P and W v MANNY and Anor [2010] ACTSC 50 (11 June 2010)

CAUSE OF ACTION – cause of action against the company – whether indiscriminate use of company letterhead by the sole director advances the affairs of the company – claim dismissed 

DEFAMATION – absolute privilege – qualified privilege at common law – judicial and quasi-judicial proceedings – complaint to prosecuting authority – defence of triviality

SLANDER – oral defamatory statement – malice in oral publication – qualified privilege at common law – statutory qualified privilege – defence of triviality 

EVIDENCE – publication – prohibition of publication of the plaintiffs’ names – prohibition of publication of evidence given in the hearing that might identify the plaintiffs – s 91 of the Evidence (Miscellaneous Provisions) Act 1991(ACT) – “necessary to prevent prejudice” – s 50 of the Federal Court of Australia Act 1974 (Cth)

CONTEMPT – contempt of court – implied undertaking that documents produced under subpoena not be used for a collateral purpose – first plaintiff used document so obtained in these proceedings – ex parte application made to purge contempt – magistrate granted leave for the first plaintiff to use document in these proceedings – first defendant’s application to dismiss the proceedings for abuse of process – whether orders of the magistrate should be set aside – whether implied undertaking binds only litigant personally - whether “special circumstances” exist that affords a reason for modifying or releasing the undertaking 

DAMAGES – compensation for personal distress and hurt and vindication – aggravated damages – no casual link between defamation and economic loss – assessment of damages 

WORDS AND PHRASES – “special circumstances”. 

Evidence Act 1971 (ACT), s 83
Evidence (Miscellaneous Provisions) Act 1991 (ACT), s 91
Federal Court of Australia Act 1976 (Cth), s 50
Court Procedure Rules 2006 (ACT), r 650, r 651, r 660, r 1613
Magistrates Court Act 1930 (ACT), s 270 
Civil Law (Wrongs) Act 2002 (ACT), s 122, s 126, s 136, s 139A, s 139D, s 139E
Defamation Act 1974 (NSW), s 13
Defamation Act 2005 (NSW), s 33

Australian Broadcasting Commission v Parish & Ors (1980) 43 FLR 129
Hearne v Street (2008) 235 CLR 125
United States Surgical Corp v Hospital Products International Pty Ltd (unreported, Supreme Court of New South Wales Equity Division, McLelland J, 7 May 1982, BC8200010)
Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322
Welfare v Birdon Sands Pty Ltd (1997) 79 FCR 220 
Australian Prudential Regulation Authority v Rural & General Insurance Ltd [2006] FCA 151, 27 February 2006, Gyles J
Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756
Riddick v Thames Board Mills Ltd [1977] QB 881
Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10
Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217
Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 
Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125
Mann v O’Neill (1997) 191 CLR 204
Taylor v Director of the Serious Fraud Office [1999] 2 AC 177
Westcott v Westcott [2009] QB 407
Evans v London Hospital Medical College [1981] 1 WLR 184
Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 
Jones v Skelton [1963] 1 WLR 1362
Roberts v Bass (2002) 212 CLR 1
Horrocks v Lowe [1975] AC 135
Brown v Marron [2001] WASC 100 (20 April 2001)
Adam v Ward [1917] AC 309
Chappell v Mirror Newspapers (1984) Aust Torts Reports 80-691
Jones v Sutton (2004) 61 NSWLR 614
Tillmanns Butcheries Pty Ltd v Australasian Meat Industries Employees’ Union (1979) 42 FLR 331 
Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500
Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44
Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327
Triggell v Pheeney (1951) 82 CLR 497
Anderson v Mirror Newspapers Ltd (No. 2) (1986) 5 NSWLR 735
Trantum v McDowell [2007] NSWCA 138 
Zarth v Williamson [2006] NSWCA 246
Martin v Bruce [2007] NSWDC 264
John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131

Gatley on Libel and Slander (11th ed)

No. SC 601 of 2005

Judge:	Gray J
Supreme Court of the ACT
Date:	11 June 2010 

IN THE SUPREME COURT OF THE	)
	)	No. SC 601 of  2005
AUSTRALIAN CAPITAL TERRITORY	)

BETWEEN:	P
			First Plaintiff

AND:		W
			Second Plaintiff

AND:		JEFF MANNY
			First Defendant

AND:		JEFF MANNY PTY LTD
	Second Defendant	

ORDER
Judge:	Gray J
Date:	11 June 2010  
Place:	Canberra
THE COURT ORDERS THAT:
 
1.	Pursuant to s 270 of the Magistrates Court Act 1930 (ACT) proceedings concerning leave given by Magistrate Madden on 13 March 2008 to use a letter addressed to “Superintendent Belconnen police station, Australian federal police” dated 9 November 2004 (the letter) be removed to this Court. 
2.	Pursuant to Court Procedure Rules 2006 (ACT) r 1613, leave given by Magistrate Madden on 13 March 2008 in respect of the letter be set aside. 
3.	Leave be granted to the plaintiffs to use the letter addressed to “Superintendent Belconnen police station, Australian federal police” dated 9 November 2004 in these proceedings. 
4.	The plaintiffs’ claim against the second defendant be dismissed. 
5.	There be judgment for the second plaintiff against the first defendant in respect of the first matter complained of in the sum of $22,200.00.
6.	There be judgment for the second plaintiff against the first defendant in respect of the second matter complained of in the sum of $4,000.00. 

