KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Headnote [This headnote is not to be read as part of the judgment] Mr Matthew Bowden, the respondent, was employed in a childcare centre operated by the appellants, KSMC Holdings Pty Ltd trading as Hubba Bubba Childcare on Haig, and Ms Karen Chapman. Mr Bowden's employment with the appellants commenced in mid-2015, and ceased in early 2016. On 4 April 2016, Ms Chapman sent two identical emails on behalf of KSMC to 35 parents whose children attended the childcare centre. The emails contained the heading "Staff Updates", and addressed the arrival and departure of various staff members, including Mr Bowden. The emails relevantly said that "while good with the children in general, Matt was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well with his future". Mr Bowden commenced proceedings for defamation in the District Court in relation to that email. On 4 April 2019, Levy SC DCJ found in favour of Mr Bowden and awarded him $237,970.22 in damages, including an award of aggravated damages. KSMC and Ms Chapman appealed, arguing that the primary judge erred in finding that the defence of qualified privilege at common law was not made out, and that in any event, the damages awarded were manifestly excessive. The parties agreed that if the Court was satisfied that the primary judge had erred, it would be appropriate for it to consider for itself the issue of whether malice the defence of qualified privilege was made out, rather than remit the matter to the District Court. The issues in the appeal were, accordingly: 1. Whether the primary judge erred in failing to find the defence of common law qualified privilege was made out. 2. Whether the primary judge incorrectly assessed the quantum of damages. Issue 1: The Court (Payne JA, Basten and White JJA agreeing) held, allowing the appeal:

1. The primary judge erred in considering the existence of the privileged occasion. His Honour's finding that the email contained "irrelevant inclusions" was a finding about the relevance of the communication to the privileged occasion. The finding that parts of the email were "gratuitous" and travel beyond any "legitimate purpose" introduced the subjective purpose of the appellants, relevant only to malice, and the relevance of the communication to that privileged occasion, which is an objective question. 2.The primary judge should have found that parents had a critical interest in the information about the identity of staff working at the Hubba Bubba Centre, including information about the identity of staff no longer working at the centre, and the qualifications and suitability of those staff members: [1], [44]-[47], [153]
2. No narrow view should be taken of the pursuit of duty or interest in what was said on an occasion of privilege. What must be considered is whether the defamatory statements were sufficiently connected to the privileged occasion to attract the defence.
3. The information conveyed by the matter complained of was sufficiently connected to the occasion of privilege. It was relevant for parents of children at the Hubba Bubba Centre to know the reasons why an employee who had until recently cared for their child was no longer working at the centre. It was relevant, if only to exclude natural speculation if the reasons were left unstated, where the care of young children was involved: [50]-[52], [57]-[58], [153] Cush v Dillon (2011) 243 CLR 298; [2011] HCA 30; Adam v Ward [1917] AC 309; Toogood v Spyring (1834) 1 Cr M & R 181 at 193; 149 ER 1044 considered.
4. The respondent was obliged to establish a predominantly improper motive in publishing the matter complained of and overcome the presumption that the publisher acted honestly, that is, with a proper purpose. This was a heavy onus. The primary judge proceeded incorrectly on the basis that conclusive evidence of malice is provided "if the defendants did not honestly believe in the truth of the defamatory matter, or if the defendants were recklessly indifferent to its truth or falsity". The finding that the statements made in the emails were "so reckless that they were made with wilful blindness to the truth" cannot be sustained.
5. On re-hearing under s75A of the Supreme Court Act, none of the particulars of malice were established by the respondent: [1], [17], [59]-[61], [65]-[68], [73]-[75], [121], [153] Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57; Fraser v Holmes [2009] NSWCA 36; Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 applied.
6. The defence of qualified privilege was made out: [1], [140], [153] Issue 2: The Court (Payne JA, Basten and White JJA agreeing) held, on a contingent basis, allowing the appeal:
7. There remains an issue in this State about the fundamental approach to damages in defamation cases: [1], [143], [153] Murray v Raynor [2019] NSWCA 274; Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674; [2018] VSCA 154 considered.
8. Section 34 of the Defamation Act 2005 (NSW) provides that the Court, in awarding damages for defamation, must ensure "that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded". The award of damages here was manifestly excessive. An award of $40,000 would have been appropriate. There was no occasion for an award of aggravated damages: [1], [144]-[151], [153] Association of Quality Child Care Centres of NSW v Manefield [2012] NSWCA 123; Korean Times v Un Dok Pak [2011] NSWCA 365; Triggell v Pheeney (1951) 82 CLR 497; [1951] HCA 23; Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118; [1966] HCA 40; Clark v Ainsworth (1996) 40 NSWLR 463; Randwick Labor Club v Amalgamated Television Services [2000] NSWSC 906; Polias v Ryall [2014] NSWSC 1692; Cantwell v Sinclair [2011] NSWSC 1244 applied.

Judgment

1. BASTEN JA: For the reasons given by Payne JA, the judgment in defamation awarding damages to the respondent must be set aside. The defence of qualified privilege under the general law, which is not excluded by s 30 of the Defamation Act 2005 (NSW), should have been upheld. Accordingly there must be a judgment for the appellants, dismissing the respondent's claim. I add the following observations.

Trial procedure - witness statements

1. The respondent worked at a childcare centre operated by the first appellant. He left his employment on 24 March 2016. On 4 April 2016 the centre included in its monthly newsletter to parents with children attending the centre the following statement: "Matt - is unfortunately no longer with us due to disciplinary reasons. Whilst being good with the children in general, Matt was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well with his future."
2. This brief statement led to proceedings in defamation in the District Court, as a result of which the respondent was awarded some $238,000 in damages. Even if the respondent were entitled to an award of damages, the appellants challenged the amount in fact awarded as manifestly excessive. As Payne JA holds, this amount was excessive; I agree with his contingent assessment of a modest sum. Yet the trial in the District Court ran for 11 days, an unjustifiable period given the nature of the claim and the amount at stake. The costs of each party must have exceeded the reasonable expectation of damages in the event of success. The case was heard by a judge sitting without a jury, which makes the time taken and the resources expended even more remarkable.
3. The judge commented at several stages during the trial on the lack of efficiency of the proceeding. In particular, in a brief interlocutory judgment on 14 May 2018 he stated: "It is a pity that this case did not seem, in the view of the parties, and with s 56 of the Civil Procedure Act 2005 in mind, to merit the preparation of statements for the evidence in chief of witnesses to be given in written form."
4. There appears to have been much force in this statement, although there is a question as to why the Court did not direct the preparation of witness statements. The lack of statements is a practice in defamation lists both in the Supreme Court and, as it now appears, in the District Court in which many of the cases are heard. Witness statements are apparently seen as an unnecessary procedure in defamation cases; that view may have some merit with respect to cases involving juries, but even in those cases the lack of statements probably leads to inefficiencies. The prosecution case in a criminal trial is invariably provided in written form before the trial commences. The same could be required in defamation, as in most other civil cases. Unlike a criminal trial, there is no purpose in not requiring the same discipline of defendants. The general practice should be reconsidered.

Pleading of particulars

1. There was a second procedural factor in this trial which led to unnecessary confusion. The trial judge identified and addressed on its merits a defence of "actual or apparent interest". [1] He noted that the defendants sought to maintain "a defence of actual or apparent interest that … justified the publication of the matter of which the plaintiff complained." [2]
2. There is no such defence, whether by way of justification or otherwise, to a defamatory publication. The misunderstanding appears to have arisen from the form of the pleading in the defence. The defences pleaded were as follows: par 5 - substantial truth with respect to imputations (a), (c), (d) and (e); par 6 - qualified privilege at common law and pursuant to s 30 of the Defamation Act, with respect to the same imputations; par 7 - triviality with respect to the same imputations; par 8 - substantial truth, qualified privilege (at common law and pursuant to s 30 of the Act) and triviality, with respect to imputation (b). [3]
3. The particulars in respect of qualified privilege were identified in par 6 under the following headings: B. Matters of actual or apparent interest - UCPR r 15.21(1)(a) C. Qualified privilege - common law - UCPR r 15.21(1)(b) D. Qualified privilege pursuant to s 30 of the Defamation Act.
4. The particulars of the claims of qualified privilege with respect to par (b) appeared under the heading "G Matters of actual or apparent interest", which repeated by reference pars B(iii)-B(vi): there was no reference to the particulars in "C" and "D".
5. Properly understood, the pleading identified matters of "actual or apparent interest" as particulars of the pleading of qualified privilege. However, the confusion resulted, at least in part, from the provisions in Pt 15, Div 4 of the Uniform Civil Procedure Rules 2005 (NSW) dealing with defamation cases. The rules are detailed, complex and repetitive. Thus, the required particulars with respect to qualified privilege are found in r 15.21(1)(b) and in r 15.27. The specific rules state, "[w]ithout limiting rule 15.21, the particulars required by rule 15.1 … must include …".
6. Rule 15.1 requires that a party plead "such particulars of any claim, defence or other matter … as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet." Why that is not sufficient is obscure; the accretion of specific and detailed rules is apt to create prolixity and confusion, as appears to have happened in the present case.

Delay in completing trial

1. The third matter warranting comment is the time taken for the proceedings. Apart from noting that the evidence continued over 10 days, the key point is that the evidence was completed on 21 May 2018. Dates were then fixed for written submissions to be filed by 4 June, 18 June and a possible reply by 21 June. However, for reasons which are not explained, the parties did not return to make oral submissions until Friday, 7 December 2018. As a result of that extended timetable, judgment was not delivered until 4 April 2019.
2. Where a case turns upon the credibility of witnesses giving oral evidence, a delay of almost 11 months between the time the evidence was given and the date of judgment is unsatisfactory. The undoubted advantage of a trial judge in assessing such matters will diminish over such a lengthy period. Indeed, the benefit of oral submissions will be greatly reduced by that lapse of time. It may readily be assumed that the lapse of time resulted from the busy schedules of counsel, the Court, or both. That would explain, but would also tend to exacerbate, the problem resulting from the extended period of the trial. Memories of a particular witness giving evidence will fade as other trials create new impressions.
3. The trial judge quite appropriately warned himself against placing weight on impressions created by witnesses; nevertheless, his acceptance of the plaintiff and rejection of the principal witness for the defendant appear to have been based on such assessments. While it is true that immediate impressions can be recorded, and recollections can be refreshed by reading a transcript, if that occurs it should be explained in the reasons for judgment.

