Lam v Nationwide News Pty Ltd

Lam v Nationwide News Pty Ltd - [2000] NSWSC 792 - NSWSC 2000 case summary — Zoe

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The plaintiff's history 7 The plaintiff was born in Saigon in January 1963 and escaped from Vietnam and went to Canada, arriving there at the age of fourteen. In the course of her escape the plaintiff met her future husband but he went to Australia and settled here. The plaintiff was educated in Canada and having achieved Higher School Certificate standard in 1982 did a business diploma course between 1983 and 1986. In 1987 the plaintiff made contact with her husband again and visited him in Australia in 1987. In the following year the plaintiff married her husband in Canada and came to settle in Australia with him in December 1988. 8 It is clear from the evidence that the plaintiff has been very industrious in this country. The plaintiff undertook real estate studies and attended the Meadowbank College where in 1988 she succeeded in obtaining an advanced certificate of real estate (She only arrived here in December 88). The plaintiff worked with L.J. Hooker's at Auburn and obtained a real estate agent's licence in 1991. The ownership of the estate agency changed and Bellenden Pty Limited became the proprietor, trading under the name of CIA Real Estate. The plaintiff became a director of Bellenden on 14 February 1992 and the licensee in charge on 5 June 1992. 9 There were, at times relevant to this action, some six employees in CIA, including the plaintiff herself. The plaintiff's responsibility was in selling real estate, but the other feature of the company's business was the management of properties. Ms Vanessa Basara was involved in that side of the operations. At times relevant to this cause, the plaintiff was one of two directors, the other director being one Shawkey Salah. Mr Salah and his wife were the only shareholders of the company and Mrs Salah was also the secretary. The plaintiff's evidence was to the effect that she had no financial interest or shareholding in the company and her only income from this source was as an employee. Mr Salah gave evidence to the like effect and I am satisfied that the plaintiff had no financial interest in Bellenden by shares or otherwise. Indeed, the evidence disclosed that the only shareholders of Bellenden at any relevant time were Mr Shawkey Salah and his wife. 10 I mentioned earlier that the plaintiff has been industrious in Australia. The plaintiff decided to seek election in the local council and was first elected to the Auburn Council in 1991, being elected as an independent. The plaintiff said, and I accept, that she decided to stand for council with a view to seeking to assist migrants. Apart from her involvement in the Auburn Council since 1991, the plaintiff has involved herself in other community activities. These have included a position on the management committee at the Migrant Resource Centre, presidency of the Auburn Asian Welfare Centre and involvement in an organisation assisting the elderly on welfare issues. 11 Having been elected to the Council in 1991 the plaintiff succeeded again at the 1995 elections, and following re-election was elected as the Deputy Mayor in 1995, holding that post from September 1995 until September 1996. At the next election for the positions of Mayor and Deputy Mayor in September 1996 the plaintiff was unsuccessful. However in September 1997 she became Deputy Mayor again and presently holds the office of Mayor. 12 I turn now to consider what happened before the publication complained of on 9 May 1996.

