Bashford v Information Australia

Bashford v Information Australia - [2000] NSWSC 665 - NSWSC 2000 case summary — Zoe

[8]

"The copyright dispute arose in a curious way. The first and second respondents own and conduct a business known as 'Risk Management Solutions' ('RMS'). RMS acted as an agent for Chemwatch in certain parts of New South Wales. The second respondent ('RMC') conducted a software division as an adjunct to the business of RMS. In that capacity RMC published a monthly 'Infax' newsletter to actual and potential customers of RMS and RMC. It did not appear to be disputed that both RMS and RMC were responsible and therefore liable for the publication of the newsletter which was published for and in the interests of both RMS and RMC: see Lisciandro v Official Trustee in Bankruptcy 1995 ATPR 41-436 at 40,903-4, and on appeal (1996) 139 ALR 689. … In publishing the November 1993 Infax newsletter RMS and RMC published, or caused to be published, information in trade and commerce which was misleading and deceptive. The facts that: · RMS and RMC did not intend to publish information that was misleading or deceptive; and · RMS and RMC were not the original source of the information they caused to be publicised do not afford RMS or RMC a defence to a claim for breach of s.52. It is sufficient that RMC and RMS adopted the information as accurate and caused it to be published: See Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525 at 538-41." (emphasis added) 4 As can be seen, Merkel J did not expressly rule that R.A. Bashford Consulting Pty Ltd published the Infax newsletter. Rather, he held that Risk Management Concepts Pty Ltd conducted a software division as an adjunct to the business of Risk Management Solutions, a venture in which R.A. Bashford Consulting Pty Ltd and Risk Management Concepts Pty Ltd were the principals, and in that division Risk Management Concepts Pty Ltd published the monthly Infax newsletter. R.A. Bashford Consulting Pty Ltd was found to be liable, not expressly as a publisher, but as a principal of a business in the course of which Risk Management Concepts Pty Ltd published the newsletter. His Honour's words "caused to be published" may have been adopted to describe the position of R.A. Bashford Consulting Pty Ltd. 5 There were three imputations pleaded in the statement of claim:

[11]

