Papaconstuntinos v Holmes A Court [2011] HCATrans 235 (2 September 2011)

Last Updated: 7 September 2011

[2011] HCATrans 235

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S142 of 2011

B e t w e e n -

TONY PAPACONSTUNTINOS

Applicant

and

PETER HOLMES A COURT

Respondent

Application for special leave to appeal

CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 2 SEPTEMBER 2011, AT 10.12 AM

Copyright in the High Court of Australia

MR T.K. TOBIN, QC: May it please the Court, I appear with MR R.K. WEAVER for the applicant. (instructed by Slater & Gordon Lawyers)

MR B.R. McCLINTOCK, SC: May it please the Court, I appear with my learned friend, MR R.W. POTTER, for the respondent. (instructed by Baker & McKenzie Solicitors)

CRENNAN J: Yes, Mr Tobin.

MR TOBIN: Your Honours, the issue in this case, the legal issue involved is this. In circumstances where the publisher volunteers a statement which is disparaging of a plaintiff, where he claims privilege for that volunteered statement based purely upon personal or private interest and not in any way upon duty, does the common law require in those circumstances that he demonstrate as a requirement, not a consideration, pressing need or what in some cases is called a reasonable necessity?

CRENNAN J: Your argument is that pressing need is an invariable requirement in relation to reasonable necessity?

MR TOBIN: We did not argue invariable. We always put it in the Court of Appeal that it would be most likely decisive; that is, it is a principle not of absolute liability if one was talking of a statute, but it is a central principle that the court will take into account in coming to a view as to whether the interest has been established, which it may in accordance with the common use of the common law, it may decide in all the circumstances would not apply in this particular case. In all cases, your Honour, that we have looked at and analysed from this Court that deal with this matter it seems to us that reasonable necessity – which I think is a variant of that term “pressing need” – is a central criterion as to whether or not there will be held to be an occasion of qualified privilege.

KIEFEL J: Therein lies the question, I suspect. The question is whether or not pressing need is part of the formulation of reasonable necessity. It was certainly regarded as a requirement in the case of a voluntary statement absent duty by Justice McHugh in Bashford v Information Australia (2004) 219 CLR 366. The question here is whether or not his Honour was a lone voice and whether or not authority supports that.

MR TOBIN: I accept that, your Honour. Could I say that - - -

KIEFEL J: Perhaps the matter which might favour a grant is that there seems to have been, at least from the point of view of the Court of Appeal, sufficient concern about this, that they sat five members of the court to determine the question, so one gets the impression that this – whether or not Justice McHugh was right in this approach is a matter which has been exercising the minds of judges in this area for some time, at least in New South Wales.

MR TOBIN: My learned friend challenged a series of Court of Appeal decisions last December, and – I am sorry, before the matter went to the Full Court of Appeal and the president decided to empanel a bench of five to look at it and I think some of the judges spent some of their time explaining the earlier decisions which seem to have been adopting what Justice McHugh had said. From our point of view, your Honours, if I may put it this way, Bashford plays a role a bit like the ghost in Hamlet after Act I, Scene I; that is, Bashford was decided, as we would see it, analyse it, as a duty case based upon a contractual duty. Now, that ratio is a bit hard to take out of it, but that really is I think on close analysis what the majority Judges and Justice Gummow, for example, were dealing with.

CRENNAN J: I think on a more general level, Mr McClintock’s position about Bashford seems to be this, that Justice McHugh’s reference to pressing need was merely an example, if you like, of reasonable necessity, not that they were synonymous.

MR TOBIN: Yes. Well, your Honour, what has happened in the Court of Appeal, we would submit with respect, is that the line of decision from the High Court in Guise v Kouvelis, as referred to, I heard, earlier, and in Norton v Hoare, that line of authority puts reasonable necessity as a requirement. Norton v Hoare was a case where the publisher, the plaintiff, was attacked in an opposing newspaper and his proprietary interest, he said, was jeopardised, therefore he had an interest based upon his proprietary interest in the newspaper to publish a defamatory allegation against his opponent which he attempted to justify on a ground of qualified privilege. If I could take your Honours to that case briefly and then to Guise v Kouvelis, it will form the basis of our submission that the requirement ordinarily, not necessarily inevitably, but ordinarily will be upheld by the court.

