Plaintiff v Defendant

2 At the time at which the defendant wrote that letter, the plaintiff was acting on behalf of a receiver, who had been appointed by a second ranking secured creditor of a company, which was involved in a commercial development of apartments at a property in Ascot Vale. The plaintiff acted on behalf of the receiver in relation to the sale of those apartments. The defendant was the director of the third ranking secured creditor of the same company. In that capacity, the defendant had, two months previously, provided releases, referred to as "ASIC releases", in order to enable the sales of the apartments to be completed. In late July 2010, the defendant made a number of demands of the plaintiff that he return to him the remaining ASIC releases. On 6 August 2010, the plaintiff, as the solicitor for the vendor, completed the sale of an apartment (Apartment 113) in the development, using an ASIC release.

3 In response, the defendant wrote the letter dated 13 August 2010, which is the subject of this proceeding. He forwarded copies of the letter to the solicitor who was acting in commercial matters for the receiver appointed by the second ranking debenture holder, to the solicitor for the third ranking debenture holder, and to the solicitor acting for a receiver appointed by the third ranking debenture holder. The letter, which I shall set out fully later in these reasons, asserted that the plaintiff's actions, in not returning the ASIC releases to the defendant as requested, and in using an ASIC release to complete the settlement of Apartment 113, were conscious breaches of the plaintiff's duties as a lawyer and as an officer of the court. The defendant also stated, in the letter, that he proposed to write to ASIC to inform it that the plaintiff was "illegally" retaining the ASIC releases.

4 Those allegations were clearly defamatory of the plaintiff. The defendant, at trial, did not contend to the contrary. As such, the allegations made by the defendant about the plaintiff are presumed, at law, to be untrue. The defendant did not plead, in his defence, that the allegations were true. Nor did he, in any way, seek at trial to suggest that they were true. Rather, the defendant relied, primarily, on a defence that the words were published by him on an occasion of qualified privilege. He also pleaded defences under ss 18 and 33 of the Defamation Act 2005 (Vic), namely, that he had made an offer of amends which had not been accepted by the plaintiff, and that the circumstances of the publication were such that the plaintiff was unlikely to suffer any harm in consequence of it.

5 In order to understand the issues, with which this case is concerned, it is necessary to set out, in some detail, the background to the letter.

6 The plaintiff was admitted to practice as a barrister and solicitor of the Supreme Court of Victoria in 1977. Throughout his career, he has worked in the firm, the current name of which is "Trumble Szanto". The plaintiff became a partner of that firm in 1979, and his name has been associated with it since that date. In 2010, the plaintiff had one partner, Mr Richard Leggo ("Leggo").

7 The defendant was admitted to practice in 1981. He was employed as a solicitor by Aitken Walker & Strachan between 1986 and 1989, and for the next decade he was a partner of that firm. In 2009, the defendant commenced a practice, as a sole practitioner, under the name "Aldgate Lawyers South Yarra".

8 For some years before 2010, Leggo, the defendant, and other persons, had been associated in the development by Ascot Vale Self-Storage Centre Pty Ltd ("Ascot Vale") of a property owned by it at 8 Burrowes Street, Ascot Vale. The development consisted of the construction of some 50 residential apartments. Those apartments were sold to purchasers "off the plan" before the completion of construction. The contracts of sale were expressed to be conditional upon the plan of subdivision being registered, and an occupancy permit being issued in respect of the apartment, which was the subject of the contract. Leggo was the sole director of Ascot Vale, which was the trustee of a unit trust. There were five unit holders of the unit trust, three of whom were Leggo, Croc Pot Pty Ltd (a company controlled by the defendant), and Saiwai Pty Ltd. Each of the unit holders themselves purchased three or four apartments off the plan.

9 By 2009, there were three secured lenders to the project. Suncorp Metway Pty Ltd held a first registered mortgage over the property. Nom De Plume Nominees Pty Ltd ("Nom De Plume") had advanced funds to the project, the security for which was a second registered mortgage over the property and a debenture charge over the assets of Ascot Vale. Fingal Developments Pty Ltd ("Fingal") held a third ranking debenture charge over the assets of Ascot Vale, including the property, as security for funds advanced by it to the project.

10 The plaintiff and Leggo were directors, and the sole shareholders, of Nom De Plume. That company was a nominee company, created by Trumble Szanto Lawyers, to be used for clients, who did not wish to disclose their identity in relation to a particular transaction. Clients of Leggo had advanced funds to Ascot Vale, through Nom De Plume, for the Burrowes Street development. Apart from acting for the receiver of Ascot Vale after approximately 22 June 2010, the plaintiff had no other involvement in the development undertaken by Ascot Vale.

11 The defendant was the sole director of Fingal. Fingal was a company to which a number of parties, (including each of the unit holders) had advanced funds, which were then lent to Ascot Vale.

12 In early 2009, a dispute arose concerning the funding of the project. Accordingly, a deed, dated 23 March 2009, was executed by Ascot Vale, Nom De Plume, Fingal, Leggo, and the unit holders. The effect of that deed was to affirm the position of Nom De Plume as the second ranking secured creditor, ahead of Fingal. Clause 5.1 of the deed provided as follows:

"Until the first and second mortgagee have been paid in full on or before settlement of the sale of each apartment in the Burrowes Street Development project, Fingal Developments Pty Ltd shall provide Ascot Vale Self-Storage Centre Pty Ltd with a duly executed ASIC Form 312 or alternatively a letter acknowledging that its third debenture mortgage charge (No 1536072) does not continue to affect the land the subject of the contract for the sale of that apartment and shall not do anything which might obstruct the settlement of the sale of that apartment."

13 An ASIC Form 312 is a document, executed by a chargee, acknowledging that the charge no longer applies to certain specified property. The document contains a specific description of the property which is released. As a matter of practice, conveyancing solicitors acting for purchasers of apartments, which are the subject of charges, generally require the provision of a Form 312 on the settlement of the purchase transaction.

14 By June 2010, occupancy permits had been issued for 40 apartments, which were the subject of the development. Subsequently, additional occupancy permits were issued for the remaining ten apartments. As a result, it became necessary for Fingal to provide Form 312 releases, in order to enable the settlement, of the sale of those apartments, to proceed.

15 On 1 June 2010, the defendant forwarded 40 ASIC releases to Mr Leggo. Those releases were forwarded by the defendant, under cover of a letter written by him, on Aldgate Lawyers South Yarra letterhead, addressed to Mr Leggo, Trumble Szanto Lawyers. The letter was in the following terms:

"Dear Sir

Ascot Vale Self-Storage Centre Pty Ltd re Fingal Developments Pty Ltd

I enclose separate partial ASIC releases for the apartments as per the attached schedule.

The releases are forwarded to you for your convenience to assist settlements and are to be held upon trust for me and provided at settlement on the following basis:

(1) You will date the release at settlement;

(2) The settlement proceeds are applied to repay the first and second mortgages and selling agent's usual commission and your conveyancing charges as advised; and

(3) You provide me with a copy of the Statement of Adjustments and a running balance of the amounts owing under the first and second mortgage."

16 On 21 June 2010, Fingal appointed Messrs Stirling Horne and Peter Vrsecky, of Lawler Draper Dillon, chartered accountants, as receivers and managers of Ascot Vale. At the times which are relevant to this case, the solicitor acting on behalf of Fingal, in relation to its debenture charge, was Mr Myles Brown of Messrs Hall & Wilcox. The solicitor acting on behalf of Messrs Stirling Horne and Peter Vrsecky, in relation to their receivership of Ascot Vale, was Ms Julie Armstrong of Herbert Geer.

17 On the next day, 22 June 2010, Nom De Plume appointed Mr Thomas Fernandez ("Fernandez") as the receiver and manager of Ascot Vale. The solicitor acting on behalf of Fernandez, in relation to his receivership, was Mr John Sinisgalli of Hunt & Hunt.

18 On 29 June 2010, Mr Fernandez commenced proceedings in the Federal Court against Messrs Horne & Vrsecky, as first respondents, and Ascot Vale, as second respondent, seeking orders that he be entitled to exercise his powers, and discharge his duties, without interference from the first respondents. On 1 July 2010, Justice Finkelstein of the Federal Court made orders by consent in the proceedings. Clause 2 of the orders provided that Fernandez have leave to sign any documents necessary to complete the sale of certain specified apartments, and the sale of other apartments which were scheduled to proceed, at the Burrowes Street development. Clause 4 provided that, 24 hours before the settlement of the sale of any apartment, Fernandez was to provide to Horne and Vrsecky a statement of adjustments and settlement statement, and any statement of account rendered by the selling agent. Clauses 5 and 7 of the order provided that, after payment of agent's fees, the fees of the solicitors for the vendor, goods and services tax, and construction costs, the balance be applied, first, in satisfaction of the Nom De Plume charge, and, secondly, in satisfaction of the Fingal charge.

19 After Mr Fernandez was appointed receiver and manager of Ascot Vale, the plaintiff told Leggo that he did not consider that Leggo should continue to handle the conveyancing transactions. The plaintiff was concerned to take over the conveyancing files, because Leggo was extremely upset and depressed by what had occurred with the development, and the plaintiff did not consider that Leggo was in such an emotional state that he could appropriately discharge his professional obligations to the best advantage of the client. The plaintiff also considered that Leggo could be in a position of conflict of interest, by continuing to act in the conveyancing matters.

20 On 7 July, the plaintiff sent to the defendant a letter concerning the sale of Apartment G 01 at the Burrowes Street development. That letter responded to an email, which the defendant had earlier sent to Mr Leggo, concerning the purchase of the apartment. In his letter of 7 July, the plaintiff noted that he was acting for the receiver and manager, and he requested that all future correspondence concerning the transaction should be directed to his office. The plaintiff also noted that he would seek instructions concerning the matters contained in the defendant's letter.

21 On the following day, 8 July, the plaintiff and the defendant met, and discussed a number of matters, in respect of which the defendant was acting on behalf of the purchaser.

22 In the meantime, the plaintiff, as solicitor for the vendor, proceeded to complete the sale of a number of apartments at the Burrowes Street development.

23 On 19 July 2010, the plaintiff served notices of rescission on Aldgate Lawyers in respect of the sale by Ascot Vale of Apartment G.06 to Connecting Pty Ltd, and in respect of the sale by Ascot Vale to Saiwai Pty Ltd of Apartments G.08 and 301. The defendant was then acting on behalf of both Connecting Pty Ltd and Saiwai Pty Ltd. The defendant was the director of Connecting Pty Ltd, which was trustee of the Connecting Unit Trust.

24 The defendant responded to the notices of rescission by a letter dated 26 July 2010. He contended that the apartments were not ready for settlement, as they were incomplete. He maintained that Fernandez had confirmed to Lawler Draper Dillon that he had not instructed the plaintiff to issue the notices of rescission. The defendant contended that the plaintiff and his firm were conflicted in the matter, and that they had acted without instructions in issuing the notices of rescission.

25 On the same day, the defendant sent another letter to the plaintiff, concerning the sale by Ascot Vale of Apartments 211 and G 02. The defendant, himself, was the purchaser of those apartments. In that letter, the defendant stated:

"Given the conflicts of interest and conduct of your office in respect of this matter, particularly in acting without instructions, I advise that I am reserving my rights to claim back penalty interest and your costs paid at settlement by me on a pragmatic basis to pay out the second mortgagee."

26 On the following day, 27 July 2010, the defendant sent to the plaintiff, by facsimile and by post, a letter, which he copied to Mr Jason Stone, an employee of Messrs Horne and Vrsecky, and to Mr Sinisgalli. That letter was the first of a series of correspondence sent by the defendant to the plaintiff concerning the ASIC releases, which the defendant had previously provided to Mr Leggo. In the letter, the defendant purported to attach a "summary" of correspondence between himself and Leggo, relating to the provision of the releases and the appointment of the receiver. In fact, the defendant sent, with the letter, 58 pages of such correspondence. The defendant maintained, in the letter, that the terms of the provision of the ASIC releases had been breached, and he required the return of all unused releases to his office immediately.

27 The plaintiff responded to that letter by a facsimile letter, in which he stated:

"Your letter asserts the breach of some terms by somebody and makes certain demands. I do not propose to read through 58 pages of correspondence to try and figure out what you are talking about, nor am I prepared to seek instructions from my client without a proper understanding of your assertions.

If you have a request or a claim to make then please make it in clear and succinct terms and it will receive the attention it undoubtedly deserves."

28 The defendant responded by another letter, dated 27 July, sent by facsimile and post to the plaintiff. In it, he maintained that the plaintiff's firm had breached the terms of the provision of the ASIC releases, and he required the return of all the unused releases immediately. He stated that the plaintiff did not need to read the 58 pages of correspondence, in order to understand the "direct and succinct purpose of my letter which was to require you to return the ASIC releases immediately".

29 The plaintiff responded by another letter dated 27 July 2010, which he sent to the defendant by facsimile. In that letter the plaintiff stated:

"The only additional piece of information you have provided that it is my 'firm [that] has breached the terms of the provision of the ASIC releases'. Thus your claim seems to be directed against Trumble Szanto Lawyers. If that indeed is so, then please specify the term that has been breached, how and when it was agreed and do me the courtesy of clearly spelling out your position, instead of playing verbal games which I have neither the time nor the inclination to participate in."

30 On the same day, 27 July, there was also correspondence between the plaintiff and the defendant concerning the rescission notices, which had been served by the plaintiff relating to the sale of Apartments G 06, G 08, 301 and 307. In that correspondence, the defendant maintained that the plaintiff had acted without instructions from Fernandez. In the same correspondence, the defendant reiterated that the plaintiff had a conflict of interest in acting for Ascot Vale in the conveyancing transactions against the interests of one of the unit holders. The plaintiff replied with a letter, in which he maintained that the rescission notices were valid, and that they had been issued on the instructions of his client, Mr Fernandez. The plaintiff also rejected the allegation, by the defendant, that he had a conflict of interest.

