Supreme Court of SA|1997-03-13|Before: Olsson J

MORGAN v MALLARD AND ANOR No. SCGRG 96/1962 Judgment No. 6056 Number of pages - 16 Defamation (1997) 68 SASR 184 [1997] SASC 6056 (13 March 1997)

Defamation - civil appeal against judgment for $10,000 damages in favour of the respondents for an action in defamation - material was published to Chief Executive Officer of Workcover Corporation in relation to senior officer of Corporation - issue was which test to apply to determine whether the reader of the material would conclude that it carried defamatory imputations - where material is only published and intended to be published to one person or a class of persons with a given level of knowledge due to their position or vocation, the test is whether the individual or class to whom it is published would construe the material as defamatory - in this case the material would have conveyed defamatory imputations to the individual to whom it was actually and intended to be published - assessment of damages correct - appeal dismissed. Whistle Blowers Protection Act 1935 s5, referred to. Drummond-Jackson v British Medical Association and Ors [1970] 1 All ER 1094; FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 479; Pearce v Hailstone (1992) 58 SASR 240, applied. Rubber Improvement Ltd and Anor v Daily Telegraph Ltd ; Consolidated Trust Co Ltd v Browne ; ; Grubb v Bristol United Press Ltd ; Farquhar v Bottom (1980) 2 NSWLT 380; Mirror Newspapers Ltd v Harrison ; , distinguished. Sim v Stretch , considered.

ADELAIDE, 20 January 1997 (hearing), 13 March 1997 (decision)

Counsel: Mr C Goodall - Solicitors: Stanley & Partners

Respondent Mr Roderick Freeman Mallard and Mrs Sandra Wendy Dorothea Mallard:

This is a defendant's appeal against a judgment entered by a stipendiary magistrate against her, in the sum of $10,000, by way of damages for defamation, in favour of one of two plaintiffs.

In her notice of appeal the appellant complained that certain imputations found by the learned magistrate to have arisen from the publications complained of did not arise as natural and ordinary meanings, that the finding by the learned magistrate that the appellant was motivated by malice was erroneous, that the decision arrived at was against the weight of the evidence and that the learned magistrate wrongly rejected a defence under section 5 of the Whistle-blowers Protection Act, 1993. The appellant further contends that, in any event, the damages awarded were manifestly excessive.

In the event, the appellant abandoned certain of these contentions on the hearing of the appeal and I need do no more than make passing reference to them.

It is fair to say that the evidence and argument before the magistrate ranged over a substantial number of factual and legal issues. Ultimately, he published carefully considered and definitive reasons for decision extending to almost 60 pages. In those reasons he fully dealt with the matters in contention and I am indebted to him for his close analysis of the relevant material.

I find it unnecessary to retraverse all of the ground covered by the learned magistrate. The issues arising on the appeal are considerably more confined than those with which he was required to grapple. For reasons which will rapidly emerge, I propose to do no more than recapitulate certain core factual aspects which are germane to the issues debated before me.

The first point to be made is that, as presented at first instance, the proceedings constituted associated, but separate, claims for damages for defamation made by two plaintiffs against a single defendant. The two plaintiffs were husband and wife. The defendant was a woman who, for a period of time, had become a close social friend of the plaintiff wife, but who had, ultimately, fallen out with her for reasons which are not important for present purposes. There is, however, no doubt that, at the times of the various publications, the appellant bore considerable ill-will towards both plaintiffs.

In these reasons I will refer to the plaintiff husband as "the respondent", the plaintiff wife as "the second plaintiff" and the defendant at first instance as "the appellant".

The respondent was, at all material times, a senior officer of Workcover Corporation ("the Corporation") - the entity responsible for processing claims for compensation arising from work caused disability, in respect of other than exempt employers (who were permitted, in effect, to carry their own compensation risk under the Workers Rehabilitation and Compensation Act 1986 ("the WRCA")). He was, in fact, manager of its internal audit department and reported direct to its Board, although, for the purposes of personnel and general administration, his immediate superior was Mr Owens, the Chief Executive Officer of the Corporation. His position was such that, manifestly, the incumbent had to be regarded, in employment terms, as a person of the highest integrity and who was unequivocally committed to the best interests of the Corporation.

The second plaintiff, his wife, was, at least up until mid October 1993, employed as a cook in a takeaway food shop. It emerged that she was normally paid in cash (without PAYE deductions being made) and that her employers were not registered with the Corporation - this, it was said, being a contravention of their statutory obligation pursuant to the WRCA.

For present purposes, it is significant that the second plaintiff asserted that, in the course of her employment duties on 12 October 1993, she sustained injury to her hand, with associated disability. She lodged a claim for compensation with the Corporation shortly thereafter, with the eventual consequence that her employers were prosecuted for failing to register under the WRCA. Her claim was accepted on 26 January 1994 and compensation payments were made to her.

