Trenham v Platinum Traders Pty Ltd & Anor [2012] QDC 347

Re: Copas First National Real Estate Toowoomba (Copas).

I have recently been approached by a client for advice in respect to the above agency. The information provided by my client is of a very serious nature involving suspicions of Trust account fraud by the Copas principal, Mr Douglas Trenham.

My client suspects that during 2008 and 2009 calendar years, and possibly before and after, that funds were regularly being drawn from the agencies trust account for the payment of general operating expenses and personal debts of the principal. The funds drawn against were typically deposits being held on real estate sales pending. The funds would then be redeposited in time for settlement.

My client is concerned that, if their suspicions are correct, that the practice may be getting out of hand and that eventually these actions may result in clients loosing their funds. Apparently it is commonly believed within the agency that this is going on however both current and previous staff are concerned about the ramifications of speaking up.

We wish to provide this information confidentially in the hope of avoiding reprisals.

I am happy to discuss this matter with you directly. I may be contacted on 0435 771 303.

[5] Mr Trenham says the words used in the letter meant:-

(a) That he had for a long period dishonestly misappropriated trust funds;

(c) That he was vengeful and exacting to employees who spoke of unlawful conduct;

(d) That the business in which he was the principal was an untrustworthy business;

(f) That he was a poor principal of the business and a poor employer.

(a) Whether the company authorised Mr Loane to publish the letters to Mr Trenham's office, the REIQ and the OFT;

(b) Whether the words used in the letter in their ordinary and natural meaning were capable of conveying the meanings alleged by Mr Trenham and whether an ordinary reasonable reader of the words in the context of the letter as a whole would have understood them as defamatory of Mr Trenham;

(c) Whether the defendants had lawful excuse for the publication on the ground of qualified privilege at common law and/or s 30 of the Defamation Act 2005.

[7] When Mr Trenham gave evidence he said he got a phone call from one of his staff who said she had a strange fax and she thought she better call him. Mr Trenham asked her to forward the fax to where he was staying and he picked it up from the reception area. When he read the document he was absolutely devastated. His wife was also distraught. When he discovered the document had been sent to the REIQ he was angry. He could not believe it. It was something that had never happened before. When he learned the document had been sent to the Office of Fair Trading he started to panic a little and again he just could not believe that anyone would do that. Regarding how he felt about what was written in the letter, he said it was just all lies. Absolute lies. He said a member of the public spoke to him about it. Some friends of his wife also knew about it. It affected him emotionally. It affected his relationship with his wife. His wife also suffered emotionally. He was affected at work as he could not follow procedures and did not have the contact with the staff that he normally would have. He said his staff were horrified at the allegations. He said there was a lot of talk behind the scenes although they could not believe what was being thrown at him. He instructed his lawyers, Bernays Lawyers to send letters to the company and Mr Loane.

[8] There is no dispute that Mr Loane received Mr Trenham's lawyers' letter dated 16 June 2010 seeking an apology and retraction and after receipt of that letter Mr Loane faxed the letter to the Office of Fair Trading.

[9] When cross-examined Mr Trenham agreed that in or around June 2010 he was having difficulties with a former employee by the name of Paul Schmidt-Lee. He also said he had been involved in 2009 with a protracted partnership dissolution with a Brian Baker. Mr Trenham would not agree with the suggestion that there was a lot going on in his life at the time Mr Loane's letter was received and that would not have been the only pressure or influence on his wife's depression and all the stress he was under anyway.

[10] Mr Trenham agreed under cross-examination that he had never met Mr Loane before or had any dealings with him directly or otherwise.

[11] It is not in dispute there was an investigation of Mr Trenham's office by the Office of Fair Trading. However, according to Mr Trenham, what was found were just three minor details which the Office of Fair Trading did not think was relevant at the time. He said they took no action against him. He denied the suggestion that he had taken money from his trust account on three occasions prior to being entitled to take it. Mr Trenham did suggest that a former employee, Donna Murray, who was responsible for the drawing of the cheques and doing an EFT to the general account, was setting Mr Trenham up. When challenged by Mr Loane about Mr Trenham's contention that Donna Murray was setting him up, Mr Trenham referred to Paul Schmidt-Lee. Mr Loane asked Mr Trenham what was Paul Schmidt-Lee's connection to Donna Murray and Mr Trenham said he was a salesman in his office and he had hacked into Mr Trenham's computer.

