Field v Nationwide News Pty Limited

Field v Nationwide News Pty Limited - [2009] NSWSC 1285 - NSWSC 2008 case summary — Zoe

[89]

(c) complaints by guests to the Trust or the Office of Fair Trading without any consequential records created within the Trust or the Office of Fair Trading. 21 The Plaintiff was cross-examined with respect to documents contained in these three classes. A number of the guests, whose complaints to the Trust or the Office of Fair Trading were admitted, gave evidence (Mr Terracini and Mr Shapero) or provided statements which were tendered, without objection, by the Defendant (Exhibit 35). 22 I approach the determination of the issues arising at trial upon the basis that, with respect to the Defendant's guest evidence, the greatest weight will be given to evidence where the guest was called, or where the guest's statement was tendered without objection. 23 Less weight will be given to guest complaint evidence in Exhibit 23 where the complainant was not called as a witness by the Defendant nor a statement of the witness tendered without objection. Within Exhibit 23 are documents which demonstrate that a number of complaints were brought to the attention of the Plaintiff at the time. The Plaintiff was cross-examined by reference to documents in Exhibit 23. 24 With respect to the statements of the Defendant's witnesses admitted by consent and without the requirement for cross-examination (Exhibit 35), I see no reason not to accord significant weight to the evidence contained therein. This evidence is in a different category to the business records. The Defendant intended to call each of these 18 witnesses to give evidence, but the Plaintiff indicated that the statements of these persons could be admitted, by consent, without them attending for cross-examination. The Plaintiff had an opportunity to challenge or test the evidence of these 18 witnesses, but decided not to do so. This situation may be contrasted with the position with respect to the business records (Exhibit 23). With respect to complainant guests who did not give evidence or make a statement, the Defendant did not call these persons and the weight to be attached to the business record evidence must be assessed upon the basis that the Plaintiff did not have an opportunity to test, by way of cross-examination, the authors of the various records. 25 It remains a matter for the Court to assess the totality of the evidence, oral and documentary, for the purpose of making findings of fact which are required for the purposes of the proceedings.

[131]

Richardson: "Mr Field wrote a letter to me which he copied to Bob Debus." Silmalis: "I'd be interested in getting a copy." Richardson: "Okay, I'll come and give it to you." Silmalis: "Do you have Archer Field's mobile number?" Richardson: "No, I don't." 47 Ms Silmalis stated that thereafter Mr Richardson provided to her a copy of a letter dated 4 November 2005 from the Plaintiff to Mr Richardson. It is apparent, from the published article, that Ms Silmalis used this letter as a basis for expression of the Plaintiff's side in response to what had been said in the Legislative Assembly about Jenolan Caves House. 48 Over objection, I permitted the Plaintiff to call Mr Richardson in reply (T1609). Mr Richardson is a member of the Legislative Assembly of New South Wales. His evidence related to a single issue. Ms Silmalis gave evidence in the Defendant's case of a conversation she had with Mr Richardson in which she sought from him (unsuccessfully) the Plaintiff's mobile phone number. Mr Richardson gave evidence concerning his conversation with Ms Silmalis in November 2005. In examination-in-chief, he stated that he had three telephone numbers for the Plaintiff at that time - a home phone number, a Jenolan Caves House phone number and a mobile phone number. In chief, he said "I gave her at least his home number and probably his number at Caves House as well" (T1610.14). Under cross-examination, it became increasingly clear that Mr Richardson had a very limited recollection of the conversation. He had no recollection of discussing with Ms Silmalis a letter which the Plaintiff had written to him, nor that he offered (and provided) a copy of this letter to her. I accept that this topic was discussed between Ms Silmalis and Mr Richardson and that a copy of the letter was provided to her. It was put to Mr Richardson in cross-examination that he had provided the Plaintiff's business phone number to Ms Silmalis (T1615). Mr Richardson's cross-examination concluded with an acknowledgement that he did not recall which of the Plaintiff's telephone numbers he provided to Ms Silmalis (T1616). I accept that Mr Richardson was doing his best to give an accurate account of the telephone conversation he had with Ms Silmalis more than three years before. I accept that he provided a telephone number for the Plaintiff to her, but I do not accept that it was the Plaintiff's home telephone number. In the end, as I have observed, Mr Richardson was entirely uncertain as to which telephone number he provided to Ms Silmalis. 49 I express the following conclusions with respect to efforts by Ms Silmalis to contact the Plaintiff before publication of the article. I accept that Ms Silmalis did contact Jenolan Caves House where a message was left for the attention of the Plaintiff. Although the message did not provide any detail concerning the proposed article, it was sufficiently clear that a journalist from "The Sunday Telegraph" wished to speak personally to the Plaintiff concerning Jenolan Caves House. The contemporaneous public controversy with respect to aspects of Jenolan Caves House provided a clear context for her call. The contemporaneous email of Ms Silmalis to Ms Labi confirms that she was seeking to contact the Plaintiff, although mention is made of "calls" in this respect, when Ms Silmalis made one call only to the Plaintiff. 50 Mr Richardson does not contend that he provided the Plaintiff's mobile telephone number to her. Mr Richardson's recollection of the conversation is understandably vague, given the distance in time and the lack of any particular need for him to recall this aspect of it. If Mr Richardson provided a telephone number to Ms Silmalis (and he may have done so), the likelihood is that it was the work telephone number for the Plaintiff at Jenolan Caves House. 51 I accept that Ms Silmalis obtained from Mr Richardson a copy of the letter of 4 November 2005 from the Plaintiff to Mr Richardson. Thereafter, she utilised this letter for the purpose of including a form of comment or response by the Plaintiff to the matters which had been raised in the Legislative Assembly. Although the evidence indicates that only one attempt was made by Ms Silmalis to contact the Plaintiff for comment, her conversation with Mr Richardson, and her incorporation in the article of aspects of the Plaintiff's written response to what had been said in Hansard, constituted a reasonable effort on her part to insert a measure of balance in the article. 52 I accept the evidence of Ms Silmalis that, from a journalistic point of view, a "stoush" between the Plaintiff and the Minister would heighten the level of interest in the article (T1589). There was no good reason for Ms Silmalis not to seek a response from the Plaintiff, and the inclusion of parts of the letter in the article is inconsistent with a reckless approach being adopted by her in this respect.

[132]

Some Challenges to the Article by Ms Silmalis 53 It was the evidence of Ms Silmalis that the only sources used by her for her article were the speeches in the Legislative Assembly on 12 October 2005 recorded in Hansard (Mr Richardson and Mr Debus in reply), together with information provided orally by Mr Ward and the Plaintiff's letter to Mr Richardson dated 4 November 2005. In the course of her article, Ms Silmalis stated: "Dirty toilets, rude staff, filthy rooms and below average meals are among the 60 complaints the Government received this year alone from unhappy guests." (emphasis added) 54 Mr Evatt submitted that Ms Silmalis had fabricated or embellished parts of this paragraph, in particular the reference to "60 complaints … received this year alone …". He submitted that Hansard did not support this statement with Mr Debus being recorded as saying "I will quote from some of the guests of Caves House who have written to the Trust complaining about its management over recent years" (Exhibit 30, Annexure B). Further, Mr Evatt submitted that the statement of Ms Silmalis did not attribute to Mr Ward words to the effect that 60 complaints had been received "this year alone" from guests of Jenolan Caves House. Mr Blackburn SC submitted that the Court should accept Ms Silmalis' account that any information that she obtained outside Hansard had come from Mr Ward (T1569-1674). 55 Ms Silmalis was not able to locate contemporaneous notes of her conversations with Mr Ward. The contemporaneous material which is available is confined to the Hansard speeches and emails sent in November 2005. Reference was made above at [45] to the email from Ms Silmalis to Ms Labi at 1.19 pm on 17 November 2005, in which Ms Silmalis says "Here are some of the 60 complaints the govt has as its legal defence to boot him out". The email did not state that these 60 complaints had been made "this year". 56 I bear in mind that Ms Silmalis came to make her statement for the purpose of this case some three years after the publication. I do not accept that Ms Silmalis fabricated or embellished intentionally the article. In my view, one or other of the following explains this aspect of the article:

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(b) Ms Silmalis was left with the impression from her conversations with Mr Ward that there had been 60 complaints in that year, although Mr Ward had not made an express statement to that effect. 57 As I have said, I do not accept that Ms Silmalis fabricated or embellished intentionally the statement that 60 complaints had been made in that year. In reaching this conclusion, I bear in mind the fact that Ms Silmalis had contacted Mr Richardson, and obtained from him the Plaintiff's letter which was used for balancing purposes in her article. Such an approach is not consistent with fabrication or intentional embellishment of this feature. 58 As between the alternatives referred to at [56] above, I am satisfied that the more likely explanation is that Mr Ward did say words to that effect to Ms Silmalis, who then placed them in the article. The absence of reference to this, in her accounts of conversations with Mr Ward in her statement, may be explained by the passage of time between the relevant events and the preparation of the statement. I will consider later in this judgment submissions made by the parties concerning the number of complaints from guests about Jenolan Caves House, and the findings which ought be made in the light of that evidence. For present purposes, however, I am satisfied that what Ms Silmalis placed in the article in this respect was sourced to statements by Mr Ward, in various conversations which Ms Silmalis had with him for the purpose of preparing the article. I accept that Ms Silmalis believed that she was being provided with accurate information by Mr Ward. 59 Mr Evatt challenged the accuracy of other aspects of Ms Silmalis' article with respect to "dirty toilets, rude staff, filthy rooms" and "asbestos issues". I will return to these submissions when dealing with the imputations. For present purposes, it is sufficient that I record my conclusion that the terms used by Ms Silmalis in these respects had their origin, in substance, in the account given by Mr Debus in the Legislative Assembly on 12 October 2005.

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Receptionist: "Sure. Here's the keys to 2 different rooms, just go up the stairs over there." 68 According to Ms Weaver, she was handed the keys to Rooms 302 and 315 (Exhibit 26, paragraphs 25-26). Mr Mason states that he handed Ms Weaver keys to Room 303 and, to the best of his memory, Room 316 (Exhibit T, page 1). Ms Weaver said that she made notes in a Spirax notebook whilst she was at Jenolan Caves House (T1443-1444). According to her notes (Exhibit AC), the rooms which she and Mr Bilton entered initially were Rooms 302 and 315. The tax invoice provided to Ms Weaver with respect to her stay recorded the room as Room 303 (Exhibit F). Ms Weaver acknowledged, in cross-examination, that it was possible that it was Room 303, although she remembered it as Room 302 and it was possible that the tax invoice was wrong (T1454-1455). I accept Ms Weaver's contemporaneous notes as being the more accurate record. Having regard to the evidence generally concerning the administration of Jenolan Caves House, I do not consider that the reference to Room 303 on the invoice is persuasive, let alone decisive. 69 On this issue, the Plaintiff relied upon the evidence of Suzanne Janas, who stayed in Room 303 on the evening of 19 November 2005. Ms Janas had a satisfactory stay, with hot water coming through after about two minutes (T379). Photographs of Room 303 were tendered (Exhibit G), being photographs taken on 21 November 2005 after the articles were published (T58). The evidence does not advance the case on this issue, as I am satisfied that Ms Weaver and Mr Bilton stayed in Room 302. 70 Upon arrival, whilst standing at the reception area, Mr Bilton noticed that there was masking tape on the back of the receptionist's chair which gave him the impression "that it was holding the chair together" (Exhibit 29, paragraph 14). Ms Weaver did not notice the chair initially but, following Mr Bilton mentioning it to her, she observed it when she and Mr Bilton returned to the reception area after visiting the two rooms. She observed brown plastic masking tape wound around the seat and around the back of it, which was clearly visible and "looked like it was securing the whole chair" (Exhibit 26, paragraph 27). Mr Mason acknowledged the state of the chair in cross-examination (T879.34): "Q. By the way, the chair that you were sitting on in reception had a great big bit of masking tape on it, didn't it? A. Yes.

[167]

Q. Do you agree with the proposition I am putting to you, that virtually all of the trainees had not had previous experience working in hospitality? A. I don't know. I can't speak for anyone else. It could be possible. " 81 I accept Ms Weaver's and Mr Bilton's account of the conversation concerning availability of food. There are a number of reasons for this conclusion. Firstly, it is improbable that, having raised the question of the availability of food, Ms Weaver would abandon the topic in the manner suggested by Mr Mason. I accept that Ms Weaver and Mr Bilton had travelled from Sydney, and it is understandable that they would want something to eat following their journey. Further, given the purpose of the trip as a type of undercover fact-finding visit with respect to Jenolan Caves House, it is unlikely that Ms Weaver would not seek a concluded response to the request for food. In addition, I found Ms Weaver and Mr Bilton to be credible and straightforward witnesses. I have no reason to doubt their account. Their account is also supported by Ms Weaver's contemporaneous notes (Exhibit AC). In my view, Mr Mason is mistaken in his recollection. The conversation would have meant nothing to him at the time, and several days passed before he was asked to recall what had happened. It is noteworthy that a bottle of Rosemount wine could be provided at the bar at the not insubstantial cost of $40.00 (Exhibit F), yet no food could be offered to Ms Weaver. 82 In reaching this conclusion, I have also taken into account the evidence of Brian Cook, a witness called by the Plaintiff. It was Mr Cook's evidence that he worked as a chef at Chisolms Restaurant from about May to September 2005, before becoming on-site manager, a position which he continued to occupy in November 2005. Mr Cook stated that the normal procedure as at November 2005 involved guests who arrived after 8.00 pm being offered a meal and, if the dining room had ceased service, guests could choose off a menu and food would be sent to their room (T958). Whatever the normal procedure ought to have been, I accept that what occurred on the evening of 17 November 2005 is as testified by Ms Weaver and Mr Bilton. 83 As will be seen when I turn to broader issues of management and procedures at Jenolan Caves House, great caution must be taken in accepting statements as to how Jenolan Caves House was intended to operate, or what normal procedure was said to be. With respect to Mr Cook, I note that he was a chef who had been appointed to perform managerial activities not long before November 2005. I do not overlook the fact that Mr Cook would have taken the articles published on 20 November 2005 as being critical of his performance. Whatever his hopes may have been concerning the operation of Jenolan Caves House, the evidence of Ms Weaver and Mr Bilton (and Ms Miller) points to a substantial gap between his hopes and reality.

