Re John Fairfax & Sons Limited v David Iser Smith [1988] FCA 2 (18 January 1988)

FEDERAL COURT OF AUSTRALIA

Re: JOHN FAIRFAX & SONS LIMITED
And: DAVID ISER SMITH
No. ACT G28 of 1987
Defamation

COURT

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Sheppard(1), Morling(1) and Beaumont(1) JJ.

CATCHWORDS

Defamation - publication of defamatory material in newspaper - imputations - defence under Defamation Act 1974 (NSW) s.22 - whether conduct of publisher reasonable in the circumstances - damages - aggravated damages

Austin v Mirror Newspapers Limited (1986) AC 299

Lewis v Daily Telegraph (1964) AC 234

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

Wright v Australian Broadcasting Commission (1977) 1 NSWLR 697

HEARING

CANBERRA
18:1:1988

Counsel for appellant: W.H. Nicholas Q.C. with J.S. Wheelhouse instructed by: Mallesons Stephen Jaques

Counsel for respondent: T.K. Tobin Q.C. with I.A. Curlewis instructed by: MacPhillamy Cummins and Gibson

ORDER

Appeal dismissed.

Appellant to pay respondent's costs.

Note: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

DECISION

The appellant is the publisher of the Sun-Herald newspaper. The respondent is the Official Secretary to the Governor-General of Australia. An article which the respondent claims was defamatory of him appeared in the edition of the Sun-Herald published on 6 June 1982. In proceedings in the Supreme Court of the Australian Capital Territory the respondent sued the appellant for damages for defamation. The learned trial judge (Miles C.J.) awarded the respondent damages in the sum of $46,250.00. From that decision the appellant appeals to this Court.

2. Three broad questions arose on the appeal: first, whether the trial judge erred in finding that the matter complained of, in its natural and ordinary meaning, was capable of bearing all or any of the imputations alleged by the respondent; secondly, whether his Honour was in error in rejecting a defence raised under s.22 of the Defamation Act 1974 (NSW); and thirdly, whether the damages awarded were excessive.
The newspaper article

3. The matter complained of by the respondent is an article which occupied substantially the whole of the first page and most of the third page of the Sun-Herald of 6 June 1982. The effect which a reading of the article as a whole would be likely to have on the mind of the ordinary reader can best be gathered from a perusal of the article in its published form. For that reason we annex a copy of it to these reasons. The article as pleaded in the Statement of Claim has added to the text a number alongside each paragraph and in his reasons Miles C.J. found it convenient to retain these numbers for ease of reference. We shall do likewise. The words of the article as they are referred to in the Statement of Claim are as follows:

"1. GOVT BUNGLE HITS HOME SAVERS

2. Vice-regal protocol and bureaucratic bungling
have denied hundreds, and possibly thousands,
of young couples the right to Federal
Government home-savings grants.

3. The full extent of the amazing mix-up was
discovered only on Friday when a young Sydney
couple, Michelle Todd and Greg Sheather
(right), applied for the $2,000 grant.

4. They believed they were well within the
deadline when the Governor-General, Sir
Zelman Cowen, was to have given Royal Assent
to changes in the Government's housing
scheme, including a new means test.

5. But Sir Zelman signed the document last
Wednesday - days earlier than expected -
despite intervention by the Minister for
Social Security, Senator Fred Chaney.

6. Senator Chaney wanted the signing delayed
until June 9 so more couples eligible under
the old scheme could still apply. But
Government House officials refused.

7. It meant the young couple who'd been saving
for years and had been rushing to meet the
deadline, failed to qualify because they
didn't sign their house contract until
Thursday - 16 hours after Sir Zelman's Royal
Assent changed the rules.

8. It's feared thousands more will miss out for
the same reason, although up to 100,000 could
still be eligible provided their house
contracts were completed before last
Wednesday.

9. MISSED HOME GRANT BY ONE DAY.

10. COUPLE ANGRY.

11. Young Sydney couple Greg Sheather and his
fiancee Michelle Todd, were still dismayed
yesterday over 16 hours - and some bureau-
cratic bungling - which cost them a $2,000
Federal home savings grant.

