Vilo v John Fairfax & Sons Ltd & Anor

Supreme Court of NSW|2000-05-01|Before: Simpson J

CITATION : Vilo v John Fairfax & Sons Ltd & Anor [2000] NSWSC 937 FILE NUMBER(S) : SC 17027/83 HEARING DATE(S) : 1 May 2000 JUDGMENT DATE : 6 October 2000

PARTIES : Enn Vilo - Plaintiff John Fairfax & Sons Ltd & Anor - Defendants JUDGMENT OF : Simpson J at 1

COUNSEL : Mr T Molomby - Plaintiff Mr S Wheelhouse - Defendant SOLICITORS : Leitch Hasson & Dent - Plaintiff Mallesons Stephen Jacques - Defendants CATCHWORDS : Defamation - jury verdict in favour of plaintiff - defence of qualified privilege determined LEGISLATION CITED : Defamation Act 1974 Human Rights Act 1998 Morgan v John Fairfax & Sons Ltd (1990)20 NSWLR 511 Adam v Ward [1917] AC 309 Watt v Longsdon [1930] 1 KB 130 at 147-8 Morosi v Mirror Newspapers Limited [1977] 2 NSWLR 749 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 CASES CITED : Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448 Reynolds v Times Newspapers Limited [1999] 3 WLR 1010 Loveday v Sun Newspapers Limited (1938) 59 CLR 503 Wright v Australian Broadcasting Commission [[1977] 1 NSWLR 1 NSWLR 697] Wright v ABC (1977) 1 NSWLR Austin v Mirror Newspapers Limited (1985) 3 NSWLR 354 at 359 Morgan v John Fairfax & Sons Ltd [No.2] (1991) 23 NSWLR 374 at 383 DECISION : Defence of qualified privilege rejected.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Defamation

17027/83 ENN VILO v JOHN FAIRFAX AND SONS LTD & ANOR Judgment

HER HONOUR : 1 In these proceedings the plaintiff sued the defendants for defamation arising out of two separate publications. He pleaded that the same three imputations arose out of each publication. The jury having returned verdicts in favour of the plaintiff in respect of four of the six imputations so pleaded, the question that now arises for determination concerns defences of qualified privilege, both statutory and at common law, raised by the defendants. The parties have agreed that findings of fact relevant to the defence should be made by me: see Morgan v John Fairfax & Sons Ltd (1990) 20 NSWLR 511.

History 2 In 1983 the plaintiff was a registered medical practitioner and was also one of two executive directors and a principal shareholder in Bishopsgate Insurance Australia Limited ("Bishopsgate") a company whose principal business was insurance. The other executive director and a shareholder was a man called Andrew Stathopoulos, also known Andy Stathis. 3 The first defendant was the publisher of the Sun Herald, a Sunday newspaper distributed principally in NSW, but also in the other states and territories of Australia; the defendants jointly were the publishers of the Business Review Weekly ("BRW"), a weekly journal devoted to business and financial matters and affairs distributed nationally. 4 In August 1983 Bishopsgate collapsed. Stathopoulos disappeared and was believed to have left the country. Bishopsgate's funds also disappeared. At about the same time the plaintiff temporarily left Australia. He left Australia on 5 August and travelled first to Hong Kong and ultimately to London. He returned to Australia on 3 September. 5 The defendants published reports or articles about the collapse of Bishopsgate, the disappearance of Stathopoulos, and the plaintiff's departure from Australia in each of the two relevant publications. The Sun Herald article was published in the edition of 14 August 1983; the BRW article in the edition dated 13-19 August 1983. 6 The plaintiff pleaded that each publication conveyed three imputations in the following terms: "(i) The Plaintiff was a fugitive from Justice; (ii) The Plaintiff had misappropriated funds from Bishopsgate Insurance Australia, of which he was a Director; (iii) The Plaintiff was a party with Andrew Stathopoulos to the misappropriation of some $19 million from Bishopsgate Insurance Australia, of which both of them were Directors." 7 A jury was empanelled on Monday 1 November 1999. Later that day it decided that each pleaded imputation was conveyed by each publication, and that each defamed the plaintiff. 8 It thus became necessary for the jury to hear evidence relevant to, and ultimately decide, those defences which, having regard to the date of the publications, are for jury determination. 9 Both defendants pleaded that imputations (i) and (ii) (but not (iii)) were substantially true, and were published under qualified privilege; and/or related to a matter of public interest. I ruled (without dissent from the plaintiff) that the imputations did relate to a matter of public interest and, accordingly, the defence in relation to either of those imputations would have succeeded if the defendants had been able to establish that the imputation was substantially true. However, the jury found that neither was substantially true. 10 In relation to all imputations the defendants also pleaded defences of comment, contextual truth and qualified privilege (both pursuant to statute and at common law). The defence of comment succeeded in relation to the second and third imputations as conveyed by the Sun Herald publication but not as conveyed by the BRW article. To the extent to which it was necessary to decide it (that is, in relation to those imputations with respect to which the comment defence failed) the jury rejected the defence of contextual truth. 11 In total, in respect of the four imputations in relation to which no defence succeeded, the jury awarded the plaintiff damages totalling $520,000. 12 It is now necessary to consider the issues raised by the defences of qualified privilege. 13 As noted above the defendants relied on defences of qualified privilege both as provided by s 22 of the Defamation Act 1974 ("the Act"), and at common law. It is convenient to deal with the latter first.