[168]

Ms Weaver and Mr Bilton Explore the Premises 84 Ms Weaver and Mr Bilton walked upstairs to their room and had a glass of wine. She had a packet of chips in her bag which they ate. Ms Weaver examined a brochure in the room with information about Jenolan Caves House in it which advertised, amongst other things, pastries and yoghurts as part of the continental breakfast. 85 Between 10.00 pm and 11.00 pm, Ms Weaver discovered that there was no mobile phone reception in Jenolan Caves House and went downstairs to ask the receptionist if there was a pay phone. He responded that the pay phone was not taking coins and allowed her to use the reception phone. The receptionist moved away from the desk whilst Ms Weaver made a call to Ms Labi, leaving a voicemail message that she had arrived at Jenolan Caves House. When Ms Weaver left the room, she took with her Mr Bilton's digital camera for the purpose of taking photographs. After using the telephone, Ms Weaver went into the public ladies' toilet opposite the reception area. She observed, amongst other things, that two of the taps were turned on and running, the toilet bowls were rusty and old and the toilet with the worst rust was running. In addition, one of the fluorescent lights was not working and was flickering, there was hair tangled in one of the plug holes, the radiator was covered with rust and dust and was cold, there was a multi-coloured towel with black edges and the room was cold. 86 Ms Weaver then returned to the third floor. She noticed along the corridors that the carpet was "really water stained" and, in particular, there were "big patches of stained carpet near an armchair on the third floor" (Exhibit 26, paragraph 34). This observation is significant as it relates to a specific imputation (imputation 7(f)) as to which more will be said later in this judgment. 87 Ms Weaver observed communal bathrooms on the third floor, one for women and one for men. She entered the women's bathroom and tried to take photographs (Exhibit 26, Annexures B, C and D). She observed that the bathroom was "in a pretty disgusting state", noting that it had "a musty, damp smell, slightly like effluent or sewerage", the flyscreen on the window was covered with cobwebs, there was thick dust on the window ledges which were covered with dead bugs, cobwebs and dirt, the toilet bowls had rust marks streaked inside them, there were dead bugs in the bath, the shower heads in the showers were mouldy and rusty, the radiator was covered with rust, the room was cold and there was a bar of soap by the sink which was old, dried up and had a crack down the centre (Exhibit 26, paragraph 36). 88 Ms Weaver then entered the men's bathroom on the third floor which she stated was in a similar condition to the women's bathroom, although a smaller room. According to Ms Weaver, the photographs were not turning out well, so she returned to her room to seek the assistance of Mr Bilton. Whilst Ms Weaver had been exploring Jenolan Caves House, Mr Bilton had stayed in their room, continuing to drink wine and read the newspaper. He had a shower or a bath (he cannot recall which) at one stage during the night and there was hot water (Exhibit 29, paragraph 25). 89 Ms Weaver asked Mr Bilton to accompany her to assist with the photography. They first went to the communal bathroom on the third floor. Mr Bilton described this bathroom as "really disgusting" with "hundreds of dead insects in the bath, in the sinks and on the floor", with one of the toilets being old and rusted "so the water was stained and looked very unpleasant", the tap in one of the sinks was broken and was "sprouting water", there was a "corrugated iron radiator which was all rusted away" which "looked as old as the house, probably a hundred years old" and there were cobwebs in the bathroom window (Exhibit 29, paragraph 27). He said he took some photographs of the bathroom, but that he no longer has those photographs. 90 Ms Weaver stated that she and Mr Bilton went downstairs to the communal bathroom on the second floor, which she considered was in even worse condition than the third-floor bathroom. In the second-floor bathroom, Ms Weaver observed that one light did not turn on, the toilets were in "a disgusting state", the toilet bowls were rusty with a warped cistern on one of them and there was a cockroach on the floor of one of the showers which she photographed (Exhibit 26, Annexure F). In addition, the showers were mouldy on the showerheads and between the tiles, there were cobwebs all over the window as well as dead bugs and dust on the windowsill, and the bath was covered in dead bugs and dirt. A number of these images were recorded in photographs taken the following morning by Ms Miller (Exhibit 26, Annexures E, G, H and I). Perusal of these photographs supports the description given by Ms Weaver of the state of the bathroom or bathrooms in question. 91 Ms Weaver and Mr Bilton returned to their room and Ms Weaver got into the shower. She stated that the water was lukewarm for about 10 seconds, but then turned cold. She turned the cold tap off so only the hot tap was running, but there was no hot water for the duration of the shower. The water was ice cold (Exhibit 26, paragraph 40). Mr Bilton informed Ms Weaver that he had a shower (or bath) whilst she had been downstairs and that he had "hot water for about five minutes" (Exhibit 26, paragraph 41). 92 Ms Weaver and Mr Bilton retired to bed. Ms Weaver stated that it was extremely cold in the room and she put on the small heater which provided little assistance in warming the room. Mr Bilton confirmed that it was extremely cold, but observed that "there were plenty of blankets provided and the bed was comfy" (Exhibit 29, paragraph 30).

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Observations and Events on Friday, 18 November 2005 93 Ms Weaver woke at about 6.30 am - 7.00 am on Friday, 18 November 2005. The room was freezing. Ms Weaver got into the shower, the water was initially lukewarm for about 10 seconds, but went cold before she could wash her face. She ran the shower for three minutes but it remained cold (Exhibit 26, paragraph 44). 94 Ms Weaver and Mr Bilton went downstairs for breakfast. When they walked in to the dining room at about 7.30 am, she observed only one other couple there. Mr Bilton said there were about a dozen tables, and only four or so were taken and it did not appear that there were many people staying at Jenolan Caves House (Exhibit 29, paragraph 33). 95 Ms Weaver observed a family of four coming in for breakfast as well as two other couples, the waiter observing that "the Hotel is never busy mid week" (Exhibit 26, paragraph 49). 96 Ms Weaver ordered the continental breakfast and Mr Bilton ordered the cooked breakfast. They both asked for coffee, but the waiter brought them tea. He took the tea away and brought coffee which Ms Weaver described as "really weak and disgusting" and she could not drink it (Exhibit 26, paragraph 47). 97 The breakfast was buffet style. Ms Weaver observed that (contrary to the brochure in the room), there were no pastries or yoghurts, the bread for toasting was "cardboardy" and did not taste very nice and the continental breakfast consisted of miniature boxes of cereal, canned grapefruit, a handful of dried fruit and some milk and orange juice. Mr Bilton described the cooked breakfast as "pretty ordinary", with the eggs seeming to be "powdered or reconstituted", tasting "very bad" and "like the eggs they provided as rations at army camp" (Exhibit 29, paragraph 34). 98 Mr Bilton stated that the chef came out during breakfast and enquired whether they had had a nice breakfast. Mr Bilton responded that it was fine - he felt that he could not say that the food was not nice because he felt sorry for the chef. 99 Ms Weaver obtained mobile reception and received a message from Ms Miller, saying she was running late. Ms Miller arrived between 8.00 am and 9.00 am. She met Ms Weaver and they went to Ms Weaver's room. Ms Miller had a large camera with her. Thereafter, Ms Weaver and Ms Miller went to various parts of Jenolan Caves House and Ms Miller took photographs. Whilst this was happening, Mr Bilton went out for a walk. 100 Photographs were taken in the dining room which Ms Miller described as "damp and musty with a bedraggled atmosphere" (Exhibit 32, paragraph 11, Annexures A, B and C). 101 Ms Miller observed that, in the common areas and hallways near the lift, there were watermarks and stains on the carpet and she took photographs of the carpet (Exhibit 32, Annexures D, E and F). The photographs in Annexures E and F depict the third-floor foyer, an area described by Ms Weaver as being wet. This scene was portrayed in one of the photographs published in the article. 102 Ms Weaver and Ms Miller entered a communal bathroom which Ms Miller described as "filthy" (Exhibit 32, paragraph 14). Ms Miller took photographs of the bathroom (Exhibit 32, Annexures G, H and I). She took photographs of bugs in the bathroom (Exhibit 32, Annexures J-V). Ms Miller took photographs of cobwebs in the windows and bugs on the windowsills (Exhibit 32, Annexures W and X). Photographs were taken of the shower which was mouldy and dirty (Exhibit 32, Annexures Y-BB). The heater was covered with rust and Ms Miller photographed it (Exhibit 32, Annexures CC-DD). A photograph was taken of a dead cockroach on the bathroom floor (Exhibit 32, Annexure EE). A photograph was taken of the toilet which had a rusty bowl (Exhibit 32, Annexure FF). 103 Ms Weaver and Ms Miller went to reception and asked if they could look at some other rooms. Keys to three other rooms were provided for this purpose, including Room 321. The first two rooms were, according to Ms Weaver, "not too bad", they "smelled musty and had only a few cobwebs" (Exhibit 26, paragraph 56). Room 321 smelt musty and mouldy and a tap was running in a basin in the corner of the room. Photographs were taken of these rooms (Exhibit 32, Annexures GG-MM). 104 Ms Weaver and Ms Miller went downstairs to the games room. There were a number of arcade games in the room which, according to Ms Miller, had tangled cords out in the open between the games. There were three adaptors in one power point. Ms Miller described the games room as "very dirty" with "dust and rubbish everywhere" and she took photographs of the room (Exhibit 32, Annexures NN-QQ). Mr Bilton went to the games room and observed that the wiring "looked overloaded and in a big tangle from each of the sockets" with dead insects and cobwebs in the room and on the wires (Exhibit 29, paragraph 40). These observations relate to imputation 7(g). 105 Ms Miller took photographs of the bistro which was empty (Exhibit 32, Annexures RR-TT). She took a number of photographs of paint peeling off walls, however she cannot recall which room this was in (Exhibit 32, Annexures UU-BBB). 106 Ms Miller went outside and took some photographs of the surrounds of Jenolan Caves House (Exhibit 32, Annexures CCC-LLL). 107 At this point, Ms Miller parted company from Ms Weaver and Mr Bilton, and headed towards her car along a pathway which ran beside a tennis court. She observed that the tennis court was unusable, with no net, no lines marked, there was dirt and sand everywhere, overgrown grass and the fence had holes in it. She took photographs of the tennis court (Exhibit 32, Annexures MMM-OOO). Ms Weaver (Exhibit 26, paragraph 61) and Mr Bilton (Exhibit 29, paragraph 43) also observed the apparently disused tennis court. 108 Mr Bilton provided his overall impressions of Jenolan Caves House as being "long past its best" and needing "a lot of money put into it to make it a nice place to stay". He observed that the common bathrooms that he saw were disgusting and should not have been in use. He observed that most of the staff "seemed as if they were on school holidays doing extra work", being youngsters who "looked to range from 15 to 17 years old" with the oldest staff member he saw being the chef. Mr Bilton did not see anyone acting in a managerial role. Mr Bilton observed that "Fawlty Towers" was "a fair description of the hotel" (Exhibit 29, paragraph 49).

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Q. Is that the best answer you are going to give me to the question I asked? A. It was a document, it was quite finite." 123 The Defendant submitted that the Plaintiff played a practical role in the management of Jenolan Caves House and that he was the controlling mind and hands of JCR and JHM. It was submitted that the evidence revealed that he played a direct role in aspects of the day-to-day management of Jenolan Caves House in a number of respects. The Defendant submitted that the evidence concerning the Plaintiff's management role is so overwhelming that his effort to deny or confine any management role is patently untrue. 124 Mr Evatt submitted that the Plaintiff played a role as director of JCR and was involved, in a number of respects, in aspects of Jenolan Caves House. He submitted, however, that this did not lead to a conclusion that the Plaintiff managed Jenolan Caves House or was involved, in a practical way, in the day-to-day running of the premises so that it could be fairly said that he was managing the property. Reference was made to the meaning of the word "manage" in The Macquarie Dictionary where the verb is defined as "1. To bring about; succeed in accomplishing … 2. To take charge or care of: to manage an estate. 3. To dominate or influence (a person) by tact, address or artifice. 4. To handle, direct, govern, or control in action or use …". The noun "manager" is defined to mean "1. One who manages. 2. One charged with the management or direction of an institution, a business or the like. 3. One who manages resources and expenditures, as of a household. 4. A person in charge of the business affairs of an entertainer or group of entertainers. 5. A person in charge of the performance and training of a sporting individual or team". Mr Evatt submitted that the Plaintiff did not manage Jenolan Caves House in any of the senses accommodated by the ordinary meaning of the word. 125 I am comfortably satisfied, on the balance of probabilities, that the Plaintiff played a practical role in the management of Jenolan Caves House. The evidence demonstrates that this role was not confined to remote and occasional action on the part of the Plaintiff, in his capacity as director of JCR and JHM. In a direct and real sense, the Plaintiff took charge of Jenolan Caves House. He handled, directed, governed and controlled Jenolan Caves House and its business activities. There are a number of aspects of the evidence which have led me to this conclusion. 126 Firstly, the Plaintiff himself, in his affidavit in the 2007 Industrial Relations Commission proceedings (Exhibit 2) and in the Summons filed in those proceedings (Exhibit 3), contended that he played a role in the management and conduct of the business at Jenolan Caves House. I am satisfied that the Plaintiff was and remains a "hands on" person, who engaged himself closely in the control of activities of Jenolan Caves House in a wide variety of respects. This is understandable. The premises are located some distance from Sydney. Although the evidence revealed there were regular staff working at Jenolan Caves House during the relevant period, there was a significant number of trainees engaged there, clearly being persons of very limited experience. Given the Plaintiff's significant involvement in JCR and JHM, it is to be expected that he would play a practical and intensive role in the operations of the business being carried out at Jenolan Caves House. 127 It is the unchallenged evidence of Karly Strangwidge (Exhibit 35, Tab 15) that, in about November 2003, she had a telephone interview with the Plaintiff who offered her a traineeship position at Jenolan Caves House (Exhibit 35, Tab 15, paragraph 5). Ms Strangwidge stated that the Plaintiff prepared the staff roster (Exhibit 35, Tab 15, paragraph 14), and that it was very difficult to get the Plaintiff to approve days off, other than those provided for on the roster (Exhibit 35, Tab 15, paragraph 15). Ms Strangwidge stated that, even though she was a trainee (born in 1985), the Plaintiff gave her a lot of responsibilities when she was working at Jenolan Caves House (Exhibit 35, Tab 15, paragraph 16). When she completed her traineeship in January or February 2005, she said that the Plaintiff continued to pay her trainee wages. She met the Plaintiff about a pay rise, and he said to her words to the effect of "I'm not going to give you a pay rise at this stage. You're an idiot" (Exhibit 35, Tab 15, paragraph 19). She stated that the Plaintiff would not buy a cordless phone for reception, which made it difficult for staff members to answer the phones when they were carrying out nocturnal cleaning activities (Exhibit 35, Tab 15, paragraph 21). Ms Strangwidge spoke of an occasion in about May 2005, when the Plaintiff called reception whilst she was performing cleaning on the night audit and did not hear the telephone. The Plaintiff came down from "his house on the hill", took her into the billiard room and yelled at her, with her screaming back at him (Exhibit 35, Tab 15, paragraph 23). 128 Ms Strangwidge stated that, in about June 2004, the Plaintiff asked her to work as the maitre d' in Chisolms, because he could not find anyone else to take over when the maitre d' quit (Exhibit 35, Tab 15, paragraph 30). She said that the Plaintiff would usually "put the kids who mucked around or behaved badly on housekeeping duties", and that this often led to guestrooms not being cleaned (Exhibit 35, Tab 15, paragraphs 39-40). She stated that she lived in the staff accommodation known as St Trinians when she was working at Jenolan Caves House and that, with some of the other staff, she approached the Plaintiff and told him of various problems concerning the premises, with his reaction being either to dismiss them, or to say that something would get done but with nothing then eventuating (Exhibit 35, Tab 15, paragraphs 49-57). Ms Strangwidge said that she found the Plaintiff "to be a very scary boss" (Exhibit 35, Tab 15, paragraph 64), with "no people skills", and that he would yell at staff when mistakes were made (usually as a result of inexperience) with his favourite catchphrase being "you're an idiot" (Exhibit 35, Tab 15, paragraph 65). Ms Strangwidge believed that the Plaintiff "managed the hotel very badly" (Exhibit 35, Tab 15, paragraph 66). 129 I have not considered the unchallenged evidence of Ms Strangwidge in isolation. It is to be taken with other evidence bearing upon this question. Her evidence points to the Plaintiff, between 2003 and 2005, exercising on-the-ground functions and responsibilities concerning the selection and retention of staff, rostering, allocation of work duties and matters of that sort. All of this, it seems to me, fits quintessentially into the role of a manager of premises such as a hotel. 130 Secondly, the evidence revealed that the Plaintiff represented himself as playing a significant role in the management structure at Jenolan Caves House at critical times. For example, the February 2004 management structure diagram for JHM (Exhibit 33) depicted the Plaintiff as "Managing Director", with Alison Jones his "Assistant" and with a direct line of responsibility running down to Annette Dwyer and then Jane Ewen and Susan Johnston as 'housekeeping", with a further direct line running from them to "casual housekeeping and trainees". The Plaintiff's email of 22 September 2004 (Exhibit 33A) described this document as "the structure diagram we have on display in Caves House". 131 Thirdly, the oral and documentary evidence pointed to the Plaintiff being a principal, if not the principal, point of contact when complaints were made concerning Jenolan Caves House by guests, whether onsite or by letter. By way of example, I accept the evidence of Mr Terracini that a conversation took place between the Plaintiff and himself in the Chisolms dining room during Mr Terracini's unhappy stay in February 2003, as part of his Chambers' conference, at Jenolan Caves House. There had been a series of problems with hot water (or the absence of it), cleanliness, meals and other issues. Mr Terracini gave the following evidence (T469-470): "Q. Later that evening, that same evening in the dining room, did Mr Field say something to you about how it was all going? A. He said that he had great difficulty getting staff.

