Chakravati v Advertiser Newspapers Ltd A41/1996 [1997] HCATrans 267 (2 September 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A41 of 1996

B e t w e e n -

MANOBENDRO CHAKRAVARTI

Appellant

and

ADVERTISER NEWSPAPERS LIMITED

Respondent

BRENNAN CJ

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON TUESDAY, 2 SEPTEMBER 1997, AT 10.04 AM

(Continued from 1/9/97)

Copyright in the High Court of Australia

BRENNAN CJ: Mr Gray.

MR GRAY: Could I shortly address the matter your Honour the Chief Justice pointed up about the words in brackets appearing in the first of the letters. It is at page 862 of volume 4. The proviso to section 7 speaks of:

a reasonable letter.....by way of contradiction or explanation of such report.

When one looks at the first article and looks at the way that it is presented, the first article presents the matter in at least two ways. It presents what Mr Simmons said to Mr Bannon, so part of it is Mr Simmons' reporting to the royal commissioner what he had told Mr Bannon, but there are a number of instances of Mr Simmons directly answering Mr Jacobs' questions, for example, in the third, fourth and fifth columns where Mr Jacobs puts questions to Mr Simmons and Mr Simmons responds, in particular when he is dealing with matters of difference of opinion with the board.

So that from Mr Chakravarti's point of view he faced an article that he said was wrong in at least three aspects: first of all, it was wrong in regard to the underlying allegations of fact that he had been involved in some form of misconduct; secondly, when it was suggesting that Mr Simmons had reported to Mr Jacobs that he had implicated Mr Chakravarti to the Premier; thirdly, in so far as Mr Simmons answered questions directly to the royal commissioner, he is saying it is wrong in that Mr Simmons did not implicate Mr Chakravarti when he was directly answering Mr Jacobs' questions.

So the letter of contradiction or explanation needed to go to all three matters to fairly put Mr Chakravarti's position, because Mr Chakravarti had spoken to the solicitor, had been and viewed the transcript and his belief was, as he stated in his letter, that Mr Simmons had not named him in regard to these matters, had not named in either to Mr Bannon or when he reported it through to Mr Jacobs or directly to Mr Jacobs. That is the explanation for what appears in the brackets, that he was seeking to deal directly with the matters to the royal commissioner. In the circumstances it was justified, in particular, taking an example, in the third column, the second paragraph, it reports:

Mr Jacobs: "The fact was, to put it in its blandest form, there had been a difference of opinion between the board and these officers as to their conduct."

Mr Simmons: "Yes."

When one goes back to the evidence it is very clear that Mr Jacobs was referring only to Baker and Reichert, whereas the way it is put in this article it is a reference to the four. That was Mr Chakravarti's complaint: "You have reported this as though Mr Simmons was telling the royal commissioner that I was involved." But if you go to the transcript he is not saying that. Could I make that point good, if the Court pleases, by reference to the transcript. Just to explain what had happened - - -

BRENNAN CJ: I think that point has already been made. I am afraid my difficulties are a somewhat difference one, and it is this, that the statute operates upon the hypothesis of a fair and accurate report So that absent fairness or accuracy in the report the section simply does not apply. So that if one is given a fair and accurate report then there is no occasion for any letter objecting to the fairness or accuracy of the report. So if the letter contains an attack upon the fairness or accuracy of the report, that is not the kind of response to which the subsection then applies.

MR GRAY: Yes. If the Court pleases, we would say that in a circumstance where there is going to be a debate about the fairness and accuracy of a report, it is not unreasonable for the letter of explanation or contradiction to make that clear.

BRENNAN CJ: Yes, that may be so.

MR GRAY: The press is well able to protect itself by rejoinder. It does not make it unreasonable for a person to protect themselves by saying, "I do not say this is fair and accurate but if it is, here is my explanation." In other words, he should not be bound to have to accept the fairness and accuracy in his letter, he should be able to protect himself by that reservation, and that is all he has done.

BRENNAN CJ: Take a starker example in this: let us assume that the article had stopped at the point where the question and answer which was under challenge had been reported and reported accurately according to the reporter's recollection of the answer "Yes" being given; let us assume that the letter then contained that third paragraph. Would the newspaper be required, in order to gain the advantage of a protection of the section, to print the letter contradicting the truth of what the reporter had heard?

MR GRAY: If the circumstance was that there might fairly be a difference of opinion about whether the answer was given or not and the newspaper was faced with Mr Chakravarti saying, "I believe an answer was not given", then that should be published. All he has spoken of is his belief, he has not asserted it is a categoric fact, he has stopped short of that. If the newspaper editor is faced with his report on the one hand asserting an answer was given, on the other hand recognising that there was possibly another view and was faced with a letter which said, "In my belief the other view is correct," then there would be no occasion for the newspaper not to publish.

If on the other hand Mr Chakravarti was asserting there was no answer categorically that might be a different case. But here the words are simply "I believe," and that was true; plainly, that statement was true. The statement in the letter was a true and accurate statement that was Mr Chakravarti's belief. One could go further and say in this case it was a reasonable belief, and one can go further still and say that any independent observer of the facts would view that as a reasonable belief on that day. That is why we say we have this particular letter - move away from your Honour's starker example - we have this particular letter; this letter was reasonable in the circumstances. I do not know that I can further advance that point.

Your Honour Justice Gaudron raised a question about the Canadian case of Nowlan. I think copies have been made available; we have had that copy extracted overnight. On the point of the reasonable letter, the Canadian statute in question is essentially in the same terms. It is at the foot of page 808 that one finds it set out, section 3(2) of the Libel Act. Ultimately the court finds the letter was not reasonable; but it is purely a matter of fact in the circumstances and it does not help in regard to points of principle.

What had happened there was that there had been a report to a health board about some bacteria in milk, and the reporting sanitary engineer had reported of an incidence over a discrete period of time, and the letter in response sought to speak of the statistics over a longer period of time and in a sense water down the effect of the gravamen of the incidence, and it was held it was unreasonable to do that because it would be misleading. The fact of it was there was a significance over a discrete and temporary period and to offer a letter of explanation saying, but over a longer period one sees the incidence to be less significant was not, the Canadian court thought, to be reasonable.

The second aspect of it was that the letter went on to say that Mr Nowlan had always carried out every requirement of the sanitary engineer. But when goes to the report itself, the report itself did not complain or defame him by saying he did not attend to requests. So, as a matter of fact, the Canadian court, both at first instance and on appeal, held that the letter was unreasonable. So the case does not help on the points of principle, it is simply a factual application on discrete facts; but the authority is provided as being one of the two authorities that we can find touching the point.

KIRBY J: Have you found any authority where it was found to be reasonable?

MR GRAY: No, none that we can find.

KIRBY J: It does not seem as though this statutory provision has had a lot to do.

MR GRAY: No, not as far as the courts are concerned. Your Honour Justice Gummow made an inquiry about the reports of the decisions below. The decision of Justice Cox is reported. It is 181 Law Society Judgment Schemes page 218. Your Honour Justice McHugh, in the discussion concerning Polly Pec,k referred to a case of McGrath v Black. We would say that that case does not really help in regard to the current debate. That was really a case about a warning to a plaintiff: "If you plead your false innuendo or your innuendo too widely, then you might draw a very wide case on justification." It was really a warning about plaintiffs who seek to go too broadly in their plea, and as such we say that discussion is not really helpful in regard to the case at bar.

In regard to Polly Peck can I just, having reflected the matter overnight, put this submission to your Honours. In a statutory scheme such as New South Wales where the plaintiff must plead and is bound by each and every imputation or meaning he puts forward, and the defendant then has to face that and no other case, then there really is no occasion for allowing the defence to plead some other imputation to justify that; it is simply not relevant. Either the plaintiff fails or succeeds on the pleaded imputation, and the defendant either justifies, if it wishes to, the imputation as pleaded. The occasion does not arise for the Polly Peck position at all; it just has no work to do at all. If one leaves the statutory regime and goes simply to common law regimes, one finds consistently that there, in the case of natural and ordinary meaning, there is no obligation on the plaintiff to do other than set out the words. That is the obligation of the - - -

McHUGH J: I am not sure that Lord Devlin was prepared to go that far in Lewis v Daily Telegraph. He did not decide it but everything he said was in favour of a requirement that it should be pleaded.

MR GRAY: Yes. Certainly that does not accord with the practice of the various courts in the other States of Australia, the United Kingdom or Canada; there is not a requirement to plead the false innuendo.

McHUGH J: That may be because people just do it automatically these days. I mean, in the last 25 years I cannot recollect seeing any reported case of defamation where a plaintiff has not pleaded a false innuendo.

MR GRAY: We would accept it has become common practice.

GUMMOW J: What Lord Devlin said, page 282 of 1964 Appeal Cases, was that it was distinct meanings that should be pleaded. You do not cavil with that, do you?

MR GRAY: If the - - -

GUMMOW J: The reason he advanced was bound up with justification.

MR GRAY: We would say that if one is putting a case simply that these words are defamatory as one reads them, the plaintiff is able to simply rely on the words and not ascribe any meaning. If, on the other hand, there is something special then he must plead it and it becomes a true innuendo. There must be something - - -

McHUGH J: As Justice Gummow put to you yesterday - and Lord Devlin supports this in Lewis - that the real test as to what meaning you can rely on is whether or not it would require a different defence of justification. So if you have a meaning which would - you can rely on any meaning that a defence of justification to your pleaded meaning would cover; but if you have got to rely on - or if the defendant would have to plead other facts, then you cannot.

MR GRAY: Yes, but the difficulty that the Court faces when the obligation on the plaintiff is just to, and no more than, set out the words in a natural and ordinary meaning case, and the defendant faces a possible range of imputations from the most serious to the lesser, then the Court took the view that it was only fair to allow the defence the opportunity to identify what imputation they said did arise and justify it if they wished. So the rationale of Polly Peck was one of procedural fairness arising in an environment where the plaintiff did not have to plead false innuendos.

McHUGH J: Yes, but unfortunately the plaintiff had pleaded an innuendo in Polly Peck, and what the Court did was allow the defendant to justify another innuendo which the plaintiff had not pleaded.

MR GRAY: But that was because there was a risk from the defendant's point of view that the Court might find some other imputation than that pleaded by the plaintiff. So to protect the defendant against that possibility one has the Polly Peck - - -

McHUGH J: If you had applied Lord Devlin's test the question would never have arisen.

MR GRAY: With respect, that does not, we would say, represent the common law view and that - - -

GUMMOW J: It does not represent the view of the English Court of Appeal. It was certainly audacious of the English Court of Appeal, I would have thought, not to have mentioned Lord Devlin if it had been cited to them. One only assumes it was not cited to them.

MR GRAY: Yes. It certainly does not represent the position, for example, in Victoria where, in the case I took the Court to yesterday, that history is set out, and it is said in the plainest of terms that this is a very advantageous matter, the printing of false innuendo, because it helps the parties to come to the point. But the finders of fact remain in the position to say what they say it means regardless of what either party asserts to be the meaning. To put it another way, at the end of the day the finder of fact will look at the words and say what the ordinary meaning is and it will not be circumscribed by contentions of either party that it finds artificial.

McHUGH J: At this stage in the defamation practice of any jurisdiction I would have thought that if a plaintiff did not plead an innuendo that the high probability would be, except in a very clear case, that a court would hold that the fair trial of the action would be embarrassed and require the plaintiff to plead an innuendo, and then the plaintiff would be confined to that innuendo, or the substance of it, subject to any further application for the reader.

MR GRAY: Yes. With respect, as far as the Rules of the Supreme Court of South Australia are concerned, it is Rule 46.19 and it does not require the pleading of false innuendos. According to the rules of - - -

GUMMOW J: Have you got that the text of that rule in the material?

MR GRAY: I will have it obtained, if the Court pleases, and provide it.

McHUGH J: I take it that the South Australian Supreme Court has got a rule which enables a party to strike out a plea on the basis that it will prejudice the fair trial of the action.

MR GRAY: Yes, that will be within the - I do not know if it is specific, but it is certainly within the inherent jurisdiction of the Court. Obviously the Court can, to ensure procedural fairness, craft such orders as are appropriate, and we accept that. If the Court pleases, in terms of the conducting of this trial one would say this trial was conducted according to the procedure of the day, and the procedure of the day was, there is no need to plead a false innuendo; if you do, we say, on the wealth of authority, you are entitled to rely on a lesser meaning. Pritchard v Krantz, in the passage we have quoted from Chief Justice King, says just that. Chief Justice King does then go on to say, of course, there is the brake of procedural fairness that the Court can apply.

The point of coming back to this topic was to put the submission to the Court that the Polly Peck defence position is really only there because the courts are recognising that the plaintiff is not bound by the pleaded imputation. That is the rationale why it is there, and - - -

BRENNAN CJ: That must be so, must it not? If you start off with the proposition that a tort has been committed by the publication of specific words and the words are pleaded in a form which raises on the plaintiff's part a cause of action, certainly, from that point onwards, it is all a matter of procedure, it has to be, otherwise procedure governs the substance.

MR GRAY: Yes. We respectfully adopt that and say that is the rationale behind Polly Peck; it is a procedural practical matter that has been done to effect procedural justice, given that starting point.

McHUGH J: I do not want to pursue this for much longer, but I just cannot follow where the question of procedural fairness comes in, except on the hypothesis that the jury and the plaintiff can depart substantially from the pleaded meaning.

MR GRAY: Yes. That is what causes the imbalance that led to Polly Peck, and it will not arise in New South Wales, for example, because the statutory scheme - - -

McHUGH J: But even on that hypothesis, you have got a case that somewhere out there the defendant says, "Well, that is the meaning and I am justifying it." Nobody knows. The jury is never going to tell what it found, and the plaintiff is not alleging it, and the trial judge is not alleging it, and yet it is out there somewhere.

MR GRAY: But that is addressed specifically in the passage in the Victorian Full Court decision when the court there explains that at a practical level it just does not happen that way, because the plaintiff is keen to have those attending to its case knowing what its case is and what it is saying, and it is only a rare event that one would have this arise; in practice it does not happen. The other alternative is if one requires the - - -

McHUGH J: But if that is the case and if the defendant's plea of justification does not meet the plaintiff's case, what is it doing? It is just clouding up the record.

MR GRAY: The answer is it might in a particular extreme case but normally it will not. At a pragmatic level, as a matter of practice and procedure, it works - - -

McHUGH J: I mean, this question at trial by ambush was struck in New South Wales again and again in the days before the 1974 Act. The defendants did not know what they had to justify. They would go to trial with a great deal of material and it just may become totally irrelevant.

MR GRAY: One of the difficulties of compelling the plea and imputations is that the plaintiff then will put every possible alternative thing that might arise, so that it covers every possibility and then immediately you have a whole lot of what become essentially non-issues coming forward.

McHUGH J: I understand that.

MR GRAY: So it cuts both ways. If I could move on with the argument. My learned friends in regard to the provisos say this, that if they did face a non-application of section 7 because of the proviso it does not matter, they have still got available to them the common law privilege of fair and accurate reporting in regard to royal commission proceedings, and at common law a reasonable letter was not required. We say that argument cannot be sustained, and I want to just address it briefly. At page 15 of our outline, footnote 91, we address the matter, in particular quote from Justice Cox, when he said that this would be a very curious result if - because it would in effect render nugatory the whole of the effect of the proviso. What is the point of having the proviso and the statute if you have got a wider right of common law? The reason why the argument arises is because of - - -

McHUGH J: Your argument is it just simply repeals the common law.

MR GRAY: If that was the common law. We put the argument two way: that if there was a common law that would be appealed; the other argument is that that was not the common law position. In the text that we put - - -

McHUGH J: There was a common law defence of fair report.

MR GRAY: But not in regard to - - -

McHUGH J: Royal commissions.

MR GRAY: It arose in regard to - - -

McHUGH J: Court proceedings.

MR GRAY: Court proceedings and Parliament, where essentially it arose historically because there was absolute privilege there and it was thought that if there was an extract or an abstract of that in a paper it should also be privileged. That is how it arose. If one has regard to the book of historical material provided yesterday, and in particular to Odgers, the Court will find there a very useful treatment of the commentator at the time, and it is made quite plain in that book that there was no other common law privilege other than that which I have described. So they are the two reasons why we say that argument would not succeed.

McHUGH J: I think Justice Brennan's judgment in Stephens might lend some support to the view that it would be an existing common law defence. That was a.....judgment - sorry, Justice Brennan.

MR GRAY: That might be so now, but the question is what was the position in 1895? Because the statute is - the third proviso uses the words, "now by law existing". That is the 1895 - - -

McHUGH J: Yes, but it depends on what your theory of the common law is, but on one theory that always was the common law.

MR GRAY: Yes. We - - -

BRENNAN CJ: On the other theory it never was the common law and has now been unanimously declared not to have been the common law.

MR GRAY: We would like to put - we do put the submission that Parliament when it used the words "now by law existing" did not intend to include what might become the common law by reason of some later court decision; it was talking about the law as it existed on that day, as known on that day. So that what might have developed after 1895 is not relevant in this respect. There was one other, perhaps, authority - I will just provide the reference - to getting to this question of absolute privilege. It is the Royal Aquarium Society - - -

McHUGH J: Absolute privilege or qualified?

MR GRAY: Absolute privilege. Royal Aquarium Society v Parkinson (1892) 1 QB 431. I do not propose to read from it. We provide the reference, as we say, and other supporting text in regard to why it is that there would not be a fair and accurate privilege in regard to meetings, because - - -

McHUGH J: But they are two different things. I mean Royal Aquarium says there is no absolute privilege in relation to statements made during the course of a meeting of the London County Council, whatever it was, but now we are talking about a report of the proceedings, which is a different matter.

MR GRAY: Yes. We accept that. The line of reasoning is that - this is in 1892, so it is at about the time that absolute privilege was to be restricted and was not to extend to meetings and was to be restricted, for good reason, to judicial proceedings and Parliament. It follows from that that in the judge's mind at the time there was no question of there being a fair and accurate report privilege in regards to other types of activities that would not even be the subject of absolute privilege at the prime level; a fortiori there would not be a fair and accurate report privilege in regard to a newspaper reporting a public meeting.

McHUGH J: I think just shortly after that there was a decision that there was a defence of a fair report of a meeting of the General Medical Council.

MR GRAY: A question as to the application of qualified privilege, and one has to be very careful then on the facts, but it is really what one then talks about as a question of duty in qualified privilege. In this area we are talking about something that has developed from in effect what was seen to be the public interest in the publication of an extract or abstract of something absolutely privileged. The particular passage is at page 447, and in particular in the judgment of Lord Justice Fry saying that it would be going too far to apply privilege to:

assessment committees, boards of guardians, to the Inns of Court when considering the conduct of one of their members, to the General Medical Council -

So we say in terms of setting the scene as to what was by law now existing in 1895 one can draw from that case a very clear view that absolute privilege was confined and did not extend to such meetings and hence a fortiori a fair and accurate report would not be available. That is the line of reasoning we take from the Royal Aquarium Case.

If the Court pleases, could I move back then to the other points about fair and accurate reporting. Your Honours, I now take you to page 9 of the outline and the first point we make in the written text. This involves a question of construction again of section 7, and in particular it is only a fair and accurate report that is privileged. Our submission is that the report must, as a whole, be fair and accurate, and that one does not say that part of the report is privileged because part of it is fair and accurate and that that which is accurate is only the part that is not fairly or accurately reported.

McHUGH J: But fair and accurate in respect of whom, the plaintiff, or anybody, or everybody? Supposing it is fair and accurate in respect of a plaintiff but not fair in accurate in respect of somebody else?

MR GRAY: We would say that the test is clear; it must be a fair and accurate report in its entirety, in every material respect, because the rationale behind it is that the newspaper is getting a protection because it is in the public interest that it can pick up and report in effect an extract or an abstract accurately and fairly, and if it departs from that it is not entitled to privilege. It is really a derivative matter; that the public interest is being protected is the dissemination of information that is otherwise - it is proper for the public to hear but only if it is fairly and accurately dealt with. Hence we would put it that any material inaccuracy would preclude the report meeting the qualification of fair and accurate. So at that level we would put it that broadly.

Turning to the instant case, of course, the material unfairness that we refer to does touch the plaintiff, so the wider point does not arise. As a matter of construction, to gain the advantage of this protection it obliges the newspaper to get it right. If they do not get it right, then they cannot have the protection, and hence it is not just a matter touching the plaintiff.

McHUGH J: there is no authority on this point, is there?

MR GRAY: Not that we are aware of.

BRENNAN CJ: What is the historical material to which you referred earlier? Is this the booklet?

MR GRAY: It is in the history - - -

BRENNAN CJ: It is the article by Odgers, the passage from Odgers.

MR GRAY: Page 266 in Odgers. I am sorry, it starts at the front of the book. It starts in 1881, and we have included text of the relevant Act at page 266 of Odgers. It was then the subject of an amendment in the United Kingdom in 1888, and that is the first document in this book, and that is when it takes on a form very similar to the 1895 South Australian Act. As far as - - -

BRENNAN CJ: Where do we find the derivative nature of this privilege? Is there some passage that you wish to refer us to which indicates that, or is that an inference which you have drawn from the materials?

MR GRAY: It is an inference we have drawn and it is touched on, for example, in Odgers. If the Court goes to page 266, and the author's note at the foot of 266 one finds a treatment of what led to the 1881 Act, and we draw on that, as a matter of history:

The above section was passed because it was considered that the common law pressed too severely upon newspaper editors and proprietors, who in the ordinary course of their business had presented to the public a full, true, and impartial account of what really took place at a public meeting, considering no doubt that thereby they were merely doing their duty, and then found that the law deemed them guilty of libel.

McHUGH J: But if you look at it, history is against you, is it not, because the statute extends the common law, and the common law defence of qualified privilege, in terms of a fair report, was developed as a defence to a plaintiff's action. A plaintiff sued on something that was said in court and it was said, "Your case fails because it is a fair and accurate report of the proceedings." So it was developed as an answer to the plaintiff's case. It is true that the statute has expanded that common law defence so that you get things like public meetings, royal commissions and so on covered by fair and accurate reports. Why is not the thesis still the same, namely that it is designed to give the defendant a defence against the plaintiff's claim? As long as you can show that what you have published is a fair and accurate report concerning him or her then you have the defence, as opposed to your public interest thesis that you have put forward, which I understand and which has got some force.

MR GRAY: We would put it this way: that there was, last century, recognised there should be absolute privilege for confined matters, Parliament and courts, and it was recognised almost as early as1840 there was some statutes that allowed for abstracts and extracts of that to be published and protected, the 1840 Parliamentary Papers Act 1977 . That was clear. Then in the Royal Aquarium Case the Court - perhaps I should just pass that decision to the Court. At page 447, in the judgment of Lord Justice Fry, at the end of the first paragraph:

Wherever you find a Court in law, to that the law attaches certain privileges, among which is the immunity in question.

But this argument was used on behalf of the defendant. It was said that the existence of this immunity is based on considerations of public policy, and that, as a matter of public policy, wherever a body has to decide questions, and in so doing has to act judicially, it must be held that there is a judicial proceeding to which this immunity ought to attach. It seems to me that the sense in which the word "judicial" is used in that argument is this: it is used as meaning that the proceedings are such as ought to be conducted with the fairness and impartiality which characterize proceedings in Courts of justice, and are proper to the functions of a judge.....Consider to what lengths the doctrine would extend, if this immunity were applied to every body which is bound to decide judicially in the sense of deciding fairly and impartially. It would apply to assessment committees, boards of guardians, to the Inns of Court.....General Medical Council.....Is it necessary, on grounds of public policy, that the doctrine of immunity should be carried as far as this? I say not. I say that there is ample protection afforded in such cases by the ordinary law of privilege -

which is qualified privilege. So that is the position. Then it is seen - - -

McHUGH J: But that is talking about statements made in the course of proceedings as to whether or not you have got absolute privilege. The cases have gone well beyond Parliament and statements in the course of parliamentary proceedings or curial proceedings. I mean, they affect military tribunals. If my recollection is right, in Lincoln v Daniels. It was held the same in relation to the Inns of Court 1962. And there are others. We dealt with this, to some extent, in Arnold v Mann, a decision we handed down a fortnight or so ago, on absolute privilege.

KIRBY J: Mann v O'Neill.

McHUGH J: I am sorry, Mann v O'Neill.

MR GRAY: We would put it this way, that in 1892 Lord Justice Fry could not have been thinking that there would be a defence of fair and accurate report of a public meeting when he was saying it was not a case of absolute privilege, it is only a case of qualified privilege arising out of duty. What the learned author in Odgers is saying, in this history here, is that Parliament thought that the current law, which did not protect newspapers, was too severe. They would do this out of what they saw as public duty and yet they would front as guilty of libel.

McHUGH J: But I am not so sure that these justices would not have said, even at that stage, that a fair and accurate report of the proceedings of the London County Council, published for the people of London, was not subject to qualified privilege. That is the thesis of Justice Brennan's judgment in Stephens' Case.

MR GRAY: We would put it that if one goes to 266 of Odgers, it sets out the 1881 Act and then there appears this sentence:

No other reports are privileged.

