MAKEIG v DERWENT

COUNSEL : T Molomby / R Rasmussen (Appellant) C Evatt / G Hansen (Respondent) SOLICITORS : Jennifer E Darin (Appellant) Carters Law Firm (Respondent) CATCHWORDS : DEFAMATION - defences - qualified privilege - relationship between the common law the Lange and the statutory defences - malice - "reasonableness" - Defamation Act 1974 (NSW), s22 LEGISLATION CITED : Defamation Act 1974 (NSW) Braddock v Bevins [1948] 1 KB 580 Lang v Willis (1934) 52 CLR 637 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 CASES CITED: Palmer v Belan [1999] NSWSC 187 Reynolds v Times Newspapers Ltd [1999] 3 WLR 1010 Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 Templeton v Jones [1984] 1 NZLR 448 DECISION : 1 Appeal allowed with costs.; 2 Grant leave to file the cross appeal but dismiss the cross appeal with costs.; 3 Vacate the order of the trial judge entering verdict for the Plaintiff in the sum of $70,000.; 4 Affirm the order of the trial judge that the Defendant pay the Plaintiff's costs in the proceedings before him.; 5 Remit the proceeding to the District Court to determine whether, as alleged in paragraph 4 of the Amended Defence, the matter complained which conveyed the imputation set out in par 2B(e) of the Amended Statement of Claim, was published under qualified privilege at common law and, if so, to determine the appropriate damages for imputation (a) and to make consequential orders.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SPIGELMAN CJ MASON P HEYDON JA

Peter MAKEIG v Peter DERWENT Facts The Respondent was a candidate in a Local Council By-Election. The Appellant published a leaflet which, at trial before Puckeridge DCJ, was found to contain two imputations which defamed the Respondent. Leave to appeal was granted with respect to the trial judge's findings with respect to one of these imputations.

Reasoning (per Spigelman CJ, Mason P and Heydon JA agreeing) 1 The consideration in Lange of reasonableness of conduct do not have a direct bearing on the defence of qualified privilege at common law. His Honour erred in applying a test of reasonableness to the defence of qualified privilege at common law.

2 His Honour failed to determine other aspects of the Respondent's case that the defence of qualified privilege was unavailable. 3 There is nothing inherently inconsistent in a finding that two quite distinctive imputations, conveyed by different parts of the same publication on different subject matters, are not actuated by the same motive.

2 Grant leave to file the cross appeal but dismiss the cross appeal with costs.

3 Vacate the order of the trial judge entering verdict for the Plaintiff in the sum of $70,000.

4 Affirm the order of the trial judge that the Defendant pay the Plaintiff's costs in the proceedings before him.

5 Remit the proceeding to the District Court to determine whether, as alleged in paragraph 4 of the Amended Defence, the matter complained which conveyed the imputation set out in par 2B(e) of the Amended Statement of Claim, was published under qualified privilege at common law and, if so, to determine the appropriate damages for imputation (a) and to make consequential orders.

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THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SPIGELMAN CJ MASON P HEYDON JA

