, Mr Silk
said there was no sound control over cash flow which
did not comply with the lease agreement for the park."
(191-199) "The Harbourside company has never traded
at a profit. In 1985, it finished the
year with a net loss of $887,846. As the CAC said, "to
successfully win the tender and then not generate
sufficient income to make a net profit required an explanation".
But the State Government's take is at least protected
from the book losses because it is entitled to a
percentage from the gross turnover of the park.
Mr Treasure also alleged to the CAC that there was a
cover-up of an accident involving a roller coaster at
Luna Park which Harbourside had bought secondhand from
Dusseldorf, Germany."

55. If to the above are added the references to the plaintiff's "close association" with Saffron, the family relationships to Saffron of other Harbourside directors and officers, the references to Arcadia, Marshin Trust and to the financing of Luna Park and the reputation of Saffron, it seems to me inescapable that imputation 4(a) arises from a fair reading of the matter complained of.

56. The reader is not merely left to choose between contradictory assertions of which the defamatory assertion has only equal or even lesser weight. The defamatory assertion emerges as the author's preferred view. Of course, merely to have left open such a defamatory inference would suffice to support the imputation (see Morosi v 2GB (1980) 2 NSWLR 418, 419F - 420A; Farquhar v Bottom (supra), 387G - 388B; Laws v Mirror Newspapers Ltd (SC NSW; Hunt J.; 26/7/83; unreported); ABC v Comalco Ltd (supra), 516-7, 571-2, 590). In this case, the defendant has done significantly more than that.

57. It follows, in my opinion, that the "reasonable reader" would conclude that the plaintiff had sought to misappropriate cash takings from Luna Park to avoid taxation imposts of one kind or another either for the benefit of himself and his co-venturers alone or for the benefit of Saffron as well.

58. Imputations (c) - (d) - improper association with a reputed criminal.

59. I have already concluded that the reasonable reader, wherever in the Commonwealth of Australia he or she resides, is likely to know of Saffron as a reputed criminal.

60. The defendant complains that the word "improper" is of such indefinite meaning that the alleged imputations are defective and should be struck out. Morris v Newcastle Newspapers Pty Ltd (supra), per Hunt J., was relied on. In that case, Hunt J. had to determine whether certain imputations were capable of arising from the matter there complained of. Of course, there is a difference between the New South Wales legislation and the common law elsewhere. Hunt J. noted this difference at p 263-4. I have, nevertheless, indicated that the precision demanded by the 1974 Act (and the rules made to give effect to it), is a desirable outcome in any event.

61. In Morris, the plaintiff who was a member of Federal Parliament, was alleged to have attempted to interfere in the affairs of a City Council. He alleged the interference would be perceived as "improper". The Court found the context of the article left open a variety of possible meanings of "improper" in that context. It could have meant "inappropriate" or "unwise" and the article in question was not regarded as capable of imputing a higher level of impropriety than that. At p 272 (F), his Honour said:-

"The description of the plaintiff's attempted
intervention as "improper" is, of course, one of very
uncertain import. The trouble which can be caused by
the inclusion of the word "improper" in an imputation
is well illustrated by the case of Cairns and Morosi v
John Fairfax and Sons Ltd (1983) 2 NSWLR 708; it is
discussed in Hepburn v TCN Channel Nine Pty Ltd (1984)
1 NSWLR 386 at 403-404. For this reason, the word
"improper" should not be used in imputations unless the
context in which it is so used makes clear its intended
meaning (and the degree of impropriety involved).
Where the matter complained of itself uses the word
"improper", the pleaded imputation should be expressed
in terms which demonstrate the precise sense (that is,
the degree of impropriety) in which the plaintiff
contends the word would have been understood (see Ellis
v Grant at 925) - subject, of course, to the jury's
right to find an imputation in different terms but
which does not differ in (272) substance from it:
Morosi v Mirror Newspapers Ltd (1977) 2 NSWLR 749 at 771.
I accept that the ordinary reasonable reader could
conclude that the plaintiff's attempted intervention in
the affairs of the Newcastle City Council was
inappropriate - which is a synonym for improper at the
very lower end of the scale of impropriety - or that it
was unwise. I do not accept that the ordinary
reasonable reader could conclude that the degree of
impropriety on the part of the plaintiff was any more
serious than that. In my view, the description
"inappropriate" is available from the circumstances
upon which the plaintiff relies for the conclusion that
he had acted improperly (which are set out earlier),
together with:
(v) the general description given to the plaintiff's
attempted intervention as, in effect, yet another
example of the rancour (that is, the bitter resentment
or ill-will) which pervades Newcastle's politics; and
(vi) the reaction which that attempted intervention is
said to have produced in the plaintiff's opponent,
which could be understood as suggesting that the whole
matter was none of the plaintiff's business.
The defendant has argued that the article does no more
than indicate that the plaintiff as a member of the
public was exercising his right to participate in a
local matter. That is an argument which the jury may
well accept. But it is not the only reasonable
interpretation which is open.
Imputation (b) must therefore be struck out, with leave
to replead."

62. The plaintiff's links with Saffron were characterised as "extensive professional dealings", a "close relationship in respect to (the plaintiff's) position as a director of Harbourside". Another reference capable of supporting an inference as to the plaintiff's awareness of Saffron's status as a reputed criminal was alluded to in the context of an alleged "cover-up" of a roller coaster accident. Quoting Treasure again, the article notes:-

(204-206) "He described how Mr Baffsky had said after
the accident that they were going to bring in
Asher Joel, "another member of the Jewish mafia", to
handle the public relations for the park in case of any
further accidents."

63. There are other references to the "links" with Saffron. The Marshin Trust was a Saffron company. It was his family trust. It was said to be linked to Harbourside. This was, in form, an assertion of the author not merely a quote or apparent reference to the CAC report.

(223-235) "The first major Marshin link was through
David Zalmon Baffsky, a partner in the legal firm,
Simons and Baffsky. Saffron is also a well-known client
of this firm. Mr Baffsky is also chairman of
Harbourside and one of the major shareholders.
During 1981 and 1982, the Marshin Trust made
distributions totalling $155,000 to a company called
China Acceptance. Then later, in 1983, David Baffsky
used $70,000 in funds he got from China Acceptance to
invest in Harbourside.
This raised the possibility that there was a direct
financial link between Saffron's private trust and Luna
park. But, although the CAC was suspicious, it
accepted Mr Baffsky's explanations and concluded "it is
unlikely that the funds distributed from the Marshin
Trust are the same as those that were subsequently
placed into Harbourside."

64. If to the above is added the plaintiff's alleged participation in the "skimming" of cash takings there is no doubt that the article would be construed by the reasonable reader as imputing that the plaintiff was going well beyond the permissible bounds of legal ethics in advancing Saffron's illegal interests. The reader would infer that the plaintiff's interest in Luna Park was a result of his continuing association of long standing with Saffron.

65. There is nothing in the articles which asserts that the plaintiff's only relationship with Saffron was a perfectly proper solicitor/client association. In context the term "improper" has a clear and serious meaning defamatory of the plaintiff.

