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Federal Court of Australia |
CATCHWORDS
Trade Practices - whether publication of certain newspaper reports constitutes conduct falling within s.52 - whether mere reporting of opinions misleading and deceptive conduct - facts necessary to establish a misrepresentation by a newspaper - requirement that representation be likely to lead a reader into error and that applicant suffered damage as a result - whether printer "knowingly concerned" in or a party to a contravention - claim in defamation pendent to s. 52 claimDefamation - whether words published capable of defamatory imputation - whether publication fair comment - scope of "public interest" - relevance of s.5 of Criminal Code Act (W.A.) and ss.355, 357 of Criminal Code - justification - whether report a statement of fact or opinion
Damages - mitigation - observations on measure of damages when assessing future losses - whether corporate trustee of a unit trust entitled to sue in respect of losses suffered by unit holders by reason of injury to the reputation of the corporate trustee - whether company operating at a loss entitled to damages for loss of income
Evidence - onus of proof under s.52 - effect of failure by respondents to give evidence of facts peculiarly within their knowledge
Practice and Procedure - form of pleading defamatory imputations
Trade Practices Act 1974 ss. 52, 75B, 82
Criminal Code Act 1913 (W.A.) s. 5
Criminal Code (W.A.) ss. 355, 357
HEARING
PERTHORDER
1. The respondents pay to the applicant damages in the sum of $125,000.2. The respondents pay the applicant's costs of the application.
3. Execution on the judgment be stayed for a period of 28 days.
DECISION
The background2. At about 8 am on 8 January 1982 the M.S. Dalmacija berthed at the passenger terminal in the port of Fremantle. The Dalmacija had been on a Far East Christmas cruise which left Fremantle on 14 December 1981 and took in Singapore, Hong Kong, Manila and Surabaya.
3. The ship encountered rough weather, particularly between Singapore and Hong Kong and off the coast of Western Australia a day or two before returning to Fremantle. Six passengers disembarked at Hong Kong and flew back to Perth.
4. When the Dalmacija berthed at Fremantle on 8 January representatives of the press and television were waiting, apparently as a result of information received from one or more of the passengers who had disembarked at Hong Kong. Representatives of the media included Joanne Fowler and John McCourt of the Daily News, an afternoon newspaper circulating throughout Western Australia, and Peter Cameron Cotton, a reporter with The West Australian, a morning newspaper circulating throughout the State. There was a representative or representatives from a television station, Channel 9, though these persons were never identified. Some account of the voyage of the Dalmacija was broadcast on radio that day but there was no evidence that any representative of a radio station was actually present when the ship berthed.
5. There were more than 150 passengers on board the Dalmacija. As neither Miss Fowler nor Mr. McCourt gave evidence, it is not possible to say how many persons they interviewed. Mr. Cotton spoke to a number of passengers; this matter is referred to in more detail later in these reasons.
6. The front page of the Daily News published on the afternoon of 8 January carried the dramatic headline "NIGHTMARE, SAY SHIP PASSENGERS". There followed an article occupying most of the front page, together with photographs of passengers, in which was reported the criticisms of a number of passengers concerning the voyage. Some criticisms were in direct speech and attributed to particular passengers; some were attributed to passengers without identification. The article also included material about which there was an issue whether it represented editorial comment or the reported views of passengers.
7. Distribution of the Daily News of 8 January was accompanied by billboards, carrying in bold lettering the words "NIGHTMARE VOYAGE SAY PASSENGERS".
8. The West Australian of 9 January carried on page 5 a shorter article headed "Criticism, praise for cruise ship" which reported both criticism of and praise for the cruise by passengers.
9. The Daily News of 11 January carried on page 7 a smaller article still, headed "Cruise passenger: Drill 'inadequate'". The article mainly related critical comments about lifeboat and safety drill by Albert Stranger, a passenger on the voyage. Mr. Stranger was one of those who left the ship at Hong Kong.
10. The West Australian of 12 January carried on page 5 an article headed
"Passenger faults cruise-ship drill" in which there was
some repetition of Mr.
Stranger's criticisms together with extracts from letters written by
passengers to the newspaper saying how
much they enjoyed the cruise.
The parties and the causes of action
11. At the time of publication of these articles the Dalmacija was under charter to Australian Ocean Line Pty. Ltd., the applicant in these proceedings ("A.O.L."). The respondent, West Australian Newspapers Limited, is the publisher of the Daily News and The West Australian and Mr. Harvey is the printer of those papers.
12. The applicant contends that the billboards, articles and photographs were misleading or deceptive or likely to mislead or deceive within the meaning of s.52 of the Trade Practices Act 1974 and that they were also defamatory of A.O.L. In these proceedings the applicant claims damages pursuant to s.82 of the Act for conduct in contravention of s.52 and damages for defamation. As the applicant contends that very large sections of the newspaper articles were in contravention of the Act and were defamatory, I attach to these reasons a copy of each article. It will be necessary to refer to each in some detail.
13. The hearing occupied six weeks and 108 witnesses were called, 78 of whom travelled on the ship, either as passengers or as employees of A.O.L. There are difficult questions of fact and law to be resolved.
14. It may be tempting, at least from one viewpoint, to see this as a case
about freedom of the press or, from another point of view,
as a case about the
rights of the individual. But in the end, so far as the claim under s.52 is
concerned, it is a matter of coming
to grips with a relatively novel piece of
legislation operating in an unusual context. And, so far as the claim in
defamation goes,
it is a matter of determining the relevant principles of
statute and common law and applying them to a complex set of facts.
The applicant
15. Before turning to the voyage itself and the events which gave rise to the publication of the newspaper articles, it is desirable to say something about the applicant and the M.S. Dalmacija.
16. A.O.L. is a company incorporated in Western Australia; it was acquired as a shelf company in December 1980 or thereabouts under the name Tarnflame Pty. Ltd. The first directors of the company were Alexander Stanislas Bajada (who has been the governing director since December 1981), his father Mario Nicholas Bajada, his uncle Max Bajada, Roland Zar and Peter Smith. The Bajadas have a family tradition of involvement in the shipping industry stemming from their grandfather who carried on business in Alexandria. Mr. Zar and Mr. Smith were the principals of a travel agency business known as Matway Travel.
17. Towards the end of 1980 there were discussions between the persons just mentioned regarding a proposal by Mr. Zar to charter a ship for cruises around the Australian coast and in South East Asia. Mr. Zar arrived in Western Australia from Egypt in 1949 and thereafter worked for 15 years in the passenger department of George Wills and Co. who were agents for several shipping lines including Lloyd Triestino and Blue Funnel. Between 1955 and 1972 he was manager for Western Australia of Flotta Lauro, an Italian shipping line that operated a regular passenger service between Australia and Europe. In 1972 Flotta Lauro ceased operations in this country and Mr. Zar became the Australian general manager of Singapore Australian Shipping Co. That company operated a ship-jet service out of Fremantle. In 1975 Mr. Zar set up in business as Matway Travel. Between 1975 and 1977 Matway Travel acted as general sales agent for C.T.C., a company operating Russian cruise ships out of Australia. About the end of 1977 C.T.C. opened its own office in Perth. Mr. Zar then began to look around for a ship which he could charter for cruises out of Fremantle. In 1979 he learned of the Dalmacija, a Yugoslav ship. Later he travelled to Europe to inspect the ship, sailed on her and had discussions with various persons in Yugoslavia. In this way he came to make the proposal to the Bajadas and Mr. Smith.
18. By an agreement in writing dated 15 January 1981 Tarnflame agreed with Hutro Union Dalmacija-Oour Dalmacijaturist ("Dalmacijaturist") as disponent owner of the Dalmacija to take the vessel on hire. The ship's owner was Jadrolinija, a Yugoslav corporation from which Dalmacijaturist had the ship under a head charterparty arrangement. It will be necessary to make further reference to the terms of the charter but it is enough for present purposes to note that the initial period of the charter was 14 November 1981 to 21 May 1982.
19. It will also be necessary at a later stage to explain the relationship
between Tarnflame, A.O.L. and other companies and unit
trusts through which
the Bajada, Zar and Smith families operated.
The Dalmacija
20. The Dalmacija was built in Trieste in 1965. It underwent a complete modernisation in 1968-1969 and was refitted and refurbished in 1981. Its length overall is 116.8 metres; its gross tonnage is 5,650; it has a cruising speed of 15.5 knots and a maximum speed of 18 knots; it is powered by 2 main engines; it has a passenger capacity of 312 and a crew of 110.
21. The Dalmacija is smaller than the State ships which used to sail between
Fremantle and Darwin and is smaller than the Centaur
which used to ply between
Fremantle and Singapore. Nevertheless it has cruised in the Mediterranean and
around the West Indies and
has been accorded the highest classification as a
passenger vessel by the international classifying authority Bureau Veritas.
The charterparty
22. By the terms of the charterparty the basic rate of hire was $US12,500 a day, subject to adjustment according to circumstances. In gross the amount payable under the charterparty was some $US2,330,000 of which 10% was paid as a deposit. The balance was payable by instalments with provision for cancellation on default. Payment was to be made to the disponent owner of expenses for food because it was the owner's responsibility to provide not only a master and crew but also all food and victualling services including liquor. Provision was also made for payment to the owners of charges relating to the disembarkation of passengers at various ports. While the initial period of the charter was 6 months, there were two options for renewal for successive seasons, the first exercisable by 15 December 1981 and the second by 15 September 1982.
23. The charterparty itself contained an itinerary of cruises for the 1981-1982 season. It provided for three Far East cruises, some round Australia cruises and several weekend cruises off the coast of Western Australia. The first cruise was the outgoing voyage from Venice to Fremantle and the last the return voyage to Venice from Fremantle. As it happened, some changes were made to this program.
24. There were a number of addenda to the charterparty. By addendum No. 1,
dated 11 September 1981, changes were made in the agreed
rates so that the
total amount payable was increased from $US2.3 million to about $US3.6
million. Special arrangements were made
for discounts and adjustments in rates
in the event that bookings did not meet expectations. Addendum No. 2, also
dated 11 September
1981, reflected arrangements made for Dalmacijaturist to
act as general sales agent in Europe, particularly for the southbound and
northbound voyages. By addendum No. 3, also dated 11 September 1981,
Dalmacijaturist agreed to meet some of the costs of additional
advertising in
Europe, having regard to what was described as the long term interests of the
parties. By addendum No. 4, dated 11
December 1981, some financial concessions
were made to A.O.L. by reason of the disappointing level of initial bookings.
By addendum
No. 5, dated 18 December 1981, Dalmacijaturist agreed to refund to
A.O.L. 5% of the total hire of the Dalmacija if A.O.L. carried
out the full
program and made payments on the due dates. The option time limit was
extended to 15 January 1982.
Promotion of the Dalmacija
25. To promote the venture A.O.L. formed four committees of its board of directors - one to deal with advertising, one with finance, one with entertainment and the fourth to handle preparation of the ship. The advertising committee comprised Alex Bajada, Roland Zar and Selwyn Bajada (Max Bajada's son). Advertising consultants were engaged to carry out a campaign of promotion involving advertisements and articles in newspapers and advertisements on radio and television. Initially A.O.L. employed Ad-Link to handle its advertising. Ad-Link produced a coloured brochure entitled "Cruise With The Great White Yacht MS Dalmacija", containing details of cruises and general information relating to the ship. Because of changes made from time to time in the Dalmacija's program, there were several editions of the brochure, each in a different colour. The brochure was distributed to travel agents. It was Mr. Zar's idea to refer to the Dalmacija as "The Great White Yacht" and that description featured prominently in advertising and in references to the ship.
26. Some time in 1981 A.O.L. engaged as its advertising consultant the firm of McAuliffe and Goff. In several reports prepared for A.O.L., McAuliffe and Goff made recommendations for the promotion of cruises including advertising on radio and television and in the press. In the main those recommendations were adopted. In or about September 1981 McAuliffe and Goff produced a brochure entitled "On and about the Great White Yacht", containing information about cruises and about the places the Dalmacija would visit. That brochure was also distributed to travel agents.
27. Between February 1981 and April 1982 there was an extensive program of newspaper advertising in which the description "The Great White Yacht" was prominent.
28. Alex Bajada, Mario Bajada and Roland Zar were cross-examined about the use of the expression "luxury" which appeared in a number of newspaper advertisements prepared by McAuliffe and Goff relating to the Far East Christmas cruise. It appeared in such contexts as "25 days of luxury cruising", "Imagine the romance and luxury of a Far East Christmas cruise on board the Great White Yacht the MS Dalmacija" and "Treat yourself to 25 nights of all the luxury and good living you can take on board the M.S. Dalmacija". All three directors said they were opposed to the use of the word "luxury" in advertising the Dalmacija. Mr. Zar said that in his discussions with Ad-Link he mentioned that the word "luxury" was to be avoided. In his opinion, the Dalmacija was not a luxury ship. Mario Bajada said that he was not happy with the use of the word in advertising as it had been the company's policy not to use the word. He expressed the opinion to Selwyn Bajada that "luxury" should not be used; he thought it misleading to "a certain degree" (transcript 2521). Alex Bajada said that when he became aware of the use of the term "luxury" in advertisements, he told Selwyn Bajada that in his opinion the Dalmacija was not a luxury vessel. In his words, "I never allowed it to be used again". (transcript 457)
29. The description "luxury" was capable of misleading prospective passengers. But I do not think that anyone was misled by it. In any event its use was only of peripheral relevance to the issues in this action.
30. The cruise the subject of these proceedings was also advertised as a "Christmas New Year Celebrity Cruise", this being a reference to persons, associated with radio and television, who travelled on the ship.
31. A.O.L. negotiated a promotional scheme with radio station 6IX in which the radio station advertised the Far East Christmas cruise and offered a discount of $1,000 (for each couple) to those who booked passages with a 6IX "Getcha Card". The advertisement also noted that those who booked with a Getcha Card qualified for participation in a draw from which "One lucky traveller will receive a total refund on his or her fare". The Getcha Card advertisement appeared in October 1981 at a time when bookings for the Far East Christmas cruise were not up to A.O.L's expectations. The offer of a $1,000 discount caused some discontent among those persons who had already booked passages, a discontent which was only partly alleviated by the offer of vouchers for the casino on board ship.
32. A.O.L. negotiated with West Travel Service, a travel agency operated by WA Broadcasters Pty Ltd which is a wholly owned subsidiary of the first respondent, for a package European tour incorporating the southbound voyage of the Dalmacija from Venice to Fremantle. In that connection A.O.L. received favourable publicity through a number of promotional articles appearing in The West Australian and written by its travel writers.
33. The Dalmacija arrived in Fremantle on 8 December 1981. There was a
weekend cruise from 11 to 14 December which was almost fully
booked. A.O.L.
obtained surveys from passengers who travelled on the maiden voyage as well as
those on the weekend cruise to see
whether there were any complaints or
matters that might require improvement. One complaint related to the price of
liquor, particularly
on the weekend cruise when duty free arrangements did not
apply. Under the charterparty the sale of liquor was in the hands of
Dalmacijaturist.
The price of liquor and of soft drinks was a matter of some
criticism by passengers during the cruise the subject of this litigation.
The Far East Christmas cruise
34. I propose now to say something more of the Far East Christmas cruise with which these proceedings are concerned. At this point I shall not deal so much with the evidence of particular witnesses as sketch the events that later featured in the newspaper articles. It will then be necessary to refer to the articles in detail against the background that their contents are alleged by the applicant to constitute misleading or deceptive conduct and to be defamatory.
35. When the Dalmacija left Fremantle on 14 December 1981 she was carrying 162 passengers, 38 of whom were travelling free of charge, either because they were VIPs invited by A.O.L. or because they were what a number of witnesses referred to as "media personalities". This description was used of some half dozen or so persons, known from radio and television, who had been invited on the cruise without charge in return for their willingness to play an active role in various forms of entertainment on board No formal arrangement was made with them by A.O.L. and there was uncertainty as to just what was expected of them. As mentioned earlier, their presence was used by A.O.L. in its advertising for the cruise.
36. There was a cruise director, Peter Bruce de Young, who had two assistants, Rhonda Meloncelli and Karen Janeen Neilsen. These three persons were employees of A.O.L.; their duties were to look after the interests of passengers and to act as a liason with the captain and crew. These duties included preparing a daily program of activities and of information to passengers about the position of the ship and weather conditions. Some witnesses were critical of the way in which Mr. de Young carried out his duties; others praised him. The views expressed by passengers were, I think, very much a reflection of their attitudes to the cruise generally.
37. The coloured brochure, to which reference has been made, described the Dalmacija as "crewed by 110 professional English speaking Yugoslav officers and men ... ". The evidence indicated that, while the captain and a number of the officers spoke good English, many of those who waited on tables and attended to the cabins did not. However most passengers were able to communicate their needs without much difficulty.
38. The passengers' cabins were on four decks - promenade deck, upper deck,
main deck and ocean deck (these are descending degrees
of cost and comfort).
Lifeboat drill
39. The Dalmacija encountered rough weather shortly after leaving Fremantle
and as a result lifeboat drill was delayed There was
some uncertainty in the
minds of the passengers who gave evidence just when the drill took place
though most put it two or three
days out of Fremantle. The ship's log, which
was tendered in evidence, recorded for Thursday 17 December 1981:
"At 10.00-10.20 executed alarm exercise,
'ABANDON SHIP' for passengers and crew".I am satisfied that this was the day on which lifeboat drill was carried out.
40. Each cabin contained information as to the whereabouts of lifejackets in the cabin, instructions as to how to put them on and the location to which the occupants should go in the event of an alarm. Some witnesses were critical of the way in which the lifeboat drill was conducted, saying that it was little more than a muster of passengers at boat stations, with some inspection to ensure that lifejackets were worn properly. It is clear that there was no lowering of lifeboats or instruction to passengers as to how they should behave in the event of having to board a lifeboat. It is also clear that the drill was not repeated though individual instruction may have been given to a few passengers who boarded the Dalmacija at Hong Kong.
41. The extent to which the correct wearing of lifejackets was checked seems to have depended on the person checking. Most witnesses said that their lifejackets were checked by a ship's officer or member of the crew or in some cases by Mr. de Young. Some said the inspection was cursory though others referred to a careful check. Some passengers (for instance James Henry Charles Lock, Thelma Annie Lock, Malcolm Nicholls, Albert John Stranger, Dolores Patricia Bailey and Elsie Maude Highet) compared the drill on the Dalmacija unfavourably with drills they had experienced on other ships.
42. I am satisfied that there was adequate instruction in each cabin as to the whereabouts of lifejackets, the putting on of jackets and the location of the relevant boat station. I am also satisfied that there was an organised checking of lifejackets but that the standard of checking varied considerably. The standard of lifeboat drill fell below that on a number of other passenger vessels.
43. When the Dalmacija reached Singapore she was unable to berth in the
passenger terminal. Whether this was because the ship was
late into port or
because of a breakdown in administrative arrangements did not emerge with any
clarity. The fact is that the berthing
took place some distance from the
passenger terminal and that this gave rise to complaints from a few passengers
because of the distance
they had to walk. However I accept the evidence of Mr.
de Young that, when he learned where the Dalmacija was to berth (which was
before she docked), he made arrangements through a department store in
Singapore for buses to pick up and drop passengers "about
a 100 yards" from
the ship. It is not without significance that the complaints about
disembarkation, though vociferous, were from
a few. The great majority of
passengers who gave evidence had no complaint to make about disembarkation in
Singapore.
Singapore-Hong Kong
44. The Dalmacija was due in Hong Kong at 6 pm on 25 December; due to rough weather she did not berth until 8.30 am on 26 December. There was much evidence from passengers as to the condition of the weather and seas between Singapore and Hong Kong. The evidence varied a great deal as there was inevitably a subjective reaction to the conditions that were experienced. It must be remembered too that there was a high proportion of elderly persons travelling on the Dalmacija.
45. Some reference must in due course be made to the evidence of the
passengers but it is helpful to begin with entries in the ship's
log which may
be taken to be a reasonably objective assessment. The Dalmacija left
Singapore at about 9 pm on 21 December. The
relevant entries in the log for
the ensuing days were as follows:
22 December46. The word "stumbles" is not a nautical term; the log was written in the Yugoslav language and "stumbles" is simply the translator's attempt to render a word into English. Having regard to the evidence of Captain Adams about the likely movement of the Dalmacija at the times in reference to which the word is used and also to the evidence of Mr. Lamond, and as a matter of common sense, I am satisfied that a more accurate expression is "pitches". Pitching is the motion of a ship as it travels in the direction of waves, in distinction to rolling which is the movement caused when the sea is moving into the side of the ship
"Strong wind blowing - NE force 6-7 Beauforts. Sea
from the same quarters, strength 5-6. Ship stumbles
appreciable, consequently there is a loss of speed".
23 December
"Blowing strong NE monsoon, force 7-8 Beauforts; sea
very rough. Ship stumbles appreciable and there is a
loss of speed".
24 December
"During the day blowing strong NE monsoon; 30-35 knots.
Sea very rough; the ship is appreciable stumbling and
the speed is 13 knots".
25 December
"Weather: wind moderate to strong NNE monsoon; sea from
the same direction, strength 5. Ship stumbles and
rolls ... At 12.30 stabilisers switched on".
47. The Court heard evidence from Malcolm Hugh Lamond, a meteorologist now in private practice but formerly the regional director of the Bureau of Meteorology in Sydney. Mr. Lamond was asked to examine the weather and sea conditions experienced by the Dalmacija from the time it left Fremantle on 14 December 1981 until its return on 8 January 1982. Mr. Lamond had access to a wide range of documentary material in the preparation of a report. I have no hesitation in accepting his oral and written evidence.
48. There is no doubt that the Dalmacija experienced strong winds and rough
seas between Singapore and Hong Kong. The roughest part
of the voyage was
encountered on 23 and 24 December; thereafter conditions improved. I borrow
this summary from Mr. Lamond's report.
