Supreme Court of the ACT|1995-06-05|Before: Higgins J, Gleeson CJ, Kirby P, Clarke JA

Lenox Hewitt v Queensland Newspapers Pty Limited [1995] ACTSC 54 (5 June 1995)

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Defamation - newspaper article alleging criminal activity by plaintiff - possible interpretations of article - nature of imputations conveyed to ordinary reasonable reader by article - imputation of existence of sufficient evidence to put plaintiff on trial in respect of criminal charges - imputation of "bad faith" on behalf of plaintiff in relation to debt - false accusations of criminal conduct and lack of good faith in financial dealings - aggravation by refusal to publish apology.

Damages - compensatory damages for injury to reputation and damage to feelings - factors relevant to calculation - damage suffered exacerbated by plaintiff's hitherto unblemished character and high reputation - need for plaintiff to be vindicated - extent of circulation or publication of derogatory matter - potential for great harm to plaintiff's reputation - damages for aggravation to be distinguished from punitive damages - failure to publish apology - continued failure to apologise and persistence in an unjustifiable defence.

Defamation Act 1958 (NSW), s5

Defamation Law (Qld), s4

Lewis v Daily Telegraph Ltd (1964) AC 234

Baffsky v John Fairfax and Sons (1991) 106 FLR 21

Evans v John Fairfax and Sons Ltd and Ors, unreported, Supreme Court,

Australian Capital Territory, Higgins J, 12 February 1993

Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293

Sergi v ABC (1983) 2 NSWLR 669

Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36

Whelan v John Fairfax and Sons Ltd (1988) 12 NSWLR 148

Rigby v John Fairfax Group Pty Ltd (1994) A Def R 52,005

Black v Houghton (1966) Qd R 435

Foley v Hall (1891) 12 LR (NSW) 175

O'Connor v Skehan (1903) QWN 43

McCarron v Boree Shire Council (1971) 1 NSWLR 638

Ratcliffe v Evans (1892) 2 QB 524

Hall-Gibbs v Dun [1910] HCA 66; (1910) 12 CLR 84

Dawson Bloodstock Agency Pty Ltd v Mirror Newspapers Ltd (1979) 1 NSWLR 16

Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1

Hewitt v WA Newspapers (1976) 17 ACTR 15

Jools v Mirror Newspapers Ltd (1984) 56 ACTR 1

Carson v John Fairfax and Sons Ltd [1993] HCA 31; (1993) 178 CLR 44

Humphries v TWT Ltd [1993] FCA 577; (1993) 120 ALR 693

Australian Consolidated Press Ltd v Ettinghausen, unreported, NSW CA,

Carson v John Fairfax and Sons Ltd (1994) 34 NSWLR 72

Stevens v Head [1993] HCA 19; (1993) 176 CLR 433

MPA (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657

Hallet v Shoevers (1992) 109 ACTR 1

Counsel for the Plaintiff: Mr T D F Hughes QC with

Mr T E F Hughes

Instructing solicitors: Freehill Hollingale Page

Counsel for the Defendant: Mr M Sexton

Instructing solicitors: Blake Dawson Waldron

There be judgment for the plaintiff in the sum of $80,500.00.

HIGGINS J On Saturday, 12 December 1992, the defendant published in its newspaper, "The Courier-Mail", an article in the following terms:

Hip operation stalls Hewitt credit trial

By JOE GALLAGHER

A HIP operation in London has delayed the trial of leading

Australian director and former Qintex executive Sir Lenox

Hewitt.

Hewitt is facing trial in the Brisbane District Court on charges

that he owes $89,824.98 on an American Express corporate card

which he used while working for Qintex before it collapsed in

October 1989.

It is understood a bankruptcy notice against Hewitt has been

filed with the Bankruptcy Court but such notices are not public

documents.

American Express International claims the money is owing on a

corporate credit card issued to Qintex Ltd and that Hewitt is

jointly liable for the debt.

Judge Healey last month ordered that the trial be extended

until December 18 after considering a letter written by

Hewitt's orthopaedic surgeon in England.

Dr Wroblewski, of Wrightington Hospital, said Hewitt must

remain on elbow crutches for three months as a result of a

recent hip operation and said it was necessary that he remain

in England for six weeks.

Hewitt, who has held numerous senior corporate positions, has

claimed he never entered in to any agreement with American

Express in Queensland for the use of the corporate card.

American Express claims the corporate card was used for a

number of international services including payments to the

Beverly Hills Hotel, California, the Casanova Restaurant and

Scotts Restaurant, Britain, and Hotel Bel Air, Los Angeles.

Hewitt has denied receiving a corporate card, but admitted

being issued a credit card for use while engaged in activities

in connection with his employment with Qintex.

He has also denied being given the conditions of use of the

company card.

Hewitt said the first he heard of any default on the card was

through a letter he received from American Express on May 9,

1990, alleging he owed $89,824.

2. That article was on the front page of the newspaper. A later edition of the newspaper used the word "director" in place of the word "executive" to describe the plaintiff's role with Qintex Ltd (Qintex). That amendment more accurately reflected the role that the plaintiff had played in Qintex, a company associated with the fugitive businessman, Mr Christopher Skase.

3. It appears that, as a director of Qintex, the plaintiff had the use of a credit card issued to Qintex by American Express International (Amex).

4. By January 1992, Qintex had failed. Amex took a civil action to recover the debt due in respect of the card. It had calculated that debt as totalling $89,824.98. It joined the plaintiff as a defendant, presumably on the basis that, although the card was issued in the name of Qintex, the plaintiff had some kind of legal obligation to pay the debt should Qintex not do so. I express no view as to the validity of that claim.

5. There had, however, been some publicity given to the proceedings. On 24 January 1992, the Courier-Mail published an article referring to the action in the following terms:

Knight denies huge debt

By JOE GALLAGHER

AMERICAN Express International claims one of Australia's top

businessmen, Sir Lenox Hewitt, owes it $89,824.

The company says the money is owing on a corporate credit card

issued to Qintex Ltd, which has since failed, to be used by Sir

Lenox.

Sir Lenox, who has held numerous senior corporate positions,

said in documents filed with the Queensland District Court that

he had never entered into any agreement with American Express

in Queensland for the use of the corporate card.