Administration of justice

1. Each of the matters set out above has had an adverse effect on the just, quick and cheap administration of justice in the District Court. [4] However, on a broader view, the proceedings have been counter-productive, having regard to their proper purposes. The respondent was a young man starting upon a career. A newsletter sent to 35 parents of children who were cared for by the appellants contained a brief reference to the termination of his employment and the reasons for taking that step. If money was his motive in bringing the proceedings, he has failed entirely and is now subject to a heavy obligation to meet the costs of the defendants. However, a careful assessment of the likely award of damages if successful, together with an appreciation of the risk of failure, might cast doubt on his judgment in bringing the proceedings for that purpose.
2. If his primary purpose was to defend his reputation, one immediate effect of the proceedings was to ensure that the comments in the newsletter became available for public consumption. Furthermore, he had to resist the defence that the adverse imputations were true and also, to prove that they were made maliciously. The fact that he succeeded at trial on both relevant defences must tend to sully the reputations of the defendants. Their success on appeal will only partly remedy that stain. Sullying one person's reputation to protect another's is a high cost. The situation is more troubling where the adverse effect on the defendants appears to have been unwarranted.
3. In the present case, as explained by Payne JA, the findings of malice were not supported by the evidence. Indeed, the rejection of the defence that the statements in the newsletter were substantially true, though not challenged on appeal, is difficult to understand. Despite the trial judge properly warning himself against finding that a witness was lying on the basis of demeanour in the witness box, consideration of the contemporaneous documentation, together with a reading of the transcript of the oral evidence, provide no firm basis for the adverse findings regarding the second defendant, Ms Chapman.
4. PAYNE JA: On Monday 4 April 2016, at 9.21am and again at 9.22am the second appellant, Ms Chapman, sent two identical emails on behalf of the first appellant, KSMC Holdings Pty Limited, trading as Hubba Bubba Childcare on Haig (the "Hubba Bubba Centre") to 35 parents whose children attended the Hubba Bubba Centre. [5] The subject of the email was staffing and included a reference to the respondent, Mr Bowden.
5. The respondent had worked at the Hubba Bubba Centre, in Chatswood, since July 2015. The matter complained of in those emails appeared under the heading of "Staff Updates", which addressed the arrival and departure of various staff members and provided a brief commentary about each. About the respondent the email stated: "Matt - is unfortunately no longer with us due to disciplinary reasons. While being good with the children in general, Matt was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well with his future".
6. The respondent did not become aware of this email until some weeks later. The emails were sent to parents whose children attended the Hubba Bubba Centre. The statement of claim alleged the following imputations about the respondent: 1. he is dishonest; 2. he was not truthful with Hubba Bubba Childcare regarding his studies and some other issues; 3. he was fired for disciplinary reasons; 4. he conducted himself in such a manner that a childcare centre terminated his employment; 5. he is not a fit person to work in childcare.

Decision of the primary judge

1. The primary judge found that each of the pleaded imputations was conveyed by the email: Bowden v KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig [2019] NSWDC 98 at [208]. A number of defences were advanced at the trial: all were rejected. The only issue concerning liability remaining on the appeal was the defence of common law qualified privilege.
2. The primary judge proceeded at the trial by reference to a list of issues he prepared himself which he asked the parties to address: MFI 17. That list of issues contained two matters relevant to the defence of qualified privilege at common law: "actual or apparent interest" (issue 5) and the defence of common law qualified privilege (issue 6).
3. The primary judge addressed issue 5 as an independent or standalone defence and rejected it. It may be that his Honour understood that "actual or apparent interest" constituted a separate defence by reason of the defendant's pleading which identified "matters of actual or apparent interest" as particulars of the common law qualified privilege defence, as required by the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 15.21.
4. The primary judge's specific treatment of the defence of qualified privilege at common law appears at [265]-[283] of the judgment. It is likely, as the appellants submitted, that the primary judge found that there was an occasion of qualified privilege which protected the communication to parents by the appellants of the fact that the respondent was no longer employed by the Hubba Bubba Centre. The relevant findings were that: 1. "… the reciprocity of interest was in my assessment simply limited to the need to tell parents that the plaintiff was no longer employed at the centre. The parents had a relevant interest in being told of that fact.": at [259]; and 2. "… there may have been a legitimate interest in the defendants providing parents with children at their childcare centres with up to date business-related information as to the identity of staff working at their childcare centres, including the names of staff no longer working there": at [272(3)].
5. Although no specific test for the identification of the relevance of the defamatory matter to the privileged occasion was identified or apparently applied, the primary judge found that: 1. "Apart from the statement: 'We wish him well with his future', the remainder of the email was both gratuitous and irrelevant to that purpose [being that the respondent was no longer employed at the centre]": at [259]; 2. "the language used went well beyond [the purpose of business-related communications concerning the respondent] by adding gratuitous comments that impugned the [respondent's] character and reputation in an injurious way": at [261]; 3. "the interest of the recipients [did not extend] to having the matter complained of provided to them other than to simply inform them that the [respondent] was no longer employed by the defendants": at [287].
6. The primary judge thus rejected the defence of common law qualified privilege.
7. The primary judge went on to make a contingent finding that the respondent had established malice. This finding had three limbs, namely that the second appellant: 1. "had [not] sincerely believed the truth of those matters raised in the defence to the [respondent's] claim": at [276] and [279]; 2. had no reasonable grounds for believing that the respondent had been dishonest; and 3. included statements in the matter complained of which were "so reckless that they were made with wilful blindness to the truth": at [279].
8. The first finding referred to what his Honour had earlier described as "alleged valid disciplinary issues" and "claimed disciplinary issues". This is an apparent reference to his Honour's conclusions in the immediately preceding paragraphs: "[277] The defendants' pleaded defence that the plaintiff had lied to parents of children at the centre remained an unsupported assertion. None of the witnesses called in the defendants' case supported that proposition. The plaintiff submitted, correctly, that the defendants' pleaded claims in that regard had completely collapsed. That element of the defence was completely without substance. [278] I therefore do not accept the defendants' claims concerning the existence of alleged valid disciplinary issues. I accept the plaintiff's submission that those claimed disciplinary issues were so fundamentally unreasonable, that they cannot be reasonably believed to be true."
9. It is clear that the first finding was based on matters which in turn addressed the rejection of the appellants' defence of justification, namely that the appellants had not established that the respondent had "lied to parents of children at the centre". This was a reference to the appellants' contention, as part of their defence of justification, that the respondent had, on the afternoon of 24 March 2016, told parents that he had finished his Certificate III qualification when he had not. The reference in paragraph [278] to alleged disciplinary issues which "were so fundamentally unreasonable, that they cannot be reasonably believed to be true" was also a reference to findings made about the justification defence.
10. The finding that the second appellant made statements in the matter complained of which were so reckless that the email was published with wilful blindness to the truth, relied on the following matters, at [280]: "(a) Ms Chapman's concern that the centre had not complied with regulations concerning staffing ratios was not reasonable. It was not supported by evidence. That concern on her part was not referenced to any identifiable or applicable regulatory provision. It appears that she has overstated the regulatory requirements. Ms Chapman's decision to employ the plaintiff was an issue that was distinct from her regulatory obligations concerning a particular (but unparticularised) qualified staff-to-child ratio; (b) On the issue of notice, Ms Chapman had a concern about what the plaintiff might say to parents about his resignation, thus making it desirable for the defendants to discredit him; (c) Ms Chapman's attitude to the plaintiff's activity of walking a former childcare attendee to a public school at the request of parents was unreasonable, especially when those children were no longer attending the defendants' childcare centre, also where such activity was not reasonably contemplated by the defendants' so called babysitting policy or statement of preference on babysitting; (d) Ms Chapman delivered a disproportionately angry response to the plaintiff on those issues when they arose; and (e) Ms Chapman's telephone call to Mrs Tieu to seek to prevent the plaintiff from continuing to work for Mrs Tieu after he had left his employment at the childcare centre was spiteful, as is evident from Mrs Tieu's unchallenged account of the terms of Ms Chapman's remarks about the plaintiff, as cited at [168] above."
11. The primary judge did not explain how any of those factors separately or together established recklessness or wilful blindness.

Consideration - qualified privilege

1. In the defence filed on 7 July 2017 and the subsequent amended defence filed in court on 14 May 2018, the appellants pleaded a defence of qualified privilege at common law. In his amended reply filed on 6 October 2017, the respondent claimed that the appellants were actuated by express malice. The pleading of malice stated, in full: "a) The [first appellant] by the [second appellant] and the [second appellant] personally were motivated in publishing the matter complained of by a desire to injure the [respondent]. b) The [respondent] relies upon the [appellants'] knowledge of the falsity of the matter complained of in that: (1) The matter complained of conveys that the [respondent] was dismissed from his employment with the [first appellant]. (2) This is a deliberate lie by the [appellants]. (3) At the time of publication of the matter complained of the [appellants] well knew that the [respondent] had resigned from employment with the [first appellant] and had not been dismissed from his employment. (4) The [appellants'] knowledge of falsity is to be inferred from the facts that: (a) the [respondent] resigned from employment by email sent on 13 March 2016 at 5.14 pm to the [second appellant]; (b) the [respondent] resigned because the [appellants] directed the [respondent] to undertake work for the [first appellant] at a time that was incompatible with the [respondent's] TAFE commitments; (c) the [respondent] relies on the letter dated 24 May 2016 from the [appellants'] solicitors, Willis and Bowring, to the [respondent]. (d) The [respondent] further relies on the [appellants'] knowledge (that the allegation that the [respondent] had lied or misled the [appellants] to believe that the [respondent] had a Certificate III) was false. The [appellants] knew that the [respondent] had recently left school and enrolled in a Diploma course at TAFE and could not have completed that course or a Certificate III at any time in 2015. (e) Alternatively to the immediately preceding particular, the [appellants] were reckless about the truth of the allegations in that the [appellants] did not check their own records before making the allegations. c) The [respondent] was no longer employed by the [first appellant] at the time the [appellants] published the matter complained of and there was no reason to inform recipients of the matter complained of of anything other than that the [respondent] had resigned. d) The [respondent] relies on the manner and extent of publication including the language used."
2. The written submissions of the respondent on the appeal asserted that the way in which the defence of qualified privilege was advanced in this Court was outside the pleaded case. That assertion was not repeated by Senior Counsel for the respondent, Mr Smark SC, who was not the author of those written submissions. To the extent that the complaint was maintained by the respondent, which was unclear at the hearing, I reject it. The appellants' case about qualified privilege at common law in this Court was consistent with the way the case was advanced at the trial, as recorded by the primary judge himself at paragraph [271].

