Australian Broadcasting Corporation v Reading

LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 20206/02 FILE NUMBER(S) : LOWER COURT Shaw J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40695/03 SC 20206/02

SANTOW JA IPP JA McCOLL JA

15 NOVEMBER 2004 AUSTRALIAN BROADCASTING CORPORATION v Paul George READING DEFAMATION - whether the trial judge was bound to record the unanimous answers of the jury and enter judgment accordingly - whether the trial judge had power to discharge the jury and order a new trial - whether power to discharge jury was properly exercised - whether the jury's answer that imputation was not defamatory was perverse or unreasonable or a conclusion that no reasonable jury, properly instructed, could reach - scope of appellate review of determination of jury in defamation proceedings - scope of new trial.

FACTS Mr Reading brought defamation proceedings against the Australian Broadcasting Corporation ('the ABC') arising out of a television broadcast on the "Four Corners" program. The program concerned among other things the business dealings and financial state of a corporation, ANI, of which Mr Reading was then the Finance Director. It was reported that ANI was involved in a transaction in which it took on the major liabilities of another corporation, ultimately resulting in crippling losses to ANI. Mr Reading pleaded that eight defamatory imputations were conveyed by the program, two of which, imputations (b) and (c), were framed as alternatives.

At the hearing pursuant to s 7A of the Defamation Act 1974, the jury answered that six imputations were not conveyed. Of the remaining two imputations, the jury answered that imputation (c) was conveyed but was not defamatory and made no answer in respect of imputation (d), which was said to be "not applicable because of wording." The trial judge directed the jury to return to consider whether they had a unanimous answer with respect to imputation (d). After the jury had indicated that they had such an answer and apologised for "misreading the instructions", but before the answers were recorded, the trial judge on the application of Mr Reading discharged the jury and ordered a new hearing on the basis of the Supreme Court Rules 1970 Pt 34 r 8A. Before discharging it, however, the trial judge recorded the jury's answers, including the subsequent answer that imputation (d) was not made out.

The ABC sought leave to appeal contending that in the events that occurred the trial judge was bound to record the unanimous answers of the jury and enter a verdict for the defendant.

In the event that the application for leave to appeal and the appeal were successful, Mr Reading pressed a cross-appeal. This cross-appeal was on the basis that the conclusion reached by the jury was perverse in respect of imputation (c), namely that the imputation that "the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer" although conveyed was not defamatory. This was in the sense that it was a conclusion no reasonable jury could have reached. In the event this Court reached that conclusion, Mr Reading submitted there should be a new trial on all issues as it would be open to the Court to conclude that a perverse verdict in relation to imputation (c) had influenced its considerations of the other imputations.

HELD Granting leave to appeal and allowing the appeal Per Santow JA (McColl JA agreeing)

1. The Supreme Court Rules 1970 Part 34 r 8A cannot be the source of power to discharge a jury in the circumstances here; at [50]-[52]. (a) The trial judge had inherent power to discharge the jury at any time until the point where the verdict has been accepted and recorded, upon which the jury becomes functus officio; at [40]. (b) Although there was power for the trial judge to take the course he did, there was no sufficient basis to exercise that power by discharging the jury when the events showed that the jury's initial misunderstanding was later dispelled so it could not properly be said that the jury had "seriously misapprehended" its task by the time its answers were recorded; at [52]. 2. The trial judge has the power in the exercise of his or her discretion to seek elucidation or clarification of answers given by jury, or not to do so and to discharge the jury and order a new trial; at [41]-[42]. 3. Seeking elucidation is not inconsistent with s 7A of the Defamation Act 1974, since a judge conducting a jury trial necessarily retains those ancillary procedural powers needed to accomplish that purpose, which includes re-directing a jury whose answers warrant such redirection; at [48]. Per Ipp JA (McColl JA agreeing)
2. It was an error to dismiss the jury and order a new trial in the circumstances: (a) Since it was obvious from the jury's first answers that they had misunderstood the questions they were required to answer, the judge was entitled to clarify the matter and give the jury an opportunity of amending it to overcome the effect of manifest error or mistake; at [110]-[111]. (b) After the judge clarified the questions, the jury gave a clear answer to the questions asked of them showing they had resolved their confusion and understood their task; at [114]. 2. The Supreme Court Rules Part 34 r 8A did not confer power on the judge to discharge the jury in the circumstances; at [115]. Dismissing the cross-appeal (by majority) Per Ipp JA:
3. The approach to be applied in an appellate review of a jury verdict that an imputation was not defamatory was set out in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107; at [120]: (a) The verdict can only be set aside when the words in the publication are not capable of anything but a defamatory meaning, and when the defamation is clear and beyond argument; (b) The highest respect should be accorded to the jury's determination; (c) In determining whether a civil jury acted reasonably, an appellate court must approach the case on the basis most favourable to the respondent. 2. In determining whether an imputation is defamatory, pleaded imputations must be considered in the context of the matter complained of; at [123]

(a) Where as here, the material complained of is words spoken in a television broadcast, the impressions and understanding of what is being conveyed can be far more ephemeral and fleeting than written words; at [121]. (b) In considering whether imputation (c) was defamatory, the jury cannot be taken to have given to it any meaning that they rejected when finding the other seven imputations were not conveyed, and must have taken into account that it did not carry any of the meanings contained in them; at [126]-[127]. (c) In this case, there is little left by way of context that could supplement the bare imputation itself; at [129]

3. Here, imputation (c) must be construed as meaning that Mr Reading as financial director breached duties of due diligence owed to ANI by voting in favour of ANI taking over ABT, subject to the qualifications that he voted in circumstances under which he sold his co-operation to Mr Packer, and that the meanings conveyed by the other seven imputations were not part of imputation (c); at [134]. 4. It would not be unreasonable or irrational taking into account all those qualifications for a jury to conclude that the imputation was not defamatory; at [137]. Per McColl JA:
4. The scope of appellate review of the jury's determination that imputation (c) was not defamatory is constrained by the significance accorded to the role of the jury in the law of defamation; at [142]. (a) The jury has a constitutional role as the representatives of the community and a unique role as arbiters of community standards; at [145], [149]. (b) The restraint upon the scope of appellate review ensures that the jury's role as the "appropriate barometer of public opinion" is not usurped; at [150], [160]-[162]. (c) The Court may not reject the jury's determination simply because it is of the view that it would not have come to the same conclusion; at [151]-[155], [162]-[163]. 2. In determining whether the jury's conclusion that imputation (c) was not defamatory was one no reasonable jury could reach, the Court was required to approach the case on the basis most favourable to the ABC; at [164]. 3. Since the matter complained of was a transient publication, the reasonable viewer is deemed to have viewed and listened to the whole of it but not with the same degree of concentration as would have been paid to a written document; at [168]. 4. Having regard to the jury's rejection of the imputations of dishonesty and corrupt conduct, the jury may have found imputation (c) was conveyed because the matter complained of said Mr Reading had breached his duties as director either because he had not been diligent or he had not been careful. The jury may also have rejected the proposition there was anything sinister about his bonus; [at [173]. 5. The conclusion that ordinary decent members of the community would not think less of a person who had not acted diligently or carefully in receiving a bonus was not "glaringly improbable" or "starry-eyed"; at [176]. Per Santow JA (in dissent)
5. When an appellate court reviews a jury determination that an imputation is not defamatory, although the jury verdict will be accorded the highest respect it must still be set aside where it is a conclusion that no jury, properly instructed could reach; at [59]-[60].

2. That test applies to both stages of the two-stage process an appellate Court adopts in reviewing a jury's determination that an imputation is not defamatory: at [60]

(a) First it construes the imputation to determine its most innocent possible construction without choosing one that is glaringly improbable; at [60] and (b) Then it considers the effect on reputation of the imputation so construed (at this stage greater appellate restraint is called for since general community standards are in play); at [63].

3. In performing its appellate function, the court must view the imputation in its entire context, which in the case of a television broadcast includes visual impression which may derive reinforcement from visual images as here; at [64], [69], [76], [86]. 4. When a jury rejects an imputation but accepts another, that rejection has to be reconciled with that acceptance; at [80] 5. In this case, with respect to the jury's conclusion on imputation (c), the analysis requires the following steps:

(a) Construing the imputation in its context to determine its most innocent possible construction alleges that Mr Reading at the least breached a duty of diligence in the area of his professional competence as a finance director, that breach involved the selling of co-operation for a bonus from the beneficiary of that transaction in relation to a transaction which Mr Reading knew was incorrect and ultimately caused crippling loss to the corporation; at [67], [85]. (b) No reasonable jury could conclude otherwise than that such a depiction bears adversely on Mr Reading's business and professional reputation as a finance director in the commercial and wider community - even the most innocent possible construction is a plain and obvious defamation; at [68], [72], [86].

6. Since the jury's conclusions with respect to the other imputations were not conclusions that no reasonable jury, properly instructed, could have reached, there should be a new trial in relation only to whether imputation (c) was defamatory; at [107]-[108].

ORDERS (1) Leave to appeal is granted; (2) The appeal is allowed; (3) Set aside the orders of Shaw J on 25 July 2003; (4) In lieu thereof, direct that the answers of the jury be recorded in relation to paragraphs 3 and 5 of Mr Reading's Further Amended Statement of Claim and that judgment be entered for the Australian Broadcasting Corporation. (5) The cross-appeal is dismissed; (6) Mr Reading is to pay the Australian Broadcasting Corporation's costs of the appeal, the cross-appeal and the proceedings in the court below.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40695/03 SC 20206/02

SANTOW JA IPP JA McCOLL JA

15 NOVEMBER 2004 AUSTRALIAN BROADCASTING CORPORATION v Paul George READING Judgment 1 SANTOW JA: OVERVIEW On 7 April 1997 and again on 8 April 1997 the Australian Broadcasting Corporation ("the ABC"), claimants in these proceedings, broadcast on television a Four Corners programme centred around Mr Kerry Packer. At the request of the parties, the Court watched the whole of that broadcast. In the course of that programme there was a segment concerning a company called Australian National Industries Limited ("ANI") that acquired an environmental engineering firm ABT. ABT was purchased from Mr Packer's company Consolidated Press Holdings Limited and its liabilities assumed by ANI, with, according to the broadcast, financially disastrous results. 2 In the course of that segment, reference was made not only to Mr Kerry Packer but also to the role in that acquisition of Mr Paul Reading, ANI's then financial director, who was on the board of ANI at the time. Based on that segment, Mr Reading brought proceedings as plaintiff against the ABC pursuant to a Further Amended Statement of Claim. The proceedings commenced with a jury trial under s7A of the Defamation Act 1974 (NSW). This was to determine whether the matter complained of carried certain imputations and, if it did, whether they were defamatory. There were eight claimed imputations lettered (a) to (h), requiring the jury to answer, in each case, whether they were carried by the material and, if so, whether defamatory. Two of those imputations, (b) and (c) were put in the alternative for the jury to answer as to whether either imputation (but not both) was carried by the relevant material. 3 The trial judge discharged the jury after it had given its answers on the first occasion. The jury in the first instance answered that imputations (a), (b), (e), (f), (g) and (h) were not conveyed, that imputation (c) was conveyed, but answered "no" to whether it was defamatory. The jury failed to answer whether imputation (d) was made out, merely answering "not applicable because of wording". It subsequently, on request by the trial judge did answer that question in the negative, having earlier apologised "for misreading the instructions". The trial judge concluded that the jury "seem to have misunderstood their function". Nonetheless at the request of the ABC's counsel, he recorded the jury's answers before discharging the jury. 4 The claimant contends that in the events that happened: (a) the trial judge was bound not only to record the unanimous answers of the jury but to enter judgment for the defendant, and (b) the trial judge (i) had no power to discharge the jury and order a new trial or if he did, (ii) that power was not capable of being exercised in the circumstances. 5 The opponent contends in response that the trial judge should have discharged the jury even without recording the jury's answers. This was on the basis that the jury "had hopelessly misconceived what they were doing and a serious injustice had happened" to Mr Reading (AT, 14.50). This was on the basis that the jury, as shown by their first answers, had approached the questions on the basis, not that (b) and (c) were alternatives, but (c) and (d). That was said to have been shown by the fact that the jury had answered that imputation (c) was conveyed (but not defamatory) but had answered that imputation (b) was not conveyed. What the jury should have done was not answer question (b) at all, having answered the true alternative question (c). 6 The claimant replied that the jury's subsequent answer regarding imputation (d), when coupled with the apology for misreading the instructions, showed that the jury now understood its task; it had now answered all the questions asked of it. On that basis, its earlier answer that imputation (b) was not conveyed amounted to an answer that was surplus, but was innocuous. It was surplus because (c) had earlier been answered to the effect that imputation (c) was conveyed whilst (d) had now been answered negativing that imputation. That demonstrated that the jury no longer could have thought (d) to be an alternative to (c). 7 There is a further cross-appeal dependent on the result of the leave to appeal. It is only pressed if leave to appeal and appeal are successful. The cross-claimant claims against his cross-opponent the ABC that a particular answer by the jury was "perverse and unreasonable", so as to require a new trial. This arose after the jury first answered that imputation (c) was conveyed, but no other imputation. Imputation (c) was to the effect that "the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer". But the jury then answered that imputation (c) was not defamatory. It was the latter answer that is said to be perverse and unreasonable. 8 Should that cross-appeal succeed there is a final question. It concerns the scope of any new trial. It was made clear on the appeal that the relief claimed was limited to a new trial. No appeal was any longer sought to be brought pursuant to s108(3) of the Supreme Court Act (AT, 63-4). The issue would be whether any new trial should be limited to imputation (c) or, as the cross-claimant contends, extend to each other imputation as well on the basis that the whole of the jury's verdict was vitiated by perversity on its part. The cross-claimant's fall-back is to press for a re-trial on imputations (e) and (h). 9 It was accepted that the question in the cross-appeal was more accurately framed in the terms adopted by the High Court in John Fairfax Publications Pty Ltd v Rivkin (2003) 201 ALR 77. It was whether this was "a conclusion that no reasonable jury could reach"; Callinan J at [179] and [185]; see also Gleeson CJ at [6], McHugh J at [17] and [78], Kirby J at [118-119] and Heydon J at [223].

