Community Radio Federation Ltd v Goja [1999] VSCA 72

5. The respondents, husband and wife, also of Croatian origin, and the three individual defendants were at relevant times all members of the Croatian Catholic Parish and Community of the Church of the Holy Spirit at Springvale. This appellation is, it seems, not invariably used and, for convenience, I shall usually refer to the organization simply as the Springvale Parish or the Parish. The chaplain to the Springvale Parish at relevant times was Father Ivo Zlatunic. The individual defendants were, among others, trustees under a deed of trust dated 30 May 1980 pursuant to which some at least of the property of the Springvale Parish was beneficially held and at least nominally managed. The legal title to the Parish's property is or was, it seems, vested in the Roman Catholic Trusts Corporation for the Diocese of Melbourne.

8. The Springvale Parish hall was for some years before 1994 used for Croatian social and cultural functions and a liquor licence used to be obtained for each function as necessary. In 1994 or thereabouts, steps were taken by or on behalf of the Parish, probably (as I would gather it) mostly motivated by Father Zlatunic, with a view to obtaining what I shall call a permanent liquor licence. To that end legal advice was obtained and a public company limited by guarantee was incorporated on 7 July 1994 called Australian Croatian Catholic Community Springvale. The respondents were subscribers to the memorandum of association of the company and were later appointed as two of eight directors. The Roman Catholic Archdiocese of Melbourne was supportive of the incorporation of the company and of the application for a permanent liquor licence, even though the objects of the company might be thought to have subsumed or overtaken some or all of the objects or purposes of the trust. The company's objects as expressed in its memorandum are these:

1. To provide a place wherein persons of the Roman Catholic religion and of Croatian origin and any other persons invited to the community centre may engage in religious social cultural and educational activities and pursuits.

2. To take over the funds and other assets and liabilities of the unincorporated Association known as "the Australian Croatian Catholic Community Springvale".

13. The individual defendants were evidently opposed to the Parish's making application for a permanent liquor licence and, unlike the respondents, were not invited by Father Zlatunic to be members of a committee of parishioners that had been formed to progress the application. The individual defendants, it seems, took the view that Father Zlatunic was not giving due recognition or respect to the trustees and they engaged solicitors to approach the Archdiocese about it. During the last quarter of 1994 Mr Juric also personally wrote a letter which received a reply from the Archbishop at the time, Sir Frank Little, who said:

"Obviously some clarification as regards responsibilities needs to be made urgently. You will be hearing in the near future from the business manager of the Archdiocese of Melbourne, Mr E. Excell. Please know that he has my full support in seeking to clarify and pacify the situation."

At least one meeting was had between the trustees, or some of them, and their solicitors and the diocesan authorities at which a modus vivendi was discussed but no finality was reached.

18. Six of the trustees, including the three individual defendants, wrote again directly to the Archbishop on 12 April 1995 complaining of Father Zlatunic's attitude. The Vicar-General of the Diocese, Monsignor Cudmore, replied to the effect that Father Zlatunic had the full support of the Archbishop. A stalemate developed and after further correspondence the Vicar-General, on behalf of the Archbishop, wrote to each of the trustees by letter dated 9 June 1995 formally requesting them to resign and asserting that, if any trustee should fail to resign within 14 days of the request, his tenure as trustee would automatically come to an end pursuant to the terms of the trust deed. The attitude of the diocese therefore apparently was that the individual defendants should cease to be trustees by, at latest, 24 June 1995 or thereabouts. It is against that background that the relevant broadcast from station 3CR on 24 June fell to be understood.

21. The individual defendants went to see Mr Lasic a few days before the broadcast, in order apparently to arrange for it, and they spent about an hour with him. They took along a company extract deriving from the Australian Securities Commission relating to the then recently-incorporated company and a copy of its memorandum and articles of association and copies of some documents referable to its application for a liquor licence, which I think at that stage had not been granted. According to Juric's evidence, Lasic read these documents that were provided to him. Juric also swore in cross-examination that nothing was said to Lasic about the discussions with the diocesan authorities with a view to satisfying their concerns and, further, that nothing was said about advice having been obtained by the trustees from the solicitor about the effect of the memorandum of articles.

