Middendorp Electric Co Pty Ltd v Sonneveld [2001] VSC 312

5. The proceeding came on for hearing on 25 November 2000, and Ashley J granted leave to the plaintiff to discontinue its claim pursuant to the Rules. No order for costs was made.

8. The defendant, in his first defence, made a claim for damages for defamation against the plaintiff. The defence and counterclaim was subjected to a number of strike out applications and eventually, the defendant filed another defence and counterclaim on 13 October 1999. It is that counterclaim which is the subject of this proceeding.

12. The plaintiff, Middendorp Electric Co Pty Ltd ("Middendorp"), is a large wholesale supplier of electrical parts and equipment through a variety of outlets in this State. It mainly sells its products to electricians and electrical contractors. At all relevant times, it had a store at Hastings, and also stores at Frankston and Mornington, which are located approximately 20 kilometres from the Hastings store.

15. The defendant, David Sonneveld ("Mr Sonneveld"), is and was, at all material times, a licensed electrical contractor who, for many years prior to February 1997, had a running account with Middendorp at its Hastings shop. In February 1997, Mr Sonneveld traded in partnership with his wife under the name of Jade and other names, as an electrical contractor. From time to time, the firm engaged other electricians and electrical contractors to assist it with its work.

18. Mr Sonneveld counterclaims, seeking damages from Middendorp for alleged slander and injurious falsehood, arising out of a conversation which occurred on or about 2 February 1997.

22. On 31 January 1997, the head office of Middendorp in Brunswick sent an account to Mr Sonneveld for the period ending 31 January 1997. Across the base of the account was the word "OVERDUE". The document revealed that the sum of $4,129.34 had been outstanding for a period of 90 days or longer. The total amount of the indebtedness was $11,822.23. At that time, the credit arrangement for Mr Sonneveld was "strict 90 days" maximum. According to the terms, should his account exceed 90 days at any time, his account would incur the status of "stop credit" until the arrears were paid.

25. On any view, the account was overdue, contrary to the trading terms, and Mr Sonneveld owed at least the sum of $4,129.34.

28. On 2 February 1997, or thereabouts, a conversation took place between an employee of Middendorp, Mr Paul Smith, at the Hastings shop, with an electrical contractor, Mr Paul Dawson. On that day, Mr Dawson was performing work for Mr Sonneveld. It is alleged that Mr Smith told Mr Dawson words to the effect that, Mr Sonneveld was not paying his sub-contractors and "make sure you get your money in each week because Dave Sonneveld is a slow payer".

31. Mr Dawson, on returning to the site, told Mr Sonneveld what Mr Smith had said. Later that day, discussions took place between Mr Sonneveld and Mr Smith and also between Mr Sonneveld and the manager at Middendorp Hastings, Mr Graeme Lincoln. It is clear that Mr Sonneveld was upset by what had been said, and it appears that he threatened to take Middendorp to court.

34. Mr Sonneveld retained a firm of solicitors, a letter was sent demanding an apology with a draft attached, but nothing was resolved.

37. In March 1997, Middendorp wrote letters demanding that Mr Sonneveld pay his account, and at the beginning of April 1997, issued and served a complaint in the Magistrates' Court at Melbourne seeking the recovery of the sum of $11,822.23. Mr Sonneveld was annoyed by this complaint, as it was his opinion that he was not liable to pay the full amount because of the terms of his credit arrangement.

40. During March-April 1997, discussions and correspondence took place between Middendorp and Mr Sonneveld in an endeavour to settle the dispute, but to no avail.

43. On 9 May 1997, a round table conference took place between the parties and their respective lawyers, but nothing was achieved.

46. Mr Sonneveld decided to take matters into his own hands, and prepared a circular, which he forwarded to his solicitor for consideration and correction. Evidently, the solicitor, Ms Jillian Brann, told him not to send it as it was defamatory. Mr Sonneveld sent a copy of the document to Middendorp.

49. The document, on its face, was defamatory of Middendorp. On 12 May 1997, it issued a writ and obtained, on the same day, an ex parte injunction from Beach J restraining Mr Sonneveld from distributing it. The summons was returnable on 19 May 1997, when Mr Sonneveld appeared. His Honour continued the injunction and adjourned Middendorp's summons to 16 June 1997. Mr Sonneveld did not appear before Chernov J on that date, and His Honour granted the injunction, pending the determination of the proceeding or further order, and ordered Mr Sonneveld to pay the costs of the day.

52. By this time, Mr Sonneveld had engaged the services of the Electrical Trades Union and representatives of the Union, and Middendorp negotiated a settlement in principle but Mr Sonneveld rejected the terms.

55. Mr Sonneveld did not file a notice of intention to defend in the Magistrates' Court, and on 17 July 1997, an order was made against him in the sum of $11,822.23, together with interest of $457.47 and costs in the sum of $654.50, in default of filing the notice of defence. Mr Sonneveld did not seek to have the order set aside.

58. Middendorp's proceeding did not progress until the Litigation Support Group revived the proceeding in September 1998.

61. The plaintiff filed its statement of claim on 19 October 1998, and Mr Sonneveld filed his defence on 21 December 1998 and pleaded a counterclaim. Middendorp sought a permanent injunction but did not seek any damages. As I have already stated, his defence and counterclaim were subjected to a number of interlocutory attacks and eventually, he filed an amended defence and counterclaim on 13 October 1999. That is the counterclaim before the Court.

64. Middendorp, at the trial before Ashley J, on 22 November 2000, successfully applied for leave to discontinue its proceeding and Mr Sonneveld's counterclaim was adjourned.

68. Mr Sonneveld has not had a solicitor for some years, and has prepared his pleadings and other court documents himself. He appeared unrepresented at the hearing.

71. The counterclaim is hardly a model pleading, and is defective in a number of respects.

74. With respect to the claim in slander, he has failed to identify to whom the words were allegedly spoken, he has not pleaded that they were published of him or of him in the way of his business, nor has he pleaded the alleged defamatory imputations. Whilst alleging that he was seriously damaged, he has not pleaded any special damage. He has not pleaded that the alleged slander was actionable per se.

77. He was requested to give particulars of damage, and he responded in his further and better particulars by stating -

"6. Damages for the defamation of my professional standing and reputation including loss of income and potential income from trading in the manner I was until aged 65 years could amount to M$100 as I was moving into International projects."

81. In his relief clause, he claims damages for defamation in the form of slander. There is no reference to damages for injurious falsehood.

84. However, arguably, he also makes a claim for damages for injurious falsehood. He has asserted in his counterclaim that the words spoken by Mr Smith were false and malicious, that they were calculated to cause pecuniary damage and that he has seriously suffered damage, including considerable distress and embarrassment. The statement of claim is defective, in that it does not claim special damages, which is essential to aver and prove in a claim for injurious falsehood.

87. Despite the deficiencies in the counterclaim, it appeared to me that the counterclaim did plead the two causes of action, and Mr Sonneveld informed the Court that he wished to claim damages pursuant to both causes of action. Mr Panna stated that he thought the claim was for slander, but I did point out to him that paragraph 7 asserted an alternative claim, namely, that the "said words were calculated to cause pecuniary damage to I the defendant in my said business".

90. Accordingly, I told Mr Panna and Mr Sonneveld that I would proceed on the basis that he was also making a claim for injurious falsehood.

93. In its defence to the counterclaim, Middendorp, whilst putting Mr Sonneveld to his proof, admitted that Mr Smith was employed as a salesman at the Hastings branch, and that he did tell Mr Dawson words to the effect that he should get his money in, as Mr Sonneveld was a slow payer, and to be careful. Middendorp claims that the publication was protected by qualified privilege, and alleged that Mr Sonneveld has not suffered any loss or damage by reason of the words spoken. It is also contended by Middendorp that the words were not capable of bearing any defamatory meaning.

96. Finally, Middendorp has pleaded certain facts in mitigation of damage, namely, that in December 1996, Mr Sonneveld refused to pay a sub-contractor and the latter informed electricians in the area that he had refused to pay; also that he was a difficult person to work for. Secondly, that on 14 April 1998, Mr Sonneveld was convicted at the Magistrates' Court of three charges of stalking the said sub-contractor, Mr Adrian Bricknell, by falsely and publicly accusing him of being a paedophile and publishing a notice in the Hastings area asserting that he was a paedophile. It is contended that Mr Sonneveld had the reputation of a common, vicious liar and a person with whom decent people would not want to have any dealings. In fact, Mr Sonneveld was convicted of two charges.

99. I did raise with Counsel whether it was open to Middendorp, in answer to the claims, to plead and rely upon the first category of facts in mitigation in the absence of any plea of justification. The facts pleaded refer to a specific instance rather than facts concerning general reputation. It will be necessary to consider the issues hereafter.

103. In order to prove a case in slander, it is necessary for a plaintiff to prove -

(i) that the words complained of were published of the plaintiff;

(ii) that the words were defamatory of him;

(iii) that the defendant was responsible for the publication; and

(iv) unless the words are actionable per se, that the plaintiff suffered special damage.

109. It is contended by Mr Sonneveld, even though it does not appear in his pleading, that the words are actionable per se, in that the words disparaged him in the way of his trade, business and calling. If the plaintiff proves that the words complained of affect the plaintiff in his trade, business or calling and directly tend to prejudice him, then the plaintiff does not have to prove actual damage. The words must be shown to have been spoken of the plaintiff in relation to his trade, business or calling and to be such as would prejudice him therein. See Alexander v Jenkins (1892) 1 QB 797 at 800.

112. Mr Sonneveld has not alleged any special damage.

115. Even though Mr Sonneveld has not alleged, in his counterclaim, that Mr Smith was acting in the course and scope of his employment when he spoke the words complained of, nevertheless, it was accepted by Middendorp that, at all relevant times, he was acting in the course and scope of his employment.

118. In answer to the allegations made, Middendorp does not deny that the words complained of were published of Mr Sonneveld or that Middendorp was responsible for the publication. However, it denies that the words were defamatory of him and further denies that the words were spoken in reference to Mr Sonneveld's trade, business or calling. It is asserted that he is not entitled to damages in the absence of evidence of any special damage.

121. In addition, Middendorp alleged that the words were spoken on an occasion which is protected by qualified privilege.

124. A plaintiff seeking damages for injurious or malicious falsehood has to prove -

(i) that the words complained of were untrue;

(ii) that they were published maliciously; and

(iii) that the plaintiff suffered special damage.

130. It is necessary to prove special damage. Compare the position in England where statute has changed the law obviating the necessity to prove special damage in cases, inter alia, where the words are calculated to cause pecuniary damage to the plaintiff in respect to his calling or trade. See s.3 of the Defamation Act 1952 (England).

"That an action will lie for written or oral falsehoods, not actionable per se, nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage, is established law. Such an action is not one of libel or of slander, but an action on the case for damage, wilfully and intentionally done without justification or excuse, analogous to an action for slander of title. To support it, actual damage must be shown for it is an action which only lies in respect of such damages as actually occurred." - See Ratcliffe v Evans (1892) 2 QB 524 at 527. (Emphasis added).

137. Also see Royal Baking Powder Company v Wright (1900) 18 Rep Pat Cas at 104 per Lord Halsbury LC, and also Sungravure Pty Ltd v Middle East Airlines [1975] HCA 6; (1975) 134 CLR 1 at 13-14.

140. Actual damage is the gist of the action - see Ratcliffe v Evans, supra, at pp.531-2.

143. Middendorp has put Mr Sonneveld to his proof in respect of this claim, denying that the words were defamatory or that they were published maliciously, and further alleging that he did not suffer any special damage.

146. The defence of privilege is open in an injurious falsehood claim as in an action for defamation. See Wren v Weild (1869) LR 4 QB 730 at 737, and Halsey v Brotherhood (1881) 19 Ch D 386 at 388.

149. But it appears that the defence is only open in slander of title claims. That is, words which disparage a person's title to any property, real or personal. The two authorities just mentioned were slander of title claims. It is difficult to see how the defence could be open in an injurious falsehood claim, where the words injure a person in the way of his business, trade or calling, because it is necessary for a plaintiff to prove malice. As a matter of principle, malice defeats a defence of qualified privilege. If the plaintiff has already proven malice, then the defence is defeated before it is considered. Compare the 8th ed. of Gatley on Libel and Slander with the 9th ed., paragraphs 310-11 and 20.19 respectively.

152. Mr Sonneveld, in his reply, put in issue all matters pleaded in the defence, but did not plead malice as an answer to the qualified privilege defence.

155. However, as he has pleaded falsity and malice in his statement of claim, and further, the defendant to the counterclaim, Middendorp, has pleaded in its defence that the words were spoken without malice towards Mr Sonneveld, in my opinion, it is open to him to argue that if qualified privilege is established, it has been defeated by malice, even though he should have pleaded it in his reply.

159. Mr Sonneveld called a number of witnesses in his case who are, or were, former employees of Middendorp. In addition, he gave evidence. He also called a number of electrical contractors who operated in the Hastings area during 1996-1998.

162. Mr Sonneveld is one of those witnesses whose evidence has to be carefully scrutinised and weighed. He is clearly very bitter, as a result of the dispute with Middendorp, and feels that he has been badly done by. However, the way he gave evidence tended to suggest that he would say anything, on oath, if he thought it would assist his case. He informed the Court that at the hearing on the return of the interlocutory summons for an injunction before Beach J, Mr Panna, an experienced member of Counsel, informed His Honour that Middendorp was claiming M$80 for damages for defamation. At that stage, there was no evidence of publication of the circular prepared by Mr Sonneveld and his solicitor, save to Middendorp itself, and Middendorp made application in order to restrain Mr Sonneveld from publishing the contents to anyone. There would be no basis for damages. On any view, to make such an assertion was unnecessary on an application for an interlocutory injunction, but it is bordering on absolute nonsense to suggest that anybody could claim M$80 for damages for defamation where there had been no publication. I raised these matters with Mr Sonneveld when he gave his evidence, suggesting that if it had been said, Beach J would have said, "It was rubbish", and further, that it was unlikely that any counsel would ever say that. Despite my clear indication to him that I did not believe his evidence, he reasserted on oath that in fact it had been said. Later, when cross-examined by Mr Panna, he was unsure whether Mr Panna said it to the Court or only to Mr Sonneveld. I reject his evidence. It was untrue.

