Defamation - Statements amounting to defamation - Imputation - As to capacity, fitness, respectability and the like.

The Capital and Counties Bank, Limited v George Henty & Sons (1882) 7 AC 741; Downie & Anor v Tasmanian Eye Clinics Pty Ltd & Anor [1999] TASSC 42; Neville v The Fine Art and General Insurance Company, Limited [1897] AC 68; Drummond-Jackson v British Medical Association [1970] 1 All ER 1094; FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479; Nixon v Slater & Gordon [2000] FCA 531; (2000) Aust Torts R 81-565; Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519; Livingstone-Thomas v Associated Newspapers Ltd (1969) 90 WN(NSW) 223; Gorton v Australian Broadcasting Commission & Anor (1974) 22 FLR 181; Pervan v The North Queensland Newspaper Company Ltd & Anor (1992 - [1993] HCA 64; 1993) 178 CLR 309; Barbaro v Amalgamated Television Services Pty Ltd [1985] 1 NSWLR 30; Bateman v Shepherd & Ord (1997) Aust Tort Reports 81-417, followed.

Defamation - Privilege - Qualified privilege - On matters of public interest - What constitutes privileged occasion, communication or conduct.

Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183; Calwell v IPEC Australia Ltd [1975] HCA 47; (1975) 135 CLR 321; Horrocks v Lowe [1975] AC 135; Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1966) 117 CLR 185; Mowlds v Fergusson (1939) 40 SR(NSW) 311, followed.

Defamation - Statements amounting to defamation - Reference to plaintiff - Defamation of a class of persons.

Knupffer v London Express Newspaper Ltd [1944] UKHL 1; [1944] AC 116; McCormick v John Fairfax & Sons Ltd & Anor (1989) 16 NSWLR 485, followed.

Judgment Number: [2001] TASSC 42

KENNETH JOHN BACON, CHRISTOPHER WILKES, MICHAEL JOHN PEARSON, JOHN MALLETT v BARRY HANSCH

1 The plaintiffs sue the defendant for damages for defamation and the defendant counterclaims damages for defamation from the first named plaintiff. At the time of the events which gave rise to these proceedings, all of the parties were members of the Transport Workers Union of Australia ("the Union") and employed by the Tasmanian branch of the Union ("the Branch"), or otherwise involved in the administration of the Branch.

2 The first plaintiff, Kenneth John Bacon, was employed as an industrial officer of the Branch on 4 January 1982. A short time thereafter he was appointed northern organiser of the Branch. In that position he was primarily responsible for Branch concerns in the north of Tasmania. On 5 November 1985, he was appointed to the position of Branch secretary.

3 Pursuant to the rules of the Union ("the Union's rules"), each branch of the Union was subject to the control of its own committee of management which consisted of a president, vice-president, secretary, two trustees and not less than seven, and not more than eleven, committee men. As secretary of the Branch, Mr Bacon was automatically a member of its Branch Committee of Management ("BCOM"). Mr Bacon's role as secretary of the Branch continued until 31 July 1998, when, pursuant to a resolution of BCOM, the Branch ceased to function. Thereafter the Federal Council of the Union assumed responsibility for its Tasmanian members.

4 The second plaintiff, Christopher Wilkes, was employed by the Branch as an industrial officer on 27 July 1988. He later became a branch organiser. He initially worked out of Launceston in the north of Tasmania. Thereafter, he worked for about four years on the north-west coast of Tasmania and then returned to Launceston for about two years, where he worked as the northern organiser of the Branch. Prior to the Branch ceasing to function, he took on a state-wide role for the Branch as a union organiser. For a period prior to 20 November 1993, he held the position of assistant branch secretary. He was at no time a member of BCOM.

5 The third plaintiff, Michael John Pearson, joined the Union in about 1979. He has been employed as a truck driver by Brambles Industrial Services for about 35 years. Until recently, he was one of the Union's delegates at his workplace. In 1989 he was appointed to BCOM. He was a member of BCOM until the Branch ceased to function.

6 The fourth plaintiff, John Mallett, joined the Union in 1972 at a time when he was employed as a porter with Trans Australia Airways at Launceston Airport. In 1988 he was appointed to fill a casual vacancy on BCOM. In about 1992, he was appointed a trustee of the Branch and, as the holder of that position, was a member of BCOM. He served on BCOM until about 1998 when he resigned from the Union as he was no longer working in the transport industry.

7 The defendant, Barry Hansch, joined the Union over 30 years ago. On 4 January 1982, he was appointed an industrial officer of the Branch. Shortly thereafter he was appointed as an industrial officer to serve the southern area of Tasmania. At some time prior to November 1993 he became state organiser of the Branch. Late in 1982, Mr Hansch was appointed to fill a vacancy on BCOM and shortly thereafter he was appointed a trustee of the Branch. He resigned from that position after about two years, and thereafter did not serve on BCOM, although he continued in his role as an organiser. He served on the Federal Council of the Union in 1992, 1993 and 1994.

8 Mr Bacon and Mr Hansch began their employment with the Branch on the same day, 4 January 1982. Mr Bacon was based in the north of the State and worked out of the Branch's Launceston office. Mr Hansch was based in the south of the State and worked out of the Branch's Hobart office. The Branch also had an office in Burnie. In about 1986, following Mr Bacon's appointment as secretary, BCOM resolved to move the head office of the Branch from Hobart to Launceston. Mr Hansch says he was not concerned about the move. He says that for about the first ten years during which he and Mr Bacon worked together they were great friends and had a great working relationship. He credits Mr Bacon and himself with building up the financial membership of the Branch during this ten year period from about 1,800 members to over 3,000 members.

9 In about 1986, the system for managing branch records was computerised and centralised in Launceston. There were teething problems with the computerised system. Mr Hansch says that by about 1991 he was concerned about the accuracy of the Branch's records in relation to members, particularly records of members' addresses and financial status. He says that as time progressed he felt the problems were getting worse not better, and he had a number of private meetings with Mr Bacon about the problem.

10 I am satisfied that there were ongoing problems in relation to the accuracy of the Branch's records in relation to members, in particular, members in the southern area. The Hobart office collected union dues from members and received information from them such as notice of members' changes of address. The Hobart office passed details of these matters to the Launceston office for inclusion in the Branch's records. The Launceston office was tardy about updating the Branch records and, on occasions, failed to respond to correspondence from the Hobart office about deficiencies in the Branch records and related matters. This is apparent from a memorandum dated 21 August 1991 to the Launceston office from the Hobart office assistant at that time, Kerrie Salau. Mr Hansch raised his concerns about records at a meeting of Branch officials in early September 1992. On 16 September 1992, Mrs Salau and Mr Hansch met with Mr Bacon and the Launceston office manager, Karin Eastoe, to discuss their concerns in relation to the accuracy and maintenance of Branch records and means of improving the system. That there were ongoing problems with the accuracy of the Branch's records is confirmed by the evidence of Diane Davies who worked as the Hobart office assistant between November 1993 and May 1995.

11 The number of members of the Branch peaked in 1991. Thereafter, membership declined. In the difficult economic climate which prevailed in Tasmania in the early 1990's there was a contraction in the workforce from which the Branch attracted members. In addition, changes to the industrial laws impacted adversely on the union movement and the number of workers who joined unions decreased.

12 Set out below is the number of financial members of the Branch as at 31 October in each of the years specified:

13 As the number of Branch members declined, so did the revenue of the Branch. On 2 November 1993, Mr Bacon had a discussion with Mr Hansch in relation to the possible need to reduce the number of people employed in the Branch should its financial position not improve by June 1994. Following that discussion, Mr Hansch wrote a detailed report to BCOM dated 10 November 1993. In that report he put a reasoned case for not reducing the staff employed in the Hobart office and suggested that the workload of the Launceston office would be reduced if the Hobart office was provided with better access to records and given basic equipment compatible with the equipment in the Launceston office. Mr Hansch's report was considered at a special meeting of BCOM on 30 April 1994, and he addressed BCOM in relation to the matters he raised on 2 July 1994. He says that BCOM's response to his address was completely negative and no relevant action was taken on it.

14 An aspect of Mr Hansch's concerns in relation to Branch records was the need for reliable records for use as evidence when proceedings were taken against a member to recover an amount due. On occasions these proceedings were referred to the Small Claims Division of the Magistrates Court. Mr Hansch represented the Branch at small claims hearings on about six occasions. His experience at one of these hearings caused him to send a facsimile to Mr Bacon on 10 May 1994, in which he detailed the records that the Branch needed to keep in order to be able to substantiate claims in court.

15 I am satisfied that at least by mid-1994 there was significant tension between the Launceston and Hobart offices of the Branch. I reject Mr Hansch's evidence to the effect that so far as he was concerned, north/south rivalry was not involved in the conflict which developed between him and Mr Bacon. The correspondence put into evidence suggests otherwise, as does the evidence of Sean Lawrence and Diane Davies.

16 In November 1993, Mrs Davies was engaged as the office assistant in the Hobart office. At the commencement of her employment, she says that Mr Hansch told her of the rivalry between the Hobart and Launceston offices and suggested that she not get involved. In late June 1994, Sean Lawrence was employed as an enterprise bargaining officer working out of the Hobart office. He says that there was an element of north/south rivalry in the Branch and that southern members felt dispossessed. He says that Mr Hansch told him that the head office of the Branch should be in Hobart.

17 During the decade immediately following the appointment of Mr Bacon and Mr Hansch to positions in the Branch, they co-operated well, notwithstanding the growing tension between the Launceston and Hobart offices. Their harmonious relationship came to an end during 1994 when they backed opposing teams of candidates at Branch elections, the nominations for which were called for on the second Tuesday in November 1994.

18 Mr Bacon and Mr Hansch proffer different explanations for their falling out. Mr Bacon says it had long been understood between he and Mr Hansch that Mr Hansch would, in due course, become Branch president. Mr Bacon, in substance, says that in 1994 he and other members of BCOM did not want the incumbent president, Frank Manley to seek re-election but Mr Manley was intent on doing so if it was likely that he would be replaced by Mr Hansch. Mr Bacon says that for this reason he and other members of BCOM agreed to support a candidate other than Mr Hansch. When Mr Bacon informed Mr Hansch of this, Mr Hansch was not happy. At a later meeting Mr Bacon was told by Mr Hansch that he would stand for the position of president and he would put forward his own team of candidates for some positions up for election.

19 As it turned out, the candidate Mr Bacon proposed supporting for election as Branch president was not qualified as he had not been a financial member of the Branch for a sufficient time. Mr Manley stood for election as president and was supported by Mr Bacon. On the eve of the election, Mr Manley sent a letter to Branch members advising that he did not want to be elected president and encouraging them to vote for Mr Hansch. Notwithstanding that letter, Mr Manley was re-elected.

