Radio 2UE Sydney Pty Ltd v Chesterton [2008] NSWCA 66

Court of Appeal (NSW)|2008-04-17|Before: Spigelman CJ, Hodgson JA, McColl JA, Simpson J, Ms J

AK v The State of Western Australia [2008] HCA 8

Amalgamated Television Services Pty Ltd v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158

Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449

Brighton Ceiling Pty Ltd v Pocrnja [2005] NSWCA 175

Byrne v Deane [1937] 1 KB 818

Cairns v John Fairfax & Sons Ltd [1983] 2 NSWLR 708

Capital & Counties Bank Ltd v Henty (1882) 7 App Cas 741

Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519

Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68; (2001) Aust Torts Reports 81-610

Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86

Consolidated Trust Co Ltd v Browne [1948] NSWStRp 71; (1948) 49 SR (NSW) 86

Dawson Bloodstock Agency Pty Ltd v Mirror Newspapers Ltd [1979] 1 NSWLR 16

Drummond-Jackson v British Medical Association [1970] 1 All ER 1094; [1970] 1 WLR 688

Ettingshausen v Australian Consolidated Press Ltd (1991) 23 NSWLR 443

FAI General Insurance Co Ltd v RAIA Insurance Brokers Ltd [1992] FCA 219; (1992) 108 ALR 479

Fausett v American Resources Management Corp 542 F Supp 1234 (1982)

Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716

Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675

Gardiner v John Fairfax & Sons Pty Ltd [1942] NSWStRp 16; (1942) 42 SR (NSW) 171

Griffiths v Benn (1911) 27 TLR 346

Hall-Gibbs Mercantile Agency Ltd v Dun [1910] HCA 66; (1910) 12 CLR 84

Hepburn v TCN Channel Nine Pty Ltd [1983] 2 NSWLR 682

Howe & McColough v Lees [1910] HCA 67; (1910) 11 CLR 361

John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291

John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657

Khor v Nationwide News Pty Ltd [1999] VSC 38

Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536

Lee v Wilson and Mackinnon [1934] HCA 60; (1934) 51 CLR 276

Lewis v Daily Telegraph Ltd [1964] AC 234

Liquor Marketing Group Ltd v Sadler [2000] NSWCA 161

Mawe v Pigott (1869) IR 4 CL 54

McDonald v North Queensland Newspaper Company Ltd [1997] 1 Qd R 62.

Middle East Airlines Airliban S.A.L. v Sungravure Pty Ltd [1974] 1 NSWLR 323

Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632

Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15

Mundey v Askin [1982] 2 NSWLR 369

Nevill v Fine Art & General Insurance Co Ltd [1897] AC 68

Nixon v Slater & Gordon [2000] FCA 531; (2000) 175 ALR 15

Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; (2001) 208 CLR 388

Potts v Moran (1976) 16 SASR 284

Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166

Ratcliffe v Evans [1892] 2 QB 524

Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500

Scott v Sampson (1882) 8 QBD 491

Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1

State Bank of New South Wales Ltd v Currabubula Holdings Pty Ltd [2001] NSWCA 47; (2001) 51 NSWLR 399

Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1

Switzerland Australia Health Fund Pty Ltd v Shaw (1988) 81 ALR 111

Tolley v J S Fry & Sons Ltd [1931] UKHL 1; [1930] 1 KB 467

Tournier v National Provincial & Union Bank of England [1924] 1 KB 461

Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118

Raymond E Brown, The Law of Defamation in Canada, 2nd ed (1994) Carswell

JG Fleming, The Law of Torts, 9th ed (1998) LBC Information Services

Halsbury's Laws of England, 4th ed, vol 28 (reissue)

P Milmo and WVH Rogers, Gatley on Libel and Slander, 10th ed (2004) Sweet & Maxwell

Professor WL Morison, "The New Law of Verbal Injury"[1959] SydLawRw 3; , (1959) 3 Sydney Law Review 4

G Spencer Bower, The Law of Actionable Defamation, 2nd ed (1923) Butterworth

T Starkie, A Treatise on the Law of Slander and Libel, 2nd ed (1830) J & WT Clarke

Appeal dismissed with costs. (see par 15 and par 30)

1 SPIGELMAN CJ: In this matter I have read the judgment of McColl JA in draft. I agree with her Honour that Mr Evatt's submission that her Honour directed that the jury determine the business reputation imputations in accordance with a "community standards" approach should be rejected. I agree with her Honour that, considered as a whole, the direction to the jury would have been understood as not requiring the jury to assess whether the three business reputation imputations were defamatory in accordance with the standards of the general community.

2 Accordingly, it is necessary to determine whether this Court should follow the reasoning in Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675. McColl JA sets out the relevant passages together with the significant support for the reasoning of this Court in the two joint judgments of Gleeson CJ and Crennan J and Callinan and Heydon JJ on appeal in John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291.

3 The relevant passages were an essential part of the reasoning of this Court in Gacic. The Court should not depart from such previous authority unless it is clearly satisfied that the decision was erroneous. McColl JA has set out with force and clarity the reasons why such a conclusion should be drawn. Nevertheless, I have come to the view that the defects her Honour identifies are not sufficiently clear or determinative to justify the Court departing from a recent judgment of this Court which has, in relevant respects, attracted support from the High Court on appeal.

4 There is no single authoritative statement of the interests which the law of defamation protects nor of reasons why those interests are protected. There have been numerous attempts at definition, few of which distinguish between the process for determining what words mean from whether the meaning is defamatory. It is only the second question that arises here. The issue is whether it was necessary for the trial judge to explicitly direct the jury as to the standard by which they should determine whether the imputations in issue on this appeal were defamatory, and specifically, whether it was necessary to refer to community standards as constituting that standard.

5 There have been numerous attempts to express in words the concept of defamation and the standard by which it must be assessed. (See the numerous examples set out in Raymond E Brown The Law of Defamation in Canada, 2nd ed (1994) Carswell at par 4.2(2) and the critique in par 4.2(3)). The formulation perhaps most frequently relied upon in this jurisdiction is that of Jordan CJ in terms of a publication "which is likely to cause ordinary decent folk in the community, taken in general, to think less of [the plaintiff]". (See Gardiner v John Fairfax & Sons Pty Ltd [1942] NSWStRp 16; (1942) 42 SR(NSW) 171 at 72; Consolidated Trust Co Ltd v Browne [1948] NSWStRp 71; (1948) 49 SR(NSW) 86 at 88.) There is no doubt that this is an appropriate test in numerous cases, perhaps in most.