66. Imputation (e) - becoming and acting as Chairman of Harbourside so as to provide Saffron with a falsely respectable front for his illegal activities.

67. It was objected also that the terms "falsely respectable front" and "illegal activities" were themselves of such uncertain import that this imputation should be struck out.

68. I reject this contention. For the same reasons as, in the present context, "improper" and "improperly" convey a serious defamatory meaning, so too do these terms.

69. Nevertheless, whilst the imputation is clearly conveyed by the matter complained of, it is no more than an example of the "improper association" previously noted as being conveyed by the matter complained of.

70. Imputations (f) - (g) - removal of safety features on a roller coaster, endangering the public and attempting to cover-up the truth after a serious accident resulted.

71. The references to the roller coaster are as follows:-

(123-4) "Mr Treasure also alleged that there was a
cover-up of the injuries sustained by members of the
public in an accident on an unsafe Luna Park ride."
(197-206) "Mr Treasure also alleged to the CAC that
there was a cover-up of an accident involving a roller
coaster at Luna Park which Harbourside had bought
secondhand from Dusseldorf, Germany.
He said that a lot of safety features were removed from
the ride and five weeks after it was opened (the report
does not specify the date), there was a "massive
accident" when the roller coaster rolled backwards and
injured about four people.
He described how Mr Baffsky had said after the accident
that they were going to bring in Asher Joel, "another
member of the Jewish mafia", to handle the public
relations for the park in case of any further accidents."

72. It does not appear from the context in which these allegations appear that the denials, such as they are, of Treasure's allegations generally (189-190) can be seen to be clearly directed to these quite serious accusations. However, even if a reasonable reader would conclude that the plaintiff's denials applied also to these allegations the effect is no less defamatory than for Imputations (a) - (b), and for the same reasons. The "bane", in other words, is even less contradicted by the supposed "antidote" than for imputations (a) and (b). It is certainly not significantly diminished even if the "antidote" is regarded as applicable to it.

73. Imputation (h) - member of a group of organised criminals who participated in their criminal activities.

74. I do not doubt that this imputation is made out. It necessarily follows from the fact that imputations (a), (c) and (e) arise from the matter complained of.

75. The plaintiff was alleged to be, and impliedly for Saffron's benefit, knowingly concerned in:-

"...massive illegal skimming from the park's takings,
inadequate financial accounting, and dubious tendering methods."

76. The contradictory evidence is cast almost in terms of derision.

"Despite this, the CAC report concluded that it could
not find any evidence that Saffron had an actual or
beneficial ownership in Luna Park. It said it could
find no evidence that Saffron was involved in anything
other than 'normal business dealings'."

77. The very use of quotation marks shows the author's desire to cast doubt on the legitimacy of the supply by Arcadia of amusement machines to Luna Park. I have already noted that the "antidotes" applied to the other allegations of criminal involvement are woefully inadequate.

78. The revelation of "stronger and more extensive" links clearly starts out to demonstrate to the reader that, even though the CAC report referred to could not find "evidence" yet the Luna Park project was, clearly, a Saffron front. The articles suggest by implication that even if it could be inferred that some of the persons named in the report as "linked" to Saffron were innocent of any wrongdoing, that was not the case with the plaintiff.

79. It follows from the above that the matter complained of makes serious defamatory imputations against the plaintiff. It holds him out as -

(i) an associate of criminals and a front man for an
organised crime figure;
(ii) as endangering the public by cost-cutting
recklessness; and
(iii) evading responsibility for the consequences of that
callous indifference to public safety.

80. Accepting that imputations (h), (a), (c) (e), (b) and (d) are descending gradations of the first of the above categories and (f) and (g) represent the second and third most serious respectively , the plaintiff has succeeded in demonstrating the matter complained of to be defamatory of him wherever published and to impute (a), (c), (f), (g) and (h) for the purposes of the law of New South Wales. (Imputations (b) and (d) are alternative to (a) and (c) respectively. (e) is but a particular of (a) and (c).)

81. I must therefore consider the defences based on fair protected report and/or qualified privilege.

82. Fair and accurate report/Qualified privilege The publication purported to be based on the report tabled in the Parliament of New South Wales and ordered to be printed by its authority. That report, at least in New South Wales, was protected by absolute privilege, (see s.17, Defamation Act 1974 (NSW)). The inquiry itself was protected by absolute privilege under s.18 of that Act. Even if not published by order of the Parliament of New South Wales, the Report was protected by absolute privilege pursuant to s.19.

83. The matter complained of is not, of course, the CAC Report itself. It is the articles which were based on that document. Those articles comprise quotations (in part) from the CAC Report but, for the most part, recount or summarise the effect of that Report. They do not purport to report the "proceedings" of the investigators. However, the articles clearly have as their subject matter a "report" of the kind referred to in cl.3 of Schedule 2 to the Defamation Act 1974. A defence is, in New South Wales, provided for the publication (relevantly) of a:-

(s.25) "... fair extract or fair abstract from, or fair
summary of, any such document or record."

84. In the Australian Capital Territory, Schedule 2 Pt 12 of the New South Wales Acts Application Act 1984, Defamation (Amendment) Act 1909 provides:-

(5) "No ... civil action shall be maintainable against
any ... corporation in respect of the ... publishing in
good faith for the information of the public in any
newspaper any of the following matters ...
(c) a copy of, or an extract from or abstract of, any
report ... published by order or under the
authority of (the Parliament of any State of the Commonwealth)."

85. No doubt this defence applies insofar as the matter complained of was an "extract" or "abstract" from or of the Report. That does not extend to an article based on, or a purported summary of, the Report. It would suffice for the purposes of s.5(c) if the extract or abstract bore a "close correlation" to the relevant portion of the original, (see, for example, John Fairfax and Sons v Hook (1983) 47 ALR 477, 489-490). There is no protection under s.5 for a "fair and accurate report" of the relevant document.

86. No other jurisdiction in the Commonwealth extends even qualified protection, in terms, to a fair report of the content and effect of a report tabled in any Parliament other than that of the State or Territory concerned.

87. Nevertheless, it has been held that a fair and accurate report of foreign judicial proceedings is capable of attracting qualified privilege.

88. In Webb v Times Publishing Co Ltd (1960) 2 QB 535, Pearson J. was obliged to consider whether the qualified privilege attaching to domestic judicial proceedings applied to a report of proceedings in Switzerland. Having determined that the rule in domestic cases was that qualified privilege applied in England to all reports of English proceedings, his Lordship continued as follows:-

(562) "It is one thing to take for the public benefit
the risk of incidental defamation in the report of any
English judicial proceedings. It
would be quite another thing, much more serious, to
take the risk of being defamed by the reporting of any
judicial proceedings in any court in any part of the world."

89. His Lordship further noted that in some jurisdictions incidental matters which would not be regarded as relevant under English law, might well be ventilated. The trial may be tainted by government propaganda designed to vilify enemies of the State, whether internal or external. He then continued:-

(563) "Having regard to the matters that I have
mentioned, which have a cumulative effect, and in the
absence of any binding authority, I decide that there
is no qualified privilege of a general or "blanket"
character for fair and accurate reports of foreign
judicial proceedings in any courts in any country."

