Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 | Case summary

Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 | Case summary | Zoe

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Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 Ainsworth v Burden [2005] NSWCA 174 Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 Aktas v Westpac Banking Corporation Ltd [2010] HCA 25; (2010) 84 ALJR 551 Allen v John Fairfax & Sons Ltd (Supreme Court of New South Wales, Hunt J, 2 December 1988, unreported; BC8801264 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 Anderson v Ah Kit [2004] WASC 194 Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 Associated Newspapers Ltd v Dingle [1964] AC 371 Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430 Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175 Barber v Pigden [1937] 1 KB 664 Birchwood Homes Ltd v Robertson [2003] EWHC 293 (QB) Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Broome v Cassell & Co Ltd [1972] AC 1027 Burstein v Times Newspapers Ltd [2001] 1 WLR 579 Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211 Crampton v Nugawela (1996) 41 NSWLR 176 Dow Jones & Company Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575 Fawcett v John Fairfax Publications Pty Ltd [2008] NSWSC 139 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 Goody v Odhams Press Ltd [1967] 1 QB 333 Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 Habib v Nationwide News Pty Ltd [2010] NSWCA 34 Habib v Nationwide News Pty Ltd [2010] NSWSC 924 Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 Hayward v Thompson [1982] 1 QB 47 Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1 Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1 Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416 John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; (2001) 53 NSWLR 541 John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 Kaschke v Gray [2010] EWHC 1907 (QB) Li v The Herald & Weekly Times Pty Ltd [2007] VSC 109 Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213 CASES CITED: Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631 McBride v Walton [1994] NSWCA 199 McCrohon v Harith [2010] NSWCA 67 McDonald v Coles Myer Ltd (1995) Aust Torts Reports 81-361 Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643 Moit v Bristow [2005] NSWCA 322 Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 Myer Stores Ltd v Soo [1991] 2 VR 597 Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382 O'Hagan v Nationwide News Pty Ltd [2001] NSWCA 302; (2001) 53 NSWLR 89 Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 Plato Films Ltd v Speidel [1961] AC 1090 Polly Peck (Holdings) Plc v Trelford [1986] QB 1000 Praed v Graham (1889) 24 QBD 53 Rath v Guardian News and Media Ltd [2008] EWHC 398 (QB) Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327 Roux v Australian Broadcasting Commission [1992] 2 VR 577 Sadler & State of Victoria v Madigan [1998] VSCA 53 Scott v Sampson (1882) 8 QBD 491 Societe D'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306 Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348 Steele-Smith v Liberty Financial Pty Ltd [2005] NSWSC 398 Sutherland v Stopes [1925] AC 47 Television New Zealand Ltd v Ah Koy [2002] 2 NZLR 616 Television New Zealand Ltd v Prebble [1993] 3 NZLR 513 Television New Zealand Ltd v Quinn [1996] 3 NZLR 24 Tesco Stores Ltd v Guardian News & Media Ltd [2008] EWHC B14 (QB); [2009] EMLR 5 The Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254 Tipple v Buchanan [2005] BCL 715 (High Court of New Zealand, Panckhurst J, 20 July 2005) Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469 Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 Waterhouse v Broadcasting Station 2UE Pty Ltd [1985] 1 NSWLR 58 Walter v Alltools Ltd (1944) 61 TLR 39 Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387 Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028

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Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 disapproved 8 It is open to the Court to conclude that Rochfort was plainly or clearly wrong, and hence to overrule it, if it has a strong conviction to that effect and if the nature of the error can be demonstrated with a degree of clarity by the application of correct legal analysis: (at [202]). Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 applied 9 Damages in defamation proceedings, insofar as they act to provide solace to the plaintiff for injury to his/her reputation and hurt to his/her feelings, can address harm that occurs after publication. Damages for the injury to feelings and reputation caused by the publication of defamatory material must be assessed on their facts. It will not always be the case that injury of this sort will end or even lessen as time passes: (at [220], [236]). Broome v Cassell & Co Ltd [1972] AC 1027; Praed v Graham (1889) 24 QBD 53; The Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254; Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497; Ainsworth v Burden [2005] NSWCA 174; Habib v Nationwide News Pty Ltd [2010] NSWCA 34; Broome v Cassell & Co Ltd [1972] AC 1027; Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211; Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877; Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 referred to Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643; Australian Consolidated Press v Driscoll (1988) Aust Torts Reports 80-175; Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 approved 10 Rochfort was wrongly decided. It did not recognise the continuing nature of damage in a defamation action and is not consistent with the developments in principles governing damages requiring the court to consider actual facts at the time it assesses damages: (at [254] - [255]). Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430; Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 applied Television New Zealand Ltd v Quinn [1996] 3 NZLR 24; Television New Zealand Ltd v Ah Koy [2002] 2 NZLR 616; Tipple v Buchanan [2005] BCL 715 (High Court of New Zealand, 20 July 2005); Nationwide News Pty Ltd v El-Azzi [2004] NSWCA 382; McCrohon v Harith [2010] NSWCA 67; Walter v Alltools Ltd (1944) 61 TLR 39; Myer Stores Ltd v Soo [1991] 2 VR 597; Sadler & State of Victoria v Madigan [1998] VSCA 53 referred to Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 overruled 11 Evidence of post-publication material that goes to a plaintiff's reputation should be admissible to ensure that the damages awarded accurately reflect the plaintiff's reputation at the time the damages are awarded. Its admission should be approached with caution and must be carefully confined in the same sense as reputation evidence is now confined: (at [245]) 12 Judicial findings, even if made post-publication, if relevant in the sense discussed, should be admissible in mitigation of damages, as they take place in open court and can be regarded, accordingly, as matters of public knowledge. The tribunal of fact should not be kept in the dark about the plaintiff's reputation at the time it comes to consider the award of damages: (at [253]) Goody v Odhams Press Ltd [1967] 1 QB 333; Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 considered

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Para Statement of the case 12 Statutory framework 24 The matters complained of 25 FINDINGS OF THE PRIMARY JUDGE: BACKGROUND FACTS 27 The central characters 29 (a) The respondent 29 (b) Ms Smith 32 (c) Mr Trevor Steele 39 (d) Mr Tony Steele 40 The Liberty Financial transactions 47 The Steele-Smith proceedings 54 FINDINGS OF THE PRIMARY JUDGE: DEFENCES 57 Overview 57 The primary judgment: substantial truth of imputation 12 61 The primary judgment: contextual imputations 70 FINDINGS OF THE PRIMARY JUDGE: DAMAGES 75 Overview 75 The primary judgment: mitigation 81 (a) Dishonesty at trial 82 Use of the adverse trial findings 83 Sector identification 87 (b) Adverse findings in the Steele-Smith proceedings 97 Quantifying damages 101 ISSUES ON APPEAL 110 SUBMISSIONS 111 The appellant: substantial/contextual truth 112 The appellant: mitigation 116 The appellant: overruling Rochfort 121 The appellant: the Steele-Smith adverse findings 126 The appellant: damages 129 The respondent: substantial/contextual truth 130 The respondent: mitigation 132 The respondent: overruling Rochfort 133 The respondent: damages 137 CONSIDERATION 138 Substantial truth/contextual truth 138 DAMAGES 148 Mitigation: identification of sector of reputation 162 Mitigation: reception of Steele-Smith adverse findings; correctness of Rochfort 188 The decision in Rochfort 192 Rochfort - other authorities 203 New Zealand authorities: post-publication reputation 209 Use of post-publication material in defamation proceedings 214 The continuing nature of damages for defamation 219 (a) Theoretical basis for the award of interest 224 (b) Hurt to feelings caused by reaction of others post-publication 235 Conclusion on continuing nature of damages 236 False imprisonment cases 238 Analogy with common law principles 243 Whether judicial findings are analogous to convictions 249 Rochfort: conclusion 256 Admission of the Steele-Smith adverse findings: practical implications 257 Burstein v Times Newspapers Ltd [2001] 1 WLR 579 262 Damages 267 Orders 281

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1 Spigelman CJ: Subject to the additional observations of Beazley JA, with which I agree, I agree with the judgment of McColl JA. 2 Beazley JA: I agree with the reasons and orders proposed by McColl JA and wish to add only the following short comment in respect of the use of judicial findings relating to a person who has been defamed. 3 As McColl JA has rightly pointed out, at [253], there are self-evident distinctions between a criminal conviction and judicial findings, including the difference in the standard of proof. Her Honour also refers, appropriately, to another possible distinction, namely, the question whether findings are of an intermediate or final nature. 4 A criminal conviction, by its nature, is an ultimate finding, not only of wrongdoing but of wrongdoing which constitutes a crime. Its strength lies both in the nature of the crime and in the standard of proof that applies in the finding of guilt. Its use as evidence of reputation, in the sense explained by McColl JA, is understandable. 5 Findings in a civil case, both of intermediate facts, including credit findings, and of ultimate facts, are made on the civil standard. Even within the civil standard, the degree of satisfaction that a court must have before reaching a conclusion varies, depending upon the seriousness of the matter in issue. Fraud is the classic example: see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. That a finding is made on the civil standard, whether on a Briginshaw basis or not, does not diminish the cogency of such a finding. There is, however, a significant difference in a finding made on the civil standard from a finding made on the criminal standard. 6 So far as questions of reputation are concerned, a demeanour-based credit finding, may be problematic. Although credit findings are an integral part of the fact finding function of a trial judge, a demeanour-based credit finding, which is often critical in the determination of a case, is far from scientific. It is a finding based upon the experience of the trial judge having seen and heard the individual in person: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [65]; see also Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at [178]. Ipp JA, in "Problems with Fact-Finding" (2006) 80 Australian Law Journal 667, said that a demeanour-based finding is "determined by a judge's subjective experience, intuition and common sense". 7 It is unremarkable to observe, therefore, that a demeanour-based credit finding in respect of an individual may vary as between judges. This is undoubtedly why Atkin LJ observed in Societe D'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 at 152: "… I think that one ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of the evidence with known facts, is worth pounds of demeanour." 8 The problematic nature of a demeanour-based credit finding was examined by Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306. His Honour stated, at [88]: "There is a growing understanding, both by trial judges and appellate courts, of the fallibility of judicial evaluation of credibility from the appearance and demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the courtroom … Apart from all else, demeanour is, in part, driven by culture … Distaste or prejudice can cloud evaluation …" 9 A credit finding can be devastating, both personally upon the individual whose credit has been impugned, and in respect of that person's reputation. Hence the importance, where available, of confirmatory or corroborative evidence to assist or support a demeanour finding. 10 As McColl JA has pointed out, the differences between a criminal conviction and findings in a civil proceeding and, I would add, the effect of those differences on the reputational use that ought to be made of such findings, were not debated on appeal. Accordingly, whilst I agree that findings made in other proceedings which, by virtue of the publication of a judgment are in the public domain, may be used by a defendant in defamation proceedings in respect of reputation, the nature of the effect which may be given to such findings, particularly if they involve a demeanour-based credit finding, will require careful consideration. 11 McColl JA: The appellant, Channel Seven Sydney Pty Ltd, appeals from a decision of Kirby J determining issues of defences and damages under the Defamation Act 1974 (NSW) in favour of the respondent, Mr Peter Mahommed and awarding him $240,000 damages, interest and costs: Mahommed v Channel Seven Sydney Pty Ltd [2009] NSWSC 631.

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Statement of the case 12 On 29 June 2004, the appellant broadcast an episode of its current affairs programme, "Today Tonight" featuring a story about the respondent. The subject matter of the episode was dealings between the respondent, said to be a financial adviser and mortgage broker, and Doreen Smith, said to be an elderly pensioner suffering from dementia. Its basic theme was that, taking advantage of Ms Smith's dementia, the respondent had arranged borrowings on the security of her properties, and had then transferred money to himself. The story was preceded by two promotional broadcasts screened between 22 and 29 June 2004. 13 The respondent commenced defamation proceedings against the appellant on 18 March 2005 in relation to the two promotional broadcasts and the programme itself. The matter has a somewhat complicated procedural history. It is sufficient to say that following a retrial ordered by this Court (see Mahommed v Channel Seven Sydney Pty Ltd [2006] NSWCA 213), a jury empanelled pursuant to s 7A(3) of the Defamation Act found that the three publications carried the following twelve imputations and that each was defamatory of the respondent: Promotion from 22 to 29 June 2004 1. The Plaintiff is a thief. 2. The Plaintiff ripped off $1 million from a dementia patient. 3. The Plaintiff took advantage of a dementia patient and took everything she had. Promotion - 28 June 2004 4. The Plaintiff ripped off $1 million from a dementia patient. 5. The Plaintiff kept stealing money from a dementia patient. 6. Because of his dealings with a dementia patient the Plaintiff deserved to spend a lot of time in gaol. Programme - 29 June 2004 7. The Plaintiff ripped off $1 million from a dementia patient. 8. The Plaintiff took advantage of a dementia patient and took everything she had. 9. The Plaintiff swindled Doreen Smith. 10. The Plaintiff is a thief. 11. The Plaintiff charged Doreen Smith outrageous fees. 12. The Plaintiff is a dishonest financial adviser and mortgage broker. 14 In accordance with s 7A(4) of the Defamation Act, defences and damages were then tried before the primary judge. The appellant did not plead any defence to the imputations conveyed by the promotional broadcasts (imputations 1 - 6). It pleaded a defence of substantial truth and public interest in relation to imputations 11 and 12: s 15, Defamation Act. 15 The appellant also pleaded the defence of contextual truth in respect of the imputations conveyed by the programme as published in New South Wales: s 16, Defamation Act. It pleaded back the two imputations that it had pleaded were substantially true, and added a further three, so that the contextual imputations relied upon were: Contextual imputations 13. The Plaintiff charged Doreen Smith outrageous fees. (Also imputation 11.) 14. The Plaintiff is a dishonest financial adviser and mortgage broker. (Also imputation 12.) 15. The Plaintiff had, in his business of financial adviser and mortgage broker, knowingly taken advantage of a man he knew to be significantly disabled. 16. The Plaintiff took advantage of Doreen Smith by exploiting her age and infirm state to secure payments for his company. 17. The Plaintiff was unfit to be a financial adviser or mortgage broker. 16 The respondent conceded that if the appellant could prove either imputation 11 or 12 was substantially true, each related to a matter of public interest: primary judgment (at [6]). 17 The appellant did not plead contextual truth to the publication of the programme outside New South Wales and acknowledged that, for States other than New South Wales, the respondent must get a verdict in respect of imputations 7 to 10 (at [9]). 18 The appellant sought to mitigate the damages awarded to the respondent by proving he was of bad reputation. 19 The primary judge held the appellant had not established that any of imputations 11 (also imputation 13), 12 (also imputation 14), or 15 - 17 was substantially true and, accordingly, its s 15 and s 16 defences failed. The appellant only challenges his Honour's conclusion in relation to imputation 12. 20 Insofar as mitigation was concerned, his Honour held he was bound by the Court of Appeal's decision in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 to reject the case on bad reputation the appellant sought to advance based on adverse findings Palmer J made about the respondent after the publication of the matters complained of: see Steele-Smith v Liberty Financial Pty Ltd [2005] NSWSC 398 (the "Steele-Smith proceedings"). 21 The notice of appeal sought leave to argue that Rochfort was wrongly decided. A Court constituted by five judges of appeal accordingly heard the appeal. 22 The appellant also complains the award of $240,000 was excessive. 23 An underlying premise of the appellant's submission that Rochfort was wrongly decided was that the harm which flowed from a defamatory publication was of a continuing nature, running at least from publication to trial. The respondent contested that proposition, submitting that defamation caused "a once and for all" harm at the point of publication. He submitted that decisions holding, or assuming to the contrary, were wrongly decided and this Court ought to depart from them. He sought leave, in those circumstances, to argue that the following cases which are representative of such decisions were wrongly decided: "(a) Interest, other than in relation to damages awarded for vindication : John Fairfax & Sons v Kelly (1987) 8 NSWLR 131, per McHugh JA at 143B-143D (with whom Kirby P agreed on this point: see at 133A-B);

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Statutory framework 24 The following provisions of the Defamation Act are relevant: " 15 Truth generally (1) Notwithstanding section 11, the truth of any imputation complained of is not a defence as to that imputation except as mentioned in this section. (2) It is a defence as to any imputation complained of that: (a) the imputation is a matter of substantial truth, and (b) the imputation either relates to a matter of public interest or is published under qualified privilege. 16 Truth: contextual imputations (1) Where an imputation complained of is made by the publication of any report, article, letter, note, picture, oral utterance or other thing and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of. (2) It is a defence to any imputation complained of that: (a) the imputation relates to a matter of public interest or is published under qualified privilege, (b) one or more imputations contextual to the imputation complained of: (i) relate to a matter of public interest or are published under qualified privilege, and (ii) are matters of substantial truth, and (c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff. 46A Factors relevant in damages assessment (1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded. (2) In determining the amount of damages for non-economic loss to be awarded in any proceedings for defamation, the court is to take into consideration the general range of damages for non-economic loss in personal injury awards in the State (including awards made under, or in accordance with, any statute regulating the award of any such damages). 47 Truth or falsity of imputation On the question of the amount of damages where it is relevant to that question that the imputation complained of was or was not true or a matter of substantial truth: (a) there is no presumption as to whether the imputation was or was not true or a matter of substantial truth, and (b) evidence as to whether the imputation was or was not true or a matter of substantial truth may be adduced by any party (whether or not evidence on the subject is adduced by any other party)."

