Supreme Court Act 1935, s 32

First Defendant : Mr J T Schoombee & Mr S L Dworcan

Second Defendant : Mr J T Schoombee & Mr S L Dworcan

First Plaintiff : Mr J T Schoombee & Mr S L Dworcan

Second Plaintiff : Mr J T Schoombee & Mr S L Dworcan

Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 144 ALR 528

Andreyevich v Kosovich & Publicity Press (1938) Pty Ltd (1947) 47 SR (NSW) 357

Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183

Broadway Approvals Ltd v Odhams Press Ltd [1965] 2 All ER 523

Brown v Marron [2001] WASC 100

Chakravarti v Advertiser Newspapers Ltd (1998) 193 CLR 519

Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361

Cock v Hughes [2001] WASC 151

Cohen v McEvoy [2001] WASC 349

Consolidated Trust Co Ltd v Browne (1948) 49 SR (NSW) 86

FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479

Howden v Truth & Sportsman Ltd [1937] HCA 74; (1937) 58 CLR 416

Howe & McColough v Lees [1910] HCA 67; (1910) 11 CLR 361

Huth v Huth [1915] 3 KB 32

Lang v Willis [1934] HCA 51; (1934) 52 CLR 637

McKenzie v Mergen Holdings Pty Ltd (1990) 20 NSWLR 42

Morgan v Mallard [1997] SASC 6056; (1997) 68 SASR 184

Nixon v Slater & Gordon [2000] FCA 531; (2000) 175 ALR 15

Powell v Gelston [1916] 2 KB 615

Rigby v Associated Newspapers Ltd [1969] 1 NSWR 729

Robinson v Corse, unreported; SCt of WA; Library No 970004; 15 January 1997

Slipper v British Broadcasting Corporation [1991] 1 QB 283

State Bank of New South Wales Ltd v Currabubula Holdings Pty Ltd [2001] NSWCA 47; (2001) 51 NSWLR 399

Steele v Mirror Newspapers Ltd [1974] 2 NSWLR 348

Typing Centre of New South Wales Pty Ltd v Northern Business College Ltd (1989) 13 IP 627

Vinon Holdings Pty Ltd v Martin [2001] WASC 260

World Hosts Pty Ltd v Mirror Newspapers Ltd [1978] 1 NSWLR 189

1 HASLUCK J: The plaintiffs in these proceedings seek relief in respect of an article published by the defendants in September 1997 which is said to be defamatory. The plaintiffs responded to the article complained of by a circular letter dated 15 October 1997 and this, in turn, has led to the defendants seeking relief by way of counterclaim. The dispute between the parties arises out of the marketing of certain imported noodle products within the State of Western Australia. I must begin by describing the background to the dispute.

2 The first plaintiff, Fred Essey, is a director of the second plaintiff, All-Fect Distributors Ltd, being a company incorporated in New South Wales. He said in answers to interrogatories that he was the managing director. At all material times the plaintiff's three sons were directors of the company. It follows that although the second plaintiff is an unlisted public company, it was in many ways a family concern.

3 All-Fect is a distributor of food products throughout Australia with a number of its lines being imported from overseas. All-Fect's products are distributed within the State of Western Australia and the company is therefore obliged to comply with regulatory provisions established by Western Australian law. It seems that the business was previously known as Millers Distributing Co. The letterhead of the second plaintiff as at mid 1997 described the company as "All-Fect Distributors Limited trading as Millers Distributing Co".

4 The second defendant, Pinegate Holdings Pty Ltd, is and was at all material times a company incorporated in the State of Western Australia. It is known as GUYS and is the publisher of a newsletter called "Western Australian School Canteen News". The first defendant is a director of the second defendant and writes for Canteen News. Pinegate is a company that also distributes food products.

5 In or about November 1994 Mr Essey and Ms Harding attended the annual general meeting of the National Confectionary Wholesalers Association in New South Wales. On the defendants' case, at that meeting Ms Harding informed those in attendance of problems with the labelling of a particular confectionary product and the reason why the product did not comply with Western Australian law. Mr Essey conceded in his evidence at the trial that he was at the conference but said that he did not meet Ms Harding. He "saw" her at the conference but was not introduced to her and therefore did not have any significant association with her prior to the events giving rise to the dispute.

6 One of the products brought in from overseas by All-Fect was a product known as Mamee Noodles. Towards the end of 1996 the plaintiff ceased to handle this product. Thereafter, within Western Australia, the Mamee Noodles product was distributed by GUYS. The first defendant suggested in evidence that the financial returns to her company from distributing Mamee Noodles were insignificant. She said in her answers to interrogatories that the second defendant purchased Mamee Noodles from a wholesale food company and on-sold the product to various schools in Western Australia. The gross revenue generated by the distribution of the product during the 1997/98 financial year was $2,019.25.

7 The Malaysian company Carjen Food Sdn. Bhd. is the manufacturer of JJ Noodles being a product marketed for worldwide distribution. The Malaysian company is responsible for the information appearing on the label of the product. It seems that in or about May 1997 All-Fect became the distributor of this product within Australia. All-Fect arranged for JJ Noodles to be marketed in Western Australia by a local distributor known as Confectionary Distributors or CD's.

8 The letter from All-Fect to Mr Danny Pollard of Confectionary Distributors dated 9 July 1997 concerning the distributorship arrangement reads, in part, as follows:

"We take pleasure in confirming Confectionery Distributors as our exclusive distributors for Carjen products for Western Australia subject to the following conditions:

1. Confectionery Distributors will make the range available to all wholesalers in the state of W.A. at the same terms as they would buy from Millers Distributors:

a. Less than pallet qty. 15% w/sale discount.

b. Pallet qty. and above. 18.3% w/sale discount less 2% within terms discount.

c. FIS Metro delivery. Plus freight ex Perth country areas.

2. Confectionery Distributors to make their best efforts to penetrate all market opportunities throughout West Australia.

This agreement to be reviewed on a six monthly basis on performance."

9 In mid 1997, Jack Stein, a representative of All-Fect, delivered a box of JJ Noodle snacks to GUYS school canteen supplies. In or about June 1997 Ms Harding reviewed the labelling of the packet of JJ Noodle snacks delivered by Mr Stein which contained a used by date of 30 June 1998. It was part of the defendants' case at trial that in June 1997 Ms Harding informed Mr Stein of problems with the labelling on the packet of JJ Noodle snacks that she had reviewed.

10 In or about August 1997, Leanne Terenciuk, canteen supervisor of Perth Modern High School sent GUYS a sample packet of JJ Noodle snacks. The labelling on the packet was the same as that reviewed by GUYS in about June 1997.

11 I will not set out the entirety of the words and information appearing on the packet. At this stage, it will be sufficient to say that the ingredients were described as follows: "Wheat flour, Vegetable Oil (Palm Oil), Fresh Chicken Essence, Hydrated Plant Protein, Salt, Spices and Soya Sauce". The product was said to be manufactured by Carjen and packed for All-Fect Distributors Limited of 31-33 Parramatta Road, Lidcombe, New South Wales. A Nutrition Information Panel appears on the packet which describes the servings per package as 2.5 and the serving size as "12g". The panel indicates that the "energy" per serving is "61(Cal)".

12 I pause to observe that it was common ground at the trial that the packet weighed 30 grams. This is consistent with the notion that the packet contains 2.5 servings of 12g, that is to say; 2.5 x 12g = 30g. Evidence was led at trial by the defendants to the effect that within Australia the energy quotient of food products should properly be expressed in kilojoules.

13 In September 1997 Ms Harding wrote a piece for Canteen News and this was published by Pinegate in the September 1997 edition of the newsletter. It was a matter of controversy at the trial as to the manner in which the newsletter was published.

14 Ms Harding said in evidence that the newsletter was sent to approximately 200 school canteens in Western Australia - mainly primary schools - which canteens were existing customers of GUYS. The newsletter was enclosed with accounts sent to recipients and on the defendants' case no other publication was intended or occurred. The purpose of drafting and sending the newsletter to the local school canteens was to alert school canteen supervisors and managers to the importance of proper and accurate assessment of canteen food products and the need for them to take account of the labelling of such products.

15 Ms Harding said in her answers to interrogatories that approximately 178 copies of the September 1997 edition of the newsletter were distributed to canteens. She said further that:

"In addition some copies were available for customers of the First Defendant who visited the First Defendant's premises on a walk-in basis."

16 Ms Harding confirmed in her evidence at the trial that the newsletter could be picked up from the counter by customers visiting the defendant's premises. There was also evidence to this effect from a Ms Faranda.

17 The plaintiffs adduced evidence from a wholesale distributor that he chanced upon and read a copy of the newsletter in a school canteen. It is material to note that the format of the newsletter, which resembles a newspaper broadsheet, suggests that it was intended to reach a circle of readers beyond those individuals such as managers and bookkeepers who would usually attend to the payment of accounts. It would be immediately apparent to any reader in Western Australia that the makeup of the newsletter resembles the masthead of The West Australian newspaper.

18 On the plaintiffs' case, a factor in the defendants' decision to publish the article was Pinegate's role as a company marketing a competing product, namely, Mamee Noodles. The defendants denied this allegation. Ms Harding said in evidence that although she had met Mr Essey some years earlier at the Leura Conference. She did not know of his connection to the defendant company. In mid-1997 she spoke to a Mr Stein of All-Fect about the JJ Noodles product as a product that might be of interest to the defendant company for school canteens. She reviewed the product at that stage and drew Mr Stein's attention to certain discrepancies on the label and understood that he was going to have these matters sorted out. When Ms Terenciuk of the Perth Modern School canteen referred the JJ Noodles product to her sometime later she was annoyed to find that the labelling had not been corrected. This state of affairs prompted her to write a strongly worded review of the product for the GUYS newsletter.

19 I digress briefly to note that Mr Stein did not give evidence at the trial as he is no longer with the plaintiff company. Ms Harding was cross-examined vigorously about this aspect of the matter. She was referred to an affidavit sworn by her in these proceedings some years ago in which she purported to give an account of the events leading up to publication of the newsletter complained of but made no mention of a conversation with Mr Stein. Her affidavit refers simply to her husband having spoken to a sales representative about certain defects. Against this background, let me now turn to the contents of the newsletter.

20 The piece written by Ms Harding, being the words complained of in these proceedings, appear under two headings in what is described as the "Statewide Edition" of Canteen News for September 1997. The first heading is "The Healthy State". The second heading is "Health Thieves!".

21 Under the heading "The Healthy State" the author of the article refers to the fact that the Health Department of Western Australia is conducting an assessment of the nutrition policies and practices of the food industry in Western Australia. It is said that these are the policies and the plans made for the benefit of the whole of the State. Reference is made to Ms Harding of GUYS having been requested to participate in the research in late August. The comment is then made that protective legislation is "of less than no help if Western Australian companies cheat us of that protection." It is said further "By design (greed), to take our money and run, or by ignorance, there can be no excuse for any Western Australian company to sell, market or supply products, especially into schools, that are outside of the legal requirements that are set by law to protect us!"

22 Beneath the heading "Health Thieves!" the author goes on to say that on the same day "that Marlene participated in the research for the W.A. Health Dpt, Marlene was requested by a canteen supervisor to comment on a "new product" that looked like it might be suitable for schools."

23 The author of the article says further that "disappointment reigned" when the sample of the new product arrived at GUYS Morley warehouse and turned out to be a product that had "already been rejected by GUYS".

24 The author of the article goes on to say that a long stretch of the imagination would be needed to consider the product to be suitable for schools. She says that "illegal marketing through claims made on the packaging, and what GUYS considers to be down right cheating on the nutritional panel put the product outside any consideration it might have got on its true merits. And GUYS questions the very legality of the product."

25 The author says further that the legal position concerning food packaging and labelling is covered under the Health Act. Amongst other comments, the author puts the rhetorical question: "Can there really be any businesses in WA that are so greedy for profit - or so ignorant of the law relating to their business that they deliberately put people in danger by compromising the dietary information on foodstuffs they sell?" The author immediately answers her rhetorical question in the affirmative and goes on to say that this type of cheating has become such a common occurrence that unless something is done there is a danger it might be accepted as normal business practice. She then says that GUYS has chosen to use the offending packaging "to illustrate just how some manufacturers, importers and distributors attempt to cheat and profiteer with their illegal products. Especially at the expense of our children."

26 The author of the article reminds readers that the Western Australian Health Act has a very specific formula for the nutrition information on food packaging so that balanced and nutritional menu choices "in your canteen" can be made. She says that there is no legal requirement for manufacturers to put nutritional informative charts on their products but if they chose to do so then they must follow strict legal guidelines in showing just what the energy intake is from the product. The article refers to some of the requirements in more detail.

27 Towards the end of the article this passage appears:

"The cheating and illegally packaged J.J Noodles are imitations of the very acceptable and legally manufactured Mamee Noodles that have been around successfully for a very long time. Mamee Noodles are made, imported and sold by only reputable companies, who certainly would reject the opportunity of making a few extra bucks by taking on questionable products such as J.J Noodles."

28 The author of the article mentions that Mamee Noodles are made by a family company in Malaysia from Australian wheat. Mamee Noodles are so confident about their product that in the short term, GUYS will be offering samples to every child in WA primary schools on a roll out programme, with the permission of the school principal. GUYS is absolutely confident that Mamee Noodles has for many, many years formed part of a good wholesome balanced diet for students (and adults) "without resorting to cheating and illegal activity."

29 The author of the article goes on to say that GUYS is "pretty certain" that there will be a product recall on JJ Noodles in the relatively short term in order to protect the integrity of Western Australian health regulations. The author says further that any company that is actively selling the product in Western Australia should be utterly ashamed of their ignorance of food regulations and wonders aloud whether Canteen News should be canvassing for all food suppliers to be licensed in order to provide protection from "charlatans and cheats" who "put their own 'two bobs worth' before of our rights and our health". There is then a suggestion that the maker and distributor of the packet in question has deliberately understated the energy values of the product.