6 Another broadly equivalent test is that of Lord Atkin in Sim v Stretch [1936] 2 All ER 1237 at 1240; (1936) 52 TLR 669 where his Honour referred to the effect upon "right-thinking members of society generally". It is, however, instructive to set out the full context in which the frequently cited test of Lord Atkin appears. It is as follows:

"The question, then, is whether the words in their ordinary signification are capable of being defamatory. Judges and textbook writers alike have found difficulty in defining with precision the word 'defamatory'. The conventional phrase exposing the plaintiff to hatred, ridicule, or contempt is probably too narrow. The question is complicated by having to consider the person or class of persons whose reaction to the publication is the test of the wrongful character of the words used. I do not intend to ask your Lordships to lay down a formal definition, but after collating the opinions of many authorities I propose in the present case the test: would the words tend to lower the plaintiff in the estimation of right-thinking members of society generally?" (Emphasis added)

7 The publication in issue in Sim v Stretch was not a publication to the world at large, but a telegram addressed to the person alleged to have been defamed. It is in this context that the general test identified by Lord Atkin was found to be the appropriate one. Such a direction was necessary in that case because the jury may otherwise have been under the impression that a standard particular to the sole recipient of the telegram could have been appropriate.

8 It is of significance that his Lordship referred to the test in terms of what the authorities suggested was appropriate "in the present case". His Lordship did not suggest that the test was applicable in every case. Indeed, the contrary is indicated by that part of his Lordship's reasons which states that it is necessary: "to consider the person or class of persons whose reaction to the publication is the test of the wrongful character of the words used".

9 Lord Atkin's reference to the need to consider the persons whose reaction to a publication was referred to and applied by Willmer J in Drummond-Jackson v British Medical Association [1970] 1 WLR 688. That case concerned a publication in the British Medical Journal of an article criticising a technique developed by the plaintiff for use in dentistry. Willmer J said at 700H:

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

10 As McColl JA notes, the approach of Willmer J in Drummond-Jackson v British Medical Association has been applied in some Australian cases. (Her Honour refers to Switzerland Australia Health Fund Pty Ltd v Shaw (1988) 81 ALR 111, FAI General Insurance Co Ltd v RAIA Insurance Brokers Limited [1992] FCA 219; (1992) 108 ALR 479 and Nixon v Slater & Gordon [2000] FCA 531; (2000) 175 ALR 15; Morgan v Mallard [1997] SASC 6056; (1997) 68 SASR 184.) Such an approach receives significant support in the judgment of Callinan and Heydon JJ in Gacic, set out by McColl JA, where their Honours apply, at [190], the standards relevant to the business in question, being "restaurant standards" rather than "community standards".

11 Injury to the reputation of a person in his or her trade, profession or business is also a matter which directs attention to a narrower section of the community than the whole. It is, in my opinion, arguable that, accordingly, the relevant test is not of the character for which the appellant contends.

12 No complaint is made on this appeal of any failure by her Honour to direct attention in some specific way to the relevant group. In any event, it may be taken to be subsumed within her Honour's direction that the jury had to be satisfied that the relevant imputations did in fact damage the respondent "in his professional reputation" [62] or "damaged him ... in the practice of his profession as a journalist" [60]. In each case the reference to "damage" directs attention to the conduct of those whose response could relevantly have that effect.

13 Notwithstanding the authorities set out by McColl JA, which suggest the contrary, there is, in my opinion, authority in support of the reasoning in Gacic. This Court should not give leave to the appellant to invite the Court to overrule it.

14 In the case of an imputation directed to the impact upon reputation generally - whether by means of lowering estimation or by means of shunning and avoiding - it will be appropriate and, on occasions, necessary to ensure that the jury is aware that community standards is the relevant test. In the case of impact upon the reputation of a person of a trade, professional or business character, it will, on the above analysis, usually be unnecessary to ensure that the jury is made explicitly aware that it is the standards of the persons who interact with the plaintiff in those respects which are pertinent.

15 In my opinion, the appeal should be dismissed with costs.

16 HODGSON JA: The judgment of McColl JA sets out the circumstances giving rise to this appeal and the issues it raises.

17 I am indebted to McColl JA for her careful review of the authorities, but I respectfully disagree with some of her conclusions.

18 In particular, in my respectful opinion, there is in her Honour's discussion a conflation of two concepts that are similar but that are best kept distinct, particularly in consideration of issues concerning matter alleged to be defamatory in having a tendency to injure a person's business reputation. These concepts are those of the ordinary reasonable reader (or as in this case, listener) and of community standards. In my understanding, the decision of the Court of Appeal in Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675 turned on a distinction between these two concepts, and this approach was confirmed by most of the judges of the High Court on the appeal from that decision in John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291. In that regard, in my respectful opinion, these decisions were correct.

19 In my opinion, these decisions correctly support the following propositions:

(1) The question whether published material conveys an alleged imputation is to be determined by the tribunal of fact by considering whether the imputation would be conveyed to the ordinary reasonable reader (in which I would include listener or viewer). Similarly the question of whether the imputation is defamatory, that is, whether it tends to injure the plaintiff's reputation, is also to be determined by considering whether it tends to injure the plaintiff's reputation in the view of the ordinary reasonable reader.

(2) In a case where the plaintiff alleges that the tendency is to injure his or her reputation in the area of general character and conduct, then the ordinary reasonable reader must be considered as accepting community standards and viewing the matter in the light of those standards: that is, there must be a tendency to convey to the ordinary reasonable reader who accepts community standards that the plaintiff's character or conduct falls short of the standards.

(3) However, in a case where the plaintiff alleges that the tendency is to injure his or her business reputation, then the ordinary reasonable reader must be considered as viewing the matter in the light of the reader's understanding of what are the requirements for fitness or competence for the plaintiff's business: that is, there must be a tendency to convey to the ordinary reasonable reader that the plaintiff's fitness and/or competence falls short of what, in the understanding of the ordinary reasonable reader, are the requirements for the plaintiff's business.

20 In my opinion, these propositions are generally consistent with the authorities referred to by McColl JA, except to the extent that in some of them there are statements to the effect that the publication must tend to lower the plaintiff's reputation in the eyes of "right-thinking men". That expression is unexceptionable in circumstances where the plaintiff alleges a tendency to injure his or her reputation in the area of general character and conduct; but it could be seen as carrying the suggestion that the assessment of whether what is imputed falls short of some standard is always to be assessed having regard to community standards. In my opinion, to that extent, the expression could be misleading.