24. In the broadcast Lasic invited the individual defendants each to give an account of the circumstances of the formation of the company and its effect on the Parish community. I need not attempt to summarize all that they said. The gist was to contend that Parish property formerly held on trust for the benefit of all members of the Parish was to be, or had become, privately owned by the directors of the company, who themselves owned the company. Mr Stimac said, in effect, that the priest, Father Zlatunic, would not talk to the trustees about the perceived problem and that what had been done by way of incorporation of the company had been done without consultation with the Parish. Lasic, the presenter, permitted himself to intersperse statements by the individual defendants with questions and comments that were evidently designed to provide some kind of investigative focus to the broadcast. I can shortly indicate the flavour that he brought to the thing by a few extracts from the English translation of the transcript of the broadcast. When Zgela referred to "the liquor licence programme", Lasic asked: "What liquor licence?" to which

Zgela replied: "Full liquor licence, that is, which would exist in our Centre."

Lasic: "What do you mean, liquor licence? How ... would that be sold at the altar?"

Lasic: "Is that for the time during the Mass or before or after the Mass?"

Zgela: "Well now, ... here it says from 7.00 a.m. till 11.00 p.m., then an extension of hours was requested and granted by Frankston Police until 12.00 p.m., maybe even longer was the answer from the Police."

Lasic: "Well, that means during the Service too. So when would people pray to God?"

Zgela: "Well, this would mean it would be open only from 7.00 or maybe 9.00 so when parishioners come to the Centre; they could drop in and have a glass of warm Brandy."

"Are you trying to say now that the Croatian Catholic Centre is losing that hall and that it is becoming privately owned?" Zgela: "That is what is written in this documentation."

"We have got eight directors here, Reverend Ivo Zlatunic..." Lasic: "What are you talking about? Since when do priests sell liquor and become directors of companies? Well, what does that mean? Is the Reverend going to sell liquor or is he a director of this company or what?"

Zgela then stated the names and, in some cases, the dates and places of birth of the directors of the company, including the respondents. Later on Stimac said:

"According to these papers that I have got here four families who have signed in these documents are the owners of it as a private company. I can't interpret it otherwise."

Lasic said: "So the private company does not have to report the profit money they make to the committee. So the profit would go into private hands, not the Parish?" to which Stimac replied: "To be honest I don't know what to say to that. ..."

"Well, I must say that I am quite shocked at the news that you have brought forward. Our Croatian committee vowed a long time ago that no one was going to cheat or lie to the Croatian community and if the Croatian Radio Vukovar helps the truth to come out then we are happy we are able to do that. I think we are just doing our job. You who have brought the documents and this is what is written in these documents, clearly."

Then, towards the very end of the programme, Lasic said:

"Thank you to our guests this evening. The topic was a hot one..."

That is as much as I think I need refer to of the broadcast and its terms.

50. The statements or suggestions to the effect that the Parish property was to be placed in the private hands of the directors were without foundation. Indeed, the company's memorandum of association provided, and necessarily provided since the company was one limited by guarantee, that its income and property should be applied solely towards the promotion of the objects as set out in the memorandum and that no portion of them should be paid or transferred directly or indirectly by way of dividend bonus or otherwise to the members of the company. The evidence before the judge was that the respondents were of good fame and character and were favourably regarded in the Croatian community and the Parish. The effect of the broadcast on them and their reputations was sworn to be seriously damaging.

53. The learned County Court judge in a passage of his reasons, most of which was many times referred to in argument here, said this:

"... it seems clear, in my view, that remarks were made in the course of this interview which bore the unmistakable meaning that the company had been formed for the purpose of and with the effect of draining money from parishioners' pockets, and that money was to fill the pockets of the private persons in what was called the private company, rather than being used for the benefit of the community. That their complaints on this issue having been made were wiped off, they had received no satisfactory explanation. What was being done was being done by stealth, and that they were there to expose the activities which had been going on and thus far concealed from the knowledge of the people in the parish concerned, but also to all believers."

The learned judge went on to mention some references in the interview to communities beyond the Springvale community and I need not read that. A little later, however, his Honour did say this, and I shall read it:

"I am prepared to find that such remarks were defamatory. I am further prepared to find that they did injure the reputation and - good reputation and character of the plaintiffs. That at the time these remarks were made on the radio they were made by people who knew they weren't true, and they were made to a person who was conducting a radio programme who saw it as his function to provide his listeners with what he referred to in his peroration as being a hot topic."

