Cush v Dillon and Boland v Dillon

COUNSEL: T Alexis SC and P Sibtain (Plaintiffs) M Lynch (Defendant)

SOLICITORS: Cole & Butler (Plaintiffs) Banki Haddock Fiora (Defendant)

Mr Leslie Boland and Ms Amanda Cush are plaintiffs in separate actions in which they have each sued Ms Meryl Dillon. Their actions were brought pursuant to the Defamation Act 1974 ("the Act"). The two cases have been heard together.

Under the above Act the litigation has occurred in a two stage process. First is what is commonly known as a Section 7A Hearing which took place before a Judge and Jury in November 2007. Following the success, from the plaintiff's point of view, of that hearing the matters moved on to the hearing before me. My task has been to consider the defences raised by Mrs Dillon and, if appropriate, to assess the damages payable to each plaintiff.

The Section 7A Hearing considered two statements alleged to have been made by the defendant. The jury was only satisfied that one of the statements had been made. In respect of that statement the jury found that the statement had been published to at least one person and that certain imputations flowed from the statement. As between the plaintiffs these imputations were substantially the same but, of course, varied with the particular circumstance of each plaintiff. I have annexed to this judgment a copy of the transcript relating to the alleged statements, the Jury's findings, and the imputations which were established.

It is common ground that the statement in respect of which damages are claimed was made to one person only. It is equally clear that the subject of this statement had been published by and to other persons. The plaintiffs in this case face the difficult task of identifying the damages flowing from the publication sued upon against the background of the publication of the subject matter outside of this one instance. In addition, the person to whom the sued upon publication was made, a Mr James Croft, did not, other than to the plaintiffs, repeat the publication.

The plaintiffs, in addition to their claim for general damages, have sought aggravated damages. I was at pains to enquire of senior counsel for the plaintiffs whether this was a separate head of damage or whether damages should be larger because of various aggravating factors. I was told the latter was the case (T332.37) and I was given a list of 6 matters said to justify increased damages.

Mrs Dillon has countered with three defences. These are:- (a) Qualified privilege at common law. (b) Qualified privilege pursuant to Section 22 of the Act. (c) The circumstances of the publication were such that the plaintiffs were not likely to suffer harm. This defence is derived from Section 13.

The publication by the defendant to Mr Croft was of the following words: "It is common knowledge among people in the CMA that Les and Amanda are having an affair". This statement was made on 8 April 2005 in a café in Moree. This western town (in New South Wales terms) lies in the geographical centre forming the background to the events which led to this litigation.

It is common ground in this litigation that Mr Boland and Ms Cush did not have an affair. It is also common ground that Mrs Dillon did not believe they were having an affair when she made her statement to Mr Croft. I think it appropriate to now set out, in summary form, the background of each of the litigants.

This plaintiff left school in 1961 and immediately purchased a farming property. From then, until now, he has remained primarily a farmer gradually expanding his farming enterprise with the purchase of various properties in the general Moree area. Significantly for this case, in about 1996, he purchased a property called 'Tiela' from the defendant's husband. The purchase was made against a background of a bank requiring Mr Dillon to sell the property. As will be seen below, there is a suggestion that this sale, and its circumstances, are the source of, and perhaps illustrate, deep and dark feelings allegedly held by the defendant for Mr Boland.

On 8 April 1967 Mr Boland was married to Robyn. I do not know her maiden name. This union produced at least one child, now Mrs Kerri Phillips. Mrs Boland died in October 2006. She had some 18 years previously fallen prey to an hereditary condition affecting her nervous system. The condition is called dysthropia myotonica. It is a progressive disease which, through the ongoing death of nerve endings, renders inoperative the sufferer's muscles. As time passed and the disease progressed, Mrs Boland became more and more unwell. In turn she required greater care to the stage where she became wheelchair bound and in need of 24 hour care. She also required, from time to time, but more often as the disease impacted, medical attention. For this purpose, in 2000, Mr Boland and his wife moved to Moree and he became her primary carer. The picture painted of him, by Mrs Phillips, was of a devoted husband and family man.

As Mr Boland's farming success grew he obviously became more well known in the community and volunteered for, or was invited to sit on, various boards and committees. Notably, for present purposes, in about August 2004 he was appointed to the Border Rivers Gwydir Catchment Management Authority (the "CMA"). Also on this committee were Mr James Croft, the Chairman, Mr Mal Peters, Dr Bob Crouch, Mr Barry Johnston, Ms Michelle Ward and the defendant Mrs Dillon. Mr Boland's brief on the Board was clearly to represent the farming community and to this end he no doubt argued his position fairly and passionately. I will return to Mrs Dillon's background below but for present purposes note that her stance on a number of matters had perhaps a more environmental element than that favoured by the farming community and this led both on the CMA Board and in other forums where Mr Boland and Mrs Dillon had sat, to a frequent clash of positions.

Despite evidence that was led to establish a contrary position, for example from Mrs Cross, I do not think there was any personal animosity displayed by Mrs Dillon against Mr Boland (or even Ms Cush) in any Board meeting but rather that she pursued her views with the same passion as Mr Boland advanced his.

Ms Cush is now 39 years of age. She grew up in the Inverell District which has been inhabited by her family for a number of generations. Members of her extended family have been and are involved in local agriculture and, like the other main parties to this litigation, her family is apparently well known and established in the area. Ms Cush initially pursued a career in information technology which took her both interstate and to the United States of America. While abroad her father passed away and she came to own the ancestral property in Inverell. As a result of this, and her general desire to leave the corporate environment that she was in, she returned to Australia and began work in a government organisation.

