to. Prichard v Krantz

Supreme Court of SA|1996-01-29|Before: Doyle CJ

These proceedings arose out of two articles published by "The Advertiser". They were published on 15 July 1992 and 18 July 1992. I will refer to them as "the first article" and the "second article" respectively.

These articles were concerned with the proceedings of the Royal Commission that had been appointed to investigate the near collapse of the State Bank and its various associated companies. One of these companies was Beneficial Finance Corporation ("BFC"), a wholly owned subsidiary of the State Bank. On 14 July the Commission heard evidence from Mr D W Simmons, who had been Chairman of BFC and also Chairman of the Board of the State Bank. The first article related to that evidence. On 17 July the Royal Commissioner made public extracts from Mr Simmons' diaries that had been received in evidence by the Royal Commission. The second article related to this and other material.

The plaintiff was mentioned in both articles. He brought an action in defamation against the respondent.

The articles and the evidence 6. The first article began on the front page of the Advertiser, with a prominent headline, "Bannon accused on resignations". The article was as follows: The Premier, Mr Bannon, misled Parliament over the resignation of Beneficial Finance Corporation Chief Mr John Baker in August,2 1990, according to evidence before the State Bank Royal Commission.

Former bank chairman Mr David Simmons admitted yesterday the public reason given for the resignation of Mr Baker and his deputy, Mr Erich Reichert, was not right and Mr Bannon knew the real reason.

Mr Simmons said he told Mr Bannon on July 30, 1990, there was a "question" of either criminal or civil misconduct to be looked at in relation to four Beneficial executives, including Mr Baker and Mr Reichert. He said he told Mr Bannon about loans to Beneficial executives and Mr Bannon reacted angrily.

Mr Simmons confirmed he told Mr Bannon the question of criminal or civil misconduct was in reference in Mr Baker, Mr Reichert, Mr Garry Martin and Mr Manob Chakravarti. "I

had gone through the whole scenario and had told him (Bannon) all I knew at that stage," Mr Simmons told the commission.

Mr Bannon told Parliament on August 7, 1990, that Beneficial's managing director Mr Baker had retired after "differences of opinion" with the board over the "direction" of Beneficial. The Royal Commissioner, Mr Samuel Jacobs, QC, said yesterday the public explanation that there had been a difference of opinion over direction was not true.

Mr Jacobs: "The fact was, to put it in its blandest form, there had been a difference of opinion between the board and these officers as to their conduct." Mr Simmons: "Yes." Mr Jacobs: "The reason...announced publicly - I am going to put it quite bluntly - it really just wasn't true, was it? It really wasn't the reason at all, was it?" Mr Simmons: "Not really, but to give any other reason at that stage could have prejudiced any position that was being taken. The investigation wasn't completed at that stage and there was I believed, as I had said to the Premier, it may be criminal rather than civil." Mr Jacobs: "It would have been closer to the mark to have said something like there was a difference of opinion between these officers and the board as to what was appropriate conduct for officers of the company."

The article then continued on page 2, under the heading "Bannon Stands Accused": That would be pretty bland and somewhere near the truth wouldn't it?" Mr Simmons: "Yes." Mr Simmons said he was involved in the "events" that led to the resignation of Mr Baker and Mr Reichert, but it was another executive, Mr Michael Hamilton, who sought their resignation.

Mr Simmons was asked how Mr Bannon responded when told the conduct of those involved may be criminal rather than civil and what Beneficial had learnt they had been doing. "I think he was very angry, particularly with the reference to the Melbourne joint venture," Mr Simmons said. (No explanation of "the Melbourne joint venture" was given in the commission.)

Mr Simmons agreed the bank had been concerned that Beneficial may be sued for unfair dismissal.

The Advertiser reported last year that Mr Martin left Beneficial in September, 1991, after his job was axed.

Mr Chakravarti also left Beneficial late last year."

There is a sizeable amount of transcript which contains the testimony before the Commissioner on that day. The crucial passage concerning the plaintiff was on pages 13441 to 13444, where Mr Simmons was being questioned by his counsel. The evidence relates to a meeting on 30 July 1990 between Mr Simmons and the then Premier of South Australia, Mr Bannon. At this meeting Mr Simmons informed the Premier of matters relating to the affairs of BFC. The evidence went as follows: (p.13441) Q. Could I, on one more of these meetings, go back to the meeting of July, 30 July 1990. You have your typed file note of that meeting.

Q. There is a section in that, two sections in that file note, one is Beneficial.

Q. And the other is entitled 'Loans for Executives'.

Q. Which is a reference to loans to the Executives of (p.13442) Beneficial.

Q. You told the Premier the details of what is in this file note.

Q. I don't want to read out all that is in it on those two topics but did you make it clear to the Premier that with reference to Messrs Baker, Reichert, Martin and Chakravarti there was a question of either civil or criminal misconduct to be looked at.

COMSR Q. While we are on that, were you, yourself, involved in the events that led to the resignation of Mr Baker and Mr Reichert.

A. I was involved but I don't believe that I sought

I thought Mr Hamilton sought their resignation.

Q. You knew the terms in which that was publically (sic) announced. Do you remember the terms in which that was publically announced.

A. That there had been a difference of opinion with the Board on direction.

Q That was - putting it at its best - a half truth, wasn't it.

A At that stage the position wasn't exact and there was a possibility of proceedings, or may have been proceedings.

Q The fact was, to put it in its blandest form, there had been a difference of opinion between the Board and these officers as to their conduct.

Q. The reason it was announced publicly - I am going to put it quite bluntly; it really just wasn't true, was it.

Q. I'm not sure where it was announced, but the reason you just gave that there had been a difference of opinion as to the direction, that really wasn't the reason at all, was it.

A. Not really, but to give any other reason at that stage would have prejudiced any position that was being taken.

A. Well, the investigation wasn't completed at that stage and there was I believed, as I had said to the Premier, it may be criminal rather than civil.

Q. I mean, it would have been closer to the mark to have said something like there was a difference of opinion between these officers and the Board as to what was appropriate conduct for officers of the company. That would be pretty bland and somewhere near the truth, wouldn't it.

Q. But there was no hint, was there, of anything like that at all, in what was said.

Q. But the Premier knew from what you had told him.

A. Well, I had gone through the whole scenario and had told him all I knew at that stage. (p.13444)

Q. When you told the Premier that their conduct may be criminal rather than civil.

Q. And told him of your summary of what Beneficial had learnt they had been doing.

A. Well, as I said yesterday, I think he was very angry, particularly with reference to the Melbourne joint venture.

Q. I won't read it out, but it's item six on p.3 of the note dated 30 July that you are talking about.

Q. I think one of the concerns - just touching on the terms here which the Bank, or Beneficial announced their departure from the company - there was, of course, concern that, on the other hand, beneficial may be sued for unfair dismissal.

There was a dispute as to the accuracy of the transcript, but the trial judge's findings in relation to this were not challenged on this appeal. The dispute was as to whether Mr Simmons assented to the proposition put by counsel immediately before the Commissioner intervened (p 13442). The transcript first issued did not record any answer. A corrected page was later issued, recording the answer "Yes." The judge found that the corrected version was correct.

