Dun v Macintosh [1906] HCA 24;

Dun v Macintosh [1906] HCA 24; - HCA 1906 case summary — Zoe

[28]

I may here remark that you cannot get a new trial for the rejection of evidence, if the evidence was admissible on some ground which was never put before the Court. It was suggested before us that this document, discovered in the defendants' possession, might have been evidence that in March they were aware of some facts favourable to the plaintiffs which they had suppressed, and that the suppression of those facts in March cast a reflected light on their motives in the previous December. It is sufficient to say that no such contention was put to the learned Judge at the trial, and if it was put to us on that ground alone we could not grant a new trial, because no such point was presented to the learned Judge at the trial. The grounds on which it was sought to be made admissible were that it was evidence of malice, since, having regard to the nature of the document (although it was merely found in the defendants' possession, and was not shown to have been published to anyone), it was evidence as an admission by them of some fact which would show that in the previous December they were actuated by motives of illwill to the plaintiffs. It is necessary to look at the document, which was not received in evidence, but was of course submitted to us. It begins "Substitute for all previous reports." Then it goes on "Macintosh & Sons, General Hardware Dealers." Then the names of the members "James Macintosh, John Macintosh Junior." Then it goes on: "John Macintosh Junior called at the Agency's office to-day and furnished the following information." Then the information which he gave is stated. It is more favourable than the reports published in the previous December, and on the whole it must be said to be a complimentary report, tending to relieve any person who read it from anxiety which might have been raised in his mind by the statements contained in the previous one. At the foot of it is this note: "Officers will please call in and cancel previous reports on this firm and supply above report in answer to new inquiries." Pausing there, the mere admission that in March 1904 the defendants were in possession of information favourable to the plaintiffs is not even evidentiary on the question whether they were in possession of that information in the previous December. The ground on which the learned Judges in the Supreme Court thought it was admissible was this: they referred to the words "Officers will please call in and cancel previous reports on this firm and supply above reports in answer to new inquiries," - only, it will be observed, in answer to new inquiries - so that unless Holdsworth, MacPherson & Co., who were the persons to whom the libel complained of was published, made further inquiries, the only information they would have would be that contained in the previous reports. Pring J. said[17]: "I think the jury might consider that the meaning of the report of the 11th March 1904 was that the defendants considered that they had furnished improper information in the previous reports which they were willing to correct if fresh inquiries were made of them." Suppose it did show that, and that the jury could come to the conclusion that the defendants on 11th March thought they had made a mistake in their previous report, and were willing to give correct information to anybody desiring to have it, how is that evidence of their state of mind in the previous December? In my opinion, if the jury had drawn such an inference they would not have been warranted in doing it. Put it this way: suppose, apart from this document, there had been no evidence of malice to go to the jury, would the putting in of that document turn the scale? It is obvious it would not. It throws no light whatever on the state of mind of the defendants in the previous December. So far from throwing any light adverse to defendants on that matter, the footnote read in the light of other evidence given in the case, to which the attention of the learned Judge does not seem to have been called, tends in a contrary direction. The direction the learned Judges rely on is the direction to their officers to call in and cancel previous reports. A direction to cancel previous reports can hardly be said either to show a desire to continue them in existence, or to show that when they were issued they were known to be untrue. The way in which the defendants' servants acted in obedience to that direction appears incidentally from a document bearing the same date as that memorandum on the document of the 11th March, namely, 24th March, which came from the defendants to a Mr. Crane, one of their subscribers. It ran thus: "24th March 1904: Mr. John Macintosh junior has furnished the Agency with some figures in regard to the firm's position, and you are requested to return to us all reports that have been furnished you, and if you desire a report to date to make application for same in the usual manner." I am of opinion that this memorandum, giving a direction to officers to cancel previous reports, shown to have been followed by the request to return previous reports, is no evidence whatever from which a jury could infer that in the previous December the defendants were actuated by a feeling of illwill, or could infer that the defendants knew in December that what they had said was not true. I think the evidence was properly rejected, not on the ground that it was not published, but on the ground that it was wholly irrelevant.

