Walking the Tightrope: When to Consider Capacity Applications in Litigation

Introduction

The decision in M -v- P [No 3] [2024] WASC 123 provides guidance on the approach courts take when considering applications regarding a litigant's capacity.

Justice Lundberg's judgment illuminates the delicate balance courts must strike between protecting potentially vulnerable litigants and respecting individual autonomy. This decision carries particular significance for practitioners faced with opposing self-represented litigants whose capacity may be questionable, offering a roadmap for appropriate procedural steps while highlighting the evidentiary threshold required for such applications.

The case reinforces the Court's protective jurisdiction while demonstrating judicial reluctance to make declarations of incapacity without proper evidence. It establishes an intermediate pathway through referral to the Public Advocate that practitioners should note when contemplating similar applications.

Background of Relevant Case Law

The principles applicable to applications under Order 70 of the Rules of the Supreme Court 1971 (WA) ('RSC') have been developed through several key decisions.

In A v City of Swan [No 5] [2010] WASC 204, Murphy JA provided a detailed analysis of the Court's parens patriae jurisdiction and the principles governing determinations of capacity. His Honour emphasised that capacity is not a fixed standard but fluctuates according to the legal character, complexity, and significance of the matter in question.

More recently in Snook v Magistrate Trevor Darge [No 2] [2024] WASC 91, Seaward J summarised the applicable principles, noting that proof of complete incapacity is not required, and that a person can lack mental capacity to participate in legal proceedings whilst still being capable of performing the usual activities of daily life.

The Court in Farrell v Allregal Enterprises Pty Ltd [2008] WASCA 264 established a procedural framework for seeking assistance from the Public Advocate in determining questions of capacity, which Justice Lundberg adopted in the present case.

Facts of the Case

M -v- P [No 3] concerned a defamation action brought by an unrepresented plaintiff against the defendant, both of whom were medical practitioners (at [1]). The action, which had been on foot for over a year, involved allegations of defamation through "several oral and written communications allegedly published by the defendant" with "around 18 publications identified in the pleadings" (at [1]).

The plaintiff was engaged in multiple disputes across various courts and tribunals, all whilst self-represented (at [1]-[2]).

The defendant applied for an order that the plaintiff be declared a person under a disability by reason of mental illness, defect or infirmity, within the meaning of paragraph (c) of the definition of 'person under disability' in Order 70 rule 1 of the RSC (at [3]).

Order 70 RSC relates to the Court's parens patriae jurisdiction, which derives from "the inherent obligation of the Crown to care for those who are unable to care for themselves" and is expressly conferred by s 16(1)(d) and s 23 of the Supreme Court Act 1935 (WA) (at [5]).

Significantly, the defendant did not present any medical evidence in support of the application (at [14]) but rather invited the Court to draw inferences about the plaintiff's capacity from the plaintiff's conduct, communications, and court documents.

The defendant presented an alternative pathway in the event the Court was not prepared to make an immediate declaration, proposing orders that would request the Public Advocate investigate and report on whether the plaintiff had the ability to make reasonable judgments about the conduct of the proceedings (at [7]-[8]).

The plaintiff strongly opposed the application, filing multiple submissions totalling 87 pages and a 156-page affidavit (at [15]).

Analysis of the Court's Reasoning

Justice Lundberg commenced his analysis by acknowledging the serious nature of the application and the Court's duty to consider whether a person has the requisite capacity when put on notice (at [19]). His Honour emphasised the risk that any final determination of the action could later be challenged as irregular if the plaintiff were subsequently found to be under a disability (at [20]).

The Court accepted the following principles from Snook v Magistrate Trevor Darge [No 2] (at [21]):

1. There is no fixed standard of mental capacity required at law

2. The standard fluctuates according to the legal character, complexity and significance of the matter

3. Proof of complete incapacity is not required

4. A person can lack capacity for legal proceedings while still managing daily activities

5. The Court must consider whether the person can understand the case, make decisions, and give instructions

6. Self-represented litigants are held to a higher standard of capacity than those with legal representation

Justice Lundberg stressed the serious consequence of a declaration under Order 70 RSC - namely, that it would "preclude the individual exercising their right to prosecute, compromise or participate in the specific litigation in their own name" (at [22]).

