Beach v Freeson [1972] 1 QB 14

Caulfield v Whitworth (1868) 18 LT (NS) 527

Cotogno v Lamb (No 3) (1986) 5 NSWLR 559

Edmondson v Birch & Co [1907] 1 KB 371

Exel Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12; (1985) 155 CLR 448

Hoare v Jessop [1965] EA 218

Lemaire v Smith's Newspapers Ltd (1927) 28 SR (NSW) 161

London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15

Pamplin v Express Newspapers [1988] 1 WLR 116

Prager v Times Newspapers Ltd [1988] 1 WLR 77

Roff v British and French Chemical Manufacturing Company [1918] 2 KB 677

Smyth v Mackinnon (1897) 34 SLR 762

Stern v Piper [1996] EWCA Civ 1290; [1997] QB 123

Sutherland v Stopes [1925] AC 47

Watts v Times Newspapers Ltd [1995] EWCA Civ 45; (1996) 2 WLR 427

Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331

Webbie v Nationwide News Pty Ltd (1968) 12 FLR 271

1 OWEN J: In this action the plaintiff seeks damages from the defendants for defamation arising from a letter that the first defendant sent to the Cottesloe Golf Club (Inc) ("the Club") concerning an application that the plaintiff had made for membership of the Club.

2 The first defendant is the managing director of the second defendant, which is a private company operated for the benefit of the first defendant's family. The plaintiff's complaint in these proceedings lies primarily in the conduct of the first defendant. The second defendant is said to be involved because of the capacity in which the first defendant acted when engaged in that conduct. I will refer to the first defendant as "the defendant" and to the second defendant as "the Company". Where necessary, I will refer to the first and second defendants together as "the defendants".

3 The plaintiff and the defendant became acquainted in the early 1970's through their involvement in the real estate industry. In the mid-1970's the plaintiff operated a business from an office building which was partly owned by the defendant and in which the defendant also had an office. At that time the relationship between the two of them was described as that of "friendly acquaintances".

4 In July 1975 Richard Adams, an estate agent, had for sale a small block of flats in South Perth. The plaintiff and the defendant were each (independently) interested in acquiring the flats and made inquiries of Adams in that regard. The defendant made an offer to purchase the flats. The offer was accepted and settlement was effected. The plaintiff apparently took the view that there was something untoward in the way that the defendant acquired the property. This transaction seems to have been the genesis of the problems that have existed between the plaintiff and the defendant since then. Since 1976 they have had minimal contact. In due course I will describe some of the incidents that have occurred when they have seen one another. It is sufficient to say that what contact they have had has not been particularly friendly.

5 In 1989 the defendant joined the Club and now enjoys unrestricted membership. He plays golf at the Club on a regular basis. In November 1994 the plaintiff applied for membership of the Club and the application was placed on the waiting list. In mid-1997 the application came up for active consideration and, in accordance with the rules or practices of the Club, it was advertised on a noticeboard in the Club premises. On 1 July 1997 the defendant wrote a letter on the letterhead of the Company. It was addressed to David Baumgartel, the Manager of the Club, and it was signed by the defendant over the description "Managing Director". The letter is in these terms:

"In connection with an application form that is currently on display for Michael Francis Brown for membership of the Cottesloe Golf Club.

This is the first time that I have written a letter of dissent against any new application, I do so reluctantly and only after careful consideration. I believe that this applicant is not a fit and proper person to be a member of the Club and provide the following information to assist the committee in arriving at the same conclusion.

The intention of this information is to explain his character, the type of person he associates with and may introduce to the club, and his manner which is extremely rude and arrogant. I am not aware of all his activities only what is published.

During the seventies he had a real estate business trading as Brown & Brajkovich, most in the industry were cautious about dealing with him because of the unethical manner in which he operated. I read in the press that Mr Brajkovich was warned off all race tracks in the State.

He later formed a partnership with Mr Robert Martin who was one of the four big defaulting borrowers from the Teachers Credit Society ($28m). Mr Martin was also charged with bribing Mr Len Brush and I believed was jailed for some time.

Around 1983/4 Mr Brown was placed into Bankruptcy. I understand that at this time he was brutal to his creditors and his former partners.

He then got involved in the night club business and had a number of complaints against him, including sexual discrimination, that resulted in convictions against him. One was for refusing entry to a girl because she was ugly. I am sure that the associate members of the club would find this quite insulting.

Paper cuttings relating to two of these incidents are enclosed and it is interesting to note that the judge, in his summary, stated that Mr Brown was not a credible witness.

More recently I understand that he was one of the "Mr Bigs" of the Concorde Airline Club which is a pyramid selling organisation. This involved people investing money at a steward level and upon introducing other investors and more money, promotions were given to pilot, captain etc. Thousands lost money, the Ministry of Fair Trading made public statements about the legality of the scheme and are still looking to lay charges against the organisers.

I believe a Mr Nichevich, (unsure of correct spelling) recently had his application for membership at Cottesloe Golf Club declined. Mr Brown has a close friend fitting this name description.

I am sure that there are other matters relating to his indiscretions that have been brought to the attention of the authorities over the years, ie Land Agents Supervisory Committee, Reiwa, Liquor & Gaming etc but because of the confidentially restrictions placed on the various departments, they will not disclose any information about individuals whatsoever.

Over the past few years I know of three members of our club that have been charged with various types of criminal offences, two have been jailed. This reflects badly upon all members, most who have professional backgrounds and or high standing in the community.

We have a long waiting list of people wanting to join the club, therefore for the betterment of all members please reject this application and choose any other on your list."

6 The letter had attached to it photocopies of parts of pages from newspapers in which reference is made to cases before the Equal Opportunities Commission or Tribunal concerning the activities of a nightclub in which the plaintiff had an interest. I will call the letter and the accompanying photocopies "the Objection Letter". On 3 July 1997 the defendant handed the letter to Colin Howard who passed it on to Baumgartel. Howard and Baumgartel then invited the defendant into the office and discussed the Objection Letter with him. On 5 July 1997 a further meeting was convened. Kevin Johnson, the Club President, was in attendance along with Howard, Baumgartel and the defendant. The letter was discussed.

7 Two other letters were received by the Club opposing the plaintiff's application. Neither of the other letters went into any detail. On 15 July 1997 there was a meeting of the General Committee of the Club at which the application of the plaintiff (among others) for membership was considered. Under the rules of the Club if there are two adverse votes the application is declined. A secret ballot was held and the committee rejected the plaintiff's application. On 16 July 1997 Baumgartel wrote to the plaintiff advising him of the rejection. The plaintiff contacted Howard seeking a meeting to discuss the issue. Howard declined to meet him. The plaintiff then wrote to each committee member seeking "advice as to the precise reasons the Committee rejected [his] application for membership". One committee member telephoned the plaintiff and told him that the problem was a written objection from the defendant. This was the first indication the plaintiff had of the existence of the Objection Letter.

8 As a result of this information the plaintiff took legal advice. His solicitors obtained a copy of the Objection Letter from the Club and showed it to the plaintiff. These proceedings were commenced a short time later.

9 The plaintiff's cause of action arises from the Objection Letter. Paragraph 3 of the statement of claim sets out the text of the Objection Letter (without referring to the newspaper articles) and says, in effect, that it was published to Baumgartel. It is also pleaded that the letter was signed by the defendant in his capacity as managing director of the Company or alternatively in his own capacity. In par 4 reference is made to the natural and ordinary meaning of the words and there is then set out 15 separate imputations. There is no point at this stage in setting out the individual imputations. I will have to deal with them one by one in the course of these reasons. The conventional plea to support a defamatory meaning is contained in par 5. A republication by Baumgartel to the members of the committee is pleaded in par 6, although the republication is said to go only to the question of damages and not to constitute a separate cause of action. There is an alternative plea of publication, said to be constituted by the delivery of the letter to Howard in the knowledge that it would be given to Baumgartel.

10 Paragraph 10 of the statement of claim refers to the meeting held between Howard, Baumgartel and the defendant on 3 July 1997 and pleads that the defendant said certain words which are described as "the first qualification". In the time honoured fashion of defamation litigation these pleadings have gone through amendment after amendment after amendment. In fact, they were still being amended during closing addresses. There is no other reference to qualifications later in the pleading so the use of the word "first" in conjunction with the word "qualification" is probably an historical accident. It will be convenient for me to refer in these reasons to what was said by the defendant at the meetings of 3 July 1997 and 5 July 1997 simply as "the qualifications".

11 In par 11 the plaintiff repeats the imputations pleaded in par 5 as arising from the natural and ordinary meaning of the Objection Letter "when published in the context pleaded at par 10". In par 16 these pleas are effectively repeated in relation to the meeting held on 5 July 1997. The plaintiff also claims aggravated and exemplary damages.

12 In the defence the defendants admit that the defendant wrote and signed the Objection Letter but denies that it was in his capacity as managing director of the Company. They then plead the content of the newspaper articles that were attached as part of the Objection Letter. The defendants then refer to the meeting of 3 July 1997 at which the letter was read by Howard and Baumgartel and say that the defendant "contemporaneously explained and qualified certain parts of the letter as pleaded in par 10 of the statement of claim". A similar plea is made in relation to the meeting of 5 July 1997.

13 Paragraph 4 of the defence is, with three exceptions, a Polly Peck defence. The defendants deny that the meanings contended for by the plaintiff arise and set up alternative meanings which they then say are justified. Again, there is no point in me setting out the alternative meanings for which the defendants contend as I will have to deal with them individually when I discuss the defence of justification. The three exceptions that I mentioned can be dealt with when I discuss the defamatory imputations contended for by the plaintiff.

14 Paragraph 6 contains a plea that the words were published on an occasion of qualified privilege. It is said that the defendant, as a member of the Club, and Howard, as the Club Captain (and by extension Baumgartel and Johnson) had a corresponding interest or duty in providing and receiving information concerning the plaintiff. It is also said that the defendants had reasonable grounds for honestly believing what was written in the letter as explained and qualified by the qualifications. Those pleas are repeated in opposition to the matters said to arise from the 3 July 1997 and 5 July 1997 meetings. The defendants deny the matters raised in support of the claim for aggravated and exemplary damages. They also set up a claim for mitigation of the damages should the need arise.

15 I heard evidence from Howard, Baumgartel and Johnson as to what occurred before the plaintiff's application for membership came before the General Committee. I also heard evidence from Peter Stewart and Alistair Hope who were members of the General Committee and who attended the meeting on 15 July 1997. In my view they were credible witnesses and I have no hesitation in accepting what they told me.

16 Counsel for the plaintiff cross-examined each of them as to the way in which their witness statements were prepared and signed and the level of discussion between the various witnesses (and the defendant) about their statements or the events referred to in them. Baumgartel said that he had discussed some issues with Howard to refresh his memory. However, I am satisfied that there was nothing disclosed in cross-examination that indicated collusion between the witnesses or anything else that would cause me to taken an adverse view of their credibility or to ascribe less weight to their testimony. There were some differences in the respective accounts but I do not believe that they were material. They are differences which, I think, I am able to resolve in a manner that does not call into question the credibility of the witnesses concerned.

17 I cannot say the same about the evidence of either the plaintiff or the defendant. Given the peculiar nature of the relationship between the plaintiff and the defendant I have endeavoured, where possible, to look for and rely on independent evidence rather than on the testimony of the parties. That is not to say that I have rejected their respective testimonies entirely. This will emerge as the reasons develop.

Events Concerning the Club Prior to 3 July 1997

18 Before I consider what imputations arise from the Objection Letter and whether the words complained of are defamatory I need to describe in more detail what happened before and at the meetings on 3 July 1997 and 5 July 1997 and at the meeting of the General Committee on 15 July 1997.

19 The Rules of the Cottesloe Golf Club provide for a Committee that is responsible for the management of the Club and which has absolute authority regarding the conduct of all of the affairs and business of the Club unless otherwise specified: r 18. The president and Captain are ex-officio members of the Committee and the Captain is the chairman of the Committee. Rule 19 provides for sub-committees, including a membership committee, with members appointed by the Committee. The powers and duties of the sub-committees are not otherwise specified or set out in the Rules. The Captain is an ex-officio member of all sub-committees. Rule 17 provides for the appointment of a paid Manager. He or she is not a member of the Committee. The duties of the position include keeping minutes of all proceedings of all committee meetings and dealing with correspondence. The provisions governing applications for membership are, relevantly, as follows:

"34. Every applicant for admission as a Member of the Club ... shall be duly proposed and seconded in writing by two Members, both of whom shall be answerable for the eligibility of such applicant and each of whom shall have been a Member for a period of not less than five years. The proposer must submit the names of three Members of the Club who have personal knowledge of the applicant and who are willing to support the applicant's candidature.

35. The nomination paper of every applicant for membership shall be displayed on the noticeboard of the Club for at least fourteen days before the day of election, and such nomination paper shall contain the applicant's full name, address and occupation and be signed by the applicant, the proposer, and the seconder.

36. All .. Members, ... shall be elected by the Committee on a day to be notified. Each election shall be by ballot and two adverse votes shall exclude the applicant from membership."

20 No documentary evidence (for example a minutes of a Committee meeting) was led to establish that in 1997 a membership committee had been formally appointed or was acting as such. It can therefore be ignored for formal purposes although it is apparent from the evidence of some of the witnesses that they thought the body existed and was active. Counsel for the plaintiff was particularly sensitive to evidence being led on this issue. In the end, I think it was relevant primarily to the qualified privilege question and I think it is possible to deal with that defence in a broader way.

21 On 24 November 1994 the plaintiff's application for membership of the Club was lodged. It was supported by letters from Thomas Morley, the proposer and Charles Clifford, the seconder. Shortly before the application came up for formal consideration Clifford took the plaintiff to the Club and introduced him to Howard as a prospective member. I will deal with Howard's response in the next paragraph. By the time the application came to the "top of the pile" Morley had died. The Committee decided that the application was invalid. On 14 September 1996 the then manager wrote to the plaintiff advising him accordingly and returning his deposit. He was told that a fresh application could be lodged. On 25 September 1996 Brent Sunderland, a member, proposed the plaintiff for membership. Clifford continued as seconder.

22 Howard's evidence was that after he had been introduced to the plaintiff he checked the application. He was not impressed by the level of detail which Morley and Clifford had provided concerning their knowledge of the plaintiff. In Howard's view the proposer and seconder had taken a rather casual approach to the requirements for applications. Howard was cross-examined at some length about the letters written by the proposer and seconder and why he thought they were deficient (T 445-448). I am satisfied with his explanation. He also said that around this time there was enormous demand for memberships and the Club was subjecting applications to considerable scrutiny. Johnson gave evidence to similar effect. Howard said that he had taken a decision not to support the application. He also said that shortly after the meeting with the plaintiff he had been approached by the defendant. The defendant had asked him what the plaintiff had been doing at the Club that night and Howard responded that the plaintiff was an applicant for membership. According to Howard, the defendant expressed reservations about the plaintiff being a member of the Club but did not expand on them. Howard was aware that a letter of objection would be provided. Howard also testified that the letter from Sunderland did not influence (in the sense of change) his decision to vote against the application.

23 I accept the evidence of Howard and Johnson that I have just outlined.

24 On 3 July 1997 the defendant handed the Objection Letter to Howard and was invited to the manager's office to discuss it. The only persons present at that meeting were the defendant, Howard and Baumgartel. The evidence of Howard and Baumgartel was that the meeting lasted about 30 minutes.

25 Howard's evidence was that he read the letter and handed it to Baumgartel. He then asked the defendant to go through the letter and explain its contents. The defendant said that it was the first time he had made an objection. He had not enjoyed it but felt under an obligation to the Club to do so. He said that what was in the letter was largely based on what other people had told him. Howard reassured him that what he had written would be treated as confidential. The defendant made comments on individual aspects, which I will detail later. Howard agreed in cross-examination that apart from the paragraph on the second page of the letter referring to Mr Nichevich, the defendant did not say, in relation to any part of the letter, "you should ignore that paragraph". Howard denied that at the end of the meeting the defendant insisted that the application be rejected there and then. He said that he told the defendant that the Club intended to follow its normal procedure and that it would go up to the Committee. Howard then asked Baumgartel to arrange a further meeting at which the Club President could be present.

26 Baumgartel confirmed that he did not take notes of the meetings of 3 and 5 July and, so far as he could recall, nor did anyone else. Baumgartel's evidence as to the course which the meeting took is materially the same as that of Howard.

27 On 5 July 1997 the defendant attended a further meeting in the manager's office with Howard, Baumgartel and Johnson. It lasted about 30 minutes. Baumgartel testified that he showed the letter to the persons present and that the defendant went through it again. Howard said that the meeting followed much the same course as had the earlier discussion. Johnson testified that Howard invited the defendant to explain the letter of objection that he had written. Johnson said that he was not particularly interested in the contents of the letter. What was more significant to him was the fact that a member had an objection to the plaintiff's application. The defendant had expressed concern at having to write the letter but that he thought it was in the best interests of the Club. Johnson read the letter but could not remember the details. The defendant then proceeded to explain the contents. Johnson's recollection was that there was little or no comment by anyone other than the defendant at the second meeting.

28 There are no material differences in these versions and I accept the evidence that I have outlined.

29 I turn now to consider the evidence as to what the defendant said by way of explanation of the contents of the Objection Letter. The defendant gave evidence of these discussions. However, consistent with the general approach that I have mentioned, I have preferred to rely on the evidence of Howard, Baumgartel and Johnson as to what was said. I say this in the full knowledge that none of those witnesses pretended to be reciting what had been said word for word. Each was making a best endeavour to give the gist of what had been said according to his recollection.

30 I have set out as Table "A" to these reasons a schedule which takes each paragraph of the Objection Letter and then compares the evidence of the defendant, Howard, Baumgartel and Johnson in this respect. Leaving to one side the evidence of the defendant, there was little in the cross-examination to cause me to doubt the reliability of that testimony.

31 I should, however, mention a couple of points. Although it was not mentioned in his witness statement, Howard gave viva-voce evidence-in-chief and in cross-examination that when discussing the eleventh paragraph of the Objection Letter the defendant had said of the plaintiff: "He's not a criminal". It was not in his statement of evidence but in cross-examination Baumgartel said that during the course of the meeting the defendant told those present that he had reported the plaintiff to the police after the plaintiff had taken some documents from his office. However, the defendant had also said that the police report was not the reason why he had written the letter and he did not want it taken into account.

32 In cross-examination Johnson said he could not recall the defendant making mention of a report to police. Johnson also said, in relation to the tenth paragraph of the Objection Letter, that he had said to the defendant: "There has been media coverage on previous [Club] members". The defendant had responded with words to the effect: "These people are not in his league". Howard made no mention of the defendant having said he had reported the plaintiff to the police. Nonetheless, I have no reason not to accept Baumgartel's recollection of the exchange.

33 In relation to the imputation concerning the plaintiff's participation in the pyramid selling scheme, I specifically accept Baumgartel's evidence that the "defendant simply read that part of the letter". Neither he nor Howard testified that the defendant had in any way qualified the words in the Objection Letter: "he was one of the 'Mr Bigs' in the Concorde Airline Club" (my emphasis). As will appear shortly, this is an important finding in relation to the content of the imputation that the defendant has to justify.

34 I make these findings. The Objection Letter came into the possession of, and was read by, Howard, Baumgartel and Johnson in the way that I have described. On 3 July 1997 and 5 July 1997 meetings occurred between the defendant and Howard and Baumgartel or Howard, Baumgartel and Johnson in the terms that I have described. The defendant explained parts of the letter to them. I find that the explanations that I have listed below (in each case corresponding to a paragraph number in the Objection Letter) were given.

The defendant said he believed the plaintiff was not a fit and proper person to be a member of the Club. The defendant also said that he had reported the plaintiff to the police when the plaintiff had taken some documents from his office.

The defendant did little more than read from the letter. He said that he had not been able to ascertain whether Brajkovich had been warned off all race tracks in the State but he understood that he (Brajkovich) had been involved in some dispute with the WA Turf Club.

Some reference was made to Mr Martin but no detail was given as to what was said and the paragraph therefore stands on its own.

Howard told the defendant that it was not particularly relevant that the plaintiff had been made bankrupt because that was no bar to membership under the Rules. The defendant agreed but said that was not the point he was trying to make. Although he did not give specific details the defendant said that the plaintiff had been very hard on his creditors.

The defendant referred to the newspaper clippings which reported that the plaintiff had been found to have sexually discriminated against a man in not allowing him entry to the Racquet Club nightclub. The defendant said that the plaintiff was an owner-manager of the Racquet Club and referred to another newspaper clipping which stated that a girl had been barred for being ugly. When it was pointed out to him that the text of the article was not included in the Objection Letter the defendant said that he had not done so because the incident related to a bouncer and did not directly involve the plaintiff. He said that the clipping was relevant because the plaintiff was the owner-manager of the Racquet Club. The defendant also mentioned that overcrowding convictions had been recorded in relation to the Racquet Club that were either against the nightclub or against the plaintiff.

