Brett HOLMES v Andrew FRASER

Defamation Act 2005 LEGISLATION CITED : Defamataion Act 1974 Uniform Civil Procedure Rules

Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 John Fairfax Publications Pty Limited v O'Shane [2005] NSWCA 164 Brett May v TCN Channel Nine Pty Ltd [2007] NSWSC 760 Lloyd v David Syme & Co Limited (1985) 3 NSWLR 728 Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 CASES CITED : Adam v Ward [1917] AC 309 Toogood v Spyring (1834) 1 Cr.M and R 181; 149 E.R. 1044 Huntley v Ward (1859) 6 C.B. (N.S.) 514 at 517 Braddock v Bevins [1948] 1 KB 580 Roberts v Bass [2002] HCA 57; 212 CLR 1 Horrocks v Lowe [1975] AC 135 Jones v Dunkel [1959] HCA 8; 101 CLR 298

TEXTS CITED : Gatley on Libel and Slander, 10th edition, (2004) Sweet and Maxwell

PARTIES : Brett HOLMES (plaintiff) Andrew FRASER (defendant)

COUNSEL : Mr RK Weaver (plaintiff) Ms ST Chrysanthou (defendant)

SOLICITORS : Maurice Blackburn (plaintiff) Ferrier & Associates (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

1 SIMPSON J: By statement of claim filed on 2 April 2007 (subsequently amended), the plaintiff, Brett Holmes, claims damages in defamation against the defendant, Andrew Fraser. The claim is governed by the Defamation Act 2005 ("the 2005 Act"). The 2005 Act came into force on 1 January 2006, replacing the Defamation Act 1974 ("the 1974 Act").

2 Mr Holmes was and is the General Secretary of the NSW Nurses' Association ("the Association"). Mr Fraser was and is a member of the Parliament of NSW, representing a country electorate centred around the North Coast city of Coffs Harbour in NSW. He holds the seat as a member of the National Party which was and is in opposition, in coalition with the Liberal Party. 3 Elections for the NSW Parliament took place on 24 March 2007. In the weeks preceding that date a campaign was under way. Running concurrently with that campaign was a debate over a highly contentious political issue concerning federal government policies. The federal government, then a Coalition government, had passed, or proposed to pass, legislation radically altering the management and regulation of industrial relations issues throughout Australia. The governing Council of the Association perceived (rightly or wrongly) that the interests of its members stood to be adversely affected if the Coalition were elected to office in the NSW election; it feared that a state Coalition government would hand over to the federal industrial relations regime NSW nurses employed in the public health system. 4 Accordingly, the Association struck a levy and embarked upon an extensive and expensive publicity campaign, the purpose and effect of which was to urge support for the re-election of the existing state Labor government. 5 The proceedings arose out of a letter directed by Mr Fraser to 629 residents in the electorate of Coffs Harbour who identified their occupation as that of nursing. The letter was dated 15 March 2007 - 9 days before the election. 6 The letter was designed to generate support for Mr Fraser's re-election to the state Parliament, by countering the expressed fears of the Association and assuring its recipients that, if elected, a state Coalition government would not use the federal legislation to the detriment of members of the nursing profession. Much of Mr Fraser's letter is directed to that issue, and is not the subject of complaint. However, the letter contains the following paragraph (although the paragraphs are unnumbered, it will be convenient to refer to this paragraph as paragraph 3): "As to the real reason why the Association is running this campaign, I am led to believe that your General Secretary, Brett Holmes is seeking pre-selection in the safe Labor seat of Fowler at the next federal election and that this is his contribution to the Labor Party. I find it appalling that he is using his position and your subs to promote his political career. $1m on this campaign is $1m less the Association has to genuinely help nurses". 7 Attached to the letter was a copy of a two-page media release attributed to "Jillian Skinner MP, Shadow Minister for (inter alia) Health". The media release amounted to an attack upon policies and practices of the Labor Government in relation to the nursing profession. 8 By the time the proceedings came on for hearing, it was common ground that factual substratum of paragraph 3 of the letter was false. Mr Holmes had not sought pre-selection for any federal parliamentary seat and had made no arrangements to make a "contribution" to the Labor Party by the use of the funds raised from the campaign of the Association. 9 Mr Holmes claims that in its natural and ordinary meaning paragraph 3 of the letter conveys two imputations, formulated as follows: (a) The plaintiff (as General Secretary of the NSW Nurses' Association), improperly took advantage of his position by directing that $1 million of the Association's members' subscriptions be spent on a campaign so as to promote his political career; (b) The plaintiff (as General Secretary of the NSW Nurses' Association), was more interested in seeking pre-selection for a safe Labor seat than genuinely helping nurses"