1.	The plaintiffs in this matter, who have been given the pseudonyms P and W respectively, claim that they were defamed by the first defendant, Jeff Manny, in a letter published to the “Superintendent, Belconnen police station, Australian federal police” dated 9 November 2004.  The letter was sent bearing the letterhead of the second defendant, Jeff Manny Pty Ltd, and was purportedly signed by the first defendant.
The plaintiffs’ names
2.	The proceedings were commenced on 5 September 2005 by filing an originating application.  In an ex parte application the plaintiffs sought an order that their names not be published, relying on s 83 of the Evidence Act 1971 (ACT) (now s 91 Evidence (Miscellaneous Provisions) Act 1991).  That section provides:
91	Prohibition of publication of evidence etc
(1)	If it appears to a court that—
(a)	the publication of evidence, given or intended to be given, in a proceeding before the court, is likely to prejudice the administration of justice; or
(b)	in the interests of the administration of justice, it is desirable that the name of a party to, or a witness, or intended witness, in a proceeding before the court be not published; 
the court may, at any time during or after the hearing of the proceeding, make an order—
(c)	forbidding the publication of the evidence or a specified part of the evidence, or of a report of the evidence, either absolutely or subject to any conditions that the court specifies or for any period that is specified; or
(d)	forbidding the publication of the name of the party or witness.
(2)	If a court makes an order under subsection (1), the court may, if it considers appropriate, also direct that people specified by the court, or everyone except people so specified, must remain outside the courtroom for the period that the court specifies.
3.	On 16 September 2005, this Court ordered that the names of the plaintiffs not be published.  When the matter first came on for substantive hearing on 7 November 2007, an order was made that the evidence given in the hearing not be published if it would identify the plaintiffs.
4.	The provision authorising this course is governed by the likelihood of prejudice to the administration of justice.  It was accepted by the Court that the nature of the allegations said to constitute the defamation could be such that they could further damage the plaintiffs’ reputation and have an economic effect on the plaintiffs’ business and employment.  The principle of open justice is the underlying assumption, however, that principle requires consideration by reference to the broader aspect of prejudice to the administration of justice.  In speaking of a similar provision in s 50 of the Federal Court of Australia Act 1976 (Cth), Bowen CJ said in Australian Broadcasting Commission v Parish & Ors (1980) 43 FLR 129 at 133:
Open justice is the underlying assumption of s 50, not the criterion it prescribes.  The section refers to preventing “prejudice to the administration of justice”.  This is not a reference to the need to preserve open justice.  It is, as I have already suggested, a reference to another public interest, that is, the public interest that the court should endeavour to achieve effectively the object for which it was appointed:  to do justice between the parties.
5.	There is every good reason why, if the defamatory imputation were to be widely published because of these proceedings, the plaintiffs’ reputation would be harmed in respect of matters that had initially an intended limited publication.  It seemed to be both in the plaintiffs’ interest and that of the defendants to minimise the extent of the publication.  On that basis, the order was made.
6.	The course of these reasons requires that I refer extensively to the evidence and pleadings that might identify the plaintiffs.  In [40] I refer to the names of the first and second plaintiffs but thereafter in these reasons describe them as such.  After delivery of these reasons, I shall hear from the plaintiffs and the defendants as to whether there is any reason why the plaintiffs’ names should now be published or whether a further order should be made forbidding publication of any matter in these reasons which might identify them.
Course of the proceedings
7.	After the proceedings were filed and the plaintiffs had obtained the non-publication order, the proceedings were served on the first defendant together with other documents including an application for summary judgment.  That application for summary judgment was heard and dismissed by Connolly J on 24 February 2006 with a defence, including a claim of qualified privilege, and a reply containing particulars of malice having been filed before the application was heard.  There were various interlocutory applications mainly dealing with interrogatories and particulars.
8.	On 26 September 2006, by leave, an amended defence was filed adding a defence that the circumstances of the publication of the matter complained of were such that the plaintiffs were unlikely to suffer harm.  On 14 December 2006, a hearing date was set for 14 May 2007.  That date was vacated on 11 May 2007.  The plaintiffs alleged that at a social gathering on 21 April 2007, the first defendant had made an oral defamatory statement about the second plaintiff connected with the first matter that had given rise to the plaintiffs’ cause of action in these proceedings.
9.	On 22 June 2007, an amended statement of claim alleging these facts was filed and that now constitutes a second cause of action (the second matter) against the first defendant.
10.	A defence to the amended statement of claim was filed on 13 September 2007.  In addition to the matters raised by way of defence to the first matter, there was a denial of the oral statement constituting the second matter and, in the alternative, it was claimed that in the circumstances of the publication of the second matter, the second plaintiff was unlikely to sustain any harm.
11.	The hearing proper of this matter commenced on 7 November 2007 and the first plaintiff gave his evidence concerning the publication of the first matter insofar as it concerned him.  He was cross-examined and his evidence concluded.
12.	The matter was then adjourned for a witness to the alleged oral defamatory statement to give evidence before the second plaintiff gave his evidence as to both the first and second matters.
13.	A reply to the defence to the amended statement of claim was filed on 17 April 2008.  That reply gave different particulars of malice in respect of the publication of the first matter.  It was signed by the first plaintiff only but purported to be on behalf of both plaintiffs.  
14.	The hearing resumed on 30 June 2008 and continued on 1 July 2008.  There was a change in counsel for the defendants.  Various witnesses were called concluding with the evidence-in-chief of the second plaintiff.
15.	During the second plaintiff’s evidence, an issue arose as to the scope of the particulars of malice in the reply.  Ultimately, leave was given to the defendants to amend their defence to the amended statement of claim to add a defence of qualified privilege in respect of the second matter and to assert that in the circumstances of the publication, the second plaintiff was unlikely to suffer any harm.  The plaintiffs were to file a reply to the further amended defence.  Those pleadings were filed on 8 September 2008.
16.	The hearing resumed on 15 December 2008 and the defendants sought leave to file a second further amended defence to the amended statement of claim to claim that the first matter complained of was published on an occasion of absolute privilege.  On 16 December 2008 leave was granted.  Also on 16 December 2008, the examination-in-chief of the second plaintiff was completed and he was cross-examined.  Two further witnesses were called and documents tendered.  The plaintiffs closed their case.
17.	On 16 December 2008, the first defendant, Mr Manny, commenced his evidence.  Cross-examination concluded on 18 December 2008 and one further witness was called.  The plaintiffs tendered, by consent, transcript of the summary judgment application before Connolly J, a letter of particulars and material concerning the second plaintiff’s superannuation position.  The defendants tendered certain answers to interrogatories and a sequence of emails.  That completed the evidence. 
18.	The matter was then adjourned for the parties to prepare written submissions.
Application to dismiss the proceedings relating to the first matter of complaint
19.	When the hearing of the matter resumed on 5 May 2009, the defendants drew attention to a circumstance concerning the letter containing the first matter complained of.  That letter is the basis of the plaintiffs’ claim.  In cross-examination on 7 November 2007, the first plaintiff had asserted that he had become aware of the existence of the letter as a result of a subpoena answered by the Australian Federal Police (AFP) in an application made in the Magistrates Court for an apprehended violence order involving Mr Manny.  He did, however, say that whilst he was aware of the implied undertaking that documents produced under subpoena not be used for a collateral purpose, that he had another copy of the letter that he thought had come from his son, the second plaintiff.  On that basis, the letter was subsequently admitted into evidence by consent.
20.	At the close of proceedings on 18 December 2008, the defendants tendered answers to interrogatories by the first and second plaintiffs which appeared to indicate that the letter which had been tendered in evidence was the same letter that had been produced under subpoena.  By letter dated 23 December 2008, the plaintiffs’ solicitors provided to the defendants’ solicitors a transcript of proceedings in the Magistrates Court on 13 March 2008 in which the first plaintiff had applied to that court to purge his contempt in using the letter for the purpose of these proceedings.  That application was made ex parte.
21.	The transcript of the proceedings before Magistrate Madden in the ACT Magistrates Court on 13 March 2008 records the following:
[The first plaintiff]:  Yes, I’ve been guilty of an inadvertent contempt and that’s why I’ve come back to your Honour.  The circumstances are that I seek to apologise to your Honour in open court and seek a pardon.  In the action 862 of 2004, Mr Manny applied [f]or a second protection order which was dismissed.  In the course of that - - - 
HIS HONOUR:  That’s the one that I heard?
[The first plaintiff]:  Yes.
HIS HONOUR:  Yes.
[The first plaintiff]:  In the course of that, preparing for it, I caused to be subpoenaed some police records and a letter surfaced which was extremely defamatory of both my son and me and your Honour may recall it accused us of paedophilia in the course of teaching the children.
HIS HONOUR:  The letter did, did it?
[The first plaintiff]:  Yes.  It was a letter to the police commissioner.
HIS HONOUR:  Yes.
[The first plaintiff]:  Your Honour, to use that letter in another proceeding of course constitutes a contempt and at the end of the proceedings I was under the impression that my son, [the second plaintiff], Constable [the second plaintiff] had obtained a second copy of the letter himself and I instructed solicitors to use it [to] commence defamation proceedings in the Supreme Court.
It was used in the pleadings, but in fact I was wrong, he hadn’t received another copy and what was used was the copy that I had subpoenaed.  So the action commenced by me, and by my son for defamation, was in fact based upon the letter subpoenaed from the police.  I was, at the time it was issued until it came to the Supreme Court, under the impression that the original subpoenaed letter was not the one used in the proceedings.  In fact it was the one.
So by reason of this happening, I have been technically guilty of a contempt of this court in not seeking your Honour’s leave to use the letter in other proceedings.  I could have had an alternative way of doing it which would have been to have a pre-action discovery of a third party which is a very simple procedure and had I realised what I was doing then I would have done that rather than trouble you, but because we didn’t have that procedure, I have to come to your Honour to make the record clear and to apologise and to ask your Honour to excuse me and also to impose such penalty for that contempt as you may consider appropriate, but I also seek your Honour’s leave or permission to use the letter in the defamation proceedings despite the fact that this permission has not been previously sought.
Now I really can’t say anymore and that’s as your Honour will see is not a momentous statement but a very abject apology.  It was an oversight that I made that I should not have made.
HIS HONOUR:  Yes.  Well [the first plaintiff], it’s not a matter that I was aware of.  I thank you for your frankness and what presents to me as your genuine remorse and contrition about this oversight and I accept your apology and I don’t propose to take any further action.
[The first plaintiff]:  May it please the court.
HIS HONOUR:  Thank you for coming and I’ll otherwise excuse you.
[The first plaintiff]:  Could I ask your Honour’s permission to, even though it’s late, to use that letter in the proceedings?
HIS HONOUR:  Yes, I’ll grant you leave to use the letter in any other litigation that may be relevant to it.
22.	As these proceedings were heard ex parte, the defendants sought to invoke Court Procedure Rules 2006 (ACT) (CPR), r 1613(2)(a) which empowers the court to set aside an order at any time if the order was made in the absence of a party.  Application was made to the Magistrates Court but as the magistrate concerned was on extended leave, the parties asked that I remove the matter to this Court under s 270 of the Magistrates Court Act 1930 (ACT).  The defendants asked that I hear and determine the application that they had made in the Magistrates Court to set aside the order giving the first plaintiff leave to use a document produced under subpoena in these proceedings.  I also had before me an application which stated in its terms to “dismiss these proceedings in so far as they relate to the first matter complained of as being an abuse of the processes of the court”.  Alternatively, that application sought a grant of leave to object to the admission in evidence of the letter and an order rejecting its tender.  That application was plainly predicated on the order granting leave to use the letter being set aside.
23.	In Hearne v Street (2008) 235 CLR 125 (Hearne), the High Court determined that the implied undertaking concerning documents disclosed in the litigious process to be used only for the purpose of that action was an obligation of substantive law.  The rule was stated by Hayne, Heydon and Crennan JJ at [96]:  
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits. 
(Footnotes omitted.)
24.	In the present case, the first plaintiff obtained the letter upon which his claim is founded produced as a consequence of a subpoena to a third party in proceedings against the first defendant.  The plaintiffs suggested that the rule was limited to documents obtained from a party to the litigation.  However, United States Surgical Corp v Hospital Products International Pty Ltd (unreported, Supreme Court of New South Wales Equity Division, McLelland J, 7 May 1982, BC8200010), Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322, Welfare v Birdon Sands Pty Ltd (1997) 79 FCR 220 and Australian Prudential Regulation Authority v Rural & General Insurance Ltd [2006] FCA 151, 27 February 2006, Gyles J, are examples of documents that had been produced under subpoena by strangers to the litigation and such documents were held to be subject to the implied undertaking.  Contrary to the plaintiffs’ submission, the document in issue in this matter is subject to the rule.
