EVATT: I'm sorry, that is correct, I've overlooked that. Because they've pleaded collectively, then they have directed their imputations in a certain direction, which is the opposite way if they'd pleaded them separately."
35 McCormick v John Fairfax & Sons Ltd (1989) 16 NSWLR 485 involved a complaint by one of three partners in a firm of private investigators of defamation based upon a newspaper article, which was said to give rise to an imputation that the plaintiff was involved in perverting the course of justice. In considering the particular type of class libel which arose in that case, Hunt J stated (at pp 487-488):
"A libel upon the whole of a class may be the subject of complaint by a member of that class who is not otherwise individually pointed to in what was published only if the matter complained of can fairly be read as defaming each member of that class. In determining whether the matter is capable of such an interpretation, the size of the class, the generality of the charge and the extravagance of the accusation may all be considered, although none is conclusive: Knupffer v London Express Newspaper Ltd [1944] AC 116 at 124. Thus, the statement that all lawyers are thieves does not permit any lawyer to sue unless there be something in the matter complained of which points to him as one of those referred to … . (However an individual may be described, even if as a member of a class, if those who look on know well who is aimed at, he has a cause of action ….) On the other hand, the statement in the present case that all three members of the plaintiff's firm were convicted SP operators clearly permits the plaintiff as one of that class to sue upon the basis of an imputation that he had been so convicted … .
In the present case, the issue is whether the plaintiff may sue as a member of a class of three in relation to the allegation that only one of that class was responsible for perverting the course of justice and for dealing with stolen property, where the matter complained of denies on its face that each member of the class was guilty of that conduct, and where there is nothing in the matter complained of itself which points to the plaintiff as the one who was guilty of that stated conduct."
36 In reply, Mr Littlemore QC, appearing for the plaintiff Respondents, stated (Appeal Tcpt, 02/07/07, p 72):
"My learned friend said that to identify the plaintiffs not only would the recipient or the reader have to know the logo of the firm, they would also have to know that the plaintiffs individually handled the building [claim]. That's not necessary at all, it's the firm that's being defamed or there are two men being defamed … ."
Mr Littlemore was then asked (Appeal Tcpt, p 73):
"Was the identification of them as partners in the firm, did all the particulars of identification go to the firm of which they happened to be partners, that was the way it was pleaded, that was the way it was found?"
Mr Littlemore agreed with that proposition but not with the proposition that it was a joint claim. That he described as a "misconception". He continued:
"There are two plaintiffs. They are not the firm. It is not the firm that is suing and they are not the firm. They happen to be the partners in the firm but the reason it is pleaded that way - and there is no rule of practice that says it's inappropriate to do it - the imputations against them are identical. Why plead exactly the same imputations in respect of the first plaintiff and then repeat them in respect of the second plaintiff?"
37 The matter is one of importance, in particular because it will determine which imputations were conveyed of whom and because it will affect the basis on which damages are assessed. In South Hetton Coal Company v North Eastern News Association [1894] 1 QB 133 at 138 Lord Esher, stating that the law of libel was the same in relation to all plaintiffs, continued:
"The question is really the same by whomsoever the action is brought - whether by a person, a firm or a company. But though the law is the same, the application of it is, no doubt, different with regard to different kinds of plaintiffs."
38 In the same case, at 141, Lopes LJ dealt primarily with a claim in libel brought by a corporation. However at 142, his Lordship stated:
"Again, in Story on Partnership, s.257, it is stated that, 'On the other hand, there is not the slightest doubt that a joint action may be maintained by the firm for any defamation of the firm, or for any libel upon the firm; for this is, justly and properly speaking, a joint tort and injury, applicable to their collective rights and interests. But in such a case the damages must be strictly limited to the injury sustained by the firm in their joint trade or business, and cannot be extended to the injury done to the private feelings of the individual partners."
39 Similar remarks were made by Kay LJ at 145 and 147. These passages from South Hetton Coal were cited with approval by Handley JA in New South Wales Aboriginal Land Council v Jones (1998) 43 NSWLR 300 at 305-306, Powell JA agreeing.