12. They failed to qualify by just 16 hours
because the Governor-General, Sir Zelman
Cowen, gave Royal Assent earlier than
expected to the Commonwealth Government's new
savings grant scheme, which includes a means
test.

13. Sir Zelman signed the document, despite
intervention by the Minister for Social
Security, Senator Fred Chaney, who now fears
that many other young couples will miss out
for the same reasons.

14. Couples eligible for a $2,000 grant under the
old scheme (which had no means test) were
warned a few weeks ago that time was running
out for them to qualify.

15. RULES CHANGED.

16. But many, like Greg and Michelle, believed
they still had time to meet the deadline,
because Sir Zelman wasn't expected to give
Royal Assent, thereby changing the rules,
until sometime next week.

17. After some hectic organising - and years of
saving - Greg and Michelle, finally signed a
contract for their new home last Thursday.

18. Believing they still had time to qualify they
applied for the grant on Friday only to be
told it was too late because Sir Zelman had
given Royal Assent to the legislation on
Wednesday.

19. Had they signed their house contract on
Wednesday instead of Thursday they would have
qualified.

20. Senator Chaney had tried to delay the bill
receiving Royal Assent until June 9 to give
young couples more time to apply.

21. But Government House had objected, saying the
legislation would have to be treated "in the
normal way" and be signed as soon as
possible.

22. The predicament of Greg Sheather and Michelle
Todd began soon after the Treasurer, Mr John
Howard, announced details of the Government's
new housing package in March.

23. Miss Todd said yesterday: "We contacted the
then Housing and Construction Department and
were told that under the new legislation we
would not be entitled to a grant because our
combined income exceeded the $417 a week
limit."

24. Two weeks ago they read in the Sun-Herald
that there was still about a two weeks'
deadline to qualify for the old home savings
grant scheme, provided they signed a contract
before the legislation received Royal Assent.

25. Miss Todd said: "I took time off work to try
to complete all the arrangements for signing
the contract within the deadline."

26. The Sun-Herald was told two weeks ago that
the Government could not put a precise time
on the signing of the bill because it
depended on when the Governor-General was
available.

27. Inquiries last week revealed that Senator
Chaney, realising the problem had wanted the
signing of Royal Assent to be postponed until
June 9.

28. Government House officials had overruled him
on protocol grounds.

29. Senator Brian Harradine sought to have the
legislation amended to allow more time for
the old home savings grant scheme to operate.

30. But the majority of the Australian Democrats
would not support the proposition and the
amendment failed.

31. The Bill was passed and was sent to
Government House in the normal way despite
Senator Chaney's misgivings.

32. The problem about accepting Senator
Harradine's amendment was that the Bill would
have had to go back to the House of
Representatives before it could have become
law.

33. The House had adjourned for the winter recess
and the Government did not believe it
important enough to recall the House to deal
with only one amendment.

34. Government sources said the problem could
have been averted had the Parliamentary
draftsman not insisted on making it operative
from the date of Royal Assent.

35. Greg Sheather said yesterday: "I believe
we've been given a raw deal because we were
originally misinformed by somebody in the
Sydney office of the old Department of
Housing and Construction."

36. The Government is about to mount a big
publicity campaign to ensure that people
still eligible for the old home savings
grants apply before the cut-off date of
July 2.