The defendant referred to one of the newspaper clippings in which it had been reported that the plaintiff had been found not to be a credible witness.

The defendant simply read that part of the letter. He said he had heard the plaintiff being involved in the Concorde Airline Club from a number of people but that he had no personal knowledge of the plaintiff's involvement in the schemes. He was relying on what he had been told by the plaintiff's former solicitor and partners.

The defendant as told by those present at the meeting that it was a Mr Starcevich (not a Mr Nichevich) who had made an unsuccessful application for membership of the Club. He then told those present to disregard that paragraph.

The defendant said that he tried to obtain information as to other matters in which the plaintiff may have been involved but had been unable to do so because of confidentiality restrictions imposed by some agencies.

The defendant said that he did not associate the plaintiff with the comments or the persons referred to in the second-last paragraph. He added words to the effect that "these people are not in his league" and "he's not a criminal".

45 The next relevant event was the Committee meeting of 15 July 1997. By that time a second letter of objection had been received although it was confined to the fact of opposition without going into detail.

46 Howard testified that he was not concerned with the content of the Objection Letter but rather with the fact that an objection had been lodged. It was the policy of the Club not to table objection letters. When the subject came up for discussion at the Committee meeting on 15 July 1997 Howard reported that there were two letters opposing the plaintiff's application, one was short and the other long. The letters were not tabled and nor were their contents discussed. Howard voted against the application.

47 Hope was also present at the meeting. He had not read or seen the Objection Letter and nor was it tabled at the meeting. Howard had identified the authors of the two letters of objection but had not gone further. Hope had decided to vote against the plaintiff's application and he did so. His reason for so doing appears from this exchange in his cross-examination:

"Is the reason you voted no that you wanted to avoid a conflict between Mr Brown and a member of the club?---I wanted to avoid a conflict between Mr Brown and members of the club. I had understood that there wasn't only one member who had expressed reservations about Mr Brown.

There were two objections before the meeting, were there not, that you were advised of?---I think Mr Howard told the meeting that he had received letters from two members expressing reservations and I have a recollection that I had been advised that other people had expressed concerns as well."

48 In the days leading up to the meeting Hope had overheard conversations at the Club between two or three other members (not the defendant but probably including Howard) that a number of people had reservations. This explains the last part of that exchange. It would be trite to say that this is not evidence that other members were opposed to the plaintiff's admission but simply as to Hope's state of mind.

49 Stewart was also present at the Committee meeting of 15 July. He supported Howard's evidence that the Objection Letter was not tabled and nor were its contents discussed. He never saw the letter and nor did he discuss it with the defendant or with any other person. He too voted against the plaintiff's application. He did so on the basis that objections had been made and without any knowledge of the contents of the objections.

50 Johnson also testified to having voted against the plaintiff's application. He, of course, had been at the meeting on 5 July 1997 and was aware of the contents of the letter. However, he said that he was more concerned with the fact that an objection had been lodged than with the contents of the letter.

51 I accept all of the evidence of Howard, Hope, Stewart and Johnson that I have just outlined. In particular, I accept that Howard, Hope, Stewart and Johnson voted against the plaintiff's application because of the fact that objections had been lodged and were not influenced by the content of the letter. Howard was also influenced by his concern about what he described as the casual manner in which the proposers had presented information. Of course, neither Hope nor Stewart were aware of the contents of the Objection Letter.

52 It is a critical part of the defendant's case that the Objection Letter is not to be viewed in isolation. Rather it is to be considered in the light of what was said at the meetings of 3 July 1997 and 5 July 1997. The plaintiff challenged that contention, both as a matter of law and on the facts. It is necessary to resolve the issue before going on to consider the substance of the plaintiff's claim and of the matters raised by way of defence.

53 It is trite law that words complained of have to be viewed in their context. The point was raised when the defendant sought leave to amend the defence during the interlocutory stages of these proceedings. In Brown v Marron, unreported, SCt of WA (Steytler J); Library No 980686; 1 December 1998 Steytler J said, at 6 - 7:

"There is no doubt that in considering whether or not defamatory imputations arise it is necessary to take into consideration, not only the actual words used, but their context (see Nevill v Fine Arts & General Insurance Co Ltd [1897] AC 68 at 72, per Lord Halsbury LC). Gatley on Libel and Slander, 9th ed, para 3.28, suggests that it follows from the fact that the context and circumstances of the publication must be taken into account that the plaintiff cannot pick and choose parts of the publication which, standing alone, would be defamatory. There can, I think, be little doubt as to the correctness of that proposition (see Charleston v News Group Newspapers Ltd [1995] UKHL 6; [1995] 2 AC 65 and Gordon v Amalgamated Television Services Pty Ltd [1980] 2 NSWLR 410). Thus, where a newspaper article refers to another report in the same issue either party is entitled to have that other report read as part of the context in which the meaning of the words complained of is to be determined (see Thornton v Stephen [1837] 2 M & Rov 45 and Gatley, supra, para 3.30). It may, in an appropriate case, even be necessary to go outside the document in which the words complained of are contained in order to obtain the necessary context (see Smyth v MacKinnon [1897] 34 SLR 1086).

That being so, it seems to me to be plain that a defendant should be entitled to raise contextual material in the defence where that contextual material has not been pleaded by the plaintiff and where it might affect the meaning put upon the words complained of by the ordinary reasonable reader.

It seems to me also to be plain that contextual material of that kind might include, as it is said to do in this case, newspaper cuttings attached to the letter the subject of the plaintiff's complaint. Moreover, it seems to me that an oral explanation or qualification of written material made simultaneously with the reading of that material might also comprise relevant contextual material. There is, I think, no relevant distinction between that situation and one of the kind which occurred in Thornton v Stephen, supra, in which one newspaper article referred to another in the same issue or in Smyth v MacKinnon, supra, in which a letter was required to be read in its context in the whole of the correspondence of which it formed a part. The fact that the contextual material is oral rather than in writing seems to me to be of no significance if, in truth, it qualifies the meaning of the written material at the time at which that material is read.

It consequently seems to me that it is open to a defendant to plead contextual material of that kind."

54 I acknowledge that Steytler J was dealing with a pleading point, not with an issue of substance. Nonetheless, what his Honour said seems to me to follow as a matter of principle and logic beyond the pleadings and into the substance of the action. I have no hesitation in adopting this dicta.

55 Of course, this does not provide the complete answer. The problem is that, generally speaking, the tort is complete at the moment of publication: Gorton v The Australian Broadcasting Commission (1973) 22 FLR 181 at 183; Grapelli v Derek Block Holdings [1981] 1 WLR 823 at 831. So it is, for example, that a defamatory publication followed by a retraction, perhaps the next day or even an hour or so later, does not destroy the cause of action arising from the original publication. But it still begs the question, what is "the publication"? In Gatley on Libel and Slander, 9th Ed (to which I will refer from time to time simply as "Gatley") at par 3.30 the authors give a number of examples of instances where context is important. One is where an apparently innocuous statement is made on p 100 of a book but when the reader moves to p 110 there is another piece of information from which the true meaning emerges. The statement on p 100 is defamatory. Similarly where a book is published in serial form, with parts appearing perhaps a week apart, the situation may necessitate the entire series being considered in order to decide how the ordinary reasonable reader would understand one particular passage.

56 Each case must depend on its own facts. There must be an intimate connection between the primary source of the alleged defamation and the other material which is said to form part of the context. The primary and secondary sources must be so closely connected, interwoven or enmeshed that it is necessary to take them effectively as one transaction in order to arrive at the true import and meaning of what was written and said. The requisite degree of intimacy will usually (although not always, for example in the serialisation situation) demand contemporaniety. It will be necessary to consider all of the surrounding circumstances to decide whether the secondary materials are so intimately connected with the primary sources that they are to be taken to be a part of the context which might affect the way in which the ordinary reasonable reader would understand the words complained of.

57 In this case there was a very close temporal proximity between the delivery of the letter to Howard, the reading of the letter by Howard and Baumgartel and the verbal presentation by the defendant. I think it emerges from the evidence that the defendant was physically present when Howard and Baumgartel read the letter. The same can be said of Johnson's involvement. The defendant was present when Johnson read the letter and he moved straight on to explain its contents. Accordingly, to the extent that par 16 of the statement of claim founds a separate cause of action, the same considerations apply.

58 In my view, in the circumstances of this case, it is appropriate to regard what was said at the meetings on 3 July 1997 and 5 July 1997 as part of the context against which the words complained of in the Objection Letter are to be assessed.

The Defence of Justification - A Preliminary Comment

59 Logically, the next step is to consider whether the words complained of bear all or any of the imputations contended for by the plaintiff in pars 4 and 11 of the statement of claim and whether they are defamatory. It will be convenient to consider, at the same time, the alternative imputations or meanings contended for by the defendant in par 4 of the defence. I should explain why.

60 Once an imputation is shown to be defamatory it is presumed to be false: Belt v Lawes (1882) 51 LJQB 359 at 361. In the common law jurisdictions (of which Western Australia is one) truth, or justification as it is technically known, is a complete defence. The onus is on the publisher to prove that the imputations arising from the words complained of are substantially true: West Australian Newspapers Ltd v Bridge [1979] HCA 10; (1978-79) 141 CLR 535 at 544; Gobbart v West Australian Newspapers Ltd [1968] WAR 113 at 118.

61 Where more than one imputation is conveyed by the words complained of the publisher may seek to justify some but not all of them. But if it does so, the publisher will be liable in damages on the imputations that have not been justified unless some other defence applies: Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623 at 627. In other words, in Western Australia there is no defence of partial justification as there is in some jurisdictions where the common law has been modified by statute. Alternatively, if there is a "common sting" to the imputations they are not to be regarded as separate and distinct defamatory statements and the publisher is entitled to justify the sting rather than the individual allegations: Polly Peck (Holdings) Ltd v Trelford [1986] 1 QB 1000 at 1032.

62 With the defence of truth it is only the meanings that the words complained of actually bear that the publisher is required to justify: Gatley at par 11.4. A publisher is entitled to contend that the words complained of, in their context, bear a different meaning or imputation from that alleged by the plaintiff. This is the essence of the Polly Peck doctrine as it has been approved and applied in this jurisdiction: Gumina v Williams (No 2) (1990) 3 WAR 351 ; Cash v Morris (1993) 10 WAR 518 . Notwithstanding criticism of the Polly Peck doctrine by some members of the court in Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519, it remains good law in this State.

63 I did not understand the defendant to argue that the various imputations bore a common sting. Accordingly, that aspect of the Polly Peck doctrine can be ignored. However, the defendant set up, and sought to justify, alternative meanings or imputations to or from those contended for by the plaintiff. It is, therefore, necessary for me to decide what imputations the Objection Letter bear.

64 As the authors of Gatley remark, at par 1.5, there is no wholly satisfactory definition of a defamatory imputation. Three formulae have been particularly influential. First, an imputation that tends to "lower the plaintiff in the estimation of right thinking members of society generally": Sim v Stretch (1936) 52 TLR 669 at 671. However, the phrase "right thinking members of society" was criticised by Griffiths CJ in Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1 at 7. His Honour preferred the phrase "a [person] of fair average intelligence". Secondly, an imputation that tends to cause others to "shun or avoid the plaintiff": Yousoupoff v MGM Pictures (1934) 50 TLR 581 at 587. Thirdly, an imputation that tends to expose the plaintiff to "hatred, contempt or ridicule": Capital and Counties Bank Ltd v Henry (1882) 7 App Cas 741 at 771.

65 I think it is probably sufficient for the purposes of this case if I were to say that an imputation is defamatory if it is likely to lead the recipient, as an ordinary person, to think less of the person to whom it relates: Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632 at 638.

66 What I have said to date is more concerned with the essential character of the words complained of as conveying a defamatory meaning than it is with the categorisation of the "ordinary person". I think the tests in relation to the latter (usually referred to as "the ordinary reasonable reader") are equally well known. They arise from cases such as Jones v Skelton [1963] 1 WLR 1362, particularly at 1370 - 1371, Lewis v Daily Telegraph Ltd [1964] AC 234, particularly at 258 - 259 and Morgan v Odhams Press Ltd [1971] 1 WLR 1239 at 1245, 1254. In this respect I cannot add much to what I said in Smith v Littlemore (1996) 15 WAR 289 at 294 - 295.

67 The first imputation contended for by the plaintiff is that the plaintiff was a rude, arrogant and ill-mannered person. The defendant's version omits the words "ill mannered". I do not think there is much difference between the two versions. The words used in the third paragraph of the Objection Letter are that the plaintiff has a "manner which is extremely rude and arrogant". The imputation (whether it be in the form contended for by the plaintiff or the defendant does not matter) clearly arises from the words complained of. The Shorter Oxford Dictionary defines the word "rude" to mean, among other things: "ill-mannered, impolite; offensive or discourteous". The word "arrogant" is defined to mean, among other things: "aggressively conceited or presumptuous". Reading the Objection Letter as a whole, even taking into account the qualifications, I think the imputation has been made out and it is defamatory in the sense that it would tend to cause the ordinary reasonable reader to think less of the plaintiff.

68 The plaintiff's second imputation is that the plaintiff was an unethical real estate agent. The defendant says that the meaning which arises is this: "the plaintiff had acted unethically in a real estate business dealing in the 1970's". In the particulars to par 4.3 of the defence the defendant cites two instances. The first is that the plaintiff complained to the Real Estate Institute of Western Australia (Inc) and to the Land Agents Supervisory Board about the sale of the South Perth flats to the defendant when there was no grounds for making the complaint. The second was an instance when the plaintiff had made an approach to a vendor notwithstanding that a "for sale" sign indicated that the vendor was represented by another agent.

69 The critical words appearing in the Objection Letter are these: "During the seventies he had a real estate business trading as Brown & Brajkovich, most in the industry were cautious about dealing with him because of the unethical manner in which he operated". In accordance with the findings that I have set out above there was no relevant qualification of this aspect of the Objection Letter. It cannot reasonably read as being confined to "a real estate business dealing in the 1970's" (my emphasis) or to two incidents as contained in the particulars to par 4.3 of the defence. In fact evidence was led of a third incident, involving John Malloch. To say that people in the industry were cautious about dealing with the plaintiff "because of the unethical manner in which he operated" does give rise to the imputation that he was "an unethical real estate agent". On this point I therefore find in favour of the imputation as formulated by the plaintiff and not in the terms contended for by the defendant. I also think it is defamatory to say of anyone in commerce that they have, in an industry which is governed by a statutory licensing regime, acted in an unethical manner.

70 The third imputation in the statement of claim is that the plaintiff associated with undesirable people. This comes from various parts of the Objection Letter. In the third paragraph the defendant says that his intention in writing the letter was to "explain ... the type of person [the plaintiff] associated with and may introduce to the club". In the fourth paragraph he refers to Brajkovich and says that he had read in the press that Brajkovich had been warned off all race tracks in the State. He then refers to Robert Martin as a former partner of the plaintiff who was a large defaulting borrower of Teachers Credit Society and who had been gaoled for bribery. The ninth paragraph contains a reference to a Mr Nichevich, a person who had recently had his application for membership at Cottesloe Golf Club declined and to the plaintiff having a close friend "fitting this name description".

71 There is no relevant qualification of the first part of that statement. In relation to Brajkovich the qualification is that the defendant had been unable to ascertain whether he had been warned off but the defendant understood that he was in dispute with the WA Turf Club. As I have said, there was no relevant qualification of the statements concerning Martin. When told that Nichevich was not the person who had suffered a rejection of a membership application the defendant said that the persons at the meeting should disregard that paragraph.

72 In par 4.4 of the defence the defendant denies that the meaning is as contended for by the plaintiff and says that the words complained of mean that the plaintiff had associated with people who were not fit and proper persons to be members of the Club.

73 The defendant's contention seems to be that he was simply drawing attention to the type of person the plaintiff "may introduce to the club" in the sense of proposing them for membership. That seems to be the import of the reference to persons who are not fit and proper to be members of the Club. If that is the case, it begs the rhetorical question: so what? There is a mechanism within the Club rules by which undesirable elements of society can be identified and sent away to take their recreation on public golf courses or at some other club with lesser standards. I think that the defendant's contentions involve an understanding of the entire publication that is too narrow. It relates to the "character" of the plaintiff and to the type of person he "associates with". It is not confined to those he may introduce to the Club in the sense that I have outlined.

74 In my view the sting of the words complained of (even taking into account the qualification concerning the Brajkovich comment and, taking the best view for the defendant, ignoring completely the reference to Nichevich) is that the plaintiff's character is suspect because he associates with undesirable people. Again, on this point I find that the imputation is as contended for in par 4.3 of the statement of claim and it is defamatory.

75 The fourth imputation in the statement of claim is that the plaintiff had been adjudged bankrupt. The words are: "around 1983/84 [the plaintiff] was placed into Bankruptcy". In my view this was appropriately qualified at the meeting and does not, of itself, give rise to a separate defamatory imputation. I do not need to deal with par 4.5 of the defence.

76 The fact of the bankruptcy, or more accurately an arrangement under Part X of the Bankruptcy Act 1966 (C'th), is relevant to the fifth and sixth imputations in the statement of claim. It is said that the plaintiff acted brutally with his creditors and former partners. That is pretty well what the words in the sixth paragraph say. The qualification was that the plaintiff was hard (not brutal) on his creditors. I would have been tempted to say that this was not defamatory. I think the ordinary reasonable reader would know that insolvency arrangements often leave significant deficiencies. It is always "hard" on creditors to suffer a loss. I am not sure that that imputation, without more, is defamatory. However, the plea in pars 4.6 and 4.7 seems to assume the defamatory character of the imputations and I should deal with it in accordance with the pleadings. In other words, I will approach it on the basis that the meaning is "hard" rather than "brutal".

77 As the case developed, I think the allegation concerning "former partners" was confined to Robert Martin. I will deal with it in that way. When the plaintiff underwent the Part X arrangement, Martin was left to deal with the creditors of the failed venture.

78 The next imputation is that the plaintiff had a number of convictions. Despite the apparently broad wording of the seventh paragraph of the Objection Letter, counsel for the plaintiff seemed to accept in closing (T 665) that the imputation was as pleaded in par 4.8 of the defence, namely, that the plaintiff had a conviction for overcrowding at the Racquet Club. This seems to render irrelevant (at least for the purposes of this imputation) the evidence about the sexual discrimination incident concerning Daniel King. The qualification made at the meeting is that a conviction had been recorded either against the nightclub or against the plaintiff. In my view (and this is in accordance with the pleading) that still leaves open the possibility that the plaintiff himself had suffered the conviction. In my view it is defamatory to say of a person involved in the entertainment industry that he has been convicted of an offence in relation to that industry.

79 In the statement of claim it is also said that the words complained of meant that the plaintiff had acted improperly by refusing entry to a night club to a girl because she was ugly. The qualification was to the effect that the incident related to a bouncer at the club and did not directly involve the plaintiff. However, the plaintiff was the owner-manager of the club. Paragraph 4.9 of the defence sets up an alternative meaning. It is that a bouncer at the plaintiff's nightclub had acted improperly by refusing entry to a girl for the stated reason that she was "too ugly". It is also said that the operation and conduct of the night club was the plaintiff's responsibility. In light of the qualification I accept that the imputation is as contended for by the defendant in par 4.9 of the defence.

80 It is convenient to deal with the ninth and tenth imputations together. They are that the plaintiff contravened the law by being a major promoter in a pyramid selling organisation and that he had caused loss to others by engaging in pyramid selling. In pars 4.10 and 4.11 of the defence the defendant says that the only imputation to arise from the words complained of is that the plaintiff had been involved in a pyramid selling game. The words complained of in the eighth paragraph of the Objection Letter refer to the defendant's understanding that the plaintiff was one of the 'Mr Bigs' of the Concorde Airline Club, a pyramid selling organisation. It is also said that "thousands lost money, the Ministry of Fair Trading made public statements about the legality of the scheme and are still looking to lay charges against the organisers". The qualification was that the defendant had heard the 'Mr Bigs' allegation from a number of people but that he had no personal knowledge of the plaintiff's involvement in the schemes. He was relying on what he had been told by the plaintiff's former solicitor and partners.