1 SPIGELMAN CJ: This is an appeal from a judgment of Puckeridge DCJ, in which his Honour found that the Appellant (Defendant) had defamed the Respondent (Plaintiff) and awarded damages in the sum of $70,000. The Appellant has been given leave to appeal from part of the judgment. The Respondent seeks leave to cross-appeal out of time from the judgment in another respect. 2 The Respondent had at various times been an Alderman of and Mayor of Ku-ring-gai Council and, at the relevant date of the publication complained of, was a candidate for election at a Council By-Election to be held on 11 May 1996. The Appellant was, and had been for some time, a political opponent of the Respondent. In the course of the By-Election the Appellant prepared and caused to be published a leaflet critical of the Respondent which, his Honour found, made two defamatory imputations of and concerning the Respondent. Leave to appeal was granted with respect to one only of those imputations. 3 The matter complained of contains on one page bold printing to the effect "Vote No to Peter Derwent! No! No! No! No!". "Developer Derwent … gross hypocrisy". There then follow two columns of material, one under the heading "This is How Derwent Presents Himself" and the other under the heading "But this is How Derwent Actually Performs". Under the first of the headings are various references in quotation marks being comments critical of developments which the Respondent was said to have made. Under the second column, there was a reference to the Respondent himself engaging in a development which had been approved by the Council and which the leaflet described as "an atrocious offence to the amenity of Ku-ring-gai". The leaflet then said that the Respondent sold the development for a "gross profit of $500,000!". At the foot of this page of the leaflet is a statement in bold "Place Developer Derwent Last". 4 On the second page of the leaflet is a document signed by the Appellant who described himself as a "very concerned fellow resident". It referred to the Respondent as a candidate for the Roseville Ward By-Election. In relation to the content of the material in the document, it was asserted that: "… whilst the information is graphically portrayed for emphasis, the integrity of the facts is beyond question. Peter Derwent, being aware of the document, has not at any time sought an injunction to prevent its publication." 5 The first page of the document was in fact headed "Council Elections Saturday 9 September 1995", not being the By-Election of 11 May 1996 during which the publication in issue occurred. The Respondent who had, until that earlier general election been Mayor of Ku-ring-gai, was an unsuccessful candidate for the Gordon Ward at that election. The second page of the leaflet made a reference to these events in the following terms: "In the Council Elections of 1995, on the strength of these revelations and for other reasons, electors of Gordon Ward decisively rejected Peter Derwent. Now Derwent, the archetypal carpetbagger, has turned up in the Roseville Ward with high hopes." 6 The second page of the leaflet went on to say: "Derwent publicly ridiculed me for publishing the document. He started a futile court action against me …he will seek to minimise or to excuse these facts, but he has never denied the truth of the contents of the leaflet." 7 The leaflet made an assertion, which is the basis of the imputation the subject of this appeal, in the following terms: " LEFT-WING EXTREMIST …Ku-ring-gai is the safest conservative seat in Australia. Peter Derwent was a member of the Communist Party in the Sixties. He maintained associations with left-wing groups. While Mayor of Ku-ring-gai, he proposed expending ratepayers money on the establishment of a "sister city" association with that of Vladivostock. Why does a man with this leftist track record expect to represent the people of Roseville?" 8 Against this paragraph there appeared a star. At the foot of the page, in a box with the same star, the following appeared: "To have persuaded unsuspecting conservative [Ku-ring-gai] to elect him Councillor/Mayor probably gave Derwent a perverse pleasure … do not let him have another laugh at your expense!". 9 In the proceedings before Puckeridge DCJ, the Respondent asserted that the matter complained of conveyed the following five defamatory imputations: "(a) The plaintiff is a gross hypocrite because although he publicly said he was opposed to greedy developers he himself made an exorbitant profit when he sold land he had developed himself.

(b) The plaintiff abused his position as an Alderman because he was a member of Council and was a party to the Council's refusing approval of a subdivision of land and then purchased the land himself and obtained Council's approval for his own development.

(c) The plaintiff was responsible for a development which is an atrocious offence to the amenity of Ku-ring-gai.

(d) The plaintiff was a member of the Communist Party.

