Howe and McColough v Lees [1910] HCA 67

Howe and McColough v Lees [1910] HCA 67 - HCA 1910 case summary — Zoe

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suggested that such an interest would give rise to a privileg occasion. The mere fact that persons are in the same line of business or carry on business at the same place does not create a common interest. In all the cases where privilege has been - supported on the ground of interest the particular transaction or the. particular subject matter of the communication was a matter of common interest : Spencer Bower's Actionable Defuma- tion Code, pp. 132, 146. If the defendants' interest was in know- ing whether persons to whom they were likely to give credit would pay them, the defendants had no interest in making this - communication to others. They in no way furthered their own interests in making it. If they were furthering their own - interests, they had no duty to make the communication, An_ invitation may be one of the circumstances which give rise to a_ privileged occasion, and is not merely material on the question of malice: Loogood v. Spyring (1). Given a common interest or a duty, the communication must be fairly warranted by the reason- - able exigency of the occasion. There must be some degree o imminence of the danger against which the person who makes - the communication is warning the person to whom it is made, A mere possibility of danger. arising is not sufficient: Foley - y. Hall (2). In order that the occasion in the present case - should be privileged it must come within one of the three follow- ¥ ing classes of cases: - (1) Where the person who makes the communication has an interest in the subject matter of the 5 communication and the person to whom it is made has a - corresponding duty. Of this class Hebditch v. Macllwaine (8) is an example. (2) Where the person to whom the com- - munication is made has an interest and the person who makes it has a duty even of imperfect obligation, Of this class Stuart v. Bell (4) is an example. (3) Where the person who - makes the communication and the person to whom it is made have a common interest in the subject matter of the communica- tion. Of this class Dunman v. Bigg (5) is an example. That is a case of a communication by a creditor to a surety. An exami-

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to buy at other agent's sales, may safely be trusted. The fact that a buyer has made default in his dealings with one agent is undoubtedly material to every other agent in determining what risk there may be in giving him credit if he should become a buyer. As an ordinary business precaution, each of them might well make inquiries from the others with respect to a fact of that kind in relation to any person likely to become a buyer, and there can be no doubt that the answer of each agent to whom the question was put would be privileged, if it amounted to no more than a statement of what he honestly believed to be true and relevant to the inquiry. In such a case the agent making the inquiry would have a direct interest in making it, and he who answered it, acting in pursuance of that moral obligation to furnish such information which the law recognizes as a duty, would be protected under the first branch of the rule laid down in Toogood v. Spyring (1). But where, as in this case, the agents agree, for the protection of their several businesses, to voluatarily exchange information of this kind through the association, seem- ingly without the formality of individual inquiry, another and, in some aspects, a different position arises. The agent to whom the information is communicated has the same direct interest in the information as in the case last put. But the agent who com- municates it voluntarily is not acting in discharge of a moral duty such as the law recognizes, nor are his own interests directly served by giving the information. He has, however, a duty and an interest of a different kind created by mutual obligations of the contract of association. Asa member of the association he has contracted to give the information, and, in giving it, he is fulfilling a legal duty. In common with every other agent in the association, he has also an interest in that class of information. He cannot, however, obtain information from his fellow agents as to the credit of persons who are actual customers of theirs, and probable customers of his, unless he is prepared to give them similar information about his own cus- tomers. Mutuality is the soul of the system agreed upon, and every agent is interested in the preservation and working of the system. That is one of the interests common to all the agents

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morality, and as to the degree of constraint, rather than of determining law. The Courts have applied the test under con- ditions of extraordinary variety, but, as is not unusual in the common law Courts, there has been a tendency to treat certain circumstances of frequent occurrence as if they conclusively settled the question of the applicability of the principle. The hounds of the law sometimes lose the scent of the principle in looking for the likely cover for the game. Where the cireum- stances are at all exceptional, as in this case, we have to go back to the test in its full breadth and scope, unfettered by any state- ments of the law adapted to circumstances of the more ordinary kind. "No definite line can be so drawn as to mark off with precision those cases which are privileged, and separate them from those which are not": Per Lindley LJ. in Stuart v. Bell (1). The learned Judge at the trial said that the information was not given in the public interest - that the defendants were merely business men taking care of their own interest - not bothering about the public - and he treats this consideration as decisive. But information given in some private interest is protected if it comply with the test above stated. It is protected "for the common convenience and welfare of society ; and the law has not restricted the right to make them" (the communications) "within any narrow limits": Per Parke B. in Toogood v. Spyring (2). As Grove J. said in Robshaw y. Smith (3): - *' Everyone owes it as a duty to his fellow-men to state what he knows about a person, when inquiry is made." As Erle C.J. said in Whiteley v. Adams (4): - * It is to the general interest of society that correct information should be obtained as to the character of persons in whom others have an interest." As Brett LJ. said in Waller v. Loch (5): - * If a person who is thinking of dealing with another in any matter of business asks a question about his character from some one who has means of knowledge, it is for the interests of society that the question should be answered, and if answered bond fide and without malice, the answer is a privileged com- munication."

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in the knowledge of its contents. They are engaged in mercantile affairs, in which their security and success must greatly depend upon a knowledge of the pecuniary transactions and credit of others." The only dispute was whether what they might do by communication with each other, they might not also do by a common agent, and by printing, and it was held that they might. This shows also - what, indeed, I do not understand to be disputed in this case - that the communication to the secretary is not outside the privilege, if the communication to one another is privileged (and see Edmondson v. Birch & Co. Ltd. and Horner (1). Nor is the fact that the request for thformation is not pointed at any particular person fatal to the claim of privilege, for in Cockayne v. Hodgkisson (2), a land owner requested a tenant to inform him if he ever saw or heard anything concerning the game ; and a letter from the tenant to the landlord, stating that the plaintiff was encouraging poaching and destroying game, was held to be privileged. The truth seems to be that the word "interest," as used in the cases, is not used in any technical sense. It is used in the broadest popular sense, as when we say that a man is "interested " in knowing a fact - not interested in it asa matter of gossip or curiosity, but as a matter of substance apart from its mere quality as news. The interest of the other persons in Bendigo, or in Victoria, would probably be treated as too remote, too unsubstantial ; but the interest of the limited body of auctioneers selling in the Bendigo yards, and exposed to the plaintiff's bids, cannot be regarded as unsubstantial or remote. There is nothing, in my opinion, in Macintosh v. Dun (3), which conflicts with the view that the present is a case of privilege. There, the trade protection society had no interest in, or duty in respect of, the information given, apart from their contract to supply it. The Judicial Committee laid stress upon the fact that the society, in effect, volunteered the information - requested the request for it - a fact which, though not conclusive, is highly important; and it said that, as a matter of public policy, the protection, which the law throws around com- munications made in legitimate self-defence, or from a bond-fide sense of duty, should not be extended to communications made (1) (1907) 1 K.B., 371. (2) 5C. & P., 543. (3) (1908) A.C., 390.

At a glance

Court

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Before

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Judgment (181 paragraphs)