81 In this instance I am not sure that the qualification assists the defendant at all. It is trite law that "for the purposes of the law of libel a hearsay statement is the same as a direct statement, and that is all there is to it": Lewis v Daily Telegraph Ltd at 284, cited with apparent approval in Stephens v West Australian Newspapers Ltd [1994] HCA 45; (1993-94) 182 CLR 211 at 246. To add the rider that he had no personal knowledge of the plaintiff's involvement is not sufficient to remove an otherwise defamatory character from the statement. Even if the rider were to go so far as the defendant expressing a doubt as to the truth of the allegation (which this one did not), the defendant would not be relieved of liability: see Gatley at par 6.29. The rider may be relevant to other defences but it does mean that the imputation does not arise or that it is not defamatory.

82 The letter refers to the plaintiff as a "Mr Big" of the Concorde Airline Club, a pyramid selling organisation, that thousands lost money in the scheme, that the Ministry of Fair Trading had made statements about the legality of the scheme and was looking to lay charges against the organisers. In my opinion the ordinary reasonable reader would regard a "Mr Big" as an "organiser" or "major promoter" of the scheme. The reader would understand the reference to statements made by a regulatory authority concerning the legality of the scheme as carrying the implication that involvement in the scheme was contrary to law. However, I am not sure that the statement "thousands lost money in the scheme" carries with it the implication that the plaintiff "caused" losses to others by engaging in the scheme. I am satisfied that the ninth imputation arises but not the tenth.

83 The next question is whether it is defamatory. There are always difficulties in deciding between allegations of guilt and suspicion of guilt: see Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 23 October 1997. In this case I think the ordinary reasonable reader would glean from the words complained of the meaning that the plaintiff had contravened the law by being a major promoter of a pyramid selling scheme. That is defamatory.

84 The eleventh imputation contended for by the plaintiff is that the plaintiff acted improperly as a real estate agent. Once again, an allegation in defamation litigation that a person acted "improperly" is destined to cause problems. It is apparent from par 4.12 of the defence that those advising the defendant thought this imputation was no different from the second imputation in the statement of claim. I take the same view.

85 The bald assertion in the twelfth imputation that the plaintiff acted improperly as a licensee is unhelpful. In par 4.13 of the defence the defendant sets up an alternative meaning, namely that the plaintiff acted improperly during his involvement in the nightclub business. It then gives a number of particulars. One is the sexual discrimination allegation concerning Daniel King. Another is that the Equal Opportunities Tribunal had, in a judgment, found that the plaintiff was not a credible witness. Thirdly, the allegation about the bouncer and "the ugly girl". Fourthly, the conviction for overcrowding. I am prepared to proceed on the basis that the imputations as contended for by the defendant arise from the words complained of. That having been said, the allegations concerned are all covered elsewhere and simply repeat meanings that have already been pleaded. I do not think they add to the claim or the defence.

86 In par 4.13 of the statement of claim it is pleaded, as an imputation, that the plaintiff had committed many indiscretions. This is, once again, unhelpful. The qualification was that the defendant had tried to obtain information as to other matters in which the plaintiff may have been involved but had been unable to do so because of confidentiality restrictions imposed by some agencies. That is the import of par 4.14 of the defence. In my view, the meaning is as contended for by the defendant and it is not defamatory.

87 The fourteenth imputation contended for by the plaintiff is that the plaintiff was so unsuitable for membership of the Club that any other person on the waiting list would be a better choice. I presume that this comes from the final paragraph of the Objection Letter. The defendant admits that this is the meaning that arises from the words complained of. The defendant does not seek to justify that imputation. The defence contains a denial that the words were published maliciously and a denial that because of the publication the plaintiff has been injured in his character and reputation. It is implied in par 4.15 that the imputation is not defamatory. I think the ordinary reasonable reader would understand the words complained of as meaning that the plaintiff was so lacking in character that any other person who had made an application for membership would be a better prospect. That, it seems to me, goes further than saying the plaintiff was not a fit and proper person to be a member. It is defamatory.

88 The final imputation is that the plaintiff had so conducted himself as to give rise to a reasonable concern that he would be convicted of criminal offences and imprisoned. The qualification was to the effect that the defendant did not associate the plaintiff with, or put the plaintiff in the same league as, other Club members who had been convicted and gaoled and he was not saying the plaintiff was a criminal. This is the effect of par 4.16 of the defence. In my view the meaning is as contended for by the defendant and it is not defamatory.

89 I find that the following defamatory meanings or imputations arise from the Objection Letter as qualified.

2. The plaintiff was an unethical real estate agent.

3. The plaintiff associated with undesirable people.

4. The plaintiff had been hard on his creditors and on Martin, a former partner.

5. The plaintiff had a conviction for overcrowding in the nightclub.

6. The plaintiff, being responsible for the operation and conduct of the nightclub, was responsible for the actions of a bouncer who had improperly refused to admit a girl to the nightclub because she was "too ugly".

7. The plaintiff had contravened the law by being a major promoter in a pyramid selling organisation.

8. The plaintiff was so unsuitable for membership of the Club that any other person on the waiting list would be a better choice.

90 The imputations numbered 1, 4, and 6 in that list are the subject of a plea by the defendant that they are true in substance and in fact. They can be dealt with on the merits without further comment.

91 If I were to take a strict approach the defendant may have some difficulty with the defence of justification on the imputations numbered 2 and 7 in the list. This is because he has failed to convince me that the meanings for which he contends, and which he seeks to justify, are the meanings which arise from the words complained of. However, I propose to take a broad view of the pleadings. I do not think that the meanings pleaded for by the defendant are so dissimilar to those contended for by the plaintiff that serious prejudice would arise if I were to afford the defendant the chance to establish the defence on the merits. All of the issues in this case were comprehensively dealt with both in evidence and in submissions. If, in relation to the second imputation, emphasis is placed on the word "business" rather than "transaction" the true sense emerges. As regards the seventh imputation, the concentration should be on whether the plaintiff was involved in pyramid selling schemes and, if so, to what extent.

92 I do not, however, take the same view of the third imputation. The allegation that the plaintiff associated with undesirable people is so different from the meaning contended for by the defendant that the two simply do not meet.

93 The fifth imputation presents a problem. It is dealt with in par 4.8 of the defence and there is no plea that it is true in substance and in fact. However, the case seems to have proceeded on the basis (see for example T 620) that it, too, was subject to the defence of justification. That is how I will approach the matter.

94 In relation to the final imputation on the list, the defendant admitted that the meaning set out in the statement of claim arose from the words complained of. The defendant did not plead, and nor did I understand him to contend, that it was subject to a defence of truth. Logically it could not have been in the absence of evidence identifying the other persons on the waiting list.

95 Accordingly, there are two imputations that have been found to be defamatory and to which the defence of justification does not extend. It will be necessary to consider whether the defence of justification has been made out in relation to all or any of the other six imputations. Of course the entirety of the publication is said to have occurred on an occasion of qualified privilege. That is a separate defence. I will deal with the defence of justification and then with the qualified privilege question.

96 Before I turn to the substantive defences, it will be convenient to deal with the cause of action against the Company. It proceeds on the basis that the letter was written on the letterhead of the Company and signed by the defendant in his capacity as its managing director. The defence is that the letter was written by the defendant solely in his personal capacity.

"Although the business name Marron Property Group was deregistered several years ago, I continue to use one or two letterheads for personal reasons. It was never intended that the letter was to be written on behalf of [the Company]. I wrote the letter in my own right and as a member of the club. I can see that I have signed my name above the words 'Managing Director' but I did so without the authority of the Company and without at any time intending that my letter be written on behalf of the Company. The use of the words 'Managing Director' when signing correspondence of this kind was done by me as a matter of course to identify my occupation rather than to suggest that I was writing on behalf of my company."

98 Some of that is self serving and expresses conclusions. Nonetheless, its general thrust is clear and acceptable. The reference to "one or two letterheads" goes, I think, to explain how the paper on which the Objection Letter was written contains the ACN of the Company. The defendant said in cross-examination that some of the letterhead had the number on it and some of it did not. The defendant explained that the phrase "Managing Director" was a computer generated block that appeared on his correspondence. He was referred, in his evidence, to other examples where he had written letters to the Club using the same letterhead and signing over the block "Managing Director". One such letter was to advise the Club that he had broken a toe and would not be playing golf for a while. That could hardly be described as company business. It seems to me to support the contention that the use of the letterhead was indiscriminate and did not necessarily signal a communication on behalf of the Company. Evidence was also given of correspondence from the Club to the defendant on matters that could only be described as personal to the defendant but which were addressed to him as the managing director of the Marron Property Group.

99 The question of authority was raised but not pursued with much vigour. The defendant said that he and his wife were the directors of the Company. On some occasions he sought formal authority to act on behalf of the Company and on other occasions he did not. I have no reason to reject the defendant's evidence that on this occasion he was not acting on behalf of the Company and that he did not have its authority to write the letter on its behalf.

100 I am satisfied with the defendant's explanation as to how the writing of the Objection Letter and the use of the Marron Property Group letterhead came about. The cause of action against the Company has not been made out. Accordingly, it is not necessary to go to the alternative defence of qualified privilege arising from some sponsorship arrangements between the Company and the Club.

101 The defendant says that the plaintiff is generally a rude and arrogant person. This, of itself, is unhelpful. However, the defendant goes on to refer to a number of incidents or events which, he says, goes to establish the general description of the plaintiff by that phrase. I will deal with each of them in turn. Before doing so, I wish to make one comment. Counsel for the plaintiff pressed on me the need for slavish and meticulous attention to the way that the defence was pleaded. I indicated at the time that I was minded to take a broader view of the matter and look at the alleged conduct rather than at the minutiae of the pleading. I say, unashamedly, that this is the approach I have taken.

102 King gave evidence that he made a group booking to go to the Racquet Club on 25 April 1992 as part of a work social function. The party went to a restaurant and towards the end of the evening seven men decided to go on to the nightclub. King spoke to the doorman to gain entry. The plaintiff came over while King was talking to the doorman. The plaintiff told King that he would not let a group of men into his club. He refused King's invitation for him to check the group to satisfy himself they were well dressed and not drunk. King said that while he was talking to the plaintiff two groups of women were permitted to enter the club. This exchange occurred during his evidence in chief:

"How did Mr Brown deal with you when you were trying to get into the nightclub?---He was very abrupt. He didn't want to listen to any reason.

What caused you to believe that he didn't want to listen to you? What happened?---Well, he started making accusations about us trying to get into the club under false pretences and things. We had made arrangements earlier in the week and I had spoken to Mr Brown on the telephone and made a booking.

And he made those accusations. What did you do when he made the accusations?---I said - invited him to view the rest of the people that were with me so he could see first hand that his allegations and accusations were unfounded, that we were all neatly dressed and that we were all in a sober condition. He refused to even look at us."

103 King said that he did not want to cause trouble and the group left. He had felt humiliated by the plaintiff's decision and attitude. On 12 May 1992 he lodged a complaint with the Equal Opportunities Commission for sexual discrimination. The plaintiff and Franquin Pty Ltd trading as The Racquet Club were named as respondents.

104 On 20 December 1994 the Tribunal handed down a decision on the complaint and the reasons for decision were adduced in evidence. The Tribunal concluded the complaint had been established. In the course of the reasons for decision the Tribunal had cause to remark that the members "did not regard [the plaintiff] as a credible witness".

105 I see no reason not to accept King's evidence that the plaintiff was abrupt, did not listen to reason, accused him of trying to gain entry by false pretences and refused to make his own assessment of the group's sobriety and state of dress. The findings of sexual discrimination against the plaintiff and the club have been established through the tender of the Tribunal's judgment. However, the finding that the plaintiff was not a credible witness is not something upon which I would act. No doubt the members of the Tribunal felt entirely comfortable with that finding. But I was not there and in any event the proceedings before the Tribunal were of a different character from the cause that I have had to try.

106 The plaintiff's son, Craig Brown, and an acquaintance, John Quilty owned a block of land in North Fremantle. It was the subject of a "purple title" in a housing development constructed according to that type of ownership. They intended to construct a strata title unit development on the part of the site to which their title related. The plaintiff, who had expertise in strata title developments that the owners did not have, was to do most of the work to obtain the strata titles. A meeting of nearby residents was held to explain the development as it would affect the other titles. Sarah Woolett, a resident, attended the meeting. Her evidence was that the plaintiff told those present that he could apply for a sale by auction of the whole of the land or they could apply to the court for an order for the land to be sold by auction unless one or more of the co-owners undertook to purchase their shares. Woolett said that she felt shaken and was in disbelief at what the plaintiff had said during the meeting. After the meeting further discussions were held with individual residents. There was disagreement among the residents as to whether, and if so how, to proceed. Negotiations went on over a period of about six months.

107 In April 1989 the plaintiff had the land surveyed. There was a fence between lot 1 (the lot owned by Brown and Quilty) and the adjoining lot 2. A question arose as to whether the fence was on the boundary line or whether it encroached onto lot 1. Over a period of about six months the plaintiff negotiated with the owner of lot 2 to remove the fence but to no avail. The plaintiff says that in December 1989 he intended to make a development application to the Council. Before doing so he thought the site should be cleared of rubbish and shrubs. He, his son and Quilty arranged for a bobcat to be taken to site to do the clearing work

108 Woolett testified that on 4 December 1989 the plaintiff arrived at the site without warning and started clearing work. The fence was knocked down and left on the ground. Some of the residents (including her) re-erected the fence.

109 On 6 December 1989 the Fremantle Council wrote to Quilty and Brown saying it had come to their attention that the owners had commenced development on the property without first obtaining the consent of Council. The letter went on to say that the matter was viewed seriously and that the owners should not proceed until all approvals had been obtained.

110 Woolett also testified that on 3 January 1990 the plaintiff, his son and Quilty returned to the site and demolished the fence again. This time the remains of the fence were loaded on a truck and removed. Woolett says that she physically placed herself in front of the bobcat in an attempt to stop the demolition. At one stage she had to jump clear of the bobcat to avoid injury. She asked the plaintiff to stop the work but he ignored her. Police were called but declined to intervene.

111 On 10 January 1990 the residents took out a restraining order against the plaintiff, his son and Quilty. A certified copy of the restraining order went into evidence. It prohibits the plaintiff, his son and Quilty from entering or interfering with the applicant's quiet enjoyment of the portion of the property in dispute between the parties. They then gave a written undertaking in the same terms as the restraining order. The order then lapsed. In his evidence Brown said that in 1992, when further attempts to negotiate an arrangement with the owners failed, they sold the site.

112 Peter Webb is a planning consultant who does, or did, a lot of work with and for the plaintiff. He attended the meeting of residents about which Woolett spoke. He did not consider that the plaintiff was rude or inappropriate in the way he conducted the meeting or presented the proposal. He did, however, present it "in a direct and determined way". Webb says, although he was not the author of the survey diagram, that the disputed fence was about two metres inside the boundary of lot 1.

113 On 5 January 1990 the plaintiff wrote to the Council complaining about the activities of the co-owners but not referring to the letter of 6 December 1989. On 8 January 1990 the Council wrote to Brown and Quilty again. They referred to the letter of 6 December and to the fact that the fence had been demolished and removed again on 3 January 1990. Council asserted that the fence was a structure and its demolition required planning consent. In cross-examination the plaintiff acknowledged having seen both letters from the Council. He said that he did not think the first letter (6 December 1989) was in relation to the demolition of the fence. I found this explanation difficult to follow and I do not accept it.

114 I accept Woolett's testimony as to what occurred at the resident's meeting and as to the events of 4 December 1989 and 3 January 1990. I also find that the demolition of the fence was an unlawful act. The demolition of a structure is included within the definition of "development" in the Town Planning and Development Act 1928 (WA). The City of Fremantle Town Planning Scheme No 3 (which applied at the time) imports the statutory definition of "development". A fence is a "structure". It is contrary to the Scheme to commence development without approval. No approval was obtained. The plaintiff was therefore a party to an unlawful act in demolishing the fence, on two occasions. His explanation that he was unaware of the requirements, at least on the second occasion, is disingenuous.

115 The plaintiff may well have thought he had right on his side in the property dispute. The fence may have been 2.26 metres inside the boundary and it may have been impeding development. But that is not the point. The plaintiff conducted a residents meeting in a way that placed before them a proposal in a "direct and determined manner", terminology which, in my view, makes it not surprising that at least one of the residents was left "shaken and disbelieving". His conduct in demolishing the fence twice bordered on being brazen. The use of the bobcat when a resident was physically trying to prevent the work was unwise. His conduct was such as to cause a Magistrate to conclude, at least on prima facie grounds, that a restraining order ought to issue.

116 It is convenient to deal with the allegations in par 4.2(e) and (f) of the defence together. They relate to an alleged assault by the plaintiff on the defendant and to the unauthorised removal by the plaintiff of documents from the defendant's office.

117 In the mid 1970's the defendant had an office at 91 Hay Street Subiaco. It was a two-storey building. It was owned jointly by the defendant and an entity called M & M Nominees Pty Ltd. The defendant occupied the first floor and M & M operated from the ground floor. They had agreed to convert the building to strata title ownership on the expiration of a mortgage that existed at the time. M & M agreed to sell its interest in the building and its occupancy rights to the plaintiff and Brajkovich. At some time between September and November 1996 the plaintiff and Brajkovich moved in to the ground floor offices.

118 The defendant testified that he attended a meeting with the plaintiff, Brajkovich and representatives of M & M, at a solicitor's office. He told them he would only consent to the deal if he held all relevant documents, including the application for registration of the strata plan, the transfer of land and the discharge of mortgage. He says that in November 1996 after the plaintiff had moved into the building the plaintiff asked him for the documents. The defendant described the plaintiff's request as forceful, short and abrupt. The defendant refused the request. He says that the next day the plaintiff and another man stopped him in the building foyer and demanded the documents. The plaintiff pushed him and the other man made a physical threat. The defendant reported the incident to the police. There is no evidence that the police took any action.

119 According to the defendant, about a week later Susan Westlake, his secretary, reported to the defendant an incident that had occurred and which involved the plaintiff. Westlake gave evidence. She had commenced working for the defendant in 1996 (she could not recall the month) and she thought the plaintiff moved into the building a couple of months after that. She thought the incident occurred shortly after the plaintiff moved in. One day, when the defendant was not in the office, the plaintiff arrived and said he was going to pick up some documents. The plaintiff walked briskly past her into the defendant's office. She thought he had the defendant's authority to take the material. The plaintiff went to the defendant's office , took some papers and left. When the defendant returned she told him about the incident. He appeared to be very concerned. Later the police attended at the office but she could not recall what they did.

120 The defendant told me that after Westlake had reported the incident to him he went to the plaintiff's office and demanded return of the documents. The plaintiff had refused. He reported the matter to the police. In his evidence the plaintiff simply denied that either incident had taken place. He said that he had never been questioned by police about any such alleged incident.

121 Westlake was cross-examined on the basis that it was not the plaintiff who had entered the office that day. She said that although she had not been formally introduced to the plaintiff she had seen him around the building and had known him to be Mr Brown. She was also questioned about her contact with the defendant concerning the preparation of her witness statement. I have taken all of that into account. The plaintiff called evidence from Jan Kulynyncz. She was his secretary from July 1976. Her evidence went only to the date on which the plaintiff's business moved to the Hay Street premises. I do not think it had any impact on the reliability of Westlake's testimony. I have no hesitation in accepting Westlake's evidence. I do not accept the plaintiff's evidence on this point.

122 In relation to the alleged assault, this is one instance where I have to decide as between the plaintiff and the defendant because there is little, if any, independent evidence to go on. The alleged assault is closely connected to the difference of opinion between the parties as to who should have custody of the documents associated with the plan to convert the building to strata titles. I have found that the plaintiff did remove the documents from the defendant's office and that he had no authority to do so. From this I can draw an inference that the plaintiff was determined to obtain them. This provides some, albeit flimsy, support for the defendant's version of this incident. The plaintiff could not be held responsible for any threat made by his associate. The "assault" committed by the plaintiff was a minor one. It was described by the defendant as a push and it did not excite the attention of the police despite the fact that it was reported. I find, therefore, that the plaintiff assaulted the defendant in the foyer of the building but that it was not a violent incident.

123 The defendant said, and I accept, that after this incident things were tense between them. They seldom saw or spoke to one another. About 12 months later the plaintiff and Brajkovich left the building. After that he only saw the plaintiff a few times and when he did he "kept his distance". From time to time he heard about the plaintiff's business activities on the grapevine.

124 The first allegation in par 4.2(g) of the defence is that the plaintiff complained to the Real Estate Institute of Western Australia (Inc) and the Land Agents Supervisory Board about the conduct of Richard Adams, an estate agent, in relation to the sale of the block of flats in South Perth to the defendant when there were no grounds for the complaint.