21 The case of Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 could be seen as contrary to the propositions I am advancing. However, the question being addressed by Brennan J at 505-7 was whether, where no true innuendo is pleaded, the question of defamation could be determined by reference to how the matter would be understood by a hypothetical reader within some narrower class than the community generally; and his Honour (with the concurrence of other members of the High Court) held that it could not. However, in the course of the judgment, Brennan J also referred to the sharing of a moral or social standard by which to judge the defamatory character of the imputation; and in that respect, in my opinion, the judgment should be considered as applying to defamation in relation to general character and conduct.

22 I do not see anything in the judgment of the majority of the High Court in Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716, that is inconsistent with the propositions I am supporting.

23 McColl JA refers to some authorities that have, contrary it would seem to the view of the High Court in Reader's Digest, supported the view that the question of defamation may be judged by reference to an hypothetical member of a narrower class than the community as a whole. It is not necessary to consider whether such an apparent departure from Reader's Digest can be supported.

24 In my opinion, the propositions I have stated are supported by the judgments of the Court of Appeal in Gacic, including the statement by Beazley JA at [40] in that case to the effect that there "could be business defamation even though the defamatory statement did not lower the defamed person in the estimation of right-thinking members of the community". I do not, with respect to McColl JA, read Beazley JA's judgment as failing to recognise the necessity that imputations must reflect on the plaintiff's reputation; nor do I see any inconsistency between the Court's de-emphasis of community standards in relation to business defamation and its insistence on reference to what is conveyed to the ordinary reader.

25 In my opinion also, the propositions I have stated are supported by the judgment of Gleeson CJ and Crennan J in the High Court in that case, particularly in paras [2] and [6] quoted by McColl JA; and by the judgment of Callinan and Heydon JJ, particularly in paras [189]-[190] quoted by McColl JA.

26 The judgment of Gummow and Hayne JJ in that case is, in my opinion, not inconsistent with the propositions. The statement in para [53] of their judgment that it is sufficient that an imputation "be such as is likely to cause ordinary decent folk in the community, taken in general, to think less of [the plaintiff]" is to some extent against the propositions I am supporting, in bringing together the concept of the ordinary reasonable reader and community standards. However, the particular problem being addressed in this judgment was not then being addressed by them.

27 The question then is, was the primary judge in error in her directions to the jury. The relevant parts of her directions have been quoted by McColl JA in para [54] of her judgment.

28 I agree with McColl JA that there is an error in the last three lines of para [60] of those directions, if they are taken in isolation. The question is not whether the imputations damaged the plaintiff in the practice of his profession as a journalist, but rather whether they tended to damage him in respect of his reputation in his profession as a journalist. However, that the jury is being directed to consider the question of injury to reputation is indicated in the first two lines of the same paragraph, and is made quite clear in the following paras [61] and [62].

29 Apart from that matter, in the light of the propositions I support, I do not see any error in the primary judge's directions to the jury.

30 For those reasons, in my opinion the appeal should be dismissed with costs.

31 McCOLL JA: This appeal concerns the question of the directions a trial judge should give to a jury hearing a defamation case about how to determine whether imputations found to have been conveyed by a publication tend to injure a person in his or her trade, business or professional reputation ("business reputation imputations"). Is the jury to be directed that that issue is to be determined in accordance with community standards, meaning thereby matter which has a tendency to make ordinary right-thinking people think less of the plaintiff? If not, what standard is the jury to apply?

32 I have concluded that in a case in which the plaintiff pleads business reputation imputations the jury should be directed that the question whether those imputations are defamatory turns on whether the hypothetical referee, whose standards are taken to reflect those of ordinary right-thinking people, would conclude that they tended to injure the plaintiff in his or her trade, business or professional reputation.

33 On 8 August 2005 the following words were broadcast on radio station 2UE on the John Laws Morning Show (the "matter complained of"):

"Well that bombastic, beer-bellied buffoon Ray Chesterton, writes a column in the Telegraph called "The Final Word". Well it's not the final word today.

What's the matter with you, Ray?

I mean, you know, I always knew you were a bit of a creep, but can't you get over it?

He was fired by 2UE and blames me for it. He's never got over it and he talks about the Joey Johns saga and say [sic] Meanwhile the Johns saga is starting to run out of motivation.

You know that when 70-year-old disc jockeys are drawn into the fray to support the argument.

I talked to Joey Johns because I wanted to, because he is a friend of mine, a word you probably wouldn't understand because I doubt you'd have any, and those that you do have call you 'Ankles' for a very good reason.

I don't know. Why can't you get over it, Ray? I mean, you used to enjoy going to my farm and I used to give you the house and you used to take your family and your children up there. I was very happy that all took place. But why can't you get over it?

Well, I suppose you have some kind of inferiority complex. Well, I have to tell you, I have never met a man who deserved one more."

34 Ray Chesterton, the respondent, a journalist who writes a column in the Daily Telegraph, brought proceedings against Radio 2UE Sydney Pty Limited, the licensee of the radio station and, therefore, the broadcaster of the matter complained of. He alleged that the matter complained of conveyed, in its natural and ordinary meaning, the following imputations:

(a) The plaintiff is a creep in that he is an unpleasant and repellent

(b) the plaintiff is a bombastic, beer bellied buffoon;

(c) as a journalist the plaintiff is not to be taken seriously;

(e) the plaintiff falsely accuses John Laws of being responsible for his dismissal from Radio 2UE; and

(f) the plaintiff is an ungrateful person in that he accepted the hospitality of John Laws and then attacked him.

Although there was no pleading to this effect, in due course, the respondent's counsel put his case to the jury on the basis that the three italicised imputations went to "his professional standing". I shall refer to these as the business reputation imputations, although it should be observed that in this Court, Mr C A Evatt, who appeared for the respondent with Mr R K M Rasmussen at trial and on appeal, conceded that (b) was "a bit shaky" as an imputation going to the respondent's reputation as a journalist.

35 The respondent also alleged that the following imputations were conveyed by way of true innuendo:

(g) The plaintiff is a liar in that he says that he is a teetotaller when in fact he has consumed sufficient alcohol to make him overweight; and

36 A trial pursuant to s 7A of the Defamation Act 1974 (the "1974 Act") to determine whether the matter complained of carried the imputations pleaded by the respondent and, if it did, whether each imputation was defamatory of him took place before Simpson J and a jury of four commencing on 17 July 2007.

37 The Second Further Amended Statement of Claim, (in its form as it was at the time of the s 7A hearing) did not, as it ought, allege that any of the imputations was defamatory of the respondent (cf Uniform Civil Procedure Rules 2005 14.30(2)(b)) nor did it set out the relief sought. Furthermore, it did not set out the "time honoured formula" that the respondent had "been greatly injured in his credit and reputation and has been brought into scandal, odium and contempt and has suffered and continues to suffer loss and damage": TK Tobin and MG Sexton_, Defamation Law and Practice_, LexisNexis [25, 100].