[12] Again it is not in dispute that Paul Schmidt-Lee was convicted of computer hacking Mr Trenham's computer and was sentenced to a 12 month wholly suspended term of imprisonment.

[13] During the cross-examination Mr Loane said that he needed to make an admission. The admission was he had a criminal record and was incarcerated for 15 months for fraud. Mr Loane said in this matter he has been telling the truth and will continue to do so.

[14] Mr Loane suggested to Mr Trenham that he engaged a Mr Doneley to try and avoid the OFT doing an audit. Mr Trenham denied this suggestion. Mr Trenham also said he was a just and reputable employer. Also he was respectful of employee's rights and obligations. Mr Loane though referred Mr Trenham to two staff not having been paid their superannuation entitlements. Mr Trenham said they had been paid since. Regarding why these employees had not been paid Mr Trenham said that Mr Loane would have to ask his finance girl. However, Mr Trenham did agree there were three instances where money was paid from the trust account to the general account prior to settlement. However, he said that the OFT actually found that there was a staff member who did not comply with office protocol. Mr Trenham denied ever taking trust money to pay off personal debts.

[15] Mr Doneley also gave evidence for Mr Trenham. He said Mr Trenham is married to his cousin. He has known Mr Trenham for probably about 10 years. He said that in the Toowoomba area Mr Trenham is highly regarded and is regarded as an honest person. He is also regarded as very scrupulous and honest. Mr Doneley also said the letter had a significant impact on Mr Trenham. He said Mr Trenham probably has internalised even more on matters but it has also affected his capacity to work. Mr Trenham has also become more forgetful and is incredibly stressed from this matter in particular. Mr Doneley said Mr Trenham is more lethargic and is tired when he isn't to be. He said they have often spoken about the letter and its contents and it does concern Mr Trenham to this very day.

[16] Mr Trenham also called Mr Milton. He is employed by the Real Estate Institute of Queensland. He has known Mr Trenham since 1995 when Mr Trenham ran a First National real estate office on Wickham Terrace. He described Mr Trenham as a straight shooter. He said in his dealings with Mr Trenham, Mr Trenham has been an honest man. He said Mr Trenham has quite a good reputation.

[17] Mr Jenman was also called by Mr Trenham. He is a writer and a consumer advocate. He has worked in the real estate industry since 1972. He first met Mr Trenham about 10 or 12 years ago. He met Mr Trenham as a client. Mr Trenham was using his services. Mr Jenman consults to a lot of real estate agents and he was one of the people to whom he consulted. The consultancy was to assist Mr Trenham in his business in management. He also consulted Mr Trenham on ethical issues. He said Mr Trenham is very highly regarded and also in Toowoomba his reputation was also quite highly regarded. He said Mr Trenham is regarded as an honest person and very highly regarded.

[18] When cross-examined Mr Jenman agreed that agents do not necessarily follow Mr Jenman's systems and that he could not always ensure that someone subscribed to his system.

[19] Mrs Loane gave evidence for the defendants. Regarding PT Accounting Services, she said there was very little to tell about it. She said it was primarily set up for their daughter as she wanted to go into bookkeeping and Mr and Mrs Loane set that up for her but she changed her mind and it never went ahead, it never traded or had any clients, it never went ahead. Her daughter was 19 years of age. She did not do the bookkeeping course. Mrs Loane said she did not authorise Mr Loane to send the letter nor to prepare the letter of 14 June 2010. She said while her husband was incarcerated between 10 December 2008 and 10 March 2010, Mr Loane had no input into the running of the business. A little later she agreed with Mr Loane that between January 2008 and March 2010 he did not have any input into the business, Platinum Traders Pty Ltd. Mrs Loane said the sending of the letter to Mr Trenham's business was a mistake by Mr Loane. Further she did not authorise Mr Loane to produce and broadcast the letter of 14 June to the Office of Fair Trading and other parties. She was also asked if Mr Loane had any responsibility within PT Accounting Services to work as an accountant or anything remotely related to accounting work. She said "No, no. Definitely not".

[20] During Mrs Loane's cross-examination she said that Paul Schmidt-Lee was Mr Loane's brother. She also said that in relation to the client referred to in the letter, the client was Mr Loane's brother, Paul Schmidt-Lee. Further, she was referred to an affidavit sworn by her in these proceedings. At paragraph 2 of the affidavit it states "as at 14 June 2010 Mr Darryl Loane was employed by PT as an accountant". She agreed that was incorrect but did not know why.