40 In the present case, if, despite the form of the pleading, there were in fact two individual claimants, there was a failure to consider the identification evidence in relation to the separate imputations, as they applied to each separately. Because, under the Defamation Act, each imputation defamatory of another person constitutes a separate cause of action, some of the imputations at least could not stand. Whether others could, would require an assessment of each individually, in relation to each plaintiff, a task undertaken neither by the trial judge nor by the parties in this Court. Accordingly, the judgments below should be set aside and, there being a substantial miscarriage of justice, a new trial should be ordered.
Assessment of damages
41 The Appellants also alleged that the damages assessed in the present case were excessive. It is clear that if the imputations have not been properly considered, there is at least a risk that damages have been awarded in respect of imputations which were not conveyed. However, there are additional reasons which support the view that damages have been wrongly assessed.
42 In the first judgment, in discussing identification, her Honour noted that it was only necessary "for the purpose of s 7A trial for at least one person to identify the lawyers referred to [in the publication] as the plaintiffs": Judgment, 01/12/04, pp 34-35. Her Honour continued:
"It is one of the vexed problems of s 7A that the extent of publication and republication and other issues may well be matters going more to damages and this is one of the difficulties with separate s 7A trials."
43 In her second judgment, in considering damages, her Honour stated at [224]:
"As to the other matters relied upon in mitigation, it cannot be a mitigating circumstance that a plaintiff has not been named, or that the extent of publication is limited. Those are matters going to general damages, not to mitigation of damages."
44 The question of identification of the individual plaintiffs was, as her Honour acknowledged, a matter of relevance in assessing damages. Apart from matters identifying the firm, such as the distinctive logo, only Ms Naomi White, the wife of one of the plaintiffs, gave evidence which identified one of the plaintiff's, namely her husband, with the litigation. Another solicitor who gave identification evidence, Mr Michael Britten, said that he knew who was the builder concerned by reference to the fact that he had gone to Queensland and because he had himself been involved in proceedings on behalf of a client against that builder. He did not identify any lawyer with Sautelle White as acting for the builder. Two other identification witnesses did, however. Mr Christopher Roberts was a real estate agent for some five years until shortly before the trial: Tcpt, 15/11/04, p 50. He was a friend of the plaintiff Mr White. He knew Mr White was the builder's lawyer through personal contact with the builder, presumably some years before when the builder was working in the Merimbula area. Mr Cowley, a jeweller with a business in Merimbula gave evidence that he was a friend of Mr Hugo White and that he identified Mr White as the builder's solicitor: Tcpt, 15/11/04, p 58. He was not asked how he was aware of that fact, but it might be inferred that he became aware of it through his friendship with Mr White.
45 This evidence would have served to identify Mr White as the person of whom many of the imputations were conveyed. However, it may be doubted whether such extrinsic facts would have been widely known, even in a small community where rumours no doubt circulated. On the other hand, the thrust of the identification evidence was based upon membership of the firm as opposed to involvement in the litigation which was the subject of the booklet. What was required, in relation to each plaintiff, was some consideration of the likely extent of the knowledge of extrinsic facts within the community, sufficient to identify one or other plaintiff with the particular imputations. This did not happen.
46 Further, had it happened, it would have been likely that none of the imputations arising from the conduct in the course of the litigation would have been conveyed of the other plaintiff, Mr Warren. Certainly the identification witnesses did not suggest that they identified Mr Warren with the booklet except in so far as they knew him to be a partner in Sautelle White. In the circumstances, the award of equal damages to both plaintiffs suggests that the claims were dealt with, consistently with the evidence, as if the imputations were conveyed in relation to the firm.
47 If damages had been awarded on an individual basis, equality would have been inappropriate. Her Honour recounted in some detail the evidence given by Mr White in relation to his response to the publication. It is sufficient to note her Honour's conclusion at [206] which was in the following terms:
"By way of general comment concerning general damages, notwithstanding the limited extent of publication, the impact of this publication on Mr White was particularly severe. Having regard to his demeanour in the witness box and his description of his years of distress, it would be fair to describe him as a broken man."
