Kilpatrick v Van Staveren[2002] QDC 293

DISTRICT COURT OF QUEENSLAND

1. [1]
   The plaintiff’s claim is for damages for defamation.

Facts

2. [2]
   The plaintiff, who was born on 13 November 1959, is a leading hand carpenter employed by J & E Schmider Pty Ltd which trades, in Mount Isa and elsewhere, under the business name of Schmider Engineering Group (“SEG”). He has always lived and worked in Mount Isa and has been with SEG since October 1995. He is an honest man who is held in high regard by the executive officers of SEG. His wife is employed as a cook by Mt Isa Mines Ltd. (“MIM”)

3. [3]
   In July and August 2000 SEG were engaged in carrying out engineering work at MIM’s George Fisher Mine lease. SEG had at the construction site (called K74) a shipping container which was used as their office cum tool shed.  The container had one usable door to it which was able to be locked. The plaintiff (who was the leading hand on the job) had a key to that lock, as did his supervisor, Mr Jackson, and at least one, possibly two other SEG employees.  The container was securely locked at the end of each shift as it contained many (perhaps 500 or more) valuable tools and construction items.  These items were habitually stored in an orderly manner.

4. [4]
   To get to K74 one had to go through a security gate at the entrance to the George Fisher Mine lease, some five kilometres from K74. The security gate was operated by the second defendant (“Chubb”) which was retained by MIM as its security consultants. The first defendant (Mr Van Staveren) was Chubb’s manager at the MIM mine.

5. [5]
   In July and August 2000 MIM and Chubb had adopted a “get tough” policy designed to combat a serious and very costly pilfering problem at the mine. It was widely publicised that searches of vehicles would routinely be made as they were being driven out of the mine lease and that any unauthorised person found to be in possession of MIM property risked criminal prosecution and being barred from the MIM lease.

6. [6]
   SEG finished its work at K74 in early August 2000 and quit the site, leaving the container locked. Early in the morning of 17 August, Jackson told the plaintiff to organise the removal of the container from K74. This would entail having a truck and crane going to K74, loading the container onto the truck and driving off the mine lease through the security gate. However, it could not leave the mine lease until it had been inspected by Chubb to make sure that it did not contain MIM property.

7. [7]
   That inspection would not take place actually at the security gate for two reasons. First, it was much more awkward for the Chubb security guard to clamber onto the back of the truck to enter the container than it would be to enter it when it was on the ground. Second, inspection at the security gate could cause traffic congestion there. So the system was to have the container inspected where it was (that is, at K74) after which it would be locked with a Chubb lock. Then, as it passed through the security gate, the Chubb security guard would remove the lock. This system applied to all such inspections on the departure of contractors from the mine.

8. [8]
   The plaintiff phoned Chubb and arranged for the inspection to take place at 11 a.m. on 17 August. He and another SEG employee then drove out to the Hilton mine and to K74 where he met up with a Chubb security guard called Mr Mick. He unlocked the container door to let Mick go inside and then shut the door at Mick’s request. That was done because MIM property was painted with a type of paint which showed up clearly in a torch beam. Mick shone his torch among the items within the container over a period of about half an hour during which he found a welding lead which had some of this paint on it and so was able to be identified as MIM property.

9. [9]
   The lead was not produced at trial and descriptions of it varied. It seems to have been a length of electrical wire, about 40 cm. long, with a handle at each end. No accurate estimate of its value was made but I gathered it was not an item of particular value, less than, say, $100. It was an item for use with a heavy-duty industrial welder, not the small portable welders used by handymen. It had a patch of the distinguishing green pain on it somewhere but the evidence suggests that the paint was not readily visible to the naked eye.

10. [10]
    I am quite satisfied that the plaintiff had no knowledge of the presence of the lead in the container nor of the actual process by which it got there.

11. [11]
    Mick showed the lead to the plaintiff but made a rather dismissive comment about the importance of the incident. According to the plaintiff, whom I accept on the point, he had the plaintiff sign a form of acknowledgement that the lead had been found and removed from the container. The container was then locked by Mick and the plaintiff and his companion left the mine lease. A day or two later a SEG truck and crane went to K74 and removed the container from the mine lease in the usual way and conveyed it back to SEG’s premises in Mount Isa.

12. [12]
    On or about 5 September 2000 Van Staveren, acting within his authority as Chubb’s local manager, wrote a letter to SEG (exhibit 1) addressed “To the Manager,” which contained the following:

“For your attention and action.  On the 17^th of August your employee Andrew Kilpatrick has been found to be exiting the Mt Isa Mines Lease whilst in possession of MIM property.

If goods are removed from the Lease without the relevant authority for the goods to leave, this is to be seen as theft.  On this occasion your employee has been found in the possession of one (1) welding lead marked with chemical security paint which is unique to MIM.  On this occasion no police action was taken, however, this employee’s name has been circulated to the various exit points and if found in possession of MIM property again without the relevant authority the Police will be contacted.

As you would appreciate, it is the individual’s responsibility to ensure that he/she is exiting the lease only with property which that person is authorised to do so.”

This was in fact an adaptation of a standard letter which Van Staveren had earlier drafted, submitted to MIM, and received MIM approval for use.

13. [13]
    That letter came to SEG through the post. There is no evidence that the envelope was marked “Confidential” or bore any other endorsement which would prevent the letter being handled in any way out of the ordinary. Indeed, it seems that it was treated as routine inward mail. So on the balance of probability I find that, in the ordinary course of office procedure, it was opened by SEG’s receptionist and registered by her in a company mail record book. She then gave it to Mr Hastie the SEG operations manager who was managing SEG generally in the absence on holidays of the general manager, Mr Schmider.

14. [14]
    In an answer to an interrogatory the defendants admit that the letter referred to in para [12] above was also published to Mr Davidson, the MIM manager of George Fisher mine.

15. [15]
    Hastie obviously showed the letter to Jackson or at least told him of the contents because Jackson approached the plaintiff and said that a letter had been received by SEG and something like “Your name’s in this letter; have you pinched something from the mine?” On the plaintiff’s denial Jackson referred him to Hastie who showed him the letter and asked him to explain it. The plaintiff told Hastie what had actually happened, and Hastie accepted that. That day, or soon after, the plaintiff attempted to see Van Staveren and Hastie telephoned him. Van Staveren became aware that the plaintiff and Hastie had interpreted the letter as calling the plaintiff a thief and were unhappy about it. The phone conversation with Hastie was, I accept, somewhat heated but I am satisfied that Van Staveren neither apologised nor said that the accusation of theft was not intended.

16. [16]
    The plaintiff did not discuss the matter other than with Hastie and Jackson and later, his wife. However he felt strongly enough about it to consult his solicitor who wrote a letter dated 15 September 2000 to Van Staveren. It stated:-

“The allegation that Mr Kirkpatrick was ‘found to be exiting the Mount Isa Mines Lease whilst in possession of MIM property’ is factually incorrect.”

and sought an apology and an admission that the allegation was incorrect.

17. [17]
    On about 6 October Schmider returned to work and he then saw the letter referred to in para [12]. He spoke to the plaintiff and Hastie and obtained from the plaintiff his explanation, which he accepted. Some time soon after that he and Mr Wilkinson (the Chief Executive Officer for SEG) went to the George Fisher Mine where they discussed the matter with Davidson. Davidson referred to the solicitor’s letter (see para [16]) and asked Schmider and Wilkinson to dissuade the plaintiff from taking action, saying that no apology or retraction would be forthcoming.

18. [18]
    I regard that statement as relevant to the question of damages, being the reaction of an executive officer of MIM to the publication to him of the letter of 5 September. There is other relevance too, which I discuss in para [25].

19. [19]
    The defendants have never apologised or retracted the allegation and in fact in their defence filed on 13 December 2000, amongst other defences (qualified protection), alleged that the matter contained in the letter was true and that publication was made for the public benefit. Those defences have been maintained and were repeated in an amended defence filed on 27 June 2002.

20. [20]
    The plaintiff believed that the contents of the letter of 5 September 2000 accused him of being caught stealing or attempting to steal property of MIM. He felt physically ill at the suggestion and has since experienced that feeling when he thinks of it or when he has been reminded of the pending litigation. It has tended to make him feel shaky and nervous, it has disturbed his sleep, caused him to withdraw from social encounters, and on perhaps eight occasions actually to vomit or suffer from diarrhoea. His consumption of alcohol has increased somewhat. He has lost weight.

21. [21]
    He has felt “on edge” whenever his work has taken him onto MIM property (as it frequently does) particularly on leaving the mine property when his vehicle (as are almost all vehicles) is checked for MIM property. He feels that he is under particular surveillance and before he reaches the checkpoint he carefully searches his vehicle lest there should be in fact some MIM equipment on board, perhaps left carelessly by a co-worker.

22. [22]
    He has believed that in the ordinary way in which gossip spreads rumours, especially unpleasant ones, people would be talking about him in connection with the allegation contained in the letter, particularly in a small community (about 20,000 people) which is so orientated towards the mine. This has caused him to feel that his employability is somewhat threatened, despite the fact that he believes that his current employer trusts him and values his services.

23. [23]
    His concern about being the subject of uncomplimentary gossip has been fuelled on two occasions when he has overheard, in passing, remarks from workmen whom he could not identify to the effect that he should have taken the trouble to steal something of more value.

24. [24]
    The plaintiff did not lead specific detailed evidence of the actual manner in which the contents of the letter of 5 September might have become known beyond Schmider, Hastie, Jackson and Davidson. That is not surprising. People do not readily admit to having passed on gossip, especially of a serious uncomplimentary nature. I have, however, no doubt that the contents did become known. Schmider in evidence said that it was a topic of general discussion, that is, it was openly discussed in the workforce. He accepted the suggestion that it could have been leaked by the receptionist who opened the mail and who had to look at the letter in sufficient detail to note it up in the mail records. It seems to me that the plaintiff’s name, which appears on the very first line of the letter, could very probably have caught her attention, especially in the light of the fact that the letter was under a Chubb letterhead. Chubb was well known to be MIM’s security agents and the “get tough” policy was well known to the population of Mount Isa.

25. [25]
    Then it must not be forgotten that the letter was also sent to Davidson whose attitude (see para [17]) was completely unsympathetic to the plaintiff and who, I can easily infer, accepted that the letter alleged the truth. Commonsense tells me that he would have been quite likely to discuss the matter with others and he gave evidence that he actually recalled having done so with senior management. He said, “it was considered a serious issue and it wouldn’t be tolerated in the future”. I do not accept that he really felt it was “innocuous”, as he also said in evidence, given the “get tough” policy which MIM and Chubb had adopted in relation to pilfering.

26. [26]
    In fact, as ordinary experience teaches us and the courts have long recognised, once an allegation of misconduct is made, it spreads. “Defamatory statements are objectionable not least because of their propensity to percolate through underground channels and contaminate hidden springs” (Slipper v BCC (1991) 1 QB 283 at 300, per Bingham LJ).  The extent of the spread is influenced by such things as the nature of the alleged misconduct, the importance of it to the community and how homogeneous the community is.  An allegation of misconduct of a type known to be held in particular disfavour by MIM in the town of Mount Isa would almost certainly spread widely.

Meaning of the Letter

27. [27]
    A publication is defamatory if it contains an imputation concerning a person by which the reputation of that person is likely to be injured or by which other persons are likely to be induced to shun, avoid, ridicule or despise the person (Defamation Act, s. 4(1)).  That imputation may be expressed or insinuated (s. 4(2)).

28. [28]
    To call a person a thief expressly is obviously defamatory. In this case the letter did not in terms call the plaintiff “a thief” but it alleged that the plaintiff had been found to be exiting the Mine Lease while in possession of MIM property. It said that to do that without authority is theft, and while it said that “on this occasion” no police action was taken, it asserted that his name had been sent to relevant MIM officers and if he were found again to be in possession of MIM property without authority, police would be contacted. There was then a further reference to the importance of having proper authority to possess MIM property when exiting the mine. It did not in terms say that the plaintiff had no authority on 17 August, but the clear implication was that he did not.

29. [29]
    To the minds of most people who read that letter (the hypothetical referees of whom Brennan J wrote in Readers Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 505) its wording, according to the natural and ordinary meaning of it, would give rise to the clear understanding that the defendants were calling the plaintiff a thief.  This is alleged in the statement of claim.  It is clearly defamatory within s. 4(1) of the Defamation Act. 

30. [30]
    The letter contained as a central point a material untruth. The plaintiff was not in any real sense in possession of the lead at any time. The facts would not lead any hypothetical referee to that conclusion. I accept that the plaintiff knew nothing of its presence in the SEG container. He was merely the person delegated by SEG to give Mick access to the container.

31. [31]
    Further, on the true facts of the matter, the hypothetical referee would not regard the “goods” as being “removed from the Lease” at the relevant time, even though under the arrangement in place, the container was in the early stages of the process of being removed from the mine when the lead was discovered in it. This seems to have been, in the minds of Van Staveren and Davidson, the nub of the matter. It was the point they discussed in their exchange of e-mails in early September 2000 (exhibit 12) in which they seem to accept that the lead was not in the possession of the plaintiff but was in the SEG container among SEG property. But the ordinary wording of the letter of 5 September has the plaintiff in the process of “exiting” the lease in possession of the lead, giving rise to the impression that he was caught in the act of stealing. This would emphasise the allegation of theft to the hypothetical referee, but Van Staveren and Davidson, quite astonishingly to my mind, ignored that aspect of the letter of 5 September.

Publication

32. [32]
    There can be no doubt that the letter of 5 September was actually published to Hastie, Jackson, Schmider, the SEG receptionist and Davidson. See Defamation Act 1889, s. 6.  The manner in which it was addressed and sent through the post amounted to an intended publication not only to the actual general manager (Schmider) but also to any other person who was filling the position of general manager at the time (Hastie) and indeed to anyone delineated in SEG as “manager”, of whom there were several.  It must also have been contemplated that any other relevant superior of the plaintiff would probably see it.  Furthermore, in the absence of some endorsement suggesting confidentiality, it must or should have been contemplated that it would be likely to be seen by secretarial staff in the ordinary course of their employment.  See the discussion in Huth v Huth (1915) 3KB 32 at 38;  43-44;  46; Gomersall v Davies (1898) TLR 430.  Indeed the mere possibility of that occurring has been held to be sufficient.  See Pullman v. Hill & Co (1891) 1 QB 524 at 528;  Thomson v. ACTU (1996) 141 ALR 1 at 15.  Similarly, publication occurs to a third party if there has been want of due care in keeping the letter confidential (ibid).  And of course, it was also intentionally published by Van Staveren to Davidson in his capacity of MIM George Fisher Mine manager.  I see no valid distinction to be drawn because the letter was sent to him only after the displeasure of SEG management about the letter had been communicated to Van Staveren.

33. [33]
    It is more probable than not that the contents of the letter did not remain confidential to those to whom the letter was published intentionally or to any other person who, in the expected ordinary course of employment, saw it. And, as I have said, it is more probable than not that once interesting information of that type and importance was abroad in Mount Isa it would spread widely. I have referred to some evidence tending to support that (paras [23], [24] and [25]).

34. [34]
    I cannot doubt that Van Staveren, had he thought about it, would have recognised the likelihood that the substance of his letter was the stuff of rumour and that, in order to prevent the spread of the rumour, he would have to do what he could to ensure that the letter remained confidential to Schmider himself. He did no such thing. Indeed I consider that the factual inaccuracy in the letter to which I refer in para [30] gives a clue to his state of mind. In my view the evidence shows that he did not bother to check the facts before he wrote and sent out the letter. I do not consider that he gave any clear thought at all to the seriousness of the allegations nor of their very probable consequences.

35. [35]
    The statement of claim alleged that repetition of the contents of the letter by people in the employ of MIM, SEG and Chubb was the natural and probable consequence of the publication of the letter and I have found that to be made out. Thus the repetition was reasonably foreseeable as was the fact that damage would flow from the repetition. The defendants are liable for that damage. See Sims v Wran (1984) 1 NSWLR 317 at 320;  Slipper v BCC (1991) 1 QB 283 at 295-6;  299-300.

Defences

36. [36]
    The amended defence set up a number of defences of which two were argued by Mr Collins, counsel for the defendants, at the hearing.  They were each based on s. 16 of the Defamation Act which, relevantly, provides:

“Qualified protection – excuse

16(1) It is a lawful excuse for the publication of defamatory matter-

3. (c)
   if the publication is made in good faith for the protection of the interests of the person making the publication, or of some other person, or for the public good;

…

4. (d)
   if the publication is made in good faith for the purpose of giving information to the person to whom it is made with respect to some subject as to which that person has, or is believed, on reasonable grounds, by the person making the publication to have, such an interest in knowing the truth as to make the person’s conduct in making the publication reasonable under the circumstances;

2. (2)
   For the purposes of this section, a publication is said to be made in good faith if the matter published is relevant to the matters the existence of which may excuse the publication in good faith of defamatory matter; if the manner and extent of the publication does not exceed what is reasonably sufficient for the occasion; and if the by whom it is made is not actuated by ill will to the person defamed, or by any improper motive, and does not believe the defamatory matter to be untrue.”

37. [37]
    Paragraph 12 of the amended defence contains the following:-

“12 …

3. (c)
   the publication was made in good faith for the protection of the interests of the Defendants and/or of some other person (namely MIM) and/or for the public good;

4. (d)
   the publication was made in good faith for the purpose of giving information to the person to whom it was made (namely Schmider Engineering) with respect to some subject (namely the Plaintiff’s conduct) as to which Schmider Engineering had, or who was believed by the Defendants on reasonable grounds to have had, such an interest in knowing the truth as to make the Defendants’ conduct in making the publication reasonable under the circumstances.”

38. [38]
    It was the defendants’ argument that the principal interest referred to in paragraph 12(c) of the amended defence was that of MIM, in detecting and stamping out pilfering from MIM premises. A secondary interest would be that of Chubb, whose very employment was to achieve that. And I suppose it is reasonable to conclude that achieving that was also for the good of the public of Mount Isa. So, provided good faith existed, there would be protection of the defendants under s. 16(1)(c).

39. [39]
    The alternative submission of the defendants is sufficiently set out in paragraph 12(d) of the amended defence (see para [37] above). But the defence fails at the threshold because it depends upon the proposition that the publication was made to let SEG know the truth. As I have found (see paras [30] and [31]), the letter did not contain the truth. Critical allegations of the letter were untrue.

40. [40]
    Was the letter published in good faith? The onus rests on the plaintiff to prove lack of good faith (s. 17 of the Defamation Act).

41. [41]
    The evidence clearly raises serious questions about the good faith or otherwise of Van Staveren. A pro-forma letter was adapted for use. On the best view of the evidence, (Van Staveren was rather vague on this and other points) the facts were not checked. Had they been properly checked, Van Staveren could not reasonably have said that the plaintiff was in possession of the lead in any material sense, certainly no sense on which an allegation of theft or similar dishonesty could be based. And then he might well have used a more accurate and less inflammatory description of the process which was being carried out when the lead was discovered than to suggest that the plaintiff “was exiting the Mt Isa Mines Lease” at that time.

42. [42]
    It appears that Van Staveren composed the letter simply on the basis of exhibit 4, a “Discovery of Stolen Goods Report Form”. It should be noted that the form was filled in and signed, not by Mick, but by Ms Whitney, the Chubb employee actually at the George Fisher Mine gate. Mick gave her the task because he had to leave the mine to attend to other duties. The handwritten details in the form are brief and contain no actual allegation that the plaintiff was in possession of the lead. It simply names the plaintiff as “supervisor” and identifies a man called Wright as “driver”. The details contained in the form are generally in accordance with the plaintiff’s account as set out in paras [8] and [11] above.

43. [43]
    In those circumstances, I find absence of good faith. The critical untruth of the letter (that is, that the plaintiff was in possession of the lead while exiting the mine) simply cannot be relevant information to support an allegation of the unlawfulness or dishonesty of his conduct. See Telegraph Newspaper Co Ltd v Bedford (1934) 50 CLR 632 at 647 (per Starke J) which, although it relates to a different head of defence is still, I consider, relevant:

“But publication relating to matters affecting the public good may contain defamatory statements having no relevance thereto and consequently falling outside the protection given by the statute.”

44. [44]
    In my view, there are other grounds on which the plaintiff has succeeded in establishing lack of good faith on behalf of Van Staveren. His evidence establishes, as I have said, that he made the allegation of the plaintiff’s possession of the lead without any enquiry at all and in circumstances in which exhibit 4 did not establish that fact. He then used that un-established fact to base his allegation that the plaintiff was a thief who had on this occasion been “let off”, but who was henceforth to be subject to special scrutiny and who would next time be put into the hands of the police.

45. [45]
    The first of these other grounds is that s. 16(2) requires, in order to have good faith, that the publisher of the defamation (that is Van Staveren) must not believe the defamatory matter to be untrue. The defamation, put shortly, is that the plaintiff was a thief or at least a dishonest person. But Van Staveren in evidence was at pains to say that he was not intending to say that, and in cross-examination (T 223/5-20) he said:-

“The draft letter was intended to convey the meaning that the person referred to in it had been guilty of theft or intended theft? --  No, I wouldn’t say that.

“You wouldn’t say that?  I thought it was the policy of Chubb Security and Mount Isa Mines, as you’ve already told us this afternoon, that however small or large the item and whatever the circumstances of the case if in the opinion of Chubb or Mount Isa Mines Limited a person was found in the possession of Mount Isa Mines’ property that would be viewed by Chubb and Mount Isa Mines Limited as theft? – Viewed by Mount Isa Mines as theft.

And you, sir? – No.”

Thus, he did not believe the defamation to be true.

46. [46]
    Even if one were to ignore that express statement as to his belief, the evidence I have summarised in paras [41] and [42] makes it obvious that Van Staveren was reckless, little caring whether the allegations in the letter were true or false. Indeed, the very recklessness with which Van Staveren composed and published the letter, in my view, supports my finding that he did not believe in the truth of the defamation (see Bellino v Australian Broadcasting Corporation (1995-6) 185 CLR 183 at 248 (per Gaudron J); Horrocks v Lowe (1975) AC 135 at 150B, per Lord Diplock).

47. [47]
    In Bellino, ibid, Gaudron J also said that recklessness may also found a conclusion that the defamation was made for an improper purpose.  In my view, the evidence also establishes improper purpose and not just because of Van Staveren’s recklessness.  The overall view I took of his evidence was that his action in regard to the plaintiff was based, not on his desire to inform SEG of misconduct on the part of the plaintiff, but on his anxiety to be seen by MIM to be carrying out to the letter the “get tough” policy.  The dominant motive was the furthering of the interests of Chubb and himself.  To adhere to the policy and, in so doing, to make unfounded allegations against the plaintiff was, I consider, an improper motive.  The improper motive, as Gaudron J, ibid, pointed out, does not have to be aimed personally at the plaintiff, although obviously it might affect him personally.  And, on the impropriety of the motive, it is relevant to consider that on his own admission he did not believe the plaintiff to be a thief (para [45]) or at least, did not really care if he was or not (para [46]).

48. [48]
    Finally, to send a letter containing such serious defamation in the circumstances I have detailed in paras [32] to [34] establishes that the manner and extent of the publication of the defamation exceeded what was reasonably sufficient for the occasion. Its publication should reasonably have been restricted confidentially to Schmider, the general manager of SEG.

49. [49]
    For the sake of completeness, I should say that, if my decision on the applicability of s. 16(1)(d) is wrong (see para [39] above), the absence of good faith also brings down that defence.

Damages

50. [50]
    Damages are at large and are quantified by what is necessary to compensate the plaintiff for his injured feelings. There is a wide discretion reposed in the Court in the assessment. Halsbury’s Laws of Australia, para [145-2630].  On a proper case damages may be made up not only of compensatory damages but also aggravated compensatory damages and exemplary damages, ibid para [145-2640].

51. [51]
    An award of compensatory damages in defamation serves the general purposes of consolation for the wrong done and vindication of the plaintiff. The wrong done consists of the personal hurt and distress caused by the publication and the harm done to reputation. The amount awarded must also signal to the public the vindication of the plaintiff by indicating the baselessness of the allegations. See Halsbury para [145-2655].  Compensatory damages may also reflect an injury to the physical or mental health of the plaintiff which is caused by the defamation (Halsbury, para [145-2695]).

52. [52]
    In Cassell & Co Ltd v Broome (1972) AC 1027 at 1125, Lord Diplock said:

”The harm caused to the plaintiff by the publication of a libel upon him often lies more in his own feelings, what he thinks other people are thinking of him, than in any actual change made manifest in their attitude towards him.  A solatium for injured feelings, however innocent the publication by the defendant may have been, forms a large element in the damages under head (1) itself even in cases in which there are no grounds for ‘aggravated damages’ under head (2).  Again the harm done by the publication, for which damages are recoverable under head (1) does not come to an end when the publication is made.  As Lord Aitkin said in Ley v Hamilton, 153 LT 384, 386:  ‘It is impossible to track the scandal, to know what quarters the poison may reach.’  So long as its withdrawal is not communicated to all those whom it has reached it may continue to spread.  I venture to think that this is the rationale of the undoubted rule that persistence by the defendant in a plea of justification or a repetition of the original libel by him at the trial can increase the damages.  By doing so he prolongs the period in which the damage from the original publication continues to spread and by giving to it further publicity at the trial, as in Ley v Hamilton, extends the quarters that the poison reaches.”

53. [53]
    In Hughes v Mirror Newspapers Ltd (1985) 3 NSWLR 504, at 509-510 Hunt J said:

“I can see no reason in either principle or common sense why the hurt to the plaintiff’s feelings should not include the embarrassment which he suffers concerning the nature of the imputations which he believes were conveyed to others.”

54. [54]
    Furthermore, special damage may be assessed as part of compensatory damages. In defamation law special damage is actual loss or damage, the direct and natural result of the defamatory publication, beyond the general damage which is presumed to have been suffered. See Halsbury para [145-2700].  Such damage can be loss of earning capacity (ibid).

55. [55]
    It is alleged by way of special damage that the plaintiff’s future employment prospects were damaged by the defamation. The submission was that, should he cease employment with SEG, his prospects of obtaining other employment in Mount Isa have been jeopardised. MIM itself, it is argued, has clearly formed an adverse opinion of his character. Then, it is said, any alternative employment in the town is so connected with MIM that knowledge of the defamation and the belief induced by it that the plaintiff is persona non grata with MIM would put him at a disadvantage on the open labour market.

56. [56]
    The authorities make it clear that special damage of this sort must be pleaded and proved. See Miles v Commercial Banking Co of Sydney (1904) 1 CLR 470; Ratcliffe v Evans (1892) 2QB 524 at 529.  It was pleaded but was it proved?  I do not think it was, for three reasons.  First, this judgment can be expected to vindicate the plaintiff’s character in any but the most biased or otherwise unreasonable mind.  I do not include the management of MIM in that category and it is unlikely that any other prospective employer would fail to accept that the plaintiff had been totally vindicated.  Second, I think it unlikely he will leave his employment with SEG.  Third, on the evidence, if he should leave his employment with SEG I think it will be because of his desire and that of his wife to move from Mount Isa to other, perhaps less harsh, climes.

57. [57]
    The character and reputation of the plaintiff at the date of the publication of the defamation was good and, other than for the defamation, would have remained so. His superiors at SEG in fact value and trust him. But as pointed out in Hughes v Mirror Newspapers Ltd (para [42] above), that is not the end of the matter so far as his superiors are concerned.  It was still a matter of embarrassment to him that they should have received from the defendants an untrue and unfairly based slur on his character.

58. [58]
    Of great moment to the plaintiff was the statement in the letter that his name “has been circulated to the various exit points” connected to a threat that a similar event would inevitably bring police action. This has been the spur for his obsessive caution when leaving the mine (see para [21]). In fact, it seems that action was never taken by the defendants and that was alleged in the original defence filed in December 2000. However, his evidence was, and I accept, that his belief has been a continuing one and it was not put to him that he had become aware at any time of the falsity of the belief.

59. [59]
    As I have said (see para [20]), ever since he became aware of the defamation, the plaintiff has suffered emotional and physical symptoms. A report, exhibit 9, from Dr Warren was tendered. Although not a specialist, he is well experienced in treating disorders of this nature. His opinion was that the plaintiff had suffered a depressive disorder manifesting itself in anxiety, weight loss, sleep disturbance, aggressive anger outbursts, increased alcohol consumption and withdrawal from social contact with his peers and his children. He advised the use of relaxant medication and suggested counselling by a psychologist. The plaintiff has not taken the medication, because he feels it would not be wise in his sort of work and has not seen a psychologist because he has found that talking about his problems increase his anxiety.

60. [60]
    The latter statement is consistent with the reason he gave for the fact that he first saw Dr Warren complaining of these symptoms only in January 2002. He said in evidence that any discussion about the defamation or the litigation made the symptoms worse and he has refrained from talking about it as much as possible, even to Dr Warren. That reticence was consistent with his demeanour in the witness box and the evidence of his wife.

61. [61]
    The picture was somewhat complicated by the fact that the plaintiff’s father was diagnosed with cancer early in the year 2000. He appeared to respond well to treatment, but the disease re-appeared and he died after a short illness of six weeks in October 2000. His death affected the plaintiff very greatly and cause him to grieve, but on his evidence and that of his wife, I do not think that it affected the depressive disorder other than briefly and slightly. The grieving process took place and ran its normal course.

62. [62]
    Dr Warren thought that the successful end of litigation with the vindication it would provide would be likely to cause some improvement in the condition. He thought it likely, however, given the length of time he has been suffering the disorder, that it would persevere and that the help of a psychologist (perhaps ten visits at a cost of up to $1,000) would be advisable.

63. [63]
    Thus the defamation has not just hurt the plaintiff’s feelings but has actually made him ill. This judgment in his favour will vindicate him but his illness will take some time to heal, and some expense. All of this is a direct consequence of the defamation and reasonably foreseeable. See Rigby v Mirror Newspapers Ltd (1963) 64 SR (NSW) 34; Mirror Newspapers Ltd v Jools (1985) 65 ALR 174.

64. [64]
    The plaintiff’s instructions to his solicitor were to seek an apology. I accept the evidence he gave that a simple apology would have seen the end of the matter. No such apology was ever given. In fact the solicitor’s letter (exhibit 2) received no response at all despite the fact that it drew attention to the plaintiff’s complaint of the critical inaccuracy contained in the letter, namely that he was in possession of the lead while exiting the mine.

65. [65]
    Aggravated damages can be awarded as part of compensatory damages. This increase can be awarded if, and only if, the defendants’ conduct can be shown to be improper, unjustifiable or lacking in bona fides. See Triggell v Pheeney (1951) 82 CLR 497.

66. [66]
    Conduct which aggregates damages can include failure to inquire before publication where that can be seen as indicating recklessness (Halsbury para [145-2745].  I have found that Van Staveren did not make appropriate enquiries paras [40] and [41] and that his conduct was reckless, para [46].  When the manner and extent of publication exceeds what is reasonable (as I have found, para [48] damages are aggravated.  See Halsbury para [145-2750].  Failure to apologise (as here, see para [64] is also relevant.  See Halsbury para [145-2760].

67. [67]
    A further serious matter in this case which aggravates damages is the plea by the defendants of truth and public benefit which appears in the original defence and in the amended defence. It has never been retracted. See Halsbury para [145-2755].  Effectively, the defendants have continued, publicly, to maintain the truth of the defamation right up to the present.

68. [68]
    Finally the fact that the defamatory statement was untrue aggravates the hurt to the plaintiff’s feelings and that in turn, aggravates compensatory damages. See Halsbury para [145-2770].

69. [69]
    I understood counsel for the defendants to argue that in any event the plaintiff could not recover damages for that component of his suffering which relates, not to the defamation, but to the litigation. I reject that submission. The litigation was necessarily brought by the plaintiff to vindicate his reputation. Until these reasons are delivered and judgment given he has been faced with a defence which states that to write to his employer and others saying that he was a thief was true and for the public benefit. To destroy that plea he had to continue the litigation. It is not reasonably unforeseeable that a plaintiff in those circumstances would have his anguish re-kindled by contact with his solicitor to discuss the case, nor that it could exacerbate to a depressive illness.

70. [70]
    In assessing compensatory damages it is appropriate to make some mental comparison with damages for pain and suffering in personal injuries cases. See Carson v John Fairfax & Sons Ltd (1992-3) 178 CLR 44.

71. [71]
    Compensatory damages simpliciter are assessed at $30,000 which I increase to $40,000 to take account of aggravated damages.

Exemplary Damages

72. [72]
    Exemplary damages are punitive and are intended to punish the defendant for conduct showing a “conscious and contumelious disregard for the plaintiff’s rights and to deter the defendant and others from like conduct in the future. See Halsbury para [145-2825].

73. [73]
    It is clear to me that punitive damages should be awarded here, if for no other reason than that Van Staveren gave evidence that he did not believe that the plaintiff had stolen or attempted to steal the lead (para [45] above). That evidence of his belief (which I assume was always that the plaintiff was not a thief) took the ground from beneath all of the defences which were pleaded. To maintain the defences in these circumstances was in contumelious disregard of the plaintiff’s rights.

74. [74]
    I assess exemplary damages in the sum of $10,000.

Interest:

75. [75]
    It is appropriate to award interest on the compensatory damages and because of the similarity of the award to an award of damages for pain and suffering, the rate of 2% per annum is applied. Interest is not allowed on the exemplary damages cause they do not reflect any loss sustained by the plaintiff. See The Commonwealth v Murray (1988) Aust Torts Reports 68,038.

Conclusion

76. [76]
    I give judgment for the plaintiff against the defendants for $50,000, with interest at 2% on $40,000 for 6 September 2000.