37. The Government estimates that more than
100,000 eligible couples have not yet
applied."

Paragraphs 1-8 appeared on the first page of the newspaper and the remaining paragraphs on page 3.
The imputations alleged

4. The respondent alleged in his pleading that the article gave rise to the following imputations:

"(a) the plaintiff acted with callous disregard for
the welfare of young couples by refusing to
delay the Royal Assent for several days to
enable them to become eligible for home savings
grants;

(b) the plaintiff was guilty of bureaucratic
bungling in arranging for the Royal Assent to be
given prematurely thereby causing numerous young
couples to be denied the benefit of a home
savings grant;

(c) the plaintiff was guilty of gross incompetence
in the execution of his duties;

(d) the plaintiff was responsible for bureaucratic
bungling whereby the Royal Assent was given to
legislation earlier than expected, thereby
causing young couples to be denied the benefit
of a home savings grant;

(e) the plaintiff acted without compassion for the
welfare of young couples by objecting to a delay
in the Royal Assent to legislation as a result
of which young couples were denied the right to
a home savings grant;

(f) the plaintiff was inefficient in the performance
of his official duties with respect to the
signing of the legislation concerning home
savings grants;

(g) the plaintiff had been unco-operative to the
point of being obstructive in the implementation
of Government Policy whilst carrying out his
duties as Official Secretary to the Governor-
General."

5. No innuendo was relied upon, it being alleged that the natural and ordinary meaning of the words in the article conveyed the imputations sued upon.

6. The learned trial Judge treated the imputations in paras. (a) and (e) as being the same. He took a similar view of the imputations alleged in paras. (b) and (d), and of the imputations alleged in paras. (c) and (f). The appeal was conducted upon the basis that this treatment of the imputations was correct and we shall approach them in the same way.

Does the article bear the imputations alleged?

7. We turn now to consider whether Miles C.J. was in error in finding that the matter bore the imputations alleged.

8. The standard that the learned trial judge was required to observe in deciding this question was what the words complained of would convey to the ordinary man: Lewis v Daily Telegraph (1964) AC 234 at p.258. As was said by Lord Reid in that case, the ordinary man does not live in an ivory tower. He is able to, and does, read between the lines in the light of his general knowledge and experience of worldly affairs. In deciding whether words are capable of conveying a defamatory meaning the court will reject those meanings which are the product of some strained or forced or utterly unreasonable interpretation: Jones v Skelton (1963) 1 WLR 1362 at p.1370. The ordinary and natural meaning of words may be either their literal meaning or it may be an implied or inferred or an indirect meaning. The ordinary and natural meaning may therefore include any implication or inference which a reasonable reader guided not by any special but only by general knowledge and not fettered by any strict legal rules of construction would draw from the words: ibid. at p.1371.

9. As Lord Devlin pointed out in Lewis (supra at p. 277) the natural and ordinary meaning of words ought in theory to be the same for the lawyer as for the layman because the lawyer's approach to construction is that words are to be given their natural and ordinary meaning as popularly understood. However, as his Lordship pointed out, it is very difficult to draw the line between pure construction and implication, and the layman's capacity for implication is much greater than the lawyer's. His Lordship further observed that the layman reads in an implication much more freely than the lawyer, and is especially prone to do so when it is derogatory. The propensity of the Australian layman in this respect is, we think, at least as strong as that of his English counterpart.

10. In deciding what an ordinary reasonable reader would take to be the meaning of the words complained of, Miles C.J. thought that the reader should be taken to have a smattering of knowledge of legal principle and the workings of the law, but no more. He considered that such a reader in Canberra would know that the respondent was the Official Secretary to the Governor-General at the time in question and that he had responsibility for communication between ministerial and parliamentary officers on the one hand and the Governor-General on the other. However, he thought that the reader would not have known the precise limits of the Official Secretary's discretions and powers and, in particular, would not have known that there was no capacity in the Official Secretary to delay the presentation of a bill to the Governor-General for Royal Assent. He also considered that the reader would not have had positive knowledge that, although an official of government in the broad sense, the respondent was immune from control or direction of the Government of the day and of its ministers. He therefore considered that the reader was susceptible to an implication that there were at the disposal of the Official Secretary to the Governor-General certain powers or discretions and, in addition, susceptible to an implication that those powers or discretions had been exercised in a certain way. He was of the view that although the reader would have been aware of some vague distinction between the Vice-Regal function and the function of the elected government, his knowledge of that distinction would have been insufficiently precise to resist the implication that it lay within the power of the Official Secretary to do something which would have the effect of delaying the Royal Assent to a bill.