In 2004 Ms Cush applied for the position of General Manager with the CMA and met Mrs Dillon as part of the interview panel for this position. Ms Cush was successful in her application and commenced her employment as General Manager of the CMA soon afterward. Ms Cush gave evidence of dismissive, disdainful and inappropriate behaviour on the part of Mrs Dillon during the interview. She also said that in the course of her employment she, in essence, found Mrs Dillon to be cold and unfriendly. Mrs Dillon denied the alleged behaviour in the interview. I find it hard to accept Ms Cush on this point, especially having regard to the fact that Mrs Dillon supported the employment of Ms Cush. This is not to say that I found Ms Cush to not be telling the truth but perhaps to be reflecting the animosity that clearly now exists between the two women so that events and impressions in the past have perhaps assumed a more significant role than should be attributed to them. I also find that although Mrs Dillon was by no means friendly towards Ms Cush her interaction with her during her tenure as a General Manager was at least cordial and certainly professional.

Mrs Dillon has an impressive record of community involvement both at a very local level and more statewide as reflected in her endeavours to achieve election to the NSW Parliament. Her list of community work is extensive and continues to this day. I do not think I need set out all of her activities but I note the evidence given by her and recorded in the transcript. In relation to the CMA she was appointed as a Board member in early May 2004 and continued in that capacity until November 2005.

Mrs Dillon, and her husband, live on a small holding on the outskirts of Moree. Her income is derived from investment properties owned by herself and her husband. Some of her time is spent in managing these investments.

A number of matters were suggested through Mr Boland as giving rise to a history of animosity, in particular on Mrs Dillon's part between her and Mr Boland stemming, if only chronologically, from Mr Boland's purchase of 'Tiela'. Mrs Dillon generally gave her evidence in an unemotional manner but in relation to this issue she clearly displayed a good deal of feeling. In my view, and in particular having regard to her evidence at page 274 of the transcript, I find there is no substance whatsoever in the suggestion that Mrs Dillon resented the purchase by Mr Boland of the property. Firstly the property was owned by her husband, secondly Mr Boland paid the price asked without any attempt to bargain, thirdly the purchase relieved financial stress that her husband was under and fourthly it relieved Mrs Dillon of strenuous amounts of travel to and from work. Again, I do not think Mr Boland was dishonest in his assessment of the feelings Mrs Dillon held for him but rather, as with Ms Cush, I suspect these proceedings have somewhat coloured his recollection of their relationship. I also have no doubt, however, that Mrs Dillon's pursuit of her agendas at various committee and board meetings followed a hard, but not unprofessional course, which lacked a friendly association with those who held opposite views to her.

Mrs Dillon herself said that relations between her and Mr Boland had not been cordial and I think this description generally sums up the relationship between the plaintiffs and defendant, although I do not think the absence of cordiality was a reflection of animosity.

Before moving on to the events that gave rise to this litigation I think I should say a few words about my assessment of the credit of the litigants. In relation to most of the evidence there was little dispute as to the occurrence of events. The largest issue which required a credit finding related to a conversation between Mrs Dillon and a Mr Hart which occurred at the end of March 2005. I will return specifically to the conversation below. Suffice to say here that although I do not accept entirely Mrs Dillon's version of the conversation I do not base that non-acceptance on any lack of honesty on her part. I, in fact, felt that all of the parties were doing their best to give their evidence honestly, but in particular with the plaintiffs I feel that the immense emotional upset that has accompanied the complained of events may have, to some extent, influenced their perceptions, in particular, as I have said above, concerning Mrs Dillon's attitude towards them in the years and months leading up to the subject events.

The CMA had offices in both Inverell and Moree. The latter seems to have been an outpost for the former with perhaps about five members of staff occupying it out of a total of about 40 persons employed by the CMA. The five included Ms Cross, Ms Chittenden, Mr Pitman, Mr O'Brien and Mr Mills.

In January 2005 a "forum" was held at the Twin Towns Services Club Resort at Tweed Heads in which Ms Cush and some of the Board members, as well as, perhaps, some staff members, were engaged in business and recreational activities as part of a 'get away'. Apparently Mr Boland had a unit on the Gold Coast and a suggestion seems to have developed that the forum was taking place at Tweed Heads to facilitate his capacity to attend. Together with this perception there also arose a perception of a familiarity between the two plaintiffs. It is difficult to be certain but the forum, or at least its planning, seems to have been the genesis for the rumours that began to spread of an unseemly relationship between the Board member, Mr Boland, and the General Manager, Ms Cush. It seems that holding a forum at a location outside of an organisation's jurisdiction is an unusual event in bodies such as the CMA.

Mr Pitman said he first heard the rumour in the tearoom at the Moree Office in December 2004. He was then in the company of Mr O'Brien, Mr Mills and Mrs Cross. Mr Pitman identified the basis of the rumour as being the forthcoming Tweed Heads meeting. The rumour therefore clearly started before the meeting occurred presumably because persons interpreted the reason for the meeting to be held in Tweed Heads was Mr Boland's unit on the Gold Coast.

Mr Pitman also said that following the "retreat" the rumour "probably got stronger because the perception was that there was a relative closeness between Les and Amanda" (T283.13). He identified observations such as Ms Cush touching Mr Boland on the shoulder. Recalling that it was common ground that there was no improper relationship between the plaintiffs one can only conclude that whatever apparent signs of affection occurred between them were the subject of misinterpretation.

Following the discussion in the tearoom in December 2004 Mr Pitman said he heard the rumour repeated on several occasions. It was a common subject of discussion in the tearoom. Before commencing work with the CMA Mr Pitman had been employed in the Department of Land and Water Conservation where his Regional Director had been Mr Randall Hart. Mr Pitman said that in late January or early February of 2005 Mr Hart telephoned him. In the course of their discussion the rumour was spoken about. Mr Pitman said he confirmed the existence of the rumour but did not know if there was anything to substantiate it. The significance of this discussion is that Mr Hart was, firstly, certainly aware of the rumour after speaking to Mr Pitman and secondly, appears to have had other sources for the rumour besides Mr Pitman.

Mr Pitman said that around February 2005 he had told Mrs Dillon of the rumour. This had occurred in Moree. Mr Pitman said that at that time he had no opinion one way or the other on the truth of the rumour and when pressed on this in relation to the conversation with Mrs Dillon said "it was the fact that there was a rumour was what I was talking about and its effect on the CMA" (T285.15).

