Theodore Skalkos & v Joseph Assaf & Anor [2002] NSWCA 14 (13 February 2002)

Last Updated: 4 March 2002

NEW SOUTH WALES COURT OF APPEAL

CITATION: THEODORE SKALKOS & ANOR v JOSEPH ASSAF & ANOR [2002] NSWCA 14

FILE NUMBER(S):

40860/00

HEARING DATE(S): 24 and 25 September 2001

JUDGMENT DATE: 13/02/2002

PARTIES:

THEODORE SKALKOS & ANOR v JOSEPH ASSAF & ANOR

JUDGMENT OF: Mason P Giles JA Fitzgerald AJA

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): CL 18374/93

LOWER COURT JUDICIAL OFFICER: Carruthers AJ

COUNSEL:

Appellant: D F Jackson QC/ J A Darvall

Respondent: TEF Hughes QC/ K A Rees

SOLICITORS:

Appellant: Tony Lazaropoulos

Respondent: Mallesons Stephen Jaques

CATCHWORDS:

Defamation - qualified privilege - whether judge conflated issues of malice and excess of occasion of privilege - Judge's conclusions on qualified privilege at common law not a discretionary ruling - whether in emphasising the inaccuracy of the imputations the judge overlooked the fact privilege may be attracted despite untrue defamatory statements - Schedule of questions placed before the jury -form of template misleading - inconsistency in answers - whether trial judge entitled to treat second answer as surplusage - whether answers could not logically stand together - whether s13 Defamation Act defence should have been available - Adequacy of summing up. (D)

LEGISLATION CITED:

Defamation Act 1974 (NSW)

DECISION:

Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40860/00

CL 18374/93

MASON P

GILES JA

FITZGERALD AJA

Wednesday 13 February 2002

Theodore SKALKOS & Anor v Joseph ASSAF & Anor

JUDGMENT

1 MASON P: The first appellant is the controller of the second appellant and they shall hereafter be referred to as the defendants. The first respondent is the controller of the second respondent and they shall hereafter be referred to as the plaintiffs.

2 The plaintiffs sued for damages for defamation in respect of imputations deriving from (i) a letter dated 21 July 1993 to the Hon Paul Keating MP, the then Prime Minister; and (ii) the publication of the letter (subject to one modification) in Novosti, a newspaper circulating within the Serbian community in Australia.

3 The sad chronology of this litigation shows that it commenced in 1993 and dragged on through interminable and costly interlocutory skirmishes. The proceedings eventually came on for trial before Carruthers AJ and a jury in late 1999. The trial involving the jury spanned 34 days and resulted in verdicts in favour of the first plaintiff for $150,000 and in favour of the second plaintiff for $30,000. A schedule of 51 agreed questions had been put to the jury. There were subsequently four days of hearing in relation to defences of qualified privilege and issues of costs and interest. On 5 October 2000 Carruthers AJ gave judgment for the first plaintiff against the defendants in the sum of $171,595 and judgment for the second plaintiff against the defendants in the sum of $34,319. Costs were awarded against the defendants on various bases.

The matters complained of

4 The letter to the Prime Minister was under the Foreign Language Publications Pty Ltd letterhead and was signed by Mr Skalkos. The numbers allocated to the various paragraphs were not in the original, and are set out for the sake of convenience.

"1. I write this letter to you as the publisher of the largest group of Ethnic Newspapers in Australia. This letter is not specifically addressed only to yourself Mr Prime Minister but all your Federal government Ministers, colleagues and heads of Government Departments and semi- governmental authorities.

2. This letter is directed towards the dealings that your Government has with the Ethnic Communities of Australia through the Ethnic Print Media. It is my belief that the Government and Semi-Government Authority advertisements are being "sold" to the Ethnic Print Media for publication in our newspapers. I think you would agree with me Mr Prime Minister that every person in Australia is concerned about the heavy burdens placed on them by way of taxes, charges, and everyday living costs. What I think, with the greatest respect Mr Prime Minister, you and your Ministers should be concerned about is that payments made by the ethnic Australian population indirectly though the purchase by them of newspapers are not unduly exorbitant because of the practices that have become common place in the way in which Government and Semi-Government Authority advertisements, newsreleases, pressreleases etc., are being distributed to the Ethnic Print Media through for example, companies such as Ethnic Communication Pty Limited and, through your own Commonwealth Government Advertising Service.

3. As you probably are aware Mr Prime Minister, at the moment most, if not all, government advertisements, press releases, etc., are passed to companies such as Ethnic Communications Pty Limited by the Commonwealth Government Advertising Service so that the former company can theoretically translate, typeset, layout, etcetera the advertisements and announcements and then "on sell" these to the various Ethnic Newspapers. What troubles me Mr Prime Minister is that the intervention of these "middle men" to the cost of the publisher of obtaining these advertisements - with no reason for this, it would appear, other than the "middle man" making a substantial profit.

4. I would submit Mr Prime Minister that the capacities and manpower of most Ethnic Newspapers in Australia are far better equipped to provide a more cost effective service, than is currently being provided by Ethnic Communications Pty Limited for example, and consequently ask that you investigate the reasons behind there being a "middle man" and why these middle men pump up the final cost of such government information. Why do we need such a "middle man". Why cannot the Government, its Ministries, Semi-Government Authorities etcetera pass on to the various Ethnic Publications material that is proposed to be published for inclusion direct.

5. Surely the Government would have difficulties in substantiating the double and triple cost factor in having intermediaries provide a service that is already existent in the structure of Ethnic Publications. It appears to me at least that certain individuals are lining their pockets with tax payers monies for doing very little.

6. The money making activities of companies such as Ethnic Communications Pty Limited at the expense of readers troubles me even more when I am informed that a lot of the translations being performed by that company are performed in fact by persons on either age pensions, invalid pensions, unemployment benefits etcetera. No doubt if you Mr Prime Minister wanted to get to the bottom of the qualifications and credentials of the persons to whom Ethnic Communications delegates translating jobs you would no doubt quickly come to realise that the "rort" is being compounded by the method in which the translations are being paid and, to whom such payment are being made.

7. Our newspaper group has audited circulation figures, and publishes papers that include the Greek Herald, the New Country, the Novosti, the Il Mondo, the Spanish Herald and Al Bairak, the Australian and British Soccer Weekly, the Ellinis Greek Weekly magazine etc. My group also prints some 52 foreign publications for different Ethnic Publishers. I have stopped receiving and paying for advertisements from Ethnic Communications Pty Limited pertaining to the Government, Ministries, semi-government authorities etc., because of the "rorts" that I see are taking place. Ultimately what this does of course is to deprive our large readership of vital information that the Government wishes to pass on to them. In these hard economic times the economic viability of this "rort" does not allow me the flexibility to pay ridiculous sums for work that we can perform at a fraction of the cost.

8. This open letter to you Mr Prime Minister will be published in all my newspapers to make my readers, who total some 400,000 per week, aware of this one might say, unethical and wasteful practice. No doubt a lot of your government Departments, Semi-Government Authorities etcetera would also be quite alarmed at being made aware of these facts and practices. One would assume that if the public was advised of changes to the law, changes to procedures, explanations of entitlements etcetera through their native language media, the staff and resources of individual Government Departments would not be under as much pressure as they potentially now are in having to individually explain changes etcetera to the Ethnic Community of Australia. Government costs could also possibly be reduced in relation to the numbers of pamphlets, brochures etcetera that the Government would need to print for the purpose of handing out through catalogue stands to the Ethnic Community.

9. It seems to me that the Government could if it wanted to quickly smarten up its act in relation to the transmission of material to the Ethnic Media, be cost effective and, more current if it cut out these "middle men".

10. Examples of this outrageous pricing forced upon us by companies such as Ethnic Communications Pty Limited include our experience in dealing with them for pamphlets such as "Age Pension News" recently.

11. Our company currently pays Telecom Australia approximately one million dollars ($1,000,000) per year for fees and services rendered. Presently we receive nothing from Telecom by way of advertisements. It was always my belief that Telecom, as it consistently boasts in its current battle with Optus, is a hundred percent Australia owned and therefore Australians should support telecom in favour of Optus. My newspaper group is doing just that. What is Telecom giving back to me. The answer is simple - nothing. Would it not be fair and reasonable to expect a company like Telecom whose motive is not simply one of profit, to invest back into a company such as mine monies through advertising to promote its product as I am investing my money to utilise Telecom services. Possibly you can look into this for me.

12. The reason you may not have heard complaints up until this time from the Ethnic Print Media is because a lot of smaller Ethnic Publications are too afraid to stand up and complain about the rorts currently being shoved down their throats by companies like Ethnic Communications Pty Limited in fear of them being bullied by such companies. My newspaper group however has had enough of it and now sees that the time is right to stand up and shout out our rage.

13. I respectfully propose that you Mr Prime Minister immediately look into the current procedures that I have outlined above with a view to changing the way in which information is given to the Ethnic Press.

14. A proposal that I ask you to consider is the establishment of a standing committee, comprising members of the larger Ethnic Media groups, bureaucrats, ministers etc., who can co-ordinate and look into the dissemination and distribution of Government and Semi-Government information to the broader Ethnic Australian community. If such a committee was set up, with no payments going to any such person, and pricing structures established that were free of excesses and rorts, everyone would benefit in the short and long term. Everyone of course except the "middle men" who are currently making a comfortable living off tax payers money and depriving the Ethnic Community of important information.

15. What you ultimately decide to do Mr Prime Minister is a matter for yourself. The course you take however will, I respectfully submit, reflect your (and your Governments) business morals and priorities to the large Ethnic Australian population of this our country.

16. I await your reply.

Yours faithfully,

(sgd) T Skalkos

T. Skalkos."

5 By their answers to questions 29 and 30, the jury found that the letter to the Prime Minister was also published to Telecom and three of its employees. Publication was not effected by the defendants but was found to be a natural and probable consequence of the publication of the letter to the Prime Minister by the defendants (see also Assaf v Skalkos [2000] NSWSC 418 at [35]- [39]).

6 It was stated in par 8 of the letter that it would be published in all of the defendants' newspapers. However, it was only put into Novosti, a newspaper published in the Serbian language with circulation of 7199 copies and a substantially larger readership.

7 The newspaper publication repeated the letter (in Serbian) except that the first sentence of par 12 reads (in English):

Maybe you have not had an opportunity to hear complaints like this by ethnic print media because a lot of smaller ethnic publications are too afraid to stand up and complain about the companies such as Ethnic Communications Pty Ltd.

The outcome of the trial

8 The plaintiffs claimed that the letter contained four imputations, in similar terms, in respect of each plaintiff and that the article contained three imputations, in similar terms, in respect of each plaintiff. The jury found that the first, third and fourth imputations were conveyed and were defamatory in the case of the letter, and that the first and third imputations were conveyed and were defamatory in the case of the article. The first, third and fourth imputations as regards Mr Assaf were:

1. He exploits publishers of ethnic community newspapers for his selfish financial purposes, by selling government advertising to them at exorbitant prices.

....

3. He conducts the business of Ethnic Communications Pty Ltd in such an unethical manner as to cause ethnic communities to be deprived of essential government information.

4. In conducting the business of Ethnic Communications Pty Ltd he employs bullying tactics towards the smaller ethnic media organisations to make them too frightened to complain about his unethical and wasteful conduct.

9 The jury also upheld the defence of comment in relation to the fourth imputation in the letter.

10 The question of "malice" was left to the jury and decided in favour of the defendants. More particularly, the jury found that the plaintiffs had failed to establish that the defendants did not believe in the truth of the matter they published or that the defendants had an indirect motive in publishing the matter (questions 45-47).

11 The jury's findings meant that it was left to the judge to determine whether:

(a) the defence of common law privilege had been made out in respect of both publications; and

(b) the defence of qualified privilege under s22 of the Defamation Act 1974 (the Act) had been made out.

