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Holt v TCN Channel Nine Pty Ltd [2014] NSWCA 90 (31 March 2014)

Last Updated: 1 April 2014

This decision has been amended. Please see the end of the decision for a list of the amendments.

HEADNOTE

[This Headnote is not to be read as part of the judgment]

In late 2006 Mr Holt, the appellant, lived with his wife Mrs Karen Holt and their three sons on the Gold Coast in Queensland. Following the discovery of a cancerous tumour in her breast, which subsequently spread to her lung, Mrs Holt commenced chemotherapy in about February 2007 and her health declined progressively until her death on 29 December 2009. In July of that year, Mrs Holt had obtained a divorce from Mr Holt.

On 28 July 2009 the first and second respondents broadcast a segment concerning Mr and Mrs Holt on TCN Channel Nine's A Current Affair television programme featuring interviews conducted with each of them by Mr Ben Fordham, the third respondent. The broadcast was highly critical of Mr Holt's conduct in connection with Mrs Holt during the period of her illness. As a result Mr Holt commenced the present defamation proceedings.

After a nine-day trial before Adamson J and a jury of four, a verdict was entered for Mr Holt. The jury found that the broadcast carried four imputations defamatory of Mr Holt, none of which the respondents had established to be true. While the jury found that the respondents had established the truth of two of the four contextual imputations pleaded in accordance with s 26 of the Defamation Act 2005 (NSW), it also found that this did not result in Mr Holt suffering no further injury than that sustained by reason of his own pleaded imputations. Having found that, by reason of the mitigatory evidence led by the respondents, Mr Holt suffered relatively slight harm, Adamson J awarded Mr Holt $4,500 in damages plus $400 interest.

Held by the Court, dismissing the appeal:

(1) Mr Holt failed to establish that the primary judge's assessment of his credibility was contrary to "incontrovertible facts or uncontested testimony", "glaringly improbable" or "contrary to compelling inferences" such as to justify appellate intervention ([33], [37]-[38], [44], [46], [53], [71]). Nor did he identify any errors of principle in the reasoning of the primary judge, her Honour's findings of fact or her use of those findings warranting the reassessment of damages ([15]-[19], [21], [25]-[26], [32], [40], [42]-[45], [51]-[52], [54], [56], [59], [61]-[63], [66], [69]).

(2) In assessing damages, the primary judge was entitled to take into account the mitigatory effect of evidence that was properly led before her in relation to other issues including failed justification and contextual truth defences. Contrary to Mr Holt's submissions, her Honour did not engage in an impermissible "roving inquiry" concerning his character.

Pamplin v Express Newspapers Ltd [1988] 1 WLR 1116 and other authorities considered

(3) The principles stated in House v The King [1936] HCA 40; (1936) 55 CLR 499 concerning appellate review of an exercise of discretion are applicable to a challenge on the basis of manifest excess or inadequacy to an award of damages for defamation ([75]). The award of damages was not manifestly inadequate as Mr Holt failed to establish that it was outside the range of what could reasonably be regarded as appropriate in the circumstances of the case. The matters that the primary judge took into account by way of mitigation justified the conclusion that Mr Holt suffered little, if any, damage by reason of the untrue imputations upon which he relied ([77]).

(4) The primary judge did not err in declining to award costs on an indemnity basis. When considering the costs order to be made pursuant to s 40(2)(a) of the Defamation Act, there is no reason why the court cannot take into account what it concludes would have been a reasonable view for the defendant to take about its prospects of success in the proceedings in deciding whether it was unreasonable for the defendant not to have made an offer at all ([84]).

(5) Nor did the primary judge err in ordering the defendant to pay half of the plaintiff's costs on a party/party basis. Her Honour was entitled to consider the plaintiff's conduct in the proceedings and the circumstance that the award of damages was slightly, but not substantially, more than derisory in making a differential costs order ([88]).

JUDGMENT

1. MACFARLAN JA: In late 2006 Mrs Karen Holt lived with her husband (the present appellant) and their three sons on the Gold Coast in Queensland. After an earlier diagnosis of breast cancer, cancer was found in Mrs Holt's lungs in early 2007. Her health declined progressively until her death on 29 December 2009.

2. Following interviews with Mrs Holt, the first and second respondents broadcast on 28 July 2009 on TCN Channel Nine's A Current Affair programme a segment concerning Mr and Mrs Holt. Mr Ben Fordham, the third respondent, was the presenter.

3. The broadcast was highly critical of Mr Holt's conduct in relation to Mrs Holt during the period of her illness, with the result that Mr Holt commenced the present proceedings seeking damages for defamation.

4. The hearing of the proceedings took place over nine days before Adamson J and a jury of four. The jury found that the broadcast carried the following imputations defamatory of Mr Holt (the plaintiff), none of which the respondents had established to be true:

"(a) The plaintiff abandoned his wife against her will to die in a hospital.

(b) The plaintiff had behaved disgracefully, by refusing to allow his dying wife to return to her own home from a hospital.

(c) The plaintiff had treated his wife like a dying animal, in that he had treated her in an appalling manner.

(d) The plaintiff wanted his wife to die".

These imputations are referred to below as the plaintiff's or appellant's imputations.

5. The jury was not satisfied that a further imputation, that the plaintiff physically abused his wife, was carried by the broadcast.

6. The respondents had pleaded in accordance with s 26 of the Defamation Act 2005 that the broadcast also carried various substantially true imputations which shared "a common sting" with those pleaded by Mr Holt, with the result that any of the plaintiff's imputations not found to be substantially true did not further harm his reputation ("the contextual imputations"). Of the following four pleaded contextual imputations, the jury found that the respondents had established the truth of (ii) and (v) but also found that that did not result in Mr Holt not being injured by the imputations which he had pleaded:

"(i) The plaintiff misappropriated $156,000 from his dying wife.

(ii) The plaintiff callously withheld money from his dying wife which had been paid out to her pursuant to an insurance policy in respect of her terminal cancer.

(iii) The plaintiff is a cruel person, in that he failed to provide proper financial assistance to his wife who had terminal cancer and was destitute.