The "defence" of "actual or apparent interest"

1. It is regrettable that at the outset his Honour addressed the "defence" of "actual or apparent interest". There is no such defence. Whether or not the primary judge was misled by the requirements of UCPR r 15.21 (which apply in defamation cases in what may fairly be described as a confusing way), to treat this topic as a separate defence, it was an error to do so.
2. There is, however, a more fundamental problem. Even assuming that this part of the judgment can be understood as addressing the identification of the privileged occasion and in particular the necessary reciprocity of interest, the primary judge conflated, at least, the question of the necessary reciprocity of interest with the question of relevance of the defamatory matter to the identified privileged occasion. This is apparent in the following passage: "[259] First, as to sub-paragraph (1) of [257] above, the reciprocity of interest was in my assessment simply limited to the need to tell parents that the [respondent] was no longer employed at the centre. The parents had a relevant interest in being told of that fact. Apart from the statement: 'We wish him well with his future', the remainder of the email was both gratuitous and irrelevant to that purpose."
3. I do not agree with the respondent's submission that the mistaken identification of a separate "defence" may effectively be ignored. This is because his Honour's approach to the separate "defence" itself reveals error. His Honour's treatment of this issue at paragraph [259] commences by conflating the identification of an occasion of qualified privilege and the relevance of the defamatory email to that occasion. The remaining paragraphs dealing with this "defence" demonstrate that the primary judge misconceived the test for the defence of qualified privilege at common law.
4. In particular, this part of the judgment reveals confusion, including confusion about the onus of proof, between the defence of justification and the issue of malice relevant to qualified privilege. The reasons given by the primary judge are replete with references to the failure of the appellants to prove various matters. This misunderstanding about the onus of proof of malice in common law qualified privilege permeates the judgment: 1. in [260] the primary judge found that there was no commonality of interest between the parents and the appellants as the appellants had failed to place the details of "staff-to-child" ratios in evidence: that finding was relevant, if at all, to the defence of justification and not to the identification of the privileged occasion; 2. in [261] the primary judge found that the email added "gratuitous" comments which "impugned the [respondent's] character in an injurious way": this conflated the issues of the existence of a privileged occasion, the relevance of the defamatory matter to the privileged occasion and malice; 3. in [262] the primary judge found that the email was "misleading" as there had been "no reasonable disciplinary process" involving the respondent: this finding, which was repeated in the primary judge's dispositive findings about malice, (i) involved a misunderstanding about the requirements of proof of malice, and (ii) was not relevant to the identification of an occasion of privilege; 4. in [263] the primary judge referred to a passage from T K Tobin, M G Sexton, Australian Defamation Law and Practice (2003, Lexis Nexis Butterworths) about the defence of justification: "[263] The authors T.K. Tobin, M.G. Sexton, Australian Defamation Law and Practice, Lexis Nexis Butterworths, 2003, observed at [11,005] that where justification has been pleaded as a defence, there is (truth being such a defence) very likely to be a tactical battle over the extent of the evidence that can be called by the defendant in support of that plea. In that regard, those authors observed that the principles which govern that type of conflict are far from settled. In my view, in this case, the defendants have failed completely in their efforts at seeking to establish the truth or the substantial truth of the claimed allegations of dishonesty."
5. It is clear that by extracting this passage the primary judge regarded evidence led on the defence of justification as being relevant to, and perhaps even dispositive of, the question of whether an occasion of qualified privilege existed. This was an error. This misunderstanding of the task being undertaken in addressing qualified privilege at common law carried over into the primary judge's consideration of what he described as a separate "Issue 6", qualified privilege at common law, to which I now turn.

Identification of the privileged occasion

1. All parties on the appeal emphasised the importance of the critical first step in considering a defence of qualified privilege at common law, being the identification of the privileged occasion. So much may be accepted.
2. In LVMH Watch & Jewellery Australia Pty Ltd v Michael Lassanah & Ors [2011] NSWCA 370 Bergin CJ in Eq, Giles and Campbell JJA agreeing, held: "[91] In identifying the 'occasion' it is important to consider the 'hallmark' of reciprocity of duty and interest: Cush v Dillon; Boland v Dillon (2011) 279 ALR 631; [2011] HCA 30 per French CJ, Crennan and Kiefel JJ at 635 [11]. It has also been referred to as a 'special and reciprocal interest': Andreyevich v Kosovich (1947) 47 SR (NSW) 357 per Jordan CJ at 363 referred to in Aktas v Westpac Banking Corporation Limited (2010) 241 CLR 79; [2010] HCA 25 per French CJ, Gummow and Hayne JJ at 91 [31]. The Trial Judge referred to this as the 'guiding principle' and with reference to Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 observed that there must be a 'close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication' (at [207]) (These words are in fact those of Dixon J (as his Honour then was) in Guise v Kouvelis (1947) 74 CLR 102 at 116). [92] In considering the defence of qualified privilege at common law it is imperative, as a first step, to identify the occasion to enable the subsequent proper analysis of whether the publication is relevant or germane to the occasion. If the occasion is not so identified it becomes difficult to assess whether something is foreign to the occasion when a claim of malice is made."
3. Despite having rejected the separate "defence" of "actual or apparent interest", the primary judge in effect returned to that topic when addressing "Issue 6". His Honour said: "272 As to elements (5), (6), (7) and (9) of [271] above, whilst there may have been a legitimate interest in the [appellants] providing parents with children at their childcare centres with up to date business-related information as to the identity of staff working at their childcare centres, including the names of staff no longer working there, in my assessment each of the imputations that arise from the [appellants'] emails comprise irrelevant inclusions that are gratuitous, and outside the purposes of that interest. The cited imputations went well beyond any legitimate purpose by gratuitously raising the matters complained of by the [respondent] concerning his reputation and character."
4. Although tentatively expressed, I accept, as Mr Dawson SC for the appellants submitted, that this was a finding that there was an occasion of privilege, identified as being "the [appellants] providing parents with children at their childcare centres with up to date business-related information as to the identity of staff working at their childcare centres, including the names of staff no longer working there".
5. As I have said, Mr Smark SC for the respondent did not seek in his oral address to advance any complaint about the appellants' submissions in this Court allegedly travelling beyond the pleaded defence of qualified privilege at common law. He supported the findings of the primary judge and submitted that: "[H]is Honour had regard to the circumstances of the parties with great care in his consideration of the factual background to the matter, and that gave rise to no interest in parents to know more of that detail than that [the respondent] was no longer employed."
6. The finding that the email contained "irrelevant inclusions" is a finding about the relevance of the communication to the privileged occasion. As I will shortly explain, this finding was made without reference to the test to be applied in making such a finding. The finding that parts of the email were "gratuitous" and travel beyond any "legitimate purpose" also introduces the subjective purpose of the appellants, relevant only to malice, and the relevance of the communication to that privileged occasion, which is an objective question.
7. For these reasons the finding of the primary judge about the existence of an occasion of qualified privilege should be set aside.
8. This Court is in as good a position as the trial court to make findings about this issue. The "special and reciprocal interest" of the parties was broader than that described by the primary judge. The pleaded defence relied upon reciprocity of interest between the appellants and the parents of children at the Centre, being the need to ensure that the Centre's employees were suitably qualified to supervise children. Whilst the relationship between the appellants and the parents was a commercial one, each party had a critical interest in the information about the identity of staff working at the Hubba Bubba Centre, including information about the identity of staff no longer working at the centre.
9. A close scrutiny of the circumstances of this case, of the situation of the parties, the relationships of all concerned and of the events leading up to and surrounding the publication of the email leads to the conclusion that there was a special and reciprocal interest between the parents of children at the Centre and the appellants in information about: 1. the identity of staff working at their childcare centres, including the names of staff no longer working there; 2. the qualifications of current or former staff involved in supervising children at the Centre; and 3. the suitability of current or former staff members to supervise children at the Centre.
10. Those subjects were a matter vital to the interests of the appellants. The appellants' business depended upon the Centre's employees being appropriately qualified and otherwise suitable to supervise children. It was a special and reciprocal interest of parents of children attending the Hubba Bubba Centre as those parents had a vital interest in ensuring that their children had been and were currently being supervised by appropriately qualified and suitable people.