31 On 28 July, the defendant sent a further letter to the plaintiff, by facsimile and by post, again requiring the return of the ASIC releases. On the same day, the defendant sent a letter to the plaintiff concerning Apartments 211 and G 02. In that letter, he reserved his rights to claim back penalty interest and costs. The defendant, again, reiterated that he considered that the plaintiff was acting with a conflict of interest, and that the plaintiff had acted without instructions.

32 On 2 August 2010, the defendant sent a further letter to the plaintiff, requiring the return of the ASIC releases. On 3 August, the defendant wrote a letter to the plaintiff concerning the settlement of Apartment 113, which the defendant understood to be scheduled for 2.30 pm on that day. The defendant repeated that the plaintiff was required to return the ASIC releases, and stated that the plaintiff was not authorised to hand over any ASIC release in connection with any settlement, including Apartment 113.

33 On 4 August, the defendant wrote a further letter to the plaintiff, noting that the plaintiff had not returned the ASIC releases, and, again, restating that the plaintiff was not to settle any apartment using the ASIC releases. The defendant noted that an attempt had been made to settle Apartment 113 "without any reference to us to authorise or not authorise the provision of an ASIC release".

34 On 4 August, the plaintiff responded to the defendant, noting the various requests made by the defendant for the return of the releases, and noting that the defendant had requested return of those releases "on the grounds that some unspecified terms, on which they were provided, had been breached". The plaintiff stated that the letters, which he had sent to the defendant seeking clarification, had elicited no response. The plaintiff's letter then continued:

"As I understand the matter, the releases were provided to the above company [Ascot Vale], at a time before the appointment of its receiver and manager, to facilitate settlement of the various sales of the apartments. Other than that, my client, the receiver and manager, knows of no terms and certainly knows of no terms which have been breached.

In the absence of you providing the information requested, the releases will not be returned to you. They will continue to be held by my office for the purpose for which they were provided. My client knows of no principle of law which enables you to sign and hand over the releases and then change your mind and ask for their return."

35 On 6 August, the defendant replied by a letter, in which he reiterated the effect of correspondence, which had passed between himself and the plaintiff. He also stated that, on 14 June, he had written to Mr Leggo, restating the terms of the trust, upon which it was claimed that Trumble Szanto held the ASIC releases. The letter concluded (in the second last paragraph) stating:

"It is up to you whether you choose to read communications provided to you or not, however it is another thing to say that you do not have any information when it has been provided to you and then state your clients have the same lack of knowledge as that would seem unfair on them and remiss on your part."

36 The defendant copied ("cc'd") that letter to Mr Sinisgalli, Mr Leggo and Mr Stone.

37 Settlement of the sale of Apartment 113 proceeded on 6 August.

38 One week later, on 13 August 2010, the defendant sent to the plaintiff the letter, which is the basis of the plaintiff's claim in this case. The letter was copied to Mr Sinisgalli, Mr Myles Brown and Ms Julie Armstrong. It was in the following terms:

"Dear Sir

ASIC releases and Apartment 113, 8 Burrowes Street, Ascot Vale.

We refer to previous correspondence.

We record:

1. You have not returned the ASIC releases.
2. Despite our letter of 6 August you provided an ASIC release to complete settlement of Apartment 113.
3. Based on the correspondence between Lawler Draper Dillon and Mr Fernandez's office, Mr Fernandez appears unaware of the correspondence regarding the terms of provision of the releases which had been provided to you and Mr Sinisgalli.

Your actions are conscious breaches of your duties as a lawyer and an officer of the court.

We propose to write to ASIC and inform them that you are illegally retaining the ASIC releases and instructed not to process them without our written permission."

39 After receipt of the letter dated 13 August 2010, the plaintiff wrote a letter to the defendant dated 16 August. In that letter, he maintained that the ASIC releases had been made available by the defendant to Leggo, as a director of Ascot Vale, in order to facilitate settlement of the sale by that company of various apartments sold in the development. The plaintiff maintained that the releases had never been given to Trumble Szanto Lawyers in their capacity as solicitors. The plaintiff also stated that the defendant had never provided him with any evidence, which would establish that Trumble Szanto Lawyers had breached the terms of any agreement with the defendant. The plaintiff concluded:

"In closing, I refer to the penultimate paragraph of your letter in which you accuse me of conscious breaches of my duties as a lawyer and as an officer of the Court. You have taken the trouble to circulate your offensive and defamatory letter to at least three other people, as is indicated by the 'cc' designation at the foot thereof. I call on you to withdraw this libellous assertion which you have circulated to other people in an attempt to damage me in my professional reputation. I demand that you do so in writing, within 72 hours of receiving this letter which is being faxed to you. You are a lawyer and are aware of the consequences of failure to comply with this demand. You have been warned."

40 In response, the defendant wrote a letter to the plaintiff dated 19 August 2010, in which he denied that his letter of 13 August was defamatory. The defendant disputed the plaintiff's contention that the ASIC releases were not given to Trumble Szanto Lawyers in their capacity as solicitors for Ascot Vale. He concluded by stating that, since the plaintiff had failed to return the releases to him, he had made a formal complaint to the Legal Services Commission. The defendant enclosed a copy of the letter, which he had written to the Legal Services Commission in that respect.

41 In reply, the plaintiff wrote a letter dated 23 August 2010, in which he stated:

"I note that, rather than withdraw your defamatory allegations, you simply maintain that your letter of August 13, 2010 is not defamatory. You then go on to set out the identity of the persons to who [sic] you knowingly published your remarks.

Your original letter made serious allegations about my conduct as a lawyer and an officer of the Court - allegations which have no substance. You then published those allegations to other persons in the legal profession in what I can only interpret as a deliberately malicious manner.

As previously advised, I do not intend to allow you to do this and I will now take action against you."

42 The plaintiff issued these proceedings on 27 August. On 30 September, the defendant's instructing solicitors sent a letter to the plaintiff's solicitors, enclosing a letter from the defendant which purported to be provided under Part 3 of the Defamation Act 2005 (Vic). The letter was addressed to the plaintiff, and was marked "Without Prejudice". It was in the following terms:

"Dear Mr Szanto

I refer to my letter to you dated 13 August 2010 copied to:

• John Sinisgalli, of Hunt & Hunt;
• Myles Brown, of Hall & Wilcox; and
• Julie Armstrong, of Herbert Geer.

In that letter I stated that you consciously breached your duties as a lawyer and an officer of the Court and acted illegally in retaining certain ASIC releases.

I apologise unreservedly for any offence or embarrassment my statements may have caused you.

Pursuant to the provisions of Part 3 of the Defamation Act 2005 (Vic) I offer to make amends.

I offer to take steps to advise Mr Sinisgalli, Mr Brown and Ms Armstrong that my letter is, or may be, defamatory of you.

Further, I offer to pay reasonable expenses incurred by you as a result of my letter and any reasonable expenses you may incur in considering my offer to make amends.

Yours faithfully

Tony Melville.

Aldgate Lawyers, South Yarra."

43 Subsequently, on 4 November 2010, the defendant sent letters, in identical terms, addressed respectively to Mr Myles Brown, Mr John Sinisgalli, and Ms Julie Armstrong. Those letters were in the following terms:

"I refer to my letter to Mr Peter Szanto, dated 13 August 2010, a copy of which was sent to you.

My letter was, or may have been, defamatory of Mr Szanto.

It was not my intention to defame Mr Szanto or to cause him any offence or embarrassment. I apologise unreservedly to Mr Szanto for any hurt and embarrassment that he may have suffered as a result of my letter, which I regret.

I advise that I have written to Mr Szanto, including the following apology:

'I apologise unreservedly for any offence or embarrassment my statements may have caused you'."

44 The plaintiff's case is that the letter of the defendant, dated 13 August 2010, was defamatory of him in its ordinary and natural meaning, and that it bore the following five imputations:

"(a) The plaintiff deliberately breached his duties as a lawyer by failing to return ASIC releases to the defendant;

(b) The plaintiff deliberately breached his duties as an officer of the Court by failing to return ASIC releases to the defendant;

(c) The plaintiff deliberately breached his duties as a lawyer by providing an ASIC release to complete settlement of an apartment contrary to a letter that he had received from the defendant;

(d) The plaintiff deliberately breached his duties as an officer of the Court by providing an ASIC release to complete settlement of an apartment contrary to a letter that he had received from the defendant;

(e) The plaintiff acted illegally by retaining ASIC releases that had been provided to him."

45 At trial, the defendant accepted that the letter was defamatory of the plaintiff, but he denied that the letter bore, or was capable of bearing, the imputations pleaded by the plaintiff. In addition, the defendant also relied on the following defences, pleaded by him:

(b) Qualified privilege under s 30 of the Defamation Act 2005 (Vic) ("the Act");

(c) A defence of "triviality" under s 33 of the Act, namely, that the circumstances of publication of the letter were such that the plaintiff was unlikely to sustain any harm by reason of the publication of the letter;

(d) A defence pursuant to s 18(1) of the Act, that the plaintiff has failed to accept a reasonable offer of amends made to him, namely, the offer contained in the letter by the defendant's solicitors to the plaintiff's solicitors dated 30 September 2010.

46 The plaintiff by way of reply to the defence, pleaded:

(a) That the defendant was actuated by malice in publishing the letter;

(b) That the defendant's letter dated 30 September 2010 was not an offer within s 15 of the Act, and, further, that, contrary to s 14(1)(a), the defendant had failed to make any such offer to the plaintiff within 28 days of the concerns notice given by the plaintiff to the defendant.

47 In addition to the issues raised by the pleadings, the evidence in the case also raised an issue whether the defendant is responsible for the publication of the letter to two persons, other than the three solicitors to whom the letter was expressly sent.

48 Most of the viva voce evidence in the trial related to the question as to whether the defendant had proven that the letter was published on an occasion of qualified privilege, and to the related question whether, in publishing the letter, the defendant was actuated by malice. Some of the evidence also related to the issue of damages. The plaintiff gave evidence, and called one witness, Mr Paul Rule, in support of his case. The defendant gave evidence, and also called two witnesses, Ms Armstrong and Mr Brown.

49 Ms G Schoff, who appeared with Ms R Sion for the defendant, did not contend that the letter was not defamatory of the plaintiff. However, she submitted that the persons, to whom the letter was published, would have understood that the last two sentences of the letter were an expression of the defendant's opinion as to the plaintiff's conduct. Accordingly, she submitted that the ordinary reasonable reader would not have understood the words, contained in those sentences, as conveying a statement that the plaintiff had in fact consciously breached his duties as a lawyer, or was acting illegally, but they would have understood the words to convey a less serious imputation, namely, that it was the defendant's opinion that the plaintiff had acted in that way. Thus, in essence, Ms Schoff submitted that the five imputations, pleaded by the plaintiff, should each be preceded by the phrase "it was the defendant's opinion that ...".

50 The question, of what imputations are conveyed by a particular publication, is determined by reference to the standard of the "ordinary reasonable" reader (or listener).[1] The assertions, made in the last two sentences of the letter, were plain and to the point. It is true that they were preceded by the specification of three facts, on which the allegations, made in the last two sentences, were clearly based. Nevertheless, the last two sentences were unqualified assertions by the defendant concerning the behaviour of the plaintiff. The words mean what they say. In my view, the ordinary reasonable reader would have understood the words to convey each of the five imputations pleaded by the plaintiff.

51 The letter was, of course, published to each of the three solicitors, to whom it was copied, namely, Mr Sinisgalli, Mr Brown and Ms Armstrong. In addition, there was evidence that it came to the attention of two other members of the legal profession.

52 Mr Paul Rule was, at the time of the events with which this case is concerned, a solicitor employed by Trumble Szanto. The facsimile machine of that office was located near the reception area, and faxes sent to the office were placed on a trolley for collection.

53 On 13 August 2010, Mr Rule was expecting an urgent facsimile in a matter in which he was acting as solicitor. When he came to the trolley, he saw the letter addressed to the plaintiff from the defendant. He picked it up to take it to the plaintiff's office. However, the contents of the letter attracted his attention, and he read it. He then took it to the plaintiff's office, and left it on his chair.

54 In addition, Mr Myles Brown also gave evidence, which is relevant to the issue of the publication of the letter. In 2010, Mr Brown was employed by Hall & Wilcox, who were engaged as solicitors for Fingal. In cross-examination, Mr Brown stated that, after receiving the letter, he showed it to the partner in charge of the file on which he was acting, Mr Gerard Magna.

55 It is, of course, trite law that where a person publishes material to another person, the original publisher may be liable if the recipient republishes that material to another person, where the republication of the material to the third person was the natural and probable consequence of the original publication, or where the person, to whom the original publication was made, was under a moral duty to republish the words to the third person[2]. The defendant chose to send the letter to the plaintiff by facsimile. The facsimile machine at Trumble Szanto was a facility used by all members of the office, as is commonly the case. Accordingly, it may well be expected that such a transmission might first come to the attention of another member of the office of Trumble Szanto, than the plaintiff. The letter was not marked "Private and Confidential". It was short and to the point. The concluding sentences were expressed in strong terms, which would readily attract the eye of the casual observer. In those circumstances, I am satisfied that the publication of the letter to Mr Rule was a natural and probable consequence of the transmission of it, by the defendant, to the offices of Trumble Szanto, by facsimile. Thus, the defendant is liable for the publication of that letter to Mr Rule.