"Whether there is MSG, preservatives or artificial colour in the product, that contains Soya Sauce and Spices, is something that we would like to see on an official report from the Australian Government Analytical Laboratories, in view of the already compromised labeling? Perhaps one of the distributors in this State, or the importer would like to provide one for publication!"

31 It was common ground at the hearing that the newsletter included another page on which appeared a photographic image of the JJ Noodle packet bearing the heading "Under the Microscope". Various parts of the information on the package are marked up. The word "cheat" appears in bold print capital letters on three occasions with the following caption: "This pack was designed on a 30g single serve!"; "Should also show 256kj/2137kj"; "Calories must have kj value shown (4.19 times bigger)".

32 There is no explicit reference to the photographic page in the main text but it was said to form part of the words complained of. However, it is material to note an oblique reference to the marked up photographic image of the JJ Noodles packet in that portion of the text where it is said:

"To that end, GUYS has chosen to use the offending packaging to illustrate just how some manufacturers, importers and distributors attempt to cheat and profiteer with their illegal products."

33 I note also that although there was no explicit reference to Mr Fred Essey, or to his company All-Fect, in the main body of the text, there are at least three references to the product JJ Noodles. The photographic page reproduces that part of the printed packet in which the product is said to be packed for All-Fect Distributors Limited of 31-33 Parramatta Road, Lidcombe, New South Wales.

34 The first defendant in her answers to interrogatories acknowledged that she was the author of the article. She provided the original of the matter complained of to her assistant, Ms Susanne Rabbitt. Most of the words of the matter complained of were probably written on or about the last Thursday of September 1997. The second defendant was responsible for distributing the newsletter to the various school canteens.

35 The first defendant went on to say further in her answers that she did not know that Mr Essey was connected at all or in any way with the second defendant and did not intend the newsletter to refer to him. She conceded that before publishing the matter complained of she did not cause any tests to be carried out on the product JJ Noodles. She used "her own knowledge and experience to analyse the information on the packaging". She knew that including soya sauce in the list of ingredients was incorrect because soya sauce is not a generic ingredient and if the product did contain soya sauce, then it would have contained MSG, colouring and preservatives.

36 The answers to interrogatories addressed some additional questions concerning the first defendant's state of knowledge at the time she wrote the article and the source or information upon which various assertions in the articles were based.

37 The first defendant knew that the list of ingredients on the packaging of JJ Noodles failed to state that the product contained mineral salts because this appeared from the list of ingredients. She knew that the list incorrectly stated that the product contained fresh chicken essence because chicken essence cannot be "fresh" and further that "fresh chicken" essence cannot be an ingredient of dehydrated noodles. She knew that the quantity of protein stated in the list was incorrect because, in her opinion, the quantity of protein in the nutritional panel had been misstated due to the representation that each package of JJ Noodles contained 2.5 serves, where it was actually one serve.

38 Further, she knew from the application of her own knowledge and experience that one or more of the protein, fat, sugar or total kilojoule values were incorrect. She repeated this view in respect of the quantity of fat and sugars in the product, and in respect of the quantity of sodium also save that her belief concerning the incorrect quantity of sodium was supported by the inclusion of soya sauce in the list of ingredients. It was apparent from the list that the quantity of potassium had not been stated on the packaging.

39 It appears from the answers to interrogatories that the information or source which gave rise to the first defendant's knowledge was said to be "On the basis of the First Defendant's judgment and 30 years in the hospitality and catering industry, and reading the packaging". She contended that she had engaged in communications with the plaintiffs with regard to the proposed subject matter of the article prior to its publication in that she, as a director of the second defendant, discussed with Mr Essey the importance of Australian labelling requirements in relation to a new product produced by Nestle at the National Confectionary Wholesalers Association Conference on or about 4 to 6 November 1994 in the Blue Mountains, New South Wales. It is significant that no mention was made of her supposed conversation with Mr Stein in mid-1997.

40 In response to the question of what action was taken by her upon learning of the alleged breaches of the Health (Adoption of Food Standards Code) Regulation 1992, being a matter referred to in the article, Ms Harding said in her answers to interrogatories that she reported the alleged breaches to the Western Australian Health Department on 1 December 1997 and to the New South Wales Western Sector Public Health Unit on 5 December 1997.

41 Mr Essey was informed by one of his distributors that the September 1997 edition of Canteen News had made adverse criticisms of his company. Passages from the article were read to him by telephone. He said in evidence that he felt "furious." He referred the matter to his solicitors, the law firm Hassett Dixon.

42 The publication led to various exchanges between the parties. On 3 October 1997, the solicitors for the plaintiffs, Hassett Dixon, sent a facsimile to Ms Harding requesting responses in relation to a number of claims made by her in the publication. The letter reads in part as follows:

"We act for All Fect Distributors Ltd. sole distributors of J.J. Noodles.

We refer to your September 1997 publication of the West Australian School Canteen News and the highly defamatory imputations contained therein.

We are instructed to commence defamation proceedings, however, before so doing, we wish to know:

(a) what laws do you allege have been contravened by representations in the packaging of "the cheating and illegally packaged J.J. Noodles"?

(b) how is the packaging or composition of J.J. Noodles "outside the legal requirements that are set by law to protect us"?

(c) has their been a product recall on J.J. Noodles?

(d) on what basis do you say J.J. Noodles were "designed as a 30g single serve"?

(e) under what requirement "must" calories have a kj value on packaging?

We do not believe you can show any contravention of the provisions of a statute by our client. If this is so, and since your article plainly alleges illegality, it would appear that you have a case to answer.

Kindly advise as to what you are prepared to answer of the above and whether you are prepared to publish a retraction. In the event that you do not reply to this letter, it will be produced in Court in the question of costs."

43 On 7 October 1997 Ms Harding, as the author of the article, sent a facsimile to Hassett Dixon. She provided the law firm with the responses that they had requested. The relevant letter reads in part as follows:

(a) Health Act (1911) as amended.

(b) as set out in Health Act (1911) as amended.

(c) Guys was "pretty certain that there would be a product recall in order to protect the integrity of the WA Health Regulations" as soon as any responsible local distributor brought the breaches to the attention of the National distributor of JJ Noodles.

(d) (i) 30g pack sizes of snack food were specifically designed by major manufacturers (the standard set) "to enable youngsters to enjoy snack food without over indulging.

(ii) The single pellets of the product are displayed cartoon fashion as "ready to eat". There are not 2 1/2 pellets to a packet.

(e) Health Act (1911) as amended.

I would suggest that your clients read the whole of the article, in context and act in accordance with the conscience.

Perhaps if they need litigation as a means of settling their business - a preferred option would have been to pre-consult an expert, or to become experts themselves when dealing with the legal requirements of supplying foodstuffs particularly when targeting young people.

Under the circumstances that the truth is my defence in all of your accusations of defamation, please advise me of your clients intentions.

The fact that I have been required personally to return to Perth, out of time, to answer these questions in order to mitigate costs will be introduced in Court in the question of costs."

44 It was against this background that on or about 15 October 1997 the plaintiffs sent a letter to canteen supervisors and buyers for all schools in Western Australia. This is borne out by a letter dated 21 October 1997 in which Mr Stein, on behalf of the second plaintiff, wrote to Confectionary Distributors in Western Australia about the plaintiff's publication and described it as "the letter which Fred has sent to every school in WA." He urged Confectionary Distributors to arrange for their representatives and wholesalers to take the letter and a sample of the product to schools. He said:

"The catch crys must be 'Judge for yourself' and 'Are we going to allow this un-Australian conduct?'"

45 It appears from the evidence given by Mr Essey at trial that the plaintiffs did not make any inquiry of the defendants as to which school canteens the defendant's publication had been sent to. In his answers to interrogatories the first plaintiff had this to say about distribution of his circular letter:

"The first plaintiff cannot specify each person to whom the circular was published other than to say it was the first plaintiff's instruction to his staff to send the circular 'to the canteen buyer of all major primary and high schools in Western Australia'. All circular's were mailed on or about 15 October 1997. The basis of the first plaintiff's instruction to his staff was that he believed major primary and high schools in Western Australia were the recipients of the September 1997 edition of the West Australian School Canteen News published by the defendants and the first plaintiff sought to address those same recipients."

46 The plaintiffs' circular letter is on the printed letterhead of All-Fect Distributors Ltd with the address of the company being given as 31-33 Parramatta Road, Lidcombe, New South Wales. On this occasion the printed letterhead contains no reference to Millers Distributing Co but the letter is signed by Mr Fred Essey, Managing Director "All-Fect Ltd t/a Millers Distributing Co." It is an open letter directed simply "To the canteen supervisor/buyer". Mr Essey accepted in his answers to interrogatories that he signed the letter and caused it to be distributed.

47 The letter commences by drawing the reader's attention to the September issue of the West Australian School Canteen News. It goes on to say that:

"In this issue we have been labeled as cheats, charlatans and profiteers regarding J.J Noodle Snack. We give you this opportunity to judge for yourselves, and allow us to put forward certain facts".

48 The author of the letter says further that the Australian market is a free market that thrives on competition. The reader is told that up to the end of 1996 the plaintiff company sold Mamee brand noodles to retail at 35 cents per packet but by 1997, after it ceased handling the Mamee range, the retail price dramatically increased to a price of 50 cents per packet. The author of the letter suggests that this questions the integrity and intentions of the writer of the article complained of and asks rhetorically: "Who is profiteering?".

49 The author of the plaintiffs' letter goes on to say that other claims made in the article about illegal packaging, possible recall of product, danger to health are all examples of deliberate, misleading and false information. He asserts that "our product" has been assessed by AQIS (Australian Quarantine and Inspection Service) and has complied with all Australian food standards. He says further that currently there is no legal requirement to print on packaging a nutritional information panel. The mere fact that energy values have been stated in calories and not kilojoules is not a measure of cheating. He observes that the Mamee brand does not bother to supply the consumer with any nutritional information at all. He denies that the reference to a serving size of 12gm on the JJ product is a form of cheat packaging because the product is sold to be consumed by small children to adults alike and servings will vary from child to adult.

50 The penultimate paragraph of the plaintiffs' letter reads as follows:

"The company producing this article in the West Australian School Canteen News (September issue) has clearly demonstrated by supplying untrue information and facts that their intentions are questionable. Why are they trying to mislead you? Deliberate misuse and practice to fool people is a method of business that does not belong and can not be tolerated in Australia. Existing customers of this company should be aware of improper conduct and be wary of their true integrity. The purpose and aim of this article is not in good faith and a very poor attempt to prevent fair and honest trade."

51 For ease of reference I will henceforth call the article published by the defendants "the defendants' publication". I will refer to the circular letter dated 15 October 1997 published by the plaintiffs as "the plaintiffs' publication".

52 Mr Essey acknowledged under cross examination that prior to sending out the plaintiffs' publication he did not make any attempt to contact the defendants with a view to finding out the price at which they were selling Mamee Noodles. His information from his business colleagues in Western Australia was that Mamee Noodles were being sold at 50 cents and he was therefore of the view that the comments made in his circular letter were appropriate. He confirmed also that he did not make any attempt to find out from the defendants the names of the school canteens or other parties to whom the September 1997 issue of the Canteen News had been dispatched. He said that he was too angry and upset about what had happened to contemplate making such an approach.

53 Before leaving this part of the narrative, I note in passing that certain of the plaintiffs' interrogatories were directed to the effect or supposed effect of the plaintiff's publication. Ms Harding said in her answers to the interrogatories that she had been spoken to in a way that suggested the plaintiffs' publication had been read with the result that the reader thought less of Ms Harding as a consequence, in the sense of undermining her standing and reputation. The relevant particulars were that on or about 15 October 1997 Leanne Terenciuk (from the Perth Modern School canteen) spoke to her about the matter and forwarded the plaintiffs' publication to Ms Harding. The latter then moved away from GUYS business to distance herself from it and gave up her consultancy work. Further, Leanne Terenciuk communicated to Ms Harding that the circular had caused a fuss with the Parents and Friends Association of the Perth Modern School.

54 Ms Harding said in evidence that on or about 15 October 1997 she received a copy of the plaintiffs' publication from Ms Terenciuk. On 21 October 1997 she sent a facsimile to the plaintiffs' solicitors Hassett Dixon. The thrust of this communication was that despite providing Hassett Dixon with the responses that they had requested, the plaintiffs had nevertheless chosen to circulate the plaintiffs' publication to school canteen supervisors and buyers. The defendants' facsimile further requested responses in relation to claims made by the plaintiffs in the plaintiffs' publication.

55 There were further exchanges between the parties in which the prospect of legal proceedings was mentioned. On 20 November 1997 the plaintiffs issued a writ of summons seeking relief in respect of the defendants' publication.

56 In the months of December 1997 and January 1998 the defendants directed certain enquiries to State Health Departments concerning the JJ Noodles product. These enquiries led eventually to the formulation of certain expert opinions which I will return to later. However, for the sake of an orderly narrative, it is material to note that as a consequence of these enquiries a Mr Biffin, a senior food inspector attached to the Western Sector Public Health Unit of New South Wales, looked into the matter and apparently had a discussion with Mr Essey in the course of preparing his report.

57 Mr Essey was unable to recall such a discussion with Mr Biffin, but under cross examination was prepared to accept that he may have been interviewed. Mr Biffin's letter dated 29 January 1998 to the defendants' solicitors suggested that as a result of Mr Biffin's discussion with Mr Essey, the word "fresh" in relation to chicken essence would be removed from the JJ Noodles label.

58 The Biffin letter to the defendants' solicitors (the "Biffin letter") reads in part as follows:

"Investigation of your clients complaint of breaches of the labelling provisions under the Food Standards Code has involved examination of the current warehouse stock of J.J. Noodles, interview with the principal of All-Fect Distributors Pty Ltd sole distributor of the product and enquiries with the overseas manufacturer to determine the products specifications.