[41]

In this case only the subscriber who had made inquiries on the subject - whether on suggestion or not is immaterial - was furnished with information. That was furnished only to the applicant, and in respect of the interest which he and the defendants had in common as subscriber to and conductor - not of a journal - but of a means of information. In Foley v. Hall[23] it was very different. There, as I have said, anyone who became a subscriber might have the "change list," as it was called, and even if he had no interest whatever in the business or concern of the person whose name was published, nevertheless he was furnished with information as to the solvency and credit of that person, which was a distinct defamation of that person's credit. All who paid had the opportunity of obtaining information from this change list as to the transactions and credit of perhaps a hundred persons in whom they had no interest whatever. It might very well be argued that it was contrary to public policy to hold that in such a case there was a contractual duty (for it was that or nothing) to publish to subscribers such particulars of persons who might be utter strangers to them. That is not the present case, it is far removed from it, and in respect to the circumstances here proved I adopt the following clear and obviously correct remarks of Pring J.[24]: - "Now it is obvious that it is for the common convenience and welfare of a trading community that a merchant should be able to make inquiries with respect to the financial standing and credit of another with whom he is dealing or about to deal, and that the answers to such inquiries, if given honestly and bonâ fide, should not subject the person giving them to an action for defamation. If the law were otherwise, the position of traders would be intolerable, their business would materially suffer, and the whole community would in its turn feel the effects of the check thus imposed on trade and commerce. To say that an inquiry respecting the character of a servant is made on a privileged occasion, and that one respecting the character of a merchant with whom another is dealing is not, is to lose sight of the principle of law which regulates privileged occasions. The principle is that the law on such occasions repels the inference of malice." Pring J. has adopted in his judgment some remarks of Lindley L.J. in the case of Stuart v. Bell[25], so much dwelt upon in the argument before us. These have to be taken in connection with the quotations made by the learned Lord Justice in that case from the judgment of Erle C.J. in Whiteley v. Adams[26]. It may be noted that in that case there is a difference in the reports. In the Common Bench Report the matter is stated rather differently from the way in which it is reported in the Law Journal. Lindley L.J. followed the Common Bench Reports, and held himself in agreement with Erle C.J. to the fullest extent to which he stated the question of privilege. In the present case, it is not necessary, in my opinion, to discuss which view is right or which report is right, because, if the remarks of Erle C.J. are adopted in the more limited sense, they are amply sufficient as a criterion in this case. Erle C.J. brought the matter to a point in this way. "Do the circumstances show that the statement complained of was made in the discharge of some social or moral duty or that the speaker or the person addressed had an interest in making or receiving the communication?" That was the Common Bench Report. The Law Journal Report speaks of a "corresponding interest" in the sender and the recipient. Here, it seems to me, the question is not only one of interest, but as His Honor the Chief Justice observed, there was a clear contractual duty on the part of the defendants to make communications on the subject on which they made them, whether in the present case they mis-used the occasion of privilege or not. It is well to note that in Whiteley v. Adams[27], Erle C.J., referring to modern extensions of the law as to privileged occasions, says that they rest on the principle that it is to the general interest of society that correct information should be obtained as to the character of persons in whom others have an interest. Unless the value of that principle is greatly to be discounted, it is impossible to deny that it applies to the present case, that is to say, that the general interest of society requires that correct information should be obtained as to the business character of persons in whom others inquiring have a business interest.

