Neville v Taylor[1996] QDC 94

Before Robin DCJ

[B.E. Neville v. L.J. Taylor]

BETWEEN:

- and -

REASONS FOR JUDGMENT

BETWEEN:

AND:

REASONS FOR JUDGMENT - ROBIN D.C.J.

Delivered the 18th day of April, 1996

In this unusual section both the plaintiff's claim and the defendant's counter claim are for defamation. Both are entitled to succeed. It is regrettable that two commercial men should have got themselves to this situation, but I suppose that each will gain some satisfaction from having his reputation vindicated. My impression is that both the defendant (transcript pp. 133-34) and the plaintiff (transcript pp 243-44) failed to act with mature judgment, and had come to regret that before knowing what the outcome of the trial would be.

The defendant defamed the plaintiff in a letter of resignation from a corporate entity which the plaintiff controlled, dated 19th June, 1992.

The corporate entity held a valuable general agency from the AMP Society to sell its products. The defendant was employed by it as a “general agent's agent”; in the usual course he had no cause to be in direct contact with the society.

The letter is as follows:

Exhibit 2

When questioned about the surplusage in the letter over and above advice of the resignation, the defendant said:

The defamation the plaintiff complains of is the publication of the letter to Mr Dunger of the AMP Society (it being sent in an envelope marked for his attention alone), and the publication to Mr Tornabene. No copy of the letter was sent to Australian Casualty and Life. It seems that the parties' (the defendant's in particular) contacts with that insurer were too limited to be of significance. Mr Tornabene was the principal of the entity which operated the Lake Group Australia before the plaintiff's interests took over. Ill health led him to break up and dispose of his insurance business in 1991. The plaintiff took over as from 1st January, 1992, from when he had full managerial control. The change in ownership and control was effectively complete, although the plaintiff's interests did not make full payment until close to the end of 1992, when funds from the AMP Society were available. One of Mr Neville's legitimate concerns regarding the defendant's publication to the society was that it might prejudice the provision of the very large sum need to pay out the Tornabene interests. On the evidence, the plaintiff knew nothing of this. Mr Tomabene's wife or daughter continued to sign cheques which the defendant and other agents or associates received, which led him to hold the reasonable belief that Mr Tornabene remained a silent partner. That is the explanation for a copy of the letter being sent to him.

Clearly, the plaintiff's taking over was a black day from the defendant's point of view. Differences had arisen between the two of them previously; indeed, the plaintiff had sacked the defendant; he had little trouble getting reinstated when he went over the defendant's head to Mr Tornabene. The parties differed as to the real and/or stated reason for the sacking, the plaintiff asserting it was the poor quality of the defendant's sales, which led to policies sold “falling off the books”, so that the AMP Society “clawed back” commissions with unacceptable frequency, the defendant asserting it was because pressure of work led to his failure to put up decorations for a celebratory function (it is to be observed in a context where virtually everyone's earnings were dependant on commission and what were called “Rah! Rah!” meetings designed to maintain a positive, optimistic approach were frequent and compulsory).

I accept the defendant's evidence that, as alluded to without any specificity in his letter, there were issues which had arisen between me parties causing him to react in the ways described in the letter. Most of these had to do with the plaintiff's “client base” or “client register”, although not all: one concerned me failure of the plaintiff's efforts to obtain redress for the defendant when another agent appeared to have appropriated some of his business, contrary to the principles accepted in the industry; in this respect, the evidence shows that the plaintiff did all that might have been expected of him.

An agent's client register is a valuable asset. Not only is it a customer list containing valuable information which enhances the prospect of the agent deriving more business, it also secures the agent's entitlement to follow-up commissions in the years after a policy is sold. Registers may be sold for substantial amounts of money; agents have every incentive to maintain and add to their registers. Friction occurred between the parties with respect to the defendant's register on a number of occasions. One concerned the introduction by the defendant of a relative of his as a new Lake Group agent; the new agent did not last long and the defendant claimed that he was entitled to take-over the register which had been built up and added to his own; Mr Neville disagreed. At a sensitive time, the policy changed, so that in similar circumstances any agent in the defendant's position would have got the benefit. The plaintiff says the defendant was the last person to miss out; Mr Taylor says the policy was the same at material times and that he was discriminated against. Another incident concerns the transfer from Mr Taylor's register against his will of a valuable client, Mr Daboodi. Another concerns Mr Taylor's purchase of the registers of Mr and Mrs Smith. Although enjoying control of Mr Smith's register for some time and doing a good deal of work on it to clear up “outstandings”, the defendant became unable to pay $6,000.00 of the purchase price, he says because of a family crisis which produced a sudden demand on his funds. In the end, Mr Taylor was docked some months' commission which he thought he had earned through his work on Mr Smith's register, and which he says he was entitled to retain, by a “clawing back” procedure in following months. Mr Taylor took the view this amounted to breach of an agreement by Mr Neville. The last such difference, which precipitated the plaintiff's resignation, concerned the register of Mr Smith's wife. This was Mr Neville's cross-examination:

Mr Collins objected that this last detail happened too late to be relevant to the defamation.

It is not necessary to go into the merits of all or any of those differences concerning the defendant's client register. I am satisfied that the plaintiff held deeply felt grievances against Mr Neville in consequence of them, and that in consequence he genuinely came to hold the beliefs described in his letter of resignation.

Mr Taylor was, of course, free to address what he said to Mr Neville, but clearly risked liability in defamation when he sent the letter elsewhere. The law provides that:

The plaintiff claimed that the publication contained the following imputations:

No “strained, or forced, or utterly unreasonable interpretation” should be accepted (Jones v. Skelton, (1963) 1 WLR 1362, 1370, quoted by Hunt J. in Farquhar v. Bottom (1980) 2 NSWLR 380, 385-86). I would say that the plaintiff has pleaded the imputations too broadly, and that the obvious criticisms of the plaintiff are limited to his behaviour in dealings with Mr Taylor. I think that the statement that he has become distrustful of the plaintiff does not in its natural and ordinary meaning convey that the plaintiff cannot be trusted or is untrustworthy. One may say that a mouse or a bird is distrustful of a cat without defaming the cat. I do not think the publication says the plaintiff is deceitful (which I would take to indicate being a purveyor of lies), even in a limited context. I do not think anything is said of Mr Neville's motives other than that they are hostile (in some respects at least) to Mr Taylor's interests.

While the preceding paragraph tends against my finding the publication defamatory, I am quite satisfied that the imputation that the plaintiff was not always honest in his dealings with the defendant is established. The use of “honest” or its pejorative variants is very strong; to publish of a person that he has been dishonest, even in a single instance, is ordinarily to defame him.

Although the imputation I find established is a refined version of the one pleaded, my view is that the plaintiff comes close enough to establishing what he pleaded. Even without this, in my opinion, the plaintiff by pleading, in the paragraph following that which sets out the imputations, that “the said words, in their ordinary and natural meeting, are defamatory” becomes entitled to succeed on that general plea. Given the structure of the plaint, I reject Ms Spence's submission that the plaintiff is bound by the imputations pleaded. See Ryan v Ross [1916] 22 CLR 1, 11. Cf Evans v Davies [1991] 2 Qd R 498, 510. That the publication of an adverse opinion about a person or the person's actions, as opposed to an adverse assertion presented as a factual description of the person or the person's actions, may be defamatory caused no difficulty in Saal -v- Barnes and Thompson King & Partners, CA Nos 102 and 103 of 1991, 24.6.92, Court of Appeal, unreported.

That the plaintiff's reputation in the minds of the recipients of the letter was not adversely affected by it, and that the dire consequences which might have resulted from the publication to the AMP (denial of finance to complete the purchase from the Tornabene interests and even loss of his own company's general agency) were obviated, although relevant to damages, does not preclude my finding that by the letter Mr Taylor published defamatory matter. As I think Mr Taylor might have anticipated, both Mr Tornabene and Mr Dunger, rather than take the letter at face value, looked into the matter. Mr Dunger got his associate in the AMP, Mr Weir, to advise him “what was the problem”; see his note on Exhibit 2. Mr Tornabene says he spoke to Mr Weir and then to Mr Neville, although he didn't seem particularly sure. In my opinion the defendant cannot be held responsible for any publication to Mr Weir, whose evidence contains following:

What matters is the potential which I think the publication had to damage Mr Neville's reputation. Mr Neville did not go to the length of calling laudatory witnesses to attest to any particular reputation. Mr Tornabene, whom he called, said, “There is nothing negative that I heard of.” Everyone is presumed to deserve a good reputation in my view, and nothing has been shown, or even ventured, to rebut the presumption in Mr Neville's case.

The defendant asserted that his publications were protected by qualified privilege, under Section 377(3) and (5) of the Criminal Code:

So far as (3) is concerned, Mr Taylor's claim is that he was concerned to protect his register, his position being different according to whether he resigned or was “terminated”. The public good seems to have no role to play here. So far as Mr Taylor's interests are concerned, the obvious response is that surely it was unnecessary, in order to communicate there had been a resignation, for pejorative accusations against Mr Neville to be published. Assuming that the occasion of qualified privilege exists, I consider that, although Mr Taylor believed the defamatory matter to be true, and although it has not been shown to my satisfaction that he was actuated by ill will to Mr Neville in making the publications, or by any other improper motive, the plaintiff has established that what was published was irrelevant to the occasion giving rise to the assumed privilege and, indeed, that the “manner and extent” of the publication exceeded what was reasonably sufficient for the occasion. In this last conclusion, I am fortified by the view taken by Dawson, McHugh and Gummow JJ in the High Court of Australia in Bellino -v- Australian Broadcasting Corporation. 28.3.96 at pp 60-62 of their reasons, that, in that case, the jury could have come to a similar conclusion. If Mr Taylor were a newspaper publisher, he could fairly be charged with inappropriate sensationalism. In the circumstances, his accusations against Mr Neville are all the worse for their lack of specificity. The onus of negativing good faith is tome by the plaintiff; by showing the absence of two of the components of good faith, he has defeated the defendant's attempt to set up the privilege.

The same conclusions follows in relation to the claim of Section 377(5) privilege. This was raised only in respect of the publication to Mr Tornabene. As a presumed silent partner in the employer's business, as Mr Taylor saw things, Mr Tornabene was believed on reasonable grounds to have an interest in knowing the truth, and to be apprised of the resignation and even the grounds therefor. It appeared to be common ground that the resignation letter could be regarded as “giving information”, although it made uninformative general accusations. Mr Tornabene probably had a fair idea of what underlay the accusations (see transcript p. 31 at the top), as Mr Weir seems to have had. What Mr Taylor published, in its offensive aspects, was as irrelevant and excessive in respect of this occasion of potential qualified privilege as in the other.

The plaintiff's claim is successful.

The defendant's counter claim is in respect of an oral publication naming him which the plaintiff made at a meeting of associates/agents in August, 1992, at the Lake Group's premises in Moorooka. The defendant pleaded that the following words were said:

The plaintiff admits that the meeting took place and pleads that he stated:

The dispute reminds one of other situations, such as those ancient cases in which police officers claim to have heard obscene utterances which their makers assert were completely innocuous, although containing some of the same sounds.

In answers to interrogatories, the plaintiff says that eighteen persons were present at the meeting. He agreed that he said more about Mr Taylor than the short sentence pleaded in his Answer.

Whatever was said, it was said behind the defendant's back. He called three witnesses to prove the publication, all former fellow employees, Messrs Braithwaite, Croke and Poole. All were in some difficulty in the witness box recalling word for word what had been said so long after the event; to a greater or a lesser extent they were willing to agree with MrCollins that the plaintiff's version could have been said.

Mr Braithwaite, however, had made a statement on 17th August, 1992, setting out his version quite soon after the event which I admitted under Section 92(1) of the Evidence Act 1977, over Mr Collins' objection. It is his version which the defendant pleaded in the counter claim. I accept it as an accurate version.

Mr Poole had made a similar written statement on 9th December, 1992 which reads:

None of those gentlemen seems to be close to the defendant. Mr Braithwaite seems to have come from Mackay reluctantly, under subpoena. Mr Croke came under threat of a subpoena, and Mr Poole, who had been subpoenaed, but did not attend court on the first or second days of the trial, came on the third day only after receiving advice that I had ordered a warrant issued to require him to be brought to court, the warrant to lie in the registry overnight. When they gave their written statements, Mr Braithwaite and Mr Poole were employees of Mr Neville, or a company of his. There is no reason to think they would have any reason to write untruths at that stage. Events may have happened since, such as the sacking of Mr Braithwaite, and some trouble Mr Croke has had, which raise the possibility of some animus developing more recently.

I find Mr Taylor has proved the making of the statement his counter-claim attributes to Mr Neville. I do not accept Mr Neville's denial. It may be convenient to say here that I have generally felt able to accept all of the evidence presented. Another exception, if it matters, is that I think the probabilities are that Mr Neville opened and read Mr Taylor's letter dated 19th June, 1992 when the latter handed it over (this is Exhibit 4) rather than put it aside unopened, to read later.

Mr Collins presented an argument which I reject based on Jones v. Dunkel [1959] 101 CLR 298 that I ought to infer that a number of other agents present in the room (whom Mr Taylor has acknowledged contacting prior to the trial) who were not called would have given evidence not helpful to the defendant if they had been called. This lack of helpfulness may simply be attributable to lack of recall. In the circumstances, I do not think it in the least suggests they would support Mr Neville's version of what was said. Mr Taylor's evidence suggests the missing witnesses were as accessible to Mr Neville as to him. In the circumstances, I regard the two written statements received under the Evidence Act at evidence likely to be superior to anyone's recollection now.

The defendant did call two witnesses who supported his version in an indirect way. One was Mr Hoogwaerts, who was “a counsellor and assistant to (Mr Neville) at running meetings and working out meeting topics” and another agent, in fact “team leader” of the team which had included Mr Taylor, Ms Riachi. These two, particularly Mr Hoogwaerts, had an alleged responsibility for Mr Neville's performance. His evidence contains the following:

I have to add to the evidence I do not accept this description of what was said at the agent's meeting. It may be that the witness confused his own suggestion as to what ought to be said with what ultimately was said. I am troubled that Mr Hoogwaerts was inclined to assert he knew nothing about the existence of this action of Mr Neville's, which was begun on 14th July, 1992, when he have his advice. Mr Neville's evidence suggesting he did know seems to me more likely to be correct.

Ms Riachi's evidence was too vague to be helpful:

Even accepting the Hoogwaerts/Riachi contributions, I consider that Mr Neville must bear full responsibility for what he chose to say at the meeting, which I have found was the Braithwaite version. Saal confirms that it does not help the publisher of defamatory matter to have had it vetted or even drafted by someone else, even a solicitor. It cannot help Mr Neville that the start of it all may have been an underling's suggestion. Mr Collins submitted that the material now under discussion goes to good faith issues. That may be, but in this context I have great difficulty in setting aside the dramatic circumstance of the existence of these proceedings, which followed a good deal of correspondence between solicitors (Exhibit 5), the upshot of which was that Mr Taylor refused to give the apology which I think he ought to have given. Mr Neville admitted (p 257) he felt at least “annoyance” regarding Mr Taylor.

Perhaps understandably, Mr Neville was in my view bent on striking back at Mr Taylor and embarrassing him, or, to put it more relevantly, for purposes of defamation proceedings, damaging his reputation. I think it is important that it was unprecedented for an agent who had left (a common occurrence on the evidence) to be publicly criticised be hind his back after he had gone. Indeed, it was not even the practice in the motivational meetings to embarrass or criticise agents who were present. The sole exception may have been one incident involving Mr Braithwaite and a large mock-up battery with “positive” and “negative” terminals introduced by Mr Neville as a motivational tactic which, perhaps, backfired and simply humiliated Mr Braithwaite. Apart from this, when Mr Neville thought criticism or correction was called for, it was done in the privacy of his office, on occasions with use of the “battery”, which Mr Neville himself conceded reached the end of its useful life at some point.

The plaintiff denies the words attributed to (and proved against) him were defamatory of Mr Taylor.

In my opinion, as Mr Croke's reaction may demonstrate, the publication contained defamatory matter as defined.

The imputations pleaded by Mr Taylor are that he:

3. “(a)
   was not a fit and proper person to be an associate of a group known as the Lake Group;

3. (b)
   was not a fit and proper person to be associated with the industry;

3. (c)
   had wrongfully been an associate of the Lake Group;

3. (d)
   was a person to be avoided;

3. (e)
   lacked ability;

3. (f)
   was incompetent;

3. (g)
   had so conducted himself as to give rise to a reasonable suspicion of incompetent conduct on his behalf;

3. (h)
   has so conducted himself as to give rise to a reasonable suspicion he was not a fit and proper person to be associated with the industry;

3. (i)
   had so conducted himself as to give rise to a reasonable suspicion he was not a fit and proper person to be an associate of an organisation known as the Lake Group.”

The defendant, like the plaintiff, has pleaded generally that the publication was defamatory of him. Some of the imputations pleaded are difficult to find in the language, such as (c) to (f). I think the other imputations are established. More generally, the statement that the (insurance) industry was better off without Mr Taylor was plainly defamatory;

Nothing to this effect has been pleaded, but for what it is worth, “negativity” in the context of the meeting and the Lake Group's business was pretty well the worst failing a person could have. The evidence about this came close to creating a picture of some kind of cult in which being branded negative was some kind of kiss of death or harbinger of imminent failure or exclusion. I think this consideration bears on the assessment of Mr Neville's good faith.

This question arises because he has raised the defence of qualified privilege established by Section 377(5). The defence seems to me to fail because, while it contemplates that the audience had an “interest” by way of being instructed as to how to sell AMP products more effectively, the purpose which I find Mr Neville had was striking at Mr Taylor, against whom Mr Neville, at that stage, had a grievance. An observation that might be made against Mr Neville, as it was made against the defendant, is that no attempt was being made to communicate to the meeting “the truth” of Mr Taylor's resignation - this seems to have no relevance in application of Section 377(5), it being justifiable in the submissions to counsel on both sides to purvey propaganda, even “disinformation”, to persons whose interest is to know the truth.

If I am wrong in characterising Mr Neville's purpose, so that an occasion of qualified privilege can be identified, Mr Neville must nevertheless fail because he does not establish good faith, or, more accurately, because the defendant has negatived good faith in him. This can be brought down to the mere naming of him, quite apart from the defamatory statement that the insurance industry was totter off without Mr Taylor. The passage in Bellino -v- Australian Broadcasting Commission already referred to shows the potential vice of naming an individual so as to involve him in grave allegations of a more widespread nature. The instructional purpose could have been achieved by reference to the case without detail sufficient to identify Mr Taylor. Naming him was irrelevant to any instructional purpose. The publication was excessive in manner and extent, witness the dramatic effect of the defendant's witness who heard and observed it. I think it is a proper and reasonable inference in the circumstances that Mr Neville was actuated by ill will to the defendant, and also that he did not believe the defamatory matter to be true, or knew it to be untrue. Once Mr Tornabene was out of the picture, Mr Neville could have terminated Mr Taylor at will, and I think would have done so, or found some way of getting rid of him, if he really believed the insurance industry would be better off without him. It was not negativity which drove Mr Taylor out, unless that includes a genuine (and maybe correct) belief that Mr Neville was not going to treat him fairly.

Mr Taylor is presumed to have a good reputation; there is some positive evidence that he did, and nothing to the contrary.

The counter claim succeeds.

The next task is to assess damages. The counter-claim seeks exemplary damages, the plaint does not. It seems this would not preclude an award of exemplary damages to the plaintiff: Cassell & Co v Broome (1972) 1 All ER 801, 834, where Lord Hailsham accepted the Court of Appeal's view that exemplary damages need not be pleaded, but made the suggestion that the practice ought to change, as it since has in the United Kingdom. See now Order 18 Rule 3 RSC(UK). In Vasta v Queensland Newspapers Pty Ltd (1991) 2 Queensland Reports 354, Master Horton, QC, expressed the opinion that, although desirable, it was not strictly necessary to plead a claim for exemplary damages. In the end, Mr Neville did pursue such a claim.