38 When he opened the case to the jury, Mr Evatt, said to the jury:

"Defamation is about reputation. It is about what right-thinking members of the community think about a person or your business or, in this case, your reputation as a journalist. Are things said about you that would tell against your reputation, your business reputation as a journalist or your standing in the community among right-thinking members of the community. Defamation or defamatory meaning or defamatory allegation [sic, allegations] can severely injure a person's reputation in his business or trade or profession, a journalist here. Any imputation or meaning which suggests unfitness or incompetence for a trade or profession is defamatory ...."

39 After the close of the respondent's case, which included calling evidence which went to the true innuendoes, counsel addressed the jury. In the course of his address, Mr Evatt addressed the jury on the basis that it would find the business reputation imputations were defamatory "if [the jury] thought that would injure him and his professional reputation as a journalist". In the case of the third business reputation imputation, he added "...and people would think less of a person who is fired. " He also contended that:

"Mr Laws used this programme and his wide listening audience to lodge a personal attack on Mr Chesterton conveying serious imputations, all of which are defamatory, all of which injure Mr Chesterton's reputation, either as a journalist or in the eyes of right-thinking members of the community."

40 When he concluded his address Mr R G McHugh of Senior Counsel, who appeared for the appellant at trial, addressed the jury. One of Mr McHugh's arguments was that the matter complained of was not defamatory because it amounted to vulgar abuse: see Mundey v Askin [1982] 2 NSWLR 369 at 371 - 2. It will be necessary to return to this issue. In the course of his address Mr McHugh put submissions to the jury about the meaning of something being defamatory. He informed them:

"The crucial point about 'defamatory' is that it means that ordinary reasonable people, the same ordinary reasonable listeners I have been talking to you about, would actually tend to think the less of the plaintiff as a result of hearing it. If you think about it, that's quite a high standard. It's: would you actually really, as an ordinary reasonable listener, tend to think less of the plaintiff because of it ... would an ordinary reasonable listener think less of Chesterton as a result of hearing it? That's important in this case and that's where we say abuse comes in ... "

41 After Mr McHugh completed his address to the jury, Mr Evatt sought a number of directions. He asked the primary judge to direct the jury that there were two basic tests of defamation: will the words lower the esteem of the plaintiff in the minds of right-thinking members of the community or would the words have a tendency to injure the plaintiff in his business or trade or profession as a journalist?

42 Mr McHugh submitted that the respondent had not pleaded a claim that he had been hurt in his business reputation and that what he had put to the jury was consistent with the respondent's case being advanced as an "orthodox defamation claim". Mr McHugh contended that a direction to the jury that if the matter complained of was defamatory, it may impact upon the respondent's professional reputation begged the question of whether the imputation was defamatory. He argued that the issue for the jury was whether a fair ordinary minded right-thinking person might think less of the respondent and that depended upon the standards of a cross section of the community.

43 Mr Evatt submitted that the direction he sought was consistent with the decision of this Court in Gacic v John Fairfax Publications Pty Ltd [2006] NSWCA 175; (2006) 66 NSWLR 675 and, on appeal, John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28; (2007) 230 CLR 291. He contended that the High Court had been unanimous that injury to business reputation was capable of being defamatory.

44 These submissions were made at the end of the first day of the s 7A hearing. When the hearing resumed the next day Mr Evatt was absent but his junior, Mr R Rasmussen, handed to the primary judge written submissions concerning the legal points which had been debated the previous evening. Insofar as what they termed "business defamation" was concerned, the written submissions argued that the Court of Appeal in Gacic had upheld an appeal by the plaintiffs in a s 7A trial because, although the plaintiffs' case had been based on injury to business reputation, counsel for the defendant had addressed only on whether the imputations would lower the plaintiff in the estimation of right-thinking members of the community. The submissions drew attention to Beazley JA's statements in Gacic at [46], [50], and to Handley JA's agreement with her Honour at [6] which, relevantly were:

Beazley JA

"[46] ...However, the comment as a whole was both misleading and, in my opinion, incorrect. It did not draw the jury's attention to the distinct nature of business defamation. In particular, the comment did not inform the jury that there could be business defamation even though the defamatory statement did not lower the defamed person in the estimation of right-thinking members of the community...

[50] ... In my opinion, the direction given by her Honour was wrong. It was incumbent upon her Honour to direct the jury that in the case of a business defamation, it did not matter whether the published material lowered the person in the eyes of right-thinking members of the community....

[6] ...I agree with Beazley JA that the failure to give firm clear directions to this effect occasioned a substantial miscarriage of justice and the verdicts for the defendant on these imputations must be set aside."

45 Mr Rasmussen submitted that imputations (b), (c) and (d) were those which were advanced as affecting the respondent's business reputation.

46 Mr McHugh made further submissions about the direction the primary judge ought to give the jury on this point. In substance he argued that even in the case of imputations which might be seen to affect a person's business reputation, the question whether or not that injury was suffered had to be determined by reference to community standards. He argued that Mr Evatt's submissions would have the effect that when one was dealing with imputations said to affect a person's business reputation, community standards were irrelevant. He suggested that that would create a new category of defamation. He argued that to the extent the High Court judgment in Gacic touched upon the issue of business reputation, the statements by the various justices were obiter dicta.

47 Mr McHugh accepted that the Court of Appeal's decision in Gacic (at [46]) was against him and that the primary judge was bound by it. However he argued that because of the way Gacic was run at trial and in the Court of Appeal, the decision of this Court was per incuriam.

48 Mr McHugh also argued that he would be prejudiced if her Honour directed the jury on the basis Mr Evatt sought as he had addressed the jury on the basis of the case pleaded and, he contended, advanced by Mr Evatt in his address, that this was not a case of business reputation. The primary judge observed that it was open to Mr McHugh to make an application, by which I understand her Honour to have suggested to Mr McHugh that he could, if he wished, make an application further to address the jury. Mr McHugh did not make any such application.

49 The primary judge rejected Mr McHugh's submission. She accepted that she was bound by the decision of this Court in Gacic to inform the jury that in the case of imputations said to affect the respondent's business reputation, it did not take into account community standards.

50 Her Honour sought assistance from Mr Rasmussen about what test she ought to instruct the jury to apply observing that as she read Gacic both in the Court of Appeal and the High Court, neither judgment suggested what the test was in relation to business reputation imputations. In response, Mr Rasmussen urged her Honour to adopt the statement from paragraph [2.7] of P Milmo and W V H Rogers, Gatley on Libel and Slander, 10th ed (2004) Sweet & Maxwell ("Gatley") that:

"To say of a person carrying on any trade or profession or holding any office that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation in his trade, profession or office ..."

