Dillon v Cush; Dillon v Boland

Court of Appeal (NSW)|2010-05-07|Before: Allsop ACJ, Tobias JA, Bergin CJ, Sperling J

CITATION: Dillon v Cush; Dillon v Boland [2010] NSWCA 165

JUDGMENT OF: Allsop ACJ at 1; Tobias JA at 5; Bergin CJ in Eq at 6

In each appeal 40173 of 2009 and 40174 of 2009: 1. The appeal is allowed. DECISION: 2. The orders of the District Court made on 25 February 2009 and entered on 12 March 2009 be set aside. 3. There be a new trial on the defence of qualified privilege at common law. 4. The Respondent is to the pay the Appellant's costs of the appeal, including the application for leave to appeal and is to have a certificate under the Suitors' Fund Act 1951 if so qualified.

CATCHWORDS: DEFAMATION - QUALIFIED PRIVILEGE - process to determine whether occasion of qualified privilege at common law - onus of proof in relation to malice - whether lack of honest belief in truth of matter complained of on its own establishes malice to defeat qualified privilege at common law

Catchment Management Authorities Act 2003 LEGISLATION CITED: Defamation Act 1974 Evidence Act 1995

Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9 Bennette v Cohen [2009] NSWCA 60 Blair v Curran (1939) 62 CLR 464 Clark v Molyneux (1877) 3 QBD 237 CASES CITED: Cush v Dillon and Boland v Dillon [2009] NSWDC 21 Gross v Weston (2007) 69 NSWLR 279 Hadid v Australis Media Ltd unreported, NSWSC, Sperling J, 1 November 1996 Roberts v Bass (2002) 212 CLR 1 Toogood v Spyring (1834) 1 Cr M & R 181

Meryl Lurline Dillon (Appellant) PARTIES: Amanda Cush (Respondent) Leslie Francis Boland (Respondent)

COUNSEL: R G McHugh SC / M G Lynch (Appellant) T A Alexis SC / P M Sibtain (Respondents)

SOLICITORS: Banki Haddock Fiora (Appellant) Cole & Butler (Respondents)

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 4735/06; 4917/06

LOWER COURT JUDICIAL OFFICER: Elkaim SC DCJ

LOWER COURT DATE OF DECISION: 25 February 2009

LOWER COURT MEDIUM NEUTRAL CITATION: Cush v Dillon and Boland v Dillon [2009] NSWDC 21

1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40173 OF 2009 CA 40174 OF 2009

ALLSOP ACJ TOBIAS JA BERGIN CJ in Eq

15 JULY 2010 Meryl Lurline Dillon v Amanda Cush Meryl Lurline Dillon v Leslie Francis Boland Judgment 1 ALLSOP ACJ: I have read the reasons of Bergin CJ in Eq. I agree with them and with the orders proposed by her Honour. 2 The disposition of the appeal does not require consideration of the question of the voluntary character or not of a communication in the ascertainment of whether an occasion is privileged. 3 It is most regrettable that the matter must be remitted. It is, however, for the reasons the Chief Judge makes clear, necessary. It is to be hoped that the parties can see the possibility of compromise in an attempt to avoid significant further costs over such small verdicts. Compromise would avoid the risk of financial ruin to one party, or all parties, by the continuation of this litigation and would also avoid the risk of having to recognise, in due course, that all is lost save honour and life, on both sides. 4 There may have been attempts to employ mediation to achieve compromise in the past. It would not, however, be inappropriate for the District Court to consider requiring the parties to mediate under the Civil Procedure Act 2005 (NSW), s 26 prior to any further hearing. 5 TOBIAS JA: I agree with Bergin CJ in Eq. I also agree with the comments of the Acting Chief Justice. 6 BERGIN CJ in Eq: These appeals arise out of a defamatory statement published by the Appellant, Meryl Lurline Dillon, to the Chairperson of the Border Rivers-Gwydir Catchment Management Authority (the CMA), James Croft, on 8 April 2005, about the Respondents, Amanda Cush (in appeal 40173 of 2009) and Leslie Francis Boland (in appeal 40174 of 2009) that it was "common knowledge among people in the CMA that Les and Amanda are having an affair" (the Statement). It was and is common ground in the litigation that: (a) the Respondents did not have an affair; and (b) the Appellant did not believe the Respondents were having an affair when she made the Statement to Mr Croft: [WB 22; par 8]. Background 7 The CMA is a statutory authority established under the Catchment Management Authorities Act 2003, the members of the Board of which are appointed by the relevant Minister. Mr Croft was appointed as the inaugural Chairperson of the Board in February 2004. The Appellant and Mr Boland were appointed to the Board in May 2004 and August 2004 respectively. Ms Cush was appointed as the General Manager of the CMA in mid 2004. Other members of the Board at the relevant time were Mr Mal Peters, Dr Bob Crouch, Mr Barry Johnston and Ms Michelle Ward. 8 The Department of Infrastructure, Planning and Natural Resources (the Department) had the human resources responsibility and the financial transactional responsibility for the CMA. Randall Peter Hart was the Regional Director of the Department at the relevant time. 9 During the latter half of 2004 plans were made to hold a workshop meeting of the Board with supporting staff members of the CMA in Tweed Heads in January 2005. It was apparently most unusual to hold such a meeting outside the local or catchment area of an Authority and these plans and the meeting itself were the genesis of a rumour that the Respondents were having an affair (the rumour) fuelled by the fact that Mr Boland owned an apartment on the Gold Coast nearby to Tweed Heads. Employees advise the Appellant of the rumour 10 Although the main office of the CMA was in Inverell, five employees worked at the Moree office. They were Mrs Laticia Cross, Ms Michelle Chittenden, Mr Ashleigh Pitman, Mr Rodney O'Brien and Mr Greg Mills. Mr Mills and Mr O'Brien 11 As at December 2004 the process of dealing with internal complaints against officers of the CMA involved the consideration of the "grievance" by a "Grievance Committee" constituted by members of the Board. Mr Mills filed a grievance against Ms Cush on 15 or 16 December 2004. The Board established a Grievance Committee comprising Mr Croft, Mr Boland and Dr Crouch. The nature of that grievance is not in evidence. Although Mr Mills was not interviewed, the Committee interviewed Mr Pitman "to ascertain his version of events". Ms Cush was asked to provide a written response that was received by the Committee on 21 December 2004. The Committee met on 15 January 2005 and made a recommendation to the Board that "no further action be taken based on the available information in relation to this grievance": [WB 313]. The Board adopted that recommendation at its meeting in January 2005. However the Human Resources branch of the Department gave some advice to either the Board or the Grievance Committee and it was decided to give Mr Mills "the opportunity to verbally present his case". That opportunity was provided in an interview with Mr Croft and Mr Boland on 15 February 2005. The Grievance Committee made a recommendation to the Board that "as there was no additional information supplied" the decision taken by the Board at the January meeting "should stand": [WB 314].

12 It was probably in early 2005 that Mr Mills informed the Appellant that he had "a matter of grievance" in relation to Ms Cush and that he felt that his matter had not been dealt with impartially because he believed that the Respondents were having an affair: [WB 556]. Also at around this time Mr O'Brien informed the Appellant that he had "some concerns about the CMA" and "some concerns about the relationship" between the Respondents that related to some issues about the Grievance Committee: [WB 555-556]. Mr Pitman 13 Mr Pitman first heard the rumour in December 2004 when he was in the tea room at the Moree office of the CMA with Messrs O'Brien and Mills and Mrs Cross: [WB 665]. 14 In early 2005 Mr Hart, with whom Mr Pitman became acquainted as his Regional Director when he was working for the Department (operating under a previous name) prior to his employment with the CMA, telephoned Mr Pitman and asked him whether he was aware of a rumour "that Les and Amanda may have had some relationship": [WB 664]. Mr Pitman informed Mr Hart that there was such a rumour, but he was "not sure whether there is anything to substantiate it": [WB 664]. In late February 2005 Wendy Bate, who worked with Mr Hart in the Department, rang Mr Pitman and asked him about the rumour. Mr Pitman acknowledged to Ms Bate that there was such a rumour: [WB 667]. Mr Pitman conveyed his knowledge of the rumour to the Appellant "some time around February 2005": [WB 667]. Mrs Cross 15 Mrs Cross became aware of the rumour at "the start" of 2005 from Ms Chittenden and subsequently heard it from her "extensive network" across the CMA area: [WB 476-477]. Ms Chittenden 16 Ms Chittenden, the Minute Secretary of the Board, claimed that in "around February 2005" when she and the Appellant were travelling together from Inverell to Moree after a Board meeting, the Appellant said that she thought the Respondents "might be having an affair": [WB 144]. Mr Hart telephones the Appellant 17 Mr Hart rang the Appellant on 30 March 2005 and informed her that he wanted to have a "confidential" discussion: [WB 678]. At that stage Mr Hart did not want to involve the Appellant or use her name, but he had "certain allegations" that had been made to him by former staff and he wanted to pursue them before making anything "official" and reporting it to his departmental head, the Director-General: [WB 678]. He telephoned the Appellant because he had known her longer than anyone else on the Board and had a good relationship with her and thought that he would get a "pretty direct answer" from her: [WB 678]. At the time Mr Hart spoke to the Appellant "lots of people were talking about the rumour" and he had "heard it from a number of sources": [WB 681]. 18 During the conversation with the Appellant "the topic or the subject of the existence or otherwise of an affair or a relationship" between the Respondents was "mentioned" by the Appellant: [WB 673]. Mr Hart had concerns about a number of aspects of the operation of the CMA, however he did not have a "concern" about the alleged affair: [WB 674]. Seeking support for the GM 19 By email dated 31 March 2005 Mr Croft forwarded an "Out of Sessions Business Paper" to the members of the Board for their "early response": [WB 332 and 334]. That document was in the following terms: Issue Statement of Support for General manager Background A number of CMA's (sic) are being severely tested on staffing related matters in the Industrial Relations area to the extent that appeals and complaints occupy much of GM time and therefore CMA resources. Appeals and complaints relate to both CMA processes and personnel and in some cases are widened to include Boards and potentially individual members thereof DIPNR Industrial Relations support is currently overloaded to the extent that complainants are receiving a disproportionate share of resources at the expense of affected GMs In order to manage risk to our Board and management Amanda has requested that we provide a written statement of support for the role and responsibilities attached to the GM position Other CMA Boards have provided similar support to their GM and as this matter is both important and urgent it necessarily requires decision out of session Recommendation 1 That the Board of the Border Rivers-Gwydir CMA affirms support for the GM in the delivery of the outcomes relating to the responsibilities of that position 2 That this paper and resulting decision be recorded in the business of the April Board Meeting