(c) that the Plaintiff was equally culpable with Mr Bialkower and Risk Management Concepts for causing serious harm and loss to ACOHS Ltd by the publication of a false report." 6 Of these imputations, a jury has found that imputation (b) was conveyed and was defamatory of the plaintiff. The jury found that imputations (a) and (c) were not conveyed. 7 These findings accord with my own reading of the offending article. First, the libel was innocent so far as R.A. Bashford Consulting Pty Ltd and Risk Management Concepts Pty Ltd were concerned. Therefore, the word "guilty" in imputation (a) was inappropriate. Secondly, Mr Bialkower was the person primarily responsible for the libel. Therefore, R.A. Bashford and Risk Management Concepts Pty Ltd were not equally liable with Mr Bialkower, as imputation (c) contended. 8 The jury found that the article in the Occupational Health and Safety Bulletin was defamatory of Mr Bashford. There is no issue as to that. However, to say of a publisher that it innocently published "an incorrect report" would not seem to be a serious defamation. Mr Bashford, however, was very upset. This was not particularly because his own name was mentioned rather than that of the company. In his cross-examination, Mr Bashford agreed that, in the eyes of the marketplace, R.A. Bashford Consulting Pty Ltd and Rex Bashford were effectively one in the same. R.A. Bashford Consulting Pty Ltd was a private company established by Mr Bashford and his wife and all Mr Bashford's consulting activities were carried out in the name of his company. Mr Bashford said, however, that the principal aspect of the article which upset him was the description of "publishers". 9 Mr Bashford's upset seems to have arisen out of matters which were not discussed in Merkel J's judgment. Mr Bashford had been very concerned about the Federal Court proceedings and had been extremely anxious to ensure that his own reputation should not be affected by any finding that he was involved in the publication of the Infax newsletter. Apparently, some evidence was put forward in the proceedings which would have implicated Mr Bashford in the publication of the newsletter. Mr Bashford denied any involvement. He gave evidence for almost a day during the proceedings in the Federal Court. 10 In the result, Merkel J expressed his findings in the passages I have set out above. In his reasons for judgment, his Honour did not mention Mr Bashford or discuss the matters which must have been the subject of Mr Bashford's evidence. Mr Bashford was pleased with the result, with the fact that he was not mentioned, that the damages awarded were only $20,000 and that his Honour ordered that R.A. Bashford Consulting Pty Ltd and Risk Management Concepts Pty Ltd were entitled to contribution and indemnity from Mr Bialkower in respect of 75 per cent of the damages and costs. 11 It seems that Mr Bashford's relief at the result of the Federal Court proceedings was shattered when he read the article in the Occupational Health and Safety Bulletin, which not only named him personally, but described him as one of the publishers. Mr Bashford apparently felt that all his efforts to distance himself from the Infax newsletter, efforts which he considered to have achieved success in the Federal Court proceedings, were destroyed by the article in the Occupational Health and Safety Bulletin. 12 In my opinion, Mr Bashford approached the article in the Occupational Health and Safety Bulletin from the wrong perspective. Merkel J did not hold that R.A. Bashford Consulting Pty Ltd had no involvement with the Infax newsletter. On the contrary, he found that that company was liable for the defamation which it published. In this circumstance, an ordinary reader would not be likely to consider that there was any significant difference between the term "published" and the term "caused to be published". In the context of an innocent libel, the description of a person as "publisher" would not seem to carry any significantly greater defamatory imputation than would a description of a person as a principal of a business in the course of which the incorrect information was published. 13 Indeed, there is no evidence that Mr Bashford's reputation was injured by the article in the Occupational Health and Safety Bulletin. In answers to interrogatories, Mr Bashford said that only one person had mentioned the article to him and that no one had advised him that, as a result of reading the article, he or she had thought less of him. Those answers accord with my impression of the article. I would not expect it to have caused a ripple amongst those operating in the occupational, health and safety field. As I have said, the article suggests that the publication was innocent and resulted from information for which Mr Bialkower was responsible. Moreover, the amount of damages ordered, $20,000, was relatively low. 14 Mr T S Hale SC, with whom Mr M S White of counsel appeared for the defendant, relied upon the defence arising under s 13 of the Defamation Act, 1974 which provides that, "It is a defence that the circumstances of the publication of the matter complained of were such that the person defamed was not likely to suffer harm." 15 Such a defence has rarely succeeded. In Chappell v Mirror Newspapers Ltd (1984) Aust Torts Reps ¶80-691 and King and Mergen Holdings Pty Ltd v McKenzie (1991) 24 NSWLR 305, it was held that the defence applied when the circumstances of the publication were such that any harm was likely to be trivial. In Chappell v Mirror Newspapers Ltd, Moffitt P said at 68,947:

[16]

"It was not disputed, in this case on either side, that a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential. Nor is it disputed that a privileged communication - a phrase often used loosely to describe a privileged occasion, and vice versa - is a communication made upon an occasion which rebuts the prima facie presumption of malice arising from a false and defamatory statement prejudicial to the character of the plaintiff, and puts the latter on proof that there was malice in fact: per Parke B, Wright v Woodgate 2 CM&R 573, 577. Nor that the question of whether the occasion is a privileged occasion or not is, if the facts be not in dispute, or if in dispute have been found by the jury, a question of law to be decided by the judge at the trial. Nor yet that a person making a communication on a privileged occasion has not, in the first instance and as a condition of immunity, to prove affirmatively that he honestly believed the statement made to be true, his bona fides being in such a case always presumed: Jenoure v Delmege [1891] AC 73, 79; Clark v Molyneux (1877) 3 QBD 237, 249." 21 Once qualified privilege attaches, because the defamatory material was communicated on a privileged occasion, the defence will succeed, unless it is established by the defamed person that the communication was actuated by malice, a concept which comprehends improper motive: see Horrocks v Lowe [1975] AC 135 at 149; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 572. 22 In the present case, I am satisfied that the principal part of the article, that part which dealt with Mr Bialkower's cross-claim, was published on a privileged occasion, because Mr Bialkower's cross-claim raised issues which were of general interest to persons operating in the field of occupational, health and safety. It concerned the copyright in information in a Chemwatch MSDS which related to occupational, health and safety matters. Mr Bialkower had claimed that the copying, reproduction and adaptation of the Chemwatch MSDSs breached his copyright. Merkel J, without deciding the question of copyright, discussed the circumstances in which an implied licence for the use of material would arise. His Honour also discussed discretionary issues and held that, even if he had found that there was an infringement of Mr Bialkower's copyright, he would have refused relief on discretionary grounds. His Honour said:

[20]

"So, the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial. The protection might, however, be illusory if the onus lay on him to prove that he was actuated solely by a sense of the relevant duty or a desire to protect the relevant interest. So he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. 'Express malice' is the term of art descriptive of such a motive. Broadly speaking, it means malice in the popular sense of a desire to injure the person who is defamed and this is generally the motive which the plaintiff sets out to prove. But to destroy the privilege the desire to injure must be the dominant motive for the defamatory publication; knowledge that it will have that effect is not enough if the defendant is nevertheless acting in accordance with a sense of duty or in bona fide protection of his own legitimate interests. The motive with which a person published defamatory matter can only be inferred from what he did or said or knew. If it be proved that he did not believe that what he published was true this is generally conclusive evidence of express malice, for no sense of duty or desire to protect his own legitimate interests can justify a man in telling deliberate and injurious falsehoods about another, save in the exceptional case where a person may be under a duty to pass on, without endorsing, defamatory reports made by some other person. Apart from those exceptional cases, what is required on the part of the defamer to entitle him to the protection of the privilege is positive belief in the truth of what he published or, as it is generally though tautologously termed, 'honest belief'. If he publishes untrue defamatory matter recklessly, without considering or caring whether it be true or not, he is in this, as in other branches of the law, treated as if he knew it to be false. But indifference to the truth of what he publishes is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that it is true. The freedom of speech protected by the law of qualified privilege may be availed of by all sorts and conditions of men."

[22]

"A defence of qualified privilege will be defeated where the plaintiff is able to establish that, at the time of the publication, the defendant's state of mind was not that which the law requires for a publication upon an occasion of qualified privilege. The law requires that the defendant use the occasion for the purpose for which the privilege is given and that (other than in the exceptional case where the defendant is under a duty to pass on, without endorsement, defamatory reports made by some other person) he have an honest belief in the truth of what he published. Where the defendant has established that he published the matter complained of upon an occasion of qualified privilege, these two states of mind are presumed in his favour unless and until the contrary is proved by the plaintiff. If the plaintiff shows either that the defendant has used the occasion to publish the matter complained of for a purpose other than that for which the privilege is given (which is usually described as an indirect or an improper or a foreign motive) or that the defendant did not have an honest belief in the truth of what he published, the defence of qualified privilege is defeated. … Two important principles are also emphasised by the decision in Horrocks v Lowe (at 149-151): (a) The plaintiff must establish that any foreign purpose shown by the evidence is the dominant motive for the publication; a dislike of the plaintiff, or an indignation at what the defendant believed to be the plaintiff's conduct (together with his taking advantage of the occasion to expose that conduct), is not sufficient to establish express malice unless that is shown to be the dominant motive for the defendant's publication. (Dominant should be understood in the sense of 'paramount': cf Waugh v British Railways Board [1980] AC 521 at 543.) (b) Express malice is not established where the defendant's belief in the truth of what he published is the result of carelessness, impulsiveness, irrationality or prejudice, or where the defendant has relied upon intuition instead of reasoning, or where he has leapt to conclusions upon inadequate evidence, or where he has failed to recognise the significance of material which might cast doubt upon the validity of the conclusions which he has reached. Provided that the belief is honestly held, the imperfections of the mental processes by which that belief is arrived at by the defendant do not matter." 26 The onus lies on the plaintiff to establish malice. In the present case, no evidence has been brought forward to show malice or any improper purpose on the part of the defendant. The journalist who wrote the article was not called to say that he or she had an honest belief that what the article said was true nor was his absence explained. However, as the article does not suggest a personal attack on Mr Bashford and as it is not one from which it should be inferred that the journalist was reckless, I draw no adverse inference from the journalist's non-appearance. A director of the defendant gave evidence and was cross-examined. 27 Mr Campbell has submitted that, because the name "RA Bashford" was used instead of the name "R.A. Bashford Consulting Pty Ltd", the conclusion should be drawn that the journalist wrote the article recklessly, without considering or caring whether it was true or not. In my opinion, this is not a case in which a conclusion of malice should be drawn. It appears to me that the writer of the article was not reckless but took a great deal of care to write a clear and fair article. By using the words "an incorrect report" and the words "Bialkower was the source of the information and authorised its publication", the journalist took care to ensure that the publication of the false and misleading conduct would be understood to be an innocent act on the part of the publishers. 28 In my opinion, the naming of the parties as "RA Bashford and Risk Management Concepts" was no more than a careless act taken by a journalist who had gone to considerable pains to ensure that the publishers would not be regarded as other than innocent. Merkel J did not use the name R.A. Bashford Consulting Pty Ltd, referring to that company as the first respondent. I am satisfied that the journalist used the name "RA Bashford" in good faith intending to refer to the first respondent. The full corporate names of the first and second respondents were presumably dropped to give a better flow to the article. As was said by Lord Griffiths, delivering the judgment of their Lordships in Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354, at 362:

[23]

"Words are often capable of more than one meaning, and because the jury may attach to them a defamatory meaning which the writer did not intend, it does not follow that the writer did not honestly believe in the truth of what he wrote and reasonably intended a different meaning to be given to his language." 29 I cannot draw any inference of malice from the use by the journalist of the description of "RA Bashford and Risk Management Concepts" as "publishers" and of their conduct as "publishing". I cannot draw from the use of these terms the conclusion that there was malice or recklessness on the part of the journalist. I do not think that, in the brief article, any words other than those used by the journalist could have been used. There were some subtleties in the judgment of Merkel J, subtleties which appear to have pleased Mr Bashford. No reader of Merkel J's judgment, who was unaware of the evidence given in the case, would have appreciated that there were matters unsaid in the judgment which, in Mr Bashford's mind, were important. I consider that the journalist fairly summed up Merkel J's judgment by using the terms which he did. In such a brief article, the terms were appropriate. 30 Mr Campbell submitted that qualified privilege does not attach to a report of a legal case unless the report is true and accurate. That is certainly the case under s 24 of the Defamation Act, which provides a defence for the publication of a fair protected report. However, the cases to which Mr Campbell referred, Thom v Associated Newspapers Ltd (1964) 64 SR (NSW) 376, Baffsky v John Fairfax & Sons Ltd (1991) Aust Torts Reps ¶81-144, Webb v Times Publishing Co. Ltd [1960] 2 QB 535 and Waterhouse v Broadcasting Station 2GB Pty Ltd (1985) 1 NSWLR 58, are all cases where the issue concerned qualified privilege arising from the publication of a fair and accurate report. In my opinion, those cases do not limit the ordinary principles applicable to common law qualified privilege. Of course, if a report is unfair, that may be an indication that the publisher did not have an honest belief in the truth of what was published. That is a different question. That goes to the issue of malice. 31 For the reasons I have given, I am of the view that the defence of common law qualified privilege succeeds. 32 The last defence relied upon by Mr Hale was that provided by s 16 of the Defamation Act which provides a defence if there is substantial truth in other contextual imputations arising in the publication from which the imputation complained of arises and, by reason of those contextual imputations, the imputation complained of does not further injure the reputation of the plaintiff. Section 16(2) provides:

[29]