[215]

Q. Did you say to Mr Terracini words to the effect, 'The staff are hopeless, we can't get good staff around here. Mistakes are made. It's difficult to accommodate everyone'? Did you say anything of those things to him? A. Definitely not and it's a lie. I mean, as if I would say someone who is involved in a business like that was hopeless. If I thought it, I would have gone to the manager and I would have said, 'So and so looks like she's no good', or something, 'You ought to speak with them'. It is not my job to do it but I am certainly I wouldn't have said to a third party that someone was hopeless out of the blue. I am not stupid." 133 I accept the evidence of Mr Terracini and do not accept the evidence of the Plaintiff on this issue. As I record later in this judgment, I have formed the view that the evidence of the Plaintiff, on any controversial issue, ought not be accepted unless it is corroborated by independent and reliable evidence. For present purposes, the point is that the Plaintiff spoke to Mr Terracini in a way which was consistent with his performance of a managerial role onsite at Jenolan Caves House. 134 In passing, I note that I accept the evidence of Mr Terracini and Mr Irvine (who was not required for cross-examination) concerning their experiences at Jenolan Caves House during the Chambers' conference in February 2003. The Plaintiff called Mr Canceri who attended the conference as a person accompanying another floor member. Mr Canceri was not a member of Mr Terracini's floor. As Mr Canceri's evidence progressed, it became increasingly apparent that he had a limited recollection of the weekend in February 2003, and he conceded as much (T1352, 1354). I do not think his general and vague recollection that the weekend was satisfactory stands in the way of acceptance of the cogent evidence of Mr Terracini and Mr Irvine to the contrary, which was supported by contemporaneous documentation. 135 The evidence includes a number of letters written by the Plaintiff to dissatisfied guests or to representatives of the Trust. All of these are written on the letterhead of "Jenolan Caves Resort", with the Plaintiff signing his name above the words "Archer Field, Director". The content of the letters, and their frequency, shed considerable light upon the true role of the Plaintiff with respect to Jenolan Caves House in the relevant period. It is noteworthy, as well, that there do not appear to be any letters written to dissatisfied guests by anyone other than the Plaintiff. In the course of this lengthy litigation, it is clear that large numbers of documents have been produced from a variety of sources for consideration by the parties. The absence of any correspondence written by persons at Jenolan Caves House other than the Plaintiff, dealing with areas of complaint by guests, is itself significant. 136 Fourthly, there is evidence of the Plaintiff, as the representative of Jenolan Caves House, dealing with public authorities and staff on a number of important practical issues, including fire safety, food safety, the hot water supply and asbestos. This evidence is contained in a number of statements in Exhibit 35, which were admitted by consent and without the makers of the statements being required for cross-examination. Of particular significance in this respect are:

[221]

The Plaintiff as a Witness 139 The Defendant submitted that the Plaintiff was a discreditable witness. Particular reference was made, in this regard, to his emphatic denial that he was involved in the management of Jenolan Caves House which, the Defendant submitted, when regard is had to the totality of the evidence, ought lead to a conclusion that the Plaintiff's evidence was knowingly misleading. 140 The Defendant submitted that the Plaintiff's lack of credit is an important matter to consider in weighing the evidence, especially in circumstances where little of the Defendant's evidence was subjected to challenge, and where the Plaintiff's case depended so heavily on his assertions about his role at Jenolan Caves House. 141 Mr Evatt acknowledged that aspects of the Plaintiff's evidence were unsatisfactory (T1737). He acknowledged that the Plaintiff was "very pedantic" and "punctilious", but rejected any suggestion that the Plaintiff had lied or tried to fabricate evidence. He submitted that the Plaintiff had been in the witness box for a long time and had been subjected to lengthy cross-examination but, on the whole, had done well. Mr Evatt acknowledged that, at times, the Plaintiff did not answer the question, but submitted that this was not deliberate but flowed from an inability to follow the question (T1737). 142 It is the case that the Plaintiff spent a long time in the witness box in this trial. His examination-in-chief was lengthy (T19-149) and his cross-examination was even lengthier (T151-227; T237-365; T391-458; T495-663; T672-816; T820-856; T891-912). When the hearing resumed in February 2009, the Plaintiff gave further evidence (T1195-1201; T1234-1244; T1268-1274; T1357-1359; T1402-1415) before being re-examined (T1416-1425). In all, the Plaintiff was examined in chief for 90 pages, cross-examined for 677 pages and re-examined over nine pages. 143 I accept that the Plaintiff has been engaged in litigation on a number of fronts since 2005, and that this has taken its toll on him. 144 From time to time during the Plaintiff's evidence, Mr Evatt himself made comments concerning the Plaintiff's non-responsive answers or asked the Court to remind the Plaintiff of the need to give direct and responsive answers to questions (see, for example, T262; T279; T504; T505-516). 145 The Plaintiff's evidence was marked by frequent long and irrelevant answers in cross-examination. Regularly, his answers would involve a type of speech or address as if he was arguing the case. He was an advocate in his own cause. It was clear that he has strong feelings about events surrounding Jenolan Caves House, and the circumstances leading up to the cessation of his involvement with that business. However, there were a number of features of the Plaintiff's evidence which caused me to have substantial reservations about it, and to form the view that I should look elsewhere for independent corroborative evidence before relying upon it. 146 I am satisfied that the Plaintiff's denial of a practical management role on his part at Jenolan Caves House was false. Under cross-examination, it became clear that he had given accounts in other proceedings, when it suited his interests, which acknowledged, in substance, that he played a practical role in the management and conduct of the business carried on at Jenolan Caves House. This issue is not to be determined by a pedantic test as to whether he bore the title "manager" or carried out the traditional functions of a hotel manager. As observed earlier in this judgment, this issue ought be considered by reference to evidence concerning the conduct and activities of the Plaintiff at Jenolan Caves House, in the years leading up to and including 2005, in connection with guests, staff, regulatory authorities, the Trust and others.

[222]

147 I formed the view that the Plaintiff is a somewhat obsessive individual who was and is likely to become involved in micro-management, in a hands-on way, of a business such as that conducted at Jenolan Caves House. The view may readily be formed, by reference to the evidence, that little occurred at Jenolan Caves House of which the Plaintiff was unaware. 148 Some further observations may be made. The description of the words and actions of the Plaintiff given by Mr Terracini bears some resemblance to the manner and speech of the Plaintiff, as described in the unchallenged evidence of Ms Strangwidge. Mr Terracini had a clear recollection of the Plaintiff speaking of the staff as "hopeless" (see [131] above) and Ms Strangwidge referred to the Plaintiff commonly addressing staff as "idiots" (see [127] above). Mr Terracini gave evidence of the Plaintiff's manner and gesticulations when discussing guest complaints with him in February 2003 and this description accurately described the Plaintiff's manner as a witness when under pressure in the witness box. 149 Further, the Plaintiff's evidence fluctuated between denials that many of the events complained of by guests had occurred at all, and statements of ignorance on his part as to whether such events had occurred, despite the fact that the two positions were irreconcilable. His approach in the witness box bore some resemblance to the occasionally pugnacious approach adopted by him in correspondence with complaining guests, demanding from guests the names of persons involved in incidents complained of, whilst pressing for further particulars. 150 Another feature of the Plaintiff's evidence did not assist him. Despite a clear warning concerning his obligations as a witness under cross-examination, the Plaintiff spoke to three persons during adjournments about topics raised in cross-examination (T623-624). 151 A memorable example of the Plaintiff's approach in the witness box with respect to a guest's complaint, was his reaction to a complaint made by Peter Shapero. Mr Shapero organised a weekend at Jenolan Caves House in July-August 2004 for a number of staff (and their families) of a plumbing company. Mr Shapero was a project manager with that business. He and his group had a number of complaints about Jenolan Caves House, which he took up with the Trust and the Office of Fair Trading (Exhibit 23, Tab 63). As will be seen, Mr Shapero was called by the Defendant at the present hearing. 152 The Plaintiff was cross-examined concerning notes in his diary for 4 August 2004 (Exhibit 4). He was asked (T540.5): "Q. (Exhibit 4 shown.) If you look at Wednesday 4 August, which is the second page of that exhibit, right down the bottom on Wednesday 4 August there's an entry that says 'Peter Shapero' and a telephone number and 'Girl with green baseball cap, solid build, pissed, backward. Offered key to bar at 12.00 o'clock. Pulled Brendan out of toilet.' Do you know what that's all about? Is that a cast from the staff? A. I recall Peter Shapero. The rest I can't comment on. Mr Shapero, for some reason, as I recall, Mr Shapero was in the billiard room and there were a couple of staff in the billiard room and Mr Shapero decided to pull his pants down and take one of the staff into the toilet with him. I am quite clear about that because somebody went down and got the manager, and I can't recall the circumstances that clearly, and Brendan I think was a bloke that worked there and he went in to save the girl's position and I believe that a scuffle occurred and Brendan was pulled out of the toilet and the whole thing was very serious. I might be wrong, but it should have been reported to the police. I can't comment that it was or wasn't, but normal procedures would have something like that reported to the police.

[291]

Q. And that the conditions and service at the Caves House wasn't as bad as you've said? A. It was bad or worse." 161 I have included these extracts from the evidence of the Plaintiff and Mr Shapero to illustrate the following point. The Plaintiff appears to have amplified and exaggerated, in an extraordinary way, an incident which he said had involved improper conduct by Mr Shapero. The Plaintiff maintained and repeated his strong criticisms of Mr Shapero whilst giving sworn evidence, including the suggestion that Mr Shapero should have "gone to gaol" and "been locked up". Mr Shapero was called to give evidence and an apology was proffered to him by the Plaintiff's counsel during cross-examination. 162 This illustrates the capacity of the Plaintiff to exaggerate and make strong statements which he considers to operate in his favour, despite the absence of any objective foundation for the statements. On the face of it, Mr Shapero and his wife attended Jenolan Caves House with work colleagues and their families and, on his account (which I again accept), he experienced a poor quality of accommodation, service and treatment in nearly all respects. Understandably, he complained about it. He did not strike me as a person who rushed to complain about things in a hypercritical way. He was a down-to-earth witness with legitimate grievances to raise. His evidence suggests that he was not alone on this weekend in complaining of fundamental deficiencies at Jenolan Caves House. 163 On the other hand, the Plaintiff leapt to somewhat extraordinary allegations against Mr Shapero, based (at best) upon shaky and confused hearsay sources. If there was some doubt in the Plaintiff's mind that he was associating Mr Shapero wrongly with some other incident, it is extraordinary that he would give evidence of the type which he did at the hearing. All of this fortifies a conclusion that great caution ought be exercised before accepting the Plaintiff's evidence, on any issues which are in dispute.