Then the note explains a rationale to the section, that Parliament - - -

McHUGH J: What page is that again, Mr Gray?

MR GRAY: 266 in Odgers. After the quote of the 1881 provision the next sentence:

No other reports are privileged. If any one publishes an account of the proceedings of any meeting -

There is the section, then the annotation at the foot, "The above section was passed -" because of the matter of public policy. It was thought that newspapers that would report these matters in the public interest would be guilty of libel. So as a matter of public interest, public duty, the statute was passed, and out of that grew this defence. It always a - it very quickly came with a price, and the price of course was the reasonable letter. There had to be - - -

BRENNAN CJ: If one looks at the 1881 Act it is not conditioned, or the defence is not conditioned simply on fairness and accuracy, is it? It has got to be "published without malice" and the publication has got to be for the "public benefit".

MR GRAY: Yes, and it is the same with the current Act. If one goes to - - -

BRENNAN CJ: Does that suggest that it is, as it were, an extension of the absolute privilege of Parliament and the courts, or is it rather an indication that this was seen as extending to these reports the same character as an occasion of qualified privilege and therefore to be construed in terms of its effect upon the plaintiff?

MR GRAY: On its words the matter is quite equivocal; it could mean either. The learned author here has in his commentary picked up a concept of duty, public interest, but equally one could - - -

BRENNAN CJ: That is the foundation, is it not, of the qualified privilege concept?

McHUGH J: But also the words "without malice" strongly suggest that one is not looking at qualified privilege, and malice concerning the plaintiff, not somebody else out there.

MR GRAY: If one looks at it in terms of the Parliamentary Papers Act of 1840, that also included when dealing with Parliament and absolute privilege, the statement about no malice. So historically the no malice, in the historical context, was also applied when they dealt with absolute privilege and on publications.

McHUGH J: Yes, but I am not sure that your argument is not running together two concepts. One is statements in the course of proceedings, be it Parliament, the courts or some other tribunal. They have frequently been held to be the subject of absolute privilege. The other question is, what protection is a report of those statements in those proceedings entitled to? That is qualified protection at common law, extended by the statute, and the real question seems to me is the statute merely an historical development or a statutory development of the common law or is it, as you argue, a protection given to newspapers because they are doing something in the public interest and therefore they have got to get it right, generally? So if they report the meeting inaccurately then the defence fails.

MR GRAY: If the Court pleases, we have deliberately chosen of course the comments of an author at the time. This is Odgers, I think, writing in the 1890s, dealing with it at the time in a contemporaneous way. The Court in those circumstances, as a matter of history, would obviously give great weight to that annotation. He then, after that annotation at 267 through to 268, provides some illustrations. First there is Purcell's Case dealing with the matter in a pre-statute and public interest, no privilege, and then gives some other examples to the same effect.

If the Court pleases, it is a matter of history. We put the submission we do and we base it on the contemporaneous text from one of the most respected authors in this area at the time, and we would say that that forms a very clear foundation. In so far as the Court has put the matter of malice, we draw attention to the fact that that there was in the 1840 Parliamentary Papers Act as a necessary condition before one could get protection on publication of an extract from a parliamentary judicial process. Again, if the Court pleases, it is not a matter that we can further usefully advance.

If the Court pleases, regardless of the answer to that question, in the case at bar we say the material inaccuracy went to what was said of the plaintiff, and hence on any view there was not a fair and accurate report and that the approach of the court below, that it was possible to divide this up, is wrong; either they qualify or they do not. Having failed to qualify under section 7, the whole of the defamatory utterances in the article become actionable and the subject of damage. In our outline we have set out, at paragraph 4.4, a reference in an extract from some of the authorities that deal with not section 7 but the equivalent of section 6.

If the Court could look at the Wrongs Act, we have not found cases on section 7 at all, but section 6 does, in all material respects, contain the same words, "a fair and accurate report" published by a newspaper of the proceedings before a court be privileged. The cases there have held that the fair and accurate report must be accurate as a whole. If there is any material inaccuracy the privilege under section 6 is not available, and one cannot in fact have a privilege for part of a publication under section 6 and not some other part. We say those cases apply, with respect, with full rigour to the current case.

We do, in a footnote, raise a point that section 7 refers to meetings of royal commissions, which does not really sit very well with the taking of evidence which is more akin to a judicial process than a meeting process. We just draw attention to that. There is no doubt an historical reason for that. On the face of it this process of a royal commissioner deciding to take evidence, and then taking evidence does not sit very well with this concept of a meeting. It does not sit easy with that language. We put the submission in a footnote that, as a result - - -

BRENNAN CJ: What is your submission, Mr Gray?

MR GRAY: The submission we put is that when a royal commission decides to take evidence it cannot be fairly described as a meeting, and it is as short as that.

KIRBY J: That would really give the paragraph nothing to do.

MR GRAY: No, because a royal commission can operate in a non-evidentiary taking role. There is no reason why a royal commission has to take evidence. A royal commission could conduct its entire inquiry through public meetings. I see no reason at all why - and it has become common for it to be an evidentiary/adversary-type process; but there is absolutely no reason why it should.

GUMMOW J: Was there legislation in South Australia dealing with royal commissions at the time of the enactment of section 7?

MR GRAY: Yes, there is.

GUMMOW J: Was it is in force at the time of the enactment of section 7, or were they just conducted under the prerogative?

MR GRAY: I will have to check that as to the precise date.

GUMMOW J: It might be an important point. because under the prerogative there is no compulsion to require answers, is there?

MR GRAY: No. At paragraph 4.4, if the Court pleases, we make reference to cases dealing with section 14(1)(d) of the New South Wales legislation that, as we read it, is the equivalent of section 6 of the Wrongs Act directly but also, in all material respects, equivalent to section 7. Those cases - and we have quoted, in particular in Anderson v Nationwide News from Justice Asprey, and then from Justice Hunt in the Waterhouse Case, those texts that support our submission. I do not want to labour those. The same view has been taken in Victoria by Justice Batt in the Bruton Case that we refer to at the foot of page 11, and the same position in Nowlan's Case in Canada, and also in a British Columbian case in Bennett. We urge that construction in regard to section 7, based on those authorities and, more particularly, the policy that lies behind the defence. This is a special protection for a newspaper; if they want it, they must get it right. It is not a case where they can get part protection; either they qualify or they do not.

There was one other point that we wished to deal with briefly in regard to the issue of fair and accurate, and my learned friends challenged the findings of fact below that there were material inaccuracies. Whether I do that by way of reply or in anticipation of perhaps even the Court's direction on - and I do not want undue time over it.

BRENNAN CJ: Do it in reply, Mr Gray.

MR GRAY: Thank you, your Honour. Now, could I then turn to damages? That commences at page 16. At appeal book 946 - appeal book 4 - - -

KIRBY J: You have no cross appeal on damages, you simply seek - - -

MR GRAY: Yes, we do.

KIRBY J: You do, I see.

MR GRAY: But not before this Court, as we see it. At the intermediate court level, a cross appeal was lodged in regard to the award of general damages. In the result, because the majority of the intermediate court rejected any damages for the first article and only noted damages for the second, that cross appeal has not been dealt with. Now, from our perspective, we are more than happy for this Court to deal with that cross appeal, but in our notice of appeal the order we seek formally is that, if we succeed on this appeal, the matter be remitted to the intermediate court for a consideration of our cross appeal on general damages that has not yet been dealt with. So, in that sense, to answer your Honour Justice Kirby, there is a cross appeal in regard to general damages.

The difficulty arises that when Justice Cox, at first instance, assessed general damages, he assessed them at large for the effect of both articles and then made a division between the two. But at that stage he merged his special damages in as well, and one cannot tell exactly what he has allowed for general damages in regard to the first and second article. You just cannot discern it. So, when the intermediate court refused to allow any damages for the first article, it has meant that they have not dealt with that cross appeal, other than to reject it, but having not effectively considered it.

We have prepared a spread sheet in regard to damages, because of the differing views. If I could pass that to the Court and then, perhaps, speed the process of the submission. Now, we have set out the same process of showing each judge's approach, and we have shown the differing approach on special damages and general damages and, as to special damage, the essential findings of Justice Cox were he accepted plainly the plaintiff on credit, and accepted the plaintiff's case. He found that, as a matter of causation, he lost his job at Leal Boss as a result of the publication of the first article. It is important - because Justice Williams misunderstands this - it is important to recognise that the loss of the job was between the publication of the two articles.

Then Justice Cox found that, because he was unable to clear his name publicly, he has remained out of regular work ever since. Further, he found that it was likely that if the articles had not been published, but for some reason he had not continued with Leal Boss, he would have obtained a good job, possibly a better one, elsewhere. So, the probabilities are, on his Honour's findings, that he would have been in good work.

He then assessed special damages for both articles at $175,000. On general damages, he took the view there was an entitlement to substantial damages. He took into account the circumstances of aggravation, which related to a pleading that was finally abandoned in the conduct of the trial, and then he allowed $75,000 for both articles. Then, having assessed the total damage, he then did this division between the two; 225 to the first and 25 to the second. Chief Justice Doyle, in regard to special damage, allowed nothing, nor did Justice - - -

BRENNAN CJ: What is meant by "special damage" in this context?

MR GRAY: The economic loss aspect of it. The consequence of the loss of employment and not being able to thereafter find a job.

McHUGH J: It is not special damage, is it? It is general damage.

MR GRAY: No. Justice Williams - his reasoning is absolutely flawed, because he is looking for a nexus between the second article and the loss of the job and, of course, he had lost the job before the second article. So, effectively, his approach on damages does not assist. Under "general damages", the majority of the intermediate court - Justice Perry and Justice Williams - allowed nothing for the first article - it was not actionable - agreed with Chief Justice Doyle in regard to the second article assessment of $40,000, and Chief Justice Doyle arrived at, as a minority position, $45,000 for the first article. But Chief Justice Doyle made it plain that, in assessing general damages, he was subtracting the effect of the non-actionable parts from the actionable parts, and we say there that that is a demonstrable error; that there is no occasion for subtracting the effect of the non-actionable parts.

KIRBY J: Is that any more than saying, well, you look at it as a whole and, looking at it as a whole, $40,000 was the proper sum?

MR GRAY: Yes, it is different, because Chief Justice Doyle says, "I must subtract." He does a process of subtraction.

KIRBY J: Does he identify a figure and subtract?

MR GRAY: No, he does not identify the figure, but he has gone through a process of subtraction. Now, we say that that is quite inappropriate. Their argument on the "fair and accurate defence" not being available because there were material inaccuracies succeeds - then it necessarily follows that Chief Justice Doyle's reasoning on damages is wrong, both on special and general damages, as I described. But in particular, there is no occasion for subtracting anything. If the Court goes to page 941, Chief Justice Doyle has referred to Dingle's Case, and then he says, at line 11:

In my opinion, this reasoning is also applicable to the present case. Of course the defendant is only liable for that part of the article which is not privileged. Therefore one must subtract from the defamatory effect of the article that effect which derives from the non-actionable parts, in accordance with Lord Radcliffe's approach.

We say that Lord Radcliffe's approach does not support that. We also say that, and perhaps - - -

KIRBY J: What would be wrong if he had said, therefore, one must excise from one's consideration those parts of the article which are not defamatory? Is that not what he was saying?

MR GRAY: That would accord with law, but that does not involve a process of subtraction.

KIRBY J: It has to be read in its context.

MR GRAY: Well, with respect, these parts are defamatory. The parts that he is subtracting are defamatory.

McHUGH J: But what is wrong in principle? Leave aside Lord Radcliffe and whether or not his speech supports this approach, if an article says that the plaintiff is a murderer and a thief, and the defendant justifies and proves that he was a murderer, surely that must affect the damages he is going to get.

MR GRAY: Of course, and that is done by the judge excising from consideration those parts that are not actionable and he is left, then, to consider the effect of the actionable parts.

McHUGH J: Yes.

MR GRAY: But that does not involve subtracting anything.

KIRBY J: You say he is entitled to full damages for the defamation of being a thief - - -

MR GRAY: Entitled to full damages for the actionable - - -

KIRBY J: - - - not as a murderer thief. It seems a little bit unreal. A murderer thief does not have a reputation that could be so damaged as it - - -

MR GRAY: Well, that would be a difficulty in the case, but he is entitled to full damages for that part which is actionable, and the judge has to excise the non-actionable part and look at what the actionable part caused. What was the result from - - -

BRENNAN CJ: When one is looking at general damages, one is looking at the damage that is done to the plaintiff's reputation. If the plaintiff's reputation is lower than it would have been if the non-actionable parts - I am sorry, I withdraw that. If you find that the reputation is one which has been damaged, and rightly so, by the publication of some non-actionable matter, why should not that be taken into account?

MR GRAY: It is taken into account by being excised from consideration, and one is left with the actionable part to be considered and to ask the question, was this a cause of the loss complained of?

BRENNAN CJ: Let is take the present case. Let us assume that there was a perfectly accurate publication made of the evidence given before the Royal Commission. There would, nonetheless, have been this statement that Chakravarti was one of those as to whom a question of civil or misconduct arose. That would have been damaging.

MR GRAY: Yes.

BRENNAN CJ: Now, why is that not to be taken into account in determining the damage that was done to his reputation by conflating the evidence with respect to two of the directors with the evidence in respect of Chakravarti and the other three directors?

MR GRAY: In our respectful submission, when - perhaps to use the example - the words that Lord Denning uses, that when the newspaper adds spice, it becomes liable for the whole joint. So, it is when it elects to add something that is actionable that it must be responsible for the effect on the whole.

GAUDRON J: Is this aspect of your argument not wound up with your argument that the whole report must be fair and accurate?

MR GRAY: Yes, it is.

GAUDRON J: So that if that defence fails in its entirety, then all parts of the defamation are actionable?

MR GRAY: Indeed. That is why we put this as an alternative ground of appeal. It is tied directly to that.

GAUDRON J: On the other hand, if you are wrong about that - about your first position - there is no basis on which you can say you get damages for the lot.

MR GRAY: No. If we are wrong on that, we are then left with the actionable part to proceed on, but we then say, as an alternative, that, in that circumstance, Chief Justice Doyle erred in this process of subtraction. If one looks at his next sentence - - -

McHUGH J: Yes. But just before we proceed, does not the problem arise in this case because it was found that the matter gave rise to various imputations, some of which are protected and some of which are not protected and so that, if you find some imputations are protected, contrary to your argument, you have got the problem then of how you assess damages for the unprotected imputations?

MR GRAY: Yes. It is an alternative argument. If we win on our primary argument of "fair and accurate", the problem does not arise because Chief Justice Doyle has not considered the full defamatory effect of the article.

McHUGH J: But if you do not win on your - the problem does arise.

MR GRAY: The problem does arise, and we say this process of subtraction that Chief Justice Doyle has gone through is inappropriate.

McHUGH J: Well, let me give you this illustration: supposing you have got two plaintiffs, both of whom sue on the same article, which accuses both of them of being dishonest and incompetent accountants. The defendant proves the first plaintiff is dishonest, but he is entitled to damages in respect of the allegation of incompetence. The defendant fails in its pleas in respect of the others. Now, you cannot award the first plaintiff as much for incompetence as you would the second person, would you? In other words, you have got an article which says that somebody is dishonest and it is non-actionable as far as that person is concerned, but, at the same time, it has said he is incompetent. Well, he is entitled to damages, but realistically you cannot leave out of consideration, can you, the fact that he has been found guilty of being a dishonest accountant, even though he is not an incompetent accountant? He is entitled to some damages but - - -

MR GRAY: Indeed, we accept that. What the ultimate dollar consequence is is a matter of causation and it is possible, in a particular circumstance, the damages might be the same because of a new set of facts. Possible, but we would agree in the ordinary case one would expect a different measure. But that is achieved not by any process of subtraction; that is achieved by - in regard to one man saying, "What is the consequence of having defamed him as dishonest and incompetent?" and the other man, "What is the consequence of defaming him as incompetent?" and the court would then have the task of, as a matter of causation, assessing that consequence.

McHUGH J: But I do not know that there are any rules about this. I mean, it is a sort of intuitive thing, really, I think.

MR GRAY: Yes, there are no rules about it, apart from the normal causation rules and, of course, that does lead to common sense and intuition. But this is a problem that has been there for a long while in the law of defamation, and the traditional way of dealing with it is simply that the judge will ignore the - excise the non-actionable material.

McHUGH J: Juries used to deal with it by awarding a cent, or a quarter - a farthing, they used to - in some of those cases.

MR GRAY: But they are, essentially, if one thinks it through, pure issues of causation, and the problem comes, perhaps in lible, from trying from an evidentiary point of view, to track through cause and effect.

McHUGH J: It may have something to do with what sector of your reputation is involved, as it were.

MR GRAY: Yes, so the variables are infinite. But at the end of the day, in the first example, the judge has to assess what is the consequence of this accountant being defamed as to competence and, in the second plaintiff, what is the effect on this man being defamed as dishonest and incompetent? Common sense would suggest that that would lead to a different measure of damage because one is a greater defamation than the other. But that is not what Chief Justice Doyle was doing. If one looks at his next sentence, having said one must subtract, he says:

However, one may not reduce the award of damages -

so, he is talking about reduction of damages -

one may not reduce the award of damages which would go to vindicate the plaintiff in relation to a false imputation, merely because other statements have been made (either in the same article or in other previous articles) which are almost as discreditable but which are justified or privileged.

So, he is putting a brake on there, but makes it plain that he is using the word "subtract" in the sense of reduction of damages.

McHUGH J: Well, I am not sure that is right.

KIRBY J: Does not that brake indicate that he has in mind that ultimately you have to come back, as the Chief Justice said, to the compensation to the plaintiff for the damage done to his reputation, taking into account that he has had some discreditable things proved against him which are justified or privileged?

MR GRAY: With respect, one cannot tell what he has done, because he does not explain what he does, but except when he uses the word "subtract" in the same paragraph, he is obviously talking about "subtract" in the sense of not reduce the award, otherwise there would be no need for the second sentence.

KIRBY J: There are real dangers in taking one word in a long judgment in a complex matter. I know that is all that the courts have, but it is a bit dangerous, I think.

McHUGH J: I must add to that I read what his Honour said as the contrary of what you are putting and is, indeed, favourable to you. What he is saying is that one must subtract from the defamatory effect of the article that effect which derives from the non-actionable parts. So, you have got totality of defamation. You slice away from that that part which is non-actionable and that leaves you with the rest, and then you assess that. Then he goes on to say but you do not reduce the award in respect of that actionable part merely because other statements have been made in the same or in previous articles. I would have thought it was helpful to you, rather than adverse to you.

MR GRAY: Yes. But then, the difficulty is in the next paragraph:

In the present case, for instance, the fact that suspicion has been cast upon Mr Chakravarti, far from reducing the damage likely to be done to him.....made him more vulnerable.

So, he is still in the process of reducing damages. In this particular paragraph he is putting a matter favourable to my client, but it does show that his mental process is one of subtraction; that is, reduction of otherwise money award.

McHUGH J: I do not think he is.

KIRBY J: Do you have a ground of appeal that says that, even on the hypotheses that the Chief Justice, embraced by the other judges, has adopted that the sum is inadequate? Because it seems a very small sum by Australian standards.

MR GRAY: Yes, we do.

KIRBY J: I mean, I am not making any final comment, but I thought I read in some media journal analysing media law cases a decision in the New South Wales Court of Appeal about standards for damages in destruction of reputation, or damage to reputation. I do not think that case came to this Court, but there would not seem to me to be any reason of principle for large differences in damages between different parts of Australia.

MR GRAY: No, we would have - if our primary submission is right that this article is actionable, it is a very grave defamation in regard to a person holding a very senior position in the finance industry. He had not been able to work from the time of this article until trial, and the award of general damages we complain about as being totally inadequate.

KIRBY J: Was that your cross appeal to the Full Court?

MR GRAY: Our cross appeal has not been dealt with and, for out part, my client would obviously wish this matter to be resolved, if he could, without further hearings and, if this Court was able to deal with that cross appeal, we would obviously wish the Court to deal with it and not be subjected to yet a further hearing. But we do say that in the 1990s this does represent a very modest assessment.

KIRBY J: Do you know that case in the New South Wales Court of Appeal that I am referring to? There was some statement by Justice Mahoney, I think, about damage to a professional person's reputation.

MR GRAY: Yes, it is in the book of authorities, if the Court pleases, as I understand it.

KIRBY J: Is it? Very well, we will find it. Do not worry.

McHUGH J: It is Nugawela, is it not? The doctor - the internet case; Crampton v Nugawela, if that is how you pronounce it.

MR GRAY: Yes.

KIRBY J: Maybe it is only to be confined to professional people and not bankers.

MR GRAY: It is case 11, Crampton v Nugawela [1996] NSWSC 651; (1977) 41 NSWLR 176.

KIRBY J: or 1997?

MR GRAY: 1997. Yes, I misread it. Now, the other matter in regard to damages is taken up at page 18, and it deals with economic loss. Now, there is a summary of the evidence of economic loss attached to the outline, where we have sought to pull together with a very short annotation the evidence-in-chief, cross-examination and re-examination of Mr Chakravarti. Now, the evidence in this regard was quite short. If I might just summarise it; Mr Chakravarti's position was that he was well qualified academically and practically, and he had worked in various positions, improving his position over time in the finance industry.

BRENNAN CJ: Page references?

MR GRAY: They are set out - there is a summary of evidence and economic loss - it is a four page annexure to the outline, which sets out all the references and the summary. Now, he left Beneficial in November 1990 in circumstances where he continued on after the problems, and he had applied for the position of Managing Director and was unsuccessful, and he then left. He sought, and obtained, consultancy work in the months that followed, and he did consultancy work for Leal Boss, and they were pleased with his work. What he did was prepare a five year business plan, and they were sufficiently pleased with it that in April 1992 he was appointed as the Chief General Manager of Leal Boss at a salary of $90,000 with some extra benefits. The term of his employment was not fixed, but it was understood that he would see through the five year business plan, so, on his case, a five year, at least, arrangement.

KIRBY J: Would you just tell me his qualifications?

MR GRAY: He had qualifications in physics and economics.

KIRBY J: Would you describe him as a "professional" man?

MR GRAY: Yes, and he had reached a senior status in the finance industry. His evidence was that, in his discussions with the directors of Leal Boss, everything was going well in the months after his employment, and then there was a publication of the first article. He took two days off work to attend to that first article and the letter and deal with the issue, and he describes in his evidence his emotional state as a result of the first article, and he then went back - and he said that he did not want to draw wages for those two days - and he went back and he was dismissed. He was told by a director he was dismissed.

There is no evidence beyond that as to what was said. There was then the second article the following day, and he describes then his effect after that. Now, since that time he has been unable to find employment, and he gave evidence about that. In cross-examination, in the passages set out, it was put to him that really his difficulties did not arise from these articles, but arose from the general negative thoughts about anybody to do with the State Bank or Beneficial Finance because of the collapse. And he denied that. But in re-examination, in the passages set out, he made it very clear that of those former employees of Beneficial, the only ones who could not find work were the four who had been named, and the others did.

So, given that evidence, it was a very strong case, we say, of an inference that the first article led to his dismissal. There is just no other reason that is proffered. He was not challenged on this matter in cross-examination. And there is not only inference, but supported by his evidence, a very clear case made out that he has been handicapped on the employment market ever since because of this defamation, and that that has been a cause of his not getting work. Now, at an income of about $100,000 a year, the economic award of $175,000 indeed is a modest award. That has not been challenged on the cross appeal.

McHUGH J: Having regard to the plaintiff's qualifications, acceptance even of a $90,000 salary is a matter of some surprise to me. Is there any evidence that he was finding it difficult to obtain work at that stage? I think there is evidence that the market was difficult, was there not?

MR GRAY: Yes, there is undoubtedly evidence that the market had tightened. He was in the process of trying to develop his own professional consulting business. He was getting work - that was a growing business - and he took this opportunity. But your Honour is correct, it does reflect - well, in a sense it reflects a reduction on his Beneficial salary, but those times had gone. The times of $300,000 for a finance executive had gone in South Australia, and perhaps in Australia, at that date. The heady days of the late 80s had gone and so - - -

McHUGH J: I am not sure that is right. But the fact that he was, for example, asked to apply for the position as Assistant Governor of the Reserve Bank indicates that he had some standing in the community.

MR GRAY: His history, when the Court reads through the evidence, is a very impressive history, and he plainly impressed the trial judge because - I will come to the finding in a moment, but the trial judge accepted him, despite the lack of corroborative material. He was a very impressive witness. But in answer to your Honour about the reason for the lower salary, it is page 98 in book 1, line 34:

Q. What was the job market like at that time in your industry.

A. It was - I could understand it. There was a deep recession. The recession, that's been unparalleled for the last 60 years.

So, at that particular time is perhaps the explanation. Now, Justice Cox's findings are at page 896 in volume 4, commencing at line 14, and the critical finding commences at line 34:

So his case is that he lost his job as a result of the publication of the first article and that, because he has been unable to clear his name publicly, he has remained out of regular work ever since. He went onto unemployment benefits. The evidence on this part of the case is slender, perhaps, and is not independently supported but I am disposed to accept it. It is unrealistic to criticize the plaintiff for not calling someone from Leal Boss to say why they dismissed him.

