Greig v WIN Television NSW Pty Limited [2009] NSWSC 632 (10 July 2009)

Last Updated: 31 August 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
Greig v WIN Television NSW Pty Limited [2009] NSWSC 632
This decision has been amended. Please see the end of the judgment for a list of the amendments.

JURISDICTION:
Civil

FILE NUMBER(S):
2007/20207

HEARING DATE(S):
6-28 April 2009

JUDGMENT DATE:
10 July 2009

PARTIES:
Michelina Greig (Pltf)
WIN Television (Def)

JUDGMENT OF:
McClellan CJatCL

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
T K Tobin QC/E A Cheeseman (Pltf)
B R McClintock SC/M Lynch (Def)

SOLICITORS:
Bussoletti Lawyers (Pltf)
Banki Haddock Fiora (Def)


CATCHWORDS:
DEFAMATION – justification – truth – withdrawal of defence from jury for lack of evidence – “reasonable suspicion” and “reasonable grounds” imputations – requirement that the defendant prove the truth of the imputations by reference to the objective evidence of the conduct of the plaintiff – insufficient to rely on conduct of third parties as proving the truth of the imputation – DEFAMATION – justification – truth – substantial truth – proof of the sting of the imputation – material inaccuracy – DEFAMATION – damages – aggravated damages

LEGISLATION CITED:
Defamation Act 2005

CATEGORY:
Principal judgment

CASES CITED:
Aktas v Westpac Banking Corporation Ltd (2009) NSWCA 9
Carson v John Fairfax & Sons Limited [1993] HCA 31; (1993) 178 CLR 44
Chase v Newsgroup Newspapers Ltd [2002] EWCA Civ 1772; [2003] EMLR 218
Edwards v Bell (1824) Bing 403
Jackson v John Fairfax & Sons Ltd (1981) 1 NSWLR 36
Jarrett v John Fairfax Publications Pty Ltd (2001) NSWSC 739
King v Telegraph Group Ltd [2004] EWCA Civ 613 [2005] 1 WLR 2282
Lewis v Daily Telegraph Ltd [1964] AC 235
McCarey v Associated Newspapers Ltd & Ors [1964] 3 All ER 947
McKenzie v Mervyn Holdings Pty Ltd & Anor (1990) 20 NSWLR 42
Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632
Obeid v John Fairfax Publications Pty Ltd (2006) NSWSC 1059; 68 NSWLR 150
Sergi v Australian Broadcasting Commission (1983) 2 NSWLR 669
Shah v Standard Chartered Bank [1998] EWCA Civ 612; [1999] QB 241
Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497
Weaver v Lloyd (1824) 2 B&C 678
Western Australian Newspapers Limited v Elliott [2008] 250 ALR 363
Whalan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148

TEXTS CITED:


DECISION:
Verdict for the plaintiff



JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

DEFAMATION LIST

McCLELLAN CJ at CL

FRIDAY 10 JULY 2009

20207/2007 GREIG v WIN TELEVISION NSW PTY LIMITED

JUDGMENT

1 HIS HONOUR: In a news item broadcast by the defendant on its television station, Channel 4 Wollongong, on the evening of 28 March 2007 Michele Greig (“the plaintiff”) was defamed (“the first matter complained of”). At about the same time the defendant posted a news item on its web site in the same terms as the words which were broadcast on the television (“the second matter complained of”). The broadcast was made on one occasion. Notwithstanding repeated requests made by the plaintiff’s solicitor for its removal, the news item remained on the defendant’s website from 28 March 2007 until late February 2008.

2 The transcript of the broadcast reads as follows:

“Questions are being raised at Shellharbour City Council, over Deputy Mayor Michelle Greig’s handling of planned councillor technology upgrade, while filling in for Mayor David Hamilton.

The Project involved updating councillor communication technology requirements.

WIN News understands Ms Greig had a meeting with private communication representatives and later received two blackberry devices.

It’s believed the technology upgrade proposal had been listed on Council’s business papers for a vote before council, but was taken off by General Manger Brian Weir and referred to the Independent Commission Against Corruption after he discovered a meeting had taken place.

As the matter didn’t go to council, ICAC did not deliver a finding, however suggested the issue instead be referred back before Council’s Code of Conduct Committee.

Council and Ms Greig have declined to comment.”

3 The plaintiff brought proceedings for defamation under the Defamation Act 2005 (“the Act”). With respect to each publication the plaintiff pleaded six imputations as follows:

a. The plaintiff as Deputy Mayor of Shellharbour City Council took a bribe;

b. The plaintiff conducted herself in such a way as to give rise to the reasonable suspicion that in handling a planned councillor technology upgrade for the Shellharbour City Council she had acted corruptly in accepting BlackBerry devices from private communications representatives;

c. The plaintiff acted corruptly in presenting a technology upgrade proposal to the Shellharbour City Council in return for receiving BlackBerry devices from private communications representatives;

d. The plaintiff conducted herself in such a way as to give rise to the reasonable suspicion that she had acted corruptly in presenting a technology upgrade proposal to the Shellharbour City Council in return for receiving BlackBerry devices from private communications representatives.

e. The plaintiff conducted herself in such a way as to provide reasonable grounds for the Shellharbour City Council to refer her conduct to the Independent Commission Against Corruption;

f. The plaintiff conducted herself in such a way as to provide reasonable grounds for the Independent Commission Against Corruption to refer her conduct to the Shellharbour City Council’s Code of Conduct Committee.

4 The jury found only three of the imputations being imputations (b), (e) and (f) were published. The jury found these imputations to be defamatory of the plaintiff.

5 The defendant pleaded justification in relation to these imputations. However, the plaintiff submitted that there was no evidence sufficient to go to the jury to justify any of the imputations. When, during the course of the trial, that issue was first considered I was of the view that it should be resolved by the jury. However, when senior counsel for the defendant commenced his address to the jury it was apparent that there were problems, which had not previously been considered, with the manner in which the defendant constructed its argument on these matters. Counsel’s address was interrupted and the plaintiff’s application for withdrawal of the defence of justification from the jury renewed. I granted that application and indicated that I would publish my reasons at a later date.

6 The defendant also pleaded qualified privilege and contextual truth defences. These were abandoned at the trial.

7 It is necessary to record the circumstances in which the publications occurred. I will then consider the evidence in respect of which the defendant submitted the jury “could reasonably find” that the pleaded imputations were true and provide my reasons for withdrawing the defence of justification from the jury. I will then consider the question of damages.

8 At the time of the defamation the plaintiff was the Deputy Mayor of Shellharbour City Council. She was first elected to the Council in 1991 and served for a term of four years. She was next elected in 2004 when she became the Deputy Mayor. After the events with which these proceedings are concerned the Council was removed by the Minister because it had become dysfunctional. The events surrounding the defamation of the plaintiff confirm that there were serious problems within the Council’s administration.

The plaintiff’s dealings with Telstra

9 The plaintiff and her family have significant business interests in the Illawarra area of New South Wales. Those interests range across a variety of activities, the detail of which is of no present relevance. However, in the course of the family business significant use is made of telecommunication and internet facilities. As any business would do the persons within the enterprise responsible for ensuring appropriate telecommunication facilities were available were regularly on the lookout for the best commercial arrangements.

10 The plaintiff’s sister, Lisa Priolo, was the office administrator of the family company, Gemsail Pty Ltd which trades as MBC Employment Services. In July 2005, unbeknown to the plaintiff and when the plaintiff was overseas, as part of her management function, Ms Priolo spoke with the local Telstra agents, Mr Valentinetti and Mr Curcio, and asked about the terms which Telstra could offer if the business engaged it to provide its communication facilities. The plaintiff’s company had previously dealt with Telstra but in recent years had placed its telecommunications business with Australia Star Communications. I infer that this type of change in a company’s telecommunication arrangements was not uncommon. Because of the number of providers who had recently come into the Australian telecommunications market Telstra was actively trying to retrieve business which it had previously enjoyed but lost.

11 Telstra made an offer to Ms Priolo in accordance with the terms of its Australia-wide promotion called Project Blueberry. This was the name given to its marketing campaign designed to “recapture” fixed line and mobile telecommunication contracts. As part of the “deal” businesses who returned their custom to Telstra received equipment, which could include BlackBerry devices and other equipment. Telstra offered the customer a communication device at no extra charge for each $10,000 of estimated business that would be contracted to Telstra. The plaintiff’s company was estimated to provide Telstra with approximately $30,000 worth of business in any year and accordingly, if it took up Telstra’s offer, was entitled to 3 communication devices. As part of the deal Ms Priolo asked for pink “Razrs” (a model of mobile phone). However, this was not available under the offer and instead the company received three BlackBerries.

12 The BlackBerries came in a package which the plaintiff’s daughter left in a room at the plaintiff’s home. The plaintiff was still overseas when the BlackBerries were delivered and on her return she was curious as to where they had come from. She, out of curiosity rather than any particular desire to use them, attempted to activate the BlackBerries but failed. She left them where they were for some period of time.

13 The plaintiff and her husband live on a farm property outside Dapto. At the time they were experiencing difficulties with the internet connection to the property which proved a frustration to the plaintiff and her husband. Mr Greig decided to explore with Telstra whether there was equipment which could overcome the difficulties and made arrangements for the local Telstra representative, Mr Valentinetti, to call at the home and discuss the problem. Mr Valentinetti arrived in early October 2005 and spoke with Mr Greig. The plaintiff was also present. Mr Valentinetti demonstrated a product known as a mini-max modem which had recently been released to the market by Telstra. It provided wireless access to the internet.

14 At the time Telstra was offering prospective clients a 30-day free trial period of the mini-max modem. The evidence of Mr Valentinetti and Mr McKenzie (also from Telstra), which was not challenged by the defendant, was that this was part of an Australia-wide offer to encourage knowledge in the community of the wireless internet connection (which was a new product) and how it worked, with a view to ultimately obtaining retail contracts. The offer made to the plaintiff’s company was consistent with the standard offer made to customers with her company’s business profile.

15 Mr Valentinetti demonstrated the mini-max using his own computer and mini-max device. He then arranged for a mini-max to be sent to the plaintiff’s farm. However, the plaintiff and her family experienced some difficulty in using the device and Mr Valentinetti concluded that new software needed to be installed on the plaintiff’s laptop. Accordingly, arrangements were made for him to meet the plaintiff at the council chambers on 12 October 2005. At that time the plaintiff was acting as the Mayor of the Council; the Mayor was overseas, and because she was required to be at the council chambers to attend to some other business she made arrangements to meet Mr Valentinetti at those premises. She said in evidence that by meeting Mr Valentinetti at the council chambers she would save him a trip to her rural property. Because she was required to be there in any event she believed it to be convenient for both of them to meet at that location. Although the fact that the plaintiff met Mr Valentinetti at the Mayor’s office has apparently occasioned some local controversy and misplaced gossip, there can be no question but that the arrangement was sensible and, in the circumstances, appropriate.

16 The meeting was arranged for the afternoon of 12 October 2005. When the plaintiff arrived there was another meeting of council officers taking place in the mayor’s office. That meeting was asked to leave. Mr Valentinetti installed the software into the plaintiff’s computer which enabled the mini-max to operate.

17 Any person when first shown a wireless internet facility is likely to be impressed by it. Its convenience for a busy person is undoubted. As was to be expected the plaintiff was impressed by the mini-max. On the afternoon that it was installed she spoke with Ms Flora Mastrodomenico and told her of the benefits. Ms Mastrodomenico was the Mayor’s secretary. Ms Mastrodomenico also recognised the benefits to her if a modem was available for it would enable her to carry out work for the council when she was absent from the council chambers. As it happened Ms Mastrodomenico also trialled the mini-max when the council itself made arrangements with Telstra to trial the device in order to determine whether it would be appropriate for council’s needs. The plaintiff had no part in the making of those arrangements.

The plaintiff sends an email

18 Apart from telling Ms Mastrodomenico of the advantages of the mini-max the plaintiff also sent an email to Mr Gearon who was the Group Manager Corporate Services for the Council and told him of the benefits which a wireless internet connection through a mini-max modem would have for councillors.