and that each is defamatory of him. 10 By his defence, Mr Fraser admits that he caused the letter to be published, but denies that it was of and concerning Mr Holmes (which is plainly untenable and was not pursued); he denies that the content is defamatory of Mr Holmes or capable of being so; he denies that it conveys either of the specific imputations pleaded (or any other defamatory imputations) or that it is capable of so doing. 11 He raises a number of positive defences. These are: · fair comment at common law; · honest opinion (the 2005 Act, s 31); · qualified privilege at common law (both in its traditional sense and as extended by the decision in Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520); · statutory qualified privilege (the 2005 Act, s 30); · triviality (the 2005 Act, s 33). 12 At the hearing, Mr Fraser abandoned reliance on the defence of qualified privilege pursuant to s 30 of the 2005 Act, but maintained all other pleaded defences. In reply to the pleading of qualified privilege at common law, Mr Holmes denies that the letter was published by Mr Fraser to recipients with an interest, or apparent interest, in receiving the information therein contained, and denies that Mr Fraser's conduct in publishing it was reasonable in the circumstances; additionally or alternatively, he pleads that Mr Fraser was actuated by express malice, which he particularises, and to which I will return. He otherwise joins issue with the matters pleaded on behalf of Mr Fraser. 13 Although, pursuant to s 21(1) of the 2005 Act, Mr Holmes initially elected for the proceedings to be tried by jury, the parties subsequently agreed to dispense with the jury, and the Court ordered accordingly. The matter proceeded as a trial by judge alone on all issues. 14 Mr Holmes gave evidence. He spoke of how the letter was drawn to his attention by his executive assistant, who read it to him (he was driving at the time). He said that, on having the letter read to him, he went through a range of emotions - he was "shocked", "appalled". The letter had a "profound impact" upon him. He said that he returned to his office, immediately sought legal advice, and, with the help of his executive assistant, drafted a response. The response dealt with issues concerning the federal industrial laws, and the conflicting views held by the Association and those expressed by Mr Fraser, and put the case for the election of a Labor government, as a means of protecting the interests of members of the nursing profession. 15 At the conclusion of the letter Mr Holmes quoted paragraph 3 of Mr Fraser's letter, and described it as "a lie". He denied ever seeking, or being approached to seek, pre-selection for a seat in parliament; he said that he intended to seek re-election to the position of General Secretary in an Association election that was then forthcoming. He denied that any benefit would accrue to him personally out of the Association's campaign, and said that the money for the Association's campaign came from a fund specifically created for the purpose of protecting the rights of nurses against government or political attack. He had the letter sent by mail and by email to Association members whose addresses were in the Coffs Harbour electorate. 16 Mr Holmes also gave evidence about how the Association's campaign came about. He said that the Association feared that the employment security of its members in the public health system would be at risk if the Coalition were elected to government. He described the governing body (the Council) of the Association and the manner in which it is elected. 17 Mr Fraser did not give evidence. On his behalf Ms Diane Leahy, his electorate officer, gave evidence. Ms Leahy described the process by which Mr Fraser's letter had been composed and sent. In some sort of resource-sharing arrangements, another National Party member of Parliament (for the Murrumbidgee), Mr Piccoli, sent, by email, a draft of the letter, with an invitation to Mr Fraser to use it in his electorate. After discussing the draft with Mr Fraser, and on his instruction, Ms Leahy adopted the draft, put it on Mr Fraser's letterhead, affixed Mr Fraser's electronic signature, and sent the letter individually to those voters identified on the electoral roll as having the occupation of nurse. (Some slip occurred in the transcription, causing the omission of a part of a paragraph, but that is of no present moment.) 18 It is of some interest that Mr Piccoli also sent the letter to individuals in his electorate, but that, when he did so, he omitted paragraph 3. Just why he did so did not emerge in the evidence. One available inference is that he did so after making inquiries and discovering the falsity of the assertion about Mr Holmes' political plans and ambitions. 19 It is notorious that in the state election of March 24 2007, the Labor government was re-elected. 20 On 26 June 2007 (that is, after the commencement of these proceedings) Mr Fraser sent another letter to the same mailing list as the letter the subject of these proceedings. The letter was in the following terms: "In March this year you were sent a letter regarding nurses funding a campaign to have the Labor party re-elected to government in NSW. In that letter reference was made to Mr Brett Holmes, the General Secretary of the NSW Nurses' Association. Comments were made regarding the use by Mr Holmes of the Association's funds to promote his political career. It has recently come to our attention that the statements made about Mr Holmes seeking pre-selection in the seat of Fowler are now incorrect by reason of the fact that Mr Holmes' name has not appeared on the list of Labor pre-selected candidates for the seat of Fowler. I unreservedly apologise for any hurt caused to Mr Holmes by reason of those statements or any harm caused to his reputation" (emphasis added)

The letter appeared on the letterhead and over the signature of Mr Fraser. 21 Defamatory Meaning

The first questions for determination concern the meaning to be attributed to the letter (as a whole) and particularly to paragraph 3. The questions are whether the letter is capable of conveying, and if so, whether it does in fact convey, either or both of the imputations pleaded; and, if so, whether that imputation is or those imputations are defamatory of Mr Holmes.

22 As foreshadowed in the defence, issue was taken both as to the capacity of the letter to convey either imputation pleaded on behalf of Mr Holmes and, if held to be so capable, whether it did in fact convey either imputation; and whether either imputation, if conveyed, was capable of defaming, and, if so, did in fact defame, Mr Holmes. 23 The approach to determining whether a publication is capable of conveying the imputations pleaded was comprehensively stated by Hunt CJ at CL, (with whom Mason P and Handley JA agreed) in Amalgamated Television Services Pty Ltd v Marsden (1998) 43 NSWLR 158 at 165-167. Marsden was decided in a context in which a judge decided issues of capacity to convey or to defame but a jury decided whether a publication in fact conveyed the imputation or imputations, and whether the publication of the imputation or imputations in fact defamed the plaintiff. Although the distinction is not so stark in circumstances where all issues are decided by a judge it is, nevertheless, a real and relevant distinction. The principles stated in Marsden adapt readily to determination of whether the publication does, in fact, convey the imputation. 24 The enquiry is whether an ordinary reasonable reader (or listener or viewer) would derive from the words of which complaint is made any imputation or imputations pleaded. In answering this enquiry any strained or unreasonable interpretation is to be rejected. 25 The Court is entitled, and required, to take into account the mode or manner of publication: some forms of publication, by their nature, call for more assiduous attention than others (eg a book, as distinct from a newspaper; a written publication as distinct from a radio or television broadcast). The ordinary reasonable reader may engage in some loose thinking. 26 An imputation is not to be held to have been conveyed if it involves drawing an inference upon an inference: that is, if it depends upon a conclusion that the ordinary reasonable reader would draw an inference (something not explicitly stated in the words published but implied) from the words published and build upon that inference to draw a second inference. 27 It is to be assumed that the reader reads the whole of the publication. (In this case, that assumption extends to the media release that accompanied Mr Fraser's letter). 28 It is unnecessary to consider separately the questions of capacity to convey the imputations, and whether either was in fact conveyed. I can move directly to the second aspect. Applying the principles I have stated, I am satisfied that the letter is capable of and does in fact convey both pleaded imputations.