SALIENT FACTS Background 10 These proceedings began as a jury trial under s7A of the Defamation Act 1974 (NSW). Section 7A(1) can operate as an initial judicial filter. As Kirby J put it in Rivkin "For an imputation even to be considered by the jury, it must have passed the first hurdle provided by s7A. A judge must already have determined on the papers, both that the matter is reasonably capable of bearing a defamatory meaning" and that "the imputation is reasonably capable of bearing a defamatory meaning". It is then for the jury to determine whether the matter complained of carries the imputation and if so, whether that imputation is defamatory; s7A(3). 11 Here the matter complained of derives from a broadcast of the "Four Corners" program by the ABC on 7 and 8 April 1997. It referred to the respondent, Mr Reading. Mr Reading's name was raised in the context of a piece of investigative journalism into the business dealings of Mr Kerry Packer, and in particular in relation to Mr Packer's dealings with one of Australia's oldest engineering companies, Australian National Industries Limited (ANI). 12 On the third day of the trial the trial judge discharged the jury ordering a complete new trial. He said he relied on Pt 34 r 8A of the Supreme Court Rules to do so. He concluded that the jury had misdirected their minds to the questions asked of them in such a fundamental way as to amount to no clear answer of the questions asked. 13 The claimant appealed against the decision of the trial judge to discharge the jury and not accept the answers given to the questions that were put before them. The claimant is the defendant to the original proceedings brought by the opponent.

The Four Corners Program 14 The trial judge summarised the facts of the transactions described in the programme in these terms: "2 The Four Corners program reported that, in 1989, Mr Packer's family company, Consolidated Press Holdings (CPH), bought a controlling stake in ANI which was then apparently sold two years later at a profit of $180 million.

3 It was suggested that there were subsequent losses for ANI since Mr Packer had 'off loaded' onto ANI an environmental engineering firm based in Europe, called, ABT.

4 The plaintiff was a financial director of ANI and was reportedly paid $1 million, in an agreement subject to the approval of Mr Packer, before and after ANI agreed to take control over ABT and the liabilities owed in relation to ABT by CPH.

5 The plaintiff sues in defamation alleging that the broadcast carried imputations that he was corruptly bribed by Mr Packer and dishonest in his role as a director of ANI." 15 The plaintiff at trial relied on the whole of the Four Corners program to establish his case. However, he did rely in particular on the following relevant sections of the programme transcript, and within that the emphasised portions: "VOICE-OVER: "Australian National Industries was forged in 1911, and began operations as an automotive engineering business, based in Sydney. Eighty Three years later, ANI has become Australia's largest publicly listed engineering company".

NEIGHBOUR: In 1989, a controlling stake in ANI was bought by Kerry Packer's family company, Consolidated Press Holdings or CPH. Packer sold it again two years later, at a profit of $180 million. ANI wasn't so lucky . It's since lost close to $400 million on the deal. The reason is that before Packer sold his stake, he off-loaded onto ANI a company he no longer wanted, an environmental engineering firm based in Europe, called ABT.

The deal in question came to light when Ross Palmer joined the board of ANI after it took over his family firm, Palmer Tube Mills. Palmer and his wife Sue became the biggest shareholders of ANI. It was Palmer who revealed the extent of ANI's losses, and started investigating the transactions with Consolidated Press. Ross Palmer would not be interviewed by Four Corners, but Sue Palmer agreed.

SUE PALMER: There were a lot of "Do not disturb" signs put up. I'm on this program and people have said, "You would go on Four Corners, and talk about Kerry Packer?" with amazement. Intelligent people, Australians. I find that that kind of power, whether it is real or perceived, which causes fear, is very dangerous."

NEIGHBOUR: Internal company documents from ANI and Consolidated Press Holdings, obtained by Four Corners, shed new light on the history of the deal. In 1991, Kerry Packer set out to slash costs at Consolidated Press. An edict went out demanding an action plan on all problem investments and assets for Kerry .

The European waste treatment firm, ABT, was one such problem asset. Packer wanted to arrange for ANI to take over the management of the ailing company. It was the first step to Consolidated Press off-loading ABT.

SUE PALMER: ANI was used, I believe, just as a dumping ground for this company. Two weeks after the deal was completed, Kerry Packer sold all of his interests, 48%, in ANI. If ABT was a good company, why were they so keen to unload it, and leaving the other 52% shareholders with a company that was going to bring it down, a division that was going to bring ANI down?

NEIGHBOUR: Legal advice to the ANI board concludes that ANI appears to have a case for damages against Consolidated Press, and some of the ANI's then Directors. The advice cites evidence of possible breaches of the requirements to act with honesty, care and diligence under the Corporations Law, and possible breaches of the Trade Practices Act over misleading and deceptive conduct .

TED ROFE: As a shareholder in ANI, I'd be concerned at an investment which had cost several hundreds of millions of dollars …

NEIGHBOUR: The Australian Shareholder Association, like the Palmers, says ANI investors have reason to be concerned .

ROFE: Shareholders are entitled to expect their directors act diligently in the interest of the shareholders, and I think this case, in particular, illustrates the importance of the role of independent directors of listed public companies .

NEIGHBOUR: ANI's own assessment showed the prognosis for ABT was poor. Contracts signed by ABT in Europe were very adverse. There was the opportunity for a financial disaster. The situation had been allowed to run totally out of control .

While ABT was only worth $2 million, it carried liabilities worth tens of millions. The view of finance director, Paul Reading, was that taking on such a burden would be clearly incorrect. ANI as a public company could not take over liabilities entered into by one shareholder, Consolidated Press .

And yet in September 1991, the purchase of ABT was approved at a meeting of the ANI Board. Despite all the information that was available, the minutes showed the directors present voted unanimously for the deal. What's more, they agreed to take over from Consolidated Press all liabilities, including for any further losses. Details of this indemnity, which has since crippled ANI, were not revealed to shareholders in either Australia or the United States .

BRUCE BABCOCK: Their failure to disclose to shareholders, and not to tell them that they had taken on this enormous risk, or open-ended risk, was unacceptable. That type of thing should be disclosed to shareholders so they can assess the true value of the company they're owning .

NEIGHBOUR: The independence of the majority of ANI's directors is a major issue. Of the seven directors at the meeting, three had been appointed by Consolidated Press. The records show that another two, Paul Reading and Evan Rees, were being paid bonuses agreed to by Kerry Packer, of $2 million each. The bonuses were meant to be rewards for helping to rationalise ANI, but it clearly wasn't ANI that benefited from this deal. It was Packer and Consolidated Press .

SUE PALMER: It's quite extraordinary. $2 million was promised to two directors, before and after this ABT acquisition. They received $1 million each, promised the other million at a later date. My personal opinion is that it sounds like to me that kind of money could buy co-operation. It's too powerful .

NEIGHBOUR: ANI shareholders were kept in the dark about key aspects of the ABT deal. In the 1992 annual report, the purchase of the ABT doesn't even rate a mention, and there's no explanation for the huge bonuses paid to two directors. The full details of the indemnities adopted by ANI were not revealed in the accounts until five years later, when the auditors started asking questions. There was much at stake for ANI shareholders in this transaction, and yet the directors never sought shareholder approval for the deal .

Under the rules of the Stock Exchange, directors must obtain shareholders' approval for any transaction worth more than 5% of the company's value. When ANI's finance director, Paul Reading, did the calculations, the value of the deal, including the indemnities, came to $33 million, enough to require shareholder approval .

The records show that a second calculation was then done, which re-valued the deal at $18.3 million, which was under the threshold for shareholder approval. The legal advice to the current board is that there must be genuine concerns over the validity of the lower calculation that was used .

The directors' handling of the ABT deal has caused ANI's American investors to back the Palmers in their call for a full investigation .

BRUCE BABCOCK: The fact that it was a related party transaction does indicate that the shareholders should have been told. It's even more important for shareholders to get all the information, because Consolidated Press had just recently become a major shareholder in ANI. They carried out this transaction, and then immediately sold their position in ANI. That is somewhat questionable. Or for Consolidated Press, they made a profit from this transaction. It may have been a normal business decision but we don't know because the details were not disclosed to shareholders .

NEIGHBOUR: Two separate legal opinions the ANI board obtained Four Corners conclude that there appears a basis for claims against Consolidated Press, and against four of ANI's then directors .

VOICE OVER: "ANI offers shareholders strong returns from investment in one of Australia's most responsible companies".

NEIGHBOUR: But once again, shareholders have been kept in the dark. The legal advice revealed by Four Corners had not been disclosed. The current ANI board is waiting on yet another legal opinion.

ROSS PALMER: These are some of the new range. This particular one is the "All Australian Salad".

NEIGHBOUR: Ross Palmer was recently thrown off the board for his campaign for a full investigation.

SUE PALMER: I think Ross was in for the shock of his life when he discovered that they turned their head away from it. My question is why did they turn their head from it".

SUE PALMER: Because of the very perception of people wondering why I'm on this show. It's fear. You don't question what Kerry Packer does." 16 The transcript of the entire programme was 486 lines long. The section extracted was 107 lines long. The amount particularly relied on by the plaintiff at trial was 78 lines. That represented some 16% of the transcript in terms of number of lines. The ABC emphasised this, contending as part of its case that the references to Mr Reading were merely incidental to the main concentration on Mr Packer. I do not agree. They were significant enough to warrant separate attention.

Section 7A of the Defamation Act 17 The jury were directed under s7A of the Defamation Act 1974, quoted below, to determine whether certain specified imputations were conveyed by the broadcast and if they were whether they were defamatory or not. DEFAMATION ACT 1974 7A Functions of judge and jury (1) If proceedings for defamation are tried before a jury, the court and not the jury is to determine whether the matter complained of is reasonably capable of carrying the imputation pleaded by the plaintiff and, if it is, whether the imputation is reasonably capable of bearing a defamatory meaning.

(a) the matter is not reasonably capable of carrying the imputation pleaded by the plaintiff, or (b) the imputation is not reasonably capable of bearing a defamatory meaning, the court is to enter a verdict for the defendant in relation to the imputation pleaded.

(a) the matter is reasonably capable of carrying the imputation pleaded by the plaintiff, and (b) the imputation is reasonably capable of bearing a defamatory meaning, the jury is to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory." 18 Those imputations said to arise, and in relation to which the jury were required to reach answers, were: "1. Has the Plaintiff (Paul Reading) established that the "Four Corners" Program broadcast on 7 April 1997 (the first matter complained of) conveyed the following imputations to the ordinary reasonable viewer (or any imputations which are not substantially different from them):

(a) The plaintiff accepted a bribe of $2 million; (b) The plaintiff, in breach of his duties as a director of ANI, voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million; or (c) The plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer; (d) The plaintiff, as a director of ANI, dishonestly voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT, agreed to pay him $2 million; (e) The Plaintiff committed a serious breach of his duties as a director of ANI by agreeing that ANI take over substantial liabilities owed by Consolidated Press even though he knew taking on such a burden was clearly incorrect; (f) The plaintiff, as a director of ANI, dishonestly changed calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders; (g) The plaintiff breached his duties as a director of ANI by changing calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders; (h) The plaintiff, as a director of ANI, acted contrary to shareholders' interests by deliberately concealing from shareholders key aspects of the deal for ANI to purchase ABT." 19 Question 3 of the questions put to the jury asked the same question in relation to the program broadcast on 8 April 1997 (a repeat of the program aired on 7 April 1997). 20 Imputations (b) and (c) were put in the alternative. That meant that if one question was answered in the affirmative then the next question need not be answered. The question sheet to the jury read: "If you answer (b) "yes" go to (d). If you answer (b) "no" go to (c)". 21 The trial judge commented on the jury's findings: "37 After some deliberation the jury indicated that they had answers to the questions asked of them and I reconvened the court to take those answers. The jury answered that imputations (a), (b), (e), (f), (g) and (h) were not conveyed.

38 The jury answered 'yes' to the question of whether imputation (c) was conveyed but 'no' to the question of whether it was defamatory.