Qualified privilege at common law. 14 The conventional statement of the requirements of the defence of qualified privilege at common law encompasses what has come to be known as the "duty/interest" test. The occasion of qualified privilege arises where a person who makes a communication has an interest or duty (whether legal, social or moral) to make it, and the person to whom it is made has a corresponding duty or interest in receiving it: Adam v Ward [1917] AC 309. 15 In Watt v Longsdon [1930] 1 KB 130 at 147-8, Lord Scrutton re-stated the principle in this way: "…the principle is that either there must be interest in the recipient and a duty to communicate in the speaker, or an interest to be protected in the speaker and a duty to protect it in the recipient. …[There must be] 'either (1) a duty to communicate information believed to be true to a person who has a material interest in receiving the information, or (2) an interest in the speaker to be protected by communicating information, if true, relevant to that interest, to a person honestly believed to have a duty to protect that interest, or (3) a common interest in and reciprocal duty in respect of the subject matter of the communication between speaker and recipient' " 16 In the ninth edition of Gatley: On Libel and Slander (1998, Sweet and Maxwell, at paragraph 14.3), the following summation appears (internal references omitted): "To gain protection, the statement must be fairly warranted by the occasion, that is to say it must be reasonably necessary for the performance of the duty or the protection of the interest which underlies the privilege. This may exclude the publication of some irrelevant matter, but it also means that the court may have to balance the relative harm to the defendant if the statement is not published and to the plaintiff's reputation if it is." 17 For NSW, the law of common law qualified privilege was comprehensively reviewed by the Court of Appeal in Morosi v Mirror Newspapers Limited [1977] 2 NSWLR 749. The Court did not depart from these statements of principle. More recently, the High Court has directed its attention to the defence: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. 18 The common law defence of qualified privilege is available to protect publications to large audiences or to the general public only in exceptional cases: Adam v Ward; Radio 2UE Sydney Pty Ltd v Parker (1992) 29 NSWLR 448; Lange pp 570, 572; Morosi, p775. 19 The High Court in Lange gave no indication that the authorities supporting this proposition should no longer be regarded as the law, or should be considered as requiring review. In my opinion they must, for NSW, be regarded as good law. 20 The defendants relied heavily upon the decision of the House of Lords in England in Reynolds v Times Newspapers Limited [1999] 3 WLR 1010. That decision is said to mark a significant development in the common law in England, and the defendants urged that that development should be taken to represent the current law of NSW also. 21 In Reynolds, the House of Lords placed heavy emphasis on the importance of freedom of expression. Indeed, Lord Nicholls of Birkenhead, with whose analysis Lord Cooke of Thorndon and Lord Hobhouse of Woodborough expressly agreed, took (at p 1022) freedom of expression as his starting point, and proceeded to expound upon the importance of the media in the expression and communication of information and comment on political matters. His Lordship acknowledged the conventionally recognised need to balance that against the protection of individuals (including public figures) from unwarranted damage to their reputations. It is the defendants' argument that the effect of the House of Lords' decision is to alter that traditional balance so that greater emphasis is placed on freedom of speech at the expense of reputation protection. 22 The defendants' proposition is a composite one. It involves, firstly, acceptance that Reynolds marks a significant shift in the approach to a defence of qualified privilege in the United Kingdom; and secondly, that, to the extent that it does so, that shift should be taken as incorporated into the law of NSW. 23 For the first proposition there is a modicum of support in Lord Nicholls' speech. For example, at p 1020 his Lordship reformulated the duty/interest test for the defence as: "whether the public was entitled to know the particular information". 24 He did this in the context of rejecting an alternative approach earlier adopted by the English Court of Appeal in the same case, in which the Court of Appeal proposed a third limb to the traditional duty/interest test, which it identified as "the circumstantial test". Further, at p 1027 his Lordship referred to the "elasticity of the common law principle" which enables the court to give appropriate weight, in contemporary conditions, to the importance of freedom of expression by the media on matters of public concern. His Lordship noted that the common law solution had been for the court to have regard to all the circumstances when deciding whether the publication of particular material was privileged because of its value to the public, but observed that the value of such material to the public depended upon quality as well as subject matter. 25 Lord Nicholls listed ten matters as relevant to the balancing exercise. These are:

the seriousness of the allegation; 2. the nature of the information; 3. the source of the information; 4. the steps taken to verify the information; 5. the status of the information; 6. the urgency of the matter (having regard to the perishability of news as a commodity); 7. whether comment was sought from the plaintiff; 8. whether the article contained the gist of the plaintiff's side of the story; 9. the tone of the article; 10. the circumstances of the publication, including the timing.