The defendant initially met the second plaintiff at the takeaway outlet in about May 1993, following which the two women became firm friends, until they fell out with one another some time between about April and June 1994.

It is a reflection of the respondent's sense of probity that, when the second plaintiff lodged her claim for compensation with the Corporation, he made formal disclosure to that entity of his relationship with her as a claimant.

All three parties gave oral evidence before the learned magistrate. There were significant disputes as to narrative fact arising between them, which required him to express definitive findings as to relative credibility.

In essence, for reasons which he expressed, he arrived at these conclusions -(1) The respondent was an excellent witness, who was concise and definite and expressed himself well. He impressed as a reliable and credible witness.(2) The second plaintiff did not present as well as her husband and one aspect of her credit was undermined by the evidence of the independent witness Eate. Her evidence could only be accepted, as to disputed facts, when it was corroborated by that of her husband.(3) In many respects the appellant demonstrated herself to be unreliable, untruthful or evasive. However, in relation to a number of alleged conversations or dealings as between the two women, the appellant's account was to be preferred to that of the second plaintiff.

Those general assessments are really beyond challenge, in the context of the present appeal, and I did not understand counsel to attempt to go behind them.

Given that situation it is next necessary to turn to the issues which arose on the pleadings. I do so against the admitted factual background that, at all relevant times, the appellant herself had been involved in a contentious claim against the Corporation in respect of an alleged work related back injury. It is also clear that, by late October 1993, she had become less than enchanted with Mr Peter Humble, a specialist medical practitioner to whom she had been referred by the Corporation for medical assessment on its behalf. Her claim was, apparently, ultimately rejected by that entity.

It was not disputed that the appellant wrote three successive letters to officers of the Corporation. It is from these that the present proceedings arose.

Accordingly, I proceed to recite each in turn, together with the pleaded meanings sought by the respondent to be attributed to them. I will not dwell on the pleas of the second plaintiff concerning the correspondence, because these were, in my view, quite logically rejected by the learned magistrate, having regard to various findings of fact, adverse to her, which he made.

The first letter was dated 12 September 1994, although its existence was not known to the respondent or the second plaintiff until long after that time. It was addressed to the Chief Investigator, Fraud Prevention Department of the Corporation and read as follows:- "Dear Sir,

I am in receipt of numerous letters from Andrew Thompson in your Investigation Department regarding a claim for compensation for a Sandra Mallard. I do not wish to discuss any matters regarding this woman with Andrew Thompson for more than one reason.

Firstly, I was told by Mallard that if I did not give evidence for her and I quote "don't expect any co-operation from Workcover or the Police if you have any problems". Because of her husband's position in Workcover Corporation, knowing I have a claim pending. I was also told she will get 100% co-operation because of her husband's position. I feel as if I am being black mailed indirectly.

Another concern of mine is, Mallard told me all about Andrew Thompson's investigations regarding the other party, how they had them on video and how Workcover had been after these people for years and that they were going to charge Greg with fraud and try to get him and his sister arrested, also all the businesses they owned.

What guarantee have I got that my interview will not be discussed with Mallard or her husband, and they can change their stories accordingly. If any action should be taken against Mallard, will it be taken?

I am thinking of contacting Mick Atkinson MP for Spencer if he could perhaps be present at the interview, seeing that your Corporation refuse point blank to pay for my solicitors time.

I am sure you can understand why I want an independent witness. Mallard saw a loop hole and took advantage of it. Her and her husband told me that they have had enough of Australia and want to go back to England. She also said he was worried about his job because of all of the tings going on with Workcover being privatised.

I am not refusing to co-operate, I am just being careful as this matter is very messy. You can write to me at my private box number as my mail goes astray sometimes...

Thanking you in anticipation for your co-operation.

As to this, no claims were advanced at the instance of the respondent. It formed the basis of various assertions and claims by the second plaintiff, which were rejected.

The second letter was addressed to the Chief Executive Officer of the Corporation, who, for general administrative purposes, was, as I have indicated, the immediate superior of the respondent. It was dated 1 November 1994 and said: "Dear Sir

I wish to inform you that I was told by Rod Mallard of the Corp of Workcover, that Peter Humble got paid a commission from Workcover according to moneys saved by reports given on Workers' injuries.

I feel it is very unfair to take his report into consideration regarding my claim for Workcover, if this is the case. I have informed my Case Manager, Barry Mohamet, who handed it over to his supervisor and denies that Peter Humble got paid a commission and that Workcover sends the majority of Workers to Peter Humble.