And Chief Justice Doyle agrees with that. There is no case for a Jones v Dunkel inference:

I think it likely that, if the articles had not been published but, for some reason, the plaintiff and not continued with Leal Boss, he would have obtained a good job, possibly even a better one, elsewhere, though I cannot be certain about that. The plaintiff has therefore made out his case of special damage.

So, a very, very positive finding by the trial judge, based on evidence, and a finding that was open to the trial judge. So, absent some error in regard to the gravity of the defamation, we would say that those findings cannot be challenged on appeal.

Now, we do put an argument that the intermediate court and, in particular, Chief Justice Doyle applied the wrong test on causation. The correct test is to ask whether the defamation was a contributing cause, from a commonsense point of view, in a result that followed. The test is not whether it was the cause, or the dominant cause, or a major cause; the correct test is whether it was a contributing cause from a common sense point of view. It is page 938 in the judgment of Chief Justice Doyle, at line 34:

I do not consider that one can conclude on the balance of probabilities that the defamatory imputations were the cause of the dismissal.

Now, that is not the correct test. The correct test would be whether they were a cause.

GAUDRON J: And of the subsequent events, too.

MR GRAY: And of subsequent events, yes.

GAUDRON J: Yes, you cannot limit it just to the dismissal.

MR GRAY: That is so. We say that he has put up too high a hurdle for the plaintiff to get over and we rely, of course, on March v Stramare, Bennett v Commonwealth Welfare Department and Medlin, the three recent decisions of this Court pointing out that it is not a matter of our establishing the cause - not even the dominant cause, not even a major cause or predominant cause - but simply a cause. Chief Justice Doyle, when the Court looks at his reasoning in this regard - - -

McHUGH J: What would you say if the evidence had revealed, for example, that after reading the article somebody from Leal Boss went down to the Royal Commission, checked the transcript themselves, read the transcript and then decided to dismiss the plaintiff, would you still be able to make your claim?

MR GRAY: If it was proved beyond fact that the defamatory article was not a contributing cause, we would not be able to pursue that particular head of damage. But realistically, the article has come out, everything had been rosy until then, everything changes, instant peremptory dismissal; the inference is overwhelming. Now, Chief Justice Doyle does not discuss the evidence at all, and he does not discuss why he says Justice Cox was wrong; he simply says that he takes a different view. We would suggest that, if one looks at his reasoning, it is because he is taking a more limited view about the effect of the defamation because he says here, at line 28:

The difficulty which I have with the assessment of damages arises from the fact that, as I have found, the article was not actionable to the extent that it reports that the plaintiff had been involved in.....civil or criminal misconduct.

So, one can see how he has approached the question of this factual matter with a different defamatory imputation in mind. But more importantly, even doing that, he then puts the wrong test on causation, and demonstrably so. Justice Perry simply says he finds it not proven, but he does not make it clear in his reasons who he is agreeing with. It is 946, line 21, under the heading, "The Second Article", in the first paragraph he says:

I agree.....for the reasons given by Doyle CJ.

In the second paragraph:

I would agree with the reasons of Doyle CJ -

In the third paragraph:

I agree that the claim for economic loss was not made out.

In the fourth paragraph:

agree with the observations made by the Chief Justice -

Now, he has not said who he agrees with in the third paragraph. If he is agreeing with Justice Williams, he has got it quite wrong: he has thought that the dismissal has followed the second article, not the first. If he is agreeing with the Chief Justice, then he has got the test of causation wrong. If he is agreeing with both, he is wrong on both counts.

The reason why we say Justice Williams has got it quite wrong comes from the passage at 953. It is the paragraph commencing at line 4. He says:

I do not consider that a nexus -

and in that sense he is perhaps posing the right causation test -

has been established between the publication of the matters mentioned in par 7(d)(e) and (f) of the statement of claim and the termination of the plaintiff's employment.

7(d), (e) and (f) concern the second article which followed.

GAUDRON J: That was the only question that was going to arise on Justice Williams' approach, though, was it not?

MR GRAY: Yes, it was.

GAUDRON J: Yes.

MR GRAY: But he has completely misunderstood the factual sequence. There could be no nexus between the matters in 7(d), (e) and (f) in termination, because the matters in (c), (d) and (f) followed - were after, in point of time, the termination.

GAUDRON J: There could be, however, a connection between the matters in 7(d), (e) and (f) and the subsequent inability to get a job, which does not seem to have been taken into account.

MR GRAY: Yes, and he does not deal with that. That is the other point that we make, and the final point we make in regard to damages, that we address on the last page at 7.7, under the heading "Loss of Opportunity." If one looks into the future, one, we can say, can address the future in this sense, by saying from Mr Chakravarti's point of view, he has lost the opportunity of competing against his peers fairly in the labour. He presents for a job shackled by the currency of this defamation, and the next applicant does not.

KIRBY J: But there would be an element that he is shackled by just being associated with the bank.

MR GRAY: Yes.

KIRBY J: That is not his fault, but it is also not the defendant's fault.

MR GRAY: Quite so, but, as he said in re-examination, everybody else but these four have got jobs. Now, perhaps not quite as successfully.

KIRBY J: Well, it is not a big sample; there can be lots of other factors that affect that.

MR GRAY: Yes, there can be. And we would accept that that is one of the factors that weigh against an otherwise award of damages, we accept that. But one will not - - -

KIRBY J: Do you support the analysis in term of special damages, or is not what Justice McHugh said to you correct; that all of this is general damages, but with an economic component to the general damages?

MR GRAY: Yes, we would - - -

KIRBY J: I am not pressing this into your mouth. If you do support it as special damages, I would like to hear.

MR GRAY: If the Court pleases, we pleaded this matter as a matter of general damage. The courts below divided it up. At a logical level, a logical plane, we say that they are probably general damages, not special damages. In a sense, we do not mind what label is put on it, provided the end dollars are right. But our pleading in regard to what we called economic loss is at page 43 of book 1, and is pleaded as a - it is described as economic loss, but it is not being sought as a special damage. We simply claim damages, we do not claim special damages. And also at page 38 - - -

KIRBY J: Is there any authority on this point of special and general damages in the field of defamation?

MR GRAY: We had not prepared to meet that particular point, so I cannot say what the position is on that without some time to research that. But what we say damages should include are a proper monetary measure from what has flowed from his dismissal, and his inability to find other employment. In a sense, the dismissal is one thing, but it is the long-term inability to find employment perhaps where the major loss arises. It is one thing to have lost your job with Leal Boss; it is another thing to find himself shackled, in the way I have described, in the labour market.

KIRBY J: There must have been cases where, because of defamation, plaintiffs have been sacked and then not been able to get a job, and there must be analysis of the categories and how one approaches damages in this field.

MR GRAY: We accept that. But that is, in a sense, a label. At the end of the day, whether one - traditionally, "special damage" was something that was identified as an outlaid sum of money and counted as such and, hence, capable of a precise calculation of general damages. If one takes that rationale, this head of damage falls more comfortably into general damages than special damage. If one takes personal injury, pre-trial economic loss is treated as special damage, and post-trial is general damage. We see that as being a matter of labelling, rather than substance.

We have put the reference to Malec v Hutton and also Adelaide Petroleum v Sellars in the footnote as being two recent examples of this Court's approach to loss of opportunity, and here it is real. The finding of Justice Cox at the trial was one of probability.

KIRBY J: I am sorry to press you on this, and I will not ask it again, but in terms of principle, if it is a tort, and if it were negligence, then, as you say, a plaintiff would be entitled to the special damages up to trial. There must be authority on this point as to whether a plaintiff who is dismissed - and that can be related to the defamation as a cause - can bring home as special damages, as he would in a case of negligence, the loss of economic entitlements. Now, I just do not know. You say it does not matter to you what label we put on it, but it does matter to us.

MR GRAY: I do not mean to shirk the question that way. I would hope that if we can look at it over lunch, I will be able to give the Court the references after lunch.

BRENNAN CJ: It may also to any question of interest on the sum awarded.

MR GRAY: Yes, we do accept that. If the Court pleases, I think it is likely I will have a chance to look at those authorities over lunch, and provide the Court the references after lunch.

Your Honour Justice Gummow inquired about the date of the Royal Commission Act 1917 .

GUMMOW J: Yes.

MR GRAY: It is the Royal Commissions Act.

GUMMOW J: It was not in existence, was it? There was no earlier legislation in South Australia?

MR GRAY: The Act that it repealed was the - no, that is the first one.

GUMMOW J: So, previously these commissions in this State were conducted by - under the prerogative, were they?

MR GRAY: Letters patent without being given the appellation of royal - - -

GUMMOW J: Yes, without compulsive powers.

MR GRAY: That would depend on the terms of - nothing from statute.

GAUDRON J: No statute; no compulsory powers.

MR GRAY: No.

GUMMOW J: Just meetings.

MR GRAY: Yes. Can I pass the Court a copy of the rule 46.19, the relevant practice rule that your Honour Justice Gummow inquired about, and it contains with the annotations of the commentator, Judge Lund. We have prepared an analysis of the lower court's judgment on the issue of compliance with a proviso to section (c) and could I give that analysis sheet to the Court - proviso (b).

McHUGH J: Mr Gray, on this question of damages, what do you say is the significance of the fact that after the article appeared the plaintiff did not go to work, but of his own initiative he said it was impossible for him to attend and told the company to deduct his wages, and then the next thing you know he is dismissed? Does that not weaken the inference that you might draw from the article? In other words, it is just his conduct in leaving.

MR GRAY: No; we would say that it is the other way. We would say that he acted utterly responsibly.

McHUGH J: It is not a question of whether he acted utterly responsible or not, it is what inferences do you draw as to the reasons he was dismissed. You say it was the article, but, here he is, he is the chief general manager and suddenly he absences himself for a couple of days - no doubt because of this article, but may it not have been that conduct that Leal Boss thought, "This is starting to become a problem".

MR GRAY: We would say that absence for a couple of days is a normal occurrence, even for a chief general manager.

McHUGH J: I mean, particularly when you do not lead any evidence about it at all.

KIRBY J: Was this point raised at the trial? Were any questions put to him to suggest that he was sacked because he did not turn up for two days?

MR GRAY: No. There was absolutely no cross-examination on these issues, at all.

GUMMOW J: Very wisely.

KIRBY J: It is only judges who would be sacked for not turning up for two days, I think.

MR GRAY: The fact of the matter is that he presented a very simple and succinct case on this.

McHUGH J: Succinct is right.

MR GRAY: He painted a very clear picture of everything being very satisfactory with the business plan, the employment, his dealings with his employers and the discussions are all put very favourably. Then this article comes and he is dismissed peremptorily, immediately. The inference, we say, is overwhelming.

McHUGH J: Ordinarily it would be, I think, but the one thing that concerns me is that you have this background: his employers would know of the State Bank problem; knew he worked there; then he is named in the paper; then he absenced himself from work; then they terminate his employment. Now, what inference do you draw from that? Is it that they accepted that what was said in the article was true about him, or might be true about him, and therefore they dismissed him because of that; because, that is what you have got to show - that is the defamation. Or what it, they thought, "We just do not want this man associated with our business, having regard to all the adverse publicity and his background", et cetera.

MR GRAY: "How can we continue to employ a man who is engaged in grave, civil misconduct taking unauthorised loans from his employer. That may be criminal. He has to go". That is the reasoning of the employer, and it comes directly from the defamatory sting. That is why he goes. They have got to get rid of him straight away.

McHUGH J: But he is not dismissed the next morning; he is not dismissed on the day it appears. He is off work for a couple of days. Are we told how Mr Simon Winter communicated with him? We were not even told whether he was dismissed on the premises or by telephone or at home, or where, were we?

MR GRAY: The effect of it was that he went to work and he was dismissed by the director.

McHUGH J: I do not think that is right, is it? I think he was asked, between the time he saw the article and when he was dismissed, had he attended the premises, and he said no.

MR GRAY: I will just have to have that checked.

McHUGH J: I think it is at page 120.

MR GRAY: What one has to consider, with respect to the terms of his evidence and the evidence he gave, is to consider his state at the time. It is one thing for a person in a calm way to sit down and discuss with his employer why he is being dismissed. It is another thing when he is there, he knows that all of Adelaide is reading this about him, one has to consider his state and how he might react. He is, in a sense, almost compliant. He would be saying, "They have said all these things. This was in the press. There is nothing I can do about it", and so he just simply takes it. He is shell-shocked by all this. His reaction at the time could be a very complicated emotional reaction. It would provide ready explanation for - - -

McHUGH J: He could have given evidence as to the reasons for his dismissal. Having regard to some of the cross-examination, it would probably have been objected to, quite erroneously objected to. I notice there was an objection even to him giving oral evidence as to the terms of his employment, had no substance in it.

MR GRAY: The defence counsel was extremely restrictive about what could come out.

McHUGH J: Yes.

MR GRAY: What was led was essentially the facts; they are not challenged and, with respect, the question is whether there was any evidentiary basis on which Justice Cox could act. It is not a question of, with respect, what inference this Court might draw, it is a question of whether the inference that Justice Cox drew was open.

McHUGH J: That is not right, is it? It is a full appeal, and is a matter of inference, and the Full Court is in as good a position as the trial judge to draw the inference, are they not?

MR GRAY: There is in the sense that there was no attack on his credit on this point. We accept that, but, on the other hand, obviously Justice Cox was impressed by him. For example, when he was describing the effect of these articles upon him, obviously Justice Cox has accepted that, and that explains, we say, a lot of the succinctness of the material on this topic. We accept that the material is succinct, but we say it is adequate, and Justice Cox came to a conclusion that was fairly open, and with respect, the inference, we would say - the position is so stark between good performance from this article and then dismissal as to make it a very strong case. The fact that he took some time off to try to deal with it; to try to get his reasonable letter published and make his inquiries, we say it would be very harsh to hold that against him in regard to damages and infer that - - -

McHUGH J: It is not a question of whether it is harsh or not, it is the question whether or not, when the plaintiff does not give any evidence as to the reasons for his dismissal, and he does not call anybody, a person who dismissed him, can you draw the inference from all these circumstances? Now, you are entitled to point to the article and his dismissal two days later, and it is a powerful factor in your favour. All I am putting to you is there are these various other factors that one has to weigh up.

MR GRAY: No judge below thought it was appropriate to draw a Jones v Dunkel inference.

McHUGH J: I am not sure about that. I was thinking of asking you about Jones v Dunkel. Why was it not a case for a Jones v Dunkel inference?

MR GRAY: Could one say that the employer was a witness in Mr Chakravarati's camp. Equally, the defence could have called the employer - a witness available to both sides, not in either party's camp. There is no reason to suspect that - - -

McHUGH J: But, you have the onus of proof.

MR GRAY: Indeed.

McHUGH J: And, you do not give any evidence as to what reasons were given for your dismissal.

MR GRAY: The clear inference from the evidence - - -

McHUGH J: But it excites - somebody as sceptical as me, suspicion is excited by that sort of thing.

MR GRAY: It is not well founded, if your Honour pleases. Of course, one reading this transcript is going to say, "What was the reason given?". But the answer is, on the evidence, no reason was given. He was told, the evidence is, "You are dismissed". That is the evidence.

McHUGH J: Is that the evidence?

BRENNAN CJ: Let us have a look at it.

McHUGH J: Yes. He was asked about no notice or something. At page 115, I think, from recollection. Page 115 line 23.

KIRBY J: All the knowledge about reasons would be in the camp of the employer, not his - - -

MR GRAY: That is so. It would only be if he was given a reason that he would be in a position to, at least, proffer that hearsay evidence.

McHUGH J: I know; but he would be entitled to say, "No reason was given to me". He said:

Had you any notice of that dismissal.

That is what he was asked at line 30. He was never asked about the reasons. Does the cross-examiner take it up?

MR GRAY: No. Both parties just accept, well, he was dismissed.

McHUGH J: You may succeed on this point. One has a sneaking suspicion that the real reasons were probably 50:50 - neither party wanted to explore it for their own - - -

KIRBY J: There might be some disadvantage to the plaintiff in exploring it, but there would be no disadvantage whatever to the defendant.

MR GRAY: No.

McHUGH J: Except the defendant might say, "I might provide just that little link that will move the judge. I am happy to argue it as it is, and as I succeeded in front of the Full Court". So, at the moment, the defendant is in front.

MR GRAY: No, with respect, because it succeeded in front of the Full Court on two grounds. One is on a lesser defamatory - on defamation less grave, and secondly, on the wrong causation test. So, they do not get much, with respect, solace from the Full Court. At page 168 there was this question in cross-examination - - -

BRENNAN CJ: Mr Harris, I see, objected at page 115.

MR GRAY: Yes. There was a very firm position taken by the defence about not having any hearsay information of any sort in on this topic. At page 168, Mr Harris did cross-examine with this question, at line 25:

Q. Is it correct to say that no documentation exists in relation to the termination of your employment from Leal Boss.

A. That's correct, so far as I'm concerned. The company, Leal Boss, may have its own documentation, but so far as I'm concerned, it's correct that no documentation exists.

Q. The question was loose. No documentation that was ever produced to you exists in relation to the termination of your employment.

A. That's correct.

McHUGH J: I know, but the plaintiff was entitled to plrove his dismissal. He is entitled to say, "Mr Simon Winter came to me and said you are dismissed because of what has appeared in this morning's paper, or yesterday's paper, or the day before's paper." That evidence is plainly admissible.

MR GRAY: Yes, but, in any event, the evidence is that it was simply a dismissal.

McHUGH J: Just as evidence was plainly admissible as to the terms of his contract. He was entitled to give evidence as to the conversations he had.

MR GRAY: We agree, but the position was taken below. So, in a sense, the defendant were containing that material and elected to do so, which we think is a material matter. But, your Honour, some people might take the view that the point was so obvious - that this defamation was so great that it went right to the very matter of trust between employer and employee. The ordinary reader would, if we go to imputation 4(b), would have inferred, quite apart from criminal rather than civil, the ordinary reader would have inferred that this man was not fit to be employed in a position like this.

McHUGH J: I am not necessarily against you, but it is a very important part of the case, and I want to explore all the problems and find all your answers to them.

MR GRAY: We have set out, as best we can extract, every evidentiary reference. We accept the evidence is succinct. It is unusually succinct. But, both parties did not want to go into - clearly into this topic. We....the Court towards the clear inference, the evidence as given was truthful and that was the limit of it - that he was simply dismissed. No reasons are proffered. The explanation for why, perhaps, he did not inquire for reasons is to be found in his emotional state at the time. He thought that he had been very unfairly dealt with. Later he describes himself as feeling as though he was just devastated, absolutely devastated. One must consider his reactions, for example, asking an employer for reasons in that environment. A very fair inference is that he was, in effect, so down that he had no douts at all - "I have been publicly said to be inappropriate to be in a position like this and I am dismissed, and what can I do". We put the submission in that way, if the Court pleases. May it please the Court.

MR McCLINTOCK: May I take things slightly out of order and deal with the special damages claim, so-called, that Mr Gray was just dealing with. There are several answers to that claim. The first answer is that, in fact, the plaintiff was not employed by Leal Boss. The evidence to that, your Honours, appears at page 855 of volume 4, where the letter setting out the terms of his discretionary trust's engagement with that company is reproduced. It is page 855 of volume 4. There is evidence to which I will take your Honours, to establish the trust was discretionary. The point is, of course, that the plaintiff had no beneficial interest in the wages that he was being paid, or the consultancy fees, which were being paid to the trust.

Your Honours will see that it is a letter dated 1 April 1992. It is handwritten -Your Honours will see in the top right-hand corner there is the title, Camelot Consultancy, and if your Honours drop down your Honours will see:

TRUSTEE FOR CHAKRAVARTI FAMILY SETTLEMENT NO. 1

GUMMOW J: Who is the trustee?

MR McCLINTOCK: The trustee signing there is Mr Chakravarti, himself.

BRENNAN CJ: Well?

MR McCLINTOCK: Your Honour, the point is it was a discretionary trust and that he had, and I will take your Honours to the evidence, he had no interest in the moneys being paid to the consultancy.

BRENNAN CJ: Why cannot the trustee sue?

MR McCLINTOCK: Your Honour, the trustee did not sue.

BRENNAN CJ: Why did he not?

GUMMOW J: What did he do?

BRENNAN CJ: That is Mr Chakravarti, is it not?

MR McCLINTOCK: It is Mr Chakravarti, your Honour, but the fact is that Mr Chakravarti can only be compensated for moneys that he personally lost by way of the defamation.

BRENNAN CJ: Why can it not be because of damage to his reputation which makes him unemployable?

MR McCLINTOCK: That is a different question. The question here is whether the loss of wages that he relied upon was made out. The reasons why I put to your Honours that it was not made out, one reason why it was not made out, is that, in fact, he was not employed by this company. It was a service fee, there was a service arrangement. He had no interest in the moneys that were paid to the trustee.

GUMMOW J: He was the trustee.

MR McCLINTOCK: I am sorry, your Honour?

GUMMOW J: He was the trustee. He had an obligation to sue for them.

MR McCLINTOCK: But he had no beneficial interest in the moneys, your Honour.

GUMMOW J: That is another question.

MR McCLINTOCK: That is the point, your Honour.

GUMMOW J: Why?

BRENNAN CJ: Why does that sound in relief of the defendant?

MR McCLINTOCK: Because he did not make out his claim for damages, in the sense that he did not establish that he, beneficially, would have received any money as a result of the defamation in this respect.

McHUGH J: I can understand that if there was a claim for special damages, but assuming it is a claim for general damages, even if he has not got a beneficial interest in the trust he certainly has an expectancy that he will benefit from the earnings, so why is not one entitled to look at it the same way?

MR McCLINTOCK: Your Honour needs to go to the evidence as to the terms of the trust, and that appears in volume 1 at page 114. The fact is that a beneficiary under a discretionary trust does not have an interest in the assets of the trust. The service contract here was an asset of the trust. Mr Chakravarti, as a beneficiary, therefore had no interest in that contract, or the moneys paid under it. Your Honours will see that - the line references are point 1 to point 30, and it says:

Q. Do you recall the letter that was tendered through you at the end of last evening.

A. Yes.

Q. Pursuant to that letter, you purported to accept the position of Chief General Manager.

A. Yes.

Q. You did so in the name of Camelot Consultancy.

A. Yes.

Q. Why did you do that.

A. Camelot Consultancy is a business name which is owned by my family trust. My consultancy earnings have been made through Camelot Consultancy in January, February, March and Leal Boss suggested there was no need to change that.

GUMMOW J: That is not a statement of legalities. There is no such thing as a family trust.

MR McCLINTOCK: I am sorry, your Honour?

GUMMOW J: There is no such thing in law as a family trust.

MR McCLINTOCK: Quite so, your Honour, but down the page the question was asked:

Q. You mentioned a family trust. Is that a discretionary trust?

A. Yes.

Q. Are you a beneficiary of that trust.

A. Yes.

Q. Who are the others.

A. My wife and children.

Q. Who is the trustee of that trust.

A. Myself.

I do not need to read any further for my purposes, your Honour.

McHUGH J: But Mr McClintock, here is the vehicle by which this family trust, to use a loose term, earns revenue, and he may not be able to have any legal entitlement as a beneficiary, but, as a matter of reality, one would assume that he derives benefit from the trust, or he may derive benefit from the trust, therefore one is entitled to give him damages on the basis that as a result of the defamation he has been prevented from earning this money.

MR McCLINTOCK: The key lies in your Honour's word "may". He may, but there was no evidence as to how the trust income was distributed or who the donees - there was only evidence of how the trust income was distributed. There was no evidence as to what had happened in the past. There was no evidence, for example, that he got any particular share. There was no evidence as to the amounts his wife or children got, and your Honours will bear in mind - - -

GAUDRON J: Can we not draw inferences in that from the amount of salary involved, that this was a tax device and that the money was used for genuine household purposes?

MR McCLINTOCK: No, your Honour.

GAUDRON J: I would have thought if he has no other income, that was the inference you would draw - that this was the money which maintained the family.

MR McCLINTOCK: Your Honour can certainly draw an inference that it was a tax device, but your Honours cannot draw the inference that - and the whole purpose of trusts like this is to split the income so as minimise tax - - -

GUMMOW J: This is not your strongest point, Mr McClintock.

McHUGH J: By the way, was this point ever taken below?

MR McCLINTOCK: Yes, it was, your Honour. It was taken at trial.

GUMMOW J: Assume this gentleman is trustee of Black Acre, and holds it on a discretionary trust. He enters into a contract to sell Black Acre and the purchaser repudiates the contract. You seem to be saying that the vendor cannot sue for damages, that in answer to the claim for damages that the vendor would be bound to hold what is produced by an award of damages on trust for the terms of the trust. That is just wrong.

MR McCLINTOCK: I am not suggesting that, your Honour. But, the trustee has not suffered any damage himself here; qua trustee, that is the answer.