As regards your clients concerns I advise as follows:

1. The statement 'fresh chicken essence' in the ingredient list will be amended omitting the word 'fresh' from future imports.

Enquiries revealed that soya sauce was not an ingredient in the product and the statement in the ingredient list was an error. The words 'soya sauce' do not appear on the current labels.

2. Where the name and address of the manufacturer are set out on the label and the address contains the name of the country in which the food was produced, the name and address shall be taken to satisfy the country of origin statement required under Food Standards Code A1 (4)(a). In any case the statement 'Product of Malaysia' appears on the current label.

3. The nutrition information panel on current labels is not in compliance with A1 of the Food Standards Code as the energy value is not expressed in kilojoules. Clause (c)(i)(D) requires the average energy values to be expressed in kilojoules or both in kilojoules and in Calories.

The serving size information set out in the nutrition information panel satisfies the requirements under current legislation provided, of course, that the quantities of nutrients claimed are correct. No factors or guidelines are laid down for determining the serving size statement and is at the discretion of the manufacturer/seller of the product.

5. Enquiries to date reveal that statements 'no added MSG', 'no preservatives' and 'no artificial colours' on the current label are correct and not misleading or deceptive.

It should also be noted that the statement 'no added MSG' is common usage on food labels to indicate monosodium glutamate has not been added to the product during manufacture as opposed to natural levels of MSG with may exist in the components of the product.

As a result of your clients complaint the importer has been instructed to ensure the labelling on future imports of J.J. Noodle Snacks complies with the requirements under the Food Standards Code.

Samples of the product will also be submitted for chemical analysis in due course to confirm the statements made on the label are not false or misleading."

59 In summary, then, the Biffin letter identified the following errors in the JJ Noodles packaging: soya sauce was not an ingredient, the energy value was expressed in calories rather than in kilojoules and the words "chicken essence" should not be preceded by the word "fresh". The letter notes that the error concerning soya sauce had been corrected and in future the word "fresh" would not be used. Mr Biffin's tone does not suggest that he harboured any acute concerns about the packaging or possible threats to the health of children or consumers generally. His letter suggests that, subject to further tests, the shortcomings in the packaging have been attended to in a satisfactory manner.

60 The plaintiffs by their re-amended statement of claim say in par 5 that the words comprising the defendants' publication in their natural and ordinary meaning conveyed certain imputations each of which are defamatory of the first plaintiff. Particulars of identification are provided to the effect that the first plaintiff is, and was at all material times, the managing director of the second plaintiff; the second plaintiff manufactured and marketed the product JJ Noodles. It is said that these facts were known to the readers of the Western Australian Canteen News.

61 The imputations complained of in par 5 of the claim are as follows:

(a) Mr Essey caused All-Fect to engage in serious breaches of the laws of Western Australia ("the plaintiffs' first imputation")

(b) Mr Essey was so greedy for profits that he caused the second plaintiff to deliberately put the health of consumers of its product at risk ("the plaintiffs' second imputation)

(c) Mr Essey caused All-Fect to endanger the health of children who used its products ("the plaintiffs' third imputation)

(d) Mr Essey caused All-Fect to cheat consumers by the deceptive marketing of its products ("the plaintiffs' fourth imputation").

62 In par 6 of the statement of claim imputations in much the same form are said to be defamatory of All-Fect, with similar particulars of identification being provided as to the plaintiff company.

63 The plaintiffs plead in par 7 that by reason of the publication of the matter complained of, each of the plaintiffs has been injured in their reputation, standing profession, occupation and credit and has been and will be held in public, odium, ridicule, scandal and contempt and have suffered and will continue to suffer damage. The plaintiffs claim damages and exemplary damages.

64 I will return to the particulars pleaded in support of the claim for exemplary damages in due course. In essence, however, it is alleged that the defendants' published the words complained of knowing that they were false or with a reckless disregard to their truth and falsity. Further, they were marketing a product in competition with the plaintiff company and did not attempt to verify the information purportedly provided in the Canteen News.

65 The defendants by their re-amended defence and counterclaim deny that the plaintiffs are entitled to the relief claimed or any relief. They deny that the words are defamatory of the plaintiffs as alleged and say further that if it be held that the defendants' publication was defamatory the publication is true in substance and in fact in so far as it contains allegations of fact. Particulars of the facts and circumstances are set out at some length in par 6 of the statement of defence concerning the defence of justification.

66 I will return to the particulars concerning the justification plea later. However, in essence, it is pleaded by the defendants that All-Fect engaged in serious breaches of the laws of Western Australia. As to the allegation in par 5(b) of the statement of claim concerning the plaintiffs' second imputation that All-Fect was so greedy for profits that it put the health of consumers of its product at risk the defendants refer to certain events which are said to have put the plaintiffs on notice that the packaging of the plaintiffs' product required correction. In that regard, reference is made to the plaintiffs' attendance at the Leura Conference in 1994 and to approaches made to representatives of the plaintiff company by the defendants in mid 1997.

67 The defendants say further that if the first and second imputations are held to be matters of opinion and comment then the defendants rely upon the matters pleaded in support of the defendants' fair comment defence.

68 The defendants say in par 6A of the statement of defence that the defendants were, in any event, entitled to publish the allegation set out in par 5(a) of the statement of claim that the first plaintiff caused the second plaintiff to engage in serious breaches of the laws of Western Australia as fair comment on matters of public interest. Particulars of facts relied upon for comment are then set out and include a plea that All-Fect engaged in breaches of the laws of Western Australia. A defence of fair comment with accompanying particulars is set out also in regard to the other imputations.

69 The defendants say in par 9 of the statement of defence that the defendants' publication was published on an occasion of qualified privilege. Particulars are provided in support of that plea to the effect that the defendants published Canteen News as a newsletter in Western Australia by sending it by mail to a circle of readers consisting of persons or corporations that operate in or have an interest in the operation of school canteens in this State and are customers of Pinegate Holdings. It is said that Ms Harding has specialised knowledge of health and regulatory issues concerning products marketed for school canteens and the defendants' publication was reasonable in the circumstances as to the mode, manner and extent of publication. It is said further that the defendants and each of them had an interest in the matters complained of by the plaintiffs, and the readers of Canteen News had a reciprocal and corresponding interest in receiving information on such matters.

70 In par 10, par 10A, par 11, par 12 and par 13 of the statement of defence the defendants set up pleas of justification, fair comment and qualified privilege in respect of the claims for relief advanced by All-Fect. I will return to the particulars in support of that aspect of the pleading in due course.

71 The defendants say further that neither plaintiff has any relevant standing or reputation in Western Australia. They deny that any apology was appropriate in the circumstances of the case and they deny that the plaintiffs are entitled to exemplary damages or any damages at all.

72 At par 16 of the amended defence and counterclaim the defendants advance a counterclaim against the plaintiffs in respect of the plaintiffs' publication. The defendants say in par 20 that the words comprising the plaintiffs' publication in their natural and ordinary meaning conveyed certain imputations each of which are said to be defamatory of Ms Harding.

"20.1 The First Defendant caused misleading information to be published in the September 1997 issue of Canteen News;

20.2 The First Defendant deliberately caused misleading information to be published in the said issue of Canteen News;

20.3 The First Defendant caused false information to be published in the said issue of Canteen News;

20.4 The First Defendant deliberately caused false information to be published in the said issue of Canteen News;

20.5 The First Defendant does not have the qualifications to express an opinion on matters such as illegal packaging and health dangers posed by such packaging in relation to products such as JJ Noodles;

20.6 The First Defendant showed blatant ignorance in expressing an opinion on matters such as illegal packaging and health dangers posed by such packaging in the said issue of Canteen News;

20.7 The First Defendant in causing to be published in the said issue of Canteen News comments on JJ Noodles had a purpose and aim that was not in good faith;

20.8 The First Defendant in causing to be published in the said issue of Canteen News comments on JJ Noodles attempted to prevent fair and honest trade;

20.9 The First Defendant engaged in the practice of fooling people as a method of doing business."

74 In par 21 of the statement of defence and counterclaim one finds imputations to the same effect pleaded in respect of the second defendant, Pinegate.

75 The defendants plead in par 22 that by reason of the matters pleaded, the first and second defendants and each of them have been injured in their reputation, standing, profession, occupation and credit and have been held and will be held up to public ridicule, contempt and hatred and have suffered and will continue to suffer damage. In addition to the claim for damages they claim exemplary damages by reasons of matters referred to in the pleadings. I will return to these particulars in due course. However, in essence, it is said that the plaintiffs published the matter complained of knowing that the imputations were false or with a reckless disregard as to their truth or falsity.

76 The plaintiffs by way of a reply join issue with the defendants as to the defences of justification, fair comment and privilege. Importantly, they seek to negate the two latter defences by alleging that the defendants' publication was not made in good faith and was actuated by malice and/or an improper motive, that is to say, a desire to disparage the plaintiffs' product JJ Noodles as a product that was competing with the defendants' product Mamee Noodles.

77 As to the defendants' counterclaim, the plaintiffs deny that the imputations complained of can be drawn from the words appearing in the plaintiffs' publication or that such words are defamatory of the defendants. Further, they seek to avoid liability by setting up defences of justification and qualified privilege.

78 The plaintiffs' amended defence to counterclaim is the subject of a reply filed on behalf of the defendants. They admit that the second defendant, Pinegate, marketed Mamee Noodles but deny that this inspired the defendants' publication. They say further that the plaintiffs' publication is not protected by privilege because it was made for an improper purpose, namely, to retaliate and to disparage products being marketed by the defendants.

79 I must now proceed to deal with the various issues raised by the pleadings. It will be useful to begin by looking at some legal principles and related matters bearing upon the issue of identification.

80 In order to succeed in a claim for damages for defamation, the plaintiff must establish that the matter complained of was published, that it related to him, and was defamatory. It is not essential that he should be specifically named, provided there is some form of description which in the circumstances is such that a person reading it would reasonably believe that it referred to the plaintiff: David Syme & Co v Canavan [1918] HCA 50; (1918) 25 CLR 234 at 238.

81 It is not necessary for everyone to know to whom the article refers; but the plaintiff must prove that ordinary readers of the document who knew him would have understood that it referred to him. It does not have to be established that the defendant intended to refer to the plaintiffs: Jones v E Hulton & Co [1909] 2 KB 444 at 454 - 455.

82 I note from Tobin & Sexton's: "Australian Defamation Law and Practice" at 6005 that where the plaintiff is named in the matter complained of there is no difficulty with identification. It is not necessary to prove that the recipient of the publication knew the plaintiff.

83 In this case, I note also that the annotated label formed part of the defendants' publication, and bore the second plaintiff's name. The relevant words on the photographic image of the label are as follows "Packed for All-Fect Distributors Ltd" with the address of the company being given as "31-33 Parramatta Rd Lidcombe NSW." In my view, the ordinary reasonable reader would conclude that the product was being distributed within Australia, and thus within Western Australia, by the second plaintiff, All-Fect, and that the defendants' attack upon "Health Thieves" and "businesses in WA that are so greedy for profits" included All-Fect.

84 A different and more difficult question in the present case is whether the ordinary reasonable reader of the article would infer that the first plaintiff was aware of the relevant conduct of the second plaintiff and caused the second plaintiff to so act.

85 It will be useful to say something further at this point as to which persons should properly be regarded as the persons to whom the publication was made or as the readers of the words complained of.

86 The defendants contended that the readers of the article should be confined to the canteen manageresses to whom the publication was sent by mail and possibly to some of their assistants. However, I consider that the readers of the article or the persons to whom the publication was made included those persons by whom the publication would ordinarily be read. Such readers include persons entering into school canteens and persons entering into the defendants' premises where the newsletter was on the front counter.

87 Evidence bearing upon this issue included the following matters.

88 Mr Essey gave evidence at the trial that he was the managing director of the plaintiff company and, as the biggest shareholder, effectively the person in control of the company. He referred to the plaintiffs' use of Millers Distributing Co as a business name. He described his business connections in Western Australia and referred to various distributors in Western Australia such as CDs, Centra, Greenleaf, Perth Candy and some others. He spoke of being in regular contact with the individuals attached to these various distributors and of speaking to them often by phone. On his account, one distributor, Mr Joyce acquainted him with the contents of the newsletter complained of. Mr Joyce read the article to him and in due course faxed a copy of it to him. Mr Essey described his anger upon hearing of what was in the newsletter.

89 It emerged from the evidence of Mr Essey that Mr Joyce is a confectionary wholesaler in Perth. A Mr Ray Stace at that time was a senior figure with Confectionary Distributors or CDs, and Mr Danny Pollard was also associated with that company. Mr Ray Stace rang to cancel the CD's order for JJ Noodles soon after publication of the defendants' newsletter.

90 Mr Stace of Confectionary Distributors gave evidence that he knew of Mr Fred Essey as a principal in All-Fect and Millers Trading Co. The copy of the newsletter that he saw came to him not from a sales representative but from a sub-wholesaler. As far as he was concerned, as at 1997, Millers was the name for Mr Essey's company and he concluded that the newsletter was directed to the plaintiff company.

91 Mr Fraser gave evidence at the trial. He is a principal of Perth Candy Co which supplies products to schools. He gave evidence that in one canteen he saw the newsletter complained of and associated the article concerning the JJ Noodles product with All-Fect because he knew that Mr Essey's company was the distributor of the product. His evidence was to the effect that he understood that Mr Essey was the owner of the plaintiff company and what the plaintiff company did could be attributed to the actions of Mr Essey. He held Mr Essey in high esteem and had heard nothing derogatory of him. When Mr Fraser read the article he thought that it was degrading to Mr Essey and his business. The article stopped him carrying the JJ Noodles product.

92 Mr Fraser affirmed under cross-examination that the newsletter was not sent to him by GUYS. He saw the newsletter in one instance at a school canteen. The newsletter was lying on a bench inside the school canteen. He was accustomed to going into school canteens in the course of doing business with the manageresses or ladies working in the canteens. By the look of it, he didn't understand the newsletter to be a private document. He read it by picking it up, as one reads a magazine while waiting for someone to arrive. As far as he was concerned the Essey organisation was known as Millers as at 1997.

