Bushara v Nobananas Pty Ltd

Supreme Court of NSW|2013-03-22|Before: Rothman J

Judgment 1George Bushara sues Nobananas Pty Ltd and Warren Bates claiming they have defamed him. The second defendant, Warren Bates, is the principal of Nobananas Pty Ltd and no relevant distinction should be made between them as to liability or damages in these proceedings. I will hereinafter, except where necessary to differentiate between the two, refer to them together as "Nobananas". 2Mr Bushara and Nobananas sell electric engines that may be fitted to push bikes. They are in competition. On 8 September 2010 Nobananas published a website critical of Mr Bushara. Mr Bushara complains that the website is defamatory and alleges that the contents of the website contain imputations that: Mr Bushara is a rogue; is, in his capacity as seller of bike engines, unconcerned about the quality of those engines; that Mr Bushara lacks integrity; that Mr Bushara cheated Nobananas; that Mr Bushara is a convicted criminal and, as a consequence, persons should not do business with him; that Mr Bushara is a compulsive liar; that Mr Bushara is a crook; and that Mr Bushara "rips off" customers. 3The terms of the website, unfortunately, require repeating: [HEADER OMITTED] 1 "Bike Engine Good Buying Guide 2 ZBOX PRECISION 3 BICYCLE ENGINE 4 There is only one- 5 Why compromise? 6 Which bike engine kit to buy? 7 There are a number of good conversion kits 8 on the Australian market these days but 9 there is still a few rogue operators who are 10 unconcerned about quality or honesty. 11 Please use these considered notes as a 12 buying guide and you will be assured of 13 getting a good quality engine kit that gives 14 thousands of klms of reliable service. 15

4The defendants (each of them) admit that the website is their publication and while formally denying that, on its proper meaning, the publication is capable of being defamatory, have put little or nothing in opposition to that claim. 5In the alternative to its formal denial that the publication is defamatory, Nobananas raises its Offer of Amends as a defence (or partial defence) to the defamation order, damages arising or the extent of those damages. 6Further to the foregoing, Nobananas says that the publication, to the extent it was defamatory and conveyed the alleged imputations, was substantially true or did not further harm the reputation of Mr Bushara. The defendant also raises qualified privilege, honest opinion and comment, and that the publication was in answer to an attack initiated by Mr Bushara.

Defamatory meaning 7It is now trite that the test for whether a publication is defamatory, or conveys defamatory imputations, is whether it could reasonably be postulated that "the ordinary reasonable reader" would consider that the publication conveyed the meaning alleged. 8The ordinary reasonable reader is said to be of fair average intelligence, fair minded, not overly suspicious, not naive, not straining or forcing meanings, not "avid for scandal" and one who reads the entirety of the publication about which complaint is made: Amalgamated Television Services v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158 at 165, per Hunt CJ at CL; Haddon v Forsyth [2011] NSWSC 123, per Simpson J. 9In the words of Hunt CJ at CL in Marsden, at 165B: "The ordinary reasonable meaning of the matter complained of may be either the literal meaning of the published matter, or what is implied by that matter, or what is inferred from it: Jones v Skelton (at 650; 1065). In deciding whether any particular imputation is capable of being conveyed, the question is whether it is reasonably so capable, and any strained or forced or utterly unreasonable interpretation must be rejected: Jones v Skelton (at 650; 1065). The ordinary reasonable reader (or listener or viewer) is a person of fair average intelligence, who is neither perverse (ibid at 7), nor morbid or suspicious of mind, nor avid for scandal: Lewis v Daily Telegraph Ltd (at 260). That person does not live in an ivory tower but can and does read between the lines in the light of that person's general knowledge and experience of worldly affairs." 10The process by which one determines what, if any, defamatory imputations have been conveyed is a process that ascertains the objective meaning of the publication in its context, and does not deal with the subjective understanding of any particular reader. In Haddon, Simpson J described the process as a process "undertaken, in a sense, in an evidentiary vacuum". Her Honour cited and relied upon the judgment of Brennan J in Readers Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 at 506, 507, and at [16] said: "[16] In Lamb, Brennan J (as he then was, and with whom Gibbs CJ and Stephen, Murphy and Wilson JJ agreed) said: 'Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation ... being a standard common to society generally ...' (p 506, internal references omitted) Later, his Honour said: 'The defamatory nature of an imputation is ascertained by reference to general community standards, not by reference to sectional attitudes.' (p 507) His Honour added that, notwithstanding that, a particular impact of a defamatory imputation may be proved. This, of course, was in relation to the assessment of damages." 11As stated, there is no dispute, on the pleadings, that Nobananas and/or Mr Bates published the material that is found on the website and is repeated above. The website was accessible to most of those persons interested in the purchase of electric motors of the kind traded by both Nobananas and by Mr Bushara and assessed by some. The Court is unaware of the numbers of persons who obtained access. 12In construing a publication of this kind, a common sense meaning is given to the publication and, in that sense, the process is not the same as the process by which one would construe a contract between the parties. Inferences are available which are inferences that the ordinary reasonable reader would derive. 13Likewise, a common sense approach is taken to the existence of imputations and answering whether the imputations alleged by the plaintiff (or imputations to the same or similar effect, or not different in substance) have been conveyed.