Rather than determining the application on the material before the Court, His Honour opted for the alternative pathway of seeking assistance from the Public Advocate (at [24]), but only after satisfying himself that the application had a "reasonable basis of succeeding" (at [24]).

The Court found that the defendant had raised the issue in a "legitimate manner" and that there was material capable of supporting the declaration sought (at [25]). This conclusion was reached after considering:

1. The material in the plaintiff's submissions and affidavit

2. The Court's own observations of the plaintiff in several appearances since early 2023

3. The "volume of the material adduced by the plaintiff and the nature of the serious allegations he raises"

4. The manner in which the plaintiff articulated allegations, which "goes well beyond the ordinary language of a passionate or zealous litigant in person" (at [26])

Of particular note, Justice Lundberg observed that the plaintiff's affidavit material contained "lengthy personal accounts of the plaintiff's life, his family and background, personal photographs one would not expect to be adduced in evidence in this action, and personal and intimate WhatsApp and text messages, as well as records of voicemail messages" - all deemed irrelevant to both the application and the proceeding (at [27]).

The Court also highlighted the plaintiff's "intense focus on those who stand against him" and "the belief that there is a network of people coordinating actions against him" (at [28]).

Justice Lundberg considered the complexity of defamation actions and the significant decisions a plaintiff would ordinarily need to make regarding pleadings, evidence, and responses to defences (at [29]).

Ultimately, the Court decided to request assistance from the Public Advocate under s 97(1)(c) of the Guardianship and Administration Act 1990 (WA) (at [30]-[31]), with specific orders structured to facilitate this assistance while preserving procedural fairness (at [37]).

Quantification and Assessment Aspects

Justice Lundberg's judgment provides valuable guidance on how courts assess a litigant's capacity in the absence of direct medical evidence. The Court identified several quantifiable factors that may indicate capacity concerns:

1. The volume of material produced by a litigant (the plaintiff filed 87 pages of submissions and a 156-page affidavit)

2. The relevance of material to the proceedings (substantial irrelevant personal content was noted)

3. The nature and manner of allegations made (references to "criminal networks" and conspiracies)

4. The complexity of the underlying proceedings (defamation involving multiple publications)

5. The litigant's conduct in court proceedings over time

The Court acknowledged that drawing inferences about capacity from these factors is "legitimate" (at [14]) but also that "the absence of direct medical evidence renders an applicant's task of discharging its burden of proof more onerous" (at [14]).

The judgment establishes that the threshold for referring the matter to the Public Advocate is that "the application has a reasonable basis of succeeding" (at [24]), which is evidently lower than the threshold for making the declaration itself.

Worked Example: Practical Application

Consider a solicitor representing a defendant in a complex commercial dispute where the unrepresented plaintiff exhibits concerning behaviours:

Scenario: The plaintiff has filed multiple, excessively lengthy submissions containing irrelevant personal information, makes allegations of widespread conspiracy against various institutions, demonstrates an inability to focus on relevant legal issues despite judicial guidance, and produces volumes of irrelevant evidence.

Step 1: Document all instances of concerning conduct or communications

• Compile court transcripts showing the plaintiff's inability to follow judicial directions

• Collate all written communications demonstrating disorganised thinking or paranoid ideation

• Catalogue filed documents showing irrelevant content or inability to address legal issues

Step 2: Assess whether the conduct crosses the threshold from merely vexatious to suggesting incapacity

• Compare to established case law (e.g., M -v- P [No 3], A v City of Swan [No 5])

• Consider the complexity of the particular proceedings and demands on the litigant

• Evaluate whether the conduct suggests an inability to understand the proceedings or make reasonable judgments

Step 3: Consider the ethical implications and proportionality

• Is the application genuinely in the interests of justice, or merely tactical?

• Are there less intrusive alternatives available?

• What impact would the application have on the proceedings and the plaintiff?