In the bundle of authorities, your Honours, and Guise v Kouvelis, if I go to that first perhaps, at 210 your Honours will see in the last paragraph on the page that the Chief Justice, Justice Latham, supported by Justices McTiernan and Williams, in the last few lines there finds that there has been an interest in the utterance accusing the plaintiff of being a crook by persons involved in a card game in the Hellenic Club. He bases his analysis upon common interest. Your Honours will see at the end of that page at 210 that it is an interest case. They reject the notion that he could establish a sufficient interest in making an outburst, calling the plaintiff a crook, in the context of events at the club, which I do not need to go into.

The judgment of Justice Dixon at 215, if I could refer to three passages in that, your Honours, because if I could be permitted to do some reverse engineering, it is clear that Sir Owen Dixon is approaching this case with a substratum of principle which I would call pressing need. At 215 in the last paragraph on the page a few lines in, he says:

But the very width of the principles governing qualified privilege for defamation makes it more necessary, in deciding how they apply, to make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication.

That is quoted by my learned friends and, of course, it is a true statement, but the reason for the requirement - - -

KIEFEL J: I think that might have been addressed to the other members of the Court.

MR TOBIN: Yes, a billet-doux, as it were. His Honour goes on then, at 220 at the bottom of the page, to say in effect that the defendant’s interest in making the charge was that he had caught the plaintiff “in flagrante delicto” engaging in what he took to be shark practice at the card game. Now, that term “in flagrante delicto”, the concept is laced through the judgment. At the top of 221, or the proper citation 74 CLR at 122, a few lines down he said:

The truth of the situation was that the defendant’s purpose was not primarily to communicate information to the bystanders but to demand from the plaintiff a justification for what he had done and perhaps to expose him. The test of privilege that is in point is the defendant’s interest or social duty in impugning then and there the plaintiff’s play on the footing of what he had witnessed –

Then he justifies, as it were, the conclusion that he reaches, albeit in dissent, at the bottom of 223, seven or eight lines up – this is where we say the underpinning of pressing need can be seen:

The defendant, if he took any such view, was faced with the embarrassing choice between taxing the plaintiff at once with what he believed he had done and passing it for the time being in silence and subsequently raising the question elsewhere. If he chose the latter, he would or might be met with doubts and denials based on his failure to speak at the time. Why was not his situation a reasonable occasion or exigency –

et cetera. So the essence of Sir Owen’s approach is really underpinned by the idea that in the time sequence he had little choice in defending his interest but to make the statement when he did. Now, the majority, of course, rejected that. This methodology, if one could call it that, of arriving at a conclusion as to whether there is an interest which justified in all the circumstances the publication is crucial frankly, your Honours, to our application for leave.

Now, I mentioned briefly Norton v Hoare [No. 1] [1913] HCA 51; (1913) 17 CLR 310. I just want to take your Honours, if I might, to the use of the words “reasonably necessary”. On page 280, which is 317 of the report, the Acting Chief Justice outlined the argument, at the top of the page:

counsel urged that to the extent of reasonable necessity for its purpose, every published statement made with the object of fairly protecting some interest of the writer is the subject of qualified privilege.

The next page, which is 281 of the print, halfway down his Honour said:

That, I think, stands on the same ground as the reasonably necessary return of physical blows in self-defence against aggression, and the degree of protection given is limited in a closely analogous way.

Before I analyse that a little, your Honours, over the page at 282 of the print, about seven or eight lines up from the bottom, Justices Isaacs, Gavan, Duffy and Rich, dealing as they are here with a pleading point and dealing thus with the principles for establishing qualified privilege in a case of this kind, say:

whether the defendant’s purpose in writing the article complained of in the action was boná fide to protect his property –

that is one issue, they do not have to decide the fact, the next issue –

or was in reasonable and necessary defence of his property or interest in his newspaper.

So embedded in this case is the idea of reasonable necessity, and I think one can take from Guise v Kouvelis that pressing need is the point at which the defendant must attempt to justify the precise when of the publication, the precise timing of the publication. The majority of the Judges in Kouvelis, analysing the Full Bench of the New South Wales Supreme Court was on appeal, looked at this question of the timing of the outburst, what was the time lapse between a certain outbreak of frightfulness in the club and then eventually the making of the allegation. So the focus on timing derives in the case before your Honours from the peculiar fact that Mr Holmes à Court, the defendant, had spoken on a number of occasions by phone and in person with Mr Andrew Ferguson, who was the secretary of the union and the employer of the plaintiff, and he had raised the question that he objected to the plaintiff emerging, as it were, as a major opponent of his interest, which was the takeover of the club.