How will I ever know the truth? Since I said this to Barry Mohamet, my request for reimbursement for clothes and masseus (sic) has been rejected, yet Mallard's wife told me if Workcover did not pay for an overseas holiday for her as she was stressed out or did not pay for a TV security system, she would not give evidence for Workcover in another matter regarding Mallard's compensation claim. If Workcover did not meet her request, she told me she was not going to give evidence and her husband had a very influential position at Workcover.

Why can't I be reimbursed for money I spent on clothes to ease my back pain.

It would be nice to know that she got reimbursements, specially when she worked cash in hand and used the car her husband leases from Workcover."

It is of vital importance to note that this letter was specifically marked for the attention of "Mr Lew Owens" (the Chief Executive Officer) and endorsed 'PRIVATE AND CONFIDENTIAL' at the top.

[It should be mentioned that shortly after its receipt, the Chief Executive Officer forwarded a copy of the missive to the respondent and requested his written response to it. At that stage the respondent and the second plaintiff sought legal advice from solicitors, who wrote to the appellant concerning it.]

The obvious and compelling inference therefore arising on the evidence is that the letter would have gone direct to and been opened by Mr Owens personally.

The respondent pleaded, in relation to this second letter, that - "9. In their natural and ordinary meaning the said words meant and were understood to mean:-(a) (i) that the first plaintiff told the defendant that an orthopaedic surgeon, Mr Peter Humble was paid a commission by WorkCover Corporation as a result of monies saved from claims for compensation by person examined by Mr Humble;

(ii) that the first plaintiff lied about the relationship between WorkCover Corporation and Mr Perter Humble;

(iii) that the first plaintiff had disclosed confidential information about the relationship between Mr Peter Humble and WorkCover Corporation;

(iv) that the first plaintiff had used his position with WorkCover Corporation to ensure that the second plaintiff's claim for compensation was accepted by WorkCover Corporation;

(v) that the first plaintiff had wrongly permitted the second plaintiff to use a motor vehicle owned by the WorkCover Corporation;

(vi) that the first plaintiff had abused his position with WorkCover Corporation;

(vii) that the first plaintiff was not a fit and proper person to be employed in a position of trust and responsibility by WorkCover Corporation;

Finally, a further letter was addressed by the appellant to the Chief Executive Officer on or about 12 September 1995. It also was marked "PRIVATE & CONFIDENTIAL" - from which I infer that it also went, and was intended to go, direct to him.

It was couched in these terms - "Dear Mr Owens,

I am writing this letter to you in sheer disgust. I wrote to you regarding a matter with Rod Mallard, his wife and Andrew Thompson to be investigated. The letter about Mallard and his wife had private and confidential written right on the top. I received a threatening letter from Mallard's solicitor asking for an apology. When I asked for a copy of the letter they were referring to, I was sent a copy of the letter I sent to you with Private and Confidential removed from the top.

I wrote to ask for the matter to be thoroughly investigated and not for me to be threatened with legal action and to ask for costs. I refuse to apologise for telling the truth. Is that not in breach of Section 112 of the Workcover Act (confidentiality).

I was offered help by Mallard's wife regarding a complaint I had about Peter Humble. She told me to ask her husband as he worked for the Corporation. Mallard gave me advice and told me Peter Humble got paid a commission and not to tell anyone that he told me. I was not told Mallard's position within the Corp. Mallard's wife then helped me compose the letter about Peter Humble (sic) and I can prove this to be correct. I was only offered help and given information about Peter Humble after I won $10,000.00 which the Mallards were aware of.

If Mallard thinks he can get away with his disgusting behaviour by saying I asked him to do favours for me regarding my claim with Workcover, then this matter stinks. I had no reason to ask him favours and this is the gospel truth. If this matter is investigated by an independent organisation, the truth will come out, I left messages for Andrew Thompson from the Fraud Squad to call me, but to no avail.

I had no idea of Mallard's position, if I did know I would not have felt so sorry for his wife, nor would I have been so generous towards her when she was pleading poverty, I did not even know that she was using Workcover's vehicle to work cash in hand. I only found out from her about where he husband worked after I had won $10,000. I have not been questioned regarding the information Mallard gave me.

If he gets away with it by saying I asked for help with my Workcover claim, then it is a blatant lie. Your urgent attention and also thorough investigation regarding this matter would be greatly appreciated. I am sick and tired of Andrew Thompson of the Fraud Dpt. not interested in the information regarding the Mallards. Thank you for taking the time to read my letter and for your co-operation.

I was interviewed by Workcover, but it was for information re the other party. I offered the info re Mallard.