12 Carruthers AJ rejected these defences (Assaf v Skalkos [2000] NSWSC 418).

Issues in the appeal

13 By their notice of appeal, the defendants/appellants:

1. challenge the rejection of the common law qualified privilege defences;

2. challenge the rejection of the s22 qualified privilege defence;

3. assert that the jury's answers to a series of questions provided inconsistent answers;

4. challenge the trial judge's refusal to permit a defence under s13 of the Act to go to the jury; and

5. complain as to the adequacy of the summing up.

14 The defendants seek a verdict and judgment in their favour; alternatively a new trial.

15 By their notice of contention and foreshadowed notice of cross-appeal the plaintiffs/respondents raise the following additional issues:

1. Whether the defendants were entitled to rely on the defence of qualified privilege:

(a) in respect of publication or re-publication of the letter to Telecom or its officers;

(b) as regards the complaint/redress head of qualified privilege.

2. Whether the trial judge should have held (if he did) that the letter and the article were published on occasions of qualified privilege.

3. Whether the defence of comment should have gone to the jury in relation to the third imputation.

Common law qualified privilege defences

16 The appellants challenge the rejection of the defences of common law qualified privilege.

17 The particulars of qualified privilege (in their final form) asserted:

Qualified Privilege

Common Law (both matters complained of)

The Defendants published the matters complained of pursuant to a social or moral duty to do so and, specifically to inform the public about the matters of public interest referred to above. The recipients of each of the matters complained of had an interest in receiving the matter published because they were members of the public and it related to matters of public interest stated above and those members of the public had an interest in knowing the facts and matters stated.

Furthermore, the matters complained of were published to the Prime Minister on an occasion of qualified privilege at common law in that they were published in the course of discussion of government or political matters in that the matters complained of related to the conduct of government departments.

18 The particulars of the facts, matters and circumstances on which the defendants relied to establish a matter of public interest were:

(a) The availability of government information to the ethnic community.

(b) The cost of government advertising and of providing government information to the ethnic community.

(c) Methods of payment and acceptable qualifications of translators carrying out translations of advertising vital government information.

(d) Wastage of government money in "rorts" such as charging fees between $500 to $2000 for the simple task of locating a translator and obtaining from him/her a translation of a government advertisement.

(e) Acceptable business methods when insuring vital government information reaches persons with language problems.

19 As regards the Novosti publication there was a further defence of common law qualified privilege, pleaded as follows:

The second matter complained of was published to readers of 'Novosti' who by reason of needing to read this publication (in a foreign language) were all persons with a specific interest in, and need for, translation of government information into a language they could understand. By reason of the fact that the publication discussed government and political matters, the Defendants rely upon the right of freedom of speech implied under the Constitution.

20 Carruthers AJ found that there was an occasion of privilege "between the defendants and the publishees" with regard to:

(i) the efficient and cost effective communication of government advertising and information to the ethnic community;

(ii) whether there had been any abuses by persons or organisations or government instrumentalities involved in that area of activity which resulted in the exacerbation of cost to the ethnic community of receiving such information; and

(iii) proposals for overcoming suggested problems in that regard (Assaf v Skalkos [2000] NSWSC 418 at [171]. See also at [199]).

21 This conclusion is not challenged in the appeal (see generally Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520 at 571).

22 His Honour stated the "critical question" to be (at [172]):

... whether the first and third imputations which the jury have found to be both false and defamatory can be accommodated within that occasion. There is no doubt that Mr Skalkos has adopted the role of a complainant. There is also no doubt that Mr Skalkos had an interest in bringing what he considered to be "information" to the publishees of the letter.

(As indicated, the plaintiffs accept that there was an occasion of privilege, being that stated in par 20 above. However, the plaintiffs submit that the judge erred in suggesting that the defendants were entitled to rely on the complaint/redress of grievance species of qualified privilege. I shall return to this complaint.)

23 His Honour referred to cases which had addressed the question of when a defamatory statement or imputation would be regarded as relevant to an available occasion of qualified privilege. He prefaced his remarks with the observation that it is interesting to note how the same theme had been expressed in different ways. At pars [173] - [190] of the judgment he cited passages from Stephens v West Australian Newspapers Ltd [1994] HCA 45; (1994) 182 CLR 211 at 260, Mowlds v Fergusson (1939) 40 SR 311 at 318, Adam v Ward [1917] AC 309 at 318, 320-1, Hunt v Great Northern Railway Co [1891] 2 QB 189 at 191, Watt v Longsdon [1930] 1 KB 130 at 143, Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 201, Justin v Associated Newspapers Ltd (1966) 86 WN (Pt 1) (NSW) 17 at 33 and Reynolds v Times Newspapers Ltd [2001] 2 AC 127 at 204-5. In his analysis, Carruthers AJ referred to criteria of good faith, relevance and pertinence, absence of wilful misuse of the occasion and material relationship to or nexus with the subject of public interest.

24 Senior counsel for the defendants submitted before us that Carruthers AJ had conflated the issues of malice (for the jury) and excess of occasion of privilege (for the judge). This error was said to be evidenced by references to a requirement that the defamatory statements must have been "fairly made" (see at [173]) or "fairly warranted" (see at [178]). I do not agree. In this portion of the judgment Carruthers AJ was merely summarising passages that he had set out in extenso earlier in the judgment (see at [59]-[91]). His critical findings appear in the passages set out below.

25 Carruthers AJ applied the general principles in the following terms. I shall underline the portions which the appellants submit betray errors of principle:

182. Reynolds if I may respectfully say so, is a helpful case (albeit it is not a binding authority) because their Lordships identified certain factors worthy of consideration when resolving an issue such as the present. I have set out earlier factors which the plaintiffs have identified as relevant in the subject case. Generally, I agree with that compilation. Particularly relevant for present purposes is that the charges contained in the instant imputations were levelled ex parte, with no forewarning of the attack and thus no prior opportunity of the plaintiffs meeting it beforehand. There was no evidence from the defendants of any steps taken to verify the charges made against the plaintiffs. The letter was vituperative in tone.

183 Despite the argument of the defendants to the contrary, I consider it relevant to take into consideration the serious nature of the attack which is made by the defendants in the publications upon the honesty of the plaintiffs' business methods in a field of activity in which they were both interested and potential competitors.

184 As the defendants have correctly pointed out, the law of qualified privilege is concerned with defamatory and untrue imputations. In this case defamatory and untrue imputations published without malice. This raises the question as to the degree of misstatement of fact which the law can tolerate. Of course this is wrapped up in the criteria which have been identified in the judgments to which I have just referred. However, if I may respectfully say so, it was extremely well expressed by Lord Hobhouse in Reynolds when his Lordship said that "Some degree of tolerance for factual inaccuracy has to be accepted; hence the need for a law of privilege."

185 With regard to the requirement of publication in good faith, the jury declared that the plaintiffs had failed to prove in relation to the three publications that the defendants did not believe in the truth of the matter they published or that the defendants had an indirect motive in publishing the matter.

...

191 I turn then to the first and third imputations upon the assumption (which I am prepared for present purposes to note) that the occasions of privilege posited by the defendants are available to them.

192 As to the first imputation, this imputation is entirely false. It is also, as the plaintiffs contend, irrational in that the plaintiffs did not sell to the publishers of ethnic community newspapers government advertising. Understandably, no attempt was made to justify this imputation nor was a defence of comment pursued with regard to it.

193 In my view its publication cannot possibly comply with the criteria set out in the authorities referred to above. This is so even if one gives full weight to the current community affirmation of the right to free speech and applies a generous, rather than a strict construction of the criteria.

194 The defendants could have quite readily and forcefully made their point about the alleged wastage and inefficiency of the use of alleged "middle men" such as the plaintiffs, without introducing a splenetic and false attack upon the commercial integrity of the plaintiffs. The imputations' irrationality and inaccuracy was incapable of serving the purpose of the occasion. It was not relevant or pertinent to the discharge of the duty or the exercise of the right or the safeguarding of the interest which was said to create the privileged occasion relied upon. It was an abuse of the occasion. It was beyond what was germane and reasonably appropriate to the occasion. It made no contribution to the discussion of the subject of public interest. Other similar criteria may readily be applied.

195 There is no need for me to repeat, by way of elaboration, the specific factors which I have referred to above by reference to the matters set out in the judgment of Lord Nicholls in Reynolds.

196 Although the third imputation may be thought to be not quite so serious an imputation as the first, it is only a matter of slight degree. Leaving aside the aspect of irrationality, it also fails to comply with the criteria referred to above so that the defence of qualified privilege could not extend to it.

26 As regards the Novosti publication, the nub of his Honour's reasoning was as follows:

199 It would seem to me that the average reader who would necessarily be conversant with the Serbian language of Novosti would have an interest in the efficient and cost effective communication of government advertising and information to the ethnic community of whom, no doubt, the vast majority could be said to belong. They would also be concerned with whether there had been any abuses by persons or organisations or government instrumentalities involved in that area of activity which resulted in the exacerbation of cost to them of receiving such information.

200 There is, for present purposes, a very relevant passage in the judgment of McHugh J in Stephens at 264-266 where his Honour said:

"In the last decade of the twentieth century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys. How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community. Information concerning the exercise of those functions and powers is of vital concern to the community. So is the performance of the public representatives and officials who are invested with them. It follows in my opinion that the general public has a legitimate interest in receiving information concerning matters relevant to the exercise of public functions and powers vested in public representatives and officials. Moreover, a narrow view should not be taken of the matters about which the general public has an interest in receiving information. With the increasing integration of the social, economic and political life of Australia, it is difficult to contend that the exercise or failure to exercise public functions or powers at any particular level of government or administration, or in any part of the country, is not of relevant interest to the public of Australia generally. If this legitimate interest of the public is to be properly served, it must also follow that on occasions persons with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties will have a corresponding duty or interest to communicate information concerning such functions, powers and performances to members of the general public. In Jenoure v Delmege [1891] AC 73 at p 77, Lord Macnaghten said that '[t]o protect those who are not able to protect themselves is a duty which everyone owes to society.'

Accordingly, it is now appropriate for the common law to declare that it is for 'the common convenience and welfare' of Australian society that the existing categories of qualified privilege be extended to protect communications made to the general public by persons with special knowledge concerning the exercise of public functions or powers or the performance of their duties by public representatives or officials invested with those functions and powers. The scientist who discovers that lack of governmental action is threatening the environment, the 'whistleblower' who observes the bureaucratic or ministerial 'cover up', and the investigative journalist who finds the grants of public money have been distributed contrary to the public interest are examples of persons who have special knowledge of matters affecting the exercise of public functions or powers or the performance of duties by public representatives or officials. If such persons, acting honestly, inform the general public of what they know about such matters, their publications will be made on an occasion of qualified privilege. The defence of qualified privilege will be available even if the information is subsequently proved to be incorrect. Thus, the occasion will still be privileged even if the 'whistleblower' mistakenly but honestly publishes information which defames another person or the scientist or journalist honestly overlooks some fact which undermines the thesis of his or her claim. The publication of erroneous information may be evidence of malice in some cases. But by itself an error in the published information will not destroy the occasion of privilege.

No doubt in some exceptional cases the information published may be so unrelated to the kind of powers or functions invested in the person defamed that a defence of qualified privilege could not be upheld. But, speaking generally, the occasion will be privileged whenever a person with the requisite special knowledge honestly publishes information about the functions or powers or the performance of duties by public representatives or officials for the purpose of informing the public about such matters. The officiousness of the person publishing the information can never be decisive against the existence of an occasion of qualified privilege, although it may be relevant in determining whether there was a duty to publish to the word at large cf. Greenlands Ltd v Wilmshurst and the London Association for Protection of Trade [1913] 3 KB 507, at p.535."