165. He also did not miss an opportunity to run down Mr Bricknell in evidence, and I had to warn him that it was not appropriate for him to make wild allegations of criminal wrongdoing against Mr Bricknell in the Court when such allegations were irrelevant.

168. On 14 April 1998, Mr Sonneveld was convicted at the Frankston Magistrates' Court of two charges of stalking Mr Adrian Bricknell. The basis of the charges were that he had placed approximately eight to ten notices in the Hastings area asserting that Mr Adrian Bricknell was "a low life pederfile (sic) stalking out children in this area" and gave Mr Bricknell's address. When pressed as to why he did this, he stated that his solicitor, Ms Brann, had told him to do it. He asserted that she said it would be a good idea to "step him down a few cogs, basically to say that he's not as almighty as he seems running around." He did say that she did not tell him to state that Mr Bricknell was a paedophile, in the notice. Preceding this incident were steps taken by Mr and Mrs Bricknell to bring to the attention of Mr Sonneveld's wife that he was having an affair. There was no doubt that there was no love lost between Mr and Mrs Bricknell and Mr Sonneveld. It may be remembered that Mr Bricknell was the one whom Mr Sonneveld refused to pay in December 1996 and who informed others that Mr Sonneveld was not paying his debts.

171. Having informed the Court of the serious allegation that his solicitor suggested he do this, he persevered with the assertion, despite the apparent incredulity displayed by the Court.

"I am more concerned about some serious things you are saying about your solicitor, Mr Sonneveld. You must appreciate that you are on oath in this Court and you are not to say things about other people who are not here to defend themselves and you have just suggested something reasonably serious against a lawyer. Is it true that she told you to go and put notices up about Mr Bricknell?"

182. Ms Brann was called by Mr Sonneveld. The passages were put to her and she denied ever making such a suggestion. Indeed, the evidence established that Mr Sonneveld had no contact with Ms Brann in early 1998, and when he was charged with the offences, he engaged Ms Brann's partner, Mr Crowther, who looked after the matters.

185. I accept the evidence of Ms Brann. Mr Sonneveld told a deliberate untruth to the Court.

188. During March-April 1997, Mr Nicholas Middendorp attempted to resolve the dispute with Mr Sonneveld. The former arranged a meeting to be held either on 23 or 24 April 1997. Having informed Mr Sonneveld of the proposed meeting, Mr Sonneveld sent a fax to him, indicating that he would not attend any meeting and that he would see him in court. By this time, Mr Sonneveld had taken it upon himself to threaten Middendorp with the distribution of a document, which arguably was defamatory of Middendorp. Mr Middendorp had requested to see a further draft of the document and in his facsimile of 21 April 1997, Mr Sonneveld informed him that he would see it when everybody else saw it.

191. It appears that around this time, Mr Sonneveld sent the notice to Ms Brann for her consideration. Mr Sonneveld gave evidence that Ms Brann looked at the document, sent it back with a few minor amendments and told him that he could send out the notice. He gave evidence that she saw no problem with sending it out and that that was her advice. It was put to him that that was incorrect. On any view, the document was clearly defamatory of Middendorp and subsequently, was the basis of the document which was the subject of the order made by Beach J, restraining Mr Sonneveld from distributing it.

194. Ms Brann, who was called by Mr Sonneveld, informed the Court that she did speak to Mr Sonneveld on 23 April 1997, and read out a note of a telephone conversation she had with Mr Sonneveld, which was as follows -

"Advised him that fax could see him sued - defamatory - told him I'd spoken to counsel. Needed to settle down. Intent on sending to Nicholas, told him unwise and at the end of the day wouldn't assist his position."

198. She reiterated that she did not tell him that he should send the notice. I accept her evidence. Again, in my opinion, Mr Sonneveld told a deliberate untruth to the Court.

201. During cross-examination, Mr Sonneveld changed his evidence if he thought it was appropriate, sparred with cross-examining counsel, did not answer the question and on occasions, took the opportunity to make unsubstantiated serious attacks upon a number of people. He, on occasions, vehemently denied a matter until confronted with a document which showed that he could not have been correct. Despite this, he prevaricated and gave evasive answers. All told, in my view, he was an unsatisfactory witness.

204. By reason of the way he conducted the case, and his evidence, I came to the conclusion that Mr Sonneveld was obsessed with his dispute with Middendorp. His obsession, his dislike of Middendorp and their lawyers, and his bitterness towards those who had advised him in the past, namely, his solicitor Ms Brann, and union officials, meant that his judgment was clouded, his memory was affected and, in his own mind, he was convinced of the truth of his version. There were a number of instances of doubtful evidence.

207. All told, he was an unsatisfactory witness whose evidence had to be closely scrutinised, and I came to the conclusion that his evidence should not be accepted unless it was corroborated by some objective fact.

210. Mr Sonneveld presently resides just out of Torquay and is an electrician by occupation.

213. He was born on 15 January 1966 and was raised in Tyabb. He spent most of his adult life in the areas surrounding Hastings. He is presently aged 35 years.

216. He completed his apprenticeship as an electrician in 1988. He commenced business as an electrical contractor in partnership with his wife from their residential premises in Bittern in about 1990.

219. He had many and substantial contacts in the electrical industry throughout the area. He performed electrical work building machinery, doing maintenance-type work, and was doing the electrical work on ships coming into and out of Western Port. He also looked after the tug boats, jetties and shipping facilities. In addition, he was building machines for Crib Point Engineering and doing general installation and maintenance work throughout the area. He had specialist skills in various areas and was considered a competent, careful and able electrician.

222. From time to time, he engaged other electricians and electrical contractors to assist him performing contracts for others.

225. Prior to 2 February 1997, he engaged short term labour with minimal notice. By way of example, an oil tanker would come in at 3.00 a.m. and by 6.00 a.m., would require eight electricians to do the job. He employed other electricians and electrical contractors to carry out the work. He was able to do so at short notice.

228. Mr Sonneveld conducted a successful business. Copy tax returns revealed a steady increase in income and in the year ending 30 June 1997, he had a gross income of $185,169. He continued to have a successful business until the latter part of 1998. He eventually left the area in August 1999 and eventually settled near Torquay. In late 2000, he suffered from depression and since then, has worked on and off.

231. The evidence established that as an electrician, he was very good and very capable, and had an ability to work on large, difficult and complicated machinery.

234. Middendorp is and was, at all material times, a large wholesale supplier of electrical parts and equipment through a substantial number of outlets in this State. It mainly sells products to electricians and electrical contractors.

237. At all relevant times, Middendorp had a store in Hastings, which supplied electricians and electrical contractors working in the area. The nearest competitor store was in Frankston, some 20 kilometres away, or at Mornington, which is also some 20 kilometres away. Hastings had a population of about 10,000, but taking into account the surrounding areas, the figure was in the region of 30-40,000. There were a number of industries in the area which attracted electricians. In February 1997, housing was just starting to develop in the area.

240. In February 1997, there were two employees at the Hastings store. The store was a place where electricians visited and discussed various matters with each other and staff. It was the one place in the area where electricians might meet and talk. It was also a place where a contractor could ascertain the availability of contract labour. All electricians in the area purchased their materials and equipment from the Hastings shop, many had running accounts and most enjoyed discount benefits.

243. On 2 February 1997, there were two employees at the Hastings store, Graeme Lincoln, who was the manager, and Paul Smith, who was an experienced employee. The latter had worked at Hastings for about eight years. He subsequently moved to the Frankston store.

246. Mr Lincoln had been working at the Hastings store for approximately ten years prior to February 1997.

249. Mr Sonneveld frequented the Hastings store often and sometimes, almost every day. Messrs Lincoln and Smith were aware that, from time to time, Mr Sonneveld used sub-contract labour.

252. During the period July to September 1996, Mr Sonneveld employed Adrian Bricknell, from time to time, as contract labour. Mr Bricknell was an electrical contractor who conducted his own business. He had just started his business. He was employed on a casual sub-contract-type basis, from time to time, by Mr Sonneveld. He continued to employ him through to December 1996. Mr Sonneveld alleged that Mr Bricknell was stealing from him and poaching work. Mr Sonneveld said that he was stealing work. It was somewhat difficult to understand the real basis of Mr Sonneveld's complaint. It would appear that, from time to time, when Mr Bricknell was working on behalf of Mr Sonneveld at a particular job, he would invoice for the work himself. Mr Sonneveld also said that he was booking out hours that were, in his words, "non-existent". In other words, he was charging Mr Sonneveld for work that was not done. In December 1996, Mr Sonneveld terminated his employment. It was in relation to a job at Jack Thompson Engineering.

255. Mr Sonneveld stated that he did not pay the full amount of Mr Bricknell's claims, and the parties entered into a dispute. He said that about $200 was held back.

258. Mr Sonneveld asserted that when he and Mr Bricknell were in dispute, he invited Mr Bricknell to come around and sort it out at his home.

261. It was difficult to ascertain, from Mr Sonneveld's evidence, what the precise nature of his dispute was with Mr Bricknell. He was quick to allege that Mr Bricknell had been sacked from BHP as an employee, was quick to assert that Mr Bricknell had stolen things, and asserted that Mr Bricknell had stolen from him, poached his work and charged him for work he had not done.

264. Mr Sonneveld called Mr Bricknell as his witness. Mr Bricknell gave a different version to that given by Mr Sonneveld and, I am satisfied, was a witness of truth. Where his evidence differs from Mr Sonneveld's evidence, I accept Mr Bricknell's evidence. Mr Bricknell is an electrical contractor who runs his own business from Crib Point. In February 1997, he had been running his business for a relatively short period. In the latter half of 1996, Mr Bricknell, from time to time, was engaged by Mr Sonneveld to assist him with his work.

267. During the latter part of 1996, Mr Sonneveld engaged Mr Bricknell to assist him doing work at Jack Thompson Engineering. At one stage, Mr Sonneveld was not available because he was away from the area. An empoloyee from Jack Thompson rang Mr Bricknell, who had been recommended by Mr Sonneveld to do some work. Mr Bricknell attended at Jack Thompson Engineering, and explained that he was unhappy doing the work which Mr Sonneveld normally did. However, they requested him to do the work and he did so. Later, when Mr Sonneveld returned to the area, he was critical of Mr Bricknell for doing the work and abused him. The work was done during November 1996. Despite being abused by Mr Sonneveld, the latter engaged Mr Bricknell to do work in December. He forwarded two invoices to Mr Sonneveld on 9 and 13 December for $135 and $655 respectively. On 14 December, Mr Sonneveld paid $150 off the second account.

270. Mr Bricknell gave evidence that between 15 and 20 December, he chased Mr Sonneveld for the money by contacting him by telephone. Mr Sonneveld refused to pay and on about the fourth occasion that he rang, Mr Sonneveld said words to the effect - "No, I'm not going to pay you because you're a client-stealing arsehole and you're lucky I don't take you to court and take your house off you."

273. There were other threats. Thereafter, the parties fell out. Mr Bricknell did not work for him again. Mr Bricknell stated, and I accept his evidence, that Mr Sonneveld said that he did not have the money at the time to pay, in any event.

276. In January 1997, Mr Bricknell told a variety of people of his dispute with Mr Sonneveld. He told fellow electrical contractors, he told Mr Paul Smith, and as he said, he told anybody who asked him about working with Mr Sonneveld.

279. Mr Bricknell knew Mr Smith as an employee at the Middendorp shop in Hastings. He had the usual relationship with Mr Smith of an electrical contractor who visited the store often and who would talk to the staff.

282. Mr Bricknell has not been paid the outstanding amount. He approached the Electrical Trades Union in early 1997, but the union was unable to give him any assistance.

285. The evidence established that where things were discussed in the Hastings area, they had the potential to pass around what was a fairly small community. Mr Bricknell gave evidence to the effect, and I am satisfied, that the reputation of Mr Sonneveld in December 1996 was that he was a good electrician but a difficult and awkward person to work for, and amongst contractors who had performed work for him, he was considered to be difficult to please.

288. At the end of January, Mr Sonneveld was involved in a large job and needed labour. He rang around. He was getting no response to his requests.

291. He retained Mr Paul Dawson, whom he had known for many years. They had done their apprenticeship together. Mr Sonneveld was a couple of years ahead of Mr Dawson. Mr Dawson is aged about 30 and has two children. He is and was an electrical contractor and operated his own business. Mr Sonneveld had employed him over three to four years. Sometimes, he employed him a few times a month. He employed Mr Dawson about a week before 2 February 1997. He was paying him $25 per hour. The arrangement was that he was paid monthly, though Mr Sonneveld said that if he had asked for money earlier, it would have been paid.

294. On 2 February 1997, Mr Sonneveld sent Mr Dawson to the Middendorp shop in Hastings to pick up some materials. He spoke to the employee, Mr Smith, whom he knew. They had a relationship which was more than an acquaintance between a shop assistant and customer. At one time, Mr Dawson had engaged Mr Smith to work for him on a job. Mr Smith had, on one occasion, delivered materials to Mr Dawson. However, they did not socialise. Mr Sonneveld called Mr Smith as a witness.