48 With respect to Mr Warren, her Honour commenced at [210]:
"Mr Warren was never a member of Sautelle White Solicitors during the period of time that Mr White acted on the conveyance for the defendants. He was not even in Australia. He moved to the south coast in 1997, when he joined Sautelle White Solicitors. In 2000 he became a partner. He normally worked in the Bega and Narooma offices."
49 Her Honour concluded that Mr Warren had a "more controlled personality" but that his "hurt ran just a deep" as the hurt to Mr White. For that reason her Honour considered damages should be "in the same range" as those appropriate to Mr White.
50 This statement shows no recognition of the fact that, unless the imputations were treated as being imputations of and against the firm, there was simply no consideration of the evidence (if there were any) which would justify a finding that particular imputations were conveyed of Mr Warren.
51 There is a further difficulty in relation to the assessment of the effect of the publication on the plaintiffs, and particularly Mr White. Prior to the first publication of the booklet in late 2003, there had been a lengthy exchange of correspondence between the Appellants and the solicitors. The correspondence was primarily relevant to a question of malice, which was relied on in answer to the defence of qualified privilege pleaded by the Appellants. The final letter, dated 24 September 2003, contained an enclosure, being a compact disc containing a version of the booklet, not as published, but including the name of the firm and the names of the plaintiffs. Her Honour stated in the second judgment "that the plaintiffs do not sue for defamation over these publications to themselves", but that they were relevant because they showed "the prior history of hostility and ill-will the defendants felt towards the plaintiffs": at [36]. The cartoons, with the names, were set out in the judgment.
52 When it came to an assessment of damages, her Honour described Mr White's response to the cartoons and the correspondence in the following terms at [197]:
"Mr White described how when these letters commenced coming he felt intimidated (T.57) and feared that the defendants would publish false information that was defamatory of the firm (T.58). He feared the defendants would go to any lengths to destroy his reputation and that of the firm if he did not cease to act for his client and to discontinue the bankruptcy application (T.59). When the threat was made to letterbox the areas of Merimbula, Tura Beach and Bega he was appalled (T.60). He tried to stop the publication by a warning letter but merely received further threats and a copy of a sample cartoon (T.60). He took these threats extremely seriously and wrote warning he would sue for defamation (T.61). The delivery of a CD-rom with a threat to publish it made him both furious and fearful. The vulture cartoon was particularly hurtful and he said it 'hurts me deeply even to look at it now' (T.65, line 67)."
53 Reliance on this material in the course of assessment of damages is consistent with Mr White being compensated for the hurt and distress caused by the correspondence and the threat of publication. It may be that there is a legitimate basis for treating those matters, or at least the threat of publication, as relevant to the distress caused by the publication itself. However, there is no explanation as to how this evidence was taken into account and there is an available inference that the damages awarded to Mr White were affected by the history of hostile correspondence dating from 15 November 1999.
Defence of qualified privilege
54 The trial judge dealt with the defence of qualified privilege in two stages. At the first stage, she sought to identify the public interest which provided the occasion for the privilege, which she held had not arisen. Secondly, and only in the event that she was wrong in that respect, she considered whether malice defeated the defence in the circumstances established on the evidence.
55 In relation to the first matter, her Honour found that the occasion was not one of qualified privilege at [121]:
"There could be no interest in the recipients in receiving such irrational and utterly false information. The language of the matter complained of is extreme, as are the imputations, and it would be fair to describe it as a smear not only of the plaintiffs but of the entire legal profession and the court system from beginning to end."