20 Mr Hansch, in substance, denies any understanding between he and Mr Bacon that he would become Branch president. He says he had no ambition to be president and had rejected suggestions that he serve on BCOM as he did not favour Branch employees doing so. His preference was for ordinary rank and file union members to serve on BCOM. He, in effect, says that by 1994 the problems in relation to the administration and direction of the Branch were so serious that he put aside his qualms about some Branch employees serving on BCOM and decided to stand for president. When he told Mr Bacon of his decision, Mr Bacon said BCOM would oppose his election as it did not want a paid officer of the Branch to be its president.

21 Mr Hansch gave evidence of a number of problems, of varying significance, referable to the administration of the Branch which he says prompted the course he took in relation to the election. I will not deal with this aspect of his evidence in detail. I am of the view that he overstated the problems and the role they, and his wish to serve the Branch, played in his decision, and understated the extent to which he was motivated by parochial concerns he had about the Launceston office being enhanced and protected at the expense of the Hobart office. In response to a memorandum from Mr Bacon, Mr Hansch, on 16 January 1995, sent a memorandum to Mr Bacon and the other members of BCOM which included the following paragraphs:

"I agree with the decision to change the complete operation and structure of the Branch and that is the reason why I along with others have made the decision to stand for positions on the BCOM at the following elections, as it is up to the BCOM to make the decisions. In order to make proper decisions, I believe it is essential that more than one paid official who has some knowledge of the day to day operations of the Branch and experience in relation to the Rules etc, should form part of the BCOM, otherwise issues facing the Branch cannot be properly debated.

I would also place on record that the money that has been wasted over the years was not wasted by the Hobart Office nor was it spent on improving the Hobart Office facilities or equipment."

A considerable portion of the evidence given by Mr Hansch about administrative problems which concerned him was based on observations he made after November 1994, by which time he had made his decision to stand for election and support a team of candidates in opposition to Mr Bacon's team.

22 Mr Hansch's team of candidates for the election did not include a candidate for Mr Bacon's position of secretary, or for Mr Wilke's position of northern organiser based in Launceston. Mr Bacon's initial team of candidates for the elections included a candidate for Mr Hansch's position of state organiser. That candidate was not qualified to stand for election as he had not been a financial member of the Union for a sufficient period of time. In result, Mr Hansch was elected state organiser unopposed. Mr Bacon's team included Sam Barker, a candidate for the position of southern organiser based in Hobart. Mr Barker resided just out of Launceston where he conducted a transport business. Mr Hansch's candidate for the position of southern organiser was the incumbent, Graham Warn. Mr Warn also stood for election as a Branch trustee. It is apparent that Mr Bacon's objectives at the election included replacing Mr Hansch and Mr Warn, the two officials of the Branch who worked from its Hobart office. Mr Warn was defeated in the election.

23 I am in no doubt that upon Mr Hansch informing Mr Bacon of his decision in relation to the election, Mr Bacon viewed the employees of the Branch who worked out of its Hobart office as his opponents and was not averse to hindering the operations of that office. As to the activities of the Hobart office being hindered during the period of the elections, I consider it no accident that during this time the Hobart office was starved of stationery. All stationery for the Hobart office was provided by the Launceston office. During the election period, Hobart office requests for stationery were attended to in a tardy fashion, if at all. This is apparent from a memorandum Mrs Davies sent to Mr Bacon on 27 October 1994, and notes she made of her subsequent communications in relation to stationery in November and December 1994. During this period there was also discontent about the dilatory manner in which the Launceston office dealt with other matters on behalf of the Hobart office, such as an insurance claim in relation to items stolen from the Hobart office. The Branch paid organisers' home telephone accounts. The Launceston office so delayed the payment of the accounts of Mr Hansch and Mr Warn, that Mr Hansch received a disconnection notice from Telecom on 29 December 1994, and Mr Warn received a similar notice on 11 January 1995. In order to avoid suffering a disconnection, Mr Hansch paid his account. Mr Warn's account was paid by the Branch before it was disconnected. On 9 January 1995, Mr Bacon advised Branch officials that he had to authorise and sign all outgoing Branch correspondence and that all mainland telephone calls had to be approved by him. Whilst this sort of conduct can in part be explained by the Branch's shortage of funds, I am satisfied that a prime reason for it was the conflict between the Launceston and Hobart offices and the fact that Branch employees working from those offices were on opposing teams for the elections.

24 In the course of the elections, flyers and the like were distributed to Branch members in the interests of the opposing teams which, in general, extolled the virtues of the team supported by the publisher and derided the opposition. These publications were in the main blunt, robust and lacking in sophistication.

25 In February 1995, Mr Hansch and his supporters, described as "the rank and file reform group" distributed an open letter to Branch members which inferred that BCOM was not acting in accordance with the rules of the Union, that its then members did not understand what was happening in the Branch, that they put personal interests ahead of the interests of the Union and were not ensuring that all members were treated equally. It included the following paragraphs:

"There is sufficient evidence to show that during the past three years tens of thousands of dollars have been lost or wasted as a result of bad management and poor administration.

There are some people who will argue that any changes to the current Management would mean that the Head Office would be moved from Launceston to Hobart. This would not be the case as we support the current system with Offices in the North West, North and South.

It should always be remembered that you, the Members, are the Union and you are entitled to have your interests protected. This can only be done as a result of sound management and responsible administration which has not been provided during the past three years and will only get worse if changes are not made."

26 At about the time of the above publication, Mr Bacon also distributed a number of documents to Branch members lauding his team. These documents included the following document which is the subject of Mr Hansch's counterclaim alleging defamation. I will refer to it as "the faceless men circular":

Under the leadership of Ken Bacon and his team the Tasmanian TWU has modernised and delivered real wins for members. Unfortunately, some Old Guard members of the TWU are standing in the way of progress, and are disrupting the TWU in order to preserve their own interests.

Rather than support the initiative to have mobile TWU offices to better service members on the job, and be in touch with the concerns and problems of TWU members, some prefer to remain in a remote office drinking coffee and working the phones - the faceless men of the TWU.

Don't let your union be invisible - support the Ken Bacon team.

It is well known that it is improper to use union resources - resources paid for by members' dues - for political purposes in these elections.

But that didn't stop the Old Guard opponents of Ken Bacon and his team from using TWU office facilities to produce their literature and memo's! We couldn't

print this unless we had evidence that it is a fact.

If this is how the Old Guard use union resources now, what do you imagine they would do if they won these elections! Reject the Old Guard. Reject the political misuse of your union.

So does Barry Hansch. That is why he is seeking to be a Tasmanian TWU Organiser and the President of the union. If successful that would mean that he and his mates would control the same Branch Committee of Management that is supposed to make sure he is doing his job!

Life would be very cushy for Mr Hansch then, wouldn't it.

27 In response to the distribution of the above document Mr Hansch's solicitor wrote to Mr Bacon as follows:

I advise that I act for Mr Barry Hansch who instructs me that you caused to be published a pamphlet entitled the 'Ken Bacon Team'.

I am instructed that on the last page of that pamphlet you falsely accused Mr Hansch of improperly using Union resources, and that he is motivated to seek position of presidency so that he need not properly perform his duties as organiser, and that he intends to improperly use and/or steal the assets of the TWU.

I advise that I am instructed to take appropriate legal action unless you agree by Friday the 24th February 1995 to have inserted at your expense in the Advocate, the Mercury and the Examiner Newspapers an advertisement to the following effect:-

'I Ken Bacon hereby apologise to Mr Barry Hansch for any imputation I may have made in any publication in which I am involved that Mr Hansch improperly used Union funds, was motivated in seeking election to the position of Union President for any improper motive, and has ever stolen or improperly used the Union assets or intends to do so.'

28 Mr Bacon did not respond to this letter and Mr Hansch did not pursue his threatened action any further until he was sued by the plaintiffs in this action.

29 In February 1995, Mr Hansch distributed a document to members, the opening sentence of which was: "What are the real achievements of the Ken Bacon Team over the past three years?" The document went on to refer to the achievements as including losing or wasting in excess of $100,000 of members' money by bad administration and bad management and failing to obtain increased earnings for the majority of members.

30 Mr Bacon's team prevailed at the election. Mr Hansch was elected unopposed as State Co-ordinator, but as already mentioned, he was not elected president. A formal declaration of the election results was issued on 8 March 1995. Following the election, the tension between Mr Bacon and Mr Hansch continued. By letter dated 10 May 1995, Mr Bacon retrenched Mrs Davies, the Hobart office assistant. On 2 June 1995, Mr Bacon was asked by Mr Hansch if he could take his then outstanding long service leave. Mr Bacon wrote to Mr Hansch refusing that request on the basis that leave could not be allowed on short notice as several matters required attention. Mr Bacon was thereupon provided with a medical certificate which stated that Mr Hansch was suffering from "various symptoms" and was unfit for work until 16 June 1995. That certificate was followed by certificates covering the period to 17 July 1995, in which Mr Hansch was certified to be unfit for work due to work related reactive depression. Prior to 17 July 1995, Mr Bacon was informed by Mr Hansch that he was going to take his long service leave and he did not return to work on 18 July 1995. On that day Mr Bacon wrote to Mr Hansch advising that he had not been granted long service leave and informing him that if he did not return to work by 24 July 1995 he would be deemed to have abandoned his employment. Mr Hansch did not return to work on 24 July 1995. Correspondence ensued between Mr Hansch's solicitor and Mr Bacon in which the former maintained that Mr Hansch was entitled to take long service leave and had not abandoned his employment. Mr Bacon asserted that Mr Hansch's employment had been terminated by abandonment.

31 In September 1995, Mr Hansch instituted proceedings in the Industrial Relations Court of Australia against the Union, Mr Bacon and other members of BCOM, seeking orders to protect his interests, including orders as to the Branch maintaining a bank account credited with an amount equal to the Branch's accruing liability for long service leave and annual leave. The proceedings were heard by Ryan J. On 19 April 1996 he made orders, including a declaration that Mr Hansch's employment by the Branch continued and an order that the Branch maintain an appropriately funded bank account containing an amount equal to its contingent liabilities for long service leave and annual leave.

32 The Union's rules, r58, makes provision for BCOM to discipline members. Disciplinary proceedings may be initiated by a member making a written charge against another member. On 1 May 1996, Mr Bacon wrote to Mr Hansch enclosing details of charges made against him pursuant to r58, by Mr Mallett. The letter included notice that Mr Hansch was to attend a meeting of BCOM on 11 May 1996 to answer Mr Mallet's charges. In summary, Mr Mallett charged Mr Hansch with breaching the Union's rules by failing to accept the control and direction of BCOM.