51 In summing-up the primary judge outlined the nature of the proceedings to the jury. When she explained the nature of an imputation she informed it that:

"17 ...The test of to whom the imputation is conveyed is the ordinary reasonable listener..."

52 In explaining the nature of defamation her Honour's outline informed it:

"[19] If you say yes in answer to that question to any of the imputations [conveyance] then you ask yourself was that imputation defamatory, that is did it damage the reputation of Mr Chesterton. In that respect the test to apply is the test of ordinary reasonable members of the community. If the ordinary reasonable member of the community considered that the imputation was defamatory of the Plaintiff, Mr Chesterton, then that imputation is defamatory of him. I will refine that in a little while, but that is the general test."

53 The primary judge then turned her attention to the specific issues the case posed for resolution. First she dealt with the issue of whether the imputations were conveyed by the broadcast. She explained the concept of the "ordinary reasonable listener". It is unnecessary to set out her Honour's directions on this aspect in detail. Suffice it to say that after emphasising that that listener was "a hypothetical person" and not either herself, a member of the jury or counsel, she outlined that person's qualities as "reflect[ing] community views, standards, attributes and behaviour". She elaborated on that person in traditional terms (summing-up at [23]-[24]) which it is unnecessary to repeat: see John Fairfax Publications Pty Ltd v Rivkin [2003] HCA 50; (2003) 77 ALJR 1657 (at [23]-[26]) per McHugh J; Amalgamated Television Services Pty Ltd v Marsden [1998] NSWSC 4; (1998) 43 NSWLR 158 (at 165) per Hunt CJ at CL; Lewis v Daily Telegraph Ltd [1964] AC 234.

54 Her Honour then explained how the jury should determine whether any of the imputations found to have been conveyed was defamatory. She said:

"[25] Now I told you that I would say some more about the meaning of defamatory and I can do that fairly quickly. It means something that is disparaging, something that is derogatory, something that is damaging to reputation and this is important, something that would make ordinary decent members of the community think less of the plaintiff.

[After dealing with other issues, her Honour returned to this issue]

[54] ... I have mentioned something that is defamatory is something that is disparaging or derogatory to reputation and you measure that against community standards. That is, what would ordinary decent people in the community think? That is the test that you apply in relation to the sixth imputation contained in question A. *

[* It is tolerably plain that this is a transcription error and that her Honour instructed the jury that this was the test it would apply in relation to the six imputations contained in question A, which related to the six false innuendoes, three of which were the business reputation imputations.]

[55] You listen to the broadcast. You ask yourselves what that would have conveyed to ordinary reasonable listeners, and in doing so you apply the standards of the community. What would ordinary decent people in the community have drawn from that? And you also apply that to whether or not it was defamatory, you apply the standards of ordinary decent members of the community.

[56] In other words, by reference to those people, would any of these imputations, if conveyed, have damaged Mr Chesterton's reputation?

[57] There are two different ways in which a person can be defamed. One is in his personal reputation. Somebody might publish something about a person that injures him in his personal reputation; in other words, right-thinking members of the community would think the less of him because of what was published.

[58] There is another way in which a person can be defamed. It was adverted to by Mr Evatt as 'business reputation'. In fact, in this case, it probably would be more accurate to say Mr Chesterton claims to have been defamed in relation to the practice of his profession as a journalist. These imputations really divide into those two categories.

[59] Imputations (a), (b) [**sic, the reference should be to (e)], (f), (g) and (h) are all of the first kind, that is they are imputations of something personal about Mr Chesterton's personal reputation. If you decide that any of those imputations would have been conveyed by the broadcast, then you ask whether that imputation would be regarded by ordinary right-thinking members of the community as defamatory, as damaging to his reputation.

[** It was agreed on appeal that this was a transcription error and "(b)" should be read as "(e)".]

[60] Imputations (b), (c) and (d) are imputations concerned with Mr Chesterton's reputation in his profession as a journalist and in that respect you ask yourselves whether the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist.

[61] Let me give you an illustration of this: a person might say 'X' is a thoroughly decent person, but he is getting old, his eyesight is poor and his hands tremble. You probably would not think any less of 'X' if you heard that said about him. But, if you knew that 'X' was a surgeon who depended on good eyesight and a steady hand, you might think, well, that does not do his professional reputation any good, I would not want that person operating on me.

[62] So what is then said about him is something that damages him in his professional reputation, although it would not have damaged him in his personal reputation. That is the distinction between the two classes of imputations that you have here.

[63] You have got three that I have mentioned, (b), (c) and (d) that are concerned with Mr Chesterton in his professional reputation and you have got the remaining five that are to do with his personal reputation. They do not say anything about him in his professional reputation, but they go directly to his personal reputation.

[64] On the other hand, to say that as a journalist he is not to be taken seriously, is very much to do with his professional reputation ..."

55 Her Honour then dealt with issues concerning the true innuendos. At the conclusion of the summing-up the primary judge asked counsel whether they sought any further direction. Mr McHugh replied that her Honour had heard his submissions. Mr Rasmussen made further submissions which her Honour did not accept. Mr McHugh informed the Court on appeal, without demur from the respondent's counsel, that the jury returned with answers to the questions in 45 minutes.

56 The jury found that all the respondent's imputations were conveyed and were defamatory.

57 The appellant complains that the primary judge erred in directing the jury in the manner set out in par [57]-[62] above. It also complains that her Honour erred in directing the jury in accordance with this Court's decision in Gacic which it asserts was wrongly decided. Finally it complains that the jury erred in finding that each of the imputations pleaded was conveyed and was defamatory. This last ground of appeal was not pursued orally or in writing. If successful, the appellant seeks an order setting aside all the jury's findings given on 18 July 2007 and a new s 7A trial.

58 Mr McHugh, who appeared for the appellant on appeal with Ms J L Chambers, seeks leave, if leave be required, to re-argue this Court's decision in Gacic. He submits that Gacic is incorrect, does not rest upon a principle carefully worked out in a significant succession of cases, has wide consequences and is clearly contrary to earlier decisions of this Court and the High Court: see Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 (at 100-101) per Gleeson CJ (Samuels and Priestley JJA and Hope AJA agreeing).