90. Having determined that, his Lordship decided that privilege would attach if two conditions were satisfied. The first was the status of the report. If it was a fair and accurate report of foreign judicial proceedings, it had status sufficient to attract the privilege.

91. The further condition was:-

(568) "... The need for an appropriate subject-matter
which must be of interest to the public concerned, in
this case the English newspaper-reading public."
(569) "One has to look for a legitimate and proper
interest as contrasted with an interest which is due to
idle curiosity or a desire for gossip. There is not
necessarily anything wrong in newspapers publishing
news items which appeal
only to idle curiosity or the desire for gossip. But,
if they do so, there is not in the subject matter any
such legitimate and proper interest as is needed to
confer privilege for an incidental defamation that may
be involved."
(570) "Sometimes a report of foreign judicial
proceedings will have intrinsic world-wide importance,
so that a reasonable man in any civilised country,
wishing to be well-informed, will be glad to read it,
and would think he ought to read it if he has the time
available. Sometimes a report of foreign judicial
proceedings will not have such intrinsic world- wide
importance, but will have special connection with
English affairs, so that it will have a legitimate and
proper interest for English readers and the reasonable
man in England will wish to read it or hear about it.
For instance, a report of foreign judicial proceedings
may throw light upon, or be related to or connected
with, the administration of justice in England."

92. The report in question was held to satisfy both tests.

93. It is not any publication conveying "fair information on a matter of public interest" that founds such a claim of privilege (see Hook v John Fairfax and Sons Ltd (1982) 42 ACTR 17, 19-20; Blackshaw v Lord (1984) QB 1, 26-27, 33, 35-36, 41-42). The "interest" referred to must be construed as not merely satisfying a legitimate interest of the public in having the information but also a duty in the publisher to convey it to the public at large.

94. In every State and Territory of Australia, a report such as that made the subject of the matter complained of herein, tabled in its legislature, would provide an occasion of qualified privilege for a fair and accurate report of it. To my mind, where publication of such a report takes place outside the State or Territory where such report is tabled or initially published, the qualified privilege afforded to the occasion of publication of such a report in the other States and Territories should be no less favourable. This is particularly so when, as here, publication, though predominantly in New South Wales, was in reality, national. It would be inconsistent, in my opinion, with the position of Australia as a single nation for a publication to attract qualified privilege within one State but not in other States and Territories where the same publication is made. It is no objection to this that as here, the plaintiff's reputation, and indeed, those otherwise referred to, are figures better known in Sydney, New South Wales than elsewhere. It would be difficult to see the logic of applying a rule that would give qualified privilege in, say, Albury and Queanbeyan (NSW) as a matter of course but not in Wodonga (Vic) or Canberra (ACT). I believe that an approach such as I have taken is consistent with the principle adopted by the High Court of Australia in Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41.

95. There is also no doubt, in my view, that the same principle, affirmed as applicable to "foreign" judicial proceedings, should apply to "foreign" Parliamentary proceedings and papers, as well as to the reports of statutory inquiries. Needless to say, it would be open to the legislature of any State or Territory to change this position for publication within its jurisdiction. None has, in substance, chosen so to do. The manifest inconvenience of significantly different rules in the different Australian jurisdictions does not need to be debated.

96. It is fortunate that the defence under the New South Wales Defamation Act 1974, s.25 does not differ in any substantive way from the common law defence of qualified privilege or the statutory preservation of a similarly expressed privilege in the Code States. At least in this area of defamation law there is substantive uniformity.

97. I turn therefore to consider whether, in fact, the matter complained of is a fair, or fair and accurate, account of the CAC Report.

98. In doing so, I follow the principle affirmed in Thom v Associated Newspapers (1964) 64 SR (NSW) 376, 380, per Herron C.J. and Ferguson J:-

"The report need not be verbatim but to be privileged
it must accurately express what took place. Errors may
occur; but if they are such as not substantially to
alter the impression that the reader would have
received had he been present at the trial, the
protection is not lost. If, however, there is a
substantial misrepresentation of a material fact
prejudicial to the plaintiff's reputation, the report
must be regarded as unfair..."

99. That principle would, therefore, require that the reader of the report would receive the same impression as the reader of the matter complained of in relation to the various matters adverse to the plaintiff. (See also Thompson v Truth and Sportsman Ltd (1932) 34 SR (NSW) 21; Anderson v Nationwide News Pty Ltd (1970) 72 SR (NSW) 313; Burnett and Hallamshire Fuel Ltd v Sheffield Telegraph and Star Ltd (1960) 1 WLR 502; Cook v Alexander (1974) 1 QB 279.)

100. It is, of course, irrelevant that the CAC Report itself may be unfair or inaccurate and, as a result, convey a defamatory imputation (see Anderson v Nationwide News Pty Ltd (supra); Burnett and Hallamshire Fuel Ltd v Sheffield Telegraph and Star Ltd (supra)).

101. The parties did not disagree as to these principles. They hotly disputed their application. The plaintiff contended that the CAC Report did not give rise to any defamatory imputations against him. He says, therefore, that the defamatory imputations which arise, as I have found, from the matter complained of are the result of an unfair report. The defendant denies, as has been noted, that any defamatory inference arises from the Report or from the matter complained of. It says, however, that if any defamatory imputation does arise out of the matter complained of, it does so only because the articles were an accurate and fair reflection of the Report on which they were based.

102. I now turn to consider whether a fair reading of the CAC Report would leave, relevantly, the same impression as does the reading of the matter complained of.

103. Imputations (a) - (b) - participation in the criminal embezzlement of large sums of money from Harbourside.

104. A fair reading of those parts of the CAC Report relating to the "skimming" allegations leads to the conclusion that all persons associated with Luna Park denied that any such activity went on (save, of course, for Mr Treasure).

105. It is true that there is a semantic difference between the assertion in the articles that the CAC investigators could "find" no evidence to support Treasure's allegations concerning "skimming" and the statement in the CAC Report "There is no evidence...". I do not think that difference is itself critical. However, there was a finding made by the Report that:-

"The delegates were unable to establish any basis to
Mr Treasure's allegation..."

106. This tended to dismiss, with more emphasis than do the articles in question, the allegations about "skimming".

107. Perhaps the most telling difference, however, is in the treatment of Mr Silk's report. Mr Silk was a Senior Auditor appointed by the CAC to aid in its investigation.

108. The article stated -

"It (the inquiry) did find evidence to support his
(Treasure's) claims that the financial
accounting methods at the park had been inadequate."

109. This tends to convey that the lack of evidence may have been due to poor accounting controls.

110. However, Mr Silk's report which was said so to conclude, did not do so. In fact the first audit, which might have been expected to support Treasure's allegations concluded -

"...there were sound internal control mechanisms in
existence over the collection of gross revenue."