201 In a real sense Mr Skalkos could be categorised as a person with special knowledge of matters affecting the exercise of the communication of government advertising and information to the ethnic community. I would consider therefore that the communication of appropriate information to the readers of Novosti would fall within the category of qualified privilege identified by McHugh J.

202 However, McHugh J is insistent that the publisher in such circumstances must publish the relevant information honestly. Further, the occasion of privilege is not disturbed if the publisher overlooks some fact which undermines the thesis of his or her claim. Thus, by itself, an error in the published information will not destroy the occasion of privilege. However, accepting that there was this occasion of privilege available to the defendants, they have, in my assessment, abused the occasion by the publication of the first and third imputations for the very reasons which I have expressed in relation to the publication to the Prime Minister and Telecom and its specified officers.

203 The publications of those imputations could not be categorised as an honest mistake or an honest overlooking of some fact which undermines the thesis of the defendants' claim.

204 In consideration of qualified privilege I allow, of course, for the fact that the plaintiffs failed to prove malice in respect of the publications.

205 I would therefore reject the defence of common law privilege in relation to the publication of the letter to the Prime Minister, Telecom and the specified officers as well as the publication in Novosti. I am so firmly of the view that the subject imputations abused the occasion of privilege posited by the defendants, that no further consideration of the competing arguments is, in my view, necessary.

27 In my view, these passages show Carruthers AJ treating fairness, appropriateness, rationality and accuracy as relevant, but not determinative factors; and as recognising that the jury's decision on absence of malice did not remove the need for the Judge to determine whether the defamatory imputations were published within the occasion of privilege. In proceeding this way his Honour did not err.

28 It is well established that an occasion of privilege can be abused by the publication of additional matter that is "extraneous" (Adam at 318 per Lord Finlay LC) or "beyond what was germane and reasonably appropriate to the occasion" (ibid at 321 per Earl Loreburn). The defendants' bona fide belief as to relevance will not be sufficient (ibid at 334 per Lord Atkinson). In Bellino, Dawson, McHugh and Gummow JJ said at 228:

It is true that, at common law, privilege only attaches to those defamatory imputations that are relevant to the privileged occasion. Where a potentially privileged communication consists partly of matters relevant to the privilege and partly of matters that are not relevant, qualified privilege only attaches to that part which is relevant to the occasion. Moreover, the inclusion of the irrelevant part in the communication affords evidence of malice and can destroy the privilege attaching the relevant part.

See also per Brennan CJ at 201-204.

29 The passage quoted from Bellino demonstrates that there is overlap between matters going to the question of malice and matters going to the question whether the publication complained of was within the protection of a claimed occasion of privilege.

30 The appellants submit that Carruthers AJ treated matters going to malice as potentially determinative of whether the publication was on a privileged occasion. They refer to passages at [173], [174] and [176] in which his Honour summarised passages earlier set out in the judgment from Stevens, Mowlds and Hunt. As already indicated, it is my view that this criticism is unwarranted. In the paragraphs referred to, his Honour was offering compendious summations of passages set out in extenso earlier in the judgment. It is true that the summations touched upon matters pertinent to the respective roles of judge and jury in the context of qualified privilege. But those passages plainly recognised the relevant distinctions. More importantly, the distinctions were expressly adverted to in his Honour's reasoning explaining why he was satisfied that, notwithstanding the jury's verdict, the defamatory imputations were not pertinent to the occasion of privilege.

31 It is true that his Honour regarded the vituperative tone of the letter as relevant to the issue which he had to decide, but I see no error in this.

32 In their written submissions the appellants argued that the imputations were intimately connected with, indeed part of, the privileged occasion. They contended that:

(a) the imputations do not derive from discreet parts of the matter published; rather they are inferences drawn from the publications as a whole. The plaintiffs' particulars had emphasised this very fact (Red 3T - V);

(b) it is very difficult to identify any reason why the first and third imputations were not part of the occasion of privilege. They relate to each of the matters identified by the Judge as giving rise to the privileged occasion.

33 The appellants also challenge the primary judge's reference to the "irrationality and inaccuracy" of the imputations as matters going to the issue whether they were an abuse of the occasion of privilege (at [194]. See also the reference to irrationality at [192].) The appellants cite authoritative statements to the effect that lack of reasonableness or logicality do not in themselves give rise to loss of the privilege (Lange at 573, Horrocks v Lowe [1975] AC 135 at 151E). These statements do not, however, establish the converse proposition that a finding of irrationality is irrelevant to the judicial function of determining whether the occasion of privilege was abused.

34 The appellants submit that the judge's reliance upon passages in the House of Lords decision in Reynolds (see pars 23-25 above) overlooked the fact that Australian law has struck out in a different direction in Stephens and Lange (see generally John Fairfax & Sons Ltd v Vilo [2001] NSWCA 290). In my view this criticism fails to observe that Carruthers AJ was seeking to draw only limited and analogous support from the particular passage in Reynolds ([2001] AC at 304-5, set out by Carruthers AJ at [88]) in which Lord Nicholls suggested a non-exhaustive check list of factors appropriate to be taken into account in determining when a publication would attract qualified privilege. Carruthers AJ expressly noted that Reynolds was a non-binding case that was helpful "because their Lordships identified certain factors worthy of consideration". It is somewhat unclear as to what use those factors were put by the primary judge but I am persuaded that the references to Reynolds did not set his Honour off on a false trail. The conclusory findings have been set out.

35 A significant part of the appellants' attack seemed to treat his Honour's conclusions on the issue of qualified privilege at common law as if they were the exercise of a discretion susceptible to challenge in accordance with the principles in House v The King [1936] HCA 40; (1936) 55 CLR 499. But his Honour was not involved in a discretionary ruling. Rather, he was evaluating the imputations in light of the letter as a whole and the privileged occasions under which it was published. It follows that the appellants' task is to persuade this Court, as on an appeal by way of rehearing, that Carruthers AJ erred in his conclusion that the occasion of privilege was abused. The appellants accepted this (CA Tr p9). I am not persuaded of error.

36 The appellants submit that the underlined portions of the passages set out above indicate that Carruthers AJ misunderstood and misapplied the remarks of McHugh J in Stephens. McHugh J's observations concerning "honesty" were directed to the need for absence of malice. The primary judge is said to have erred when he regarded the irrationality, inaccuracy and dishonesty of the defendants in making the unjustified imputations as matters going to the issue of abuse of the occasion of privilege.

37 The appellants placed emphasis on the fact that the publications were archetypal cases attracting qualified privilege. The letter to the Prime Minister dealt with government administration, the expenditure of public money and the effectiveness of government communications in reaching groups to whom they were directed. The Novosti publication was directed to one of the ethnic groups concerned and it dealt with matters in which that group had an obvious particular interest. So far as the on-publications to Telecom officers were concerned, Telecom was a governmental body which was involved in communications to the ethnic communities.

38 These matters may readily be accepted. However, they merely provide the backdrop to the present issue, which is whether the offending imputations amounted to an abuse of the occasion of privilege in the various ways in which such abuse is formulated in the case law. All relevant circumstances attending the publication need to be considered on the issue of abuse of privilege (see London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 at 23).

39 In emphasising the inaccuracy of the imputations, the primary judge is said to have overlooked the fact that privilege may be attracted even though a publication contains untrue defamatory statements (Stephens at 260). I do not agree.

40 In the seminal case of Adam v Ward, characterisation of matter as extraneous and irrelevant was seen as directly pertinent to the issue whether the communication in question was made upon the privileged occasion (see at 318, 327, 320-21, 328-9, 339-40, 348 and see generally Gatley on Libel and Slander 9th ed par 14.59). In his summation of the law in this area in Mowlds v Fergusson (1939) 40 SR(NSW) 311 Jordan CJ said (at 318):

If anyone complains that the communication defames him, the burden of proof lies on the complainant to establish either that the defamatory matter was irrelevant to the purposes of the occasion or else that it was made in order to serve some other purpose than the purposes warranted by the occasion.

41 See also McLean v David Syme & Co Ltd (1970) 72 SR(NSW) 513 at 530 per Mason and Manning JJA, Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 200-1 per Gaudron J, Liquor Marketing Group v Sadler [2000] NSWCA 161 at [56].

42 The grossness of the falsity of the publication is pertinent to this issue of relevance. The defendants' particulars asserted that "members of the public had an interest in knowing the facts and matters stated" in the letter. This alone makes the factual accuracy of the matters stated relevant to the issue of abuse of the occasion of privilege. And clearly established dishonesty is in turn capable of casting light on this inquiry. To describe an allegation as a "splenetic and false attack" (at [194]) is really just a colourful way of emphasising the extraneity of the particular defamatory imputations to the professed context of the letter. The jury's rejection of malice did not pre-empt the judge from concluding, in the particular case, that the privileged occasion was abused (see Guise v Kouvelis [1947] HCA 13; (1947) 74 CLR 102 at 117, Bellino at 200-1).

43 Carruthers AJ did not fall into the error of seeing every excessive statement as an abuse of the occasion of privilege (cf Adam at 328) nor did he regard the "splenetic" vigour of the imputations as sufficient in itself to forfeit the privilege. The statements at the commencement of par [194] were introductory yet pertinent to the conclusions stated in traditional terms at the conclusion of that paragraph of the judgment. Likewise par [202]. His Honour also recognised expressly that the untruthfulness of the imputations was not determinative (see at [184]) and that error in itself did not destroy the occasion of privilege (see at [202]).

44 The plaintiffs also challenge the trial judge's conclusion that Mr Skalkos could be categorised as a person with "special knowledge" of the matters of which he complained (at [201]). This finding was made in the context of reference to a lengthy passage from the judgment of McHugh J in Stephens (at 264-266) which is set out above. I think that there is force in this submission, particularly since no evidence was given by Mr Skalkos on this (or any other) topic. To the extent that Mr Skalkos was "out of his league", the finding that the false and defamatory imputation was outside the available scope of any privilege is even more sustainable.

45 By notice of contention the plaintiffs submit that Carruthers AJ erred in holding that the defendants were entitled to rely on the complaint/redress head of the defence of qualified privilege in respect of the letter to the Prime Minister. The primary judge's remarks (at [172]) suggesting that the issue was addressed inter alia on the basis that Mr Skalkos was a complainant seeking redress for grievance from a person in authority (the Prime Minister) were said to have overlooked the manner in which the case had been fought at trial. When the defendants obtained leave to amend their particulars of qualified privilege at common law there was an express disclaimer of reliance on the complaint/redress of grievance species of qualified privilege (see the passage set out in the first instance judgment at [96]).

46 I would uphold the plaintiffs' objection. But I cannot see that it goes very far because there was an undoubted occasion of privilege as stated in par 18 above. The real issue is whether the judge erred in concluding that the defamatory imputations were not published within that occasion of privilege.

47 The plaintiffs further contend that the defendants were not entitled to rely on the defence of qualified privilege in respect of publication (or re-publication) of the letter to Telecom or its officers. When the particulars were amended in relation to qualified privilege at common law, senior counsel for the defendants agreed that the amendment "does not cover publication to Telecom" (Red 336). In their answers to questions 29(b) and 30(b) the jury found that the defendants were liable for the re-publication of the letter to three Telecom officers. The plaintiffs therefore submit that there is no defence of common law qualified privilege covering those re-publications. I would doubt this submission, which has the effect of merging publication and re-publication. However, it is unnecessary to reach a concluded view on the point.

Rejection of statutory qualified privilege defence

48 The defence of statutory qualified privilege (Defamation Act, s 22) was confined to the Novosti publication. The primary judge was satisfied as to s 22 (1) (a) and (b), but held that the defendants had failed to establish the requirements of par (c) that the conduct of the publisher in publishing the matter was reasonable in the circumstances. The defendants had pleaded that their conduct was reasonable because they believed what they published to be true and took care that the information contained in the matter complained of was accurate.