33 Mr Hansch prepared a document responding to Mr Mallett's charges which Mr Hansch presented to BCOM on 11 May 1996. That document runs to eight pages, excluding its annexures. I will not set out the annexures. The following extracts from the document suffice for present purposes:

"BARRY HANSCH RESPONSE TO CHARGES CONTAINED IN DOCUMENT SIGNED BY J MALLETT DATED 1 MAY 1996

I believe that the allegations contained in the document can only be described as a further clumsy amateurish attempt to make proper debate and hide the huge problems facing the branch and, to close the stable door after the horse has bolted.

Notwithstanding the above I will address each and every allegation contained in the document as well as drawing the committees attention to more urgent and serious problems relating to some members of the BCOM in that they are, in my opinion, guilty of:

- Ceased according to the rules of the union to be eligible to hold office."

(Mr Hansch's response to Mr Malletts's charges is set out and the document proceeds as follows.)

"I believe that I have now responded to the letter 1 May 1996 and with that in mind I will now turn to other matters referred to in the third paragraph of this document.

I believe it to be somewhat ironical in that it would seem that the attempt to terminate my employment seemed to be based around Rule 59(e) of the registered Rules.

(a) Employees are only entitled to long service leave after 10 years service. THERE IS NO ENTITLEMENT TO LSL UNTIL AN EMPLOYEE HAS 10 YEARS SERVICE.

(b) Any leave not granted shall be paid out on termination. THERE IS NO PROVISION FOR PAYMENT IN LIEU OF LSL.

By his own admission, supported by a document in his own handwriting (tendered as an exhibit as a result of a direction from Justice Ryan) the BRANCH SECRETARY HAD TO FINALLY ADMIT THERE WAS A DISCREPANCY OF APPROXIMATELY $18,000 IN THE LSL ACCOUNT.

WAS THAT PAYMENT RECORDED ANY WHERE ELSE IN THE BRANCH RECORDS.

THE BCOM DOES NOT HAVE THE POWER TO CHANGE THE REGISTERED RULES.

THE REGISTERED RULES DO NOT PROVIDE FOR PAYMENT IN LIEU, EVEN TO A PERSON WHO HAS 10 YEARS SERVICE (KEN BACON).

THE REGISTERED RULES GIVE NO ENTITLEMENT AT ALL TO ANY PERSON WHO HAS LESS THAN 10 YEARS SERVICE (CHRIS WILKES)."

(Mr Hansch's concerns in relation to the Branch's financial accounts are detailed and the document proceeds as follows.)

ARE THE 1991-1995 AUDITED FINANCIAL REPORTS AND EXTRACTS TO MEMBERS ATTACHED SIGNED BY THE BRANCH SECRETARY BRANCH TRUSTEES (on behalf of the BCOM) AND BRANCH AUDITOR CORRECT AND ACCURATE

DO THE SAID REPORTS CONTAIN ERRORS AND IF SO WHY?????

IN 1994 A FINANCIAL COMMITTEE was set up supposedly to look and investigate the problems within the Branch.

It would appear to date the only real changes made are changes to the Hobart Office which have severely restricted services to members and have effectively rendered the Union useless and in the eyes of members WORTHLESS as it would appear from members the EMPLOYERS ARE HAVING A BALL."

(Mr Hansch's concerns about compliance with the rules in relation to membership cancellations, eligibility for membership, and fixing levies are detailed and the document proceeds as follows:)

In November 1993 and again in January 1995, I submitted reports to all then members of the BCOM (copies attached).

In those reports, I expressed my concerns in relation to how the Branch was being administered.

In 1995 I stood for the position of Branch President IN A GENUINE ATTEMPT TO ASSIST the Branch in -

ENSURING MEMBERS RIGHTS CONDITIONS OF EMPLOYMENT ETC, ETC, WERE PROTECTED AND IMPROVED

In February 1995 as part of my election campaign I sent a simple letter to all members (copy attached) perhaps that letter was too simple for some members of the BCOM to understand.

As we are all now well aware, my attempt to become President failed MISERABLY

The BACON Team, because of the EXPENSIVE GLOSSY LITERATURE filled with UNTRUTHS and BITTERNESS, had an OVER WHELMING VICTORY they believed they could do as they liked and make their own rules etc etc WITHOUT CHALLENGE.

As we are all aware recent FEDERAL COURT proceedings resulted in

UNFORTUNATELY this has come at a great EXPENSE TO MEMBERS and with FURTHER FEDERAL COURT PROCEEDINGS PENDING (an application has been lodged) I BELIEVE the total cost to MEMBERS will be in the vicinity of $100,000.

THE TIME HAS NOW COME WHEREBY ALL ELECTED MEMBERS OF THE BCOM NEED TO STAND UP AND BE COUNTED.

Failure to ADDRESS the current problems contained herein WITHIN 30 DAYS will simply mean that the matters will be ADDRESSED in OTHER PLACES as I will TAKE ALL STEPS NECESSARY (my options are many) in order to ensure such QUESTIONS AND ANSWERS such as -

ARE THERE 3 LITTLE PIGS WITH THEIR SNOUT IN THE ?????????

WHO ARE THE 3 LITTLE PIGS WITH THEIR SNOUT IN THE ????????

WHAT ACTION SHOULD BE TAKEN IN ORDER TO ENSURE THAT NOT ONLY THESE 3 LITTLE PIGS BUT ALL OTHER PROSPECTIVE LITTLE PIGS KEEP THEIR SNOUT OUT OF THE ?????????

In closing this response to the allegations made against me, I can only say that I have given but A FEW OF the examples of problems within the Branch however there are many more which can and will be demonstrated if I am called upon by any person to do.

I would also take this opportunity to say that I honestly believe that the MAJORITY of BCOM members are HONEST SINCERE people who are SIMPLY BEING KEPT IN THE DARK.

WE HAVE BECOME A BRANCH WITH SOME OF THE HIGHEST PAID OFFICIALS AND SOME OF THE LOWEST PAID OFFICIALS IN THE STATE

WE HAVE SOME OF THE LOWEST PAID MEMBERS, SOME BELOW THE POVERTY LINE, WHO PAY CONTRIBUTIONS, PERHAPS ILLEGAL, APPROXIMATELY 20% HIGHER THAN ANY OTHER BRANCH IN AUSTRALIA.

I request that a full copy of this response to the allegations I have been charged with, be attached to the minutes of this special meeting.

34 Mr Hansch presented his written response to Mr Mallett's charges at the meeting of BCOM on 11 May 1996, and spoke to the meeting. BCOM determined that the charges against Mr Hansch had been made out and that he should be expelled from the Union.

35 In his written response to Mr Mallett's charges, Mr Hansch referred to $18,000 which had been paid to Mr Bacon and Mr Wilkes out of the Branch's Long Service Leave Account. It can be inferred from what Mr Hansch there wrote that he asserted that the money was paid to Mr Bacon and Mr Wilkes in lieu of their entitlements to long service leave and that such payments were contrary to the Union's rules. Payments in lieu of their respective entitlements to long service leave had in fact been made to Mr Bacon and Mr Wilkes.

36 On 4 January 1992, Mr Bacon completed 10 years' employment with the Branch. He thereupon became entitled to take long service leave, pursuant to the Union's rules, r59(e), which provided as follows:

"(e) An employee of the Union shall after each ten years service be granted three months long service leave on full pay.

Such long service leave may be granted in full or in part at any time after becoming due. Any time not granted in accordance with the foregoing shall be paid for upon termination of engagement of an employee as a retiring allowance at the full pay he was in receipt of at the date of such termination of engagement.

In the event of the death of an employee (including an officer) referred to in this Rule, all long service leave payment due to such employee shall be paid to the employee's dependant or to such person or persons as shall be determined by the Committee of Management concerned.

Where an employee, whether he has previously qualified for long service leave in accordance with the foregoing or not, has completed a period of five years or more but less than ten years' service (but not including any period in respect of which he has already received long service leave) and the service of that employee is terminated for any reason, he shall be paid pro rata for such period."

37 In 1993, the dollar value of Mr Bacon's accrued entitlement to long service leave was $18,509.78. During that year, BCOM approved an arrangement with Mr Bacon that in discharge of that entitlement, $18,509.78 would be paid to Mr Bacon's wife, who was to perform filing duties for the Branch.

38 Sean Lawrence, a fellow employee of Mr Bacon, gave evidence that he and Mr Bacon discussed Mr Bacon's reasons for entering into this arrangement and Mr Bacon in substance said that he had been too busy to take time off work and he would obtain a tax advantage by having the money paid to his wife rather than himself. Mr Bacon denies having a conversation to this effect with Mr Lawrence. I am satisfied that the conversation did occur and that Mr Bacon entered into the arrangement for the reasons he gave to Mr Lawrence.

39 Whilst no satisfactory contemporaneous documentary evidence of the arrangement made between Mr Bacon and BCOM was put into evidence, I am persuaded that the arrangement was made and effected. Mr Bacon's evidence about the arrangement was confirmed by Mr Pearson and Mr Mallett who were members of BCOM at the time. The minutes of BCOM's meeting on 18 January 1997 include a motion, the terms of which recognises that the arrangement had been made and complied with.

40 Mr Hansch contends that BCOM's approval of a payment to or at the direction of Mr Bacon in lieu of his long service leave entitlement was contrary to the Union's rules. Mr Hansch recognises that pursuant to the first two paragraphs of r59(e), Mr Bacon had a right to three months' long service leave. However, Mr Hansch says that the rule only allows BCOM to pay an amount in lieu of an employee's entitlement upon termination (fourth paragraph) or death (third paragraph). I reject this contention. The Long Service Leave Act 1976, s10, makes express provision for an employer to pay an employee an amount in lieu of an entitlement to long service leave. Even if that provision did not exist, I am satisfied that such a payment could be made unless expressly proscribed by the Union's rules. The absence of a provision in the rules entitling an employee to require the payment of an amount in discharge of an accrued entitlement to long service leave simply meant that an employee could not oblige BCOM to make such a payment. The rules placed no fetter on the means by which BCOM discharged the Branch's liability to an employee entitled to long service leave. The making of a payment in lieu was an obvious and appropriate means of discharging such an obligation.

41 In late 1994, Mr Wilkes had been employed by the Branch for six years. He was in need of money and sought a payment in lieu of such entitlement as he then had to long service leave. Pursuant to the fourth paragraph of r59(e), he had an entitlement to a long service leave benefit in respect of six years' service which he (or his estate) could oblige the Branch to meet upon his completion of 10 years' service, the termination of his employment or his death. Mr Wilkes approached Mr Bacon for a payment in lieu of his entitlement which at that time had a dollar value of $7,968. Whilst Mr Wilkes' entitlement to receive that benefit had crystallised, the time for its payment had not. One way or another, it was a liability which the Branch would in due course have to meet. The entitlement could not be lost.