39 The jury answered 'not applicable because of the wording' to imputation (d).

40 Such answer was clearly not an answer available to the jury. After seeking the assistance of counsel, I requested them to return to the jury room for further deliberation of whether they had a unanimous answer to the questions asked in relation to imputation (d)." 22 After the jury had indicated that they had reached an answer but before they returned, senior counsel for the opponent made an application that the jury be discharged. The application was initially made on the basis that the jury had misconducted themselves by failing to answer a question which had been their sworn duty to answer. 23 The trial judge continued: "41 The jury then notified me by note saying: 'We have reached agreement in respect of matters 1(d) and 3(d). The jury's apologies for mis-reading the instructions'. 24 The submission of misconduct was withdrawn by the opponent. But the application to dismiss the jury was maintained on an argument to the effect that if the jury had misunderstood the questions which had been clearly explained to them, then their verdict was unfair, and in the context of their answers, perverse. 25 The trial judge then continued (I quote from the judgment at [44] verbatim, though there are some obvious typographical errors: "42 The Court was reconvened and at that time the defendant made a [further] application to discharge the jury. The application was on the bases that:

(a) the jury had demonstrated a lack of understanding of what was required of them; (b) unfairness to the defendant since the jury would not reach a fair decision on imputation (d); (c) uncertainty as to whether the confusion over imputation (d) 'infected' the other answers and the lack of power in the court to question to [sic] jury to determine this controversy. (d) an apparent perversity in relation to the jury answering 'Yes' to imputation (c) being carried but 'no' to it being defamatory.

43 This final ground in the application was on the basis that neither the plaintiff nor the defendant - nor myself in the summing up - had put to the jury that if any of the imputations were conveyed they would not be defamatory.

44 Indeed, Mr Walker, SC, for the defendant had said to the jury: So that is questions 3 and 4 looked after. They will double up. What about question 2? Mr McClintock is not known for his timidity as an advocate. I would probably not say a lot if they are defamatory. If is not a bad profit [sic]. I am not going to waste your time suggesting that if any of these things were conveyed they would not have intended [sic - damaged] Mr Reading and [sic] in the estimation of the ordinary decent members of the community. There are some you might wonder about and discuss amongst yourselves. There is really nothing a barrister can add to that question. Some of them are really obvious. Ones Mr McClintock emphasised correctly, from his point of view, accepting a bribe. I can't think of any way that could be anything other than bad about anybody. You might think that all of them are pretty much in the same category. It is very difficult to see any worth spending time on. You might think H [imputation (h)] would be worth thinking about because you might think some things about company law that I will speak to you about later that shareholders aren't entitled to know everything." 26 It is apparent that the claimant's counsel, Mr Walker, SC, was not then pressing upon the jury with any vigour, any argument that the imputations, if found to be carried, were not defamatory, with the exception of imputation (h). However, the ABC contends that it never formally conceded that the other imputations, if found, would be defamatory. The words "you might think that all of them [semble including imputation (c)] are pretty much in the same category" (as imputation (a) namely accepting a bribe) was explained as merely recognition that it was for the jury to decide that matter. With some hesitation, I would accept that the ABC did not formally concede that imputation (c) was defamatory, though it came pretty close. 27 The trial judge recognised that the question of whether an imputation is conveyed, or whether it is defamatory once conveyed, is a question solely for the jury. However His Honour found that: "the apparent inconsistency in the answers, once these submissions had been put to the jury, did raise a concern over whether the jury had properly understood their function. This concern was compounded by their answer to questions relating to imputation (d)." 28 The trial judge acceded to the plaintiff's application to discharge the jury and ordered a new hearing. However, he did first record the jury's answers as I note below. 29 The trial judge made further comments on the conclusions of the jury said to illustrate their misunderstanding of the questions asked of them: "48 This was not simply perversity but involved contradictory, inexplicable conclusions contrary to the common ground of the parties represented by experienced counsel. There seems to be an argument of common sense and efficiency that these controversies should be resolved at a trial level rather than requiring the parties to seek appellate relief with attendant costs and delay.

49 I am conscious that s55E of the Jury Act 1977 states that a jury is automatically discharged after returning a verdict. However, I also note Part 34 r 8A of the Supreme Court Rules (which applies to proceedings commenced by statement of claim pursuant to Pt 34 r 2(1) of the Rules) provides: Where, at a trial with a jury, a verdict is given or a finding or assessment is made, the Court may, on the motion of any party or of its own motion, give judgment as it thinks fit notwithstanding the verdict.

50 I am therefore satisfied that I have power to reject the answer given by the jury in these extraordinary circumstances where they seem to have misdirected their minds to the questions asked of them in such a fundamental way as to amount to no clear answer of the questions asked of them and where it seems they have misapplied the directions of law given to them in submissions by the parties and in summing up. The cure for such a breach of the jury function is, in my view, and pursuant to Pt 34 r 8A, either a redirection or, if that will not cure the apparent defect, a discharge." 30 The jury's answer to imputation 1(d) and the corresponding 3(d) was received by the trial judge and given to the Court, despite the jury being discharged. The jury returned the answer 'no' to whether imputation (d) was conveyed.

Resolution of Leave to Appeal and Appeal 31 The issues are dealt with in the following order: (a) Whether the trial judge was bound to record the unanimous answers of the jury and enter judgment for the claimant. (b) Whether the trial judge had the power to discharge the jury and order a new trial and if so, whether in the circumstances it was properly capable of being so exercised. 32 If the answer to these questions is in the affirmative so that leave to appeal and appeal succeed, there remains the cross-appeal. It concerns whether (a) the jury's answer that imputation (c) was not defamatory was a conclusion that no reasonable jury, properly directed, could reach and, if so, (b) the implications for the scope of a new trial as regards the other imputations which the jury decided were not conveyed. 33 It is convenient to consider together the first two questions, that of power and, if there is power, whether its exercise gave rise to appellable error. 34 I have earlier recorded the sequence of events that attended the jury's apparent confusion in relation to imputation (d), where the jury first answered "not applicable because of the wording". While it is impermissible to speculate about a jury's process of reasoning one can here see what the jury actually did. Thus it is clear that the jury, when requested by the trial judge to return to the jury room for further deliberation of whether they had a unanimous answer to the questions asked in relation to imputation (d), did come back with an answer, as it was required to do. It was that imputation (d) was not conveyed. Moreover, after the jury had indicated that they had reached an answer but before they returned, senior counsel for the opponent made an application that the jury be discharged. He did so contending that the jury had misconducted themselves by failing to answer a question which had been their sworn duty to answer. 35 That submission of misconduct was withdrawn by the opponent. The application was then renewed on grounds which included unfairness to the defendant "since the jury would not reach a fair decision on imputation (d)" and because of "uncertainty as to whether the confusion over imputation (d) 'infected' the other answers and the lack of power in the court to question to [sic] jury to determine this controversy". 36 The claimant opposed the discharge on a number of bases: (a) It was clear that the jury simply misunderstood the order of the questions and there was no reason to infer that any further answer would be unfair in any way; (b) It was not apparent that the court had the power to discharge the jury in these circumstances; (c) Whether the answers were irregular or perverse was a matter for appeal not discharge. 37 The claimant had requested that as the trial judge was minded to discharge the jury, the further answers from the jury should first be obtained in order to preserve the utility of any appeal against such a decision by the claimant. That was in fact done. 38 Thus the trial judge did dismiss the jury and order a new trial, but he did so only after first obtaining the jury's further answers. The jury had answered questions 1(d) and 3(d) "No", meaning that the imputation was not conveyed. 39 The first point to make clear is that, contrary to the opponent's submissions (written submission of 10 September 2003 at para 7) the trial judge did not decline to record the jury's answers. What he did do was both record the jury's answer concerning imputation (d) and discharge the jury. The question is therefore whether in those circumstances the trial judge had the power thus to discharge the jury and whether it was properly exercised. 40 I consider that the trial judge undoubtedly had an inherent power to discharge the jury. If appellable error lay, it lay only in the exercise of that power in the particular circumstances. As to power itself, a trial judge has an inherent power in relation to the proper conduct of proceedings to discharge a jury at any time up until the point where the trial judge has accepted and recorded the jury's verdict. It is only at that point that each could be said to be functus officio: see Bromley v Tonkin (1987) 11 NSWLR 211, 236C; Cunningham v Ryan (1919) 27 CLR 294; R v Meany (1862) 169 ER 1368; Ex parte Burns (1893) 10 WN(NSW) 70. Accordingly, if the jury is not functus officio until after the verdict has been recorded, the judge has power to discharge the jury until that occurs. 41 While a judge may, in the exercise of his or her discretion, seek elucidation of answers given by a jury, he or she is not bound to do so. That discretion to seek elucidation should however be exercised sparingly and with care, given the dangers. As the High Court said in Mourani v Jeldi Manufacturing Pty Ltd (1983) 57 ALJR 825 at 826: "When it appeared from the answer given to one of the questions that the jury may have, to adapt the learned trial judge's words, misunderstood or misapprehended their precise task, His Honour was entitled, in the exercise of his discretion and subject to the ordinary supervision by an appellate court of the exercise of such a discretion, to seek elucidation of the answer which the jury had given to a particular question and, if the jury was prepared to provide such elucidation, to give the jury an opportunity of amending the answer to overcome the effect of manifest error or mistake. The course of seeking such elucidation is fraught with danger and the discretion to seek it should be exercised sparingly and with care." 42 I agree with the claimant's submission that it is implicit in this passage that the trial judge has a discretion not to seek such elucidation but rather to discharge that jury and order a new trial. However, the trial judge did seek elucidation. With appropriate care, the trial judge did seek an answer regarding imputation (d) in the manner I have described. 43 Granted that the trial judge had power to take the course he did, the question becomes one of whether the power was properly exercised. I remind myself of the limited scope for appellate intervention in a matter of practice and procedure where primacy is to be given to the decision of the trial judge: Morgan v John Fairfax & Sons Limited (1998) 13 NSWLR 208. 44 The discretionary reason given by the trial judge for discharging the jury was that it was clear that the jury had misapprehended the task of which it was charged and that there was a live possibility of prejudice to the opponent if the jury were directed to re-consider the matter. The opponent argued on appeal that there was nothing ambiguous at all about the jury questions and in particular as to the relevant instruction on the question sheet "if you answer (b) 'yes' go to (d). If you answer (b) 'no' go to (c)". Consequently, it was said, the jury's refusal in the first instance to answer questions 1(d) and 3(d) could be explicable only on the basis that it had seriously misapprehended its task, compounded by the answer which the jury did give, namely, "not applicable because of the wording". Thus it was said that the jury had in fact been clearly directed that (b) and (c) were the only alternatives and therefore that questions 1(d) and 3(d), with the other questions, had still to be answered. It is said that if the explanation was as the claimant would have it, namely confusion as to whether (b) and (c) were alternatives or rather (c) and (d), the opponent contended that the jury would have found the answers to questions 1(e) to (h) "not applicable". 45 But to my mind that latter proposition simply does not follow. It appears that when the jury looked at the question sheet, having answered imputation (b) 'no' the jury thought it had to go to (c) and therefore not (d). What the jury in fact did was to answer (b) 'no'. The jury then did go to (c) but ignored (d). 46 The end result of all this was as follows: (a) imputation (d) had now been answered in the negative indicating, with its apology, that the jury now appreciated that imputations (c) and (d) were not the intended alternatives, but rather (b) and (c), and (b) the question of whether imputation (b) was conveyed had earlier been answered in the negative, but as it was so answered it was not in contradiction to an affirmative answer to alternative (c). 47 Moreover, in the steps that followed, the trial judge followed an entirely conventional path in re-directing the jury after answers had been proffered (see Cunningham v Ryan (1919) 27 CLR 294 endorsing the decision in R v Meany (supra), a principle consistently applied by the Court of Appeal in New South Wales: Bradbury v NZ Loan and Mercantile Agency Co Ltd (1927) SR(NSW) 15 per Street CJ at 18; Bromley v Tonkin (1987) 11 NSWLR 211 and in particular Clark JA at 235-6; Lithgow District Hospital v Miller (NSWCA, 8 December 1994, unreported) per Sheller JA at page 9). 48 For the trial judge so to seek clarification is not inconsistent with the statutory strictures of s7A of the Defamation Act 1974. Even treating these strictures as constituting a code laying down the substantive role of judge and jury in identifying any imputation and whether defamatory, nonetheless a judge conducting such a jury trial must necessarily retain the ancillary procedural powers needed to accomplish that purpose. When s7A(3) requires the jury "to determine whether the matter complained of carries the imputation and, if it does, whether the imputation is defamatory", that pre-supposes the judge retains such ancillary powers as are needed, such as here to re-direct a jury whose answers warrant this. 49 A further complaint is that the trial judge discharged the jury and ordered a new trial, purporting to draw on a head of power not available for that purpose. I refer to Pt 34 r8A of the Supreme Court Rules, which on any view could not provide the source of power for discharging the jury. A related complaint is that the discharge was based, erroneously, on the jury's initial non-responsive answer concerning imputation (d) without taking into account the later responsive answer which followed the judge's redirection. 50 Part 34 r8A is in the following terms: "8A Where, at a trial with a jury, a verdict is given or a finding or assessment is made, the court may on the motion of any party or of its own motion, give judgment as it thinks fit notwithstanding the verdict." 51 The purpose of that rule is to permit a trial judge to take a jury's verdict notwithstanding an objection of law. This is so that the jury verdict is available if the judgment is reversed on appeal. But the purpose of the rule is not to enable the court to give a judgment contrary to verdict: Field v Timber Industries Ltd (NSWCA, 7 June 1990, unreported). Self-evidently the rule says nothing about discharging a jury. But the power for this is to be found, as I have earlier stated, in the judge's inherent power to control the proper conduct of proceedings. That power need not be specifically invoked, to remain available to a court in these circumstances. 52 However, I would conclude, leaving aside the question raised by the cross-appeal, that while there was power in a jurisdictional sense to do as he did, the trial judge with respect, had no sufficient basis to exercise that power by discharging the jury in these circumstances, when this was based simply upon the jury's initially non-responsive answer concerning imputation (d). The sequence of events, culminating in the jury's ultimate answer to whether imputation (c) was conveyed as well as the jury's indication that it had (earlier) misunderstood the instructions, indicates that any confusion on the jury's part was dispelled. Therefore, leaving aside the matter raised by the cross-appeal, it could not properly be said that on that basis the jury had "seriously misapprehended" its task by the time its remaining answers were recorded.