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The Council decides to engage CIA Real Estate 13 As para 2 of the publication asserts, the Council owned a number of properties which, prior to 1996, were managed by more than one agent. A decision was made by Council in March 1996 to call for expressions of interest for the management of the Council's rented properties and this led to advertisements being placed in a local newspaper. These advertisements in turn prompted a number of expressions of interest to be communicated by various estate agents. It appears that one of these was the plaintiff's employer, although the plaintiff asserted that she was party to no discussion at CIA about any application by CIA to the Council and was unaware of CIA's interest before seeing a report prepared by the Director of Finance for the Council. Ms Vanessa Basara was the property manager employed by CIA in 1996 and gave evidence that it was on her initiative that CIA tendered to manage the Council properties. The tender was submitted after Ms Basara had consulted Mr Salah. Ms Basara prepared and submitted the tender and said that the plaintiff was not consulted about the matter and had no involvement in the tender preparation. Mr Salah gave evidence confirming that the tender process was undertaken following discussion between himself and Ms Basara and Mr Hunt, who was working with the plaintiff in the sales section of CIA at the relevant time, said that the plaintiff played "no role whatsoever" in putting together and submitting the tender. I accept the evidence given by Ms Basara, Mr Salah and Mr Hunt to the above effect. 14 The evidence in point which I have reviewed together with the evidence of the plaintiff, satisfies me that the plaintiff was not involved in any way in the preparation or submission of CIA's tender to Council and that she was not involved in any discussions within CIA concerning the decision taken to tender. I accept the plaintiff's evidence that she first became aware of CIA's interest when she saw the report to which she referred which was prepared for the Council meeting for 1 May 1996. 15 Several days before the Council met on 1 May 1996 Mr Brown submitted a confidential report to be considered by the members of the Finance and Works Committee, and the plaintiff was one such member. The report recommended that the Council engage CIA Real Estate to manage its current and future rental properties for a period of three years. Having received that report the plaintiff said, and I accept, that she sought advice from ICAC and from the Local Government Association. The plaintiff asserted, and I accept, that from both sources she was advised that the course she should adopt was to declare her interest and to refrain from voting. This I am satisfied the plaintiff did. There was a confidential meeting, that is to say one in closed session, of the Finance and Works Committee on 1 May 1996. The report on that meeting (Exhibit E) records the following, in relation to the relevant subject matter: "At this stage Councillor Lam declared a pecuniary interest in the matter, refrained from debate and refrained from voting. A motion sponsored by Councillor Keegan and seconded by Councillor Moore that Council maintain its current Property Management arrangements was, upon being submitted to the meeting, declared lost. A motion sponsored by Councillor Borluk and seconded by Councillor Jones that the report be adopted was, upon being submitted to the meeting, declared won. RECOMMENDED that the report be adopted." 16 The recommendation of the Finance and Works Committee was adopted then by the full meeting of the Council in open session. I find that meeting followed immediately upon the meeting of the Finance and Works Committee. The minutes on the full meeting of Council which was open to the public record but the following (Exhibit F): " Finance & Works Committee Meeting of even date : RESOLVED that the report of the Finance & Works Committee Meeting of even date be adopted. Matter Arising In reply to Councillor Keegan the Mayor advised that, in relation to item 4 of the Director's Report, Corporate & Financial Services to the Committee, it would be necessary for a rescission motion to be lodged if the Councillor wished to maintain the current arrangements for the Management of Council's Properties." 17 The plaintiff was cross examined about what occurred in the confidential session of Council on 1 May 1996 and in the open session that followed. Her recollection of what was said and by whom appeared to be vague and was not altogether satisfactory. Ms Milohanic, in evidence to which I shall shortly refer, recorded what Cr Keegan said in the open session and I accept her evidence about that as being accurate. 18 However, I am satisfied that the plaintiff did declare her interest, that she did refrain from debate and further that the plaintiff did refrain from voting at both relevant meetings on 1 May 1996.

