Marshall v Megna; Megna v Tory; Tory v Megna

Whether the imputations on the appeal were published on an occasion of qualified privilege? (2) If so, whether the imputations on the appeal were relevant to the occasion of qualified privilege? (3) Whether her Honour erred in finding that the imputations on the cross-appeal were published on an occasion of qualified privilege? (4) Whether the appellants were motivated by malice? (5) Whether the defences of qualified privilege and fair comment were made out in respect of the imputations alleged in the cross-claim? (6) Whether her Honour erred in holding that the claim based on the first circular was statute-barred? (7) Whether the damages awarded were excessive? (8) Whether her Honour erred in ordering that the appellants pay the whole of the respondents' costs? In the proceedings before this Court, s 78B Notices were issued to the Attorneys General of the States and Territories pursuant to the Judiciary Act 1903 (Cth) because of the appellants submission on the scope of qualified privilege. None of the Attorneys General sought to intervene. The Court dismissed the appeal and allowed the cross-appeal. Held per Beazley JA, Allsop P and Hoeben JA agreeing: In respect of (1):

None of the imputations were published on an occasion of qualified privilege: [133], [134].

The trial judge erred in finding that 'public interest' in a topic is sufficient to found an occasion of qualified privilege: [133]. There is no duty for any person to convey their personal political views nor is there any reciprocal interest in persons receiving such unsolicited comments: [133]. Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520; Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749.

The requirement of reciprocity means that only in exceptional cases will the publication of defamatory matter to the general public attract the privilege: [37]. Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520.

The principle stated in the 'election cases' did not apply as there was no pending election: [109].

There is no independent third category of qualified privilege attaching to political comment, that does not fall within the 'election cases', and in respect of which there is no requirement of reasonableness: [120]. Cited: Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520; Roberts v Bass [2002] HCA 57; 212 CLR 1; The Korean Times Pty Ltd & Anor v Un Dok Pak [2011] NSWCA 365. In respect of (2) and (3):

For there to be an occasion of qualified privilege which protects a person from liability for defamatory publications, there must be a sufficient connection to the privileged occasion to attract the defence: [147]. Anything "not relevant and pertinent" to the discharge of the duty or the safeguarding of the interest, which creates the privilege will not be protected: [153]. Cited: Adam v Ward [1917] AC 309; Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366.

Inaccurate statements or excessive or extravagant language do not of themselves prevent there being a sufficient connection to the privileged occasion: [148], [156]. Cited: Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366; Cush v Dillon [2011] HCA 30; 243 CLR 298, Adam v Ward [1917] AC 309

In determining whether a sufficient connection exists, the text containing the defamatory imputations must be read in the context of the item in which they arose: [176]. In respect of (4)

The matters complained of were actuated by an improper motive: [297]. The factors relevant to this conclusion included the personal interest in the dissemination of the circulars, the language and tone of the matters demonstrated that the authors 'harboured ill will, bias and prejudice', the anonymity of the authorship, the deception involved in its publication under the auspices of a non-existent organisation and the repetitive and crushing nature of the campaign against the respondents: [288]-[289]. In respect of (5)

The defence of qualified privilege was made out by the first respondent as the matter complained of was in response to an attack: [305]. An occasion existed to repel the appellants' circulars, which characterised the respondent as dishonest, self-interested, corrupt and incompetent: [314]. The respondent's publication was in reply to this occasion because it criticised the first appellant's conduct as a Councillor: [314].

The defence of comment was made out because two conditions were satisfied: [325]-[326]. First, the defamatory matter was "recognisable as comment and not as a statement of fact" by the reader of the publication: [315]. For example, the defamatory matter must be seen as a "deduction, inference, conclusion, criticism, remark, observation, etc": [314]. Second, the matter was proper material for comment because it related to a matter of public interest: [306]. Although the trial judge gave limited attention to this defence, her conclusion that the defence was made out is upheld: [317], [323]. Cited: Defamation Act 1974, s 30-32; Lloyd-Jones v Allen [2012] NSWCA 230; Clarke v Norton [1910] VLR 494. In respect of (6)

An award of damages for defamation involves an evaluative/ discretionary assessment of the harm caused to reputation and the hurt and distress of the defamation: [336], [338]. Cited: Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232; Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327.

The trial judge did not err in considering each circular separately and making an award of damages in respect of each, regardless of the number of imputations conveyed by the particular matter complained of: [327]. Cited: Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232.

Appellate intervention is only warranted when the "amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case": [332]. The trial judge's determination was outside an appropriate discretionary range: [339]. Cited: Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44.

Damages fall to be reassessed in this case because of the Court's conclusion on qualified privilege and malice: [334]. In respect of (7)

The relevant limitation period for a defamation claim is six years: [343]. Cited: Limitation Act 1969, s 14.

Distribution and publication are not, or at least are not usually contemporaneous: [329], [330]. Publication only occurs when the matter is read and comprehended by someone: [329]. Cited: Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575.

The trial judge did not err in finding that the first circular subject of the proceedings was statute barred because there was no evidence from which an inference could be drawn that persons read the circular on or after 8 April 1998: [330]. In respect of (8)

This ground of appeal became redundant due to the nature of the disposition of this appeal. The ordinary rule that costs follow the event should apply: [349].

ALLSOP P: I have had the advantage of reading the reasons of Beazley JA to be delivered. I agree with the orders proposed by her Honour and subject to what follows with her reasons. I agree with her Honour's view that none of the communications was made on an occasion of qualified privilege. Whilst I agree with her Honour's reasons in this regard, I would prefer to express aspects of the reasoning in my own words.

There being no occasion of qualified privilege, it is unnecessary to express any views as to the individual communications and imputations and whether they were relevant to or sufficiently connected with the occasion, assuming the correctness of the primary judge's views on qualified privilege. Nevertheless, if it be necessary to engage in this task, generally, I am content to agree with Beazley JA's approach and conclusions in this respect.

Reciprocity of duty and interest is the hallmark of the common law defence of qualified privilege; it is essential: Cush v Dillon [2011] HCA 30; 243 CLR 298 at 305 [11]; Bashford v Information Australia (Newsletters) Pty Limited [2004] HCA 5; 218 CLR 366 at 373 [9] and 416-417 [136]-[137]; Adam v Ward [1917] AC 309 at 334; Papaconstuntinos v Holmes à Court [2012] HCA 53; 293 ALR 215 at [8] and cases at footnote 5; Roberts v Bass [2002] HCA 57; 212 CLR 1 at 26 [62].

The informing legal policy is the protection of freedom of communication. The recognition of its importance means that in some circumstances freedom of communication is more important than an individual's right to the protection of his or her reputation: Cush v Dillon at 305 [12]; Aktas v Westpac Banking Corporation [2010] HCA 25; 241 CLR 79 at 89 [22]; Justin v Associated Newspapers Ltd [1967] 1 NSWR 61 at 75.

The concept of reciprocity of interest or duty and the cognate notions involved such as the common convenience and welfare of society, public or private duty whether legal or moral, and the relevant community of interest of the parties are general and stated at a high level of abstraction: Bashford at 373 [10]. Their application to a particular given conclusion requires close scrutiny of the facts of the case, the situation of the parties and the relationships and circumstances leading up to and surrounding the publication: Guise v Kouvelis [1947] HCA 13; 74 CLR 102 at 116-117; Bashford at 373 [10].

The individualisation of the broad and general concepts and principles to a particular conclusion through close scrutiny of the facts is effected by the application of the informing notions and the legal policy of the privilege to those facts: Guise v Kouvelis at 116-117. The process of reduction from the general principles to the particular question of the existence of an occasion of privilege is an evaluative one directed at assessing whether a social or moral right or duty existed: Baird v Wallace-James (1916) 85 LJPC 193 at 198; Guise v Kouvelis at 117. The correct answer is not dictated by a bright line rule enabling logical deduction or application. It is reached by ascertainment of a category of circumstance, being the existence of a sufficient community of interest to justify the recognition of an occasion of privilege, that has an indeterminate reference: Aktas at 89 [22], J Stone, The Province and Function of Law (Harvard University Press, 1950) at 185-186. The process was described by Jordan CJ in Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363 as the ascertainment, through the evidence, that "the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community ... that it should be made with impunity, notwithstanding that it was defamatory of a third party." The word "interest" is used in the broad popular sense, referring not to a matter of gossip or curiosity, but to a matter of substance beyond mere news value. The interest is to be definite, not vague or insubstantial, though it may be direct or indirect. It must be "of so tangible a nature that for the common convenience and welfare of society it is expedient to protect it": Howe v Lees [1910] HCA 67; 11 CLR 361 at 377 and 398; Andreyevich at 363-364.

Political subject matter provides fertile ground for the interplay of these general considerations apposite to the privilege. The informing legal policy of freedom of communication is vital to the health and well-being of democratic civil society. The common convenience and welfare of our society and the health of its political life depend ultimately on freedom of choice, which in turn depends upon the free availability and exchange, of information and ideas relevant to political and social choice. At one level of abstraction, all persons entitled to vote and indeed those who are not yet but will be so entitled, have a common community interest in the exchange of information and opinions on society, politics, government and politicians. Without more, however, it would be a surprising conclusion (without a broadly framed protection for any communication about politics) that an occasion of qualified privilege arose in respect of the dissemination of information or opinions relevant to politics from any person in Australia to any number of other persons in Australia. Such would be to posit shared public political interest as the foundation of qualified privilege however large or anonymous the group to whom the dissemination took place. More would need to be known about the circumstances, though it is to be noted that, as shown by the discussion in the judgment of McHugh J in Stephens v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211 at 261-264, qualified privilege may attach to publications to the world at large.

The common law has recognised the importance of the political process in the ambit of qualified privilege in the so-called election cases to which I will come in due course.

It was the perceived Constitutional importance of political discourse that saw the development of a Constitutional principle constraining the authority of Parliaments and the Executive in the exercise of their respective powers and the moulding of the law of defamation by reference to Constitutional imperatives in such cases as Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520.

The principles enunciated in the judgment of the Court in Lange (later modified, irrelevantly for present purposes, in Coleman v Power [2004] HCA 39; 220 CLR 1, and, as to which, see also later cases such as APLA Limited v Legal Services Commissioner (NSW) [2005] HCA 44; 224 CLR 322; and Wotton v Queensland [2012] HCA 2; 285 ALR 1) developed from a series of cases in which the underlying Constitutional principles, their elements and effects, including upon the common law of defamation, were variously expressed: see Australian Capital Television Pty Limited v The Commonwealth [1992] HCA 45; 177 CLR 106; Nationwide News Pty Limited v Wills [1992] HCA 46; 177 CLR 1; Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; 182 CLR 104; and Stephens.

In Stephens, McHugh J, if I may be permitted respectfully to say, after a discussion of qualified privilege of great clarity and assistance at 260-264, propounded a development of the common law of qualified privilege based on the appropriateness of recognising the freedom of discussion of the exercise of public functions and powers vested in public officials. These were not expressions of view of the existing state of the common law, but were an expression of his Honour's view as to the appropriate adaption of the common law of qualified privilege to changes in the conditions in Australian society. The primary judge set these passages out at [141] and [142] of her reasons. McHugh J said at 264-265: "In the last decade of the twentieth century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys. How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community. Information concerning the exercise of those functions and powers is of vital concern to the community. So is the performance of the public representatives and officials who are invested with them. It follows in my opinion that the general public has a legitimate interest in receiving information concerning matters relevant to the exercise of public functions and powers vested in public representatives and officials. Moreover, a narrow view should not be taken of the matters about which the general public has an interest in receiving information. With the increasing integration of the social, economic and political life of Australia, it is difficult to contend that the exercise or failure to exercise public functions or powers at any particular level of government or administration, or in any part of the country, is not of relevant interest to the public of Australia generally. If this legitimate interest of the public is to be properly served, it must also follow that on occasions persons with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties will have a corresponding duty or interest to communicate information concerning such functions, powers and performances to members of the general public. In Jenoure v Delmege [1891] AC 73 at 77, Lord Macnaghten said that '[t]o protect those who are not able to protect themselves is a duty which everyone owes to society'. Accordingly, it is now appropriate for the common law to declare that it is for 'the common convenience and welfare' of Australian society that the existing categories of qualified privilege be extended to protect communications made to the general public by persons with special knowledge concerning the exercise of public functions or powers or the performance of their duties by public representatives or officials invested with those functions and powers. The scientist who discovers that lack of governmental action is threatening the environment, the 'whistleblower' who observes the bureaucratic or ministerial 'cover up', and the investigative journalist who finds that grants of public money have been distributed contrary to the public interest are examples of persons who have special knowledge of matters affecting the exercise of public functions or powers or the performance of duties by public representatives or officials. If such persons, acting honestly, inform the general public of what they know about such matters, their publications will be made on an occasion of qualified privilege. The defence of qualified privilege will be available even if the information is subsequently proved to be incorrect. Thus, the occasion will still be privileged even if the 'whistleblower' mistakenly but honestly publishes information which defames another person or the scientist or journalist honestly overlooks some fact which undermines the thesis of his or her claim. The publication of erroneous information may be evidence of malice in some cases. But by itself an error in the published information will not destroy the occasion of privilege."

This way of putting the matter does not depend upon reasonableness of the communication. McHugh J propounded a broad category of qualified privilege based on the honest dissemination to the general public of special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties.

These views of McHugh J were a minority view. The majority (Mason CJ, Toohey and Gaudron JJ in a joint judgment, and Deane J in a separate judgment) expressed the matter differently.

One of the expressed tasks of the Court in Lange was to reconsider previous statements of principle in order to (see 556): "... settle both constitutional doctrine and the contemporary common law of Australia governing the defence of qualified privilege in actions of libel and slander."

After a discussion of the Constitutional principles at 557-568, the Court turned to defamation at 568-575. The Court recognised at 569-570 that the law of defamation, as it stood, imposed an undue burden on the required freedom of communication because: "... the law as so understood arguably provides no appropriate defence for a person who mistakenly but honestly publishes government or political matter to a large audience. In Lang v Willis (1934) 52 CLR 637, this Court held that election speeches made to large audiences of unidentified persons are not necessarily privileged even if the speeches deal with matters of general interest to the electors. In that respect, the common law as hitherto understood in Australia has simply reflected the English common law."

The Court then, at 570, recognised the need for reciprocity of interest or duty as the essential element to qualified privilege. It continued, however (at 570): "Only in exceptional cases has the common law recognised an interest or duty to publish defamatory matter to the general public. However, the common law doctrine as expounded in Australia must now be seen as imposing an unreasonable restraint on that freedom of communication, especially communication concerning government and political matters, which "the common convenience and welfare of society" now requires. Equally, the system of government prescribed by the Constitution would be impaired if a wider freedom for members of the public to give and to receive information concerning government and political matters were not recognised. The "varying conditions of society" of which Cockburn CJ spoke in Wason v Walter (1868) LR 4 QB 73 at 93 now evoke a broadening of the common law rules of qualified privilege." (Citations omitted.)

Immediately following this passage, the Court set out part of what McHugh J had said in Stephens, being the first of the two paragraphs set out above. This was not done as a statement of operative principle, but as an explanation of why it had come about that the varying conditions of society required a broadening of the common law rules of qualified privilege. The Court then went on to say (at 571): "However, the common law of defamation can and ought to be developed to take into account the varied conditions to which McHugh J referred. The common law rules of qualified privilege will then properly reflect the requirements of ss 7, 24, 64, 128 and related sections of the Constitution."

The Court then formulated, at 571-575, an extended common law rule for qualified privilege by recognising, conformably with the Constitution, the interest in each member of the Australian community in disseminating and receiving information, opinions and arguments concerning government and political matters in Australia. The expression of the matter at 571-572 was as follows: "Accordingly, this Court should now declare that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. The duty to disseminate such information is simply the correlative of the interest in receiving it. The common convenience and welfare of Australian society are advanced by discussion - the giving and receiving of information - about government and political matters. The interest that each member of the Australian community has in such a discussion extends the categories of qualified privilege. Consequently, those categories now must be recognised as protecting a communication made to the public on a government or political matter. It may be that, in some respects, the common law defence as so extended goes beyond what is required for the common law of defamation to be compatible with the freedom of communication required by the Constitution. For example, discussion of matters concerning the United Nations or other countries may be protected by the extended defence of qualified privilege, even if those discussions cannot illuminate the choice for electors at federal elections or in amending the Constitution or cannot throw light on the administration of federal government. Similarly, discussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable. Thus, the extended category of common law qualified privilege ensures conformity with the requirements of the Constitution. The real question is as to the conditions upon which this extended category of common law qualified privilege should depend. At common law, once an occasion of qualified privilege is found to exist, the privilege traditionally protects a communication made on that occasion unless the plaintiff is actuated by malice in making the communication. But, apart from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients." (Citations omitted.)

The conditions of exercise of the privilege were then fashioned. The expression of those conditions was preceded by further discussion of the common law of qualified privilege at 572, including discussion of the protection of qualified privilege only when publication is to a limited number of recipients. The Court said at 572: "If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth. Publication beyond what was reasonably sufficient for the occasion of qualified privilege is unprotected. Because privileged occasions are ordinarily occasions of limited publication - more often than not occasions of publication to a single person - the common law has seen honesty of purpose in the publisher as the appropriate protection for individual reputation. As long as the publisher honestly and without malice uses the occasion for the purpose for which it is given, that person escapes liability even though the publication is false and defamatory. But a test devised for situations where usually only one person receives the publication is unlikely to be appropriate when the publication is to tens of thousands, or more, of readers, listeners or viewers." (Citations omitted.)

The Court then stated that the criterion for application of the broader category of qualified privilege was to be reasonableness (573): "... reasonableness of conduct seems the appropriate criterion to apply when the occasion of the publication of defamatory matter is said to be an occasion of qualified privilege solely by reason of the relevance of the matter published to the discussion of government or political matters. But reasonableness of conduct is imported as an element only when the extended category of qualified privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience." (Emphasis added.)

This was not a rule laid down only for mass media (however one defines such an innominate class), though there was a recognition of the need to protect communications of a political kind to a wide audience. It was a fashioned extension to the common law of qualified privilege based on a Constitutionally founded interest in all in the community to disseminate and receive information, opinions and argument concerning government and politics as long as the conduct is reasonable.

The extension of qualified privilege in Lange resulted in the existence of qualified privilege relating to political matters in two categories: first, the category concerning communications among or to electors in the course of an election, such as recognised in Braddock v Bevins [1948] 1 KB 580; and, secondly, the category in Lange.

In Roberts v Bass [2002] HCA 57; 212 CLR 1, this distinction was noted: see Gleeson CJ at 9-10 in particular. However, in the light of how the case had been presented the Court did not attempt to reconcile or harmonise the two categories by any reformulation of the law. Nor did the Court recognise a third category concerning non-mass media political communication based on either the views of McHugh J in Stephens or of the Court in Lange shorn of the condition of exercise of reasonableness.

The first category, the election cases, was referred to or discussed in Roberts v Bass: Gleeson CJ at 12-14 [11]-[14]; Gaudron, McHugh and Gummow JJ at 29 [72]-[73], Kirby J at 61 [167] and Hayne J at [222]-[223]. It is founded on the honest statement of what is believed to be the truth, unqualified or conditioned by reasonableness, but as Gleeson CJ said in Bass at [14] "in the course of an election contest." See also Gaudron, McHugh and Gummow JJ at [73] in the passages cited by Beazley JA. I agree with the expression of views of Beazley JA as to the substantive limits of the election cases.

There is no basis to conclude from either Lange or Roberts v Bass that the election cases have established a category of qualified privilege otherwise not previously recognised based on the public interest in the dissemination of information or opinions about governmental or political matters shorn of any condition of exercise of reasonableness. I also agree with the views of Beazley JA in this regard. I also refer to and agree with the analysis of Nicholas J in The Korean Times Pty Ltd v Un Dok Pak [2011] NSWCA 365 at [90]-[101] and in Lloyd-Jones v Allen [2012] NSWCA 230 at [49]-[62].

With the utmost respect to the primary judge, I cannot agree that any of these communications was made on occasions of qualified privilege. There was no election campaign under way, in any substantive sense. The election cases such as Braddock v Bevins do not avail the appellants. The Lange category and its condition of reasonableness was, understandably, eschewed by the appellants.

The essential underpinning of legal reasoning of the primary judge that led her Honour to conclude that there were occasions of qualified privilege is to be found at [141]-[146] of her reasons. In those paragraphs, the primary judge, in substance, applied the second paragraph from the extract from the judgment of McHugh J in Stephens. That led her Honour to the conclusion that it mattered not that the statements were not made in the course of an election since they concerned the exercise of functions and powers by public representatives. The interest of electors in having information about their representatives was continuous and so the community of interest existed.

That, with respect, is a significant departure from, or development of, Lange and Braddock v Bevins. It was made because of a perception that the statement of principle by McHugh J in Stephens as to the operative principle (as opposed to the articulation of why the common law should be developed) was approved by the High Court. It was not. To adopt this course is to fashion a category of qualified privilege based on the interest of all in the community in the manner expressed by the Court in Lange, without the condition of reasonableness. That development requires the rearticulation of Lange in the light of the election cases. That is a matter for the High Court. If I may say with respect to the views of Beazley JA in this regard, it may be that there are powerful considerations in favour of such a rearticulation and that suggest that McHugh J's views in Stephens have great force. That, however, is for the High Court.

Here anonymous pamphlets from a non-existent organisation were placed indiscriminately in the letterboxes of complete strangers, albeit in the local government area of Drummoyne. Thus, the recipients were strangers who lived or worked in Drummoyne. It can be accepted that many had the right (and duty) to vote in Council elections. There was no election called or in contemplation.

The error in the primary judge's conclusions as to the existence of occasions of qualified privilege can be seen at [181]-[185] of her Honour's reasons. There it was said that if the content of the circulars related to the affairs and administration of the Council then each occasion would have been of qualified privilege. The necessary reciprocity in that subject matter was between Mr Marshall and Mr Tory (as the anonymous distributors) and anyone else in the Council area to whom the material was disseminated. At [189] the primary judge said: "For the purpose of the first question, I will proceed upon the basis (as mentioned earlier in this judgment) that Mr Marshall was a Councillor on the Council; that Mr Tory had a relevant interest in Council matters; and that the circulars were distributed to recipients who were ratepayers and residents of the Drummoyne municipality, and had a legitimate interest in receiving information (and opinion or comment) on the functioning of the Council and its Councillors including its Mayor."

This approach goes beyond the existing categories of qualified privilege (that is the election cases and Lange). This approach posits information about the functioning of local government as a sufficient basis for reciprocity between, on the one hand, unidentified persons and, on the other, complete strangers whose only connection with the subject matter is that they live or work in the local government area, accepting that many will be electors in the area. To conclude that such is an occasion of qualified privilege is to fashion a broad category of qualified privilege based on shared presumed political interest, without the conditioning of reasonableness articulated in Lange. If it were correct, it would apply Australia-wide to dissemination of political views and opinions to all Australians about national politics without any condition of exercise of reasonableness.

The primary judge expressed the view at [134] that Braddock v Bevins was not an authority limited to circumstances where there is an election. The words of the Court of Appeal were plainly in the context of an election. At 590, the Court referred to "a good deal of authority for the view that qualified privilege extends to communications by one elector to another in relation to a candidate at an impending election." The Court then said that it would be curious if the interest and duty between electors were to be seen as higher than between elector and candidate. The framework of analysis was expressly an impending election. The statement of principle at 592 (quoted by the primary judge at [76] of her reasons) was made in that express framework and should be understood as authority for that. This is how Gleeson CJ understood the matter in Roberts v Bass at 13 [14]. Gaudron, McHugh and Gummow JJ at 29 [72] said that the assumption made by the parties that Braddock v Bevins gave effect to the common law of Australia was correctly made. Gleeson CJ had earlier (at 9 [4]) expressed the terms of the assumption of the parties: the category of common law privilege recognised in Braddock v Bevins "[relates] to communications to thousands of electors in the course of an election".

In my view none of the communications was made on an occasion of qualified privilege.

As Beazley JA puts it at [155] the argument about the politically founded category of qualified privilege was "raised ... in an alarmingly non-specific way". Her Honour has accepted that it was raised. For my part, that is a charitable view. This Court has said on a number of occasions that judges should be presented with issues with clarity: see by way of example, Nowlan v Marson Transport [2001] NSWCA 346; 53 NSWLR 116 at [28] - [29] approving White v Overland [2001] FCA 1333 at [4]. The Parliament has also said so, in effect, in the Civil Procedure Act 2005 (NSW), ss 56-60. Parties and counsel have a basal obligation to be clear about what issues are being raised for disposition. If issues are raised obliquely or hesitatingly and are not grasped by a trial judge, a party cannot complain in this Court. Efficient disposition of issues in litigation depends upon the clear identification of issues.

I agree with the views of Beazley JA on damages. I would only add that I do not think that any award for Mr Megna could exceed the figure proposed by her Honour.

BEAZLEY JA:

This is an appeal from the decision of Simpson J in which her Honour entered verdicts in favour of each of the respondents, Mr Megna and Mr Lloyd, and awarded them damages for some but not all imputations contained in a series of circulars published by each of the appellants, Mr Marshall and Mr Tory. Her Honour awarded the first respondent, Mr Megna, damages in the sum of $395,000 and the second respondent, Mr Lloyd, damages in the sum of $220,000.

The appellants submitted that the circulars containing the imputations, on which the respondents succeeded, were each published on an occasion of qualified privilege contrary to the findings of her Honour and that her Honour further erred in finding that the communications were not relevant to the occasion. The appellants also appealed against the quantum of damages awarded and against her Honour's costs orders.

The respondents cross-appealed against her Honour's findings that other publications upon which they sued were published on an occasion of qualified privilege. The respondents also cross-appealed against her Honour's finding that the publications found to be published on an occasion of qualified privilege were not motivated by malice. The respondents also contended that the first matter complained of was not defeated by reason of the Limitation Act 1969, s 14.

The trial judge also dismissed a cross-claim, brought by Mr Marshall against Mr Megna, in which he alleged he had been defamed by two articles in a publication entitled Veritas published by Mr Megna. In his defence to the cross-claim, Mr Megna pleaded that the imputations were made on an occasion of qualified privilege and were also protected by the defence of comment pursuant to the Defamation Act 1974, ss 30-32. Her Honour found that each publication was made on an occasion of qualified privilege and that the second publication was protected by the defence of comment.

Mr Marshall has appealed against the dismissal of the cross-claim on the ground that her Honour either failed to consider or erred in her findings both on qualified privilege and comment.

It will be convenient at this point to identify the imputations subject of the appeal and the cross-appeal.

The imputations the subject of the appeal were: 6(a), 8(b), 8(c), 12(a), 12(b), 12(c), 12(d), 14(a), 14(b), 14(c), 14(d), 14(e), 18(a), 24(a), 24(c), 24(d), 24(e), 24(f), 26(a), 26(b), 26(c), 26(d), 26(f), 26(g), 28(b), 28(c), 28(d), 30(a), 32(e) and 32(f).