[42]

To come to the other matter dealt with in the judgment of the Supreme Court, that is to say, the question of the rejection of the document of the 11th March 1904, which has already been read, I am sorry that I find myself unable to agree with their Honors. I cannot find any substantial ground on which Cohen J. would have been right in admitting this document in evidence. It is said that the jury might consider the meaning of this report to be that the defendants knew they had furnished incorrect information in previous reports which they were willing to correct. If the ground for the tendering of this document was to show the state of mind of the defendants, it was for the purpose of showing malice. If the jury had come to the conclusion that information furnished in the previous reports was incorrrect, it would not necessarily follow that it was improperly furnished. It is not for the defendants to show that they acted bonâ fide; the plaintiffs must prove malice, and as has been said, if they prove facts which are equally consistent with malice and with the absence of it, they practically prove nothing. If the occasion is a privileged one - as this was - then, in order to show that privilege was misused by reason of want of bona fides, it must be shown that a piece of evidence such as this is more consistent with the absence of bonâ fides than with its presence. The presumption being that there was bona fides, how such a document as this could be used for that purpose I cannot see, because, even if it is conceded that the information furnished in the previous reports was incorrect and misleading, still, once the occasion is shown to be privileged, if the information was honestly furnished - that is to say, if the plaintiffs can not show it was dishonestly furnished - the plaintiffs get no further. As was pointed out by Bramwell L.J. in the case of Clark v. Molyneux[28] "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. Can it be said that the person making the statement is liable to an action for slander?" This remark, of course, applies more particularly to the evidence which was admitted of rumours and reports: but where a person in a business relation with another has an interest and a duty in making to him a communication founded upon such information as he can fairly gather, and if that consists of a mere report, and is stated as a mere report, and honestly so stated, the privilege is not destroyed, if that piece of information turns out to be incorrect. It must be shown by the plaintiffs that in making the statement the defendants were not acting under the duty or corresponding interest which should have impelled them to make that statement. As has been pointed out, in the case of Stuart v. Bell[29] what was communicated by the defendant in reference to the plaintiff to the plaintiff's master, Henry Stanley, was a suspicion entertained by the police, on slender grounds, that the plaintiff had committed an act of theft at an hotel in which he had been previously staying. There was no statement by the defendant in that case that the plaintiff had stolen the watch; there was only the statement that this suspicion existed. It was held there that there was a duty, social or moral, imposed on the Mayor of Newcastle - who was the defendant - to make this communication, and, it being a fact that the suspicion existed, although it was not proved that the suspicion was justified, but the contrary, still the communication was held to be protected. I make these remarks as showing that a statement may be defamatory and a person, even if he does not believe it to be true, may make it honestly but only in the shape of a communication of a report or a rumour, and if that is within the bounds of the duty he has undertaken, and that is a duty recognized as within the law, he is still exempt unless malice is proved.

[43]