The second article also began on the front page of the Advertiser, and consisted of two parts under a larger headline, "Loans May Be Criminal: Bank Chief's Diaries". The first part included a "graphic" which was described as "An excerpt from Mr Simmons' diaries". The graphic was in fact of a page, on which the following words were printed: Preliminary audit reveals Baker, Reichert, Chakravarti and Martin have all loans which were not approved, and were not authorized and are in excess of agreed benefits ... May be

The first part of the article was printed in four columns. The graphic appeared at the head of the second and third columns, immediately below a photograph of Mr Simmons.

The text of the second article was as follows: "Sensational allegations of a conspiracy within the State Bank group and multimillion-dollar unauthorised loans involving senior executives have been revealed in diary notes kept by former bank chairman Mr David Simmons.

Mr Simmons says the circumstances surrounding the loans "may be criminal".

The loans include unapproved loans to four senior Beneficial Finance Corporation executives and a $37 million joint venture arrangement with a Melbourne developer.

Mr Simmons's diaries also refer to a "Beneficial conspiracy", how board presentations had been "pulled" and how internal audit reports were "screened".

Several hundred edited pages of diary notes kept by Mr Simmons were released yesterday by the State Bank Royal Commission." (section omitted) "In notes dated July 30,

1990, concerning a meeting with the Premier, Mr Simmons claims the group profit would be substantially down on the figure of $58 million to $60 million given earlier to Mr Bannon by the managing director, Mr Tim Marcus Clark. His notes reveal the likely profit as $33 million of which $30.6 million was a tax adjustment.

Mr Simmons records details of loans to executives: "Prior to last board meeting (then Beneficial chief John) Baker asked me to approve a loan of $2 million to several

executives including himself. "(I) said I was not prepared to and should go to the board. "Board said would approve of it provided that it had Audit sign off. The loan concerned me.

"In telling management of investigation of Beneficial, suggested we should see all loans. "Preliminary audit reveals (John) Baker, (Erich) Reichert, (Manob) Chakravarti and (Garry) Martin (all Beneficial Finance executives) have all loans which were not approved and were not authorised and are in excess of agreed benefits.

"The loan I looked at was a joint venture and it appears that this joint venture with a Melbourne developer is in default and the account is in default at a level of $37 million rather than within the approved board $30 million.

"May be criminal rather than civic (civil misconduct).

"There also appears to be loans from a company called Pegasis (sic) which is a joint venture company between Beneficial and Alastair McGregor."

Mr Simmons writes that the effect of these loans was that Mr Baker could not exercise proven control over his deputy Mr Reichert, who "arranged structured finance which has proved to be a disaster".

He said board presentations were pulled and not accurate, that internal audit reports were screened, that the Beneficial board did not get the true picture, and there was a conspiracy of silence.

Mr Simmons records that when a profit of $10 million was wanted, the accounts were adjusted. "Believe that Baker, Reichert, Martin and Chakravarti will have to go - question, when?" he says."

The most relevant part of Mr Simmons' diaries relied upon by the trial judge was the following passage: "Loans for Executives 1. Prior to last Board meeting Baker asked me to approve a loan of $2M. to several executives including himself. 2. Said was not prepared to and should go to the Board. 3. Board said would approve of it provided that it had Audit sign off for the loan concerned. 4. The loan concerned me.

In telling management on investigation of Beneficial suggested we should see all loans. 6. Preliminary audit reveals Baker, Reichert, Chakravarti and Martin have all loans which were not approved, and were not authorised and are in excess of agreed benefits. The loan I looked at was a joint venture and it appears that this joint venture with a Melbourne developer, Tribe and Crispaulie is in default and the account is in default at a level of $37M. rather than within the approved 30M. May be criminal rather than civic. (sic) 7. There also appears to be loans from a company called Pegasis which is a joint venture company between Beneficial and Alastair McGregor. 8. The effect of these loans are: a) Baker could not exercise proven control over Reichert who arranged structured finance which has proven to be a disaster. b) Board presentations were pulled and not accurate. c) Internal audit reports were screened. d) The Board of Beneficial did not get the true picture. e) Accountant was told want $10M. Profit and accounts were adjusted. f) Conspiracy of silence. g) Believe that Baker, Reichert, Martin and Chakravarti will have to go - question when. h) Clark, John Sulan, at my suggestion, are seeing Chakravarti - now feel he will be weakest."

Later, as the trial judge noted, there appears an entry which includes the topic, "Beneficial conspiracy".

FINDINGS BY THE TRIAL JUDGE 15. The trial judge found that the plaintiff was entitled to recover damages in relation to both articles.

The trial judge rejected the defence that each of the articles was a fair and accurate report of the proceedings before the Royal Commission and therefore privileged by section 7 of the Wrongs Act 1936 and at common law.

In relation to the first article, the trial judge found that discrepancies between the evidence and the article were such that the report lost the protection of the fair and accurate report defence. His Honour also briefly dealt with alternative matters argued by the plaintiff in relation to section 7, holding that the article passed the test of being on a matter of public concern and being published for the public benefit, and further that there was no obligation on the defendant to qualify disparaging evidence reported from the Commission by placing it in the context of other differing evidence. His Honour also rejected the plaintiff's contention that there had been a failure by "The Advertiser" to publish a reasonable letter in contradiction or explanation of the report, such a failure being an event that would have disentitled "The Advertiser" to the protection of section 7. The trial judge also rejected the contention of the plaintiff that the article was published maliciously.

His Honour also considered that the common law privilege available in respect of a report of a court or other proceedings would be lost if the report was not a fair and accurate one, and so held that, even if the defence was available to the defendant, it was defeated for the same reason as the statutory defence.

Finally, the trial judge considered the argument that the article was not defamatory. He referred to various discreditable inferences to be drawn from the article, and held that the article was defamatory of the plaintiff. He considered that the defendant's limited attempts to justify the statements were not made out.

In relation to the second article, the trial judge first considered the issue of fair and accurate report. He found that the effect of the headline, the graphic, and lines 36-44 of the article was to report that the loans in which the plaintiff was involved may amount to criminal or civil misconduct. He found that on this score Mr Simmons' note was ambiguous, and so the article had resolved the ambiguity adversely to the plaintiff. He said: "The difference between the two (the report and the diary text) is subtle, perhaps, but the subject was obviously important and the result was to make an imputation on the character of the plaintiff that may well not have been perceived by a reasonable person who read only the diary notes. In this respect the report ... was inaccurate and unfair."

The trial judge therefore rejected the statutory defence. He also rejected alternative contentions made by the plaintiff which were similar to those advanced with respect to the first article.

The trial judge also found that the article was defamatory. He said that various discreditable imputations were made by the article, and that the evidence and admissions in the case largely failed to justify or mitigate the libel.

His Honour then considered the matter of damages. He refused to make a finding of malicious publication, rejecting twelve matters which the plaintiff suggested went to show malice. However, His Honour also considered whether the defendant's conduct, both before trial and at trial, was a proper basis for an award of aggravated damages. He held that there was aggravation in pleas of justification made in "The Advertiser"'s defence, which pleas were not supportable in court and in relation to which no sufficient explanation was made as to their continued maintenance.

His Honour assessed damages at $250,000. The award included $175,000 for special damages (the plaintiff's economic loss) and general damages of $75,000. His Honour stated that the damages were assessed at $225,000 for the first article and $25,000 for the second. His Honour allowed $18,000 for interest.

ISSUES ON APPEAL 25. The defendant now appeals to this court in relation to the finding of liability, the assessment of damages, and the award of interest.