25.	The application by the first plaintiff to the magistrate was based upon the qualification that a court may dispense with or modify the implied undertaking.  In a statement cited in Hearne, Hobhouse J in Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764-765 said:
This undertaking is implied whether the court expressly requires it or not.  The expression of the obligation as an implied undertaking given to the court derives from the historical origin of the principle. It is now in reality a legal obligation which arises by operation of law by virtue of the circumstances under which the relevant person obtained the documents or information.  However treating it as having the character of an implied undertaking continues to serve a useful purpose in that it confirms that the obligation is one which is owed to the court for the benefit of the parties, not one which is owed simply to the parties;  likewise, it is an obligation which the court has the right to control and can modify or release a party from.  It is an obligation which arises from legal process and therefore is within the control of the court, gives rise to direct sanctions which the court may impose (viz contempt of court) and can be relieved or modified by an order of the court.  It is thus a formulation of the obligation which has merit and convenience and enables it to be treated flexibly having regard to circumstances of any particular case.
26.	In Hearne, the plurality added (at 159-160):
The importance with which the courts have viewed the obligation under discussion is indicated by the fact that although it can be released or modified by the court, that dispensing power is not freely exercised, and will only be exercised where special circumstances appear (Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 37).
“Circumstances under which that relaxation would be allowed without the consent of the serving party are hard to visualise, particularly where there was any risk that the statement might be used directly or indirectly to the prejudice of the serving party” (Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 775; [1991] 3 All ER 878 at 895 per Hobhouse J).
27.	In Riddick v Thames Board Mills Ltd [1977] QB 881, a document disclosed on discovery in a previous action by an employee formed the basis for a subsequent claim for defamation against the employer company.  The purpose of the implied undertaking was expressed by Lord Denning MR at 896C in this way:
Compulsion is an invasion of a private right to keep one’s documents to oneself.  The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires.  The courts should, therefore, not allow the other party—or anyone else—to use the documents for any ulterior or alien purpose.  Otherwise the courts themselves would be doing injustice.  Very often a party may disclose documents, such as inter-departmental memoranda, containing criticisms of other people or suggestions of negligence or misconduct.  If these were permitted to found actions of libel, you would find that an order for discovery would be counter-productive.  The inter-departmental memoranda would be lost or destroyed or said never to have existed.  In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purposes of the action in which they are disclosed.  They are not to be made a ground for comments in the newspapers, nor for bringing a libel action, or for any other alien purpose.
28.	To a similar effect was the comment of Stephenson LJ (at 901-902) who said that the party who produces a document on discovery and to the court:
…is entitled to the protection of the court against the use of the document otherwise than in the action in which it is disclosed; and that protection is necessary for the proper administration of justice;  it is important to the public and in the public interest that the protection should be enforced against anybody who makes improper use of it.
29.	The requirement that special circumstances be shown as expressed in Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10 cited in Hearne, was not drawn to the magistrate’s attention when the first plaintiff sought leave to use the letter in these proceedings.  Nor in light of the citations concerning the principle can it be said that it was a technical contempt as the first plaintiff asserted to the magistrate.  The first plaintiff also referred to the ability to have “pre-action discovery” as a ground for being “technically guilty” of a contempt.  However, such a procedure would not have been available to obtain the letter from a third party as there was no question as to identity of the defendant or the right to claim relief.  CPR r 650 and r 651 respectively require the existence of those matters as a precondition to preliminary discovery.  Non-party production could have been available under CPR r 660 but that is predicated upon the action having commenced and, in this case, that would be for a purpose for which leave had not been given.
30.	The AFP, who produced the document under subpoena, was an appropriate party to be heard before the magistrate on this issue and Mr Manny, as a party to the present proceedings, also had, at least, an interest in being heard, even if it be said that he was not a necessary party to such an application.  I note that in Australian Prudential Regulation Authority v Rural & General Insurance Ltd after hearing both parties Gyles J adjourned the proceedings to give the third party who produced the documents the opportunity of appearing and opposing the proposed order that the produced documents be used in other proceedings in which the third party was not concerned.
31.	In the present case, the AFP was advised by the first plaintiff of the defendants’ application in these proceedings to set aside the magistrate’s order of 13 March 2008.  The AFP advised that in view of the magistrate’s grant of leave, it did not wish to be heard.  The question of whether I should accept that advice has caused me some concern.  I am considering afresh whether leave should be given.  However, the AFP has had the opportunity to consider its obligations to preserve the confidentiality of information given to it and the public interest in protecting information from actions for defamation.  I think that I am entitled to expect that its position in not seeking to be heard is a considered one.
32.	Having regard to the foregoing, I take the view that I should set aside the magistrate’s order granting leave and consider afresh whether leave to use the letter should be granted.
33.	In Esso Australia Resources Ltd v Plowman, at 37, Brennan J referred to the circumstances of the release and modification of the undertaking concerning a document produced under compulsion and said:
That dispensing power is not freely exercised, but it will be exercised when special circumstances appear. In the Federal Court, special circumstances have been held to exist where “there is a special feature of the case which affords a reason for modifying or releasing the undertaking and [the feature] is not usually present”. It is unnecessary to consider whether the dispensing power should be so broadly defined.
(Footnotes omitted)
34.	In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, one of the Federal Court cases to which Brennan J refers, Wilcox J said (at 225):
For “special circumstances” to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.
(See, too, Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 at 578-9;  Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 at 133.)
Special circumstances
35.	A significant aspect of the circumstances relied upon as being special is the fact that the document in issue is reasonably required for the purpose of doing justice between the parties in these proceedings.  In this case, the document and its publication is the very foundation of the plaintiffs’ case.
36.	It may also be noted that the action is not being taken against the party producing the document but against the author of the document.  The rationale underlying the rule was expressed by Mason CJ in Esso Resources Ltd v Plowman at 33 when he said:
It would be inequitable if a party were compelled by court process to produce private documents for the purpose of the litigation yet be exposed to publication of them for other purposes.
37.	The emphasis is on the prejudice to the party producing the document not to other persons who may be affected by the production.
38.	In opposing the application for leave, the defendants referred to their second further amended defence which was filed by leave given on 16 December 2008 and claimed that the letter was published on an occasion of absolute privilege.  If that were so, there would be no cause to give leave to use the letter.  In the alternative, it was put that: 
The nature of the document and the way in which the plaintiff became aware of its existence would both lead the court to decline to order discovery [sic].
39.	I am aware of those circumstances but am satisfied that, unless the claim that the letter is absolutely privileged is well founded, I should grant the leave sought.
The circumstances giving rise to the first matter
40.	Peter Lennox Shiels, the first plaintiff, is a retired lawyer and the father of the second plaintiff, Warwick Peter Shiels, a senior constable in the Australian Police Force.  Both have an interest in karate and, since 1985, have operated a karate school for adults and children which, at the material times operated from premises in Belconnen.
41.	The first defendant, Jeff Manny, carries on a business in Belconnen and the second defendant is a company of which the first defendant is the sole director and shareholder.
42.	The first defendant’s three sons were students at the karate school.  On 27 August 2004, there was a physical altercation at the school between the first plaintiff and the first defendant.  The second plaintiff was present.
43.	It appears that an allegation was made to the police by the first defendant that he was assaulted by both the first and second plaintiffs.  
44.	The next day the first plaintiff says that he was threatened by the first defendant who had telephoned him.  That threat was reported to police and the first plaintiff says he obtained “a restraining order” from the Magistrates Court.
45.	The second plaintiff received (and made notes of) text messages sent to him on 28 August 2004.  It is difficult to say whether the messages relate to the incident involving the alleged assault but they do appear to relate to an asserted relationship between the second plaintiff and the first defendant’s wife.
46.	A letter dated 1 September 2004 under the letterhead of JK3L Pty Ltd “The Property Development Entity of the Jeff Manny Group of Companies” was sent to the police concerning the incident of 27 August 2004 alleging and describing an assault by both plaintiffs on the first defendant.  The letter was apparently unsigned but the signature block was “Jeff Manny”.
47.	There was then a further letter.  That is the letter that was obtained under third party subpoena and is the subject of the plaintiffs’ application to use it in these proceedings.  That letter was addressed to “Superintendent Belconnen police station, Australian federal police ACT 2616” and dated 9 November 2004.  It was on letterhead of “Jeff Manny Pty Limited” quoting the company’s ABN number.  The text reads:
Dear Sir,
Re:  assault occurred at 61 Oatley court Belconnen on 27th of August 2004
There are some more information has come up:
1.	There is another witness called Joe Craddy.
2.	When I went inside the shop, Mr. Peter Shields charged towards me, and if I defend myself due to muscular reaction, I did not assault him nor had intention to assault him.
3.	If Peter and Warick [sic] Sheilds [sic] claiming that, that was only reasonable force to push me out the shop, why did they still hit me when I was outside the shop in the landing, I was not trying to go in, I was just waiting for my kids come out and let me go.  Indeed once my kids came out of the shop I left without a second interval, of course after I was assaulted
4.	I could not leave alone my kids with Peter Shields and Warick [sic] Shields as I have some concern about Peter Shields pedophilia [sic] activity and indeed there are some cases for Peter Shields has molested my kids and some other kids.  I hereby putting formal complaint with the Belconnen police to investigate Peters Shiels pedophilia [sic] activity especially young boys.
5.	There are cases of molestation of girls in hand of Warick Shields [sic] in the name of sports, and there are cased [sic] of mental and physical assault towards boys, as he hates any boy.
6.	Now something interesting has come up that police should know, on Saturday 10.45 am I had a call from Peter Shield [sic] who told me to leave the town along with my kids, otherwise we will get hurt, I am formally putting another notice with the Belconnen police that is I am worried for the safety of my children.  Please help me I am worried for the safety of my children.
I hope I do not have to leave the town just because Warick Shield [sic] is a policeman and Peter Shields wants me out.
Therefore I am not withdrawing my complaint of assault and in fact I will send copy of my information to DPP and I will resume my complaint in the ACT court to pursue to live peacefully in act as I have done last 20 years and grown to be second richest and biggest business man in Belconnen, I have devoted my life for Belconnen.  I am not going to leave, because Shield [sic] family do not want me here.
I appreciate your help
Yours faithfully
[sgd] J Manny
Jeff Manny
48.	It is this letter that contains the material comprising the first matter complained of.
49.	The letter professes to relate to the topic of the “assault occurred at 61 Oatley court Belconnen on 27th of August 2004”.  The first three paragraphs of the letter can fairly be said to be relevant to the investigation of the assault.  Paragraphs 4 and 5 represent the gravamen of the claim for defamation by the first and second plaintiffs.  Paragraph 6 relates to a further matter of complaint by the first plaintiff.
Absolute privilege
50.	The defendants’ contention that the letter which is the foundation of the plaintiffs’ case is protected by absolute privilege requires that I either not follow or distinguish the High Court decision in Mann v O’Neill (1997) 191 CLR 204.  That case concerned a defamation action based upon a letter sent by the defendant in those proceedings to the Attorney-General taking the view that the plaintiff, a magistrate, was unfit for duty and should be suspended.
51.	In the joint judgment of Brennan CJ, Dawson, Toohey and Gaudron JJ (at 213-4), it was said:
It may be that the various categories of absolute privilege are all properly to be seen as grounded in necessity, and not on broader grounds of public policy. Whether or not that is so, the general rule is that the extension of absolute privilege is “viewed with the most jealous suspicion, and resisted, unless its necessity is demonstrated”.  Certainly, absolute privilege should not be extended to statements which are said to be analogous to statements in judicial proceedings unless there is demonstrated some necessity of the kind that dictates that judicial proceedings are absolutely privileged.
52.	The plurality then considered the position as to statements to prosecuting authorities and said (at 216):
It is not necessary that statements to prosecuting authorities be absolutely privileged.  The function of an authority charged with investigation and prosecution, whether in the courts or elsewhere, is not to ascertain the truth and justice of the matter in a final or binding way, but to decide whether the circumstances warrant the institution of proceedings to ascertain the truth of the matter.  Absolute privilege is not required for the effective discharge of that function.  Nor is it required for complaints inviting investigation of a special magistrate’s ability to discharge the duties of office.

