KRISS v JOHN FAIRFAX PUBLICATIONS PTY LTD

The findings of the Tribunal 13 The Bar Association raised a number of allegations against the plaintiff. They all related to his dealings with a client, Mrs Bach. 14 The Tribunal found that the plaintiff first met Mrs Bach in 1988 when he accepted a legally aided brief to appear for her to defend a preference claim brought against her in the Supreme Court. The claim was successfully defended. 15 Following the completion of the proceedings the plaintiff met Mrs Bach on a number of non-professional occasions, described by the Tribunal as "informal", being occasions when he was not briefed by a solicitor to give legal advice. The Tribunal described those meetings in the following terms: "During those meetings Mrs Bach told the barrister that: Her home which was built on 12 acres of land at Camden was mortgaged to the National Australia Bank for about $70,000, she was experiencing difficulty in meeting the mortgage repayment, and was concerned that the bank might foreclose. Her land had recently been rezoned permitting subdivision of about two acres into one-quarter acre lots. She was frightened of her husband who had been financially irresponsible in the past, was an alcoholic and was undergoing psychiatric treatment. The State Bank of New South Wales had forced her to sell other property to reduce the debts of a business which had been conducted by her husband, and she considered that the State Bank had acted improperly in doing so. The barrister felt sympathy for Mrs Bach and wished to assist her and in late 1988 or January 1989 advised her to consult Blessington Judd, solicitors regarding her complaint against the State Bank. Blessington Judd was a firm of solicitors which had briefed the barrister in the past and he anticipated that he would be briefed to advise Mrs Bach on her claim against the State Bank. He also thought there was a possibility that he may be briefed to appear if proceedings against the bank were commenced, but there was no agreement or understanding with the solicitors that he would be briefed to advise or appear. Blessington Judd did brief the barrister to advise in January 1989, and he gave a written opinion on 16 February 1989 in which he said that Mrs Bach had a valid claim for damages against the State Bank. The barrister believed the cost of litigating that claim could be $30,000, and because it was a commercial dispute, Mrs Bach would not be eligible for legal aid. Mrs Bach continued to meet with the barrister and discussed her financial and marital problems including her inability to fund any proceedings against the Bank." 16 During one of the meetings with Mrs Bach the plaintiff suggested that she could probably solve her financial problems by obtaining bridging finance, and use that money to fund the litigation against the State Bank. He suggested that the loan could be repaid by subdividing part of the land around her home and advised her to appoint "a project manager" to organise the development. 17 The Tribunal found that this advice was "not given as a result of any brief to advise, but was given during one of the informal meetings with Mrs Bach." The Tribunal found that in giving the advice the plaintiff was motivated by a genuine desire to assist Mrs Bach. The Tribunal expressly found that the plaintiff "did not intend to prey upon Mrs Bach's desperation and vulnerability." 18 Thereafter the plaintiff attempted to arrange bridging finance and find a project manager to finance and carry out the subdivision. He was not successful and offered to undertake the role of project manager himself. There was uncertainty about the financial arrangements between the plaintiff and Mrs Bach. However, the Tribunal found that in conversation with Mrs Bach the plaintiff intended to convey that in arranging finance and the subdivision he would not be acting as a barrister. Instead he would charge for his time in arranging finance and obtaining subdivision approval. Once subdivision approval was granted the plaintiff's only remuneration for subsequent work in arranging further finance and carrying out the subdivision would be "that he would receive a block of land from the subdivision." It was agreed that the plaintiff would take title to the land so that he could effectively complete the task of managing the project. 19 The work which the plaintiff had undertaken for Mrs Bach as a barrister was done on the instructions of Blessington Judd solicitors. A different firm of solicitors Walsh James, and in particular Miss Tsai acted on the subdivision. Although the plaintiff sent a memorandum of fees to Miss Tsai for work he undertook in furtherance of the subdivision the Tribunal found that this work was not of a kind "ordinarily performed by a barrister." The plaintiff maintained that he had told Mrs Bach that he would charge for this work but the Tribunal found that Mrs Bach had not consented to these charges. The Tribunal found that the plaintiff failed to appreciate and distinguish his role and work as a barrister from his role and work outside the ordinary practice of a barrister. 20 Among other arrangements made to facilitate the development a bank account styled, "Mr Maurice Kriss Wilton Properties Account" was opened from which the plaintiff had authority to withdraw monies to facilitate the subdivision. However, the Tribunal found that in operating on that account, and in particular in relation to fees which he paid himself from it, he demonstrated "a disregard of the trust placed in him by Mrs Bach." The Tribunal said: "His operation of the account demonstrates a disregard of the trust placed in him by Mrs Bach. The barrister did not give any proper consideration to the nature, itemisation, or quantification of any expenses for which he may have been entitled to be reimbursed. He ignored the absence of authority to pay his fees from the trust account, and he did not give any proper consideration to the quantum of the fees to which he was entitled. He failed to keep any proper record of disbursements from the trust fund. The only records kept of the amount claimed to be paid as reimbursement for expenses and for counsel's fees are the notations on the cheque butts. Those notations do not record the true nature of or justification for those payments. He said he did not make any notation on his fee notes nor did he keep a record of the amounts he paid as a contra against outstanding fees. The Tribunal does not find that the barrister intended to permanently deprive Mrs Bach of the unauthorised and excessive payments from the account. It accepts that the barrister intended at some stage to account to Mrs Bach and make adjustments if necessary, but his failure to keep proper records made it difficult if not impossible to properly account. This is illustrated by his inability to substantiate the amounts he claims as reimbursement for expenses." 21 The relationship between the plaintiff and Mrs Bach later turned sour. Initial problems arose because of the action of Mrs Bach's husband, who may have been mentally unstable, and who did not trust the plaintiff. When the relationship broke down completely complaints were made which led to the proceedings against the plaintiff in the Tribunal. The Tribunal made the following findings: "To the extent to which the conduct stated in sub-paragraph (c) is conduct occurring in connection with the barrister's practice of law, he entered into the agreement with Mrs Bach knowing that she did not have independent legal or commercial advice, and he did not adequately advise her of his intention to charge for non-legal work, the rate he would charge for that work, and any entitlement he had to reimbursement for personal expenses from the trust fund. The Tribunal is not satisfied that he failed to do so because of a desire to disadvantage her. He failed to do so because of a lack of appreciation of the distinction between his role as a barrister and his commercial and confidential relationship with Mrs Bach, and because of her failure to appreciate his obligation to ensure that she was fully informed and advised. The confidence Mrs Bach had in the barrister arose from the relationship of barrister and client in the 'Russett litigation'. The subdivision advice and the project management agreement related to a possible relationship of barrister and client because the barrister may have been briefed in the State Bank litigation. There was also a relationship between those matters and payment of the barrister's fees for legal and non-legal work. The Tribunal therefore finds that the matters complained of in sub-paragraph (c) were in connection with the barrister's conduct of the law, and was unsatisfactory professional conduct because of the barrister's failure to fully advise Mrs Bach himself and to ensure Mrs Bach obtained independent legal and commercial advice before entering into the agreement with him ." (emphasis added) 22 The matters complained of in sub-paragraph (c) were as follows: "Agreeing to act as Mrs Bach's subdivision project manager and acting for her in that capacity: (i) When he had previously advised and appeared for her as counsel in litigation brought against her by Russett Pty Limited (In Liquidation); (ii) When he had previously been briefed and continued to be briefed as her counsel in respect of the abovementioned litigation against the State Bank; (iii) When to his knowledge she had no independent legal and/or commercial advice as to whether she should embark upon the subdivision project and if so, to appoint him as project manager thereof; (iv) When he stood to gain a financial advantage from acting as project manager; (v) When he knew there had been no independent assessment of the commercial viability of the subdivision project; (vi) When he knew that Mrs Bach reposed great confidence and trust in him to act in her best interest as a barrister and/or commercial adviser. (vii) When he knew that Mrs Bach had serious matrimonial, financial and legal problems; (viii) When he had allowed a social relationship to develop between himself and Mrs Bach in which he knew she regarded him as her confidant in respect of highly personal matters." 