The defendant complains that the trial judge failed to determine which, if any, of the pleaded imputations were in fact conveyed by the articles. The defendant complains that His Honour, in effect, simply considered what imputations the articles conveyed, and so departed from the plaintiff's own pleadings.

The defendant also complains that the trial judge was wrong in his conclusion as to the meaning of the two articles.

As to both articles, the defendant argues that trial judge was mistaken in rejecting the defence of fair and accurate comment. In particular, it is said that the trial judge should have approached the issue by comparing the impression that a person would have had if present in the Royal Commission with that received by reading the article. It is said that the article would not have substantially altered the impression that a person would have received from being present at the Commission.

Next, it is said that the trial judge failed to hold that the articles conveyed the meanings contended for by the defendant, and that such meanings were true.

Then, it is said that the trial judge was wrong to award the plaintiff special damages, as the finding of economic loss was against the weight of evidence and made without regard to various pertinent factors.

Finally, it is said that the award of damages was in any case manifestly excessive.

At the appeal, leave was sought by the plaintiff to amend its Notice of Appeal to include two new paragraphs. These were the two grounds first mentioned above, namely that the trial judge failed to make findings as to which (if any) of the imputations pleaded by the respondent arose, and that the trial judge erred in failing to find that the imputations pleaded in respect of each article were not conveyed by those articles. After hearing argument on this point, this Court deferred the question of leave until after the appeal had been fully argued. The plaintiff was given leave to supply the Court with written submissions in response to the defendant's application, and the defendant was given leave to supply a written reply to those submissions. I would grant leave to the defendant to amend its Notice of Appeal as proposed. The amendments do no more than raise by way of appeal issues which were before the trial judge, were contested at trial, and were disposed of by the judgment.

The plaintiff also raised several issues at the appeal by a Notice of Cross-Appeal and a Notice of Alternative Contention.

In the former, the plaintiff complains that the assessment of the plaintiff's general damages at $75,000 is manifestly inadequate.

In the latter, the plaintiff raises four further arguments. These were, first, that the defendant lost the protection of the statutory defence due to the defendant's failure to publish a reasonable letter contradicting the report; secondly, that the statutory defence did not extend to reports relating to a Royal Commission; thirdly, that the trial judge should have found that the report was not fair and accurate on the basis of various other factors, as well; fourthly, that the trial judge should have found that the defence was defeated by malice in any case.

THE FIRST ARTICLE - THE PLEADINGS 36. The plaintiff pleaded that the first article, in its natural and ordinary meaning, meant that: "(a) The plaintiff was involved in criminal or civil misconduct, whilst an executive of Beneficial Finance, in respect of loans from Beneficial Finance to himself. (b) The plaintiff's conduct in receiving loans direct to himself as an executive of Beneficial Finance which loans were in excess of his entitlement was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust."

The defendant pleaded that if the first article was defamatory of the plaintiff, it meant no more than that the plaintiff was suspected of being involved in criminal or civil misconduct in respect of loans and that Mr Simmons told the Premier that he suspected the plaintiff and three others may have been guilty of criminal or civil misconduct.

The plaintiff, by his Reply, denied that this was the natural and ordinary meaning of the words used. If it was, he pleaded that the words used "carried the further imputation that the suspicion was well founded." I accept the defendant's submissions that this is to plead, in different words, an imputation of guilt, and so it is simply a repetition of the claim that the article imputed guilt.

The defendant denied by its Rejoinder this further plea by the plaintiff.

Having identified in his pleading the meaning upon which he relied, the plaintiff is, in my opinion, bound by that meaning. The point was considered by this Court in Prichard v Kranz (1984) 37 SASR 379. In that case, after considering a number of decisions, King CJ said (at 386): "These passages all support the view that a plaintiff is in some sense bound by the meanings which he attributes to the words in his Statement of Claim. It seems to me, moreover, that the passages cited above from Lewis v Daily Telegraph Ltd (1964) AC 234 as to the desirability of pleading the meanings attributed to the words and the cases in which particulars have been ordered, are posited on that view of the law. An allegation of the meanings to be attributed to the words used, whether in a Statement of Claim or by way of particulars supplied in compliance with an order, serves no good purpose, and may perhaps be a trap for a defendant, if those meanings can be ignored at trial and other meanings relied upon. The purpose of pleadings and of particulars is to define the issues at trial and to give the opposing party fair notice of the case against him.

A plaintiff would not, of course, be confined to a precise nuance and shade of meaning pleaded or particularised. Modern judges, in any class of case, have a considerable discretion as to the rigour with which they will confine a case presented by a party to the precise language of the pleadings. In many cases, moreover, the more serious allegation can be regarded as including the less serious. In that sense, the Court is free to attribute to the words a less injurious meaning than that attributed to them in the pleading. ... It seems to me, however, that it would be contrary to the purpose of pleadings and particulars if a plaintiff could obtain a judgment upon the basis of a meaning of the words used which was not merely a less serious form of the imputation pleaded, but amounted to an imputation of a substantially different kind."

I respectfully agree with these remarks. They are supported by authority: Lewis v Daily Telegraph Ltd (1964) AC 235 at 258-259, 265, 273, 282; Farquhar v Bottom (1980) 2 NSWLR 380 at 385. In my opinion, they are also supported by consideration of fairness and practicality relating to the trial process.

THE FIRST ARTICLE - DETERMINATION OF MEANING 42. Accordingly, it is necessary at the outset to consider whether the first article has the meaning which the plaintiff attributes to it. For these purposes I am concerned with, to express it briefly, an imputation of misconduct (the allegation in the Statement of Claim) and an imputation that the suspicion of misconduct was well founded (the allegation in the Reply, which allegation I deal with although raised only by Reply). Does the first article impute wrong-doing to the plaintiff, or that the reported suspicions are well founded, or does it do no more than report evidence in a manner which does no more than impute suspicion?

That question is to be answered by applying the standard of "ordinary men and women" who are neither unusually suspicious nor unusually naive: Lewis v Daily Telegraph (1964) AC 234 at 259 Lord Reid; at 286 Lord Devlin. The same approach has been taken in Australia, where the point of reference has been described as "the ordinary reasonable reader": Mirror Newspapers Ltd v Harrison [1982] HCA 50; (1982) 149 CLR 293 at 301 Mason J; at 304 Brennan J.

In applying this standard it is important to distinguish between the reader's understanding of what the writer of the article is saying or conveying, and further conclusions drawn by the reader based on his own experiences, beliefs and prejudices. In short, one must distinguish between what the writer has said and what the reader infers from that. This is how it was put by Mason J in Mirror Newspapers Ltd v Harrison (1982) 149 CLR 273 (at 301): "A distinction needs to be drawn between the reader's understanding of what the newspaper is saying and judgments or conclusions which he may reach as a result of his own beliefs and prejudices. It is one thing to say that a statement is capable of bearing an imputation defamatory of the plaintiff because the ordinary reasonable reader would understand it in that sense, drawing on his own knowledge and experience of human affairs in order to reach that result. It is quite another thing to say that a statement is capable of bearing such an imputation merely because it excites in some readers a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff. The defamatory quality of the published material is to be determined by the first, not by the second, proposition. Its importance for present purposes is that it focuses attention on what is conveyed by the published material in the mind of the ordinary reasonable reader."