53.	Gummow J concurred that would limit the absolute immunity in respect of defamatory statements to conduct during the course and as part of judicial proceedings in which the party participated.  Kirby J also concurred and observed (at 273):
To afford absolute privilege to any letter however written with whatever motive and however false and malicious the allegations might be, upon an analogy of the initiative proceedings in a court of law or a quasi judicial tribunal is completely unpersuasive.
54.	McHugh J dissented but on the narrow ground that the statements were made about a judicial officer and were made to an appropriate authority for conduct of that alleged to be investigated (see 216-217).
55.	In my view, I am bound to follow the decision in Mann v O’Neill.  The reference to “prosecuting authorities charged with investigation and prosecution whether in courts or elsewhere” does not permit a distinction to be made that the decision is confined, as the defendants submitted, to non-judicial or quasi judicial process.
56.	The defendants referred to what was said by the House of Lords in Taylor v Director of the Serious Fraud Office [1999] 2 AC 177.  In that case, the court was prepared to extend the absolute immunity in respect of out of court statements made by prospective witnesses in connection with judicial and quasi judicial proceedings to officers investigating a crime or possible crime.  In the course of his speech, Lord Hoffman said (at 214):
Approaching the matter on this basis, I find it impossible to identify any rational principle which would confine the immunity for out of court statements to persons who are subsequently called as witnesses.  The policy of the immunity is to enable people to speak freely without fear of being sued, whether successfully or not. If this object is to be achieved, the person in question must know at the time he speaks whether or not the immunity will attach.  If it depends upon the contingencies of whether he will be called as a witness, the value of the immunity is destroyed.  At the time of the investigation it is often unclear whether any crime has been committed at all.  Persons assisting the police with their inquiries may not be able to give any admissible evidence;  for example, their information may be hearsay, but nonetheless valuable for the purposes of the investigation.  But the proper administration of justice requires that such people should have the same inducement to speak freely as those whose information subsequently forms the basis of evidence at a trial.
57.	After saying that this applied to investigators and their exchange of information between themselves and others assisting in the inquiry, Lord Hoffman said (at 215):
I therefore agree with the test proposed by Drake J in Evans v London Hospital Medical College (University of London) [1981] 1 WLR 184, 192:
“The protection exists only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or a possible prosecution in respect of the matter being investigated.”
This formulation excludes statements which are wholly extraneous to the investigation – irrelevant and gratuitous libels – but applies equally to statements made by persons assisting the inquiry to investigators and by investigators to those persons or to each other.
58.	In Westcott v Westcott [2009] QB 407, the Court of Appeal considered whether an oral complaint and subsequent written statement of a complainant of her six-month old son being assaulted by her father-in-law was absolutely privileged and immune from suit.  Ward LJ (with whom Sedley and Stanley Burton LJJ agreed) said (at [34] and [35]):
In my judgment the answer is to be found in Taylor v Director of the Serious Fraud Office.  That establishes that immunity for out of court statements is not confined to persons who are subsequently called as witnesses.  The policy being to enable people to speak freely, without inhibition and without fear of being sued, the person in question must be reported and when reported investigated and, when appropriate, prosecuted, all those who participate in a criminal investigation are entitled to the benefit of absolute privilege in respect of the statements which they make.  That applies whether they are informants, investigators, or prosecutors.  ...
The test proposed by Drake J in Evans v London Hospital Medical College [1981] 1 All ER 715, [1981] 1 WLR 184 received indorsement from their Lordships in Taylor v Director of the Serious Fraud Office.  Thus the question is whether the oral statement made by the defendant and her subsequent written statement can each fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or possible prosecution in respect of the matter being investigated.
59.	The fact is that Taylor v Director of the Serious Fraud Office and Westcott v Westcott involve an extension of the policy underlying absolute privilege which the High Court considered not to be necessary in Mann v O’Neill.  
60.	In any event, in the UK cases, as the citation of Drake J in Evans v London Hospital Medical College [1981] 1 WLR 184 shows, the statement must be such that it “can fairly be said to be part of the process of investigating a crime or a possible crime”.
61.	That cannot be said to be the case in respect of the defamatory material relied upon in this case.  This matter has proceeded on the basis that the defamatory material is a separate discrete complaint against the plaintiffs calling for police investigation.  But, in any event, it is extraneous to the police investigation of the assault.  In Taylor v Director of Serious Fraud Office, Lord Hutton commented, at 321, that the protection proposed by Drake J in Evans v London Hospital Medical College referred to in Lord Hoffman’s speech cited in [60] above, “will not apply to a gratuitous, defamatory remark made by an investigator to a third party or by a third party to an investigator”.
62.	The first three paragraphs of the letter are referrable to the assault allegations.  Paragraphs 3 and 4 could perhaps be an attempt to explain why the first defendant was present on the occasion to “not leave alone my kids”.  That explanation does not appear to me to be sufficient to say that the statements can fairly be said to be part of the investigation into the assault but rather they are a gratuitous accusation against the plaintiffs of activities calling for police investigation.  
63.	The statements upon which the plaintiffs rely for this defamatory import may accordingly be characterised as “volunteered statements in aid of justice”.  As is pointed out in Gatley on Libel and Slander (11th Ed) at 14.34: 
Nowadays, it has come to be held that where a person complains to the police about a crime against him the privilege is absolute but no case so holding appears to have involved a mere ‘informant’ who is not involved in the matter ... though such persons may still claim qualified privilege.
The imputations
64.	Paragraph 4 of the amended statement of claim alleges:
The letter conveyed the following imputations, which were defamatory of the plaintiffs:
First Plaintiff (Peter Sheils):
(a)	That he is a paedophile;
(b)	That he had sexually molested the [first] defendant’s children;
(c)	That he had sexually molested a number of children, especially young boys, apart from those of the defendant;
(d)	That on Saturday 4 December 2004, in a telephone call, he threatened to harm the defendant and his children if they did not leave town.
Second Plaintiff (Warwick Sheils):
(e)	That he cannot be trusted to have children in his control;
(f)	That, under the pretext of sports instruction, he had sexually molested a number of girls.
(g)	That because he hates boys, he had mentally and physically abused boys in his care.
Particulars of imputations:
The imputations are conveyed in particular by paragraphs 4, 5 and 6 of the letter.
65.	Although the defendants by their second further amended defence denied the allegations, no submission was put to me as to why the pleaded imputations were not conveyed by the publication and were not defamatory.
66.	An imputation is defamatory if it is likely to lead the recipient, as an ordinary person, to think less of the person to whom it relates:  Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632 at 638.  The ordinary person has the characteristics of the ordinary reasonable reader (see, for example, Jones v Skelton [1963] 1 WLR 1362 at 1370–1371).
67.	I am satisfied that paragraphs 4, 5 and 6 of the letter convey the imputations pleaded and that in each case the imputation is defamatory.
Qualified Privilege
68.	The defence of qualified privilege arises:
... in circumstances in which on grounds of public policy and convenience, less compelling than those which give rise to absolute privilege, a person may yet, without incurring liability for defamation, make statements of fact about another which are defamatory and in fact untrue.
(Gately on Libel and Slander (11th ed) [14.1]).
69.	In my view, the letter to the authorities in this case attracts a defence of qualified privilege to the defamatory statements made in it.  That is so even if those statements can be said to be irrelevant to the allegations giving rise to the investigation of the assault.  Even if the statements are irrelevant to the assault investigation, it is still necessary for the plaintiffs to show that the defendants were actuated by malice.
70.	In Roberts v Bass (2002) 212 CLR 1, the High Court considered whether the publication of certain electoral material in respect of a candidate for election was actuated by malice.  The occasion was one of qualified privilege.  As far as malice is concerned, Gaudron, McHugh and Gummow JJ said at 30:
[75] An occasion of qualified privilege must not be used for a purpose or motive foreign to the duty or interest that protects the making of the statement. A purpose or motive that is foreign to the occasion and actuates the making of the statement is called express malice. The term “express malice” is used in contrast to presumed or implied malice that at common law arises on proof of a false and defamatory statement. Proof of express malice destroys qualified privilege. Accordingly, for the purpose of that privilege, express malice (malice) is any improper motive or purpose that induces the defendant to use the occasion of qualified privilege to defame the plaintiff. In Browne v Dunn (1893) 6 R 67 at 72, Lord Herschell LC said that malice “means making use of the occasion for some indirect purpose”. Early in the history of the law of qualified privilege – which did not come into the common law until the end of the eighteenth century – Lord Campbell CJ said that malice was “any indirect motive, other than a sense of duty” (Dickson v Earl of Wilton (1859) 1 F & F 419 at 427 [175 ER 790 at 793]) . Similarly, in an action for slander of title, Parke B (Brook v Rawl (1849) 19 LJ Ex 114 at 115) said that “acting maliciously means acting from a bad motive”. “If the occasion is privileged”, said Brett LJ (Clark v Molyneux (1877) 3 QBD 237 at 246), “it is so for some reason, and the defendant is only entitled to the protection of the privilege if he uses the occasion for that reason.” In Horrocks v Lowe [1975] AC 135 at 149 – the leading English case on malice – Lord Diplock said: 
So, the motive with which the defendant on a privileged occasion made a statement defamatory of the plaintiff becomes crucial. The protection might, however, be illusory if the onus lay on him to prove that he was actuated solely by a sense of the relevant duty or a desire to protect the relevant interest. So he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved. ‘Express malice’ is the term of art descriptive of such a motive. 
[76] Improper motive in making the defamatory publication must not be confused with the defendant’s ill-will, knowledge of falsity, recklessness, lack of belief in the defamatory statement, bias, prejudice or any other motive than duty or interest for making the publication. If one of these matters is proved, it usually provides a premise for inferring that the defendant was actuated by an improper motive in making the publication. Indeed, proof that the defendant knew that a defamatory statement made on an occasion of qualified privilege was untrue is ordinarily conclusive evidence that the publication was actuated by an improper motive. But, leaving aside the special case of knowledge of falsity, mere proof of the defendant’s ill-will, prejudice, bias, recklessness, lack of belief in truth or improper motive is not sufficient to establish malice. The evidence or the publication must also show some ground for concluding that the ill-will, lack of belief in the truth of the publication, recklessness, bias, prejudice or other motive existed on the privileged occasion and actuated the publication. Even knowledge or a belief that the defamatory statement was false will not destroy the privilege, if the defendant was under a legal duty to make the communication. In such cases, the truth of the defamation is not a matter that concerns the defendant, and provides no ground for inferring that the publication was actuated by an improper motive. Thus, a police officer who is bound to report statements concerning other officers to a superior will not lose the protection of the privilege even though he or she knows or believes that the statement is false and defamatory unless the officer falsified the information. Conversely, even if the defendant believes that the defamatory statement is true, malice will be established by proof that the publication was actuated by a motive foreign to the privileged occasion. That is because qualified privilege is, and can only be, destroyed by the existence of an improper motive that actuates the publication. 
(Footnotes omitted.)
71.	The plurality further said at 38:
[96] Statements in the cases to the effect that the defendant will lose the protection of the privilege unless he or she had an honest belief in the truth of what that person published must be understood in the light of two matters. First, honesty of purpose is presumed in favour of the defendant. It is for the plaintiff to prove that the defendant did not use the occasion honestly or, more accurately, for a proper purpose. Secondly, in many – perhaps most – cases, a defendant who has no belief in the truth of what he or she publishes will know or believe that it is untrue. It is understandable therefore that judges will often say that qualified privilege is destroyed when the defendant has no honest belief in the truth of the matter but really mean that it is destroyed when the defendant knew that the matter was false. Indeed, as the quotation that we have just set out shows, Lord Diplock does that very thing in Horrocks v Lowe [1975] AC 135 at 149-150. Lack of honest belief in the law of qualified privilege does not mean lack of belief; it means a belief that the matter is untrue. 
[97] Because honesty is presumed, the plaintiff has the onus of negativing it. That is to say, the plaintiff must prove that the defendant acted dishonestly by not using the occasion for its proper purpose. Unless that is kept in mind, there is a danger that reference to the honesty of a defendant will reverse the onus of proof. If the tribunal of fact rejects the defendant’s evidence that he or she positively believed in the truth of what he or she published, it does not logically follow that the plaintiff has proved that the defendant did not believe in the truth of the publication or had an improper motive. Rejection of the defendant’s evidence, combined with other evidence, may lead to the conclusion that the defendant had no belief in the truth of the publication or knew that it was false. But mere rejection of the defendant’s evidence does not logically and automatically lead to any conclusion as to what his or her state of mind was. “[B]y destroying that evidence you do not prove its opposite” (Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1 at 21, per Scrutton LJ). 
72.	In Horrocks v Lowe [1975] AC 135, in his speech, Lord Diplock dealt with a particular way that matter said to be irrelevant to the privileged occasion should be dealt with (at 151):
There may be evidence of the defendant’s conduct upon occasions other than that protected by the privilege which justify the inference that upon the privileged occasion too his dominant motive in publishing what he did was personal spite or some other improper motive, even although he believed it to be true. But where, as in the instant case, conduct extraneous to the privileged occasion itself is not relied on, and the only evidence of improper motive is the content of the defamatory matter itself or the steps taken by the defendant to verify its accuracy, there is only one exception to the rule that in order to succeed the plaintiff must show affirmatively that the defendant did not believe it to be true or was indifferent to its truth or falsity. Juries should be instructed and judges should remind themselves that this burden of affirmative proof is not one that is lightly satisfied. 
The exception is where what is published incorporates defamatory matter that is not really necessary to the fulfilment of the particular duty or the protection of the particular interest upon which the privilege is founded. Logically it might be said that such irrelevant matter falls outside the privilege altogether. But if this were so it would involve application by the court of an objective test of relevance to every part of the defamatory matter published on the privileged occasion; whereas, as everyone knows, ordinary human beings vary in their ability to distinguish that which is logically relevant from that which is not and few, apart from lawyers, have had any training which qualifies them to do so. So the protection afforded by the privilege would be illusory if it were lost in respect of any defamatory matter which upon logical analysis could be shown to be irrelevant to the fulfilment of the duty or the protection of the right upon which the privilege was founded. As Lord Dunedin pointed out in Adam v. Ward [1917] AC 309, 326–327 the proper rule as respects irrelevant defamatory matter incorporated in a statement made on a privileged occasion is to treat it as one of the factors to be taken into consideration in deciding whether, in all the circumstances, an inference that the defendant was actuated by express malice can properly be drawn. As regards irrelevant matter the test is not whether it is logically relevant but whether, in all the circumstances, it can be inferred that the defendant either did not believe it to be true or, though believing it to be true, realised that it had nothing to do with the particular duty or interest on which the privilege was based, but nevertheless seized the opportunity to drag in irrelevant defamatory matter to vent his personal spite, or for some other improper motive. Here, too, judges and juries should be slow to draw this inference. 
The police investigation
73.	The police had taken statements concerning the incident between the plaintiffs and the first defendant on 27 August 2004 from the plaintiffs and a Mr Letcher.  When the letter of 9 November 2004 was received, it was directed to Sergeant Kinloch who was the investigating officer in respect of the assault allegations.  He referred the “further more serious allegations” to Professional Standards.
74.	Sergeant Kinloch’s account of the reconciliation meeting that he had with the first defendant is set out in a report to Professional Standards of 29 November 2004:
From the information obtained which indicated the allegation made by the complainant was unsupported, I scheduled a meeting with the complainant at his business premises on Tuesday 23 November 2004.  This meeting was designed in an attempt to reconcile the allegation.
The meeting took place at 2.00pm, Tuesday 23 November 2004 and continued until 3.30pm.  With the acknowledgement of the complainant, the meeting was recorded on audio tape, however only half of the meeting was recorded as I only took one tape.  During the conversation, the complainant was informed that due to a lack of supporting evidence, the allegation against F/A Sheils would not be proceeding.  The complainant stated he understood this course of action.  Further information obtained during this conversation indicated that the initial complaint was incorrect, as the complainant stated in his letter of complaint that F/A Sheils physically assaulted him.  During the conciliation meeting, the complainant stated that there was no physical contact between himself and F/A Sheils.
The complainant also stated that he would be willing to withdraw all of his complaints, both against F/A Sheils and the criminal allegations he made against both F/A Sheils and his father Peter Sheils, if the AFP would facilitate a meeting between himself and F/A Sheils.  I informed the complainant that this would, in all likelihood, not be a preferred conciliation method.
After discussions with F/A Shirley, on 25 November 2004, I again contacted Mr Jeff Manny and attempted to ascertain if he was still withdrawing all complaints against F/A Sheils.  I also informed him that his preferred conciliation method would not be ascended [sic] to by the AFP.  As a result of this, Mr Manny stated that he would not be withdrawing any allegations, and would instead be forwarding two further allegations concerning F/A Sheils.
75.	This memorandum underlines the impropriety of the defamatory allegations to the occasion on which they were made.  The duty or interest in the first defendant publishing the defamatory matter is clearly secondary to the first defendant’s improper interest in withdrawing the allegations if a meeting were facilitated with the plaintiffs.