111. There was only one criticism that could support the Treasure allegations. This was that "sound internal control mechanisms" did not, at that time, exist for the cash game, "Luna Lou". However, even a cursory perusal of the revenue returns would indicate that this source of income was only 0.4% of gross revenue. It could not support an allegation of "massive skimming". It did not provide an opportunity to remove vast sums of money in cash.

112. There was a statement that stock control for ticket sales was not adequately checked. There was a recommendation for an independent check of tickets issued against revenue received (or declared). That segment was 55.8% of gross revenue. That is referred to in the articles but in terms that -

"Only 22.9 per cent of the claimed $1.4 million of
gross revenue received over 1984/5 was accounted for by
means of a cash register or a mechanical device."

113. In fact the gross revenue is shown as $6,530,900.00. The "Ticket Sales" were $3,631,400.00. The comment of the auditor was -

"...the system is such that collusion is required by
two or more staff in order to manipulate stock of tickets held."

114. It was part of the system in which there were "sound internal control mechanisms". It made it all the more surprising, if there was "skimming" on a large scale, that no employee, past or present, of Luna Park had even heard rumours of it.

115. The clear conclusion from the CAC Report is that the allegations of Treasure concerning "skimming" were without foundation.

116. The conclusion from the articles is that there is substance in the "skimming" allegations but the evidence to support them has not been found due to poor financial controls.

117. It follows that the articles do not fairly and accurately reflect the Report's contents relating to this question.

118. Imputations (c) - (d) - improper association with a reputed criminal and Imputation (e) - becoming and acting as Chairman of Harbourside so as to provide Saffron with a falsely respectable front for his illegal activities.

119. The first article concentrates on the "links" between Saffron and Luna Park. One of those links is that the plaintiff had acted as solicitor for Saffron. However, he also chose to become chairman of Harbourside. Several of the other Harbourside directors could be linked to Saffron. Harbourside had entered into a business arrangement, itself legitimate, for the provision of amusement machines.

120. There was also a less remarkable link to the Marshin trust (Marshin), referred to in the third article. The article raised the suspicion that monies paid by Marshin (Saffron's family trust company) were used to finance the Luna Park project through a company known as China Acceptance. The plaintiff had procurred funds for Luna Park from China Acceptance.

121. All of the above "links" are referred to in the report. Plainly the plaintiff, in associating himself with Harbourside, having regard to all these "links", did run the risk that there would be a serious suggestion made that his association with Saffron went beyond that of solicitor and client and became at least a business association. That association could then well become an object for suspicion and enquiry.

122. Saffron, for all his reputation, presumably has legitimate business investments. A person is entitled to provide legitimate services to reputed criminals without being held out as a criminal. However, there is the clear risk of some interest being taken by relevant authorities to satisfy themselves that the association is legitimate and that the public interest is not at risk.

123. That is precisely what happened here.

124. The CAC Report fully explored these "links". It is necessary only to refer to the conclusions stated in the Report to discover what a fair report should have reflected.