The imputations 14Before dealing with each of the imputations alleged, it is necessary to point out that the context in which this publication is made is firstly a context that is intended to give the impression that it is an independent assessment of the quality of electric motors. It is a publication on the Internet and therefore one that should be treated more seriously than some kinds of publications. Secondly, it forms part of a publication which is promulgated as a "Good Buying Guide". It then purports to advise readers which bike engine kit to buy. It represents "independence". 15Mr Bushara alleged that the publication conveys the following imputations of him: "A. The plaintiff is a rogue (line 10). B. The plaintiff, as the seller of bike engines, is unconcerned about the quality of the bike engines that he sells (line 11). C. The plaintiff, as the seller of bike engines, is unconcerned about honesty in the sale of bike engines (line 11). D. The plaintiff is not honest (line 44). E. The plaintiff lacks integrity (lines 44-45). F. The plaintiff cheated the first defendant (lines 45-46). G. The plaintiff is a convicted criminal such that persons should not do business with him (lines 46-47). H. The plaintiff is a compulsive liar (lines 46-47). I. The plaintiff is a crook (line 49). J. The plaintiff engages in dodgy business practices (lines 56-57). K. The plaintiff rips off customers (lines 59 and 78)." 16MBB Imports (hereinafter, "MBB") is a registered business name owned by Mr Bushara and for which he has an ABN. 17There is no doubt that the site is critical of Mr Bushara and his business. The publication states that there are "a number of good conversion kits" (line 8) and then refers to the existence of "a few rogue operators" (line 10). The remainder of the article, and the context of that statement, makes clear that Mr Bushara is one of the operators that the publication categorises as "a rogue operator" and the imputation in paragraph 2A of the Statement of Claim is conveyed. 18Further, again in reference to Mr Bushara, the publication imputes to him that he is a rogue operator "unconcerned about quality or honesty" (line 11) (imputation 2B) and, in so doing, confirms the existence of the second imputation pleaded. 19The immediately preceding paragraph also discloses that imputation 2C arises from an ordinary reading of the publication by the ordinary reasonable reader. 20The Statement of Claim (in pleading paragraph 2D) pleads that there is an imputation that the plaintiff is not honest. This imputation adds nothing to the imputation in paragraphs 2C and 2E of the Statement of Claim. Mr Bushara does not press the imputation in paragraph 2D. Likewise, Mr Bushara does not press the imputation in paragraph 2J and it adds nothing to the other imputations. These alterations were formalised by the filing of an Amended Statement of Claim. 21At line 42 of the publication, recited above, Nobananas refers to George Mohammed as the worst of the rogue operators. On the evidence before the Court, at least one person who read the publication identified it as referring to Mr Bushara and such identification was reasonable. 22As a consequence of the foregoing, the reference to Mr Bushara as "George Mohammed" confirms the imputations that Mr Bushara lacks integrity (lines 44 - 45) (imputation 2E), cheated Nobananas (or the business name under which they traded (lines 45 - 46) (imputation 2F), is a convicted criminal and a compulsive liar with whom one should not do business (lines 46-47) (imputations 2G and 2H), is a crook (line 49) (imputation 2I), and rips off customers (lines 59 and 78) (imputation 2K), are made out. 23Each of the foregoing imputations is conveyed by the publication and is defamatory. 24As a consequence of the publication of the website and the imputations that arise therefrom, Mr Bushara says he has suffered damage and claims aggravated damage. 25As stated, Nobananas denied that the foregoing imputations arose from the publication of the website, but the denial was formal only. No evidence was presented, nor were substantial submissions made, suggesting that the imputations or allegations did not arise from the publication of the website. Nobananas relied, primarily, on the effect of an Offer of Amends under Part 3, Division 1 Defamation Act 2005. It also relied upon justification being truth, contextual truth, qualified privilege, honest opinion and comment and reply to attack. 26Nobananas also submitted that the material, if defamatory, was unlikely to cause damage and was, in that sense, trivial and relied on the failure of Mr Bushara to mitigate his damage, if any. 27As earlier stated, the process by which one determines what, if any, defamatory imputations have been conveyed is a process that ascertains the objective meaning of the publication in its context, and does not deal with the subjective understanding of any particular reader. In that sense, as described by Simpson J in Haddon, supra, the process is "undertaken, in a sense, in an evidentiary vacuum". 28Lastly, the process by which defamatory imputations are conveyed must be contrasted with the ascertainment of the person defamed. As earlier stated, the terms of the publication were understood by at least one person, acting reasonably, to refer to the claimant. There is evidence to that effect. Further, the references to the business were references to Mr Bushara's business and, the evidence of Mr Bates, principal of Nobananas and the second defendant, was that he understood Mr Bushara's name was George Mohammed, as stated in the publication. For my own part, I have no doubt that the name George Mohammed was a reference to the plaintiff. Further the publication as a whole refers to Mr Bushara, through his business name and by the identifying personal attributes, such as his first name, the place of his business, that it was conducted in the manner described and other such matters. I do not take account of the intention of Mr Bates to refer to Mr Bushara.