49 The judge referred to the leading cases discussing the issue of reasonableness in this context (Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354, Morgan v John Fairfax & Sons Ltd (1990) 20 NSWLR 511 (Morgan), Morgan v John Fairfax & Sons Ltd (No 2) (1991) 23 NSWLR 374 (Morgan No 2), Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448, Barbaro v Amalgamated Television Services Pty Ltd (1989) Aust Tort Rep ¶80-264). Citing Radio 2UE, he held that the subject imputations were "serious and damaging criticisms" as that phrase was used in Austin. Since the charges were deliberately made, those questions which arise where a defendant had reasonably intended that a different meaning be given to his or her language did not arise.

50 His Honour held that this was the case where the charges could not be regarded as having been reasonably made unless the defendants (for present purposes Mr Skalkos) honestly believed in their truth. The judge ruled that the jury's answers declaring that the plaintiffs had not proved malice could not constitute a finding that the defendants honestly believed in the truth of the subject imputations. He held that the defendants had failed to establish the question of honest belief in the truth of the imputations because Mr Skalkos had given no evidence on this issue and because evidence given by a Mr Harvey to the effect that he had no doubt as to Mr Skalkos' sincerity (Black 518) carried little weight in a matter on which the defendants bore the onus (judgment [239]). The judge gave a second reason for rejecting the defence. He said (at [240]):

Adverting to the matters identified by Hunt AJA in Morgan [No 2] cited above, it is clear, in my view that the defendants have failed to establish:

* that they exercised reasonable care to ensure that they got their conclusions right by making proper enquiries. In fact there is no evidence that they took any steps to establish the truth of the subject imputations.

* that the subject imputations were relevant to the subject about which they were giving information to the readers of Novosti. The serious and damaging false criticisms contained in the subject imputations could have no relevance to that subject matter. In my view, the defendants have wholly failed to discharge the burden of establishing the reasonableness of their conduct as required by paragraph (c). This defence must therefore be rejected.

51 The appellants submit that the trial judge's approach was erroneous in three respects. They submit that

(i) s22 (1) (c) does not require proof of honest belief on the part of the publisher;

(ii) there was evidence which, when taken with the jury's answers declaring that the plaintiffs had not proved malice, supported the view that the publications were made with an honest belief;

(iii) the imputations were part of the subject about which the information was being given to Novosti readers.

52 It was further submitted that the primary judge did not correctly apply s22 (1) (c) to the facts. The ultimate question was whether it was reasonable to publish the matter in the circumstances. The matter was ex hypothesi defamatory and untrue. In the particular case, merely because the author expressed views which were strong and particular in dealing with topics which could properly be dealt with in the article did not prevent the conduct in so publishing it being reasonable.

53 The plaintiffs submit that the defence must fail because:

(i) There was no evidence that the defendants discharged the onus of proving that they believed in the truth of any of the defamatory imputations found by the jury to have been conveyed. The defendants had to establish their honest belief in the truth of the imputations (Morgan at 541-2) and they made no attempt to do so. Mr Skalkos was not called as a witness.

(ii) There was no evidence that before publication the defendants took any steps to establish the truth of the published imputations.

(iii) The gravity of the defamatory imputations was such as to make the defendants' conduct in publishing them unreasonable in the circumstances.

These submissions effectively adopt the primary judge's reasoning.

54 In my view Carruthers AJ was correct to reject this defence for the reasons he gave.

Inconsistency in the jury's answers

55 Questions 33, 34, 37 and 38 were identical in form and in the structure of the document containing them. Each related to the defence of comment pleaded with respect to the imputation that the plaintiffs conducted their business "in such an unethical manner as to cause ethnic communities to be deprived of essential government information". It is sufficient to set out question 33 in the form that it was placed before the jury.

COMMENT

LETTER TO THE PRIME MINISTER

Question 33 If you answered Yes to questions 9 and 10 in respect of the following imputation:

"The first defendant conducts the business of Ethnic Communications Pty Ltd in such an unethical manner as to cause ethnic communities to be deprived of essential government information"

have the Defendants established:

(a) that the imputation would have been understood by the ordinary reasonable reader as an expression of opinion and not a statement of fact? YES/NO

AND

(b)(i) that the opinion was based upon proper material for comment? YES/NO

OR

(b)(ii) that the material upon which the opinion was based was to some extent proper material for comment?

YES/NO

and

that the comment represents an opinion which might reasonably be based on that material to the extent to which it is proper material for comment? YES/NO

If Yes to 33(a) and either 33(b)(i) or 33(b)(ii), go to Question 33(c).

(c) Have the Plaintiffs established that, at the time the letter to the Prime Minister was published, the Defendants did not hold the opinion that

"The First Plaintiff conducts the business of Ethnic Communications Pty Ltd in such an unethical manner as to cause ethnic communities to be deprived of essential government information".

YES/NO

If No to 33(c), you must find for the Defendants in respect of the imputation set out in this question.

The document that went to the jury had boxes around portions of this material. For example, both arms of (b)(ii) were contained in a single box.

56 The jury answered "No" to question 33(a); did not answer question 33(b)(i); gave a compendious "Yes" answer to question 33(b)(ii); and did not answer question 33(c). Likewise with their answers to questions 34, 37 and 38.

57 Carruthers AJ was authorised to enter such verdict and judgment as flowed in law from the answers given by the jury to the specific questions put to them (McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50 at 56).

58 The defendants submit that there is an underlying inconsistency between the answer to (a) and the answer to (b)(ii). Inherent in the answer to (a) was the notion that the appellants had not shown that the imputation would be understood by the ordinary reasonable reader as an expression of opinion. Inherent in the answer to (b)(ii) was the view that they had shown that there was a comment and that it represented an opinion.

59 The learned trial judge held (at [338]-[339]) that the answer to (b)(ii) should be treated as surplusage. The arguments are set out at [241]-[337] in the judgment. Carruthers AJ concluded that he was comfortably satisfied that the jury clearly intended to hold that the defendants had not established that the imputation would have been understood by the ordinary reasonable reader as an expression of opinion and not a statement of facts. He considered that the form of the template led the jury to believe erroneously that they had to do the best they could to answer either question (b)(i) or (b)(ii), notwithstanding instructions in the summing up not to proceed to (b) unless the jury answered "Yes" to (a).

60 No one disputes that the agreed document ("template") could have been expressed more clearly either by the use of "AND IF" instead of "AND" between (a) and (b) or by written instruction not to proceed further if (a) was answered "No".

61 The possibility of a problem arising out of an arguable inconsistency in the jury's answers emerged as the answers were being given by the foreman. The foreman confirmed that "No" was the answer to question (a) (Tr 1836-8). Senior counsel for the plaintiff at trial requested the judge not to discharge the jury. In the absence of the jury there was a brief discussion which I shall set out:

HUGHES: The problem that we see arises your Honour in relation to question 33. It arises in this way. They have said, by answering nothing to the question in the (a) box, they have said that the imputation would not have been understood by the ordinary reasonable reader as an expression of opinion and not a statement of fact. That really meant that it was unnecessary to go to the underlying boxes because they are formulated on the basis that there has been a yes answer to 33(a).

HIS HONOUR: We all understand that, but the question is where does it take us? I think all we can do at this stage is to - all the answers have been recorded. There was one other thing that just passed through my mind the non answering of the (c) question.

HUGHES: The non answering of all the (c) questions is congruent with the no answer to the (a) question.

HIS HONOUR: That wasn't what I was thinking of. It was something else I was thinking of, but never mind, they didn't answer it.

HUGHES: Because they have answered 33(a) "no" they don't have to go to 33(c)?

HIS HONOUR: That's what they have obviously done, without expressing a concluded view on it, they read what was at the bottom of the page there and what they seem to have done, and again I don't have a concluded view on this for one moment, but they seem to have felt that they had to answer (b)(ii) even though they had answered no to (a).

LITTLEMORE: The question doesn't tell them not to unfortunately. The line at the bottom only tells them not to on the next page. That's the problem, that's why we have got an inconsistent verdict, or we haven't got a verdict, we've got answers.

HUGHES: In my submission it would be appropriate to recall the jury with a view to clearing up the inconsistency because if their answer to 33(a) is no, then that's an end to the comment that the defence answered that imputation.

HIS HONOUR: I don't think I can interrogate them, so it seems to me to turn into a legal matter issue. As they have answered 33(a) no, the answer to 33(b)(ii) is irrelevant. That would be the argument, wouldn't it?

HUGHES: Your Honour I put my submission. We say that if your Honour is not minded to clear up the problem the dominant answer is 33(a) and its corresponding answers.

HIS HONOUR: That, if I may respectfully say so, must be obviously be your approach. What approach Mr Littlemore will take I don't know. But the one thing of I would be fearful of doing would be of questioning the jury as to how they reached this situation. They have answered or not answered the questions, and that's something to be sorted out afterwards in legal argument. If I call them back and start to question them about it, I am entering forbidden territory.

62 Carruthers AJ explained the factors which had influenced him to discharge the jury without interrogating them further as to what lay behind the arguably inconsistent answers that they had given. His Honour was conscious of the High Court's injunction of caution in Mourani v Jeldi Manufacturing Pty Ltd (1983) 57 ALJR 825. He reasoned that the jury had obviously overlooked his direction that they were not to proceed further in the comment questions if (a) was answered "No". In his Honour's view, this was not surprising bearing in mind the complexity of the matters that the jury had to consider in providing answers to the long list of questions. The agreed template for the comment questions was regrettably deficient in not including the direction to proceed no further if question (a) were answered in the negative and this had led the jury to the misapprehension that they must answer either (b)(i) or (b)(ii) despite the negative answer to (a). Carruthers AJ continued:

286 The fact that the jury did not answer question (c) seemed to me to emphasise the predominance of the conclusion that the relevant imputation would not have been understood by the ordinary reasonable reader to be an expression of opinion.

287 By contrast when the jury was dealing with the fourth imputation the jury answered question (c) in the negative, having declared that the fourth imputation would have been understood by the ordinary reasonable reader as an expression of opinion by answering question (a) in the affirmative and (b)(ii) in the affirmative.

63 The written submissions exchanged by the parties suggested that it was common ground that the issue to be determined is whether this Court is persuaded that the jury's answers are necessarily inconsistent in the sense that they cannot logically stand together (Brancato v Australian Telecommunications Commission (1986) 7 NSWLR 30 at 32, MacKenzie v The Queen [1996] HCA 35; (1996) 190 CLR 348 at 366-9). During his submissions in reply senior counsel for the defendants drew our attention to the remarks of Clarke JA (with whose reasons Gleeson CJ and Handley JA agreed) in Dempster v Coates, Court of Appeal, unreported, 11 April 1990 at pp9-10. Reference to these remarks at trial might perhaps have persuaded Carruthers AJ that it was appropriate to press the jury to clarify its intent. Be that as it may, I do not read the case as negating the test as to appellate review that I have summarised at the start of this paragraph.

64 The defendants place considerable reliance upon the statement by Carruthers AJ when he agreed with senior counsel for the defendants that an answer to question (b)(ii) could not be taken to be subordinate to an answer to question (a) in the same sense as a rider may be taken to be subordinate to a general verdict. Of course, Carruthers AJ was not faced with a general verdict, nor are we. It was a matter of interpreting the findings lying behind and represented by the jury's answers to the questions (see Otis Elevators Pty Ltd v Zitis (1986) 5 NSWLR 171 at 204 per McHugh JA). That issue is to be determined in the context of the form or "template" in which the questions went to the jury, also having regard to any pertinent directions given to the jury. I do not read his Honour's remarks distinguishing the present situation from that of a rider to a general verdict as precluding this task of contextual interpretation. Neither did Carruthers AJ who proceeded immediately to state the following principles at [333]:

Applying the principles to be gleaned from the cases I think the following principles could safely be applied to the instant case:

(1) The appropriate question is whether there exists a necessary inconsistency.

(2) There is a traditional reluctance to accept that jury's findings are vitiated by inconsistency.