The imputations subject of the cross-appeal, being those in respect of which her Honour held were published on an occasion of qualified privilege were: 2(a), 2(b), 2(c), 2(d), 2(e), 4(a), 4(b), 4(c), 6(c), 6(d), 6(e), 8(a), 10(a), 10(b), 10(c), 10(d), 10(e), 10(f), 10(g), 16(a), 16(b), 18(b), 18(c), 18(d), 20(a), 20(b), 20(d), 22(a), 22(b), 22(c), 22(d), 22(e), 22(f), 22(g), 28(a), 28(e), 28(f), 28(g), 30(b), 30(c), 30(d). 30(e), 32(a), 32(b), 32(c), 32(d), 34(a), 34(b), 34(c), 34(d), 34(e), 34(f), 34(g) and 34(h).

At the commencement of the hearing of the appeal, Mr Marshall sought leave to further amend his amended notice of appeal by amending ground 4, adding a new ground 6 and amending ground 7 (which had been numbered 6 in the amended notice of appeal). The respondents objected to leave being granted in respect of grounds 4 and 6. They raised no objection to the amendment to the renumbered ground 7.

The Court refused leave in respect of the proposed amendments relating to grounds 4 and 6 at the time that the application was made, but reserved its reasons until the final judgment in the matter. The reasons below are the Court's reasons for its decision to refuse leave to amend those grounds.

The amendments sought to be made were as follows (the underlined portion of ground 4 being the proposed amendment to that ground). The new ground 6 is also underlined, so as to accord with the format of the proposed further amended cross-claim: "4: The Court erred in failing to consider whether the imputations conveyed by the matter complained of in the first cross claim was conveyed as fact or comment. The Court should have held that the imputations were not conveyed as fact nor comment, and the first cross respondent knew that the subject matters were neither fact nor comment to either part of the first cross claim. ... 6. Conduct of respondents and their Legal Representatives when appearing before Justice Studdert 7A hearing and before Justice Simpson in the Trial in that in both instances evidence was tendered which was obtained by improper and illegal means and put to both Judges as if it had been legally and properly obtained and in doing so the barristers for both respondents lied continuously to each Judge when they were fully aware of the impropriety of the evidence being presented, and relied upon, by the respondents."

The proposed amendment to ground 4 was intended to be supported by an affidavit of Mr Marshall of 12 pages with nearly 190 pages of annexures. It appears that some at least of this material is new material that was not in evidence in either part of the proceedings at first instance.

The respondents objected to ground 4 on the basis it made no juridical sense. The proposed amendment pleaded that the imputations were neither fact nor comment. On that basis, there was "no terrain left". An imputation could be pleaded as either fact or comment. As the respondents pointed out, this proposed pleading, in effect, confused the issues of comment and qualified privilege.

Mr Marshall submitted that there was confusion in the submissions as to whether what was pleaded in the cross-claim was comment or fact. He contended, however, that it was in fact "fiction" and informed the Court that he had provided all the details of how Mr Megna had knowingly written "a whole load of lies".

The respondents' submission in respect of ground 4 is correct and, for that reason alone, leave should be refused to amend ground 4. The proposed introduction of new evidence is a further reason to reject this amendment.

The proposed new ground 6 was intended to be supported by an affidavit of Mr Marshall of 62 pages with another 330 pages of annexures.

The respondents submitted that the issue raised by the proposed new ground 6 had not been raised at trial so that it was contrary to both principal and justice for the matter to be raised on appeal for the first time: see Coulton v Holcombe [1986] HCA 33; 162 CLR 1. Further, Mr Marshall had not raised this issue in his appeal against the jury verdict in the s 7A trial: see Tory v Megna [2007] NSWCA 13, notwithstanding that part of the complaint raised in proposed new ground 6 relates to the conduct of the s 7A trial.

Mr Marshall responded that he had attempted "in broad detail ... to uncover the facts of what took place". He also said that "all of these facts were not available" to him at the time of the s 7A trial because of the "craft" with which counsel for the opposing parties had conducted that hearing.

Again, the respondents' submission must be accepted. Not only was the issue proposed to be raised in this new ground not raised in the trial below, it was totally unrelated to the issues on the appeal. For both reasons, this ground was rejected.

A complication arose in the course of the hearing of the appeal. The appellants contended that the extended defence of qualified privilege, articulated in Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520, applied to all publications on government and political matters but the requirement that the publisher's conduct be reasonable only applied to cases of publication by the mass media. The complication that this argument raised was twofold. First, there was a question as to whether the argument had been advanced at first instance. The second was whether the argument raised a constitutional issue.

Although these issues arose on the cross-appeal, it is convenient to deal with them at the outset because they throw up for consideration the basis upon which the trial judge determined that the defence of qualified privilege applied. It also gives rise to another complication. If the appellants do not succeed in defending their success on qualified privilege on the imputations subject of the cross-appeal, they ought not to succeed on their argument on qualified privilege on the appeal. The respondents did not file a notice of contention in respect of her Honour's findings of qualified privilege in relation to the imputations that are the subject of the appeal. However, given that the arguments of both the appellants and the respondents on the question of qualified privilege were overarching, it is appropriate to overlook that irregularity, being only one of many of which all parties were guilty in this matter.

During the course of the opening address to the trial judge, senior counsel for the respondents informed her Honour that the appellants, in an interlocutory hearing, had informed the Court that they relied upon the common law defence of qualified privilege that did not include any aspect of reasonableness. Senior counsel continued, "It is common law qualified privilege other than as contained in Lange". Senior counsel for the appellants responded to this as follows: "That's basically right. My friend, I think, puts it necessarily in a summary way and, therefore, perhaps an overly simplistic way. What is said by the High Court in Lange is still relevant to the question of the availability of common law qualified privilege as a defence, but not as extended in Lange so as to include a requirement of reasonableness. There's a case referred to in Roberts v Bass in the High Court called Braddock v Bevins, which is the common law qualified privilege defence - and which you Honour is no doubt familiar with. My friend is right to the extent that he says I'm not proposing to adduce any evidence of reasonableness because it forms some elements of the defence that is raised by paragraph 39."

The trial judge, at [21], understood from this exchange that the appellants' sole defence was that of qualified privilege at common law, including as articulated in Braddock v Bevins [1948] 1 KB 580, adopted by the High Court in Roberts v Bass [2002] HCA 57; 212 CLR 1 and applied by this Court in Bennette v Cohen [2009] NSWCA 60 and Fraser v Holmes [2009] NSWCA 36. Her Honour, at [2], added: "A related defence, concerning the publication of defamatory material on political issues (see Lange v Australian Broadcasting Corporation [1997] HCA 25; (1997) 189 CLR 520) has not been invoked and expressly disclaimed. The substantial difference between what are, in effect, two strands of the same defence, is that the defence as explained in Lange requires proof, by the defendant, of reasonableness of conduct. Given that the Lange defence is not invoked, it is not necessary, in this case, for either defendant to establish that his conduct was reasonable."

The appellants submitted that they had argued a wider case than identified by the respondents in the extract above at [58], and as had been stated by her Honour at [21] of the primary judgment. The respondents accepted this may have been so, although the precise parameters of the argument before the trial judge remained obscure. The appellants nonetheless identified two arguments they said were properly before the Court. First, whether there was an occasion of qualified privilege that did not require reasonableness. Secondly, whether the principle laid down in the 'election cases' extends beyond the period in which an election is being conducted. I am satisfied that the second of these arguments was advanced in the Court below and it appears from [21] of the primary judgment, that some version of the first was also argued.

The appellants also submitted that if the cases relating to political comment in respect of elections was confined to the election period, the law required development so as to be compatible with the constitutional freedom of political communication recognised in Theophanous v Herald & Weekly Times Ltd [1994] HCA 46; 182 CLR 104 and further articulated in Lange. This led to the Court requiring notices to be given to the Attorneys General of the States and Territories pursuant to the Judiciary Act 1903 (Cth), s 78B. None of the Attorneys General sought to intervene in the proceedings in this Court. The extent to which the Court needs to deal with the questions raised in the s 78B notices will be considered later in these reasons.

Mr Megna was the Mayor of Drummoyne Local Council (the Council). Mr Lloyd was the General Manager. Mr Marshall was a resident and a one-time councillor on the Council. Mr Tory was a resident.

From about 1998 onwards, a circular was distributed in the Drummoyne municipality, purportedly under the auspices of the Drummoyne Council Ratepayers Association. There was no such organisation. Over a period of five and a half years from 1998 to 2003, approximately 28 circulars were distributed in the Drummoyne municipality. The circulars dealt with matters relating to local government issues in the Drummoyne municipality. Mr Megna and Mr Lloyd brought proceedings against Mr Marshall and Mr Tory alleging that these publications contained defamatory imputations of them.

Although there was no evidence of the actual extent of the distribution of the circulars, the evidence disclosed that there were about 12,000 rateable properties in the Drummoyne municipality and about 30,000 residents. Subsequently, with the merger of Drummoyne Council with Concord Council to form the City of Canada Bay Council in 2000, an additional 10,000 rateable properties were added to the local government area, increasing the population by approximately 25,000 persons.

There was some evidence of publication outside the Drummoyne municipality, admitted over objection. However, the respondents confined their argument on the appeal to publication within the Drummoyne municipality, but submitted that the recipients of the circulars were not necessarily residents or ratepayers. This argument was directed to denying a reciprocity of duty and interest which was at the heart of their argument on qualified privilege. The evidence disclosed that 20 per cent of ratepayers in the Drummoyne municipality were businesses. Whilst there were no figures of the percentage of persons employed in businesses who were also residents, the evidence disclosed that approximately half the employees of the Council itself were not residents. The respondents submitted that it could be inferred that that figure would be replicated in other businesses in the area. The respondents submitted that residents and persons engaged in businesses in the Drummoyne municipality, including employees, who were not ratepayers, had no necessary interest in the affairs of the Council or the conduct of the Mayor and the General Manager in respect of Council affairs.

The appellants did not accept that the extent of the publication was to all ratepaying properties in the local government areas and contended that the evidence of publication was somewhat limited. They pointed to Mr Megna's evidence that he received from or was shown copies of the circular by his mother-in-law, who was a local resident, and from members of Council staff who lived within the municipality and that he was told about the circulars by residents in Concord. However, in evidence to which the appellants did not refer, Mr Megna also said that he had seen Mr Marshall distribute the letters in a number of streets in the municipality and that on those occasions he had seen Mr Marshall place a circular in each letterbox in the street. There was also evidence from Mr Lloyd, who did not live in the municipality, that he was shown copies of the circulars when employees of the Council brought them into work.

Mr Megna pleaded that he had been defamed in 17 circulars conveying 60 imputations. Mr Lloyd pleaded he had been defamed in 15 circulars conveying 35 imputations.

In a trial before a jury conducted pursuant to the Defamation Act, s 7A, the jury found that the matters complained of contained 54 defamatory imputations of Mr Megna and 35 of Mr Lloyd. The imputations defamatory of Mr Megna included that he was incompetent as Mayor, was a sneak and, as Mayor of the Drummoyne municipality, manipulated the Council's agenda to prevent residents being able to address the Council about the performance of the General Manager. The principal defamatory imputation of Mr Lloyd was that he was incompetent as a General Manager. As is apparent from the period over which the defamatory conduct occurred and the number of publications involved, the campaign was prolonged and, on the finding of the trial judge, particularly vitriolic.

The jury made no finding as to the authorship of the circulars. Rather, the relevant guilty publication found against both Mr Marshall and Mr Tory was that they distributed the circulars. There was some evidence before the jury that Mr Marshall also had some involvement in printing the circulars. However, her Honour observed, at [7], that it is not known what the jury made of that evidence.

Following the jury's verdict and in accordance with the procedure prescribed by the Defamation Act, defences were filed by Mr Marshall and Mr Tory in which they pleaded the defamatory publications were made on occasions of qualified privilege. Mr Marshall and Mr Tory pleaded a limitation defence in respect of the defamatory imputations contained in the first circular: see the Limitation Act, s 14. Mr Marshall also pleaded fair comment. In response to the qualified privilege defence, Mr Megna and Mr Lloyd denied that the publications were made on occasions of qualified privilege and pleaded that they were motivated by malice.

The trial judge rejected the qualified privilege defence in respect of the imputations identified at [43] above as the imputations on the appeal. Her Honour upheld the defence of qualified privilege in respect of the imputations identified at [44] above as the imputations on the cross-appeal. Her Honour also rejected that the appellants were motivated by malice. Her Honour held that the first matter complained of was statute-barred. The result of her Honour's determination was that Mr Megna was successful in respect of 26 imputations in 10 circulars and Mr Lloyd was successful in respect of 7 imputations in 5 circulars.

On Mr Marshall's cross-claim the trial judge upheld the defences of qualified privilege and fair comment.

Although the above sufficiently states the outcome of the hearing, it is useful at this point to set out the issues identified by the trial judge as arising for determination and her conclusion in respect of each issue. The issues were as follows: (1) Whether the publications were made on an occasion of qualified privilege. Her Honour considered there were three strands to that inquiry: reciprocity of duty and interest, relevance to the occasion and malice: see at [50] and [175]. (2) The meaning of 'communication' for the purposes of the defence of qualified privilege. Her Honour held that a communication had to have content, that is, it had to convey information or state an opinion: see at [59] and [118]. (3) The relationship between the question of relevance to the privileged occasion and malice: see at [51]. Her Honour accepted, at [86], that the assessment of relevance to the occasion and questions of malice could share an evidentiary foundation. (4) Whether an occasion of qualified privilege may be defeated by excessive language. Her Honour concluded that the tone of a publication did not disqualify the occasion as one of qualified privilege: see at [129]. (5) Whether the principle stated in the 'election cases' was confined to the period of an election campaign. Her Honour concluded that the 'election cases' were not so confined: see at [134]-[146]. (6) Whether the defence of qualified privilege was available where there was widespread distribution. Her Honour accepted that there was in fact widespread distribution in this case but that such distribution did not defeat the defence in the circumstances where those who lived and worked in the municipality had an interest in the affairs of the Council: see at [147]-[152]. (7) Whether the fact that the publications were volunteered denied the occasion of privilege. Her Honour held that it was not the law that there had to be a 'pressing need' for a volunteered statement for the defence of qualified privilege to be available: see at [159]-[162]. This view of the legal position in respect of volunteered statements has subsequently been held by the High Court to be correct: see Papaconstuntinos v Holmes à Court [2012] HCA 53; 293 ALR 215. (8) Whether the defence of qualified privilege was available in a case where the authorship was anonymous. Her Honour rejected that the defence was unavailable in such circumstances: see at [167]-[171]. (9) Whether the abusive tone of the publications established malice. Her Honour held that the tone of the publications did not establish malice and that malice had not otherwise been made out: see at [598]-[602]; [611].

The following issues arose for determination on the appeal and the cross-appeal: (1) Whether the imputations on the appeal were published on an occasion of qualified privilege; (2) If so, whether the imputations on the appeal were relevant to the occasion of qualified privilege; (3) Whether her Honour erred in finding that the imputations on the cross-appeal were published on an occasion of qualified privilege; (4) Whether the appellants were motivated by malice; (5) Whether the defences of qualified privilege and fair comment were made out in respect of the imputations alleged in the cross-claim; (6) Whether her Honour erred in holding that the claim based on the first circular was statute-barred; (7) Whether the damages awarded were excessive; (8) Whether her Honour erred in ordering that the appellants pay the whole of the respondents' costs.

Before considering the principles that govern the defence of common law qualified privilege, a reference to the position taken by the appellants and respondents respectively is helpful so as to understand the basis upon which each sought to analyse the authorities. The appellants contended that her Honour had correctly recognised that there was no distinction, for the purposes of the defence of qualified privilege, between an 'election case' and a 'political discussion' case. Their ultimate argument was that there was a species of qualified privilege for political comment outside what was described as 'the election period' that was not qualified by the requirement of reasonableness. The respondents submitted that there was no such category and that her Honour had erred in finding that 'public interest' in a topic was sufficient to found an occasion of qualified privilege.

A person who publishes defamatory matter is protected from liability if the publication was made on an occasion of qualified privilege: see the Defamation Act, s 22 (which preserved the common law defence of qualified privilege). Legal discourse concerning the defence of qualified privilege usually commences with the following statement of Parke B in Toogood v Spyring (1834) 1 Cr M & R 181: "If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." This statement, albeit well entrenched in the jurisprudence of the law of qualified privilege, is properly to be understood as a statement of the policy behind qualified privilege and not as a complete statement of the law on the subject: Papaconstuntinos v Holmes a Court at [28]-[29].

An observation to like effect is to be found in the reasons of the plurality in Cush v Dillon [2011] HCA 30; 243 CLR 298 at [12], where their Honours said: "The defence of qualified privilege is based upon notions of public policy, that freedom of communication may in some circumstances assume more importance than an individual's right to the protection of his or her reputation. The question of whether the person making a defamatory statement was subject to some duty or was acting in the protection of some interest, in making the statement, is to be understood in this light."

In Aktas v Westpac Banking Corporation Limited [2010] HCA 25; 241 CLR 79, the plurality (French CJ, Gummow and Hayne JJ) noted, at [22], that: "In Justin v Associated Newspapers Ltd, Walsh JA said that the 'broad principle' underlying qualified privilege is that occasions exist in which it is desirable as a matter of public policy that freedom of communication should be given priority over the right of the individual to protection against loss of reputation. It also has been said that the categories (if there be utility in a system of categories) of occasions of qualified privilege are not closed and cannot be rendered exact. Cases of reciprocity, or as Griffith CJ put it, 'community of interest', supply a recognised category, which in turn has an indeterminate reference. The limits of that range of reference in a given case are to be placed by regard to the 'broad principle' identified by Walsh JA and to the remarks of Dixon J in Guise v Kouvelis as follows: 'But the very width of the principles governing qualified privilege for defamation makes it more necessary, in deciding how they apply, to make a close scrutiny of the circumstances of the case, of the situation of the parties, of the relations of all concerned and of the events leading up to and surrounding the publication.'" (citations omitted)

Kiefel J, after referring, at [89], to the "public interest in maintaining freedom of communications which are necessary to everyday life" and noting that the law regarded it as "preferable 'that individuals should occasionally suffer than that freedom of communication between persons in certain relations should be in any way impeded'", stated, at [95]-[96]: "For the defence of qualified privilege to apply there must, in the circumstances surrounding the publication of the defamatory matter, be an 'occasion' for the communication in question, as the passage from Toogood v Spyring cited above requires. In addition, the communication must be necessary to that occasion ('fairly warranted') and made with honest purpose. In determining whether there was an occasion for the making of the statement communicated, attention is principally directed to the interest the defendant had in making it. Earlier in his judgment Parke B referred to such an occasion arising where the statement is: 'fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned.' In such cases, he explained, the occasion allows for the qualified defence." (citations omitted)

Reference should also be made to the recent High Court decision Harbour Radio Pty Ltd v Trad [2012] HCA 44; 86 ALJR 1256. The issue in that case was the nature of the reciprocity of interest where there has been a public reply to public criticism. Nonetheless, the observation of the plurality (Gummow, Hayne and Bell JJ), at [20], is relevant to the circumstances of the present case, which involved publication to a large number of people: "... it is only in exceptional cases that the common law has recognised an interest or duty to publish defamatory matter to the general public": see Lange at 570.

Their Honours made the further comment, at [27], that whilst the use of vigorous language was a characteristic of public debate in Australia, "in the conduct of public affairs the law, in general, does not encourage persuasion by public vilification and by an abdication of reason".

In Lange, the Court observed, at 570, that the basis of the common law rule was that reciprocity of interest or duty was essential to a claim of qualified privilege at common law. For that reason it was only in exceptional cases that a publication of defamatory matter to the general public attracted the privilege. The Court explained why this was so, at 572: "[A]part from a few exceptional cases, the common law categories of qualified privilege protect only occasions where defamatory matter is published to a limited number of recipients. If a publication is made to a large audience, a claim of qualified privilege at common law is rejected unless, exceptionally, the members of the audience all have an interest in knowing the truth."

It will be necessary to return to Lange later in these reasons.

The trial judge's decision in this case predated the High Court's decisions in Atkas, Cush v Dillon, Papaconstuntinos and Harbour Radio v Trad. It was not suggested that these decisions changed or modified the principles relating to qualified privilege at common law, which have been well worked out in the case law. For that reason, I consider it sufficient to refer only to a small number of cases where the principle has been discussed.

It is convenient to commence with Andreyevich v Kosovich (1947) 47 SR (NSW) 357 and Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; 218 CLR 366.

In Andreyevich v Kosovich, Jordan CJ stated, at 363: "To succeed [in their defence of qualified privilege], it was necessary that [the defendants] should show by evidence that both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community of New South Wales, that it should be made with impunity, notwithstanding that it was defamatory of a third party."

This statement was directly adopted by McHugh J in Bashford, at [55], where his Honour stated: "It is of the first importance to understand that references to concepts such as 'the common convenience and welfare of society' and similar phrases record a result and explain why the communication and the relevant duty or interest gave rise to an occasion of qualified privilege. Such concepts are not the determinants of whether the occasion is privileged. They must be distinguished from the question whether society would recognise a duty or interest in the publisher making, and the recipient receiving, the communication in question."

His Honour then quoted the passage from Andreyevich v Kosovich to which I have just referred and continued, at [55]: "It is only when the defendant has a duty to publish or an interest in publishing the particular communication and the recipient has a corresponding duty or interest that the occasion is privileged. It is only when this reciprocity of duty and interest is present that the common law regards publication of the communication as being for the common convenience and welfare of society."

Although his Honour was in dissent and his statement relating to volunteered statements was rejected in Papaconstuntinos v Holmes à Court, the observations just quoted are accepted statements of general principle. See also Gummow J in Bashford at [140], who also adopted the above passage from the judgment of Jordan CJ in Andreyevich v Kosovich.

In Moit v Bristow [2005] NSWCA 322, McColl JA (Beazley JA and Campbell AJA (as his Honour then was) agreeing) stated, at [78]-[79]: "In order to determine whether a publication was made on an occasion of qualified privilege, the court examines all the circumstances of the case. These include the nature of the defamatory communication, the status or position of the publisher, the number of recipients and the nature of any interest they had in receiving it, and the time, place and manner of, and reason for, the publication. After considering these matters, the court makes a judgment as to whether the publisher had a duty or interest that justified making the publication and whether the recipients, or some of them, had a duty to receive or interest in receiving it: Bashford per McHugh J at [54]; see also Gleeson CJ, Hayne and Heydon JJ at [10]; Gummow J at [139]; Callinan J at [235]. In order to establish a publication was made on an occasion of qualified privilege, the publisher must call evidence which establishes 'that both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter, of such a kind that it was desirable as a matter of public policy, in the general interests of the whole community of New South Wales, that it should be made with impunity, notwithstanding that it was defamatory of a third party': Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363 per Jordan CJ; applied in Bashford by McHugh J at [55]; by Gummow J at [140]."

In Bennette v Cohen, at [25], Ipp JA set out a number of propositions that his Honour considered were to be derived from the authorities relating to qualified privilege, not including the extended form of privilege referred to in Lange: "(a) The test for common law qualified privilege is usually expressed at a very high level of generality and abstraction; (b) In practice, however, the close scrutiny required of all the circumstances of each case results in common law qualified privilege having a relatively limited or narrow practical application; (c) The scrutiny required depends on the facts of each case and there is no closed set of criteria that must be applied or considered, and; (d) Guidelines have been established that assist in the scrutiny that is required. These include: (i) As a matter of public policy, it must be in the general interest of the whole community that the type of material in question be published, notwithstanding that it is defamatory of a third party; (ii) The occasion must not be used for some purpose or motive foreign to the interest that protects the making of the statement. Further, there must be a significant connection between the defamatory material and the privileged occasion; (iii) The interest that gives rise to qualified privilege must be real and direct; (iv) ... (v) If a publication is made to a large audience, a claim of qualified privilege at common law will fail unless the members of the audience all have an interest in knowing the truth, and; (vi) The interest should not give officious and interfering persons a wide licence to defame."

Campbell JA, at [206], expressed agreement with these propositions. His Honour also commented upon the relationship between public interest and qualified privilege. Campbell JA, at [207], stated: "It seems uncontroversial that the notion of the public interest operates as a means of limiting the sorts of reciprocal duty or interest that can give rise to qualified privilege. However one does not enquire whether the particular statement that was defamatory was made in circumstances such that the reciprocal interest of the maker and recipient of the statement was such that the making of that statement itself advanced the welfare of society and the public interest. Rather, the requirement of public interest, for the existence of qualified privilege operates at a higher level of generality, that the duty or interest of both maker and recipient is such that it is in the public interest that a person should be free to make that type of statement in the type of circumstances where the particular statement in question was made." (original emphasis)

His Honour added, at [209], that the case law bore out that it was: "... by reference to the type of communication involved in the defamatory utterance, rather than the particular defamatory utterance itself, that the public interest is to be gauged": see Toogood v Spyring

After the trial judge's review of the authorities, her Honour stated, at [175], that the proper questions to ask, in determining whether the defence of qualified privilege had been made out, were as follows: "● were the circumstances (Moit, Baird) in which the communication was published (including, importantly, the subject matter of the communication and the identity of the publisher and the recipients) such as to give rise to the requisite duty or interest in the publisher, and the reciprocal interest in the recipient in receiving the publication, thus creating an occasion of qualified privilege? ● if the answer to the first question is in the affirmative, was the particular statement of which complaint is made sufficiently relevant (Adam v Ward, Braddock v Bevins, Mowlds v Fergusson, Bellino; contra Horrocks v Lowe) germane (Adam v Ward) or did it have sufficient connection (Bashford) to that occasion? (if the answer to either of the preceding questions is in the negative, then there is no call to proceed further. There is no defence of qualified privilege.) ● if the answer to both preceding questions is in the affirmative, was the publisher actuated by express malice?" (Her Honour had earlier, at [50], identified the same tripartite enquiry.)

Before turning to the issues on the appeal two further matters should be noted. First, a question that concerned her Honour was the intemperate language used and whether that was sufficient to deny what otherwise might have been an occasion of qualified privilege: see judgment at [53]. In this regard, at [58], her Honour referred to the following passage in Gatley on Libel and Slander, 11th ed (2008), para 14.4, quoting Huntley v Ward (1859) 6 CB (NS) 514 at 517: "In such cases, no matter how harsh, hasty, untrue or libellous the publication would be, but for the circumstances, the law declares it privileged because the amount of public inconvenience from the restriction of freedom of speech or writing would far outbalance that arising from the infliction of a private injury." (italics added)

The second matter related to what are referred to as the 'election cases'. In this regard, the respondents accepted that there was a defence of qualified privilege at common law that applied to some aspects of publication about candidates in elections. This was recognised in Braddock v Bevins, where the Court stated, at 590: "... there is a good deal of authority for the view that qualified privilege extends to communications by one elector to another in relation to a candidate at an impending election." The Court further observed, at 590-591, that there was no distinction between the interest and duty existing between electors and the interest and duty existing between an elector and a candidate.