Mr Pitman also gave evidence that toward the end of February 2005 he received a telephone call from a Ms Wendy Bate who, in apparently very plain terms, and in the course of an investigation she was conducting, asked him about the alleged relationship. Ms Bate was conducting an investigation on behalf Mr Hart.

According to Mrs Dillon she first heard the rumour in late 2004 or early 2005. She said she had been approached by three staff members: Mr O'Brien, Mr Mills and Mr Pitman. They did not speak to her at the same time but, I gathered, over a relatively short period of time. Mr Pitman seems to have been the first person to pass on the rumour to her. According to Mrs Dillon: "He said that he was concerned that Mr Boland had been involved in the Grievance Committee because he believed that there was an affair occurring between the parties" (T170.45).

When Mrs Dillon spoke to Mr O'Brien she said that he also introduced the matter in the context of concerns about the CMA. In relation to Mr Mills he introduced the subject in this way: "I have a matter of grievance in relation to the General Manager". His concern was that Mr Boland was on the Grievance Committee and so he did not feel that his complaint about the General Manager had been dealt with impartially.

In late March 2005 Mrs Dillon had a conversation with Mr Hart. He had telephoned her. She said the conversation began in this way:- "Q. What did he say and what did you say, to the best of your recollection? A. He commenced the conversation by saying, "Hello, Meryl. How are you? This is Randall Hart here. I'm ringing you because I have some serious matters relating to the CMA that I need to discuss." He said, "I'm ringing you because you're the only one I can rely on to give a straight answer." He said, "I have been talking to some people - more senior people in the department in Sydney and the union." He said that he was raising the matters with me because they involved some of the ex-Department of Infrastructure, Planning and Natural Resource staff members and that some of his staff - also some of his staff in Tamworth, I think. He said, "Do you have any recollections of the trip to Tweed Heads?" He asked me if - no, he actually stated that there had been some irregularities in the vouchers for that trip, presented by Amanda Cush. He asked me if I was aware of how Ms Cush travelled to Tweed Heads." (T173.20) 30. Mrs Dillon then detailed various other matters raised by Mr Hart culminating in the following evidence:- "Q. Was there any discussion about a relationship? A. Yes, there was. He said that the reason that he was asking many of these questions he said that there are questions being asked about the relationship between the board and the general manager and the general manager and a particular board member." (T175.16) 31. Mrs Dillon said she knew the parties involved in Mr Hart's "question" because of her conversations with Messrs Pitman, O'Brien and Mills and also because of a conversation she had had with Ms Chittenden during a road trip. On this occasion Ms Chittenden "with a cheeky grin on her face" had said that "Amanda really likes Les".

32. Towards the end of her conversation with Mr Hart he said that a report would need to be made to ICAC. From this comment she gathered that the conversation which had begun on a confidential basis would lose that status in the light of an investigation.

33. Returning briefly to Ms Chittenden, the evidence of Ms Cush included this:- "Q. Just so we're clear: what did you say to Michelle so we understand what the rumour was you were referring to? A. I said, "Have you heard anything about Les and I having an affair?" and she responded and she said, "Yes, Meryl told me." (T109.39)
34. The significance of this version is that, compared to Mrs Dillon's evidence, the information came from Mrs Dillon rather than Ms Chittenden. Although Ms Chittenden was not called to give evidence the defendant did tender a statement by her which included the following:- "During general conversation Meryl Dillon stated that she thought Les Boland (Board member) and Amanda Cush (General Manager) could be having an affair" (Exhibit 9). Although this Exhibit was tendered apparently to establish an item of chronology the defendant I think must bear its contents which contradict her evidence. It probably doesn't matter much whether Ms Chittenden or Mrs Dillon suggested the presence of an affair because the rumour seems to have been widespread by then anyway, but to the extent that it is important I accept Ms Cush's version as corroborated in Exhibit 9.

35. Following the conversation with Mr Hart, according to Mrs Dillon, she organised a meeting with Mr Croft. He was the Chairman of the Board. Mrs Dillon's evidence is that this meeting was held as a result of the discussion with Mr Hart and its contents were a product of that discussion. During this meeting, at a café in Moree on 8 April 2005, Mrs Dillon, as found by the jury, said to Mr Croft:- "It is common knowledge among people in the CMA that Les and Amanda are having an affair". I note here that the version given in the Section 7A trial by Mr Croft was slightly different in that instead of "common knowledge" he used the words "well known" but I do not think that difference is of any relevance (Ex A, T12.12). I will proceed on the basis of the jury finding.

36. Mrs Dillon says she raised the matter in essence as a result of the concerns earlier expressed by Mr Hart. In other words, she says that she saw it as part of her duty to bring the matter to the attention of the Chairman of the Board, a concern which was strengthened by the discussions she had had with the staff members, in particular because of Mr Boland's presence on the Grievance Committee. This position taken by Mrs Dillon is at the core of her claim of qualified privilege, both at common law and pursuant to Section 22. Mrs Dillon put it this way:- "Q. And when did you decide that you should speak to Mr Croft? A. I thought about it for a couple of days. I had somewhat of a dilemma and so, eventually, I decided that I should appraise Mr Croft of as much of the conversation as I felt that I could, without necessarily either having an effect on any investigation that might happen in relation to some of the matters. I decided that I should raise with him what I considered were the governance issues that related directly to the board.

Q. Why did you think it was appropriate to convey information to Mr Croft? A. I actually believed that I had a duty to convey information to Mr Croft.