(3) It is open to a trial judge in an appropriate case, to draw his or her own conclusions as to the jury's reasoning process in answering a question apparently inconsistent with an earlier answer.

(4) If inconsistent answers on the public record are perverse or constitute (inter alia) an affront to logic and commonsense which is unacceptable, then the answers should not be allowed to stand.

(5) At the end of the day, it all depends on the facts of the case. "There are no hard and fast rules" (MacKenzie at 368).

65 I do not understand the defendants to challenge the correctness of these principles and I respectfully agree with them.

66 Carruthers AJ said (at [337]):

Factors which militated against the exercise of this restricted discretion in the instant case could be summarised as follows:

(1) It was manifestly apparent that the jury had, understandably overlooked the direction given at paragraph 343 of the summing up set out earlier.

(2) This was compounded by the absence of an exhortation in the template not to proceed further if question (a) were answered no, together with the conjunction AND between the upper box and the two lower boxes.

(3) There is a possible explanation, I think, for the jury's affirmative answer to (b)(ii), despite the negative answer to (a), namely, the absence in (b)(ii) to the reference of "the ordinary reasonable reader".

(4) Of paramount importance is the fact that the foreman affirmed without qualification (and this is common ground) that the jury's answer to question 33(a) was No. It would in these circumstances be extraordinarily difficult to conclude that by their answer to (b)(ii) the jury intended to neutralise the negative answer to (a).

(5) In resolving this particular issue one can call upon a consistent commitment by the subject jury during the trial to the proper discharge of their duty which included the answers overall to the numerous questions which were submitted to them. No question of "plain perversity", arises.

67 This was a case where the defendants agreed to the questions going to the jury in a form which could (with the benefit of hindsight) have been more clearly expressed. And the defendants did not and do not complain about the direction given to the jury that, in the event of a negative answer to (a), they should not proceed to (b) or the following paragraphs. In all of the circumstances, the conclusion that (b) and following were subordinate to (a) was clearly open and his Honour was, in my view, correct in his interpretation of the findings represented by the jury's answers. It was also open to his Honour to draw confirmation from the foreman's unqualified affirmation that the jury's answer to question 33(a) was "No". I therefore agree with his Honour that in these circumstances it would be extraordinarily difficult to conclude that by their answer to (b)(ii) the jury intended to neutralise the negative answer to (a). I would add that a negative answer to (a) was repeated in the parallel answers to questions 34, 37 and 38. In my view, the jury answered (b)(ii) because they overlooked the oral direction and because they thought they had to do so as best they could, but without intending to derogate from their primary answer to (a). I am not persuaded that there was a miscarriage of justice necessitating a new trial. It is unnecessary to consider the possible relevance of the failure by the defendants' counsel at trial to press the judge to interrogate the jury on this issue before they were discharged.

68 In the circumstances, it is also unnecessary to consider the defendants' contention point that the defence of comment in relation to the third imputations should not have been left to the jury.

Withdrawal of s13 defence from jury

69 Section 13 of the Defamation Act 1974 provides that:

It is a defence that the circumstances of the publication of the matter complained of were such that the person defamed was not likely to suffer harm.

70 This defence was invoked by the defendants with regard to both publications. The trial judge held that it was not available. The defendants appeal in relation to the letter.

71 In his reasons delivered on 7 December 1999 (Assaf v Skalkos [1999] NSWSC 1332) Carruthers AJ referred to the leading authorities, Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749, Chappell v Mirror Newspapers Ltd (1984) Aust Torts R ¶80-691 and King & Mergen Holdings Pty Ltd v McKenzie (1991) 24 NSWLR 305.

72 The defendants had submitted that the circumstances of the publication of the letter supported the s13 defence because:

(a) publication of the letter was to a limited number of persons, in particular only one within the Prime Minister's Office, the addressee of the letter;

(b) this was not a grapevine case, and the Court is necessarily limited to the publication that the plaintiffs have proved;

(c) the only person who gave evidence of receipt of the letter in the Prime Minister's office, Anne de Salis, gave no credence to it and destroyed it (T.330);

(d) publication to officers in Telecom at Melbourne, if proven by the plaintiffs, was limited to Mr Harvey, Ms Hall and Ms Mitchell, all persons who were acquainted with the plaintiffs and were able to make their own judgments of their own knowledge regarding the substance of the matter complained of;

(e) the "circumstances of the publication" is a reference to the actual publication, and not the intended publication; and

(f) any evidence of harm suffered by the plaintiff could not be taken into account.

73 Carruthers AJ pointed out that the test identified by Mahoney JA in King & Mergen Holdings (at 309) was that the defendant bore the significant burden of negativing not merely that there would be great or substantial harm but that there be "harm" at all. Carruthers AJ concluded that s13 was not available to the defendants when one took into account the extent of the actual publication. He said (at 63-4):

The publication, firstly to the Prime Minister's Office, the highest political office within the country and concerned with ethnic matters and the ethnic media, could only be considered, in my view as a matter of much significance and propensity to cause harm to the plaintiffs.

In no sense at all, in my view, could that publication fall within the concept of triviality, or the triviality defence as it is sometimes called, as explained in the cases.

74 In this Court the defendants submit that the jury might have taken the view that the circumstances of the publication were such as to be not likely to cause harm to the plaintiffs. It was submitted that the judge erred in taking the issue away from the jury.

75 In my view the trial judge did not err. The plaintiffs were widely known in government circles. They worked for a number of government departments. The letter was discussed by senior officers of the Office of the Prime Minister and the Office of Multicultural Affairs (Black 346-347). The tone and substance of the letter was obviously capable of harming the plaintiffs in their standing with agencies of the Federal Government. It was intended by the defendants to be treated seriously and it does not lie well in their mouths now to suggest that any reader in the office of the Prime Minister would have consigned the letter to the waste paper basket without reflecting adversely on the plaintiffs.

76 There was also evidence of publication to Telecom officers at Melbourne and its impact on them (see esp Black 534, 629). If the jury accepted that evidence (as they were clearly entitled to do) this was further material showing the harmful capacity of the matter complained of. At the date of publication of the letter to Telecom the relationship between the plaintiffs and Telecom was in a nascent stage. The plaintiffs were negotiating to produce advertising campaigns to multicultural communities and, as the plaintiffs submit, the publication of the letter could not have come at a worse time for them.

77 In the upshot there was ample evidence of circumstances giving rise to a likelihood of harm and there was no evidence to the contrary. The conclusion that there was no basis on which the jury could find "unlikelihood of harm" was clearly correct.

Adequacy of summing up

78 The defendants submit that the summing up on the issue of contextual truth was too compendious, and failed fairly to reflect or explain the case presented at trial by the defendants.

79 The summing up on the issue (pars [198]-[292]) commenced by reminding the jury that this had been the most extensive area to which evidence had been directed in the case and that counsel had addressed "with great care and detail". The substantial issue was whether the defendants had established to be substantially true that the plaintiffs were lining their pockets with tax payers' money.

80 The trial judge reminded the jury of the names of the witnesses called for each side on the issue. Considerable evidence had been given by Mr Assaf and it had been challenged extensively in cross-examination and in the addresses of senior counsel.

81 The jury were reminded of these matters without setting out the detail. More than once the learned trial judge stated that he did not intend to go through the detail of the evidence and the challenges to it in light of the fact that counsel had addressed on it in extenso (as they had: see Black 1663ff, 1815ff).

82 At the end of the summing up counsel for the defendants challenged its adequacy. There was a written submission entitled "Directions Sought" which relevantly stated (in par 4):

4. It is respectfully submitted that your Honour's summary of the "battle lines" between the parties was too compendious fairly to reflect the Defendants' position, and should include the essential "battle line" - ie that the line on excessive profit should be drawn at 50% as Mr Assaf conceded.

Further, while your Honour summarised the evidence of Messrs Rutledge and Harvey and Misses Hall, Mitchell and Fairman on the reasonability of the Plaintiffs' charges, your Honour did not summarise the evidence of Mr Prowse, Dr Craig-Lees or Mr Hawker.

Still further, the "battle lines" summary must fairly include reference to the significance of the Defendants' case of the attack on Mr Assaf's credit. Your Honour directed the jury as to credit issues affecting the evidence of the Telecom witnesses and Mr Hawker, and the Plaintiffs' attack on Mr Prowse and Dr Craig-Lees; but no reference to the issues involving the credit of the First Plaintiff.

83 In the course of submissions on the topic his Honour said (Red 276):

... This jury has listened to days and days of arguments. You [Mr Littlemore] and Mr Hughes went through all of this in such detail, to try and summarise that in a fashion which would be fair to both of you, particularly bearing in mind that there is only so much that a jury can stand, and in an attempt which is, very difficult for a judge to summarise without any particular - even perceived bias one way.

His Honour declined to give further directions on the topic.

84 Before us the appellants accept that the judge was not obliged to go through every piece of the evidence. Nevertheless they maintain the submission that the judge should have done more to relate the evidence to the issues before the jury.

85 It is a matter of impression, derived from considering the summing up in the context of the particular trial. Obviously there is power to direct a new trial, but this is an area where the trial judge is in a position of distinct advantage, having heard the evidence and the submissions of counsel. A strong case must be established before a new trial will be granted on this ground (Bugg v Day [1949] HCA 59; (1949) 79 CLR 442 at 546). A trial judge is not bound to comment upon all the facts nor to stress again the comments which have been made by counsel in addresses to the jury (Schulmann v Peters [1961] ALR 209 at 213-4). The issues were left fairly to the jury. Any failure to give more detailed attention to the defendants' expert evidence occasioned no substantial wrong or miscarriage warranting a new trial.

86 In my view the appeal should be dismissed with costs. I would not accede to the respondents' request for indemnity costs to the extent that it is based upon pressing an unarguable case (cf Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242). If, however, indemnity costs are sought on the basis of some unaccepted settlement offer, the parties may apply within 28 days (see CA Tr pp100-1).

87 I propose the following orders:

1. Appeal dismissed with costs.

2. Liberty to apply within 28 days if some special costs order is sought.

88 GILES JA: I have had the benefit of reading the reasons of Mason P in draft. His Honour sets out the letter and the article and describes the circumstances of their publication; he recounts the findings of the jury and the decisions of Carruthers AJ; and he identifies the issues in the appeal. I will not repeat those matters, and will draw upon his Honour's reasons in what follows.

89 I go to the issues in the order in which they arose in the proceedings.

Section 13 defence

90 As to each of the imputations on which the plaintiffs relied the defendants pleaded, pursuant to s 13 of the Defamation Act 1974, that the circumstances of the publication of the matter complained of were such that the plaintiffs were unlikely to suffer harm. Carruthers AJ ruled that the defence should not go to the jury, holding that the circumstances of publication were such that it could not be said that the plaintiffs were not likely to suffer harm. The issue on appeal was whether his Honour was correct in so ruling in relation to the letter.

91 For the reasons given by Mason P, the ruling was plainly correct. I do not wish to add anything to what his Honour has said.

Comment

92 In relation to each of the imputations the defendants pleaded the defence of comment. Carruthers AJ ruled that the defence should not go to the jury in relation to some of the imputations, but should go to the jury in relation to other of the imputations. The issue on appeal was whether the ruling was correct in relation to the third imputation conveyed by the letter.

93 The defence of comment in relation to this imputation did not avail the defendants unless the jury found that the imputation would have been understood by the ordinary reasonable reader as an expression of opinion and not a statement of fact. The jury found otherwise in their answer to question 33(a). Unless that answer be struck down because of inconsistency with the answer to question 33(b)(ii), see later in these reasons, any error in allowing the defence to go to the jury is of no consequence. As later stated, the answer stands. Accordingly, it is not necessary to consider this issue.