19 In the email sent on 10 November 2005 the plaintiff said:

“I have been testing the new Telstra “MAXON MINIMAX”. I am finding this device to be very convenient to my needs and would recommend this to be used by all councillors when we receive our computers. It is very easy to use and appropriate to the needs of councillors ... I believe it will also be suitable for councillors to use when we are able to access our business papers from the intranet, directly from council and not have to be home to receive the hard copy.”

20 It is of significance to the issues in these proceedings that the plaintiff made no reference to the BlackBerries in her email. This is not surprising as she had not yet been able to activate any of the BlackBerries her company had received and would not have been in a position to form a view about them.

21 Each member of Shellharbour Council was entitled to have a multi-function fax device at their home to assist in their council work. The plaintiff had a faulty fax machine at her home. She made arrangements with Mr Adam Bowyer of the Council for him to come to her property to install a new multi-function fax device. He came on 11 November 2005. While he was there he noticed the BlackBerries and the plaintiff explained to him they had been supplied by Telstra. She asked Mr Bowyer whether he could make the BlackBerries operative and in particular whether she could use it as her council phone. Each councillor was supplied with a mobile phone which they could use for council business. Mr Bowyer enquired of the appropriate council officer, Mr Baez, and obtained permission to transfer the plaintiff’s SIM card from her council telephone to the BlackBerry. Mr Baez who was a Network and Helpdesk Support Officer at the Council then made the necessary adjustments. Although the plaintiff was impressed by the mini-max she was not so disposed toward the BlackBerry.

Telstra and dealings with Council officers

22 Unbeknown to the plaintiff, Telstra was at the time actively promoting its business with councils throughout Australia. As part of its promotional activities it organised a breakfast at the Shellharbour Workers Club on 14 October 2005. Mr Valentinetti was present at the breakfast where he spoke with Mr Gearon. Mr Gearon’s account of the conversation was:

“He (Valentinetti) told (me) that Telstra had recently, very recently lost a contract that they had won with Shoalhaven City Council that had been stolen off them again. He said that this contract had been - that the council Shoalhaven Council officer's recommendation had been in favour of Telstra, that the matter had gone to the council, council had awarded the contract to Telstra, but that in a break during the meeting a councillor who apparently had some axe to grind with Telstra had got to the other councillors and changed their minds so that when they went back into the meeting rooms, a rescission motion was carried and Telstra lost the deal. And he then - he told us that the lesson for them at that point was that they had to really market, they had to really get to councillors and not just - they couldn't be satisfied with just getting to the staff.

...

...We were talking about the technology that was on the table and he said that Michele Greig was very keen on these BlackBerries and on the mini-max modem and he told us that he had in fact given her - that we had, we, Telstra - had given her three units to trial.”

23 Mr Valentinetti also gave evidence about his conversation with Mr Gearon. He confirmed that Telstra had problems with a bid it had made for the business of Shoalhaven Council. He said that they learned a valuable lesson from that experience “and that was that councillors needed to be informed, all members of council and all members of the local government decision-making process needed to be informed about the technologies that were available to provide (sic) and the things we were doing in the community.”

24 He was asked whether he remembered talking about the plaintiff at the breakfast but he said he did not. He said that he does recall talking with Mr Gearon about a councillor “who was technically savvy, who had – was utilising one of these devices and trialling one of these devices.” He said that this was a reference to a mini-max. contrary to Mr Gearon he said that he did not speak of the plaintiff being favourably inclined to BlackBerries after a trial.

25 He was asked:

“Q: Would you have said to him at the breakfast or around this time that Michele Greig was very keen on the BlackBerries and that you had given her three units to trial?

A: I don’t believe I would have because we never provided the units as trial devices. We provided a mini-max modem as a trial device, not the BlackBerries. I didn’t have a lot of exposure to those BlackBerries. I didn’t have a lot of dealing with them, I wasn’t even sure if Mrs Greig was using them.”

26 Mr Valentinetti said he never discussed a client’s private business with others. He confirmed that at the time Telstra was keen to promote its product including the mini-max and would have said to officers of Shellharbour Council and other councils that there were prominent business people who were using the technology to the benefit of their businesses. He was asked:

“Q: Did you suggest either at the breakfast or subsequently in conversation with Mr Gearon that you were lending BlackBerries and modems to Mrs Greig for extended testing on a no-charge basis so that she would in effect push these products at the council; did you ever say that to Mr Gearon?

A: No, I don’t believe I did. I certainly would have wanted to inform him that – that we were, you know, the opportunity was there for the product to be used, that there was people who were being educated in how to use it and that was not just in his own council but in other councils ... “

27 Mr Valentinetti confirmed that mini-max devices had been provided to Shellharbour Council for a trial by council officers. They were supplied to Mr Leonard who was the council’s Information Technology Manager.

28 If I was required to resolve the difference between the Council officers’ evidence and Mr Valentinetti, which I am not, I would accept the latter. The BlackBerries were never offered to the plaintiff’s company as a trial and Mr Valentinetti would have had no reason to say that they were. However, for present purposes I must consider the defendant’s case at its highest and assume the jury may accept Mr Gearon’s account.

29 Although there was undoubtedly discussion between council officers about these events the contemporary evidence of what may have been communicated between them is confined to a memorandum written by Mr Gearon and signed by him and the council’s solicitor, Mr McCann, to Mr Weir, the council’s general manager, on 22 November 2005. In that memorandum Mr Gearon said:

“It is possible that the Deputy Mayor is inadvertently being compromised by Telstra’s aggressive new strategy for marketing wireless technology, specifically ‘Blackberry’ phones and ‘MiniMax’ modems, to Councillors.

...

It is known that the Deputy Mayor invited the local Telstra account Manager, Tony Valentinetti to visit her in the Mayor’s Council office, on about October 12^th or 13^th 2005, apparently to discuss wireless technology.

Council staff attended a Telstra breakfast on Friday, October 14^th at Shellharbour Workers’ Club and were advised by Mr Valentinetti, that he had recently visited the Deputy Mayor at her office at Council and she was very keen on “Blackberry” phones. He told us that Telstra had recently missed out on a big sale to Shoalhaven Council under unusual circumstances where Council officers had recommended Telstra and a Council decision had been taken, but a disaffected Telstra customer – councillor had successfully mounted a rescission motion and the Council decision in favour of Telstra had been overturned. He said that he’d learned that he had to get directly to the Councillors in future if he was going to get sales.

...

Last week I was emailed by Cr Greig following up on another matter. Cr Greig expressed her satisfaction with the blackberry and minimax and suggested that the equipment would be good for Council issue. I told Cr Greig that this equipment was brilliant technology but that issue to councillors was a matter for consideration with the next budget.

30 This memorandum includes a significant mistake, whether deliberate or inadvertent I cannot say and it does not presently matter. As I have indicated although the plaintiff communicated her approval of the modem in her email to Mr Gearon she did not refer to the BlackBerry.

Mr Weir speaks with the plaintiff

31 Although Mr Weir received Mr Gearon’s memorandum in November 2005 he did nothing with it until 27 January 2006 when the plaintiff came to see him about other matters. She was about to depart for overseas and was endeavouring to clarify some council business before she left. During the course of the meeting Mr Weir disclosed the memorandum which he had received. He recorded his recollection of the meeting in a file note which reads as follows:

“I refer to my interview with Michele Greig last Friday 27 January 2006 where I outlined my concerns with her relationship with Telstra. I gave examples of statements made by a Telstra employee, as referred to me in writing by Council’s Group Manager, Corporate Services and Corporate Solicitor. Those Officers view very seriously the statements made by the Telstra employee on two separate occasions. His comments relate to allegations that Telstra would be using Councillors to ensure that they win contracts in the future and therefore he had met with Cr Greig at the Council offices and had provided Cr Greig with BlackBerries and modems for her use in her business at no charge to enable her to form her own opinion and hopefully make a recommendation to Council which would ensure that Telstra won the tender.

...

Cr Greig claimed that the allegations were not true and whilst Cr Greig is a Telstra customer all equipment given to her was charged against her company and she was not using any equipment free of charge. She indicate she clearly understood the consequences of the Telstra employees allegations and totally denied them other than to say that she informed Telstra that she was ‘very impressed’ with the performance of the modem.

...

I indicated that I would formally write tom (sic) her on the matter to enable her to respond to the allegations made.”

32 When told of the allegations the plaintiff, unsurprisingly, became distressed and angry. She sought information from Mr Weir as to the source of the allegations against her. Mr Weir did not provide the name of the source and the plaintiff sought to obtain it through an FOI application which she made, but which was rejected.

33 Mr Weir forwarded a letter to the plaintiff dated 1 February 2006. Although the letter said that he would, he did not wait for her response before referring the matter to the Independent Commission Against Corruption.

34 In the meantime, in circumstances which were not fully explained three file notes each dated 10 February 2005 were prepared by Mr Leonard, Mr Baez and Mr Bowyer. The year was an error, repeated in each file note which should have referred to 2006. They each refer to BlackBerries in their notes, Mr Baez repeating what he alleged he was told by Mr Bowyer. It is significant that these notes were prepared three months after the visit by Mr Bowyer to the plaintiff’s home and presumably after conversations with each other about the matter. By this time, of course, Mr Gearon had mistakenly reported that the plaintiff had commended BlackBerries to him in an email.

The plaintiff’s response to Mr Weir

35 Before responding to the letter the plaintiff decided to ask Telstra to confirm in writing the dealings which her family company had had with Telstra with respect to the BlackBerries and modem. Given the nature of the allegations this was an obviously sensible course for her to take. The letter from Telstra, which was written by Mr Mark McKenzie on 2 March 2006, was not received by Mr Weir until 17 March 2005. Although the plaintiff had been present at a council meeting on 7 February 2006, as she had indicated to the general manager, she then went overseas. After her return and on 16 March 2006, the plaintiff wrote to Mr Weir explaining the relevant circumstances. In that letter she said:

“Over the last few years my company has had a different provider for our telecommunications and my accounts staff contacted Telstra to ascertain their pricing. There were negotiations between my staff and Telstra staff and an agreed outcome resulted. Part of that agreement included mobile phones or equivalent being given to MBC as a company not Michele Greig as the person. There were three BlackBerries (sic) phones delivered to MBC Warilla office, as part of the overall deal of switching from one provider to another (often done in the Private sector).

...

Secondly, the modem, this device was introduced to me at my home on the farm in Albion Park. We were experiencing major problems with our internet connection (not council phone) and my husband wanted to see if Telstra could assist us. Tony Valentinetti, the Telstra rep, came to my home to demonstrate a new device that he thought might solve our problem of internet connection as we were unable to connect to ADSL on our property.

...

Brian, after your conversation with me, I contacted Telstra to find out what you and others were talking about and why my private business affairs were being discussed with council officers and I faxed them the letter I received from you regarding the complaint from your Council officers and I have included Telstra’s reply. Please note the contents well and in particular, the part about the negotiations regarding the BlackBerries and, in case the word of the General Manager of Telstra Country Wide (Illawarra) and my own is not good enough, I have enclosed a statutory declaration from my trusted staff member who negotiated with Telstra and who then recommended that the deal be signed off by myself or my husband on behalf of the Company.”

36 Without waiting for the plaintiff’s letter on 9 February 2006 Mr Weir sought advice about the matter from a firm of solicitors. That advice indicated that, in the solicitor’s view, it was appropriate for Mr Weir to refer the matter to the ICAC. The foundation for the reference was the reported assertion by Mr Valentinetti that Telstra had an intention to “target” councillors with a view to obtaining council sales and that Mr Valentinetti had given Mrs Greig BlackBerry phones and mini-max modems on an extended loan.

The report to the Council and its meeting of 7 February 2006

37 Throughout this period the council’s telecommunication needs were provided by Macquarie Corporate Telecommunications Pty Ltd (“Macquarie”). The contract with Macquarie was not due to expire until 26 September 2008. However, a possible need for further equipment to be provided to councillors to improve their personal efficiency had been recognised. To this end Mr Gearon brought forward a report to the council in which he recommended that the council give consideration to providing annual communications allowances to each Councillor to be used for the provision of telecommunication facilities, and provide laptop-type computers and appropriate software for all Councillors.

38 The report together with an appropriate motion was placed before the council’s meeting of 7 February 2006. There was no evidence that the plaintiff had played any part in bringing the report forward or had any input into its content. As I have indicated the plaintiff was present at that meeting and participated and voted in favour of an amended resolution which provided as follows:

“That a further report be provided to Council with full cost/benefit analysis when considering 2006/2007 budget including training and environmental benefit.”