Q. Why is that? A. Well, from the information that I have been given as being part of the board and my obligations as a member of the board, a director." (T177.23) 37. It is clear from the just quoted passage of evidence that Mrs Dillon alleges she conveyed the defamatory publication to Mr Croft as a result of her conversation with Mr Hart. This is probably the main point of credit in relation to Mrs Dillon. Mr Hart, although conceding the matter was discussed in his conversation with her, denied he had raised it as a matter of concern. Were the contest between the oral evidence of Mr Hart and Mrs Dillon alone I would have preferred Mrs Dillon's evidence. Mr Hart only came to consider the matter in about November 2007 and, as conceded by him, his memory of the details of the events was vague. I also thought his manner of giving evidence was somewhat casual and I noted that from time to time he laughed about matters which he presumably thought were trivial. His version does, however, have support in Exhibit H which is a confidential memorandum he sent to the Director General of the Department of Infrastructure, Planning and Natural Resources on 4 April 2005, following his conversation with Mrs Dillon. The matters of concern raised there do not include the alleged affair. This memorandum is close to being a contemporaneous note of the items raised in the conversation as matters of concern. On the basis of this document, and in particular because of its currency in time to the conversation, I am not satisfied that Mr Hart raised the affair as a matter of concern. As a result I am not satisfied that Mrs Dillon disclosed the rumour to Mr Croft as a result of her conversation with Mr Hart. That is not to say that she did not nevertheless believe it was her duty to tell Mr Croft about the rumour, simply that she did not do so as a consequence of speaking to Mr Hart. I will return to this matter when looking at the defence of qualified privilege below.

The version of the conversation Mrs Dillon says she had with Mr Croft in relation to the affair is different to that found by the jury. Mrs Dillon specifically accepted the jury's finding in her evidence before me (T181.29). I will obviously proceed on the basis of the jury's finding.

Following Mrs Dillon conveying the information to Mr Croft the events took, in my view, a somewhat unusual turn. Mr Croft simply had no response to the information that had been conveyed to him. In fact he said or did nothing about it until revealing the conversation some months later to the plaintiffs, importantly after the rumour had otherwise become known to them.

The plaintiffs seek to rely on Mr Croft's evidence given in the Section 7A hearing (Exhibit A), in particular at page 13 where he said his reaction to the information was "I was shocked". The plaintiffs suggest this is indicative of a stunned and deeply felt reaction by Mr Croft. They did not, however, call him to give evidence to this effect and he certainly did not do anything about what he had been told. The suggestion to me, although I do not reach a final conclusion on the point, is that Mr Croft simply regarded the allegation as an unsubstantiated rumour not worthy of further comment or action. This approach is supported, I think, by a Board Meeting which occurred on 15 April 2005 for the purpose of the Board affirming its support for the General Manager. Had Mr Croft, who by all accounts is a fine upstanding gentleman, felt there had been any inappropriate conduct by Ms Cush I would have expected the matter to have been raised by him before this Board Meeting.

I raised with counsel for the parties my observation that neither side had chosen to call Mr Croft to give evidence about his reaction to the information given him by Mrs Dillon on 8 April 2005. I am aware that in cases of this nature evidence is called in the establishment of damages to describe the effect on persons receiving defamatory publications of the information that has been imparted to them. Both sides submitted that it would have been for the other side to have called Mr Croft. In my view if any Jones v Dunkell inference is to be drawn it should be against the plaintiffs. I simply do not see how the statement of being "shocked" by Mr Croft can give rise to any interpretation of his reaction going beyond his initial receipt of the statement. Taken with the events at the Board Meeting shortly afterward, as I have already said, I simply cannot conclude that Mr Croft treated the information as other than an insignificant and unsubstantiated rumour.

If damages are to be awarded in these matters they will be assessed on the effects of the publication to Mr Croft on 8 April 2005. I think at this stage it is worth restating the history and currency of the rumour immediately before this date:- (a) It seems to have begun in December 2004 with discussion in the tearoom. (b) The rumour was being distributed, or at least being discussed, by Mr Pitman, Mr Mills and Mr O'Brien as well as by Mrs Cross and Ms Chittenden.

(c) It had come to the attention of Mr Hart who not only spoke of it to Mr Pitman but also said: "I have to say there were lots of people talking about that rumour, and I heard it from a number of sources" (T297.30).

(d) Mrs Cross, early in 2005, had been informed of the rumour by Ms Chittenden who attributed it to the defendant. This again corroborates Exhibit 9 (T92.19). The purpose of the above list is to demonstrate that by 8 April 2005 the rumour was, at least among the CMA community but probably beyond it, widespread. The effect of the communication to Mr Croft on 8 April 2005, which was not repeated, must be viewed against this background. As will be seen below, it is important to note that the plaintiffs became aware of the rumour before finding out about the 8 April conversation between Mr Croft and Mrs Dillon.

In August 2005 Mrs Cross spoke to Ms Cush; the latter described the conversation as follows:- "Q. Just think about the question: what did Laticia say to you? A. Laticia said to me that during her time at AgQuip the most prevalent question that she was asked by stakeholders at the event was, "So I hear Amanda and Les are having an affair", you know, "What's going on." She went on to say that she was so tired of having to address that issue that it had overwhelmed any other kind of activity at the event." (T107.17) Mrs Cross' description of this conversation was as follows:- "A. I said that there were some questions about the relationship that was going on between Les and Amanda. She was noncommittal, I suppose, in reply. I said, "From an organisation perspective", that's why I had brought it up. From an organisation perspective I said that what I was saying was that I would tell people to consider the character of the people involved and dismiss it, and try and move them into another area of interest that the CMA was working on." (T93.34) 44. Following her conversation with Mrs Cross, Ms Cush spoke to Ms Chittenden about the matter. I have already quoted above that conversation which appears at page 109.39 of the transcript.

45. Ms Cush said that no more than 10 days passed between her above conversations with Mrs Cross and Ms Chittenden. Prior to the next Board meeting at the Inverell Office Ms Cush spoke to Mr Croft. She told him what she had been told about the rumour by Mrs Cross and Ms Chittenden. Mr Croft responded: "I am aware of the rumour. She has basically told me the same thing" (T110.33).

46. Following the Board meeting Ms Cush spoke privately to Mr Boland. She said: "Les, there appears to be a rumour that is quite well established about you and I being involved in an affair" (T112.13).