I cannot see a strong case for exemplary damages on either side. I do not think either party acted in contumelious disregard of the rights of the other. Neither was motivated by the thought of gain, or of causing loss, to the man he defamed, which was a factor embarrassing the defendants in Saal. I think each man acted without a great deal of thought about the wisdom of what he was doing, out of a genuine sense of grievance, which may have been justified, and I think was in Mr Neville's case, although his reaction was the more ill-judged. I do not think any element of punishment against either man is called for here, nor the singling out of either of them as an “example” to deter others.

I think it is sufficient to order compensatory damages, although it probably has to be accepted that there is always some punitive element in defamation awards. I this case neither claimant is out of pocket from being defamed, except by reason of these proceedings. It is helpful to consult what Lord Hailsham said in Cassell v Broome at 824:

Exhibit 5 shows the plaintiff has assiduously sought a retraction and apology from the outset (accompanied by his legal costs) which retraction and apology I think he ought to have been given. I say nothing about the costs, which were demanded along with a reservation of Mr Neville's “right in relation to the claiming of damages”. Yet the plaintiff struck back at Mr Taylor. The obverse is that Mr Taylor may be seen as provoking the plaintiff to defame him, although this sounds a little oddly given that Mr Neville was well underway in seeking redress in the Court.

I regard each of the defamations as serious. In the end, considering all the factors enumerated by Lord Hailsham, I feel unable to distinguish between them from the point of view of quantum. Windeyer, J said, in the case cited by Lord Hailsham, at 150:

Unlike a jury in the typical case, I have had the “advantage” of submissions as to what the quantum ought to be. I will note that they included Saal and, in particular Forde ADCJ's judgment at first instance (Plaint 1790 of 1990, 4th November 1991, unreported) and Judge Boyce, QC's assessment of damages in Kordatos v Batounas (Plaint 2950 of 1991, 17 December 1993, unreported) the appeal in which did not affect the assessment of damages, finally William Douglas O'Shea v Douglas Nixon Everingham (Writ 128 of 1980, 30 October 1985, Connolly, J., unreported). In a supplementary note, Ms Spence supplied me with a copy of the Court of Appeal's reasons in Q Ford Pty Ltd v Field, (Appeal 13 of 1992, 17th February, 1993, unreported).

Ms Spence addressed first, and on the basis of those authorities was inclined to be modest in drawing a distinction between the present and newspaper cases. She appeared to suggest $1 500.00 damages for her client plus $300 interest and $400 for the plaintiff (presumably $200 for each of the two letters) which would doubtless carry interest. Mr Collins, who had unearthed the District Court's decisions, was more ambitious, although the range he suggested was not “between $35,000 and $10,000” as appearing in the transcript at p 276, rather $5000 to $10 000. He described the Kordatos award of $1500 for a complaint to Police that a neighbour had “stolen” tools worth $70 of $1500 as the absolute minimum his client could expect. The award in Saal was $3200, which could be seen as $200 for each of the 16 identical defamatory letters despatched. The judge said at p 27 of his reasons that he would have regarded a global figure of that amount as appropriate in any event. The judgement, like Judge Boyce's (for $1500 and $300 interest) contained many useful references to other awards. Connolly J awarded $1000 in respect of a letter sent to the Federal Minister for Aboriginal and Islander Advancement which was also published to nine other individuals. In Q Ford the Court of Appeal reduced an assessment for a publication to a journalist (which went no further) from $4,000 to $2,000). I was able to recall a jury award of $50 000 in favour of a gentleman against a lady who was the complainant in a rape prosecution which failed before a jury; immediately after the verdict she said to a workmate in a telephone conversation that the plaintiff had lied to the jury. It is perhaps not surprising that (as I understand it) an appeal was compromised, as the award seemed too generous. It is an indication that Ms Spence may have been unduly conservative.

In the end, weighing all of the factors, I conclude that the plaintiff ought to be awarded $7,500 against the defendant on his claim (inclusive of interest) and that the defendant ought to be awarded $7,500 against the plaintiff on the counter-claim (again inclusive of interest).

I will receive submissions from the parties as to the orders which ought to be made, and in particular orders in respect of costs. My present view is that a just result would be no order as to costs which would have the advantage of avoiding exacerbation of the differences between the parties.