The ICAC and the Conduct Committee

39 On 24 February 2006 Mr Weir sent his letter to the ICAC regarding Telstra and Mrs Greig. Attached were documents written by several staff members which were submitted under protected disclosure. On 10 March 2006 the ICAC responded to Mr Weir’s report. The ICAC declined to investigate the matter and indicated that the matter could be dealt with internally as a disciplinary matter.

40 In response to the ICAC letter the council constituted a Code of Conduct Committee pursuant to its adopted Code of Conduct. It appointed the Honourable Marcus Einfeld AO QC (as he then was) Chairman of the committee, together with Mr John Peedom, solicitor, and Mr Warwick Shanks from the firm KPMG, the council’s auditor. The Committee commenced an investigation but before it was completed Mr Einfeld resigned. He was replaced by Mr G Barry Hall QC.

41 The committee concluded that there had been no breach by Councillor Greig of the Council’s Code of Conduct. However, before it reported the committee became aware that it was improperly constituted, it should have been comprised of five persons and not three, and accordingly could not report as the Code of Conduct Committee. It initially recommended that it be reconstituted as an advisory committee and that the council should accept its advice and bring the matter to an end. The plaintiff was aware of this report and gave evidence that as a consequence she was satisfied that she had been cleared of any wrongdoing.

42 The Committee later changed its position and acknowledged that it could not give advice. Without referring the matter to the Council Mr Weir wrote to the ICAC on 27 March 2007, a date which has particular significance as I indicate below, effectively referring the matter back to the Commission and urging the Commission to now commence its own investigation. He contemplated that Councillor Greig should receive a formal warning from the Commission. In the alternative he asked for the Commission to authorise him to give Councillor Greig a formal warning. The ICAC declined Mr Weir’s request and reasserted its previous determination not to investigate the matter. The ICAC also noted that there had been a misinterpretation of the previous advice furnished by the Commission. The Commission could not and did not direct the Council to either take or not take any particular course of action.

43 Mr Weir received the Committee’s interim advice on 14 November 2006. Although he had referred the matter back to the ICAC on 27 March 2007 and received the Commission’s response on 15 June 2007 he delayed bringing the matter before the Council until 13 November 2007. In these circumstances the opportunity for misplaced rumour to fester is obvious. This is what occurred.

Rumours reach Channel 4

44 Mr Duffy was at the time the Chief of Staff in the newsroom of WIN 4 at Wollongong. He gave evidence that he telephoned Mr Mandarino, a local Labor Party “machine figure”, on the night of 26 March 2007 to check some information he had regarding Shellharbour Council and an investigation into Councillor Greig. The original source of that information was not disclosed. According to Mr Duffy, Mr Mandarino confirmed that there had been an investigation, that Mr Weir had referred the matter to the ICAC but that the ICAC had directed that it be handled in-house by the Code of Conduct Committee. Mr Duffy also said that Mr Mandarino had mentioned two BlackBerries that had been passed on to Councillor Greig by a Telstra employee.

45 Mr Mandarino gave evidence in which he confirmed that he had had a conversation about the plaintiff with Mr Duffy. He said to Mr Duffy that he had become aware “that Ms Greig had been involved in a dispute with council regarding the procurement of telecommunications equipment; that the matter had been referred to the ICAC; the ICAC had referred the matter back to the council, and the council had constituted a Code of Conduct Committee hearing to determine the issue.” He was asked in examination in chief:

“Q: Do you recall whether you mentioned the nature of the telecommunication equipment involved.

A: I think it was about a Blackberry or a set of BlackBerries and there was a proposal within the council at that time to ensure that all the councillors got these telecommunication equipment. That was the gist of it, I think.”

46 Early next morning, 27 March 2007, Mr Duffy called the Shellharbour Mayor, Councillor Hamilton to discuss the matter. Mr Duffy says that Mayor Hamilton confirmed that Councillor Greig had been the subject of a code of conduct investigation, that the matter involved Telstra and Telstra products, that concerns had been raised by Mr Weir who had then sent the matter to the ICAC, that the ICAC had in turn sent a letter back directing that the matter be dealt with in-house, and that it involved two BlackBerries.

47 When Mr Hamilton gave evidence he was asked about his conversation with Mr Duffy. He said that he told him that he was not in the country when the events occurred and that Mr Duffy should obtain the details from Mr Weir. He said that Mr Duffy had asked him “something about BlackBerries” and “he asked if I knew what it was about, that BlackBerries were involved, I says (sic) ‘I think so’.”

The telephone call to the plaintiff in London

48 Mr Duffy said that he gave a summary of the conversations he had with Mr Mandarino and Mayor Hamilton to a journalist in his office, Mr Snelson. He asked Mr Snelson to follow the matter up and, if possible, speak with the plaintiff about it.

49 On 27 March 2007, which by an extraordinary coincidence was the day on which Mr Weir referred the matter back to the ICAC, the plaintiff was in London on business. She had retired to bed intending to wake early to travel to Rome to meet her husband and enjoy a holiday with her family. Her parents are Italian and she maintains a close relationship with the Italian members of the family.

50 At approximately 12.30 am the next morning, London time, she was awakened by a telephone call from Mr Snelson, who was telephoning from Australia. There is a disagreement between them as to the exchange which occurred. Because only of its relevance to issues of damages it is necessary for me to resolve that difference. Otherwise insofar as his evidence is relevant to the defence of justification I must assume that the jury would accept Mr Snelson’s account.

51 The plaintiff’s account of the conversation is as follows:

“Q. And what was the conversation that you had with the person on the other end of the line?

A. To the best that I can remember, "Hi" -- well, I said, "Hello", of course, and then the caller said, "Hi. This is Matt from WIN TV. I just want to ask some questions" and that's when he asked me --

Q. Just go through, as best you can, what was said. Did you say something to him about the hour of his call?

A. Well, I said -- I can't remember whether I said it first or because -- I can't remember exactly when I said it, but I did mention in my call the time and where I was and he asked me a question as to, "When you were acting, when the Mayor was on holidays, did you have a business paper to do with information technology, an item pulled out of the business paper?". I said, "What? What are you talking about?" And, "Can you just repeat what you said?" So he repeated it. I said, "Look, I've got no idea what you're talking about. I'm in London. It's early morning". That's when I said it, “It's about 12, 12.30”, I wasn't sure because I didn't have my watch on -- "I'll be back in Australia in early April. Can we discuss this because I'll ask Council what we're talking about and I'll discuss it then with you?"

Q. Did he ask you further questions?

A. No, no other questions that I can recall.

Q. Did he offer his regrets at having woken you?

A. I don't remember that.

Q. Do you recall whether he referred to BlackBerries?

A. I don't recall that at all.

Q. Would it have meant anything in particular to you had he mentioned BlackBerries in that call?

A. If he mentioned BlackBerries probably I would have thought Oh, and my solicitor would have been the first phone call I would have made.”

52 Mr Snelson’s account of the conversation is as follows:

“Q. You told us that you called Mrs Greig about 9.30 on 27 March 2007. Could you just tell us what you recall of what you said and she said in the course of that conversation you had with her then?

A. I 'phoned her and I said - she answered, "Hello", and I said, "Hi. Is that Michele?" She said, "Yes". I said, "Hi Michele, it is Matt Snelson from Win News in Wollongong. How are you?" She said, "Good, thanks". I said, "That's good. I'm calling to see if you can comment on the Code of Conduct enquiry that involves you. We have learnt it relates to a Telstra project. You received two BlackBerry devices and it was referred to ICAC by Brian Weir".

Q. Is there anything else that you said to her at that time?

A. Not at that time.

Q. What did she say in response to you?

A. She said, "I don't know what you are talking about or the capacity it is supposed to have taken place and I really have no idea".

Q. Did you say something then?

A. Yes.

Q. What did you say?

A. I said, "It relates to your handling of a Telstra project while you were filling in for Mayor David Hamilton, a development or upgrade. You received two BlackBerry devices. We have learnt that the matter was listed on a business paper. It was seen by Brian Weir, removed and referred to ICAC. ICAC referred the matter back to Council and it is now before the Code of Conduct Committee".

Q. Did she say something in response to that?

A. Yes, sir.

Q. What did she say?

A. She said, "I don't know what you are talking about. I really have no idea".

53 There are two critical differences between the accounts. The plaintiff says there was no reference to BlackBerries but says that she was told of an allegation that an item had been placed on the business paper in relation to the supply of Telstra products which Mr Weir had removed. Although Mr Snelson accepts that he said this to the plaintiff he says that this was only mentioned after the plaintiff had responded to his initial account of the allegation which, he says, included a reference to BlackBerries. Somewhat surprisingly Mr Snelson an experienced journalist said that he made no note of the conversation.

54 Mr Duffy wrote both the story which was broadcast and the story placed on the defendant’s website. Like Mr Snelson he said that he did not keep a note of his various conversations relating to the plaintiff apart from “scribbling down a couple of points”. Mr Duffy’s desk was within a short distance of Mr Snelson’s desk. Their desks were sufficiently proximate for Mr Duffy to be able to overhear what Mr Snelson said to the plaintiff in the telephone conversation. He said that he recalls Mr Snelson asking the plaintiff “if she is the subject of a code of conduct, everything we have gone through. He was basically asking each of those questions.”

55 That evidence was followed by a question to which objection was taken in the course of the answer. Although the transcript does not record that I ruled in relation to the objection it was accepted by senior counsel for the defendant as being a valid objection and Mr Duffy was asked to give his evidence in proper form. In the response to which there was no objection he did not include a reference to BlackBerries. His answer was:

“A. He asked Councillor Greig about the Code of Conduct and being investigated. He asked her about the information going to Brian Weir and he asked about ICAC becoming involved and Brian Weir sending a letter to ICAC. And he also asked about ICAC responding in a letter back to Council saying that it had to be dealt with in-house. “

56 I do not accept Mr Snelson’s account of the conversation. Although he was a professional journalist who had been asked to follow up a lead to a story which he must have realised, if published, would have a significant impact in the local area, as I have indicated, he said that he made no record of his conversation with various persons he spoke to about the matter. In particular he made no note of his conversation with the plaintiff. This is extraordinary. But there is another important matter.

57 Before calling Mrs Greig, Mr Snelson called Ms Anita Baltovska, the media officer of the Council. She recorded their conversation in a memo addressed to Mr Weir. In her memo she notes that Mr Snelson called her at 9.34 am on 27 March 2007 requesting a comment from the council. Her note records that Mr Snelson said “I understand there has been an issue with Michele Greig and a Telstra project that went before Council. It has been the subject of an ICAC review and it now might go before a Council Committee.” Ms Baltovska noted in the memo that she phoned him back for a clarification on whether or not he was referring to the Telstra mobile phone tower which was the only Telstra project before Council in the last 12 months, he said:

“No, the Telstra project in question did not go before Council as such. When Councillor Greig was filling in for Mayor about 7-8 months ago, she wanted to list a Telstra project on the business paper. It was taken off by Brian Weir and referred to ICAC.”

58 Ms Baltovska makes no mention of any reference to BlackBerries. Mr Snelson’s account of his conversation with Ms Baltovska is at odds with that of Ms Baltovska. In particular he said that he made reference to BlackBerries. He gave the following evidence:

“Q. What did Mrs Baltovska say to you and you say to her?

A. I 'phoned her and I said, "Hi, Anita, it is Matt Snelson from Win News in Wollongong. How are you?" She said, "Hi Matt". I said, "I am calling about, to see if the council would comment, or Brian Weir, would comment on an issue involving Michele Greig. We have heard that there is a Code of Conduct enquiry looking into her. She received two BlackBerry devices. It relates to a Telstra project while she was filling in for the Mayor. The matter was on a business paper. It was seen by Brian Weir, taken off and referred to ICAC and it is now before the Code of Conduct Committee". I said, "It took place around six or seven months ago".

59 Ms Baltovska was not a witness in the trial. However, her memo is consistent with the account of the allegations which the plaintiff says was put to her by Mr Snelson. Given that Mr Snelson called Ms Baltovska shortly before calling Mrs Greig it would be likely that he would phrase the allegation in a similar fashion. Mr Snelson admitted in evidence that he said something similar to Ms Baltovska and the plaintiff. He said that he did not believe Ms Baltovska was lying in her memo.