60. The appellant, after obtaining leave at the outset of the hearing of this appeal to amend its notice of appeal, challenged the judgment below on a number of grounds, contending that the judgment should be set aside and judgment entered against the respondents in its favour. I think I need not refer to all of the grounds, much less read them out, for there were in substance but three topics to which the grounds were in various ways directed. The first was in support of a contention that the judge was wrong to have failed to uphold the defence of qualified privilege. The second was that the judge was wrong to have concluded that the broadcast contained defamatory material that referred to the respondents. The third point concerned the nature and measure of the damages that were awarded.

63. As regards the defence of qualified privilege, it was contended by the appellant that the judge's reasons do not make clear the basis on which he rejected the defence. The appellant's preferred submission as I - not without some difficulty - understood it, was that his Honour had concluded that the broadcast did occur on an occasion of qualified privilege but that the appellant should not have the benefit of privilege because the broadcast was actuated by malice on the part of the appellant. It was submitted alternatively that, if the judge did not conclude that the broadcast took place on an occasion of qualified privilege, he should have done so, and that no malice was proved, and that in finding malice to the extent that he did, the judge had wrongly cast an onus on the appellant to disprove it. I acknowledge, with respect, that the learned judge's reasons are not perspicuously clear in demonstrating the basis on which he rejected the defence of qualified privilege; but reject it he undoubtedly did. There was much debate upon the appeal which amounted to an attempt on either side to interpret what his Honour said, or intended to convey, in his remarks on the subject. I do not find it necessary to make a choice between the various suggested nuances which the judge's remarks might be capable of bearing. I have no doubt at all that the defence of qualified privilege should have failed. If the appellant could show that it had a duty in the relevant sense to bring to the attention of sections of the public information of a certain kind, it could not show that there was a duty to convey information of a kind that was conveyed in this case. The relevant information was palpably false. It was, as it happens, admitted by both Zgela and Stimac in cross-examination that they did not believe that the Parish's property was to get into private hands. That evidence, in the case of Stimac, may be unfavourably contrasted with some of the remarks made by him in the course of the broadcast to which I have referred. It may be that Lasic was misled to some extent by the individual defendants but, remarkably, he was not called on behalf of the appellant to give evidence to say so, or give evidence on any other topic. He was not called at all. Neither he nor anyone else on behalf of the appellant gave any reason or justification of any kind for the making of the broadcast or its nature or its tone. There was, it is true, one witness called for the appellant, Miss Macarthur, who was the station manager. Her evidence, however, was of a general kind and said virtually nothing about the broadcast in question save that it took place at a certain time and that Lasic was the compere or presenter of the programme. A reading of the few pages of which the company's memorandum of association consisted, and with which Lasic was provided before the broadcast, would have revealed without any possible doubt that the purported complaints made by the individual defendants in the course of the broadcast about private ownership of Parish property were complete nonsense. Moreover, the provocative questions and references by Lasic to the use that might be made of the proposed liquor licence were, in my opinion, fatuous in the extreme. They show the broadcast, and its nature and intent, in a very poor light - a grubby piece of journalism designed to promote what Lasic himself described as a "hot topic". It does not seem to me to matter whether one refers to the nature and tone of the broadcast as demonstrating that it should be deprived of the protection of what might be an occasion of qualified privilege or an occasion that was not capable of being one of qualified privilege at all. We were referred to various authorities upon the nature of the defence of qualified privilege, but I content myself with what I have said to indicate that the defence rightly failed.