42 Mr Bacon referred Mr Wilkes' request to BCOM and Mr Wilkes attended a meeting of BCOM to explain his circumstances. BCOM authorised the payment of $7,968 to Mr Wilkes in lieu of his entitlement and that payment was made.

43 Mr Hansch contends that BCOM's approval of the payment to Mr Wilkes in lieu of his entitlement to long service leave breached the Union's rules. I do not agree. Whilst the Branch was under no obligation to discharge Mr Wilkes' entitlement to long service leave at that time, the liability was one which had to be met in due course. Nothing in the Union's rules prohibited BCOM from discharging the liability when it did. The course which was taken was consistent with BCOM's obligation to control the business of the Branch. I should add that I am also satisfied that the payment did not breach the provisions of the Long Service Leave Act 1976. No provision in that Act prohibits an employer from making a payment in lieu of long service leave to an employee on more generous terms than are provided for by the Act.

44 Shortly after Mr Hansch was informed that the outcome of BCOM's meeting on 11 May 1996 was his expulsion, he prepared the following document which I will refer to as "the do you know leaflet". For reference purposes I have numbered the paragraphs.

(1) - KEN BACON and CHRIS WILKES both RECEIVED THOUSANDS OF DOLLARS OF YOUR MONEY to which THEY were NOT ENTITLED under the RULES of the union when they took a payment out of the Long Service Leave Fund.

(2) - According to the union's audited accounts KEN BACON received a $25,000 (60%) INCREASE IN SALARY IN 1994.

(The POLITICIANS only received a 40% increase AND what did we ALL have to say about that.)

(3) - MEMBERS dues in TASMANIA are approximately $40 (20%) HIGHER than any other Branch in AUSTRALIA.

(4) - YOUR ELECTED representatives on the BCOM have allowed THOUSANDS OF DOLLARS in legal costs of YOUR MONEY to be WASTED in an ATTEMPT TO GET RID OF BARRY HANSCH.

(AS A RESULT OF A FEDERAL COURT DECISION THAT ATTEMPT FAILED MISERABLY)

(5) - YOUR ELECTED representatives on the BCOM have now made a further IRRESPONSIBLE decision, which will cost THOUSANDS OF DOLLARS more of YOUR MONEY, IN A FURTHER attempt to SILENCE and GET RID OF BARRY HANSCH by attempting to expel him from the Union.

(The latest attempt like the first attempt will also fail and you the MEMBERS will AGAIN be expected to pick up the tab for the SECOND time in LESS THAN SIX MONTHS)

Should you require further information, details or proof then please do not hesitate to contact BARRY HANSCH on (002) 681 593, preferably after 8.00 pm, but at your convenience."

45 Mr Hansch also prepared a revised copy of his response to BCOM dated 11 May 1996, in which he altered the third paragraph of his original response to read as follows:

"Notwithstanding the above I will address each and every allegation contained in the document as well as drawing the committees attention to more urgent and serious problems relating to some members of the BCOM. I allege that a member or members of the BCOM are guilty of:

I will refer to this altered copy of his response to BCOM as "the revised response".

46 The allegations of defamation made against Mr Hansch by the plaintiffs relate to portions of the do you know leaflet and the revised response and to what Mr Hansch is alleged to have said on one occasion when distributing these documents and on one subsequent occasion.

47 Between 17 May 1996 and 27 May 1996, Mr Hansch distributed the do you know leaflet to TWU members at a number of work sites in the vicinity of Hobart, Launceston, Burnie and Devonport. Those members who expressed interest in the leaflet and asked for more information were provided with a copy of the revised response. Copies of the leaflet were handed to about 600 members, and of those about 90 also received a copy of the revised response.

48 By letter dated 22 May 1996, Mr Bacon wrote to all members of the Branch referable to Mr Hansch, detailing Mr Bacon's version of the events leading up to Mr Hansch's expulsion from the Union. Mr Bacon described the allegations made by Mr Hansch in relation to the administration of the Union as quite unfounded and unproved and invited members to view the financial records of the Branch if they wished to. That invitation was repeated by Mr Bacon in a further letter to members dated 26 May 1996 in which he again refuted Mr Hansch's claims and said that no evidence had been produced to support any of them.

49 By letter dated 23 May 1996, Jennings Elliott, a firm of solicitors, wrote to Mr Hansch on behalf of Mr Bacon and Mr Wilkes asserting that their clients were defamed by the do you know leaflet and threatening proceedings in the absence of an acceptable apology. Although Mr Hansch did not respond to the letter or apologise, he ceased distributing the leaflet and the revised response.

50 By letter dated 4 June 1996, Jennings Elliott wrote to Mr Hansch as follows:

I refer to my letter to you of the 23rd May, 1996 and note that I have not had any reply to that letter nor has there been any apology published by you.

My clients have addressed the defamatory matters contained in the document distributed by you in a letter to members of the 27th May, 1996. This letter was written in an effort to protect my clients' reputation.

Although it is clear that there has been potential for serious damage to the reputation of both Mr Bacon and Mr Wilkes, I am instructed by them that on the information they currently possess their reputations have not been damaged to an extent that demands they take action against you for defamation. Further distribution of defamatory material by you could well alter this situation and may well see our client providing instructions to institute proceedings.

51 Mr Hansch responded by writing to Jennings Elliott on 7 June 1996 advising that "everything that I have said or written is the absolute truth which can and will be proved over the next few months in the appropriate avenue". Jennings Elliott replied by letter dated 13 August 1996 advising Mr Hansch that unless he published an apology for the damage he had caused to Mr Bacon and Mr Wilkes before the last day of August 1996, proceedings seeking damages for defamation would be instituted. No apology was forthcoming. The plaintiffs instituted the proceedings that are now before me on 24 September 1996.

52 The last occasion on which Mr Hansch visited a work site to distribute the leaflet and the revised response was on 27 May 1996 when he attended the premises of Qantas at Launceston to speak to Union members. The first and second plaintiffs allege that when Mr Hansch spoke to Union members on that occasion, he said of them:

(b) They are misleading Branch Committee of Management where Union finances are concerned for their own financial gain.

(c) They have illegally taken long service leave and annual leave payments.

(d) Union dues are higher than some other States, this is improper and without cause."

53 Russell Walker was the Union's delegate at Qantas at the time of Mr Hansch's visit. He says he came upon Mr Hansch speaking to about seven members of the Union in the lunch room. Mr Walker asked Mr Hansch what the meeting was about. Mr Hansch, in substance, said that he wanted to put his side about what was going on in the administration of the Branch to members. Mr Hansch distributed copies of the leaflet and said a number of things about Mr Bacon and Mr Wilkes. About a week after the meeting Mr Walker prepared a record of what had transpired, which includes a note that Mr Hansch said of Mr Bacon and Mr Wilkes that:

"They were misusing Union funds and misleading Branch Committee of Management where the Union finances were concerned, to be used for their own financial gain. These gains he claimed were the misuse of funds for illegal long service leave payments and annual leave used by Mr Bacon and Mr Wilkes ... He stated the matter of the Union's dues being $230 in the State of Tasmania being higher than some other States was both improper and without cause."

54 Mr Hansch acknowledges that he attended Qantas as alleged and distributed copies of his leaflet and revised response to Union members. He made no note of what occurred and cannot recall exactly what he said. He says he possibly said, "they are misusing Union funds" and does not dispute discussing the amount of the Branch's dues although he denies describing the amount of the dues as being "improper and without cause". He denies making the other statements attributed to him. Save for the reference to annual leave, I am satisfied of the accuracy of the relevant portion of Mr Walker's record of what Mr Hansch said at the meeting. With the exception of the reference to annual leave, what Mr Hansch is recorded as having said reflects the content of the documents Mr Hansch was distributing. It is likely that Mr Hansch referred to these matters in pressing the case he was making to his listeners. I am not, however, satisfied that Mr Hansch made any reference to annual leave as it is not the subject of any claims made in the documents he was distributing. Mr Walker may have erroneously understood Mr Hansch's reference to long service leave to encompass annual leave.

55 The Union's rules contain provisions which allowed Mr Hansch to appeal to the Federal Council of the Union against BCOM's resolution of 11 May 1996 expelling him from the Union. Mr Hansch lodged an appeal with the Federal Council on 17 May 1996. The appeal was upheld and he was advised of his reinstatement as a member of the Union on about 10 July 1996. On 23 July 1996, Mr Bacon wrote to Mr Hansch advising that pursuant to the Union's rules, BCOM had charged him with gross misbehaviour and had resolved to suspend him with pay from all duties. Details were provided of Mr Hansch's alleged gross misbehaviour. They included an assertion that he had made false accusations against BCOM and Mr Bacon. A special general meeting of the members of the Branch was held on 21 August 1996 to deal with the charge against Mr Hansch. Mr Hansch attended that meeting and spoke in his own defence. Resolutions carried at the meeting included a resolution to the effect that the charge was substantiated. Mr Hansch's position with the Branch was declared vacant. Mr Hansch thereupon took proceedings in the Industrial Relations Court of Australia challenging the validity of the Branch's actions. The proceedings were heard by Ryan J who, on 25 May 1998, published reasons for judgment in which he, in substance, found that inadequate notice of the special general meeting had been given and ruled that the resolutions passed by the meeting were null and void. The consequent revival of Mr Hansch's employment with the Branch was short lived. On 4 July 1998, BCOM resolved that the Branch cease to function on 31 July 1998. Thereafter, responsibility for members of the Union in Tasmania was taken over by its Federal Council.

56 On 1 August 1996, a short time after Mr Hansch received notice that BCOM had suspended him from all duties, he attended the premises of Pioneer Concrete at Moonah with a view to persuading members of the Union working at that site to sign a petition pursuant to the Industrial Relations Act 1988 (Cth), s280(5), seeking an investigation of the finances of the Branch. The plaintiffs allege that, in the course of speaking to Union members on this occasion, Mr Hansch said:

"(a) 'I have proof that Ken Bacon and Chris Wilkes have taken money from Union funds'.

(b) 'There is a need to stop this misappropriation of members funds disappearing at the hands of Ken Bacon and his cronies and billygoats on the Branch Committee'."

57 Mr Hansch, in substance, acknowledges saying the above, save for the words "his cronies and billygoats", which words he says are not part of his vocabulary. Robert Williams, a delegate of the Union employed by Pioneer Concrete in Launceston, was at the Moonah premises on the occasion of Mr Hansch's visit. Mr Williams heard Mr Hansch speak to five members of the Union in the crib room. As Mr Hansch spoke, several members entered and left the room. Mr Williams made some notes of what was said during the meeting and completed his notes after the meeting. His engrossed notes include a record of Mr Hansch saying:

"... he had proof that Ken Bacon and Chris Wilkes had taken money from Union funds. ...