The principle stated in Braddock v Bevins was accepted in Roberts v Bass as good law in Australia.

In answering the first of the questions posed (see at [94] above), her Honour held that the imputations subject of the cross-appeal were published on occasions of qualified privilege.

The respondents' essential complaint was that her Honour applied a wrong test of public or legitimate interest in determining that question rather than determining whether there was a reciprocal duty and interest in the communication and receipt of the information.

The appellants submitted that a communication on a political or government matter was an occasion of qualified privilege in respect of which there was no requirement of reasonableness as there was in the case of mass media publications.

As is apparent, the arguments advanced by the parties were in separate universes of legal discourse.

Her Honour, as I understand it, found the relevant publications were made on occasions of common law qualified privilege, analogous to the 'election cases'. However, so as to ensure her Honour's reasoning is correctly understood, it is appropriate to set out the particular sections of her judgment where she makes express reference to this question.

The first relevant section is found at [279]-[291], where her Honour was dealing with the fourth matter complained of which appeared in a circular dated August 1998 and was headed "POLITICAL BULL". At the time, Mr Megna was seeking pre-selection by the Liberal Party as a candidate in the State election. Her Honour explained, at [283], that the tenor of the circular was to question Mr Megna's motives about the construction of a pedestrian crossing in his electorate at a time when he was considering pre-selection for a state Liberal Party seat in an upcoming election. Her Honour considered that the clear suggestion in the article was that Mr Megna lacked bona fides and that his clear motivation in making the announcement was to further his own political ambitions.

After recording the imputation conveyed by the article, namely: "8(a): that as Mayor of the Council Mr Megna provided information which he knew to be false for an article in a local newspaper" her Honour stated: "285 Despite the DCRA heading, and the usual slogan, this item could in no way be perceived as directed to the affairs or performance of the Council. It was a direct attack upon Mr Megna in the context of his political ambitions. References to him as Mayor were incidental to that. That does not mean that it is not a subject matter that gives rise to an occasion of qualified privilege. Indeed, the conduct and record of candidates for political office is precisely the kind of subject matter that has repeatedly been held to give rise to such an occasion (Braddock v Bevins, Roberts v Bass, Fraser v Holmes). 286 There is, I accept, something incongruous about a finding that, in a circular proclaiming itself to be concerned with affairs of local government, an occasion of qualified privilege exists to protect a discussion of the merits of a candidate for State political office. But there are two answers to that: as I have said above, the title and slogan of the circulars is not determinative of the existence of such an occasion; and, in my view, the evidence shows that there existed considerable overlap between the relevant State electorate and the Drummoyne municipality. Accordingly, residents and ratepayers of the Drummoyne municipality had an interest in receiving information about any such candidate. As I have said above, the occasion of qualified privilege has to be determined by reference to the content of the individual item. Here, the context is concerned with the suitability of Mr Megna as a potential elected representative in State Parliament. That classically creates an occasion of qualified privilege. 287 I am satisfied that this was an issue on which Mr Marshall and Mr Tory had an interest in communicating information. 288 The question of reciprocity, however, needs further consideration. The evidence did not disclose directly the electorate in which Mr Megna's ambitions lay. However, it was implicit in the cross-examination, and from all of the material, including Mr Megna's history, and I am prepared to infer that it was an electorate that, at least, overlapped significantly, with the Drummoyne municipality. Accordingly, residents and ratepayers of the Council had the requisite interest in receiving information concerning Mr Megna's integrity and suitability as a candidate. 289 The occasion of qualified privilege is thus established."

The second portion of her Honour's judgment to which the respondent referred was the seventeenth matter complained of, being a publication in August/September 2003 entitled "Michael Megna - You asked for it!". The item referred to an article in a local newspaper to which the authors of the circular stated they were responding. The item characterised conduct of Mr Megna as involving "deception, self interest, political corruptness, manipulation, lie after lie, payback, cheating and straight out public dishonesty". There were then a number of pages of specific allegations. The relevant election was not due until 2004. It was in that context her Honour made the following findings: "[595] Unusually, the factual context in which this circular was published is relatively simple and uncontroversial. Mr Megna had declared an intention to contest local government elections scheduled to be held in 2004. The introduction (whether factually accurate or inaccurate) was directed entirely to his candidature, and his suitability for election by residents and ratepayers of the municipality. [596] This is a classic occasion of qualified privilege. There is nothing in the introduction (from which all imputations are derived) that is irrelevant to that. [597] Accordingly, subject to the question of malice, these imputations were published under qualified privilege." (emphasis added)

The respondents accepted, as did the appellants, that her Honour's review of the law relating to the defence of qualified privilege at common law was substantially correct. The respondents submitted that her Honour appeared to accept that, provided the subject matter of the matters complained of was of legitimate interest to the residents and ratepayers of the municipality, the publications were protected by common law qualified privilege. They submitted that the error in this approach was that her Honour elided the difference between public interest and the special and reciprocal interest, which must be established if a defamatory utterance is protected by the defence of qualified privilege: see Andreyevich v Kosovich. The respondents also contended that her Honour erred in finding that the principles discussed in the 'election cases': see Braddock v Bevins, applied outside the 'election period'.

The respondents emphasised the need to look at all the circumstances in determining whether the publication was made on an occasion of qualified privilege. They contended that the privilege was not attracted in this case having regard to the following circumstances: the fact that the circulars were distributed to every letterbox in the municipality; the anonymity of the editors and publishers of the circulars; and that the circulars were published under the auspices of a non-existent, fictitious organisation, with the attendant deceitfulness that that involved.

The fact that the editors and publishers of the circulars were anonymous and that the circulars were published under the auspices of a non-existent, fictitious organisation was of some importance to the respondents' argument that the matters complained of were not published on an occasion of qualified privilege. The respondents submitted that the appellants, whom they contended were the authors or involved in the authorship of the circulars, engaged in an apparent arms' length analysis of Council matters when, in fact, they were posturing behind the existence of a fictitious, non-existent organisation.

This factor was said to have an even more sinister aspect, in that, in posing as an organisation of concerned citizens commenting on Council matters of importance to residents and businesses in the municipality, the circulars were setting up a smokescreen as to the real intent in the publication, namely, the disparagement of the Mayor and the General Manager in strident and vituperative terms. The respondents submitted that the deceitfulness of the publications was exemplified by the praise given in them to Mr Marshall in particular, in contrast to the treatment of Mr Megna, especially at election time, in circumstances when Mr Marshall had an unrevealed connection with the publications, namely, that Mr Marshall distributed the circulars.

The respondents submitted that the trial judge erred in that her Honour did not consider all the circumstances and therefore did not consider the question of special and reciprocal interest. Rather, they submitted that her Honour determined the question of qualified privilege only on the basis of there being a public interest in particular information. The respondents submitted that the authorities are clear that public interest, of itself, is not sufficient to establish the defence of qualified privilege. The respondents focused on a number of passages in her Honour's judgment, which they contended were illustrative of the error. These are discussed below.

The respondents further contended that, as a general rule, an unrestricted publication does not attract the defence of qualified privilege: see Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 and Lange. In advancing this argument, the respondents acknowledged that publication to a wide audience may attract the privilege, as occurred in Bashford. However, in that case, a special and reciprocal interest was found in circumstances where the recipients of the information were subscribers to a specialist publication on occupational health and safety in which the defamatory imputations were published. The respondents submitted that the publications in this case were not of that kind. Although the circulars were directed to ratepayers in the municipality, the mode of circulation was by way of a letterbox drop to houses and businesses in the area. It could be assumed, therefore, that the residential population would be a mix of permanent residents, residents on the verge of leaving the municipality with no ongoing interest in the affairs of the Council, tenants, visitors, and other persons whose presence in the municipality was transitory for some reason or another.

They further argued that not all ratepayers would be residents in the municipality, if in fact the publication came to the notice of those persons. Likewise, it could not be said that all persons within the business community had an interest in the administration of the affairs of the Council. For example, employees, tradespersons and delivery drivers could not be assumed to have any interest at all in such affairs, but yet may have read the publications, given their indiscriminate distribution. Accordingly, given the wide general publication and the content of the published material, the privilege did not apply in this case.

The respondents accepted that, in accordance with principle, the public proceedings of a local council in council chambers, where councillors and the general manager engage in discussion of matters of council business, would be an occasion of qualified privilege. The respondents also accepted that a complaint made by a ratepayer about some aspect of council's business would also be protected by qualified privilege. However, they submitted that qualified privilege would not protect the distribution of a ratepayer's complaint to residents in the municipality. The respondents submitted that the trial judge erred in concluding that, provided the subject matter of the communication was of legitimate interest to ratepayers, the privilege was attracted. The error, in the respondents' submission, was that, as previously mentioned, her Honour elided the concept of the public interest and the special and reciprocal interest necessary to attract the privilege.

The respondents next submitted that given the extent of the publication, the privilege would only have been attracted if the matter fell within the extended category of qualified privilege within the High Court's characterisation in Lange. In this regard, the respondents accepted that the law of defamation generally does not inhibit vigorous debate as to matters of political or governmental interest. However, they contended that defamation of a person on an occasion of political debate was not protected by the privilege unless it fell within the 'election case' category, which they argued did not apply, or was within the Lange extension.

Two matters flowed from the argument on the Lange extension. First, if the matter fell within the extended category of qualified privilege, it was necessary for the trial judge to have determined the reasonableness of the publication. She did not do so, because reasonableness was eschewed. Secondly, the respondents contended that the appellants had expressly disavowed any reliance on the extended category. That meant that the claim for qualified privilege must fail, as the distribution was too extensive for there to have been the necessary reciprocity of interest or duty. The respondents accepted that the content of most of the publications contained information about the affairs and administration of the Council and in that respect would have attracted the Lange defence if the test of reasonableness was made out.

This last submission led to a consideration of the next matter, namely, what is the "interest" that falls to be protected by the defence of qualified privilege. Given that the privilege is available where there is a reciprocity of duty or interest, there can be no closed category of cases that would constitute an interest for this purpose.

In Howe v Lees, in a passage quoted with approval by Gummow J at 421 in Bashford, Higgins J stated, at 398, of the word 'interest': "[T]he word 'interest', as used in the cases, is not used in any technical sense. It is used in the broadest popular sense, as when we say that a man is 'interested' in knowing a fact - not interested in it as a matter of gossip or curiosity, but as a matter of substance apart from its mere quality as news". See also Gatley on Libel and Slander, par 14.13.

The respondents accepted that, in general terms, a relevant interest would be where the provision of the information would assist the recipient to make an important decision or to decide upon a particular course of action: see Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354 at 358. They contended that this description related to one side only of the duty or interest requirement. There has to be a reciprocity of duty or interest. This was demonstrated in Bashford and Bennette v Cohen. They argued against there being any such reciprocity in this case, and in any event, none was argued by the appellants.

The respondents submitted that whatever explanation or description was given to an interest that fell within the privilege, it was established law that a relevant interest did not exist merely because a publication was in respect of public interest: see Morosi v Mirror Newspapers where the Court (Moffitt P, Hope and Reynolds JJA) stated, at 778: "It is apparent from these decisions and dicta that, at common law, a publication in a newspaper is not the subject of qualified privilege merely because it gives the public information concerning a matter in respect of which the public is interested. Something more is needed which is said in some circumstances to constitute a duty, and in other circumstances an interest, on the part of the newspaper to communicate the information."

The Court further stated, at 792: "Newspapers play an important role in our society, but that role does not call for an unrestricted licence to defame people, simply because it can be shown that the defamatory material was part of an article or other form of publication on a matter of public interest, and that the publication was not malicious. Defamatory publications on matters of public interest are protected under the common law, and by statute, in various ways, but something more than mere public interest is required. It may be truth; or it may be reasonableness, in all the circumstances, of the conduct of the publisher in making the publication; or it may be some other requirement."

The respondent submitted that her Honour's erroneous approach can be discerned from a consideration of the following passages of her judgment: "[181] In general terms, what was published by Mr Marshall was published because of his interest, as a Councillor himself, in the affairs of the Council, and was published by him to electors, ratepayers and residents of the municipality, and, (probably) occasionally to others (such as employees of businesses) who used Council facilities, and were affected to some degree, by the manner in which the Council was administered. If the content of the circulars were uniformly the affairs and administration of the Council, it would be a relatively short and easy step to conclude that the occasion of each publication was one of qualified privilege. But that the general purpose of the circulars, as proclaimed in the heading and slogan, was to deal with affairs and administration of the Council, does not necessarily mean that every item in every circular, when examined, contained information about Council business. The mere fact that the circulars bore the banner heading, and the slogan, that they did, does not mean that the entirety of their contents related to those matters. Each item must be considered individually. ... [184] The evidence on the whole establishes to my satisfaction that, where the subject matter of any item is properly to be seen as Council business and affairs, the necessary reciprocity of interest in that subject matter between Mr Marshall and those to whom the circulars were distributed is demonstrated. In this respect the analogy with election cases is obvious. It does not, however, necessarily follow that each (or, indeed any) individual item is properly to be construed as directed to that subject matter. [185] Because Mr Tory is a resident and ratepayer, I am satisfied that he, too, had an interest on that basis alone in communicating with residents and ratepayers with respect to Council affairs. The evidence shows that he has taken an active interest in Council affairs. To some extent, that enhances his interest. ... [189] For the purpose of the first question, I will proceed upon the basis (as mentioned earlier in this judgment) that Mr Marshall was a Councillor on the Council; that Mr Tory had a relevant interest in Council matters; and that the circulars were distributed to recipients who were ratepayers and residents of the Drummoyne municipality, and had a legitimate interest in receiving information (and opinion or comment) on the functioning of the Council and its Councillors including its Mayor." (emphases added)

The respondents next referred to a number of individual publications and her Honour's determination in respect of them as further exemplifications of the error they alleged.

The first matter complained of contained two sections giving rise to defamatory imputations. In respect of the second of those, the material appeared under a heading, "CHUMMY CHUMS, COMFY COMFORT". Her Honour summarised the content of the publication as follows: "205 This item opened with reference to a Council business paper that advised that three named Councillors (one of whom was Mr Megna) had recently completed an annual performance review of Mr Lloyd. It went on to assert that Mr Lloyd had been in the position for four years but: '... no one can recall when the last annual review was undertaken!' (bold and underlining in original) 206 It said that there had been no previous review in three years, at least in public and then: 'The fact is - there wasn't one!' 207 The item went on to query the composition of the group selected to conduct the review, suggesting (in scarcely veiled terms) a lack of transparency and impartiality. It asserted that the terms of the contract remained confidential. It queried the credentials of Mr Megna and another Councillor to conduct the review. It concluded with a series of rhetorical questions plainly suggesting that the review was conducted in circumstances less than impartial, and ended with these words: 'Sounds a bit too 'clubby' for this Association, almost 'goo goo', except for the seriousness of the matter.'"

The defamatory imputations arising from the publication were: "● 2(a): that as Mayor of the Council Mr Megna had not been impartial in his appraisal of the performance of Mr Lloyd; ● 2(b): that as Mayor of the Council Mr Megna had not acted in the interests of residents; ● 2(c): that as Mayor of the Council Mr Megna had engaged in personal favouritism in his attitude to the performance of the Council's General Manager."

Her Honour held that the matter was published on an occasion of qualified privilege, for the following reasons: "[215] In my opinion, it can been seen from the terms of the circular itself that the issues it raised concerned the administration of the Council - compliance with the terms of Mr Lloyd's contract of employment, a system for ensuring that the annual review clause it contained was implemented, and that the review was carried out in an impartial and unbiased fashion, were matters of legitimate concern to residents and ratepayers of the municipality. [216] The terms of Mr Lloyd's contract, compliance with its conditions, and Mr Lloyd's performance, are all matters on which Mr Marshall and Mr Tory had an interest in informing residents and ratepayers and on which residents and ratepayers had a reciprocal interest in receiving information." (emphases added)

The respondents submitted that her Honour's reference to "legitimate concern" was synonymous with the public interest.

The next example related to the third matter complained of. Her Honour observed, at [239], that observations concerning Mr Lloyd's competence as general manager "[gave] rise to an occasion of qualified privilege". Her Honour continued, at [240]: "... it is, nevertheless, a subject matter of relevance to ratepayers and residents. Even on that characterisation, the item was published on an occasion of qualified privilege."

The error in this paragraph, according to the respondents, was that her Honour was using the concept of relevance to determine that the publication was on an occasion of qualified privilege. That is, she had determined that because the material was relevant, there was thereby a reciprocity of interest. The respondents contended, however, that relevance does not create the occasion of qualified privilege. Rather, the question of relevance only comes into play if the publisher of the defamatory material has first established that the publication was on an occasion of qualified privilege.

Other paragraphs that the respondents asserted exemplified the error were: "[258] The meeting times of Council are a matter within the general topic of Council affairs; specifically, the manner in which significant changes to meeting times is brought about is a matter on which Mr Marshall and Mr Tory had an interest in communicating with residents and ratepayers, and residents and ratepayers had a reciprocal interest in receiving. This item was, and these imputations were, published on an occasion of qualified privilege. ... [276] I am satisfied that the issue of the sale of the land was a matter of significant interest to Mr Marshall and Mr Tory, to the residents and ratepayers of Drummoyne, and therefore created an occasion of qualified privilege. I am further satisfied that what was contained in this item was relevant to that occasion. ... [286] There is, I accept, something incongruous about a finding that, in a circular proclaiming itself to be concerned with affairs of local government, an occasion of qualified privilege exists to protect a discussion of the merits of a candidate for State political office. But there are two answers to that: as I have said above, the title and slogan of the circulars is not determinative of the existence of such an occasion; and, in my view, the evidence shows that there existed considerable overlap between the relevant State electorate and the Drummoyne municipality. Accordingly, residents and ratepayers of the Drummoyne municipality had an interest in receiving information about any such candidate. As I have said above, the occasion of qualified privilege has to be determined by reference to the content of the individual item. Here, the context is concerned with the suitability of Mr Megna as a potential elected representative in State Parliament. That classically creates an occasion of qualified privilege."

At [318], her Honour used the language of "legitimate interest" in relation to the impact of the 2000 Sydney Olympic Games on traffic and business in the municipality. Her Honour found, at [381], that: "The remaining question is whether what was published in this circular was relevant to the occasion of qualified privilege. I am satisfied that it was."

Her Honour stated, at [396]: "The present issue is not whether Mr Lloyd or the author of the circular was right or wrong, but whether the issue was of sufficient public interest to create an occasion of qualified privilege. I am satisfied that it was. This was a matter of considerable debate and division within the municipality." (emphasis added)

Her Honour held, at [410], that the advertising of general meetings to allow interested residents and ratepayers to attend was "a matter of sufficient interest to those residents and ratepayers" as to be an occasion of qualified privilege. At [435], her Honour made reference to a matter being of "legitimate interest to residents". Likewise, at [517]-[522], her Honour referred to a number of matters that were "legitimate questions"; "of legitimate interest to residents and ratepayers"; and of "legitimate public interest ... published on an occasion of qualified interest".

Another example, which perhaps summarises her Honour's approach, is to be found at [539]: "Again somewhat reluctantly, I am satisfied that either the subject matter of access to Council files by Councillors, or the integrity and probity of the Council's Mayor and General Manager, are legitimate subject matters for the communication of information between Mr Marshall and Mr Tory and residents and ratepayers. Accordingly, these imputations were published on an occasion of qualified privilege."

Simpson J included in her review of the case law a reference to the judgment of McHugh J in Stephens v West Australian Newspapers Ltd [1994] HCA 45; 182 CLR 211. Her Honour did so in respect of the 'election cases', which I discuss below in a different context. However, I deal with her Honour's reference to Stephens at this point as it provides a significant insight to her overall reasoning on the question of qualified privilege. Her Honour referred to the following remarks of McHugh J at 261-262: "As the decided cases show, however, circumstances may exist where the interest of the general public in a particular subject is such that a defence of qualified privilege is available even though the communication is made to the general public by means of a newspaper or other medium of general circulation. If a subject is one of public interest, members of the public have the requisite interest in receiving information on that subject from persons who have a corresponding interest or duty to communicate that information to the general public. If such information is published in good faith, both the author and the publisher of the article are protected 'for the common convenience and welfare of society'." At 264-265, his Honour said: "In the last decade of the 20th century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys. How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community. Information concerning the exercise of those functions and powers is of vital concern to the community. So is the performance of the public representatives and officials who are invested with them. It follows in my opinion that the general public has a legitimate interest in receiving information concerning matters relevant to the exercise of public functions and powers vested in public representatives and officials. Moreover, a narrow view should not be taken of the matters about which the general public has an interest in receiving information. With the increasing integration of the social, economic and political life of Australia, it is difficult to contend that the exercise or failure to exercise public functions or powers at any particular level of government or administration, or in any part of the country, is not of relevant interest to the public of Australia generally. If this legitimate interest of the public is to be properly served, it must also follow that on occasions persons with special knowledge concerning the exercise of public functions or powers or the performance by public representatives or officials of their duties will have a corresponding duty or interest to communicate information concerning such functions, powers and performances to members of the general public ... Accordingly, it is now appropriate for the common law to declare that it is for 'the common convenience and welfare' of Australian society that the existing categories of qualified privilege be extended to protect communications made to the general public by persons with special knowledge concerning the exercise of public functions or powers or the performance of their duties by public representatives or officials invested with those functions and powers."

The following matters should be noted in respect of her Honour's reference to McHugh J's judgment in Stephens v West Australian Newspapers Ltd. First, Stephens v West Australian Newspapers Ltd predated the decision in Lange which is discussed below. Secondly, McHugh J joined in the Court decision in Lange. Thirdly, most importantly for the present discussion, although the second of the paragraphs referred to above was quoted by the Court in Lange, the last paragraph was not. When one has regard to the entirety of her Honour's judgment, it is hard to resist the conclusion that her Honour was influenced by the terms in which McHugh J characterised an occasion of common law qualified privilege. With respect to her Honour, and subject to the matter raised in the s 78B notice, the position is now as stated in Lange.

If the respondents are correct that her Honour was in effect applying a general notion of public interest as being sufficient to establish an occasion of qualified privilege, then their submission should be upheld. However, it is not clear that is what her Honour did. As I have indicated, her Honour appeared to accept that, analogously with the 'election cases', there was a form of 'public interest' that was sufficient of itself to be an occasion of qualified privilege. As I understand the respondents' argument, that is how they interpret her Honour's reasons.

The respondents submitted that the common law qualified privilege that attaches to statements on government and political matters in respect of election matters applies only during "the election period", which, on the respondents' argument, was the period from the close of nominations until the election. In support of this submission, the respondents advanced the following propositions. First, the relevant interest is one directed to electors making an informed choice as to the person for whom they vote. That choice is made at the end of the election period. Secondly, the candidates are not necessarily known until nominations close. Thirdly, it is not until the group of candidates is finally known that the policies of the various candidates can be properly assessed against the policies being advanced by other candidates. This is so notwithstanding that some candidates may have been electioneering at an earlier point of time

On the assumption that these propositions were correct, the respondents submitted that her Honour's apparent reliance upon the privilege that protects defamatory matter directed at a political candidate, at [285]-[288] and [595]-[597] (set out above at [104]-[105]), was erroneous, because the publications fell outside the election period.

The appellants submitted that the principles stated in the 'election cases' are an exposition of the traditional common law defence of qualified privilege and that the principles so expounded are not confined to publications made in the election period. The appellants submitted that Lange, at 561, was authority for this proposition and support for it was also to be found in the comments of the plurality in Roberts v Bass. Mr Tory accepted that he had not invoked the extended Lange defence of qualified privilege. Rather, his argument had been that there was a common law defence of qualified privilege discussed in Lange that did not require reasonableness. As I understand Mr Marshall to have adopted the arguments advanced by Mr Tory, it is not necessary to distinguish between the submissions of the appellants on this issue.

Mr Tory conceded that if reasonableness was a requirement of the occasion of qualified privilege that he invoked, he had not made out any such case. Although Mr Marshall did not make the same concession, it is apparent from the material before the Court that Mr Marshall had not attempted to make out a case of reasonableness at trial. However, the appellants contended that the requirement of reasonableness, enunciated in Lange as a necessary condition for an occasion of qualified privilege in the extended sense, only applied in the case of mass media publications. They contended that their case at trial was that the circulars were not mass media publications, so that it was not necessary for them to establish the reasonableness of the matters complained of.

In short, the appellants submitted Lange established that if the subject matter of the communication was political discussion, it was not necessary to examine all the circumstances to determine whether it was an occasion of qualified privilege in the sense discussed in the authorities such as: Andreyevich v Kosovich; Guise v Kouvelis [1947] HCA 13; 74 CLR 102; and Bashford. Rather, a communication on political or government matters itself was an occasion of qualified privilege and it was only where the publication was to the public at large that there was a requirement of reasonableness. As the submission was finally articulated it was that the proposition the appellants advanced, "flowed from Lange itself" and "from Roberts v Bass properly understood".

The appellants submitted that at trial they had also invoked the principles stated in Braddock v Bevins, which had been recognised by the High Court in Roberts v Bass and, if necessary, they relied on those principles on the appeal. Subject to the matter referred to in the next paragraph, the appellants accepted that if Lange did not stand for the proposition they advanced, their defence was reliant upon the principles stated in Braddock v Bevins. It was inherent in this argument that the 'election cases' were not confined to the election period as the respondents had submitted.

The appellants also contended that if Lange was not authority for the proposition that a publication on a matter of political or government interest was itself an occasion of qualified privilege, or the 'election cases' were in fact confined to the election period, the law should be developed so as to encompass that proposition. This argument raised what was referred to in the course of the appeal as the 'Constitutional Issue'.

The following questions emerge from these submissions; (1) Is the principle stated in the 'election cases' confined to the election period? (2) Is there an independent category of qualified privilege involving dissemination of political matter that does not import the requirement of reasonableness? (3) If not, should the law be developed so as to encompass such a category?