[21] When Mr Loane gave evidence, he said in respect to this matter and his involvement, he had a phone call from his brother, Paul Schmidt-Lee, in the first week of June. Paul asked him to ring the Office of Fair Trading and to report some matters, which are later reflected in his letter of 14 June, Exhibit 2. The matters were obviously quite serious allegations of his suspicion of misuse of the Copas Newman trust account. He said it had been going on, on an ongoing basis for some time, that it was common knowledge within the agency, and he wanted to report it to the OFT. Over the phone Mr Loane told him he wouldn't consider lodging a complaint for him with the OFT over the phone, and he wouldn't do it in any circumstance without some evidence to show that there was in fact a basis to the suspicions. That weekend they arranged to meet up, that's Paul and himself, which they did, and at that meeting Mr Loane asked Mr Schmidt-Lee for further information about the matters that he was alleging. He told Mr Loane that he had had a falling out with Mr Trenham and there was ongoing problems there, and reiterated his claims that there was misuse of the trust account. Mr Loane said the first thing he did was to advise him that now over the years in business he had seen plenty of agents go at each other and he said to Paul, essentially, "look, it's a storm in a teacup, give it time, it'll go away, just don't do anything, let it die". Mr Loane said Mr Schmidt-Lee then produced to him a document called a sales deposit report which was a print out of transactions on Mr Trenham's trust account. He said it had sales deposits cheque details. He said Mr Schmidt-Lee showed him that report and pointed out a number of transactions that clearly showed that money had been taken out of the trust account prior to settlement dates of properties. Mr Loane said he satisfied himself that at least in those occasions there was evidence that the wrong thing had been done. He said Mr Schmidt-Lee further went on to explain to him that there were other people in the office that were aware of the practice. He specifically mentioned Mr Trenham's previous partner, Brian Baker. He specifically spoke about Rebecca Lipscombe. Mr Loane said that Mr Schmidt-Lee said in respect of Rebecca Lipscombe, she had been responsible for withdrawing some of the funds on Mr Trenham's direct instructions. He said that the financial controller, Donna Murray, was also aware of what was going on and was quite concerned about it. He went on to say that Mr Trenham had introduced a new person into the company by Mr Doneley and said that that also concerned him due to the fact that Mr Doneley had been in jail for fraud.

[22] Later in Mr Loane's evidence he did produce two copies of newspaper articles that did confirm that Mr Doneley had been fined for failing to lodge tax returns and sentenced to jail for fraud. These articles became Exhibit 16.

[23] Mr Loane went on to say in his evidence, based on the fact that you have got a trust account that he could clearly see had been misused with a person in a management position, that record, the comments from his brother, which he had no reason to believe in respect to other people that knew, he felt it was important to report the matter to the OFT as Mr Schmidt-Lee had requested, however, he said to him given the serious nature of the accusations, that it should be in writing, and Mr Loane agreed to send the letter in because he was quite concerned that he believed that there was enough evidence there to warrant the matter being looked at out of the public interest. He said he was also aware of agents on the Gold Coast acting improperly and people losing large sums of money. He also said he had met people in jail who were real estate agents who had started off doing small offences and grew to fairly substantial amounts of money. He said that most of those people that ended up in jail over those more serious issues had started small and ended up taking hundreds of thousands of dollars in some cases that didn't belong to them which caused consumers substantial damage.

[24] When cross-examined Mr Loane denied that he ran the company. He said the business of the company had been sold in April 2010. That business was Platinum Traders Trade Exchange. It was a barter card type business according to Mrs Loane's evidence. He said the fact that they had sold the business the company did not have an operating business at that time to run. Therefore he disagreed with the suggestion that in reality he was running the company. He denied writing the letter on his own behalf and on behalf of the company. He denied having any particular dislike for Mr Trenham. He claimed he sent the letter to Mr Trenham's business by mistake. He repeated that what he did was in the public interest.