60 Mr Snelson gave evidence that he has spoken about his recollection of the events to Mr Duffy and the defendant’s lawyers for the past two years “going over it and over it”. The likely consequence is that a common memory consistent with the published story has developed. Although I could not find that Mr Snelson was deliberately untruthful I am satisfied that he did not refer to BlackBerries when he spoke to the plaintiff.

Mr Duffy again telephones Mr Mandarino

61 After Mr Snelson’s conversation with the plaintiff Mr Duffy phoned Mr Mandarino again and told him that Councillor Greig had denied any knowledge of the events; Mr Duffy‘s evidence was that Mr Mandarino said, “Well, she is ‘effing’ lying.” Mr Duffy asked Mr Mandarino to check his sources. He also called Mayor Hamilton who told him to check with Mr Weir. Mr Weir, according to Mr Duffy, called him sometime on 27 March 2007. He said that Mr Weir confirmed that there was an investigation into Councillor Greig, that he had sent a letter to the ICAC, and that he had been alerted to the situation after a council employee had come to him. When he gave evidence Mr Weir did not confirm that this conversation occurred. Apparently counsel for the defendant were not aware that Mr Duffy would give this evidence and had not been told that Mr Weir ever spoke to Mr Duffy about the matter. I discuss this issue below.

The defendant says the plaintiff lied

62 As I have related, having been woken from sleep the plaintiff responded to Mr Snelson by saying “I don’t know what you are talking about. I really have no idea.” Senior counsel for the defendant put to the plaintiff and later submitted that in making this response the plaintiff was telling a deliberate lie. Because of its relevance to the issue of damages it is necessary for me to consider that submission.

63 When awakened in the early hours of the morning and confronted by an allegation from a journalist a response “I do not know what you are talking about” would be understandable, even if untrue. After all the plaintiff was under no obligation to respond to the journalist’s question. However, I am satisfied that there is absolutely no foundation for a submission that the plaintiff was lying, even if a reference was made to BlackBerries. Because the essential nature of the allegation put by Mr Snelson was founded upon an event which never happened; no matter concerning Telstra was ever listed on the business paper by the plaintiff or any one else and later removed by Mr Weir, the rational response from a person confronted with that allegation would be “I do not know what you are talking about.”

64 Although Mr Snelson invited the plaintiff to comment she told him that she was presently overseas but would consider whether she would make a comment upon her return. She told him that she would be returning in about a week and she would consider discussing the matter with him then.

65 Of particular significance in relation to the question of aggravated damages is that, rather than recording the plaintiff’s denial of the allegation, the defendant published that she had declined to comment. This was not true. When cross-examined Mr Duffy accepted that he had published a lie about the plaintiff. The following exchanges occurred:

“Q: It was a lie, wasn’t it, when she said she denied, and you’ve said it in your evidence, she denied what was put to her, why didn’t you write than in your story?

A: Because I thought if I put in there that she’s denied that she would look silly.”

66 Later he was asked:

“Q: So at the time that this went to air, you end up with a lie about her response to the allegation, don’t you?

A: At the time ...

Q: You end up with a lie. I think you have just admitted, you end up with a lie about her denial, don’t you?

A: Yes

Q: And that is, do you agree with me Mr Duffy you have had senior positions in journalism, a pretty disgraceful thing to have done?

A: It is disappointing.”

The evidence of Mr Duffy and Mr Weir

67 On the morning of March 28 2007, the date of the publication, Mr Duffy called Mr Mandarino to see if there had been any further developments. Mr Duffy also called the office of Mr Weir but he only spoke with Ms Baltovska. Mr Duffy was unsure whether or not Mr Weir called him back on that day.

68 There are some oddities in Mr Duffy’s evidence. Although he plainly had a source for the original allegation this was never identified. Furthermore, he said that he confirmed the details of the story with Mr Weir. As I have mentioned when Mr Weir gave evidence he did not confirm that he had spoken to Mr Duffy. However, he said that he was aware of an approach to the Council from Mr Snelson but had asked the media officer to indicate that he had no comment on the matter. He was asked:

“Q: Prior to that time did you receive any telephone call or contact from any person associated with my client, WIN Television?

A: I personally did not.

Q: Did someone report to you that they had received a telephone call from WIN Television?

A: Yes. A media officer contacted me on the, the Tuesday morning to, to inform me of that.

Q: Did he ask you for a response to something that he had learned or been asked by WIN Television? What happened?

A: She phoned me and said that Mr Snelson had called about a matter and had listed a number of questions. I think I may have said what was he asking, and she outlined the questions to me that she was, that, that he had asked.

Q: Do you recall what the questions were at this stage Mr Weir?

A: No. I, I think they, they were alluding to, I think definitely the matter about me having pulled a report. The questions that I could answer, quite honestly, that I was not aware of, or weren’t correct.

Q: Did you say something to the media officer with a view to being passed on to WIN Television?

A: No. The fact that I had no comment.

Q: So you told the media officer, did you, to tell WIN Television that you had no comment?

A: That’s right.”

69 He later said that he understood that Mr Snelson rang back the media officer who told him that Mr Weir would be offering no comment.

70 Mr Weir was asked whether or not the events described by WIN Television “to the extent to which it refers to the conduct of Mrs Greig and your conduct alleged in taking something off the business paper, that simply did not happen, did it.” He confirmed that it did not. He was also asked:

“Q: You were never approached by WIN Television, were you, as to whether the procedures which they had referred to in their TV broadcast as to the taking of the material off the business paper by the General Manager, you would have been free to say procedurally that is what the Code of Conduct says?

A: That’s correct.

Q: But that was never put to you was it?

A: No sir.”

71 The difference between Mr Duffy’s account and Mr Weir’s is, at the least curious. Although it may not ultimately matter I am satisfied that Mr Duffy is telling the truth when he says he spoke with Mr Weir. Mr Weir’s account of the events leaves open the possibility that rather than Mr Duffy contacting him Mr Weir telephoned Mr Duffy and spoke with him about the matter. However, that suggestion was not put to Mr Weir and I could not make that finding. Mr Weir had an obvious interest in seeking to avoid public knowledge of his involvement in confirming to the press matters relating to an internal investigation by the council which he was obliged to keep confidential. Equally, Mr Duffy had an interest in giving the impression that he had taken whatever steps he could to verify the allegation of which he had learned. Obviously the general manager was the best source to confirm a matter of this nature.

72 A second curious feature of Mr Duffy’s evidence is that he does not identify the source of the allegation that a matter had been placed on the council’s agenda for a meeting and withdrawn. Unless the Mayor or Mr Weir were prepared to endorse an untruth this could not have been confirmed by either of them. The alleged event, nor any event similar to it, quite simply never happened. The defendant does not contend otherwise.

73 Mr Mandarino did not suggest that he was the source of that allegation and, not being a member of the council, was not in a position to offer first hand information in relation to it.

74 The truth of the allegation could have been easily and independently checked. At the relevant time the council’s business papers were placed on the council’s website and could be accessed by any person. A search of the business papers for the relevant period would have shown whether an item had been included and subsequently withdrawn. Mr Duffy acknowledged that although he could have made such a check he never did.

The plaintiff’s requests are rejected

75 Mr Gamble, a solicitor, on behalf of the plaintiff, wrote to WIN television on 30 March 2007 concerning the broadcast and requested an apology and retraction. He asked that the existing publication be removed from all mediums of publication within WIN Television’s control. The letter stated:

“Deputy Mayor Greig is of good character and enjoys an excellent reputation in and beyond the Shellharbour community. The Publications are enormously damaging and extremely distressing to our client.

Accordingly, we require by 2.00 pm today, Friday, 30 march 2007:

1. that you immediately forward to us a draft written correction and apology for our client’s approval.

2. your written undertaking to publish the correction and apology in the terms approved by our client;

3. that you immediately remove the existing Publications in all forms from all mediums of publication without your control;

4. written confirmation that you have attended to the matters specified in paragraph 3 above and the time and date at which appropriate steps were taken;

5. that you refrain from further publication of the Publications or any other publication in which the same or similar defamatory imputations are conveyed;

6. a written undertaking that you will provide our client with 24 hours notice of any intended future publication on this subject matter together with a written outline of any allegations concerning our client that you intend to publish and provide our client with an opportunity to respond.”

76 A subsequent letter was sent on the afternoon of the same day, again requesting that the defamatory material be removed from WIN Television’s website. Because Mr Gamble was concerned that the damage to the plaintiff was continuing and would continue to increase as the material was disseminated to an increasingly greater number of people. The solicitors for WIN Television responded on March 30 2007. The letter stated the following:

“We note that your letter makes numerous demands within a virtually impossible time frame. We also note that you have provided no information as to what, if anything, is alleged to be incorrect in an item that is clearly a matter of public interest relating to matters of a political nature and local government. We further note that our client went to some trouble to seek a comment or explanation from your client prior to broadcasting any information and your client chose to neither respond or explain in any respect.

Our client remains prepared to consider any such response or explanation and to correct any material, which may be false. We otherwise note that the multiple demands made in your correspondence are inappropriate.”

77 The plaintiff responded by letter dated 4 April 2007. The letter reiterates the request for the material to be taken off the website and gives reasons why the broadcast is false. The letter states:

“The imputations are false for reasons not limited to the following:

1. Deputy Mayor Greig is not corrupt;

2. Deputy Mayor Greig has not used her position as Deputy Mayor to obtain personal advantage;

3. The publications convey the impression that an investigation is pending at Shellharbour City Council in respect of Deputy Mayor Greig’s handling of an alleged planned councillor technology upgrade. That impression or suggestion is false and misleading by reason of omission of critical information to:

(a) The nature and scope of the alleged technology upgrade;

(b) Ms Greig’s role in connection with the alleged technology upgrade;

(c) The status and scope of the alleged investigation including the status of the inquiry before the Council’s Code of conduct Committee.

4. The publications convey the existence of a causal connection between an alleged meeting between Ms Greig and private communication representatives in the context of the alleged technology upgrade and receipt by Ms Greig of Blackberry devices in circumstances in which:

(a) No causal connection exists;

(b) No private meeting occurred in the context alleged;

(c) Ms Greig did not receive in her personal capacity or in her capacity as Deputy Mayor Blackberry devices as implied.”

78 A further letter was written by the plaintiff on 19 April 2007 requesting the removal of the material from the website and seeking a correction and apology. The material on the website was not removed until late in February the following year. No apology was ever made.

Reasonable suspicion

79 Since at least the speech by Lord Devlin in Lewis v Daily Telegraph Ltd [1964] AC 235 the law has recognised that a libel may convey the meaning that there are reasonable grounds to suspect that the plaintiff has committed a crime. As is almost inevitable in the law of defamation that apparently simple statement can give rise to considerable complications. One of those complications is, when the imputation “reasonable grounds to suspect” is established, what must a defendant prove to justify it.

80 In Shah v Standard Chartered Bank [1998] EWCA Civ 612; [1999] QB 241 the Court of Appeal considered these complications. The problem arises, but is easily resolved when the defamation is comprised of a rumour which is republished. But for an occasion of qualified privilege the republication of a rumour will not be protected because it offends the “repetition rule” (Shah at 269). A defendant cannot succeed in establishing the truth of a defamation in terms that there are reasonable grounds to suspect a plaintiff of disreputable conduct by calling persons whom he regards as honest and reliable to establish those grounds. In the words of May LJ “a defendant has to establish that there are objectively reasonable grounds to suspect the plaintiff” (Shah at 269).

81 The issues were separately considered by Hirst LJ in the case of Shah. His Lordship considered the discussion of the relevant issues in this Court and in the Court of Appeal: two decisions by Hunt J; Jackson v John Fairfax & Sons Ltd (1981) 1 NSWLR 36 and Whalan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148 and one of the Court of Appeal Sergi v Australian Broadcasting Commission (1983) 2 NSWLR 669. His Lordship concluded that a plea of reasonable suspicion carried with it the sting that the plaintiff “has by his conduct brought suspicion on himself (p 261B)”. Accordingly, “it is an essential requisite of a defence of justification of reasonable suspicion that it should focus on some conduct on the plaintiff’s part giving rise to reasonable suspicion” (p 261C). Although the relevant background may be proved the imputation must be justified by the actual conduct of the plaintiff and not by what other persons may have said about the plaintiff and his or her conduct. A reasonable suspicion can only be justified if the plaintiff’s actions, rather than the statements of others about those actions, justify the pleaded imputation.