[292]

Activities at Jenolan Caves House - Complaints and Other Evidence 164 Counsel for the Plaintiff and the Defendant made extensive submissions concerning the nature and quality of the facilities and services available at Jenolan Caves House at relevant times, including submissions about the correct approach to assessing evidence of complaints by guests concerning those matters. 165 Mr Evatt submitted that a process of mathematical extrapolation ought be undertaken, by reference to the documentary and oral evidence of complaints made by guests over a number of years, leading to a conclusion that the level of complaints was unremarkable. He invited, as a starting point, a finding that all documentary complaints by guests were in evidence. He then submitted that an assumption could be made (for the sake of argument) that there were five times more dissatisfied guests than the number of actual complainants revealed by the evidence (T1642). Upon this premise, Mr Evatt submitted that the level of complaints would still be unremarkable in the real world of hotel accommodation. He referred to the evidence of Ms Duffy, a witness called by the Plaintiff, who had served as manager of Jenolan Caves House between 1996 and 1998 and also had some experience in the hotel industry. 166 Mr Blackburn SC submitted that great care ought be taken before any mathematical extrapolation or assumption was made by reference to the documentary and oral evidence of complaints adduced at the hearing. He submitted that there was an unsound foundation for the assumption that the totality of written complaints provided by guests in the relevant period, are before the Court. He referred to evidence from the Plaintiff concerning a complaints book, said to have been maintained at the desk in Jenolan Caves House (T108), which had not been produced. Reference was also made to the fractured and protracted process of discovery by the Plaintiff in these proceedings (T1642). He noted that a large number of documents had been furnished to the receiver and manager following the removal of the Plaintiff from his position in December 2005. The process of discovery and subpoenas had led to a range of documents being made available to the parties but, Mr Blackburn SC submitted, the Court ought not be satisfied that a complete set of documents had been furnished. He pointed to issues concerning discovery, which remained a live topic even at the resumed hearing in February-March 2009. The Defendant emphasised that no complaints book had been discovered or produced, despite clear evidence that such a book had been used at Jenolan Caves House. 167 I accept the Defendant's submission that a process of mathematical extrapolation is an unsound way to reach a conclusion with respect to the quality of facilities and services at Jenolan Caves House at relevant times, and the true level of complaints about those matters. In addition to the issues raised by the Defendant, I note the account of several guests (see, for example, Mr Shapero at [157] above) that a number of guests were complaining at the front desk at the same time about aspects of the service and facilities, yet not all those persons have come to light as complainants despite their obvious dissatisfaction with Jenolan Caves House. It appears probable that the number of identified complainants represent the tip of the iceberg, but it is speculative to attempt an actual assessment of the iceberg's size. 168 In my view, a more reliable approach to fact finding concerning the quality of services and facilities provided at Jenolan Caves House, ought take into account the various classes of evidence which operate as "windows" into the operation of Jenolan Caves House, and some insight concerning these issues. This evidence falls within the following classes:

[310]

Submissions of Parties 191 With respect to failure to remove asbestos, the Defendant submitted that the Plaintiff had failed to comply with the requirements of the Trust in this regard. The Defendant pointed to the unchallenged evidence of Paul Williams of the Trust concerning the asbestos problems at Jenolan Caves House. Evidence was also led from Trent Lee, an independent asbestos inspector, engaged by the Trust during the Plaintiff's occupation of Jenolan Caves House. 192 Between 1996 and 2005, the Trust conducted maintenance inspections of Jenolan Caves House in conjunction with the New South Wales Department of Commerce. The asbestos problem at Jenolan Caves House was identified as early as 1997 and, by 2003, asbestos was still present with its removal being identified as a priority maintenance issue. The Defendant submitted that the numerous reports obtained by or on behalf of the Trust, between 1997 and 2004, uniformly identified asbestos as a problem at Jenolan Caves House and called for its removal. Those reports and their recommendations were communicated to the Plaintiff. The Defendant submitted that the Plaintiff's response to the asbestos issue, and other maintenance issues, was at least unco-operative and, at times, defiant. 193 The Defendant submitted that the Trust's requirements in relation to the removal of disturbed asbestos were unequivocal and were identified repeatedly and communicated to the Plaintiff who failed to meet them. The Defendant submitted that the Plaintiff's handling of this serious issue, like his handling of other serious health and safety issues, such as fire and food safety, was especially relevant to the truth of imputation 7(b). 194 It was submitted that a competent hotel manager would have taken active steps to protect workers and guests from the dangers of disturbed asbestos, and that this was a matter particularly within the Plaintiff's control as occupier of the premises. The Defendant submitted that the fact that the Plaintiff was asked, by the Trust, on many occasions, to deal with this issue and yet failed to take remedial action, strongly supported the defence of truth with respect to imputation 7(b). 195 The Plaintiff's principal response on the asbestos question was that he was not legally responsible for this issue. It was submitted that the 99-year lease was granted by the Trust in 1990 and that it was not until December 1994 that the Plaintiff, through his company, became the owner and lessee of Jenolan Caves House. Reference was made to provisions of the 99-year lease (Exhibit O) which, it was submitted, placed the obligation to remove disturbed asbestos upon the initial lessee in a period which expired in 1993.

[311]

Decision 196 The 99-year lease, entered into in 1990 did make provision with respect to removal of disturbed asbestos. The lessee was obliged to carry out certain refurbishment works within the refurbishment period (clauses 4.1-4.2). Schedule 11 of the lease required refurbishment works (including removal of disturbed asbestos) to be carried out within three years of the commencement of the lease on 2 July 1990. Clause 8.1 of the lease also required the lessee to repair and maintain the premises. Clause 5.6 obliged the lessee to comply with statutory requirements. The evidence indicates that the asbestos issue was not dealt with by the original lessee before the Plaintiff acquired his interest in the property and business. Thereafter, the evidence demonstrates that the asbestos problem was not resolved by the Plaintiff, despite official requirements for this to be done. 197 The evidence reveals that concerns were raised regularly with the Plaintiff between 1997 and December 2005 concerning the presence of exposed, leaking and disturbed asbestos in various parts of Jenolan Caves House (Exhibits 8, 9, 10, 11, 12, 13, 14, 15; Exhibit 35 Tab 14 (Lee), Tab 17 (Smith), Tab 18 (Williams)). A letter to the Plaintiff from the Trust dated 24 November 1997 (Exhibit 9) raised the requirement of the lessee to comply with clause 8.1 of the lease with respect to asbestos contamination. The report of Mr Smith dated 11 March 2003 (Exhibit 10, paragraph 1.0) expressed concern, observing that "given the public's possible exposure, issues such as the current level of exposed asbestos needs to be addressed immediately by an independent consultant". Mr Smith's report pointed to the presence of exposed and loose asbestos at various points in the premises. Exposed asbestos was still present on 13 October 2003 (Exhibit 13). In July 2005, Mr Lee, an environmental geologist with Parsons Brinckerhoff, inspected Jenolan Caves House at the request of the Trust. The Plaintiff was present, described by Mr Lee as "the manager of the hotel" (Exhibit 35, Tab 14, paragraph 11). Exposed and disturbed asbestos was observed, including disturbed asbestos "in an area where, if a guest or staff walked past, they could easily brush against it" (Exhibit 35, Tab 14, paragraph 14). A lot of exposed and disturbed asbestos was located in the boiler room (Exhibit 35, Tab 14, paragraph 17). A significant amount of disturbed asbestos was located in the ceiling spaces of the hotel (Exhibit 35, Tab 14, paragraph 19). The piping works for all of the showers were located in the ceiling spaces and Mr Lee observed that "nearly every single pipe for the showers had a breach or cut in the lagging exposing disturbed asbestos" (Exhibit 35, Tab 14, paragraph 19). Some of the breaches were caused by animals living in the ceiling spaces (Exhibit 35, Tab 14, paragraph 19). Mr Lee considered that the disturbed asbestos in the ceiling spaces "posed a very serious risk to guests and employees at the hotel" (Exhibit 35, Tab 14, paragraph 21). There was "a substantial amount of disturbed asbestos in the hotel in areas which could be easily accessed by the public" (Exhibit 35, Tab 14, paragraph 22). Speaking generally, Mr Lee considered that the hotel was "in really bad condition" (Exhibit 35, Tab 14, paragraph 27). He had conducted many site inspections and surveys of buildings, and considered "that the condition of the structures at the hotel was one of the worst" he had seen (Exhibit 35, Tab 14, paragraph 30). 198 I accept the evidence of Mr Lee, which was admitted without objection and was not the subject of cross-examination. It is inherently credible and is supported by contemporaneous documentation. 199 This issue is to be considered upon the basis of a long-standing failure on the part of the Plaintiff to deal with issues of exposed and disturbed asbestos which placed guests and staff at risk. 200 In addressing this aspect in the case, it is important to keep in mind the terms of imputation 7(b). Evidence of the Plaintiff's failure to act on this topic relates to the period between 1997 and 2005. Several reports prepared in that period pointed to the location of exposed and disturbed asbestos at Jenolan Caves House, and the necessity for its removal. The Plaintiff was the point of contact with relevant authorities for this purpose. The asbestos was not removed. It was the Plaintiff who continued to effectively manage Jenolan Caves House, with the presence of asbestos constituting a concern for guests and employees alike. I am satisfied that a competent manager would have been expected to act promptly on this issue in the interests of the safety of guests and staff. 201 I do not consider that the Plaintiff is assisted by his reliance upon that part of the lease which required steps to be taken by the original lessee by July 1993. It was apparent to the Plaintiff, at least by 1997, that this had not been done. The Plaintiff and his lessee company had obligations under the lease with respect to maintenance and repair which called for action concerning asbestos. In any event, the continued operation of Jenolan Caves House by the Plaintiff from 1997 to late 2005, without necessary action being taken to remove exposed and disturbed asbestos, placed guests and staff at risk. This was cogent evidence of the Plaintiff's incompetent management of Jenolan Caves House. 202 In my view, the failure by the Plaintiff, over a lengthy period, to address the asbestos problem, provides significant support for the Defendant's case that imputation 7(b) was substantially true.

[313]

Submissions of Parties 203 With respect to failure to comply with fire safety standards, the Defendant referred to the evidence of Mr Tambasco, an Oberon Council inspector, concerning significant problems with fire safety in the staff accommodation blocks, including the building known as St Trinians. Complaint was made to Mr Tambasco in June 2004 concerning the absence of a fire escape and some alarms. A Council inspection took place on 5 August 2004 and, on 6 August 2004, the Council served upon the Plaintiff an emergency order requiring the trainees' accommodation to be vacated, and work carried out. An inspection on 12 August 2004 showed that the emergency order had not been complied with, and that trainee staff were still occupying St Trinians, leading to the issue of a penalty notice. 204 The Defendant referred to the evidence of Zone Commander Anthony Grant of the New South Wales Fire Brigades concerning a comprehensive fire inspection carried out in March 2006, shortly after the Plaintiff had ceased to operate the resort. The Defendant submitted that systemic issues identified by Mr Grant pointed to long-standing fire safety problems at Jenolan Caves House. Mr Grant was "quite shocked and taken aback by the fire safety" of Jenolan Caves House and the "lack of fire safety equipment and provisions in place in case of a fire meant it was a disaster waiting to happen" (Exhibit 35, Tab 13, paragraph 47). The Defendant submitted that an inference ought be drawn that the state of affairs described by Mr Grant existed soon before when the property was under the control of the Plaintiff. 205 With respect to failure to comply with food safety standards, the Defendant referred to the evidence of Mr Tambasco of inspection of food areas of Jenolan Caves House on a regular basis between 1996 and August 2004. Mr Tambasco stated that Chisolms Restaurant presented significant problems and that it had a very low food-hygiene standard. The Defendant submitted that the Plaintiff was plainly aware of these significant hygiene issues, because he often accompanied Mr Tambasco on his inspections and repeatedly told him that the restaurant kitchen was "difficult to clean, given it's [sic] age". 206 The Defendant referred to Mr Tambasco's evidence concerning attempts by Council to cause the Plaintiff to improve the food safety at the premises, with the Plaintiff failing to take the required action, resulting in the issue by Council of a work order and penalty notice in November 2003. The Defendant submitted that the food premises inspection reports issued for Jenolan Caves House revealed a pattern of alarming failures with respect to basic food hygiene practices, such as regular cleaning, something which Mr Tambasco noted consistently to be absent during the period 1996 to 2004. During that period, not a single food area inspection report expressed any degree of satisfaction with the basic hygiene practices of the kitchen in Chisolms Restaurant. 207 The Defendant submitted that, even when food safety issues were addressed, they were addressed slowly. In October 2003, there was evidence of rodent activity in the kitchen and an eradication program was required. A month later, a follow up inspection found that vermin droppings were still evident. A report by Mr Tambasco in January 2004 required the removal of dead vermin from under the steel bench. The Defendant submitted that a commercial kitchen which took four months to eliminate a rat problem, despite three council inspections, was badly managed. The Defendant pointed to other hygiene problems, including a report in 2004 that the temperature of the main fridge was 10 degrees, despite consistent advice since 1996 that a thermometer was required for all fridges to ensure that they were kept at below five degrees. 208 With respect to fire safety and food safety issues, the Plaintiff referred to evidence from the Plaintiff that he had employed a fire officer who visited twice a year to check on fire safety and had spent $10,000.00 to $15,000.00 on fire safety. In response to the Defendant's submissions concerning Mr Grant's inspection of March 2006, Mr Evatt submitted that the Plaintiff had been replaced by the receiver and manager on 9 December 2005, and that the evidence did not indicate what the condition of Jenolan Caves House had been between December 2005 and March 2006. 209 With respect to food safety standards, Mr Evatt noted that there had been no prosecution and submitted that the Plaintiff was not the manager of Chisolms Restaurant. He submitted that the Defendant's reliance upon vermin control highlighted one of the impossibilities of Jenolan Caves House, given its bush location and the presence of rodents in the surrounding area.

[314]

Decision 210 I accept the evidence of Mr Tambasco and Mr Grant which was relied upon by the Defendant with respect to fire safety and food safety issues. This evidence was admitted without objection and was not challenged by cross-examination. It is supported by contemporaneous documentation and is of strong probative value. 211 The evidence of Mr Tambasco points to the direct involvement of the Plaintiff at Jenolan Caves House with respect to food safety and fire safety issues. It supports the conclusion, already expressed, that the Plaintiff played a critical role in the practical management of Jenolan Caves House. There is a pattern of inspection, warning and inaction (or, at best, inadequate action) with respect to fire safety and food safety issues on the part of the Plaintiff. 212 I do not accept the uncorroborated evidence of the Plaintiff concerning the employment of a person as a fire officer, who was said to attend twice a year to deal with fire safety issues. The detailed evidence of Mr Tambasco points to entrenched and long-standing fire safety issues. In addition, although Mr Grant inspected Jenolan Caves House in March 2006, several months after the Plaintiff had vacated the premises, his inspection revealed a highly unsatisfactory state of affairs which I infer was long standing, and extended well back into the period when the Plaintiff controlled the premises. Certainly, there is nothing in the evidence of Mr Grant which points to the grave deficiencies in fire safety being of very recent origin only. 213 With respect to food safety issues, it is noteworthy that Mr Tambasco dealt with the Plaintiff, and that it was the Plaintiff who offered explanations concerning the difficulty of cleaning the kitchen in Chisolms Restaurant. Once again, this sheds light upon the Plaintiff's hands-on role at Jenolan Caves House. It was the Plaintiff who had the ability to require action to overcome food safety issues. 214 I make allowance for the setting of Jenolan Caves House, surrounded by bushland. However, competent management ought to have ensured an effective cleaning regime in the kitchen and more effective steps for controlling vermin. The maintenance of proper food hygiene standards was an essential management requirement, in the interests of guest and staff safety, at premises such as Jenolan Caves House. 215 The Defendant has satisfied me that these aspects reflect most adversely upon the competence of the Plaintiff in his management of Jenolan Caves House, and thus these issues assist the Defendant in establishing that imputation 7(b) was substantially true.

