ROWAN v CORNWALL & ORS

ROWAN v CORNWALL & ORS - [2002] SASC 160 - SASC 2002 case summary — Zoe

[458]

At the meeting on 12 May it had been decided to include the unsubstantiated allegations and other criticisms of Christies Beach in the Report. The only logical reason for doing so was that it was intended to withdraw funding from the Shelter. If funding was to be withdrawn, it was unnecessary to include the allegations. I find that on 12 May Dr Cornwall decided that he would, in due course, withdraw funding from the Christies Beach Shelter. That decision was confirmed at the meeting on 26 May. The reason why Dr Cornwall did not endorse the recommendation to withdraw funding in the minute of 29 May was that he knew that he had to wait for the Report of the Review Committee. It was clear to all that the decision to withdraw funding and to establish a new shelter could not finally made until the Report, which contained his reasons for withdrawing funding, was ready for publication and Dr Cornwall had the concurrence of his federal counterpart. The only decision which remained to be made was when the decision to withdraw funding would be announced. The events which followed the meeting of 12 May might be consistent with a decision to make contingency plans against the day when funding might be withdrawn, but they are more consistent with the fact that the meeting on 12 May had decided to withdraw funding. The conclusion that Dr Cornwall made his decision in May is reinforced by the fact that after 29 May, the Christies Beach Shelter was treated in a way quite different from the shelter at North Adelaide. The conclusion is also confirmed by Ms King's evidence that arrangements for a shelter to replace the Christies Beach Shelter were being made before she signed the report. In addition, Dr Cornwall was going overseas on 8 July. He wanted the matter resolved before he left. There was no evidence of any meeting before he left on 8 July with either the Department or the Review Committee after the meeting on 26 May nor of any documents in which he decided to withdraw funding. Dr Cornwall met Mrs Roberts, once in June and once in July, but she had no authority in relation to funding. That points to the conclusion that he decided on both 12 May and 26 May that he intended to withdraw funding subject to the concurrence of the Commonwealth Minister. Finally, as Mr Vardon said at this time, it was clear that the Christies Beach Shelter had no intention of complying with the financial constraints which the Department required (which plainly included signing the Financial Agreement) and the Department had come to the end of the road.

[547]

I have already found that Dr Cornwall had decided in May that, subject to the concurrence of the Commonwealth Minister, funding would be withdrawn from Christies Beach. All that remained for him to decide was when the decision would be announced and that depended on the Report of the Review Committee being ready for publication. Only then could he seek the concurrence of his federal counterpart. By 1 July he had the Report in his hands and was ready to proceed. He wished to table the Report and withdraw funding before he left to go overseas. However, he had been frustrated in that endeavour because he could not secure a waiver of the 10 day rule. He therefore took the steps necessary to enable the matter to be placed before Cabinet as soon as he returned. That is apparent from the fact that on 7 July 1987 he had signed the minute to Cabinet recommending that the Report be noted and be approved for tabling in the Legislative Council. The signing of that minute shows he had decided when to announce his decision. There was no other point in doing so. Although the Department would, as a matter of course, continue to process matters while its Minister was overseas, that does not explain the coincidence of Dr Cornwall's return to his parliamentary duties on 10 August and the fact that the minute was before Cabinet on the very same day. I do not accept Dr Cornwall's evidence to the effect that he did not put the arrangements in place before he left. The conclusion that the timetable had been put in place before Dr Cornwall went overseas is confirmed by Ms King's report dated 5 August 1987 to the first Assistant Secretary of her Department in which she said that Dr Cornwall was "expected to return to SA on 11 August and tabling of the Report is to occur on that day or at least in that Parliamentary week". Although she was slightly inaccurate as to dates, the substance is correct. In addition, the Department took the formal steps to enable the decision to be announced. Before scrutinising those steps, it is necessary to note other events in July.

[712]