47. Mr Boland put the revelation from Ms Cush in this way:- "A. We had a meeting, I think it was - I'm pretty sure it was August 2005, a board meeting. At the conclusion of the board meeting Amanda, the general manager, come to me and told me that she had been told that Meryl had been spreading rumours about her and I having an affair." (T35.2)
48. I will return to the effects on the plaintiffs of receiving the news below as well as to the communications they had with their respective families. However, continuing with the narrative so far as the CMA was concerned, a short time after Ms Cush spoke to him Mr Boland spoke to Mr Croft. He told him what Ms Cush had said and asked Mr Croft if he would accompany him (Mr Boland) while he spoke with Mrs Cross and Ms Chittenden. Early in the following week Mr Croft and Mr Boland spoke with the above two women. First of all they spoke with Ms Chittenden. Mr Boland described this meeting as follows:- "A. We went up to Michelle's office and I said to her, "I have a matter I'd like to discuss with you, I'd like to ask you." I said, "I've just been informed at the last meeting that you told Amanda or - told Amanda that she and I were supposed to be having an affair, and that Meryl had passed that information on to you." She nodded and said, "Yes, that's right." She said it was - I said, "When did that happen?" She said, "I travelled back from Inverell in the February meeting with her" - that would have been 05, I presume - "and she made that statement to me. She says, 'I just think Les and Amanda are having an affair.'" " (T37.33)
49. Following this conversation, Mr Croft and Mr Boland spoke to Mrs Cross. This conversation then went as follows:- "Q. Can you tell his Honour what was said with Latitia in Mr Croft's presence. A. I said to Latitia exactly the same thing. I said, "I've just been informed that Meryl Dillon is spreading a rumour about Amanda and I having an affair. Have you heard anything about that, as Amanda said that you passed that message on to her?"

Q. What did she say? A. She said, "I haven't heard it directly," she said, "But I've heard the rumour." She said - what were her exact words? She said, "Meryl has been up here on and off quite a bit lately," and she said that, "25% of my time is putting out fires that Meryl starts."" (T38.1) I think it important to note here that the clear inference, and one which I accept, on the just quoted conversation is that whoever else had also spoken to Mrs Cross about the rumour, it had also been conveyed to her by Mrs Dillon.

50. After speaking to the two employees, Mr Boland and Mr Croft had a conversation outside the building. According to Mr Boland, Mr Croft said to him: "Yes, she has told me the same thing, that you and Amanda are having an affair" (T38.30). This then is the first time Mr Boland is made aware of the 8 April conversation.

51. Before summarising this aspect of the evidence I should say that there was very little, if any, challenge to it on behalf of the defendant. Learned counsel for the defendant very fairly acknowledged that a rumour of the type in question would be hurtful to persons in the position of the plaintiffs.

52. Mrs Cross said that when she gave the initial news to Ms Cush she became "quite stoic and stiffer" (T94.11). She had earlier said that Ms Cush was a person who showed "a lot on her face".

53. Ms Cush gave evidence, that following her conversation with Ms Cross her reaction was as follows:- "A. I experienced several different emotions. I think it's fair to say I was shocked. I wasn't sure how to respond to Laticia. I was embarrassed in front of a subordinate colleague. I was very concerned. I was concerned about how to approach the issue because I've never had to do it before." (T109.29) As to how she felt after speaking to Ms Chittenden she said:- "A. Again, that was shock to have a subordinate member of staff tell me that a board member had directly told her of that issue - embarrassment and concern about how to deal with the issue." (T109.46)
54. As stated above, her next conversation was with Mr Croft and this passage of evidence occurred: "Q. Ms Cush, how did you react to what the chairman of the board was telling you on this occasion and how did that make you feel? A. My reaction, again, was shock and embarrassment and concern for the effect that something like this may have.

Q. Did it trouble you that the chairman of the board had said what he said to you? A. Yes, very much so.

Q. How did it trouble you? A. I felt that - I'm trying to think of the words, I'm sorry - it troubled me because I know James to be a very moral and Christian man and I thought that this was possibly the most damaging kind of thing that could be said to someone of his moral standards." (T110.42) She then went on to say that at the time she was aware Mr Boland was married. She said over the next days she felt this way:- "A. My reaction really was concern on behalf of Les' wife and family. Les has children who are my age, one of whom is a daughter and obviously growing up in a rural area like that, we have mutual acquaintances. I was very concerned that Les' wife and family would hear this rumour and be hurt by it." (T111.41) 55. Ms Cush said that when she told Mr Boland about the rumour she noticed that he was very quiet although not normally being a person of this disposition.

56. It is important to note at this stage that in August 2005 an investigation into Mrs Cush's conduct (not about the alleged affair) was ongoing and was a factor in her likely future with the CMA. In relation to her reaction to the rumour, however, she distinguished between the professional and personal allegations in this way:- "I felt that it was one thing to defend a professional allegation. It is a very different thing to deal with a very personal allegation" (T113.21).
57. She then gave this evidence:- "Q. Did you have any concerns, Ms Cush, about what people might think? A. Yes, absolutely.

Q. What were those concerns? A. I had - I was concerned that an allegation like this could not be adequately addressed or refuted and then it may cause, well, you know, members within the community to think very poorly of me." (T113.24) 58. Ms Cush then said that she had informed her mother of the allegations but she had not felt comfortable, because of the age difference, in discussing them with her cousins who lived in Moree. She went on to say that while she could respond in an appropriate forum to the professional allegations against her "and there really is no way to verify the truth or not of a personal allegation of this nature and I felt it would be impossible to recover from it".

59. As a result of the investigation mentioned above Ms Cush was dismissed from her position in September 2005. She challenged that dismissal by proceedings in the Industrial Relations Commission which resulted in the decision of the Commission which is Exhibit E. I do not think it necessary to analyse or even summarise the details of that decision. Ms Cush did not return to her employment but moved to Orange where she took up another job. Following the conversation with Mr Boland after the Board meeting in August 2005 Ms Cush said that her mental health suffered. She said that "I was concerned that people would think I only got that job (at the CMA) because of my relationship, alleged relationship, with Les." (T115.34).