"It is evident that for the entire voyage to49. It seems that word got around on the ship that the rough weather experienced was associated with typhoon "Lee". This view was rejected by Mr. Lamond who commented in his report:
Hong Kong, the M.V. Dalmacija has steered
nearly directly through a surge (wind maxima)
in the NE monsoon, caused by a strong high
pressure ridge extending south from central
Asia, whereby generally prevailing NE winds
at about 20-25 knots have increased to 25-30
knots and occasionally bordered on the
threshold of gale force (33 knots). Although
the vessel pitched appreciably, roll should
have been minimised as the sea and swell was
nearly directly head on. The weather
remained mostly fine and cloudy with the
temperature a mild 23-25 C". (Exhibit 66 p.5)
"At no stage during the entire voyage did the50. At the time the centre of typhoon Lee entered the South China Sea south of Manila on 26 December 1981, the Dalmacija had already berthed or was about to berth at Hong Kong, about 750 nautical miles to the northwest of the storm centre.
vessel encounter rough seas or weather
conditions caused by tropical cyclones. The
strong winds and rough seas encountered for
part of the voyage resulted from surges in
the prevailing, steady direction, trade winds
- or monsoons - associated with high pressure
(fine weather) systems and typical of regular
oceanic conditions, though varying in
latitude, throughout the year in both
hemispheres". (Exhibit 66 p.2)
51. From an examination of long term records and climatic statistics Mr. Lamond was of the view that December-January is a time when the combined probability of a tropical cyclone or typhoon occurring in the region traversed by the Dalmacija is near the minimum for all months of the year. In his further view, the December-January period represents a close-to-optimum period of the year for more pleasant weather conditions at ports of call in the South China Sea. Any criticism of A.O.L. for planning the Far East Christmas cruise when it did cannot be sustained.
52. There is no doubt that some passengers found conditions between Singapore and Hong Kong very uncomfortable indeed. A number were disconcerted by what they described as a shuddering in the Dalmacija in rough seas. The Dalmacija has twin screws, each controlled by a governor. When they come out of the water (as they do to some extent in rough weather or swells) their speed is automatically reduced though, for a very short time, it actually increases. The speed increases again when the screws go below the water. Captain Adams explained that when the propellers come out of the water there is a time before the number of revolutions is reduced and for that time the ship is shaken or shudders.
53. Captain Adams referred to a phenonomen known as synchronization, a term used to describe the situation where the length of a ship is equal to or somewhat less than the distance between swells. In such a case the ship tends to lift and fall into the trough between the swells. Captain Marsh used the term "synchronization" in relation to the rolling of a ship rather than its pitching. He explained that, whatever term is used, if a ship is long enough to fit from one swell to the next, it is less likely to pitch than a shorter vessel. But, in Captain Marsh's view, other factors have to be considered including the speed at which the ship is travelling. Because of its size the Dalmacija is more vulnerable to pitching than a longer vessel.
54. As advertised the Dalmacija was due to arrive in Hong Kong on Christmas Day. Two of the "media personalities" (Anne Elizabeth Sanders and Christopher John Bartlett) had planned to have Christmas dinner ashore. There was no evidence that any other passengers had so planned, indeed the advertising spoke of Christmas day on board the Dalmacija. In any event, Miss Sanders and Mr. Bartlett were most enthusiastic supporters of the Far East Christmas cruise. Christmas lunch and dinner were on board the ship which berthed the following morning in Hong Kong.
55. Some passengers criticised the lack of preparation for Christmas. I am satisfied that the ship was decorated for the occasion, though to an extent on the initiative of some of the passengers. On Christmas Eve carols were sung and Midnight Mass was celebrated. On Christmas Day there was a non-denominational service. A number of passengers, including Margot Caroline Siemer who assumed the role of Mother Christmas, organised Christmas festivities which seem to have been well attended though it must be remembered that at the time the Dalmacija was passing through some of the worst seas she encountered on this particular voyage
56. Some passengers were critical of the absence of what they regarded as a traditional Australian Christmas lunch. The evidence was that the meal was of a high standard but that some resented the absence of a Christmas pudding. There was some adverse reaction in the dining room when the Christmas meal was served; there was a banging of bottles and shouting over the absence of a Christmas pudding. This noise undoubtedly emanated from a table where a few "media personalities" were seated. I suspect that the "demonstration" was intended to be light hearted but that the circumstances of the Christmas lunch later assumed greater proportion in the minds of some passengers who were discontented with other aspects of the cruise.
57. When the Dalmacija reached Hong Kong, six passengers left and flew back
to Australia at their own expense. Of these, only Mr.
and Mrs. Stranger gave
evidence. I am satisfied they left the ship because of Mrs. Stranger's ill
health (she was complaining of
giddiness, due it seems to the rough conditions
between Singapore and Hong Kong) and her reluctance to face more days at sea
and
the possible aggravation of her condition. Dr. and Mrs. Laurie and Mr. and
Mrs. Ridley, the other passengers who left the ship at
Hong Kong, did not give
evidence.
Hong Kong-Manila-Surabaya-Fremantle
58. The Dalmacija left Hong Kong at about 4 pm on Sunday 27 December 1981. Once again the ship's log provides the most reliable guide to the weather encountered thereafter. There is nothing to suggest that between Hong Kong and Manila and Manila and Surabaya there were rough seas. Passengers spoke in glowing terms of the weather and seas between Manila and Surabaya.
59. Some passengers complained of delays in disembarkation, both at Manila and Surabaya. It is not easy to assess how far these complaints were justified, in particular what was meant by delays, for some time must necessarily elapse in the disembarkation of more than 150 passengers. Some passengers spoke of holdups in disembarkation at Manila and Surabaya but were not critical of the ship's organisation in this respect. They said that the holdups were due to the actions of local officials. There is no doubt that the attitude of passengers to disembarkation was to a large extent a reflection of their general attitude. In other words, there were some passengers who had complaints about many aspects of the cruise and others who said they thoroughly enjoyed themselves.
60. The first indication in the ship's log of a deterioration in the weather
after the Dalmacija left Surabaya appeared in the entry
for Wednesday 6
January 1982 which read:
"Sailing along the West Australian Coast.61. The entry for Thursday 7 January read:
Weather: strogh (presumably strong) SSW wind
6-7 (25-30 knots); sea very rough; ship
stumbles appreciable and losses on speed".
"Sailing along the West Australian Coast ...62. A number of passengers found the last day or so out of Fremantle the most uncomfortable of the voyage. It may be that, having experienced good weather for a number of days, they did not expect to encounter rough seas again before disembarkation at Fremantle. Witnesses spoke of rumours that passengers had sat up all night or stayed on deck, in some cases wearing lifejackets. No doubt the rumours gained strength by repetition. The concrete evidence was as follows.
During the morning hours strong wind from
SSW, force 6-7; sea from the same direction,
6 Beauforts. Wind and sea abating during the
day".
63. Bettie Mary Haynes said that on the night before disembarkation at Fremantle she was apprehensive because of the shuddering of the Dalmacija and she got out her lifejacket. So too did her companion, Ivy Ella Carmody. However they did not put on the jackets nor did they leave their cabin.
64. Eunice Gwen Smith was travelling on her own. One night (she thought it was two nights before disembarkation at Fremantle) she sat on the floor of her cabin wearing her lifejacket. She described that occasion as "the roughest part of the trip that I can remember". (transcript 2812)
65. David Martin Kleeman, who was 19 at the time, was travelling with his
parents, though after the Dalmacija left Singapore he was
in a cabin on his
own. He described how, as the ship was coming down the coast of Western
Australia ("I think it was about opposite
Shark Bay or somewhere in that
region" - transcript 3003), there was a continual banging as the bow of the
ship hit the water. He
was fearful for his safety, mainly because he was some
distance from any reasonable exit, and so he went on deck with his lifejacket.
This was about 2 am and he remained there for three hours or so; as dawn was
breaking he returned to his cabin. He carried his lifejacket;
he did not wear
it. While he was on deck, Mr. Kleeman spoke to a woman who was sitting in a
deck chair and wearing a lifejacket.
He said that the woman was on deck when
he arrived and, to the best of his recollection, was still there when he left.
Mr. Kleeman
was unable to identify the woman and, although many passengers
gave evidence, the person was not identified.
The publications in question
66. It is now convenient to deal with the newspaper reports in the order in
which they were published.
Daily News 8 January 1982
67. As part of the distribution of the Daily News on 8 January 1982,
billboards carried the words:
"NIGHTMARE VOYAGE SAY PASSENGERS".68. Mention has already been made of the headline on page 1 of the Daily News. It read:
"NIGHTMARE, SAY SHIP PASSENGERS"69. This was followed immediately by the sentence:
"Perth people on a 25-day Christmas holiday70. It should be said immediately that there was no evidence nce that any passenger on the Dalmacija told either of the Daily News reporters that the voyage was a nightmare. For that matter there was no evidence that any passenger made such a remark to Mr. Cotton, the reporter from The West Australian. While it is conceivable that a passenger may have made some such remark (although there was no evidence of this), it is inherently unlikely that a number of passengers did so. I say this, having regard to the many passengers who were called as witnesses by the applicant and the respondents, none of whom testified to making such a remark. In examination-in-chief Alex Bajada said that when he was interviewed by the Daily News reporters on board the Dalmacija on the morning of 8 January the word "nightmare" was not put to him. It is significant that in the course of a lengthy and thorough cross-examination it was never suggested that any reporter had mentioned the word to him.
cruise returned to Fremantle today saying the
voyage was a nightmare".
71. Against the objection of the respondents' counsel I allowed a question to
be put to passengers in these terms:
"Was the description of the voyage as a72. Objection was taken on the ground that A.O.L. did not suggest the term "nightmare" had been used with its literal meaning and that therefore witnesses were being asked to do no more than express a subjective opinion. I took the view that the expression "nightmare" had a well understood meaning in the context of the publications viz. a terrifying or horrible experience and that witnesses should be allowed to express a view as to whether the word was accurate or not as a description of the voyage. Such evidence would be evidence of a fact, not merely an expression of opinion.
nightmare an accurate or inaccurate
description?".
73. Seventythree witnesses were asked whether the description "nightmare" was accurate. The vast majority said it was inaccurate, many describing it as totally inaccurate. One of the passengers, Bettie Mary Haynes, said of the term "I think it is exaggerated. ... I think that there is a certain amount of truth in it but it is an exaggerated report" (transcript 1040). Another passenger, Eoin Harrop Cameron, said that he did not think the description was entirely accurate of the voyage as a whole, though between Singapore and Hong Kong it was perhaps a nightmare to him. He added, "Nightmare is not a term that I would probably use anyway. I would probably say that it was the pits or something like that" (transcript 1311). Marie Elizabeth Bertha Gardiner said that to some people the cruise would be a nightmare and she thought it an accurate description of the voyage. This was a somewhat curious statement for Mrs. Gardiner's particular complaint was of the food on the ship.
74. I should add for completeness that in The West Australian of 13 January
1982 there appeared a letter from Hans Gunther Rosendorff.
Mr. Rosendorff,
who died on 1 August 1983, was a well known bridge exponent; he was a guest of
A.O.L. on the Far East Christmas
cruise, in return for which he gave bridge
lessons on board ship. Mr. Rosendorff's letter included this passage:
"It is true that the trip between Singapore75. This passage appeared in a letter which was generally commendatory of the voyage and which was written because, in Mr. Rosendorff's words, it was "time that the saga of the Dalmacija was put into perspective".
and Hong Kong was a nightmare (I was so
seasick that I wished the ship would sink),
but she proved her seaworthiness".
76. Thus there was no evidence that any passenger said to any of the reporters that the voyage was a nightmare and there was evidence that the overwhelming majority of the passengers, at least of those called as witnesses, rejected the description.
77. The article continued:
"But almost as soon as it left WA waters78. Again, in the absence of any testimony from the reporters, there was no evidence that any passenger did "report" in these terms. In so far as it is a reasonable construction to place on the paragraph that huge seas battered the Dalmacija almost as soon as it left West Australian waters, it is highly unlikely that anyone would have made the statement. While some passengers experienced discomfort between Fremantle and Singapore, it was the result of swells rather than huge seas.
things started to go wrong. Passengers
reported that huge seas battered the
5650-tonne ship which they said was too small
for the open sea".
79. Certainly some passengers who gave evidence thought that the Dalmacija was too small for the seas encountered. They were not of course offering an expert or technical opinion but rather expressing their concern at the way the ship pitched and rolled at times. I have little doubt that an opinion that the ship was too small for the seas was initiated by one or more passengers, thought to have some knowledge of these matters, and that it then gained some currency. But, objectively, the evidence showed that the Dalmacija had sailed in various places throughout the world and that she was equipped to withstand the sort of conditions encountered on this voyage.
80. John Adams was a retired master mariner and harbour master with extensive experience of the navigation of ships in the South China seas. In 1949 he was appointed master of the MV Gorgon, a ship of the Blue Funnel Line carrying passengers and cargo from Fremantle to Malaysia. Before retirement Captain Adams had been with the Fremantle Port Authority as pilot, senior pilot, deputy harbour master, harbour master and divisional manager operations and relieving general manager.
81. In March 1982 Captain Adams travelled on the Dalmacija on a round Australia voyage, as a guest of A.O.L. to advise and assist the captain of the ship in matters of navigation by reason of his knowledge of local conditions. As a paying passenger, he and his wife travelled from Fremantle to Venice on the concluding voyage of the Dalmacija at the end of the 1982 summer season. In his opinion the Dalmacija had the most up to date navigational aids, the captain and crew were proficient and the ship was stable. On the round Australia cruise, the Dalmacija encountered rough seas off the eastern coast of Australia and, in Captain Adams' opinion, she "behaved very well". The Dalmacija was equipped with Denny Brown stabilisers to reduce rolling. In Captain Adams' view the ship was adequate to handle the open sea. In his further opinion she was not too small for the open sea and was adequate to carry passengers in a reasonable degree of comfort in rough seas.
82. When the Dalmacija was off the eastern coast of Australia, Captain Adams noticed an action of the ship that was described by a number of witnesses who travelled on the Far East Christmas cruise. In rough weather the propeller came out of the water and, in Captain Adams' words, "when the nose goes down and the tips of the propeller come out of the water it is a shaking feeling, a bit of a shudder" (transcript 571). The shudder was caused by the propeller coming out of the water and gaining extra revolutions. Captain Adams thought there was nothing unusual about the action of the Dalmacija in this respect. This is a matter referred to earlier in these reasons.
83. There was also evidence from Roy Ernest Marsh, a ship's master who had been with the State Shipping Service for more than 35 years. Captain Marsh had been in command of ships for 27 years, including State ships sailing between Fremantle and Darwin.
84. Captain Marsh thought he had seen the Dalmacija on one occasion but was not familiar with the ship. He was able to explain the significance of the Dalmacija's classification by Bureau Veritas (an organisation which he described as one of the "top classification societies") as "of the highest class" (transcript 2003). Captain Marsh had been shown a copy of the brochure describing various features and attributes of the Dalmacija and, in his opinion, the suggestion that the ship was unable to handle the open sea was "an absolutely ludicrous statement". (transcript 2004)
85. In Captain Marsh's view, the fact that a ship's propeller may come out of
the water, either partly or wholly, in seas such as
those encountered between
Singapore and Hong Kong was nothing unusual. He described the action as
producing a shuddering effect
and causing the after end of the ship to shake a
little bit. This, he said, was not a technical problem. The Dalmacija was a
twin
screw ship, having not one single large propeller but two fairly small
ones. In his words:
"... if you get a ship length, a ship speed,86. The Daily News article continued:
and a swell, or a length between crests of a
swell, there can be occasions where the whole
lot coincide and the stern of the ship will
lift out of the water". (transcript 2008)
"At least six passengers refused to continue87. The evidence was that six passengers left the ship in Hong Kong. Apart from Mr. and Mrs. Stranger, there was no evidence why they did so. There was no evidence that "they" told the reporters the matters mentioned in the article. Certainly there was evidence from Mrs. Carmody that she had to leave the door of her cabin open at times because of a smell in the toilet and there was evidence from Mr. Metcalf and Mrs. Gibbons of continuing cabin toilet smells. They were not persons who left the ship at Hong Kong. A few other passengers spoke of smells of temporary duration. To some extent these smells may have been attributable to the particular brand of disinfectant used but I am satisfied that in some cases it was due to toilet blockages associated with rough weather. There was evidence of smells in the public toilets. It is hard to know what to make of the reference to "poor sanitary conditions", as distinct from cabin smells. There was no evidence of poor sanitary conditions. As to chaos when disembarking at foreign ports, as already mentioned some passengers complained of delays in disembarkation. To some extent this may have been due to inadequate organisation on the ship but in some cases it was undoubtedly due to delays on the part of the port authorities. Any statement by a passenger that there were "no Christmas festivities" would undoubtedly have been untrue; I have made reference to this matter already.
the $3500 voyage and left the ship in Hong
Kong.
They told of poor sanitary conditions, foul
cabin smells, chaos when disembarking at
foreign ports and no Christmas festivities".
88. Apart from the particular comments I have made on the matters mentioned in the paragraph quoted, the paragraph is misleading in so far as it suggests a continuing series of conditions.
89. The article continued with two quotations attributed to passengers. One referred to the "tub" being "OK for a trip up the Swan River" and another that the Dalmacija is "not the Queen Elizabeth, that's for sure". No witness gave evidence of having made such a statement and of course there was no evidence from the reporters that anyone did so.
90. There followed this paragraph:
"High seas whipped up by Typhoon Lee just91. The ship was not diverted near Manila. Mr. de Young pointed out that to avoid any winds from the typhoon the Dalmacija sailed, not directly from Hong Kong to Manila, but to the north of the Phillipines and then south to Manila.
before Christmas Day forced the ship to
divert near Manila".
92. The next paragraph was preceded by the heading "Life-jackets" and read:
"Many passengers became sick and on return93. Again there was no evidence that anyone made these statements to the reporters though, as mentioned earlier, there was evidence that one passenger did put on a lifejacket during the rough seas encountered just out of Fremantle. There was evidence that three passengers made sure their lifejackets were at hand. The reference to lifejackets was amplified in the following paragraph in which this statement was attributed to a passenger:
more rough weather near the WA coast led to
some passengers putting on life-jackets".
"'We were so frightened we sat up all night94. Not only was there no evidence that Mrs. Bailey made such a statement but there was direct evidence that she did not. The error was picked up by the Daily News shortly after publication of the article of 8 January, as a result of a complaint by Mrs. Bailey. In the Daily News of January 15 appeared a short passage under the heading "Wrong person" in which it was said that the comments attributed to Mrs. Bailey "were not her comments but those of another passenger interviewed at the same time". Who that passenger was was not stated and there was no identification of the person during the proceedings.
with our life-jackets on,' Mrs. Margo Bailey,
of Bicton said".
95. The next passage read:
"About two-thirds of the passengers96. Since we do not know whom the reporters interviewed, the accuracy of the statement that two-thirds of those interviewed said the Dalmacija was far too small to handle the open seas cannot be tested, except to say that there was no evidence to support the passage.
interviewed said the Dalmacija was far too
small to handle the open seas. They
feared for their safety".
97. The next passage read:
"ABC breakfast announcer, Eoin Cameron, said98. Prominent in the article was a photograph of Mr. Cameron, below which the following appeared:
he had no criticism of the crew, but rough
weather and chaotic port visits convinced him
not to go on a similar cruise".
"Mr. Eoin Cameron99. This was one of the few occasions on which it was possible to test the accuracy of remarks attributed to passengers. Mr. Cameron was interviewed by Mr. McCourt of the Daily News. I am satisfied from the evidence of Mr. Cameron and Mrs. Cameron, who was present when her husband was interviewed, that Mr. Cameron told Mr. McCourt he enjoyed the cruise and that, when he was asked whether he would go again in the Dalmacija, the question was put in regard to his willingness to sail again that day. His reply was that he and his wife had been away from their children for some time and that he would not wish to sail again so soon. The report was quite misleading in so far as it suggested an unwillingness on Mr. Cameron's part ever to sail again on the Dalmacija.
... 'I won't go again'".
100. The next paragraph read:
"However, other media personalities who were101. Perhaps all that can be said about this paragraph is that it damned with faint praise. Persons answering the description "media personalities" gave evidence; some, particularly Mr. Hawkes, Miss Sanders and Mr. Bartlett were enthusiastic in their praise of the cruise. Indeed The West Australian article of 9 January reported Miss Sanders as saying that "she had a most enjoyable and relaxing holiday aboard the ship" and Mr. Bartlett as saying that "he had an excellent cruise and most passengers did not complain during the voyage".
given free promotional trips by the
organisers, said they had no complaints".
102. The article was then broken with a heading "Not suited" which was followed by seven paragraphs of criticism attributed to Mrs. Joan Ridley. Mrs. Ridley was not called as a witness and there was no evidence that she made any of the remarks attributed to her. Nor did the evidence justify the remarks attributed to Mrs. Ridley that the cruise "was grossly over-charged, the fares were expensive for what was offered, the food was mediocre ...".
103. The next paragraph referred to Mrs. Pamela Laurie, another of those who left the ship at Hong Kong. Mrs. Laurie was shown speaking to reporters and was described as "a disgruntled passenger who flew back from Hong Kong with her husband". Certain statements were directly attributed to Mrs. Laurie and there followed a paragraph referring to carol singers hanging on to ropes in the ship's lounge and passengers being told to sit and brace themselves in showers during rough weather. In my view this passage should be read, not as continuing statements attributed to Mrs. Laurie, but as editorial comment. There is no doubt that carol singers did, because of the rough weather, hang on to ropes while singing. The reference to passengers being told to sit and brace themselves in showers during rough weather was misleading. Passengers were told that, if they happened to be in the shower when rough weather was encountered, they should brace themselves.
104. What was directly attributed to Mrs. Laurie was the following:
"Christmas Day was a joke. There was105. One of the passengers, Raymond Arthur Gibson, said that a few days before Christmas he made up a cardboard sign "for Merry Christmas and A Happy New Year". (transcript 1092)
not even Christmas pudding.
There was not a sign saying Happy Christmas.
We got a passenger who was a bit of a sign
writer to do it".
106. A following passage read:
"One cabin, booked by prominent businessman,107. Mr. Eckhart did not testify and there was no evidence that he made such a remark. It may be that, on a fair reading of the paragraph, the statement is not attributed to Mr. Eckhart but might well have been made by someone else. But there was no evidence that anyone made such a statement to the reporters. There was however evidence that the Eckharts' cabin did have an unpleasant smell and that this continued throughout the voyage.
Mr. Charles Eckart and his wife, was said to
have a vile smell".
108. The following passage read:
"Another passenger who visited their cabin109. There was no evidence as to who made such a statement or that anyone did. Again, since the Daily News reporters did not testify, there was no evidence that they found the smell in the Eckharts' cabin "almost unbearable". There was evidence that the reporters visited the Eckharts' cabin with Alex Bajada and Peter de Young. Mr. Bajada told how Mr de Young explained to the reporters the problems encountered with plumbing in bad weather and how cabins and toilets were cleaned at least once a day. Mr. Bajada said that when he and the others went to the cabin there was "a very, very strong chemical smell" in the toilet (transcript 375). It was "unpleasant" (transcript 533) but he would not describe it as "unbearable" and it did not permeate into the cabin itself. Mr. de Young gave evidence of the same incident, describing the smell in the bathroom and toilet as "a strong smell but ... not unbearable or vile". (transcript 1621)
said: 'The bathroom smelled like a septic
tank on the blink'.