[25] Regarding his brother, Mr Schmidt-Lee, Mr Loane said in evidence, he is a real estate agent working in Toowoomba at Century 21, Marsden Realty. He said his brother was the client referred to in the letter. He said his duty in sending the letter to the OFT and the REIQ was as a responsible citizen. He did agree that PT Accounting Services had no clients at the time of the letter. He said that the reason he wrote the letter rather than leave it to his brother was that his brother said he was concerned it wouldn't be taken seriously coming from him given that he knew officers in the OFT Toowoomba and he had met them socially. He thought there would be a conflict of interest. He agreed his brother had been a director of the company between 2 March 2011 and 13 April 2011. Mr Loane said he signed the letter as an accountant as it gave the letter more credibility and he felt it was important it was given credibility in the circumstances. His intention was to ensure it was taken seriously and followed up. Mr Loane said as far as he was concerned the sending of the letter was a matter of business for him and nothing else. He said it was simply a matter of having come across information that he thought was serious and needed to be reported. He was aware that Mr Trenham and his brother had had a falling out. He agreed that before 14 June he knew that his brother did not like Mr Trenham.

[26] The company and Mr Loane called Donna Murray. Ms Murray was the finance and IT manager from 31 January 2005 to 30 June 2009 in Mr Trenham's business. She said that there were two periods of transactions where moneys had been taken out of the trust account prior to settlement of a sale. These two periods were in July 2008 and November 2008. When she gave her evidence I took Ms Murray to say that she told Mr Trenham that the funds could not be released and that is why she returned the papers to him. When she was asked by Mr Loane did she ever transfer funds prior to receiving instructions from solicitors that the moneys could be dispersed she asked could Mr Loane explain the meaning of the word transfer. She then said in answer to a further question which was rephrased for Ms Murray, that there were only those incidences in July and November 2008 where money was transferred out of the trust account into the general account prior to receiving a lawyer's instruction or authority to do so. Unfortunately there were a number of objections taken to Ms Murray's evidence and her evidence did not flow as well as it might have. It seems Ms Murray was trying to explain manual transfers as opposed to computer transfers. The end result is I understood her evidence to be that there were transfers from the trust account to the general account before settlement. However, I do not accept that her evidence is evidence of any wrongdoing by Mr Trenham. She denied the suggestion made by Mr Trenham in his evidence that she transferred those funds without his knowledge in order to set him up.

[27] When cross-examined Ms Murray said she knew Mr Schmidt-Lee. He had been a work colleague of hers and Mr Trenham's business. She also knew Mr Schmidt-Lee's wife. She accepted that she had been given a warning by Mr Trenham but she never got it in writing and was never told what it was. To that extent if that was a falling out she agreed they had had a falling out. She said she met the Schmidt-Lees on holiday on the Gold Coast and met Mr and Mrs Loane at that time which would have been in 2008.

[28] Unfortunately during the trial Mr Trenham was not shown the specific transactions in the print out of transactions from Mr Trenham's trust account. As I understand the evidence these documents were Exhibit 11 and were the documents Mr Loane said his brother showed him as evidence to support the allegations being made by Mr Loane's brother.

[29] Ms Murray was likewise not shown this Exhibit and was not asked if what she was referring to was in this Exhibit. There was of course Mr Trenham's evidence that the OFT found three minor details and that a staff member did not comply with office protocol. It seemed to me when Mr Loane cross-examined Mr Trenham, Mr Loane accepted there were three transactions where money was paid from the trust account to the general account before settlement. There was no evidence to contradict Mr Trenham's evidence that the OFT found a staff member had not complied with office protocol. There was no evidence a transfer of money from the trust account to the general account before settlement was frequent. There was no evidence Mr Trenham paid general operating expenses and his personal debts from trust account money.

[30] I have examined Exhibit 11 and out of 97 pages of entries I can find only three entries where the date a cheque was drawn was before the settlement date. Even so the document contains nothing to suggest the drawing of a cheque before the settlement date was sinister.

[31] Further, I was not favourably impressed by Mr Loane or Mrs Loane.

[32] I consider Mrs Loane was reluctant to admit who the client was referred to in the letter. She was evasive in answering questions. I consider she was not honest when she swore in the affidavit in these proceedings that as at 14 June 2010 Mr Loane was employed by PT as an accountant. Her demeanour in the witness box and the manner in which she answered Mr Loane's questions persuaded me it is Mr Loane who controls the company as he sees fit. The only reason Mr Loane was not recorded as a director of the company was because he had been convicted of fraud. He was for one day registered as a director on 23 April 2012. He said he found out that because of his conviction he could not be a director. The company may have sold the business in April 2010, however, I find it remained a vehicle for Mr Loane to do what he liked. I do not accept Mrs Loane's evidence.