60. Ms Cush said she found out that Mr Boland had sought an apology from Ms Dillon by letter which was ignored. Her reaction to this was:- "A. I felt almost resigned to understand that this matter was not going to be dealt with in any respectful way. That clearly Meryl did not feel that Les or I were of significant value to be treated with any respect." (T120.2).
61. Ms Cush was also asked her reaction to the defendant's evidence in the Section 7A trial and she said she was:- "A. Quite amazed that she would sit in a court of law and deny it, particularly in light of the fact that I knew James to be such a Christian man, and I had no doubt at all in what he said. But also in some respects a sense of surprise, for want of a better word, that my life was of such little value that it could just be destroyed in this manner without a second thought." (T120.49).
62. In my view Ms Cush presented a clear and very believable picture of a young woman whose personal and professional life was deeply impacted by untrue allegations which she felt could not be defended and which included a heartfelt concern for the harm that those allegations did to Mr Boland.

63. Specifically, however, I refer to the passage quoted above from page 110 of the transcript which describes Ms Cush's reaction to Mr Croft telling her that Ms Dillon had told him about the rumour. This "telling" is, of course, a reference to the publication of 8 April 2005.

64. Turning to Mr Boland, I have already mentioned Ms Cush's observation of him when he heard the rumour and I note that in his description of this conversation he referred to Ms Cush being in tears (T35.37). As to his own reaction he said he felt: "Probably sick in the guts, and probably to the stage where I was almost spewing" (T35.18). He said that following this conversation he drove home and told his wife what he had recently been told. He said that she was very distressed, a reaction which "absolutely tore me to pieces".

65. Following the conversation with Mr Croft in which the latter told him that Mrs Dillon had already made the allegation to Mr Croft, Mr Boland said that he felt "just about as sick in the guts as I did before" (T39.5). He said that he felt this way "because I'd heard it from him that she had told more than one person … and told him." (T39.8). The significance of this reaction is twofold:- (a) Firstly, it is Mr Boland's reaction to the publication being sued upon; and

(b) Secondly, it appears to stem from him finding out that Mrs Dillon had spoken to more than one person. It must be remembered here that Mr Boland did not seem to have attributed his reaction to the fact that it was Mr Croft specifically that was told and further the background set out above reveals the rumour was being spoken of amongst many people without reference to Mrs Dillon. 66. In relation to his reaction after speaking to Mrs Cross and Ms Chittenden, Mr Boland said: "It was absolutely horrible and a degrading feeling that I had to actually had to go over and do this" (T41.4).

67. In addition to telling his wife, Mr Boland also told his daughter Mrs Kerri Phillips. In relation to her observations of her father she said:- " A. Okay. So my observations of him, when we spoke of the matter at different times, was that he was very concerned about it. He was very frustrated, as I said before. Quite angry, upset. I know there was a couple of occasions - I don't know exactly the points in time - but I know his eyes welled up and for that to happen to my dad is a massive thing, because he was so concerned about it and the effects on Mum." (T151.22) When asked what her father had said as to the source of the frustration she replied:- "A. He was frustrated that these lies had been told. He was frustrated that Meryl Dillon was out to ruin his reputation and to affect his family. That's why he was frustrated." (T152.1).
68. I may not have related every part of the evidence describing the effect on Mr Boland of the slander but I think I have stated enough to demonstrate that the effect on him was profound. It was no doubt compounded by the illness of his wife and the upset that he knew such a rumour would cause her. It was suggested by counsel for the defendant, as part of an argument on mitigation of damages, that Mr Boland's informing people about the allegations, including other Board members, was unnecessary and that in effect he was inflicting further damage upon himself. If I understood the submission correctly, if he would not have told so many people he would not have been as upset. I reject this submission. In my view people react differently to the same stresses. Ms Cush on the one hand felt she could not discuss the matter with her extended family. Mr Boland perhaps sought solace in informing people and in regard to the Board plainly felt it appropriate that as a Board member his fellow members should be aware of the allegation in case it affected his relationship with them. I do not think there was any failure to mitigate on Mr Boland's part.

69. Thus far the position has been reached that the jury has found the words defamatory, has stated the imputations and there has been apparent damage consequent upon the publication, although as I have said above, the damage specifically flowing from the defamatory remark will need to be distilled from the overall damage consequent upon the rumour coming to the notice of the plaintiffs.

70. In Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9 McClellan CJ at CL summarised the requirements for a successful defence of qualified privilege. At paragraph 38 he said:- "The necessary requirement for an occasion of qualified privilege is a reciprocity of duty and interest. Defendants must show that he or she published the defamatory matter pursuant to an interest or duty and that the recipient had a reciprocal interest in receiving the published matter: Bashford v Information Australia (Newsletters) Pty Limited [2004] HCA 5; (2004) 218 CLR 366 (at [9]); Adam v Ward [1917] AC 309 (at 334)." He continued at paragraph 41: "When the defence of qualified privilege is raised two questions will commonly arise. Firstly, was the occasion of the publication one on which the necessary reciprocity of duty or interest existed (the "occasion")? Secondly, was the matter which defamed the appellant sufficiently connected to the privileged occasion to attract the defence ("relevance")?"
71. Malice was not pleaded in Aktas but it has been pleaded in the present case. Malice on the defendant's part will negate the defence. Principally the plaintiffs relied for proof of malice on the fact that the allegation was untrue and, perhaps more emphatically, on the fact that the defendant did not believe it was true (T248.30 and 255.22).

72. I probably do not need to reach any firm conclusion on whether the meeting between Mr Croft and Mrs Dillon was an occasion "on which the necessary reciprocity of duty or interest existed", nor whether the issue of the affair was relevant to the privileged occasion. I will however make some comments on these issues below.

