Consideration
247 It is clear from the authorities, consistent with ABC v Comalco, that a trading corporation may receive damages as a result of its business being defamed without any proof of economic loss. It has been held that defamatory words calculated to injure a corporation's business or trading character are actionable without proof of special damage or probable income loss: Feo v Pioneer Concrete (Vic) Pty Ltd [1999] VSCA 180; (1999) 3 VR 417 at [51]-[57]; Selecta Homes and Building Co Pty Ltd v Advertiser-News Weekend Publishing Company Pty Ltd [2001] SASC 140; (2001) 79 SASR 451 at [49]-[51]; [158]-[161]; Parkes R, Mullis A, Busuttil G, Scott, A, Specker A, Gatley on Libel and Slander (12th ed, Sweet & Maxwell, 2013) at [9.17]. A corporation can attract substantial damages even where the corporation does not lead evidence to establish any actual damage in terms of financial loss: Madden v Seafolly Pty Ltd [2014] FCAFC 30; (2014) 313 ALR 1 at [112], citing ABC v Comalco. The respondents submitted that the damage to the corporation's reputation is not damage at large, but rather the assessment is confined to the financial and commercial considerations by which a corporation's reputation is ordinarily assessed: Kay v Chesser [1999] VSCA 83; (1999) 3 VR 55 at [12], [16].
248 However, as the respondents submitted, those authorities do not address the position of whether a non-trading corporation can recover damages in the absence of proof of economic loss.
249 The live issue between the parties is whether a charity can recover damages in such a way. The respondents contended that the position of a non-trading corporation is not analogous as a perception of a business's reputation is likely to impact on its ability to make a profit, which is its purpose. The respondents submitted that the applicants' reliance on "goodwill", a concept taken from Lewis v Daily Telegraph, is misplaced, as goodwill is a balance sheet asset of a trading corporation and the concept of "goodwill" is not relevant to a non-trading corporation.
250 The respondents' submission is based on the observations of Pincus J in ABC v Comalco as endorsed by Handley AJ (with whom Powell AJ agreed) in New South Wales Aboriginal Land Council v Jones (1998) 43 NSWLR 300 (NSW Aboriginal Land Council) at 306-307, as follows:
In Australian Broadcasting Corporation v Comalco Ltd (1986) 12 FCR 510, the Federal Court rejected the view that a trading corporation can recover damages by way of a solatium for injury to its reputation "as such" independently of injury to its reputation in the way of its business. The reasons of Pincus J in particular (at 599-602), provide powerful support for this conclusion: see also at 560, 586-587. Pincus J said (at 602):
"… it is not always easy to keep the concept of a company's separate legal personality in mind, when considering damages for defamation. Where … those associated with the company have been implicitly attacked, it would seem unjust to let the defamer escape if no financial loss to the company … can be shown. But if the defamation reflects on, for example, the board, they must themselves sue. Should it hurt no natural person and cause the company no monetary loss, for what loss could damages be awarded? To illustrate the point … suppose an incorporated charity not engaged in any commercial venture is defamed; that may cause some financial loss, in reducing its income from contributions. But suppose further that it receives no contributions, being permanently endowed at the outset; then there is no loss suffered by it, considered as an artificial entity, for which it could get damages."
251 The respondents submitted that passage suggests the recovery of damages for defamation must be more than a theoretical exercise, with something more than a mere theoretical possibility of loss. At the very least, there must be some evidence which shows, on the balance of probabilities, that the Charity probably lost some money; that there was some kind of harm measurable in money related to the Charity's operations.
252 The respondents noted that Handley JA at 307-308 also referred to a passage from Derbyshire County Council v Times Newspapers Ltd [1992] UKHL 6; [1993] AC 534 (Derbyshire County Council v Times Newspapers) which addressed the theoretical basis on which charitable organisations can sue, being potential discouragement of subscribers or donors, or the ability to carry on its charitable objects: Derbyshire County Council v Times Newspapers at 547. However, it was submitted that a review of that excerpt from Derbyshire County Council v Times Newspapers reveals that the House of Lords was simply discussing the types of factors that might enable various species of non-trading corporations to sue for defamation, with there being no suggestion that damages could be recovered without proof of those underlying matters.
253 The respondents drew attention to two first instance judgments which applied NSW Aboriginal Land Council, both of which, it contended, supported its interpretation of the judgment.