82 The issue was again considered by the Court of Appeal in England in King v Telegraph Group Ltd [2004] EWCA Civ 613 [2005] 1 WLR 2282. In that case the plaintiff contended that he had been libelled by a publication which carried the meaning that there were strong grounds to suspect that he was a supporter and accomplice of Osama bin Laden’s al-Qaeda network of terrorists. The court considered the evidence which could be relevant to justify the imputation.

83 Brooke LJ recorded without criticism the principles which the trial judge, Eady J had identified where it is sought to justify a “reasonable grounds to suspect” libel. Those principles are (at 32 of [2003] 5 WHC 1312 QB):

“1. There is a rule of general application in defamation (dubbed the ‘repetition rule’ by Hirst LJ in Shah) whereby a defendant who has repeated an allegation of a defamatory nature about the claimant can only succeed in justifying it by proving the truth of the underlying allegation – not merely the fact that the allegation has been made.

2. More specifically, where the nature of the plea is one of “reasonable grounds to suspect”, it is necessary to plead (and ultimately prove) the primary facts and matters giving rise to reasonable grounds of suspicion objectively judged;

3. It is impermissible to plead as a primary fact the proposition that some person or persons (eg law enforcement authorities) announced, suspected or believed the claimant to be guilty;

4. A defendant may (eg, in reliance upon the Civil Evidence Act 1995) adduce hearsay evidence to establish a primary fact – but that in no way undermines the rule that the statements (still less beliefs) of any individual cannot themselves serve as primary facts;

5. Generally, it is necessary to plead allegations of fact tending to show that it was some conduct on the claimant’s part that gave rise to the grounds of suspicion (the so-called “conduct rule”);

6. It has recently been acknowledged, however, by the Court of Appeal in Chase at [50]-[51] that this is not an absolute rule, and that for example ‘strong circumstantial evidence’ can itself contribute to reasonable grounds for suspicion.

7. It is not permitted to rely upon post-publication events in order to establish the existence of reasonable grounds, since (by way of analogy with fair comment) the issue has to be judged as at the time of publication.

8. A defendant may not confine the issue of reasonable grounds to particular facts of his own choosing, since the issue requires to be determined against the overall factual position as it stood at the material time (including any true explanation the claimant may have given for the apparently suspicious circumstances pleaded by the defendant).

9. Unlike the rule applying in fair comment cases, the defendant may rely upon facts subsisting at the time of publication even if he ws unaware of them at that time.

10. A defendant may not plead particulars in such a way as to have the effect of transferring the burden to the claimant of having to disprove them.”

84 I have applied these principles to the resolution of the present matter.

The test to be applied

85 Before turning to consider the pleaded imputations I should confirm the test which I have applied when considering whether the defence of justification should go to the jury. The proper approach of a trial judge to a submission that an issue should be withdrawn from the jury for lack of evidence is of general application and was authoratively considered by the Court of Appeal in a case involving an alleged defamation. In McKenzie v Mervyn Holdings Pty Ltd & Anor (1990) 20 NSWLR 42 Clarke JA said at p 47:

“A trial judge who is confronted with a submission that an issue should be withdrawn from a jury for lack of evidence is required to determine whether there is any evidence upon which the jury could reasonably find that the party opposing the motion has made out his case on the probabilities on that issue. In considering the motion the judge is bound to pay regard only to the evidence which favours the party opposing the motion and to disregard the evidence in favour of the proponent of the motion.”

86 Clarke JA referred to and quoted with approval from the writing of the late Mr Justice Glass in the following terms at p 48:

“...It (ie the test of insufficiency) inquires whether there is evidence capable of satisfying the jury, on a balance of probabilities, that each of the constituents of the plaintiff’s claim has been established. The evidence to be measured for its sufficiency in this respect is confined to that evidence which favours the plaintiff. The evidence favouring the defendant is to be disregarded. There is evidence capable of discharging the onus which the plaintiff bears even though the countervailing evidence preponderates. The evidence is sufficient if the jury, accepting the plaintiff’s evidence and disregarding all evidence to the contrary, could reasonably be satisfied that the plaintiff’s claim has more probably than not been established.”

87 I have applied these principles. It is important to distinguish between the circumstance where there is evidence upon which a jury could reasonably give a verdict and “evidence which constitutes no more than a mere scintilla or is capable of giving rise to surmise or conjecture on the other (hand)” (at p 51).

Was their evidence to go to the jury – imputation (b)

88 The defendant did not plead any other imputation apart from those pleaded by the plaintiff as arising from the matter of which the plaintiff complains. The defendant accordingly accepted the burden of proving the truth of the pleaded imputations. The defendant expressly disavowed any corrupt conduct by the plaintiff.

89 The essential element of each imputation is that it was the conduct of the plaintiff which gave rise, in the case of imputation (b) to the “reasonable suspicion”, and in the case of imputations (e) and (f) “so as to provide reasonable grounds” for the relevant reference. Although the conduct of the plaintiff cannot be separated from the context in which it occurs, it is her conduct that the defendant must prove to have had the pleaded outcome. It cannot be proved by the statements of others.

90 Imputation (b) was pleaded with precision by the plaintiff. The reasonable suspicion raised by the defamatory matter and sought to be justified by the defendant was “that in handling a planned councillor technology upgrade” for the council she “acted corruptly in accepting BlackBerry devices”.

91 Reference to the events which I previously related reveals immediately that such an assertion must fail. The uncontradicted evidence is that it was the plaintiff’s company, through its general manager, that received the BlackBerry devices as part of an ordinary transaction with Telstra pursuant to commercial terms available to any prospective business customer of Telstra throughout Australia. Furthermore, there is nothing in the evidence to suggest that the plaintiff “handled a planned councillor technology upgrade”. Any suggestion of consideration of new technology for councillors did not come before a council meeting until February 2006. The transaction which provided the BlackBerries to the plaintiff’s company was completed in July 2005. The plaintiff had no part in bringing the issue of a “planned councillor technology upgrade” to the council in February 2006 or at any other time.

92 Notwithstanding that the defendant pleaded the truth of the plaintiff’s pleaded imputation, faced with the difficulties to which I have referred senior counsel sought to fall back upon a claim of “substantial truth.” That submission was founded not upon the receipt of BlackBerries, the matter referred to in the pleaded imputation, but on the receipt of the mini-max modem. That submission faces a number of insurmountable hurdles.

93 Substantial justification of an imputation will satisfy the defence of truth. The defendant needs only to prove the gist or the sting of the imputation. The defendant need not prove comments which do not add to the sting (Edwards v Bell (1824) Bing 403; Chase v Newsgroup Newspapers Ltd [2002] EWCA Civ 1772; [2003] EMLR 218). An inaccuracy in a mere detail will not prevent the defence of justification from succeeding.

94 However, where the inaccuracy is material and it alters the character of the imputation or adds to the sting, it must be proved as true or the defence of justification will fail. In Weaver v Lloyd (1824) 2 B&C 678, the defamation could not be justified because it could only be proved that the plaintiff had done various acts of cruelty to his horse, not that the plaintiff had knocked out the eye of his horse, as was alleged. The court said at 679:

“Here, the statement that he knocked out the horse’s eye imputed a much greater degree of cruelty than a charge of beating him on other parts of the body. If we were to hold this a sufficient justification, exaggerated accounts of any transaction might always be given with impunity.”

95 In the present case there were three essential elements in the pleaded imputation; handling a planned councillor technology upgrade, accepting BlackBerries and acting corruptly. The argument of the defendant seeks to avoid these essential elements and justify the imputation by some generalised assertion that by receiving and using a mini-max modem from Telstra and telling council personnel that it was a useful device and participating in discussions about possible future technology for councillors she acted in a manner which gave rise to a reasonable suspicion that she acted corruptly. To my mind this submission must be rejected. Even if the reference to BlackBerries is put to one side and it is accepted that the mini-max modem can be the foundation for the allegation, the suggestion that the plaintiff corruptly abused her office when handling a technology upgrade is critical. It implies that she had been given particular responsibilities and on behalf of the Council was in control of an upgrade proposal in which position she abused her office. Far from being a suspicion of some generalised act of impropriety the pleaded imputations suggested that the plaintiff may have abused a specific trust placed in her.

96 With respect to the modem, like the BlackBerries, the undisputed objective evidence, in contrast to what Mr Gearon and Mr Leonard said they were told by Mr Valentinetti, is that the modem was provided as part of an ordinary commercial transaction. The defendant emphasised that it was initially provided for free for a thirty-day trial period. This was so although again, like the BlackBerry, this was part of the usual offer made at a time when the modem had only just been released and Telstra was endeavouring to provide potential customers with a knowledge of its benefits to encourage a take up of the product. There was absolutely nothing to suggest that in her family or family company being offered a free 30 day trial it was being given a benefit which was not available to any similar potential customer. To suggest that by her company contracting to acquire the modem and the plaintiff using it, she conducted herself so as to give rise to a reasonable suspicion that she had acted corruptly is simply untenable.

97 Nevertheless in pursuit of its defence the defendant submitted that there were other matters which justified the imputation. The plaintiff’s conduct in meeting with Mr Valentinetti in the Mayor’s office, followed by her open praise of the benefits of the mini max modem in the context of the alleged assertions by Mr Valentinetti of his dealings with the plaintiff were emphasised. The submission is devoid of substance. Although a clandestine meeting with Mr Valentinetti may have legitimately fed a suspicion, a meeting at the council chambers, which any number of persons knew about could not. No doubt false rumours were spread about the meeting but they are not relevant to the present issue. The plaintiff speaking in praise of the device was, without more, entirely neutral. A moments thought would have caused any reasonable person to realise that if it operated as claimed to provide wireless internet access from anywhere within mobile telephone range, the device would be of enormous benefit to many councillors and others who exchange written information as part of their ordinary activities.

98 With respect to the activities of Mr Valentinetti little need be said. Any assertion by him, if he made it, that he had provided the plaintiff or her company with free equipment in order to enhance Telstra’s propsects with the council or otherwise was inconsistent with the objective facts and was demonstrably false. It is true that the mini-max modem came with a free trial period but that was part of the conventional Telstra offer which was not special to the plaintiff. No doubt Mr Valentinetti saw the plaintiff’s take up of the equipment as useful to his prospects of obtaining business from the council. But any inaccurate assertion by Mr Valentinetti cannot be visited upon the plaintiff when the defendant cannot suggest that there is any evidence in the plaintiff’s conduct which could support that assertion.

99 The defendant further submitted that the plaintiff’s conduct when she met with Mr Weir on 27 January 2006 could justify the imputation. The submission is of no substance. Corruption involves a state of mind. During that conversation the plaintiff denied the allegation Mr Weir put to her and asserted her innocence of any wrongdoing. It was submitted that because she said that her company had paid for all its equipment, but in fact had received a thirty day free trial of the modem and received three BlackBerries, she had lied to Mr Weir. That lie was said to have been made out of a “consciousness of guilt” and was an event capable of supporting a reasonable suspicion in the terms of imputation (b). Of course, as I have related, the objective evidence is that the free trial was part of the commercial offer which her company later accepted and for which it paid the commercial rate and the BlackBerries were likewise part of a valid commercial transaction. The assertion that a lie was told by the plaintiff was entirely without foundation. To assert that a denial of wrongdoing was conduct capable of supporting a reasonable suspicion that she acted corruptly is a submission lacking both in logic and commonsense. It may be, although in all the circumstances unlikely, that if the plaintiff had declined to respond to Mr Weir this could have supported a suspicion. But she did not do that – she denied this, as it happens, entirely false allegation.

100 It was then submitted that the plaintiff’s delay in replying to Mr Weir justified, at least in part, the pleaded imputation. Mr Weir wrote on 1 February 2006. He did so with knowledge that the plaintiff was about to go overseas. After receiving the letter she sought the assistance of Mr McKenzie from Telstra in preparing her response. With her absence from the country and the need to await Telstra’s response the delay of 6 weeks, was quite unexceptional. It certainly could contribute nothing to a suspicion of corrupt conduct.