[33] In the case of Mr Loane, I find he was a person who was prepared to misrepresent to Mr Trenham, the Real Estate Institute of Queensland, and the OFT that he had been approached by a client for advice. His statement in that regard in the letter was not an honest statement. I find he had no honest basis to refer to trust account fraud on what he had been given by his brother and was not honest about being given information by his brother of a very serious nature. I find Mr Loane was prepared to act in his brother's interests whom he knew had had a falling out with Mr Trenham. I find Mr Loane was prepared to write the letter to cause Mr Trenham harm on behalf of Mr Loane's brother. On the evidence before me Mr Loane had no honest basis to allege that breaches of the law were occurring during 2008 and 2009 calendar years at the frequency claimed by him, nor that general operating expenses and personal debts of Mr Trenham were being paid by these moneys. I find he misrepresented the risks in the second last paragraph of his letter. He raised the spectre falsely that current and previous staff were concerned about the ramifications of speaking up and wanted to avoid reprisals. He did not suggest he relied on anything Ms Donna Murray had to say before he published the letter. I do not accept Mr Loane's evidence.

[34] Arguably Ms Murray's evidence was irrelevant because there is no plea of truth in the company's and Mr Loane's defence. However, I allowed the evidence as it may have had some relevance to the plea of qualified privilege. In the end I do not accept Ms Murray's evidence as it was not shown to be consistent with anything in Exhibit 11 and is contradicted by Mr Trenham's evidence.

[35] I consider Mr Schmidt-Lee could have been called by the company and Mr Loane to support Mr Loane's claims the letter was written out of concern for the public interest. Mr Schmidt-Lee's absence from the witness box persuaded me he could not say there was something sinister about the three entries in Exhibit 11.

[36] I was favourably impressed by Mr Trenham. I accept his evidence that the OFT investigation found only three minor details and a staff member did not follow office protocol. Exhibit 11, I consider, supports Mr Trenham. If there had been anything of the kind claimed by Mr Loane in his letter, I consider that would have been the subject of evidence in this trial.

[37] I also accept Mr Trenham at no time misused trust account money. I accept Mr Trenham honestly believes Ms Murray set him up.

[38] I find Mr Loane's actions were authorised by the company. I find that Mr Loane had been put by the company in a position to write letters on behalf of the company. The company was Mr Loane's company to do with the company as he pleased. (See Colonial Mutual Life Assurance Ltd v The Producers and Citizens Co-operative Assurance Company of Australia Ltd). [1] I find it was irrelevant that Mr Loane was incarcerated for 15 months from 10 December 2008 to 10 March 2010. Further, I find it was irrelevant the business had been sold in April 2010. Mr Loane's response to Mr Trenham's lawyers letter of 16 June was written on the company's letterhead as had the letter. Further, Mr Loane had executed for the company a debenture for $500,000. I find the only reason Mr Loane was not a director in the records was was because of his conviction.

[39] In any event, I find the company ratified Mr Loane's actions. That ratification occurred by the company's choice to defend these proceedings and raise a positive defence against Mr Trenham. (See Gatley on Libel and Slander, 11th ed at para 8.33).

[40] The company and Mr Loane in their defences deny that the words in the letter bore or where understood to bear or were capable of bearing any of the meanings claimed by Mr Trenham as the words in their ordinary and natural meaning were incapable of conveying such meanings other than by means of a forced, strained and utterly unreasonable interpretation, and an ordinary reasonable reader of the words in the context of the letter as a whole could not have understood them as defamatory of Mr Trenham.

[41] In Favell v Queensland Newspapers Pty Ltd[2] the majority regarding whether words were capable of conveying a defamatory meaning and whether the words do in fact convey a defamatory meaning referred to Jones v Skelton where the Privy Council said:

"It is well settled that the question as to whether words which are complained of are capable of conveying a defamatory meaning is a question of law, and is therefore one calling for decision by the Court. If the words are so capable then it is a question for the jury to decide as to whether the words do, in fact, convey a defamatory meaning. In deciding whether words are capable of conveying a defamatory meaning the Court will reject those meanings which can only emerge as the produce of some strained, or forced, or utterly unreasonable interpretation ... the test of reasonableness guides and directs the Court in its function of deciding whether it is open to a jury in any particular case to hold that reasonable persons would understand the words complained of in a defamatory sense."