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'DAVID RICHARDSON: Peter Mahommed, David Richardson from Today Tonight. Can we ask some questions about some rather dubious mortgages you've set up for Doreen Smith and her illiterate son, Tony. PETER MAHOMMED: Oh, is that right, is it? DAVID RICHARDSON: Yeah. PETER MAHOMMED: Well, I think you've got all that wrong.' 19 The programme continued as follows: 'DAVID RICHARDSON: Really? He calls himself a financial adviser and mortgage broker, but Peter Mahommed's so-called advice has seen an elderly woman lose everything. Where's her money? She's lost all of her properties because of you sir. PETER MAHOMMED: She hasn't. DAVID RICHARDSON: Yes she has.' 20 The programme then included a sequence depicting Doreen Smith, a woman in her mid seventies, walking to get a cup of tea, her hand shaking. The dialogue was as follows, conducted in Ms Doreen Smith's bedroom, as she was assisted by her son, Trevor Steele: 'DOREEN SMITH: I don't know what I'm doing. That's where I live all day, every day of my life other than the doctors I live there. DAVID RICHARDSON: And this is his victim, 77 year old Doreen Smith, a pensioner suffering depression and dementia, now on the verge of losing the family home. DOREEN SMITH: I didn't know what I was doing. I didn't know what I was doing, I was in another world.' 21 The reporter then explained that Doreen Smith needed cash. She stumbled upon Mr Mahommed's advertisement in a local newspaper. The programme showed her son, Trevor Steele, saying the following: 'TREVOR STEELE: She wanted to buy Christmas presents for people, and had she come to me I would have gave her the money. DAVID RICHARDSON: But you didn't know? TREVOR STEELE: I didn't know, I had no idea.' 22 The reporter thereafter referred to a number of mortgages, where the amounts borrowed increased over time. Doreen Smith was shown saying that she just signed documents placed in front of her by Mr Mahommed. She did not read them. The programme went on to refer to loan applications completed by Mr Mahommed: 'DAVID RICHARDSON: Mahommed listed Doreen as a sales manager for a company called Country Power Newspapers earning $38,000 a year. TREVOR STEELE: My mother is receiving, in receipt of a war veteran's pension and is not a sales manager.' 23 The image of a closed door was shown on the screen in a nondescript, unimpressive building. The reporter said this: 'DAVID RICHARDSON: Son Trevor should know. He registered the name Country Power Newspapers, but it's never got off the ground. It was never an operating business. The address for the so-called company is a derelict office on the first floor of a shopping arcade, and it wasn't just one loan.' 24 The following exchange then occurred between the reporter and Trevor Steele: 'DAVID RICHARDSON: How much all up did she borrow? TREVOR STEELE: Between $800,000 and $1.2 million. DAVID RICHARDSON: You're kidding? TREVOR STEELE: No I'm not kidding. I've seen the documentation in relation to this.' 25 The Channel 7 reporter then stated that bank documents showed Doreen had drawn $10,000 for herself, 'but other transactions are extremely suspicious'. Trevor Steele was shown making the following assertions which the reporter then broadly confirmed: 'TREVOR STEELE: The money come through from Liberty, whether it was 80, or 100, or $150,000. Three minutes later he had tran - money transferred to his own personal account. DAVID RICHARDSON: Bank documents showed large sums of money being transferred directly to Mahommed's account. He says they were for outstanding fees.' 26 The programme went on to include an image of Doreen and the following exchange: 'DAVID RICHARDSON: Did Peter Mahommed tell you not to tell Trevor? DOREEN SMITH: He told me not to tell anybody.' 27 A further aspect was then introduced by the reporter, relating to another son of Doreen Smith, Tony Steele. The following was said: 'DAVID RICHARDSON: Remember Doreen has a mental illness. Her doctor of 20 years told us she is not capable of making business decisions, nor is her other son, a housebound schizophrenic, who was also signed up by Peter Mahommed for a business loan. TREVOR STEELE: He's illiterate. He can't read or write. DAVID RICHARDSON: Again the money was provided by Liberty Financial. No-one in this story seems to know where all the cash has gone.' 28 Reference was made to enquiries with the lender, Liberty Financial. The company said that it was satisfied with the checks it had run on Doreen Smith before lending her the money. The reporter added: 'DAVID RICHARDSON: ... The company claims it has bank documents proving Doreen was earning a whopping $185,000 a year, but that makes you wonder, if she was earning that much why she needed a loan at all.' 29 The programme thereafter provided a commentary from an expert in consumer protection, Mr Chris Field. It was as follows: 'CHRIS FIELD: Of all the cases that I've seen involving mortgage brokers and money lenders, this strikes me as one of the absolute worst. DAVID RICHARDSON: Lawyer and executive director of the Consumer Law Centre, Chris Field, agreed to examine Doreen's mortgage documents for Today Tonight. CHRIS FIELD: They've been introduced to a broker and a money lender, and they've gone from a position of comfort to potentially the poor house.' 30 The programme concluded with these words: 'DAVID RICHARDSON: Doreen Smith has now lost her two investment units. Sold, to repay Liberty Financial. She's hanging onto her home by the skin of her teeth, still owing $320,000. Peter Mahommed denies he did anything wrong. In fact, he claims Doreen is trying to con him and she doesn't have any mental disability at all. What about the withdrawals? The money goes into her account, $20,000 here, $25,000 to you. PETER MAHOMMED: You see you need to check your facts. DAVID RICHARDSON: I have checked my facts. PETER MAHOMMED: Well you haven't - CHRIS FIELD: It's cases like this that show you just what can go wrong in the mortgage broking industry and one of the reasons why things can go wrong is because mortgage brokers aren't licensed and not effectively regulated, and it's high time that occurred."

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(b) Ms Smith 32 Turning to the other subjects of the matters complained of, it is of some significance to note that Ms Smith (also known as Mrs Steele-Smith) had what his Honour, rather understatedly, described (at [47]) as "a colourful past". She was born in 1928. She had a history of criminal convictions for a range of offences involving dishonesty (false pretences, goods in custody, stealing, forging and uttering, dishonestly obtaining a valuable thing by deception, obtaining property by a wilfully false promise) dating back to 1952. She had served numerous terms of imprisonment. In 1971 she brought defamation proceedings in respect of a newspaper article relating to a police investigation into an allegation of theft of 50,000 tons of low quality off-grade wheat, valued at $5 million. She claimed she was identified as the miscreant. She obtained a verdict of $45,000, but it was set aside on appeal and a new trial ordered: Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348. The new trial never took place. In fact, Ms Smith was charged with the offences which were the subject of the article, was convicted of false pretences in relation thereto and sentenced to 6 years imprisonment with a non parole period of 3½ years (see [47] - [54]). 33 During the years 1997 to 2001, Ms Smith secured a substantial contract with NorthPower, the energy authority in the Newcastle region (at [55]). That contract was terminated on 23 August 2001 (at [196]). His Honour described the contract as one Ms Smith secured "with a substantial corporation when she was almost seventy years old" (at [94]). Turnover under the contract was in excess of $5 million (at [82]). Shortly after she met the respondent, Ms Smith asked him to help her apparently to recover from NorthPower certain invoices she believed it had not paid. She asked Mr Mahommed to undertake the task of reconciling her invoices with the payments revealed by her bank statements (at [95]). 34 Ms Smith did not give evidence. 35 All the matters complained of described Ms Smith as having dementia. The programme described her as having a "mental illness". It depicted her with her hand shaking. Dr Seth Manners, who had been the family's treating doctor for several decades, gave evidence. He regularly saw Ms Smith in respect of various physical and psychological problems. He said she did not suffer from dementia (at [86]). 36 The respondent's evidence was that when he met Ms Smith "she was 'pretty impressive' … had no tremor … [and] did not appear to be either dull or sedated" (at [83]). Having been shown documents relating to her contract with NorthPower, he concluded she was "switched on" (at [83]). 37 The programme also depicted Trevor Steele saying his mother was "in receipt of a war veteran's pension". There was no evidence of this, apart from his assertion. Even assuming that assertion to be accurate, the primary judge found there was no evidence that it had been disclosed to Mr Mahommed (at [85]). 38 The primary judge found (at [94]) that the respondent's account of his meeting with Ms Smith and Trevor Steele was plausible. He accepted that he was impressed. He observed that Ms Smith's life in crime suggested that she was a good talker. He described "[h]er recent track record with NorthPower [as] formidable." He concluded "[s]he appeared to be a woman of substance." He also found (at [99]) that the respondent had no knowledge of her criminal past.

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(d) Mr Tony Steele 40 The respondent gave evidence both before Palmer J and the primary judge to the effect that that he had spent somewhere between ten and twelve hours with Mr Tony Steele, Ms Smith's other son, and did not notice anything unusual about the way he spoke (at [121], [123]). 41 Tony Steele was referred to in the programme as "illiterate" and a "housebound schizophrenic". The primary judge heard evidence from Dr Manners who had treated Tony Steele since the mid-1980s (see [124]). He said Tony Steele had been diagnosed as schizophrenic at the age of 17 years and had been admitted to psychiatric hospitals on seven or eight occasions. As his Honour summarised Dr Manners' evidence: "124…[Tony Steele] had been involved in a number of motor vehicle accidents, suffering severe fractures of both femurs. The fractures had healed, but had left him with significant deformity in both legs and a degree of pain (T 300). He now walked with a limp. He had been continuously on medication for schizophrenia for more than two decades. He attended the surgery every three weeks for tablets and an anti-psychotic injection (T 296). He had been generally stable for the last ten years (T 298). … Dr Manners described him as suffering from a 'very mild chronic mental illness' (Exhibit L). His intellectual capacity had been reduced to a slight degree (T 298). Dr Manners described the way in which he presented in these words: (T 297) 'A. ... his speech is often slow and stilted, he doesn't necessarily follow a logical course in a conversation, he'll interrupt a conversation and go off in another direction. I'll just refer to - he does not have much conversation other than pleasantries because he doesn't volunteer information, you have to seek information from him.' 125 Dr Manners believed that Tony Steele had never been employed. He could not work (T 298). He was in receipt of a Disability Support Pension. … Dr Manners said: '…He was unable to fill [Disability Support Pension] forms out without complete assistance of myself or someone in the family.' 126 … [He] was very much under the influence of his brother Trevor (T 302). If he were asked to sign a document, he probably would do so…". 42 Dr Manners thought it was "extremely unlikely that [Tony Steele] would understand" a Power of Attorney he had apparently given to a solicitor or a document appointing that solicitor as his "Enduring Guardian" (at [127] - [128]). 43 According to Dr Manners, Tony Steele would "[a]part from a sometimes frozen face, … appear normal" to someone unaware of his medical history (at [129]). 44 His Honour recited, and apparently accepted (at [120]), the respondent's evidence that when he saw Tony Steele give evidence before Palmer J, he hardly recognised him as: "His head was shaved. He looked like he had not had a bath for a week. He was dressed in dirty shorts, a shirt and thongs (T 48). His appearance was in marked contrast to the way he looked when he had seen him dressed to go to a local club (T 48). He was incoherent." 45 The primary judge described Tony Steele's appearance before him as follows: "133 Mr Tony Steele was called to give evidence. He walked with a marked limp. He was dressed normally. His head had not been shaved. Indeed, he presented well. As Dr Manners remarked, at first he appeared to be reasonably normal. His answers were limited, but generally responsive. Within a relatively short time, however, the limits of his comprehension and the quirkiness of his reactions were apparent. … I believe that the limits of his literacy would soon have been obvious, had time been spent with him, and especially if documents had been placed in front of him. I cannot accept that Mr Mahommed spent one and a half hours interviewing him, without recognising that he suffered from a mild mental illness. I reject as false Mr Mahommed's evidence that he spent ten to twelve hours with him and regarded him as normal. That evidence, I believe, was false to the knowledge of Mr Mahommed when he gave it." 46 On 21 May 2002 Tony Steele and his sister, Denise Robinson, executed a Deed of Trust pursuant to which Ms Robinson held one share in a company, Maxwell Developments Pty Limited ("Maxwell Developments"), in trust for Tony Steele. Ms Robinson was also a director of Maxwell Developments. The remaining shares were the property of Tony Steele. Maxwell Developments purchased a property in Blacksmiths which was valued at approximately $300,000 and was unencumbered (at [160], [164]). Despite the declaration of trust in Tony Steele's favour, the primary judge found (at [165]) that "Doreen Smith regarded Maxwell Developments as a 'family company'." The Blacksmiths property was used as security for some of the Liberty Financial loans referred to below.

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The Liberty Financial transactions 47 The appellant's defence of substantial truth/contextual truth was based on the respondent's conduct in arranging loans with Liberty Financial on behalf of Ms Smith and Tony Steele in the period 17 June 2002 to 8 April 2004 - five for Ms Smith and four for Tony Steele (two personal loans and two advances to Maxwell Developments). 48 The primary judge dealt carefully with each loan application. There is no complaint about his findings in relation thereto. It will be convenient to refer only to the salient points which underpin his Honour's ultimate findings. 49 Ms Smith applied for the first loan of $35,000 which she said was needed "for a new business". She told the respondent that her family and she "have set up a new business called Country Power Newspapers, we are in the process of obtain(ing) a contract to supply marketing services to Country Energy." She had an unencumbered property to provide as security for the loan. Her accountant confirmed she was establishing a business for which she needed approximately $50,000 for the purchase of equipment and other business assets (at [66] - [69]). In due course Liberty Financial agreed to advance her $50,000 (at [72]). Within a month of the first advance Ms Smith sought a further loan of $40,000 to buy a car for the business. After completion of further paperwork, Liberty Financial also advanced that sum (at [73] - [76]). 50 The next loan transaction the respondent undertook was in relation to Tony Steele, who Ms Smith told him "need[ed] a loan of $80,000 for working capital in his business" (at [103]). The respondent met Tony Steele and, he said, received information from him to make the loan application. Security for the loan was an unencumbered property in Swansea Tony Steele owned (at [105] - [108]). 51 I have set out above the primary judge's findings about the respondent's observations of Tony Steele. His Honour also found (at [145]) that the respondent "gave on oath a false explanation of his dealings with Tony Steele in his affidavit and evidence before Palmer J [and] then repeated the same false explanation to this Court." Despite this, his Honour was "not persuaded … that [the respondent's] dishonesty extended to an absence of belief concerning the business that Ms … Smith intended to pursue, in which she would usefully employ her sons." He had (at [145]): "…the strong impression, at least during 2002, that Mr Mahommed was, to some extent, under the spell of Doreen Smith, a practiced fraudster who, I infer, was very plausible." 52 As time passed and the respondent became more familiar with Ms Smith's affairs, particularly her dealings with NorthPower, the primary judge concluded he would have recognised that income information she gave him in 2003 for the purpose of increasing her loan secured on her property from $130,000 to $300,000 was "fantasy" (at [193]) and false (at [194]; see also [200]). 53 When he came to damages, the primary judge summarised his adverse findings, which touched on the respondent's honesty (at [289]). It is convenient to set that summary out at this point before turning to his consideration of the defences: "First, Mr Mahommed, when making applications for a loan on behalf of a client, was obliged to furnish the lender with accurate information. The lender required an estimate of the applicant's assets (including the value of household items, motor vehicles and money in the bank). It also required a statement of earnings. In three applications, Mr Mahommed made an upward adjustment of the value of certain assets or income (the first Smith application (supra paras [100]-[102]); the first Steele application (supra para [109]) and the second Steele application (supra para [117])).

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The primary judgment: substantial truth of imputation 12 61 The primary judge commenced his consideration of the substantial truth of imputation 12 by observing (at [220]) that it reproduced the statement by Mr Richardson, the appellant's journalist that: "DAVID RICHARDSON: Really? He calls himself a financial adviser and mortgage broker, but Peter Mahommed's so-called advice has seen an elderly woman lose everything. Where's her money? She's lost all of her properties because of you sir." 62 The primary judge (at [221]) approached the issue of the substantial truth of imputation 12 on the basis that the appellant had to prove that: "1. The plaintiff was a financial adviser; and 2. The plaintiff was a mortgage broker; and 3. That in both capacities, he was dishonest." 63 There was no dispute that the respondent was a mortgage broker. He denied, however, ever being or having claimed to be a financial adviser - pointing out that he did not hold a licence to conduct such a business (see [222]). 64 The appellant contended that that the words of the imputation were ordinary words, to be given their ordinary and natural meaning, that the phrase, "financial adviser", was not a term of art and, in any event, submitted the respondent did give advice to his clients as to which financial product would best suit their needs so that, in ordinary parlance, was he gave "financial advice" (see [223]). Alternatively it contended that, if his Honour did not accept that the respondent was a financial adviser, the imputation would be shown to be substantially true if the Court were to find that the plaintiff was a "dishonest mortgage broker" (see [224]). 65 The primary judge rejected the appellant's alternative submission (at [225]), holding that the appellant had to show the respondent was dishonest in both capacities. Although in his view "[t]he phrase 'financial adviser' in present day usage has perhaps reached the point where it is a recognisable group or profession in the same way as a lawyer, a doctor, an engineer or an architect", he said he would "approach the phrase 'financial adviser' upon the basis of the ordinary meaning of those words." 66 His Honour accepted (at [226]) the respondent's evidence that he did not provide financial advice, but was a mortgage broker solely engaged in the arrangement of business and investment loans for his clients. 67 His Honour also accepted (at [227]) that the respondent knew a licence was required in order to provide financial advice, that he had no such licence, and that he refrained from giving advice because he was unlicensed. 68 Having failed to establish the respondent was a financial adviser, the appellant failed to prove the substantial truth of imputation 12. His Honour made no finding as to whether the respondent was a dishonest mortgage broker. 69 His Honour's findings in relation to substantial truth obviated the need for him to consider the contextual truth defence in relation to that imputation (at [238]).