Step 4: Frame the application with appropriate sensitivity

• Propose the "alternative pathway" approach rather than seeking an immediate declaration

• Structure orders similar to those in M -v- P [No 3] requesting Public Advocate assistance

• Ensure all evidence presented is objective and factual, avoiding speculation

Step-by-Step Guidance for Practitioners

When faced with a potentially incapacitated opposing party, practitioners should:

1. Maintain detailed records of all interactions with the opposing party, particularly noting:

   • Inability to understand or engage with legal concepts

   • Persistent irrelevant submissions or evidence

   • Paranoid or delusional thinking in correspondence or submissions

   • Inability to follow court directions or understand procedural requirements

2. Consult the relevant procedural rules governing capacity in your jurisdiction (e.g., Order 70 RSC in Western Australia)

3. Consider whether the threshold for intervention is met:

   • Is there a genuine basis for concern beyond mere frustration with a difficult litigant?

   • Does the conduct go "well beyond the ordinary language of a passionate or zealous litigant in person"?

   • Is the nature of the proceedings sufficiently complex to require a higher standard of capacity?

4. Explore alternative pathways:

   • Consider whether a less intrusive approach might assist the opposing party

   • Identify relevant support services or authorities (e.g., Public Advocate) that might provide assistance

5. Frame the application appropriately:

   • Seek preliminary assistance from appropriate authorities before requesting declarations

   • Structure proposed orders to allow for investigation before determination

   • Request the court's guidance on procedure

6. Prepare for procedural delays:

   • Advise clients that such applications may extend timeframes

   • Consider whether interim arrangements are necessary

7. Maintain proportionality:

   • Ensure the scope of any application is confined to the specific proceedings

   • Avoid unnecessarily broad declarations that might impact the opposing party's autonomy in other matters

Evidence and Arguments for Each Side

For the Applicant (Party Questioning Capacity)

Evidence:

• Court documents containing irrelevant, excessive, or disorganised content

• Transcripts demonstrating inability to follow judicial guidance or respond to questions

• Correspondence showing paranoid ideation or delusional thinking

• Witness evidence of behaviour in court or mediation settings

• Expert evidence (if available) regarding the cognitive demands of the specific proceedings

Arguments:

• The Court has a duty to ensure parties can meaningfully participate in proceedings

• Allowing proceedings to continue risks injustice to both parties

• The complexity of the proceedings requires a certain level of capacity

• The Court's parens patriae jurisdiction is protective, not punitive

• The alternative pathway approach provides appropriate procedural safeguards

For the Respondent (Party Whose Capacity is Questioned)

Evidence:

• Evidence of capacity to manage other aspects of life

• Examples of logical and coherent submissions or correspondence

• Evidence of previous successful litigation management

• Character evidence from professional colleagues or associates

• Expert evidence (if available) supporting capacity

Arguments:

• The presumption of capacity must be respected

• Passionate or unusual advocacy is not equivalent to incapacity

• The application represents an attempt to impede access to justice

• Less restrictive alternatives have not been explored

• The absence of medical evidence is fatal to the application

• The serious consequences for civil rights require a high evidentiary threshold

Key Takeaways for Legal Practice

1. Evidence threshold: While medical evidence is not strictly required for capacity applications, its absence significantly increases the burden of proof on the applicant.

2. Alternative pathways: Courts may prefer a staged approach involving investigative assistance from authorities such as the Public Advocate before making declarations.

3. Contextual assessment: Capacity requirements fluctuate according to the nature and complexity of the proceedings - defamation actions, with their complexity, demand a higher standard.

4. Preserving autonomy: Courts remain conscious of the serious impact of declarations on individual autonomy and will only intervene where genuinely necessary.

5. Tactical considerations: Practitioners must ensure capacity applications are genuinely motivated by legitimate concerns rather than tactical advantage.

6. Self-representation factor: Courts recognise that self-represented litigants require a higher standard of capacity than those with legal representation.

7. Documentation importance: Systematic documentation of concerning conduct or communications is essential for establishing sufficient grounds for investigation.