(e) The plaintiff deceived the unsuspecting conservative voters of Ku-ring-gai by persuading them to elect him Councillor/Mayor because he failed to disclose he had been a member of the Communist Party and maintained associations with left wing groups." 10 Puckeridge DCJ found in favour of the Respondent with respect to imputations (a) and (e). His Honour found that imputation (b) was not conveyed. As to imputation (c), his Honour found that imputation was conveyed but the Appellant had made out a defence of fair comment. As to imputation (d), his Honour held that it was conveyed but was not defamatory. 11 The appeal is concerned only with imputation (e). Accordingly, the Respondent is entitled to a verdict on the basis of imputation (a). However, if the appeal with respect to imputation (e) is successful, then the matter will need to be remitted and, if the defence of qualified privilege is established, it will be necessary to reassess damages. 12 His Honour's reasoning with respect to imputation (e) was, relevantly, as follows: "… the defendant states that in the proposed leaflet to be distributed prior to the by-election one of his clients insisted that the information received by the defendant that the plaintiff had been a member of the Communist Party be included in the leaflet. This was clearly for the purpose of reinforcing the views contained in the leaflet that the defendant whilst indicating that he was against developers was in fact a developer himself and reinforcing the deceptive nature of the plaintiff. The defendant intended the imputation to be conveyed and was aware of the effect such an imputation could have on electors and I consider should have taken proper steps to verify the accuracy of information provided to him. In not taking such steps I do not consider that the defendant acted reasonably in all the circumstances. I do not consider that the defendant caused the material forming part of this imputation to be published out of ill will which he bore towards the plaintiff or from any motive other than a desire to see the plaintiff lose the by-election." 13 His Honour had earlier referred to the fact that the allegation that the Respondent had once been a member of the Communist Party had been supplied to him by a Councillor Geddes who was a rival of the Respondent on the Council. His Honour had said earlier in his judgment: "The plaintiff submits that it was unreasonable conduct on the part of the defendant to rely on information supplied by Councillor Geddes, a rival of the plaintiff on the Council. The plaintiff submits that on the evidence before the court prejudice of the defendant towards the plaintiff was such that he would seize on any tit bit of information relating to the plaintiff and state it as a fact. Further it is submitted that the defendant could reasonably have inquired of the plaintiff at the Hornsby Court hearing as to whether or not he was a member of the Communist Party and relies on what was said by the High Court in Lange's case that a defendant's conduct will not be reasonable unless the defendant has sought a response from a person defamed and published the response made (if any) except in cases where the seeking or publication of a response was not practicable or it was unnecessary to give the plaintiff an opportunity to respond. The plaintiff submits that the exception referred to by the High Court does not apply in this case because of the opportunity afforded to the defendant to do so at the Hornsby Court proceedings." 14 The reference to the Hornsby Court proceedings is a reference to an occasion at which there was a mention of other proceedings instituted by the Respondent against the Appellant with respect to the publication of the front page of the leaflet in its original form, during the course of the general Council Election of 9 September 1995. 15 With respect to these submissions, his Honour made a finding to the following effect: "I would consider that the defendant because of his attitude towards the plaintiff, would accept any 'throw away' lines in relation to the plaintiff which could bring about the defeat of the plaintiff at the by-election. Whatever the nature of the information that I accept the defendant received I consider that the defendant would have drawn a conclusion that the plaintiff had been a member of the Communist Party in his earlier years." 16 The Appellant submitted to this Court that his Honour erred in law by applying to a common law defence of qualified privilege, the requirement of reasonableness of conduct which the High Court had adumbrated with respect to the new category of qualified privilege established in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. 17 Particular attention was drawn to the following passage in the joint judgment of the High Court at 573: "… reasonableness of conduct seems the appropriate criterion to apply when the occasion of the publication of defamatory matter is said to be an occasion of qualified privilege solely by reason of the relevance of the matter published to the discussion of government or political matters. But reasonableness of conduct is imported as an element only when the extended category of qualified privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience. For example, reasonableness of conduct is not an element of that qualified privilege which protects a member of the public who makes a complaint to a Minister concerning the administration of his or her department. Reasonableness of conduct is an element for the judge to consider only when a publication concerning a government or political matter is made in circumstances that, under the English common law, would have failed to attract a defence of qualified privilege." 18 Part of the reasoning of which this was the conclusion, commences with a recognition in the joint judgment that: "… apart from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients. If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth. Publication beyond what was reasonably sufficient for the occasion of qualified privileges is unprotected. Because privileged occasions are ordinarily occasions of limited publication - more often than not occasions of publication to a single person - the common law has seen honesty of purpose in the publisher as the appropriate protection for individual reputation. As long as the publisher honestly and without malice uses the occasion for the purpose for which it is given, that person escapes liability even though the publication is false and defamatory. But a test devised for situations where usually only one person receives the publication is unlikely to be appropriate when the publication is to tens of thousands, or more, of readers, listeners or viewers." 19 After referring to the criterion of reasonableness in s22 of the Defamation Act 1974 (NSW), the Court adopted a test of reasonableness for the new category of qualified privilege recognised in the judgment. 20 If the trial judge required the Appellant to satisfy a test of reasonableness with respect to a defence of common law qualified privilege then, it was submitted, he committed a legal error. 21 The Respondent did not contend to the contrary. He submitted that a proper understanding of his Honour's reasons were that he had rejected the defence of common law qualified privilege and was in fact applying the category of privilege identified in Lange. The Respondent submitted that his Honour had in fact rejected the defence of qualified privilege on the basis of one or other of the following grounds:

(i) The finding of malice with respect to the publication of imputation (a) necessarily implied that imputation (e) in the same leaflet was published with malice.

(ii) His Honour should be understood to have made a finding that the leaflet was the subject of excessive publication to uninterested third parties.

(iii) His Honour should be understood to have found that publication, even if not excessive in the sense referred to in (ii), was not entitled to a claim of privilege by reason of a finding that the document and imputation (e) were not published reasonably. 22 With respect to the contention referred to in (i) of the immediately preceding paragraph hereof, the Respondent is faced with the express terminology of his Honour's judgment which states in the case of imputation (e) that: "I do not consider that the defendant caused the material forming part of this imputation to be published out of ill will which he bore towards the plaintiff or from any motive other than a desire to see the plaintiff lose the by-election." (emphasis added) 23 By reason of this statement, the Respondent seeks leave to cross appeal in order to assert that Puckeridge DCJ erred in law in making a finding that imputation (a) was published maliciously, but that imputation (e), contained in the same document, was not published maliciously. 24 His Honour's finding with respect to imputation (a) was based on the fact that prior to the publication, the Respondent had informed the Appellant of some of the errors contained in the original leaflet as circulated prior to the General Election of September 1995. His Honour held: "With the knowledge he had prior to the election on 11th May 1996 it was I consider reckless on the part of the Defendant to proceed to publish exhibit A. It would not have been unreasonable in the circumstance not to publish exhibit A notwithstanding that the defendant did not receive the printed material until 3rd or 4th May 1996. The recklessness which the defendant showed in publishing the imputation is I consider but a reflection of the ill will which I find the defendant had towards the plaintiff. I also find that he was indifferent as to the truth or falsity of the imputation." 25 Prior to considering each of the imputations, his Honour had set out in the judgment the effect of the submissions before him, including the following: "The defendant claims that he had an honest belief as to the imputations found to be conveyed and that honest belief is sufficient for the purposes of the Common Law or Statutory qualified privilege claimed. The defendant submits that even if that honest belief arose from unreasoned or blind prejudice, such prejudice would not prevent the defendant from relying upon the defence of qualified privilege. The defendant agrees that the material in the leaflet exhibit A raises for [discussion] matters of a political nature. But the defendant submits that the publication was to a limited class of recipients and that the Common Law as to qualified privilege in this instance is as it was prior to Lange v Australian Broadcasting Corporation (189 CLR 520).