The Christies Beach Shelter was operated by an incorporated association. Its funding depended entirely on government grants. For more than eight or nine years it had received annual grants supplemented when necessary to offset deficits. The grants had been received from the South Australian Government through the Department of Community Welfare and the State Government had also received funds for this purpose from the Commonwealth Government. Although it is clear that all shelters had been informed that future funding of deficits would not be made until the Financial Agreement had been signed, both the Christies Beach and North Adelaide shelters continued to receive fortnightly payments. Given the recurrent nature of its funding, the Christies Beach Shelter was entitled to be heard before its funding was withdrawn. It had a legitimate expectation that it would at least continue to receive ordinary funding. Although the Shelter knew that future funding depended on the signing of the Financial Agreement, it had continued to be funded on a fortnightly basis since November 1986 notwithstanding that it was refusing to sign the Agreement. The fact that fortnightly payments had continued for more than six months gave it a legitimate expectation that it would be heard before any decision was made to withdraw funding completely. The very existence of the Shelter depended on government funding and the continued receipt of the fortnightly payments. The withdrawal of funding would cause the Shelter to close. It was, therefore, entitled to be heard before its funding was withdrawn: see Banks v Transport Regulation Board (Vic) [1968] HCA 23; (1968) 119 CLR 222; FAI Insurances Ltd v Winneke (1982) 151 CLR 342. Any doubt about the entitlement to be heard was removed by the express promise made on behalf of Dr Cornwall on 20 February 1987 and repeated on 15 May that he would meet representatives of the Christies Beach Shelter and the North Adelaide Shelter to discuss funding: R v Liverpool Corporation; ex parte Liverpool Taxi Fleet Operators' Association [1972] 2 QB 299; Attorney-General (Hong Kong) v Ng Yuen Shiu [1983] 2 AC 629 and Cole v Cunningham [1942] ArgusLawRp 77; (1983) 49 ALR 123. In other words, by reason of Dr Cornwall's promise, the Christies Beach Shelter had an actual expectation, as well as the legitimate expectation provided by the common law rule, that it would be heard before funding would be withdrawn. Without relying on it, I simply note, in passing, that denying the Shelter a hearing was contrary to cl 10 of the Financial Agreement. As the Christies Beach Shelter had not signed that Agreement, it could not expect to get the benefits of it.

[715]

As mentioned earlier, the decision to publish the allegations was made notwithstanding clear warnings that it might be difficult to substantiate them. The first was on 11 May 1987 when Ms Wighton informed Dr Cornwall in a minute that "some of the details of strange financial behaviour may not be able to be substantiated in a court of law". She then suggested that they be handled differently from the body of the Report. That advice was given before the police and CAC had been requested to conduct enquiries on 29 May. This advice is significant in that it is given by a very senior officer in the Department and it shows that she then had misgivings as to the quality of some of the unsubstantiated allegations. That fear was restated after a preliminary meeting with the police and CAC on 2 June, when Mr Bicknell informed Dr Cornwall in an undated minute, but seen by Dr Cornwall on 10 June, that "at this stage, it is not believed that criminal offences may have been committed, although investigation of the shelter records may later provide this information". In another minute dated 12 June 1987 and seen by Dr Cornwall on the same day, Mr Bicknell informed Dr Cornwall that the police had said that, on the information then to hand, they would not be able to proceed further but would reconsider it in the light of further examination of materials and further evidence becoming available. The minutes also stated that officers of the CAC had concerns whether a prosecution would be successful. Dr Cornwall's response was to request the Commissioner of Police "to reconsider information/allegations re behaviour of the Administrator, Christies Beach". It was, of course, legitimate for Dr Cornwall to ask the police to make further enquiries. But it is clear that, on the basis of the preliminary information then available to them, the police had said that the evidence was weak. In addition to these warnings, Ms Vardon had expressed a degree of caution in her minute to Dr Cornwall of 19 June in which she reported that the Commissioner of Police had said that "he would have difficulty trying to determine what sort of charges could be laid" but would proceed to conduct the enquiries.

[743]

It would have been more correct to say that auditors were changed in all but one year from 1981 to 1986. But I have no desire to be pedantic on that issue. The misstatement of truth is far more fundamental. The rest of the sentence is accurate as far as it goes but it tells a good deal less than the full story, a story which, I find, was known to Mrs Roberts, Ms Wighton and Ms Anderson. The latter part of the sentence misrepresents the overall position. When standing alone and without further examination, the bald fact that auditors were often changed is likely to give rise to concern. However, when all the facts are examined, that concern dissipates. The history of the auditors at the Christies Beach Shelter is as follows. In 1981, Mr Neverauskas was the Shelter's auditor. His daughter was a member of the management committee. At the meeting of the management committee of the Shelter on 5 May 1982, his letter of resignation was received. The letter was not proved. It may have been lost. At the meeting of the management committee of the Shelter on 7 July 1982, his daughter resigned. She had had differences of opinion with the plaintiff. The resignations of Mr Neverauskas and his daughter were, I find, related. A new auditor was appointed. He was Mr Esdale, who completed the audits for the 1982 and 1983 financial years. Because of his mismanagement of the 1983 audit which has already been mentioned, Mr Esdale was replaced as auditor by a Mr Evans. Given the mishaps in relation to the 1983 audit, the decision to replace him was quite understandable. Mr Evans audited the accounts for the financial years ending 1984 and 1985. At the annual general meeting of the Shelter in October 1985, it was suggested that a woman should be appointed as auditor. It was resolved to appoint Ms Helen Maunder if she was willing to do so and was acceptable to the Department. The resolution also stated that if she was not able to conduct the audit, Mr Evans would be reappointed. Ms Maunder was willing. There seems to have been no objection from the Department. She completed the 1986 audit. In October 1986, the Shelter resolved at its annual general meeting to reappoint her as auditor for the ensuing year but, as already noted, the CAC determined that she was unqualified to conduct the audit. Thus, there were four auditors appointed in respect of six financial years. There were reasons for replacing auditors and those reasons were entirely understandable. The fact that auditors were changed was not indicative of either financial mismanagement or a desire to avoid auditing scrutiny. However, the true facts were not disclosed in the Report. The mere statement "auditors have been changed often", when stated in the context of financial mismanagement, carries the clear innuendo that the Shelter changed auditors either to avoid auditing scrutiny or criticism, or because the auditor refused to comply with requests of the Shelter, or because there was something to conceal, or because the management of the Shelter was corrupt. In truth, none of those were the reasons for the change of auditors. The Review Committee knew the true facts but, instead, chose to make a statement which concealed the true position and so presented a more sinister picture.