...

(v) The plaintiff misused thousands of dollars which had been paid to his wife, Karen Holt, as part of an insurance payout in respect of her terminal cancer, by spending the money on his own personal needs and interests."

7. Adamson J subsequently assessed the damages to which Mr Holt was entitled at $4,500 plus $400 interest (Judgment of 13 July 2012: [2012] NSWSC 770). Her Honour found that, "far from vindicating the plaintiff's reputation", the proceedings had "brought to light weighty evidence in mitigation, in ... the relevant sector" and that, although Mr Holt had suffered some harm by reason of the publication, the harm was relatively slight (Judgment [179] - [180]). Mr Holt appealed to this Court against that assessment.

8. In assessing damages, her Honour stated that she took into account the following factual findings:

"(1) The plaintiff took $75,000 and used it in a morally despicable way.

(2) The plaintiff left his wife without financial support, notwithstanding that he had the means to give her such support, and left her to the charity of others.

(3) The plaintiff hit his wife twice when she was dying of cancer.

(4) The plaintiff forced his wife against her will to sleep on the sofa.

(5) [Mr Holt made a cynical offer to Mrs Holt of $10,000, being the amount Mrs Holt had specified in an affidavit as required to cover the costs of her funeral] which took advantage of Mrs Holt's imminent demise and her desire not to burden her parents with the costs associated with her funeral, which they, as pensioners, could presumably ill-afford.

(6) During the period from February 2007 until May 2009, the plaintiff collected a carer's pension on the basis that he was caring for Mrs Holt and was not working when he was actually working for cash.

(7) The plaintiff selfishly and insensitively used Mrs Holt's TPD [Total Permanent Disability] benefit to buy The Dog House [a power boat] and the Holden Rodeo, a vehicle of sufficient power to tow The Dog House.

...

(10) The content of the two contextual imputations found [by the jury] to be true, namely:

(ii) the plaintiff callously withheld money from his dying wife which had been paid out to her pursuant to an insurance policy in respect of her terminal cancer; and

(v) the plaintiff misused thousands of dollars which had been paid to his wife, Karen Holt, as part of an insurance payout in respect of her terminal cancer, by spending money on his own personal needs and interests." (See Judgment [54] and the subsequent findings in [68] to [144]).

9. The primary judge also took into account further findings of fact which Mr Holt summarised in his submissions on appeal as follows:

"(a) Mrs Holt was alienated from her own family because of the plaintiff's conduct towards them ([148]);

(b) The plaintiff had gone on a spending spree with the insurance money and Mrs Holt was either reluctant, or unable, to stop him ([152]);

(c) In so far as the plaintiff spent money on Mrs Holt, he wanted to reflect his own largesse ([154]);

(d) The plaintiff had behaved highly insensitively by entertaining his friends at home, including serving them beer, while his wife was indisposed ([155])" (Appellant's written submissions dated 25 March 2013).

10. On his appeal, Mr Holt contends that the primary judge erred in making many of the findings of fact referred to in [8] and [9] above and that the award of damages was in any event manifestly inadequate.

11. He also challenges the order that her Honour made by a judgment of 23 August 2012 ([2012] NSWSC 968) that the defendants pay half of Mr Holt's costs of the proceedings on a party/party basis. He contends that the defendants (now the respondents) should have been ordered to pay the whole of his costs, on the indemnity basis or, at least, on the party/party basis.

ISSUES ON APPEAL

12. It is convenient to address first Mr Holt's contentions that the primary judge made certain errors of principle in the course of her judgment and then address his submissions concerning her Honour's findings of fact and her use of those findings. Finally, I shall address the contentions that the damages award was in any event manifestly inadequate and that the costs order was erroneous.

ALLEGED ERRORS OF PRINCIPLE

Alleged error in relation to hurt to feelings evidence

13. The primary judge found in this context:

"178 In my view, the plaintiff overestimated the effect of the Broadcast. For example, he is inclined to attribute to the Broadcast the disinclination of some of his former schoolmates to talk to him on Facebook, when numerous other hypotheses would seem to be available. I also consider that the plaintiff may have an unrealistic view of the extent to which people in fact recognise him from the Broadcast, or indeed shunned him because of it. However, I accept that there is a number of people who recall the Broadcast and associate the plaintiff with the man depicted in it. I accept that publication of the Broadcast continues to affect the plaintiff's reputation and continues to hurt his feelings."

14. On appeal, Mr Holt submitted that the "tenor" of this and the preceding paragraph of the judgment was "not that her Honour disbelieved [Mr Holt's] evidence, but that she considered it was not objectively warranted". He emphasised her Honour's use of the word "unrealistic" in relation to his view of the impact on him of the broadcast. He submitted that this involved error because the extent to which there was hurt to a plaintiff's feelings was a subjective question which was not to be assessed objectively.

15. I do not accept that her Honour erred in this respect. Clearly, her Honour was of the view that, considered objectively, Mr Holt's description of the consequences to him of the broadcast was not fully warranted. Her Honour was entitled to take this objective assessment into account. However, there is no reason to conclude that her Honour did not also take Mr Holt's subjective reactions into account, even though her Honour thought they were not fully justified. That she did take Mr Holt's hurt feelings into account is clear from the last phrase in the quote in [13] above. Her Honour's approach accorded with the following remarks of Brennan J in Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44 at 71:

"All those objective consequences and those subjective reactions which flow naturally from the publication of the defamatory matter are relevant factors ... the two categories are not cumulative heads of damage but descriptions of kinds of intangible factors which must be taken into account in assessing damages".

Alleged error in relation to seriousness of allegations and nature and extent of publications

16. Mr Holt submitted that the primary judge failed to compare the effect of the mitigating matters which she found with the defamatory effect of the broadcast. I do not agree. Her Honour identified the defamatory imputations found to have been carried by the publication and considered the extent of the broadcast, the evidence of its impact on Mr Holt and the matters relied upon by the respondents by way of mitigation (Judgment [53] - [54], [68] - [144]). Her Honour reached a conclusion that the last-mentioned largely, but not wholly, negated the impact of the imputations relied upon by Mr Holt. This conclusion was inevitably a largely intuitive one and no further elaboration by her Honour was required.