59 Mr McHugh submitted that at common law, there is no separate category or sub-variety of defamation relating to "business defamation" with a separate test as to defamatory meaning. He argued that under the 1974 Act the applicable law governing the issue of defamatory meaning is the common law: s 4(2). He contended that the orthodox test of defamatory meaning was stated in Gardiner v John Fairfax & Sons Pty Ltd [1942] NSWStRp 16; (1942) 42 SR (NSW) 171 (at 172) per Jordan CJ.

60 Next Mr McHugh argued that the passage from Gatley quoted in Gacic (at [32]) does not correctly state the law, is not supported by the authorities cited, and appears to be inconsistent with other passages in Gatley, in particular paragraph [2.27]. He contended that nothing in Gatley supported a separate test for defamation that involved no more than a tendency to "injure the plaintiffs in their trade or business" (cf Gacic at [2] (per Handley JA) and the trial judge's direction in Gacic quoted at [41] (per Beazley JA)).

61 Accordingly Mr McHugh contended the submissions of the respondent to the jury and the primary judge's directions were wrong as a matter of law, were highly prejudicial and caused the s 7A trial to miscarry in its entirety.

62 Mr McHugh submitted that if the Court upheld his primary contention, there should be a new trial on all imputations. He argued that the distinction drawn in the primary judge's directions between "personal" and "business" reputation imputations was bound to confuse the jury in their task in relation to all imputations. He contended that any retrial not involving all imputations would involve a manifest injustice to the appellant.

63 In his written submissions Mr Evatt accepted that the "prevailing test for defamatory meaning for injury to personal reputation and business reputation appears to be community standards", although he suggested that Callinan and Heydon JJ may have rejected the community standards test in Gacic (at [189]-[190]). He submitted, in any event, that the primary judge had applied the community standards test for which the appellant contended. When pressed in oral argument, Mr Evatt accepted that the community standards test was the standard to be applied to "business defamation", a submission which was starkly at odds with that which he advanced at the trial and for which he successfully contended in Gacic in this Court.

64 Mr Evatt argued that in Gacic (at [50]), Beazley JA had referred, in the sense I understand of approving, to the application of community standards. Next he contended that community standards had a role in determining whether business reputation imputations were defamatory, albeit that the importance of that role could vary depending on the type of imputation involved and the degree of community standards required. He contrasted an imputation attacking the plaintiff's reputation as a scientist with one imputing a person was a child molester or a serial killer. He contended that community standards may play a lesser role in the former than the latter case. He did not elaborate on this submission.

65 Finally Mr Evatt submitted that the appellant's submission that there was no separate category of business defamation was incorrect. In support of this proposition he cited T Starkie, A Treatise on the Law of Slander and Libel, 2nd ed (1830) J & W T Clarke (the 1832 edition to which Mr Evatt refers is the New York publication of the same work) and G Spencer Bower, The Law of Actionable Defamation, 2nd ed (1923) Butterworth (republished by Legal Books in 1990).

66 It is first necessary to consider Mr Evatt's submission that despite the primary judge acceding to his submissions, her Honour had, nevertheless, directed the jury in accordance with a "community standards" approach.

67 The primary judge informed the jury that the general test to be applied in determining whether an imputation was defamatory, which she explained as meaning whether "it [d]amaged the reputation of Mr Chesterton", was whether ordinary reasonable members of the community considered the imputation was defamatory, a proposition she said she would refine: summing-up at [19]. She repeated that direction, in substance, at [54]-[56]. However her Honour then turned to explain what she described as the "two different ways in which a person could be defamed." The first was in relation to a person's "personal reputation" and the other was in relation to "business reputation" which she explained in the case of the respondent by reference to his claim "to have been defamed in relation to the practice of his profession as a journalist": summing-up at [58].

68 Her Honour then informed the jury that the imputations divided into those two categories, identifying imputations (a), (e), (f), (g) and (h) as being personal reputation imputations. She directed the jury that if it found any of those imputations conveyed, it then asked "whether that imputation would be regarded by ordinary right-thinking members of the community as defamatory, as damaging to his reputation": summing-up at [59].

69 Her Honour then turned to the business reputation imputations, which she identified as (b), (c) and (d). She directed the jury that it asked "whether the imputations, if conveyed, damaged him in that respect, that is in the practice of his profession as a journalist": summing-up at [60]. Her Honour illustrated an imputation which might damage a person in the practice of a profession (summing-up at [61]) and explained (summing-up at [62]) that it was the respondent's submission that those imputations damaged him in his professional reputation, although not in his personal reputation, and that "that is the distinction between the two classes of imputations that you have here."

70 In my view, taken as a whole, while the summing-up invited the jury to consider the question of whether something was defamatory by considering what "ordinary decent people in the community thought", the distinction her Honour drew between the personal reputation imputations and the business reputation imputations was such as to invite the jury to consider that in relation to the latter, the only test was whether the imputations, if conveyed, damaged the respondent's professional reputation as a journalist.

71 Because her Honour contrasted those imputations with the personal reputation imputations and specifically directed the jury that in the latter case the test to be applied was whether ordinary right-thinking members of the community would regard the imputation as defamatory, a reasonable interpretation of the summing-up is that the jury was not directed to apply that standard to the business reputation imputations. That is the view I take of the summing-up. It is consistent with her Honour accepting Mr Evatt's submissions and applying Gacic as he argued it. Alternatively the summing-up was confusing to the extent that it referred both to the community standards test, but distinguished between two classes of imputations in a manner which had the potential to lead the jury to believe the community standards test did not apply to the business reputation imputations. Either way if the direction that community standards did not apply to the business reputation imputations was incorrect, or if the summing-up was confusing in this respect, it is possible the jury's verdict might have been different so that a substantial wrong or miscarriage will have been occasioned to the appellant which would warrant a new trial: Uniform Civil Procedure Rules, 51.53(1); AK v The State of Western Australia [2008] HCA 8 (at [59]) per Gummow and Hayne JJ.

72 This conclusion means it is necessary to consider the substantive appeal.

73 The tort of defamation principally consists in the operation of defamatory matter as an actual disparagement of the plaintiff's reputation: Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1 (at 8) per Isaacs J; Lee v Wilson and Mackinnon [1934] HCA 60; (1934) 51 CLR 276 (at 290) per Dixon J; Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632 (at 639) per Mason and Jacobs JJ (with whom Stephen J agreed). It is the remedy provided by the law for words which injure a person's reputation: Joyce v Sengupta [1992] EWCA Civ 9; [1993] 1 WLR 337 (at 341); [1992] EWCA Civ 9; [1993] 1 All ER 897 (at 901), cited with approval by Gummow J in Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; (2001) 208 CLR 388 (at [58]); see also Gatley (at [1.1]); J G Fleming, The Law of Torts, 9th ed (1998) LBC Information Services (at 580) ("Fleming"). As Stephens J said in Sungravure Pty Ltd v Middle East Airlines Airliban SAL [1975] HCA 6; (1975) 134 CLR 1 (at 16), "[t]o impute a condition to a man's business which neither reflects upon his personal character or reputation nor carries any suggestion that he is in any way responsible for that condition is ... a long way short of being defamatory at common law".