Although none of the authorities make specific reference to the time over which the privilege afforded by the 'election cases' extends, they all involved situations where the publications were made during the election period. However, in support of their submission that the 'election cases' involved the protection of political comment not restricted in time, the appellants relied upon comments in Lange especially, at 561, where the Court stated: "If the freedom is to effectively serve the purpose of ss 7 and 24 and related sections [of the Constitution], it cannot be confined to the election period. Most of the matters necessary to enable 'the people' to make an informed choice will occur during the period between the holding of one, and the calling of the next, election. If the freedom to receive and disseminate information were confined to election periods, the electors would be deprived of the greater part of the information necessary to make an effective choice at the election." (emphasis added)

That the Court in Lange was stating a general principle in this passage is not borne out by Roberts v Bass, where there are various statements indicating that the 'election cases' are confined to a period that is at least proximate to the holding of an election, even if not as closely confined as the respondents submitted. Thus, Gleeson CJ observed, at [14]: "As Braddock v Bevins makes clear, when, in the course of an election contest, political views damaging to the reputation of a candidate, deliberately intended to harm his or her prospects of election, are published, what attracts the qualified privilege is interest in the honest expression of views, no matter how strongly put, and no matter how unreasonable they may be. The purpose of the privilege is not to protect dishonesty, or to permit the communication of anything that is represented to be a view, whether or not it is in fact genuinely held." (emphasis added)

The plurality (Gaudron, McHugh and Gummow JJ) observed, at [73], that Lange: "... was not concerned with statements made by electors or candidates or those working for a candidate, during an election, to electors in a State electorate, concerning the record and suitability of a candidate for election to a State Parliament". (emphasis added)

Their Honours, in the same paragraph, made the following observations in respect of statements made during an election period: "Such statements are at the heart of the freedom of communication protected by the Constitution. They are published to a comparatively small audience, most of whom have an immediate and direct interest in receiving information, arguments, facts and opinions concerning the candidates and their policies. In that context and constitutional framework, the application of traditional qualified privilege requires a holding that qualified privilege attaches to statements by electors, candidates and their helpers published to the electors of a State electorate on matters relevant to the record and suitability of candidates for the election." (emphasis added)

The statement in Lange, at 561, upon which the appellants relied, was made in the context of the Court considering whether the law of defamation was inconsistent with the Constitution insofar as it fettered comment on political and government matters. In that context the Court held, at 571, that the law of defamation needed to be developed to take into account the legitimate interest of all members of the Australian community in being informed on such matters. However, that interest did not give rise to an unfettered right to make statements on such matters. The Court considered that the necessary condition attaching to the exercise of the right to make such statements was reasonableness. The Court's remarks that communications on such matters was not to be confined to the election period are to be read in the context of communications on political and government matters to a mass and indiscriminate audience.

Not only was the Court in Lange not concerned with the traditional category of common law qualified privilege of the type found in the 'election cases', it is apparent from the passages from Roberts v Bass referred to above that the High Court viewed those cases as involving a recognised occasion of common law privilege, relating to a certain period, involving identifiable persons and with a content that related to the election or the election campaign.

The question immediately under consideration is whether the traditional defence of common qualified privilege, recognised in the species of case referred to as the 'election cases', is confined to a period that bears a relationship to the holding of an election. In my opinion, it would be too prescriptive and arbitrary to find that it was confined to the period after nominations close, as argued by the respondents. It is well known that electioneering by candidates frequently occurs before that period and, in any event, electors may be unaware, and indeed are unlikely to be aware of the date that nominations close. It would be strange if the protection given by the privilege to comments of the type recognised in the 'election cases' was not available during the course of active electioneering for an upcoming election notwithstanding that the date for the election had not been set.

At the other end of the spectrum, it would stretch the limits of the law of defamation for the principle to apply to comments made at any time between set election periods, as occurs in some States, and in local government elections, or even between the end of one election and the anticipated next election dates. To allow the protection to apply for such unrestricted periods, would, in my opinion, be inconsistent with its underlying rationale, which is discernable in the comments of the plurality (Gaudron, McHugh and Gummow JJ) in Roberts v Bass, at [73].

Given, as I consider is the case, there will be no precise rule as to when the period during which the privilege will attach other than that the statements must be made proximate to an election, which has been called or is otherwise to be held, the question whether the privilege attaches will involve a factual inquiry and an evaluation of the circumstances to see whether the communication was on an occasion of qualified privilege.

If I am correct in this conclusion, the matters complained of in this case were not protected by the privilege discussed in the 'election cases'. Rather, they were all part of a sustained campaign over a long period of time, and were either entirely unrelated to an election or, in the case of the comments relating to Mr Megna, standing for pre-selection for State election, were made in respect of an election that was not to be held until the following year.

That leads to a consideration of the second of the three questions outlined at [144] above, which is one of the two central issues raised in the s 78B Notice. As this matter was raised in the Court below, albeit in an alarmingly non-specific way, it is appropriate to express my views on the proposition now advanced. I say alarming, because it is inappropriate and indeed unfair, that a trial judge should have been led into determining a matter without having been advised of the precise way the argument was being put and without the benefit of submissions relevant to the argument being advanced.

Senior counsel for Mr Tory submitted that the Court in Lange, at 571, recognised an occasion of qualified privilege in respect of political speech, unfettered by a requirement of reasonableness. In considering the passage upon which Mr Tory relied, it is necessary to consider the context in which the Court made its comments, which commences in the Court's reasons at 560-561. The passage is lengthy and part of it has already been subject of discussion in these reasons. Nonetheless, it needs to be set out in full: "Communications concerning political or government matters between the electors and the elected representatives, between the electors and the candidates for election and between the electors themselves were central to the system of representative government, as it was understood at federation. While the system of representative government for which the Constitution provides does not expressly mention freedom of communication, it can hardly be doubted, given the history of representative government and the holding of elections under that system in Australia prior to federation, that the elections for which the Constitution provides were intended to be free elections in the sense explained by Birch. Furthermore, because the choice given by ss 7 and 24 must be a true choice with 'an opportunity to gain an appreciation of the available alternatives', as Dawson J pointed out in Australian Capital Television Pty Ltd v The Commonwealth, legislative power cannot support an absolute denial of access by the people to relevant information about the functioning of government in Australia and about the policies of political parties and candidates for election. That being so, ss 7 and 24 and the related sections of the Constitution necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors. Those sections do not confer personal rights on individuals. Rather they preclude the curtailment of the protected freedom by the exercise of legislative or executive power. As Deane J said in Theophanous, they are 'a limitation or confinement of laws and powers [which] gives rise to a pro tanto immunity on the part of the citizen from being adversely affected by those laws or by the exercise of those powers rather than to a 'right' in the strict sense'. In Cunliffe v The Commonwealth, Brennan J pointed out that the freedom confers no rights on individuals and, to the extent that the freedom rests upon implication, that implication defines the nature and extent of the freedom. His Honour said: 'The implication is negative in nature: it invalidates laws and consequently creates an area of immunity from legal control, particularly from legislative control.' If the freedom is to effectively serve the purpose of ss 7 and 24 and related sections, it cannot be confined to the election period. Most of the matters necessary to enable 'the people' to make an informed choice will occur during the period between the holding of one, and the calling of the next, election. If the freedom to receive and disseminate information were confined to election periods, the electors would be deprived of the greater part of the information necessary to make an effective choice at the election." (citations omitted) (emphasis added).

Lange confirmed the traditional category of qualified privilege, which except for a limited category of cases, protected publications to a limited audience where the circumstances established a reciprocity of duty and interest: Lange at 572. The Court referred to Adam v Ward [1917] AC 309 and Loveday v Sun Newspapers Ltd [1938] HCA 28; 59 CLR 503, each of which involved publications in reply to attacks on a plaintiff to the world at large as being within the limited category of cases: see Harbour Radio v Trad.

Lange then held that, consistently with the constitutional freedom of political communication, there was also recognised an extended form of qualified privilege which protects a publication, made to a mass audience, that deals with government and political matters, provided that the publisher's conduct is reasonable: Lange at 573. As the Court had earlier stated, at 571, such protection is available because: "... the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. The duty to disseminate such information is simply the correlative of the interest in receiving it. The common convenience and welfare of Australian society are advanced by discussion - the giving and receiving of information - about government and political matters. The interest that each member of the Australian community has in such a discussion extends the categories of qualified privilege." (emphasis added)

The protection afforded by the extended category of qualified privilege was stated to apply to discussion of government and political matters, at both State and local government level, regardless of whether the discussion bore on matters at the federal level: Lange at 571.

At 572, the Court analysed the conditions upon which the extended category of qualified privilege should depend. Their Honours first noted that, at common law, the defence was available provided that a publication was made honestly and without malice. That test, however, was not appropriate where the publication was in respect of government or political matters to a large audience. Rather, as their Honours concluded, at 573, "reasonableness of conduct" was the "appropriate criterion" when the privilege was claimed for a publication in relation to government and political matters. Their Honours, at 573, added: "But reasonableness of conduct is imported as an element only when the extended category of qualified privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience."

The Court emphasised that "[r]easonableness of conduct" was only a required element where a publication as to government or political matters would not otherwise have attracted the defence.

The appellants relied upon the portion of the passage, at 571, that is emphasised above, as establishing that communications on political and government matters are occasions of privilege without the need to examine all of the circumstances.

The appellants submitted that support for their argument was also to be found in Roberts v Bass. That case was concerned with malice. Nonetheless, various observations were made in the judgments of Gleeson CJ and the plurality relating to qualified privilege generally, which touch upon the question presently in issue. Gleeson CJ, in particular, noted that there appeared to be a present incongruity in the law relating to political discussion. As his Honour observed, at [3]: "The need for the common law to conform to the Constitution is difficult to reconcile with the co-existence of two significantly different tests for qualified privilege in the context of political debate: the first, the test for common law qualified privilege as recognised in Braddock v Bevins; the second, the test formulated by this Court in Lange." (citation omitted)

His Honour expressed a similar concern, at [4], when he stated: "If ... there is one category of common law privilege relating to communications to thousands of electors in the course of an election, of the kind recognised in Braddock v Bevins, and another category relating to communications to the general public about political matters, of the kind recognised in Lange, then it seems clear that there is a substantial difference between them. Why this should be so, as a matter of principle, is difficult to understand. The law of defamation, including the law as to qualified privilege, strikes a balance between competing interests. Those interests include the public interest in freedom of political debate, which is essential to the functioning of representative democracy. Why should the balance that applies when a newspaper with a wide circulation publishes an article about the Prime Minister, or the Leader of the Opposition, differ from the balance that applies when someone distributes throughout an electorate a pamphlet urging electors to vote against the sitting member?"

These passages do not support the appellants' argument. Apart from drawing attention to the incongruity to which I have referred, the Chief Justice's comments confirm the substantial difference that exists between the traditional defence of qualified privilege of which the 'election cases' form part, and the defence as extended in Lange. There is nothing in these passages that would suggest that there is an independent category of qualified privilege attaching to political comment, that do not fall within the 'election cases', and in respect of which there is no requirement of reasonableness.

The plurality in Roberts v Bass, at [68]-[69], further observed that: "Three points in particular should be noted concerning the development of the defence of qualified privilege in Lange. First, in extending the law of qualified privilege to protect publications concerning governmental and political matters to mass audiences, the Court imposed as a condition of the extended privilege that the publisher's conduct be reasonable. But the Court emphasised: 'reasonableness of conduct is imported as an element only when the extended category of qualified privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience. For example, reasonableness of conduct is not an element of that qualified privilege which protects a member of the public who makes a complaint to a Minister concerning the administration of his or her department. Reasonableness of conduct is an element for the judge to consider only when a publication concerning a government or political matter is made in circumstances that, under the English common law, would have failed to attract a defence of qualified privilege.' Secondly, in Lange, the Court held that, having regard to the subject matters of government and politics, the motive of causing political damage to the plaintiff or his or her party is not an improper motive that would destroy a defence of qualified privilege. The Court also held that the vigour of an attack or the pungency of a defamatory statement concerning such matters cannot, without more, discharge the plaintiff's onus on the issue of malice. Thirdly, in some respects the Court's development of the law of qualified privilege extended beyond what was required for conformity with the constitutional norm. The present case concerns publications relating to the record and policies of a candidate for election to State Parliament for the seat of Florey. They were directed to, and generally received by, a limited class of persons the electors in the seat of Florey. As will appear, the traditional common law defence of qualified privilege protects such publications because the reciprocity of interest required for the traditional defence is present. As will also appear, given the decision in Lange, that privilege will not be lost because the publisher intends to cause political damage to the candidate or his or her party. Nor will the privilege be lost merely because of the vigour of an attack on a candidate for election to Parliament that is contained in a defamatory statement concerning the record and policies of the candidate. Without more, the vigour of the attack is not evidence of improper motive. As pointed out below, the privilege will be lost only if it is used for a purpose other than that for which it is granted in this case, the communicating of information, arguments, facts and opinions concerning Bass and his policies to the electors of Florey. Thus, although the common law rules of defamation make defamatory statements concerning a candidate for election actionable and impose a burden on an elector's freedom of communication, those rules also protect an elector who uses the occasion for the purpose that gives rise to the constitutional freedom. Hence the burden does not affect what is required to give effect to the constitutional freedom." (citations omitted)

In my opinion, these passages do not support the appellants' argument. Rather, they are a confirmation of the existence of the two categories of qualified privilege. However, the appellants relied upon the further observations of the plurality, at [73], that Lange did not "exhaustively [define] the constitutional freedom's impact on the law of defamation". Rather Lange had "dealt with publications to the general public by the general media concerning 'government and political matters'" and not with statements made during an election by electors or candidates, or those working for a candidate, "concerning the record and suitability of a candidate for election to a State Parliament". In respect of traditional common law qualified privilege, including its application to the election cases, their Honours observed that statements falling into these categories: "... are at the heart of the freedom of communication protected by the Constitution. They are published to a comparatively small audience, most of whom have an immediate and direct interest in receiving information, arguments, facts and opinions concerning the candidates and their policies. In that context and constitutional framework, the application of traditional qualified privilege requires a holding that qualified privilege attaches to statements by electors, candidates and their helpers published to the electors of a State electorate on matters relevant to the record and suitability of candidates for the election."

The appellants' argument, as I understand it, required acceptance of the following propositions. First, Lange recognised the constitutional protection of freedom of communication concerning political or government matters. Secondly, that freedom was not confined to the election period. Thirdly, there was a reciprocity in the provision and receipt of such communications. It was not necessary, therefore, in such cases to consider all the circumstances to determine whether there was an occasion of qualified privilege. Fourthly, given that the High Court recognised that discussion of government or political matters at State and local government levels was amenable to protection by the extended category, it followed that discussion on those matters fell within the recognised and accepted constitutional freedom concerning political or government matters generally. Finally, and most importantly for the appellants' argument, the requirement of reasonableness only applied in respect of communications in the mass media.

It cannot be accepted that the Court's statement in Lange, at 560-561, provides support for the appellants' argument that there is a constitutionally protected freedom of communications concerning political or governmental matters: "... between the electors and the elected representatives, between the electors and the candidates for election and between the electors themselves".

In the context of directing attention to such communications, the Court stated, at 561, that the constitutional freedom enjoyed by such persons was not confined to the election period. Those remarks were made in a section of the judgment where the Court expressed its recognition of traditional common law qualified privilege, of which the 'election cases' are a species. The question which arises, therefore, is whether the Court was thereby saying that publications on political and government matters, not being mass media publications, were protected occasions of qualified privilege of an independent category from the traditional defence.

As I have indicated, this was the subject of comment in Roberts v Bass. I have expressed my opinion as to the nature of the observations made by Gleeson CJ at [3]-[4]. His Honour's comments, at [14], recognised that the 'election cases' involve the application of traditional qualified privilege. To the extent the plurality made a comment on the 'election cases', they did so by way of observation, at [73], that Lange: "... was not concerned with statements made by electors or candidates or those working for a candidate, during an election, to electors in a State electorate, concerning the record and suitability of a candidate for election to a State Parliament."

It should be noted that comments in Roberts v Bass, to which I have referred, were obiter, as the Court confined the parties to the basis upon which the proceedings had been conducted at first instance and on appeal, namely, whether any defence of qualified privilege was defeated by malice.

An apparent attempt to carve out or create a third area of qualified privilege, not within the traditional common law approach and unaffected by the requirement of reasonableness, was rejected by Basten JA in The Korean Times Pty Ltd & Anor v Un Dok Pak [2011] NSWCA 365. His Honour, at [30], considered that it was apparent from Roberts v Bass "that there [was] no room for some third category of cases, limited only by a requirement of honesty of purpose". Rather, as his Honour explained, at [33]: "... there may be cases, like the present one and Roberts v Bass, where a defendant whose publication appears to fall squarely within the scope of the expanded doctrine, seeks to rely upon the traditional scope of the defence, thus avoiding the need to prove the reasonableness of their conduct. That there may be an area of overlap, does not, however, demonstrate that there is a third category, involving an extension of the conventional area, but governed only by an exclusion for malice or abuse of purpose."

In my opinion, neither Lange nor Roberts v Bass provides support for the appellants' argument. Neither case creates or supports an argument for the existence of an independent category of case, which does not fall within the traditional category of qualified privilege and which is unconfined by the requirement of reasonableness. Although in The Korean Times v Un Dok Pak, I did not join in the comments of Basten JA to which I have just referred as I considered the case was properly determined on a different basis, I agree with his Honour's remarks that the authorities do not establish a third category of qualified privilege.

The appellants did not argue in the Court below that their conduct was reasonable, and accepted in this Court that they had not made out a case of reasonableness. It follows, therefore, that their claim that the publications were protected by an independent category of qualified privilege that did not require reasonableness, fails.

Mr Lloyd submitted that even if it was sufficient for the appellants to establish a public interest or legitimate concern that the ratepayers and residents would have in the affairs of the Council, his position was different, as he was not an elected member of the Council, but was a public official.

In my opinion, the principle articulated in the 'election cases' does not extend to Mr Lloyd regardless of what period of time is encompassed by that category of case. He was not an elected representative and was not running for public office. Accordingly, his case fell to be determined solely on the basis of whether there was the necessary reciprocity of duty and interest in the making and receiving of the publications in question. For the reasons already given, I consider that her Honour erred in finding that it was sufficient for the appellants to establish that there was a public interest in the content of the matters complained of.

As will be seen from what I have said, the appellants argued that the imputations subject of the cross-appeal were protected by the defence of qualified privilege on a limited basis as had been found by the trial judge. I have concluded that on the present state of the law, there is no such available protection. It follows, therefore, that the respondents should succeed on this aspect of their cross-appeal. This was not a case where the recipients of the information in the publications were members of, for example, an existing ratepayers association, thereby demonstrating that they had an active interest in the affairs of the Council. These were the views of one or two people only. In my view, there is no duty for any person to convey their personal political views nor is there any reciprocal interest in persons receiving such unsolicited comments. As the paragraphs referred to demonstrate, the trial judge considered the occasion was one of qualified privilege because the matters complained of were legitimately matters of public concern. However, as was established in Lange and Morosi v Mirror Newspapers Ltd, that is not sufficient for the purposes of the traditional common law defence.

Her Honour should have applied the same approach to the imputations subject of the appeal. Although her Honour held that those imputations were not protected by the defence of qualified privilege, she did so on a different basis, as is discussed below. Given what I consider to be the correct approach to the law of qualified privilege on the present High Court authorities, her Honour should have found that the defence of qualified privilege failed in respect of all imputations for the reasons I have given. I do not consider it to be either necessary or appropriate to enter into the further question whether the law should be developed so as to encompass a category of case of political comment, which will be protected by the defence of qualified privilege without the requirement of reasonableness. I would only comment that I would be surprised if the law was developed in the way propounded by the appellants, so as to establish an unconstrained right to publish defamatory material in respect of political comment.

The appellants appealed against her Honour's finding that imputations 6(a), 8(b), 8(c), 12(a), 12(b), 12(c), 12(d), 14(a), 14(b), 14(c), 14(d), 14(e), 18(a), 24(a), 24(c), 24(d), 24(e), 24(f), 26(a), 26(b), 26(c), 26(d), 26(f), 26(g), 28(b), 28(c), 28(d), 30(a), 32(e) and 32(f) were not published on an occasion of qualified privilege. The appellants' complaint was that her Honour erred in finding that, except in respect of imputations 8(b) and 8(c), there was no occasion of qualified privilege and that these imputations were not relevant to the occasion in respect of which they were published.

The appellants' case on the appeal only arises if I am wrong in concluding that the defence of qualified privilege failed in respect of all imputations.

Mr Marshall's submissions on the appeal comprised submissions filed under the hand of Mr Hmelnitsky of counsel dated 27 May 2011 and his further oral submissions on the hearing of the appeal, by which time Mr Marshall was conducting his own case.

Mr Tory was not initially an active party to the appeal, having filed a submitting appearance. However, he was granted leave to withdraw the submitting appearance on certain conditions, including that the appeal be conducted on the grounds of appeal and the submissions already filed under the hand of Mr Hmelnitsky.

The focus of Mr Tory's argument was that her Honour erred in her articulation of the test for relevance. Indeed, this was described by senior counsel for Mr Tory as being "the narrow point ... raised by the appeal" and the only point to which oral argument was addressed. However, I do not understand that the challenge to her Honour's finding that there was no occasion of qualified privilege was abandoned. If it was, Mr Tory's argument in respect of all imputations the subject of the appeal, other than 8(b) and 8(c), would fail. In any event, as Mr Marshall's appeal challenges her Honour's finding that there was no occasion of qualified privilege in respect of the imputations subject of the appeal other than 8(b) and 8(c), it is necessary to consider that challenge also. In dealing with the first aspect of the appeal, that is whether her Honour erred in finding that there was no occasion of qualified privilege, any reference to the imputations subject of the appeal should now be read so as to exclude those two imputations identified above.

The appellants contended that in finding that there was no occasion of qualified privilege her Honour did not reject the defence because there was no interest or duty in communicating the material in the matters complained of. Rather, she rejected the defence because of the language used and the lack of any internal logic in the circulars. The appellants' submission also recognised that her Honour did not consider that the tone or actual language used was so extreme so as to deny the availability of the defence. To the extent Mr Marshall's oral submission contended otherwise, that is, that her Honour rejected the defence because of the "vituperative" tone of the circulars, that submission should be rejected.

The appellants submitted that her Honour's error was typified by her reasoning in respect of the twelfth matter complained of, being the circular dated September 1999 headed "COUNCIL AMALGAMATION", which conveyed imputations 24(a)-(f) (set out in full below at [244]). Essentially the imputations conveyed were that both respondents were dishonest in their respective capacities of Mayor and General Manager.

The appellants pointed out that the trial judge had earlier found, at [446], in relation to the eleventh matter complained of, that the question of Council amalgamation was a matter "of very considerable concern to residents and ratepayers in the municipality" and that the imputations conveyed by that matter were published on an occasion of qualified privilege. However, in dealing with the imputations subject of the appeal, the appellants complained her Honour erred in separating out from the article as a whole that part of the article from which the imputations arose so as to determine whether those aspects conveyed either information or an opinion.

The appellants contended that the task required to be undertaken when assessing whether a matter was subject of an occasion of qualified privilege was to assess the matter complained of as a whole. I agree with that particular submission. Whether her Honour transgressed in that way is a different question, to which I will return.

The appellant also submitted that it was "beside the point" whether the content of the article could be labelled "facts" or "information". They contended that it was sufficient that "the content of the circular which gave rise to the imputations was on the subject matter of the privileged occasion and was relevant to it. No more was required". This submission is also correct in that it refers to the content of the circulars.

However, as I understand her Honour's reasoning on the imputations subject of the appeal, her finding was that the content of each particular item, in reality bore no or such little connection with the purported subject matter that there was no occasion of qualified privilege. It was in this respect that her Honour, at [468], referred to there being "no semblance of communication of information" conveyed on that subject matter. Thus, although the twelfth matter complained of appeared under the banner "COUNCIL AMALGAMATION", her Honour considered that there was but the barest or most superficial connection with that subject matter. Whilst that is strictly the matter in question on the second of the two issues raised on this aspect of the appeal, her Honour was, in effect stating, the particular item was not about council amalgamations at all. This was in contrast to the eleventh matter complained of, where the content of the article was in fact about that matter, and in respect of which her Honour found that there was an occasion of qualified privilege.

Accordingly, the generalised attack made on her Honour's findings in respect of the imputations subject of the appeal, fails. I will consider the balance of the imputations in dealing with the question of relevance, as her Honour used essentially the same approach to the determination of that question, that is, by reference to the question whether any information or opinion was conveyed in the matters complained of.

For there to be an occasion of qualified privilege which protects a person from liability for defamatory publications, there must be a sufficient connection to the privileged occasion to attract the defence. As the plurality explained in Bashford, at [22], an occasion of qualified privilege does not give a licence to defame. Rather: "It denies the inference of malice that ordinarily follows from showing that false and injurious words have been published"

A wrong or inaccurate statement of fact does not, of itself, sever the necessary connection with the privileged occasion or prevent the privileged occasion from arising. In Bashford, the matter complained of incorrectly stated that the plaintiff had been found guilty of a contravention of the Trade Practices Act 1974 (Cth), s 52 whereas the party that had engaged in misleading and deceptive conduct had been a company controlled by the plaintiff and his wife. Notwithstanding that the published matter was inaccurate, it was held to be sufficiently connected, or in the language used in that case, at [29], "did not alter or reduce the connection between the privileged occasion and the defamatory matter".

French CJ, Crennan and Kiefel JJ made a similar observation in Cush v Dillon, at [19], when they observed that: "...[there] may be limits to what may be said upon a subject on an occasion of qualified privilege and that those limits are to be tested by the connection of the statement to the subject."

In Cush v Dillon, it was held that an occasion of privilege arose in circumstances where the defendant had a duty to disclose information relating to staffing matters in a statutory body and the recipient of the information had a duty to receive it. The defamatory matter was publication of a comment that the general manager and a staff member were having an affair. It was held that the terms of the matter complained of were such as to elevate the subject matter from there being a rumour of the affair to the fact of an affair. That statement was not true and not believed by the defendant to be true. The plaintiff had conceded that the occasion of privilege extended to the communication of the existence of a rumour. The plurality held, at [23], that: "It could not ... then be suggested that the communication of the fact of an affair was less relevant to the matters discussed than a rumour. The error inherent in the statement does not deny the privilege."

Hayne and Bell JJ made the same point, noting, at [52], that an inaccuracy in relation to the subject matter, which is otherwise relevant, will not necessarily render the statement "irrelevant to the privileged occasion". Their Honours referred to the statement of Dixon J in Guise v Kouvelis, at 118, that, for the connection to be severed the words used must be "so foreign to the occasion that they must be held extraneous or irrelevant".

Gummow J also made the same point in Bashford, at [126], observing that it was well established that the inaccuracy of an imputation was no bar to the availability of the defence of qualified privilege arising out of a reciprocal duty or interest. As his Honour explained: "This is because the particular relationship between the defendant and the person in receipt of the communication, and the advantages which the law deems are to be had from free communication within such a relationship, enjoy a significance over and above the accuracy of the defamatory imputation in question." See also Bashford at [27]-[30] and [199].