125 The defendant testified that in 1975 he saw a newspaper advertisement placed by Richard Adam and Associates for the sale of the flats. In fact the advertisement is dated 11 November 1976. He telephoned Adams and obtained details. Later that morning he telephoned Adams and said that he was prepared to purchase the flats at the advertised price. He went to Adams' office and they prepared an offer and acceptance document. The purchaser was a company controlled by the defendant. Adams later telephoned the defendant and told him the vendor had accepted the offer. He also told the defendant that details of the flats had been given to the plaintiff and Brajkovich and that they wanted to acquire the property. However, he (Adams) had told the plaintiff the property had been sold. Later, the plaintiff telephoned him and said "we want the bloody flats". The defendant replied that his offer had been accepted and he would not be pulling out. The plaintiff had said: "We are going to make things tough for Adams if you don't pull out". I should add that in his evidence the plaintiff denied that he had telephoned the defendant as alleged.

126 I have seen the newspaper advertisement. The asking price is $110,000. I have also seen a copy of the transfer of land document. It shows the consideration as $102,500. The defendant was cross-examined on the basis that he had not offered the full asking price. His explanation was that the full consideration was $110,000 and that $7,500 had been allocated to chattels. Adams gave the same explanation. I accept that explanation.

127 It is common ground that the plaintiff lodged a complaint with the authorities about Adams' conduct. The defendant said that he was not aware of the nature of the complaint, although he thought the plaintiff "was suggesting that Richard Adams and myself had got together and done some sort of a deal behind his back, which was simply not the case".

128 During cross-examination Adams said that he was at home at about 7.30am when he received a call from the defendant expressing interest. At about 8.30am, after he arrived at his office, he received a telephone call from the plaintiff also expressing interest. During the morning the defendant attended at his office and they wrote up an offer for the full price. Later in the morning the plaintiff came to his office and also made an offer for the full price. At about 11.30am that morning Adams presented both offers to the vendor.

129 This evidence is in marked contrast to his evidence-in-chief. He had made no mention of the times of the telephone calls and nor did he mention having written up an offer for the plaintiff. In fact, he said that when he presented the defendant's offer he told the vendor there was another group interested. He told the vendor that the defendant was looking for a long term investment but the other group would probably convert the flats to strata title and sell them off. In his evidence-in-chief he also said that the plaintiff telephoned again later in the day and said he wanted to put in an offer. Adams told him it had been sold for the full price. The plaintiff said he would offer more and asked who the purchaser was. When Adams mentioned the defendant's name the plaintiff became quite aggressive. Adams, the plaintiff and Brajkovich went to the vendor's home and the media attended "for a story". The evidence that the plaintiff telephoned Adams expressing a wish to put in an offer after the vendor had accepted the defendant's offer simply does not accord with the cross-examination.

130 Adams said that the next day he went to the plaintiff's office to try and resolve the matter. The plaintiff said to him "that's what you get for crossing us". Later on the plaintiff lodged a complaint with the authorities. The Land Agents Supervisory Committee wrote to Adams seeking an explanation. Adams said that he provided an explanation and heard no more about the matter.

131 It is apparent from the cross-examination of the defendant and Adams and from the plaintiff's evidence that the essence of the plaintiff's complaint to the Board was that his offer had not been presented to the vendors. In their evidence Adams and the defendant agreed that it would be professional misconduct if an agent, having received two offers at the full asking price, presented only one of the offers to the vendor for decision.

132 I am worried about the state of the evidence on this issue. It must be borne in mind that Adams was recalling an incident that occurred almost a quarter of a century before trial. It is therefore not surprising that there should be discrepancies. But the differences to which I have referred go to a critical issue on this particular aspect of the litigation. The allegation is that the plaintiff made a complaint to a regulatory authority which was unfounded. It is common ground that if Adams had failed to present the plaintiff's offer, the complaint would have been justified. Twenty five years later, the plaintiff could not locate a copy of the complaint, Adams could not locate a copy of his response to the Board, the vendors were not called and the Board did not have records prior to 1 December 1979.

133 When pressed Adams was very firm in his evidence that he had presented both offers. But he conceded that his statement of evidence, which he signed on 3 April 1999, had been presented to him by the defendant . He had discussed it with the defendant on a couple of occasions before the statement was signed. The defendant "might have prompted [his] memory". When he was asked about the discrepancies, this exchange occurred:

"That's something that has come to you in the last, when, day, is it?---I have sort of given less thought of my business and I have given full consideration on this.

It's something you have just remembered you discussed with them, the merits of a written offer by Mr Brown?---I have given this absolute - a lot of consideration the last few days, reading through it, and the last 2 or 3 nights it has all started to come back to me."

134 It is not my role to decide whether Adams was guilty of some form of professional misconduct. But the defendant bears the onus of establishing, on the balance of probabilities, that the plaintiff lodged a complaint that was groundless. I have no doubt that Adams gave his evidence in a conscientious fashion and to the best of his recollection and ability. However, in the absence of other supporting evidence and given the discrepancies between his statement of evidence and what he said in cross-examination, I am left in some doubt as to the reliability of his recollection.

135 In saying this I am not casting any aspersions on Adams' character or professional integrity. Nothing I have said should be taken as an indication that I have found, or even think, that Adams acted unprofessionally or unethically. It is an unfortunate fact that in litigation of this nature innocent third parties can be hurt by being dragged in to a dispute that does not really concern them.

136 I find against the defendant on this particular issue.

137 The other allegation in par 4.2(g) of the defence is that the plaintiff acted improperly in approaching a vendor of a property knowing that the vendor was a client of another agent, John Martin. There are two men with the surname Martin who gave evidence. Accordingly, I will refer to this man by his full name.

138 I can dispose of this matter quickly. In his evidence in chief (he was called by the defendant), John Martin said:

"Can you tell us about a particular matter that arose between you?---Yes. I think it's probably trivial but in those days we were all chasing listings. We listed a property, and I think it was Doonan Road. We put a sign on it. Michael then somehow took somebody through the property. I rang him.

How do you know he did that?---Somehow it got back to us. I rang Michael and said, "That's not what should happen from a lecturer." He said, "Hold on a minute. I'll come down." He came down. We had a discussion. He brought three Coca- Colas. We sat down - my partner, myself and Michael. We discussed the subject. We were happy with his explanation and I think that was the end of it.

What was his explanation?---I don't think I remember at this stage. Our query to him was there was a sign on the property. In those days things were a lot more regimented. They aren't like that today but that's - I think it was just why he went behind the sign.

Did you tell him what you thought he should have done?---Probably. I was that - attitude. I probably did, yes, but I can't remember what it was.

And did he deny that he had done anything wrong or did he acknowledge that he had done something wrong. What did he say to you in response to your complaint to him?---I think we just came to a mutual agreement that there was - you know, there's lots of grey areas in real estate and in this case we left quite amicably. He left quite amicably."

139 This incident would not justify a finding either that the plaintiff was rude and arrogant or that he acted unethically as a real estate agent.

140 I could not find any reference in the pleadings to an incident between the plaintiff and John Malloch but evidence was led about it and it is convenient to deal with it here.

141 Malloch was an estate agent. He testified that he had a listing to sell a unit in Shenton Road, Claremont. The plaintiff approached him asking if they could do a conjunctional sale. The agency period expired before the property was sold. Later on he received some information that caused him to contact the plaintiff. The plaintiff told him that a week after the agency had expired the property had been advertised privately. Malloch told the plaintiff he considered that he was entitled to a commission. The plaintiff said that he was under no obligation to pay Malloch any fees. Malloch said that he made a report about the plaintiff's conduct to the Real Estate Institute and the Ministry of Fair Trading.

142 The evidence reveals that on 6 March 1993 Malloch's firm advertised the unit for sale at $103,000 and that on 20 March 1993 it was advertised privately for sale at $97,000. Brown conceded that he had approached Malloch about a conjunctional deal and that Malloch had agreed . He also said that he and his son had been shown through the property by the salesperson from Malloch's office during the period of the agency. However, he said he and his son decided not to buy the unit. Later, he saw the advertisement for a private sale. The price had been reduced by $6,000 and his son bought it. He denied that there was anything untoward in that transaction.

143 Evidence was given by officers of the Real Estate Institute and the Land Agents Supervisory Board. Their records did go back as far as 1993. Neither of them had a record of a complaint by Malloch against the plaintiff or indeed of any complaint against the plaintiff. An officer of the Ministry of Fair Trading gave evidence but it was more in relation to the pyramid selling scheme. In any event, there was no evidence of a real estate related complaint on this or any other matter to the Ministry against the plaintiff.

144 I would need to know considerably more about the circumstances in which the transaction occurred before I could conclude that the purchase of the Shenton Road unit involved unethical conduct or conduct that was rude and arrogant. Again, I find against the defendant on this point.

145 The last matter pleaded in support of the defence of justification that the plaintiff was rude and arrogant is an incident involving Paul Summers. It is pleaded that in 1996, at Coco's Restaurant in South Perth the plaintiff, without notice or any need to do so, told Summers that the plaintiff had caused his wife to go into partnership with Summers' former wife in a fashion agency business with the purpose of bringing down a business owned by Summers' mother. Apparently, the plaintiff's wife had been employed by Summers' mother and the plaintiff felt she had been underpaid. It is pleaded that, at the time, the plaintiff knew that Summers' mother had cancer and he made the statement to get revenge.

146 Summers is a practising lawyer. In his evidence-in-chief he said that Mrs Brown had worked for his mother for about five years. He understood that she left to have a child and that she had departed on good terms. In 1996 he was at Coco's having lunch with a client. The plaintiff came, uninvited, and sat next to him. The plaintiff told Summers that Mrs Brown and his (Summers') former wife (who had also been employed in Mrs Summers' business) had commenced a fashion agency business (which I will call "the new business"). The sole purpose for getting his wife involved in the new business was to bring down Mrs Summers. He said that his wife had offered to acquire Mrs Summers' business but because of her illness she had refused. The plaintiff said that Mrs Summers was finished in business and that the new business was "going after all her labels". He also said that Mrs Summers had not been a fair employer and had not remunerated her adequately. He concluded by saying that even though it was his intention to bring Mrs Summers down, "at the end of the day it was only business". Summers said that the plaintiff did not appear to be affected by alcohol at the time. He (Summers) was very upset by the incident. Apart from one occasion (to which I will come shortly) he has not spoken to the plaintiff since that time.

147 In his evidence the plaintiff denied that he was aware that Mrs Summers had cancer. He said he received reports that Summers had been making allegations about the new business. He saw Summers at the restaurant and went over to the table. He said, "I just want a word with you". He then said something along these lines. "Listen, I know you've been badmouthing the girls and it's not on". Summers said he did not recall that having been said. "If you want to say something say it to me. I don't want to hear any more rubbish out of you". Summers denied that had been said. "Rose gave Nina a lot of years. There are always promises which never happen, for example, the bonus issue and bringing Rose into the business. Nina's biggest mistake was letting Steph and Rose go". Summers agreed that all of that had been said. "Nina" is Mrs Summers, "Rose" is the plaintiff's wife and "Steph" is Summers' former wife. The plaintiff described it as a "short, cordial and brief conversation at the end of lunch" and said that Summers had not appeared to have been upset by it.

148 Evidence was given of a second incident between the plaintiff and Summers at Coco's Restaurant. It occurred in July 1998. The plaintiff and his wife arrived at the restaurant with friends at about 1.30pm and stayed for lunch and for dinner, leaving at about 11.00pm. [It seems that the habits of the 1980's are not entirely dead and buried!]. It is clear from the evidence that Summers approached the plaintiff, either at his table or on a balcony. A physical altercation occurred between Summers and the plaintiff. Both men were restrained. I heard differing accounts from Summers and the plaintiff as to what precipitated the problem. It may be that Mrs Brown had spoken to Summers earlier in the day but there is no evidence that the plaintiff had done so.

149 I heard evidence from John Farrell. He said that he had gone to the restaurant to have lunch with Summers. During lunch Summers had been complaining to him about the plaintiff. It involved the business affairs of the plaintiff's wife and Summers' mother. Farrell believed that Summers was affected by alcohol at the time. At around 7.00pm Farrell was on a verandah talking to the plaintiff and his wife. Summers approached them. He was intoxicated and aggressive. He yelled at the plaintiff. The plaintiff told him to go away and they would discuss it at another time. Summers threw a punch at the plaintiff and the plaintiff retaliated. The two men were restrained and Summers left. Farrell conceded that he had been consuming alcohol over "a 5 hour lunch" but said that he had a "moderately good recollection" of the incident.

150 I have no reason not to accept Farrell's version of this incident. It shows that Summers had a depth of ill-feeling towards the plaintiff. However, it does not cause me to disbelieve Summers' account of the first incident. If anything it tends to indicate just how seriously Summers viewed the plaintiff's conduct in raising the matter with him in the way that he did.

151 I have found that, in relation to the Daniel King, a regulatory authority found that the plaintiff acted in a way that was discriminatory on sexual grounds. I have also found that the plaintiff conducted himself towards King in a way that was abrupt. He did not want to listen to reason and made accusations that were unwarranted.

152 On the North Fremantle incident, the plaintiff's conduct appears to me to have been lacking in tact and without demonstrating a proper appreciation for the rights of others.

153 I have found the assault allegation to have been established. Even though it was not a violent incident it is evidence that might be described as going some way towards indicating rudeness and arrogance. The removal of documents from the defendant's office without his authority and a refusal to return them has also been established.

154 In this section I do not take into account any conduct of the plaintiff in relation to the South Perth flats, going behind John Martin's sign or his contretemps with John Malloch.

155 I find that the first incident between the plaintiff and Summers occurred in the way that Summers described it. It was, to my mind, an unnecessary and provocative act and it upset Summers. I have not taken the second restaurant incident into account in any way that is adverse to the plaintiff.

156 What, then, am I to make of all of this? I am required to look at a series of incidents, not particularly large in number, that occurred from time to time between about 1975 and about 1996 and say that they justify the statement that the plaintiff's manner is "rude and arrogant". It is, to resort to the vernacular, a tough call to label a person in that way. I have taken into account what could loosely be termed evidence of good character and business reputation led on behalf of the plaintiff, particularly from Peter Webb and Kevin Judge. However, the way that the plaintiff dealt with the King incident, his handling of the North Fremantle residents, the demolition of the fence (especially the second time), the minor assault, the removal of the documents and his approach to Summers could reasonably be described as "rude and arrogant".

157 In this limited sense, I find that the defendant has justified the imputation that the plaintiff was a rude and arrogant person.

Justification - An Unethical Real Estate Agent

158 At the end of his cross-examination I asked the defendant to specify the incidents on which he relied for the statement that the plaintiff operated in an unethical manner in relation to real estate dealings. He said there were five: the South Perth flats, the assault and the removal of the documents, the John Martin incident, the John Malloch incident and the North Fremantle incident. This, it seems to me, extends the argument beyond what is pleaded in par 4.3 of the defence. Nonetheless, I will approach it on this basis.

159 It will be apparent from what I have already said that the defendant cannot succeed in relation to the South Perth flats, the John Martin incident or the John Malloch incident. It will also be apparent from what I have said that I take a dim view of the plaintiff's conduct in relation to the North Fremantle incident. However, there is no evidence that the plaintiff was acting in any way as a real estate agent in that regard. It was a property development undertaken by his son and an acquaintance in which he was involved. The work that he undertook was real estate related but I think this is different to activities as an agent. I think a similar comment applies to the unauthorised removal of the documents from the defendant's office.

160 I should deal at this stage with the statement in the Objection Letter that "most in the industry were cautious about dealing with [the plaintiff] because of the unethical manner in which he operated". There is a long cross-examination on this issue between pages 273 and 289 of the transcript and I will not set it out or describe it in detail. It is sufficient for me to say that the gravamen of it was this. The defendant was aware of the John Martin incident and he was involved in the South Perth flats incident. He attended Real Estate Institute meetings and sundowners. The South Perth flats incident was notorious because of the media coverage at the time. He could recall it being the topic of discussion at a sundowner or sundowners at which a group or groups of real estate agents had been present. There was a "general feeling" that the plaintiff had acted unethically in the South Perth incident. At one stage in his cross-examination he said that four agents had told him they were cautious about dealing with the plaintiff. As the cross-examination wound its laborious way on, he resiled from that number and said he could not give a specific number and nor could he recall names. He was able to say that at about the time when the plaintiff applied for membership of the Club two Club members who were real estate agents mentioned the South Perth flats incident. I am not sure that is particularly helpful.

161 I realise that it is particularly difficult for anyone to transport themselves back two or three decades and recall specific conversations. However, it is a serious allegation to make about a person that he or she is unethical. Somewhat strangely I thought, the defendant was reluctant to concede that the allegation was serious (see T 289). He was adamant that he believed it to be true but was not prepared to comment on the level of seriousness of the claim. The facts, if they be the case, that the South Perth flats incident was notorious and that people knew of the John Martin incident would not be a sufficient basis for me to conclude there was a "general feeling" that the plaintiff acted unethically. Nor is there a sufficient basis on which to conclude that during the 1970's most in the industry were cautious about dealing with the plaintiff.

162 The imputation that the plaintiff was an unethical real estate agent has not been justified.

Justification - Associating With Undesirable People

163 I have said that the defendant cannot gain solace from par 4.4 of the defence because the meaning he seeks to justify is not the meaning that arises from the words complained of.

164 In any event, I doubt that it would have been made out on the evidence. So far as I could see, the defendant was not asked in specific terms to name the people with whom the plaintiff associated and who were not fit and proper persons to be members of the Club. In cross-examination he was asked what he intended to convey by including that reference in the Objection Letter. He said: "I thought there were one or two people that Michael was involved with that I wouldn't really like to see at the club".

165 Reference was made to Brajkovich. The allegation in the Objection Letter is that Brajkovich had been warned off all race tracks in the State. The defendant said he had read a couple of newspaper articles in which it was reported that Brajkovich had been involved with positive swabs from horses. He had refused to go before the Stewards and had been warned off. The defendant said that this allegation concerned the plaintiff because Brajkovich and the plaintiff were partners in the real estate business and in some nightclubs. The newspaper articles that were produced in evidence did not refer to Brajkovich having been warned off race courses. In any event, they could not have been used to prove the truth of what was in them. The records of the Western Australian Turf Club did not reveal any warning off of George Brajkovich. Nor were there any records of a Stewards inquiry involving Brajkovich and relating to a positive swab of a horse. The incident is alleged to have occurred about 19 years ago. The officer from the Turf Club said that records would not have been retained unless there was an appeal and even then it is doubtful whether the records would have been kept for such a long period of time. I think I could have found that the plaintiff "associated" with Brajkovich but I could not have found he was not a fit and proper person to be a member of the Club.

166 Mention was also made of Clifford. But he is already a member of the Club. The Objection Letter also refers to Robert Martin. However, the defendant said he considered Martin would be a good member of the Club. He had not thought about it at the time he wrote the Objection Letter but had he done so he would probably have been of that opinion then. I have already mentioned the way in which the name "Nichevich" came to be included in the Objection Letter. The defendant gave evidence to support his assertion that the plaintiff and Nichevich were friends but there was no evidence on which I could possibly find that Nichevich was not a fit and proper person to be a member of the Club. There was nothing to tie the plaintiff in with the mysterious Mr Starcevich. Nothing that I have said or, I would hope, what the defendant has said or written should be taken as reflecting on the character of Mr Nichevich or Mr Starcevich.

167 It could not be argued that the mere fact that the plaintiff was involved in nightclub businesses (or for that matter the real estate industry) would of itself bring him into association with people the Club would not want within its hallowed walls. The eleventh paragraph in the Objection Letter, dealing with other members who had been gaoled, was subject to the qualifications I have mentioned and I do not think it was intended to advance this particular aspect of the case. Nor, I think, could the defendant have succeeded on the bald statement that the plaintiff associated with people who were engaged in pyramid selling. If that case were to be run it would have required explicit particularisation.

Justification - Being Hard on Creditors and Partners

168 In accordance with the findings I have made, the issue of the plaintiff's bankruptcy arrangement is relevant only as part of the background against which to consider the imputation pleaded in pars 4.6 and 4.7 of the defence, namely that the plaintiff was hard on his creditors and on a former partner.

169 In 1981 the plaintiff, along with Robert Martin (who, in this section, I will call "Martin") and Steven Mailey, was involved in a joint venture development to develop an area in Colin Street, West Perth. The development involved strata-titled offices, shops and residences. The plaintiff was responsible for the project construction. Martin arranged the finance through Elders Lensworth. Mailey was responsible for sales. The plaintiff testified that there was an oral agreement that the three of them would contribute, in equal shares, funds that were needed after the borrowings. As it turned out substantial personal contributions were required.