This list was not intended to be exhaustive. 26 When the passages to which I have referred, and the judgments as a whole, are read in their proper context it seems to me that any change in emphasis is rather less dramatic than has been suggested. The test formulated by Lord Nicholls (whether the public was entitled to know the particular information) was described by him as "a simpler and more direct way" of expressing the conventional duty/interest test. This view is reinforced by his Lordship's view, expressed in his "Conclusion" (p 1027) that: "The established common law approach to misstatements of fact remains essentially sound." 27 Specifically, he rejected as unsound in principle the notion (endorsed for Australia by the High Court in Lange) of a separate and independent category of the defence related to political information. 28 In my view the greatest significance of the decision in Reynolds was that it opened in principle the defence of qualified privilege to mass media outlets and defendants. Having regard to the (non-exhaustive) list of relevant considerations mentioned by Lord Nicholls, it remains to be seen what practical effect this decision will have upon the law in the United Kingdom. 29 It is unnecessary (and inappropriate) to reach any firm conclusions about the extent to which the decision in Reynolds has altered the law for the United Kingdom. I am satisfied that, whatever changes have been wrought in that jurisdiction, Reynolds does not change the law for NSW. For a start, each of their Lordships (except Lord Hobhouse, who did, however, adopt the reasoning of Lord Nicholls) expressly emphasised the significance to the decision of the provisions of the Human Rights Act 1998 (expected to come into force on 2 October 2000), which will require courts in the United Kingdom to have particular regard to the importance of the right to freedom of expression; and most also referred to the requirements of the European Convention for the Protection of Human Rights and Fundamental Freedoms. 30 No such statutory or convention provisions operate to guide the determination, by NSW courts, of claims to qualified privilege at common law. Nor has there been any dramatic change, such as the introduction of the Human Rights Act in the UK, in the direction given to courts in the manner in which they are to exercise pre-existing discretions, or effect pre-existing matters for judgment or evaluation. 31 The High Court of Australia has recently considered the law of qualified privilege, in Lange, and has reached a conclusion different from that stated by the House of Lords in relation to the availability of a particular category of qualified privilege defence where government and political matters are concerned. Although the focus of that case was the interaction between Australian constitutional requirements and the elements of the defence of qualified privilege, and the impact any "undue burden" on freedom of expression may cast upon the need for freedom of communication in order to give effect to the constitutional prescription for representative government, the Court considered the defence in more general terms. 32 The rejection by the House of Lords of the particular category of the defence recognised by the High Court in Lange does not of itself require a conclusion that the principle adopted for the United Kingdom is inapplicable in NSW. That is because the present case is not concerned with a public figure or political comment. However, the fact that the House of Lords saw fit to reject the approach adopted by the High Court, together with its need to conform to its own particular statutory and convention requirements, is indicative that the two jurisdictions are taking different paths in respect to this defence. 33 The decisions in Reynolds and Lange show that the House of Lords and the High Court of Australia have, in two respects, taken divergent paths in relation to the law of qualified privilege at common law. The first, whether there exists a particular branch of the law relevant to political and government matters, results from Australian constitutional arrangements, and is not directly relevant to the question I have to decide. It is relevant only as signifying a divergence of approach and signalling caution in following UK authority on this subject. The second, however, is of direct relevance to the present question. The House of Lords has signified that the defence, in principle at least, is available to organs of the mass media. The High Court, by contrast, has endorsed the traditional view taken in Australia that, generally at least, it is not. That the House of Lords view was significantly affected by relevant statutory and convention provisions inapplicable in this jurisdiction only strengthens the conclusion that that decision does not bind, and provides at best limited guidance, to this Court. 34 I have therefore come to the firm view that the common law defence of qualified privilege, as raised in the present case, should be determined in the light of the relevant passages in Lange, and pre-existing consistent decisions of the High Court, the Court of Appeal, and this Court. 35 The circumstance that the defence is generally unavailable to mass publications makes it very difficult for the defendants to succeed in respect of either of the present publications. Both the Sun Herald and BRW are published to the public at large. There are, it is to be recognised, differences in the audience to whom the publications are directed. The Sun Herald is a mass media Sunday newspaper. Its potential audience is almost unlimited, in terms of the classes and categories of the population who might receive it. BRW, on the other hand, has a more limited target audience. It is directed principally to members of the public with an interest in matters of finance and business. It remains, however, a publication directed and available to the public at large. The more confined base of its likely readership does not bring it within the "exceptional" category of cases of mass circulation that could take advantage of the duty/interest test. An illustration of an exceptional case in which a mass publication was held to attract qualified privilege is Adam v Ward, a case in which an attack was made by the plaintiff on an army general under the cover of the absolute privilege of Parliament. The defendant (the Secretary of the Army Council, not the general attacked) responded to the attack upon the general by a publication in the mass media. It was the fact that the originating material was, in effect, made to the world at large (by being made in Parliament) that created the exceptional circumstance. That entitled the defendant to avail himself of the defence. No such exceptional circumstance here exists. 36 Another case, having some parallels with Adam, is Loveday v Sun Newspapers Limited (1938) 59 CLR 503, in which the publication the subject of the proceedings was, again, a response to a previous publication, attacking a municipal council. The initiating attack was made in a newspaper. The defendant to the proceedings responded in the same forum. Because the forum was chosen by the plaintiff he could not complain when the response was published in the same medium. 37 I was not referred to any other case in which the publisher of a mass publication successfully raised the defence. I am satisfied that it is not available to protect the imputations conveyed by the Sun Herald, and, notwithstanding the slightly more favourable (to the defendants) circumstances of the BRW publication by reason of its special interest target audience, I am also satisfied that the defence is not available to protect that publication. 38 Fundamental to the defence is the existence of a duty on the part of the publisher to make the communication. The defendants have failed to establish that, in either of the publications, they were publishing under a duty. They had no duty to publish. In each case the enterprise was a commercial one undertaken for the defendants' own purposes. This is by no means a criticism of the defendants, but they can hardly be said to have had a duty to publish the information about Bishopsgate. The duty they were under was to ensure the accuracy of what they published, particularly where the publication was such as potentially to damage a reputation. A duty to ensure that a publication, if made, is accurate is not a duty to publish. 39 The defence of qualified privilege at common law in respect of each publication fails.