93 A Mr Peter Verbunt gave evidence. He is a principal in Greenleaf Distributors. He said that as far as he was concerned Mr Fred Essey was the founder and person in charge of the plaintiff company. He, (Verbunt), attributed the actions of the plaintiff company to Mr Essey. Mr Richard Barton of Blackpool Rock Candies gave evidence to similar effect.

94 There was a considerable degree of controversy at the trial as to whether the newsletter was visible in school canteens and could be seen by visitors to the premises. The evidence from Ms Terenciuk and Ms Bowler of the Perth Modern School canteen had a bearing upon this aspect of the matter. They were cross-examined at some length about such matters and it did seem from the evidence of Ms Bowler that there was a notice board in the canteen at the Perth Modern School upon which the GUYS newsletter was sometimes displayed. She said in her witness statement:

"The newsletter was sent to Leanne Terenciuk. Leanne used to pin it up on the notice board in the canteen and leave it there for a few weeks for people to read."

95 She conceded under cross-examination that the notice board was about 8 to 10 paces from the waiting area by Leanne's desk to which sales representatives would come on business.

96 This brings me to an issue concerning republication that was raised by the defendants. I was urged to find that the readers of the defendants' newsletter should be characterised narrowly as those persons to whom the newsletter was sent with periodical accounts. The defendants did not authorise republication to third parties and should therefore not be held responsible for any such republication.

97 I am not prepared to make such a finding. In my view, the format of the newsletter made it inevitable that the document would be read by persons other than the direct recipient. The newsletter served a promotional purpose and was intended to be read generally by persons coming to school canteens or by those who came to the defendants' premises. I find that it was in fact read by persons other than those to whom the defendants' accounts were mailed.

98 Accordingly, I consider that the readership of the newsletter extends beyond those persons who received the newsletter with their accounts and included visitors to school canteens such as Mr Fraser and other sales representatives. To the extent that such a finding is necessary, I find that the defendants authorised republication to such persons.

99 It follows from this discussion that, in my view, readers of the defendants' publication included visitors to the defendants' premises and to school canteens. Some readers such as those sales representatives who were involved in the distribution of the plaintiffs' products were aware that All-Fect traded also as Millers Distributing Co and that the first plaintiff, Fred Essey, was the principal figure in those organisations. The defendants adduced evidence to this effect from several witnesses including Mr Stace and Mr Fraser. I find that Mr Fraser picked up and read the defendants' publication in a school canteen in the manner described in his evidence, and concluded that the distributor of JJ Noodles under attack was Mr Essey.

100 There was some controversy at the trial as to whether Mr Fred Essey could properly be characterised as the managing director of the second plaintiff. However, I am satisfied that he was essentially the controlling figure in the company and that the witnesses I have just mentioned were of the view that he was the subject of the attack. I am therefore satisfied that ordinary reasonable readers who knew the first plaintiff understood that the defendants' publication referred to the first plaintiff in addition to the second plaintiff.

101 An imputation will be defamatory if it tends to lower the plaintiff in the estimation of right thinking members of the community: Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 at 447.

102 In deciding whether or not the words are capable of conveying an allegedly defamatory meaning, the Court will reject those meanings which can only emerge as the product of some strained or forced or utterly unreasonable interpretation. The Court will assume that the ordinary reader is a person of fair average intelligence who does not live in an ivory tower, who is not unduly suspicious or naïve or avid for scandal and is not inhibited by strict rules of construction: Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1.

103 What the ordinary man, not avid for scandal, would read in the words must be a matter of impression. The impression will inevitably include a certain amount of loose thinking: Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632. The test of whether the words "complained of" are capable of conveying an allegedly defamatory meaning is whether, under the circumstances in which the words were published, people to whom the publication was made would be likely to understand them in a defamatory sense: Jones v Skelton [1964] NSWR 485.

104 I have noted in my review of the pleadings that the defendants set up a plea in answer to the plaintiffs' claim that the words were not defamatory of the plaintiffs as alleged. This gives rise to an initial question as to whether the pleaded imputations relied upon by the plaintiffs can be said to arise from the words complained of, bearing in mind that the article in question was lengthy and contained a host of criticisms. I have already found that each of the plaintiffs is identifiable as a subject of the defendants' attack.

105 I consider that the pleaded imputations can be said to arise from the words complained of. It is clear from the article that the main thrust of the defendants' critique is that the distributor of the JJ Noodles product is in breach of various laws, is greedy for profits, and is seeking to cheat consumers by the deceptive marketing of its products. The various observations are gathered together under the heading "Health Thieves!". I will not repeat the various constituents of the article, but, to my mind, the pleaded imputations can be regarded as a fair distillation of the words complained of in their natural and ordinary meaning, that is to say, that the distributor engaged in serious breaches of the laws of Western Australia ("the first imputation"); that he was so greedy for profits that he deliberately put the health of consumers at risk ("the second imputation"); that he endangered the health of children who used his products ("the third imputation"); that he had cheated consumers by the deceptive marketing of his products (the fourth imputation).

106 An important consequence of my finding that the pleaded imputations are to be found in the words complained of is that my attention will henceforth be focused upon the imputations rather than upon the loose conglomeration of words comprising the article complained of. The imputations clearly amount to more than random criticisms. Each imputation reflects a grave assertion. This is of particular importance in regard to the defence of justification, for it is the imputation contained in the words that has to be justified, not the literal truth of the words, nor some other, similar charge not contained in the words: Gatley on Libel and Slander (9th ed) par 11.6. In the present case, for example, where the first imputation speaks of "serious" breaches of the laws, it will not be sufficient for the defendants to establish that the plaintiffs were responsible for some comparatively minor infringements.

107 I consider also that the imputations complained of are capable of conveying a meaning defamatory of each plaintiff in that people to whom the publication was made would be likely to understand the imputations in a defamatory sense. The imputations reflect grave assertions that would inevitably tend to lower the subject of the attack in the estimation of right thinking members of the community.

108 It follows from earlier discussion that as both plaintiffs were identified by the words complained of, they were defamed by such words. They are therefore entitled to relief by way of damages unless the defendants are excused from liability by any of the matters raised by way of defence, namely, justification, fair comment or qualified privilege.

109 The defendants pleaded in par 6 of the statement of defence and counterclaim that if it were to be held that the defendants' publication was defamatory of the first plaintiff (which was denied) then the publication was true in substance and in fact in so far as it contains allegations of fact. The defendants purported to rely on the circumstances that the first plaintiff, Mr Essey, at all material times controlled the activities of the second plaintiff, All-Fect, and thus caused the company to engage in the activities the subject of the relevant imputation. A similar line of defence is reflected in par 10 concerning All-Fect. In each case particulars are provided of the facts and matters relied on in support of the plea of justification.

110 Before turning to the various imputations and the question in each case as to whether the imputation complained of is true in substance and in fact it will be useful to look at the principles bearing upon this issue.

111 It is a defence to an action in defamation to establish that the imputation in respect of which the defendant is sued is true. The essence of such a plea is that if the words complained of bear the defamatory meaning contended for by the plaintiff then those words, so understood, are true. It is important to understand that the defendant must prove that the defamatory imputation is true. It is not enough for him to prove that he believed that the imputation was true, even though it was published as belief only: Gatley on Libel and Slander (9th ed) par 11.4. As much must be justified as meets the sting of the charge, and if anything be contained in the charge, which does not add to the sting of it, that need not be justified: Edwards v Bell [1824] Bing 403 at 409.

112 If the matter complained of contains defamatory statements both of fact and of opinion, the defendant, under a plea of justification, must prove that the statements of fact are true and that the statements of opinion are correct.

113 I noted earlier that it is the imputation contained in the words which has to be justified, not the literal truth of the words, nor some other, similar charge not contained in the words. This has two consequences. First, the defendant may succeed in a plea of justification even though what he has said may be inaccurate in a number of respects. Secondly, he may not, under a plea of justification prove the truth of other facts damaging to the plaintiff's reputation, even if they would be no less damaging to that reputation. The issue of what may be advanced under a plea of justification is therefore closely linked to the meaning or meanings which the defamatory words are reasonably capable of bearing.

114 Broadly stated, the plaintiffs' position at trial concerning this issue was that irrespective of whether some minor shortcomings in the labelling could be demonstrated, it was not open to the defendants to rely upon a plea of justification because the imputations conveyed by the words complained of were disproportionate to the matters under notice. It was not open to the defendants to condemn the plaintiffs as cheats and profiteers or otherwise to make extremely disparaging comments of the kind appearing in the newsletter upon the basis of a few comparatively harmless inadequacies in the labelling.

115 The plaintiffs submitted that the words complained of identified three alleged labelling shortcomings, namely, the calories/kilojoules issue; the soya sauce issue; and the serving size issue. The last should be immediately discounted as the experts seem to agree that this was a matter of manufacturer's discretion. There was no occasion for extreme allegations of greed, profiteering or charlatanism with the result that the plea of justification could not succeed. The plaintiffs had made a mistake on the soya sauce matter, and that mistake was in the process of correction prior to publication. The serving size issue was a matter of debate but, at worst, the plaintiffs had been genuine in their belief that it was permissible to distinguish between adult and child size serves. Further, it was not open to the first defendant to rely simply upon her own state of knowledge or her beliefs as to what the position was concerning certain issues.

116 This brings me to the evidence of the various experts.

117 The defendants led evidence from Glyn Farrell who is a registered public analyst under the WA Health Act. He was instructed to conduct a chemical analysis of two packets of JJ Noodle Snacks. He described his methods at some length. It appears from his two reports dated 3 April 1998 that he identified various discrepancies between the nutritional information on the package and the contents of the package. His second report reads in part as follows:

"(a) The Food Standards Code requires that Energy values be declared in terms of kilojoules with the option of including calories if desired, it is not an either - or option. The Energy values should read 244kj/serve and 2040kj/100g.

(b) The obtained protein content was only 66% of that claimed in the nutritional panel.

(c) The obtained sugar content was only 20% of that claimed in the nutritional panel.

(d) The obtained sodium content was only 41% of that claimed in the nutritional panel.

(e) No figure for potassium was declared in the nutritional panel the obtained figure was 125mg/100g, the Food Standards Code require that this figure be declared.

(f) The declared sugar content of 17g/100g appears to be an error when one considers that a soft drink, which could be regarded as being 'sweet', contains approximately 10% sugar."

118 The plaintiffs led evidence from Murray Hoare. He is a senior food and agricultural chemist at the Chemistry Centre of Western Australia. He referred to carrying out certain tests concerning a sample of noodles. He provided a response to Mr Farrell's report. In essence, he said that the major constituents of the food product agreed "reasonably well" with the claims on the label of the product. He said that for the most part variations of the magnitude described by Mr Farrell are common to most products, save that as to sugar and sodium the differences were greater than would ordinarily be explained by batch variations and the labelling was inaccurate in that regard. He noted that the energy levels should have been stated in kilojoules. He said that no-one's health was put at risk by these misdescriptions as they were simply too small to be significant to any dietary programme. In any event, having less sugar and salt than is described harms no-one in that the consumer is simply eating a "blander" product than would otherwise be the case.

119 The defendants also led evidence from Margaret Miller who is a public health nutrition consultant. She said that some breaches of the Food Standards Code had occurred in the labelling of JJ Noodles, of which the most serious was the use of calories rather than kilojoules as the unit of energy content. She said that the consequences of the breaches would depend on who consumed the noodles, how often and over what period. Where a person consumed JJ Noodles occasionally as part of a balanced diet and did not use the nutrition information panel to plan their energy intake, the risk to health would be minimal. The lack of information about potassium content could have serious health consequences for a very small number of people with chronic renal failure, hypertension or congestive heart failure who are taking diuretic medication.

120 Ms Miller said further that in a case of reasonable consumption over the course of a school year, the misdescriptions on the nutrition panel would have a negligible effect on a child's weight. She said in a supplementary statement that tolerance levels on labels for nutrient composition are not definite and are quite vague.

121 Ms Miller was cross-examined at some length. She conceded, in regard to the serve sizes, that a person would have to eat a considerable amount of the product for their health to be put at risk by the misdescription complained of in the review. She said that discrepancies were not uncommon on labels and that an undertaking to fix a description would probably be sufficient for the authorities in most cases. It was unlikely that a product would be recalled where such an undertaking was provided. It did not surprise her that there was no recall in the present case. She was pressed strongly and agreed that there was not likely to be any immediate threat to the health of consumers arising from the discrepancies complained of in the present case.

122 She agreed in general terms with the evidence of Mr Hoare that as to the sugar and salt issue, a blander food product would not represent any real threat to health save for consumers with renal or diabetic problems.

123 It is against this background, and having regard also to the evidence of the first defendant, Marlene Harding, that I must return to the plaintiffs' imputations. The defendants contended that the various imputations should be considered individually. The defendants brought forward evidence and arguments in support of a plea of justification concerning each imputation.

124 It will be useful to look at each imputation in turn.

125 The words complained of were said to convey an imputation that the first plaintiff caused the second plaintiff to engage in serious breaches of the laws of Western Australia.

126 The defendants submitted that the second plaintiff breached the Australian and New Zealand Food Standards Code as a result of its failure to correctly list the ingredients of JJ Noodles Snacks on the package and to ensure that the nutritional panel on the package complied with the Code. The defendants placed reliance upon an alleged admission by the first plaintiff that he did not consider nutritional panels and what appears on them as important and that children did not read nutritional panels. They placed reliance also upon the views reflected in the reports of Mr Farrell and Ms Miller.