20 On 31 March 2005 the Appellant wrote by email to Mr Croft asking him what the urgency was in having an Out of Session Business Paper in relation to that particular issue: [WB 332]. On 1 April 2005 Mr Croft wrote by email to the Appellant advising that the urgency was that "Amanda may have to respond to an accusation prior to the next meeting and needs our support to be prepared for that eventuality": [WB 332]. Memorandum of 1 April 2005 21 After his conversation with the Appellant, Mr Hart prepared a Memorandum to the Director-General of the Department dated 1 April 2005 that he sent by facsimile on 4 April 2005. That Memorandum referred to the "seriousness" of allegations that had been made against Ms Cush and to an investigation carried out by Mr Hart and Ms Bate. It included alleged inappropriate claims in relation to a Travelling Allowance and approvals thereof. It referred to the Tweed Heads meeting and raised questions about the expenses incurred in relation to that meeting. It also referred to the circumstances surrounding the non-appointment of an indigenous officer. It included advice that a CMA Board member had "been in contact with" Mr Hart in relation to corporate governance matters of the Board and that the Board member would bring those matters to the attention of the Minister. 22 There was also a reference to so-called "anomalies" including that Mr O'Brien had resigned; a further two staff members of the CMA had indicated they would resign; and two Departmental staff members had indicated they would refuse a transfer to the CMA. The Memorandum did not mention the "rumour", however it recommended that the allegations against Ms Cush should be referred to the relevant area of the Department for investigation: [WB 305-306]. 23 On 6 April 2005 the Director-General of the Department wrote to Ms Cush advising her that she had decided to treat a complaint in relation to the selection process for the "Catchment Officer Indigenous" as a "disciplinary matter". The Director-General advised Ms Cush of the process to be followed and the possible "disciplinary actions" that could be applied if a finding of misconduct were to be made: [WB 380-381]. The Meeting with Mr Croft on 8 April 2005 24 The Appellant met with Mr Croft on 8 April 2005 in a café in Moree in a location where they could have a private conversation. The Appellant informed Mr Croft of the telephone conversation with Mr Hart and the fact that he had raised a number of "concerns" about the CMA with her: [WB 106]. The Appellant raised concerns about: a complaint in relation to the appointment process in respect of an indigenous officer's position with the CMA: [WB 105]; the corporate governance of the CMA: [WB 106]; staff management issues, in particular that some of the staff had made complaints about "the conduct of the general manager": [WB 107]; and the Board's attitude to the staff; and the grievance process: [WB 108]. Although the concerns that the Appellant raised with Mr Croft had come to the attention of some members of the Board before this date, the Appellant advised Mr Croft that the Department, through Mr Hart, was looking at whether the Board was reacting appropriately to these matters. Mr Croft was concerned that the Department was raising questions about whether the Board was doing its job properly: [WB 108-109]. Mr Croft asked the Appellant to work with Ms Cush to develop a business paper for the Board in relation to the governance concerns that she had raised. 25 Mr Croft claimed that during the meeting the Appellant said: "It was well known among members of the Catchment Management Authority that Les and Amanda were having an affair": [WB 100]; or "It was widely known throughout the CMA that Les and Amanda were having an affair": [WB 115]. Subsequent events 26 There was a Board Meeting on 15 April 2005 at which the recommendations in the Out of Session Business Paper were carried: [WB 329].

27 The Respondents were made aware of the rumour and tension developed between the Appellant and Mr Croft and Mr Boland. On 26 May 2005 Mr Croft wrote to the Appellant in terms that included the following [WB 302]: You will recall that I invited you to prepare, with the cooperation of Amanda, a business paper covering the concerns you expressed to me during our meeting at Moree on the morning of April 8 th . This was to be presented at the next board meeting This invitation was not acted upon Instead, a complaint about board processes and other matters appears in a document forming part of allegations against Amanda coming as a complete surprise to both myself and other board members Irrespective of how such allegations appeared in the document the fact remains that both board members and I felt betrayed by the manner in which they surfaced I am most disappointed in your actions and behaviour to breach the trust of your fellow board members This is a serious matter and an explanation would be one decent course of action Again I invite you to contribute your skills towards addressing your concerns through the development of the appropriate business paper Also I would remind you of a quote from Carl Taylor "If you can't help don't hinder". 28 Ms Cush's employment was terminated in August/September 2005. Relationships at Board level with the Appellant declined and allegations were made that the Appellant had breached the Code of Conduct of the Board. It is apparent that the Appellant did not respond to these allegations and on 21 October 2005 the Board decided that it was "not prepared to work with" the Appellant from that time: [WB 375]. The Appellant's term on the Board concluded on 5 November 2005: [WB 128]. Proceedings commenced 29 The Respondents brought proceedings in the District Court of New South Wales against the Appellant under the Defamation Act 1974 (the Act). The Respondents claimed in their respective cases that: (1) the Appellant published to Ms Chittenden on either 21 January 2005 or 18 February 2005 the statement "What do you think of Les and Amanda, they seem to be very close. I think they might be having an affair"; and (2) the Appellant published to Mr Croft on 8 April 2005 the statement "It is common knowledge among people in the CMA that Les and Amanda are having an affair". The s 7A Trial 30 After a hearing before a judge and jury pursuant to s 7A of the Act on 5 to 8 November 2007, the jury answered "yes" to the question whether each Respondent had established that on 8 April 2005, the Appellant had said the words (or words substantially the same) to Mr Croft, "It is common knowledge among people in the CMA that Les and Amanda are having an affair". The jury found that in respect of Mr Boland the Statement conveyed the defamatory imputations that: (a) as a member of the Board of the CMA Mr Boland was "acting unprofessionally by having an affair with the General Manager of that organisation"; and (b) he was unfaithful to his wife. The jury found that in respect of Ms Cush the Statement conveyed the defamatory imputations that: (a) as the General Manager of the CMA Ms Cush was "acting unprofessionally by having an affair with a member of the Board of that organisation"; and (b) she was undermining the marriage of Mr Boland and his wife. 31 The jury answered "no" to the question whether the Respondents had established that on either 21 January 2005 or 18 February 2005 the Appellant said to Michelle Chittenden the words (or words substantially the same) "What do you think of Les and Amanda, they seem to be very close. I think they might be having an affair." The Defence 32 The Appellant relied on a number of defences, including qualified privilege at common law (qualified privilege), which is the only defence to be considered in these appeals. The Appellant's Amended Defence at trial alleged that the Appellant published the Statement for the information of Mr Croft and that she had legal, social and/or moral duties and/or interests to publish it to Mr Croft [par B1(i)]; that Mr Croft had reciprocal interests and/or duties in receiving the Statement [B1(ii)]; that the Appellant was aware and/or believed that Mr Croft had an interest in: the activities of Mr Boland in his capacity as a Board member of the CMA and Ms Cush as the General Manager of the CMA; the conduct of the Board and the General Manager of the CMA; the management of and recruitment of the staff of the CMA; the relationship between the CMA and its staff with the Department; and that such conduct warranted the attention and possible investigation by the Department, the Independent Commission Against Corruption and other NSW Government investigatory agencies [B1(iii)]. 33 The Respondents filed an Amended Reply in which they claimed that the qualified privilege defence was defeated by the Appellant being "actuated by an improper motive" in publishing the Statement, the particulars of which were as follows: (i) She did not honestly believe that [the Respondents] were having an affair;

(ii) She made no proper enquiry of the [Respondents] as to whether or not they were in fact having an affair;

(iii) She did not honestly believe that it was common knowledge among people in the CMA that the [Respondents] were having an affair;

(iv) She made no proper enquiry within the CMA to establish whether or not it was common knowledge among people in the CMA that the [Respondents] were having an affair;

(v) She dishonestly stated that she was acting upon instructions from Mr Hart to inform Mr Croft of the fact that it was common knowledge that the [Respondents] were having an affair;

(vi) She did not wish Mr Croft to act on the statements made to him; and/or

(vii) She had no belief that any affair between the [Respondents] had any adverse impact on the workings of the CMA.