125. Those conclusions were as follows:-

"ACTUAL OR BENEFICIAL OWNERSHIP OF HARBOURSIDE
The Delegates are of the opinion that:
15.3 There is no evidence available to the Delegates
that suggests that Abraham Gilbert Saffron has
any actual or beneficial ownership in Harbourside.
15.4 David Zalmon Baffsky has the ultimate control of
Harbourside in that -
a. he has a controlling beneficial interest
through his holding and the option over
the beneficial interests held by Messrs
Colman and Harold Goldstein.
(11.6 - 11.11, 11.13, 11.16 11.19 - 11.20).
The statutory records of Harbourside and
those records held by the Commission show
that the registered shareholders of
Harbourside are -
Sibaf - 11 shares
Peak - 1 share
(4.17)
The examinations conducted have revealed
that the beneficial owners of the shares
in Harbourside which are held by Sibaf and
Peak are -
David Zalmon Baffsky - 45%
Colman Bertram Goldstein - 25%
Harold Gerald Goldstein - 25%
Harold Droga - 5%
(11.6, 11.13)
b. he is the source through which funds are
provided to Harbourside when it has a
liquidity problem.
(9.11 - 9.17).
c. he makes the final decision regarding
policy and finance.
15.5 David Zalmon Baffsky, a partner in the legal
firm of Simons and Baffsky, has a professional
relationship with Abraham Saffron.
This is evident in that David Baffsky on behalf
of his firm has acted for Mr Saffron or a
company in which Mr Saffron has an interest. In
particular David Baffsky as a solicitor of
Simons and Baffsky acted for the Marshin Trust in
respect to certain financial transactions with
China Acceptance.
(6.114).
ABRAHAM SAFFRON'S BUSINESS DEALINGS WITH HARBOURSIDE
The Delegates are of the opinion that:
15.6 There is no evidence available to the Delegates
to suggest that Mr Saffron's dealings with
Harbourside, through Arcadia, were other than
normal business dealings except that the
appointment of Arcadia may have been influenced
by the family relationship between Colman
Goldstein and Abraham Saffron.
The evidence discloses that:
a. Mr Saffron contacted Mr Colman Goldstein
prior to Luna Park reopening and before
any approach was made to Arcadia
expressing a wish to place machines in the Park.
(6.63).
b. Colman Goldstein's preference was that
"all things being equal" he would like
Abraham Saffron to place machines in Luna Park.
(6.63).
c. the description of the way in which
Arcadia came to place machines in Luna
Park is the subject of contradictory evidence.
(6.57, 6.63, 6.70, 6.76, 6.80 - 6.83, 6.86 - 6.87).
15.7 The evidence also discloses that:
a. Arcadia, as trustee for Arcadia Machines,
has placed amusement and pinball machines
at Luna Park and derives income from the placement.
(6.12 - 6.89).
Arcadia Machines is a unit trust now
controlled by Marshin, a company of which
both Abraham Saffron and his wife are
directors and shareholders. Prior to
July, 1985 Mr Saffron's close relatives
were both directors and shareholders.
(4.22, 6.92, 6.95).
b. Monies from Arcadia Machines flow into the
Marshin Trust. This trust is a
discretionary trust under the control of
Abraham Saffron. The trust is a focal
point of Mr Saffron's business activities
as monies from other trusts controlled by
Abraham Saffron flow into the Marshin Trust.
(6.97 - 6.100, 6.116, 6.119).
The Marshin Trust distributes funds to
persons, companies or other trusts
controlled by Abraham Saffron.
(6.120).
One such company which received
distributions from the Marshin Trust in
1981 and 1982 was China Acceptance.
(6.120).
The source of an amount of funds placed
into Harbourside by David Baffsky through
his loan account in 1983 was traced to
China Acceptance. It is unlikely that the
funds distributed from the Marshin Trust
are the same as those that were
subsequently placed into Harbourside.
(6.114 - 6.115).
c. Samuel Cowper, at the same time as being
the Secretary and Financial Controller of
Harbourside, was also a director of
Marshin prior to July, 1985.
(4.17, 4.22).
It has been indicated by Mr Cowper that he
did not make any management decisions in
regards to Marshin or the Marshin Trust.
Mr Abraham Saffron admitted to the
Delegates that Mrs Flora Cowper, a former
director of Marshin, and Mr Cowper did not
make decisions as to distributions of the
Marshin Trust income.
(6.111).
RELATIONSHIP OF A FAMILY/BUSINESS NATURE
BETWEEN ABRAHAM SAFFRON AND
COLMAN GOLDSTEIN OTHER THAN THROUGH HARBOURSIDE
The Delegates are of the opinion that:
15.8 There is a family relationship between Abraham
Gilbert Saffron and Colman Bertram Goldstein and
Harold Gerald Goldstein.
(7.3, 7.19, 7.37).
15.9 There is a social relationship between
Abraham Saffron and Colman Bertram Goldstein.
This is evident in that -
a. Mr Goldstein and Mr Saffron have travelled
overseas and together have met up overseas.
b. Abraham Saffron and Colman Goldstein meet
socially from time to time on family
occasions and other social events.
(7.8 - 7.20).
15.10 There is a business relationship between
Mr Colman Goldstein and Abraham Saffron.
This is evident in that -
a. Mr Saffron was aware in 1981 of
Colman Goldstein's need to raise finance
for the redevelopment of Luna Park.
Mr Saffron used his long business
association with Mercantile Credits
Limited to introduce Colman Goldstein to
officers of Mercantile Credits Limited.
The purpose of the introduction was for
Mercantile Credits Limited to give a quote
for finances required for the
redevelopment by Harbourside.
(12.30 - 12.35).
b. Mr Saffron invited Mr Goldstein to visit
an amusement park in Los Angeles, being
managed by his son Alan Saffron, to view
an amusement ride with the purpose of
Colman Goldstein purchasing it for Luna Park.
Mr Goldstein stated that he believed the
Los Angeles amusement park to be either
owned or backed by Abraham Saffron.
(7.18).
c. A Goldstein family company, Morrisons
Outdoor Catering Pty Limited, paid for
Abraham Saffron's fare to travel to the
United States of America.
Mr Goldstein stated that Mr Saffron repaid
him the air fare in United States dollars
in the United States of America.
(7.15 - 7.17).
d. Mr Colman Goldstein held that there is the
normal business relationship between
companies controlled by Messrs Colman and
Harold Goldstein and those controlled by
Abraham Saffron in the area supplying
catering equipment.
(7.7).
RELATIONSHIP BETWEEN ABRAHAM SAFFRON AND SAMUEL COWPER
The Delegates are of the opinion that:
15.11 There is a family relationship of uncle and
nephew between Abraham Saffron and Samuel King Cowper.
(7.21, 7.37).
APPOINTMENT OF SAMUEL COWPER AS SECRETARY TO HARBOURSIDE
The Delegates are of the opinion that:
15.12 Samuel King Cowper's appointment to the
positions of financial controller and company
secretary to Harbourside was made in unusual
circumstances and was based on his family's
relationship with the Goldstein family.
(8.2 - 8.10).
At the time of his appointment, Samuel Cowper
was a director of Marshin which acts as trustee
of the Marshin Trust, a trust of significance in
Abraham Saffron's business operations.
(4.17, 4.22, 6.105 - 6.106).
15.13 ALLEGATION OF MISAPPROPRIATIONS OF CASH FROM
HARBOURSIDE BY MANAGEMENT
An allegation was made to the Delegates in an
examination that:
(a) Management had misappropriated cash funds
(skimming) from Harbourside and
(b) that this fact was well known to employees
of Harbourside.
The Delegates, having investigated this matter
are of the opinion that there is no evidence
(a) of Management having misappropriated cash
funds from Harbourside, or
(b) that employees of Harbourside well knew of
any alleged misappropriation by Management.
(9.32 - 9.50).
15.14 PROPOSED ASSIGNMENT OF LEASE OF LUNA PARK BY
HARBOURSIDE TO PROME INVESTMENTS
It came to the attention of the Delegates that
Harbourside proposed to assign its interest in
the lease of the site known as Luna Park to
Prome Investments. The Delegates have
investigated the ownership of Prome Investments
to determine whether or not Abraham Saffron is
beneficially entitled to any of the shares in
Prome Investments or would be entitled to
receive some benefit with regard to the proposed assignment.
The Delegates are of the opinion that there is
no evidence to suggest that Abraham Saffron is a
beneficial owner of any of the shares in Prome
Investments or that he is likely to receive any
benefit from the proposed assignment of the lease.
(Chapter 13)."

126. It seems to me that a fair reading of those conclusions could lead to an inference that Mr Colman Goldstein had favoured Mr Saffron as a supplier of amusement machines because of their family relationship. There was also a significant business and family relationship between Samuel Cowper and Saffron. There was no inference adverse to the plaintiff found by the investigators nor, save that his association or "links" with those other persons and with Saffron gave rise to suspicion, any inference that his relationship with them or Saffron was in fact "improper" in the sense that he was knowingly concerned in promoting illegal activities whether of a "money laundering" nature or otherwise. Indeed, it seems to follow from the Report that there was no discernible basis, after due enquiry had been made, for those suspicions.

127. It follows that though the articles are protected in relation to imputation (d) they are not protected insofar as they give rise to imputation (c).

128. Imputations (f) - (g) - removal of safety features on a roller coaster, endangering the public and attempting to cover-up the truth after a serious accident resulted.

129. There is a discrete part of both the Report and the articles dealing with these allegations. The allegations themselves were made by Treasure. They are, themselves, reported accurately. What the articles do not make clear, however, is that the truth or falsity of Treasure's allegations in those respects was not part of the CAC inquiry. They were part of an aside made in the course of a series of lurid allegations made by Treasure.

130. There is no reference to the fact that Treasure's credibility was seriously in doubt as a result of the audit report of Mr Silk and the interviews which followed the "skimming" allegation, particularly of past Luna Park employees.

131. The allegation itself was gratuitously offensive. It placed in the plaintiff's mouth a suggestion that "cover-ups" were in future to be handled by bringing in -

"Asher Joel, another member of the Jewish Mafia, as his PR company
is going to handle it (that is, the cover-up)."

132. The excerpt from Treasure indicated a quite malicious anti-Semitism on his part, including a variant on the "some of my best friends are Jews" line:-

"...They were all Jewish, but you know there are Jewish
people, the catering manager there was a Jewish guy,
very, very charming guy and straight as a die."

133. A fair report would have followed the allegations which were in fact interwoven, as I have noted, with the "skimming" allegations with a reference to the series of findings that cast the doubt I have referred to on Treasure's credibility generally.

134. It would have been fair also to point out that the rides at Luna Park were subject, at all relevant times, to Government safety inspection:-

(9.52) "Mr Day explained that the department carried
out two methods to ensure compliance by the lessee with
the terms and conditions of the lease. Firstly the
first method was over the safety aspect of the running
of the Park. The department carried out physical
inspections of the rides and also of the fire control
plan in force. These inspections were carried out annually and also
at any time when there were malfunctions of equipment."