Daily News reporters found the smell in the
bath and toilet almost unbearable".
110. The next passage read:
"Angry passengers who left the ship in Hong111. This was an unfortunate piece of reporting. Apart from the fact that there was no evidence that any passenger had made a remark to the reporters to justify the sentence, it is quite clear from the evidence of Mr. de Young that when passengers left the ship at Hong Kong they were told that they could leave whatever luggage they wished. It was known to Mr. de Young that these passengers intended to fly back to Perth and he appreciated that there would be limits to the amount of luggage they could take with them. Not only was it not correct to say that passengers had been unable to get luggage off the ship; A.O.L. made special arrangements regarding baggage to suit the convenience of the passengers.
Kong turned up at the Fremantle terminal to
retrieve luggage they had been unable to get
off the ship".
112. The balance of the article referred to the Dalmacija being on lease to
A.O.L. and contained some comments by Mr. Alex Bajada
largely relating to the
unavoidability of the bad weather the Dalmacija had encountered.
The West Australian 9 January 1982
113. The first article in The West Australian appeared on 9 January and was headed "Criticism, praise for cruise ship". In this case the Court had the benefit of evidence from the reporter in question.
114. Mr. Cotton gave evidence that he was instructed by his chief of staff to
go to the Fremantle passenger terminal because the
Dalmacija had berthed that
morning. He was told that there had been some "complaints and problems" with
the cruise and was instructed
to "go and find out what was happening"
(transcript 2279-2280). He was aware that reporters from the Daily News were
present but
he did not co-operate with them and carried out his own
interviews. Mr. Cotton said that he "interviewed" (transcript 2281) 25 to
35
persons. Later he explained that he spoke to that number of persons but some
did not wish to be quoted. About 12 to 15 were agreeable
to being named and it
was in respect of those persons that he took notes. Two of those to whom
statements were attributed in the
article were not interviewed at the ship.
At the suggestion of the chief of staff, later that day, Mr. Cotton rang a
telephone number
and spoke to Miss Sanders and Mr. Bartlett. Their comments
were the only ones of a favourable nature from a named passenger. The
article
noted:
"All passengers questioned by The West115. The article attributed some statements to Mr. de Young but, as to passengers, mentioned only Lady Molly Virtue, Mr. Howard Gliddon and Mrs. Vera Grady. Lady Virtue and Mr. Gliddon did not give evidence; their comments as reported were critical of the performance of the Dalmacija in the open sea.
Australian agreed that the food and service
were excellent".
116. There is an issue as to whether Mrs. Grady made the remarks attributed
to her and I set out in full the passage relating to
her.
"Mrs. Vera Grady of Alexandra Road, East117. Mr. Cotton was not able to recall particular conversations with the persons referred to in the article and did not keep notes taken at the time. However he insisted that any remarks in quotations accurately recorded what he heard people say.
Fremantle said that one woman went on deck
with her life-jacket on fearing the worst,
and six people flew home from Hong Kong.
'I went to Mass every day we were out because
I thought that if we were going to go down, I
would go down "good"' Mrs. Grady said".
118. Mrs. Grady gave evidence that as she was leaving the ship on 8 January a person, whom she identified as a reporter because he was carrying a pad, asked her how she found the trip. She replied "I had a ball". She added "I even went to Mass because it made me feel good a couple of days". She denied that she said to the reporter that she went to Mass because she thought that if the ship went down she would go down "good". She also denied that she mentioned a woman going on deck with her lifejacket. She said "No, I did not. I did not see any woman with a life jacket". (transcript 662)
119. The respondents called as a witness David Martin Kleeman to whom
reference has already been made. He recalled Mrs. Grady on
board the
Dalmacija and said that he had a "vague recollection" one day hearing her say
to another woman something like:
"I'm going every day because if the thing doesThis was just before or after Mass which was celebrated each day by Father Bertram Adderley, now deceased.
go down I'm going to go down good" or
something to that effect. (transcript 3004)
120. I do not accept that Mrs. Grady made the remarks attributed to her in the newspaper article about a woman with her lifejacket on or wanting to go down "good". Mr. Kleeman's evidence of earlier remarks was very vague and there was no reason offered why he should recall these particular remarks after such a long time. On the other hand Mrs. Grady's conduct after the report appeared was consistent with her evidence. When she read the article which appeared in the Saturday edition of The West Australian she telephoned the newspaper to speak to "the editor-in-chief or somebody that was up high". It was her intention to complain of the remarks attributed to her. She was told that the editor was not in; she said that she would ring back. She rang again on Sunday and was told that it was the editor-in-chief's day off. She rang again on Monday and spoke to someone whom she thought was the editor. She complained about the report, saying that it was "all lies". She added "Something has to be done about it, please". The person at the other end, a male, said "Well I am very sorry. It must have been this other reporter or it must have been a new one ... I will do something about it". She added "I heard no more". (transcript 675-678)
121. It seems to me unlikely that Mrs. Grady would have gone to so much trouble to challenge the report and try to have it corrected if the remarks had been correctly attributed to her. It may be argued that she made the remarks and regretted having done so when she saw them in print. But this was not put to her in cross-examination. Mr. Cotton interviewed a number of people at the ship and, in the disorganised way in which the interviews were necessarily conducted, it would have been quite easy to confuse the identity of persons to whom he spoke and not to record their remarks with complete precision, particularly in the case of Mrs. Grady who was a somewhat effervescent person. Mention has already been made of the statement wrongly attributed to Mrs. Bailey, though of course not by Mr. Cotton.
122. The article in The West Australian contained a number of statements not attributed to any particular passenger but to passengers in general. It began: "Some of the 140 passengers who returned yesterday from a 25-day cruise in the M.S. Dalmacija claimed that the ship was not suitable for Australian waters". Reference was made to the fact that "They were constantly sea sick" and that "Many passengers planned to complain to Australian Ocean Line about the ship's performance and the lack of arrangements for passengers at ports". A fair reading of the article is that these complaints were widespread.
123. It is significant that the reported statements favourable to A.O.L. were made by other passengers who "came to the defence of the ship after reading reports in yesterday's Daily News". This tends to suggest that none of the statements made to Mr. Cotton was favourable, a conclusion which is at variance with the tenor of the evidence of so many passengers and is at variance with the passage already quoted, relating to food and service.
124. Mr. Cotton said that, while the contents of the article as published were much as he wrote it, the order of contents was altered by the sub-editor. He (Mr. Cotton) had the critics "high in the story" and those who were defending the ship "at the tail-end of the article". (transcript 2269)
125. There is no doubt that both the heading and contents of this article
were more balanced than the Daily News article in so far
as both heading and
contents contained praise and criticism.
Daily News 11 January 1982
126. The second Daily News article appeared on 11 January and was headed "Cruise passenger: Drill 'inadequate'".
127. This article was devoted almost entirely to the comments of Mr. Albert Stranger who left the Dalmacija at Hong Kong with his wife.
128. The article began with some remarks attributed to Mr. Stranger, in indirect speech, regarding the inadequacy of life boat and safety drill on board the Dalmacija. It included a statement, again in indirect speech, that "if a disaster had occurred during a recent cruise to Hong Kong, the passengers in the ship Dalmacija would not have known what to do". These remarks were correctly attributed to Mr. Stranger who had been a petty officer in the Royal Australian Navy for nine years and was indeed critical of the lifeboat and safety drill on board the ship.
129. Mr. Stranger's criticisms were directed at the infrequency of lifeboat drill and its inadequacy in terms of the instruction given to passengers and the checks carried out. As already mentioned, lifeboat drill was carried out on one occasion only and seems to have been confined to the identifying of passengers at their correct mustering stations and to a check, sometimes perfunctory, to see that lifejackets were in position.
130. Again the article contained criticisms said to have emanated from a
number of passengers but supported only by a limited number
of comments. The
article in question contained these passages:
"The Dalmacija, which returned to Fremantle on131. There was no evidence that "many of the 150 passengers" made criticisms to the Daily News reporters. The expression "sub-standard conditions" is a damning one, unqualified by any context in which it appeared. Yet there was no evidence that any passenger spoke to reporters of sub-standard conditions; nor did any passenger do so in the course of evidence.
Friday from a 25-day cruise to Hong Kong and
Manila, was criticised by many of the 150
passengers when they disembarked.
There were complaints of the ship's apparent
inability to handle open seas, sub-standard
conditions and lack of Christmas festivities
during the cruise".
132. Further criticisms, correctly attributed to Mr. Stranger, were as
follows:
"There were no organised sports on the ship133. It is not the position that there were no organised sports on board though many passengers who gave evidence were critical of the lack of space set aside for sporting activities. Because of the weather, the swimming pool was in use very little in the early stages of the cruise. There was only one table tennis table and deck quoits were hampered by lack of equipment.
and passengers were expected to pay very high
prices for drinks".
134. Many witnesses gave evidence regarding the price of drinks on board. Naturally passengers expected that when the Dalmacija was in the open sea liquor would be at duty free prices, considerably lower than those paid ashore. In so far as this criticism calls for some objective determination, the evidence was very vague indeed. Not often did a witness speak of a particular price as distinct from commenting that prices were too high or were reasonable. It seems likely that Dalmacijaturist did not pass on to passengers the full benefit of freedom from excise duties when the ship was at sea. As already noted, this was a matter that had emerged before the Far East Christmas cruise and it was brought to the attention of Dalmacijaturist by A.O.L. which itself had no control over prices.
135. The article concluded with a statement attributed to Mr. Max Viskovich
that the cruise was "first class", that it was "a lovely
ship" and that he and
his wife and daughters "all enjoyed it thoroughly".
The West Australian 12 January 1982
136. The fourth article, that in The West Australian of 12 January, was headed "Passenger faults cruise-ship drill".
137. This article took up the theme of the Daily News article and referred to criticism by Mr. Albert Strange (undoubtedly Mr. Stranger) that "emergency drills on board the ship were inadequate". It expressed the further view of Mr. Strange that "if there had been an emergency in the ship during the voyage total panic would have broken out". In evidence Mr. Stranger agreed that he made these remarks to a reporter.
138. These remarks were followed by the following passage:
"(The Dalmacija was criticised by some of the139. This passage was followed by further statements of a critical nature concerning lifeboat drill, again attributed to Mr. Strange. There followed a rebuttal by Mr. Alex Bajada on behalf of the Dalmacija's master, Captain Nadramija, in these terms:
140 passengers who returned on Friday from a
trip to Hong Kong and Manila. They said that
the shop (sic) performed poorly on the open
sea and that there was little organisation of
deck-board activities for the passengers)".
"'We reject the allegations that the ship's140. The article concluded with extracts from three letters written to The West Australian by passengers from the Dalmacija, saying how much they enjoyed their cruise "though they agreed with some of the criticisms". The letters emanated from Mrs. Bertha Curtis who wrote:
crew did not attend lifeboat drill ...
All passengers' life jackets were checked and
normal lifeboat drill was carried out a few
days after the ship left Fremantle'".
"I enjoyed myself so much, in spite of roughfrom Mr. and Mrs. S. Sainken who wrote:
seas, that I have booked for another cruise
in February";
"The Dalmacija does more than her fair shareand from Mrs. Roma Cribb who wrote:
of pitching and tossing, but if one is young
at heart, yearns for crisp salt air and is a
reasonable sailor, the cruise becomes quite
an adventure";
"I cannot agree with the '25 days of hell'141. The article concluded with a further reference to the letter writers in these terms:
comment - anyone who could not find something
happy and good to remember must be a very
unhappy person, wherever he or she may be".
"They all said that criticism of the142. Mr. and Mrs. Sainken gave evidence and their testimony was consistent with the statements attributed to them in the newspaper article. This article, like the previous one in The West Australian, contained some mixture of criticism and praise though, in view of its headline and the emphasis attached to Mr. Strange's remarks in the early parts of the article, it was on balance critical of the cruise.
ship had been exaggerated".
The interviewing process
143. There was of course no evidence from the Daily News reporters as to how they went about interviewing passengers. Mr. Cotton said that, while he went to the passenger terminal with the idea that there would be people with complaints about the cruise, he did not "specifically" seek out those who had complaints (transcript 2281). The reporters were at the terminal on an assignment. They were not there to conduct some form of inquiry. They were under no legal obligation to interview all the passengers or even to secure a balanced picture of the Far East Christmas cruise. But a failure to present in the newspaper articles a balanced picture of the cruise carried the risk that A.O.L. might do what it in fact has done - complain of misleading and deceptive conduct and complain that it was defamed.
144. The matter of selectivity in the choice of those interviewed and of those reported is of particular significance in the case of the newspaper articles complained of because of the clear implication in those articles that what was being reported were the views of most or many of those who travelled on the Dalmacija. Equally clearly this was not the case.
145. And it is hard to resist the conclusion that, particularly in the case
of the first Daily News article, the reporters were not
greatly interested in
expressions of praise for the Dalmacija. It is enough to refer to the
evidence of Margot Caroline Siemer,
Phyllis Mary Sullivan, Lynette Kaye
Butler, Mabel Annie McCulloch, David Hawkes, Cyril David Cribb, Muriel Louise
Nimmo, Philip James
Harris, Dianne Evelyn Hammond and Ellen Norah Parry, all
of whom spoke to reporters (in most cases identified as Daily News reporters)
of their enjoyment of the cruise but whose remarks were not noted, certainly
not reported.
Approaches to the respondents
146. Alex Bajada saw the billboard "Nightmare Voyage Say Passengers" and bought a copy of the Daily News of 8 January. He read the article on board the Dalmacija about 4 pm, just before he was to leave on the ship for one of the advertised weekend cruises. He returned to Fremantle at about 8 am on 11 January and then saw the article in The West Australian of 9 January.
147. On the morning of 11 January there was a meeting of directors of A.O.L. as a result of which an appointment was made to see Mr. Hummerston, the editor of the Daily News. The meeting took place later that day or the next day. It was attended by Alex Bajada, Mario Bajada, Roland Zar and Mr. Hummerston. Mr. Hummerston was known to Mr. Zar but Alex Bajada was the spokesman for A.O.L.
148. Alex Bajada told Mr. Hummerston that the directors of A.O.L. were very unhappy about the article in the Daily News. He said that to depict the cruise as a nightmare was "totally wrong and totally unfair to a company which was a West Australian company and to a company that believed it was offering a good product for the West Australian market" (transcript 402). He said that there had already been a bad reaction to the article in that, the day after it was printed, 5 passengers had rung the A.O.L. office to cancel their passages. He added that travel agents were reportedly removing the A.O.L. brochures from their shelves and that the telephones at A.O.L. "had gone completely dead". (transcript 403)
149. Mario Bajada complained that, even if there had been a section of the voyage between Singapore and Hong Kong that had been particularly bad, there was no way that one could have called the entire cruise a nightmare.
150. Alex Bajada and the other directors took the various criticisms in the Daily News article and responded to them, acknowledging that there had been some problems, particularly relating to plumbing.
151. Mr. Hummerston explained that he had not been the editor on 8 January, adding that "he had hoped that the reporters had got their story right because it had certainly worried him" (transcript 405). He said that it was unfortunate that there had not been any major international story on 8 January because, if there had been, the account of the cruise of the Dalmacija would not have ended up on the front page. He also said that he would not have printed the account on the front page and would not have used the word "nightmare".
152. The directors of A.O.L. asked Mr. Hummerston for a retraction of the article; in response Mr. Hummerston said that they could speak to Miss Fowler. The three directors spoke with Miss Fowler. None was very clear as to the precise matters discussed except to say, in a general way, that they went through the Daily News article pointing out their disagreement with its contents. As to the subject of smells in the Eckharts' cabin, Alex Bajada said that Miss Fowler was insistent that the smell was very strong and unbearable. Alex Bajada agreed, in cross-examination, that Miss Fowler maintained that her report was correct and fair.
153. In response to the approach made by A.O.L. to Mr. Hummerston, an article
appeared on page 3 of the Daily News of 13 January
1982 under the heading
"DIRECTORS DEFEND CRUISE SHIP". The article reported the opinion of A.O.L.
that claims that the cruise was
a nightmare were "exaggerated". In reporting
that the directors were upset by claims from passengers that they had not
enjoyed the
cruise, the article repeated alleged statements by passengers that
the ship could not handle the open sea, that there were no Christmas
festivities, that lifeboat drill was inadequate and that drink prices were
high. The article also included this statement:
"One couple who booked a luxury cabin154. The balance of the article contained statements by the directors regarding the seaworthiness of the Dalmacija and a rebuttal of other criticisms including those relating to the price of liquor. There was nothing in the article which could be described as a retraction of what had appeared in the Daily News on 8 and 11 January.
complained of a foul smell in the bathroom
that could not be removed by the ship's
stewards".
155. Following the appearance of the Daily News article of 13 January, the directors of A.O.L. arranged to see Mr. Slattery, the managing director of the first respondent. That meeting took place some days later and was attended by Alex Bajada, Mario Bajada and Roland Zar on the one hand and Mr. Slattery and Mr. Hummerston on the other. Neither Mr. Hummerston nor Mr. Slattery gave evidence. I accept the evidence of the A.O.L. directors as to what took place at their meetings with Mr. Hummerston, Miss Fowler, and then with Mr. Hummerston and Mr. Slattery.
156. At this last meeting Alex Bajada was again the spokesman for A.O.L. Mr. Bajada complained that the Daily News article of 8 January was "totally inaccurate and totally unfair and totally inappropriate for a company which was West Australian-based, where a lot of West Australian money was at stake" (transcript 411). He pointed out to Mr. Slattery that there had been a number of cancellations of A.O.L. cruises, that A.O.L. brochures were being removed from the offices of travel agents and that "we were in a position of losing a lot of money" (transcript 412). Mr. Bajada said that the Daily News article of 13 January was "a virtual regurgitation of their original article" (transcript 413), an opinion which, in my view, had substance. Mario Bajada again raised the question of the use of the word "nightmare" in the billboards and article in the Daily News, asserting that there was no justification for the use of the word. According to Mario Bajada, "Mr. Slattery replied that he also thought the word was a strong word but that possibly we also had some problems on the ship". (transcript 2515)
157. Alex Bajada asked Mr. Slattery for a "proper retraction which would give a proper response to the article that had been written in the Daily News" (transcript 413). Mr. Slattery did not offer a retraction of the Daily News article but he did suggest that there be a "follow-up article done by another reporter" (transcript 415). At that time the ship was on its second Far East cruise and Alex Bajada suggested that a reporter contact the ship by radio telephone. He offered to provide a list of passengers and that the reporter could choose those to whom he or she wished to speak. He added "I also insisted that the newspaper print a statement giving our answer to the publicity we had been given by the newspaper". (transcript 415)
158. A Daily News reporter, Amanda Platell, contacted the Dalmacija at sea
and on 25 January there appeared an article under the
heading:
"THREE CYCLONES, BUT ...159. The article began:
All's well on
luxury cruiser".
"The Dalmacija has weathered three cyclones160. The article then went on to point out that a number of passengers had been contacted by ship radio while the Dalmacija was about 150 km out of Hong Kong from Singapore. It continued:
since it left Perth last week but passengers
are still smiling.
The general feeling aboard is that the cruise
so far has been a great success".
"There was not a complaint from any of them.161. The article went on to report, in direct speech, the praise of three of the passengers. It referred to the earlier Far East cruise when some passengers "were of a different mind. They complained of cabin smells, poor food, a rough trip and a lack of entertainment". The article then reported a statement by Alex Bajada referring to the publicity to which A.O.L. had been subjected and responding to some of the criticism in the earlier article. As with the article of 13 January, this article contained no retraction of what had appeared on 8 and 11 January.
All agreed the food, service, entertainment
and conditions were first-class".
162. There were no further articles in the Daily News or The West Australian
concerning the Far East Christmas cruise of the Dalmacija.
Statement of claim - misleading or deceptive conduct
163. Against this background I turn to the pleadings to see precisely what is alleged to have been misleading or deceptive conduct on the part of the respondents and what in the billboards, articles and photographs is said to have been defamatory of A.O.L. I shall then consider the defence of the respondents with a view to determining what issues there are between the parties. It is convenient to look first at those paragraphs of the statement of claim that plead misleading or deceptive conduct.
164. The statement of claim is lengthy and detailed. Because so much of counsels' final addresses focused on the pleadings, reference to this detail is unavoidable.
165. Paragraph 14 of the statement of claim pleads that the Daily News
article of 8 January 1982 and associated photographs were
misleading or
deceptive or likely to mislead or deceive, within the meaning of s.52 of the
Trade Practices Act, in that by their import and content they made
representations to purchasers and readers of the newspaper that were false or
alternatively
had a tendency to mislead or deceive and did or were likely to
lead purchasers and readers into error in certain respects. The "import
and
content" may be paraphrased in this way:
1. The reporters had been informed by the majority of166. Paragraph 15 of the statement of claim pleads by way of further or alternative allegation that the article and photographs were misleading or deceptive in that by their "import and content" they falsely represented to purchasers and readers or alternatively had a tendency to do so and did or were likely to lead purchasers and readers into the error of believing the following:
or by a large and substantial number of passengers
that the voyage, in all its respects, had the
quality of a nightmare; that this nightmarish
quality was attributable to the fact that the ship
was, as a passenger cruise vessel, too small for
the open sea and was by virtue of its size unsafe
and therefore unseaworthy; that the unseaworthiness
engendered a sense of real and substantial fear in
the minds of the majority of the passengers for
their personal safety, thereby giving rise to a
sense of abject terror; that the fares paid by
passengers were too expensive for the services
provided; that the food provided was mediocre
generally and, in relation to the Christmas dinner,
did not include Christmas pudding; that the
Christmas festivities were inadequate; that the
safety precautions provided for passengers were
inadequate and passengers were advised and
encouraged to brace themselves in showers during
rough weather; that the facilities for passengers
were substandard including facilities available for
disembarkation at foreign ports, and the
disembarkation arrangements were chaotic; that the
passengers had generally been subjected to sanitary
conditions which were substandard and inadequate;
that the ship and food, services and facilities on
board were so substantially below the standard
which passengers could reasonably expect on such a
cruise that, unless these deficiencies were exposed
to the public, other consumers would be enticed by
A.O.L. to purchase tickets for subsequent voyages
and would be misled by A.O.L. into suffering the
same substandard ship, food, facilities and
services as had the passengers on the voyage in
question and so be taken advantage of by A.O.L; and
that passengers who had left the ship at Hong Kong
had been refused permission to remove their luggage.
