Richards v State of New South Wales [2004] VSC 198

5. Following his conversation with Mr Smidt, Mr Boreham wrote an article which was published in the business section of The Australian newspaper on 12 August 2002. That article contained the following passage:-

"The NSW government claims the firm, which is licensed under the Australian Securities and Investments Commission financial services regime, has flouted NSW gaming laws by operating in the state. A spokesman for NSW Gaming Minister Richard Face said IG had illegally advertised its services in the state. This was because the firm was not a licensed bookmaker and had not received approval to offer its form of gambling. `We have no doubt it is illegal and we have told ASIC', the spokesman said."

9. Two columns further on in the article it identified one Peter Richards as being the executive director of IG Australia.

12. On 22 August 2003 Peter Gregory Richards filed a writ in this Court claiming damages against the state of New South Wales for defamation. His claim against the State Government was in its capacity as Mr Smidt's employer. The thrust of the plaintiff's claim was that Mr Smidt had spoken to a journalist from The Australian in words defamatory of him, in circumstances where the publication of those words or the substance of them in the newspaper was a natural and probable consequence of his having had the conversation alleged with the journalist concerned. The plaintiff's claim was put in two ways; that the article in The Australian published the actual words spoken by Mr Smidt and that, in any event, the article itself was either impliedly authorised by Mr Smidt or was a natural and probable consequence of his having had the conversation alleged with the journalist concerned.

15. The proceeding was managed in the Major Torts List and eventually fixed for trial on 20 March 2004. Following a pre-trial directions hearing on 13 March 2004 the defendant issued a summons seeking, pursuant to RSC r.47.04, the determination of a separate issue before trial, namely, as to whether the plaintiff was sufficiently identified by Smidt as to entitle him to succeed on the cause or causes of action pleaded by him against the defendant. In the alternative, the defendant's summons sought summary judgment on the ground that the plaintiff could not prove the facts necessary to establish identification.

18. The defendant filed two affidavits in support of its summons; one by Mr Boreham and one by Mr Smidt.

21. Mr Boreham's affidavit deposed to his recollection of his conversation with Mr Smidt and subsequent conversations with a Mr Matt Wilson of IG Index and with the plaintiff. He deposed that at no time during his conversation with Mr Smidt did Mr Smidt mention the name of the plaintiff or, indeed, the name of any other natural person.

24. Mr Smidt's affidavit deposed to his having conducted a series of interview with journalists in relation to the issue of spread betting and IG Index. He said he believed that one of the journalists he spoke to was Mr Boreham. At the time he had the conversation with Mr Boreham, Mr Smidt says that he did not know of the existence of the plaintiff and he knew of his connection with IG Index only after reading the article in The Australian. He had no recollection of Mr Boreham mentioning the plaintiff's name to him in the course of his telephone conversation. Whilst he had no specific recollection of his conversation with Mr Boreham, he did not dispute the substance of that conversation as deposed to by Mr Boreham in his affidavit.

27. Upon the matter coming on for trial on 20 May 2004, counsel for the defendant, Mr R Weaver, moved in terms of the defendant's summons that the preliminary issue to which I have referred be determined prior to trial. Mr W Houghton QC, for the plaintiff, did not oppose Mr Weaver's application, although he did not consent to it. He referred to the common reluctance of courts to determine a preliminary issue unless the determination of such an issue was likely to lead to a significant saving of time or costs.[1]

30. The trial of this proceeding is to be before a judge sitting without a jury. Accordingly, the question of identification of the plaintiff will have to be determined by the judge in the course of the trial as one of the significant matters going to the issue of liability. In the circumstances I considered it not inappropriate that the defendant's motion be acceded to and the question of identification be resolved forthwith. A resolution in favour of the defendant's contention will eliminate the necessity for the trial to occur, thus obviating the expenditure of considerable time and costs. Of course, should the plaintiff succeed, the trial would have to proceed but one of the principal issues will already have been determined.