Trial on defences and damages 34 The trial relating to the defences and damages took place between 9 and 13 February 2009. Judgment was delivered on 25 February 2009 Cush v Dillon and Boland v Dillon [2009] NSWDC 21 (the Judgment). The trial judge concluded that the qualified privilege defence was not made out and awarded each of the Respondents $5000. 35 The Appellant gave evidence of her conversation with Mr Hart and was cross-examined as follows [WB 561]: 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 affect on any of 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. 36 The Appellant gave evidence of her conversation with Mr Croft in which she claimed that "the whole context of the conversation" was in relation to "a series of matters, one of which was the questions that were being raised about the relationship" but that it was "not the specific reason for the conversation" but was "one of a series of issues" that she wanted to raise with Mr Croft: [WB 640]. The Appellant claimed [WB 564-565]:

I said to James that I had been contacted by a senior member of the Department and they are raising some concerns about the CMA, some serious concerns about the CMA. I said to him they were asking questions about the Aboriginal position and whether or not the Board had intervened in the appointment. I raised with him the fact that they were asking questions about the relationship between the Board and the General Manager and a particular Board member and the General Manager. 37 The Appellant was also cross-examined about the information that had been provided to her by Messrs Mills, O'Brien and Pitman and gave the following evidence [WB 614-615]: Q. You hadn't obtained any evidence independently of those three gentlemen about the existence of an affair between early January 2005 and late March 2005, did you? A. No.

Q. You didn't believe the accusation about the existence of an affair, that those three gentlemen told you of in late 2004, early 2005, did you? A. No, I didn't.

Q. May we take it that, if you thought there was a grain of truth in it, you would have taken steps promptly to raise it with Mr Croft or some other appropriate person. A. I had no evidence either way.

Q. What I want to suggest is that you sat on the information that those three gentlemen had said to you about the existence of an affair for about two to three months and spoke for the first time about that subject matter to Mr Hart in late March or early April 2005. A. Other than to advise them if they had concerns they should raise them with the chairperson.

Q. But it's correct for his Honour to understand that, during those intervening months, from early January 2005 until the end of March, you felt no sense of duty or obligation to speak to anybody about what those three staff members had said to you, did you? A. As I said, I believed the correct process was for them to raise these matters and I had urged them to do so, and I believe in one instance that in fact they may have been raised with the chairperson.

Q. … You had no sense of duty or obligation to say anything to anybody about what those three staff members had said to you about the existence of the affair from early January 2005, until speaking with Mr Hart in late March or early April 2005, did you? A. To speak to anyone about it? That's the specific point in that question? No I didn't believe that I had a duty to speak to anyone about it, no.

Q. The reason why you didn't believe you had a duty to speak to anyone about that, is because you didn't believe the allegations. Correct? A. I had no reason to believe the allegations at that point in time, other than that they were allegations.

Q. Therefore, you didn't believe them. A. Well, yes, if that's --

Q. Presumably, if you thought there was a grain of truth in it, one of the persons you could have spoken to about it was Mr Boland. A. I don't think I could have spoken to Mr Boland about it.

Q. What about Mrs Cush? You could have spoken to her about it if you thought there was a grain of truth in it. A. I don't believe that I could have spoken to Mrs Cush.

Q. Would you agree with me that during the months of January, February and March 2005, you felt no sense of duty or obligation to speak to Mr Croft, the Chairman of the Board, about what the three staff members had said to you about the existence of the affair? A. Inasmuch as I believed it was their responsibility to raise these things.

Q. So it follows that you yourself felt no sense of duty or obligation to speak to Mr Croft about that subject. Correct? A. At that point in time.

Q. So we're clear with one another, Mrs Dillon, the point of time you accept is the months of January, February and March 2005. Correct? A. That's right.

Q. May we take it that the last thing you would have done during those three months of 2005 was to raise allegations made by staff members when you had seen no evidence of it, and you didn't believe in the truth of it? A. That's right.

38 The trial judge said: 29. 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 travel to Tweed Heads." (T 173.20) 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." (T 175.16) 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 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".

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." 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 cafe 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, T 12.12). 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. (T 177.23) 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 Hart. I will return to this matter when looking at the defence of qualified privilege below. 38. 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 (T 181.29). I will obviously proceed on the basis of the jury's finding.

39 The trial judge detailed the chronology of events and conversations leading up to the Respondents becoming aware of the rumour and the publication of the Statement. That included reference to Mr Boland's evidence of a meeting with Mr Croft and Ms Chittenden in which Ms Chittenden said that she had travelled back from Inverell in February 2005 with the Appellant and that during that trip the Appellant said "I just think Les and Amanda are having an affair": [48]. The trial judge continued: 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 (sic) in Mr Croft's presence. A. I said to Latitia (sic) 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 where 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"". (T 38.1)

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. 40 The trial judge addressed the qualified privilege defence as follows: 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 the 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.

76 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. The Appeals 41 Leave to appeal was granted on 31 August 2009 and the appeals were heard together on 7 May 2010 when Mr R McHugh SC, leading Mr M Lynch of counsel, appeared for the Appellant in both appeals and Mr T Alexis SC, leading Ms P Sibtain, appeared for the Respondents in both appeals. Grounds of Appeal 42 The Appellant contends that the trial judge erred: (1) in failing to find that the occasion on which the Statement was published by the Appellant to Mr Croft was an occasion of qualified privilege: (2) in reversing the onus in respect of proof of malice: (3) in finding that the Appellant believed the rumour to be false; and (4) in finding that the Appellant spread the rumour. Ground 1: Occasion 43 The trial judge concluded that it was probably not necessary to reach any firm conclusion on whether the meeting between Mr Croft and the Appellant was an occasion where "one person has a duty or interest to make the statement and the recipient of the statement has a corresponding duty or interest to receive it" because he concluded that even if it were such an occasion it would be lost because of malice on the Appellant's part: [WB 35; par 75]

44 In Bennette v Cohen [2009] NSWCA 60 Ipp JA, who gave separate reasons for coming to the same conclusion as Tobias JA, with whom Campbell JA agreed, on the issue of qualified privilege referred at [4] to the "classic statement" of the test by Parke B in Toogood v Spyring (1834) 1 Cr M & R 181 at 193, that a defamatory publication is actionable "unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned." After referring to the very high level of abstraction and generality apparent in the test Ipp JA said: [7] In Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1 Gaudron, McHugh and Gummow JJ said (at [62], 26): "The common law protects a defamatory statement made on an occasion where one person has a duty or interest to make the statement and the recipient of the statement has a corresponding duty or interest to receive it." (Citation omitted.)

[8] In Bashford McHugh J (who dissented in the outcome) said at [53], 385-386): "At common law, a defamatory statement receives qualified protection when it is made in discharge of a duty or the furtherance or protection of an interest of the maker of the statement or some person with whom the publisher has a direct business, professional or social connection, and the recipient of the statement has a corresponding duty to receive or interest in receiving it. Lord Campbell CJ stated the principle in Harrison v Bush (1955) 5 E & B 344 at 348 as follows: 'A communication made bona fide upon any subject matter in which the party communicating has an interest, or in reference to which he has a duty, is privileged, if made to a person having a corresponding interest or duty, although it contain criminating matter which, without this privilege would be slanderous and actionable.'" (Citation omitted.) [9] The application of such broad statements of principle is the first step in determining whether an occasion is subject to qualified privilege at common law. The next step is to proceed with the requisite close scrutiny of all the circumstances of the case. Those circumstances will include (as Dixon J states in Guise v Kouvelis (1947) 74 CLR 102 at 116) the situation of the parties, the relations of all concerned and the events leading up to and surrounding the publication. They will also include the matter complained of ( Bashford at [54] per McHugh J).