101 Finally it was submitted that by voting for the amendment at the council meeting of 5 February the plaintiff could have been reasonably suspected of acting corruptly. That meeting had before it a general proposal to provide additional communication facilities to councillors. Even if the proposal was adopted, consideration of the equipment and who might supply it was a matter for another meeting. Not even Mr Weir, who obviously harboured suspicion about the plaintiff, suggested to her that she should not sit or vote at that meeting.

Imputations (e) and (f)

102 The position with respect to imputations (e) and (f) is the same as for (b). In both cases it was pleaded that the publications imputed that the plaintiff conducted herself in such a way as to provide reasonable grounds for the pleaded reference. The imputation is concerned with her conduct. When, as I have done, her conduct is examined, there is nothing she did which a jury could reasonably find justified the imputation. Far from being true the objective evidence makes plain that the pleaded imputations are demonstrably false.

103 It may be that having regard to the memorandum from Mr Gearon signed by Mr McCann and the file notes of Mr Leonard, Mr Baez and Mr Bowyer, there was justification in referring the matter to the ICAC although not having waited for the plaintiff’s response this would seem unlikely. The essence of the matter was the report of Mr Valentinetti’s remarks. That circumstance may have provided reasonable grounds for referring the “issue” to the ICAC or the Code of Conduct Committee but that is an entirely different question to whether the plainitff had conducted herself so that there were reasonable grounds to refer her conduct to either body.

Other matters

104 The position adopted by the defendant in the present matter is incompatible with the principles defined by Eady J in a number of respects. As I have indicated the suspicion associated with the plaintiff arose when Mr Valentinetti allegedly made statements to the council officers about his dealings with the plaintiff which were restated by them. Their restatement could not be relied upon to prove a reasonable suspicion arising from the plaintiff’s conduct. Even if he said what was alleged, Mr Valentinetti’s statements could not, without more, justify the imputation. They were statements by him about what he had done and his reasons for doing it. If he made the comments alleged they may have and probably would have justified a suspicion about his dealings with the plaintiff but unless the plaintiff acted as he is alleged to have said she did they cannot assist the defendant in the present proceedings.

105 The facts which are relevant to the issues in these proceedings are concerned with the actual conduct of the plaintiff understood in its context. Even if, as appears to have been the case, Telstra was engaged in a campaign to promote its business to local councillors or, even if, Mr Valintenetti told others that he had suborned the plaintiff, the objective facts as proved in these proceedings could never have given rise to reasonable grounds for the pleaded suspicions. The plaintiff’s actions were entirely proper and no reasonable suspicion of corrupt conduct could have attached to them.

106 Although I initially ruled that the defence of justification could go to the jury I realised when counsel commenced to address that I had not properly understood the manner in which it was asserted that the allegation made in each imputation was true. On further reflection, following an appropriate opportunity for argument, for the reasons I have now articulated, I concluded that the defence should be withdrawn from the jury.

Principles relevant to damages

107 Because these proceedings were brought under the Defamation Act 2005 damages are controlled by Division 3 of the Act. Sections 34 and 35 of the Act provide as follows:

“34 Damages to bear rational relationship to harm

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

35 Damages for non-economic loss limited

(1) Unless the court orders otherwise under subsection (2), the maximum amount of damages for non-economic loss that may be awarded in defamation proceedings is $250,000 or any other amount adjusted in accordance with this section from time to time (the maximum damages amount) that is applicable at the time damages are awarded.

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

(3) The Minister is, on or before 1 July 2006 and on or before 1 July in each succeeding year, to declare, by order published in the Gazette, the amount that is to apply, as from the date specified in the order, for the purposes of subsection (1).

Editorial note. For orders under this subsection, see Gazettes No 84 of 30.6.2006, p 5043 (amount declared: $259,500); No 80 of 15.6.2007, p 3793 (amount declared: $267,500) and No 72 of 20.6.2008, p 5482 (amount declared $280,500).

(4) The amount declared is to be the amount applicable under subsection (1) (or that amount as last adjusted under this section) adjusted by the percentage change in the amount estimated by the Australian Statistician of the average weekly total earnings of full-time adults in Australia over the 4 quarters preceding the date of the declaration for which those estimates are, at that date, available.

(5) An amount declared for the time being under this section applies to the exclusion of the amount of $250,000 or an amount previously adjusted under this section.

(6) If the Australian Statistician fails or ceases to estimate the amount referred to in subsection (4), the amount declared is to be determined in accordance with the regulations.

(7) In adjusting an amount to be declared for the purposes of subsection (1), the amount determined in accordance with subsection (4) is to be rounded to the nearest $500.

(8) A declaration made or published in the Gazette after 1 July in a year and specifying a date that is before the date it is made or published as the date from which the amount declared by the order is to apply has effect as from that specified date.”

108 Section 38 of the Act provides factors which may mitigate an award of damages and is in the following terms:

“38 Factors in mitigation of damages

(1) Evidence is admissible on behalf of the defendant, in mitigation of damages for the publication of defamatory matter, that:

(a) the defendant has made an apology to the plaintiff about the publication of the defamatory matter, or

(b) the defendant has published a correction of the defamatory matter, or

(c) the plaintiff has already recovered damages for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter, or

(d) the plaintiff has brought proceedings for damages for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter, or

(e) the plaintiff has received or agreed to receive compensation for defamation in relation to any other publication of matter having the same meaning or effect as the defamatory matter.

(2) Nothing in subsection (1) operates to limit the matters that can be taken into account by a court in mitigation of damages.”

109 In Aktas v Westpac Banking Corporation Ltd (2009) NSWCA 9 I said in relation to damages in a defamation action.

“89 An award of damages in defamation serves three purposes. It provides reparation for the harm done to the plaintiff’s reputation; consolation for distress or hurt to the plaintiff’s feelings; and vindication of the plaintiff’s reputation: Carson v John Fairfax & Sons Limited [1993] HCA 31; (1993) 178 CLR 44 (at 60). The first two purposes are frequently considered together. In John Fairfax & Sons Limited v Kelly (1987) 8 NSWLR 131 McHugh JA (with whom Kirby P relevantly agreed) discussed the impact of time on damage caused by a defamation. There may be continuing damage to feelings and reputation after publication right up to the date of the verdict (at 143):

‘In many cases the award will reflect an amount for continuing injury to feelings and reputation to the date of verdict. Hence the amount awarded may, and usually will, be higher than the amount which would have been awarded as at the date of publication or even as at the date of the writ.’

See also Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 the Court of Appeal (Beazley, Giles and Santow JJA).

90 However, the nature and extent of the damage suffered as a result of a defamation depends on the particular facts. It may be that most of the damage to the plaintiff was suffered close in time to the publication, such that continuing damage was minimal: Vilo v John Fairfax & Sons Ltd [2000] NSWSC 1206 (at [25]). The Court of Appeal adopted that view of the facts in Marsden, holding that “the substantial injury to reputation was immediate” (at [1555]). I came to the same conclusion in Davis v Nationwide News Pty Limited [2008] NSWSC 946 (at [14] – [15]).

91 The assessment of damages in defamation is necessarily imprecise. Damages are “at large” in the sense that they cannot be arrived at through calculation or the application of a formula: Carson (at 115) per McHugh J; Rogers v Nationwide News Pty Limited [2003] HCA 52; (2003) 216 CLR 327 (at 348-349) per Hayne J. This is because much of the harm done to the plaintiff is loss that cannot be quantified in monetary terms: Rogers (at 349) per Hayne J. Consequently, assessing damages is a matter of impression and not addition: Cassell & Co Limited v Broome [1972] UKHL 3; [1972] AC 1027 (at 1072). Juries have found it helpful to consider what the defendant, as opposed to the plaintiff, should be liable for in the circumstances to aid this impressionistic task. “It became ... indisputable that a jury could consider not only what the plaintiff should receive, but what the defendant should pay”: Uren v John Fairfax & Sons Pty Limited [1966] HCA 40; (1966) 117 CLR 118 (at 151) per Windeyer J; Coyne v Citizen Finance Limited [1991] HCA 10; (1991) 172 CLR 211 (at 228) per Toohey J.”

110 Section 35 of the Defamation Act provides for a maximum award of damages which from 1 July 2009 is set at $294,500. That amount may be exceeded where the circumstances of the publication of the defamatory matter to which the proceedings relate are such as to warrant an award of aggravated damages. The plaintiff submitted that the correct interpretation of s 35 of the Act is that, once the requirement for awarding damages above the cap has been satisfied, the section permits an award of aggravated damages to be based upon each and every element available at common law and not limited to the circumstances of the publication. It was submitted that once the court is satisfied that the circumstances of the publication warrant an award of aggravated damages the legislation does not limit the aggravating factors in any way. The relevant statutory rule was said to be that before a common law right may be rescinded the statute must expressly say so. The plaintiff submitted that there is a contrast between s 35 and s 37 which expressly removes the entitlement to exemplary or punitive damages in an action for defamation whereas s 35 merely provides a limitation on the threshold test to be applied.

111 It is unnecessary to resolve these issues in these proceedings. As I later indicate I have concluded that an appropriate award of damages, including aggravated damages would not exceed the statutory cap.

112 In Jarrett v John Fairfax Publications Pty Ltd (2001) NSWSC 739 I considered the principles relevant to an award of aggravated damages. Although that decision related to proceedings under the 1974 Act the principles are relevant to an award, including aggravated damages, under the 2005 Act. I said:

“113 The law recognises two elements of compensatory damages: ordinary and aggravated damages. In Bickel v John Fairfax & Sons Limited & Anor (1981) 2 NSWLR 474 at 496, Hunt J said:

‘Compensatory damages are given to compensate the plaintiff for the harm done to him by the publication of the matter complained of; aggravated compensatory damages (which are also known as merely 'aggravated damages') are given to compensate him when that harm has been aggravated by the defendant's conduct in publishing that matter or by his subsequent conduct.’

114 It has also been stated that aggravated compensatory damages may be awarded if the defendant's conduct is "improper, unjustifiable or lacking in bona fides" (Vacik at 9; Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 at 514).

115 The correct approach to aggravated damages was explained by Higgins J in Costello and Abbot v Random House Pty Limited [1999] ACTSC 13; (1999) 137 ACTR 1 at 46 where his Honour said:

‘The concept of 'aggravated damages' is not, whether calculated separately or not, a different 'head' of damage. It focuses on the circumstances of the wrong doing which had made the impact of it worse for the plaintiff. It is not to go beyond compensation for the aggravation of the harm to repute or feelings. It is not a means of punishing a defendant.’

116 The difference between ordinary and aggravated damages was examined by Levine J in Marsden (para 4732 and following) where he pointed out that factors sometimes thought relevant only to aggravated damages are in fact relevant to ordinary compensatory damages: See Herald & Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254 considered by Clarke JA in Australian Consolidated Press Ltd v Ettinghausen (Court of Appeal, unreported, 13 October 1993 at p 25)

117 As the High Court noted in Gray at 4; in Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1965-66) 117 CLR 118 at 149, Windeyer J observed that the distinction between aggravated and exemplary damages is "not easy to make in defamation, either historically or analytically and in practice is hard to preserve." The concept of aggravated damages serves as a reminder that there are different elements to the award of damages and the conduct of the defendant, when publishing or defending the publication, may, if unjustifiable, improper, or lacking in bona fides, be reflected in the award of damages if damage is by reason of that conduct suffered by the plaintiff: see Bickel at 497.

118 The sum which the court awards must be sufficient to vindicate the plaintiff's reputation. This was made plain in Carson (at 61) and must be particularly the case when the libel attacks the integrity of a person who relies on his reputation to be able to fulfil his professional role in the community.