The card was allegedly issued while he was employed by Qintex

Ltd.

Sir Lenox said he had never received a monthly or any other

statement in respect to the card and said no payments were ever

made by himself to American Express in respect to the corporate

card.

American Express claims Sir Lenox was jointly liable with

Qintex to American Express for all charges incurred on the

corporate card.

The company claims it was entitled to .3 percent per month on

the amount payable by Sir Lenox to American Express within a

month of the monthly statement sent to Sir Lenox.

American Express claims it delivered Sir Lenox a statement

on or about July 26, 1990, and the outstanding amount was

$89,824.98.

Sir Lenox could not be contacted at his Darling Point, Sydney,

home last night.

6. Although finding this publicity unwelcome, the plaintiff did not complain of the terms of it. He concedes that it was essentially accurate. It was, significantly, written by the same reporter who wrote the matter complained of in this action.

7. Mr Gallagher's article was further published in substantially similar terms in the Telegraph-Mirror, a Sydney afternoon tabloid, on 22 March 1992.

8. The plaintiff made an unsuccessful application to have the action against him by Amex struck out. That event was reported in the business section of the Courier-Mail on 24 April, 1992 in the following terms:

Sir Lenox faces trial over debt

By JOE GALLAGHER

ONE of Australia's top businessmen, Sir Lenox Hewitt, faces

trial on charges that he owes $89,824.98 on an American Express

corporate card following a court ruling yesterday.

A judgment in the Supreme Court of Queensland has paved the

way for him to face trial in the Brisbane District Court

within the next fortnight.

American Express International claims the money is owing on a

corporate credit card issued to Qintex Ltd, which has failed,

to be used by Sir Lenox when he was employed by the company.

Sir Lenox, who has held numerous senior corporate positions,

says in court documents that he never entered into any agreement

with American Express in Queensland for the use of the corporate

card.

He appealed that the action be struck out for want of

prosecution and be stayed on the grounds that the District

Court was an inappropriate forum.

Sir Lenox was seeking, in the Supreme Court, leave to appeal

against a decision by Judge Margaret McMurdo on March 19 to

refuse this application.

But Mr Justice Geoff Davies yesterday refused his appeal

application and ordered him to pay costs.

American Express claims Sir Lenox was jointly liable with

Qintex to American Express for all charges incurred on the

corporate card.

Sir Lenox says in court documents he had never received a

monthly or any other statement in respect to the card and says

no payments were ever made by himself to American Express in

respect to the corporate card.

9. That article made a reference to the plaintiff facing "trial on charges" in the Brisbane District Court. The plaintiff stated in evidence that the terms of the article seemed to create the possibility that a reader might believe he had been charged with criminal offences. Nevertheless, he decided not to take legal action because of the lack of prominence of the article and the fact that a careful reading of the article, to some extent, dispelled that impression.

10. The plaintiff was ordered to pay Amex's costs in relation to his unsuccessful application to strike out the debt claim.

11. On 27 November 1992, the plaintiff applied for and was granted an extension of time within which to make discovery of documents. He sought this indulgence because he was then in London and about to undergo a hip replacement operation.

12. Unbeknown to the plaintiff, Amex had, on 28 October 1992, issued a bankruptcy notice against him. That notice claimed $4,627.10. That sum represented the taxed costs of the plaintiff's unsuccessful application to strike out the Amex claim.

13. On Friday, 11 December 1992 at 5.11pm, Mr Gallagher sent a message by fax to the plaintiff's then Brisbane solicitor, Mr Michael Robinson. The message read as follows:

HAS SIR LENOX RE-ENTERED AUSTRALIA AFTER HIS HIP OPERATION IN

THE UK.

WHAT DATE WAS HIS OPERATION?

WHAT HAS SIR LENOX PLEADED TO THE CHARGES OF FAILING TO PAY AN

OUTSTANDING AMOUNT ISSUED TO QINTEX ON ABOUT AUGUST 1986.

IS IT TRUE THAT A BANKRUPTCY NOTICE HAS BEEN FILED AGAINST SIR

LENOX IN THE BANKRUPTCY COURT.

THANKYOU IN ANTICIPATION OF YOUR RESPONSE.

JOE GALLAGHER.

14. In fact, as Mr Robinson's office was then closed for the weekend, he did not become aware of that message until 8.20am on 14 December 1992.

15. In the meantime, the plaintiff's son, Andrew Hewitt, a Qantas pilot, observed the article complained of during the course of Saturday, 12 December 1992. He was alarmed by the reference to his father facing "charges" and to the mention of the "bankruptcy notice". He rang the plaintiff in London and read the article over the telephone to him. At the plaintiff's request, he repeated it. Whilst the plaintiff and his son were each aware of the civil action which had been taken by Amex, neither was aware of any criminal proceeding in respect of the matter. Nor were they aware that a bankruptcy notice had issued.

16. The plaintiff forthwith sought a copy of that copy of the Courier-Mail at Queensland House in London. A copy was obtained a few days later. He made enquiries of his solicitor, Mr Robinson. As a result, he found that a bankruptcy notice had issued demanding payment of the amount taxed pursuant to the prior costs order. He was, until then, unaware that those costs had been taxed. Mr Robinson, unfortunately, had not kept him as well-informed as he should have. The bankruptcy notice, it may be noted, did not allege that the claim by Amex in the civil proceedings had been found proved.

17. On 24 December 1992, Messrs Freehill Hollingdale and Page, solicitors, wrote, on the plaintiff's instructions, to the editor of the Courier-Mail. They complained that the article in question:

... made it appear that Sir Lenox is about to be tried upon

criminal charges arising from his use of a Qintex American

Express card. The report confuses a disputed civil claim with

a criminal trial.

Our client is very troubled about the impact of this prominent

and false report upon his reputation and is gravely embarrassed

by it.

19. A comprehensive and prominent retraction and apology was demanded.

20. On 29 December 1992, Messrs Thynne and Macartney, solicitors, responded to this demand on behalf of the defendant. The substantive response was:

It would seem that the tenor of your client's complaint is

that the article states that Sir Lenox is subject to criminal

charges when clearly he is not.