45 The Appellant submitted that the occasion on which the Statement was published to Mr Croft was clearly an occasion of qualified privilege. It was submitted that factors to be taken into account in reaching that conclusion include: that Mr Croft was the Chairperson of the Board of which the Appellant was a member; a rumour of the alleged existence of the affair had widespread currency at the time the Appellant spoke to Mr Croft on 8 April 2005; and some members of the CMA had expressed "concern" about the rumour having regard to the fact that Mr Boland was a member of the Grievance Committee which dealt with complaints about Ms Cush's performance as General Manager. 46 It was also submitted that although there is some dispute about the precise terms of the conversation between Mr Hart and the Appellant, it seems clear that they discussed the fact that questions had been raised about Ms Cush's conduct at the CMA and at least on the Appellant's account, the fact that a report was to be made to ICAC. It was also submitted that before the discussion with the Appellant, Mr Hart was aware that the rumour was being widely discussed. 47 It was submitted that the Appellant had a duty, arising out of her position on the CMA Board, to pass information about the rumour to the Chairperson, who had a corresponding duty to receive it. It was submitted that what founded their reciprocal duties was the fact that the rumour appeared to be harming the CMA, both internally (with staff) and externally (with the Department), irrespective of whether the rumour was true. It was submitted that the question whether the Appellant believed the rumour to be false, while plainly relevant to malice, is irrelevant to the question whether there was an occasion of qualified privilege at the outset. In this regard the Appellant relied upon what was said by Bramwell LJ in Clark v Molyneux (1877) 3 QBD 237 at 244 as follows: …I wish to remark that a person may honestly make on a particular occasion a defamatory statement without believing it to be true; because the statement may be of such character that on that occasion it may be proper to communicate it to a particular person who ought to be informed of it. 48 The process referred to by Ipp JA in Bennette v Cohen and McClellan CJ at CL in Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9, was not followed by the trial judge. Rather his Honour decided not to take the first step of determining whether the occasion was subject to qualified privilege because his Honour decided that the Appellant was actuated by malice such that if any privilege existed it would be destroyed. The Appellant submitted that to the extent that the trial judge found that there was no occasion of qualified privilege at paragraphs [75] and [76] of the Judgment his Honour fell into error. The Respondents submitted that to the extent that the trial judge made a finding that there was no occasion of qualified privilege, it was a correct finding, otherwise it was a finding that should have been made. 49 The Regional Director of the Department contacted the Appellant in her role as a member of the Board of the CMA to discuss serious allegations of misconduct within the CMA. The allegations were of a kind that the Regional Director considered might be referred to ICAC. It was during this conversation that the rumour of the relationship between the Respondents was "mentioned". Mr Hart was well aware of the rumour at the time of the conversation and the evidence established that he had contacted Mr Pitman, as had his assistant, Ms Bate, to ask about the rumour, albeit that Mr Hart could not recall telephoning Mr Pitman. Although Mr Hart gave evidence that he did not regard the rumour as a matter of concern, it clearly was a matter important enough for him to telephone Mr Pitman to ask him about it. 50 The detail of the serious allegations relating to inappropriate financial transactions and expenses as outlined in Mr Hart's memorandum of 1 April 2005 to the Director General included allegations that Ms Cush made claims for expenses that were allegedly already paid for by the CMA. The focus of the discussion between the Appellant and Mr Hart related to Ms Cush's alleged misconduct. It is clear that the Appellant raised with Mr Hart her concerns about the corporate governance of the Board and it would appear that agreement was reached that the Appellant would raise these matters directly with the Minister. The Appellant experienced what she described as a "dilemma" but decided on reflection that she should inform the Chairperson of the Board, Mr Croft, of as much of the conversation with Mr Hart as she could without compromising any investigation. Once the Appellant became aware of the serious allegations referred to by Mr Hart, she had a duty to inform the Chairperson of the Board of the nature of those allegations. The Chairperson of the Board had a corresponding interest in receiving the information from a member of the Board who had been approached by the Regional Director of the Department. 51 Mr Alexis submitted that although the conversation with Mr Croft may have had a feature of qualified privilege to it, once the Appellant referred to the "affair" it fell outside the privileged occasion. It was submitted that the Statement was not "relevant", in that the defamatory material was not sufficiently connected to the privileged occasion to attract the defence: Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9 per McClellan CJ at CL, with whom Ipp and Basten JJA agreed, at [41]. 52 The fact that the trial judge did not accept the Appellant's evidence that Mr Hart had raised the affair as a matter of "concern" does not mean that the occasion on which the Appellant conveyed the information to Mr Croft was not a privileged occasion. The circumstances of the communication must be assessed irrespective of whether Mr Hart raised the affair as a matter of concern, to determine whether it was a privileged occasion. The rumour of the affair was intrinsically intertwined with the concerns the Appellant raised with Mr Croft about the nature of the relationship between members of the Board and staff members and the complaints about the grievance process. That a Regional Director of the Department had become aware of the rumour was a new dimension to its existence, elevating it to an importance that imposed a duty on the Appellant to convey its existence to the Chairperson. Equally the Chairperson had a reciprocal interest in receiving the information. To allow the Chairperson to remain ignorant of the rumour when it had been raised by staff of the CMA and discussed between a Board Member and a Regional Director of a Department that had certain supervisory functions over the CMA would have been in breach of the Board member's duty to inform the Chairperson of information relevant to matters that were clearly to be the subject of investigation by the Department and possibly by ICAC.