23 One particular allegation related to a cheque which the plaintiff had drawn on the trust account for the sum of $2,630.00. It was alleged that the plaintiff used that money for personal expenditure in breach of the trust upon which he held the money for Mrs Bach. 24 The Tribunal said of this allegation: "The Tribunal has already found that neither the letter of 31 January 1990 nor any other consent or permission from Mrs Bach authorised the barrister to draw that cheque, and the barrister knew he had no authority. The barrister knew the money in the Wilton Property account was money held on trust for Mrs Bach. The findings which have already been made lead to a conclusion that the barrister consciously acted in breach of trust when he drew that cheque and appropriated the proceeds to his own use. The Tribunal considers that conduct amounts to a grave impropriety affecting the barrister's professional character and is indicative of a failure either to understand or to practice the precepts of honesty or fair dealing (cf Kennedy v Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563 at 563-564 per Rich J; O'Reilly v Law Society of New South Wales (supra) per Clarke JA at 220). Such conduct amounts to professional misconduct." 25 There was a further allegation that the plaintiff utilised trust monies for personal expenditure in the sum of $750.00. The Tribunal said of this allegation: "Sub-paragraph (i) (i) alleges the barrister utilised the trust fund for personal expenditure and in breach of trust in an amount totalling $750.00. This refers to the amounts the barrister claimed entitlement to reimbursement for the cost of telephone calls, motor vehicle expenses and typing expenses relating to his work as project manager. It is arguable on one interpretation of the Deed of Trust that he was entitled, as part of the expenses of the subdivision, to reimbursement of such costs in addition to his remuneration of a block of land. The Tribunal is not satisfied that the barrister did not have that belief, and is not satisfied that when the barrister drew the cheques, he did not believe he had incurred some expenses and was entitled to draw the cheques in reimbursement for those expenses. But it is satisfied that when he drew the cheques he was simply guessing at the amount to which he was entitled, and neither before he drew the cheques nor subsequently did he work out how much he was in fact entitled to take. The information which he provided to Mr Newbould which, at best may account for $535.02 was unsuccessful reconstruction. The barrister did not attempt to substantiate any higher amount. The onus is on the Association in accordance with the test laid down in Rejfek (supra) to satisfy the Tribunal of the facts alleged to amount to misconduct. The onus is not upon the barrister to disprove those facts. But the evidence (if there is any) to substantiate the $750.00 is evidence solely in the possession of the barrister, and apart from unsubstantiated assertion, he has provided no evidence to account for at least $215.00. His obligation as a trustee required him to keep sufficient records to enable him to account for disbursements from the trust fund, and he failed to do so. The Tribunal is not satisfied that the barrister did not believe he was entitled to be reimbursed for some expenses, and is not satisfied that he knew the expenses to which he was entitled to reimbursement may not have amounted to $750.00. The fact that he cannot now substantiate expenses totalling that amount is consistent with the finding already made, namely, that he never properly applied his mind to a quantification of those expenses, and kept no record of the expenses. If the barrister knew he was not entitled to be paid the whole or part of that money, and his belief accorded with a proper interpretation of the agreement, his conduct in paying the $750.00 would amount to professional misconduct. Whilst the Tribunal cannot be satisfied that he did not believe he was disentitled to reimbursement and is unable to find that the expenses may not have amounted to $750.00, it considers his conduct in paying the expenses amounts to unsatisfactory professional conduct because in paying the money, it is satisfied he did not pay any proper regard to his entitlement, and the only records he kept were the notations on the cheque butts, only one of which comes even close to describing the purpose of the payments. He acted with reckless disregard of his obligations as a trustee when he made the payments, and he never gave proper consideration to his entitlement to reimbursement. The Tribunal therefore finds that this conduct amounts to unsatisfactory professional conduct. This finding is not made upon the basis that the agreement on its true construction did not authorise reimbursement of the expenses. The Tribunal is not satisfied the barrister could not reasonably believe the agreement upon its proper construction entitled him to reimbursement and that he did not hold that belief." 26 The Tribunal also found that the plaintiff was careless when acting on an authority which he received for payment of fees by Mrs Bach. The Tribunal found that he overpaid himself the sum of $2,920.00 and in so doing had acted carelessly. The Tribunal found that the plaintiff's records were inadequate and together with this carelessness concluded that in overpaying himself the breach of trust amounted to unsatisfactory professional conduct. 27 Furthermore, the Tribunal found that the plaintiff in concealing the overpayment had committed professional misconduct. In particular, the Tribunal said: "In the Tribunal's opinion, a deliberate concealment by a trustee of a breach of trust when accounting to his beneficiary, particularly where the trustee has benefited from that breach amounts to professional misconduct." 28 The Tribunal also made adverse findings in relation to the plaintiff's failure to provide a full and proper account. It said: "The Tribunal has found that the barrister did not keep adequate records of his disbursements from the account, he did not give proper consideration to his entitlement to pay some of the money from the account, and it seems he did not even keep all of the Bank statements issued by the Bank. He was asked to account in October 1991 and even to this day he has not properly accounted, and has not provided an adequate explanation for failing to do so. If his loss of Bank statements created some problem in accounting, he could have obtained duplicate statements from the Bank years ago. Mr Lowbeer and Mr Newbould were frustrated in their attempts to properly account because of the absence of proper records and the barrister did not give them full and accurate information to make up for the absence of proper records. The barrister had the cheque butts relating to the seventeen cheques drawn on the account and he must have known that he had failed to properly account to Mrs Bach. That failure continues to the present day. The Tribunal considers that the barrister's failure to account over such an extended period despite a number of requests to do so, and the fact that he must have known that he had failed to properly account (even if he was not deliberately concealing a breach of trust) amounts to a grave impropriety affecting the barrister's professional character and is conduct indicative of a failure by the barrister to either understand or to practice the precepts of fair dealing in relation to his clients, and amounts to professional misconduct." 