11. We think his Honour was justified in reaching these conclusions. Counsel for the appellant submitted that without proof of extrinsic facts it was not reasonably open to the reader of the article to conclude that the respondent had a discretion to delay, or to agree to a request to delay, the Royal Assent to a bill. We do not agree with this submission. Some statements in the article to which we shall presently refer could only have had the effect of leading the reader to conclude that the respondent did indeed have such a discretion.

12. The question then is whether the ordinary reader of the article would read it as containing the imputations alleged. The reference in the headline on p.1 to "Govt bungle" is immediately followed in para. 2 by the reference to "Vice-regal protocol and bureaucratic bungling". It is stated in para. 6 that "Senator Chaney wanted the signing delayed ... But Government House officials refused." The identity of the bureaucrat or bureaucrats alleged to be responsible for the bungling referred to in para. 2 is not precisely stated on p.1 of the article, but the only persons referred to on that page who might be identified by the ordinary reader as bureaucrats are the "Government House officials" referred to in para. 6. The reader's understanding that a Government House official was responsible for the bungle would be reinforced by the words "over 16 hours - and some bureaucratic bungling" in para. 9. The reference in that paragraph to 16 hours immediately followed by the reference to bureaucratic bungling would lead the reader to infer that the bungling occurred in that time frame. The reader would infer, correctly, that the only bureaucrat involved at that time was the official at Government House whose responsibility it was to organize the giving of the Royal Assent. The statements in para. 21 that "Government House had objected, saying that the legislation would have to be treated 'in the normal way'" and in para. 28 that Government House officials had overruled Senator Chaney on protocol grounds would further reinforce this understanding.

13. The only statements in the article that the ordinary reader might interpret as referring to bureaucrats other than Government House officials appear in paras. 34 and 35 and in the caption which appears underneath the photograph on p.3. We think the ordinary reader, whose attention was initially attracted by the banner headline referring to the Government bungle and who thereafter read the account of Senator Chaney's unsuccessful efforts to delay the giving of the Royal Assent would assume that it was the Government House officials who were responsible for the bureaucratic bungling. The ordinary reader would not expect that he would have to read almost to the end of the second page of the article to find a reference to the person responsible for the bungle referred to in the headline.

14. Counsel for the appellant submitted that the reader would make a clear distinction between Vice-Regal protocol and bureaucratic bungling and exclude the respondent from the latter. It may be conceded that in other contexts the ordinary reader might draw such a distinction. But the layout of the article, the repeated references to Senator Chaney's intervention with Government House, the references to Government House officials, and the minimal references to any other persons who might be described as bureaucrats would lead the reader to understand that officials at Government House were part of the bureaucracy. Many readers would understand that they were also involved in Vice-Regal protocol. However, that understanding would not lead the reader to exclude them from the bureaucracy responsible for the alleged bungle.

15. Moreover, the statement that Senator Chaney wanted the signing delayed (para. 6), the reference to his intervention (para. 13), the statements that he wanted the signing of the Royal Assent postponed (para. 27) and that Government House officials had overruled him on protocol grounds (para. 28) could only lead the ordinary reader to understand that it was possible for the signing of the Royal Assent to be postponed and that a Government House official had the requisite power to delay such signing. The reader would be unlikely to think that a senior minister of the Crown would make a request of a Government House official to delay the signing if the official had no power to act in accordance with the request.

16. We should add that there was no issue at the trial that it was the respondent who was the Government House official referred to in the publication. That is to say, it was conceded that the material complained of was published of and concerning the respondent. We agree with the trial judge that although the opening words of the article may appear to distinguish between the Vice-Regal function on the one hand and the bureaucratic function on the other, the repeated references to Government House and to Government House officials blur this distinction. The tenor of the publication, taken as a whole, would not lead the reader to understand that all that was being said of the respondent was that he was insisting on proper Vice-Regal protocol. On the contrary, the reader is led to believe that the respondent was guilty of unreasonable and inflexible insistence upon formality and ceremony.