(i) I did not say Workcover paid for an overseas holiday, I said Mallard's wife said that she was going to ask them to pay for her holiday.; (ii) God in heaven only knows why Mallard told me about Peter Humble, as I said, it was only after I won $10,000; (iii) Mallard's wife told me Mallard had influence; (iv) It can be proved that Mallard's wife used the car to work cash in hand; (v) I will be asking for a judicial enquiry."

The respondent contended, apropros it, that -
"In their natural and ordinary meaning the said words meant and were understood to mean:-

(a)(i) the first plaintiff had told the defendant that an orthopaedic surgeon Mr Peter Humble was paid a commission by Workcover Corporation as a result of monies saved from the claims for compensation by a persons examined by Mr Humble;

(ii) that the first plaintiff was guilty of illegal and/or dishonest behaviour;

(iii) that the first plaintiff had lied to the Workcover Corporation about the nature and content of his discussions with an advice to the defendant.

(iv) that the first plaintiff's conduct with respect to the defendant and in relation to the second plaintiff's claim for compensation was fraudulent and warranted a judicial enquiry into it.

(v) that the first plaintiff had improperly permitted the second plaintiff to use a motor vehicle, the property of the Workcover Corporation." 29. Against the background of his findings of fact the learned magistrate arrived at these conclusions - - that an ordinary reader of the first letter to Mr Owens would regard it as scandalous that an employee such as the respondent would make wildly improbable suggestions that his employer ( a public authority) was paying commissions to an orthopaedic surgeon to obtain reports favourable to it in relation to injured workers and, accordingly, would form an adverse view of the respondent;

that such a reader would reject the alleged assertions as patently untrue and perceive the respondent to be a liar;

that the ordinary reader would construe the letter as indicating the respondent had abused his position with the Workcover Corporation and was not a fit and proper person to be employed by it in a position of trust and responsibility.

In this regard the learned magistrate commented - "The first plaintiff was a senior executive of WorkCover and the head of the very department designed to prevent or discover irregularities or fraud. For such a person to do nothing and in fact to advise and pass on to a would be claimant information of this nature, scandalous in character, would convey to the mind of the average reader the perception that the first plaintiff was not a fit and proper person to be employed where he was and that his continued occupation of that position was an abuse."

In so reasoning the learned magistrate appears to have accepted the general conceptual thrust espoused by Mr Goodall, of counsel for the appellant on the present appeal, as to the legal test to be applied.

Like Mr Goodall, he seems to have viewed the relevant letters from the perspective of the ordinary (or as he put it 'average') reader, being the mythical person in the street happening to read the letters - in much the same manner as they would have read the daily newspaper.

So it was that Mr Goodall was constrained to declaim that the finding of the learned magistrate was fallacious and could not be supported, because the meanings sought to be attributed to the words used do not arise on the ordinary and everyday meaning of those words and the ordinary reader would not have sufficient information to enable that person to draw the definitive conclusions espoused by the learned magistrate - particularly, for example, as to whether the respondent had or had not apparently been telling lies.

As to this he said:- "There are indeed a range of possibilities which an ordinary reader might interpret other than the meaning which has been pleaded. We respectfully contend that the only way that one could sensibly draw any conclusion to that information on those words would be if one had some special or extrinsic knowledge of WorkCover's actual practices and affairs.

If I can give the example of the sort of information which is fed to the public through the press and electronic media on a fairly regular basis about alleged scandalous behaviour, about alleged corruption in the police force and the like, these sorts of allegations come as no great surprise to members of the public. It would be a leap of reasoning by someone perhaps avid for scandal to conclude that it was the first respondent that was plainly lying.

The words, if they reflect on anyone, reflect more on WorkCover themselves and, indeed, perhaps Dr Humble, but they haven't brought a complaint in these proceedings and are not the subject of these proceedings."

So it was that he drew attention to authorities such as Farquhar v Bottom (1980) 2 NSWLR 380 and Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293, both of which bore on general publications such as publicly distributed books and newspapers.

Those authorities, inter alia, stand for the propositions that - - the primary question to be asked is whether the matter complained of was capable of carrying the imputations pleaded (or imputations substantially of that nature) to the ordinary reasonable reader.

it must be assumed that the ordinary reasonable reader is a person of fair average intelligence, who does not live in an ivory tower; and who can and does read between the lines in the light of that person's general knowledge and experience of worldly affairs.

the ordinary reasonable reader is a layman and not a lawyer, and his or her capacity for implication is much greater than that of a lawyer

a distinction needs to be drawn between the reader's understanding of what the relevant publication is saying and any judgments or conclusions that such a person may reach as a result of personal belief and prejudices. As was said by Mason J (as he then was) in Mirror Newspapers Ltd v Harrison at 301 - "It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition. Its importance for present purposes is that it focuses attention on what is conveyed by the published material in the mind of the ordinary reasonable reader."