56 Further, I am satisfied that Mr Brown was under a relevant duty to show the letter, which he received from the defendant, to the partner who was supervising the file which related to the matter in question. The letter contained serious allegations, made by one legal practitioner about the conduct of another legal practitioner, in respect of a transaction, which was of particular interest to the client for whom Mr Brown and Mr Magna were acting. Accordingly, the defendant is liable for the publication of the letter to Mr Magna.

57 The principal defence relied on by the defendant was that of qualified privilege. In particular, the defendant maintained that each of the three people, to whom he copied the letter, was a solicitor acting for a party, in the disputes, which had arisen between Nom De Plume and Fingal, relating to the distribution of the proceeds from the settlement of the sale of apartments in the Ascot Vale development. The defendant maintained that those acting for each of the two receivers (Mr Sinisgalli and Ms Armstrong) would be interested to know that the solicitor, who was acting on behalf of the company which was in receivership, was dealing with the assets in a manner, which constituted a breach by him of his duties as a solicitor. The defendant contended that Mr Brown, who was acting on behalf of Fingal, and who was instructed to act in relation to the return of the ASIC releases, also had an interest to know that fact. Accordingly, it was submitted that the defendant published the letter in furtherance of an interest, which he had in the subject matter of it, and that each of the nominated recipients of the letter had a corresponding interest to receive it.

58 On the other hand, Mr M Lapirow, who appeared on behalf of the plaintiff, submitted that the letter was not published to the three nominated recipients on an occasion of qualified privilege, at least in respect of the publication of the letter to Mr Sinisgalli and to Ms Armstrong. Further, he submitted that the defendant was actuated by malice in forwarding the letter to those three solicitors. He contended that the purpose of the letter was to pressure the plaintiff not to proceed with notices of rescission, which had been served in respect of the sale of apartments, in the development, to clients of the defendant, including Saiwai Pty Ltd, and to the defendant himself. Mr Lapirow contended that, since 27 July, the defendant had been pursuing the return of the ASIC releases for that purpose, and that, in that context, the letter of 13 August was part of a strategy by the defendant to intimidate the plaintiff from acting on the rescission notices.

Evidence relating to qualified privilege and malice

59 As I stated, most of the viva voce evidence, led in the trial, related to the issue of qualified privilege, and the related question of malice. It is useful to commence with the evidence adduced on behalf of the defendant on those issues.

60 The defendant gave evidence that he forwarded the 40 ASIC releases to Mr Leggo, under cover of the letter of 1 June 2010, as a matter of convenience. He stated that he could have attended each settlement, and produced an ASIC release at each settlement. However, it was convenient to all parties for him to provide a bundle of releases, in advance, to Mr Leggo, in order to facilitate the settlement of the sale of the apartments in the Ascot Vale development. The defendant left for overseas on 7 June. In the following days, there was a substantial amount of communication, by email, between himself and Mr Leggo, in which the defendant maintained that the conditions, upon which he had provided the ASIC releases, were not being complied with. In particular, the defendant was concerned that he was not being provided with a running balance of what was owed to the first mortgagee and the second mortgagee.

61 Accordingly, on 18 June 2010 the defendant sent an email to Leggo, complaining that Leggo had breached the terms, on which the ASIC releases had been provided, by failing to provide the information required by Fingal. The defendant stated that, in order to continue to provide the ASIC releases, the outstanding information was required to be provided forthwith. Notwithstanding that request, the information, referred to by the defendant in the email, was not provided. Accordingly, on 21 June, Fingal appointed a receiver and manager of Ascot Vale.

62 In his evidence in chief, the defendant identified the documents, which he forwarded to the plaintiff under cover of the letter dated 27 July 2010, in which he sought return of the ASIC releases. He stated that at that stage the receivers appointed by Fingal (Lawler Draper Dillon) had calculated that the second mortgagee had been paid out, and that Mr Fernandez should therefore retire, so that the third mortgagee should receive the funds from any further settlements of sales of the apartments.

63 Accordingly, on 3 August the defendant sent to the plaintiff the letter, to which I have referred in paragraph 32 above, concerning the settlement of Apartment 113, and in which the defendant repeated his requirement that the plaintiff return the ASIC releases to him. The defendant stated that, at that stage, Fingal had not been given information regarding what, if any, amount was outstanding to the second mortgagee.

64 The defendant then referred to the correspondence, which passed between himself and the plaintiff between 4 August and 6 August, and to which I have referred in paragraphs 33 to 35 above. He stated that he was not satisfied with the response, which the plaintiff made to his correspondence on 4 August, because he did not consider that the plaintiff had addressed the issues which he (the defendant) had set out in correspondence in early June.

65 In cross-examination, the defendant stated that, after he provided the ASIC releases to Leggo, the requirement which he specified, that he be provided with a statement of adjustments, and a running balance of the amounts owing under the first and second mortgages, was not complied with. He stated that he had significant issues with Leggo concerning the accounting in respect of the proceeds of the settlement of sales of the apartments. In particular, there was a dispute concerning payments, which were being made to Hughes Kennedy, which was a firm of business consultants, who had been involved in the sale of the apartments. Hughes Kennedy charged Ascot Vale both commission and a rebate. The defendant maintained that, while it was appropriate that Hughes Kennedy be paid their commission from the proceeds of the sales of the apartments, the additional rebates should not have been paid to them, but, rather, should have been treated by Leggo, and subsequently by Fernandez, as an unsecured debt owed by Ascot Vale to Hughes Kennedy. In re-examination, the defendant stated that the amount of rebates, which were in dispute, were worth about $700,000. In particular, the defendant was concerned that those amounts should not be paid to Hughes Kennedy, in priority to the amounts owing to Fingal under its third ranking security.

66 In cross-examination, the defendant further stated that, by the end of July 2010, there were only two contracts for the sale of apartments which were yet to settle, namely, the contract for the sale of Apartment 113 to an unrelated party, and the sale of Apartment G 06. At that stage, the defendant had been advised by Lawler Draper Dillon that, on their calculations, the Nom De Plume mortgage had been paid out, and that the proceeds of the sale for those two apartments was payable to Fingal. However, he was unable to obtain any appropriate indication from Mr Fernandez as to what he claimed was still owed on the second mortgage. The defendant was concerned to gain possession of the ASIC releases, and not to permit them to be used in respect of the sale of Apartment 113, in order to prevent unsecured creditors (and, in particular, Hughes Kennedy) being paid in preference to Fingal. He said that he did not rely on the receivers, appointed by Fingal, to undertake that role. Those receivers had been unsuccessful in their request for information from Fernandez, about the status of the debt owed to Nom De Plume. Accordingly, the defendant considered it appropriate to try to take to control himself of the settlement, in order to ensure that settlement funds flowed in their correct fashion. The defendant stated that he did not wish to prevent the settlement of the sale of Apartment 113, but, rather, he wished to ensure that he had sufficient control of the disposition of the proceeds from that sale to ensure that the interests of Fingal were property protected.

67 In cross-examination, the defendant stated that he considered that the 58 pages of correspondence, which he provided to the plaintiff on 27 July, was self-explanatory, of the basis upon which he sought return of the ASIC releases. He agreed that the plaintiff, in response, by letter dated 4 August, requested him to state concisely the basis of his claim for return of the ASIC releases, and that he did not respond to that request. He also agreed that, in hindsight, it would have been simple for him to specify the terms, of the provision of the ASIC releases, on which he relied, and the breach of those terms, which he was alleging. However, he considered that the bundle of correspondence, which he provided to the plaintiff on 27 July, fulfilled that purpose, and was self-explanatory.

68 Mr Lapirow cross-examined the defendant as to the allegations, which the defendant made, in correspondence, that the plaintiff was acting with a conflict of interest, and that he was acting without instructions in issuing the rescission notices in respect of apartments purchased by the defendant and by clients of the defendant. In particular, it was put to the defendant that those allegations were made by him for an ulterior purpose, namely, to intimidate the plaintiff, and thus to dissuade him from relying on the rescission notices which had been served on 19 July in relation to apartments purchased by clients of the defendant and by the defendant himself. In response, the defendant stated that he considered that the plaintiff had a conflict of interest, primarily arising from his position as a director of Nom De Plume, and acting, at the same time, for Ascot Vale in the settlement of the sales of the apartments. He also stated that he was of the view that Trumble Szanto was conflicted in the matter in two particular respects. First, when Richard Leggo was acting on behalf of Ascot Vale, Saiwai Pty Ltd, which was a purchaser of apartments in the development, became deregistered. Leggo was requested to amend the contracts of sale in order to substitute the new trustee of the interests, of which Saiwai had previously been the trustee. However, Leggo failed to do that. On that basis, the parties, on whom the notices of rescission had been served, contended that those notices were ineffective. The second conflict identified by the defendant was that Leggo had drafted a special condition contained in the contract, which was the subject of some contention between the vendor and the purchasers.

69 The defendant also maintained, in cross-examination, that he acted appropriately in maintaining to the plaintiff that he had acted without instructions from Mr Fernandez, in issuing rescission notices in respect of some of the contracts of sale. He stated that Jason Stone, an employee of Lawler Draper Dillon, had informed him that he had spoken to Mr Vijay Subra, an employee of Mr Fernandez, and Mr Subra had told him that Mr Fernandez had not instructed the plaintiff to issue the notices of rescission. The defendant denied that his assertion, that the plaintiff was acting without instructions, was a stratagem designed to dissuade the plaintiff from enforcing the notices of rescission. He also denied that his objective was to challenge the plaintiff's integrity, and thus to intimidate him.

70 In cross-examination, the defendant agreed that he had made a substantial profit in respect of the apartments which he had purchased, and resold. He agreed that one of the motivations, which he had in disputing the rescission notices, was to maintain the contracts, under which he had purchased the apartments from Ascot Vale, in order to ensure that he would be able to realise the profit which would accrue to him on the completion of the resale of the apartments by him. He agreed that, in contesting the validity of the rescission notices, he was seeking to protect the interests of the purchasers for whom he was acting, including himself, to enable those purchasers to complete their contracts of purchase and then resell the apartments at a profit.

71 Mr Lapirow cross-examined the defendant as to the letter, which he wrote on 13 August. He stated that he wrote point 3 of the letter (in which he stated that Mr Fernandez was unaware of the correspondence relating to the ASIC releases), because he understood that Mr Fernandez had not been provided with the information that the ASIC releases had been provided to Mr Leggo on a certain basis. The defendant based that conclusion on emails which had passed between Mr Subra and Mr Stone on 12 August, and which had been forwarded to him.

72 The defendant further stated that the assertion, in the letter, that the plaintiff's actions were "conscious breaches of your duties as a lawyer and as an officer of the court", referred to the fact that the plaintiff settled the sale of Apartment 113, after the defendant had withdrawn permission to use the ASIC release, which was the property of Fingal. The defendant stated that, when he wrote the letter, he genuinely believed that the plaintiff had consciously breached his duties as a lawyer, and as an officer of the court. He acknowledged that the plaintiff, in his letters, had stated that he did not understand why the defendant was insisting on the return of the releases to him. However, he had assumed that the plaintiff had spoken to Mr Leggo, and had read the correspondence, under cover of which the ASIC releases had been provided to Leggo.

73 The defendant stated that he considered that Mr Sinisgalli had an interest in the matters contained in the letter, because he was acting for Mr Fernandez, and it was important for Mr Fernandez to understand what had happened. He considered that the breaches, of which he was accusing the plaintiff, were matters which affected Mr Fernandez in the settlement of Apartment 113. The defendant further stated that he sent the letter to Mr Brown, a solicitor for Fingal, because Mr Brown had been instructed to write, on behalf of Fingal, maintaining the right of Fingal to return the ASIC releases. The defendant stated that Ms Armstrong, in acting for the receivers appointed by Fingal, was aware of the issue relating to the ASIC releases, and that she had been sent copies of other correspondence relating to the same issue.

74 The defendant denied that he wrote the letter of 13 August in order to enable him to negotiate, from a position of strength, in relation to the notices of rescission, which had been served by the plaintiff. He denied that he had sought return of the ASIC releases, and made an issue about that matter, in order to strengthen his hand in contending that the rescission notices ought to be withdrawn.

75 The other two witnesses called on behalf of the defendant, Ms Armstrong and Mr Brown, each gave evidence, which related to the background to the defendant's letter dated 13 August 2010, a copy of which they each received. Ms Armstrong was a partner at Herbert Geer at the time. In June 2010, she was retained to act for Mr Horne and Mr Vrsecky, of Lawler Draper Dillon, in their appointment as receivers of Ascot Vale. She stated that, at that time, there was a dispute about a number of matters between Nom De Plume and Fingal. In particular, the defendant was concerned that, in managing the settlement of the sales of the apartments in the development, Nom De Plume was paying costs and expenses, which did not have to be paid, in priority to Fingal, the third ranking secured creditor. Ms Armstrong was instructed to ensure that, once the Suncorp Metway debt was discharged, the proceeds of the sales of the apartments were not used to pay expenses relating to the sales, other than those expenses which were necessary to enable the title of the apartment to pass to the purchaser.

76 On 8 July 2010, Ms Armstrong wrote a letter to Mr Sinisgalli, stating that, according to her client's calculations, following completion of the sale scheduled to take place on that day, the secured debt owed to Nom De Plume had been paid in full. Ms Armstrong also asserted that the plaintiff had served rescission notices, in respect of the contracts of sale which had not yet settled, without consultation with Lawler Draper Dillon. Ms Armstrong stated that she had been instructed to request that the proceeding be brought back before the Federal Court pursuant to liberty to apply.

