MAXWELL-SMITH v WARREN & ANOR

DECISION: (3) Direct that the costs of the first trial in the District Court abide the outcome of the new trial.

(4) Order the Respondents to pay the Appellants' costs of the proceedings in this Court.

(5) Grant the Respondents a certificate under the Suitors Fund Act 1951 (NSW) in respect of the costs of the appeal.

DAMAGES - whether assessment of damages excessive - whether damages assessed with respect to plaintiffs on individual basis or jointly CATCHWORDS: DEFAMATION - publication about firm of solicitors by former clients - identification evidence - pleadings and particulars alleged defamation of partners individually not jointly - whether defamatory imputations conveyed with respect to the firm or the firms partner's individually

LEGISLATION CITED: Defamation Act 1974 (NSW), ss 7A, 9, 13, 15, Part 3, Div 7

McCormick v John Fairfax & Sons Ltd (1989) 16 NSWLR 485 CASES CITED: New South Wales Aboriginal Land Council v Jones (1998) 43 NSWLR 300 South Hetton Coal Company v North Eastern News Association [1894] 1 QB 133

Eugene MAXWELL-SMITH - First Appellant PARTIES: Inge MAXWELL-SMITH - Second Appellant Andrew Stuart WARREN - First Respondent Hugo Patrick WHITE - Second Respondent

COUNSEL: C.A. Evatt -Appellants S.M. Littlemore QC/E.G. Petersen - Respondents

SOLICITORS: Appellants in person Andrew Warren Associates, Bega - Respondents

LOWER COURT DATE OF DECISION: 1 December 2004; 30 June 2006

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40466/06 DC 2443/04

MASON P HODGSON JA BASTEN JA

3 October 2007 MAXWELL-SMITH v WARREN & ANOR Headnote The Respondents, Mr Warren and Mr White, are two solicitors who were partners in a legal practice known as "Sautelle White", on the south coast of New South Wales. Mr White had been a partner at the firm from before 1995, but Mr Warren only became a partner at the firm in 2000. The Appellants, Mr and Mrs Maxwell-Smith, were clients of Sautelle White, which acted for them in purchasing a property at Tura Beach. The Appellants paid into the firm's trust account the proceeds of the sale of their previous home, which were intended to be used to cover the cost of building a new home at Tura Beach.

In August 1995, the Appellants entered into a home building contract with a builder, S & E Hall Pty Ltd, and instalment payments under the contract were made from the Sautelle White trust account. When the work was near completion, a dispute arose between the Appellants and the builder, as a result of which the final payment was not made. The builder took the dispute to the Consumer Claims Tribunal, which made an order on 29 August 1997 for payment of most of the outstanding instalment. Shortly afterwards, the directors of S & E Hall Pty Ltd moved interstate and retained Sautelle White to recover the amount ordered by the Tribunal from the Appellants.

The Appellants challenged the orders of the Tribunal through litigation but were unsuccessful, leading to further costs orders against them. Sautelle White took steps to recover costs incurred by them on behalf of the builder.

In late 2003, the Appellants published a booklet containing cartoons and text, which can be described as a diatribe against, amongst others, a firm of solicitors called "Friendly Local Lawyers". The logo of Friendly Local Lawyers in the publication was in a similar format to that of Sautelle White.

In 2004 the Respondent commenced proceedings against the Appellants for defamation in the District Court. On 1 December 2004, the trial judge found that the plaintiffs were sufficiently identified in the publication and that certain defamatory imputations were conveyed. In a further judgment of 30 June 2006, the trial judge dismissed the defences raised under both general law and the Defamation Act 1974 (NSW). The trial judge made an award of damages in the sum of $250,000 in favour of each of the Respondents.

The Appellants appealed against this decision on the basis that the trial judge erred in relation to liability, damages and the defence of qualified privilege.

The Court held, allowing the appeal: (Per Basten JA, Mason P and Hodgson JA agreeing)

1. The case as pleaded by the Respondents at trial alleged that certain statements in the booklet were defamatory not of each of the plaintiffs individually, but of them jointly: [12]. The trial judge failed to consider the identification evidence in relation to the separate imputations as they applied to each individual claimant. There being a substantial miscarriage of justice, the judgments below should be set aside and a new trial should be ordered: [40]. McCormick v John Fairfax & Sons Ltd (1989) 16 NSWLR 485; South Hetton Coal Company v North Eastern News Association [1894] 1 QB 133 considered.
2. The trial judge failed to consider the likely extent of knowledge of extrinsic facts within the community sufficient to identify one or other plaintiff with the imputations: [45]. If damages were awarded on an individual basis, the award of equal damages to each plaintiff would in the circumstances have been inappropriate: [47].