74 The classic definition of what is defamatory in the reputational sense was given by Lord Wensleydale in Parmiter v Coupland [1840] EngR 168; (1840) 6 M & W 105 (at 108); [1840] EngR 168; (1840) 151 ER 340 (at 341-342):

"A publication, without justification or lawful excuse, which is calculated to injure the reputation of another, by exposing him to hatred, contempt, or ridicule, is a libel. Whether the particular publication, the subject of inquiry, is of that character, and would be likely to produce that effect, is a question upon which a jury are to exercise their judgment and pronounce their opinion as a question of fact."

75 In Capital & Counties Bank v Henty Ltd (1882) 7 App Cas 741 (at 762), after citing this passage, Lord Penzance added that while Lord Wensleydale was "only speaking of libels which affect reputation and character ...[he was] not aware that those which affect a man's credit in his trade stand on any different footing"; see also Tournier v National Provincial & Union Bank of England [1924] 1 KB 461 (at 477) per Scrutton LJ.

76 A person who is defamed gets damages because he or she was injured in his or her reputation, that is because he or she was publicly defamed. Damages in a defamation action vindicate the plaintiff to the public, and are consolation for a wrong done: Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 (at 150) per Windeyer J.

77 According to Spencer Bower (at 3) reputation, in the case of a natural person:

"...means and includes (a) in the case of a natural person- the esteem in which he is held, or the goodwill entertained towards him, or the confidence reposed in him by other persons whether in respect of his personal character, his private or domestic life, his public, social professional, or business qualifications, qualities, competence, dealings, conduct or status or his financial credit..."

78 As is apparent from Spencer Bower's statement, a person's reputation is not confined to general character and standing but extends to his or her trade, business or profession, and words will be defamatory if they impute lack of qualification, knowledge, skill, capacity, judgment or efficiency in the conduct of that trade, business or professional activity: Halsbury's Laws of England, 4th ed, vol 28 (reissue), par [42], Gorman v Barber [2004] NSWCA 402; (2004) 61 NSWLR 543 (at [32]) per Mason P (Beazley and Santow JJA at 69 agreeing); Drummond-Jackson v British Medical Association [1970] 1 All ER 1094 at 1104; [1970] 1 WLR 688 (at 699) per Pearson LJ; see also Scott v Sampson (1882) 8 QBD 491 at 503 per Cave J; Berkoff v Burchill [1996] EWCA Civ 564; [1996] 4 All ER 1008. I will return to this issue.

79 It has been said that "[t]here is no complete or comprehensive definition of what constitutes a defamatory statement, since the word 'defamatory' is nowhere precisely defined" (Halsbury, op cit). However, as a general rule it is illegal, under the law of defamation, (and subject to defences) to publish about a person anything which is likely to cause ordinary decent folk in the community, taken in general, to think the less of that person: Gardiner v John Fairfax & Sons Pty Ltd per Jordan CJ (at 172).

80 Gardiner was followed in Boyd v Mirror Newspapers Ltd [1980] 2 NSWLR 449 (at 452), where Hunt J (as his Honour then was) said (footnotes omitted):

"(11) To be defamatory of the plaintiff, the imputation relied upon must be such as is likely to cause ordinary decent folk in the community, taken in general, to think the less of him: Gardiner v John Fairfax & Sons Pty Ltd; Consolidated Trust Co Ltd v Browne. At common law, in general, an imputation, to be defamatory of the plaintiff, must be disparaging of him. This much is clear from the judgments of the High Court in Hall-Gibbs Mercantile Agency Ltd v Dun and in Sungravure Pty Ltd v Middle East Airlines Airliban SAL, in which the contrary position in relation to the statutory extension to the definition of defamatory matter in the codes was contrasted with the common law position. I say that this is 'in general' the position, as the common law also recognizes as defamatory an imputation which, although not disparaging, tends to make other persons 'shun or avoid' the plaintiff, for example, by attributing to him that he is insane: Morgan v Lingen; or by attributing to her that she has been raped: Youssoupoff v Metro-Goldwyn-Mayer Pictures Ltd, as well as an imputation that displays the plaintiff in a ridiculous light, notwithstanding the absence of any moral blame on his part: Cook v Ward; Dunlop Rubber Co Ltd v Dunlop; Burton v Crowell Pub Co. See also Zbyszko v New York American Inc."

81 In Reader's Digest Services Pty Ltd v Lamb [1982] HCA 4; (1982) 150 CLR 500 (at 505-506) Brennan J (as his Honour then was and with whom Gibbs CJ, Stephen and Wilson JJ agreed and Murphy J generally agreed) drew together the authorities about whether or not a publication was defamatory. He said:

"Where no true innuendo is pleaded and the published words clearly related to the plaintiff, the issue of libel or no libel can be determined by asking whether hypothetical referees - Lord Selborne's reasonable men (Capital and Counties Bank v Henty (1882) LR 7 App Cas 741, at 745) or Lord Atkin's right-thinking members of society generally (Sim v Stretch (1936) 52 TLR 669, at p 671) or Lord Reid's ordinary men not avid for scandal (Lewis v Daily Telegraph Ltd (1964) AC, at 260) - would understand the published words in a defamatory sense. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation (Byrne v Deane (1937) 1 KB 818, at 833), being a standard common to society generally (Miller v David (1874) LR 9 CP 118; Myroft v Sleight (1921) 90 LJKB 883; Tolley v J S Fry & Sons Ltd [1931] UKHL 1; (1930) 1 KB 467, at p 479)." (emphasis added)

82 As will be apparent from Brennan J's statement of the understanding of the hypothetical referee "being a standard common to society generally", the publication must lower the plaintiff's reputation "in the eyes of right-thinking men generally". A publication which only disparages a person "in the eyes of a particular section of the community but ... not...in the eyes of the average right-thinking man is not actionable within the law of defamation": Tolley v J S Fry & Sons Ltd [1931] UKHL 1; [1930] 1 KB 467 (at 479) per Greer J.