119 As a consequence there is a critical role which vindication plays in any award of damages in the present case. The plaintiff submits that the appropriate principles were expressed in Broome v Cassell where Lord Hailsham said:

‘Not merely can he recover the estimated sum of his past and future losses, but, in case the libel, driven underground, emerges from its lurking place at some future date, he must be able to point to a sum awarded by a jury sufficient to convince a by-stander of the baselessness of the charge.’ “

113 The relevant passage in Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497 is at 514 where Dixon CJ, Williams, Webb and Kitto JJ said:

“It is no doubt true that the jury cannot take into consideration as a ground for giving or increasing damages, whether exemplary or compensatory, conduct of the defendant which was not merely bona fide but was justifiable or proper. A bona fide defence raised properly or justifiably in the circumstances known to the defendant and evidence honestly given in support of such a defence doubtless cannot be used for such a purpose. But the decision of the majority in Herald and Weekly Times Ltd v McGregor [1928] HCA 36; (1928) 41 CLR 254 must mean that the conduct of the defence may be taken into consideration not only as evidencing malice at the time of the publication or afterwards, as, for instance, in filing a plea, but also as improperly aggravating the injury done to the plaintiff, if there is a lack of bona fides in the defendant’s conduct or it is improper or unjustifiable.”

114 I have applied the principles identified in each of these decisions when resolving the matter of damages in the present case.

The impact of the published matters

115 The imputations found by the jury to be defamatory were serious. Although an imputation that the plaintiff was actually corrupt would have grave connotations for a person holding public office, the imputation that she had conducted herself in such a way as to give rise to the reasonable suspicion that she had acted corruptly had very serious implications. When the imputations that there were reasonable grounds to refer her to the Independent Commission Against Corruption and the Council’s Code of Conduct Committee are included I am satisfied that the published imputations were highly defamatory of the plaintiff. They would impact upon her reputation as a person and councillor. It is the nature of such an allegation that it may remain current in the minds of many people for a lengthy period and for some almost indefinitely. Allegations of corruption once made in our community are particularly difficult to eradicate.

116 The plaintiff enjoyed a reputation as both a community-minded person and as a successful local businesswoman. She had a reputation for taking her civic responsibilities very seriously. I am also satisfied that she had a reputation as an honest person. Apart from her role as the Deputy Mayor of Shellharbour City Council she was active in other local and regional community activities. Mr Duffy said that he believed that the plaintiff was “going to be groomed and would be the next person to take over Shellharbour City Council.” The Mayor of Shellharbour is popularly elected and if she was to have achieved that office at the next election the plaintiff would have to have displaced the incumbent Mayor, both as the preferred Labor Party candidate and ultimately succeed at an election.

117 The plaintiff gave evidence of the distress which the publications occasioned to her. She said she was “absolutely distraught.” She said that because she was unable to explain herself she “just felt torn to shreds.” She was also concerned that family members may think less of her and come to believe that she may not be honest. She was particularly concerned about the impact upon her children. She said that as a result of the publication she suffered a significant decline in the number of invitations to functions.

118 Ms Priolo, the plaintiff’s sister gave evidence that she did not herself see the television broadcast, but, on the evening of the broadcast looked at the internet publication. Ms Priolo gave evidence about two incidents where clients of the company mentioned the news report and their shock at the allegation made against the plaintiff who was known as the owner of the business.

119 Ms Priolo also gave evidence regarding the effect of the broadcast upon the plaintiff. She said that when her sister returned from overseas she was “very upset. Down. Not her usual self.” The long term effect, according to Ms Priolo was that the plaintiff was quiet and “angry that someone would do this to her when she had never done anything to hurt anyone. So upset.” She also noted that about the time of the broadcast the publicity the plaintiff received decreased, “she wasn’t in the paper at all ... she was doing all of these openings and then all of a sudden nothing. So basically her appearance in the paper, and just cut to zero. From being in the paper three or four, five times a week”.

120 Mr Ernst, a former police officer and friend of the plaintiff, gave evidence that he viewed the television broadcast with his wife on 28 March 2007. Mr Ernst recalled having dinner with the plaintiff and her husband after they returned from overseas. He said, “she was upset, most upset about what the allegations were in that broadcast ... her demeanour was different. She was, She was very, very quiet yet she is normally a person that smiles and laughs a lot.” He said that for months afterwards he noticed that she was upset. He recalled a conversation he had with her three months after the broadcast where she was still upset and he could not believe that the issue had not been resolved. He also said that her reputation with respect to honesty and performance of her public obligations was beyond reproach.

121 Mr Leedham was a fellow councillor of the plaintiff in the Shellharbour City Council from 2004 until 2008. He also worked as a geologist at BlueScope Steel. He gave evidence of calling the plaintiff in Italy after seeing the broadcast. He said that she was very upset. He said that the day after the broadcast about four or five work colleagues came up to him and discussed the allegation as reported by WIN News. He also gave evidence regarding the plaintiff reading out her prepared statement to council, and that “she was emotional about it.” He indicated that the plaintiff has become despondent about politics.

122 Mr Greig gave evidence in which he said the plaintiff was “shell shocked” by the publication and was bewildered by an allegation that she had handled a technology upgrade of the council where there had never been such a proposal, at least to which she was connected. He also said that the plaintiff was dismayed over the assertion in the news items that she had refused to comment. He said that she was unable to sleep and Valium was prescribed in order to assist her after she returned to Australia. Mr Greig said that the effect of the broadcast was to significantly diminish the plaintiff’s interest in politics.

123 Both of the plaintiff’s children, her daughter Michelle and her son Davide gave evidence of the lasting effect which they believed the publication had upon their mother. Mr Greig said that during the litigation the plaintiff had been “basically reliving the whole nightmare.”

124 I accept the evidence of the plaintiff and the various witnesses as to the impact of the publication upon her.

The defendant’s submission in relation to hurt

125 The defendant submitted that the plaintiff’s evidence of hurt was premised upon the assumption that the publication imputed that she was corrupt and dishonest rather than being reasonably suspected of these matters. Because the jury did not find these imputations to be published it was submitted that the plaintiff’s evidence of the extent of her hurt should be discounted. Indeed it was submitted that because the plaintiff’s evidence of hurt was premised on imputations different from those found to be conveyed her evidence “can and should be ignored.” It was submitted that the same flaw pervades Mr Greig’s evidence.

126 It was submitted that the defendant could not be held liable for hurt attributable to meanings found not to have been conveyed by a publication. It was further submitted that where the publication did not convey meanings of bribery, dishonesty, or corruption, the injury to feeling caused by a false belief that the publication did convey such meanings was not caused in any material way by the publication.

127 I do not accept this submission in its entirety. A person who is defamed does not formulate a response in the language which a lawyer would use when framing a pleading in subsequent proceedings. Although there is a distinction between a publication which says that a plaintiff is corrupt compared with a publication which asserts conduct giving rise to a reasonable suspicion that that person has acted corruptly, the impact upon a plaintiff of the latter imputation is likely to be very significant. It is important to appreciate that the imputation found by the jury was not confined to mere suspicion but was expressed in terms of a reasonable suspicion of corruption arising from the plaintiff’s conduct. See the discussion in Western Australian Newspapers Limited v Elliott [2008] 250 ALR 363 at [47].

128 An allegation of conduct warranting reasonable suspicion that he or she has behaved corruptly will inevitably seriously hurt a plaintiff’s feelings. That injury is likely to be greater when that person holds a public office and it is conduct in that office which is the source of the defamation. In Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632 Mason and Jacobs JJ observed:

“But in the law of defamation the expression ‘natural and ordinary meaning’ has a special and somewhat larger content than it has in the sphere of legal interpretation. It includes inferences and conclusions which the ordinary man draws from the words used; it includes what was described by Lord Reid in Morgan v Odhams Press Ltd (1971) 1 WLR 1239 at p 1245; 1971 2 All ER Reports 1156 at p 1163 as ‘a certain amount of loose thinking for, as his Lordship then said: ‘the ordinary reader does not formulate reasons in his own mind; he gets a general impression and one can expect him to look again before coming to a conclusion and acting upon it. But formulated reasons are very often an after thought.’ See Rub Improvement v Daily Telegraph Ltd on appeal from Lewis v Daily Telegraph Ltd (1964) AC 234 at 641

129 The evidence of the witnesses who saw or read the matters complained of reflects their impression of its content. Although the jury found that an imputation that the plaintiff was actually corrupt was not published, the seriousness of the imputations which were found is reflected in the response of the viewers of the broadcast. When that publication is that there were reasonable grounds for suspicion that the plaintiff had acted corruptly it was inevitable that a viewer would see little difference between that imputation and one which actually asserted that she was corrupt. The plaintiff herself, understandably, perceived the publication as doing great damage to her reputation. She is entitled to a significant award of damages for the hurt which the publication occasioned to her.

130 WIN 4 has an extensive viewing audience in the Shellharbour region. The evidence indicates that the audience for the news program is of the order of 65,000 persons. The broadcast had a geographical reach throughout the Illawarra region and the south coast of NSW.

131 The defendant accepted that the television broadcast had a significant audience but submitted that it could not be assumed that, although the website was available to be viewed, many people would have accessed it to view the particular item. It was submitted that the item was not a matter of such interest that people would go searching for it.

132 I do not accept this submission. In my judgment it is likely that once the matter was broadcast on the television people with an interest in local politics would have sought confirmation of the story. Many such persons would have gone to the defendant’s website where the news item was readily available for a significant period of time. Although it is not possible to reach any precise conclusion as to the extent to which the news item would have been accessed on the site I am satisfied it would not have been insignificant.

Damage to reputation

133 The defendant submitted that in practical terms the political reputation and public life of the plaintiff had not been significantly impaired as a consequence of the broadcast. In September 2007, six months after the broadcast the plaintiff was appointed as chairwoman of the state wide NSW Small Business Development Corporation by the relevant State Minister. When announcing the appointment the Minister said that the plaintiff had “secured the position because she had established herself as a community leader well known to the business community.” She was also reappointed as a board member of the Illawarra Regional Development Board and continued as a director of the Illawarra Business Chamber between 2005 and 2009. She was also Chair of the Illawarra Innovation Showcase from 2005 to 2008.

134 The positions to which the defendant draws attention bespeak the esteem in which the plaintiff was held by those in a position to appoint her to public office. It may be presumed that those persons were aware of the integrity of the plaintiff and were readily able to discount the impact of the publication. However, this cannot be assumed in relation to ordinary members of the community. Because the plaintiff was in a position where, if she was to continue a role with the local council, she would have to face a general election, significant injury to her reputation may be inferred. This is confirmed by the evidence of the lack of newspaper coverage of her movements and the response of others, who were obviously greatly concerned about the content of the publication. The award of damages must be sufficient to eradicate any stain to the plaintiff’s reputation occasioned by the publication.

Failure to apologise

135 The defendant submitted that because the jury did not find that the publication conveyed the imputations that the “plaintiff was actually corrupt”, the plaintiff’s solicitor’s request for an apology was misplaced. It was submitted that accordingly the failure of the defendant to apologise could not amount to conduct which was unjustifiable, improper or lacking in bona fides (Triggell v Pheeney [1951] HCA 23; (1951) 82 CLR 497; at 514).

136 I do not accept this submission. The defendant continually refused to correct the news item. It refused to inform its viewers and readers that it was incorrect in publishing an allegation that the plaintiff handled a planned technology upgrade in circumstances where she had accepted BlackBerry devices from private communication representatives. The plaintiff’s solicitors continually indicated to the defendant that the factual premise for its publication was erroneous. Notwithstanding this the defendant refused to take any ameliorative action.

The decision in Obeid

137 The defendant drew attention to the decision of this Court in Obeid v John Fairfax Publications Pty Ltd (2006) NSWSC 1059; 68 NSWLR 150 where the jury found that the defendant had published imputations that the plaintiff was a corrupt politician, had attempted to obtain a bribe and had lied when he denied that he had sought a bribe for the Australian Labor Party in return for facilitating a particular development. In that case the sale of the relevant newspaper exceeded 350,000 copies with a significantly greater readership. Mr Obeid was awarded a sum of $150,000 in a case where the cap provided by the Defamation Act 2005 did not apply. It was submitted by the defendant that the circumstances of the present publication could not warrant a verdict of similar proportions to that awarded Mr Obeid.