We have considered your letter carefully and, with respect,

do not believe that the interpretation for which you contend

is either proper, fair or sustainable.

Your client is involved in a trial in the District Court and

the matter was entered for trial and the initial trial date

has been postponed to December consequent upon your client's

hip operation.

It seems to us, with respect, to be clear beyond any shadow

of a doubt to any reader who is likely to appreciate the

difference between a civil trial on the one hand and a criminal

trial on the other that the matters in dispute are of a civil

nature.

21. The plaintiff's solicitors, not surprisingly, were instructed to express disappointment at this response. They wrote on 31 December 1992:

Your 29 December 1992 facsimile is a disappointing response.

The expression "the trial of ... Sir Lenox Hewitt" can only

mean one thing. If the point were to be underlined, the

expression: "Hewitt is facing trial ... on charges ..." could

hardly have been better chosen. These expressions combine with

the headline to inform a reader that our client is facing a

criminal trial.

If you wish to test this, may we suggest that you ask your

editor to substitute his name for that of our client and read

the article again.

We will communicate your attitude to Sir Lenox and seek his

instructions. We have little doubt that he will instruct us

to issue proceedings. If so he will rely upon your response to

his reasonable request as aggravation of the damages.

22. The defendant, that same day, peremptorily rejected this request for reconsideration.

23. It was the plaintiff's view that the slur upon him was obvious. He was hurt and upset by it. He feared damage to his personal reputation and regarded the reasons given for rejecting his request for a remedial publication as, to quote his evidence, "illogical and idiotic".

24. Subsequently, during February and March 1993, the plaintiff wrote to and consulted with his credit providers to reassure them that he was not facing criminal charges and that the debt in respect of which the bankruptcy notice had issued was a small one and not the large debt claimed by Amex. They were already aware of the Amex litigation, but had previously been assured by the plaintiff that he was defending the claim and had reasonable prospects for so doing. The plaintiff had been, and was then, engaged in various business and property development ventures. He depended on credit from those financiers to carry on those ventures.

25. The writ of summons issued on 29 April 1993. The statement of claim, as amended, alleged that the matter published conveyed the following defamatory imputations, namely:

(a) The plaintiff had so acted as to warrant a reasonable

suspicion on the part of the relevant prosecuting authorities

that he had committed a criminal offence relating to the use

of a credit card.

(b)The plaintiff had so acted in relation to the use of a

credit card as to give rise to a prima facie case that he had

been guilty of a criminal offence in relation to such use.

(c) There was sufficient evidence of guilty conduct by the

plaintiff to warrant the plaintiff's trial by jury on criminal

charges arising from that conduct.

(d) The plaintiff had, without justification, failed to pay a

debt of $89,824.98 owed to American Express, thereby entitling

American Express to secure the issue of a bankruptcy notice for

that amount.

26. Those imputations were alleged to arise out of the natural and ordinary meaning of the matter complained of. In the alternative, it was pleaded that the imputations would arise in the minds of readers aware of the following "extrinsic facts":

1. Under Justices Act 1886-85 (Queensland), where a complaint

is made before a justice that a person is guilty or suspected

of having committed an offence sufficiently serious to be

tried by a jury, the justice may issue a summons requiring the

defendant to appear before a justice or justices taking an

examination of witnesses, to answer the complaint and to be

dealt with according to law.

2. If, upon a consideration of all the evidence, the justice or

justices hearing it is or are of the opinion that the evidence

is sufficient to put the defendant on trial for that offence,

the justice or justices order him to be tried by jury for the

offence in a court of competent jurisdiction, such as the

Brisbane District Court.

27. The ordinary reasonable reader might not have as precise a knowledge of the criminal justice system as would be conveyed by the above particulars. However, in my opinion, such a reader would be aware that, for a person to be tried in respect of an allegation of criminal conduct, prosecuting authorities would, in the first instance, have formed the view that a prima facie case of criminal conduct could be made out. They would know that a magistrate would need to carry out an independent examination of the evidence presented by the prosecuting authority concerned and refer the matter to a superior court for trial if there was a prima facie case. They would know that a District Court is an appropriate court for the trial of offences such as might be alleged to arise out of the misuse of a credit card.

28. The issue, as Lord Reid expressed it in Lewis v Daily Telegraph Ltd (1964) AC 234, 258, is:

... what the words would convey to the ordinary man (or woman):

it is not one of construction in the legal sense. The ordinary

man does not live in an ivory tower and he is not inhibited by a

knowledge of the rules of construction. So he can and does read

between the lines in the light of his general knowledge and

experience of worldly affairs.

29. It seems to me, therefore, that in the present case the matter complained of will be defamatory if it conveys to the ordinary reasonable reader, viewed as Lord Reid suggests, the imputations pleaded by the plaintiff or any of them.

30. As I pointed out in Baffsky v John Fairfax and Sons (1991) 106 FLR 21, in all jurisdictions other than New South Wales, the pleaded imputations arising out of the natural and ordinary meaning are merely particulars of that meaning. Nevertheless, it would be unfair to a defendant to allow a trial to be decided by reference to substantially different meanings which may suggest themselves to counsel for the plaintiff in the course of a trial or to a trial judge after the case is reserved. It is also desirable that those imputations be drafted at least as carefully as would be expected if they were to be relied on as true innuendoes or as imputations sued upon pursuant to the Defamation Act 1974 (NSW). That is more particularly necessary where, as here, the matter complained of was, allegedly, published in New South Wales as well as other jurisdictions.

31. The only question raised in this trial, was whether the matter complained of gave rise to the defamatory imputations pleaded or any of them. The question as to whether the publication was a fair report of judicial proceedings was expressly abandoned by the defendant, although raised by its statement of defence.

Imputation 1 - The plaintiff had so acted as to warrant a reasonable suspicion on the part of the relevant prosecuting authorities that he had committed a criminal offence relating to the use of a credit card.

32. The starting point is whether the matter complained of in this case would be taken to refer to no more than a civil dispute for debt between the plaintiff and Amex. The average reasonable reader would be aware that the District Court of Queensland determined civil suits as well as criminal proceedings.