Defamation Act, s 22 40 S 22 is in the following terms: 22. Information (1) Where, in respect of matter published to any person -

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

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

there is a defence of qualified privilege for that publication.

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

(3) Where matter is published for reward in circumstances in which there would be a qualified privilege under subsection (1) for the publication if it were not for reward, there is a defence of qualified privilege for that publication notwithstanding that it is for reward.

41 In Lange the High Court identified reasonableness of conduct as the basic criterion of a s 22 defence. 42 Of s 22 the Court of Appeal said in Morosi: "Newspaper publications are made to the public at large, and the conduct of a publisher in publishing defamatory matter in a newspaper must be reasonable having regard, inter alia, to that wide publication. Any person publishing defamatory matter should be careful to ensure that it is proper for him to make the publication, no matter how limited in extent it is. Since s 22 provides a defence, the onus is upon the publisher to show that he is entitled to its protection. To satisfy this onus, a newspaper publisher must establish circumstances, or point to proven circumstances, which make it reasonable to publish the defamatory matter to the world at large. It is rarely, if ever, that this onus would be satisfied by the terms of the publication alone: cf Wright v Australian Broadcasting Commission [[1977] 1 NSWLR 697]; it is possible that, in some cases, it would be satisfied by the evidence of witnesses called by the plaintiff; but commonly its satisfaction would require the publisher to call evidence to establish what care he had taken. In satisfying this onus, a newspaper publisher is in no different position to a private citizen in possession of the same information. The fact that the publisher has sources for his information, and that he has made the best check possible in the time to ensure that the defamatory matter is accurate does not, of course, necessarily make reasonable the publication of that matter in a newspaper. And it is difficult to see how publication in a newspaper of " understandings " , " speculation ", " beliefs " or rumours that a person has been guilty of discreditable conduct can ever be reasonable; but, if a newspaper wishes to establish that it is, it will bear a heavy onus indeed." 43 In Wright v ABC (1977) 1 NSWLR 697 Reynolds JA seemed to have assumed that s22(1)(a) was intended to encompass the provision of information by mass media publishers: see p 711. His Honour however, paid careful attention to whether or not the publication there in question was made "in the course of giving information" and concluded that it was not. 44 His Honour's view was apparently endorsed in Austin v Mirror Newspapers Limited (1985) 3 NSWLR 354, at p 359. 45 Applying these principles to the present case, I have no difficulty in concluding that the collapse of an insurance company, and the disappearance of both a director (or directors) and the funds of the company was a subject on which readers of the Sun Herald and BRW had an interest or apparent interest. The defendants have established the first limb of the defence under s 22 in respect of each publication. I am further satisfied that the defamatory imputations were published in the course of giving information to the readership of the two publications on that subject. The defendants have therefore established the second limb of the defence under s 22. The remaining question is whether the defendants have established that their conduct in the publication of any imputation was reasonable in the circumstances. The answer to this question requires separate examination of the conduct of the defendants' employees responsible for each of the articles. 46 Before proceeding to deal with the relevant facts, it is appropriate to remind myself of the principles established in decided cases in relation to this question. 47 In Austin the Privy Council said: "In considering whether the conduct of the publisher is reasonable the court must consider all the circumstances leading up to and surrounding the publication. These circumstances will vary infinitely from case to case and it would be impossible and most unwise to attempt any comprehensive definition of what they may be. But where a jury has rejected a defence of fair comment upon the ground that the facts upon which the comment is based are not substantially true the starting point of the inquiry must be the ascertainment of those facts which the jury has found to be untrue. A newspaper with a wide circulation that publishes defamatory comments on untrue facts will in the ordinary course of events have no light task to satisfy a judge that it was reasonable to do so. Those in public life must have broad backs and be prepared to accept harsh criticism but they are at least entitled to expect that care should be taken to check that the facts upon which such criticism is based are true." (p 360) 48 The breadth of the considerations relevant to the question of reasonableness is to be borne in mind. The plaintiff could hardly be said to have been in public life and therefore required to have a broad back, but he was, like those in public life, entitled to expect that care would be taken to check the facts published about him. 49 Earlier, Reynolds JA, with whom Glass JA agreed, in Wright said: "Section 22(1)(c) calls for the consideration of a wide range of matters. Some are to be found in the published material itself and the manner and extent of its publication, and others from the whole of the surrounding circumstances. The