297. Mr Paul Smith gave evidence of the discussion at the Hastings shop between him and Mr Dawson. Mr Smith saw Mr Dawson at the serving counter and asked him "how things were going". He said that he was working local and requested cable cuts. The two of them then went to the back of the shop and, according to Mr Smith, the following conversation took place -

"Mr Smith said to Paul Dawson, 'I hear you've been working for David Sonneveld' and Paul said, 'Yes'. He said, 'Paul, just be a little bit careful, I've heard that David Sonneveld is a slow payer. I know of two guys that are still waiting for payment from David.' Mr Smith said, 'One of them is Robbie Byrnes and the other is Adrian, Adrian's Electrics.' Mr Smith said, 'It might be a good idea if you asked David at the end of each week if you can get a payment and that way you can keep on track with your account.' He then added, 'I'm only telling you this for your own benefit'."

301. According to Mr Smith, Mr Dawson did not say much, listened, got the cable, was invoiced and left.

304. Mr Dawson was also called by Mr Sonneveld, and he gave his version of the conversation. In addition, he had sworn an affidavit at the request of Mr Sonneveld, which was filed with the Court, and he gave a version in that document. The plaintiff, Middendorp, in its defence to the counterclaim, also admitted a version of the conversation.

307. Mr Dawson said that Mr Smith stated, "mentioned to me about David being a slow payer and not paying other contractors, sub-contractors."

310. In cross-examination, Mr Dawson stated that Mr Smith did refer to his account and that after the conversation took place, Mr Smith said words to the effect, "I just want to make sure you get all your money". Mr Dawson understood that to mean, so that he was able to pay his account. He said that Mr Smith told him that Adrian Bricknell had not been paid by Mr Sonneveld. He was uncertain whether Mr Smith said he was a bad payer or a slow payer.

313. In an affidavit sworn by Mr Dawson on 21 December 1998, he swore that the conversation was in these terms -

"Paul, make sure you get your money each week because I heard Dave Sonneveld is a slow payer."

317. In its defence, Middendorp admitted words to the effect -

"Paul, make sure you get your money each week because I've heard Dave Sonneveld is a slow payer. Just be a bit careful. I've heard of two guys that have worked for Dave and both have had problems receiving payments. It might pay for you to ask for a cheque or payment at the end of each week so you can keep up with your own account. Adrian is still having trouble getting money from Dave for work he has done. Paul, I'm saying this for your own benefit so just be a little careful."

321. The admission made in the defence is similar to the evidence of Mr Smith.

324. In my opinion, the most likely version of the conversation was that deposed to by Mr Smith in his evidence. However, in my opinion, he told Mr Dawson that Mr Sonneveld was a bad payer. Mr Dawson said he did. I am satisfied that he said that, because it fits in with the sequence of events and the views expressed by Mr Bricknell that Mr Sonneveld would not pay him. As Mr Dawson said, "The conversation lasted about five minutes", and in giving his evidence, he was doing his best to remember what was said. I was impressed by Mr Dawson's honesty whilst giving evidence.

327. Although Mr Sonneveld asserted often to the Court, whilst presenting his case and giving evidence, that others had been told by Mr Smith the same matters that he had told Mr Dawson, there was no evidence to establish any other communication by Mr Smith to any other person. I accept Mr Smith's evidence that he did not tell others of Mr Sonneveld's attitude to paying his sub-contractors.

330. The evidence clearly established that Mr Bricknell told others during January 1997, and if others were aware of the facts concerning the attitude of Mr Sonneveld to paying a sub-contractor, I am satisfied that it came from a source other than Mr Smith. This case is concerned with one communication.

333. I accept Mr Smith's evidence that he told Mr Dawson about Mr Sonneveld because he believed that two other persons had been waiting for payment from Mr Sonneveld. He felt he had to tell Mr Dawson because he liked him, he was young and had just commenced his own business. He did not want to see Mr Dawson in a position similar to Mr Bricknell or Mr Byrnes, having to wait for money. It was not his intention to spread any malicious rumours.

336. When Mr Dawson returned to the work site, he told Mr Sonneveld what he had been told by Mr Smith. He conveyed to him that he was considered a "slow or bad payer" and that he had better make sure that he got his money each week.

339. Mr Dawson gave evidence that what was said to him did not affect him, that he trusted Mr Sonneveld, that he was not worried by what he was told, that he continued to work for him and was happy with the payment arrangements. Mr Sonneveld was annoyed by what he was told.

342. Later, on 2 February, Mr Dawson returned to the store and spoke to Mr Lincoln, and apologised for what he had started by this time. Mr Sonneveld had made contact with Mr Lincoln. This is denied by Messrs Lincoln and Smith. It is unnecessary to resolve the conflict. Later, Mr Lincoln told Mr Smith that he had spoken to Mr Sonneveld and that he was threatening to sue Middendorp. Mr Smith, later that day, telephoned Mr Sonneveld on his mobile phone and suggested that they get together and work out the problem, but Mr Sonneveld was volatile and abrupt and said, "You guys are gone". Mr Smith asked Mr Sonneveld whether it was some form of joke and Mr Sonneveld said, "You're gone", and hung up. That was the last time Mr Smith had any discussion with Mr Sonneveld.

345. Some two or three days later, Mr Smith spoke to Mr Dawson and informed him that he was annoyed that he had told Mr Sonneveld, because it was said in confidence.

348. Mr Lincoln rang Mr Sonneveld later on 2 February and, I am satisfied, attempted to pacify Mr Sonneveld, who responded by saying, "I'll see you in court". I am satisfied that Mr Lincoln offered to make an apology in the days that followed 2 February, during discussions with Mr Sonneveld. This was not acceptable to Mr Sonneveld.

351. Mr Sonneveld had a running account with Middendorp which permitted him credit at the Hastings shop. In July 1995, his credit terms were that he was permitted a strict 90 days' maximum credit from 1 August 1995.

"Should accounts exceed 90 days at any time, our system will insert a status of 'stop credit' until arrears are paid. Our opinion is that these terms are still most attractive."

358. As at 31 January 1997, the total amount owing by Mr Sonneveld was $11,822.23. Of this amount, $4,129.34 had been outstanding for a period in excess of 90 days. His last payment was made on 7 January 1997 in the sum of $2,000 and during the month of January 1997, Mr Sonneveld purchased goods to the value of approximately $4,500. On one view of the credit terms, the amount outstanding as at 1 February was $4,129.34, but on another view of the facts, the credit was stopped at that date. The evidence revealed that after 1 February 1997, Mr Sonneveld did not purchase any more goods from Middendorp. He did not attempt to make any further payments in the following months.

361. In the days that followed 2 February 1997, I am satisfied that discussions took place between Mr Lincoln and Mr Sonneveld, but Mr Sonneveld throughout adopted the view that an apology was inappropriate and that Middendorp had to fix the problem. When asked what he meant by "fix it", Mr Sonneveld said, in evidence, that he expected a properly worded retraction and apology which would be prominently displayed in the shop at Hastings and also in a local paper. In my opinion, from an early stage of the dispute, Mr Sonneveld also wanted compensation.

364. Mr Sonneveld engaged a solicitor in Hastings called Jillian Brann and Associates. From a time shortly before 11 February 1997, Ms Brann handled the matter on his behalf. She briefed Mr Bristow of Counsel, who gave advice and drafted a letter of demand and a form of apology and retraction.

367. On 17 February 1997, Mrs Brann sent a letter to Mr Lincoln at the Hastings shop requesting a retraction and apology. The letter went on to state -

"At this time we are focussing on allaying the damage and we hope with your co-operation this may be possible. We have put the mitigation of losses ahead of any assessment of damages incurred or losses already suffered."

371. Earlier in the letter, it was asserted that Mr Sonneveld was unable to find sufficient sub-contractors to work for him to complete current and proposed contracts, and went on to state -

"Last week alone our client found himself in the position of having to say no to a contract from Ford valued at $40,000 as a direct result of the labour position."

375. The letter clearly conveyed to the reader that not only was Mr Sonneveld seeking a retraction and an apology, but he was contemplating making a substantial claim for damages.

378. The letter has to be considered in light of the evidence that Mr Sonneveld gave that he was not interested in claiming damages, and only became interested in damages in late 1998. This is despite the fact that he made a number of statements in the following months where it was clear that he was after compensation. His denials reflect on his credibility.

381. It is pertinent to observe that Mr Sonneveld took no steps at this time, or thereafter, to inform fellow contractors that the rumours were untrue, or to reassure contractors that if he employed them, they would be paid promptly. The steps that were available to him, if he had thought about it, would have been a notice in the local paper and letters to fellow contractors to nip "the rumours in the bud". He took no steps to do this. He frankly admitted that he gave no thought to doing that. These matters are relevant to the question of damages, if damages are to be assessed.

384. Attached to the letter of demand was a draft retraction and apology. A request was made to display the document at the store. Upon receipt of the letter, Mr Lincoln referred the matter to head office. The notice of retraction was headed "Draft".

387. Mr Sonneveld gave evidence that the document was in fact displayed in the shop, on the glass door, for a few hours shortly thereafter.

390. Both Mr Lincoln and Mr Smith denied that the document was displayed at the shop. I accept their evidence. I do so for a number of reasons. First, there was no reason why Mr Sonneveld would return to the shop. He was in a state of war with Middendorp. He was annoyed. He did not purchase any materials after 31 January 1997. He was, without doubt, in a state of dispute with Middendorp after 17 February. Secondly, the document was headed a draft, and it is clear from the terms of the letter of demand and the document itself, that the question of its final form was a matter of discussion between the parties. Indeed, later evidence showed that there were discussions between the parties as to the form of any retraction and apology. Thirdly, Mr Lincoln, as manager of the shop, would not have any authority to take the matter into his own hands, especially as he had referred the matter to head office, which took over the dispute.

393. Finally, Ms Brann gave evidence that she did speak to Mr Lincoln, who told her that he had referred the matter to head office.

396. On 24 February 1997, Middendorp wrote to Ms Brann, denying that Mr Smith had made any derogatory comments about the financial status of Mr Sonneveld but admitted that he had advised Mr Dawson, as a friend, that regular weekly invoices might assist him in his cash flow.

399. The letter concluded with some wise advice which, with the benefit of hindsight, should have been followed -

"If Mr Sonneveld has a sub-contractor who is being derogatory, he should undertake his own remedies."

403. No doubt this was a reference to Mr Bricknell.

406. On the same day, Ms Brann wrote to Middendorp and threatened to issue proceedings against it.

409. Mr Sonneveld did not pay any money off his Middendorp account, and it referred the recovery of the account to a firm of solicitors, Robert Richter & Associates, who, on 11 March, wrote a letter of demand to Mr Sonneveld. On 18 March, Mr Andreola, of Middendorp, spoke to Mr Sonneveld, who informed him that he had every intention of paying the account but because of the other legal issues pending, it would be to the advantage of Middendorp to withhold action to see what transpires.

412. This supports the conclusion that Mr Sonneveld was after a large sum of compensation, most likely commensurate with his outstanding account.

415. On 20 March, Middendorp forwarded a letter of demand requiring payment of $7,313.70 by 2 April 1997.

418. Mr Sonneveld did not respond to the demand and on 2 April 1997, a complaint was issued in the Magistrates' Court for $11,822.23. This was in fact the amount of his account. Mr Sonneveld was annoyed by the claim because he believed that the full amount was not due, because of the credit arrangement. On any view, the sum of $4,129.34 was due and owing, and arguably, the whole was owing due to the fact that Mr Sonneveld had failed to pay the amount due on 31 January 1997. In any event, Mr Sonneveld did not file a notice of intention to defend and did not take any step to contest the claim.

421. Mr Sonneveld was annoyed by the receipt of the complaint, which was served some time prior to 7 April 1997. On that day, Mr Sonneveld sent a facsimile to Middendorp's Credit Manager, Mr Andreola, in which he made reference to the alleged defamation and indicated that he had not decided whether he would make a claim for damages in court, but had decided to play Middendorp at their game to see how they liked it. He stated in his fax -

"I've drafted a small notice which I have the intention of posting to 'all' electrical contractors in Victoria, post it in all your oppositions' stores and have it appear in as many papers as possible informing people of the truth. This has come about as I don't think what your company has done to mine is very funny and I will be compensated one way or another."

429. The document set out the facts as Mr Sonneveld had understood them in relation to the alleged defamatory communication, and the notice concluded -

"THEREFORE BEWARE OTHER FELLOW ELECTRICAL CONTRACTORS AS THE NEXT BUSINESS THEY DESTROY MAY BE YOURS."

433. On any view of the facts, an exaggerated statement.

436. Mr Nicholas Middendorp contacted Mr Sonneveld to see whether the dispute could be resolved.

439. On 11 April, Mr Sonneveld sent a facsimile to Mr Middendorp stating that he sought to reinstate his reputation, and he then concluded the letter by saying -

"As regards to the last letter to Ray Andreola it was an indication of my attitude toward your company and a statement of what has taken place. The publicly released version will be constructed by my advertising company and will be seen at the time if necessary."

443. Mr Middendorp responded by stating that he was seeking legal advice and that upon receipt, he wished to arrange a meeting to work towards a resolution.

446. On 18 April, Mr Sonneveld followed up with another facsimile, threatening to give the notice to his printing company and to have 10,000 fliers printed and distributed. He asserted that Middendorp had more than enough time to consult their lawyers. On 21 April 1997, Mr Middendorp informed Mr Sonneveld that advice had been received, and suggested one of two days for a meeting. He also requested Mr Sonneveld to fax him "your final draft of your 'Flier' which your printing company has approved to print."

449. On the same day, Mr Sonneveld sent back a facsimile refusing to meet, stating that he expected to see him in court and noting that Middendorp was not interested in the damage he had suffered. He ended by saying that he would take his own steps to obtain satisfaction. His final paragraph stated -

"In regards to a copy of the draft you will see it at the same time as everyone else."