[763]

The clear meaning of this paragraph is that the Shelter was closed from 11 July 1983 to 25 August 1983, a period of about six weeks. The innuendo of the third sentence, when read with the first sentence which introduces the topic, is that the Shelter was not operating until 4 October 1983 when officers of the Department visited the premises. I have already found that the Shelter continued to operate throughout the time when it moved from its old premises to the new premises at Damian Court. Soon after the move to Damian Court, the Shelter was fully occupied. For that reason, it was unable to take any referrals in the period 9 July 1983 to 16 September 1983 and remained full thereafter until 4 October 1983. These issues had been discussed at the meeting with the Department on 4 October 1983 and had been noted in Exhibit P4. The Department was satisfied that the Shelter had been fully occupied. In his letter dated 14 December 1983 to the Shelter, Mr Cox said that the questions regarding admission practices had been "satisfactorily resolved". There was clear evidence before the Review Committee that the Shelter had not been inoperative and sound reasons why Crisis Care had been unable to make referrals to it. Thus, in this paragraph the Review Committee not only failed to state the true facts which were known to it, but also failed to state that the matter had been satisfactorily resolved with the Department. Here again, the Review Committee knew the true position which was set out in Exhibit P4 and other documents, including Mr Cox's letter of 14 December 1983, stating that the matter had been "satisfactorily resolved". In other words, the Review Committee knew the true facts but chose to make a statement which concealed the true position. The full facts show a position quite different from that stated in the paragraph. I find that the Review Committee was again reckless with the truth. It was, of course, open to the Review Committee to reach a different conclusion from that reached by the Department. However, it could only do so if evidence existed. The members of the Committee could not point to any other evidence. In truth, there was simply no evidence to support the conclusion that the Shelter had been inoperative for the stated period. In other words, it was simply not possible for the Committee to reach a different conclusion from that which had been reached by the Department. What this paragraph in the Report shows is that the Review Committee was simply not prepared to face the objective facts in relation to the Christies Beach Shelter. Those objective facts got in the way of the picture they wished to present and so they were not stated.

[774]

The Review Committee and, in particular, Ms Anderson as its consultant, was in a position to make some judgement as to the reliability of some of the allegations. The effect of the evidence of Mrs Roberts and Ms Anderson was that they lacked the resources to make any kind of investigation or even assessment of the allegations. This echoed a statement on page 69 of the Report that "the Review Committee was unable to assess the accuracy of all allegations received by the Department" and that it was not its mandate to investigate them. This evidence was unconvincing. The Review Committee had been established to review, among other things, the administrative practices and management structures of women's shelters. Its task required it to analyse information brought to it or other information it ascertained. It had to weigh the material placed before it, determine what action should be taken, and make recommendations to the Minister. If it did not, it was simply collating information. Clearly, its task required more than that. Indeed, the evidence of both Mrs Roberts and Ms Anderson belied this somewhat disingenuous excuse. They recognised that the Review Committee's task was to assess the information. They asserted in their evidence that they believed that the Review Committee could disagree with conclusions reached by the Department. For example, they asserted that they had disagreed with the Department's conclusions that it was satisfied that the complaints had been satisfactorily resolved after its meeting with the Shelter on 4 October, 1983. In this way, they admitted their task required them to assess material. When asked why the Review Committee referred to the qualified auditor's report, Mrs Roberts said that the Review Committee "was not comfortable with the comments and responses" by the Department on that matter. The Committee had investigated the matter, she said. But her answer shows that the investigation was superficial. Neither she nor Ms Anderson nor any other member of the Committee had spoken to the auditor involved. There was, therefore, no reason for the Committee to disagree with the Department's conclusion. There was no reason why it should not state all the relevant facts and assess the allegations which had been made.