170 The plaintiff said that he contributed personal funds to satisfy progress claims but neither Martin nor Mailey did so to any substantial extent. He says that after about eight months of making these contributions he could no longer afford to continue, having sold his house, a boat and a car to do so. Martin commenced to negotiate an arrangement with Elders Lensworth to compromise the debt. The plaintiff did not wish to be party to the compromise because it meant an ongoing liability. He testified that it was in fact Elders that suggested he enter a Part X arrangement. The financier told him they would then make whatever arrangements they wanted to with Martin. He took advice from his accountants and an arrangement was proposed. At the meeting of creditors no person objected to the terms of the Part X arrangement.

171 The plaintiff testified that he borrowed $12,000 from friends and that was his entire contribution to the Part X arrangements. Creditors having debts with a face value of $2,000,000 therefore received about one-tenth of one cent in the dollar in full satisfaction of their debts. It is important to recognise that the plaintiff was not cross-examined on any of this evidence. It must therefore be accepted. When the plaintiff was asked to agree that the result was hard on creditors he said: "No, I wouldn't, under the circumstances ... under the particular circumstances of that particular Part X, no, it wasn't". I take that to be a reference to the fact that he had put his own funds into the project at an earlier time.

172 Martin gave evidence. He confirmed that he and the plaintiff "were jointly doing property developments". The Colin Street development was one of them. He confirmed that he, Mailey and the plaintiff were equally responsible for the development. They were to share profits equally but as with all ventures of the 1980's nobody contemplated making losses. The venture was arranged through corporate entities and personal guarantees were given. Martin said that when the plaintiff and Mailey went into Part X arrangements he "settled off with the financiers" and continued making payments. He did not himself enter a Part X arrangement. This exchange occurred:

"How did that leave you financially?---I think the situation was fairly difficult, but because I had entered into a financial settlement with Lensworth, the financiers at the time, it enabled me to proceed with other business interests I had, which improved significantly after that."

173 Martin was not asked any questions about the plaintiff's contributions to the venture before the financiers moved in.

174 On the surface, a payment of one-tenth of one cent in the dollar to creditors could only be described as "hard" on the creditors. However, it has to be taken in context. The unchallenged evidence of the plaintiff is that he put excess contributions into the venture as it went along. That may or may not have been a good thing. It might have prolonged the life of the venture and increased the exposure of creditors. On the other hand it may have reduced the total indebtedness owing to third party creditors at the time when the venture folded. All of that is speculation. The point is that the defendant raised the issue by way of justification and he bears the onus of proof. There was simply insufficient evidence led for me to make an assessment whether the plaintiff's decision to seek the protection of Part X was "hard" on his creditors. I could only determine that in the entire context of the Colin Street development and by examining in detail the financial arrangements between the developers inter se and between the developers and their external creditors. Thankfully, I was not called on to do so.

175 Counsel for the plaintiff submitted that there was no evidence that Martin and the plaintiff were partners and for that reason alone the imputation that he had been hard on a former partner could not be made out. Clearly they were not "partners" in the sense that this term is known to the law. But I reject the plaintiff's submission. The ordinary reasonable reader would regard these two individual business persons acting through private corporate entities and jointly engaged in the Colin Street development as "partners". This is, in my view, well and truly within the bounds of the capacity of the ordinary reasonable reader to engage in "a certain amount of loose thinking": Morgan per Lord Reid at 1245.

176 That having been said I am still concerned at the state of the evidence. The defendant took on a huge task in shouldering the responsibility to prove the truth of so many allegations. Some of them, this one included did not involve him, even peripherally, and they happened a long time ago. It was almost inevitable that there would be difficulties of proof. That is how it has turned out. One example was the attempt to adduce, in admissible form, evidence that because of the rights of contribution and indemnity between guarantors, Martin would have been one of the plaintiff's creditors. If it be the case that the plaintiff injected excess contributions into the joint venture over and above those that Martin had agreed to contribute but did not, then it may not have been "hard" on Martin for the plaintiff to have left him at the mercy of the financier. At the risk of repeating myself, the plaintiff's evidence in that respect was not challenged. All Martin said was that the situation was difficult, but because he had entered into a financial settlement with the financiers he was able to proceed with other business interests and the situation improved. That may reflect Martin's tenacity or it may be because he was not unduly affected by whatever decision the plaintiff took. I am not able to say.

177 I am not satisfied that the defendant has justified the meanings contended for in pars 4.6 and 4.7 of the defence.

Justification - The Overcrowding Conviction

178 This is the subject of par 4.8 of the defence. As I have already said, I am reading into the pleading a plea of justification that the plaintiff had a conviction for overcrowding at the Racquet Club.

179 The evidence includes certified copies of two complaints dated 20 August 1990 alleging that on 13 July 1990 and 29 July 1990 Franquin Pty Ltd trading as The Racquet Club contravened the Health (Public Buildings) Regulations 1972 by failing to ensure that the number of persons in the building did not exceed the maximum number permitted. On 10 January 1991 pleas of guilty were entered and the defendant was fined a total of $1750.

180 The records of the office of Racing, Gaming and Liquor indicate that the licensee of the Racquet Club was Franquin Pty Ltd from 13 July 1988 to 3 July 1992 and Ivory Investments Pty Ltd from 3 July 1992 to 24 May 1994. The plaintiff was a director of Franquin and Kim Morrison was a director and the secretary. The plaintiff testified that he and Morrison were jointly developing a nightclub business, with the Racquet Club and another one called the Hip-E Club. In October 1991 the plaintiff and Morrison did a "swap" by virtue of which the plaintiff took over Morrison's shares in Franquin and thereby took control of the Racquet Club and he ceded his shares and control of the Hip-E Club to Morrison. In July 1992 Franquin Pty Ltd sold the business and assets of the Racquet Club to Ivory Investments Pty Ltd, another company which the plaintiff controlled.

181 The plaintiff's evidence, and again this was not challenged, was that from 1988 until October 1991 a firm called Boss Entertainment managed the Racquet Club entirely. He said that Boss Entertainment was controlled by Robert Maher and John Anderson. They managed the club entirely: "they staffed it, stocked it, ran it, did the books, everything". Morrison gave evidence but was not asked any questions on that issue. Maher was not called to give evidence.

182 It is not true in fact that the plaintiff had a conviction for overcrowding. Is it true in substance? At the time of the convictions the plaintiff was one of two directors of the company that owned the Racquet Club and, presumably through corporate entities, was a part owner. He was not the manager of the club. We still have, in Australia, the legal theory (some would say a fiction) that a company is a separate legal entity. Looking at the circumstances of this case I do not think it can be said to be true, in substance, that a person who is no more than a director and indirect shareholder of a private company has sustained a conviction because the company had been found guilty of an offence. In case I should be accused of schizophrenic reasoning, this is a different situation from the one I was considering in relation to the Colin Street development. There, the liabilities arise because the individuals were involved as co-guarantors. In that sense, the reader would look through the corporate entities and apply the general description "partner" to the relationship. But this is different. The involvement of the individual is not as direct.

183 The allegation in par 4.8 has not been justified.

Justification - Failure to Control the Bouncer

184 By July 1993 the plaintiff was (indirectly) the sole owner of the Racquet Club and his interests, rather than Boss Entertainment, were in management control.

185 The plaintiff's evidence was that he was present at the Racquet Club on the night of the incident involving a girl to whom I will refer as "BH". He was outside talking to Liquor and Gaming police officers. His security people told him that BH had been removed from the club for bad behaviour. She had been inside the club but had been asked to leave. He played no part in the incident at all.

186 On 5 August 1993 BH wrote to the plaintiff saying, among other things:

"While a friend and I were waiting to go upstairs to meet some friends, the bouncer standing at the stairs told me that I could not go upstairs because I was too ugly. ... The bouncer then motioned to two bouncers behind us and they came over and started punching up my friend, while dragging him out. The other bouncer pushed me out of the front door to the Racquet Club."

187 BH asked for a formal apology along with an explanation of the policies that are in force at the club. On 12 August 1993 the plaintiff responded asking for a description of the security staff to whom the writer had referred. On 15 August 1993 a newspaper published an article giving details of BH's complaint. The article contained a quote attributed to the plaintiff in which he is reported to have said that he took the complaint seriously and that the club did not distinguish customers on the basis of looks. However, he would expect the complainant to come in and identify the person to whom she had referred. A television channel broadcast a story on BH's allegations. The plaintiff and Ivory Investments commenced proceedings against BH and against the newspaper and the television station. It is not clear what, if anything happened to the action against BH. The proceedings against the newspaper and the television station were settled on a confidential basis. There is no evidence that BH complained to any regulatory authority about her treatment.

188 The first limb of the defendant's allegation, which he seeks to justify, is that a bouncer employed by a nightclub refused entry to BH for the stated reason that she was too ugly.

189 The simple fact is that there is no admissible evidence to that effect. The fact that a person, who is not a party to the proceedings and who was not called as a witness, wrote a letter containing the allegation, is not evidence of the truth of what the letter contains. Nor is the fact that the allegation was reported by a newspaper or a television station. There was no admission made by the plaintiff either in his comments as reported in the newspaper or his response to BH or his evidence, that the bouncer told BH she was ugly or refused her admission on that basis.

190 The meaning contended for by the defendant has not been justified.

191 The critical question posed by pars 4.10 and 4.11 is whether, and if so to what extent, the plaintiff was involved in a pyramid selling scheme.

192 Kim Morrison was a business partner (used in "the loose thinking" sense) of the plaintiff up until October 1991. Morrison gave evidence that on several occasions the plaintiff spoke to him about his (the plaintiff's) participation in the Aeroplane game. I think it is common ground that "the Aeroplane game" is a pyramid selling scheme. Morrison said that he warned the plaintiff, as a friend, that he risked prosecution by such involvement. The plaintiff told him he was involved in the Aeroplane game with a lady from London Court who had introduced him to it. The plaintiff also told Morrison that he and his wife had been at an Aeroplane game that had been raided. He said they were not caught because they had escaped over a back fence. Morrison said he later saw a photograph of the raid that appeared in the newspaper. It showed a person's leg or lower body hanging over the fence. The plaintiff also told Morrison that through his wife's involvement in the game some of her relatives had lost money.

193 In cross-examination Morrison said that he could not remember where or when these conversations had taken place or how many times they had occurred. He also said that the plaintiff had sought his advice concerning the games. He could not remember what had been said or the number of times advice had been sought. He could not remember the name of the lady in London Court. He thought that it may have been the plaintiff who drew his attention to the photograph of the raid. Morrison said he had not taken much notice of the photograph at the time and did not keep a copy. I might mention at this stage that the defendant testified that he had searched unsuccessfully at the Battye Library to find a copy of the photograph. It was put squarely to Morrison that his evidence was entirely false and fabricated. He denied it.

194 From the evidence it seems likely that if the plaintiff had been involved in a pyramid selling game it would probably have been in the period 1987 to 1989. The records of the Ministry of Fair Trading were subpoenaed. The Ministry has an electronic record of complaints since 1982. A search of the electronic record did not reveal any complaint involving a "Michael Brown" in that period. There was a general investigation file for the Golden Aeroplane game from 1987. There was no mention of a Michael Brown on it. The complaint files of the Ministry prior to 1991 have been destroyed. In the complaint files that exist there is no mention of a complaint against the plaintiff.

195 There is a history of bad blood between Morrison and the plaintiff. Their business relationship soured and Morrison testified that there has been some physical violence between them. I am concerned at the seriousness of the allegation about participation in the pyramid selling scheme. I take into account that it is an allegation of criminal conduct. The defendant bears the onus of establishing it on the balance of probabilities. The question I have to ask myself is whether, based on Morrison's evidence (because there is little else of an admissible nature to go on) it is more probable than not that the plaintiff was engaged in this criminal activity.

196 Morrison was first asked by the defendant about these matters in June 1997, some eight to ten years after the alleged events. He had no reason to ponder on them a great deal in the meantime. But due to the lapse of time it is not surprising that Morrison was short on specifics. On the other hand, Morrison did not waiver in his evidence that the plaintiff had told him about his (the plaintiff's) participation in pyramid selling games. Those conversations constitute admissions against interest. Weighing everything up, and having due regard to the gravity of the allegation, I accept what Morrison told me.

197 However, this does not resolve the issue. The meaning that the defendant has to justify is that the plaintiff had contravened the law by being a major promoter of the schemes. That is not quite the same as alleging mere participation in the schemes. I have already said that I would afford the defendant the opportunity to justify the meaning in the form for which the plaintiff contended and which I have found does arise from the words complained of. There is nothing in Morrison's evidence that goes beyond mere participation in the schemes. The defence therefore fails on the facts.

198 The meanings that cast the plaintiff as a major promoter of a pyramid selling scheme have not been justified.

199 That, then, deals with the defence of justification. I have made findings in relation to each of the imputations that I have found to be defamatory and which I felt were properly the subject of a plea of justification. In summary, those findings are as follows.

1. The plaintiff was a rude and arrogant person: this meaning has been justified.

2. The plaintiff was an unethical real estate agent: this meaning has not been justified.

3. The plaintiff associated with undesirable people: I found that the defendant had not established the alternative meaning for which he contended and so could not justify it. Had he done so, I think he would have failed on the evidence.

4. The plaintiff had been hard on his creditors and on Martin, a former partner: this meaning has not been justified.

5. The plaintiff had a conviction for overcrowding in the nightclub: this meaning has not been justified.

6. The plaintiff, being responsible for the operation and conduct of the nightclub, was responsible for the actions of a bouncer who had improperly refused to admit a girl to the nightclub because she was "too ugly": this meaning has not been justified.

7. The plaintiff had contravened the law by being a major promoter in a pyramid selling organisation: this meaning has not been justified.

8. The plaintiff was so unsuitable for membership of the Club that any other person on the waiting list would be a better choice: the defendant did not seek to justify this imputation.

Qualified Privilege - A Further Comment on the Pleadings

200 I need to describe in a little more detail how the plea of qualified privilege is advanced. It is based on five propositions. However, one of them (par 6(aa) of the defence) concerns the Company. As I have found that the Company did not publish the Objection Letter this plea can be ignored.

201 1. The Objection Letter was personally delivered by the defendant to the Club Captain in good faith as a member of the Club for the purpose of giving information to the Captain with respect to matters concerning the plaintiff. The Captain had an interest in knowing the truth of those matters. The Club Captain republished the material to the Club Manager (who was responsible under the Rules for dealing with correspondence) and the Club President in the presence of the defendant. [par 6(a) of the defence]

202 2. The defendant had a common and corresponding interest with the Captain and other members of the Club in the character, antecedents and suitability of applicants for membership of the Club and in ensuring that only suitable persons were admitted to its membership. The defendant sent the letter in good faith for the protection of that common interest and without malice. [par 6(b) of the defence]

203 3. By reason of that common interest the defendant was under a duty to send the letter to the Club Captain, who had a like duty to receive the letter. The defendant sent the letter in good faith and in the honest belief that publication to the Captain was his duty and for the purpose of protecting the interests of members in ensuring that only fit and proper persons were admitted to its membership. [par 6(c) of the defence]

204 4. The defendant had reasonable grounds for honestly believing what he wrote in the letter as explained by the qualifications. Full particulars are given as to the basis on which the belief was formed. They include the defendant's personal knowledge of the plaintiff's manner, demeanour and some of his business activities, things he had been told about the plaintiff by persons he regarded as reliable and things he had read in newspapers or seen on television. [par 6(d) of the defence]

205 In the reply the plaintiff denies each and every allegation in par 6 of the defence. There is a further plea that the publication to Baumgartel could not in any event be an occasion of qualified privilege because Baumgartel had no sufficient interest or duty to receive the letter. The plaintiff also pleads that the defendant was actuated by express malice, and full particulars are given in par 14. They include the words complained of themselves, the failure to tender an apology, the persistence in a plea of justification and the fact that the defendant made no proper investigation, did not believe the truth of what he wrote and was motivated by spite and ill will towards the plaintiff.

206 In Marks v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 14 WAR 360 I had cause to examine the general legal principles attendant on the defence of qualified privilege. Much of what I said in that case is applicable here.

207 At common law, the defence of qualified privilege, like justification, assumes that the publication would otherwise be defamatory. The rationale is that the public interest in providing a person with a means to vindicate a reputation in the face of defamatory statements must sometimes give way to the competing public interest in permitting people to communicate frankly and freely about matters with respect to which the law recognises that they have a duty to perform or an interest to protect in doing so: Horrocks v Lowe [1975] AC 135 per Lord Diplock at 149. The defence is grounded in notions of public policy and convenience: Toogood v Spyring [1834] EngR 363; [1834] 1 CM & R 181 at 193. The law acknowledges that it may be unfortunate that a person against whom a charge that is not true is made should have no redress. However, the law also recognises that the more general interests of society require that persons properly acting in the discharge of their duty or the exercise of their rights should not be hampered by constant fear of actions for defamation.

208 As the rule is founded on the general welfare of society, new occasions for its application will necessarily arise with continually changing conditions: see Howe and McColough v Lees [1910] HCA 67; (1910) 11 CLR 361 at 369.

209 The defence of qualified privilege generally requires a reciprocity of duty and interest between the publisher and the person to whom the statement is published. In Adam v Ward [1917] AC 309 Lord Atkinson explained the principle in this way, at 334:

"---a privileged occasion is, in relation to qualified privilege, an occasion 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. This reciprocity is essential."

210 The defendant contends that this publication was made in circumstances where he had a duty or interest to do so and that the requisite degree of reciprocity existed. I did not understand the defendant to contend that it had a legal duty to disseminate this information. The question then is whether there was a social or moral duty or a legitimate interest on the part of both the defendant and the persons to whom the communication was made in making and receiving the information.

211 A social or moral duty is not to be tested by whether a person who failed to make the communication would be open to censure but by asking whether the communication was made on an occasion on which a person who desired to do his duty to society would reasonably believe that he ought to make it: see Howe at 369. In Watt v Longsdon [1930] 1 KB 130 Greer LJ described the test, at 153, in these terms: "Would the great mass of right-minded [persons] in the position of the defendant have considered it their duty under the circumstances, to make the communication?" Reference can also be made to Stuart v Bell (1891) 2 QB 341 at 350 and at 360 where Kay LJ said: "The true mode of judging upon the question is to put oneself as much as possible in the position of the defendant".

212 In relation to qualified privilege, "interest" includes an interest material to the affairs of the recipient of the information such as would, for instance, assist in making important decisions or determining a particular course of action: Austin v Mirror Newspapers Ltd (1986) 60 ALJR 3 at 6.

213 The issues of "duty" and "interest" often overlap. The connection between them was the subject of comment by Griffiths CJ in Howe at 369:

"With regard to the privilege founded upon what is called interest it is contended that the person who makes the communication and the person to whom it is made must have a common interest. 'Community of interest' is, I think, a more accurate term. The words of Erle CJ, however, are 'an interest in the party making or receiving it,' and in Waller v Loch Jessel MR expressed the opinion that the suggested rule of community of interest is not of universal application. But there is high authority for it, and possibly the cases to the contrary, such as Vanspike v Cleyson and Bennett v Deacon, may be put on the ground of duty, understood in the wide sense which I have explained. In the view which I take of the present case I do not think it necessary to pursue this branch of the subject, for I think that the occasion was such as to establish a case of both duty and interest. The term 'community of interest' does not connote a joint pecuniary interest in property. Any legitimate object for the exercise of human faculties pursued by several persons in association with one another may be sufficient to establish community of interest. Again: 'interest' does not mean an interest in the particular subject matter as to which the communication is made, but an interest in knowing the fact communicated, in other words, an interest in the subject matter to which the communication is relevant, ... ."

214 In Barbero v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 Hunt J had this to say, at 40, on the question of "interest":

"The interest or apparent interest of the recipients need not be a proprietary one, nor even a pecuniary one: Howell [sic] v Lees ---. The word 'interest' is not used in any technical sense; it is used in the broadest popular sense, to connote that the interest in knowing a particular fact is not simply a matter of curiosity but a matter of substance apart from its mere quality as news. ---. The interest must be definite; it may be direct or indirect, but it must not be vague or insubstantial - so long as the interest is of so tangible a nature that it is expedient to protect for the common convenience and welfare of society, it will come within the privilege afforded-----."

215 Barbero was concerned with the statutory defence of qualified privilege that is available in New South Wales. However, in relation to the concepts of "duty" and "interest" I do not think that the statutory defence differs from the defence at common law. In Hanrahan v Ainsworth (1990) 22 NSWLR 73 at 101 Clarke JA approved the dicta that I have cited.

216 Qualified privilege assumes that the publication would otherwise be defamatory. The protection afforded to the publisher is not absolute and it will be lost if the occasion is abused by, for example, being used for an improper purpose or springing from malice. Some of the issues that arise in this area, for example whether or not the occasion is privileged, are questions of law. Other issues, such as those that relate to questions of degree and whether or not the publisher was actuated by malice, are questions of fact. The resolution of those issue can be problematic where the trial is conducted with a civil jury. Fortunately, that is not the case here. However, the distinction between questions of law and fact still need to be borne in mind. So too do issues that depend on the dichotomy between objective and subjective assessments.