The cross-appeal 53 That leads finally to the cross-appeal. The opponent, as cross-claimant, contends that when the jury found that the imputation "the plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer" was conveyed but not defamatory, the latter conclusion was one that no reasonable jury, properly directed, could reach; John Fairfax Publications Pty Ltd v Rivkin (supra). I shall use the shorthand "the irrationality test" for that formulation by the High Court of the proper test to be applied. The judgments in Rivkin serve also to illustrate the application of that test in appellate review of a jury determination of this kind. Callinan J at [184] emphasises that "the jury has an especially significant constitutional role to play in those cases in which it participates. Both as a practical and legal matter, a jury's decision on a factual question, although by no means impregnable, does have authority over and above that of a decision of a judge sitting alone to determine a factual question. The jury is representative of the community. Its members are better placed than judges to give meaning to, and evaluate, the spoken and written word and its impact upon the community. Nor should it be assumed that juries approach their task with heightened or lowered suspicion and prejudice. History shows that not all lawyers and judges are strangers to suspicion. It may accordingly be accepted that the occasions for judicial correction of jury verdicts will be extremely rare. But such occasions do arise. That they may, and then will require appellate intervention, follows from the right of appeal which the legislature confers in respect of them…" 54 It is important to place Rivkin in context. Rivkin was a decision solely about whether the printed material carried certain imputations; there was no further issue about whether they were defamatory. 55 All of the judges save McHugh J concluded that no reasonable jury could reach any other conclusion than that a number of the imputations were conveyed, thus disturbing the jury verdict to the contrary. Thus Callinan J recognised that this was one of those rare occasions requiring judicial correction of the jury verdicts though "the occasion for judicial correction of jury verdicts will be extremely rare" at [184]. 56 At [19-20] McHugh J, though by way of obiter, observed: "[19] Occasions for invading the jury's function occur even less frequently when the jury has found that a publication is not defamatory. Rarely have appellate courts set aside a jury's finding that a publication was not defamatory. So rarely has it been done that in 1928 in Lockhart v Harrison,9 Lord Buckmaster could say "such cases occur so rarely that within the last century there are only two to which our attention has been drawn in which this power has been exercised." There have not been many since.

[20] It is only when the publication contains a "plain and obvious defamation incapable of any innocent explanation"10 or where the words are "necessarily"11 defamatory that an appellate court is entitled to find that no reasonable jury could have failed to find the meaning alleged or that it was defamatory. As Chief Justice Darley observed in Kelly v Daily Telegraph Newspaper Co,12 if the words of the publication have "any possible construction which can be put upon them, susceptible of an innocent meaning, then the verdict of the jury for the defendants is conclusive and cannot be disturbed." Hence, an appellate court can set aside a verdict of no libel on the ground of unreasonableness only when the words of the publication are not capable of any but a defamatory meaning.13 Only when the defamation is "clear and beyond argument"14 can an appellate court set aside a jury's finding that the publication does not have the meaning alleged or that the meaning alleged is not defamatory." 9 (1928) 139 LT 521 at 523. 10 Lockhart v Harrison (1928) 139 LT 521 at 523. 11 Geach v Hall (1890) 16 VLR 386 at 389, 391, 392; Blashki v Smith (1891) 17 VLR 634 at 636, 638; Rofe v Smith's Newspapers Ltd (1927) 27 SR(NSW) 313 at 316 (PC); Thompson v Truth & Sportsman Ltd (No 1) (1929) 31 SR(NSW) 129 at 134-5. 12 (1897) 18 LR (NSW) 358 at 361. 13 Doyle v McIntosh (1917) 17 SR (NSW) 402. 14 Broome v Agar (1928) 138 LT 698 at 702; Cairns v John Fairfax & Sons Ltd [1983] 2 NSWLR 708 at 716-17. 57 He cited Cairns v John Fairfax and Sons Ltd (1983) 2 NSWLR 708 where (at 720) Mahoney JA observed that it would be more difficult to persuade a court to set aside a jury's verdict that words were capable of a non-defamatory meaning than a jury verdict that an imputation was not conveyed. This was because, in his Honour's view, "there is … more difficulty in the court holding that a jury could not form a particular view as to general community standards than in deciding whether a word is capable of a non-defamatory meaning." 58 Of the majority in Rivkin Kirby J alone dealt with the defamatory question. He however drew no distinction between the two questions when it came to disturbing a jury verdict; that is, on the first question of whether to find an imputation and the second question of whether to find it defamatory. At [140] he related harm to reputation from a homosexual imputation to the "time, personality and circumstances". He did so without suggesting that the jury's determination of whether or not such imputation was defamatory foreclosed judicial disturbance of that verdict, or rendered it even less likely to be disturbed than a verdict on whether that imputation was conveyed. Indeed at [151] he concludes that the test is whether the jury verdict was "reasonably open", drawing no distinction between the two questions. Thus at [151] he says: "[151] In every case it remains for the appellate court to subject the jury verdict to analysis, allowing for difficulties inherent in the absence of reasons and in circumstances where only limited means are available to decide how the jury may have reached their conclusion. Nevertheless, the touchstone is - and should be - one of reasonableness. Nothing else would coincide with judicial authority. Nothing else would fit with the appellate court's duty as a receptacle of statutory power. ….." 59 More recently the Court of Appeal considered a jury verdict on whether an imputation was defamatory in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107. I would adopt what McColl JA said at [172-4], recognising that "highest respect" for the jury verdict on whether an imputation is defamatory still requires that it be set aside where it is one that no reasonable jury, properly directed, could reach. The test is not perversity, as McColl JA recognises but is less demanding, though the test still remains a high one. "172 Although the majority of the High Court in Rivkin thought a standard that a jury finding should be "perverse" before it could be set aside was a "more demanding test than the law requires", I do not understand the majority's decision to be inconsistent with Spigelman CJ's proposition [in Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68 at [41]] that the test is "a high one". As much follows from Callinan J's acceptance (at [184]) that "the occasions for judicial correction of jury verdicts will be extremely rare."

173 Further, I note that historically the test of 'perversity' has been regarded as a shortened expression of the test that "the verdict is one which reasonable men could not have reached or that is not susceptible of any rational explanation": see Hardy v Harris (1986) Aust Torts Reports ¶80-003, BC8601168 (per Glass JA with whose statement of principle Kirby P at 1 and Priestley JA at 11 agreed).

174 Finally, I would understand Callinan J's reference to the jury as "representative of the community" ( Rivkin at [183]) as supporting the proposition that the highest respect should be accorded to a jury's determination of current community standards, a view his Honour has expressed elsewhere: see Liftronic Pty Limited v Unver [2001] HCA 24 at [60]; (2001) 75 ALJR 867 at [60]. 60 When an appellate court is asked to review a jury determination that an imputation is not defamatory, it starts by construing the imputation to determine its most innocent possible construction. That the Court does before considering the effect on reputation of that imputation so construed. That first stage of construction is akin to the process of determining the most innocent construction of the published material, to see if it conveys the imputation sought to be attributed to it. In the latter case, there emerged in Rivkin a clear difference in the approach of McHugh J in minority, and the majority judgment. McHugh J was prepared to allow an innocent construction as open to the jury in circumstances where the majority were unwilling to do so. The earlier quoted passages from McHugh J, [10-20] appear to explain why. The bar is raised to the point where there must be a "plain and obvious defamation incapable of any innocent meaning", akin to a perversity test; whereas the majority put the test in distinct and somewhat less heightened terms of "no reasonable jury could have failed to find the meaning alleged or that it was defamatory". When it came to determining what was the most innocent possible construction of the imputation itself, in order to determine whether to disturb the jury's verdict that it was not defamatory, it is the latter test which must be applied to that construction question, as well as to the reputational one. 61 Thus whilst McHugh J left the jury verdict undisturbed when the jury rejected various imputations, Gleeson CJ reached the opposite conclusion. He would have rejected a jury's answer when it presented "a challenge even to the most adroit rationalisation" (at [4]). 62 Kirby J took a similar position when it came to determining whether particular imputations were carried by the printed matter, eschewing innocent readings which "bordered on the starry-eyed" or "clutched at the straws of unrealistic hypothesis". There is no reason to doubt that Kirby J would have applied the same approach to the construction task inherent in the defamatory question. I quote: "[146] In the setting, any innocent reading of the accusations stated or hinted in the case of Mr Rivkin would border on the starry-eyed. Read in isolation, as words only, clever verbal hypotheses might be raised to excuse or explain the jury's answer on this imputation. That all the "rumours" about Mr Rivkin's "cronies" were untrue. That the reputation of the café as a "hangout" was false. That the "ex-drug dealers" had all reformed. That the "criminal backgrounds" were for jaywalking or existed in the distant past.

[147] Nothing in the function of the Court of Appeal, performing its statutory duty, required that court to take such an unrealistic approach. Performing a proper appellate reconsideration of the jury's answer in this respect did not require the Court of Appeal to clutch at the straws of unrealistic hypotheses that put a uniformly innocent gloss on an imputation that, in the context, partook of what the matter complained of itself described as a "most sinister" matter. ….." 63 Having completed the construction task inherent in the defamatory question, the same irrationality test will apply to the final part of that question, namely effect on reputation. Here general community standards do come into play and call for greater appellate restraint, though not abdication. Thus when an imputation is not able to be construed so as to be capable of possible innocent explanation, it does call into question the jury's verdict that it was not defamatory, still applying the irrationality test; compare Gleeson CJ in Rivkin at [6]. The difference with McHugh J appears essentially one of degree and then only in relation to the construction question. Once answered so as to preclude innocent explanation, McHugh J at [20] would appear to accept that "an appellate court is entitled to find … that [the meaning alleged] was defamatory". 64 Here a television broadcast, like an article, though viewed rather than simply read, "has to be read as a whole. That does not mean that matters that have been emphasised should be treated as if they have only the same impact or significance as matters which are treated differently …" per Callinan J at [187]. There is a need to view the imputation in its entire context (per Kirby J in Rivkin at [124]), here one which if anything sharpened the sting. 65 Nor is it irrelevant to consider the jury's answers in relation to the remaining imputations, all of which were found not to have been conveyed, and which at least in the case of imputations (a), (d) and (f) were imputations of either corrupt behaviour or dishonesty. 66 Moreover, imputation (c) must be understood as not standing alone but in a broadcast context essentially alleging (a) Mr Reading had received a bonus from Mr Kerry Packer of $2 million and had received $1 million with a further $1 million promised at a later date, this being what a viewer would likely understand to be the means whereby he was "selling his co-operation to Kerry Packer", (i) as ANI's Finance Director, he had changed calculations which originally required that the purchase of ABT had to be submitted to shareholder approval, (ii) with the other directors he had as Finance Director formed the view that taking on the burden of ABT's liabilities "would be clearly incorrect" but (iii) yet he (with others) voted unanimously (albeit not dishonestly) for the deal to purchase ABT when approved at a meeting of the ANI board in September 1991, as well as agreeing to take over from Consolidated Press all liabilities, including for any further losses. 67 It is true that one must consider whether, without "adroit rationalisation" (per Gleeson CJ in Rivkin at [4]) there was any possible, not fanciful, construction which could be put upon the imputation in question as would be susceptible of a possibly innocent meaning consistent with the jury's verdict (compare Kirby P in Costains (Australia) Pty Limited v Atkinson (NSWCA, 5 October 1995, unreported) at [3] to [4]). Here it is being said of a finance director that he actually breached his duties as a director by selling his co-operation to Kerry Packer in relation to a transaction that required the company of which he was finance director to take on a burden of liability which he himself considered "would be clearly incorrect". Let it be assumed that the jury accepted that there was no dishonesty or corruption. But putting matters at their most favourable in this way, as authority requires, Mr Reading nonetheless must be understood as having breached a duty of diligence at the least, and that in the very area of his professed competence, namely finance director. Moreover, that breach involved the selling of co-operation to Kerry Packer in relation to a transaction which the broadcast makes clear was one which caused crippling loss to ANI. 68 Mr Reading was not just an executive director but carried the title "finance director". Accepting that his breach of duties was by reason of "negligence, inadvertence or inattention" rather than dishonesty (see [18] of the Reasons for decision of the trial judge) that critical depiction of events bears directly on Mr Reading's reputation, both as board member and finance director, for managerial and financial competence. No reasonable jury could conclude otherwise than that such a depiction bears adversely on his reputation as a finance director in both the commercial and wider community. This is more especially when the imputation has the added sting that he actually sold his co-operation to bring about a transaction which crippled ANI, he knowing "that taking on such a burden would be clearly incorrect" (at line 332). Indeed even on the heightened test adopted by McHugh J in Rivkin, there is a "plain and obvious defamation incapable of any innocent explanation". 69 In a television broadcast, visual impression, including graphic headlines must necessarily have significant bearing (compare Callinan J in Rivkin at [47]). Line 332 of the broadcast actually quotes from a memorandum from Mr Reading, highlighting his words "taking on such a burden would be clearly incorrect" so reinforcing the depiction described above. 70 When one considers the approach of the majority judges in John Fairfax Publications Pty Ltd v Rivkin, they in different ways eschew, in recognising the constitutional role played by the jury, any "requirement to clutch at the straws of unrealistic hypotheses". Thus Kirby J at [147] dealing with the question of whether an imputation could be construed in a way that avoided it being defamatory had this to say: "…Performing a proper appellate reconsideration of the jury's answer in this respect did not require the Court of Appeal to clutch at the straws of unrealistic hypotheses that put a uniformly innocent gloss on an imputation that, in the context, partook of what the matter complained of itself described as a "most sinister" matter. …" 71 Kirby J at [153] (omitting footnotes) explains the essential difference between his approach and that taken by McHugh J in minority in reaching an innocent construction: "…Whilst acknowledging the ingenuity of the demonstration by verbal analysis of the way the jury might have construed different parts of the matter complained of, then extended to an explanation of their answers taken as a whole, it is my view that sight has thereby been lost of what was "reasonably open" to the jury to conclude. Alike with the Court of Appeal, I would conclude that "no reasonable view of the evidence" in this case (being the publications) could sustain the jury's answers on the pleaded imputations in the four identified categories. It follows that the Court of Appeal did not err in its decision in those respects. Professor Fleming puts it well: "In the past there was, it is true, a tendency to give perhaps undue weight to a possible innocent meaning. Today, however … the courts will only reject those "meanings which can only emerge as a product of some strained or forced or utterly unreasonable interpretation".