In Lange's case, the High Court held that in proceedings for defamation, the categories for qualified privilege in defence of a claim include a communication made to the public on a government or political matter, including discussion of government or politics at a state or territory or a local government level. The Court also held that a publisher relying or seeking to rely on such a defence of qualified privilege must establish that his conduct in making the publication was reasonable in all the circumstances." 26 His Honour concluded with the following observations: "As it is agreed that the leaflet raises matters of a political nature I consider that it is incumbent on this court to consider the reasonableness of the defendant's conduct in respect of each of the imputations found to have been conveyed." 27 Thereafter, his Honour went on to refer to each of the imputations in turn. He did so in a context where he had stated that an assessment of "reasonableness" had to be made with respect to "each of the imputations". He did this because of what he described as an "agreement" that the "leaflet raises matters of a political nature". 28 This is no doubt a reference to the earlier passage in his Honour's judgment where he said: "The defendant agrees that the material in the leaflet exhibit A raises for [discussion] matters of a political nature." Nevertheless, that sentence was immediately followed by an acknowledgment that the Appellant's case remained that the publication was to a limited class of recipients and accordingly, that qualified privilege at common law applied in the present case. 29 The pleadings in these proceedings do not raise a defence of qualified privilege of the character identified in Lange. They do, however, plead in the alternative qualified privilege both at common law and under s22 of the Defamation Act. References by his Honour to reasonableness, said to be referrable to the Lange privilege, could equally have been applied to a rejection of the defence which was in issue before the Court under s22 of the Defamation Act. The question remains whether or not his Honour applied such a test to the defence of qualified privilege at common law and not merely to the alternative defence under s22 of the Defamation Act. 30 The reason his Honour gave for rejecting the defence of qualified privilege was the failure on the part of the Appellant to verify the accuracy of the information provided to him, which constituted a failure on the part of the Appellant to act reasonably in all the circumstances. Whilst this reference to reasonableness may have been a determinative finding with respect to the defence under s22 - which is not in issue on this appeal - it was not a material finding with respect to the defence of qualified privilege at common law. It appears that his Honour was convinced, in accordance with submissions made to him on the part of the Respondent, that the principles in Lange with respect to reasonable conduct have a direct bearing on the defence of qualified privilege at common law. This is not so. 31 The first submission of the Respondent was that his Honour should be understood to have made a finding of malice by reason of his express finding that imputation (a) was published with malice. I repeat that in the context of imputation (e), his Honour had said: "I do not consider that the defendant caused the material forming part of this imputation to be published out of ill will which he bore towards the plaintiff or from any motive other than a desire to see the plaintiff lose the by-election." 32 This finding contrasts with his Honour's reasoning in relation to imputation (a) that: "The recklessness which the defendant showed in publishing the imputation is I consider but a reflection of the ill will which I find the defendant had towards the plaintiff." 33 It is not, in my opinion, possible to conclude that his Honour made a finding of malice with respect to imputation (e). The Respondent's first submission should be rejected. 34 The second submission was that there was an implicit finding of excessive publication. The circumstances in which communications to voters in an election can give rise to the defence depend on the facts (see e.g. Lang v Willis (1934) 52 CLR 637; Templeton v Jones [1984] 1 NZLR 448; Braddock v Bevins [1948] 1 KB 580; Palmer v Belan [1999] NSWSC 187; Gatley on Libel and Slander (9th ed) pars 14.32-14.34). 35 As McHugh J said in Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 263: "It has long been established, however, that qualified privilege is not lost simply because the communication is read, seen or heard by persons having no legitimate interest in receiving the communication." 36 The extent and nature of the publication is of significance, but it is not the case that incidental publication to persons who are not voters would necessarily deprive the Defendant of the defence. (See e.g. Reynolds v Times Newspaper Ltd [1999] 3 WLR 1010 at 1052-1055; Gatley at pars 14.65-14.68.) 37 His Honour's findings of fact with respect to the nature and extent of the publication are in a narrow compass. He noted that the leaflets were posted to residents and distributed to at least one polling booth. However, there was no consideration of the evidence from the point of view of whether or not there was anything excessive about the way in which the publication was distributed. Counsel for the Respondent submitted that this Court should conclude that such a finding was implicit in his Honour's reasons. I do not believe that such a conclusion is warranted. 38 The Respondent argued that his submissions before the trial judge relied expressly, and at length, on the proposition that the publication was too wide to justify a defence of qualified privilege. He submitted that the trial judge was well aware that that was the Respondent's submission and that, accordingly, when his Honour said it was "incumbent" upon him to consider "reasonableness" that must have constituted, implicitly, a rejection of the defence of qualified privilege. 