The courts have not been slow to scrutinise the mind and personality of this ordinary reasonable reader. Dicta abound as to that reader's qualities. I think that what Hunt J said in Farquhar v Bottom (1980) 2 NSWLR 380 at 386 sums up adequately the reader's characteristics: "The ordinary reasonable reader does not, we are told, live in an ivory tower. He can, and does, read between the lines, in the light of his general knowledge and experience of worldly affairs. He is a layman, not a lawyer, and his capacity for implication is much greater than that of a lawyer. Especially in newspaper cases, he is understandably prone to engage in a certain amount of loose thinking. On the other hand, the reader of a book would read it with more care than he would a newspaper. But in both cases, there is also a very wide degree of latitude given to the capacity of the matter complained of to convey particular imputations where the words are imprecise, ambiguous, loose, fanciful or unusual."

The article in question was a report of evidence given to a Royal Commission. In substance it was and purported to be no more than a summation, with quotations, of evidence given by Mr Simmons.

But our law has taken the approach, for obvious and good reasons, that repetition of a libel uttered by another person is actionable. It would be too convenient an excuse to be able to preface a libel with the words "X said that ..."

It is therefore necessary to consider whether the report by "The Advertiser" of Mr Simmons' evidence conveyed the imputation which the plaintiff alleged. If it did, then it is necessary to consider whether, in so doing, the report was a fair and accurate report for the purposes of the Wrongs Act. If it was, then "The Advertiser" escapes liability. But it cannot escape liability simply by attributing the allegations to Mr Simmons.

One final point should be made, before I turn to the article. On a number of occasions courts have dealt with newspaper articles reporting on police investigations and the laying of criminal charges. The view has generally been taken that an article reporting such events does not, to the ordinary reader, impute guilt of the matter under investigation and the matter charged. It was in that context that Mason J made the remarks set out above, distinguishing between what the newspaper imputes by its report and conclusions which the reader might draw for himself or herself, after reading the article. Mason J went on to add (Mirror Newspapers Ltd v Harrison (1082) [1982] HCA 50; 149 CLR 293 at 301) that a report stating that a person has been charged with an offence: "... is capable of bearing the imputation that the police suspected him of having committed the offence and that they had reasonable cause for doing so."

Ordinarily, such a report carries no further imputation.

In the present appeal the defendant argued that it had done no more than report allegations of suspicion, and that its report did not impute anything beyond suspicion. Its report, like the report of an arrest or of a charge, imputed nothing about the actuality of the matters suspected.

THE FIRST ARTICLE - THE IMPUTATIONS PLEADED AND THE IMPUTATIONS MADE 52. In the present case the plaintiff alleges an imputation of guilt or, what seems to me to be the same thing, an imputation that suspicions were well founded. The defendant denies this, but admits an imputation of suspicion.

It seems that His Honour concluded that the first article imputed discreditable conduct to the plaintiff. The imputations which His Honour identified were these. First, conduct on the part of the plaintiff which had brought him into collision with the Board on the issue of appropriate conduct and that raised a matter of such gravity as to raise a question of criminal or civil misconduct. I add that the article identifies, as I read it, loans to executives including the plaintiff as the source of the concern. Secondly, that the plaintiff was involved in something discreditable linked to "the Melbourne joint venture". Thirdly, that the plaintiff had left BFC under a cloud because of questionable conduct, which conduct I think that the ordinary reader would understand to be the involvement in loans to executives.

His Honour, in deciding whether the article was defamatory, referred as well to other discreditable imputations which he had identified in considering whether the report was a fair and accurate report. It seems to me that the imputations already identified as having been found by His Honour, cover the ground of the criticisms made by His Honour of the accuracy of the report, with the possible exception of an imputation that the plaintiff had been dismissed from his employment (as distinct from having left his employment) because of his conduct which might be criminal or civil. I will refer to this as the fourth imputation.

The first question, in my opinion, is whether these imputations are meanings attributed to the article by the plaintiff? That is, are they meanings pleaded by the plaintiff?

In my opinion the first imputation is within the scope of the meaning pleaded by the plaintiff. Granted, His Honour included the reference to coming into collision with the Board. That was not pleaded. But in my opinion that imputation is within the scope of sub-paragraph (a) of the pleaded imputations. And, it has to be said, the imputation is of involvement in conduct in respect of loans raising a question of civil or criminal misconduct. This imputation is in that respect a lesser imputation than that which the plaintiff pleaded. It imputes conduct involving loans and a collision with the Board as fact, but imputes in addition not criminal or civil misconduct but a question or suspicion of such conduct. But, consistently with Prichard v Kranz (1984) 37 SASR 379, such an imputation may be treated as embraced by the plaintiff's pleading. I do not consider that to do so is unfair to the defendant. This is the meaning that the defendant itself pleaded.

In my opinion the second imputation is not one pleaded by the plaintiff. To the extent that it might be read as a reference to conduct involving loans, it is but a specific instance of the first imputation. To the extent that it involves something different, it is outside the plaintiff's pleading. I put it to one side as hereafter irrelevant.

In my opinion the third and fourth imputations found by His Honour, are imputations which fall within the plaintiff's pleading. In my opinion para 4(b) of the Statement of Claim embraces an imputation that the plaintiff left or was dismissed from his employment because of conduct relating to loans to executives which was questionable or which might be civil or criminal misconduct. This conclusion on my part may be a little generous to the plaintiff, but I reach it because in my opinion the reference to the plaintiff not being a fit and proper person to remain a BFC executive can be read as including a reference to him leaving his employment because of misconduct or being dismissed for misconduct.

It follows, therefore, that His Honour was entitled to find for the plaintiff in respect of these imputations, if conveyed by the article. To that question I now turn.

In considering this question I am not concerned with the fairness or accuracy of the report as a report of Mr Simmons' evidence, but with the meaning which it would convey to the ordinary reasonable reader.

In my opinion, the article does convey the first imputation. It conveys to the reader that the plaintiff had been involved in some way in loans to executives, and that this raised a "question" of criminal or civil misconduct. In my opinion the article does not state or imply criminal or civil misconduct in fact. The tone of the article is that there was a distinction between the fact of the loans and the conclusion to be reached about them. Indeed, the article quotes Mr Simmons as having said that the investigation (into the loans) was not complete. Granted, that is in the context of Mr Simmons saying that the conduct "may be criminal rather than civil", but I do not consider that that shift of language conveys guilt or a conclusion rather than suspicion or "a question".

In my opinion the article does convey the third imputation. Having left hanging (line 53) the question of civil or criminal misconduct, it then refers to the plaintiff as having "left Beneficial" (line 64) - a conjunction which does imply that he did so with the "question" unresolved. This is reinforced, in my opinion, by the reporting of the Commissioner's questions. These were reported in a manner which suggested (wrongly, although that is irrelevant for present purposes) that he referred to a difference of opinion with the Board and all of the executives named, a difference which led to a request for the resignation of two of the other executives involved. Of course, the careful and reflective reader will observe that the plaintiff's resignation was not sought by Mr Hamilton, and that it (or his leaving) came a year later than the other resignations, but in my opinion the ordinary reader would be left with the understanding that the plaintiff left with (and in an unstated way because of) the question of civil or criminal misconduct unresolved.