33. It is, of course, a matter for a tribunal of fact to decide what meaning would be attributed by the average reasonable reader to the matter complained of: see Evans v John Fairfax and Sons Ltd and Ors, unreported, Supreme Court, Australian Capital Territory, Higgins J, 12 February 1993; appeal dismissed, Federal Court of Australia, Canberra, Neaves, Miles and French JJ, 27 May 1994.

34. By itself, I do not consider the term "trial" would necessarily convey to the average reasonable reader that the proceedings so described were criminal in nature. It is ambiguous. In certain contexts, the word might be seen to be a reference to a civil trial, although the word "hearing" would be more usual.

35. The reference to "charges", however, in the context of "facing trial", it seems to me, conveys an inference that the proceedings described were not merely in respect of a civil debt. It is completely inappropriate to describe an allegation that A owes B money as "a charge".

36. Indeed, the Oxford Dictionary notes that "charge", where it relates to an accusation, is, since circa 1477, specially, "The accusation upon which a prisoner is brought up for trial". To "charge" a person, in the sense of making an accusation is described as, "to hand over to the custody of the police".

37. There is, of course, a clear reference in the matter complained of to the claim for debt by Amex. That does not, however, alter the apparent meaning of the expression "facing charges".

38. The average reasonable reader would be well aware that a misuse of a credit card could well give rise to both civil and criminal proceedings. Indeed, the principal director of Qintex itself, Mr Skase, was generally known, at that time, to have been facing not only civil claims but also criminal charges arising out of the financial management of Qintex. There are numerous other, more specific instances, which would be matters of general knowledge, of persons being accused, not only of owing money because of use of credit, but also of being guilty of some criminal offence arising out of the same facts.

39. I do not consider, therefore, that any reading or re-reading of the matter complained of could alter or dispel the impression which the average reasonable reader would gain by the end of the second paragraph, that is, that the plaintiff faced trial on criminal charges arising out of the usage of the Qintex credit card referred to.

40. In Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293, it was held that a report that a person has been arrested and charged with an offence does not bear the imputation that the person is, even if only probably, guilty of that offence. Gibbs CJ and Brennan J (as he then was) left open the question as to whether such an allegation conveyed an imputation to the average reasonable reader that police suspected that the person so charged was guilty of that offence "on reasonable grounds".

41. Mason J (as he then was) expressed the view, at 301, that such a statement was:

... capable of bearing the imputation that the police suspected

him of having committed the offence and that they had reasonable

cause for doing so.

42. Whilst that statement is not part of the ratio decidendi of Harrison's case, it seems to me, with respect, to be in accord with common sense and the reasoning processes of the average reasonable reader, not moved by prejudice. Such a person would conclude that a person arrested and charged by persons having a public duty so to do is reasonably suspected of guilt of the offence referred to by responsible persons. That reader would conclude, in other words, that a real question mark must be raised as to the probity of the person referred to. That question mark will tend to lower that person in the estimation of such a reader and cause the person referred to to be regarded with caution and suspicion.

43. It is interesting that his Honour's conclusion as to the consequence of an allegation of reasonable suspicion by police or like officials was exactly that to which the plaintiff's builder, Mr Robertson, came. On reading the article and assuming it referred to criminal charges, he said that the opinion he had was:

It placed doubt on him, you know, that basically was he a crook?

44. That evidence is not admissible to establish that such was the view of the average reasonable reader but it does seem to me, albeit expressed in colloquial terms, accurately to reflect my view of what the average reasonable reader would infer from the article in question.

45. The statement that a person has been charged with an offence does not always impute that the suspicion leading to such a charge is reasonably based. The apparent source of the accusation must be portrayed as a responsible one, for example, Police, Customs or Australian Securities Commission officers, Royal Commissioners and the like. In Sergi v ABC (1983) 2 NSWLR 669, Glass JA concluded at 677:

One can agree that a mere statement of the plaintiff that he

has been charged necessarily imputes that a police officer or

other informant suspects him. But to impute that such suspicion

was reasonably based, contributes, in my view, a new dimension

of meaning.

... The communication of the fact that a charge has been

levelled against the plaintiff located in its particular web

of language will require a ruling on whether it is or is not

capable of bearing the further imputation that police suspicion

was grounded on reasonable cause.

46. However, in his Honour's view, at 678, to say that a person has been charged by police with an offence:

... it would follow in my opinion that suspicion by the police

that he has committed an offence without imputing reasonable

cause for that suspicion can also be defamatory.

47. That opinion leaves open the question as to whether such a statement is capable of imputing that there were reasonable grounds for that suspicion as was the view of Mason J (supra).

48. Of course, if it was true that a charge had been laid, justification would be a simple matter for a defendant to establish. Where, as in this case, the statement is untrue that defence is not available. If the arresting officer had reasonable grounds for suspicion the imputation could be similarly justified by that officer detailing the grounds for suspicion in evidence.

49. It follows that a statement that a person has been charged with an offence will be defamatory without more, provided the offence would, if proved, establish conduct on the part of the plaintiff which would lower his or her reputation in the eyes of the average reasonable reader. It is also defamatory further to impute that reasonable grounds for that suspicion existed. It is also and more seriously defamatory actually to impute guilt of such an offence.

50. However, the imputation presently under consideration is that the relevant prosecuting authorities had, by reason of his conduct, a reasonable suspicion that the plaintiff had committed an offence relating to the misuse of a credit card.

51. The form of that imputation seems to accord with the view expressed by Hunt J (as he then was) in Jackson v John Fairfax and Sons Ltd (1981) 1 NSWLR 36. That view was, however, criticised in the Sergi case (supra). In the latter case, the plaintiff had been wrongly portrayed as a person under suspicion by police. The trial Judge, Hunt J, had criticised the framing of the relevant imputation in the passive voice in accordance with the view he had previously expressed in Jackson (supra). In his Honour's opinion, the imputation should have been framed in the active voice. The imputation in question in this case is framed in the active voice. It is similar in form to the imputation approved by Hunt J at first instance in Sergi and in Jackson.