254 The first is Robertson v John Fairfax Publications Pty Ltd & The Development and Environmental Professionals' Association v John Fairfax Publications Pty Ltd [2003] NSWSC 473; (2003) 58 NSWLR 246 (Robertson v John Fairfax Publications), in which Simpson J at [32] observed, having cited, inter alia, NSW Aboriginal Land Council, that the statement of claim in that case, which involved a non-trading corporation, makes no reference to any financial loss or injury and could have been struck out on that basis alone.
255 The second decision is Orion Pet Products v Royal Society for the Prevention of Cruelty to Animals (Victoria) Inc [2002] FCA 860; (2002) 120 FCR 191 (Orion Pet Products v RSPCA), in respect to a cross claim by the RSPCA (a charitable organisation). Weinberg J concluded that there was no evidence that the RSPCA sustained any pecuniary loss by reason of the defamatory conduct, and in that circumstance did not award any damages. The cross-respondents had submitted as follows:
[317] The cross-respondents submitted that it was clear that Dr Wirth was entitled to general damages once defamation had been conceded. However, the same could not be said of the RSPCA as first cross-claimant. The RSPCA could not be injured in its feelings, but only in its pocket. There was no evidence that any pecuniary loss had been suffered by either of the cross-claimants. There was no suggestion that donations to the RSPCA had declined, or that its trading income had been reduced. Nor had it incurred any costs in an effort to remedy the harm caused by the publications of which it complained. Moreover, there was no evidence that the reputation of either cross-claimant had been damaged …
[320] …The RSPCA, as first cross-claimant, had not established that it had suffered any pecuniary loss. It followed that it could not recover damages, either for libel or under the Act.
256 The respondents submitted that the applicants' reliance on Webster v Brewer (No 3) in which substantial damages were awarded for defamation to a charitable corporation is misplaced, as the relevant authorities are not considered therein.
257 The respondents submitted that, not only is there no evidence of any loss to Wiping Tears, but in contrast, the evidence establishes that the Blossom Ball held after the Report raised more money than previous balls. It submitted that the publication of the alleged defamation in February 2019 did not negatively affect the Charity's revenue raising program.
258 The applicants submitted the proposition that a charity cannot sue for defamation without proving special damages is inconsistent with s 9 of the Defamation Act (with no limitation being prescribed) and the common law. It submitted that a company can sue for defamation without proof of special damage and without proof of "probable income loss" is a well-settled principle, as damages for defamation are awarded not only for harm to reputation but also for vindication to prevent the defamatory statements from causing continuing or future harm. A company's claim in defamation, like an individual, is actionable per se. Once the defamation is established there will necessarily be some harm to the goodwill of the company, for which the company can claim without proof of specific loss: referring to Lewis v Daily Telegraph at 262.
259 It submitted that there is no principled reason for charities to be treated differently to trading corporations, and that a charity would be in a stronger position than a trading corporation on this issue, given that the purpose of a trading corporation is to make profit. The reputation of a charity is important, not only for raising money, but in order to ensure public trust in its functions. The applicant submitted that the respondents' reliance on Royal Society for the Prevention of Cruelty to Animals (NSW) v 2KY Broadcasters Pty Ltd (1988) A Def R 50-030 is incorrect, as that judgment is not about the role of compensatory damages for vindication of one's reputation (corporate or otherwise). In relation to Weinberg J's conclusion in Orion Pet Products v RSPCA at [317] that no damages were payable because loss was not proved, that conclusion is wrong, and in any event, the case is distinguishable as the RSPCA did not prove damage to its reputation.
260 It submitted that once it is accepted that a not-for-profit body may sue for defamation to prevent any impairment on its ability to carry on its charitable objects, the requirement for vindication points to the capacity of the Court to award substantial damages, without proving special damage. The applicants relied on Webster v Brewer (No 3) where substantial damages were awarded for defamation to a charitable corporation, noting that the applicants (including the charity) were entitled to substantial awards of damages to "nail the lie": see at [44]-[45], [57], [58], [60], [80]-[81].