[42] Further, in Favell[3] the High Court referred to Lewis v Daily Telegraph Ltd where Lord Reid said:

"The ordinary man does not live in an ivory tower and he is not inhibited by a knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs."

[43] With regard to Lewis the High Court in Favell[4] referred to Lord Devlin's speech and said:

"Lord Devlin pointed out, in Lewis v Daily Telegraph Ltd, that whereas, for a lawyer, an implication in a text must be necessary as well as reasonable, ordinary readers draw implications much more freely, especially when they are derogatory. That is an important reminder for judges. In words apposite to the present case, his Lordship said:

'It is not ... correct to say as a matter of law that a statement of suspicion imputes guilt. It can be said as a matter of practice that it very often does so, because although suspicion of guilt is something different from proof of guilt, it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also a fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that. They can convey a meaning of suspicion short of guilt; but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded'."

[44] The company and Mr Loane say what Mr Loane did was to report suspicions of a third party. In my opinion, notwithstanding the use of the words "suspicions" and "suspects" in the letter, the words used in the letter are capable of conveying the defamatory meanings alleged by Mr Trenham and do, in fact, convey the defamatory meanings alleged by Mr Trenham. That is because the words used in the letter went beyond suspicion and claimed Mr Trenham was guilty of fraud and the other defamatory imputations

[45] I do not accept the meanings alleged by Mr Trenham emerge as the product of some strained, or forced, or utterly unreasonable interpretation.

[46] Regarding qualified privilege at common law in Bashford v Information Australia (Newsletters) Pty Ltd[5] the majority of the High Court referred to the statement of Parke B in Toogood v Spyring where he said:

"In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well - known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorised communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits".

[47] Further, in Bashford the majority said at p 373:

These principles are stated at a very high level of abstraction and generality. 'The difficulty lies in applying the law to the circumstances of the particular case under consideration'. Concepts which are expressed as 'public or private duty, whether legal or moral' and 'the common convenience and welfare of society' are evidently difficult of application. When it is recognised, as it must be, that 'the circumstances that constitute a privileged occasion can themselves never be catalogued and rendered exact, it is clear that in order to apply the principles, a court must 'make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication'."

[48] In the present matter I find Mr Loane did not believe what he wrote in the letter. I do not accept his evidence that he believed there was enough evidence to warrant the matter being looked at in the public interest. I do not accept his evidence that he published the letter to Mr Trenham's business by mistake. I find he meant to publish the letter to Mr Trenham's business to cause Mr Trenham the most amount of harm on his brother's behalf whom he knew had fallen out with Mr Trenham. I do not accept his evidence that he relied on the documents given to him by his brother and what his brother said. I find those documents and what he said in evidence his brother said to him could not to an honest person lead them to publish the letter Mr Loane published. Although Mr Loane called Ms Murray to give evidence he did not himself say he had at any time prior to the letter being published relied upon any information from Ms Murray. I find that the claims made by Mr Loane to have relied upon the documents given to him by his brother and what his brother said to be contrived just as the use by him in the letter of the words "suspicions" and "suspects" were contrived to try and avoid the consequences in the event Mr Trenham sought to take action against the company and Mr Loane. On the evidence before me, I find Mr Loane had no honest basis to say what he said in the letter. Therefore I find the defence of qualified privilege at common law is not made out in this case.

[49] Section 30 of the Act has also been raised by the company and Mr Loane. That section provides as follows:

"(1) There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that -

(a) the recipient has an interest or apparent interest in having information on some subject; and

(b) the matter is published to the recipient in the course of giving to the recipient information on that subject; and

(c) the conduct of the defendant in publishing that matter is reasonable in the circumstances.

(2) For the purposes of subsection (1), a recipient has an apparent interest in having information on some subject if, and only if, at the time of the publication in question, the defendant believes on reasonable grounds that the recipient has that interest.

(3) In determining for the purposes of subsection (1) whether the conduct of the defendant in publishing matter about a person is reasonable in the circumstances, a court may take into account -

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

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

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

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

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

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

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

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

(i) any other steps taken to verify the information in the matter published; and

(j) any other circumstances that the court considers relevant.