Relevance of the defamatory statements to the privileged occasion

1. To establish the defence of common law qualified privilege, defamatory statements must be sufficiently connected to the privileged occasion: Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5 per Gleeson CJ, Hayne and Heydon JJ at [27]-[30]; Gummow J at [135]-[136]; Kirby J at [191]-[192]. It was common ground on the appeal that sufficient connection was an objective test and to the extent that the primary judge took into account subjective intention or purpose in considering this question that was an error.
2. The High Court has made clear that no narrow view should be taken of the pursuit of duty or interest in what was said on an occasion of privilege: Cush v Dillon (2011) 243 CLR 298; [2011] HCA 30 at [22]. There, French CJ, Crennan and Kiefel JJ dealt with a submission that a statement was extraneous to, and made outside of, the "umbrella of the applicable privilege". If this was correct, the privilege would not extend to protect the statement. Their Honours quoted (at [18]) the much cited passage of Parke B in Toogood v Spyring (1834) 1 Cr M & R 181 at 193; 149 ER 1044 at 1050: "If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." (Emphasis added in the High Court).
3. Their Honours in Cush v Dillon reiterated that Adam v Ward [1917] AC 309 confirmed that there may be limits to what may be said upon a subject on an occasion of qualified privilege and that those limits are to be tested by the connection of the statement to the subject, stating (at [22]): "It is not necessary to determine whether the descriptions given of irrelevant material in Adam v Ward vary as to the stringency with which relevance ought to be tested. The passage from Toogood v Spyring [(1834) 1 Cr M & R 181 at 193; 149 ER 1044 at 1050] suggests that no narrow view should be taken of the pursuit of a duty or interest in what was said. To do so may unduly restrict the operation of the defence. More recently an issue of the kind here in question was stated in the joint judgment in Bashford v Information Australia (Newsletters) Pty Ltd [(2004) 218 CLR 366 at 378 [27]] to be 'whether the matter which defamed the appellant was sufficiently connected to the privileged occasion to attract the defence'. In that case the article in question incorrectly described the result of court proceedings, by identifying the plaintiff as the subject of findings of contravention of s 52 of the Trade Practices Act 1974 (Cth), by engaging in misleading and deceptive conduct. In fact the party the subject of the findings was a company controlled by the plaintiff and his wife. In the joint judgment it was held that the error 'did not alter or reduce the connection between the privileged occasion and the defamatory matter' [Bashford at 379 [29]."
4. What must be considered is whether the defamatory statements were here sufficiently connected to the privileged occasion to attract the defence.
5. The extent to which the primary judge addressed this question is unclear. His Honour's dispositive reasoning was set out at paragraphs [271]-[272] which stated: "Submission by [appellants] on common law qualified privilege [271] The [appellants] sought to construct a basis for their submitted defence of common law qualified privilege by pointing to a series of ten asserted factual matters, the first two of which were not in dispute. Those matters are as follows: (1) Ms Chapman owned and managed a business in the form of two childcare centres. This element of the [appellants'] argument is not in dispute; (2) Ms Chapman was the subject of regulatory requirements concerning the minimum education requirements for staff and the permitted staff-to-student ratios. This element of the [appellants'] argument is also not in dispute; (3) It was argued that the [respondent] was a very recent employee who had ceased employment as at either 24 March 2016 or within the range of possible dates for his constructive dismissal; (4) It was argued that the recipients of the emails, as parents of children at the Haig Street Centre, had, on 4 April 2016, a legitimate interest in receiving factual information on various business matters pertaining to the management of the Haig Street Centre, which included whether or not the staff there were duly qualified; (5) It was argued that the ostensible and actual purpose of the emails was to provide parents with up to date information as to the number of staff at the Haig Street Centre, the identities of included staff and relevant business-related information about those staff; (6) It was argued that the parents must be taken to have developed business and social relationships with various staff members, and should be taken to want to know whether any staff had left and the reasons for leaving; (7) It was argued that the parts of the emails of 4 April 2016 that concerned the [respondent], specify the facts of his recent departure from the centre, and the reasons for his departure; (8) It was argued Ms Chapman must be taken to have anticipated, on a reasonable basis, that parents might entertain concerns in relation to whether or not the staff to whom their young children were entrusted were appropriately qualified to look after them (in addition to any formal regulatory requirements that needed to be satisfied as to qualifications of employees); (9) It was argued Ms Chapman must be taken to have anticipated, on a reasonable basis, that she would receive enquiries from parents in the event that a member of staff disappeared without explanation; (10) It was argued Ms Chapman must be taken to have anticipated, on a reasonable basis, that the centre might be placed in jeopardy at the hands of the regulatory authority in the event that staff was not properly qualified and, if parents entertained any suspicion in this connection, they might have notified the regulatory authority. Consideration of those arguments [272] There is no need to further analyse the elements of arguments (1) and (2) of [271] above as those matters are not the subject of dispute. However, in my opinion, for the reasons that follow, each of the other identified elements of argument numbered (3) to (10) of [271] above, both individually, and in combination, do not sustain the claimed defence of common law qualified privilege: (1) As to element (3) of [271], I do not accept there was a constructive dismissal as claimed by the [appellants]. In fact the [respondent] was actually and peremptorily dismissed by the [appellants] at a time when he was working out his notice pursuant to the terms of his contract of employment, at which time he was escorted off the premises. In my view, the notion of a constructive dismissal is raised spuriously in this case as he had already resigned from his employment; (2) As to elements (4), (8) and (10) of [271] above, there was no reliable evidence introduced by the [appellants] as to an argued requirement that only persons who are qualified in childcare may work in childcare centres. If that were so, the [appellants] should not have employed the [respondent] in the described position in the first place. The [respondent] had the required clearance certification for working with children. That was all that was required of the [respondent]. The [appellants'] regulatory obligation was to maintain a specific ratio of qualified staff to the number of children at its childcare centres. That is an independent question that has no relevance to the employment of the [respondent]. There was no evidence of a requirement that the [respondent] have a qualification in order to fill the position in which the [appellants] had employed him. (3) As to elements (5), (6), (7) and (9) of [271] above, whilst there may have been a legitimate interest in the [appellants] providing parents with children at their childcare centres with up to date business-related information as to the identity of staff working at their childcare centres, including the names of staff no longer working there, in my assessment each of the imputations that arise from the [appellants'] emails comprise irrelevant inclusions that are gratuitous, and outside the purposes of that interest. The cited imputations went well beyond any legitimate purpose by gratuitously raising the matters complained of by the [respondent] concerning his reputation and character."
6. Sub-paragraph (1) of paragraph [272] addresses the justification defence. The relevant subject matter was whether the respondent was a very recent employee of the Centre. Plainly he was. This is a matter supporting a finding of relevance of the defamatory matter to the privileged occasion.
7. Sub-paragraph (2) of paragraph [272] does not address the critical matters put by the appellants about the occasion of privilege and the relevance of the defamatory matter to that privileged occasion; namely, the reciprocal interest of the parents and the appellants in information about employees and their qualifications [271(4)], the understandable concerns of parents of children at the Centre to understand why the respondent was no longer employed at the Centre [271(8)], and the second appellant's concerns about possible regulatory action in the event that a complaint was made by a parent about matters relating to the qualifications of the respondent to work at the Centre [271(10)].
8. Sub-paragraph (3) of paragraph [272], despite referring to sub-paragraphs (5), (6), (7) and (9) of paragraph [271], does not address the substance of the appellants' case about the occasion of privilege and the relevance of the defamatory matter to that privileged occasion raised by those sub-paragraphs. In substance, the appellants sought findings that: 1. the subject matter of the matter complained of was up to date information about staff at the Centre - [271(5)]. That was correct. That finding should have been made; 2. parents of children at the Centre had developed relationships with members of staff at the Centre and had an interest in the reasons for a staff member no longer being employed by the Centre - [271(6)]. A finding to that effect should have been made; 3. the matter complained of specified the fact of the respondent's recent departure from the Centre and provided the reasons as the appellants understood them for that departure - [271(7)]. Subject only to a consideration of the separate question of malice, addressed below, that submission was correct and should have been accepted; and 4. the appellants reasonably anticipated enquiries from parents at the Centre about a member of staff who was no longer working at the Centre if no explanation for his departure were provided - [271(9)]. That submission was correct and should have been accepted.
9. It was far too narrow a conception of relevance to the privileged occasion and an error by the primary judge to conclude that the reasons for the respondent no longer being employed at the Hubba Bubba Centre were not sufficiently connected to the occasion of privilege. The contents of the matter complained of were directly relevant to the occasion of privilege identified at [47] above for the following reasons: 1. the context of the email was a report on a number of current and former staff members; 2. the part of the email relevant to the respondent commenced with the news that the respondent, who had been looking after children at the Centre, was no longer doing so "([the respondent] - is unfortunately no longer with us due to disciplinary reasons."); 3. a brief explanation was given of the reasons for the respondent no longer being responsible for looking after children at the Centre ("while being good with the children in general, [the respondent] was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience."); 4. the message concluded "We wish him well with his future".
10. The information conveyed by the matter complained of was sufficiently connected to the occasion of privilege. It was relevant for parents of children at the Hubba Bubba Centre to know the reasons why an employee who had until recently cared for their child was no longer working at the Centre. It was relevant, if only to exclude natural speculation if the reasons were left unstated, where the care of young children was involved.