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The involvement of Ms Milohanic 19 Sonia Milohanic is a journalist who was employed at the Parramatta Advertiser in 1996 by which time she had had some five years experience in journalism. One of her responsibilities with the Parramatta Advertiser was to attend meetings of the Auburn Council with a view to writing on what was newsworthy arising from such meetings. Ms Milohanic attended the meeting on 1 May 1996 and recorded what Cr Keegan had to say. Cr Keegan was known by Ms Milohanic to be an experienced councillor who in the past had served as mayor. Ms Milohanic recorded in her notebook (Exhibit 9) what the councillor said and I accept that Exhibit 10 is an accurate typescript of what Ms Milohanic recorded at the meeting: "CR TERRY KEEGAN CIA…one of the councillors is a director and licensee of that organisation. I believe that council has a legal obligation to unfortunately disregard that application from the councillor. We, under the Local Government Act, can't accept the quotation. Regardless whether Cr Lam has declared a pecuniary interest in the matter it goes further. Her company will get financial gain through this action. Council would be a loser as well. We should exclude ourselves as councillors from applying in the first place for tenders such as this. If we do carry this resolution it would affect the majority of councillors. (moved recommendation that the status quo remain) MAYOR PAT CURTIN: I can't accept that. You are well aware of the status of rescission motions if you want to rescind that. I recommend you don't go any further. KEEGAN: I will go as far as I like. CURTIN: No you won't." 20 Ms Milohanic considered the topic addressed by Cr Keegan to be newsworthy, and the following day received a telephone call from Helen Lane, a former councillor working for The Professionals Real Estate Agency. Ms Lane revealed her agency was an unsuccessful tenderer, but complained about the CIA tender having regard to the plaintiff's position on the Council. Ms Lane revealed that the licensee of the agency where she worked, Mr Joseph Rodi, was making a submission to ICAC. Ms Milohanic took notes of the conversation with Ms Lane and I accept that Exhibit 11 is an accurate transcript of those notes. Ms Milohanic subsequently obtained a copy of the letter written by The Professionals to ICAC dated 2 May 1996. This became Exhibit 8 and reads: "I refer to the above mentioned matter and our telephone conversation of the 1st May, in bringing to I.C.A.C's attention what is in my opinion unethical and improper. The submission by C.I.A. Real Estate to manage council's rental properties when the Licensee and Director of CIA Real Estate is an elected representative on the same council, holding the position of Deputy Mayor (Councillor Le Lam). Our question to you is to clarify if such conduct is acceptable and ethical and should this company be eligible to make the submission. I further note that the tender was awarded to C.I.A. Real Estate at Councils Meeting on the 1st May, 1996, even though the Councillor …declared an interest and refrained from voting. I would appreciate your immediate attention and investigation into the above mentioned matter. Awaiting your urgent reply." 21 Other sources for what subsequently appeared in the newspaper item on 9 May 1996 were identified by Ms Milohanic:

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(d) A further circumstance to be considered on the issue of reasonableness in relation to the publication complained of is the layout of this item. Ms Milohanic had no responsibility for this and qualified her assertion as to the fairness and accuracy of the article by excluding the headline from that assertion. I do not lose sight of the fact that the jury rejected the second imputation which it was called upon to consider: "That she was guilty of immoral conduct in CIA Real Estate's procurement of a contract with the Auburn Council" , but it by no means follows that the banner did not influence the jury in concluding that the imputation upon which the plaintiff succeeded was conveyed. When Ms Milohanic was cross examined about the banner and the layout, the witness gave this evidence at T243: "Q. Do you think that's fair to divide the article up with the nasty parts on page 1 and any description of an explanation on page 2? A. I'm sure it could have been done in another way. It could have been. As if I was reading it, just as a reader, I probably wouldn't think it was fair… Q. Yes, in your view it is certainly unbalanced to put all of the nasty stuff on page 1 and the explanation from the person spoken about on page 2? A. If it was done with malice that would be unfair. Q. I am asking you, regardless of the intention, it is simply as a fact unbalanced, is it not? A. Yes." I do not consider that the banner was a fair banner nor do I consider that the layout of the article keeping what might be considered favourable towards the plaintiff to the second page (where, indeed, it appears under a different heading) was fair. The banner and the layout, in my opinion, are matters to be taken into account in determining the issue of reasonableness. 30 The matters urged upon me by Mr Campbell and which I have above considered lead me to the conclusion that the making of the publication was not reasonable in the context of the defence of common law qualified privilege and, accordingly, this defence fails.