(4) For the avoidance of doubt, a defence of qualified privilege under subsection (1) is defeated if the plaintiff proves that the publication of the defamatory matter was actuated by malice.

(5) However, a defence of qualified privilege under subsection (1) is not defeated merely because the defamatory matter was published for reward."

[50] In this matter I find Mr Loane did not believe what he said in the letter was true. Therefore, I find his conduct in publishing the letter was not reasonable in the circumstances. Therefore this defence under the Act is not made out by the company and Mr Loane.

[51] In any event Mr Trenham raises by way of reply that the company and Mr Loane were actuated by malice or some other improper motive. Therefore Mr Trenham says the defences of qualified privilege do not apply in this case.

[52] Regarding malice in Roberts v Bass (2002)[6] the majority of the High Court said at para 75 regarding qualified privilege:

"Proof of express malice destroys qualified privilege. Accordingly, for the purpose of that privilege, express malice ('malice') is any improper motive or purpose that induces the defendant to use the occasion of qualified privilege to defame the plaintiff."

"Improper motive in making the defamatory publication must not be confused with the defendant's ill-will, knowledge of falsity, recklessness, lack of belief in a defamatory statement, bias, prejudice or any other motive than duty or interest for making the publication. If one of these matters is proved, it usually provides a premise for inferring that the defendant was actuated by an improper motive in making the publication. Indeed, proof that the defendant knew that a defamatory statement made on an occasion of qualified privilege was untrue is ordinarily conclusive evidence that the publication was actuated by an improper motive. But, leaving aside the special case of knowledge of falsity, mere proof of the defendant's ill-will, prejudice, bias, recklessness, lack of belief in truth or improper motive is not sufficient to establish malice. The evidence or the publication must also show some ground for concluding that the ill-will, lack of belief in the truth of the publication, recklessness, bias, prejudice or other motive existed on the privileged occasion and actuated by the publication."

[53] In Harbour Radio Pty Ltd v Trad[7] the majority of the High Court said at para 74:

"If the defendant knows a statement is untrue at the time of its making, this is "almost invariably conclusive evidence of malice".

[54] I find Mr Loane knew what he said in the letter was not true. He had no reasonable basis to say what he said in the letter. I find in making the publication Mr Loane was actuated by malice.

[55] Therefore on that basis I find the defences of qualified privilege at common law or pursuant to s 30 of the Act are not made out.

[56] Therefore I find the company and Mr Loane are liable to Mr Trenham for damages for defamation.

[57] Mr Trenham claims $150,000 for damages. Mr Loane submitted the quantum sought by Mr Trenham was not comparable to the damages awarded by Dorney QC DCJ in Hocken v Morris [2001] QDC 115.

[58] In that case the defendant placed posters on various noticeboards, posts and other available public services with an increasing degree of permanent attachment in the Samford/Ferny Grove area on the outskirts of Brisbane. The posters were photocopies of a Crime Stoppers poster concerning the well publicised and well known case of the missing child Daniel Morcombe to which were added the handwritten words in large block letters "YOU WILL BE BROUGHT TO JUSTICE MICHAEL HOCKEN". His Honour allowed for general damages for defamation $50,000 in that case. There was a further $25,000 in damages allowed for aggravated damages.

[59] In Carson v John Fairfax and Sons Ltd[8], the majority of the High Court said of the purposes to be served by damages awarded for defamation"

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

[60] Section 34 of the Act provides:

"In determining the amount of damages to be awarded in any defamation proceedings, the court is to ensure that there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded."

[61] Furthermore, s36 of the Act provides:

"In awarding damages for defamation, the court is to disregard the malice or other state of mind of the defendant at the time of the publication of the defamatory matter to which the proceedings relate or at any other time except to the extent that the malice or other state of mind affects the harm sustained by the plaintiff."

[62] In Prendergast v Roberts[9], Mullins J said at paragraph 37 that because the combination and the weight given to relevant factors and circumstances can vary so much from case to case, there is no precision in deciding the appropriate quantum.

[63] In that case her Honour allowed the plaintiff $50,000 as general damages for defamation. The plaintiff was a registered builder whom the jury found had been defamed by the defendant by publishing imputations about the plaintiff that he was an incompetent builder and a dishonest builder.