73. The reason I do not think I have to firmly decide the 'circumstance' or 'relevance' questions is because I am satisfied that the plaintiff has established malice on behalf of Mrs Dillon and that, as a matter of law, the establishment of malice negates the privilege. As stated by the High Court in Roberts v Bass (2002) 194 ALR 161 at 179:- "Malice - the critical issue : In this way, the real focus of these appeals becomes that of considering the common law of malice as it operates as a disqualifying factor in the law of qualified privilege. There are two elements to note. The first is the general rule that, if an improper purpose is the actuating motive for a publication, the qualified privilege otherwise attracted to it by the occasion of its making is destroyed. The second is the relevance of the state of mind of the publisher as to the truth or untruth of the contents of the published material and the way in which such a state of mind is to be found or inferred."
74. Although the High Court makes it clear that knowledge that the defamatory statement is false will not necessarily destroy the privilege their Honours Gaudron, McHugh, Gummow JJ said at paragraph 77:- "If the defendant knew the statement was untrue when he or she made it, it is almost invariably conclusive evidence of malice. That is because a defendant who knowingly publishes false and defamatory material almost certainly has some improper motive for doing so, despite the inability of the plaintiff to identify the motive."
75. In my view, for Mrs Dillon to assert that the qualified privilege was not lost because of malice on her part she would need to show that she had otherwise acted properly in the bringing of the information to Mr Croft's notice. In other words I think I can look at her conduct outside of the meeting with Mr Croft on 8 April to assist me in determining whether she acted with or without a proper motive. I have already accepted that Mrs Dillon spread the rumour to Ms Chittenden and Mrs Cross. Against this background I do not see how, having already told other people about the rumour in clearly not qualified circumstances, Mrs Dillon could create a qualified circumstance with Mr Croft, in particular absent any disclosure by her that the rumour had already been spread to others and by others. In addition, I also think the previous dissemination of the rumour by Mrs Dillon would probably affect the creation of the necessary circumstance to ground the qualified privilege. In a situation such as the present there must be an implication that the confidentiality upon which Mrs Dillon relies in the conversation with Mr Croft was not set on a background in which she had told others of the rumour.

It is my view, therefore, that the spreading of the rumour by Mrs Dillon before she spoke to Mr Croft firstly affects the creation of the privileged circumstance and secondly, combined with her belief that the allegation was not true, establishes the malice necessary to negate the privilege.

Turning to the statutory defence of qualified privilege, this will fail if the conduct of the publisher is not "reasonable in the circumstances" (Section 22(1)(c)).

Putting aside the requirements of Section 22(1)(a) and (b) I am of the view that the conduct of Mrs Dillon in publishing the material was not reasonable in the circumstances. Subsection 2A of Section 22 directs the court to certain matters which may be taken into account on the question of reasonableness. In my view subparagraphs (d), (g) and (h) are most relevant. Mrs Dillon made no attempt to find out if the rumour had any substance, nor did she endeavour to approach either Mr Boland or Ms Cush before talking to Mr Croft. I accept that her relations with the plaintiffs may not have been conducive to such an approach but nevertheless she made the bald statement to Mr Croft without any qualification as to its lack of proof. I also think the matter I referred to in relation to the qualified privilege at common law is important, namely that by the time Mrs Dillon spoke to Mr Croft she had already spread the rumour to other people. It seems to me that it cannot be reasonable for her to claim that saying something to one person was reasonable when she had obviously told others in clearly unprivileged circumstances.

The final defence raised by Mrs Dillon is derived from Section 13 of the Act. In Jones v Sutton [2004] NSWCA 439 the New South Wales Court of Appeal held, quoting from the head note, "The test to be applied is whether, in the circumstances of the publication, the plaintiff was not likely to suffer harm. This requires proof of the absence of a real chance or possibility of harm".

In my view it is simply beyond any reasonable comprehension to assert that an allegation that a 61 year old man with an ill wife having an affair with a 36 year old single woman in a circumstance where there is a professional relationship between them could be said to be a circumstance where there is "the absence of a real chance of possibility of harm". I think this statement is so obvious that I need not elaborate. In case I am wrong there must be a reasonable expectation of causing harm to say of a person whose wife is ill (even if the details are not known) that he is having an affair with a much younger woman. Further, from the woman's point of view, to assert she is having an affair with a man with whom she has a professional relationship and who she knows is married must give rise to a possibility, if not a probability, of causing harm to those two persons. Accordingly, I reject the Section 13 defence.

McClellan CJ at CL, in Aktas, said the following about damages:- "An award of damages in defamation serves three purposes. It provides reparation for the harm done to the plaintiff's reputation; consolation for distress or hurt to the plaintiff's feelings; and vindication of the plaintiff's reputation: Carson v John Fairfax & Sons Limited [1993] HCA 31; (1993) 178 CLR 44 (at 60). The first two purposes are frequently considered together. In John Fairfax & Sons Limited v Kelly (1987) 8 NSWLR 131 McHugh JA (with whom Kirby P relevantly agreed) discussed the impact of time on damage caused by a defamation. There may be continuing damage to feelings and reputation after publication right up to the date of the verdict (at 143): - "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."" His Honour continued in paragraph 91 as follows:- "The assessment of damages in defamation is necessarily imprecise. Damages are "at large" in the sense that they cannot be arrived at through calculation or the application of a formula." 82. Learned senior counsel for the plaintiff listed six matters which he said served to "aggravate" the damages that should be awarded to the plaintiffs. These were:- (a) The concession by the defendant that at the meeting in which she was confronted by Mr Boland, that she denied the conversation with Mr Croft and then said "if I did I am sorry" . In my view this is not an aggravating factor. Mrs Dillon was suddenly confronted with the allegation and felt under, as she said, pressure herself. I do not think she could be criticised for her denial given the, in her perception, attack upon her. On one view, she at least made a qualified apology.

(b) The evidence arising from Exhibit 7. This Exhibit is a printout of two emails. The first was from Mrs Dillon seeking an appropriate time to discuss matters with Mr Boland. His reply, perhaps inadvertently, in fact contradicts information given by Mrs Dillon about her availability the next day. In any event Mrs Dillon did try to contact Mr Boland the following day but her call was unanswered. She did not try again. Perhaps she could have left a message on the mobile phone number (if message facilities were available) and perhaps she could have tried again on another day. In a sense it is indeed unfortunate that she did not attempt to calm matters between her and Mr Boland but had she done so, that would not have solved the problem with Ms Cush. There was also the limited time in order to contact him as the suggestion was that the meeting, or conversation, should take place before the upcoming Board meeting. I do not see Exhibit 7, and its surrounding evidence, as giving rise to any aggravating factor.

