Her Honour stated further:
"In my opinion, the jury verdict was perverse. The imputation of dishonesty alleged was the absence of a quality which, I consider, must be taken as being an essential attribute of a teacher in the proper performance and discharge of his or her professional duties. To be said to be dishonest directly reflects on both the personal and professional character and qualities of persons in the position of the appellants. To return to the submission put by Counsel for the appellants, the imputation could admit of only one answer, namely that it was defamatory."
22 In Cinevest Limited v Yirandi Productions Limited (2001) ATR 81-610 the jury had held that there was an imputation that Cinevest, a film company, was incompetent in matters relating to its business affairs involving dealings with "investors". Spigelman CJ expressed the view that such an imputation "must" have an effect on the reputation of Cinevest in its business (see also Sarma v The Federal Capital Press of Australia Pty Limited).
23 Mr Blackburn who, together with Mr Taylor, appeared for the respondent, pointed out that the defamatory quality of an imputation may be considered in the context of the matter complained of: Greek Herald Pty Limited v Nikolopoulos. Moreover, on appeal, the question of perversity must be considered assuming the most favourable meaning of the imputation to the respondent: Cairns v John Fairfax & Sons Limited (1983) 2 NSWLR 708. He submitted that, when seen against the background of the relevant context, the imputation that the appellant "lies to its customers" was not defamatory.
24 Mr Blackburn developed his argument by first drawing attention to the fact that the jury found that the matter complained of did not give rise to any imputations against Charlwood Home Improvements. He submitted that the reason for this decision must have been that Charlwood Home Improvements was not identified in the matter complained of and, on that ground, the imputation concerning the telling of lies did not apply to it. He submitted that, adopting a like approach to the case against the appellant, the jury might have concluded that only a very limited part of the matter complained of applied to the appellant. On this basis, Mr Blackburn said the following in his written submissions:
"The notion of the appellant 'lying' to its customers arises only by implication; more particularly, by contrasting the advertising puff contained on pages 3 and 4 with the criticisms of the respondent. It was accordingly open to the jury to take the view that the 'lying' imputed to the appellant consisted in its failure to make good the advertising puff that appears on pages 3 and 4 of Exhibit A. If the jury took that view, they were entitled to take the view that it was not defamatory of a company like the appellant to say that it lied to its customers (in that sense). In the context of the matter complained of, putting upon it the construction most favourable to the respondent, it could not be said that the jury's answer was clearly, and beyond argument, perverse."
25 In his oral submissions Mr Blackburn submitted that the jury could have regarded the imputation that the appellant "lies to its customers" as meaning only "that its advertising puff does not live up to reality".
26 For the following reasons, I am not persuaded by these submissions.
27 Although imputations may be considered in the context of the matter complained of, that context is only relevant and admissible for the purposes of demonstrating the force and effect of the imputations pleaded and giving colour and explaining the significance of them: Australian Broadcasting Corporation v McBride (2001) NSWCA 322 (at para 47). The jury cannot use the context to put a meaning on the imputation different to that already found by them to exist: see Singleton v Ffrench (1986) 5 NSWLR 425 and Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 (at 505).
28 The imputation did not involve the telling of a single lie or a particular lie. Its essential thrust was that the appellant was guilty of dishonesty by telling lies to its customers. Moreover, the relevant context makes it plain that the imputation involved the appellant telling lies to its customers in the course of its business. The context does not detract from these matters, which are of compelling force.
29 Mr Blackburn did not identify precisely what statements in the matter complained of, according to him, constituted "advertising puff". He did, however, identify the portion which, he accepted, concerned the reputation of the appellant. On an examination of that portion, at least the following particular statements could be said to apply to the appellant: "we at Charlwood Industries pride ourselves in knowing that we provide a complete worry-free home improvement and building service realistically priced to suit your requirements", "since 1997 Charlwood Industries has been making homes greater places to live in", "[the appellant will] complete your project with the minimum of fuss", and "of course, all work comes fully warranted".
30 In my opinion, even if the imputation that the appellant lies to its customers rested solely on an assumption that one or more of the particular statements quoted above was a lie, the imputation would inevitably be defamatory. Such an imputation would reflect, seriously, on the business ethics and morality of the appellant. This conclusion cannot be avoided by describing the material as "advertising puff".
31 In any event, underlying the submission that the lies told by the appellant involved "advertising puff" is the proposition that the lies involved statements that were devoid of meaning and without content. The problem with this submission, however, is that it cannot stand against the imputation found, namely, that the appellant told lies. The making of meaningless statements could not constitute lies told to the appellant's customers, yet the jury found that the matter complained of conveyed the imputation that the appellant told such lies.