217 Whether or not there is a duty to speak is a question of law to be determined objectively in accordance with the circumstances of each case. The question is whether, in the light of all the surrounding circumstances, it is in the general interests of society that the occasion be regarded as qualified: Whitely v Adams (1863) CB (NS) 391 at 418. See also Stephens at 242. The question is not whether the publisher believes, even on reasonable grounds, that he or she has a duty to speak but, rather, whether the duty actually exists: Stuart at 349, 356. The state of mind of the publisher may be important in deciding issues of proportionality, improper purpose or malice but it is not relevant to whether the occasion was or was not privileged: Adams at 334, Stephens at 238. Similar considerations apply in deciding whether or not the recipient had a relevant interest: Hebditch v MacIlwaine [1894] 2 QB 54 at 59.

218 No privilege arises if the exigency of the situation does not warrant the protection of the common interest by the means employed. Whether the duty or interest contended for by a publisher exists must be determined upon a consideration of the surrounding circumstances and of what is reasonable in those circumstances: see Guise v Kouvelis [1947] HCA 13; (1947) 74 CLR 102 at 110. In Adam (supra) Earl Loreburn put it this way at 321:

"The judge has to consider the nature of the duty or right or interest and to rule whether or not the defendant has published something beyond what was germane and reasonably appropriate to the occasion, or has given to it a publicity incommensurate to the occasion. For a man ought not to be protected if he publishes what is in fact untrue of someone else when there is no occasion for his doing so, or when there is no occasion for his publishing it to the persons to whom he in fact publishes it. All this is for the judge alone, and the question of malice, which is for the jury, cannot arise till the judge has ruled on the whole question of privilege. Language has been used in some cases which seems somewhat to confuse the two separate points, namely, whether the defendant has gone beyond the privilege which the occasion creates, and whether the defendant has forfeited the privilege by malice. Excess of privilege in part of the defamatory publication may of course be evidence of malice as to the whole of it, but the two things are different. The one is a matter for the judge and the other is matter for the jury. And observations made by judges in directing juries as to what is evidence of malice are not necessarily applicable when they have to rule as to excess of privilege."

219 If the occasion was privileged, the inclusion of some information outside the ambit of the privilege, or irrelevant to the occasion of privilege will not of itself destroy the privilege. If both relevant and irrelevant material is included in the same statement the defence can only apply to the relevant portion: Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183 at 228. However, the inclusion of the irrelevant part may indicate that the occasion was used for an improper purpose or it may afford evidence of malice: Dunford v News Media Ownership Ltd [1971] NZLR 961 at 968 - 969; Horrocks at 151. However, it remains the case that the defamatory material will only be protected by the privilege if it is relevant to the matters at the heart of the duty or interest: see Henwood v Harrison (1872) LR 7 CP 606 at 622, cited with approval in Adam at 349.

220 I turn now to the question of malice. The Shorter Oxford Dictionary defines "malice" as: "the desire to injure another person, active ill will or hatred". However, the law has a broader understanding of the term malice. It "embraces ill-will, spite and improper motive": Theophanous v Herald and Weekly Times Ltd [1994] HCA 46; (1994) 182 CLR 104 at 137. The question is whether there has been a misuse of the occasion to which the privilege would ordinarily attach. It will often, perhaps usually, mean that the publisher is actuated by the considerations that are contained in the dictionary definition. But it is not always necessary for the plaintiff to go that far in order to succeed. Hence the reference in Theophanous to "improper motive". Once it has been established that the statements are defamatory but that the occasion is a privileged one, the onus returns to the plaintiff to establish malice if the privilege is to be defeated.

221 In Horrocks Lord Diplock examined in detail the way that malice operates in relation to qualified privilege. His Lordship's exposition of the principles has been approved in a number of cases in Australian jurisdictions: see, for example, Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520 at 572; Barbaro at 51; Aqua Vital Australia Ltd v Swan Television and Radio Broadcasters Pty Ltd, unreported; SCt of WA (Steytler J); Library No 950545; 11 October 1995 at 46. Lord Diplock's exposition of the law is conveniently summarised in par 16.3 of Gatley.

222 Several of the principles enunciated by Lord Diplock may be relevant in deciding this case and I will mention them. The publisher is entitled to be protected unless some dominant improper motive on his or her part is established: Watt at 154 -- 155. This usually involves proof that the publisher was not using the occasion honestly for the purpose for which the law gives protection but was actuated by some indirect motive not connected with the privilege. An example is where the publisher acts solely for his or her own interests in a manner not allowed by the privilege and without thought for the harm that might be caused to the plaintiff: Gatley at par 16.5.

223 A positive belief in the truth of what was published will generally protect a publisher. However, this will not be the case if he or she publishes defamatory falsehoods without an honest belief in their truth or with reckless indifference to their truth or falsity: Australian Consolidated Press Ltd v Uren [1966] HCA 37; (1966) 117 CLR 185 at 209 - 210. Mere carelessness, impulsiveness or irrationality in arriving at a belief is not to be equated with indifference to the truth: Horrocks at 159.

224 Finally (so far as concerns the analysis of Horrocks) the authors of Gatley have extracted what they say as the ratio decidendi. I adopt what the authors have said in a footnote to par 16.3:

"Where conduct extraneous to the privileged occasion is not relied on, and the only evidence of improper motive is the content of the defamatory matter or the steps taken by the defendant to verify its accuracy, the plaintiff, in order to succeed, must, ... show that the defendant did not honestly believe the truth of what was said or was indifferent to its falsity."

225 Where irrelevant material is included in the publication the plaintiff can only succeed if it can be inferred that the defendant did not believe it to be true or realised that it was irrelevant and brought it in for some improper motive. Courts should be slow to draw those inferences. Care needs to be taken before an inference of malice is drawn from the words complained of themselves. In this respect the words of Mason J in Calwell v Ipec Australia Ltd [1975] HCA 47; (1975) 135 CLR 321 at 332 - 333 are apposite:

"At common law it has been repeatedly said that a court should not be quick to find evidence of malice in the terms of defamatory material published on a privileged occasion because so to do would restrict considerably, if not defeat, the protection which the law confers on privileged communications (see Laughton v Bishop of Sodor and Man [1872] EngR 35; (1872) LR 4 PC 495; Adam v Ward (1917) AC 309 (1869) LR 4 Ex 232). It has been said that where the words are utterly disproportionate to the facts this amounts to evidence of malice (Spill v Maule (1869) LR 4 Ex 232), presumably on the footing that the extremity and exaggeration of the language is explicable only by reference to the existence of ill will in the defendant, but it does not suggest that a defendant is confined to saying what is strictly necessary to the occasion. ... None the less it is impossible to formulate a precise and illuminating criterion which will separate those publications which furnish intrinsic evidence of ill will from those which do not. Whether in a given case there is an inference reasonably open that the defendant was actuated by ill will or some other improper motive will depend on the extravagance of the allegation or the language in which it is expressed, having regard to the facts. In each instance it is a judgment made in the light of the impression created upon the mind by what has been written, an impression which will not necessarily depend on a close textual analysis of the words."

226 Issues of proportionality will often arise where the complaint is the use of exaggerated language or the inclusion of material that is irrelevant to the occasion.

A Privileged Occasion - Duty and Interest Generally

227 I wish now to make a general observation about the position of the Club and its members. In this case I am dealing with a club that is predominantly of social origin. This is not a case which involves an organisation that can or does affect a person's right to earn a living in a particular calling. Different considerations apply to clubs or associations of the latter variety.

228 Clubs of the type that I am considering in this case are generally formed when people with a common interest come together to promote that common interest by group activity. The "common interest" in this instance is the recreational pursuit of golf. The Club is incorporated under the Associations Incorporation Act 1987 (WA). The Rules are the constitution of the Club. They regulate the relationship between a member and the Club and between members inter se. A club of this type is private. Membership is a privilege, not a right. No person has a right to become a member and the committee or other body to whom the task of adjudicating on applications is delegated can refuse to admit a person no matter how eligible they may appear: McInnes v Onslow-Fane [1978] 1 WLR 1520 at 1529. That is, of course, subject to the general law of the land. Gone are the days when, for example, the "black-ball" system was used to keep out of club membership persons who were of a particular religious persuasion or whose calling was pejoratively termed "trade". But this is a reflection of statutes such as the Equal Opportunity Act 1984 (WA) and the Racial Discrimination Act 1975 (C'th). The fundamental principle that membership is a privilege remains.

229 So it is, for example, that a membership application could be refused without the committee being obliged to give reasons: McInnes at 1533. It seems to me to be important that in deciding whether or not to grant the privilege of membership to an applicant, a committee should be free to inform itself in whatever way it sees fit. That will include inviting comments from existing members. In this case r 35 (which I have set out earlier) requires that a nomination form be posted on the noticeboard for 14 days. The Rules are silent as to a right of an existing member to object to an application. However, it seems to me to be the clear implication of r 35 that it is designed to inform existing members of the identity of those seeking membership so that they can object (or, I suppose, support) if they are minded to do so.

230 I can not see anything wrong in principle with that system. But it has to be exercised according to law. This means that the application must be dealt with and adjudicated upon in accordance with the Rules and with the general law, so far as it is applicable to the Club. Part of the general law is the law of defamation. And as this case shows, the extent to which the Club can guarantee the confidentiality of a communication, especially a written communication, between a member and the committee concerning an application is problematic.

231 As with most things in the law, it comes down to a question of balance. In this case a balance must be struck between two competing interests. One is the freedom of a member of a club to exercise a right implicitly recognised by the Rules to inform a committee of matters that he or she considers pertinent and of the committee to receive that information. The other is the right of an individual, seeking that the club bestow on him or her the privilege of membership, to have the application dealt with fairly. In this case the reference to fairness is to the preservation of reputation, which is a right to which the general law says all citizens are entitled.

232 It could not be said that a member of the Club has a legal duty to provide to the Committee information about persons who have applied to join it. But the Club is, as I have said, an entity that exists because persons having a common interest have come together to further those interests by joint activity. They have agreed, as between themselves, to a constitution which regulates the way in which those group activities will be carried out. The Rules provide a mechanism by which the identity of those seeking to join the Club is made known to persons who already enjoy the privilege. The only sensible construction of this rule is that it contemplates the provision of information by existing members concerning applicants for membership. In my view those who choose to provide information are acting under a moral or social duty to do so.

233 The Rules are silent as to the criteria against which applications for membership are to be assessed. There are numerical limits (r 38) and persons who have been expelled from or suspended by the Club or another golf club are not eligible for membership. However, it is clear from the evidence (particularly the evidence of Howard and Johnson) that the suitability (to use a very general phrase) of an applicant was a matter that the committee considered. I have no doubt that the committee members responsible for making a decision whether or not to grant membership have an interest in receiving the information. In this respect I am referring to the General Committee. The Objection Letter was only published (at least by the defendant) to Howard, Johnson and Baumgartel. Howard and Johnson were members of the General Committee and therefore had a relevant interest. This makes it unnecessary for me to make findings as to whether there was a separate membership committee and, if so, who were its members.

234 The plaintiff argued that there was no relevant interest residing in Baumgartel to receive the information. I do not accept this submission. It takes a very narrow and unrealistic approach to the running and management of the Club. Baumgartel had a constitutional responsibility to attend to all correspondence. Although he was not a member of the General Committee he attended its meetings and kept the minutes. It can be assumed that he was responsible for arranging the meetings including the agendas or, as the defendant put it in his evidence, as convenor of the meetings. Baumgartel was asked what happened when a letter of objection to a membership application came in. He said: "I treated it as strictly confidential. I kept a copy of the letter in my office in my desk drawer. If an objection was lodged then I informed the captain". I think that all of this is sufficient to clothe Baumgartel with a relevant interest.

235 It might be thought that the process by which a person becomes or seeks to become a member of a club of this nature ought not to attract the privilege. On one view of it, the club is entirely private and its internal management and the way it determines who are to be its members cannot be described as "for the general welfare of society". Each case has to be judged according to its own facts and I can envisage situations in which an argument of that nature might hold good. On the other hand, recreation is an important aspect of modern life. The affairs of associations such as the Club will often have a connection, sometimes an intimate connection, with matters of a public nature. For example, some associations occupy their premises and facilities on a lease, licence or some similar arrangement from a government or local government authority. They may even utilise land that has the status of an "A Class Reserve". In the case of the Club, it is incorporated under the Associations Incorporation Act 1987 (WA) and therefore is, at least to some extent, overseen by a public regulatory authority. In that way, the general community has an interest in the proper functioning of the Club. It would not matter to the society at large whether, for example, the fourth hole is a par 3 or a par 4. But matters which affect the relationship between the Club and members of the outside public, especially those who apply for membership, might be of general concern.

236 I find, then, that the occasion was, prima facie, privileged. The occasion was the provision by the defendant to the Club (or more accurately to those officers or servants of the Club who were involved in deciding whether or not to admit a person to membership of the Club) of information relevant to the suitability of the applicant to be a member of the Club for the purpose of assisting those persons to reach a decision.

A Privileged Occasion - the Defendant's Motives

237 What I said in the preceding section was relatively general in nature. I now turn to the particular circumstances of the publication to see whether the defendant used the occasion for the purpose for which the privilege was intended. Much of what I am about to say will also be relevant to the question of malice. Nonetheless, I will consider that issue separately.

238 The defendant gave evidence as to his motive in writing the Objection Letter. The following paragraphs of the defendant's evidence in chief are pertinent:

"62. I decided I would inform the Manager and the Captain of the Club what I knew about [the plaintiff]. I did not want to be in a situation where I would feel awkward about refusing to play with him. Also in the intra-club competitions I would have no choice but to play with [the plaintiff].

127 So far as I am aware all of the statements made by me in the letter are true, and indeed, in the event that they are not, I believe them to be true and certainly none of them was made falsely or recklessly.

128 I relied mainly upon advice from Bob Maher, Paul Summers and Robert Martin in preparing the [Objection Letter].

129 I was not actuated by malice. I did not want any confrontation at the Club between [the plaintiff] and myself.

130 I believe that whilst it was not for me to make any judgment, my past experiences with [the plaintiff] were such as to compel me, as a good club member, to disclose those matters to the Club so that the Club could determine [the plaintiff's] application for membership based on as much information as could reasonably be found and placed before it."

239 In relation to the investigations made by the defendant prior to writing the letter, he also had a telephone conversation with Morrison. I accept his evidence, supported as it is by Morrison, that this occurred in June 1997, before the end of the financial year. That would place it before the defendant wrote the Objection Letter. I also accept that the defendant made searches at the Battye Library for newspaper articles about pyramid selling (ex 48, T 315 - 319). He also found at the Battye Library or recalled seeing articles in newspapers or reports on television about the plaintiff's activities in a number of areas. These included the bankruptcy and construction problems at the Colin Street site (T 221), Brajkovich's "run in" with Turf Club stewards (exs 46 and 47), the North Fremantle incident (ex 19), the BH incident (ex 1A, T 279 - 280), the Daniel King incident (part of ex 1) and the pyramid selling scheme (ex 48, T 301 and following).

240 There is nothing in the newspaper articles (exs 46 and 47) to say that Brajkovich had been warned off race courses. In the newspaper articles concerning the pyramid selling schemes there is no mention of the plaintiff and nor is there a photograph of someone disappearing over a fence.

241 In relation to the inquiries that the defendant made of other people, I have prepared, and attach as Table "B", a schedule comparing what the defendant said those other people told him and the evidence that they gave concerning those conversations. It can be seen that there are some differences. For example, Robert Martin did not support the defendant's recollection that he had told the defendant the plaintiff gave his (Martin's) details to the tax office. Martin did not say that he told the defendant about the sexual discrimination charges. In relation to Summers, I refer to the matters in items 12, 13 and 14 of the table. Where there is a difference, in each case I prefer to rely on the independent evidence of the witnesses rather than that of the defendant.

242 In his evidence-in-chief, the defendant said that before he wrote the letter he spoke to Bob Maher and, at the suggestion of Robert Martin, to Bob Smith. Neither Maher nor Smith was called to give evidence. From the cross-examination there is reason to believe that the relationship between Maher and the plaintiff (as with Morrison and the plaintiff) may have been less than affable. I have no idea about Smith. Not having seen those two gentleman I am not in a position to assess the reliability of what the defendant says he was told by them. I am prepared to accept that the defendant spoke to both Smith and Maher prior to writing the Objection Letter and that they made comments, generally of an adverse nature, about the plaintiff. However, I am not prepared to act on the detail of what the defendant says he was told during those conversations.

243 I return now to the defendant's motives in writing the Objection Letter. If the defendant's dominant motive were as described in par 62 of his statement of evidence I think the occasion would not be privileged. It does not matter a jot whether the plaintiff would feel awkward, comfortable (or anywhere in between) in coming into contact with the plaintiff on the course or in the locker room or the bar. It could not by any stretch of the imagination be said to be for the general good of the community that members of an association be at liberty to limit membership to those who, to revert to the language of a bygone age, were "regular chaps". The question is, and this is the occasion to which I have found the privilege capable of applying, whether the defendant was at liberty to provide information going to the suitability (in the sense of fitness and propriety) for membership of the Club.

244 The defendant agreed that his decision to write the Objection Letter was made after careful consideration. He was asked whether the research he undertook prior to writing the letter was also undertaken with careful consideration. He replied: "I don't know if you want to use that term 'careful consideration'. I considered what I was doing. ... I was reasonably careful about it". He was also asked whether he was careful in the sense that he considered critically information that was supplied to him by other people. He responded by saying that the information that was supplied to him he believed to be correct. In what I thought to be a deliberate answer he said that he had "considered the information" and specifically declined to add the word "carefully". He agreed that in the actual writing of the letter, that is, the words used, he undertook the exercise with care.

245 In my opinion the defendant wrote the Objection Letter with a view to influencing the Committee so as to cause them to reject the plaintiff's application. That is what the last sentence of the Objection Letter says in plain, unambiguous wording. Early in his cross-examination the defendant agreed with the proposition that his ultimate intention in writing the letter was to persuade persons who read it to vote against the plaintiff's application for admission to membership of the club. I must say that I found it curious that the defendant resiled somewhat from that position as the cross-examination wore on. I refer, for example, to these (separate) exchanges:

"The intention in writing this letter was that the reader of it should rely on the statements you put in the letter, rely and accept the statements you put in the letter?---No. They should make their own decision about the statements in the letter."

"You wanted the reader to form a view adverse of Mr Brown. Correct?---I wanted the reader to make their own decisions up. They were quite astute people."

"You wanted to take him out of the system, didn't you, his application? You didn't want it to go to the committee. Is that correct?---I wouldn't have been able to influence them to do that."

246 It is not entirely clear to me whether the defendant was saying that the committee members should make their own independent investigations into the character and activities of the plaintiff or whether they should take the information which he had provided and decide whether it was sufficient for them to reject the application. To draw an analogy it would, I think, be a little disingenuous for the defendant to say that he was providing the shell casings and the gunpowder but it was for the members of the committee to assemble the bullets and, if they were of the appropriate calibre, to fire them.

247 I also found the defendant's explanation as to why he included some of the individual pieces of information in the letter to be curious. For example, the reference to Robert Martin having been sent to prison. This exchange occurred during cross-examination:

"Why did you refer to Mr Robert Martin in this letter?---Because he was a partner with Michael in a development.

.........

That's all you wanted to say about Mr Martin, that he was a partner. Is that correct?---Yes.

It wasn't your intention to mention Mr Martin because basically he was a crook and that Mr Brown associated with him? Wasn't that your intention?---No, it was not.

........

You state in the letter, "Mr Martin" - and I think there is a typographical error - "was also charged with bribing Mr Len Brush and I believe was gaoled for some time." Why did you mention that?---Because it was the truth.

But why did you mention it in this letter?---Because my recollection of the time was that Robert Martin was - he had some court hearings with Len Brush and he was gaoled.

Yes?---And that's why I wrote it.

But why? What's that got to do with Mr Brown?---Well, he was a partner of Michael's.

..............

You put it in the letter because you wanted to suggest to the reader (1) that Mr Martin was a crook who had been gaoled and (2) that he was an associate of Mr Brown. That's why you put it in there?---No, that's not correct.

Well, you tell his Honour why you put it in?---... Simply for the reason that I have said, that he was a partner and a former partner and for no other reason."