29 The hearing before the Tribunal was conducted in two stages. In the first stage evidence was received and after consideration the Tribunal made the findings with respect to the plaintiff's conduct to which I have referred. The Tribunal then conducted a hearing in relation to "penalty." Following that hearing the Tribunal published its findings. Those findings were: "The barrister did not keep proper trust account records and did not give proper consideration to the quantum of disbursements he was entitled to make from the trust money. The foregoing could be explicable on the basis of inexperience as a barrister, and a generally careless approach to book work. This conduct, whilst it involves breaches of fiduciary duty or trust deserving of censure, does not illustrate the degree of want of probity which would necessarily demonstrate an unfitness to practice. The barrister's subsequent conduct was more serious. When he became frustrated about non-payment of his fees, he drew on the trust account to make a part payment of those fees. He knew he had no authority to do so, and when he made the withdrawal he believed the client had required a taxation of his fees, which had not been carried out. The fact that he may have been justifiably upset about the delay in payment of his fees and the fact that he had competently performed his work as a barrister to earn those fees may explain but does not excuse his conduct. The money he held on trust was not entrusted to him by the client as security for his fees. A client is entitled to require taxation of counsel's fees, and if her counsel happens to be holding money on trust, the client is entitled to trust the barrister not to use that money without her authority. The barrister knowingly committed a breach of trust out of self-interest to expedite payment of his fees. The barrister later withdrew further money from the trust account in payment of his fees after he was given express authority to do so. Without intent, but as a result of gross carelessness, he overpaid himself. When the client asked the barrister to account, he deliberately concealed the overpayment in the account which he gave. The evidence given by the barrister and his wife on 11 December 1995 suggest that he was in stressed financial circumstances by the time he deliberately concealed the overpayment. It is a fair conclusion that the concealment was in order to avoid making an immediate refund because he was not able to do so. He deliberately misled his client out of self-interest when he concealed the overpayment from her. Thereafter he consistently failed to give a proper account to his client. … In final address before the finding of deliberate concealment was made, his counsel submitted that a finding of deliberate concealment should not be made. The barrister was present when that submission was put. The Tribunal does not accept the barrister was truthful when he claimed on 11 December 1995 that he intended to admit the deliberate concealment at the hearing. He did not do so, and it was only after an adverse finding was made on that issue that he claimed that he had intended to make the admission. The Tribunal does not accept the barrister intended to admit the deliberate concealment unless an adverse finding on that issue was made. The conduct of his case and his evidence was inconsistent with such an intention." 30 Finally, the Tribunal concluded: "The present case is one in which the barrister's probity has been called in question. Although the conduct is isolated in the sense that it involves only one client, the conduct illustrates a frequency of the barrister's self-interest prevailing over his probity. When he became frustrated about payment of his fees, he committed a deliberate breach of trust to achieve part payment. When he was asked to account and he realised he had made an overpayment and was financially stressed, he deliberately concealed the overpayment. When he responded to the Association about Mrs Bach's complaint on 12 June 1992, he masked the overpayment. Having failed to successfully contest the allegation of deliberate concealment, he gave untruthful evidence in an attempt to mitigate against the order which would be made. This behaviour is not simply illustrative of a lack of professional judgment or a lack of proper understanding of legal ethics, or a lack of understanding of the law. It was not submitted on behalf of the barrister that he did not know that he should not take trust money without authority, that he should not conceal breaches of trust and that he should not be untruthful. There is no practical course of study or supervision which can protect the public against a repetition of that kind of behaviour. The Tribunal has no confidence in the barrister's claim of remorse. Remorse was only expressed after the adverse findings were made. The deliberate concealment issue was contested at all times. Despite the voluntary cessation of practice in December 1991, the barrister continued in his failure to properly account and maintained a denial of deliberate concealment. It was not a denial in the sense of simply putting the Association to proof. The denial was expressed in his Amended Reply, in his evidence, and in address. Because of his admission on 11 December 1995 that he knew he had deliberately concealed the overpayment, he must have known that his denial was false. When giving evidence on 11 December 1995, he was untruthful." 31 A number of observations are appropriate. It is clear that the Tribunal concluded that the plaintiff had breached the trust which he owed Mrs Bach and had attempted at least in part to conceal that breach from her and others. He also gave untruthful evidence to the Tribunal. It was for these reasons that the Tribunal ordered that the plaintiff's name be removed from the Roll of legal practitioners. 32 However, although the Tribunal found that he committed these very serious transgressions the competence of his legal advice and other work which he did as a barrister for Mrs Bach was not criticised. The Tribunal said: s "The Tribunal is unable to find that his standard of competence and diligence falls short of the standard that a member of the public is entitled to expect of a reasonably competent legal practitioner. s No adverse finding has been made about his ability to competently conduct litigation as a barrister … " 33 The plaintiff had voluntarily ceased to practice in 1991. His name was ordered to be removed from the roll in December 1995. His application to be readmitted was refused by the Admission Board in 2001. The appeal against that decision was heard and determined in October 2002. Cooper AJ firstly considered what he referred to as "the defects in character that led to the plaintiff's disbarment in December 1995." He then addressed the question of whether the plaintiff had redeemed his early errors or whether he had a permanent deficit of character. As to the latter matter his Honour said: "It is now necessary to come to the answer to the second question which I posed earlier, namely, has the plaintiff satisfied the court that those defects no longer exist and that he is otherwise an upright, honourable and trustworthy person, or, to put it another way, has the plaintiff satisfied the court that he has redeemed his earlier errors and that they did not reflect any permanent defect of character. The errors, which led to the plaintiff's disbarment arose out of a somewhat unique set of circumstances. He embarked upon seeking to aid a woman who was then having difficulties with her husband. He thus placed himself in a volatile domestic situation. The advice he gave and the work he did for Mrs Bach was quite reasonable and proper. She, however, appears to have become reconciled with her husband and under his influence turned against the plaintiff making a number of serious allegations, which were considered and dismissed by the Tribunal. It is in this context that the plaintiff committed the acts of misconduct as found by the Tribunal. In the light of all of the evidence, the plaintiff has comfortably satisfied the Court that over the past almost seven years he has lived an exemplary life. He has demonstrated integrity, honesty and probity. He has comfortably satisfied the Court that those early errors did not reflect any permanent defect in character. Accordingly the Court is comfortably satisfied that this question should be answered in the affirmative. It follows that the appeal should be allowed." 34 Cooper AJ published his judgment on 18 October 2002. The article of which the plaintiff complains was published on November 2 only 15 days later. Whether or not the plaintiff is entitled to succeed I have no difficulty in accepting that he was greatly hurt by the article. Having only days earlier been restored to the roll of legal practitioners with a finding by a judge of this Court that over the last seven years he had lived an exemplary life and demonstrated integrity, probity and honesty the article must have been devastating to him. I accept the plaintiff's complaint that the article belittled him and was calculated to wound. If as the defendant's counsel submitted it was an attempt at humour or amusement it was entirely at the plaintiff's expense.