... there was a need to stop this misappropriation of Members' funds disappearing at the hands of Ken Bacon and his cronies and billy goats on the Branch Committee".

58 Counsel for Mr Hansch submits that I should not accept Mr Williams' evidence that Mr Hansch used the words "his cronies and billy goats". Whilst counsel did not submit that Mr Williams was dishonest, he contended that Mr Williams was not a reliable witness. I find otherwise. The evidence to which counsel referred in support of his contention that Mr Williams was an unreliable witness does not give me any reason to doubt the accuracy of Mr Williams' record of what Mr Hansch said. It is unlikely that Mr Williams would have mistakenly attributed the words "cronies and billy goats" to Mr Hansch had he not used those words.

59 I turn to the parties' respective claims and deal with them in the sequence in which the publications upon which they are based were made.

Mr Hansch's counterclaim against Mr Bacon arising from the faceless men circular

60 By his counterclaim, Mr Hansch asserts he is defamed by the words, representation and cartoon in the faceless men circular, which is reproduced at par26, and that in their natural and ordinary meaning they meant and were understood to mean:

"(a) the Defendant was disrupting the legitimate activities of the Transport Workers Union Tasmanian Branch;

(b) the Defendant conspired with unknown persons to disrupt the legitimate activities of the Transport Workers Union Tasmanian Branch;

(c) the Defendant improperly used the resources of the Transport Workers Union Tasmanian Branch for political purposes;

(d) the Defendant improperly used resources of the Transport Workers Union Tasmanian Branch to advance his own interests in internal union elections held in February and March 1995;

(e) the Defendant intended to use the Transport Workers Union Tasmanian Branch for political purposes;

(f) the Defendant was motivated in seeking the position of President of the Transport Workers Union Tasmanian Branch for the purpose of ensuring that he could neglect his duty as an organiser of the said Union Branch."

Mr Bacon, by his pleading, acknowledges that the circular was published of and concerning Mr Hansch, but denies that it conveyed the defamatory imputations alleged and in the alternative pleads defences of fair comment and qualified protection.

61 The circular was distributed to the financial members of the Branch, a total of 2,191 members. Whilst Mr Hansch is only mentioned by name under the third heading in the circular, I am satisfied that the content of the circular was capable of being understood by reasonable members who read it as being directed at Mr Hansch. A reasonable reader would have understood the references in the circular to "some old guard members of the TWU", "the faceless men of the TWU" and "the old guard opponents of Ken Bacon and his team" to be directed at the group opposing Mr Bacon's team at the elections. The circular targeted that group and Mr Hansch was a prominent member of it.

62 Does the circular convey defamatory imputations as asserted by Mr Hansch? The test is whether under the circumstances in which the circular was published, reasonable people to whom the publication was made would be likely to understand it as being defamatory of Mr Hansch, The Capital and Counties Bank, Limited v George Henty & Sons (1882) 7 AC 741 and 745 and Downie & Anor v Tasmanian Eye Clinics Pty Ltd & Anor [1999] TASSC 42. As to regard being paid to reasonable people from the recipient group and not the public at large, see also Neville v The Fine Art and General Insurance Company, Limited [1897] AC 68 at 72; Drummond-Jackson v British Medical Association [1970] 1 All ER 1094 at 1099; FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479 at 496; and Nixon v Slater & Gordon [2000] FCA 531; (2000) Aust Torts R 81-565.

63 Many authorities canvass the qualities and approach of the notional reasonable recipient of the communication. In Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519, Kirby J said (citations omitted) at 572 - 573:

"The matter complained of should be considered in the way that a reasonable person, receiving it for the first time, would understand it according to its natural and ordinary meaning. The recipient has been variously described as a 'reasonable reader', a 'right-thinking [member] of society', or an 'ordinary man, not avid for scandal'. Sometimes qualities of understanding have been attributed, such as the 'reader of average intelligence'. The point of these attempts to describe the notional recipient is to conjure up an idea of the kind of person who will receive the communication in question and in whose opinion the reputation of the person affected is said to be lowered. Special knowledge is excluded. So are extremes of suspicion and cynicism (on the one hand) or naivety and disbelief (on the other). The basic question which is posed is whether the matter complained of, understood in its natural and ordinary meaning, would tend to lower the subject in the estimate of such an evocation of the ordinary, reasonable, member of society. In practice, the tribunal of fact, judge or jury, will ask itself about its own response to the matter complained of. To a very large extent that response will be impressionistic, subjective and individual to the decision-maker. The point of the invocation of the hypothetical reasonable person is to remind decision-makers that they may, or may not, reflect the response of the average recipient of the communication and should make allowance for that possibility."

64 The Defamation Act 1957 ("the Act"), s5(3) and (4) provides that the question whether matter is capable of bearing a defamatory meaning is one of law whilst the question whether matter is defamatory is one of fact. The Act, s5(1), relevantly provides that:

"5 - (1) An imputation concerning a person ... by which -

(a) the reputation of that person is likely to be injured;

(b) that person is likely to be injured in his profession or trade; or

(c) other persons are likely to be induced to shun, avoid, ridicule, or despise that person -

is defamatory, and the matter of the imputation is defamatory matter."

65 For an imputation to be defamatory, it must be "likely" to affect the claimant in one of the ways specified in s5(1). In Livingstone-Thomas v Associated Newspapers Ltd (1969) 90 WN(NSW) 223 at 229, Wallace P said of the Defamation Act 1958 (NSW), s5, which section is in substantially the same terms as the Act, s5(1):

"I think the legislature has meant 'likely' in the sense of a tendency or real possibility. This matter becomes of considerable importance when the ultimate judicial decision is being made, namely whether the words complained of are 'capable' of bearing a defamatory meaning."

This construction of "likely" is also of considerable importance when determining the ultimate factual question for trial, that is, whether the words complained of actually defame the claimant.

66 The determination I am to make is whether under the circumstances in which the circular was published a reasonable member of the Branch who read it was likely to consider it in a defamatory sense, that is, as tending to harm Mr Hansch in a way covered by the Act, s5(1).

67 It would have been clear to any reasonable member of the Branch who read the circular that it was an electoral blurb distributed in support of Mr Bacon and his team and with a view to discouraging members from voting for Mr Hansch and his supporters. The circular would have been read with considerable circumspection and little, if any, regard paid to hyperbole and its general denigratory flavour. In Gorton v Australian Broadcasting Commission & Anor (1974) 22 FLR 181, Fox J, at 189 said:

"The finding of a derogatory imputation is not an end of the matter; it must have been such as to affect adversely the reputation of the plaintiff. A person in public office expects to be, and is, frequently the subject of comment and criticism, and not a little of that comment or criticism is of a personal nature. Sometimes a slur is cast on his honesty, or integrity. The television viewer recognizes these things. The result is that criticism and comments made of public figures are apt to have less impact than similar remarks made of others."

The thrust of the above passage applies to candidates in an election such as the Union election which precipitated the circular. They will be the subject of comments and criticism of a personal nature. Reasonable voters recognise this and the remarks are apt to have less impact than similar remarks made of others in different circumstances.

68 The second sentence of the circular: "Unfortunately, some Old Guard members of the TWU are standing in the way of progress, and are disrupting the TWU in order to preserve their own interests" is capable of founding imputation (a), that Mr Hansch was disrupting the legitimate activities of the Branch. Imputation (b) is that Mr Hansch conspired with others to achieve imputation (a). To found imputation (b), Mr Hansch relies on the second sentence of the circular, coupled with the silhouette of a head containing a question mark. I do not consider this material to be capable of founding an imputation that Mr Hansch "conspired" with unknown persons as alleged. The word "conspire" carries with it a connotation of an unlawful purpose. The material relied upon is incapable of imputing that purpose.

69 In support of imputation (f), Mr Hansch relies on the pigs cartoon, together with what appears under the heading "Want to be your own Boss?" This material is not capable of founding an imputation that Mr Hansch's purpose in seeking the position of president was to ensure that he could neglect his duty as an organiser of the Branch. At most, it imputes that he wanted to be his own boss so as to avoid supervision. I am not satisfied that this imputation or imputation (a) defame Mr Hansch. A desire to avoid supervision is quite normal and there is nothing improper about it. Likewise, without more, there is nothing improper about disrupting the activities of the Branch. There may well be good reason to do so. These imputations would not tend to harm Mr Hansch's standing in the estimation of a reasonable member of the Branch who read the circular.

70 Imputation (d), that Mr Hansch improperly used resources of the Branch to advance his own interests in the elections, can be drawn from the portion of the circular which appears under the heading "Misuse of union resources!" Mr Hansch is defamed by this imputation. The statement that "we couldn't print this unless we had evidence that it is fact" takes imputation (d) beyond the scope and realm of hyperbole and puffery. The clear meaning conveyed is that the publisher has evidence which establishes that Mr Hansch improperly used TWU office facilities to produce literature and memos to advance his own interests in the election. That imputation would tend to harm Mr Hansch's standing in the mind of a reasonable member of the Branch who read the circular. I am not persuaded that imputations (c) and (e) can be derived from the circular, save insofar as it is capable of imputing that Mr Hansch improperly used resources of the Branch for political purposes in the then current Union elections. This adds nothing to imputation (d).

71 To exculpate himself from the consequences of an adverse finding in relation to any imputation, Mr Bacon pleaded defences of fair comment and qualified privilege. The latter defence is as follows:

"11 The words, representation and cartoon were published in good faith for the purpose of the discussion of a subject of public interest (the election for the Tasmanian Branch of the Transport Workers Union of Australia), the public discussion of which was for the public benefit. The public in this context are the members of the Tasmanian Branch of the Transport Workers Union of Australia."

72 This plea relies on the Act, s16(1)(h). The relevant portions of s16 are:

"16 - (1) It is a lawful excuse for the publication of defamatory matter if the publication is made in good faith -

(h) in the course, or for the purposes, of the discussion of a subject of public interest the public discussion of which is for the public benefit.

(2) For the purposes of this section, a publication shall be deemed to be made in good faith if -

(a) the matter published is relevant to the matters the existence of which may excuse the publication in good faith of defamatory matter;

(b) the manner and extent of the publication does not exceed what is reasonably sufficient for the occasion; and

(c) the person by whom the publication is made -

(i) is not actuated by ill-will to the person defamed, or by any other improper motive; and

(ii) does not believe the defamatory matter to be untrue."