In each case, para. 14 asserts, such was not
the case.
2. The only passengers who had no complaints were some
media personalities who had been given free
promotional trips and their attitude towards the
voyage was influenced and conditioned by the fact
that they had received free trips and did not
represent their true opinion of the voyage with
respect to the matters alleged in the preceding
paragraph; and, but for the fact that those media
personalities had received free trips, they would,
as ordinary fare paying passengers, have expressed
views in accordance with the information provided
by the other passengers.
In each case, para. 14 asserts, such was not
the case.
3. The article and photographs failed to report or
make any reference to favourable statements made or
attempted to be made to the reporters by passengers
on 8 January 1982 other than the media
personalities, it being implied that there were no
passengers who were favourably disposed towards the
ship.
This, para. 14 asserts, was not the case.
The Dalmacija was not a fit and proper ship for use167. Paragraph 19 of the statement of claim pleads that the billboard "Nightmare Voyage Say Passengers" was misleading or deceptive in that readers would be led to believe that it was the fact that a majority of or a substantial number of passengers had expressed the view that the voyage had the attributes and quality of a nightmare when this was not the case.
as a passenger cruise vessel in Australian waters
or in the waters of the Far East; the ship was
unseaworthy and inadequately equipped, by virtue of
its size, to negotiate the waters in safety or to
the reasonable comfort of its passengers; the food,
service and facilities on board were below the
standard which consumers could reasonably expect in
relation to the fares charged; A.O.L. had, in
relation to the voyage, taken unfair advantage of
its passengers as consumers by reason of the
substandard capability and performance of the ship
and the nature of the food, services and facilities
provided; and the voyage was a nightmare for the
reasons pleaded in para. 14.
In each case, para. 15 asserts, such was not the case.
168. Paragraphs 21 to 23 of the statement of claim plead that the article in The West Australian of 9 January 1982 was misleading or deceptive in that it contained an untrue account of what Mrs. Vera Grady had told the respondents' reporters.
169. Further, it is said in para. 24, the article of 9 January was likely to mislead purchasers and readers into the error of believing that the ship was unable to handle the rough weather encountered, especially between Singapore and Hong Kong; that passengers were constantly seasick; that A.O.L. as charterer of the ship and promoter of the cruise had failed to provide sufficient shipboard activities; that facilities on board ship to enable passengers to change their money into the currency of ports visited were inadequate; that arrangements made for the convenience of passengers to visit ports were inadequate; that the ship was unstable and rolled and pitched to an unreasonable degree to the discomfort and terror of passengers who were thereby induced to fear for their safety; and that many passengers were so dissatisfied with the performance of the ship and the lack of adequate arrangements for passengers at ports they they planned to complain to A.O.L.
170. In each case, para. 24 asserts, such was not the case.
171. Paragraph 26 of the statement of claim pleads that the article in the Daily News of 11 January 1982 was misleading and deceptive in that it was likely to lead readers into the error of believing that the lifeboat and safety drill on board the ship was inadequate and that, if a disaster had occurred during the voyage, passengers would not have known what to do; that the cruise had been criticised by many of the 150 passengers on board when they disembarked with regard to the ship's inability to handle open seas, substandard conditions on board and lack of Christmas festivities; and that the "many" passengers who so criticised the voyage constituted a majority or alternatively a substantial number.
172. In each case, para. 26 asserts, such was not the case.
173. Paragraph 28 of the statement of claim pleads that the article in The West Australian of 12 January 1982 was misleading or deceptive in that it was likely to lead readers into the error of believing that emergency drills on board the Dalmacija were inadequate to such an extent that, if a disaster had occurred in the course of a voyage, panic would have broken out; that the emergency drill held after the ship left Fremantle was not attended by any members of the ship's crew and that passengers were not instructed in relation to emergency procedures as required or at all; that the ship had performed badly on the open sea and below the standard which could reasonably be expected of a passenger cruise vessel; and that the deckboard activities provided for the enjoyment of passengers were inadequate.
174. In each case, para. 28 asserts, such was not the case.
175. Paragraph 29 of the statement of claim pleads that the articles and billboards were misleading or deceptive in that they "individually and/or collectively" falsely represented to readers or were likely to lead them into the error of believing that A.O.L. was unfit to be a member of the tourist trade; was unfit to organise and conduct a passenger cruise by the use of the Dalmacija, which itself was unfit for that purpose; was unfit to organise and conduct a passenger cruise at all; and was unfit to carry on business as a passenger cruise operator.
176. In each case, para. 29 asserts, such was not the case.
177. Paragraph 30 of the statement of claim pleads by way of alternative that, if the unfavourable statements attributed to passengers in the articles were in fact made, the articles were misleading or deceptive in that the representations contained in the statements were false or had a tendency to mislead readers into the error of believing that the matters referred to earlier were true.
178. In each case, para. 30 asserts, such was not the case.
179. The statement of claim contains further allegations that a reasonable and objective investigation by the reporters or editorial staff would have revealed that the reported unfavourable statements made in the articles were grossly exaggerated and substantially untrue or were not representative of the views of the majority of the passengers or a substantial number of them. It is then said that the first respondent failed to conduct any or any reasonably adequate inquiry concerning the truth or accuracy of the representations made in the articles, associated photographs and billboards.
180. There are then some catch-all provisions. Paragraph 33 of the statement of claim pleads that by publishing the articles and photographs, displaying the billboards, selling and distributing the newspapers, failing to conduct an adequate enquiry and failing to publish favourable statements, West Australian Newspapers Limited engaged in conduct which was misleading or deceptive or likely to mislead or deceive.
181. There follows an allegation that Mr. Harvey, as printer of the Daily
News and The West Australian, likewise engaged in conduct
which was misleading
or deceptive or likely to mislead or deceive. Alternatively it is said
against Mr. Harvey that in printing
the articles, photographs, captions,
billboards and newspapers, he was knowingly concerned in or was a party to the
contravention
by West Australian Newspapers Limited of s.52 of the Trade
Practices Act
Statement of claim - defamation
182. The cause of action in defamation is formulated in this way. Paragraph 36 of the statement of claim pleads, by way of addition or alternative to what has preceded, that the respondents printed and published the articles, photographs, captions and billboards "of and concerning the Applicant in regard to the conduct of its said business". The articles are then set out substantially in their entirety. Not surprisingly, the applicant does not complain of those passages reporting favourable comments by passengers or explanations offered by A.O.L.
183. Paragraph 37 of the statement of claim pleads that the words "in their
ordinary and natural meaning and/or their inferential
meaning" were meant and
were understood to mean in the case of the Daily News article of 8 January
1982 (including associated photographs
and the billboard):
that the voyage was a nightmare; that the ship was184. I have underlined the word "thereby" because of a submission by the respondents that para. 37 of the statement of claim must be read on the understanding that the defamatory imputations lie, not in each of the sub-paragraphs in which various meanings are attached to the words in question, but in the conclusions relating to A.O.L.'s fitness. Paragraph 37 was amended by leave on 30 April 1984 during the course of opening by counsel for A.O.L. It will be necessary to refer to this matter again later in these reasons.
too small for the open sea; that it was unsuitable
as a holiday cruise ship; that sanitary conditions
on board were poor and there were foul cabin
smells; that the organisation on board the ship was
deficient in that there was chaos when passengers
disembarked at foreign ports; that the ship was
unsuitable for travel in the waters between
Australia and South East Asia; that A.O.L. was
guilty of overcharging; that the ship and the food,
services and facilities on board were so
substantially below the standard which passengers
could reasonably expect on such a cruise, that
unless the deficiencies were exposed to the public,
other consumers would be enticed by A.O.L. to
purchase tickets for subsequent voyages and would
be mislead by A.O.L. into suffering the same
substandard food, facilities and services as the
passengers on the voyage in question and so be
taken advantage of by A.O.L.; that passengers who
left the ship at Hong Kong had been refused
permission by A.O.L. to remove their luggage from
the ship; that the ship was generally unseaworthy;
and that A.O.L. was thereby unfit to be a member of
the tourist trade; was unfit to organise and
conduct a passenger cruise by the use of the
Dalmacija, which itself was unfit for that purpose;
was unfit to organise and conduct a passenger
cruise at all; and was unfit to carry on business
as a passenger cruise operator.
185. Paragraph 37 continues by pleading that the words used in The West Australian article of 9 January 1982 meant that the ship was not suitable for Australian waters; that it was unable to handle rough weather between Singapore and Hong Kong; that it was unsuitable for travel outside the Fremantle heads; that it was unable to ride the waves in the open sea; that arrangements for passengers in foreign ports were inadequate; that the ship was generally unseaworthy; and that A.O.L. was "thereby" unfit in the various senses to which reference has already been made. Again the word "thereby" was introduced by amendment on 30 April 1984 and bears on the defamatory imputations that A.O.L. must establish.
186. Paragraph 37 then pleads that the words used in the Daily News article of 11 January 1982 meant that lifeboat and safety drill on board ship were inadequate to such an extent that if a disaster had occurred passengers would not have known what to do, in that lifeboat and safety drill was not done as often as required in accordance with standard passenger cruise requirements; that standard passenger cruise requirements required that passengers be checked off when they came on board for lifeboat drill and that this was not done; that passengers were not informed when lifeboat drill was conducted and, for that reason, they did not go on deck or attend drill; that no check was conducted by the crew of the ship to make sure that every one of the passengers took part; that the ship was unable to handle the open sea; that conditions on board the ship were below the standard required by a cruise ship and that the ship was unable to ride the waves; and that A.O.L. was "thereby" unfit in the senses already mentioned.
187. Finally para. 37 of the statement of claim pleads that the words used in The West Australian article of 12 January 1982 meant that lifeboat and safety drill were inadequate to such an extent that, if there had been an emergency, total panic would have broken out in that the lifeboat drill which passengers were informed was to take place on the fourth day after the ship had left Fremantle was not attended by a single member of the crew and no roll call of passengers was taken; that, instead of standard lifeboat drill being conducted in accordance with usual passenger cruise requirements, passengers who attended the drill were simply left to their own devices without any direction or instruction by the crew; that after waiting about aimlessly for a period of 10 minutes or thereabouts passengers attending the drill left the deck none the wiser about safety precautions; that at no other time between Fremantle and Hong Kong was any other organised safety drill instructed; that the ship was unable to handle the open sea; that conditions on board were below the standard required by a cruise ship; that the ship was unable to ride the waves; and that A.O.L. was "thereby" unfit in the senses already mentioned.
188. The remaining paragraphs of the statement of claim are chiefly concerned
with questions relating to damage and I shall deal
with those paragraphs
later.
Defence
189. The respondents' defence admits a number of paragraphs of the statement of claim and does not admit others. It denies most allegations of substance, thereby denying that there was any misleading or deceptive conduct on its part or that any of the articles, photographs or billboards was defamatory of A.O.L.
190. Paragraph 19 raises as points of law that the allegations in the statement of claim relating to misleading or deceptive conduct do not disclose a cause of action against the respondents; that publication by a publisher of a newspaper of matter of and concerning a person or corporation does not amount to engaging in conduct that is misleading or deceptive or likely to mislead or deceive merely because the matter is incorrect in whole or in part or is incomplete; and that the printer of a newspaper containing matter which is incorrect or incomplete does not thereby engage in conduct that is misleading or deceptive or likely to mislead or deceive.
191. Paragraph 21 of the statement of claim denies that the words set out in the statement of claim bore or were understood to bear or were capable of bearing or being understood to bear any of the meanings attributed to them by the statement of claim or any meaning defamatory of the applicant. Paragraphs 22 and 23 raise further defences referable to the claim in defamation. The first pleads that the words used were "fair comment made in good faith and without malice upon a matter of public interest". The latter pleads that the words were "true in substance and in fact".
192. The complexity of the issues of fact and law involved in the statement
of claim and defence is apparent.
193. Sub-section 52(1) of the Trade Practices Act is deceptively simple in
its language. It reads:
"A corporation shall not, in trade or194. Later sections deal with false representations of a particular nature or in relation to a particular matter (ss.53, 53A and 53B). Other sections (for instance ss.55A and 59) relate to misleading conduct or misleading statements regarding particular activities. A.O.L. relies only on s.52. Sub-section (2) of that section makes it clear that nothing in any succeeding section in Division 1 of Part V of the Act limits in any way the generality of sub-s.(1).
commerce, engage in conduct that is
misleading or deceptive or is likely
to mislead or deceive".
195. The last few years have seen the establishment of a substantial body of case law in relation to s.52 where the sale of land or the supply of goods or services are concerned. But, apart from a recent decision of this Court, the ambit of s.52 has not been explored in regard to statements in newspapers.
196. In Global Sportsman Pty. Ltd. v. Mirror Newspapers Ltd. [1984] FCA 180; (1984) 55 ALR
25 a Full Court of this Court (comprising Bowen C.J., Lockhart & Fitzgerald
JJ.) had before it a special case stated pursuant to
sub-s.25(6) of the
Federal Court of Australia Act 1976. The special case arose from proceedings
brought by the applicant against the respondent claiming damages under the
Trade Practices Act on the basis that certain statements in articles published
by the respondent were misleading or deceptive within the meaning of s.52
of
the Act and also claiming damages for defamation. By reason of the procedure
by which the matter came before the Court and the
questions asked in the
stated case, the answers of the Court were inevitably hypothetical.
Nevertheless some passages in the joint
judgment of the members of the Court
throw light upon the questions to be determined in these proceedings. I shall
list them in
the order in which they appear in the judgment.
1. "There is no definable boundary between conductSection 52 - respondents' case
which is misleading or deceptive or likely to
mislead or deceive and material which is
defamatory" (at p.29).
2. "... the meaning of s52(1) cannot be controlled by
the doctrine of freedom of speech, which
incorporates the freedom of the press. ...
Freedom of speech is but one of a number of
competing rights and interests which must be
accommodated" (at p.29).
3. "While information may be misleading or deceptive
or likely to mislead or deceive, it is only
conduct which is misleading or deceptive or likely
to mislead or deceive which attracts the operation
of s52(1)" (at p.30).
4. "... it is possible to conclude that the
publication of incorrect information may
constitute conduct which is misleading or
deceptive or likely to mislead or deceive within
the meaning of s52(1) of the Act; but will only do
so if the conduct contains or conveys a
misrepresentation" (at p.32).
5. "Some articles would more readily be taken as
statements by the newspaper than others. For
example, an item of local news, such as the
statement that a local company had failed,
particularly if unaccompanied by a by-line, might
often fit readily into that category. On the
other hand, foreign news such as a report of the
commencement of a war in another part of the World
might, of its very nature, often suggest that the
newspaper was doing no more than retailing
information which had been supplied to it" (at
pp.34-35).
197. The respondents' case in regard to the meaning and operation of s.52 of the Trade Practices Act was put this way. There is no mental element involved in a contravention of s.52; conduct is misleading if it is of the kind that leads somebody into error. It does not matter whether the conduct is fraudulent, negligent or entirely innocent. This is what Mr. Gleeson Q.C. described as the minor premise in the applicant's submission. He then asked "What is the major premise?" and answered that it was the foundation of the applicant's case that if a person who is in the business of providing information or advice, in the course of that business, provides information or advice that will or may lead someone into error, there is a contravention of s.52.
198. He then asked what were the practical consequences of that approach. If for instance a newspaper publishes a speech by the federal Treasurer in which a favourable view is expressed about economic conditions and prospects and the Treasurer is later shown to have been wrong, has there been a contravention of s.52? Mr. Gleeson suggested that the applicant's case amounted to saying that there is a law against publishing what the Treasurer said and there is a law against publishing what anybody says, if it may lead people into error and if anyone suffers damage as a result. If that be the case, said counsel, it is no longer necessary to rely on causes of action such as fraud, negligence or misrepresentation. The applicant's submission amounted to saying that any misrepresentation in trade or commerce that leads anyone into error gives rise to an action for damages.
199. Mr. Gleeson's answer was that in all other areas of the application of s.52 the relevant misrepresentation is about the goods or services that are provided, not in the goods or services that are provided. Any contravention of the Act lies in a misrepresentation concerning the goods or services provided. A newspaper, he said, might lead persons into error by the content of the information it publishes, but it makes no misrepresentation about the services it provides. This, he submitted, is a basis upon which s.52 might be held not to operate in the present case.
200. Mr. Gleeson submitted that there is an alternative approach to the
application of s.52 where newspapers are concerned and it
is to be found in
Global Sportsman Pty. Ltd. v. Mirror Newspapers Ltd., hereafter referred to as
the Global Sportsman case. What
is to be derived from that decision, he
suggested, is that in any case where it is alleged that a newspaper has
contravened s.52 of the Trade Practices Act it is of fundamental importance to
identify the representation of fact which the newspaper has made. In the
language of the judgment
at p.32:
"... it is possible to conclude that the201. Hence, it was said, you must identify the representation of fact which the newspaper is making by publishing the information. In the case of a newspaper the matter must be approached in this way, Mr. Gleeson submitted:
publication of incorrect information may
constitute conduct which is misleading or
deceptive or likely to mislead or deceive
within the meaning of sub-s.52(1) of the Act;
but will only do so if the conduct contains
or conveys a misrepresentation". (emphasis
added)
"When newspapers report that people have made202. Thus, in the respondents' submission, if a newspaper does no more than report statements made by others, there is no representation other than that the statement has been made. This is in marked contrast to the law of defamation where the fact that the publisher of an article does no more than report the remarks of another will be no answer if the statement is otherwise defamatory. This, said Mr. Gleeson, is a distinction the applicant failed to make in the conduct and presentation of its case. It was a failure to distinguish between two quite different allegations of fact - one an allegation that the passengers reported in the newspaper articles did not make the criticisms attributed to them, and the other an allegation that the criticisms reported were unfair or untrue. In Mr. Gleeson's submission, the respondents could not be said to have engaged in misleading conduct if they did not represent to their readers that the criticisms reported were true or fair.
statements they do not normally represent
that the statements which they are reporting
are true. When newspapers report that people
have made comments they do not normally
report that the comments are, in the opinion
of the newspaper, fair. When newspapers
report that people have made statements of
opinion, the newspaper does not normally
represent that the person whose opinion it is
reporting is a wise person. They report as a
fact, they represent, that the statement has
been made. They represent that the person
has expressed the opinion. They represent
that the person has made the comment".
(transcript 2913)
203. I have spent some time in setting out the respondents' submissions in relation to s.52. They are vital to the respondents' case and were made in an area of the law that is largely untapped.
204. The respondents' submissions were said to be important, not only on the
question of liability under the Trade Practices Act but also on the question
of damages. Mr. Gleeson submitted that the mere reporting of complaints did
not constitute a contravention
of the Act and that, if in the articles some
misrepresentation was found, the only damages to which the applicant would be
entitled
would be those flowing from the misrepresentation. That, it was
said, would confront the applicant with an impossible task because
A.O.L.
would have to live with the circumstance that the articles contained severely
critical statements by passengers, the publication
of which was not misleading
conduct. Any damage suffered by A.O.L. was equally attributable to those
statements. In this respect,
said counsel, the distinction between damages
for a contravention of s.52 and damages for defamation was crucial.
Section 52 - applicant's case
205. Mr. Malcolm Q.C., counsel for the applicant, replied to the respondents' submissions in this way. He said that, in general terms, he would not necessarily quarrel with the proposition that s.52 is limited in its application to a newspaper where the newspaper may be said to have made a representation that the impugned statement was true, well founded, wise, fair or just.
206. Paragraph 14 of the statement of claim, the first paragraph in which
reliance is placed on s.52, does not plead that there was
misleading or
deceptive conduct merely by virtue of what was published in the newspaper
articles. In counsel's submission:
"This is not a case ... where the newspaper207. Drawing attention to the headline in the Daily News article of 8 January 1982, Mr. Malcolm submitted that this was the newspaper's comment on what passengers were reported to have said. There was a representation of fact viz. that is what passengers said. Counsel drew attention to the particular questions asked and answered by the Full Court in the Global Sportsman case. As appears from the order of the Court at p.35 of the judgment, one of the questions asked was:
has simply quoted without any comment of its
own an attributed statement containing an
expression of opinion by a third party. We
are not in the position in this case where it
is necessary for us to contend that (the)
simple quotation by a newspaper in a
publication of a statement made by a third
party constitutes misleading or deceptive
conduct for the purposes of section 32 (sic)
merely if the statement is erroneous. We do
not have to put that proposition in this case
because, in our submission, this is not such
a case". (transcript 3213-3214)
"(ii)Can the publication of statements208. To that question the Court answered "Yes". In the view of the Court:
including statements of opinion made in
the ordinary course of the publication
of news in those parts of a newspaper
which are not advertising material
constitute conduct which is misleading
or deceptive or likely to mislead or
deceive within the meaning of s.52 of
the Act?"
"Conduct is likely to mislead or deceive if209. That is the standard of determining whether conduct is misleading or deceptive or likely to mislead or deceive. The Court continued at p.30:
that is a 'real or not remote chance or
possibility regardless of whether it is less
or more than 50 per cent' ". (at p.30)
"Evidence that an erroneous conclusion has210. At p.31 the Court commented:
been formed by reference to conduct is
admissible to establish that the conduct was
misleading or deceptive or likely to mislead
or deceive; such evidence may be persuasive
but it is not essential. Evidence of acts or
omissions resulting from the erroneous belief
may also be admissible but again it is not
essential. Section 52(1) is concerned with
the effect or likely effect of conduct upon
the minds of those by reference to whom the
question of whether the conduct is or is
likely to be misleading or deceptive falls to
be tested. The test is objective and a court
must determine the question for itself".
"The applicants argued that, nevertheless, the211. Mr. Malcolm drew attention to Glorie v. W.A. Chip & Pulp Co. Pty. Ltd. [1981] FCA 224; (1981) 39 ALR 67 in which, he suggested, the foundation of the action was that a statement of opinion could be misleading or deceptive in the event that the formulation of the statement as made conveyed a representation that the person who expressed the opinion knew facts which supported the opinion.
statement of an incorrect opinion is
misleading or deceptive or likely to mislead
or deceive merely because it misinforms or is
likely to misinform. An expression of
opinion which is identifiable as such conveys
no more than that the opinion expressed is
held and perhaps that there is basis for the
opinion. At least if those conditions are
met, an expression of opinion, however
erroneous, misrepresents nothing".