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The primary judgment: contextual imputations 70 The remaining contextual imputations were: "15. The Plaintiff had, in his business of financial adviser and mortgage broker, knowingly taken advantage of a man he knew to be significantly disabled. 16. The Plaintiff took advantage of Doreen Smith by exploiting her age and infirm state to secure payments for his company. 17. The Plaintiff was unfit to be a financial adviser or mortgage broker." 71 Contextual imputations 15 and 17 both depended on the respondent being a financial adviser. Both, in the primary judge's view, failed for that reason alone (see [230] - [232]). Insofar as contextual imputation 15 was concerned, his Honour added that he was not satisfied, for the reasons he had already given, that the respondent knew that Tony Steele was significantly disabled. In his Honour's view (at [230]) it was probable "that he dealt principally with Doreen Smith (and to a lesser extent, Trevor Steele), spending little time with Tony Steele beyond obtaining his signature." 72 Insofar as contextual imputation 16 was concerned, the primary judge rejected its basic factual sting: that the respondent had taken advantage of Ms Smith by exploiting her age and infirm state. While Ms Smith was elderly, his Honour rejected (at [236]) the proposition that she suffered from dementia or was infirm. Rather: "… I accept that Mr Mahommed was impressed by her. He found her to be 'sharp' (T 54). His impression conformed to the description provided by Doreen Smith's daughter (supra para [174]). 237 The defendant submitted that the sheer irrationality of the financial behaviour of Doreen Smith must have been evident to Mr Mahommed. Her actions were financial madness, making repeated applications in close proximity to each other (DS: para [24]). However, I am not persuaded. The defendant arranged for Doreen Smith to come to Sydney. She was available to give evidence and yet was not called. The defendant relies upon inference. In drawing inferences from the evidence, one must be wary of the advantage of hindsight. Mr Mahommed, on the evidence, was confronted by a powerful and successful woman. She had been bankrupt and yet had survived with substantial assets. She owned her own home unencumbered. She had even established a trust for the benefit of her son, Tony, which had then purchased assets, which were likewise unencumbered. She was, for five years, the head of a substantial business which had a contract with a large organisation. The contract had concluded ten months before Mr Mahommed's first meeting with her. Her bank statements showed a substantial turnover and a very substantial credit balance. She claimed to be owed a significant sum in unpaid accounts and recruited Mr Mahommed in the recovery of that money. I have no doubt that she appeared confident that she would secure a further contract with that corporation through her connections. I think it likely that she had all the confidence and persuasion of a practised fraudster." 73 Accordingly the primary judge held the appellant had not established the substantial truth of contextual imputation 16. Having held the appellant had failed to establish the substantial truth of all contextual imputations, his Honour did not consider the remaining issues which could arise on the defence such as weighing the contextual imputations against the respondent's imputations separately (see [238]). 74 The appellant accepted that John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 (Special Leave Refused: John Fairfax Publications Pty Ltd v Zunter [2007] HCATrans 64) determined that a "Polly Peck" defence (see Polly Peck (Holdings) Plc v Trelford [1986] QB 1000) was not available in respect of the publication of the matters complained of outside New South Wales and that his Honour was bound by that decision to reject the defences it had pleaded relying on that principle (see [239]). The appellant formally submitted at trial that Zunter had been incorrectly decided - a submission it has not repeated in this Court.

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Overview 75 The primary judge dealt first with the respondent's reputation. He noted (at [241]) that his mother had given unchallenged evidence "that her son had an excellent reputation before the programme, specifically as a mortgage broker within the finance industry [and] had a reputation for being trustworthy, hard working and very honest". 76 He recorded (at [243]) the "very significant audience" of the matters complained of. The appellant's estimate, according to interrogatories, was 1,532,000 viewers throughout Australia, with the audience in New South Wales estimated to be 442,391. While no estimates were made of the audience in respect of each matter complained of, his Honour inferred that, in each case, it was substantial and that some viewers would have seen all three broadcasts. 77 His Honour next dealt with hurt to feelings. This subject deserved extensive treatment because it recorded the strenuous endeavours on the respondent's part to bring to the appellant's notice prior to the broadcasts the facts concerning his dealings with the Steele-Smiths. This included an interview with Mr Richardson prior to the promotions being aired during which the respondent showed him documents from his files, and Mr Richardson promised to check the story and come back to him before broadcasting anything (see [247] - [248]). After the promotions were broadcast (without Mr Richardson having been in contact again) the respondent contacted the appellant again and spoke to a Mr Frank Pangallo, who was identified as the Production Manager, to whom he described, I assume at that stage the promotions, as "incorrect", and said "You need to stop this". In response to his request for "more information or evidence", the respondent faxed 158 pages of documents to Mr Pangallo which he contended in the fax coversheet "irrefutably disproves those allegations". Mr Pangallo said he would "read it overnight and … come to you in the morning" (see [251] - [252]). None of the respondent's conversations with either Mr Richardson or Mr Pangallo was challenged (see [253]). Neither Mr Richardson nor Mr Pangallo was called. When the appellant did not contact him the next morning, the respondent contacted "his solicitors who telephoned Channel 7 and put them on notice that, were they to screen the programme, litigation would ensue" (see [256]). 78 The primary judge set out in detail the respondent's reaction to the programme being broadcast, his family's reaction and that of relatives, friends and clients. He received "anonymous abusive calls" and "was told by a friend that his name had been 'bandied about' at a function … as a person who 'rips off old ladies' " (at [261]). He ultimately moved house because of the level of discomfort with his neighbours. He also separated from, and later divorced, his wife in 2007. While there was no evidence that the programme caused the separation, his Honour inferred that it did not help. He had not continued in his business as a mortgage broker because his work "dried up". The appellant did not apologise and, his Honour found, the respondent was obliged to come to court for two weeks to vindicate his reputation, matters he found contributed to his hurt to feelings (see [244] - [269]). 79 The primary judge concluded that the respondent was entitled to an award of aggravated damages on the basis of his knowledge that the imputations are false, holding: "273 I accept the plaintiff's evidence that he knew the imputations were false. Indeed, he went to great lengths before the programme to refute the allegations. He repeatedly spoke to the manager at Channel 7. He faxed voluminous material which he believed demonstrated that the accusations were false. He was assured by Channel 7 that they would get back to him before the programme was shown. They did not do so. The falsity of the imputations in these circumstances, I believe, increased the hurt caused by the publication, such that aggravated damages should be awarded ( Rigby v Associated Newspapers (No 2) [1969] 1 NSWR 729 at 738 per Walsh JA)." 80 The primary judge rejected a claim for aggravated damages based on the conduct of the trial (see [274]). He also rejected the respondent's claim for exemplary damages in States other than New South Wales. While he held (at [286]) that "[t]he programme was certainly not an impressive piece of investigative journalism", he was also prepared to accept (at [282]) that the appellant had also been duped by Ms Steele "a practised fraudster [who] was very plausible [and that] [i]t is hard to reconcile the feeble pensioner depicted on the screen with the woman who accumulated a significant criminal record in her lifetime and, at the age of 69, secured a substantial contract with a large corporation for the next five years." He concluded (at [285]) that the documents the respondent had provided to the appellant: "… simply demonstrated that there had been a series of loans. It confirmed that Doreen Smith, a feeble old woman, and Tony Steele, a schizophrenic and invalid pensioner, had been represented as having earned significant salaries. The documents did not capture Doreen Smith's real personality, and the representations she had made to Mr Mahommed. Nor did they answer the false suggestion made by Trevor Steele that Mr Mahommed had taken Doreen Smith's money and that of Tony Steele."

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(a) Dishonesty at trial 82 The primary judge summarised his adverse findings as to the respondent's dishonesty (at [289]) which I repeat for convenience: "First, Mr Mahommed, when making applications for a loan on behalf of a client, was obliged to furnish the lender with accurate information. The lender required an estimate of the applicant's assets (including the value of household items, motor vehicles and money in the bank). It also required a statement of earnings. In three applications, Mr Mahommed made an upward adjustment of the value of certain assets or income (the first Smith application (supra paras [100]-[102]); the first Steele application (supra para [109]) and the second Steele application (supra para [117])). Secondly, when called upon to provide an explanation for such changes before Palmer J, and before this Court, Mr Mahommed said different things at different times. Collectively, his explanations were improbable. It is likely that in each case he changed the figures to put the applicant in a rather better light. Strangely, he did so although he recognised that such material was of marginal relevance and that the primary determinant, in terms of approval from the lender, was the value of the real estate being offered as security (supra paras [101], [109], [144]-[146]). Thirdly, in October 2003 and again in April 2004, Mr Mahommed submitted applications to the lender on behalf of Doreen Smith, which included a statement of income which he knew to be false or in respect of which he was wilfully blind, failing to ask obvious questions which would have revealed its falsity (supra paras [193]-[200]). I believe he did so partly out of friendship and partly out of self interest. Again, from his perspective, he was aware that the primary determinant, in terms of approval, would be the real estate security. Fourthly, having been seriously defamed by the defendant on 29 June 2004, the plaintiff was then joined in an action brought by Doreen Smith, Tony Steele and Maxwell Developments which came before Palmer J in 2005. He was called upon to account for his dealings with Ms Smith, Tony Steele and the company. He had, by that time, been made aware by the Office of Fair Trading (Exhibit J) and the programme itself, that Tony Steele was allegedly schizophrenic and an invalid pensioner. Instead of providing a truthful account of his dealings with Tony Steele, which might have shown him in a poor light as a mortgage broker, in terms of his duty, he gave a false explanation in his affidavit (Exhibit 35) (24.1.05). He repeated that explanation, with some elaboration, before Palmer J and this Court." (emphasis added)

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Use of the adverse trial findings 83 The primary judge (at [291]) adopted the statement in Gatley on Libel and Slander, 10th ed (2004) Sweet & Maxwell (at [33.28]) that evidence in reduction of damages was admissible on two relevant bases: first, if it demonstrated the plaintiff's bad reputation and secondly, if it was properly before the court on some other issue. The issue of bad reputation depended on the admissibility of the Steele-Smith adverse findings - whose admission in his Honour's view was precluded by Rochfort (at [292] - [293]). 84 The primary judge then turned to consider whether he could take the adverse trial findings into account in mitigation of damages as being "evidence properly before the Court on some other issue". 85 His Honour carefully reviewed the authorities as to the use of evidence on this basis from which he drew the following principles: (a) evidence of specific acts properly admitted on a plea of justification and/or comment may be taken into account when assessing damages even though the plea has failed (at [294] - [297]); (b) the evidence said to be in mitigation must be sufficiently connected in time to bear upon the matters before the Court (at [298]); ("contemporaneity") (c) the evidence must relate to the relevant "sector" of the plaintiff's reputation (at [299]); ("sector identification") (d) the touchstone of determining the relevant "sector" is the particular sector to which the defamatory material relates (at [300] - [301]); ("sector identification") (e) to identify the sector too broadly is unfair to the plaintiff; too narrowly is unfair to the defendant (at [302] - [303]); ("sector identification") (f) the identification of the relevant sector is not easy (at [304] - [316]); ("sector identification") (g) in identifying the relevant sector, one looks at the defamatory material and its context, as well as the terms of the imputations pleaded (at [313] - [315]) ("sector identification"). 86 The primary judge did not regard the contemporaneity issue as presenting any difficulty, observing "[t]he material, the subject of adverse findings, was reasonably contemporaneous with the publication itself, including the Equity proceedings which took place in the following year" (at [298]). The respondent does not challenge this conclusion.

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Sector identification 87 The issue of sector identification was more problematic. 88 The primary judge noted (at [322]) that the issue was whether the adverse trial findings could be used in mitigation of imputations 1 to 12. His Honour approached the sector identification issue on two bases. First, the possible sectors he identified and secondly, those advanced by the parties. 89 As to the sectors he identified, his Honour found (at [323]) that: "The two possible sectors are: 1. Mr Mahommed's reputation for financial honesty. 2. Mr Mahommed's reputation for truthfulness." 90 He held (at [324]): " There is a significant difference between someone who is prepared to lie, especially to cover up wrongdoing, and someone who steals from another . Both are dishonest. However, dishonesty is a large umbrella. It is a crude classification for conduct which is very different. A person may have a reputation as a liar, but not a thief." (emphasis added) 91 Having observed (at [325]) that three of the imputations - imputation 1 ("the plaintiff is a thief"), imputation 5 ("the plaintiff kept stealing money from a dementia patient") and imputation 10 ("the plaintiff is a thief") - "involved the suggestion of financial dishonesty without more", his Honour said: "326 Only in the very broadest sense could it be said that the fact that a person is shown to be a liar in certain circumstances is relevant to the fact that he is a thief. To adopt the test of Ipp AJA in McBride, that part of the plaintiff's reputation which was capable of being harmed by the publication was his reputation for financial integrity or honesty, not his reputation for truthfulness." (emphasis added) 92 The remaining imputations, in his Honour's opinion (at [327]), were broader in scope. "…[C]ombin[ing] financial dishonesty with a generalised description of the means by which the financial objective was accomplished ('ripped off', 'swindled', 'took advantage of', 'dishonest financial adviser and mortgage broker'). The gravity of the imputation … extends beyond financial dishonesty. It includes the means of obtaining that objective and lying thereby becomes relevant ." (emphasis added) 93 His Honour then held: "328 Here the material put forward in mitigation, with one possible exception, related to the plaintiff's reputation for truthfulness, not financial honesty . The possible exception was the third matter in paragraph [289] supra, where Mr Mahommed put forward an application on behalf of Doreen Smith for reasons which included his own financial self interest. That matter aside, the remaining matters appear to be far removed from a person who is a thief, who steals money from clients. 329 So, if the matter were to be approached upon the basis that there were two different sectors, the evidence put forward in mitigation could not be relied upon in respect of Imputations 1, 5 and 10, apart from the matter to which I have just made reference (the third matter in para [289] supra, where Mr Mahommed pursued his own self interest). On this approach, the matters in mitigation could be relied upon in respect of all other imputations." (emphasis added) 94 The primary judge then returned to the way the parties put the sector case, saying: "330 However, both parties identified the relevant sector rather more broadly, namely 'honesty in business' (defendant) and 'honesty as a mortgage broker' (plaintiff). On either characterisation, it seems to me that all matters are available in mitigation in respect of all imputations. However, the distinction in terms of relevance between lying and stealing would remain. The circumstances in which the lying occurred would also be relevant. The marginal increase in the value of assets in the Smith/Steele applications was, in relative terms, a very minor form of dishonesty. Putting forward Ms Smith's application containing a statement of income knowing it to be false, or refraining from enquiry which would reveal its falsity, was more serious. Nonetheless, in comparison to what was said about Mr Mahommed on the programme, it was also a very mild form of dishonesty. 331 One then comes to the false explanations provided by Mr Mahommed in his affidavit on 24 January 2005 (Exhibit 35) and his evidence before Palmer J and this Court. There is no question that Mr Mahommed's conduct involved serious and repeated dishonesty. Nonetheless, there was a context. The 'cover up' followed closely upon the programme. The programme comprehensively and unfairly savaged Mr Mahommed's reputation, including his reputation for financial honesty. I have no doubt that he was shattered by the experience and especially the injustice of what had been said about him. To lie in such circumstances, in the hope of recovering one's reputation, was foolish. Ultimately it did not help. It was nonetheless a very human reaction and one which does not necessarily suggest a pervasive dishonesty in Mr Mahommed's character." (emphasis added)