17. We turn now to consider each of the imputations alleged. In essence the first imputation suggests conduct by the respondent "in callous disregard for the welfare of young couples". We agree with Miles C.J. that the article leaves the reader with the impression that it lay within the power of the respondent to delay the Royal Assent for sufficient time to enable a number of home buyers, including the couple referred to in the article, to apply for and obtain a home savings grant. We further agree with his Honour that the ordinary reader would take the article to convey that the respondent was insisting upon a compliance with formalities which could have been waived in the interests of home buyers. The reader would gather this understanding from the references to the respondent's refusal of Senator Chaney's request, from his attitude that the legislation had to be treated "in the normal way" and from the statement that his refusal was based on "protocol grounds". Reading the article in this way we think that the ordinary reader would be led to the conclusion that the respondent acted without regard for the interests of young couples who would otherwise have been eligible for home savings grants. But the question remains whether such conduct could be said to be "callous". Counsel for the appellant submitted that the reader could only reach a conclusion that this amounted to a "callous disregard for the welfare of young couples" by the impermissible process of drawing inference upon inference. We reject this argument. It assumes that callousness implies more than insensitivity. We do not think this is so. The ordinary meanings in conventional usage of "callous" include "harden" "unfeeling" or "insensible": see Shorter Oxford English Dictionary and Macquarie Dictionary. We think the article was capable of conveying the first imputation relied upon.

18. The second imputation pleaded was that the respondent was guilty of bureaucratic bungling. It follows from what we have already written that the ordinary reader would understand from the article that this was one of the imputations it contained. We consider that many ordinary readers would regard Government House officials, including the respondent, as public servants, although public servants in a distinctive area of public service and with particular duties. This being so, we think that the reader of the article would identify the respondent as a bureaucrat and as one of the bureaucrats whose bungling had led to the injustices inflicted upon home buyers.

19. The third imputation pleaded was that the respondent was grossly incompetent and inefficient in the execution of his duties. We agree with the trial judge that if the matter complained of gave rise to the imputation that the respondent was guilty of bureaucratic bungling it must, of necessity, give rise to the further imputation that he was grossly incompetent and inefficient in the execution of his duties.

20. The final imputation pleaded was that the respondent was unco-operative and obstructive in the implementation of government policy. The trial judge correctly treated this as being tantamount to an imputation that the respondent was obstructive to government policy in relation to housing and government financing of housing. The learned judge thought that the reader of the article would take it as conveying that the respondent used his powers to stand in the way of a government policy that the change in the legislation should be delayed as long as possible or, conversely, that the respondent was concerned to use his powers to ensure that the new legislation was brought in as soon as possible contrary to the desire of the government.

21. It was submitted on behalf of the appellant that the ordinary reader would not find such an imputation in the article. It was said that he could not find it from what is said in the article since what is said is indicative of insensitivity, bungling and incompetence rather than antipathy to and obstruction of government policy. It was argued that the reader's conclusion (if he reached it) that the respondent was obstructive of government policy would have to be based on some additional inference which he might draw from the words complained of. Reliance was placed upon the following observations by Mason J. in Mirror Newspapers Limited v Harrison [1982] HCA 50; (1982) 149 CLR 293 at 301:

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

22. It was said that the reader's conclusion that the respondent was obstructive of government policy could only be reached because of some belief or prejudice not justified by the terms of the article.

23. We accept, of course, the distinction made by Mason J. But we see no room for its application here. A reader would understand the newspaper to be saying: (1) it was the wish of Senator Chaney that assent to the bill be deferred; (2) the Senator was the Minister responsible for the legislation; (3) thus it was Government policy that the coming into force of the legislation be postponed; (4) the respondent, acting as a Vice-Regal official, rejected the Senator's plea for deferment.

24. In short, the article leads the reader to understand that the respondent was an official who stubbornly stood in the path of the Senator's proposal. This impression is gained from a reading of the article itself. It is not a case, as was Harrison, where a preconception can lead a reader to form a conclusion about a person mentioned in a newspaper report.