212. In Mr. Malcolm's submission, the passages referred to in the Global Sportsman case amount to no more than saying that in a case where there is mere publication of the fact that an opinion has been expressed, with nothing to suggest endorsement, approval or adoption and nothing tending to support the correctness of the opinion, s.52 has no impact. But if the situation is otherwise and there is a representation about the attributed opinion which is published, if that representation conveys adoption by the newspaper of the opinion as its own or bears its endorsement or contains a representation that the opinion is one which is well founded or fair or just or wise, that is the basis upon which s.52 may be attracted.
213. In relation to the Global Sportsman case, Mr. Malcolm contended that the
passage at p.31:
"An expression of opinion which isrefers to the contents of the particular opinion. In his submission, one must examine the contents of any particular opinion which is expressed so as to determine the meaning of the statement which has been attributed to a person in order to determine whether it conveys or contains some misrepresentation.
identifiable as such conveys no more than
that the opinion expressed is held and
perhaps that there is basis for the opinion.
At least if those conditions are met, an
expression of opinion, however erroneous,
misrepresents nothing".
214. What is to be gained from that decision and from Universal Telecasters (Qld) Ltd. v. Guthrie (1978) 18 ALR 531, said Mr. Malcolm, is that as a matter of law the publication of incorrect information can constitute conduct which is misleading or deceptive if the information so published contains incorrect information which is misleading or deceptive or likely to mislead or deceive.
215. In the applicant's submission, the Daily News article of 8 January 1982 contained representations by the first respondent as to what had been said and what had happened on the voyage and a representation as to the nature and quality of the voyage. In those circumstances, it was submitted, it mattered not whether the quoted statements attributed to named persons were an accurate report of what those persons had said. The first respondent had, in terms of the article itself, made representations with reference to the nature and quality of the voyage.
216. The applicant submitted that, on an examination of the articles, it appeared that the respondents endorsed, approved, adopted or conveyed a representation that the reported statements were well founded.
217. Referring again to the Daily News article of 8 January 1982, Mr. Malcolm
argued that the respondents were saying that reporters
had been informed by
the majority of or by a large or substantial number of passengers:
that the voyage in all its respects had the quality218. In the applicant's submission, if the Court were to find that on the proper construction of the article it was conveying a representation to the fair minded reader that the voyage was a nightmare for the various reasons stated, then the newspaper had adopted what it attributed to passengers as the basis for its own representation. Further if the Court were to find that on its proper construction the article represented that a substantial number of passengers, representing a fair cross section of those interviewed, or a majority of passengers said that the voyage was a nightmare, then the representation made by the respondents was that the statements had been made and represented the views of a majority of passengers.
of a nightmare; that this nightmarish quality was
attributable to a number of facts viz. the ship was
as a passenger cruise vessel too small for the open
sea, it was by virtue of its size unsafe and
therefore unseaworthy, the unseaworthiness of the
ship engendered a sense of real and substantial
fear in the minds of a majority of the passengers
on board for their personal safety thereby giving
rise to a sense of abject terror; the fares paid by
passengers for the voyage were too expensive for
the services provided; the food provided on the
voyage was mediocre generally and, in particular in
relation to Christmas dinner offered to passengers,
not even Christmas pudding was provided; the
Christmas festivities were inadequate; and the
safety precautions were inadequate.
219. In the applicant's further submission, the publication of foreign news is clearly based upon information supplied by a press agency or other source. But in the case of the articles complained of, what was reported was an item of local news published in circumstances where the newspaper made use of a billboard to attract attention to the article, thereby putting its own stamp on the article. In Mr. Malcolm's submission "it does not have a by-line; it is the newspaper's article". (transcript 3234)
220. As to onus of proof, Mr. Malcolm acknowledged that the applicant had,
under s.52, the onus of proving upon the balance of probabilities
that the
conduct of the respondents in publishing the articles was misleading or
deceptive. But, he said, the applicant did not
have the onus of proving that
passengers did not say to the reporters upon their return that the voyage was
a nightmare. This is
proof of a negative. No passenger who it is said made
the statement was identified in the article. No quotation attributed to any
passenger contained such a statement. The applicant called 72 witnesses, of
whom all but 4 gave evidence that the use of the word
nightmare was not an
accurate description of the voyage. In Mr. Malcolm's submission:
"If one finds that a very substantial number221. That submission must be tested against the evidence of witnesses who were asked about the use of the expression "nightmare" and its accuracy. Not only was there no evidence that passengers did say the cruise was a nightmare but the evidence of those passengers who did testify was overwhelmingly to the effect that they would not describe the cruise as a nightmare and did not think of it as such.
of passengers representing a fair cross-
section of those passengers expressed that
view, our submission is that forms a basis
taken together with other evidence for an
inference that the expression was not used".
(transcript 3238)
Section 52 - conclusions
222. In a judgment delivered at an interlocutory stage of these proceedings I
said:
"The first respondent published the articles223. That proposition was not challenged during the substantive hearing of this application and, it would appear, no submission of a contrary nature was advanced in the Global Sportsman case.
in the course of carrying on an activity
which was undoubtedly commercial and which
may be fairly described as conduct in trade
or commerce". (Australian Ocean Line Pty.
Ltd. v. West Australian Newspapers Ltd.
[1983] FCA 66; (1983) 66 FLR 453 at 456)
224. I mentioned earlier the respondents' submission that, in all other areas
where s.52 has been held to operate, the relevant misrepresentation
was about
not in the goods or services provided. In that regard I repeat what I said in
the interlocutory judgment delivered in these
proceedings:
"The sale of a newspaper is a sale of goods to225. In a particular case a newspaper may, by reason of its contents, make a misrepresentation in the relevant sense. Whether it does so depends upon considerations to which I now turn.
a consumer. And the buyer is a consumer not
only of the object he buys but, actually or
potentially, of products or services it
describes". (Australian Ocean Line Pty. Ltd.
v. West Australian Newspapers Ltd. [1983] FCA 66; (1983) 66
FLR 453 at 456).
226. In my view, a view which is consistent with the judgment in the Global Sportsman case, A.O.L. cannot succeed against the respondents pursuant to s.52 of the Trade Practices Act merely by showing that the articles in the Daily News and The West Australian reported opinions of passengers, which opinions did not accord with the facts. There must be something in the articles referable to the publisher's conduct which is likely to lead a reader into error. Thus a statement in one of the reports that a majority or very large number of passengers on the Dalmacija had made particular criticisms of the ship and the conduct of the cruise, a statement suggesting that the criticisms of particular passengers or passengers at large were well founded, a statement by the newspaper about the ship and the cruise or a statement apparently containing the opinion of the newspaper about the ship and the conduct of the cruise is each capable of constituting misleading or deceptive conduct. In each case the statement goes beyond the mere reporting of opinions by others and contains a representation by the newspaper itself.
227. The applicant must of course go further and show that the making of the representation was likely to lead a reader of the newspaper into error and that it suffered damage as a result.
228. The question whether any of the statements in the newspaper reports contained a misrepresentation in the sense to which I have just referred is "a question of fact to be decided by considering what is said and done against the background of all surrounding circumstances" (Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. [1982] FCA 136; (1982) 42 ALR 177 at 202).
229. I find that the headline "Nightmare, Say Ship Passengers" in the Daily News of 8 January 1982, the references to the voyage being a nightmare in that article and in the billboard, read in conjunction with the article, represented to the fairminded reader that the majority or at least a very substantial number of passengers on the Far East Christmas cruise found the voyage to be a nightmare. I accept too that when the article is read in its entirety it does more than merely convey the opinion of passengers in that regard. It is an article which, read in its entirety, conveys an assessment made by the newspaper that the voyage was a nightmare. And the impression conveyed by the article is that the voyage generally was a nightmare, not merely a particular section of it.
230. That impression is supported by the reference to huge seas battering the ship, to the ship being too small for the open sea, to poor sanitary conditions, foul cabin smells, chaos when disembarking at foreign ports and the absence of Christmas festivities. It is supported too by the statement that high seas forced the ship to divert near Manila, that many passengers became sick and that rough weather near the coast of Western Australia led to some passengers putting on lifejackets, that on Christmas Eve carol singers had to hang on to ropes in the ship's lounge while singing, that passengers were told to sit and brace themselves in showers during rough weather and that angry passengers who left the ship in Hong Kong turned up at the Fremantle terminal to retrieve luggage they had been unable to get off the ship. Significantly, those statements were not attributed to particular passengers save for particular criticisms said to have been made by those passengers who left the ship in Hong Kong.
231. Some statements were attributed to unnamed passengers and, in the absence of testimony by the reporters, it is not possible to say who those persons were or whether they made the statements attributed to them. However it is possible to say that the statement attributed to Mrs. Bailey was not made by her, as the Daily News later acknowledged, and that the criticisms attributed to Mr. Cameron did not fairly represent what he said.
232. The report of the cruise was likely to lead readers into believing that the voyage had for the passengers the quality of a nightmare and that this quality was due to the unsuitability of the Dalmacija for the open sea, the poor organisation of the cruise and the poor quality of the services provided on board.
233. It was submitted on behalf of the respondents that the description "nightmare" carried no critical connotation for an experience may be terrifying without any fault on the part of anyone concerned. Now it is quite true that to describe an experience as terrifying is not necessarily to cast criticism at anyone. One thinks of the experience, a few years ago, of passengers on an international flight that encountered volcanic ash between Singapore and Australia. This caused the plane to plummet thousands of metres before the pilot was able to regain control. No doubt passengers would have described that experience as a nightmare yet they were full of praise for the pilot's skill in handling the aircraft.
234. But the Daily News report leaves one in no doubt that the Far East Christmas cruise was a nightmare because of an unsuitable ship and inadequate organisation, a conclusion which was necessarily critical of A.O.L. And it was a conclusion which was misleading or deceptive because it did not accord with the facts and, I find on the evidence, was not reported to the Daily News reporters by a majority or substantial number of those who travelled on the cruise. I make that finding, having regard to the evidence of those passengers who did give evidence to which I have referred in some detail. I am reinforced in so finding by the fact that the reporters were not called to give evidence of matters peculiarly within their knowledge. See Accident Fire and Life Insurance Corporation v. Robertson [1909] UKHL 2; (1909) AC 404 at 413.
235. The article in the West Australian of 9 January began with the comment that "Some of the 140 Perth passengers who returned yesterday from a 25-day cruise in the MS Dalmacija claimed that the ship was not suitable for Australian waters". I am satisfied from the evidence of Mr. Cotton that some of the passengers who spoke to him did make that claim.
236. The applicant submitted that the paragraphs that follow read not merely as the reported opinions of passengers but as statements of fact, at least in the sense that what was reported was reported as accurate. This relates to the inability of the ship to handle rough weather, the seasickness of passengers, the lack of ship board activities and the requirement that passengers change their own money in ports. But on a fair reading of the article, I do not think that it purported to do more than report the views of some passengers. Again I am satisfied from the evidence of Mr. Cotton that such complaints were made to him by some passengers.
237. The statements attributed to Lady Virtue, Mr. Gliddon and Mrs. Grady, taken on their own, convey no more than that the article reported the criticism of particular passengers. Even taken in the context of the entire article the statements carry no endorsement by the writer. The onus lies on the applicant to establish a contravention of s.52. It did not establish that Lady Virtue or Mrs. Gliddon did not make the statements attributed to them. It did establish that Mrs. Grady did not make the statement attributed to her but, in my view, that statement would not lead a reader into error about what was said to reporters as to the qualities of the Dalmacija or those organising the cruise.
238. The applicant did establish that the passage in the article "Many passengers planned to complain to Australian Ocean Line about the ship's performance and the lack of arrangements for passengers at ports" was inaccurate. There were 162 passengers on board the Dalmacija and Mr. Cotton took notes in respect of only 12 to 15 persons. The onus of proof lies with the applicant but I am satisfied that many passengers did not plan to complain to A.O.L. On the other hand I am not satisfied that this passage would, in any significant sense, lead readers of The West Australian into error regarding the qualities of the Dalmacija or those organising the cruise in such a way that damage would result to the applicant.
239. As to the Daily News article of 11 January, the references to the inadequacy of lifeboat and safety drill appeared as the reported opinions of Mr. Stranger and did not, I think, carry the endorsement of the newspaper. And, because the statements were those of one passenger only, the report is not misleading as suggesting criticisms by many of the passengers.
240. On the other hand the article did refer to criticisms by "many of the
150 passengers when they disembarked". It continued:
"There were complaints of the ship's apparent241. I am satisfied, from the evidence of the many passengers who did give evidence, that the Dalmacija was not criticised by "many" of the 150 passengers when they disembarked and that this statement, taken in context including the following passage in which criticisms were detailed, was likely to lead readers into error regarding what was said by passengers as to the qualities of the Dalmacija and of A.O.L.
inability to handle open seas, sub-standard
conditions and lack of Christmas festivities
during the cruise".
242. In the main the article of The West Australian of 12 January reported the criticisms of Mr. Stranger (identified in the article as Mr. Strange) concerning emergency drills. There was a reference to criticism "by some of the 140 passengers who returned on Friday from a trip to Hong Kong and Manila". But I do not think that those criticisms carried the apparent endorsement of the newspaper, particularly when much of the article was taken up with letters in praise of the cruise.
243. In summary then, I am of the opinion that the publication of the Daily
News articles of 8 and 11 January 1982 constituted misleading
or deceptive
conduct.
Defamation - imputations
244. In addition to denying that the words published and complained of by the applicant were defamatory, the respondents plead fair comment made in good faith and without malice on a matter of public interest and, further or in the alternative, justification. Integral to the applicant's case and the respondents' defence is an understanding of what are said to be the imputations against the applicant, for it is the defamatory imputation which lies at the heart of the torts of libel and slander.
245. The respondents' case was put this way. The applicant can only succeed on the basis of the imputations alleged by it, not by demonstrating at the end of the day some other adverse imputation. Mr. Gleeson submitted that when the respondents came to justify what they published they were not required to justify the matter published, only such imputations as the applicant established were defamatory. The respondents were not required to establish the truth of the words contained in any defamatory matter. What was required was that they establish the truth of the imputation contained in that matter. There are two questions which become blurred when a judge sits without a jury. The first is a question of law - is the matter published capable of bearing the imputation relied upon by the applicant? The second question is one of fact - does the matter complained of in fact bear the imputation alleged?
246. The statement of claim sets out in great detail the meanings attached by the applicant to the words complained of. But the innuendoes are all false innuendoes; the defamatory meanings attached to the published words by the applicant are defamatory meanings alleged to result from the ordinary and natural meaning of the words themselves. See Lewis v. Daily Telegraph Ltd. (1964) AC 234, also Reader's Digest Services Pty. Ltd. v. Lamb [1982] HCA 4; (1981-1982) 150 CLR 500.
247. In the respondents' submission, because the defamatory imputation is to
be found in those sub-paragraphs of para. 37 of the
statement of claim
introduced by the word "thereby", it does not assist the applicant to
establish one or more of the meanings pleaded
in the sub-paragraphs preceding
the final sub-paragraph in each section of para. 37. Thus in the case of the
billboards, Mr. Gleeson
submitted, the question is:
"Would a fair minded person reading those248. In the case of the Daily News of 8 January, it was said, the question is whether the article carried the imputation that the applicant was unfit to be a member of the tourist trade, unfit to organise passenger cruises and unfit to carry on business as a passenger cruise operator. It does not assist the applicant to demonstrate some imputation which falls short of those imputations. And, said counsel for the respondents, whether the publication was defamatory must be judged in terms of the ordinary reader, not possessing the knowledge of the applicant's affairs that the Court now possesses.
billboards conclude that the applicant was
unfit to be a member of the tourist trade or
unfit to organise and conduct passenger
cruises or unfit to carry on business as a
passenger cruise operator? We say 'No'".
(transcript 3053)
249. In the case of The West Australian article of 9 January, the defamatory imputation is the same. In the respondents' submission, the criticisms contained in the article do not carry, on a fair reading, the imputations of unfitness laid in the statement of claim.
250. As to the Daily News article of 11 January, it was submitted that criticism of lifeboat drill was not a criticism of the applicant at all for it was not responsible for the drill. It was said that nothing in the article carried an imputation of unfitness. As to the article in The West Australian of 12 January 1982, the submission was much the same.
251. In the applicant's submission the various publications conveyed the particular meanings pleaded in the sub-paragraphs of the relevant paragraphs of the statement of claim and the imputation conveyed by those meanings was in short that the applicant was unfit to carry on business. It was an element of that submission that each sub-paragraph carried a defamatory imputation, culminating in each section with an imputation on the fitness of the applicant.
252. The question of defamatory imputations arose early in the hearing of this application. During the opening by counsel for the applicant, counsel for the respondents made a submission relating to the statement of claim as it then stood. At that stage para. 37 of the statement of claim pleaded, in respect of each of the articles including the photographs and billboards, that the words used carried a number of meanings including in sub-para (k) of each section of the paragraph an imputation that A.O.L. was unfit to be a member of the tourist trade, was unfit to organise and conduct a passenger cruise by the use of the Dalmacija which itself was unfit for that purpose, was unfit to organise and conduct a passenger cruise at all and was unfit to carry on business as a passenger cruise operator. Mr. Gleeson complained that though sub-para. (k) of each section of para. 37 plainly specified imputations of and concerning the applicant, there would be a real problem in the conduct of the hearing if the preceding sub-paragraphs were read as containing false innuendoes. The reason was that the meanings attached to the publications in those sub-paragraphs were, for the most part, incapable of carrying an imputation of and concerning the applicant. For instance, Mr. Gleeson submitted, simply to say of a voyage that it was a nightmare or of a ship that it was too small for the open sea might say something about the voyage and the ship but did not carry an imputation of and concerning A.O.L.
253. In Mirror Newspapers Ltd v. World Hosts Pty Ltd [1979] HCA 3; (1978-1979) 141 CLR 632,
Mason and Jacobs JJ. said at pp.638-639:
"Before the Defamation Act, 1958 (N.S.W.)254. The need for a clear statement of the defamatory imputations relied upon by an applicant is illustrated by Hadzel v. De Waldorf (1970) 16 FLR 174. At pp 177-178 Fox J. said:
altered the law of defamation in that State
the plaintiff had to prove at common law that
the defendant published to a third party a
statement about the plaintiff of a kind
likely to lead the recipient as an ordinary
person to think the less of him. The
essenceto think the less of him. The
of the action in defamation was that the
publication of defamatory matter operated as
a disparagement of the plaintiff's reputation
... Consequently, malicious statements which
injured a man's business or his goods but did
not disparage his reputation were not
actionable in defamation though they were
actionable as injurious falsehoods ... But a
plaintiff whose reputation was disparaged by
a defamatory statement could recover as
damages any business loss sustained in
consequence of the publication of the
defamatory statement ...".
"The need for particulars is emphasized by the255. The respondents' concern was that if each of the sub-paragraphs in the sections of para. 37 of the statement of claim was said to carry a defamatory imputation, almost insoluble problems would arise because the respondents would have to "tease out" of each sub-paragraph every possible permutation and combination of disparagement of the applicant which the sub-paragraph might carry and then seek to justify them.
plea of justification. It is the defamatory
imputations which the defendant has to show
were true and for the public benefit ... A
statement of fact or opinion to be found in
the matter set out in the statement of claim
may or may not be material to a particular
defamatory imputation. When, as here, the
matter pleaded is lengthy, the defendant
could be put to much unnecessary trouble and
expense in preparing to establish
justification. What could be much more
unfair would be the defendant going to trial
on a wrong view of the defamatory imputations
relied upon by the plaintiff. There is
another side to the situation. The
plaintiff might well wish to prevent the
defendant seeking to establish justification
in relation to defamatory imputations which
the plaintiff does not rely upon".
256. After some debate by counsel the matter was resolved by the applicant seeking and obtaining leave to amend the final sub-paragraph in each section of para. 37 in which meanings were attached to the publications so that, in each case, there was a culminating plea that the applicant was thereby said to be unfit to be a member of the tourist trade; was unfit to organise and conduct a passenger cruise by the use of the Dalmacija which was unfit for that purpose; was unfit to organise and conduct the passenger cruise at all; and was unfit to carry on business as a passenger cruise operator. The respondents took no objection to that application.
257. Having regard to the pleadings and, in particular, the circumstances in which the statement of claim was amended, I am of the opinion that the applicant must, to succeed in its claim for defamation, establish unfitness in one or more of the senses pleaded in sub-para. (k) of each section of para. 37. That is not to say that the matters pleaded in the preceding sub-paragraphs are irrelevant. As Mr. Malcolm pointed out, para. 20 of the defence admits the allegation in para. 36 of the statement of claim that the words published and complained of were all published of and concerning the applicant in the way of its business. In his submission, while the particulars culminate in an imputation of unfitness, the particulars themselves allege defamatory statements, though where the defamatory meaning is explicit it may not be necessary to set out the defamatory meaning but simply to plead the words used. Lewis v. Daily Telegraph Ltd supra at 265, 273, 281-282. I have no quarrel with that submission so long as it is clearly understood that the applicant must establish one or more of the imputations in sub-para. (k) of each section of para. 37 to hold the respondents liable in defamation.
258. In my view the Daily News article of 8 January 1982 and The West Australian article of 9 January 1982 were each defamatory of the applicant. Each carried a defamatory imputation that A.O.L. was unfit to organise and conduct a passenger cruise by the use of the MS Dalmacija, which was unfit for that purpose. I do not think either publication went so far as to impute to A.O.L. unfitness to be a member of the tourist trade, unfitness to organise and conduct a passenger cruise at all or unfitness to carry on business as a passenger cruise operator.
259. In the case of the Daily News article of 8 January, the defamatory imputation is overwhelming. I shall not repeat the many extracts from that article to which reference has already been made. It is enough to say that it must have carried to the ordinary reader a clear impression that due to the inadequacies of the Dalmacija and the poor organisation of the cruise, the Far East Christmas cruise became a nightmare for those who went on it.
260. While The West Australian article of 9 January was not so dramatic in its content or presentation, the ordinary reader would, in my view, reach the conclusion that A.O.L. was unfit to organise and conduct a passenger cruise by the use of the Dalmacija. The picture presented was that the ship was unsuitable and the organisation of the cruise poor.
261. The Daily News article of 11 January was, in my view, defamatory of the applicant. The reference to criticisms made of the Dalmacija, including its apparent inability to handle the open sea and of sub-standard conditions and lack of Christmas festivities, imputed an unfitness on the part of A.O.L. to organise and conduct a passenger cruise by the use of the Dalmacija and an unfitness on the part of the Dalmacija for that purpose.