George Bushara 29The plaintiff gave evidence. He attempted to reduce his evidence to writing, which was initially Marked For Identification "A" and ultimately, with some deletions, tendered and marked Exhibit C. 30Mr Bushara was cross-examined at some length. He was cross-examined about the nature of his business, his suppliers and the quality of his engines. He was further cross-examined about his interaction with Mr Bates and whether he introduced himself as "George Mohammed". This last matter, I assume, was put on instructions. 31The interaction with Mr Bates included cross-examination as to the purchase of a number of engines from ZBox and the circumstances of the return of some of them. I will return to this issue. 32Mr Bushara commenced selling Skyhawk engines in 2007 and continued selling them. He was selling them in 2010 and still has stock as at the date of hearing. Mr Bushara advertises those engines online. 33Mr Bushara carries on business as MBB Imports, a business name referred to in the article subject to these proceedings. Mr Bushara was cross-examined about a number of the advertisements placed online by MBB Imports. It was suggested to him that the advertisements were misleading or deceptive in that they suggested that some of the engines were "American premium brand". This criticism was particularly made in relation to the Skyhawk. It was further suggested to Mr Bushara that the engine described as 80cc had an engine displacement of less than 70cc. 34Further, Mr Bushara was cross-examined about his criminal antecedents, allegedly relevant to the truth of the imputation in 2G of the Statement of Claim that Mr Bushara is a convicted criminal with whom people should not do business. 35Mr Bushara was convicted of a number of offences in to 2001. They include the offences of drive whilst disqualified (two counts), drive on the road while licence suspended, use an uninsured motor vehicle, use an unregistered vehicle on a road area, unauthorised possession of a prohibited weapon and common assault. 36Mr Bushara was also cross-examined about a number of other alleged offences. The most severe penalty imposed upon Mr Bushara was a nine-month bond for the charge of assault. Essentially Mr Bushara otherwise denied criminal involvement. 37Notwithstanding lengthy and thorough cross-examination, Mr Bushara showed himself to be honest and open in the evidence he gave. As to the criminal offences (for which there was a conviction and/or that were put to him), Mr Bushara was open about his conduct, unsophisticated and unguarded. 38As to the major issue associated with an advertisement published by MBB claiming that MBB Imports' product, the complete F80 Engine Kit, is the "same what ZBox sells", Mr Bushara openly and honestly admitted to its publication and asserted its truth. The full context of the advertisement needs to be understood and it is copied below: 39While the foregoing advertisement does not suggest or advertise the product as an American premium brand, some other products were so advertised. Mr Bushara gave evidence that he did not intend, by that term, to signify that the engines were manufactured in America, only that they were a brand that was popular or most popular in the United States. The wording of the advertisement was changed, at some point, to read "American most popular brand", which alteration confirms Mr Bushara's expressed view. 40Generally, I accept Mr Bushara's evidence. There were occasions when Mr Bushara was inconsistent in his evidence, but they were largely issues associated with Mr Bushara's language difficulty or misunderstanding of the question involved. 41The foregoing does not suggest that Mr Bushara could not speak and understand English. English, however, was not his first language and there was, for that reason and others, some misunderstanding of what was being asked. My view is that Mr Bushara was an honest and generally reliable witness. 42I accept Mr Bushara's description that his criminal history is "not serious". The assault was at the lowest end of the kind of criminal conduct covered by such an offence and, by definition, did not occasion actual bodily harm (see s 61 of the Crimes Act 1900). 43I do not underestimate the criminal offence nor the offences of driving an uninsured and unregistered vehicle, or possession of a dangerous weapon, each of which involved public safety, but in the context of these proceedings I do not consider Mr Bushara a person of bad character, nor a person whose criminal convictions are such that a person should be reluctant to do business with him. None of the offences involved dishonesty or the occasioning of damage to any person or property. 44Further, I accept that Mr Bushara genuinely and honestly believes that the F80 engine kit he was marketing was the same as or equivalent to the Z80 that ZBox was marketing.

Warren Bates 45Mr Bates gave evidence at length in chief and was cross-examined briefly by Mr Bushara. 46Mr Bates is no longer the owner of ZBox; nor does he operate the company. 47During the course of his evidence, Mr Bates asserted that there was a significant difference between the Z80 engine and the F80 engine to which reference has been made. 48Mr Bates' evidence was that he saw the advertisement (Exhibit 4 with the offending words "same what ZBox sells") about eight weeks before he published the material about which Mr Bushara complains in his Statement of Claim. Mr Bates' complaint was that Mr Bushara was comparing Mr Bates' and/or ZBox engines with a very low quality engine. It was Mr Bates' opinion that Mr Bushara's engine was inferior. No expert evidence was adduced to support that opinion. 49Mr Bates gave the impression that he, as the person whom he considered to be the leading vendor in the market, had a right to be protected from statements that he considered insulting. That certainly was the impression one would gather from his demeanour. 50Mr Bates, at the commencement of his examination in chief stated that he studied mechanical engineering and had a Diploma in Mechanical Engineering (Transcript page 134). Lest that be said in error, he was asked by counsel: "Is that right?", to which Mr Bates responded in the affirmative. 51During cross-examination, when Mr Bates was asked to produce evidence of his diploma, Mr Bates admitted that he did not complete the mechanical engineering course and he has no certificate (Transcript page 157). 52Mr Bates also admitted, in cross-examination, notwithstanding his earlier explanation for the terms of the publication and the instructions on which Mr Bushara was, on this topic, cross-examined, that Mr Bushara never introduced himself as George Mohammed, the name with which he was designated in the published article. 53Further, when asked by his counsel whether he had any practical experience in engines of the kind in dispute in these proceedings, Mr Bates referred to a seven-week small engine maintenance course (one night per week) which, in Mr Bates' opinion, "just about covered everything [one] needed to know on a two-stroke engine", but had no practical experience with engines (Transcript pages 179 - 180). 54There were a number of occasions on which I was required to interrupt Mr Bates during the course of cross-examination to remind him to answer the questions that were being asked. To be fair to Mr Bates, for reasons associated with the fact that Mr Bushara was representing himself, the questions were not always easily understood or in a form that would ordinarily be admissible. At times, to his credit, Mr Evatt did not object to questions that were probably objectionable, at least in form. Nevertheless, Mr Bates showed an irritation with the proceedings and superciliousness in his attitude. 55No explanation was given for the direct inconsistency between evidence as to the obtaining of a diploma and the failure to complete the course. Further, no basis was given for the expression of expert opinion as to the capacity or worthiness of the engines sold by Mr Bates, or his company, or those sold by Mr Bushara, given the lack of Mr Bates' expertise. Lastly, while an explanation was proffered as to why Mr Bushara was referred to as George Mohammed, I consider that explanation disingenuous. 56Mr Bates was an unconvincing witness, whom I do not believe. 57Fortunately, there is little direct contest in the evidence. The only circumstance, which comes close to being a direct contradiction in evidence, is the situation surrounding the purchase by Mr Bushara of a number of engines from Mr Bates and/or Nobananas and their return. Ultimately that contradiction depends upon whether the engines returned were initially purchased from Mr Bates. Mr Bates asserted they were not. Mr Bushara asserted they were. 58Mr Bates' evidence on the source of the engines repeated an assertion by "his factory" in China. No direct evidence was adduced by Nobananas as to the original source of the returned engines. At the same time, I have no doubt that Mr Bates genuinely believed that he had been the subject of improper or inappropriate practices by Mr Bushara. It is unnecessary to summarise the evidence of the transaction in any more detail. I accept Mr Bushara's version. 59Another difficulty with the evidence of Mr Bates was his reference to the difference in the factory producing engines that Nobananas marketed, as compared to the factory producing engines that Mr Bushara marketed. 60In cross-examination it became clear that each of Mr Bushara and Mr Bates utilised factories that did not, themselves, manufacture any components, but sourced each component from another manufacturer and assembled the components into a carton or box for sale as engines and for delivery to Australia. The disparaging comparison by Mr Bates of Mr Bushara's engines in comparison to Nobananas' engines (or ZBox) was, at least for that reason, unsatisfactory. 61Moreover, the opinion on the comparison in quality, expressed by Mr Bates, was never substantiated by expert evidence, and I do not accept the comparison.