Conclusion 72 Adopting the standpoint, in Callinan J's words (at [88]) of "[A]n even moderately attentive and reasonable, but not unduly suspicious reader" and adopting the most innocent construction of the imputation so as to preclude dishonesty, such an audience would necessarily think less of the reputation of an executive director responsible for finance, though honest, who thus failed in his directorial and executive obligation of at least diligence. This is more especially when this was because his co-operation had been bought by a bonus payment of $2 million to facilitate a transaction which "crippled ANI" and which involved taking on a burden that in his view was incorrect. What conceivable basis could there be for finding a wholly innocent construction of such an imputation? Taking the most favourable possible construction, the imputation in context is to be understood as conveying that his co-operation as a director and finance executive was bought in breach of his legal duties of (at least) diligence, that he knew taking on "such a burden" (the liabilities of the business bought from Mr Packer) was clearly incorrect and when the outcome was a crippling result for the company. That is a "plain and obvious defamation incapable of any innocent explanation". It goes at the very least to competence, lack of diligence and lack of independent judgment in carrying out his duties. In the commercial if not wider community his reputation must undoubtedly suffer. 73 Giving proper deference to the jury's constitutional role as representative of the community, I conclude that no reasonable jury, properly directed, could reach any verdict other than that imputation (c) was defamatory of Mr Reading. It follows that there must be a new trial as to at least imputation (c) and that the trial judge's discharge of the jury was properly supported on the basis contended for by the cross-claimant in his cross-claim.

Postscript 74 Since formulating the above reasons I have had the advantage of reading the judgment of Ipp JA in draft and that of McColl JA in draft. It prompts me to clarify what is said earlier while respecting fully the reasons that lead Ipp JA and McColl JA to a different view. 75 I am also now able to refer to the recent decision in Gorman v Barber & Ors [2004] NSWCA 402. It I consider has some precedential force here, in its reaffirmation of the defamatory impact of unfitness criticism injurious to professional reputation, no less suffered by a professional doctor as by a professional financial manager; see "Gatley on Libel and Slander" (1998) 9th ed at para 2.29: " Imputation of unfitness for profession or calling . It is defamatory to impute that a person is unfit for his profession or calling owing to want of ability, mental stability, learning or some other necessary qualification, or that he has been guilty of any dishonest or disreputable conduct or any other misconduct or inefficiency therein. This applies to any profession or calling, however humble, so long as it is not illegal. But to say that a person lacks a qualification which he might usefully have is not defamatory for that does not impute incompetence." [footnotes omitted]

Gorman deals with an imputation going to the professional competence of a medical practitioner which the jury held not to be defamatory. On appeal that was held to be a conclusion no reasonable jury could reach. It arose in a context where the doctor was said to have advocated spinal manipulation for various ailments which had caused the patient's death (compare ANI's demise as a company following the transaction the subject of the broadcast). The imputation was that " the plaintiff provides treatment which is useless, dangerous and causes them harm ". At [34] Mason P concludes by observing:

"34 To my mind it is self-evidently defamatory for a medical journal to accuse a medical specialist of serious and harmful lack of judgment, as this publication does in the relevant imputation. The article could not fail to have affected the appellant's reputation as a specialist, deterring doctors from referring patients for treatment and lowering the appellant in the estimation of the readership of Australian Doctor . The article must also have embarrassed the appellant in front of friends and colleagues: the contrary was not suggested." 76 That might be said a fortiori here where the imputation in context goes further than to accuse a professional manager of a serious and harmful lack of judgment. It is an imputation of breaching the law at the level of lack of diligence in the context of a disastrous transaction, where the imputed breach is to accept a bonus from its beneficiary, albeit not dishonestly. While the imputation in Gorman related to the printed word, whereas here we are dealing with the more transient medium of a television broadcast, that consideration cuts both ways. On the one hand the printed word is less a matter of fleeting impression. On the other a television programme brings to bear strong visual reinforcement through sound and image, as indeed it did here. As senior counsel for Mr Reading emphasised, Mr Reading's photograph and name were twice displayed visually during the critical parts of the broadcast out of which imputation (c) arose (excerpted below at [77]). Similarly during the earlier part of the broadcast, he also emphasised that Mr Reading's name was displayed in connection with his reported view that the transaction was "clearly incorrect". The cumulative effect of these graphics forms part of the context in which the question of whether imputation (c) was defamatory falls to be assessed. 77 I do agree with Ipp JA and McColl JA that regard must be had to the jury's rejection of the other imputations. And clearly, in determining whether a civil jury acted reasonably in reaching its verdict, an appellate court must approach the case on the basis most favourable to the respondent to the appeal (per McHugh J in Rivkin at 80 [17]). However that does not permit readings which "border on the starry-eyed" or "clutch at the straws of unrealistic hypothesis" (per Kirby J in Rivkin (supra)). It is what follows from the jury's rejection that needs to be identified with precision, in the context of the actual broadcast where the following critical words appear: "While ABT was only worth $2 million, it carried liabilities worth tens of millions. The view of finance director, Paul Reading, was that taking on such a burden would be clearly incorrect. ANI as a public company could not take over liabilities entered into by one shareholder, Consolidated Press.

And yet in September 1991, the purchase of ABT was approved at a meeting of the ANI Board. Despite all the information that was available, the minutes showed the directors present voted unanimously for the deal. What's more, they agreed to take over from Consolidated Press all liabilities, including for any further losses. Details of this indemnity, which has since crippled ANI, were not revealed to shareholders in either Australia or the United States." 78 Rejecting imputation (b) but accepting that imputation (c) was carried logically can be reconciled only if one assumes that the jury accepted that Mr Packer bought Mr Reading's co-operation; that in context can only mean by payment of the bonus. However, the rejection of imputation (b) would mean that the jury rejected that part of imputation (b) that the respondent "voted for ANI to buy ABT" because Mr Packer agreed to pay him the $2 million bonus. To make logical sense of the jury's verdict one has to assume that the co-operation was manifested in some other way, or that Mr Reading voted for ANI to buy ABT for reasons other than the $2 million bonus. 79 That still leaves one of the damaging elements of imputation (c), namely that Mr Reading's co-operation was bought by Mr Packer in a context where the only way that could be so was from payment of the bonus. 80 The foregoing process of reasoning reflects the fact that when a jury rejects an imputation but accepts another the rejection has to be reconciled with that acceptance. Any element of the imputation rejected can be the reason for that rejection. It does not follow that all elements of the imputation were rejected, more especially when acceptance of another imputation necessarily comprehends one of the elements of the imputation rejected. Of course a rejection of one imputation and an acceptance of another may be impossible to reconcile but that is not the case here. 81 A further reconciliation is necessary between the jury's rejection of imputation (e) and acceptance of imputation (c). That reconciliation depends also on the clear statement in the broadcast that "While ABT was only worth $2 million, it carried liabilities worth tens of millions. The view of finance director, Paul Reading, was that taking on such a burden would be clearly incorrect . ANI as a public company could not take over liabilities entered into by one shareholder, Consolidated Press." [emphasis added] 82 The jury could have rejected imputation (e) by concluding that the breach of Mr Reading's duties was not "serious", consistently with rejecting the other imputations where dishonesty is alleged. However, the context leaves no room for concluding that the jury rejected imputation (e) on the basis that Mr Reading was not of the view "that taking on such a burden would be clearly incorrect". 83 That element of context, not being rejected, necessarily adds to the sting of imputation (c). Not only is Mr Reading, though not dishonest, said to be in breach of his duties as an executive director of ANI in circumstances where his co-operation has been bought and moreover in the area of his professed financial competence; he has in addition voted on a transaction that involved ANI taking on a burden (ABT's liabilities) when he considered this incorrect with disastrous results. 84 It follows that while I agree with the qualifications upon which imputation (c) must be judged as identified by Ipp JA, I do so with the exception of part of the second and the whole of the third. The part of the second qualification with which I do not agree is that "the respondent did not sell his co-operation to Kerry Packer for the bonus of $2 million". The third qualification with which I do not agree is that "the respondent did not agree to ANI taking over the liabilities of CPH in the knowledge that that was incorrect". 85 Turning now to the judgment of McColl JA, I need to re-emphasise only one matter by way of necessary clarification. It is that imputation (c) must be read in the context to which I have referred at [67] above. That context was not limited to failing to act "diligently or carefully in receiving a bonus" from Mr Kerry Packer. Alone, and without context, I accept that if that were all it would be open to a jury to think no less of Mr Reading without being starry-eyed. But the essential context is that viewers were told that the co-operation so "sold" led to a disastrous outcome for ANI, in which (i) as ANI's Finance Director, Mr Reading had changed calculations which originally required that the purchase of ABT had to be submitted to shareholder approval, (ii) with the other directors he had as Finance Director formed the view that taking on the burden of ABT's liabilities "would be clearly incorrect" but (iii) yet he (with others) voted unanimously (albeit not dishonestly) for the deal to purchase ABT when approved at a meeting of the ANI board in September 1991, as well as agreeing to take over from Consolidated Press all liabilities, including for the further losses which eventuated and (iv) he contemporaneously accepted a bonus from Mr Packer, beneficiary of that transaction, in breach of his legal duties of (it is assumed) care and diligence. 86 This context in terms of what this television broadcast represented as an extended investigative piece was clear and unequivocal. A fair viewing of its extended reportage, reinforced by visual images, demonstrated that it could not be simply ignored merely as a matter of fleeting impression. It self-evidently rendered imputation (c) highly damaging to the professional and business reputation of Mr Reading as a finance director. As with a similar attack on the professional competence of the doctor in Gorman v Barker (supra), a conclusion otherwise would be "glaringly improbable". 87 My purpose in writing this postscript is first to acknowledge that these are difficult questions, as the High Court's own difference of view illustrates in Rivkin, as between McHugh J and the majority. Second, it is to clarify the difference in view as I respectfully perceive it between my own consideration of that difficult area and that of Ipp JA and McColl JA.

Scope of New Trial 88 The question that remains is whether not only should there be a new trial on imputation (c) alone or whether a new trial is required in relation to whether any or all of the other imputations should have been found to be conveyed. 89 It is clear from the High Court's reasoning in Rivkin that, as Gleeson CJ explains at [6], a glaringly improbable answer by a jury to one or more of a number of questions justifies an intensified level of scrutiny to the answers to the remaining questions. But "it does not follow … that it is unnecessary to deal with the appellate challenge, on its merits, in the case of each individual answer" (Gleeson CJ at [7]). Accordingly, it is necessary that I should consider each of the remaining imputations that were not found. This is to ascertain whether, paraphrasing Heydon JA at [223] "the jury mistook or failed to perform its function to so great an extent that a re-trial should be ordered on all the imputations" or, I add, some of them. It may be accepted that "it does not follow from the fact that error has been specifically demonstrated in relation to some imputations that it should be inferred from others"; Heydon JA at [223]. 90 To that invocation of appellate restraint should be added the observations of Callinan J at [213]: " The argument of the appellant in the Court of Appeal for the complete retrial ultimately ordered by the Court of Appeal, and the maintenance of that entitlement by the respondent in this court, is based on the fact of the jury's unreasonableness throughout. The argument does have force. In the end however, I do not think that an appellate court should make such a far-reaching order in respect of a jury's answers. The counsels against substitution of a judge's opinion for those of a jury, especially in the performance of the latter's duty under s 7A of the Act should be heeded. …" 91 By analogy to a lengthy deliberation by the jury, which in Rivkin was not a factor given any significant weight by any of the High Court, I do not, for reasons earlier stated, consider that the jury's initial confusion in answering imputation (d) should here be given any significance.

Imputation (a) 92 Imputation (a), is to the effect that "the plaintiff corruptly accepted the bribe of $2 million". 93 The core passage of the matter complained of, which was said to give rise to this imputation, is at lines 245 to 254 quoted below: "Neighbour: The independence of the majority of ANI's directors is a major issue. Of the seven directors at the meeting, three had been appointed by Consolidated Press. The records show that another two, Paul Reading and Even Rees, were being paid bonuses agreed to be Kerry Packer, or $2 million each. The bonuses were meant to be rewards for helping to rationalise ANI, but it clearly wasn't ANI that benefited from this deal. It was Packer and Consolidated Press.