[778]

There are too many instances of facts being incorrectly stated to enable the conclusion that they are the result of carelessness. I reject the evidence that the allegations concerning the auditors and the Shelter being closed for a long period in 1983 were included because the Review Committee had reached a different view. The facts which would have been known to the Review Committee do not allow such a conclusion. At the very least the full facts should have been stated. What was stated gave an entirely misleading and inaccurate picture. The failure to include many dates does not inform the reader that most of the allegations related to matters which by July 1987 were more than four years old. This must have been known at least to Mrs Roberts, Ms Wighton and Ms Anderson. Ms Wighton had informed Dr Baum at the meeting on 11 June that the allegations referred to matters "several years ago". Ms Anderson had seen the documents. As Ms Vardon said, the Minister and the Review Committee knew they were old allegations. I find that the Review Committee was entirely reckless with the truth and, on occasions, deliberately failed to set out all the facts. I find it was decided to include everything that could tell against the Shelter. Nothing exculpatory was to be mentioned. I find that the allegations were collated by Ms Anderson with the assistance of Ms Heath and that Ms Wighton made Ms Heath available for that task. I also find that Mrs Roberts, Ms Wighton and Ms Anderson knew what material was available. It is clear from the evidence that Ms Blake, Ms Johnson and Ms King relied on Ms Anderson to acquaint them with all facts relating to the allegations and that neither Ms Anderson nor Mrs Roberts nor Ms Wighton informed them of all of the facts and, in particular, did not show them either Exhibit P4, the minutes of the meeting of 4 October 1983, or the letter from Mr Cox stating the matters discussed at the meeting had been satisfactorily resolved. I find that Mrs Roberts, Ms Wighton and Ms Anderson deliberately misstated the true position concerning the Christies Beach Shelter.

[942]

According to Ms Anderson, the members of the Review Committee brought their own skills to the work of the Committee. For example, Ms Johnson prepared a document called "Administrative Guidelines" which is Appendix I to the Report. Ms Anderson described the Committee as a working committee. That is not an expression which correctly describes the work of the Committee. Although some members clearly assisted with their individual skills, the Committee relied on Ms Anderson primarily for the information which was contained in the Report. It was Ms Anderson who gathered information from the Department's files and other sources and presented it to the Committee. Ms Anderson said that documents which she had examined were copied and presented in a folder which was tabled at meetings for inspection by the Committee. The evidence of Ms Blake, Ms Johnson and Ms King does not bear that out. I prefer their evidence to that of Ms Anderson on this issue. It is clear from the evidence of Ms Blake, Ms Johnson and Ms King that the Committee received little by way of primary documents and relied on summaries presented to them by Ms Anderson. I find that the original documents were not made available to the Review Committee. To the extent that any documents were tabled, few were inspected and such inspection as did occur would have been rather desultory and of little assistance. There is no suggestion that all of the documents which she had inspected were available for the Committee's inspection. It is also plain, even on Ms Anderson's evidence, that all members of the Committee did not read all of the documents. Furthermore, the utility of tabling a bundle of documents without some kind of explanatory document is questionable. To summarise, the evidence clearly shows that Ms Blake, Ms Johnson and Ms King relied heavily on what was provided by Ms Anderson. As Ms Johnson said, she absolutely relied on Ms Anderson. The evidence also clearly shows that it was Ms Anderson who informed the Committee of the allegations against Christies Beach and that that occurred late in the course of the review. I find that it was in May 1987.

[1116]

When viewed as a whole, there are only two matters which are of any real moment, the continued incurring of deficits and the failure to sign the Financial Agreement. The failure to sign the Financial Agreement was bad politics but it was not financial mismanagement. The fact that the Shelter was continually in deficit and requested and received more funds, on its face, may suggest financial mismanagement. After all, if any organization is granted a certain amount of money and is requested not to spend in excess of that sum, prudence requires that the organization stay within that grant. From 1983, the Christies Beach Shelter was continually in deficit. But the fact of a deficit or series of deficits, standing alone, does not prove financial mismanagement. What has been proved is that the Christies Beach Shelter was not prepared to stay within its annual grant; that there was no satisfactory scheme of submitting budgets and allocating funds according to need; that the Christies Beach Shelter continually asked for more funds, and during those years its requests were not refused; that until 1987 funds to run the Shelter kept coming; and that the Department saw the continued overspending at Christies Beach as being part of a political campaign by the Shelter. It is also apparent from the evidence that the only large deficits were in the 1985 and 1986 years. The deficit in 1987 represented what had occurred in previous financial years. The Shelter essentially stayed within its budget in the 1986-1987 financial year. In 1986 the plaintiff was agitating for increased funding for shelters and was clearly supported by her Shelter in that campaign. It is quite clear that the Shelter, generally speaking, knew when it was about to need further funding and made requests in sufficient time to avoid being without funds. That does not necessarily prove sound financial management but it does indicate that the Shelter was aware of its financial situation and that deficits were more likely to be the result of deliberate overspending as part of a political campaign instead of resulting simply from a lack of proper financial management. More significantly, the Shelter produced audited accounts of its expenditure. There is no proof of inappropriate expenditure. As the continued incurring of deficits does not necessarily equate to financial mismanagement, the Review Committee defendants have not proved that fact. In reaching this conclusion, I have had regard to the other matters which were established but they are of minor significance. The evidence also shows that the Shelter only exceeded its annual grants in the line for operating costs. It did not exceed the line for salaries. In relation to its operating costs, the evidence shows that the management and the staff maintained standards of services and standards of furniture and equipment which might have been higher than other shelters. They were intent on providing a broader range of services than other shelters. This meant that their operating costs were higher than their grant. I repeat that officers of the Department were unable to point to areas where spending was excessive or unjustified in relation to the services which the Shelter provided. Viewed as a whole, it has not been established that the staff of the Shelter were guilty of financial mismanagement.