Incidental evidence 62Other evidence was adduced. Mr Tanyous gave evidence as to his recognition of MBB Imports and Mr Bushara in the website publication and its effect on his view of Mr Bushara and his product. It seems that Mr Tanyous, having seen the publications of both Mr Bushara and Nobananas, took the view that he would deal with neither. 63Mr Kneller read the article and considered it a personal attack on Mr Bushara. He had been a customer of Mr Bushara for at least four years and had never dealt with ZBox. He attested to Mr Bushara's business integrity. 64Mr Hayden Waymouth gave evidence of purchases from Mr Bushara and MBB Imports through the Internet. Mr Waymouth was trained at Toyota and had a certificate as a vehicle builder. He was not a qualified mechanic, but had significant practical experience with two-stroke engines. 65He purchased an engine on ebay. I consider that Mr Waymouth was a believable witness who gave evidence, from his significant experience, of the difficulties he had with the kit or kits Mr Bushara sold him for his and others' bikes. He also gave evidence of the treatment meted out by Mr Bushara when a complaint was made. 66The difficulty with the engine was that the kit, which Mr Waymouth purchased, did not have exhaust studs, or had no thread in which to screw them. On clarification it became clear that the thread should have been a six-millimetre thread, but in fact was an eight-millimetre thread and was therefore too large for the screws to fit and hold. Mr Waymouth eventually managed to adapt the engine kit to the bike, but with some difficulty. 67Another difficulty, with an engine he was asked to install for another person, was that on tightening the mounting lobes of the carburettor, two lobes cracked off. 68I accept that Mr Waymouth had difficulties with the kits to which he referred, each of which was a kit bought from Mr Bushara and/or MBB Imports. It was Mr Waymouth who compiled the "blog" that was included in the impugned publication to which these proceedings relate. 69Notwithstanding that stated acceptance, I do not accept that Mr Waymouth's experience, above, would be sufficient to justify (or to prove the truth of) the imputation as to Mr Bushara's business ethics or practices (imputations 2A, 2B, 2C, 2D, 2E or 2K).

Truth and contextual truth 70In one sense, each plaintiff in proceedings for defamation claims that the imputations have been alleged and the publication made falsely. Notwithstanding that general practice, a defamatory imputation is presumed to be false and the defence of justification because of truth, if there be one, is for the defendant to prove. It is the defendant that bears the burden of proving that the statements in a publication, or the imputations conveyed by the publication, are true or substantially true. 71In any event, Mr Bushara has testified to the falsity of the imputations against him, with one exception. The exception is that part of imputation 2G that refers to Mr Bushara being a convicted criminal. However, the imputation goes well beyond the proposition that Mr Bushara is a convicted criminal and alleges that he is a convicted criminal that persons should not do business with because of his criminal activity. 72The burden of proof issue, to which mention has just been made, has been made clear by the legislature in promulgating ss 25 and 26 of the Defamation Act. The defendant must prove that the defamatory imputation carried by the publication of which complaint is made is substantially true. 73Likewise, it is the defendant that bears the onus of proof of the matters to which s 26 of the Defamation Act refers. In that regard, in order to succeed on contextual truth as a defence, Nobananas must prove that the publication has imputations that are substantially true and the defamatory imputations (that have not been proved to be true) do not further harm the reputation of Mr Bushara because of the substantial truth of the imputations in the publication that are substantially true. 74The only imputation conveyed by the publication that has been shown to be substantially true is the imputation, about which no complaint is made, that Mr Bushara is a convicted criminal. Nevertheless, the imputations about which complaint is made and which are also conveyed by the publication further harm the reputation of the plaintiff in a significant and substantial way. 75Because Mr Bates and Nobananas rely upon the circumstance of the return by Mr Bushara of engines he alleged were purchased from Nobananas, it is necessary, briefly, to deal with the fundamental issue associated with that allegation. 76In or about 2005, Mr Bushara bought a number of bicycle engines from the first defendant. Initially he bought only 48cc engines. Some of them were exchanged for larger engines. Shortly after purchasing or exchanging the engines, Mr Bushara sought to return a number of them as faulty. Nobananas reimbursed Mr Bushara. 77Subsequently, the evidence before the Court discloses, Mr Bates was told by "his factory" in China, that the returned engines were not ZBox engines and were not engines purchased from Nobananas. As earlier stated, Mr Bushara denies this allegation. 78The incident is a significant one in the relationship between Mr Bushara and Nobananas. It is an incident upon which Nobananas relies for the truth of one or more of the imputations and for contextual truth relating to the other imputations. 79As earlier stated, no evidence was adduced to prove that the engines returned were not engines purchased from Nobananas. The fact that Mr Bates was told that the engines were not ones for which Nobananas was responsible, does not make it true. The fact that Mr Bates believed the statements by the Chinese factory is not a defence to the publication of the defamatory imputation: see Shah v Standard Chartered Bank [1999] QB 241 CA at 263; Curistan v Times Newspapers Ltd [2008] 3 All ER 923 at [80]; Lewis v Daily Telegraph [1964] AC 234 at 260 and 284. 80Neither truth nor contextual truth has been proved.