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Comment 36 Although the defendant pleaded comment of a stranger so as to enliven s 34 of the Defamation Act, and alternatively comment of a servant or agent for the purposes of s 33, Mr Hale has not contended that the comment is that of a servant or agent. Rather he has identified the comment as that of J.A. Rodi in claiming "the tender was unethical and improper" (para 7), together with the added words in para 8. Mr Hale has, in addition, referred to what Cr Keegan said in para 11. 37 Section 31 of the Act confines the availability of the defences in Div 7 to comment that relates to a matter of public interest. I am satisfied that the subject matter to which the imputation relates is a matter of public interest. There is a very obvious public interest in the administration of local government and the conduct of those involved in such administration. Any impropriety in the process of tendering for council business, especially where it involves a deputy mayor, is plainly a matter of public interest. 38 Section 30(3) limits the availability of the defences under Div 7 to comment, and makes such defences available only if "(a) the comment is based on proper material for comment; or (b) the material on which the comment is based is to some extent proper material for comment and the comment represents an opinion which might reasonably be based on that material to the extent to which it is proper material for comment." 39 Where matter complained of includes both comment and the material upon which comment is based, a defence as to comment is not a defence as to the material upon which the comment is based: s 35 of the Defamation Act. Further, the defence of comment does not extend to any matter that does not indicate sufficiently that it purports to be comment as opposed to a statement of fact: see Hunt v Star Newspaper Co. Limited [1908] 2 KB 309 at 319-320; Thompson v Truth and Sportsman Limited (1934) 34 SR 21 at 24-25. 40 One of the difficulties in considering this defence is that it is not known precisely how the jury determined that the imputation which it found established arose. The article did not limit itself to expressing comment and clearly there was material upon which the comment was based for the consideration of the jury as well. 41 However Mr Hale referred to a number of cases in which consideration has been given to the principles to be applied in determining whether an imputation is conveyed as fact or comment. In particular, see Kemsley v Foot [1952] AC 345 per Lord Porter at 356; Pervan v North Queensland Newspaper Co. (1992-1993) 178 CLR 309 per McHugh J at 340-342; and Goldsborough v John Fairfax and Sons Limited (1934) 34 SR 524 per Jordan CJ at 531-532. 42 If one treats paras 7, 8, 11, 12 and 13 as comment, as Mr Hale has submitted such paragraphs should be treated, and if it be assumed that the imputation which the jury found to have been conveyed was conveyed as comment as distinct from fact, what s 30(3) requires is that comment is based upon proper material for comment or, alternatively, material on which the comment is based is to some extent proper material for comment and the comment represents an opinion which might reasonably be based on that material to the extent that it is proper material for comment. 43 Section 30(2) of the Defamation Act renders a statement of fact which is matter of substantial truth proper material for comment. Conversely a statement of fact which is not a matter of substantial truth is not proper material for comment. The paragraphs in the article outside those paragraphs identified by Mr Hale as comment include para 1 which describes the successful agency as the plaintiff's agency ("the Deputy Mayor's real estate agency"), and this is not a matter of substantial truth. Paragraph 12, containing comment by Councillor Keegan, seems to be based upon the material in para 1, at least in part, and the comment is expressed to relate to "her company". As I observed earlier, nowhere does the material contained in the article alert the reader to the fact that the plaintiff had no financial interest in the company. Nowhere in the article is there material which alerts the reader to the fact that the plaintiff played no part in the decision to tender, or to the fact that the plaintiff played no part in the tender process. The closest it goes to addressing the plaintiff's non-participation is in para 17, but plainly this does not go far enough. Part of the material is the banner headline, which I do not take merely to be an extract from the words attributed to Councillor Keegan in para 11 of the item. True it is that he there uses the words "immoral" but the context in which he used the word does not appear in the headline and he did not use the word as descriptive of a "deal". Notwithstanding that the word "immoral" is put in inverted commas in the headline, it seems to me that the banner headline may be taken to be a statement of fact. If it is not to be so treated, then it is not the comment of a stranger identified in the article and can only be regarded as the comment of the subeditor whose responsibility it was to settle the headline. If it be treated as a statement of fact, it does not qualify as proper material for comment because it is not a matter of substantial truth. 44 In my opinion, the defence of comment has not been established.