453. On or about 23 April, Mr Sonneveld sent the proposed "flier" to Ms Brann for consideration, and as I have already stated, she told him that it was defamatory and he should not use it. Mr Sonneveld, on the afternoon of 23 April, sent a facsimile to Mr Middendorp, threatening to send out the flier which was now headed -

"TO ALL ELECTRICAL CONTRACTORS PURCHASER'S AND ELECTRICIANS ALERT - ALERT - ALERT"

457. He stated that he was proposing to distribute the document at the end of the week, and that he would hold off until 8.00 a.m. on Friday.

460. The document is defamatory and asserts, inter alia, that Middendorp fabricated a lie that he did not pay his sub-contractors and proceeded to inform other contractors and sub-contractors; that the lie had gone through the entire area and warned everybody that the next business that Middendorp might destroy might be "yours".

463. Middendorp engaged its present solicitors and the firm, Vann Fisher & Associates, made contact with Ms Brann. Discussions took place and a meeting was arranged for 9 May 1997, in order to resolve the dispute. The meeting took place on the morning of 9 May, and present were Mr Sonneveld and Mr Nicholas Middendorp, and their lawyers. Nothing was resolved at the meeting.

466. That afternoon, Mr Sonneveld sent a facsimile in which he stated that it would appear that he would have to see Middendorp in court "the long way round" and attached, what he described as, the "modified version of our reputation clearing campaign". Attached to it was another form of the "Alert - Alert - Alert" document. It was, on any view, defamatory.

469. Later that day, Middendorp's solicitors approached Ms Brann, asking for an undertaking that the document would not be distributed, otherwise Middendorp would go to court.

472. On the following day, Saturday 10 May, Mr Sonneveld sent a facsimile to Middendorp, stating that he would hold off until Wednesday, as requested, but went on to say -

"But in regards to the court order being obtained be aware this is like putting down the shovel you're digging the hole with and hiring an excavator. Note the changes to our campaign."

476. On Monday 12 May, Beach J granted an interim injunction, ex parte, restraining Mr Sonneveld from distributing any defamatory document. On 14 May, Ms Brann told Vann Fisher that she no longer acted for Mr Sonneveld. On 19 May 1997, the interim injunction came back before the Court, and Mr Panna of Counsel appeared for Middendorp, and Mr Sonneveld attended. Beach J continued the injunction and adjourned the proceeding until 16 June 1997 to enable Mr Sonneveld to obtain assistance from the Electrical Trades Union ("ETU"). On 27 May 1997, Ms Brann ceased to act for Mr Sonneveld.

479. During the period June to early August, the ETU attempted to negotiate a resolution of the dispute between the parties, and discussed the terms of a retraction and an apology, and the terms to settle the proceeding.

482. On 16 June 1997, Chernov J granted an interlocutory injunction, pending trial. Mr Sonneveld did not appear. He was ordered to pay the costs of the day.

485. On 17 July 1997, an order was made in default in the Magistrates' Court against Mr Sonneveld for $11,822.23, together with interest and costs, making a total of $12,934.20. Mr Sonneveld was informed of the order on 21 July and a request was made for payment.

488. Middendorp had discussions with the ETU and eventually, an agreement, in principle, was reached and a deed of release was prepared.

491. On 19 August 1997, the ETU sent a letter to Mr Sonneveld enclosing the release.

494. The letter informed Mr Sonneveld that the union believed it had exhausted the negotiations and attached the deed of release. The letter then went on to provide -

"If you choose not to accept this final offer you will be free to pursue any claim against Middie's, as you would see fit."

498. The Union offered to introduce him to its lawyers, but was not prepared to meet any costs.

501. Mr Sonneveld was not prepared to sign the release because it contained a clause charging his property for the payment of the debt. Further, he was not prepared to pay interest on his outstanding account, nor was he prepared to pay costs ordered against him in the Magistrates' Court and by Chernov J.

504. The terms offered by Middendorp to compromise the dispute were fairly generous. Mr Sonneveld was permitted to pay off his outstanding account, including the costs and interest, over 18 months, without any interest. He was required to pay the costs of the Supreme Court proceeding, of $1,200, over a period of two months. Middendorp agreed to file a discontinuance in the proceeding and a vacation of the orders made against him, upon payment. The deed of release did seek to charge Mr Sonneveld's property with the performance of his obligations.

507. Despite the fact that he did not agree with the clause relating to a charge or the payment of interest and costs, Mr Sonneveld did not take any step to continue the negotiations but chose to refuse to settle. On 24 August 1997, he informed Middendorp that he was not prepared to agree and blamed the ETU because of the extra costs. He stated that he was proposing to tell the media about the saga, and then stated -

"MIDDENDORP ELECTRIC CO SCREWS AND THEN BACK DOORS IN COURT DAVID SONNEVELD WITH THE ASSISTANCE OF THE ETU. I MAY EVEN FROM THIS RECEIVE THE COMPENSATION I SHOULD.

WHAT A STORY."

511. On 18 September, Middendorp's solicitors requested Mr Sonneveld to sign the release, otherwise steps would be taken to enforce the orders against him. On 3 October 1997, Mr Andreola wrote to Mr Sonneveld and demanded that he pay some of the account.

514. Nothing more occurred in the Supreme Court proceeding until September the following year.

517. However, in the meantime, Mr Bricknell and Mr Sonneveld crossed horns again.

520. In or about March 1998, Mr Bricknell formed the view that he should inform Mr Sonneveld's wife that her husband was having an affair. Contact was made with the sister of Mrs Sonneveld. Mr Sonneveld found out and became annoyed, and posted the notices about Mr Bricknell, which I have referred to earlier. On 15 April 1998, Mr Sonneveld appeared in the Frankston Court on two charges of stalking. The substance of the charges was the posting of the notices. Mr Sonneveld admitted to the police that he had posted the notices in the area. He consulted Mr Crowther, who, at that stage, had become a partner of Ms Brann. He appeared on his behalf. Mr Sonneveld pleaded guilty at the Court. The charges were found proven and he was given a suspended sentence. On 17 April, Mr Sonneveld obtained an intervention order against Mr Bricknell.

523. In September 1998, Mr Crowther approached Middendorp's solicitors, suggesting a settlement, but Mr Sonneveld, some days later, telephoned Mr Janover of Middendorp's solicitors and stated that he was to ignore what Mr Crowther had stated in the letter and that he wanted damages.

526. Nothing more occurred in the Supreme Court proceeding or Mr Sonneveld's claims for a period of some 12 months.

529. The litigation was revived through the Litigation Support Group and as a result, on 19 October 1998, Middendorp filed a statement of claim in which it sought a permanent injunction, but did not claim damages. On 21 December 1998, Mr Sonneveld, acting for himself, filed a defence and a counterclaim. The counterclaim sought damages for defamation. It is pertinent to observe that the first claim in a court by Mr Sonneveld for damages for defamation was some 22 months after the alleged defamatory communication.

532. Mr Sonneveld's defence and counterclaim was struck out in March and also in June 1999. In August 1999, Mr Sonneveld left the Bittern-Hastings area and eventually settled in Torquay. He left because his business was failing and he was unable to get work.

535. During the period from December 1999 to 4 March 2000, Mr Sonneveld sent abusive and insulting letters to Middendorp and its solicitors. He repeated the performance between May and June 2001, when he sent another series of correspondence to a variety of people which was also abusive and insulting.

538. On 22 November 2000, the proceeding came on before Ashley J, and Middendorp, as plaintiff, sought leave to discontinue its claim, pursuant to Rule 24.5.02 of the Rules of Court, on the basis that it did not wish to proceed. At that stage, it was claiming a permanent injunction. Due to the passage of time, it was unnecessary to continue with the claim. His Honour granted leave to discontinue and no order was made as to costs.

541. The defence and counterclaim filed by Mr Sonneveld on 13 October 1999 was not the subject of any attack, and it is that counterclaim which is before the Court.

544. It will be necessary to further consider the facts when considering and determining some of the issues in the proceeding.

548. In his counterclaim, Mr Sonneveld pleaded that the words complained of were published to a number of persons. However, the evidence established only one communication, namely, by Mr Smith publishing the words to Mr Dawson, on or about 2 February 1997.

551. Mr Sonneveld did not plead any false innuendos, and there was no suggestion that he wished to rely upon any extrinsic facts to establish a claim based on the true innuendo.

554. Mr Sonneveld has proven that the words complained of were published of him, and that Middendorp was responsible for the publication. Although his counterclaim did not plead that Mr Smith was acting in the course and scope of his employment when he published the words, Middendorp did not, in its defence, deny that he was acting in the course and scope of his employment and further, no submission was put to the Court that he was not so acting.

557. This brings the Court to the real issue in Mr Sonneveld's case, namely, were the words defamatory of him?

"Where no true innuendo is pleaded and the published words clearly relate to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees - Lord Selborne's reasonable men ... or Lord Atkin's right thinking members of society generally ... or Lord Reid's ordinary men not avid for scandal - would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation." - per Brennan J in Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 at 505-6.

561. His Honour's remarks also apply to a claim in slander.

564. In determining the meaning of the words used, the words must be understood in their normal, natural and every day sense, subject to the context and the circumstances. In Stubbs Limited v Russell (1913) AC 386, Lord Shaw said at p.398 -

"Is the meaning sought to be attributed to the language alleged to be libellous one which is a reasonable, natural or necessary interpretation of its terms?"

568. But in considering the meaning of the words, the Court takes into account the circumstances of the publication and what would be known and understood by those who heard the words. All circumstances which were known to the publishee are relevant so as to place the tribunal of fact in a position to determine how the publishee understood the words. What meaning the words would have conveyed to the mind of the publishee - see ibid.

571. The law has always permitted evidence as to the circumstances of the publishee and his understanding of the words. In the ancient case of Harrison v Thornborough (1712) 10 Mod 197 at 198; 88 ER 691, the Queens Bench Court said -

"The rule therefore that has now prevailed is, that words are to be taken in that sense that is most natural and obvious, and in which those to whom they are spoken will be sure to understand them. ... The signification of the words 'gone off' are very well known among merchants."

575. The courts do not strain to find an innocent meaning for the words prima facie defamatory, neither will the courts put a forced construction on the words which may fairly be deemed to be harmless.

578. The alleged defamatory communication here was made to a fellow electrical contractor, a person familiar with electrical contractors' businesses in the area and familiar with the employment of an electrical contractor by another.

581. In considering the meaning and also the defamatory character of the words complained of, it is necessary to consider what meaning the average normal listener would attribute to the words spoken. In construing words in a defamation action, the tribunal of fact does not use legal rules of interpretation, but adopts a method of approach which recognises that the law is concerned with the effect of the words used on ordinary people, and an account must be taken of the fact that the layman's capacity for implying matters is much greater than the lawyer's. See Rubber Improvement Ltd v Daily Telegraph Ltd (1964) AC 234 at 277.

584. Mr Sonneveld, as I have already stated, did not plead the alleged defamatory imputations based on the natural and ordinary meaning of the words.

587. In my opinion, the words conveyed the following imputations to Mr Dawson -

(i) That Mr Sonneveld, as an employer of contract labour, was a slow payer to the contractor supplying the services;

(ii) That Mr Sonneveld, as an employer of contract labour, was a slow payer to the contractor supplying the services and may not pay for a long period of time or at all;

(iii) That Mr Sonneveld, as an employer of contract labour, was prepared to employ a contractor, take the benefit of the services but not pay or be slow in paying for the services;

(iv) That Mr Sonneveld may be unable to pay his debts as they fell due;

(v) That Mr Sonneveld was an unreliable employer.

593. In considering whether the words did convey those imputations and whether they were defamatory, it is necessary to consider all the circumstances, the occasion of the publication, the relationships between the various parties, and to consider the words as a whole.

596. There are a variety of tests which have been laid down in the authorities to determine whether words are defamatory, and probably the best known test is that stated by Lord Atkin in Sim v Stretch (1936) 52 TLR 669 at 671, where His Lordship said -

"The conventional phrase exposing the plaintiff to hatred, ridicule or contempt is probably too narrow. The question is complicated by having to consider the person or class of persons whose reaction to the publication is the test of the wrongful character of the words used. I do not intend to ask your Lordships to lay down a formal definition, but after collating the opinions of many authorities I propose in the present case the test: would the words tend to lower the plaintiff in the estimation of right thinking members of society generally?"

600. In considering "right thinking members of society generally", the Court must take into account the circumstances of the publication and the person to whom the publication was made.

603. In my opinion, the words complained of were defamatory of Mr Sonneveld. They were published to a fellow contractor, and within the circle of independent electrical contractors in the area, such a statement would have the effect of lowering Mr Sonneveld's reputation in the eyes of fellow contractors and others, conversant with arrangements that are made from time to time by one contractor employing another. I am satisfied that the words did convey to a person in the position of the publishee that Mr Sonneveld would employ fellow contractors and not pay them for a period of time or indeed, not pay them at all; that in the circumstances he was an unreliable employer. Further, the words did convey to Mr Dawson that Mr Sonneveld may not be able to pay his debts as they fell due.

606. In my opinion, the words were defamatory of Mr Sonneveld.

609. The Court must be careful in applying cases in the past which have dealt with similar words. The meaning and defamatory nature of words vary according to their context, the circumstances of their publication and the views of the community at the time. To allege of a married woman that she has committed adultery was always considered defamatory in the past. What is the position today? However, with that wise advice in mind, I refer to the authorities which do support my conclusion. Milmo J said in Angel v HH Bushell & Co Ltd (1968) 1 QB 813 at 825 -

"I think it is a serious imputation to say of a businessman that he is not conversant with business ethics ... Ethics involve a moral standard, and in my judgment, a breach of ethics connotes at a minimum dishonourable behaviour."