At the time that he raised that with Mr Ferguson, he well knew from the audit which he had done those facts upon which he bases his suspicion in the letter of some sort of corruption by one or other possible candidates, including the plaintiff. So the question of timing in this case, why pressing need in this case is so relevant, is that for several weeks leading up to the crucial vote when the special general meeting is summonsed and there is a vote to be taken on whether Mr Holmes à Court can take over South Sydney Leagues – so that is the issue – and he does not raise until 17 March, which is the Friday before the Sunday meeting, this allegation in his letter, as the President of the Court of Appeal found, what that was about was to silence his opponent.

So the structure of the case, as it were, before applying the principles of the law can be seen, that Mr Holmes à Court is pursuing a private interest, which is not a negative but it is a private interest, in the process he has a major opponent, Mr Papaconstuntinos. He wants to silence his opponent because he fears that he may lose the vote. So he tells his opponent’s boss at a meeting which is after a series of contacts over several weeks by letter on 17 March, “I suspect Mr Papaconstuntinos may be acting corruptly and I want you to get in touch with me about this. I want you to assist, as it were, in unravelling this.”

CRENNAN J: This pressing need point is confined to imputations (b) and (c) then?

MR TOBIN: Yes, your Honour. The other question, though, with regard to the misleading is, even then on the facts, what time was given to Mr Ferguson to react. So the situation is, is the defendant entitled to make a defamatory allegation of suspicion of criminality, which is a high level allegation, to the employer for the purpose of silencing an opponent in a vote in a club which was open to the mass of the club members to argue and contend for? The timing point becomes significant, your Honours, when one realises – and the evidence is not controverted – that at the end of that weekend Mr Ferguson sent off a letter in answer to Mr Holmes à Court and in the letter he says, in effect, “I tried to contact you over the weekend and I did not get a reply.” On the day in question, the evidence is, he left an urgent telephone message with Mr Holmes à Court to get in touch with him.

Now, if one looks at the matter complained of, your Honours, briefly, your Honours will see at page 63 of the application book, the very last sentence on page 63, line 43:

I would respectfully request that I hear from you today.

If one goes up a little further to 25 he says:

I am seeking your assistance in checking the facts that I have presented, which are based on our very extensive due diligence –

The issue, your Honours, is not improper motive, the issue is whether there was the justifying interest at the time to publish precisely when he did and what he did and we would say that on an analysis of the uncontested facts, Justice Allsop’s view that there was time to do something about it, perhaps Mr Ferguson could have done something about it, was a justification whereas, in fact, your Honours, the real social utility question of convenience and welfare of society is, is the defendant entitled to make allegations of suspicion of serious corruption and criminality in order to win a ballot at a club by saying, “My interest is that I want to win the vote and this is a legitimate way of doing it”, although I close off the opportunity to the plaintiff’s employer to, as it were, confirm in one way or the other the facts he presented. Now, your Honours, I see my time has expired.

CRENNAN J: Thank you, Mr Tobin. Yes, Mr McClintock.

MR McCLINTOCK: Thank you, your Honours. Your Honours, the question raised by my learned friend, as your Honours are aware, is essentially whether pressing need is an essential component of a qualified privilege defence in this area. With great respect to my learned friend and with great respect to Justice McHugh, that proposition is in fact wrong and it is unsupported by any authority whatever.

KIEFEL J: Yes, but the question is whether or not the question about that should be left as resolved by the New South Wales Court of Appeal or whether we should rule upon it.