Was the imputation complained of true? 35 The pleaded imputation was that the plaintiff was "struck off for some shoddy financial-legal advice to a Mrs Bach." If this imputation was a matter of substantial truth (s 7(2)) and related to a matter of public interest, the defendant must succeed in its defence pursuant to s 15 of the Defamation Act 1974 (NSW). The plaintiff conceded that it was a matter of public interest. To my mind the pleaded imputation would have conveyed to the ordinary reasonable reader the understanding that the plaintiff was struck off because he gave poor or inadequate legal advice to Mrs Bach relating to financial matters. At the heart of the imputation is an alleged failure by the plaintiff to give advice to the standard required of a legal practitioner. That failure is of such magnitude as to deserve the plaintiff being barred from practice. 36 To my mind the meaning conveyed to the ordinary reasonable reader is quite different from the true position. I have already set out in detail the findings of the Tribunal. Rather than finding any failing in the quality of the advice given by the plaintiff the Tribunal recorded the fact that there was no complaint about the competence of the barrister's professional work in earning some of the disputed fees. As I have already indicated elsewhere the Tribunal said that it was "unable to find that [the plaintiff's] standard of competence and diligence [fell] short of the standard that a member of the public is entitled to expect of a reasonably competent legal practitioner." 37 The true situation was that the plaintiff was removed from the roll for what Cooper AJ later described as "acts of misconduct." Those acts related to his efforts to assist Mrs Bach in the subdivision of her property in respect of which he had accepted obligations as the project manager. His identified failings commenced with his failure to distinguish between his professional role as a barrister and his personal interests. He contracted with Mrs Bach without her being properly advised. He did not keep proper trust account records and did not give proper consideration to the question of monies to which he was entitled. However, the Tribunal did not find that these failings "illustrate[d] the degree of want of probity which would necessarily demonstrate an unfitness to practice" and thus warrant his removal from the roll. 38 The conduct which led to him being struck off was his withdrawal of monies from the trust account when he knew he had no authority to do so, his deliberate concealment from Mrs Bach of an overpayment, his failure to properly account and his failure to tell the Tribunal the truth. Shoddy means of "inadequate or poor standard." Neither individually nor collectively could the matters for which the plaintiff was criticised be described as the giving of "shoddy financial-legal advice." 39 Accordingly, the defendant has failed to prove that the imputation was in substance true or not materially different from the truth.