[315]

Submissions of Parties 216 The Defendant submitted that, by November 2005, one of the most consistent complaints made by guests of Jenolan Caves House was that there was no, or insufficient, hot water. The Plaintiff acknowledged this to be the most common complaint. The Defendant submitted that the Court should find that there was a consistent failure to provide hot water at Jenolan Caves House, and that this failure was attributable to the Plaintiff's management. 217 The Defendant submitted that the hot water problem at Jenolan Caves House appears first to have developed shortly after the Plaintiff took over management. There were intermittent complaints concerning hot water between about 2000 and late 2003. The Defendant submitted that, by about late 2003 or early 2004, the lack of hot water appeared to have become more permanent. The Defendant submitted that, by winter 2004, complaints of lack of hot water were almost constant. On 27 July 2004, Mr Reilly of the Trust wrote to the Plaintiff to express concern about the number of complaints over recent months in relation to hot water, with the matter being raised again by Mr Reilly in August 2004 (Exhibit 23, Tabs 52, 54 and 59). 218 The Defendant submitted that there was little dispute that, by winter 2004, there was a serious disruption to the supply of hot water at Jenolan Caves House. Reference was made to many of the Defendant's witnesses who gave direct evidence of the lack of hot water - Mr Irvine and Mr Terracini (February 2003), Mr Reid (July 2004), Mr Thorne (July 2004) together with Mr Stojanovic, Ms Padgen and Mr Cowan (July-August 2004). The problem persisted throughout 2004 and into 2005 - Mr and Mrs Cleaves (September 2004), Mr and Mrs Woollcombe (October 2004), Ms Mason (January 2005) and Mr Eaton (August 2005). The Defendant submitted that the evidence of Ms Weaver and Mr Bilton of their experience in November 2005 was entirely consistent with this pattern of complaint. It was submitted that, like so many other guests, there was insufficient hot water for at least one of the two occupants of a room to shower. 219 The Defendant submitted that an explanation for this hot water problem may be found in the evidence of Mr Gary Liccardo, a maintenance worker and plumber at Jenolan Caves House (Exhibit 35, Tab 16). Mr Liccardo commenced work on 4 July 2005, and described the Plaintiff as Jenolan Caves House manager at that time. The Defendant submitted that Mr Liccardo's evidence established that the Plaintiff failed or refused to supply salt for the water softeners which were essential to the maintenance of the resort's plumbing, and that the resulting calcium build up wrought havoc on the hot water service, since it caused the boilers to fail and the pipes to block. The problem was worsened by the fact that inappropriate plastic pipes had been installed to carry hot water, and that the calcium and pressure caused them to crack. The Defendant pointed to the evidence of Mr Liccardo that he raised this issue with the Plaintiff about one week after commencing work at Jenolan Caves House in July 2005, but that nothing was done about it, with the Plaintiff responding that the money was not available to deal with the issue. Mr Liccardo checked the maintenance record for the boilers and saw that they had not been certified since 2002. Mr Liccardo said that the Plaintiff told him not to speak to anyone from the Trust, nor to let anyone from the Trust see the boilers or hot water system (Exhibit 35, Tab 16, paragraphs 24-26). Mr Liccardo said that no preventative maintenance was performed. 220 The Defendant submitted that Mr Liccardo's description of the hot water problem was consistent with the conclusions reached by Mr Williams, the Manager of Maintenance and Capital Works Projects at the Trust (Exhibit 35, Tab 18). Mr Williams stated that regular maintenance work was done up to 1995 but that, between 1995 and the end of 2005, very little maintenance work was done. It was only after the Trust took over the operation of Jenolan Caves House that real repairs started to happen (Exhibit 35, Tab 18, paragraph 10). 221 Mr Williams observed that, prior to December 2005, he had noticed things that suggested to him that there were problems with the heating system. The full extent of the problem could not be ascertained until the Trust took over in 2006. The Defendant submitted that, like Mr Liccardo, Mr Williams observed a calcium build up resulting from the failure or refusal to soften the water before it entered the resort's hot water system. Mr Williams commissioned a report on the hotel's steam-heating system, which identified significant and long-standing failings in the steam-heating system which had similar causes. 222 The Defendant noted the evidence of Mr Williams that, despite seeing water flowing from the boiler room during building inspections, the Plaintiff had refused access to the boiler room and gave excuses as to why the water was flowing (Exhibit 35, Tab 18, paragraphs 86-87). 223 When the Trust's maintenance team was finally allowed into the boiler house in December 2005, Mr Williams described it as "disgraceful" and that "bits of high pressure pipe had been replaced with bits of low pressure PVC pool pipe" (Exhibit 35, Tab 18, paragraph 88). He also observed the resulting calcium build up and broken PVC pipes which were inappropriate for use in the hot water system (Exhibit 35, Tab 18, paragraphs 92-93). 224 The Defendant referred to Mr Williams' evidence of an approach to a boiler maintenance firm in July 2006, to repair the boilers and associated water system at Jenolan Caves House, only to be told that the firm refused to do any more work for the Plaintiff because he had not paid them, and that he always waited until things were totally broken before calling and that he always wanted the cheap way out (Exhibit 35, Tab 18, paragraph 95). Mr Williams stated that the hot water problem was finally fixed, at a cost of approximately $80,000.00 to the Trust (Exhibit 35, Tab 18, paragraph 96). 225 The Defendant emphasised that the evidence of Mr Liccardo and Mr Williams about the causes of the hot water shortage had been admitted without objection, and was not cross-examined on, and that it ought be accepted. 226 The Defendant submitted that the Plaintiff's explanation for the failure of hot water to the effect that insufficient fresh water flowed to the resort through the Trust's pipes because of weed, debris and mud should be rejected. The Defendant emphasised that the Plaintiff's evidence was not logically coherent. The problem generally was not that no water came out of the taps, but that it came out cold. The Defendant submitted that the cause of the hot water failure was the Plaintiff's own simple failure or refusal to soften the water before it entered the pipes at Jenolan Caves House, and that this was a problem of his making. The Defendant submitted that the problem was compounded by the fact that PVC pipes were inappropriate for a hot water service. All of this, the Defendant submitted, reflected adversely upon the competence of the Plaintiff's management of Jenolan Caves House. 227 With respect to the hot water issue, Mr Evatt referred to the evidence of Mr Craig Walker, a contract carpenter, who worked at Jenolan Caves House between January and September 2005 undertaking general maintenance functions (T1152). Mr Walker spoke of constant problems with the boilers being blocked because of an excessive amount of calcite and that a boiler contractor was called in and took the boiler apart (T1154). Mr Evatt submitted that this evidence supported the Plaintiff's account of hot water being prevented from coming out of the hot water taps (T541). 228 To the extent that the Trust expended some $80,000.00 after July 2006 on the hot water problem, Mr Evatt submitted that this did not point to incompetence on the part of the Plaintiff, but insufficient funds.

[316]

Decision 229 The evidence of Mr Liccardo and Mr Williams ought be accepted with respect to hot water issues. These witnesses were not required to attend for cross-examination, and their evidence concerns events over a significant period of time and refers, at different points, to the direct involvement of the Plaintiff on the issue. The Defendant's submissions (at [219]-[224]), accurately summarise the evidence of Mr Liccardo and Mr Williams. 230 Having regard to my findings with respect to the Plaintiff's credit generally, I do not accept his evidence on this issue, unless it is corroborated by independent evidence. Mr Walker worked for six months in 2005 carrying out contract carpenter and general maintenance work at Jenolan Caves House. It is not said that he carried out any work himself on the hot water service. I do not consider that Mr Walker's evidence provides any real assistance to the Plaintiff. He acknowledged that the water softeners were not working properly whilst he was employed at the premises (T1159). Mr Walker acknowledged that there were problems with the hot water in 2005 (T1168). 231 I am satisfied that there were entrenched hot water problems at Jenolan Caves House in the period, at least, between 2003 and late 2005. I am satisfied that these problems resulted from poorly maintained hot water and boiler facilities. 232 I do not accept the Plaintiff's explanation for this problem. I am satisfied that the hot water problem was one which proper ongoing maintenance would have resolved. The Plaintiff was well aware of the problem and what needed to be done, but he failed to take appropriate action. 233 I do not consider that the Plaintiff derives any comfort from the fact that it was necessary for the Trust to expend about $80,000.00 in July 2006 to fix the problems. Indeed, this evidence operates against the Plaintiff. It supports the conclusion, otherwise arising from the evidence of Mr Liccardo and Mr Williams, that there was a long-standing failure to properly maintain the hot water system at Jenolan Caves House and, to the extent that work was done, that work was done on the cheap. 234 This pattern fits neatly with the Plaintiff's overall approach to standards of maintenance, safety and cleanliness at Jenolan Caves House over a period of years leading up to November 2005. These matters reflect adversely upon the Plaintiff's managerial competence, in areas of fundamental importance to management of premises such as Jenolan Caves House. 235 I am satisfied that these features operate strongly in favour of the Defendant, and against the Plaintiff, with respect to the substantial truth of imputation 7(b).

[319]

(b) Ms Pagden, Mr Macchetta, Mr Reid, Mr Stojanovic, Margaret Milne, Neale Breden, Robin Voigt, Mr and Mrs Lowth, Frank Stevens, Mr Shapero, Mr and Mrs Cleaves, Peter Brigg and Mr and Mrs Brown in January-November 2004. 237 In addition, the Defendant referred to a letter dated 5 July 2004 from Mr Andrew Fletcher, the General Manager of the Trust, to the Plaintiff expressing concern "at the escalating number of complaints we are receiving regarding the service provided by JCR and in particular housekeeping" (Exhibit 23, Tab 48). In a letter dated 27 July 2004, Mr Reilly of the Trust referred to a number of recent complaints concerning room cleaning (Exhibit 23, Tab 52). 238 The Defendant submitted that another gauge of the hygiene standards of Jenolan Caves House was to be found in the food inspection reports prepared by the Council inspector, Mr Tambasco. It was submitted that Mr Tambasco's evidence, corroborated by his contemporaneous inspection reports over a number of years, was that Chisolms Restaurant had an extremely low standard of food hygiene. The Defendant submitted that Mr Tambasco's account was corroborated by Ms Strangwidge, a former hospitality trainee, who observed vermin in the kitchen and elsewhere on the premises. 239 The Defendant relied upon the evidence of Ms Strangwidge which explained the cleanliness problems. Ms Strangwidge stated that there were frequent occurrences of guest rooms not being cleaned, and that rooms sometimes were not cleaned between guests. She described the problem as one of understaffing, and a lack of proper equipment and resources such as proper cleaning chemicals and functioning implements. She stated that trainees were not trained how to clean and that the hotel's standards of cleaning were "disgusting". Ms Strangwidge also described the conditions of cleanliness of the staff accommodation, St Trinians, where she lived for some time as "disgusting" and stated that, during the time that she lived there, the fridge was broken and contained festering food and cockroaches (Exhibit 35, Tab 15). 240 The Defendant submitted that there was a correlation between the lack of hot water and the cleanliness of Jenolan Caves House. Reference was made to a memorandum dated 29 November 2004 addressed to the Plaintiff, from Jane Ewen and Suzanne Johnston of Housekeeping, entitled "No Hot Water - Winter 2004", stated (Exhibit 28): "During the last winter housekeeping was unable to clean both bedrooms and bathrooms without hot water. It is impossible to clean stains off carpets, curtains and bedspreads, and also the tea and coffee stations and the cups and saucers and glasses in the bedrooms without hot water.

[321]

Decision 245 The evidence concerning the failure to clean rooms and other parts of Jenolan Caves House, reflected in persistent guest complaints, indicates an entrenched pattern over a significant period of time, in particular, between 2003 and late 2005. The Plaintiff called a number of witnesses who were satisfied guests at Jenolan Caves House in earlier years and, more particularly, in 2004 and 2005. These witnesses generally had no complaints concerning the cleanliness of the rooms. I accept the evidence of these witnesses as I do with respect to evidence of guests called by the Defendant, which included criticisms of the cleanliness of the premises, including rooms, ensuites and communal bathrooms. 246 Accordingly, the Court is left with evidence from two groups of guests who stayed at different times and who described their observations and experiences at Jenolan Caves House. The conclusion may be reached from this body of evidence that the premises were not always clean and were not always dirty. 247 Beyond that, the critical evidence is that which sheds light upon the internal operation of Jenolan Caves House, including evidence of employees, and regulatory officers and third parties who came to inspect the premises for one purpose or another, particularly between 2003 and late 2005. The memorandum of 29 November 2004, from Ms Ewen and Ms Johnston to the Plaintiff, provides direct and contemporaneous evidence of the nexus between the hot water problem and inadequate cleaning at Jenolan Caves House. The evidence of Mr Liccardo demonstrates that the hot water problem was not resolved in 2005. The appropriate inference to be drawn is that cleaning problems continued. These were management failures on the part of the Plaintiff. It is especially noteworthy that the housekeepers addressed their memorandum of 29 November 2004 (at [240]) to the Plaintiff. This was not because of some remote interest which the Plaintiff had in these topics. Rather, it was because he was the person with the perceived and actual managerial responsibility to do something about these problems. This evidence assists the Defendant. 248 I accept that there was a pattern of increasing reliance upon inexperienced trainees to perform a range of tasks within Jenolan Caves House, including cleaning tasks. It was the Plaintiff who was directly responsible for this approach, as exemplified by the evidence of Ms Strangwidge. I accept the evidence of Ms Strangwidge and observe that, in many respects, her evidence is supported by other evidence. 249 I am satisfied that the evidence bearing upon the cleanliness of the premises supports the Defendant in establishing the substantial truth of imputation 7(b).