GUMMOW J: If that is an answer here, it is an answer to the example I have just given you.

MR McCLINTOCK: With respect, there, your Honour, the trust has suffered damage - - -

BRENNAN CJ: No such thing as a trust as an entity.

MR McCLINTOCK: I am sorry. There has been harm incurred by the trustee in respect of property which he has, for the example, no beneficial interest. I appreciate what your Honour has said to me, that this is not my best point. There are other points here which I wish to make quite shortly.

KIRBY J: I assumed it might have been your best point because it is your first point and it is not logical and you have raised it out of order.

McHUGH J: I always thought respondents started at their best point. So I assume the case is going to go down hill from now on.

MR McCLINTOCK: I will take it logically and in order once I have these out of the way. Your Honours have picked up most of the references that I want to give to the evidence here, but the submission is, moving on from the point about whether he is employed or not, is that there was, in fact, no evidence that the publication of this article caused the loss of the job. Alternatively, if there was some evidence, the evidence was such a scintilla that it was rebutted by the other easily available inference, that this man was dismissed because he stopped going to work.

KIRBY J: What, for two days?

MR McCLINTOCK: Yes, your Honour.

KIRBY J: Oh, really.

MR McCLINTOCK: Your Honour, he is the senior manager of the company. If you simply stopped turning up without any apparent explanation - - -

GUMMOW J: That is not right, is it? Did he not say he telephoned to explain?

MR McCLINTOCK: No, it does not say - Your Honour, the evidence is, if I can take your Honours - - -

GUMMOW J:

I advised the office that it was impossible for me to attend.

Page 120, volume 1.

MR McCLINTOCK: Yes, your Honour, but he did not say - there was no evidence as to what the impossibility was. When it says there - it says - can I just step back, your Honour and - - -

GUMMOW J: I thought you were saying he absented himself without reason being conveyed for the absence.

MR McCLINTOCK: Your Honour, if it was simply that it was impossible to come, it could hardly be regarded as an adequate reason. An employer could readily have taken the view that that was a good enough reason to dismiss him. The reference is at page 115 where he said he was dismissed - - -

GUMMOW J: But the whole of Adelaide would have been reading The Advertiser.

MR McCLINTOCK: Or listening to the ABC, your Honour, or The Australian. I must say this, your Honour, there was no evidence, as I understand the position, on the circulation figures of The Advertiser.....this, there was no evidence, as there could have been, if it was available, one assumes, any evidence that the employer subscribed to The Advertiser, as opposed, say, to The Australian, which circulates here. There was no attempt to negative the matter - the burden was on the plaintiff - any other possible source of information in relation to this matter. This was a royal commission that, it is notorious, was itself notorious. Everyone knew about the royal commission. Your Honours, the inference is open from the fact that he failed to give any evidence as to what the employer said to him; failed even to say that the employer had given no reason. There is an inference that can be drawn, of course, that the evidence would not have helped him. The authority for it - and I will just give your Honours a reference to it - is Commercial Union v Ferrcom. It is a decision of the New South Wales Court of Appeal.

BRENNAN CJ: Is that the case that came on appeal here?

McHUGH J: We reversed it.

MR McCLINTOCK: Not on this point, I do not believe, your Honour. This is a point about inferences that can be drawn from the failure to ask the witness a question, especially if it is a party. The report is at 22 NSWLR 389. That is the first point, your Honours.

BRENNAN CJ: What does it say?

MR McCLINTOCK: It says simply that - - -

BRENNAN CJ: What does it say, have you got it there?

MR McCLINTOCK: I am sorry, your Honour, I do not have it with me. What it says is, on this point, is that if there is a failure to ask a witness, especially a party, a question that would be relevant, or the answer which would be relevant, an inference can be drawn.

GAUDRON J: But neither people asked relevant questions here.

MR McCLINTOCK: Yes, your Honour, but the defendant here, very sensibly took the view that the evidence there, as it stood, was insufficient.

BRENNAN CJ: That might have been the decision that it took, and it took it in the light of evidence, (a) that the publication had been made on 15 July with a photograph of the four people in question.

MR McCLINTOCK: Yes, your Honour.

BRENNAN CJ: That was two days before the dismissal of the plaintiff, and the plaintiff was then dismissed on the spot, and that at a time of high controversy about the publication of information of what was going on in the royal commission. In those circumstances, in the absence of other evidence, an inference might be open that there was a causal relationship between the publication in question and the dismissal. Now, in the light of that evidence, if the defendant chose not to ask any question in the light of the allegations in the statement of claim, chose not to adduce any evidence, can the defendant complain if an inference is drawn in favour of the plaintiff?

MR McCLINTOCK: Yes, your Honour. The question comes down to the question of whether there is any evidence. If there is no evidence, and I would submit that the point at page 115 is a no-evidence point, that there is complete silence on the basis for the dismissal. It happened, as Justice McHugh pointed out in argument, two days, or three days after the publication of the article. One would have thought that if the - - -

KIRBY J: The first day he had returned.

MR McCLINTOCK: Your Honour, the evidence does not establish that, in fact, that he actually returned to the office. The evidence of that appears at - - -

McHUGH J: Page 120, I think, at line 18, is it not?

MR McCLINTOCK: I think that is right, your Honour, yes.

Q. Between that time and the time on 17 July when you were dismissed by Mr Simon Winter had you attended at the premises of Leal Boss.

A. No. Because of the commitments I had, commitments I had to fulfil, and I can elaborate on that if you like, between 15 and 16 July, I advised the office that it was impossible for me to attend. I told them on my own initiative to deduct the wages for those two days. I didn't want the company to suffer.

Your Honour, it does not appear that he went to the office on that day, either. In my submission, in a matter, the burden of which was on the plaintiff, he failed to make the claim for special damages out, or so-called special damages.

Can I go back to the start and deal with the matter in perhaps a more logical order than I have been so far. In my submission, the appeal should be dismissed, special leave to cross-appeal granted, and the cross-appeal allowed. The principal basis upon which I rely, your Honours, is in relation to both articles, that they are accurate reports of the proceedings of this royal commission. Your Honours will have noticed that in most respects, or substantial respects, they are verbatim reports. They are, in fact, very like what 19th century journals of record used to do in recording proceedings before bodies such as the royal commission.

Before I come to the report aspect of the matter, it is necessary, first, to deal with, obviously, the meanings issue, if I can put it like that. There are, as I apprehended, the following issues that arise in relation to meanings. I will deal with them in relation to each article, in the order of the articles. The first issue in relation to the first article is, of course, what imputations, or what defamatory meanings - do the defamatory meanings pleaded by the plaintiff arise? In that respect could I say this: I accept that the meanings pleaded by the plaintiff in his reply, given the way the case was - those are the ones of suspicion well founded - despite the fact that they are pleaded in reply, given the way the case was conducted, are open to be relied upon by the plaintiff. I also accept that "well founded" may mean something different, or something less than actual guilty. It may come very close to it, but I accept that it is something less than a full imputation of guilt. The question I have isolated is a purely factual question: does the article convey the imputations relied upon of guilt, and so on - - -

McHUGH J: Why do you have to go that far? Why is not the implication pleaded in paragraph 4(a) of the statement of claim made out?

MR McCLINTOCK: Your Honour, the answer to that question is, the imputation in paragraph 4(a) of the statement of claim talks in terms of actual guilt of criminal misconduct.

McHUGH J: No, it does not.

MR McCLINTOCK: With respect, your Honour.

McHUGH J: It says is engaged in one or the other.

MR McCLINTOCK: It says, "involved in criminal or civil misconduct". The article never says that he was engaged in criminal or civil misconduct. When your Honour goes to the article - I will do that now - the article, on every occasion there is a reference to this topic, talks in terms of possibilities. The word used is "question" on each occasion. The question - - -

McHUGH J: But what about columns 3 and 4:

it may be criminal rather than civil.

That certainly assumes it is civil, at the very least, and it may be criminal; so why is it not a proper inference to draw to say that the plaintiff had engaged in civil or criminal conduct?

MR McCLINTOCK: You cannot draw an inference from that, that it was criminal conduct.

McHUGH J: Why not?

MR McCLINTOCK: Because the person is quoted - - -

McHUGH J: I did, I must tell you, I did. The first thing, when I read it, I thought this article means that this man has either been involved in criminal or civil misconduct - what is pleaded in 4(a). That was the inference I drew when I read it.

MR McCLINTOCK: Your Honour, one has to pay attention to the words actually used. The word "may" speaks in terms of possibility.

McHUGH J: That it may be criminal rather than civil. So, it is certainly civil misconduct and it may be criminal. So, why is it not proper to say that it imputes to him that he has been involved in a criminal or civil misconduct?

MR McCLINTOCK: Your Honour, because, if that is the meaning of those words it does not say, and is not capable of saying, that the conduct in question was criminal.

McHUGH J: I know it does not. You are not going to give him the same damages as if he had said he had been engaged in criminal conduct, but you have said he has been engaged in conduct which may be criminal or may be civil.

MR McCLINTOCK: In addition, though, one cannot ignore the use of the word "question" that appears on two occasions in this article. It appears in the third paragraph:

Mr Simmons said he told Mr Bannon on July 30, 1990, there was a "question" of either criminal or civil misconduct to be looked at in relation -

GAUDRON J: At least it was questionable conduct, was it not? At the very least you would have to concede that it says it is questionable conduct.

MR McCLINTOCK: Your Honour, questionable does not follow, in my submission, from question. There is an issue.

GAUDRON J: No, but the point I wish to put to you is that once you put question of criminal or civil, you are looking at questionable conduct. There is no room for anyone to read in there "and the conduct may have been entirely proper".

MR McCLINTOCK: I am sorry - "and the conduct may have been entirely proper"?

GAUDRON J: Yes.

MR McCLINTOCK: With respect, your Honour, there is.

GAUDRON J: I would have thought not, in that context.

MR McCLINTOCK: The meaning of the word "question" used there, is simply, there is an issue as to - - -

GUMMOW J: (a) or (b), but not (c).

MR McCLINTOCK: I am sorry, your Honour?

GUMMOW J: A question is to (a) or (b), but not (c). (c) equals impropriety.

McHUGH J: Mr McClintock, I have to say to you I have difficulty in thinking that what you just put to Justice Gaudron is even barely arguable, having regard to the action of the Premier, as is put out in the fourth column, that:

he was very angry, particularly with the reference to the Melbourne joint venture -

which follows immediately after another statement that "it may be criminal rather than civil" after what Beneficial had learnt they had been doing.

MR McCLINTOCK: The Premier, being told that there was a question of criminal and civil misconduct that had not been resolved in relation to a bank, or in relation to a finance company owned by the State Bank of South Australia, would obviously, in my submission, have been angry. The fact of the anger does not provide a safe basis for inferring back that the anger was because of, was because he had been told there was actual criminal conduct - - -

BRENNAN CJ: Let us see if we can identify what the question might be. It might be a question as to whether there was particular conduct engaged in. Then, there may be a question as to whether that conduct is such as to expose the doer of the conduct to civil liability, and there may be a question as to whether the conduct exposed the doer to criminal liability. So, there are three separate problems in respect of which a question may be raised for consideration. Look at columns 4 and 5. There is no question there about the fact of conduct being engaged in. It is only a question of the label that you are going to give to the conduct.

MR McCLINTOCK: But there, your Honour, if one looks at column 4, the words are:

"The investigation wasn't completed at that stage -

So, the Premier has been told that matters had not been concluded:

and there was I believed, as I had said to the Premier, it may be criminal rather than civil."

BRENNAN CJ: "It".

McHUGH J: "It". The inference is that when the investigation is completed it will be criminal conduct rather than civil, but certainly, at this stage it is civil.

MR McCLINTOCK: There is force in what your Honour says to me about civil misconduct, but, with respect, no, in relation to criminal misconduct. What your Honour put to me changes the word "may" into the word "will". The word used was "may". It does not say that there was criminal conduct here. There may be room for a debate between whether there was an imputation of actual civil misconduct, but there is no room, in my submission, for a debate as to whether it imputes actual criminal misconduct.

BRENNAN CJ: Does it not come to this: that there is conduct; it is misconduct; and the character of the misconduct may be civil or it may be criminal, but if it is such as to be possibly criminal, it must be pretty serious.

MR McCLINTOCK: Yes, but criminal conduct obviously would be serious. The possibility does not mean that it is defamatory, in that sense of impugning actual guilt. But, your Honours, this involves ignoring the rest of the article, and the material that is introduced in the first column and in the second column, where Mr Simmons is quoted as saying what he actually told the Premier. When one comes to the fourth column there, the way the article works is by setting out what he says he told the Premier. There, he is expanding on that, but in such a way that the ordinary reader would, in my submission, interpret that, not as qualifying the very carefully qualified material that Mr Simmons is quoted as having said in the first two columns. He told the Premier there was a question of criminal or civil misconduct. The point about the item in the fourth column is that there he is giving evidence, that he told the Premier that the investigation in question was not concluded.

In one sense, I accept what lies behind what your Honour Justice McHugh said to me, which is that these things are all matters of impression in one sense. The points are made, if your Honours are against me, your Honours are against me. But, in my submission, this article was not capable of conveying either of the imputations pleaded in the statement of claim. Could I say in relation to the second imputation, that that imputation can be ignored. It is what is frequently referred to as a rhetorical imputation, and arises out of the same material that gives rise to the first imputation, 4(a).

In relation to the imputations pleaded in the reply, they were, in a sense, fall back imputations that the plaintiff only relied upon if he did not make out the first one. In my submission, for the same reasons I put in relation to imputation 4(a), or meaning 4(a), those imputations are, in fact, not made out.

BRENNAN CJ: The second imputation has another element in it, does it not, and that is that he is a person who ought not to remain in Beneficial Finance's employment.

MR McCLINTOCK: Your Honour, there are two answers - - -

BRENNAN CJ: Does that not follow from the remark that was attributed as though to the plaintiff, coming from the mouth of Mr Jacobs?

MR McCLINTOCK: I am sorry, your Honour?

BRENNAN CJ: In the article itself Mr Jacobs is reported to have said:

Mr Jacobs: "It would have been closer to the mark to have said something like there was a difference of opinion between these officers -

a term which in the context includes Mr Chakravarti -

and the board as to what was appropriate conduct for officers of the company.

MR McCLINTOCK: Your Honour, I see the passage, but there are two answers there. The first answer is that that does not say that Mr Chakravarti or any other person is unfit to be an employee of Beneficial Finance. That is - - -

BRENNAN CJ: He said it was conduct which was inappropriate for a person in that employment to engage in.

MR McCLINTOCK: Your Honour, it is a difference of opinion as to what appropriate conduct is. One cannot elevate a difference of opinion into a defamatory statement about - to suggest that the conduct was inappropriate. Your Honour, the actual imputation was that the plaintiff's conduct in receiving loans direct to himself, as executive of Beneficial Finance for which loans were in excess of his entitlement:

was such as to render him not a fit and proper person to be or remain a Beneficial Finance executive or to be or remain in any other position of trust.

It does not say that because he had a difference of opinion with the board that he was not a fit and proper person. That is an imputation, your Honour, that is to be derived or can be derived from the same material that gives rise to the first imputation. It is a pleader's rhetorical flourish, with respect, and it has to be seen in that context, not as an independent defamatory sting. In my submission, in any event, it cannot be derived from the quote from Mr Jacobs that appears there.

Your Honour, the next issue is whether it is open on the pleadings for the plaintiff to rely upon any meanings other than those which are set out in the statement of claim or the reply. The only available means are those pleaded by my client in the defence. I do not apprehend now that that is the imputations of suspicion. I do not apprehend that the plaintiff relies upon them. I do apprehend, though, that he relies upon the - that he asserts he is entitled to rely upon the imputations found by Mr Justice Cox, the trial judge, and as modified by the Chief Justice in his judgment.

That, if my apprehension is correct, throws up the question as to whether a plaintiff is entitled to do that. In my submission, for the reasons set out in cases such as Prichard v Krantz, Lord Salmon in Slim v Daily Telegraph, and in Lord Devlin's speech in Lewis v Daily Telegraph, he is not. In my submission, the view expressed by Lord Salmon in Slim is the correct view and that a plaintiff in defamation proceedings, who specifies his meanings, is pinned to those meanings or those which do not differ substantially from them or which do not differ, in terms of nuance, from those meanings.

GUMMOW J: Why?

MR McCLINTOCK: Why, your Honour? It comes down to a simple matter of fairness to the defendant, in most cases. The reason why is that it is impossible in cases - first, one has to distinguish between cases where the defamatory meaning is obvious. If the statement is simply, "You're a thief", in the presence of other people, obviously it would not be necessary there to plead any defamatory meaning; it is perfectly obvious. If, however, it is complex material, as it is here, it is incumbent upon the plaintiff to plead the imputations simply because if he does not do so there is every possibility that the defendant will be taken by surprise by other meanings being found.

GAUDRON J: But is not your difficulty in this case in relation to article 1, that the two innuendos having been pleaded, they encompassed everything else that has since been said by Justice Cox and later by Chief Justice Doyle?

MR McCLINTOCK: No, your Honour, they did not encompass what was said. One can test that by asking, "Would one offer the same proof to prove those imputations to be true?" Would they be encompassed? When one looks at the imputations relied upon by Mr Justice Cox, one will see there that they are, in fact, very different from those actually relied upon, and each of them has an additional element, in my submission, to those pleaded by the plaintiff. They are conveniently set out, your Honour, the modifications are, in the Chief Justice's judgment at page 926 of volume 4.

GAUDRON J: Is it sufficient to work from the spreadsheet, which seems to be an easier way of doing it?

MR McCLINTOCK: I am not sure that I can lay my hands on the spreadsheet.

McHUGH J: It was in part of the plaintiff's submission, it is towards the end.

MR McCLINTOCK: I see.

McHUGH J: The analysis.

MR McCLINTOCK: Your Honour, the - - -

GAUDRON J: If you look at the first one and, perhaps, the second, all it does is tie down what was at large. The imputation pleaded is one of guilt of civil or criminal misconduct. One and two tie it down.

MR McCLINTOCK: If your Honour looks at the first imputation found by Mr Justice Cox, which is set out there:

Plaintiff's conduct bought him, as an executive of Beneficial, into collision with "the board".

Now, to prove that imputation to be true, one would need to prove that there was a collision between the plaintiff and the board. There is, in fact, nothing in either of those two pleading imputations in the statement of claims that suggests there was any such - - -

GAUDRON J: But what is suggested is that he was guilty of civil or criminal misconduct.

MR McCLINTOCK: Yes, your Honour.

GAUDRON J: Now, what happens at the first instance before Justice Cox is that, instead of leaving it at large, he limits civil or criminal misconduct by reference to the matters in 1 and 2, so that, in fact, you do not have to prove or disprove anything other than those matters.

MR McCLINTOCK: Your Honour, if one set out to prove the truth of the imputation that the plaintiff was involved in criminal or civil misconduct, or that the plaintiff's conduct in securing loans - that is the two pleaded imputations, it would form no part of that proof that the plaintiff had brought himself into collision with the board, or that he was involved in something discreditable in relation to the Melbourne joint venture, or that he left under a cloud. There is no suggestion in either of those pleaded imputations that the plaintiff did any of those things. One would not think, in the course of conducting a case like this, that one needed to do anything to prove anything involving collision with the board as a matter of fact.

As it turned out, there was no suggestion that Mr Justice Cox's imputations were the imputations conveyed by this material until the judgment was brought down.

BRENNAN CJ: What is the relevance of collision with the board in Justice Cox's first meaning?

MR McCLINTOCK: I do not know, your Honour. It does not seem to be relevant to - - -

BRENNAN CJ: How is it defamatory?

MR McCLINTOCK: It is not defamatory.

BRENNAN CJ: Why would you need to prove it?

MR McCLINTOCK: Mr Justice Cox thought it was defamatory, he found....defamatory and gave damages in respect to it.

BRENNAN CJ: Perhaps, that is one way of looking at it.

McHUGH J: I do not think that is your strongest point, but you are perhaps on a stronger ground in relation to 3 and 4. Your argument is, as I understand it, that if you had proved the truth of the imputations pleaded in (a) and (b), you still would not have an answer, just imputations 3 and 4.

MR McCLINTOCK: Yes.

McHUGH J: And maybe 2.

MR McCLINTOCK: And 2 as well, because there is nothing necessarily in there about the Melbourne joint venture.

McHUGH J: You could have proved the plaintiff is engaged in criminal misconduct while an executive, and you could have proved that he was not fit, but you would not have proved he was dismissed for misconduct.

MR McCLINTOCK: Exactly, your Honour, exactly.

BRENNAN CJ: Well, this strikes me as artificiality of the highest order, I must say.

MR McCLINTOCK: But, with respect, your Honour, it is not. It is the reason why defamation cases, if they are not properly pleaded, get into such appalling difficulties.

BRENNAN CJ: No, it is the reason why counsel can make defamation cases get into appalling difficulties without understanding the substance of what underlies the rules. In this case, I cannot for a moment image that the meanings assigned by Justice Cox 1 to 4, however one cares to put it, were not very much to the mind of those who were conducting the litigation.

MR McCLINTOCK: Your Honour, why would anyone who is presented with an imputation that the plaintiff is involved in criminal or civil misconduct, believe that the plaintiff was putting in issue the fact that he was dismissed or that he left under a cloud. That is the reason why - the purpose of pleading a defamation case, just like any case, your Honour, is to give fair notice to the other party as to the points that are relief upon. There is nothing in this pleading that suggests that Mr Chakravarti was concerned because of any suggestion that he had been dismissed or that he left Beneficial Finance under a cloud. This is the reason why these rules, in my submission, should be adhered to and why Lord Salmon's view in these matters is correct. My client did not know that damages were going to be given against it because it was being suggested that this man had left the company under a cloud. There was no suggestion in the conduct of the case in that respect, as I understand the position, until the judgment was given by his Honour.

GAUDRON J: You knew it was going to be asked to pay damages on the basis that he was not a fit and proper person to be employed by Beneficial or by anybody else in relation to financial affairs or the management of financial affairs of a company.

MR McCLINTOCK: Your Honour, the fact that someone is not a fit and proper person does not carry within it proof that he has been dismissed. One is a condition of lack of fitness, the other one is an act that happens to him. One does not prove, your Honour, that - - -

GAUDRON J: I just wonder whether people have not been reading the judgment of Mr Justice Cox too minutely, really, as reading those to say, well when you link those up, the pleaded innuendos are made out, that the particulars in the article support the pleaded innuendos.

MR McCLINTOCK: But your Honour, that is not what his Honour says. At page 886 of the appeal book, his Honour sets out what he says are the defamatory innuendos. It is the paragraph that commences at line 6 where he says:

Finally, and perhaps belatedly, there is the question whether the article of July 15 was defamatory of the plaintiff. He relies upon the natural and ordinary meaning of the article in so far as it refers to him - the way a reasonable reader with no special knowledge would understand it. See Jones v Skelton [1963] 1 WLR 1362, Lewis v Daily Telegraph Ltd [1964] AC 234 and Prichard v Krantz (1984) 37 SASR 379. Would the article tend to lower the plaintiff in the estimation of ordinary, reasonable people?.....In my opinion it would. I have already alluded to many of the discreditable imputations that are made against the plaintiff in the first article - - -

GUMMOW J: Now, what page is that?

MR McCLINTOCK: Your Honour, that is the discussion that continues in relation to fair protected report in relation to report aspects of the matter. Then, his Honour goes on to summarise - - -

GAUDRON J: Yes, but what page?

MR McCLINTOCK: Your Honour, at page 879 line 32 to line 36, where his Honour says:

But any reader of the newspaper report might well conclude that there had been a difference of opinion between the Board of Beneficial and all four executives, including the plaintiff, as to their conduct.

That is reflected in the first imputation that his Honour sets out on page 886. Over the page, your Honours will see at line 15, there is a suggestion:

That tars the plaintiff with the imputation in lines 55 and 56, not just that the Premier was very angry but that his anger was directed particularly to "the Melbourne joint venture". The author went on to say that no explanation of the Melbourne joint venture was given to the Royal Commission -

and so on. Lower down the same page, page 880, his Honour said:

However, the gratuitous reference to the plaintiff which followed would have led the ordinary reader to conclude that he had been dismissed, and dismissed for some kind of misconduct that might be either criminal or civil - indeed, that might be criminal rather than civil, with its tendency to convey that it was at least civil misconduct and was possibly criminal misconduct as well. It is no answer to say that the report does not state that the plaintiff had in fact been dismissed.

Those are the points to which his Honour is referring back on page 886. His Honour there, page 886 line 15, commences to summarise the imputations that he found arising out of the article:

The ordinary reader would conclude that the plaintiff's conduct had brought him, as an executive of Beneficial, into collision with "the board" (of either Beneficial or the Bank - it matters not which) and that the matter of his conduct was of such gravity that it raised a question whether it amounted to criminal or civil misconduct, with the possibility tending towards the former rather than the latter in the view of the Chairman of both Boards.

Two:

While "the Melbourne joint venture", reference to which had made the Premier particularly angry, was not explained, any reader was likely to infer that it was something discreditable to those involved in it who included, the article implied, the plaintiff.