613. The sting in the words used by Mr Smith was that in carrying out his business, Mr Sonneveld was not prepared to honourably discharge his obligations to fellow contractors who have assisted him and provided their services.

616. To allege of a businessman that he may be insolvent or in pecuniary difficulties, is defamatory - see Orpwood v Barker [1827] EngR 523; (1827) 4 Bing 261; 130 ER 767. To say of a farmer that he cannot pay his labourers, is defamatory - see Barnes v Holloway [1799] EngR 620; (1799) 8 TR 150; 101 ER 1316.

619. The final element in Mr Sonneveld's proof is to establish that the words are either actionable per se, or that they caused him special damage. I will defer consideration of this element until I have dealt with the defence of qualified privilege.

623. Middendorp has pleaded that the communication by Mr Smith to Mr Dawson was protected by qualified privilege. Middendorp has the burden of establishing the defence. Whether or not the defence has been established is a question of law, although any disputed facts relevant to the issue are to be decided by the tribunal of fact - see Adam v Ward (1917) AC 309 at 318.

626. Qualified privilege is a defence available in law because the law recognises that there are occasions when a person has a duty or interest to speak out to those who have a duty or interest to hear the words. The law protects the occasion, even though the words spoken are both defamatory and untrue. Freedom of expression is safeguarded only on the condition that the publication is made to serve the legitimate purpose of the privileged occasion and not for some ulterior motive, foreign to the interest, for the protection of which the privilege is accorded. The occasions that qualify for privilege can never be catalogued and rendered exact. On the other hand, there are well recognised categories of qualified privilege.

629. It is essential to the defence to prove a reciprocity of duty to publish and a duty or interest to receive the information, or a communal interest existing between the publisher and the publishee. The publisher cannot make the occasion one of privilege merely by honestly believing that the publishee had an interest in knowing the fact or a duty to receive the knowledge.

632. The defence is available where the words complained of are defamatory and, in fact, untrue, but for reasons of public policy and convenience, the law has recognised that the person may publish the words without incurring any legal liability.

635. The law on privilege applicable to the present case was stated by the Privy Council in Macintosh v Dun (1908) AC 390 at 398, where the Judicial Committee said -

"The law with regard to the publication of information injurious to the character of another is well settled. The difficulty lies in applying the law to the circumstances of the particular case under consideration. In Toogood v Spyring, Parke B, delivering the judgment of the Court of Exchequer said - 'The law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs in matters where his interest is concerned. In such cases the occasion prevents the inference of malice, which the law draws from unauthorised communications, and affords the qualified defence depending on the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society, and the law has not restricted the right to make them within any narrow limits'." (Emphases added).

"The underlying principle is 'the common convenience and welfare of society' - not the convenience of individuals or the convenience of a class, but to use the words of Earle CJ in Whiteley v Adams, 'the general interest of society'."

643. Defamatory publications may be in answer to an enquiry or may be volunteered. If the communication is made in the legitimate defence of a person's interests or under some sense of duty which would be recognised by the right thinking members of society, it does not matter whether the communication is volunteered or brought out in answer to an enquiry. But as the Privy Council said in Macintosh v Dunn, supra, at p.399 -

"But in cases which are near the line, and in cases which may give rise to a difference of opinion, the circumstance that the information is volunteered is an element for consideration certainly not without some importance."

647. The nature of a duty which springs out of a moral obligation was discussed by the High Court in Howe v Lees [1910] HCA 67; (1910) 11 CLR 361, where Griffith CJ at p.368 said -

"The reference to society does not mean that the person who makes the communication is under any obligation to publish, and is justified in publishing, it to the public at large, but that the interests of society in general require that a communication made under such circumstances to the particular person should be protected. The term 'moral duty' is not used in a sense implying that a man who failed to make the communication under the circumstances would necessarily be regarded by his fellows as open to censure, but in a sense implying that it was made on an occasion on which a man who desired to do his duty to his neighbour would reasonably believe that he ought to make it. It is obviously impossible to lay down a priori an exhaustive list of such occasions. The rule being founded upon the general welfare of society, new occasions for its application will necessarily arise with continually changing conditions'."

651. How does one determine whether there is a moral or social duty? In Stewart v Bell (1891) 2 QB 341, Lindley LJ at p.350 supplied the answer, and his dicta has been quoted often and always with approval. His Lordship said -

"The question of moral or social duty being for the judge, each judge must decide it as best he can for himself. I take moral or social duty to mean a duty recognised by English people of ordinary intelligence and moral principle, but at the same time not a duty enforceable by legal proceedings, whether civil or criminal. My own conviction is that all, or at all events, a great mass of right minded men in the position of the defendant would have considered it their duty, under the circumstances, to inform Stanley of the suspicion which had fallen on the plaintiff."

655. In that case, the defendant had informed Mr Stanley, who had employed the plaintiff, and who was staying with the defendant as his guest, that the plaintiff was suspected of a theft at a hotel which Mr Stanley and the plaintiff had recently visited. It was held that the occasion of the communication was privileged.

658. The circumstances in which the defence applies have been conveniently grouped in the various text books- see e.g. Duncan and Neill on Defamation, 2nd ed, at p.14.

661. In the present case, Middendorp rely upon three bases for the defence of qualified privilege, namely -

(i) That the words complained of were made in pursuance of a social or moral duty resting on Middendorp, through Mr Smith, to Mr Dawson, who had a corresponding duty or interest to receive them;

(ii) That the statements were made in protection of an interest which Middendorp had and which was an interest shared with Mr Dawson;

(iii) That the statements were made for the protection or furtherance of an interest to Mr Dawson, who had a common or corresponding duty or interest to receive them.

667. In considering the defence, it is important to note the position of Mr Smith, and also the circumstances of Mr Dawson's relationship with Mr Sonneveld and Middendorp.

670. Mr Smith was an employee of Middendorp. He was not the manager of the shop where the communication occurred. Mr Lincoln was. There is no evidence that he was instructed by anybody within the Middendorp organisation to do anything to protect the interests of Middendorp, in having its account customers paying on time, or to protect its account customers from financial problems, which may affect their ability to pay Middendorp.

673. The circumstances surrounding the communication show that it was volunteered, and has all the attributes of passing on gossip or rumour.

676. Mr Dawson was an electrical contractor, who had an account with Middendorp at Hastings and who worked for Mr Sonneveld, and had done so willingly and without any difficulties or complaint. There was no evidence of the state of his account with Middendorp, at the relevant time. Indeed, his reaction to the defamatory words were such that he did not think worse of Mr Sonneveld, felt it was his duty to tell Mr Sonneveld as a friend and an employer at the time, and who later was upset that he had caused annoyance to both Mr Sonneveld and Mr Smith. It was my observation of Mr Dawson that he is a very decent and sensitive person.

679. Given those circumstances, can it be said that Mr Smith had a duty, social or moral, to tell Mr Dawson that his then employer may be a slow payer, a person who may not pay or who may have difficulty paying his debts? In my opinion, the great mass of right minded persons in the position of Mr Smith would not have considered it their duty, under the circumstances, to tell Mr Dawson what Mr Smith told him.

682. The evidence revealed that Mr Smith and Mr Dawson knew each other by reason of their contact at the shop; that they would pass the time of day whilst at the shop and discuss various things; that on one occasion, Mr Smith, who was an electrician by training, had assisted Mr Dawson with a job at Mt Eliza, and on another occasion, had delivered materials to his home. Whilst one could describe their relationship as a friendship, it was hardly a close or social friendship.

685. In my view, Mr Smith did not have any duty resting upon him to give the information to Mr Dawson.

688. It was submitted that the statements were made to protect the interests of Middendorp and Mr Dawson, that is, his interests to obtain payment, to enable him to continue in business, pay his debts and support himself and his family.

691. In Hunt v Great Northern Railway Co (1891) 2 QB 189 at 191, Lord Esher MR said -

"The occasion had arisen if the communication was of such a nature that it could be fairly said that those who made it had an interest in making such a communication, and those to whom it was made had a corresponding interest in having it made to them. When these two things co-exist, the occasion is a privileged one, and the question of whether it was or was not misused, is an entirely different one."

695. The "common interest" must be one which the law accepts. Generally, the common interest is a pecuniary one, but it may be professional. However, no privilege attaches to gossip, however interesting it may be to both the speaker and the hearer. To be within the privilege, the statement must be such as the occasion demands and must be to protect the private interests of both the speaker and the person addressed. See also Bryanston Finance Ltd v de Vries (1975) QB 703.

698. In my opinion, neither Mr Smith nor Middendorp had any interest in making the communication to Mr Dawson. Neither Mr Smith nor Middendorp had any interest to protect by communicating the matters to Mr Dawson.

701. Finally, it was said that the communication was made to protect common interest which was common to both Mr Smith, acting on behalf of Middendorp, and Mr Dawson. The argument was put that Middendorp had an interest in ensuring that its account customers had the ability to pay their accounts. Whilst that may be correct, it was not a matter that Mr Smith was directed to protect, nor was he given any instructions to take the steps. There is no evidence as to Mr Dawson's account or his ability to pay. In my view, Mr Smith had no interest which was common to any interest Mr Dawson had in paying his account. There is no evidence that Middendorp was concerned about the account. I do not accept that the communication was made to protect any common interest shared by Mr Smith or Middendorp, of the one part, and Mr Dawson, of the other part. The fact was the parties did not share a common interest.

704. I am not satisfied that Middendorp has established that the communication was privileged, and the defence fails.

708. Mr Sonneveld, in his reply, did not plead malice. However, in his counterclaim, he has alleged injurious falsehood, one of the elements of proof of which is malice, and accordingly, it was a live issue at the proceeding.

711. Malice is never easy to prove. See Horricks v Lowe (1975) AC 135, Caldwell v IPEC [1975] HCA 47; (1975) 135 CLR 321 and Duane v Granrott [1982] VicRp 76; (1982) VR 767 at 788. In all those cases, there was strong evidence suggesting malice, yet the court or jury held that there was no malice.

714. Evidence of malice is divided into two categories. They are, first, intrinsic evidence, and secondly, extrinsic evidence. The intrinsic evidence is to be found in the language used by the publisher, and this may provide evidence that he was actuated by malice. However, a wide latitude is allowed in the choice of words used. See Caldwell's case, supra, at p.332.

720. Extrinsic evidence is any evidence as to the state of mind of the publisher showing that he was actuated by express malice at the time of publication. The principles relating to malice have been restated by the House of Lords in Horricks v Lowe, supra, and have been followed often. The issue is concerned with the motives of the person who made the publication, and the publisher is entitled to be protected unless the plaintiff proves that the publisher had an improper motive for publishing the words, and that the improper motive was the sole or dominant motive. This casts upon a plaintiff, in this case the counterclaimant, the onus of showing that the person responsible for the communication did not honestly believe the words at the time of publication, or that he was recklessly indifferent as to the truth of the words. Alternatively, malice may be proven by some improper motive, by showing the publisher had a desire to injure the plaintiff or achieve some personal advantage, unconnected with the duty or interest which constituted the reason for the privilege.

723. If a defendant states that he honestly believed that what he said was true, and is believed, then the plaintiff would fail. See Laughton v Bishop of Sodor [1872] EngR 35; (1872) LR 4 PC 495, and Adam v Ward (1917) AC 309, and Horricks v Lowe, supra.

726. In my opinion, there is no evidence of malice. I accept the evidence of Mr Smith that he believed what he had been told by Mr Bricknell, and that he honestly believed what he said when he communicated the words to Mr Dawson. If I had found the defence of qualified privilege was proven, then it would not have been lost because there was no proof of malice.

730. The defamatory communication was a slander. The general rule is that unless the plaintiff proves special damage, the claim must fail unless the plaintiff proves that the words are actionable per se.

733. It follows that there are two issues to consider, namely -

(i) Did Mr Sonneveld suffer any special damage as a result of the defamatory communication?

(ii) Were the words actionable per se?

739. In addition to those two issues, Middendorp, as defendant to the counterclaim, has pleaded certain facts in mitigation of damage.

742. It will be necessary to consider the pleading and whether Middendorp is entitled to rely upon the matters pleaded in mitigation of damage.

746. The injury to the reputation of Mr Sonneveld is central to his cause of action. He must show that his character has suffered through the defamatory assertions made by Mr Smith. Where there is no presumption in his favour, then he can only show damage by giving evidence of some special damage.

749. Damages are presumed in cases where there is a libel or where the slanderous words are actionable per se. The reason for this is because of the very nature of the words used and the circumstances of the publication which led to the conclusion, there was a natural tendency to cause injury, loss and damage.

752. Special damage is actual damage suffered by the plaintiff.

"From libels and slanders actionable per se, we pass to the case of slanders not actionable per se, where actual damage done is the very gist of the action. Many old authorities may be cited for the proposition that in such a case the actual loss must be proved specially and with certainty." - Ratcliffe v Evans (1892) 2 QB 524 at 531. (Emphasis added).

756. It is necessary for the plaintiff to aver and prove that some particular damage has in fact resulted from the publication. Some damage must have accrued before the proceeding is brought.

759. Special damage necessary to support an action for slander, not actionable per se, must be in the form of loss of money or some other material temporal advantage, which is capable of being assessed in money terms. See Chamberlain v Boyd (1883) 11 QBD 407 at 412.

762. In addition to showing that there was special damage flowing from the communication, the plaintiff must go further and show clearly that the special damage was the direct result of the defamatory words, and not the consequence of some independent act due to a third person.

765. As a general proposition, when seeking to prove special damages, the Court expects the best evidence available, and if it is said that a person's business has been affected or that he has lost contracts, it would be necessary for him to prove, by production of his financial records, that his business did suffer an economic downturn, and call witnesses at trial who would say that they ceased to employ him, or were not prepared to enter into a contract with him, because of the defamatory communication. If the special damage, which has been proven, has been caused by the conduct of others, then the plaintiff must fail.