3. Because the proceedings should be remitted for retrial on grounds unrelated to the defence of qualified privilege, it is not necessary to consider the submissions made relating to the defence: [62].

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40466/06 DC 2443/04

MASON P HODGSON JA BASTEN JA

3 October 2007 MAXWELL-SMITH v WARREN & ANOR Judgment 1 MASON P: I agree with Basten JA. 2 HODGSON JA: I agree with Basten JA 3 BASTEN JA: The Respondents to this appeal (Mr Andrew Warren and Mr Hugo White) are two solicitors who, in March 2004, were partners in a practice on the south coast of New South Wales then known as Sautelle White and prior to May 2000 as "Sautelle and White". Although the firm operated from offices in a number of towns, their principal place of business appears to have been Merimbula. The Appellants (Mr and Mrs Maxwell-Smith) were, at least in 1995 and possibly thereafter, clients of the firm, which acted for them in purchasing a property at Tura Beach. 4 For the purposes of the purchase, the Appellants paid into the solicitor's trust account the proceeds of the sale of a previous home in Jindabyne. It appears that, having paid for the block of land, the proceeds of the earlier sale were intended to cover the cost of building a home at Tura Beach. 5 On 3 August 1995 the Appellants entered into a home building contract with a contractor, S & E Hall Pty Ltd ("the builder") in an amount just under $280,000. Instalment payments under the building contract were made by cheque drawn on the funds held by Sautelle and White in its trust account. Towards the completion of the work, a dispute arose between the Appellants and the builder as a result of which the final payment was not made. The dispute was taken by the builder to a Consumer Claims Tribunal and an order was made for payment of the outstanding instalment on the contract, less some small allowances for incomplete or inadequate work. 6 Shortly after the Tribunal proceedings, in which the builder had acted through its directors, Stephen and Elizabeth Hall, Mr and Ms Hall left the south coast for Queensland. Before leaving they retained Sautelle and White to recover the judgment resulting from the order of the Tribunal, handed down on 29 August 1997. 7 Over the years, from 1997 until 2003, the relationship between the Appellants and Sautelle and White (later "Sautelle White") became highly acrimonious. Litigation ensued, in which the Appellants sought to challenge the orders of the Tribunal, but were unsuccessful, leading to further costs orders against them. Sautelle and White took steps to recover costs incurred by them on behalf of the builder. 8 In late 2003, the Appellants prepared and published a booklet of some 40 pages of which about half contained pictures or cartoons which, together with the script, can shortly be described as a diatribe against the Consumer Claims Tribunal, the Department of Fair Trading, the courts, other bodies such as the Law Society and the Legal Services Commissioner and, of particular relevance for the present proceedings, a firm of solicitors described as "Friendly Local Lawyers". The words "Friendly Local" were in capital letters in a box which was white with black lettering on the left and black with white lettering on the right. The word "Lawyers" was in lower case italic lettering under the right-hand side of the box. This format reflected the "logo" of Sautelle White, as it appeared on their office building in Merimbula and on their letterhead. There was evidence from four witnesses who identified the references to "Friendly Local Lawyers" in the publication as references to Sautelle White. That identification evidence was not challenged on the appeal. The logo had apparently been adopted in or about May 2000 when the firm took that name. 9 In 2004 the Respondents, being the two partners in Sautelle White at the time of publication, commenced proceedings for defamation in the District Court in relation to the booklet, against the Appellants (the defendants in the proceedings below). On 1 December 2004 the trial judge, J C Gibson DCJ, gave judgment in relation to the matters to be determined under s 7A of the Defamation Act 1974 (NSW) ("first judgment"). Her Honour found that the plaintiffs were sufficiently identified in the publication, although not named therein, that certain imputations as pleaded were conveyed and that the imputations were defamatory. 10 In a further judgment delivered on 30 June 2006 ("second judgment") her Honour dealt with a number of defences including a justification of substantial truth pursuant to s 15 of the Defamation Act, and qualified privilege, both under the general law and pursuant to s 22 of the Defamation Act. In addition, her Honour dealt with a defence that in the circumstances of the publication the plaintiffs were not likely to suffer harm, as provided by s 13 of the Defamation Act. Finally, her Honour considered a defence of fair comment as permitted by Part 3, Div 7 of the Defamation Act. Each of the defences was dismissed. 11 In the same judgment, her Honour considered the question of damages, in relation to each plaintiff separately awarding, including an amount by way of aggravated damages, the sum of $250,000 to each plaintiff. Case as pleaded 12 To establish that the booklet was published "of" the plaintiffs, for the purposes of s 9 of the Defamation Act, the plaintiffs pleaded particulars of identification which set out a number of references in the publication which were said to identify the firm in which the plaintiffs "are the two partners". With the possible exception of the reference to the "friendly local lawyer" who appears on ABC Radio at Bega, each of the particulars of identification identified the firm and not the individuals. 13 The statement of claim then pleaded that the booklet "carried the following imputations", which were defamatory of the plaintiffs:

(a) that they are dishonest lawyers; (b) that they are guilty of unethical conduct; (c) that they overcharge for their services; (d) that they are untrustworthy; (e) that they victimised the defendants; (f) that they are guilty of immoral conduct; (g) that they are guilty of unconscionable conduct; (h) that they caused the death of persons who where their clients. 14 The imputations were particularised by reference to 13 identified pages of the booklet. Any claim for special damages, or for damages by way of a general loss of business or custom, was expressly eschewed. There was, however, a claim for aggravated damages on the basis that the defendants knew of the falsity of the imputations and were actuated by deliberate malice in publishing them, being motivated by a wish for revenge. 15 There were respects in which the pleading was imprecise or ambiguous. For example, because the particulars of identification referred almost entirely to the identification of the firm, it might have been thought that the claim was being brought on behalf of the firm for damage suffered by the firm. That impression was strengthened by pleading, not that the statements in the booklet were defamatory of each of the plaintiffs, but of them jointly. In addition, there was a temporal issue. It was clear from the text of the booklet that the story being related involved events which occurred at specific points in time occurring over a number of years. If it were intended to show that each of the plaintiffs individually was a person of whom the imputations were conveyed, it might have been necessary to identify particulars of identification specific to the conduct complained of which gave rise to each imputation. 16 For example, the first page of the booklet which was particularised contained an allegation that the final payment for the construction work had been demanded by the builder before the work was completed because he did not trust the defendants, they having closed their trust account with Sautelle and White. The booklet stated: "The only person who knew about the closure of the trust account was the friendly local solicitor, but he had the obligation to keep his clients' information to himself. However, the builder was a good friend of this solicitor and a slip of the tongue like 'have you been paid in full already?' could have been the cause of the loss of trust by the builder." 17 Although this statement is to be found in the singular, there may have been a number of people within the firm who knew that the trust account had closed. A reasonable reading of the paragraph could have given rise to an imputation that the firm failed to maintain proper client confidentiality. 18 In order to find an imputation in that regard in relation to the two individual plaintiffs, it would be necessary to identify the time at which these events were said to have occurred and their roles within the firm at that time. 19 From time to time, the trial judge appears to have recognised this fact, but only when it impinged on the case presented for the defendants. Thus, the defence asserted that the imputations were true in a number of respects, including, as set out at [78]: "(a) The plaintiffs acted as solicitors for the defendants, and gave them advice, in relation to their contract with the builder. (b) The plaintiffs assured the defendants that they would safeguard their legal interests in connection with the building work." Of that pleading, her Honour noted at [80]: "There are a number of problems with this defence. First, these particulars suffer from a number of defects: (i) They are pleaded globally to all of the imputations and no attempt has been made to identify with precision the conduct relied upon to show the defendants are dishonest (as opposed to untrustworthy). (ii) They are pleaded jointly against both plaintiffs although a number of the particulars can only relate to one plaintiff. For example, the second plaintiff was not even employed by Sautelle White at the time of the conduct referred to in paragraphs (a) and (b)." 20 On the other hand, when it came to identification evidence, it is clear that the basis for identifying the plaintiffs, which was common to all four witnesses called by the plaintiffs, was the use in the publication of the logo which was associated with the firm Sautelle White from some years after this conduct: Judgment, 01/12/04, pp 32-33. No comment was made in that regard in either judgment. 