Alleged error in relation to presumption of good reputation

17. Mr Holt submitted that it was not clear whether the primary judge accepted that Mr Holt was entitled to a presumption of good reputation, without the necessity to call evidence of it. However, her Honour said, in terms, that he was (Judgment [171]).

18. Mr Holt also submitted that her Honour may have discounted his award by reason of him not calling evidence of good character but her Honour did not expressly or impliedly indicate that she did so. As Mr Holt recognised, in these circumstances he would have to make good his contention that the award of damages was manifestly inadequate if he were to have the basis for an argument that an inference should be drawn that she must have done so. This is a contention which I address at [73] to [78] below.

Alleged error in assessing impact of truth of contextual imputations

19. Mr Holt submitted, at least inferentially, that the primary judge failed to consider the contextual imputations shown to be true in the context of the evidence which gave rise to them (compare John Fairfax Publications Pty Ltd v Blake [2001] NSWCA 434; 53 NSWLR 541 at [5]; Trad v Harbour Radio Pty Ltd (No 2) [2013] NSWCA 477 at [30]). However this criticism is not well-founded as her Honour addressed the relevant evidence in detail. There was no need for her to repeat her earlier discussion of the evidence when reaching a final conclusion.

20. Mr Holt also submitted that the impact of the imputations upon which he relied was "scarcely blunted" by the contextual imputations shown to be true, stating:

"[i]t is one thing to behave churlishly with money; quite another to abandon one's dying wife".

21. However, the comparison that the primary judge was required to, and did, undertake was not simply between the impact of the plaintiff's imputations and the contextual imputations shown to be true. The primary judge also weighed in the balance the various findings of fact that she made (see [8] and [9] above and [39] to [69] below). In any event, the submission is in substance only one as to the weight to be accorded to different factors in the assessment process. It would only be relevant if Mr Holt established an error of principle (including one to be inferred from a finding of manifest inadequacy of damages), requiring damages to be re-assessed. As no issue of principle has been established, this submission does not arise.

Alleged error concerning the relevance of the contextual imputations not found to be true

22. Under this heading, Mr Holt submitted that he should be entitled to rely upon the contextual imputations not shown by the respondents to be true as augmenting his damages. He recognised that he did not put this submission to the primary judge.

23. The submission should be rejected as those contextual imputations were not ones upon which Mr Holt sued. It was open to Mr Holt to "adopt" the respondents' pleaded contextual imputations by himself pleading them against the respondents (Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; 81 NSWLR 157 at [88] - [89]) but he did not do so. It would be a subversion of the litigious process for him to be awarded damages in respect of conduct of the defendants of which he did not complain. Defendants are entitled to fair notice of the case made against them and to the opportunity to deal with it. This did not occur in relation to the conduct that Mr Holt seeks to rely upon for the first time on appeal. There is no reason to doubt the respondents' assertion on appeal that if the point had been taken by Mr Holt at first instance, the evidence there may have been different, in particular as a result of cross-examination of Mr Holt as to why he sought damages for imputations that he had not identified at the outset of the proceedings, or before, as carried by the publication (compare Coulton v Holcombe [1986] HCA 333; 162 CLR 1 at 7 - 8).

Alleged error in giving effect to the jury verdict

24. Mr Holt submitted that the primary judge should have assessed damages upon the basis that the statements of Mrs Holt of which there was evidence were unreliable because that proposition was implicit in the jury's answers to the questions posed to it. It was common ground between the parties that the primary judge was required to give effect to the jury's findings, including any findings necessarily implicit in the jury's verdict (Crampton v Nugawela [1996] NSWCA 128; 41 NSWLR 176 at 179).

25. Her Honour considered in detail whether the jury's answers necessarily involved general acceptance of Mr Holt's evidence and rejection of the statements of Mrs Holt (Judgment [39] - [48]). Mr Holt did not identify any error in that reasoning, and I see no basis for regarding it as erroneous. Contrary to Mr Holt's submissions, for the reasons given by her Honour, the jury's answers in respect of the contextual imputations not found to be true did not relevantly circumscribe the findings it was open to her Honour to make concerning mitigation of damages.

Alleged error in making factual findings

26. Mr Holt submitted that the primary judge engaged in an impermissible "roving inquiry" in which she "proceeded to wring from the evidence before her virtually every conceivable adverse finding or inference available against the appellant ... " (submissions dated 25 February 2013 [50]). This emotive submission does not fairly describe her Honour's approach which involved her carefully considering the evidence in the case to determine what inferences should be drawn concerning Mr Holt's behaviour towards his wife. This approach was sanctioned by the following statement of principle in Pamplin v Express Newspapers Ltd [1988] 1 WLR 116 at 120, the authority of which Mr Holt did not challenge:

"So much for evidence which is directed solely to establishing the plaintiff's previous bad reputation. But a defendant is also entitled to rely in mitigation of damages on any other evidence which is properly before the court and jury. This other evidence can include evidence which has been primarily directed to, for example, a plea of justification or fair comment".

27. To similar effect was the statement of Keene LJ in Turner v News Group Newspapers Ltd [2006] EWCA Civ 540; [2006] 1 WLR 3469 at [43] that:

"It has long been established that evidence of specific acts properly admitted on [a plea of justification or fair comment] may ... be taken into account by the jury when assessing damages even though the plea has failed".

28. By reference to Jones v Pollard [1997] EMLR 233, Keene LJ noted that to be used for this purpose, the evidence must relate to "the relevant sector of the plaintiff's life" (at [45]). The respondents contended, necessarily contrary to Turner, that that qualification did not apply in the case of "Pamplin evidence" but as the evidence in question on appeal did in my view all relate to the relevant sector it is unnecessary to address the submission. The respondents did not dispute that this was so.

29. The qualification referred to by Keene LJ reflects the requirement that evidence led by a defendant of a plaintiff's bad character must relate to the sector of the plaintiff's reputation with which the imputations relied upon by the plaintiff were concerned (Australian Broadcasting Corporation v McBride [2001] NSWCA 322; 53 NSWLR 430 at [16] - [23]; Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232 at [162]).