In my opinion the article does not convey the fourth imputation. I have considered with care the trial judge's reasoning on this point. It is correct that the plaintiff is linked with Mr Baker and Mr Reichert, and that their "resignations" are reported in terms implying dismissal. It is also true that they are not said to have been dismissed, and so the language used of them does not draw a clear distinction between them and the plaintiff. But it is plain from the article that Mr Baker and Mr Reichert were dealt with differently, and that the plaintiff and Mr Martin remained with Beneficial Finance Corporation after they had left, and for about a year. It is also clear that the Premier's statement to Parliament related to the resignations of Mr Baker and Mr Reichert alone. In my opinion the trial judge erred in finding that the article imputed that the plaintiff had been dismissed.

It follows that I agree with the trial judge's conclusion as to the first and third imputation. I respectfully disagree with his conclusion as to the second imputation.

THE FIRST ARTICLE - WAS IT A FAIR AND ACCURATE REPORT? 65. I have concluded that the first article conveyed two defamatory imputations which are embraced by or within the meaning attributed to the article by the plaintiff.

There is the first imputation, that the plaintiff, had engaged in conduct involving loans to executives which had brought him into conflict with the board on the issue of appropriate conduct and which raised a question or suspicion of criminal or civil misconduct, but no more than that.

And there is the third imputation, that the plaintiff had left his employment with Beneficial Finance Corporation under a cloud because of questionable conduct involving loans to executives.

In conveying that meaning, is the article a fair and accurate report of Mr Simmons' evidence? If it is, then by s7 of the Wrongs Act it is privileged unless it is proved to have been published maliciously, and subject to certain provisos.

I agree with the approach which His Honour identified as the approach to be taken in answering this question. As His Honour said, there can be no objection to a summary of evidence, as long as it is substantially accurate. Minor inaccuracies must be accepted, subject to the same proviso. Like His Honour, I accept the approach which Hunt J took in Waterhouse v Broadcasting Station 2GB Pty Ltd (1985) 1 NSWLR 58 at 63: "The issue will be whether the report of which the plaintiff complains substantially altered the impression which the reader would have received if he had been in court; if there is in the report a substantial misrepresentation of a

material fact prejudicial to the plaintiff's reputation, the matter complained of is not a fair protected report (citation omitted). A fair report is a substantially accurate summary of the proceedings, neither more nor less. The question is not whether it is fair or unfair to any particular person; the question is whether it substantially records what was said and done (citation omitted)."

I merely add that in my opinion one must assume that the person in court on the occasion in question heard all of the evidence accurately and remembered all of it.

In my opinion the article is a fair and accurate report to the extent that it reports that Mr Simmons said that the plaintiff had been involved in conduct involving loans to executives which conduct raised a question of civil or criminal misconduct. In my opinion that is the clear tenor of the evidence which Mr Simmons gave before the Royal Commissioner began to ask questions. In my opinion the answers which he gave to counsel, after the Royal Commissioner's questions, were to the same effect. I do not read these further answers as limited to Mr Baker and Mr Reichert, the two executives whose resignation was the subject of the Royal Commissioner's questions. I read the questions and answers as returning to the conduct of all four, albeit by way of further explanation to the Commissioner of the manner in which the resignations were handled. In that respect, I differ from the trial judge. He found that the reference to the Premier being "very angry", and to the "Melbourne joint venture", related only to Mr Baker and Mr Reichert, but that the article was written in a manner which linked the plaintiff to these matters. I agree with what he says about the article, but in my opinion in that respect the article does not alter the impression conveyed by Mr Simmons' evidence.

In my opinion Mr Simmons' evidence linked all four executives to conduct involving loans to executives, to a question of "civil or criminal misconduct" or conduct which might "be criminal rather than civil" (I do not think that any difference in meaning is conveyed by the different expressions), and to an investigation (not completed when Mr Simmons spoke to the Premier) into these matters.

But, in my opinion, the article was not accurate in reporting that Mr Simmons said that there had been a difference of opinion between the board and all four executives relating to appropriate conduct for them. The article was written in a manner which conveyed this impression of Mr Simmons' evidence. I agree with the trial judge that the questions on this topic related only to Mr Baker and Mr Reichert. And I am of the opinion that this was a significant point of distinction. It is one thing to have engaged in conduct which "raised a question" but was still under investigation, another thing to have had an actual difference of opinion with the Board over the question of appropriate conduct, even through the precise link between the two (conduct under investigation and difference of opinion) is not explained.

So, in my opinion, the article was not a fair and accurate report to the extent that it reported that Mr Simmons had given evidence of a difference of opinion between the plaintiff and the Board on the matter of appropriate conduct. In my opinion the article conveyed the impression that this difference in some way involved loans, and so was in that sense on the same topic as the "question of civil or criminal misconduct". But what the article reports is an actual difference of opinion, not just a question still under investigation.

It follows, to look ahead for a moment, that in my opinion this is a defamatory imputation, and that in this respect the article is not a fair and accurate report. But, when one considers the question of damages, one must take into account that the article fairly and accurately reports that conduct involving loans and under investigation had raised "a question of civil or criminal misconduct". Where the article errs is in reporting a collision with the Board on this matter.

In my opinion the article is not a fair and accurate report to the extent that it imputes that the plaintiff had left his employment with Beneficial Finance Corporation under a cloud because of questionable conduct involving loans. Mr Simmons gave no evidence at all touching the plaintiff's departure. In my opinion the article does link the plaintiff's departure to the questionable conduct.

This means that the plaintiff is entitled to damages in respect of the first article, but only in respect of the two imputations identified by me. I will come later to the question of damages. But, as I have already indicated, in my opinion the fair and accurate report that conduct of the plaintiff involving loans raised a question of civil or criminal misconduct must affect the amount of damages to which the plaintiff is entitled.

JUSTIFICATION 78. I do not understand the defendant to have contended that these two imputations should have been found by the judge to be justified. What it sought to justify was an imputation of suspicion based on reasonable cause, which imputation, on my approach, it had no need to justify.

AVAILABILITY OF WRONGS ACT DEFENCE 79. The plaintiff argued before the trial judge, and by a Notice of Alternative Contention on appeal, that the defendant's refusal to publish a letter written by the plaintiff in answer to the article, deprived the defendant of the protection of s7. Proviso (b) to the section provides as follows: "Provided that - ... (b) the protection intended to be afforded by this section shall not be available as a defence in any proceedings if it is proved that the defendant has been requested to publish

by the same newspaper ... a reasonable letter or statement by way of contradiction or explanation of such report or other publication and has refused or neglected to do so."

The plaintiff wrote to "The Advertiser" after reading the article. At the time he believed that Mr Simmons had not, in evidence, assented to the question (p 13442) about civil or criminal misconduct. The reporter in question believed that he had. Later, (and after the letter was written) by direction of the Commissioner, the answer "yes" was added to the transcript.

The plaintiff's letter, the judge found, was not a "reasonable letter" because it stated the plaintiff's belief that Mr Simmons neither intended to nor did make any allegation to the Premier or to the Royal Commissioner of criminal or civil misconduct extending to the plaintiff. The judge said: "For the defendant to have published the letter as it stood would have amounted in the circumstances to an admission of seriously inaccurate reporting and could well have invited protests, if not more, from its reporter and from Mr Simmons."

The judge regarded the balance of the letter as attracting an obligation to publish, but held as a matter of law, and rightly in my opinion, that the defendant's obligation related to the letter as a whole, and that it was not for the defendant to excise parts of the letter which parts did not attract the operation of proviso (b).