connection between the subject and the defamatory imputation remains relevant. It may be tenuous, or it may be real and substantial. If what was said includes comment, it is relevant to consider whether it was fair and whether it followed logically from facts known or stated. Questions of the exercise of care before the defamatory utterance are also relevant, and questions as to whether the maker of the statement knew whether he was likely to convey a misleading impression. These are but examples of what I conceive to be involved in the inquiry to be made by the judge in order to determine whether the defendant has satisfied him that it was reasonable of him to defame the plaintiff in the way he did." (p712) 50 In Lange, the High Court said: "Whether the making of a publication was reasonable must depend upon all the circumstances of the case. But, as a general rule, a defendant's conduct in publishing material giving rise to a defamatory imputation will not be reasonable unless the defendant had reasonable grounds for believing that the imputation was true, took proper steps, so far as they were reasonably open, to verify the accuracy of the material and did not believe the imputation to be untrue. Furthermore, the defendant's conduct will not be reasonable unless the defendant has sought a response from the person defamed and published the response made (if any) except in cases where the seeking or publication of a response was not practicable or it was unnecessary to give the plaintiff an opportunity to respond." (p 574) 51 That the collapse of Bishopsgate was a matter of public interest was undisputed and is beyond question. That is not the present issue. The present question is whether the conduct of either of the defendants, in publishing the imputation that the plaintiff was a fugitive from justice (in either publication) was reasonable in the circumstances; and whether their conduct in publishing, in BRW, the imputations that the plaintiff had misappropriated Bishopsgate's funds, and that he was a party with Stathopoulos to the misappropriation of $19 million, was reasonable in the circumstances. It is to be emphasised that the relevant conduct is the conduct of the defendants (acting through their employees: Austin, p 363) in publishing the particular imputation under consideration. It is not the defendants' general conduct in publishing the whole of the matter complained of: Wright, p705; Morgan v John Fairfax and Sons Ltd, [No.2] (1991) 23 NSWLR 374 at 383. It is therefore quite possible that different results might eventuate in relation to the different imputations.

The Sun Herald Publication 52 The defence of comment having succeeded in relation to the second and third imputations published in the Sun Herald, the only imputation published by that newspaper which is presently relevant is the imputation that the plaintiff was a fugitive from justice. 53 The article as published attributed authorship to Joe Payne, Kevin Perkins and Graham Gambie. It was an extensive article, under the general heading "The amazing life and times of Mr Stathopoulos", with a larger headline "The scandal of Andy the Greek …" and was in three segments, entitled, respectively "How was he allowed out of the country?", "How a boy from the bush went to town", and "The final plunge". A photograph of what was apparently an earlier headline, reading "Million dollar punter missing" was captioned as a copy of the front page of the previous week's Sun Herald. 54 The article is overwhelmingly devoted to Stathopoulos. In the main story it is reported that Stathopoulos was, at the time of his disappearance, the subject of pending criminal charges concerning a large marijuana plantation; to questioning how, in those circumstances, he was able to leave the country; to the money missing from Bishopsgate; and to details of his life. The other, shorter, stories review Stathopoulos's life in a country town and his propensity for gambling. 55 The only mention of the plaintiff appears in the closing paragraphs of the main story. These read: "His fellow director, Dr Enn Vilo, a medical practitioner and racehorse owner, is also missing. The Fraud Squad has also asked Interpol out to look out for Vilo." 56 Mr Joe Payne, one of the three journalists who together wrote the stories, and the only one to give evidence, acknowledged that he had been responsible for writing the two final paragraphs extracted above. He said he did this on the basis of information given to him by Detective Sergeant Whittaker, of the Fraud Squad of the NSW Police, who was involved in the investigation into the Bishopsgate matters. The information given to Mr Payne was that the plaintiff was missing and Interpol had been alerted to try to find him. On that basis Mr Payne formed the belief that the plaintiff was a fugitive from justice and that he had gone overseas to avoid investigation into the appropriation of the missing funds. Mr Payne believed that it was likely that the plaintiff was involved in the misappropriation. This belief arose, at least in part, from his having been told that the plaintiff was a suspect, and from his awareness that the plaintiff was a director of Bishopsgate. 57 I accept what Mr Payne said in this respect but it is one matter only relevant to the issue and is not conclusive. Mr Payne also said that he made further inquiries in relation to the plaintiff, but that these yielded no information. 58 Counsel for the defendants has argued that, in the circumstances, their conduct was reasonable. In particular he pointed to four factual matters, each of which he contended was otherwise shown to be objectively correct, which formed the basis for Mr Payne's belief that the plaintiff was a fugitive from justice. These were:

(i) that the plaintiff was a director of Bishopsgate; (ii) that a large sum of money was missing from Bishopsgate; (iii) that the plaintiff "went missing"; (iv) that Interpol had been alerted to find the plaintiff. 59 Except for the third, these facts are, as contended by counsel, uncontroversial. It is true that the plaintiff was out of the country, and apparently uncontactable, but the expression "went missing" is rather loaded. There was a great deal of evidence from the plaintiff about the circumstances in which he went overseas, and the timing of his travel, that, if accepted, would show that his travel was innocent and coincidental. I do not think it is necessary to reach a firm conclusion on whether the plaintiff's overseas travel, or its timing, were suspicious to such an extent as to warrant a conclusion that he was a fugitive from justice. That issue was disposed of by the jury's rejection of the contention that the imputation was substantially true. The present question is whether, in 1983, Mr Payne made appropriate, and sufficiently extensive and comprehensive, inquiries in that regard. 60 This matter came to trial sixteen years after the publications. Mr Payne's evidence of the inquiries he made was largely based upon what his usual procedure had been. 61 His evidence that he would, in the normal course, have made other inquiries but that he had concluded that further inquiries would be fruitless, is quite unsatisfactory. This is an issue on which the defendants bear the onus. Mr Payne said that he had not retained any of his notes or records and had no recollection of such inquiries and was relying on his "normal procedure" to support the evidence he gave. His recollection, unsurprisingly after sixteen years, was very limited. What is more surprising is that Mr Payne said that he had only learned of the hearing of these matters a few weeks before being called to give evidence. He had no recollection that he had previously been made aware of the commencement of proceedings by the plaintiff. I infer from this, and from the absence of any statement made by Mr Payne in 1983 or shortly thereafter, that he was not asked, at a time when his recollection could have been expected to be better, to record the inquiries he had made, or even to preserve his contemporaneous notes and records. The statement of claim was filed in 1983, and, presumably, served shortly thereafter. 62 The absence of detailed evidence as to inquiries made by Mr Payne cannot assist the defendants in the discharge of the onus of proof they bear on this matter. The strongest point in their favour in this regard lies in the absence of evidence adduced by the plaintiff as to what information might have been revealed if appropriate inquiries had been made. But that merely balances the absence of evidence from the defendants as to what inquiries were in fact made, and it does not affect the discharge of the burden of proof. I am unable to conclude that the first defendant did act reasonably in the circumstances. In reaching this conclusion I do not overlook the realities of life facing the news media (especially weekly publications) and the limited lifespan of news. But these are commercial considerations and do not override the need for mass media publications to take reasonable care to avoid damage to the reputations of those of whom they publish. I am of the view that here, the story about Stathopoulos and his personal history was of great interest, and the main focus, of the article; and that suspicion of his guilt was so great that assumptions about the plaintiff were made without adequate consideration being given to the evidence to support those assumptions. The publication of an imputation as serious as this demanded that separate consideration be given to the evidence that supported the imputations against the plaintiff. Instead, the plaintiff was swept up in the wave of compelling and dramatic information about Stathopoulos, and was not given the separate and independent consideration to which he was entitled. 63 I reject the defence under s 22 in relation to the Sun Herald imputation.

The BRW publication 64 The BRW article was headed, simply, "Bishopsgate!", and had a sub heading "$19 million is missing and the insurance and property industries are in shock." Authorship was attributed to Jefferson Penberthy, Ross Greenwood and Ivor Ries. Mr Penberthy was also the editor of BRW at the time of publication. Mr Ries and Mr Penberthy gave evidence. Mr Penberthy took primary responsibility as the main author of the article, and also, as editor, responsibility for co-ordination of the various contributions. The article opened with the following sentence: "On Tuesday the Sydney office of Andrew Stathis, one of the two $19 million bolters from Bishopsgate Insurance Australia Limited, looked like it had just been done over by the Beagle Boys."