Qualified privilege and reply to attack 81In Cantwell v Sinclair [2011] NSWSC 1244, I discuss the defence of qualified privilege by reference to the judgment of the High Court in Cush v Dillon; Boland v Dillon [2011] HCA 30; (2011) 243 CLR 298 at 305 - 307. I referred to the defence of qualified privilege as being clarified by the judgment in Dillon and referred to the continuing controversy as to the proper application of the defence. The passage in Cantwell v Sinclair is in the following terms: "[111] The principles that define the defence of qualified privilege have been the subject of much authority. The High Court, recently, had occasion, once more, to determine the issues. It said: '[12] The defence of qualified privilege is based upon notions of public policy, that freedom of communication may in some circumstances assume more importance than an individual's right to the protection of his or her reputation. The question of whether the person making a defamatory statement was subject to some duty or was acting in the protection of some interest, in making the statement, is to be understood in this light. [13] It was therefore encumbent [sic] upon Mrs Dillon to establish that she had a duty to convey the information about the rumour to Mr Croft. She gave evidence that she felt such an obligation, but of course this could not be determinative of the question for the trial judge, namely whether there was a duty of a kind which created the occasion to make the statement, in which case the privilege attached to it. That question fell to be determined by a consideration of the positions of Mr Croft and of Mrs Dillon within the CMA, the nature and importance of the matters conveyed and the relationship of the defamatory statement to those matters. Mrs Dillon's evidence as to the sense of obligation she felt, if accepted, may be relevant to the question of malice. It will be necessary to say something more about the two questions and the relationship between them. [14] ... It may be seen from the passage from Toogood v Spyring above that the defence of qualified privilege is sufficient to overcome the law's presumption of malice (also referred to as "implied malice"), a presumption which is based upon the making of a false and defamatory statement. The protection given by the privilege is, however, lost if the person making the statement did so for an improper motive. "Express malice" is the term of art used to describe the motive of a person who uses a privileged occasion for some reason not referable to the duty or interest pursued. In the joint judgment in Roberts v Bass it was said that the privilege is qualified by the condition that the occasion must not be used for some purpose or motive which is foreign to the duty or interest which protects the making of the statement. [15] ... A conclusion of express malice requires a finding that the maker of the statement was actuated by some improper purpose or motive, which is to say one not connected to the furtherance of the duty or interest so found. The nature and the extent of the duty or interest must be considered before the question of malice is addressed. In Roberts v Bass, Gleeson CJ observed that the "kind of malice that defeats a defence of qualified privilege at common law is bound up with the nature of the occasion that gives rise to the privilege".' (Cush v Dillon; Boland v Dillon [2011] HCA 30; (2011) 85 ALJR 865 at 868-869, per French CJ, Crennan and Kiefel JJ.) [112] Dillon, supra, is the latest in a series of cases in which qualified privilege has been a matter of controversy: see Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; (2004) 218 CLR 366; Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1; Aktas v Westpac Banking Corporation Limited [2010] HCA 25; (2010) 241 CLR 79. The controversy was largely evidenced in intermediate courts of appeal and before trial judges: see, for example, Holmes a Court v Papaconstuntinos [2011] NSWCA 59; Bennette v Cohen [2009] NSWCA 60; Goyan v Motyka [2008] NSWCA 28. At trial level, the controversy has been slightly different, albeit without the benefit of the statement of principle in Dillon; see Cush v Dillon and Boland v Dillon [2009] NSWDC 21; Papaconstuntinos v Holmes a Court [2009] NSWSC 903; Brett HOLMES v Andrew FRASER [2008] NSWSC 570; Megna v Marshall [2010] NSWSC 686; Manefield v Child Care NSW [2010] NSWSC 1420; and Haddon, supra. [113] The principles to be applied have, as is obvious from the citation of Dillon, above, been clarified: (i) Qualified privilege is based upon public policy, namely, in certain circumstances freedom of communication is a more important aspect of democratic government than an individual's right to protection of his or her reputation: Dillon, supra, at [12]; (ii) It is first necessary for a trial judge to determine whether there was a duty of a kind which created the occasion to make the statement to which qualified privilege attaches: Dillon, supra, at [13]; (iii) The determination of whether the occasion arose to which qualified privilege attaches is determined by consideration of the nature and importance of the matters conveyed, the relationship of the defamatory statement to those matters and the relationship between the maker of the statement and the person to whom the statement is made: Dillon, supra, at [13]; (iv) The relationship between the maker and receiver of the statement is a requirement of a reciprocity of duty or interest necessary to attract the defence of qualified privilege, meaning, that the maker of the statement has a duty or interest in making it and the receiver of the statement has a duty or interest in receiving it: Dillon, supra, at [12], [13], [32], [54]; Bashford, supra, at [9], [10], [137]; Aktas, supra, at [22], [41]; (v) Qualified privilege, if it were to exist, is defeated by an improper motive, otherwise termed 'express malice', being a reason for the making of a statement not referable to the duty or interest pursued: Dillon, supra, at [14], [29]; (vi) Qualified privilege is also lost for so much of the statement that is not relevant and pertinent to the discharge of the duty or the safeguarding of the interest: Dillon, supra, at [19]; (vii) While knowledge that a statement is untrue may be evidence of malice, neither lack of belief in the truth of the statement nor objective falsity of the statement is sufficient to destroy qualified privilege: Dillon, supra, at [28], [29]. [114] As was pointed out by the High Court in Bashford, supra, at [10], stating the principles at a high level of abstraction does not ease the difficulty in the application of the principles. Fundamentally, the controversies that have existed at trial level relate to the determination of whether there is a reciprocity of interest (assuming the trial judge has embarked upon that process), whether the motive for the making of the statement is an improper one and whether something said in the statement is irrelevant to the reciprocal duty to publish and receive the statement. [115] While analysis by analogy is problematic and the issues are never exactly the same, there is significant discussion on the difference between an interest relating to particular matters and a high level of abstraction, under the rubric of 'public interest', as part of the requirements of fair comment under the former common law principles and under the Queensland Code. At one level, the highest level of abstraction, almost all issues could be pertinent and/or relevant to an interest in making and receiving a publication. [116] Thus, at the highest levels of abstraction, in a democracy such as Australia, it may be said that every citizen has a duty or interest in open government or government that is not corrupt and almost every other citizen has a duty or an interest to convey matters that impede open government or the discovery of corruption. As a consequence, any allegation of conduct by an official that impedes open government and encourages