The case is, in this respect, an unusual one. It is one thing for the plaintiff in his letter to deny, as he did, any misconduct. But the plaintiff chose to assert what Mr Simmons intended and (wrongly) what he had said (or not said) in evidence. I do not think that the publication by "The Advertiser" of the plaintiff's letter would have amounted to an admission of "seriously inaccurate reporting", as the judge concluded. The letter would have been understood by the ordinary reasonable reader as containing the plaintiff's claims, not necessarily facts. But it might have invited contradiction by the reporter and by Mr Simmons, as the judge pointed out. And, in my opinion, on the question of what was said in evidence, I consider that the letter was not reasonable because it denied that Mr Simmons had given the evidence which he in fact gave. In my opinion "The Advertiser" was entitled to stand its ground on this point and to treat as not reasonable a letter which contradicted its belief as to Mr Simmons' testimony. In doing so it ran the risk of being proved wrong, and losing its defence under s7. But a letter which contradicted the fact of Mr Simmons' testimony (as things turned out) was not a reasonable letter. Had this letter made the point that the transcript did not record an answer to the relevant question, and raised a doubt about what Mr Simmons had said, in my opinion it would have been a reasonable letter for the purpose of section 7.

Accordingly, the judge was right to reject the plaintiff's argument on this point.

MALICE 85. The plaintiff pleaded that the defendant was actuated by malice. This required proof by the plaintiff. In this context "malice" embraces the desire to injure the person who is defamed, or the misuse of the occasion which gives rise to the privilege. In the latter sense one considers whether the defamatory statement was published for a purpose foreign to the privileged occasion, which here was the reporting of evidence given to a Royal Commissioner. One must consider whether there is evidence of an ulterior motive or purpose. To prove malice the plaintiff must prove that the desire to injure or the other ulterior motive are the dominant motive for the publication. These principles are established by the speech of Lord Diplock in Horrocks v Lowe (1975) AC 135 at 149.

The trial judge dealt at the one time with malice in relation to both articles. Although that involves me in considering now circumstances related to the second article, it is convenient to do so.

The trial judge made a finding of fact which, to my mind, is more or less fatal to the plaintiff's argument on motive. Referring to the journalists and others involved in the articles he said: "However, I have no reason to think that the two journalists and the editorial superiors did not believe that the articles were a fair and accurate report in each case or that they wrote and published them with an indifference to their fairness or accuracy or with any ulterior motive. I can add, lest there be any doubt about it, that I am satisfied that, when she wrote the first article, Ms Read (the reporter who was present when the evidence was given and whose name appeared at the head of the article) believed that Mr Simmons answered "yes" to Mr Abbott's question, as indeed she noted at the time."

Having so found, the judge went on to deal with the specific matters which the plaintiff alleged in support of his plea of motive. It is unnecessary to deal with all of them.

The plaintiff relied upon the fact that the defendant proceeded on the basis that there was no doubt that Mr Simmons had answered the relevant question, even though the reporter had used the uncorrected transcript which did not record an answer. It seems to me that the judge's finding answers this point. The defendant's confidence in the accuracy of its reporter's notes does not, in my opinion, indicate any ulterior motive.

The plaintiff relied upon the refusal or failure to publish letters (there were several) written to it by the plaintiff and by his solicitors. In my opinion, that in itself is unexceptional. I do not think that the failure to publish disclaimers or responses will often provide proof of motive because, as Lord Diplock pointed out, such an attitude is consistent with a belief in the truth and accuracy of what has been written: Horrocks v Lowe (1975) AC 135 at 154. In the present case, in my opinion, both articles appear to have been written with some care (despite inaccuracies) and they were not extravagant or sensationalist in their style. I find no intrinsic evidence of malice. While that is not decisive, in such a case I would be slow to infer malice from a failure to publish letters by way of response to the articles. To put it simply, one must be careful to distinguish standing one's ground from a desire to seize an opportunity to cause harm.

The plaintiff also relied upon a failure to publish the fact that a report by the Auditor-General had exonerated the plaintiff of wrongdoing. In addition, and linked to this matter, the plaintiff relied upon the manner in which the defendant conducted its case, particularly its persistence in pleading that the plaintiff had been involved in wrongdoing after the Auditor-General had exonerated the plaintiff, and its pursuit of the plaintiff in cross-examination on these matters. The judge found that certain of the defendant's pleas were insupportable, and made without proper enquiry. But he was not prepared to find that the defendant's conduct evidenced malice. He said: "I am not satisfied, however, that the defendant has been shown to have defended this action before trial in bad faith or improperly or unjustifiably, with the exception, as I have already found, of the matters described in paragraphs 10 to 12 of the particulars of malice. Nor do I consider that the conduct of the defence at the trial itself supports the plaintiff's aggravation argument."

It is difficult for this Court, on appeal, to recapture the atmosphere of the trial, or to comprehend the nuances of the evidently protracted pre-trial manoeuvrings of the parties. I remind myself that my concern is with the defendant's state of mind at the time of publication. Litigation often leads to hostility not previously present. There are signs here that the defendant conducted its defence of the action vigorously and quite aggressively. But the trial judge was aware of that and took it into account. Bearing this in mind, and the firm findings of the trial judge, who in this respect is best placed to judge, I am not prepared to conclude that he was wrong.

THE SECOND ARTICLE - THE PLEADINGS 93. The plaintiff pleaded the following imputations, said to arise on the natural and ordinary meaning of the words used. "(a) The plaintiff had engaged in criminal conduct in

(b) The plaintiff was a party to a conspiracy within the State Bank Group in connection with multi million dollar unauthorised loans;

(c) The plaintiff had received one or more loans which were not approved or authorised and which provided greater benefits to him than those to which he was entitled and that the plaintiff had been involved in criminal, or at least civil, misconduct in connection with obtaining those loans;

(d) The plaintiff had received a loan which had not been approved or authorised and which provided benefits in excess of his entitlement, in relation to a joint venture with a Melbourne developer, which loan was $37 million in default;

(e) The plaintiff had engaged in criminal or at least civil misconduct in connection with that loan;

(f) The plaintiff's conduct in relation to the stated loans was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust."

Once again the defendant pleaded a lesser imputation. Omitting the particulars pleaded, the defendant said that the words meant that: "(a) The plaintiff was suspected of having engaged in

criminal conduct in connection with a loan or loans made to him; ...

(b) A preliminary audit had revealed that the plaintiff had received one or more loans which were not approved or authorised by the board of directors of BFC, provided greater benefits to him than those to which he was entitled and that the plaintiff was suspected of having been involved in criminal or at least civil misconduct in connection with obtaining these loans; ...

(c) It was Simmons' opinion that the plaintiff's conduct in being involved with loans to BFC executives meant that the plaintiff should no longer remain in the employment of BFC."

As to these imputations, the defendant pleaded truth.

And, once again, the plaintiff pleaded that if this was the meaning of the words used, the meaning carried the further imputation that the relevant suspicion was well founded.