52. Glass JA, on appeal, rejected the view of Hunt J as to the proper form of the imputation. Hutley and Priestley JJA concurred with the opinion of Glass JA. In this case, as in Sergi, the suggestion that the plaintiff's conduct warranted the accusation imputed by the matter complained of is not necessary to render defamatory a statement that apparently responsible prosecuting authorities have brought charges. If the allegation that the plaintiff was "facing trial on charges" had been true, it might have been necessary, to avoid a successful plea of justification, to plead the imputation in the form of this imputation. It is not necessary to do so where it is conceded that it is not true that there were ever any charges pending against the plaintiff.

53. It was also pointed out in Sergi that the identity of the alleged accuser is of importance in determining the defamatory character of a statement that an accusation of criminal conduct has been made. In the present case, the inference would be drawn by the average reasonable reader that the "charges" were brought at the behest of a responsible prosecuting authority on reasonable grounds though not necessarily justified by any act of the plaintiff. The matter complained of does not identify whether the source of the relevant suspicion was conduct of the plaintiff, the conduct of others or, indeed, a non-human agency.

54. However, subsequently to Sergi, Hunt J, in Whelan v John Fairfax and Sons Ltd (1988) 12 NSWLR 148 held that whilst a statement that a person had been charged by police with an offence need not necessarily convey the imputation that the plaintiff's conduct warranted that response, it is capable of conveying that imputation and such an imputation would ordinarily follow unless disavowed by the context.

55. That view does seem to me to convey a logical difficulty. The matter complained of in that case as well as that complained of in the present case does not convey, and is not alleged to convey, an imputation that the plaintiff was guilty of the offence or offences referred to. It does convey the imputation that there was "reasonable suspicion" of such guilt on the part of responsible authorities.

56. However, it is not clear to me that the matter complained of in this case purports to base that suspicion on any conduct of the plaintiff. If the plaintiff had been alleged to have used the Qintex credit card in a manner which had attracted reasonable suspicion, that it seems to me, would have been tantamount to an imputation of guilt of the matters so suspected.

57. Indeed, in Whelan, Hunt J pointed out that to plead an imputation in this form would require a defendant who wished to justify the imputation not only to show that there was in fact the suspicion referred to, and that it was reasonable, but also the conduct referred to, at 160, which was "... a somewhat more difficult task".

58. That "difficulty" seems to me to be that suspicious conduct would need to be proved. That would approach, if not include, proof of guilt of the suspected conduct.

59. I note that Levine J, in Rigby v John Fairfax Group Pty Ltd (1994) A Def R 52,005, has expressed concern as to this form of imputation for similar reasons.

60. The matter complained of in Rigby (supra) alleged that the plaintiff was "facing charges" relating to mistreatment of children. It further alleged that those "charges" resulted from a police investigation. The form of imputation pleaded was similar to that approved by Hunt J in Sergi and in Jackson. The defendant objected that the form of the imputation implied guilt of the offences allegedly charged whereas the matter complained of was capable of imputing no more than reasonable suspicion of guilt. That amounted to a direct challenge to the view expressed by Hunt J in Whelan (supra).

If the matter complained of cannot convey an imputation of

guilt, but can convey an imputation of suspicion, the use of

the words "the plaintiff so conducted himself" are not proper

in that the condition of the plaintiff is captured by the use

of the passive voice and the use of those words can give rise

not only to a notion but also an issue inconsistent with the

incapacity of the matter complained of to convey guilt. The

use of the words "the plaintiff so conducted himself" can be

no more than and no less than another way of asserting that

the plaintiff was guilty.

62. It seems to me that Levine J's view must be correct, with due respect to the contrary view.

63. To refer to conduct of an accused person as giving rise to a reasonable suspicion of guilt would usually be tantamount to a reference to conduct apparently constituting the offence.

64. It seems to me that the matter complained of in this case does not impute that the plaintiff was guilty of criminal misuse of the Amex card. As Mr Robertson said, it "placed doubt on him" but no more. Granted that the "charges" had allegedly reached the stage of a pending trial in the District Court, it may be inferred that the suspicion or doubt was "reasonable".

65. The imputation of reasonable suspicion is clearly defamatory, but it is not the imputation pleaded in (a). That imputation alleges, in reality, that the matter complained of implies that the plaintiff was, at least probably, guilty of some criminal offence. It does not go that far.

66. It follows that this imputation is not established.

Imputation 2 - The plaintiff had so acted in relation to the use of a credit card as to give rise to a prima facie case that he had been guilty of a criminal offence in relation to such use.

67. It may be inferred from the matter complained of that a prima facie case had been found against the plaintiff of an offence or of offences relating to the use of the credit card referred to.

68. That is, perhaps, one step more serious an imputation than the existence in a proper authority of a reasonable suspicion of guilt of an offence.

69. However, this imputation as pleaded also asserts that the matter complained of imputes to the plaintiff conduct giving rise to that prima facie case of guilt.

70. Just as the matter complained of does not impute actions of the plaintiff giving rise to a reasonable suspicion of guilt, so also it fails to impute that the actions of the plaintiff gave rise to a prima facie case of criminal conduct, notwithstanding that it imputes the existence of a prima facie case of such guilt whatever the material upon which that conclusion might have been based.

71. It follows that this imputation is not made out.

Imputation 3 - There was sufficient evidence of guilty conduct by the plaintiff to warrant the plaintiff's trial by jury on criminal charges arising from that conduct.

72. This imputation is in the passive voice. It merely imputes that there was, in effect, sufficient evidence to put the plaintiff on trial in respect of criminal charges relating to the use of the Qintex card.

73. That imputation clearly does arise from the matter complained of. Further, to so allege not only implies a reasonable suspicion of guilt being held by responsible prosecuting authorities but also that there was a prima facie case thereof.

74. As Glass JA held in Sergi, such a statement is clearly defamatory.

Imputation 4 - The plaintiff had, without justification, failed to pay a debt of $89,824.98 owed to American Express, thereby entitling American Express to secure the issue of a bankruptcy notice for that amount.

76. It is clear to me that the reference to a bankruptcy notice in the third paragraph of the matter complained of would lead the average reasonable reader to conclude that the civil debt had been found proved and, for whatever reason, the plaintiff's defence to the claim had been rejected.