127 In reviewing the relevant legal principles I noted that a plea of justification must be directed to the imputation. Further, the defendants must prove that statements are true and statements of opinion correct. In the present case, the first imputation concerns a "serious" breach. I characterise this as an expression of opinion by the first defendant but I am not satisfied that the opinion is correct. There appears to have been a degree of non-compliance with the prescribed standards but having regard to the opinion of Mr Hoare and the cross-examination of Ms Miller, I am not satisfied that it can be characterised as a serious breach. I find against the defendants on this issue.

128 The words complained of were said to convey an imputation that the first plaintiff was so greedy for profits that he caused the second plaintiff to deliberately put the health of consumers of its product at risk.

129 The defendants submitted in regard to this imputation that there was evidence the activities of the first plaintiff were profit driven. As an importer of confectionary products into Australia for over 23 years, the first plaintiff knew or ought to have known of the legal requirements in Western Australia in relation to food labelling but ignored them.

130 It was said further that the plaintiffs were informed by the defendants, through Jack Stein in mid 1997 of problems with the labelling of JJ Noodles Snacks but failed or neglected to change the labelling prior to publication of the newsletter. The first plaintiff admitted that he did not consider nutritional panels and what appeared on them as important and said that children did not read nutritional panels. The plaintiffs did not check the accuracy of the label before sending the product to Western Australia. Mr Essey conceded that everything was left to Carjen in Malaysia.

131 It follows from my earlier finding and the weight I give to the opinion of Mr Hoare that I am not satisfied that the plaintiffs put the health of consumers at risk. The evidence of Mr Hoare was to the contrary. Mr Farrell and Ms Miller drew attention to shortcomings in the labelling, but Ms Miller tended to agree with Mr Hoare under cross-examination. I am not convinced, when the evidence of the defendants' experts is considered as a whole, that they went so far as to suggest that the health of consumers was actually put at risk.

132 This finding would, of itself, be sufficient to dispose of the justification plea. However, in any event, I am not satisfied that Mr Essey acted as alleged because he was greedy for profits.

133 It will be convenient at this point to say something about the credibility of Mr Essey and Ms Harding.

134 Mr Essey gave evidence at the trial in a forthright manner. He did not claim to have any particular expertise in regard to matters of labelling or accountancy. It followed from this that he was rather vague in describing the level of business he transacted in the various States of Australia. The evidence he gave concerning the adverse financial effect of the alleged defamation was therefore not compelling. Nonetheless, I regarded him generally as a reliable witness. He accepted that he was in a business to make a profit but I give weight to his denial of the charge that he was greedy for profits and indifferent to health issues.

135 Ms Harding was somewhat garrulous as a witness and keen to emphasize her credentials as a person well-versed about food standards and health issues. I accept that she was knowledgeable about such matters and had a genuine concern for the welfare of students. However, the language used in the newsletter suggests that she was inclined to be over-zealous, and there were indications in the evidence that she was inclined to put a favourable gloss on her activities. Her evidence about the Leura conference was not convincing and I am not persuaded that she spoke to Mr Stein about the JJ Noodles product in mid July as alleged for had she done so, mention would have been made of this in her pre-trial affidavit and answers to interrogatories. These matters were relied upon to justify the extremity of her annoyance and her denunciation of the plaintiffs as charlatans and profiteers.

136 It follows from these observations that, at the end of the day, I am not satisfied that the first plaintiff was so greedy for profits that he caused his company to deliberately put the health of consumers of its product at risk. I find that the evidence adduced by the defendants at trial did not justify the extremity of the allegations made against the plaintiffs.

137 The words were said to convey an imputation that the first plaintiff caused the second plaintiff to endanger the health of children who used its products.

138 The defendants relied upon the evidence of Margaret Miller, a nutritionist, who indicated that as a result of the incorrect and negligent labelling of JJ Noodles Snacks, the health of consumers was put at risk, particularly those with special dietary requirements. This was said to be supported by the evidence of the first defendant, Ms Harding.

139 As I have already indicated, the plaintiffs relied upon the evidence of its expert, Murray Hoare, to the effect that the discrepancies were of a minor kind and not sufficient to have any real impact upon health. It follows from my earlier finding under par 5(b) above that I am not satisfied that the opinion reflected in this imputation is correct.

140 The words complained of were said to convey an imputation that the first plaintiff caused the second plaintiff to cheat consumers by the deceptive marketing of its products.

141 With respect to this imputation the defendants submitted that the labelling on the product was deceptive because on the face of the packet, the product listed soya sauce as an ingredient but it also stated that there was "no added MSG", which on the uncontested evidence of the first defendant, was not possible. The packaging did not in fact contain soya sauce. The ingredients listed "fresh chicken essence". It was said that chicken essence in a dehydrated product such as JJ Noodles could not be fresh. It was said that all witnesses who gave evidence on this issue (except for the first plaintiff) agreed with this proposition.

142 The defendants submitted further that the nutritional panel on the product was deceptive because the energy level was stated in calories only when the Code requires that it be stated in kilojoules only or both kilojoules and calories. Potassium was stated as being zero when in fact there was 125 mg per 100g of product. Potassium quantity had to be listed in the nutritional panel of higher than 5 mg. The amount of sugar was stated as being 17g per 100g of product when in fact it was only 3.5g. The protein was stated as being 11g per 100g of product when in fact it was only 7.3g. The sodium was stated as being 1940 mg per 100g of product when in fact it was only 805g.

143 The defendants submitted further that the 30g packet was said to contain 2.5 serves. This designation was described by the defendants' expert, Mrs Miller, as "unusual" and a matter that increased the risk of misinterpretation of the nutrient content of the packet. Reference was made to a statement made by the first plaintiff in the course of his evidence that in relation to the 12g serving size: "You could say its misleading."

144 It was also said on behalf of the defendants that the packaging of JJ Noodles was finally changed in accordance with the recommendations made in June 1997 by the first defendant, including the serving size. The fact that changes were made was said to support the defendants' contention that the label was seriously defective.

145 To my mind, the summary I have previously given of the Biffin letter represents a succinct portrayal of the true position. There were some errors and omissions in the JJ Noodles labelling but these were not sufficiently significant to give rise to acute concerns. They were partly due to the product being manufactured in Malaysia. I am not satisfied that there is enough in the situation to justify an observation that the first plaintiff was cheating consumers by deceptive marketing. Such an allegation suggests that the first plaintiff was acting in a dishonest or fraudulent manner. To my mind, the evidence does not point to such a conclusion. I find against the defendants on this issue.

146 It follows from earlier discussion that I am not satisfied that the defendants should succeed on the justification plea directed to the first plaintiff's imputations.

147 The second plaintiff's imputations are in essentially the same terms and thus I come to the same conclusion concerning these imputations. When the matter is looked at in overview it becomes apparent that the assertions made by the first defendant were disproportionate to the shortcomings in the labelling for which the plaintiffs were responsible. It is therefore not surprising that the plea of justification in respect of each plea of justification should fail.

148 It is a defence to an action for defamation at common law for the defendant to prove that the words complained of were published by him as fair comment on a matter of public interest. The defence can be defeated, however, by proof that the defendant was actuated by express malice or an improper purpose.

149 The basic rule is that the defence applies to comment but not to imputation of fact. If the imputation is one of fact the defence must be justification or privilege. However, the matter is complicated for two reasons: first, there may be difficulty in distinguishing comment and fact; second, a statement of fact which is an inference from other facts stated or referred to may be a comment for the purpose of the defence. If a defamatory allegation is to be defended as fair comment it must be recognisable by the ordinary, reasonable reader as comment and the key to this is whether it is supported by facts, stated or indicated upon which, as comment, it may be based: Gatley (supra) par 12.6 and par 12.7.

150 A number of decided cases were cited by counsel for the respective parties bearing upon issues of this kind and the notion that it must be indicated with reasonable clarity by the words themselves, taking them in their context and the circumstances in which they were published, that they purport to be comment and not statements of fact.

151 In Smith's Newspapers Ltd v Becker [1932] HCA 39; (1932) 47 CLR 279 an unregistered medical practitioner of German origin complained of a newspaper article describing him as a person with a discreditable past who treated patients in an incompetent manner and with a reckless indifference to the dangerous character of a particular drug he had prescribed. The article included a heading "German Quack runs riot on the Murray Flats". The High Court held that a person who pursues an unlawful vocation or engages in unlawful acts cannot maintain an action for libel regarding his conduct in such vocation but that does not deprive him of his absolute right to his personal character. It was held that the defences of justification, privilege and fair comment failed and the plaintiff was entitled to damages because the libel affected the plaintiff in his private character.

152 Evatt J observed at 302 that seen in their true relation to the article the words "German Quack runs riot on the Murray Flats" would be understood by a reader of the article as meaning, not that Smith's Weekly were merely expressing their opinion that Becker was a "quack" but that Smith's Weekly asserted that such was a correct description of him; in other words, asserted as a fact that he was a "German quack".

153 Justice Evatt went on to observe, however, that in some contexts the word "quack" might be employed by way of expressing an opinion. For example, in Dakhyl v Labouchere [1908] 2 KB 325 the House of Lords considered it open to a jury to find that the expression "quack of the rankest species" as applied to the plaintiff was only comment. This was because of the plaintiff's close association with an institute of dubious status. In such a context, it was quite possible for a reader to gather that the real charge made by the newspaper was the fact of the plaintiff's close association with the institute, and that the term "quack" was an expression of opinion fairly attributable to all persons connected with the institute and therefore applicable also to the plaintiff.

154 The question of whether the words complained of should be characterised as opinion or as fact arose also in O'Shaughnessy v Mirror Newspapers Ltd [1970] HCA 52; (1970) 125 CLR 166. In that case a theatre critic contended that the plaintiff had wasted the talents of a group of players in a dishonest production devoted to enhancing his own role at the expense of those of the rest of the cast. The High Court held that the article could be regarded as going beyond criticism of the production and attributing a dishonourable motive to the plaintiff as a statement of fact.

155 However, Barwick CJ, McTiernan, Menzies and Owen JJ observed at 174 that it was not their view that an imputation of dishonesty is always an assertion of fact. Windeyer J said at 177:

"Dishonesty does not necessarily mean cheating or fraud. It may denote other forms of improbity - conduct that is dishonourable because not straightforward but designed to serve an unworthy end. In whatever sense it is used, it is a defamatory word. It is no doubt a judgment upon conduct. It is a judgment that in some contexts is a comment upon facts stated or well-known: in other contexts, when the facts on which it is based are not fully stated or known, it is an allegation of fact. Whether in a given case it is a statement of fact or merely the expression of an opinion, a comment on facts, must depend upon all the circumstances: see Kemsley v Foot [1952] AC 345, especially the passage from Odgers on Libel and Slander quoted by Lord Porter [1952] AC at pp 356 - 357."

156 It is apparent from the decided cases and from Tobin and Sexton's: "Australian Defamation Law and Practice" at par 13,015 that it is for the Court to determine whether the matter complained of was a statement of fact or opinion in the circumstances of the particular case.

157 The decided cases establish also that if the matter complained of be characterised as comment then the comment must be based on facts which are either stated by the commentator or indicated by him with sufficient clarity to enable the reader or listener to ascertain the matter on which the comment is being made: Kemsley v Foot [1952] AC 345. It is sufficient if the relevant substratum of fact is indicated: Pervan v North Queensland Newspaper Co Ltd [1993] HCA 64; (1993) 178 CLR 309 at 340.

158 I listed the imputations set out in par 5 and par 6 of the claim a short time ago and I will not repeat them. The tenor of the article complained of and the imputations said to be contained in the words is that the plaintiffs had engaged in serious breaches of the laws of Western Australia, were so greedy for profits that they had deliberately put the health of consumers and children at risk, and that consumers were being cheated by deceptive marketing.

159 The plaintiffs contended that these allegations should be characterised as statements of fact with the result that the defence of fair comment was not available. It was said that they were simple assertions bearing no qualifications such as "in my opinion" or other signs suggesting that the author was advancing a personal view.

160 The case for the defendants was that the statements in the defendants' publication were essentially expressions of opinion. They would have been understood as such by readers of the article bearing in mind that readers of the newsletter generally relied upon it for guidance on matters concerning health and safety of new products.

161 The defendants contended that the opinions expressed by Ms Harding in the defendants' publication were fair and protected in that the facts upon which the opinions were based were either contained within the article or readily ascertainable by the reader and were true. The comments were warranted, in the sense that an honest person might bona fide hold such views: Australian Defamation Law and Practice (supra) par 13,080. It was said further that such comments were directed to a matter of public interest and that the evidence adduced in support of the plaintiffs' plea of malice was not sufficient to negate the defence of fair comment.

162 In my view the statements comprising the imputations complained of should be characterised as expressions of opinion. To my mind, having regard to the test enunciated by Evatt J in Smith's Newspapers v Becker (supra) a reader of the article would understand that the author had taken account of certain facts concerning the composition of the product and the presence of regulatory provisions and against that background was now advancing a trenchant opinion as to the status of the product and the integrity of the distributor. The position in the present case is analogous to the case of a theatre or restaurant reviewer who presents to the public an assessment of the offerings placed before him.

163 I recognise that in certain cases, as in the O'Shaughnessy case (supra), that statements made by a reviewer on certain occasions can be characterised as statements of fact, but I am not satisfied that this is such a case. The nature of the article suggests that the author is drawing together certain facts and then expressing an opinion about them, although her views are not explicitly described as an opinion. I consider that the matter under discussion can be characterised as a matter of public interest in that in modern times consumers and members of the public are now accustomed to giving close attention to the quality of products placed before them.

164 The decided cases suggest that where the comment contains imputations to the effect that the plaintiff has acted dishonestly or cheated or has been inspired by some base motive, a question arises as to whether such views can be defended as fair comment. Further, there is strong support for the view that in a case involving an imputation of dishonesty or of dishonourable conduct or motive the defendant has to prove that the imputation, though not necessarily the correct inference, was a reasonable inference from the proved facts. Cozens-Hardy MR said in Hunt v Star Newspaper Co Ltd [1908] 2 KB 309 at 317 that there still remains the question whether, if, and only if, the facts are substantially true, the comment made by the defendant, based upon those true facts, was fair and such as might, in the opinion of the jury, be reasonably made.