The contextual imputations 40 The first contextual imputation pleaded was: "The plaintiff was a bankrupt barrister who had so conducted himself as to warrant being struck off the roll of legal practitioners." 41 Section 16 of the Defamation Act 1974 (NSW) is in the following terms: "(1) Where an imputation complained of is made by the publication of any report, article, letter, note, picture, oral utterance or other thing and another imputation is made by the same publication, the latter imputation is, for the purposes of this section, contextual to the imputation complained of.

(2) It is a defence to any imputation complained of that: (a) the imputation relates to a matter of public interest or is published under qualified privilege,

(b) one or more imputations contextual to the imputation complained of: (i) relate to a matter of public interest or are published under qualified privilege, and (ii) are matters of substantial truth, and

(c) by reason that those contextual imputations are matters of substantial truth, the imputation complained of does not further injure the reputation of the plaintiff." 42 Before the section can be relied upon by a defendant the court must find that the contextual imputation is conveyed "to the ordinary reasonable reader at the same time as and in addition to the plaintiff's imputation." They must also "differ in substance one from the other." Allen v John Fairfax (NSWSC, unreported, 2 December 1988, Hunt J at 12 - cited with approval by Spigelman CJ in John Fairfax Publications Pty Ltd & Anor v Jones (2004) NSWCA 205 at [12]). 43 In Jones the problems considered by the Court of Appeal arose from the fact that the two imputations were the same, although the plaintiff's imputation was restricted to particular conduct. The contextual imputation however, was that Jones had the general character of a dishonest broadcaster. The majority of the court held that when only one factual matter was said to constitute the basis of the imputation, an imputation that the person was of that character "without express reference to that factual matter is not capable of being conveyed" in addition to "an imputation which makes such reference. It is merely an alternative way of formulating the same imputation" (at [17]). 44 Accordingly, the question is whether the imputation pleaded by the defendant as a contextual imputation is "another imputation" within the meaning of s 16. 45 In the present case the imputation which the plaintiff pleads is that the plaintiff was "struck off for some shoddy financial-legal advice to a Mrs Bach." The first contextual imputation pleaded, leaving aside the bankruptcy which is of no moment, was that the plaintiff had so conducted himself as to warrant being struck off. Unless the published article conveys a basis for the plaintiff being struck off beyond the giving of the shoddy financial-legal advice the pleaded contextual imputation will not be another imputation for the purpose of s 16. 46 The defendant submitted that the article, when properly understood, did identify the plaintiff as having been struck off for reasons beyond the quality of the legal advice he gave Mrs Bach. The submission was founded upon the extract from Cooper AJ's judgment reproduced in the article where his Honour stated that the plaintiff had lived an "exemplary life", demonstrated "integrity, honesty and probity" and "has comfortably satisfied the court that those early errors did not reflect any permanent defect in character." The essence of the submission was that it could be inferred from this passage that although "shoddy financial legal advice" had been referred to nevertheless the ordinary reasonable reader would have understood that the plaintiff was struck off for conduct which revealed a lack of probity. If that imputation was not found in the plaintiff's pleaded imputation it could nevertheless be relied upon by the defendant. 47 If it is to be understood in the sense asserted by the defendant I do not accept that the contextual imputation is conveyed. The giving of "shoddy" advice is not conduct suggestive of a lack of probity. The ordinary reasonable reader would understand the later reference in the article to material from Cooper AJ's judgment as being matters considered by the Tribunal before the plaintiff could be readmitted not as reasons for him being struck off. 48 The conclusion I have reached in relation to contextual imputation (i) is the same for contextual imputations (ii), (iii) and (iv). They are not substantially different from the pleaded imputation. 49 Contextual imputation (v) maybe similar, although, perhaps, not identical to the pleaded imputation. However, for the reasons which I gave in relation to the pleaded imputation it was not true. 50 Contextual imputation (vi) differs from the pleaded imputation. However, to my mind the imputation is not made by the article. The article speaks of "advice" which is a concept of quite a different character to "dealings" with Mrs Bach. 51 Accordingly, in my opinion the statutory defence under s 16 is not made out.