Adequacy of the summing-up

94 The defendants pleaded a number of contextual imputations. Sufficiently for present purposes, they said that if the imputations on which the plaintiffs relied were conveyed and were defamatory, the letter and the article conveyed other imputations reflecting adversely on the plaintiffs; that the other imputations were substantially true; that the plaintiffs' reputations were injured because of the other (true) imputations; that the plaintiffs' reputations were not further injured by the imputations on which they relied; and so that the plaintiffs should not have any damages.

95 The pleaded contextual imputations were extensive, but at the trial they came down to one in relation to the letter and one in relation to the article. The contextual imputation in relation to the letter was that it conveyed that the plaintiffs were lining their pockets with taxpayers' money for doing very little. The contextual imputation in relation to the article was that the plaintiffs were taking money from the taxpayers in a "rort" and giving little in return. The questions to the jury asked whether the letter and the article conveyed the respective imputations and whether each was substantially true. The jury answered yes as to conveying the imputations and no as to substantial truth.

96 The issue on appeal was whether the summing-up in relation to the substantial truth of these contextual imputations was inadequate.

97 After directing the jury as to the way contextual imputations operated, Carruthers AJ said that the jury would first have to resolve whether the contextual imputations were conveyed. After briefly dealing with that, his Honour then said -

"Now assuming that you find these contextual imputations to be conveyed. That takes us to the question of whether the imputations were substantially true. Now this was a very, very extensive, unquestionably you might think, the most extensive area to which evidence was directed in this case. Because it was to this particular question that the evidence of alleged overcharging and unreasonable profits and the like was addressed.

You have been addressed with great care and detail by both counsel in relation to that particular material. I think the most I could do to help you in that regard is to suggest that these are the battle lines on this question as to whether the defendants have established to be substantially true that the plaintiffs were lining their pockets with taxpayer's money, and that the plaintiffs were taking money from the taxpayers in a rort and giving little in return.

Fundamentally of course, the defendants rely upon the expert evidence of Mr Prowse, the expert evidence of Dr Craig-Lees and the evidence of Mr Hawker. But they call in aid there much of the documentary material, and what they contend was material adduced from the cross-examination of Mr Assaf, to suggest that when his evidence is examined he cannot justify the charges that were rendered in these various invoices to the government departments or the advertising body, which had been the subject of such close analysis and scrutiny by Dr Craig-Lees and Mr Prowse.

Now right at the outset of his address, Mr Littlemore took you in the most detailed way to what he contends were the inadequacies of Mr Assaf's evidence, of his explanations of what work went into particular jobs, and the appropriateness, or otherwise, of the ultimate charges. I can't go through all that again.

So there you have got in the most brief and succinct fashion the defendants' side of the equation. As against that there is the plaintiffs' side of the equation - the plaintiffs contending that Mr Assaf is to be relied on as a credible witness; that his explanation as to the absence of records was fair, particularly bearing in mind that this plea was filed in May 1999.

Then he relies on the evidence of Mr Rutledge, Mr Elliot, Mr Jennings, Miss Mitchell and Miss Fairman. And he addressed you forcefully at length about what he contends is the credibility, reliability and integrity of the evidence which they gave, and he referred to such matters as the fact that Telecom, according to one witness, had some records of the plaintiffs' business audited. I just can't go through all this. You remember it. You were obviously listening with great care. Of course, none of them undertook the exercise of examining the cost structure of the defendants' organisation in the way in which Dr Craig-Lees and Mr Prowse did.

They are the two battle lines. Mr Hughes in his cross-examination and in his address yesterday sought to demonstrate to you, for the reasons he gave you, that Mr Prowse's approach was flawed in two very specific ways. He failed to take into account certain matters; made unjustified assumptions, he submits. And similarly that Dr Craig-Lees' evidence was incapable of satisfying you, on her conclusions that the charges were unreasonable, for the reasons on which he addressed you at length yesterday, and in particular, he relied upon the fact that she had given a report, he contends, confined to the translation industry where that was not the field in which she was operating - it was a creative agency providing a full package.

In turn, Mr Littlemore has put to you that the witnesses from Telecom and Mr Rutledge are suspect and unreliable, and that, to a certain extent, they were in the pocket of, if I could use that expression crudely, Mr Assaf; that there was a degree of favouritism showed by them to him to varying degrees. That, really you would be satisfied after listening to the cross-examination and in consideration of the evidence, that Telecom insofar, as certainly this part of its activities was concerned, was not having its business conducted properly.

So, Mr Littlemore put to you that their evidence is suspect.

So, repeating again, on the one hand you have got Mr Assaf, Mr Rutledge, Mr Jennings, Miss Mitchell and Miss Fairman on the plaintiffs' side. You have got Mr Prowse, Dr Craig-Lees and Mr Hawker on the defendants' side - perhaps I should add parenthetically, that Mr Hughes also put to you that you wouldn't give any weight to Mr Hawker's evidence for the reasons he gave. You have got the criticisms of the other party.

So that is what you should consider, the detailed evidence that has been expounded to you by counsel."

98 As the transcript shows, counsel (Mr Littlemore QC for the defendants, Mr Hughes QC for the plaintiffs) had indeed expounded the detailed evidence to the jury.

99 Returning to the summing-up, Mr Littlemore then reminded Carruthers AJ that his Honour had not mentioned two further witnesses, and there was a brief dialogue which was not recorded. There was then reference to persons who had not been called and how the jury could take that into account, and eventually the jury was directed as to giving effect to the finding that a contextual imputation was conveyed and was substantially true.

100 At the conclusion of the summing-up Mr Littlemore submitted that Carruthers AJ's "summary on the contextual truth defence was too compendious, fairly to reflect our position". It was said that his Honour had dealt with the defence in "a matter of minutes", that much more time had been spent on damages, and that his Honour had "objectively indicated to the jury that damages is a much more substantial issue than is contextual truth". Carruthers AJ was asked "to redirect the jury giving a less compendious and more detailed summary of both parties' cases on contextual truth", and a document was handed up setting out "the major points that we ask you Honour to go to".

101 The document relevantly said -

"4. It is respectfully submitted that your Honour's summary of the `battle lines' between the parties was too compendious fairly to reflect the Defendants' position, and should include the essential `battle line' - ie that the line on excessive profit should be drawn at 50%, as Mr Assaf conceded.

Further, while your Honour summarised the evidence of Messrs Rutledge and Harvey and Misses Hall, Mitchell and Fairman on the reasonability of the Plaintiffs' charges, your Honour did not summarise the evidence of Mr Prowse, Dr Craig-Lees or Mr Hawker.

Still further, the `battle lines' summary must fairly include reference to the significance in the Defendants' case of the attack on Mr Assaf's credit. Your Honour directed the jury as to credit issues affecting the evidence of the Telecom witnesses and Mr Hawker, and the Plaintiffs' attack on Mr Prowse and Dr Craig-Lees; but made no reference to the issues involving the credit of the First Plaintiff."

102 In the discussion which followed, Mr Littlemore referred in particular to what was said to be a concession by Mr Assaf that "anything more than a 50 per cent profit margin would be ripping off the taxpayer", and his Honour was asked at the very least to remind the jury of that concession.

103 There had been extensive evidence as to an appropriate profit margin in the plaintiffs' field of endeavour, and the defendants had endeavoured through Mr Prowse, Dr Craig-Lees and Mr Hawker to establish the second plaintiff's profit margins and that they exceeded an appropriate profit margin. The defendants' essential complaint to his Honour was that he had not summarised the evidence of those persons - it should be said that his Honour had not summarised the evidence of Messrs Rutledge and Harvey and Misses Hall, Mitchell and Fairman, contrary to what was said in the defendants' document. Related complaints were that his Honour had not specifically reminded the jury of the asserted concession by Mr Assaf or, in the specific context, of matters said to affect Mr Assaf's credit.

104 After hearing further from Mr Littlemore and from Mr Hughes, Carruthers AJ said that it was difficult in summing up in a long and difficult case "to hold the balance fairly between the parties", that he was "sensitive to the matters [Mr Littlemore had] put", but that he had "crossed the Rubicon" and did not propose to give any further directions.

105 The course taken by his Honour was to remind the jury of counsels' addresses. The complaint on appeal was a little different from the complaints made below. It was submitted on appeal that, while his Honour did not have to go through every piece of evidence, he was obliged to give the jury more assistance by bringing to their attention in a general way how the evidence which had been given bore upon the issues before them. It was said that reminding the jury of counsels' addresses could be appropriate in some circumstances, but that more was required in this case; but when asked to illustrate what his Honour should have done, the defendants did not descend into any detail and only repeated that more should have been done.

106 I do not think that there was appealable inadequacy in the summing-up in this respect. The relevant issue had been made clear, namely, whether the contextual imputations were substantially true. The jury can not have failed to appreciate that they were required to consider whether, given the evidence going to what was a reasonable profit margin and what the second plaintiff's profit margins were, the proper conclusion was that the plaintiffs were getting a lot of money for doing little in circumstances in which the substance of the contextual imputations was made good. Carruthers AJ was in an ideal position to judge whether it was necessary to remind the jury of how the evidence, then fresh in their minds from counsels' detailed attention, bore upon the issue, or whether that would be an undesirable imposition on them. It was open to his Honour to determine that the better course was to remind the jury in general terms of the so-called battle lines and the material recently canvassed by counsel, without himself going into the detail of the evidence. The asserted concession by Mr Assaf had featured in addresses, and did not need to be singled out - indeed, there was a danger that singling it out would distort the summing-up - and the jury had been made well aware of the challenge to Mr Assaf's credit. I do not think it has been shown that, in the circumstances of this case, the jury was left without the assistance which they should have received, or that injustice was occasioned to the defendants because the summing-up did not go into the material evidence in more detail.

Inconsistent answers

107 Mason P has set out the form of questions 33, 34, 37 and 38. The issue on appeal was whether Carruthers AJ was correct in holding that there was not such inconsistency between the answers to para (a) and the answers to para (b)(ii) that the former answers should not be accepted as determinative of the defence of comment.

108 It is now accepted that the form of the questions was not ideal, and that it should have made clear that the jury should proceed to para (b) only if they answered yes to para (a). The directions to the jury proceeded on that basis. It is nonetheless understandable that the jury could have thought that an answer to para (b) was required, and sought to give an answer. As Mason P indicates, it is necessary to determine what the jury meant by the answers.

109 In my opinion it is plain that the jury meant to answer para (a) in the negative, and in answering para (b) meant only that there was to some extent proper material for comment albeit that there was no expression of opinion by way of comment. Again, I do not wish to add to what Mason P has said.

Availability of the defence of common law qualified privilege

110 The defendants initially particularised their defence of common law qualified privilege -

"1. Common Law (both matters complained of)

The Defendants published the matters complained of pursuant to a social or moral duty to do so and, specifically to inform the public about the matters of public interest referred to above. The recipients of each of the matters complained of had an interest in receiving the matter published because they were members of the public and it related to matters of public interest in knowing the facts and matters stated. Furthermore, the matters complained of were published on an occasion of qualified privilege at common law in that they were published in the course of discussion of government or political matters in that the matters complained of related to the conduct of government departments, particulars of which are as follows:

The First Matter Complained Of

The first matter complained of was sent to the Prime Minister of Australia and the defendants rely upon the right of freedom of speech implied under the Constitution.

The Second Matter Complained Of

The second matter complained of was published to readers of "Novosti" who by reason of needing to read this publication (in a foreign language) were all persons with a specific interest in, and need for, translation of government information into a language they could understand. By reason of the fact that the publication discussed government and political matters, the Defendants rely upon the right of freedom of speech implied under the Constitution."

111 These particulars were poorly expressed, and in relation to the letter quite obscure. In the course of the hearing the defendants amended the particulars, and the process of amendment itself involved obscurity.

112 The application to amend was recorded in the transcript -

"LITTLEMORE: ... We seek leave to amend, by adding to the last sentence on that page beginning `furthermore', in the next line after the word `published' to include the words `to the Prime Minister', and then putting a full stop in the last line after the words `government departments'. And then excising the five words following. That is the only amendment we week. We will not seek it if my learned friends tell your Honour that they would be in any way prejudiced by that amendment.