248 I confess that I simply do not understand the defendant's process of reasoning in this respect. He went on to say that, in answer to a question whether he thought Robert Martin was a fit and proper person to be a member of the Club: "Yes, I think Robert would be a good member of the Club". I can understand the defendant referring to Martin as a former partner of the plaintiff in connection with the allegation that the plaintiff was "hard" on his creditors and partners. But if Robert Martin's character is such that he would be a fit and proper member of the Club, what is the relevance of his criminal past? The answer, I think, can only be to paint the plaintiff as a person who has, in the past, associated with persons of ill-repute. I have difficulty in accepting the defendant's protestations to the contrary.

249 Another example is the reference in the Objection Letter to Mr Nichevich. This exchange occurred in cross-examination (noting that the spelling of the name in the transcript is incorrect):

"I want to know why you included this sentence in this letter to the club?---I had the spelling wrong.

Yes, you have stated that?---And I had the wrong person.

Why did you include it?---Because I was told that Mr Nikovich had applied and was declined.

How does that impact on Brown?---I can't answer that, you know, other than I had the spelling wrong and

You were attempting to suggest, were you not, that Nikovich had been declined, presumably for good reason, and therefore because Brown's a close friend somehow that directly affects his application in some way so that it should be rejected?---No, I was just making them aware, to check the spelling of the name of the person. I got confused with the Nikovich, Starcevich. I wasn't actually told Nikovich, but clearly when I found out, it was not Nikovich, it was Starcevich.

And if it was Nikovich, who was a close friend, or whoever it was, was a close friend of Brown, then your intention was that the reader should form a view adverse to Mr Brown in relation to his application for membership. Correct?---No. My intention was for them to check out the spelling and make sure that I hadn't got it wrong, and they did that. They told me straightaway it was not Nikovich, it was Starcevich.

But why have you put in there, "Mr Brown has a close friend fitting this name description"? Why is that there?---Because if the application was from Mr Nikovich they could also investigate it."

250 Once again, I am afraid that the reasoning process alludes me. If it is not to paint the plaintiff as someone who associates with people of ill-repute I am not sure what the purpose is. It becomes even more confusing when, in answer to a question whether Nichevich was a person of good character, the defendant said: "He seems like a nice sort of a chap. I don't know much about his background". There is no suggestion there that the defendant had any information that reflected adversely on Nichevich. I have not overlooked the fact that the paragraph in the Objection Letter concerning Nichevich was the subject of a qualification. The persons to whom the defendant published the letter were asked to ignore that paragraph. I mention it here because it reflects on the defendant's state of mind at the time when he wrote the Objection Letter.

251 I think there are several examples in the Objection Letter that can only be described as the use of exaggerated language. For example, in cross-examination the defendant refused to acknowledge that in the letter he was intending to reflect on the plaintiff's honesty or to paint him as a person of bad character. Rather it was to explain activities in which the plaintiff had been involved. Yet there is reference to the plaintiff acting "unethically" and having "convictions" against him. He agreed that at the time when he wrote the letter he was aware that the barring of BH had been the action of a bouncer, not the plaintiff. In relation to the use of the word "unethical", the defendant refused to concede that an allegation of unethical behaviour would necessarily reflect on character. He also declined to concede that it was a serious matter to allege that a real estate agent had acted unethically.

252 In relation to the pyramid selling scheme, the newspaper article which the plaintiff saw was published in 1989. He had been told that the plaintiff's involvement in the scheme was in 1988 or 1989. He conceded that at the time he wrote the letter he had no thought there was a possibility that the plaintiff may be charged as being an organiser of a Concorde Airline Club. If that is so I am not sure why he included in a letter written in July 1997 that the Ministry was still looking to lay charges against the organisers.

253 The tenth paragraph of the Objection Letter has also caused me concern. In cross-examination the defendant explained that by "indiscretions" he meant no more than that complaints had been lodged with regulatory authorities in relation to the plaintiff. This exchange occurred:

"Was it your intention to convey to the reader of this letter that complaints had been made concerning the conduct of Mr Brown and that those complaints were justified complaints?---I don't think I meant that they were justified. The point I was trying to make in the letter was that I was aware that there were some complaints made to these authorities and that I had made some checks but I couldn't get the details other than the points that I was aware of - was just in my knowledge."

254 In my view, the word "indiscretion" used in the context in which it appears in the tenth paragraph has a pejorative element. It means more than that a complaint had been made. It carries with it the insinuation that the conduct complained of was lacking in propriety. So far as I could see there was nothing in the qualifications (and just to remind the reader, they are the explanations given orally at the meetings of 3 July 1997 and 5 July 1997) that would have converted the intended meaning from "indiscretion" to "complaint".

255 One of the qualifications that the defendant made at the meeting on 3 July 1997 was that he had twice reported the plaintiff to the police in the mid-1970's. In cross-examination he denied that he had done so because he wished to give the impression that the plaintiff had committed criminal offences. He said it was because the plaintiff had assaulted him in the past and he did not want him to do so again. In his evidence Baumgartel did not mention the defendant telling him that he had been assaulted. Baumgartel said the report was in relation to the removal of documents. The defendant also conceded that in the qualifications he had not said that the police told him that it was a civil matter and they would not intervene. Again, I think there was an element of exaggeration involved in this disclosure so as to paint the plaintiff in a particular light.

256 A stark example of an exaggerated comment is to be found in the final paragraph of the Objection Letter. The defendant says: "please reject this application and choose any other on [the waiting] list". On the pleadings the defendant has conceded that the meaning to be attributed to this phrase is that the plaintiff was so unsuitable for membership of the Club that any other person on the waiting list would be a better choice. In cross-examination the defendant conceded that he did not know who was on the waiting list. In those circumstances it is difficult to see how it could be said, in good faith, that anyone else whose name appeared on the list would be more worthy of membership.

257 This is a case where it is not at all easy to separate out issues that relate to the dominant motive or proper use of the occasion from those that go more directly to the defendant's state of mind and to malice. Accordingly, before proffering a conclusion on this aspect I will go on to consider the other relevant issues.

258 It will be convenient to examine the issue of malice by reference to the matters raised in the particulars to par 14 of the plaintiff's reply.

259 In the first particular the plaintiff relies on the terms of the words complained of. I have probably said enough on that issue. The second particular is that the defendant altered the newspaper clipping of the BH incident in such a way as to give a misleading impression that the plaintiff (rather than the bouncer) had barred the girl from entering the nightclub. This was an issue taken up at the meeting on 3 July 1997 and I think the qualification satisfactorily resolves the issue.

260 The refusal to tender an apology and persisting in unjustifiable pleas of justification are also raised. A refusal to apologise is not, of itself, evidence of malice: Loveday v Sun Newspapers Ltd [1938] HCA 28; (1938) 59 CLR 503 at 513. I think the same could be said about making, and refusing to abandon, a plea of justification that is later found to be without foundation. This is not to say that those matters could never be evidence of malice. But there must be something in the circumstances that takes the case out of the ordinary and which is probative of the publisher acting out of spite or ill-will. I am not satisfied that such a conclusion ought to be drawn in this case.

261 The plaintiff also complains that the defendant did not believe the truth of what he wrote or was recklessly indifferent to its truth or falsity, and made no proper investigation in that regard. I have dealt with these matters elsewhere.

262 In par 14.8 of the reply the plaintiff alleges spite and ill-will and calls in aid the words complained of themselves, the "doctoring" of the newspaper clipping, the lack of proper investigation and the lack of an honest belief in the truth of what was published. I have commented on these aspects already. The plaintiff then cites three particular incidents in support of the allegation of spite and ill-will. I will deal with each in turn.

The South Perth Flats Incident and Subsequent Contact

263 The plaintiff says that he made a complaint about Adams and the defendant to the Real Estate Institute concerning the South Perth flats transaction and that what had previously been an amicable acquaintance with frequent interaction began to dissipate. Since that time (save for one occasion) the defendant has refused to speak to the plaintiff. I have described the South Perth flats problem in some detail elsewhere. It certainly appears to have been the genesis of the difficulties between the parties.

264 It is not clear on the evidence whether, prior to the South Perth incident, there was "frequent interaction" between the parties. However, they were on "friendly" terms and, according to the defendant, in February 1975 while he was away on holidays, the plaintiff called into his office from time to time to check on the running of his business. It is true that since the South Perth incident there has been little contact between them. The plaintiff's evidence was that he complained to the Real Estate Institute about the defendant and the defendant says that on that or another occasion (I am not sure which) he complained about the plaintiff's conduct.

265 The defendant said he had "seen [the plaintiff] around a little bit", usually at golf days. On one occasion they were in the shower room together after a golf day at Meadow Springs. However, they did not speak and effectively ignored one another. The defendant described his attitude to the plaintiff in these terms:

"Do you think it might have coloured your perspective of what you were told by other people and what you read in the paper because of the intense dislike you had for this man?---I don't dislike him. ...

But you don't want to play golf with him and you tell him to get off a boat because he's on the boat, and you don't dislike him?---No, I don't dislike him and I don't like him. ... I just don't have any feelings for him at all. ... I would prefer not to have anything to do with him. I have always had that attitude from the time that he assaulted me and took those documents out of the office. ...

So you don't want to have anything to do with him and that's a feeling you have held since 1976 without alteration. Correct?---Yes, about 77.

77, all right. It's a feeling that you have held without alteration. It's remained in your heart and mind since that time. Correct?---It hasn't been foremost in my mind. I just made a decision at the time that I just didn't want to have anything to do with him. I just wanted to stay away from him.

That's right, and his application to the club really caused you a massive problem because you would have to associate with him, as you thought?---It wasn't a massive problem. As I said, if the committee had approved his application I would have lived with that in say way."

266 Another of the particulars on which the plaintiff relies to establish malice is an incident on a boat at Rottnest. It occurred in either 1988 or 1989.

267 I will first give the plaintiff's version of the incident. He and his wife were at Rottnest on a boat owned by Gary Pearce. The defendant was also there on a boat owned by Clifford. Pearce and the plaintiff saw Clifford's boat and decided to visit him. They pulled along side and started to tie up. The defendant came out of the cabin area of Clifford's boat, saw the plaintiff and started to shout abuse at him. He told the plaintiff not to come on the boat. The plaintiff could not recall the precise words but "it was not a request, it was a shouting abusive situation". The plaintiff then suggested to Pearce that they untie and move away, which they did. The plaintiff's wife was not called to give evidence about the incident.

268 Not surprisingly, the defendant's version was quite different. He said he was towards the back of the boat with Clifford. He was sitting on the side of the boat. The plaintiff came onto the boat from behind him and "then he brushed past me, I felt a little knock or a little brush". The defendant did not contend that the contact was deliberate. He asked the plaintiff to leave the boat as he didn't want any trouble. The plaintiff responded by saying: "It's not your boat." However, the plaintiff then returned to Pearce's boat and they left the area. That was the end of the incident.

269 Pearce and Clifford attended the hearing under subpoena and gave evidence. Pearce said they were endeavouring to pull up alongside Clifford's boat. He was on the fly bridge of the boat. The plaintiff was on the foredeck. The defendant came out of the cabin of Clifford's boat and made it clear that the plaintiff was not welcome to come aboard. At this time the plaintiff had a rope ready to tie up. Pearce said he was busy manoeuvring the boat and was not paying a lot of attention to what was going on between the plaintiff and the defendant. He could not recall the plaintiff saying anything to the defendant. Clifford was at the back of his boat and he suggested to Pearce that he move his boat away. That is what happened. In cross-examination Pearce said that while he did not think the plaintiff had moved onto Clifford's boat it was possible he had done so.

270 Clifford's evidence was a little different again. The defendant and his wife were guests on his boat. Pearce tied his boat up alongside to come on board and have a drink. The plaintiff and his wife came on with him. Clifford testified: "I didn't for one minute expect anything, but it was quite obvious from the manner in which they looked at one another or eyeballed one another that there was going to be a bit of trouble there and I think [the defendant] said to me, 'I think you should ask him to leave'. I could see that he meant it and [the defendant] was a guest on the boat, so I simply said to Gary Pearce, 'To save any problems here, I don't know what the problem is all about, but to save any problems I think you better take your guests and leave', and he did just that very, very quickly." Clifford did not hear the defendant say anything to the plaintiff and he did not see the plaintiff knock the defendant.

271 I have no reason to doubt the evidence that Clifford and Pearce gave. I find that the plaintiff came aboard Clifford's boat. That is what Clifford said and Pearce did not discount the possibility that it had happened. Whether or not Pearce actually went aboard is not particularly material. I find that the defendant said either to the plaintiff or to Clifford (it does not matter much) that the plaintiff should leave the boat. Clifford asked Pearce to take his boat away and that is what happened. There is no support in the evidence of Clifford or Pearce for the plaintiff's evidence that the defendant shouted abuse at him. I do not accept the plaintiff's evidence on this point.

272 The defendant's conduct might perhaps be described as surprising given that he was a guest on Clifford's boat. One way of looking at it is that he sought to determine who else Clifford could entertain. It demonstrates a very distinct attitude that the defendant had towards the plaintiff. However, in the absence of a finding that it was accompanied by abuse in the way that the plaintiff outlined I think it falls short of amounting to spite or ill-will.

Comments to Clifford About the Plaintiff's Application

273 The plea is that in or about August 1996 the defendant told Clifford, in effect, that he did not want the plaintiff to be a member of the Club and that he would try to keep him out.

274 Clifford's evidence was that at some stage he thought the plaintiff's application for membership had been approved. One day or evening he took the plaintiff to the Club to meet some of the people and get to know them, which was a normal activity that proposers and seconders undertake. While at the Club he had a brief conversation with the defendant. He and the defendant were standing next to each other at the bar. The defendant indicated towards the plaintiff and asked what he was doing at the Club. Clifford responded: "I seconded him to the golf club and invited him up here to meet the members". Clifford also said, in evidence, that "it didn't go much further than that" and that, to his memory, the defendant had not said anything in response.

275 At some stage, Clifford had conversations with Johnson and with Howard about the plaintiff's application. This caused Clifford to write to the plaintiff saying that there were problems with the application and that "you can well guess where your trouble is coming from and let's not mention names". In his evidence he said that was a reference to the defendant as it "was common knowledge throughout the whole club". Of course, the latter part of that statement would not be admissible to establish the fact that the defendant's attitude towards the plaintiff was common knowledge.

276 There is no evidence that the defendant told Clifford that he would try to keep the plaintiff out of the Club (which is the way the particular is framed) but it is an undeniable fact that this was the defendant's intention. I am not sure that the particular, as drafted, demonstrates spite or ill-will.

277 Once again, before I reach a final conclusion of the issue of spite or ill-will or malice generally, I will deal with the remaining question, namely the defendant's belief in the truth of what he published.

A Privileged Occasion - Belief in the Truth of What was Published

278 In his evidence in chief the defendant was adamant that at the time when he wrote the Objection Letter he honestly believed in the truth of what was contained within it. He maintained that stance during cross-examination and there is little to be gained by me repeating what the defendant said on those occasions.

279 Much of what I wish to say in relation to this matter has been included under the heading "A Privileged Occasion - the Defendant's Motives". The defendant had first hand knowledge of very few of the matters raised in the Objection Letter. He had been alerted to some of them by what he had read or seen in the popular media. I do not need to decide whether mere reliance on what is said in the popular press could be reasonable grounds for belief in the truth of what is there reported because, in this case, the defendant did take steps to verify what he thought he had seen. In my view, and as a general statement, Table "B" demonstrates that Robert Martin, Paul Summers and Kim Morrison supported the defendant's evidence as to the inquiries that he made of them and their several responses. There are some differences and I have already pointed them out.

280 I must now set out the conclusions to which I have come on this aspect of the case. In doing so, I repeat that the factual matrix makes it difficult to separate into neat compartments the various components that are relevant to the defendant's motives, to whether the privilege was exceeded and to malice. This puts me at risk of falling into the error identified by Earl Loreburn in Adam of confusing two separate points, namely, whether the defendant has gone beyond the privilege which the occasion creates, and whether the defendant has forfeited the privilege by malice.

281 There are four other points that I have already mentioned but which I feel I should repeat. I am conscious of the need to exercise caution before drawing inferences of excess of privilege or malice from the words complained of themselves. The danger of so doing is that it could effectively defeat the whole reason why the law affords some protection in this area. Secondly, the fact that the publication contains falsehoods does not indicate that the occasion of privilege was abused. Thirdly, I need to bear in mind the warning delivered by Mason J in Calwell, namely that a publisher is not confined to saying what is strictly necessary to the occasion. The final point also comes from Calwell. It is Mason J's reminder that it is better to avoid a close textual analysis of the words and to concentrate on the impression created upon the mind by what has been written or said.

282 If the object of the defendant was to provide information about the suitability of the plaintiff for membership of the Club then the occasion was privileged. However, I have to decide whether what the defendant published contained so much irrelevant matter or so many exaggerations that the publication could not be said to be germane and reasonably appropriate to the occasion. I will not repeat what I have already said about the inclusion of irrelevant and exaggerated material in the Objection Letter. I think this appears sufficiently under the heading "A Privileged Occasion- the Defendant's Motives".

283 I must simply stand back and assess the impression created upon the mind by what was written and said. I conclude that the desire of the defendant to ensure that he would not be embarrassed by having to associate with the plaintiff at the Club caused him to write the letter in a manner that would paint the plaintiff in so serious a light that his application would be rejected. In so doing there was an excess of privilege.

284 If it is necessary to do so, I find that the same material justifies the drawing of an inference that the defendant did not believe some of what he wrote to be true or that he realised that it was irrelevant. This would be a sufficient basis on which to make a finding of malice. In so doing, I should stress that I am not saying that the defendant did not honestly believe some (perhaps most) of, or the general thrust of, what he published. However, there are material matters on which the inference could operate. I cite by way of example the reference to the plaintiff as being a "Mr Big" in the pyramid selling scheme rather than a mere participant and the paucity of the evidence on which he relied for the comment that the plaintiff associated with undesirable people or that "most people" in the real estate industry regarded the plaintiff as "unethical". Nor do I find that the defendant was actuated by spite or ill-will, using those terms in their technical sense. However, I think he did allow his feelings for the plaintiff to cloud his judgment as to matters that were and were not germane to the deliberations of the committee.

285 In this case the finding of malice does not take the case beyond what was required in order to conclude that the occasion of privilege had been exceeded.

286 The plaintiff seeks compensatory, aggravated and exemplary damages. Generally speaking, damages are awarded as one lump sum rather than being identified separately for compensatory, aggravated and exemplary components: Carson v John Fairfax & Sons Pty Ltd [1993] HCA 31; (1993) 178 CLR 44 at 79; Henry v TVW Enterprises Ltd (1990) 3 WAR 474 at 483. Damages are at large and cannot be arrived at by a purely objective computation: Broome v Cassell [1972] UKHL 3; [1972] AC 1027 at 1071.

287 In this case I am not concerned with pecuniary loss said to have been suffered by the plaintiff as a result of the publication. I can therefore confine my attention to non-pecuniary harm. Compensatory damages operate in two ways: as a vindication of the plaintiff to the public and as a consolation to him or her for the wrong done. Compensation is a solatium rather than a monetary recompense for harm measurable in money: Uren v John Fairfax & Sons Ltd [1966] HCA 40; (1966) 117 CLR 118 at 150. Compensation for the injury sustained can be classified under two heads. First, the consequences of the attitude adopted towards the plaintiff by other persons as a result of the diminution of the esteem in which they hold him because of the defamatory statements. Secondly, the grief or annoyance caused to the plaintiff by the defamatory statements: Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211 at 216.

288 I think it is probably fair to say that the primary considerations are the gravity of the defamatory imputation and its extent and impact. There is little that I need to add to what I have already said on the first of those two matters. It is essentially a matter of impression. The plaintiff said in evidence:

"Upon reading the letter I was shocked and angry at its comments because the letter appeared to indicate that I was a criminal, violent, rude and dishonest and I associated with people of a similar character.

I considered that the allegations contained in the letter reflected on myself, my wife and children. I live in the general locality of the [Club] and myself, my wife and children all like to play golf. I was appalled at the allegations which had been levelled against me and by the fact that it had been presented to people who know or may well know of me or my family members."

289 I have no reason to doubt that the plaintiff did react in that way when he read the letter. However, it must be borne in mind that the defendant only published the Objection Letter to three people and it was done on the understanding that its contents would remain confidential to those persons. The fact that it was delivered on a confidential basis does not detract from its defamatory status. However, it does reflect on the extent of the publication for which the defendant is responsible. Its contents would have been known only to Howard, Johnson and Baumgartel had it not been for the course of conduct on which the plaintiff embarked. I am not for one moment saying the plaintiff was not entitled to call for a copy of the letter and then institute this action. But regard must be had to what he did with it once a copy came into his possession.