83 In Favell v Queensland Newspapers Pty Ltd [2005] HCA 52; (2005) 79 ALJR 1716 (at [9]) Gleeson CJ, McHugh, Gummow and Heydon JJ considered whether a newspaper article, published by the first respondent and written by the second respondent, was capable of bearing certain defamatory meanings. In considering how a judge should approach the exercise of determining as a matter of law whether the matter complained of was capable of bearing a defamatory meaning, their Honours approved the statement by the Privy Council in Jones v Skelton [1964] NSWR 485 (at 491); [1963] 1 WLR 1362 (at 1370 - 1) that the "test of reasonableness guides and directs the Court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense". They added (at [10]) that in determining what reasonable persons could understand the matter complained of to mean, the court should bear in mind that the "ordinary" person "does not live in an ivory tower ... is not inhibited by a knowledge of the rules of construction [and] ... can and does read between the lines in the light of his general knowledge and experience of worldly affairs". They held (at [18]) that the imputations were capable of being conveyed.

84 Kirby J generally agreed with the majority's reasons (at [19]), but criticised (at [23]-[26]) their invocation of the "fiction of the 'ordinary reasonable reader' to reinforce the conclusion" that the imputations were capable of being conveyed. His Honour made somewhat similar observations in Chakravarti v Advertiser Newspapers Ltd [1998] HCA 37; (1998) 193 CLR 519 (at [134]) where he accepted that "[t]he basic question ... is whether the matter complained of, understood in its natural and ordinary meaning, would tend to lower the subject in the estimate of such an evocation of the ordinary, reasonable, member of society". I do not understand his Honour's criticisms of the invocation of the ordinary reasonable reader to strike at the standards the jury considering the question whether the imputations are defamatory should be directed to apply.

85 A publication is capable of being defamatory even though it arguably does no more than expose the plaintiff to ridicule, but that exposure has to be such as to tend to injure the plaintiff's reputation. Berkoff v Burchill was such a case. There the question arose whether the following words published in a review of a film version of "Frankenstein" were capable of being defamatory of Mr Berkoff:

"The Creature is made as a vessel for Waldman's brain, and rejected in disgust when it comes out scarred and primeval. It's a very new look for the Creature - no bolts in the neck or flat-top hairdo - and I think it works; it's a lot like Stephen Berkoff, only marginally better-looking."

86 Although the Court divided as to the capacity of the matter complained of to convey, as a question of law, a defamatory imputation, O'Neill LJ and Phillips LJ holding it could, Millett LJ dissenting, all were of the view that to be capable of being defamatory the matter complained of had to tend to injure the plaintiff's reputation. After reviewing a number of authorities on what constituted defamation, O'Neill LJ concluded (at 1013):

"It will be seen from this collection of definitions that words may be defamatory, even though they neither impute disgraceful conduct to the plaintiff nor any lack of skill or efficiency in the conduct of his trade or business or professional activity, if they hold him up to contempt, scorn or ridicule or tend to exclude him from society. On the other hand, insults which do not diminish a man's standing among other people do not found an action for libel or slander. The exact borderline may often be difficult to define." (emphasis added)

"It is trite law that the meaning of words in a libel action is determined by the reaction of the ordinary reader ... it would, in my view, be open to a jury to conclude that in the context the remarks about Mr Berkoff gave the impression that he was not merely physically unattractive in appearance but actually repulsive. It seems to me that to say this of someone in the public eye who makes his living, in part at least, as an actor, is capable of lowering his standing in the estimation of the public and of making him an object of ridicule." (emphasis added)

87 Phillips LJ recognised (at 1020) that the law of defamation protects reputation and that reputation was not generally dependent upon physical appearance. He acknowledged that "with one possible exception, [there was] no precedent for holding it defamatory to describe a person as ugly". While he concluded (at 1021) that "a statement that a person is hideously ugly does not fall into that category of statements that are defamatory because they tend to make people shun or avoid the plaintiff", he was also of the view that the words described the plaintiff as hideously ugly by way of ridicule and that the question whether they exposed him to ridicule to the extent that his reputation has been damaged must be answered by the jury.

88 In a strongly worded dissent, Millett LJ observed (at 1019) that defamation had never been satisfactorily defined, that "[a]ll attempted definitions are illustrative [and not] exhaustive [and that] [a]ll can be misleading if they cause one to forget that defamation is an attack on reputation, that is on a man's standing in the world." While he did not doubt "that the words complained of were intended to ridicule Mr Berkoff, [he did] not think they made him look ridiculous or lowered his reputation in the eyes of ordinary people".

89 It is not necessary to consider this aspect of defamation law further. For present purposes Berkoff underscores the proposition that even in the case of an imputation which exposes a person to ridicule, the Court was of the view that the plaintiff's standing (O'Neill LJ) or reputation (Phillips LJ and Millett LJ) had to be lowered before the imputation was capable of being defamatory.

90 Finally I would note that, as I said at the outset of this section of my reasons, "the tort of defamation principally consists in the operation of defamatory matter as an actual disparagement of the plaintiff's reputation". There is an exception to this "rule" in the case where the defamatory character of the imputations rests on their tendency to exclude the plaintiff from society rather than on their capacity to work an injury to reputation: Sungravure (at 24) per Mason J. Thus a non-disparaging imputation could be defamatory if it caused other persons to shun the plaintiff. Such cases are ordinarily confined to allegations of mental illness, instability, rape and matters connected with personal characteristics: Khor v Nationwide News Pty Ltd [1999] VSC 38 (at [9]) per Hedigan J; see also Boyd (at 453) per Hunt J; Ettingshausen v Australian Consolidated Press Ltd (1991) 23 NSWLR 443 (at 447 ff) per Hunt J; McDonald v North Queensland Newspaper Company Ltd [1997] 1 Qd R 62.

91 The common law recognises that a person has both a personal and a business reputation. A statement which tends to injure a person in the way of his or her office, profession or trade is defamatory if it involves some disparaging reflection upon that person's personal character or upon the mode in which that person carries on business, that is to say his or her business reputation: Sungravure (at 13) per Stephen J; see also World Hosts (at 638) per Mason and Jacobs JJ (with whom Stephen J agreed); Gorman v Barber (at [32]). Thus the common law gave a remedy in defamation for words which did not impute any moral fault or defect of personal character to a trader, business or professional person but imputed lack of qualification, knowledge, skill, capacity, judgment or efficiency in the conduct of his trade or business or professional activity: Drummond-Jackson v British Medical Association (at 1104) per Pearson LJ.

92 Statements which disparage a person's business reputation are defamatory if right-thinking members of the community would conclude that they had that tendency. Thus, in Potts v Moran (1976) 16 SASR 284 (at 302), Bray CJ (with whom Wells and Sangster JJ agreed) observed;

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