HIS HONOUR: I will take the short adjournment and we can think about that. Which particular rubric of qualified privilege are you putting this under?

LITTLEMORE: Common law.

HIS HONOUR: I understand that, but there are --

LITTLEMORE: Complaint to person in authority, complaint to the head of government about governmental matters. When I get my turn I will take you to the authorities on that. What has to be established in those situations is not duty interests but interest interest.

HIS HONOUR: So complaint to head of government about governmental matters.

LITTLEMORE: Yes, your Honour, governmental policy.

HIS HONOUR: That the only element of qualified privilege you rely on?

LITTLEMORE: Yes, your Honour."

113 The amendment was in terms only to the third sentence in the original particulars. However, Mr Littlemore agreed that "complaint to head of government about governmental matters" was "the only element of qualified privilege you rely on". Where did that leave the first two sentences? Where did it leave implied freedom of speech? Where did it leave the apparent separate element of qualified privilege in relation to the article?

114 The transcript continues -

"HUGHES: I won't oppose that amendment, so long as it is understood, and this is expressed by my learned friend, that is the only head of qualified privilege on which he proposes to rely. I immediately say, that, of course, that head of qualified privilege would not cover publication to Telecom. Could not. Or to people in Telecom.

LITTLEMORE: I add, I suppose, after the words `Prime Minister', `and Telecom'.

HUGHES: My learned friend can't do oral pleadings on the run. He specifically said that that was the only amendment that he sought.

LITTLEMORE: I thought my friend in some sort of demonstration in fairness to me was saying that if you do that we will say it doesn't apply to Telecom. To accommodate that all I have said, all right, we will add to it the words `and Telecom"?

HUGHES: A publication to Telecom can't be a publication within that which my learned friend just specified as his head of privilege, complaint to person in authority.

LITTLEMORE: Your Honour, I will be content with the original amendment. I can see how to handle this. I certainly don't want to prolong this. We can accommodate that."

115 After further discussion in which Mr Littlemore agreed "that the amendment does not cover publication to Telecom", the transcript continues -

"HIS HONOUR: It will be noted on the transcript that the defendants seek leave to amend the last sentence of the particulars of qualified privilege at common law in respect of both matters complained of so that sentence will read: `Furthermore, the matters complained of were published to the Prime Minister on an occasion of qualified privilege at common law in that they were published in the course of discussion of government or political matters in that the matters complained of related to the conduct of government departments'.

Thereafter, the words particulars of which are as follows: The first matter complained of ---

HUGHES: That's out.

HIS HONOUR: I was going to say will be struck out.

The words, particulars of which are as follows: `The first matter complained of is sent to the Prime Minister of Australia and the defendants rely upon the right of freedom of speech supplied under the constitution' - that is struck out.

It will be noted that Mr Hughes has indicated that he agrees to that amendment in the light of his understanding that the particular does not embrace the head of Telecom, as it then was.

That's formally recorded. Can I say that's the only head of qualified privilege that the defendants rely upon at common law?

LITTLEMORE: Yes, it is, your Honour.

HIS HONOUR: It would be formally noted then that the amended particular which I have set out earlier is the only head of qualified privilege at common law on which the defendant relies."

116 Again the amendment was in terms to the third sentence in the original particulars. But it was accepted by all that the words "particulars of which are as follows" and the material relating to the first matter complained of were struck out, so the amendment involved restriction of the defence in relation to the letter, and it was agreed that "the amended particular which I have set out earlier is the only head of qualified privilege at common law on which the defendant relies". Read in context, this applied only to the letter, not to the article, but it involved abandonment of the first two sentences in the original particulars and of implied freedom of speech. In relation to the letter, the defendants now relied for the common law defence of qualified privilege on the publication to the Prime Minister being a complaint to him as a person in authority concerning the conduct of a government department, and nothing more.

117 That this is a correct understanding of the position is confirmed by an exchange recorded in the transcript shortly thereafter. There was debate over the form of questions to go to the jury. In the course of the debate Mr Hughes submitted that an element of qualified privilege to which Mr Littlemore had referred was not available because not particularised, and that led to Mr Littlemore saying that he was "not fussed" about it and Carruthers AJ noting, with Mr Littlemore's implicit acceptance, that Mr Littlemore was "proceeding only with the one element which is particularised in accordance with what was granted earlier today".

118 The jury found that the letter was published to Telecom and named persons at Telecom, not by the defendants but as a natural and probable consequence of its publication to the Prime Minister by the defendants. Carruthers AJ recorded the plaintiffs' contention that it was not open to the defendants to rely upon the defence of common law qualified privilege in relation to publication or re-publication to Telecom and/or its officers because the defence as particularised did not extend thereto. He also recorded that the defendants disputed that position, and contended that they had not renounced the defence as a defence to re-publication to Telecom or its officers as distinct from publication. His Honour recorded the plaintiffs' contention, also disputed, that it was not open to the defendants to rely upon complaint/redress of grievance qualified privilege in relation to the letter, first because it was not within the particulars in their original form or as amended and secondly because counsel for the defendants had acknowledged that they would not rely upon such a category of qualified privilege.

119 Carruthers AJ did not resolve the first of these disputes, it seems on the basis that the defence failed in any event. As to the second of the disputes, his Honour appears to have proceeded on the basis that the category of qualified privilege was open to the defendants, at one point referring to the first plaintiff as a complainant. In the result, he held that the defence had not been made out because the imputations were not within the occasions of privilege posited by the defendants.

120 The issue on appeal was whether, in relation to the letter, any defence of common law qualified privilege was available to the defendants other than the publication to the Prime Minister being a complaint to him as a person in authority concerning the conduct of a government department. In my opinion, by the course of events I have described the defendants were confined to a defence so particularised.

The defence of common law qualified privilege

121 Carruthers AJ said that he was minded "to set aside the difficulties arising from the pleadings and the dispute about alleged concessions by the defendants, and consider the position on the basis that the various categories of privilege are available to the defendants as they contended". He recorded at length the contentions of the plaintiffs and the defendants. The defence of comment had been upheld in relation to the fourth imputation, so his Honour was concerned only with the first and third imputations. The issue on appeal was whether his conclusion that the defence of common law qualified privilege had not been made out, in relation to the letter or the article, was correct.

122 As to the letter, his Honour said -

"One could accept that there is an occasion of privilege here between the defendants and the publishees with regard to the efficient and cost effective communication of government advertising and information to the ethnic community. To this may be added the question whether there have been any abuses by persons or organisations or government instrumentalities involved in that area of activity which resulted in the exacerbation of cost to the ethnic community of receiving such information. To this may be added proposals for overcoming the suggested problems.

The critical question is then whether the first and third imputations which the jury have found to be both false and defamatory can be accommodated within that occasion. There is no doubt that Mr Skalkos has adopted the role of a complainant. There is also no doubt that Mr Skalkos had an interest in bringing what he considered to be `information' to the publishees of the letter."

123 His Honour answered the critical question in the negative. For the reasons I have given, I do not think that it was open to the defendants to rely on such an ample occasion of privilege as underlay his Honour's conclusion.

124 The available occasion of privilege was one of complaint to the Prime Minister as a person in authority concerning the conduct of a government department. In Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 228 Dawson, McHugh and Gummow JJ observed that privilege "only attaches to those defamatory imputations that are relevant to the privileged occasion". A recent discussion of what is meant by relevance to the privileged occasion, with reference to the earlier cases, may be found in Bashford v Information Australia (Newsletters) Pty Ltd (2001) NSWCA 470. For present purposes detailed consideration is unnecessary. The first and third imputations were not directed to the conduct of any government department. They were directed to the conduct of the plaintiffs in dealing with publishers of ethnic community newspapers, and others with whom they did business. In my opinion, the imputations were not relevant to the privileged occasion available to the defendants.

125 As to the article, after noting dispute over the extent of publication and the possible consequences for the occasion of privilege Carruthers AJ said -

"It would seem to me that the average reader who would necessarily be conversant with the Serbian language of Novosti would have an interest in the efficient and cost effective communication of government advertising and information to the ethnic community of whom, no doubt, the vast majority could be said to belong. They would also be concerned with whether there had been any abuses by persons or organisations or government instrumentalities involved in that area of activity which resulted in the exacerbation of cost to them of receiving such information.

There is, for present purposes, a very relevant passage in the judgment of McHugh J in Stephens [Stephens v Western Australian Newspapers Ltd [1994] HCA 45; (1994) 182 CLR 211] at 264-266 where his Honour said:

`In the last decade of the twentieth century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys. How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community. Information concerning the exercise of those functions and powers is of vital concern to the community. So is the performance of the public representatives and officials who are invested with them. It follows in my opinion that the general public has a legitimate interest in receiving information concerning matters relevant to the exercise of public functions and powers vested in public representatives and officials. Moreover, a narrow view should not be taken of the matters about which the general public has an interest in receiving information. With the increasing integration of the social, economic and political life of Australia, it is difficult to contend that the exercise or failure to exercise public functions or powers at any particular level of government or administration, or in any part of the country, is not of relevant interest to the public of Australia generally. If this legitimate interest of the public is to be properly served, it must also follow that on occasions persons with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties will have a corresponding duty or interest to communicate information concerning such functions, powers and performances to members of the general public. In Jenoure v Delmege [1891] AC 73 at p 77, Lord Macnaghten said that "[t]o protect those who are not able to protect themselves is a duty which everyone owes to society."

Accordingly, it is now appropriate for the common law to declare that it is for "the common convenience and welfare" of Australian society that the existing categories of qualified privilege be extended to protect communications made to the general public by persons with special knowledge concerning the exercise of public functions or powers or the performance of their duties by public representatives or officials invested with those functions and powers. The scientist who discovers that lack of governmental action is threatening the environment, the "whistleblower" who observes the bureaucratic or ministerial "cover up", and the investigative journalist who finds the grants of public money have been distributed contrary to the public interest are examples of persons who have special knowledge of matters affecting the exercise of public functions or powers or the performance of duties by public representatives or officials. If such persons, acting honestly, inform the general public of what they know about such matters, their publications will be made on an occasion of qualified privilege. The defence of qualified privilege will be available even if the information is subsequently proved to be incorrect. Thus, the occasion will still be privileged even if the "whistleblower" mistakenly but honestly overlooks some fact which undermines the thesis of his or her claim. The publication of erroneous information may be evidence of malice in some cases. But by itself an error in the published information will not destroy the occasion of privilege.

No doubt in some exceptional cases the information published may be so unrelated to the kind of powers or functions invested in the person defamed that a defence of qualified privilege could not be upheld. But, speaking generally, the occasion will be privileged whenever a person with the requisite special knowledge honestly publishes information about the functions or powers or the performance of duties by public representatives or officials for the purpose of informing the public about such matters. The officiousness of the person publishing the information can never be decisive against the existence of an occasion of qualified privilege, although it may be relevant in determining whether there was a duty to publish to the word [sic] at large cf Greenlands Ltd v Wilmshurst and the London Association for Protection of Trade [1913] 3KB 507, at p 535.'

In a real sense Mr Skalkos could be categorised as a person with special knowledge of matters affecting the exercise of the communication of government advertising and information to the ethnic community. I would consider therefore that the communication of appropriate information to the readers of Novosti would fall within the category of qualified privilege identified by McHugh J."

126 His Honour held, however, that the imputations were not within the scope of the occasion of privilege. His Honour said -

"However, McHugh J is insistent that the publisher in such circumstances must publish the relevant information honestly. Further, the occasion of privilege is not disturbed if the publisher overlooks some fact which undermines the thesis of his or her claim. Thus, by itself, an error in the published information will not destroy the occasion of privilege. However, accepting that there was this occasion of privilege available to the defendants, they have, in my assessment, abused the occasion by the publication of the first and third imputations for the very reasons which I have expressed in relation to the publication to the Prime Minister and Telecom and its specified officers.