32 In my opinion, the finding of the imputation that the appellant lies to its customers should have led inevitably to a finding that the imputation was defamatory. I conclude that the jury's finding to the contrary was perverse.
33 The next question is: what orders should in consequence be made?
34 It was submitted on the respondent's behalf that should the appeal be allowed the Court should remit to the jury not only the question whether the imputation is defamatory but, in addition, the question whether the imputation arises from the matter complained of.
35 During the course of argument it was pointed out to the respondent that - the jury having found that the imputation in question was conveyed - it would be appropriate for the respondent to file a cross-appeal against this finding, conditional upon the appellant establishing that the jury's finding was perverse. The respondent has now filed a draft notice of cross-appeal and has made written submissions in support of it. The appellant in turn has made written submissions in reply. On reflection I think it unnecessary that a notice of cross-appeal be filed. This is not a procedure that, in the past, has been required. If, however, in jury trials where more than one verdict has been brought down, a respondent wishes to contend that, in the event of one verdict being overturned, others should also be set aside, the respondent's written submissions should make this very clear and, if possible, the appellant should, in turn, file written submissions in reply.
36 In dealing with the relief that should be granted, it is first necessary to examine those cases involving s 7A of the Defamation Act where orders of the kind now sought by the respondent have been made.
37 In Cinevest Limited v Yirandi Productions Limited the jury found that two imputations were conveyed. These were described as "imputations (c) and (d)", each of which being in terms that Cinevest was "incompetent". The jury held that only imputation (c) was defamatory. This Court held that the jury's answer that imputation (d) was not defamatory was perverse. The question arose whether the Court should remit both questions with respect to imputation (c) and both questions with respect to imputation (d). Spigelman CJ said in this regard:
"The Court is not in a position to determine precisely what mental process the jury went through in order to answer the two questions with respect to imputation (d) in the way it did. Nevertheless, the two answers about imputation (c) are perfectly logical and supportable. I do not see any reason why the error with respect to (d) should cast doubt on the answers with respect to (c).
The position is otherwise with respect to the first question relating to imputation (d), namely whether that imputation was conveyed. It may very well be that the jury's thought processes hinged on whether or not the particular behaviour said to be incompetent was in truth a matter of competence in a film maker. The two questions are inextricably intertwined. More careful deliberation may well lead to a different answer with respect to whether or not the behaviour of failing to return money to investors constituted incompetence in the natural and ordinary meaning of that word.
Accordingly, in my opinion, …. the order should be that the matter be remitted for a new trial on imputation (d)."
38 In Mularczyk v John Fairfax Publications Pty Limited this Court, having held that the jury had been perverse in finding that the imputation involving dishonesty was not defamatory, ordered that the questions whether the imputation arose and, if so, whether it was defamatory, be remitted to the jury. That is to say, the Court ordered that both should be the subject of a new trial. The Court did not say why it came to this decision.
39 In Pavy v John Fairfax Publications Proprietary Limited (2002) NSWCA 46 the jury found that an imputation existed to the effect that a father had acted violently towards his infant son but held that that imputation was not defamatory of him. The Court held that the latter finding was perverse and ordered that there be a new trial of both the issue whether the material conveyed the imputation and the issue whether that imputation was defamatory. Again, there was no discussion of the considerations that influenced the Court in making the order.
40 In Rivkin v John Fairfax Publications Pty Limited [2002] NSWCA 87 the appellant appealed against the jury's findings that none of several imputations sued upon by him were conveyed. The appellant argued that, considered individually, each of the negative answers given by the jury was perverse and, submitted, further, that, considered in the aggregate, the negative answers given by the jury demonstrated that the jury acted perversely. Grove J (with whom Meagher JA and Foster AJA agreed) held that the jury's findings were perverse in regard to some of the imputations but not others. His Honour formed the view that the negative answers to every question indicated that the jury had misapplied themselves to their task. The Court therefore took the view that there should be a new trial as to all the imputations before the jury, not just as to those imputations in respect of which the jury's findings were held to be perverse.
41 We were not referred to, and I have not been able to find, any other decision of this Court where appeals from decisions made under s 7A have been successful on the ground that the jury perversely held an imputation not to be defamatory. In the cases I have mentioned, the Court ordered a new trial on both questions, namely, whether the imputation arose and, if so, whether it was defamatory. We were not referred to, and I have not been able to find, any case where the Court ordered a new trial only on the question whether an imputation as found was defamatory.