53 I am of the view that the existence of the rumour that the Respondents were having an affair was relevant and sufficiently connected to the privileged occasion as to attract the defence of qualified privilege at common law. 54 I am satisfied that the trial judge fell into error in failing to find that the publication of the "rumour" to Mr Croft was an occasion that attracted the defence of qualified privilege. 55 I should deal with one aspect of the matter that was not the subject of the trial judge's reasons. However it was raised during written and oral submissions on the appeals. It was that the Appellant conveyed the information to Mr Croft as a fact - that it was "common knowledge" among people in the CMA that the Respondents were having an affair - rather than as a rumour or an allegation. As pointed out by the trial judge, although the question that went to the jury contained the words "common knowledge", Mr Croft gave evidence that the Appellant said that it was "well known": [WB 27; par 35]. As I have already said, Mr Croft also gave evidence, in cross-examination, that the Appellant used the expression "widely known": [WB 115]. The trial judge concluded that the difference between the expression "common knowledge" and "well known" was of no relevance: [WB 27; par 35]. 56 Mr McHugh submitted that the expression "common knowledge" conveyed that this was what people were saying: (tr 2). He asked rhetorically, "How else can my client have been able to say that something was widely known, other than because people are talking about it?": (tr 24). It seems to me that to say that a particular matter is widely known, is well known or is common knowledge, is to convey that the matter is true, not that it is a rumour or something that people are talking about. This was not a statement that there was a widespread rumour that the Respondents were having an affair. This was a statement that the members of the CMA knew that the Respondents were having an affair. 57 Mr McHugh submitted that even if it is accepted that the Appellant conveyed the affair as a fact rather than as a rumour, this was undoubtedly an occasion of qualified privilege, and the matter of conveying the affair as a fact would then need to be dealt with in respect of the question of malice: (tr 25). He submitted that given that the nature of the occasion was driven by the fact "that people are saying this, it is irrelevant whether it is a fact or not a fact, ultimately, to the existence of an occasion": (tr 25). The question whether an occasion can be privileged when a person makes a statement of fact if that person does not believe the truth of the fact was dealt with in the passage from Clark v Molyneux referred to above. In that case the defendant had written a letter in which he used expressions in excess of the communications he had received. He was informed that the plaintiff had left the army through some trouble at cards, but had published that the plaintiff was expelled from the army for cheating at cards. He was informed that the plaintiff had led an irregular life at Cambridge but had published that he had led a profligate life at Cambridge. Similarly, in the present case the Appellant used expressions in excess of the communications she had received. She had been made aware of a rumour that the Respondents were having an affair and in the case of Mr Mills, that he "believed" the Respondents were having an affair, and the jury found that she had communicated to Mr Croft that it was common knowledge among people in the CMA that the Respondents were having an affair. 58 The Appellant agreed in cross-examination at the trial that when she spoke to Mr Croft on 8 April 2005, she did not know that it was "well-known" among members of the CMA that the Respondents were having an affair: [WB 638]. It was not suggested to the Appellant that she had intentionally elevated a rumour to a fact in her discussion with Mr Croft. However counsel for the Respondents submitted to the trial judge that in respect of the Statement, the Appellant: (1) accepted that she did not believe "a word of it"; (2) had no idea one way or the other whether the affair was common knowledge among people in the CMA; (3) had only spoken to three people and Ms Chittenden; and (4) spoke to Mr Croft in unqualified terms without saying any of the matters in (1) to (3): [WB 728-729]. 59 During final submissions at the trial, counsel for the Appellant submitted that the existence of "the accusation" was of particular importance to the question of the privilege. The following exchange took place [WB 739]: LYNCH: … If the accusation is circulating - as the evidence disclosed that it clearly was - then publication of the rumour to the chairman clearly was of genuine interest and potentially - subject to what Mr Croft did, if anything - of potential value to the organisation and indeed to the plaintiffs. HIS HONOUR: Yes. Rumour is as dangerous as the fact. LYNCH: Yes, your Honour. It's a damaging rumour. The organisation's standing is adversely affected … Indeed, the terms of the imputation - the unprofessional imputation - in a way it acknowledges that two people in that position having an affair amounts to unprofessional conduct, then that sort of rumour if possible needs to be dispelled so far as it can be. HIS HONOUR: A rumour is worse than the fact. LYNCH: They usually are your Honour. 60 This was the only discussion in relation to the difference between fact and rumour during final submissions. It appears from this exchange and the approach the trial judge adopted in the Judgment referred to below, that his Honour concluded that it was unnecessary to analyse the difference between conveying the affair as a fact or a rumour. Although the trial judge said that he would "proceed on the basis of the jury's finding": [WB 27; par 35; WB 28; par 38], he proceeded on the basis that what was conveyed was the rumour that the Respondents were having an affair. That is clear from various passages in the judgment including that the trial judge was not satisfied that the Appellant "disclosed the rumour to Mr Croft as a result of her conversation with Mr Hart": [WB 27; par 37]; and that this was not to say that the Appellant did not nevertheless believe it was her duty to "tell Mr Croft about the rumour": [WB 27; par 37]. The trial judge also restated the "the history and currency of the rumour" to demonstrate that by 8 April 2005 the "rumour was, at least among the CMA community but probably beyond it, widespread": [WB 29; par 42]. The trial judge analysed how and when the "rumour" was spread: [WB 30; pars 47-49]; and noted the acknowledgement by counsel for the Appellant that "a rumour of the type in question" would be hurtful to the plaintiffs: [WB 31; par 51]. His Honour referred to: Ms Cush's reaction to Mr Croft telling her that the Appellant "had told him about the rumour" on 8 April 2005: [WB 33; par 63]; Mr Boland's reaction when "he heard the rumour": [WB 33; par 64]; and the profound effect on Mr Boland being compounded by his knowledge of the upset that "such a rumour" would cause his wife: [WB 34; par 68]. 61 No party in the appeals has claimed that the trial judge fell into error in failing to deal with the matter on the basis that the Appellant had elevated the rumour to fact. However there was a submission put by the Respondents at trial as outlined above, that relied on the publication of the fact, that is, that it was well-known that the respondents were having an affair, without qualification in support of the submission that such a statement was foreign to the occasion and therefore not covered by the privilege. This was not dealt with by the trial judge on the basis that even if the occasion were privileged then malice would defeat it. 62 Additionally the Respondents submitted that in respect of malice, there was a case put at trial that was not dealt with by the trial judge in relation to the Appellant's improper motive, an intention to harm the Respondents. I will deal with this matter later in the judgment. Ground 2: Onus of Proof 63 In the first sentence of paragraph [75] of the Judgment the trial judge said that for the Appellant "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". The Respondents submitted that although this statement was inelegant and perhaps clumsy, what the trial judge was intending to convey was that the Respondents would discharge their onus on malice, unless there was evidence to show that the Appellant had acted properly in publishing the defamatory statements and that such evidence would naturally come forward from the Appellant. It was submitted that when this sentence in paragraph [75] is read with paragraph [73], it is not possible to conclude that within a half page of judgment, his Honour moved from a clear and correct statement of the onus to a reversal of onus. It was submitted that notwithstanding the apparent reversal of the onus in that sentence, there was no actual reversal of the onus of proof. 64 It is true that in paragraph [75] of the Judgement the trial judge cited relevant passages from Roberts v Bass in relation to malice defeating the defence of qualified privilege. However it was after that citation that his Honour embarked upon what purported to be the application of the principles to the facts of the case. It was then that his Honour reversed the onus in stating that the Appellant "would need to show that she had otherwise acted properly in the bringing of the information to Mr Croft's notice" to be in a position "to assert that the qualified privilege was not lost because of malice": [WB 35; par 75]. His Honour concluded correctly that he was entitled to look at the Appellant's conduct outside the meeting with Mr Croft on 8 April 2005 to assist him in determining whether the Appellant "had acted with or without a proper motive". However his Honour then reverted to an analysis of whether there was an "occasion" in concluding that: (a) he could "not see how, having already told other people about the rumour in clearly not qualified circumstances" the Appellant "could create a qualified circumstances with Mr Croft, in particular absent any disclosure by her that the rumour had already been spread to others and by others"; and (b) "the previous dissemination of the rumour by" the Appellant "would probably affect the creation of the necessary circumstance to ground the qualified privilege": [WB 35; par 75]. 65 The trial judge said that he had "already accepted" that the Appellant "spread the rumour to Ms Chittenden and Mrs Cross" and that the spreading of the rumour 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": [WB 35; pars 75-76]. His Honour did not analyse in any detail what was discussed at the meeting between the Appellant and Mr Croft and decided the occasion question adversely to the Appellant only on the basis that she had spread the rumour prior to the meeting and she had failed to inform Mr Croft that she (and others) had done so. The fact that others had spread the rumour prior to the meeting would not be a proper basis for a finding that the meeting was not an occasion of qualified privilege. Rather it would favour a finding that the meeting was such an occasion on which a member of the Board of the CMA would have a duty to inform the Chairperson of the CMA of the existence of the rumour, it having been spread by others and affecting the CMA's position, with the Chairperson having a reciprocal interest in receiving that information. The fact that the Appellant had spread the rumour, even if that finding be accepted as correct, would not be a basis for denying the existence of the occasion, but would be relevant as to whether the Appellant was motivated by an improper purpose in perpetuating a rumour which she did not believe to be true, as opposed to knowing it to be false. 66 Although the trial judge referred correctly to the principles governing the question of malice it seems to me that he reversed the onus of proof and focussed on what the Appellant had failed to establish rather than on what the Respondents had established in particular, whether they had proved that the Appellant's dominant purpose was actuated by an improper motive. 67 I am of the view that his Honour fell into error in reversing the onus and then conflated the analysis of whether there was an occasion, with the analysis of whether the Appellant was motivated by an improper motive. The trial judge's failure to approach the matter in the manner suggested in Bennette v Cohen and/or Aktas probably contributed to the conflation of the issues of whether there was an occasion with the question of malice and the inappropriate reversal of the onus of proof. Ground 3: The Appellant's Belief 68 As a matter of law, "malice means a motive for, or a purpose of, defaming the plaintiff that is inconsistent with the duty or interest that protects the occasion of the publication. It is the motive or purpose for which the occasion is used that is ultimately decisive, not the defendant's belief in the truth of the matter": Roberts v Bass (2002) 212 CLR at 32-33 [79] per Gaudron, McHugh and Gummow JJ. Accordingly "neither lack of honest belief nor knowledge of the falsity ipso facto destroys a defence of qualified privilege": Roberts v Bass at 34 [83]. 69 In paragraph [71] of the Judgment the trial judge referred to the fact that the Appellant "did not believe" the allegation or rumour "was true". The two passages of the transcript identified in paragraph [71] were in the following passages of cross-examination of the Appellant [WB 632 and 639]: Q. At the time you had this conversation with Mr Hart, you did not believe that the affair was occurring? Is that right? A. That's right.

Q. Now, when you spoke with Mr Croft, you knew, didn't you, that the source of the rumour that you were passing onto him was unreliable, didn't you? A. The people that had raised these issues with me, to my understanding, were fairly responsible people. They were not what I would call unreliable.

Q. But you didn't believe it. A. That's right, and --

Q. So it must follow, may I suggest, that when you were told these things, you thought it must be unreliable. A. No. As I said, I had huge dilemmas one way or another about a lot of things, and I couldn't establish that reliability or otherwise.

Q. Mrs Dillon, if you didn't believe that the affair was occurring, it must follow, must it not, that what you were told lacked any credibility? A. It lacked a weight of credibility, but I'm not too sure about any credibility.

Q. Let me see if we can agree on this, then: when you spoke to Mr Croft, you understood that the veracity of what you had been told about the existence of the affair was seriously in question. A. I don't know about seriously in question, but I would say that it was questionable.

Q. Well, the veracity of what you were told about the existence of this relationship was in serious doubt. Do you except that? A. I can't accept "serious doubt".

Q. And what observations did you make about the general manager and Mr Boland prior to the conversation with Mr Croft on 8 April 2005? A. Just observations in relation to when we were at meetings and things like that.

Q. Well, did you draw any conclusions from those observations about whether they were having an affair or not? A. Not specifically.

Q. Well, at all? A. Well, I would have - in relation to an affair, I don't believe that I had any evidence of an affair, as I said. 70 In Roberts v Bass (2002) 212 CLR 1 Gleeson CJ observed that the kind of malice that defeats a defence of qualified privilege at common law "is bound up with the nature of the occasion that gives rise to the privilege": at 11 [8]. In that same case Gaudron, McHugh and Gummow JJ said: 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. In Barbaro v Amalgamated Television Services Pty Ltd , Hunt J said that "[i]n some of the older authorities, an absence of honest belief on the part of the defendant is treated merely as some evidence of an indirect motive which alone is said to constitute express malice, but the better view, in my opinion, is to treat the two as different kinds of malice". His Honour cited no authority for this novel proposition. Some years later in Hanrahan v Ainsworth , Clarke JA said that, since Horrocks , "it has been accepted that if it is proved that a person has made a defamatory statement without an honest belief in its truth or for a dominant improper purpose … malice will be made out". 78 The knowledge and experience of Hunt J in defamation matters is well recognised. But with great respect to his Honour and Clarke JA they erred in asserting that lack of honest belief defeated a defence of qualified privilege. There is no basis in principle or authority for treating knowledge of falsity or lack of honest belief as a separate head of, or equivalent to, malice. In the law of qualified privilege, the common law has always regarded malice as the publishing of defamatory material with an improper motive. Knowledge of falsity is "almost conclusive evidence" that the defendant had some improper motive in publishing the material and that it actuated the publication. That judges have treated knowledge of falsity as almost conclusive evidence of malice is no ground, however, for treating it as a separate head of, or equivalent to, malice. In some circumstances, lack of honest belief in what has been published may also give rise to the inference that the matter was published for a motive or purpose that is foreign to the occasion of qualified privilege. Nothing in Lord Diplock's speech in Horrocks supports treating the defendant's knowledge or lack of belief as a separate head of, or equivalent to, malice. Indeed Lord Diplock expressly said that, if it is proved that the defendant did not believe that what he or she published was true, it was "generally conclusive evidence" of improper motive.