77 In her evidence, Ms Armstrong explained that her client did not consider that the rescission notices should have been served. The purchasers were in a position to settle, but there were issues relating to the condition of the apartments, which could have been readily attended to by the vendor. On the other hand, if the rescission notices were effective, the apartments would need to be resold. The ensuing delay would increase the amount of interest payable to Nom De Plume, and thus adversely affect the position of Fingal, as the subsequent security holder.

78 Mr Sinisgalli responded by a letter dated 9 July, in which he noted the service by Ms Armstrong of an interlocutory application to the Federal Court returnable on 21 July. Mr Sinisgalli maintained that there were serious concerns relating to the validity of the Fingal charge, and he requested provision of all documents relating to the advance, which was secured by the charge.

79 Ms Armstrong stated that, during that time, there was an issue about the ASIC releases. The defendant was concerned to ensure that, at each settlement, the only expenses, which were disbursed from the proceeds of the sale, were those which were necessary to enable the settlement to take place. Ms Armstrong confirmed that, on 12 August, she received an email from Jason Stone, of Lawler Draper Dillon, attaching the email of the same date which Mr Stone had received from Mr Subra, of Mr Fernandez's office. In that email, Mr Subra had stated that he had not seen any correspondence, which evidenced that the ASIC releases were conditional, and, accordingly, Mr Subra stated that there was no reason why the ASIC releases could not continue to be used for the purposes of completing the remaining contracts of sale.

80 Mr Brown also gave evidence relevant to the issue of qualified privilege. On 6 August, Mr Brown received a copy of an email, sent by Ms Armstrong to Mr Sinisgalli, confirming that the receivers appointed by Fingal were agreeable to the settlement of the sale of Apartment 113, provided that the terms of the consent orders made on 1 July were complied with. In particular, she required that she be provided the settlement statement and statement of adjustments, and written confirmation that the rebates (claimed by Hughes Kennedy) would be retained in trust by Mr Fernandez. Ms Armstrong also queried whether the rescission notices, which had been served in respect of other apartments, were valid. Subsequently, on 6 August, Mr Brown received a copy of a further email, sent by Ms Armstrong to Mr Sinisgalli, in which Ms Armstrong stated that Mr Fernandez, in settling the sale of Apartment 113 that day, had failed to comply with the terms of the consent orders made on 1 July.

81 Mr Brown confirmed that on 27 August, on instructions of Fingal, he wrote a letter to the plaintiff, stating that the ASIC forms, provided by the defendant, were held on trust by Trumble Szanto and requesting that the executed ASIC forms, which had not been lodged with ASIC, be returned by 1 September.

82 The evidence in chief given by the plaintiff focused on the correspondence passing between the parties, both before and after the letter of 13 August. I have summarised that correspondence earlier in these reasons. In his evidence, the plaintiff stated that he did not return the ASIC releases to the defendant, because he did not consider that the defendant was entitled to them. He had sought instructions from his client, who instructed him not to return them. He stated that he was not aware of the basis, on which the defendant was maintaining his entitlement to return of the ASIC releases.

83 In cross-examination, the plaintiff stated that he considered that the releases had been given to Mr Leggo, in his capacity as a director of Ascot Vale, and not in his capacity as a member of Trumble Szanto. The plaintiff stated that he did not read, nor has he read, the 58 pages of the documentation which were forwarded under cover of the first request by the defendant, on 27 July, that he return the ASIC releases. He regarded the defendant's requests for the return of the releases was an attempt by the defendant to take control of the Ascot Vale apartments. The plaintiff considered that the defendant was agitating the issue relating to the ASIC releases, in order to avoid the effect of the rescission notices, which had been served on him. The plaintiff stated that it was not unusual for purchasers, in conveyancing transactions, to resort to such tactics in order to avoid the effect of rescission notices served on them.

84 The plaintiff maintained, in cross-examination, that he did speak to, and obtain instructions from, Mr Fernandez about the requests made by the defendant for return of the ASIC releases. He said that he generally did provide copies of the defendant's correspondence to Mr Fernandez. In particular, he was confident that he had had discussions with Mr Fernandez, between 27 July and 4 August, which was the date upon which the plaintiff first responded, by letter, to the defendant's request for return of the ASIC releases.

85 Before expressing conclusions concerning the evidence which I have just summarised, it is necessary, first, to identify the relevant legal principles, relating to the issues of qualified privilege and malice, which are relevant to the case. Those principles are not in issue. Rather, the central dispute in the case relates to the application of those principles to the facts of the case.

86 The seminal statement of the principles of qualified privilege is the well known passage from the judgment of Baron Parke in Toogood v Spyring[3]:

"In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well known limits as to verbal slander), and 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 the unauthorised communications, and affords a qualified defence depending upon 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."

87 That passage has been often quoted in subsequent decisions, and is regarded as the authoritative articulation of the principles of, and rationale for, the existence of the privilege.[4]

88 The principles were restated by Lord Atkinson in Adam v Ward[5]:

" ... A privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential."

89 The authorities emphasise that no narrow view is to be taken of the concepts of "duty" or "interest".[6] As Griffith CJ stated in Howe & McColough v Lees[7]:

"The term 'community of interest' does not connote a joint pecuniary interest in property. Any legitimate object for the exercise of human faculties pursued by several persons in association with one another may be sufficient to establish community of interest. Again: 'interest' does not mean an interest in the particular subject matter as to which the communication is made, but an interest in knowing the fact communicated, in other words, an interest in the subject matter to which the communication is relevant, as for instance the solvency of a probable customer."

90 The principles relating to qualified privilege are stated in broad terms, at a "... very high level of abstraction and generality".[8] The breadth of expression of the principles is, I would apprehend, a product of the nature of the underlying rationale for the existence, in defamation law, of the defence, as described by Baron Parke in Toogood v Spyring. In order to apply those principles appropriately to the present case, it is necessary to "... make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication".[9] It is for that reason that quite detailed evidence was adduced as to the background issues, which had arisen in the commercial context, in which the defendant's letter of 13 August 2010 was written.

91 In determining whether the defendant published the material, complained of, on an occasion of qualified privilege, the court does not focus, solely, on the defamatory part of the material which was published by the defendant. Rather, the court determines whether the material published by the defendant, including the defamatory part of it, was published in circumstances attracting the reciprocal common duty or interest, to which I have referred. Where the subject matter of the publication would attract a defence of qualified privilege, a second question may arise as to whether the defamatory statement, of which the plaintiff complains, was "sufficiently connected" to that matter.

92 That principle derives from two High Court decisions. In Bashford v Information Australia (Newsletters) Pty Ltd[10], the defendant was the publisher of a newsletter, entitled "Occupational Health and Safety Bulletin", which was distributed by subscription only to professionals who were concerned with issues relating to occupational health and safety. The defendant, in the newsletter, published an article concerning the outcome of Federal Court proceedings between R A Bashford Consultants Pty Ltd, of which the plaintiff was a director. In those proceedings, a Federal Court judge had held that R A Bashford Consulting Pty Ltd had caused the publication of a trade newsletter, which contained material contravening s 52 of the Trade Practices Act. The defendant, in its newsletter, incorrectly described R A Bashford Consultants Pty Ltd as "R A Bashford" (the plaintiff). The primary judge, and the Court of Appeal, each held that the defendant's newsletter was published on an occasion of qualified privilege. On appeal, the High Court held (McHugh and Callinan JJ dissenting) that the newsletter was published on an occasion of qualified privilege, and that the defamatory part of it, of which the plaintiff complained, was sufficiently connected to that occasion to attract the defence of qualified privilege.

93 In their joint judgment, Gleeson CJ, Hayne and Heydon JJ expressed the question, which they needed to determine, in terms of whether the material which defamed the plaintiff "... was sufficiently connected to the privileged occasion to attract the defence".[11] Kirby J, who agreed, adopted a similar approach, stating that the test was whether the defamatory imputations were "relevant to the privileged occasion"[12] In their joint judgment, Gleeson CJ, Hayne and Heydon JJ applied the test of "sufficient connection", as follows:

"The matter of which the appellant complained had as its subject the use that persons other than the copyright owner might make of material safety data sheets. That subject was evidently connected to occupational health and safety. The particular parts of the matter published by the respondent which defamed the appellant related to that subject. The defamatory matter related to the subject because it, like the rest of the matter, concerned the use that others might make of material safety data sheets. ... That the article wrongly identified the appellant ... did not alter or reduce the connection between the privileged occasion and the defamatory matter."[13]

94 A similar approach was adopted by the High Court in Cush v Dillon[14]. In that case, Ms Cush was the general manger of a catchment management authority. Mrs Dillon (the defendant) and Boland were each board members of the authority. The chairperson of the authority was Mr James Croft. An employee complained of a grievance against Ms Cush. That grievance was determined by the board, of which Boland and Croft were each members. The complaint was not upheld. The employee was dissatisfied with that outcome. He told Mrs Dillon that he felt that his matter had not been dealt with impartially, because he believed that Ms Cush and Mr Boland were having an affair. In fact, at that time, there was a rumour, to such an effect, among the staff of the authority. Mrs Dillon, having spoken to the aggrieved employee, stated to Mr Croft "it is common knowledge among people in the (authority) that Les (Boland) and Amanda (Cush) are having an affair". Both Cush and Boland sued Dillon for defamation. The primary judge rejected a defence of qualified privilege, finding that it had been defeated by malice on behalf of the respondent. That finding was reversed by the Court of Appeal of New South Wales. A new trial was ordered on the defence of qualified privilege. The plaintiffs appealed to the High Court. Their appeal was dismissed.

95 The primary judge, and the majority in the Court of Appeal, had each considered that Mrs Dillon did have a relevant duty to convey the existence of the rumour, concerning Cush and Boland, to Mr Croft, who had a reciprocal interest to receive that information. That conclusion was not challenged on appeal to the High Court, who considered that it was "clearly correct".[15] The narrow point on appeal was whether the statement by Mrs Dillon to Mr Croft, that it was "common knowledge" that the plaintiffs were having an affair, fell within the umbrella of the privilege. In their joint judgment, French CJ, Crennan and Keifel JJ applied the test stated in Bashford, namely, whether the defamatory material was "sufficiently connected to the privileged occasion to attract the defence". Their Honours held that it could not be said that the necessary connection was absent in the present case. Their Honours stated:

"The concession, properly made, was that the occasion of the privilege extended to the communication of the existence of the rumour (that the plaintiffs were having an affair). It could not, in our opinion, then be suggested that the communication of the fact of an affair was less relevant to the matters discussed than a rumour. The error inherent in the statement does not deny the privilege."[16]

96 In order to overcome a defence of qualified privilege, the plaintiff must establish that the defendant was actuated by malice in publishing the defamatory matter complained of. In order to establish the existence of malice, the plaintiff must prove that, in publishing the material complained of, the defendant was actuated by a motive which was foreign, or ulterior, to the privileged occasion.[17] It is not sufficient that the plaintiff demonstrate the existence of a potential motive on behalf of the defendant. Rather, the plaintiff must establish that the ulterior motive was the dominant purpose of the publication of the matter by the defendant.[18] Knowledge by the defendant, that the defamatory statement is untrue, may be "almost conclusive evidence" of malice, because it is strong evidence indicating the existence of an improper motive. However, knowledge of the falsity of the defamatory material is not, of itself, equivalent to the existence of the requisite improper motive.[19]

97 As I stated, the defendant has maintained that the defendant published the letter of 13 August to Mr Sinisgalli, Mr Brown and Ms Armstrong on an occasion of qualified privilege, on the ground that they each were acting as solicitors for a party to the dispute between Nom De Plume and Fingal concerning the settlement of the sale of apartments in the development. Accordingly, it was submitted that each of them had an interest in the subject matter of the letter.

98 On the other hand, Mr Lapirow, while accepting that the letter was published on occasion of qualified privilege to Mr Brown, contended that neither Mr Sinisgalli nor Ms Armstrong had a relevant interest in the subject matter of the letter. Mr Lapirow submitted that the issue relating to the use of the ASIC releases was no longer a live question between the parties, because, as at 13 August 2010, there were no other apartments which were due for settlement. Further, and in any event, he submitted that Mr Fernandez, and thus Mr Sinisgalli, did not have any relevant interest in the subject matter of the letter. Mr Lapirow contended that the question of the settlement of the sales of the apartments had been resolved by the consent orders made in the Federal Court. Those orders entitled Mr Fernandez to undertake the settlement of the sales of those apartments. He was only concerned with the proper realisation of the assets, and to comply with the terms of the consent orders. Mr Lapirow submitted that Mr Fernandez (and thus Mr Sinisgalli) had no relevant interest in the "technicality" of the settlement process.

99 Mr Lapirow further submitted that Ms Armstrong did not have a relevant interest in the subject matter of the letter of 13 August. In particular, he relied on an email sent by Jason Stone (of Lawler Draper Dillon) to Mr Subra (of Mr Fernandez's office) on 12 August, which was copied to the defendant, stating that "the matter of the ASIC releases is not an item that we intend to deal with as receivers and managers". Thus, Mr Lapirow submitted that, as at 13 August, Ms Armstrong's clients had expressly disavowed any interest in the use of the ASIC releases in the settlement of the sales of apartments.

100 I do not accept the submission, by Mr Lapirow, that there were no apartments in the development, which had either not been sold or settled as at 13 August 2010. In particular, rescission notices had been served in respect of Apartments G 06, G 08, 301 and 304. On 4 August, the plaintiff wrote to the defendant, as the solicitor for the purchasers of those apartments, noting that the time for compliance with the notices of rescission had expired, and that the contracts for the purchase of those apartments were at an end. Indeed, Apartment G 06 was resold by Ascot Vale, directly to the person to whom Connecting Pty Ltd had originally contracted to sell it. In October 2010, correspondence passed between the plaintiff and the defendant, specifically directed to the provision of a release by the defendant, for the purposes of effectuating the settlement of Apartment G 06. The settlement of that sale occurred on 10 December 2010, using a fresh ASIC release provided by the defendant for that transaction.

101 However, in my view, the question, whether there were any outstanding settlements of apartments sold in the development, is not particularly relevant to the determination of the question whether the letter was published by the defendant on an occasion of qualified privilege. Rather, the question is to be settled by a careful examination of the background circumstances leading up to the publication by the defendant of the letter of 13 August.

102 From early June 2010, there was dispute on foot between Fingal and Nom De Plume relating to matters pertaining to the settlement of the sales of those apartments. In the course of that dispute, each side found it necessary to appoint receivers to the assets and undertaking of Ascot Vale. Essentially, the sole asset of Ascot Vale was the development. The settlement of the sale of the apartments in that development was critical to the ability of Nom De Plume and Fingal to obtain repayment of the loans, which were the subject of their respective securities over Ascot Vale.

103 It was in the course of the realisation of those sales that a number of disputes arose involving Nom De Plume and Ascot Vale, and their receivers, as to the rights of each party in respect of the settlement of the sales of the apartments, and the roles which each of the parties were to undertake in completing the settlements of those apartments. The disputes involved, and were intimately connected with, the right of the plaintiff, as the solicitor for the vendor, to use the ASIC releases, which had previously been provided by the defendant to Mr Leggo on 1 June. That aspect of the dispute between the parties was very much a live issue at the time of the settlement of the sale of Apartment 113 on 6 August. It was an issue which necessarily affected the interests of Nom De Plume and Fingal, and the receivers appointed by them. The three solicitors, to whom the letter of 13 August was sent, acted, respectively, for Fingal, for the receiver appointed by Nom De Plume (Fernandez), and for the receiver appointed by Fingal (Lawler Draper Dillon).

104 In my view, a review of the circumstances leading to the settlement of the sale of Apartment 113 on 6 August reveals that each of those parties, and their solicitors, had a relevant interest in the completion of the sale, and the settlement of it. Similarly, each of them had an interest in the issue, which had been raised by the defendant, as to the right of the plaintiff to use the ASIC release, provided by the defendant in early June, for the purpose of completing that sale. The background circumstances demonstrate that there was a relationship between a number of the commercial disputes, which were at large between the parties concerning the sale of the apartments, and which necessarily involved the right of the plaintiff to complete the settlement of the sale of Apartment 113, using the ASIC release previously provided by the defendant.

105 It is necessary to return, in a little detail, to the background facts, which I have already summarised earlier in this judgment. It was not in dispute in the case that Fingal was obliged to provide ASIC releases, before the settlement of the sale of each apartment in the development, until the first and second mortgages had been discharged. The deed, entered into by the parties in March 2009, expressly contained a clause to that effect. Pursuant to that obligation, on 1 June 2010, the defendant provided forty ASIC releases to Leggo. Shortly thereafter, he provided a further ten releases to Leggo. Those releases were provided under cover of the letter by the defendant dated 1 June 2010. It is important to bear in mind that the defendant was not, then, obliged to provide the fifty releases. As the defendant stated in evidence, he could instead, have attended each settlement, and produced an ASIC release at that time. Alternatively, he could have provided ASIC releases on a settlement by settlement basis. Obviously, it was more convenient both for himself, and for Ascot Vale, to provide the releases in the manner in which he did in early June. Indeed, the defendant departed for overseas on 7 June, and was absent for some time. However, in providing the releases, in advance at the time on which he was obliged to do so, the defendant imposed a number of conditions, which he considered to be binding.

106 The defendant, in his evidence, stated that he considered that he had provided the releases to Leggo, as a partner of Trumble Szanto, and that Leggo received them in his capacity as the solicitor acting on behalf of Ascot Vale in the settlement of the apartments. That proposition is supported by the letter, under cover of which the defendant provided those releases, which was sent to Leggo, care of Trumble Szanto. In his evidence, and indeed in his correspondence, the plaintiff did not accept that Leggo had received the ASIC releases in his capacity as a solicitor, and as a member of the firm Trumble Szanto; rather, the plaintiff considered that Leggo received the ASIC releases in his capacity as the director of Ascot Vale. It is not necessary for me to determine that issue. However, what is relevant is that the defendant considered that he provided the releases to Leggo in the latter's capacity as a solicitor and as a member of the firm Trumble Szanto. Thus, the defendant subsequently considered that, when the plaintiff took over the conveyancing files from Leggo, he was bound by the terms, which were contained in his letter to Leggo dated 1 June 2010.

107 From early June 2010, a number of disputes arose between the defendant and Leggo concerning the settlement of sales of the apartments in the development. Those disputes were evident from the 58 page bundle of documents, which the defendant forwarded to the plaintiff on 27 July. In the correspondence, the defendant expressed the view that Leggo was conflicted in acting as solicitor for the vendor (Ascot Vale), while at the same time being the director of Nom De Plume. He also expressed concern as to the failure of Leggo to comply with the terms, upon which the ASIC releases had been provided to him. In addition, the defendant raised questions concerning the payment of rebates to Hughes Kennedy. Ultimately, on 18 June, the defendant wrote a letter to Leggo, asserting that Leggo had breached the terms of the provision of the ASIC releases, by continuing to provide those releases to purchasers, without providing the information, which was required by Fingal. The defendant stated that, in order to continue to provide the ASIC releases, the outstanding information was required to be provided to his office forthwith. The letter concluded with the defendant stating that " ... my failure to withdraw my consent to provide ASIC releases is not to be construed that I have consented or waived any requirement previously given to you which are formally repeated".

108 The disputes between the defendant and Leggo culminated in the appointment by Fingal of Messrs Horne & Vrsecky as receivers of Ascot Vale's assets on 21 June. It was followed by the appointment by Nom De Plume of Fernandez as receiver of Ascot Vale on the next day. Those appointments did not lead to a resolution of the issues between the parties. Disputes arose between the receivers. The matter was brought to the Federal Court on 1 July, and the consent orders, to which I have earlier referred, were made on that day. Those orders were designed to define the manner, in which the settlement of the apartments in the development were to proceed.

109 By that stage, Mr Sinisgalli was acting in respect of the commercial issues involving Fernandez. In that capacity, Sinisgalli acted for Mr Fernandez in the proceedings issued by him in the Federal Court. Ms Armstrong was acting on behalf of Lawler Draper Dillon, in the Federal Court proceedings, and in the issues which related to those proceedings. Mr Brown was acting for Fingal. Initially, he had been engaged to provide advice concerning the validity of the charge which Fingal had over Ascot Vale. However, in his evidence he stated that he was also engaged to act for Fingal in the Federal Court proceeding and in the matters which occurred subsequent to it.

110 Following the consent orders of 1 July, further problems emerged. Those issues related particularly to the failure of Mr Fernandez to provide the appropriate accounting information to Fingal and to Lawler Draper Dillon, in order to enable them to ascertain whether the Nom De Plume debt had been discharged from the settlements of the sales of the apartments. A particular point of contention between the parties concerned the payment of rebates to Hughes Kennedy. Accordingly, Ms Armstrong, on behalf of Lawler Draper Dillon, wrote a letter to Mr Sinisgalli on 8 July. In that letter, she stated that, according to her clients' calculations, the secured debt owed to Nom De Plume had been paid in full. Ms Armstrong also took issue with the service of rescission notices by Mr Fernandez without consultation with Lawler Draper Dillon. In her evidence, Ms Armstrong stated that the concern of her clients was that the service of those notices would delay, rather than enhance, the payment out of any monies owing to Nom De Plume, and would thus operate to the detriment of Fingal.

111 In the following weeks, those matters brought the parties back to the Federal Court. Ms Armstrong was uncertain, in her evidence, as to the precise orders which were made. The salient fact, however, is that Ms Armstrong and Mr Sinisgalli, on behalf of their clients, were, understandably, involved in the issues which lay in dispute between their respective clients, and in particular issues which affected the settlement of the sales of the apartments.

112 It was in this context that the defendant, on 27 July, made his first demand of the plaintiff for the return of the ASIC releases. In the following ten days, he made six further such requests. The defendant held the view - whether rightly or wrongly - that he was entitled to demand return of those releases. He also held the view - whether rightly or wrongly - that the plaintiff was bound by the terms of the letter, which he had sent to Leggo on 1 June, and, thus, that the plaintiff was not permitted to continue to use the ASIC releases without his consent. The defendant's demand for return of the ASIC releases did not take place in a vacuum, but, rather, in the context of the disputes, to which I have just referred. As the defendant explained, he was concerned not to permit Fernandez, and those representing him, to have a "carte blanche" at settlement; rather, the defendant wished to be in a position to require the provision to himself, and to Lawler Draper Dillon, of the requisite information, before he would provide a release for the settlement of the sale of an apartment in the development.

113 It was in this context that the issue relating to the use of the ASIC releases, for the settlement of the sale of Apartment 113, arose. On 3 August 2010, the defendant sent to the plaintiff a letter (by facsimile and by post), noting that the settlement of the sale of Apartment 113 was scheduled for that day, and stating that the plaintiff was not authorised to hand over any ASIC release in connection with any settlement, including Apartment 113. The defendant copied that letter to Mr Jason Stone of Lawler Draper Dillon. On the same day, Mr Stone sent an email to Mr Subra (of Fernandez Partners) concerning aspects of the settlement of Apartment 113. In that email Mr Stone noted to Mr Subra that he would need to separately obtain the ASIC Form 312 from Fingal, and that the form would not be provided until all ASIC releases for the remaining apartments were returned to Fingal by Trumble Szanto. That email demonstrates that the issue relating to the ASIC releases was not confined to a dispute between the plaintiff and the defendant, but also, understandably, involved the two sets of receivers. On 4 August, the defendant sent a further letter to the plaintiff noting that the ASIC releases had not been returned, stating that the plaintiff was not to settle any apartments using the releases, and noting that an attempt had been made to settle Apartment 113 without reference to the defendant. That letter was, again, copied to Mr Stone.

114 In response, the defendant received the letter from the plaintiff dated 4 August, to which I have earlier referred. The defendant responded by a letter dated 6 August (sent by post and facsimile) restating the terms upon which he maintained that the ASIC releases had been provided. The defendant copied that letter to Mr Sinisgalli and to Mr Stone (as well as to Mr Leggo).

115 In the meantime, at 7.30 am on that day, Ms Armstrong sent an email to Mr Sinisgalli (responding to a query by Mr Sinisgalli on the previous day), stating that Messrs Horne & Vrsecky were agreeable to Apartment 113 settling, provided that the terms of the Federal Court orders were complied with. She stated that her clients' consent was subject to the provision to her clients of an up to date settlement statement and statement of adjustments, and of written confirmation that any alleged rebate (to Hughes Kennedy) would be held on trust by Mr Kennedy. Ms Armstrong copied that email to Mr Brown.

116 Later on the same day, Ms Armstrong sent an email to Mr Sinisgalli (copied to Mr Brown) requesting information as to what had occurred relating to the settlement of Apartment 113, and noting that, in accordance with the Federal Court orders, Mr Fernandez was required to provide Lawler Draper Dillon with certain documents for approval 24 hours before settlement. One hour later, she sent a further email to Mr Sinisgalli (copied to Mr Brown) noting that she had then ascertained that settlement of Apartment 113 had taken place. She concluded stating "For the record, your client has failed to comply with the terms of the consent orders agreed in early July 2010".

117 Thus, at the time at which the plaintiff, as the solicitor for the vendor, settled the sale of Apartment 113, the defendant had asserted to the plaintiff, to Lawler Draper Dillon (care of Mr Stone) and to Mr Sinisgalli (the solicitor for Fernandez) that the plaintiff was not entitled to use the ASIC release, previously provided to Leggo, for the purposes of that transaction. At the same time, Ms Armstrong was in communication with Mr Sinisgalli concerning the settlement, and particularly concerning the issue whether Fernandez had complied with the Federal Court orders made on 1 July. Three days before settlement, Mr Stone had informed Mr Subra (of Fernandez Partners) that he would need to separately obtain an ASIC Form 312, which would not be provided until all the releases, previously provided, were returned.

118 On 12 August, the issue of the ASIC releases was further agitated between the receivers, in correspondence which was copied to the defendant, to Mr Brown and to Ms Armstrong. At 11.09 am Mr Subra sent to Mr Stone an email (responding to Mr Stone's email of 3 August regarding the releases), noting that he had not seen, or been provided with, any correspondence evidencing that the releases were conditional. That correspondence was copied by Mr Stone to the defendant and to Ms Armstrong at 11.12 am. Mr Stone responded to Mr Subra by an email at 4.59 pm (copied to the defendant and to Mr Brown) noting that Mr Subra had not apparently been privy to the correspondence between Fingal and Trumble Szanto, and attaching correspondence in relation to the ASIC releases. Mr Stone then stated:

"The matter of the ASIC releases is not an item that we intend to deal with as receivers and managers. Please note that my email of 3 August 2010 was simply bringing the issue to your attention. As such, I have forwarded your email to Fingal and its solicitors, I assume they will respond in due course."

119 Mr Lapirow relied on the section from Mr Stone's email, which I have just quoted, in support of the proposition that Lawler Draper Dillon were not interested in the issue relating to the ASIC releases. In my view, that quoted section does not bear out the conclusion contended for by Mr Lapirow. Rather, it is clear that Mr Stone was asserting that the issue was to be dealt with by the solicitors, rather than by the receivers themselves. That proposition is not inconsistent with the proposition that, nonetheless, the receivers had a relevant interest in the use of the ASIC releases, and in particular in the role which the use of those ASIC releases played in the settlement of Apartment 113.

120 It is clear, from the foregoing, that the defendant had an interest in the matters which were stated by him in his letter of 13 August 2010. Since 27 July, he had been asserting the right to return to him (as a director of Fingal) of the ASIC releases. He had maintained that the plaintiff did not have any right to use the releases from that date, and, specifically, the plaintiff was not entitled to use the ASIC releases to settle Apartment 113. The defendant had an interest in the use of the ASIC releases by the plaintiff to settle Apartment 113. The fact that that settlement had taken place did not detract from the existence of the interest in the defendant in the subject matter of the letter. As the person who had been responsible for providing the ASIC releases to Leggo, and who had been demanding the return of those releases from the plaintiff, the defendant had, in my view, an undeniable interest in expressing his views about the use of those releases by the plaintiff to effectuate the settlement of Apartment 113. Indeed, Mr Lapirow did not seek to contend to the contrary.

121 Nor did Mr Lapirow contend that Mr Brown did not have a relevant interest to receive the letter of 13 August. The ASIC releases were provided to Leggo by the defendant, in his capacity as a director of Fingal. The documents were releases by Fingal of its rights, under the charge given to it by Ascot Vale, over the apartments in the Ascot Vale development. By using such a document for the purposes of settling the sale of Apartment 113, the plaintiff gave a release to the purchaser of the rights of Fingal, under its security, in respect of that property. In those circumstances, it is clear that Mr Brown, as the solicitor for Fingal, had a common interest, with the plaintiff, to receive the letter dated 13 August.

122 I also consider that, contrary to the submission made by Mr Lapirow, the issues relating to the ASIC releases were matters which were relevant to, and affected, Mr Fernandez, and thus which were relevant to Mr Sinisgalli, in his capacity as the solicitor for Mr Fernandez. Although the vendor in respect of the sale of the apartments was Ascot Vale, by the terms of the Federal Court order made on 1 July 2010, Mr Fernandez controlled and conducted the settlements of those sales. The releases, provided by the defendant, were essential documents to enable the settlements to complete. The question whether Mr Fernandez, and his advisers, were entitled to use the ASIC releases, was, clearly a matter which fell within the requisite "interest" of Mr Fernandez. Mr Sinisgalli was at all times acting in respect of the commercial disputes involving Mr Fernandez. He had acted for Mr Fernandez in the Federal Court proceedings, and, as the correspondence to which I have referred reveals, he was involved in the various disputes which continued to arise between the parties. The question of the entitlement of Mr Fernandez to conduct the settlement of Apartment 113, using the ASIC dispute, was a matter in which Mr Sinisgalli, as his solicitor, was relevantly interested. Indeed, as the correspondence to which I have referred reveals, Mr Sinisgalli was a recipient of the letter written by the defendant, on 6 August, disputing the right of the plaintiff to use the ASIC releases.

123 I am also of the view that Ms Armstrong had a relevant interest in the subject matter of the defendant's letter of 13 August. The receivers for whom she acted, Messrs Horne & Vrsecky, had a clear interest in the issues relating to the settlement of apartments in the development. In particular, those receivers were concerned to ensure that the requirements, specified in the Federal Court orders, had been complied with, so that the interests of Fingal, as the security holder, were properly respected. The use by the plaintiff of the ASIC releases was integral to the completion of the settlement of the sales of the apartments. The correspondence, to which I have referred, demonstrates that Ms Armstrong was concerned with protecting the rights of the receivers in the settlements, which were being undertaken by Fernandez. In particular, the correspondence between Ms Armstrong and Mr Sinisgalli on 6 August demonstrates that Ms Armstrong was involved in agitating issues, which were necessary to be resolved before settlement of Apartment 113 took place.

124 Mr Lapirow contended that the issue, relating to the use of the releases, was not a matter about which Horne & Vrsecky were concerned. As I have stated, I do not accept Mr Lapirow's interpretation of the email by Jason Stone to Mr Subra on 12 August. On the contrary, the issue, relating to use of those releases, was closely connected with the issues relating to whether Mr Fernandez had properly complied with the provisions of the Federal Court order in effectuating the sales of the apartments, including Apartment 113. Accordingly, in my view, Ms Armstrong had a relevant interest in the subject matter of the defendant's letter of 13 August.

125 Mr Lapirow's submissions, on the issue of qualified privilege, focused on the question whether Mr Sinisgalli and Ms Armstrong each had a relevant interest in the issue relating to the use by the plaintiff of the ASIC releases in the settlement of sales of apartments at the Ascot Vale development. As I stated, I consider that each of the three recipients of the letter had a relevant interest in that matter. Mr Lapirow did not submit that the parts of the letter, which defamed the plaintiff, were not sufficiently connected with that subject matter to come within the umbrella of the privilege. I consider that Mr Lapirow was correct in not seeking to advance any such submission. In the second sentence of the letter, the defendant noted, in three succeeding numbered points, the failure of the plaintiff to return the ASIC releases, the use of the ASIC release to complete the settlement of Apartment 113 despite the defendant's letter dated 6 August, and the fact that Mr Fernandez appeared to be unaware of the correspondence relating to the terms of the provision of the releases. The next two sentences, which defamed the plaintiff, relate specifically to the use by the plaintiff of the ASIC releases in those circumstances. They were, in my view, sufficiently connected with the central subject matter of the letter, to come within the scope of the occasion of qualified privilege, on which the letter was published.

126 Based on those matters, I conclude that the defendant did publish a letter to Mr Sinisgalli, Mr Brown and Ms Armstrong on an occasion of qualified privilege.

127 As I stated, Mr Lapirow submitted that the plaintiff was actuated by malice in publishing the letter of 13 August 2010 to Mr Sinisgalli, Mr Brown and Ms Armstrong.

128 He submitted that the purpose of the letter was to pressure the plaintiff not to proceed with the notices of rescission, which had been served in respect of the sale of apartments, in the development, to clients of the defendant, and also to the defendant himself.

129 Mr Lapirow relied on a number of matters, in order to make good that proposition. First, he submitted that, after the appointment of Mr Fernandez as the receiver of Ascot Vale on 22 June, Ascot Vale and the plaintiff no longer had any control over the distribution of the proceeds of the settlement of sales of the apartments. Mr Fernandez, as the receiver, was solely responsible for distribution of the funds received on settlement. Thus, he submitted, the defendant did not have any basis, upon which to express concern that Nom De Plume was exercising its rights to the detriment of Fingal. Further, he submitted that the defendant had not produced any correspondence, in which he had expressly raised the issue as to the manner in which Nom De Plume, or the receiver, was dealing with the proceeds of the settlement of the sales of the apartments. In any event, if there was a concern as to that matter, the receivers appointed by it (Messrs Horne & Vrsecky) had appropriate avenues of recourse, including pursuant to the consent order made by the Federal Court on 1 July.

130 Mr Lapirow also submitted that, pursuant to the ulterior purpose, the defendant embarked on a course of making unwarranted and unsubstantiated aspersions on the integrity and conduct of the plaintiff. He made repeated allegations in his correspondence that the plaintiff had a conflict of interest, which were allegations made without any proper foundation. Further, he made repeated allegations that the plaintiff was acting without instructions, notwithstanding the plaintiff's assertion that he did have such instructions from Mr Fernandez. Mr Lapirow submitted that the defendant did not have any proper reason not to accept the plaintiff's statement, that his client had given him instructions to serve the rescission notices.

131 In addition, Mr Lapirow pointed to the correspondence between the plaintiff and the defendant relating to the return of the ASIC releases. Mr Lapirow submitted that the plaintiff's first response, on 27 July, to the defendant's request for the releases, was perfectly reasonable. It was not for the plaintiff to search through the 58 pages of correspondence sent to him by way of facsimile. Rather, it was reasonable for him to request the defendant to provide, in clear and succinct terms, the basis upon which return of the releases was sought. Notwithstanding that request by the plaintiff, the defendant, in the ensuing correspondence, failed to specify the basis, upon which he claimed to have a right to return the ASIC releases. Instead, on the same day, 27 July, the defendant sent to the plaintiff three letters, relating to the rescission notices served in respect of Apartments 301, 307 and G 06 respectively. In those letters, the defendant made allegations that the plaintiff was acting without instructions, and with a conflict of interest. Each letter concluded in threatening terms: requiring the plaintiff to withdraw the notices of rescission, and to acknowledge that they had been served in error and without instruction; placing the plaintiff on notice that his firm's files and his trust records and other word processing records were to remain intact; and advising that the letter would be used "in connection with costs in any proceedings".

132 Mr Lapirow submitted that each of the foregoing matters indicated a strategy, upon which the defendant was embarked, namely, to intimidate the plaintiff from proceeding with the notices of rescission, which had been served in respect of apartments purchased by clients of the defendant, and by the defendant.

133 In response, Ms Schoff submitted that I should not be satisfied that, in publishing the letter, the defendant was actuated by the ulterior motive alleged by the plaintiff. In cross-examination, the defendant had denied that that was his purpose. He maintained that he wrote the letter as part of his concern to obtain return of the ASIC releases, so that he could thereby protect the legitimate rights of Fingal on the settlement of the sales of the apartments. Ms Schoff also pointed to the evidence of Ms Armstrong, as supporting the testimony of the defendant that there was a live issue between the parties as to the distribution of the proceeds of the settlement of sales of the apartments. That issue was the subject of the Federal Court orders made on 1 July. Ms Armstrong gave evidence that, subsequently, there were ongoing concerns as to whether those orders were being complied with.

134 The question, which I must determine, is whether I am satisfied, on the balance of probabilities, that the defendant was actuated by an ulterior purpose in publishing the letter dated 13 August 2010 to Mr Sinisgalli, Mr Brown and Ms Armstrong. The onus of proving that improper or ulterior motive lies on the plaintiff.[20] Thus, to overcome the defence of qualified privilege, the plaintiff must satisfy me, on the evidence, that the dominant purpose of the defendant, in publishing the letter to Mr Sinisgalli, Mr Brown and Ms Armstrong, was to intimidate the plaintiff not to persist with the rescission notices served by him.

135 In considering whether the plaintiff has discharged that onus of proof, it is relevant to note, first, that it was not suggested that the defendant did not honestly hold the views expressed by him, in the letter, about the plaintiff's conduct, namely, that the plaintiff had acted in conscious breach of his duties as a solicitor, and that he was acting illegally in retaining the ASIC releases. Indeed, in cross-examination, Mr Lapirow put to the plaintiff that the reason why he had refused, subsequently, to retract those allegations, was because he believed that what he had said was true. Of course, a positive belief in the truth of what is published on a privileged occasion may not be sufficient to negate express malice, if it can be proven that the defendant misused the occasion for an ulterior purpose. However, the absence of proof that the defendant did not believe, that what he wrote was true, makes it less probable that the defendant was, in fact, actuated by a dishonest purpose in writing the letter. In Horrocks v Lowe[21], Lord Diplock stated:

"Judges and juries should, however be very slow to draw the inference that a defendant was so far actuated by improper motives as to deprive him of the protection of the privilege unless they are satisfied that he did not believe that what he said or wrote was true or that he was indifferent to its truth or falsity. The motives with which human beings act are mixed. ... Qualified privilege would be illusory, and the public interest that it is meant to serve defeated, if the protection which it affords were lost merely because a person, although acting in compliance with the duty and in protection of a legitimate interest, disliked the person whom he defamed or was indignant at what he believed to be that person's conduct and welcome the opportunity of exposing it. It is only where his desire to comply with the relevant duty or to protect the relevant interest plays no significant part in his motives for publishing what he believes to be true that 'express malice' can be properly found."

136 As I have noted, the defendant, in his evidence, specifically denied that there was any relevant link between, on the one hand, the issues which he was raising about the return of the ASIC releases, and, on the other hand, the matters which he was agitating about the rescission notices which had been served on his clients and on himself. The defendant swore in evidence that those issues were part of a number of matters, which were in contention between the parties at the particular time.

137 Further, as I have noted, there is independent evidence that there were issues between the two sets of receivers, particularly concerning the application of the proceeds of the settlement of sales effected by Mr Fernandez and his advisers. Ms Armstrong's evidence, which was not challenged in cross-examination, was that there was a particular issue between the parties relating to the payment of certain expenses by Mr Fernandez, which should have been treated as unsecured debts of Ascot Vale. The discharge by Mr Fernandez of those liabilities, in priority to the debt owed to the secured creditor Fingal, clearly was an issue which was of concern, not only to the defendant, but also to Mr Brown, acting for Fingal, and to Ms Armstrong, who was acting for the receivers appointed by Fingal. The control of the ASIC releases, at settlement, was directly relevant to the capacity of those representing the interests of Fingal to have some effective say in the distribution of the proceeds of the settlement of those sales. In other words, the issues relating to the ASIC releases were directly material to the issues which were in contention between the respective parties.

138 Furthermore, the plaintiff has not been able to point to any particular piece of evidence in which the defendant sought to use the issues, which he was raising concerning the ASIC releases, as a "bargaining chip", in order to avoid the effect of the rescission notices. The plaintiff did not point to any express statement by the defendant, whether in writing or orally, in which the defendant, even implicitly, sought to use the issues, which he was raising concerning the ASIC releases, as a means by which to dissuade the plaintiff from proceeding with the rescission notices.

139 Thus, the plaintiff relies on a process of inference, in order to sustain the allegation that the dominant purpose of the defendant, in writing the letter of 13 August, was to intimidate the plaintiff in respect of the rescission notices served by him. In order to achieve that level of persuasion, the plaintiff must demonstrate that the conclusion, for which he contends, is a conclusion which may be drawn by way of logical inference, rather than speculation. Further, he must satisfy me that the inference, for which he contends, is the more probable inference available on the evidence.[22] As Lord Diplock noted in the passage, to which I have just referred in Horrocks v Lowe, the court should exercise caution in determining it is satisfied that the more probable inference, in all the circumstances, is that the defendant misused the privileged occasion for the purposes of vindicating an improper motive.

140 Based on those principles, I am not satisfied that the more probable inference, on the evidence, is that the defendant made the allegations contained in the letter of 13 August for the ulterior purpose alleged by the plaintiff. In particular, I do not consider that the matters, pointed to by Mr Lapirow, are sufficient to justify a conclusion, on the balance of probabilities, that the defendant, in writing the letter, was seeking to advance an improper purpose, namely, to intimidate the plaintiff from proceeding with the rescission notices.

141 The letters, which the defendant wrote to the plaintiff in late July, and early August, concerning the rescission notices, were expressed in strong terms. They each raised a number of matters concerning the validity of the rescission notices, which had been served on the defendant's clients and on the defendant. In writing the letters, the defendant maintained what might be fairly described as a "combative stance" towards the plaintiff, particularly in contending that the plaintiff had acted without instructions, and that he was affected by a conflict of interest. It is not for me to determine, in this case, whether either of those allegations were justified. However, I do accept that the allegations were honestly made by the defendant. While the terms, in which they were expressed to the plaintiff, were somewhat intemperate, nevertheless, I accept that they were made in the context of a bona fide dispute as to whether the rescission notices were valid. In particular, in this respect, I note Ms Armstrong's evidence, that her clients considered that it was more favourable, from the point of view of Fingal, that the contracts, to which the rescission notices related, should be completed, rather than that the contracts be rescinded, and the apartments re-sold.

142 Further, I am satisfied that there was also a bona fide dispute between the parties concerning the entitlement of the plaintiff to use the ASIC releases, which had been provided to Mr Leggo by the defendant in early June 2010. That dispute had been foreshadowed by the earlier letter by the defendant to Leggo on 18 June. It remained in abeyance for some time, as the defendant expected that the issues, which he sought to address by raising the ASIC releases, would be determined by reference to the Federal Court proceedings. Nevertheless, the defendant did, I consider, genuinely believe that he had a right to seek the return to himself of the ASIC releases, in late July 2010.

143 Equally, it may be observed that the plaintiff did not consider that the defendant had such a right. The defendant did not assist the resolution of the debate, when he failed to identify precisely to the plaintiff the basis upon which he claimed the releases should be retuned to him. However, I do not consider that the defendant's failure to clarify that issue is evidence of any lack of belief by the defendant that he had a right to the return of the releases. On the contrary, it would seem that the defendant, at that time, considered that the issue was clear cut. The ASIC releases had been provided to Leggo, in advance of the time, at which the defendant was obliged to make them available for the settlement of the sale of the apartments. The defendant considered that the terms, upon which the releases had been provided to Leggo, had been breached. In particular, Ms Armstrong stated, in her evidence, that, during July 2010, the Federal Court orders made on 1 July were not being complied with. For that reason the matter was taken back to court later in July. It was that dispute which motivated the defendant to seek return of the ASIC releases. In particular, the defendant stated, in cross-examination, that his concern was to ensure that monies, which were received from the sale of the apartments, were paid in the right order of priority, and that they were not disbursed in payment of expenses which were unsecured debts of Ascot Vale.

144 Thus, the issues, which were advanced by the defendant in relation to the ASIC releases, were genuine issues. He repeatedly asked the plaintiff to return the releases to him. The last such demand was made on the day on which the sale of Apartment 113 was settled. I accept that the defendant was genuinely aggrieved by the fact that the plaintiff settled that apartment using the ASIC release, which he had previously provided to Leggo. While, as I have stated, it is not for me to determine whether the defendant's grievance was, as a matter of law, justified, nevertheless it was, in my view, genuine.

145 The matters, to which I have just referred, are insurmountable obstacles to the drawing of the inference, contended for by the plaintiff, namely, that the defendant was actuated by an improper purpose in publishing the letter of 13 August to Mr Sinisgalli, Mr Brown and Ms Armstrong. As I stated, the defendant denied that that was his purpose. I regarded each of the witnesses, who gave evidence before me, including the defendant, as honest witnesses. I do not consider that the matters, on which Mr Lapirow relied, are sufficient to persuade me that the defendant's denial of an improper purpose should be rejected by me.

146 Based on those matters, I am not satisfied that the defendant published the letter of 13 August to Mr Sinisgalli, Mr Brown and Ms Armstrong with malice. It follows that the letter was published to each of those recipients on an occasion of privilege. On that basis, the plaintiff's claim for damages for defamation, for publication of the letter to those three recipients, should fail.

147 The defendant also relied on a defence of qualified privilege, pursuant to s 30 of the Defamation Act 2005 (Vic). In final address, most of Ms Schoff's submissions focused on the common law privilege. In light of the conclusion, which I have reached concerning the application of that privilege, it is only necessary for me to briefly express my views on the alternative statutory privilege.

148 I have already concluded that I am satisfied that Mr Sinisgalli, Mr Brown and Ms Armstrong each had an interest in receiving the information contained in the letter. Thus, the requirements of s 30(1)(a) are satisfied. Further, I would, in any event, be satisfied that each of those three recipients had an "apparent" interest in having information on the subject matter contained in the letter. In cross-examination, the defendant stated that he considered that each of the three recipients had an interest in the matters which he related in the letter. Further, I am satisfied that the matter was published to those three recipients in the course of giving them information on that subject matter. It follows that the requirements of subsection 30(1)(b) are also satisfied.

149 The third requirement of the statutory privilege is that specified in s 30(1)(c), namely, that the conduct of the defendant, in publishing the matter, is reasonable in the circumstances. If it were necessary, I would be satisfied that the defendant's conduct, in publishing the matter to the three recipients, was reasonable in the circumstances. The letter was published to three practitioners, each of whom were acting for parties involved in the disputes relating to the sale of the Ascot Vale apartments. The letter set out, in point form, the three facts on which the defendant relied for the conclusions expressed by him about the conduct of the plaintiff. The first two facts were matters of which the defendant had direct first hand knowledge. The third fact had been related to the defendant by Mr Stone of Lawler Draper Dillon. The defendant was entitled to rely on Mr Stone's account of that matter to him. Notwithstanding the serious nature of the allegation made by the defendant about the plaintiff, I would nevertheless be satisfied that the defendant's conduct, in publishing the matter, was reasonable for the purposes of s 30(1)(c) of the Defamation Act. It follows that I would therefore uphold the statutory defence of qualified privilege.

Publication of letter to Mr Rule and Mr Magna: whether covered by qualified privilege

150 I have already held that the defendant is liable for the publication of the letter, not only to the three named recipients of it, but also to Mr Rule and to Mr Magna. In my view, the publication of the letter to those two solicitors occurred on an occasion of qualified privilege, which is commonly referred to as "ancillary" or "derivative" privilege.[23] Indeed, Mr Lapirow did not seek to contend that, if I upheld the defence of qualified privilege in respect of the publication of the letter to Mr Sinisgalli, Mr Brown and Ms Armstrong, I should nonetheless find that the letter was not published on a privileged occasion to Mr Rule and to Mr Magna.

151 In my view, it is clear that the publication of the letter to Mr Rule was an incident of the transmission of the letter by the defendant to the plaintiff in the ordinary course of business. Mr Rule's role, in gathering the letter from the trolley attached to the facsimile machine, and conveying to the plaintiff's office, was necessarily incidental, or ancillary, to the transmission of the letter by the defendant to the plaintiff.

152 In a different manner, I also consider that the publication of the letter to Mr Magna would be either covered by ancillary privilege, or indeed original privilege. Mr Magna was acting as a supervising partner of Hall & Wilcox in respect of the matters in relation to which Mr Brown was acting on behalf of Fingal. As such, the privilege, which attached to the publication of the letter to Mr Brown, would, in my view, equally apply to the publication of it to Mr Magna. As I stated, Mr Lapirow did not contend to the contrary.

Defence of triviality: s 33 of Defamation Act 2005

153 The defendant also relied on a defence under s 33 of the Defamation Act 2005 (Vic), which is commonly referred to as the defence of "triviality". That section provides:

"It is a defence to the publication of defamatory matter if the defendant proves that the circumstances of publication were such that the plaintiff was unlikely to sustain any harm."

154 Section 33 is in similar terms to s 13 of the New South Wales Defamation Act 1974, which provided:

"It is a defence that the circumstances of the publication of the matter complained of were such that the person defined was not likely to suffer harm."

155 That provision has been the subject of a number of decisions in New South Wales. In Chappell v Mirror Newspapers Ltd[24], the defendant conducted its case on the basis that the plaintiff had a debased reputation, and that, accordingly, he was unlikely to suffer further harm as a consequence of its publication. The trial judge left the defence to the jury on that basis. The plaintiff successfully appealed the verdict of the jury. The New South Wales Court of Appeal held that the phrase "the circumstances of the publication" did not encompass the nature of the antecedent reputation of the plaintiff. In reaching that conclusion, Moffitt P (with whom Samuels JA and Priestley JA agreed) analysed the effect of s 13 in a passage which merits careful examination. The following points, about the provision, were made by his Honour:[25]

(1) The defence is directed entirely to the circumstances of the publication.

(2) In particular, the central issue concerns the "... quality of the publication in respect of its proneness to cause harm". The inquiry is directed to the moment of publication. "Actionability does not depend upon an inquiry as to what thereafter happens and in particular whether or not harm in fact probably resulted from the publication".

(3) It is important that full force be given to the words "the circumstances of the publication". There should not be substituted an inquiry whether "in all the circumstances" the plaintiff would probably not suffer harm.

(4) The content of "circumstances of the publication" must admit of some context, but only such context as would serve to define the circumstances of the publication, and their relevant operation in relation to the likelihood of harm.

(5) "Publication" is the act of communication, by which the defamatory imputation is conveyed to a recipient of it. Thus, the "circumstances of the publication" include any special circumstances of the recipient, such as his or her relationship to the defamed party.

156 The approach of the Court of Appeal in Chappell was referred to, with apparent approval, in the subsequent decisions of the New South Wales Court of Appeal in King & Mergen Holdings Pty Ltd v McKenzie[26] and Jones v Sutton[27].

157 Two further points about s 33 should be noted. First, in order to sustain the defence, the defendant must prove that the circumstances were such that the plaintiff was unlikely to suffer "any" harm. Such an onus is, self-evidently, a high onus[28]. Secondly, the defendant must prove that, such were the circumstances of the publication, that the plaintiff was "unlikely" to sustain any harm. In Jones v Sutton[29], Beasley JA (with whom Santow JA and Stein AJA agreed) held that the phrase "not likely to cause harm" refers to "the absence of a real chance" or the "absence of a real possibility" of harm.

158 There was some debate as to whether the phrase "any harm", in s 33, includes injury to feelings, as distinct from damage to reputation. Ms Schoff contended that those words only refer to damage to reputation. In particular, she referred me to a passage in the judgment of Beasley JA in Jones v Sutton[30], in which her Honour stated:

"Whether or not a person's feelings were hurt ... is not relevant to s 13. That is a matter for damages."

159 Ms Schoff submitted that it is damage to reputation which underpins the tort of defamation, and not the insult.[31] Further, Ms Schoff pointed to the use of the term "harm" in s 11(3) of the Act, which provides that, in determining the Australian jurisdictional area with which the "harm" occasioned by a publication has its closest connection, a court may take into account, by subsection (c), the "extent of harm" sustained by the plaintiff in each relevant Australian jurisdictional area. She submitted that, in that context, "harm" must refer only to harm to reputation, since harm to feelings would not differ across various jurisdictions.

160 On the other hand, Mr Lapirow submitted that "harm", in s 33, should be construed to encompass all the injury which a plaintiff may sustain as a result of defamatory matter published about him or her, which includes injury to feelings arising as a result of the dissemination of the defamatory matter.

161 The correct construction of the term "harm" in s 33 is not without difficulty. The use of the same word, in s 34 and in s 36, supports the view that the word "harm" encompasses both injury to reputation and injury to feelings. Indeed, the use of the word "harm", in s 33, may be contrasted with the specific reference to the requirement, in s 26, in respect of the defence of contextual truth, that the defamatory imputations do not further "harm the reputation" of the plaintiff, because of the substantial truth of the contextual imputations.

162 On the other hand, as Ms Schoff submitted, the essence of the tort of defamation concerns the publication of matter, which is likely to lower the reputation of the plaintiff in the eyes of right thinking members of the community. Thus, it is injury to reputation which lies at the heart of defamation. I also agree with Ms Schoff that the word "harm", in s 11(3)(c), could only refer to the injury to reputation. Further, if "harm" included injury to feelings, it would make s 33 virtually unworkable. For, it would be very difficult to realistically assess, at the time of publication, whether the circumstances of the publication were such that a plaintiff was unlikely to sustain any harm.

163 Finally, it is clear that, in Jones v Sutton, the New South Wales Court of Appeal regarded the word "harm" as confined to injury to reputation. In analysing the application of s 13 of the New South Wales Act in the circumstances of that case, Beasley JA focused solely on the propensity of the defamatory material to damage the plaintiff's reputation, as distinct from his feelings. The Defamation Act is now part of uniform legislation throughout the States and Territories. It is highly desirable that, so far as possible, there be a material consistency in the construction of its provisions.

164 Ultimately, it is not necessary for me to express a concluded view on this matter. For, I have come to the conclusion that, if the word "harm" is confined to damage to reputation, nevertheless the defendant would not make out the defence provided by s 33 of the Act.

165 On the one hand, there are a number of matters, pointed to by Ms Schoff, which would support the application of the defence under s 33. The letter was published to a confined audience. The letter expressly stated the factual premises, upon which the defamatory conclusion was based. The three solicitors, to whom the letter was published, were each seized with the background circumstances of the publication. Indeed, in evidence, Mr Brown and Ms Armstrong each stated that they did not consider that the letter lowered the reputation of the plaintiff in their eyes, because they saw the defamatory allegations, made in it, as part of the ongoing debate between the plaintiff and the defendant relating to the ASIC releases, and relating to other matters in issue between the parties.

166 On the other hand, however, the letter made allegations about the conduct of an experienced solicitor, who was an officer of the Supreme Court of Victoria. The allegations of conscious breaches of duty, and illegality, are, by their very nature, particularly serious. They are even more serious when made by one legal practitioner to three other legal practitioners about a colleague. The recipients of the letter - as practising solicitors - would understand, more significantly than a lay person, the grave implications of the allegations made by the defendant, and, in particular, the serious nature of the conduct ascribed to the plaintiff by the defendant. In those circumstances, I would not be persuaded that, at the time of the publication, the "circumstances of the publication were such that the plaintiff was unlikely to suffer any harm" as a result of the publication of the letter by the defendant to Mr Sinisgalli, Mr Brown and Ms Armstrong. For those reasons, I would reject the defence under s 33 of the Defamation Act, even if I were to hold that the word "harm" were confined to "injury to reputation".

167 The defendant also pleaded a defence under s 18 of the Defamation Act, namely that it had made an offer of amends to the plaintiff which was not accepted by the plaintiff. The defendant submitted that the offer made to the plaintiff, on 13 September 2010, was such an offer of amends.

168 In my view, the defence, under s 18, would not be available to the defendant in this case, for two reasons. First, s 14(1)(a) provides that an offer to make amends cannot be made, if 28 days have elapsed since the publisher was given a "concerns notice" by the aggrieved person. Section 14(2) provides that a notice is a "concerns notice", if it informs the publisher of the defamatory imputations, which the aggrieved person considers are, or may be, carried about the aggrieved person by the matter in question. Ms Schoff submitted that the plaintiff's letter to the defendant, dated 16 August, complaining of the defendant's letter of 13 August, was not a "concerns notice", because it did not inform the defendant of the imputations which the plaintiff considered were or might be carried about him. I do not agree. In my view, the last paragraph of that letter, which I have set out in paragraph 39 above, was sufficient to conform with the requirements of s 14(2) of the Act. Accordingly, the defendant made the letter of amends, in its letter of 30 September, more than 28 days after the plaintiff had provided to the defendant a "concerns notice". I also observe that, in order to rely on the defence of offer of amends, the defendant, under s 18(1)(a) must make the offer "as soon as practicable" after becoming aware that the matter is or may be defamatory. In light of the last paragraph of the plaintiff's letter dated 16 August, I do not consider that the offer, made by the defendant, on 30 September, was made "as soon as practicable" after the defendant became aware that the letter written by him on 13 August is or may be defamatory.

169 Secondly, I do not consider that the contents of the letter of 30 September constituted an offer to make amends, as required by Part 3 of the Act. Section 15(1)(d) provides that an offer to make amends must include an offer to publish, or join in publishing, a reasonable correction of the matter in question. The defendant's letter of 30 September did not contain any offer to correct, or retract, the defamatory imputations contained in his letter of 13 August. Ms Schoff submitted that that omission did not disqualify the letter from constituting an offer of amends. First, she submitted that it was not possible to offer a correction of the defamatory matter contained in the letter of 13 August, since that matter was an expression of opinion, rather than a statement of fact. Secondly, by reference to s 18(2)(a)(i) of the Act, Ms Schoff submitted that the publication of a correction was not appropriate in the context of a "private" defamation, which was only published to a limited audience.

170 I do not agree with either of the two submissions made by Ms Schoff. First, even accepting that the defamatory material contained in the letter of 13 August was an expression of opinion, nonetheless such an expression is capable of correction or retraction. Secondly, I do not accept that the requirement in s 15(1)(d) of the Act is limited to media publications. That requirement contains no such limitation. The reference to the "prominence" of the correction in s 18(2)(a)(i) does not necessitate the conclusion that the Act only requires the media to correct defamatory material previously published by it. In the present case, the defamatory material was in a prominent position in the defendant's letter. Any offer of amends, made by him, would have been required to contain a correction, which was given equivalent prominence in the context of the document in which it was contained.

171 For those reasons, I would reject the defence of offer of amends relied on by the defendant under s 18 of the Act.

172 In view of the conclusions which I have reached on the issue of liability, it is not necessary for me to consider in detail the issue of damages. However I should express briefly my views concerning the issues raised by the parties on the question of damages.

173 The letter of 13 August was published to a limited audience. Ms Armstrong and Mr Brown each gave evidence that, when they read the letter, they did not think less of the plaintiff. Mr Brown and Ms Armstrong stated that they regarded the defamatory statements contained in the letter as allegations made by one solicitor about another in the context of a difficult dispute, in which there were a number of strongly contested issues. Mr Brown considered that, in the background circumstances of the disputes, the plaintiff was being somewhat difficult, and the defendant was becoming frustrated. He regarded the letter as the product of the frustration of the defendant, and as being an extension of the heated correspondence between the parties.

174 I regarded Mr Brown and Ms Armstrong each as being entirely frank and credible witnesses. They both gave their evidence in a considered and thoughtful manner. I accept that, for the reasons which they stated, the letter did not diminish the plaintiff's standing in their esteem. Mr Rule, who also gave evidence in the case, when asked about the effect which the letter had on his view of the plaintiff, responded in terms which indicated that he, in fact, thought the less of the defendant for writing such a letter to a fellow practitioner. In re-examination, he stated that he had been taught that there was a proper manner in which solicitors should address each other, and that the letter breached any sense of discretion which was normally required of legal practitioners. He regarded the letter as being offensive and provocative.

175 Based on that evidence, while the allegations contained in the letter were particularly serious, I do not regard them as having occasioned any significant injury to the plaintiff's reputation.

176 On the other hand, the plaintiff gave evidence, which I accept, that, on reading the letter, he became particularly upset. He stated that, if the letter had been sent to him alone, he would have let the matter pass. However, he was outraged by the fact that the serious allegations contained in the letter were published by the defendant to colleagues in the legal profession, and he regarded that action as being both unnecessary and unjustified. The plaintiff explained that Herbert Geer and Hall & Wilcox are both law firms of substantial size, and he had no knowledge as to who would have seen the letter and read its contents. He also concerned about the publication of the letter to other members of the firm Hunt & Hunt. When the plaintiff gave that evidence, I observed that he was visibly and genuinely upset.

177 The plaintiff also stated that he did not regard the letter of 30 September as mitigating the injury which had been caused to him. He felt that the letter had been forced out of the defendant as a matter of legal exigency, and he did not regard it as a sincere apology. In addition, the defendant did not withdraw the defamatory allegations made in his letter of 13 August, which the plaintiff had requested of him.

178 Based on that evidence, I accept that the plaintiff has suffered, and indeed continues to suffer, substantial upset and distress as a result of the publication of the defamatory allegations by the defendant in the letter of 13 August. As I stated, I consider that the plaintiff's evidence, in that respect, was entirely genuine. It is quite understandable that a legal practitioner, of the plaintiff's experience and standing, should feel particularly hurt by the fact that such an allegation was published about him by another legal practitioner to three fellow members of the legal profession. I also accept that the letter of 30 September, and indeed the subsequent apology published by the defendant to Mr Sinisgalli, Mr Brown and Ms Armstrong on 4 November, did not sensibly diminish the plaintiff's genuine feelings of hurt and distress. The delay by the defendant in publishing those letters, the terms in which they were expressed, and the failure by him to withdraw his defamatory allegations, each detracted significantly from any palliative effect, which the apology, proffered by the defendant, might otherwise have had.

179 The plaintiff also pleaded a claim for aggravated damages. I do not regard the defendant's apologies as matters of aggravation. Rather, as I stated, I consider that they were significantly ineffectual in diminishing the subjective hurt suffered by the plaintiff. Indeed, the plaintiff did not give any evidence that those apologies aggravated his feelings of hurt. Accordingly, I would not award aggravated damages.

180 Bearing the foregoing matters in mind, if the plaintiff had succeeded on the issue of liability, I would have awarded him damages in the sum of $35,000, principally as a vindication of the plaintiff's hurt feelings, and also as reparation for any residual injury which may have been sustained to the plaintiff's reputation as a result of the publication of the letter.

181 I summarise the conclusions, which I have reached in this case, as follows:

(1) I accept that the defendant's letter dated 13 August 2010 was defamatory of the plaintiff, and that it bore each of the five imputations pleaded by the plaintiff.

(2) I am satisfied that the letter was published by the defendant on an occasion of qualified privilege, both at common law, and pursuant to s 30 of the Defamation Act 2005 (Vic).

(3) I am not satisfied that the defendant was actuated by malice in publishing the letter.

(4) Accordingly, the plaintiff's claim for damages for defamation in respect of the publication of the letter of 13 August must fail.

(5) If, contrary to that conclusion, I had upheld the plaintiff's claim:

(a) I would have rejected the defence based on s 33 of the Defamation Act.

(b) I would have rejected the defence of offer of amends under s 18 of the Defamation Act.

(c) I would have awarded the plaintiff damages in the sum of $35,000.

182 To those conclusions I should add the following, albeit by way of repetition of what I stated in paragraph 4 of these reasons. The allegations made by the defendant in his letter of 13 August 2010 were defamatory of the plaintiff, and, as such, they are presumed, at law, to be untrue. The defendant did not, in any way, seek to defend the allegations on the basis that they were true. The upshot of the case is that the defendant defamed the plaintiff to three members of the legal profession, and thereby impugned the reputation of an experienced and upstanding member of the legal profession. However, the defendant published those allegations on an occasion of qualified privilege. I am not satisfied that the defendant was actuated by any improper or ulterior motive in publishing those allegations. Thus, the defendant has a valid defence to the plaintiff's claim, based on qualified privilege. It is for that reason, alone, that the plaintiff's case against the defendant has failed.

[1] Morgan v Oldhams Press Ltd [1971] 1 WLR 1239, 1245; Lange v Australian Consolidated Press Ltd [1970] 2 NSWLR 408, 412.

[2] Speight v Gosnay (1891) 60 LJQB 231, 232 (Lopes LJ); Ratcliffe v Evans [1892] 2 QB 524, 530 (Bowen LJ); Sims v Rann [1984] 1 NSWLR 317, 320.

[3] (1834) 1 CrM and R 181, 193; [1834] EngR 363; 149 ER 1044, 1049-1050.

[4] McIntosh v Dun [1908] AC 390, 398 (Lord Macnaghten); Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; (2004) 218 CLR 366, 373 [9] (Gleeson CJ, Hayne and Heydon JJ).

[5] [1917] AC 309, 334.

[6] Howe & McColough v Lees [1910] HCA 67; (1910) 11 CLR 361, 368-369 (Griffith CJ), 396 to 8 (Higgins J).

[8] Bashford v Information Australia (Newsletters) Pty Ltd, above, 373 [10].

[9] Guise v Kouvelis [1947] HCA 13; (1947) 74 CLR 102, 116 (Dixon J); Bashford v Information Australia (Newsletters) Pty Ltd, above, 373 [10].

[10] [2004] HCA 5; (2004) 218 CLR 366.

[12] Footnote above, page 436 [196]; see also at page 417 to 421 [140]0[147] (Gummow J).

[14] (2011) 85 ALJR 865; [2011] HCA 30.

[15] 869, [17] (French CJ, Crennan and Keifel JJ).

[16] 871, [23]; see also page 875 [50] (Gummow, Hayne and Bell JJ).

[17] Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1, 30 302-31 [75]-[76] (Gaudron, McHugh and Gummow JJ); Cush v Dillon (above), 872 [28].

[18] Horrocks v Lowe [1975] AC 135, 149 (Lord Diplock); Roberts v Bass (above), 41 [104].

[19] Roberts v Bass (above) 31 [76], Cush v Dillon (above) 872 [29].

[20] Roberts v Bass (above) 38 to 39 [97].

[22] Holloway v McFeeters [1956] HCA 25; (1956) 94 CLR 470, 480 to 481 (Williams, Webb and Taylor JJ).

[23] Bryanston Finance Ltd v De Vries [1975] 1 QB 703, 727 (Lord Diplock), 736 (Lawton LJ); Bezant v Rausing [2007] EWHC 118, [74] (Grey J); Howe & McColough v Lees [1910] HCA 67; (1910) 11 CLR 361, 398 (Higgins J).

[24] (1984) Aust Torts Reports 80-691, page 68,942.

[26] (1991) 24 NSWLR 305, 310 (Mahoney JA).

[27] [2004] NSWCA 439; (2004) 61 NSWLR 614, 619 [16].

[28] King & Mergen Holdings v McKenzie, above, 310 (Mahoney JA).

[29] Footnote above, pages 624 to 5 [45]-[49].

[30] [2004] NSWCA 439, [38].

[31] Dow v Jones & Co v Gutnik (2002) 210 CLR 575, [25] (Gleeson CJ, McHugh, Gummow and Hayne JJ); Radio 2UE Sydney Pty Ltd v Chesterton [2009] HCA 16; (2009) 238 CLR 460, 476 to 477 [35]-[36] (French CJ, Gummow, Keifel and Bell JJ).