76.	Detective Sergeant Ball, who was with the Sexual Assault and Child Abuse Team, spoke to the first defendant by telephone on 14 December 2004.  His notes of that conversation record:
0950 Jeff Manny.  Contacted Jeff Manny on 0418630640 in relation to allegations of Peter Sheils molesting children at his karate school.  Jeff told me that he does not have any evidence and is basing his information on rumour.  He cannot tell me anything about touching the children sexually around areas such as the groin.  He told me he thinks the way that Peter Sheils demonstrates different karate moves on the children is inappropriate. However, cannot explain why they weren’t appropriate. He informed me that his children do not go to the karate school anymore.  He requests I speak to an Ian who lives in Mackellar who may be able to tell me about treatment of his children at the karate school.  Jeff was unable to provide Ian’s surname or contact details.  Jeff states the only thing that he saw was the instructor shouting or yelling at the children which was inappropriate.  He said the only thing that happened to his children was when they were shouted or yelled at - when they shouted or yelled at the children.  
77.	It may be inferred from Detective Sergeant Ball’s evidence that the first defendant had no basis whatsoever for the defamatory allegations.  If that were to be so then the motive for them may be readily seen as an attempt to advantage himself at the plaintiffs’ expense by causing as much harm to them as possible.  Although the first defendant said in his evidence that he was putting the matter to the police only for investigation, that is belied by the positive assertions in the letter that “some cases for Peter Sheils has molested my kids and some other kids”, and his further assertion of “cases of molestation of girls in hand of Warick [sic] Shields [sic]”.  
The evidence given by the first defendant
78.	The first defendant gave evidence of his relationship with the plaintiffs which commenced when his children attended the plaintiffs’ karate school for instruction in 2001.
79.	He said that he also trained at the school and commenced doing so before September 2001.  He said his original relationship with the first plaintiff was that “I loved him like my father”.  He regarded the second plaintiff as one where “I adopted him as my younger brother”.
80.	He gave evidence of a falling out with the first plaintiff at a barbeque in April 2003 when he says he called the first plaintiff “a dirty old man”.
81.	As far as the second plaintiff was concerned, he said that they spent a lot of time together “motor bike riding, swimming, barbeque alcohol drinking, getting drunk, going out to night clubs ...”.  He referred to one occasion where he said the second plaintiff asked him to buy an expensive motor cycle in return for the second plaintiff training him and his sons to a black belt grade in karate.
82.	He claimed that he had observed the second plaintiff touching a young girl in the course of instructing her and that the second plaintiff had an erection at the time.  In retaliation for speaking to him about this, the first plaintiff partnered him in a karate class with a beautiful 18 or 19 year old girl.  The first defendant further claimed that he had taken the second plaintiff to a brothel in the words of the questioner to “help him with his sexual feelings”.
83.	The barbeque at the first defendant’s house that had taken place well prior to the incident at the karate school assumed some significance as all parties recollected the event but gave differing versions of it.  The second plaintiff placed the event in late 2001.  By all accounts, after that event the first defendant ceased to be a student at the karate school.  The first plaintiff said the event occurred in “late 2002 or 3, early 3.  But I’m not sure; it could have been a previous year”.  However, both plaintiffs were adamant that the cause for the first plaintiff to leave the barbeque was not because the first plaintiff had been called a dirty old man by the first defendant.  I accept their evidence that the first defendant was drunk and did insult the first plaintiff and that the insults related to the first plaintiff’s ability both as an instructor and his ability to run a business and not because of the insult that the first defendant says was the cause of the first plaintiff leaving the barbeque.
84.	The first defendant was cross-examined at length.  A number of matters relating to the evidence that he gave on the plaintiffs’ application for summary judgment and his answers to interrogatories were put to him as inconsistent with the evidence that he gave before me.  In their written submissions, the plaintiffs claim these circumstances as proof of “false evidence”.  A number of those matters show inconsistencies and contradictions in the first defendant’s evidence but are not the self-evident falsehoods that the plaintiffs assert.  Nevertheless, they are matters which I take into account in assessing the first defendant’s credit and his reliability.
85.	I also make some allowance for the first defendant’s grasp of the English language.  It is plain that English is his second language.  Certainly some of the criticisms levelled at his evidence by the plaintiffs are blunted on appreciating the possible cultural and obvious semantic ambiguities.  Nevertheless, even making these allowances, I was most unimpressed by the evidence of the first defendant.
86.	I shall now attempt to deal with each of the matters that go to the acceptability of the first defendant’s evidence in the order raised by the plaintiffs.  The first is an issue as to whether the first defendant posted or hand delivered the letter of 9 November 2004.  Whether the letter was faxed or hand delivered seems to be of little moment and although his evidence before me and his answers to interrogatories are inconsistent, to an extent the first defendant explains the inconsistency. 
87.	Equally, that may be said about the criticism concerning the first defendant’s evidence that he was not the only person performing executive duties for the second defendant.  That obviously cannot be consistent with an answer to interrogatories that the first defendant was the only person performing those duties.
88.	Of somewhat greater moment is the evidence that the first defendant’s interview given by Detective Sergeant Ball was “not true”.  The first defendant seemed to be suggesting that Detective Sergeant Ball’s evidence was “corrupted”, that he wanted to “sound good”.  The first defendant also maintained that he had a real estate agent in the room or just outside the room, when Detective Sergeant Ball telephoned.  Not only did Detective Sergeant Ball say that he would not have continued the telephone call in such circumstances, but he rejected every assertion made to him in cross-examination that was put to him about what the first defendant said to him in that conversation.  In a matter that I regard as significant, the first defendant asserted that he invited Detective Sergeant Ball to interview his children.  I reject that assertion completely for the reason given by Detective Sergeant Ball that he first needed confirmation of the allegations from the first defendant before he would do so.  I accept that Detective Sergeant Ball gave his evidence truthfully, reliably and accurately.  I consider that the first defendant’s evidence to the contrary is self-serving and prevaricatory and I do not accept it.
89.	Although the first defendant had not asserted to Detective Sergeant Ball that the second plaintiff had molested a girl under the pretext of karate instruction, he said that this was so in his evidence before me.  There are what appear to be contradictory answers in the evidence he gave in the summary judgment proceedings, his answers to interrogatories and the evidence before me.  I can accept that the fact that he says he could name the girl who he says the second plaintiff had molested does not mean that he would.  However, the first defendant’s evidence on this topic is unsatisfactory and unconvincing and there is no good reason for me to accept it.
90.	The first defendant denied that the only occasion where he had entered the premises was the time of the alleged assault although the second plaintiff had given evidence to that effect and had not been cross-examined about it.  Apart from the time that the first defendant was a student at the karate school, I am not satisfied that there was any other occasion where the first defendant would have observed the plaintiffs in their conduct of the karate school.  
91.	It was put that the first defendant had made a self-contradictory statement to a magistrate at a hearing concerned with an interim protection order some four months after the letter of 9 November 2004.  However, the contradiction was not clearly put and I do not place reliance upon it.
92.	The first defendant admitted that he had sent SMS messages to the second plaintiff the day after the alleged assault on 27 August 2004.  The second plaintiff kept record of these:
•	the reason I talked about you because he said UR flirting with my wife every nite [sic] at karate this is [sic] betrade [sic] our friendship;
•	is it true you are flirting with my wife;
•	where I come from your mates wife is a big no no;
•	u have been a dick.
93.	In light of these messages, it is said that it is inconsistent for the first defendant to say he did not care if his wife had affairs.  I do not agree that is necessarily so.
94.	What I find significant about the SMS messages is that they are quite at odds with the first defendant’s accusation to the police that the second plaintiff was part of the assault on him the previous day.  The first defendant claimed that the messages were in the nature of a mutual apology.  If that is to be accepted, and I am prepared to think that the first defendant thought it to be so, then I count that as a matter going to the sincerity of the first defendant’s belief in making the defamatory allegations concerning the second plaintiff.
95.	The first defendant gave some evidence of his understanding of the application of the restraining order against him that the first plaintiff had obtained.  I understand why he might have been confused and thought it was a mutual restraining order.  It is not a matter which is necessarily adverse to the first defendant.
96.	I also do not make much of the fact that the first defendant wrote in the letter of 9 November 2004, “There are some more information has come up”.  The questioning on this topic is confusing and what the first defendant may have been driving at in using this expression is unclear.
97.	What I do regard as significant is the point that the plaintiffs made that the first defendant said that he had heard from “lots of people” that the first plaintiff was a paedophile.  The only two persons that he was able to name were Mr McFarlane and Mr Nigel Craddy.  Both were called to give evidence in the plaintiffs’ case to establish that neither of the plaintiffs at any time behaved inappropriately towards any child at the karate school.  Mr McFarlane said that the first defendant approached him twice to seek support for a complaint that the plaintiffs used inappropriate language and Mr McFarlane declined to support him.  I have no reason to not accept the evidence of Mr Craddy and Mr McFarlane.  They appeared to me to be truthful and reliable witnesses.   I reject the first defendant’s evidence that he had heard rumours from either of those two witnesses or that there were any rumours at all that could found the belief that he says he held.  I consider that the first defendant has deliberately lied about this aspect to conceal the fact that he had no basis in making the defamatory allegations.  That view is reinforced by the first defendant claiming that he had made allegations to Mr McFarlane in 2003 of the plaintiffs’ sexual misconduct towards children.  On Mr McFarlane’s evidence, that was an attempt by the first defendant to enlist Mr McFarlane’s support for a complaint that the first defendant wished to make about what he said was the plaintiffs’ use of inappropriate language to the students.  He seems to have taken that Mr McFarlane gave evidence before me which denied any claim of inappropriate behaviour on the part of the plaintiffs towards children as a rumour of paedophilia from Mr McFarlane.  Such an understanding as the first defendant demonstrates of the evidence that Mr McFarlane gave is quite perverse.
98.	There was some cross-examination of the first defendant’s duty to report such matters to the police but, while the responses of the first defendant were unconvincing, I can make little of this aspect.
99.	The first defendant was cross-examined extensively about his allegation in the letter of 9 November 2004 that he had a “call” from the first plaintiff “who told me to leave town along with my kids, otherwise we will get hurt”.  I accept that there is an inconsistency in the evidence that he gave on the summary judgment hearing and that one of the two versions that constitutes that inconsistency is not necessarily inconsistent with the evidence that he gave before me.  However, that does not mean that I can in any way accept either aspects of his evidence on this topic.  The first plaintiff gave evidence that such a telephone call did not take place at all.  I accept that evidence.  I regard the allegation as a fabrication by the first defendant made with the intention of giving colour to the allegations he was making about the plaintiffs.
100.	A further letter was written by the first defendant under the letterhead of the second defendant dated 22 November 2004.  That letter alleged “criminal negligence” against the second plaintiff in respect of the premises at which he was carrying on the karate school.  Although he denied it was a “vengeful act”, the letter purported to be copied to the “Canberra Times”, the “Commissioner of the Federal Police” and the “Police Integrity Commissioner”.  His evidence as to his motives and reasons were, to say the least, questionable but I do not need to put this issue higher than that.
101.	My problem with the many contradictory assertions made by the first defendant is that I cannot accept with confidence any one of them.  It also means that the first defendant falls into the category of witness where one can say “I do not believe anything they say”.  It is impossible to reconcile the conflicts his evidence presents.  I do not regard him as a truthful witness and I am not prepared to place any reliance upon his evidence.
102.	Of course, it does not assist by disbelieving (or at least not been prepared to place any credence on) what he says in establishing whether or not he, in fact, believed that the defamatory allegations were true.  What it does mean is that I can find that such a belief has no basis in fact.
103.	The belief is, of course, irrational but in the first defendant’s case, I do not think that the belief he professes can be said to be genuinely held.  The first defendant’s evidence was calculated to say what it suited him to say.  I am satisfied that he understands that he has no grounds for his belief but notwithstanding that, he perversely maintains it.  Insofar as he maintains the belief, I find that he well knew that it had nothing to do with the assault matters that he was complaining to the police about.  I find that he used the defamatory matter to vest his personal spite against the first plaintiff in particular.  He also had the quite improper motive of causing both plaintiffs as much trouble as he could engender by these false allegations (cf Horrocks v Lowe cited at [72] above).  I find that the first defendant was activated by express malice in making the defamatory statements in the letter.
The liability of the second defendant
104.	The plaintiffs’ claim against the second defendant is based on the fact that the letter of 9 November 2004 is under the letterhead of the second defendant.  The first defendant is the sole director and shareholder of the second defendant and the plaintiffs say the second defendant should be held jointly liable for the publication of the letter.
105.	By their defence, it is claimed that the first defendant did not forward the letter on behalf of, or at the request of, the second defendant.
106.	The first defendant gave evidence that he wrote the letter on the second defendant’s letterhead because that was what was available on his computer screen and that when he wrote the letter, he was not acting on its behalf.
107.	I have formed a very adverse view of the first defendant’s credibility and reliability as a witness.  Nevertheless, there is nothing in the text of the letter to indicate that it was written in furtherance of the affairs of the company.  The only possible connection might be in the concluding paragraphs of the letter relating to the first defendant’s intent “to live peacefully in act [sic] as I have done last 20 years and grown to be second richest and biggest business man in Belconnen ...”.  
108.	However, at best it might be said that the use of a company letterhead might well be for the purpose of adding credence to that self-aggrandisement but I do not see how it advances the affairs of the company.
109.	The first defendant referred to Brown v Marron [2001] WASC 100, 20 April 2001, where Owen J dismissed a claim against a company in a defamation action.  In that case, a defamatory letter was, under the letterhead of a company of which the defendant in the action was the managing director, written and signed by him.  Owen J was satisfied with the defendant’s explanation as to how the writing of the letter and use of the letterhead came about and held that the cause of action against the company had not been made out (see at [96]-[100]).
110.	The plaintiffs cannot point to any aspect of the letter that could relate to the affairs of the second defendant.  The letter does not assert the first defendant’s position as shareholder or director.  I also note that an earlier letter concerning the assault was sent under the letterhead of a different company associated with the first defendant.
111.	It is regrettable that the indiscriminate use of company letterhead by a person who is the controlling mind of that company does not visit the consequences upon the company, but unless it can be shown that the use of the company letterhead was the deliberate act of its director, that must be the case.
112.	Nor do what the plaintiffs refer to as “the ordinary principles of vicarious liability” apply.  In a situation like the present, the second defendant cannot be likened to a superior responsible for acts of those for whom it has undertaken responsibility.
113.	Despite my views about the first defendant’s evidence, generally it is for the plaintiffs to satisfy me that the publication of the letter was an act of the second defendant.  The plaintiffs have failed to do so.
The second matter complained of
114.	At a social gathering on 21 April 2007, the second plaintiff alleges that the first defendant published a further defamatory statement about the second plaintiff.  Evidence of this was given by Mr Delfino.
115.	Mr Delfino has an interest in a boxing and fitness centre in Belconnen and those premises were owned by one of the first defendant’s companies.  The karate school run by the second plaintiff was nearby.
116.	On 19 April 2007 at his premises, the first defendant made comments to Mr Delfino about the second plaintiff who had just left the premises.  His evidence was:
Once Warwick had left Jeff Manny turned to me in a hostile way and started berating me.  Telling me that I should not - “You should not associate with this man.  This man is a pig.  He will make trouble for you.  He is nothing but trouble.  He is a paedophile.  He has had relations with my wife.  He is nothing but trouble.  Stay away from him.  He is a pig.”  And he iterated those comments many, many times.
117.	Mr Delfino then says that two days later at the first defendant’s house with a Mr Murray and a Mr Portsmouth being present, Mr Delfino initiated a conversation with the first defendant and asked him to say what had exactly happened with the second plaintiff and what the story was.  His evidence was:
THE WITNESS:  I will try and keep it how he said it.  It’s a little bit vague these days, I’m - he said that Warwick and his father were both paedophiles, that - how did he say it, I’m trying to put it exactly.  He said - he said that they were - they were both paedophiles, that they were pigs.  He said that he’d had relations with his wife.  He said that, “I knew that he was a paedophile and I tried to stop his sexual urges by taking him to a brothel.”  He said, “I’d paid $250 for a girl for him to suppress his sexual urges.”  He said that - - -
[Objection]
THE WITNESS:  He said that he had taken Warwick to a brothel and paid for a girl for him.  And I believe it was $250 he’d paid.  He says but after that that Warwick had told Jeff’s wife that he’d taken him to the brothel ‑ ‑ ‑
[Objection]
MR LITTLEMORE:  Did he say something about speaking to his wife, or that Warwick had spoken to his wife?---He said that Warwick had spoken to his wife.
Yes?---And had told her that Jeff had taken him to a brothel.
[Objection]
MR LITTLEMORE:  Yes.  You keep going?---Where was I?
You were that he said he’d taken him to a brothel?---Yes.
And that Warwick had apparently said something to - well Mr Manny said that Warwick had spoken to his wife about - - -?---That’s right.