These statements reflect the remarks of Earl Loreburn in Adam v Ward at 320-321, to which the plurality in Cush v Dillon referred. Earl Loreburn commented that anything "not relevant and pertinent" to the discharge of the duty or the safeguarding of the interest, which creates the privilege will not be protected. Accordingly, it was necessary to determine, in a particular case, whether what the defendant published went "beyond what was germane and reasonably appropriate to the occasion".

Other descriptions of the necessary connection were used in Adam v Ward. Lord Dunedin, at 327, used the expression "quite unconnected with and irrelevant to the main statement". Lord Atkinson, at 340, referred to "foreign and irrelevant" matter and Lord Shaw of Dunfermline, at 348, to a matter which was "not in any reasonable sense germane" to what was being conveyed in the discharge of the duty or the protection of interest.

In Cush v Dillon, French CJ, Crennan and Kiefel JJ did not determine whether there was any difference of substance in the various statements in Adam v Ward. Rather, at [22], they accepted, as had been said in Toogood v Spyring, that a narrow view should not be taken of what constitutes a sufficient connection, otherwise the scope of the defence may be unduly restricted.

Likewise, the use of excessive or extravagant language does not prevent there being a sufficient connection to the privileged occasion. In Cush v Dillon French CJ, Crennan and Kiefel JJ accepted, at [24], the distinction drawn by Lord Esher MR in Nevill v Fine Arts and General Insurance Co [1895] 2 QB 156 at 170 between an excessive statement, which nonetheless was relevant to the privileged occasion, and the circumstances in which an excessive statement, made within the privileged occasion, may nonetheless be evidence of malice. Earl Loreburn had also noted this distinction in Adam v Ward when his Lordship observed, at 321, that exaggerated words used on an occasion of privilege may be evidence of malice but "the two things are different". The question of malice is considered below. The present point is that the language used, of itself even if excessive, is not the determinant of whether there is a sufficient connection between the defamatory material and the privileged occasion.

The question whether defamatory material was relevant to the occasion was considered by Heydon J in Papaconstuntinos at [75] ff. His Honour considered that two inquiries emerged from the statement of Parke B in Toogood v Spyring: first, whether there was a privileged occasion at all; and secondly, whether the legitimate purposes of the occasion were exceeded. His Honour considered that the factual analysis of each may overlap and further noted that these two inquiries were separate from malice. His Honour referred to the following passage in Andreyevich v Kosovich at 361-362, where Jordan CJ said: "If, at the trial of a defamation action, facts are established which satisfy the Judge that the occasion of the publication complained of was one of qualified privilege, the defendant is entitled to a verdict, save to the extent to which it appears to the Judge that the defamatory matter exceeded what was reasonably incidental to the legitimate purposes of the occasion, or that its publication was wider than was reasonably proper to serve those purposes, or (if, in the opinion of the Judge, there is evidence of express malice) unless it is established by the plaintiff to the satisfaction of the jury that the defamatory statement was animated by express malice." (Heydon J's emphasis)

Heydon J continued that Jordan CJ's reference to "occasion", "reasonably incidental" and "malice" identified three separate inquiries, the first two of which were raised by the statement of Parke B in Toogood v Spyring. His Honour noted that defamatory material was not "'reasonably incidental to the legitimate purposes of the occasion' ... where the defamatory material is extraneous to the occasion because it is irrelevant or not germane". Thus, an evaluation of the material is required, questions of "judgment and degree" being involved: Bellino v Australian Broadcasting Corporation [1996] HCA 47; 185 CLR 183 at 246-248 per Gaudron J.

Heydon J, at [76], also explained the distinction between the enquiry as to whether there was an occasion of privilege and the question of malice: "The distinction between the question whether an occasion was privileged and the question whether what happened on that occasion was reasonably incidental to its legitimate purposes can be drawn as follows. A privileged occasion is an occasion on which the defendant has an interest in making or a duty to make a defamatory statement. The requirement that what was stated must have been reasonably incidental to the legitimate purposes of the occasion goes to how that privileged occasion was used. The latter requirement is different from malice, though the evidence going to that requirement can also go to the malice issue." (citations omitted)

Finally, it is important to note that Heydon J, at [77], expressed the view that: "... the terms of the defamatory material are relevant to the question whether the occasion was privileged and to the question whether the defamatory matter exceeded what was reasonably incidental to the legitimate purposes of the occasion." His Honour recognised that this statement was contrary to what was sometimes said in the authorities. That comment appears to indicate that in his Honour's view, it was possible that the language may be in such intemperate terms as to exceed what was legitimate for the occasion. This understanding of his Honour's remarks is supported by his Honour's references to Bellino.

The appellants submitted that the test applied by her Honour as to the necessary connection between the matters complained of and the occasion was wrong. They contended that, for an occasion not to be privileged, or for the occasion not to extend to the defamatory material, it was necessary to establish that there was no connection at all between the matters complained of and the occasion.

The appellants submitted that in order for material to be found to be irrelevant to the occasion of qualified privilege, the material must be "truly unconnected with the subject matter of the occasion" (Bashford at [43] per Hodgson JA), that is, it must be "so foreign to the occasion" that the material must be held to be "extraneous or irrelevant": Guise v Kouvelis at 118. They submitted that their argument found support in the comment in Cush v Dillon, at [22], that a narrow view should not be taken of what is relevant. The appellants contended this was the test that had been applied by Hodgson JA in the Court of Appeal in Bashford. In short, they submitted that the test was one of "no connection", that is, a statement had to be totally outside the subject matter of the occasion of the privilege before it could be said that the occasion of privilege was thereby defeated or did not arise.

The appellant submitted that if any other test was applied, the defence of qualified privilege would, in effect, become "illusory": see Horrocks v Lowe [1975] AC 135 at 151 per Lord Diplock, and would be the subject of varying evaluative interpretations by trial judges so as to be time-consuming in its proof and uncertain in its outcome. They submitted, by reference to the present case, that if too stringent a test was required, it would impede the ability of persons to make a contribution to political debate, being an occasion of qualified privilege meant to protect individuals engaging in such conduct. The other party was relevantly protected by being able to respond in kind: see Harbour Radio v Trad at [116].

In the passage in Horrocks v Lowe upon which the appellants relied, Lord Diplock, at 151, referred to material that was irrelevant to the occasion of privilege in that it was "not really necessary to the fulfilment of the particular duty or the protection of the particular interest upon which the privilege was founded". In his Lordship's opinion, such material may be evidence that the publication was for an improper purpose, thus affording evidence of malice.

The trial judge held, in respect of the imputations subject of the appeal, that the defamatory statements were not made on an occasion of qualified privilege. This was primarily because the content of the relevant circulars could not be characterised as being sufficiently informative in a sense of conveying either information or opinion on the subject matter of the occasion. The appellants referred to the passages in her Honour's judgment in respect of each of the imputations subject of the appeal. It is therefore necessary to deal separately with each of the matters complained of that gave rise to those imputations. The extracts below from the matters complained of are reproduced verbatim.

At [249], her Honour was dealing with imputations 6(a) and 6(b), which were in the following terms: "● 6(a): that as Mayor of the Council Mr Megna is incompetent; ● 6(b): that as General Manager of the Council Mr Lloyd is incompetent."

The imputations were said to arise from the final paragraph (bolded below) of the third matter complained of, which was contained in a circular dated May 1998 and appeared under the heading "MESSAGE FROM THE MAYOR, '98" as follows: "Drummoyne Council Autumn news publication arrived recently. What a 'gooby' sugarine type of dribble engulfs that newsletter. Have you ever seen anything other than insignificant back-slapping content in these quarterly issues from our Council. The only problem we have is that it is issued at your cost, the ratepayer. Worse still, this issue carries a photo of the unregistered architect appointed to the Civic Centre refurbishment by the general manager (see our March '98 circular). Megna has again referred to his worn out cassette tape for the usual clichés in his derogatory comments about this circular. We answer. This circular is not anonymous. It is published by a group of concerned residents of this Municipality who have been lied to by Megna, Councillors and Council Management and who wish to make public the atrocious decision-making, lies and waste of public moneys in this Council. This Association has no need to justify itself, it is not the Mayor or the Council General Manager, is not a community elected representative and is irrelevant in the scheme of all things local. Megna may level any amount of criticism at this Association, but it is he and Lloyd who are to answer to ratepayers, and already the latter are very aware of who and where the problems are. The truth will validate our circulars. Megna invites constructive criticism. He and Lloyd have now had a long time in office to iniatiate the first 'turning of the soil' in rectification of so many matters in this Municipality. We haven't even seen the first shovel full yet! Plenty of talk, determinations, meetings, initiatives, but nothing real at all. We see no community leadership of a tackling of the major issues, just 'feet in the trough'. We all know just what is to be done. Megna, in particular, bristles when under criticism, and yet invites it to be constructive. His involvement in so many items is real, but he cannot rectify, he just attends. The fact is that both Megna and Lloyd have not shown they possess the skills necessary for their respective positions. That is clear." (emphasis added)

Her Honour considered, at [244], that the reference to the Association not having to justify itself was what she would term "self defence". Her Honour accepted, at [248], that each of the paragraphs in the matter complained of came under the "general rubric of Council affairs and management", but "on a more specific level the subject matter [was] fluid". In this regard, her Honour noted that the first paragraph was an attack on the Council newsletter; the second concerned apparent hostilities between the purported Ratepayers Association and some members of the Council, including Mr Megna; the third and fourth paragraphs were largely a criticism of Mr Megna and Mr Lloyd in their respective capacities of Mayor and General Manager; and the final paragraph, from which the imputations arose, was a comment upon their performances.

Her Honour held, at [249], that the matter complained of was not published on an occasion of qualified privilege for, essentially, two reasons. First, no, or at least very little, factual information was conveyed. Secondly, no rational opinion was conveyed. Her Honour's reasoning, at [249], was as follows: "Because the defamatory imputations were conveyed by the last paragraph, consideration of the occasion of qualified privilege must focus upon what is contained therein, perhaps allowing some reference to the immediately preceding paragraph. The criticisms made are non-specific, but that does not necessarily prevent an occasion being subject to qualified privilege if the necessary interest and reciprocity are present. But analysis of the item demonstrates that there is, in reality, very little (if anything) in the way of factual information contained in these paragraphs. Nor is there any rational opinion conveyed. Although the competence of Mr Megna as Mayor and Mr Lloyd as General Manager are both subjects which justify the communication of information or opinion, to create an occasion of qualified privilege it is necessary that the communication have some content. This item fails to meet that basic requirement. There is no occasion of qualified privilege. If there were such an occasion, the imputations of incompetence (or the single sentence that conveys those imputations) would have the necessary relevance."

The appellants submitted that neither of these matters, that is, information and rational opinion, needed to be conveyed for the matter complained of to have the necessary connection with the privileged occasion. They submitted that the circular was directed to pointing out that, contrary to the assertion that had been made in the communication from the Mayor, the Association did not need to justify itself, as it was not a community of elected representatives. Further, it had a legitimate reason for existing, namely, to draw to the attention of ratepayers the Council's appalling administration. The fact that the views expressed therein were strident did not mean that there was no or insufficient connection with the subject matter of the occasion, namely, political debate relating to the Council and its affairs, including the conduct of the respondents. This was not just an unseemly argument between two individuals. Indeed, the appellants submitted her Honour recognised that the material was relevant to the occasion. Her Honour's error was in finding that as the material had no content, the occasion was not privileged.

A superficial reading of the trial judge's reasons, at [249], might suggest that her Honour separated out, from the matter complained of as a whole, that part that gave rise to the imputations, to ascertain whether those matters conveyed information or opinion that would given rise to a privileged occasion. Such an approach may have led her Honour into error but I do not consider her Honour erred in that way. Rather, it is apparent from her Honour's reasoning that she had regard to the whole of the item and was not satisfied that that material was published on an occasion of qualified privilege. I see no error in her Honour's evaluation either of the matter complained of as a whole or the relevance of the imputations.

The appellants next referred to the fourth matter complained of contained in a circular dated August 1998, which appeared under the heading "LEP DRAFT AMENDMENTS". The article was in the following terms: "The Council's monthly meeting on 21/7/98 proposed amendments to the Drummoyne Local Environment Plan 1986. It is in draft form at present on display. Briefly and in part, it's meant to encourage freehold commercial and shop owner/operators to develop/improve their properties/businesses. In summary, despite efforts by Cnrs [F] and Marshall (in tandem with local property owners' advices) to improve Floor Space Ratios in Five Dock, Councillors voted only marginal increases to the FSR. There will also be some small changes in Drummoyne. We've relegated this article to brevity status as it has become quite evident that Council Management's view of a changed Drummoyne, in particular, leaves much to be desired. Do they really believe investors are to come rushing forth to clamour for freehold and business purchases and development without carparking resolvement, without a total package, a 10 year Plan, a comprehensive package involving all aspects? Why would Five Dock freehold owners demolish their buildings or complete major alterations if only to gain a slight increase in floor space ratios in a replacement building? A dope could see that they won't. So, Council, again have done nothing worthwhile to assist! The smirks from Lloyd and Megna were noted at the meeting when one Councillor commenced a preamble about underground carparks. How on earth could that be paid for or even receive approval consent, the smirks revealed? neither had a clue. Those smirks did reveal one thing, i.e., Neither possess the ability required in their respective positions. We know it. residents are starting to know it, and they both know it!" (emphasis added)

The article gave rise to the following imputations: "● 8(b): that as Mayor of the Council Mr Megna is incompetent; ● 8(c): that as General Manager of the Council Mr Lloyd is incompetent."

Her Honour accepted, at [296], that the publication of information concerning the debate and the issues referred to gave rise to an occasion of qualified privilege, but that the last paragraph (see bolded portion above) which gave rise to the imputations was not. Her Honour's reasons were as follows: "I am satisfied that the publication of information concerning the debate, and the issues, gave rise to an occasion of qualified privilege. The first two of the three paragraphs of this item are directed to that subject matter, and were therefore published under qualified privilege. However, the last paragraph, from which the imputations arise, is not directed (ie relevant or germane) to that subject. They were therefore not published on an occasion of qualified privilege. Even if it could be held that they were published on such an occasion by reason of the association with the first two, protected, paragraphs, it is not shown that the reaction of Mr Megna and Mr Lloyd to an apparently extraneous comment about underground car parks - or the inference of incompetence drawn by the author of the item from 'smirks' was relevant to that occasion."

The appellants submitted her Honour erred in finding that the topic of underground car parks was extraneous to the occasion. In this regard, there was evidence there had been discussion of underground car parks at the Council meeting to which the circular was directed. They submitted that the reference to the respondents' conduct in "smirking" when this issue was raised was indicative that they did not know what they were doing, that is, they were incompetent, otherwise they would have taken the discussion seriously.

Her Honour's approach in disconnecting the paragraph from which the imputations arose from the general content of the item, and from the evidence that there had been discussion about car parks at the meeting, was, in my opinion, erroneous. The question for determination therefore is whether the defamatory comments were relevant to the occasion subject of the portion of the article found by her Honour to be protected by the defence of qualified privilege. This in turn depends, in my opinion whether her Honour correctly found that the reference in the defamatory paragraph to car parking was "extraneous" to the occasion.

In my opinion, it was not. The item was about commercial development to be permitted in the proposed amendment to the Local Environmental Plan including what was to be allowed by way of floor space ratios. Questions of car parking were also in issue, as was stated in the protected portion of the article. The defamatory comments clearly imputed to the respondents a reaction to that topic that demonstrated their incompetence. It follows that her Honour erred on the question of relevance in respect of imputations 8(b) and 8(c).

The appellants next challenged her Honour's findings in respect of the sixth and seventh matters complained of. It is convenient to deal with them together. The sixth matter complained of related to imputations 12(a) and 12(b), in respect of which the appellants did not address any particular submission, and imputations 12(c) and 12(d).

Imputations 12(a) and (b) arose out of an item in the October 1998 circular entitled "SAME MAYOR, SPLIT COUNCIL". This item reported that Mr Megna had been re-elected as Mayor for a third term and that Mr Lloyd had been reappointed as General Manager for a five-year term. The respondents were described as "a cosy and matey team". The item also alleged that they had been responsible for a trading loss by Council of $857,000 in the last financial year. The first paragraph of the item, upon which the imputations were based, stated: "For Megna, greed is good. Talk about ego! The man really believes he is best for this Municipality and takes whatever his mits can grab! A taker, not a giver. You are the pawns."

The article continued as follows: "The Meeting gallery has to sit through Megna's appalling 'thank you' speech, something that should have been taped for delivery to every ratepayer with their next garbage advices. A shocker. It spewed politics, a sewerage delivery upon the Labor Party councillors, backhanders for John Murphy's Council resignation and his own character, same for John Murray, and, of course, indication that the forthcoming Council By-Election cost would restrict Council's ability to provide ratepayers with those services we would expect to be normal. Now how did we know that would be used as a Council excuse to avoid doing things in this Municipality! A greasy address indeed, full of self opinionated interests. You know - 'I am the greatest' type stuff. What did this all have to do with Megna's job for this community? Zero, and the gallery had to sit through the lot! Putrid! Listen Megna, if things were attended to properly in this district and you did your job, without the lies and inefficiencies, this Association wouldn't need to exist. Drummoyne Council is now split up and down. Labor Councillors wanted the Mayor's job this time round, in terms of arrangements and precedent. Megna, with his Liberal mates (and therefore voting majority), seized upon the opportunity for public profile in his run-up to the next State Govt. elections in March 1999. Feelings between the factions are filthy. All of this muck, and we, the community, is expected to pay their wages and put up with it. What an insufferable lot!"

The imputations conveyed by this item were: "● 12(a): that as Mayor of the Council Mr Megna is motivated primarily by personal greed; ● 12(b): that as Mayor of the Council Mr Megna lies routinely to the ratepayers."

Her Honour, at [327], considered that it was difficult to discern any subject matter upon which any information was, or was purported to be, communicated. Her Honour considered that the item referred only to Mr Megna without any factual underpinning which could give it the colour of the communication of information. In this regard, her Honour considered that the item resembled the publication referred to in Motyka v Gojan [2007] NSWSC 31. Her Honour's intended reference was to Motyka, at [192], where James J considered that the matter complained of with which he was dealing conveyed: "... very little factual information and is almost entirely devoted to accusing Dr Motyka of being a dishonest, shameful person, of being a devil, of poking his nose into everything, of denigrating everyone, treating everyone as idiots and breaking up organisations, doing the devil's work, being a pillager-savage, terrorising persons, telling lies, perpetrating evil and injustice and persecuting others."

The reference to the "arrangements and precedent", whereby the Labor Councillors wanted the position of Mayor, related to a convention, of which Mr Megna gave evidence, that the mayoralty alternated between the two parties because the Council was routinely evenly divided in numbers of Liberal and Labor Councillors. Notwithstanding these references to matters that were occurring within the Council, her Honour held, at [330], that the item was devoid of any information or expression of opinion so as to qualify for an occasion of qualified privilege. Her Honour further held, at [332], that even if the item was published on an occasion of qualified privilege, the passage upon which the imputations were based had no relevance to the occasion. Rather, they merely constituted an attack upon Mr Megna, his integrity and his ego.

Imputations 12(c) and 12(d) also arose out of the series of articles commencing in September 1998. There were three items, each published on a separate occasion and entitled "COUNCILLOR'S DOMESTIC DISPUTE". The first appeared in the September 1998 circular, in the following terms: "Out of the 'blue' at the above meeting, Cr. Marshall queried a legal fee to Council of a little under $600, appearing on a recent list of Council's Vouchers (cheques). Simple query? Turns out to be a fee due to Council's solicitors, not for Council business, but relating to a domestic dispute between Cr. [M] and her neighbour of many years. Nothing to do with Council. We understood the matter has been listed in the Local Court to resolve. No worries though, Council will pay, i.e. you will pay. Not bad if you can get away with it. But hang on, there must be more to it, mustn't there? We'll wait for Council's explanation at the next meeting. It should be a ripper as we now have the neighbour's story." (original emphasis)

Although this item was not sued upon, the appellants submitted that her Honour had regard to it in respect of the following two items, the first contained in the October 1998 circular and the second contained the December/January 1999 circular.

The matter complained of in the October 1998 circular, being the sixth matter sued upon, was in the following terms: "COUNCILLOR"S DOMESTIC DISPUTE: In our September Circular, we raised the matter of a domestic dispute between Cr. [M] and her neighbour. Item 1 of Ordinary Council Meeting on 15/9/98, raised by Cr. Marshall, proposed 'that legal action commenced in Burwood Court, in relation to the neighbour, be discontinued'. Council's solicitor advised the meeting (according to Lloyd on the business paper) that 'the Court proceedings cannot be discontinued.' But, this Association asks, why not? Of course it can, at any time. Council is really after this ratepayer. Anyone with Court experience will know the Court can discontinue upon request. So what's the story? Why are you, the ratepayers, paying for a Councillor's domestic dispute? We never found out! Cr. Marshall stood at the meeting to raise issues. A verbal slanging match then ensued between he [Mr Marshall] and Megna. Marshall merely wanted the matter publicly discussed. We certainly want to know the Council's view. We already know the neighbour's. Cr. Marshall had gone to the trouble of obtaining a document from the neighbour's solicitor, and commenced to advise the meeting of its contents, Lloyd, (sitting next to Megna as usual at all meetings for prompting purposes), immediately had a heart attack. The body language was acrobatic, it was fantastic to watch. The smirk turned to dismay. The gallery heard his whispered gulping plea to Megna: 'rule him out of order'! Megna dutifully responded, 'you're out of order, Cr Marshall, sit down, sit down, you're out of order'. Megna then hastily moved to Item 2 without breath. Lloyd was left chewing his pencil end fervorently, sweat forming. We still await the Council's explanation. That will come, even if we have to obtain a Court extract in the end. Council cannot stop that. Real juicy stuff, you'll get the answer soon."

The imputations arising out of this item were: "● 12(c): that as Mayor of the Council Mr Megna acted jointly with Mr Lloyd to prevent ratepayers discovering the truth about a court case taken by the Council; ● 12(d): that as General Manager of the Council Mr Lloyd acted jointly with Mr Megna to prevent ratepayers discovering the truth about a court case taken by the Council."

Her Honour, at [337], stated that it was impossible, from a mere reading of the article, to discern the subject matter upon which this item purported to give information. Rather, as her Honour saw it, the item read as an attack upon each of the respondents. Her Honour accepted that if the subject matter in this item related to the Council's conduct in pursuing a complaint against one of its residents, in circumstances where the person making the complaint was a member of Council and a close personal and political associate of Mr Megna, it would have been sufficient for the purposes of a defence of qualified privilege. However, her Honour held, at [342], that the item did not purport to give any such information relating to that matter. Rather, her Honour observed, at [342], that the item asked questions and levelled abuse at the respondents. In her Honour's opinion, "[o]n no level could [the item] be construed as communicating information to interested residents or ratepayers". For that reason, her Honour, at [343], considered that the defence of qualified privilege failed "at the first hurdle".

The matter complained of in the December/January 1999 circular, being the seventh matter complained of, was in the following terms: "COUNCILLOR'S DOMESTIC DISPUTE: Remember this domestic dispute between Cr. [M] and her neighbours of 20 years? As we reported in our Sept and Oct. Circulars, it was supposed to be over a noisy swimming pool pump/filter. Well, not really. [M] just doesn't like the bloke. Noise readings for this pump were not available to the Court (fact is, they didn't exist - unsatisfactory ones that is), prior to or during the Court hearings, and the pump had been there for 15 years with no previous complaints. The pump noise was merely an excuse. Not to worry, [M] is pretty chummy with forgetful Megna. And he's the mayor. And they are both Liberal. So between them they got the Council involved and Council issued a Summons on the neighbours. Dogs? Nah, that's the system. The Council took on the neighbours, not McIntyre, as should have occurred. The story gets better. Cr. Marshall (DMRA) at the council meeting on 15/9/98, asked why Council was involved. Lloyd told Megna to rule him 'out of order', and Megna did. Chummy? They blocked Marshall. It should be noted that the business paper for that meeting (Item 1), in a 'Note from the Gen. Man.', stated 'the Court proceedings cannot be discontinued' (they really had it in for this neighbour). This was, of course, absolute bull!! Well, at the Court, the Council's solicitor was made aware of the contents of Lloyd's business paper statements of 15/9/98. The solicitor exploded, denying ever having advised Lloyd of matters which were printed in that Paper. Trouble was that this solicitor's denial was made in the presence of the neighbours' barrister!!! In other words, at that very moment, it was evident Lloyd had lied in the business paper! That also means he lied to you, the ratepayers, members of the gallery and his own Councillors. The Paper is meant to be a truthful account of Council's position in everything which is discussed at meetings. For those who are critical of our Circulars, who dismiss it as rubbish, who can't believe the truth when it's amplified as a neon sign before your very eyes, and who say such things and then don't attend any Council meetings whatsoever, why don't you do something about this? What would you prefer, for us, as co-residents, to also ignore the suppose 'rubbish', not to lift a finger to do something about things like this, to hide it from public knowledge? Get real! The neighbour was going to be left to rot. He would have had to pay thousands for a Lloyd like! The bludger! At least, Cr Tsirekas, after we brought the matter to public attention, rose to the occasion at the November monthly meeting. He surprisingly questioned Lloyd as to why this situation occurred, who was responsible, and what will be the cost to Council, and, therefore you, the ratepayer. At last, is Angelo rising to the potential we thought did exist? C'mon mate, get the answers, please. We'll then reinstate you to a councillor with some guts, a great chance for you. December's meeting saw Lloyd's absence. The same question was posed to Council's David Furlong. He advised answers to Councillor's question would be sent to the Councillor who asked the question, i.e. no one else will be told, no other councillor, nor member of the Public. The fleas will run berserk! Doesn't matter, we'll get the whole truth and publise it! You need to know just what this grubby matter has cost you as a ratepayer. This is a story to amplify the grubs we have on our Council, and reasons for our continual criticism. God knows how many other matters slip through without our knowledge. It could have cost the neighbour thousands. Instead, it will cost you. We have a liar as our general manager, as deliberate a lie as the day is long. It took the Magistrate 1 minute to dismiss the proceedings as a joke! And Councillors (all except one) voted for renewal of Lloyd's contract for 5 years in September. His salary, $113,040 p.a. plus, plus, plus!!! The Court awarded all costs to be paid by the Council, naturally!! A shocking story!" (original emphasis)

The following imputations arose from this item: "● 14(a): that as Mayor of the Council Mr Megna committed Council resources to supporting another Councillor in a private dispute with a neighbour because he was a crony of that other Councillor; ● 14(d): that as General Manager of the Council Mr Lloyd lied to the Council and ratepayers; ● 14(e): that as General Manager of the Council Mr Lloyd acted jointly with Mr Megna to prevent the public finding out that there was no proper basis for legal action begun by the Council."