21 The ambiguity about the factual findings in this regard flowed from the details of extrinsic facts which appear to have been taken from a letter sent by Sautelle White, the then solicitors for the plaintiffs, dated 12 October 2004, in which they purported to set out what they understood to be the grounds of defence and the reply to their notice to admit facts. The summary of the latter document headed "Notice disputing facts" suggested that the defendants disputed the following fact namely: "That each of Christopher Roberts, Michael Britton and Naomi White knew the following, or sufficient of the following, to identify the Plaintiffs as the persons referred to in the matter complained of: (a) the Plaintiffs are two partners in the firm Sautelle White Lawyers, which: (i) is a local solicitor in the area where the booklet was published; (ii) represented the builder of the Defendants' house; (iii) maintained a trust account for the Defendants; (iv) advertised a 'No win, no fee' service in local media; (v) served a bankruptcy notice on the Defendants, seeking payment of legal costs; (vi) appeared on ABC Radio, Bega; [(vii)] identified itself with a logo of black and white panels with the name 'Sautelle White' in white and black panels, and the word 'lawyers' underneath in italics." 22 These were the seven extrinsic facts pleaded, as relied upon by the three named identification witnesses, to whom was apparently added at trial a Mr Cowley. 23 It is clear from this form of the particulars of identification that each particular relates to the firm: thus the plaintiffs simply sought to rely upon the fact that they were "the two partners" in the firm, as at the date of publication, namely March 2004. It may be accepted that this was well-established. However, it is clear from the material in the publication, and from the evidence given at trial that Mr Warren at least had not been a partner, or even an employee of the firm, for much of the period over which the conduct complained of occurred. That might not matter if the proceedings were brought on behalf of the firm: it does matter in relation to the pleadings by the two plaintiffs as individuals. For the purposes of s 9 of the Defamation Act, they must establish that each of the imputations was conveyed "of" him as an individual. The publication itself makes clear that the events of which it speaks took place over at least seven years. The evidence given by Mr Warren was that the firm first started using the logo in about May 2000: Tcpt, 15/11/04, p 63. That was shortly after he and Mr White became the only partners of the firm. Conduct of trial: identification 24 The evidence concerning identification was given in relation to the time at which each witness read the book. Thus, for example, Mr Michael Britten was asked (Tcpt, 15/11/04, p 44): "Q. When you read the book, to whom did you think it referred, when it was dealing with local lawyers? A. I felt it referred to Sautelle and White, solicitors, being in Merimbula, the area that we work in. Q. Did you know who the partners of that firm were? A. Yes, I did. Q. Who were they? A. Mr Warren and Mr White." 25 Unsurprisingly, Ms Naomi White, who was the wife of the one of the plaintiffs, was able to identify aspects of the book as referring to Sautelle White. She identified a number of aspects of the publication, in part because she knew about her husband's activities in relation to the litigation. After noting that she had bought a copy of the book and taken it home and read the entire contents, she gave the following evidence (Tcpt, 15/11/04, p 77): "Q. Did you understand it to refer to any person you knew? A. I understood it very clearly to refer to the solicitors at Sautelle White Lawyers, Hugo [White] and Andrew [Warren]. Q. What in particular led you to that conclusion? A. There were many things. The use of the logo. … Q. Did you personally need to go past recognition of the logo to draw your conclusion? A. No, I recognised that from several paces away." 26 Again it is clear that the identification evidence was being led by reference to the firm and to the plaintiffs as the partners in the firm at the date of publication. Conduct of trial: imputations conveyed 27 The imputations relied upon are set out at [13] above. The first was that the plaintiffs were "dishonest lawyers". Her Honour identified the pages of the booklet relied upon in support of that imputation being conveyed as pages 12, 13, and 20. Her Honour, however, identified "the strongest passages" as the complaint (at p 30) that the "Friendly local solicitor ignored" six of the 12 recommendations contained in a 1994 Statement of Ethics put out by the Law Society requiring that solicitors act "fairly, honestly and diligently in all dealings": first judgment, p 15. (Her Honour relied upon the same material to establish the second imputation, namely that the solicitors had been guilty of "unethical conduct".) Her Honour identified the second of the "strongest passages" as a reference to the establishment of the Legal Services Commissioner's Office, which, the publication stated, "was introduced to guard against dishonest or unconscionable lawyers". How an imputation was said to be conveyed by that statement, read in its context, against each of the plaintiffs is unclear, as is the question of the particular conduct said to be dishonest. However, the conduct referred to by her Honour as having been relied upon in submissions all