[322]

Submissions of Parties 250 In support of the substantial truth of imputation 7(b), the Defendant pointed to the range and variety of complaints about service at Jenolan Caves House. This evidence was to be found in the witnesses relied upon by the Defendant, including Mr Terracini, Mr Shapero, Mr Hirschhorn, Mr Haydon, Mr Irvine, Ms Padgen, Mr Cowan, Mr Macchetta, Mr Reid, Mr Stojanovic, Mr Thorne and Ms Gee. The Defendant submitted, correctly, that the complaints traversed almost every encounter a guest might have with the premises, from booking, to billing, to checking in, to parking, cleaning and housekeeping, dining and in the management of complaints. 251 The Defendant pointed to a consistent theme in the evidence of complainant guests that staff were young and inexperienced, and submitted that this revealed the degree to which the lack of management and training of junior staff at Jenolan Caves House reflected itself in poor service. 252 The Defendant readily accepted that many patrons considered many staff members to be good natured and well meaning, as was often noted in written complaints. However, this did not diminish the accompanying criticisms that many staff were poorly supervised, poorly trained and generally ill-equipped to provide good service to guests. The Defendant submitted that, properly understood, the criticisms of guests were directed at management, and not the staff. 253 The Defendant submitted that responsibility for management failings, including the endemic problem of inexperienced and poorly trained staff, lay with the Plaintiff. The Defendant submitted that the fact that clean rooms were provided to many guests was not to the point and was to be expected. It was observed that Jenolan Caves House had periods of low occupancy, such as mid-week, when even poorly trained and ill-equipped staff were capable of cleaning at least some of the guest rooms and bathrooms in the time available. The Defendant submitted that there were sufficient, and sufficiently serious, lapses over such a long period to indicate bad management on a continuing basis. The Defendant submitted that complaints by guests did not represent isolated lapses from an otherwise high standard of housekeeping management. On the contrary, the Defendant submitted that they were indicative of a low standard of management in that and other areas, and that the management failures were those of the Plaintiff. 254 The Plaintiff's submission on this topic emphasised the evidence of the Plaintiff's witnesses concerning their stays at Jenolan Caves House, with no, or little, criticism of service.

[323]

Decision 255 Some level of complaint is to be expected with respect to any facility which provides accommodation and food. The expectations of guests will vary from the hypercritical and excessively demanding guest, at one end of the spectrum, to the totally forgiving guest with no expectations whatever, at the other end of the spectrum. Between those two extreme positions will lie a wide range of expectations. The challenge for a competent manager is to provide services and accommodation, in light of the charges being made to guests, which are reasonable in the circumstances. Further, a competent manager would be expected to employ competent and experienced staff and ensure a reasonable standard of cleanliness in rooms, bathrooms and other facilities together with a reasonable standard of food and service for the guests. The standard is not one of perfection, but that which guests may reasonably be entitled to expect for the money being paid by them. I have had regard to the evidence of Lorraine Duffy in reaching these conclusions. Ms Duffy's own experience of management of Jenolan Caves House dated back to 1996 to 1998. Her knowledge of guest complaints related to that period, which was far removed in time from the period which is particularly relevant to these proceedings. I accept that Ms Duffy has experience and knowledge concerning hotel management. However, I do not think that her evidence concerning rates of guest complaints assists resolution of the issues in this case. Rather, the Court ought focus upon the evidence which reveals events at Jenolan Caves House, especially in the period from early 2003 to late 2005. Likewise, I do not consider that the evidence of Ms Terrie Honeysett (nee Ward), who worked at Jenolan Caves House between 1998 and 2000, assists the determination of issues in this case. 256 The evidence revealed a high incidence of guest complaints concerning service, in particular, in the period 2003 and late 2005. The evidence also reveals guests in this period who had no complaint concerning service. Even amongst the generally satisfied customers called by the Plaintiff, however, there were signs of systemic problems with staff. Pamela Coghlan detected in August 2005 "a little tension in the air that hadn't been there before amongst the staff" (T668) compared with a 1996 experience. Phillip Harper spoke of service being "a little slow" (T1183) in July 2005. There was a "slight mix up" with Steven Harrison's room in May 2005 and there was someone else in the room assigned to him, with the problem being remedied by staff (T1276). The staff member to whom Kylie Crowe initially spoke on her April 2005 stay was "pretty unhelpful and a bit rude" (T1288) but other staff were satisfactory. Dennis Smith said that service at dinner on their March 2005 stay was "a little slow" and they learned that there were "a lot of trainees" (T1304). Janice Mackellar observed that the service was "quite slow" on her April 2005 stay (T1236) and the hot water did run out in the ensuite (T1326). Ms Mackellar agreed that delay in service and the hot water running out were "rather suggestive of poor management" (T1332). 257 I am satisfied that the evidence points clearly to a deficient system of staff selection and retention, with an over-dependence upon trainees and inexperienced staff. There is direct evidence from Ms Strangwidge to support such a finding, which evidence I accept. It is this combination of evidence which bears upon the question of the Plaintiff's incompetence as a manager, the matter pleaded in imputation 7(b). 258 I accept the Defendant's submissions under the present heading which support a finding of substantial truth concerning this imputation.

[329]

264 I agree with the Defendant's submission that the way in which the Plaintiff reacted to guest complaints is relevant to the question whether he incompetently managed Jenolan Caves House. 265 The evidence upon which the Defendant relies in this respect sheds some light upon the personality of the Plaintiff. This is directly relevant to his fitness to be manager of Jenolan Caves House (imputation 7(a)), but is also relevant to his competence in this respect. It might be reasonably expected that a competent manager would deal in a calm and measured fashion with guest complaints. 266 Regrettably, the evidence reveals that the Plaintiff's approach to guest complaints was far from calm and courteous. In addition to the evidence relied upon by the Defendant, which I accept, I mention the evidence of Mr Terracini that, when the Plaintiff was responding to complaints in February 2003, "He had an unusual manner in the sense that on occasions he would place his head in his hands and on another occasion he would wave his hands around quite wildly" (T473). Mr Terracini described the Plaintiff's manner as including waving his arm (in a theatrical way) and emphasising certain words whilst saying to Mr Terracini, concerning Jenolan Caves House staff - "Well, they are hopeless, aren't they. They are absolutely useless, hopeless, you can't get good staff" (T491). 267 The Plaintiff demonstrated a degree of agitation, including the movement of arms, whilst giving evidence in these proceedings. His answers and his demeanour indicated a defensiveness with respect to complaints concerning Jenolan Caves House, accompanied by a tendency to blame others, including guests and the Trust, for the shortcomings of the premises which were under his control. I have referred to this topic already when making findings concerning the Plaintiff as a witness (at [139]ff above). 268 I have sought to make allowance for the pressures of litigation which have surrounded the Plaintiff and the defensiveness which that sometimes causes in a witness. However, the oral and documentary evidence points to these features being present in the Plaintiff for years. This evidence supports a finding that a person who behaves in this way is neither fit nor competent to act as the interface with guests, staff, the Trust and regulatory officers in a managerial capacity at Jenolan Caves House. 269 Accordingly, I am satisfied that these features assist the Defendant in its case that imputations 7(a) and 7(b) were substantially true.

[340]

Imputation 7(a) - The Plaintiff is Unfit to Manage Jenolan Caves House 273 I have already determined the meaning of the word "unfit" for the purposes of imputation 7(a) (see [183]ff above). I have rejected the Plaintiff's narrower meaning of the term. 274 In light of this ruling, there are significant areas of factual overlap which bear upon the substantial truth of imputation 7(a) as well as imputation 7(b). Although there is a difference between the imputations, they are closely related concepts. 275 A number of the findings which I have made above support the Defendant's case that imputation 7(a) was substantially true. Findings in this category include those concerning the Plaintiff's reaction to complaints made personally and in writing and his temperamental and somewhat erratic responses which relate directly to his suitability, and thus fitness, to manage Jenolan Caves House. I accept the Defendant's submission that the Plaintiff's in-court manner was consistent with the attitude disclosed in his correspondence with complainant guests, and in the evidence of guests who complained to him personally about features of Jenolan Caves House. I accept the Defendant's submission that the Plaintiff was particularly unsuited temperamentally to a role in which he was required to deal with customer complaints. 276 Further, I accept the Defendant's submission that other features of the Plaintiff revealed in the evidence establish a serious lack of judgment on his part. The Plaintiff's approach to fire safety standards, food safety standards and the presence of asbestos in the premises revealed a serious lack of judgment on his part, in circumstances where guest and staff safety ought to have been paramount considerations in the mind of a fit manager. The evidence points to the Plaintiff failing repeatedly, over an extended period of time, to take responsible and necessary action in these areas with respect to Jenolan Caves House. 277 The Defendant has established, on the balance of probabilities, the substantial truth of imputation 7(a).

[343]

Decision 283 I have already found that the Plaintiff had a hands-on and practical involvement in the management of Jenolan Caves House as at November 2005. I have also found that Ms Weaver asked Mr Mason for something to eat upon checking in, only to be told that the chef had departed at 7.00 pm and that nothing was available. In making that finding, I had regard to the evidence of Mr Cook. 284 I do not think that it is necessary for the Defendant to adduce expert evidence as a prerequisite for a finding in the Defendant's favour concerning this imputation. It was the fact that Jenolan Caves House was open to receive guests at the time when Ms Weaver and Mr Bilton arrived on the evening of 17 November 2005. Given the distance of the premises from any location where a meal could be obtained, it was a reasonable expectation that guests who were paying a not-inconsiderable sum of money to stay at the premises, would have been able to obtain food of some type before going to bed. Whilst the premises were open to receive paying guests, this seems to me to be a reasonable incident of the operation of premises such as Jenolan Caves House. After all, the hotel was in a position to supply a bottle of wine (at the cost of $40.00) to Ms Weaver and the ability to provide food of some type ought be seen as an essential element for a properly managed establishment. This was not a youth hostel or a frugal boarding house where expectations of this type may be unreasonable. 285 In reaching this view, I have not overlooked the fact that this was midweek and a low-peak time for Jenolan Caves House. Clearly, there were not many guests staying there that evening. However, the issue is one of availability of a meal of some type to paying guests, not the full menu which may have been available when the chef was present and the restaurant was open. If the management allowed Jenolan Caves House to be open to receive paying guests and to supply alcohol, it was a reasonable expectation that management would ensure that a meal of some type was available for guests arriving after 7.00 pm. 286 The inability to provide a meal of any type to Ms Weaver may have represented frugal management by the Plaintiff. I do not accept the Plaintiff's submission, however, that this characterisation is inconsistent with a finding of bad management. It was not practical management. I am satisfied that a willingness by management to receive paying guests after 7.00 pm on 17 November 2005, without the facility to provide a meal of any type to paying guests in this class, evidenced bad management on the Plaintiff's part. 287 Accordingly, I am satisfied that the Defendant has established the substantial truth of imputation 7(e).

[345]

Submissions of Parties 289 The Defendant submitted that the direct evidence of Ms Weaver and Ms Miller, accompanied by the photographs taken by Ms Miller, established the existence of a large area of discolouration on the third-floor carpet at Jenolan Caves House on 18 November 2005, and that this appeared to them to be a water stain. The Defendant submitted that other evidence of guests concerning significant wear and tear on carpets at Jenolan Caves House was relevant to this imputation. In this respect, reference was made to the evidence of Ms Padgen (July 2004), Mr Macchetta (July 2004), Mr Reid (July 2004), Mr Stojanovic (July 2004) and Ms Gee (June 2005) 290 The Defendant submitted that no evidence adduced by the Plaintiff reliably contradicted the Defendant's evidence of water staining on the carpet. The Defendant pointed as well to the memorandum dated 29 November 2004 (Exhibit 28) which indicated the difficulties for housekeeping staff in removing carpet stains without hot water (see [240] above). The Defendant submitted that, given the length of time that hot water had been limited or unavailable, it was likely that the explanation for the discolouration of the carpets observed by Ms Weaver, Mr Miller and Mr Bilton was staining from water. 291 The Defendant submitted that the floors at Jenolan Caves House were watery, as evidenced by the frequent complaints about mould and a musty smell, and that the carpets were stained so that the Court should find that imputation 7(f) was substantially true. 292 The Plaintiff submitted that evidence of guests concerning wear and tear on carpets was not relevant to imputation 7(f). Mr Evatt submitted that, to prove the truth of this imputation, the Defendant was required to establish that the floors were watery and carpet stained, particularly in the areas shown in the photograph published in the matter complained of. Even if this was established, Mr Evatt submitted that the Defendant would have to show that bad management caused the floors to be watery and the carpets stained. 293 The Plaintiff relied upon the evidence of Ms Ewen and Ms Smith, and submitted that their evidence demonstrated that the marks depicted in the photograph were due to vacuuming and the pile of the carpet, and not water staining.

[346]

Decision 294 It was the direct evidence of Ms Miller and Ms Weaver that the carpet was discoloured and stained at the location photographed in the third-floor foyer at Jenolan Caves House on 18 November 2005. 295 I have considered the evidence of Ms Ewen and Ms Smith with respect to the carpet. I do not consider that the evidence of Ms Ewen is of particular assistance on this issue. Ms Ewen had been employed at Jenolan Caves House as a housekeeper since about April 1995. The PAYG payment summary for the period 1 July 2004 to 30 June 2005 (Exhibit 31), and the payroll activity summaries for November-December 2005 (Exhibit 34), support the conclusion that Ms Ewen was not working regularly at Jenolan Caves House in November 2005 (T1513ff). I do not consider that Ms Ewen's evidence rises higher than evidence of part-time and fragmented cleaning activities at Jenolan Caves House. In reality, Ms Ewen was not in a position to give reliable evidence of systems which the Plaintiff claimed to have in place for cleaning Jenolan Caves House in 2005. 296 Ms Smith performed work cleaning up after her husband, who was a carpet layer, including work between about 1999 and 2004 at Jenolan Caves House (T1534). She described the markings on the carpet depicted in the photographs taken by Ms Miller as "tracking … just track marks from people going in one direction or the other" (T1535). She did not think that the carpets depicted in the photographs looked like stained, or water stained, carpets (T1537). Taken at its highest, Ms Smith's evidence relates to the laying of carpet, including the carpet on the third-floor foyer, and the state of that carpet up to early 2004. She was not in a position to give direct evidence concerning the state of the third-floor foyer carpet as at 18 November 2005. At best, she was able to express an opinion or belief that what was depicted in the photographs was tracking, and not water stains. I do not consider that Ms Smith's evidence provides real assistance on this issue. 297 I accept the evidence of Ms Weaver and Ms Miller that the third-floor carpet was stained, and apparently water stained on 18 November 2005. I do not accept that the markings depicted in the photographs were due to vacuuming and the pile of the carpet. If that was so, it would have been obvious to Ms Weaver and Ms Miller. I accept their evidence on this point. In reaching this conclusion, I have had regard to the evidence of guests who stayed at Jenolan Cavies House on 19-20 November 2005 (Ms Janas and Mr Cotton). I have also taken into account the evidence of Mr Cook and Mr Mason on this issue. The guests were present on days subsequent to Ms Weaver and gave evidence of general observations only. Mr Cook and Mr Mason made their observations on or after 21 November 2005. In any event, Mr Cook himself had something of a vested interest in rebutting the contents of the articles. The direct evidence of Ms Weaver and Ms Miller, supported by photographic evidence, ought be accepted. 298 The question remains whether the Defendant has established the substantial truth of imputation 7(f). Although the context of this imputation in the article complained of concerned the photographs taken by Ms Miller and the assertion in the caption "Watery floors: carpet badly stained by water", I accept the Defendant's submission that other evidence concerning the state of the carpets in Jenolan Caves House is relevant to this imputation. This other evidence points to regular complaints concerning carpet stains and mouldy and musty smells in the premises. I am satisfied that the Plaintiff managed Jenolan Caves House, and that his management was poor with respect to the system, or lack of system, for cleaning the premises including carpets. Once again, the memorandum of 29 November 2004 (at [240] above) illustrates the nexus between hot water problems and poor cleaning practices, including the cleaning of carpets. This evidence also emphasises a management failure in these respects, in which the Plaintiff was directly implicated. The deficiencies of the system manifested themselves through staining and mouldy and musty smells, of which there is direct evidence. 299 The Defendant has established on the balance of probabilities that imputation 7(f) was substantially true.