- - - taking him to the brothel?---And that had caused his marriage to break up.  He said and since that time his kids were still attending the karate school and he used to go and sit outside the karate school in his car and watch what was going on because he didn’t trust them inside.  And one night he seen that his kids were being molested by, I think he said Warwick, and he went in there to take his kids out.  He said that - that Peter Sheils had objected to him taking the kids out and that Peter had attacked him.  And there was some sort of scuffle or fight.  And that there was an ongoing case where he was suing him, or taking him to court, because he was a paedophile and - - -
118.	When Mr Delfino was cross-examined as to this conversation, it was said to be inconsistent with what Mr Delfino had said which was recorded in an unsworn affidavit.  That unsworn affidavit was produced and at the first defendant’s request was admitted.  Paragraph 15 of that document stated:
On 21 April 2007 I attended the barbeque.  I asked Jeff to elaborate on the allegations he made regarding another tenant.  He said words to the effect:
... Warwick and I were friends and used to go drinking and partying together.  My sons were going to his martial arts classes.  I noticed at the time Warwick cuddling his students and touching them in inappropriate places so I thought it was a good idea to take him to a brothel.  I brought [sic] him a girl for $250 in an attempt t satisfy his sexual urges and stop him touching my kids.
A while after this he told my wife Miko (?) that I had taken him, to a brothel ... it is his fault my wife left me ... I think he was having an affair with my wife ... my kids continued to go to classes with him until one time I saw Warwick touching my kids inappropriately and I went in there and got my kids out and was attacked on the way out by Warwick’s father.
119.	The plaintiffs rely upon this evidence to establish the imputations pleaded in the statement of claim with respect to the second matter complained of.  Those imputations in respect of the second plaintiff (wrongly described as the first plaintiff in paragraph 4B of the statement of claim) are:
(h)	That he is a paedophile
(j)	That he is guilty of the crime of sexual assault upon young girls
(k)	that he represents such a threat to the wellbeing of young girls with whom he comes into contact, that the first defendant took him to a brothel to reduce the risk of his committing sexual assaults on girls.
120.	Having regard to the statements that Mr Delfino said were made to him, both in his evidence and in the unsworn affidavit, I find that they conveyed the imputations pleaded and are defamatory.
121.	The first defendant disputes Mr Delfino’s account of what took place.  The first defendant said that Mr Delfino was present with his daughter and a Mr Murray “who was absolutely off his face with drugs”.  He also said that Mr Portsmouth was in and out of the kitchen bringing food to the table.  His account of the conversation with Mr Delfino was:
He [Delfino] asked me - okay, “I believe you have got Court case with Warwick Sheils.”  I said “Yes.”  He said “What is it about?”  I said, “Defamation.”  He said “Have you accused him as paedophilia?”  I said, “Yes.”  And he said, “How, what?”  I did not answer question from David no more.  I said, “I cannot [say] any more than this.  I got a gag order from court.  Ask them.”  
122.	In cross-examination, he said Mr Delfino’s evidence of this conversation was “partially true” but the first defendant’s account was quite at odds with that given by Mr Delfino.
123.	It was submitted on behalf of the first defendant, that Mr Delfino was an aggressive witness with an apparent grudge against the first defendant.  He was cross-examined extensively on his relationship with the first defendant and as to whether he was permitted to use the premises owned by the first defendant’s company for his gymnasium free of charge.
124.	Taking those matters into account, I still do not have any reason to not accept Mr Delfino’s account of what was said by the first defendant at the social gathering.
125.	I regard Mr Delfino as having given his evidence in a straight forward manner.  The two accounts that he gave of the conversation do not materially differ in content and I accept that the topics in both were the subject of what Mr Delfino says that the first defendant said.  I prefer Mr Delfino’s account of what took place over the account given by the first defendant.  Whilst I accept that Mr Delfino has every reason to not give evidence favourable to the first defendant, and that he was placed in an uncomfortable position given his dealings with the first defendant, he struck me as a witness doing his best to say what had happened.
126.	Confirmation that the content of the conversation was as Mr Delfino described it arises from a later incident where Mr Delfino said that Mr Manny approached him five days later:
Did he say anything to you then?---He came up in a very irate mood and started yelling at me and in an abusive way telling me that - he started with abusive language and I don’t know if I’m supposed to use - - -
Yes, you can repeat it?---He said, “That cunt has started big trouble”, he said, “he has subpoena me”, he says, “You have told him things that I’ve said”, he said, “You can’t tell him things that I’ve said”, he said, “That is between you and me”, he said, “You can’t do that, he is a pig, he is going to make big trouble for you.”  He says, “You have got to ring his solicitor and tell him to - that you will retract the statement, that you made a mistake, that you got it wrong.  You’ve got to make a new statement.  You’ve got to - and if you don’t we will have problems”, he says.  “This man is going to make big problems for you.”
127.	Mr Delfino was not cross-examined as to this conversation.
128.	I do not accept the first defendant’s evidence that he only responded to questions from Mr Delfino or that the conversation that Mr Delfino first deposed to occurred at a time after the social occasion.  The importance of that is that unless the first defendant was responding to questions where it can be said that the first defendant has an interest or a duty, social or moral, to make the communication, and where Mr Delfino has a corresponding interest or duty to receive it, it may fairly be said that no occasion of qualified privilege at common law arises (cf Adam v Ward [1917] AC 309 at 334).
129.	It must be borne in mind that this conversation took place whilst these proceedings were on foot.  Indeed, at that stage, the first plaintiff had given evidence denying the allegation concerning him.  The pleadings in the matter at that time also put in issue the lack of truth in any allegation of paedophilia in respect of the second plaintiff.  In the circumstances, the first defendant could not possibly hold the view that he had either a social or moral duty to make such a communication.  I find that what he said was vindictive and clearly intended to damage the second plaintiff’s reputation.
130.	I am also not satisfied that Mr Delfino initiated the conversation that has given rise to the defamatory matter.  In that respect, the earlier statements that the first defendant had made about the second plaintiff some two days earlier set the scene for Mr Delfino to make a further inquiry.  The statements that the first defendant made were not sought by Mr Delfino and his later request for elaboration does not, in my view, give rise to an occasion attracting qualified privilege at common law.
131.	Section 139A of the Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act) provides:
139A	Defence of qualified privilege for provision of certain information
(1)	There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that—
(a)	the recipient has an interest or apparent interest in having information on some subject; and
(b)	the matter is published to the recipient in the course of giving to the recipient information on that subject; and
(c)	the conduct of the defendant in publishing that matter is reasonable in the circumstances.
(2)	For the purposes of subsection (1), a recipient has an apparent interest in having information on some subject if, and only if, at the time of the publication in question, the defendant believes, on reasonable grounds, that the recipient has that interest.
(3)	In determining for the purposes of subsection (1) whether the conduct of the defendant in publishing matter about a person is reasonable in the circumstances, a court may take into account—
(a)	the extent to which the matter published is of public interest; and
(b)	the extent to which the matter published relates to the performance of the public functions or activities of the person; and
(c)	the seriousness of any defamatory imputation carried by the matter published; and
(d)	the extent to which the matter published distinguishes between suspicions, allegations and proven facts; and
(e)	whether it was in the public interest in the circumstances for the matter published to be published expeditiously; and
(f)	the nature of the business environment in which the defendant operates; and
(g)	the sources of the information in the matter published and the integrity of those sources; and
(h)	whether the matter published contained the substance of the person’s side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person; and
(i)	any other steps taken to verify the information in the matter published; and
(j)	any other circumstances that the court considers relevant.
(4)	For the avoidance of doubt, a defence of qualified privilege under subsection (1) is defeated if the plaintiff proves that the publication of the defamatory matter was actuated by malice.
(5)	However, a defence of qualified privilege under subsection (1) is not defeated merely because the defamatory matter was published for reward.
132.	Mr Delfino said that he, Mr Murray and Mr Portsmouth were present.  Mr Portsmouth gave evidence in the first defendant’s case that he did not hear anything said by the first defendants about either of the plaintiffs.  Mr Murray was not called by either of the parties.  I treat the matter as being a communication to Mr Delfino alone.
133.	Nevertheless, I do not consider that the first defendant has made out the statutory defence.  In particular, I do not consider that, in circumstances where the first defendant has gratuitously raised the subject, a later inquiry by the recipient as to what he meant is sufficient to establish an interest in having the information provided to him.
134.	In any event, I am not prepared to hold the publication to be reasonable on the application of the criteria set out in s 139A(3) of the Wrongs Act.
135.	In particular, although I take the publication to be to one person only, that person had not exhibited any interest in receiving the publication until it was gratuitously foreshadowed.  There is no public interest in the publication of the matter.  The allegations that were made were extremely serious and without any proper inquiry or foundation.  Indeed, it was in circumstances where the first defendant had not raised by way of defence, the truth of the allegations of paedophilia.  The allegations were asserted as fact.  There was obviously no attempt to verify the accusations that I find were made.  Any defence of qualified privilege fails.
The defence of triviality – the first mater complained of
136.	The defendants plead that the circumstances of the publication of the letter were such that the plaintiffs were unlikely to suffer harm.  At the time of the publication, s 126 of the Wrongs Act provided:
126	It is a defence if the defendant establishes that the circumstances of publication were such that the plaintiff was unlikely to suffer harm.
137.	To a similar effect was s 13 of the Defamation Act 1974 (NSW) which provided that it was a defence that the circumstances of publication of the matter complained of was such that the person defamed was not likely to suffer harm (see too, Defamation Act 2005 (NSW), s 33 and Wrongs Act, s 139D).
138.	The construction to be given these provisions was discussed by Moffit P in Chappell v Mirror Newspapers (1984) Aust Torts Reports 80-691 at 68,947: 
For the defence to be available the “circumstances of the publication” must be “such that the person defamed was not likely to suffer harm” (emphasis added).  The words “such that” are important.  The quality of the circumstances of the publication must be the factor which renders it unlikely that the person defamed will suffer harm.  Whereas a defamatory imputation is actionable per se, without damage (sec. 8-9), so that a defendant cannot defeat an action even if he were able to prove that there was no actual damage, the defence under sec. 13 is directed entirely to the circumstances of the publication.  It does not change the general law so the defendant can raise an issue on the probabilities whether there is in fact harm caused to the person defamed.  The issue is directed to the quality of the publication in respect of its proneness to cause harm.  The words of sec. 13 are “was not likely to suffer harm” and not “did not suffer harm” (Meaning “probably did not suffer harm”).  The quality of the circumstances of the publication determines at the moment of publication whether it is or is not actionable; ...
A little further on Moffit P added:
In construing the words “the circumstances of the publication”, it is important that full force be given to the words “of the publication”.  There should not be substituted a mere inquiry whether “in all the circumstances” the plaintiff will probably not suffer harm.
139.	The decisive factor is the circumstances of the publication itself.  The defendant must show that in those circumstances, the person defamed is not likely to suffer harm.
140.	In Jones v Sutton (2004) 61 NSWLR 614 at 624 [45] and 625 [49] per Beazley JA, the NSW Court of Appeal held that it was for the defendant to show “the absence of a real chance” on “the absence of a real possibility of harm” citing Tillmanns Butcheries Pty Ltd v Australasian Meat Industries Employees’ Union (1979) 42 FLR 331 at 339 and 347.
141.	The particulars given by the defendant were:
(i)	The matter complained of was addressed in the manner referred to in paragraph 2(b) above [ie “Superintendent” of “Belconnen police station” “Australian Federal Police”];
(ii)	It was likely that a letter so addressed would come into the hands of the senior police officer at the Belconnen Police Station (but it is not admitted that it was in fact so received);
(iii)	It was likely that the only persons who would, if the letter did come into the hands of the senior police at the Belconnen Police Station, subsequently learn of the contents of the letter would be those police officers, if any, assigned by the officer referred to in subparagraph (ii) to investigate the allegations contained in the letter (but it is not admitted that anyone did so learn);
(iv)	Police officers are trained not to form any views about allegations until those allegations have been investigated and the investigation is complete;
(v)	Police officers are further trained to consider at the conclusion of such an investigation whether a person against whom allegations are made ought reasonably be suspected of the commission of a criminal offence and, accordingly, charged with the commission of that offence;
(vi)	Accordingly, it was not likely that the matter complained of would cause any person to think the less of the Plaintiffs.