29 Paragraph 3 contains the following express or clearly implied assertions of fact:- · Mr Holmes was seeking Labor Party pre-selection for a safe Labor seat in federal parliament (it is not to the point that the relevant passage opened with Mr Fraser's assertion that he had been "led to believe" that. On a proper reading of the whole of the paragraph, it is clear that the factual underpinning of paragraph 3 was that Mr Holmes was indeed seeking pre-selection. What followed that opening assertion was predicated upon the assumption of its truth) ; · Mr Holmes was making a "contribution" to the Labor Party by "running this [the Association's] campaign" ; · Mr Holmes used his position, and the subscriptions of members of the Association, to promote his own political career; · in doing so, he depleted the resources of the Association that were available "to genuinely help nurses"; · Mr Fraser was "appalled" by the conduct he attributed to Mr Holmes. 30 The clear inferences are that Mr Holmes improperly took advantage of his position as General Secretary of the Association, in order to promote his own political career by directing that Association funds be used for that purpose, and that he was more interested, as General Secretary of the Association, in seeking pre-selection for a safe Labor seat than in genuinely helping nurses.

As to Imputation (a): 31 In written submissions arguing to the contrary of the conclusions I have reached, counsel for Mr Fraser referred in detail to aspects of the letter not extracted above - for example, the opening one-sentence paragraph. The letter began with: "Further to my recent letter, I am writing to express my disappointment that nurses are funding a campaign to have Labor re-elected in NSW". 32 In other passages Mr Fraser specifically denied that a Coalition government (if elected) would use the federal industrial relations legislation to surrender NSW nurses to the regulation of the federal industrial relations system. 33 None of this does anything to ameliorate the assertions contained in paragraph 3. Paragraph 3 reads, in part, as a digression or diversion from the main theme of the letter sent. That main theme concerns the policies of the Coalition opposition and is unexceptional. The letter, after its initial expression of surprise and disappointment that nurses were funding the campaign for Labor re-election, went on to paragraph 3; and thereafter returned to its main theme of re-assuring its recipients that a Coalition government, if elected, would not use the federal legislation to act to their detriment. 34 The strongest (but insufficiently strong) point made on behalf of Mr Fraser was that, in the letter, Mr Fraser never explicitly stated that Mr Holmes had directed the use of Association funds for the promotion of his own political career, and that, in fact, the evidence established that decisions of that kind, including that specific decision, were taken by the elected governing Council. That may be, and is, in fact, the reality - but it is not relevant to what might be read into the letter by its recipients (it is relevant to bear in mind that the letter was addressed only and specifically to residents of the electorate who identified nursing as their occupation; but it is not the case that all of those individuals were members of the Association, and it was not shown to be the case that even those recipients who were members of the Association were familiar with its processes of financial management). 35 Counsel further argued that, even if the letter could be read as suggesting that it was Mr Holmes who directed the use of the money, the letter did not (expressly) allege impropriety in doing so. 36 Neither of these arguments can be accepted. The first was put to Mr Holmes in cross-examination. He gave, as could have been expected, evidence that there may well have been a perception that, as leader of the Association, decisions about the allocation of funding were committed to him. The accusation in the letter is all but explicit: "… he is using his position and your subs to promote his political career " (emphasis added) 37 The implication is crystal clear: that it was Mr Holmes who caused the expenditure to be made, or at whose instigation it was made. There is no hint of recognition in the letter that decisions of the kind were made in the Association by an elected Council. As to the second point, it is true that neither the word "improper", nor any of its derivatives was used: but the entire tenor of the paragraph is to convey the notion of impropriety. 38 I am satisfied that Imputation (a) was conveyed.

As to Imputation (b) 39 Imputation (b) was characterised on behalf of Mr Fraser as "fanciful" and not to be found anywhere in the letter. It was, in written submissions, argued: "55…The fact that [Mr Holmes] is using his position to promote his political career does not mean that he is more interested in that issue than genuinely helping nurses." 40 I disagree. The argument overlooks Mr Fraser's characterisation of Mr Holmes' alleged conduct as "appalling", and his alleged conduct as diverting money that ought to be used to "help nurses". Taken together with the passage extracted above, this amply conveys the imputation that Mr Holmes in his capacity as General Secretary of the Association was more interested in promoting his own political career than in discharging the responsibilities of his office, and put his own interests above those of the members of the Association. I am satisfied that Imputation (b) was conveyed.

41 It was next argued that neither imputation is defamatory. The argument in support was (as it had to be) somewhat convoluted. It was, in essence, that the assertion of impropriety in imputation (a) was not supported by the remainder of the imputation, because the conduct there attributed to Mr Holmes was not improper. In other words, as I understand the argument, if the word "improperly" were deleted from the imputation, what remains would not be defamatory. This is because, so the argument ran, it is not uncommon, and indeed was a regular occurrence, for trade unions to be the launching pad for political careers. Perhaps so; but here, the allegation (as encapsulated in the imputation) goes further. It was that Mr Holmes, in his capacity as General Secretary of the Association, took advantage of that position in the manner outlined and that he did so improperly. Impropriety is an essential element of the imputation as framed, and which I have found was conveyed. And, even if the word "improperly" were to be deleted from the imputation, what remains would still convey the notion of misuse or abuse by Mr Holmes of his position for his own personal benefit, and thus be defamatory. This argument would have been better directed to the question of whether the publication conveyed Imputation (a), rather than whether that imputation was defamatory. I have already ruled on that question, and the argument now put does not change my view. 42 There was further argument in the same vein. It was put that: "64. It is not defamatory to allege that a person used his position to better or change his position unless some sort of abuse of position is asserted. That he directed 'that $1m of the Association members' subscriptions be spent on a campaign so as to promote his political career' is not improper if the spending of the money was also in the interest of the members of the union. A potentially improper motive does not mean that the conduct itself was improper." (Italics in original)

There is no suggestion, either in the imputation or in the letter, that the expenditure on the campaign was "also in the interest of the members of the Union …" Both, in fact, convey the opposite; the words of the imputation "so as to promote his political career" leave no room for an inference that the benefit to Mr Holmes was a side-effect of a decision that was properly made in the interests of the members of the Association; the letter is equally clear on that score. Further the word "improperly" as used in the imputation qualifies the advantage Mr Holmes is accused of taking of his position; it does not qualify the purpose to which the money is said to have been put. 43 It was also argued that Imputation (b) is not defamatory. The contention was: "66. … it is not defamatory to allege that the plaintiff found other things more important than his work."