30. In John Fairfax Publications Pty Ltd v Zunter [2006] NSWCA 227, Handley JA (with whom Spigelman CJ and McColl JA agreed) applied the principle referred to in Pamplin, noting that there was no reason why the same use should not be made in assessing damages of evidence led in support of a failed defence based on the truth of contextual imputations (at [51]).

31. Mr Holt did not suggest that the evidence that the primary judge relied upon to support her findings of fact was not properly before her in relation to one or more of the issues litigated at trial. These included the respondents' justification and contextual truth defences. Her Honour was conscious of the need to confine her use of the relevant evidence to that relating to the sector of Mr Holt's life with which the imputations of which he complained were concerned. Indeed she found that the fact, revealed by the evidence, that he had committed social security fraud in applying for and obtaining a carer's pension could not be taken into account in the assessment of damages because it was outside the "relevant sector". That is, it did not relate to the part of Mr Holt's reputation with which the imputations of which he complained were concerned. In her Honour's view, the relevant sector was Mr Holt's reputation "as a husband who was loving, responsible and considerate towards his wife" (Judgment [112]). She held social security fraud to be outside that sector.

32. The law is undoubtedly concerned "to prevent [defamation] trials from becoming roving inquiries into the plaintiff's reputation, character or disposition" (Burstein v Times Newspapers Ltd [2000] EWCA Civ 338; [2001] 1 WLR 579 at [35]; McBride at [16]) but that policy was not infringed in the present case. The policy is manifested by the rule that, in general, evidence of "particular acts of misconduct on the part of the plaintiff tending to show his character and disposition", as distinct from evidence of general bad reputation, is inadmissible in mitigation of damages (Gatley on Libel and Slander (11th ed 2008, Sweet & Maxwell) at [35.30]). This rule does not apply to evidence, such as led in Burstein, of particular facts which are directly relevant to the contextual background in which a defamatory publication came to be made. Nor is it applicable where, as described in Pamplin and as was the case here, the evidence is properly before the Court on another issue.

THE CHALLENGES TO THE FACTUAL FINDINGS AND THE USES TO WHICH THE FINDINGS WERE PUT

General findings as to credit

33. The primary judge formed an adverse view of Mr Holt's credibility (Judgment [56] - [61]). He challenged this conclusion but to succeed in that challenge he needed to satisfy the Court that it was contrary to "incontrovertible facts or uncontested testimony", "glaringly improbable" or "contrary to compelling inferences" (Fox v Percy [2003] HCA 22; 214 CLR 118 at [28] - [29]).

34. Mr Holt's principal argument was that her Honour erred in accepting the statements of Mrs Holt as generally reliable (Judgment [65]) and that that error infected her Honour's conclusions concerning his credit because their evidence and statements related to many of the same topics. Subject to that argument (to which I turn in the next paragraph), Mr Holt raised no arguable basis for concluding that any of the tests stated in Fox v Percy have been satisfied. He relied upon State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; 73 ALJR 306 at [63] but he was unable to point to anything in the present case comparable to the documents and accountants' analysis which there contradicted the primary judge's conclusions on credit.

35. As noted earlier, Mrs Holt died before the hearing at first instance. The evidence of her recollections, assertions and views was not therefore sworn testimony given in the present proceedings. It was in video footage on which interviews with her appear, documents of hers, an affidavit sworn in other proceedings and documents which record matters attributed to her. I do not accept Mr Holt's submission that in these circumstances the primary judge enjoyed no particular advantage over this Court in assessing Mrs Holt's veracity and reliability.

36. First, the primary judge had the advantage of consideration of the whole of the evidence during the course of a lengthy (nine day) trial, in contrast to this Court's more limited engagement with the evidence through reference by counsel to particular aspects of it and its own reading of portions of it (see Fox v Percy at [23]). Secondly, the primary judge could not, and did not, consider the veracity and reliability of Mrs Holt's statements in isolation from Mr Holt's evidence. Consideration of Mrs Holt's statements was inextricably intertwined with the primary judge's assessment of Mr Holt's evidence which her Honour had the advantage over this Court of seeing and hearing being given.

37. These matters are sufficient to render the principles referred to in Fox v Percy applicable to the primary judge's finding concerning the reliability of Mrs Holt's statements. In Abalos v Australian Postal Commission [1990] HCA 47; 171 CLR 167 at 178, McHugh J (with whom the other members of the Court agreed) cited with approval the statement of Lord Sumner in SS Hontestroom v SS Sagaporack [1927] AC 37 at 47 to the effect that the relevant principles are applicable wherever the judge's assessment of demeanour forms any substantial part of the judge's reasoning. It is clear that the primary judge's assessment here of Mr Holt's evidence was a significant factor in her assessment of the reliability of Mrs Holt's statements, and vice versa.

38. In his written submissions, Mr Holt listed a number of matters said to indicate the unreliability of Mrs Holt's statements. These related principally to the impact of Mrs Holt's deteriorating health. This was a fact of which the primary judge was undoubtedly fully cognisant. Mr Holt's submissions in this context amounted to no more than an attempt to have this Court reassess the reliability of Mrs Holt's statements. They did not raise an arguable case that any of the Fox v Percy tests were satisfied.

Finding 1: The plaintiff took $75,000 and used it in a morally despicable way

39. This finding overlaps to a considerable extent with contextual imputation (v) (see [6] above), which the jury found to be true. However the characterisation of Mr Holt's conduct as "morally despicable" in the primary judge's finding carries an additional sting. Mr Holt submitted that that characterisation was not warranted, notwithstanding that he accepted in cross-examination that it was accurate.

40. Whilst it is true, as Mr Holt submitted, that this admission was considerably less than conclusive because the moral standard upon which it was based was arguably indeterminate (compare Grey v Australian Motorists and General Insurance Co Pty Limited [1976] 1 NSWLR 669 at 675 - 6; Dovuro Pty Ltd v Wilkins [2003] HCA 51; 215 CLR 317 at [70] - [71]), in my view the evidence as a whole fully justified the primary judge's description of the conduct. Mr Holt's admission was but one part of the evidence from which that evaluative conclusion was able to be, and was, reached.