165 I must also take account of the principles concerning the effect of malice in the context of a defence of fair comment. Even though the comment satisfies the objective test of fair comment, the defence of fair comment will nevertheless fail if it is found that in making the comment the defendant was actuated by express malice. In Thomas v Bradbury, Agnew [1906] 2 KB 627 at 638 Collins MR asserted that the right of fair comment, though shared by the public, is the right of every individual who asserts it but comment which is coloured by malice cannot from his stand point be deemed fair. If the person sued is proved to have allowed his view to be distorted by malice, it is quite immaterial that somebody else might without malice have written an equally condemnatory criticism. The burden of proving malice is upon the plaintiff: Telnikoff v Matusevitch [1992] UKHL 2; [1992] 2 AC 343 at 355.

166 Proof of malice defeats the defences of both fair comment and qualified privilege. Accordingly, before resolving the remaining issues concerning fair comment it will be useful to look at the principles of law concerning qualified privilege and malice.

167 The common law recognises that there are occasions upon which, on the grounds of public policy and convenience, a person may make statements about another which are defamatory and in fact untrue. On such occasions of privilege a person is protected if the statement was fairly warranted by the occasion and so long as it is not shown that he made the statement with malice, that is to say, knowing it to be untrue or with some indirect or improper motive. These occasions are called occasions of qualified privilege, for the protection which the law affords is not absolute but depends on the honesty of purpose with which the defamatory statement is made Gatley (supra) par 14.1.

168 Privileged occasions are those where the maker of the statement has a duty to make the statement and the recipient has a corresponding interest or duty to receive it: Adam v Ward [1917] AC 309 at 334.

169 No privilege arises if the exigency of the situation does not warrant the protection of the common interest by the means employed. Whether the duty or interest contended for by a publisher exists must be determined upon a consideration of the surrounding circumstances and what is reasonable in those circumstances.

170 In most cases a qualified privilege will not be available to a newspaper because there is no community of interest between the publisher and the general public: Smith's Newspapers Ltd v Becker (supra) at 304. However, it seems that a newspaper or broadcaster can avail itself of the defence in three exceptional circumstances: first, public response to a public attack: Adam v Ward (supra); Loveday v Sun Newspapers Ltd [1938] HCA 28; (1938) 59 CLR 503; Kennett v Farmer [1988] VicRp 90; [1988] VR 991; second, publication of statements made by a third person pursuant to or in discharge of that person's interest or duty to inform the public about a particular matter; third, publication of information concerning government or political matters: Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520.

171 I note that in Marks v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 14 WAR 360 the defendant union published in its journal some comments about the plaintiff's involvement in a redevelopment proposal. When the plaintiff complained that the words in question were defamatory, the defendant raised a plea of privilege, but was held to be not entitled to the protection afforded by such a defence because the comments in the article went beyond the requirements of the occasion, notwithstanding that the plaintiff failed to convince the jury that the defendant acted with malice.

172 Owen J affirmed that reciprocity of interest is essential. This is to be tested by asking whether the communication was made on an occasion on which a person who desired to do his duty to society would reasonably believe that he ought to make it. The publisher must establish that duty or interest existed in fact. It is not sufficient that the publisher acted in the belief that the duty or interest existed. Whether or not the occasion is privileged is a question of law for the Judge to decide.

173 He said further that no privilege arises if the exigency of the situation does not warrant the protection of the common interest by the means employed. This must be determined upon a consideration of the surrounding circumstances and of what is reasonable in those circumstances. Privilege is not destroyed by inclusion of information outside the ambit of the privilege, but the defamatory material will only be protected by the privilege if it is relevant to the matters at the heart of the duty or interest.

174 There are a number of other cases which confirm that a response must be commensurate with the occasion. For example, in Guise v Kouvelis [1947] HCA 13; (1947) 74 CLR 102 a committee man charged a club member in the card room with being a crook in a loud voice that was audible to most of those present. The High Court held that the interests of the defendant and the members did not justify a public accusation because the defendant could simply have told the plaintiff, without making any defamatory allegation, that he would report him to the committee (such report being certainly a privileged occasion).

175 This brings me to the principles bearing upon malice. In Calwell v Ipec Australia Ltd [1975] HCA 47; (1975) 135 CLR 321 Mason J of the High Court had this to say at 332:

"At common law it has been repeatedly said that a Court should not be quick to find evidence of malice in the terms of defamatory material published on a privileged occasion because so to do would restrict considerably, if not defeat, the protection which the law confers on privileged communications (see Laughton v Bishop of Sodor and Man [1872] EngR 35; (1872) LR 4 PC 495; Adam v Ward (supra). It has been said that where the words are utterly disproportionate to the facts this amounts to evidence of malice (Spill v Maule (1869) LR 4 EX 232, presumably on the footing that the extremity and exaggeration of the language is explicable only by reference to the existence of illwill in the defendant, but it does not suggest that a defendant is confined to saying what is strictly necessary to the occasion."

176 Gatley (supra) submits at par 16.2 that the authorities on malice and the different contexts of fair comment and qualified privilege are essentially interchangeable, save for the necessary limitations imposed by the nature of each defence. For example, where a defendant on an occasion of privilege, makes a statement reckless whether it is true or false, he will be treated as if he had actual knowledge of its falsity, which generally amounts to malice; similarly, a person who makes a comment which does not represent his opinion will also be guilty of malice defeating the defence of fair comment, but a person can hardly be reckless as to whether he holds an opinion.

177 The relevant principles in the context of qualified privilege were reviewed in Horrocks v Lowe [1975] AC 135 and are summarised in Gatley (supra) at par 16.3 and onwards. The defendant is entitled to be protected unless some dominant improper motive on his part is proved. The usual motive relied on is that of injuring the plaintiff, but there may be others. If it can be proved that the defendant did not believe what he published was true, that is generally conclusive evidence of express malice. Publication without considering or caring whether the matter be true or not may be sufficient.

178 Positive belief in the truth of what is published will usually protect the defendant unless he can be proved to have misused the occasion, although the Court should be slow to draw an inference that he has misused the occasion. The plaintiff will succeed in proving the existence of express malice if he can show that the defendant was not using the occasion honestly for the purpose for which the law gives protection, but was actuated by some indirect motive not connected with the privilege. Malice does not necessarily mean personal spite or ill-will against the plaintiff, since it is the misuse of the occasion which takes away the privilege.

179 A person whose character or conduct has been attacked may make statements defamatory of his attacker to refute the charges made against him and to vindicate his character, provided the statements are published bona fide and are fairly relevant to the accusations made. Mere retaliation, which cannot be described as an answer or explanation, is not protected, but the defendant is not required to be diffident in protecting himself and is allowed a considerable degree of latitude in this respect: Watts v Times Newspapers [1997] QB 650.

180 As to fair comment, proof that the defendant did not really entertain the opinion expressed in such comment, or published it knowing that it was unjust, would amount to malice, for fair comment must be the honest expression of the real opinion of the defendants when they wrote it. Comment which may be objectively and prima facie fair may become unfair if made with a malicious motive.

181 The defendants contended that the defendants' publication was circulated to school canteens pursuant to a reciprocal interest existing between the defendants and the readers of the newsletter. The interest was said to be an interest in information about, and a critical evaluation of, products available in school canteens in Western Australia. The newsletter was said to be a reasonable means of communicating the statements: Duane v Granrott [1982] VicRp 76; [1982] VR 767 at 780. Reference was made to evidence given at the trial that school canteen supervisors and staff members relied on the newsletter for guidance on matters concerning the health and safety of new food products. The public health issues warranted the protection of the common interest by the means employed by the defendants.

182 It was said further in regard to malice that the publication was clearly concerned with the health of school children and the evidence and demeanour of the first defendant in the witness box made this clear. She did not act for some ulterior or improper motive and there was no basis for the plaintiffs' assertion in the claim that she was motivated by commercial greed in seeking to promote the defendants' product Mamee Noodles. She was genuinely indignant to have discovered deficiencies in the JJ Noodles Snacks labelling, especially because of the specific earlier warning that she had given to Mr Stein in regard to the product.

183 The plaintiffs submitted that the defendants had no public duty to communicate with the supervisors and staff of school canteens. The newsletter was simply a manifestation of the defendants' desire to sell products to schools. The relationships between the defendants and the schools were essentially of a commercial character, with many of the school canteen consumers buying exclusively from the defendants for their dry good requirements. The existence of a public interest in debate about health issues should not be used to allow one competitor to destroy the reputation of another in order to maintain a monopoly of supply.

184 The plaintiffs submitted further that the means adopted by the defendants to disparage the plaintiffs and their product and the extremity of the language used was disproportionate to any occasion of privilege that might be found to exist and, in any event, established that the defences of qualified privilege and fair comment were negated by improper purpose and malice.

Resolution of Fair Comment and Qualified Privilege Issues

185 It emerges from earlier discussion that, in my view, the imputations complained of in par 5 and par 6 of the statement of claim amounted to expressions of opinion on a matter of public interest. In dealing with the defendants' fair comment plea I left outstanding the question of whether these expressions of opinion represented beliefs honestly held by the defendants in respect of matters of fact contained in or indicated by the article complained of. I left outstanding also the question of whether this line of defence was negated by malice or improper purpose.

186 It follows from earlier discussion that the labelling of the plaintiffs' JJ Noodles product was subject to shortcomings of the kind indicated in my summary of the Biffin letter. The tone of the letter does not suggest that the shortcomings were thought to be matters of acute concern. Mr Hoare said that deficiencies of the kind identified in his report did not give rise to a health risk and variations between label description and various batches of the product were not uncommon. Having regard to the evidence of Mr Hoare and Ms Miller, I have found that the shortcomings under notice should not be characterised as serious breaches of the regulatory laws or as a threat to the health of consumers and children. The relevant legal principles establish that in cases involving imputations of dishonourable conduct a comment cannot be regarded as fair if it is not a reasonable inference from the proved facts.

187 Against this background, I consider, and so find, that the first defendant did not honestly hold the opinions reflected in the four imputations complained of with the result that the defence of fair comment is not available. Her opinions were too extreme and disproportionate to the shortcomings on the label under notice. The views she expressed were reckless. I am persuaded to the view that in the expression of her views she was influenced by a determination to damage the status of a competitor, bearing in mind that the defendants were marketing a rival product, Mamee Noodles.

188 It follows from this conclusion that the defence of fair comment must fail, because what she said cannot be regarded as a reasonable inference from the proved facts. Further, and in any event, I consider that the matters I have just mentioned amount to an improper purpose with the result that the defence of fair comment is extinguished.

189 Let me now turn to a resolution of the issue arising under the defendants' plea of qualified privilege. The views I have just expressed have a bearing upon this issue also.

190 I am satisfied on the balance of probabilities that the defendants' publication was arguably prepared and circulated on an occasion of privilege. Putting to one side the controversy created by the marketing of the JJ Noodles product, I am satisfied that for the most part the defendants by their newsletter made a conscientious attempt to keep school canteens informed about new products. The newsletter was published to a comparatively narrow circle and it can therefore be said that the necessary reciprocity of interest was present.

191 I consider, however, that in her review of the JJ Noodles product the first defendant went too far. The extremity of her language and of her opinions went beyond the requirements of what might otherwise have been regarded as a privileged occasion. For that reason alone, the defence of privilege must fail.

192 Further, and in any event, I consider that the defence is negated by malice and improper purpose for the reasons I have just expressed in regard to fair comment. Those reasons are reinforced by the reasoning of Mason J in Calwell v Ipec (supra). His Honour recognised that where the words employed are utterly disproportionate to the facts this amounts to evidence of malice on the footing that the extremity of the language is only explicable by reference to the existence of ill-will.

193 There are three purposes to be served by damages awarded for defamation. These are consolation for the personal distress and hurt caused to the plaintiff by the publication, reparation for the harm done to the plaintiff's personal and (if relevant) business reputation and vindication of the plaintiff's reputation. These purposes overlap considerably in reality with the result that the amount of a verdict is the product of a mixture of inextricable considerations. The first two purposes are frequently considered together and constitute consolation for the wrong done to the plaintiff. Vindication looks to the attitude of others to the plaintiff, with the sum to be awarded in this respect being at least the minimum necessary to signal to the public the vindication of the plaintiff's reputation: Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1993) 178 CLR 44.

194 In Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027 Lord Hailsham of St. Marylebone L.C. said at 1071:

"In actions of defamation and in any other actions where damages for loss of reputation are involved, the principle of restituio in integrum has necessarily an even more highly subjective elements. Such actions involve a money award which may put the plaintiff in a purely financial sense in a much stronger position than he was before the wrong. Not merely can he recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge."

195 In Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 it was held that a plaintiff in defamation who has not pleaded special damage may, nevertheless, give evidence of some particularity about the state and nature of his business, and changes which he alleges have been brought about in it by the defamation of which he complains; but he may do this only for the purpose of enabling the jury properly to evaluate his general damage. Material which would be admissible in proof of special damage may also be admitted in proof of general damage.

196 This view of the matter was affirmed by the Full Court in this State in Munro v Coyne [1990] WAR 333 in which it was held that although no claim was made by way of special damage the jury were entitled to award damages in respect of general and business reputation. The decision of the Full Court was subsequently reversed on appeal to the High Court in Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211 on the question of whether a grossly excessive verdict in a libel case can be set aside. However, Toohey J of the High Court observed at 231 that pursuant to the decision in Andrews v John Fairfax & Sons Ltd (supra) the Courts below were entitled to accept that damages could be awarded in respect of general and business reputation notwithstanding that no claim was made by way of special damage.