Sue Palmer: It's quite extraordinary. $2 million was promised to two directors, before and after this ABT acquisition. They received $1 million each, promised the other million at a later date. My personal opinion is that it sounds like to me that kind of money could buy co-operation. It's too powerful." 94 The notion that $2 million "could buy co-operation" does in my view leave open the possibility that the jury concluded that, while the bonus was properly earned by Mr Reading, it left him with a sense of reciprocal obligation manifested in a sense of co-operation towards Mr Packer rather than a desire to bite the hand that had fed him. Clearly the dividing line is a fine one but I would not consider the verdict of the jury on that matter to be such that no reasonable jury could reach it.

Imputation (d) 95 Imputation (d), is to the effect that: "The plaintiff, as a director of ANI, dishonestly voted for ANI to make a disastrously bad decision to buy ABT because Kerry Packer, whose company owned ABT agreed to pay him $2 million." 96 It was in my opinion open to the jury to conclude that the plaintiff did not vote dishonestly in making the relevant decision without that being a conclusion that no reasonable jury could reach. There is room in the way the broadcast was presented for a perception that dishonesty as such was not involved on the part of Mr Reading voting as he did.

Imputation (e) 97 Imputation (e), is to the effect that: "The plaintiff committed a serious breach of his duties as a director of ANI by agreeing that ANI take over substantial liabilities owned by Consolidated Press even though he knew that taking on such a burden was clearly incorrect." 98 This imputation arises from lines 331 to 334 which should be read in conjunction with lines 335 to 337 and 345 to 248 quoted below: "While ABT was only worth $2 million, it carried liabilities worth tens of millions. The view of finance director, Paul Reading, was that taking on such a burden would be clearly incorrect. ANI as a public company could not take over liabilities entered into by one shareholder, Consolidated Press." 99 I consider that one could not say that no reasonable jury could conclude otherwise than that the breach was serious. Seriousness must depend on what the reader might conclude as to the reason Mr Reading thought taking on such a burden was incorrect; it could range from a perception of imprudence to a perception that crippling disaster was anticipated. The former impression could have been derived by a jury without irrationality.

Imputation (f) 100 Imputation (f), is to the effect that: "The plaintiff as a director of ANI, dishonestly changed calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders."

Imputation (g): 101 Imputation (g), is to the effect that: "The plaintiff breached his duties as director of ANI by changing calculations valuing the deal for ANI to buy ABT so the deal would not have to be approved by shareholders." 102 These imputations should be considered together. They were said to arise from lines 359 to 368 in the following terms: "There was much at stake for ANI shareholders in this transaction, and yet the directors never sought shareholder approval for the deal.

Under the rules of the Stock Exchange, directors must obtain shareholders' approval for any transaction worth more than 5% of the company's value. When ANI's finance director, Paul Reading, did the calculations, the value of the deal, including the indemnities, came to $33 million, enough to require shareholder approval.

The records show that that second calculation was then done, which revalued the deal at $18.3 million, which was under the threshold for shareholder approval. The legal advice to the current board is that there must be genuine concerns over the validity of the lower calculation that was used." 103 I consider that it could not be said that no reasonable jury could conclude otherwise than that the plaintiff, in changing the calculations, was acting dishonestly or in breach of his duties as director of ANI. In particular the quoted passage leaves open the possibility that the opponent considered the second calculation was properly open to him to make when he made it. Legal advice that there must be "genuine concerns" over the validity of the lower calculation is not to be equated to legal advice that the lower calculation was illegal. The statement goes no further than to state that there were concerns about it that were genuine. Again, I do not consider that the conclusion that that imputation was not made out was one that no reasonable jury could reach.

Imputation (h) 104 Imputation (h), is to the effect that: "The plaintiff as a director of ANI acted contrary to shareholders interests by deliberately concealing from shareholders key aspects of the deal for ANI to purchase ABT." 105 This imputation is said to arise from line 355: "ANI shareholders were kept in the dark about key aspects of the ABT deal." 106 Again, an innocent explanation was open to the jury, namely that there was no deliberate concealment but simply a conclusion that the deal was not legally required to be submitted to shareholders. That could be so, though there were "genuine concerns" about the validity of the lower calculation; see above. Again, one could not conclude that no reasonable jury could conclude otherwise than that the imputation was made out.

Conclusion 107 I do not consider that the jury's verdict in relation to the remaining imputations was such that no reasonable jury could conclude otherwise than that those imputations were not made out.

OVERALL CONCLUSION AND ORDERS 108 I consider that leave to appeal should be granted and that there should be a new trial, but in relation only to whether imputation (c) was defamatory. As no submissions have been addressed on costs, I would propose that the parties be directed to provide submissions within twenty-one days on costs. 109 IPP JA: I have had the benefit of reading the reasons to be published by Santow JA. His Honour sets out the facts and circumstances relevant to this appeal and cross appeal. 110 When the jury first returned from their deliberations, it was obvious from their answers that they had misunderstood the permutations of the questions they were required to answer. That this had occurred was later confirmed when they apologised for "misreading the instructions". 111 In these circumstances, the judge was entitled to clarify the matter and "to give the jury an opportunity of amending the answer to overcome the effect of manifest error or mistake" (Mourani v Jeldi Manufacturing Pty Limited (1983) 50 ALR 519 (at 519 per Murphy ACJ). As Clarke JA said in Bromley v Tonkin (1987) 11 NSWLR 211 (at 236): "The judge is entitled, and indeed under a duty, to question the jury in the event that … the jury appear confused, in an endeavour to resolve the ambiguity or remove the confusion … This principle, it will be seen, has been applied in New South Wales in a line of authority extending from 1852 to 1967 and should be regarded as firmly established." 112 The trial judge dismissed the jury and ordered a new trial, but did so only after first obtaining the jury's further answers. 113 His Honour referred to Pt 34 r 8A of the Supreme Court Rules and said: "[This rule confers] power to reject the answer given by the jury in these extraordinary circumstances where they seem to have misdirected their minds to the questions asked of them in such a fundamental way as to amount to no clear answer of the questions asked of them and where it seems they have misapplied the directions of law given to them in submissions by the parties and in summing up. The cure for such a breach of the jury function is, in my view, and pursuant to Pt 34 r 8A, either a redirection or, if that will not cure the apparent defect, a discharge." 114 Undoubtedly the jury, in their first answer, misdirected their minds to the questions asked of them. Later, after the judge had clarified the questions that they were required to answer, they answered the questions in a manner that showed that they had resolved their confusion and they understood perfectly well the nature of the tasks before them. At that stage, contrary to his Honour's remarks, they had given a clear answer to the questions asked of them and they had not misapplied the directions of law given to them. 115 Moreover, Pt 34 r 8A did not, in the circumstances that prevailed, confer power on the trial judge to discharge the jury. As Kirby P observed in Field v Timber Industries, unreported, NSWCA, 7 June 1990: "[The purpose of Pt 34 r 8A] is to permit judges to take jury verdicts on disputed claims. If, then, a judgment entered contrary to such verdict is later overturned on appeal, the jury's verdict will be available to avoid a retrial."

See also the remarks of Clarke JA, with whom Meagher JA agreed. 116 In view of the errors so made by the trial judge, leave to appeal should be granted and the appeal should be upheld with costs. 117 I turn now to the cross appeal. 118 Imputation (c), the subject of the cross appeal, is in the following terms: "The plaintiff breached his duties as a director of ANI by selling his co-operation to Kerry Packer". 119 The respondent contends that the jury's answer (that imputation (c) was not defamatory) was one that no reasonable jury could reach and should be set aside. 120 The approach to be applied in an appellate review of a jury verdict that an imputation was not defamatory was fully discussed by McColl JA (with whom Mason P and Beazley JA agreed) in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107. Her Honour referred to the leading authorities on the issue, including John Fairfax Publications Pty Ltd v Rivkin (2003) 201 ALR 77 and made the following points:

(a) In Rivkin only McHugh J dealt expressly with the test to be applied. His Honour stated (at 81, [20]), "an appellate court can set aside a verdict of no libel on the ground of unreasonableness only when the words of the publication are not capable of any but a defamatory meaning … when the defamation is 'clear and beyond argument'."

(b) The highest respect should be accorded to the jury's determination. As Callinan J said in Rivkin (at 129, [184]), "the occasions for judicial correction of jury verdicts will be extremely rare".

(c) The tests in this Court that have been applied include whether the jury's finding was "perverse or unreasonable" ( Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68 at [41]; (2001) Aust Torts Reports 81-610) and whether "the verdict is one which reasonable men could not have reached or that is not susceptible of any rational explanation" ( Hardy v Harris (1986) Aust Torts Reports 80-003).

(d) In considering whether an imputation is defamatory a jury should be told to apply general community standards.

(e) In determining whether a civil jury acted reasonably in reaching its verdict, an appellate court must approach the case on the basis most favourable to the respondent to the appeal (per McHugh J in Rivkin at 80 [17]). 121 It remains to apply the above principles to the circumstances of this case. Before doing so, however, I would stress that the material complained of comprised words spoken in a television programme. The impressions and understanding of what is being conveyed by words so spoken can be far more ephemeral and diffuse than those capable of being absorbed from reading written words. This is all the more so where, as in this case, the images shown play no part in conveying the allegedly defamatory imputations. 122 A video recording of the programme was played to the Court during the hearing, and this brought home to me the brevity of the time viewers had to digest and understand the detail and implications of what was being said. The main thrust of the programme was obvious, namely, the allegedly detrimental influence of Mr Kerry Packer over the affairs of ANI and its minority shareholders. Other impressions were undoubtedly conveyed, particularly as regards the respondent. Nevertheless, the complexity of the facts and the rapidity with which the relevant remarks were made caused me to have difficulty in understanding with precision what was being said about the respondent. This was so even though I was viewing the programme with the knowledge that it contained the material complained of and I was concentrating with a fixed purpose on what was being said. 123 Another important factor in this case is the context of the imputation in issue. In determining whether an imputation is defamatory, pleaded imputations must be considered in the context of the matter complained of: Greek Herald Pty Ltd v Nikolopoulos (2001) 54 NSWLR 165 (at 172-173, [20]-[25]; see also Australian Broadcasting Corporation v McBride (2001) 53 NSWLR 430 at (439 [47] and 449 [107]) and Nationwide News Pty Ltd v Heggie [2001] NSWCA 257 (at [29] per Fitzgerald AJA). In Greek Herald Pty Ltd v Nikolopoulos Mason P (with whom Wood CJ at CL agreed) discussed the principles governing the use of context in determining whether an imputation is defamatory and said (at 172, [18]): "The pleader's task is to capture the essence of the specific matters imputed in relation to the plaintiff. Necessarily there will be questions of degree and 'if a problem arises, the solution will usually be found in considerations of practical justice rather than philology' (per Gleeson CJ in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137). In this as in other areas, pleadings serve the ends of justice: they must not be permitted to assume an independent self-referential function. The pleaded imputation remains 'the statement which, as the plaintiff alleges, the publication gives the reader or viewer to understand' (per Mahoney JA in Singleton v French (1986) 5 NSWLR 425 at 428). It is not a straitjacket, although the rules of procedural fairness place limits upon judge and jury's capacity to enlarge the issues."

Mason P stressed (at 172, [19]): "[t]he plaintiff will be bound by the substance, as distinct from the precise words of the pleaded imputation."

And explained (at 172, [20]): "The pleaded imputation is itself a statement extrapolating something from the matter complained of. The statement will seldom be found in the very words used …"

124 In this appeal, the degree to which the jury could have given imputation (c) a wider, or different meaning to the very words pleaded is of particular importance. 125 The respondent pleaded, in total, eight imputations that he alleged were conveyed. The jury determined that seven of the eight imputations were not conveyed. There is no appeal from these findings. Only imputation (c) was held to have been conveyed, but (as I have mentioned) was held not to have been defamatory. 126 The seven imputations found not to have been conveyed were, generally, in terms that were capable of reflecting more seriously on the reputation of the respondent than imputation (c). In the circumstances, the jury cannot be taken to have given to imputation (c) any meaning that the jury rejected when finding that the other seven imputations were not conveyed. The respondent cannot get by the back door that which he failed to get by the front. 127 From the jury's answers to the questions relating to the other seven imputations, it is apparent that they were of the view that none of the following imputations was conveyed:

(b) The respondent, in breach of his duties as a director of ANI, voted for ANI to buy ABT because Mr Packer agreed to pay him $2,000,000.

(d) The respondent dishonestly voted for ANI to buy ABT because Mr Packer agreed to pay him $2,000,000.

(e) The respondent committed a serious breach of his duties as a director of ANI by agreeing that ANI take over liabilities owed by CPH even though he knew that taking on those liabilities was clearly incorrect.

(f) The respondent, as a director of ANI, dishonestly changed the calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders.

(g) The respondent, generally, breached his duties as a director of ANI by changing calculations valuing the deal for ANI to buy ABT so that the deal would not have to be approved by shareholders.

(h) The respondent, as a director of ANI, acted contrary to shareholders' interests by deliberately concealing from shareholders key aspects of the deal for ANI to purchase ABT.