135. Also in the Audit Report there was a reference to the safety of the rides.

4.6 "RIDES
Audit noted on a visit to Luna Park on Sunday,
24th November 1985 that the Adventure River water
ride in the children's section of the park may put
children at risk due to inadequate supervision.
Consequence: Possible risk to children's health
and safety.
Recommendation: Consideration should be given to
a review being undertaken of the method of
supervising children on the Adventure Ride with a
view to determining if acceptable health and
safety standards apply."

136. It can thus be seen that there was attention given to health and safety, albeit peripherally. A fair summary of the CAC Report would have pointed out that no support had been found for Treasure's allegations concerning the roller coaster ride or even for the assertion that there had been an accident of the kind he had referred to.

137. It follows that the defence fails also in respect of imputations (f) and (g).

138. Imputation (h) - member of a group of organised criminals and participated in their criminal activities.

139. This imputation is really a restatement or further inference arising from acceptance of imputations (a) and (c).

140. Insofar as the articles exaggerate or focus on the inculpatory comments concerning the plaintiff they do not fairly report the CAC Report in this respect either.

141. It follows that the defences of fair protected report and qualified privilege to make a fair and accurate report fail.
Malice

142. In view of the fact that the defences of qualified privilege and of fair report have failed it is not strictly necessary for me to consider this issue. However, if I am wrong as to whether the articles were, relevantly, a fair report, malice is relevant. I accept that lack of good faith is to be equated for this purpose with malice and that the onus of establishing malice lies upon the plaintiff.

143. The plaintiff points to the form of the articles and the lack of fairness in their account of the CAC Report as evidence of malice. To this I think could be added the form and content of Mr Coulthart's article in "The Age" of 28 October 1987.

144. That article emphasised that "links" to Saffron were found by the CAC Report and that there had been -

"allegations of massive illegal skimming from the
park's takings, inadequate financial accounting, and
dubious tendering methods."

145. However, the article goes on fairly to reflect the CAC Report's findings as follows:-

"But the CAC report concluded that it could not find
any evidence that Saffron had an actual or beneficial
ownership in Luna Park. It said it could find no
evidence that Saffron was involved in anything other
than 'normal business dealings'.
The CAC also failed to find any evidence to back claims
by a former general manager of Harbourside,
Mr Raymond Treasure, that millions of dollars were
being skimmed from Luna Park's takings, reducing the
State Government's cut of the takings."

146. Certainly, the doubt cast on Treasure's credibility implied by the latter paragraph is less strong than is conveyed by the report itself but the lack of express reference to the plaintiff certainly prevents the article from being clearly unfair in its treatment of the Treasure allegations.

147. It does refer to the plaintiff and his "close relationship" to Saffron. It quotes Lavigne inaccurately but not so as to be adverse to the plaintiff.

"It (the CAC Report) quotes evidence from the former
managing director of Harbourside, Mr John Lavigne, that
there was a "close relationship" between Mr Baffsky and
Saffron through Mr Baffsky's position as a director of
Harbourside."

148. That does not impute that the plaintiff was in place as a director of Harbourside on behalf of Saffron. It is presented as one of the circumstantial "links" giving rise to inquiry.

149. The article concluded as follows:-

"A solicitor with whom Saffron has extensive
professional dealings, Mr David Baffsky, was found to
have had a role in the preparation of the tender for
the Luna Park lease.
In its conclusions the CAC report found there was no
evidence available to suggest that Saffron's dealings
with Harbourside, through Arcadia, were other than
normal business dealings "except that the appointment
of Arcadia may have been influenced by the family
relationship between Colman Goldstein and Abraham Saffron"."

150. Again, that is something which does not impute wrongdoing against the plaintiff but fairly reports the suspicious circumstances that had required investigation but had not been found to have given rise to any substantive adverse conclusion so far as the plaintiff was concerned.

151. It is a pity that the thrust of the "Age" article could not have been reflected in the articles the subject of these proceedings. If they had been, then, whilst the plaintiff would no doubt have preferred his "links" to Saffron to have remained unstated and not to have endured the repetition of the suspicions those "links" gave rise to, he would have been consoled by the finding that those links had not been found to be of a culpable nature and were described as "professional" rather than otherwise.

152. That, too, could well have been regarded as, substantially, a fair and accurate presentation of that part of the CAC Report.

153. It is, of course, common ground, on the evidence presented in this case, that the plaintiff was in no way associated with Saffron in an improper or unprofessional sense. There is no suggestion that he acted as chairman of Harbourside in any way for Saffron's benefit.

154. It follows that I am completely satisfied that there is not, and never was, any factual foundation for the allegations of Treasure concerning the plaintiff nor any foundation for an inference that the plaintiff was a frontman for Saffron or had then or ever any improper association with Saffron.

155. In the absence of any evidence to the contrary, I must also conclude that, given the nature and extent of the plaintiff's legal and business contacts and reputation, the defendant was well aware of that fact. Certainly, the defendant could not have ever positively entertained a bona fide belief that there was any truth in the various allegations made against the plaintiff in connection with his association with Saffron.

156. Whether that belief or lack of it resided in Mr Coulthart or otherwise does not much matter. The articles were published with the defendant's approval (see Gatley; 8th ed; pars 946-7).

157. The malice which must be proved is express malice. It is a question as to whether the occasion is being used for some improper purpose (see Gatley; 8th ed; pars 762, 765, 766).

158. In Horrocks v Lowe (1975) AC 135 (HL) Lord Diplock was concerned to point out that qualified privilege is relevant, at least at common law, if, and only if, there has been a false and defamatory statement of and concerning the plaintiff. It is the misuse of the occasion of privilege that deprives the defendant of the protection that occasion would otherwise provide. His Lordship said as follows:-

(149) "So, the motive with which the defendant on a
privileged occasion made a statement defamatory of the
plaintiff becomes crucial. The
protection might, however, be illusory if the onus lay
on him to prove that he was actuated solely by a sense
of the relevant duty or a desire to protect the
relevant interest. So he is entitled to be protected
by the privilege unless some other dominant and
improper motive on his part is proved. "Express
malice" is the term of art descriptive of such a
motive. Broadly speaking, it means malice in the
popular sense of a desire to injure the person who is
defamed and this is generally the motive which the
plaintiff sets out to prove. But to destroy the
privilege the desire to injure must be the dominant
motive for the defamatory publication; knowledge that
it will have that effect is not enough if the defendant
is nevertheless acting in accordance with a sense of
duty or in bona fide protection of his own legitimate interests."

159. Whether the defendant took pleasure or not in the effect of its publication so far as the plaintiff is concerned is not essential to the question. The real question is the motive of the publisher. To that question, knowledge of untruth is relevant.

160. Lord Diplock (supra) looked at knowledge of untruth as follows:-

(150) "...no sense of duty or desire to protect his
own legitimate interests can justify a man in telling
deliberate and injurious falsehoods about another, save
in the exceptional case where a person may be under a
duty to pass on, without endorsing, defamatory reports
made by some other person."