79 As we have said, malice means a motive for, or a purpose of, defaming the plaintiff that is inconsistent with the duty or interest that protects the occasion of the publication. It is the motive or purpose for which the occasion is used that is ultimately decisive, not the defendant's belief in the truth of the matter. …

99 In some cases, proof of lack of belief will not even be evidence from which an inference of malice can be drawn. Thus, the circumstances of the case may be such that the defendant is entitled to communicate defamatory matter even though he or she has no belief in its truth. In Clark , Bramwell LJ said "a person may honestly make on a particular occasion a defamatory statement without believing it to be true; because the statement may be of such a character that on that occasion it may be proper to communicate it to a particular person who ought to be informed of it". This passage was approved by Lindley LJ in Stuart v Bell where the Court of Appeal held that the defendant had a social or moral, but not legal, duty to report to the plaintiff's employer that the plaintiff was suspected of stealing.

71 In Gross v Weston (2007) 69 NSWLR 279 Hunt AJA, with whom Handley and McColl JJA agreed, referred to the criticism made of him by the High Court in Roberts v Bass and said that it had wholly convinced him of his own error. His Honour concluded that it was unnecessary to identify the improper motive where the plaintiff relies on the defendant's knowledge of falsity "as there can be no proper motive where the defendant had no duty to publish the matter complained of": at 298 [54]. His Honour also said: [44] The defendant's lack of belief in the truth of what was said must not be confused with improper motive (at 31 76). Where malice (improper motive) is the issue, the case for holding that mere lack of belief is not equivalent to knowledge of falsity or malice (improper motive) is overwhelming, because the ultimate issue is always whether the publication is made for a purpose foreign to the duty or interest that protects the occasion of the publication, not whether the defendant believed the matter to be true (at 36 89 and 36 89

[45] The defendant's lack of belief in the truth of the defamatory material may - with other evidence - give rise to an inference that the publication was actuated by malice [improper motive]. 72 Mr McHugh submitted that although it is a delicate distinction, the difference between a lack of belief that the rumour was true and knowledge that the rumour was false, is an important one. In the present case the Respondents claimed the Appellant was actuated by an improper motive in that she did not honestly believe that the Respondents were having an affair: [WB 84]. Mr McHugh submitted that there was no proper specification in the Amended Reply of what the improper motive was and that this was a fatal flaw in the Respondents' cases on malice. Mr Alexis submitted that this point was not raised during the trial on the defence and therefore the Appellant should not be allowed raise it on appeal. There is force in this submission, however I will deal with the point because it has been fully argued by all parties. 73 I agree with Mr McHugh that there is an important distinction between the concepts of a lack of honest belief that the rumour or allegation was true and knowledge that the rumour or allegation was in fact false. In the former situation the rumour could be true notwithstanding the individual's belief that it was not true or belief that it was false. That is not so in the latter situation because the individual has knowledge that the rumour is false. On this aspect of the matter the trial judge referred to the fact that the Appellant "did not believe it was true": [WB 34; par 71] and "her belief that the allegation was not true": [WB 35; par 76]. These findings fall into the former category not into the latter category of knowledge that the rumour or the allegation was false. 74 If the Respondents had relied on and proved a claim that the Appellant knew that the rumour was false, then there would have been no need to identify the motive: Gross v Weston, per Hunt AJA at [54]. However the Respondents did not make such a claim. They particularised a lack of honest belief that the Respondents were having an affair with other particulars including: a failure to make enquiry with the Respondents; a lack of honest belief that it was common knowledge among people in the CMA that the Respondents were "in fact" having an affair; a failure to make enquiries with the CMA to see if it was common knowledge; and a lack of belief that any affair between the Respondents had any adverse impact on the workings of the CMA: [WB 84-85]. On its own, a lack of honest belief cannot amount to malice: Gross v Weston, per Hunt AJA at [44]; however a lack of honest belief combined with other factors may amount to malice. 75 The other factor that satisfied the trial judge that malice was established was "the spreading of the rumour" by the Appellant. If the finding of the spreading of the rumour falls away then the conclusion that the Appellant was motivated by malice would be based only on the lack of honest belief rather than knowledge of falsity and would not be sustainable. Ground 4: Spreading the rumour 76 The trial judge "accepted" that Mrs Dillon spread the rumour to Mrs Cross: [WB 35; par 75]. Mr Alexis candidly conceded that the Respondents could not support this conclusion and accepted that the trial judge fell into error in failing to have regard to Mrs Cross' evidence outlined earlier that Ms Chittenden informed her of the rumour. That leaves only the finding that the Appellant spread the rumour to Ms Chittenden. 77 The Appellant contended that there are a number of problems with the trial judge's reasoning in respect of this finding. The first is that in paragraph [33] of the Judgment the trial judge extracted the evidence of Ms Cush in which she claimed that she asked Ms Chittenden whether she had heard anything about an affair between herself and Mr Boland and that Ms Chittenden responded "yes, Meryl told me": [33]. The trial judge said that the significance of that version, compared to the Appellant's evidence, was that "the information came from Mrs Dillon rather than Ms Chittenden".

78 The trial judge observed that Ms Chittenden was not called to give evidence in the trial on defences and damages and although Exhibit 9, Ms Chittenden's statement, was tendered to establish "an item of chronology", the Appellant "must bear its contents which contradict her evidence". The Appellant's evidence was also extracted earlier in the Judgment in which she claimed that Ms Chittenden had said, "Amanda really likes Les": [31]. Although the trial judge concluded that it probably did not matter whether it was Ms Chittenden or the Appellant who suggested the presence of an affair, because the rumour had become widespread, his Honour concluded that, "to the extent that it is important I accept Ms Cush's version as corroborated in Exhibit 9". Accordingly the trial judge rejected the Appellant's version which amounted to a denial that she spread the rumour to Ms Chittenden, on the basis of an unsworn, untested statement made by Ms Chittenden. Notwithstanding the finding that it probably did not matter, the trial judge placed particular emphasis on the Appellant spreading the rumour to decide that she was actuated by malice. 79 The Appellant submitted that the trial judge fell into error in: (a) relying upon the evidence of Ms Cush because it is hearsay; and (b) utilising the statement in Exhibit 9 as corroboration for Ms Cush's version. The Appellant submitted that the use of the statement as proof of the truth of the terms of the conversation is prohibited by reason of the jury's negative answer to the question as to whether such a conversation occurred. 80 The Respondents called Ms Chittenden to give evidence in the s 7A trial. In her evidence-in-chief Ms Chittenden said that she had a conversation with the Appellant in January or February 2005 when the Appellant was driving her back to Moree after a Board meeting in Inverell. Ms Chittenden gave evidence that the Appellant said, "what do you think about Les and Amanda, they seem to be getting close, I think they might be having an affair": [WB 144]. In cross-examination Ms Chittenden said that she could only recall travelling with the Appellant on one occasion [WB 147]. She agreed she had a conversation with the solicitor acting for the Appellant, Mr Burke, in August 2006 in which she said she did not recall the time and date of the conversation with the Appellant but that it happened when they were coming back from a Board meeting: [WB 150]. She recalled preparing a statement in which she suggested the conversation occurred in February 2005 but that at a later time she was "not sure" about that. She gave the following evidence [WB 151-153]: Q. So initially you thought it was on or around February, subsequently you thought it was perhaps February, perhaps January? A. That's right.

Q. Did you tell Mr Burke that you weren't sure of the date that it occurred? A. Yes.

Q. Did you also tell Mr Burke that the conversation, the discussion that was subject of these defamation proceedings, happened on an occasion when you were coming back from a Board meeting with Mrs Dillon? A. Yes.

Q. Did you also tell him that you had travelled to and from board meetings with Mrs Dillon on two or three occasions and possibly more? A. Yes.

Q. Did you also say that on each occasion the trip was about or approximately one and a half hours each way? A. Yes.

Q. Did you say that you and Mrs Dillon would talk constantly during those journeys? A. Yes.

Q. Did you also say not all of the discussion was about work, as you discussed a whole range of things? A. Yes.

Q. Did you also mention to Mr Burke that on one occasion Mrs Dillon had said that she was very pleased that you had got the job? A. I cannot recall telling him that.

Q. You told Mr Burke what you recalled was the conversation that these proceedings concerned (sic) about, did you not? A. I can't remember.

Q. Did he not ask you what were the words spoken, about the discussion? A. I can't remember.

Q. What I suggest you said to Mr Burke was this, first of all "What do you think about Amanda and Les?" Remember telling him that was part of the conversation? A. I don't recall telling him that.