[1143]

In the section in these reasons entitled "Aspects of the Decision to Withdraw Funding" I have already mentioned that the Review Committee knew more about some of the allegations contained in the Report than is stated in the Report; that they failed to tell the whole story in relation to a number of the allegations so that a misleading and inaccurate picture was painted; that they failed to state anything which was favourable to the Shelter or exculpatory of it; that they failed to state anything which they knew was contradictory of the allegations, clear examples being the statements about the auditors and about the Shelter being closed; and that they were reckless with the truth. There are too many instances when the whole story was not told to conclude that the failure to do so resulted from mere carelessness or irrationality. The Review Committee had all the Departmental files available to it. They could make enquiries of the Departmental staff and the Departmental staff were available to do any work which had to be done to assist the work of the Committee. In addition, when reporting the unsubstantiated allegations, there is a complete failure to mention any dates with the consequence that the reader gains the impression that the allegations refer to current matters or matters which have recently occurred. In other words, the reader would have believed that the unsubstantiated allegations had happened recently whereas by far the greater number were three or more years old. It is clear that proper enquiries were not made and, had they been made, some allegations might not have been included or at least stated in quite a different form. In my view, the Review Committee deliberately failed to set out all of the facts. It is apparent that the Committee was prepared to publish anything which was critical of the Shelter and the plaintiff, no matter that it might be of little weight, no matter what its credibility, and no matter whether they had contradictory material or material which qualified what was included. The fact that the Review Committee was presenting a report which was to be tabled in the Parliament, which was to be available to the public, and which was to be the basis of action by State and Commonwealth Ministers made it essential that what was contained in it was fairly stated. One obvious reason for that conclusion is that a report of this kind by a committee of selected persons within and without the relevant departments would be perceived as a document on which reliance could be placed. As will be seen, this was precisely what the ABC and TVB did on 12 August 1987. It is apparent that the facts about the Christies Beach Shelter were not fairly stated. I find that there is sufficient evidence that members of the Review Committee did not honestly believe that what they were stating in the Report concerning the Christies Beach Shelter was correct. Those members were guilty of malice with the consequence the qualified privilege which otherwise attached to the Report is lost. That conclusion is reinforced by the fact that the members of the Review Committee who gave evidence admitted that they did not know whether the unsubstantiated allegations were true or not.

[1156]

It might be evidence of malice if the defendant includes defamatory matter that is extraneous and not necessary to the fulfilment of the duty to report: Horrocks v Lowe at 151; Bellino v Australian Broadcasting Corporation [1996] HCA 47; (1996) 185 CLR 183 per Brennan CJ at 201- 205. The inclusion of the irrelevant material may afford evidence of malice and can destroy the privilege attracting to the relevant parts: see also Adam v Ward at 326 - 327. The test is whether, "in all the circumstances, it can be inferred that the defendant either did not believe it to be true or, though believing it to be true, realised that it had nothing to do with the particular duty or interest on which the privilege was based, but nevertheless seized the opportunity to drag in the irrelevant defamatory matter to vent his personal spite, or for some other improper motive": Horrocks v Lowe at 151. Lord Diplock added that here, too, judges and juries should be slow to draw the inference. The question to be determined is not whether the Review Committee travelled outside its Terms of Reference, when including in the section in the Report dealing with Christies Beach and the recommendation to withdraw funding, but whether it was necessary to include the unsubstantiated allegations in the Report. The Review Committee asserted that their purpose for including the allegations was to inform Dr Cornwall about them. But in their evidence, they said that they had grounds for the recommendation to withdraw funding without having to rely on the unsubstantiated allegations. Furthermore, the Review Committee had already informed him of the allegations in a document which he had seen on 4 May 1987. It is not clear why it was necessary to give such prominence to the unsubstantiated allegations in the Report or why it was necessary to publish them at all. I have already referred to Dr Cornwall's intention in doing so. The Review Committee included the allegations in the Report on Dr Cornwall's direction. The question in the case of the Review Committee is why so much weight was attached to them and why they received so much prominence in the Report. However, it is difficult to rely on this ground as constituting malice because, at the end of the day, the unsubstantiated allegations were included at the direction of Dr Cornwall. I therefore do not rely on it.