It is not permissible, in effect, to draw an inference upon an inference.

Applying those precepts to the instant case Mr Goodall contended that, in order for a reasonable and ordinary reader to understand the words used in the manner argued for by the respondent and accepted by the learned magistrate, it would - as he put it - "really require some special or intimate knowledge about the internal machinations of WorkCover, such that commissions of that sort are never paid, and that there, is, in fact, no possibility of internal corruption, albeit ever isolated incidents of that"; and that there has been no pleading or suggestion at trial of any reliance upon special or extrinsic facts.

As to this he derived comfort from what fell from Lord Devlin in Rubber Improvement Ltd and Anor v Daily Telegraph Ltd [1964] AC 234 at 278. [This case is often cited under the title "Lewis v Daily Telegraph Ltd".]

The point there made by his Lordship was that, in some cases, a statement can only exhibit a derogatory implication if a reader already has some specific information. He instanced, by way of example, a statement that a person was seen to enter a named house, which was, in fact, a brothel. The statement would only have derogatory connotations if it could be shown that the ordinary person taken to be the reader must be taken to be aware of the nature of the premises by virtue of their general notoriety.

In this regard the discussion by Jordan CJ in Consolidated Trust Co Ltd v Browne [1948] NSWStRp 71; (1948) 49 SR (NSW) 86 at 89 is also directly pertinent.

The essential problem which I have with that line of argument (and also, to some extent, the reasoning expressed by the learned magistrate) is that it begs the question as to who is to be taken to be the ordinary reader of the published material.

It is to be noted that most of the authorities relied upon by Mr Goodall were directing attention to materials which had been published to the community at large, or to large sections of the community. The ordinary reader was therefore to be considered as a member of that large group and to possess the relevant characteristics - particularly in terms of inherent knowledge possessed.

But the letters here in question were not published to the community at large - nor was it ever intended that they should be.

By way of contrast with the authorities already cited, conceptual assistance, for present purposes, may be derived from a number of other published judgments.

In Drummond - Jackson v British Medical Association and Ors [1970] 1 All ER 1094 the court was called upon to consider articles published in the British Medical Journal discussing a technique employed by a dental surgeon. Sir Gordon Willmer made reference to a comment of Lord Atkin in Sim v Stretch [1936] 2 All ER 1237 at 1240 to the effect that - " ...... 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."

Sir Gordon then went on to say - "In the present case the plaintiff is an experienced dental surgeon, and the article complained of relates to dentistry; and this circumstance, I think, is sufficient to indicate the class of persons whose reaction to the publication is to be considered."

In the same case Lord Denning MR said - "I propose, therefore, ... to ask, and try to answer, the important question: are these words reasonably capable of being understood as being defamatory of the plaintiff? Understood, that is, by the sort of people likely to read them. These are, I take it, the medical men who read the British Medical Journal".

Such an approach is directly reflected in the reasoning of Foster J in FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd (1992) 108 ALR 479 at 496, where he had this to say - "In Switzerland Australia Health Fund Pty Ltd v Shaw (1988) 81 ALR 111; ATPR 40-866, Woodward J was required to consider whether a statement made in a letter relating to the operations of the applicant sent by the respondent to a number of operators of private hospitals was relevantly defamatory or misleading. His Honour said (at ALR 119; ATPR 49,386): "I think that the test I should apply is whether the statement made by Mr Shaw could reasonably be taken in a defamatory sense by reasonable, informed, private hospital administrators: see Nevill v The Fine Art and General Insurance Co Ltd [1897] AC 68 at 72-3."

I think that I should take a similar approach in the present case. The publication was not made in a newspaper to readers at large. It was made to a significantly small group the members of which had sought the respondent's comments on the Willis Faber material. Although it would be reasonable to assume that there would be some variation in mental acuity and powers of perception and understanding amongst the members of the group, it would, nevertheless, be proper to accept that the readers of the appraisal would be architects, knowledgeable in their profession, of a level of intelligence and acumen consistent with their membership of it, and, by virtue of their request for the material, interested in reading it with care and attention, even if not studying and analysing it with precision. I, therefore, ask myself whether such readers would reasonably derive from the respondent's appraisal the representations and imputations relied upon."

All of these dicta, are, with respect, counsels of plain commonsense. It is little short of ludicrous to apply the test of the reaction of the ordinary person in the street to the restricted publication of an article to a specific group of readers for whom it is discretely intended and who are assumed to approach the material with a given level of knowledge and understanding (eg a medical journal article, normally distributed to doctors who are members of the publishing organisation). As a matter of plain logic the reaction of the ordinary member of the public not portion of the target group is essentially an irrelevancy. What would, in the normal course, be the natural and ordinary meaning of expressions to the target group would normally be a special meaning to others, requiring proof of extrinsic facts to enable that meaning to be ascribed in relation to the external reader.