Q. From the words he used he was trying to find out what you recall Mrs Dillon had said that gave rise to the defamation action, that was what he was talking about, was it not? A. I can't recall.

Q. Did you say to him, "They seemed to be getting very close" or "seem to be getting close"? A. I don't remember.

Q. Did you say to Mr Burke that you couldn't remember what was said prior to any conversation about an affair? A. I'm not sure.

Q. Can you remember now what conversation occurred which preceded the comment you've said Mrs Dillon said about the affair. A. No.

Q. You can't remember any subject of discussion that took place prior to you say Mrs Dillon making these comments about Les and Amanda? A. No.

Q. You have no recollection of what followed after these words were spoken as you recall? A. No. 81 The question which the jury answered "No" was whether the Respondents had established that: On either 21 January 2005 or 18 February 2005, the [Appellant] said to Michelle Chittenden in the following words, or words substantially the same as them, the first matter complained of "what do you think of Les and Amanda, they seem to be very close. I think they might be having an affair." 82 In Mr Boland's trial on defences and damages his daughter, Mrs Phillips, gave evidence relevant to his hurt feelings [WB 530-535]. Mrs Phillips also gave evidence in relation to her observations of Mr Boland at a time that she visited Moree and he informed her of the rumour. In cross-examination, Mrs Phillips was not able to identify with precision the date of her visit to Moree. To assist her with that assessment counsel for the Appellant showed Mrs Phillips Ms Chittenden's statement that had been witnessed by Mrs Phillips on 12 September 2005. Mrs Phillips agreed that the document helped her memory and she was able to identify the date on which she visited Moree as around 12 September 2005. At the conclusion of her evidence counsel for the Appellant tendered the statement. It became Exhibit F but subsequently the trial judge marked it as Exhibit 9 [WB 540 and 655]. 83 Ms Chittenden's statement [Exhibit 9] was in the following terms: Around February 2005 I was travelling from Inverell to Moree after a board meeting for the Border Rivers-Gwydir Catchment Management Authority with board member, Meryl Dillon. During general conversation Meryl Dillon stated that she thought Les Boland (Board member) and Amanda Cush (General Manager) could be having an affair. 84 When Ms Chittenden's statement was tendered and became Exhibit 9, there was no application to limit the use of that evidence under s 136 of the Evidence Act 1995 (NSW) or otherwise. 85 In final address at the trial counsel for the Appellant submitted that there was no substance to the Respondents' submission that it was probable that the Appellant had "pedalled the rumour" to Ms Chittenden because the trial judge had heard from the Appellant, had not heard from Ms Chittenden but had read her transcript in the s 7A trial which, it was submitted, demonstrated that Ms Chittenden was not a reliable witness. The trial judge then referred counsel for the Appellant to Exhibit 9 and said that he was "stuck with it". Counsel for the Appellant then submitted that there was no question that at one stage Ms Chittenden asserted that the conversation had taken place but that, when tested, was unable to maintain it and by its negative answer to the question, the jury found that the conversation did not take place . His Honour said [WB 764]: Well, you see, you've relied on specific words from time to time. Now, if we look at the question put to the jury in relation to Ms Chittenden, they are different to the words alleged by Ms Cush and in - I suppose they're fairly close to the words in the statement, but they're not exactly the same. 86 Counsel responded [WB 764]: No, your Honour. But I think they both made reference to an affair, and that word is the only word that gives rise to the sting of any imputation. And that's the word that Ms Chittenden was unable to say, under oath, whether it was said or not.