[1223]

An examination of the statements which the ABC says are fair comment shows that, with one possible exception, none constitute comment. The opening remarks of Ms Sinclair merely introduce the topic by referring to the review and, the fact that the Christies Beach Shelter is to be closed and the reasons for its closing. The other statements are either answers by Mrs Roberts to the interviewer's questions or questions from the interviewer, sometimes prefaced by a reference to the allegations in the Report. In her answer about the size of deficits Mrs Roberts adds that "we're talking about large amounts of public moneys." But in the context of her answer that remark does not appear to be comment but a statement of fact by her as the person in charge of the review as to the level of deficits. At best, it stated a bare inference but, as it stated that inference without the facts on which it was based, it was an allegation of fact: Kemsley v Foot [1952] AC 345 at 356-357. Only one of the interviewer's questions might be said to constitute comment. It is the last of the italicised remarks. Ms Wilcox, the interviewer, is summarising the allegations. She refers, among other things, to "fraud" and to "people collecting salaries when they're not there". The Report did not expressly allege either fraud or that persons were improperly paid. Furthermore, the program had failed to state that the allegations were unsubstantiated. For that reason those remarks do not, I think, constitute fair comment on some aspects of the Report. However, even if I had reached the contrary conclusion, these words do not colour the rest of the program and, in particular, the defamatory statements of which the plaintiff complains. In addition, it is unrealistic in a broadcast of this kind which is essentially assertion and counter-assertion about allegations concerning the Shelter to plead that it constitutes fair comment. There will be similar programs where comment will be made from time to time but this was not one of them.

[1238]

In this case, I rely on the persuasive remarks of Mason CJ, Gaudron and Toohey JJ in Theophanous (at 134) to the effect that the qualified privilege does not extend to persons who do not hold official or government positions. The plaintiff did not hold an official or government position. She was simply the administrator of quite a small organisation of about five persons who ran a women's shelter. The program did not, therefore, constitute a communication concerning government and political matters. Furthermore, the plaintiff was not a person whose conduct had become the subject of political debate. The plaintiff had certainly been active in political debate in 1986 and in the preceding years. But the subject of the debate was governmental policy with respect to funding for women's shelters, not her conduct. The remarks in the Report concerning the Christies Beach Shelter related to the conduct of its staff and management committee. They did not relate to women's issues or governmental policy. The contrast with Lange could not be more striking. Mr Lange was the Prime Minister of New Zealand. The Four Corners programme concerned the issue whether he was fit to hold that office. Although that part of the Report which related to the Christies Beach Shelter concerned the conduct of its staff and their fitness to work in the shelter, it was dealing with a small organization which was not a government institution and had a staff of only five. The allegations concerned private individuals associated with that shelter, not individuals holding high office who were employed in the public sector. I do not think that the High Court intended that government and political matters should extend to private individuals involved in a small organization of this kind. If I may borrow and invert the remarks in Lange at 568, to do so would impair the legitimate end of protection of personal reputation while unnecessarily and unreasonably extending the freedom of communication about government and political matters.

[1250]

The second factor which suggests that the ABC did not act reasonably stems from the manner in which the program was presented. The 7.30 Report did not constitute an examination of the issues concerning Christies Beach. Instead, it was in effect, an opportunity for Mrs Roberts to repeat what had been said in the Report while Ms McSkimming, as a representative of the Shelter, could do little more than deny the allegations, a task made the more difficult by the vague manner in which the allegations were couched and the fact that they were quite devoid of particularity. It was essentially a series of assertions and counter-assertions tantamount to a series of accusations and denials. Ms McSkimming could do no more than deny the allegations and seek to add whatever she could by way of explanation. The time allowed by the ABC for the program was quite short, so short that it allowed no sufficient time for any reasonable analysis of issues and, in particular, no proper opportunity for Ms McSkimming to respond in an appropriate way. The ABC cannot gain any assistance from the short duration of the program since the duration was of its own choosing. Mr Gretsas described the program as a debate. He misuses the word. While it was in one sense an exchange between Mrs Roberts and Ms McSkimming, it was in truth an edited program put together by the ABC. It was not an argument or discussion in the usual manner of debate. Furthermore, the technique of a so-called debate between protagonists provides little or no opportunity for information to be provided to the public. In truth, all that occurred on this occasion was that allegations which had been broadcast on the ABC news program at 7.00 pm on 11 August were repeated. Those allegations had been published in The Advertiser on the morning of 12 August and Ms McSkimming had then denied them. The 7.30 Report provided no fresh information to the viewers of the ABC other than that the Shelter denied the allegations. It was not, in all the circumstances, reasonable for the ABC to put the allegations to Ms McSkimming in this way.

[1286]

The introduction to the program implies that the allegations as to misconduct are made in the Report by those who participated in the review. The viewer is told that Dr Cornwall has decided to withdraw funding from the Christies Beach Shelter and that decision was made following the tabling of the report which alleges sexual, personal and financial misconduct. With one exception, namely, the charge of overspending, all of the allegations which are mentioned are listed as unsubstantiated allegations on page 65 of the Report. Mr Makin as interviewer does not mention that they are unsubstantiated allegations. He simply calls them "allegations". When that is coupled with the information that the Shelter will be closed, the viewer is led to believe from the very outset that there is substance in the allegations. The impression is conveyed that they are not merely allegations but charges of actual misconduct made by those participating in the review. That impression is then reinforced by the first question Mr Makin put to Mrs Roberts when he said that every one of the thirteen pages devoted to Christies Beach is "damaging" and asked "Just how bad is the situation down there?". After Mrs Roberts had emphasised that Christies Beach had singled itself out, Mr Makin asked if Mrs Roberts could back up the allegations. Mrs Roberts then replied that the recommendation to withdraw funding was based on fact. In this way, the viewer's earlier conclusion that the Report contains charges of actual misconduct is strongly reinforced. Dr Baum's attempt to inform the viewer that the allegations are unsubstantiated and at least two years old was strongly refuted by Mrs Roberts, who repeated that the recommendation to withdraw funding was based on fact. Although Mr Makin later summarised the position by stating that Mrs Roberts had said that the allegations were based on fact and were recent and that Dr Baum had said that they were unsubstantiated, the segment closed with Mrs Roberts saying that women cannot have confidence in the Christies Beach Shelter at the moment.