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I infer that the primary judge's reference to the respondent's evidence before Palmer J was not a reference to Palmer J's adverse findings. It is apparent from his Honour's specific consideration of those findings to which I will come, that he concluded he could not take any findings Palmer J made into consideration in mitigation. 95 It was not, with respect, clear from his Honour's conclusion on the issue of sector identification to what extent he was of the view he could take into account the adverse trial findings and, to the extent he did, the degree to which they might have a mitigatory effect. 96 The position becomes somewhat clearer, however, when it is seen that in quantifying damages, the primary judge referred to the evidence called in mitigation in the following terms (at [348]): "The matters proved in mitigation are more directly relevant to [imputations 11 and 12] , and especially Imputation 12 ("dishonest financial adviser and mortgage broker"), than to the other imputations. Nonetheless, there was, in each case (including Imputations 11 and 12), a substantial gulf between the dishonesty collectively described by each publication and the dishonesty (serious though it was in some cases) that the defendant was able to show in its case in mitigation." (emphasis added) (b) Adverse findings in the Steele-Smith proceedings 97 The Steele-Smith adverse findings the appellant sought to rely upon were (Steele-Smith proceedings at [100] - [103]): " 98 I have formed the strong view that it would be utterly impossible for Mr Tony Steele to have understood the nature of the transactions with Liberty Funding into which he was entering and that someone experienced in the finance industry, such as Mr Mahommed, would have recognised that fact unmistakeably within a minute or two of conversation with Mr Steele. 99 Yet Mr Mahommed gave evidence that he had a number of lengthy meetings with Mr Tony Steele in which Mr Steele gave him information about his financial position, provided him with other information for insertion in the loan applications, and appeared to read for himself and to understand the terms of the loan application and the various declarations therein appearing. Mr Mahommed said that he noticed nothing at all unusual about Mr Tony Steele's physical appearance or manner. He did not even remark that Mr Tony Steele walked with a limp. 100 I find Mr Mahommed's evidence as to his dealings with Mr Tony Steele to be incapable of belief. I am satisfied that Mr Steele is, and was at the time of these transactions, completely unable to initiate a business discussion, provide financial information, read the loan applications or any other document proffered to him by Mr Mahommed, or to understand any explanation of the transaction given to him by Mr Mahommed. 101 I find that Mr Mahommed did not tell the truth in his evidence about Mr Tony Steele. My assessment of Mr Mahommed's credit is supported by my conclusion that he deliberately made false entries in the loan applications for the loans to Mr Tony Steele as to the value of Mr Steele's assets, namely, the value of his motor vehicle, the amount in his bank account and the value of his household property. Mr Mahommed conceded that he had not been given the figures for the values of these items of property which he inserted in the first loan application for Mr Tony Steele. His explanation was that when inserting the figures for these items in the loan application he must have made a mistake and 'hit the wrong button'. 102 That explanation might be plausible for one item but not for three separate items. Further, the 'mistake' did not occur in just one loan application but the wrong figures were actually increased in a subsequent loan application. Mr Mahommed could not give any satisfactory explanation as to how this happened. Despite Mr Mahommed's denials, I am satisfied that he was 'improving' the figures in Mr Tony Steele's loan application for the purpose of making the application look more attractive to the prospective lender. 103 In summary, I find that when Mr Tony Steele executed the loan documentation for the loans from Liberty Funding he did not understand the nature and quality of his acts. However, while Mr Mahommed must have been aware of that fact, there is no evidence that Liberty Funding or Liberty Financial was aware of it nor is there any evidence of anything known to either of them which should have put them on enquiry. … 121 For the reasons which I have given above, I have found that Mr Mahommed must have known that Mr Tony Steele could not understand the nature of the loan transactions into which his mother and his brother were inducing him to enter. It follows that to submit Mr Tony Steele's loan applications to Liberty Funding was a breach by Vestecorp of its obligations under Clause 3.1(d) of the Introducer Agreement. If those loan applications had not been submitted to Liberty Funding, neither it nor Liberty Financial would have been involved in any loan transaction with Mr Tony Steele and would not have incurred the costs relating to Mr Tony Steele's claims in these proceedings ." (emphasis added)

[75]

Quantifying damages 101 The primary judge recognised (at [336]) his obligation to ensure there was an appropriate and rational relationship between the relevant harm and the amount of damages awarded: s 46A(1), Defamation Act. He noted the figures to which the appellant had drawn to his attention of personal injury awards in this State (including those regulated by statute) for the purposes of s 46A(2) of the Act with "the present award appropriate for 'a most extreme case' under the Civil Liability Act 2002, [being] $427,000 and $366,000 under the Motor Accidents Compensation Act 1999". He reminded himself by reference to Rogers v Nationwide News Pty Ltd [2003] HCA 52; (2003) 216 CLR 327 (at [76]) per Hayne J (with whom Gleeson CJ and Gummow J agreed (at [35]) as to damages) that s 46A(2) identified "a presumptive outer limit to awards for defamation." 102 The primary judge decided (at [337]) that in view of the fact there were multiple imputations (each a cause of action) and three publications it was appropriate to give a separate verdict for each of the three publications. His Honour added that it was "important to be mindful of the fact that there was likely to be a substantial overlap in the viewing audience" noting "the idea of the promotions was to tease the audience, exciting their interest in the forthcoming programme." 103 The primary judge concluded (at [339] - [341]) that the first matter complained of conveyed serious imputations which, in combination, were devastating to the respondent's reputation. While the promotion was "brief but dramatic", everything conveyed was untrue and the hurt to the respondent's feelings was significant. He awarded (at [349]) the respondent $50,000, including aggravated damages, in respect of its broadcast. 104 His Honour regarded (at [342]) the second matter complained of as "more of the same." However it was longer, and: "[I]ncorporated images of the enfeebled Doreen Smith, underlining the callousness of Mr Mahommed's behaviour."

[76]

Those images were followed by images of Trevor Steele accusing the respondent of robbing his mother blind and saying like he would "like to see him spend a lot of time in gaol" (at [342] - [343]). The primary judge found (at [344]) that "what was said was completely untrue." He awarded (at [349]) the respondent $50,000, including aggravated damages, in respect of its broadcast. 105 His Honour found (at [345]) the programme repeated the false allegations made in the two promotional broadcasts. It also named the respondent, and involved a confrontation with him in his city of residence: "His crime and his callousness was worse because, according to her son, all she wanted was a trifling amount for Christmas presents (supra para [21]). Instead, she had been induced to borrow between $800,000 and $1.2 million (supra para [24]). No sooner had the money been loaned to her, than it was transferred to Mr Mahommed's personal account (supra para [25]). The pretext was fees owing. This was, according to an expert in consumer law, 'one of the absolute worst' cases (supra para [29])." 106 The primary judge noted (at [347]) that none of these allegations was true, each was enormously damaging to the respondent's reputation and hurtful to his feelings. 107 It was at this stage that the primary judge referred (at [348]) expressly to matters of mitigation, observing that the matters proved in mitigation were more directly relevant to imputations 11 and 12, and especially imputation 12, but noting, at the same time, the "substantial gulf between the dishonesty collectively described by each publication and the dishonesty (serious though it was in some cases) that the defendant was able to show in its case in mitigation." I would infer, accordingly, that his Honour regarded his adverse trial findings as mitigating the damages in relation to those imputations, but not to any great extent. 108 His Honour awarded (at [349]) the respondent $140,000 in respect of the programme, including aggravated damages. 109 His Honour gave a total verdict in the sum of $240,000 (at [349]), and ordered the appellant to pay the respondent's costs (at [350]).

[79]

The appellant: substantial/contextual truth 112 The appellant submitted, first, that the primary judge erred in requiring it to establish that the respondent was both a dishonest financial advisor and a dishonest mortgage broker, in order to make out its defence that imputation 12 was a matter of substantial truth. It contended it was not required to establish the proof of every aspect of its allegations against the respondent. It argued that it could prove imputation 12 was substantially true by proving the substantial "sting" or "charge", that no substantial harm could be occasioned to the respondent's reputation by the addition of "financial advisor" to "mortgage broker" because it was his dishonest character in the discharge of his business duties which caused imputation 12 to bear a defamatory sting and that no "ordinary reasonable person" would think less of the respondent by reason of the additional unproved element. 113 The appellant next submitted that if the Court concluded imputation 12 was substantially true, the factual findings made by the primary judge provided a sufficient basis upon which this Court could find that it was substantially true that the respondent was a dishonest mortgage broker, and that its substantial truth defence in relation to imputation 12 was made out, as too, was its defence of contextual truth relying on that imputation. 114 The appellant contended the factual foundation for the dishonesty element of imputation 12 could be discerned from the evidence that the respondent, as a mortgage broker acting on behalf of a lender, was contractually obliged to Liberty Financial to act honestly in providing information. Instead, as the primary judge found, in making applications to Liberty Financial for Ms Smith and Tony Steele the respondent inflated the value of the non-real estate assets and included a false statement of Ms Smith's income. 115 Finally, the appellant submitted that the effect of imputation 12 being established as a matter of substantial truth was that the publication of each of imputations 7 - 11 did not further injure the reputation of the respondent: s 16(2)(c), Defamation Act. It argued this was so because all the imputations related to the same sector of the respondent's reputation - a matter addressed further below. The appellant's written submissions did not descend into detail as to how, notwithstanding the substantial truth of imputation 12, it could be said that each of imputations 7 - 11, particularly the imputation that the respondent "is a thief", did not further injure the respondent's reputation. Its counsel acknowledged in oral submissions that that was a "hurdle", emphasising that that was why the primary focus of the appellant's submissions was on mitigation.

[80]

The appellant: mitigation 116 The appellant accepted the primary judge's statements of principle concerning the use in mitigation of evidence properly before the Court in relation to some other issue, but contended his Honour misapplied those principles when determining, in particular, the issue of sector identification in determining the sector too narrowly, in a way too favourable to the respondent. It accepted that the issue involved a characterisation question, but contended that, nevertheless, the primary judge's approach was appellably erroneous. 117 Although submitting it was not entirely clear what conclusion the primary judge reached on the sector issue, the appellant appears to have contended that his Honour's conclusion was that the matters the appellant sought to rely upon in mitigation went to the respondent's reputation for truthfulness, rather than his reputation for "financial honesty". It contended that this was a fine, and unsustainable, distinction. 118 The appellant next argued that to be sustainable, identification of the sector had to be a conclusion the ordinary reasonable viewer would draw or, to put it another way, one which would make sense to such a person. It relied upon Lord Denning's statement in Plato Films Ltd v Speidel [1961] AC 1090 (at 1140) that, "if the libel imputes theft, the relevant sector is [the plaintiff's] character for honesty, not his character as a motorist." 119 The appellant contended there was ample evidence before the primary judge that the respondent had engaged in serious and repeated dishonesty, both in dealing with his clients and in committing what amounted to perjury before Palmer J and his Honour - a finding which would ordinarily be regarded as one of substantial gravity. It argued that lying on oath to two Supreme Court judges to advance his own interests or deflect criticism was objectively very serious and ought to have worked a significant reduction to the respondent's damages, and must likewise be made out by evidence he submitted false documents to Liberty Financial. 120 The appellant submitted the respondent did not deserve a reputation for honesty, or damages on the basis of such a reputation and his damages should have been substantially reduced accordingly.

[81]

The appellant: overruling Rochfort 121 The appellant submitted the primary judge should have taken the Steele-Smith adverse findings into account in mitigation of damages as evidence of the respondent's bad reputation. It challenged the proposition that evidence in reduction of damages is evidence "accumulated from one source or another over the period of time that precedes the occasion of the libel that is in suit" as explained in Rochfort (at 23). It pointed out that Rochfort did not consider the ongoing nature of loss in defamation proceedings. It pointed out that Rochfort has been doubted in this Court and departed from in other jurisdictions. It adopted the reasoning of Ipp AJA (Beazley JA agreeing) in Australian Broadcasting Commission v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430 (at [68] - [75]) as demonstrating the substantial error of Rochfort. 122 The appellant contended Rochfort was wrong because it failed to acknowledge that post-publication evidence may reveal that a plaintiff did not deserve the reputation s/he was claiming to restore. It argued it was anomalous that the Steele-Smith adverse findings could be received in mitigation if already before the court on some other basis, but not received otherwise. 123 Finally, the appellant submitted that Rochfort was affected by substantial error of a kind which could be clearly demonstrated and which warranted it being overruled, notwithstanding that it was a prior authority of this Court: Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 (see [261] - [301]). 124 It must be said that there was an air of diffidence around the appellant's Rochfort submissions. In oral submissions its counsel accepted the Court could come to the view that the Steele-Smith adverse findings were a small part of the case - indeed, in some ways, a "makeweight". This was, as I understand the submission, because of the substantial overlap between the adverse trial findings and the Steele-Smith adverse findings - both of which were based upon the same transactions. 125 The appellant accepted that if the Court was to hold that evidence of post-publication judicial findings were admissible in principle, their admissibility in this case would still depend upon them being relevant to the defamatory publications.

[84]

The respondent: substantial/contextual truth 130 The respondent submitted that every material part of imputation 12 had to be established for the appellant's substantial truth defence to be made out. He argued that the description of him as a "dishonest financial adviser" was an integral part of imputation 12. He also contended the "financial adviser" aspect of the imputation was more serious than the allegation he was a "dishonest mortgage broker". He drew attention to the fact that the programme referred to Ms Smith losing "everything" because of his "advice". He submitted that that statement was wrong, that he had not given Ms Smith any financial advice - merely arranged mortgages at her and her son's request. He also pointed out that there was no default on any of the mortgages and everyone was paid out. He pointed out that the appellant led evidence in support of the proposition that he was a dishonest mortgage broker, but none that he was a dishonest financial adviser. 131 Finally the respondent submitted the appellant had advanced no arguable basis as to how imputation 12, even if substantially true, could "swamp" the other imputations (especially imputations 7 - 10) conveyed by the programme. The respondent: mitigation 132 The respondent submitted the appellant had no ground for complaint in respect of the primary judge's approach to mitigation or quantum. He argued that the primary judge correctly identified (and applied) two relevant sectors, being a liar and being a thief. He contended the primary judge took the adverse trial findings into account in assessing damages in relation to the dishonesty imputations, as ameliorated by the following contextual factors: that there was no financial dishonesty on his part and that the dishonesty in relation to the loan applications ranged from "minor" to "mild" (at [330]). Even though his Honour had recognised the respondent's false explanations in his affidavit and in his evidence in the Steele-Smith proceedings and at trial involved "serious and repeated dishonesty" (at [331]), he had recognised that he had understandably lied to try to restore his reputation - which while "foolish", was "a very human reaction … which does not necessarily suggest pervasive dishonesty."

[87]

Substantial truth/contextual truth 138 In order to establish imputation 12 was substantially true, the appellant had to establish that every material part of it was true: Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416 (at 419) per Starke J; (at 420) per Dixon J; (at 424 - 425) per Evatt J. However this does not mean the appellant had to prove the truth of every detail of the words established as defamatory (Li v The Herald & Weekly Times Pty Ltd [2007] VSC 109 (at [85]) per Gillard J), rather the defence of substantial truth is concerned with meeting the sting of the defamation: Herald & Weekly Times Ltd v Popovic [2003] VSCA 161; (2003) 9 VR 1 (at [274]) per Gillard AJA (Winneke ACJ generally agreeing and Warren AJA agreeing). As Lord Shaw of Dunfermline explained in Sutherland v Stopes [1925] AC 47 (at 79): "It remains to be considered what are the conditions and breadth of a plea of justification on the ground of truth. The plea must not be considered in a meticulous sense. It is that the words employed were true in substance and in fact. I view with great satisfaction the charge of the Lord Chief Justice when he made this point perfectly clear to the jury, that all that was required to affirm that plea was that the jury should be satisfied that the sting of the libel or, if there were more than one, the stings of the libel should be made out . To which I may add that there may be mistakes here and there in what has been said which would make no substantial difference to the quality of the alleged libel or in the justification pleaded for it ." (emphasis added). 139 If the appellant established imputation 12 was substantially true, then in order to establish its defence of contextual truth, it had to demonstrate that by reason of its substantial truth, each of imputations 7 - 11 did not further injure the respondent's reputation: s 16(2)(c), Defamation Act; Amended Defence to Third Further Amended Statement of Claim, para 8; Notice of Appeal, ground 4. This requires the tribunal of fact to weigh or measure the relative worth or value of the several imputations contended for by both parties: Allen v John Fairfax & Sons Ltd (Supreme Court of New South Wales, Hunt J, 2 December 1988, unreported; BC8801264 at 7); referred to with approval: John Fairfax Publications Pty Ltd v Jones [2004] NSWCA 205 (at [13]) per Spigelman CJ; see also John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; (2001) 53 NSWLR 541 (at [5]) per Spigelman CJ with whom Rolfe AJA agreed); (at [61]) per Hodgson JA. The defence will fail if the plaintiff's imputations would still have some effect on his or her reputation notwithstanding the effect of the substantial truth of the defendant's contextual imputations: Whelan v John Fairfax Publications Pty Ltd [2002] NSWSC 1028 (at [35]) per Levine J. 140 The s 16(2)(c) test has been referred to colloquially as a requirement that the contextual imputation(s) "swamp" the plaintiff's imputations: John Fairfax Publications Pty Ltd v Jones (at [66]) per Hodgson JA, Spigelman CJ agreeing; John Fairfax Publications Pty Ltd v Blake (at [41]) - although that expression must only be understood as shorthand, and should not detract attention from the statutory language: Whelan (at [36]); see also Fawcett v John Fairfax Publications Pty Ltd [2008] NSWSC 139 (at [172]) per Simpson J. 141 In order to understand the materiality of the words used in imputation 12, it is open to the Court to have regard to the matter complained of which explains their significance: ABC v McBride (at [47]) per Ipp AJA. 142 In my view the primary judge erred in holding that the appellant had to prove the substantial truth of each element of imputation 12 he set out (at [221]). There was only one reference in the programme to the respondent being "a financial adviser" and giving "advice". Elsewhere the programme referred to the respondent's conduct by reference to his identity as a mortgage broker (see primary judgment (at [15], [17], [29] and [30])). In particular, in the introduction to the programme, Ms Robson referred to the possibility of Ms Smith losing her assets "all because of her dealings with a mortgage broker", that he seized upon her dementia and had "been able to swindle a forgetful Doreen out of everything she owns". She then introduced the investigator, Mr Richardson. The introduction, as might be expected, summarised the thrust of the programme: the respondent's allegedly dishonest dealings with Ms Smith. The relevant transactions were identified as "dubious mortgages" the respondent had set up for Ms Smith and Tony Steele and loan applications the respondent had completed in relation to those mortgages. The expert in consumer protection, Mr Field, who was shown as commenting on the respondent's alleged transgressions, identified the case as "one of the absolute worst" involving, relevantly, mortgage brokers. His comment that the case showed "what can go wrong in the mortgage broking industry" concluded the programme. 143 In my view, with respect, the sting of the defamation was that the respondent had acted dishonestly in relation to Ms Smith and Tony Steele, and had done so in his capacity as a mortgage broker. In the part of the matter complained of to which the respondent pointed, the commentator referred to the respondent as calling himself "a financial adviser and mortgage broker" then said the respondent's "so-called advice has seen an elderly woman lose everything …". In my view in the context of the programme, the ordinary reasonable viewer would not have distinguished between advice given by a person who called himself a "financial adviser" and that given (even without the requisite licence) by a person who called himself a "mortgage broker". The statement that he had identified himself as "a financial adviser" was not, accordingly, a material part of imputation 12. 144 I would accept the appellant's submission (with which I did not understand the respondent to cavil) that the primary judge's factual findings provide a sufficient basis upon which this Court can find that the appellant established the substantial truth of imputation 12. It is sufficient to refer, in this respect, to the primary judge's findings that the respondent submitted applications to Liberty Financial on Ms Smith's behalf which included "a statement of income he knew to be false or in respect of which he was wilfully blind, failing to ask obvious questions which would have revealed its falsity" (at [289]). Ground 1 of the appeal should be upheld. 145 I would not, however, uphold the appellant's defence of contextual truth insofar as imputations 7 - 10 are concerned. Each of those imputations made a substantive allegation either of, or bordering on, a crime - as the primary judge said in the nature of stealing as well as a grave act of abuse of a mentally disadvantaged person to obtain for his own benefit all her assets (imputation 8). While an imputation that he was a "dishonest financial adviser and mortgage broker" was, itself, a grave allegation, it could not in my view be said that by reason of its substantial truth, imputations 7 - 10 did not further injure the respondent's reputation. 146 The position is more difficult in relation to imputation 11 (the plaintiff charged Doreen Smith outrageous fees). When dealing with sector identification the primary judge grouped this imputation with imputation 12 as going to the respondent's honesty in the sense of telling the truth. As I say when dealing with this issue, I have some difficulty with that characterisation. The accusation that a person charged outrageous fees is indifferently levelled from time to time at all those who charge fees from tradespeople to professionals. It does not necessarily impute dishonesty (save possibly at a subliminal level to the extent it conveys the charging of fees to which a person was not entitled) - more that a person is excessively avaricious having regard to reasonable standards. However, in my view, it conveys a lesser sting than imputation 12 - which expressly labels the respondent as a dishonest person. In my view imputation 11 would not further injure the respondent's reputation having regard to the substantial truth of imputation 12. 147 Ground 4 should be upheld, but only in relation to imputation 11.