261 The applicants submitted that ABC v Comalco, as referred to by the respondents, supports the conclusion that even if the evidence does not establish actual loss of income or earnings a corporation is still entitled to damages if the defamation was calculated to injure an applicant's reputation in trade or business. The applicants submitted that NSW Aboriginal Land Council appears to be the only appellate authority that supports, to some extent, the proposition that charities should be treated differently to trading companies and be excluded from suing for defamation without economic loss. The applicants did not understand, as a matter of principle, why that should be so. It was submitted what was said does not apply in this case, or have general application.
262 The applicant submitted that, as with Mrs Nassif, the Charity depends on its integrity and reputation. The charitable work depends upon their integrity and decency to inspire confidence without which persons in need are unlikely to seek support and donors are unlikely to support the Charity: citing Webster v Brewer (No 3) at [57]. In those circumstances, the applicants submitted that the injury to the Charity need not necessarily be confined to loss of income, as its goodwill (that is, its reputation) may be injured. The applicants took issue with the respondents' assertion that there was no evidence of injury, and submitted that a number of witnesses gave evidence of damage to Wiping Tears' reputation which was not challenged.
263 Before returning to the legal principles it is appropriate to first consider the evidence. Mrs Nassif's evidence was that the main source of funds for the Charity were derived from the Blossom Balls. They rely on sponsors or donors for the Ball, with there being two types; those providing goods and service, and those providing money. In examination-in-chief Mrs Nassif said:
A … And in relation to Wiping Tears, have you experienced, or heard, after the broadcast any adverse comments about Wiping Tears? Well, well, that year we had to do a ball, right? And that's when I had to contact people, like usual. Like, I had to contact guests of honour and I had to contact sponsors. I had to contact, like, all these people to put together a ball. And it was the most exhausting thing ever. Because most people were, like, "No, we don't want to be in this controversy", "No, we don't want this" and we had to force some sponsors. Like, we had to pretty much say, "If you want our business, you have to support the charity".
264 The sponsors/donors of Wiping Tears consists of a network of generous friends of the Nassifs. In cross-examination Mrs Nassif gave this evidence:
Q: Now, can I ask you just a little bit about the charity. You said earlier today that the - many of the donors had a relationship with TopLease?
A: Sponsors, yeah, correct.
Q: Yes, and just to be clear about this, when you say sponsors, what that means is that these are people that provide sponsorship for the ball?
A: Correct.
Q: Because the ball is the predominant, if not the sole way the charity raises its money?
A: Correct.
Q: Now, is it also fair to describe the donors as a network of generous friends of you and your husband?
A: If you want.
Q: No, no, I'm suggesting to you. You can agree or disagree. Is that a fair description?
A: Of course.
Q: And those donors have stood by you, haven't they?
A: Well, after the broadcast, like I said before, we had to push really hard to keep them.
Q: Yes you had to - did you say something like that if you wanted to keep a relationship with TopLease, you had to donate or - I may be paraphrasing, but I have a note something to that effect?
A: Pretty much, yeah. Which is like "If you want our business, you must support our charity".
Q: That was your evidence, wasn't it?
A: Pretty much, yeah.
265 Unlike many charities, it does not rely on sponsorship at large or donations from the general public. Rather, its sponsorship is quite confined.
266 The financial figures for the Blossom Ball held in 2019, after the broadcast of the Seven News Report reflect that the Charity raised greater funds on that occasion than they had done so in the previous years.
267 Apart from the evidence of Mrs Nassif, there was some brief evidence from the witnesses about the effect of the Broadcast on Wiping Tears as a charity. In essence, the effect of the evidence was that people had lost confidence in the organisation and made negative comments, such as questioning whether Wiping Tears was "doing the right thing" and where the money was going. The evidence was very general and high level. Notably, no witness gave evidence that they had withdrawn their support for Wiping Tears, or that the Charity had actually lost a sponsor, or suffered financially. Moreover, the evidence of Ms Helou, a director of the Charity and Ms Vassalo, a committee member, tends to suggest that they would have a favourable impression of how the community regards Wiping Tears.
268 It follows that the evidentiary context here is not just that there is an absence of evidence of the defamatory conduct having a harmful financial effect on the Charity. In this case, there was evidence that Wiping Tears raised more money at the Blossom Ball which was held after the broadcast of the Seven News Report (acknowledging that more effort may have been required to achieve that outcome). I accept that evidence.