In his supplementary submission Mr Goodall sought to rely upon the judgment of Holroyd Pearce LJ in Grubb v Bristol United Press Ltd (1963) 1 QB 309 at 324 as authority for the proposition that, whilst regard can be had, in general terms, to the particular class or general characteristics of persons to whom the publication is (or is likely to be) made, this does not permit imputing to the ordinary reader special knowledge only known to the person to whom the information was sent. The short riposte to that suggestion is that Grubb v Bristol United Press Ltd focused on publication of an article in a regional newspaper and I fail to perceive in it any warrant for the general proposition espoused. That case stands as no more than a practical example of the legal concepts which I have earlier discussed. Where there is a general publication in which the defamatory meaning is essentially secondary in nature, requiring proof of extrinsic facts to demonstrate knowledge is the ordinary reader of the injurious meaning, then appropriate evidence and pleading in that regard is normally required.

In the present case the critical issue is what primary meaning would be attached to what was said in the subject letters by the relevant ordinary reader of the target class, bearing in mind the state of knowledge normally to be attributed to that class. To apply the language of Lord Denning MR, the question to be asked is - are the words read reasonably capable of being understood as being defamatory of the respondent (in the sense pleaded) by the sort of people likely to read them?

I reiterate what I said earlier in these reasons. In this case publication was specifically directed to and the letters were only intended to be read by the Chief Executive Officer of the Corporation, who was the respondent's administrative immediate superior. In truth, the relevant class was a class consisting of only one person. Moreover, he was a person responsible for the operational control of the Corporation, whose duty it was to have an intimate knowledge of the modus operandi of its undertaking and the policies implemented by it. He, above all others of the staff of the Corporation, required to have confidence and trust in the respondent, as head of internal audit, and necessarily relied upon his undivided loyalty to the Corporation as a basis for accepting that the internal audit function was in safe hands. All of these things are the product of every day commercial knowledge and plain commonsense. They required no extrinsic evidence to establish them. Moreover, the Chief Executive Officer must be taken to be aware of at least the key features of the manner by which the operations of his organisation were conducted on a day to day basis.

It follows that the Chief Executive Officer, with the knowledge and level of understanding reasonably to be attributed to him, must be taken to be the ordinary reader of the two letters which are the subject of this appeal.

On that test the findings of the learned magistrate as to the defamatory nature of the two letters, vis a vis the respondent, are clearly correct. The obvious intention of the appellant, in writing as she did, was, patently, to cause the Chief Executive Officer to conclude that - - the respondent was a liar or an irresponsible and malicious purveyor of falsehoods concerning the Corporation in a manner designed to seriously tarnish its image; and had thus abused his office within it; and that

he was certainly not a fit and proper person to be employed by the Corporation in a position of trust and responsibility.

It is difficult to envisage a more blatant attempt to undermine the respondent in his employment with the Corporation and to destroy confidence in him and do him serious harm in that employment.

I therefore agree with the assessment that the letter was plainly defamatory of the respondent in the above respects and in a serious manner, albeit that I arrive at that conclusion by a slightly different process of reasoning than that expressed by the learned magistrate.

The learned magistrate pointed out that, not only was he satisfied that the respondent did not make the statements attributed to him in the letter, but that, on the contrary, "the defendant asked ... [him] ... to 'pull strings' for her and he declined." This serves to underscore the mischievous nature of the publication.

It was common ground that the letter was written in a situation which, prima facie, attracted the defence of qualified privilege. There was, accordingly, no need to discuss that legal issue. However, the respondent contended (and the learned magistrate accepted) that the evidence revealed that, in making the relevant defamatory statements, the appellant had been actuated by express malice.

As to this he commented - "The defendant asserts that she honestly believed the words she spoke to be true. If those words or words to that effect were not used, upon what could such a belief be based? In my view the assertion made was not based upon an honestly held belief of the defendant. She has shown herself in parts of her evidence to be fanciful and this is a statement made by the defendant concerning the first plaintiff without any foundation in fact at all. The defendant could not have had any honest belief in the truth of what she wrote and did not.

In addition to that, I am satisfied that when she wrote this letter the defendant was not activated by a sense of obligation to inform the person to whom she wrote the letter of some perceived irregularity. If the defendant had any such genuine belief or concern it would have caused her to respond and write a letter of this sort not on 1 November 1994 but back some time in September or October 1993 at the time when she says the words were allegedly used. Her statement made on 1 November 1994 was in the context of a letter following up the issue as to her making of a statement to Workcover investigators. This statement allegedly made by the first plaintiff had but the faintest connection with that subject matter. This was a statement made by the defendant without any honest belief in its truth. It was a statement which in fact was false. It was a statement not made as suggested by the defendant for the purpose of informing Workcover of an irregular and scandalous position with respect to the obtaining of medical reports but for extraneous reasons to do with the fallout between herself and the second plaintiff."