73 The circular was published in relation to the election. Any act or omission of Mr Hansch which reflected on his suitability as a candidate was a matter of legitimate interest to those eligible to vote in the election. The discussion of such a matter was of public interest to them and was for the public benefit. Counsel for Mr Hansch did not submit otherwise. Whilst s16(1)(h) requires the publication to be made "in the course, or for the purpose, of the discussion of a subject of public interest", it is not necessary that there should be an existing discussion of the protected subject at the time of publication. The publication may initiate the discussion, Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183 at 223. Mr Bacon may accordingly call in aid s16(1)(h) to protect his publication of imputation (d) provided that the publication was made in good faith. Section 16(2) sets out the circumstances in which a publication is deemed to be made in good faith. Section 19 places the burden of proving absence of good faith on the party so asserting, in this instance, Mr Hansch. Addressing the matters specified in s16(2), it will be apparent from what I have already written that I am satisfied of the relevance of the publication to a subject which attracts protection. The distribution of the circular to Branch members eligible to vote at the elections was appropriate and not excessive. Mr Hansch maintains that in publishing the circular, Mr Bacon was actuated by ill-will or some other improper motive. The Court should be slow to infer evidence of ill-will from the defamatory publication, or to infer that a publisher was actuated by an improper motive. To do either would considerably restrict, if not defeat, the protection bestowed on a privileged occasion by the Act, s16, Calwell v IPEC Australia Ltd [1975] HCA 47; (1975) 135 CLR 321 at 332 and Horrocks v Lowe [1975] AC 135 at 150. As observed in Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1966) 117 CLR 185 by Windeyer J at 211:

"It was for the plaintiff to prove positively an absence of good faith. It had to be shewn by credible evidence. Mere conjecture would not suffice, still less would the assertions of counsel. The protection that the law gives to the discussion of matters of public interest is given for the public benefit. That protection is not lost except it be well proved that it was abused by being used for some purpose foreign to that for which it is given."

74 When the circular was published, the harmonious working relationship which Mr Bacon and Mr Hansch had enjoyed was at an end. They were supporting opposing teams of candidates at the election and I have no doubt there was tension and animosity between them. In considering Mr Bacon's motivation for publishing the circular, it is legitimate to consider his subsequent conduct towards Mr Hansch within the limits outlined in Mowlds v Fergusson (1939) 40 SR(NSW) 311 at 328 - 330. I have already canvassed what occurred. Whilst what was done leaves me in no doubt about Mr Bacon's animus towards Mr Hansch, the evidence does not satisfy me that Mr Bacon's ill-will towards Mr Hansch was the motive for the publication. Mr Bacon's distribution of electoral material was to be expected, if not inevitable. I am satisfied that what prompted the inclusion of the defamatory imputation in the circular was Mr Bacon's desire to bring to the attention of members of the Branch a matter which he considered reflected on Mr Hansch's suitability for election. Mr Bacon had good reason to believe that Mr Hansch had used Branch facilities in the Hobart office to produce electoral material. At that time, each page produced on the photocopier at the Hobart office bore a distinctive mark. That mark appeared on each page of an open letter distributed to Branch members by Mr Hansch and his supporters promoting their candidature. On this basis, Mr Bacon deduced that the Hobart office photocopier had been used to produce the letter. Mr Hansch acknowledges the letter was copied on the photocopier, but says it was not the Branch's photocopier and he paid for the copy paper. He says that at the time the Branch's photocopier was being repaired and he used a replacement copier provided by the repairer with the express consent of the repairer. For the purposes of my consideration of the issue of good faith, it is not necessary for me to deal with Mr Hansch's explanation in any detail. Accepting its veracity, there is no suggestion that the explanation was known to Mr Bacon. Mr Bacon's deduction that the facilities of the Hobart office had been used was reasonable and it was not inappropriate that he should so advise members. The genuineness of Mr Bacon's belief that Mr Hansch had used Branch facilities to photocopy electoral material is a significant factor in my conclusion that Mr Bacon was not motivated by ill-will or any other improper motive in publishing the circular. As I am not satisfied of Mr Bacon's want of good faith in publishing the circular, he can claim the protection of s16(1)(h) in relation to imputation (d). Mr Hansch's counterclaim against Mr Bacon is dismissed.

Plaintiffs' claims based on the do you know leaflet distributed by Mr Hansch

75 The do you know leaflet is set out in par44. The plaintiffs assert that the words in the leaflet in their natural and ordinary meaning meant and were understood to mean:

"(a) That Ken Bacon and Chris Wilkes received thousands of dollars of money to which they were not entitled such money belonging to the members of the Tasmanian Branch of the Transport Workers Union of Australia.

(b) That Ken Bacon and Chris Wilkes were dishonest.

(c) That Ken Bacon and Chris Wilkes acted in the offices they held in the Tasmanian Branch of the Transport Workers Union of Australia contrary to the Rules of the Union.

(d) That the members of the Branch Committee of Management (who included the First, Third and Fourth Plaintiffs) were irresponsible in the conduct of their powers in that office and wasted members money.

(e) That the members of the Branch Committee of Management of the Tasmanian Branch of the Transport Workers Union of Australia were not fit to hold office in the Union.

(f) That the Fourth Plaintiff had breached the duties of his position as Trustee."

76 Mr Bacon and Mr Wilkes maintain that imputations (a), (b) and (c) are derived from par(1) of the leaflet:

"KEN BACON and CHRIS WILKIES both RECEIVED THOUSANDS OF DOLLARS OF YOUR MONEY to which THEY were NOT ENTITLED under the RULES of the union when they took a payment out of the Long Service Leave Fund."

These words are capable of bearing imputation (a) which is really no more than a truncated summation of the paragraph. The statement that Mr Bacon and Mr Wilkes "were NOT ENTITLED under the RULES of the union when they took a payment out of the Long Service Leave Fund" might have prompted a discerning reader to hypothesise that Mr Bacon and Mr Wilkes had a disputed right to be paid an amount out of the Long Service Leave Fund and that the assertion that they were not entitled to the payment was based upon a contentious interpretation of the rules by Mr Hansch. Whilst this might be inferred from the revised response distributed to some members together with the leaflet, I am not satisfied that such an inference would have been drawn by a reasonable reader of the leaflet alone. The statement in the leaflet that the payment Mr Bacon and Mr Wilkes received was "YOUR MONEY", that is the Branch members' money, leaves little room for the possibility that Mr Bacon and Mr Wilkes had any claim of right, whether contingent or otherwise, to the payment. The assertion that "they took a payment out of the Long Service Leave Fund" suggests that they jointly took the payment and is inconsistent with them having each received a separate and distinct payment in lieu of an entitlement to long service leave. A reasonable reader of the first paragraph of the leaflet would have understood it to mean that Mr Bacon and Mr Wilkes took thousands of dollars of Branch members' money to which they were not entitled out of the Long Service Leave Fund. For Mr Bacon and Mr Wilkes to knowingly take money they were not entitled to would be dishonest. It is implicit from the paragraph that they so acted. Their innocent receipt of the payment referred to was unlikely to have been the subject of criticism. To condemn what had occurred without mentioning that Mr Bacon and Mr Wilkes were blameless suggests the contrary. The assertion from which the imputation is derived is reasonably detailed. It identifies where the payment came from and specifies that they were not entitled to it under the rules of the Union. This is not the sort of assertion that is readily dismissed as a vacuous attempt to denigrate an opponent. The specificity of the assertion suggests that it can be substantiated. I conclude that a reasonable member of the Branch who read the leaflet was likely to understand it as conveying the substance of imputations (a) and (b), that is, that Mr Bacon and Mr Wilkes had dishonestly received thousands of dollars of the Branch's money to which they were not entitled under the Union's rules. This imputation had a tendency to harm the reputations of Mr Bacon and Mr Hansch in the mind of such a reader.

77 I place no significance on imputation (c), that Mr Bacon and Mr Wilkes acted in the offices which they held with the Branch contrary to the Branch's rules. Whilst it is asserted that they received a payment they were not entitled to under the rules, the gravamen of the first paragraph is not that they, as officers of the Branch, acted in breach of the Union's rules. No mention is made of them being officers of the Union. It is not asserted that their positions in the Branch were relevant to their receipt of the payment to which they were not entitled. The imputation that they breached the rules by taking the payment is subsumed by imputations (a) and (b).

78 Mr Bacon, Mr Pearson and Mr Mallett claim that imputations (d) and (e) relate to them in their capacity as members of BCOM and can be derived from pars(1), (4) and (5) of the leaflet. Paragraph (1) makes no mention of BCOM's role, if any, in relation to the payment received by Mr Bacon and Mr Wilkes and I am not satisfied that it is capable of being the basis of any imputation against BCOM members. The assertions in pars(4) and (5) relate to "YOUR ELECTED representatives of the B C O M" and would plainly be understood by a reasonable reader to be a reference to all 13 members of BCOM. Where an imputation may be reasonably understood to refer to every member of a limited class, each member of the class may have a cause of action, Knupffer v London Express Newspaper Ltd [1944] UKHL 1; [1944] AC 116 at 119, 122, 123 and 124 and McCormick v John Fairfax & Sons Ltd & Anor (1989) 16 NSWLR 485 at 487. Mr Bacon, Mr Pearson and Mr Mallett were members of BCOM at the relevant time and that would have been known by at least some of the members who read the leaflet. The criticism in pars(4) and (5) of the leaflet can fairly be read as being directed at each member of BCOM. If Messrs Bacon, Pearson and Mallett can establish that they are defamed by the criticism, they can pursue a cause of action referable to it.

79 The assertions made in pars(4) and (5) of the leaflet do not relate to the conduct of the members of BCOM generally. The criticism in these paragraphs is confined to waste and irresponsible decisions referable to efforts to get rid of Mr Hansch. These paragraphs are not capable of providing a basis for imputations as wide as (d) and (e), that is, that BCOM members were irresponsible in the conduct of their powers in that office, wasted members' money and were not fit to hold office in the Union. What these paragraphs impute is that the members of BCOM had made irresponsible decisions to get rid of Mr Hansch and thousands of dollars of the Branch's funds had been and would be wasted as a consequence of those decisions. It is inevitable that Mr Hansch's opinion about BCOM's efforts to get rid of him would be disparaging. Bearing in mind the circumstances in which his criticisms were made, I am unable to accept that a reasonable reader of the leaflet was likely to understand the imputations conveyed in a sense that was defamatory of Messrs Bacon, Pearson or Mallett. Their claims, based on the lesser meaning that I have ascribed to pars(4) and (5) of the leaflet in the context of their assertion of imputations (d) and (e), are rejected.