Publication outside New South Wales 52 The Sydney Morning Herald has a modest circulation in States outside New South Wales and the plaintiff sues in respect of the publication in those States. In response the defendant formally submitted that the defence known as the "Polly Peck defence" is available (Polly Peck v Trelford [1986] QB 1000). However, in John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227 at [41]-[42] the Court of Appeal declined to follow Polly Peck saying that it was not part of the common law of any State. I must follow that decision. 53 However, the defendant submitted that was not an end of the matter. It was submitted that three decisions in other states permit the defendant to rely on a modified "Polly Peck defence" and plead imputations that are not more serious and not substantially different, but nuances of the plaintiff's imputation: David Syme & Co Ltd v Hore-Lacey (2000) 1 VR 667; Nationwide News Pty Ltd v Moodie (2003) 28 WAR 314; Advertiser News-Weekend Publishing Co Ltd v Manock (2005) 91 SASR 206. The situation was also comprehensively considered by Nicholas J in Ron Woodham v John Fairfax Publications Pty Ltd [2005] NSWSC 1204 at [19]-[24]. 54 Relying upon these decisions the defendant asserted that its first contextual imputation should be regarded as both a distillation of the common sting of the matter complained of and as a nuance or variation of the plaintiff's imputation. It was submitted that the "imputation does not involve a substantially different meaning from the plaintiff's imputation and is a mere nuance of it." The same submission was made with respect to the other contextual imputations. 55 It is unnecessary for me to discuss the various decisions, which turn upon the significance of the rules of pleading in a libel case and their contribution to a fair trial. As I understand the matter, the rejection of a "Polly Peck" defence in this State would extend to the suggested modified "Polly Peck" defence as a nuance of the plaintiff's imputation. In any event to my mind the meanings for which the defendant contends, as a nuance of the plaintiff's imputations, do not arise. Accordingly, a Polly Peck defence, or a modification of it, even if it was available, must fail in relation to each of the pleaded contextual imputations. 56 In relation to contextual imputation (vi) for the reasons I gave in relation to s 16 the imputation is not substantially similar to, or a mere nuance of, the plaintiff's imputation. In any event the imputation does not arise.

Injurious falsehood 57 To succeed in this claim the plaintiff must prove that false statements were maliciously published about him and that they caused actual pecuniary loss. The statements relied upon as false are, in substance: (i) the plaintiff was struck off for some shoddy financial-legal advice to Mrs Bach; (ii) the Bar Association bankrupted the plaintiff because he could not pay the Association's costs; (iii) the plaintiff's return to the Bar was a turn up for the books; (iv) the plaintiff was called 'Maurie the Marvellous' and was a struck-off, erstwhile, bankrupt barrister;

(v) the plaintiff's return to the Bar was a marvel;

(vi) the right client for the plaintiff was Jodee Rich; (vii) the plaintiff had been working as a barman and cleaner at the Portland RSL Club; (viii) the plaintiff did not have much experience as a barrister in the first place; (ix) the plaintiff threw in his job as a builder of prefabricated homes to take his place at the Bar; and

(x) the plaintiff lost his appeal against being struck off. 58 In relation to (i) I have already found that it was not true. The defendant accepts that (ii) was false. Otherwise the defendant says the various statements were true. I accept the defendant's position in part in relation to (iv). However, to my mind the other matters were false. 59 In relation to (iii) and (v) similar considerations lead to my conclusion. Far from being a "turn up for the books" or a "marvel" the plaintiff's restoration to the Roll was entirely predictable. A perusal of Cooper AJ's reasons makes plain both the circumstances of his original removal from the Roll and the justification for his readmission. A balanced consideration of these matters would lead inevitably to the conclusion reached by his Honour. In effect the statements made in the article are critical of the court's decision. In reality they reveal a complete lack of understanding of the principles relevant to the removal and reinstatement of a person to the Roll. 60 In relation to (vii) the correct position was that the plaintiff was the President of the RSL Club and had, because of the club's parlous financial circumstances, offered his help in the bar and cleaning the premises. It is true that the plaintiff had been doing the work of a barman and cleaner but he was not employed by the club to do this work. The article suggests that he was employed "working as barman and cleaner" and that statement is false. 61 I am also satisfied that (viii) is false. The clear imputation is that the plaintiff had practiced for only a very short time and was very inexperienced when he was struck off. This was not the case. He had actively practiced for at least four years and had been admitted for eight years before his name was removed from the Roll. 62 The statement numbered (ix) raises greater difficulty. It is true that the plaintiff had worked as a builder of prefabricated homes before studying law and going to the bar. However, he had ceased work as a builder in 1979 and was not admitted to the Bar until 1987. The statement that he threw in his job and the reference to his age convey an understanding that ending his job and going to the bar were contemporaneous. They were not and accordingly the statement was false. 63 Statement (x) was not true. Whatever his prospects of success the plaintiff withdrew his appeal. The statement that he lost his appeal suggests that his appeal was rejected following a hearing before a court. This statement was false.

Malice 64 Senior counsel for the defendant sought to persuade me that the article was an attempt at humour motivated only by the objective of entertaining the reader. I regret that I cannot accept the submission. Perhaps when a person is a public figure misguided attempts at humour can be accepted as innocent, if incompetent writing. But when an individual, neither seeks publicity, nor, has a role in the community which necessarily exposes them to it, a publisher who chooses to publish about such a person carries significant responsibilities. If the publication of the falsehood was malicious that may be reflected in the award of damages. 65 The defendant did not call evidence. However, it is apparent from the terms of the article complained of that the journalist had a copy of the judgment of Cooper AJ. The journalist quotes from it. Accordingly, the journalist either knew or recklessly chose not to inform herself that a number of statements made in the article were false. Whether she had a copy of the Tribunal's decision is unclear. 66 In his judgment Cooper AJ explains some of the findings of the Tribunal, including the fact that the plaintiff did not intend to permanently deprive Mrs Bach of unauthorised payments from the "trust account." Cooper AJ also made clear that the Tribunal had not ordered the plaintiff's removal from the Roll because of the quality of the legal advice he gave as a barrister. His Honour also referred to the fact that the plaintiff had not paid the Bar Association's costs. However, rather than the Association bankrupting him his Honour recorded that he was at the time a bankrupt and unable to pay them. Cooper AJ also discussed the plaintiff's position with the Portland RSL Club, and makes plain that his services as a barman and cleaner had been volunteered. 67 In Roberts v Bass (2002) 212 CLR 1 the High Court identified the elements necessary to prove malice in a case of qualified privilege. The concept is the same in relation to the tort of injurious falsehood. If when published a defendant knew that a statement was untrue "it is almost invariably conclusive evidence of malice" and "[t]hat is because a defendant who knowingly publishes false and defamatory material almost certainly has some improper motive for doing so, despite the inability of the plaintiff to identify the motive" (at [77]). Recklessness may also justify a finding of malice and may also do so in combination with other factors (at [76], [84]). 68 In the present case I am satisfied that the journalist either knew the true situation or recklessly failed to read Cooper AJ's judgment to inform herself of it. To my mind the article was calculated to injure the plaintiff. Having worked for years to re-establish his probity and trustworthiness so that he could be readmitted to the Bar, within days the Sauce article is published about him. If the motivation was to entertain this was attempted by cruel ridicule of the plaintiff through a number of statements which the journalist must have known to be untrue. 69 I am satisfied that the plaintiff has established malice.