Finding 2: The plaintiff left his wife without financial support, notwithstanding that he had the means to give her such support, and left her to the charity of others

41. Mr Holt submitted that this finding was not warranted because Mrs Holt made no request or demand to Mr Holt for such support.

42. However Mr Holt was well aware of his wife's financial position and dire health condition. On learning when visiting her in hospital of her intention to divorce him he took her last $75,000 out of their joint bank account and put it in a cupboard so that she did not have access to it. This left Mrs Holt in the position of having to seek the assistance of the Salvation Army and the charity of her relatives for her ongoing care and accommodation. The inference that Mr Holt was not prepared to provide financial assistance to his wife was well justified by the evidence, with the result that the challenge to finding 2 fails.

43. Further, I do not accept Mr Holt's submission that the conduct found could operate at best in "moderate mitigation" of his loss. On the contrary, the primary judge was entitled to give it considerable weight as it was an example of disgraceful behaviour of Mr Holt towards his wife.

Finding 3: The plaintiff hit his wife twice when she was dying of cancer

44. In his submissions in support of his challenge to this finding, Mr Holt raised again the reliability of Mrs Holt's statements. He submitted that Mrs Holt's statements that she was hit by Mr Holt should not be regarded as reliable. The comments I made earlier (see [33] - [38]) concerning Mrs Holt's reliability are applicable to this particular issue, as well as generally. Moreover, the primary judge had the benefit of evidence from Mrs Holt's sister of a relevant admission by Mr Holt (Judgment [87] - [89]). As a result, the finding was clearly open to her Honour and no error has been demonstrated.

45. Further, I reject Mr Holt's submission that his conduct as found "could rationally have only a moderate (although not trivial) mitigating effect". It was clearly capable of being regarded as a circumstance strongly adverse to Mr Holt in the sector with which his imputations dealt, namely, as her Honour described it, Mr Holt's reputation "as a husband who was loving, responsible and considerate towards his wife" (Judgment [112]) or, as Mr Holt described it "his reputation for caring for his wife" (submissions dated 25 February 2013, [40]).

Finding 4: The plaintiff forced his wife against her will to sleep on the sofa

46. The primary judge made this finding to resolve a stark conflict between the descriptions of Mr and Mrs Holt as to why Mrs Holt came to sleep on the sofa rather than in their bedroom. Mrs Holt's version was contained in a Federal Magistrates Court affidavit. It was open to the primary judge to accept that evidence as reliable and reject the contrary evidence of Mr Holt. The issue was one that plainly involved issues of credit to which the principles in Fox v Percy were applicable. Mr Holt did not establish any arguable basis for concluding that any of the tests stated in that case were satisfied.

47. Mr Holt submitted that "it may be doubted that [this finding] qualifies as part of the 'directly relevant background (context)', in the sense explained in the authorities such as Burstein and Turner". However as pointed out in [26] and [31] above, the principle stated in Pamplin enabled her Honour's findings to be taken into account. Recourse to the principle stated in Burstein was unnecessary.

Finding 5: Finding re offer of $10,000

48. The circumstances giving rise to this finding were described by the primary judge as follows:

"15 When Mrs Holt was in Sydney [in mid 2009] she saw Mr Frank, a solicitor, and commenced Family Law proceedings against the plaintiff in the Federal Magistrates Court. She affirmed an affidavit in which she deposed:

'From the little contact I have had in the community with funeral directors, I understand the average cost of a funeral is about $10,000.00.'

16 The plaintiff swore an affidavit which he filed in those proceedings in which he deposed that by 8 July 2009, the day he swore the affidavit, he had spent almost all of the remaining $75,000. The plaintiff's affidavit constituted the only evidence of how he had spent the $75,000.

17 Mrs Holt received $10,000 and the Holden Rodeo in full and final settlement of her claims. She changed her will and left her property to two of her sisters. She also revoked the EPOA which she had given to the plaintiff in 2007."

49. The respondents requested the primary judge to find that Mr Holt "committed social security fraud and also failed to disclose his contingency fund in the affidavit he swore in the Federal Magistrates Court proceedings". However her Honour found that social security fraud was outside the relevant sector and should be disregarded on the issue of mitigation of damages (Judgment [112] - [113]). Her Honour also found that the respondents had not established the existence of a $10,000 contingency fund and therefore had not established that Mr Holt failed to disclose such a fund in the affidavit referred to (Judgment [114]).

50. However her Honour did take into account on mitigation Mr Holt's conduct described as follows:

"115 It is, in my view, more likely that the plaintiff still retained some of the $75,000 at that time. I am not persuaded that the monetary component of the settlement came from a separate contingency fund. I consider that the amount of $10,000 was offered, not because it represented the amount of any contingency fund, but rather because it was the amount that Mrs Holt had stipulated in her affidavit to which he was responding would be required to cover the costs of her funeral. It was, in my view, a cynical offer which took advantage of Mrs Holt's imminent demise and her desire not to burden her parents with the costs associated with her funeral, which they, as pensioners, could presumably ill afford."

51. Her Honour's comment that the offer was a cynical one was presumably intended to indicate a view that Mr Holt took advantage of the circumstances to keep what he had to pay to a minimum. This was a comment that was fairly open to her Honour on the evidence and not one which, as Mr Holt contended, needed to have been specifically raised with him in cross-examination. In any event it could not be regarded as of any particular significance by way of mitigation bearing in mind the other far more derogatory findings made by her Honour and the jury.

52. This view accords with Mr Holt's submission that her Honour's findings "do not seem to add anything of substance to the mitigating effect of contextual imputation (ii)". Whilst I do not consider that they added nothing of substance, I agree that they added little. There is no reason to think that her Honour thought otherwise. As a result, any error made by her Honour in relation to this finding was not material.