161. In the latter case, of course, proof of a dominant motive that is characterised as "improper" will be necessary. An example of the latter would be the reporting of allegations against a public official to proper authorities. It may be essential for those allegations to be known and investigated even if the publisher personally believes them to be untrue. A case close to the present would be a fair and accurate report of adverse findings of a court case where the reporter nevertheless believes the court's finding to have been wrong.

162. As Clarke J.A. noted in McKenzie v Mergen Holdings Pty Ltd (1990) 20 NSWLR 42,

(51) "Proof of malice involves, in almost every case,
the drawing of inferences from proved facts. What the
plaintiff seeks to persuade the jury is that because of
the defendant's conduct prior to and following the
publication of the defamatory statement or, in some
cases, because of the exaggerated terms of the
defamatory statement itself, or a combination of both,
the inference should be drawn that the defendant was
actuated by malice in defaming the plaintiff."

163. It is obvious that, as the question is one of characterisation of motive, there will rarely, if ever, be an admission by a defendant that his, her or its motive should be so characterised. It may well, and usually will, be the case that the defendant will claim laudable motives whilst the plaintiff will contend otherwise. It is a question, then, of drawing an inference from circumstantial evidence.

164. I have also to decide, being the tribunal of fact, not only whether an inference of malice is possible but also whether that inference in fact should be drawn on the balance of probabilities.

165. In the present case, there was little, if any, evidence otherwise than appears in the matter complained of from which it was suggested that an inference of malice could be drawn.

166. Sometimes an unreasonable refusal to apologise or an unreasonable reliance on justification can provide support for an inference of malice. In this case, the defendant has at all times persisted in a view that the articles were a fair report and, in any event, not defamatory. It has not sought to justify any defamatory inference. It accepts that there is no justification for any defamatory statement of or concerning the plaintiff.

167. It is surprising, in those circumstances, that the defendant was not prepared to publish a statement disclaiming any defamatory inference which others might consider arose from the articles in question. That would not have been an admission inconsistent with its stated position. It might have mollified the plaintiff completely. It would have been mitigatory of damages.

168. Nevertheless, if the article had been a fair report, it would not, in my opinion, warrant a finding of malice that the defendant had failed to disclaim the defamatory inferences which arose from that fair report, even if it did not appreciate that readers would so interpret the report.

169. I have to say that I find the disclaimer by the defendant of any defamatory inference somewhat disingenuous. I cannot accept that the defendant's representatives could have read the article in any but a defamatory sense. I think the crux of the defendant's position was that, insofar as the articles were defamatory of the plaintiff, they constituted a fair summary of the CAC Report.

170. I am left with the distinct conclusion that the form and content of the articles establishes malice but only insofar as it is not a fair report. I do not, of course, accept that any reasonable journalist could, if attending to the detail of the CAC Report, fail to appreciate that the articles unfairly represented the evidence accepted by and findings of the CAC inquiry. By reason of that finding, however, the question of malice does not arise. The defence of fair report/qualified privilege has failed in limine. If, on the other hand, it does not fail, and if the articles were, in fact, a fair report, the evidence is not otherwise sufficient to enable a finding of malice to be made.
Damages

171. The plaintiff gave evidence that when he read the articles in question he experienced "a sinking feeling". He felt "angry and upset". He thought the articles to be "unfair" to him and not fairly to represent the CAC Report which he had believed did not reflect adversely on him.

172. He was concerned, understandably, for his reputation and for the effect on his family. As to his reputation, the plaintiff was concerned about what members of the legal and business community would think of him. He was also concerned about his standing in the Jewish community.

173. That day he was contacted by about 20 persons. Their reaction, of course, is consistent with my finding that defamatory imputations were conveyed by the matter complained of. The overall impression that the plaintiff had to explain to most, if not all, callers was that his association with Saffron was no more than a proper solicitor/client one and that he had neither done nor permitted or suffered anything to be done which was illegal whether for Saffron's benefit or otherwise.

174. He recalled particularly a Mr Robert Bruce Corlett, Mr James Young (Managing Director of Wardley Hong Kong Bank), Mr Brian Cummin (a Western Australian businessman). This made him, he said, "very uncomfortable". He was upset, I infer emotionally, when Mr Cummin expressed solicitations as to the effect on his family.

175. Even during 1990, in Tokyo, the plaintiff was asked about the articles by a Japanese architect during the course of business negotiations.

176. I am satisfied that there has been a significant effect on the feelings of the plaintiff. It has been significant in terms of the initial impact as well as its after-effect.

177. I have noted that it would not have prejudiced the defendant to have acknowledged that none of the defamatory inferences initially complained of were warranted even if it adhered to a view that no apology or monetary amends was called for. The refusal to apologise or even to clarify the articles so as to disclaim the obvious defamatory inferences, caused further disappointment to the plaintiff.

178. The plaintiff gave evidence as to his business and legal career. This was corroborated by others who also attested to his good reputation.

179. Mr Robert Bruce Corlett, Deputy Chairman, FAI Insurances since December 1988 was at the time of publication a director of a merchant bank. He had always regarded the plaintiff, whom he had known for a number of years, as a man of great integrity and skill as a commercial and legal adviser. He was concerned that, if the plaintiff was perceived otherwise, then his advice to his colleagues urging them to rely on the plaintiff would be compromised. It was important for Mr Corlett to be satisfied, not only of the integrity of the plaintiff but also that the plaintiff could persuade his colleagues that he could continue so to be perceived by them.

180. As it happened, Mr Corlett was able to pass on such assurances and they were, it seems, accepted.

181. Mr Russell Bainton QC also attested to his high opinion of the plaintiff. He recounted an incident where a person referred to the plaintiff as having "been in bed with Abe Saffron". That person expressed a view that he would be wary of having business dealings with the plaintiff or any company with which he was associated.

182. It is fair to note that the articles did not damage the plaintiff's reputation in the eyes of Mr Bainton. Nevertheless, the wide circulation of the defamatory articles and their general defamatory effect is, I think, demonstrated by this evidence. Neither the plaintiff nor the defendant was able to point to any other source of information which would explain the incident related by Mr Bainton. I accept that it was probably a recollection of the matter complained of or of some person's repetition of such a recollection.

183. There was, however, no evidence of any special loss suffered by the plaintiff. He did not claim to have lost any earnings or profits.

184. Nevertheless, the plaintiff did claim that there were certain matters which aggravated damages.

185. I have already noted that, to some extent, the failure to disavow or disclaim the defamatory imputations initially (and, in my opinion, correctly) perceived by the plaintiff, has aggravated the damage to the plaintiff.

186. The fact that as a solicitor and company director the plaintiff was bound to observe higher standards of honesty and integrity than the public generally is, I think, an aggravating factor (see, for example, Readers Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500, 507-8 per Brennan J.). There would be many readers aware of those higher standards and, with those readers, the damage would be greater than with others not so aware.