The publications of those imputations could not be categorised as an honest mistake or an honest overlooking of some fact which undermines the thesis of the defendants' claim."

127 The reasons expressed by Carruthers AJ in relation to the publication of the letter, following an extensive discussion of the cases, were -

"As to the first imputation, this imputation is entirely false. It is also, as the plaintiffs contend, irrational in that the plaintiffs did not sell to the publishers of ethnic and community newspapers government advertising. Understandably, no attempt was made to justify this imputation nor was a defence of comment pursued with regard to it.

In my view its publication cannot possibly comply with the criteria set out in the authorities referred to above. This is so even if one gives full weight to the current community affirmation of the right to free speech and applies a generous, rather than a strict construction of the criteria.

The defendants could have quite readily and forcefully made their point about the alleged wastage and inefficiency of the use of alleged `middle men' such as the plaintiffs, without introducing a splenetic and false attack upon the commercial integrity of the plaintiffs. The imputations' irrationality and inaccuracy was incapable of serving the purpose of the occasion. It was not relevant or pertinent to the discharge of the duty or the exercise of the right or the safeguarding of the interest which was said to create the privileged occasion relied upon. It was an abuse of the occasion. It was beyond what was germane and reasonably appropriate to the occasion. It made no contribution to the discussion of the subject of public interest. Other similar criteria may readily be applied.

There is no need for me to repeat, by way of elaboration, the specific factors which I have referred to above by reference to the matters set out in the judgment of Lord Nicholls in Reynolds [Reynolds v Times Newspapers Ltd (2001 2 AC 127].

Although the third imputation may be thought to be not quite so serious an imputation as the first, it is only a matter of slight degree. Leaving aside, the aspect of irrationality it also fails to comply with the criteria referred to above so that the defence of qualified privilege could not extend to it."

128 I doubt that this was a case of a person with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties fulfilling a duty or interest to communicate information concerning such functions, powers and performances to members of the general public. The defendants were not criticising the exercise of a public function. They were criticising the probity of the plaintiffs' dealings with those with whom they did business.

129 Mason P has discussed the cases in some detail, and has explained the defendants' complaints of error in reasons of Carruthers AJ.

130 It must be remembered that the inquiry into relevance of the defamatory imputation to the occasion, whether expressed in those terms or in the various other ways to be found in the cases, is intended to distinguish between an imputation which should not bring liability for defamation and one which should. As in so many other areas of the law, the function of attribution of legal responsibility necessarily affects the inquiry (causation is a well-known illustration, see March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 516-7, 523-4; Environment Agency v Empress Car Co (Albertilly) Ltd [1998] UKHL 5; (1999) 2 AC 22 at 29-31). The inquiry is not a mechanical application of a form of words. Something may be privileged although untrue, irrational, or intemperately expressed. But that it is untrue, irrational or intemperately expressed may warrant the conclusion, or contribute to the conclusion, that the protection of the privilege should not be afforded. Absence of malice does not mean that all that is published is within the occasion of privilege.

131 In the present case there may have been an interest in the readers of Novosti in the efficient and cost effective communication of government advertising and information, which the defendants were entitled to satisfy. In satisfying the interest they could publish under the protection of privilege material defamatory of the plaintiffs, within limits marked by the relevance of any defamatory imputation to the occasion. But in determining whether they exceeded the limits it must be relevant to take into account the truth, rationality and manner of expression of what was published, because in the end a judgment must be made: was the publication in such circumstances that, according to the test of relevance to the occasion (or other expression) the imputation should bring liability for defamation?

132 The judgment made by Carruthers AJ was adverse to the defendants. It may be that to some extent the manner in which his Honour expressed his reasons could attract comment. But the conclusion, in my opinion, stands. The defendants were entitled to inform the readers of Novosti, to satisfy the interest earlier mentioned, and to be critical of the plaintiffs in doing so. They could be wrong or irrational in what they said, and could use strong language. But the combination of falsity, irrationality and extreme language - the first and third imputations were very serious - could mean that what was conveyed was not "relevant and pertinent to the discharge of the duty or the exercise of the right or the safeguarding of the interest which creates the privilege", see Adam v Ward (1917) AC 309 at 321. I am not persuaded that the conclusion to which Carruthers AJ came was not open to him, or was incorrect.

Statutory qualified privilege

133 The defendants relied on statutory qualified privilege under s 22 of the Defamation Act only in relation to the article. So far as material, s 22 provides -

"(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.

(2) For the purposes of subsection (1), a person has an apparent interest in having information on some subject if, but only if, at the time of the publication in question, the publisher believes on reasonable grounds that that person has that interest."

134 Carruthers AJ said -

"With regard to paragraphs (a) and (b) which may conveniently be dealt with together for present purposes, I have no difficulty in accepting that the average reader of Novosti would have an interest, or at least an apparent interest in government policy in relation to communicating information on his or her rights, entitlements and obligations, particularly where it is asserted that such policy is causing the deprivation of essential information to the reader and inflating the cost of the newspaper. Further, that alongside that special interest would be the interest of Serbian speaking Australians, as taxpayers, in government expenditure. As well they would have an interest or apparent interest in alleged unethical and wasteful practice in the promulgation of government advertisements and information to the readers of the ethnic press.

The critical question is, however, whether the conduct of the defendants in publishing that matter was reasonable in the circumstances within the meaning of paragraph (c)."

135 His Honour held that the conduct of the defendants was not reasonable. The issue in the appeal was whether his Honour was correct in that conclusion.

136 It is a question of fact in the particular circumstances, and that the jury declined to find malice does not mean that the conduct of the defendants was reasonable. I do not canvass the grounds for Carruthers AJ's conclusion, but approach the matter afresh.

137 In my opinion, his Honour's conclusion was plainly correct. The first and third imputations conveyed by the article were significant, indeed inflammatory, criticisms of the plaintiffs, disseminated where they would be likely to have the greatest impact. They were deliberately conveyed - so much was evident from a reading of the article, and Mr Skalkos did not give evidence to the contrary (or at all). There was no evidence of steps taken by Mr Skalkos or anyone else before publication of the article to enquire into or underpin the truth of the criticisms. Mr Skalkos did not give evidence that he believed in their truth, and all the defendants could muster in their favour was evidence of Mr Harvey and Ms Hall of conversations with Mr Skalkos to the effect that cutting out the plaintiffs as middlemen would be cheaper and Mr Harvey's belief that Mr Skalkos was sincere. Whether or not it was essential that the defendants establish Mr Skalkos' belief in the truth of the imputations which he intended to convey, in the circumstances of this case the conclusion that the conduct of the defendants in publishing the defamatory matter was not reasonable was all but inevitable.

The result

138 In my opinion the appeal should be dismissed with costs.

139 FITZGERALD AJA: The circumstances giving rise to this appeal are comprehensively set out in the reasons for judgment of the President. His Honour's judgment allows me to deal with the matter briefly.

140 The defendants published defamatory imputations of and concerning the plaintiffs. The imputations published in relation to the second plaintiff were the same as those published in relation to the first plaintiff, namely that:

1. He exploits publishers of ethnic community newspapers for his selfish financial purposes, by selling government advertising to them at exorbitant prices.

...

3. He conducts the business of Ethnic Communications Pty Ltd in such an unethical manner as to cause ethnic communities to be deprived of essential government information.

...

141 The imputations were published in a letter dated 21 July 1993 to the then Prime Minister, which was also published (subject to one modification) in "Novosti", a newspaper circulating within the Serbian community in Australia. The edition of "Novosti" in which the letter was published had a circulation of 7,199 copies and a substantially larger readership. The letter to the Prime Minister was subsequently published to Telecom and three of its employees. Although the defendants did not publish the letter to Telecom, that publication was found to be a natural and probable consequence of their publication of the letter to the Prime Minister.

142 The letter to the Prime Minister contained an additional defamatory imputation. A defence of comment was upheld in relation to that imputation, which was as follows:

4. In conducting the business of Ethnic Communications Pty Ltd he employs bullying tactics towards the smaller ethnic media organisations to make them too frightened to complain about his unethical and wasteful conduct.

143 After a lengthy trial, a jury assessed the first plaintiff 's damages at $150,000 and the second plaintiff 's damages at $30,000. Following a further hearing in relation to defences of qualified privilege and issues of costs and interest, the trial judge gave judgment for the first plaintiff against the defendants in the sum of $171,595 and judgment for the second plaintiff against the defendants in the sum of $34,319. Each of the plaintiffs was also awarded costs.

144 The defendants' appeal and the plaintiffs' notice of contention and foreshadowed notice of cross-appeal raised a number of issues for this Court's determination. I have not found it necessary to consider all those issues.

Defences under ss 13 and 16 of the Defamation Act 1974

145 I agree with the President that, for the reasons given by his Honour, the defendants' complaints in relation to the trial judge's summing-up with respect to their defence based on s 16 of the Defamation Act 1974 ("the Act"), and his Honour's refusal to submit their defence under s 13 of the Act to the jury should be rejected.

Jury answers to questions 33, 34, 37 and 38

146 I also agree with the President that the defendants' submission that the jury gave inconsistent answers to questions 33(a) and 33(b)(ii), 34(a) and 34(b)(ii), 37(a) and 37(b)(ii), 38(a) and 38(b)(ii) should be rejected.

147 The jury was presented with an agreed schedule of 51 questions at the end of a lengthy trial. The questions were directed to a range of possibilities, including possible answers to earlier questions. The jury would reasonably have considered that it was required to answer all questions unless the schedule indicated that an answer was unnecessary because of an earlier answer. Questions 33(b)(ii), 34(b)(ii), 37(b)(ii) and 38(b)(ii) erroneously appeared to require answers despite negative answers to questions 33(a), 34(a), 37(a) and 38(a).

148 In context, the jury's affirmative answers to questions 33(b)(ii), 34(b)(ii), 37(b)(ii) and 38(b)(ii) mean no more than that, although the imputations the subject of questions 33, 34, 37 and 38 would not have been understood by the ordinary reasonable reader as an expression of opinion and not a statement of fact (answers to questions 33(a), 34(a), 37(a) and 38(a)), each imputation was based upon material which was to some extent proper material for comment.

Qualified privilege

149 The plaintiffs failed to persuade the jury that the plaintiffs had established that the defendants did not believe in the truth of the matter that they published or that they had an indirect motive in publishing that matter. The jury's conclusion that the plaintiffs had not established those matters does not establish that the jury found that the defendants did believe in the truth of the matter that they published or that they did not have an indirect motive in publishing that matter.

150 Understandably on the evidence, the trial judge was not satisfied that the defendants believed in the truth of the imputations and did not have an indirect motive in publishing them or that they took reasonable (or any) care to ensure that what they published was true.

151 His Honour correctly concluded that, even if the imputations related to a matter or matters of public interest and/or government or political matters, it was not "reasonable in the circumstances" (Act s 22) for the defendants to publish serious allegations against the plaintiffs which were untrue without (on the evidence) a belief in the truth of what they published or care to ensure that what they published was true.

152 Likewise, his Honour correctly concluded that, in those circumstances without more, the imputations were not "relevant" to a matter or matters of public interest or government or political matters and that their publication was not protected by common law qualified privilege (Act, s 11). In the circumstances, the publication of the imputations was neither reasonable nor a legitimate use of the occasion of privilege having regard to its underlying purpose.

Comment imputation 3

153 The plaintiffs' complaints concerning the trial judge's decision to permit the jury to consider the defence of comment in relation to imputation 3 were only pressed if the defendants succeeded in their appeal. Since the defendants have failed, it is unnecessary to consider any other issue.

Conclusion

154 I agree with the orders proposed by the President.

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LAST UPDATED: 28/02/2002