MR McCLINTOCK: With great respect to their Honours of the New South Wales Court of Appeal, they created the problem and they have now solved it, your Honour. What actually occurred is, if your Honours - - -

KIEFEL J: I think we are familiar with the history of the cases dealt with in the - - -

MR McCLINTOCK: Yes, your Honour. Your Honour, in the three cases that are referred to by their Honours, Goyan, Lindholdt and Bennette, what their Honours in those cases did was take incorrectly Justice McHugh’s proposition in Bashford and elevate it beyond what in fact his Honour said. If I could take your Honours briefly to that passage in Bashford. It appears at page 74 of the bundle of authorities provided by my learned friends. It is paragraph 73 of his Honour’s judgment and, for the record, the citation is [2004] HCA 5; 218 CLR 366 and this is at page 393. As I said, your Honours, the question was, is this an essential component? If your Honours look there, your Honours will see what his Honour said was:

Different considerations apply when the defendant volunteers defamatory information. Ordinarily the occasion for making a volunteered statement will be privileged only where there is a pressing need to protect the interests of the defendant or a third party or where the defendant has a duty to make the statement to the recipient. The common law has generally –

obvious, I emphasis “generally” –

perceived no advantage to society in giving qualified privilege to volunteered statements in the absence of a pre-existing reciprocity of interest between the defendant and the recipient.

And so on.

CRENNAN J: This is the basis of your argument that Justice McHugh was doing no more than exemplifying reasonable necessity by his reference to pressing need on the particular facts?

MR McCLINTOCK: Yes, absolutely, your Honour.

KIEFEL J: The question is, if it has been misunderstood and you say resolved by the Court of Appeal, if we decline special leave, and the way in which special leave transcripts are read, it will be taken that there is a necessary acceptance of the Court of Appeal approach, but that leaves the question whether or not this Court should itself consider the matter.

MR McCLINTOCK: If members of the profession think that refusal of special leave connotes acceptance, they - - -

KIEFEL J: Well, you know they do.

MR McCLINTOCK: Some of them may misunderstand, your Honours - - -

KIEFEL J: That is very true.

MR McCLINTOCK: Lack of suitable vehicle can never, for example, connote acceptance. But here, your Honours, the difficulty that the applicant faces is that when one strips it away and comes down to what actually happened in this case – and one can see this very clearly from the Justice McColl’s – the last paragraphs of her Honour’s reasoning – this is absolutely a common or garden case of qualified privilege involving an interest of one person, my client, to make a communication. May I say, your Honours, there can be no real doubt here that the actual decision – I will come back to the three Court of Appeal authorities that your Honours have referred to, putting them aside for the time being, if your Honours go to the application book at page 107, your Honours will see there that her Honour said this:

In my view the primary judge erred in concluding the appellant did not establish the defence of qualified privilege. The appellant had a tangible interest in his takeover bid for Souths succeeding. He had recently discovered that it was the respondent who was spreading what he regarded as misleading information about the bid. He formed the belief that the respondent’s action was influenced by a concern to prevent new blood taking control of Souths and investigation the circumstances of the payments to his son. It was in those circumstances that he wrote the matter complained of. In my view the “great mass of right-minded [people] in the position of the [appellant] would have considered” he had an interest, in the circumstances, to communicate with Mr Ferguson -

Your Honours, my learned friend does not join issue with that and nowhere in his submissions is the proposition advanced that that is wrong. All he says, in fact, is that, “Yes, I accept that sub silentio but you have got to always prove a pressing need.” With respect, your Honours, that cannot be right. We are talking about an area here where absolute rigid a priori rules, such as you must always establish a pressing need, are inappropriate. The fact is here that, as her Honour says and has been said by authorities going back 150 years, one can only test this by examining the entire circumstances of the publication.

Now, in addition here, not only does the defendant not challenge that paragraph 142 and not dispute that it is an accurate description of what occurred in this case and an accurate application of the law, there is only a challenge here in respect of two of the imputations. Now, the first imputation – and this was pointed out by your Honour Justice Crennan – the first imputation is set out – and I should take your Honours to it very briefly, in Justice McColl’s judgment at page 65 of the application book at line 20 in paragraph 33:

(a) that the plaintiff, a board member of the South Sydney Leagues Club, repeated information he knew to be misleading about the defendant’s proposal to take a controlling interest in the South Sydney Rugby League Football Club –

Now, it is apparently accepted that that was published on an occasion of qualified privilege. The difficulty here is that there was never any argument developed below by the applicant that the other two imputations were not relevant in relation to the publication of the first imputation. Now, there is a passage in Justice McColl’s judgment – it appears at paragraph 144 on page 108 – where she makes the finding that they were inextricably linked, but that was without any submission from my learned friend below that the other two imputations were in fact irrelevant to the occasion. That was a proposition that was never actually developed at all below in this case.