Three:

There was also an imputation that the plaintiff had left Beneficial under a cloud, most obviously because of his questionable conduct. In my opinion the article was defamatory of the plaintiff.

GUMMOW J: Well?

MR McCLINTOCK: In my submission, each of those imputations - - -

GUMMOW J: They may all be epexegetical of the first pleaded - - -

MR McCLINTOCK: I am sorry, your Honour?

GUMMOW J: They may all be epexegetical of paragraph 4(a), questionable conduct, amounted to civil or criminal misconduct - - -

MR McCLINTOCK: Your Honour, they each have an element that is not included in that one. The element in the third and fourth imputations, or third imputation found by Mr Cox and the imputation found by the Chief Justice, is that he left under a cloud or that he was dismissed. Now, there is nothing in the first imputation, 4(a), still less in the second imputation, that says the plaintiff left under a cloud. My client was, therefore, given no warning in the course of this case that the plaintiff was claiming damages because he said there was a defamatory imputation that he had been dismissed because of his misconduct. As it happens, in my submission, the article is not capable of bearing that, but there was no warning given to my client in that respect.

The same applies, your Honour, in relation to the Melbourne joint venture. There was no suggestion in imputations that that was claimed as opposed to a general imputation in relation to civil or criminal misconduct. There was no suggestion in the imputations that he had, in fact, had a collision with the board. Now, as a result of this, those matters formed no part of the investigation at the trial of the proceedings in relation to the truth of those imputations. It may well have been, your Honour, if there had been fair warning that the plaintiff sought damages, because my client said he left under a cloud, it may well have been that my client had sought to justify. There was evidence, and it is appended to our submissions in this matter, that indicates that he left after some form of dispute with Beneficial Finance. The letter itself is headed "Without prejudice", that is the termination letter.

Now, that was not something that my client was put on notice about and, your Honour, that is the reason, in my submission, why the rule or the position adopted by Lord Salmon, which is only an example which really followed Lord Devlin in Slim, is the correct rule in these areas; that a plaintiff is pinned to the imputations that do not differ in substance. In my submission, these imputations found by Mr Justice Cox and by the Chief Justice do differ in substance and they are not merely nuances, your Honours, because they had different elements which would be required to prove them true.

BRENNAN CJ: I find this a very interesting argument in terms of the concepts that you are using. But if one looks at the pleading of 4(b), you will see that the allegation is that it was "such as to render him not a fit and proper person to be or to remain", et cetera. Then you look at the meanings that were found, and you can see what was being dealt with there. And then you look at your justification that was pleaded and you see what you joined issue on there. Then we find that the argument that you are now propounding is, well, despite all the issues joined as to whether he was up to no good, in fact, there may none the less have been this additional element that he left under a cloud, some other cloud that we were not concerned with. Now, looking at the judgment, seeing the award of damages that was made and for what it was made, it seems to be impossible to suggest that there was any question of leaving under a cloud attracting some award of damages other than those which were contemplated by the pleadings.

MR McCLINTOCK: But, your Honour, that is what Mr Justice Cox, in fact, says. I put the proposition, I do not want to belabour the point or weary your Honours with it, but the proposition is that there is nothing in 4(b) that says anything about leaving under a cloud. There is nothing that says he was dismissed. Mr Justice Cox took that into account in giving damages. Could I say one further thing too, your Honour. While there was a plea of truth to imputations of suspicion put on in the defence, there was no attempt - - -

BRENNAN CJ: Not to imputations of suspicion, to imputations that were in paragraph 4 of the statement of claim.

MR McCLINTOCK: No, your Honour, my client did not seek to prove those imputations to be true. He sought to prove true the imputations set out in the defence and they appear - - -

BRENNAN CJ: What is paragraph 10 of the defence say:

Further, insofar as the meanings alleged in paragraph 4 arise (which is denied) the defendant says such meanings are true in substance and in fact.

And gives particulars.

MR McCLINTOCK: I am sorry, paragraph 10 on page 46, your Honour.

BRENNAN CJ: Page 29, I am looking at. Am I looking at the wrong - - -

MR McCLINTOCK: I think your Honour is looking at the wrong defence. The defence that was relied upon is the one that appears on page 46.

GUMMOW J: An even more explicit defence.

MR McCLINTOCK: It commences on page 45, it is the third further more explicit defence, and your Honour will see paragraph 10:

Further, insofar as and to the extent that it may be found that the words set forth in paragraph 3 of the Amended Statement of Claim -

this is about line 21:

were defamatory of the plaintiff (which is denied) the said words meant and were understood to mean that:

(a) The plaintiff was suspected of being involved in criminal or civil misconduct whilst an executive of BFC in respect of loans from BFC.

Particulars are given and, in fact, those particulars 10(a)1 and 10(a)3 were in fact admitted. Then (b):

Mr Simmons told the Premier and Treasurer of the State of South Australia (Mr Bannon) that he suspected that the plaintiff and three other Beneficial executives may have been guilty of criminal or civil misconduct.

The particulars are then given. The pleading concludes:

and so understood the said words, referred to in paragraphs 10(a) and 10(b), are true in substance and in fact.

It was a pleading of - - -

McHUGH J: It is a Polly Peck defence.

MR McCLINTOCK: Of a so-called Polly Peck defence, but the significance - the only point I wish to make was to make sure the Court was not under any delusion that, ultimately, we had set out to prove actual misconduct. It was only the suspicion imputations and, as I apprehend the position, there was no dispute at the trial, or no substantial dispute, ultimately, at the trial that there was such a suspicion. Is that a convenienttime, your Honour?

BRENNAN CJ: Yes, how long do you expect to take?

MR McCLINTOCK: I think I may take the rest of the day, your Honour, I am sorry.

BRENNAN CJ: Yes, in the circumstances, the Court will not proceed beyond this case today. The Court will adjourn until 2.15.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

BRENNAN CJ: Yes, Mr McClintock.

MR McCLINTOCK: Thank you, your Honours. May I go now to report, a fair report, and in my submission, your Honours, this was an accurate report of the oral evidence - I am dealing with the first article, of course - of the oral evidence given by Mr Simmons before the Jacobs' Royal Commission. Your Honours, the inaccuracies found by the Chief Justice, in my submission, are not there on a fair reading of this article. Could I remind your Honours of the inaccuracy, because it was only one, found by the Chief Justice in his respect. It appears at pages 929 and 930 of volume 4 of the appeal book. I can pick it up, I do not need to read your Honours the paragraph that begins with line 17, where his Honour held that it was fair and accurate to the extent that the report said:

That Mr Simmons said that the plaintiff had been involved in conduct involving loans to executives which conduct raised a question of civil or criminal misconduct -

and so on. At line 34, however, his Honour said this:

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

His Honour then went on:

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

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

GAUDRON J: Now, so far as that goes, though, how is the Melbourne joint venture linked to the appellant in the transcript?

MR McCLINTOCK: I have reproduced, your Honour, first, a typed up version of the diary note which is relevant to the second article; and a set of the transcripts. It is more convenient, perhaps, to deal with it in this way because the ones in the appeal book are not in the same order that I believe the evidence was, in fact, given.

McHUGH J: When you talk about the diary note, that has nothing to do with this particular article?

MR McCLINTOCK: No, it is not, your Honour. It just happens that they are joined together, that they were stapled together, and I will come back to the diary note because the copy in the appeal book is, at least, in part illegible and that the diary note there is a transcript of the diary note from the appeal book, although it omits one significant heading that may, so to speak, date that diary note.

Your Honours will see that the transcript picks up on page 13441 and your Honours will see that at line 29, and the cross-examiner who I believe was Mr Abbott, who was Mr Simmons' counsel, in fact, put this question.

BRENNAN CJ: This comes from the documents that were in the court below?

MR McCLINTOCK: Yes, your Honour. The question is, and this is line 29:

Q. Could I, on one more of these meetings, go back to the meeting of July, 30 July 1990. You have your typed file note of that meeting.

A. Yes, I do. Yes.

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

A. Yes.

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

A. Yes.

Q. Which is a reference to loans to the Executives of Beneficial.

A. Yes.

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

A. Yes.

Q. In relation to both of those topics.

A. Yes.

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

McHUGH J: This is where, really, the problems in this case began, because first of all, it is a leading question and I have got to say, that on my reading of the diary note that question of counsel was not an accurate - - -

MR McCLINTOCK: That may very well be right. But my client can only report what happens in the royal commission.

McHUGH J: I appreciate that on this aspect of the case.

MR McCLINTOCK: And it had not seen the diary note, at that stage.

McHUGH J: But when you get to the diary note, it is another question. Anyway, carry on.

MR McCLINTOCK: There is an issue, of course, as to whether the diary note can be interpreted in the light of that answer that was given by Mr Simmons there, in fact, for the fair report point of view. But the fact is, my client had not seen the diary note at that time, no one had except those associated with the commission. It was not released till the day before the second article was published. But in any event, that was the answer given:

Did you make it clear to the Premier that with reference to Messrs Baker, Reichert, Martin and Chakravarti there was a question of either civil or criminal misconduct to be looked at.

A. Yes.

Of course, there is no appeal brought against the finding, but that question was answered `yes' by Mr Simmons.

Now, at that point the Commissioner, Mr Jacobs, intervened, and he went off on a different, but related, topic.

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

A. I was involved but I don't believe that I sought - I thought Mr Hamilton sought their resignation.

Q. You knew why.

A. Yes.

Q. You know the terms in which that was publically announced. Do you remember the terms in which that was publically announced.

A. Yes.

Q. What is your recollection of that.

Then over the page on 13443, Mr Simmons gives the answer:

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

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

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

Question -

And this, of course, is still coming from the Commissioner:

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

A. Yes.

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

A. The difficulty -

And the Commissioner cuts the witness off:

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

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

Q. Could have prejudiced.

Answer -

And this is significant:

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

GAUDRON J: At that stage, am I wrong in thinking that the questions are directed to the other two - to Mr Baker and Mr Reichert?

MR McCLINTOCK: Your Honour, the questions may have been directed to it, but the answer given by the witness is a reference back to the answer he had given on the previous page - - -

GAUDRON J: But I do not read it that way at all. I read it back to what is going on with respect to Mr Baker and Mr Reichert.

MR McCLINTOCK: Your Honour, he says there:

The investigation wasn't completed at that stage and there was I believed, as I had said to the Premier.

Now, that is a reference back to what he said to the Premier, and is recorded in a question and answer on the preceding page.

McHUGH J: It is not really, because - it is in a sense, but he answered "Yes" to this rolled up question of counsel who was appearing for him which, in my view, was not an accurate reflection of the diary note. And then when he is asked, he is being asked in a different context.

MR McCLINTOCK: Your Honour, my client cannot sit there and settle answers given by counsel to questions, or given by witnesses to questions. My client can only take the evidence as it is given.

McHUGH J: Your point is well taken, but nevertheless, Mr McClintock, it is in the context of Baker and Reichert.

MR McCLINTOCK: Your Honour, but it is in the context of Baker and Reichert, but the witness does not answer it in the question of Baker and Reichert. He answers it in the context of what had gone before and what he told the Premer about all four men. Your Honour, at the very lowest here, there is an ambiguity on the transcript as to what was going on.

McHUGH J: Well, if there is an ambiguity, that is the end of you because your article does not give the plaintiff the benefit of the ambiguity.

MR McCLINTOCK: Your Honour, I will demonstrate to you when I come to the article that it does give the benefit of the ambiguity because, in fact, that question and answer is quoted verbatim, together with the material that comes immediately after it. But, your Honour, I just want to make good the point that it is a reference, though, to all of them. The witness is clearly saying - I appreciate what your Honour says about the way the question came out in the royal commission, and there were leading questions put, no doubt, by Mr Abbott and by the commissioner himself - but the witness - and it may be quite true to say that it is dealing with Baker and Reichert - but the witness, himself, gave an answer that refers back to what he had said to the Premier - - -

McHUGH J: No, but he is answering in relation to those two. He is still talking about those two. He says: as I said it may be criminal rather than civil (in relation to those two).

MR McCLINTOCK: No, he did not, you Honour, with respect.

McHUGH J: Well, that is the effect of it, that is the whole context of it.

MR McCLINTOCK: What he said was: I gave you an answer - which appears on the previous page - that all four men - I said it was civil rather than criminal. But, in any event - in my submission, that is a reference back to all four. The questioning then goes on:

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

A. Yes.

Now, the significance there, the words `these officers' are, of course significant. I will come back to demonstrate or to talk about that when I deal with - - -

McHUGH J: But you are ignoring, at line 8, the reference to "these officers as to their conduct" which was plainly a reference to Baker and Reichert. The next question is about their reason, it was not announced publically, again, that is them. "I'm not sure where it was announced" -again, it is a reference to those two., and then he says, "could have prejudiced any position that was being taken". That has got to be in relation to those two. And he is asked, "Could have prejudiced" - he is asked for an explanation, and then he gives this explanation. It is plainly in respect of those two.

MR McCLINTOCK: Your Honour, what the witness is saying, though, there, what he means is, as I said to the Premier a few minutes ago in answer to Mr Abbott's question, Mr Commissioner, I told the Premier that there was a question of criminal and civil misconduct in relation to Baker, Reichert, Martin and Chakravarti. That is what he is saying, your Honour. But could I say this - - -

McHUGH J: The next question is back to those two. Now, at the end of that, by line 30, anybody sitting in the commission would have had no doubt that everything was directed in this section of the transcript to those two and not to the plaintiff.

MR McCLINTOCK: With respect, your Honour, no. Because the reference to, "it may be criminal rather than civil",is capable of being a reference back to all four men. And the person sitting in the commission might well reasonably have interpreted the words "these officers" in that way. It says, "as I had said to the Premier, it may be criminal rather than civil", and then it uses the word "these officers".

Your Honour is parsing a transcript in a way that was not able to be done by any journalist who was there. The journalist only heard the evidence, had no benefit before the article was written of the transcript, had her shorthand notes - as journalists do - and took this material down. Now, it is the broad general impression that, sitting in a court room, or in this case a royal commission, that is protected by this material. Now, there may well be, on this transcript, ambiguities, but it cannot be said that it would have been an unreasonable construction to have come to - - -

GAUDRON J: Let me interrupt you, if you just go to column three of the article. That was the point at which to introduce the two officers, instead of which it is `these officers'. That is where the ambiguity comes in, in reporting.

MR McCLINTOCK: I am not going to duck your Honour's - I am not going to evade the question your Honour has put to me, and I am going to deal with that when I come back to the article.

GAUDRON J: But once that inaccuracy crept in, if that had been accurately reported, then it may well be that the whole article would have been an accurate report.

MR McCLINTOCK: Your Honour, the quote from Mr Jacobs there is a verbatim quote of what appears on lines 8 to 10 of the page I have taken your Honour to.

McHUGH J: Exactly, but that does not answer the point Justice Gaudron is putting to you. Put at its highest, it seems to me all you can say is that if a person had been sitting in court or in the commission, they may have said, I am not sure what that question was referred to, whether it was only to Baker and Reichert, or to the lot of them. But at least, they would have heard Baker and Reichert singled out. Your publication has omitted any reference to Baker and Reichert, and refers to these officers which immediately takes you back to the four of them as a group in column two.

MR McCLINTOCK: If it does, your Honour, it only takes it back because of the juxtaposition of the civil - it may be civil and criminal in column four. But could I just finish the transcript, because I am not going to evade any of your Honours' questions. Properly understood, there is no doubt, in my submission, that these officers, in fact - - -

McHUGH J: I always get worried when I hear those words "properly understood", Mr McClintock.

MR McCLINTOCK: They sound, your Honour, much like words once said in Lloyd v David Syme many years ago. Your Honour, as I said, I am not going to duck the issue, but there is no doubt that the words "these officers" when you read the article fairly and in context, in fact applies to Baker and Reichert, and if there is any ambiguity, though, it comes because my client verbatim reported what was said, and it is an ambiguity -

GUMMOW J: No, it comes because your client did not focus on the matter that had the particular attention of the commissioner which is, resignation.

MR McCLINTOCK: It did, your Honour, because paragraph 1:

The Premier, Mr Bannon, misled Parliament over the resignation of Beneficial Finance Corporation chief Mr John Baker.

GUMMOW J: Yes, but the resignation of Baker and Reichert.

MR McCLINTOCK: But, your Honour, I just want to finish it.

McHUGH J: But your client did not report it verbatim, it omitted reference to Baker and Reichert as an entity, and that is where the problem arises.

MR McCLINTOCK: No, it did not, your Honour. When your Honour reads it - could I just finish off the transcript, so I can deal with the article in order. I have taken your Honours to page 13443 of the transcript, and then that is after the question which I read to your Honours which concludes:

That would be pretty bland and somewhere near the truth, wouldn't it.

A. Yes.

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

A. No.

Then it goes back, one assumes from the use of the letters "XXN" to Mr Abbott.

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

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

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

Now, that is obviously a reference to all four men.

A. Yes.

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

A. Yes.

Q. Did the Premier respond in any way.

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

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

A. Yes.

Q. The word `civic' should be `civil', is that so.

A. Yes.

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

A. Yes.

Q. Or proceedings may be instituted.

A. I think at that stage it hadn't been finalised.

Now, the significant thing from the point of view of the journalist here is that there has been no reference - the only reference to the Melbourne joint venture is in the diary note which the journalist, of course, has not seen. The only reference in evidence to it is the question and answer that appears at - or the answer that appears at lines 8 to 10.

I think he was very angry, particularly with the reference to the Melbourne joint venture.

That is the explanation for what appears in the article that there was no explanation of the Melbourne joint venture.

BRENNAN CJ: Whose departure is being spoken of there?

MR McCLINTOCK: Yes, your Honour, the departure is being spoken of there. It comes back to that but the - - -

BRENNAN CJ: Whose departure?

MR McCLINTOCK: At that stage, your Honour, it can only have - it is difficult to know, your Honour, because no one had resigned at that stage. He is talking there about the conversation between Mr Simmons and - - -

BRENNAN CJ: He is talking about Beneficial's announcement of departure. Whose departure did Beneficial announce?

MR McCLINTOCK: Your Honour, the answer is I do not know and I do not know that the evidence makes it clear.

BRENNAN CJ: I would have found no difficulty at all in understanding that, in the context.

MR McCLINTOCK: Your Honour, the witness is talking about a conversation that took place on 30 July 1990. Assuming that the information in the article is correct about the time of the resignations of Mr Baker and Mr Reichert, they resigned on 7 August 1990, that is approximately a week after the conversation in question. But it seems to be going off to that extent to a slightly different topic.

BRENNAN CJ: I do not think it is different at all, that is the whole difficulty I am having. The conversation from the intervention of the commissioner onwards is concerned with the resignation of Baker and Reichert, the discussion that led to that and the announcement of the reason for it. It is not referring to anything else and it is incapable of being so understood, and when one looks at the article itself, one finds that there is a distinction then drawn at the bottom of column five and the top of column six between their departure and the departure of Martin and Chakravarti.

McHUGH J: And to reinforce what the Chief Justice has just put to you, the whole thrust of the article was about the reasons for resignation of Baker and Reichert. That appears in the very first two paragraphs. So, the spotlight was on them and what the Premier had said to the Parliament. But then when you get into the body of the article, it does not distinguish between the four of them and, indeed, leaves the impression that the plaintiff is involved in all these problems, including the Melbourne problem which caused - - -

MR McCLINTOCK: Your Honour, the material on page 13444 of the transcript is a reasonable construction of that, is that he was involved in it and it says, because the reference on the top of that page to their:

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

The people about whom the witness had told the Premier were all four of them, and it is then asking how the Premier reacted to that information. The witness is giving an answer about the Premier's reaction to the information that these four executives, it was a question whether they have been involved in civil or criminal misconduct. That is the only, in my submission, the only fair reading of that material that appears in the first four questions and answers on page 13444. The "they"in the second question is, in my submission, a reference to all four and then "Did the Premier respond in any way". The Premier's response must have been to the entire information because Simmons said he told them about all four, and then in response to the information about all four, the Premier said - so Mr Simmons says:

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

Now, he is describing there how the Premier reacted to the information about all four men. There is no other, in my submission, your Honour, construction that is available in relation to that. That is how the Premier reacted to being told that four senior executives - - -

BRENNAN CJ: Yes, you have said that.

MR McCLINTOCK: Sorry, I am repeating myself. Could I go back to the article, and then your Honour, to the first article, and put the proposition that when one reads the article as a whole fairly - and one, of course, must read it as a whole and must read it reasonably - that the only reasonable construction available, as a first proposition, is that the references in the in the third and fourth columns to "these officers" does not include the plaintiff.

McHUGH J: Does not?

MR McCLINTOCK: Does not, in the article. If it does include the plaintiff, it is because of an ambiguity in the material that was quoted verbatim in the article.

McHUGH J: It is not quoted verbatim. That is the problem.

MR McCLINTOCK: The key parts of it which carry the meanings, your Honour, are.

McHUGH J: No, you have left out the entity, Baker and Reichert, and that changed the whole complexion of it, because the article does not show you that the commissioner's questioning was designed - - -

MR McCLINTOCK: Your Honour, the article does refer to Baker and Reichert and makes perfectly - - -

McHUGH J: Of course it does, in the front of it, it does.

MR McCLINTOCK: Yes, your Honour, but they are the only resignations referred to.

McHUGH J: Yes. But the problem, as Justice Gaudron pointed out to you some time ago, is the word "these officers" in column 3, and that could only be a reference to the four of them.

MR McCLINTOCK: Your Honour, with respect, no; with respect, no. When your Honour says it could only be, the reasonable reader would not have interpreted it as a reference to all four and, as a fallback position from that proposition, if he had or if he or she had, the reason why was because of an ambiguity that my client did not resolve, or attempt to resolve, which was in the transcript itself.

McHUGH J: But that is the point. If there was an ambiguity, then your client is duty bound to state the evidence so that the reader will have the ambiguity thrust upon that person, then the reader can make up his or her mind as to what she thinks. But you have forfeited the plaintiff's right to have the reader take a particular view about the case, that he is not involved in it.

KIRBY J: That is reinforced by the naming of the four and the four photographs, these are the four guilty men.

MR McCLINTOCK: Your Honour, it does not say these are the four guilty men.

McHUGH J: But, yes, "Bannon accused on resignations", that is the headline and then you have got four people photographed including the plaintiff.

MR McCLINTOCK: Your Honour, Bannon accused on whose resignations? The only resignations referred to are of Baker and Reichert.

BRENNAN CJ: In giving it the construction that you seek to put upon the article, namely that it refers to Baker and Reichert and their resignation, one then sees that those two are identified in column 1. In column 2, we see the incorporation of Martin and Chakravarti as included in the allegations made against Baker and Reichert. Then when we come to column 3, we are concerned here with the reasons why Baker and Reichert were dismissed, and we are speaking of these officers without differentiation. So that, although we are speaking only about two resignations, we are speaking about conduct common to four. What other interpretation is open?

MR McCLINTOCK: The interpretation, your Honour, is that because it is talking about the resignations and it is made clear that the resignations in question were of Baker and Reichert, when it says these officers, it is talking about the officers who resigned. Your Honour, that comes - - -

BRENNAN CJ: Well, then let me understand clearly. You say that the article from start to finish is speaking about Baker and Reichert and the only occasion when the plaintiff is brought into the picture, is at the bottom of column 1 and the top of column 2, is that what you are saying?

MR McCLINTOCK: No, it is not quite that, your Honour, it is this - - -

BRENNAN CJ: No, let me press you a little further.

MR McCLINTOCK: Certainly, your Honour.

BRENNAN CJ: Are you saying that Chakravarti was referred to in columns 3, 4 and 5?

MR McCLINTOCK: I am putting this proposition, your Honour.

BRENNAN CJ: I would have thought my question was capable of an answer.

MR McCLINTOCK: I am sorry, your Honour, I am not seeking to evade it. The answer is, yes, but as an alternative to my main point. The answer yes, that he was referred to, comes from a point that I was seeking to make, that if he is referred to, it is as a result of an ambiguity that appears in the transcript of the commission itself. The first step, though, is that - the first proposition, though, is that from paragraph 7, which is the second column which beings "Mr Bannon", until the point on the fifth column where it finishes up talking about Mr Hamilton "who sought their resignation", that it is only talking about Baker and Reichert. That is how the reader would interpret it. Obviously, it comes back to the material that is Mr Chakravarti.

BRENNAN CJ: So, you are saying that what has happened is that the article and the evidence together, in dealing with the Baker and Reichert resignations, were not referring to Chakravarti's conduct?

MR McCLINTOCK: No, no I am not, your Honour, I am not. I am saying that the evidence was at least capable of that interpretation from the references to civil or criminal misconduct, which is a reference back to the Premier, or the Premier's - - -

BRENNAN CJ: The capability is the problem. We are speaking about either a primary argument and a backup position, or we are speaking about an argument which is based solely on ambiguity. Now, you can take your pick, but which?

MR McCLINTOCK: Your Honour, I am putting both. The proposition - - -

BRENNAN CJ: Put them one by one so that we can examine them.