Damages for injurious falsehood 70 A plaintiff who sues for injurious falsehood must prove actual pecuniary loss as the "direct and natural result": of the false publication: Hall - Gibbs Mercantile Agency Limited v Dun (1910) 12 CLR 84 at 95-96; Palmer Bruyn and Parker Pty Limited v Parsons (2001) 208 CLR 388. 71 Although the plaintiff fears that his lack of significant work since resuming at the Bar is due to the publication of the article he cannot quantify any loss. A person in the plaintiff's circumstances would always have difficulty demonstrating that however damaging the article may have been to his reputation this has in fact caused him to lose remunerative work. 72 The plaintiff also says that since the publication of the article he has had trouble sleeping and has suffered headaches, bowel and stomach problems. However, there is no evidence that these problems are related to the publication of the article or that the amount claimed of $38 for medication is reasonably related to the article. 73 The final claim pressed was a sum of $504 being half the cost of travelling from Portland to Sydney to obtain legal advice as the plaintiff put it "to find out what my legal rights were." The amount of $504 is fifty percent of an alleged total expenditure of $1,008. Only half the total sum is claimed for, because the plaintiff accepts that a proportion of the advice was given in relation to his defamation claim as opposed to his claim for injurious falsehood. 74 The plaintiff produced no documentary material to support this claim. Nor was there evidence as to whether the trips which he said were made to Sydney were exclusively related to the obtaining of legal advice. Furthermore, I am not satisfied that the cost of obtaining legal advice as to whether a plaintiff can successfully pursue a cause of action could constitute special damages for the purpose of the claim about which the legal advice is sought. The pecuniary loss which must be proved is that which is a direct and natural result of the false publication. The claim the plaintiff asserts is otherwise. The costs claimed, if incurred, were as a result of his decision to seek legal advice and did not flow directly from the publication.