THE SECOND ARTICLE - THE IMPUTATIONS PLEADED AND THE IMPUTATIONS MADE 97. The judge found that the graphic (see above), resolved adversely to the plaintiff the ambiguous reference in item 6 of Mr Simmons' note to something which might be "criminal rather than civil". It was unclear, he said, whether this comment in Mr Simmons' note referred to the loans referred to in the first sentence or to the joint venture loan. The graphic was presented in a manner which resolved the doubt, he said. This conclusion was assisted by the headline and by the manner in which the article (see line 44 in particular) broke paragraph 6 into three separate paragraphs. He referred to the difference between Mr Simmons' note and the text of the article as "subtle", but in the end significant.

In my opinion the first of the pleaded imputations does not arise. I do not consider that the article imputes criminal conduct, even by its reference to a conspiracy. In my opinion it does no more, read as a whole, than report evidence about conduct which Mr Simmons considered "may be criminal". The distinction between "may be" and "is" is significant. In my opinion the article observes it. In my opinion it does not state or imply that any suspicions were well founded. However, in my opinion the article does impute a suspicion of criminal conduct in connection with loans, and this lesser imputation is within the scope of the plaintiff's pleading.

In my opinion the second of the pleaded imputations is conveyed by the opening paragraph of the article (lines 6-12). The ordinary person would understand the plaintiff to be one of those involved in the conspiracy.

In my opinion the third of the pleaded imputations is conveyed by the article. It reports the obtaining of unapproved and unauthorised loans, and that that conduct raised the suspicion of criminal rather than civil misconduct. The article does suggest that the misconduct is at least civil misconduct, the question being whether it is criminal.

In my opinion the fourth of the pleaded imputations is conveyed by the third paragraph (lines 12-14) of the article. The loose language implies that four executives were involved in the joint venture.

In my opinion the fifth of the pleaded imputations is also made out. The second and third paragraph of the article are clearly linked. They state, in effect, that the plaintiff was involved in the $37 million joint venture. The graphic and line 44 of the article all combine to suggest that what is being said is that the loan referred to does involve civil misconduct, and conduct which might be criminal. This is to be contrasted with the first of the pleaded imputations, which alleges an imputation of criminal conduct as a fact.

In my opinion the sixth of the pleaded imputations is made out, in the sense that lines 57-59 of the article, in the light of what came before, impute that Mr Simmons had expressed the view in his notes that the plaintiff's conduct in relation to loans was such that he was not fit to remain an employee of BFC.

Each of these imputations is defamatory of the plaintiff.

THE SECOND ARTICLE - WAS IT A FAIR AND ACCURATE REPORT? 105. In my opinion the article was a fair and accurate report in relation to the first imputation which I have found. I respectfully disagree with the trial judge. I consider that there is no ambiguity in Mr Simmons' notes. They do state, in my opinion, that the loans involving the plaintiff "may be criminal rather than civic." I consider that part 6 of the note, taken as a whole, is dealing with a single topic, loans, of which one example is given, and that the comment relates to all of the loans.

In my opinion, in relation to the second imputation the article is not a fair and accurate report. The "conspiracy of silence", to which Mr Simmons referred, was obviously related to the handling of loans. But I consider that the first paragraph of the article suggests a more active form of conspiracy, and one which has more serious overtones than a "conspiracy of silence" - which in common speech often means little more than a failure to disclose.

I consider that in relation to the third imputation the article is a fair and accurate report. I consider that Mr Simmons' notes are capable of meaning that the unauthorised loans involving the four executives "may be criminal rather than civil", in the sense of at least civil misconduct and possibly criminal misconduct. To the extent that his notes are ambiguous (and I do not think that they are) I consider that the article does not become unfair or inaccurate in resolving that ambiguity. We know from the notes that the loans were regarded as unapproved and unauthorised. We know from the notes that Mr Simmons thought the loans revealed a "conspiracy of silence", and that the four executives "will have to go". In this context I consider that the impression conveyed by the article, of civil misconduct and possibly criminal misconduct, is substantially the impression that the listener in court would have got.

As to the fourth and fifth imputations, (which are linked) my conclusion is that the article is not a fair and accurate report. Mr Simmons' notes indicate clearly, in my opinion, that the loan he "looked at" was but an instance of the loans which caused concern, and left open the question of which of the executives was involved in it. It did not imply that all four were. In my opinion the first three paragraphs of the article imply that the joint venture arrangement did involve all four executives. In that respect it is inaccurate.

But, in my opinion, the defamatory imputation is largely overshadowed by the third imputation, because the fourth and fifth imputations involve no more than a specific instance of the third (protected) imputation - involvement in loans that may be criminal rather than civil. This is a factor which must be considered in relation to damages.

It follows that in imputing misconduct in relation to that loan the article is not a fair and accurate report. The defence under s7 of the Wrongs Act is not available.

The article is, I conclude, a fair and accurate report in relation to the sixth imputation. Mr Simmons' notes clearly mean that the plaintiff's conduct in relation to loans was such that, in Mr Simmons' opinion, the plaintiff could not remain employed by Beneficial Finance Corporation.

It follows that the plaintiff succeeds subject to justification, in my opinion, in relation to the second, fourth and fifth imputations.

I regard the second imputation as serious. It goes, in the ordinary person's mind, well beyond merely unauthorised behaviour. I regard the fourth and fifth imputations as less serious, because the plaintiff has already been identified as involved in loans which gave rise to the possibility of civil or criminal misconduct.

It follows that I differ from the trial judge in relation to the second article. I have found that there were defamatory imputations which were not protected by the defence of fair and accurate report, being imputations which the judge found were protected. And I have not put the emphasis upon the graphic which the judge did. But in the end I agree that the plaintiff was entitled to succeed.

THE SECOND ARTICLE - OTHER MATTERS 115. I agree with the judge's reasons for concluding that the failure to publish a letter from the plaintiff relating to the article did not deprive the defendant of protection under s7.

The judge found that the defendant had failed in its attempt to justify these imputations. That finding was not attacked in appeal.

DAMAGES 118. It is appropriate that I should summarise my conclusions.

As to the first article, the plaintiff is entitled to damages in respect of two imputations. First, that conduct of the plaintiff relating to loans had brought him into conflict with the board on the issue of appropriate conduct and the plaintiff's conduct raised a question of criminal or civil misconduct. Secondly, an imputation that the plaintiff left his employment with BFC because of conduct relating to loans which conduct raised unresolved questions of civil or criminal misconduct. But the article fairly and accurately reported that conduct of the plaintiff involving loans had raised a question of civil or criminal misconduct.

There is not a great deal of difference between my findings and those of the trial judge. He found for the plaintiff also on an imputation relating to "the Melbourne joint venture", whereas I have not.

As to the second article, the plaintiff is entitled to succeed in relation to the reporting of a conspiracy in connection with unauthorised loans. But the reporting of unauthorised loans involving a question of civil or criminal misconduct is not actionable. The plaintiff is also entitled to succeed in relation to the imputation that he was involved in the joint venture loan, but this adds little to the issue of involvement otherwise in unauthorised loans.

The judge found, on the basis of slender evidence, that the plaintiff was dismissed from employment with Leal Boss as a result of the publication of the first article. There was no evidence from the plaintiff as to the reasons given for his dismissal, as to the way in which it was effected, or as to any attempt by him to obtain reasons. The judge thought it unrealistic to criticise the plaintiff for not calling someone from Leal Boss to say why he was dismissed. That I accept, but I find it difficult to understand the silence from the plaintiff himself about the circumstances of the dismissal.