Malice

1. The respondent was obliged to establish a predominantly improper motive in publishing the matter complained of and overcome the presumption that the publisher acted honestly, that is, with a proper purpose: Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 at [96]-[97].
2. Proof of ill-will, prejudice, bias, recklessness, lack of belief in truth or some motive other than duty or interest for making the publication is insufficient of itself to establish that malice actuated the publication: Roberts v Bass, per Gaudron, McHugh and Gummow JJ at [74]-[76]; Fraser v Holmes [2009] NSWCA 36 at [50]-[68] per Tobias JA with whom McColl and Basten JJA agreed; Cush v Dillon at [27].
3. A plaintiff has a heavy onus to discharge to establish malice. Malice is a serious matter and the principles set out in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 at 361-363 apply to such a finding.
4. The primary judge made a contingent finding that the respondent's claim of malice should be upheld. His Honour made that finding on two separate bases.
5. The first basis was that the imputations contained in the matter complained of were "so unreasonable that the [appellants] must have known the imputations were false": at [273]-[278]. This in turn had four separate components: 1. the second appellant claimed the respondent had been dismissed for dishonesty yet she knew that he had resigned and that there had been no apparent resort to the Centre's Grievance Procedures before he was escorted from the premises: at [275]; 2. the respondent was dismissed for dishonesty but the failure to afford "a procedurally fair opportunity" to address the allegations against him meant that the second appellant did not believe "on reasonable grounds" that the respondent had been dishonest: at [276]; 3. the appellants' pleaded defence that the respondent had lied to parents at the Centre "remained an unsupported assertion". That element of the defence was "completely without substance": at [277]. (It is tolerably clear that his Honour was here referring to the justification defence which was rejected: the rejection of that defence was, in this case, irrelevant to the question of malice); and 4. the claimed disciplinary issues were "so fundamentally unreasonable" that they "cannot be reasonably believed to be true": at [278].
6. The primary judge concluded his consideration of the first way that malice was found by stating that "[the second appellant] said she had not intended any malice in sending the email in question. Be that as it may, I do not accept that [the second appellant] had sincerely believed the truth of those matters raised in the defence to the [respondent's] claim": at [279]. This, in context, is a reference to those matters his Honour had just discussed, being the pleaded justification defence.
7. None of these findings separately or together are capable of establishing malice. Whilst his Honour referred to Roberts v Bass in passing, he did not apply it in making the finding of malice. In particular, the primary judge did not find that the respondent had overcome the presumption that the appellants had acted honestly. To the contrary, his Honour relied upon a passage from Mr Gillooly's text, The Law of Defamation in Australia and New Zealand (1998, The Federation Press) which he set out at [269]: "[269] At pp 171-175 of that text, the author has conveniently set out an analysis of the elements within the statement cited from the decision in Adam v Ward, and as distilled from a range of other cited authorities, as follows, with the citations omitted: (1) The element of duty need not be a legal duty but may be social or moral such that a great mass of people of ordinary intelligence and moral principle have considered it their duty to make or receive the subject communication; (2) There must be a real, definite or existing interest that founds the claimed duty, and the fact that the defamatory statement may be 'interesting' is insufficient to constitute an interest for the purpose of defence; (3) In general, the question of whether the defendants honestly believe on reasonable grounds, that such a duty or interest exists is an irrelevant consideration at this stage of the inquiry, but such beliefs have relevance to the issue of malice; (4) There must be a reciprocity of duty or interest between the maker of the statement and its recipient; (5) Irrelevant inclusions are not covered by the privilege; (6) A defence of qualified privilege will be defeated if the defendants were motivated by express or actual malice, which may be presumed from the defamatory character of the material that was published; (7) Malice may be negatived if it is accepted that the defendants honestly believed in the truth of the defamatory statement; (8) If the defendants did not honestly believe in the truth of the defamatory matter, or if the defendants were recklessly indifferent to its truth or falsity, this is generally conclusive evidence of malice."
8. This passage pre-dates the decision of the High Court in Roberts v Bass and is inconsistent in material respects with that decision. In particular, paragraph (8) is in material respects incomplete and not a correct statement of the law after Roberts v Bass. [6] The primary judge, however, proceeded incorrectly on the basis that conclusive evidence of malice is provided "if the defendants did not honestly believe in the truth of the defamatory matter, or if the defendants were recklessly indifferent to its truth or falsity". As the plurality explained in Roberts v Bass at [97]: "Because honesty is presumed, the plaintiff has the onus of negativing it. That is to say, the plaintiff must prove that the defendant acted dishonestly by not using the occasion for its proper purpose. Unless that is kept in mind, there is a danger that reference to the honesty of a defendant will reverse the onus of proof. If the tribunal of fact rejects the defendant's evidence that he or she positively believed in the truth of what he or she published, it does not logically follow that the plaintiff has proved that the defendant did not believe in the truth of the publication or had an improper motive. Rejection of the defendant's evidence, combined with other evidence, may lead to the conclusion that the defendant had no belief in the truth of the publication or knew that it was false. But mere rejection of the defendant's evidence does not logically and automatically lead to any conclusion as to what his or her state of mind was. '[B]y destroying that evidence you do not prove its opposite' [Hobbs v Tinling & Co Ltd [1929] 2 KB 1 at 21, per Scrutton LJ]."
9. This critical passage from Roberts v Bass was overlooked by the primary judge in making his findings about malice.
10. Having stated the incorrect test, the primary judge applied that test in making each of the findings about malice: 1. the starting point, at [274], that the subjective belief of the second appellant was "so unreasonable" that the appellants "must have known" that the imputations arising from the email were false, is not a finding of malice. I reject the respondent's submission that, in context, the finding is equivalent to a finding that the second appellant actually knew that any part of the email was false. Such a serious finding should not lightly be inferred. In any event, each of the reasons given by the primary judge for the finding display reference to an incorrect test for proof of malice; 2. the finding that the second appellant knew that the respondent had resigned (effective at a subsequent date) at [275], is not in any way inconsistent with a genuine belief that his immediate dismissal was warranted. The reference by the primary judge to the Centre's "Grievance Procedures" is in context a reference to a negligence or recklessness standard being applied to the appellants' belief in the truth of the contents of the email. It was an inadequate and irrelevant basis upon which to find knowledge of falsity; 3. the finding at [276] that the failure to afford the respondent "a procedurally fair opportunity" to address the allegations against him in this case was a finding applying a negligence standard to the appellants' belief in the truth of the matters contained in the email. The finding was irrelevant to any question of malice; 4. the fact that at [277] the primary judge rejected the appellants' pleaded justification defence (that the respondent had lied to parents at the Centre) was, in this case, insufficient to support a finding of malice. The fact that the primary judge found that the respondent had not lied to parents at the Hubba Bubba Centre does not address the question of whether the appellants knew that the contents of the email were untrue; and 5. the finding at [278] that the claimed disciplinary issues were "so fundamentally unreasonable" that they "cannot be reasonably believed to be true" was, in this case, irrelevant to the question of malice. It was a misstatement of the relevant test. If the Roberts v Bass test is applied to this finding, it provides (at best) proof of prejudice, bias or recklessness, insufficient of itself to establish that malice actuated the publication.
11. Concepts of "reasonable" belief, much less the absence of "procedurally fair opportunities" to raise employment grievances were, in the context of this case, completely irrelevant to the claim of malice and the primary judge erred in concluding that those matters were supportive of the determination he made.
12. On the appeal another finding by the primary judge was called in aid by the respondent to support a finding of malice: "[220] Ms Chapman denied that the major reason she sent the email accusing the [respondent] of lying was to manufacture a reason for her business not complying with regulated staff ratios, namely an alleged misrepresentation by the [respondent] rather than fault on her part thereby scapegoating the [respondent] for her problem as she needed someone to blame for her default in regulatory compliance: T380.44 - T381.16. [221] I do not accept Ms Chapman's cited denials. I consider that in the circumstances in which the [respondent] fell from favour in Ms Chapman's eyes, the above-cited assumptions put to her, and which she denied, were more probably than not, correct. I do not accept her evidence she had been given to understand the [respondent] had fulfilled the component requirements of his course."
13. This topic was not a pleaded particular of the respondent's malice case. There was no notice of contention seeking to support the primary judge's finding of malice on this basis. The appellants did not consent to an expansion of the malice case being conducted by the respondent in this Court. I would reject reliance on this finding as relevant to malice.
14. Even if, contrary to the view I take about reliance on this finding, it were concluded that the appellants had by their conduct permitted an expanded malice case to be litigated, the finding provides no more than a rejection of the second appellant's evidence. As the plurality explained in Roberts v Bass in the passage extracted at [66], the rejection of the second appellant's evidence on a matter related to part of the matter complained of does not logically lead to a conclusion that the respondent has proven that she did not believe in the truth of the publication or had an improper motive.
15. The findings by the primary judge on the first basis upon which malice was thus established must be set aside.
16. The second basis for the primary judge's finding of malice was a finding that the statements made by the second appellant in the email were "so reckless that they were made with wilful blindness to the truth" in light of the five factors identified at paragraph [280] of the primary judgment (and re-stated below). Whilst it is correct that a defendant's recklessness may be "so gross as to constitute wilful blindness, which the law will treat as equivalent to knowledge" (see Roberts v Bass at [84]), none of the matters identified by the primary judge support such a conclusion. The five matters identified by the primary judge were: 1. the second appellant's concern about regulations was "not reasonable". She was found to have "overstated" the relevant regulatory requirements. The decision to employ the respondent was found to be "distinct from her regulatory obligations" concerning qualified staff to child ratios. Each of those findings do not support a finding of malice, even in the sense of gross recklessness amounting to wilful blindness; 2. the primary judge found that the second appellant had a concern about what the respondent might say to parents about his resignation, thus making it desirable to discredit him. This is not a finding relevant to establishing recklessness, let alone wilful blindness amounting to malice. At best it might provide evidence of "ill-will" or an "improper motive" of the kind described in Roberts v Bass as not amounting, in themselves, to malice; 3. the primary judge found that the attitude of the second appellant to the respondent walking a child to the Centre for reward was "unreasonable". His Honour construed the Centre's babysitting policy as not applying to this situation. This finding did not support a conclusion of recklessness, wilful blindness or malice. As was apparent from numerous findings made elsewhere by the primary judge, the second appellant strongly believed that the respondent walking a child to the Centre for reward was a breach of the Centre's babysitting policy. The primary judge did not address that evidence of belief, other than to describe it as "unreasonable", thereby implicitly accepting it as a genuine belief; 4. the primary judge found that the second appellant was "disproportionately angry" in her response to the respondent on the babysitting and qualifications issues. This finding assumes that a level of anger was permissible. In any event, the finding did not support a finding of gross recklessness amounting to wilful blindness or malice; 5. the primary judge found that the second appellant was "spiteful" in telephoning the parent of the child the respondent was walking to the Centre and seeking to dissuade her from continuing to employ him. That finding does not support a conclusion of gross recklessness amounting to wilful blindness. The finding emphasises the fact that, whether reasonable or not, the second appellant strongly believed that the respondent's walking a child to the Centre for reward was a breach of the Centre's babysitting policy. It may amount to a finding supporting a conclusion of ill-will towards the respondent. Roberts v Bass makes clear that ill-will will not of itself suffice to prove malice in publishing the contents of the email.
17. The finding by the primary judge that the statements made by the second appellant in the email were "so reckless that they were made with wilful blindness to the truth" cannot be sustained and must also be set aside.