Finding 6: During the period from February 2007 until May 2009, the plaintiff collected a carer's pension on the basis that he was caring for Mrs Holt and was not working when he was actually working for cash

53. This was again an issue involving an assessment of Mr Holt's credit. His evidence stood against various items of evidence, both documentary and oral, that he was working during the relevant period. He did not establish any arguable basis for a conclusion that any of the tests in Fox v Percy were satisfied, with the consequence that his challenge to the making of this factual finding fails.

54. In the alternative, Mr Holt submitted that the finding should not have been taken into account because it did not relate to conduct in the relevant sector of his reputation, it being said not to impact upon the relationship between Mr Holt and his wife. I do not accept this to be the case as the point of her Honour's finding was that it supported Mrs Holt's "evidence" that Mr Holt worked rather than stayed at home to care for her. As Mrs Holt said in a filmed interview (quoted by the primary judge at Judgment [121]), "He was supposed to be home with me. But he worked".

Finding 7: The plaintiff selfishly and insensitively used Mrs Holt's TPD benefit to buy the Dog House and the Holden Rodeo, a vehicle of sufficient power to tow the Dog House

55. This finding relates to Mr Holt's purchase of a power boat with funds deriving from Mrs Holt's total disability benefit payment. The primary judge's conclusion was as follows:

"In my view, the plaintiff's purchase of another, larger and more powerful, boat [than one that he already owned], which then necessitated the purchase of a powerful car to tow it, was both selfish and insensitive. Even if I accepted, which I do not, that Mrs Holt condoned, or even encouraged, the purchase, his conduct would, in any event, mitigate his damages" (Judgment [129]).

56. Mr Holt challenged an earlier conclusion of the primary judge that Mrs Holt did not condone or encourage the purchases but the passage just quoted indicates that her Honour did not regard that conclusion of significance. She considered that, either way, it was "selfish and insensitive" of Mr Holt to make the purchases. It was well open to her Honour to take this view. Contrary to Mr Holt's submissions, it is not of significance that the respondents did not ask for this specific finding as it was a relevant comment for her Honour to make on the evidence led before her.

Findings 8, 9 and 10

57. Finding 8 related to a matter that the primary judge found was not appropriate to take into account in mitigation of damages. It therefore does not arise for consideration on Mr Holt's appeal. The position is the same in relation to finding 9 which her Honour found was co-extensive with contextual imputation (ii) and did not therefore have any additional effect by way of mitigation.

58. Finding 10 comprised the jury's findings as to the truth of contextual imputations (ii) and (v) (see [6] above). Mr Holt did not seek to challenge these findings or their relevance to the mitigation of damages.

Further findings of fact

59. At [145] to [156] of her Judgment the primary judge made further findings of fact (see [9] above) which she took into account on the assessment of damages. These were largely, although not wholly, adverse to Mr Holt. They related to different aspects of his relationship with his wife. Contrary to his submission, it is not in my view of significance that the respondents did not specifically ask for these findings to be made. They were ones fairly open to her Honour to make bearing in mind that this was a case in which the nature of the relationship between Mr Holt and his wife was in issue and a wealth of evidence was presented on that topic.

60. Mr Holt's specific objections to these findings are addressed as follows.

61. Contrary to Mr Holt's submission, there was evidence from which the primary judge was entitled to conclude that Mrs Holt was alienated from her own family because of Mr Holt's conduct towards them: see for example the evidence of Mrs Holt's mother at transcript p 280 and that of her sister at transcript p 270 (see also the Hospital Progress Notes for 12 February 2009, although note the primary judge's comment at Judgment [55] that she did not regard the medical records in evidence as "particularly reliable").

62. As to the second finding, there was ample evidence that Mr Holt, in effect, went on a spending spree with Mrs Holt's money (see the evidence referred to in the respondents' written submissions dated 25 September 2013 at [3], [8] - [14] and [33] - [38]).

63. Mr Holt's criticism of the third finding also cannot be accepted. As the respondents submitted, the primary judge's point was essentially that Mr Holt wanted to control how his wife's money was spent, her Honour saying:

" ... I consider that the plaintiff wanted to be the sole arbiter of how his wife's money was spent. In so far as he spent the money on his wife, he wanted it to reflect his own largesse. This explains why he bought her a lounge suite, a flat screen television and a large fish tank and had it all installed when she was away one weekend" (Judgment [154]).

64. Her Honour's comment concerning largesse was in my view a fair inference from what was proved concerning Mr Holt's control of the money and his purchase of various items for Mrs Holt's benefit.

65. The fourth finding related to Mr Holt's entertainment of his friends. The primary judge's comment that he acted insensitively was well open in light of the evidence that, whilst Mrs Holt was seriously ill, he had regular drinking sessions with friends at the family home starting at 4.00 pm, and that these upset Mrs Holt (see transcript pp 64 - 5, 180 - 1 and 201).

66. Mr Holt further submitted that the four identified additional findings of fact were "substantially irrelevant to the plaintiff's reputation, did not have any, or only little, mitigating effect and were to a significant extent repetitive of other matters taken into account on mitigation". However each of the matters, including that concerning alienation of Mrs Holt from her family, related to the relationship between Mr Holt and his wife. Whilst the matters were of varying importance, each was of some significance in relation to mitigation and added in a not insubstantial way to the other matters the primary judge took into account.

67. Mr Holt submitted, in particular, that her Honour made a finding about drink driving and that that was "plainly in a different sector of the plaintiff's reputation", rendering it irrelevant to the issue of mitigation.

68. The finding was in fact in the following terms:

"156 The plaintiff attributed physical aggression to his wife in connection with at least one event involving car keys. I am, however, satisfied that in so far as there was [a] tussle between them, it arose because she wanted to prevent his driving while intoxicated and he resisted her intervention. Far from reflecting, as the plaintiff would have it, [a] 'chemo brain', I consider that such conduct exhibited her continuing sense of responsibility both for the plaintiff himself and for those who could be harmed by his recklessness".

69. It is apparent that the finding of "drink driving" was incidental to an examination of the reason for Mr Holt's physical aggression towards his wife in connection with at least one event that involved car keys. What was relevant to the issue of mitigation was Mr Holt's physical aggression and that it arose out of unreasonable behaviour on his part. These findings thus related to the relevant sector of his reputation.