197 In the same case Toohey J also made some observations about persistence in the defence of justification. He indicated at 237 that persistence in a plea of justification may be relevant to the amount of compensatory damages awarded. An early withdrawal of the defamatory statement will ordinarily serve to reduce the harm suffered by the plaintiff; persistence in seeking to justify the statement may increase the scope of the publication and the effect on those who read it. But compensation for continuing harm is a component of normal compensatory damages and in the absence at least of lack of bona fide, impropriety or unjustifiability, persistence in a plea of justification does not warrant an award of aggravated damages: Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 at 514 applied. Dawson and McHugh JJ concurred in that respect.

198 Having regard to these decisions, I ruled during the course of the trial that par 7 of the statement of claim in speaking of an injury to the plaintiffs and their reputation, standing, profession, occupation and credit should be regarded as essentially an assertion of damage impacting upon the business reputation and standing of the plaintiffs. Accordingly, the plaintiffs were allowed to lead evidence bearing upon such matters including the cancellation of a particular order upon the basis that the evidence would permit the Court to evaluate the claim in general damages. The plaintiffs did not attempt to translate the loss of a particular order into specific figures.

199 The large subjective element in an award of damages in a defamation case makes it impossible to put forward any objective standards by which to gauge the right figure in any particular case. Nevertheless, it is possible to identify the factors which can properly be taken into account in assessing damages. In addition to the underlying rationale of compensatory damages in such a case mentioned earlier, the courts commonly take account of the seriousness of the libel, the injury to the plaintiff's feelings including aggravating factors, the extent of the publication and mitigating factors: Duncan and Neill on Defamation (2nd ed) par 18.10. Awards of damages in other defamation cases provide little guidance. That is because the circumstances of defamation cases are almost infinitely various: Todd v Swan Television and Radio Broadcasters Pty Ltd [2001] WASC 334 at par 110.

200 Aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done, whereas exemplary damages are intended to punish the defendants and presumably to serve one or more of the objects of punishment, namely, moral retribution or deterrence: Uren v John Fairfax & Sons [1966] HCA 40; (1966) 117 CLR 118.

201 There is a wide range of circumstances which might warrant an award of aggravated damages, encompassing both conduct in the publication of the defamatory material and conduct thereafter. Damages will be aggravated only by conduct which is unjustifiable, improper or lacking in bona fides.

202 Exemplary damages will be awarded in circumstances in which there is a conscious wrongdoing in contumelious disregard of another's rights or in circumstances in which it is open to the Court to find that the defendant recklessly and arrogantly attacked the plaintiff's reputation for the purpose of publishing a sensational story to attract custom: Whitfeld v De Lauret & Co Ltd [1920] HCA 75; (1920) 29 CLR 71. Steytler J observed at 19 in Oracle International Pty Ltd v West Australian Newspapers Ltd, unreported; SCt of WA; Library No 970696; 11 December 1997 that he would be loathe to say that a failure to apologise could never give rise to exemplary damages.

203 The first plaintiff, Mr Essey, gave evidence of his outrage at the allegations made against him. He further gave evidence to the effect that he had been doing business in the Perth area for some 20 years and had a natural concern that these allegations would reach persons known to him in the Perth area. The witnesses Stace, Fraser, Verbunt and Barton gave evidence to the effect that they recognised Mr Essey as being the controller of All-Fect Distributors when reading the newsletter.

204 On any view of the matter, the article complained of contained trenchant and disparaging comments about the persons responsible for marketing JJ Noodles within Western Australia. I have already found that in publishing the article the defendants were interested in promoting Mamee Noodles at the expense of a rival product. The plaintiffs submitted that there was a significant injury to the plaintiffs' feelings and to his business reputation and without any apology or apparent contrition on the part of the defendants whatsoever. Reference was also made to persistence in a plea of justification.

205 Counsel for the plaintiffs therefore submitted that for these reasons a substantial award of damages should be made. Having regard to the decided cases it was also necessary to make such an award pursuant to the principle that vindication of the plaintiff is an essential part of the remedy in a defamation action. The award of damages must be sufficient to "nail the lurking lie".

206 The defendants contended that the first plaintiff was unable to provide reliable evidence in relation to the impact (if any) of the defendants' publication on the business of All-Fect Distributors. Counsel pointed to admissions made by Mr Essey under cross-examination that he did not keep paperwork and at best could only provide "guestimates" as to the effect upon his business. The evidence given by the first plaintiff in that regard did not comply with the requirements enunciated in the Andrew's case (supra). It was apparent from that case that a plaintiff must provide evidence of the structure of the business, its earnings, and the changes to those earnings. Further, the evidence of the first plaintiff evinced a lack of proper differentiation between products imported by the second plaintiff into Australia and was inconsistent in respect of sales figures of JJ Products in South Australia for the calendar year 1997. It was therefore apparent that weight could not be attached to the claim being advanced. More particularly, the evidence of Mr Stace of Confectionary Distributors as to the cancellation of an order for JJ Noodles Snacks as a consequence of the defendants' publication was ambiguous and unsatisfactory with the result that it should be disregarded.

207 The defendants submitted further that the plaintiffs did not have any or any significant reputation in Western Australia amongst readers of the newsletter. Reference was made to the evidence of witnesses such as Ms Terenciuk and Ms Bowler that they did not know of the plaintiffs. It must follow that the impact of the defendants' publication on the reputations of the plaintiffs was trivial or non-existent.

208 It was said further on behalf of the defendants that the first defendant held genuine concerns for the health and safety of school children and this should be taken into account. The public spirited nature of the defendants' actions was evident in the steps taken to contact public health authorities and arrange for analysis of JJ Noodles Snacks and the relevant labelling. Even if the defendants failed in respect of justification, they could rely on mitigation of damages on partial justification in that, on any view of the matter, the labelling was deficient to some degree. Evidence in support of a plea of justification which fails is admissible in reduction of damages: Australian Broadcasting Corp v McBride [2001] NSWCA 322; (2001) 53 NSWLR 430 at pars 14 and 15.

209 I am conscious that in the realm of defamation an award of damages depends upon the circumstances of the particular case. However, it will be useful to keep in mind the approaches of the Court in some previously decided cases in this State.

210 I referred to the decision of the Full Court in Munro v Coyne (supra) in earlier discussion. In that case, although no claim was made by way of special damages, it was held the jury were entitled to award damages in respect of an injury to general and business reputation. That was a case in which publication of a piece in a newspaper was thought to have impacted upon a proposed land development being undertaken by the plaintiff. It is important to understand that the evidence concerning the plaintiff's business reputation was not strong and his experience as a land developer was rather meagre. In the final analysis, the High Court was not prepared to displace the jury's award of $150,000. For present purposes, however, it is significant that a majority of the Full Court was of the view that the appropriate award of general compensatory damages was $50,000.

211 In Henry v TVW Enterprises Ltd (1990) 3 WAR 474 a television programme about a certain technique of dental care was thought to have defamed a dentist who was not directly identified by imputing that he was infected with a contagious disease. General damages of $60,000 were awarded having regard to the integrity and reputation of the plaintiff and the fact that the defamation struck at the heart of his self-respect. Exemplary or punitive damages of $40,000 were awarded against the presenter in respect of the reckless action by the editor of including the footage when he appreciated that some people might identify the plaintiff.

212 In Corse v Robinson, unreported; FCt SCt of WA; Library No 970669; 8 December 1997 allegations were made that the branch secretary of a trade union and other officials of the union had misused their positions in relation to the salaries they were receiving. A letter written by the defendant to the officer in charge of the Police Fraud Squad, purporting to lodge an official complaint, was held to be defamatory. The trial judge noted that the plaintiff was distressed by the publication and no apology was forthcoming. While the publication was to a limited number of persons, publication to them would tend to be highly detrimental to the respondent because they were in effect his employers. It was a deliberate publication of a serious libel calculated to bring the defendant down and was actuated by express malice. The trial judge awarded $30,000 by way of compensatory damages and an additional $15,000 as exemplary damages. These awards were upheld by the Full Court on appeal. The Full Court was not persuaded that the amounts were so low as to be outside the range of a proper award.

213 More recently, in Heytesbury Holdings Pty Ltd v City of Subiaco (supra) the plaintiff sued for libel in respect of a press release which had been the subject of limited publication. The press release suggested that the plaintiff company was not a good corporate citizen by reason of its refusal to pay certain moneys owed to the local municipality. The press release indicated also that the plaintiff had not been a good tenant or a good ratepayer. These imputations were held to be defamatory of the plaintiff and were not excused by the defences of fair comment and qualified privilege.

214 Steytler J held that whilst a corporation may not be awarded damages for injured feelings, it may receive an award of general damages in order to repair damage caused by the injury to its business or trading reputation without proof of any specific loss of business. His Honour affirmed the rule that in the case of libel, damage arising from a publication is presumed: Ratcliffe v Evans [1892] 2 QB 524 at 530 applied. In the circumstances, an award of $5,000 inclusive of interest was held to be appropriate in order to compensate the plaintiff company and to vindicate its reputation. No basis for an award of exemplary damages was held to have been made out.

215 When I turn back to the circumstances of the present case, I take account of the fact that the defendants' publication was directed to a comparatively narrow circle of readers, that is to say, persons associated with school canteens. I take account of the fact also that the plaintiff company was not generally known to the readership although, as I have found, there were readers who identified the plaintiff company and its managing director as the subject of the attack. Nonetheless, the defendants' publication was an influential forum for the expression of opinion which did have an impact upon the business reputation of both plaintiffs. It follows from earlier discussion that the damage arising from a publication held to be defamatory is presumed. There is some evidence before me that in the present case the defendants' publication led to consequences adverse to the plaintiff company.

216 I have previously noted that, in my view, the language used by the first defendant was disproportionate to the requirements of the occasion. I am satisfied on the evidence before me that the first plaintiff was undoubtedly annoyed when the contents of the article were brought to his attention. I take account also of the fact that an apology and retraction was sought by his solicitors but no satisfactory response was received. Indeed, the defendants continued to assert that the plaintiff company was in breach of the regulatory requirements and maintained their stance at the trial of the action. However, I consider that the first defendant wrote the article with a mixture of motives and although the words she used were misguided, and ultimately defamatory, I should not overlook the fact that she believed she was contributing to a debate in the public interest.

217 I am not convinced that the first plaintiff was deeply hurt at a personal level by the words complained of and I am not persuaded that this case is one in which it can be said that the defamation struck at the heart of the first plaintiff's self-respect. The first plaintiff acknowledged that he was in business to make a profit and was obviously familiar with the abrasive nature of competitive business operations. I have noted that although a company may recover damages for injury to its business reputation it does not receive an award of damages for injured feelings.

218 When I draw these various considerations together I consider that the first plaintiff is entitled to an award of compensatory damages including aggravated damages. I consider that the aggravated damages in the present case are principally referable to the extremity of the language used and the failure to apologise when an apology was sought. I am influenced also by the defendants' improper purpose in seeking to promote their own product at the expense of a rival product. I consider that the first plaintiff should be allowed the sum of $40,000 by way of general damages. The second plaintiff, being the plaintiff company, will be allowed the sum of $20,000 by way of general damages, being a figure that does not include any component for aggravated damages.

The Plaintiffs' Claim for Exemplary Damages

219 It emerged from my earlier review of the pleadings that the plaintiffs' statement of claim includes a claim for exemplary damages. The facts and matters relied on in support of such a claim are set out in par 9 of the claim and include reference to the second defendant having published the matter complained of knowing that it would have a tendency to lower the reputations of the plaintiffs in the estimation of those to whom the newsletter was likely to be published; cause those persons to shun and avoid the plaintiffs and to bring the plaintiffs and each of them into odium, ridicule and contempt. Such knowledge is to be inferred from the fact that the imputations are obviously defamatory and the emotive and inflammatory language used. Reference is made also to the alleged fact that the second defendant marketed noodles to school canteens in competition to the second plaintiff.

220 The plaintiffs say further that the second defendant published the matter complained of knowing that it was false or with a reckless disregard to the truth or falsity of it. Such knowledge is to be inferred from the falsity of the meanings and the fact that no attempt was made to contact the plaintiffs or either of them to seek to determine the truth of the matters complained of. It is said further that the second defendant has refused to apologise and has maintained a spurious defence of justification to the plaintiffs' claim.

221 The defendants submitted that the plaintiffs should not be awarded exemplary damages because the defendants did not intend the article complained of to be identified by readers of the newsletters as relating to the plaintiffs. The first defendant simply used JJ Noodles Snacks as an illustration of improper labelling and did not know that the product was associated with either plaintiff. The publication was not motivated by malice or by a need or desire to advance the defendants' commercial interest in relation to Mamee Noodles. This was apparent from the comparatively small revenue generated by the second defendant in respect of the Mamee Noodles product. There was evidence before the Court that Ms Harding was in fact looking for a substitute product for Mamee Noodles for school canteens. When these various matters were taken into account the claim for exemplary damages could not be sustained.

222 I have to say that I am persuaded by the defendants' submissions in regard to the plaintiffs' claim for exemplary damages. I have noted in my review of the decided cases that exemplary damages will be awarded in circumstances in which there is a conscious wrong doing in contumelious disregard of another's rights or in circumstances in which it is open to the Court to find that the defendant recklessly attacked the plaintiff's reputation. It is true, as I have already found, that the defendants' publication was disproportionate to the requirements of the occasion. However, I have noted also that the defendants' actions were partly influenced by a misguided understanding of what her entitlements were in contributing to a debate about a matter of public interest. In these circumstances, I am not persuaded that an award of exemplary damages is appropriate.

223 In summary, then, the first plaintiff will be awarded the sum of $40,000 by way of general damages which should be taken to include an allowance for aggravated damages. The second plaintiff will be allowed the sum of $20,000 by way of general damages. The plaintiffs' claim for exemplary damages will be dismissed.

224 The plaintiffs' statement of claim included a claim for interest pursuant to s 32 of the Supreme Court Act 1935. Previously decided cases indicate that interest ought to be awarded to a successful plaintiff in a defamation action to the extent that it is fair and proper on the amount of his damages from the date of publication to the date of judgment: John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 143 per McHugh JA. Accordingly, the plaintiffs will be allowed interest on the award of damages from 1 October 1997 to the date of judgment at the rate of $6.00 per centum per annum.