Was malice established on the evidence?

1. In the event that this Court concluded that the primary judge had erred in finding malice, all parties asked the Court to make its own findings about malice. Leave was granted to the parties to file additional references to the evidence for this purpose. I have considered each of those references and concluded that, rather than remit the matter for another trial, this Court is in a position to itself make findings about this issue. On the respondent's pleaded case and undertaking the task that s 75A of the Supreme Court Act 1970 (NSW) requires, I am not satisfied that the respondent established malice. This is for the following reasons.
2. In approaching the second appellants' evidence for the purposes of s 75A of the Supreme Court Act I will proceed on the view of the second appellant's evidence found by the primary judge, namely: "[45] … that Ms Chapman's evidence should be regarded with considerable reserve before acceptance on any issue in dispute. I found myself unable to rely upon her evidence where her evidence was at variance from the [respondent's] evidence on critical matters in dispute, and where there was credible oral or documentary evidence to the contrary of her own evidence."
3. An important limitation inherent in that finding should be noted. Ms Chapman's evidence was treated with considerable reserve where it differed from the respondent's evidence. As malice involves a finding about an improper motive that allegedly actuated the publication, the extent to which the respondent was able to give evidence relevant to establishing malice was somewhat limited. In approaching the question of whether to accept the second appellant's evidence where there is no conflict with evidence given by the respondent, particularly on matters relevant to her contemporaneous understanding of relevant matters, there are a number of documents which assist in determining whether malice has been established.
4. The contemporaneous evidence commences with the matter complained of itself. It will be recalled that the email contains the following: 1. the description of the respondent as "being good with the children in general"; and 2. the closing part which stated "I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well with his future".
5. These parts of the email provide some initial support for the conclusion that the second appellant was not actuated by malice in sending the email. Taken as a whole the language of the email does not suggest that it was intended maliciously.
6. The evidence of the second appellant about her beliefs concerning relevant issues and events at the time the email was sent must be evaluated. Five matters were identified by Senior Counsel for the appellants, Mr Dawson SC, as being relevant to the second appellant's state of mind at the time the email was sent: 1. the second appellant believed that she had dismissed the respondent on 24 March 2016 for matters she had warned him about; 2. the second appellant believed that she had been misled by the respondent about his Certificate III qualification in a conversation on 5 June 2015; 3. the second appellant believed that from November 2015 the respondent had not been truthful with her about his studies; 4. the second appellant believed that the respondent had not been truthful concerning TAFE's recommendations about his study options; 5. the second appellant believed that the respondent had not been truthful with her about non-compliance with the Centre's babysitting policy.
7. The second appellant gave evidence supporting a finding about each of the matters relied upon by Mr Dawson. Approaching the second appellant's evidence with the reserve I have identified above, I would not conclude that the second appellant's evidence about any of these matters should be rejected.
8. As to the first matter, the second appellant gave evidence that she believed that she had dismissed the respondent on 24 March 2016 for matters she had warned him about. It is clear that the second appellant and the respondent discussed the Centre's babysitting policy. It is clear that the second appellant warned the respondent of her view that he was in breach of that policy. At the trial the focus on the babysitting policy was as part of the justification defence. That defence was rejected. The primary judge offered a detailed construction of the babysitting policy. That analysis is irrelevant to a consideration of the question of malice. The relevant question here is whether it was established that the second appellant did not believe that she had dismissed the respondent on 24 March 2016 for matters she had warned him about, including non-compliance with the babysitting policy.
9. The respondent accepted that he was warned by the second appellant about a breach of the babysitting policy, for example: "Q. She said to you, 'You are definitely not permitted to do any more paid work for the Chia(?)family or any other family at the centres.' A. Well, as I mentioned before, she made me very upset and all I can remember from that was that she just said, you know, don't babysit again and I never did."
10. The respondent also accepted that he was warned by Amy Lee (another staff member at the Centre) about walking a child to school: "Q. --Amy Lee asked you, 'Are you doing work for the Tieus?' A. As I said, I can't say the date so I - the wording, she never said like that, sorry. … Q. Do you accept that Amy Lee said something like that? A. Yes. Q. What was it? A. Well, she asked, 'Was I walking the girls', in quotations, 'to school?'"
11. The respondent also accepted that he was escorted from the Centre's premises on 24 March 2016.
12. Months prior to the subject events, the second appellant told the respondent that steps needed to be taken by him to obtain an appropriate Certificate III qualification and the respondent needed to approach TAFE in order to see what options were available to get this done as soon as possible. I set out details about relevant email exchanges at [104]-[115] below. This contemporaneous written evidence is consistent with a conclusion that the second appellant believed that she had dismissed the respondent on 24 March 2016 for matters she had warned him about.
13. I would not reject the second appellant's evidence that she believed that she had dismissed the respondent on 24 March 2016 for matters she had warned him about.
14. As to the second matter, the second appellant gave evidence that she believed that she had been misled by the respondent about his Certificate III qualifications in a conversation on 5 June 2015.
15. The primary judge found, in dismissing the justification defence, that the respondent had not said anything to the second appellant at any time about his Certificate III qualifications: "I do not accept her evidence she had been given to understand the [respondent] had fulfilled the component requirements of his course": at [221].
16. That was not, however, a finding about the genuineness of the second appellant's belief that she had been misled by the respondent about his Certificate III qualifications in a conversation on 5 June. The second appellant's belief may have been genuine, even if, for example, it was based on a complete misunderstanding of what she had been told by the respondent.
17. The second appellant's evidence was that the respondent had completed a placement at the Centre and "had done well with the children". She gave evidence of a conversation in June 2015 with the respondent (led on three different occasions over her lengthy evidence in chief for reasons which are obscure) wherein she asked the respondent whether he was interested in a Certificate III position she had coming up. In cross-examination it was repeatedly put to her by counsel for the respondent that she knew in July 2015 that the respondent had not completed the necessary number of days of work experience to obtain a Certificate III. The second appellant agreed, but gave an explanation of her understanding based upon what she said was the practice in the industry of TAFE being flexible and issuing a pass to student for a Certificate III qualification despite the fact that there were some placement days yet to be completed. The second appellant understood that this was the case here.
18. Critically for present purposes, the second appellant was cross-examined to suggest it was possible that she believed the respondent had achieved his Certificate III qualification because "you were given bad information by TAFE and relied on it without ever asking [the respondent] about whether he was enrolled in Certificate III". This suggestion, by counsel for the respondent, was consistent with a complaint of negligence, but inconsistent with a case alleging malice.
19. The respondent's evidence about this topic was confusing. He said, in answer to a question in chief about whether anything was said by the second appellant on the topic of whether he had a Certificate III qualification: "Q. Was anything said about Certificate III at any time prior to you going to work at the Hubba Bubba on Haig Street Centre? A. When we started our classes, people who were doing Diploma and Certificate III were all merged in the same classroom together, so we had people doing the Certificate III and Diploma, as well as the subjects were the same, doing the Diploma and Certificate III."
20. The written job offer to the respondent, part of the contract of employment, was dated 3 July 2015. The letter of offer was signed by the respondent who acknowledged in writing that he had "read and understood this letter and accept the offer of employment from [the first appellant] on the terms and conditions set out in the letter." (Emphasis added.)
21. The opening words of the letter should be set out in full: "I am pleased to offer you employment in the position of Certificate III in Early Education and Care with us at KSMC Holdings Pty Ltd T/AS Hubba Bubba Childcare on Haig ('the employer') on the terms and conditions set out in this letter."
22. A further document also signed by the respondent dated 3 July 2015, described (on the first page) under the heading "Qualifications" the "essential criteria" as being, relevantly, "AQF Certificate III in Children's Services or an equivalent qualification or in the opinion of the employer, possesses sufficient knowledge or experience to perform duties at this level".
23. The findings of the primary judge about these documents were that despite the opening words of the letter of offer and the signed acknowledgement by the respondent accepting the offer of a position of "Certificate III in Early Education and Childcare": 1. the offer did not "require" the respondent to have a Certificate III qualification [102]; 2. the maximum number of hours was not specified thus, according to the primary Judge, "there was scope for reasonable variation within that part-time position" [101]; 3. the contract did not refer to any representation allegedly made by the respondent to the effect that he had a Certificate III qualification [102]; 4. the respondent was offered the position because the second appellant had "formed the opinion that [the respondent] possessed sufficient knowledge or experience to carry out the duties she proposed to allocate to him" [104]; 5. the second appellant "must have known" that the respondent did not have such a qualification [98].
24. The ultimate finding by the primary judge on this issue was that the second appellant did not have "a reasonable basis" for assuming that the respondent had a Certificate III qualification.