768. It is clear that it is unnecessary to call as witnesses those who ceased to do business with a plaintiff if he is able to show, by reference to his financial statements, a general diminution in his business, as distinct from the loss of particular contracts or inability to employ others. But he must show a causal link to the defamatory communication.

771. However, the connection may be established by the very nature of the words themselves. Where the communication concerns the plaintiff's business and the words were used in a way that was calculated to produce, and in the ordinary course of things would, and did, produce a general loss, evidence of such loss of business is admissible and sufficient damage to support the action.

774. The authorities establish that special damage must be expressly claimed and particulars given. It must be alleged with some certainty and precision. If a plaintiff relies on loss of customers or potential contracts, then he is obliged to set out the names of those involved to enable them to be identified.

777. In Ratcliffe v Evans, supra, at p.532, the Court said -

"The character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry." (Emphases added).

781. Mr Sonneveld did not allege, in his counterclaim, that he suffered any special damage. Paragraph 6 of his counterclaim asserted -

"6. In consequence I the defendant's personal and business reputation has been seriously damaged and I have suffered considerable distress and embarrassment."

785. In response to a request for further and better particulars of his claim for damages, Mr Sonneveld responded by stating -

"Damages for the defamation of my professional standing and reputation including loss of income and potential income from trading in the manner I was until aged 65 years could amount to M$100 as I was moving into International projects."

789. Mr Sonneveld asserted a number of times, at the Bar table, that he had difficulty in obtaining contract labour to assist him and that as a result, he was unable to perform work, and he also gave evidence to the same effect. However, he did not provide "chapter and verse" of his alleged loss. He was pressed to provide details of any work lost because of inability to obtain contract employment and further, he was asked what contract labourers refused to provide labour to him when requested. His evidence was vague and general, and lacked substance.

792. He gave no direct evidence that any particular contractor refused to work for him because of the defamatory publication, he did not refer to any specific job that he was unable to tender for or perform because of lack of contract labour, and he did not give any evidence of any monetary loss said to have been caused by the defamatory communication.

795. In the letter of demand sent by a solicitor on 17 February 1997, the following appeared -

"Last week alone our client found himself in the position of having to say no to a contract from Ford valued at $40,000 as a direct result of the labour position. Presumably you are aware of the 'bush telegraph' in your industry and how devastating the comments made by your employee could be."

799. Despite those assertions, Mr Sonneveld did not give any evidence of not being able to perform a contract for Ford. One can only assume that the allegation was unfounded, and this reflects upon his credibility.

802. The Court did point out to him a number of times the necessity to prove special damage, and after his income tax returns were tendered, he was told that they did not support his case. Despite the observations, Mr Sonneveld did not give any evidence of loss. He called two witnesses from Crib Point Engineering, but neither gave evidence of any loss.

805. Even assuming that he could not obtain contract labour in the months that followed the 2 February 1997 communication, there is no evidence to show that his inability to employ contract labour was due to the defamatory communication by Mr Smith to Mr Dawson. Indeed, the evidence clearly establishes that Mr Dawson was not affected by the defamatory communication, assured Mr Sonneveld that he would continue his employment with him from time to time, and thereafter, was employed by him. The evidence shows that Mr Bricknell, in the month of January, told a number of people of his dispute with Mr Sonneveld. If there was an inability to obtain contract employment, it could have been due to the communications made by Mr Bricknell to others.

808. But in addition to the foregoing, Mr Sonneveld's financial records and his job book clearly demonstrate that he did not suffer any monetary loss as a result of the defamatory communication.

811. He adduced into evidence his copy income tax returns for the years 1994 through to 1998. Middendorp tendered the copy tax return for the year 1993.

814. The tax returns revealed the gross amount of the business income and the amounts paid for assistant labour. The figures showed that Mr Sonneveld did not suffer any downturn in income, which could be attributable to the defamatory communication. Indeed, they showed that his income was in accordance with his business history, and the percentage of cost of labour to gross income remained much the same.

821. It is not surprising that he was unable to call any evidence, either by giving evidence himself or from any other source, to demonstrate that his work had declined or that he was unable to obtain contract labour.

824. In the year 1999, Mr Sonneveld conducted his business through a company and also obtained employment. There was a substantial drop in his income. It would appear that during that financial year, his business was unsuccessful. However, in my opinion, the drop in his income to 30 June 1999 was not due in any way to the defamatory communication. Mr Sonneveld called no evidence to demonstrate that the loss of his business was caused by the single communication to Mr Dawson. The 1st July 1998 was some 17 months after the defamatory communication, and by this time, he had been convicted of the two stalking charges. Mr Bricknell said that his convictions were the subject of discussion amongst the electrical contractors.

827. Neither party sought to analyse Mr Sonneveld's job book, which was placed in evidence. An examination of the book reveals that Mr Sonneveld's quantity of work during the six months prior to 2 February 1997, was approximately equal to the amount of work that he did in the six months that followed 2 February 1997. It is accepted that the type of work varied during each period and hence, the charge for same varied, but the job book does support the taxation returns, showing that there was no drop in the quantity or quality of the work by Mr Sonneveld after the defamatory communication.

830. Mr Sonneveld has not established any special damage as a result of the defamatory communication.

833. Unless the words were actionable per se, then the claim must fail.

837. Mr Sonneveld had conducted a business in partnership with his wife for some seven years prior to the defamatory communication. The business was electrical contracting and involved two areas of operation. First, Mr Sonneveld providing services as an electrician in a careful and diligent manner, and secondly, the operation of the business and all that that entails. The defamatory words do not reflect upon his ability as an electrician. Indeed, all the evidence supported the conclusion that he was a competent, careful and able electrician who had specialist qualities in the area of large complicated machinery. The evidence revealed that that was his general reputation as an electrician in February 1997.

840. However, the words do reflect upon him as a businessman, and attack his business ethics and the way he conducted his business.

843. The general rule is that words which disparage the plaintiff in the way of his trade, business or calling are actionable without proof of any damage.

846. Whether or not the words do disparage the plaintiff in the way of his trade, calling or business, is a question of fact. See Ramsdale v Greenacre (1858) 1 F and F 61; [1858] EngR 486; 175 ER 626. The words must affect the plaintiff in his trade, calling or business and directly prejudice him therein. That is, the words disparage him in the very means of his livelihood.

849. In Jones v Jones (1916) 2 AC 489, Lord Sumner stated the test for words actionable per se in relation to a person's calling at p.500, when he said -

"When words are spoken of a person following a calling, and spoken of him in that calling, which impute to him unfitness for or misconduct in that calling."

853. Mr Sonneveld conducted the business of electrical contractor on the day when the defamatory words were spoken and the question is, did they impute to him unfitness or misconduct in the conduct of the business?

856. In Alexander v Jenkins (1892) 1 QB 797, Lord Herschell, at p.800, said -

"It is quite clear that as regards a man's business, or profession, or office, if it be an office of profit, the mere imputation of want of ability to discharge the duties of that office is sufficient to support an action. It is not necessary there should be an imputation of immoral or disgraceful conduct. As was said in Lumby v Allday by Bayley B: 'Every authority which I have been able to find either shows the want of some general requisite, as honesty, capacity, fidelity et cetera, or connects the imputation with the plaintiff's office trade or business.' It must be either something said of him in his office or business which may damage him in that office or business, or it must relate to some quality which would show that he is a man who by reason of his wanted ability or honesty is unfit to hold that office."

860. In my opinion, although the defamatory words do not attack Mr Sonneveld as an electrician, the words do attack his integrity and ability, which are essential for the conduct of his calling, and in my opinion, the words are clearly actionable per se. They imply that he is a person who cannot be trusted to fairly deal with his employed contractors. In my opinion, the words do touch and concern him in the way of his business.

863. The law has always, in the past, jealously guarded the credit of persons engaged in business, and any imputation concerning solvency or any suggestion of pecuniary difficulties are actionable per se.

866. In the old case of Barnes v Holloway [1799] EngR 620; (1799) 8 TR 150; 101 ER 1316, it was said of a farmer - "He cannot pay his labourers". The evidence was that the defendant had asked a witness "if he had heard Barnes could not pay his labourers". It was held that the words were actionable per se.

869. As the words are actionable per se, damages are presumed and Mr Sonneveld is, accordingly, entitled to general damages.

873. Middendorp pleaded and relied upon certain matters in mitigation of damage.

876. Middendorp relied upon three categories of evidence to mitigate Mr Sonneveld's damages. They were -

"(i) That Mr Sonneveld had refused to pay Adrian Bricknell for work performed by him and therefore, Mr Sonneveld bore the reputation of a person who did not pay his sub-contractors;

(ii) That he had been convicted of two charges of stalking Adrian Bricknell and had falsely and publicly accused him of being a paedophile and hence, he bore the reputation of a common vicious liar;

(iii) General reputation that he was a difficult man to work with, generally unpleasant and the type of person that decent people, including other electrical contractors, did not want to have any dealings with.

883. The first category raises the question whether it is open to Middendorp to rely upon the evidence that he had not paid Mr Bricknell. It is relevant to the injurious falsehood claim, but is it relevant to the question of damages for slander?

886. Middendorp, as defendant to the claim, did not plead justification. Mr Panna submitted, however, that the evidence that he had not in fact paid Mr Bricknell and indeed had never paid Mr Bricknell for services rendered, was still admissible and relevant to the question of damages for slander. He submitted that since Mr Sonneveld had called evidence and had put in issue the very question. However, Mr Sonneveld called the evidence in relation to his injurious falsehood claim and secondly, to rebut the defence. I did raise with Mr Panna, on the second day of the proceeding, the doubt that he was entitled, on behalf of Middendorp, to argue in the absence of a plea of justification, that the defamatory words were true and therefore, relevant to the question of damages. Since the evidence was admissible to the question of injurious falsehood, it was unnecessary for me to rule at that time, but I did give Mr Panna the opportunity of placing any cases before the Court which entitled Middendorp to rely upon the evidence in mitigation of damage.

889. In my opinion, the law is clear. The general rule is that circumstances which, if pleaded, would be a complete defence to the proceeding, cannot be given in evidence in mitigation of damages, if not pleaded. See Speck v Phillips [1839] EngR 299; (1839) 5 M and W 279; 151 ER 119.

892. In Watt v Watt (1905) AC 115, Lord Halsbury LC, at p.118, said -

"Even in mitigation of damages it is well settled you cannot go into evidence which, if proved, would constitute a justification. Nor does it appear to me that it makes any difference if the evidence is offered in cross-examination."

896. And the rule still applies even if the words are capable of a variety of meanings. Evidence cannot be given in mitigation of damages that one particular meaning is true, even if defamatory, without an express plea to that effect. See Rumsey v Webb, (1841) Car and M 104; 174 ER 430 (see footnote (a)). Further, evidence that there was a widespread rumour or report to the same effect is also inadmissible because it falls short of justification and further, is objectionable as hearsay. See Scott v Sampson (1882) 8 QBD 491.

899. It would be open to a defendant, if a proper plea is made, to give evidence in mitigation that a certain specified portion of the words complained of are true, provided that the portion conveys a distinct imputation on the plaintiff and is divisible from the rest.

905. I refer to the summary of the law at paragraph 18.18 of Duncan and Neill on Defamation, 2nd ed., which supports the conclusion that the attempt by Middendorp to rely upon the evidence before the Court, which suggested that the defamatory communication was partially true, is inadmissible upon the question and irrelevant to the assessment of damages.

908. See also Plato Films Ltd v Speidel (1961) AC 1090 at pp.1133-4. It would be open to plead part justification and place the true part of the communication before the Court in mitigation of the damages - see ibid at pp.1141-2.

911. This was not done here. Middendorp could not prove the words were all true. The assertion that Mr Sonneveld had not paid Robbie Byrne was untrue and proved to be untrue.

915. On the other hand, as a general proposition, evidence may be given as to previous convictions and a plaintiff may be cross-examined on them.

918. Mr Sonneveld admitted that he was convicted at the Frankston Magistrates' Court on 14 April 1998 of two charges of stalking Adrian Bricknell and, amongst other things, falsely and publicly accused him of being a paedophile, and published, at various premises in the Hastings area, notes stating -

"WARNING to all parents. There is a low life pederfile (sic) stalking our children in this area, he is Adrian Bricknell living in 11 Pierce Street Cribb Point, look out for your children."

922. Mr Sonneveld informed the Court that he frankly admitted what he had done to the police, when questioned, and pleaded guilty to the two charges.

925. These convictions occurred some 14 months after the defamatory publication, in respect of events which occurred about 12 months after the publication and some eight months before Mr Sonneveld made a claim for damages in this Court.

928. They were not convictions prior to the publication.

931. Clearly, convictions such as those would be relevant to Mr Sonneveld's general reputation. But are they relevant to damages in this case? In Goody v Odhams Press (1967) 1 QB 333, at 340, Lord Denning MR said -

"I think the previous convictions are admissible. They stand in a class by themselves. They are the raw material upon which bad reputation is built up. They have taken place in open court. They are matters of public knowledge. They are accepted by people generally as giving the best guide to his reputation and standing. They must of course be relevant, in the sense, that they must be convictions in the relevant section of his life and have taken place within a relevant period such as to affect his current reputation ... They are very different from previous instances of misconduct, for those have not been tried out or resulted in convictions or come before a court of law."

935. The other two members of the Court of Appeal were of the same opinion. The Court of Appeal, in that case, made new law. At p.341, Lord Denning said -

"We are faced today for the first time in these courts with the question whether previous convictions are admissible in mitigation of damages. I think they are. For the simple reason that damages for libel are given for injury to character and reputation: and what better guide can there be to his character and reputation than his previous convictions?"