In my opinion this reasoning is unexceptional. Indeed, as a matter of commonsense and logic, it is the inevitable product of the primary findings of narrative fact made by the learned magistrate and which were fairly open to him. The appellant does not now seek to pursue the appeal as to that aspect. The findings are, however, important as setting the scene as to the lengths to which the appellant was prepared to go to attempt to undermine the second respondent with his employer.

In addressing the content of the third letter, apropos the respondent, the learned magistrate dealt with the situation in this fashion - "I now turn to the third letter and the meanings relied upon paragraphs 11(a)(i), (ii) and (iii). In this letter the defendant repeated the statement 'Mallard gave me advice and told me Peter Humble got paid a commission and not to tell anyone he told me'. I repeat the reasons that I have given with respect to my findings concerning paragraph 9(a)(i). This was a second statement to the same effect. It has the same consequences in law. The statement was defamatory. The statement attributed to the plaintiff was false. The defendant had no honest belief in the truth of what she wrote. The statement was made with malice. She did not believe it to be true.

So far as 11(a)(ii) is concerned in my view the meaning imputed of 'illegal' does not arise but the meaning 'dishonest' does. That is imputed by the sentence commencing 'If Mallard thinks he can get away with this disgusting behaviour by saying ...'. The statement is defamatory and not based upon any fact known by the defendant. It is malicious and not protected by qualified privilege.

As far as paragraph 11(a)(iii) is concerned I repeat what was said and note in the context of paragraph 9(a)(ii). The statement is defamatory."

Once again, bearing in mind the learned magistrate's rejection of the truth of the factual assertions made by the appellant in relation to the respondent and the circumstances revealed by the evidence, his conclusion as to the defamatory nature of the statements made and the existence of express malice were well nigh inevitable on the application of the principles which I have discussed. Importantly, this letter followed inquiries pursued by the Chief Executive Officer as a consequence of the first. As a consequence he then, manifestly, possessed quite detailed knowledge of the relevant circumstances, and must be taken to have read the third letter in light of it, as the ordinary and only reader of the class. He must full well, and instantly, have appreciated the implications and scurrilous nature of the allegations made.

As to the broad question of express malice in relation to a defence of qualified privilege, I need do no more than refer to what I said on these topics in Pearce v Hailstone (1992) 58 SASR 240 at 264-266. As the learned magistrate stressed, not only were the relevant statements known by the appellant to be untrue, but she patently made them for an extraneous purpose, directly and indirectly to cause trouble for the second plaintiff with whom she had fallen out. Understandably, this aspect of the appeal is also not now pursued by the appellant.

A first instance the appellant sought to derive comfort from section 5(1) of the Whistle Blowers Protection Act 1993. That provision and subsection (2) of the same section enact as follows:- "Immunity for appropriate disclosures of public interest information

(1) A person who makes an appropriate disclosure of public interest information incurs civil or criminal liability by doing so.

(2) A person makes an appropriate disclosure of public interest information for the purposes of this Act if, and only if -

(a) the person - (i) believes on reasonable grounds that the information is true; or

(ii) is not in a position to form a belief on reasonable grounds about the truth of the information but believes on reasonable grounds that the information may be true and is of sufficient significance to justify its disclosure so that its truth may be investigated; and (b) the disclosure is made to a person to whom it is, in the circumstances of the case, reasonable and appropriate to make the disclosure."

"Public interest information" is elsewhere defined as being information that tends to show - "(a) that an adult person (whether or not a public officer), body corporate or government agency is or has been involved (either before or after the commencement of this Act) -

(i) in an illegal activity; or (ii) in an irregular and unauthorised use of public money; or (iii) in substantial mismanagement of public resources; or (iv) in conduct that causes a substantial risk to public health or safety, or to the environment; or

(b) that a public officer is guilty of maladministration in or in relation to the performance (either before or after the commencement of this Act) of official functions;"

As the learned magistrate found, even if it be accepted that the content of the two letters in question constituted a disclosure of public interest information, his findings necessarily exclude a conclusion that it was an "appropriate disclosure" within the contemplation of the section. The plain fact is that the statements made were not only false, but they were not made in circumstances in which the appellant believed, on reasonable grounds, that the relevant information was true. Cadit quaestio! I take Mr Goodall now to accept that conclusion.