25. Despite the advantages enjoyed by the primary judge, the finding at [104] that the second appellant had "formed the opinion that [the respondent] possessed sufficient knowledge or experience to carry out the duties she proposed to allocate to him" was contrary to contemporaneous documents and compelling inferences available from those documents. It must be set aside. It is one thing to reject the second appellant's account of conversations when they are inconsistent with the respondent's version of those conversations. It is quite another to make a positive finding about an opinion formed by the second appellant which is inconsistent with her evidence and the contemporaneous documents. The opinion attributed to the second appellant by the primary judge is inconsistent with her response in late 2015 and early 2016 in the emails set out below when insisting that the respondent immediately complete his Certificate III qualification.
26. Having regard to all of the evidence, when viewed through the prism of the reserve with which the second appellant's evidence should be approached, I am not satisfied that it was demonstrated that the second appellant's evidence that she genuinely believed that she had been misled by the respondent about his Certificate III qualifications in a conversation on 5 June can be rejected.
27. As to the third of the matters listed at [81] above, the second appellant gave evidence that she believed that from November 2015 the respondent had not been truthful with her.
28. The second appellant's evidence of this belief was clear. She was told by an assessor, Ms Payne, that the respondent had failed three or four TAFE subjects. She had not been told of that matter by the respondent. The second appellant gave evidence that she "nearly had a heart attack". The second appellant believed that she spoke to the respondent about that matter immediately. The respondent said he was trying to speak to Ms Burdon from TAFE (who is a participant in the email exchanges addressed below) about the matter. The respondent gave evidence that he had been assessed by Ms Payne around November 2015 and "she just failed me". He agreed he subsequently spoke to the second appellant about his failures.
29. The contemporaneous evidence strongly supports a finding that the second appellant believed that from November 2015 the respondent had not been truthful with her. An email sent to Ms Burdon (a head teacher at TAFE) by the respondent reads: "Hi Cassie, I have spoken to [the second appellant] (my employer) about the traineeship program. Her response was that she was unsure if she wanted to go ahead with me due to previous bumps in my Cert III section of the course. She told me that she would have to think about it, however I told her that I was emailing you today after the meeting with her with her response so she has asked me to ask you to call her on [phone number] on Tuesday the 9th of February anywhere between 9am - 2pm so she is able to understand where I am coming from from the head teachers' perspective. Also, Karen informed me that she really needed me to finish the Cert III section of the course in one month. This being the case, what is my best way forward now? Kind regards - Matt"
30. I conclude on the basis of that email that: 1. prior to February 2016 the respondent and the second appellant discussed the failures of the respondent in his TAFE course; 2. the second appellant was unsure about whether she wished to allow the respondent to participate in the traineeship program involving the Centre due to "bumps" - being failures - in his Certificate III course; 3. the second appellant informed the respondent in late 2015 that "she really needed" him to finish the Certificate III section of the course "in one month".
31. The primary judge found that if the second appellant had "truly felt" that the respondent had been untruthful regarding his studies she would most probably have ventilated such a sentiment to him in writing: at [134]
32. Despite the advantages of the primary judge this finding is contrary to compelling inferences available from the contemporaneous documents. It is plain that the respondent had been told by the second appellant between November 2015 and February 2016 that she needed him to finish the Certificate III course as soon as possible. A deadline of one month was set. The second appellant told the respondent, according to his own email, that she was no longer sure she was willing to participate in a traineeship program with the respondent.
33. In an employment context, to require an employee to complete a qualification within one month, to tell that employee that the employer was unsure whether she wished to go ahead with a traineeship program and to identify the reason for that state of mind as being the employee's failures in his TAFE course, strongly supports the evidence of the second appellant that she believed that from November 2015 the respondent had not been truthful with her. The second appellant was expressing in strong terms her dissatisfaction with the respondent's performance and progress in the Certificate III course. The respondent recorded that expressed dissatisfaction in contemporaneous documents. This is entirely consistent with what the second appellant says was her state of mind. She gave evidence that she had been told that the respondent had completed that qualification (subject only to completing immaterial days of work experience) and was shocked and dismayed when she learnt that was not the case. She took immediate steps to remonstrate with the respondent. She told the respondent that as a result she was unsure whether she wished to go ahead with a traineeship program with him.
34. The contemporaneous documents support a finding that the second appellant believed that from November 2015 the respondent had not been truthful with her. I am satisfied that the second appellant believed that from November 2015 the respondent had not been truthful with her about matters relating to his qualifications.
35. As to the fourth matter listed at [81] above, the second appellant gave evidence that she believed that the respondent had not been truthful concerning TAFE's recommendations about his study options. The contemporaneous evidence is consistent, and only consistent, with the second appellant's stated belief.
36. On the evening of 10 March 2016, less than one month before the matter complained of, the respondent emailed the second appellant and stated that "[a]s discussed today" the respondent had been in contact with "[Ms Burdon] at TAFE and was told the best option to complete my Certificate III was to commence TAFE next Wednesday for the remaining Semester … [a]s I have no choice I am no longer able to work Wednesday's [sic] until the end of Semester". The respondent concluded, "I have no option this semester as I need to complete my Certificate III as soon as possible as we have previously discussed." (Emphasis added.)
37. From this email I conclude: 1. prior to this email exchange the second appellant had expressed concern to the respondent about him obtaining his Certificate III qualification as soon as possible; 2. in the month immediately prior to the matter complained of, the second appellant and the respondent had agreed that the respondent needed to complete his Certificate III as soon as possible; 3. prior to this email the respondent knew that he had been rostered by the appellants to work on at least two Wednesdays during the remainder of the semester; 4. the respondent told the second appellant that by reason of TAFE's requirements he had "no choice" and would be unable to work on those rostered Wednesdays.
38. On 11 March 2016, the second appellant responded to the respondent's email. This email was copied to Ms Burdon. In that email, the second appellant said she had "just got off the phone to" Ms Burdon, and that Ms Burdon informed her that the respondent was given two options for progressing his Certificate III course: one was to study on Wednesdays until the end of the semester and the other was to complete a "cluster course" at the end of semester. The second appellant stated that she "was disappointed to learn" that the respondent "never mentioned to Cassie that we had a staff member away and would need to work the next two Wednesdays, when I specifically told you to let Cassie know BEFORE you met with her, in case the Wednesday was one of the options offered". From this email I conclude: 1. the respondent had been given two options by TAFE to complete his Certificate III qualification; 2. the respondent had been told, prior to speaking to TAFE, that the appellants required him to work on Wednesdays for the next two weeks due to staff absences; 3. the respondent had been told by the second appellant to let Ms Burdon know of that Wednesday requirement before he met with her; and 4. the respondent failed to tell Ms Burdon that he was required to work at the Hubba Bubba Centre over the next two Wednesdays.
39. On 11 March 2016, Ms Burdon emailed the respondent and copied in the second appellant. In this email, Ms Burdon stated that the respondent "elected to do the Wednesdays, but you did not inform me that you had prearranged work commitments." Ms Burdon told the respondent that "[i]t is really important to communicate effectively with both [the second appellant] and myself. We have both invested a lot of energy and time in attempting to support your study but we must all communicate honestly and effectively for this to happen". Ms Burdon recommended that the respondent discuss "the two options given to you with Karen and ensure that you come to an appropriate decision based upon your learning needs and work commitment". From this email I conclude: 1. the second appellant had, to the contemporaneous observation of a head teacher at TAFE, "invested a lot of energy and time in attempting to support [the respondent's] study"; and 2. the respondent had not communicated honestly and effectively with TAFE and the second appellant about his study commitments, at least in relation to the Wednesday scheduling issue the subject of the earlier emails.
40. On 13 March 2016, the respondent emailed the appellants. In that email he asserted that he was directed "without consultation" to work Mondays and Wednesdays in addition to his usual days. He stated that he tried "on several occasions" to say that he could not work on Wednesdays "due to my TAFE commitments. As we have discussed on multiple occasions my goal is to finish my Certificate III as soon as possible." The respondent resigned his employment, effective from 15 April 2016. He also stated that he would not be able to work on the following Wednesdays due to TAFE commitments. From this email I conclude: 1. the respondent knew that he had been rostered to work on Wednesdays prior to speaking to Ms Burdon about completing his Certificate III qualification; 2. the respondent chose not to tell Ms Burdon about his Wednesday commitments, as he had been directed by his employer to do, when he spoke to her; 3. the statement in the email of 10 March 2016 "[a]s I have no choice I am no longer able to work Wednesday's [sic] until the end of Semester" was not correct.
41. I am persuaded on the basis of this contemporaneous evidence that the respondent had not been truthful with the second appellant concerning TAFE's recommendations concerning his study options. Further, I accept on the basis of this contemporaneous evidence that the second appellant believed that the respondent had not been truthful about TAFE's recommendations concerning his study options.
42. As to the fifth matter listed at [81] above, the second appellant gave evidence that she believed that the respondent had not been truthful with her about his non-compliance with the Centre's babysitting policy.
43. A disproportionate amount of time was spent on this issue at the trial. In relation to malice, in order to make a finding about the second appellant's understanding of the respondent's compliance with the policy, it was not relevant to determine the true construction of the policy.
44. The respondent's evidence, which I have set out at [84] and [85] above is consistent with the second appellant believing that the respondent had not been truthful with her about his non-compliance with the Centre's babysitting policy.
45. I am satisfied that the second appellant believed that the respondent had not been truthful with her about non-compliance with the babysitting policy.