Her Honour, at [352], held that these imputations were not published on an occasion of qualified privilege. Her Honour accepted that the subject matter of the article in relation to the complaints, Council's handling of the matters and the conduct of the respondents in relation to those matters were all subject matters of legitimate concern to ratepayers. However, her Honour held that the item could not be construed as conveying information in relation to any of those subject matters. Rather, each was "a mere diatribe from which no sensible information can be derived". Accordingly, the imputations were not published on an occasion of qualified privilege.

Her Honour approached the matter complained of giving rise to imputations 14(b) and 14(c) in the same way. That is, as on her Honour's assessment, because no information on Council matters was conveyed by that part of the item that gave rise to the imputation or imputations, there was no occasion of qualified privilege.

If there is a category of qualified privilege arising out of the category of legitimate public interest per se, the sixth and seventh matters complained of fell into that category and there was sufficient connection in the defamatory comments made of the respondents to those occasions. However, for the reasons already given, I do not consider there is any such separate category.

The ninth matter complained of arose out of the circular of March 1999 and included an item headed "LIES AND MORE LIES, KEEP 'EM COMING": "You'd think Megna would quietly shrink away into oblivion. Doesn't he get the message? He gave his State Parliament aspirations the flick by not standing for the Liberal Party candidature for the forthcoming State Elections (or did the Liberals finally produce the axe for his abyssmal by-election showing) and he's about as on the nose in his Council duties as could possibly be. Nope. There he is, slap bang on the front page of the Dist. News issue dated 23/2/99, clothed in glorious colour, in the middle of Five Dock shopping centre. The article heading? 'Megna ready for the Boom, Development Applications Flooding In.' As you know, Megna and his Liberal mates had sufficient voting numbers on Council for success in having shopping centre floor space ratios slightly increased, ever so slightly. The believed this was sufficient to attract investors/developers into the centres to allow re-development and introduction of the much-needed new facilities."

This article gave rise to imputation 18(a) as follows: "... that as Mayor of the Council Mr Megna is a liar."

Her Honour's finding, at [415]-[416], in respect of the ninth matter complained of giving rise to imputation 18(a) was that the item did not "purport to communicate information", but rather was the expression of the author's "trenchant opinion" as to Mr Megna's parliamentary ambitions and of Mr Megna personally. Her Honour considered that the balance of the item repeated criticisms of Mr Megna's stance in relation to floor space ratios, suggesting that the slight increase allowed would be insufficient to attract investors to the area. Her Honour further held that the heading to the item, "LIES AND MORE LIES, KEEP 'EM COMING", from which the imputation derived, was not relevant to that subject matter. For both reasons, her Honour considered that the defence of qualified privilege failed. Her Honour considered, at [417], that even if it could reasonably be held that the article was published on an occasion of qualified privilege, the heading was not relevant to those issues.

The assessment made by her Honour was clearly open. The article questioned whether the floor space ratio introduced in the amended Local Environmental Plan would be sufficient to introduce investment into the municipality. Whilst the effect of the article was to suggest that it was unlikely that would be the case, it is apparent from the article as a whole, that the author did not know whether or not a large number of development applications were being lodged. There are a number of statements in the authorities that an occasion of qualified privilege is not to be an occasion of abuse. Although a wrong or inaccurate statement will not destroy the privilege, it could not necessarily be said that readers of this item had an interest in being informed of material that was inherently speculative, so as to protect a blatant defamation on the basis that the matter complained of was published on an occasion of qualified privilege.

The appellants separately challenged the item in the twelfth matter complained of being the circular of September 1999 in which the following item headed "COUNCIL AMALGAMATION" appeared. As her Honour observed, the article was lengthy and I will only refer to the relevant portions. Accordingly, I will refer only to those portions to which her Honour referred in her judgment. "Welcome to the ratepayers of Concord Municipality. For the first time, you receive a copy of this Circular as a result of Concord ... and Drummoyne ... Councils' decision, without any discussion or public input whatsoever, to proceed 'to pursue discussion on amalgamation.' The process is nothing but fraud, but is given legitimacy by Harry Woods, State Minister for Local Government. Guess what? Our month-long initial investigation into 'Concord', its Mayor and Councillors, throws up just as much of the same muck as that in 'Drummoyne'. We look forward to publishing most of it in the forthcoming months prior to the next election, to show you just what incompetents decide Local Government policy in both areas and what they do with your money. 'Drummoyne' had Mayor Megna, (until Sept. 8th), a proven and continuous public liar, Lloyd (general manager) the same, and a group of ineffective and politically controlled Liberal and Labor Councillors ... To the amalgamation! ... the Carr Labor Government ... has taken away local democracy from you and given both Councils the opportunity to amalgamate ... ... Amalgamation is nothing more than a blatant attempt by the Carr Govt. to seize a gigantic slab of power over local individuals, to take away those individual's right to local democracy, their one source of available input as 'grass root' level, and dilute it into a smaller number of far larger Councils throughout this State. That's control. That's what this is about. And the Liberals? They want it TOO! Here we have a Liberal Mayor 'crawling' to his political opposition superiors at a State level, without backbone, absolutely aware of the negative attitude of Drummoyne Municipality residents toward this sham ... For good riddance, these Councillors voted on your behalf, without consultation, to cancel the Council elections in Sept., the only time in 4 years in which you are able to deal with inept Councillors. You also had your Constitutional Referendum decision of 1998, to vote for a new Mayor scrubbed. They call that democracy? And who paid to that Drummoyne Referendum back in Nov. '98? Of Course, YOU DID! The mug resident! More Council waste ... ... In fact, both Councils' staff have already been told that there will be no staff redundancies. Based upon Megna's feeble record, how could we believe anything he says about anything?" (original emphasis)

This item conveyed the following imputations: "● 24(a): that as Mayor of the Council Mr Megna is a continuous public liar; ● 24(b): that Mr Megna is dishonest in his public office as Mayor of the Council; ● 24(c): that as Mayor of the Council Mr Megna lacks credibility; ● 24(d): that as Mayor of the Council Mr Megna practices deceit at every Council meeting; ● 24(e): that as General Manager of the Council Mr Lloyd is a proven continuous public liar; ● 24(f): that as General Manager of the Council Mr Lloyd is dishonest."

The trial judge considered, at [468], in respect of imputations 24(a) and 24(e), that there was "no semblance of communication of information on a matter relevant to recipients". Accordingly, the imputations were not published on an occasion of qualified privilege. Her Honour added that there was nothing in the content of the publication that was relevant to any such occasion.

Her Honour next dealt with imputations 24(b) and 24(f), noting that those imputations derived from the passage concerning the deferral of elections. Her Honour considered, at [469], that those imputations were not published on an occasion of qualified privilege, and were not relevant to any such occasion.

Her Honour, in respect of imputation 24(c), held, at [470]-[471], that the imputation, which derived from the reference in the item to Mr Megna's "feeble record" followed by the query "how could we believe anything he says about anything?", was an attack upon Mr Megna, notwithstanding that the item purported to communicate information on the subject of the Council amalgamation.

In my opinion, there was sufficient connection between the defamatory imputations and the subject matter of the item.

The appellants next challenged her Honour's findings in respect of the twelfth, thirteenth, fifteenth and sixteenth matters complained of, being publications under the following respective headings: "LIAR, LIAR, LIAR LIES AGAIN" (the twelfth matter complained of); "$5,000 REWARD" (the thirteenth matter complained of); "WHY?" (the fifteenth matter complained of); and "RECENT COURT CASE - MEGNA AND MARSHALL" (the sixteenth matter complained of). The appellants contended these matters concerned a continuing public dispute between Mr Marshall and Mr Megna. The trial judge rejected the appellants' argument that there was a relevant interest in the subject matter. It will be convenient to deal with these matters together.

Although the appellants submitted that these items should be considered together, it is preferable to first consider the twelfth and thirteenth matters complained of, as her Honour's finding in respect of each was that there was no foundation laid for proving the truth of the matters alleged.

The item in the twelfth matter complained of, presently under consideration, was: "LIAR, LIAR, LIAR LIES AGAIN: Back to Megna. As you may recall, and for the benefit of Concord residents, we released the story of Megna's delivery of criminally defamatory circulars on the evening of 27th May in Abbotsford, Chiswick and Drummoyne Unit areas. The circulars were a direct copy of this Ratepayers' Circular, but defaming many in the Drummoyne Municipality, including local Labor State Member for Drummoyne, John Murray. Megna's circular was written by Cr [L], and was a 'payback' for information released over 18 months of publication in Our Ratepayers' Circular. [L] assisted its delivery. Megna was apprehended by 2 Drummoyne Councillors and 2 residents in a back street of Abbotsford. A Police Report is now held by our members, and it confirms the witnessing of the delivered circulars by a police officer. Tabled and public fact! Well, like the liar he is, 2 weeks later, Megna issued his own personal letter, signed by him, advising, 'I strenuously deny all the accusations made against myself by the above Senior Citizens Club and the above Ratepayers' Association ... the claims made by both these organisations are highly defamatory, devoid of any truth and totally lacking in evidence.' Megna even denied the matter to his own Rotary Colleagues, and to his own Liberal Party members, But the Police were called whilst Megna was being detained by the 4 apprehenders (recorded fact), and the report clearly confirms results of the Police investigation. Not bad for one who is a Mayor. As we have been saying for 18 months, Megna is a liar, and you should visit Council meetings if only to witness the mouthful of deceit spewed out each time. We are sure he doesn't even know when he is and isn't lying. At the time of writing, Drummoyne and Five Dock shopping centres have been the subject locations for many stickers in prominent positions. They say: 'Mayor of Drummoyne Megna is a liar'. It would appear others, apart from our Association members, are upset with him. This Association is not responsible for these stickers. One apprehending Councillor and Cr Tserakis (Labor) have continually asked for debate on the Mayor's apprehension. Megna and Lloyd block any debate, advising 'it is a private matter'. It may well be. But hang on, if so, why are Council employees (CanBay) and not Megna himself being used to remove the stickers which are replaced a couple of days later. What is the cost to ratepayers? We have the feeling the stickers matter will become a lot more stickier yet!" (original emphases)

This article was held to convey imputations 24(a) and 24(d) set out above at [244].

Her Honour, at [473]-[477], analysed this item as containing the following assertions. First, that Mr Megna had been seen delivering "criminally defamatory circulars". Secondly, that Mr Megna had been apprehended by two Councillors and two residents and that the Association held a copy of a police report in which, it was asserted, Mr Megna had been seen by a police officer delivering the circulars. Thirdly, that Mr Megna denied that he was responsible for those circulars to his Rotary club and his Liberal party colleagues. And, finally, that the Association was not responsible for stickers found in the shopping centre asserting that Mr Megna, the Mayor, was "a liar".

Her Honour, at [479], recorded that the claimed occasion of qualified privilege in respect of this publication was that Mr Megna was responsible for delivering certain documents, which gave rise to subsequent court proceedings at Burwood Local Court. Those proceedings, which are referred to below in relation to the sixteenth matter complained of, related to a charge of assault brought against Mr Marshall and an application for an apprehended violence order against Mr Megna at the instance of Mr Marshall. Her Honour concluded events that post-dated the publication did not assist in determining whether an occasion was privileged. Accordingly, she rejected the appellants' reliance on the Burwood Local Court proceedings in May 2000 as having any relevance to the determination whether the material was published on an occasion of qualified privilege. No particular complaint is made by the appellants against this aspect of her Honour's reasoning.

The trial judge noted that this item referred to a leaflet that Mr Megna had circulated in the municipality offering a reward of $5000 for information that would assist identify the anonymous publishers of the circulars. Her Honour also referred to the copies of Veritas that Mr Megna had published, which contained material critical of Mr Marshall. The first issue of Veritas questioned Mr Marshall's commitment against "overdevelopment". The second issue included a statement that labelled his conduct as "hypocrisy". The Veritas newsletters were published in October 1999 and "late" 1999 respectively.

The trial judge, at [488], rejected that this was an occasion of qualified privilege. As her Honour concluded, at [488], that there was "no evidence remotely approaching that accusation [of publication of criminally defamatory material by Mr Megna]". Nor was there evidence to bear out the assertions of the police report.

The thirteenth matter complained of was contained in the November 1999 circular and was in the following terms: "$5,000 REWARD: Seems this newsletter is really getting up the nose of the deviates. Sue Gregory (Chairman of the Waste Board Authority), partner of Drummoyne's Cr. [L] (who is Megna and his majority vote clan's nomination for the Waste Board director's job at a good salary) placed herself outside of Drummoyne Civic Centre on the evening of 19/10/99, the time of the Council's monthly meeting for October. She was distributing a leaflet. It read: '$5,000 reward for information leading to a successful prosecution for criminal libel of the editor, publisher, printer or distributor of the anonymous newsletter titled the Drummoyne Council Ratepayers Association Newsletter.' It then states the 'sheet' has been 'libeling' Drummoyne Councillors, [L], staff etc for 'too long'. It says a successful prosecution needs evidence and asks the reader to provide statutory declarations, home movies, photographs etc and to appear in Court as a witness. The instigators are stated as Crs. Megna, [L] and [M] (all vote together on Council). Let's make it clear, this Association prints what is proven to be truthful and what is relevant to Drummoyne Council ratepayers and in the public interest. The written and proven evidence held is overwhelming. Legal advice over the past 2 years leaves us in no doubt about the legal strength of our position. Residents letters are a tremendous insight to matters which would never normally surface. And there's buckets of it. Any Court hearing into Drummoyne Council will bring out the lot. Some unpublished matters are absolutely criminal. We'll spew it out long and hard, backed up by the evidence. There will be plenty who'll run for cover. Isn't the simple answer for those associated with Council, to just do the job and cut out the manipulation and devious proceedings. Of course that's impossible. That's why this Association is around. Get it right and the newsletter will then disappear. For those of you who may be 'money hungry', we urge you to check just where the criminal libel is in our newsletters. But wait, legal advice to us confirms that 'criminal libel' did appear in ONE EDITION issued in May this year. That edition was not produced by this Association but by Crs. [L] and Megna. Yep, the instigators of the $5,000 reward. Their bogus newsletter was a slandering payback for material released by this Association in the past. How's that for 'manipulation'. We've already conveyed the story to you of Megna's apprehension at about 11.00 p.m. on 20/5/99, whilst distributing the 'bogus' circular. One or both wrote it, and both delivered it. Barristers have confirmed 'criminal libel' therein and John Murray (State Local Member) was libelled criminally. Seems to us, if any Court matter proceeded, those who caught Megna would be in a position to ultimately claim the $5,000. Rotten? You bet! And the further joke? It should be noted, Megna has already confronted one of our Circular distributors on several occasions in the past 12 months, whilst on the job. Distribution is not unlawful. He knows the person well, has photographed the newsletter distribution, has not proceeded with any Court proceedings, and yet, still issues a reward notice. Joke? The $5,000??? You, the public will never see the $5,000. You see, apart from all of this nonsense, and the truthful reporting by this Association, Councillors cannot take a prosecution for 'Criminal Libel'. Only the State Attorney-General has that capability. (Precedent: Drummoyne Council v The ABC). So, Crs. Megna, [L] and [M] could well end up dragging you, the unsuspecting resident, into a legal nonsense, at real cost to yourself. Enough said!"

The imputation conveyed by the penultimate paragraph was as follows: "● 26(f): that as Mayor of the Council Mr Megna has engaged in criminal conduct."

Her Honour held, at [504], that the matter complained of was a "diatribe" consisting of an allegation of baseless criminal conduct. Her Honour held, at [504]-[505], that it did not convey information of any kind and concluded that there was no occasion of qualified privilege.

Her Honour's conclusion in respect of imputations 24(a), 24(d) and 26(f), should be upheld. It is to be remembered that the appellants bore the onus of making out the defence. It has frequently been stated in the authorities that a defendant, who claims that defamatory statements are protected by the defence of qualified privilege, must demonstrate by evidence that there is the necessary duty and interest to give rise to the occasion for privilege. It is also often said that for the occasion of privilege to arise it must be established that the audience has an interest in knowing the truth: see Bennette v Cohen (referred to above at [91]). Her Honour was not satisfied, because there was a complete absence of evidence as to whether there was a relevant interest, that the content of the items in question were true. In my opinion, this was a finding that the appellants had not discharged the onus of establishing that an occasion of qualified privilege arose.

The fifteenth and sixteenth matter complained of may also be considered together.

The fifteenth matter complained of was contained in the February 2000 circular, in the following terms: "WHY? Oh dear!. Oh dear! Did you see it? Megna signed it. Looked like a kid wrote it, such a funny little illiterate piece of junk which arrived this week. A perverse, hate-filled, piece of loathing literature. God, does Megna loathe Cr. Marshall. We'll skip the recognisable and expected lie filled contents. But we do want to clear up one matter by way of the truth.. Last year, Megna physically hit Marshall with his vehicle whilst stalking Marshall in a Drummoyne street. Marshall a month later, and when again being stalked by Megna, smashed Megna's windscreen during confrontation. Megna has had Marshall charged with causing malicious damage, Marshall has been successful in gaining the Court's restraining of Megna via an Apprehended Personal Violence Order. One has to ask, why did Marshall smash Megna's windscreen, - just for something to do? For practice??? No, you know Megna's public propaganda is always a lie. And it is no different here. The two matters will be heard in Burwood Court on 1/5/2000, and it will be worth the visit to watch the antics. We'll take bets now on who is telling the truth. And it will be truth which wins this fracas."

The imputation conveyed by this item was: "● 30(a): that as Mayor of the Council Mr Megna is a constant public liar."

Her Honour, at [552]-[555], noted that there had been evidence in the case concerning an incident of a smashed windscreen and that there was a reference to that incident in the circular Veritas No 2. Mr Megna had claimed in his evidence that Veritas No 2 was political comment. The appellants contended that in the fifteenth matter complained of they were also engaged in "political comment".

At [556], her Honour recorded that the appellants had not sought to defend this item on the basis of "that special category of qualified privilege as constituted by a response to an attack". Her Honour rejected Mr Marshall's submission that, even if the publication was political comment, as he contended, it necessarily constituted an occasion of qualified privilege. Her Honour also, at [558], rejected that the item, even though evidently intended to be a matter of "self-justification", gave rise to an occasion of qualified privilege.

The sixteenth matter complained of was contained in the October 2000 circular and was in the following terms: "RECENT COURT CASE --- MEGNA AND MARSHALL: Why didn't the local papers print the truthful conclusion to this intriguing Court spat between the two profile Drummoyne Councillors? Our three local newspapers receive revenue from Council advertising. The Court case indirectly involved this newsletter and its distribution. Our newsletter prints the truth and clearly events have been proven over the past 3 years. As an ex-mayor and leader of the majority voting Councillors on Drummoyne Council, Megna holds a deal of power re: local decision making. He is a proven and consistent public liar. The newspapers, therefore, are positioned poorly in their reporting of such a 'delicate' matter. If they did print the truth in this matter they risked a rout at the hand that feeds them. We'll get on with it. Megna claimed that Marshall had maliciously damages his vehicle windscreen. You see, Marshall assists delivery of these newsletters to you. Despite other accusations, he has no other role with this Association, and is not the writer of these articles. Marshall, however, does want you to know about the devious dealings by the deviates in and at Drummoyne Council, the wasted dollars, the horrific costs of ongoing consultants, wasted legal expenses and so on. Marshall has an encyclopaedic knowledge re: the Local Government rule book and Council matters dating back more than 12 years. Megna will do anything to stop the issue of our newsletters. He wants to lie, cheat and coerce on Council without interference. Marshall, as a result, is at Megna's tail whenever the manipulation arises. On several occasions in the past, Megna has stalked Marshall when delivering our newsletters. On one occasion., the Court heard, Megna deliberately hit Marshall's leg with his vehicle, whilst Marshall was in a public driveway, actually drove four and a half metres over a public footpath to get at him. At the time Megna took a photograph of Marshall, so the Court heard, and actually spoofed it off to other Councillors as 'I frightened him off'. In Megna's version of the alleged incident which happened on Hampden Road and Parkview Avenue, Megna claimed one hour after the incident in his Police Statement, that the incident took place in Curtin Avenue, but could not identify any house numbers. A fact he later changed with under examination by Marshall in the Court. Another time in Nov. 99, Megna was again stalking Marshall and pursued him through several streets in Abbotsford. At the point when Marshall feared he was about to be run down by Megna he produced his walking stick to stop Megna again driving his car at himself, and that resulted in the smashed windscreen. Marshall told the Court that he wasn't about to let Megna clout him again with his vehicle and held fear for his own safety. What has not been reported? Once a liar, always a liar. Yep! Even in the witness box, under oath, Megna produced the lies, they rolled out, and he forgot and changed his Police statement on occasions. Even the Police Prosecutor, in the middle of the Court proceedings, let slipwith 'made yourself a prime target for this maniac that's run over you before?' Marshall simply replied, 'your words, not mine'. We wish space allowed an expanded report, you'd love it. In summary, the Magistrate ruled Marshall had no case to answer; and dismissed the Court action. What was important, was that Marshall conducted his own defence, made a goose of the Police officer (in the witness box) to whom Megna gave his report, and then proceeded to tear Megna's evidence apart throughout the hearing. And that is the truth!" (original emphasis)

This item conveyed the following imputations: "● 32(e): that as a Councillor on the Council Mr Megna is a proven and consistent public liar; ● 32(f): that as Councillor on the Council Mr Megna wants to lie, cheat and coerce on Council without interference."

The background to this item was as follows. There were proceedings in the Burwood Local Court that were heard consecutively. The first was in respect of a criminal charge brought by the police against Mr Marshall for malicious damage to Mr Megna's motor vehicle. The second was Mr Marshall's application for an apprehended violence order against Mr Megna. The criminal charge was dismissed. It should be noted that the appellants accepted that all of these matters concerned a continuing public dispute between the appellants and Mr Megna.

The trial judge considered, at [585], that it was possible that criminal proceedings between two Councillors could be a matter of legitimate interest to ratepayers. However, her Honour observed, at [586], that the content of the article did not purport to provide information of any substance with respect to court proceedings. Rather, the subject matter of the item was "vitriolic abuse" of Mr Megna. Her Honour recognised that vitriolic abuse could be the subject of qualified privilege, provided there was some information conveyed, but that was absent in this case.

Her Honour found, at [588], that even if there was an occasion of qualified privilege arising out of the subject matter of the article, being court proceedings between Councillors, the content of the article was not relevant to that occasion.

In my opinion, the trial judge's assessment of the defence of qualified privilege in respect of these imputations has not been shown to be appellably wrong. As her Honour recognised, a public dispute between two Councillors could give rise to an occasion of qualified privilege. However, her Honour had regard to the communication as a whole and considered that it did not in fact purport to be an account of such proceedings. Despite the references to the proceedings in the article, there is a predominant emphasis upon Mr Marshall's forensic victories over Mr Megna as well as matters unconnected with the proceedings.

There were two final sets of imputations subject of the appellants' challenge. Imputations 26(a)-(d) and (g) arose out of an item in the thirteenth matter complained of entitled "COUNCIL AMALGAMATION". Imputations 28(b)-(d) arose out of the fourteenth matter complained of.

The item "COUNCIL AMALGAMATION" in the thirteenth matter complained of again complained that had the September elections been allowed to proceed the Liberal Councillors, including Mr Megna, would have been "kicked out" by the electors. These Councillors were referred to as "deviates" and "devious vermin". The cancellation of the election was described as a "farce" and "morally corrupt" and it was asserted that deals had been done amongst the Councillors to secure their positions on the amalgamated Council. Mr Lloyd was said to be implicated in these matters. The imputations found to be conveyed were that Mr Megna was "dishonest", had "engaged in manipulation to avoid a Council election", was "morally corrupt", "devious vermin" and that Mr Lloyd "had colluded with Mr Megna to amalgamate ... [the] Councils against the best interests of residents".

Her Honour, at [497], accepted that the question of Council amalgamation was a legitimate topic on which to communicate information. However, at [498], her Honour considered that the passages from which the imputations were drawn were "devoid of any informative content" and were "purely abusive". In her Honour's opinion, the passages bore no character of the communication, which created an occasion of qualified privilege, nor were they relevant on the occasion of qualified privilege.

Imputations 28(b)-(d) were contained in an item headed "COUNCIL AMALGAMATION RORT" in the January 2000 circular, being the fourteenth matter complained of. The article included the following: "COUNCIL AMALGAMATION RORT: In our July, September and November '99 circulars, we alerted you to Drummoyne and Concord Councils' 'persual of amalgamation', beginning in June, how that was simply a fraudulent front to their already secretly planned arrangements, how they were 'preserving' their own interests and just how Megna and Woods (each of the Councils' then Mayors) backed by their own deviate Councillor supporters, were manipulating you, the ratepayers to the hilt. Now let's add the salt to the juice, confirmation of the real situation. ... So, why didn't Drummoyne Council tell us that in their Business Paper, dated 16/11/99 Council didn't need to check, because Lloyd (Gen. Mgr) already knows it's a whole lot of 'wink, wink, nudge, nudge' stuff. Lloyd's Business Paper lied to the public ... ... Talk about a mates' deal. Isn't the whole thing racked with conspiracy and fraud? Back in June '99, Megna the liar was Mayor of Drummoyne. He was responsible for introduction of Drummoyne Council into this amalgamation situation. We believe, whilst he speaks for the Liberal cause, his actions reflect the Labor policy, i.e. he is even dishonest in his political allegiance and speaks with a forked tongue. If you doubt this, are you aware the Liberal Party will not endorse Megna as a Liberal candidate at the next Local Govt. election? They know he is a liar via his adverse Council manipulations over many years. He has discredited the local Liberal calls, substantially ... ... So, for you, the ordinary ratepayer, what can you do? Just remember, it is in your vote that will kick out these deviants in due course. Those Drummoyne Councillors complying with the decision to pursue amalgamation without truthful independent consultants' reports include Megna ... In addition to all the above, and, as previously advised to you, Drummoyne and Concord Council each appointed three Councillors from their respective Councils as 'task force' members, to appraise the amalgamation proposal. At the December monthly meeting, Megna stood to confirm an 'unbiased' selection to the Drummoyne Council group, i.e. himself (in favour), [F] (against) and [H] (undecided). That was supposed to be truthful. Liar Megna lied again, as you can see above. The Group already has a 2 to 1 vote for amalgamation ... So, you see, at each and every turn, these deviates have constructed the plan to amalgamate, without your input or truthful reporting ..." (emphasis in original)

The imputations subject of challenge were as follows: "● 28(b): that as Mayor of the Council Mr Megna was a liar; ● 28(c): that as Mayor of the Council Mr Megna was dishonest in his political allegiance; ● 28(d): that as Mayor of the Council Mr Megna was a deviate."