MR McCLINTOCK: I am sorry, your Honour, I will. The first one I wish to make is that when one understands the article, the material in those three columns does not refer, is not referring to Mr Chakravarti. Your Honour, that requires an analysis of the article. It is headed "Bannon accused on resignations", so one knows that the focus of the article is resignations of someone. The first paragraph makes the assertion that:

The Premier, Mr Bannon, misled Parliament over the resignation of Beneficial Finance Corporation chief Mr John Baker in August, 1990, according to evidence before the State Bank Royal Commission.

Then it sets out what Mr Simmons said:

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

So, at that point, we know that the resignations referred to, your Honour, in the headline are the resignations of Mr Baker and Mr Reichert. No one else is suggested to be, in that sense, the subject of the article, in the sense of having resigned. The article then goes to the material in relation to the answer that Mr Simmons gave to Mr Abbott's question about what he told the Premier. It is set out there and:

the question of either criminal or civil misconduct to be looked at in relation to four Beneficial executives, including Mr Baker and Mr Reichert.

It then goes on, the executives are identified in the second column in the end of that paragraph. Then the article sets out the quote from Mr Simmons as to what he told the Premier. Now, then it goes off to a different topic which in fact is, in one sense, not a report of what happened in the evidence. It says:

Mr Bannon told Parliament on August 7, 1990, that Beneficial's managing director Mr Baker had retired after "differences of opinion" with the board over the "direction" of Beneficial.

And then, your Honour, that is a reference back, obviously in my submission, to the first paragraph and the fact of the resignation of Mr Baker. So, it has reverted back to the point of the resignations after the discrete references to what Mr Bannon had been told prior on 30 July 1990. It then continues:

The Royal Commissioner, Mr Samuel Jacobs, QC, said yesterday the public explanation that there had been a difference of opinion over direction was not true.

Now, that is a reference back to what the Premier had said about Mr Baker, and as referred to in the second column, Mr Baker retired over differences of opinion. Now, that is the only way that that can be interpreted, that the Commissioner there is saying that the Premier was lying to Parliament because he had said that Baker had retired over a difference of opinion, which was not true. Then it goes on:

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

Now, this is in the context of talking about the resignation, and the reader, in my submission, would take the correct impression that "these officers" there refers back to the two officers, Baker and his deputy Mr Reichert, who had resigned. That follows from the use of the words "difference of opinion", referring back to what the Premier had said. These two are the only people who have said to have resigned, they are the only two about whom the Premier is said to have misled the Parliament. The way he has misled Parliament, your Honour, is said to have been by saying there was a difference of opinion. That is what that sums up there, that these officers there, there was a difference of opinion between the board as to their conduct, and it is giving the reason - it is giving the lie to the reason why the Premier, the reason the Premier gave to Parliament for the resignation of those two men. That goes on to say, that continues with Mr Jacobs quoted from, again accurately:

The reason ... announced publicly - I am going to put it quite bluntly - it really just wasn't -

the true reason. That is obviously a reference to the resignations of the men.

BRENNAN CJ: So construed, the article accords precisely with the evidence given before the royal commission, is that right? The article so construed represents - - -

MR McCLINTOCK: In the construction I am using, your Honour, yes.

BRENNAN CJ: It represents precisely the evidence given before the royal commission.

MR McCLINTOCK: Yes, in my construction, yes, your Honour.

BRENNAN CJ: And so the evidence given before the royal commission was capable of being construed in that way?

MR McCLINTOCK: Your Honour, it was capable of being construed in that way.

BRENNAN CJ: That is all I put to you. Well, now, the question then arises, if this article is capable of being construed in a different way, what is the consequence?

MR McCLINTOCK: The consequence, your Honour, provided - and this is my fall back position - is that it does not matter because we have reflected accurately the substance and, indeed, the minutia, of the evidence that was given before the royal commission. Your Honour, a journalist hears these things and reports them. He or she is bound to do so accurately but this was, in substance, an accurate report of what the evidence was.

McHUGH J: Is this a report at all, because you start off, you have got the headline, "Bannon accused on resignations"? Nobody said that at the - that is the newspaper's account. The very first paragraph, "The Premier.....misled Parliament over the resignation" is not to be found in the evidence at all. That is the newspaper's comment, opinion. Again, the same in the middle of column 2, "Mr Bannon told Parliament on August 7, 1990", that did not appear in the proceedings.

Again, in column 6, the reference to the Advertiser reporting last year that Mr Martin left and Mr Chakravarti left, and so on. Why is not the proper construction that this is just a news story in which they have taken bits and pieces out of the transcript, but it is not a report as such. It is an Advertiser's story saying that the Premier misled Parliament - that is their comment. And they support that with other material, but it is not a report.

MR McCLINTOCK: Your Honour, it is a report to the extent that it reports what occurred in the royal commission. That is what a report is.

McHUGH J: That does not always gets you out of it, as the New South Wales Court of Appeal held in the case of Burchett v Kane, where they held it was not a report of parliamentary proceedings even though it referred to sections of evidence in Parliament before the parliamentary committee.

MR McCLINTOCK: Your Honour, a report is a statement of what occurred in the particular tribunal. This is a statement of what occurred, the evidence that was given, before Mr Jacobs in the Jacobs' Royal Commission. It is in that sense, it is in that respect, which is the relevant respect, a report. A report is only a statement of the evidence that was given, or the conclusions that were reached in the matter.

McHUGH J: What you claim is a report is mixed up with and, indeed, leads off with their comments. They inject material into it, in column 2 about what Mr Bannon told Parliament. Again, in column 6, concerning when Mr Martin and Mr Chakravarti resigned.

MR McCLINTOCK: Yes, your Honour, but that does not detract from it being a report and one can see that that could not because, for example, the comment defence, it permits expressions of opinion based on reports accurately made. So, of course, one is entitled to defend a report as comment, to put in the report and then make com on the conduct in question and that, in fact, happened in relation to the second article in relation to sensational allegations. In my submission, those parts that summarise the evidence are reports of the proceedings in the royal commission. Your Honours, the next point in the article itself, again quoting from the evidence continues - - -

BRENNAN CJ: We have read it a few times now.

MR McCLINTOCK: I am sure your Honours have. I have, unfortunately, your Honour, myself, probably not as often as your Honours. But the last and key point, your Honour, is it was in the fourth column where it says, the paragraph which refers back to "it may be criminal rather than civil" and the reference in the following paragraph to "these officers". There, in my submission, it is clear that they are talking about either Baker and Reichert or if there is any ambiguity about it, it is an ambiguity that comes from the transcript.

Your Honours, the article goes on and this may not - this does affect it, in the material that appears in what is the fifth column but, of course, appeared on a different page, to set out the material and then it goes on in about an inch below the start of that one:

Mr Simmons said he was involved in the "events" that led to the resignation of Mr Baker and Mr Reichert, but it was another executive, Mr Michael Hamilton, who sought their resignation.

Your Honour, if there is any doubt about this, that it is the resignation of Baker and Reichert being talked about in the material that had gone before, that, in my submission, concludes it in favour of it being merely Baker and Reichert.

Your Honour, the article then goes on, of course, to deal with the Melbourne joint venture and, again, in terms that are literally accurate and, in my submission, accurate in the spirit as well, and then to set out the reference to Mr Chakravarti and his departure from Beneficial. Now, this is the final and, in my submission, key point in relation to this. It says that he left Beneficial late last year. The reader was reading this on 15 July 1992. He knows that the men who have resigned - he knows that the point about differences of opinion was made in Parliament on 7 August 1990.

Now, if he had any doubt about it, he would then know that that man, Mr Chakravarti, is not one of the ones who had resigned because he did not resign until late 1991. The Premier was talking about resignations and differences of opinion in August 1990. I might say this, your Honour, it simply says, "also left Beneficial late last year", rather than anything else.

Your Honours, in my submission, this is a fair report of - this is an accurate report of the evidence given in the royal commission. Your Honours, in my submission, the newspaper could have done better in relation to that. To require any higher standard would mean that there would be virtually nothing that would be covered by this defence, in my submission, and that is the factual question, of course.

Your Honours, the next point is, of course, the effect of section 7 of the Wrongs Act 1888 and the question is the effect of the reasonable doubt. The question in relation to section 7 of the Wrongs Act is, of course, first, does section 7 have any application at all as opposed to the defence of common law qualified privilege; and, second, does the proviso - does the section operate to some way modify or cut down the privilege available, in my submission, at common law.

Section 7, your Honour, of course, has its genesis in the legislation of 100 years ago and I can say this, the reason why there is very little authority on it, or upon the construction of the reasonable letter or statement, is that the section seems to have been set aside as a dead letter almost immediately that it was passed by the legislature. Mr Spencer Bower took the view that the legislation was entirely unnecessary and did not do anything that had not already been done, but I will come to that.

KIRBY J: Presumably, the purpose was to try to encourage the media with their considerable power to allow somebody to put another point of view, something that your client seemed extremely reluctant to do, though the letter was brief, to the point and save in one particular, quite accurate.

MR McCLINTOCK: Or two particulars, your Honour, it was quite accurate. In two particulars, it was inaccurate and it also contained - - -

KIRBY J: Why could you not have published it?

MR McCLINTOCK: Because, your Honour - the answer is not why could not we have published it; it was whether it was a reasonable letter or statement giving a contradiction or explanation. One reason why we could not have published it in fact was that it contained a serious - - -

KIRBY J: The other inference is that you were running what one might call a campaign, that is the other possible inference.

MR McCLINTOCK: One cannot draw an inference like that from - - -

KIRBY J: It did not fit in with what you were serving up to your readers.

MR McCLINTOCK: Your Honour has only evidence of two articles and one cannot, with respect, say that is a campaign.

KIRBY J: I am just picking up on Justice McHugh's points to you earlier.

MR McCLINTOCK: The reason why we could not publish, in fact, your Honour, was it contained an allegation of perjury against Mr Simmons. But I will come to that when I come to deal with that particular part of the proviso.

Your Honour, the first point in my submission about section 7, your Honours will see that it provides:

(1) A fair and accurate report published in any newspaper, radio or television of the proceedings of -

.....

(c) a meeting of any royal commission, select committee of either House of Parliament;

.....

shall be privileged unless it is proved that the report or publication was published or made maliciously:

Then it goes on to set out the provisos. Of most significance, your Honours, is proviso (c) which says:

nothing in this section shall be deemed or construed to limit or abridge any privilege now by law existing, or to protect the publication of any matter not of public concern -

So the position that the legislation, clearly in my submission, adopts is that it is not limiting any - - -

BRENNAN CJ: Where did you just quote from?

MR McCLINTOCK: I am sorry, your Honour, I read from sections 7. Your honour will see that it has a proviso and there are three paragraphs of the proviso. This was paragraph (c).

BRENNAN CJ: I see.

MR McCLINTOCK: It says:

nothing in this section shall be deemed or construed to limit or abridge any privilege now by law existing -

Now, the intention, in my submission, obvious enough from that provision, was not in any way to restrict any defence of privilege that was then available to a newspaper. At that time - - -

KIRBY J: But that has to be read in the context of (b) and giving (b) work to do, otherwise it is ridiculous. You would read (b) out of the Act of Parliament which Parliament has taken the trouble to enact.

MR McCLINTOCK: That may be the case, your Honour, but the words in section 7 - the words in the proviso (c) are quite unequivocal and they say "nothing in this section" and that obviously includes (b) - - -

KIRBY J: Yes, but it has to be read with (b).

MR McCLINTOCK: But, your Honour, it is saying nothing in (b). It says "nothing in this section" and one could equally read it as "nothing in subsection (b) above" "shall be deemed or construed to limit or abridge any privilege now by law existing". It says in clear terms - your Honour, that may well - - -

KIRBY J: It says it in clear terms in the context of (b) that has to be given work to do.

MR McCLINTOCK: Your Honour, if it is a consequence that there is no work for (b) to do because of those words, that is the consequence.

KIRBY J: That is suggesting that Parliament is ridiculous and I do not think we should infer that.

MR McCLINTOCK: Your honour, that was the view - I hate to say it, but that was in fact the view taken by the commentators immediately after this legislation was passed in the 1880s. I will take your Honours - - -

KIRBY J: Notwithstanding that, the South Australian Parliament much later enacted (b).

MR McCLINTOCK: It adopted it - it followed on in the 1890s very soon after the legislation had been passed there and it then re-enacted it in the 1936 Wrongs Act. But the first question, of course, is whether evidence being given before a royal commission is in fact a meeting of a royal commission and, in my submission, taking evidence is not such a meeting. In that situation, it leaves room for the common law and for the section to operate.

KIRBY J: Mr Gray puts that argument too. You agree with him there?

MR McCLINTOCK: I think I do, your Honour, because it does not mean, though, of course that there is no protection; it means there is a common law protection to which the proviso (b) does not apply.

BRENNAN CJ: What is the protection?

MR McCLINTOCK: The protection is, your Honour, the common law qualified privilege to publish an accurate report of proceedings of public concern.

BRENNAN CJ: Where do you find that?

MR McCLINTOCK: Your Honour, I find it in a number of cases, the most important of which is - could I first take your Honours to - in a number of cases, I would like to go to - - -

GUMMOW J: The statute in section 7 is narrow, is it not, because it need not be a public concern.

MR McCLINTOCK: I beg your pardon, your Honour.

GUMMOW J: Section 7 is different from common law. Section 7 operates regardless of public concern.

MR McCLINTOCK: Your Honour, there is the end of section (c) which says:

or to protect the publication of any matter not of public concern and the publication of which is not for the public - - -

McHUGH J: Yes, but this may be one occasion on which you can safely disregard what Parliament has said there, for this reason, that those words do not appear anywhere in section 7 but they did appear in the original English legislation. It had to be a publication which was for the public benefit and that is not there any more, is it, in 7?

MR McCLINTOCK: I am sorry, your Honour, I thought it was in proviso (c).

McHUGH J: It is there is proviso (c), that is the point I am making to you, but the substantive defence itself referred to - if you go back to, what was it, the 1886 legislation or the 1881 legislation, it required the matter to be published for the public benefit and that proviso in (c) was understandable in that context. But Parliament has deleted the requirement in the substantive provisions about publication having to be for the public benefit, then it has inadvertently left in this bit in relation to - certainly the last limb of (c). It has no work to do.

MR McCLINTOCK: Your Honour, if that is the case, one could equally well say that (b) has no work to do. The position taken from the very earliest days, in fact, was the entire section had no work to do. Could I take your Honours to Spencer Bower, and I will hand up the extracts of the - your Honours will see that, if your Honours go towards the back of the materials I have handed up, there is a section headed "Appendix XV." I am going to take the convenient, or the inconvenient course of working backwards through this material, because Spencer Bower himself refers back to earlier materials.

Your Honours will see - it will be about the fourth or fifth page in - there is a section headed "Appendix XV. The privileges conferred by legislation on newspaper defamation." It is page 405 of the materials. There your Honours will see, on page 405, that there is a reference there to Part XIV of Mr Spencer Bower's code and, above that, in the second line, to the Acts of 1843, 1881 and 1888 and, in (C) - your Honours will see five capital letters, one is (C):

Newspaper reports of certain proceedings of public meetings and authorities, and publications of certain official documents, on which privilege is conferred by sect. 4 of the Act of 1888 (Article 54).

I will take your Honours to Article 54. That is the predecessor of the Act we are talking about. On page 408, Mr Spencer Bower comes to deal with (C), and the proposition for which I rely upon this passage is that the section itself does not work and, in fact, has been treated as such ever since it was passed. On page 408, at about halfway down the page, Mr Spencer Bower said:

In the case of publications which form the subject of sect. 4 of the Act of 1888, and of Article 54, the legislature no doubt thought, and with some justification, that they were enacting in favour of newspapers something in excess of and beyond the ordinary law. As above noted, the statute purports to be an amending Act, and the third proviso to the section is that "nothing herein contained shall be deemed or construed to limit or abridge any privilege now by law existing," that is, any immunity legally attaching to the publication in question by whomsoever made. The amendments, therefore, not being in the direction of curtailment or "privilegium" (in the early sense of the word) against newspapers (see App. VIII, Sect. 1, ante), must have been intended to extend the law in their favour. The question is whether the section has any such effect as intended. In 1888 it was thought by many lawyers, but, as I conceive, wrongly even at that date, which was before Allbutt v. The General Medical Council (1889) 23 Q.B.D. 400, was decided, that no publication of any report of a public meeting, or of any public or official document, was protected. This arose from the initial error of supposing that reports of particular proceedings stood on their own basis, and formed classes of themselves, - a mistaken attitude of a very common type in English jurisprudence. This was the reasoning. To publish a report of a judicial proceeding has been held lawful or excusable: the like has been held as to a parliamentary proceeding. No court has definitely decided that a publication of a report of a public meeting, or of any other kind of proceeding than the above, is protected: therefore it is not. No one then seemed to realize - (and the general failure to do so was encouraged by all the treatises on torts and on defamation, in the arrangement of which each of the above classes is marked of as sui generis) - that judicial and parliamentary proceedings are allowed to be reported, not because they are judicial and parliamentary, but because they are instances illustrations or cases of the type of subject as to which the reporter and the public have a common interest in communicating and receiving information respectively. It is submitted that the reasoning in note (a) to Article 35 (vii) clearly establishes this proposition, and justifies the publications in question being included in that Article, as merely some, amongst other, illustrations of the operation of the governing principle stated in Article 34, instead of their being made the subject of independent Articles, as if the courts had dealt with them as something apart, - something not based upon any theory, or subsumed under any rule, like the publications protected by the "sit pro ratione voluntas" of Parliament.

If the doctrine contended for is correct, - that is, if the sole test to be applied is whether the publication of any report or other document is such as to inform the public mind on questions as to which it is fit and proper that they should be so informed, it follows that sect. 4 is quite unnecessary; it does no harm and it goes no good to newspapers, or to the community at large; it effects no change whatever in the ordinary law. It would have done so if, without qualification -

and so on. Further down the page, the learned author, referring to the second proviso, dealt with - but in terms that I do not think I need take your Honours to - - -

McHUGH J: Well, you should, because what he says there is not correct in the light of our decision in Howe v Lees. He says that a refusal or neglect to publish would, at common law, be amongst other possible proofs of malice. Now, this Court decided in Howe v Lees that a refusal to withdraw or apologise for publishing something is not evidence of malice at all.

MR McCLINTOCK: Your Honour, there are circumstances where a refusal to - where, when the falsity of the material is pointed out in convincing terms, that a refusal to retract can be evidence in malice, and Howe v Lees, as I recall it, does not stand for a contrary proposition. It may not be very good evidence of malice, but it can be - and I think Horrocks v Lowe says so - it can be some evidence of malice.

McHUGH J: Well, I think Howe v Lees says to the contrary, but I have not read it for years.

MR McCLINTOCK: Your Honour, in any event, over the page the learned author says - and this is in the third paragraph on page 410, says:

The result is that, at its best, the section, though intended otherwise, is a mere restatement of common law rules, and, in that aspect, is as undesirable as those "homoeonomies" to which Bacon refers (De Angm. Scient., Book VIII, Aph.60), where two statutes idem sonant, one of which, he thinks, just as much as one of two "antinomies," should be expunged.

He then went on to criticise the drafting of the section as well, but that, of course, need not concern your Honours here. Your Honours, could I then go back to make good the proposition in relation to - - -

KIRBY J: How does the proviso in (a) fit in with your proposition? Is there anything you can get from that? I just baulk at the idea that (b) is solemnly enacted after these words by a local Parliament not intending it to have any effect; doing no good and no harm. Does (a) have any work to do? Because I assume that you could get indecent or blasphemous matter in the course of a House of Parliament or - - -

MR McCLINTOCK: Yes. Your Honour, I would have thought that it - - -

KIRBY J: (a) would have some work to do.

MR McCLINTOCK: Your Honour, I would have thought, in fact, not. Because of (c), if one was permitted to publish the material otherwise, the fact that it was blasphemous would not prevent you from publishing it.

BRENNAN CJ: But reading what you have just read to us there, is it not clear that what Spencer Bower is saying is that this sort of publication is already covered by qualified privilege?

MR McCLINTOCK: Yes, your Honour.

BRENNAN CJ: And, therefore, you did not need to extend this protection for newspapers in the way that they have done. That being so, really, it is quite unnecessary, although everybody else except Spencer Bower thinks that it was necessary.

MR McCLINTOCK: Your Honour, I do not think anyone else does. Mr Odgers, as I read him, was not saying that the section was necessary either.

BRENNAN CJ: Well, everybody else was thinking that the qualified privilege defence did not run to the reporting of proceedings other than parliamentary and judicial.

MR McCLINTOCK: Mistakenly so, yes, your Honour.

BRENNAN CJ: Mistakenly so, according to - - -

MR McCLINTOCK: Spencer Bower.

BRENNAN CJ: Well, you may say to me "mistakenly", because that is the view that I ultimately took in Theophanous.

MR McCLINTOCK: Stephens. I think it was Stephens, your Honour.

BRENNAN CJ: In Stephens, yes. But that was not the current view at the time that this legislation was passed, or, indeed, for some years afterwards.

MR McCLINTOCK: Your Honour, if it was not actually current - and, in my submission, it was - the next passage in Spencer Bower that I want to take your Honours to establishes this - - -

McHUGH J: Well, before you do, let me - sorry - - -

MR McCLINTOCK: No, please, your Honour.

McHUGH J: Why is not the position that everything that Spencer Bower says is totally irrelevant to the Wrongs Act of South Australia? The reason for that is, he was talking in the context of section 4 of the Law of Libel Amendment Act , and it was talking about public meetings and meetings of vestries, town councils, school boards, board of guardians and so on. In section 7, the words are "public meetings at large", is it not?

MR McCLINTOCK: I am sorry, your Honour, "public meetings" - - -

McHUGH J: "Public meetings at large." So, if I call a public meeting to complain about the government of New South Wales, or anywhere else, you can publish a letter to the - you can publish a report of that to the world. Now, you could not do that at common law, surely; but any citizen could call a public meeting, and at common law a fair report of it would be protected?

MR McCLINTOCK: Arguably, your Honour, it would be, and that is the point that is dealt with there.

MR McCLINTOCK: Well, even if you are right about that, what about (d):

a meeting of shareholders in any bank -

Now, a fair report of that is not protected at common law or even under a statute in any other State, is it?

MR McCLINTOCK: Your Honour, a fair report of a meeting of the shareholders of the State Bank of South Australia might well be covered by qualified privilege at common law in relation to publication within South Australia, it being a bank owned by the citizens of South Australia. It might well be, your Honour. It depends on the circumstances. It may be an extension; it might not be an extension.

McHUGH J: But it talks about:

a meeting of shareholders in any bank or incorporated company.

So, a meeting of shareholders of a private company,a fair report of that, under this statute, can be published to the world. It could not possibly be defended at common law, could it?

MR McCLINTOCK: Your Honour is correct, it could not be. But in relation to publications of the evidence before royal commissions, that, of course, could be, and that is the proposition that I am, in fact, coming to make to your Honours now by taking - I want to take your Honours - - -

McHUGH J: But all I am putting to you is it is erroneous to say that section 7 does not add to the common law. It obviously adds to the common law in very considerably ways, both in terms of a public meeting, and in terms of meetings of shareholders of banks or incorporated companies, just to name two things.

MR McCLINTOCK: Yes, your Honour. But there are things in there such as either House of Parliament.

McHUGH J: I know, and that was in the old Law of Libel Amendment Act of 1888.

MR McCLINTOCK: Your Honour, could I take your Honours to pages 201 to 202 of the material in front of your Honours, where Article 54 of Mr Spencer Bower's code is set out and, as note (m) at the bottom of page 201 says - the word "verbatim" comes up again:

sect. 4 of the Law of Libel Amendment Act, 1888, transcribed verbatim -

McHUGH J: That is right.

MR McCLINTOCK: With one exception. Over the page, in the first paragraph within the note, he said:

If the general law as to reports of public meetings, and the like, is correctly stated in note (a) to Article 35 (vii), it would appear that this enactment, though no doubt intended to confer a privilege on the class of newspaper proprietors, has not achieved that object, or extended the area of publications to which defeasible immunity already attaches at common law. For, at common law, the test is whether the publication is of matter which is fit and proper that the public should be informed of; and this, too, is the limit imposed by the section -

and so on. I do not think I need read your Honour anything further there. The earlier reference to Article 35 appears on page 127 of that material, and there set out in note (a) is what the learned author says about the circumstances of qualified privilege at that time, which I would say would cover evidence before a royal commission.

Could I take your Honours to Perera v Peiris (1949) AC 1 - I am not sure how to pronounce the second name - it is in our bundle of authorities, and it is a 1948 decision of the Privy Council.

KIRBY J: Which tab is it?

MR McCLINTOCK: Tab 12. Your Honours, it was an appeal from Ceylon, but the tribunal which was said to be the subject of the report was the Bribery Commission and, as the headnote says:

a commission set up under statutory powers by the Governor of Ceylon in August, 1941, to inquire into questions relating to allegations that gratifications had been paid to certain members of the then existing State Council of Ceylon for the purpose of influencing their judgment and conduct in transactions in which they, as members of the Council, were concerned.