The following (non consecutive) passages are also material: "They stopped work immediately they heard that Bishopsgate had been put into provisional liquidation on Monday, and that the Greek, former exclusive Cranbrook public schoolboy Stathis, and his partner, medical practitioner and racehorse owner Dr Enn Vilo, had fled the country. Interpol was trying to check reports that they had flown, separately, last week to Japan. … Vilo, an Estonian general practitioner of exclusive Woollahra, had also called his medical partner of ten years, Dr Kilner Brazier (sic), back from the NSW snowfields on Thursday evening, calmly telling him that he had to 'go overseas on business'. … By last Monday, when it became clear that both Vilo and Stathis had left the country, the two-non executive directors of Bishopsgate Insurance, chairman Ken Doyle, an executive of the Reed Stenhouse insurance brokers group, and Campbell Gorrie, a partner of commodity brokers Richardson Mann Corporation - 25 percent owned by Stathis - went to the NSW Corporate Affairs Commission to lodge a complaint about Bishopsgate's affairs. … The deputy commissioner in charge of investigations at the Victorian CAC, Patrick Whitehouse, said on Wednesday morning: 'I got a rumour on Monday, after a complaint had been lodged in NSW. I do not know the nature of the securities that are missing, but I can only assume at this stage that they can be readily cashed. On the fact of it, it looks like a straight case of company assets being taken. … Dr Vilo is also in his mid thirties. His medical partner said that he ran his practice quietly. 'He was conservative, not flamboyant at all, and thoroughly honourable in all his business dealings ', Dr Brazier (sic) said. Dr Vilo has a wife and three children. His partner said that he never talked about horse racing, but owned an interest in the racehorse Chief Executive. Dr Brazier (sic) said he did not have much social contact with Dr Vilo, and their relationship was purely professional." 65 No other defence having succeeded in relation to this publication it is necessary to consider the s 22 question of reasonableness in respect to each of the three imputations. 66 Mr Penberthy, who was then newly appointed as editor of BRW, and who had previously been engaged for the journal as a writer, received the first information about the Bishopsgate collapse. This occurred at a time close to the deadline for the next issue of the journal. For that reason, he organised the team of journalists mentioned, and allocated the tasks to each of them. Mr Penberthy believed that he had written the first 95 percent of the article but he thought that the last five or six paragraphs were not his style and that they were probably written by Mr Ries. None of the passages extracted above is contained in the last five or six paragraphs. It may therefore be taken that Mr Penberthy was most likely the author of all of the relevant passages in the publication. 67 Mr Penberthy said that, on his recollection, Mr Greenwood had attempted to contact the plaintiff, through his wife at his home number and also at his medical practice. He said they were unsuccessful in that, but were able to speak to the plaintiff's medical partner, Dr Brasier. Mr Penberthy said that he himself attempted to ascertain the plaintiff's whereabouts and became aware that he was out of the country. 68 Some of the information on which he based the article was derived from reports of court proceedings that took place in the Victorian Supreme Court on August 9; some was conveyed to him by Mr Whitehouse, who was employed at the Victorian Corporate Affairs Commission. Mr Ries was despatched to search records of the NSW Corporate Affairs Commission; Mr Greenwood to Bishopsgate's offices. 69 Mr Penberthy said that Dr Brasier had told one of the team of journalists that the plaintiff had "left the country at short notice to go overseas on business". 70 In his attempt to trace the plaintiff Mr Penberthy and his associates contacted the NSW Corporate Affairs Commission, the Victorian Corporate Affairs Commission, the Victorian Fraud Squad, the Australian Federal Police and Interpol. Having heard that the plaintiff was in Hong Kong, Mr Penberthy phoned two major hotels, both of which advised that they had no booking in the plaintiff's name. 71 Mr Penberthy was asked, in his examination in chief, if he held any belief, at the time of publication, as to whether the plaintiff was a fugitive from justice. He said that he did. When asked what that belief was, he gave a lengthy answer which I reproduce from the transcript: "I believed that he had left the country unexpectedly in circumstances that were remarkably coincidental with the departure of Mr Stathis, in circumstances that took his partner in the medical practice by surprise, that Dr Brasier had said to us that he didn't know, he had said that he was, had called Dr Brasier back from the snow fields unexpectedly to deal with business overseas and that it was unknown that he had business interests overseas, that there was a degree of disruption in the office at the medical practice, staff were upset. Then, there was the fact that Interpol had been alerted to look for both, to watch for both Dr Vilo and Mr Stathis and in this period it also became stated that Dr Vilo's wife, I think Mrs Carol Vilo, had said that he was in Hong Kong and I believe at the Regent Hotel and he was not there, not in places where he was expected to be." (T 540) 72 He added that he believed that any reasonable person in the plaintiff's position, if he were abroad innocently, would, in the circumstances, have returned immediately to Australia. 73 Following these rather lengthy answers, and in response to a repeated question about his belief as to the plaintiff's status, Mr Penberthy said explicitly that he did believe that the plaintiff was a fugitive from justice and that this was a conclusion drawn from the facts he had outlined. 