corruption or facilitates it would be subject to qualified privilege. That qualified privilege would remain even though the imputations and/or allegations were untrue. [117] In discussing 'public interest', in the context just described, the High Court said: 'At common law, it would be meaningless to speak of a fair comment on "organised crime and corruption in Queensland" or a fair comment on "the existence of illegal activities" or a fair comment on "trafficking in illegal drugs" without the comment referring, expressly or impliedly, to the conduct of individuals whose office or public activities invited public criticism and discussion. Thus, a comment on the conduct of a private individual who had secretly engaged in organised crime could not be justified at common law as a fair comment on a subject of public interest, no matter for how long or how heavily he or she had been engaged in organised crime. It is the failure to grasp this point that has led to the view that "some subject of public interest" ... includes general abstractions unrelated to the conduct of particular individuals.' (Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183, footnote 115, per Dawson, McHugh and Gummow JJ.) [118] Of course, the issue with which the Court is concerned when dealing with qualified privilege is very different from the question of 'public interest' to which the High Court was referring in Bellino, supra. Nevertheless, the difficulties associated with general abstractions are as acute. The difficulty, however, is overcome when one combines the considerations of the matters conveyed and the relationship of the defamatory statement to those matters, with the relationship between the maker of the statement and the person to whom the statement is made (see 113 above). [119] There is a requirement that there be a relationship between the maker of the statement and the person to whom the statement is made such that the matters conveyed (including the defamatory statement) give rise to a duty or interest to make the statement and a duty or interest to receive it. [120] Thus, in Aktas, supra, the bank's interest to communicate the information arose from its desire to refuse to pay on the cheque that had been presented. But the person who received the information had no interest in receiving it, unless, as a matter of objective fact, the drawer of the cheque had insufficient funds to meet its payment. Therefore, where the notice to dishonour a cheque from a bank inaccurately asserts that the drawer does not have funds to meet the payment, it is a defamation not protected by qualified privilege: Aktas, supra, at [41], per French CJ, Gummow and Hayne JJ. [121] In Dillon, supra, on the other hand, both the maker of the communication and the receiver of it had an interest and/or duty, respectively, to make and to receive. Even if the material be defamatory (by which term I here mean untrue and damaging of reputation), it is necessary for the person in the position of the receiver of the communication, in the Dillon situation, to be armed with the material necessary to investigate the allegation and/or to make decisions based on possible repercussions. The existing relationship between the maker and receiver of the communication in Dillon, supra, was such that, even though untrue, there was an interest to make and receive the allegation." 82Since the judgment in Cantwell v Sinclair, the High Court has further clarified qualified privilege, as has the Court of Appeal: see Papaconstuntinos v Holmes a Court [2012] HCA 53; (2012) 293 ALR 215 and Harbour Radio Pty Ltd v Trad [2012] HCA 44; (2012) 86 ALJR 1256. The controversy as to the application of the defence of qualified privilege continues unabated: see Marshall v Megna; Megna v Tory; Tory v Megna [2013] NSWCA 30, delivered 25 February 2013. 83In Papaconstuntinos, supra, the majority of the High Court made clear, once more, by reference to the judgment in Bashford, that a reciprocity of duty or interest was necessary, being a duty or interest in the publisher to publish and a duty or interest in the reader to receive the communication. In that sense, the passages, to which reference has already been made in Cantwell v Sinclair, do not need alteration, save that the High Court in Papaconstuntinos has clarified that statements are privileged if they are "fairly warranted" and they are "fairly warranted" "if they are relevant to the duty sought to be discharged or the interest sought to be protected": Papaconstuntinos at [32]. 84It is only in exceptional circumstances that the publication of defamatory material to the general public will meet the requirements of reciprocity: Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520; and Marshall v Megna, supra at [31] (per Allsop P) and [80] (per Beazley JA), referring to and citing Trad and Lange at 570. 85As cited by Beazley JA in Marshall v Megna, the High Court, while accepting the use of vigorous language as a characteristic of public debate in Australia, reiterated that "in the conduct of public affairs, the law, in general, does not encourage persuasion by public vilification and by an abdication of reason": Marshall v Megna at [81], citing Trad at [27]. 86The judgment of the High Court in Trad makes clear that the defence of reply to attack is one aspect of the more general defence of qualified privilege. In Trad the majority said: "[25] In Mowlds v Fergusson, Dixon J explained what should be accepted as the applicable law to a case such as the present in the following terms: 'Any communication which the defendant might make tending to vindicate his conduct or rehabilitate his reputation would be a subject of privilege provided that the person to whom he made the communication were one proper to receive it. It is commonly said that the recipient must possess an interest or be under a duty which corresponds with the interest of the person making the communication: See, eg, White v J & F Stone (Lighting and Radio) Ltd, a case with which Somerville v Hawkins and Taylor v Hawkins should be compared. Where the defamatory matter is published in self-defence or in defence or protection of an interest or by way of vindication against an imputation or attack, the conception of a corresponding duty or interest in the recipient must be very widely interpreted. In Adam v Ward the interest of every citizen in the welfare of the army seems to have been considered enough by Lord Atkinson, who alone of their Lordships emphasized the necessity of reciprocity.' [26] Contrary to the respondent's submission, this reasoning is not at odds with what had been said in this Court, before Adam v Ward was decided, in Norton v Hoare [No 1] by Barton ACJ and Isaacs, Gavan Duffy and Rich JJ. In Norton, Isaacs, Gavan Duffy and Rich JJ referred to various authorities which to them showed: 'that in defence of property an assault on the person or the property of another may be justified, if necessary for the protection of the defendant's property. And see Halsbury's Laws of England. Though couched in somewhat different terms, the rule is substantially based on the same fundamental considerations as that with regard to privileged communications formulated in Toogood v Spyring, which, as Parke B says, must be "fairly warranted by any reasonable occasion or exigency", and, of course, honestly made, and these facts must, by analogy to Wright v Ramscot, appear in the plea.' The phrase 'honestly made' acknowledges that malice will defeat the privilege. In the same case Barton ACJ said: 'The defendant is allowed to defend himself in the same field in which the plaintiff has assailed him - if the attack is through the press, then again the press may be used in answer: See Laughton v Bishop of Sodor and Man. The aggressor cannot, as Mr Odgers puts it, "subsequently come to the Court as plaintiff, to complain that he has had the worst of the fray". But in such cases the defendant must see to it that his retort, if vigorous, is fair; that is, that it does not go beyond the occasion.' (emphasis added) [27] The significance for the present case of what was said thereafter by Dixon J in Mowlds v Fergusson is that where the occasion is a response, by publication to the general public of defamatory matter, to a public attack upon the defendant by the plaintiff, the consideration of what is relevant to the attack requires particular care. The response must be commensurate with an occasion which is in an exceptional category. Exceptionally, the law has recognised an interest in 2GB to publish defamatory matter to the general public, which has an interest in hearing the response of the talk-back broadcaster to the public criticisms by Mr Trad of 2GB. No doubt vigorous use of language has long been a characteristic of public debate in this country. But in the conduct of public affairs the law, in general, does not encourage persuasion by public vilification and by an abdication of reason. However, by classifying its response as a 'counter-attack' 2GB seeks to broaden the scope of its interest in publishing defamatory matter to its audience." 