Conclusion

M -v- P [No 3] offers a nuanced approach to the challenging intersection of mental capacity and litigation rights. The judgment reinforces the Court's protective role while establishing procedural safeguards that respect individual autonomy. By adopting the "alternative pathway" of seeking Public Advocate assistance, Justice Lundberg has demonstrated a balanced approach that other courts may follow.

For practitioners, the case underscores the need for careful consideration before initiating capacity applications, the importance of thorough documentation, and the value of structured, proportionate approaches that prioritise investigation before declaration.

The decision ultimately serves as a reminder that while the legal system must protect vulnerable individuals, it must do so with appropriate restraint and procedural fairness, recognising that declarations of incapacity represent a significant limitation on fundamental rights of access to justice.

The Significance of Apologies in Defamation Proceedings: Analysis of Wright v de Kauwe

1. Introduction

The Western Australian Court of Appeal's decision in Wright v de Kauwe [2024] WASCA 51 provides guidance on the significance of apologies in defamation proceedings, particularly in the context of settlement offers.

The case illuminates how courts assess the adequacy of apologies when determining whether a plaintiff's rejection of a settlement offer was reasonable for costs purposes.

The Court's analysis offers insights into the relative importance of monetary and non-monetary elements in defamation settlements, emphasising that vindication of reputation through an appropriate apology can be as significant as financial compensation.

This decision is noteworthy for its detailed consideration of how courts should approach the adequacy of proffered apologies when exercising costs discretion following a plaintiff's rejection of Calderbank offers. It provides authoritative guidance on a previously underdeveloped area of law concerning the intersection of apologies, settlement offers, and costs consequences in defamation proceedings.

2. Background of Relevant Preceding Case Law

The Role of Apologies in Defamation Law

Apologies have long held a special place in defamation law, serving multiple purposes:

1. Statutory recognition: Section 38(1)(a) of the Defamation Act 2005 (WA) specifically recognises that an apology is evidence in mitigation of damages. Section 20 protects apologies from being admissible in determining fault or liability.

2. Vindication of reputation: As noted in Cassell & Co Ltd v Broome [1972] AC 1027, an apology can serve to vindicate a plaintiff's reputation where monetary compensation alone may be insufficient.

3. Settlement context: In Ford Motor Co of Australia Ltd v Lo Presti [2009] WASCA 115, the Court established principles for assessing Calderbank offers, including "the extent of the compromise offered" as a relevant factor.

4. Costs consequences: In Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96, the Court emphasised that in determining whether rejection of an offer was unreasonable, "all relevant facts and circumstances must be considered" including the extent of compromise offered.

Prior to Wright v de Kauwe, there was limited guidance on how courts should weigh the adequacy of apologies when assessing whether rejection of a settlement offer was reasonable for costs purposes.

3. Detailed Facts of the Case

The Defamatory Publications

Dr Brendan de Kauwe brought a defamation action against Mr Matthew Wright, five director defendants (Mr Cohen, Mr Saad, Ms Shenhar, Mr Gilboa, and Mr Karasik) and Mr Pamensky. Dr de Kauwe and the director defendants were directors of eSense Lab Ltd, and Mr Pamensky was its company secretary [96].

The trial judge found that Dr de Kauwe had been defamed by imputations in four publications:

1. A letter from three director defendants to Dr de Kauwe on 5 February 2018 [97(1)]

2. A letter from Mr Cohen to Dr de Kauwe on 15 February 2018 [97(2)]

3. An announcement by eSense to the ASX on 13 March 2018 (First ASX Announcement) [97(3)]

4. An announcement by eSense to the ASX on 21 March 2018 (Second ASX Announcement) [97(4)]

The defamatory imputations included that Dr de Kauwe was not fit to be a director, was a blackmailer and extortionist, and had engaged in conduct warranting investigation [136-137].

Settlement Offers and Proposed Apologies

The defendants made several Calderbank offers:

1. 17 August 2020: $500,000 plus costs and an apology [289-290]

2. 14 October 2020: $650,000 plus costs and an apology [289-290]

3. 26 January 2021: $750,000 plus costs and an apology [289-290]

4. 27 January 2021: $850,000 plus costs and an apology [289-290]

5. 28 January 2021: $850,000 plus costs and an apology [289-290]

The proposed apology in each offer was identical and stated:

"We the undersigned (Haim Cohen, Ilan Saad, Galit Shenhar, Eran Gilboa, Benjamin Karasik and Ian Pamensky) each accept that we variously published or caused to be published 2 ASX announcements released to the market and to other parties by eSense-Lab Ltd in 2018. In the ASX announcements various allegations were made concerning Dr de Kauwe, which we accept were defamatory of him.