As to the further part of the case the jury answered two questions put to them by the Judge, those questions and the answers to them being: [His Honor then read the questions put to the jury and their answers, as already reported and continued:] I am with His Honor in thinking that these findings negative malice. But as the occasion was privileged, the burden of proving malice is on the plaintiffs. Bramwell L.J. in Clark v. Molyneux[30] said: - "If the defendant was actuated by some motive, other than that which would alone excuse him, the jury may find for the plaintiff." But is it for the defendant to prove his excuse or for the plaintiff to prove that he was actuated by some wrong motive? Lord Macnaghten in Jenoure v. Delmege[31], at the end of the passage quoted by His Honor, said: - "In such a case bona fides is always to be presumed." If bona fides in these defendants is to be presumed the labouring oar is with the plaintiffs to prove its absence. Of course that has to be taken with this explanation, as Lindley L.J. expressed it in Stuart v. Bell[32]: - "Malice in fact is not confined to personal spite and ill-will, but includes every unjustifiable intention to inflict injury on the person defamed, or in the words of Brett L.J. every wrong feeling in a man's mind." Lopes L.J. said in Pullman v. Hill & Co.[33]: - "If the Judge holds that the occasion was privileged, there is an end of the plaintiff's case, unless express malice is proved." If it is necessary to add anything further I would refer to the words of Cotton L.J. in Clark v. Molyneux[34]: - "It is clear that it was not for the defendant to prove that he was acting from a sense of duty, but for the plaintiff to satisfy the jury that the defendant was acting from some other motive than a sense of duty." Thus the question here is, was this finding of the jury, which has now been treated as a substantive finding by both sides, wrong in this sense, that it was a finding that no reasonable men could have arrived at; that is to say, was the evidence of malice so overwhelming that no reasonable men could have disregarded it to the extent of negativing malice in answer to the two questions which His Honor put to the jury? The evidence on the question of malice has been reviewed at length by His Honor, with whose statement I perfectly agree. There was possibly some evidence of malice - more than a scintilla - but even so, I am not of opinion that that entitles the plaintiffs to success in their appeal. Slender - and I think it was slender - as was the evidence of malice, I think that the jury might have found differently from what they have found; that is to say, it being open to them to take one of two views of certain conduct and writings of the defendants, if they had taken the view which sustained the inference of malice, we should have had a difficulty in saying that their finding should be disturbed; but as they have found the other way the difficulty is equally great. There is no doubt that there are some matters in the evidence - for instance, the cessation of favourable reports which had prevailed up till some months before, and the change to unfavourable reports - which, taken in connection with other circumstances of the case, such as the conversation between the defendants' agent or representative and one of the members of the plaintiffs' firm, might have justified the jury in saying that there was some resentment or spleen in the defendants which led them to give a report adverse to the credit of the plaintiffs. The jury have found that they have exercised as much care as possible, and it was open to them to find that. It was equally open to them to find that the defendants acted from a sense of duty to their subscribers, because, although the conduct of the defendants might have seemed equivocal, it is difficult to establish that it was spiteful. As the jury on the materials before them returned such findings as these, I cannot see how we can be called upon to disturb them. And, therefore, as I cannot accept the arguments of the plaintiffs in favour of sending this case down for a new trial, I think the defendants are entitled to succeed, and that judgment should be entered for them upon the findings of the jury.

[45]

I entirely concur in the opinion expressed by Pring J. when delivering the judgment of the Supreme Court, that the occasion was priviliged, and I adopt his reasons for that conclusion. On that part of the case, I do not think it necessary to do more than add something as to the reasons why the occasion was privileged. The law is so well established, and has been so clearly laid down in many cases, that I do not think it necessary to refer in detail to the authorities which have already been cited by my learned brothers, the Chief Justice, and Mr. Justice Barton. The law may be thus shortly stated: Wherever the circumstances are such that it becomes the duty of the defendant to state freely and fully what he honestly believes to be true of the plaintiff in reference to any particular matter, the occasion is privileged. It is for the Judge to say whether the occasion is privileged. But, even if the occasion is privileged, the defendant may lose the benefit of the occasion if the plaintiff shows affirmatively that the privilege has been maliciously used by the defendant. Malice may be shown by establishing either that the defendant has not made the statement in the discharge of his duty or has not made it from a sense of duty, or has made it knowing the facts stated to be untrue, or has made it with a reckless disregard as to whether the statement is true or false. If the plaintiff establishes any one of these alternatives, then the benefit of privilege is gone. In most of the cases in which the question of privilege has been discussed, the duties sought to be inferred from the circumstances have been duties of what is called imperfect obligation, duties which may be described as moral duties or social duties, rather than legal, but it always has been the law that, where the duty is a legal duty arising out of a contract or an employment, it is à fortiori a case in which the obligation to speak rests upon the defendant. I wish to mention two cases in which that phase of the matter has been referred to. In Toogood v. Spyring[35] Parke B. said: - "The law considers such publication as malicious 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." Again, in the case already referred to of Jenoure v. Delmege[36], Lord Macnaghten says: - "There is no reason why any greater protection should be given to a communication made in answer to an inquiry with reference to a servant's character than to any other communication made from a sense of duty, legal, moral, or social." So that the duty which puts upon the defendant an obligation to speak, may be a duty either legal, moral, or social. It appears to me unnecessary to discuss here whether there was any social or moral obligation upon the defendants to make the statement they made because it is quite clear that they were under a legal obligation to make it. The questions which we have to determine in this case very largely depend on the consideration of what that legal duty was. It is beyond doubt that a merchant or trader is entitled to make inquiries with regard to the credit of those with whom he is dealing. He may make those inquiries himself, or he may send his clerk or his servant to make them, and, if they are made by his clerk or his servant, it is the duty of the clerk or servant - a legal duty, arising out of his employment - to make communication of everything he knows, fairly and honestly with regard to the credit of the person about whom he is inquiring. If, instead of sending one of his own servants to make the inquiry, the merchant or trader chooses to employ a person or company carrying on the business of making these inquiries, it equally becomes the legal duty of that person or company to communicate to the employer all information which he honestly believes to be true, fully and freely, so far as his knowledge goes. There is no doubt as to the obligation of the defendants to communicate the information in this case, because that is what they expressly contract to do. I may say here that the form in which the information is sought altogether differentiates this case from that of Foley v. Hall[37].