56 The conclusion reached in this paragraph may be correct, but it may be open to doubt whether the reasons are entirely persuasive. As her Honour noted, Mr White, as the relevant solicitor in Sautelle White at the relevant time, did not become involved in legal proceedings against the Appellants until after the dispute with the builder had been resolved by a Consumer Claims Tribunal. There was evidence to support the Appellants' view that the work carried out by the builder was significantly defective, beyond the extent of the defects accepted by the Tribunal. It was not necessarily irrational to think that the Tribunal had erred in fact. Nor was it entirely irrational to express surprise at the fact that a tribunal apparently established to hear small claims brought by consumers could become a forum in which service providers brought claims against consumers. Nor was it necessarily entirely irrational to conclude that there was a flaw in a legal system which allowed such a tribunal to be used by a service provider with the result that the order of the tribunal could not be challenged in any court, except on a ground of failure to provide natural justice. The Appellants may have been foolish, even irrational, in seeking to pursue challenges to the decision of the Tribunal through the Supreme Court, this Court and, by way of application for special leave to appeal, to the High Court. However, they were entitled to express, even in strong language, their views about these aspects of the legal system. That was one purpose of the publication and the fact that those within the system might see it as a "smear" of the entire system would not of itself lead to the conclusion that the occasion of the publication was not one which attracted qualified privilege.
57 More importantly, the Appellants complain of the finding with respect to malice. Her Honour concluded at [131]:
"Strong angry or intemperate words alone will not express malice; a plaintiff must go further and show the speaker used the occasion to gratify his or her malevolence. However, the clearest evidence of malice is the use of any occasion which may have been privileged for an improper purpose. The whole purpose of the defendants publishing the matter complained of was so as to induce the plaintiffs to bring pressure to bear on their own client not to enforce a regularly obtained judgment the correctness of which [had] been confirmed all the way up to the High Court. That was the real purpose as stated in correspondence. It was not their purpose to publish a book of cartoons, or to hold an art exhibition at an art gallery or as a 'warning' to others. Their whole purpose in publishing the matter complained of was to bring pressure on the [plaintiffs]."
58 There are aspects of this conclusion which are challenged. However, the findings also demonstrate the risk of overstatement to which the Appellants were not alone in succumbing. The "correctness" of the Tribunal's judgment had not been "confirmed all the way up to the High Court". All that had happened was that the superior courts had declined to set the judgment aside on the basis of the only available ground of challenge. To find that there was no denial of natural justice was not a confirmation of the correctness of the result.
59 The finding as to improper purpose was based on the correspondence. The clearest expression of the purpose in the correspondence was that to be found in a letter from the Appellants to Mr Hugo White, dated 14 February 2003. After reiterating complaints made in prior correspondence as to the immorality of the course being undertaken by Mr White on behalf of the builder, the letter concluded:
"We will not only strongly oppose your latest attempt to declare us bankrupt, but we will also make sure that the entire local community is aware of the immoral conduct of your legal firm.
This letter, together with a clear cartoon of your personal involvement will be delivered to every mailbox in Merimbula and Bega.
You may win your dirty legal battle, but we'll beat you on the street."
60 The Appellants' complaint, however, was that the finding of malice in relation to publication based on that improper purpose was not properly available on the facts. The purpose expressed in the correspondence was to bring pressure to bear on the solicitors not to enforce the orders through the process of bankruptcy, as also expressed in the letter of 31 October 2003 to Mr White, quoted in part by her Honour at [47]. However, whilst the threat of publication might demonstrate such a purpose, the fact of publication was most unlikely to have been directed to the same purpose. It might have demonstrated a different improper purpose, namely to exact vengeance on the plaintiffs for the harm that they had done, but that was not the purpose identified by the trial judge.
61 Counsel for the Respondents on the appeal accepted that "it was never our case and it was not particularised to be our case that the motive was to intimidate the plaintiffs into persuading their clients to drop their case": Appeal Tcpt, 02/07/07, p 60. Accepting that the trial judge erred in the findings she made, he contended that there was an absence of belief in the truth of the publication and a dominant desire to injure, which demonstrated malice.
62 Because the proceedings should be remitted for retrial on grounds unrelated to the defence of qualified privilege, it is not necessary or appropriate to consider this further submission. Although the alternative finding was not raised by way notice of contention, it may have been available to demonstrate that there was no substantial miscarriage of justice resulting from the particular error. There being other errors which do involve such a miscarriage, this matter need not be pursued.
Conclusions
63 In the circumstances set out above, the following orders should be made: