Plaintiff v Defendant

1 These proceedings arise out of the decision by the then Minister for Water, the Honourable Tim Holding MP, on 15 August 2008, pursuant to s 87(1) of the Water Act 1989 ("the Water Act"), that the defendant, Lower Murray Urban and Rural Water Corporation, be appointed to take over the whole of the functions, powers and duties of the First Mildura Irrigation Trust ("FMIT").

2 The four plaintiffs (Jim Belbin, Frank Di Masi, Don Marciano and Nancy Prevedello) were members of the Board of FMIT at the time of that decision. They have each brought a proceeding for damages for defamation arising out of the publication by the defendant, on its website, of a letter by the Minister for Water, which had been originally addressed to the former customers of FMIT. In response to those proceedings, the defendant has relied on three defences, namely, a defence under s 28 of the Defamation Act 2005 (Vic) ("the Defamation Act"), that the letter published by it was a fair comment of a public document issued by an officer of the government for the information of the public, secondly, a defence of qualified privilege pursuant to s 30 of the Act, and, thirdly, a defence of common law qualified privilege. In response to the third defence, the plaintiffs pleaded malice.

3 The trial of the proceedings took place before a jury. In each proceeding, the jury was asked to deliver verdicts in relation to thirteen questions. By its verdicts in respect of the two first questions, the jury upheld the plaintiffs' claims that they had been defamed by the publication of the letter in Victoria in the period of twelve months before the commencement of proceedings. By its verdicts in respect of Questions 3 to 12, the jury decided a number of disputed issues of fact, which are necessary for the determination by me of the question whether the defendant had made out the defences on which it relied. By its verdict on Question 13, the jury determined that the plaintiffs had established that the defendant had been actuated by malice in publishing the letter on its website.

4 For more than one century before its closure in 2008, the FMIT had played a central role in the foundation and development of Mildura and its surrounding districts. In the late 19th century, two Canadian brothers, George and Ben Chaffey, entered into an agreement with the government to establish an irrigation colony on the Murray River. For that purpose they founded the FMIT. The Trust was formally recognised by an Act of Parliament in 1895 (the Mildura Irrigation Trusts Act 1895). For the next 110 years, FMIT provided irrigation services in the Mildura area. A unique feature of the Trust was that its board of directors was elected by local irrigators, so that the Board was directly answerable to the community, and to the irrigators which it served. By the time of its closure in 2008, in the words of some witnesses in this case, FMIT had become established as an icon in the Mildura community.

5 At the time of its closure, there were six elected members of the Board of FMIT. Each year two members came up for election. In that way the Board members served in rotation. Mr Belbin and Mr Marciano were each first elected to the Board in 2003, and they commenced as members of the Board on 1 July 2003. Mr Belbin was chairman of the Board since that date. Mr Di Masi first joined the Board in 1988, and, except for the period 2004 to 2005, he remained on it until its closure. Mrs Prevedello was elected to the Board of FMIT in May 2008. She commenced to serve on the Board on 1 July 2008, and she attended her first Board meeting on the next day, 2 July.

6 In 2005, the Board of FMIT proposed to upgrade the Mildura South Channel, at an estimated cost of $2,000,000. It was then anticipated that the Trust would need to borrow approximately $3,000,000 to finance the works. Under s 243 of the Water Act, the Minister was entitled to give the Trust approval to borrow those funds. Nevertheless, in October 2006, the then Minister for Water, the Honourable John Thwaites MP, directed the FMIT that, in order to borrow the funds, it must apply to become an authority under the Borrowing and Investment Powers Act 1987 (Vic) ("BIP Act").

7 As a result, FMIT made an application, in November 2006, to the Department of Treasury and Finance, to borrow $3,000,000. It subsequently amended that application to enable it to borrow the sum of $4,700,000. In response to the application, the Department of Treasury and Finance ("DTF") required FMIT to adopt a Treasury Management Policy in accordance with guidelines provided by the department. Accordingly, at its meeting on 20 March 2007, the FMIT Board resolved to approve a draft Treasury Policy which was put before it.

8 By Order in Council dated 5 April 2007, the Governor in Council, pursuant to s 20 of the BIP Act, and on the recommendation of the Treasurer, approved FMIT investing its money in the manner described in the schedule to the order. In effect, the schedule approved deposits, or investments, with the Treasury Corporation Victoria ("TCV") and with any authorised deposit taking institution under the Banking Act 1959 (Cth).

9 At its meeting on 17 April 2007, the Board of FMIT resolved to draw down the credit facility, provided by TCV, in full. Accordingly, on 20 April 2007, it borrowed $4.7 million from TCV. Shortly after the funds were drawn down, the Finance Manager of FMIT invested $4.2 million of the borrowed funds with Grange Securities. At the next Board meeting, on 14 May 2007, the Board papers included a report of the Finance Manager (dated 30 April 2007). That report noted that the funds, borrowed from TCV, had been placed, in four investments, with Grange Securities. At the subsequent Board meeting, on 18 June 2007, the Finance Manager's report (dated 31 May 2007) disclosed that, of the funds borrowed from TCV, $4.2 million had been placed, in three investments, with Grange Securities. The evidence reveals that there was little, or no, discussion at either Board meeting, or any ensuing Board meeting, concerning those investments.

10 Grange Securities was an investment broker, which sourced investments on behalf of its clients. For a number of years before 2007, FMIT had placed funds with Grange Securities for the purpose of investment by Grange of those funds on behalf of the Trust.

11 In July 2007, FMIT withdrew $2,000,000 of the funds advanced to Grange Securities, for the purposes of paying an instalment on the works being undertaken on the Mildura South Channel. That withdrawal reduced the amount, placed by FMIT with Grange Securities, to $2.2 million.

12 In mid-August 2007, FMIT was made aware, by the Auditor-General, that Grange Securities had invested $1.5 million of its funds with Lehman Brothers Treasury Company "Federation AAA" CDOs (collateralised debt obligations), and $0.7 million in Zircon Finance Limited "Merimbula" CDOs. The Board learnt, at that time, that both investments had been adversely affected by the United States sub-prime mortgage market crisis. Having sought advice, the Board of FMIT determined to retain the investments, rather than to seek to realise them, and thus crystallise what, at that time, would have been a substantial loss on the investments.

13 Mr Holding became the Minister for Water in 2007. In November 2007, his Department advised him of the issues which had arisen as a result of the investment by FMIT with Grange Securities. In particular, those issues concerned the amount of loss to which FMIT might be exposed, and whether the investment was outside the authority given to FMIT under the BIP Act.

14 Accordingly, the Minister wrote a letter to Mr Belbin, the chairperson of FMIT, on 28 November 2007, seeking answers to five questions concerning the investment. Mr Belbin responded to that letter on the same day. Subsequently, on 8 March 2008, Mr Holding met with Mr Belbin, Mr Di Masi, and Mr Matheson, the managing director of FMIT, at the offices of FMIT in Mildura. At that meeting, he provided the representatives of FMIT with thirteen directions, which he intended to give to FMIT pursuant to s 307(1) of the Water Act.

15 FMIT responded to those directions, and Mr Belbin wrote a letter to Mr Holding dated 12 May 2008 advising him to that effect. In the meantime, FMIT wrote to the Departmental Secretary of the Department of Sustainability and Environment ("DSE"), seeking approval to access a $500,000 overdraft accommodation previously approved by the Treasurer, and also requesting an "additional financial accommodation" for $1,500,000 to meet ongoing business cash flow requirements. The additional financial accommodation, in fact, consisted of a rollover of $1.5 million of the monies advanced by TCV, which FMIT would otherwise have been required to repay to TCV.

16 In about late May 2008, Mr Holding decided to appoint Deloitte Touche Tohmatsu ("Deloitte"), to investigate and prepare a report on the commercial affairs of FMIT. Deloitte undertook that investigation, and submitted a report to the Minister dated 13 June 2008. The key findings of Deloitte were that the short-term, medium-term and long-term viability of FMIT was at risk. It found that the FMIT short term viability was at risk, without additional funding, because of factors such as revenue shortfalls, and also because of the impact of the Grange Securities investments. It found that FMIT's medium and long-term viability was at risk because of external factors, such as the ongoing drought, demographic shifts and urban encroachment, and increased trading of water entitlements out of the FMIT district.

17 In June 2008, the Board of FMIT approved changes to the employment contracts of four of its senior officers, namely, the business manager, the engineering services manager, the finance manager, and the managing director. The effect of the changes was that if FMIT was taken over by the defendant, those four staff members, at their option, would be entitled to take 12 months' salary by resigning at any time before the end of their contract period. The Board approved the changes because there had been speculation, in the media, as to the future of the FMIT, and in particular as to whether it was to be compulsorily merged with the defendant. The Board was concerned to ensure that its four senior staff members did not resign, and seek other employment, because of the uncertainty surrounding the future of FMIT. The Board did not advise Mr Holding, or his department, of its approval of the changes to the contract entitlements of the four staff members.

18 In late June 2008, FMIT received a copy of the Deloitte report. On 2 July 2008, Mr Holding attended, and addressed, a meeting of the FMIT Board. There were some differences in the accounts given in evidence, on the one hand, by Mr Belbin and Mr Di Masi, and, on the other hand, by Mr Holding, as to what was said at the meeting. It is not necessary for me to resolve those differences for the purposes of the issues which I must decide. It was, however, common ground that at the meeting, Mrs Prevedello spoke to Mr Holding, and she told him that that meeting was her first as a member of the Board of FMIT.

19 On 11 July 2008, Mr Belbin, on behalf of FMIT, wrote to Mr Holding enclosing the response by FMIT to the Deloitte report. In the meantime, Mr Holding had commissioned a second report by Deloitte, in which Deloitte was requested to model the effect of any decision by him to merge FMIT with the defendant. In particular, Mr Holding wished to ascertain whether there would be any adverse effect on the customers of FMIT arising from such a merger. The second Deloitte's report was provided to the Minister on 14 July 2008. Mr Holding did not make a copy of it available to FMIT. However, in late July, Mr Di Masi obtained a copy of it unofficially.

20 In early August 2008, Mr Holding reached the conclusion that he should direct that the defendant be appointed to take over the functions, powers and duties of FMIT. On 15 August 2008, he telephoned Mr Belbin, and advised him of his decision. On the same day, he sent to Mr Belbin, by facsimile, a letter advising him of his decision that the defendant be appointed to take over the functions, powers and duties of FMIT under the Water Act. He attached to that letter a document entitled "Reasons for Determination". The Minister's decision was to take effect as from 19 August 2008. On 18 August 2008, Mr Holding wrote letters to the Clerk of the Legislative Council, and to the Clerk of the Legislative Assembly, requesting them to lay a copy of the reasons for his determination before both Houses of Parliament, as required by s 87(2)(b)(ii) of the Water Act.

21 The decision by Mr Holding to close FMIT, and to merge it with the defendant, was met with a very strong emotional public response by the Mildura community. On 17 August, there was a large public rally outside the FMIT offices, protesting against the decision. On 19 August, Mr Belbin issued a press release on behalf of FMIT, entitled "FMIT reject claims of illegal investments". On the same day, three of the four senior managers of FMIT resigned, thus triggering their entitlements to twelve months' salary pursuant to the adjustments, which had been approved to their employment contracts. The Minister's decision took place at midnight on 19 August. On the next day, the defendant held a press conference at the Grand Hotel. There was a large protest outside the hotel, and some of those who were protesting entered the hotel. A physical scuffle ensued. Six days later, Mr Holding attended Mildura in order to explain his decision. As a result, there was a very large rally outside the offices of the defendant. Angry placards were carried by some of the protestors, and some of them struck the car in which Mr Holding arrived.

22 Subsequent to the merger of FMIT with the defendant, Mr Holding's staff prepared a letter, which he signed, to be sent to former FMIT customers. Mr Holding's advisor contacted Mr Ronald Leamon, the managing director of the defendant, and requested him to facilitate the distribution of the letter to former FMIT customers. The letter was provided to Mr Leamon in electronic form. Having received it, the defendant distributed it, in the mail, to the former customers of FMIT. The letter was accompanied by a letter, which Mr Leamon had prepared on the defendant's letterhead, and which provided information, to the former customers of FMIT, of the arrangements for the forthcoming season.

23 Having distributed the letter, as requested, to former customers of FMIT, Mr Leamon then made a decision to publish the Minister's letter on the defendant's website. Subsequent to the decision of the Minister to merge FMIT with the defendant, the defendant had established a page on its website, entitled "Integration of FMIT". On that page, it provided a link entitled, "Minister's letter to former FMIT customers", which enabled any person, who clicked that link, to download and read Mr Holding's letter. These proceedings arise out of the publication by the defendant of the Minister's letter on its website.

24 It is necessary to set out the whole of the Minister's letter. It is as follows:

"Dear Customer,

CLOSURE OF THE FIRST MILDURA IRRIGATION TRUST

My decision to close down the First Mildura Irrigation Trust (FMIT) has understandably generated a great deal of debate in the Mildura community, and concern among former FMIT customers wanting assurances about accessing their legal entitlements to water.

My primary concern in making this decision was to safeguard the interests of those Mildura residents who depend on FMIT for irrigation services. To that end, I have provided guarantees that prices will not rise above those already approved by the Essential Services Commission, Victoria's independent price regulator, for the next five years.

I have also provided guarantees that FMIT staff would have their jobs protected. And I have decided to appoint an FMIT customer to the Lower Murray Water Board, so that the Board has the direct benefit of your perspectives when making decisions.

Highly emotive and selective accounts of recent events have sought only to deflect scrutiny away from those responsible for FMIT's demise. I believe that you deserve better and that is why I am writing to you to explain the reasons for my decision.

My decision was based in part on the fact that the FMIT Board members broke the law by investing $2.2 million of Victorian Government money without Treasury approval. The specific law broken was the Borrowing and Investment Powers Act 1987.

The Government loaned this money to FMIT to invest in upgrading local irrigation infrastructure, for the lasting benefit of its members. Instead, the FMIT Board invested the money in the United States sub-prime mortgage market, where it lost $2 million of its value.

This was a serious breach of trust with local irrigators, who should have been able to rely on the Board to manage the Trust's finances responsibly and within legal limits. It also reflected an entrenched disregard for the governance and financial processes required of all water authorities to ensure that public money - your money - is being used appropriately.

This bad investment in turn led to the Board seeking Government approval to borrow another $2 million, taking its customers even further into debt, simply to raise cash for its day-to-day operations. This move crystallised concerns about its short to long-term viability.

Reports by Deloitte and the Essential Services Commission had raised serious concerns about FMIT's viability and its commitment to properly manage its affairs. Specifically, FMIT's small size made it acutely vulnerable to the impacts of drought and climate change, with reduced rainfall leading to lower water allocations and therefore revenue.

Furthermore, demographic changes and urban encroachment around Mildura will reduce irrigated land in FMIT's district, further undermining its capacity to trade its way out of debt in the medium to long term.

I came to Mildura twice to meet the Board to discuss these matters. I gave the Board ample time and opportunities to address the issues. Unfortunately, the Board's responses indicated that it did not take these matters seriously and I had no choice but to shut down the Trust in the interests of local irrigators and the wider Victorian community. I have visited Mildura since then, and met with irrigator representatives to discuss the best way forward.

Since making the decision, further irregularities in the former FMIT's management have come to light. For example, in June this year, the Board approved secret, last-minute adjustments to senior management contracts in the event of FMIT being taken over.

These adjustments provided termination payouts more than double those allowed in the Government Sector Executive Remuneration Panel's guidelines. I also understand that tax was not withheld from the payouts, as required under Australian taxation law.

The Victorian Government and Lower Murray Water are now considering the options to recover this money so that it can be used to the benefit of all former FMIT customers, not just a few former staff.

Also enclosed is a letter from Lower Murray Water, detailing the way forward for former FMIT customers and providing assurances about pricing and delivery arrangements over coming months and years. I will encourage you to contact Lower Murray Water direct to discuss any queries.

FMIT customers and Mildura in general have much to look forward to, despite the difficult conditions caused by the ongoing drought. The Victorian Government has secured a Commonwealth commitment of up to $103 million for irrigation upgrades in the area, including in the First Mildura Irrigation District. We now all need to work together to make the most of this opportunity to secure a sustainable future for you and your family."

25 In each proceeding, the plaintiffs pleaded that the letter, as published by the defendant, in its ordinary and natural meaning, bore three imputations, which were defamatory of them. The first two imputations were based on the fifth, sixth, seventh and eighth paragraphs of the letter, concerning the investment of the money borrowed by FMIT from TCV. The third imputation arose from the twelfth, thirteenth and fourteenth paragraphs of the letter, which related to the approval by the Board of FMIT of the adjustments to the contracts of four senior officers of FMIT. The imputations relied on by each plaintiff were that:

(a) The plaintiff broke the law by investing $2.2 million of Victorian Government money without Treasury approval;

(b) The plaintiff acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market;

(c) The plaintiff approved secret last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over.

26 In the interlocutory stages of the proceeding, the defence pleaded by the defendant underwent a series of amendments. In each proceeding, the first three versions of the defence contained a plea of justification. That plea was omitted from the defence at the time the trial commenced. At trial, the defendant relied upon a defence under s 28 of the Defamation Act, that the letter was a fair copy of a public document. The defendant contended that the letter of Mr Holding was a "public document" pursuant to s 28(4)(d), because it was a document issued by an officer of the government for the information of the public. Thus, the first substantive defence for the defendant was that the letter of Mr Holding, published by it, was a copy of a document issued by an officer of the government (the Minister for Water) for the information of the public.

27 The second defence relied on by the defendant was a defence of qualified privilege under s 30 of the Act. In the course of the trial, I granted the defendant leave to amend its defence by adding to it a defence of qualified privilege at common law.[1] Pursuant to that amendment, the defendant pleaded that it had a duty to publish the Minister's explanation, for his decision to merge FMIT with the defendant, to a number of categories of persons, namely: its customers and potential customers; former customers of FMIT; persons who requested a copy of the letter by going to the defendant's website for the purpose of seeking it out; the general public of the community in and around Mildura. In response to the defence of qualified privilege at common law, the plaintiffs in each case pleaded malice.

28 In each proceeding, the plaintiffs had, in its writ, opted for trial by judge and a jury of six. Before the jury was empanelled, Dr M Collins SC, who appeared with Mr N Kaskani for the defendant, submitted that the trial should not proceed before a jury. I did not uphold that submission, and I directed that the trial should proceed before a jury.[2]

29 The first questions in the trial concerned the issue of publication of the letter, and the issue of the identification of each plaintiff as a person referred to in the allegations in the letter about which the plaintiffs complained. The plaintiffs, by their pleading, restricted their claim to any publication of the letter in Victoria. Each proceeding was issued on 20 August 2010. Thus, the plaintiffs were confined to a claim arising from the publication of the letter, by the defendant, in the period of twelve months before August 2010 in Victoria.[3]

30 As the claim in the case concerned the publication of the letter on the internet, in order to establish the publication of it by the defendant, it was not sufficient for the plaintiffs to prove that the defendant uploaded the letter onto its website. In Dow Jones & Co Inc v Gutnik,[4] Gleeson CJ, McHugh, Gummow and Hayne JJ held that publication occurs where the material is available in comprehensible form. Thus, in the case of material published on the world wide web, their Honours held that such material would not be published, until it was downloaded onto the computer of a person who has used a web browser to pull the material from the web server. Ordinarily, it appears to have become assumed, in defamation trials arising from publications on the internet, that, to prove publication, the plaintiff must demonstrate that a person, or persons, downloaded the material and read it.[5] In this case, the plaintiffs were not referred to by name in the letter published by the defendant. Accordingly, it was common ground that each plaintiff must prove that at least one person, in Victoria between August 2009 and August 2010, downloaded and read the letter from the defendant's website, and reasonably understood it to refer to the particular plaintiff.[6]

31 In its defence in each proceeding, the defendant admitted that, during the period of twelve months ending in August 2010, the letter was downloaded and viewed by persons in Victoria. However, the defendant, in each proceeding, did not admit that the letter was published of and concerning the plaintiff, and, by its defence, and at trial, it maintained that the letter concerned the conduct of the Board of FMIT, of which the plaintiff was a former member.

32 Thus, the first issue, in each proceeding, was whether each plaintiff had established that one or more people in Victoria, in the period between August 2009 and August 2010, downloaded and read the letter, and reasonably understood it to refer to the plaintiff. That issue was addressed in the first question for the jury. Towards the end of the trial, the defendant conceded that the correct answer to that question, in each case should be "Yes". However, the question was left to the jury, because it provided a textual precursor to the next four questions.

33 At trial, one issue concerned the extent of the publication of the letter in the relevant time period to persons who read it, and reasonably understood it to refer to a particular plaintiff. That issue was relevant to the defence of qualified privilege. The plaintiffs called a number of witnesses, who stated that they had downloaded the letter during the relevant period. The defendant accepted that one witness, Cosimo Dichiera, in the relevant period in Victoria, had downloaded and read the letter, and reasonably understood it to refer to each plaintiff. It also conceded that another witness, Mary Price (the sister of the plaintiff, Nancy Prevedello), had, in the relevant period, downloaded and read the letter, and reasonably understood it to refer to Mrs Prevedello.

34 The defendant called an expert witness, Mr Mark Liddle, who had examined the log files of the defendant over the relevant period. Mr Liddle's evidence, which was not contested, was that the log files only recorded a limited amount of visits to the particular page on the defendant's website, which contained the Minister's letter, during the relevant period. Further, the records contained in the log files did not match the evidence of some of the witnesses as to the date on which, or the period in which, they had downloaded and read the letter.

35 Mr Liddle gave an explanation as to how those witnesses might have downloaded and read the letter when they visited the internet, without accessing it from the defendant's website. He stated that if a person has, on the internet, visited a page on a website previously, and if that person wishes to visit it again, that person may not, necessarily, access it from the website of the original source; rather, on the previous visit, the user's computer system may have cached the page. He also explained that a number of internet service providers have large boxes, which are dedicated to storing cached material. In such a case, if a person accesses the internet to download a page from a website, the person may, instead, receive the relevant information from the cached information of the internet service provider.[7]

36 The issues, relating to the extent of publication of the letter, in the twelve months before August 2010, to persons who read it and reasonably understood it to refer to the plaintiffs, were addressed in questions 3, 3A, 4, 5 and 5A for the jury.

37 Question 3 asked whether particular persons downloaded and read the letter. In the end, it was common ground that two of the persons referred to in that question - Mary Price and Cosimo Dichiera - did download and read the letter from the defendant's website in the relevant period in Victoria. In final address, the plaintiffs conceded that five of the other persons, referred to in question 3, did not download and read the letter from the defendant's website in that period in Victoria. Thus, the jury were required to consider whether the remaining four persons, referred to in question 3, had downloaded and read the letter from the defendant's website on or after 20 August 2009 in Victoria.

38 Question 5 asked, in respect to such persons, whether the plaintiff had established that when the person downloaded and read the letter from the defendant's website on or after 20 August 2009, he or she reasonably understood it to be of and concerning the plaintiff. In the end, taking into account concessions by each side, the contested issues concerned five of the persons who, the plaintiff alleged, had downloaded and read the letter during the relevant period.

39 Question 3A was expressed in different terms. It referred to a witness, Glenn Miller, who had downloaded and read the letter from the defendant's website in late 2008. He gave evidence that, in 2010, he again visited the defendant's website, but on that occasion, he only read the first and last sentences of the letter. Having done so, he satisfied himself that it was the same letter as that which he had downloaded and read on the website in late 2008. Question 3A asked whether the plaintiffs had established that Mr Miller had downloaded the letter from the defendant's website on or after 20 August 2009 in Victoria, and identified the letter as that which he had previously read. In the end, that question was not in contention; it was agreed that the answer to it should be "Yes". Question 5A addressed the issue whether the plaintiff had established that, when Mr Miller downloaded the letter from the defendant's website on or after 20 August 2009 in Victoria, and identified it as that which he had previously read, Mr Miller reasonably understood it to be of and concerning the plaintiff.

40 Question 4 addressed the question whether, if a particular witness did download and read the letter in the relevant period, that witness did so because he or she was referred to it by one of the plaintiffs, or a representative of the plaintiffs.

41 The next issue concerned the question of whether the letter, as published by the defendant, was defamatory of the plaintiffs. As I have stated, the defendant disputed that the letter, as published by it on its website, bore the three imputations alleged by the plaintiffs, or any imputations not substantially different from them. The defendant did concede that if the jury were satisfied that the letter bore any of the imputations alleged by the plaintiffs, or any imputations not substantially different from them, the letter would be defamatory of the plaintiffs.

42 Section 22(3) of the Act requires that if the jury finds that the defendant has published defamatory matter about the plaintiff, and if no defence on behalf of the defendant succeeds, the judge, and not the jury, is to determine the amount of damages to be awarded to the plaintiff. It was common ground that, in each case, I should put questions to the jury asking whether the plaintiff had established that the letter, published by the defendant on its website, would have conveyed to the ordinary reasonable reader any of the imputations, or imputations not substantially different from the imputations, alleged by the plaintiffs.

43 As I have already observed in a previous decision[8], such a procedure is a significant departure from the long standing practice in Victoria, which developed following the decision of the Full Court in Barclay v Cox[9]. However, unless such questions are asked of the jury, then if the jury did return a verdict in favour of the plaintiff, and if it was necessary for me to assess damages, it would not be possible for me to know, for that purpose, the basis upon which the jury had found, in effect, that the letter was defamatory of the plaintiff. Thus, the second question for the jury, in each case, was whether the plaintiff had established that the matter complained of, in its ordinary and natural meaning, would have conveyed to the ordinary reasonable reader any of the imputations, or imputations not substantially different from the imputations, alleged by the plaintiffs.

44 It has been long established that, at common law, it is for the judge, and not the jury, to decide whether the matter complained of was published on an occasion of qualified privilege. In such a case, the jury, and not the judge, determines any disputed questions of fact, but the decision, as to whether the matter was published on a privileged occasion, is a question for the judge as a matter of law.[10] Section 22(2) of the Act provides that the jury is to determine whether any defence raised by the defendant has been established. However s 22(5)(b) provides that nothing in s 22 requires or permits a jury to determine any issue that, at general law, is an issue to be determined by the judicial officer. Thus, it was accepted that is for me as the trial judge, and not the jury, to determine whether the defendant has established its defence of qualified privilege, both at common law and pursuant to s 30 of the Act, subject, of course, to the jury to determining any disputed issues of fact in relation to those defences.[11]

45 In order to establish a defence of qualified privilege under s 30 of the Act, the defendant must, inter alia, establish that its conduct in publishing the matter was reasonable in the circumstances.[12] It is now well accepted that it is for the judge, and not the jury, to determine whether the conduct of the defendant as the publisher of the material was reasonable, subject, again, to the jury determining any disputed issues of fact in relation to that question.[13] There were a number of disputed facts, which it was necessary for the jury to determine, in order to enable me to decide whether the defendant has made out its defence of qualified privilege, either at common law or pursuant to s 30 of the Act. Those issues were addressed in Questions 8 to 12 for the jury.

46 At the conclusion of the evidence, there was some discussion with counsel as to whether I should decide whether the letter was published by the defendant on an occasion of qualified privilege, before final addresses, and before the jury were asked to consider its verdicts. However, after some discussion, it was accepted by both sides that it would not be appropriate for me to determine, at that stage, the question of whether the letter was published on an occasion of qualified privilege.

47 That course was adopted for a number of reasons. There were still outstanding questions of fact, which were necessary to be resolved by the jury, to enable me to determine the question of whether the defendant had established the defences on which it relied. The argument, relating to whether the defendant had established the defences, and the preparation and delivery of a ruling in relation to that question, would have taken some time. The trial had already exceeded the time estimate which I had given to the jury panel. I was concerned that there not be any further delay in the trial before final addresses, and my final directions to the jury. Further, I apprehended (with some justification) that the question, whether the letter was published on an occasion of qualified privilege, is not clear cut. The principles, relating to that defence, have been stated by the authorities in general terms. The question, whether the defence applies in a specific case, commonly admits of some debate. Thus, it was common ground that, even if I were to decide against the defendant in relation to the application of the defence of qualified privilege in this case, I should require the jury to deliver a special verdict on the question of whether the plaintiff had established that the defendant had published the letter with malice. In those circumstances, it was common ground, with which I agreed, that I should not determine the question of qualified privilege before the jury decided, by its verdicts, the questions left for its consideration.

48 The Defamation Act does not contain any provision, similar to s 22(5)(b), reserving the question of the application of the defence under s 28(1) of the Act for decision by the judge. However, it was common ground that, in the circumstances of this case, it would be a question of law for me, as the trial judge, and not for the jury, to determine whether the letter, published by the defendant, was a copy of a document "Issued by ... an officer ... of the government" for the purposes of s 28(4)(d) of the Act. For that purpose, the jury were asked to determine the question whether the subjective purpose of Mr Holding, in publishing the document, was "for the information of the public". Questions 6 and 7 were addressed to that issue.

49 Finally, it is well established that the question, whether the defendant was actuated by malice in publishing the letter, is a question of fact for the jury[14]. In order to prove malice, the plaintiff was required to prove that the dominant motive of the defendant, in publishing the letter, was an improper purpose, which was ulterior to a duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water.[15] The issue, whether the plaintiff had established malice in that sense, was addressed in Question 13 for the jury.

50 The trial before the jury lasted a little over four weeks. The jury, in each of the four cases, delivered its verdicts on 21 August 2012.

51 By its verdicts in each case, the jury found that the letter, published by the defendant, bore each of the three imputations alleged by the plaintiffs (Question 2). The jury found that the letter had been downloaded and read in Victoria, between August 2009 and August 2010, by four persons, Mr Daniel Lee, Ms Mary Price, Mr Cosimo Dichiera, and Ms Louisa Prevedello. (Question 3). The jury further found that Mr Lee and Mr Dichiera reasonably understood the letter to refer to each of the four plaintiffs. Ms Price and Ms Louisa Prevedello each reasonably understood the letter to refer to the plaintiff Mrs Prevedello (Question 5). The jury were satisfied that Louisa Prevedello downloaded and read the letter, because she had been referred to it by Mrs Prevedello (Question 4(d)). The jury further were satisfied that, when Mr Glenn Miller downloaded the letter from the defendant's website in July 2010 and identified the letter as that which he had previously read (in late 2008), Mr Miller reasonably understood it to be of and concerning Mr Di Masi and Mr Belbin (Question 5A). The jury was not satisfied that Mr Miller had been referred to the letter (in 2010) by Mr Di Masi. (Question 4(b)).

52 By its answers to Question 7, the jury found that the defendant had not established that a purpose of Mr Holding (whether a substantial purpose, a principal purpose, or the principal purpose of Mr Holding) was to provide information: to the former customers of FMIT; to the customers of the merged FMIT and the defendant; to an appreciable section of the general community in and around Mildura; or to the general community in and around Mildura. As I shall discuss later, those questions, determined by the jury, might be relevant to the defence raised by the defendant under s 28 of the Defamation Act.

53 As I have earlier stated, Questions 8 to 12 related to factual issues concerning the defences of qualified privilege. By its verdicts in respect of those questions, the jury found as follows: that the defendant had not established that Mr Leamon believed, at all times after 15 September 2008, that the letter was a legitimate part of the historical record concerning the closure of FMIT and its merger with the defendant (Question 8); the defendant had not established that Mr Leamon believed, at all times after 15 September 2008, that the letter legitimately formed part of the Minister's explanation for his decision to close FMIT and merge it with the defendant (Question 9); the defendant had not established that it had placed the letter on its website without intending to endorse the allegations made by the Minister (Question 10(a)); the defendant had not established that it placed the letter on its website without, in fact, endorsing on the website the allegations made by the Minister (Question 10(b)); the defendant had not established that it uploaded the letter to its website as part of the ordinary course of its business (Question 11); the defendant had established that Mr Leamon honestly believed that the defendant had a duty to make the letter available on its website at the time the letter was uploaded to the defendant's website (Question 12(a)), but the defendant had not established that Mr Leamon honestly believed that the defendant had a duty to make the letter available on its website at all times before requesting the staff of the defendant to take it off its website, or at all times before its actual removal from the website (Questions 12(b) and (c)).

54 Finally, the jury, by its answer to Question 13, found that the plaintiff had established that the dominant motive of the defendant, in publishing the letter, was an improper purpose, which was ulterior to a duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water. Thus, the jury, by special verdict, found that the plaintiff had established that the defendant was actuated by malice in publishing the letter on its website.

55 It is appropriate that I pay proper tribute to the work performed by the jury in this case. The trial was long. A number of witnesses were called. A substantial amount of detailed evidence was given concerning the circumstances leading to the closure of FMIT. A large number of exhibits were tendered. For that purpose, the jury had two folders of copy exhibits. The exhibits were regularly referred to in evidence. At all times the jury were most conscientious in paying attention to the evidence, and in referring to the exhibits which were under discussion. The verdicts of the jury reflected the close and careful attention which the jury had consistently paid, throughout the case, to the evidence, to counsel's addresses, and to my directions. Indeed, such was the close attention paid by the jury to my final directions that, at one stage, during those directions, a juror drew to my attention an error which I had made in summarising the evidence of one of the witnesses. The performance by the jury in this case fully vindicates the faith which the courts have long held in trial by jury as the most fair and appropriate method of determining such cases.

The effect of the jury's verdicts: issues remaining for decision

56 As a result of those verdicts, the plaintiffs have succeeded in establishing that the defendant published, in Victoria in the period August 2009 to August 2010, matter which was defamatory of each of them. As a consequence of the jury's answer to Question 13, any defence, which the defendant would otherwise seek to rely on by way of qualified privilege at common law, would not succeed.

57 Accordingly, the following four issues remain for determination by me, namely:

(1) Whether the plaintiff has established that the defendant published the letter to Glenn Miller in the period August 2009 to August 2010.

(2) The defence of publication of a fair copy of a public document under s 28 of the Defamation Act.

(3) The statutory defence of qualified privilege under s 30 of the Act.

(4) Subject to my determination of the defences, the issue of damages.

58 When the hearing resumed, for submissions on those four issues, Mr Gilbertson applied, in each case, for leave to amend the plaintiffs' replies to plead malice in response to the statutory defence of qualified privilege. That application was opposed by the defendant. I refused leave to the plaintiffs to amend their replies, on the basis that such an amendment would occasion irreparable prejudice to the defendant.[16]

Whether the defendant published the letter to Glen Miller

59 The first question, then, is whether the plaintiffs, in each case, have established that the defendant published the letter to Glen Miller in the period August 2009 to August 2010. That question is relevant to the issue of qualified privilege, and also to the issue of damages.

60 In his evidence, Mr Miller stated that in late 2008 he saw the letter on the internet, and read a hard copy of it. He said that he understood the reference, in the letter, to the FMIT board members to be a reference to Mr Di Masi and to Mr Belbin. Mr Miller stated that in 2010 he saw the letter again on the internet. However, he did not read it. The relevant passage of his evidence is as follows:

"When you saw that (the letter) on the internet in 2010 did you read it? ... No I certainly didn't. I simply wanted to confirm that it was still the same one that I had read a couple of years before.

Were you confirmed in your mind that it was the same letter? ... Yes.

How did you do that? ... I read the first line and the last line, the signature at the bottom of Minister Holding.

You didn't read any other parts of the letter? ... Not at that point. It seemed to me to be the letter that I had actually read some time before."

61 The jury was asked two questions in relation to this issue. Question 3A asked whether the plaintiff had established that Glen Miller downloaded the letter from the defendant's website on or after 20 August 2009 in Victoria, and identified the letter as that which he previously read. The jury gave an affirmative answer to that question. Question 5A asked whether the plaintiff had established that when Mr Miller so downloaded the letter from the defendant's website on or after 20 August 2009, and identified it as that which he had previously read, Mr Miller reasonably understood it to be of and concerning the plaintiffs. The jury gave an affirmative answer to that question in the case of Mr Belbin and Mr Di Masi, and a negative answer in the cases of Mrs Prevedello and Mr Marciano.

62 The principles relating to what is necessary, to constitute publication for the purposes of defamation, are not in dispute. In essence, it is well established that, for publication to occur, the material must be communicated to a third person, who must comprehend it. In Webb v Bloch[17], Isaacs J stated:

"To publish a libel is to convey by some means to the mind of another the defamatory sense embodied in the vehicle ... ."

63 In Gutnick v Dow Jones & Company Inc[18], Hedigan J was concerned with the question as to the location which matter, uploaded onto the internet, was published. His Honour stated:

"I have concluded that the law in defamation cases has been for centuries that publication takes place when and where the contents of the publication, oral or spoken, are seen and heard, (ie made manifest to) and comprehended by the reader or hearer. ... I therefore conclude that delivery without comprehension is insufficient and has not been the law."[19]

64 That analysis of "publication" was accepted as correct, on appeal, by the High Court in Dow Jones & Company Inc v Gutnick[20], Gleeson CJ, McHugh, Gummow and Hayne JJ, in their joint judgment stated:

"[25] The tort of defamation, at least as understood in Australia, focuses upon publications causing damage to reputation. ...

[26] Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer. Until then, no harm is done by it. This being so it would be wrong to treat publication as if it were a unilateral act on the part of the publisher alone. It is not. It is a bilateral act - in which the publisher makes it available and a third party has it available for his or her comprehension."[21]

65 Dr Collins submitted that the plaintiffs have not proven that the defendant published the letter to Mr Miller. In particular, he submitted that there was no evidence that when Mr Miller saw the letter on the internet in 2010, he recollected the contents of the letter which he had previously read in 2008, or that he recollected the particular allegations conveyed in the letter. Dr Collins submitted that the facts, found by the jury in answer to question 3A and question 5A, are not sufficient to prove the relevant comprehension by Mr Miller of the content of the letter in 2010.

66 In response, Mr Gilbertson submitted that, in order to prove that the letter was published by the defendant to Mr Miller in 2010, it is not necessary that when Mr Miller saw the letter on the internet, he recalled what he had read earlier in 2008. Mr Gilbertson submitted that it was sufficient that Mr Miller recognised, in 2010, the letter which he had read in 2008.

67 Mr Gilbertson conceded that it could not be inferred from Mr Miller's evidence, or from the jury's answer to Question 5A, that, when he saw the letter on the internet in 2010, he recollected the contents of it.

68 In my view, that concession is fatal to the proof by the plaintiffs of the publication of the letter to Mr Miller in 2010. As Isaacs J stated in Webb v Bloch[22], the essence, of the tort of defamation, is the communication of the defamatory imputations by the defendant to the plaintiff. In order that there be such a communication, it is necessary that the defamatory imputations be brought to the mind of the relevant recipient, in this case Mr Miller. If, for example, having seen the letter on the internet in 2010, he was able to recall sufficiently the contents of it to be reminded of the defamatory imputations contained in it about the plaintiffs, that may have been sufficient publication in 2010 by the defendant to Mr Miller. However, as conceded by Mr Gilbertson, the evidence of Mr Miller did not amount to that. Accordingly, I am not satisfied, on the evidence, and on the findings by the jury, that the plaintiffs have proven that the defendant, in 2010, published the letter to Mr Miller.

The defence under s 28 of the Defamation Act 2005

69 The first defence relied on by the defendant, in each action, is a defence under s 28 of the Defamation Act, that the letter was contained in a "public document". The defendant contended that Mr Holding's letter was a "public document" pursuant to s 28(4)(d), because it was a document issued by an officer of the government (Mr Holding) for the information of the public.

70 The relevant provisions of s 28 are as follows:

"(1) It is a defence to the publication of defamatory matter if the defendant proves that the matter was contained in -

(a) a public document or a fair copy of a public document ...

'public document' means -

...

(d) any document issued by the government (including a local governance) of a country, or by an officer, employee or agency of the government, for the information of the public."

71 To succeed on this defence, the defendant must prove that the letter, which it published, was a document issued by Mr Holding for the information of the public. The competing submissions in relation to the defence raised three principal issues, namely:

(ii) Whether the phrase "for the information of" is construed by reference to the objective, or the subjective, purpose or intention of Mr Holding.

Section 28 defence: submissions

72 Dr Collins submitted that the letter was "issued" by Mr Holding. He referred to the 21st, 23rd and 24th meanings of the verb "issue" in the Macquarie Dictionary, namely: "to print (a publication) for sale or distribution ... to send out; discharge emit; to be sent or put forth authoritatively or publicly as a writ, money etc". Dr Collins noted that Mr Holding's letter was written on Ministerial letterhead, and that it was signed by Mr Holding as a Minister of the Crown. It was addressed to a particular group of persons (the customers of the FMIT) affected by the decision to merge FMIT with Lower Murray Water. Mr Holding directed that the letter be sent to Lower Murray Water for the purpose of communicating it to that group of people. Accordingly, he submitted, the letter was "issued" by Mr Holding.

73 Dr Collins submitted that the question, whether the document was issued by Mr Holding "for the information of the public", should be determined by reference to the objective purpose of Mr Holding's letter, and not by reference to his subjective purpose or intention. He submitted that the purpose of s 28 is to protect innocent re-publishers of documents issued by a government, or by an officer, employee or agency of the government. If the republisher is required, in each case, to prove the subjective intention of the officer, employee or agency of the government in issuing the document, any media outlet, republishing a governmental document, would be left at the whim of the unknown subjective intention of the original author of it. Dr Collins submitted that such a construction would subvert the clear intention of s 28(4)(d).

74 Dr Collins further submitted that s 28(4)(d) is to be contrasted with s 28(3), which provides that a defence, established under subsection (1), is defeated if the plaintiff proves that the defamatory matter was not published honestly for the information of the public or the advancement of education. In that way, Dr Collins submitted, subsection (3) makes the subjective intention of the republisher (and not the original author) relevant. He submitted that it would be anomalous if, under s 28(4)(d), the republisher is required to prove the subjective intention or purpose of the original author of the public document, whereas subsection (3) casts the onus on the plaintiff to prove the intention of the re-publisher.

75 Dr Collins submitted that that anomaly would be even more pronounced in a case against the original author of the particular document. In such a case, if s 28(4)(d) is interpreted by reference to the subjective intention of the author, s 28(3) would be redundant. Dr Collins submitted that, in that way, there would be an inconsistency between s 28(3) and s 28(4)(d), if the subjective intention or purpose of the original author is relevant to the determination whether, for the purposes of s 28(4)(d), the document was issued "for the information of the public".

76 Dr Collins further submitted that the letter was issued by Mr Holding for the information of "the public" under s 28(4)(d) of the Act. He submitted that the phrase "the public", for the purposes of s 28(4)(d), means an appreciable section of the general community, to be contrasted with an individual or single entity, a group of individuals in the capacity as individuals, or an internal group of which the author of the document is a part. In other words, he submitted that the phrase "the public" means a group of people in the community, as distinct from a number of people as individuals, being a group of people external to the group of which the author was a part.

77 Dr Collins submitted that if the phrase "the public" is not construed to mean a particular group or section of the community, the phrase would be devoid of any meaning. In particular, he submitted that it is not necessary to publish matter to the whole of the Victorian (or Australian) population, to constitute a publication to "the public". In support of that construction, he relied on the first, ninth and sixteenth meanings of "the public" in the Macquarie Dictionary namely: "Of, relating to, or affecting the people as a whole or the community, state or nation ...; a particular section of the people: the novel reading public; ... ('the public interest') the benefit or advantage to a whole community, as opposed to the individual ... ". Dr Collins also referred to a number of authorities which interpret "public" in other statutory contexts.[23]

78 Dr Collins submitted that the letter was issued by Mr Holding for the information of the public. He submitted that it was sufficient that the defendant demonstrate that, objectively, a substantial purpose of the letter was to inform the former customers of FMIT of Mr Holding's reasons for closing the FMIT; it was not necessary that the defendant demonstrate that the sole, or dominant, purpose of the letter was to provide that information to the public. Dr Collins further submitted that the former customers of FMIT are an appreciable section of the community, to be contrasted with an individual or single entity, and thus constitute "the public" for the purposes of s 28(4)(b).

79 In response, Mr Gilbertson submitted that the defendant had failed to establish a defence under s 28(4)(d) of the Act for three reasons. First, he submitted that Mr Holding did not "issue" the letter. Mr Gilbertson noted that s 28(4) distinguished between documents which are "issued", documents which are "kept", and documents which are "published". He submitted that the word "issued" must be construed by reference to the requirement that the document be issued by the government, or by an officer, employee or agency of the government. Thus, he submitted that not every document, written by an officer, employee or agency of the government, is "issued" for the purposes of s 28(4)(d). In particular, he submitted that, in order that the document be issued, it must serve an official purpose, or be official in its character.

80 Mr Gilbertson supported that construction by reference to the decision of the Full Court of New South Wales in Campbell v Associated Newspapers Ltd[24], which was concerned with s 29(1)(g) of the Defamation Act 1912 (NSW).[25] He submitted that the official reasons, given by Mr Holding for deciding to merge FMIT with the defendant, were contained in the letters, which he wrote to the Clerk of the Legislative Council and to the Clerk of the Legislative Assembly dated 18 August 2008, and which were laid before both Houses of Parliament. By contrast, Mr Holding's letter was distributed, at the request of Mr Holding, to the former customers of the FMIT.

81 Mr Gilbertson next submitted that the subjective purpose of the author of the document is relevant to determining whether, for the purposes of s 28(4)(d), the document was issued "for the information of the public". He submitted that the distinction, sought to be drawn by Dr Collins, between the subjective purpose and the objective purpose of the author, is unhelpful. In particular, the determination of the objective purpose of the author would, in any case, involve an element of uncertainty. Further, he submitted that the construction, for which the plaintiffs contended of s 28(4)(d), would not create any inconsistency between that provision and subsection (3), or any anomaly of the kind contended for by Dr Collins. Mr Gilbertson submitted that subsection (4)(d) is concerned with the subjective purpose of the author of the document. By contrast, he submitted, subsection (3) is concerned with the honesty of the publisher of the document. In particular, he submitted that an author of a document may have a purpose to inform the public, for the purpose of s 28(4)(d), but that purpose may be proven to be dishonest under s 28(3). In support of that proposition, Mr Gilbertson relied on the decision of Hunt J in Waterhouse v Broadcasting Station 2GB Pty Ltd[26], which concerned the construction of s 26 of the Defamation Act 1974 (NSW).

82 Mr Gilbertson further submitted that the construction, contended for by Dr Collins, would itself produce an anomaly. In particular, if the letter, objectively considered, was for the purpose of providing information to the public, but Mr Holding wrote it for an ulterior motive, the plaintiffs would have no recourse against the defendant for re-publishing it. Mr Gilbertson submitted that a defence under s 28 is essentially a derivative defence, in which the re-publisher could be in no better position than the original author of the document.

83 Finally, Mr Gilbertson submitted that, in any event, Mr Holding did not issue the letter for the information of "the public". Mr Gilbertson accepted that, for the purposes of s 28(4)(d), the "public" might consist of an appreciable section of the general public. However, he submitted that, in order to constitute "the public", that section of the public could not constitute a closed class, of which the identity of all the members could be ascertained. If the persons, to whom the document was published, belong to a closed class, the members of that class would not be defined by being members of the public; but, rather, they would be defined by reference to the specific criterion which set them apart from the public and made them part of that class.

84 In support of that construction, Mr Gilbertson referred to a passage from the judgment of Windeyer J in Lee v Evans[27], in the context of whether an invitation, to a member of the public, could constitute an invitation to the public, and thus be a prospectus. There, Windeyer J stated:

"The essence of an invitation to the public is not in the manner of its communication or in the number of the persons to whom it is communicated. The criteria are rather, are the recipients of the invitation persons chosen at random, members that is of the general public, the public at large, all and sundry: or are they a select group to whom and to whom alone the invitation is addressed, so that if an outsider sought to respond to it he would be told that he was not one of those invited to come in."

85 Mr Gilbertson submitted that the letter, distributed by Mr Holding, was sent to a closed class of persons, namely, the persons who were the customers of FMIT at the time of its closure on 15 August 2008. Mr Gilbertson submitted that a letter, sent to persons constituting that class of individuals, could not be characterised as a letter distributed to "the public".

Section 28 defence: conclusions

86 The first question, concerning the defence raised under s 28 of the Defamation Act, concerns the meaning of the word "issued" in the definition of "public document" in s 28(4)(d). In particular, the question is whether the letter written by Mr Holding was "issued" by the government (or by an officer, employee or agency of the government).

87 The various definitions of "public document" in s 28(4) differentiate between a document which is "published" (subparagraph (a)), a document which is "issued" (subparagraph (d)), and a document which is "kept" (subparagraph (e)). Unsurprisingly, the Defamation Act, and s 28, use the verb "publish" in the sense in which it is understood in defamation law, as connoting the communication of defamatory material, about a person, by a defendant to another person.

88 Section 28(4)(e) contemplates circumstances in which a record or any other document is "kept" by an Australian jurisdiction, a statutory authority, a court, or under legislation of an Australian jurisdiction, and which becomes published. Similarly s 28(4)(d) contemplates documents, which may be "issued" by a government (or an officer, employee or agency of the government), and which are published.

89 Clearly, a document may be kept without being published; conversely, a document may be published without being kept. Similarly, the verb "issue" and the verb "publish" are not synonymous. Not every document published by a government, or by an officer, employee or agency of the government, would, per se, be issued by the government (or by the officer, employee or agency of the government). Conversely, while a document issued by the government may thereby be published by the government, it does not follow that each document, issued by a government (or an officer, employee or agency of the government), is thereby "published" as that word is understood in defamation law.

90 It is important, in construing "issued", to bear in mind the context in which that word is found. In particular, it is significant that s 28(4)(d) only applies to a document which has been issued by a government (or by an officer, employee or agency of the government), and to a document which has been so issued for the information of the public. Ordinarily, when a government, or an agency, issues a document, it is for the purposes of giving or pronouncing a mandatory direction, or for disseminating a particular warning. Thus, in the context of the operations of governments and agencies of government, a health department might issue a relevant warning; likewise the Bureau of Meteorology might issue a storm warning. Similarly, as I stated, a document issued may contain a mandatory direction or command. Thus, a writ of summons may be issued; directions, edicts and proclamations may, equally, be issued.

91 The factor, which is common to each of those usages of "issued", in the context of a governmental document, is to be found in the official nature of the document, and in the manner in which the document itself is made public. That construction is reinforced by reference to the other defined meanings of "public document" in s 28(4). Each of the documents, referred to in the other subparagraphs of the definition, are formal, official documents. Thus, subparagraph (a) relates to reports or papers published by a Parliamentary body, or records of the proceeding of a Parliamentary body; subparagraph (b) relates to judgments, orders or other determinations of courts and tribunals; subparagraph (c) relates to reports or other documents authorised to be published, or required to be presented or placed, before a Parliamentary body by the law of any country; subparagraph (e) refers to records or other documents open for inspection by the public, which are kept by an Australian jurisdiction, an Australian statutory authority, an Australian court, or under legislation of an Australian jurisdiction.

92 That construction of "issued", in s 28(4)(d), gains some support from the judgment of Jordan CJ in Campbell v Associated Newspapers Limited[28]. That case concerned the construction of s 29(1)(g) of the Defamation Act 1912 (NSW), which provided a defence for the publication, in good faith, of "... any notice or report issued for the information of the public ... ". In construing that phrase, Jordan CJ stated:[29]

"The notice or report must be of genuinely official nature, and must be issued in such circumstances that it may fairly be regarded as issued for the information of the public. It is not, of course, for this Court to assume to lay down rules for what is, and what is not, proper to be made the subject of a governmental or police notice or report. I see no reason for doubting that an authoritative announcement of an official character made or handed to members of the press for publication in their respective newspapers would, or at least could, constitute a notice or report issued for the information of the public ... ."[30]

93 In this case, the letter was written by Mr Holding, as the Minister for Water, to the former customers of the First Mildura Irrigation Trust, as an explanation for the action which he had already undertaken in closing down the Trust, and merging it with the defendant. In the fourth paragraph of the letter, Mr Holding stated that he wished to counter what he described as "highly emotive and selective accounts" of recent events, and explain the reasons for his decision. It would, in my view, be contrary to the ordinary meaning of the word "issued", and to the meaning of that word in its statutory context, to characterise the dissemination by Mr Holding of that letter as the "issue" by him of it. The letter did not contain the relevant official character or quality, which is common to the other documents defined in s 28(4). Nor did it belong to the type of documents which are, ordinarily, understood to be described as being "issued" by a government, or by an officer, employee or agency of the government. Rather, as I have observed, the letter constituted the explanation by Mr Holding of the decision, which he had made to close the First Mildura Irrigation Trust, of which the persons, to whom the letter was sent, were customers at the time of its closure. For those reasons, I do not consider that the letter by Mr Holding was "issued" by him for the purposes of s 28(4)(d) of the Act.

94 That conclusion is sufficient to dispose of the defence, in each action, based on s 28 of the Act. However, in deference to the submissions by counsel, I shall consider the other two issues raised concerning the correct construction to s 28(4)(d) of the Act.

95 The second issue, concerning s 28(4)(d), related to the construction of the phrase "for the information of". As I have noted, Dr Collins submitted that the question, whether the document was issued "for the information of" the public, is to be determined objectively, without regard to the subjective intentions of the author, or of the agency, which issued the document.

96 As a matter of plain construction, the phrase "for the information of the public" qualifies the passive verb "issued". In that way, it describes the purpose served by the issue of the document by the government (or by an officer, employee or agency of the government). In other words, the phrase is not descriptive of the document itself, but, rather, it prescribes the purpose or reason for the issue of the document.

97 An inquiry, as to whether the document was issued "for the information of the public", must, necessarily, involve some determination of the purpose of the issue of the document. Even if, as Dr Collins has submitted, the purpose of the issue of the document is to be ascertained by reference to the document and the background circumstances, the court would, by that process, be drawing an inference, from those factors, as to the purpose of the particular agency or person, who issued the document.

98 There is nothing in s 28(4)(d) which restricts such an inquiry to an examination of the document alone. Indeed, Dr Collins recognised the artificiality of such a narrow proposition. He submitted that the question, whether the document was issued for the information of the public, could be determined, not only by reference to the document, but also by reference to the effect, which the document had on the minds of persons to whom the document was published. In that respect, Dr Collins referred to and relied on the evidence of a number of witnesses, who regarded the letter as Mr Holding's attempt to provide an explanation for his decision to close the FMIT. Dr Collins also accepted that the question, whether the document was issued for the information of the public, is to be determined by reference to the background circumstances in which the document was issued.

99 Pausing there, if, as Dr Collins submits, it were permissible to determine the question, whether the document was issued for the information of the public, by reference to the effect which the document had on the minds of the recipients of it, there is no logical reason why it would not be permissible to ascertain the purpose of the issue of the document by reference to the intention of the person issuing it. If the subjective effect of the document on the minds of the recipients is a relevant factor to take into account, in determining whether the document was issued for the information of the public, equally, or indeed even more so, it would be relevant to take into account any evidence concerning the actual purpose of the agency or the person who was responsible for the issue of the document.

100 Dr Collins submitted that a construction of the phrase "for the information of the public", which involved an inquiry into the subjective intention of the agency or person responsible for the issue of the document, would introduce a degree of uncertainty into the application of the defence under s 28(4)(d), which could not have been intended by the legislature. In particular, he submitted that such a construction would leave any republisher of the document (such as a media outlet) at the whim of the subjective intention of the agency or person, who originally issued the document.

101 There are, in my view, two answers to that proposition. First, the degree of uncertainty involved in such a construction would be considerably less than the uncertainty which would result if (as Dr Collins submitted) the question, whether the document was issued for the information of the public, is to be determined by reference to the effect which the document had on the minds of the recipients of it. Secondly, and more importantly, the uncertainty, contended for by Dr Collins, is more apparent than real. If the verb "issued" is construed in the manner in which I have already concluded, there would be few government documents, containing information, which would not be issued for the provision of that information to the public. In other words, any uncertainty of the kind contended for by Dr Collins would only result if, contrary to my earlier conclusion, the verb "issued" were to be construed as synonymous with "published". Otherwise, if the verb "issued" is properly construed, ordinarily, if not almost invariably, a document "issued" by the government (or an officer, employee or agency of the government), which contained information, would manifestly be issued for the provision of that information to the public.

102 Dr Collins' principal submission, on this aspect of the construction of s 28(4)(d), was that if the question whether the document was issued for the information of the public is to be determined by reference to the subjective intention of the agency or person responsible for issuing it, there would be a necessary tension between subsection (4)(d), and subsection (3), of s 28.

103 I do not accept that there is any such tension, or anomaly, in cases in which someone, other than the original author of the document (for example a media outlet), publishes it, and seeks to rely on s 28(4)(d). In such a case, the protection afforded by s 28(1) would apply, provided that the document, which was so republished, was a document which was originally published for the purpose of providing the information in it to the public. In such a case, s 28(1) would protect the re-publisher of such a document, unless the plaintiff, pursuant to subsection (3), is able to demonstrate that the republisher did not publish the document honestly for the information of the public or the advancement of education. In other words, provided that the document was originally issued for the information of the public (that is, for the purpose of providing that information to the public), the document may be republished with impunity, unless the plaintiff is able to prove that the re-publisher did not publish the document honestly for the information of the public or the advancement of education. In that way, the two subsections work harmoniously, and there is not, as contended by Dr Collins, any tension between them.

104 On the other hand, it is correct, as Dr Collins has contended, that s 28(3) would have no function in a case where the plaintiff sued the original agency or person, who was responsible for issuing the document, and where the agency or person sought to bring the document within s 28(4)(d). In such a case, in order that a defence based on s 28(1) and s 28(4)(d) succeed, the person or agency, responsible for issuing the document, would be required to prove that the document was issued for the information of the public. Thus, in such a case, a plaintiff would not need to resort to s 28(3). The onus of proof of the purpose of the agency or person, responsible for the original issuing of the document, would lie on that agency or person.

105 However, such a conclusion would not, as Dr Collins submitted, "deprive" subsection (3) of any effect. First, as I have already observed, subsection (3) has potential application in all cases in which a plaintiff sues the republisher of a document which falls within s 28(4)(d). Secondly, s 28(3) would also have potential application in cases of the publication (or republication) of any document falling within subparagraphs (a) to (c) and (e) to (g) of the definition of "public document" in subsection (4). Indeed, the documents defined in s 28(4)(a)(c) and (f) are documents which are "published" by a particular agency or institution. Section 28(1) provides a defence to the publication, by those agencies and institutions, of such documents. In each such case, the plaintiff would be entitled to invoke s 28(3) in response to such a defence.

106 Thus, I do not accept the contention that s 28(3) would be deprived of effect, if the phrase, "for the information of the public", in s 28(4)(d), was construed so as require the defendant to establish that the document in question was published for the purpose of providing the information, in it, to the public.

107 For those reasons, I do not accept the submission by Dr Collins that, in an appropriate case, evidence, and a verdict by a jury, as to the subjective purpose of the original author of a document, issued by a government (or by an officer, employee or agency of the government), is irrelevant to determining whether that document was issued "for the information of" the public. As I stated, ordinarily, the purpose of the agency or person, who issued the document, be ascertained by a process of inference in the document, and, if necessary, from the surrounding circumstances. However, in such a case, such an inference would be directed to ascertaining the specific purpose for which the agency or person, responsible for the document, issued it.

108 In the present case, having considered the document, the relevant background circumstances, and Mr Holding's evidence, the jury, in answer to Question 7, found that the defendant had not established that a substantial purpose, a principal purpose, or the principal purpose, of Mr Holding, in disseminating the document, was to provide information to any of the following persons, namely: the former customers of FMIT; the customers of the merged FMIT and Lower Murray Water; an appreciable section of the general community in and around Mildura; or the general community in and around Mildura. For the reasons I have stated, I consider that that finding, as to Mr Holding's purpose in disseminating the document, is relevant to, and conclusive of, the question whether the letter published by Mr Holding was issued by him "for the information of" the public for the purposes of s 28(4)(d). Based on the jury's finding, the answer to that question must be in the negative.

109 The third issue, concerning the application of s 28(4)(d), is whether the document was published by Mr Holding for the information of "the public". As I stated, Dr Collins submitted that the phrase "the public", in that context, means an appreciable section of the general community, to be contrasted with an individual or a group of individuals in their capacity as individuals, or an internal group of which the author of the document in question is a part. On the other hand, Mr Gilbertson submitted that, while "the public" may consist of an appreciable section of the general public, it could not consist of a closed class, the identity of all members of which could be ascertained.

110 In my view, the construction contended for by Dr Collins is too wide, in that it embraces groups of persons who would not, ordinarily, be properly understood to constitute "the public". When pressed, Dr Collins accepted that his definition of "the public", for the purposes of s 28(4)(d), would have the result that a letter written by the Attorney-General to each member of the Victorian Bar would constitute a document published by the Attorney-General "for the information of the public".

111 The shortcoming in Dr Collins' definition is that, by definition, a communication, specifically confined to a group of individuals, who form part of a group, could not, in ordinary parlance, be understood to be a communication for the information of "the public". Thus, in the example to which I have just referred, a letter written by the Attorney-General, the distribution of which was confined to members of the Victorian Bar, could not sensibly be understood to be a communication "for the information of the public".

112 In construing "the public", it is important not to disregard the context in which it is found in s 28(4)(d). In particular, it is necessary that the document be issued by the government (or an officer, employee or agency of the government) for the information of "the public". Certainly, a document may be publicly issued, which only affects, or indeed is directed to, a particular group of the public, such as the consumers of a particular product or service. However, such a document would be issued for the information of "the public", notwithstanding that only a specific group, or confined number, of the "public" may be affected by or interested in it.

113 For the purposes of s 28(4)(d), "the public" need not necessarily be constituted by the whole of the Victorian public. Certainly, in its context, a document would be issued by the government for the information of the public, if it was issued or published to members of a geographic region or locality, such as, in this case, the Mildura community. The feature of such a document, which would constitute it a communication for the information of "the public", is that it is distributed to, and for the information of, the whole of the relevant community. That construction, in my view, is consistent with the ordinary sense in which "the public" is understood, and indeed reflects the first definition of "public" in the Macquarie Dictionary, namely: "of, relating to, or affecting the people as a whole or the community, state or nation: public affairs".

114 Such a construction of the phrase "the public", in subsection (4)(d), is supported by the use of the word "public" in other provisions in the Act. Section 28(4)(e) provides that a "public document" means any record or other document "open to inspection by the public" that is kept by an Australian jurisdiction, an Australian statutory authority, an Australian court, or under legislation of an Australian jurisdiction. In that context, the phrase "the public" clearly means the people or the community as a whole, as distinct from a closed confined class of the community. Section 29(1) of the Act provides a defence for the publication of a fair report of "any proceedings of public concern". Section 29(4) defines the phrase "proceedings of public concern". Subparagraphs (a) to (g) and (n) of s 29(4) all refer to proceedings "in public" of institutions such as international conferences, courts or arbitral tribunals of any country, inquiries, proceedings of local government, or proceedings of a law reform body of any country. In that context, the phrase "proceedings in public" clearly connotes proceedings which are open to the community or people as a whole, as distinct from being open only to an appreciable, but select, group of people.

115 The three cases, to which Dr Collins referred, and which construe "public" in different statutory contexts, are of only limited utility. The construction given to that word in each case must, necessarily, depend upon its particular statutory context. However, in any event, they provide little support to the construction contended for on behalf of the defendant.

116 In Biga Nominees Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia[31], the plaintiff claimed an exemption from sales tax in respect of a forklift used by it in the operation of its railway terminal. It claimed that exemption on the basis that the forklift was used exclusively "in connection with the ... operation or maintenance ... of a railway providing, primarily and principally for use by the public, a service of transport of ... goods". Southwell J held that the forklift was not used "exclusively in connection with the operation of a railway". His Honour further considered[32] that, if the plaintiff was operating a railway, the railway was providing a service "primarily and principally for use by the public" within the meaning of the specified exemption. His Honour reached that conclusion because the plaintiff had advertised the service in a manner which made it probable that those members of the public, interested in container railway transport, would be aware of the service, and the plaintiff had a large number of such customers. In other words, Southwell J reached the conclusion that the service operated by the plaintiff was for "use by the public", because it was available to particular consumers in the public who wished to use its service.

117 In Lee v Evans[33], the defendant was convicted by a magistrate of an offence under s 4(a)(i) of the Registration of Business Names Act 1928 to 1961 (SA), for making use of or reference to a business name in an invitation "to the public" to deposit money with, or lend to, that entity. In that case, the appellant had approached two members of the public, who were previously unknown to him, and invited them to invest in his company. He then approached two other unknown persons, with a similar invitation. The High Court held that the appellant had not made an "invitation to the public", because his invitation had only been addressed to specific individual persons in the public. In other words, while the persons approached by the appellant had been selected from the public, the invitation, made by the appellant to them, was not an invitation "to the public", but, rather, was made to a specific person who formed a member of the public.[34]

118 In Rank Film Production & Ors v Collins S Dodds[35], the owners of copyright in certain films sought a declaration that the screening by an occupier of a motel of movies, by means of a video cassette recorder connected to television sets in various rooms, without a licence to do so, was an infringement of the copyright, on the basis that the motel proprietor had, contrary to s 86(b) of the Copyright Act 1968 (Cth) caused the film to be "seen in public". Rath J granted the declaration. His Honour held that, although the films were screened in the privacy of the individual motel rooms, nonetheless they were "seen in public".

119 In Rank Film Productions, as Rath J noted, the rights which the plaintiffs were seeking to vindicate were their valuable proprietary rights. The question, in effect, was whether the defendant, by its conduct, had injured the ability of the plaintiff to exploit its proprietary rights for profit. It was in that context that the phrase "in public" was construed by Rath J. The essential distinction, for the purposes of copyright law, was, on the one hand, between the display of the film in a domestic setting, and, on the other hand, the display of the film to persons who, as guests of the motel, saw it as members of a section of the public.[36] Understood in that context, there is little in the decision in the Rank Film Production case which lends support to the construction contended for on behalf of the defendant.

120 In the present case, the letter, written by Mr Holding, was specifically sent, on his instruction, to those persons who, at the time of the closure of FMIT on 15 August 2008, were customers of FMIT. The information was issued for their information, and for their information alone. That group of persons was a closed class, the identity of each member of which could be ascertained at the time at which Mr Holding caused the letter to be sent to them. In that way, if Mr Holding did "issue" the letter, he did not do so "for the information of the public", but, rather, for the information of each individual customer of FMIT at the time of its closure.

121 Thus, for the foregoing reasons, I have reached the conclusion that the defence under s 28(1) of the Defamation Act does not apply to the publication by the defendant, on its website, of the letter sent by Mr Holding to the former customers of FMIT. In summary, I have reached that conclusion because:

(2) If the document was "issued" by Mr Holding, it was not so issued for the purpose of providing information to any of the four categories of persons specified in the jury's answer to Question 7.

(3) If the document was issued by Mr Holding, it was not issued by him for the information of "the public", but, rather, for the information of a specific group of persons, namely, those persons who were the customers of FMIT at the time of its closure on 15 August 2008.

Defence of statutory qualified privilege: Defamation Act s 30

122 The submissions, concerning the defence of statutory qualified privilege under s 30 of the Defamation Act, focused on each of the three elements of the defence prescribed by subsection (1), namely:

(a) Whether each of the recipients of the defendant's publication had an interest, or an apparent interest, in having information on some subject;

(b) Whether the letter was published by the defendant to that recipient in the course of giving to the recipient information on that subject;

(c) Whether the conduct of the defendant, in publishing the letter, was reasonable in the circumstances.

123 Dr Collins submitted that each of the persons, to whom the plaintiff had proven that the defendant had published the letter, were persons who had an interest, or an apparent interest, in having information concerning the explanation given by Mr Holding for his closure of FMIT. Dr Collins referred to the authorities, which are usefully collected in the judgment of Hodgson JA in Griffith v Australian Broadcasting Corporation & Anor[37], in which it was held that the word "interest", in s 22 of the Defamation Act 1974 (NSW) was used in the broadest popular sense, and is not confined to the more narrow sense in which that word is understood in the context of the defence of qualified privilege at common law.

124 Dr Collins then turned to each of the four persons to whom the plaintiffs have established that the letter was published, Mr Lee, Mr Dichiera, Mrs Price and Louisa Prevedello. He submitted that the evidence revealed that each of them had a relevant interest in the letter. In particular, Mr Lee, as a viticulturist, and as chairman of the Sunraysia Irrigators Council, was publicly involved in the controversy concerning the closure of FMIT. Thus, it was submitted, he had a legitimate interest in the subject matter of Mr Holding's letter. Mr Dichiera, as a horticulturist and viticulturist, had an interest in the closure of the FMIT, which, he considered, was relevant to his day to day business operations. Mrs Price, the sister of Mrs Prevedello, knew of the publication of the Minister's letter in the Sunraysia Daily in 2008, and had discussed it with her sister at that time. Dr Collins submitted that that fact, together with the fact that Mrs Price is the sister of Mrs Prevedello, gave her an interest, or an apparent interest, in the subject matter of the letter. Dr Collins submitted that Louisa Prevedello had an interest in reading the letter, because she had been directed by her mother, Mrs Prevedello, to look at the letter on the internet, and to see if it was there.

125 In support of his submissions on s 30(1)(a), Dr Collins pointed out that the defendant's website is not similar to a mass media website; rather, it is a special purpose website, and, in order to access the Minister's letter, it was necessary to progress through two specific links on the defendant's website.

126 Dr Collins further submitted that the communication of the information in the letter was not incidental to the publication; rather, in terms of s 30(1)(b) of the Act, the letter was published by the defendant to each of the four recipients in the course of giving them information on the subject in which they were interested.

127 Finally, Dr Collins submitted that the conduct of the defendant in publishing the letter was reasonable. He submitted that each of the ten factors, which a court is to take into account in determining the reasonableness of the publication under subsection (3), relate to objective factors. Thus, he submitted that, in determining whether the conduct of the defendant was reasonable, the intention of the defendant, and other subjective factors, are not relevant. He submitted that those matters are only relevant to the issue of malice, under s 30(4), which was not pleaded in response to the defence of statutory qualified privilege. Dr Collins submitted that if matters, relevant to malice (under subsection (4)), were relevant to the determination of the reasonableness of the publication (under subsection (3)), there would be an inconsistency between the two subsections. For, he submitted, under subsection (3), the defendant would have the onus of proving its subjective intention in publishing the material, whereas, under subsection (4), the plaintiff would bear the onus of proving the subjective intention of the defendant.

128 Dr Collins further submitted that, in any event, the verdict of the jury in answer to Question 13 would not be relevant to the question of the reasonableness of the publication of the letter by the defendant. Dr Collins submitted that it is impermissible to "go behind" the verdict of the jury, and to speculate that the jury had given an affirmative answer to Question 13, on the basis that it had concluded that, in publishing the letter, Mr Leamon knew that the allegations contained in it, of which the plaintiffs complain, were false, or was wilfully blind of that fact. Rather, Dr Collins submitted that the plaintiff is bound by the terms of Question 13, and its answer, namely, that the jury found that the defendant was motivated by an improper motive, which was ulterior to any duty by it to communicate to the recipients of the letter the explanation of Mr Holding for closing FMIT.

129 Dr Collins submitted that the time for assessing the question of the reasonableness of the publisher, under s 30(1)(c), is the time at which the defendant took a step in relation to disseminating the relevant material. In the case of an internet publication, he submitted that the time for assessing the reasonableness of the conduct of Mr Leamon is the time at which he uploaded Mr Holding's letter onto the internet, in September 2008. Dr Collins submitted that any other approach would be unworkable. It would require publishers to continually monitor and review material stored by them on their websites, including in archives which can be accessed through the internet. In support of his submission to that effect, Dr Collins relied on the decision of Tugendhat J of the English High Court of Justice (Queen's Bench Division) in Bray v Deutsche Bank AG[38]. In the present case, after Mr Leamon uploaded the Minister's letter onto the defendant's website, he did not give it any further consideration, until he received a complaint from Mr Di Masi about it. On receiving that complaint, he directed the staff of the defendant to remove it from its website. Dr Collins submitted that the conduct of Mr Leamon, in originally uploading the material onto the website, was reasonable by reference to the various factors enumerated in s 30(3).

130 In response, Mr Gilbertson submitted that none of the four recipients of the letter had an interest, or an apparent interest, in having it communicated to them in 2010. In particular, he submitted that Mr Lee, Mr Dichiera and Mrs Price had all seen a copy of the letter in 2008. He submitted that the evidence revealed that Mr Lee, Mr Dichiera and Mrs Price each re-visited the website in 2010, and looked at the letter, to confirm for themselves that the letter was still there. Thus, he submitted that they did not read the letter in order to ascertain its contents, or the information contained in it; rather, they read it as a matter of curiosity. Mr Gilbertson submitted that, similarly, Louisa Prevedello did not want to know, and was not interested in, the reasons given by Mr Holding for his decision to close the FMIT. In her evidence, she specifically stated that she did not want to see what the Minister's reasons were for the closure of the FMIT. Rather, she saw the letter, and read it, because she had been requested to do so by her mother, to confirm her suspicions that the letter was still on the defendant's website.

131 Mr Gilbertson further submitted that, in any event, the letter was not published by the defendant to each of the four recipients of it "in the course of giving them information" on the subject matter of the letter, for the purposes of s 30(1)(b) of the Act. Mr Gilbertson relied on the jury's verdicts in answer to Question 9 and Question 11 to support that proposition. By its verdict in answer to Question 9, the jury found that the defendant had not established that Mr Leamon believed, at all times after 15 September 2008, that the letter legitimately formed part of the Minister's explanation for his decision to close FMIT and merge it with the defendant. Thus, Mr Gilbertson submitted that the uploading of the letter onto the defendant's website, and the retaining of it on the defendant's website, was not in the course of giving information as to the Minister's explanation for his decision to close FMIT. In answer to Question 11, the jury found that the defendant had not established that it uploaded the letter to its website as part of the ordinary course of its business. Thus, Mr Gilbertson submitted, the jury found that the defendant did not publish the letter in the course of giving relevant information to its irrigation customers.

132 Finally, Mr Gilbertson submitted that the conduct of the defendant, in publishing the letter, was not reasonable.

133 Mr Gilbertson submitted that in determining the reasonableness of the publisher, it is permissible to take into account matters relating to the extent to which the publisher had a genuine belief in the truth of the matter which it was publishing. In support of that proposition, he relied on the judgment of Hunt AJA in the decision of the New South Wales Court of Appeal, in 1991, in Morgan v John Fairfax & Sons Limited (No 2)[39]. Mr Gilbertson submitted that the principles stated by Hunt AJA in Morgan's case are still applicable, notwithstanding the amendment, in 2002, to s 22 of the Defamation Act 1974 (NSW) which introduced the ten factors, for determining reasonableness, which are now contained in s 30(3) of the Defamation Act 2005 (Vic). Mr Gilbertson referred to the judgment of Handley JA (with whom Spigelman CJ and McColl JA agreed) in John Fairfax Publications Pty Ltd v Zunter[40], in 2006, in which his Honour quoted, with approval, the relevant passage from the judgment of Hunt AJA in Morgan's case.

134 Mr Gilbertson further submitted that I am not bound by the reasoning of Tugendhat J in Bray's case, and that it would be incorrect to determine the reasonableness of the publication of the letter, by the defendant, by reference solely to the conduct of the defendant in uploading that letter onto its website in September 2008.

135 Mr Gilbertson submitted that when Mr Leamon uploaded the document onto the website, he had in his possession the minutes of the meetings of April and May 2008 of the Board of FMIT. Those minutes made it clear that the Board did not invest the money, borrowed from the Treasury Corporation, in the United States sub-prime mortgage market. Thus, Mr Leamon was possessed of material which demonstrated that the central allegation, made against the Board members by Mr Holding in his letter, was incorrect. Further, by November 2008, Mr Leamon knew that $1.5 million of the money, invested by Grange Securities on behalf of FMIT, had been recovered, yet he permitted the letter to remain on the defendant's website, alleging that a substantial part of the monies, borrowed by FMIT from Treasury Corporation, had been lost.

136 Mr Gilbertson also submitted that the jury could only have given an affirmative answer to Question 13 by being satisfied that the defendant knew that the allegations contained in the letter about the plaintiffs, and about which the plaintiffs complained, were false, or that the defendant was wilfully blind to that fact. He submitted that that finding is relevant to an assessment as to whether the conduct of the defendant, in publishing the letter on its website, was reasonable.

137 Mr Gilbertson further submitted that, by referring to each of the ten subparagraphs contained in s 30(3), I should not be satisfied that the conduct of the defendant, in publishing the letter, was reasonable.

138 The first question, then, is whether the four persons, to whom the defendant published Mr Holding's letter, had an interest, or an apparent interest, in having information on the subject of the letter, for the purposes of s 30(1)(a). The relevant principles, on what constitutes an interest, are not in dispute. For the purposes of this case, they may be shortly stated, namely:

(1) The word "interest", in s 30(1)(a), is not used in a technical sense, but it is used in the broadest popular sense. Nevertheless, it connotes an interest in knowing a particular fact, not as simply a matter of curiosity, but as a matter of substance apart from its mere quality as news.[41]

(2) "The interest must be definite; it may be direct or indirect, but it must not be vague or insubstantial - so long as the interest is so tangible in nature that it is expedient to protect it for the common convenience and welfare of society, it will come within the privilege afforded by the section".[42]

(3) The courts have placed a wider construction on the words "an interest", in the statutory equivalents to s 30 of the Act, than was previously accorded to the concept of "interest" for the purposes of common law qualified privilege.[43]

139 The application of those principles can be illustrated by reference to Griffith v Australian Broadcasting Corporation[44], and to two of the cases referred to in the judgment of Hodgson JA in that case.

140 In Griffith's case, the plaintiff had published a book entitled, "Beyond the Human Condition". The book was the subject of a program broadcast by the defendant. In an action commenced by the plaintiff, the jury found that the program conveyed the imputation that the plaintiff "... who holds himself out as a scientist, publishes work of such a poor standard that it has no support at all from the scientific community". The primary judge held that the defence of qualified privilege under s 22 of the Defamation Act 1974 (NSW) (which was, in substance, identical to s 30 of the Defamation Act 2005), and the defence of comment under that Act, were established. The Court of Appeal dismissed the plaintiff's appeal.

141 In Griffith's case, the fundamental thesis of the plaintiff's book was that, as a scientist, he had proven that human beings are not genetically violent, but that bad behaviour in human beings has been a learned reaction to unjust criticism of them. The program broadcast by the defendant was critical of that thesis, and, in particular, it conveyed the imputation, found by the jury, that the plaintiff as a scientist published work of such a poor standard that it had no support from the scientific community. Handley JA (with whom Baston JA and McClellan CJ at CL agreed) held that the whole audience to the broadcast had an interest in receiving information on the subject, namely, the promulgation by the plaintiff, as a discovery of science, of a potentially socially divisive doctrine with religious overtones, the recruitment of followers of the person promulgating that doctrine, and the effect of this on families. In reaching that conclusion, Handley JA stated:

"[112] ... In my opinion this was not simply a matter of curiosity, but a matter of substance apart from its mere quality as news; and it was so not merely to the families of young people who might be attracted to the appellant's ideas to the possible detriment of family relationships, but to the community generally.

[113] In my opinion also, the material giving rise to the imputation was not in any sense extraneous to the giving of this information, and there is no possibility that the matter by which the imputation was made can be regarded as distinct or separate from matter published in the course of giving the audience information on the subject in question."

142 In Barbaro v Amalgamated Television Services Pty Ltd[45], the defendant published a public affairs program concerning the six men, who had been named by Woodward J in his report, as the Royal Commissioner into those responsible for the murder of the well known anti-drug campaigner, Donald McKay, in Griffith, in 1977. The plaintiff was depicted on the program. Having misheard a question from the interviewer, he incorrectly assented to the proposition that he was "Dominic Sergi", who was one of the persons named by Woodward J in his report. The plaintiff commenced proceedings for defamation against the defendant, alleging imputations to the effect that the plaintiff was implicated in the disappearance and murder of Donald McKay. In answer to the plaintiff's claim, the defendant relied on a defence of statutory qualified privilege under s 22 of the Defamation Act 1974 (NSW).

143 Hunt J upheld that defence. His Honour observed that it was not disputed by the plaintiff that the viewers, who identified the plaintiff in the telecast, had a legitimate interest in the situation in Griffith. In opening the case, the plaintiff's counsel had told the jury they could take judicial notice of the fact of the disappearance of Donald McKay in circumstances involving a sinister criminal organisation. The evidence disclosed that 50 percent of the Griffith population was either Italian or of Italian origin, and that that community had been blamed by the public generally for complicity in the large marijuana industry in the Griffith area, against which Mr McKay had been campaigning. Thus, Hunt J concluded[46]:

"I am satisfied that the situation at Griffith as so described in the matter complained of was a subject of legitimate interest to the whole of the Italian community in Australia and, indeed, that it was of public interest generally.

This leads inevitably to a finding by me that the recipients of this information concerning the situation at Griffith, being those who identified the plaintiff in the telecast, had an interest in that subject within the meaning of s 22. I am satisfied that all of those recipients, except perhaps for a small number, were members of the Italian community. Insofar as any of those recipients (that is, the viewers who identified the plaintiff in the telecast) may not have been members of the Italian community, I am satisfied that because of their association with the plaintiff (by which they identified him) they nevertheless had a legitimate interest in the subject matter of the communication."

144 In Austin v Mirror Newspapers Limited[47], the plaintiff claimed damages for defamation arising out of the publication by the defendant of an article, which imputed that, as the fitness coach of the Manly Rugby League football team, he had conducted his duties in a wrong and incompetent manner. The jury upheld the imputations relied on by the plaintiff. The plaintiff appealed to the Privy Council from the decision of the Court of Appeal, which upheld the defence of qualified privilege. The Judicial Committee referred to, and applied, the principles to which I have earlier referred, and held:

"Bearing in mind that this Act was clearly intended to widen the scope of the common law defence of qualified privilege, their Lordships see no reason to differ from the wider construction adopted by the courts in New South Wales and, applying this construction, accept the view of both the trial judge and the Court of Appeal that the readership of this daily newspaper had an interest in the performance and training of the Manly Rugby Football Club within the meaning of s 22(1)(a)."[48]

145 The three decisions, which I have just summarised, clearly illustrate the proposition that, for the purposes of s 30, the words "an interest" are accorded a significantly wider connotation than is afforded to the concept of "interest" in the context of the common law defence of qualified privilege. Bearing those principles in mind, it is necessary to consider separately whether each of the four recipients of the letter, published by the defendant, had an interest, or an apparent interest, in the subject of it.

146 Mr Lee is a viticulturist, and he was the founding chairman (and still is the chairman) of the Sunraysia Irrigators Council. Following the decision by Mr Holding to close FMIT in August 2008, Mr Lee was actively involved in the public rallies, which took place protesting against that decision. Thus, when Mr Holding visited Mildura, Mr Lee organised a rally on that day at the office of the defendant. Mr Lee was very critical of the Minister for not publicly explaining his decision. He also gave evidence that he regularly accessed the defendant's website, to order water for his property, and to browse the information which was contained on the website. It was on one of those occasions that Mr Lee downloaded and read the Minister's letter.

147 Based on those facts, in my view, in conformity with the principles to which I have already referred, Mr Lee did have a relevant interest in reading the letter published by the defendant on the defendant's website in 2010. It is true, as Mr Gilbertson has pointed out, that Mr Lee had read the letter in 2008, when it was published in the Sunraysia Daily newspaper. However, as Mr Lee himself stated, the controversy concerning the take over of FMIT by the defendant was still a live topic of controversy within Mildura in 2010. It may well be that a proper construction of Mr Lee's evidence is that, when he read the letter on the website, he did not need to ascertain the Minister's explanation for the closure of FMIT; rather, at that time, he was interested to read it to note the allegations, which the defendant itself, by publishing the letter, was disseminating about the plaintiffs. However, in the context of the ongoing controversy concerning the closure of FMIT, and concerning (from Mr Lee's perspective) the involvement of the defendant in the circumstances leading to that closure, I consider that Mr Lee did have a relevant interest in the contents of the letter as published by the defendant on its website in 2010.

148 Mr Dichiera is a horticulturist and viticulturist. At all times, he was a customer of the defendant. Mr Dichiera first saw the letter in 2008, when it was circulated to the defendant's customers. He next saw the letter on the internet in 2010. Mr Dichiera had accessed the defendant's website, to order water. He saw the link to the letter when he visited the defendant's home page. He was interested in seeing it. So, after he had ordered his water online, he had a look at it. In cross-examination, he said that when he first saw the letter, he did not have any problem with it. The closure of the FMIT was a matter of general community interest throughout Mildura, and Mr Dichiera had an interest as an irrigator as to what was happening within his district. He said it was a matter of interest to him that FMIT had closed down, and its functions had been transferred to the defendant. At that time, it was a matter which was relevant to his day to day operations as a horticulturist and viticulturist. He said that in 2010 he clicked on the link to see whether the Minister's reasons had changed from 2008. He saw that there was no change in the reasons, and that is why he downloaded it.

149 For the reasons which I have already discussed concerning Mr Lee, I consider that Mr Dichiera did have a relevant interest in the subject matter of the letter published by the defendant in 2010. As an irrigator, and as a member of the Mildura community, he had been interested in 2008 in the reasons advanced by Minister Holding for closing FMIT. In 2010, he was interested to ascertain whether the reasons given by the Minister had changed. In those circumstances, in my view, Mr Dichiera had an interest, beyond mere curiosity, in the subject matter of the letter the Minister has published by the defendant on its website.

150 Mary Price is the sister of Mrs Prevedello. She gave evidence that she first saw the Minister's letter on the defendant's website on 13 July 2010. Having read the letter, she discussed it with Mrs Prevedello. In cross-examination, Mrs Price stated that in 2008 she had followed the media discussion concerning the closure of the Board, and, at that time, she was aware of the reasons given by the Minister for its closure. She had, at that time, discussed the allegations, concerning the conduct of the Board of FMIT, with Mrs Prevedello. In particular, at that time Mrs Prevedello was very hurt and upset that the reasons given by the Minister appeared in the Sunraysia Daily newspaper. In my view, Dr Collins is correct in submitting that the fact that Mrs Price had had discussions with Mrs Prevedello in 2008 concerning the subject matter of the Minister's letter, and her relationship with Mrs Prevedello, gave her an interest in the reasons given by the Minister in 2008 for the closure of FMIT. Again, I do not consider that that interest was negated by the fact that Mrs Price was already acquainted with the Minister's reasons, when she read the letter on the defendant's website in July 2010.

151 Louisa Prevedello, the daughter of Mrs Prevedello, gave evidence that in 2010 her mother told her that she suspected that there was a letter on the defendant's website, and Mrs Prevedello asked her to see if it was true. For that reason, Louisa Prevedello accessed the defendant's website on the internet, and downloaded and (as the jury found) read it. In those circumstances, Louisa Prevedello had a clear interest to access and read the letter. Perhaps somewhat perversely, Mrs Prevedello herself had an interest to know of the contents of the letter, as she was the subject of it. Louisa Prevedello was, in a practical sense, Mrs Prevedello's agent, accessing and reading the letter for the purposes of giving that information to her mother. In those circumstances, Louisa Prevedello did have an interest in the letter and in its contents.

152 The conclusions, which I have expressed in relation to the first requirement of s 30(1), are, in my view, determinative of the question of whether, for the purposes of s 30(1)(b), the letter was published to the particular recipient "in the course of giving to the recipient information on that subject". Each of the four recipients had, for the reasons I have expressed, an interest in the matter contained in the letter, namely the allegations in it concerning the conduct of the Board of FMIT which led to its closure. The letter was published to each of those recipients in the course of giving to them information on that particular subject. Thus, I am satisfied that the requirements of s 30(1)(b) are satisfied.

153 The critical question, then, is whether the conduct of the defendant, in publishing Mr Holding's letter, was reasonable in the circumstances. The submissions by counsel, which I have summarised, raise two questions of law, which I must first consider, before I determine whether the defendant has established that its conduct in publishing the matter was reasonable in the circumstances.

154 Dr Collins submitted that, in determining that question, subjective considerations are not relevant. He submitted that each of the nine specific factors, specified by subsection (3), are objective considerations, and that they do not take into account the subjective intention, or state of mind, of the publisher.

155 The controversy, concerning that issue, arises from the judgment of Hunt AJA in Morgan v John Fairfax & Sons Ltd (No 2)[49]. In that case, his Honour was considering the requirement of reasonableness in s 22(1)(c) of the Defamation Act 1974 (NSW), which was in identical terms to s 30(1)(c) of the Act. In a passage, which has been cited in a number of succeeding decisions in New South Wales, Hunt AJA stated that, in order to establish that its conduct was reasonable, the defendant must establish that it believed in the truth of the imputation, which it intended to convey.[50]

156 At the time Morgan was decided in 1991, the New South Wales Act did not contain an equivalent to s 30(3). Nor did it contain an equivalent to s 30(4), which confirms that a defence of qualified privilege may be defeated by proof by the plaintiff of malice. By an amendment to the New South Wales in 2002 (which became operable in February 2003), s 22(2A) was introduced into the New South Wales legislation. It was in an equivalent form to s 30(3) of the Defamation Act 2005. However, the New South Wales legislation then did not contain any equivalent provision to s 30(4). After that amendment, and notwithstanding that amendment, the courts in New South Wales continued to consider that the principles, stated by Hunt AJA in Morgan, were applicable to determining whether the conduct of the plaintiff in publishing the material was reasonable.[51]

157 Ultimately, it is not necessary for me to decide the specific question whether, on the proper construction of s 30(3) and s 30(4), in determining reasonableness, the question of the knowledge by the publisher of the falsity of the material, or wilful blindness by the publisher as to that matter, is relevant. For, I am persuaded by Dr Collins that it would be impermissible for me to determine, from the jury's answer to Question 13, that the jury had concluded that, in publishing the material, Mr Leamon either knew that the allegations contained in it, and about which the plaintiffs complained, were untrue, or was wilfully blind to that fact.

158 Certainly, the only basis, upon which the plaintiffs contended that the jury could infer that the defendant had been actuated by an improper and ulterior motive, was by concluding, first, that in publishing the material the defendant knew that the allegations about the plaintiffs in it were untrue, or that the defendant (Mr Leamon) was wilfully blind to that fact. In my directions to the jury, I made it plain that that was the only basis, upon which the plaintiffs contended that the jury should infer that the defendant was actuated by an improper, and ulterior, motive in publishing the letter. Nevertheless, at the conclusion of his cross-examination of Mr Leamon, Mr Gilbertson did put to Mr Leamon that he was actuated by an improper and ulterior motive, namely, because he wanted to discredit the former Board members of FMIT, and that he wanted to "do them in the eye". As Dr Collins has submitted, notwithstanding the manner in which the plaintiffs put their case to the jury, on the issue of malice, it is possible that the jury may have rejected Mr Leamon's denial of the specific allegations as to an ulterior motive put in cross-examination, and, on that basis, given an affirmative answer to Question 13.

159 For that reason, it would be speculation for me to draw any conclusions as to the process of reasoning adopted by the jury in determining, in answer to Question 13, that the defendant had been actuated by an improper and ulterior motive in publishing the material. Accordingly, I am unable to infer, from the jury's answer to that question, that the jury had concluded that the defendant knew that the allegations, about the plaintiffs contained in the letter, were false, or that the defendant was wilfully blind to that fact.

160 Thus, it is not necessary for me to determine whether malice, or knowledge of the falsity of the allegations contained in the defamatory matter, is relevant to the question whether, for the purposes of s 30(3), the defendant's conduct in publishing the material was reasonable. However, putting that matter to one side, I am otherwise unpersuaded that s 30(3), either alone, or in combination with s 30(4), precludes a court from considering, at all, any other factors relevant to the subjective intent or purpose of the publisher.

161 In my view, it is impossible to divorce subjective considerations from a proper determination as to whether the conduct of the defendant, in publishing the letter, was reasonable in the circumstances. Subparagraphs (g) and (i) of s 30(3) each necessarily involve a consideration of matters, such as the knowledge of the defendant of the facts which are alleged in the matter published by it. Subparagraph (g) concerns the sources of the information in the matter published, and the integrity of those sources. It would be unreal - and probably unfair - to confine the consideration of the integrity of a journalist's sources to objective considerations; rather, clearly, it would seem that the author of defamatory material must, in addressing that point, be entitled to adduce evidence as to his or her estimate and understanding of the integrity of the sources. Subparagraph (i) concerns steps taken by the defendant to verify the information in the matter published. The adequacy of the steps, taken by a defendant to verify the information in the matter published, must depend on the knowledge, by that defendant, of the information contained in the matter published, and the knowledge, by the defendant, of facts which verify or substantiate the information contained in the matter published. An assessment of the sufficiency of the steps, taken by a defendant to verify the information contained in the matter published, must depend upon the state of knowledge of the defendant of the information contained in the matter published, and on the factual material in the possession of the defendant, which supports (or contradicts) that information.

162 Further, although knowledge by a defendant, that allegations contained in matter published by it are untrue, is, almost invariably, conclusive evidence of malice, it is not the equivalent of malice. Rather, to prove malice, a plaintiff must satisfy a jury that the dominant motive of the defendant was an improper motive, which was ulterior to any duty or interest of the defendant in publishing it.[52] Thus, if the concept of reasonableness, for the purposes of s 30(1)(c), includes a consideration of subjective matters, such as the state of knowledge and understanding of a publisher of the information contained in the matter published, there would be no inconsistency between s 30(1)(c) - which requires the defendant to prove that its conduct in publishing the material was reasonable - and s 30(4), which places the onus of proof of malice on the plaintiff.

163 Indeed, I observe that the submissions made by Dr Collins themselves made relevant the question as to the purpose or intent of the defendant in publishing the letter. He submitted that, in determining, for the purposes of subparagraph (i) of s 30(3), whether the defendant had taken steps to verify the information in the material published, it is relevant to take into account the fact that the defendant was not the author of the letter, but, rather, that it was only the republisher of it. That submission, itself, must make relevant the verdict by the jury in answer to Question 10(a), that the defendant had not established that it placed the letter on its website without intending to endorse the allegations made by the Minister. The effect of that verdict was that the defendant did not just republish the letter, without intending to endorse the allegations in it.

164 The second issue, which arose concerning the construction of s 30(3), relates to the time at which the reasonableness of the defendant, in publishing the material, should be considered. Dr Collins, at least initially, submitted that the time, at which the reasonableness of the defendant should be assessed, is the time at which the defendant took a step in relation to the publication of the material, namely, the time at which it was uploaded by Mr Leamon onto the defendant's website. He submitted that, otherwise, the concept of reasonableness would be unworkable in the case of a defendant publishing material on its website, such as archived material, which might remain available to be accessed over a considerable period of time.

165 In support of that contention, Dr Collins relied on the judgment of Tugendhat J in Bray v Deutsche Bank AG[53]. In that case, the defendant made an application for summary judgment against the plaintiff, or, alternatively, a trial of preliminary issues. The case concerned the publication by the defendant bank of a press release relating to the plaintiff, which remained accessible on the bank's websites. The bank pleaded qualified privilege. The plaintiff replied by pleading malice, and also by pleading that the privilege did not extend after the particular time at which information came to the attention of the bank, which demonstrated that the contents of the press release might not be correct.

166 In determining that question, Tugendhat J acknowledged the strict logic of the proposition that a right of common law qualified privilege might be lost by the effluxion of time, by which the requisite duty or interest might have expired.[54] However, he considered that such an approach would seriously limit the effect of the relevant privilege[55]. Thus, he concluded:[56]

"The consequence of the proposition advanced by Mr Rampton (for the claimant) would make the law unworkable. It is hard to see how the keeper of a library or database can guard against the risk of liability for defamation where there is a publication of a statement written at the time when it was protected by common law privilege (of the reciprocal duty and interest type), but where the same reciprocal duty and interest may not subsist at some subsequent date upon which the document is read by a new reader. In my judgment, in the context of publication to the world of the Press Release in this case, mere passage of time is not capable in law of resulting in the loss of the privilege, if it existed on the first circulation of the document in March 2006."

167 The question, which Tugendhat J was required to determine in Bray was, of course, different to the question to be determined in the present case. In that case, the question was whether a privilege, which existed at the time of uploading a document onto a website, might later expire, and be unavailable to a defendant, at a subsequent date. In this case, the question is whether the issue of reasonableness, in s 30(3), is to be determined by reference solely to the date upon which the defendant uploaded the material onto the website.

168 In the course of his submissions, Dr Collins acknowledged that the principles, stated by Tugendhat J, would need to be qualified in circumstances where a defendant, having uploaded material to the internet at a time when it was reasonable, subsequently consciously made a decision to keep the material on the internet, in circumstances in which the defendant had learnt that the material was now "unarguably false".

169 I do not consider that the principle stated by Tugendhat J in Bray v Deutsche Bank would apply, absolutely, and in an unqualified form, to the determination, for the purposes of s 30(1)(c), of whether the conduct of the defendant in publishing the matter was reasonable in the circumstances. Certainly, it would be relevant for the defendant to establish that, at the time at which the material was uploaded onto the internet, the defendant's conduct in publishing the material in that manner was reasonable in the circumstances. It would also be relevant to take into account the type of considerations referred to by Tugendhat J, and by Dr Collins in his submissions. However, ultimately, the test prescribed by s 30(1)(c) is whether the conduct of the defendant "in publishing" the matter was reasonable in the circumstances. In the case of a publication on the internet, the publication occurs at the time at which the material is communicated to the mind of the particular recipient. The conduct of the defendant, which brought about that publication, took place, in this case, in September 2008. However, it also continued, in the act of the defendant maintaining the letter on its website for a period of almost two years, up to the time at which it was published to the four recipients of the letter in this case. Thus, in order to satisfy s 30(1)(c), the defendant must establish that its conduct in uploading the letter onto the internet, and in maintaining it on the internet for the ensuing two years, was reasonable in the circumstances.

170 With those propositions in mind, I turn to the factors enumerated in s 30(3), which the Court is entitled to take into account in determining the reasonableness of the conduct of the defendant.

171 It is convenient to consider, first, each of the factors, enumerated in s 30(3), in the order in which they are placed in that section.

(a) The extent to which the matter published is of public interest

172 Based on the matters which I have already discussed, it is clear that Mr Holding's letter was a matter of public interest, particularly at the time at which it was uploaded to the defendant's website. However, the letter was already in the public domain, having been published in the Sunraysia Daily at about the same time. Further, the extent, to which the matter was of public interest, subsided to some degree in the period which followed September 2008. Thus, by the time the four recipients of the letter - Mr Lee, Mr Dichiera, Mrs Price and Louisa Prevedello - downloaded it from the defendant's website in 2010, the closure of FMIT, and the Minister's reasons for his decision, were still of public interest, but to a lesser extent.

(b) The extent to which the matter published relates to the performance of the public functions or activities of the person

173 Mr Holding's letter, as published by the defendant, obviously related to the performance, by each of the plaintiffs, of their functions and duties as members of the Board of FMIT. At the time at which the letter was uploaded by the defendant onto its website, that consideration was clearly in the public arena. At that time, the plaintiffs had recently ceased to be members of the Board of FMIT. By the time that the four recipients downloaded and read the letter on the defendant's website, the performance by the plaintiffs of their public functions as members of the Board of FMIT was a matter of historic interest; in other words, the matter no longer related to the ongoing, or recent, performance by any of the plaintiffs of their public functions or activities.

(c) The seriousness of any defamatory imputation carried by the matter published

174 Dr Collins conceded that the three imputations, conveyed by Mr Holding's letter, were particularly serious. That concession was properly made. The allegations made by Mr Holding in his letter, and the imputations found by the jury, were grave, and were calculated to cause substantial harm to the reputations and standing of each of the plaintiffs. In essence, the central sting of the first two imputations, was that, instead of applying the monies, borrowed from the Government, for a proper public purpose, the plaintiffs, on a frolic of their own, broke the law and placed the money in a high risk investment. The third imputation alleged serious impropriety by the plaintiffs as members of the FMIT Board, and, in particular, by conducting clandestine, sinister dealings with senior staff members.

(d) The extent to which the matter published distinguishes between suspicions, allegations and proven facts

175 The passages of Mr Holding's letter, of which the plaintiffs complained, and which were the subject of the imputations found by the jury, were all expressed as statements of fact. The positive, factual nature of the assertions reinforced the credibility and apparent validity of the allegations contained in them. The ordinary reasonable reader would have been left in no doubt that the allegations were based on proper factual material, and that they were correct.

(e) Whether it was in the public interest in the circumstances for the matter to be published expeditiously

176 The defendant did not seek to vindicate its conduct, in publishing the letter, by claiming that there was any need to do so expeditiously. Nor was there any such need. Mr Holding's letter had already been published by the Sunraysia Daily newspaper, and, according to the evidence of a number of witnesses, it was already the topic of public discussion and controversy in September 2008 and in the months following.

(f) The nature of the business environment in which the defendant operates

177 Both Dr Collins and Mr Gilbertson accepted that this factor is irrelevant.

(g) The sources of the information in the matter published and the integrity of those sources

178 On the face of the letter, the letter was based on reports by Deloitte and by the Essential Services Commission. However, the letter does not make it plain that the particular allegations, about which the plaintiffs complained, were derived from either of those reports. Importantly, the defendant, and Mr Leamon, had available to them the source documents of FMIT, which were relevant to the allegations made in paragraphs 5 to 8 of the letter concerning the investment by FMIT of funds, borrowed from the Government, with Grange Securities. In particular, Mr Leamon had available, and indeed had looked at, the minutes of the Board meetings of FMIT of April and May 2007, which demonstrated that, contrary to the factual allegations made in the fifth and sixth paragraphs of the letter, the Board had not invested the money, borrowed from the Government, in the United States sub-prime mortgage market, or at all. Those documents demonstrated that the Board did not resolve to invest the money borrowed from the Government. Nor did it direct the Finance Manager of FMIT to invest those funds. On their face, those documents undermined the key allegation, in the fifth paragraph of the letter, that the "FMIT Board members broke the law by investing $2.2 million" of Victorian Government money. They similarly undermined the allegation, in the sixth paragraph of the letter, that "... the FMIT Board invested the money in the United States sub-prime mortgage market ...".

(h) Whether the matter published contained the substance of the person's side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and public a response from the person

179 Dr Collins submitted that there was no need for the defendant to ascertain or publish the plaintiffs' "side of the story", because the defendant was not the author of the letter, but rather simply re-published it. However, that submission ignores the verdicts by the jury, in answer to Question 2 and Question 10, that the defendant, in publishing the letter, intended to endorse, and did in fact endorse, the allegations contained in the letter about the plaintiffs, which were defamatory of the plaintiffs.

180 The failure of the defendant to make any attempt to obtain and publish the plaintiff's side of the story is, I consider, of some importance. The allegations about the plaintiffs, published by the defendant, were very serious. The most probable recipients of the publication would be people who lived and worked in the Sunraysia area, in which the plaintiffs lived and worked. As I have stated, the source documents of FMIT, held by the defendant, did not support the central allegations about the plaintiffs in the letter. Rather, those documents undermined the truthfulness of those allegations. In such a case, it behoved the defendant to obtain the plaintiffs' "side of the story", and to publish it. The defendant failed to do that.

(i) Any other steps taken to verify the information in the matter published

181 The defendant did not take any other steps to verify the allegations, contained in Mr Holding's letter. Again, as I stated, the defendant, and Mr Leamon, had available the original source documents of the FMIT board, which, on a simple reading, contradicted the factual allegations made by Mr Holding in paragraphs 5 to 8 of his letter.

182 Pausing there, based on the foregoing analysis, I am satisfied that the conduct of the defendant in publishing the letter was not reasonable, if (as Dr Collins has submitted) such an assessment is to be made as at September 2008, and if it is to be made only by reference to "objective" factors.

183 At the time at which Mr Leamon uploaded Mr Holding's letter onto the defendant's website, the subject matter of the letter was of public interest. However, Mr Holding's letter was already in the public domain, and there was no need for the defendant to further publish it. The letter related to the performance by the plaintiffs of their public functions as members of the Board of FMIT, but it did not relate to their continuing performance of those functions, as they were no longer Board members of FMIT.

184 On the other hand, the defamatory imputations contained in the letter, published by the defendant, were particularly serious. They were expressed, in the letter, as statements of fact, rather than as expressions of conclusion or opinion. The positive, factual tone of the letter added to the verisimilitude of the allegations in it, which defamed the plaintiffs. At the time at which the defendant uploaded the letter onto its website, it had in its possession, and indeed Mr Leamon had looked at, documents which would have demonstrated that the allegations, contained in the fifth, sixth, seventh and eighth paragraphs of the letter, were factually wrong and misleading. Yet, the defendant took no steps, at all, to verify those allegations. In publishing the letter, as the jury found in answer to Questions 2 and 10, the defendant endorsed the allegations made by Mr Holding in the letter. Notwithstanding the grave nature of the imputations contained in the letter, the defendant did not, at all, attempt to obtain the plaintiffs' response to them.

185 The omission by the defendant to verify the allegations contained in the letter, and to seek the plaintiff's account, is at its starkest in the case of Mrs Prevedello, who was not a member of the Board until well after the time at which the monies had been invested with Grange Securities. The fact that the defendant published Mr Holding's allegations concerning her in the letter, without any substance at all, is a further illustration of the lack of reasonableness of the conduct of the defendant in publishing the letter.

186 For those reasons alone, and confining my consideration to the time at which the letter was uploaded onto the internet, and disregarding any subjective factors, I am not satisfied that the conduct of the defendant, in publishing the letter on its website, was reasonable in the circumstances. On the contrary, I am satisfied that the conduct of the defendant in publishing Mr Holding's letter on its website, at that time, was not reasonable.

187 However, the question of the reasonableness of the conduct of the defendant, in publishing the letter, does not end there. It is important, when considering the conduct of the defendant in September 2008, to bear in mind that the defendant did not upload the letter onto its website with the then intention that it would remain on its website for a short and defined time. Mr Leamon did not merely upload the letter onto the internet in September 2008; he uploaded it onto the internet, and he left it there at that time. Indeed, in his evidence, he said that the letter remained on the defendant's website, because he considered that the letter was an historic document. The jury, in answer to Question 8, rejected Mr Leamon's evidence, that he believed at all times on and after 15 September 2008 that the letter was a legitimate part of a historical record concerning the closure of FMIT and its merger with the defendant. However, there was implicit within Mr Leamon's evidence the admission that, when he uploaded the letter on the internet, he did not leave it there by error or omission, but, rather, by way of a conscious decision to do so. The fact that the defendant not only uploaded the letter onto the internet at that time, but left it there for posterity, is a matter adding, I consider, to the lack of reasonableness of the conduct of the defendant. In that way, the defendant uploaded, and left the letter on the internet for posterity, notwithstanding that it contained serious defamatory imputations about the plaintiffs, couched in factual terms, the accuracy of which the defendant had taken no steps at all to verify. Further, the letter was to be left there, notwithstanding that, self-evidently, as time went on, it would no longer be of relevance to any current circumstance in the community.

188 By November 2008, KordaMentha had reported to the defendant that $1.5 million of the Grange Securities investment had been recovered. As Mr Leamon in his evidence conceded, that fact, at that stage, caused the allegation made by Mr Holding in the sixth paragraph of the letter to be false, namely, the allegation that the money invested in the United States sub-prime mortgage market had lost $2,000,000 of its value. Notwithstanding that knowledge, and notwithstanding that he had only two months previously uploaded the letter onto the internet, Mr Leamon, and the defendant, took no steps to make any correction, or qualification, to that allegation published by the defendant in the letter. The allegation was relevantly linked to the imputations, about which the plaintiffs have made complaint namely, their lack of responsibility by investing $2.2 million of Victorian Government money without Treasury approval (and in breach of the law) in the United States sub-prime mortgage market. It demonstrated, and gave colour to, the alleged lack of responsibility of the plaintiffs in investing the money, by alleging that ninety per cent of the investment was lost. In fact, by November - two months after the defendant uploaded the letter onto its website - the true facts were that thirty percent of the investment was lost.

189 As I stated, I do not accept that, in determining the reasonableness of the conduct of the defendant in publishing the matter, the Court is confined to the time at which the letter is uploaded onto the internet. This is not a case involving a media outlet, which has stored, in its online archives, news articles previously published by it. Rather, this case concerns the defendant, a water authority, leaving on its website, for a substantial period of time, a highly defamatory letter concerning the affairs of the corporation (FMIT), which it had taken over. At the time at which it was published to, and read by, the four recipients in this case, it had remained on the defendant's website, available for public viewing, for at least eighteen months. By that time, the public interest in the closure of FMIT, and in Mr Holding's reasons for his decision, whilst still alive, had reduced. The plaintiffs had long since ceased to be members of the Board of FMIT, and, thus, the publication no longer related to the ongoing or recent performance by them of any public functions or activities. By leaving the letter on its website up to and including the time at which it was published to each of the four recipients, the defendant had continued to expose the reputations and standing of each of the four plaintiffs to serious defamatory imputations, the accuracy of which it had taken no steps to verify. In those circumstances, the passage of time before the publication of the letter to the four recipients did not diminish, but, rather, it exacerbated, the lack of reasonableness of the conduct of the defendant in publishing the letter to those four recipients.

190 So far, I have only taken into account objective factors, in determining the lack of reasonableness of the conduct of the defendant in publishing the letter to the four recipients. If, as I have earlier concluded, it is permissible to take into account subjective factors, those factors would, in my view, further compound the lack of reasonableness of the conduct of the defendant in publishing the letter.

191 It is true, as Dr Collins pointed out, that in answer to Question 12(a), the jury found that the defendant had established that Mr Leamon honestly believed that the defendant had a duty to make the letter available on its website at the time at which it was uploaded onto the defendant's website. However, in answer to Questions 12(b) and (c), the jury also found that the defendant had not established that Mr Leamon honestly believed that the defendant had such a duty to make the letter available on its website at all times before requesting his staff to remove it from the website, and at all times before its removal from the website. Further, in answer to Question 13, notwithstanding that the defendant established that Mr Leamon honestly believed at the time the letter was uploaded onto its website that he had a duty to make the letter available on its website, the jury found that the plaintiffs had established that the dominant motive of the defendant, in publishing the letter, was an improper purpose, which was ulterior to any duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and the defendant. In addition, in answer to Question 9, the jury found that the defendant had not established that Mr Leamon believed at all times on and after 15 September 2008 that the letter legitimately formed part of the Minister's explanation for his decision to close the FMIT and to merge it with the defendant. In answer to Question 8, the jury found that the defendant had not established that Mr Leamon believed at all times on and after 15 September 2008 that the letter was a legitimate part of the historical record concerning the closure of the FMIT and its merger with the defendant.

192 The combined force of those findings, by the jury, add further weight to my conclusion that, in uploading the letter onto its website, and in leaving it on its website to be published to the four recipients, the defendant did not act reasonably. If, as I consider, it is relevant to take into account the subjective intention of the purpose of the defendant in publishing the letter, the verdict of the jury, on Question 13 would, of itself, be fatal to the claim by the defendant that it acted reasonably in publishing the letter. In a case such as this, the finding by the jury, that the dominant motive of the defendant in publishing the letter was an improper and ulterior motive, would be inconsistent with any conclusion that the conduct of the defendant, in publishing the defamatory material about the plaintiffs, was reasonable.

193 For those reasons, the defendant has failed to establish that its conduct, in publishing the letter was reasonable in the circumstances. Accordingly, the defendant has not made out its defence of statutory qualified privilege pursuant to s 30(1) of the Defamation Act.

194 Dr Collins submitted that, if the plaintiffs succeed on the issue of liability, they should only be entitled to an award of nominal damages. He submitted that the plaintiffs have only proven a very limited publication of the letter placed by the defendant on its website. In particular, Mr Marciano, Mr Belbin and Mr Di Masi have only proven publication of the letter to two persons, Mr Lee and Mr Dichiera. Mrs Prevedello has only proven the publication of the letter to four persons, Mr Lee, Mr Dichiera, Mrs Price and Louisa Prevedello. He submitted that all of those persons, who downloaded and read the letter, specifically stated that, having read it, they did not hold any of the plaintiffs in lower esteem. Further, Dr Collins submitted that any harm to the plaintiffs' reputations had already been inflicted, first, by the publication of it by Mr Holding to the former customers of FMIT in September 2008, and, secondly, by the publication of the letter in the Sunraysia Daily newspaper in September 2008.

195 Dr Collins acknowledged that, in an appropriate case, a court is entitled to award damages, for damage to reputation, arising out of the "grapevine" effect of the publication of defamatory material about a plaintiff. He submitted that there is no evidence that the publication of the letter to any of the four recipients produced a "grapevine" effect in spreading the imputations about which the plaintiffs complain. On the contrary, he submitted, there was evidence that nearly all the Mildura community knew of the allegations contained in the letter in 2008. By then, the damage had been done to the plaintiffs' reputations. The further publication of the letter, by the defendant, to the four recipients, did not result in any additional "grapevine" effect, or dissemination, of the defamatory imputations about the plaintiffs. Dr Collins submitted that, in that way, the defendants had rebutted the presumption of damage, which ordinarily applies in a claim for damages for defamation. He contended that, if the facts of this case had emerged in a trial in the United Kingdom, the proceeding would have been liable to be struck out as an abuse of process. Dr Collins relied on the decision of the Court of Queen's Bench Division in Jameel v Dow Jones & Co Inc[57] in support of that proposition.

196 Dr Collins acknowledged that an important component of damages, in a claim for defamation, consists of compensation for the grief and embarrassment occasioned to the plaintiff arising out of the proven publication of the defamatory matter about him or her. In this case, each of the plaintiffs have given evidence as to their feelings of anger and upset, arising from the fact that the defendant had uploaded the letter onto its website and maintained it there. However, the plaintiffs, in their evidence, did not link their feelings of hurt and anger to their knowledge of the fact that the letter had been published to the four recipients of it, Messrs Lee, Dichiera, Price and Louisa Prevedello. Dr Collins submitted that, as a matter of basic principle, the damage, for which a plaintiff is entitled to be compensated, must be causally linked to the proven publication by the defendant of the defamatory matter.

197 Dr Collins further submitted that, if the plaintiffs have proven any damage arising out of the publication by the defendant of the letter, I should take into account, in mitigation of that damage, evidence which was admitted in respect to the background to the imputations contained in the letter, and evidence which established, at least in part, the truth of those imputations. In support of that proposition, he referred to John Fairfax Publications Pty Ltd v Zunter (No 2)[58]; Howden v Truth & Sportsman Ltd (No 2)[59] and Pamplin v Express Newspapers Ltd[60]. Dr Collins noted that the defendant had originally pleaded justification, but had withdrawn that defence by the time the case came on for trial. Thus, when the trial commenced, truth was not in issue. However, Dr Collins submitted, Mr Gilbertson raised the issue of the truth of the imputations in opening the case to the jury, and he led evidence from the plaintiffs as to the lack of truth of the imputations alleged against them. In that way, he submitted, the plaintiffs put the truth of the imputations in issue.

198 Dr Collins submitted that, in joining that issue, the defendant had established the substantial truth of what he contended was the underlying sting of each of the imputations relied on by the plaintiffs. In making that submission, Dr Collins referred to a number of passages from the cross-examination of Mr Belbin, Mr Marciano and Mr Di Masi, which, he submitted, contained concessions by them as to the truth of the imputations.

199 Dr Collins submitted that the first imputation, pleaded by the plaintiffs (that the plaintiffs broke the law by investing $2.2 million of Government money without Treasury approval), bore on the plaintiffs' reputation for compliance with their legal obligations; the second imputation (that the plaintiffs acted irresponsibly and outside the law by investing money, loaned from the Victorian Government, in the United States sub-prime mortgage market) bore on the plaintiffs' reputations for financial responsibility and compliance with legal obligations; and the third imputation (that the plaintiffs approved secret last minute adjustments to senior management contracts) bore on the plaintiffs' reputations for good corporate governance. Dr Collins submitted that, in cross-examination, each of Mr Di Masi, Mr Marciano and Mr Belbin made concessions, which demonstrated the truth of the substantial sting of each of those three imputations. He submitted that, based on that evidence, those three plaintiffs do not deserve an unblemished reputation for compliance with legal obligations, for financial responsibility, or for good corporate governance generally. He submitted that the breaches by Mr Belbin, Mr Di Masi and Mr Marciano, of their legal and corporate obligations, were directly responsible for the failure of FMIT.

200 In response, Mr Gilbertson submitted that the damage to the reputations of the plaintiffs was not confined to the diminution of their standing in the eyes of the direct recipients of the defamatory material published by the defendant. He submitted that the evidence of Mr Marciano, Mr Lee and Mr Dichiera established that Mr Lee and Mr Dichiera had in fact discussed the letter, published by the defendant on its website, with a broad range of the community. In that way, Mr Gilbertson submitted that, unsurprisingly, the letter published to those recipients, on the website, became the topic of public discussion in Mildura. Mr Gilbertson submitted that the "grapevine" effect of that discussion was relevant to an assessment of the damage occasioned to the reputations of each of the plaintiffs, and also to their hurt feelings, arising from their knowledge that the allegations in the letter published by the defendant, had gained wide currency amongst the populace of Mildura and the surrounding districts.

201 Mr Gilbertson also relied on five factors, which, he submitted, aggravated the damages, which should be awarded to the plaintiffs. First, he referred to the abandoned defences of justification previously pleaded by the defendant. The plaintiffs gave evidence as to the effect, which the pleading of those defences had on them. Mr Gilbertson submitted that the evidence of the plaintiffs, adduced in cross-examination, did not justify the first two imputations pleaded by them. He contended that the sting, of the first imputation, was not that the plaintiffs had, in some way, failed to comply with the law, but, rather, that the plaintiffs had broken the law by investing government money without Treasury approval. Similarly, he submitted, the sting of the second imputation was not that the plaintiffs had acted irresponsibly; rather, it was that they had acted irresponsibly and outside of the law by investing money, loaned from the Victorian Government, in the United States sub-prime mortgage market. Again, he submitted, that the evidence did not support that imputation. He submitted that, in the case of Mrs Prevedello, the plea of justification was entirely unjustifiable, since she only became a member of the Board of FMIT long after the investment had been placed with Grange Securities.

202 Secondly, Mr Gilbertson submitted that the injury to the plaintiffs was aggravated by the verdicts of the jury on the issue of malice, namely, that in publishing the letter the defendant was actuated by an improper and ulterior motive.

203 Thirdly, Mr Gilbertson relied on the fact that the defendant had, for nearly two years, maintained in its defence that it had ceased publication of the letter on its website in late 2009. He submitted that at all times Mr Leamon knew that that part of the defence was false, yet the defendant did not remove that assertion from its defence until the fourth amended defence of 30 July 2012.

204 Fourthly, Mr Gilbertson relied on the failure of the defendant to apologise for the defamation, which it had disseminated about the plaintiffs. Mr Gilbertson submitted that such a factor aggravated the damages in the circumstances of this case. In particular, it did so in the context in which the defendant had, for some time, maintained a plea of truth, in which counsel for the defendant had cross-examined three of the plaintiffs as to the truth of the imputations, and in which the defendants, after being notified of the complaint made by Mr Di Masi, had delayed removing the letter from its website. Mr Gilbertson submitted that, in that context, the failure of the defendant to apologise for the defamation was an aggravating circumstance.

205 Fifthly, Mr Gilbertson submitted that the cross-examination of Mr Di Masi and Mr Belbin and Mr Marciano, relating to the circumstances in which the funds, borrowed from Treasury Corporation, had been invested with Grange Securities, was improper. He submitted that the cross-examination did not relate to the evidence by the plaintiffs, which "nailed the lie" of the first two imputations. He reiterated that those two imputations related to the allegation that the plaintiffs themselves had invested the monies, borrowed from the Victorian Government, and by doing so, had acted irresponsibly and contrary to their legal obligations. The cross-examination, of each of those three plaintiffs, did not, at all, relate to the evidence given by them "nailing the lie" in the first two imputations. Mr Gilbertson submitted that the cross-examination by Dr Collins of the plaintiffs did not relate to the question whether they deserved an unblemished reputation in the relevant sphere of the defamation. Rather, he submitted, the cross-examination trespassed into the type of evidence which was proscribed by Scott v Sampson[61], namely, evidence which tended to show a particular disposition or character trait of the plaintiff.

206 Further, Mr Gilbertson relied on features of Dr Collins' opening of the defendant's case to the jury, which, Mr Gilbertson submitted, further aggravated the damages to the plaintiffs.

207 In response, Dr Collins submitted that none of the factors, identified by Mr Gilbertson, constitutes aggravating factors on the issue of damages. He submitted that a mere failure to apologise, without more, did not entitle the plaintiffs to an award of aggravated damages. In any event, he submitted that the evidence of the plaintiffs, relating to the lack of an apology, did not establish that, in a relevant sense, the harm to them had been aggravated.

208 Dr Collins further submitted that in order that the conduct of the defendant, in defence of the proceeding, aggravated the plaintiffs' damages, that conduct must be lacking in bona fides or unjustifiable.[62] Dr Collins submitted that the conduct by the defendant in the defence of the proceeding was justifiable and not lacking in bona fides. Although, for some time, the defendant had maintained a defence of justification, that defence was not unjustifiable or lacking in bona fides. Dr Collins submitted that, when the plaintiffs put the truth of the imputations in issue, the cross-examination of them demonstrated that the original pleas of justification in the defences did not lack bona fides.

209 Dr Collins submitted that his opening address to the jury did not aggravate the damages of the plaintiffs. After his opening, no application was made to recall any of the plaintiffs to give evidence to the effect that their feelings of hurt and embarrassment had been exacerbated by reason of the matters stated by him in his opening. He submitted that the cross-examination, which he undertook, relating to the conduct of Mr Belbin, Mr Di Masi and Mr Marciano in relation to the investment of the monies, borrowed from the Victorian Government, was not unjustifiable or lacking in bona fides. Rather, he submitted, the cross-examination was directed to the evidence of the plaintiffs, by which the plaintiffs sought to prove that the imputations about them were untrue. Further Dr Collins submitted that the cross-examination was relevant, and not lacking in bona fides, because it related to the question of the reputation, which each of those plaintiffs ought to bear in the relevant sphere.

210 Finally, Dr Collins submitted that the answer by the jury to Question 13 (on the issue of malice) was not a basis for awarding aggravated damages. He submitted that that finding by the jury could not aggravate the feelings of hurt and upset by the plaintiffs. Further, he submitted that the jury did not identify any specific ulterior and improper motive, and thus the finding by the jury was too vague to constitute a factor aggravating the plaintiffs' damages.

211 In general, an award of damages for defamation has three principal functions, namely, reparation for the harm done to the plaintiff's reputation, solatium for the distress and embarrassment occasioned to the plaintiff by reason of the publication, and vindication of the plaintiff's reputation. In Carson v John Fairfax & Sons Ltd[63], Mason CJ, Deane, Dawson and Gaudron JJ, in their joint judgment, stated:

"Specific economic loss and exemplary or punitive damages aside, there are three specific purposes to be served by damages, awarded for defamation. The three purposes no doubt overlap considerably in reality and ensure that 'the amount of the verdict is the product of a mixture of inextricable considerations'. The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant's personal and (if relevant) business reputation and vindication of the appellant's reputation. The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant. Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the plaintiff's reputation. 'The gravity of the libel, the social standing of the parties and the availability of alternative remedies' are all relevant to assessing the quantum of damages necessary to vindicate the appellant."[64]

212 That description of damages, in an action for defamation, reflects the earlier statement of Windeyer J in Uren v John Fairfax & Sons Pty Ltd[65]:

"It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways - as a vindication of the plaintiff to the public and as a consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money. The variety of the matters which, it has been held, may be considered in assessing damages for defamation must in many cases mean that the amount of a verdict is the product of a mixture of inextricable considerations."[66]

213 As acknowledged by Dr Collins, in determining the damage done to the plaintiffs' reputation, the Court is entitled to, and indeed should, take into account the "grapevine" effect arising from the original publication of the defamatory material by the defendant.[67]

214 In Ley v Hamilton[68], Lord Atkin referred to that concept in discussing the manner in which damages for defamation are to be assessed. His Lordship stated:

"They are not arrived at ... by determining the 'real' damage and adding to that a sum by way of vindictive or punitive damages. It is precisely because the 'real' damage cannot be ascertained, and established that the damages are at large. It is impossible to track the scandal, to know what quarters the poison may reach. ... ."

215 In Crampton v Nugawela[69], the plaintiff claimed damages for a letter presented by the defendant to twenty-two doctors, who attended a meeting at the Royal North Shore Hospital in Sydney. Mahoney ACJ, in considering the role of vindication in the assessment of damages for defamation, stated:

"In this regard, 'the grapevine effect' and the 'lurking place' observation of Lord Hailsham [70] are relevant. The award must be sufficient to ensure that, the damage having spread along the 'grapevine' ..., and being apt to emerge 'from its lurking place at some future date', it was 'sufficient to convince a bystander of the baselessness of the charge'."[71]

216 The importance of the "grapevine" effect is demonstrated in the recent decision of Mullins J of the Supreme Court of Queensland in Prendergast v Roberts[72]. The plaintiff was a registered builder. The defendant entered into a contract with the plaintiff to construct new premises for his company. The defendant had been referred to the plaintiff by Mr Shore. After the premises were constructed, the defendant had a dispute with the plaintiff about the quality of the building. In separate conversations with Mr Shore, with the plaintiff's apprentice, and with a subcontractor of the plaintiff, the defendant defamed the plaintiff by imputing that he is an incompetent and dishonest builder. On the question of damages, the defendant contended that the plaintiff had not proved any injury to his reputation, since each of the three persons, to whom the defamatory statements were made, expressly stated that the plaintiff's reputation was not diminished by the defamatory statements. Mullins J rejected that submission, and awarded the plaintiff $50,000 damages. In doing so, his Honour stated:

"I do accept ... that even the limited publication of such serious defamatory statements could not fail to harm the plaintiff's reputation when account is taken of the grapevine effect, particularly in a regional centre when the defendant did not ensure that all persons were out of hearing distance other than the party to the conversation ... ."[73]

217 The "grapevine" phenomenon, referred to in those cases, is no more than the realistic recognition by the law that, by the ordinary function of human nature, the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published. In the present case, Mr Holding's letter was uploaded by the defendant onto a public website, albeit one which was most commonly accessed by customers of the defendant. Nevertheless, the letter was displayed by the defendant on a public website; it related to a matter of public concern and interest. In that way it was quite distinct from a private communication, passed in confidence. As the authorities to which I have just referred demonstrate, the law recognises that, in an ordinary society, members of the community talk to each other about matters of public interest and concern. In that way it is recognised and understood that the "poison" of a libel may spread well beyond the confines of the person to whom it was immediately published.

218 Of course, in determining whether there was any such effect arising out of the publication of the defamation in this case, it must be borne in mind that the relevant "grapevine" effect must originate, or spring, from the proven publication by the defendant of the defamatory material to the four recipients. That point is of some moment in this case, in light of the fact that the letter written by Mr Holding had been previously published, both to the former customers of FMIT, and, also, to the general public by the Sunraysia Daily newspaper, in September 2008.

219 In my view, the evidence does establish that there was such a "grapevine" effect, originating from the publication by the defendant of the letter to at least two of the recipients, Mr Lee and Mr Dichiera.

220 Mr Lee, who is, and at the material time was, Chairman of the Sunraysia Irrigators Council, stated that he spoke about the letter, which he had seen on the internet, at at least one or two of the subsequent meetings of the Council. He said that ordinarily such meetings are attended by about 30 or 40 members. Mr Lee stated "... it was certainly a point of discussion at at least one or two of those meetings".

221 Mr Dichiera, who is a horticulturist and viticulturist, stated that, after he had seen the letter on the internet in July 2010, he commented on it to his wife and his children. He also said that he spoke about it to other growers, whenever he came across a "mate". He gave an instance of a conversation, which he had had with a neighbour, with whom he had discussed the letter, in circumstances in which both of them expressed some surprise that there had not been a letter of amendment or retraction of it. He said that he could not put a number on the amount of growers, to whom he had spoken about the letter after he had seen it on the internet, but he said that it would crop up from time to time in response to newspaper articles concerning water issues. He said that sometimes the letter was raised in jest, provoking comments to the effect that there was a lost investment which was not really lost.

222 The evidence, to which I have just referred, establishes that Mr Lee and Mr Dichiera spoke to other growers, and other members of the Mildura community, about the letter, after they had seen it on the internet. Further, the evidence also establishes that discussions of the type, which Mr Lee and Mr Dichiera had with other members of the community, were likely to have revived the memories of those persons of the contents of the Minister's letter, which had earlier been published, by the Sunraysia Daily News, in 2008. As Mr Lee stated in cross-examination, the Minister's letter had been the subject of ongoing discussion since 2008. The allegations contained in the letter, and the circumstances leading to the closure of FMIT, had been the subject of hot public debate in 2008, which had continued for some time.

223 The evidence also satisfies me that, once Mr Lee and Mr Dichiera had discussions with other members of the community, concerning the letter published by the defendant on its website, it is likely that discussion of that matter would have spread to a reasonable extent in the Mildura community. In the context of the antecedent publicity given to the allegations made by Minister Holding about the plaintiffs, it is most probable that those discussions would, inter alia, have concerned the allegations in the letter published by the defendant on the internet. In cross-examination, Mr Marciano, somewhat graphically, described the process of dissemination, by a process of hearsay, of such matters in a rural community. Mr Marciano was asked whether, if he wanted to get information out concerning the FMIT to the whole of the Mildura public, he could do that by sending a letter just to FMIT irrigators. Mr Marciano responded:

"I don't think you even have to do that. If you had three or four people or ten people in Mildura it would be just as good as a letter, everybody would know, it's word of mouth. We all know each other. In Melbourne you don't know people in Melbourne because Melbourne is a big place. But here in Mildura wherever you go, what you do and how you do it everybody knows us, everybody."

224 Based on that evidence, I am satisfied, on the balance of probabilities, that the publication by the defendant of the letter to the four recipients, in 2010, formed the wellspring of a "grapevine" effect, whereby the allegations about the plaintiffs contained in the letter, published by the defendant, were discussed between, and made known to, a moderately substantial number of members of the Mildura and surrounding communities, in addition to the four recipients of the letter.

225 It was not in dispute that, before the publication of the letter by Mr Holding in September 2008, each of the four plaintiffs had a high reputation in the Mildura district.

226 Mr Belbin, for some years, has worked as a sales consultant for Mildura Office Equipment & Supplies ("Mildura Office Equipment"), and he has also managed family properties in the Mildura area. As I have already stated, he was Chairman of the Board of FMIT between 2003 and its closure in August 2008. He successfully stood for re-election to the Board each alternate year.

227 Mr Peter Jansen, the Managing Director of Mildura Office Equipment, has known Mr Belbin for almost 20 years. In his evidence, he stated that he knows a large number of people who were acquainted with Mr Belbin. He said that Mr Belbin had an excellent reputation, among those people, for obeying the law, and that he had a reputation as being a responsible, honest and open person. He said that there was never any doubt about Mr Belbin's honesty or integrity. In cross-examination, he stated that Mr Belbin still continues to have the same high reputation.

228 Mr Robert Biggs is a liaison principal with the Department of Education. Before that, he was the Principal of Irymple Secondary College from 1994 until 2007. Mr Biggs has known Mr Belbin for more than 20 years. They first met when they were both VCE mathematics teachers. Mr Biggs stated that in the circles, in which he has moved, there has never been any question raised about Mr Belbin's reputation for obeying the law, for honesty and integrity. He said that people have always considered him to be a very honourable, responsible and totally community minded person. In cross-examination, Mr Biggs agreed that, as of today's date, Mr Belbin continues to enjoy the same high reputation.

229 Mr Marciano was born and raised in Mildura. He is now 61 years of age, and is a grape grower and horticulturist. His family has resided in the Mildura area for the last 90 years. Mr Marciano was a foundation member of the Irymple Football Club, and he has been involved with the Da Vinci Club, which is a local Italian club. After leaving school, Mr Marciano has always worked on his family's properties. During that time, through his efforts, he has managed to add considerably to the size of his family's holdings.

230 Mr Glenn Milne has known Mr Marciano for approximately 30 years. Mr Milne has been a councillor of the Mildura Rural City Council. Mr Milne knows a number of people who are acquainted with Mr Marciano. He said that Mr Marciano had never been reputed to be a person who disobeyed the law, or who acted irresponsibly; rather, he was regarded as a good law abiding citizen, held in good stead by the Italian community, and by the general community.

231 Vince Cirillo is a horticulturist. He has known Mr Marciano for 20 years. They are both members of the Irymple Football Club and of the Da Vinci Club. Mr Cirillo stated that before the closure of FMIT, Mr Marciano enjoyed an impeccable reputation as an industry leader, who was knowledgeable about horticulture. He was well-known as a pioneer in the industry, and he had a reputation for always obeying the law, acting responsibly, and being open and honest. In cross-examination, Mr Cirillo stated that Mr Marciano still holds an impeccable reputation in each of those respects.

232 Frank Di Masi is a viticulturist based in Irymple. He is 54 years of age. Mr Di Masi was born and educated in Mildura. After completing secondary school, he took over the management of his family's property. He has been a member of the Mildura Dried Fruits Association since 1986, a member of the Victorian Dried Fruits Board for three years in the 1990s, and a member of the Da Vinci Club since 1984. In addition, he is on the committee of Murray Valley United, which is concerned with issues relating to water rights.

233 Mr Tony Roccisano has known Mr Di Masi since their early years. They have been connected through business and social activities. Mr Roccisano knows a lot of people who know Mr Di Masi, including business people, farmers, labourers and others. He said that Mr Di Masi is regarded as a community leader, who is very strongly focused on the agricultural sector. He said that Mr Di Masi had a very good reputation for obeying the law, for acting responsibly, and for being open and honest.

234 Mr Gregory Milner, a viticulturist residing in Irymple South, has known Mr Di Masi for 40 years. He said that Mr Di Masi was well-known in the Mildura community in 2010, and that he held a high reputation for honesty, and for acting responsibly.

235 Nancy Prevedello is 55 years. She was born and educated in Mildura. In 1983, she became a viticulturist after marrying her husband. Mrs Prevedello has also worked at the Sunraysia Residential Services, which provides residential and respite care for intellectually impaired people. She has been a member of the Sunraysia Irrigators Council since its inception in 2003, and she has been a parishioner at the Merbein Catholic Parish since 1979. Between 1993 and 2001, Mrs Prevedello was a member of the Merbein South School Council. She has also been involved with the College Lease Beneficiaries Board. She has been involved with the Merbein South Saints Baseball Club and the Theresians.

236 Sister Marianne McDonald has been the parish leader of the Merbein Catholic Parish for 13 years. She is aware of the work, which Mrs Prevedello has done on the St Vincent de Paul Committee for the church, and as a member of the Merbein Secondary College Council. Sister McDonald stated that through her involvement with the parish over the years, she knows a number people who are acquainted with Mrs Prevedello. Among those people, Mrs Prevedello has a reputation as a very moral person, who always acts with great integrity. She has always been known to act with a sense of responsibility to her family and to the community, and she has a reputation for being open and honest. In cross-examination, Sister McDonald stated that, today, Mrs Prevedello still enjoys a reputation for obeying the law, acting responsibly, and being open and honest.

237 The sum of the evidence, to which I have just referred, is that, before the publication of the Minister's letter by the defendant on the internet in 2010, each of the four plaintiffs enjoyed a high reputation in the Mildura district, in the sectors which are relevant to the imputations about which they complain. Further, as acknowledged by Dr Collins, each of the imputations, found by the jury, are serious. They impugn the reputations of each plaintiff in their conduct of an important public office. In particular, the allegations involved grave aspersions on the plaintiffs' reputations for civic responsibility, probity and integrity.[74] The imputations were not coincidental to the matter published by the defendant; on the contrary, they were central to the topic addressed in the letter, the closure of FMIT. They were made by a public statutory authority, which itself exercised important responsibilities in the geographic area in which the matter was published by it. As such, the dissemination of the allegations, contained in those imputations, would be calculated to cause significant damage to the reputations of each of the four plaintiffs.

238 The evidence demonstrates that none of the four recipients, to whom the letter was directly published in 2010, held any of the plaintiffs in lower esteem as a consequence of the receipt by them of the letter at that time. Nevertheless, as I stated, I am persuaded, on the balance of the probabilities, that the publication of the letter, on the internet, to those recipients, produced a "grapevine" effect, which would have disseminated the "poison" contained in the three imputations through the Mildura and surrounding communities. I accept the evidence, given by a number of the reputation witnesses in cross-examination, that they had not perceived any diminution in the high reputations enjoyed by the respective plaintiffs, after the publication by the defendant of the Minister's letter in 2010. However, it would be naïve to conclude, from that evidence, that the dissemination of the letter, at that time, did not result in further harm to the good reputations of each of the plaintiffs, as a result of the revival by it of the serious allegations in the letter, which had previously been publicised in 2008. To conclude otherwise would, in my view, involve a highly simplistic notion of communal judgment and opinion. It is commonplace that the dissemination of defamatory material, about a plaintiff, to persons who rightly hold the plaintiff in high esteem, does have a real potential to damage the reputation of the plaintiff in the eyes of those who know him or her, and in the broader community, notwithstanding the protestations of those acquaintances to the contrary.

239 I am, therefore, satisfied that the dissemination of the imputations in the letter, as a result of the publication by the defendant to the four recipients in 2010, did result in material harm to the high reputations of each of the four plaintiffs. In reaching that conclusion, I do take into account the fact that the original publication of the letter, by Mr Holding to the former customers of FMIT, and by the Sunraysia Daily newspaper to the Mildura public at large, in 2008, had already harmed the plaintiffs' reputations. Nevertheless, for the reasons I have stated, I am persuaded that the republication of the letter by the defendant in 2010 did, by the process involved in the "grapevine" effect, occasion additional harm to the high reputations of the plaintiffs. That republication of the defamatory imputations revived and reinforced the effect of the imputations, originally published in 2008. It added the defendant's endorsement to them. It made those imputations more memorable, and more likely to remain in the minds of the recipients.[75]

240 As noted in the passage from the joint judgment in Carson v John Fairfax & Sons Ltd, to which I have referred above[76], in addition to damages for injury to reputation, the plaintiffs are entitled to damages for the personal distress, embarrassment and hurt caused to them by the defendant's publication. The evidence of the plaintiffs demonstrates that each of them have suffered significant distress, resulting from the display of Mr Holding's letter by the defendant, on its website.

241 That evidence, to which I shall refer below, was not in dispute. However, Dr Collins submitted that that evidence does not establish that the plaintiffs have suffered any grief or annoyance arising out of the specific publications of the letter by the defendant as proven by the plaintiffs. In particular, Dr Collins submitted that the plaintiffs did not make any attempt, in their evidence, to establish that they had felt grief or annoyance by reason of the publication of the letter to any of Mr Lee, Mr Dichiera, Mrs Price, or Louisa Prevedello. Dr Collins noted that the evidence of each plaintiff had been directed to the general grief and annoyance felt by them as a result of the display by the defendant of the letter on its internet website, and, as such, that evidence was not tied to the causes of action, which the plaintiffs ultimately established.

242 It is well accepted that in a claim for damages for defamation, injury to feelings may constitute a significant part of the harm sustained by a plaintiff, and for which a plaintiff is to be compensated by damages. Thus, in Broome v Cassell & Co Ltd[77], Lord Diplock stated:

"The harm caused to the plaintiff by the publication of libel upon him often lies more in his own feelings, what he thinks other people are thinking of him, than in any actual change made manifest in their attitude towards him. A solatium for injured feelings, however innocent the publication by the defendant may have been, forms a large element in the damages ... even in cases where there are no grounds for 'aggravated damages'."

243 The authorities, to which I have been able to refer, do not, in specific terms, deal with the point which has been raised by Dr Collins on this aspect of the case. Indeed, some of the dicta in the authorities are not expressed in terms which tie compensation for injured feelings to proof of publication to third parties.

244 In Carson v John Fairfax & Sons Ltd[78], Brennan J stated:

"The consequences of publication include not only the insult publicly inflicted on the plaintiff but also the effect of the defamation on those to whom it is published, any diminution in the regard in which the plaintiff is held by others, any isolation produced (causing the plaintiff to be 'shunned or avoided' is a traditional formula) and any conduct adverse to the plaintiff engaged in by others because of the publication of the defamatory matter. Damages are awarded also for the plaintiff's injured feelings, including the hurt, anxiety, loss of self esteem, sense of indignity and the sense of outrage felt by the plaintiff. Indeed, all those objective consequences and the subjective restrictions which flow naturally from the publication of the defamatory matter are relevant factors."

245 Similarly, in McCarey v Associated Newspapers Ltd (No 2)[79], Diplock LJ stated:

"In an action for defamation, the wrongful act is damage to the plaintiff's reputation. The injuries that he sustains may be classified under two heads: (1) the consequences of the attitude adopted towards him by other persons as a result of the diminution of the esteem in which they hold him because of the defamatory statement; and (2) the grief or annoyance caused by the defamatory statement to the plaintiff himself. It is damages under the second head which may be aggravated by the manner in which or the motives with which the statement was made or persisted in."

246 Those dicta, and other statements in the authorities may, however, be explained by the circumstance that, ordinarily, the fact of publication, and the extent of publication, of the defamatory matter, are not in dispute. In particular, where a plaintiff complains of a defamation contained in a publication by the print or live media, it is invariably assumed that the publication has reached the minds of other persons. On the other hand, in the present case, the question whether the matter had been published by the defendant, and the extent of the publication by the defendant, was a central issue at the trial. Ultimately, the plaintiffs have only proven a limited scope of publication by the defendant of Mr Holding's letter on its website (apart from the "grapevine" effect to which I referred).

247 As a matter of the strict application of principle, the submission by Dr Collins is sound. The tort of defamation consists of the communication by the defendant, to a third party, or to third parties, of matter concerning the plaintiff, which was likely to injure the plaintiff in his or her reputation, by causing ordinary, reasonable members of the community to think less of that plaintiff. As I have already noted (in considering the question whether the defendant published the letter to Mr Glenn Miller), the tort of defamation is only committed, where the plaintiff has communicated the defamatory material to a third party or to third parties. It follows that the damages, to which a plaintiff may be entitled in an action for defamation, must be directed to the injury sustained by the plaintiff as a result of that publication. Thus, where the publication by the defendant, even by a public medium, has only reached the minds of, or been communicated to, a limited audience, juries are directed that it is only the publication to those recipients which could, in any way, have damaged the reputation of the plaintiff.[80]

248 On the other hand, the strict application of principle, in that way, does involve a significant degree of artificiality. Generally, where a defendant publishes matter about a plaintiff which is defamatory, the anxiety, embarrassment and grief, occasioned by the publication, may be at its most intense at an early stage, well before the particular plaintiff can know whether the matter has reached the mind of anyone else, and, if so, the extent to which the matter has been circulated. In such a case, the plaintiff may well have a properly founded apprehension that the publication by the defendant will have a widespread publication, because of the public nature of the means by which the defamatory matter is published (for example by way of newspaper, television or radio publication).

249 The same observation must apply to a publication about a plaintiff on the website of a defendant on the internet. In such a case, that which occasions distress and embarrassment to a plaintiff is the well founded apprehension that, because of the pervasive effect of the internet, the relevant publication may come to the attention of a large number of disparate recipients. Indeed, in the present case, such an apprehension by the plaintiffs was well founded. Mildura is a relatively confined community. The issue, with which Mr Holding's letter was concerned, was still topical, when the defendant published it in 2010. The plaintiffs did not learn, and indeed they could not have reasonably ascertained, that the letter was published by the defendant to only a very small number of recipients, until a short time before the trial of the case. In the meantime, each of the plaintiffs suffered a well founded apprehension that the letter had been published, about them, to a significant audience in the Mildura and surrounding communities.

250 In that way, the strict application of orthodox principle in such a case would not fairly compensate a plaintiff for the grief, which has been occasioned by the publication of the letter, notwithstanding that ultimately it is proven that the defendant's publication had only been circulated to a small and limited audience. However, I have been unable to locate any authority, which would justify me departing from the application of principle, which requires that the feelings of distress and embarrassment, for which damages are payable, must be consequent upon the publication, or publications, proven by the plaintiff. In the absence of such authority, I consider that I should apply the principle relied on by Dr Collins. Further, Mr Gilbertson did not contend that I should depart from that principle in determining damages in this case.

251 Indeed, ultimately, it is not necessary for me to resolve that legal issue, which would be more properly determined by appellate authority. For, as I have already stated, I am satisfied that, as a result of the "grapevine" effect, the letter, published by the defendant, and in particular the defamatory imputations in it, were disseminated to a moderately substantial number of persons in the Mildura and surrounding communities, as well as to the original four recipients of the letter. Accordingly, the plaintiffs are each entitled to be compensated, not only for the damage to their reputations, but also for the pain and embarrassment, which they have each sustained, as a consequence of the allegations, contained in the letter published by the defendant, having been disseminated to such an audience.

252 As I stated, the evidence of the plaintiffs, which was not in dispute, was that each of them has sustained substantial pain, embarrassment and humiliation as a result of the publication by the defendant of the letter on the internet in 2010. It is clear, from the evidence of each of those plaintiffs, that that pain and embarrassment was a consequence of their apprehension that the letter, by appearing on the defendant's website, reached a reasonably substantial audience in Mildura and surrounding communities.

253 When Mr Belbin originally read Mr Holding's letter in 2008, he was appalled by the fifth paragraph of the letter, which alleged that the FMIT Board members had broken the law by investing $2.2 million without Treasury approval. Mr Belbin found it distressing that it was alleged that he and his fellow Board members were guilty of breaking the law, which he regarded as a clear accusation that he and his fellow Board members were criminals. He perceived the letter to be a public assassination of the character of himself and his fellow Board members, without them being given any opportunity to respond. Mr Belbin said that when his wife read the letter, she was also furious. Mr Belbin was uncomfortable and distressed by the fact that the allegations were made publicly, and he was concerned about the impact which they had on his son who was still at school.

254 Mr Belbin stated that when he saw the letter on the defendant's website in 2010, he was disgusted, angry and upset. The letter rekindled the reactions, which he had had to it in 2008. As a result, his ability to react under pressure deteriorated. The republication of the letter, by the defendant on the internet, brought back to him all the stress, concerns and pressure, to which he had been exposed in 2008, and all the negative implications caused by that letter towards him, and his character and integrity. Mr Belbin stated that, as a result, he found it very difficult to deal with people in pressured situations. He had trouble sleeping, and he had to be prescribed medication by his doctor for that problem.

255 Mr Lee stated that in 2010, after the letter was republished on the internet, Mr Belbin appeared to be a broken man, and that the publication of the letter by the defendant had a devastating effect on him. Mr Belbin's wife, Diane Lewyn, stated that when she was told by Mr Belbin that the letter was on the internet, he was flustered and upset, and that he was distressed and angry about it. During 2009, Mr Belbin had become more available to his family, but when he found out that the letter was on the internet, it brought back all of the feelings, which he had experienced about it when it was first published in 2008.

256 When Mr Marciano saw the letter, his reaction was "like you have been wounded and they are rubbing salt in the wound". He said that in 2008, when he originally saw the letter, his brother had told him that he should be ashamed of himself, because (his brother considered) that Mr Marciano had "branded" the family's name in the whole community.

257 Mr Carmelo Cirillo stated that when Mr Marciano talked to him about the letter being on the internet in 2010, that Mr Marciano was a bit annoyed and stressed, because it put pressure on him because of the family name. Mr Cirillo stated that Mr Marciano, previously, had used to be friendly and welcoming, but after the letter was on the internet, he ceased to be approachable, and he had become irritable. Mr Cirillo stated that the publication of the letter on the internet hit Mr Marciano hard.

258 Mr Marciano's daughter-in-law, Marie Marciano, said that after the initial publication of the letter in 2008, Mr Marciano had been very upset. However, in the ensuing period his behaviour had improved. In 2010, when the letter was published by the defendant on the internet, Mr Marciano reacted with disbelief, and all the bad feelings, he had previously had, returned to him. She said that he was embarrassed and ashamed. He became distressed and quite aggressive with his family, to the point that he became unbearable to work with and intolerable in the family setting. She said that his health deteriorated, and in particular that, since then, he had had difficulty controlling his diabetes.

259 Mr Di Masi stated that in 2010, when he learnt that the Minister's letter was on the defendant's website, he felt that his reputation was "being put through the shredder", because the letter was being made publicly available to the world at large. He said that the letter reinforced everything, which he had felt in 2008 when he first read the letter, and it reinforced feelings that he had betrayed his family's reputation in the community. Mr Di Masi felt angry, but unable to do anything about it. He said that originally, when he read the letter in 2008, he spoke to his wife about it, and she had reacted with disbelief. Mr Di Masi's older brother had asked him if it was true. Mr Di Masi comes from a large family, and he felt that other members of the family were calling his integrity into question. He said that, as a result of the publication of the letter, a neighbour, who he very much respected, and who he used to regularly meet, expressed disgust to Mr Di Masi about the conduct of the Board, and, since then, has reacted quite differently to him.

260 After the publication of the letter on the internet, Mr Daniel Lee observed that Mr Di Masi became very angry, and that he really took offence at the fact that he was being called a criminal, without being given the opportunity to defend himself. Mr Cosimo Dichiera said that, when he spoke to Mr Di Masi about the letter in 2010, he seemed quite shocked by the fact it was there. Mr Di Masi was disappointed by the republication of the letter, and because it remained in the public eye for so long.

261 When Mrs Nancy Prevedello first read the letter in 2008, she said she was "gobsmacked", because she was being accused of being a criminal. She considered the allegation, that she had breached the trust of local irrigators, to be outrageous. She was particularly incensed, because the matters, referred to by the Minister in his letter, related to events, which had occurred before she joined the Board of FMIT. She said that after she first read the Minister's letter in September 2008, she told her husband how unfair it was, and he was very angry. Mrs Prevedello also spoke to her three sisters and her brother. She wrote to the Minister to protest about the letter, and received a response, which was entirely unsatisfactory.

262 Mrs Prevedello stated that when she was told that the Minister's letter was on the internet, she reacted with disbelief. The fact that the letter was on the internet brought back worse feelings than that she had originally had in 2008. She said that when the letter was first published in 2008, it felt like that she and her co-Board members had been "king hit". She said that, by sending the letter to irrigators, the Minister and the defendant had each been getting a "free kick" at her expense. When she found out that the letter was on the internet in 2010, she said "it was like we were being kicked and kicked and kicked all over again just because they could".

263 Mrs Prevedello's sister, Christine O'Callaghan, gave evidence that she spoke to Nancy Prevedello several times after she became aware of the publication of the letter on the internet. She said that her sister, Nancy, was absolutely furious. She said that Nancy is a person of great integrity, and that the publication of the letter on the internet was a "real kick in the guts to her".

264 Mary Price observed that Mrs Prevedello was hurt and indignant about the letter being on the internet. She was upset that she was being portrayed as dishonest, with no integrity, and having done irresponsible things.

265 Mrs Prevedello's daughter, Louisa, observed that her mother was very angry that the letter was still on the internet. Her husband, Bruno Prevedello, said that Mrs Prevedello was devastated that the letter was being published on the defendant's website. She told him that she felt that she was getting "her head kicked in for being called a criminal". After that, Mr Prevedello noticed that his wife has been restless at night, and that she would tell him that she could not sleep because she kept thinking about the material, which had been left on the website of the defendant about her.

266 I am satisfied that the reactions of the plaintiffs, to the publication of the letter on the internet by the defendant in 2010, are commensurate with the extent of the circulation of the letter, by the "grapevine" effect, which the plaintiffs have established. Certainly, the plaintiffs' reactions to the publication of the letter on the internet were due to their apprehension - which was later proven to be incorrect - that a reasonably substantial number of the community, to which they belonged, would have directly read the letter on the website. While that has not been the case, I am satisfied that, through the workings of the "grapevine" effect, a similar number of persons, in the Mildura and surrounding communities, would have learnt about the allegations republished by the defendant on its website in 2010. In that way, I am satisfied that the pain, embarrassment and distress occasioned to the plaintiffs, as a result of learning that Mr Holding's letter published by the defendant on its website in 2010, was relevantly causally linked to the proven publication of it by the defendant.

267 This aspect of the plaintiffs' claims is significant. The plaintiffs had already sustained a grievous blow, both to their reputations, and to their feelings, as a consequence of the publication of Mr Holding's letter in 2008. The publication of it by the defendant on its website in 2010 was a significant aggravation, both of the damage to the plaintiffs' reputations, and of their feelings of distress and hurt. In addition, the fact that the letter was published on the internet left the plaintiffs feeling vulnerable and powerless. Unlike other media publications, such as in the newspaper and on the television, the letter was not part of the 24 hour news cycle; rather, it was published, and left, by the defendant on the internet for a substantial period of time. The plaintiffs were not, at that time, to know who had, and who had not, seen and read the letter on the internet.

268 In addition, it must be remembered that the letter, published by the defendant, was disseminated by it in the very community in which each plaintiff lived and worked. It was published about a matter, which was still topical at that time. In that context, it was particularly distressing to the plaintiffs that the defamatory matter was being published by the defendant, who had taken over the functions and assets of FMIT.

Damages - evidence and cross-examination as to the "truth" of the imputations

269 A substantial part of the trial was occupied by detailed cross-examination, by senior counsel for the defendant, of Mr Belbin, Mr Marciano and Mr Di Masi concerning the supervision, by the Board of FMIT, of the investment by FMIT of the funds, which had been borrowed from TCV, with Grange Securities. In essence, the cross-examination was directed to establishing that the investment with Grange Securities was contrary to the BIP Act, that those three plaintiffs had failed to comply with their obligations as Board members in respect of the investment, and, in particular, that they had failed to ensure that the investment had been made in accordance with the authority given to FMIT by the Order in Council dated 5 April 2007.

270 The defendant relied on the evidence of those three plaintiffs, adduced by it in cross-examination, in mitigation of damages. In particular, it was submitted that that evidence established the substantial truth of the imputations relied on by the plaintiffs. Dr Collins submitted that, in that way, the defendant has established that Messrs Belbin, Di Masi and Marciano do not deserve to have unblemished reputations for financial responsibility, for complying with the law, and for good corporate governance.

271 In response, Mr Gilbertson submitted that the cross-examination of those three plaintiffs failed to prove the substantial truth of the imputations alleged by the plaintiffs. He contended that the cross-examination was unwarranted, and he relied on that cross-examination as a factor aggravating the damages which should be awarded to the plaintiffs.

272 In considering the submission made by Dr Collins, it is necessary to consider, first, whether the evidence of the three plaintiffs, cross-examined by him, did establish the substantial truth of the imputations relied on by the plaintiffs. Secondly, and allied to that, it is necessary to determine whether the matters adduced by Dr Collins, in cross-examination, are relevant to the mitigation of the damages to be awarded to Messrs Belbin, Di Masi and Marciano.

273 In essence, in respect of the first two imputations relied on by the plaintiffs (and found by the jury), the cross-examination by Dr Collins of Messrs Belbin, Di Masi and Marciano was directed to demonstrate, first, that the investment by FMIT of the borrowed funds with Grange Securities breached s 20 of the BIP Act, which requires an authority to invest monies in the manner approved by the Governor in Council. Secondly, Dr Collins sought to demonstrate that, in their supervision of that investment, those three plaintiffs had each breached their duties of directors under s 79 of the Public Administration Act 2004 (Vic) ("PA Act"), which requires each director of a public entity to exercise the functions of his or her office in a financially responsible manner, and with a reasonable degree of care, diligence and skill.

274 It is unnecessary for me to set out, in detail, the cross-examination of the three plaintiffs. It is sufficient to set out, briefly, the main points, elicited in cross-examination, upon which the defendant relies in mitigation of damages.

275 In summary, in cross-examination, Mr Belbin accepted that in investing the funds with Grange Securities, FMIT had breached the BIP Act. He accepted that the Board of FMIT had the oversight of the activities of the Trust, and that he had an obligation under the PA Act to act in a financially responsible manner. He also agreed that it was important that when investment decisions were made by staff of the Trust, the Board be made aware of those decisions, so that it could suitably supervise them. He did not accept that it was the responsibility of the Board to ensure that the finance manager understood the consequences of the Trust having become a declared authority under the BIP Act. He considered that that was an operational matter, in which he would have been briefed by the managing director of FMIT at his induction.

276 Mr Belbin agreed that the reports, which were received by the Board in May 2007, indicated that $4.2 million, borrowed from TCV, had been invested through Grange Securities. He could not recall whether any questions were asked at the next Board meeting about that investment. However, he did not accept that the lack of questions about it constituted a failure of oversight on behalf of the Board. Mr Belbin did not accept that, as chairman of the Board, he had a legal obligation to manage the finances of the Trust. He did not agree that the fact, that the Trust was not properly aware of the changed circumstances, resulting from it becoming a declared authority (pursuant to the Order in Council dated 5 April 2007), reflected a failure of oversight by the Board. Mr Belbin emphasised that the investments had been made by officers of the Trust, and not by the Board. He stated that the Board did not direct the Trust officers to invest in the United States sub-prime mortgage market.

277 In cross-examination, Mr Marciano accepted, that in hindsight, the investment with Grange Securities was against the law. He also accepted that the Board had the responsibility to ensure that the Trust acted within the law. He accepted that it was a grave mistake to allow an unlawful investment to have been made. He accepted that, in hindsight, the Grange Securities investment involved a breach of the law, and, thus, that he had unintentionally broken the law.

278 In cross-examination, Mr Di Masi stated that he only learnt, some time after the monies had been invested with Grange Securities, that there were limitations on the approved investments, which FMIT could make. He said that he now understands that the Trust breached the legal requirements, by not investing the monies in a manner consistent with the approval granted by the Governor in Council. He accepted that, in hindsight, it was a failure of oversight by the Board not to have detected that the investment was not consistent with the approval granted by the Governor in Council. He agreed that the Board should have been aware that there were legal limitations on the approved investments as soon as possible after the Order in Council came into effect.

279 Mr Di Masi stated that the role of the Board was to set policy, as distinct from conducting the day to day operations of the Trust. He said that the manager's role was to manage the staff, and to provide appropriate advice to the Board. He said that, in hindsight, the staff had made a mistake. However, he did not agree that the Board failed to adequately oversee the work of the staff.

280 Mr Di Masi also agreed that the failure of the staff to comply with the Statement of Obligations, of FMIT, reflected a failure of oversight on the part of the Board. He agreed that that was a serious matter. He also agreed that it was a failure of the Trust to have become overdue in the payment of its environmental contributions, and that a financially responsible Board would not have permitted those contributions to have become outstanding. Mr Di Masi also agreed that the investment with Grange Securities breached the BIP Act, and that that breach was not detected by the Board in April, May or June of 2007. He accepted that that reflected a shortcoming on the part of the oversight by the Board.

281 The third imputation - concerning the approval of changes to the contracts of senior employees of FMIT - was also the subject of similar cross-examination by senior counsel for the defendant. In cross-examination, Mr Belbin agreed that, in about June 2008, the Board of FMIT approved changes to the employment contracts of its four senior officers, namely, the business manager, the engineering services manager, the finance manager and the managing director. The effect of those changes was that if the Trust was taken over by the defendant, those staff members had an option to take twelve months' salary by resigning at any time before the end of their contract. Mr Belbin stated that the Board of FMIT approved the changes of the contracts of those four officers for two reasons. At that time, the Trust was under a substantial amount of external pressure relating to its future. The Board wanted to provide an incentive for the four officers to continue working for the Trust. In addition, some of the officers had worked for a number of years for the Trust, and, if a takeover by the defendant occurred, their positions would be in jeopardy.

282 In cross-examination, Mr Belbin agreed that two of those members of staff, in respect of whom contract changes were approved, had been primarily responsible for the investment in Grange Securities, which breached the BIP Act. He said that although he was familiar with the Government Sector Executive Remuneration Panel, he was not familiar with the guidelines, produced by that Panel, concerning the termination payment entitlements of senior staff. He agreed that FMIT did not advise the Minister for Water, his Department, or DTF, that it had made the changes to the contracts of its four senior officers.

283 In cross-examination, Mr Marciano stated that he considered that there was nothing wrong about the changes to the contracts of employment of the four senior staff members. He said that those officers were becoming concerned that their positions were vulnerable. Thus, the changes to the contracts were designed to retain those staff members, and to make it worthwhile for them to remain with FMIT. Mr Marciano considered that the Board owed it to the senior staff officers to maintain them in their positions. He was not aware of the governmental guidelines for termination payments. He did not accept that the Trust should have complied with those guidelines for termination payments.

284 In his evidence in chief, Mr Di Masi stated that the Board had been discussing the staff contracts for about three months before the amendments, to the contracts of the four staff members, were approved. He said that the Board had become concerned about the publicity relating to a possible takeover of FMIT by the defendant. He said that in previous years, when Sunraysia Rural Water Authority had been taken over by the defendant, the staff of Sunraysia Rural had been poached by other authorities. FMIT had been given a deadline to meet the requirements of the Minister. If FMIT were, at that stage, to lose one of its key staff members, there would have been a real difficulty in meeting those deadlines.

285 In cross-examination, Mr Di Masi agreed that the Board signed off on the changes to the employment contracts of the four senior staff members in June 2008. He agreed that no-one told the Minister or his department about the changes, but he said that there was nothing secret about them. He said that the Board, as a rural water authority, would have advised DSE, through its normal annual reporting process, of the changes to the contract.

286 In his evidence in chief, Mr Leamon stated that the payout arrangements, effected by the amendments to the contracts of the four staff members, were contrary to the Victorian Government Sector Executive Remuneration Policy guidelines, which only permitted the payment of four months' remuneration in lieu of notice.

287 As I have stated, Dr Collins submitted that the evidence, which I have just summarised, established the substantial truth of each of the imputations relied upon by the plaintiffs. In particular, he contended that the first two imputations were cast in terms, which were wider than the allegations contained in the corresponding passages in Mr Holding's letter. He submitted that those two imputations related to the reputations, of each of Mr Belbin, Mr Di Masi and Mr Marciano, for complying with their legal obligations as Board members, and for acting with financial responsibility in the discharge of those obligations. He submitted that the third imputation related to the plaintiffs' reputations for good corporate governance. Dr Collins submitted that, as a result of the concessions and evidence adduced in cross-examination, the defendant had proven that, as members of the Board, they had not acted in compliance with their legal obligations, and that they had not acted with financial responsibility. He submitted that the defendant had established financial irresponsibility by those three plaintiffs "... of a very serious kind and conduct that was not, patently not, in the interests of the FMIT which had as their direct result the closure of that Trust".[81] Thus, he submitted that I should not award damages on the basis that those three plaintiffs - Mr Belbin, Mr Di Masi and Mr Marciano - deserved unblemished reputations in the area of corporate governance. He submitted that, rather, they "... failed and failed spectacularly in their oversight of this Trust".[82]

288 Notwithstanding the submissions of Dr Collins, I do not accept that the evidence, which I summarised above, establishes the truth, or the partial truth, of the imputations alleged by the plaintiffs, and found by the jury.

289 It is important to bear in mind the imputations which were put to the jury. In particular the first two imputations, relied on by each plaintiff, were that:

(a) The plaintiff broke the law by investing $2.2 million of Victorian Government money without Treasury approval;

(b) The plaintiff acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market.

290 Both of those imputations contain a common allegation, namely, that the Board itself invested the money, borrowed from the government, in the manner described in Mr Holding's letter. Those imputations reflect, accurately, the allegations made by Mr Holding in the fifth and sixth paragraphs of his letter. In that letter, Mr Holding alleged that it was the Board which invested the money. It was clear from the evidence, and indeed not put in dispute by the defendant, that the Board did not invest the money with Grange Securities. Rather, the evidence, which was not challenged, was that it was a manager of FMIT who invested the money with Grange Securities, without any direction or instruction by the Board that he do so. Certainly, the Board, shortly thereafter, became cognisant of that fact. Nevertheless, it was not argued at the trial, nor could it have been, that the subsequent knowledge by the Board, of the investment, was equivalent to the Board itself having made the investment.

291 The imputations, pleaded by the plaintiffs, were left in their specific form to the jury, for the reasons which I have discussed earlier.[83] In conformity with the decision of the High Court in Chakravarti v Advertiser Newspapers Ltd[84], and the decision of the Court of Appeal in David Syme & Co Ltd & Anor v Hore-Lacy[85], the question for the jury (Question 2) was whether the plaintiff had established that the matter complained of, in its ordinary and natural meaning, "would have conveyed to the ordinary reasonable reader any of the following imputations, or imputations not substantially different from" the three imputations pleaded by the plaintiffs. I instructed the jury that, in answering that question, it was not necessary for the jury to conclude that the exact meaning or meanings, proposed by the plaintiffs, were conveyed by the words. I directed the jury that it would be sufficient if the jury was to conclude that the words contained another injurious meaning, or meanings, about the plaintiffs, which was or were a variant of, and not substantially different from, and not more serious than, a meaning, or the meanings, relied on by the plaintiffs.

292 Thus, the jury verdicts on Question 2 were not directed, in a general manner, to the question of whether the plaintiffs had acted responsibly, or in conformity with their legal obligations, in respect of the investments made by the Trust with Grange Securities. Rather, the jury, by its verdicts, found that the letter conveyed the defamatory imputations that the plaintiffs broke the law "by investing" Victorian Government monies without Treasury approval; and that they acted irresponsibly and outside the law "by investing" monies loaned from the Victorian Government in the United States sub-prime mortgage market. As I stated, the matters adduced in cross-examination, which I summarised above, do not, in any manner, justify, or support the truth, of either of those imputations.

293 It is important to bear in mind that, by its answer to Question 2, the jury found that the letter was defamatory of the plaintiffs in particular respects. In other words, as a result of the finding of the jury, the plaintiffs have established that they were each defamed by the allegations, made by the defendant, that each of them had invested the monies borrowed from the Victorian Government, contrary to the law, and in an irresponsible manner. Nothing elicited, in cross-examination of the plaintiffs, establishes even the partial truth of either of those allegations.

294 In addition, by the second imputation, the defendant did not, just, accuse the plaintiffs of investing the monies loaned from the government in an irresponsible manner and outside the law; it specifically alleged that each plaintiff acted in that manner by investing the monies, loaned by the Victorian Government, in the United States sub-prime mortgage market. At the time at which the finance manager reported to the FMIT Board that the monies were invested with Grange Securities, there is no evidence that any of the plaintiffs knew that Grange Securities was, in any way, connected with the United States sub-prime mortgage market. Indeed, the unchallenged evidence of the plaintiffs was that the plaintiffs understood that Grange Securities was an investment broker. FMIT had previously placed monies with Grange Securities for investment by it. Mr Belbin stated that, in previous years, Grange Securities had sourced appropriate investments for FMIT, such as with the Elders Rural Bank. Thus, at the time at which the Board became cognisant of the fact that the finance manager had placed the money with Grange Securities for investment - in May 2007 - the Board did not know, or intend, that the money be placed with the United States sub-prime mortgage market. There is no suggestion in the evidence that it did have such knowledge. Nor was any cross-examination directed to the plaintiffs to that effect.

295 The imputations, found by the jury, are to be understood in the context of the letter published by the Minister, which, as I stated, specifically alleged that the Board members invested the money, and that they did so with the United States sub-prime mortgage market. The sting of the first two imputations, in that context, was that, rather than applying the loan monies for their intended public benefit - in upgrading local irrigation infrastructure - the FMIT Board members, on a frolic of their own, chose to place it in a high risk investment, where it lost nearly all of its value. Clearly, the matters adduced in cross-examination of Messrs Belbin, Marciano and Di Masi do not, in any manner, meet that basic sting of the first two imputations, which, in turn, are derived from the fifth, sixth, seventh and eighth paragraphs of the Minister's letter published by it.

296 In light of the matters to which I have just referred, it is not surprising that the defendant did not retain the defence of justification, which it had hitherto pleaded, at trial. It is also understandable that the defendant did not seek to rely on some alternative meaning of Mr Holding's letter, within the confines of the principle stated by the Full Court in David Syme & Co Ltd v Hore-Lacy[86]. Based on the matters adduced in cross-examination of the plaintiffs, any such defence would have been bound to fail, on the basis that such matters would not have justified, even partially, the fundamental allegations contained in the first two imputations pleaded by the plaintiffs.

297 The force of each of those imputations, and, in particular, the second imputation, was magnified by the allegation in the letter, published by the defendant, that the investment by the FMIT in the United States sub-prime mortgage market lost $2,000,000 of its value. The evidence demonstrates that, by November 2008, that allegation was wrong, because, by then, $1.5 million of the investment had been recovered. The reference, in the letter, to the size of the loss, reinforced the sting contained in the first two imputations, which I already discussed. At the time at which the letter was published to the four proven recipients in this case, that allegation was incorrect. That circumstance would have made it even more difficult for the defendant to seek to justify the first two imputations, either wholly or partly.

298 On its face, the evidence adduced, in cross-examination, relating to the amendments to the contracts of the four senior staff members of FMIT, does, in part, establish some of the factual allegations, contained in the third imputation, namely, that the "... plaintiff(s) approved secret last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over". The Board did approve substantial adjustments to the provisions of the contracts which related to the termination payment entitlements of each of those four officers. The approval took place in June 2008. The Board did not advise the Minister, or his Department, of the changes to the officers' contracts. The changes, approved by the Board, were not in conformity with the Victorian Government Sector Executive Remuneration Policy guidelines.

299 However, the facts, elicited by Dr Collins in cross-examination, do not, in substantial measure, meet the fundamental sting of the third imputation. The adjustments to the contracts were not "last minute". Nor were they "secret". They were made by Board resolution, and formed part of the Board papers. The basic sting of the imputation - that is, the defamatory allegation published by the defendant - is that the Board acted in a sinister, furtive manner which was in disregard for its corporate responsibilities. The defendant did not contest the explanation given by Mr Belbin, Mr Di Masi and Mr Marciano for those changes, namely, the Board's concern that it needed to provide some assurance to staff members, at a critical stage, at a time at which it was critical to FMIT to retain those officers' services.

300 In that context, it is, again, not surprising that the defendant did not, at trial, retain its plea of justification in relation to the third imputation; nor did it plead justification to a permissible variant of that imputation. In that way, while the matters adduced in cross-examination do, in part, prove the truth of that imputation, they fall well short of providing a defence of justification to it, which would have succeeded at trial.

301 Based on those conclusions, it is necessary, next, to determine whether, as a matter of law, the matters elicited by Dr Collins, in cross-examination, are relevant to the mitigation of the damages to be awarded to Messrs Belbin, Di Masi and Marciano.

302 Until the decision of the English Court of Appeal, in 2001, in Burstein v Times Newspapers Ltd[87], the relevant principles were quite settled. They derived, in substantial measure, from the decision of the Court of Queen's Bench Division in Scott v Sampson[88]. In the leading judgment of that Court, Cave J resolved the question, which had been in dispute for some time, as to whether a defendant is entitled to adduce evidence relating to the plaintiff's reputation. His Lordship stated three important principles. First, a defendant is entitled to adduce evidence as to the bad reputation of a plaintiff. Secondly, in doing so, the defendant is not entitled to adduce evidence of rumours and suspicions to the same effect as the defamatory matter complained of. Thirdly, the defendant is not permitted to adduce evidence as to particular facts or incidents tending to show the character and disposition of the plaintiff.[89] Those principles have been applied consistently over the last 130 years. They were expressly approved and applied by the House of Lords in Plato Films Ltd & Ors v Speidel[90].

303 On the other hand, it is well established that evidence, which has been adduced in support of a plea of justification which fails, and evidence adduced in support of a plea of partial justification of a severable libel, may be taken into account in mitigation of damages.[91] However, until Burstein's case, in the absence of a plea of justification, a defendant was not permitted to adduce evidence, as to the truth of the imputations complained of, in mitigation of damages.[92]

304 In Burstein v Times Newspapers Ltd[93], the Court of Appeal was concerned with the issue whether a defendant is entitled to adduce evidence, which might otherwise have been relevant to a defence of justification, in the absence of a defence of fair comment or justification. In that case the plaintiff, a musical composer, complained of an article describing him as a person who used to organise bands of hecklers "to go about wrecking performances of modern atonal music ... ". The defendant pleaded a defence of fair comment, which was struck out by the trial judge. In support of that defence, the defendant had pleaded a number of facts, including that the plaintiff had, in the past, belonged to a group called the "Hecklers", which had encouraged the public to join them in booing a performance of an opera, and that, at that performance, the claimant and the hecklers had booed it. Having struck out the defence of fair comment, the trial judge ruled that that evidence was not admissible on the question of damages.

305 On appeal, the Court of Appeal held that the trial judge ought to have admitted the evidence. However, it concluded that, if the evidence had been admitted, the award of damages would not have been materially affected. Accordingly, it dismissed the appeal.

306 The leading judgment of the Court of Appeal was delivered by May LJ. His Lordship undertook a detailed analysis of the authorities, including Scott v Sampson and Plato Films Ltd v Speidel. He concluded that the reason, why the law excludes evidence of particular facts and circumstances, tending to show the disposition of the plaintiff, is to avoid the trial of a defamation action being diverted into a trial of collateral and subsidiary issues. However, he held that the exclusion of that evidence "... would not extend to exclude particular facts directly relevant to the context in which a defamatory publication came to be made".[94] He stated:[95]

"In my view, these authorities show that it is not permissible to advance an unsustainable defence of justification and thereby, under the guise of particulars of justification, seek to rely on particulars which Scott v Sampson (citation omitted) and Speidel v Plato Films Ltd (citation omitted) would not permit. That, however, does not prevent a defendant from frankly accepting that there is no proper plea of justification, but seeking to rely in reduction of damages on particulars which Scott v Sampson and Speidel v Plato Films Ltd do not exclude. If this were not so, there is a danger that the jury would be required to assess damages in blinkers, in ignorance of background context directly relevant to the damage which the claimant claims as being caused by the defamatory publication."

307 In Turner v News Group Newspapers Ltd[96], the Court of Appeal approved and applied its previous decision in Burstein. Keene LJ considered that the decision in Burstein was not inconsistent with Scott v Sampson and Speidel's case.[97] He emphasised that, in order to be admissible, the evidence must have direct relevance to the subject matter of the defamatory words. He concluded:[98]

"What constitutes the directly relevant background will vary from case to case, but I would myself accept the need for courts to proceed ... with some caution in applying Burstein's case, given that it represents a modification of the long standing rule in Scott v Sampson. ... If evidence is to qualify under the principle spelt out in Burstein's case, it has to be evidence which is so clearly relevant to the subject matter of a libel or to the plaintiff's reputation or sensitivity in that part of his life that there would be a real risk of the jury assessing damages on a false basis if they were kept in ignorance of the facts to which the evidence relates."

308 Burstein's case has had a somewhat mixed reception in Australia. In Australian Broadcasting Corporation v McBride[99], the New South Wales Court of Appeal, uncritically, quoted and applied the judgment of Mayo J in Burstein. On the other hand, in Western Australia Newspapers Ltd v Elliott[100], Steytler P, on a pleading summons, stated that:

"The scope of the decision in Burstein is to some extent uncertain and its application may be difficult in particular cases ... ."

His Honour quoted the passage from the judgment of Keene LJ in Turner, which I have stated above, noting that the courts must proceed with caution in applying Burstein's case. In Channel Seven Sydney Pty Ltd v Mahommed[101] McColl JA (with whom Spigelman CJ, Beazley JA, McClellan CJ at CL and Bergin CJ in Eq agreed) also noted that the proper application of Burstein's case was still undecided, and that there was a need for the courts to proceed with caution in applying that case.

309 The question, then, is whether, based on the authorities to which I have just referred, the evidence, relied on by Dr Collins, may be taken into account in mitigation of the damages to be awarded to Messrs Belbin, Di Masi and Marciano. The evidence was not adduced in support of a defence of justification, or in support of a defence of partial justification or fair comment. I shall return, later, to the circumstances in which the cross-examination of Dr Collins, which I summarised above, took place. In essence, at an early stage, Dr Collins submitted that he ought to be permitted to direct relevant cross-examination in answer to the opening by Mr Gilbertson, in which he foreshadowed adducing evidence which would "nail the lies" in the defamatory imputations complained of by the plaintiffs. In final address, Dr Collins submitted that the evidence, which he elicited in cross-examination, was directed to that purpose. He submitted that, on the authority of Burstein's case, that evidence may be used in mitigation of damages.

310 It is not unusual for a plaintiff, in a defamatory trial, to give evidence which is designed to demonstrate the lack of truth of the defamatory imputations of which the plaintiff complains. Ordinarily, for reasons of prudence, the defendant does not join issue with it, in the absence of a plea of justification or fair comment. Any such cross-examination would, first, need to navigate around the rule stated by the Court of Queen's Bench Division in Scott v Sampson. Secondly, any such cross-examination would be undertaken at the risk that, by doing so, the defendant might significantly aggravate the damages to be awarded to the plaintiff.

311 Apart from Burstein, there is no authority for the proposition that, in the absence of a plea of justification or fair comment, matters elicited in cross-examination, as to the truth of the allegations, may be relied on in mitigation of damages.

312 In Plato Films Ltd v Speidel[102], Lord Denning explained the rationale for the principle that a defendant is entitled to plead partial justification to a defamatory imputation, in terms which provide some support for the principles stated in Burstein. Lord Denning stated:

"Seeing that the law does not permit a defendant, in mitigation of damages, to adduce evidence which tends to justification, it must permit him to adduce the self same evidence when pleaded in partial justification ... If it were not so, the plaintiff would recover damages for a character which he did not possess or deserve; and this the law will permit."

313 That passage was relied on by May LJ in Burstein's case in support of the conclusion that, in the absence of a plea of justification, it is permissible to adduce evidence directly relevant to the background context. In Turner v News Group Newspapers Ltd[103], Keene LJ acknowledged that Burstein's case constituted an extension of the common law beyond the point which it had reached in the decision in Plato Films v Speidel in 1961. As I have noted, the extension of the law, by Burstein, was approved and applied by the New South Wales Court of Appeal in Australian Broadcasting Corporation v McBride. In light of that decision, and in light of the fact that the same court, in Channel Seven Sydney Pty Ltd v Mahommed, and the Western Australian Court of Appeal, in Western Australian Newspapers Ltd v Elliott, did not disapprove the decision, I consider that, sitting at first instance, I should apply the decision in Burstein. However, as the courts have noted, the principle, stated in Burstein, must be applied with caution.

314 As I have already stated, the evidence, elicited in the cross-examination of Messrs Belbin, Di Masi and Marciano, did not prove the truth of the critical allegation contained in the first two imputations, namely that the Board members had invested the monies, borrowed from the Victorian Government. Secondly, the cross-examination did not prove that, when the investment was made, the plaintiffs knew that Grange Securities was lending funds to the United States sub-prime mortgage market. Thus, in terms of the second imputation, the defendant has failed to prove, not only that the plaintiffs invested the borrowed monies, but that they invested it in the United States sub-prime mortgage market.

315 Dr Collins submitted that the first two imputations related to the reputations of each of the three plaintiffs for compliance with legal obligations, and for financial responsibility. He submitted that the matters elicited in cross-examination, which I have already summarised, demonstrate very serious financial irresponsibility by Messrs Belbin, Di Masi and Marciano, which, he asserted, was a direct cause of the failure of FMIT. In essence, as I stated, Dr Collins submitted that those three plaintiffs do not deserve an unblemished reputation for compliance with legal obligations, for financial responsibility, or for good corporate governance.

316 The submission, made by Dr Collins, substantially overstates the effect of the evidence elicited from the three plaintiffs in cross-examination. Certainly, the evidence establishes, and indeed it was accepted by Mr Di Masi and Mr Marciano, that there were shortcomings by the then members of the Board in the performance of their functions. The Board members should have known, but did not know, of the terms of the Order in Council dated 5 April 2007, which prescribed the investments, which might be made by FMIT in respect of funds borrowed by it from the government. Further, when the finance manager of FMIT reported having placed the funds, borrowed from TCV, with Grange Securities, the Board ought to have ascertained just how Grange Securities was investing, or intending to invest, those funds.

317 However, those observations fall well short of sustaining the proposition relied on by Dr Collins. First, the undisputed evidence was that, at that time, Grange Securities was understood to be a reputable investment broker. It had sourced investments on behalf of a number of clients, including FMIT, for some years. There was no evidence which, in any way, ought to have put the members of the Board of FMIT on notice that Grange Securities was placing, or might place, the monies, borrowed from TCV, in high risk investments. Secondly, the placement of those investments with Grange Securities must be considered in the then context, and not, solely, with the wisdom of hindsight. The undisputed evidence (of Mr Belbin) was that he ascertained, later in 2007, that a large number of government business organisations had invested monies with Grange Securities, and that those investments had been approved. Based on that advice, Mr Belbin wrote to the Treasurer seeking approval to hold the Grange Securities investments.

318 Thirdly, it is an overstatement to maintain that the shortcomings of the Board members, to which I have referred, directly caused the failure of the Trust. In his letter, Mr Holding gave, as a reason for his decision, the fact that the Board had invested the money, borrowed from TCV, with the United States sub-prime mortgage market. However, as I have already pointed out, that statement was factually incorrect; the Board did not make the investment. Further, there is no evidence that, if the Board, on learning of the investment, had made appropriate inquiries of the finance manager, FMIT would have recovered the investment. The only evidence, as to that issue, is that in July 2007 FMIT drew down $2,000,000 of the funds invested with Grange Securities, in order to pay for some of the irrigation works, which it was then undertaking. That evidence, without more, is an inadequate basis for an inference that if the Board had made appropriate inquiries of the finance manager, the balance of the monies, invested with Grange Securities, would have been recovered. The proposition made by Dr Collins, in that respect, is based on speculation, and not on evidence.

319 As I stated, the evidence, which was elicited from Mr Belbin, Mr Di Masi and Mr Marciano in cross-examination, does demonstrate shortcomings by those plaintiffs, as members of the FMIT Board, in the discharge of their roles. Those shortcomings were not insignificant. However, even taken at their highest, the shortcomings by those three plaintiffs, in the performance of their functions as Board members, were substantially less serious than the unsubstantiated defamatory allegations published by the defendant of and concerning them, as reflected in the first two imputations found by the jury.

320 It is one matter to allege that the plaintiffs failed in their duties as members of the Board, first, by not ascertaining the legal restrictions on investments which might be made by FMIT, and, secondly, by not inquiring of the finance manager of FMIT as to the investments which Grange Securities had made, or was intending to make, with monies borrowed by FMIT from the government, and that thus the plaintiffs failed to ascertain that the investments made by Grange Securities were contrary to the legal limits contained in the Order in Council and prescribed under the BIP Act. It is an entirely different, and far more serious, matter for the defendant to allege, as it did, that: each of the four plaintiffs broke the law by investing $2.2 million of Victorian Government money without Treasury approval; and that each of the four plaintiffs acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market. In that way, in my view, the matters elicited in cross-examination from the three plaintiffs do not have a material effect in mitigating the damages to be awarded to the plaintiffs.

321 As I have already observed, in relation to the third imputation, the evidence adduced in cross-examination does establish that, in June 2008, the Board did approve adjustments to the provisions of the contracts of four senior officers, which entitled those officers to substantial termination payments, if FMIT were taken over during the next twelve months. Those changes, approved by the Board, were not consistent with the Victorian Government Sector Executive Remuneration Policy guidelines. The Board did not advise the Minister, or his Department, of the changes to the contracts.

322 However, as I have also stated, those facts do not, in substantial measure, meet the fundamental sting of the third imputation, namely that the Board acted in a sinister and furtive manner which was in total disregard of its corporate responsibilities. Rather, as I have already noted, the uncontested evidence of the three plaintiffs was that the changes to the contracts were made for a good commercial purpose, namely, in order to ensure that FMIT retained important members of staff at a time when the loss of the services of any of them might have been critical. In that way, the matters established in cross-examination, fall well short of justifying the sting of the third imputation, particularly in the context of the letter of the Minister which was published by the defendant.

323 For those reasons, I am not persuaded that the matters, elicited by the defendant in cross-examination, mitigate the damage occasioned to Messrs Belbin, Di Masi and Marciano as a result of the defamatory imputations published of them by the defendant.

324 I have already summarised the submissions made by Mr Gilbertson in support of the claim by the plaintiffs for an award of aggravated damages. In short, Mr Gilbertson relied on six factors, namely:

(1) The abandoned defences of justification which had been maintained until shortly before trial.

(2) The verdicts of the jury on the issue of malice.

(3) The allegation by the defendant, in its defence, that it had ceased publication of the letter on its website in late 2009, notwithstanding that Mr Leamon knew, in July 2010, that it was still on the website.

(5) The cross-examination of Messrs Belbin, Di Masi and Marciano, which was directed to establishing the truth of the imputations.

(6) The opening by senior counsel for the defendant to the jury.

325 In Herald & Weekly Times Ltd v Popovic[104], Gillard AJA described the function of aggravated damages as follows:

"Compensatory damages for aggravation to the plaintiff's feelings can be awarded in defamation cases. They are not exemplary or punitive damages and are awarded as compensatory damages. They are not awarded as punishment; they are awarded to compensate the plaintiff for the increased injury to his or her feelings brought about by the conduct of the publisher."

326 The principles, relating to a claim for aggravated damages, are not in dispute. First, in assessing damages, the Court is entitled to consider the whole conduct of the defendant, from the time of publication of the defamatory matter to the time of verdict or judgment.[105]

327 Secondly, aggravated damages are not a separate head of damages. As stated by Gillard AJA in Popovic, the Court includes the amount for aggravated damages in the compensatory damages awarded by it.[106]

328 Thirdly, an award of damages may only be made where the conduct of the defendant is lacking in bona fides, or is improper or unjustifiable.[107]

329 Fourthly, damages may be aggravated by the manner in which, or the motives with which, the defamatory statement was made or persisted in.[108]

330 Fifthly, depending on the circumstances, a failure to apologise and express regret can constitute improper or unjustifiable conduct.[109] Ordinarily, it may be difficult to establish that a mere failure to apologise, without more, aggravates damages in a particular case.[110] However, in the context of other factors, by failing to publish a retraction or apology a defendant may be seen to be continuing to assert the imputations published by it.[111]

331 Sixthly, ordinarily, aggravated compensatory damages are only awarded in relation to the injury to the plaintiff's feelings. However, there may be conduct by the defendant which has the effect of increasing the injury to the reputation of the plaintiff.[112]

332 Based on those principles, I have come to the conclusion that it is appropriate, in each case, to include a component of aggravated damages in the compensatory damages to be awarded to the plaintiffs. I have reached that conclusion as a result of a combination of a number of factors.

333 The first factor is the defence of justification pleaded in the first three defences delivered in each proceeding. The four proceedings were each issued on 31 August 2010. In the statement of claim endorsed on the writ, the plaintiff, in each case, alleged the three imputations which the jury, by its verdicts, found in answer to Question 2. The defendant, in each proceeding, delivered its first defence on 17 September 2010. It delivered an amended defence on 8 November 2010, and a second amended defence on 17 March 2011.[113] In each of those three defences, in each proceeding, the defendant pleaded a defence of justification. That plea remained in the defence, in each proceeding, until the delivery of the third amended defence, by the defendant, in each proceeding on 16 November 2011.

334 It is extraordinary that, in the proceeding in which Nancy Prevedello is a plaintiff, the defendant delivered three successive defences containing a plea of justification. The defendant knew that Nancy Prevedello did not join the Board until 1 July 2008, well after the investments had been placed with Grange Securities, and well after the adjustments to the contracts of the four senior officers of the Trust had been approved by the Board. Further, as I have already stated, there was no basis to plead a defence of justification in the proceedings commenced by Messrs Belbin, Di Masi and Marciano. Such a defence was bound to fail, particularly in relation to the first two imputations pleaded in each proceeding. At the time of the delivery of the defences, the defendant had in its possession the Board papers, and other relevant records, of FMIT. Mr Leamon had access to, and indeed had perused, those documents. It is clear, from those documents, that the defendant did not have any evidence in its possession, which would enable it to prove the truth of the critical allegation contained in the first two imputations, namely, that the Board members had invested the monies, borrowed from the government, with Grange Securities, with the United States sub-prime mortgage market, or indeed with anyone.

335 Thus, the first three defences, alleging the substantial truth of those allegations, were quite unjustified. As I have already stated, it is understandable that when the third amended defence was delivered, on 16 November 2011, the defendant made the decision to omit, from the defence in each proceeding, the plea of justification. The unjustified pleading of that defence, in the first three defences delivered in each proceeding, was, of itself, an aggravating factor. On the evidence of each of the plaintiffs, I am satisfied that the delivery of that defence in each proceeding exacerbated feelings of distress and embarrassment to the plaintiffs. It is particularly understandable that Mrs Prevedello should have reacted, as she said, with sheer anger.

336 Further, the defences pleaded by the defendant in each of those proceedings were public documents. By those defences, the defendant was placing, on the record, that it stood by and maintained the truth of the allegations, made by it, of which the plaintiffs complain. In that way, the defendant persisted in, and continued to assert, the imputations, which defamed the plaintiffs. By that conduct, the defendant also aggravated the damage to the reputations of each plaintiff.

337 In that context, the failure of the defendant to apologise for the defamatory imputations published by it about each of the four plaintiffs constitutes a further aggravating factor. By that stage, the defendant had not only published the defamatory allegations about each of the plaintiffs (including Mrs Prevedello), but it had also, by three successive defences, maintained that the imputations, pleaded by the plaintiffs, were substantially true. That plea was removed, by its deletion in the third amended defence (pleaded 16 November 2011), without any explanation, or without the defendant, in any way, retracting the allegation. Having defamed the plaintiffs, and having in three successive defences claimed that the defamatory imputations were true, the defendant, by failing to retract the allegations and apologise for them, aggravated the damage to the plaintiffs.

338 The third, and allied, aggravating factor, arises out of the conduct of the defence of the defendant at the trial of each of the four proceedings. Notwithstanding that the defendant had made the decision to omit, from its defence in each proceeding, the plea of justification, senior counsel for the defendant, at a very early stage of the trial, made it plain that the defendant sought to prove the truth of the allegations contained in the letter about which the plaintiffs complain.

339 In opening the plaintiffs' case to the jury, Mr Gilbertson had summarised the circumstances in which the money, borrowed from TCV, had been placed with Grange Securities for investment. In particular, he pointed out that the Board of FMIT did not resolve to invest the money with Grange Securities. He also noted that the defendant did not rely on a defence of truth. He outlined the defences relied on by the defendant, including the defence of qualified privilege. He contended that the plaintiffs would establish that the conduct of the defendant, in publishing the letter on the internet, was unreasonable, because the defendant knew, or ought to have known, that a number of matters in the letter were not true. He then outlined those matters, including the allegation that FMIT had invested $2.2 million of Victorian Government money without Treasury approval in the United States sub-prime mortgage market.

340 In cross-examination of the first witness, Mr Lee, Dr Collins commenced to ask questions concerning allegations, which had appeared in the local newspaper in 2008 concerning the investment with Grange Securities. Mr Gilbertson objected. Dr Collins stated that the cross-examination was relevant to the defence of qualified privilege. However, and in front of the jury, he sought to foreshadow that the cross-examination was relevant to the issue of the truth, or falsity, of the imputations which were pleaded. He submitted that he was entitled to do so because, in opening the case, Mr Gilbertson had put the truth or falsity of the imputations in issue. In making that submission, Dr Collins stated:

"Having done that, I am entitled ... to cross-examine as to the truth or falsity of the imputations pleaded by the plaintiff. My friend has put them in issue and I am entitled to answer them and the line of questioning, although primarily directed to the media coverage, will also go in due course to the substantive allegation about the truth or falsity of the imputations."

341 That, then, was the basis upon which Dr Collins embarked on detailed cross-examination of Messrs Belbin, Di Masi and Marciano, which was directed to establishing that the investments were in breach of the BIP Act, that those three plaintiffs had failed to comply with their duties as directors in supervising the investments, and that, in doing so, they had breached their legal obligations to FMIT.

342 As I have already stated, the matters, adduced by Dr Collins in cross-examination, do not provide a justification, either wholly or partially, to the three imputations relied upon by the plaintiffs, and, in particular, to the first two imputations.

343 In addition, Dr Collins specifically raised the question of the truth of the allegations, in opening the defendant's case to the jury. He pointed out that "the plaintiffs" did not dispute that FMIT broke the law by investing $2.2 million of taxpayer money in the United States sub-prime mortgage market. He contended that therefore the investments were illegal. He said "there is no doubt about that and all of the plaintiffs admitted to you in the course of their evidence that as directors of the Board of FMIT they owed legal obligations ... to act in the best interests of the Trust and to act in a financially responsible way". He then stated: "... there cannot be any doubt that the Board in 2007 breached those obligations and that in doing so the Board members at that time did break the law".

344 To support those propositions, Dr Collins quoted, from the transcript, passages of the cross-examination by him of Mr Marciano and Mr Di Masi. Having done so, he reiterated the proposition that the Board members in 2007 "broke the law; they breached their legal obligations to act in the best interests of the Trust in a financially responsible manner".

345 Pausing there, counsel's submissions, at that point, went well beyond what was appropriate for an opening to a jury. First, it is not the function of an opening to argue the case, although, no doubt as an aspect of good advocacy, counsel is entitled to some latitude in that respect. However, secondly, and more importantly, the truthfulness, or otherwise, of the imputations was not a matter for the jury; Dr Collins, at the outset, had sought to justify his cross-examination, in relation to that aspect of the case, as being relevant only to the issue of damages. That issue was not an issue which was to be determined by the jury, and it was irrelevant to the opening.

346 There were two other features of the opening by senior counsel for the defendant, which, in my view, added to the aggravating nature of the conduct of the defendant in the case. First, he stated that, in the course of his evidence, Mr Belbin "sought to blame" the Finance Manager and Managing Director of FMIT for making the "illegal investments". He noted that the plaintiffs did not call either of them, to give evidence, and that "they have not been given the chance to defend themselves". Dr Collins then alleged "... they were used, we suggest to you, as an attempt to deflect attention away from the Board's failure to oversee the finances and operations of the Trust in a proper and financially responsible manner".

347 As I have already stated, the evidence of Messrs Belbin, Di Masi and Marciano was not disputed, in cross-examination, that the Board had had nothing to do with the placement of the funds with Grange Securities, but, rather, that those investments had been made by the management of FMIT. The contention, that that evidence was in some way an attempt to make scapegoats of the two officers of FMIT, and to deflect attention from the Board, was unjustified and it was inappropriate.

348 In addition, in opening the defendant's case to the jury, senior counsel raised the question why the plaintiffs had brought a case against the defendant, and not against the Minister. On three occasions, he alleged that the proceedings, brought by each of the plaintiffs, was "an attempt to shoot the messenger". That contention was without foundation. It fell outside the permissible bounds of what might be put in opening. More importantly, the submission was irrelevant to any issues, which the jury would be required to determine in the case.

349 It is clear that from the outset of the case, up to and including the conduct of the trial, the defendant was intent on mounting a vigorous defence of the proceedings, which was its right. However, as the foregoing discussion reveals, in doing so, the defendant pleaded defences of truth, which could not be sustained on the evidence; it pursued the allegation of truth at trial, when the matters raised by it did not meet the imputations, pleaded by the plaintiffs; it wrongly, before the jury, accused the plaintiffs of making the senior staff of FMIT scapegoats in order to deflect attention from their own shortcomings; and it accused the plaintiffs of having an ulterior motive for bringing the proceedings.

350 One further example, of such conduct by the defendant of its case, is to be found in the first five defences pleaded by the defendant. In the first defence, and in each of the four successive amended defences filed after it, in each proceeding, the defendant maintained that it had removed the Minister's letter from the website in late 2009. That plea was important, given that right up to trial, and including at trial, the issue of publication was very much in dispute in each proceeding. In fact, the defendant had kept a log of each visit to the page on its website, on which it had published the Minister's letter. That log demonstrated a number of visits to the page in 2010. Further, and more significantly, Mr Leamon, in his evidence, stated that, after he received a facsimile from Mr Di Masi's solicitors dated 29 July 2010, he instructed the staff of FMIT to remove the letter from the website (although, as it turned out, the letter was not removed from the website for another twelve months).

351 In those circumstances, Mr Leamon, and thus the defendant, knew that the letter remained on its website at least until late July 2010. It is inexplicable that, in light of that fact, the first four defences, pleaded by the defendant, should have maintained that it had been removed in 2009. That plea remained on the third amended defence (dated 16 November 2011) up to the start of the trial. It only was removed from the defence by the fourth amended defence, which, pursuant to leave given by me, was filed and delivered on 30 July, the fifth day of the trial.

352 Finally, I consider that the malice of the defendant in publishing the letter, as found by the jury, also constitutes a further aggravating factor. By its answer to Question 13, the jury found that the dominant motive of the defendant, in publishing the letter on its website, was an improper purpose, which was ulterior to any duty of the defendant to publish, to recipients of the letter, the reasons of Mr Holding for deciding, in August 2008, to merge FMIT and Lower Murray Water. It is true, as Dr Collins has observed, that the jury were not asked to specify any particular ulterior motive which actuated the defendant in publishing the material. However, that point does not disturb the finding by the jury, namely, that the dominant motive of the defendant, in publishing the material, was improper, and it was ulterior to any sense by the defendant of a duty to publish the reasons of Mr Holding for deciding to merge FMIT and the defendant. In the background context of the publication of the letter by the defendant - and in particular, the role of the defendant in taking over the whole of the assets and undertaking of FMIT - the fact (as found by the jury) that the dominant motive of the defendant, in publishing the letter, was an improper and ulterior motive, was, of itself, an aggravated factor.

353 Indeed, it is relevant that, by its answer to question 9, the jury determined that the defendant had not established that Mr Leamon believed, at all relevant times, that the letter legitimately formed part of Mr Holding's explanation for his decision to close FMIT and to merge it with Lower Murray Water. In addition, in answer to question 8, the jury found that the defendant had not established that Mr Leamon believed that the letter was a legitimate part of the historical record concerning the closure of FMIT and its merger with the defendant. Those facts (as found by the jury) reinforce the finding, of an ulterior and improper motive, as an aggravating factor.

Damages: vindication of plaintiffs' reputations

354 The third aspect, of an award of damages for defamation, consists of the role such an award plays in vindicating the reputation of the plaintiff. That aspect was referred to in the passage from the judgment of the plurality in Carson v John Fairfax & Sons Ltd[114], to which I have earlier referred.[115] Immediately after that passage, their Honours stated:[116]

"Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant's reputation. 'The gravity of the libel, the social standing of the parties and the availability of alternative remedies' are all relevant to assessing the quantum of damages necessary to vindicate the appellant."[117]

355 The role of an award of damages, in vindicating the reputation of a plaintiff, was described by Lord Hailsham in Broome v Cassell & Co Ltd[118], in terms which have been applied in a number of subsequent decisions. His Lordship stated:

"In actions of defamation and in any other actions where damages for loss of reputation are involved, the principle of restitutio in integrum has necessarily an even more highly objective element. Such actions involve a money award which may put the plaintiff in a purely financial sense in a much stronger position than he was before the wrong. Not merely can he recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a bystander of the baselessness of the charge."

356 In Angel v Stainton[119], the plaintiff, an 81-year-old defence equipment supplier, claimed damages in respect of a defamatory letter, published to five influential recipients, which erroneously suggested that he had received a custodial sentence, some years ago, for illegal arms dealing. In awarding damages, Eady J stated:[120]

"In the circumstances of this case, it seems to me that the most important factor in arriving at an assessment of the appropriate compensation is that of the impact on Mr Angel's feelings and the distress caused. I have no doubt at all that this was significant. ... As to vindication, this is less important in a situation where there has been only limited publication and no evidence of any actual diminution in the claimant's reputation. Nevertheless, if I were to award only a modest sum of compensation in respect of an allegation of criminality, there would remain a real possibility that some people, coming to learn of the award, might think that there was no smoke without fire."[121]

357 The corollary of the principle, that an award of damages has an important role in vindicating the reputation of the plaintiff, once and for all, is that, ordinarily, damages are awarded to a plaintiff on the basis that they will be sufficient to ensure that he or she will not suffer any future loss of reputation by reason of the publication of the defamatory material.[122]

358 The authorities, to which I have referred, make it clear that an award of damages is not only designed to vindicate the reputation in the eyes of the persons to whom the defamatory material was directly published; rather, an award of damages must also be sufficient to vindicate the plaintiff in the eyes of those to whom, by the process referred to as the "grapevine" effect, the defamatory imputations have been disseminated, as a result of the defamatory publication for which the defendant is liable.[123]

359 In this case, it has been properly conceded by the defendant that the three defamatory imputations, found by the jury, were serious. In those circumstances, I consider that the principle of vindication does have a role to play in determining the damages to be awarded to each of the plaintiffs. That principle does, to some extent, have greater importance, because the defendant pleaded justification in its first three defences, and, secondly, sought to prove the truth of the imputations at the trial of the proceeding.

360 In conclusion, then, the allegations, constituted by the three defamatory imputations, published by the defendant in relation to each of the four plaintiffs, were serious. At the time at which the defendant published its letter, in 2010, the plaintiffs each still had good reputations for responsibility, integrity and public service. Although, in the case of Messrs Belbin, Di Masi and Marciano, the letter was only published directly to two recipients, and, in the case of Mrs Prevedello, to four recipients, I am satisfied that, by the "grapevine", or "poison spreading", effect, the defamatory imputations contained in the letter, published by the defendant, became more widely disseminated within the Mildura and surrounding communities.

361 In that way, I am satisfied that the reputations of each of the four plaintiffs have suffered quite substantial damage as a consequence of the publication by the defendant of the letter. In reaching that conclusion, I take into account the fact that the reputations of each of them had suffered a significant blow, arising, first, from the closure of FMIT in 2008, and, secondly, by the publication of Mr Holding's letter in the local newspaper at that time. Nevertheless, I am satisfied that the repetition of the defamatory allegations contained in the letter, by the defendant, materially aggravated that damage. The publication of the letter by the defendant occurred at a time when the issues, relating to the closure of FMIT, were still current and of interest to the Mildura community. The repetition by the defendant of the defamatory imputations reinforced the allegations made by Mr Holding in his letter in 2008. As found by the jury, by publishing the letter, the defendant gave its endorsement to the defamatory imputations contained in it.[124] Further, the publication by the defendant of the letter in 2010, after it had been originally published in 2008, made the defamatory imputations in it, about the plaintiffs, more memorable, and more likely to have a lasting effect.

362 As I have already indicated, I am satisfied that the publication of the letter by the defendant was particularly hurtful to each of the plaintiffs, and occasioned each of them genuine distress. They had each suffered considerable embarrassment and hurt arising from the closure of FMIT in August 2008, and from the publication of Mr Holding's letter in 2008. However, I am satisfied that their feelings of distress, embarrassment and humiliation were quite substantially revived and aggravated by the publication of the letter by the defendant in 2010.

363 In particular, the publication of the letter by the defendant was significantly distressing to Mrs Prevedello. Having not joined the Board of FMIT until 1 July 2008, she had nothing to do whatsoever with any of the events referred to by Mr Holding in his letter. In spite of that fact, her reputation had been publicly attacked by Mr Holding in his letter in August 2008. In those circumstances, the further publication of the letter by the defendant in 2010 understandably and justifiably enraged Mrs Prevedello. It was evident, from her demeanour in the witness box, that her feelings of anger and hurt, caused by the defendant's actions, have not sensibly diminished.

364 As I have already concluded, I am also satisfied that there are a number of aggravating factors deriving from the conduct of the defendant, from the time at which it published the letter on the internet, up to and including the conduct of the trial in the proceeding. In the case of Mrs Prevedello, I am satisfied that the extent of that aggravation was greater than that in the case of the other three plaintiffs. It is extraordinary that the defendant pleaded justification to the claim by Mrs Prevedello in its first three defences. Having done so - without any basis at all upon which to sustain such a defence - the defendant deleted the plea from its fourth defence (its third amended defence), without any apology, retraction or explanation.

365 As I have also stated, I consider that the concept of vindication, in each case, has relevance, because I am satisfied that the publications, which have been proven, have been the source of ongoing dissemination, in the Mildura community, of the defamatory imputations contained in the letter published by the defendant, because of the seriousness of those defamatory imputations and because the defendant, in the interlocutory stages of the proceedings, and at trial, has asserted the truth of those imputations.

366 Based on those considerations, I therefore consider that Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages, and that Mrs Prevedello is entitled to an award of $85,000 damages.

367 For the foregoing reasons, I have reached the following conclusions, which I summarise as follows:

(1) The plaintiffs have not proven that the defendant, in 2010, published Mr Holding's letter to Mr Glenn Miller.

(2) The defendant has not established its defence of publication of a public document under s 28 of the Defamation Act 2005.

(3) The defendant has not established a defence of qualified privilege under s 30 of the Defamation Act 2005. In particular, I have reached that conclusion because, although each of the recipients of the letter (Mr Lee, Mr Dichiera, Mrs Price and Louisa Prevedello) had an interest in having information on the subject contained in the letter; and the letter was published to those recipients in the course of giving them information on that subject; I am not satisfied that the conduct of the defendant, in publishing the letter, was reasonable in the circumstances. Indeed, I am satisfied that that conduct was not reasonable in the circumstances.

(4) Accordingly, each of the plaintiffs are entitled to an award of damages, including aggravated damages, as follows:

(a) Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages.

(b) Mrs Prevedello is entitled to an award of $85,000 damages.

368 The combined effect of the verdicts by the jury, and of my conclusions, can be stated as follows. In the period of twelve months before the issue of the proceeding, in August 2010, the defendant published Mr Holding's letter on its website, which contained defamatory imputations of and concerning each of the four plaintiffs, Mr Jim Belbin, Mr Frank Di Masi, Mr Don Marciano and Mrs Nancy Prevedello. In particular, the letter alleged of and concerning each of those four persons:

(a) That he (or she) broke the law by investing $2.2 million of Victorian Government money without Treasury approval;

(b) That he (or she) acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States sub-prime mortgage market.

(c) That he (or she) approved secret last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over.

369 The defendant did not, in its defence of the proceedings at trial, plead that the allegations, so published by it about the plaintiffs, were true. Accordingly, each of those allegations are presumed to be untrue. The defendant has failed to establish a defence under s 28 of the Defamation Act, of publication of a public document, a defence of qualified privilege at common law, or a defence of qualified privilege under s 30 of the Defamation Act. Accordingly, the plaintiffs are each entitled to an award of damages, including aggravated damages. Mr Belbin, Mr Di Masi and Mr Marciano are each entitled to an award of $70,000 damages against the defendant. Mrs Prevedello is entitled to an award of $85,000 damages against the defendant.

370 I shall hear counsel on the questions of interest and costs.

[1] Belbin & Ors v Lower Murray Urban Rural Water Corporation (Ruling No 2) [2012] VSC 360.

[2] Belbin & Ors v Lower Murray Urban Rural Water Corporation (Ruling No 1) [2012] VSC 359.

[3] Defamation Act 2005 (Vic) s 5(1)AAA.

[5] Compare David v Abdishou [2012] NSWCA 109, [259].

[6] Steele v Mirror Newspapers Limited [1974] 2 NSWLR 348, 371, 373-4 (Samuels JA); Universal Communication Network Inc t/as New Tang Dynasty v Chinese Media Group (Aust) Pty Ltd & Chan [2008] NSWCA 1, [42]-[43] (McColl JA); Gardner v Nationwide News Pty Ltd [2007] NSWCA 10, [43]-[45] (Bryson JA).

[7] The plaintiff did not contend that, in either such case, the defendant might be liable for the publication of the letter; cf. Speight v Gosnay (1891) 7 TLR 239.

[8] Trkulja v Yahoo! Inc LLC & Anor [2012] VSC 88, [8].

[9] [1968] VicRp 87; [1968] VR 664.

[10] Hebditch v MacIlwaine [1894] 2 QB 54; Calwell v Ipec Australia Limited [1975] HCA 47; (1975) 135 CLR 321, 329; Herald & Weekly Times Limited v Popovic [2003] VSCA 161; (2003) 9 VR 1, 11 [12] (Winneke ACJ), 28 [106]-[112] (Gillard AJA).

[11] See also Davis v Nationwide News Pty Ltd [2008] NSWSC 699; (2008) 31 NSWLR 606, 608 (McClellan CJ at CL).

[12] Section 30(1)(c).

[13] Morgan v John Fairfax & Sons Limited (1990) 20 NSWLR 511, 517-520 (Samuels AP), 525-526 (Mahoney JA), 538-540 (Hunt AJA); See also Herald & Weekly Times Limited v Popovic (above), 11 [12] (Winneke P); 30 [118] (Gillard AJA).

[14] Adam v Ward [1917] AC 309, 318 (Lord Finlay LC); Oldfield v Keogh (1941) 41 SR(NSW) 206.

[15] Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57, [75]-[79] (Gaudron, McHugh and Gummow JJ); Horrocks v Lowe [1975] AC 135, 149 (Lord Diplock).

[16] Belbin & Ors v Lower Murray Urban and Rural Water Corporation (Ruling No 3) [2012] VSC 473.

[17] [1928] HCA 50; (1928) 41 CLR 331, 363.

[18] [2001] VSC 305.

[21] See also David v Abdishou [2012] NSWCA 109, [259]-[260] (McColl JA).

[22] [1928] HCA 50; (1928) 41 CLR 331.

[23] Bigar Nominees Pty Ltd v Commissioner of Taxation (Commonwealth) (1991) 104 FLR 74, 93-94; Lee v Evans [1964] HCA 65; (1964) 112 CLR 276, 293-4; Rank Film Production Pty Ltd v Dodds [1993] 2 NSWLR 553, 558-9.

[24] (1948) 48 SR(NSW) 301, 303.

[25] See also Blackshaw v Lord [1983] 1 QB 1, 23-24, 38.

[26] [1985] 1 NSWLR 58, 63-64.

[27] [1964] HCA 65; (1964) 112 CLR 276, 292.

[28] (1948) 48 SR(NSW) 301.

[30] See also Blackshaw v Lord [1984] 1 QB 1, 24 (Stephenson LJ), 38 (Dunn LJ).

[31] (1991) 104 FLR 74.

[34] Ibid, 293 to 4 (Windeyer J); see also Hurst & Ors v V. Vestcorp Ltd (1988) 12 NSWLR 394, 404 (Kirby P).

[35] [1983] 2 NSWLR 553.

[37] [2010] NSWCA 257, [103].

[38] [2008] EWHC 1263 (QB), [91]-[99].

[39] (1991) 23 NSWLR 374, 387-388.

[40] [2006] NSWCA 227, [22]-[23].

[41] Barbaro v Amalgamated Television Services Pty Ltd [1985] 1 NSWLR 30, 40 (Hunt J); Echo Publications Pty Ltd v Tucker; Fast Bucks v Tucker (No 3) [2007] NSWCA 320, [7]-[8].

[42] Barbaro v Amalgamated Television Services Pty Ltd, 40.

[43] Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354, 358-9; Griffith v Australian Broadcasting Corporation [2010] NSWCA 257, [104] (Hodgson JA).

[45] [1985] 1 NSWLR 50.

[47] (1985) 3 NSWLR 354.

[49] (1991) 23 NSWLR 374.

[51] See for example John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227, [22]-[23] (Handley JA, with whom Spigelman CJ and McColl JA agreed); Griffith v Australian Broadcasting Corporation [2010] NSWCA 257, [110], [121]-[123] (Hodgson JA); see also Clout v Jones [2011] NSWSC 1430, [13] (Nicholas J).

[52] Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1, 30-32 [75]-[83] (Gaudron, McHugh and Gummow JJ).

[53] [2008] EWHC 1263 (QB).

[57] [2005] EWCA Civ 75; [2005] QB 946.

[58] [2006] NSWCA 227 [48]-[52]; West Australian Newspapers Ltd v Elliott (2008) 37 WAR 387, 408-409 [60]-[64].

[59] (1938) 38 SR(NSW) 287, 290 (Jordan CJ).

[60] [1988] 1 WLR 116, 120.

[61] (1882) 8 QBD 491, 504-5 (Cave J).

[62] Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497, 514.

[63] [1993] HCA 31; (1993) 178 CLR 44.

[64] Ibid, 60; See also Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211, 216 (Mason CJ, Deane J); Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327, 347 [60] (Hayne J).

[65] [1966] HCA 40; (1966) 117 CLR 118, 150.

[66] See also Coyne v Citizen Finance Ltd (above), 235 (Toohey J); Carson v John Fairfax & Sons Ltd (above), 60, 61 (Mason CJ, Deane, Dawson and Gaudron JJ), 69 (Brennan J), 104 (McHugh J).

[67] Ley v Hamilton (1935) 153 LT 384, 386 (Lord Atkin); Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176, 193-5 (Mahoney ACJ), 198 (Handley JA); Cassell & Co Ltd v Broome [1972] UKHL 3; [1972] AC 1027, 1071 (Hailsham LC); Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; (2001) 208 CLR 388, 416 [88] (Gummow J); Prendergast v Roberts [2012] QSC 144, [31] (Mullins J).

[68] (1935) 153 LT 384, 386.

[69] [1996] NSWSC 651; (1996) 41 NSWLR 176.

[70] Broome v Cassell & Co Ltd [1972] 1027, 1071.

[71] [1996] NSWSC 651; (1996) 41 NSWLR 176, 194-195.

[72] [2012] QSC 144.

[74] Cf John v MGM [1997] QB 586, 607 (Bingham MR).

[75] Cf Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739, [153] (McClellan J).

[77] [1972] UKHL 3; [1972] AC 1027, 1125.

[78] [1993] HCA 31; (1993) 178 CLR 44, 71.

[79] [1965] QB 86, 107.

[80] Morgan v Odhams Press Ltd [1971] 1 WLR 1239, 1247 (Lord Reid); Associated Newspapers Ltd v Dingle [1961] 2 QB 162, 190, 192 (Devlin LJ).

[85] (2000) 1 VR 667; [2000] VSCA 24.

[86] [2000] VSCA 24; (2000) 1 VR 667.

[87] [2000] EWCA Civ 338; [2001] 1 WLR 579.

[88] (1882) 8 QBD 491.

[90] [1961] AC 1090, 1124 (Viscount Simmons), 1142 (Lord Denning), 1146-8 (Lord Morris), 1148 (Lord Guest); Prager v Times Newspapers Ltd [1988] 1 WLR 77, 93 (Nichols LJ); Mutch v Sleeman (1928) 29 SR(NSW) 125, 134-5; TCN Channel 9 Pty Ltd v Antoniadis (1998) 44 NSWLR 682, 700.

[91] Howden v Truth & Sportsman Ltd (No 2) (1938) 38 SR(NSW) 287, 290 (Jordan CJ); Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623, 627 (Jacobs and Manning JJA); Pamplin v Express Newspaper Ltd [1988] 1 WLR 116, 120 (Neill LJ); John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227, [48] (Handley JA).

[92] Cohen v Mirror Newspapers Ltd [1971] 1 NSWLR 623, 627 (Jacobs and Manning JJA), Plato Films Ltd & Ors v Speidel [1961] AC 1090, 1142 (Lord Denning).

[93] [2000] EWCA Civ 338; [2001] 1 WLR 579.

[94] [2000] EWCA Civ 338; [2001] 1 WLR 579, 592, [28].

[96] [2006] EWCA Civ 540; [2006] 1 WLR 3469.

[99] [2001] NSWCA 322; (2001) 53 NSWLR 430, 434-5 [14]-[15]; [2001] NSWCA 322.

[100] (2008) 37 WAR 387, 409 [63], [2008] WASCA 172.

[101] [2010] NSWCA 335, [263]-[264]; [2010] NSWCA 335; (2010) 278 ALR 232, 287.

[102] [1961] AC 1090, 1142.

[103] [2006] EWCA Civ 540; [2006] 1 WLR 3469, 3483-4 [51].

[104] [2003] VSCA 161; (2003) 9 VR 1, 77 [380].

[105] Praed v Graham (1889) 24 QBD 53, 55; Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1, 103 [287] (Callinan J).

[106] Herald & Weekly Times Ltd v Popovic, 77 [385].

[107] Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497, 514.

[108] McCarey v Associated Newspapers Ltd & Ors (No 2) [1965] QBD 86, 107 (Diplock LJ); Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225, 250 (Glass JA).

[109] Herald & Weekly Times Ltd v Popovic, 79 [399] (Gillard AJA).

[110] Carson v John Fairfax & Sons Ltd [1993] HCA 31; (1992) 178 CLR 44, 66 (Mason CJ, Deane, Dawson and Gaudron JJ).

[111] Ali v Nationwide News Pty Ltd [2008] NSWCA 183, [83] (Tobias and McColl JJA).

[112] Waterhouse v Broadcasting Station 2GB Pty Ltd [1985] 1 NSWLR 58, 75 (Hunt J).

[113] I should record that none of those defences were drawn or settled by counsel who appeared for the defendant in the trial.

[114] (1993) 178 CLR 60.

[118] [1972] UKHL 3; [1972] AC 1027, 1071.

[119] [2006] EWHC 637 (QB).

[121] See also "KC" v MGN Ltd [2012] EWHC 483, [37]; Cooper v Turrell [2011] EWHC 3269, [98] (Tugendhat J); Sent & Prime Life Corporation Ltd v John Fairfax Publications Pty Ltd & Hills [2002] VSC 429, [77] (Nettle J); French v The Herald & Weekly Times Pty Ltd (No 2) [2010] VSC 155, [87] (Beach J); Jarratt v John Fairfax Publications Pty Ltd [2001] NSWSC 739, [112] (McClellan J).

[122] John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131, 143 (McHugh JA); Carson v John Fairfax & Sons Pty Ltd [1993] HCA 31; (1993) 178 CLR 44, 77 (Brennan J).

[123] See also Crampton v Nugawela [1996] NSWSC 651; (1996) 41 NSWLR 176, 194-6; Prendergast v Roberts [2012] QSC 144, [31].

[124] The jury's answers to Questions 2 and 10 in each proceeding.