187. An issue was raised before me as to the basis upon which damages in defamation cases are assessed. Clearly, they are intended to be compensatory. No case was made here for exemplary or punitive damages. On the other hand, no evidence of loss quantifiable in monetary terms was presented. There was no ascertainable evidence of the actual loss of reputation. I have no real evidence, either, of the extent to which this decision will in itself repair the initial assault on the plaintiff's reputation. On the other hand, reputation is a fragile asset. The damage to it cannot be established by tests analogous to those which can detect the disabilities arising from personal injury. It lurks in the minds and attitudes of others. Frequently, those others do not have contact with or expose their attitudes to the person defamed or those with whom that person has contact.

188. The principles applicable to the award of damages for defamation are discussed by Diplock L.J. in McCarey v Associated Newspapers Ltd (No. 2) (1965) 2 QB 86. Insofar as those observations are applicable to the case of damage not accompanied by circumstances of aggravation, I have found them of assistance. I refer to some of those observations.

(108) "...the jury was perfectly entitled to infer,
even without specific evidence, that some change in
that attitude (that is, of the public towards the
plaintiff as a result of the defamation) would be bound
to occur."
(109) "It is, I think, legitimate as an aid to
considering whether the award of damages by a jury is
so large that no reasonable jury could have arrived at
that figure if they had applied proper principles to
bear in mind the kind of figures which are proper, and
have been held to be (110) proper in cases of disabling
physical injury."

189. The latter observation does not mean, in my view, that awards for personal injury can be directly compared with damages for defamation. This is, no doubt, because a significant proportion of the sum to be awarded for such damages is required to serve a purpose of vindicating the plaintiff's reputation at the same time as it compensates the plaintiff for the injury suffered to feelings and reputation.

190. In Jools v Mirror Newspapers (1984) 56 ACTR 1, Kelly J., whilst rejecting a direct comparison between such awards noted:-

(11) "Nevertheless, it is legitimate to bear in mind
the figures which have (been) held to be proper in
cases of disabling personal injury."

191. I take this admonition to mean that in assessing compensatory damages for harm to reputation and injury to feelings the sum awarded should not be so high as to outrage the community's sense of proportion, as the Court perceives it, between amounts awarded to compensate the physically (or mentally) disabled victims of tortious conduct and those awarded to persons who are defamed.

192. I have identified matters which aggravated the injury to the plaintiff's feelings. There are two other matters. The first is the unfairness of the report.

193. As Hunt J. noted in Waterhouse v Station 2GB Pty Ltd (1985) 1 NSWLR 58, 76:-

"The issue of damages, and thus of aggravated damages,
might arise either because the report was unfair, or
because it was not published in good faith..."

194. The other was picking out from the CAC Report of the comment of Mr Treasure about the "Jewish Mafia". That was, in my view, not only unnecessary but also offensive. It injected a nasty element of anti-Semitism into the report which, by reason of the well-known fact that Saffron was also Jewish has, I think, aggravated the damage to the plaintiff's reputation and the insult to his feelings.

195. In Uren v John Fairfax and Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118, Taylor J. referred to the concept of "aggravated" damages. He said they are:-

(130) "...given by way of compensation for injury to
the plaintiff, though frequently intangible, resulting
from the circumstances and manner of the defendant's
wrongdoing."

196. The statement of Windeyer J. is often cited. It is apt to repeat it:-

(150) "It seems to me that, properly speaking, a man
defamed does not get compensation for his damaged
reputation. He gets damages because he was injured in
his reputation, that is simply because he was publicly
defamed. For this reason, compensation by damages
operates in two ways - as a vindication of the
plaintiff to the public and as consolation to him for a
wrong done."
(151) "In 1928 Higgins J. remarked that it -
"seems to be right so long as the theory stands
that 'the jingling of the guinea helps the hurt
that honour feels'"...
Insult, as well as injury to reputation, thus merits
compensation."

197. I respectfully concur with the opinion expressed by Miles C.J. in both Smith v John Fairfax and Sons Ltd (1987) 81 ACTR 1 and in Bogusz v Thomson (1989) 95 FLR 167 that this statement does not imply separate heads of damage for solatium and for vindication but rather that the purpose of the award of damages is to serve both ends as part of the compensatory process.

198. In this case, I do not consider that the conduct of the trial has aggravated damages. The conduct of the defence was neither improper nor unjustifiable in the sense that I am able to conclude that it lacked bona fides (see Steele v Mirror Newspapers Ltd (1974) 2 NSWLR 348, 379 per Samuels J.A.; Coyne v Citizen Finance Ltd (1991) 99 ALR 252).

199. Nevertheless, as Samuels J.A. remarked in John Fairfax and Sons Ltd v Kelly (1987) 8 NSWLR 131, 135 -

"...it is extremely difficult to express in terms of
money an injury done to feelings or reputation and thus
to assess what is or is not a reasonable sum to award
by way of compensation, or solace or vindication."

200. In the latter case the basis for an award was said to be for-

(136) "...The injury done to his feelings by the
publication, and the anxiety consequent upon the
litigation; it had also to serve as compensation for
the wrong done to him because he had been injured in
his reputation and as a vindication to the public."

201. There is no question in this case of the award of punitive damages. There is no relevant difference, therefore, in the mode of assessment of damages in any Australian State or Territory in which publication took place. I have noted the publication figures detailing the circulation of the offending newspaper. I bear in mind, of course, that not all readers will have known of the plaintiff and that those who did know him well did not accept the truth of the imputations which the publication made.

202. The circulation figures for the relevant newspapers (that is, the number of copies sold) were:-

Australian Capital Territory 3,659
New South Wales 235,212
Queensland 1,917
Victoria 687
South Australia 305
Western Australia/Northern
Territory (not separated) 162
Tasmania 45
Total 241,987

203. The status of "The Sydney Morning Herald" as a quality daily newspaper cannot be overlooked. It is not a scandal magazine. The CAC Report and its reception in the Press is likely to have been filed by business concerns for future reference. Many such business people would be likely not to have the original Report but rely entirely on the defendant's report of it.

204. It is appropriate to award one lump sum for publication throughout Australia (see Bogusz v Thomson (supra) 181-2).

205. Accordingly, for loss of reputation I award $40,000.00. For injury to feelings, including aggravated damages therefor, I award $20,000.00, a total of $60,000.00.

206. The plaintiff also claims interest thereon. I respectfully adopt the approach commended by McHugh J.A. (as he then was) in John Fairfax and Sons Ltd v Kelly (1987) 8 NSWLR 131, 143 -

"Speaking generally, the best approach is to treat the
award as though the damages represent a loss spread
over the period from the date of publication to trial."

207. Of course, his Honour was there referring to a jury trial. The interest awarded should be up to verdict in this case. The rate of interest to be applied should, it seems to me, be that resulting from an application of the ruling in MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 65 ALJR 203. I can see no reason to suppose that the ruling as to interest made in that case is to be confined to pre-trial non-economic loss incurred in personal injury cases. Accordingly, adopting a rounded figure for interest, I award $8,800.00.

208. There will be judgment for the plaintiff in the sum of $68,800.00.

209. I will hear the parties as to costs.