66. The second broad question that was debated before us was whether the judge erred in concluding, as he did, that the broadcast contained material concerning the respondents which was defamatory of them. The argument was, in essence, that the broadcast made no unfavourable imputation on the character or actions of the respondents or either of them. It was submitted that the judge failed to address what was a critical question, namely whether the naming of the directors in the broadcast, and in particular the respondents, indicated that the respondents did all that was pleaded by way of imputations against their character. We were referred to the early decision of the High Court in The Hall Gibbs Mercantile Agency Limited v. Dun [1910] HCA 66; (1910) 12 C.L.R. 84, especially at 91-92 in the judgment of Sir Samuel Griffith and at 102 in the judgment of Mr Justice O'Connor; and, amongst other authorities, to the decision of Mr Justice Begg in the Supreme Court of New South Wales in Dawson Bloodstock Agency Pty Ltd v. Mirror Newspapers Limited [1979] 1 N.S.W.L.R. 16 at 18. The principle exemplified in those decisions is clear enough. The appellant sought to apply it here by attempting again a painstakingly refined interpretation of the passage of the judge's reasons that I have already set out. Thus, an attempt was made to show by reference to the four meanings which the judge thought it clear that the remarks in the broadcast bore could not justify imputations of a kind pleaded by the respondents. It was submitted that in no case could the meanings affect the respondents by indicating that they did, or that they were affected in their character, by any of the things referred to. Thus, the submission was that it was not shown that the company had been formed (to use the judge's statement in the passive voice) by the respondents or either of them, nor was it shown that money was to fill the pockets (to use the judge's expression again) of the respondents or either of them, nor was it shown that complaints by the individual defendants were (again to use the judge's expression) "wiped off" by the respondents, nor could it be shown that what was being done to the extent that it was being done by "stealth" (to use again the judge's word) was the stealth of the respondents. I must say that I consider the attempt to construe the judge's four findings in that way rather misses the point: it overlooks the wood in favour of the trees. The County Court judge's reasons are to be treated as no more than that, reasons of a County Court judge given at the end of a trial and reserved only, I think, overnight. It is quite unproductive to seek to construe reasons of that kind as one would construe a will, a statute or, if I may respectfully say so, as one is sometimes asked to do in construing reasons of a superior court of authority. The judge was not purporting to express, as I understand him, giving what I consider a fair reading to his reasons, any point of principle. He was expressing findings of fact having heard the evidence. It seems to me that the burden of what his Honour was saying was that he was satisfied that the appellant had alleged against the respondents that they stood to receive the benefit of, or that they were party to, or that they caused the setting up of the company, in a concealed way to benefit themselves, among other directors. Looked at in that way, I am quite satisfied that the judge's remarks justified his finding that the comments in the broadcast were defamatory, and defamatory of the respondents as pleaded. I think the second point argued, as I have dealt with it, must fail.

69. The third heading of argument dealt with damages. The damages awarded by the judge were under two headings. As compensatory damages, the award was $35,000 against all four defendants. The judge also awarded individually against each of the defendants exemplary damages. In the case of the appellant, that was $5,000 and in the case of each of the other defendants it was $1,000. Dealing with the sum of compensatory damages awarded against all defendants jointly and severally, it was urged for the appellant simply that the sum of $35,000 was excessive. There was not a great deal said in support of the submission except that it was, as I followed it, really manifestly excessive. But it was again submitted that it was not possible to see in respect of what it was that the sum of $35,000 was awarded by way of compensation. Again, an attempt was made to dissect and to treat individually the four meanings attributed by the judge to what had been said in the broadcast. Again, I think that is an unproductive exercise. It was said that nothing could have been awarded by way of the "wiping off", as his Honour put it, because the plaintiffs were not responsible for that and, in any event, it was something in respect of which they did not complain in their pleading. To the extent that the judge awarded compensatory damages for that, it was submitted that the amount was self-evidently excessive. I shall not burden these already lengthy reasons by referring to the matters which the judge mentioned as deserving of the award of compensatory damages which he made. I content myself simply to say that in my opinion the amount of $35,000 was well within the available range.

72. Then under a number of grounds it was contended that exemplary damages should not have been awarded against the appellant. I agree that they should not. This was not, I think, a case in which the appellant company was deserving of what was in effect a stern statement of disapprobation by the court deserving of a punishment by way of an award of exemplary damages. My impression, on readingthe constituent documents of the appellant, is that it is largely a voluntary association of people who set out to perform a community service. They have not a large capital. The exercise is no doubt an expensive one. The supervision of the various presenters perhaps cannot be easily effected. Had Mr Lasic been sued, it might be an altogether different question whether the kind of conduct in which he engaged should be met by an award of exemplary damages. In the case of the company, however, notwithstanding that it is technically vicariously responsible for Mr Lasic's conduct, it seems to me that the circumstances were such that it ought not to be visited with punishment of this kind. I would therefore allow the appeal for the purpose only of varying the judgment below to the extent that an award of exemplary damages was made.

87. Gentlemen, it remains to decide what the order of the court should be. Are there any submissions about the formal order?

93. I think what we will do, gentlemen, is to leave it to counsel to formulate by agreement an appropriate form of judgment of this court, indicating that we are disposed to allow the appellant some costs benefit, so we shall order that the costs of the respondents be paid by the appellant as to 80 per cent. So the appeal will be allowed in part for the purpose of varying the judgment below and the variations I have indicated can be set out and providing for costs in the manner I have indicated. So if you could agree upon an order and let my Associate have a draft minute and we will make it, unless there is any reason not to.