We sincerely and unreservedly apologise for the damage, hurt, distress and embarrassment that we have caused to Dr de Kauwe and we fully and unreservedly retract the defamatory allegations we made.

We hereby undertake to refrain from making any further such statements regarding Dr de Kauwe in the future." [290]

Notably, Mr Wright was not a signatory to the proposed apology.

4. Analysis of the Court's Reasoning

The Trial Judge's Approach to Apologies in Settlement Offers

The trial judge found that Dr de Kauwe's rejection of the Calderbank offers was not unreasonable, in part because the proposed apology was inadequate. The trial judge identified several limitations in the apology:

1. It referred only to the ASX Announcements and not to the defamatory letters [304]

2. The defendants made no offer to publish it to a wider audience [305]

3. It did not identify the specific allegations being retracted [306]

4. The settlement was "without any admission of liability" which detracted from the apology's value [307]

The trial judge stated that "in settlement of defamation claims the offer and terms of an apology is of paramount importance" [319] and concluded that "the inadequacy of the apology... is of itself a sufficient reason to make Dr de Kauwe's failure to accept the offer not unreasonable" [320].

The Court of Appeal's Analysis

Mitchell JA (with whom Buss P and Lundberg J agreed) concluded that the trial judge did not make an error of principle in his approach to the significance of the apology. The Court held:

1. Weight versus error of principle: The director defendants' complaint that the trial judge placed "excessive weight" on the terms of the apology did not disclose a proper basis for appellate intervention [324].

2. Significance of apologies in defamation: It is open to a trial court to give significant weight to the adequacy or inadequacy of an apology proffered as part of a settlement offer when assessing whether rejection was unreasonable [325].

3. Statutory context: The Court noted the significance of apologies in the Defamation Act, including their role as evidence in mitigation of damages under s 38(1)(a) and in offers to make amends under s 18 [325].

4. Holistic approach: Mitchell JA emphasised that the trial judge had considered all the circumstances, with the apology being only one factor (albeit an important one) [326].

5. Vindication versus compensation: The Court recognised that "the publication of a judgment of the court provides for its own vindication of a plaintiff's reputation. Where a private settlement is offered, there will ordinarily be no public vindication of the plaintiff's reputation except to the extent that a public apology is offered by the defendant" [328].

The Court rejected the argument that the trial judge had erred in principle by elevating the significance of the apology, finding that the judge had properly considered all relevant circumstances.

5. Quantification and Assessment Aspects

Balancing Monetary and Non-Monetary Elements

The Court's approach demonstrates the need to balance monetary and non-monetary elements when assessing the adequacy of settlement offers in defamation cases:

1. Comparing monetary value: The trial judge compared the settlement sum offered ($650,000-$850,000) with the judgment eventually obtained ($530,880 plus interest of $72,262.82, totalling $603,142.82) [297-302].

2. Costs considerations: The difference between costs taxed on a special costs order basis versus party/party costs was taken into account when comparing the offers to the judgment [300-301].

3. Vindication value: The Court recognised that an apology offers vindication that monetary compensation alone cannot provide, particularly where a private settlement precludes the vindication provided by a judgment [328].

4. Timing factors: The timing of offers and time allowed for consideration were relevant factors, with the Court noting that some offers were open for unreasonably short periods close to trial [312-315].

The Court's analysis reinforces that quantifying the adequacy of settlement offers in defamation cases requires consideration of both the monetary value and the qualitative aspects of proposed apologies.

6. Worked Example of Practical Application

Perspective A: Plaintiff's Counsel

Scenario: Your client has been defamed by publications alleging professional misconduct. The defendant has offered $200,000, costs on a party/party basis, and an apology.