Damages 75 The plaintiff tendered evidence which established his reputation in the general community. Over many years he has contributed in a voluntary capacity to many organisations, particularly in the Jewish community. His contributions to the club in Portland bears testament to the standing which he formerly enjoyed in that community. Evidence was also tendered which satisfied me that during his period of practice at the Bar he enjoyed a reputation which saw him supported by solicitors. He attracted work which was of media interest and he was on occasions mentioned in the newspapers as appearing for various litigants. 76 The plaintiff gave evidence that he was extremely hurt by the publication. He said that he was first told of the article by a solicitor, Esther Cossman, who telephoned and told him about it. He reported feeling ill, belittled and denigrated. He was also told by a friend, Susan Michaels, that the article was "designed to denigrate and humiliate". 77 He gave evidence that there was an unpleasant incident in the Portland RSL Club when a member, Wayne Handley, who had read the article approached him and said: "How come that you can be the licensee of this club and you have a criminal record." He also said: "I read about it in Sauce magazine … it says that you were struck off for shoddy financial legal advice and also you were convicted or charged with fraud." The plaintiff said this man also said: "I know they let you back in but you were a criminal at the time you made your application to be the licensee." The plaintiff said that when this exchange occurred his reaction was one of shock, especially because what the member said was untrue and there were a number of people present, who were laughing and thought that it was funny that the plaintiff was being mocked. The plaintiff said that after this incident, whenever he walked into the club, "people used to stare at me and look at me and I just felt very uncomfortable and they used to smile or laugh or mock me." 78 The plaintiff added that after Mr Handley had spoken to him, the plaintiff went up to the Vice-President of the club, John Gardiner, to ask whether he had heard Mr Handley's remarks. Mr Gardiner said that he had heard them and both he and Mr Handley had discussed them earlier. According to the plaintiff, the Vice-President said that when he had first read the article, he was so concerned that he sought advice from the club's solicitors as to whether and how the publication would affect the club. The plaintiff said he was very upset that the Vice-President took such steps without first discussing the matter with him. 79 The plaintiff gave evidence of another incident which apparently occurred at the Australia Day celebrations in Portland in January 2003. It was reported to him that a woman, standing in one of the closed streets of Portland, was reading aloud from the Sauce article about him. The plaintiff said he was extremely embarrassed when he was told of this incident and upset that people in the town were laughing about the article. 80 The plaintiff also gave evidence of an unpleasant exchange with his neighbour in Portland, Valerie Hurley, who told him that she had read the article "that said that you were struck off for shoddy financial legal advice." She also said that the article had been "handed around Portland". His neighbour said she was shocked when she read this, for she had always thought the plaintiff was a good neighbour. The plaintiff said that he had wanted to explain to her his position and that the article was not completely true. However, his neighbour would not stay to discuss the matter and said "well look my husband Keith said to me that I should not be talking to you about this" and she walked away. Even on this occasion, the plaintiff said: "I was extremely hurt and I felt quite - quite sick in the stomach again because number one to know that this article had been circulated around Portland and it was just terrible for me…" 81 The plaintiff said that there were about ten other people who spoke to him about the article in terms similar to the people already mentioned. The plaintiff said that he was extremely upset by these exchanges. 82 Since the publication of the impugned article, the plaintiff said that there has been a change in the attitude of his friends, neighbours and associates toward him who, although polite, have all become more distant and cold. The plaintiff said that not only have invitations to social gatherings diminished but also he has a very limited social life, as he does not "want to be socialising with people who will snigger behind my back or poke fun at me" and treat him as a "persona non grata". The contraction in his social life has "dramatically" affected his home life. 83 Although the plaintiff accepted that he had been struck off because he did not satisfy the requisite standards of professional conduct, he was hurt by the allegation that he had "given shoddy financial legal advice." He accepted he had been struck off but emphasised that he had been able to rehabilitate himself and satisfy the court that he should be readmitted. Having so recently received the decision of Cooper AJ restoring him to the Roll he said: "Well, to start with, I believed that I had paid the price for my wrong that I had done previously. I had earned the right to redeem myself and I'd worked hard in doing that, but what this said, that I was struck off for shoddy financial legal advice. There's no amount of redemption that could change what that said. It virtually said that people could not trust my legal commercial advice or legal commercial advice as a barrister. That's something I cannot change no matter how hard." 84 The imputation, as the plaintiff saw it, was not only an attack on his competence as a lawyer and the quality of his financial-legal advice, but was couched in snide comments designed to disparage him. He said that such an imputation had a "long term effect" on his prospects of getting work and had marred the hard work he had already done to make amends. The plaintiff highlighted the gravity of the defendant's attack on his reputation in the following terms: "The Supreme Court took into consideration my conduct before, before they agreed that I was a fit and proper person to be readmitted to the bar. They were my judges of me as a person at that time. What The Herald did was to ensure that irrespective of what the Supreme Court found, they would make sure by that article that nobody would brief me." 85 The plaintiff gave evidence that he had been worried and concerned about this litigation. On learning that the defendant had pleaded truth to the imputation that he had been struck off for giving shoddy financial legal advice, the plaintiff said he was extremely upset because the imputation was false. No apology has been made by the publisher or the journalist, which has further upset the plaintiff. 86 I accept the plaintiff's evidence. 87 The principles relevant to an award of damages are well known. I considered them in Jarratt v John Fairfax Publication Pty Ltd [2001] NSWSC 739 at [104]-[127]. Section 46 of the Defamation Act 1974 (NSW) limits the recovery of damages for defamation to damages for harm suffered by the person defamed. Exemplary damages are not recoverable. The assessment of damages for defamation must not be affected by malice or other state of mind of the publisher at the time of publication except so far as that malice or other state of mind affects the harm suffered by the person defamed. 88 Under s 46A of the Act, the Court is to ensure that there is an appropriate and rational relationship between the harm suffered by the person defamed and the amount of damages awarded. In particular, when determining the amount of damages for non-economic loss, the Court is to take into account the general range of damages for non-economic loss in personal injury awards in this State. 89 The primary purpose of the law in providing a cause of action for defamation is to provide an opportunity for an individual to counter the injury done to the plaintiff in his or her reputation (Carson v John Fairfax & Sons Limited (1993) 178 CLR 44 at 69 per Brennan J). Damages, and the size of the award, are the only means which are ordinarily available to attract attention to the vindication of the plaintiff's reputation (Carson at 70 per Brennan J). 90 In Carson, Mason CJ, Deane, Dawson and Gaudron JJ said at 60-61: "Specific economic loss and exemplary or punitive damages aside, there are three purposes to be served by damages awarded for defamation. The three purposes no doubt overlap considerably in reality and ensure that 'the amount of a verdict is the product of a mixture of inextricable considerations'. The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication , reparation for the harm done to the appellant's personal and (if relevant) business reputation and vindication of the appellant's reputation . The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant. Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant's reputation. 'The gravity of the libel, the social standing of the parties and the availability of alternative remedies' are all relevant to assessing the quantum of damages necessary to vindicate the appellant". (emphases added) 91 The potential vindication of the plaintiff's reputation in the future, in case the defamatory publication "emerges from its lurking place at some future date" or there is "any lingering cloud left hanging over the plaintiff's reputation" (Carson at 70, 77 per Brennan J) is of relevance. The plaintiff may need to rely on the award of damages "sufficient to convince a bystander of the baselessness of the charge" (Carson at 70 per Brennan J). 92 Having regard to these principles I am satisfied that the harm done to the plaintiff by the publication justifies a substantial award of damages. There can be no doubt that the plaintiff was significantly hurt by the publication and suffered a very significant reduction in his standing amongst friends and acquaintances and has been ostracised by people and groups with which he was previously associated. Whether his professional standing can ever be repaired is difficult to determine. "Professional disadvantages which do not cause actual pecuniary loss" are recoverable: (see Crampton v Nugawela (1996) 41 NSWLR 176 at 199B; see also Mahoney JA at 193B). Given the wide circulation of the Sydney Morning Herald, which once assumed the role as a "paper of record", it may be accepted that the article would be likely to have been read by many lawyers, including solicitors. Whether they would entrust their clients to a barrister said to have been struck off for giving "shoddy financial/legal advice" may be doubted. It may also prove difficult for the plaintiff to re-establish himself in other community activities and organisations. 93 Determining an appropriate award for damages for defamation is not an easy task. There cannot be only one correct figure. However, in my opinion the appropriate award in the present case is the sum of $90,000. 94 I shall defer entering judgment to allow argument with respect to matters of interest and costs. **********

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