269 That factually distinguishes this case from those referred to by the applicants, and brings an air of artificiality to the submissions made. For example, in so far as the applicants rely on Webster v Brewer (No 3) in support of the proposition that Wiping Tears, as a charity, is entitled to damages without any evidence of economic loss, the decision is of limited value.
270 The applicants submitted that Gleeson J in Webster v Brewer (No 3) had specific regard to "these issues", referring to ABC v Comalco and citing Lewis v Daily Telegraph. However, the extent of the reference is in [45]:
While individuals may seek compensatory damages for subjective personal distress and hurt, damages of this type are not available to litigants who are not individuals: "A company cannot be injured in its feelings, it can only be injured in its pocket": Lewis v Daily Telegraph Ltd [1964] AC 234 at 262; Australian Broadcasting Corporation v Comalco Ltd [1986] FCA 300; (1986) 12 FCR 510 at 586 and 599.
271 That passage reflects that the issue currently under consideration was not an issue before her Honour. Importantly, in the case before her Honour there was no appearance for the respondents and therefore there was no contradictor. In that context, there is no suggestion in the judgment that this issue was raised.
272 There was also some evidence in Webster v Brewer (No 3) referred to at [40], that the referrals to the organisation were lower than that prior to the defamatory statements. As to that evidence, the applicants submitted that it was "very weak" and that "her Honour is not necessarily satisfied that it's attributable to the publications". As to the latter proposition, there is nothing in the judgment to suggest that the evidence was not accepted. As to the proposition the evidence is weak, even if that was so, it is stronger evidence of harm than was led in this case. It is plainly factually different from evidence that fundraising increased.
273 As explained above, the applicant also relied on RSPCA v Davies at [47]. At that passage Latham J observed:
As it is a corporation, the plaintiff acknowledges that it cannot recover for hurt feelings: ABC v Comalco Ltd (1986) 12 FCR 510. Damages awarded are as reparation for damage to the plaintiff's business reputation and in vindication of its reputation.
274 Again, there was no appearance of the respondents or defence filed. It is apparent from the very brief passage that the issue now raised was not before her Honour. Latham J concluded at [61] that:
The plaintiff is a not-for-profit organisation whose resources are dedicated to the promotion of animal welfare and the prevention of animal cruelty. It relies on donations to operate. The plaintiff receives less than 2% in regular funding from the NSW Government, and no regular funding from the Federal Government. The organisation works with a broad section of the community, including all levels of government and a variety of interested groups including wildlife authorities, farmers and professional associations. It is heavily reliant upon its reputation to carry out its day-to-day functions.
275 The difference in the nature of the sponsorship basis and source of funds with Wiping Tears, is readily apparent.
276 The respondents' submission based on ABC v Comalco, and its application in NSW Aboriginal Land Council, has some force. That is the only appellate court authority on the topic. The passages relied on suggests that a non-trading corporation may be in a different position to a trading corporation. It has been applied (albeit at first instance) in the manner contended for by the respondents in Robertson v John Fairfax Publications and Orion Pet Products v RSPCA. However, it is important to focus on the evidence in this case, as previously explained, unlike many charities, Wiping Tears has a confined sponsorship, and does not rely on donations from the general public at large.
277 The applicants do not point to any authority which has considered that issue and resolved it in the manner contended for (particularly in light of the evidence). As explained above, Webster v Brewer (No 3) does not do so. The applicants' submission that Orion Pets Products v RSPCA is incorrectly decided is based on an acceptance of its underlying argument. The applicants' reliance on the fact that a charity is entitled to bring an action in defamation (as are businesses under 10 employees) does not assist. True it is there is no limitation in s 9 on the award of damages to a charity, but the section is silent as to damages generally. Indeed, the applicants seek to rely on what it says are the common law principles which relate to corporations in respect to damages.
278 That said, the issue argued, whether a charity can be awarded damages as a result of defamatory conduct in the absence of evidence as to harm, per se, does not practically arise for consideration. That is not the factual scenario on the evidence in this case. It is therefore not necessary to resolve the debate.
279 Moreover, the theoretical basis on which charitable organisations can sue, that they might have problems with discouragement of subscribers or donors, or which otherwise affects the ability to carry on charitable objects, has not practically eventuated.
280 Given the particular evidence in this case as to the nature of the source of funds for this Charity, and that the fundraising raised more funds in the year after the Seven News Report, in my view the damages should be nominal. In respect to the Charity, I assess damages at $500.