"It is, in my view, basic to the scheme of s 16 that both of the imputations in question (that is, the imputation pleaded by the plaintiff and the contextual imputation pleaded by the defendant) must be conveyed by the matter complained of at the same time and that each must differ in substance from the other. This is fundamental to the whole operation of the 1974 Act." 35 In the present case, the defendant simply seeks to substitute for the words "by publishing" other words which the imputation pleaded by the plaintiff does not use and which the defamatory matter also does not use. The words put forward by the defendant are words which would be encompassed by the concept of publishing but are less strong. The defendant seeks to use words weaker than the words used in the defamatory material and then to justify the truth of that weaker imputation. In my view, that course is inappropriate. In the first place, the words "engaged in the business of publication" and "permitted" should not be drawn as imputations from the offending material because those words were not used. In the second place, the term "by publishing" is not a precise, definitive term. It encompasses many types of arrangements including agency arrangements. Therefore, it encompasses the concept of "engaged in the business of publication" and the concept of "permitted an edition of a newsletter to be published". It follows that the contextual imputations relied upon do not differ in sufficient substance from the imputation complained of, although weaker words are used. 36 I turn now to the issue of damages in case the view I have expressed about the defence of common law qualified privilege may be wrong. 37 In his evidence in this Court, Mr Bashford said that he was so concerned by the article in the Occupational, Health and Safety Bulletin and so dispirited by it that he gave up a project on which he had been working for several years and which he had expected to come to fulfilment in late 1997. That project was one to put onto CD-Rom a service including all statutes and regulations relevant to the occupational, health and safety field and summaries of all legal cases which were current. Mr Bashford had spent more than $17,000 in payments to an assistant who had prepared draft summaries of cases relevant to the field given in the preceding five years. Mr Bashford said that, at the time the offending article appeared, he was in the process of putting the information onto CD-Rom in an appropriate format. Mr Bashford gave evidence that he was so upset by the article in the Occupational, Health and Safety Bulletin that he abandoned the project. 38 Although the appropriate particulars of the claim for economic loss have not been provided, Mr Bashford was allowed to prove a claim for economic loss resulting from this abandonment. Mr Bashford gave evidence that he expected he would have been able to sell five hundred services at $500 per initial subscription with ongoing updates at $300 per year and that he would have expected to receive a return of twenty-five per cent net before tax. Counsel made a claim based on an eighty per cent possibility of an income of $100,000 for the years 1997 and 1998 and $37,500 for each of 1999 and 2000, with ongoing losses. Cases such as Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 were referred to. 39 I need not describe the claim for economic loss in any greater detail and I need not discuss the fact that the project was a project of R.A. Bashford Consulting Pty Ltd. In my opinion, the article published in the Occupational, Health and Safety Bulletin was incapable of causing economic loss of this type. Although the article had a defamatory meaning, it was, nevertheless, so relatively innocuous that it was incapable of affecting either the existing business of R.A. Bashford Consulting Pty Ltd or any future business in which it might engage. It has not been claimed that the article had, in any other respect, the slightest economic effect upon the activities of R.A. Bashford Consulting Pty Ltd. 40 Mr Bashford would be, however, entitled to damages for the hurt which he suffered. While another person may well have not had the slightest concern about the article, Mr Bashford was very upset by it. 41 I accept two submissions on the issue of damages made by Mr Campbell for the plaintiff. The first is that compensation for harm of the type which Mr Bashford suffered should be regarded as a solatium rather than as a measure of actual loss. As Windeyer J said in Uren v John Fairfax & Sons Pty Limited (1966) 117 CLR 118 at 150:

[30]