Application of Wright v de Kauwe principles:

1. Assess apology adequacy:

   • Does it address all defamatory publications or only some?

   • Does it clearly identify and retract the defamatory imputations?

   • Is it offered without qualification or undermined by denial of liability?

   • Will it be published to reach the same audience as the defamation?

2. Monetary assessment:

   • Compare offer amount to likely damages plus interest

   • Consider difference between party/party costs and potential special costs order

   • Calculate overall difference between offer and potential judgment value

3. Timing considerations:

   • Is sufficient time allowed for proper consideration of the offer?

   • Is the offer made close to trial when preparation costs are high?

4. Advise client: "While the monetary offer of $200,000 appears reasonable, the apology is inadequate because it doesn't clearly identify the imputations being retracted and wouldn't reach the same audience as the original publication. Based on Wright v de Kauwe, rejection would likely not be considered unreasonable for costs purposes."

Perspective B: Defendant's Counsel

Scenario: Your client has published material that may be defamatory. You are preparing a Calderbank offer.

Application of Wright v de Kauwe principles:

1. Design comprehensive apology:

   • Address all potentially defamatory publications

   • Specifically identify the imputations being retracted

   • Provide for publication to reach similar audience as the defamation

   • Consider whether unqualified acceptance of defamatory nature is possible

2. Structure monetary component:

   • Ensure offer covers likely damages plus reasonable interest

   • Consider offering costs on a more generous basis than party/party

   • Calculate potential value difference if special costs order were made

3. Timing strategy:

   • Allow reasonable time for consideration (at least 14-21 days)

   • Make offer well before trial preparation intensifies

4. Advise client: "To maximize costs protection, your apology should address both publications, specifically acknowledge the false imputations, and be published on your website. The monetary offer should exceed your counsel's assessment of likely damages by at least 20% to account for interest and costs differentials. We should allow at least 21 days for consideration to avoid the timing issues identified in Wright v de Kauwe."

7. Step-by-Step Guidance for Practitioners

Advising Plaintiffs on Settlement Offers

1. Assess the apology's adequacy:

   • Does it address all defamatory publications?

   • Does it specifically identify and retract the defamatory imputations?

   • Is the publication method appropriate to reach the original audience?

   • Is the apology undermined by qualifications or denials?

2. Evaluate monetary compensation:

   • Compare offer to realistic assessment of general and special damages

   • Add pre-judgment interest likely to accrue

   • Consider difference between party/party costs and indemnity costs

   • Assess total package value against likely judgment value

3. Consider timing factors:

   • Is sufficient time provided to consider the offer?

   • At what stage of proceedings is the offer made?

   • What costs have already been incurred?

4. Document reasons for rejection:

   • Record specific deficiencies in the apology

   • Note any valuation issues in monetary component

   • Consider counter-offering with adequate apology terms

Advising Defendants on Formulating Offers

1. Craft a comprehensive apology:

   • Address all defamatory publications specifically

   • Clearly identify the imputations being retracted

   • Propose appropriate publication method(s)

   • Avoid qualifying language that undermines sincerity

2. Structure monetary component strategically:

   • Offer should exceed realistic damages assessment

   • Include allowance for pre-judgment interest

   • Consider offering costs on more favorable basis than party/party

   • Ensure total package exceeds likely judgment value

3. Time the offer appropriately:

   • Allow reasonable time for consideration (minimum 14-21 days)