This argument also ignores those words in the imputation which specifically relate Mr Holmes' alleged conduct in his position as General Secretary of the Association. Indeed, it was specifically argued that: "67 … That allegation would only be defamatory if there was some suggestion that by reason of that fact the plaintiff was negligent or otherwise incompetent in carrying out his work. That is not the case here." 44 The last sentence is simply wrong. That is precisely the case here. The clear implication is that in putting his interests ahead of those of members of the Association, Mr Holmes was derelict in his duty to those members. The accusation made of Mr Holmes was that, in his capacity as General Secretary he put his own interests above those of the members of the Association. That is plainly defamatory.

45 In my opinion, each imputation was clearly defamatory of Mr Holmes.

DEFENCES 46 In these circumstances, it is necessary to turn to the defences pleaded and argued. I have outlined these above. 47 I will deal with them, not in the order in which they were pleaded or argued. 48 (i) Comment

On behalf of Mr Fraser, reliance was placed both upon the defence of fair comment at common law, and its statutory incarnation under the 2005 Act, now called the defence of honest opinion.

The elements of the defence of fair comment at common law were stated by Giles JA in John Fairfax Publications Pty Limited v O'Shane [2005] NSWCA 164 [at 16] as follows:- "16. At common law the defendant has a defence of fair comment if the words complained of are comment, as distinct from a statement of fact, there is a basis for the comment contained or referred to in the published matter, and the opinion is expressed on a matter of public interest …. There must be the basis for the comment in or referred to in the published matter, but it can be extreme and strongly expressed. Once the basis for the comment has been identified, the question is whether a fair minded person, even if holding a strong, obstinate or prejudiced view, could have made it." 49 Later in the judgment, his Honour cited from Gatley on Libel and Slander, 10th edition, at 12.6, an expanded meaning given to the word "comment" as: "25 … something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, remark, observation, etc." 50 The three elements of the defence are: · that the words contained in the matter complained of are comment (or the expression of opinion, deduction, conclusion etc.) as distinct from a statement of fact; · that the comment is made, or the opinion is expressed, on a matter of public interest; and · that there is a basis for the comment contained or identified in the published matter;

The basis for the comment must not only be stated or identified and ascertainable, it must also be true; that is, the comment must be based upon "facts truly stated": see O'Shane , paras 50-51

51 This defence has essentially been reproduced in the 2005 Act, s 31(1) of which provides as follows: "31. Defence of honest opinion (1) It is a defence to the publication of defamatory matter if the defendant proves that: (a) the matter was an expression of opinion of the defendant, rather than a statement of fact, and (b) the opinion related to a matter of public interest, and (c) the opinion is based on proper material." Subs 31(5) and (6) provide: "31. (5) For the purposes of this section, an opinion is based on proper material if it is based on material that:

(a) is substantially true, or (b) was published on an occasion of absolute or qualified privilege (whether under this Act or at general law), or (c) was published on an occasion that attracted the protection of a defence under this section or section 28 or 29.

(6) An opinion does not cease to be based on proper material only because some of the material on which it is based is not proper material if the opinion might reasonably be based on such of the material as is proper material."

(Sections 28 and 29 provide defences in respect of the publication of public documents and in respect of the publication of fair report of proceedings "of public concern", which are extensively defined, and include, for example, reports of proceedings in parliamentary bodies, courts and many others. Those sections are of no further present relevance.) 52 In one respect the statutory defence goes further than the common law defence. At common law, as has been noted above, a comment is protected if it is based upon accurately stated or identified facts. That is also the case for the statutory defence. But the common law did not, as does s 31, also protect a comment made on an occasion of qualified privilege. S 31(5)(b) expands the defence by affording protection also to a comment made on such an occasion. 53 In another important respect, the statutory defence appears to depart from the common law defence. It is an essential aspect of the latter that the "proper material" upon which the comment is based be stated or identified in what is published. No such requirement is explicitly contained in s 31. Whether it is to be read into the section is not, at present, necessary to decide. 54 Other than in these respects, the elements of the statutory defence are essentially the same as those of the common law defence. Subject to the qualifications I have mentioned, subs (5)(a) amounts to statutory enactment of the common law rule that the comment must be based on "facts truly stated", - ie that the facts upon which the comment is based must be correct. 55 By s 31 (4)(a) a defence of honest opinion, otherwise established under subs (1), is defeated if, and only if, the opinion expressed was not honestly held by the defendant at the time of publication. The onus of proving the absence of honest opinion is cast upon the plaintiff. The common law defence is likewise defeated by proof that the comment did not represent the genuinely held opinion of the defendant: see Brett May v TCN Channel Nine Pty Ltd [2007] NSWSC 760 at par 32, per Nicholas J. 56 It seems to me that each version of the defence presents a real difficulty in application.