77. It therefore follows that the article does imply that the debt claimed by Amex had been proved and that enforcement proceedings were likely to follow, including bankruptcy.

78. It is not defamatory to say of a person that he or she is indebted to another, even if it is suggested that the debt was past due: see Black v Houghton (1966) Qd R 435. However, to impute financial default or bad business credit is defamatory: see Foley v Hall (1891) 12 LR (NSW) 175; O'Connor v Skehan (1903) QWN 43; McCarron v Boree Shire Council (1971) 1 NSWLR 638.

79. Evidence was given that, as at 12 December 1992, the plaintiff had for some time been engaged in business, including property development. That involved the obtaining of considerable financial credit. Thus there would be no doubt that to publish of and concerning the plaintiff that he faced bankruptcy proceedings in relation to a large sum of money would cause considerable alarm amongst his creditors. Actual financial damage would be a clear risk.

80. However, whilst that may warrant a suit for injurious falsehood: see Ratcliffe v Evans (1892) 2 QB 524; Hall-Gibbs v Dun [1910] HCA 66; (1910) 12 CLR 84; it does not necessarily constitute defamation. This is irrespective of the truth or falsity of the allegation: see Dawson Bloodstock Agency Pty Ltd v Mirror Newspapers Ltd (1979) 1 NSWLR 16.

81. In Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1 it was noted that the Defamation Act 1958 (NSW) s5 (since repealed) had brought injury to a person in his or her profession or trade within the definition of defamation. Stephen J, at 13ff, pointed out that this was an alteration to the common law position. It may be, as Mason J (as he then was) suggested, that s4 of the Defamation Law (Qld) has had a similar effect.

82. However, in the present case, the plaintiff has not pleaded either injurious falsehood or damage to the profession or trade of the plaintiff.

83. It follows, on that basis, that the matter complained of, insofar as it attacks the plaintiff's credit financially, will be defamatory only insofar as it imputes bad faith or lack of personal probity. I take it that the words "without justification" in the imputation as pleaded convey that meaning.

84. In the present case the article not only referred to the issue of a bankruptcy notice, it also referred to pending criminal proceedings arising out of the same fact situation. That not only imputes a risk to the plaintiff's financial standing, it also imputes either dishonesty or, at least, bad faith in relation to those financial dealings.

85. This imputation as pleaded, however, does not allege that an inference of dishonesty is made by the matter complained. It alleges a lack of justification in relation to the refusal to pay Amex. That is equivalent in meaning to "bad faith". The matter complained of does convey, at least, that meaning. I therefore find this imputation established.

86. The plaintiff therefore was falsely accused of both criminal conduct and lack of good faith in his financial dealings. Those imputations are seriously defamatory.

87. It was submitted by counsel for the plaintiff that the damage was exacerbated by the hitherto unblemished and high reputation the plaintiff enjoyed.

88. The plaintiff was born on 7 May 1917. He is now 78 years of age. He was educated at Scotch College and University of Melbourne at Melbourne in the State of Victoria. In 1933 he was employed by BHP. In 1939 he was seconded to the Australian Public Service as assistant to Professor Copland. He was qualified in economics and accountancy.

89. After various postings in an economic advisory capacity during World War II, he was offered a permanent post with the Department of Post War Reconstruction.

90. In December 1949 he was promoted to the position of official secretary to the Australian High Commissioner in London, a post he held for three and a half years. During some of that period he served as acting High Commissioner. It is apparent, and I so infer, that, even at the age he then was, the plaintiff enjoyed a high reputation for competence and probity.

91. Following his return from that post, the plaintiff in 1953 became an Assistant Secretary at the Treasury. In 1955, after only 18 months, he was appointed a First Assistant Secretary, then Deputy Secretary in 1962. In 1968 he was appointed as Chairman of the Australian Universities Commission.

92. Thereafter, the plaintiff was in the top rank of the Australian Public Service. He was Secretary of various Departments of State until August 1975, when he resigned to become Chairman of Qantas Airways Ltd.

93. A reported decision of this Court, Hewitt v WA Newspapers (1976) 17 ACTR 15, reveals that attempts to portray this move as indicating dissatisfaction with the plaintiff's competence or performance were unwarranted and defamatory. There was no attempt in the present case, to seek to suggest that the plaintiff as a senior public servant, was not entitled to an unqualified reputation for excellence and probity. At 25, in the previous matter, Franki J sets out the plaintiff's then prior history in more detail than I have done. It accords, however, with the evidence in this matter.

94. The plaintiff ceased his term as Chairman of Qantas in 1980. He then decided to retire from the Australian Public Service and return to the private sector. Since then he has been invited to serve on the boards of various well-known and respected companies. No doubt Qintex would originally have been so regarded. He has also been invited to serve in various public part-time offices. That indicates the continuing high esteem with which the plaintiff was and has continued to be regarded by governments as well as the private sector.

95. The plaintiff's role with Qintex was as a non-executive director. No aspect of his involvement with that entity or its business was suggested to reflect adversely on the plaintiff.

96. The plaintiff's reputation for honesty and integrity was attested to by witnesses. It was, in any event, unchallenged.

97. There are various aspects to the award of compensatory damages. First is the need for vindication of the plaintiff.

98. The defamatory matter was circulated, as the defendant conceded in answers to interrogatories, in each of the jurisdictions referred to in the amended statement of claim. The extent of that circulation was as follows:

Queensland 310,413

Australian Capital Territory 472

New South Wales 7,233

Victoria 1,588

South Australia 348

Western Australia 46

Tasmania 107

Northern Territory 271

United Kingdom 124

100. It was also conceded by the defendant that, on average, each copy of the newspaper would be read by approximately three persons. That figure varied slightly, but not significantly, between the above jurisdictions.

101. I would, therefore, conclude that the plaintiff was defamed in the eyes of over 1 million persons. They would include, almost certainly, most of his current and former colleagues, business associates and acquaintances.

102. It is also fair to observe, however, that the bulk of the circulation was in Queensland. Most of the plaintiff's activities were conducted in New South Wales and the United Kingdom. Nevertheless, those who would, outside Queensland, read the Courier-Mail, are more likely than not to be persons with an interest in current affairs and who would know of the plaintiff by repute. They would, more relevantly, include many of his business and financial associates.