74 Mr Penberthy also said that he believed that the plaintiff had been a party to the misappropriation of funds. He referred to the same factual matters, and the plaintiff's role as one of two executive directors, both of whom were missing, as the basis for this belief. Mr Ries also gave evidence that he believed that the plaintiff and Stathis were fugitives from justice. His reason for this belief was that $19 million was missing from the company's funds, and the two directors who were in control of the funds were also missing. Mr Ries also believed that the plaintiff had appropriated funds from Bishopsgate, and this was for essentially the same reasons. 75 The effect of the evidence given by Messrs Penberthy and Ries was that the information about what had happened in Bishopsgate came at a time shortly before the deadline for the publication of BRW. I have no doubt that they compiled the story under considerable pressure. I accept that a journal such as BRW would have expected, and would have been expected by its readers, to publish a report of the collapse of an insurance company. They had very limited time, if they were to publish anything about these events, to marshal the information. I accept both as truthful witnesses, and I accept that they and Mr Greenwood made as many inquiries, and gathered as much information, as they could, in the time available to them. But the question is not whether they acted with due diligence in the time available to them between learning of the Bishopsgate collapse and their deadline for publication; the question is whether, the time available having been so limited, and their inquiries having been constrained in that way, it was reasonable to publish what they published; further, the question is not as broad as whether it was reasonable to publish an article about the collapse of Bishopsgate; it is whether their conduct in publishing the particular imputations was reasonable in the circumstances. It is apparent that Mr Penberthy in particular drew inferences which seemed to him at the time to be reasonable, from the factual information that he had. On those limited facts, the inferences he drew are hardly surprising. But did he have enough facts to justify drawing any inferences? 76 The reasonableness of the defendants' conduct cannot be evaluated in isolation from the gravity of the imputations which they published. To publish of an otherwise respected member of the community that he is a fugitive from justice is to publish a very serious accusation. So also is to publish the accusations of misappropriation of Bishopsgate's funds. 77 Mr Penberthy agreed that, because of the time constraints, he had "cut a few corners". He agreed that he had not included in the article certain material available to him which cast a more favourable light upon the plaintiff. For example, he agreed that Dr Brasier had expressed confidence that the plaintiff would return to Australia, and he agreed that it would have been better if that had been included, and that it would have gone some way to ameliorating the impact of the defamatory imputations contained in the article. 78 It was also suggested to him that the inclusion of seemingly irrelevant information, such as the fact that the plaintiff was of Estonian origin, and was (in fact, had been) a race horse owner were subtle ways of creating additional prejudice against the plaintiff and strengthening the adverse inferences a reader might draw, and that this goes to the assessment of reasonableness. 79 There had been references earlier in the article to Stathopoulos' gambling habits; he was described as "an unnamed big time punter" and it was asserted that he had failed to turn up to meet a Sydney bookmaker to settle gambling debts, or to attend "his usual high stakes Friday night poker game". In these circumstances the description of the plaintiff as a race horse owner had the capacity to link the plaintiff more closely with the aspersions the article cast upon Stathopoulos. It was a gratuitous piece of information, and indeed, it was inaccurate, the plaintiff having formerly had an interest in a racehorse. No doubt this piece of information was included for the purpose of adding some colour and human interest to the story, which was relatively sparse in detail about the plaintiff. In a subtle way, it was likely to have coloured the impression of the plaintiff created by the article. Other than that, it added nothing. 80 I think it is less clear that the description of the plaintiff as of Estonian origin could be said to have coloured the article in such a way as to create prejudice against the plaintiff, but that fact, too was of little relevance. 81 The shortness of the time available to the defendants to marshal their facts is not, in the present circumstances, a relevant consideration. While I appreciate the commercial desirability, or even perceived need, to publish a news item whilst it remains of current interest, shortness of time to establish relevant facts does not justify the publication of defamatory untrue statements. The defendants had available to them an option; they could have withheld publication until they were in a position to make all appropriate inquiries. Another alternative was to delete those passages which contained the defamatory imputations, and of which they had insufficient concrete supporting information. 82 I have earlier mentioned that the result of the s 22 defence may be different in relation to different imputations; that is, it may be that a defendant is able to establish reasonableness of conduct in relation to the publication of one imputation, but not others. I have considered whether there is any difference in relation to the different of the imputations published in BRW, and the reasonableness of the defendants' conduct, and I do not discern any. I am not satisfied that the defendants have established that their conduct was reasonable in the circumstances. I reject the defence of qualified privilege.

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Judgment (23 paragraphs)

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Cases Cited (7)