87 Ms Cush's version to which the trial judge referred came from a series of questions asked in evidence-in-chief to support Ms Cush's claim of hurt feelings: [WB 493]. However the Appellant submitted that the trial judge fell into error in relying upon Ms Cush's hearsay evidence as a basis for his finding that the Appellant spread the rumour. It would appear that the trial judge was concerned with the status of that evidence because he looked for corroborative evidence that he concluded was available in Exhibit 9. It appears that but for that corroboration the trial judge may not have been willing to accept what he described as Ms Cush's "version". 88 The Amended Statement of Claim in each of the Respondent's cases in the District Court included the following: 3 On either 21 January 2005 or 18 February 2005, in the course of travelling by car to Moree from Inverell the defendant said to Michelle Chittenden words to the effect of: "what do you think of Les and Amanda? They seem to be very close. I think they might be having an affair" (The first matter complained of) 89 After the jury answered "no" to the question as to whether the Respondents had established that such words, or words substantially the same, were said, judgment was entered in each case on 24 June 2009 in the following terms: Judgment for the defendant on the cause of action pleaded in paragraph 3 of the Amended Statement of Claim. 90 The Appellant submitted that it was impermissible for the trial judge to use a statement that the jury had found was not made as corroboration for a hearsay statement of another person. It was submitted that it was not open to make a finding that would contradict what the jury had found: Blair v Curran (1939) 62 CLR 464. 91 The Respondents' causes of action were the publication of the matters complained of by which defamatory imputations were conveyed. The first matter complained of was the statement allegedly made by the Appellant to Ms Chittenden in the words pleaded or words substantially the same as the words pleaded. The question whether the matter complained of was published by the Appellant to Ms Chittenden - or in other words whether the conversation took place - was tendered to the jury for decision. The jury found that the Respondents had not established the causes of action in that they had not established that the Appellant published the first matter complained of to Ms Chittenden as claimed. The Defamation Act provides: 9(3) Where a person has brought proceedings (whether in New South Wales or elsewhere) for defamation against any person in respect of the publication of any matter, that person shall not bring further proceedings for defamation against the same defendant in respect of the same or any other publication of the same or like matter, except with the leave of the court in which the further proceedings are to be brought. 92 Section 9(3) does not refer to whether the proceedings have been brought successfully or otherwise. However it is clear that the intention of the legislature was that once the matter complained of had been the subject of proceedings, no further proceedings could be brought against the same defendant in respect of the same or any other publication of "the same or like matter" without the leave of the Court. 93 Mr Alexis submitted that the judgment on the Respondents' causes of action as pleaded in paragraph 3 of the Amended Statement of Claim does not foreclose the use of the conversation between the Appellant and Ms Chittenden because the Appellant's counsel tendered Ms Chittenden's statement (Exhibit 9) without limitation. It was submitted that the trial judge was entitled to use the content of that statement to corroborate the evidence of Ms Cush to the effect that there had been a prior discussion with Ms Chittenden about that topic. It was submitted that the negative answer to the question by the jury brought the cause of action based on the first matter complained of to an end. However in the general body of evidence concerning prior discussion on the topic, the trial judge had available evidence from the statement in Exhibit 9 to make the finding in respect of Ms Cush's evidence. The Respondents emphasised that the trial judge did not make a finding that there was a publication of the first matter complained of, as pleaded in paragraph 3 of the Amended Statement of Claim, the subject of the Judgment entered on 24 June 2009. It was submitted that all that the trial judge did was to have regard to the contents of the statement in Exhibit 9 for the purpose of corroborating another piece of evidence. 94 It is clear that the Appellant's counsel relied only on that part of the statement that proved the date of Mrs Phillips' Moree visit. However he did not limit the tender to that section of the document. If the statement had been tendered by the Respondents to prove the date of Mrs Phillips' trip to Moree, the Appellant could have objected to the other parts of the document. It would have been open to counsel for the Appellant to seek an order under s 136 of the Evidence Act limiting the use of that evidence. 95 Section 32 of the Evidence Act deals with the attempt to revive memory in court. A witness is not entitled to use a document to try and revive his or her memory unless the court gives leave for this to occur: s 32(1). Should a witness be granted leave to refresh his or her memory from a document then the witness may, with the leave of the court, read aloud as part of his or her evidence, so much of the document as relates to the fact in respect of which the memory was revived: s 32(3). This process enables a witness to give evidence of part of a document relevant to a fact in respect of which memory has been revived whilst the balance of the document which was not used to revive the memory, is excluded from the evidence. The process under s 32 of the Evidence Act protects a party from having parts of a document that were not used to revive memory tendered against them. The section appears to relate to evidence in chief: Hadid v Australis Media Ltd unreported, NSWSC, Sperling J, 1 November 1996. 96 The Appellant's counsel did not limit the tender by editing the document or seeking a ruling in respect of the extent of the use of the document. It was not necessary for the Appellant's counsel to tender Exhibit 9 because Mrs Phillips, having revived her memory of the date of her visit to Moree by looking at the document, gave evidence that it was around the date on the document. I have no doubt that counsel intended to rely on only that part to which the witness had regard to prove the date of her visit, and not to establish a conversation which the jury had already decided had not occurred. 97 Exhibit 9 is not in identical terms to the conversation in respect of which the jury gave the negative answer. However, it obviously refers to the same occasion and the same conversation even though the words are slightly different. There is no mention in Exhibit 9 of the Appellant saying "what do you think of Les and Amanda, they seem to be very close". However the pivotal words in the question to the jury, "I think they might be having an affair" are in my view "substantially the same" as the words in Exhibit 9 that they "could be having an affair". I am satisfied that this was a conversation that the jury had found did not occur and it was not open to the trial judge to find it had occurred. 98 In any event the trial judge simply relied upon the contents of Exhibit 9 without regard to the balance of the evidence given by Ms Chittenden in the s 7A trial. Even if it were permissible for the trial judge to have regard to the content of Exhibit 9 it would have been necessary to consider the veracity of that statement having regard to the previous evidence of the maker of that statement and compare it to the Appellant's evidence and give reasons for preferring the content of the statement as opposed to the Appellant's evidence. No such reasons were given other than that the Appellant had to bear the contents of the statement. 99 I am satisfied that the trial judge fell into error in concluding, as he did in paragraph 34 of the Judgment that the Appellant had to "bear" the contents of Exhibit 9. I am also satisfied that the trial judge fell into error in using the contents of Exhibit 9 as corroboration for Mrs Cush's "version". That would leave only the evidence of Ms Cush as to whether the Appellant spread the rumour. I am satisfied that the evidence of Ms Cush cannot establish that the Appellant spread the rumour because it was based on hearsay in respect of a conversation that, as the jury found, did not happen. In those circumstances the only finding that remains is that the Appellant believed that "the allegation was not true": [WB 33; par 76]. This was not a finding that the Appellant knew the "allegation" was false. Notices of Contention 100 The Respondents filed Notices of Contention on 8 December 2009 in which they each claimed that the Judgment should be affirmed on the ground that they had established that the publication of the matter complained of was actuated by malice. The particulars of that claim in each of the Notices are identical. The first particular is that there had been and was animosity between the Appellant and the Respondents at the time of publication: [OB 13; par 3(a)]. That particular is unsustainable having regard to the findings of the trial judge that there was no such animosity. 101 The second particular is that the Appellant "had routinely disagreed" with Mr Boland on CMA Board and related matters: [OB 13; par 3(b)]. The trial judge found that both the Appellant and Mr Boland debated matters vigorously and that there was no evidence of animosity by reason of this conduct. The third particular is that the Appellant believed that Ms Cush ought not hold the position of General Manager with the CMA and would not support her position: [OB 13; par 3(c)]. Mr Alexis relied upon the email from Mr Croft to the Board members enclosing the Out of Session Business Paper in respect of Ms Cush's position. This was around the time that the Appellant had been telephoned by Mr Hart and had been advised of the serious allegations against Ms Cush including inappropriate claiming of expenses. The fact that the Appellant asked Mr Croft why it was urgent to consider the matter outside the usual sessions of the Board does not, in my view, suggest that the Appellant was actuated by malice in her conversation with Mr Croft on 8 April 2005. 102 The next particular is that the Appellant published the matter complained of at a time when she knew that Mr Croft was seeking Board approval/support for Ms Cush as the General Manager and there was no currency in the rumour concerning the affair between the Respondents: [OB 13; par 3(d)]. In so far as this particular deals with the Appellant's knowledge, it is a matter relevant to the case that the Respondents claim was put on malice but not dealt with by the trial judge. The Appellant was cross-examined as follows [WB 642]: Q. What I want to suggest to you that is that you didn't convey to him in any qualification - any suggestion that you didn't believe it because you wanted to raise a serious question about the integrity of the general manager so that the board would no longer support her. A. No. … Q. I want to suggest to you also that the reason why you conveyed what you did to Mr Croft without any qualification, without any suggestion that you didn't believe it, was because you also wanted to raise a serious question in Mr Croft's mind about the integrity of Mr Boland and his continued position on the board of the CMA. A. No. 103 In so far as the particular deals with a lack of currency to the "rumour", it cannot be sustained. It was only the week prior to the meeting with Mr Croft that the Regional Director, Mr Hart, had his conversation with the Appellant in which the rumour was mentioned. Mr Hart had also telephoned Mr Pitman as had his assistant, Ms Bate, to discuss the rumour in February 2005. There was certainly currency in the rumour as at 8 April 2005. The fact that the Appellant knew that Mr Croft was seeking Board approval and support for Ms Cush does not of itself seem to me to support a finding that the Appellant was actuated by malice. However it is a matter that when combined with other factors, may lead to a conclusion that the Appellant was motivated by malice. This would involve the evaluation of the Appellant's denial that she was motivated to damage the Respondents' standing with the Board. However, this is not a matter with which this Court can deal. 104 The next particular is that the Appellant did not support Mr Croft's requests for support for Ms Cush: [OB 13; par 3(e)]. That of itself does not seem to me to justify a finding that the Appellant was actuated by malice. However it is a matter that when combined with others factors, may lead to a conclusion that the Appellant was motivated by malice. The next particular is that the Appellant did not honestly believe that the Respondents were having an affair: [OB 13; par 3(f)]. I have already referred to the capacity of this particular to support a finding of malice. The difference between the Appellant's lack of belief that the Respondents were having an affair and knowledge of falsity of the rumour has already been addressed and will need to be further addressed on the re-trial of the matter. 105 The next particulars are that the matter complained of was unsubstantiated and that the Appellant took no steps to verify it before conveying it to Mr Croft: [OB 13; pars 3(g) and (h)]. There is no doubt that the Appellant did not take any steps to verify the matter and it is also true that the Appellant had not seen evidence to support the rumour. However that is not to say that the Appellant knew the rumour was false albeit it that she did not believe it to be true. 106 The next particular is that the Appellant did not honestly believe that it was common knowledge amongst people in the CMA that the Respondents were having an affair: [OB 13; par 3(i)]. This was not addressed by the trial judge because his Honour approached the matter on the basis that it was "the rumour" rather than "the fact" that was published. It is a matter appropriate for consideration as to whether the Appellant was actuated by malice. 107 The next particulars are that the Appellant made the "bald" statement to Mr Croft without any qualification and did not inform Mr Croft of the identity of her informants: [OB 13; pars 3(f) and (g)] where they secondly appear]. The fact that the Appellant did not inform Mr Croft that she did not believe that the Respondents were having an affair does not mean that the Appellant was actuated by malice. However it is a matter that when combined with others factors, may lead to a conclusion that the Appellant was motivated by malice. A number of people had raised concerns with the Appellant in respect of the relationship between the Respondents and irrespective of whether the Appellant believed the Respondents were having an affair, it was a matter that the Appellant believed that she should bring to the notice of the Chairperson having regard to the fact that one Respondent was sitting in judgment on the other Respondent on the Grievance Committee. I do not regard the absence of the identification of the Appellant's informants as a matter of itself justifying a finding of malice. 108 The next particular is that the Appellant dishonestly said to Mr Croft that she was raising the concerns of Mr Hart to inform Mr Croft that it was common knowledge among people in the CMA that the Respondents were having an affair: [OB 14; par 3(j)]. The trial judge preferred Mr Hart's version of the telephone conversation with the Appellant because of the absence of any mention of the "rumour" in the memorandum dated 1 April 2005 that he wrote to the Director General of the Department. However it is clear that the "rumour" was "mentioned" during the telephone call between Mr Hart and the Appellant and it is also clear that Mr Hart had telephoned Mr Pitman to discuss the rumour not long before he spoke to the Appellant. The trial judge said he was not satisfied that the Appellant disclosed the rumour to Mr Croft as a result of her conversation with Mr Hart. However his Honour said: "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": [WB 27-28; par 37]. It does not seem to me that these findings could amount to a conclusion that the Appellant behaved "dishonestly" in speaking with Mr Croft. 109 The next particular is that the Appellant had no explanation as to why she did not inform Mr Croft that she had no evidence of the rumour and did not believe that it was true: [OB 14; par 3(k)]. The Appellant claimed at the trial that she had raised the matter with Mr Croft by reason of her conversation with Mr Hart. She was not cross-examined as to any other explanation she could give for raising the matter with Mr Croft because she adhered to her claim that Mr Hart's conversation with her caused her to raise it with Mr Croft. In those circumstances I regard this particular as unsustainable. The final particular is that the Appellant did not wish Mr Croft to act on the Statement she made to him: [OB 14; par 3(l)]. If that particular were established it would seem to support a finding that the Appellant was not actuated by malice in that she did not wish anything adverse to happen to the Respondents but rather simply to inform the Chairperson of the CMA of the existence of the rumour. 110 I am satisfied that it is not appropriate for this Court to make findings based on matters that require the evaluation of the Appellant's evidence and whether it should be accepted. I am of the view that there should be a new trial on the defence of qualified privilege at common law.

111 The orders that I propose in each appeal are as follows:

The appeal is allowed. 2. The orders of the District Court made on 25 February 2009 and entered on 12 March 2009 be set aside. 3. There be a new trial on the defence of qualified privilege at common law. 4. The Respondent is to the pay the Appellant's costs of the appeal, including the application for leave to appeal and is to have a certificate under the Suitors' Fund Act 1951 if so qualified.

112 I have had the benefit of reading in draft the comments of the Acting Chief Justice. I also agree that the matter should be mediated before any further trial particularly having regard to the fact that the Respondents already have the public concession and recognition that they were not having an affair and that there was no challenge to the quantum of damages awarded to them by the trial judge.

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

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