225 The defendants alleged that the first plaintiff, Mr Essey, was the author of the plaintiffs' publication and acted for All-Fect Distributors, the second plaintiff, in publishing the circular letter in question which was addressed to the "Canteen Supervisor/Buyer". The defendants' case was that this publication was sent to all schools in Western Australia as well as to all distributors and to potential buyers. No attempt was made by the plaintiffs to ascertain from the defendants to whom the defendants' publication had been sent. The defendants contend that these matters and especially the extent of the circulation have a bearing upon issues relating to qualified privilege and damages.

226 It was further alleged by the defendants that the defendants were known to the recipients of the GUYS newsletter in September 1997 who would readily identify the defendants when reading the plaintiffs' publication in October 1997. The defendants relied upon evidence given at the trial that in October 1997 Ms Harding had a high profile in the canteen food industry as a result of the newsletter, her consultancy work and visiting many school canteens as a principal of GUYS. Reference was made also to the conferences co-ordinated and presented by the first defendant in 1995 at the Perth Town Hall, which was attended by about 350 persons, and a further conference in 1996 at the University of Western Australia.

227 The defendants pleaded that their reputations were damaged by the matter complained of which in its natural and ordinary meaning conveyed various imputations each of which was defamatory of the defendants, namely, that they caused misleading information to be published in the September 1997 issue of Canteen News (par 20.1 and par 21.1); that they deliberately caused misleading information to be published (par 20.2 and par 21.2); that they caused false information to be published (par 20.3 and par 21.3); that they deliberately caused false information to be published (par 20.4 and par 21.4); that they did not have the qualifications to express an opinion on matters such as illegal packaging and health dangers posed by such packaging in relation to products such as JJ Noodles (par 20.5 and par 21.5); that they showed blatant ignorance in expressing and publishing an opinion on such matters (par 20.6 and par 21.6); that their comments on JJ Noodles had a purpose and aim that was not in good faith (par 20.7 and par 21.7); that their comments on JJ Noodles attempted to prevent fair and honest trade (par 20.8 and par 21.8); that they engaged in the practice of fooling people as a method of doing business (par 20.9 and par 21.9). I will call these assertions the counterclaim imputations.

228 The plaintiffs by their defence to the counterclaim admit that the plaintiffs' publication was mailed to certain schools in Western Australia. They deny that the counterclaim imputations are imputations that are fairly able to be drawn from the words in the publication and defamatory of the first and/or the second defendant. As I indicated earlier, the plaintiffs also raised pleas of justification and qualified privilege. They say that the plaintiffs' publication was made in order to mitigate the damage occasioned by the defendants' publication.

229 Having regard to the legal principles previously discussed, I must first consider whether the counterclaim imputations are fairly able to be drawn from the words in the publication and are defamatory of each of the defendants. It will then become necessary to consider the various defences raised by the plaintiffs' defence to the counterclaim.

230 I consider that the imputations complained of can be drawn from the words in the plaintiffs' publication and are defamatory of each of the defendants. The evidence before me clearly establishes that the first defendant and her company were well-known in the school canteen community and I therefore have little doubt that the defendants were identified by the words complained of and that their reputations were adversely affected. It therefore becomes necessary to look closely at the defences to the counterclaim.

231 The plaintiffs rely on the defence of justification in relation to the defendant's counterclaim. The plaintiffs are therefore obliged to satisfy the Court that the imputations conveyed by the publication were true.

232 The defendants submitted that there was a lack of truth. The line of attack in the plaintiff's publication concerning Mamee Noodles was misconceived and in error. There was evidence before the Court that the defendants sold Mamee Noodles for 35 cents, not 50 cents as stated in the plaintiff's publication. It was said further that there was an insufficient basis for an attack upon the defendants.

233 I am not satisfied that in the circumstances of the present case the counterclaim can be defeated by the plaintiffs' plea of justification. I have noted in earlier discussion that the plea of justification must be directed to the imputations that are found to be reflected in the words complained of. In this case, the emphasis in the imputations is upon the deliberate quality of the defendants' actions. In earlier discussion I acknowledged that the first defendant was knowledgeable about foods standards and had a concern for the welfare of students. Her defamatory statements were occasioned by the over-zealous nature of her conduct and by a protective attitude towards her own products, rather than by a wilful determination to mislead. I am not persuaded that the matters raised by way of justification are sufficient.

234 The plaintiffs rely also on the defence of qualified privilege in relation to the defendants' counterclaim. The plaintiffs say essentially that the plaintiffs' publication was made in reply to an attack on the character of the plaintiffs in the publication and that the publication was fairly relevant to the accusations made against the plaintiffs. The plaintiffs recognised that the onus of proof lay upon them to establish that the letter was published on an occasion of qualified privilege.

235 The plaintiffs submitted that when a person has been attacked seriously and abusively, the terms of his reply are not to be measured in nice or precise scales: Penton v Calwell [1945] HCA 51; (1945) 70 CLR 219 at 243. According to Lord Oaksey in Turner v Metro-Goldwyn-Mayer Pictures Ltd [1950] 1 All ER 449 at 471:

"The law does not concern itself with niceties in such matters. If you are attacked by a prize fighter you are not bound to adhere to the Queensbury rules in your defence."

236 In other words, a certain latitude is afforded to the person attacked to make his reply.

237 It is true that the plaintiffs' publication suggests that the claims it was seeking to answer were of "unqualified opinion" and showed blatant ignorance of the true facts and suggested that the defendants had unjustly misinformed their readers and made false representations of fact. However, these comments were made on an occasion of qualified privilege in that the plaintiffs had a duty and interest to respond to an attack and did so by an appropriate means and in a proportionate manner.

238 When the matter was viewed in that light, the first plaintiff was entitled to describe the matter complained of as, in general terms, untrue information and was entitled to question the intentions of his competitor as the author of the attack. He honestly believed that an attempt was being made by a competitor to stop sales of his product.

239 The defendants contended at the trial that the qualified privilege claimed by the plaintiffs in respect of the counterclaim never arose because the defendants' publication had not identified the plaintiffs. Further, and in any event, the plaintiffs' publication went far beyond a legitimate reply and was not published in good faith. Further, malice on the part of the first plaintiff (which could be attributed to the second plaintiff) was to be found on the basis that the first plaintiff's demeanour given in the witness box showed that he wrote the letter to vent his personal spite and ill-will towards the first defendant and her business, and to exact revenge.

240 It was significant, the defendants argued, that the first plaintiff on his own admission did not make any enquiries or check as to the range of the defendants' publication or as to the nature of the defendants' involvement in the sale of Mamee Noodles either as to price or as to the extent of the sales. Further, he failed to make any enquiries or check whether the label complied with Western Australian law before writing the plaintiffs' publication. It could therefore be inferred that the first plaintiff had no factual basis for questioning the integrity, honesty, bona fides and business practice of the defendants. A finding should be made that the plaintiffs' publication was written out of spite and with a specific intention to inflict maximum harm on the reputations and business standing of the defendants. Further, the plaintiffs introduced irrelevant matters into the publication by emphasising the allegedly improper motives of the first defendant and GUYS.

241 I recognise that if the defendants' publication did not identify either of the plaintiffs to its readers then it could be forcefully argued that an occasion of privilege did not arise in respect of the plaintiffs' publication. However, as I have already indicated, I consider that the plaintiffs were identified and the consequence of such a finding is that there is a basis for saying that the plaintiffs were entitled to respond to the trenchant attack that had been made upon them provided that what was done did not exceed the exigencies of the occasion.

242 It follows from this that I consider that the plaintiffs' publication and the counterclaim imputations reflected in it were assertions made on an occasion of qualified privilege and that this line of defence is open to the plaintiffs.

243 The first plaintiff's evidence at trial was to the effect that he sought to send his reply to those same schools he thought had received the matter complained of. His evidence as a whole suggests he tried to make his response proportionate to the problem he sought to cure. In my view, having been subjected to a trenchant attack, some latitude should reasonably be allowed to the plaintiffs in seeking to answer the attack. They had to move quickly. Constraints of time and circumstance did not permit them to make a full inquiry as to the scale of the defendants' operations and the circulation of its newsletter. In that regard, it is important to bear in mind that there had been exchanges between the solicitors for the plaintiffs and the first defendant and those exchanges had failed to produce a satisfactory result. The defendants were uncooperative and defiant.

244 It follows from these observations that I am satisfied that the counterclaim imputations were published on an occasion of privilege. I consider that the nature of the plaintiffs' response was commensurate to the requirements of the occasion. I am not satisfied that the claim of privilege is negated by malice or improper purpose. It follows that, in my view, the defendants' counterclaim should be dismissed.

245 It follows from the conclusion I have just expressed that it is not strictly necessary for me to deal with the defendants' counterclaim for damages. However, for the sake of completeness, and in case I be wrong in the conclusion I have come to, I will proceed to deal with the question of compensation as if the defendants' claim had succeeded. In doing so, I draw upon the principles concerning damages in defamation previously reviewed. I will not repeat them.

246 The defendants by their counterclaim claim both compensatory and exemplary damages. This plea is reflected in par 22A of the counterclaim. It is said that the plaintiff's publication was published by the first plaintiff to recipients intentionally knowing that the same would have a tendency to bring the defendants and each of them into public ridicule, hatred and contempt and to cause the recipients to avoid having any business dealings with the defendants. Such knowledge is to be inferred from the circumstances that the imputations in the counterclaim are obviously defamatory and the exaggerated and emotive language used. Reference is also made to the attribution of improper motives to the defendants. It is said further that the first plaintiff published the matter complained of knowing that it was false or with a reckless disregard as to truth or falsity. Further, the plaintiffs have refused to publish an apology and have maintained untenable pleas of justification.

247 The defendants rely upon evidence that Ms Harding was the predominant representative of GUYS in the school canteen market and essentially personified GUYS. The plaintiffs' publication was published to all schools in Western Australia and potential buyers and, on the defendants' case, was used as a tool in a sustained commercial campaign. They say that substantial damages awards have been made in instances where the career and professional prospects of individuals have been seriously affected by defamation. Coyne v Citizen Finance Ltd (supra); Carson v John Fairfax & Sons (supra); Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176.

248 The defendants rely upon evidence given by the first defendant at trial that as a result of the plaintiffs' publication she lost all confidence in herself with the result that she ceased to work at GUYS and distanced herself from the business. Her personal career as a school canteen consultant in her own right and as the personification of GUYS in the school canteen market has been substantially damaged.

249 The defendants submitted in support of the claim for exemplary damages that the plaintiffs' publication was used as part of a campaign to gain financial advantage for the plaintiffs and to advance their commercial interests in the Western Australian school canteen market through their State distributors. In that regard, reference is made to the letter from Mr Stein to Confectionary Distributors dated 21 October 1997 in which the latter firm is urged to publish the plaintiffs' publication to every school, with free samples of JJ Noodles Snacks, using their "own reps and wholesalers". It is also stated "We believe that you and the wholesalers drawing from you have a unique opportunity to greatly increase your overall business in the school canteen area." The defendants also placed reliance upon the fact that no apology has been offered by the plaintiffs to the defendants, and the first defendant's conduct at trial was the very opposite to an apology. The plaintiffs persisted with a defence of justification.

250 The plaintiffs submitted that the alleged impact of the plaintiffs' publication upon the first defendant was exaggerated. The respective publications gave rise to a debate about the adequacy of labelling but this could not be regarded as responsible for the first defendant's alleged lack of confidence. Evidence and allegations concerning the supposed curtailment of her career were not convincing and were out of proportion to the matters under notice. Further, and in any event, there was no compelling evidence from the various witnesses called by the defendants concerning the standing of GUYS in the school canteen community which suggested that canteen managers or staff thought any less of the first defendant as a consequence of the plaintiffs' publication. The first defendant's answers to interrogatories refer to her standing and reputation having been undermined in the eyes of Ms Terenciuk of the Perth Modern School canteen but this was a very limited basis for the claim and did not appear to be supported by Ms Terenciuk's evidence at the trial. Her evidence at the trial was directed to showing complete support for the first defendant.

251 As to exemplary damages, the plaintiffs submitted that no such damages should be allowed. On any view of the matter, the plaintiffs' publication was a response prompted by the defendants' earlier attack upon the plaintiffs. Even if it be thought that the plaintiffs had exceeded the boundaries of privilege, it could not be said that they had acted unreasonably or in a contumelious manner that was deserving of the punishment implicit in an award of exemplary damages. Likewise, an apology could not reasonably be expected of the plaintiffs in circumstances where they were simply responding to a prior attack.

252 If it be held, contrary to my earlier findings, that the defendants, or either of them, are entitled to compensatory damages, I consider that an award must, in any event, proceed from the premise that the plaintiffs were essentially responding to a prior attack, and that the nature of the plaintiffs' response was comparatively restrained. Nonetheless, a finding in favour of the defendants imports an acknowledgement that they were subjected to a deliberate attack. When I weigh up these competing considerations, I consider that the first defendant would be entitled to recover the sum of $30,000 by way of general damages and the second defendant would be entitled to recover the sum of $15,000. In the circumstances of the present case, I am not persuaded that the plaintiffs acted in contumelious disregard of the defendants' rights, for, essentially, the plaintiffs were responding to a prior attack. I am not persuaded that the defendants are entitled to recover exemplary damages.

253 In summary, then, the first plaintiff will be awarded the sum of $40,000 by way of general damages. The second plaintiff will be allowed the sum of $20,000 by way of general damages. The plaintiffs' claim for exemplary damages will be dismissed. The plaintiffs will be allowed interest on the total award of damages from 1 October 1997 to the date of judgment at the rate of $6.00 per centum per annum.

254 The defendants' counterclaim will be dismissed.