[88]

DAMAGES 148 Some general observations about the object of the tort of defamation, and the nature of damages awards, as well as the concept of mitigation of damages, in relation to that tort should be made before turning to the specific complaints about the issue of mitigation. 149 The law of defamation seeks to strike a balance between, on the one hand, society's interest in freedom of speech and the free exchange of information and ideas (whether or not that information and those ideas find favour with any particular part of society) and, on the other hand, an individual's interest in maintaining his or her reputation in society free from unwarranted slur or damage. The tort is concerned with damage to reputation; it is that damage which founds the cause of action. Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer: Dow Jones & Company Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575 (at [23], [25], [26]) per Gleeson CJ, McHugh, Gummow and Hayne JJ; see also (at [124]) per Kirby J. 150 A person who is defamed does not get compensation for his or her damaged reputation, but receives damages because s/he was injured in his or her reputation, that is simply because s/he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as consolation to him or her for a wrong done: Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 (at 150) per Windeyer J. 151 The three purposes served by damages awarded for defamation, which "overlap considerably in reality" and ensure that "the amount of the verdict is the product of a mixture of inextricable considerations", are consolation for the personal distress and hurt caused to the plaintiff by the publication, reparation for the harm done to the plaintiff's personal and (if relevant) business reputation and vindication of the plaintiff's reputation: Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 (at 60) per Mason CJ, Deane, Dawson and Gaudron JJ. As their Honours then said (at 60 - 61): "The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant: Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR, at p 150; Coyne (1991) 172 CLR, at p 216; John Fairfax & Sons v Kelly (1987) 8 NSWLR 131, at p 142; McCarey v Associated Newspapers Ltd [No.2] [1965] 2 QB, at p 107. 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 libel, 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: Fleming, Law of Torts, 8th ed. (1992), p 595."

[89]

These passages were referred to with approval in Rogers v Nationwide News Pty Ltd (at [60]) per Hayne J. 152 A person's "reputation" is what other people think s/he is: Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 (at [1371]). It is to be distinguished from a person's "character" which is what he or she in fact is: Plato Films Ltd v Speidel (at 1137 - 1138) per Lord Denning. As Devlin LJ explained in that case (at 1100) in a passage to which Meagher JA (with whom Stein JA agreed) referred with approval in O'Hagan v Nationwide News Pty Ltd [2001] NSWCA 302; (2001) 53 NSWLR 89 (at [4]): "The action for libel is an action for loss of reputation. On the issue of damage, what has to be investigated is not whether the plaintiff is in truth a good or bad man, but whether he is reputed to be a good or bad man. If a man's reputation is already so bad that it cannot be made worse, the man who defames him will, in fact, have done him no further damage". 153 It is not necessary for a plaintiff to adduce evidence that his or her pre-publication reputation was good: Zunter (at [44]) per Handley JA (Spigelman CJ and McColl JA agreeing). In support of that proposition, Handley JA quoted with approval the following passage from Scott v Sampson (1882) 8 QBD 491 (at 503) per Cave J: "Speaking generally the law recognizes in every man a right to have the estimation in which he stands in the opinion of others unaffected by false statements to his discredit; and if such false statements are made without lawful excuse, and damage results to the person of whom they are made, he has a right of action. The damage, however, which he has sustained must depend almost entirely on the estimation in which he was previously held. He complains of an injury to his reputation and seeks to recover damages for that injury; and it seems most material that the jury who have to award those damages should know if … he is a man of no reputation ." (emphasis added) 154 As is uncontroversial, a defendant in defamation proceedings can seek to mitigate the damages to which the plaintiff is entitled. 155 The principal and probably the only "exact" meaning of the term "mitigation", as McGregor on Damages, 18th ed (2009) Sweet & Maxwell (at [7 - 002]) explains "concerns the avoiding of the consequences of a wrong, whether tort or breach of contract". 156 It is what McGregor (at [7 - 008]) refers to as the "subsidiary or residual" meaning of the term "mitigation" with which this appeal is concerned, that is to say where the measure of damages, whether by way of aggravation and/or mitigation may be affected by "the conduct, character and circumstances of the claimant and the defendant". 157 This meaning of "'mitigation' simply deals with particular items which go to show that the injury is not as great as would prima facie appear": McGregor (at [7 - 010]). McGregor adds: "no question of subsequently lessening the loss arises." However that proposition is not developed either in the general section of McGregor in which it appears, or in the chapter of McGregor dealing with defamation. 158 The primary judge referred (at [291]) to the categories of evidence in mitigation upon which the appellant sought to rely. They were, as extracted from Gatley, 10th ed (at [33.28]); see 11th ed (2008) (at [35.29]), the plaintiff's bad reputation and evidence properly before the court on some other issue. The appellant, as I understand its case, sought to rely on the adverse trial findings on the latter basis, and the Steele-Smith adverse findings on the former basis. 159 Neither party appears to have drawn his Honour's attention to s 47(b) of the Defamation Act which makes admissible on the question of the amount of damages, where it is relevant to that question that the imputation complained of was or was not true or a matter of substantial truth, evidence as to whether the imputation was or was not true or a matter of substantial truth. I would infer that the appellant did not rely upon it because it was not seeking to rely on the Steele-Smith adverse findings as being true in fact (and because there appears to have been no resistance (save as to sector identification) to it relying upon the adverse trial findings). However the issue of sector identification, as the appellant conceded, went to both bases on which it sought to mitigate damages. 160 I would also note the respondent faintly contended that s 91 of the Evidence Act 1995 (NSW) rendered the Steele-Smith adverse findings inadmissible. However s 91 "does not prevent the tender of judgments which contain findings as to the existence of facts relevant to the issues in the trial in which they are tendered. It merely prevents the judgments from being tendered for the purpose of proving the existence of those facts" (emphasis in original): Ainsworth v Burden [2005] NSWCA 174 (at [109]) per Hunt AJA; Handley and McColl JJA agreeing. The appellant does not seek to use the Steele-Smith adverse findings on that basis. 161 I will, accordingly, deal first with the appellant's complaint about the primary judge's treatment of the issue of sector identification, then with the admissibility of the Steele-Smith adverse findings, in deciding whether Rochfort should/needs to be overruled.

[90]

Mitigation: identification of sector of reputation 162 The fundamental requirement of evidence of good or bad character is that it "should be directed to that sector of a man's character which is relevant": Plato Films v Speidel (at 1140) per Lord Denning, a proposition accepted by the Court of Appeal in Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 (at 801). As Ipp AJA observed in ABC v McBride (at [17]) by "'character', Lord Denning meant 'reputation'." As the Court explained in Morosi (at 801), "relevant" meant "relevant to the libel". 163 The issue of sector identification was dealt with in ABC v McBride in a manner neither party to this appeal challenged. In that case the ABC sought to plead bad reputation in mitigation of damages in defamation proceedings commenced by Mr McBride in relation to a Four Corners television program broadcasted in August 1988. He pleaded two imputations each of which, in substance, alleged that the matter complained of conveyed that he had endangered his women patients. The particulars (the "reputation particulars") the ABC advanced to assert that Mr McBride did not have a good reputation in the practice of his profession related to matters arising both before and after the date of publication. The particulars fell into two categories: public knowledge and public findings. 164 The public findings relied on were first, a "Committee of Inquiry" finding in November 1988 that Dr McBride had engaged in scientific fraud, secondly findings in 1993 of the Medical Tribunal to the effect that by reason of his scientific fraud, he lacked good character and ordering that his name should be removed from the Register of Medical Practitioners in New South Wales and thirdly, findings in 1996 of the same Tribunal refusing to re-admit him as a medical practitioner in New South Wales. The scientific fraud relied upon related to the testing of drugs used or to be used in the treatment of pregnant women: see ABC v McBride (at [10]). 165 The other category pleaded was what was said to be public knowledge from December 1987 that Mr McBride had engaged in scientific fraud and of his misconduct as a medical practitioner. 166 The ABC submitted the official (or quasi-official) "public findings" referred to in its reputation particulars were analogous to convictions and within the principle which permitted their proof (see [89]). 167 Mr McBride was successful in an application before Levine J to have the reputation particulars struck out. The ABC was given leave to appeal, but the appeal was dismissed because it was held that the reputation particulars did not relate to the "relevant sector" of Mr McBride's reputation. While judgment in ABC v McBride was reserved, the Court delivered judgment in O'Hagan which also considered the issue of sector identification. As Ipp AJA noted (ABC v McBride (at [25])), in O'Hagan, "Meagher JA remarked on the difficulties in determining the relevant sector and the absence in the authorities of reliable guidelines that could assist in the inquiry" - a difficulty Ipp AJA acknowledged (at [28]). Those guidelines were established in ABC v McBride. 168 Ipp AJA first rejected a submission by Mr McBride that the reputation particulars sought to permit the ABC to introduce evidence of justification "through the back door" even though it had not pleaded justification; this, it was submitted, should not be allowed: see [13(a)]. His Honour held (at [14] - [15]) that that argument was answered by May LJ's remarks in Burstein v Times Newspapers Ltd [2001] 1 WLR 579 (at 600 - 601). Fitzgerald AJA reached the same conclusion (see [86]). I will return to Burstein. 169 Ipp AJA then thoroughly reviewed the authorities concerning "[t]he rule that evidence of bad reputation must be confined to the 'relevant sector' of the plaintiff's reputation" which he described (at [16]) as "a particular manifestation of the policy against indiscriminate use of mitigatory material." It is unnecessary to recapitulate that consideration, save as to one point to which I will shortly refer. Suffice it to say his Honour concluded (at [28]) that the rule means "merely that the evidence, to be admissible, must be relevant to that part of the plaintiff's reputation capable of being harmed by the defamatory material." In recognising the difficulty in practical application of that test, his Honour observed (in a passage the primary judge quoted (at [311])): "29 On the one hand, the exercise of defining a particular 'sector' should not result in the widening of the area of the plaintiff's reputation beyond that which is capable of being harmed by the defamatory material. For example, in determining the sector applicable, the ambit of admissible evidence should not be enlarged artificially by reason of a desire to define the sector merely by reference to easily defined segments of the plaintiff's occupation. On the other hand, the relevant sector should not be limited 'by the artificial construct we now know as an imputation' (per Levine J in Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 1119, as applied in O'Hagan v Nationwide News Pty Ltd by Stein JA and Brownie AJA). 30 The essential question in determining the relevant sector remains: what is the scope of the plaintiff's reputation capable of being harmed by the defamatory material?" 170 Despite his reference to the artificial construct of an imputation, Ipp AJA also remarked (as the primary judge recognised (at [314])) that significant weight had to be given to the imputations in applying the rule (at [34]). He identified (at [35]) Mr McBride's imputations as relating to his reputation as a medical practitioner only in so far as that reputation concerned his attitude to and dealings with patients, in the sense of the degree of care, concern, and compassion that he displayed towards them, and his dedication to and compliance with the therapeutic ideals of accepted medical practice. This was in contrast to the reputation of a person as an experimental scientist (at [36]). 171 Ipp AJA posited (at [38]) that one way of testing whether the reputation particulars went to the relevant sector was to determine the evidence of good reputation Mr McBride could adduce at trial. While he concluded it would be open to him to lead evidence as to his reputation as a medical practitioner dedicated to the well-being of his patients as relevant to the defamation alleged by the imputations pleaded, it would not be permissible for him to attempt to prove that he had a reputation for integrity in carrying out scientific experiments because that would be irrelevant to the reputation alleged to have been harmed by the defamatory imputations. Accordingly his Honour concluded (at [39]) that the relevant sector was Mr McBride's reputation as a medical practitioner, but limited to his attitude to and dealings with patients. 172 It is relevant to note at this point that in his review of the authorities, Ipp AJA referred (at [22]) to Television New Zealand Ltd v Prebble [1993] 3 NZLR 513 (at 525), where Cooke P said on a strike-out application: "There is an unacceptable risk that, if allowed to give evidence, purportedly in mitigation of damages, that the plaintiff had a reputation for any of these latter qualities, the defendant might be able to divert the course of the trial from the true issues ." (emphasis added) 173 Ipp AJA regarded this consideration as relevant to testing whether the ABC's reputation particulars were too broad. His Honour concluded (at [44]) that they were because they were capable of allowing the ABC to lead evidence "bearing on aspects of [Mr McBride's] reputation entirely unrelated to the sector that [was] relevant for the purposes of [his] claim for defamation [and]… this might enable the appellant 'to divert the course of the trial from the true issues.' " Accordingly he held (at [45]) the reputation particulars were embarrassing and unfairly prejudicial to the respondent, and were properly struck out. His Honour found support for his conclusion by looking at the matter complained of as a whole to identify the sting of the imputations (see [46] - [50]). His Honour also had regard to the facts recounted in McBride v Walton [1994] NSWCA 199 to conclude (at [56]) that "the relevant sector of [Mr McBride's] reputation is entirely different from that which might be affected by the material in the reputation particulars." Although it was unnecessary to do so, his Honour then considered whether the ABC could rely in mitigation on material occurring after the date of the defamatory publication. This entailed a consideration of Rochfort. I will return to this aspect of the case when dealing with that topic. 174 Fitzgerald AJA (at [97]) regarded the issue as to whether post-publication findings were admissible as one of causation, drawing an analogy between continuing harm to reputation between publication and trial and continuing physical pain and suffering from a personal injury caused by a tort between injury and trial and said the consequences of the intervening events had to be decided on the same principles. He noted with apparent approval both the ABC's submission that "'public findings', like a post-publication conviction, were causally related to McBride's own conduct" as well as the latter's submission that convictions are based on proof beyond reasonable doubt while the "public findings" particularised by the ABC were based only on the balance of probabilities. However his Honour (at [98]) deferred final consideration of this issue pending determination of whether the reputation particulars went to the relevant sector. As his Honour concluded the reputation particulars were properly struck out (and could not be salvaged by an amendment the ABC sought on appeal), he did not express a final opinion on this topic. 175 Fitzgerald AJA concluded (at [105]) that the reputation particulars which depended on " 'public findings' [that Mr] McBride's 'scientific fraud' and 'misconduct as a medical practitioner' related to his falsification of laboratory tests on rabbits to support his theory that a drug was unsafe for use by pregnant women and his persistence in that falsehood for an extended period" were the antithesis of the imputations which he alleged were conveyed by the broadcast. While his Honour accepted there was a relationship between the reputation particulars and the imputations in the sense that both generally related to the medical and scientific sector or sectors of Mr McBride's life, he held that "any public reputation which he had for false claims that a drug was unsafe for use by pregnant women could not rationally diminish the harm to his reputation from imputations" that he had endangered his women patients. 176 Fitzgerald AJA added: "106 Reference was made in O'Hagan to the imprecision associated with the 'same sector' of activities test which is used in this context. At least some of the difficulty evaporates once its [sic, it's] understood that the 'same sector' test is a negative test to exclude irrelevant matters from proof in mitigation of damages, and that the ultimate test is whether the facts, matters and circumstances affecting a plaintiff's reputation which a defendant seeks to rely on in mitigation could rationally diminish the harm to the plaintiff's reputation from the defamatory imputation." 177 The test Ipp AJA posed (at [38]) of testing the admissibility of the reputation particulars against the evidence Mr McBride could lead of good reputation reflected the principle that while evidence may be led by a plaintiff of his or her good reputation, either by his/her own testimony or from the evidence of witnesses, that evidence, like a defendant's evidence in mitigation, must relate to "the relevant sector" of the plaintiff's reputation. Meagher JA illustrated this in O'Hagan (at [5]) as follows: "Thus if a plaintiff sues on a libel that he is a dishonest solicitor, it is not to the point that he has a reputation as a good golfer. Similarly if the libel is that he is dishonest, it is not to the point for the defendant to demonstrate that he is a reckless motorist. (See Plato Films , per Lord Denning)." 178 Meagher JA observed in O'Hagan (at [6]) that "evidence of bad reputation must be limited to general reputation, evidence of specific incidents being inadmissible." This statement reflects the long-established principle in Scott v Sampson. The appellant briefly submitted that the adverse trial findings did not offend this principle. The respondent did not contend otherwise. I would understand that apparent concession to be on the basis that while the matters the appellant sought to rely upon in mitigation were based on the primary judge's (and Palmer J's) factual findings, it argued that those findings supported the proposition that the respondent had a reputation for engaging in serious dishonesty, both in his dealings with Ms Smith and Tony Steele and in giving evidence before Palmer J and at trial - and that the sting of the matters complained of (and imputations) was, as submitted at trial, the respondent's "honesty in business": see O'Hagan (at [9]) per Meagher JA; (at [22]) per Stein JA. 179 As I have said, however, it was difficult, with respect, to discern what the primary judge regarded as the "relevant sector". His Honour clearly regarded the adverse trial findings as demonstrating the respondent was a liar and therefore affecting his reputation for truthfulness (see [323]). His Honour consistently said when discussing this issue that there was a distinction between lying and stealing (see [326], [328], [330]). It is plain (at [348]) that the primary judge took his adverse trial findings into account in mitigation, but did not consider they could go in mitigation to imputations 1 - 10, the sting of each of which was that the respondent was a thief - or, at least, a person who was prepared to take advantage of a mentally disadvantaged person to obtain her assets. 180 In my view the primary judge did not err in so characterising the relevant sectors to which the imputations related. The contrast between imputations 1 - 10 and 11 - 12 was stark, as his Honour recognised (at [328]). The first group (several of which were identical as to each broadcast) stated, as his Honour found (at [325]) that the respondent was a thief (1, 5, 10), a person who "ripped off" a dementia patient (2, 4, 7), took everything she had to the tune of $1 million (3, 8), swindled her (9) and because of those dealings deserved to spend a lot of time in gaol (6). The notion of the respondent as a thief was reinforced in the first and third matters complained of by the emphatic statement "stolen, stolen, stolen" accompanied by onomatopoeic sound effects (see Mahommed v Channel Seven [2006] NSWCA 213 (at [27])). 181 These imputations conveyed the notion of serious criminality. If I disagree with his Honour, it is only to the extent that he characterised imputations of this class as suggesting "financial dishonesty". That, with respect, tended rather to blur the line between that sector, and the sector to which imputation 12 went - which was clearly that of dishonesty - which his Honour recognised (at [328]). 182 The appellant has repeated its submission at trial (see [330]) - contending that the relevant sector for all imputations is "dishonesty". I would reject that submission. It pitches the relevant sector at too high a level of generality for this case. 183 The illustration Lord Denning gave in Plato Films v Speidel (at 1140), which the appellant sought to invoke in support of its characterisation of the relevant sector, is also pitched at too high a level of generality to be applicable in the present case. His Lordship's observation was by way of example - he recognised that it is for the judge to determine what the relevant sector is. That, as the authorities reveal, is a fact-dependent exercise, requiring careful analysis of the matter complained of, not the mechanistic application of hypothetical illustrations. 184 The characterisation for which the appellant contends does not, in my opinion, accurately identify the scope of the respondent's reputation capable of being harmed by the imputations, as Ipp AJA explained in ABC v McBride. Nor, to apply Fitzgerald AJA's approach, in my opinion, could the adverse trial findings (or, indeed the Steele-Smith adverse findings), rationally diminish the harm deriving from the imputations that the respondent was, in substance, a thief. 185 I would add, applying again Ipp AJA's approach in ABC v McBride, that another way of testing the sector identification issue is by reference to the evidence of good reputation the respondent could have called. It would have been open to him to give evidence, and call witnesses, as to his general reputation for not being a thief. It would not have been open to him to do the same insofar as his reputation for honesty (in the sense of telling the truth) was concerned, because by the time of the trial Palmer J had found that he had lied on oath and made false entries on loan applications. 186 In my view it was open to the primary judge to characterise, and distinguish, the relevant sectors as being that of a person who was a thief and a person who lied. 187 I would reject grounds 5 and 6.