One question that arises concerning the correct approach to the statutory defence, is this: in determining whether a defamatory publication is an expression of opinion or a statement of fact, is the enquiry directed to the matter complained of (that is, the publication as a whole) or to the imputation(s) held to have been conveyed? 57 On one view, the 2005 Act explicitly restores the common law position which existed prior to, but was interrupted for 31 years by, the 1974 Act. It will be observed that Giles JA stated the common law position as "requiring [in order for the defence to be established] that the defendant prove that the words complained of are comment, as distinct from a statement of fact"; s 31(1)(a) requires proof that "… the matter was an expression of opinion …. rather than a statement of fact." "Matter" is defined in s 4 as including, inter alia, "a letter, note or other writing …" That is, in each case, the focus is upon the published material, as distinct from the imputations pleaded. 58 That was not the position that prevailed during the period when the law of defamation for NSW was governed by the 1974 Act. The 1974 Act placed great store on the specification of defamatory imputations, which constituted the cause of action; each separate defamatory imputation created a separate cause of action. Under that regime it was imputations that had to be shown to be comment (or expression of opinion) as distinct from statement of fact: Lloyd v David Syme & Co Limited (1985) 3 NSWLR 728. But a single publication may be made up of a combination of statements of fact and expressions of opinion. Under the 1974 Act the enquiry as to whether what was complained of was a statement of fact or expression of opinion was directed to any defamatory imputation(s) found to have been conveyed. Under the 2005 Act the heavy reliance placed upon imputations as the foundation for a claim in defamation has been abandoned. The cause of action is no longer constituted by the imputation pleaded, and s 8 provides that the publication of defamatory matter gives rise to a single cause of action, even if more than one defamatory imputation is carried. This would suggest that to answer the first question posed by s 31(1) (and the first question posed in respect of the common law defence) it is necessary to look, not to the defamatory imputations found to have been conveyed, but to the publication as a whole. Moreover, the reference in s 31(1)(a) to "matter" is to be contrasted with, for example, the terms of s 25, providing a defence of truth (justification) where the defamatory imputations carried by the "matter" are shown to be substantially true. However, there remain significant remnants of the concept of imputations. S 8 of the 2005 Act, to which I have already referred, is predicated upon the notion that a defamatory publication is defamatory because it carries imputations that are defamatory. The fact that an imputation is no longer the cause of action does not affect that. And the Uniform Civil Procedure Rules continue to require that a plaintiff specify, in the statement of claim, each imputation upon which reliance is placed (UCPR 14.30(2)(b)). This rule is of long standing and was, no doubt, formulated for the purposes of the 1974 Act, but the rule makers have not seen fit to vary the requirement, although they are clearly cognisant of the charges made by the 2005 Act: see, for example, specific rules contained in Part 15, Division 4. No doubt, in some cases, it will be necessary to determine whether the predominant theme of the publication complained of is statement of fact or expression of opinion (in the extended sense that incorporates conclusions, deductions and the like) . 59 "Matter" may, and very often will, consist of an amalgam of statements of fact and expressions of opinion. Indeed, as I have previously mentioned, the common law defence depends upon the statement or identification of facts that can be shown to be "truly stated". (Curiously, as I have mentioned, that requirement does not appear to have been imported into the statutory defence.) On a literal construction of s 31, there is little, if any, room for concluding that "matter", as it is used in s 31(1), ought to be construed as meaning the imputation or imputations found to have been conveyed, (as distinct from the publication as a whole) although such a construction would present the most workable result . This may, in some cases, pose real problems. For the purpose of applying subss (5) and (6) it is necessary to identify the "opinion". That is something that is ordinarily (or was, under the 1974 Act) encapsulated in the imputation.

60 The letter written by Mr Fraser consists, virtually in its entirety, of assertions of (purported) fact - even where those assertions are incorrect. As well as the assertions of fact contained in paragraph 3, set out above, Mr Fraser made various further assertions: · that, over 12 years, he had fielded hundreds of calls from angry and frustrated nurses about the state of NSW hospitals, and the conditions under which nurses have to work; · that he was, in those circumstances, disappointed and surprised that nurses were funding a campaign to support the re-election of the Labor Government; · that a state Coalition government, if elected, would not surrender nurses to the federal system of industrial relations regulation; · that nurses had been leaving the profession in large numbers because of working conditions; · that the public had little confidence in the health system of NSW; · that the state Labor government had savagely cut access to "common law workers' compensation rights"; · that the Labor premier had voted in favour of those "savage cuts"; · that a state Coalition government, if elected, would improve the health system and working conditions of nurses.

These are all clear statements of fact, whether true or false. 61 The letter also contains some reference to Mr Fraser's personal feelings: · that he was disappointed that nurses were funding the campaign; · that he was disappointed and surprised (for reasons given); · that he believed that Mr Holmes was seeking pre-selection in a safe federal seat and that this was the real reason that the Association was conducting the campaign; · that he found it "appalling" that Mr Holmes was using his position (as General Secretary of the Association) and "subs" paid by nurses to promote his own political career. 62 While these are statements about Mr Fraser's personal feelings, they are nonetheless statements of fact. Contained within the assertion in paragraph 3 (that Mr Fraser found it "appalling") was the further statement that Mr Holmes was (in fact) using his position and funds of the Association to advance his own political career. 63 There is no semblance of expression of opinion other than those statements of personal feeling. The nearest Mr Fraser came to expressing an opinion was his characterisation of the conduct he attributed to Mr Holmes as "appalling". Certainly there Mr Fraser was expressing his opinion - but it was his opinion about asserted facts. It is subordinate to the real content of that sentence, which was an assertion that Mr Holmes had behaved in the manner described. Notwithstanding that, I am prepared to treat the statement that Mr Fraser found Mr Holmes' conduct to be appalling as an expression of opinion about Mr Holmes' conduct. That cannot, however, convert a publication that is essentially a publication of statements of (purported) fact into the expression of opinion. The defences of fair comment at common law, and honest opinion under s 31(1) of the 2005 Act, fail to meet the first requirement. In case, however, an appellate court should come to a different view, I should make the necessary findings in relation to the remaining elements of the defences. 64 For the purpose of what follows, I will assume that the "opinion" in question is Mr Fraser's opinion that the conduct of Mr Holmes was "appalling". 65 While the content of his letter related, clearly, in my opinion, to a matter of public interest, the defence also fails on the third element. To qualify for the defence, the publication must be based on "proper material" or on "facts truly stated". Relevantly, for present purposes, that requires that it be substantially true or (for the purposes of the statutory defence only), be published on an occasion of qualified privilege. It is common ground that the underlying assertion of fact contained in paragraph 3 was untrue. That cannot be "proper material" (within ss (5)(a)) and obviously cannot amount to "facts truly stated".