And so on. The relevant materials appear at pages 20 to 21 of the report and, if I could pick it up - perhaps I could pick it up on the previous page, your Honour, page 19. There was a question about Roman-Dutch law here but, as I understand the decision, their Lordships dealt with it by saying that Roman-Dutch law had absorbed - the relevant law had absorbed - - -

GUMMOW J: Sir Valentine Holmes' argument on page 9 is often referred to, is it not? He is the expert in this field.

MR McCLINTOCK: Yes, it is, your Honours. But on page 19, in the paragraph that commences there, their Lordships said this:

In Roman-Dutch law animus injuriandi is an essential element in proceedings for defamation. Where the words used are defamatory of the complainant, the burden of negativing animus injuriandi rests on the defendant. The course of development of Roman-Dutch law in Ceylon has, put broadly, been to recognize as defences those matters which under the inapt name of privilege and the apt name of fair comment have in the course of the history of the common law come to be recognised as affording defences to proceedings for defamation. But it must be emphasized that those defences or, more accurately, the principles which underlie them, find their technical setting in Roman-Dutch law as matters relevant to negating animus injuriandi. In that setting they are perhaps capable of a wider scope than that accorded to them by the common law. Decisions under the common law are, indeed, of the greatest value in exemplifying the principles but do not necessarily mark out the rules under the Roman-Dutch law. The "gladsome light of Roman jurisprudence" once shone on the common law: repayment to the successor of the Roman law should not take the form of obscuring one of its leading principles. Their Lordships' attention has not been drawn to any case under the Roman-Dutch law or the common law which exactly covers the point at issue. Both systems accord privilege to fair reports of judicial proceedings and of proceedings in the nature of judicial proceedings and to fair reports of parliamentary proceedings, and much time might be spent in an inquiry whether the proceedings before the commissioner fell within one or other of these categories. Their Lordships do not propose to enter on that inquiry. They prefer to relate their conclusions to the wide general principle which underlies the defence of privilege in all its aspects rather than to debate the question whether the case falls within some specific category. The wide general principle was stated by their Lordships in Macintosh v Dunn to be the "common convenience and "welfare of society" or "the general interest of society," and other statements to much the same effect are to be found Stuart v. Bell and in earlier cases, most of which will be found collected in Mr. Spencer Bower's valuable work on Actionable Defamation. In the case of reports of judicial and parliamentary proceedings the basis of the privilege is not the circumstances that the proceedings reported are judicial or parliamentary - viewed as isolated facts - but that it is in the public interest that all such proceedings should be fairly reported. As regards reports of judicial proceedings reference may be made to Rex v. Wright where the basis of the privilege is expressed to be "the general advantage to the country in "having these proceedings made public," and to Davison v. Duncan, where the phrase used is "the balance of public "benefit from publicity"; while in Wason v. Walter the privilege accorded to fair reports of parliamentary proceedings was put on the same basis as the privilege accorded to fair reports of judicial proceedings - the requirements of the public interest.

On page 21:

Reports of judicial and parliamentary proceedings and, it may be, of some bodies which are neither judicial nor parliamentary in character, stand in a class apart by reason that the nature of their activities is treated as conclusively establishing that the public interest is forwarded by publication of reports of their proceedings. As regards reports of proceedings of other bodies, the status of those bodies taken alone is not conclusive and it is necessary to consider the subject matter dealt with in the particular report with which the court is concerned. If it appears that it is to the public interest that the particular report should be published privilege will attach. If malice in the publication is not present and the public interest is served by the publication, the publication of the report must be taken for the purposes of Roman-Dutch law as being in truth directed to serving that interest. Animus injuriandi is negatived.

On a review of the facts their Lordships are of opinion that the public interest of Ceylon demanded that the contents of the report should be widely communicated to the public. The report dealt with a grave matter affecting the public at large, namely, the integrity of members of the Executive Council of Ceylon, some of whom were found by the commissioner improperly to have accepted gratifications. It contained the reasoned conclusions of a commissioner who, acting under statutory authority, had held an inquiry and based his conclusions on evidence which he had searched for and sifted. It had, before publication in the newspaper, been presented to the governor, printed as a Sessional Paper and made available to the public by the Governor contemporaneously with a Bill which was based on the report and which was to be considered by the Executive Council. The due administration of the affairs of Ceylon required that this report in light of its origin, contents and relevance to the conduct of the affairs of Ceylon and the course of legislation should receive the widest publicity. As regards the newspaper, the report was sent to it by the authorities in the ordinary course. Nothing turns on any implied request to publish - that would, in their Lordships' opinion, be relevant only if malice were in issue. Their Lordships take the view that the respondents as respects publication stand in no better and no worse position than any other person or body in Ceylon. A newspaper as such has in the matter under consideration no special immunity. But it would be curious to hold that either the editor or the proprietor of newspaper was disqualified -

and so on. I do not think I need read any further. In my submission, while it deals with the report, it is authority for the proposition that proceedings of bodies such as royal commissions are the subject of privilege and, if one applies it here, the Jacobs' Royal Commission, as is notorious, was dealing with the circumstances of the collapse of the State Bank of South Australia, which collapsed with losses, one recalls, in excess of $3 billion.

GAUDRON J: But did you plead it as at common law? You pleaded the statutory defence, did you not?

MR McCLINTOCK: We pleaded both, your Honour, as I believe. I think it is volume 1, page 47 or thereabouts, your Honour. Yes, paragraph 9, your Honour:

The defendant says that the articles complained of constitute a fair and accurate report of the proceedings of the State Bank Royal Commission and as such are privileged pursuant to Section 7 of the Wrongs Act (SA) and at common law.

The point was pleaded - was both pleaded, your Honour.

KIRBY J: Is all of this designed to show that you have a "fair and accurate report" defence, but it is not bound up with the proviso in (b). You say, first of all, (b) is expunged by (c) but, even if it exists, this is not a hearing and, even if it is a hearing or a meeting, that you have got a general common law entitlement which has no riders attached?

MR McCLINTOCK: Yes, I do say that, your Honour; although, I do not say that proviso (c) expunges (b), not directly, anyway. I say that (c) preserves the privilege at common law which exists. Perera v Peiris says so.

KIRBY J: So, you get it either way.

MR McCLINTOCK: Yes, and that, therefore, we need not concern ourselves with whether the letter was reasonable or not but I will, of course, come to deal with that. There are other authorities that deal with reports and I rely upon them. They are set out in paragraph 32 of our submissions and I do not think I need read them to your Honours. Could I then go, on the assumption that we are bound, and bound only by section 7, or have available that section 7 only.

KIRBY J: Your only answer to why you did not publish it was that you did not have to.

MR McCLINTOCK: No, your Honour, because it was not reasonable. The section says:

reasonable letter or statement by way of contradiction or explanation -

and, in my submission, it is not a reasonable explanation or statement, and there are three reasons why. The first two are subsets of a suggestion that the letter was misleading, inaccurate, and I will need to take your Honours back to the letter itself, unfortunately. But before I come to the letter, could I put this proposition, which is this: first, as a number of your Honours pointed out to my learned friend, Mr Gray, this proviso only comes to be considered when it has been found the report is accurate.

Now, it is from that fact the meaning of the words in the section, "contradiction and explanation", are to be understood. It gives a right not, in my submission, to attack the accurate report as accurate, but to attack the statement made; that is, you cannot attack the fact that the evidence was given, for example, but you can attack the accuracy of the evidence. That is what - - -

GUMMOW J: Is "a fair and accurate report" for section 7 different to a fair report at common law?

MR McCLINTOCK: No, your Honour, in my submission, they both simply require accuracy.

GUMMOW J: So, the word "inaccurate" is just surplus, really.

MR McCLINTOCK: Well, "fair at common law" means accurate, and "fair and accurate" is a - well, one of them is surplusage, your Honour. One of them is surplusage. But, in my submission, they both simply require accuracy - substantial accuracy - and no more. Your Honour, the words were:

by way of contradiction or explanation of such report or other publication -

and, in my submission, as I said, it allows an attack on what was said, but not the fact that it was said.

Your Honour, the next proposition is that it was not reasonable, one, because it attacked the reporting which was, in fact, accurate and, second, because it contained an additional statement that was not, in fact, correct. The document itself, your Honours, appears, of course, in volume 4, at page 862, and it comes down and comes down solely to the meaning of the third paragraph. Except, perhaps, for the request to publish on page 1, there is nothing in paragraphs 1, 2 and 3 that I would contend are unreasonable. But, in my submission, "reasonable" does not mean misleading or inaccurate and, in my submission, there are two inaccuracies here. The first inaccuracy is this; Mr Chakravarti says that he did:

not believe that Mr. Simmons either intended to make or did make any allegation to the Premier (or to the Royal Commission) of criminal or civil misconduct which extended to me.

Well, Mr Simmons had, in fact, made such an allegation to the royal commission, as was subsequently found by the learned trial judge in these proceedings, so there was an inaccuracy in that respect. There was an inaccuracy in a second respect, where the paragraph says:

I do not believe that Mr. Simmons either intended to make or did make any allegation to the Premier -

That also, your Honours, is inaccurate. The fact of the allegation to the Premier was admitted on the pleadings of this case; that is, it was admitted that Mr Simmons had, in fact, as a matter of objective fact, made that allegation to Mr Bannon on the dates in question.

BRENNAN CJ: It was admitted, you say, on the pleadings.

MR McCLINTOCK: On the pleadings, your Honour. It was taken to be admitted on the pleadings after a debate which took place between those appearing for the parties at the trial before his Honour, and I will need to explain a little to your Honour. Please forgive me, the pleadings history of this matter is a little tortured, but if I take your Honours, first, to page 46 of volume 1, which is where the defence is set out. Your Honours, will see that in paragraph 10, on page 46, it pleads the supposed Polly Peck imputation and then, over the page, it sets out particulars. Now, 10(a)1 and 10(a)3 were deemed to be admitted; that is, that:

On 30th July 1990 the chairman of the State Bank of South Australia (Mr Simmons) believed there was a question of either criminal or civil misconduct to be looked at in relation to four Beneficial executives including the plaintiff.

GAUDRON J: Why were they deemed to be admitted? They are particulars, they are not pleadings.

MR McCLINTOCK: Because in South Australia, your Honour, under Part 46, rule 12 - or rule 46(12) - you have to plead to particulars, and there was a pleading here which the trial judge found was defective and operated as a deemed admission. The plaintiff then made an application to amend. The trial judge said, "You can have the amendment, but the price will be an adjournment, to enable the defendant to call Mr Simmons", who was overseas." The plaintiff then said, "We do not press the amendment and we accept that we are bound by the deemed admissions set out in these paragraphs." I will take your Honour to the passages. But, your Honour, the paragraph 10(a)1 was deemed to be admitted. Paragraph 10(a)3:

Mr Simmons believed that preliminary audit of loans to executives of BFC revealed that the plaintiff, Baker, Eric Reichert and Gary Martin all had loans which were not approved and not authorised and in excess of agreed benefits.

GAUDRON J: I am sorry, I am just lost.

MR McCLINTOCK: I am sorry, your Honour, I have not explained it well.

GAUDRON J: I am lost right at the beginning. What rule says you have to plead to particulars or they are taken to be admitted?

MR McCLINTOCK: Your Honour, it is rule 46.12.

GUMMOW J: 46.12?

MR McCLINTOCK: It is 46.12.

BRENNAN CJ: Order 46, is it? Order 46, rule 12.

MR McCLINTOCK: Order 46, rule 12, I am sorry, your Honour.

GUMMOW J: We have not been favoured with that. We have only been favoured with Order 46, rule 19.

MR McCLINTOCK: I think it is rule 46, your Honour, sub-rule 12 - well, I am not quite sure but - - -

BRENNAN CJ: What Order?

MR McCLINTOCK: It says:

A defence in a subsequent pleading is to specifically admit or deny including particulars.

That is the heading. I will hand up some copies of the rule, your Honour.

GUMMOW J: Better sooner than later.

MR McCLINTOCK: Your Honour, please forgive me. This is tortuous, but to make good the proposition that there was an admission on the pleadings - - -

GAUDRON J: Well, if you want to make good that admission, you had better start right from the beginning and take us - if you want me to understand it - right at the beginning, with the rule.

McHUGH J: It is so subtle, Mr Baron Parke would be thrilled by it, I think.

KIRBY J: We are not unfamiliar with torture.

MR McCLINTOCK: Mr Justice Meagher once said to me, your Honour, that was very high praise indeed.

A party in his or her defence or any subsequent pleading -

this is a reading of the rule -

(1) Shall not plead a mere joinder of issue on any question of fact.

(2) Shall specifically admit or deny every allegation of fact (including particulars) -

including particulars -

in the pleading to which the defence or subsequent pleading relates, and allegations which are not specifically denied shall be deemed to be admitted.

Now, the consequence of that, your Honour - that last sentence - is that if you do not deny - if you merely state that you do not admit a particular, in South Australia you are taken to admit it. That is the rule that has operated here for 10 years. Paragraph (3) goes on:

May state that the party does not know and therefore cannot admit a particular fact alleged, in which case the particular fact shall be deemed to be denied.

Now, the significance is that, under the South Australia pleading rules, you must say that you do not know. If you do not say you do not know, you are deemed to have admitted it under rule 2.

KIRBY J: Do the pleadings have to be sworn?

MR McCLINTOCK: I do not believe they do, and I do not think the pleadings in this one were sworn. But in any event - - -

GUMMOW J: This is described as a "major innovation."

MR McCLINTOCK: It is described as a "major innovation," your Honour. I heard what your Honour said about it yesterday and it - but it is the position down here, and it was the position that was taken during the trial of these proceedings, and the consequence was that these particulars were admitted by the plaintiff. I will need to take your Honours just to the rest of them. Your Honour will see 10(b)1:

Mr Simmons met Mr Bannon on the 30th July 1990.

10(b)2:

Mr Simmons told Mr Bannon there was a question of either criminal or civil misconduct to be looked at in relation to four Beneficial executives, including Mr Baker and Mr Reichert, Mr Gary Martin and the plaintiff.

10(b)3, on page 48:

Mr Simmons told Mr Bannon that a preliminary audit of loans to executives of BFC had revealed that the plaintiff, Baker, Eric Reichert and Gary Martin all had loans which were not approved and not authorised -

Dropping down the page, 11(a)1:

Simmons suspected that the plaintiff may have been engaged in criminal conduct with a loan or loans made by BFC -

2 was not admitted in fact. 11(a)3:

Mr Simmons believed that there was a question of either criminal or civil misconduct to be looked at in relation to four BFC executives, including Mr Baker -

and so on. On page 50 appears 6 and 8 and they were also, in fact, admitted as well. That comes from the first step in what I described as a "tortured journey" - is the reply, but if your Honours go to the sections of the reply that appear on pages 73, your Honours will see that in 4.3:

That he does not admit the particulars to sub-paragraph 10(a)1 and 3.

Then he goes on to say:

That he does not know and therefore cannot admit 10(a)2.

That was taken to be an admission of 10(a)1 and 3.

GAUDRON J: Well, it is ridiculous, is it not?

MR McCLINTOCK: Your Honour, it was conceded by the plaintiff that this was the case.

GAUDRON J: But it is ridiculous to take advantage of it and, if I may say so, to sit here now, after all this time, to be taking advantage of something like that, when the plainest statement is does not admit, rather than have an amendment made to the pleadings and if - for my part, I would amend them here and now - seems to me very much like an abuse of process.

MR McCLINTOCK: Your Honour, the reason why there was no amendment was because the trial judge made it clear to counsel appearing for the plaintiff that the price of the amendment would be an adjournment. The reason why there would be an adjournment was that Mr Simmons was not in Australia and, therefore, the defendant would have been prejudiced because he could not call Mr Simmons to prove these matters. Now, to avoid the adjournment, the plaintiff abandoned the amendment and admitted those matters, or stood by the admission that he had made.

GAUDRON J: Well, trial in ambush in South Australia seems to me to have a whole new dimension.

MR McCLINTOCK: Your Honour, there was not any trial by ambush in this respect. I mean, one suspects in this case that there may have been several sauces for the goose and several sauces for the gander in the way the pleadings were conducted in this trial, and the way the trial was conducted.

GAUDRON J: Well, let me say, it is somewhat disconcerting to find that special leave has been granted to elucidate principles of general law but, at the end of the day, you find that you are concerned with forensic games.

MR McCLINTOCK: Your Honour, this was not a forensic - - -

GAUDRON J: Whether the game was good goose or good gander, it is quite disconcerting, I must say.

MR McCLINTOCK: When it came down to it, your Honour, it was not a game for my client. My client wanted to prove those matters, for several reasons. It could not prove them because Mr Simmons had left for overseas.

GAUDRON J: Mr Bannon was not around?

MR McCLINTOCK: I am sorry?

GAUDRON J: Mr Bannon could not be called?

MR McCLINTOCK: Mr Simmons. Mr Simmons, your Honour, was the one who had given the evidence at the royal commission and his - - -

GAUDRON J: Yes, but Mr Bannon could not be - if you wanted to prove the facts, there were other ways of proving it.

MR McCLINTOCK: There may have been, your Honour. There may have been. But could I say this, your Honour; there has been no dispute from the plaintiff that this was the position. There has been no appeal brought from this to the Full Court. The plaintiff has accepted throughout, since the point in the transcript when my learned junior, Mr Harris, was opening the case, that these particulars were deemed to be admitted. I will take your Honours to the particular point. I do not want to labour it, your Honour, because there is an admission on the pleadings, but the particular reference is at - - -

BRENNAN CJ: If we look at what is admitted on the pleadings in the sections you just dealt with, correct me if I am wrong, but is this not in a paragraph which is dealing with the meaning of the words "complained of"?

MR McCLINTOCK: Yes, your Honour. No, I am sorry, your Honour, it is dealing with the particulars of truth of those words. If your Honour goes to page 46, your Honour sees:

insofar as and to the extent that it may be found that the words set forth in paragraph 3 of the Amended Statement of Claim were defamatory of the plaintiff (which is denied) the said words meant and were understood to mean that:

(a)

and then it goes on, and then it sets out - it meant, in other words, were understood to mean that - it sets out particulars there and, then, it makes the allegation that they are true in substance and in fact.

McHUGH J: Right. Well, now, accepting your case at its highest, all they make an admission to is in respect to the plea of justification. These 19th century arguments of yours have got no relevance to the defence of "fair and accurate report". They are not particulars put under "fair and accurate report".

MR McCLINTOCK: No, your Honour, but an admitted fact is an admitted fact. If you admit a fact - - -

McHUGH J: But only for the purpose of the particular pleading, and this particular pleading does not run; it is irrelevant.

MR McCLINTOCK: No, your Honour, with respect, no. There was an allegation that those matters were true - for example, that Mr Simmons had told Mr Bannon - it was in connection with the defence of justification. But once a fact is admitted, it is admitted for every purpose, in my submission, your Honour.

GUMMOW J: Well, that may be question of the construction of this eccentric rule.

MR McCLINTOCK: Yes, it may be, your Honour. But there is a provision in the rules that you are bound to plead the particulars. That happened. The reference, your Honour, to what actually occurred in this case, and the admission actually made, appears at page 615 of volume 3 of the appeal book and - - -

McHUGH J: But all these admissions and assertions are all conditioned upon a particular finding of the words and the making out of a plea of justification.

MR McCLINTOCK: Your Honour, they are conditioned not on a finding as to meaning of words, they are conditioned simply on themselves. They are and they were taken in the trial to be an admission of those facts, that Mr Simmons had told Mr Bannon those matters and that - - -

McHUGH J: The particulars are found in paragraph 10 which itself is conditional to the extent it may be found that the words were defamatory and that they meant and were understood to mean that "the plaintiff was suspected of being involved" et cetera. Well, that finding was never made so the particulars are irrelevant. Any admission to them is also irrelevant. Surely, the admission only goes to that aspect.

MR McCLINTOCK: It is a conditional allegation in that respect but the particulars themselves are not conditional and they were treated by the parties, and this is at page 615, as admitted.

BRENNAN CJ: Those particulars are particulars of meaning in 10(a)1, 2 or 3 and then in the final part of the paragraph, as you pointed out, are true, it is pleaded.

MR McCLINTOCK: Yes, your Honour, but the particulars themselves are not particulars of meanings, they are particulars of truth.

BRENNAN CJ: But the truth is relevant under paragraph 10 only as a defence to the meaning pleaded. If the meaning is not found then the admission does not run.

MR McCLINTOCK: With respect, your Honour, it does run.

BRENNAN CJ: Why?

MR McCLINTOCK: Because once it is admitted, it is admitted. It is a fact that is no longer an issue in the proceedings and that was how the parties to this litigation pleaded it. That appears at page 615 of volume 3, or 614 at line 24 counsel for the plaintiff, says:

The parties have come to a resolution.

This was at the point that the trial judge had said, "If you want to withdraw those admissions, I will grant an adjournment."

Before I tell you what that is, I do want to make it clear that -

I do not need to read your Honour that.

The application to amend is withdrawn. It is made in a more limited sense. I believe that my learned friend will consent to the amendments that I am about to tell your Honour of.

At p.35 of the copy documents, 4.3, on the third line, at the end of that line, to add `1 and 3' so the sentence reads `that he does not admit the particulars to sub-para.10(a)1 and 3' and to add a further sentence to that particular `that he does not know and, therefore, cannot admit particular 10(a)2.

HIS HONOUR: Is that about Mr Simmons' state of mind?

MR HEYWOOD-SMITH: That's about the investigations not being complete. Then at the bottom of that page, 5.3, in effect the same amendment, add `1 and 3' at the end of the line and add a further sentence to 5.3 `that he does not know and, therefore, cannot admit particular 11(a)2'. It has the same effect as the previous one. It's the same. On p.36, para.5.6.1, -

this is referring to the reply, your Honours

delete what appears in that subparagraph totally and replace it with the words `The plaintiff does not know and, therefore, cannot admit particular 1'. On p.38, para.5.6.3, change what appears there presently to read `Particulars 6 and 8 are not admitted' and add a further sub-para.5.6.4 `The plaintiff does not know and, therefore, cannot admit particular 7'. Particular 7 is the same as before. That is the application to amend.

HIS HONOUR: By consent?

MR HARRIS: I consent in so far as I understand that that means that my friend accepts that, where he has not admitted in those paragraphs, that that is now a deemed admission.

HIS HONOUR: I assumed that was the case, not otherwise.

GAUDRON J: All right. Now let us just stop there. A deemed admission. What is a deemed admission? Either it is an admission or it is not an admission. I mean, there may be some reason why you would treat a deemed admission as one that cannot be gone behind in relation to the particular issue to which the deemed admission is relevant. But why would you take - to which it is immediately relevant. If it is deemed admission only?

MR McCLINTOCK: Your Honour, the reference is to the wording of rule 46.12 - - -

GUMMOW J: I know, and maybe the sooner that is explained the better, so there is no repetition of this activity.

McHUGH J: In addition these are, to be quite kind, crazy particulars, are they not? They are in the wrong position. They seem to be pleaded as particulars of meaning and they have got nothing whatever to do with meaning. If they were meant to have any substance as facts one would have expected them to be found after the allegations about true in substance and in fact.

MR McCLINTOCK: Your Honour, the order of them, in my submission, cannot affect it. These were treated as the particulars of the justification of the defendant's Polly Peck imputations at the trial and there was no doubt that the plaintiff, through his counsel, thought he was admitting the truth of those facts when he made the statement that appears on page 615. Thereafter, those issues dropped out of the proceedings in terms of actual proof. No attempt was made to call Mr Simmons or to seek a further adjournment to do so and the case proceeded, and there was no challenge to this either before the trial judge or before the Full Court, on the basis that these particulars were, in fact, admitted. I think there may even have been a reference in Mr Justice Cox's judgment to that fact although - - -

GAUDRON J: Perhaps it does not matter, because what the letter said was that he did not believe that that had happened and, at the end of the day, he was forced with a deemed admission which, whatever else it is, it cannot be a retrospective estoppel - - -

MR McCLINTOCK: Your Honour, it is an admission that operates to establish that one of the statements made in the letter was not in fact the case, that is that if there was any dispute about it Mr Simmons did tell the Premier on 30 July that there was a question of civil and criminal misconduct to be looked at in respect of, amongst others, the plaintiff. Your Honours, that is the point and, in my submission, that letter in - - -

GAUDRON J: One moment, Mr McClintock. Surely, the question of reasonableness is to be determined by reference to the state of affairs known at the time, not by a deemed admission coming about later.

MR McCLINTOCK: Your Honour, reasonableness there is an objective test and when your Honour refers to the state of affairs known at the time, your Honour has to bear in mind that there are two sides to this story. There is the plaintiff. He did not, for example, know - - -

GAUDRON J: There is only one story, though, is there not, and that is the one in your paper?

MR McCLINTOCK: Well, there are two sides to the - - -

GAUDRON J: And only one side has been printed because you would not publish his answer.