290 The evidence is that the plaintiff showed the Objection Letter to his immediate family (which is entirely understandable) and to some business associates who had been "astounded" at the rejection of his membership application. I am not sure why it was necessary for those persons to see the letter rather than to know of its existence and of the fact that the plaintiff considered it to be libellous. About 15 people in all had seen it. He also showed it to five government departments. Having listened to the evidence I am not entirely sure why he felt the need to take that action. I would have thought a general query of the department so as to elicit a response concerning the matter in issue would have been sufficient.

291 In a defamation action it is not necessary to adduce evidence of actual harm because injury is assumed to flow from defamatory publications. On the other hand, where the publication is to a very small number of people, as in this case, damages may be reduced if none of the people to whom it was published believed in the truth of the material: Morgan at 1262. Of course this does not mean the damages which would otherwise be awarded for the grief or annoyance suffered as a result of the defamatory publication, rather than for reputational harm, should be reduced: Morgan v Mallard [1997] SASC 6056; (1997) 68 SASR 184 at 198 - 199.

292 But it is the case here that the content of the Objection Letter did not play a significant part in the decision of the General Committee to reject the application. Two adverse votes would have been sufficient to sink the plaintiff's chances. The evidence of Hope and Stewart was that they voted against the plaintiff without any knowledge of the defamatory statements. Howard and Johnson both said the content of the Objection Letter played little or no part in their decision to vote against the plaintiff. There is no evidence, one way or the other, whether Howard, Johnson or Baumgartel believed what was in the letter. The truth or falsity of the contents was not their primary concern.

293 I turn now to aggravated and exemplary damages. Some of what I am about to say is reflected in the initial consideration of purely compensatory damages but it is convenient to deal with them here. In support of his claim for aggravated damages the plaintiff pleads an unjustifiable refusal to tender an apology, malice, failure to make a proper investigation and unjustifiable persistence in a defence of justification. Each of those matters could amount to aggravation in the relevant sense, but not necessarily so. The aggravating conduct must amount to misconduct: Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 at 512, 514. I think the same factors are relied on in relation to the claim for exemplary damages.

294 The fundamental difference between aggravated and exemplary damages was the subject of comment by Anderson J in Hoad v Nationwide News Pty Ltd, unreported, SCt of WA; Library No 960617; 24 October 1996 at 12 - 13:

"The distinction between aggravated and exemplary damages is that aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done, whereas exemplary damages are given to punish the defendant as well as to serve as 'moral retribution or deterrence'. Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 per Windeyer J at 149. As was pointed out by Hutley JA in Pollack v Volpato [1973] 1 NSWLR 653 at 657:

'Whereas compensatory damages have to be approached by looking at the situation of the plaintiff in consequence of the wrongful act to which he has been subjected, punitive damages have to be looked at from the side of the defendant. If he is to be punished, it is his proper punishment which provides the basis for the assessment of damages.'

In Waterhouse v Broadcasting Station 2GB Pty Ltd [1985] 1 NSWLR 58 at 74 Hunt J defined aggravated damages as follows:

'Aggravated damages are more properly aggravated compensatory damages. They are awarded where either the circumstances of the publication of the matter complained of or the defendant's conduct then or subsequently make the injury to the plaintiff worse - when the ordinary compensatory damages awarded for the publication itself maybe increased. They are not awarded as a separate amount. Aggravated compensatory damages are usually awarded only in relation to the injury to the plaintiff's feeling...they are not, however, necessarily so limited, and there maybe conduct which has the effect of increasing the injury to the plaintiff's reputation as well...conduct on the part of the defendant which is relevant to the issue of aggravated damages need not be malicious, but it must be capable of amounting to conduct which was in some way unjustifiable, improper or lacking in bona fides: Bickel v John Fairfax & Sons Ltd (1981) 2 NSWLR 474 at 497; Mirror Newspapers Ltd v Fitzpatrick (1984) 1 NSWLR 643 at 653.'

In Uren v John Fairfax & Sons Pty Ltd at 154 Windeyer J discussed the criteria for an award of exemplary damages in the following terms:

'Quite apart from anything that has recently been said in the House of Lords and the Court of Appeal there must (as Walsh J pointed out in this case in the Supreme Court) be evidence of some positive misconduct to justify a verdict for exemplary damages. There must be evidence on which the jury could find that there was, at least, a 'conscious wrongdoing in contumelious disregard of another's rights'. I select that particular phrase out of many, because it has been used more than once in this Court...it is not much removed in meaning from the cynical disregard of a plaintiff's rights by a calculating defendant in Lord Devlin's illustration (in Rookes v Barnard [1964] UKHL 1; (1964) AC 1129.'"

295 This is not the most serious defamation that I have come across in the time I have been on the Bench. The extent of the publication was limited. There is no evidence of reputational harm. The plaintiff is entitled to be compensated for the grief and agony that the words complained of caused to him. In some respects the defence of justification succeeded. In other respects, although it did not succeed, it was not entirely without merit save for the way that it was put. But there are other respects in which the defence of justification has been found to be without any merit. This, and the refusal to apologise for any of the comments in the Objection Letter, warrant some addition to the basic compensatory damages by way of aggravation.

296 However, I do not think that exemplary damages should be awarded. In my view, the defendant did not act in contumelious disregard of the plaintiff's rights in a way that requires punishment. He was unwise in what he did. The great irony of this case is that the defendant could have achieved his objective (that is, to keep the plaintiff out of the Club) by a much less drastic means. This follows from my acceptance of the evidence of the various committee members as to why they voted against the plaintiff's application at the meeting on 15 July 1997. There has been a finding of malice on his part and such a finding will often result in exemplary damages being awarded. But that has to be seen in the context of the reasons as a whole and, as I have already said, it does not add much to the rejection of the defence of qualified privilege on other grounds. I note also the evidence, particularly of Johnson, that at the meeting on 5 July 1997, the defendant spoke politely and showed no vindictiveness towards the plaintiff. This is a further indication of an absence of spite or ill-will in the strict sense. I note also that the defendant did not act out of a desire to gain financial reward.

297 In my view, an appropriate award of damages is $7,500.

298 The plaintiff is entitled to judgment against the defendant for damages in an amount of $7,500. The plaintiff's claim against the Company will be dismissed. Some thought will need to be given to the appropriate costs orders and I will hear counsel in that regard.

COMPARISON BETWEEN ALLEGATIONS MADE IN LETTER COMPLAINED OF

**EVIDENCE AS TO QUALIFICATIONS MADE BY DEFENDANT IN MEETINGS

(references to paragraph in respective witness statements unless otherwise specified)

1. Not a "fit and proper person to be a member of the Club" (par 2).

• D had reported the P to the police on two occasions in the mid-1970s

• D said he believed the P was not a fit and proper person to be a member of the Club

• D said he had reported the P to the police after the P had taken some documents from his office

• D said he believed the P was not a fit and proper person to be a member of the Club

2. "[H]is manner ... is extremely rude and arrogant" (par 3).

3. During the 1970s, he ran a real estate business with Mr Brajkovich (par 4)

• "most in the industry were cautious about dealing with him because of the unethical manner in which he operated"

• read in press, "Mr Brajkovich was warned off all race tracks in the State".

• Knew P from his past dealings in real estate.
• P had told others that they had fallen out over purchase of block of flats but that what had happened was that he had purchased block that P had wanted to buy and P was furious that he missed out and was v. aggressive about it
• P had complained about Adams to media and to Land Agents Supervisory Board re: the block of flats, and that Adams had complained to the Board about the P.
• Recalled reading about Brajkovich being in trouble at the races for payments he had made to jockeys, etc. but that the Club could check that out

• D "Basically read from the letter"
• D said he had not been able to ascertain if Brajkovich had been warned off all race tracks in the State but he understood Brajkovich had been involved in some dispute with the WA Turf Club

• D "basically read from the letter"
• D recalled that Brajkovich had been called before the stewards of the WA Turf Club in relation to payments he had made to a trainer and jockeys

4. Later formed partnership with Robert Martin who was

• one of 4 big defaulting borrowers from the Teachers Credit Society

• P went into a property development in West Perth that was not successful and that was what he believed was the reason for P going into bankruptcy
• Robert Martin was his partner in that development
• Martin's charges did not involve the P (in response to a question)

• D made some reference to Martin but "I cannot recall what was said"

5. Placed into bankruptcy in around 1983/4; "brutal to his creditors and former partners" (par 6)

• P had been very hard on his creditors and partners

• Club Captain told D that it did not matter if P had filed for bankruptcy

**→**D agreed but said that that was not the point he was trying to make

**→**D said P was very hard on his creditors in his bankruptcy (but did not go into specific details)

• "I made the point that I didn't believe whether a person was bankrupt was all that relevant as it didn't bar him under the rules" - D mentioned he was told by a former partner that P was tough on his creditors but that he could not recall all details

• "had a no. of complaints against him, incl. sexual discrimination, that resulted in convictions against him"

• Convictions referred to were for overcrowding at the Racquet Club and the sexual discrimination finding in favour of Danny King
• The conviction for overcrowding was against the P or his club.

The D referred to the newspaper articles which he had attached to the letter and explained:

• There was an incident involving a girl being barred because she was apparently "too ugly"
• That incident involved a bouncer at the Racquet Club and not the P personally
• The newspaper story about the girl (to accompany the photo and headline supplied with the letter) could be provided at a later date or obtained from the newspaper

• D referred to newspaper clipping about P having been found to have sexually discriminated against a man in not allowing him entry to the Racquet Club nightclub
• D said P was owner/manager of the Racquet Club nightclub and referred to another newspaper clipping which stated that a girl had been barred for being ugly
• Explained the barring incident related to a bouncer and did not directly involve the P
• Said the clipping was relevant because the P was the owner/manager of the nightclub

• D referred to newspaper clipping about P having been found to have sexually discriminated against a man in not allowing him entry to the Racquet Club nightclub
• D said P was owner/manager of the Racquet Club nightclub and referred to another newspaper clipping which stated that a girl had been barred for being ugly
• D said that he had not provided the full newspaper article because the incident mainly involved a bounder and not the P himself

• D said that the convictions mentioned in the letter were in relation to the overcrowding at the Racquet Club, of which the P was the owner.
• D referred to the newspapers article about a judgment against the P or the nightclub for the sexually discriminating against a male patron of the club for refusing him entry
• The attached article about the girl being barred for being ugly did not involve the P but a bouncer at his club

• The newspaper articles attached explained the Danny King incident

• Mentioned that overcrowding convictions had been made in relation to the Racquet Club, and may have been recorded against the P or against the nightclub

• Mentioned that overcrowding convictions had been made in relation to the Racquet Club, and may have been recorded against the P or against the nightclub.

7. Newspaper cuttings in relation to nightclub incidents quote Judge stating that he was "not a credible witness" (par 8).

• One of the newspaper articles attached to letter refers to the P as not being a credible witness

• D referred to one of the newspaper clippings attached to letter

• D referred to one of the newspaper clippings attached to letter

8. "He was one of the 'Mr Bigs' of the Concorde Airline Club which is a pyramid selling organisation"; thousands lost money; Ministry of Fair Trading "made public statements about the legality of the scheme" (par 9).

• He had heard from a no. of people that the P. had been involved in pyramid selling
• Explained what he meant by the Concorde Airline Club and the Aeroplane Game as it had been explained to him by Maher, Martin and Summers
• He had no personal knowledge of whether or not the P. was involved in those schemes, but was relying on advice from his former partners and a solicitor.

• D "simply read that part of the letter":
• D added that he had heard (about P being involved in the Concorde Airline Club) from a number of people but that he had no personal knowledge of the P's involvement and that he was just relying on the advice of the P's former partners and a solicitor
• D emphasised that the Club ought to examine the type of activity that the P had been involved in

• D mentioned something about the P being involved in a pyramid selling scheme or that he had recently been told that by people
• D said that he had no personal knowledge of the P's involvement in these schemes and was relying on the advice of the P's ex-partners and a solicitor

9 "I am sure that there are other matters relating to his indiscretions that have been brought to the attention of the authorities over the years" (par 11).

• There may be other matters about the P of which he was not aware but that the authorities who held that info would not make it available and the club could check this out
• He had rung REIWA but they refused to provide any details of the P's history as an agent

• D said that he had made attempts to obtain info as to other matters the P may have been involved in but he had been unable to obtain any info because of the confidentiality restrictions adopted by the various authorities

• "I can recall [the def.] reading the third last paragraph of the letter out but I cannot recall any discussion about that paragraph"

10 "Over the past few years, I know of 3 members of our club that have been charged with various types of criminal offences, two have been jailed ..." (par 12).

• He did not associate the P in any way with the other members being jailed

• D "simply read out the second last paragraph of the letter"

• D said that he did not associate the P with these remarks

• D said that he did not associate the P with these comments or persons

1. P had access to all his financial statements, and that after there had been a breakdown of their relationship, he had a visit from the Taxation Office and, though he could not prove it, believed that P may have given his financial statements to the Taxation Office (Ex 45 para 76)

1. (a) I told D that I had a very strong view that certain financial documents that P certainly would have had possession of in respect to the finance for Caversham Caravan Park came to the surface in a subsequent court hearing. I told him that I speculated that he had made the documents available either to the Fraud Squad or the DPP (T500 - 501)

(b) I have no reason to believe that P provided any of my details to the Tax Office and I don't recall saying that to D (T503)

2. After their failed West Perth development, P had gone into a Part X arrangement with his creditors and that he (Martin) had traded through. Martin said that P and Steve Mailey had gone into bankruptcy (Ex 45 para 77)

2. I told D that P had entered into a Part X arrangement with his creditors (T494)

3. That the problem with the West Perth development arose from building and union problems (Ex 45 para 77)

3. That the project was effectively sold up because of a complication with the building contractor (T494)

4. P had had charges laid against him for sexual discrimination (Ex 45 para 78)

5. P had been involved in a pyramid selling game (Ex 45 para 78)

5. I had been advised by a third party that P had been involved in pyramid selling (T500)

6. I should talk to a private investigator, Bob Smith, who may be able to verify information about P (Ex 45 para 78)

7. Mr Summers did not think that P would make a suitable member for the Club (Ex 45 para 81)

7. D asked me if I thought P was a fit and proper person to be a member of the Club. I said no (Ex 64 para 28 & 29)

8. P was involved in a pyramid selling game with a lady called Cheryl Saba (previously Cheryl Oddy) (Ex 45 para 82)

8. I told D that I had heard that P and Cheryl Saba (nee Oddy) were partners in Aeroplane games some years ago and had made a substantial amount of money from such games. I made it clear to D that I had no direct knowledge of any involvement of P in pyramid selling (Ex 64 para 23 T534-535)

10. P had a judgment against him for sexual discrimination against a male (Ex 45 para 84)

11. He did not think that P was charged over the incident in which a girl had been barred for being too ugly (Ex 45 para 85)

11. I believe I said that it was the bouncer who was convicted over the incident where a person was barred for being ugly and that P was the licensee of The Racquet Club (Ex 64 para 33)

12. His mother had been sick with throat cancer and that at her lowest point of health P had set his wife up in business and had taken a number of agencies away from his mother's business (Ex 45 para 87)

12. I recall telling D about the incident involving my mother set out above (Ex 64, paras 9 - 15) (Ex 64 para 31): I do not recall telling D that Mrs Brown's business had taken a number of agencies from my mother's business. It did not happen (T536)

13. When Summer's ex-wife left his mother's business this had left his mother in a mess at a time when she could not attend to those matters due to ill health (Ex 45 para 87)

14. He believed P was the architect of (Summers' mother's) difficulties (Ex 45 para 87)

15. I spoke to Morrison in June 97 (just before I wrote the letter) and again in Oct 97 (T231, 336)

15. D rang me in June 97 seeking to verify information about P (Ex 63 par 4, T505)

16. He told me he had a bitter falling out with P and P assaulted him and he had reported that to the police (T335)

16. No evidence that prior to 3 Jul 97 Morrison told D about the alleged assault (T513-518)

17. Morrison told me he had had litigation with P arising during their partnership (Ex 45 par 136)

17. There was litigation between Morrison and P concerning the conduct of their joint business affairs. It was settled out of court (T504)

• He was aware that P was involved with a pyramid selling game when he and P shared an office in Colin Street, West Perth.

• P was involved in pyramid selling with P's wife. He had seen a photograph in a newspaper of P going over a back fence of a house that was raided by authorities.

• Morrison told me that P had been involved in a pyramid selling game with his wife and her relatives. He told me that P's wife's relatives had lost money in the scheme and P had to return the money to them.

• When he and P shared an office in West Perth he was aware that P was involved in pyramid selling. Morrison told me that he had warned P not to do it because he may get into trouble. (Ex 45 par 135)

18. I told D I knew that P participated in the Aeroplane Game. P spoke to me about his participation in the Aeroplane Game on a number of occasions. I warned P as a friend that he risked prosecution by such involvement. P told me that he was involved in the Aeroplane Game with a lady in London Court who originally introduced him to it. (Ex 63 par 6)

NOTE: In his evidence the defendant included various matters which he said were reported to him by Bob Smith (Ex 45 par 79)

and Robert Maher (Ex 45 pars 67 - 75). Neither Smith nor Maher were called to give evidence.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BROWN -v- MARRON & ANOR [2001] WASC 100 (S)

Australian Competition and Consumer Commission v Back on White Pty Ltd [2001] FCA 372

Australian Trade Commission v Disktravel [2000] FCA 62

Bullock v London General Omnibus Co [1907] 1 KB 264

Gallagher v CSR Ltd, unreported; SCt of WA (Ipp J); Library No 940163; 31 March 1994

Gladstone Park Shopping Centre Pty Ltd v Wills [1984] FCA 166; (1984) 6 FCR 496

Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40­748

Jelbarts Pty Ltd v McDonald [1919] VicLawRp 67; [1919] VLR 478

Post v Colbert (1978) 20 SASR 62

Whyte v Seenikatty, unreported; DCt of WA (Jackson DCJ); Library No 4026; 23 May 1994

1 OWEN J: These reasons relate to the costs of the action that was the subject of judgment in Brown v Marron [2001] WASC 100.

2 I have had the advantage of written submissions from the plaintiff dated 27 February 2002 and 12 March 2002 and from the defendant dated 6 March 2002. The parties agree on the general principles that apply to a costs application of this type. However, they disagree on the application of those principles to the facts of the case.

3 The plaintiff was largely successful in the action against the first defendant. He asserted that the letter the subject of the action was defamatory and I found that it was. The plaintiff alleged that the letter bore a number of defamatory imputations. He established most, but not all, of them. The defendant asserted (among other things) that the imputations, if established, were true or that they were communicated on an occasion of qualified privilege. The defendant failed to establish those defences. However, there were some aspects of the defences on which succeeded. He satisfied me that one of the imputations was true and that the allegation of spite (as part of the retort to the defence of qualified privilege) had not been made out.

4 I accept that the several imputations are not separate causes of action. Nonetheless, in the circumstances of this case they are properly to be characterised as separate issues and success or failure can be reflected in a differential costs order.

5 The defendant also referred to a notice to admit facts dated 17 August 1999 which he delivered to the plaintiff. It should be apparent from pars 191 to 198 of the judgment that the only part of the notice on which the defendant could be said to have prevailed at trial was that in item (1). In my view that is not a sufficiently weighty matter to reduce the costs to which the plaintiff is otherwise entitled.

6 In a letter dated 20 March 2002 from the defendant's solicitors it is said that had the second defendant not been joined the first defendant would have continued, as he had done to that time, to act in person. I have no reason to doubt that statement. However, I do not think it should bear on the ultimate disposition of the costs problem.

7 As between the plaintiff and the first defendant I think the starting point is that the plaintiff was largely successful and should therefore have the costs of the action. However, I must also take into account that the defendant was successful on some identifiable issues which, in my view, extended the length of the trial. In the context of the case it would be very difficult to isolate the issues on which the defendant has been successful and award him the relevant costs. I think a preferable approach is to take a broad view of the relative time and effort attributable to those issues and to make a corresponding reduction in the costs to which the plaintiff is otherwise entitled. An approach of this type requires an intuitive assessment based on the way the trial was conducted. It is not an exact science. In my view, the best way to do it is to apply to the plaintiff's costs a percentage reduction based on that intuitive assessment.

8 I think the plaintiff ought to recover 80 per cent of the costs of the action as against the first defendant.

9 The plaintiff wholly failed against the second defendant. I accept, as the plaintiff has said in the written submissions, that the allegations against the second defendant did not take up a great deal of time. Nonetheless, they represented a discrete issue, based on the use by the first defendant of the second defendant's letterhead and his method of operation in relation to the family company. The plaintiff wholly failed in this regard. In my view it is appropriate that the plaintiff pay the second defendant's costs of the action.