33. Accordingly, I proceeded to hear the preliminary issue of identification which was defined for the purposes of the order which I made as being the issue raised by paragraphs 10, 11 and 12 of the plaintiff's further amended statement of claim (which was filed on the morning of the trial by leave) and paragraph 7 of the defendant's defence.

36. Paragraphs 10, 11 and 12 of the plaintiff's further amended statement of claim contained allegations that both the substance of the conversation between Mr Smidt and Mr Boreham and the allegedly defamatory article containing the conversation were each "of and concerning the plaintiff". Paragraph 12 was an assertion that each of the publications referred to were concerning the plaintiff in his office as a director of IG Australia Pty Ltd and senior executive of IG Index PLC.

39. Mr Houghton read two affidavits sworn by John Steward Wheller and Karim Temsamani respectively in which each of these deponents deposed as to their knowledge of IG Index Plc, IG Australia Pty Ltd and the IG Group. Mr Wheller said that whenever he read anything in the press or otherwise referring to IG in Australia he automatically and instinctively associated that reference with the plaintiff and identified the plaintiff with it. He understood the references to IG in the article in The Australian to be references to the plaintiff.

42. Mr Temsamani swore that the plaintiff is and always has been, to his mind, synonymous with the IG Group in Australia. When he read the article in The Australian he immediately associated the remarks attributed to the New South Wales Racing and Gaming Minister's spokesman concerning IG, with the plaintiff.

45. Mr Houghton also read the defendant's sworn answers to interrogatories delivered for its examination by the plaintiff numbered 1(d), 1(e) and 1(b)(v) in support of his argument.

48. Neither party sought to cross-examine any deponent of any affidavit and neither party sought to call any further evidence. Each party filed extremely helpful outlines of argument with appropriate references to authorities in support of his and its contentions.

51. The defendant's argument is that as neither Mr Smidt nor Mr Boreham knew of the plaintiff's involvement in IG Index when they had their conversation (much less his identification with IG generally) so that the words published by Mr Smidt to Mr Boreham could not have been of and concerning the plaintiff. Mr Weaver referred to Baltinos v Foreign Language Publications Pty Ltd.[2]

54. That unusual case concerned the publication of libellous statements in a newspaper concerning unidentified persons, together with an invitation to readers to view a television programme which would enable readers who viewed it to identify the subject of the newspaper's libel. Hunt J began his discussion of the case by referring to the basic principle of defamation law that a plaintiff's cause of action arises at the time of the defendant's act of publication and not later. His Honour went on to point out that where a plaintiff had to rely upon a reader's knowledge of extrinsic facts, that knowledge must exist at the time of the defendant's publication to that reader. A subsequent publication can only be used as an extrinsic fact if that publication is also by the defendant and if the extrinsic fact goes only to the identification of the plaintiff. His Honour referred to Hayward v Thompson.[3]

57. Mr Weaver also referred to the judgment of Lord Denning MR in Grappelli v Derek Block Limited where His Lordship said:-

"I prefer to go by the principle that in defamation a cause of action arises (and a writ can be issued) as soon as the words are published to a person then knowing all the material facts. If there are extrinsic facts, he must know them then at the time of publication. That is when a cause of action arises. It cannot be made into a cause of action by reason of facts subsequently coming to the knowledge of the reader or hearer."[4]

61. Mr Weaver argued that the relevant publication in this case was publication of the defamatory words by Mr Smidt to Mr Boreham. He submitted that the "time of publication", referred to by both Hunt J and Lord Denning MR, was the time of the conversation by telephone between the two men concerned. But at the time Mr Smidt spoke the defamatory words to Mr Boreham he knew that he was speaking to a journalist and he said nothing to that journalist to convey to him that what he said was not to be republished. Indeed the reasonable inference would be to the contrary. Thus, the republication by Mr Boreham in The Australian of what he was told by Mr Smidt was a natural and probable consequence of the original conversation in which Smidt spoke the defamatory words.[5] Gatley on Libel and Slander expresses this principle in the following terms:-