66 Counsel for Mr Fraser sought to identify certain facts stated in the letter that were true and, thus, went to establish, in accordance with s 31(6), that, to the extent that what asserted to be opinion was based upon those (true) facts, that it might reasonably have been based upon those facts. The facts said to be true were:

(a) nurses were funding a campaign for the re-election of the Labor government;

(c) that Mr Fraser had "been led to believe" that the Association was conducting the campaign because Mr Holmes was seeking pre-selection in a safe Labor seat in the federal parliament (that is, the fact that Mr Fraser had been led to believe this, as distinct from the asserted but untrue "fact" that Mr Holmes was in fact seeking such pre-selection); and

(There was no evidence, or even suggestion, that nurses were campaigning against Mr Fraser, except in the sense that he was a member of the Coalition seeking government against which the Association was campaigning. Nor was there any evidence, independent of the content of the letter itself (which could not amount to such evidence) that Mr Fraser had been "led to believe" the asserted facts. Otherwise, the statements were substantially true.) 67 While the "fact" said to have been asserted in (c) was that Mr Fraser had "been led to believe" certain things, the real fact asserted concerned Mr Holmes' alleged political activities and ambition.

68 As I have made clear, it was recognised that that asserted fact was untrue. That could not, therefore, qualify as "proper material". When that is excised from the "facts", those that remain are not such as to permit a conclusion that an opinion that Mr Holmes' conduct was "appalling" could have been reasonably based thereon. Even if the "fact" that Mr Fraser had been led to believe that Mr Holmes was conducting himself as asserted, that, in combination with the other facts, could not reasonably permit any opinion that Mr Holmes' conduct was "appalling". 69 No opinion concerning Mr Holmes and defamatory of him might reasonably have been based upon any combination of the three remaining facts said to have been true, and certainly not an opinion that his conduct was "appalling". For a comment defamatory of Mr Holmes to be successfully defended on this basis it would be necessary also that Mr Fraser establish the truth of the fundamental allegation that Mr Holmes was improperly using Association funds to further his political candidacy. That is one fact he is, and acknowledges he is, quite unable to prove. 70 The defence of fair comment at common law fails, as does the statutory defence that involves s 31(5)(a), on the third test, as well as the first. There remains the statutory defence so far as it relies upon publication on an occasion of qualified privilege. 71 This debate was largely superfluous. It was argued that the letter was published on an occasion of qualified privilege at common law, thereby earning the protection given by sub-paragraph 5(b). Whether the defence of qualified privilege at common law is available to Mr Fraser is the next question for determination. (As will be seen, I find below that the letter was indeed published on an occasion of qualified privilege.) 72 Having regard to my conclusion below concerning qualified privilege, I am bound to find that if (contrary to what I have found above) any opinion had been expressed, it was based upon material that was published on an occasion of qualified privilege. But the foundation does not exist. None of the material published was opinion or comment. 73 In any event, I am satisfied, for reasons that appear below in the context of the issue of malice, that Mr Fraser did not honestly hold the opinion.

74 The defence of fair comment/honest opinion fails.

(ii) Triviality 75 I will deal now with defence of triviality, which I can do with brevity. The defence must fail. S 33 of the 2005 Act provides: "33 Defence of Triviality It is a defence to the publication of defamatory matter if the defendant proves that the circumstances of publication were such that the plaintiff was unlikely to sustain any harm." 76 Put in support of the defence were the following propositions: "134 (a) The matter complained of was only published to a limited number of persons; and (b) The persons to whom it was published were nurses, most of whom were members (550 out of 629) of the Association of which the plaintiff was the General Secretary; (c) The plaintiff immediately sent a letter refuting the allegations in the matter complained of to 550 of the persons; (d) After the publication of the matter complained of the plaintiff was re-elected as General Secretary of the Nurses' Association (although this factor carries little weight on this issue); (e) The defendant published an apology retracting the incorrect information to all of the persons to whom the matter complained of was sent." 77 The third, fourth and fifth of these must be rejected. S 33 requires focus upon the circumstances of the publication and not events and circumstances that postdate publication. It requires an evaluation of the likelihood, at the time of publication, that the plaintiff will sustain harm. It does not permit enquiry as to whether or not the plaintiff, in fact, suffers harm. That is an enquiry relevant to damages, should the Court get to that point. Mr Fraser's letter of apology - sent three months later - can have no bearing on the likelihood at the time of the publication of the defamatory matter that Mr Holmes would suffer harm. Even if that were not so, the terms of the letter negate the proposition: fairly read, it suggests, not that Mr Fraser's accusation was untrue at the time it was published, but that later events had altered the position: "… the statements made about Mr Holmes … are now incorrect by reason of the fact that his name has not appeared on the list of Labor pre-selection candidates for the seat of Fowler." (emphasis added) 78 Nor can Mr Fraser take any comfort from the fact that Mr Holmes immediately took his own steps to correct the false statements that had been made about him. Mr Holmes perceived, and correctly perceived, that the circumstances of the publication were such that he was indeed likely to sustain harm. He did not have access to Mr Fraser's mailing list; the mailing list for his letter was not co-extensive with that of Mr Fraser; his letter went to members of the Association resident in the Coffs Harbour district. There were others on Mr Fraser's mailing list who were not members of the Association. 79 That Mr Holmes was subsequently re-elected as General Secretary of the Association likewise (as was recognised) can have no bearing on the likely effects of Mr Fraser's publication at the time it was made. 80 The first and second propositions must also be rejected. It is true (in one sense) that Mr Fraser's letter was circulated to "a limited number of people" - although 629 is, in fact, a substantial number, and not one to be treated as immaterial. More importantly, each recipient was either a member of the Association, or a potential member. An Association election, including election for the position of General Secretary, was imminent, and each of the recipients was eligible, or potentially eligible, to vote. Each individual publication had potential to damage Mr Holmes' prospects of re-election; multiplied by 629, considerable potential damage was caused. 81 I reject the defence based on s 33 of the 2005 Act.