103. There was potential for great harm. That none has emerged directly does not mean that a shadow of doubt was not cast upon the plaintiff's hitherto unblemished reputation. The award of damages must reflect the need to vindicate the plaintiff's reputation.

105. The plaintiff sought an apology and retraction. That was a reasonable request couched in reasonable terms. It was refused. The grounds for refusal were so absurd as to cast serious doubt on the bona fides of that refusal. No person having adequate knowledge of the English language could have failed to perceive that the article implied that the plaintiff had been accused of criminal conduct by proper authorities and "faced trial". It also implied with similar clarity that a debt due to a large, apparently respectable, corporation had been denied without proper justification and bankruptcy was to follow.

106. The defendant, if its claim to have intended no such imputations was to be believed, could easily have mitigated the damage to the plaintiff's reputation by a suitably placed and worded apology. It chose not to do so.

107. There is also the injury to the plaintiff's feelings.

108. When the plaintiff first had the article read to him, he experienced "disbelief, puzzlement, concern and anger". His concern included the possible effect upon his family of the imputations he correctly perceived as being conveyed. His concern deepened when he personally read the article in question.

109. The falsity and unfairness of the imputations aroused the plaintiff's anger. He could not understand how the situation concerning the claim by Amex could be so misrepresented. He was further angered by the fact that no enquiry was made of him so that he could clarify the factual situation for Mr Gallagher's benefit.

110. In my opinion, Mr Gallagher's efforts to obtain a pre-publication clarification were derisory. The document sent to the plaintiff's solicitor reveals either a deplorable ignorance of ordinary English usage or a desire to damage the plaintiff by an innuendo of criminal misconduct. Had Mr Robinson or the plaintiff seen the form of his questions, particularly:

What has Sir Lenox pleaded to the charges of failing to pay an

outstanding amount issued to Qintex on about August 1986?,

there is no doubt Mr Gallagher's inappropriate terminology would have been pointed out to him.

111. The true position in relation to the bankruptcy notice could, on a few day's notice, also have been discovered.

112. Mr Gallagher had had from 27 November 1992, the date of Judge Healey's decision to extend time for discovery, to report those proceedings. Publication was not effected until 12 December 1992. If Mr Gallagher had read the terms of the formal order made by Judge Healey, he would have understood that no trial date had been set let alone postponed. His article was fundamentally flawed in suggesting that a trial had been set and was being postponed.

113. In truth, he made no real effort to ensure his proposed report was accurate.

114. In mitigation, it may be said that a statement that the plaintiff "faces trial on charges" had previously been published by Mr Gallagher in the Courier-Mail business section on 24 April, 1992 without challenge from the plaintiff. Whilst the context of that article, if read through, contradicts the suggestion in the opening paragraph that criminal charges were pending, the author's incorrect use of language could have been drawn to the editor's attention.

115. However, that was just as much the responsibility of the management of the defendant as of the plaintiff.

116. The refusal to apologise or even clarify the article of 12 December 1992 caused the plaintiff further anger. Had the defendant conceded an honest mistake in the use of language, the plaintiff's feelings may have been mollified. Instead the defendant chose the course of brazen defiance.

117. Further, that brazen defiance continued up to and throughout the trial of this action.

118. A further effect on the plaintiff, causing him anxiety and embarrassment, was his perceived need, not unreasonably entertained, to explain the article complained of to his credit providers. The plaintiff also felt, although it may have been the result of heightened sensitivity on his part, that subsequent credit arrangements he sought were more reluctantly approved. I do not find this perception to reflect the correct situation. No refusal of credit or imposition of unusual conditions has been demonstrated. It does, however, reflect the hurt felt by the plaintiff. It is a deep and genuine hurt.

119. I observed the plaintiff in the course of the trial. The genuineness and depth of his hurt and outrage was plainly evident to me.

120. It also seems to me that it was not unduly sensitive of the plaintiff to feel that the Courier-Mail was luxuriating in his discomfort. I do not find that the defendant's relevant representatives were in fact so motivated but they certainly gave that impression. They have not chosen to date to acknowledge either their error, if it be honest, or the hurt to the plaintiff.

121. In Baffsky v John Fairfax and Sons (supra), I followed the approach to the assessment of damages in defamation taken by Kelly J in Jools v Mirror Newspapers Ltd (1984) 56 ACTR 1. I commented, at 54, that:

... in assessing compensatory damages for harm to reputation

and injury to feelings the sum awarded should not be so high

as to outrage the community's sense of proportion, as the Court

perceives it, between amounts awarded to compensate the

physically (or mentally) disabled victims of tortious conduct

and those awarded to persons who are defamed.

122. The proper approach to the assessment of compensatory damages in defamation matters was, more recently, considered by the High Court in Carson v John Fairfax and Sons Ltd [1993] HCA 31; (1993) 178 CLR 44.

123. It was the view of the majority, Mason CJ, Deane, Dawson and Gaudron JJ, that it was necessary where separate defamatory but related publications have been made, to have regard to the totality of the injury to the plaintiff rather than to award a separate sum for each publication as if it was the only such publication.

124. In the context of a jury assessment of damages, their Honours, at 59-60, considered the issue of proportionality between damages for defamation and damages for personal injury:

As a matter of logic and principle, there is nothing perverse

in permitting - even encouraging - appellate courts to draw

comparisons with personal injury verdicts while prohibiting

such an approach at the trial stage. Appellate courts would

have regard to personal injury awards to assist in resolving

the question whether "the amount awarded is so high or so low

that it is outside the range of what could reasonably be

regarded as appropriate to the circumstances of the case"

(Coyne (1991), 172 CLR, at 215). Juries are charged with the

more exacting task of deciding upon a precise figure, and thus

will derive less assistance in accomplishing their duty from

the rough comparison provided by personal injury awards. Having

said this, we see no significant danger in permitting trial

judges to provide to the jury an indication of the ordinary

level of the general damages component of personal injury

awards for comparative purposes, nor in counsel being permitted

to make a similar reference. Although there is authority in

this Court to the effect that the quantum of damages is not to

be resolved by reference to a norm or standard supposedly to be

derived from a consideration of amounts awarded in a number of

other specific cases (Planet Fisheries Pty Ltd v La Rosa (1968)

[1968] HCA 62; 119 CLR 118 at 124-125), there is much to be said for trial

judges offering some guidance on damages - such as inviting the

jury to consider the investment or buying power of the amount

it might award (Coyne (supra) at 235; Carson (1991) 24 NSWLR at

or perhaps even indicating a range of damages which might

be considered appropriate - while ensuring that the jury knows

that they are to reach their own decision (Coyne, at 235).