AGGRAVATED DAMAGES

70. Mr Holt claimed aggravated damages on the basis that the respondents had taken a biased approach to the broadcast by omitting from it a portion of an interview by Mr Fordham of Mr Holt in which Mr Holt said that he had genuinely wanted his wife back home from hospital. The primary judge rejected this claim because she found that Mr Holt's assertion that he had wanted Mrs Holt at home was false.

71. This was a credit issue to which the principles in Fox v Percy are applicable (see [33] above). There was ample evidence to provide a foundation for the primary judge's finding, not least of it that, on her Honour's findings, Mr Holt had taken his wife's last $75,000 without her authority and had spent most, if not all, of it, and that by the time of the interview in July 2009 he had a publicly known relationship with another woman (Judgment [166] and [167]).

72. In these circumstances it is unnecessary to consider whether, but for her Honour's finding, Mr Holt would have been entitled to aggravated damages.

WHETHER AWARD OF DAMAGES MANIFESTLY INADEQUATE

73. The three purposes of an award of damages for defamation are "consolation for the personal distress and hurt caused to the [plaintiff] by the publication, reparation for the harm done to the [plaintiff's] personal and (if relevant) business reputation and vindication of the [plaintiff's] reputation" (Carson v John Fairfax at 60). These three purposes overlap, with the result that a verdict "is the product of a mixture of inextricable considerations" (ibid).

74. In determining the amount of damages to be awarded, the Court is to ensure that "there is an appropriate and rational relationship between the harm sustained by the plaintiff and the amount of damages awarded" (Defamation Act, s 34). In the assessment of damages, "a person's reputation is accorded high value" (Mahommed at [271]).

75. The principles stated in House v The King [1936] HCA 40; 55 CLR 499 at 504 - 5 concerning appellate review of an exercise of discretion are applicable to a challenge on the basis of manifest excess or inadequacy to an award of damages for defamation (Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327 at [62] per Hayne J with whom Gleeson CJ and Gummow J relevantly agreed). Thus, unless a specific error can be established, it must be shown that the award is so high or so low (as the case may be) that the appellate court may infer that error has occurred in the assessment process (see House at 505). An award will only be set aside if it is "outside the range of what could reasonably be regarded as appropriate in the circumstances of the case" (Carson v John Fairfax at [61] - [62]; Mahommed at [269]). The question for the appellate court is "whether the result at which the trial judge arrived bespeaks error" (Rogers at [64]).

76. The sum of $4,500 plus $400 interest that the primary judge awarded was undoubtedly small when considered solely in the context of the untrue imputations concerning the plaintiff that were made in the broadcast. However, as her Honour made clear, her conclusion was largely driven by her view of the evidence relied upon in mitigation. She concluded that by reason of this the harm suffered by Mr Holt should be regarded as "relatively slight" (Judgment [179] - [180]). The possibility of such an outcome was contemplated in Pamplin where Neill LJ spoke of a defendant's ability to rely on acts in mitigation to reduce damages "perhaps almost to vanishing point" (at [120]).

77. Mr Holt has not established any specific error on the part of the primary judge and in my view the size of the award does not itself "bespeak error". On the contrary, I consider that the matters that the primary judge took into account by way of mitigation justified the conclusion reached by her Honour that Mr Holt suffered little, if any, damage by reason of the untrue imputations upon which he relied. The factual findings that her Honour made, together with the two contextual imputations found by the jury to be true, reflected conduct of Mr Holt in the context of his relationship with his wife that was, to a greater or lesser extent, disgraceful. The mitigatory effect of these findings almost wholly negated the impact of the untrue imputations upon which Mr Holt relied.

78. I should note at this point that counsel for Mr Holt did not contend that as a matter of principle (rather than by reason of the alleged specific errors addressed in this judgment) the primary judge was not entitled to take into account in assessing damages the various findings of fact that she made (see [8] and [9] above). When the Court raised this issue, counsel confirmed that it was not contended that because the findings of fact (apart from those as to the truth of two of the contextual imputations) related to matters of which viewers of the broadcast were not aware or informed and could not otherwise be said necessarily to go to Mr Holt's reputation rather than his character, the findings could not be taken into account by way of mitigation (Transcript pp 29 - 30). The basis for this approach was presumably the authority that evidence led in support of a failed defence of justification may be relied upon in mitigation of damages by way of partial justification (see for example Fairfax Media Publications Pty Ltd v Kermode [2011] NSWCA 174; 81 NSWLR 157 at [47], [59] and [86] and the references there given).

79. In these circumstances, it is unnecessary to consider whether Grobbelaar v News Group Newspapers Ltd [2002] UKHL 40; [2002] 1 WLR 3024 is, as Mr Holt contended, simply an example of evidence in partial justification being taken into account in the assessment of damages or whether it is authority for a wider proposition that is arguably in conflict with the well-established principle that defamation law is concerned with a person's reputation, not his or her character (see for example Mahommed at [152]).

CHALLENGE TO COSTS ORDER

80. By judgment of 23 August 2012, the primary judge rejected Mr Holt's application for an order that the respondents pay his costs of the proceedings on an indemnity basis or at least on a party/party basis ([2012] NSWSC 968). Instead, her Honour ordered the respondents to pay half of Mr Holt's costs of the proceedings on a party/party basis.

81. On appeal, Mr Holt put two arguments. First, he contended that by reason of s 40(2)(a) of the Defamation Act he was entitled to be paid his costs on an indemnity basis. Secondly, he contended that, whether on an indemnity or party/party basis, he was entitled to be paid the whole of his costs.

The indemnity costs issue

82. Section 40 the Defamation Act relevantly provides:

"40 Costs in defamation proceedings

...

(2) Without limiting subsection (1), a court must (unless the interests of justice require otherwise):

(a) if defamation proceedings are successfully brought by a plaintiff and costs in the proceedings are to be awarded to the plaintiff-order costs of and incidental to the proceedings to be assessed on an indemnity basis if the court is satisfied that the defendant unreasonably failed to make a settlement offer or agree to a settlement offer proposed by the plaintiff, or

...