The numbers of the above subparagraphs are those that identified the particular imputations alleged at the trial. I have omitted imputation (c) from the list. 128 It necessarily follows that, in considering whether imputation (c) (that is, that the respondent breached his duties as a director of ANI by selling his co-operation to Kerry Packer) was defamatory, the jury must have been of the view, and have taken into account, that that imputation did not carry any of the meanings contained in imputations (a), (b) and (d) to (h). 129 What then is left, by way of context, that could supplement the bare imputation that the respondent breached his duties as a director of ANI by selling his co-operation to Kerry Packer? In my opinion, there is very little that would add materially to the words pleaded. 130 I accept that, from the context, a viewer would understand that the respondent voted in favour of ANI purchasing ABT. But, unlike Santow JA, I do not accept that other matters, rendering the imputation more serious, can be derived from the context. 131 I do not agree that regard can be had to the proposition that the bonus of $2 million was the means whereby the respondent sold "his co-operation to Kerry Packer". I also do not agree that account can be taken of the proposition that the respondent voted in favour of the deal because Mr Packer agreed to pay him $2 million. That is because the jury found that imputations in these terms were not conveyed (see the jury's answer to the question relating to imputation (b)). 132 Further, I do not agree that regard can be had to the allegation that, in breach of his duties as finance director of ANI, the respondent changed the calculations for the value of the deal. That is because the jury found that that imputation was not conveyed (see answer to question relating to imputation (g)). 133 And, I do not agree that regard can be had to the allegation that, in breach of his duties as finance director of ANI, the respondent knew that taking on the burden of ABT's liabilities "would be clearly incorrect". That is because the jury found that that imputation was not conveyed (see answer to question relating to imputation (e)). 134 In view of the findings of the jury as regards the other imputations, imputation (c) must be construed as meaning that the respondent, as financial director, breached duties of due diligence owed to ANI by voting in favour of ANI taking over ABT; this, however, is subject to the qualifications that the respondent so voted in circumstances under which he had sold his co-operation to Mr Packer; that all this occurred without any dishonesty on the respondent's part; that the respondent did not vote in favour of the deal because Mr Packer agreed to pay him the bonus of $2,000,000; that the respondent did not know that it would be "incorrect" for ANI, by the takeover, to "take on" ABT's major liabilities; that he did not breach his duties as a director of ANI by changing calculations valuing the deal; and that he did not deliberately conceal aspects of the deal from shareholders. 135 I would add that this construction of the imputation is based on an analysis of the transcript most favourable to the respondent by reference to the answers given by the jury. 136 As the material complained of comprised words spoken in a television programme, and not written words (with the consequences I have mentioned), I do not think it appropriate to conduct a closer or more detailed analysis of that material. 137 In my view, taking into account the qualifications to which I have referred and applying current community standards, it would not be unreasonable, let alone irrational, for a jury to conclude that imputation (c) was not defamatory. 138 Accordingly, I would dismiss the cross appeal with costs. 139 McCOLL JA: I have had the benefit of reading the judgments of Santow JA and Ipp JA. I agree with their Honours for the reasons they give that leave to appeal should be granted and that the appeal should be upheld with costs.

The Cross Appeal 140 I do not agree with Santow JA's conclusion on the cross appeal. I agree with Ipp JA that the cross appeal should be dismissed with costs. I do so for the following reasons. 141 The facts are set out fully in Santow JA's judgment. I shall not repeat them except insofar as is necessary to make my own views clear. 142 Resolution of the cross appeal turns upon the scope of appellate review of the jury's determination, pursuant to s 7A(3) of the Defamation Act 1974 (NSW), that imputation (c) was not defamatory. It is accepted that the scope of appellate review in that context is constrained by the significance accorded to the role of the jury in the law of defamation. The jury's role has an historical relevance which has contemporary resonance - as recognised both by the legislature and the courts.

Appellate review of jury verdicts in defamation cases 143 The significance of the jury's role in the law of defamation was referred to by the New South Wales Law Reform Commission in Report 75 (1995) - Defamation at [3.2]: "3.2 The socio-political role of the jury is founded on the notion of the jury as an appropriate barometer of public opinion to determine whether the matter in question is defamatory and, if it is, what amount of damages should be awarded. From a historical perspective, the role of the jury in defamation matters is intrinsically bound up with the protection of free speech, with juries figuring as watchdogs of democratic rights against unrepresentative governments. After the passage in England of Fox's Libel Act of 1792, the jury's increased role in libel cases was seen as among the central principles of freedom of speech and freedom of the press, with the people through their surrogate the jury determining how much could be said. Notwithstanding changes in political climate, the Parliament of New South Wales apparently continues to perceive advantages in having certain aspects of defamation actions determined by a cross-section of the community rather than by judges alone. For, unless the parties otherwise agree or unless the Court otherwise dispenses with the jury because the case requires a "prolonged examination of documents or scientific or local investigation" which "cannot conveniently be made with a jury", specific issues in defamation actions must, in the Supreme Court, be tried with a jury." (footnotes omitted)

144 The significance Parliament attached to the role of the jury was recognised in the Second Reading Speech to the Defamation (Amendment) Bill which inserted s 7A into the Defamation Act 1974 (NSW). The Attorney General, the Hon. J. P. Hannaford, said (Second Reading Speech, New South Wales Legislative Council, Parliamentary Debates, (Hansard), Vol 244, 22 November 1994, p 5472): "By allocating to the jury what is a vital decision in the trial the arrangement maintains an appropriate degree of community involvement…. In assessing an imputation a jury reflects the view of the community and is a good safeguard in the process of balancing reputation against freedom of speech…" 145 The constitutional role of the jury as representatives of the community of which the Attorney General spoke was most recently endorsed by the High Court in John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657 ("Rivkin"). 146 In referring to the frequent self-admonitions by appellate courts of the need for restraint when considering whether answers given by a jury were ones that no reasonable jury properly directed could have given, Gleeson CJ (at [2]) acknowledged that such restraint was said to reflect "deference to the constitutional role of the jury, and to its representative function." His Honour regarded references to the need for such restraint as "not uncommon, and not inappropriate". Kirby J (at [115]) observed that "jury decisions are still accorded a special status in our law because juries are taken to represent a microcosm of the entire community. That is what is meant by calling the jury the 'constitutional' tribunal of fact." Callinan J said (at [184]): "The fact that an appeal lies to the Court of Appeal does not mean that the Court may substitute the answer that it would give to a question for that of a jury. Nor does it mean that a finding of a jury should be invested with no more than the authority of a trial judge to whom all questions, including of fact, have been assigned for answer. The jury has an especially significant constitutional role to play in those cases in which it participates. Both as a practical and legal matter, a jury's decision on a factual question, although by no means impregnable, does have an authority over and above that of a decision of a judge sitting alone to determine a factual question. The jury is representative of the community. Its members are better placed than judges to give meaning to, and evaluate, the spoken and written word and its impact upon the community ." (emphasis supplied) 147 McHugh J dealt with appellate review of a jury verdict at length saying (footnotes omitted): "[17] In determining whether a civil jury acted reasonably in reaching its verdict, an appellate court must approach the case on the basis most favourable to the respondent to the appeal. The question for the appellate court is not whether the verdict is right or appears to be right but whether in the light of the evidence the verdict shows that the jury failed to perform its duty. As long as the verdict cannot be described as irrational, it must stand. As Else-Mitchell J pointed out in Carr v. Sydney City Council (1963) 80 WN (NSW) 397 at 402, an appellate court is not entitled to set aside a jury's verdict because the court regards the verdict 'as illogical, unsatisfactory or different from that which it would itself have reached' . These principles apply to appeals in defamation actions as well as to appeals in other common law actions.

[18] Because the issue of libel or no libel is usually a matter of 'impression', however, appellate courts set aside jury verdicts on the ground of unreasonableness, even less frequently then they set them aside in other actions. The need for restraint is heightened by the knowledge that the meaning of a publication and whether it is defamatory depends on whether ordinary reasonable readers would think it had the meaning alleged and, if so, whether that meaning is defamatory. It is for the jury to say what the words of the publication would mean 'to ordinary men and women going about their ordinary affairs'. Juries are more likely than Judges to be able to assess the reactions of ordinary reasonable readers. At all events, the collective impression of a jury is more likely to be representative of the community's impression of the publication than the collective impression of a panel of appellate Judges, however experienced or learned the panel may be. The New South Wales Parliament has certainly taken that view. In that State, Judges decide every issue in a defamation action except meaning and defamation. Given the enactment of s7A of the Defamation Act , the need for appellate restraint is even greater now than it was in 1990 when Kirby P said 'Judges must exercise care and restraint in invading the functions reserved by Parliament for juries'." [19] Occasions for invading the jury's function occur even less frequently when the jury has found that a publication is not defamatory. Rarely have appellate court sets aside a jury's finding that a publication was not defamatory. So rarely has it been done that in 1928 in Lockhart v. Harrison (1928) 139 LT 521 at 523 Lord Buckmaster could say 'such cases occur so rarely that within the last century there are only two to which our attention has been drawn in which this power has been exercised.' There have not been many since. [20] It is only when the publication contains a "plain and obvious defamation incapable of any innocent explanation" or where the words are "necessarily" defamatory that an appellate court is entitled to find that no reasonable jury could have failed to find the meaning alleged or that it was defamatory. As Chief Justice Darley observed in Kelly v Daily Telegraph Newspaper Co , if the words of the publication have "any possible construction which can be put upon them, susceptible of an innocent meaning, then the verdict of the jury for the defendants is conclusive and cannot be disturbed." Hence, an appellate court can set aside a verdict of no libel on the ground of unreasonableness only when the words of the publication are not capable of any but a defamatory meaning. Only when the defamation is "clear and beyond argument" can an appellate court set aside a jury's finding that the publication does not have the meaning alleged or that the meaning alleged is not defamatory." (emphasis supplied) 148 In Safeway Stores plc v Tate [2001] QB 1120 at 1131 Otton LJ (with whom Mantell LJ and Sir Ronald Waterhouse agreed) referred to the right to trial by jury in defamation actions and "in particular to have the jury determine the question 'libel or no libel' " as "an important and substantive legal right". 149 The unique role the jury undertakes as arbiters of community standards is exemplified by the fact that evidence cannot be given of "the moral or social standard by which the defamatory character of an imputation is determined …[and] it is pre-eminently a matter for the jury to give effect to a standard which they consider to accord with the attitude of society generally": Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 at 506 per Brennan J (as he then was, with whom Gibbs CJ, Stephen J and Wilson J agreed and Murphy J agreed generally). 150 The restraint upon the scope of appellate review of jury verdicts referred to in Rivkin ensures that the jury's role as the "appropriate barometer of public opinion" is not usurped. As Sheller JA (with whom Spigelman CJ and Hodgson JA agreed) observed in Saffron v John Fairfax Publications Pty Ltd [2004] NSWCA 254 at [15] after referring to Rivkin: "[15] This was said in a context that the fact that an appeal lies to a Court of Appeal from a jury verdict does not entitle the court to substitute its own opinion for that of the jury and that, in determining such appeals, the principle that the jury has an especially significant constitutional role to play is paramount…" (emphasis supplied) 151 Lord Penzance emphasised this point in Capital & Counties Bank Ltd v George Henty & Sons (1882) 7 App Cas 741 at 762 - 3 when he said: "I am therefore of the opinion that if a publication….is reasonably capable of a libellous construction, it is for a jury, and not for the Court, to say whether a libellous construction should be put upon it. The question being not what a Court of Law might understand by it, but what inferences the class of people to whom it is addressed would draw from the language used …. The Court … has no right to…reject the defamatory inference, because it is not a necessary inference, or one the Court itself would draw. There is I conceive considerable danger in the Court usurping the function of the jury, and by a too narrow criticism of the language of a publication, rejecting inferences which, though perhaps not logical, are such as people of illogical minds (who are perhaps the majority) would draw." (emphasis supplied) 152 In Australian Newspaper Company Limited v Bennett [1894] AC 284, the Privy Council emphasised that "[t]heir Lordships have not, any more than the Court below had, to determine in the present case what is the conclusion at which they would have arrived, or what is the verdict they would have found." 153 This point was made by Scrutton LJ in Broome v Agar (1928) 138 LT 698 at 700: "I agree with the view of the late Mr Blake Odgers (Odgers on Libel, pp 110 & 111): 'The proper course is for the Judge to define what is a libel in point of law and to leave it to the jury to say whether the publication in question falls within that definition. And this is a question pre-eminently for the jury; whichever way they find, the Court will rarely, if ever, disturb the verdict, if the question was properly left to them.' I hesitate to say that a case may never arise for interference, but I cannot think that the present case is one. There are very few cases where a jury having found "no libel" the Court has interfered with their verdict." 154 Lord Sankey in Broome v Agar (at 702) reminded himself that "the question is not whether one would have come to the same conclusion one's self." 155 In Lockhart v Harrison (1928) 139 LT 521, to which McHugh J referred in Rivkin (at [19]), Lord Dunedin emphasised that it is not for appellate judges to consider whether they themselves would have reached the jury's verdict, saying (at 524): "That it was a libel has been the opinion of every judge who has had the case before him; but, of course, that is not the question. The question is whether it is a verdict at which twelve reasonable men could possibly have arrived." 156 In Cairns v John Fairfax & Sons Limited (1983) 2 NSWLR 708 ("Cairns") the Court of Appeal, by majority (Hutley and Mahoney JJA, Samuels JA dissenting) dismissed an appeal from a jury finding that the imputation: "The plaintiff was improperly involved with his assistant, Junie Morosi, in a romantic or sexual association contrary to the obligations of his marriage and to that of Miss Morosi?"