39 I do not accept that his Honour should be found to have rejected the defence in such a way. If he had done so, then his Honour would have failed to give reasons for such a decision. His Honour did give reasons in the part of the judgment I have quoted. Those reasons were directed to the issue of reasonableness. That reasoning is not determinative of the common law defence. By reason of his erroneous application of a test of reasonableness, his Honour did not need to, and in my opinion did not, determine the Respondent's case that the extent and nature of publication meant that no defence of qualified privilege was available. 40 The Respondent's third submission was that the finding that the imputation was not published reasonably defeated the Appellant's claim of privilege. It submitted that there can be no privilege attaching to unreasonable publication. This would apply the test found in s22 of the Defamation Act and the particular category of privilege recognised in Lange. However, as the reasoning in Lange itself indicates, this test is not applicable to a claim for qualified privilege at common law. 41 The Respondent also submitted that the Lange test of "reasonableness" should now be accepted as "mandatory" in the case of what was described as "widespread or multiple publications to the public", at least in the case of publication on political issues. Nothing in Lange suggests that the High Court was laying down anything in the nature of a mini-code on such matters. The Court was extending the defence of qualified privilege, it was not intending to restrict the common law defence insofar as it was applicable to publication of political matter. 42 On the cross-appeal, counsel for the Respondent submitted that it was not open to his Honour to find that publication with respect to imputation (a) was motivated by ill will, whereas publication of imputation (e) was not. Counsel directed attention to the fact that the two imputations were conveyed by the same physical document. 43 The law of New South Wales provides that the cause of action in defamation is the imputation. (See s9(1) and s9(2) of the Defamation Act.) There is nothing inherently inconsistent in a finding that two quite distinctive imputations, conveyed by different parts of the same publication on different subject matters, are not actuated by the same motive. 44 There is, in fact, a material difference in the content of the two imputations from the perspective of the relationship between the Respondent and the Appellant. In the case of imputation (e), with respect to the deception of the voters about the Respondent's alleged political past, no particular interest of the Appellant was involved. Imputation (a), however, focused on the Respondent's hypocrisy with respect to allegations against greedy developers when he himself had made exorbitant profits from developments. His Honour's express findings of fact indicate that the Appellant had a particular motivation with respect to this subject matter. His Honour found: "The defendant was a development consultant and seemed irritated and frustrated by the refusal of [Ku-ring-gai] Council to approve certain projects he had submitted on behalf of his clients. On the evidence before me it would appear that the actions of [Ku-ring-gai] Council in relation to some clients of the defendant caused the defendant to become bitter towards the plaintiff." 45 This finding of fact would be an appropriate basis for his Honour to find, if that is what his Honour intended, that with respect to one imputation the Appellant was actuated by malice, but with respect to the other imputation, he was not. 46 I would grant leave to cross appeal but dismiss the cross appeal. 47 The appeal should be allowed. The matter should be remitted to the District Court to redetermine the defence of qualified privilege to imputation (e) and, if the defence is made good, to redetermine damages. 48 The Appellant contended that any remitter should be based on all findings of fact already made, particularly the asserted finding of absence of malice. It would be artificial to remit the defence of qualified privilege in part only. The trial judge did not deal with the Respondent's contention to the effect that privilege was lost by reason of the scope of the publication. He does appear to have dealt with malice. His conclusion on the inappropriate test of reasonable publication, may have precluded a more careful analysis of malice. All aspects of the qualified privilege defence to imputation (e) should be remitted. Neither party wishes a further trial to occur. What, if any, further hearing is appropriate should be determined in the District Court. 49 The Appellant did not submit, nor seek any order, which would enable it to reassert a case for protection under s22 of the Defamation Act. 50 The Appellant asked the Court to vacate the order for costs. As the Respondent is entitled to a verdict for imputation (a), the Respondent is entitled to costs at trial. 51 The orders I propose are:

(ii) Grant leave to file the cross appeal but dismiss the cross appeal with costs. (iii) Vacate the order of the trial judge entering verdict for the Plaintiff in the sum of $70,000.

(iv) Affirm the order of the trial judge that the Defendant pay the Plaintiff's costs in the proceedings before him.

(v) Remit the proceeding to the District Court to determine whether, as alleged in paragraph 4 of the Amended Defence, the matter complained which conveyed the imputation set out in par 2B(e) of the Amended Statement of Claim, was published under qualified privilege at common law and, if so, to determine the appropriate damages for imputation (a) and to make consequential orders.

53 HEYDON JA: I agree with Spigelman CJ. **********

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.