(3) In this section:

settlement offer means any offer to settle the proceedings made before the proceedings are determined, and includes an offer to make amends (whether made before or after the proceedings are commenced), that was a reasonable offer at the time it was made."

83. Having earlier referred to an offer made by Mr Holt to settle the proceedings, the primary judge summarised her conclusions as follows:

"62 In my view it was not unreasonable in the instant case for the defendants to fail to accept the plaintiff's offer to settle the proceedings for $90,000 plus costs. A payment of $90,000 plus costs to resolve the proceedings would have amounted to a substantial vindication of the plaintiff's reputation. For the reasons given above, the defendants had a reasonably arguable defence, truth, which could have defeated the plaintiff's claim. They also had substantial evidence in mitigation which they had reason to believe would reduce the damages which the plaintiff might be awarded either to a derisory, or a relatively modest, amount. In these circumstances it was also not unreasonable for the defendants not to make any settlement offer at all."

84. Mr Holt submitted that the reference in s 40(2)(a) to unreasonable failure of a defendant to make a settlement offer "is not directed to an assessment of prospects by the defendant" but to "matters which go to the reasonableness of making or not making an offer at all" (Amended Written Submissions dated 13 October 2013, [78]). The effect of this submission appears to be a contention that in considering the costs order to be made, the judge cannot take into account what the judge concludes would have been a reasonable view for the defendant to take about its prospects of success in the proceedings. I can see no basis for so restricting the court's discretion. There is no reason why the court cannot, as her Honour did here, take that matter into account in deciding whether it was unreasonable for the defendant not to have made an offer at all.

85. Accordingly, the challenge to her Honour's decision not to award indemnity costs fails. It was not contended on appeal that her Honour erred in not finding that the respondents acted unreasonably in failing to accept Mr Holt's offer of a judgment for $95,000 plus costs.

The differential costs order

86. Her Honour's conclusions on this issue were as follows:

"52 In my view, it is appropriate to order the defendant to pay half of the plaintiff's costs of the proceedings on a party/ party basis.

53 First, for the reasons given above, I do not accept the plaintiff's submissions that it would be erroneous for me, in circumstances where no sensible division could be made between issues in the case, to make a differential award of costs in the instant case.

54 As I have said above, I consider that it is in the interests of justice to require the defendants to pay only half of the plaintiff's costs. This reduced award takes account of the plaintiff's own conduct in the proceedings, including his deliberately false evidence and his disinclination to make admissions absent overwhelming evidence garnered by the defendants. It also takes account of the circumstance that the award of damages was slightly, but not substantially, more than derisory."

87. Mr Holt submitted:

"The only principled basis for such a decision was that the losing party had enjoyed success on some issue that was clearly dominant or separable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64] per Campbell JA; Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328, per Mahoney JA, at 330-331" (ibid [82]).

88. The authorities cited do not support this proposition. Relevantly they only support the proposition that the "usual circumstance in which a court will deprive the successful party of the costs relating to an issue on which the successful party lost, is when that issue is clearly dominant or separable" (Monie v Commonwealth at [64]). They do not suggest that matters such as those taken into account by her Honour may not be considered. In my view her Honour was clearly entitled to take those matters into account. As a result, Mr Holt's challenge to the differential costs order should be rejected.

ORDERS

89. For the reasons I have given, the appeal should be dismissed with costs.

90. GLEESON JA: I agree with Macfarlan JA.

91. SACKVILLE AJA: The appellant criticised the primary judge's reasoning on damages on the ground, among others, that her Honour discounted the award of damages for hurt feelings because the distress the appellant experienced as a result of the broadcast reflected an "unrealistic" assessment of the extent to which the broadcast truly affected his reputation (primary judgment, at [178]). This was said to constitute an error because damages for hurt feelings in defamation are to be assessed by reference to the plaintiff's subjective response to the defamatory publication, rather than an objective assessment of the hurt that the plaintiff should reasonably have experienced by reason of the publication.

92. If her Honour had done what the appellant attributed to her, she might have well have fallen into error. In Ali v Nationwide News Pty Ltd [2008] NSWCA 183, Tobias and McColl JJA endorsed (at [77]) the observation of Miles CJ in Humphries v TWT Ltd [1993] ACTSC 24; 113 FLR 402 at 418 - 19, that the defendant in a defamation action must take the plaintiff as it finds him or her, including any particular sensitivities the plaintiff may possess. Tobias and McColl JJA also noted (at [78]) that, although Miles CJ's decision was reversed on appeal (by increasing the award of damages), his Honour's reasoning on this point was not disturbed by the Full Federal Court: Humphries v TWT Ltd [1993] FCA 577; 120 ALR 693.

93. In Humphries, Miles CJ quoted (at 416 - 17) observations made by Lord Diplock in Broome v Cassell [1972] UKHL 3; [1972] AC 1027, at 1125:

"the harm caused to the plaintiff by the publication of a libel upon him often lies more in his own feelings, what he thinks other people are thinking of him, than in actual change made manifest in their attitude towards him."

Miles CJ went on to say (at 15) that the damage to a plaintiff's feelings can be more important than the observable damage to his or her reputation or to the need for vindication. His Honour also recognised (at 17) that it is not every case in which substantial damages must be awarded for hurt to the plaintiff's feelings.

94. Because of the importance that is often attached to the hurt feelings experienced by a plaintiff in defamation proceedings, the remarks of Brennan J in Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44, at 71, cited by Macfarlan JA (at [15]), may not be a complete answer to the appellant's complaint. However, when the primary judgment is read as a whole, it can be seen that the primary judge did accept that publication of the broadcast continued to affect both the plaintiff's reputation and his subjective feelings. It was the evidence adduced by the respondent in mitigation of the appellant's damages, that persuaded her Honour to award only a very modest sum as damages. For the reasons given by Macfarlan JA, there was no error in her Honour taking this course.

95. I agree with the orders proposed by Macfarlan JA.

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Amendments