262. I find that The West Australian article of 12 January did not carry the
defamatory imputations alleged by the applicant.
Defamation - fair comment
263. Mr. Gleeson suggested that the common law defence of fair comment ought more accurately be called honest comment. The essence of the defence is that, if publication of defamatory matter involves a person's comment or opinion on facts which are either correctly stated or are sufficiently widely known elsewhere, no action can succeed in relation to the publication unless the applicant can show either that the comment did not represent the honest opinion of the person whose comment it purported to be or that the comment was not one that any honest minded person could have expressed, however prejudiced he may have been and however exaggerated or obstinate his views.
264. In relation to the publications the subject of these proceedings, counsel for the respondents submitted that the identity of the person whose comments were made was not relevant. It would only be relevant, he suggested, if the applicant contended that the comments did not reflect an honestly held opinion. But that was not the issue in the present case. That being so, it did not matter whether matter in the nature of comment was comment of a reporter or of passengers.
265. In the respondents' submission, the onus of proof lay upon the applicant to establish a dishonestly held opinion, so long as there was comment upon facts truly stated.
266. Mr. Gleeson examined various statements in the articles with a view to
distinguishing what was comment. In each case, he said,
any matters of
comment were on facts correctly stated. It would be necessary, in those cases
where the comments of passengers were
reported, for the applicant to
demonstrate that the passengers did not honestly hold the opinions attributed
to them. It was the
respondents' further submission that the aspects of the
articles of which the applicant made most complaint, viz. criticism of the
ability of the vessel to cope with the sea conditions, were mainly matters of
comment made by passengers. Mr. Gleeson said:
"The applicant is really complaining in this267. In answer, Mr. Malcolm submitted that the respondents were required to discharge the onus of proof which rested upon them to show that the words were comment and not statements of fact, that they were made upon facts truly stated and that they were made on a matter of public interest. While in certain circumstances it is permissible to base a comment upon facts which are not themselves stated in an article, e.g. where those facts are notorious, this was not such a case. Given the particulars of defence, it was argued, the respondents could not go outside the facts stated in the articles.
case of the fact that comments made by irate
and dissatisfied passengers were reported by
the newspaper and so far as the law of
defamation is concerned, the relevant
principle to apply to that situation is that
provided the facts on which those comments
were based are correctly stated in the
article, the newspaper is entitled to report
them with impunity unless it can be shown by
the applicant that the comments are not
honest comments". (transcript 3077)
268. In the applicant's submission, editorial comment is not made fair if it is a comment upon comments made by other persons and it is then sought to put forward the comments made by others as the facts upon which the editorial comment is based. It is necessary, said counsel for the applicant, to prove the facts which the person quoted alleges as being true before the comment can be said to be upon facts truly stated. Where the comment is not specifically identified, the tendency of the courts is to hold the entire statement to be fact so that the defence of fair comment is not available, only that of justification. The applicant's submissions are supported by authority. I refer in particular to Gatley on Libel and Slander 8th ed. paras 710-712.
269. Particulars of the defence of fair comment were sought and given. What
follows is not the precise form which the request and
answer took but it
adequately conveys the sense of the particulars.
Q1. State the facts upon which the respondents allege270. The first answer might well have invited a request for still further particulars. Paragraph 22 pleads as a matter of public interest "the attributes and qualities of the 'Dalmacija' as a passenger ship and the nature and quality of the facilities and services offered by the applicant to the public of Western Australia and elsewhere on passenger cruises on the 'Dalmacija' ".
such comment is based.
A1. The facts relied upon are the facts referred to in
the respective newspaper articles referred to in
paras 13, 20, 25 and 27 of the statement of claim.
Q2. State the matters which the respondents allege are
of public interest.
A2. The matters of public interest are those pleaded in
para. 22 of the defence.
271. I agree with the applicant's submission that it is not enough that the
respondents have managed to "dredge up evidence" tending
to support statements
said to have been made by one or more of the passengers on the Dalmacija. The
matter of fair comment is to
be tested against the facts as they existed at
the time of publication and, it would seem, as they were known to the
publisher at
the time the comment was made. Gatley para. 712. In Telegraph
Newspapers Co. Ltd. v. Bedford [1934] HCA 15; (1934) 50 CLR 632 at p 653 Evatt J. said:
"... the defence of fair comment is only272. The respondents' difficulty is that there was in most cases no evidence that a passenger made the statement he or she was reported as making and, in two cases, there was positive evidence that a passenger did not make the statement attributed to him or her. By way of illustration, there was no evidence that Mrs. Ridley made the very strong criticisms given prominence in the Daily News article of 8 January, yet the article is said to be in part a comment on what she said.
available to a defendant who has stated the
relevant facts with accuracy, and stated them
in such a way that a reader of the
publication may distinguish and seperate what
is asserted as fact, so as to determine for
himself whether the defamatory comment is
fair or otherwise".
273. In my view the description in the Daily News article of 8 January of the voyage as a nightmare was a statement of fact because it attributed to the voyage the qualities of a terrifying experience. But if I am wrong I do not think that the position of the respondents is any the stronger. If the use of the term nightmare was by way of comment, what were the facts upon which it was based? I am satisfied, on the evidence, that the Dalmacija was not too small for the open sea, that there were not poor sanitary conditions, that there were not foul cabin smells though there may have been unpleasant smells in some of the cabin toilets, that there was not chaos when disembarking at foreign ports and that there were in fact Christmas festivities. I am satisfied that the ship was not forced to divert near Manila and that, though some passengers were sick, it was not accurate to say that many passengers became sick. In terms of the remarks attributed to Mrs. Ridley, it was not shown that the voyage was grossly overcharged, or that fares were expensive for what was offered or that the food was mediocre. In relation to the remarks attributed to Mrs. Laurie, it was not shown that Christmas day was "a joke". Passengers were not told to sit and brace themselves in showers during rough weather except in the sense, already mentioned, that passengers were told that if they were in the shower during rough weather they should brace themselves. It is not a fact that passengers who left the ship in Hong Kong were unable to get their luggage off the ship; arrangements were made by A.O.L. to meet their convenience in that regard.
274. The article in the West Australian of 9 January contained little by way of comment; essentially it was a report of what passengers, named and unnamed, were alleged to have said. The assertions that the Dalmacija was not suitable for Australian waters and did not seem able to handle the rough weather it encountered on the voyage were, in my view, statements of fact and not by way of comment. But if I am wrong and one or both assertions were by way of comment, again I ask - where are the facts on which comment was founded? They do not appear in the article. The evidence, particularly that of Captain Adams and Captain Marsh, was that the ship was suitable for Australian waters and was able to handle rough weather. The reference to many passengers planning to complain to A.O.L. about the ship's performance and the lack of arrangements for passengers at ports was a statement of fact, not a comment. And, if a comment, no facts were established to justify the comment.
275. The article in the Daily News of 11 January concerned statements made by Mr. Stranger and complaints made by many of the passengers when they disembarked about the ship's apparent inability to handle open seas, sub-standard conditions and lack of Christmas festivities. These were assertions of fact, not comments.
276. It is unnecessary to consider the defence of fair comment in relation to The West Australian article of 12 January for I have found that article not to be defamatory of the applicant.
277. In relation to the defence of fair comment, it is desirable to make some reference to the provisions of the Criminal Code of Western Australia. Section 5 of the Criminal Code Act 1913 provides that when, by the Code, any act is declared to be lawful, no action can be brought in respect of that act. Chapter XXXV of the Code, which is concerned with defamation, distinguishes between what is "lawful" and what is "a lawful excuse for the publication of defamatory matter". Section 355 makes it lawful to publish a fair comment on one of the matters there set out. Section 357 provides that it is a lawful excuse for the publication of defamatory matter if the publication is made in good faith in one of the circumstances there mentioned. Section 357 does not provide a defence in civil proceedings for defamation. West Australian Newspapers Limited v. Bridge [1979] HCA 10; (1979) 141 CLR 535. In my view, none of the circumstances referred to in s.355 is applicable to any of the publications the subject of the present proceedings; hence there is nothing in the Code upon which the respondents may rely by way of answer to the cause of action in defamation.
278. Mr. Malcolm submitted that s.355 of the Criminal Code is exhaustive in
relation to matters that may properly be described as the subject of fair
comment. While the section makes it lawful
to publish a fair comment on any
of the matters therein referred to, I do not think it necessarily exhausts the
matters upon which
the plea may be sustained at common law. Fleming, Law of
Torts 5th Ed. 578 n.37 comments: "The Codes specifically enumerate the
various
matters of public interest on which it is 'lawful' to pass fair comment,
without any apparent deviation from the common law".
The comment is not
repeated in the 6th Ed. In Mr. Malcolm's further submission, comment about
the services provided by a commercial
organisation does not fall within the
conventional categories of public interest. It is unnecessary to pursue these
matters for
I do not regard the defamatory matter as comment in the case of
the three articles held to have been defamatory of the applicant.
Defamation - justification
279. The remaining defence is that of justification. In the respondents' submission, what has to be justified is not the particular matter appearing in the articles but the imputations attached to them.
280. In support of the plea of justification, the respondents pointed to a
number of matters by way of criticism of the applicant,
in particular:
(1) The conduct of the applicant in creating281. Mr. Malcolm argued that the proposition that what had to be justified were imputations rather than the words used was an oversimplification. In his submission, to justify an imputation it was necessary to justify the reasons which the publication advanced in relation to them. The defamatory imputations were not to be found only in para. (k). Counsel referred to the particulars of defence which he said were "points of justification" (transcript 3118) put forward to justify imputations relating to the suitability of the Dalmacija.
unrealistic expectations in its passengers by
engaging in misleading advertising and the
making of exaggerated claims in its
promotional activity.
(2) The conduct of the applicant in providing a
vessel which in not abnormal sea and weather
conditions behaved in a fashion that caused a
substantial number of passengers serious
discomfort and alarm.
(3) The applicant's inept handling of problems
affecting customer relations and, in
particular, problems relating to plumbing and
offensive smells.
282. In Western Australia the common law defence of truth is a sufficient defence. West Australian Newspapers Ltd v. Bridge supra; Gobbart v. West Australian Newspapers Ltd (1968) WAR 113.
283. Whether an imputation is true or substantially true is a matter of fact. Mr. Malcolm submitted that the articles complained of had quite a distinct character because they were a fairly intricate web of fact and opinion.
284. The onus lay upon the respondents to establish the truth of the
defamatory matter in the newspaper articles. This they failed
to do; indeed
they did not seek to do so with any great enthusiasm. No independent evidence
was adduced by the respondents to justify
any of the criticisms made of the
Dalmacija - of its ability to handle the seas, of its suitability for the
cruise in question or
to support any of the other criticisms reported of the
ship and the organisation of the cruise. While, in the evidence of some
passengers,
criticism was made of various aspects of the voyage, on no view
was it shown that the voyage was a nightmare; that the ship was too
small for
the open sea; that there were poor sanitary conditions, and chaos when
disembarking at foreign ports; and that there were
no Christmas festivities.
Nor was it shown that about two-thirds of the passengers interviewed said the
Dalmacija was far too small
to handle the open sea or that they feared for
their safety. Nor was there evidence that passengers were constantly seasick
or that
the ship was not suitable for Australian waters. In terms of what I
have held to be the defamatory imputation - that A.O.L. was
unfit to organise
and conduct a passenger cruise by the use of the Dalmacija which itself was
unfit for that purpose - the respondents
failed to make good the imputation.
The defence of justification must fail.
Defamation - pendent jurisdiction
285. No serious question arose as to the jurisdiction of the Court to entertain the claim for defamation.
286. The claim under s.52 of the Trade Practices Act was not only bona fide
but, in the event, has succeeded. The claim in defamation arose out of the
same publications as the claim
under s.52. There can be no doubt of the
jurisdiction of this Court to entertain both causes of action. Philip Morris
Inc. v. Adam P. Brown
Male Fashions Pty. Ltd. [1981] HCA 7; (1980-1981) 148 CLR 457; Fencott
v. Muller (1982-1983) 46 ALR 41.
Damages
287. Neither in the statement of claim nor in the presentation of its case did the applicant draw any significant distinction between the damages it claimed pursuant to sub-s.82(1) of the Trade Practices Act and the damages it claimed for libel.
288. Paragraph 38 of the statement of claim pleads that in consequence of the printing and publication of the articles the applicant "has been injured in its credit and business and in its trade and commercial reputation and has been brought into public scandal, odium and contempt". This is the conventional pleading in defamation. Paragraph 40 of the statement of claim pleads that shortly after publication of the articles and as a consequence of their publication, despite extensive television advertising arranged by A.O.L. to mitigate the loss it anticipated suffering, a substantial number of persons who had made reservations for subsequent cruises cancelled their bookings, travel agents removed tour brochures from their racks and tour promotors and travel agents became generally reluctant to promote the tour for fear of being tainted with the adverse publicity generated by the respondents' conduct.
289. Paragraph 41 of the statement of claim pleads that as a result of the
publication of the articles, photographs and billboards
the applicant has
suffered loss and damage. That loss and damage is particularised in this way:
" PARTICULARS290. These particular items of loss are elaborated to some extent in further and better particulars of the statement of claim furnished by the applicant.
(a) The value of cancelled bookings- $150,938.00
(b)Loss of income from future
bookings
(c)Loss of profit from future
business
(d)Substantial injury to its
business and trading reputation".
291. It is convenient at this point to deal with steps taken by A.O.L. to
counter the impact of the articles in the Daily News and
The West Australian.
Alex Bajada immediately arranged with TVW Enterprises Ltd, the proprietor of
television channel 7, to show a
series of "testimonial ads". These involved
various passengers from the Far East Christmas cruise speaking in favourable
terms of
the voyage. As appears from exhibit 20 (invoices prepared by TVW
Enterprises Ltd), there was extensive television advertising throughout
January 1982. Mr. Bajada invited some radio announcers to inspect the
Dalmacija. There was extensive advertising on radio station
6IX during January
and February 1982. I am satisfied that the applicant took all reasonable steps
to mitigate its loss.
Damages - relevant principles
292. In the applicant's submission the measure of damages under s.82 of the
Trade Practices Act, at any rate in the case of a contravention of s.52, is
that applicable in cases of tort. It was put by the applicant's counsel in
this way:
"... doing the best one can in the light of293. Counsel relied on the principles enunciated in Brown v. Jam Factory Pty. Ltd. [1981] FCA 35; (1981) 53 FLR 340 and Mister Figgins Pty Ltd v. Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23. I accept the applicant's submission that where the conduct relied on to establish a contravention of s.52 is not associated with any contractual relationship between the parties and is one analogous to an action in tort for passing off, defamation or injurious falsehood, the measure of damages in actions in tort is appropriate. Counsel for the respondents did not argue to the contrary but was concerned to emphasise that the applicant, if otherwise successful, would be entitled to damages only where it could be shown that persons had been led into error as a result of misleading or deceptive conduct. He said:
all the evidence which is available, to put
the applicant in the position it would have
been in had the contravention of section 52
not been committed". (transcript 3311)
"The applicant would only be entitled to294. That is a matter to which I shall refer again later in these reasons.
damages which were causally connected with
any particular error and there is no
evidentiary basis, we submit, for forming the
conclusion that any damage or proved damage
has been shown to have resulted from any
misrepresentation on the part of the
newspaper or any error caused by any
misrepresentation on the part of the
newspaper.
Indeed, the approach that the applicant has
taken towards the matter of proof of damage
is to seek, with a greater or lesser degree
of cogency, to persuade your Honour that some
financial loss was suffered as a result of
the publication of the totality of the
newspaper articles in question in these
proceedings. That, we submit, is beside the
point unless per chance your Honour were to
find that the newspaper articles the subject
of these proceedings were so riddled with
misrepresentations by the newspapers that it
is substantially correct to say that there is
nothing harmful, nothing damaging to the
reputation of the applicant contained in
these newspaper articles that does not
involve some form of misrepresentation".
(transcript 2988)
295. In the case of defamation, damages are very much at large. The Court is entitled to take into account the conduct of the applicant, the damage to its commercial reputation, the nature of the libel, the mode and extent of publication, the absence or refusal of any retraction or apology and the conduct of the respondents from the time the articles were published. The Court should not take into account any part of the words complained of in respect of which the respondents have made out a defence. These matters are discussed generally in Gatley para. 1451.
296. The applicant acknowledged some limitations on the amount of damages for
defamation since the applicant is a company with no
feelings to be injured,
though with a commercial reputation to be damaged. Mr. Malcolm submitted that
it would be "at least doubtful"
whether it would be proper, under s.82 of the
Trade Practices Act, to go beyond compensating the applicant for loss of
goodwill through loss of future income or loss of profit. He also acknowledged
that "there would be no warrant for anticipating anything beyond the period of
the charter" (transcript 3293) though I suppose that
if the venture had been
successful the applicant may have continued in some form of business.
Damages - evidence
297. Much of the evidence adduced by A.O.L. in support of its claim for damages related to the cancellation of passages on subsequent cruises and the adverse reaction produced by the newspaper articles in the minds of the public and of travel agents and others concerned with promoting cruises on the Dalmacija. There was evidence, which I accept, from Margereth Johanna Boudewyns, Gerald Raymond Darragh, Gertrude Elaine Adams and Lola Lale Scott that they cancelled bookings on the Dalmacija after reading the Daily News article of 8 January 1982. Except in the case of Miss Boudewyns, each cancelled booking involved two persons. There was also tendered by consent an affidavit of Patricia June Mason that, as a result of reading the Daily News article, she cancelled a booking on the Dalmacija. Her fare of $2,000 was refunded. A letter tendered in evidence from Mr. and Mrs. J. Hayes confirmed cancellation of a booking on the Dalmacija "owing to adverse publicity in the Western Australian newspapers" (exhibit 77). Their deposit of $300 was refunded. There was evidence that Mr. and Mrs. Benn cancelled a booking (the fare for which was $6960) and that they did so through a letter from their bank dated 25 January 1982. But there was no evidence that they cancelled as a result of reading any of the newspaper articles. Exhibit 76 contains particulars of other cancellations, taken from records. But there was no direct evidence to link those cancellations with the newspaper articles and, as a number took place some weeks after the articles appeared, it would be dangerous to infer a connection.
298. The evidence established to my satisfaction that as a result of the article in the Daily News of 8 January A.O.L. lost through cancellations at least $25,000 and more likely an amount of $35,000 or thereabouts.
299. There was a body of evidence from which it is reasonable to conclude that, as a result of the newspaper articles, and in particular the Daily News article of 8 January, a substantial number of persons who might have booked passages on the Dalmacija decided not to do so.
300. In large part this evidence came from persons associated with A.O.L. Alex Bajada, Jennifer Chisholm (who was at the time employed by Matway Travel and Perth Shipping Centre in charge of bookings), Cheryl Leanne Cockman (who was at the time employed by Perth Shipping Centre as a reservations consultant), Patrice Dorothy Fitzgerald (who was at the time employed by A.O.L. as secretary to Mr. Zar) and Peter Malcolm Rosevear Smith (who was at the time the company secretary to Matway Travel) gave evidence from which a reasonably clear picture emerged. The picture was that in the days preceding the publication of the newspaper articles there was a very considerable show of interest on the part of the public regarding cruises on the Dalmacija. On Saturday 9 January 1982 (the day after publication of the first of the Daily News articles) and on the following Monday there were many calls to the office of A.O.L. and its associated offices from persons expressing concern about travelling on the Dalmacija because of what they had read in the newspapers. This evidence of expressed concern was admitted, not to establish actual cancellations, but as evidence of the general impact made by the articles. The evidence also established that after a spate of telephone calls on the Saturday and Monday there was a dramatic fall-off in the number of persons enquiring about cruises on the Dalmacija.
301. I am satisfied from the evidence to which I have referred that as a
result of publication, particularly of the Daily News article
of 8 January
1982, the reputation of A.O.L. as a cruise operator was severely damaged and
that its prospects of running further cruises
successfully was substantially
diminished. Although the applicant complains of four newspaper reports as well
as the billboards,
I have found misleading or deceptive conduct only in the
two Daily News articles and defamation in all but the second article in
The
West Australian. But I am satisfied that it was the Daily News article of 8
January that made the most impact on the public.
This, I think, is clear from
the immediate reaction of members of the public and it is also a matter of
common sense that an article
occupying the front page of a newspaper, carrying
a telling headline and accompanied by a dramatic billboard, was of all the
articles
the one most likely to attract attention. I am also satisfied that
all the matters complained of in that article by A.O.L., at any
rate
substantially all, constituted misleading or deceptive conduct and were
defamatory of A.O.L. As the first respondent was the
publisher of all the
newspaper reports and associated material, it is unnecessary and indeed
impossible to allocate a particular
proportion of damage to particular
publications. As I have said, it was the article in the Daily News of 8
January 1982 that caused
most damage to the applicant.
A.O.L. - structure of the organisation
302. Before proceeding any further with an assessment of the effect of the newspaper articles on the applicant's business, it is necessary to say something about the organisational structure of which A.O.L. was a part. The matter is important because of a submission made on behalf of the respondents that A.O.L. itself could have suffered no financial loss.
303. Apart from relevant information provided by the directors of A.O.L., there was evidence from John Ernest Schenberg and Peter Christiaan Huigens. Both men had acted as accountants for the Bajada family. There was also tendered a chart showing the relationship between the applicant and certain other companies and unit trusts established to regulate the affairs of the Bajada, Zar and Smith families. It is unnecessary to trace this relationship in any great detail. In essence, at the time of publication of the newspaper articles A.O.L. was trustee for the A.O.L. Unit Trust. It was A.O.L. that carried on the business of cruise operator and it was A.O.L. to which a reputation attached in regard to the cruises of the Dalmacija. It will be remembered that Australian Ocean Line Pty. Ltd. was originally Tarnflame Pty. Ltd. When the A.O.L. Unit Trust was established, the unit holders were various companies controlled by the Bajada, Zar and Smith families, which companies in turn were trustees of various unit trusts.
304. On 5 January 1982 Bassau Pty. Ltd., another shelf company, became the holder of all units in the A.O.L. unit trust and it held those units as trustee for the Bassau unit trust. The Bassau unit trust in turn held its units, being the beneficial interest in the units in the A.O.L. unit trust, for a number of companies which themselves were trustees for other unit trusts, the beneficial interests in which were held by a series of family companies. In practical terms Bassau Pty. Ltd. and the Bassau unit trust were interposed between Australian Ocean Line Pty. Ltd. as trustee for the A.O.L. unit trust on the one hand and a series of family companies and unit trusts on the other.