Your Honours, those are reasons which we would suggest – that is, the acceptance of the core statement of principle by her Honour and the fact that the case is now being put in a substantially different way than it was below – which would strongly suggest that this in fact is not a suitable vehicle to raise the issues about the history, if I could put it like that, of the treatment in the Court of Appeal of what Justice McHugh said in Bashford.

If I could come back to that, what actually occurred – and I appreciate that in a sense five judges of the Court of Appeal gives it a significance and, as my learned friend said, it was because I challenged and substantially – or challenged the correctness of the three decisions in question, but the basis of the challenge was, and this was ultimately accepted, was that Justice McHugh, and there cannot obviously be any dispute about this, was in the minority in Bashford, and the majority, the Court of Appeal in the three previous cases, had approached the matter on the basis that despite dissenting, his Honour’s decision represented the law. With great respect to the Court in that case, that simply cannot have been the case.

One only has to read the opening passage of Justice McHugh’s judgment in Bashford where he talks about dancing in the streets as a result of the majority’s decision to realise that he saw the majority decision in Bashford as subversive of the common law, the cherished common law, or the common law cherished by his Honour, and plainly he was opposing himself. Now, once it seen that it was a dissenting judgment, it becomes apparent that the reliance by the Court of Appeal in the three earlier decisions was in fact mistaken and what has occurred in this case is diverting the common law in this area back to its proper course and applying the majority, or the majority decision in Bashford, in the way that it should have been applied and putting to one side what Justice McHugh said in that case.

Your Honours, those substantially are the reasons we would say that special leave should be refused in this case. There are a couple of loose ends though which I should deal with, your Honour. First, nothing in the authorities that my learned friend refers to, such as Guise, provide any support for this. It is one thing to say that - - -

KIEFEL J: I suppose the word “exigency” - - -

MR McCLINTOCK: Well, exigency simply means occasion, your Honour. To say something is reasonably necessary, the two words in that concept both have work to do. It was obviously perceived by Mr Holmes à Court to be reasonably necessary to protect his interests to make the communication to Mr Ferguson; that is one thing. It is a different thing to say that he had to have a pressing need to do it. A reasonable necessity can be happily accommodated within the qualified privilege as we advance it to your Honours or advance it below. In addition, Norton v Hoare – well, obviously it is a decision of this Court – it has a degree of antiquity about it and most significantly it preceded Adam v Ward in the House of Lords which is really where the modern qualified privilege takes off from, if I could put it like that, your Honours.

Finally, your Honours, on one point, or two further points, this area has, of course, been looked at very recently in Cush v Dillon. In one of the three judgments in Cush v Dillon the Court of Appeal decision is specifically referred to.

KIEFEL J: The issue was not ventilated there. It was raised and some interest was expressed in it, but it was not run.

MR McCLINTOCK: It was abandoned by counsel for the appellant who accepted that this case in the Court of Appeal correctly stated the law. I accept that. Finally, your Honour, my learned friend’s descent into of the facts about what happened on the particular weekend in question is something that he is really barred from saying. The reason why was that there was no cross-examination whatever of my client by my learned friends, or by Mr Weaver who was then appearing, at all. He was never challenged about his reasons for not contacting Mr Ferguson or it was never suggested to him that he may have tried and so on, it was simply not an issue below. It is a factual question and for that reason, your Honours, it should play no part, in my submission, in your Honours’ reasoning. Your Honour, subject to correction from my right, those are my submissions.

CRENNAN J: Special leave to appeal is granted in this case and we do not need to trouble you further, Mr Tobin.

MR TOBIN: Thank you, your Honour.

CRENNAN J: Do counsel agree the case would be a half day case?

MR TOBIN: Half a day and a little more I would think, your Honour. Do you think it would take a little more than half a day?

CRENNAN J: It is hard to see why it should, Mr Tobin.

MR McCLINTOCK: We are both economical, your Honour; Mr Tobin in particular. We will finish in half a day.

CRENNAN J: We will allow half a day, Mr Tobin.

MR TOBIN: Thank you, your Honour.

CRENNAN J: The Court will adjourn briefly to reconstitute.

AT 10.46 AM THE MATTER WAS CONCLUDED