Particulars of malice

1. I have set out at [32] above the particulars of the respondent's pleading of express malice. None of those particulars was established by the respondent.

Particular a)

1. The first particular of express malice, that the appellants were motivated by a desire to injure the respondent, was not established. No finding in those terms was made by the primary judge. No finding to this effect was sought by notice of contention. On all of the evidence, I would not make any such finding.
2. The second appellant gave evidence of her motivation in sending the email. It was put to her in cross-examination that "striking out at [the respondent] in revenge was part of your motivation." Her answer was as follows: "A. Not at all I'm a mother, I have a son I bring him up every day to tell the truth and the person. I was not out for revenge. All I ever wanted to do was try and help him gain his qualifications into the right thing and it was never my intention to be malicious at all, ever. It's not my personality and is not who I'm bringing my son [up] to be. It's not fair."
3. No basis was shown, approaching the second appellant's evidence in the reserved way the primary judge did, to reject that evidence.
4. I am not satisfied that the respondent proved that the second appellant in publishing the email was motivated by a desire to injure the respondent.

Particulars b)(1),(2)(3) and (4)(a),(b) and (c)

1. The second matter pleaded as establishing malice was that the appellants knew that it was false to claim in the matter complained of that the respondent was dismissed when they knew he had resigned and had not been dismissed from his employment.
2. This allegation fails at the outset. Whilst it is correct that the respondent had notified the appellants of his resignation, with effect from 15 April 2016, he was dismissed from his employment on 24 March 2016. The primary judge found at [262] that the respondent was "peremptorily terminated" by the second appellant on that day. On the evidence there was no other finding available. The respondent agreed that he was escorted from the premises at the end of the day on 24 March 2016.
3. The respondent failed to prove that it was false to claim in the matter complained of that the respondent was dismissed when they knew he "had resigned" and "had not been dismissed from his employment".

Particular b)(4)(d)

1. Despite the infelicitous pleading, I will treat as two separate allegations of malice the matters identified in particular b)(4)(d) as being: 1. the appellants knew that the allegation that the respondent had lied to the appellants or misled them to believe that the respondent had a Certificate III was false; 2. the appellants knew that the respondent had recently left school and enrolled in a Diploma course at TAFE and could not have completed that course or a Certificate III at any time in 2015.
2. The real problem with the way this issue was dealt with below was confusion between the justification plea and the qualified privilege defence. The appellants did not establish their defence of justification.
3. That conclusion says nothing about the state of mind of the second appellant as at the date of publication of the matter complained of, nor her evidence that she believed that this had occurred.
4. I have already discussed the evidence about each of these matters at [89]-[101] above. Having regard to all of the evidence, including the documentary evidence there referred to, I am not satisfied that it was demonstrated that the second appellant's evidence that she genuinely believed that she had been misled by the respondent about his Certificate III qualifications in June 2015 can be rejected. It was not proven that the appellants knew that the allegation that the respondent had lied to the appellants or misled them about his Certificate III qualification was false. Neither was it shown that the appellants knew that the respondent "could not have completed that course or a Certificate III at any time in 2015".
5. Despite the finding of the primary judge that it was unreasonable or unfair for the second appellant to hold the views that she swore she held on these subjects, I am not satisfied to the high standard required that malice was established in either of these respects.

Particular b)(4)(e)

1. The recklessness alleged by the respondent in the amended reply was limited to the matters described in particular b)(4)(d) and was not alleged to be recklessness so gross as to constitute wilful blindness of the kind described in Roberts v Bass at [84]. All that was alleged was that the appellants were reckless, in that they did not check their own records in relation to the status of the respondent's Certificate III qualification before publishing the matter complained of. That is not an allegation of recklessness, let alone gross recklessness amounting to wilful blindness.
2. For the conclusion of gross recklessness amounting to wilful blindness to be drawn, it would need to be demonstrated that the second appellant had, to adopt the language of the High Court in R v Crabbe (1985) 156 CLR 464; [1985] HCA 22 at 470 (quoted at [84] in Roberts v Bass per Gaudron, McHugh and Gummow JJ), deliberately refrained from making enquiries for fear that she would learn the truth.
3. No such state of mind on the part of the appellants was established or found by the trial judge. To the contrary, the primary judge appeared to accept the second appellant's evidence that she "had not intended any malice in sending the email in question".
4. The respondent failed to establish gross recklessness as to amount to wilful blindness.

Other particulars

1. There is nothing in the manner and extent of publication including the language used which supports a finding of malice. The fact that the respondent was no longer employed by the appellants at the time the matter complained of was sent does not, either alone or in combination with any other matters, establish malice.
2. To the contrary, the terms of the matter complained of are themselves inconsistent with a finding of malice as noted above.

Conclusion on common law qualified privilege

1. The respondent failed to establish malice. The primary judge should have concluded that the defence of qualified privilege had been established and was not defeated by the plea of malice. The statement of claim should have been dismissed with costs.

Damages

1. Despite my conclusion about the successful defence of common law qualified privilege I will address the subject of damages on a contingent basis. The primary judge's assessment of the plaintiff's damages may be summarised as follows: (a) Compensatory and aggravated damages $225,000.00 (b) Special damages $915.30 (c) Interest $12,054.92 Total $237,970.22

1. Sections 34 and 35 of the Defamation Act 2005 (NSW) provide: "34 Damages to bear rational relationship to harm In determining the amount of damages to be awarded in any defamation proceedings, the court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded. 35 Damages for non-economic loss limited (1) Unless the court orders otherwise under subsection (2), the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is $250,000 or any other amount adjusted in accordance with this section from time to time (the maximum damages amount) that is applicable at the time damages are awarded. (2) A court may order a defendant in defamation proceedings to pay damages for non-economic loss that exceed the maximum damages amount applicable at the time the order is made if, and only if, the court is satisfied that the circumstances of the publication of the defamatory matter to which the proceedings relate are such as to warrant an award of aggravated damages. [7] … … (4) The amount declared is to be the amount applicable under subsection (1) (or that amount as last adjusted under this section) adjusted by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the 4 quarters preceding the date of the declaration for which those estimates are, at that date, available. (5) An amount declared for the time being under this section applies to the exclusion of the amount of $250,000 or an amount previously adjusted under this section. … (8) A declaration made or published in the Gazette after 1 July in a year and specifying a date that is before the date it is made or published as the date from which the amount declared by the order is to apply has effect as from that specified date."
2. Without repeating what I recently said in Murray v Raynor [2019] NSWCA 274 at [92]-[95], there is an issue in this State about the fundamental approach to damages in defamation cases. Nevertheless, the parties in the present case were content to proceed on the basis that the law about damages in defamation was correctly stated in Bauer Media Pty Ltd v Wilson (No 2) (2018) 56 VR 674; [2018] VSCA 154.
3. Even on that approach, s 34 of the Defamation Act provides that the Court, in awarding damages for defamation, must ensure "that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded". The statutory maximum amount for non-economic loss under s 35(3), as at the date of the final day of hearing at first instance (7 December 2018) was $398,500.
4. If, contrary to the conclusions I had reached, the findings on liability had stood, the award of $237,970.22 was in my view plainly manifestly excessive.
5. The two cases relied upon by the appellants assist in reaching that conclusion: 1. In Association of Quality Child Care Centres of NSW v Manefield [2012] NSWCA 123 an email was sent to approximately 650 childcare centres by officers of an industry body. The Court of Appeal confirmed the first instance award of $150,000.00 in damages, including aggravated damages. 2. In Korean Times Pty Ltd v Un Dok Pak [2011] NSWCA 365, allegations were made to the effect that the plaintiff was under investigation by ICAC. The allegations were communicated in an article in a Korean language newspaper that had a circulation of approximately 6,000 copies. Nicholas J (with whom Beazley and Basten JA agreed) described the imputations as "grave" but reduced the initial verdict amount from $100,000 to $80,000.
6. The awards of damages in these cases demonstrate the manifestly excessive nature of the award made by the primary judge here. The email was sent to 35 people and not to 650 entities (Manefield) or circulated to 6,000 readers (Korean Times).
7. A further indication of the manifestly excessive nature of the award was that the primary judge accepted the evidence of the respondent's father that the respondent had recovered completely from the effects of the email after he completed stage 1 of the TAFE course. The characterisation of that evidence by the primary judge, that completion of stage 1 of the TAFE course marked the recovery from the "acute phase" of the respondent's "initial reaction" to the publication, does not alter my conclusion that this was a manifestly excessive award.
8. There was a failure by the primary judge properly to exercise the discretion in fixing the amount of damages. If I had concluded that the defence of common law qualified privilege had failed I would have awarded the respondent $40,000 as reflecting "an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded" as required by s 34 of the Defamation Act.
9. Aggravated damages are awarded where the defendant's conduct towards the plaintiff was improper, unjustifiable, or lacking in bona fides: Triggell v Pheeney (1951) 82 CLR 497; [1951] HCA 23; Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118; [1966] HCA 40 at 130. Hence, failure to apologise (Clark v Ainsworth (1996) 40 NSWLR 463; Randwick Labor Club v Amalgamated Television Services [2000] NSWSC 906 at [261]-[264]), conducting proceedings in a certain manner (Polias v Ryall [2014] NSWSC 1692 at [80]), and continuing publication (Cantwell v Sinclair [2011] NSWSC 1244 at [171] and [177]) may all result in an award of aggravated damages if such conduct was improper, unjustifiable, or lacking in bona fides.
10. The primary judge did not refer to the test for the award of aggravated damages nor make any findings that the appellants' conduct was in any way improper, unjustifiable, or lacking in bona fides. On the assumption that the finding of malice stood, it is possible that an award of aggravated damages would have been justified. In the present case, however, even if I had concluded that the finding of malice should not be set aside, the appellants' conduct towards the respondent was not improper, unjustifiable, or lacking in bona fides. Nothing in the trial record, including in the conduct of the failed justification defence, warranted an award of aggravated damages in this case.

Conclusion and proposed orders

1. For the foregoing reasons I propose the following orders: 1. Appeal allowed; 2. Set aside the orders of the primary judge and in lieu thereof order: 1. Statement of claim dismissed; 2. Plaintiff to pay the costs of the defendants. 1. Respondent to pay the costs of the appellants of the appeal.
2. WHITE JA: I agree with Payne JA.

Endnotes

1. Judgment at [257]-[264].
2. Judgment at [257].
3. There were two paragraphs numbered 8 in the defence: the relevant pleading to imputation (b) was in the first so numbered.
4. Civil Procedure Act 2005 (NSW), s 56.
5. Nothing turns on there being two emails. The evidence was that this was caused by a computer problem being suffered by the second appellant.
6. For example Roberts v Bass at [98] - "When the plaintiff can only prove that the defendant lacked a belief in the truth of the defamatory material, however, it will be no more than evidence that may give rise with other evidence to an inference that the publication was actuated by malice."
7. The present amount declared for the purposes of s 35(1) is $407,500: New South Wales, New South Wales Government Gazette, No 55 of 31 May 2019, p 1665.

Amendments 03 June 2020 - [21], [146] - case citations adjusted [63], [82], [135], [140], [150] - corrections to typographical errors [99], [128] - corrections to quotes [122], [126], [129], [134] - change style of reference to particulars for consistency with [32] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 June 2020