939. In that case, plaintiff Goody had in fact been convicted of a number of offences prior to the publication of the alleged libel. What the Court of Appeal held was that such prior convictions are relevant and admissible on the question of damages.

942. In my opinion, it does not follow that the principle stated by the Court is confined to convictions actually recorded prior to the defamatory publication.

945. What if the plaintiff had committed an offence and was charged with same prior to the publication of the defamatory material, and was then subsequently convicted? Would it follow that such a conviction was not admissible because it was not a prior conviction? In my opinion, logic dictates the course taken by the Court of Appeal in Goody and leads to admission of the conviction as relevant to the damages.

948. In Goody's case, Salmon LJ pointed out at p.344 that the conviction had to be relevant and fairly recent. His Lordship said -

"It must not be thought that because of our decision in this case it follows that evidence of a conviction can always be given in mitigation of damages in an action for libel. Everything turns upon the nature and the date of the conviction. In the present case the convictions are all recent and highly relevant to the imputation in the article complained of. There may be cases, however, e.g., where the convictions occurred long ago and are irrelevant, in which it would be manifestly unjust and impermissible in law to make any reference to them in mitigation of damages."

952. Nothing was said by any member of the Court of Appeal which would preclude the admission of a conviction, prior to the assessment of damages, being admitted into evidence and relevant to the question of mitigation of damages. Of course, the conviction would have to be relevant to the defamation.

955. The question arises here whether the two convictions are admissible and can be taken into account on the question of damages. They are not prior convictions, in the sense of occurring before the publication of the defamatory words.

958. Mr Panna submitted that the two convictions, although subsequent to the publication of the defamatory words, were admissible in evidence. He drew my attention to the Law of Defamation, by Michael Gillooly, at p.295. The learned author dealt with changes to the plaintiff's reputation subsequent to the publication. He posed the question -

"A question arises as to whether reputational changes that take place after the publication but before the assessment of damages should be taken into account in that assessment. The traditional rule is that such changes ought not to be considered - it is only the plaintiff's reputation at the time of the publication that is material."

962. The author referred to a number of authorities in support of that proposition. But he went on to query whether the rule should apply where the change in reputation has not been brought about by the defamatory publication itself, but by reason of other factors which affect the reputation of the plaintiff. He referred to what McGechan J stated in the case of TVNZ v Quinn (1996) 3 NZLR 24 at 52, where His Honour said -

"For my own part, I am not attracted to any rigid rule under which the quantum clock stops at the moment of defamatory publication. Reputation is an ongoing state. In assessing compensatory elements in damages, there seems room logically for allowance of damage which hindsight tells us would have occurred in any event."

"I accept the defendant may plead the windfall of post-defamation damage by extraneous causes to a plaintiff's reputation as a factor in mitigation of compensatory damage. The authorities are mixed, but it is a matter of common sense. The damage caused, an otherwise ongoing state, is not so extreme."

970. In that case, the post-publication material was not prior convictions but other matters which reflected upon the plaintiff's reputation.

973. When one considers the objectives of an award of damages which are assessed at trial, logic and common sense points to the conclusion that any convictions of a serious nature, which clearly adversely affect the plaintiff's reputation or indeed destroy it, should be admissible on the question of damages. On what basis can the law allow a sum of damages to a man who, at the date of trial, had no reputation at all?

976. Some authorities appear to preclude such evidence in mitigation of damage.

979. General damages are those damages which the law presumes to be the natural or probable consequence of the publication of the defamatory words. They arise by reason of the law, and need not be proved in evidence. The damages are recovered wherever the immediate tendency of the words is to impair the plaintiff's reputation, although no actual pecuniary loss has in fact resulted. See Watt v Watt, supra.

982. An assessment of damages in a defamation case achieves two broad purposes. The first is to award compensation to vindicate the plaintiff's reputation in the minds of those who know him or know of him. The second aspect of damages is to compensate for injury to feelings, that is, self-hurt, the distress, upset, indignation and annoyance caused by the publication.

985. In Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118, at p.150, Windeyer J said -

"It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as consolation to him for the wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money. The variety of the matters which, it has been held, may be considered in assessing damages for defamation must in many cases mean that the amount of a verdict is the product of a mixture of inextricable considerations." (Emphasis added).

989. See McCarey v Associated Newspapers Ltd (1965) 2 QB 86 at 105.

992. That part of the damages, which compensates the plaintiff by vindicating his reputation, is fixed at the date of the trial and is a representation to the public that his reputation has been vindicated. If his reputation has been lessened or destroyed by reason of events which occurred after the publication and which were irrelevant to the publication, then, as a matter of logic and common sense, it seems to me that the change to his reputation, post the publication, should be admissible in evidence as going to the question of vindication of his reputation.

995. This view is supported by what McGechan J said in the New Zealand case.

998. It is now necessary to consider the authorities which Mr Gilooly referred to in support of his general proposition.

1001. In Associated Newspapers Ltd v Dingle (1964) AC 371, the House of Lords was concerned with a situation where a newspaper published, in privileged circumstances, a report of a committee of Parliament containing matter defamatory of the plaintiff. One month later, on 16 June, the Daily Mail published an article in unprivileged form, and some ten days later, published a further article stating that all interested parties had been cleared of any deliberate intent to defraud. The plaintiff brought a proceeding in respect of the libel contained in the article of 16 June, which was unprivileged. The judge mitigated the amount awarded, by taking into account the effect on the plaintiff's reputation of the same libel appearing in a privileged form previous to the publication of the libel. The Court of Appeal set aside the judgment and disagreed with the trial judge. The House of Lords dismissed the appeal. The House held that the judge wrongly took into account the effect of the other publications of the libel, for the publication of the same libel by other persons on other occasions was irrelevant in mitigation of general damages.

1004. The reason why the evidence was irrelevant was summarised by Lord Radcliffe at p.396, when he said -

"Whatever may be the qualifications or requirements as to evidence led on the issue of reputation by way of mitigation of damages for libel, I do not believe that it has ever yet been regarded as permissible to base such evidence on statements made by other persons about the same incident or subject as is embraced by the libel itself. In my opinion, it would be directly contrary to principle to allow such an introduction. A libel action is fundamentally an action to vindicate a man's reputation on some point as to which he has been falsely defamed, and the damages awarded have to be regarded as the demonstrative mark of that vindication. If they could be whittled away by a defendant calling attention to the fact that other people had already been saying the same thing as he had said, and pleading that for this reason alone the plaintiff had the less reputation to lose, the libelled man would never get his full vindication."

"Where one speaks of a plaintiff's 'actual' reputation or 'current' reputation one means his reputation as accumulated from one source or another over a period of time that precedes the occasion of the libel that is in suit."

1012. What Lord Radcliffe said has to be taken in context. Again, he was referring to the use of repetition of the same defamatory words by other persons contemporaneously with the publication.

1015. In my opinion, the case does not stand for the proposition that any changes to one's reputation after publication, by reason of convictions for serious offences, cannot be taken into account on the assessment.

1018. The second authority referred to by Mr Gilooly is Rochford v John Fairfax & Sons (1972) 1 NSWLR 16.

1021. In that case, in May 1969, A was charged with stealing and R was charged with aiding and abetting. A newspaper published a report of the committee. In November 1969, R sued the newspaper for defamation. The defence was that the publication was a fair report of a public proceeding of a court of justice. In February 1970, A and R were charged with conspiracy to defraud arising out of the same events, and in July 1970, they were discharged on the earlier charges and were committed for trial on the latter charge. Prior to the civil trial, the judge ordered the postponement of the trial pending the outcome of the criminal trial, upon application by the newspaper. On appeal, the Court of Appeal ordered that the matter proceed. One of the reasons advanced by the newspaper for the postponement was, that if the plaintiff was convicted of the offence, it would be relevant to the plaintiff's reputation.

"Nor, finally, can the last matter relied upon, namely admissibility of a conviction, should it occur, as going to the plaintiff's reputation, be regarded as of any account. The case to which we have been referred of Goody v Odhams Press Ltd itself illustrates that the admissibility of convictions for this purpose is limited to convictions which have occurred prior to the publication of the defamatory matter sued for. They are referred to throughout in that case as 'previous convictions'; and that they were previous convictions in the sense mentioned is the very ground on which their inadmissibility was claimed by the defendant in that case:"

1028. His Honour also referred to Gatley on Libel and Slander, 6th ed., paragraph 1337, and he referred to what Lord Radcliffe said in Associated Newspapers Ltd v Dingle, supra, at p.399.

1031. That dicta, which was agreed to by Holmes and Mason JJA, supports the view that a conviction post publication but pre assessment of damages is not relevant to the assessment of damages. However, the reasoning is not persuasive. It proceeds on the basis that since the Court of Appeal was concerned with convictions prior to the publication, the relevance was confined to that situation. But that view does not logically follow.

1034. The importance of Goody's case is that the Court of Appeal held that a conviction, in certain circumstances, was an exception to the rule that specific acts of misconduct concerning a plaintiff were irrelevant in the assessment of damages, and any attack concerning reputation was concerned with general reputation and not specific acts of misconduct.

1037. As Lord Denning MR said, concerning a conviction, at p.341 -

"They are very different from previous instances of misconduct, for those have not been tried out or resulted in convictions or come before a court of law. To introduce those might lead to endless disputes. Whereas previous convictions are virtually indisputable."

1041. That is the rationale for the admission of a conviction which is relevant to general reputation.

1044. I respectfully disagree with the ruling in Rochford's case as it does not grapple with the true basis for the admission of the conviction, and proceeds on an assumption that because the facts showed that the convictions occurred prior to publication, the principles should be confined to that situation. That, in my view, does not logically follow.

1047. The question is whether the principles stated by the Court of Appeal in Goody's case also apply to a post-publication conviction, which is relevant to the issues in the case. Logic and common sense, in my respectful opinion, leads to an affirmative answer.

1050. The third authority referred to is Pamplin v Express Newspapers Ltd (No. 2) (1988) 1 All ER 282. In that case, the publication was on 21 October 1979 and alleged that the plaintiff was "a spiv". The defendant pleaded justification and fair comment. One of the pleas of mitigation of damages was the plaintiff's convictions, some months after publication and a year later, of failing to provide a specimen of breath for a breath test and wilfully obstructing a police constable in the execution of his duty. That evidence was placed before the Court at first instance and was relevant to the plea of justification. On appeal, Neill LJ, at p.286, referred to relevant criminal convictions, recorded against the plaintiff, being admitted into evidence and referred to what Lord Denning MR said in Goody v Odhams Press Ltd, supra. His Lordship then went on to say -

"The evidence must be evidence of the plaintiff's reputation at the date of the publication of the words complained of. This rule is in accordance with principle and with the judgment of Cave J in Scott v Sampson (1882) 8 QBD 491 at 503 and the judgment of O'Connor LJ in the1983 appeal in the present case."

1054. But His Lordship was stating the principles as propositions, and did not discuss them in the context of damage. What Cave J said has to be considered in context. His Lordship was considering the situation of acts of specific misconduct and rumours. He was not referring to criminal convictions.

1057. Oliver LJ, at p.125, was of the view that the recent subsequent convictions were arguably admissible, although he seemed to be of the view that a conviction some 12 months' after the publication was not material.

1060. But there was no consideration of the application of the principles in circumstances where there was no plea of justification.

1063. Finally, the learned author referred to the High Court case of Carson v John Fairfax & Sons [1993] HCA 31; (1993) 178 CLR 44.

"Similarly, the jury was entitled to use the publication of the first article, the circumstances concerning its publication, and the conduct of John Fairfax & Sons Ltd after its publication as increasing the hurt and harm occasioned by the second article. But they were not entitled to reduce the damages otherwise payable in respect of the second article because the plaintiff had obtained a substantial award in respect of the first article because of any assumption that the first article had already harmed the plaintiff's reputation."

1070. What McHugh J was talking about is made clear by what he said at p.101, when he referred to the fact that damages for both articles had to be assessed on the basis that the plaintiff was a person of undamaged reputation at the time of each publication.

1073. His Honour was dealing with the principles established in Dingle's case.

1076. But in my view, that does not mean that it is not open to a defendant to establish that because of a conviction for a relatively serous criminal offence, subsequent to the publication, which has a substantial effect upon the plaintiff's reputation, the conviction should be ignored by the tribunal assessing the damages.

1079. In Gattley on Libel and Slander, 9th ed, the learned authors, at paragraph 33.31, referred to evidence of subsequent bad character. They state -

"The evidence must be confined to the general bad character of the plaintiff prior to, or at the time of, the publication of the libel."

1083. In support of that proposition, the authors referred to what Lord Radcliffe said in Dingle's case at p.399. However, what Lord Radcliffe said must be considered in context, namely, a defendant seeking to reduce damage because of what other people have been saying about the plaintiff at the time of the publication. In addition, reference is made to Rochford's case, supra. For reasons which I have already stated, the reasoning of the Court is not persuasive.

1086. The learned authors of Gattley go on to say -

"Evidence of bad character subsequent to that time is not admissible in mitigation of damages, otherwise 'a person might slander another and then call some of the neighbours to say that they had heard imputations which he had himself set afloat'."

1090. In support of that authority, is the case of Thompson v Nye [1850] EngR 935; (1850) 16 QB 175.

1093. In Thompson's case, which is reported in [1850] EngR 935; 117 ER 846, the plaintiff brought a proceeding in defamation for words imputing unnatural practices. In that case, it was held that the defendant could not ask a witness whether he had heard that the plaintiff was addicted to such practices. The question was general and not confined to reports existing at the time of the slander.

"Without deciding the general point, or giving any opinion upon it, I am of the opinion that the question must, at any rate, be confined to rumours existing before and at the time of uttering of the words which are the subject of the action. If any other rule prevail, the consequences might be that a man might circulate a slander, and then call as witnesses all persons who had heard the slander from him and thus avail himself of his own wrongful act. Now the question, as proposed at the trial was not so confined."