87In this case, the attack to which Nobananas replied (which exchange forms the basis for the reciprocity of duty upon which Nobananas relies) is an "attack", being a statement that the engines marketed by Mr Bushara and those marketed by Nobananas are of the same quality or are the same engines. 88The response to that attack goes well beyond a comparison of the engine quality of those marketed by the plaintiff and defendants respectively. A response that was reasonable to the "attack" on the product sold by Nobananas would be a response that compared unfavourably the two engines. 89It would matter not whether the comparison was true or false (except to the extent that a lack of truth may be a consideration in determining the existence of malice), but accusations as to the criminal conduct, honesty and integrity of Mr Bushara and that he was a "rogue" or "rogue operator" were irrelevant to a comparison of the engines and irrelevant as a response to any attack on the quality of Nobananas' engines. 90In the context of the imputations alleged in the Amended Statement of Claim, none of them are imputations that are relevant (in the sense that they reply to the attack perpetrated by Mr Bushara) to the qualified privilege occasioned by the initial publication by Mr Bushara. None of the alleged imputations deal with the inferiority of Mr Bushara's engines. 91Nevertheless, I am prepared to accept that imputation 2B (arising from line 11 of the publication) is a reply relevant to the quality of engines, although it goes well beyond a reasonable or commensurate response to the attack. The publication, at lines 22 to 26, relating to the quality of engines identified with a letter and number of which "F" is a prefix, are plainly an answer relevant to the attack by Mr Bushara. 92Nevertheless, the article, as a whole, goes well beyond the statements at lines 22 to 26, or even imputation 2B, and the purpose of the publication cannot be confined to that legitimate and privileged end.

Offer of Amends 93Part 3, Division 1 of the Defamation Act deals with the resolution of disputes relating to defamation by the making of an offer of amends or an offer to make amends. Leaving aside, for present purposes, the procedural requirements for such an offer, the purpose of the provisions is, in part at least, to provide an alternative means to the Uniform Civil Procedure Rules 2005 for the making of offers and their acceptance. 94An offer of amends must be in writing and readily identifiable as an offer under Part 3, Division 1. If limited to any particular defamatory imputations, an offer of amends must: state that limitation and particularise the imputations to which the offer is limited; include an offer to publish a reasonable correction; include an offer to pay the reasonable expenses incurred by the aggrieved person both before and after the offer was made; and may include an offer to publish an apology, pay compensation or particulars of any correction or apology already made: s 15 Defamation Act. 95In these proceedings, an offer to make amends was made by Nobananas on 23 December 2010 and Nobananas relies upon that offer of amends as a defence in these proceedings. The offer of amends is Exhibit 5 in the proceedings and the response thereto is Exhibit 10. Exhibit 10 also lists six persons who have downloaded the website. 96The offer of amends was in relation to each of the imputations in the plaintiff's claim and included an offer to place on the website, in the same position and in the same manner and type as the original matters, an apology in terms annexed to the letter of 23 December 2010. There was also an offer for the payment of compensation. 97The offer of amends was not accepted. Further, the effect of the apology, as attached to the offer of amends (Exhibit 5) was to reiterate (albeit in the context of withdrawing them) each of the imputations set out in the Statement of Claim. This time, Mr Bushara would have been identified directly and expressly. Further, it seems that the parties were unable to agree as to the level of compensation. 98An offer of amends may include an offer of compensation to be determined by the Court (s 15(3) of the Defamation Act). In this case the offer of amends did not include any such provision. 99Given that Mr Bushara failed to accept the offer to make amends, Nobananas relies on s 18 of the Defamation Act to submit that the offer to make amends was reasonable and, as a consequence, is a defence to the current action for defamation, because Nobananas was ready and willing, on acceptance of the offer by Mr Bushara, to carry out the terms of the offer. 100As earlier stated, the scheme of Division 1 of Part 3 of the Defamation Act is to provide a process by which offers may be made, including apologies, as an alternative to the Uniform Civil Procedure Rules. The term "reasonable" describes the offer and the mere fact that a Court might (and ultimately does) award more by way of compensation does not necessarily render the offer unreasonable. 101In assessing the "reasonableness" of the offer of amends, it should be borne in mind that the defamatory material was published on or about 8 September 2010 and was removed from the website on 11 November 2010. As a consequence, the defamatory material was on the Internet for a relatively short time. 102It seems to me that there are two aspects of the offer of amends that require consideration in determining whether the offer was reasonable. The first, as earlier indicated, is the terms upon which the apology was to be published. 103In my view, the apology was inappropriate and restated or reiterated the defamatory imputations before publishing the statement that they were "uncalled for and incorrect". The acknowledgement is that Mr Bushara's feelings were hurt and that Nobananas "should not have made those allegations ... [and] unreservedly apologise to him for having hurt his feelings". 104As earlier stated, the original publication did not name Mr Bushara by that name. Some people may not have realised that it was Mr Bushara to whom Nobananas was referring. Anyone reading the document would have realised that it was Mr Bushara's business, MBB Imports. 105Lastly, the publication would have reiterated the defamatory imputations at a time after the website had been withdrawn. In my view nothing in the Act required, in circumstances where all of the imputations were the subject of the offer, for the imputations to be specified, or specified in a manner that reiterated them. 106Secondly, the offer of compensation of $10,000 was not a reasonable offer in the circumstances of the imputations made against Mr Bushara. 107In those circumstances the offer to make amends was not reasonable within the meaning of s 18 of the Defamation Act and does not, therefore, constitute a defence to the action for defamation.