(iii) Qualified Privilege at Common Law 82 On behalf of Mr Fraser, reliance was placed upon the defence of qualified privilege at common law. The defence as pleaded was bifurcated; traditional or conventional or classic qualified privilege was pleaded; as was the extended form of the defence as explained in Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520. 83 However, the latter was pressed only faintly, counsel recognising that the extended form of the defence requires proof of reasonableness of conduct, and that, since Mr Fraser had made no relevant enquiry about the truth of his assertions concerning Mr Holmes, his conduct could not be regarded as reasonable. The Lange defence fails. 84 The conventional defence of qualified privilege at common law is often couched in terms of duty and interest; a duty in the publisher to convey information to the recipient, and a corresponding interest in the recipient in receiving the communication. However, that is to state too narrowly the defence. At common law, a publication is made on an occasion of qualified privilege: "… where the person who makes the 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" (emphasis added):

Adam v Ward [1917] AC 309 at 334. 85 In Toogood v Spyring (1834) 1 Cr.M. and R 181 at 193; 149 E.R. 1044, the principle was stated as follows: "In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well known limit as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned . In such cases, the occasion prevents the inference of malice, which the law draws from unauthorised communications, and affords a qualified defence, depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." (emphasis added) 86 Here, it could not, in my view, fairly be said that Mr Fraser had any duty to communicate the matters raised in the letter to those to whom he addressed it. However, he plainly had a relevant interest in doing so. 87 Where the occasion is used for the purpose for which the privilege is conferred, the communication retains its protection, even where what is asserted turns out to be factually wrong and even where it is factually wrong in a fashion that is highly detrimental to the reputation of the person of whom it is made. The proposition has been put as strongly as this: "In such cases, no matter how harsh, hasty, untrue or libellous the publication would be, but for the circumstances, the law declares it privileged because the amount of public inconvenience from the restriction of freedom of speech or writing would far out-balance that arising from the infliction of a private injury": Gatley on Libel and Slander , 10th edition (2004) Sweet and Maxwell para 14.4, quoting Huntley v Ward (1859) 6 C.B. (N.S.) 514 at 517. 88 Counsel for Mr Holmes did not take issue with any of this. He relied heavily upon a further, also uncontroversial, proposition: that the communication is protected only if it is relevant to the occasion for which the privilege is granted. While conceding that privilege attached to those parts of Mr Fraser's letter that dealt with the political issues of the working conditions of nurses, the state election campaign and the Association's media campaign with respect to the federal industrial relations laws, he contended that it did not extend to what Mr Fraser asserted of Mr Holmes in paragraph 3 of the letter. 89 Counsel had difficulty in articulating why this should be so. The contention cannot be accepted. Relevance to the occasion is not to be determined by the truth or otherwise of the assertion. That would extensively circumvent the defence. There is no doubt in my mind that, had the assertion that Mr Holmes' participation in the Association's campaign was motivated by his own personal political ambition been true, it would have been highly relevant to the occasion on which the letter was published, which otherwise, admittedly, did attract qualified privilege. It does not become irrelevant because it is false. 90 Communications in the context of parliamentary elections have long been recognised as attracting the privilege. In Braddock v Bevins [1948] 1 KB 580 the following appears: "… we should have thought it scarcely open to doubt that statements contained in the election address of one candidate concerning the opposing candidate, provided they are relevant to the matters which the electors will have to consider in deciding which way they will cast their votes, are entitled to the protection of qualified privilege. The electors clearly have an interest in receiving a communication of that kind…" 91 Braddock v Bevins was referred to with apparent approval by Gleeson CJ in Roberts v Bass [2002] HCA 57; 212 CLR 1, although the main focus of his Honour's judgment was an attempt to reconcile that decision with the much later decision of the High Court in Lange. On these authorities, the present case is a classic illustration of qualified privilege at common law at work. The recipients of Mr Fraser's letter were all individuals who had an interest in receiving information from Mr Fraser concerning matters of health policy generally, and the employment conditions of nurses and the validity of claims made on those issues in the context of the election campaign and the competing policies of the main political parties. As I have already indicated, Mr Fraser had a clear interest in making that communication to them. 92 Mr Fraser adopted, uncritically, a draft letter from another member of parliament. He made no attempt to ascertain the accuracy or otherwise of the very damaging and patently false assertions against Mr Holmes. Nevertheless, that is the very kind of communication which, on the authorities, the defence of qualified privilege protects. Notwithstanding its falsity, the letter was published on an occasion of qualified privilege and the defamatory (and false) facts stated in it were relevant to the occasion.

Malice 93 The defence of qualified privilege is defeated, as will already be apparent from some of the extracts quoted above, where the communication is motivated by malice. On behalf of Mr Holmes it was pleaded that Mr Fraser was actuated by express malice. The malice alleged was particularised as follows: (a) the defendant published the matter complained of and the imputations arising therefrom, knowing that the imputations were false or with reckless indifference as to their truth or falsity in that: (i) the defendant gave the plaintiff no or no reasonable opportunity to refute the imputations; ii) the defendant made no or no reasonable enquiries as to the truth of the matter complained of; (b) the unfair, extravagant and sensational manner and the extent of the publication of the whole of the matter complained of. In particular, the unfair, extravagant and sensational manner and extended publication is evidenced by the following words contained in the matter complained of and the tenor and content of the matter complained of as a whole: [there followed a reproduction of the first and third paragraphs of Mr Fraser's letter]; (c) the defendant, in publishing the matter complained of, was actuated by improper purposes, namely, a desire to discredit the plaintiff personally, as evidenced by the matters set out above and the conduct of the defendant generally." 94 What constitutes malice was comprehensively stated by the House of Lords in England in Horrocks v Lowe [1975] AC 135, and summarised in Gatley at para 16.3. Lord Diplock, with whom Lord Wilberforce, Lord Hodson and Lord Kilbrandon agreed, regarded the motive with which a defendant publishes defamatory material as "crucial". From his Lordship's speech, the following propositions emerge. An improper motive in the use of the occasion will destroy the privilege. That improper motive must be the dominant motive. It is insufficient to show that the defendant knows that the statement will or might injure the plaintiff, provided the occasion is, nevertheless, used for its proper purpose. One focus is, therefore, squarely upon the motive of Mr Fraser in publishing the false and defamatory material. He gave no evidence of this. But it may reasonably be inferred that his motive lay in the heat of an election campaign and that his purpose in publishing the letter was to draw to the attention of its recipients what he perceived as the merits of the Coalition against what he perceived as the demerits of the Government. I do not infer that he had any specific intent to injure Mr Holmes; Mr Holmes was an innocent bystander who got in the way of missiles being directed against the Government and its individual members. 95 Absence of genuine belief in the truth of what was published is generally conclusive evidence of express malice, but is not lightly proved. A (rather fine) distinction is drawn between failure to consider the truth or otherwise of what is published (which is equated with knowledge of falsity), and carelessness, impulsiveness or irrationality in arriving at a genuine belief (which is not). Recklessness is equated with knowledge of untruth.