[91]

Mitigation: reception of Steele-Smith adverse findings; correctness of Rochfort 188 The question of the admissibility of post publication evidence which goes to the issue of the respondent's reputation is central to the issue of the admissibility of the Steele-Smith adverse findings. 189 In Gatley on Libel and Slander, 11th ed (2008) Sweet & Maxwell (at [35.34]) the learned authors say: " Evidence of subsequent bad character. The evidence must be confined to the general bad character of the claimant prior to, or at the time of, the publication of the libel. Evidence of bad character subsequent to that time is not admissible in mitigation of damages, otherwise 'a person might slander another and then call some of the neighbours to say that they had heard imputations which he himself had set afloat': Thompson v Nye (1850) 16 QB 175." (emphasis added) 190 The footnote to the emphasised portion of that paragraph attributes this proposition to Associated Newspapers Ltd v Dingle [1964] AC 371 (at 399) per Lord Radcliffe and Rochfort (at 22 - 23), but adds "in Australia at least there is some doubt as to whether this is a rule strictly applicable in all circumstances" - referring to Anderson v Ah Kit [2004] WASC 194 where Master Newnes reviewed authorities on admission of post-publication evidence to which I will come, but expressed no concluded view on their correctness. 191 Fleming, The Law of Torts, 9th ed (1998) LBC Information Services (at 662), expresses the view that "[t]he plaintiff's conduct, before or after the publication, may also provide ground for mitigating damages", noting that "[d]amages have been reduced … because the plaintiff provoked the publication or 'behaved badly' in some other way." The only case referred to is Roux v Australian Broadcasting Commission [1992] 2 VR 577 (at 603) where Byrne J held, as explained in the headnote, that the failure or refusal of the plaintiff to take up an offer by the publisher, before or after publication, to answer the allegations may be relevant to damages. Rochfort was not referred to either in Roux or in The Law of Torts. The decision in Rochfort 192 As a prelude to its substantive attack on Rochfort, the appellant submitted that the relevant statement of Sugerman ACJ (at 23) (with whom Holmes and Mason JJA agreed) was obiter dicta and not ratio decidendi, and thus, in any event, not binding on this Court. 193 Mr Rochfort had been charged with aiding and abetting a theft. The fact of the charge was reported in an article published by John Fairfax & Sons Ltd ("Fairfax"). Mr Rochfort brought proceedings claiming that the article was defamatory of him. The charges reported in the article were later dropped, and fresh charges of conspiracy arising out of the same events were laid. Isaacs J acceded to Fairfax's application to have the trial of the defamation proceedings postponed until after the criminal conspiracy proceedings. Mr Rochfort appealed. 194 On appeal Fairfax advanced three reasons to support Isaacs J's orders. The first reason related to public policy, the other two to the potential prejudice Fairfax claimed it would suffer should the civil action precede the criminal trial. This included the possible loss of the opportunity to rely on any conviction of Mr Rochfort as going to the worth of his reputation, and therefore to damages. 195 The critical passage of Rochfort which has been regarded as precluding the admissibility of post-publication convictions is found in Sugerman ACJ's conclusion that, if the criminal trial was held first and Mr Rochfort was convicted, that conviction would not be admissible on the question of Mr Rochfort's reputation. The reputation of a plaintiff that might be put in issue in defamation proceedings was limited, according to his Honour (at 23), to the plaintiff's reputation "as accumulated from one source or another over the period of time that precedes the occasion of the libel that is in suit" (quoting Lord Radcliffe in Associated Newspapers Ltd v Dingle (at 399) - the passage it will be recalled Gatley cited as authority for [35.34]). As such, no prejudice to the civil trial proceeding first could arise on the basis Fairfax asserted because any relevant conviction of Mr Rochfort would not be admissible. 196 The appellant submitted that this conclusion was not central to Sugerman ACJ's decision in Rochfort. It contended that the decision dealt primarily with the operation of the "felony-tort rule" (that criminal proceedings must be taken with regard to a felonious tort before private rights of action can be pursued; as to which see Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26). The rationale for Sugerman ACJ's decision to refuse a postponement of the defamation proceedings, it argued, turned on his Honour's refusal to apply the felony-tort rule which was not affected by his reasoning on the admissibility of post-publication convictions. 197 The appellant also submitted it was not clear that Sugerman ACJ was directing his mind to the consequences for defamation proceedings generally of his observations on the admissibility of post-publication evidence. 198 The appellant pointed to Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312 where Gillard J described the relevant passage in Rochfort as "dicta" (at [316]). 199 However in ABC v McBride Ipp AJA treated the relevant part of the decision in Rochfort as ratio observing (at [64], [65]) that Rochfort represented: "[A]uthority in this Court that supports, squarely, the finding [made by the primary judge] … that it is contrary to well established principle to allow proof of a bad reputation, in the relevant sector, brought about by matters that occurred after the publication of the alleged defamatory material." (emphasis in original) 200 The appellant noted, however, that Ipp AJA's statement was itself dicta, as his Honour (at [75]) ultimately left the question of the correctness of Rochfort "for another day." The appellant submitted that this Court is not bound by its earlier statements, in dicta, as to the authoritativeness of another decision of the Court. 201 I do not understand that Sugarman ACJ in Rochfort failed to apply the felony-tort rule. Rather, in my view, he distinguished it (at 21 - 22) because the matter complained of did not assert that the plaintiff had committed a crime but, rather, that he had been charged with one. However it was necessary for his Honour, in order to deal with the arguments raised on appeal, also to address Fairfax's submission that if Isaacs J's orders were not upheld, it would suffer prejudice if, as it transpired, the criminal trial resulted in the plaintiff's conviction. It was in those circumstances that his Honour made the remarks (at 22 - 23) the appellant seeks to have overruled as follows: "The case to which we have been referred of Goody v Odhams Press Ltd [1967] 1 QB 333, itself illustrates that the admissibility of convictions for this purpose is limited to convictions which have occurred prior to the publication of the defamatory matter sued for. They are referred to throughout in that case as 'previous convictions'; and that they were previous convictions in the sense mentioned is the very ground on which their admissibility was claimed by the defendant in that case: see Gatley on Libel and Slander , 6th ed., p 584, par 1337 and cases there cited, noting particularly the observation of Lord Radcliffe in Associated Newspapers Ltd v Dingle [1964] AC 371 at 399: 'When one speaks of a plaintiff's "actual" reputation or "current" reputation (to quote my own adjective) one means his reputation as accumulated from one source or another over the period of time that precedes the occasion of the liable that is in suit.'" 202 In my view Ipp AJA was correct in characterising that passage of Sugarman ACJ's reasons as being part of the ratio. Subject to any distinction between convictions and judicial findings in civil proceedings, a matter I address below, that passage is binding on this Court to preclude evidence adverse to the respondent's reputation which came into existence following the publication of the matters complained of. It would be open to the Court to conclude that the decision in Rochfort was plainly or clearly wrong, and hence to overrule it, if it had a strong conviction to that effect and if the nature of the error could be demonstrated with a degree of clarity by the application of correct legal analysis: Gett v Tabet (at [294] - [295]).

[92]

Rochfort - other authorities 203 As Ipp AJA noted in ABC v McBride (at [67]) there were other authorities to the same effect as Rochfort, referring to Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 (at 119) where Neill LJ said, in substance that the proposition that evidence of reputation must be as at the date of the publication of the matter complained of accorded with principle and with the judgment of Cave J in Scott v Sampson (at 503). 204 However, as Ipp AJA also observed (at [68]) there is a "powerful argument" that can be mounted contrary to Rochfort. That argument involves the following propositions. First, a plaintiff in a defamation action sustains loss for each day that the defendant fails to pay the appropriate damages to him and, in many cases the award will reflect an amount for continuing injury to feelings and reputation to the date of verdict: see John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 (at 143) per McHugh JA (Kirby P agreeing). The respondent challenges that proposition which I will consider further below. Secondly, damages can be both increased or reduced by reason of the actions of the defendant after the date of publication: ABC v McBride (at [71]) referring to Broome v Cassell & Co Ltd [1972] AC 1027 (at 1125 - 1126) per Lord Diplock. Ipp AJA concluded (at [72] - [73]) from this recitation of principle that bearing in mind that Cave J recognised in Scott v Sampson (at 503) that a jury should know whether the person they are awarding damages is either of "of unsullied and unblemished reputation" or otherwise, and accepting "that damages for defamation continue to be incurred after the publication of the defamatory material, it should follow that evidence referring to a change in the reputation of the plaintiff after the publication date would be relevant." 205 Ipp AJA found support for this conclusion in Middendorp where Gillard J concluded that evidence could be led of two criminal convictions for serious offences which occurred after the publication of the defamatory material, saying: "338 In my opinion, to exclude evidence of relevant convictions, which affect the reputation of the plaintiff, prior to the assessment of damages, is to deprive the tribunal of fact of the material matter relevant to the vindication of the plaintiff's reputation. In my view, it is logical to extend what was said in Goody 's case to pre-trial convictions, and to do otherwise would fail to take into account one of the objects of damages, which is to restore the plaintiff's reputation in the eyes of those who know him and the public generally. 339 This happens at the time judgment is delivered, and it seems incongruous to award substantial damages to a plaintiff whose reputation, by reason of the commission of the relatively serious offence, has been destroyed prior to the judgment being pronounced. The Court is telling the world the plaintiff has a good reputation at the date of judgment, yet the truth is that he has no reputation. Such a result defies logic and common sense, and brings the law into contempt."

[94]

New Zealand authorities: post-publication reputation 209 The issue of admissibility of post-publication reputation evidence has been considered in New Zealand. 210 The appellant referred to the decision of the New Zealand Court of Appeal in Quinn as supporting its argument that the Steele-Smith adverse findings were admissible. The defendant broadcaster had pleaded in mitigation that other, later, media publicity about allegations made about the plaintiff seriously damaged his reputation and in effect "extinguished" any harm caused by its earlier broadcasts (at 65). Although the appeal did not concern the admissibility of that evidence McGechan J (Richardson and McKay JJ agreeing (at 40 and 47 respectively)) observed (at 66): "I accept a defendant may plead the windfall of post-defamation damage by extraneous causes to a plaintiff's reputation as a factor in mitigation of compensatory damage. The authorities are mixed, but it is a matter of common sense. The damage caused, an otherwise ongoing state, is not so extreme." 211 However Quinn was strongly disapproved in Television New Zealand Ltd v Ah Koy [2002] 2 NZLR 616 where (at [39]), dealing in obiter with a submission that it was inconsistent with Quinn (by analogy) not to permit evidence of similar imputations in other publications to be admitted in mitigation, the Court (Tipping, McGrath and William Young JJ) (at [40]; see also [48]) criticised McGechan J's common sense view which it said was not supported by the authorities and added: "Post-defamation damage to the plaintiff's reputation cannot, ex hypothesi, bear on the reputation which the plaintiff had at the time the cause of action arose. If the plaintiff's reputation suffers between that time and the time of trial it is in a sense a windfall for the defendant to be able to invoke this factor in mitigation of the damage its defamation has caused, particularly if the defamation in suit has promoted or encouraged other like publications. There is, we agree, some inconsistency in allowing evidence to be given of post-defamation extraneous harm to the plaintiff's reputation caused by publications for which others are responsible while not allowing in similar circumstances proof of post-defamation harm arising out of the same subject-matter." 212 It appears the position in New Zealand is not settled. In Tipple v Buchanan [2005] BCL 715 (High Court of New Zealand, 20 July 2005) (a case concerning pre-trial rulings), Panckhurst J observed (at [48]) that there was a tension between the obiter views expressed in Quinn and Ah Koy which prompted him to the view that the question of the admissibility in defamation proceedings of subsequent misconduct was a difficult one. His Honour criticised (at [51]) the rationale Gatley gave for the exclusion of subsequent bad character evidence as not greatly convincing. He pointed out (at [52]) that Associated Newspapers Ltd v Dingle concerned a sui generis category of evidence, that is similar defamatory publications, which, as explained in Ah Koy there were sound reasons in principle for excluding. He was (at [57]) attracted to McGechan J's observations in Quinn. Panckhurst J then said: "58 I think it would be incongruous to expect a jury to have regard to post-publication developments by which the defendant has mitigated the harm done, and to consider delay of the plaintiff's making as mitigating damages, and at the same time direct the jury not to have regard to specific instances of misconduct by the plaintiff during the interregnum . What the damages should be, will still remain a matter of assessment for the jury or the Judge sitting alone. Where a sound reputation has been seriously tarnished by the defamatory publication, and a subsequent instance of misconduct is minor by comparison, the degree of mitigation may be appropriately slight. If the subsequent misconduct is grave in nature, then the award may reflect as much. Importantly, scope for assessment and judgment remains." (emphasis added) 213 In short, New Zealand authorities demonstrate there is no concluded view on the admissibility of post-publication evidence, with a similar divergence of view to that demonstrated in Australia in relation to the more recent authorities and Rochfort. Use of post-publication material in defamation proceedings 214 There are a number of areas in the law of defamation where post-publication matters may be relied upon. Without being exhaustive those areas include the following. 215 First, the plaintiff may adduce evidence of statements made about, and conduct directed towards, him/her as a consequence of the publication, insofar as that evidence tends to prove actual injury to reputation: see Mirror Newspapers Ltd v Fitzpatrick [1984] 1 NSWLR 643 (at 647, 657). 216 Secondly, the plaintiff may also prove in support of a clam for aggravated damages (or exemplary damages where available) the defendant's subsequent conduct "from the time the libel was published down to the time [of] verdict": Praed v Graham (1889) 24 QBD 53 (at 55) per Lord Esher MR; see also The Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254 (at 267) per Isaacs J. Such subsequent conduct is also admissible on the issue of malice: The Herald & Weekly Times Ltd v McGregor (at 265, 267 - 268) per Isaacs J; Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 (at 513 - 514) per Dixon, Williams, Webb and Kitto JJ; Ainsworth v Burden (at [47]) per Hunt AJA; Handley and McColl JJA agreeing. As Isaacs J explained in The Herald & Weekly Times Ltd v McGregor (at 266 - 267) in the case of exemplary damages: "The conduct [of the defendant sufficiently related to the injury sued for, but outside the range of compensatory damages] so visited [on the plaintiff] is not what is sued for; nor is it the continuation or the consequence of the subject matter of the action - the publishing of the libel . It is later and independent conduct of the defendant, and is met with exemplary damages when found after examination by the proper tribunal of fact in the particular case to be of a reprehensible character. " (emphasis added) 217 Thirdly, in the defendant's case, on the issue of justification, evidence of facts which come into existence after the time of publication may be admitted where an imputation amounts to a general charge against the character of the plaintiff. This category of evidence was discussed extensively in Habib v Nationwide News Pty Ltd [2010] NSWCA 34 (at [311] ff). It does not require repetition. Suffice it to say (see [319]) the authorities hold that such material can be relied upon if there is both a "a qualitative proximity [between the defendant's particulars of truth and] … the charge laid in the imputation and the particulars must be of matters that have a temporal proximity" - propositions which have resonance with the admissibility of evidence going to reputation. 218 However, the authorities on the issue of the admissibility of such evidence on justification tend to support the admissibility of post-publication material as evidence of the truth of the defamatory publication at the time of publication - hence the requirement of contemporaneity. The appellant appeared to accept that temporal requirement should be operative in relation to its submission that the Steele-Smith adverse findings should be admitted, although its contention was also more broadly expressed as being, in substance, that the tribunal of fact was entitled to know the plaintiff's reputation at the time of trial.