[348]

Submissions of Parties 300 The Defendant relied upon the photographs taken by Ms Miller in the games room, together with the evidence of Ms Miller, Ms Weaver and Mr Bilton on this topic. Ms Miller's photographs (Exhibit 32, Annexures NN and OO) displayed four tangled electrical power cords plugged into a double wall socket, which is switched on. The cords are sitting on a dirty floor. The Defendant submitted that the tangled and hazardous nature of the cords is plain from the photographs. 301 The Defendant observed that the only serious challenge mounted to its witnesses on this issue was that they had physically moved the machine to expose the cords, a suggestion which was denied by all witnesses. To the extent that the Plaintiff sought to rely upon the evidence of Mr Cook on this issue, the Defendant submitted that Mr Cook's photographs did not assist the Plaintiff. 302 The Plaintiff submitted that this was the most serious imputation raised against him, affecting issues of safety. Mr Evatt submitted that no other guest or person had made a complaint concerning the alleged tangled and hazardous cords in the games room. He submitted that this was probably because the cords were hidden behind the slot machines until moved for the purpose of the photographs being taken. 303 The Plaintiff submitted, in any event, that the electrical cords depicted in the photograph were not tangled, but were simply looped over one another. Reliance was placed upon the Macquarie Dictionary definition of the word "tangle" meaning "to bring together into a mass of confusedly interlaced or intertwisted threads, strands, or other like parts; - a confused jumble". It was submitted for the Plaintiff that the cords in the photograph were not tangled. 304 The Plaintiff submitted further that the Defendant had failed to adduce evidence that the cords were hazardous, with no electrician or expert being called in this respect. It was submitted that the cords appeared safe and had electrician's tags on them.

[357]

Submissions of Parties 330 The Defendant submitted that the problem of insufficient hot water at Jenolan Caves House arose from the failure to soften the water and resulting calcium build up. Reference was made to the evidence of Mr Liccardo that, in August-September 2005, the Plaintiff had ordered the softeners to be turned off altogether. The Defendant submitted that it was entirely probable, in these circumstances, that Jenolan Caves House would suffer shortages of hot water in late 2005, especially on a very cold night. 331 The Defendant repeated submissions made concerning imputation 7(b) namely that the lack of hot water at Jenolan Caves House was the result of the Plaintiff's bad management. It was submitted that the fact that there was enough hot water for Mr Bilton to shower (or bath) did not detract from the fact that there was not enough hot water for the two guests paying to stay in the room to have showers. The Defendant submitted that a properly managed hotel would provide sufficient hot water for each occupant of a double-occupancy room to shower and that this was not the case. 332 The Defendant sought to rely, in relation to this imputation, upon the imputation that the Plaintiff managed Jenolan Caves House so badly that there was no hot water for Ms Weaver to have a hot shower, which the Defendant submitted was not different in substance from the imputation pleaded in imputation 7(n). 333 The Plaintiff submitted that the Defendant had failed to establish the truth of this imputation. There was hot water for the shower in the room provided for Ms Weaver, which was used by Mr Bilton for his five-minute shower (or bath). Even if the Court accepted Ms Weaver's evidence that there was no hot water for her shower, the Plaintiff submitted that this did not establish that there was no hot water for the shower in the room provided to her. Further, it was submitted that the Defendant had failed to establish the absence of hot water was due to bad management. 334 The Plaintiff submitted that the alternative imputation relied upon by the Defendant with respect to imputation 7(n) was different in substance from the original imputation. It was submitted that there is a significant difference between an imputation that "There was no hot water for the shower in the room provided for Clair Weaver" and that "There was no hot water for Clair Weaver to have a shower". The original imputation found by the jury at the s.7A hearing was materially different to that upon which the Defendant now seeks to rely.

[367]

Submissions of Parties 351 The Defendant submitted that the two contextual imputations pleaded in paragraph 13(b) are plainly distinct imputations, which may be taken cumulatively. The Defendant observed, however, that imputations 7(e), (f), (g), (h), (i) and (n) are really subsets of specific examples of the general charges in imputations 7(a) and 7(b), and should not be regarded as cumulative with the general imputations, consistent with the observations of Hunt J in Hepburn v TCN Channel 9 Pty Limited (1984) 1 NSWLR 387 at 397-399. If that is the correct interpretation, then the Defendant relies on the cumulative effect of the two contextual implications pleaded in its defence and the Plaintiff's imputations 7(a) and 7(b), and pleads those imputations (assuming they are found to be substantially true and relate to matters of public interest or were published on an occasion of qualified privilege) back to any of the Plaintiff's imputations which are found not to be substantially true. 352 The Defendant submitted that the Plaintiff's reputation could not possibly be further injured by any of the remaining imputations which are found not to be matters of substantial truth. In particular, the Defendant submitted that if the Court finds either or both of imputations 7(a) and 7(b) are true, it would be fanciful to think that the Plaintiff's reputation was further injured by the remaining imputations, which are merely confined examples of the Plaintiff's bad management. 353 If it was necessary to resort to the contextual imputations, the Defendant submitted that, as a matter of practical reality, imputations 7(e) to (n) are specific subsets or examples of incompetent management on the part of the Plaintiff. If the Court found either or both of imputations 7(a) and 7(b) is substantially true, then the specific and confined examples of incompetent management on the part of the Plaintiff could not, as a matter of practical reality, cause any further injury to his reputation. If the Court was satisfied that the Plaintiff was incompetent in the management of Jenolan Caves House generally, or unfit to manage it, his reputation is not going to be further injured by several imputations of specific incidents of that bad management. 354 With respect to contextual truth in New South Wales, the Plaintiff submitted that the contextual implications relied upon each included the allegation of doing something "badly". It was submitted for the Plaintiff that, if he failed to comply with the asbestos requirements of the Government because of lack of funds, a dispute as to liability or a belief as to who was responsible, then the essential element involved in the use of the word "badly" would not be made out. Further, it was submitted that the first contextual imputation used the words "on occasion" and not "on occasions", and that this seems to refer to one specific incident. 355 The Plaintiff submitted that, if this point is reached, the issue for the Court is whether the injury to the Plaintiff's reputation caused by the false imputations is further injured by those contextual imputations proved to be true. Decision 356 I have determined that each of the imputations relied upon by the Plaintiff are substantially true, so that the Defendant has established the s.15 defence of truth. In these circumstances, it is not strictly necessary for me to consider the defence of contextual truth in New South Wales or in other States and Territories as it arises under statute or at common law. 357 I am more than comfortably satisfied that imputation 7(a) and imputation 7(b) are substantially true. I enter into the area of the defence of contextual truth upon the basis that one or more of my findings with respect to imputations 7(e) to 7(n) might be found to be wrong. 358 The contextual imputations relied upon by the Defendant would clearly arise, and in my view, be made good in these circumstances. I accept the Defendant's submissions that, as a matter of practical reality, a finding of one or more of the specific imputations in imputations 7(e) to 7(n) could not cause any further injury to the reputation of the Plaintiff, given my primary findings with respect to imputations 7(a) and 7(b). 359 To the extent that the Plaintiff sought to rely, in closing submissions, upon lack of funds as an explanation for not taking appropriate action in various respects, so that these matters were not indicative of "bad" management, I observe that this was not the approach taken by the Plaintiff in evidence. He did not seek to confess and avoid. Rather, he maintained that Jenolan Caves House was well managed (although not by him) and that problems were met, large sums were spent on the property and the level of guest complaints was not out of the ordinary. The Plaintiff is bound by the way in which he ran his case. 360 I am satisfied that the Defendant has established that the contextual imputations are substantially true, and that they relate to matters of public interest. Accordingly, the defence under s.16 has been established.

[368]

Interstate Defences of Contextual Truth 361 With respect to other States and Territories (except Tasmania), the Defendant noted that the position with respect to the pleading of contextual imputations by a defendant is different. The matter is governed by common law so that the Defendant is entitled to justify an imputation pleaded by the Plaintiff by pleading and proving true an imputation which is a nuance or variation of the Plaintiff's imputation, and upon which the Plaintiff himself would have been entitled to verdict at trial. 362 In other words, the Defendant submitted that in justifying the Plaintiff's imputation, it is entitled to depart from the strict meaning pleaded by the Plaintiff to the extent that the Plaintiff would have been entitled to do so at trial. The Plaintiff is not entitled to succeed at trial on a meaning which is substantially different from, and more injurious than, the pleaded meaning. 363 Accordingly, the Defendant submitted that it is entitled to plead, and justify, a meaning that is not substantially different from, and not more injurious than the Plaintiff's pleaded meanings: Chakravati v Advertiser Newspapers Limited (1998) 193 CLR 519; David Syme & Co Limited v Hore-Lacy [2000] 1 VR 667; Nationwide News Pty Limited v Moodie (2003) 28 WAR 314; Elliott v West Australian Newspapers (2008) 250 ALR 363. 364 In the common law States, the Defendant has pleaded a common law contextual imputation in response to imputation 7(n) as follows: "that the plaintiff managed Jenolan Caves House so badly that there was no hot water for Clair Weaver to have a hot shower." 365 The Defendant submitted that this is obviously no more than a nuance or variation of imputation 7(n), and not more serious than that imputation. It is submitted that it meets the sting of imputation 7(n) and, if it is proved true, the Defendant is entitled to succeed on imputation 7(n). 366 Section 18 Defamation Act 1957 (Tas) provides for a defence of justification. The Defendant submitted that the matters pleaded and particularised in relation to the defence of contextual truth in New South Wales would, if establish, also constitute a defence under s.18 of the Tasmanian Act. 367 With respect to the interstate defences of contextual truth, the Plaintiff submitted that these defences are similar to "Polly Peck defences" which are not applicable in Australia: John Fairfax Publications Limited v Zunter [2006] NSWCA 227 at [42]. 368 With respect to Tasmania, the Plaintiff submitted that the Defendant ought not succeed upon this basis. 369 With respect to the Defendant's interstate contextual defence concerning imputation 7(n), Mr Evatt submitted that the Plaintiff's original imputation is more serious because it involved an allegation that there was no hot water for the shower in the room at all. Whereas the contextual imputation alleges only that there was no hot water for Ms Weaver, but that there could have been hot water which had run out. Accordingly, the Defendant submitted that the Plaintiff's imputation would have injured his reputation more than the less serious contextual implication that there was no hot water for Ms Weaver, so that the contextual imputation would not outweigh or equal the injury to reputation caused by the Plaintiff's false imputation. 370 "The Sunday Telegraph" has a relatively small circulation outside New South Wales. The arguments advanced with respect to interstate common law and statutory defences of contextual truth are not without some complexity. Competing oral submissions were made concerning the suggested attempt to rely upon a modified "Polly Peck defence", despite the decision of the Court of Appeal in John Fairfax Publications Pty Limited v Zunter at [41]-[42]. Debates of this type have arisen in other cases: Kriss v John Fairfax Publications Pty Limited [2007] NSWSC 830 at [52]ff; Fawcett v John Fairfax Publications Pty Limited at [176]ff. 371 I have determined that the imputations are substantially true and that the s.15 defence in New South Wales has been established. The parties accept that a similar finding would flow to the other States and Territories. In light of this finding, and my finding concerning the s.16 defence in New South Wales, I do not propose to resolve a secondary issue concerning publication in other States and Territories with small circulations only of the relevant newspaper.

[370]

Submissions of Parties 373 The Defendant submitted that comment can arise by inference, wholly or partly, from the terms of the matter published: Petritsis v Hellenic Herald Pty Limited [1978] 2 NSWLR 174 at 195-196. The Defendant observed that imputation 7(a) in the present case, like the implication in Petritsis, was an imputation of unfitness arising purely by implication. 374 The Defendant submitted that none of the Plaintiff's imputations in the present case are stated expressly in the matter complained of, and they amount to judgmental conclusions which are unstated, but inevitably implied by the article. The Defendant submitted that a large number of statements in the matter complained of would be understood by the reader as expressions of judgment, or judgmental conclusions. 375 It was submitted that imputations 7(a) and 7(b) would have been understood by the reader as the newspaper's judgmental conclusion on the various unsatisfactory facts stated in the article. 376 With respect to the remaining imputations, the Defendant submitted that the question was whether those meanings would have been understood by the reader as having been conveyed by the publisher as opinions or conclusions. The Defendant submitted that, once the reader derived from the matter complained of, the idea that the Plaintiff managed Jenolan Caves House so badly, the reader would understand the publisher to be expressing a critical conclusion about the Plaintiff based on the material stated. If that is correct, the Defendant submitted that the reader would have understood the defamatory stings to be the expressions of the publisher's view, being the publisher's judgmental conclusion on the factual matters that the article recites. 377 The Defendant submitted that no different considerations apply with respect to the common law and statutory comment defences pleaded with respect to the other States and Territories and, if the Defendant was entitled to succeed on the statutory defence in New South Wales, it was entitled to succeed on the defences of comment generally. 378 The Plaintiff submitted that these were statements of fact and not comment, so that the defence of comment has not been made out.