96 By contrast, positive belief in the truth of what is published will usually protect a defendant, in the absence of proof that the occasion has been misused. 97 Application of these principles requires careful attention to the evidence concerning Mr Fraser, his motive in publishing, and his knowledge of the relevant facts and circumstances. Mr Fraser did not give evidence in the trial. Answers given by him to interrogatories were in evidence. These showed that Mr Fraser had received "information" concerning the material in the letter from a colleague. He believed this information to be "well grounded" and "accurate". 98 Mr Fraser did not identify what the "information" was. In response to one specific interrogatory, asking what "information" he had prior to sending the letter, he replied: "an email from a colleague".

This was hardly informative or forthcoming, but does not appear to have prompted those advising Mr Holmes to press for a more responsive answer. It may be assumed that the "email from a friend" was the material of which Ms Leahy gave evidence, an attachment to which was the copy of the draft of the letter that emanated from Mr Piccoli's office. But the content of the email, apart from the attachment, was never disclosed. I do not infer, from Ms Leahy's evidence, or from Mr Fraser's' answers to interrogatories, that that email contained specific or concrete information about Mr Holmes' political ambitions or activities. The fact that Mr Piccoli's published letter omitted paragraph 3 would suggest that, at the time of his communication with Mr Fraser, he did not have relevant information, but later acquired it. Unfortunately for Mr Fraser, he does not appear to have shared any such later acquired information. 99 In answer to a further interrogatory asking him to identify: "… all matters of past experience and background or of contemporary history or notoriety and anything else relating to the matter complained of which occurred prior to publication of the matter complained of"

Mr Fraser replied: "That incorrect information on coalition policy had been published by the NSW Nurses' Federation (sic) and its representatives."

He said that he made no further enquiries as to the truth or otherwise of any of the material in the letter, repeating that: "the information was acquired from a colleague";

He did not contact or attempt to contact Mr Holmes for that purpose. 100 That Mr Fraser did not give evidence is not without significance. He is the one person who could have thrown light upon what information he actually had, and what was in his mind at the time of publication. I am entitled, in accordance with the principles stated in Jones v Dunkel [1959] HCA 8; 101 CLR 298, to draw the inference that any evidence Mr Fraser could have given would not have assisted his case. I am not, of course, permitted to use his silence to plug any gaps in the case made on behalf of Mr Holmes. I must also bear in mind that the onus of proving malice lies upon Mr Holmes. 101 I have not found this an easy question to resolve. I am satisfied that Mr Fraser was both careless and impulsive (probably understandably so, in the atmosphere of a busy election campaign): but I am also satisfied that he that he was more than that; he published a seriously defamatory accusation of Mr Holmes, without ever turning his mind to whether it was true or false. As I have said, he accepted unquestioningly and uncritically what he received from Mr Piccoli. That amounts to recklessness. 102 I have concluded that Mr Holmes has established malice against Mr Fraser. The final defence, of qualified privilege, therefore fails along with the other defences. Mr Holmes is entitled to an award of damages.

DAMAGES 103 By s 34 of the 2005 Act, I am directed, in determining the amount of damages to be awarded: " … to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded." 104 By s 35(1) the maximum amount of damages for non-economic loss that may be awarded is $267,500. 105 By s 36, in awarding damages, I am to disregard the malice of the defendant at the time of publication or at any other time except to the extent that the malice affects the harm sustained by the plaintiff. (There is no evidence that the malice I have found would any way affected the harm sustained by Mr Holmes.) 106 Finally, by s 38, evidence is admissible in mitigation of damages of the publication by the defendant of, inter alia, any apology or correction made by the defendant. 107 I bear these strictures in mind. 108 I have already outlined the evidence given by Mr Holmes concerning his reaction to the publication. I accept that he was as disturbed by it as he described. No evidence of Mr Holmes' reputation, either before or after the publication, was called. Damage to reputation is presumed. Given that the letter was personally addressed to each individual recipient, it is likely that every one of them, or at least a very high proportion of them, actually read it. However, in this context, I am entitled to take into account events post-dating the publication. Mr Holmes was not only re-elected to his position of General Secretary, he was re-elected unopposed. It is likely that the ameliorating action he took immediately, in writing to members of the Association and categorically denying the accusations, went some way to mitigating the damage. Further, the publication was made in the heat of an election campaign, in which the Association was involved, and may not have been given as much weight as otherwise it might have been. 109 I have considered the weight (if any) that ought to be given to the letter of retraction written by Mr Fraser some months after the initial publication. Given its timing, it cannot be given any significant weight; the damage done to Mr Holmes was done immediately upon receipt of the defamatory letter and, if undone at all, it was undone by the response of Mr Holmes, himself, rather than the belated retraction by Mr Fraser. And, I have noted above, Mr Fraser's corrective letter is somewhat less than a whole-hearted retraction; it does not read as a withdrawal of the original accusation; rather, it suggests that subsequent events have shown that what was alleged in the original letter, was by June 2007, no longer the case. 110 There is little material on which to base an award of damages. Doing the best I can, I assess Mr Holmes' damages at $70,000. 111 I order that there be a verdict for the plaintiff in the sum of $70,000; the defendant is to pay the plaintiff's costs of the proceedings. **********

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