1100. In my opinion, that case does not stand for the proposition that post-publication convictions which bore on the plaintiff's reputation were not admissible on the question of damages.

1103. In my opinion, to exclude evidence of relevant convictions, which affect the reputation of the plaintiff, prior to the assessment of damages, is to deprive the tribunal of fact of a material matter relevant to the vindication of the plaintiff's reputation. In my view, it is logical to extend what was said in Goody's case to pre-trial convictions, and to do otherwise would fail to take into account one of the objects of damages, which is to restore the plaintiff's reputation in the eyes of those who know him and the public generally.

1106. This happens at the time judgment is delivered, and it seems incongruous to award substantial damages to a plaintiff whose reputation, by reason of the commission of a relatively serious offence, has been destroyed prior to the judgment being pronounced. The Court is telling the world the plaintiff has a good reputation at the date of judgment, yet the truth is that he has no reputation. Such a result defies logic and common sense, and brings the law into contempt.

1109. In my opinion, the conviction leaves untouched the other aspect of damages, namely, the hurt caused by the defamatory words, although in certain circumstances, the conviction would also be relevant to that part of the damages.

1112. Mr Sonneveld, some 12 months after the defamatory publication was made, committed two serious offences, the circumstances of which, when known to others, would result in him being despised and held in contempt. What reputation he had would be destroyed in the estimation of right thinking people. He then issued his claim for damages. How can his reputation be vindicated in those circumstances?

1115. In my opinion, the evidence of the two convictions is relevant to the assessment of damages.

1119. It is well established by old authority that evidence as to the plaintiff's general bad character is admissible. See Thompson v Nye, supra.

1122. In my opinion, the only evidence of general reputation concerning Mr Sonneveld, at the time of publication, showed that he was considered to be a difficult person to work with, was over-demanding and could be difficult at times. In my opinion, that general evidence was not relevant to the defamation, and I place no weight upon it.

1126. The slanderous words were published in circumstances where they were actionable per se. Damage is presumed. Mr Sonneveld is entitled to an award of general damages.

1129. As the words are actionable per se, the law presumes damage.

"Akin to, though distinguishable in a respect which will be mentioned from, actions of libel are those actions which are brought from oral slander, such slander consists of words actionable in themselves and the mere use of which constitutes the infringement of the plaintiff's right. The very speaking of such words, apart from all damage, constitutes a wrong and gives rise to a cause of action. The law in such a case, as in the case of libel, presumes, and in theory allows, proof of general damages. But slander, even if actionable in itself, is regarded as differing from libel in a point which renders proof of general damage in slander cases difficult to be made good. A person who publishes defamatory matter on paper or in print puts in circulation that which is more permanent and more easily transmissible than oral slander. Verbal defamatory statements may, indeed, be intended to be repeated, or may be uttered under such circumstances that their repetition follows in the ordinary course of things from their original utterance. Except in such cases, the law does not allow the plaintiff to recover damages which flow, not from the original slander, but from its unauthorised repetition". - per Bowen LJ in Ratcliffe v Evans, supra, at p.530.

1133. What his Lordship said applies in the present case. Mr Sonneveld has proved but one communication of the defamatory words, to a person who was not affected in any way by them, and who evidently did not repeat the words to anyone other than Mr Sonneveld. The fact that Mr Dawson was not affected by the words is no defence, but is relevant to the assessment of damages.

1136. There are various factors that are taken into account in assessing general damages. The cases establish that the following factors are relevant to the exercise of assessing the damages. They are -

(i) injury to feelings, anxiety and annoyance;

(ii) anxiety and the uncertainty involved in conducting the litigation;

(iii) the absence of an apology;

(iv) the re-affirmation of the truth of the matters complained of;

(v) the malice of the defendant;

(vi) the number of publications and the area of circulation;

(vii) the gravity of the imputation;

(viii) evidence showing the gravity of the damage done to the plaintiff's reputation;

(ix) evidence establishing an excellent reputation prior to the publication.

1142. I refer to Cassell v Broome [1972] UKHL 3; (1972) AC 1027 at 1071 and 1125.

1145. In addition, a court may award aggravated damages because of the way the defendant has behaved in respect of the commission of the tort, or the way the case has been conducted at trial. See Cassell v Broome, supra, at 1085.

1148. In addition to the factors which weigh in favour of a plaintiff, it is necessary to also weigh up factors which will tend to mitigate the damages suffered by the plaintiff. The fact that the defendant published the defamatory words without malice, is a relevant matter to take into account in favour of the defendant. If he repeats a version which is given to him and states the source of his information, then on the basis that he did not originate the false statement, but innocently repeated it, bears upon the question of the defendant's lack of malice towards the plaintiff. In the present case, I accept the evidence of Mr Smith, that he was motivated by a desire to assist Mr Dawson and did not seek to maliciously communicate the words. Further, if there is any evidence of the plaintiff's general bad character prior to the publication or if the plaintiff did not have any reputation to be injured, he would only be entitled to a very small amount of damages. There is no evidence of bad character prior to publication. Further, if an apology has been made, that would also be taken into account.

1151. In the present proceeding, Mr Panna, on behalf of Middendorp, submitted that Mr Sonneveld was entitled to only a very small amount of damages. He emphasised the fact that there was but one communication of the defamatory words; that Middendorp was prepared to apologise but was thwarted, because Mr Sonneveld would not compromise their dispute, despite reasonable terms being offered; that Mr Sonneveld was motivated purely and simply by a desire to recover a large sum of compensation from Middendorp and was not concerned about his reputation or restoring it; that what Mr Smith said was true, based upon the evidence called by Mr Sonneveld; and that generally, Mr Sonneveld had a bad reputation amongst electrical contractors. Mr Panna emphasised that the defamatory words had no real effect upon Mr Sonneveld's reputation because the publishee, Mr Dawson, was not in any way affected by what he had been told, that he continued to work for Mr Sonneveld, and that there was no evidence of any special damage demonstrating an effect upon his ability to conduct his business or obtain contract labour; that a proper analysis of the conduct of Mr Sonneveld demonstrated that he was not concerned about his reputation, but was concerned about recovering a large sum of compensation from Middendorp.

1154. In determining what is an appropriate amount for general damages, it is necessary to weigh up all the relevant matters.

1157. The publication was to one person, and did not affect Mr Sonneveld in the eyes of Mr Dawson. Mr Dawson appeared to be a loyal, sensitive person, who was clearly upset by what Mr Smith had told him, and informed Mr Sonneveld to reassure him that he was not affected by what had been said and would continue to work for him under the same arrangements for payment. The case is concerned with the publication in those circumstances. The mere fact that it had no effect upon Mr Dawson does not mean to say that Mr Sonneveld is not entitled to recover damages. The tort of defamation has still been established. His reputation in the eyes of Mr Dawson has not been diminished but nevertheless, the other aspect of damages applies, namely, the distress and annoyance that another person has been speaking ill of him. See Morgan v Odhams Press Ltd (1971) 1 WLR 1239 at 1246 per Lord Reid. As his Lordship said -

"It is true that X's reputation is not diminished but the person defamed suffers annoyance or worse when he learns that a defamatory statement has been published about him."

1161. Mr Sonneveld, in evidence-in-chief, did not state the effect of the defamatory words upon him, but it is clear from his conduct that he was extremely annoyed by what had been said. In cross-examination, he did admit that he was somewhat distressed by what he had heard. Further, no apology was in fact made by Middendorp. Mr Sonneveld's legal advisers prepared a draft apology, there is no doubt that Middendorp was prepared to apologise in suitable terms, and when the union was acting on behalf of Mr Sonneveld, its representatives and Middendorp's solicitors did agree on a form of an apology, but the settlement broke down. In those circumstances, it cannot be said that Middendorp did apologise and accordingly, I proceed on the basis that there is an absence of an apology.

1164. Although in the course of the case, the issue as to whether the words spoken were true came into consideration because of the injurious falsehood case, Middendorp did not plead justification, and I ignore the evidence which provided some basis for the defamatory imputations. As I have already stated, the words were not true, in that Mr Rob Byrne had not worked for Mr Sonneveld for years and did not say that he had not been paid. Further, in favour of Middendorp, I am satisfied that Mr Smith was not in any way actuated by malice, was repeating what was evidently common knowledge according to Mr Bricknell, and that he communicated the words to Mr Dawson with the intention of looking after the interests of Mr Dawson.

1167. The imputations were grave, bearing in mind the fact that Mr Sonneveld's business did rely to some extent upon the availability of contract labour, and the suggestion that he might not pay was precisely that, a suggestion and no more.

1170. There was no evidence from Mr Sonneveld or any other source that any other contractors refused to have anything to do with him because of the alleged communication.

1173. On the other hand, I am quite satisfied that Mr Sonneveld was extremely upset and annoyed by what had been said of him, and that these are matters to take into account in assessing what are appropriate damages.

1176. But in assessing the impact on him of knowledge that the words were spoken of him, it is relevant to take into account two important aspects in this case. The first is that in August 1997, negotiations broke down between the parties, and the litigation brought by Middendorp literally went to sleep. It was not revived until the following year, in September. Mr Sonneveld, in the meantime, did not take any steps to bring a proceeding against Middendorp or take any steps himself to repair his reputation amongst local contractors. By way of example, he could have written, as I have already stated, to other contractors, assuring them that the rumours were false and that he would always pay contractors if employed by him. It was not until Middendorp, as plaintiff, delivered its statement of claim that Mr Sonneveld actually took the step of making a claim for damages. This was in December 1998, and was nearly two years after the defamatory publication. That fact in itself, is eloquent testimony of the lack of impact upon Mr Sonneveld's reputation and his alleged hurt feelings.

1179. The second matter of importance is that the conduct of Mr Sonneveld, from the very time he first engaged his lawyers until negotiations broke down in August 1997, was motivated by one desire only, and that was to teach Middendorp a lesson and to recover a large sum of compensation. Although he gave evidence, to some extent supported by his solicitor, Ms Brann, that his first concern was to protect his image and reputation, the fact is that in the letter of demand written on 17 February 1997, he made it clear to the reader of the letter that he was contemplating seeking damages, and in the body of the letter he made reference to the loss of a contract. In March, he told Mr Andreola that there were important issues with respect to the outstanding debt, and hence he would be deferring payment. In April 1997, he had discussions with Mr Nicholas Middendorp, during which it was made clear that Middendorp was prepared to make an apology and was prepared to meet with Mr Sonneveld to resolve the dispute. In my view, Middendorp acted reasonably during that period. Mr Sonneveld was acting in an unreasonable manner by refusing to meet, and he brought the attempts to settle to an end. The reason was that he wanted something more than an apology.

1182. He commenced his campaign of threatening Middendorp with the circulation of defamatory material which, in my view, was aimed at extracting a sum of compensation from Middendorp. Further, when Middendorp brought its proceeding in this Court, it acted reasonably, in an endeavour to compromise the dispute. Mr Sonneveld engaged the services of the Electrical Trades Union, who in turn negotiated a settlement in principle which, with the benefit of hindsight, was clearly in the interests of both parties, yet Mr Sonneveld was not prepared to compromise. Whilst he may have had some legitimate concerns about the deed of release, he did not himself take any step to highlight the problem and in the end, refused to sign the release. In my view, he was acting unreasonably and again, motivated by a desire to punish Middendorp and extract a sum of compensation. Even after he had his problems with the stalking charges, his then solicitor, Mr Crowther, made an approach to Middendorp's solicitors to compromise all matters, and again Mr Sonneveld took it into his hands to refuse to talk.

1185. Mr Panna also submitted that Mr Sonneveld's reputation was such that the defamatory communication would have no effect upon his reputation. I do not accept that at the time of the defamatory communication, Mr Sonneveld had a bad reputation. He had a very good reputation as an electrician and tradesman, but was viewed by those who knew him as a person who demanded high standards, was quick to criticise fellow workmen, and was generally difficult to get on with. That may be so, but in my view, does not affect his general reputation, and I do not take it into account. I view Mr Sonneveld as a man of good reputation at the time the defamatory communication occurred.

1188. I have to assess damages as at today, which is now some four years and seven months since the defamatory communication, which comprised one publication.

1191. Damages are to compensate Mr Sonneveld for the injury done. They are not to punish Middendorp.

1194. This case concerns a slander. The words were spoken on one occasion to a person who did not think less of Mr Sonneveld as a result. The words, once spoken, cease to exist. Nothing was left except the impression created in the mind of Mr Dawson, who thought little of it and reassured Mr Sonneveld that he was unaffected by the words. Mr Sonneveld made his annoyance known to Messrs Lincoln and Smith, and this effectively nipped in the bud any question of repetition.

1197. Mr Sonneveld did not take any practical step to minimise any damage to his reputation other than approaching his solicitors. His failure to take any practical steps, such as approaching sub-contractors and reassuring them, is reflective of the minor nature of the defamatory communication. He did not bring any proceeding for damages until nearly two years after the event, and then only after Middendorp had filed its statement of claim, claiming a permanent injunction.

1203. Weighing up all relevant matters, if I ignore the effect of the convictions on his general reputation, in my opinion, the proper amount for damages is $250, to compensate him for hurt of the defamation and to vindicate his reputation. But as I am of the opinion that the convictions are relevant to his reputation at the date of assessment, I award him the nominal sum of $10 for damages.

1207. Mr Sonneveld has failed to prove that the words spoken of him were published maliciously by Mr Smith, and further, that he suffered any special damage. Accordingly, he fails in his claim based on injurious falsehood.

1211. It follows that Mr Sonneveld has succeeded in establishing his claim in slander, and is entitled to a judgment in the sum of $10.

1214. I will hear the parties on the question of costs.