[95]

The continuing nature of damages for defamation 219 I turn to consider the respondent's contention that, as a matter of authority, until recent divergence in New South Wales, harm caused by defamation is regarded as occurring at the point of publication and hence anything which occurs post-publication is irrelevant. In my view that contention cannot be sustained. That is apparent from the foregoing discussion, but I will also consider the respondent's challenge to decisions of this Court which proceed on the premise that there is a continuing nature to damages for defamation 220 It is clear, from the authorities in this court, the High Court and the English Court of Appeal that damages in defamation proceedings, insofar as they act to provide solace to the plaintiff for injury to his reputation and hurt to his feelings, can address harm that occurs after publication. I have already referred to this briefly (at [215] - [216]). 221 A brief reference to Lord Diplock's observation in Broome v Cassell (at 1125) sets the background to consideration of the respondent's submissions on the continuing nature of damages for defamation: "[T]he harm done by the publication, for which damages are recoverable under head (1) [compensatory damages] does not come to an end when the publication is made. As Lord Atkin said in Ley v Hamilton (1935) 153 LT 384 at 386: 'It is impossible to track the scandal, to know what quarters the poison may reach.' So long as its withdrawal is not communicated to all those whom it has reached it may continue to spread. I venture to think that this is the rationale of the undoubted rule that persistence by the defendant in a plea of justification or a repetition of the original libel by him at the trial can increase the damages …. The defendant's conduct between the date of publication and the conclusion of the trial may thus increase [compensatory damages]." (emphasis added) " 222 Referring to the passage emphasised above from Broome v Cassell in Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211, Toohey J (Dawson and McHugh JJ agreeing) observed (at 238), "compensation for continuing harm is a component of normal compensatory damages". 223 Two categories of decision at least in this Court, being those the respondent seeks to have the Court overrule, proceed on the basis that the harm flowing from defamation may extend past the date of publication: those relating to the award of interest and the admissibility of evidence of hurt to feelings.

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(a) Theoretical basis for the award of interest 224 Decisions regarding the award of interest, most notably Fairfax v Kelly, proceed on the basis that damage for defamation is sustained both on publication and thereafter, potentially up to judgment. In Fairfax v Kelly (at 143) McHugh JA (with whom Kirby P agreed) observed: "In a practical as well as a theoretical sense, the plaintiff in a defamation action is entitled on publication to damages … In many cases the award will reflect an amount for continuing injury to feelings and reputation to the date of verdict. Hence the amount awarded may, and usually will, be higher than the amount which would have been awarded as at the date of publication or even as at the date of the writ." 225 In Marsden the Court (at [1547]) described the effect of McHugh JA's discussion in Fairfax v Kelly as follows: "McHugh JA recognised that damages in vindication of reputation will carry full interest from the date of publication. Damages in compensation for injury to feelings and reputation will not all carry interest from the date of publication, because the injury includes injury over the period to the trial. Because the two kinds of damages overlap and interrelate, his Honour said, as a practical approach all damages should be treated as representing a loss spread over the period from the date of publication to trial." 226 In Marsden, the Court also observed that the facts of that case demonstrated that damages had been awarded significantly for vindication, and that on the facts the substantial injury to reputation had been immediate (at [1555]). The Court noted that: "Whether there is a continuum over which loss has been sustained depends on the loss, and where the damages must have been significantly in vindication of reputation that [is] apt to distort any continuum." 227 As McClellan CJ at CL has observed (Aktas v Westpac Banking Corporation Ltd [2009] NSWCA 9 (at [90]), Ipp and Basten JJA agreeing; overturned on appeal on a different point: Aktas v Westpac Banking Corporation Ltd [2010] HCA 25; (2010) 84 ALJR 551): "[T]he nature and extent of the damage suffered as a result of a defamation depends on the particular facts. It may be that most of the damage to the plaintiff was suffered close in time to the publication, such that continuing damage was minimal: Vilo v John Fairfax & Sons Ltd [2000] NSWSC 1206 (at [25])." 228 The respondent sought to draw support for his submission that the harm to which damages relate in defamation proceedings is "once-and-for-all" from the discussion of Samuels JA in Fairfax v Kelly and Mahoney JA in Australian Consolidated Press v Driscoll (1988) Aust Torts Reports ¶80-175. In my view, these authorities go no further than establishing that that part of compensatory damages which vindicate reputation are damages to which a plaintiff is theoretically entitled on publication, and thus do not "continue". However, those authorities also demonstrate that damages for hurt to feelings and injury to reputation are, or at least can be, of a continuing nature. 229 In Fairfax v Kelly, Samuels JA dissented from McHugh JA's judgment on the capacity of a court to allow interest on an award of damages for defamation. His Honour was of the view (at 138) that to satisfy the condition for an award of interest under s 94 of the Supreme Court Act 1970 (NSW) (as it then stood), the question was whether: "… the damages represented detrimental consequences borne by the plaintiff before trial, or the practical impact of which had already, by that date, been experienced." 230 Samuels JA accepted that "damages for injury to feelings caused by a defamatory publication" (at 138) and "damages as a solace for a wrong done" (at 139) both satisfied this condition. However, his Honour took that view that "damages as vindication must be differently regarded." Samuels JA explained (at 139): "They are scarcely compensation at all… They are not intended to relieve the consequences of the libel but to constitute a demonstrative mark of vindication. … It follows that a jury might properly increase the sum which they thought appropriate to cover the other heads of damage in order to satisfy the requirement of vindication. So an amount of damages reached by that means could not be regarded as merely attaching the label of vindication to a sum calculated by reference solely to other elements. And damages so assessed are not awarded in respect of any event which can be regarded as a detriment incurred before trial, and hence, in my opinion, do not satisfy the conditions laid down for the allowance of interest." 231 In his Honour's view (at 140), the resulting damages award was one in which "no distinct part of the whole sum is attributable to any one of the elements which the total must reflect." Moreover, juries and judges alike were in fact forbidden in defamation matters from so disaggregating the award. His Honour ultimately dissented from McHugh JA because he considered it was not possible to separate out the elements of the award into those which could attract interest under s 94, and those which could not (at 140): "[I]nterest cannot be awarded because the necessary condition that it be allowed only on separately identified amounts of damages for past loss or detriment cannot be satisfied. It is not a matter of discretion but of an exclusionary rule." (emphasis added) 232 While it is true that Samuels JA (at 139) described the publication as the "critical matter" occurring "once only and before trial", his Honour in the same passage accepted that the effect on the plaintiff "may be continuing or recurrent, and so require the damages to be apportioned" (emphasis added). I do not, accordingly, interpret Samuels JA's judgment as lending support to the proposition that damages in defamation proceedings relate to a "once-and-for-all" injury sustained on publication. 233 Driscoll, which the respondent also seeks to challenge, analysed the decision in Fairfax v Kelly. Hope JA (Mahoney and Priestley JJA agreeing) accepted (at 67,648) that "[d]amages for vindication would ideally carry interest from the date of publication, but damages for injury to feelings and reputation may relate to the whole period from publication to trial." His Honour then (at 67,651 - 67,652) formulated an approach to how in that case (at 67,651) the "constituent parts of the award should be taken into account in the calculation of interest." 234 Mahoney JA in Driscoll, as I have said, agreed with Hope JA but added some observations (at 67,652 - 67,653) concerning the difficulty of reconciling the basis for an award of interest for the period up to judgment on the basis that the plaintiff was entitled to damages immediately upon publication with the basis for reducing the interest awarded on account of a plaintiff's delay in commencing or prosecuting proceedings. It is not clear to me how the respondent derives from that judgment any support for his proposition that damages for injury to feelings and reputation are not of a continuing nature - a submission his counsel appeared to make in oral argument.

[98]

Conclusion on continuing nature of damages 236 It may well be the case, as McClellan CJ at CL observed in Greig v WIN Television NSW Pty Ltd [2009] NSWSC 877 (at [5]) that "[i]t is commonly accepted that the primary damage to a plaintiff's reputation and injury to feelings is occasioned at the time of publication and shortly thereafter". However, critical to that statement is the qualifying word "primary": damages for the injury to feelings and reputation caused by the publication of defamatory material must be assessed on their facts. It will not always be the case that injury of this sort will end or even lessen as time passes. Belief in the sting of the imputations may become more entrenched; the number of the plaintiff's acquaintances who are aware of the imputations may increase; the plaintiff's awareness of the lower regard in which he is held, and the consequent loss of self-esteem, may grow over time. These are factual matters that the current framework for assessing damages enables the court to consider. The proposition for which the respondent contends would artificially constrain the court's capacity to assess the extent of any damage done. 237 In my view the respondent has not demonstrated that the cases he referred to (at [23]) above were wrongly decided. False imprisonment cases 238 The proposition that damages to a person's reputation may continue up to the time damages are assessed (and that evidence going to mitigate or aggravate that damage up to that time is admissible) is supported by the false imprisonment cases. 239 In Walter v Alltools Ltd (at 40) Lawrence LJ (Mackinnon LJ and Cassels J agreeing), said: "[A]ny evidence which tends to aggravate or mitigate the damage to a man's reputation which flows naturally from his imprisonment must be admissible up to the moment when damages are assessed. A false imprisonment does not merely affect a man's liberty; it also affects his reputation. The damage continues until it is caused to cease by an avowal that the imprisonment was false ." (emphasis added) 240 Clarke JA followed Walter v Alltools Ltd in McDonald v Coles Myer Ltd (1995) Aust Torts Reports ¶81-361 (at 62,684 - 62,685), a claim for wrongful arrest and false imprisonment. His Honour noted that the passage from Walter v Alltools "was cited without comment by the High Court in Triggell v Pheeney immediately prior to its statement that the conduct of the defence may be taken into consideration as improperly aggravating the injury done to a plaintiff in a libel case if there is 'a lack of bona fides in the defendant's conduct or it is improper or unjustifiable'." Although his Honour expressed the view that statements in Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (at 243) and Mirror Newspapers Ltd v Fitzpatrick (at 660) would tend, in the context of libel, to deny the correctness of what Lawrence LJ said in Walter v Alltools I do not, with respect, understand those passages in that sense. I am also of the view that the High Court (Dixon, Williams, Webb and Kitto JJ) in Triggell v Pheeney - a defamation case - cited Walter v Alltools Ltd with approval as demonstrating analogically the continuing effect in a defamation case on the damage to the plaintiff's reputation of the defendant's failure to apologise or retract the defamatory statement and to persist in it to the end - as long as that failure demonstrated the defendant was lacking in bona fides and/or was acting unjustifiably and/or improperly: Waterhouse v Broadcasting Station 2UE Pty Ltd [1985] 1 NSWLR 58. 241 Walter v Alltools Ltd was also followed in Myer Stores Ltd v Soo, a case of false imprisonment (at 603) per Murphy J; (at 633) per McDonald J. Murphy J (at 603) after referring to Walter v Alltools Ltd commented that "[t]he principle invoked appears to be analogous to that applicable in defamation claims", referring to authorities dealing with the aggravation of damages caused by a defendant's post-publication conduct, for example pleading, but not proving, truth, and failure to apologise. 242 Charles JA drew a similar analogy in Sadler & State of Victoria v Madigan (at [63]) where he referred to statements in Coyne v Citizen Finance Ltd (at 237) per Toohey J and (at 241) per McHugh, J to the effect that in defamation proceedings the conduct of the defendant down to verdict is a matter on which the plaintiff may rely as aggravating the damages. Analogy with common law principles 243 Gatley on Libel and Slander, 9th ed (1998) Sweet & Maxwell (at [1.11]) dealing with the topic "Principle and precedent in defamation", observed that: "Arguments by analogy from other torts are not, in practice, treated as of much relevance to the decision of a new point in the law of defamation for English law has always treated defamation as firmly rooted in its historical origins, and not as open to the development and rationalisation that is acceptable elsewhere in the common law."

[99]

That section of Gatley was revised in the 10 th edition in a form repeated in the 11 th edition (at [1.14]) in a manner which does not require detailed analysis as it did not, in my view, detract from the point I have quoted from the 9 th edition. It is worth noting, however, that the authors substantially repeated (at [1.14]) an observation made in the 9 th edition (at [1.11]), that: "Even if defamation is regarded as a self-contained tort rather than a coherent structure covering the whole ground of protection of reputation in the broad sense, the courts have sometimes shown themselves willing to allow restrictive rules of defamation to be outflanked by reference to other, overlapping heads of liability." 244 It is clear that the authors did not regard the "defamation … as a self-contained tort" proposition as excluding the application of common law principles, as they pointed out (9th edition at [6.34]; see now 11th edition at [6.36] - [6.42]) for example, in dealing with republication, that "[c]ases of defamation are subject to no peculiar rule, but are governed by the general principles of tort with regard to causation and remoteness of damage." 245 It is pertinent in this context to observe that, as I explained in McCrohon v Harith [2010] NSWCA 67 (at [54]) (with Campbell JA and Handley AJA's agreement): "The general rule is that 'damages for tort or for breach of contract are assessed as at the date of the breach' - the date of breach rule: Johnson v Perez (at 367) quoting Miliangos v George Frank (Textiles) Ltd [1976] AC 443 (at 468) per Lord Wilberforce. However, the general rule is not rigid and 'will yield if, in the particular circumstances, some other date is necessary to provide adequate compensation': Johnson v Perez (at 367) per Wilson, Toohey and Gaudron JJ; (at 370 - 371) per Brennan J; (at 386 - 387) per Dawson J; see also Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] UKHL 12; [2007] 2 AC 353. As Campbell JA (with whom Macfarlan JA and Sackville AJA agreed) said recently, referring to Johnson v Perez , the 'certainty of [the] principle concerning the time as at which damages are assessed has now been eroded': Gagner Pty Ltd trading as Indochine Cafe v Canturi Corporation Pty Ltd [2009] NSWCA 413; (2009) 262 ALR 691 (at [51])." 246 In particular, as was explained (at [56] ff) "the general rule will yield if, at the time damages are assessed, the court is aware of new and material facts relevant to the assessment because courts prefers actual facts to speculation, prophecies, conjecture and guessing". It is unnecessary to repeat the discussion of authorities undertaken in McCrohon. Suffice it to say that notwithstanding the statement in Gatley (at [1.11]) there appear to me to be sound reasons why, if there is relevant post-publication material which goes to a plaintiff's reputation, that evidence should be admissible to ensure that the damages awarded accurately reflect the plaintiff's reputation at the time the damages are awarded. That approach is consistent with the approach in Plato Films v Spiedel (at 1142) per Lord Denning which supports the admissibility of evidence properly before the Court on some issue because otherwise "the plaintiff would recover damages for a character which he did not possess or deserve; and this the law will not permit." In my opinion the admissibility of such material should not be confined to cases where, for example, the defendant has only partially established a defence of truth or comment. As long as its admission is carefully confined in the same sense as reputation evidence is now confined, such post-publication evidence should, in my view, be admitted. However its admission should be approached with caution - the defendant should not be permitted to "divert the course of the trial from the true issues": Television New Zealand Ltd v Prebble (at 525) per Cooke P. 247 I would add that it appears that such evidence may, prima facie, be admissible pursuant to s 47(b) of the Defamation Act which is not limited as to time, but as that section was not debated on appeal I will not express any final view on the matter. 248 Accordingly, in my opinion, it would be open to the Court to overrule Rochfort. However, before reaching a conclusion on this it is appropriate to consider the distinction between convictions and judicial findings.