"Although one should now avoid any tendency to state the law in rigid categories, it may still be useful to recognise that there are certain situations in which it will be readily held the defendant is responsible for the consequences of further publications. In some cases the original publisher authorises or intends the republication. Thus if a person submits material to a newspaper or tells a reporter a story defamatory of the claimant without restriction on its publication, makes statements at a press conference or issues a press release, he will be liable for the publication in the newspaper".[6]

65. Mr Smidt is responsible in law for the republication in this case and, as Hunt J said in Toomey v Mirror Newspapers Ltd:-

". . . the damage which flows from the republication must be considered to be such as would flow from the defendant's original publication in the ordinary and usual course of things and thus be recoverable as a consequence of that original publication in accordance with the general principles relating to damages in tort."[7]

69. It is immaterial that neither Mr Smidt nor Mr Boreham knew the plaintiff or knew of his connection with IG Index. The plaintiff is not suing in respect of Mr Smidt's publication to Mr Boreham. Some readers of the republication of Mr Smidt's words in The Australian understood those words to be "of and concerning the plaintiff" because they understood the plaintiff to be synonymous with IG Index Plc and IG Australia Pty Ltd in Australia. Thus the causes of action upon which the plaintiff relies were complete at the time The Australian republished the original defamatory words in circumstances where even one person could identify the plaintiff in the way Mr Wheller and Mr Temsamani swore they did in their respective affidavits.

72. Mr Weaver submitted that the only identification of the plaintiff in the article in The Australian was identification by The Australian itself, by publishing his name and that this constituted a novus actus interveniens. But that is not the evidence of Mr Wheeler and Mr Temsamani. They recognised the plaintiff in the reference to IG Index. The fact that his name also appeared in The Australian article is irrelevant to the existence of the plaintiff's cause of action against sued upon in this proceeding, although it may be relevant to the proof of and assessment of damages; that is to say as to the causation of his loss, if any.

75. Mr Houghton put an alternative argument to the effect that the publication by The Australian of the plaintiff's name was itself a natural and probable result of Mr Smidt having uttered the defamatory words relied upon. His argument was that it was a natural and probable result of the conversation between Mr Smidt and Mr Boreham, that Mr Boreham would make further inquiries and would seek a response from someone connected with IG Index. That he did so, and that as a consequence published the plaintiff's name, says Mr Houghton, means that even if Mr Weaver's submission that the only method of identification of the plaintiff was by reason of that publication is correct, the defendant would still be liable. In the circumstances, as this argument would have implications for the assessment of damages, as I have already noted, I decline to consider Mr Houghton's submission further. It will be sufficient to consider it and any further argument Mr Weaver might put in respect of it, in the context of causation and the assessment of damages, if those matters ultimately become relevant.

78. I determine the preliminary issue raised by paragraphs 10, 11 and 12 of the plaintiff's further amended statement of claim and paragraph 7 of the amended defence in the plaintiff's favour. That is to say, I find that the "words" and the "further words" as defined in the plaintiff's further amended statement of claim were of and concerning the plaintiff in his office as a director of IG Australia Pty Ltd and senior executive of IG Index Plc. The trial of this proceeding may now proceed with those issues having been found in the plaintiff's favour and against the defendant.

[1] See generally the comments of Brooking J in Jacobson v Ross [1995] VicRp 24; [1995] 1 V.R. 337 at 344-345 and of Smith J at 351-352. See also Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd [2001] VSC 449 and Australian Communications Corporation v Coles Myer Ltd [2002] VSC 443.

[2] (1986) 6 NSWLR 85.

[3] [1982] QB 47.

[4] [1981] 1 WLR 822 at 825.

[5] See Speight v Gosney (1891)60 L.J.Q.B. 231_; Slipper v BBC_ [1991] 1 Q.B. 283; Adams v Kelly (1824) Ry. & M. 157; Parkes v Prescott (1869) L.R. 4 Ex. 169; Sims v Wran [1984] 1 NSWLR 317.

[6] 10th London ed (2004), par [6.36].

[7] (1985) 1 NSWLR 173 at 183.