(vii)	Having regard to the nature of the language used in the matter complained of, it was inherently unlikely that the matter complained of would result in the Plaintiffs or either of them suffering any harm of any kind.  In particular, the language in the matter complained of was very informal.  Further, the essence of the letter was, explicitly, the provision of information enabling investigation by the police.  It is likely that investigation would have been carried out on the basis set out in subparagraphs (iv) and (v) above.
142.	Given the serious allegations that were made, it had to be a matter of certainty that the letter would instigate inquiries into those allegations.  It may be noted that the letter was not directed to a named person or to limit its publication to any specified police officer.  It could be expected that the allegations would come to the attention of police officers or clerical staff.  The assertion that police officers are trained not to form any views about allegations until they have been investigated and the investigation is complete does not mean that there is no likelihood of harm if a serious defamatory allegation is made.  The issue of whether the matter complained of would cause the persons to whom it is published to think less of the person defamed is a matter relevant to damages not to the likelihood of the harm.  Damage to reputation is presumed if the defamatory statement is proved (Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 507).
143.	The defence of triviality has not been made out in respect of the first matter complained of.
The defence of triviality – the second matter complained of
144.	At the time of the making of the oral statement to Mr Delfino on 21 April 2007, s 126 of the Wrongs Act had been replaced by s 139D.  That section, in almost the same terms, provided:
139D	It is a defence to the publication of defamatory matter if the defendant proves that the circumstances of publication were such that the plaintiff was unlikely to sustain any harm.
145.	The same construction and principles governing the operation of s 126 apply to s 139D.
146.	The particulars given by the defendant to support this defence are:
(i)	The only occasion on which the First Defendant spoke to David Delfino at Flyn [sic] on or around 21 April 2007 was a social occasion, being a barbeque at the residence of the First Defendant attended only by the First Defendant and his three children, David Delfino and his daughter, Todd Portsmouth and John Murray;
(ii)	The occasion was convivial and was attended by the consumption of a reasonable amount of alcohol on the part of the adults present;
(iii)	If the oral statement was made (which is denied) it was not made in the presence of Todd Portsmouth;
(iv)	John Murray was adversely affected by alcohol throughout the occasion.  If the oral statement was made (which is denied) he was unlikely to understand or later remember any such statement or to take any such statement seriously or to think the less of the Second Plaintiff by reason of the statement;
(v)	If David Delfino is the source of the allegation as to the oral statement, it might reasonably be inferred that he was unlikely to think the less of the Second Plaintiff by reason of the alleged oral statement;
(vi)	The First Defendant otherwise relies on the circumstances in which it is proved the alleged oral statement (which is denied) was made if it so proved.
147.	I have indicated that I propose to treat the occasion as involving only what the first defendant said to Mr Delfino.  Although Mr Delfino said that Mr Murray was present, he was not called and I am not satisfied that if he was present, he attended to what was said.  Mr Portsmouth was called by the first defendant and said he did not hear any conversation between the first defendant and Mr Delfino about the plaintiffs.  I accept that evidence.
148.	However, I do not accept that the conversation took the form that the first defendant gave in evidence and I accept that what was said by the first defendant included all of the matters to which Mr Delfino deposed.  The defence of triviality should be viewed against these findings.
149.	It is significant that a few days after the conversation, Mr Delfino approached a former partner of the second plaintiff as to whether she “knew anything about him being a paedophile or if he had those tendencies ...”.  In light of this evidence, it is clear that Mr Delfino was, in fact, likely to think less of the second plaintiff.  Moreover, I am satisfied that Mr Delfino understood and appreciated the slur that the first defendant intended to cast on the second plaintiff’s reputation.  In these circumstances, the first defendant has not proved that the circumstances of the publication were such that the second plaintiff was unlikely to sustain any harm.  
150.	I also take as an aggravating aspect of this publication that the second plaintiff had these proceedings on foot denying the allegations of molestation of young girls.  To those allegations, the first defendant had not asserted truth by way of defence to the proceedings and in fact had made no further inquiries to support the allegations.
151.	In all the circumstances, I do not consider that the first defendant has made out the defence that the plainly defamatory allegations were made on an occasion of qualified privilege.  
Damages
152.	Damages are to be awarded because of the invasion of the plaintiffs’ rights by the publication of the defamation.  In Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118 at 150, Windeyer J said:
It seems to me that, properly speaking, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation, that is simply because he was publicly defamed. For this reason, compensation by damages operates in two ways—as a vindication of the plaintiff to the public and as consolation to him for a wrong done. Compensation is here a solatium rather than a monetary recompense for harm measurable in money. The variety of the matters which, it has been held, may be considered in assessing damages for defamation must in many cases mean that the amount of a verdict is the product of a mixture of inextricable considerations. One of these is the conduct of and the intentions of the defendant, in particular whether he was actuated by express malice. Yet in the abstract the harm that a plaintiff suffers cannot be measured by, nor does it necessarily depend at all upon, the motive from which the defendant acted or upon his knowledge or intentions. These, however, have always been regarded as important in estimating damages.
153.	The entitlement is to compensation for the harm done or likely to have been done to the plaintiffs’ reputation and that harm is presumed to follow (Reader’s Digest Services Pty Ltd v Lamb at 507).
154.	In Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44, Mason CJ, Deane, Dawson and Gaudron JJ referred to the purposes of damages:
Specific economic loss and exemplary or punitive damages aside, there are three purposes to be served by damages awarded for defamation. The three purposes no doubt overlap considerably in reality and ensure that “the amount of a verdict is the product of a mixture of inextricable considerations” (Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR at 150). The three purposes are consolation for the personal distress and hurt caused to the appellant by the publication, reparation for the harm done to the appellant’s personal and (if relevant) business reputation and vindication of the appellant’s reputation (Carson (1991) 24 NSWLR at 296-299). The first two purposes are frequently considered together and constitute consolation for the wrong done to the appellant (Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR at 150;  Coyne (1991) 172 CLR at 216;  John Fairfax & Sons v Kelly (1987) 8 NSWLR 131 at 142;  McCarey v Associated Newspapers Ltd [No 2] [1965] 2 QB at 107). Vindication looks to the attitude of others to the appellant: the sum awarded must be at least the minimum necessary to signal to the public the vindication of the appellant’s reputation “The gravity of the libel, the social standing of the parties and the availability of alternative remedies” are all relevant to assessing the quantum of damages necessary to vindicate the appellant (Fleming, Law of Torts, 8th ed. (1992), 595). 
155.	At the time of the publication of the letter, s 136 of the Wrongs Act provided:
136	Damages—defamation 
In deciding the amount of damages to be awarded, a court must—
(a)	Ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded;  and
(b)	Take into account the ordinary level of general damages component in personal injury awards in the ACT.
156.	That section was replaced in the 2006 amendments to the Wrongs Act by s 139E.  That section provides:
139E	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.
157.	It is that section that applies to the oral defamation.
158.	Reservations about the practicality and efficacy of taking into account the ordinary level of general damages in personal injury awards have been expressed (see, for example, Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at 351 [71]–[76] per Hayne J).  What is stressed is that damages for defamation “must stand in a proper relationship with awards for the non economic consequences of personal injury” (see at [74]).
159.	The two aspects of compensation stressed in the present matter are the personal distress and hurt caused to the plaintiffs and the vindication that they seek for the defamation.
Aggravated damages
160.	The plaintiffs claim that the compensatory damages to which they claim to be entitled should be increased because the defendants’ conduct lacked bona fides or is improper or unjustifiable (Triggell v Pheeney (1951) 82 CLR 497).  In that regard, the plaintiffs are able to refer to the express malice demonstrated by the improper purpose for which the allegations in the letter were to be used and the consciousness of the plaintiffs’ denial of the allegations when the oral statement was made.  The plaintiffs can also point to repetition of the allegations in the summary judgment proceedings and they seek to rely upon further repetition in these proceedings.
161.	In the present case, the first defendant has not apologised or withdrawn the allegations he has made.  Although this factor does not strictly aggravate the damages, it evidences the first defendant’s desire to hurt the plaintiffs (Carson v John Fairfax at 66).  In the proceedings before Connolly J, the first defendant has persisted in allegations that are without any foundation whatsoever.  I find also that the reasons for advancing such allegations are to give some credence to other allegations that the first defendant wished to pursue at the time that they were made.  I have particular regard to the impropriety of making the allegations in the first place.  It is the first defendant’s persistence in continuing and his refusal to retract them that impacts on the assessment of damages.
162.	It seems to me in the present case that it is appropriate to factor into the award of damages the conduct of the first defendant and his animosity to the plaintiffs as increasing the subjective mental pain and distress suffered.  There can be no other conclusion than that the first defendant was malicious and vindictive in making the assertions that he did about the plaintiffs.
The first plaintiff – damages 
163.	The first plaintiff’s evidence as to the effect of the allegations on him is:
Have you next seen a letter dated 9 November 2004, which is the first matter complained of in these proceedings?---Yes.
When you read that, what was your reaction?---I had a number of reactions, the first was absolute horror.  The second was very great anger.  I felt terribly worried.  I had ceased practice by then.
As a lawyer?---As a lawyer.  The only thing left to me is a good name and I value it, and I really was concerned that he was going to voice this all around and, of course, it going to the police, I was concerned because so many of them know me and I know so many of them.
... 
Did you ever call upon your son at a police station?---Yes, I used to go to the - well, when he was in the Barton College, where I used to lecture and - well, not so much lecture as help, and sometimes lecture, I used to go to the Barton College two times a week, at least, to have lunch with him.
In what years?---Well, about - probably the two years before that.
Before 2004?---Before August 2004, and, five, six - probably for two years after that.
Thank you.  Now, when you read that letter of 9 November, to the superintendent at Belconnen, what to you was the accusation being made against you?---That I am a paedophile and that I molest children and I am one of the lowest of the low people, as I regard them.
Can you conceive of a worse accusation to be made against you?---No.  To me, I have a particular hatred of paedophiles, because I had trouble with them as a child.  I really, really, have a terrible feeling when somebody talks about paedophilia.
When you were accused of it, in this letter, aside from being angry and horrified, was there any other reaction you immediately had?---Yes, I was terribly worried about the effect of it on Warwick and, to me, I mean it made me feel sick and it - it still does, if I see - have to look at that letter.
It’s not got better over the two years?---No, it hasn’t got better, it’s got worse.  It’s - it made me - I suppose one of the things it made me do, is wish we were in an era of 150 years ago when I’d have gone and got a weapon and killed him.
Is there a word of truth in any of the accusations made against you, in that letter of 9 November 2004?---No.
... 
Did you have any fear, when you read the letter and noted to whom it was addressed, about what publication would be consequential?---I knew perfectly well that it would go on to the PROMIS system.
What is the PROMIS system, P-R-O-M-I-S?---Yes.  That’s a system of police computer recording of complaints and crimes and it doesn’t just cover crimes proved, it covers all complaints and all investigations of complaints, and it is disseminated.  Not everybody has access to every complaint, there are restrictions, but it would go, for instance, to the sergeants at Belconnen.
...
Now, will you please assume that what the court is interested in is what was your belief as to who would read it?---Right.  It would go to the child protection section.  It would go to the sexual offences section.  It would go to the senior officers in the recruit instruction parts of the college because they were Warwick’s seniors.  He was an instructor there and they had to know it.  It would go to many of the other people who had anything to do with such investigations and - - - 
Have you seen - - - ?---there is a grapevine in the police force which would mean it would be disseminated pretty widely, I feared, amongst people who knew us. 
...
Has seeing those emails and the names on them caused you to fear the extent of publication?---Yes, I have counted at least 13 individual names and about four different sections. 
Thank you.  Now, you’ve told his Honour that you have been back to the college and been to police stations since reading that letter, correct?---Yes. 
Did you do so with any sense of trepidation or fear?---Yes. 
...
Have you, as it were, lost sleep over it?---Yes.  Yes, if I think about it ‑ and I try not to at night, but if I think about it at night it can keep me awake until 4 or 5 in the morning. 
How often does that happen?---Once or twice a fortnight.  It pervades the whole of our life because of the fact that we are involved in the dojo all the time and this has to be involved in how old the students are.