25. We do not think the article conveys the imputation that the respondent was opposed to the Government's general housing policy, but that is beside the point. That was not the imputation alleged. It follows that in our opinion the imputation pleaded in para. (g) was also established.

Defence under s.22 of Defamation Act

26. The appellant raised a defence under s.22(1) of the Defamation Act 1974 (N.S.W.) which provides as follows:

"22 (1) Where in respect of matter published
to any person -

(a) the recipient has an interest or
apparent interest in having information
on some subject;

(b) the matter is published to the
recipient in the course of giving to
him information on that subject; and

(c) the conduct of the publisher in
publishing that matter is reasonable in
the circumstances,

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

27. Miles C.J. found that the appellant had established the matters required to be proved under sub-ss.22(1)(a) and (b), but he was not persuaded that the appellant's conduct in publishing the material complained of was reasonable.

28. The onus lay on the appellant of proving the reasonableness of its conduct in publishing matter defamatory of the respondent: Morosi v Mirror Newspapers Ltd. (1977) 2 NSWLR 749 at p.796; Wright v Australian Broadcasting Commission (1977) 1 NSWLR 697 at p.700. In considering whether the conduct of the publisher is reasonable, the court must consider all the circumstances leading up to and surrounding the publication: Austin v Mirror Newspapers Ltd. (1986) AC 299 at p.313.

29. In Wright Reynolds JA said at p. 712:

"Section 22(1)(c) calls for the consideration of a
wide range of matters. Some are to be found in
the published material itself and the manner and
extent of its publication, and others from the
whole of the surrounding circumstances. The
connection between the subject and the defamatory
imputation remains relevant. It may be tenuous, or
it may be real and substantial. If what was said
includes comment, it is relevant to consider
whether it was fair and whether it followed
logically from facts known or stated. Questions
of the exercise of care before the defamatory
utterance are also relevant, and questions as to
whether the maker of the statement knew whether he
was likely to convey a misleading impression."

30. The publication of the article complained of on 6 June 1982 was preceded by some events which it is necessary to mention briefly. In 1976 there was established by the Home Savings Grant Act 1976 a scheme of financial assistance to first home buyers who satisfied certain eligibility conditions relating to savings. In May 1982 legislation was introduced to abolish this scheme and replace it with a new scheme. Applicants under the new scheme were to be subject to a means test which had not applied under the old scheme. The Sun-Herald of 23 May 1982 carried an article written by Mr Neil O'Reilly, the author of the article which appeared on p.3 of the Sun-Herald of 6 June 1982. The article of 23 May read, in part, as follows:

"Couples who want a Federal Government home-savings
grant will need to have signed a contract for
purchase of a home within two weeks.

"This is when the current home-savings grant scheme
ends to make way for the Government's new home
deposit assistance scheme.

"Those eligible for the old home-savings grants will
not necessarily qualify for the new scheme - thus
the urgency for last-minute applications.

"The new home deposit assistance scheme legislation
will receive Royal Assent in about two weeks.

"Those eligible for the old home-savings grant will
have to sign a contract for the purchase of their
dwelling by the day the legislation receives Royal
Assent.

"They will have another month after this to lodge
their application.

"The Federal Government is anticipating a late rush
of applications."

"The new scheme is means-tested, whereas the old
home-savings grant scheme was not."

31. It appears that in March or April 1982 Mr Gregory Sheather applied to the Department of Housing and Construction for a grant of money to assist him in the purchase of a home. Some time prior to 23 May, he contacted the Department and was told that he was not eligible for a home savings grant, because the scheme which was then current was subject to a means test. This information was erroneous. Believing that he was ineligible for a grant, he apparently did not immediately pursue his application. On 23 May 1982 he read the article which appeared in the Sun-Herald of that date. At that time, he and his future wife, Miss Todd, were in the process of buying a house. Reading in the article that there was a two week deadline they thought they should expedite the signing of the contract to purchase their house and the contract was in fact signed on 3 June 1982. On the following day they ascertained that the old scheme had been abolished and that they would have to comply with a means test under the new scheme.