[393]

(f) the sources of information included Mr Debus, whom the Plaintiff submitted was "obviously partisan" and whose aim was to terminate the Plaintiff's lease; Ms Weaver, whom the Plaintiff submitted was biased and Ms Silmalis, whom the Plaintiff submitted had invented a number of statements contained in the article. 393 With respect to s.22(2A)(g) and (h), the Plaintiff submitted that Ms Silmalis had failed to obtain a response from the Plaintiff prior to publication, and had not provided the Plaintiff with a proper chance to answer the serious allegations in the article. In addition, the Plaintiff submitted that Ms Silmalis had fabricated statements, in particular, that 60 complaints had been received by the Government "this year alone". The Plaintiff submitted that it was not reasonable for Ms Silmalis to make the statements contained in paragraph 5 of the article, and that it was not reasonable for her to publish without making proper efforts to obtain a response from the Plaintiff and actually obtaining his response. 394 The Plaintiff submitted that Ms Weaver had made no attempt to speak to any of the staff, let alone the Plaintiff, about the conditions at Jenolan Caves House. It was submitted that aspects of Ms Weaver's article were unfair and that, if she was sincere about expecting a meal upon arrival, she would have made enquiries in this respect when she telephoned earlier in the day about a booking. It was submitted that it was not reasonable for Ms Weaver to write the article which she did. 395 With respect to Ms Miller, the Plaintiff submitted that the captions under the photographs on the article as published were not reasonable. The dining room was not empty at breakfast, the floors were not watery, the carpets were not badly stained by water and the cords in the games room were not tangled or hazardous. 396 The Plaintiff submitted that the s.22 defence of qualified privilege should be rejected on the grounds that the publication was not reasonable, and the Plaintiff was not given an opportunity to respond.

[394]

Decision 397 There are three components to the defence, each of which must be established by the Defendant. The first is that the recipient of the matter complained of has an interest, or apparent interest, in having information on the subject of the publication. The second is that the matter is published to the recipient in the course of giving information on the subject. The third concerns the reasonableness of the publisher. The Plaintiff accepts that the first and second elements were demonstrated in this case. The controversy lies with the third element of reasonableness. 398 Considerations bearing on reasonableness for the purposes of s.22(1)(c) include taking reasonable care before publishing to ensure that the conclusion is correct and, where appropriate, making proper enquiries and checking on the accuracy of sources: Morgan v John Fairfax & Sons Limited (1990) 20 NSWLR 511. 399 I have already made findings with respect to aspects of the evidence of Ms Silmalis, Ms Weaver and Ms Miller earlier in this judgment. I repeat the essence of those findings insofar as they are relevant to the reasonableness of the statutory qualified privilege defence. 400 I am satisfied that Ms Silmalis made an attempt to contact the Plaintiff, who did not return her call. I am satisfied that Ms Silmalis made an effort to include the Plaintiff's side of the story in her article, by incorporating parts of the Plaintiff's letter to Mr Richardson which Ms Silmalis had obtained from Mr Richardson. I do not consider that the failure of Ms Silmalis to make repeated attempts to contact the Plaintiff, adversely affects the reasonableness of the Defendant's conduct in the circumstances of this case. 401 I am satisfied that Ms Silmalis incorporated in the article that which she had been told by Mr Ward concerning complaints about Jenolan Caves House. I do not accept the Plaintiff's submission that Ms Silmalis fabricated any part of the article. I accept that it was reasonable for Ms Silmalis to rely upon statements made to her by Mr Ward whom she spoke to on several occasions. It is the case that the article was inaccurate in stating that there had been 60 complaints in "this year alone". However, Ms Silmalis had been told this by Mr Ward and she was entitled to act upon what he said. It must also be said that the management of Jenolan Caves House by the Plaintiff in 2004-2005, as revealed by the evidence, was reasonably worthy of complaint in a number of respects considered in this judgment. 402 With respect to Ms Weaver, I accept her evidence as an accurate and reliable account of what she observed, experienced, and was told on her visit to Jenolan Caves House. In my view, there was no requirement upon her to disclose to staff at Jenolan Caves House that she was a journalist intending to write a story about the premises. Nor was there any expectation that she raise by telephone, in advance, the question of whether a meal would be available upon arrival. I have already considered the reasonable expectation of paying customers arriving at premises such as this that food of some type would be available. 403 Ms Miller gave reliable evidence concerning what she observed and heard at Jenolan Caves House during her visit on 18 November 2005. To a very large extent, the photographs which she took speak for themselves. However, the oral evidence of Ms Miller, taken with that of Ms Weaver and Mr Bilton, provides strong support of the features of Jenolan Caves House described by the three of them in detail. 404 In my view, the captions which accompanied the photographs of the games room and the stained carpet are accurate and reasonable in their content. The caption which accompanied the photograph of the dining room was not strictly accurate, as the evidence revealed that the photograph was taken after breakfast when the tables had been set for dinner. However, the unchallenged evidence was that very few people were in the dining room at breakfast time on 18 November 2005, so that a photograph of an empty dining room was not far from the truth. Beyond that, the photograph depicts a neat and tidy dining room. Having regard to the limited inaccuracy in this respect, I do not consider that this feature undermines the reasonableness of the Defendant's publication. 405 I am satisfied that the conduct of the Defendant in publishing the matter complained of was reasonable in the circumstances. Accordingly, I am satisfied that the statutory defence of qualified privilege is made out in this case.

[396]

Submissions of Parties 407 The Defendant submitted that, in order to constitute a fair protected report, it is not necessary that the report of the privileged occasion be verbatim or presented in full. To be a fair report, the matter complained of must, with substantial accuracy, express what took place in that part of the proceedings of which it purports to be a report. The issue will be whether the report, of which the Plaintiff complains, has substantially altered the impression which the reader would have received if he or she had been present at the proceedings being reported. If there is, in the report, a substantial misrepresentation of a material fact prejudicial to the Plaintiff's reputation, the matter complained of is not a fair protected report. A fair report is a substantially accurate summary of the proceedings, neither more nor less. The question is not whether it is fair or unfair to any particular person - the question is whether it substantially records what was said and done: Waterhouse v Broadcasting Station 2GB Pty Limited (1985) 1 NSWLR 58 at 62-63. 408 The Defendant submitted that the report of Ms Silmalis was a substantially accurate account of what the Minister for the Environment said in Parliament on 12 October 2005. Although it was not a verbatim or complete account of what the Minister said on that occasion, the Defendant submitted that it did not contain misstatements of fact prejudicial to the Plaintiff's reputation so that the defence of fair report is made out. 409 The Plaintiff submitted that the defence of fair protected report must fail in this case for two reasons. Firstly, it was not stated in the article complained of that the words attributed to Mr Debus were said in Parliament. It was submitted that it must be made clear in the article that the report is of proceedings in Parliament, and that the article in this case did not so state that. As a result, in the mind of a reader, the words attributed to Mr Debus could have been said in a private conversation with Ms Silmalis or under a variety of other circumstances. 410 Secondly, the Plaintiff submitted that the report of Ms Silmalis did not report accurately and fairly what was said in Parliament. It was submitted that other information which she obtained, such as that from Mr Ward, was irrelevant. The Plaintiff emphasised that Ms Silmalis' article stated that 60 complaints were received "this year", and that this was not what was said in Parliament. Rather, Mr Debus had said that there were complaints made over "recent years" without any mention of the number of complaints. Further, the Plaintiff submitted that the Minister had said nothing in Parliament about rude staff, and made no reference to dirty toilets and filthy rooms. The Plaintiff submitted that these phrases were inventions of Ms Silmalis and that her report was neither fair nor accurate.

[410]

Submissions of Parties 425 The Plaintiff claims general damages and aggravated damages. General damages serve three functions - to act as a consolation to the Plaintiff for the distress he suffered from the publication of the statement, to repair the harm to his reputation (including, where relevant, his business reputation) and as a vindication to his reputation in the eyes of the public. Damage and injury to reputation is presumed. It flows from the act of publication to others, and evidence does not have to be called to prove it in fact occurred. The Plaintiff called witnesses with respect to his position and standing (Mr Caulfield, Ms Duffy, Mr Hann, Ms Honeysett, Ms O'Ryan, Mr Richardson and Mr Stracey). In addition, the Plaintiff adduced evidence from himself and others concerning his reaction to the publication and his hurt to feelings. Evidence was also adduced from the Plaintiff and others concerning the attitude of others to him following the publication. 426 The Plaintiff relied as well upon the mode and extent of publication of "The Sunday Telegraph" with an estimated readership in the period July 2005-June 2006 of 1,897,000 in New South Wales and 26,000 in Queensland. The Plaintiff relied upon the absence of apology from the Defendant. 427 The Plaintiff sought aggravated damages in accordance with s.46 Defamation Act 1974 (NSW). 428 The Defendant emphasised that any assessment of damages must be made in conformity with ss.46 and 46A Defamation Act 1974 (NSW). The Defendant submitted that any general damages awarded to the Plaintiff must find a place within a range marked out by the range of general damages available in personal injury actions, and that whilst there can be no precise mathematical comparison between such damages and damages for defamation, attention must be paid to the nature of the injury done by defamation compared with the consequences of disabling physical injury. 429 With respect to the Plaintiff's claim for aggravated damages, the Defendant submitted that such damages are not constituted by a separate sum of general damages, but can form part of an award of general damages in circumstances where the conduct of the Defendant is proved to have been improper, unjustifiable or lacking in bona fides. However bona fide persistence in an unsuccessful defence is not a matter of aggravation: Triggell v Pheeney (1951) 82 CLR 497 at 514; Coyne v Citizen Finance Limited [1990-1991] 172 CLR 211 at 237. 430 The Defendant submitted that an appropriate award of damages in this case, should the Plaintiff succeed in his claim, would be modest. The Defendant said that it is important to recall that, at the time of publication on 20 November 2005, the Plaintiff was in heated dispute with the New South Wales Government over the lease of Jenolan Caves House. During the course of the Parliamentary debate on 12 October 2005, the Minister, Mr Debus, had made a range of stinging remarks concerning the Plaintiff's management of Jenolan Caves House, and his suitability to continue as lessee and manager. Those remarks, some of which were repeated in the articles, were sharply critical of the Plaintiff and his reputation. 431 The Defendant submitted that it was also important to recall that, in early December 2005, shortly after the articles were published, receivers and managers had been appointed to Jenolan Caves House, effectively ending the Plaintiff's occupation. 432 It was submitted that the evidence about the Plaintiff's hurt feelings, and the damage to his reputation, failed to distinguish damage which flowed from his existing dispute with the Government and the appointment of receivers and managers on the one hand, and any damage caused by the articles. The Defendant pointed to evidence of what it described as a conspiracy theory of the Plaintiff - that the Defendant and the Government were conspiring to harm him. The Defendant submitted that the Plaintiff's belief about a conspiracy was without foundation, but it lay at the heart of his reaction to the articles. 433 The Defendant submitted that, at the time of publication on 20 November 2005, the Plaintiff was distressed by the very real and imminent prospect of being evicted from Jenolan Caves House. Further, the Defendant submitted that evidence adduced with respect to the Plaintiff's reputation, involved no attempt to differentiate between the harm which resulted from the articles complained of, and that which inevitably resulted from the fact that his business was taken away from him following the appointment of receivers and managers, and as a consequence of the Minister's speech in Parliament. 434 The Defendant submitted that, having regard to these matters, particular care must be taken to distinguish the harm actually caused by the articles from the harm to the Plaintiff's reputation caused by his actual eviction, the hurt to feelings which flowed from his misguided conspiracy theory and the hurt to feelings which flowed from the words spoken from the Minister in Parliament. 435 The Defendant also submitted that the Plaintiff's attempt to distance himself from the management of Jenolan Caves House was a factor which weighed heavily against him in an assessment of damages. It was submitted that the Plaintiff had displayed very poor credit as a witness generally, and that his evidence about his hurt feelings should not be accepted at its face value.

[411]

Decision 436 There is some artificiality in an assessment of damages made in the circumstances of this case. It will be necessary to consider what damages would have been appropriate, having regard to available verdicts in the Plaintiff's favour with respect to all, or some only, of the imputations. 437 As a general observation, it is necessary to keep in mind that there were a number of events which were impacting upon the Plaintiff's reputation as at 20 November 2005. There was already action in train by the Government to terminate the lease and to remove the Plaintiff from his occupancy of Jenolan Caves House. Further, the receivers and managers were taking action with respect to the Plaintiff and Jenolan Caves House. On top of these events came the publication in "The Sunday Telegraph" on 20 November 2005. 438 I accept that this publication in a Sunday newspaper, with a wide readership in New South Wales and Queensland, would be damaging to the reputation of the Plaintiff. However, the Plaintiff's reputation was not unsullied at that time, with public statements being made about him and the business, accompanied by the action of Government and creditors adverse information concerning the Plaintiff with respect to the same subject matter as that touched upon in the matter complained of. 439 No doubt, the effect of the publication was to inform a much larger group of persons of what was happening, at the Government level, with respect to the Plaintiff and Jenolan Caves House. However, there was much adverse to the Plaintiff's reputation already in the public arena. 440 If the Defendant had failed completely with its defences in this case, I would have calculated general damages in the sum of $75,000.00. 441 With respect to aggravated damages, if the Defendant had failed completely with its defences, it would have been as a result of bona fide persistence in unsuccessful defences. That is not a matter of aggravation. Even if the Defendant had failed completely with its defences, I would not have been satisfied that the conduct of the Defendant had been proved to be improper, unjustifiable or lacking in bona fides. If I was wrong in that conclusion, and a basis for aggravated damages had been made out, I would have allowed a sum not exceeding $10,000.00 in this respect. 442 The conclusions with respect to damages which I have expressed above arise from the notional complete failure of the Defendant to establish its defences, including a failure to establish the substantial truth of imputations 7(a) and 7(b). It is necessary for me to consider an alternative scenario. 443 This scenario involves a finding that the Defendant has established the defence of substantial truth with respect to imputations 7(a) and 7(b), but has not demonstrated a defence of substantial truth with respect to the particular allegations contained in the remaining imputations. For present purposes, I will approach this assessment upon the basis of a failure by the Defendant to succeed on any, or all, of the particular imputations by way of defence of substantial truth. Assessment of damages on this scenario commences with an acceptance that it was substantially true that the Plaintiff was unfit to manage Jenolan Caves House and it was substantially true that he was incompetent in the management of Jenolan Caves House. Despite these general imputations being found to be substantially true, this calculation is approached upon the basis that the particular allegations were not found to be substantially true. 444 There is a significant element of artificiality about this approach. However, I will undertake it for the purpose of explaining my reasoning on damages in this respect. It is difficult to see how anything other than a very small award of general damages could be made in circumstances where it had been demonstrated as substantially true that the Plaintiff was unfit and incompetent to manage an establishment such as Jenolan Caves House, but that a number of specific deficiencies in management had not been made good against him. The damage to reputation arising from findings such as this would be small indeed. On this scenario, an award of general damages not exceeding $10,000.00 would have been appropriate. There would be no proper basis for an award of aggravated damages on this scenario, and I would make no allowance in that respect.

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Judgment (414 paragraphs)

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Cases Cited (23)