164.	It can be seen from this extract of the first plaintiff’s evidence that there was a “grapevine” in the police force in respect of which he feared the allegations would be widely disseminated.  He said that from the emails produced on subpoena, he could identify 13 individual police officers from four police stations who would have seen the letter.  I accept the latter as a reasonable deduction made by the first plaintiff from the emails.  I accept his “fear”, but not its reality.  There is nothing that I draw from the evidence of the police officers called in this matter that cause me to think that there would be such a widespread dissemination of the information that the first plaintiff feared.  
165.	The AFP system for recording information for case management purposes (PROMIS) is a secure system which is designed to prevent unsanctioned access.  Mr Castle, a retired Superintendent of police, gave evidence of a “grapevine” in the Canberra ACT or AFP police.  His evidence was:
And is it your experience that matters that are meant to be confidential do nevertheless get passed along the grapevine?---Yes, unfortunately they do.
I won’t ask you whether you heard anything about either of the plaintiffs on the grapevine, I’m just speaking about the existence of the thing?---In general terms, yes, that is correct, unfortunately things do get passed along what is commonly known as the grapevine.
166.	Whilst I accept that evidence, I am not satisfied that it would apply in the case of the first plaintiff.  The fact is that the first plaintiff was not even interviewed in relation to the allegations made in respect of him.  I would discount any grapevine effect in his case.
167.	Mr Castle also gave evidence of the good character of the first plaintiff as a decent and honourable man who was very interested in the course of justice.  I accept his evidence.  He also gave evidence of a particular instance involving the first plaintiff looking after children.  Evidence of good character is presumed and evidence of general good reputation may be admitted.  Evidence of particular facts to support that reputation is not admissible (Anderson v Mirror Newspapers Ltd (No. 2) (1986) 5 NSWLR 735 at 737G).  Accordingly, I disregard the evidence of the particular instance but otherwise give full effect to the favourable character evidence.
168.	As well, the hurt to the feelings of the first plaintiff was exacerbated by the evidence that the first defendant gave before Connolly J when the plaintiffs applied for summary judgment against him.  In that application, the first defendant said that he had seen the first plaintiff touching a child in the region of his genitals and that he saw the first plaintiff molest children many times, that he had seen the first plaintiff molest his (the first defendant’s) own children.  Evidence to a similar effect was adduced in cross-examination but was not part of the examination-in-chief of the first defendant.  What was said before Connolly J would aggravate the damages to which the first plaintiff was entitled.
169.	It is plain to me that the assertions made by the first defendant about the conduct of the first plaintiff are false and have no foundation in fact.  I accept that the first plaintiff was further distressed and hurt by what I regard as baseless and insupportable allegations and the fact that the first defendant persisted in making them in the proceedings for summary judgment.
170.	Before I had completed drafting my reasons in this matter, the first plaintiff died.  As can be seen from these reasons, the matter was complicated by a protracted hearing, amendments to the original claim to include a further claim, reliance upon a letter produced under subpoena that required leave to be used in these proceedings and an amended defence raising an issue of absolute privilege.  I regret not being able to deliver this judgment before the first plaintiff’s death.  Section 122 of the Wrongs Act provides:
122  No cause of action for defamation of, or against, deceased persons
A person (including a personal representative of a deceased person) cannot assert, continue or enforce a cause of action for defamation in relation to—
(a)	the publication of defamatory matter about a deceased person (whether published before or after his or her death); or
(b)	the publication of defamatory matter by a person who has died since publishing the matter.
171.	I will not accordingly assess damages in respect of the first plaintiff’s claim but, as can be seen from my reasons, the first plaintiff was entitled to damages for the defamatory matter and I would have found an entitlement to aggravated damages.
The second plaintiff – damages
172.	The second plaintiff’s claims hurt to his feelings by reason of his belief that the letter sent by the defendants ruined his career in the police force.  He was not able to say when he first read a copy of the letter but he considered that the letter would have been read by those whose hands it passed through and by other police officers.  He said he was “devastated” and “furious” that it had been done without him having any recourse.  He said he was fearful of its impact on him, those who knew him and his karate school business.
173.	His evidence was:
Are you able to say what your feelings were when you did first read
it?---Your Honour I was immediately fearful of my future in the AFP.  I wondered if I was going to get a tap on the shoulder “Clear out your locker until such time as this is finished or you’re finished”.  I was fearful of the impact on the dojo, my family, on my friends at the dojo, the other instructors there.
You’ve spoken of fear, did you have any other emotional response to
it?---I felt sick with anger, sick with impotence that I couldn’t say anything to anyone, couldn’t say “This is just so wrong”, that this is - I was worried I’d lose my job, I was worried things would just dissipate, you don’t know who’s going to believe it, who’s not going to believe it.  You know as a professional policeman that an allegation like this comes in, it has to be treated very seriously.  If I was to receive a complaint about someone, even a friend of mine, I would have to treat it seriously.
174.	I accept the significant impact that knowledge of the letter had upon the second plaintiff.
The claim for economic loss
175.	However, the issue of the actual impact that the letter had upon the second plaintiff’s economic circumstances is not so evident.
176.	In October 2004, the second plaintiff had been approached by Mr Mitchell who, at the time, was his team leader in Recruit Training Learning and Development with the AFP and a recommendation made for the second plaintiff’s transfer to Professional Standards.  There was an advantage to such a transfer by increasing the second plaintiff’s investigative skills as well as enabling him to qualify for a loading component of his salary that was not available in Recruit Training.
177.	The acting Director of Professional Standards at the time, now Superintendent O’Shaughnessy, said he would have accepted that recommendation at the time had there not been an outstanding complaint against the second plaintiff that had been brought to his attention.  Superintendent O’Shaughnessy understood that the outstanding matter was potentially “a civil matter”, “something that had come up in relation to a judo or karate thing or something to do with children...”.  It is plain from Superintendent O’Shaughnessy’s evidence that it was the fact of an outstanding complaint, not its content, that prevented him from effecting the transfer.
178.	In his explanation for not appointing the second plaintiff to Professional Standards, Superintendent O’Shaughnessy said to the second plaintiff that should the matters be cleared, he would be reconsidered.  Although Superintendent O’Shaughnessy was only acting director for the period from November to December 2004, he said that there were vacancies in Professional Standards whilst he was still there and he had no knowledge of any further applications for transfer made by the second plaintiff.
179.	The evidence given by Superintendent O’Shaughnessy falls short of establishing a causal relationship between the defamatory matter and the second defendant not being transferred to Professional Standards.  The evidence indicates that the existence of an allegation, not its content, was the cause.  Further, in the absence of any evidence that the complaint constituted a continuing cause preventing such a transfer, I am not able to find that the defamatory matter had an actual effect on the second plaintiff’s career in the police force.
180.	The second plaintiff also maintained a belief that the complaint against him had not been finalised.  That appears to be based on a comment made in a report by Detective Sergeant Ball to his supervisor on 15 December 2004.  After reporting the conversation that he had with the first defendant, Detective Sergeant Ball said that further investigation was not necessary.  He added, “The investigation will be reopened if further information is provided that warrants further police attention”.
181.	I do not regard that as an open finding.  In fact, a document from the PROMIS system was put in evidence.  That document recorded as a “Case Status Change” the PROMIS reference number for the case investigated by Detective Sergeant Ball as finalised.  The date that document was printed was 13 January 2005.  The case identification number is the same as the Professional Standards Authorisation to Detective Sergeant Ball to conduct the investigation.
182.	The second plaintiff gave evidence of his belief on the effect on his career in the police force:
My belief, your Honour, is the complaint hasn’t been resolved, it hasn’t been closed and has ruined my career.  I no longer get invitations for transfer, I haven’t been able to get a promotion, I haven’t been able to get a course, I haven’t been able to go anywhere but where I am.
183.	Although the second plaintiff said that he was embarrassed and angry as a consequence of the offer of transfer being withdrawn, that was not only referable to the defamatory matter.  The second plaintiff said:
Well, it was acutely embarrassing to tell people you’ve been offered this promotion and then to have to tell the same people that the offer’s been withdrawn because there were complaints made against you.  I was embarrassed, I felt like a fool, I was angry about it because the one complaint I knew was a complete fabrication and completely untrue.  The other complaint I had no idea what it was.
184.	The complete fabrication referred to was the allegation of assault which was encompassed in the “civil matter” referred to by Superintendent O’Shaughnessy. 
185.	The second plaintiff described a number of subsequent applications for positions in the Australian Federal Police:
•	June 2005, a band 6 position in Professional Reporting Standards;
•	June 2006, a sergeant’s position in the Surveillance Team;
•	June 2008, a surveillance team member position;
•	October 2008, team member in ACT Region Intelligence;
•	November 2008, team member, Territory Investigations Group;
•	November 2008, higher duties within the Learning and Development College.
186.	It is the second plaintiff’s belief that the defamatory allegation has prevented his successful application for these positions and for numerous educational courses for which he has unsuccessfully applied.  Although I would not presume to challenge this belief, which I accept that the second plaintiff honestly holds, I am not able to find that his belief has any foundation in fact.
187.	Moreover, the belief may have crystallised into a view about the effect of the defamatory matter, but its original genesis could only relate to the complaint concerning the allegation of assault, unjustified as that may have been.
188.	The two other police officers called whose evidence might bear upon this aspect of the second plaintiff’s claim, Mr Mitchell, a retired police officer and Mr Castle, a retired Superintendent of Police, do not acknowledge a causal effect of the defamatory allegation as alleged by the second plaintiff.  I am not satisfied that the second plaintiff has established a consequential economic loss following from the publication of the first matter complained of.
189.	In respect of the second matter complained of, I accept that when the second plaintiff learnt about it from the person who Mr Delfino sought confirmation from, that he was upset, shocked, angered and embarrassed.
Assessment of damages
190.	In assessing the second plaintiff’s damages in respect of the first matter complained of, I have regard to the serious nature of the defamation alleged and the considerable distress that it has caused the second plaintiff.  I accept that he has suffered severe hurt to his feelings, his self-respect and sense of dignity.  Although the publication and republication was to a relatively small number of police officers (the evidence identifies 12 possible persons), they are fellow employees and colleagues.  On the other hand, the second plaintiff has not established a causal effect on the first plaintiff’s employment other than the first plaintiff’s belief in it having an effect.
191.	I was referred to a number of cases where the publication was to a limited number of persons:  for example, Trantum v McDowell [2007] NSWCA 138 and Zarth v Williamson [2006] NSWCA 246.  Damages awards of $50,000.00 and $80,000.00 respectively were not disturbed by the NSW Court of Appeal.  In the former, the publication to 16 tenants imputed dishonesty and incompetence to the building manager.  In the latter, the oral publication of imputations of negligence by solicitors to a mortgage company, the defendant’s receptionist and an officer of the Legal Services Commission.  In Martin v Bruce [2007] NSWDC 264, a decision which considered both these cases, Gibson DCJ awarded $25,000.00 including aggravated compensatory damages to a club secretary/manager for a defamation imputing dishonesty which was published to four persons.
192.	In all the circumstances, I consider that the appropriate award in respect of the first matter complained of is the sum of $20,000.00 which includes the aggravated compensatory damages.  That sum is to include interest from the date of publication to the date of this judgment.  The factors to be taken into account are described by McHugh JA (as he then was) in John Fairfax & Sons Ltd v Kelly (1987) 8 NSWLR 131 at 143.4.  In the present case, the plaintiffs claim 2% and I see no reason not to apply that rate.  On my calculation that would be an amount of $22,200.00 but I will give the parties liberty to apply in respect of this calculation.
193.	In respect of the second matter complained of, I have found that the publication was to only one person.  That is a most significant restraining factor on the damages to be awarded.  In the circumstances, including the aggravating matters to which I have previously referred, I award $4,000.00.  The second plaintiff does not seek interest on this award.
194.	
I will hear the parties as to costs.

I certify that the preceding one hundred and ninety four (194) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date:	11 June 2010 

Counsel for the plaintiffs:	Mr S Littlemore QC with Dr R O’Hair then 
	Mr D Fagan SC with Dr R O’Hair
Solicitor for the plaintiffs:	United Legal
Counsel for the defendants:	Mr A Leopold then Ms L McCallum SC then 
	Mr C Dibb
Solicitor for the defendants:	Ken Cush & Associates then
Capital Lawyers then Steven James Fraser, Corporate Counsel
Date of hearing:	7 November 2007, 30 June 2008, 1 July 2008, 15-18 December 2008, 5, 6 May 2009, 10 August 2009  

Date of judgment:	11 June 2010