Damages 108The Defamation Act requires that damages bear a rational relationship to the harm suffered and should be assessed taking into account the maximum amount of damages for non-economic loss. 109There is no evidence before the Court to suggest any special damage. As a consequence the Court does not find that there has been a diminution of earnings suffered by Mr Bushara or by his business. The current maximum amount that has been gazetted is $339,000. 110This publication was for a closed period of approximately two months. It had no adverse economic effects on the plaintiff, Mr Bushara, and the publication was primarily directed at the business activities of Mr Bushara and MBB Imports. 111On the material before the Court, I find that Mr Bushara suffered some personal distress and hurt as a result of the publication and I award damages for that personal distress and hurt, for the reparation of the harm done to Mr Bushara's personal and business reputation and for vindication of the appellant's reputation. I make clear that the last mentioned aspect (vindication) is not being separately compensated but flows from the appropriate compensation in relation to the first two aspects. As has been stated by the High Court: "The three purposes no doubt overlap considerably in reality and ensure that 'the amount of a verdict is the product of a mixture of inextricable considerations'. The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant's personal and (if relevant) business reputation and vindication of the appellant's reputation. The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant. Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant's reputation. 'The gravity of the liable, the social standing of the parties and the availability of alternative remedies' are all relevant to assessing the quantum of damages necessary to vindicate the appellant": Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44, per Mason CJ, Deane, Dawson and Gaudron JJ at 60 - 61. 112Notwithstanding that the offer to make amends is not reasonable and, therefore, not a defence to the action for defamation, it is a matter that, in my view, must be taken into account in determining the level of hurt and the damages to be awarded. The offer to make amends at least gave Mr Bushara the satisfaction that Nobananas was prepared to apologise and, subject to the other conditions, would have apologised. 113The determination of an appropriate level of damage must, therefore, take into account each of the factors to which I have already referred and particularly the short time during which the defamatory material was on the website, the offer of an apology, and the absence of any diminution in earnings as a result of the defamatory material. Nevertheless, the determination is not an arithmetic exercise in which one plugs into some mathematical matrix. 114The damages should be at the lower end of the scale. They are not, however, nominal or close to nominal. 115In mitigation of the damage, I take into account that Mr Bushara was involved in criminal conduct, to which reference was made in the publication and that reference was true. It diminishes the reputation that Mr Bushara had prior to the defamatory material being published and therefore diminishes the level of damage that may otherwise have been caused. 116In all of the circumstances, I award damages to Mr Bushara in the amount of $37,500. 117As a matter of theory Mr Bushara was entitled to damages immediately upon publication and the publication occurred only for two months. In determining the issue of interest, it is necessary to take into account the fact that the injury has been spread over a period after publication, for example, vindication damages awarded in consequence of injuries suffered between publication and verdict. 118There are, as has been noted on a number of occasions, obvious difficulties of assessment in such a process. I take an overall view and I award interest at 2 percent per annum from 8 September 2010 until the date of judgment and thereafter at the rates prescribed by the Uniform Civil Procedure Rules. The above approach reflects the judgment of McHugh JA in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 143D and Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419. This is not a formula that the Court is obliged to follow, but is an appropriate way in which to compensate the plaintiff in a fair and just manner. 119The defendants shall pay the plaintiff's costs of and incidental to the proceedings, but leave is granted to the parties to approach the Court on the question of interest and costs and for any different or special order in those respects. 120Lastly, as I have already indicated, I have not formed the view that Mr Bates did not honestly believe that he had been defrauded in relation to the dealings with Mr Bushara as to the return of his engines. The evidence is uncontroverted that he received information from China that the engines returned were not engines that he had sold to Mr Bushara initially. 121As a consequence, I cannot take the view that Mr Bates has acted otherwise than with a genuine belief in the truth of the allegations. Given the offer of amends and the belief in the truth of the statements, coupled with the attack on Nobananas' engines, I cannot take the view that there is any occasion for the awarding of aggravated or exemplary damages. 122The Court makes the following orders: (1)Judgment for the plaintiff in the amount of $37,500; (2)The defendants shall pay interest on the above amount from 8 September 2010 until the date of judgment at 2 percent per annum, being $1,937.50; (3)The defendants shall pay the plaintiff's costs of and incidental to the proceedings, as agreed or assessed; (4)The parties have liberty to apply for any different or special order as to interest or costs within 14 days of the date of judgment; (5)Otherwise, the proceedings are dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 March 2013

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