305. On 10 April 1982 Narong Pty. Ltd. replaced Australian Ocean Line Pty. Ltd. as trustee for the A.O.L. unit trust. At the same time Australian Ocean Line Pty. Ltd. was appointed trustee for the Dalmacija unit trust and it was A.O.L. that continued to carry on the business of chartering the Dalmacija, doing so as trustee for the Dalmacija unit trust. The business of the A.O.L. unit trust effectively ceased on 10 April 1982. The business that had to that date been carried on by A.O.L. as trustee for the A.O.L. unit trust was sold by Narong Pty. Ltd., as trustee for the A.O.L. unit trust, to A.O.L. as trustee for the Dalmacija unit trust. This transaction took place because it was thought that a sale of a business which then had accumulated losses would give income tax benefits to the purchaser. Whether it achieved that purpose is not a matter of concern in these proceedings.
306. Mr. Huigens said that the holder of the units in the Dalmacija unit trust was Merrion Pty. Ltd. as trustee for the M. & A. Family Trust. He said that the unit holders of the Dalmacija unit trust and the A.O.L. unit trust were different but he was not asked to particularise the situation concerning the former. However he was asked by Mr. Gleeson who, in the event of a verdict for the applicant, would receive the damages. His answer was that, in his understanding, any award of damages would go to the A.O.L. unit trust of which Narong Pty. Ltd. was the trustee.
307. The applicant's submission was put this way by Mr. Malcolm:
"Where a business is conducted by a trustee in308. At the time of publication of the newspaper articles it was the applicant that carried on the business of the chartering of the Dalmacija and the offering of passages on board the ship. It is true that it carried on that business as trustee for the A.O.L. unit trust but it was A.O.L. that had the reputation to be damaged and it was A.O.L. whose business undertaking stood to be affected by any misleading or deceptive conduct by the respondents or by any defamatory statement published concerning the Dalmacija and the Far East Christmas cruise. While A.O.L. ceased to be the trustee of the unit trust on 10 April 1982, it still carried on the business of chartering the Dalmacija and organising cruises. All the assets of the business of cruise operator were transferred to A.O.L. as trustee for the Dalmacija unit trust. Whatever the position between A.O.L. and those for whom it was trustee, whether through the A.O.L. unit trust or the Dalmacija unit trust, A.O.L. was the appropriate entity to bring these proceedings. Any assessment of damages should be on the basis that it was A.O.L. whose reputation stood to be damaged and whose business stood to be affected by publication of the newspaper articles.
its own name and the trustee acquires a
reputation which is attached to its name in
the same way as goodwill is attached to its
name as a result of conducting the business,
damage representing a loss of revenue or a
loss of income or damage to the business
reputation which attaches to the name is
equivalent to a loss of goodwill. However
one might put it, the position is that the
trustee is the party legally entitled to the
benefit of whatever chose in action it might
have for damages, whether it be for breach of
contract or whether it be damages for
negligence or damages for deceit or
defamation". (transcript 3209)
Damages - A.O.L's profitability and expectations
309. In November 1980 Mr. Zar prepared a feasibility study in which he analysed the cruises then proposed for the Dalmacija, the amounts likely to be received in fares and the likely cost to A.O.L. He formed the opinion that the charter of the Dalmacija was a viable proposition. Reference has already been made to steps taken by A.O.L. to promote the cruises of the Dalmacija. However, when the ship arrived in Fremantle in December 1981 Mr. Zar was concerned that bookings were not as good as had been anticipated. He thought the bookings were "pretty slow" (transcript 1779) and that this was because travel agents had been reluctant to promote the cruises until they had seen the Dalmacija and assessed what it had to offer to passengers.
310. The balance sheet and accounts for the A.O.L. unit trust as at 31
December 1981 (exhibit 56) show that by that date expenditure
had exceeded
income by $1,260,787. Mr. Zar said of the position in December 1981:
"We knew we were losing quite a lot of money311. The charter of the Dalmacija was for a period of one year with two successive options, each of one year; the directors of A.O.L. regarded a term of three years as essential to build up a profitable business.
because of the result of the first trip
southbound and also the statistics showing
what was going to happen in the next few, but
we felt that once the ship hit here, we were
confident that the people and the agents
seeing the ship we would have a better
result, not so much on the first and second
of South East-Asia but at least we would get
some on the round Australia trip and also the
northbound which would not make us completely
out of the red but at least be possible for
us to carry on for the next year".
(transcript 1781)
312. Mr. Zar's expectation was that the northbound voyage of the Dalmacija, that is its return voyage to Venice, would be particularly profitable because it was the only ship sailing from Australia to Europe on that particular route in 1982. He thought the two Far East cruises should be "good ones" (transcript 1780) because they were timed around Christmas. He also thought that the round Australia cruise would be profitable but not the weekend cruises which seem to have been designed largely to give the public a chance to become acquainted with the Dalmacija.
313. In August 1981 Mr. Zar prepared a revised feasibility study showing an anticipated gross profit ranging from $107,962 to $1,485,614 based on a number of passengers from 200 to 300. Mr Zar explained how the feasibility studies were prepared having regard to the number of cabins available, the fare structure, the likely sales of fares (against which had to be set off the cost of charter), the cost of meals and commission to agents. I do not find it necessary to set out this analysis in any detail. Clearly there were a number of variables but I am satisfied that over a period of 3 years the venture was likely to return some profit to A.O.L.
314. Alex Bajada said that he always understood the break even point for the venture to be around 220 passengers. As at September 1981, he said, "We were not getting sufficient bookings at that stage to reach our break even point" (transcript 359). It was then that A.O.L. engaged McAuliffe and Goff with a view to having a more extensive advertising campaign. Mr. Bajada agreed that in his experience persons travelling on cruises ordinarily made bookings some time ahead. In particular he agreed that he would have expected, in regard to a cruise due to depart on 11 January 1982, that substantially all bookings would have been made by the middle of December 1981. Like Mr. Zar, Mr. Bajada regarded the weekend cruises as being promotional rather than profit making. In his view, the cruises of most importance to the financial outcome of the venture were the two Far East cruises, then the southbound and northbound voyages and then the round Australia cruises. Mr. Bajada agreed with Mr. Gleeson that as at the end of December 1981 the picture was of a venture likely to show a gross loss of about $525,000 up to and including Far East cruise number two.
315. Like Mr. Zar, Mr. Alex Bajada expected that, once the Dalmacija arrived in Western Australia and was seen by agents and prospective passengers, there would be a "boost" (transcript 476) from Western Australia in relation to round Australia cruises and the northbound cruise to Europe and that thereafter the Dalmacija would be available to be seen by agents and prospective passengers in the Eastern States. Mr. Bajada thought that there might be a loss of $300,000 in the first year, believing that A.O.L. could sell sufficient passages for the voyages after the Far East Christmas cruise to make good the very substantial loss the company faced in December 1981.
316. There is no doubt that at the end of 1981 bookings for the cruises on the Dalmacija were below the hopes and expectations of the directors of A.O.L. Equally there is no doubt that the company was then facing a heavy operating loss and that, no matter how well the subsequent planned cruises did, there would still be an operating loss for the first year of the charter. But it would not be right to judge the venture only by reference to the first year. I accept the evidence of the directors of A.O.L. that they saw the venture as a three year one, expecting to make losses in the early period but anticipating a reasonable profit as the Dalmacija became well known. It must be remembered that A.O.L. was offering a service for which there was virtually no competition. In this regard it is useful to look at some of the evidence given by those engaged in the travel industry. In any event compensation for lost income is appropriate even in the case of a company that is losing money. Such a company has various costs, fixed and otherwise, against which the income may be set.
317. Taken in its entirety, the evidence of the travel agents who were called presented a cohesive picture of the tourist market at the time the Dalmacija's cruises began and their evidence enabled conclusions to be drawn with some confidence as to the likely impact of the newspaper articles on A.O.L's undertaking.
318. Michael Frank Berry was the managing director of Karrinyup Travel and had earlier been the general manager of Associated Travel Pty. Ltd. He was, in 1981 and 1982, chairman of the West Australian chapter of the Australian Federation of Travel Agents. Mr. Berry had considerable experience in the travel industry including ship cruises.
319. Mr. Berry went on board the Dalmacija in Fremantle and later sailed on a weekend cruise. He thought the concept of a ship such as the Dalmacija carrying out the cruises described in the A.O.L. brochures as "good, innovative". Based on his experience with the Centaur, a ship operating between Fremantle and Singapore, and his general experience of the travel industry, his view was that a realistic expectation of the number of passengers the Dalmacija might be expected to carry on average was between 200 and 300 people. That was an assessment he made early in 1981; his present view was that these figures were realistic for the Asian cruises but he had some doubts about those numbers for the round Australia cruises.
320. Barry Stanley Graham was the managing director of Port Travel and in 1981 was the general manager of West Australian Newspapers Travel Service. The latter organisation has two divisions - West Travel Service, a retail division, and West World Holidays, a wholesale division. In 1981 Mr. Graham spoke with Mr. Zar about the Dalmacija and as a result he became interested in the possibilities of the Dalmacija as a cruise ship out of Fremantle and in the possibility of West Australian Newspapers Travel Service "putting some tour packages together around the ship" (transcript 2164). In June or July 1981 Mr. Graham sailed on the Dalmacija off the Norwegian coast and was impressed with the facilities on the ship and the way in which the ship was run. Most of the officers spoke good English and at least half the crew spoke English.
321. Having read the newspaper articles the subject of these proceedings, Mr. Graham concluded that A.O.L. would have difficulty in marketing cruises to Asia or around Australia. He thought this presented a commercial opportunity to West Travel Service and as a result that organisation entered into an arrangement with A.O.L. for what was virtually a sub-charter of the Dalmacija for several cruises in February and March 1982. These cruises were along the coast of Western Australia. There were five cruises, to which 800 to 900 people were attracted.
322. Judith Anne O'Neil was the state retail manager in Western Australia for Traveland and had previously been the manager of Wesfarmers Travel in Perth. As manager of Wesfarmers Travel, Miss O'Neil assessed that her organisation would make "approximately 50 bookings over the cruise season" (transcript 2119). She thought that the cruises proposed by A.O.L. for the Dalmacija filled a need. During 1981 Westfarmers Travel received a number of inquiries about the Dalmacija and sent out brochures to interested persons and also to its country outlets which had been receiving inquiries. (transcript 2122)
323. Miss O'Neil became aware of the Daily News article of 8 January 1982 on the day on which it was published; she said that "we all had a huge discussion about it" (transcript 2122). After 8 January the level of inquiries concerning bookings for the Dalmacija for the balance of the 1981/1982 season "dropped off considerably, almost to the point of nil". (transcript 2123)
324. Following publication of the Daily News article, Miss O'Neil gave directions to Wesfarmers Travel's consultants that "if they were not ... happy about putting their clients on board the Dalmacija that they did not have to push the issue with their client". She added "I also took the step that I withdrew some of the promotion that I had been doing" (transcript 2126). Wesfarmers had some passengers under option for cruises on the Dalmacija. None took up the option and Wesfarmers sold no tickets for any cruise.
325. Judith Lorraine Patterson was staff development manager of Security Travel Service and had been with that organisation for some 9 years. In 1981 she was approached by Mr. Zar regarding the promotion of the Dalmacija. Security Travel Service was the second largest retail travel agent in Western Australia though shipping cruises were not a substantial part of its business. Mrs. Patterson thought that there would be a demand for cruise ships from Fremantle.
326. Mrs. Patterson saw the article in the Daily News of 8 January 1982 and immediately thereafter gave instructions to members of the staff "to remove the brochures from the brochure rack and to recall any files where passengers had made deposited bookings" (transcript 2156). She gave instructions to the staff to recall files relating to bookings on the Dalmacija for her "to vet" and she instructed staff to be "wary" of "selling" the Dalmacija because of the publicity that had been given in the newspapers. (transcript 2159)
327. Brian Alfred Pateman was the principal of Walkabout Travel and in 1981 was director of operations in Western Australia for Jet Set Tours which he described as "the largest retail travel agency in Western Australia, with something like 25, 28 retail locations throughout Western Australia" (transcript 2538). Mr. Pateman had been engaged in the travel industry for 20 years including the promotion of shipping cruises.
328. In 1981 Mr. Pateman was approached by Mr. Zar who offered Jet Set Tours what Mr. Pateman described as a "special facility" (transcript 2539). In effect this was a special commission which would enable Jet Set Tours to spend money on promoting the Dalmacija. Mr. Pateman thought that the ship was "quite adequate" for the Western Australian market (transcript 2539) and that it would cater for a general tourist class type of operation. In his words "It certainly is not the QE2 but most acceptable to those people looking for a one-class tourist-class vessel" (transcript 2540). Mr. Pateman said that after 8 January 1982 the level of inquiry for cruises on the Dalmacija fell away and Jet Set Tours ceased promotional activities in regard to the ship.
329. Allan William Stirling was the manager of Holiday (WA) Centre which he described as "one of a network of sales centres for the Western Australian Tourism Commission" (transcript 2459). The Western Australian Tourism Commission is an administrative body with a selling outlet in each of the five mainland capital cities. In 1981 the Commission was known as the Department of Tourism and its selling outlet in this State was the Western Australian Government Travel Centre. The Centre had a group tours section which was responsible for establishing package tours into Western Australia from the Eastern States. Mr. Stirling said that the Department of Tourism "viewed the introduction of a ship to the west coast, based here, as a prime marketing advantage because it could be packaged in conjunction with rail or air packages from the eastern states into Western Australia" (transcript 2460). He said that there had been a shortage of ships visiting Fremantle and the Department had been trying to encourage ships to come to the west coast with a view to organising rail and air packages in combination with sea cruises to attract visitors to Western Australia. Mr. Stirling spoke of the popularity of earlier ship tours to Western Australia and around the northern part of Australiaincluding the operations of the State Shipping Service.
330. The function of the Department of Tourism was to attract tourists to Western Australia, hence its interest was in the round Australia voyages of the Dalmacija. An arrangement was made between the Department and A.O.L. for the allocation of 128 berths for the two round Australia voyages of the Dalmacija. The Department's approach was to have two packages whereby passengers travelled around the northern half of Australia by ship or around the southern half by ship, in each case linking up with some other form of transport. In effect this gave the department 512 berths of which it sold 266. The departmental sales were entirely through persons from the eastern States since its object was to bring people to Western Australia.
331. Mr. Stirling did not notice any difference in sales before and after the arrival of the Dalmacija in Fremantle but, as he explained, this was because the department's market was in the eastern States. However there was a substantial increase in bookings for the second cruise over the first, which Mr. Stirling attributed to greater awareness of the Dalmacija and to the effect of advertising. According to his evidence, which I accept, the arrangements made between the department and A.O.L. were "part of a long term arrangement" (transcript 2470) and that is why the Department spent so much on advertising. "It was not seen just as a one-off package. It was going to be on-going for many years. That was the expectation". (transcript 2470)
332. Much of the evidence given by the witnesses to whom I have referred was
criticised by counsel for the respondents as vague and
lacking particularity.
There is some force in this criticism but, to the extent that witnesses were
asked to make an assessment of
the demand for cruises of the sort offered by
the Dalmacija, one could not expect great particularity. The combined range
and years
of experience of the travel operators who gave evidence was
impressive and I am satisfied that there was a real demand for cruises
such as
the Dalmacija was offering, that there was considerable interest shown in the
cruises especially after the Dalmacija arrived
in Fremantle and that following
the newspaper articles, in particular the Daily News article of 8 January
1982, the interest shown
in those cruises fell away dramatically.
Damages - the Sullivan report
333. In support of its claim for damages A.O.L. called David Anthony
Sullivan, a chartered accountant with the firm of Arthur Young
and Company.
Against the objection of the respondents' counsel I allowed Mr. Sullivan to
produce and speak to a report prepared by
him and entitled "Report on the
Estimated Financial Effects Subsequent to Publication Date of the Newspaper
Articles in January 1982"
(Exhibit 82). The relevance of the document to the
applicant's claim may be found in the conclusion reached by Mr. Sullivan on
p.10
of the report which reads:
"Based on the assumptions we have made the334. Mr. Sullivan's relevant qualifications, the methods used, the assumptions and the conclusions reached by him were all the subject of a strong attack by counsel for the respondents. It will be necessary to look in some detail at Mr. Sullivan's report and evidence but at the outset it is important to appreciate what he was seeking to do and what he was not seeking to do. What Mr. Sullivan did was to look at the position of A.O.L. before 8 January 1982, in particular the financial arrangement to which it had committed itself under the charterparty, its income and expenditure to date, the bookings made on cruises and certain projections made concerning the venture. He then looked at the situation of the venture after 8 January 1982, with particular regard to what he saw as a falling off in bookings. In effect the figure of $450,000, mentioned above, represented a reduction in operating loss, had the position of A.O.L. prior to 8 January 1982 continued thereafter.
operating loss incurred of $1,594,345 as per
the unaudited financial statements would have
been reduced by, an amount in the order of
$450,000 which reduction represents the
estimated financial effects subsequent to the
publication date of the newspaper articles".
335. Naturally A.O.L. contended that its failure to reduce its operating loss was due to publication of the newspaper articles and their effect on intending and prospective passengers. But no such proposition was asserted by Mr. Sullivan who sought to examine the situation of A.O.L. and the unit trusts before and after 8 January 1982. It was of course quite open to the respondents to challenge Mr. Sullivan's assumptions and the methods he employed. Equally it was open to them to argue that A.O.L. had failed to show that there would have been a reduction in the operating loss had the newspaper articles not appeared. But much of the cross-examination of Mr. Sullivan and of the submissions made by the respondents concerning his evidence proceeded on a false basis viz. that Mr. Sullivan was seeking to demonstrate the financial consequences of publication of the newspaper articles. This he did not seek to do.
336. Mr. Sullivan explained what he set out to do in his report in this way:
"I set out to look at what had occurred from a337. He had available to him Mr. Zar's initial and revised projections of gross profit and loss, the unaudited financial statements for the years ended 30 June 1981 and 1982 for the A.O.L. unit trust and the Dalmacija unit trust, a summary of bookings on long cruises taken from booking sheets and supporting information such as the charterparty. Because A.O.L's records did not disclose gross profit and loss by cruise, Mr. Sullivan prepared such an analysis based on the material referred to on p.3 of his report.
financial point of view up to the date of the
newspaper articles and what had occurred, in
fact, after the date of the newspaper
articles, and then look at the variations
that had occurred and to determine, if you
like, a method of analysis for extrapolating
what had occurred up to the date of the
newspaper articles based on certain
assumptions into what might have occurred
after the date of the newspaper articles".
(transcript 2604)
338. Although he had access to the initial and revised projections of gross
profit and loss prepared by Mr. Zar, Mr. Sullivan said
he did not directly use
the information in either document in reaching his conclusions. He used those
analyses only to satisfy himself
as to the completeness of the other
information to which he had access. In particular he did not rely upon the
passenger occupancy
level of 200 in the initial projection. The figures in the
revised projection suggested that the gross profit break even passenger
level
for the cruises was about 190 passengers. Mr. Sullivan commented in his
report that appendix F (his breakdown of profit and
loss in regard to
individual cruises):
"shows that variable expense factors are under339. Mr. Sullivan then looked at the actual results of A.O.L. which disclosed a loss of $1,594,345. To this figure he made some adjustments to reflect commission and the actual amount payable under the charter agreement. The conclusion at p.6 of his report was:
15% for each of commission expense and
variable components of total charter expense.
Therefore once the passenger level exceeded
about 190 the projected gross profit per
cruise increased significantly. For example
a $3,000 passenger ticket sold would
contribute over $2,000 to both gross profit
and net operating profit". (p.5)
"The actual results when compared to the initial3,393,504 (1,140,547)
projection for 200 passengers show that the major
variation was a reduction in income resulting
from lower passenger numbers.
Charter/Commission Gross Profit
Revenue Expense (Loss)
Initial Projection 3,582,129 3,417,184 164,945 Actual 2,252,957
Variation (1,329,172) 23,680 (1,305,492)340. Mr. Sullivan's report continued with a section described as "Further consideration of the financial effect of and reasons for the shortfall in passenger occupancy levels". In that section he set out to look at the booking sheets for the Dalmacija (derived from exhibit 52), selecting the period closest to the publication date of the newspaper articles. He examined the booking level for a period of approximately 3 months prior to departure of the principal voyages. Mr. Sullivan said:
========= ========= ========= "
"The reason for the selection of the three341. His object was to look at the percentage increases occurring in voyages 1, 3 and 5 (departure dates 12 November 1981, 14 December 1981 and 11 January 1982 respectively) compared with increases in voyages 7, 8 and 9 (departure dates 8 February, 5 March and 30 March 1982 respectively) and in addition to look at the general level of bookings within the last three months before departure of the principal cruises.
months was that the period ideally should be
as long as possible but it if was going to be
meaningful from the point of view of
comparing what had happened prior to the date
of publication of the articles and after the
publication of the articles, there was a
limit to how long that period could be and
how useful the analysis would be. Three
months was selected as being the most
appropriate of the relevant alternative
options that were available". (transcript
2630-2631)
342. In his report Mr. Sullivan said that the number of cancellations could
not be accurately determined from the booking sheets
but he classified a net
decline in bookings between two booking sheet dates as cancellations. In his
view:
"To the extent that new bookings occurred this343. The latter proposition did not represent a factor in his analysis.
cancellation figure is understated. The
understatement is likely to be greater for
the months subsequent to 15.1.82 when booking
sheets were not prepared weekly.
There was a significant decline in the net
movement in bookings for the month ending
15.1.82 compared to both the preceding and
subsequent months". (p.6)
344. Mr. Sullivan's review of booking trends for cruises 1, 3 and 5 indicated that a relatively high level of bookings occurred in the three months prior to departure, the peak of bookings being in the month of departure or the month prior thereto (report p.6). The passenger increases were - cruise 1 (242%), cruise 3 (327%), cruise 5 (232%). However the percentage increases for the later cruises were - cruise 8 (190%), cruise 9 (131%), cruise 10 (106%).