MR McCLINTOCK: There are two sides to the knowledge, your Honour. The first side to the knowledge is that my client knew, and knew correctly, that the question at the royal commission had been answered. The journalist was there and took the answer down. Mr Chakravarti certainly, mistakenly, and one must feel some sympathy for him on this point, did not know, because he had read the transcript which was then inaccurate. The fact was that my client was right and, in those circumstances, it was reasonable for it to decline to publish a letter that, in that respect, contained an untrue assertion of fact.

McHUGH J: Arguably, it was not. Let me put this to you. Put at the highest, the only deemed admission that you get here is the deemed admission as to Mr Simmons' belief. That has got nothing whatever to do with what is in the letter because what the letter says, "I, the plaintiff, do not believe that Mr Simmons either intended or did make" - nothing to do with his belief.

MR McCLINTOCK: Your Honour, the admission that I was referring to is the admission that appears on page 47 of the - - -

McHUGH J: Yes.

MR McCLINTOCK: It is 10(b)1 and 2.

Mr Simmons met Mr Bannon on the 30th July 1990.

Mr Simmons told Mr Bannon there was a question of either criminal or civil misconduct to be looked at in relation to four Beneficial executives, including Mr Baker and Mr Reichert, Mr Gary Martin and the plaintiff.

It is not Mr Simmons' belief there. It is the actuality that he met the Premier on that day and told him that there was a question of either criminal or civil misconduct to be looked at.

McHUGH J: Well, I am sorry - - -

MR McCLINTOCK: I am sorry, page 47 of volume 1, it is particular 10(b)1, 10(b)2 and over the page there is 10(b)3 which also is admitted too. The significant one is that Mr Simmons told Mr Bannon.

McHUGH J: Yes, but what I am not following here is paragraph 4.4 of the defence denied that:

The meaning alleged in sub-paragraph 10(b) is not a natural and ordinary meaning of the words either in fact or by operation of law.

Once you deny that, you deny all the particulars of it as well.

MR McCLINTOCK: I am sorry, your Honour, is your Honour referring to any particular - - -

McHUGH J: I am looking at page 73.

MR McCLINTOCK: Yes, your Honour.

McHUGH J: In paragraph 4.4 the plaintiff said that:

The meaning alleged in sub-paragraph 10(b) is not a natural and ordinary meaning of the words either in fact or by operation of law.

That is a specific denial of the allegation in that paragraph. Now that must carry with it a denial of everything that is in the particulars.

MR McCLINTOCK: No, your Honour, because of the bizarre, to an outsider, requirement of rule 46.12 that you must plead specifically to particulars and that if you take the course of not admitting them, you have taken to have admitted them. It is a consequence of 46.12.

McHUGH J: I see that, but I would not read the rule that way. How can that possibly be? If, for example, a pleading alleges that I was driving a car and I denied that particular fact, then you have got some particulars and then the particulars go on and say that the car was of a particular make and so on and I do not deny that as well, you say, "Well you have admitted those facts".

MR McCLINTOCK: That is how it works in South Australia, your Honour, under 46.12. But in any event, perhaps in some ways it does not matter whether it does or does not, because this was, given what occurred in the trial, taken to - in fact, specifically taken to be admitted by the passage I took your Honour to.

Your Honours, there is, in fact, a better answer, which will probably relieve your Honours, in relation to the third paragraph of that letter and that part of it and the reference to - - -

BRENNAN CJ: Just before you leave that, let me just add something to what Justice McHugh has put to you. If one looks at page 73 one sees in paragraph 4.4 the denial of the meaning of the words.

MR McCLINTOCK: Yes, your Honour.

BRENNAN CJ: Then one sees in 4.6 a non-admission of the particulars in 10(b). Well, now, the particulars are particulars of the meaning. What does one spell out of this page 73?

MR McCLINTOCK: Under the rules that apply in South Australia, your Honour, 4.6 is an admission.

McHUGH J: Because he did not allege "does not know"?

MR McCLINTOCK: Because he did not allege "does not know".

BRENNAN CJ: And so, even though it is a question of Mr Simmons meeting Mr Bannon - - -

MR McCLINTOCK: Yes, your Honour.

BRENNAN CJ: So that you deny the substantive pleading and because you do not deny the particulars, you are taken to admit the particulars of that which is denied.

MR McCLINTOCK: That is what the rule says, your Honour.

McHUGH J: Yes, but I mean any problems that arise in this are because of the "crazy way" the particulars are pleaded. They are pleaded as going to meaning and they cannot possibly have anything to do with meaning. They have got to be going to substance so they are in the wrong position.

MR McCLINTOCK: Yes, your Honour, but they were treated by both parties - and there cannot be any dispute about this - they were treated by both parties as if they were admitted and that is the effect of what happened at the passage I took your Honours to. The plaintiff - - -

BRENNAN CJ: What page again was that, Mr McClintock?

MR McCLINTOCK: It was in volume 3, your Honour.

BRENNAN CJ: Do not go to it. Just give me the page.

MR McCLINTOCK: Pages 614 and 615. The debate, which I would not ask your Honours to read, starts earlier, really at 589. That is how it developed that those matters were, in fact, taken to be admitted by the plaintiff from the pleadings in this case. Your Honours, however, there is another reason why, in this respect, it was reasonable not to publish the letter in question. That is, there was another basis on which the defendant could fairly have concluded that another section of that paragraph was, in fact, misleading. The basis is this. It is the same section:

I do not believe that Mr Simmons either intended to or did make any allegation to the Premier.....of criminal or civil misconduct which extended to me.

The journalist had heard Mr Simmons say on oath that he had done just that and therefore that was the basis that the newspaper could take into account in determining that that assertion there was, in fact, objectively untrue.

McHUGH J: That seems to me to create real problems. That would mean that the newspaper would have to make a judgment call in terms of the accuracy of the defamed person's explanation or contradiction.

MR McCLINTOCK: No, your Honour, partly because there is no explanation or contradiction there. There is simply a statement that Mr Simmons did not make the allegation to the Premier.

McHUGH J: No, he said "I do not believe that he intended to or did make it".

MR McCLINTOCK: That belief, your Honour, was incorrect. He did make the allegation.

McHUGH J: No, his belief. The fact may be, but he may honestly have held the belief. He obviously did.

MR McCLINTOCK: Your Honour, in so far as thisis an allegation of fact made by the plaintiff it is an allegation that is, in fact, incorrect and one cannot simply dress up a statement - it is like when one is dealing with meanings in defamation cases - and say "I believe that a state of facts exist" and justify it on the basis that one simply had the belief, especially when it turns out that while the belief may have been genuinely held at the time, that it is, in fact, an inaccurate belief.

The second aspect of this matter, your Honour, is that - the last aspect on this point is this. This paragraph conveys a quite serious imputation about Mr Simmons. The imputation is when Mr Chakravarti says he does not believe that Mr Simmons said - - -

McHUGH J: He does not say that.

MR McCLINTOCK:

I do not believe that Mr Simmons either intended to or did make any allegation to the Premier.....of criminal or civil misconduct which extended to me.

Mr Simmons had said in evidence, on oath, that he did make such an allegation to the Premier of criminal or civil misconduct which extended to Mr Chakravarti.

McHUGH J: In answer to a leading question?

MR McCLINTOCK: In answer to a leading question, your Honour, but he said it and my client, whatever else your Honours might think about this argument, my client cannot be held responsible for the way the royal commission was conducted or the fact that leading questions were asked. Mr Simmons had said that, your Honour.

Now if we publish this letter, that is an assertion to anyone who knew, who had read the earlier article, it is an assertion that Mr Simmons was not telling the truth to the royal commission.

I do not believe that Mr Simmons.....did make any allegations to the Premier.....of criminal or civil misconduct which extended to me.

He had made such an allegation, your Honour, and he had sworn that he had. To have published this letter - and can I say this, your Honour: it would not have taken a very skilful pleader in defamation to plead a defamatory imputation there. All one needs to know dehors the letter is the fact of the evidence to the royal commission and that statement and by publishing that letter we would have defamed Mr Simmons and we would have done so indefensibly.

McHUGH J: But see, that is one of the problems. If this section is to have any work at all it must frequently result in newspapers having to defame people. A witness gives evidence, he says, "X did so-and-so". Under the section, X is then entitled to say, "I did not do it" and you have got to publish it. Now that creates an imputation against the witness.

MR McCLINTOCK: Your Honour, it cannot be a reasonable interpretation of the section, that to buy immunity from one suit we would buy ourselves another suit.

McHUGH J: Why?

MR McCLINTOCK: Because, your Honour, the section refers to reasonableness and it would not be a reasonable thing to require a newspaper to publish defamatory material about other people.

McHUGH J: But that is what it says in terms. The hypothesis is that something defamatory has been said about the plaintiff and the section enables the plaintiff to deny that fact and that necessarily makes an imputation against the person who made that claim against the plaintiff.

MR McCLINTOCK: Not necessarily, your Honour.

McHUGH J: Well, in 99 cases out of 100.

MR McCLINTOCK: No, your Honour. It could be framed in terms of moderation and it would say, for example, paragraphs 1 and 2 constitute a denial. Now, they do not say that Mr Simmons' evidence is untrue, which is what the third paragraph does say. If paragraphs 1 and 2 had stopped there, I would have no answer to this letter and that would have completely satisfied the requirements of the section or the proviso, because there Mr Chakravarti is given an opportunity, as he avails himself of, to deny any misconduct on his part and he does so, but he does not do it there as he does in the third paragraph by engaging an attack on Mr Simmons which, if we publish it, would have been indefensible. It is a defamatory statement of fact and, in fact, it is allegation of perjury.

McHUGH J: I just want to pursue you on this question about denials and giving rise to defamations of other people.

MR McCLINTOCK: Certinly,. your Honour.

McHUGH J: Take a public meeting where a ratepayer says, "The town planner has admitted to me that he took a bribe in respect of a particular development." A newspaper publishes a fair report of that meeting, prima facie within section 7. The town planner writes a letter and says, "I deny that I told that ratepayer that I had taken any bribes and I deny that I have taken any bribes." Full stop. Now, surely you are obliged to publish that letter if you want to claim the protection of section 7.

MR McCLINTOCK: We would note that that letter comes close, your Honour, to what would be permissible but there is clearly a difference here, which is that Mr Simmons has said this on oath.

McHUGH J: It does not matter. It defames the person, the ratepayer, who has made the defamatory allegation against the town planner.

MR McCLINTOCK: Your Honour, if it defames him we are not obliged to publish it, in my submission.

McHUGH J: The section assumes that you are because it entitles the plaintiff, the person defamed, to have a letter published contradicting the substance of the report.

MR McCLINTOCK: Your Honour, a reasonable letter, and inherent in the word "reasonable" is that it means that a client such as mine should not be exposing themselves to what would be indefensible defamations. If that means that the section has little work to do or that letters have to be framed in the way that the first two paragraphs of this letter were framed, so be it.

McHUGH J: It just may be that the defence is not open to you. You have got to take your choice.

MR McCLINTOCK: It is not beyond, in my submission, the wit of man to write a reasonable letter by way of explanation that sets out - that would provide the opportunity, if published, that contradicts the evidence in question.

McHUGH J: What happens to the town planner in my example? He has got no remedy at all. That just goes out to the world and he cannot contradict it in any way.

MR McCLINTOCK: Your Honour, that is the case in many reports. It is the case in every one in New South Wales where there is no provision like this at all.

McHUGH J: There used to be, I think, under a 1909 New South Wales Act.

MR McCLINTOCK: There was, your Honour, but while that survives in the ACT, it has been gone in New South Wales, I think, from at least 1958 but I certainly know it has not been used since 1974.

BRENNAN CJ: Inherent in this paragraph (b) is the notion of contradiction so that a defamatory allegation which has been made by A and reported by B is to be contradicted by C who is defamed. In other words, A has said something adverse to C, C denies A's allegation. One may usually infer from that that A is a liar. Now, unless contradiction means something different, inherent in paragraph (b) is at least the prospect of the inference or the imputation arising from the letter in reply that A is a liar.

MR McCLINTOCK: Your Honour, if that is the case it would not, as I said, be a reasonable letter. One cannot be called upon to publish further defamatory material.

BRENNAN CJ: It depends on whether, the publication being as wide as it has been, the response can be equally as wide as that, provided it is reasonably stated. In other words, why is it that if the allegation made in the House of Parliament can be spread abroad, the response can equally be spread abroad? Why is it that you cannot equally claim protection in respect of a letter of contradiction, being no more than a letter of contradiction?

McHUGH J: You can have an Adams v Warden defence or a Loveday & Son Newspaper defence, a better illustration.

MR McCLINTOCK: Your Honour, but take the illustration here. What would have been the defence to this letter? If Mr Simmons had sued my client for publishing this letter, what answer would it have had? It could not have pleaded comment of a third party because paragraph 3 is not a comment, it is a statement of fact. It would have found it very hard to plead common law qualified privilege. In fact, it is hard to see how it could have.

McHUGH J: Why not? It can be said he has given evidence in a public forum and he has put this out to the world and he has defamed somebody.

MR McCLINTOCK: Mr Chakravarti might have some form of privilege although it would be hard to see in relation to that, but it is very dubious that my client woulld have any form of privilege. But your Honours are asking my client to take a risk on things like that, when it has got a statement that it knows is inaccurate and that it can see on its face defames someone.

McHUGH J: No, your client just has to make a choice. Do they want to rely on section 7? If they do, they have got to publish. If they do not want to take the risk of another defamation action, they cannot rely on section 7.

MR McCLINTOCK: Your Honour, to make them take the risk of another defamation action would not, in my submission, be a reasonable thing. The section cannot bear that construction when it uses the words "explanation or contradiction".

BRENNAN CJ: It may be that one looks at the word "reasonable" there as dealing with the situation where the letter, if published, would nonetheless be published on an occasion of qualified privilege so far as the publisher is concerned and then the question arises in this context: if you had published this letter would you, in fact, have had a defence of qualified privilege?

MR McCLINTOCK: Your Honour, these are decisions that have to be made - - -

BRENNAN CJ: It is not a question of whether they like the risk involved. It is a question of what, according to the law, is the obligation?

MR McCLINTOCK: Yes, your Honour, that is certainly the case, but when one construes provisions like this one has to bear in mind the realities, as no doubt the legislature had in mind, by using the word "reasonable" in a situation such as this. I am repeating myself, I know I have done so several times today and I apologise for that, your Honours, but again to require a newspaper to take a risk like that is not a reasonable thing to do and therefore the document that contains it is not a reasonable statement, in my submission.

Your Honours, could I ask if your Honours are going to sit until 4.30 as your Honours did yesterday?

BRENNAN CJ: Yes, we will sit to 4.30.

MR McCLINTOCK: Thank you, your Honour. Your Honours, can I then go, having covered, I believe, the points I wish to make in relation to the first article, and then deal with the second article and I will deal only with the report aspects of the matter.

Could I take your Honours to the judgment of the Chief Justice on this point? I will need, of course, to take your Honours to the diary note here. The Chief Justice's judgment on this point appears at pages 936 to 937 of volume 4 and at line 14 his Honour rejects the defence of "fair and accurate report" in relation to the imputation which he had found. That imputation is set out on page 934 of the defence. His Honour is referring there to what is imputation (b), I am sorry no, it is imputation (a):

The plaintiff had engaged in criminal conduct in connection with a loan or loans made to him;

He then continued:

I respectfully disagree with the trial judge. I consider that there is no ambiguity in Mr Simmons' notes. They do state, in my opinion, that the loans involving the plaintiff "may be criminal rather than civic." I consider that part 6 of the note, taken as a whole, is dealing with a single topic, loans, of which one example is given, and that the comment relates to all of the loans.

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

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

His Honour then goes on to find that the fourth and fifth imputations - - -

McHUGH J: Now what does his Honour mean when he is talking about "the listener in court" would have got? He is talking about the reader of the diary no doubt, not the "listener in court".

MR McCLINTOCK: Your Honour, his Honour, I have to accept, was not being very precise there. It must be he was - - -

McHUGH J: He was inaccurate.

MR McCLINTOCK: Inaccurate, your Honour. His Honour must be interpreted, though, as meaning that what the reader of the diary note, these documents having been released on the day before the article, would have got. His Honour continued:

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

His Honour then went on to say that those imputations were "overshadowed by the third imputation" that he found to be accurate as a report.

Your Honour, there are two submissions that I wish to make in relation to, can I say this - Mr Justice Perry agreed with the Chief Justice on this point. Mr Justice Williams agreed with the trial judge who took a different approach in relation to the fairness of the second article.

Could I take your Honours to the diary note. Perhaps I will take your Honours first to the article itself and your Honours will see in relation to the article that there is a heading "Loans may be criminal: bank chief's diaries" and there is, of course, a picture of Mr Simmons. The article commences with the words:

Sensational allegations of a conspiracy within the State Bank group and multimillion-dollar unauthorised loans involving senior executives have been revealed in diary notes kept by former bank chairman Mr David Simmons.

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

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

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

I should point your Honours also at this stage to what has been called a "graphic", although one wonders why it has been called that, that appears below the picture of Mr Simmons where it says there:

Preliminary audit reveals Baker, Reichert, Chakravarti and Martin have all loans which were not approved, and were not authorised and are in excess of agreed benefits....May be criminal rather than civic.

Your Honours will see that there are the four dots between the words "benefits" and the word "May" indicating that an omission of something has been made there. The answer to what - - -

McHUGH J: An omission that would not alter the context or the meaning?

MR McCLINTOCK: Even if it did, your Honour, and in my submission, it does not, the reader - and the reader is to be taken to read the whole article - finds out what has been left out when he reads the article which sets out this part of the diary note verbatim. Your Honour, it says - - -

McHUGH J: But not every reader reads the whole article.

MR McCLINTOCK: But your Honour, the reasonable reader is taken to read the whole article.

McHUGH J: Is he? Is that what the cases say?

MR McCLINTOCK: That is what the cases say.

KIRBY J: I thought we had read to us a passage yesterday which said the opposite.

MR McCLINTOCK: I do not recall that, your Honour, but the authority in this Court is World Hosts v Mirror Newspapers.

KIRBY J: But what about what Justice Aickin said in, is it Reader's Digest v Samuels, I think it is, about how readers place more emphasis on headlines than they do on text.

MR McCLINTOCK: They may, your Honour, but one cannot ignore the text. Your Honour, it would cause serious injustice in newspapers if you could pick and choose between the material that they published - - -

KIRBY J: But that is how people in the community read and they are the people in whose hands are the reputations of those who come to the courts for redress.

McHUGH J: I must be the most unreasonable reader in the community because 90 percent of articles I read, I just look at the headlines and maybe the first paragraph and if it does not interest me I do not read any more.

KIRBY J: Or the graphics, the graphics too.

McHUGH J: Yes, the graphics too, so you just move on.

MR McCLINTOCK: Your Honour, the graphics may drag you in.

GUMMOW J: That is why they are there.

MR McCLINTOCK: Of course, but that does not alter the proposition that the reasonable reader is taken, and this is what the authorities say, to read the whole article.

KIRBY J: I would like authority that says that, because I find that so unrealistic that the damage that is done is done by people who do not read the whole article and yet we must assume that it is to be tested by those who do read the whole article.

MR McCLINTOCK: Your Honour, the reasonable reader who, for example - - -

BRENNAN CJ: We know what you are saying, we know what you are about to say. What is the authority?

MR McCLINTOCK: I am sorry, your Honour. The authority is as I believe World Host v Mirror Newspapers. I do not know whether it appears in our bundle but perhaps I could ask one or other of my learned juniors to find the references and I will go on with the points I wish to make about the - - -

McHUGH J: And you might also just look at Reader's Digest v Lamb, I think is the case where Justice Aickin spoke about how people read articles.

MR McCLINTOCK: I think the other case may be Gordon v Amalgamated Television Services. Your Honour, the article in the third column, in the material from the place where I stopped, after it refers to the fact that:

Several hundred edited pages of diary notes kept by Mr Simmons were released yesterday by the State Bank Royal Commission.

It goes on to deal with the other aspects of the diary notes and it comes back to the particular subject matter and sets it out in what is the third column. The relevant material appears in the second paragraph on the fourth column where it says:

"In telling management of investigation of Beneficial, suggested we should see all loans.

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

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

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

There are other references there. The next one that refers to the plaintiff, though, is the second last paragraph in that column:

"Believe that Baker, Reichert, Martin and Chakravarti will have to go - question, when?" he says.

Mr Simmons also refers to Mr Clark, noting that it is likely he "will retire early".

Could I then take your Honours to the diary note itself and from the appeal book the note appears that - - -

GUMMOW J: 867?

MR McCLINTOCK: Yes, your Honour.

McHUGH J: No, I think it was 854a, is it not.

MR McCLINTOCK: 854a, b, c and d. Now, for convenience, I have handed up to your Honour the actual diary note transcribed. The principal reason for that is because of the illegibility of what appears on 854b, at least on the right-hand side of the page. The first point about it - and this, in my submission, resolves the question as to whether it is predated or postdated, the attendance on the Premier - is that it is described as an attendance note and your Honours can see that Mr Simmons is billed for it. It says "Units: 10" in the middle of the page across from "30 July 1990". Then it says "Lawyer: David Simmons". It is the kind of diary note that a partner of a law firm makes after he has attended upon a client for the purpose of one, recording what he said and second, recording the billing information. "Other Party: Premier", "Client: State Bank", "Matter Description: Board", "Matter No.:" It then continues:

Attendance on the Premier.

Meeting set up to discuss:

and it then goes on -

(a) Bank's real position prior to meeting tomorrow and emphasis on points which will have a political flavour.

The material there down to the numbered paragraph (e)3, after that it says:

Baker at lunch at the end of June raised question of Beneficial's bad debts and where they are hidden.

He then raised other materials I do not need to take your Honours to. Over the page Mr Simmons sets out what he said to the Premier in note form about Beneficial -

GAUDRON J: Well, again, there is an assumption that he said it or what he was going to say to the Premier from this diary note.

MR McCLINTOCK: Your Honour, in my submission, the answer to that is given by the points I mentioned on the first page. That is, his bill for it.

GUMMOW J: Of course he bills for it. He bills for everything he writes down.

MR McCLINTOCK: Yes, your Honour, but what it is, the billing notice is what is called an attendance note and it is indicating that he attended upon the Premier.

McHUGH J: Yes, I know, but some of the language is very strange for it to be an attendance note. If you look at 854b under the heading "Beneficial", paragraph 2:

You might remember in Early February I told you that I was worried with Beneficial.

This rather looks to me as if it is a precis of a speech or - - -

KIRBY J: Where is the record of what the Premier said in response to all this?

MR McCLINTOCK: What the Premier said in response to that, your Honour, is in the evidence.

KIRBY J: No, no, in the note, I am talking about, given that this is supposed to be a note, one would expect that it is not a one-sided note.

McHUGH J: Yes, I think the point Justice Kirby has just made is conclusive against your argument. I mean, it is just impossible to think that the solicitor would not have the Premier's replies in there.

MR McCLINTOCK: Your Honour, the difficulty with that, though, is that the note was treated in the royal commission, and this appears in the transcript, at the passages which led to the earlier article as if it was an attendance note of recording information that he had told the Premier and so far as I am aware, and I stand to be corrected on this, it was treated at the trial of these proceedings as if it was an attendance note and I do not believe any point was taken that it was not done after the conversation or the attendance between Mr Simmons and the Premier. I do not believe that to be the case, your Honour. I will have it checked overnight.

McHUGH J: But, for example, you can hardly imagine that he would leave out of his attendance note a reference to the Premier's anger. He gave evidence about that. You just could not believe that the solicitor preparing an attendance note, not only has not got a word about it, but does not make a note of something as important as that.

MR McCLINTOCK: There may have been very good reasons for not writing down what the Premier said. There may have been very good reasons for writing down only what Mr Simmons told the Premier. I do not know that but, in circumstances such as this, where the board of the State Bank, on any view of the matter, where the chairman of the board of the State Bank is going to the Premier of the State to tell him that there is a serious question that senior executives of the company have, not to put too fine a point on it - when one looks at the top of page 3 - possibly engaged in criminal conduct in relation to loans themselves, there may very well be other explanations for the scantness, in that sense, of a diary note other than the fact that it was made beforehand for Mr Simmons to speak to.

But, in any event, it may not matter, your Honours, because regardless of when it was created, my client was still entitled to report it, it being evidence given at the royal commission.

Your Honour, I see the time.

BRENNAN CJ: Yes, how long do you expect to take?

MR McCLINTOCK: Your Honour, I do not think I will be longer than half an hour. I will finish in half an hour.

BRENNAN CJ: All thing being well.

MR McCLINTOCK: No, I will finish in half an hour, your Honour, all things not being well.

BRENNAN CJ: Mr Gray, how long do you expect to take in reply?

MR GRAY: If the Court grants special leave in regard to the cross appeal so that proceeds, we might perhaps be half an hour; otherwise shorter.

BRENNAN CJ: The Court will adjourn now until 10.15 and the next matter will not be listed before 11.15 am tomorrow.

AT 4.32 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 3 SEPTEMBER 1997