[1347]

In this case, Dr Cornwall quite deliberately decided that the Report should include all of the allegations, unsubstantiated and otherwise, against Christies Beach. His evidence shows that he was aware that one of the consequences of publishing the Report was that the plaintiff would suffer harm to her reputation and thereby suffer loss. I find, therefore, that Dr Cornwall published the Report with intention to cause harm to the plaintiff. As is demonstrated in the earlier analysis of his reasons for the decision, Dr Cornwall intended to use the allegations for the purpose of singling out the Christies Beach Shelter and for the purpose of silencing any political criticism of his decision. He knew that there were legitimate reasons to withdraw funding but he was also aware of the political consequences of relying only on them. He knew that, if he relied only on the failure of the Christies Beach Shelter to sign the Financial Agreement, on its continued deficits, or on the allegations of financial mismanagement, there would be political difficulties in justifying his decision in that the Shelter was little different from some other shelters in these respects. The allegations, and in particular the unsubstantiated allegations, provided a means of silencing any political activity in response to his decision. It also singled out Christies Beach as being different from the other shelters. The Shelter's chief advocate was the plaintiff. In the main, the allegations concerned her. They were so extensive and so lacking in particularity that she could not respond to them. She was effectively silenced. Furthermore, he used the allegations notwithstanding that he did not know whether they were true or not. He was not even prepared to wait for the results of the police and CAC investigations that he himself had requested. At the risk of repetition, Dr Cornwall may have had legitimate grounds for withdrawing funding from the Christies Beach Shelter but he was not prepared publicly to rely on them. He and the Department believed that the decision would in all likelihood result in more political controversy with shelters and with the Christies Beach Shelter and the plaintiff in particular. He knew that it would be useful to be able to rely on other allegations which put the Shelter out in a class of its own. As an experienced politician, Dr Cornwall was no doubt accustomed to dealing with political controversy. I am quite satisfied that he knew the political advantages of these unsubstantiated allegations in dealing with the plaintiff. He also knew what the effect of the publication of the unsubstantiated allegations upon the plaintiff would be. It is clear from his conduct in May and June 1987, particularly his endorsement on the minute of 12 June, that he intended to target the plaintiff. I am satisfied that he acted in an improper way with an intention to cause her harm.

[1368]

"It is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The principle that when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered (Caledonian Collieries Ltd. v. Speirs; Benning v. Wong) has been applied mainly to private Acts. However, it has been frequently applied in Australia to public authorities, notably public utilities, exercising powers under public statutes: Sermon v. Commissioner of Railways; Essendon Corporation v. McSweeney; Metropolitan Gas Co. v. Melbourne Corporation; South Australian Railways Commissioner v. Barnes; Cox Bros. (Australia) Ltd. v. Commissioner of Waterworks; South Australian Railways Commissioner v. Riggs; Voli v. Inglewood Shire Council; Birch v. Central West Country District Council. While some early statements of the principle suggest that the power given by statute is conditioned upon it being exercised without negligence so that negligent exercise amounts to an excess of authority (McSweeney; Metropolitan Gas Co.), the better view has always been that the cause of action in negligence arises under the principle by virtue of a breach of a duty of care existing at common law: Geddis v. Proprietors of Bann Reservoir; London and Brighton Railway Co. v. Truman; Fullarton v. North Melbourne Electric Tramway and Lighting Co. Ltd; East Suffolk Rivers Catchment Board v. Kent; Riggs. And at least since the decision in Fisher v. Ruislip-Northwood Urban District Council and Middlesex County Council, it has been generally accepted that, unless the statute manifests a contrary intention, a public authority which enters upon an exercise of statutory power may place itself in a relationship to members of the public which imports a common law duty to take care." (Footnotes omitted).