Providing basic information on the general damages component of

personal injury awards might even be more helpful than these

other examples.

125. That suggests to me approval of the approach of Kelly J in Jools (supra) which I followed in Baffsky.

126. Their Honours also considered the role of an award of aggravated damages as part of the award of compensatory damages. Such damages are not to be confused with punitive damages. Nor are they, necessarily, additional to the sum to be awarded for the purpose of vindicating the plaintiff's reputation. Their Honours said, at 66:

It is the responsibility of the trial judge to give a clear and

firm instruction to the jury that, in considering the

plaintiff's claim for damages to vindicate his or her

reputation, the damages must not exceed the amount appropriate

to compensate the plaintiff for any relevant harm he or she

has suffered. Furthermore, the trial judge should instruct the

jury that, in the event that it is minded to award the

plaintiff a substantial sum by way of damages for the

plaintiff's injury apart from the claim for vindication of

reputation, it will be unnecessary to add a further sum for

vindication of reputation. The award of that substantial sum

will in itself serve to vindicate the plaintiff's reputation.

127. I take that to be a warning that the overall award of compensatory damages, in global terms, should not exceed that necessary to solace the plaintiff's hurt and to vindicate his reputation.

128. A Full Court of the Federal Court (Gallop, Davies and von Doussa JJ) increased an award of damages in Humphries v TWT Ltd [1993] FCA 577; (1993) 120 ALR 693. That case involved an imputation against a parliamentarian and Minister of the ACT Government of over-spending on travel. That incorrect statement was withdrawn the same day. Their Honours noted, at 706:

The injury to the plaintiff's feelings which attracts

compensation includes the anxiety and uncertainty undergone

in litigation, for it was reasonable that proceedings should

be taken to vindicate his damaged reputation.

129. The plaintiff in this case deposed to the stress and anxiety occasioned by this litigation. That stress and anxiety was, no doubt, contributed to by the apparent confidence with which the defendant promoted its unmeritorious assertion that the matter complained of did not convey any of the pleaded imputations. An award of $8,000.00 plus interest was set aside in Humphries (supra) to be replaced by an award of $25,000.00 plus interest.

130. In Australian Consolidated Press Ltd v Ettinghausen, unreported, NSW CA, Gleeson CJ, Kirby P, Clarke JA, 13 October 1993, an award of $350,000.00 for defamation (a nude photograph taken and published without knowledge or consent of the plaintiff) was set aside as excessive. In that case, as in the present, the defendant had attempted to "defend the indefensible". However, the Court drew the inference that the jury may have been tempted by that fact to add an impermissible punitive element to the damages awarded.

... there is an important place, even in an award of

compensatory damages for defamation, for regard to the conduct

of the defendant.

132. Kirby P regarded it as necessary to keep the damages award commensurate with awards for physical loss: see 40. That was, of course, consistent with Carson (supra)

133. Clarke JA reviewed the role of a continued failure to apologise and of persistence in an unjustifiable defence. There is much to be said for the view that those matters do not so much aggravate the hurt and damage but rather fail unreasonably to alleviate the same. In the result, the net effect is probably the same.

134. Levine J pointed out, in Carson v John Fairfax and Sons Ltd (1994) 34 NSWLR 72, that there is difficulty for a trial judge in directing a jury as to the indicative relevance of verdicts in personal injury cases. Those difficulties, in my view, are not relevant to a situation in which the trial judge alone must assess the appropriate level of damages.

135. In my opinion, the approach to damages which I must adopt is that of the majority of the High Court in Carson (supra).

136. In this case, there is no relevant difference between the laws of the various jurisdictions as to the assessment of damages save as to the availability, absent in New South Wales, of punitive damages. It is, of course, possible that there is no such exclusion if damages are to be assessed according to the laws of this Territory in respect of tortious acts found to have been committed elsewhere: see Stevens v Head [1993] HCA 19; (1993) 176 CLR 433. However, that question does not fall for decision. Mr Hughes QC, for the plaintiff, expressed no opposition to the view that damages could be adequately assessed on a compensatory basis, taking due account of any aggravating circumstances found to exist. I accept that submission.

137. I consider that the total sum to be awarded for damages, having regard to the need to reflect the aggravating circumstances, which I have adverted to as well as the area of and extent of publication in each jurisdiction, is $75,000.00. Insofar as that needs to be apportioned, I would indicate that $40,000.00 is, in my view, to be regarded as being for publication in Queensland and $10,000.00 each for the publications in New South Wales, the Australian Capital Territory and the United Kingdom where the plaintiff is particularly well known. The remaining $5,000.00 is attributable to the remaining jurisdictions rateably according to the extent of publication.

138. In my view, that sum will also suffice to vindicate the plaintiff and repair any residual damage to his reputation.

139. I award a further sum of $5,500.00 for interest. The interest is calculated in accordance with MPA (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657, Hallet v Shoevers (1992) 109 ACTR 1, bearing in mind that most of the damage was suffered in the period shortly following publication.

140. There will be judgment for the plaintiff in the sum of $80,500.00. I will hear the parties as to costs.

Defamation Act 1958(NSW)

Under Justices Act 1886

Defamation Act 1958(NSW)

Lenox Hewitt v Queensland Newspapers Pty Limited [1995] ACTSC 54

At a glance

Court

Decision date

Before

Source

Judgment (173 paragraphs)

Lenox Hewitt v Queensland Newspapers Pty Limited [1995] ACTSC 54 (5 June 1995)

Parties

Legislation Cited (4)

Cases Cited (14)