The difficulty which I have with the assessment of damages arises from the fact that, as I have found, the article was not actionable to the extent that it reports that the plaintiff had been involved in conduct relating to loans which raised a question of civil or criminal misconduct. The imputations on which the plaintiff is entitled to succeed are more definite - a conflict with the board (not just a question) and leaving employment under a cloud - but knowing nothing about the circumstances of the dismissal from Leal Boss, I do not consider that one can conclude on the balance of probabilities that the defamatory imputations were the cause of the dismissal. I would not favour a pedantic approach on this issue, nor would I call for strict proof on such a difficult issue. But I cannot accept the soundness of a finding for the plaintiff in the light of what the defendant reported in the first article without incurring liability, and knowing nothing at all about the reasons for the dismissal.

In my opinion the plaintiff's evidence does not provide a basis for an award of economic loss in respect of his employment with Leal Boss. On the scant evidence given it is moreover, impossible to say what effect the defamatory imputations have had on the plaintiff's employment prospects since his employment with Leal Boss came to an end.

In the end, the issue is one of causation. Did the plaintiff prove that the defamatory imputations caused the loss of his employment and subsequently damaged his prospects of re-employment? This is not the same issue as that with which I deal next, namely, the effect on damages of other defamatory but privileged or protected statements.

It is on this issue of causation that I am unable to agree with the trial judge.

I turn now to the question of damages for injury to reputation.

As to the first article, it might be said that the defamatory imputation did not add a great deal to those parts of the article which were able to be published with impunity. But damage was done to the plaintiff because the article implied more than conduct causing suspicion. It is not clear what effect there may be on damages when a lesser imputation is either justified or privileged, and a greater one is found to have been proved.

The basic rule at common law in relation to damages is that damages may be reduced by reference to the poor character which a person possessed before publication. This stems from the fact that the tort relates to a loss of reputation, and it is material to determine the plaintiff's previous character to help measure that loss (see Duncan and Nield on Defamation, 2nd ed, at (18.17)).

It is also open to a defendant, even if it cannot completely justify an allegation (for example, that a plaintiff has six convictions for dishonesty), to partially justify that allegation (by proving two such convictions) and be liable for damages only for the remainder: see Speidel v Plato Films (1961) AC 1090 at 1141-2 Lord Denning.

This rule might seem to apply by analogy to the present case. That is, although some imputations were privileged, others were not. Therefore the defendant was liable to pay damages only in respect of those latter imputations. However, given that there was some discredit attached to the privileged imputations, and that the actionable imputations did not go greatly beyond this, it may be argued that the damages to be awarded for the actionable imputations should be reduced. This reduction would reflect the amount of damage caused to the plaintiff's reputation by the imputations which were privileged.

However, a court must be careful in taking this sort of approach. The mitigation principle has been kept within tight bounds. It is obviously open to abuse if it is used merely to pillory the plaintiff with various discreditable rumours, or to permit a defendant to escape substantial liability merely because someone else had initiated the damaging story which the defendant then printed (see, for example, Dingle v Associated Newspapers Ltd (1964) AC 371 at 396 Lord Radcliffe). Therefore, there have always been strict rules as to what evidence may be led to establish a previously tarnished reputation, and as to the range of situations in which mitigation is allowed and by reference to which factors.

In Dingle v Associated Newspapers Ltd (1964) AC 371, the defendant published an article which defamed the plaintiff, a town clerk, by alleging that he had acted in an underhand way in seeking for the town corporation to acquire certain shares at a certain price. It was considered that the defendant was liable in damages to the plaintiff for this article, and the question arose as to damages.

It appears that the matter of the share acquisition was first raised in a select committee of Parliament which was considering the Bill which would, among other things, effect the acquisition of the shares. The committee published a report which was critical of the plaintiff, stating among other things that the corporation had offered less than the shares were worth and that the corporation had presented a one-sided view which failed to disclose the true position of the company to be acquired.

The defendant was the publisher of the Daily Mail, which over the next six months referred to the matter more then twenty times. However, only the one article was both objected to and found to be defamatory. This article was said to have imputed sharp practice to the plaintiff.

The trial judge, in assessing damages, took into account a mitigating factor, namely the plaintiff's previously tarnished reputation. This tarnishing arose from what had been said about him in the report (which was covered by absolute privilege), and from previous non-actionable articles published on the same topic by the defendant and also by other newspapers. The House of Lords rejected this reasoning. While accepting that the defendant was only liable in respect of those parts of its article which were not privileged or which had not been justified (at 394 Lord Radcliffe), it was said that the trial judge had erred in reducing damages by reference to the damage caused to reputation by the previous articles. In the leading speech, it was said (at 396 Lord Radcliffe): "In my opinion, it would be directly contrary to principle to allow (evidence of other statements about the same subject matter). A libel action is fundamentally an action to vindicate a man's reputation on some point as to which he has been falsely defamed, and the damages awarded have to be regarded as the demonstrative mark of that vindication. If they could be whittled away by a defendant calling attention

to the fact that other people had already been saying the same thing as he had said, and pleading that for this reason

alone the plaintiff had less reputation to lose, the libelled man would never get his full vindication. It is, I think, a well understood rule of law that a defendant who has not justified his defamatory statements cannot mitigate the damages for which he is liable by producing evidence of other publications to the same effect as his; and it seems to me that it would involve an impossible conflict between this rule and the suggested proof of tarnished reputation to admit into consideration other contemporary publications about the same incident. A defamed man would only qualify for his full damages if he managed to sue the first defamer who set the ball rolling: and that, I think, is not and ought not to be the law." See also Lord Denning at 411-412 and Lord Morris of Borth-y-Gest at 415-418.

In my opinion, this reasoning is also applicable to the present case. Of course the defendant is only liable for that part of the article which is not privileged. Therefore one must subtract from the defamatory effect of the article that effect which derives from the non-actionable parts, in accordance with Lord Radcliffe's approach. However, one may not reduce the award of damages which would go to vindicate the plaintiff in relation to a false imputation, merely because other statements have been made (either in the same article or in other previous articles) which are almost as discreditable but which are justified or privileged.

In the present case, for instance, the fact that suspicion had been cast upon Mr Chakravarti, far from reducing the damage likely to be done to him by further imputations, was a fact that made him more vulnerable to damage by inaccurate reporting. The fact that someone is in the parlous situation in which Mr Chakravarti found himself is not a fact which calls for a less careful handling of reputation.

However, the second article involves a slightly different situation. I have noted above that the fourth and fifth imputations are to some extent overshadowed by the third imputation (that the unauthorised loans may involve civil or criminal misconduct), which imputation was privileged, as the imputations complained of are to some extent only specific instances of the wider, protected imputation. However, there is a sense in which they produce a greater defamatory effect than would be produced without them, one which goes beyond the sting of conduct that "may" be criminal or civil misconduct.

In my view, this second article, which came after the dismissal, was if anything the more serious libel. The imputation of a conspiracy involving unauthorised loans was a serious one, but of course by now the plaintiff had lost his job.

At a glance

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Before

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Judgment (259 paragraphs)

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Cases Cited (8)

MANONBENDRO CHAKRAVARTI v. ADVERTISER NEWSPAPERS LTD (appellant) No. SCGRG 92/1688 Judgment No. 5431 Number of pages - 37 Defamation (1996) 65 SASR 527 [1996] SASC 5431 (29 January 1996)