80 Mr Mallett claims to have been defamed by imputation (f), that he breached the duties of his position as trustee. He says that this imputation can be derived from pars(1) and (4) of the leaflet. Mr Mallett was one of the Branch's two trustees at the time. If the leaflet contained an imputation against a Branch trustee, some readers would have linked that allegation to Mr Mallett. I am quite unpersuaded that the leaflet, or more specifically pars(1) and (4) thereof, are capable of founding the alleged imputation. Nothing in the leaflet suggests that a trustee had any role in Mr Bacon's and Mr Wilkes' receipt of a payment to which they were not entitled under the rules or more particularly that in some way or other their receipt of that payment involved a breach of a trustee's duty. Likewise, nothing in the leaflet suggests a trustee's breach of duty was in any way linked with money being wasted as described in par(4). The leaflet makes no reference to a trustee or the duties of a trustee, let alone a breach of those duties. Mr Mallett's claim based on imputation (f) is dismissed.

81 In response to the plaintiffs' various claims based on the do you know leaflet, Mr Hansch pleaded defences of justification, fair comment and qualified privilege. The only claims based on the leaflet which have been substantiated are those of Mr Bacon and Mr Wilkes that it imputes that they had dishonestly received thousands of dollars of the Branch's money to which they were not entitled under the Union's rules. As to that imputation, the defence of justification must fail. The payments made to, or in the interests of Mr Bacon and Mr Wilkes in lieu of their respective entitlements to long service leave, were properly made and were not tainted by dishonesty. The truth of this imputation has not been established.

82 For similar reasons, the defences of fair comment which have been pleaded also fail. To found a defence of fair comment, it is necessary to establish that the facts upon which the comment is based are true and this has not been done, Pervan v The North Queensland Newspaper Company Ltd & Anor (1992 - [1993] HCA 64; 1993) 178 CLR 309 at 320. A further reason for rejecting defences of fair comment is that the defamatory imputation which has been established is derived from the first paragraph of the leaflet. That paragraph is not a comment but an assertion of fact. This has been acknowledged by Mr Hansch, insofar as that paragraph is described as such in particulars provided on his behalf of his defences. A defence of fair comment cannot justify an assertion of fact.

83 To substantiate a defence of qualified protection, it is not necessary for Mr Hansch to establish the truth of the defamatory matter under consideration. Subject to the issue of good faith, I accept, without considering the matter in any detail, that the publication of the leaflet attracts the protection of one or all of the provisions of the Act, s16(1), which have been invoked by Mr Hansch in his pleading. Mr Bacon and Mr Wilkes contend that Mr Hansch is denied the protection of s16(1) as he did not publish the defamatory matter in good faith. When dealing with Mr Hansch's claim, I canvassed the considerations to be taken into account in relation to the issue of good faith. The critical matter in this instance is Mr Hansch's belief about the truth or otherwise of the defamatory matter he published. Shortly prior to the leaflet's distribution, Mr Hansch and Mr Wilkes had a discussion in relation to the conflict that precipitated its publication, in the course of which Mr Wilkes expressed his concern to Mr Hansch about assertions Mr Hansch had made about the misappropriation of Branch funds. Mr Hansch assured Mr Wilkes that he was not accusing anyone of stealing money and explained that when he said that the money had been misappropriated, he meant that it had not been allocated appropriately. When the leaflet was published, Mr Hansch was aware that the payments to which he referred in the leaflet had been made to Mr Bacon and Mr Wilkes in lieu of their respective entitlements to long service leave. Mr Hansch's belief was that the payments had been made in contravention of the Union's rules. In his evidence, Mr Hansch in substance said that Mr Wilkes, like any employee, had every right to ask for his long service leave to be paid out and having succeeded in persuading his employer to make the payment, he was entitled to take it. As to Mr Bacon and the members of BCOM, Mr Hansch in substance said that at the time he published the leaflet he knew full well that nothing had been done by them to cheat anyone out of anything and he never believed that any of the people concerned had stolen money from the Branch. He did not believe that Mr Bacon and Mr Wilkes had acted dishonestly in respect of their receipt of payments in lieu of their long service leave entitlements. In essence, his complaint was that Branch funds had not been accounted for properly or been dealt with in accordance with the Branch's rules.

84 Whilst it is clear that at the time the leaflet was published Mr Hansch believed that the payments of long service leave to Mr Bacon and Mr Wilkes had been made in contravention of the Union's rules, it is equally clear that Mr Hansch believed it was untrue to say what I have found he imputed in the first paragraph of the leaflet, that is, that Mr Bacon and Mr Wilkes dishonestly received the payments. That Mr Hansch did not intend to convey that meaning is irrelevant. An assessment of good faith for the purposes of the Act, s16, focuses on the defamatory matter published, that is, the imputation conveyed, not the meaning the publisher intended to convey. In Chakravarti v Advertiser Newspapers Ltd (supra), Brennan CJ and McHugh J, at 528 said:

"A plea of justification, fair comment or qualified privilege in respect of an imputation not pleaded by the plaintiff does not plead a good defence."

It follows that Mr Hansch's belief in the truth of whatever meaning he intended to convey in the leaflet does not assist him. As he did not believe in the truth of the dishonesty imputation which I have found he published, the publication was not made in good faith and he cannot substantiate a defence of qualified protection. Mr Bacon and Mr Wilkes succeed in their claim in relation to that imputation.

Plaintiffs' claims based on the revised response

85 In par33 I set out relevant portions of the document Mr Hansch prepared in response to Mr Mallett's charges. The third paragraph of that document was altered, as detailed in par45 before Mr Hansch distributed copies of that altered document, the revised response, when he handed out copies of the do you know leaflet. About 90 copies of the revised response were distributed to members. Copies were handed to recipients of the leaflet who asked for more information.

86 Mr Bacon, Mr Pearson and Mr Mallett claim to be defamed by the following portion of the third paragraph of the revised response:

"I allege that a member or members of the Branch Committee of Management are guilty of

87 Messrs Bacon, Pearson and Mallett claim that this paragraph imputes that each of them:

(b) Had misbehaved in a gross manner in relation to their duties and powers as members of the Branch Committee of Management.

(c) Had neglected in a gross manner their duties and powers as members of the Branch Committee of Management.

88 The general assertions which are the subject of this claim are expressed to relate to "a member or members of the Branch Committee of Management". The only member of BCOM who is identified by name in the revised response is Mr Bacon, who is referred to on numerous occasions. I have no hesitation in finding that a reasonable reader would identify him as one of the objects of the assertions which are the basis of this claim. I am not so satisfied in relation to Messrs Pearson and Mallett. They are, of course, potentially linked to the contents of the revised response insofar as it refers to members of BCOM and the Branch trustees. They were both known to be members of BCOM and Mr Mallett was known to be a Branch trustee. Neither of them is identified in the response as being the object of any of the assertions made in it. The assertions are not expressed to relate to every member of BCOM or the Branch trustees. The following statement appears towards the end of the response:

"I would also like to take this opportunity to say that I honestly believed that the majority of BCOM members are honest, sincere people who are simply being kept in the dark."

This statement makes it plain that Mr Hansch is not suggesting that the majority of the members of BCOM have knowingly done anything improper. Mr Pearson and Mr Mallett have not established that the assertions complained of in the revised response may reasonably be understood to refer to them.

89 The most serious imputation asserted to be derived from the revised response is imputation (d), that Mr Bacon had stolen Union funds. Read in isolation, the passage complained of is capable of founding this imputation. A statement that a person has misappropriated funds is commonly understood to mean that he or she has dishonestly misused funds or stolen them. There is authority that the passage complained of should not be read in isolation and the response of a reasonable reader should be judged from the entire publication, not just a portion of it, Charleston & Anor v News Group Newspapers Ltd & Anor [1995] UKHL 6; [1995] 2 AC 65, World Hosts Pty Ltd v Mirror Newspapers Ltd [1976] 1 NSWLR 712 and Gordon v Amalgamated Television Services Pty Ltd & Anor [1980] 2 NSWLR 410. A contrary view was expressed in Chakravarti v Advertiser Newspapers Ltd (supra) by Kirby J at 574 - 575. This conflict is of no consequence in this instance as I am satisfied that as a matter of fact a reasonable reader of the revised response would have read the whole of it. I reach this conclusion because copies of the response were only provided to those Branch members who sought further information about matters raised in the leaflet. They are likely to have read the response in its entirety as their request for the document suggests a desire to be better informed and because the preamble to the paragraph which is the basis of the plaintiffs' claims refers the reader to the balance of the document where "more urgent and serious problems relating to some members of BCOM" were to be addressed.

90 It would be apparent to a reasonable reader of the entirety of the revised response that the matters raised by Mr Hansch did not involve an assertion of theft and his complaints were that funds had been dealt with other than in accordance with the Branch's rules. What emerges from reading the response is that Mr Bacon was a Branch employee with 10 years' service, who was entitled to long service leave and who, it can be inferred, had received a payment in lieu of that entitlement. As to that payment, it is evident that Mr Hansch's complaint was that the Branch's rules made no provision for a payment to be made in lieu of a long service leave entitlement. I do not accept that a reasonable reader of the revised response would understand it to impute that Mr Bacon had stolen Union funds. I reject imputation (d).

91 Imputation (a), that Mr Bacon had breached the Branch's rules, can be derived from the response, as can imputations consistent with (b) and (c), that Mr Bacon had grossly misbehaved and neglected his duties in the performance of his obligations as a member of BCOM. A reasonable reader of the revised response is likely to have understood it as imputing these matters and they are matters which would tend to diminish Mr Bacon's standing in that reader's estimation.

92 Mr Hansch's defences to the claims made referable to the revised response are the same as those he relied on in relation to the leaflet. They include a plea of qualified protection to the effect that the matters complained of were published in good faith and were:

"made for the purpose of giving information to members and officials of the Transport Workers Union with respect to subjects as to which the members and officials of the Transport workers Union had, or the Defendant reasonably believed that the members and officials of the Transport Workers Union had, such an interest in knowing the truth as to make the Plaintiffs' conduct in making the publication reasonable in the circumstances."

93 This defence is based on the Act, s16(1)(e), which provides:

"(1) It is a lawful excuse for the publication of defamatory matter if the publication is made in good faith -

(e) for the purpose of giving information to the person to whom it is made with respect to a subject as to which that person has, or is reasonably believed by the person who makes the publication to have, such an interest in knowing the truth as to make the last-mentioned person's conduct in making the publication reasonable in the circumstances;".

94 The matters addressed in the revised response relate to the administration of the Branch and were matters about which Mr Hansch had good reason to believe that Branch members would be interested to know the truth. The publication of the revised response was confined to members who expressed an interest in knowing more about the assertions made by Mr Hansch in the do you know leaflet. It was reasonable for Mr Hansch to provide them with copies of the response. Subject to the issue of good faith, Mr Hansch is entitled to the protection provided by s16(1)(e).