was not defamatory. 157 Samuels JA accepted (at 716 - 717) that in determining the defamatory nature of imputations, juries were to be given the widest latitude or discretion and that the test of whether their verdict was unreasonable, "requires a case against the verdict which is 'clear and beyond argument': Broome v Agar (1928) 138 LT 698 at 702, per Sankey LJ". 158 Mahoney JA drew a distinction between cases where the issue was whether the imputations were conveyed and those which depended upon community standards. He said (at 720): "In cases such as the present, the defamatory quality of imputation [sic, as in original] depends upon the general community attitude to conduct of a particular kind. There is, I think, more difficulty in the court holding that a jury could not form a particular view as to general community standards than in deciding whether a word is capable of a non-defamatory meaning. In this sense, it will, in my opinion, be more difficult to persuade the court to set aside a jury's verdict in a case of the former than of the latter kind." 159 In Hardy v Harris (Court of Appeal, 21 March 1986, BC8601168 - an edited version appears at (1986) Aust Torts Reports ¶80-003) the Court dismissed an appeal from a jury finding that an imputation that the plaintiff was a hypocrite was not defamatory. Kirby P (as his Honour then was) said: "(BC8601168 at 1) But the gateway through which the appellant must pass to discharge what Glass, JA has rightly called the "very heavy burden" involved in disturbing the jury's verdict, is a narrow one. He must show that the jury's verdict was perverse - one which no reasonable jury could have reached, acting rationally. Because in trials of this kind the jury is taken to provide a microcosm of community opinion, it is natural and justifiable for the law to uphold the jury's decision, unless it is vitiated by such considerations as an erroneous direction on a point of law by the trial judge, misconduct on the part of the parties or their counsel or internal contradictions in the jury's verdict disclosed by answers given to particular questions requiring special verdicts…" 160 Glass JA (with whom Priestley JA agreed on this aspect of the appeal) said (BC8601168 at 5): "… [T]his particular jury finding, as with any other jury finding, is secure from overthrow except upon proof of perversity ie that the verdict is one which reasonable men could not have reached or that it is not susceptible of any rational explanation. The nature of the finding in question is explained in Readers' Digest Services Pty Limited v Lamb (1981-2) 150 CLR 500 at 566: 'Whether the alleged libel is established depends ... upon the standards moral or social by which they (the jury) evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation.' Legal theory treats the jurors as the custodians of those standards since no evidence of community attitudes can be adduced. It was the task of the twelve jurors to ascertain by discussion among themselves what were the relevant community standards and whether in the light of those standards the conduct imputed to the plaintiff redounded to his discredit ." (emphasis supplied) 161 The injunction against usurping the jury's function in the course of appellate review has been repeated in recent decisions of this Court. In Mularczyk v John Fairfax Publications Pty Ltd [2001] NSWCA 467 at [14] Beazley JA (with whom Sheller and Heydon JJA agreed) accepted that "[a]n appellate Court must always be on guard against the tendency to set aside a verdict because the Court feels it would have come to a different conclusion". Stein JA accepted this was the correct approach in Sarma v Federal Capital Press of Australia [2002] NSWCA 93 at [10]. His Honour also referred (at [21]) to the "great latitude" the jury must be given in exercising its function and to the fact that "the jury's answer to libel or no libel involve[s] the application of general community attitudes. It is for a jury to form a particular view as to prevailing community standards." Santow JA agreed (at [24]) with Stein JA, saying (at [27]) that "it is essential to remember that the question is not whether in the Court's view the jury's conclusion was right or wrong", referring to the importance of the fact that "the jury are the judge of those community standards which bear on the matter, not the Court." Both Stein JA (at [8]) and Santow JA (at [32]-[33]) cited Mahoney JA's view in Cairns that in cases where the defamatory quality of the imputation depends on general community attitudes to conduct, there is more difficulty in a court finding that a jury could not form a particular view as to community standards. 162 I drew attention to the constraints upon appellate review of a jury's decision that an imputation was not defamatory in Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 at [166] ff. Ipp JA has extracted the essence of my judgment. I will not repeat what he has said. 163 In Rivkin, in referring to the circumstances in which it might be determined on appeal that a decision was one no reasonable jury could reach, Gleeson CJ said (at [6]) "restraint on the part of an appellate court is likely to wane when … an appellate court … reviewing a trial judge's findings of fact … conclude[s] that a particular finding is … glaringly improbable". McHugh J, as I noted earlier, said (at [17]) "an appellate court is not entitled to set aside a jury's verdict because the court regards the verdict 'as illogical, unsatisfactory or different from that which it would itself have reached'." Kirby J said (at [112]) "… the proper approach to an appeal to the Court of Appeal against jury decisions is one that permits disturbance of such decisions 'in an extreme case ... [where they are] unreasonable' ". Callinan J said (at [185]) "[I]t may … be accepted that the occasions for judicial correction of jury verdicts will be extremely rare". 164 In Cairns, above, at 710, Hutley JA said that to overturn a jury verdict of not defamatory the appellants must show that the verdict was perverse even upon "the most favourable meaning of the imputation, to the upholding of the judgment". This statement was approved in Pavy v John Fairfax Publications Pty Limited [2002] NSWCA 46 at [7] (by Mason P, Wood CJ at CL and Young CJ in Eq) and in Charlwood Industries Pty Limited v Brent [2002] NSWCA 201 at [23] by Ipp JA (with whom Sheller and Hodgson JJA agreed). 165 Exercising appellate restraint in this context does not involve abdicating the appellate function. Appellate restraint is exercised because of the jury's unique role as the arbiter of community standards. That restraint may not be observed if the content of the test "that the verdict was one no reasonable jury could reach" is not understood. It is essential to rein in a judicial inclination to trespass into the domain of reasonableness which so frequently arises in other appellate contexts, untrammelled by the constraints present in the current context.

Consideration 166 This jury's role as arbiters of community standards was referred to in the summing up when the trial judge directed the jury that: "The ordinary reasonable viewer would not parse the broadcast, that is not perform some pedantic grammatical analysis of it or not simply analyse that part of the broadcast relating to Mr Reading. They would look at the whole programme and form an impression about what was said and what was meant by what was said …You must remember you are asked to put yourselves in the shoes of an ordinary reasonable viewer who would be watching the program, probably at home, and would not be subjecting it to … such close forensic analysis…. To determine whether something is defamatory you should ask yourselves whether ordinary decent members of the community would think less of Mr Reading because of what was said about him. In other words, would ordinary decent members of the community think less of Mr Reading because of the suggestions [his Honour then read each imputation to the jury]." (emphasis supplied) 167 Thus the members of the jury were asked, properly, to undertake the impressionistic exercise referred to in Rivkin, above, at [18]. 168 The impressionistic nature of the exercise the jury was asked to undertake is reinforced in this case by the fact that the matter complained of was published per medium of television - it was a transient publication: Gorton v ABC (1973) 1 ACTR 6 at 8 per Fox J. In that context, although the reasonable viewer is deemed to have viewed and listened to the whole broadcast, it may also be assumed that that person may not have devoted the same degree of concentration to it as would have been paid to a written document: Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410 at 413. 169 Having regard to the necessity when considering the jury's answer to approach the case on the basis most favourable to the respondent to the appeal (Rivkin, above, at [17]), it is significant to note how counsel for the ABC addressed the jury on the question of directors' duties. 170 The broadcast included the following: " NEIGHBOUR : Legal advice to the ANI Board concludes that ANI appears to have a case for damages against…some of the ANI's then directors… The advice cites evidence of possible breaches of the requirement to act with honesty, care and diligence, under the Corporations Law … ROFE [Australian Shareholders Association]: Shareholders are entitled to expect that their directors act diligently in the interests of shareholders … … BRUCE BABCOCK: Their failure to disclose it to shareholders, and not to tell them that they had taken on this enormous risk …was unacceptable. That type of thing should be disclosed to shareholders so they can truly assess the value of the company that they're owning … NEIGHBOUR: The independence of the majority of ANI's directors is a major issue. Of the seven directors at the meeting, three had been appointed by Consolidated Press … another two, Paul Reading and … were being paid bonuses agreed to by Kerry Packer, of $2 million each. The bonuses were meant to be rewards for helping to rationalise ANI, but it clearly wasn't ANI that benefited from this deal. It was Packer and Consolidated Press. SUE PALMER: It's quite extraordinary. $2 million was promised to two directors, before and after this ABT acquisition… My personal opinion is that it sounds like to me that kind of money could buy co-operation. It's too powerful." 171 When he addressed the jury, counsel for the ABC drew their attention to the various permutations of the concepts of honesty, care and diligence under the Corporations Law. He pointed out that: "… to say someone is not honest is a whole lot more serious than saying they are not careful and it is a whole lot more serious than saying they are not diligent." (T63.47) 172 He also referred to bonuses as: "… something that many employees get at Christmas time or after a good financial year's result - being paid a bonus could not in itself, without a whole lot more being said, set up some sinister suggestion that there is a wickedness involved here …." (T68.05) 173 The jury found that the imputations that the plaintiff had acted either corruptly or dishonestly because "Kerry Packer, whose company owned ABT, agreed to pay him $2 million" were not conveyed. That means, in my view, that in finding that imputation (c) was conveyed the jury concluded that the matter complained of was saying that he had breached his duties as director either because he had not been diligent or he had not been careful. It is also open to the conclusion that the jury rejected the proposition that there was anything sinister about Mr Reading's bonus. That was consistent with counsel for the ABC's address. 174 Equally, in my view, it was consistent with counsel for the ABC's address to the jury to conclude that Mr Reading may not have acted diligently or carefully in receiving the bonus but that, applying their view of community standards, the ordinary decent members of the community would not think less of a person who acted in that manner. 175 I accept that counsel for the ABC's remarks were made in the context of trying to persuade the jury that the imputations were not conveyed, but the jury was entitled to take them into account when considering the question whether imputation (c) was defamatory. They are also available for this Court's consideration in assessing the cross appeal on the basis most favourable to the ABC. 176 In my view a jury which concluded that ordinary decent members of the community would not think less of a person who had not acted diligently or carefully in receiving a bonus could not be said to have reached a conclusion which was "glaringly improbable" or "starry-eyed". Rather the jury could well have taken the view that the community would assess Mr Reading's carelessness or lack of diligence in light of the maxim, "to err is human". 177 I agree with Ipp JA that "the jury cannot be taken to have given to imputation (c) any meaning [it] rejected when finding that the other seven imputations were not conveyed" and with his Honour's analysis of the effect of the jury's rejection of all other imputations upon its interpretation of imputation (c). 178 In my opinion the analysis Santow JA has undertaken of imputation (c) and the context in which it appears fails to pay due regard to the exercise the jury was required to undertake. His Honour has subjected the matter complained of to the close forensic analysis the trial judge expressly instructed the jury to eschew - an analysis with which he was assisted by having access to the transcript of the matter complained of - a privilege the jury was denied when the trial judge rejected its tender: see Reading v Australian Broadcasting Corporation [2003] NSWSC 716 at [26]ff. His Honour's analysis fails, with respect, to give appropriate deference to the jury's assessment of community standards. 179 Since writing the foregoing, Santow JA has revised his draft judgment both to take account of my judgment as well as this Court's decision in Gorman v Barber & Ors [2004] NSWCA 402 which was published after I prepared my reasons. 180 In my view Gorman v Barber & Ors has no "precedential force" (cf Santow JA at [76]). It was a decision which turned entirely upon its own facts. 181 There are, however, two matters referred to in the judgment which deserve comment. The first concerns Mason P's statement (at [31]) that he doubted whether: "…[I]t was open to the jury or that it is open to this Court to discern the defamatory impact of one imputation by reference to others that were considered and rejected by the jury. No authority was cited in support of such an approach. Each imputation put to the jury differed in substance from the others (cf Supreme Court Rules, Pt 67 r 11(3))." 182 While his Honour's statement was obiter, and it is not clear precisely how counsel for the respondent put the argument he rejected, I should record my disagreement with the statement as a general proposition. When it is recalled that the pleaded imputations are to be understood in the context of the whole of the matter complained of (Greek Herald Pty Ltd v Nikolopoulos [2002] NSWCA 41; (2002) 54 NSWLR 165 at 172 - 173) it is relevant, at least on appeal when considering whether the jury's verdict was one no reasonable jury could reach, to take into account its conclusion in relation to other imputations. Such consideration can, as here, cast light on the sense in which the jury understood the matter complained of and assist in the exercise of seeking to discern the logic of its decision. 183 I do not understand why Mason P referred to the question whether a jury could have regard to "the defamatory impact of one imputation by reference to others that were considered and rejected by the jury". The point does not appear to have arisen on the Gorman appeal nor, of course, was it argued in the present case. I have already set out the trial judge's direction. I would not want to be seen to be encouraging a direction reflecting Mason P's statement. Such a direction in my view would distract the jury from the impressionistic nature of the exercise it is required to undertake. 184 The second matter about which I comment is Mason P's statements (at [34]) that "[t]he article could not fail to have affected the appellant's reputation…The article must also have embarrassed the appellant in front of friends and colleagues…". I have assumed that his Honour's references to "the article" were intended to be a reference to the relevant imputation. However the question whether an imputation is defamatory does not turn upon whether it embarrassed the plaintiff, but upon whether it was such as to lead "ordinary decent folk in the community, taken in general, to think the less of him": Gardiner v John Fairfax & Sons Pty Ltd (1942) 42 SR (NSW) 171 at 172 per Jordan CJ; applied Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 at 452. 185 I agree with the orders Ipp JA proposes to dispose of the cross appeal. **********

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