In summary then, I fail to perceive any basis for impugning the basic findings and conclusions expressed by the learned magistrate.

There only remains the appeal against quantum of damages assessed. In essence, it was said that an award of $10,000 was out of step with other assessments for defamation. Counsel further contended that - 1. the learned magistrate erroneously treated the fact of limited publication as being relevant only to whether or not exemplary damages could or should be awarded; and

(2) no serious damage to the respondent's reputation flowed from the publication - the respondent's explanation in response to the second letter was, it was said, completely accepted by his superior and, accordingly, the allegations re-iterated in the third letter (which, Mr Goodall contended, raised no new matters of substance) were not likely to have been believed.

There are a number of obvious ripostes to those suggestions.

First, on a careful reading of his reasons for decision, I do not consider that the first point is an accurate reflection of the thinking of the learned magistrate at all. It is quite obvious that he looked at the extent of publication from a global point of view. In so doing he simply made the point that this was not a situation which attracted exemplary damages.

Further, much of the second point made is little more than surmise on the part of counsel.

Relevantly, what the learned magistrate had to say was this - "It is pointed out that there was very limited publication. Whilst it is true that the two letters relevant to the first plaintiff were written and directed to one person and marked private and confidential, it is important also to remember that the person written to was the Chief Executive Officer of the Corporation which employed the first plaintiff. There would be nobody, apart perhaps from the board members or Chairman of the Workcover board, who would have greater interest or concern in hearing that which the first plaintiff was alleged to have said. Damages in defamation relate very much to the effect which publication has upon the feelings of the injured person. The first plaintiff was likely to have felt very upset and vulnerable about publication of defamatory material to his supervisors especially material which was closely related to his employment situation. I agree with Mr McRae that the assertion made against the first plaintiff was scandalous in character. The statement attributed to the first plaintiff was not made by him or suggested by him in any way. The motivation of the defendant was probably not directed primarily at the first plaintiff and the letters were written and the statements made were as a result of a fallout between the defendant and the second plaintiff. But the effect upon the first plaintiff was nonetheless significant. It has been pointed out that Mr Owens was not called. I accept that that is so. I also accept that the correspondence indicates that there were no adverse consequences which flowed in fact from the writing of the letters. When the letter of 1 November was received the first plaintiff was asked to provide a written explanation and the first plaintiff's evidence indicates that he was required to do nothing further and indicates that he retained his position in Workcover Corporation without any actual ill effects.

Despite all of that, the assertion made was an assertion which pierced the heart of the first plaintiff's integrity. It was an outrageous thing for the defendant to have attributed this statement to the plaintiff. The damages to be awarded are compensatory in character. They are not awarded to punish the defendant save where an award of exemplary damages is justified. This is not such a case. In particular the limited publication suggests to me that an award of exemplary damages is not called for. But it was a defamatory statement which on his evidence made a deep impression upon the plaintiff and which concerned and upset him. This is a serious defamation. In my view it calls for a significant and substantial award. I would award the first plaintiff $10,000 by way of damages."

I consider that such reasoning was well justified by the evidence and beyond reproach. Bearing in mind the senior and sensitive position held by the respondent and the requirement for absolute integrity in the discharge of his responsibilities as an employee of the Corporation, I repeat, it was calculated seriously to undermine his position and potentially render it untenable. The anguish and embarrassment experienced by him must have been considerable. What was done was outrageous, and the personal impact at the time ought not to be unduly glossed over. Moreover, the appellant made a second attempt to impugn the respondent and assert his dishonesty. As Mr McCrae pointed out, the appellant has never resiled from her allegations. On the contrary she attempted to justify them in court. There has never been any private or public apology expressed by her.

No doubt the award made was towards the top end of a spectrum of reasonable assessments but, at the end of the day, I remain unconvinced that it was manifestly excessive in light of the scandalous and untrue attacks on the part of the appellant, the senior and sensitive position occupied by the second respondent and the obvious distress that they must have occasioned to him.

Whistle Blowers Protection Act 1935

Workers Rehabilitation and Compensation Act 1986

Whistle Blowers Protection Act 1993

Whistle Blowers Protection Act 1935

Workers Rehabilitation and Compensation Act 1986

Whistle Blowers Protection Act 1993

MORGAN v MALLARD AND ANOR No. SCGRG 96/1962 Judgment No. 6056 Number of pages - 16 Defamation

At a glance

Court

Decision date

Before

Source

Judgment (131 paragraphs)

MORGAN v MALLARD AND ANOR No. SCGRG 96/1962 Judgment No. 6056 Number of pages - 16 Defamation (1997) 68 SASR 184 [1997] SASC 6056 (13 March 1997)

Parties

Legislation Cited (6)

Cases Cited (7)