[64] Counsel for Mr Trenham submits I make an award for aggravated damages. Section 35(2) of the Act provides:

"A court may order a defendant in defamation proceedings to pay damages for non-economic loss that exceed the maximum damages amount applicable at the time the order is made if, and only if, the court is satisfied that the circumstances of the publication of the defamatory matter to which the proceedings relate are such as to warrant an award of aggravated damages."

[65] As I understand it the maximum at the time of Mr Trenham's claim for damages for non-economic loss that could be awarded in his proceedings is $294,500.

[66] I accept Mr Trenham's evidence. I accept that a member of his staff received the letter and contacted him. I accept when he saw the letter he was absolutely devastated. I accept he started to panic a little bit because he just could not believe that anyone would do that. I accept his evidence that his wife was distraught and that a few of her friends knew about it. I accept he started to shake a lot and lost sleep and this had an impact on his relationship with his wife. I accept his staff became aware of the allegations.

[67] Despite Mr Doneley's previous convictions, I accept his evidence. I accept his evidence that Mr Trenham is highly regarded and is regarded as an honest person and in relation to real estate he is very scrupulous and honest. Mr Doneley's evidence is also supported in this regard by the evidence of Mr Milton. I accept Mr Milton's evidence. He described Mr Trenham as a straight shooter and an honest man with a good reputation. I also accept Mr Jenman's evidence. He considers Mr Trenham in relation to real estate to have a reputation that is quite highly regarded. He also regards Mr Trenham as an honest person. He also regards Mr Trenham as very highly regarded in business. He also knew that Mr Trenham was under a lot of stress after the publication of the letter.

[68] I also accept Mr Trenham's evidence of his past involvement with the Victorian Real Estate Institute. This shows that he was prepared to be involved in the well being of the industry of which he was a part.

[69] I also accept his evidence that at the time of the publication of this letter he had 18 employees in his office.

[70] Mr Doneley also said this publication has had a significant impact on Mr Trenham. He said it has affected his capacity to work and he has become more forgetful and he is incredibly stressed from this matter in particular. Mr Doneley thought Mr Trenham to be far more lethargic and he is tired when he isn't to be. Mr Trenham and Mr Doneley have spoken about the letter on a number of occasions. He said it still concerns him to this very day.

[71] I also observed Mr Trenham when he was giving his evidence and being cross-examined. I consider he was upset while he was giving his evidence because of the imputations in the letter and the defence of the proceedings by the company and Mr Loane.

[72] I consider this defamation has caused Mr Trenham significant distress and was still causing him distress even as he gave his evidence.

[73] I have previously mentioned my finding that Mr Loane meant to send the letter to Mr Trenham's office. Further before Mr Loane published the letter to the OFT Mr Loane had received the solicitors letter on behalf of Mr Trenham to apologise and make a retraction. Notwithstanding that letter Mr Loane chose to publish the letter to the OFT. The OFT carried out an investigation which was another consequence for Mr Trenham. The three purposes relevant to an award of damages in a case of defamation are significant in this case. Further, I am satisfied the malice with which Mr Loane published this defamation of Mr Trenham has had a significant detrimental effect upon Mr Trenham.

[74] However, any quantum for non-economic loss in this matter would not exceed the statutory maximum. Therefore as I understand s 35(2) of the Act, there is no occasion for an award of aggravated damages.

[75] I consider this case to be a much worse case of defamation than the cases of Hocken v Morris and Prendergast v Roberts.

[76] In all the circumstances I assess Mr Trenham's damages at $100,000.

[77] I also allow Mr Trenham interest at the rate of five per cent per annum from 14 June 2010 to 14 November 2012, a period of two years and five months which is 2.41 years on the sum of $100,000, which is a sum of $12,050.

[78] Therefore I give judgment for the plaintiff against the first defendant and the second defendant for the sum of $112,050.

[79] I will hear the parties on the question of costs.

[1] [1931] HCA 53; (1931) 46 CLR 41, 46-47

[2] [2005] HCA 52; [2005] 79 ALJR 1716 at 1719.

[5] [2004] HCA 5; (2004) 218 CLR 366 at p 373.

[6] [2002] HCA 57; [2002] 212 CLR 1.

[7] [2012] HCA 44

[8] [1993] HCA 31; (1993) 178 CLR 44, 60-61.

[9] [2012] QSC 144.