[1400]

In the case of Senator Ryan, the plaintiff asserted the same particulars of negligence as were asserted against Dr Cornwall with the addition of one further particular of negligence, namely, that she concurred in the decision without making any appropriate enquiry as to whether the decision was appropriate. Again, it is not possible to spell out from the alleged particulars the content of the alleged duty of care. I find that Senator Ryan is not liable in negligence for reasons similar to those which apply in the case of Dr Cornwall. There are, however, further reasons why she is not liable. The two Ministers exercised different functions. The Commonwealth Minister had a role in allocating the funds to the different states and had an oversight of the administration of the SAAP Program in each state. The State Minister was responsible for the day to day administration of the Program in that State. Thus, for Senator Ryan the question whether funding should be withdrawn from the Christies Beach Shelter turned on two issues. The first was whether grounds existed for that decision. The second was to ensure that a women's shelter was provided in the southern suburbs of Adelaide. She was satisfied as to both and, as proper grounds existed for the decision to withdraw funding, she is not liable. Furthermore, Senator Ryan relied on the information provided by Dr Cornwall. As he was the Minister who had the responsibility of administering the SAAP Program in South Australia, she was entitled to do so. It would be contrary to good and efficient administration if the Commonwealth Minister had to check the State Minister's action. She knew that the Christies Beach Shelter had failed to sign the Financial Agreement but she did not know that it had signed the Undertaking. It seems that fact was known only to the Department and Dr Cornwall. Her only concern was that there were proper grounds and, as far as she knew, they existed. The publication of the reasons for the decision was an aspect of the administration of the program. The manner in which the decision was to be announced and implemented were matters which Senator Ryan was entitled to leave to Dr Cornwall. Expressed another way, she was under no duty of care in respect of the administration of the program beyond the question of deciding whether funding should be withdrawn. For these reasons, Senator Ryan is not guilty of negligence.

[1416]

The plaintiff's claim arises out of what she asserts to be a negligent misstatement. However, she does not claim to have relied on it. Instead, she asserts that the negligent misstatement has caused her loss because Dr Cornwall, if not also Senator Ryan, relied on it. The claim has the indicia of a claim for defamation. In Wade v State of Victoria [1999] 1 VR 121, Harper J held that an employer owed a duty of care in respect of a foreseeable loss to a former employee when providing a reference concerning that employee. He reached that conclusion holding that the law of defamation did not cover the field so as to exclude the claim in negligence. In doing so, he followed the decision of the House of Lords in Spring v Guardian Assurance Plc [1995] 2 AC 296. Harper J acknowledged that extending the law of negligence in that way could be seen as flying in the face of the well-settled principle of the law of defamation that nothing less than malice would defeat the qualified privilege which applied to a statement such as a reference. There is division of judicial opinion on the question whether the principles of negligence should intrude into the law of defamation. The negative view had been expressed by the Court of Appeal of New Zealand in Balfour v Attorney-General [1991] 1 NZLR 519 at 529 and by Levine J in Sattin v Nationwide News Pty Ltd (1996) 39 NSWLR 32 at 43. More recently, in Sullivan v Moody, the High Court noted the intersection of the claim in that case with the law of defamation and, notwithstanding the decision in Spring, disapproved the view that the law of negligence could extend in that way into the law of defamation. The issues in Sullivan v Moody were different from those in Spring and in Wade. As I read the reasons of the High Court in Sullivan v Moody, in particular, par 55, the remarks concerning Spring were obiter and the basis for the decision was the fact that the defendants had duties which were incompatible with the alleged duty of care. That is not the case here because a duty of care to the plaintiff is entirely compatible with the duty of care to Dr Cornwall.

[1437]

However, I am persuaded that to conclude that a duty of care exists in this case would cut across the well established principles of the law of defamation relating to qualified privilege. This is very much a borderline case. To adopt the remarks of Lord Woolf in Spring v Guardian Assurance Plc at 351 - 352, it is obviously in accord with public policy that reports of public inquiry should fully and frankly deal with the issues the subject of the inquiry. It is also in accord with public policy they should not be based on careless examination of facts or careless reporting of facts. Factors such as the freedom of speech and the need for those charged with the task of conducting a public inquiry to be able to report frankly and without a defensive frame of mind must be balanced against an individual's right at common law to earn a livelihood in his chosen occupation and not be deprived of it or of his reputation by a careless report. The Committee and Ms Anderson were so careless that it is unjust if the plaintiff is denied a remedy in negligence. It would be fair, just and reasonable for her to recover damages for that negligence. While these are compelling considerations, it is also necessary to consider the responsibilities of those charged with undertaking public inquiries and reporting on them. Sometimes difficult questions of judgment are involved. The person undertaking the inquiry should not be subjected to an action for negligence because, as a result of an exercise of judgment, a matter has fallen on one side of the line and not the other. Further, the qualified privilege which is applied to proceedings of this kind is so well established that it should not be eroded by a potential liability in negligence. If it is said that a liability should exist if the reporting is grossly negligent, that is to create a vague and indeterminate test which also gets close to proof of malice. For all of these reasons, I conclude, on balance, that the Review Committee did not owe the plaintiff a duty of care.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (1607 paragraphs)

Parties

Legislation Cited (26)

Cases Cited (69)

ROWAN v CORNWALL & ORS (NO.5) No. SCCIV-90-1481 [2002] SASC 160 (21 June 2002)