32. Sheather had a conversation with O'Reilly on the night of 4 June and told him of his misfortune in failing to qualify for a home savings grant. Before writing the article of 6 June, O'Reilly had a conversation with Mr Ian Fletcher who was Senator Chaney's senior private secretary. According to Fletcher, whose evidence was accepted by the trial judge, he told O'Reilly that the decision that the legislation should take effect from the date of the Royal Assent was one deliberately made by the Legislative Committee of Cabinet. He said he told O'Reilly that the Government had taken advice from the Attorney-General's Department and also from First Parliamentary Counsel on the question of possible deferral of the Royal Assent and had been advised that it was only in exceptional circumstances, which did not apply in the instant case, that such a deferral could be recommended. Fletcher said he also told O'Reilly that there was a constitutional convention that Government House had no power to "change the process". Fletcher denied that he used the word "protocol" during his conversation with O'Reilly. It seems clear that O'Reilly knew at the time he wrote the article that it did not lie within the respondent's power to delay the giving of the Royal Assent to the bill and that Government House officials had no alternative but to follow normal constitutional requirements which made it necessary for bills to be submitted to the Governor-General for his signature in the order in which they were received.

33. O'Reilly said in evidence that the bureaucratic bungling intended to be referred to in para. 11 of his article was the wrong information given to Miss Todd and Mr Sheather prior to 23 May by an officer of the Department of Housing and Construction. The front page of the Sun-Herald of 6 June was what is called in newspaper jargon a "write-off". It was a re-writing by the editor of the article prepared by O'Reilly and which appeared on p.3. The editor, Mr Allen, said that he had dealt with O'Reilly's article in such a way as to emphasize the main points of it. It is clear that in para. 2 Allen was referring to the same bureaucratic bungling as is referred to in para. 11.

34. Miles C.J. was not persuaded that the appellant's conduct in publishing the material complained of was reasonable, and we agree with him. If the bureaucratic bungling referred to in paras. 2 and 11 was the wrong advice given by an officer of the Department to Miss Todd and Mr Sheather, it is astonishing that the article took the form that it did. That bungling had nothing to do with Vice-Regal protocol or with any official at Government House. Yet the article is replete with references to the Governor-General and Government House officials and to action taken by them. In stark contrast, only minimal reference is made to the incorrect advice. Having taken the trouble to ascertain that nobody at Government House was responsible for any unreasonable or improper conduct, let alone bungling, he wrote an article containing the imputations to which we have referred. As we have already observed, the bungle for which the departmental officer was responsible is not brought to the reader's attention until he reaches para. 35 where the statement is first made that Sheather was given wrong information by an officer in the Department of Housing and Construction. The only indication elsewhere in the article that the giving of this wrong information was the bureaucratic bungling earlier referred to is in the caption underneath the photograph on p.3. As the bureaucratic bungling intended to be referred to in para. 11 had occurred in March or April 1982 it was extraordinarily inept to link it with a reference to the period of 16 hours mentioned in the same paragraph.

35. Whilst O'Reilly did take steps to ascertain the procedures which were involved in the giving of the Royal Assent to a bill and was fully informed on that subject, he did not take any steps to speak to the respondent before writing the article. We are prepared to accept that if he had spoken to the respondent he would not have been better informed as to matters of Vice-Regal protocol and constitutional practice, since the information he had already obtained on those matters from other sources was accurate. Nevertheless, we find it difficult to believe that the article would have taken the form that it did if he had spoken to the respondent and told him what he was proposing to write. We think it is certain that the respondent would have protested that the reader of the article would identify him as being involved in the alleged bungling. The respondent was well-known and accessible to Mr O'Reilly. The article was by no means of insubstantial journalistic importance, if regard is had to the appellant's action in placing it under a banner headline on the first page of its newspaper which is said to have the biggest sale of any newspaper in New South Wales. O'Reilly had no obligation to discuss the terms of his article with the respondent. However, under the circumstances, it was imprudent of him not to have done so, and it is surprising that he did not.