"When it is said that in an action for defamation damages are given for an injury to the plaintiff's reputation, what is meant? A man's reputation, his good name, the estimation in which he is held in the opinion of others, is not a possession of his as a chattel is. Damage to it cannot be measured as harm to a tangible thing is measured. Apart from special damages strictly so called and damages for a loss of clients or customers, money and reputation are not commensurables. It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money. The variety of the matters which, it has been held, may be considered in assessing damages for defamation must in many cases mean that the amount of a verdict is the product of a mixture of inextricable considerations. One of these is the conduct of and the intentions of the defendant, in particular whether he was actuated by express malice." 42 The second point that I must take into account is the effect which the article had on the person defamed. If the person is particularly sensitive, this is a matter which has to be taken into account, for the damages include compensation for injured feelings. Thus, in Humphries v TWT Ltd (1993) 114 ACTR 1 at 17, Miles CJ took into account the fact that, "he [the plaintiff] is a person of sensitivity, with a particular consciousness of his own sense of morality, so that he was likely to be particularly hurt if he thought that his own propriety was questioned or under attack." 43 I take into account the very considerable hurt that Mr Bashford suffered. Nevertheless, Mr Bashford had, I believe, misinterpreted both the article and Merkel J's judgment. Merkel J did not say that RA Bashford and R.A. Bashford Consulting Pty Ltd had no involvement in the publication for which damages were awarded. On the contrary, Merkel J held that R.A. Bashford Consulting Pty Ltd was liable to pay damages for the publication. Merkel J found that R.A. Bashford Consulting Pty Ltd was liable as a principal for the publication. I therefore discount Mr Bashford's hurt to some extent, for it was based on Mr Bashford's view that neither he nor his company had any involvement in the publication. 44 Taking account of all the circumstances, I consider that $25,000 would be an appropriate sum to award by way of damages. 45 I do not consider that the facts justify an award of aggravated damages. On this issue and on the issue of malice, Mr Campbell relied upon the fact that the defendant did not publish an apology for the article, although the defendant was requested to do so. On 18 July 1997, Mr Bashford's solicitors requested the publication of the following retraction:

[31]

"On 28 May 1997, the Information Australia Newsletters published an article in its 'Occupational Health & Safety Bulletin' which referred to Mr R A Bashford personally. Mr Bashford at no stage was a party to the litigation referred to. Information Australia Newsletters unequivocally recognises that the statements made referring to Mr R A Bashford were false and without foundation. Information Australia Newsletters omitted to state that R A Bashford Consulting Pty Ltd also received a 75% indemnity with respect to its damages and costs of the case from the other respondent, Mr Bernard Bialkowie. Information Australia Newsletters apologies to Mr Bashford for any hurt and embarrassment that the publication of the statements may have caused to him." 46 The defendant at first sought to obtain a release of all claims prior to publishing the correction. Belatedly, the defendant indicated that it would be prepared to do so but, by that stage, Mr Bashford had apparently lost interest in it. 47 One of the difficulties with an apology is that it would have been difficult in a short statement to make the point which Mr Bashford wished to be made, namely, that he had no involvement in the publication. A retraction which simply set out the matters contained in the first, second and last sentences of the apology drafted by Mr Bashford's solicitors may have been appropriate, but even it would have tended to mislead readers, for Mr Bashford's company, R.A. Bashford Consulting Pty Ltd, had been a party to the litigation. The other two sentences in the suggested apology would have confused readers. 48 In my opinion, an apology that was not misleading to readers and which would have satisfied Mr Bashford would have been very difficult to draw. I do not infer from the defendant's failure to publish a retraction an inference that there was ill-will on the defendant's part or any wish to harm Mr Bashford. 49 Mr Campbell also pointed in the same vein to the defence of the substantial truth of the imputations. Again, I am of the view that the taking of this defence provides no support for a contention that there was malice on the defendant's part or that the case is one in which aggravated damages should be awarded. The defendant did not attempt to say that the conduct of either Mr Bashford or B.A. Bashford Consulting Pty Ltd was discreditable. The defendant gladly relied upon the argument that, if readers of the offending article who knew Mr Bashford would draw little distinction between him and his company, the article was true as a matter of substance. A contention of this type does not give rise to an inference of improper motive or malice or to a ground for aggravated damages. 50 As the defence of qualified privilege has succeeded, Mr Bashford's claim must be dismissed with costs. The exhibits may be returned. ***********

At a glance

Court

Decision date

Before

Source

Judgment (32 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (12)

Cited By (3)