345. Mr. Sullivan dealt with cruises 8 and 9 (the round Australia cruises)
together because some bookings took in each cruise. It
will be remembered
that each cruise involved a combination of sea travel and some other form of
travel. The number of bookings for
the period of three months prior to
departure totalled 199 compared to final numbers of 304. In Mr. Sullivan's
words:
"While the figure of 314 (this was corrected346. He continued:
to 304 in evidence) understates total
bookings because the booking sheets ceased
just over 2 weeks prior to the departure of
cruise 9 it also reflects bookings at 15.1.82
for cruise 9 which was 1 week after the
newspaper articles". (p.7)
"If we apply to bookings of 199 a factor of347. Mr. Sullivan said that he believed the assumptions used were reasonable "given that cruises 8 and 9 were, prior to 8.1.82, receiving at least a similar level of support as cruises 3 and 5 in the market place". (p.7)
232% (the lowest percentage increase for
major preceding cruises as set out in section
5.2) the final passenger numbers would have
been 462, an additional 158 passengers.
However this figure of 158 is overstated by
possibly in the order of 25% because the
booking sheets include free of charge tickets
and possibly exclude late cancellations.
Therefore an estimated and additional 118
passenger bookings (i.e. 75% of 158
additional passengers) would have been
achieved based on the assumptions made all
other things being equal.
If we cost the 118 full passengers at an
average figure of $2,600 (net of commission)
this represents a loss of revenue of $307,000
and after deducting $40,000 for variable food
and port costs this represents a loss of
revenue in the order of $267,000 which would
have turned a gross loss of over $70,000 to a
gross profit in the order of $190,000". (p.7)
348. In evidence Mr. Sullivan said that he made a comparison between the
number of bookings on a date three months prior to the respective
departure
dates of cruises 8 and 9 with the number of bookings on dates 3 months prior
to the respective departure dates of cruises
3 and 5 because he "wished to see
that the figures did not indicate there was, if you like, a significant
different level of support
for cruises 8 and 9 to cruises 3 and 5" (transcript
2652). He added:
"The purpose of the comparison was really, if349. As to cruise 10, this cruise did not depart until more than 3 months after the newspaper articles appeared. Mr. Sullivan's approach to this cruise was as follows. The level of bookings to the month ended 15.1.82 was similar to that for cruise 8; there was no build up of bookings in the 3 months prior to departure as there was for other cruises. He continued:
you like, a cross-check from my own point of
view in regard to the basis of analysis that
I was applying; the basis of it is that I am
applying percentage increases in voyages 3
and 5 to 8 and 9 and I wish to feel that at
least in broad terms 8 and 9 appeared to be
receiving, in the market-place, a similar
level of support". (transcript 2653)
"Certainly the level of bookings at 15.1.82350. Dealing with cruise 7, Mr. Sullivan said he understood that originally this was to be a third Far East cruise but that, in late June 1981, it was altered to the first round Australia cruise. He added:
exceeded that for cruises 3 and 5 at an
equivalent time prior to departures. If we
use 62 as the number of passengers 3 months
prior to departure (the number on the booking
sheet at 29.1.82) and apply an increase of
232% (refer section 5.3) it indicates that
potentially there could based on the
assumptions made have been 144 final
passengers. We do not consider that a
reduction in the order of 25% (refer section
5.3) should be applied because the bookings
in mid-january should not have been effected
(sic) by such factors as free of charge
bookings and a good occupancy level for
cruises 8 and 9 would reasonably have
increased the interest of potential
passengers. We have compared the total of
144 potential passengers with the final
estimated number of full paying passengers as
per appendix F of 79 escalated by 15% to give
91 (note that the booking sheets ceased to be
prepared from 12.3.82)
If we cost an additional 53 passengers (144
potential less 91 estimated final booking
sheet passengers) at an average fare of
$2,600 (net of commission) this represents
additional gross revenue of $138,000 which
after allowing $19,000 for variable food and
port costs represents net loss of revenue in
the order of $119,000". (p.8)
"Bookings had been slow for this351. The basis of Mr. Sullivan's opinion regarding the level of passenger numbers was exhibit G, the summary of bookings on long cruises taken from the booking sheets. This round Australia cruise was in fact replaced by five coastal cruises and two short cruises to nowhere. These were the cruises organised by West Travel Service.
cruise largely because the Western Australian
Government Tourist Bureau was not prepared to
promote it with only a short lead time. We
consider passenger numbers would not have
reached the levels obtained for the other
Round Australia cruises". (p.8)
352. In Mr. Sullivan's view, cruise 7 was "clearly in difficulty prior to
8.1.82 as it only had 33 total bookings some 6 to 7 weeks
prior to departure".
He said:
"From a review of bookings in the month prior353. He agreed that there was nothing in the documentation providing a basis for that opinion which was "purely a statement of my opinion on the general information available" (transcript 2672). He concluded in respect of cruise 7 that while there was no reliable evidence available, an additional net revenue of $50,000 should have been achievable "based on the financial success of the short cruises 2, 4 and 6. However if any further delay had occurred in restructuring this cruise such an improvement would probably not have occurred". (p.9)
to departure of other cruises estimated
additional passenger bookings would not have
generated as much revenue as the new short
cruises did. More passengers and/or a better
return per passenger could reasonably have
been expected for cruise 7". (p.8)
354. I think it is necessary to set out verbatim Mr. Sullivan's summary, on a
cruise basis, of what he described as the "estimated
financial effects
subsequent to the publication date of the newspaper articles". (p.9). There
is in this summary an implication
that the newspaper articles had an adverse
financial effect on certain of the cruises. This is not a matter on which Mr.
Sullivan
was equipped to comment and I disregard the implication for the
purposes of assessing the relevance of his report. It was of course
open to
the applicant to submit, as it did, that the newspaper articles had this
adverse financial effect.
"A SUMMARY BY CRUISE OF THE ESTIMATED FINANCIAL EFFECTS SUBSEQUENT TO THE
PUBLICATION DATE OF THE NEWSPAPER ARTICLES
6.1 Cruises 1, 3, 5The first article followed cruise 3, (Far East 1) and cruise 5 (Far East 2) commenced within a few days of its publication. The newspaper articles could not have had any adverse financial effect on these cruises which incurred the following estimated gross losses per Appendix F.
Cruise 1 208, 501going to be financially successful. Additional net revenue in the order of $50,000 should have been achievable leaving the cruise's gross loss still in excess of $200,000.
Cruise 2 123, 577
Cruise 3 234,603
566,681
=======
6.2 Cruise 7
While this cruise was replaced by a number of shorter cruises it was never
6.3 Cruises 8 & 9$70,000 could based upon the assumptions we have made have been a profit in excess of $190,000.
As set out in section 5.3 of this report a combined gross loss of over
6.4 Cruise 10revenue of $119,000 could have been earned.
Based upon the assumptions made in section 5.4 of this report additional
6.5 Short Cruises 2, 4 6purposes of our calculations.
Only cruise 6 commenced after 8.1.82 and we have ignored this cruise for the
6.6 Adjustment made to total gross loss are set out below.448,000
Total
Cruise Gross Loss
No. (App. F) Adjustments Reference
- Allocation of adjusted projected gross loss
1,3,5 566,681 Section 6.1
7 276,988 50,000 Sections 6.2 and 5.5
8 & 9 70,635 70,635 Sections 6.3 and 5.3
10 231,432 119,000 Sections 6.4 and 5.4
2,4,6 (67,358) Section 6.5
1,078,377 239,635
1,162,000 258,000 Adjusted to total
actual gross loss
(refer Appendix F).
- Adjustment for estimated gross profit
8, 9 - 190,000 Sections 6.3 and 5.3
1,157,000 448,000
Total gross loss 1,140,000 Less adjustments
Less actual other income 81,317is $448,547 more than the adjusted operating loss".
Adjusted operating loss 1,145,798
=========
The actual operating loss incurred was $1,594,345 as per Appendix C which
355. As mentioned earlier, Mr. Sullivan's report and the evidence in support
of it were the subject of considerable cross-examination
by counsel for the
respondents. In addition the respondents called Ian Robert James, senior
lecturer in the Department of Mathematics
at the University of Western
Australia, who produced a report entitled "Analysis of estimated effects of
publication of articles
on passenger numbers", being an analysis of Mr.
Sullivan's report. It may be noted that Dr. James gave his report a title
which
misunderstood the purpose of Mr. Sullivan's report. This
misunderstanding continued in ss. 1 and 2 of Dr. James' report. The main
basis of the criticism made by Dr. James of Mr. Sullivan's report was what he
described as the "main
assumption in the adjustment procedure ... that all
cruises (despite their differing natures) should have similar percentage
increases
in bookings in the three months prior to departure" (exhibit 84
p.3). Dr. James criticised this assumption for a number of reasons
which may
be summed up in the following way:
(1) Mr. Sullivan was inconsistent in the units offare used in his
calculations. Full fare equivalents were used for cruises 8, 9 and
10 while
sectors were included as equivalent to full fares for cruises 1, 3 and 5. In
Dr. James' view "Large increases in sector
bookings in the three months prior
to departure have led to exaggerated percentage increases" (p.8).
(2) Mr. Sullivan included free of charge passengers in his calculations along
with paying passengers except for what Dr. James described
as "a fairly
arbitrary adjustment of 25% to account for free-of-charge passengers and late
cancellations on cruises 8 and 9" (p.8).
He continued:
"Using the Arthur Young estimates of numbers(3) Graphs prepared by Dr. James of the booking trends indicated quite different profiles for the different cruises. He noted:
of paying passengers, and assuming all
free-of-charge passengers were booked in the
three months prior to departures gives for
cruise 5 and estimated final booking of 147%
that at three months prior to departure.
This would suggest little effect of the
newspaper articles on bookings for cruises 8
and 9, but the assumptions made require
validation by more comprehensive booking
data". (p.8)
"In particular, cruise 10 appears to have(4) In Dr. James' opinion, proper predictions of bookings for cruises 8, 9 and 10 required detailed information on paying passenger bookings and patterns in bookings from cruises 1, 3 and 5 which could be extrapolated to the situations for cruises 8, 9 and 10. In his view:
received good early bookings followed by
relatively low increases over the booking
period, and this would suggest that the
percentage increase method of prediction is
of doubtful validity". (p.9)
"Apart from cruise 3 there is some evidence356. In Mr. Malcolm's submission, "Mr. Sullivan's exercise was never put forward as an exercise in statistical probability. It is the kind of exercise than one would expect a qualified chartered accountant and auditor, with a background of experience in the analysis of performance of businesses to undertake, doing the best he could, to compare the performance before 8 January with the performance after 8 January" (transcript 3304). In his further submission, it was for the Court to determine whether in the light of all the other evidence which had been given it would be reasonable to assume that the performance of the later voyages, in terms of booking patterns, would be at least as good as the worst case amongst the previous voyages. He invited the Court to find that such an assumption was a reasonable assumption, doing the best one can with the limited amount of data available to compare performance on a before and after basis. In answer to Mr. Gleeson's submission that in any event A.O.L. was facing a substantial operating loss in January 1982 he submitted: "It is just as possible for a company which is currently operating at a loss to lose income from the continuation of its business, as it is for a company that happens to be operating at a profit to lose income" (transcript 3304). He added that there was evidence of a dramatic decline in inquiries about the Dalmacija and that in such a situation it was, almost by definition, impossible to identify persons who, but for something they had read in the newspaper articles, might have seriously considered making a booking.
that approximately linear trends may be
appropriate, but validation of this rests on
more detailed data". (p.9)
357. I agree that Mr. Sullivan did not set out to offer an exercise in statistical probability nor, as I have said, did he set out to estimate the effect of the newspaper articles on A.O.L's operations. No doubt Mr. Sullivan's approach is open to objection in matters of detail but I am satisfied that it presents in a very general way a picture of a decline in bookings for the cruises on the Dalmacija after 8.1.82. That leaves the question whether any of that decline can be attributed to the newspaper articles themselves. In his final address Mr. Gleeson emphasised the operating loss of $1.6 million facing A.O.L. and the financial difficulties that the venture was in by the end of 1981 including a threat by the owners of the Dalmacija to terminate the charterparty because of a default in payment.
358. In relation to Mr. Sullivan's report he submitted:
"Just taking it voyage by voyage, there can be359. There is force in these submissions and I am not at all persuaded that A.O.L's operating loss of $1,594,345 would have been reduced by an amount in the order of $450,000 as Mr. Sullivan suggested. But I am satisfied that his report, as amplified in oral testimony, evidenced a decline in bookings after 8 January 1982. Equally I am satisfied that in large part this was due to the Daily News article of 8 January. That conclusion is warranted by the evidence led on behalf of A.O.L. to which I have already referred, including the fall in the level of approaches to A.O.L. and travel agents. Furthermore, it is in the nature of things highly likely that an article written in the terms of the Daily News report of 8 January, with the prominence it received in the paper itself and through the billboards, would have caused members of the public to turn their attention away from the cruises of the Dalmacija.
no suggestion that cruises 1, 3 and 5 were
affected in any way by any of the bad
publicity but cruise 5 was an absolute
disaster. Cruise 7 was cancelled for lack of
interest not relating to the bad publicity.
If we look at cruise 8, the bad publicity
occurred during the period ending 15 January
1982 - I am sorry, some of it did - the
number of net new bookings during the period
ending 15 January 1982 was 6; that was the
lowest that it had been. In the next month
immediately following the bad publicity the
net new bookings was 34 ... It is
interesting to note, for example, ... that
there were more cancellations in respect of
the south-bound voyage than there were in
respect of the north-bound voyage. In
relation to the falling off of inquiries, it
is also important to bear in mind the
consideration of common sense ... that you
would expect the level of inquiries to
diminish over the progress of the season as
the number of avilable cruises diminished.
In November 1981 you could book on any of
these cruise. By March 1982 you could only
book, I think, on the voyage back from
Western Australia to Europe. Is it
surprising, therefore, that there would be a
lower level of inquiry in March of 1982 than
there would be in November of 1981?".
(transcript 2996)
360. In terms of the Daily News report of 8 January 1982, I do not think that
any useful distinction may be drawn between those parts
that constituted
misleading or deceptive conduct and those parts that were defamatory.
Substantially all the passages complained
of by A.O.L. in that report answer
both descriptions.
Damages - assessment
361. The evidence established to my satisfaction that, primarily as a consequence of publication of the Daily News article of 8 January 1982, and to some extent of the other Daily News article and The West Australian report of 9 January, A.O.L. suffered substantial financial loss. To a limited extent that loss is capable of reasonably precise calculation in so far as the company lost $25,000-$30,000 by reason of cancellations shown to have been made as a result of the reaction of intending passengers to publication of the Daily News article.
362. It is reasonable to conclude from the evidence of the directors and staff of A.O.L. and from the evidence of travel agents that a substantial number of persons immediately lost interest in one or other of the cruises. From the very nature of things it is impossible to say how many intending or prospective passengers lost interest. But, having regard to the volume of inquiries made to A.O.L. and its associated offices before 8 January 1982 and the interest shown through travel agents, it can hardly have been less than 50. And in many cases the inquirer would have been acting on behalf of a spouse or friend as well as himself or herself. The cost of each booking depended on the cruise and the class of cabin but I accept Mr. Sullivan's assessment of an average fare of $2600 (see Exhibit 82 p.7). Of course we are concerned here, not with cancellations but with loss of interest on the part of those who were at least potential passengers on one of the Dalmacija's cruises. The figures to which I have just referred do no more than offer some guidance to the income lost by A.O.L.
363. Having regard to the evidence of the directors of A.O.L. and of travel agents, it is likely that a program of cruises over 3 years would have proved a viable venture though the evidence did not establish that it would have returned to A.O.L. in its capacity as trustee any substantial profit. However, to project the figures mentioned in the preceding paragraph beyond the 1981-1982 season is to engage in speculation. But I am satisfied that publication of the Daily News article of 8 January 1982 had such immediate financial consequences for the company as to make a decision not to renew the option or options on the charterparty inevitable. That is not to say that the options would have been exercised in any event for there is no doubt that A.O.L. was in serious financial difficulties by January 1982. But had the cruises after the Far East Christmas cruise been booked to or beyond break even point it is likely that at least the first option would have been exercised.
364. In respect of both the claim under s.52 of the Trade Practices Act and the claim for defamation, the applicant confined its claim for damages to financial loss suffered as a result of publication.
365. The task of a Court in making an assessment of future loss is often one
of great difficulty. In carrying out that task the
Court should have regard
to what was said by Lord Diplock in Mallett v. McMonagle (1970) AC 166 at p
176:
"The role of the court in making an assessment366. Where the Court is required to decide on the balance of probabilities, the degree of that probability is not to be reflected in the assessment of damage. If an applicant establishes the probability that damage has been caused by reason of the respondent's conduct, the applicant is entitled to damages resulting therefrom; equally if the applicant fails on a balance of probabilities to establish damage, it is not entitled to damages on some scaled down basis. See Sykes v. Midland Bank Executor Co. (1971) 1 QB 113 at 130; Norwest Refrigeration Services Pty. Ltd. v. Bain Dawes (W.A.) Pty. Ltd. [1984] HCA 59; (1984) 58 ALJR 521 at 529.
of damages which depends upon its view as to
what will be and what would have been is to
be contrasted with its ordinary function in
civil actions of determining what was. In
determining what did happen in the past a
court decides on the balance of
probabilities. Anything that is more
probable than not it treats as certain. But
in assessing damages which depend upon its
view as to what will happen in the future or
would have happened in the future if
something had not happened in the past, the
court must make an estimate as to what are
the chances that a particular thing will or
would have happened and reflect those
chances, whether they are more or less than
even, in the amount of damages which it
awards".
367. But where a Court is called upon to assess damages which, in the words of Lord Diplock, "depend on its view as to what will happen in the future or would have happened in the future if something had not happened in the past", the Court is permitted and indeed required to make an estimate of the chances that the particular thing will happen or would have happened and to reflect those chances in the amount of damages it awards.
368. There is another and quite different principle that operates in the
assessment of damages. It appears in the judgment of Dixon
and McTiernan JJ.
in Fink v. Fink [1946] HCA 54; (1946) 74 CLR 127 at 143 where their Honours said:
"Where there has been an actual loss of some369. Equally if the present applicant can satisfy the Court that it has sustained loss by reason of the respondents' conduct, the difficulties of estimating that loss do not of themselves stand in the way of a substantial award of damages.
sort, the common law does not permit
difficulties of estimating the loss in money
to defeat the only remedy it provided for
breach of contract, an award of damages".
370. It was the respondents' submission that since all newspaper articles contained criticism of the Dalmacija and the cruise it was not possible to judge the effect of such passages as might be held to constitute misleading or deceptive conduct or to be defamatory. The answer to that objection is that the Daily News article of 8 January 1982 was in its substance a contravention of s.52 of the Trade Practices Act and was in its substance defamatory. The evidence left no doubt that this article produced the adverse reaction from the public. Again it was said that some of this reaction might have been produced by the television and radio broadcasts about the Far East Christmas cruise. The content of any radio broadcast did not appear in evidence but there was tendered the script of the Channel 9 report (Exhibit 26). Certainly this contained criticism of the Dalmacija's performance at sea. But there was no evidence of any reaction produced by radio or television and there was direct evidence of the impact of the Daily News article. In any event publication of the same libel by other persons on other occasions is irrelevant in mitigation of general damages: Associated Newspapers Ltd. v. Dingle (1964) AC 371.
371. It was common ground between the parties that, if the applicant
succeeded both in respect of its claim under the Trade Practices Act and its
claim for defamation, there should be one award of damages. The applicant
accepted that, in the particular circumstances
of the present case, the Court
should not distinguish between damages payable pursuant to s.82 of the Trade
Practices Act and damages payable for defamation. In each case it was loss of
income for which the applicant was to be compensated. I am of the
opinion that
A.O.L. is entitled to an award of damages in the sum of $125,000, a sum which
reflects the Court's assessment of the
effect of cancellations, of immediate
loss of interest in the Dalmacija and more long term loss of interest by
reason of publication
of the Daily News article of 8 January 1982.
Liability of second respondent
372. Mr. Harvey was sued as the printer of the Daily News and The West Australian. Since I have held the first respondent liable in damages no practical questions arise in regard to Mr. Harvey's liability. But he has been joined and it is necessary to say something about his position.
373. So far as the claim in defamation is concerned, his position is similar to that of the first respondent. As the printer of defamatory matter, he is liable in damages to the applicant.
374. As to the claim under the Trade Practices Act, the statement of claim alleges that in printing the articles and associated matter Mr. Harvey engaged in conduct in breach of s.52. Alternatively, it is said, he was a party to or was knowingly concerned in the contravention of the Act by West Australian Newspapers Limited.
375. There was no evidence relating to Mr. Harvey's position or duties. Paragraph 39 of the statement of claim asserts him to be the printer of each newspaper and para. 17 pleads that he was the printer of the billboards. Those allegations are admitted. Paragraph 35(a) of the statement of claim pleads that Mr. Harvey printed the articles, photographs, captions, billboards and newspapers "in the knowledge that the said newspapers were intended for publication to the public generally represented by purchasers and readers of the said newspapers". That allegation is admitted but a subsequent allegation that Mr. Harvey was "knowingly concerned in or a party to" the contravention of sub-s.52(1) by the first respondent is denied. Since Mr. Harvey is not a corporation, his liability depends upon the operation of s.75B of the Trade Practices Act. The applicant did not rely upon s.6 of that Act.
376. In so far as the applicant relies upon s.75B of the Act to hold Mr. Harvey liable, reference may be made to Yorke v. Lucas (1983) 49 ALR 672. See also Sent v. Jet Corporation of Australia Pty. Ltd. [1984] FCA 178; (1984) 54 ALR 237. It was held in Yorke v. Lucas that to show that a person has "aided or abetted" a contravention (para. 75B(a)) or has been "party" to a contravention (para. 75B(c)) it is necessary to establish, in the first case, that the person had actual or constructive knowledge of all the essential facts constituting the contravention and, in the second case, that he participated in or assented to the contravention with actual or constructive knowledge of all the essential elements of the contravention. It is not necessary to prove either the intention of the person alleged to have been involved in the contravention or that the person knew that those facts constituted an offence.
377. In Mr. Gleeson's submission, for Mr. Harvey to be knowingly concerned in a contravention of s.52 it would be necessary to prove that he was printing material which he knew to be misleading. In my view this submission goes beyond what is required by s.75B, read in the light of Yorke v. Lucas. Given the respondents' admission that Mr. Harvey printed the relevant material and did so in the knowledge that it was intended for publication, I am of opinion that he was both a party to and was knowingly concerned in the contravention of the first respondent for he had actual or constructive knowledge of the contents of each publication and it was the contents that gave rise to the contravention.
378. There will be judgment against both respondents in the sum of $125,000.
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