Her Honour held, at [517], that if the title to the item was taken at face value, it "would have been published on an occasion of qualified privilege [as] the subject matter of Council amalgamation is a matter of legitimate public interest to residents and ratepayers". Thus, imputations 28(a) and 28(f) were held to be published on an occasion of qualified privilege. However, her Honour rejected the defence in respect of imputations 28(b) and 28(c) which are the subject of the appeal. In her Honour's opinion, the material that gave rise to those imputations was not directed to any issue in which residents and ratepayers had a legitimate interest. Rather, they focused almost exclusively upon Mr Megna and his relationship with the Liberal party. Her Honour also rejected the defence of qualified privilege in respect of imputation 28(d) on the basis that the passage did not convey information relevant to ratepayers.

I do not consider that her Honour erred in her findings in respect of imputations 28(b), 28(c) and 28(d). Although it is necessary to consider the content of the defamatory publication as a whole, if portions thereof are so disconnected from an occasion of qualified privilege, it is appropriate to separately examine the defamatory portion of the publication. It is different if the defamatory portion was singled out as if unconnected to the publication as a whole. In my opinion, that was the approach that her Honour took to the imputations in the fourteenth matter complained of. For the reasons her Honour gave, her findings that there was no occasion of qualified privilege and that the imputations, in any event, were not relevant has not been demonstrated to be erroneous.

The respondents contended that her Honour erred in finding that the matters complained of were not actuated by malice.

The defence of qualified privilege will be defeated where it is established that the defendant was actuated by an improper motive: Roberts v Bass at [76]. As the plurality observed in Cush v Dillon at [27], malice will be established where the person who made the defamatory statement did so for "some purpose ... foreign to the privilege".

Malice must be proved by evidence. Almost invariably, such proof will be based upon the inferences to be drawn from the defendant's conduct or from the actual content of the defamatory material. In order for malice to be proved, the fact finding tribunal must determine whether the defendant acted, in making the defamatory statement, "from a desire to discharge [the] duty" which founds the occasion of privilege: Clark v Molyneux (1877) 3 QBD 237 at 250.

In Roberts v Bass, the Court was concerned with three written publications about the respondent, who was a candidate for election to the House of Assembly in South Australia. Each publication was made by the same person, who caused them to be distributed through the respondent's electorate on two occasions and, on the day of the election, in the form of a 'how to vote' card. As has already been discussed, the privilege in that case arose because statements were made in the course of an election contest. Accordingly, the case fell within the category of the 'election cases' recognised as a form of traditional common law qualified privilege. In that context, Gleeson CJ observed, at [8]: "The kind of malice that defeats a defence of qualified privilege at common law is bound up with the nature of the occasion that gives rise to the privilege."

After referring to Lord Diplock's statement in Horrocks v Lowe at 149 (set out below at [303]), Gleeson CJ, at [11], referred to the description by Lord Greene MR in Braddock v Bevins at 591, as to the meaning of interest and the corresponding duty in the context of elections or political debates. His Lordship described the relevant interest as being an interest "to have what is honestly believed to be the truth communicated" and the correlative duty to electors "to inform them honestly and without malice of any matters which may properly affect their choice in using their suffrages". Gleeson CJ then observed, at [11]: "... However, a motive, even a dominant motive, of damaging the electoral prospects of a candidate for election may be perfectly consistent with an honest expression of opinion, or an honest assertion of fact, about the candidate ... A motive of injuring a candidate by diminishing his or her prospects of election does not constitute malice; that would be repugnant to the very basis of the privilege in an electoral contest." (emphasis added)

The Chief Justice, at [13], stated that on the assumption there were two distinct classes of privilege relating to political comment, and on the further assumption that the Court was dealing with a case of traditional qualified privilege: "... the test of malice must be whether the matter in question was published for the purpose that was said in Braddock v Bevins to attract the privilege, that is to say, the honest expression of views about a candidate for election." (emphasis added) His Honour continued that malice was not established by showing that the views expressed in the publication were "wrong-headed, or prejudiced, or carelessly formed, or even irrational". However, his Honour indicated that it would be contrary to the purpose of the privilege to use the occasion to publish views knowing that they were false, or not caring whether they were true or false.

At [14], his Honour stated that Braddock v Bevins was authority for the proposition that in the context of an election contest, qualified privilege would protect the honest expression of political views, which were damaging to the reputation of a candidate, and which were deliberately intended to harm the candidate's prospects of success, "no matter how strongly put, and no matter how unreasonable they may be". His Honour reiterated, at [15], that "mere absence of a positive belief in the truth of what is said does not constitute malice".

To the same effect were the statements of the plurality (Gaudron, McHugh and Gummow JJ) at [68], [69] and [74]: "68 ... the vigour of an attack or the pungency of a defamatory statement concerning such matters cannot, without more, discharge the plaintiff's onus on the issue of malice ... 69 ... Without more, the vigour of the attack is not evidence of improper motive ... 74 ... Nor can the vigour of an attack or the pungency of a defamatory statement, without more, be evidence of improper motive in respect of such a statement ..."

Their Honours stated, at [75]: "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, 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 18th century - Lord Campbell CJ said that malice was 'any indirect motive, other than a sense of duty'. Similarly, in an action for slander of title, Parke B said that 'acting maliciously means acting from a bad motive'. 'If the occasion is privileged', said Brett LJ, '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 - 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.'" (citations omitted) (emphasis added)

Their Honours, at [76], continued: "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." (original emphasis)

Their Honours further stated, at [76], that in the special case where the defendant knew of the falsity of the defamatory statement, then proof of this knowledge would ordinarily be conclusive evidence that the publication was actuated by an improper motive and the qualified privilege would be defeated: Mowlds v Fergusson (1939) 40 SR (NSW) 311 at 327 per Jordan CJ; Horrocks v Lowe at 149-150 per Lord Diplock. This was distinguished from the case where there was "mere proof of the defendant's ill-will, prejudice, bias, recklessness, lack of belief in truth or improper motive", which the plurality held was insufficient, in itself, to establish malice.

It should be noted, however, that in Cush v Dillon, Gummow, Hayne and Bell JJ, at [29], qualified this statement by observing that such knowledge may be "almost conclusive evidence of malice". As their Honours explained: "This is because a person who knowingly publishes false and defamatory material will usually have an improper motive. A lack of belief in the statement may stand in a different category. But in neither event is there warrant for equating knowledge or lack of belief with actual malice." (citation omitted)

Their Honours recognised that knowledge of falsity may be insufficient if the defendant was under a legal obligation to make the defamatory communication. The plurality also pointed out, at [76], that mere proof of the other factors to which they had referred was not sufficient to establish malice. Rather, some ground had to be shown for concluding that one or more of such matters both "existed on the privileged occasion and actuated the publication" (original emphasis). However, malice may be proved even if factors such as those referred to above do not exist, provided that it is established that the publication was actuated by a motive foreign to the privileged occasion. As their Honours pointed out, at [76]: "... [this] is because qualified privilege is, and can only be, destroyed by the existence of an improper motive that actuates the publication."

These tenets were approved by Gummow, Hayne and Bell JJ in Cush v Dillon in the following terms: "27 ... The question is whether some purpose foreign to the privilege caused Mrs Dillon to use the words she did. 28 In Roberts v Bass it was pointed out that qualified privilege, which attaches to a defamatory statement, can only be destroyed by the existence of an improper motive that causes the person to make the statement. Thus, lack of belief in the truth of the statement, or even ill-will felt towards the person defamed, will not be sufficient. There must be evidence that the making of the statement was actuated by improper motive. As Cotton LJ said in Clark v Molyneux the question is 'whether [the defendant] acted as he did from a desire to discharge his duty." (citations omitted)

Their Honours observed, at [77], that: "If the defendant knew the statement was untrue when he or she made it, it is almost invariably conclusive evidence of malice. That is because a defendant who knowingly publishes false and defamatory material almost certainly has some improper motive for doing so, despite the inability of the plaintiff to identify the motive." (citation omitted)

At [78], their Honours dispelled the notion that the defendant's knowledge of the falsity of the defamatory material or lack of honest belief in making the publication constituted a separate head of malice. Rather their Honours asserted: "Knowledge of falsity is 'almost conclusive evidence' that the defendant had some improper motive in publishing the material and that it actuated the publication. That judges have treated knowledge of falsity as almost conclusive evidence of malice is no ground, however, for treating it as a separate head of, or equivalent to, malice." (emphasis added)

Their Honours, at [79], restated the fundamental proposition underlying malice: "It is the motive or purpose for which the occasion is used that is ultimately decisive, not the defendant's belief in the truth of the matter."

In respect of the defendant's lack of belief in the truth of the defamatory material, the plurality stated, at [82]: "The privilege is not curtailed if lack of belief in a particular matter is merely some evidence from which it may be inferred in some circumstances that the defendant was actuated by an improper motive."

Their Honours continued, at [83]: "In our opinion, neither lack of honest belief nor knowledge of falsity ipso facto destroys a defence of qualified privilege. But knowledge of falsity is 'almost conclusive evidence' of improper motive, except where the defendant is under a legal duty to publish the defamation."

Their Honours noted, at [84], that recklessness, in combination with other factors, may constitute "cogent evidence" that a privileged occasion was used for an improper motive.

Their Honours also noted, at [87], that mere lack of belief in the truth of a communication was not the equivalent of knowledge of the falsity of the communication, and therefore could not be treated as conclusive proof of malice.

At [87], their Honours further considered the circumstance where recklessness could be treated as evidence of malice. Their Honours stated that recklessness had to be accompanied by "some other state of mind", for instance, "anger, hatred, bias or unreasoning prejudice".

Their Honours, at [90]-[95], considered the authorities that establish that only knowledge or belief in the falsity of the defamatory statement will ordinarily be treated as conclusive evidence of an improper motive.

The plurality noted, at [97], that the plaintiff bore the onus of proving that the defendant acted dishonestly by using the occasion for an improper purpose.

In accordance with established principle, the trial judge noted, at [172], that an occasion of qualified privilege could be defeated by malice. As Lord Diplock had stated in Horrocks v Lowe at 149: "The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so. What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue. With some exceptions which are irrelevant to the instant appeal, the privilege is not absolute but qualified. It is lost if the occasion which gives rise to it is misused. For in all cases of qualified privilege there is some special reason of public policy why the law accords immunity from suit - the existence of some public or private duty, whether legal or moral, on the part of the maker of the defamatory statement which justifies his communicating it or of some interest of his own which he is entitled to protect by doing so. If he uses the occasion for some other reason he loses the protection of the privilege." (trial judge's emphasis)

A matter that concerned her Honour, and which was a focus of the argument on the appeal, was whether the language used in the publication was evidence of malice. In this regard her Honour, in a detailed review of the authorities, referred to Earl Loreburn's statement in Adam v Ward at 321: "Language has been used in some cases which seems somewhat to confuse the two separate points, namely, whether the defendant has gone beyond the privilege which the occasion creates [ie has published something irrelevant to (or not connected with) the occasion], and whether the defendant has forfeited the privilege by malice. Excess of privilege in part of a defamatory publication may of course be evidence of malice as to the whole of it, but the two things are different. The one is a matter for the judge, the other is matter for the jury." (trial judge's emphasis)

Her Honour, at [87], concluded that the authorities, at least until the decision of this Court in Skalkos v Assaf [2002] NSWCA 14, had consistently held that the privilege could not be lost by virtue of the language: see Huntley v Ward at 517. As her Honour observed, at [93]: "Adam v Ward ... is authority for the proposition that, provided that the defamatory statement is relevant to the subject matter in respect of which the privilege is conferred, an excess of language, no matter how abusive it may be, does not render the occasion unprivileged, or the communication unprivileged ..."

Her Honour concluded, at [96], that the effect of the English authorities was that as long as the defamatory communication was relevant to the occasion of qualified privilege, gross or inflammatory language would not defeat the privilege "unless the plaintiff establishes that the purpose of the defendant in publishing it was a malicious one" (trial judge's emphasis). Her Honour observed, at [97]-[98], that a similar approach had been adopted by the High Court in Roberts v Bass in the passages extracted above.

At [599]-[602], her Honour summarised the propositions that she considered were established by the authorities as follows: (1) Malice is established when the plaintiff has shown that the defendant has used an occasion of qualified privilege for an improper purpose; (2) Malice is not proved by the 'pungency' of the publication alone, nor is it simply established by proof that the defendant harboured ill will, bias or prejudice towards the plaintiff: see Roberts v Bass at [10], [76] per Gleeson CJ; (3) The plaintiff must show that there is a causal connection between the ill will, bias or prejudice and the publication, that is, that the publication was actuated by ill will, bias or prejudice: see Mowlds v Fergusson at 327-329; (4) In the context of an election, the mere desire to injure a candidate by diminishing his or her prospects of election does not constitute malice nor does such a motive negate malice: see Roberts v Bass at [11]-[12], per Gleeson CJ.

Under the sub-heading "The Evidence" her Honour stated, at [603], that as neither Mr Marshall nor Mr Tory had given evidence, their respective motivations in publishing the circulars had to be decided by inference. Her Honour continued, at [604], that the circulars themselves were "ample evidence" that the author(s) "harboured ill will, bias and prejudice" towards Mr Megna and Mr Lloyd, but that was not in itself sufficient to establish malice.

Her Honour considered, at [605], that the content of the circulars revealed the authors "had a deeply held conviction about the management of the Council", which was adverse to both plaintiffs. Her Honour concluded, however, that while that conviction "was the source of the ill will, bias and prejudice" inherent in the circulars, it was the conviction, and not spite, that motivated the composition of the circulars.

There was another problem that the respondents had to confront in their proof of malice. There was no evidence of authorship of the circulars. The finding of publication against the appellants was that they had been involved in their distribution and perhaps in the printing of the circulars. Her Honour held that that was not sufficient to establish that either appellant harboured ill will towards either of the respondents. Her Honour further held, assuming that the tone of the publications was sufficient to establish malice, contrary to what had been stated in Roberts v Bass, that a finding of malice could not, on that basis, be transferred to the respondents as distributors and possible printers of the circulars. As her Honour noted, at [607], "[t]here is no doctrine of transferred malice in the law of defamation apart from the ordinary principles of vicarious liability: Bass v TCN Channel 9 Pty Ltd [2003] NSWCA 118 at [77]".

Her Honour noted, at [608], that there was some evidence of "actual hostility" between Mr Megna and Mr Marshall. The clearest example of this was the evidence of the confrontation between Mr Marshall and Mr Megna in relation to damage to Mr Megna's car in respect of which Mr Marshall, at Mr Megna's behest, was charged with malicious damage and Mr Marshall applied for an apprehended violence order against Mr Megna. However, the trial judge stated, at [609], that this evidence could not be treated as evidence of Mr Marshall's motive in distributing the publications for two reasons. First, the publication had in fact given rise to the confrontation and, secondly, this incident had occurred approximately 18 months after the publications had first appeared. Her Honour also noted that Mr Tory had corresponded with Mr Lloyd in a challenging fashion but considered that was entirely consistent with a ratepayer and resident seeking information that was relevant to him in that capacity.

Her Honour concluded, at [611], that there was no evidence of malice. Her Honour stated: "... the abusive tone of the circulars does not of itself establish malice. There is no other evidence of the motivation of either defendant in publishing. I am unable to find that either Mr Tory nor Mr Marshall was actuated by express malice in publishing the circulars. Indeed, I incline to the view that the vigorous - 'vituperative' - tone of the circulars, or some of the items therein suggests that the author(s) used the occasion of qualified privilege for precisely the purpose for which the privilege is conferred - to inform residents and ratepayers about matters to do with the conduct of Council, its Councillors, and the General Manager."

The respondents placed considerable emphasis in their submissions on the tone of the circulars as evidence of malice, pointing to the trial judge's statement, at [129], that: "The tone of at least some of the publications is so strident, so venomous, so vituperative, that, if that alone were a reason for denying the defence of qualified privilege, that result would follow in respect of those publications."

The respondents also submitted that, contrary to her Honour's finding at [606], that "[t]he most that is proved is that they delivered them, and, perhaps, that Mr Marshall had a hand in printing them", there was evidence that Mr Marshall, at least, had been the author of the circulars. They contended that the evidence in respect of the final circular specifically pointed to Mr Marshall as the author in that it was established that Mr Marshall had printed 22,000 copies of the final circular; that the circulars contained reference to an email account set up by Mr Marshall and that the only other person, who had been given the password to the account by Mr Marshall was Mr Tory; and that Mr Marshall had received a copy of that circular to print from Mr Tory. The respondents accepted that the latter two matters had been denied in evidence during the s 7A trial.

The respondents further contended that the trial judge should have taken into account the admission made by Mr Marshall at the s 7A trial, that he had taken part in distributing some previous circulars, and the following admission he made before O'Keefe J: "Q Do you know who wrote the newsletters which you acknowledge you distributed? A. I have previously disclosed that. Q. Who is that? A. Mr Tory."

The respondents submitted that the following conclusions were open to the trial judge and should have been made, namely: "(i) Mr Marshall certainly printed the seventeenth matter complained of. (ii) Mr Marshall received the copy for the seventeenth matter complained of from Mr Tory. (iii) Mr Marshall and Mr Tory, being the only ones with access to the password for reader feedback to the seventeenth matter complained of, were almost certainly the principals behind it. (iv) Mr Tory probably wrote the seventeenth matter complained of. (v) Mr Tory had written previous circulars distributed by Mr Marshall. (vi) Mr Tory probably wrote all of the circulars (taking into account the consistency of style, approach and attitude to the cross appellants demonstrated throughout). (vii) Mr Marshall, as a councillor with easy access to the numerous council business papers and other documents referred to in the circulars, and the patent self interest in being the only councillor presented positively in them, almost certainly contributed to their content."

The respondents submitted that there was a particularly strong basis for the conclusions in respect of the seventeenth matter complained of as there was a gap in time between the last of the previous series of circulars and the circular to which the seventeenth matter complained of related. The respondents conceded there was scope for an argument that the above conclusions were not so strong in relation to the earlier publications. The respondents submitted, however, that the fact that Mr Marshall had a printing press in his garage and had been willing to print the seventeenth matter complained of supported the inference that Mr Marshall would have been involved in the earlier printings of the publications. Therefore, the respondents contended that: "The evidence warranted a conclusion that Mr Marshall and Mr Tory were the principals behind all the circulars."

The respondents further contended that malice, in respect of the seventeenth matter complained of, could be separately determined as there were features in respect of that matter that were distinct from the other publications. In particular, the entire content was about Mr Megna and the title itself, "Michael Megna - You asked for it!", indicated that the publication's proposed purpose was to attack him. The respondents contended that the trial judge's conclusions, at [605] and [611], could not stand in light of the fact that at the time of the seventeenth matter complained of, both Mr Lloyd and Mr Megna were no longer on the Council.

Another factor relied upon by the respondents as evidence of malice was that the circulars stopped at the end of 2000, when Mr Marshall was an elected member of the Council but Mr Megna was not, and Mr Lloyd was no longer employed by the Council. The respondents submitted that it was to be inferred that the circulars stopped because Mr Megna and Mr Lloyd were no longer there as targets of the defamatory material. However, as soon as Mr Megna indicated that he may return to the Council, the circulars reappeared, albeit under a different guise.

The respondents submitted that these matters were sufficient to found an inference that "the dominant purpose of the circulars all along, though their authors clearly enjoyed taking a swipe at any suitable other target, was to attack the [respondents]". This was particularly so in relation to the circulars of August and September 2003, entitled "Community View", which, they contended could only be explained as part of "a vindictive and deeply personal crusade against Mr Megna". In this regard, the respondents contended that the malice in relation to the seventeenth matter complained of was "overwhelming". The respondents also submitted that the evidence in respect of the earlier publications was stronger than the trial judge had considered to be the case.

The appellants submitted that the contention made by the respondents that the appellants "almost certainly contributed" to the "content" of the circulars, was an assertion not made at the s 7A trial. The appellants relied on the trial judge's finding that the circulars were created out of conviction, rather than spite, to ground the contention that the characterisation of the appellants as the authors of the publications did not assist in establishing malice.

The appellants further contended that the language of "attack", relied on by the respondents in their submissions, obscured the issue. In the appellants' submission, an 'attack', even if it consisted of words of trenchant criticism, would still be privileged, provided it was "published for a proper purpose". In this regard, the appellants identified the 'proper purpose' as the communication of the "criticism to persons with a legitimate interest in its subject matter". They contended this is what had occurred in this instance.

In respect of the seventeenth matter complained of, the appellants submitted that the publication contained no imputations about Mr Lloyd and was focused solely on Mr Megna. The appellants contended that at the time of the seventeenth matter complained of, Mr Megna had announced an intention to stand for Council and that although the tone of publication was strong, the content of the publication was relevant to the subject matter of the publication.

In their oral argument on the appeal, the appellants placed considerable emphasis upon the statements in Roberts v Bass as providing clear support for their case that the tone of the publication was irrelevant to proof of malice. The appellants also submitted that the Court in Roberts v Bass had moulded the principles of malice to reflect the constitutional right of free speech in political matters.

The trial judge found, and it was not disputed, that the tone of the matters complained of was vituperative and increasingly so. A brief reference to some of the matters complained of illustrates the appropriateness of her Honour's description. In the ninth matter complained of (the March 1999 circular; imputations 18(b)-(d)), the language used included that Mr Lloyd had "lied", that "[r]esidents can do a lot better than this grub" and that: "He was dudding his own Councillors here ... We reckon that amounts to deception, or is it now called 'attempted fraud'? The dog!!"

In the eleventh matter complained of (the June 1999 circular; imputations 22(a)-(g)), the language used included that: "MEGNA (who was not going to contest the Election) AND LLOYD CAN CONTINUE THEIR RANGE OF LOCAL ABUSES UNTIL THERE IS AN ELECTION."

The fifteenth matter complained of (the February 2000 circular; imputations 30(b)-(e)), commenced with the following statement under the sub-heading "COUNCIL AMALGAMATION": "Our Circulars of the past few months have clearly demonstrated deception imposed upon this Municipality's ratepayers, the level of which is simply breathtaking in its magnitude."

There is then a reference to a proposed 'Information Night' to be held in respect of the amalgamation at which residents would hear, amongst others, Mr Megna and Mr Lloyd: "... extorting the virtues of an amalgamation ... in fabricated and abbreviated information. They will use a fraudulent consultant's report ... to coerce agreement from you ..."

In the seventeenth matter complained of (the August/September 2003 circular; imputations 34(a)-(h)) under the sub-heading, "Michael Megna - You asked for it!", the following statement appeared: "The Megna agenda has always been to lie and deny when confronted with the following information or toward anything which is critical of his public life motive, i.e. to get elected to local, State or Federal politics. 'I have done nothing wrong', Megna said ... Have a go at this heap of scabby muck and make up your own mind."

However, her Honour accepted, correctly, in my opinion, that the tone of the publication, of itself, was not sufficient to prove malice. That then raises the question as to what other factors, if any, were present so as to establish, by inference, that the appellants had an improper motive in publishing the matters complained of.

In support of their argument that the appellants were motivated by malice, the respondents argued that a finding ought to have been made that the appellants were in fact the principals behind the publication of the circulars. In my opinion, the evidence points strongly and even overwhelmingly, to that conclusion. The email address, that Mr Marshall admitted in his evidence in the s 7A trial he had set up, the location of the printing press in Mr Marshall's garage and Mr Marshall's evidence implicating Mr Tory given in the s 7A trial, all point in that direction.

The fact that the circulars frequently referred to Mr Marshall, and only infrequently to other Councillors, likewise gives a clue, together with the fact that Mr Marshall appeared to have been the principal, if not the sole distributor, of the circulars, that he was at least connected with its publication. The absence of any other evidence that would suggest some other person was responsible for what was contained in the circulars strengthens the inference that Mr Marshall and Mr Tory were the principals behind their content.

In my opinion, therefore, her Honour ought to have found that the appellants were responsible for the publication of the circulars as well as for their distribution. However, even if that is not correct, Mr Marshall's position cannot be equated to the position of the distributors of the 'how to vote' cards in Roberts v Bass. In that case, the distributors were on the team of the candidate who was responsible for the defamatory comments. Here, Mr Marshall was the other protagonist. It ought to be inferred that he had his own personal interest in the dissemination of the circulars, namely, the continual denigration of Mr Megna and Mr Lloyd. Accordingly, although her Honour's comment that there was no doctrine of transferred malice was correct in itself, I consider that the evidence, even of distribution, was sufficient to impute to Mr Marshall, at least, the same motives and hostility that the author must have had.

That then leads to the next point. Her Honour accepted, at [604], that the language and tone of the matters complained of demonstrated that the "author(s), harboured ill will, bias and prejudice" towards the respondents but noted, in accordance with authority, that that was not sufficient to prove an improper motive. Nonetheless, it is evidence of improper motive and there were other factors which made a finding of improper motive inevitable. The matters were: the anonymity of the authorship; the blatant deception that the circulars were published by the Drummoyne Council Ratepayers Association; and the concerted and crushing campaign against the respondents over an extraordinarily lengthy period of time.

Although it must be acknowledged that the circulars, which gave rise to the imputations subject of the cross-appeal, almost always were in connection with Council related matters, the cumulation of factors to which I have referred make it apparent that the purpose of the publication of the circulars was to wage a personal campaign to destroy Mr Megna and Mr Lloyd.

The respondents also contended that there were statements in the circulars, one in February 1998, which was in evidence but not the subject of a defamatory allegation, and the tenth matter complained of (the May 1999 circular), which were written so as to deceptively distance the purported Ratepayers Association from Mr Marshall. In the February 1998 circular, the following statement was made: "Over the past 3 years members of this Association have attended every monthly Council meeting and raised many questions to Councillors and Management of some of these items, too. None have ever been satisfactorily answered by the parties (another reason for this circular)." As there was in fact no association, this could only have been a reference to attendance by Mr Marshall in his capacity as a Councillor. In the tenth matter complained of, there was a reference to the coincidence in the association having a Gladesville Post Office box address and Mr Marshall having a business there.

In a similar vein was the thirteenth matter complained of (November 1999 circular) where there was a taunting reference to Mr Megna having confronted "one of our Circular distributors on several occasions in the past 12 months" and a further reference to distribution not being "unlawful". However, the circular failed to state that it was Mr Marshall that Mr Megna had found distributing the circular. Again, this was evidence that Mr Marshall was attempting to deceive the residents and to have them believe that there was a genuine association, with genuine interests to pursue, and in respect of which he had no connection.

There are other examples to which reference can be made briefly. In the May 1998 circular, being the third matter complained of and which conveyed imputations 6(a) and 6(b), the relevant item stated that the Association was not a community elected representative. The evidence disclosed that Mr Marshall was a Councillor at that time. In the October 1998 circular, being the sixth matter complained of, there was a reference to Mr Marshall in terms that gave no indication he was associated with the circulars. The same can be said of the seventh matter complained of.