occurred before the "seven years of court battles" referred to on page 20 of the booklet and hence before Mr Warren came to the firm. 28 It is not necessary to multiply examples, but, in relation to the fourth imputation namely that the plaintiffs "are untrustworthy" her Honour stated at p 19: "Essentially I note at p 30 that the friendly local solicitor ignored his ethical duty to be 'trustworthy' and I note the other references listed by the plaintiff [sic] at p 2, 6, 7, 10, 12, 13, 20, 34 and 36 which basically recite how the solicitor who had originally acted for the innocent retired couple and looked after their trust account (p 12) was now in the builder's camp because as the friendly local lawyer is shown on p 13 saying, 'I trust builders more than my clients'." 29 Again, there is no attempt to identify how the relevant imputation based on this conduct was conveyed in relation to Mr Warren except as a partner of the firm many years after the conduct occurred. Clearly neither the plaintiffs nor the trial judge attempted to undertake such a task. 30 The question whether this claim was intended to be pursued as a "class libel" was identified in the course of the first trial in relation to the issues arising under s 7A, and was noted by her Honour in her first judgment at p 25, in the following terms: "An attempt has been made this morning to assert that there are a number of other persons who are identifiable as members of a class and this is some form of class liable [sic] in that it's asserted that since 1995 there are a vast number of lawyers who have been employed by this firm of solicitors, the friendly local lawyers or Sautelle White Lawyers." 31 In relation to this assertion her Honour 'formally noted' that "even if I were satisfied that there were a number of people employed by Sautelle White Lawyers in the class I have no information as to how many people are asserted to be in this vast number of the kind which would make it impossible to identify the plaintiffs": pp 25-26. Her Honour held that "whether or not there are other persons in the class the plaintiffs [are?] identified" for reasons which have been noted, namely that they were sole partners in the firm at the date of publication. 32 Because of the somewhat unsatisfactory procedure, pursuant to which the trial was divided into two separate hearings, evidence in relation to the size and staff of the firm was not given in any detail until the second part of the trial, when Mr Warren gave evidence, which her Honour accepted (Tcpt, 21/04/06, p 151): "In 2000 when I became a partner in the firm we had two offices in Merimbula and Bega only. The office in Bega was a very small office, we had 12 employees. By the time the material was published by Mr and Mrs Maxwell-Smith we had 25 employees, we had four offices …." 33 There was no evidence as to how many of the staff were solicitors, either before or after 2000. Nevertheless, there was a letterhead in evidence from 1998 which listed two partners, two associates and two consultants (at a time when Mr Warren was an associate). It is clear from the way the case was presented that this material was treated as irrelevant. Issue as dealt with on appeal 34 The original notice of appeal filed by the Appellants, when acting for themselves, failed to identify specific grounds. An amended notice of appeal was filed on 4 April 2007 and was the basis of submissions in this Court. Further, in the course of argument, it was put to counsel for the Appellants "that all they've proved was a defamation of the firm": Appeal Tcpt, 02/07/07, p 14. Mr Evatt, appearing for the appellants, agreed and added "therefore the identification fails". The following exchange then occurred: "HODGSON JA: I thought your submission was, they have provided identification of the firm--

HODGSON JA: --but not of any individual within the firm, and I would've thought Gatley would suggest that that means individuals can't recover damages for hurt feelings.

I don't understand there can be a joint cause of action, except in the case of a partnership or something like that. So that if they were to recover individual damages, they'd have to plead the separate defamations and that would raise the [McCormick?] style identification problems, which have not been grappled with.

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:

(1) Allow the appeal and set aside the judgments of 1 December 2004 and 30 June 2006 and the orders numbered 1-3 made on 25 August 2006 in the District Court.

(2) Direct that the matter be remitted to the District Court for a new trial.

(3) Direct that the costs of the first trial in the District Court abide the outcome of the new trial.

(4) Order the Respondents to pay the Appellants' costs of the proceedings in this Court.

(5) Grant the Respondents a certificate under the Suitors Fund Act 1951 (NSW) in respect of the costs of the appeal.

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.