36. Of course, the fact that published material contains imputations defamatory of a person does not deprive the publisher of a defence under s. 22(1) of the Defamation Act, else the section would have no application in any case. The question is whether the conduct of the publisher is reasonable in the circumstances of the particular case. We think that taking into account all the circumstances leading up to the publication of the article and the manner in which it was written given the tenuous connection between the respondent and the bureaucratic bungling referred to in it, the defence under s.22 was not made out.

Damages

37. Miles C.J. awarded the respondent damages of $46,250.00 made up as follows:

Loss of reputation:

Australian Capital Territory $ 5,000
New South Wales 25,000
Victoria 3,000
Queensland 2,000
South Australia and
the Northern Territory 500
Tasmania 500
Western Australia 250
_______

Total: $36,250

Injury to feelings: 10,000
_______

TOTAL $46,250

38. We should say at the outset that the damages awarded appear to us to be very moderate. No doubt the moderation was occasioned, in large part, by the publication of an article which appeared in the Sun-Herald on 13 June 1982, the terms of which are set out in the judgment under appeal. For our part, we do not think that article achieved very much in diminishing the damage caused to the respondent. It appeared on page 9 of the newspaper. It did not occupy an especially prominent position on that page. It does not purport to be, and was not, an apology. It makes only passing reference to the part played by Government House officials in the obtaining of the Royal Assent to the bill. It was not calculated to disabuse the minds of many readers of the impressions they would have gained from reading the article of 6 June.

39. The appellant's only real criticism of the award is that the damages awarded for loss of reputation in New South Wales were too high. No submission was put that the amount allowed for injury to feelings was excessive.

40. The amount awarded for loss of reputation in New South Wales was said to be too high for a number of reasons. First, it was submitted that if the court should find that the words complained of did not give rise to all the imputations found by the trial judge, the damages should be reduced accordingly. Secondly, it was submitted that the trial judge was wrong to include in his award any allowance for aggravated damages. Thirdly, it was put that relatively few people in New South Wales would have identified the respondent as the person against whom the imputations in the article were made.

41. It was conceded by counsel for the appellant, and correctly so, that if we came to the view that the trial judge erred in any respect in assessing damages it would be incumbent upon us to ourselves determine the damages without necessarily adopting the several components which go to make up the overall figure arrived at by his Honour.

42. We can deal with the question of damages quite briefly. Our finding that the words complained of convey all the imputations pleaded disposes of the first submission.

43. As to the second submission, the amount allowed by the trial judge by way of aggravated damages must have been very small indeed having regard to the modesty of the various components of the total award. In these circumstances, and having regard to the view we have formed as to the reasonableness of the overall sum awarded, we do not find it necessary to reach a concluded view on the question whether the appellant was guilty of such high handed conduct and lack of good faith as justified an award of aggravated damages.

44. As to the third submission, we agree that residents of New South Wales would not have as readily identified the respondent as would residents of the Australian Capital Territory as the person against whom the imputations in the article of 6 June were made. Nevertheless, having regard to the very large circulation of the Sun-Herald in New South Wales (in excess of 640,000 copies), we think it is inevitable that a large number of people in that State would have identified the respondent as the subject of the imputations in the article.

45. In our opinion, even if the assumption be made that the respondent was not entitled to aggravated damages, it is impossible to say that the overall award of damages was too high. We are of the view that the amount of $5,000 awarded for loss of reputation in the Australian Capital Territory was very modest. We ourselves would have allowed a much larger sum for that component of the award. The respondent lives and works in Canberra. He must be widely known in government and diplomatic circles in that city and in the community generally. Any alteration to the damages awarded by the trial judge as a consequence of acceding to the appellant's submissions would be at least set-off by the escalation which we would make for loss of reputation in the Australian Capital Territory. In the result, no case has been made out that the total damages of $46,250 are excessive.

46. The appeal is dismissed with costs.