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Damages 45 The plaintiff has established her claim to damages and I now turn to their assessment. 46 In the assessment of damages the Court must "ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded": s 46A(1) of the Defamation Act. The "relevant harm" is the harm suffered by the plaintiff: s 46(1)(a). 47 There is in this case no claim for damages for economic loss and in arriving at an assessment of damages for non economic loss, the Court must "take into consideration the general range of damages for non economic loss in personal injury awards": s 46A(2). As that sub-section recognises, damages may be assessed in cases involving personal injury on different bases, depending on where and in what circumstances injury was suffered by the plaintiff. Damages for personal injury may be determined in accordance with common law principles, or under a different regime if injury is sustained in a motor vehicle accident, or under yet a different regime if injury is sustained in the course of employment. Recognition of these differing bases for assessment does not facilitate the task which s 46A(2) requires me to undertake. 48 The plaintiff's cause of action is in respect of the imputation identified in para 2 of this judgment, namely that the plaintiff "is reasonably suspected of obtaining a dishonest financial benefit for herself through her office as Deputy Mayor of the Auburn Council in CIA Real Estate's procurement of a tender with that Council." 49 Mr Hale submitted that the imputation should be considered as a "low level one", since it is founded only upon reasonable suspicion. He submitted further that although the evidence establishes the publication prompted much discussion, there was no evidence that the plaintiff suffered any economic loss as a result of it, and he referred to the evidence of Mr Hunt that not only was the plaintiff "very, very highly regarded" before the publication but that she still is. The plaintiff did not lose office as a councillor after this publication but was re-elected in 1999. Whilst the plaintiff failed to be elected as Deputy Mayor in September 1996 , I accept Mr Hale's submission that the evidence does not permit me to conclude that this failure was due to the offending publication and the plaintiff did become Deputy Mayor again in 1997 before her subsequent election as Mayor. 50 Whilst it has not been proved that the plaintiff's career has been adversely affected by the publication, and whilst it has not been proved that the plaintiff suffered any economic loss, harm is nevertheless to be presumed and in assessing damages I must have regard not only to any injury to the plaintiff's reputation but to the hurt the plaintiff suffered. I must also be mindful of the need for the plaintiff's vindication; the damages that are awarded should suffice "to convince a bystander of the baselessness of the charge": Broome v Cassell & Co Limited [1972] AC 1027 at 1071. 51 The plaintiff said that she became aware of the publication on the day it was made and when she saw the article was very angry and shocked. The plaintiff also considered that the article was unfair both in layout and in content. I earlier referred to the concession made by Ms Milohanic in cross examination concerning the banner and the layout in para 29(d) above, and I regard the plaintiff's response as a reasonable one. I accept that her distress was increased by the responses of others conveyed to her. I find that the responses included the following:

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(iv) others who addressed her about the subject matter of the article included other estate agents in the area, and people in commercial outlets such as the local chemist shop, the local bread shop and the Commonwealth Bank. 52 I am satisfied by the evidence in point that the plaintiff felt aggrieved by the publication and by her experience in having to face many people who raised the subject matter of the publication with her and to whom she perceived the need to protest her innocence of any impropriety and to whom she endeavoured to do just this. 53 I am mindful of course that the plaintiff is not to be compensated for the cause of action based upon the imputation which the jury was not satisfied had been conveyed (referred to in para 29(d) above), but nevertheless I am satisfied that the publication in question occasioned the plaintiff much distress. I accept that the plaintiff was, by reason of her background, particularly sensitive to her reputation and that she entertained deep and genuine concern about the impact this publication may have had upon that reputation. Further, I am satisfied by the evidence of the plaintiff and her husband that the publication affected the relationship between the plaintiff and her husband. 54 The plaintiff was prompt to see her solicitors after this publication and was aware of their letter of 9 May 1996 demanding a retraction and apology, and of the reply from the defendant's solicitors dated 10 May 1996 expressing the defendant's refusal to meet such demand, as well as the assertion in that letter of the availability of "strong defences". I am satisfied that the defendant's behaviour contributed to the plaintiff's hurt feelings and that the hurt was prolonged by the inevitable delay in the matter coming on for hearing and by the conduct of the defendant's case. At the same time I remind myself that a failure to apologise may not be relied upon as a matter going to aggravated damages: Carson v John Fairfax & Sons Limited (1993) 178 CLR 44. 55 I have regard to the extent of the publication referred to earlier, and I am satisfied for the purposes of s 47 of the Defamation Act that the imputation was not true or a matter of substantial truth. 56 Having reflected on all the evidence in the case and upon the various submissions of counsel, written and oral, I have concluded that I should award damages in the sum of $70,000. 57 That assessment attracts interest and it is agreed that I should award interest at the rate of two percent per annum, and I propose to award interest at that rate on the total damages since I do not regard the case as one that attracts compensation for the future, nor have I assessed damages on the basis that it does. 58 I calculate interest in the sum of $5950 (four and a quarter years) and there will therefore be judgment for the plaintiff in the sum of $75,950. 59 I reserve the question of costs and will entertain submissions as to costs on a date to be arranged with my associate. **********

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Judgment (44 paragraphs)

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Cases Cited (4)

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