138 The plaintiff submitted that the decision in Obeid is distinguishable from the present case. In determining the damages to be awarded, Hoeben J held that were a number of limiting factors:

(a) Hoeben J accepted that the damage occasioned to Mr Obeid’s reputation was ameliorated by the public vindication he had received through the subsequent exoneration he received from ICAC some six months after the publication;

(b) Hoeben J accepted the defendant’s submission that there were other contributing factors to the damage occasioned to Mr Obeid’s political reputation, the defamatory publication being only one of a number of causative factors at [104];

(c) Hoeben J’s assessment of the effect of the defamatory publication on Mr Obeid was affected by his assessment of Mr Obeid as being “possessed of a resilient and robust personality”, “well able to deal with insults and attacks directed at him personally” at [108].

139 The damage to the plaintiff in the present case is not confined as it was in Obeid. Notwithstanding her exoneration by the Code of Conduct Committee, which occurred prior to the publications, the plaintiff did not have the benefit of a public exoneration at least for a considerable time. The findings of the Code of Conduct Committee delivered in November 2006 were kept confidential and were not dealt with by the Council until November 2007. The plaintiff’s sensitivity to the Council’s assertion of confidentially is understandable, particularly having regard to the Council’s then current litigation in the Land and Environment Court in which it pursued a person for the alleged leaking of confidential information. The hurt occasioned to the plaintiff was all the more acute, when having been exonerated by the committee and entitled to believe the nasty rumours about her had been conclusively shown to be false, she was unfairly and publicly accused again, in circumstances where she was not given a chance to address the allegations and her rebuttal of them was not reported.

140 Unlike Hoeben J’s assessment of the effect of the defamatory publication on Mr Obeid, who he assessed as being “possessed of a resilient and robust personality”, well able to deal with insults and attacks directed at him personally”, it was submitted that the effect on the plaintiff was profoundly more acute. The plaintiff was “absolutely distraught”; “felt torn to shreds”; and felt it was “hard, it was very, very hard for me.” I have already indicated that I accept the plaintiff’s evidence as to the impact of the publication upon her. Although she was significantly involved in community affairs and was a member of the Council she did not impress me as having a resilient and robust personality similar to Mr Obeid. I accept that she has been deeply hurt by the defamatory matter published about her.

Aggravated damages

141 It is unnecessary for a plaintiff to prove injury to his or her feelings by reason of the aggravating behaviour of a defendant (Obeid v John Fairfax Publications Pty Ltd (2006) NSWSC 1059; 68 NSWLR 150.

142 The plaintiff argued that an award of damages including aggravated damages was appropriate in the present case. The submission had multiple limbs and I refer to those of significance. The plaintiff submitted that there were elements of aggravation beyond the circumstances of the publication by reason of the defendant’s persistence in its plea of truth and its plea of qualified privilege, the latter being withdrawn only towards the end of the trial. It was submitted that because there was no evidence that the plaintiff ever handled a technology upgrade for the council and did not personally accept BlackBerries the plea of truth was always bound to fail. It was further submitted that the persistence in a plea of qualified privilege was unjustified. It was otherwise submitted that the uncontested evidence established that the defendant failed to publish the plaintiff’s denial of the allegation and published instead an allegation that she declined to comment; published without waiting for the return of the plaintiff from overseas in circumstances where she had offered to discuss the matter. It was also submitted that the defendant failed to give the plaintiff a reasonable opportunity to reply in circumstances where there was no urgent need to publish. The assertion in the course of the trial that the plaintiff had lied was also relied upon as a significant source of aggravation.

143 The plaintiff particularly emphasised that when she was cross-examined it was suggested that she had lied in her response to Mr Snelson when she said “I don’t know what you are talking about”. Apart from being cross-examined in these terms senior counsel for the defendant submitted to the jury that this response by the plaintiff was “not true and (she) knows it was not true.” It was submitted by senior counsel that the plaintiff knew exactly what Mr Snelson was talking about. Counsel also accused her of lying to Mr Weir when she denied that she or her company had received free usage of telecommunications equipment.

144 For reasons which I have already given I am satisfied that both these assertions could not be sustained. Although as counsel pointed out Mr Snelson said he referred to BlackBerries (which I have found not to be the case) and Telstra, the essential essence of the allegation was that the plaintiff had acted corruptly in handling a technology upgrade. This assertion was entirely without foundation and would have come “out of the blue” to the plaintiff. It was unquestionably appropriate for her to respond that she did not know what Mr Snelson was talking about. With respect to the conversation with Mr Weir, a free trial of the modem was part of the usual commercial terms offered by Telstra for which the plaintiff’s company paid the usual commercial charges.

145 The plaintiff also emphasised that during the course of giving his evidence Mr Duffy spoke of a conversation he had with Miss Baltovska in which she said she was surprised that the plaintiff had not been “caught out previously.” This evidence was of no relevance and Mr Duffy ultimately admitted that he had brought it forward so as to introduce “a little bit of scandal about Mrs Greig in giving his evidence.”

146 The plaintiff emphasised that although the defendant was repeatedly asked to retract its publication and publish a correction with an apology it failed to do so. The evidence disclosed that on the evening of the publication the plaintiff’s solicitor telephoned the defendant and left a message that the broadcast was “highly defamatory” and “untrue”. On that evening the solicitor spoke to Mr Duffy and informed him that the broadcast was “completely untrue”.

147 The plaintiff through her solicitor, as discussed above, on several occasions, wrote to the defendant seeking a retraction and an apology, ultimately the defendant did not comply. The plaintiff was aware of the defendant’s refusal to provide a correction or an apology.

Defendant’s submissions on aggravated damages

148 The defendant submitted that as a general matter, the plaintiff’s submissions as to aggravated damages misstate the law. The defendant argued that aggravated damages are not an independent head of damage as, indeed, is indicated by the fact that their correct title is “aggravated compensatory damages”. The defendant drew attention to the statement by Brennan J in Carson v John Fairfax & Sons Limited [1993] HCA 31; (1993) 178 CLR 44, 71:

“Damages may be aggravated or mitigated by the manner in which the defamatory matter was published and by the subsequent conduct of the defendant (Triggell v Pheeney (1951) 82 CLR at 514). Conduct of the defendant from the time of publication until verdict (including conduct at the trial, to which reference will presently be made) is relevant (Pared v Graham (1889) 24 QBD 53 at p 55). In Broome v Cassell & Co Lord Reid, speaking of the bracket within which any sum could be regarded as not unreasonable compensation, said ([1972] AC at p 1085):

‘It has long been recognized that in determining what sum within that bracket should be awarded, a jury, or other tribunal, is entitled to have regard to the conduct of the defendant. He may have behaved in a high-handed, malicious, insulting or oppressive manner in committing the tort or he or his counsel may at the trial have aggravated the injury by what they there said. That would justify going to the top of the bracket and awarding as damages the largest sum that could fairly be regarded as compensation.’

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Evidence of the defendant’s conduct is therefore relevant and admissible on the issue of compensatory damages, whether or not it tends to prove malice, but only so far as that conduct exacerbates or ameliorates the consequences of the original publication or the plaintiff’s injured feelings.”

149 As to the plaintiff’s claim for aggravated damages based on the falsity of the imputations, the defendant disputed her entitlement to damages in that respect. It was submitted that she never indicated that her hurt was increased by the imputations actually found by the jury.

150 It was submitted that the failure by Mr Duffy to check the relevant council business paper was not relevant to any issue of damages. It was argued that the fact is that the supposed removal of the item from the council business paper was not the subject of any defamatory imputation. It was submitted that aggravating conduct can only involve the defamatory imputations because, if the matter in question is not defamatory, no legal right of the plaintiff has been infringed. Put another way, it was submitted that the plaintiff did not sue over any assertion that the matter had been removed from the business paper and as such she is not entitled to any damages, on any basis, for that claim. In these circumstances, the failure of Mr Duffy to check, and whatever he may have discovered if he had, is beside the point.

151 With respect to the conduct of the trial the defendant submitted that the truth defence was maintained bona fide and there was evidence to support the truth of each of the imputations found by the jury. Because I had initially ruled that justification could go to the jury, it was said to be difficult to assert that the conduct in question could even approach the standard mandated in Triggell.

152 With respect to the conversation between the plaintiff and Mr Snelson it was submitted that Mr Snelson’s evidence was plausible and if accepted by the jury, as it was open for the jury to do, it followed that an available explanation for the discrepancies between the two versions of the conversation was that the plaintiff was not telling the truth. It was further submitted that because Telstra offered a free trial of the modem the plaintiff’s response to Mr Weir was a lie.

Conclusion with respect to aggravated damages

153 As I have already indicated a court is entitled to infer injury to the plaintiff’s feelings without the leading of express evidence. Mr Duffy accepted that he published a lie when rather than report the plaintiff’s denial of the allegations he said that she had no comment. By this deliberate act the defendant occasioned significant additional harm to the plaintiff. The plaintiff says that the failure to publish her denial exacerbated the hurt to her feelings and further diminished her view of the opinion which the public would hold of her reputation. To my mind that hurt was significantly increased by the knowledge that not only was the statement not true its author intended that the defendant would publish what he knew to be a lie.

154 In the present case there is abundant evidence that the plaintiff knew of the defendant’s conduct of its defences of the proceedings against her, she read the pleadings and was present in court for most of the trial. During the trial the defendant attempted to publicly impugn her reputation. There can be no doubt that the manner in which the matter was defended inevitably increased the plaintiff’s mental pain and suffering (McCarey v Associated Newspapers Ltd & Ors [1964] 3 All ER 947 at 957).

155 To my mind the lack of any credible basis for the defence should have been apparent to the defendant well before the trial. Although it was argued that the question of “handling the upgrade” and reference to the BlackBerries did not affect the substance of the imputations as I have explained this was not the case. The defendant accepted the burden of proving that the plaintiff by acting in a particular manner had conducted herself in such a way as to give rise to a reasonable suspicion that she had acted corruptly. In fact, as must have been known to the defendant well before the trial, the plaintiff had not acted as asserted.

156 Even if, as the defendant ultimately submitted, all that it had to establish was that by some actions of the plaintiff, other than those referred to in the pleaded imputation, she had acted in such a way as to give rise to the reasonable suspicion she had acted corruptly, the defence was without any support in the evidence. The defendant sought to use the fact that the plaintiff was using and spoke favourably of a modem supplied to her company on conventional commercial terms, which included a free trial period, to support the reasonable suspicion ground. Although the assertions of council officers based upon their report of statements by Mr Valentinetti may have given rise to suspicion as to how the plaintiff came to have the modem the true facts known to the defendant well before trial and, if nowhere else, set out in the letter (from Telstra to Mrs Greig sent by her to the council) established that the plaintiff never received a favour from Telstra, much less that she accepted devices in the handling of a technology proposal of the council.

157 It is a serious matter to assert, particularly in court proceedings that a person has lied. The proposition having been rejected by that person when giving evidence on oath has the consequence that it is being suggested that the person has again lied when giving their evidence. The impact of the assertion by counsel to the plaintiff was immediately obvious. Having come to court to defend her reputation against a baseless assertion that she had conducted herself in a manner which gave rise to a reasonable suspicion that she had acted corruptly to be confronted by an allegation that she was lying must have seriously compounded the hurt to her feelings.

158 Although the defendant’s reluctance to remove the news item from the website and failure to offer an apology have significance I do not believe that in this case they justify an award other than for compensatory damages. Although the defendant could have, and in my opinion should have, checked the council’s website and could have waited for the plaintiff to return to Australia before broadcasting I do not believe these matters, in this case, justify an award of aggravated damages.

Conclusion

159 Although the plaintiff submitted that the award of damages, including aggravated damages in the present case should exceed the statutory cap I am not persuaded that this would be appropriate. I am satisfied that the plaintiff has suffered significant injury to her feelings and that her reputation in the minds of many people will have been damaged. It is important that an award of damages be sufficient to restore her reputation and ensure that, should the defamation surface in the future, she can effectively put it to rest. I am satisfied that the damages should include an award for aggravated damages, having regard to the fact that the defamation was published without the plaintiff’s denial and those aspects of the conduct of the trial to which I have referred. Furthermore, there is no aspect of the matter which would justify a mitigation of the award of damages as contemplated by s 38 of the Act. To my mind an appropriate award of damages, including aggravated damages, is the sum of $200,000.

160 I shall defer making orders until the parties have had an opportunity to make any relevant submissions with respect to costs.

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AMENDMENTS:


27/08/2009 - judgment date omitted from cover sheet - Paragraph(s) cover sheet


LAST UPDATED:
27 August 2009