(c) Exhibit C is a letter written by solicitors for Mr Boland seeking an apology and retraction. Counsel for the defendant took, I thought, an overly technical approach to this letter in terms of what it required of Mrs Dillon. Whatever it did require, however, she simply ignored it and as she said "put her head in the sand" . Again, the course of the proceedings may have been different had she responded, but one does not know that on any probable basis. I do, in contrast to Exhibit 7, think that Mrs Dillon's absolute ignoring of the letter is a factor, but not a large one, which should feature in the assessment of damages. (d) Mrs Dillon persistently denied publication of the alleged defamatory remark necessitating a jury having to make a decision. It should be remembered, however, that Mrs Dillon did not deny any conversation with Mr Croft but rather there are differences in the content. Further, the jury rejected the establishment of words said by the defendant to Ms Chittenden. Clearly, Mrs Dillon was entitled to put her side of the conversations and I do not think she should be penalised for doing so.

(e) Exhibit D is a letter from the defendant's solicitors sent to the Treasury Managed Fund, an insurer, which I infer to be the insurer of the CMA probably in respect of directors' indemnity insurance. I do not know, however, whether any policy is currently relevant. The aggravation said to arise from this letter, which was distributed at a Board meeting, concerns its contents which, by inference, are attributed to instructions from Mrs Dillon and which, for example, relate to the triviality of the allegations put by the plaintiff and Mr Boland's willingness "to spend large amounts of money on lawyers in order to persecute Ms Dillon" . It was suggested to me that I should take no account of this letter because I should infer that it was improperly disclosed to Mr Boland and the other board members. The difficulty with that submission is that no evidence was given either by Mrs Dillon or anyone else called by her to explain how the letter came to be distributed. The letter certainly contains matters which would have accentuated the hurt felt, especially by Mr Boland, and I think it should be taken into account in assessing damages, but again not to any significant degree.

(f) The proceedings have had a long history, starting off in the Supreme Court, being transferred to the District Court, going through various interlocutory steps, having a lengthy Section 7A hearing and concluding with the again lengthy hearing before me. Senior counsel for the plaintiff said that such an extended exercise would necessarily involve the continuation of the hurt. He did, however, and I thought most fairly, not place a good deal of weight on this factor, acknowledging that at least some of the interlocutory applications had been decided in the defendant's favour and I have already noted that the jury rejected one of the allegations of a defamatory publication. I do not think the course of the proceedings is an aggravating factor. 83. Senior counsel for the plaintiff took me to a selection of decisions in this court which he said established the range of damages which were open to me (Moumoutzakis v Carpino [2008] NSWDC 168 and Hennessy v Lynch (No 3) [2007] NSWDC 268). He placed the high end at $50,000 and the low end at around $5,000. He accepted that this range included any aggravating factor and also, if I understood him correctly, that the range encompassed the whole of the hurt flowing from the rumour. This latter point, and I have mentioned it above, and raised it on a number of occasions during the trial, seems to me to be a major stumbling block in the plaintiffs' case.

84. I am required to assess the damages that flowed from the defamatory publication made on 8 April 2005. Further, I must include in the assessment the imputations found by the jury. I am not, however, assessing all of the damages caused by the rumour that the two plaintiffs were having an affair. I find it an extremely difficult task to extract from the whole of the evidence the amount of hurt that can be attributed to the publication on 8 April 2005. This is particularly so in the light of the following:- (a) Other than the reference to being " shocked " there was no other evidence describing the effect on Mr Croft. As I have already said, if anything, the evidence suggests he treated the allegation lightly.

(b) Mr Croft did not republish the allegation and it only came to light some months later when the rumour had otherwise come to the attention of the plaintiffs. On the one hand I have no doubt that they did have a reaction to discovering Mr Croft had received the rumour. On the other hand, absent the publication to Mr Croft the effect of the rumour may have been little different. Had I been assessing damages for the whole of the effects of the rumour on each of the plaintiffs, and taking into account Section 46A of the Act, I think I would have assessed them in the order of $30,000. 85. I should say here that I do not see any good reason to award a greater sum of damages to any one of the plaintiffs. Their circumstances are quite different and they are quite different people. In some senses their reactions were also dissimilar. As stated in Aktas, however, the assessment of damages for defamation is not a precise science and despite the differences I do not see that the plaintiffs should be treated differently. On one argument the existence of Mr Boland's family circumstances might weigh in favour of a greater award to him but, on the other hand, Ms Cush's youth and her fear of condemnation as a home wrecker could be seen as weighing equally heavily. 86. Starting off then with the $30,000 representing the overall hurt from the rumour, the distilling of the harm arising from the 8 April publication does not leave any significant body of identifiable hurt. The rumour had been widespread, was known to people both within and outside the CMA, was apparently much talked about at the trade fair (Agquip) and, as one often anticipates with such rumours, presumably spread in the manner that such salacious gossip tends to attract the interest of the community. In addition is Mr Croft receiving the rumour, doing nothing with it and apparently treating it with disregard. Even if I am wrong on the effect it had on Mr Croft (assuming he thought it was true) the damages that could be attributed to the publication compared to the rumour at large must be reduced.

87. I think there is an argument that would go so far as to say that damages should be so minimal as to be negligible. I would have reached that conclusion had there not been the evidence of specific hurt flowing from the plaintiffs discovering the publication to Mr Croft. Taking into account the aggravating factors I have identified, I assess the damages representing this specific hurt at $5,000 for each plaintiff.

88. Accordingly there will be a verdict for each plaintiff in the sum of $5,000.

89. I was told that certain matters of costs had been previously reserved and that submissions would be made on other matters relating to costs. I will therefore stand the matter over to permit argument on costs.

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