95 Mr Bacon contends that the publication was not made in good faith. I am unpersuaded as to this. The only element of good faith open to challenge referable to this publication is Mr Hansch's belief about the truth of the defamatory imputations it conveyed. The detailed material contained in the revised response is a testament to the bona fides of Mr Hansch's belief in the imputations. In his evidence, he elaborated on other matters relevant to this. I am in no doubt about the genuineness of his belief in the imputations at the time of publication. Mr Hansch has substantiated a defence of qualified protection in relation to the imputations conveyed by the revised response against Mr Bacon.

96 The claims of Messrs Bacon, Pearson and Mallett referable to the revised response are dismissed.

Plaintiffs' claims based on what Mr Hansch said at Qantas on 27 May 1996

97 My findings in relation to this publication are set out in pars52 - 54. The plaintiffs assert that the words spoken by Mr Hansch in their natural and ordinary meaning meant and were understood to mean:

"(a) That the First and Second Plaintiffs were dishonest.

(b) That the First and Second Plaintiffs were stealing Union funds.

(c) That Union dues were at their current rate to finance the dishonest activities of the First and Second Plaintiffs.

(d) That the members of the Branch Committee of Management (including the First, Third and Fourth Plaintiffs) were incompetent in carrying out their duties."

98 In summary, Mr Hansch said to Branch members at the Qantas meeting that Mr Bacon and Mr Wilkes had misled BCOM and misused Union funds by obtaining illegal long service leave payments. He also said that the Union's dues in Tasmania were higher than in some other States and this was improper and without cause. Mr Bacon, Mr Pearson and Mr Mallett assert that it can be imputed from what was said that the members of BCOM, which included them, were incompetent in carrying out their duties. Mr Hansch's only specific reference to the members of BCOM was the comment that they were being misled by Mr Bacon and Mr Wilkes. No reference was made to the duties of the members of BCOM or their competence in carrying out their duties. Whilst he said that the amount of the Union's dues was improper, this was not attributed to the incompetence of all or any of the members of BCOM. The words used are incapable of providing a basis for a reasonable listener to understand them as meaning that all the members of BCOM were incompetent in carrying out their duties. I am accordingly not satisfied that imputation (d) has been established. I also reject imputation (c), that Union dues were at their current rate to finance the dishonest activities of Mr Bacon and Mr Wilkes. A reasonable listener could not derive that imputation from what was said.

99 The assertion that Mr Bacon and Mr Wilkes were misleading BCOM for their own financial gain in order to obtain illegal long service leave payments carries with it the inference that they were doing so knowingly. I am satisfied that a reasonable listener would have imputed from what was said of Mr Bacon and Mr Wilkes that they had dishonestly obtained long service leave payments from Union funds. To this limited extent I find imputations (a) and (b) are established. The defences of justification, fair comments and qualified protection, which Mr Hansch has raised cannot be sustained for the same reasons as I gave in relation to the dishonesty imputation derived from the do you know leaflet.

Plaintiffs' claims based on Mr Hansch's comments at Pioneer Concrete on 1 August 1996

100 This is the plaintiffs' final claim. My findings on what Mr Hansch said on this occasion are set out in pars56 - 58. The plaintiffs assert that the following imputations can be derived from what Mr Hansch said:

"(a) That the First and Second Plaintiffs were dishonest.

(b) That the First and Second Plaintiffs were stealing Union funds.

(c) That the Third and Fourth Plaintiffs were dishonest.

(d) That the Third and Fourth Plaintiffs as members of the Branch Committee of Management, lacked the intellect, courage and independence to properly carry out their duties and powers on that Committee.

(e) That the Third and Fourth Plaintiffs as members of the Branch Committee of Management, aided and abetted the theft of Union monies by Ken Bacon and Chris Wilkes.

(f) That the Fourth Plaintiff breached the duties of his position of Trustee of the Tasmanian Branch."

101 When speaking to members of the Branch at Qantas, Mr Hansch said that he had proof that Mr Bacon and Mr Wilkes had taken money from Union funds. Mr Hansch also said that there was a need to stop this misappropriation of members' funds disappearing at the hands of Mr Bacon and his cronies and billygoats on the Branch Committee. What he said can only provide a basis for an imputation against Mr Pearson and Mr Mallett if it was reasonably understood to refer to all members of BCOM or if in some other way it could be understood as specifically referring to Mr Pearson and Mr Mallett. The words complained of were uttered by Mr Hansch as he was endeavouring to encourage members of the Branch to sign a petition seeking an audit of the Branch's finances. When Mr Hansch said that he had proof that Mr Bacon and Mr Wilkes had taken Union funds, he was interrupted by Mr Williams. Mr Williams said that another audit was unnecessary and would be a waste of time and money as the Union's finances had been audited by a certified accountant. Mr Hansch responded to this interruption by asserting that there was a need to stop the misappropriation of funds at the hands of Mr Bacon and his cronies and billygoats on the Branch committee. About five members of the Branch witnessed this exchange. I am unable to accept that a reasonable representative of those present would have understood what Mr Hansch said to be a reference to all of the members of BCOM. There is no reason for concluding that the reference to Mr Bacon's cronies and billygoats on BCOM would have been understood by any of those present as a reference to Mr Pearson or Mr Mallett. I am unpersuaded that any imputation against Mr Pearson and Mr Mallett can be derived from what Mr Hansch said and accordingly their claims as to imputations (c), (d), (e) and (f) are rejected.

102 In the context of a request that members sign a petition seeking an audit of the Union's funds, Mr Hansch asserted that he had proof that Mr Bacon and Mr Wilkes had taken money from the Union and that there was a need to stop this misappropriation of members' funds at the hands of Mr Bacon and his cronies. What Mr Hansch said is capable of being understood by a reasonable listener as an assertion that Mr Bacon and Mr Wilkes had dishonestly taken money from the Union and to this extent I find imputations (a) and (b) established. For the reasons given in relation to the dishonesty imputation I found established based on the do you know leaflet, I reject the defences pleaded by Mr Hansch.

103 Mr Bacon and Mr Wilkes are entitled to damages for:

* The imputation contained in the do you know leaflet that they dishonestly received thousands of dollars of the Branch's money to which they were not entitled under the Union's rules. The leaflet was distributed to about 600 Branch members over a 10 day period in May 1996.

* The imputation published at the Qantas meeting that they had dishonestly obtained a long service leave payment from Union funds. This imputation was published to about seven Branch members on 27 May 1996.

* The imputation published at the Pioneer Concrete meeting that they had dishonestly taken money from the Union. This imputation was published to about five Branch members on 1 August 1996.

104 All the imputations were published to Branch members, the great majority of whom would have been well aware of the acrimony between Mr Hansch and Mr Bacon which had grown since they supported opposing teams for the Branch elections which occurred early in 1995. Following the purported termination of Mr Hansch's employment in July 1995, he successfully took proceedings in the Industrial Relations Court against Mr Bacon and others to obtain a declaration that his employment continued. In May 1996, disciplinary proceedings were initiated against Mr Hansch by Mr Mallett and a special meeting of BCOM was convened to hear the charges. For the purposes of his defence, Mr Hansch distributed the precursor to the revised response at that meeting. Those who attended the meeting and read that document would have appreciated that Mr Hansch's complaints about Mr Bacon's and Mr Wilke's receipt of money from the Union did not involve an assertion of dishonesty on their part, but reflected Mr Hansch's belief that under the Union's rules they should not have been allowed to receive payments in lieu of their entitlement to long service leave. Similarly, those members who received a copy of the revised response contemporaneous with receipt of the leaflet, would have appreciated that Mr Hansch was not claiming that Mr Bacon and Mr Wilkes were dishonest and that his complaint about their receipt of Union funds related to his interpretation of the Union's rules. It is inevitable that there would have been discussion between the better informed Branch members and others who simply received the leaflet or heard the comments and that the true nature of Mr Hansch's assertions against Mr Bacon and Mr Wilkes, as distinct from the imputation of dishonesty conveyed by the leaflet and the comments, would have been widely known amongst Branch members. In these circumstances, I am satisfied that the majority of those to whom the imputations were conveyed would have given little credence to them. This is of importance in relation to damages. Whilst it is unnecessary to prove that those to whom an imputation was published believed the truth of the imputation in order to establish a cause of action, the fact that many of those to whom an imputation was published would not have believed it, is to be taken into account in mitigation of damages, Barbaro v Amalgamated Television Services Pty Ltd [1985] 1 NSWLR 30 at 37 and Bateman v Shephard & Ors (1997) Aust Torts Reports 81-417 at 63,892.

105 Some confirmation for my conclusion that the majority of those to whom the imputations were published did not believe them is to be found in the letter, set out in par50, sent by the solicitor for Mr Bacon and Mr Wilkes to Mr Hansch on 4 June 1996. At that time Mr Bacon and Mr Wilkes were apparently of the view that such damage as had been caused to their reputations by the publication of the leaflet did not warrant the institution of proceedings. I do not place a lot of weight on this letter, the reference to the limited damage caused to the reputations of Mr Bacon and Mr Wilkes may well be an explanation conjured up to provide a reason for not pursuing the threatened proceedings against Mr Hansch. They probably thought that the sensible course was to put the matter behind them and avoid the uncertainties of litigation and the inconvenience, costs and publicity it would involve. When Mr Hansch made it plain that he would persist with his assertions, they apparently felt constrained to institute proceedings against him.

106 Within a short time of the Federal Council of the Union assuming responsibility for the Branch in July 1998, Mr Bacon successfully stood for election to the Tasmanian House of Assembly. This suggests that his reputation was not significantly damaged by the publication of the imputation.

107 I have no doubt that both Mr Bacon and Mr Wilkes were distressed by the dissemination of the imputations and that as a consequence of their publication, some damage was caused to their reputations. I do not consider that their claims warrant significant damages. An award of modest damages should vindicate their reputations in the public arena and console them for the wrong they suffered. Such an award would also be consistent with the moderate level of the damages that have been awarded in defamation actions in this State. I see no reason for distinguishing between Mr Bacon and Mr Wilkes in relation to damages.

108 The leaflet was by far the most damaging publication. Being written, it had the potential for lasting impact and it was distributed more widely than the other publications. I assess the separate damages of Mr Bacon and Mr Wilkes in relation to the leaflet at $3,000. The oral publication at Qantas added little to the damage caused to them by the contemporaneous publication of the leaflet. Similarly, the oral publication at Pioneer Concrete added little to the damage caused to them by Mr Hansch's prior publication. I assess damages in relation to each of these publications at $50. Mr Hansch is according ordered to pay Mr Bacon damages of $3,100 and to pay Mr Wilkes damages of the same amount.