[46]

The request by the person to whom the publication was made by the defendants is this: - "Give us in confidence and for our exclusive use and benefit in our business, viz., that of aiding us to determine the propriety of giving credit, whatever information you have respecting the standing, the responsibility &c. of ..." Then follows the name of the person about whom the information is to be obtained. Now, what is the duty of the person employed to make inquiry in a case of that kind? To determine that question we must first consider what is the kind of information procurable in such a case. These inquiries, from their very nature, can seldom be made directly of the person as to whose credit inquiry is being made. It may be that under the circumstances the person directly concerned and from whom the information first hand would naturally come is justified in refusing to give such information, and therefore, when a company or individual undertakes to obtain information with regard to another's credit, they must take the best means they can, direct or indirect, so long as the means are lawful to get the information. It may be that the only kind of information obtainable is general estimation, or prevalent rumours with regard to the credit of the firm. It may be that the rumours are in fact without foundation. At the same time it is the duty of the person who is making the inquiry to state what he has ascertained and honestly believes in regard to the credit and estimation in which the persons about whom the inquiry is made is held, even though his information may be founded on rumours. The duty arising from the defendants' contract with their employers was to furnish the best information obtainable in regard to the credit of the plaintiffs. Their duty in furnishing the information was, as I have said, to state fairly and honestly what they discovered and believed to be true with regard to the credit of the plaintiffs. They were in no way justified in stating what they believed to be untrue, nor in stating as fact that which was only rumour. They were in no way justified in making statements at all unless they made reasonable inquiries before the statements were made. If it were proved by the plaintiffs that the defendants did not make proper inquiries or made statements which they believed to be untrue, or stated as fact that which was only rumour, then there would be evidence of malice to go to the jury which would take away the privilege of the occasion. As there was a duty on the defendants, arising as I have indicated, to make a statement to their employers concerning the plaintiffs, it is clear the Judge ought to have ruled that the occasion was privileged; and, the Judge not having so ruled, there would, under ordinary circumstances be no alternative to the Court but to grant a new trial in order to have the question determined whether or not the defendant had lost the benefit of the privileged occasion by malice, using that expression in the sense I have explained. But, by reason of the course taken at the trial, that has become unnecessary, because the presiding Judge, in order to avoid the expense of another trial, obtained from the jury special findings on such matters of fact as were necessary to consider in determining whether the benefit of the privileged occasion had been lost by malice. If those findings, negativing, as they do, malice in the use of the privileged occasion, can be upheld, then, subject to the question of the admissibility of evidence, the defendants are entitled to have a verdict entered for them.

At a glance

Court

Decision date

Before

Source

Judgment (68 paragraphs)

Dun v Macintosh [1906] HCA 24; (1906) 3 CLR 1134 (2 May 1906)

Parties

Cases Cited (1)