In addition, I repeat the comment that I have made above in respect of the occasion not being one of qualified privilege. The deception that lay behind Mr Marshall's involvement in the circulars bore this undoubted feature. Anonymity of the author(s) and the concealment of Mr Marshall's role in the publication of the circulars prevented ratepayers from making a proper assessment of the material contained in the circulars. The principals behind the circulars clearly intended to represent the content of the circulars as being the genuine expression of concern of an association of ratepayers as to matters occurring in the municipality.

Had the recipients of the circulars been advised that the circulars contained the opinion of a political opponent, they would have been able to assess, for themselves, the content for themselves. Was the content merely a rant? Was it merely an attempt to belittle a political opponent? Was there merit in the matters raised? Or were the circulars a combination of these possibilities? In my opinion, the very fact of the deception was evidence that the principals behind the circulars were intent on concealing their identity and preventing the ratepayers from being able to properly evaluate the material. In my opinion, that was the improper purpose in the publication of the circulars.

The case of malice is even stronger in respect of Mr Lloyd. He was a paid public servant. He was not standing for political office. Yet the circulars consistently made reference to lies he had told and to his incompetence. This could only have been a personal attack upon him with a motive of having him removed from his position. The stridency of the public vilification, together with the other factors to which I have referred, including the deceitful covert publication of the circulars was evidence of and, in my opinion, sufficient to prove, malice.

Accordingly, even if the matters complained of, which are subject of the cross-appeal, were published on an occasion of qualified privilege, the occasion was defeated by malice. For both these reasons, the cross-appeal must succeed.

Mr Megna published two allegedly defamatory matters of Mr Marshall in a publication entitled Veritas. Only the second publication was found to be defamatory. It contained the following two items: "FIRST ISSUE FEEDBACK The first edition of this newsletter has certainly caused a reaction in the community. I have received many letters and calls of support and comments of 'it's about time you replied to the Drummoyne Council Ratepayers' Association monthly circular.' But it caused an even bigger reaction at the November Council meeting from two Councillors belonging to the Drummoyne Municipality Residents' Association (DMRA - notice the similarity in the names of both organisations?) Cr David Marshall, President of the above DMRA, who has admitted to delivering the defamatory monthly circulars, sat back and let his running mate, Cr [MW], attack me on one component of my letter. What was his only complaint? He didn't find a fault in Cr Marshall delivering defamatory material, nor in his support of big development and acting for developers. He didn't even get upset that Cr Marshall was exposed with running down the Senior Citizens' Club. No, what Cr [W] found offensive was that I told residents how he walked out of the Mayoral elections in September and didn't vote, claiming to be sick, but returned for dinner with a full appetite. How does he have the hide to deny it when he was witnessed by a full public gallery, Council staff and all the Councillors? AWARD-WINNER How's this for hypocrisy? Last month, Council and Abbotsford Cove received an award from the Housing Industry Association for Quality Urban Practice. Speaking to the item, Cr Marshall launched into a scathing attack on the development, parading himself as Drummoyne's anti-development Councillor. During the 1995 Council elections, he campaigned against the development at the old Nestles' site and polled very well at the Abbotsford School polling booth. But who moved at the first meeting after the elections that the development proceed? No prizes for guessing ... Cr Marshall! What's the old saying about fooling some of the people some of the time?"

These items conveyed the following two imputations: "(a) that Mr Marshall had been exposed running down the Drummoyne Senior Citizens' Club; and (b) that Mr Marshall was a hypocrite in that prior to the 1995 Council election he had criticised a development at Abbotsford Cove which he then voted in favour of, once elected to Council."

Although Mr Megna admitted that the imputations were defamatory, he pleaded that they were published on an occasion of qualified privilege being a response to an attack. He also pleaded the defence of comment in respect of the second of these two imputations.

The trial judge upheld the defences. Mr Marshall has appealed against each of these findings.

The trial judge considered, at [625], that although the evidence was confusing, it was a reasonable inference that the first Veritas publication was conceived as a means of responding to the publication of the Ratepayers' Association circulars, and that this applied to the second. Nonetheless, her Honour recognised that it was still necessary to determine whether the particular content of the second Veritas publication that conveyed the imputations was properly characterised as a response to an attack.

Her Honour concluded, at [627], that given the wide variety of issues that had been subject of the appellants' circulars, and the sustaining and continuing nature of the attack contained in them, that it was proper to construe the second Veritas publication as being a response to attack. This was so notwithstanding that the items in the second Veritas publication were not directly responsive to matters that had been published in the circulars. Rather, her Honour considered that it was a legitimate form of response for Mr Megna to raise issues concerning Mr Marshall's conduct in relation to Council matters.

Mr Marshall, whilst accepting that an occasion existed to repel or reply to the attacks made in the circulars, there was nothing in Veritas in response to the circulars. I do not agree. The attack on Mr Megna was that he was a dishonest Councillor, intent on his own self interest, corrupt and incompetent. The attack on Mr Marshall in Veritas was an attack on Mr Marshall's conduct as a Councillor, namely, that he was a hypocrite and had run down the Senior Citizens' Club.

In my opinion, her Honour correctly held that the second Veritas was published on an occasion of qualified privilege in the sense of being a response to an attack. Given that conclusion there is no necessity to deal with Mr Marshall's further complaint in his written submission, at [39], that there was a disjunction between her Honour's conclusion in relation to Veritas and her conclusion in respect of the circulars.

The trial judge upheld the defence of comment on the basis that she accepted Mr Megna's claim that the comment was his own, that the material contained in the publication was material on which a comment of hypocrisy might be made, and that it had not been suggested that the statements in the matter complained of were not factually correct. It followed, in her Honour's view, that for the purposes of the Defamation Act, s 30(2), that the statements of fact in the publication were "of substantial truth": at [633].

Mr Marshall, in his further amended notice of appeal, contended that the trial judge failed to consider whether the second imputation was conveyed as fact or comment and erred in holding that the comment was based on proper material for comment: see grounds 4 and 5.

The defence of comment is provided for by the Defamation Act, ss 30-32. Sections 30 and 31 provided: "30 Proper Material (1) For the purposes of this section, but subject to subsection (2), proper material for comment means material which, if this Division had not been enacted, would, by reason that it consists of statements of fact, or by reason that it is a protected report within the meaning of section 24, or for some other reason, be material on which comment might be based for the purposes of the defence or exclusion of liability in cases of fair comment on a matter of public interest. (2) A statement of fact which is a matter of substantial truth is proper material for comment for the purposes of this section, whether or not the statement relates to a matter of public interest. (3) The defences under this Division are available as to any comment if, but only if: (a) the comment is based on proper material for comment, or (b) the material on which the comment is based is to some extent proper material for comment and the comment represents an opinion which might reasonably be based on that material to the extent to which it is proper material for comment. (4) There is no special rule governing the nature of the material which may be the basis of comment imputing a dishonourable motive or governing the degree of foundation or justification which comment imputing a dishonourable motive must have in the material on which the comment is based. 31 Public interest The defences under this Division are not available to any comment unless the comment relates to a matter of public interest."

The defence only applies to comment by the defendant: s 32(1). Section 32(2) provided that the defence is: "... defeated if, but only if, it is shown that, at the time when the comment was made, the comment did not represent the opinion of the defendant."

In Hawke v Tamworth Newspaper Co Ltd [1983] 1 NSWLR 699 at 704, Hunt J dealt with the defence of comment as follows: "In every case where comment is relied upon as a defence, there is a preliminary legal issue as to whether the statement in question is capable of being construed as a comment (in that it is an opinion which could possibly be held on the material indicated as its basis), followed by the factual issue as to whether that statement is to be construed in fact as an expression of opinion - which is answered in part by asking whether the ordinary reasonable reader would have understood the statement as having been intended by its author to be an expression of opinion based upon sufficiently indicated material: Bickel's case [1981] 2 NSWLR 474, at 490, 492."

As his Honour also pointed out, relevant to the issue in this case, the material upon which the comment is based must be stated expressly or impliedly in the matter complained of. The point of this requirement is that recipients of the information must be able to form an opinion for themselves whether or not they agree with the opinion based upon that material.

The principles governing the defence of comment were discussed by the High Court in Channel Seven Adelaide Pty Ltd v Manock [2007] HCA 60; 232 CLR 245, where Gummow, Hayne, and Heydon JJ said at [35]: "Distinguishing fact and comment. In Brent Walker Group Plc v Time Out Ltd, Bingham LJ said: 'The law is not primarily concerned to provide redress for those who are the subject of disparaging expressions of opinion, and freedom of opinion is (subject to necessary restrictions) a basic democratic right. It is, however, plain that certain statements which might on their face appear to be expressions of opinion (as where, for example, a person is described as untrustworthy, unprincipled, lascivious or cruel) contain within themselves defamatory suggestions of a factual nature. Thus the law has developed the rule ... that comment may only be defended as fair if it is comment on facts (meaning true facts) stated or sufficiently indicated.' (emphasis added)" (citation omitted)

Their Honours next referred to the remarks of Jordan CJ in Goldsbrough v John Fairfax & Sons Ltd (1934) 34 SR (NSW) 524 at 531-532, that for the defence of fair comment to succeed, "it is essential that the whole of the words in respect of which it is relied on should be comment". As Jordan CJ explained: "It must be indicated with reasonable clearness by the words themselves, taking them in the context and the circumstances in which they were published, that they purport to be comment and not statements of fact; because statements of fact, however fair, are not protected by this defence. In other words, it must appear that they are opinions stated by the writer or speaker about facts, which are at the same time presented to, or are in fact present to, the minds of the readers or listeners, as things distinct from the opinions, so that it can be seen whether the opinions are such that they can fairly be formed upon the facts." (original emphasis)

In emphasising the distinction between comment and fact, their Honours in Channel Seven Adelaide continued, at [35] ff: "35 A 'discussion or comment' is to be distinguished from 'the statement of a fact'. 'It is not the mere form of words used that determines whether it is comment or not; a most explicit allegation of fact may be treated as comment if it would be understood by the readers or hearers, not as an independent imputation, but as an inference from other facts stated.' As the passages quoted from Bingham LJ and Jordan CJ above illustrate, the distinction between fact and comment is commonly expressed as equivalent to that between fact and opinion ... 36 The question of construction or characterisation turns on whether the ordinary reasonable 'recipient of a communication would understand that a statement of fact was being made, or that an opinion was being offered' ... not 'an exceptionally subtle' recipient, or one bringing to the task of 'interpretation a subtlety and perspicacity well beyond that reasonably to be expected of the ordinary reader whom the defendant was obviously aiming at'. ... 45 ... It is often said ... in addition to the rule ... that the fair comment defence does not apply to material unless it is in truth comment rather than fact, there is a rule that material cannot be fair comment unless 'the facts on which it is based are stated or indicated with sufficient clarity to make it clear that it is comment on those facts'. That is, the alleged comment must be sufficiently linked to facts being commented on by reason of those facts being stated in the publication containing the comment, or being referred to in it, or being notorious.'" (citations omitted)

In Lloyd-Jones v Allen [2012] NSWCA 230 Nicholas J, having reviewed the authorities, summarised what needed to be established for the defence of comment to succeed in the following terms, at [43]: "In short, to be protected by the defence of fair comment or honest opinion, the defamatory matter must be recognisable as comment and not as a statement of fact. The first necessary step is the objective exercise to decide whether the reader (or viewer or listener) is able to identify the communication as a comment rather than a statement of fact (Gleeson CJ in Manock par 4)."

The defence of comment was also considered by this Court in Trad v Harbour Radio Pty Ltd [2011] NSWCA 61 (and was not subject of the appeal to the High Court). The Court (Tobias, McColl and Basten JJA) noted, inter alia, the reference, in Gatley on Libel and Slander, 11th ed (2008) Sweet & Maxwell at par 12.6 to the distinction between fact and comment and the authors' reference therein to the statement of Cussen J in Clarke v Norton [1910] VLR 494 at 499 that: "Though 'comment' is often equated with 'opinion' this is an over-simplification. More accurately it has been said that the sense of comment is 'something which is or can reasonably be inferred to be a deduction, inference, conclusion, criticism, remark, observation, etc.'"

It is to be noted that the defence of comment will not be available in relation to a statement capable only of being a statement of fact: Griffith v Australian Broadcasting Commission [2010] NSWCA 257 at [54]; Spiller v Joseph [2010] UKSC 53; [2010] 3 WLR 1791 and Harbour Radio v Trad at [57].

Assuming that Mr Megna, who pleaded fair comment, established that the imputation was comment and was based on proper material for comment, Mr Marshall bore the onus of establishing that the opinion was not honestly held by Mr Megna: Hawke v Tamworth Newspaper Ltd at 716.

As can be seen from her Honour's reasons, very little attention was given to the defence of comment. Her Honour is not to be criticised for that as she undoubtedly considered the defence had been made out and the matter fell for consideration at the end of an extremely arduous task.

Mr Marshall complained that her Honour failed to give consideration to the threshold question whether the imputations were conveyed as comment. In making this complaint, Mr Marshall contended that her Honour's error related to both imputations. However, as I have already indicated, the defence of comment related only to the second of the two imputations. Accordingly, I propose to disregard Mr Marshall's submissions insofar as they relate to the first imputation.

The article from which the second imputation arose appeared under the heading "AWARD WINNER" as set out above, at [343].

The sting in the imputation was that Mr Marshall is a hypocrite. In my opinion that is a comment or expression of opinion. It is an inference drawn from the facts stated, that is, that Mr Marshall took one position in respect of a development at one point of time and the opposite position later. It was not merely an assertion of fact, as Mr Marshall contended.

Mr Marshall also complained that her Honour erred in holding that the imputations were based on proper material for comment. He argued that her Honour's conclusion, that it was "not suggested" otherwise, was not correct. In this regard, Mr Marshall referred to his written submissions at trial which, relevantly, were in the following terms: "Mr Megna made a limited attempt to prove (in a thoroughly hearsay fashion) his source of information in relation to the second imputation ... however that evidence falls far short of establishing the truth of the matters stated about Mr Marshall in relation to the charge of hypocrisy." The submission was reiterated on the appeal.

Mr Megna responded that, not only did he give evidence on this question, that evidence was uncontradicted. Mr Megna's evidence was that he had read Mr Marshall's literature during the 1995 election campaign in which Mr Marshall had campaigned heavily against the Nestles' development. Mr Megna also gave evidence that Mr Marshall had received a fairly high vote at the Abbotsford polling booths as compared to his vote in other booths. Mr Megna also said that he was present at the Council meeting where the question of the development was up for consideration and saw Mr Marshall vote for the development to proceed.

Although Mr Marshall's complaint that the first part of Mr Megna's evidence relating to the literature he read during the election campaign was hearsay, no objection was taken to that evidence at the time the evidence was given. Once given, however, this was evidence in the case admitted for all purposes: the Evidence Act 1995, s 59 and s 60. It was not sufficient for the objection to be taken in final submissions or on the appeal. The balance of the evidence was direct evidence of what Mr Megna saw and heard. Accordingly, the material upon which the comment was based was proper material for comment. It should also be noted that, contrary to his submission in this Court, Mr Marshall did not suggest in his submission to the trial judge that the material upon which the comment was based was not correct. Rather, Mr Marshall's attack was that the material was not sufficient to establish what was stated about him in relation to the charge of hypocrisy.

It follows that I would reject grounds 4 and 5 of Mr Marshall's appeal.

The respondents commenced proceedings in this matter by filing a statement of claim on 7 April 2004. The relevant limitation period for a defamation claim is six years: the Limitation Act, s 14. Accordingly, the limitation period in this matter commenced on 8 April 2004.

The trial judge held that the first circular subject of the proceedings was statute barred in that the inference, from the evidence was that it was published, at the very least before the end of March 1998.

The evidence revealed that the circulars were distributed just after the middle of the month named in them. The first circular was dated March 1998 and was distributed by about the third week in March. The appellants' argument was that distribution and publication do not occur at the same time, and that a publication only occurs when the matter is read and comprehended by someone: Dow Jones and Company Inc v Gutnick [2002] HCA 56; 210 CLR 575.

The immediate and irremediable difficulty that the respondents' argument faced was that there was no evidence from which an inference could be drawn that persons read the circular on or after 8 April 1998. Accordingly, no error has been demonstrated in her Honour's conclusion that the action, insofar as it was based on the first circular, was statute barred.

At trial, Mr Megna succeeded in his claims in respect of 10 circulars and a total of 26 imputations. Mr Lloyd succeeded in respect of the publication of five circulars and a total of seven imputations.

The Defamation Act provides for the award of damages as follows: "46 General (1) In this Part relevant harm means, in relation to damages for defamation: (a) harm suffered by the person defamed, or (b) where the person defamed dies before damages are assessed, harm suffered by the person defamed by way of injury to property or financial loss. (2) Damages for defamation shall be the damages recoverable in accordance with the common law, but limited to damages for relevant harm. (3) In particular, damages for defamation: (a) shall not include exemplary damages, and (b) shall not be affected by the malice or other state of mind of the publisher at the time of the publication complained of or at any other time, except so far as that malice or other state of mind affects the relevant harm." 46A Factors relevant in damages assessment (1) In determining the amount of damages to be awarded in any proceedings for defamation, the court is to ensure that there is an appropriate and rational relationship between the relevant harm and the amount of damages awarded ..."

The trial judge approached the assessment of damages by considering each circular separately and making an award of damages in respect of each, regardless of the number of imputations conveyed by the particular matter complained of. Her Honour considered, at [651], it was necessary so as to properly assess the extent and nature of the imputations, the evidence of injury to the reputations of each of the respondents and the hurt and distress each had experienced. In the result, the total damages, in total, awarded to Mr Megna was the sum of $395,000, and to Mr Lloyd, the sum of $220,000.

The appellants contended that in adopting that approach her Honour failed to have regard to the mandatory consideration specified by the Defamation Act, s 46A, namely, that there be an appropriate and rational relationship between the relevant harm and the amount of damages. They contended that the total damages awarded was excessive in that they were "outside the range of what could reasonably be regarded as appropriate to the circumstances of the case": Carson v John Fairfax & Sons Ltd [1993] HCA 31; 178 CLR 44 at 61-62; Rogers v Nationwide News Pty Ltd [2003] HCA 52; 216 CLR 327 at [62] per Mason CJ, Deane, Dawson and Gaudron JJ.

The respondents submitted that the appellants had failed to demonstrate any basis for appellate intervention. In particular, the respondents pointed out that they had been the subject of successive publications essentially repeating the same sting, that is, lying and incompetence: see Carson, at 54-55, where the plurality noted the cumulative effect of successive publications, that is, the later publications compound harm of the earlier publications.

A trial judge is entitled to determine the approach to the assessment of damages so as to adequately vindicate the plaintiff's reputation and compensate for the hurt and distress caused by the defamation. Thus, it was entirely appropriate for her Honour to assess damages by having regard to each circular: see Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335; 278 ALR 232 where McColl JA, at [274], stated: "... It was ... a matter for [the trial judge] whether he awarded damages separately or en bloc for the imputations arising from the three matters complained of. As [the trial judge] said ... 'whether one or more causes of action are to be included in one verdict or judgment will depend upon the exercise of the trial Judge's judicial discretion'." (citations omitted) McColl JA continued: "... [I]t is also important to recall that in arriving at each verdict, his Honour was 'mindful of the fact that there was likely to be a substantial overlap in the viewing audience' ... Once it is accepted that his Honour took the issue of overlap into account, it cannot be said that his Honour erred in a sense attracting appellate intervention,' in awarding separate damages for the imputations conveyed ..."

As I understand the appellants' submissions, they do not assert that her Honour was in error in approaching each of the matters complained of separately and determining the award of damages in respect of each matter. Rather, as I understand it, the complaint is directed to the end result.

An award of damages for defamation involves an evaluative assessment of the harm caused. This has been said to involve an exercise of discretion: Rogers, at [62] per Hayne J. Whether an award of damages is called evaluative or discretionary, the principle governing appellate intervention was stated by the plurality in Carson, at 61-62, in the following terms: "If an appellate court is convinced, not that in its own view the amount is too high or too low but that the amount awarded is so high or so low that it is outside the range of what could reasonably be regarded as appropriate to the circumstances of the case, the proper performance of its functions will require it to intervene to prevent a miscarriage of justice." (citation omitted)

The damages awarded by her Honour were high. However, as I have concluded that the cross-appeal should succeed, the respondents are entitled to damages in respect of all imputations save for those arising from the first matter complained of, as those imputations are statute barred. Accordingly, damages have to be reassessed in any event. For that reason, I do not consider it necessary to give separate reasons in respect of the award of damages in their entirety or any individual award, thereof. However, it is apparent from the damages that have concluded are appropriate compensation for the harm to reputation and the hurt caused by the defamatory matters, that I consider her Honour's total awards of damages were outside an appropriate discretionary range.

Both parties indicated a preference for this Court to reassess damages should they be unsuccessful and, given the lengthy litigious history between the parties, that is the preferable course. The remarks that follow are to be read as applying to damages for all the imputations, save for those that are statute barred.

In reassessing damages, I do not propose to adopt the process engaged in by her Honour. Rather, I consider that the preferable course is to assess the total award of damages in each case as a single sum. However, in doing so I have had close regard to her Honour's reasons given in respect of the individual award of damages, as well as to her account of the evidence adduced in respect of damages. In this regard, the parties did not suggest that her Honour's summary was inadequate or in any way erroneous. Nor did they draw the attention of the Court to any part of the evidence to which they considered this Court ought especially to have regard.

The defamatory publications were continuous over an extended period of time. Prior to the publication of the defamatory matters, there was evidence that each respondent had enjoyed a high reputation in their respective professional positions. There was also evidence of the impact the matters complained of had upon those reputations and of the significant hurt the publications have caused each respondent. Whilst much of the defamatory material was of a serious nature, a small sample will suffice to demonstrate both the vitriol and the repetitive and compounding effect of the attacks on the respondents.

In the fifth matter complained of, being the September 1998 circular, the following appeared under the heading: "YELLOW, THE COLOUR OF WHIMPS": "Wanted at the next Council Elections: 'Councillors with Guts.' ... Don't let us forget the lies, mistakes and devious dealings by Lloyd toward the ratepayers ... There is no need to list Lloyd's lies and blunders. Our circulars are full of them. Why have Councillors allowed Lloyd to blatantly facilitate State Government Policy in many areas of Drummoyne Council arrangements, to change the face of this Municipality in form and life style, to bludge on incompetence and a complete vacuum of leadership and community initiatives? Why have they backed a sneak? In particular, with a voting majority now at hand, what 'watchdog' role have the Liberal faction adopted in Lloyd's stealthy implementation of Labor systems and procedures? You've got it - none!" (original emphasis)

The seriousness of this defamatory publication is so obvious it speaks for itself. No wonder, as Mr Lloyd said in his evidence, he came to dread the third Thursday of each month, when the circulars could be expected to be distributed: at [671].

In the eleventh matter complained of, being the June 1999 circular, the following statement was made in large bold type: "MEGNA ... AND LLOYD CAN CONTINUE THEIR RANGE OF LOCAL ABUSES UNTIL THERE IS AN ELECTION". This was a seriously defamatory statement about the publicly elected Councillor and an employed public servant.

The last circular was issued in August/September 2003. The defamatory imputations were derived from the following passage: "In an article in the Glebe and Inner West Weekly Newspaper dated 11th June, 2003, the local Community and the authors of the 'Community View' Newsletter have been issued an invitation by Michael Megna 'to put up or shut up over allegations made by the newsletter issue dated May 2003. We apologise to our readers for the delay in a response, but, as one can see, the attached summary of deception, self-interest, political corruption, manipulation, lie after lie, payback, cheating and straight out public dishonesty is immense, and these are only some of the major matters held. This Newsletter has no agenda, political or otherwise."

This matter could not have landed a heavier blow upon a person in public office, who had played a significant and respected role in the community. Nothing was left unsaid. As a public figure, Mr Megna was called corrupt, a cheat, dishonest, self-interested in a way that was "immense" and, according to the article, that was only part of the story.

In my opinion, having regard to the defamatory material and the almost incessant attack upon the respondents an award sufficient to vindicate each respondent's reputation and to compensate for their hurt and distress would be $300,000 to Mr Megna and $200,000 to Mr Lloyd.

The trial judge delivered a separate judgment in respect of costs: Megna v Marshall (No 2) [2011] NSWSC 52. The appellants had argued that some order other than that costs follow the event: see Uniform Civil Procedure Rules 2005 (UCPR), r 42.1, should be made in circumstances where the respondents had been successful in respect of a portion only of the pleaded imputations. The orders proposed recognised an entitlement in the respondents to an order for indemnity costs from 25 January 2006 being the date that each respondent had made an offer of compromise. However, the appellants contended that they should pay 50 per cent of Mr Megna's costs, and that he should pay 50 per cent of their costs, representing an approximation of the degree of success of each in prosecuting and/or defending the claim. In Mr Lloyd's case, the suggestion was that the appellants pay 20 per cent of his costs and he pay 80 per cent of their costs.

Her Honour refused that application and held that the respondents were entitled to the whole of their costs of and including the s 7A trial. Her Honour also ordered that the respondents were to have 90 per cent of their costs of the proceedings following the s 7A trial, those costs to be paid on an indemnity basis as and from 26 January 2006.

Having regard to my conclusion on the appeal and on the cross-appeal, this ground of appeal has become redundant and, in my opinion, costs should follow the event. The appellants are entitled to their costs of the trial at first instance, including the s 7A trial. The Court is unable to determine whether those costs should be paid on an indemnity basis from 26 January 2006, as there is nothing before the Court as to the amount of any offer made by the appellants. If the appellants seek such an order, they should make an application pursuant to UCPR, r 36.16.

An adjustment will also have to be made to the amount of interest payable on the judgment sum. The parties will be directed to attend to this calculation. Accordingly, the orders I propose are: 1. Appeal dismissed in part; 2. Cross-appeal allowed; 3. Set aside the orders of the trial judge made on 25 June 2010; 4. Set aside the orders of the trial judge made 18 February 2011; 5. Judgment for the plaintiff/cross-appellant (Mr Megna) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $300,000 together with interest to be calculated; 6. Judgment for the plaintiff/cross-appellant (Mr Lloyd) against the defendants/cross-respondents (Mr Marshall and Mr Tory) in the sum of $200,000 together with interest to be calculated; 7. Order that the appellants/cross-respondents/defendants (Mr Marshall and Mr Tory) pay the following costs of the respondents/cross-appellants/plaintiffs: (a) Of the proceedings in the court below including the costs of the s 7A jury trial; (b) Of the appeal and the cross-appeal; 8. The parties are to recalculate the interest payable on the judgment sums on the same basis specified in the reasons of the trial judge of 18 February 2011: Megna v Marshall (No 2) [2011] NSWSC 52, at the rate of 2 per cent from 1 January 2001 up to and including the date of her Honour's judgment of 25 June 2010.

HOEBEN JA: I agree with Beazley JA and the additional observations of Allsop P. 27 February 2013 - Incorrect party name amended Amended paragraphs: 35