[100]

Whether judicial findings are analogous to convictions 249 In Goody, a defamation case, when dealing with the admissibility of prior convictions as evidence of bad reputation, Lord Denning MR (Danckwerts and Salmon LJJ agreeing) held (at 340 - 341): " …that previous convictions are admissible. They stand in a class by themselves. They are the raw material upon which bad reputation is built up. They have taken place in open court. They are matters of public knowledge. They are accepted by people generally as giving the best guide to his reputation and standing. They must of course be relevant, in this sense, that they must be convictions in the relevant sector of his life and have taken place within a relevant period such as to affect his current reputation. But being relevant, they are admissible. They are very different from previous instances of misconduct, for those have not been tried out or resulted in convictions or come before a court of law. To introduce those might lead to endless disputes . Whereas previous convictions are virtually indisputable." (emphasis added) 250 The issue of the admissibility of adverse trial findings was considered in Marsden (at [1392] ff). It was not necessary for the Court to come to a concluded view as the issue had not been raised at trial. Nevertheless their Honours opined (at [1396]), "[o]n the cases on mitigation of damages because the plaintiff has a bad reputation, findings in a judgment may go to the plaintiff's reputation, including where the judgment post-dates the publication of the defamatory matter." After discussing Goody, the Court said: "1402 It may be that convictions for a criminal offence can be regarded as evidence of bad reputation, that is, as evidence of what persons think of the plaintiff as distinct from what the plaintiff is, because they take place in open court and in that sense are matters of public knowledge and taken to be known: Lord Denning's reasons [in Goody ] so suggest. Salmon LJ's reasons include that conviction of a crime of violence or dishonesty would normally come to the attention of those who knew the plaintiff. Findings in civil litigation made in open court could be regarded as evidence of bad reputation because matters of public knowledge and taken to be known, or because likely to come to the attention of those who knew the plaintiff, in the same manner, but they are not necessarily in the same position as convictions for criminal offences ." (emphasis added) 251 There was no reference to Rochfort in the Court's reasons. However, when discussing (at [1403]) the use of a judgment which post-dates the publication of the defamatory matter, the Court referred to Quinn, Middendorp and (at [1405]) ABC v McBride. Rochfort was critically discussed on the admissibility of post-publication findings in the latter two cases. The Court in Marsden concluded: "1406 The reasoning in Middendorp Electric Co Pty Ltd v Sonneveld might support regard to findings in the proceedings in which the plaintiff claims damages for harm to and vindication of his reputation. To adapt what Gillard J said, it might be thought incongruous to award substantial damages to a plaintiff whose reputation, by reason of the findings of the trial judge, has been destroyed at the time the judgment in [sic, is] pronounced. The Court is telling the world the plaintiff has a good reputation at the date of judgment, yet the truth is that he has no reputation. 1407 But the situations are different. Courts act on evidence, and the court's findings are not themselves evidence in the proceedings - they are, of course, not known until judgment is delivered. The Goody v Odhams Press Ltd public knowledge cannot apply, and the notoriety of the unknown findings and their effect in fact on the plaintiff's reputation cannot be an issue in the proceedings. Thus there is not true incongruity in a court awarding damages on the basis of a good reputation but making findings actual or notional publication of which may (or may not) be detrimental to the plaintiff's reputation, since the court cannot properly pay regard to the effect of its findings on the plaintiff's reputation.

[101]

1408 That courts act on evidence, and not otherwise, is fundamental to our legal system. It would be undesirable that a plaintiff claiming damages for defamation should have taken into account against him findings which are not known until judgment is given, without the opportunity to address whether or to what extent the findings do affect his reputation…." 252 For the purposes of this case, these observations in Marsden appear to relate more to the admissibility of the adverse trial findings than the Steele-Smith adverse findings. I note that the respondent did not submit at trial, or on appeal, that Marsden precluded the primary judge from taking the adverse trial findings into account in mitigation - no doubt because this evidence was regarded as falling into the category of evidence admissible in mitigation because it was otherwise properly before the court. The conclusion the Court reached in Marsden was considered by McClellan CJ at CL in Habib v Nationwide News Pty Ltd [2010] NSWSC 924 (at [30] - [32]) when considering whether he should take into account in mitigation of damages adverse credit findings he had made about the plaintiff. His Honour expressed the view that the Court's view may not appeal to a jury applying common sense, but concluded (at [33]) that he should follow Marsden having regard to the strength of the view there expressed. 253 Insofar as the Steele-Smith adverse findings are concerned, however, Marsden supports the proposition that judicial findings which are in the public domain - even if made post-publication, may be admissible. The Court did not elaborate on the distinction it perceived between convictions and judicial findings - although some distinctions are self-evident: at the most elemental level the standard of proof required before the requisite conclusion is reached. Another distinction may be whether the findings are of an intermediate or ultimate nature. These issues were not debated on appeal. The respondent did not contend that the Steele-Smith adverse findings were inadmissible on any basis other than their post-publication status. 254 In my view, such findings, if relevant in the senses already discussed, should be admissible. Save as to the standard of proof, they appear otherwise to stand on much the same footing as convictions: they took place in open court and can be regarded, accordingly, as matters of public knowledge. The tribunal of fact should not be kept in the dark about the plaintiff's reputation at the time it comes to consider the award of damages 255 In my view Rochfort was wrongly decided. It did not recognise the continuing nature of damage in a defamation action - a position well established at the time it was decided. Moreover the developments in the principles governing the award of damages I have discussed also require the Court to consider "actual facts".

[103]

Admission of the Steele-Smith adverse findings: practical implications 257 The effect of this conclusion is that the Steele-Smith adverse findings should have been admitted at trial to the extent they were relevant to the relevant sector of the respondent's reputation. 258 However there are, in my view, good reasons for concluding that the admission of the Steele-Smith adverse findings would not have affected the damages the primary judge awarded. First, they were, as the appellant acknowledged substantially the same findings arising from the same transactions as the adverse trial findings. However, significantly, it is clear that Palmer J and Kirby J drew different conclusions about the nature of the respondent's conduct. Palmer J, for example, held (at [101]) that the respondent "deliberately made false entries" in Tony Steele's loan applications and (at [102]) "that he was 'improving' the figures in Mr Tony Steele's loan application for the purpose of making the application look more attractive to the prospective lender". 259 In contrast, the primary judge concluded (at [289]) that while the respondent made an upward adjustment of the value of certain assets or income, and changed the figures to put the loan applicants in a rather better light, he did so although he recognised that such material was of marginal relevance and that the primary determinant, in terms of approval from the lender, was the value of the real estate being offered as security and also (in relation to Ms Smith) that he included a false statement of income, partly out of friendship and partly out of self interest, even though, again, he was aware that the primary determinant, in terms of approval, would be the real estate security. If one allows for the proposition that the adverse trial findings are as cogent as the Steele-Smith adverse findings, even though they have not seen the light of day before the damages award is announced, then, in my view the reasonable assessor of the respondent's reputation may well be inclined to take the more favourable view of the respondent the primary judge formed than that Palmer J did. 260 In my view had the primary judge admitted the Steele-Smith adverse findings it was open to him to assess their influence on the respondent's reputation in the light of his own findings and form the conclusion that they would not substantially affect his assessment of damages. 261 Finally, I would observe that to the extent it might be thought the Steele-Smith adverse findings and the trial adverse findings were substantially to the same effect, the fact two judges had reached the same conclusion could not increase the mitigatory effect of those findings.

[104]

Burstein v Times Newspapers Ltd [2001] 1 WLR 579 262 Before I turn to the quantum of damages I will deal briefly with Burstein. 263 It is unclear whether the appellant sought to rely on appeal on the proposition that the Steele-Smith adverse findings should have been received as evidence of directly relevant background context in accordance with Burstein (at [41]). It so submitted at trial, while recognising that limits of relevance, sector and timing had to be observed in admitting the evidence on a Burstein basis. It referred to Burstein in its written submissions on appeal as considering the reception of sector identification evidence. It also referred to Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469 where I note Keene LJ discussed (at [56]) the difficulties which may arise in determining what constituted "directly relevant background" and accepted the need for courts to proceed with some caution in applying Burstein. 264 As I have said Burstein was referred to with approval in ABC v McBride without any substantive discussion. It is described in Gatley, 11th ed (at [35.43]) as "a new category of admissible evidence". It is apparent from English authorities that its proper application is still undecided, including the question whether "directly relevant background" can include post-publication facts - a proposition it might be thought is a contradiction in terms: see Rath v Guardian News and Media Ltd [2008] EWHC 398 (QB) per Tugendhat J (at [94], [99]); Tesco Stores Ltd v Guardian News & Media Ltd [2008] EWHC B14 (QB); [2009] EMLR 5 per Eady J (at [55]) (referring to observations on a number of occasions that the true ratio or ratios of Burstein "are by no means easy to divine"); Kaschke v Gray [2010] EWHC 1907 (QB) per Stadlen J (at [44] - [48]). 265 In West Australian Newspapers Ltd v Elliott [2008] WASCA 172; (2008) 37 WAR 387 (Special Leave Refused: Elliott v West Australian Newspapers Ltd [2009] HCATrans 153) Steytler P (with whom McLure JA relevantly agreed) also observed (at [63]) that the scope of the decision in Burstein was "to some extent uncertain and its application may be difficult in particular cases", referring to Birchwood Homes Ltd v Robertson [2003] EWHC 293 (QB) and generally, Gatley,10th ed (at [27.25], notes 2 and 3 and [33.43]), and A Kenyon, Defamation: Comparative Law and Practice (2006) UCL Press (at 350). 266 In the absence of substantive argument from either party on the application of Burstein, I do not consider it appropriate to delve into its possible ramifications in this case. Damages 267 The parties' submissions on the damages issue were succinct amounting to little more, with respect, than an assertion on the appellant's part that they were excessive, particularly if its submissions on mitigation were accepted, and, on the respondent's part to an assertion that they were modest or moderate. The respondent also contended that the size of the award for the programme reflected the primary judge's displeasure at the respondent and his mitigation of the damages. 268 In Moit v Bristow [2005] NSWCA 322 I explained (with Beazley JA and Campbell AJA's agreement): "120 In John Fairfax Publications Pty Ltd v O'Shane (No 2) (at [3]), Giles JA referred with approval to Mahoney ACJ's statement in Crampton v Nugawela (1996) 41 NSWLR 176 at 195 that 'the law should place a high value upon reputation, and in particular upon the reputation of those whose work and life depend upon their honesty, integrity and judgment'. He observed that '[t]he damages must also be a sufficient amount to make clear the vindication of [the plaintiff's] reputation' referring to Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44 at 61 and Crampton v Nugawela at 195. 121 In Broome v Cassell and Co [1972] AC at 1071, Lord Hailsham of St Marylebone LC said that the damages awarded for defamation must be such that 'in case the libel, driven underground, emerges from its lurking place at some future date, [the plaintiff] must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge'. Mahoney ACJ referred to that statement with approval in Crampton v Nugawela (at 193), a case decided after s 46A came into force, and held (at 194 - 195) that '[t]he award must be sufficient to ensure that, the defamation having spread along the "grapevine"… and being apt to emerge "from its lurking place at some future date", it was "sufficient to convince a bystander of the baselessness of the charge" '." 269 The appellant's complaint that the damages awarded were excessive invites appellate review of an exercise of discretion: Rogers v Nationwide News Pty Ltd (at [62]) per Hayne J. If an appellate court is convinced, not that in its own view the amount awarded is too high or too low, but that the amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case, it should intervene to prevent a miscarriage of justice: Carson (at 61 - 62) per Mason CJ, Deane, Dawson and Gaudron JJ. 270 In Rogers v Nationwide News Pty Ltd Hayne J observed that (at [74]) that s 46A of the Defamation Act draws attention to the fact that "damages awarded for defamation must take their proper place in the administration of justice…[and] must stand in a proper relationship with awards for the non-economic consequences of personal injury." He accepted (at [74]), however, that: "The relationship which s 46A(2) identifies is not, however, some precise or mathematical relationship between particular cases of defamation and personal injury or between particular classes of such cases. To do that would compare the incomparable." 271 When considering the issue of a rational relationship between the relevant harm and the amount of damages (s 46A) it must be recalled that a person's reputation is accorded high value. "[M]urdering a man's reputation by a scandalous libel may be compared to murdering his person": Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331 (at 364) per Isaacs J. As Mahoney ACJ (Handley JA concurring) said (at 193) in Crampton v Nugawela (1996) 41 NSWLR 176, "[i]n some cases, a person's reputation is, in a relevant sense, his whole life." 272 Even though a plaintiff may not come to court with a perfect reputation, s/he does not lose his right to damages. As Greer LJ said in Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1 (at 46) "a man with a damaged character is entitled to have his damaged character protected, and if newspapers for their own purposes falsely allege that he has been guilty of crimes and misconduct the jury might well consider that even a man of bad character ought not to have his character made out to be blacker than the proved facts warrant." 273 In challenging his Honour's use of the adverse trial findings in mitigation the appellant appeared to accept his Honour's characterisation of the respondent's conduct in changing the values of the Ms Smith's assets as "a mild form of dishonesty" compared to what was said about him on the programme (see [330]). However it criticised, as, in effect, too benign, his Honour's treatment (see [331]) of the respondent's false explanations before Palmer J and himself. It will be recalled that his Honour described this conduct on the respondent's part as "serious and repeated dishonesty" - a lie, but one made in the context of the matters complained of and although "foolish" as "a very human reaction … which does not necessarily suggest a pervasive dishonesty in [the respondent's] character." The appellant described the respondent's false explanations in court as involving technically the elements of perjury. I have no doubt that the primary judge was cognisant of the implications of the respondent giving false evidence on two occasions. It was a matter for his Honour to evaluate the respondent in the context of the events which led to him giving that evidence and the impression he formed of him at trial and thus to characterise the seriousness of his conduct. His Honour's characterisation would have to be demonstrably wrong for this Court to set it aside. In my view the appellant did not demonstrate any such error on his Honour's part in this respect. 274 I will deal first with the appellant's complaint that the primary judge should not have treated the matters complained of as separate publications for the purpose of awarding damages. It was, in my view, a matter for his Honour whether he awarded damages separately or en bloc for the imputations arising from the three matters complained of. As his Honour said (at [337]) " 'whether one or more causes of action are to be included in one verdict or judgment will depend upon the exercise of the trial Judge's judicial discretion' (Hayward v Thompson [1982] 1 QB 47, per Lord Denning MR at 62 quoting Scott LJ in Barber v Pigden [1937] 1 KB 664 at 684)." However it is also important to recall that in arriving at each verdict, his Honour was "mindful of the fact that there was likely to be a substantial overlap in the viewing audience" (at [337]). Once it is accepted that his Honour took the issue of overlap into account, it cannot be said, in my view that his Honour erred in a sense attracting appellate intervention, in awarding separate damages for the imputations conveyed by the three matters complained of, or in the amounts awarded for the first two broadcasts. Although they were broadcast in the short promotional material, it will be recalled that each conveyed grave allegations of theft against the respondent with the second imputing that he "deserved to spend a lot of time in gaol". As his Honour said (at [339]), "[e]ach of the imputations was serious [and] in combination, they were devastating to the plaintiff's reputation". In my view it cannot be said that the amount his Honour awarded for the first two matters complained of was such that no reasonable judge could have awarded it: Rogers v Nationwide News Pty Ltd (at [65]) per Hayne J. 275 If all things had been equal I would have reached the same conclusion in relation to the award of $140,000 in relation to the programme. However that award cannot stand in light of my conclusion that imputation 12 was substantially true and, accordingly, that the appellant has established its defence to that imputation, and, further, in light of my conclusion that the appellant has established its defence of contextual truth in relation to imputation 11. Accordingly the respondent is only entitled to damages for imputations 7- 10. 276 In approaching the task of reassessing damages, I am mindful of the fact that while the primary judge awarded the respondent aggravated damages in respect of the programme, he also took the adverse trial findings into account in mitigation of the damages for imputations 11 and 12, particularly the latter (see [348]). For the reasons earlier expressed, in my view addition of the Steele-Smith adverse findings to the equation does not alter the picture, particularly having regard to the apparently greater insight the primary judge was able to form about the respondent's motivation in the circumstances. 277 I am also conscious that the process of reassessment should not, if at all possible, impinge on the primary judge's award to the extent it related to imputations 7 - 10. Having regard to his Honour's reasons I would infer that he regarded the 6 imputations conveyed by the programme as on a continuum - with imputation 11 being the least serious, imputation 12 more serious than that and 7 - 10 being the most serious. I am also acutely conscious that the primary judge's award cannot be deconstructed as between imputations on a mathematical basis: Rogers v Nationwide News Pty Ltd (at [64]) per Hayne J. 278 Any revised figure must take into account the findings on aggravation the appellant did not challenge, as well as the fact the matters it established in mitigation did not run as to imputations 7 - 10. Approaching the matter on the basis that the damages cannot be arrived at through calculation, I would be of the view that the appropriate award in relation to the programme is $125,000. 279 I would reject grounds 7, 11 and 12. 280 I would allow ground 8.

Channel Seven Sydney Pty Ltd v Mahommed

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Judgment (110 paragraphs)

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Legislation Cited (4)

Cases Cited (71)

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