   • Make offer sufficiently early in proceedings

   • Avoid timing close to hearing dates or when plaintiff is preparing for trial

4. Clear communication:

   • Specify all terms clearly without ambiguity

   • Explicitly state costs consequences if rejected

   • Ensure settlement deed terms (if applicable) are provided with offer

8. Specific Evidence and Arguments

For Plaintiffs

1. Inadequacy of apology:

   • Evidence of all defamatory publications not addressed in the apology

   • Analysis of audience reached by original publication versus proposed apology

   • Expert evidence on reputational harm requiring specific vindication

   • Evidence of continuing harm due to inadequate vindication

2. Monetary considerations:

   • Evidence of special damages incurred

   • Comparable awards in similar defamation cases

   • Documentation of actual legal costs exceeding party/party costs

   • Evidence of aggravating factors justifying higher damages

3. Procedural arguments:

   • Evidence of unreasonable time pressure to consider offer

   • Documentation of proximity to trial and preparation costs already incurred

   • Evidence of ambiguity or uncertainty in offer terms

For Defendants

1. Adequacy of apology:

   • Evidence that apology would reach similar audience to original publication

   • Precedents showing similar apologies accepted as adequate

   • Evidence that apology addresses core reputational concerns

   • Documentation of attempts to refine apology terms

2. Monetary considerations:

   • Comparative analysis showing offer exceeded likely judgment

   • Expert evidence on appropriate quantum

   • Calculations showing offer's value considering interest and costs

   • Evidence of mitigating factors justifying lower damages

3. Procedural arguments:

   • Evidence that timeframe for considering offer was reasonable

   • Documentation of early timing in proceedings

   • Evidence of clarity and certainty in offer terms

9. Key Takeaways for Legal Practice

1. Apology design is critical: Courts recognize that apologies serve a distinct purpose in defamation that monetary compensation cannot provide. Apologies should address all defamatory publications, specifically identify the imputations being retracted, and propose appropriate publication methods.

2. Holistic assessment: When assessing settlement offers, courts take a holistic approach considering the monetary component, adequacy of apology, timing, and procedural aspects. No single factor is determinative.

3. Vindication value: Courts acknowledge that vindication of reputation through an appropriate apology is a core purpose of defamation proceedings, and private settlements lacking adequate vindication may reasonably be rejected despite generous monetary offers.

4. Cost protection strategy: To maximize costs protection, defendants should ensure apologies are comprehensive, specific, and published appropriately, while monetary offers should clearly exceed likely judgment values accounting for interest and costs differentials.

5. Timing matters: Offers should allow reasonable time for consideration and be made sufficiently early in proceedings to avoid being compromised by proximity to trial.

6. Documentation importance: Both parties should document their reasoning regarding offer adequacy or inadequacy to support later costs applications.

10. Conclusion on Broader Significance

Wright v de Kauwe represents an important development in defamation jurisprudence by providing guidance on the significance of apologies in settlement offers. The decision reinforces that defamation law serves purposes beyond mere compensation, with vindication of reputation being a central objective that apologies specifically address.

The Court's approach acknowledges the unique nature of reputational harm and the limited capacity of monetary compensation alone to remedy such harm. This recognition has significant implications for defamation practice, emphasizing that crafting appropriate apologies is not merely a peripheral element of settlement strategy but central to it.

The decision also brings welcome clarity to the application of Calderbank principles in the defamation context, providing a structured framework for assessing whether rejection of settlement offers was reasonable. This guidance will likely influence settlement practices in defamation proceedings by encouraging more carefully crafted apologies and more realistic assessment of non-monetary elements.

As defamation continues to evolve in the digital age, where reputational harm can spread rapidly and persistently, the significance of appropriately tailored apologies is only likely to increase. Wright v de Kauwe provides a foundation for this evolving area of law, emphasizing that effective vindication requires attention to the qualitative aspects of apologies rather than merely their existence.

Apportionment of Costs in Defamation Proceedings: Greenwich v Latham (No 3)

Introduction

The Federal Court of Australia's decision in Greenwich v Latham (No 3) [2025] FCA 312 explains the principles governing costs orders in defamation proceedings where a plaintiff achieves partial success. This case represents a contribution to the jurisprudence on costs apportionment in defamation matters, particularly when dealing with multiple publications and imputations. Justice O'Callaghan's reasoning offers practical guidance on when costs should follow the event despite a plaintiff's partial success, and when indemnity costs might be warranted following the rejection of a settlement offer.

Background: Costs Principles in Defamation Proceedings

The apportionment of costs in defamation proceedings has evolved considerably in recent years, with courts increasingly willing to divide costs to reflect the parties' respective successes and failures. The legal framework for costs orders in the Federal Court includes s 43 of the Federal Court of Australia Act 1976 (Cth), which vests a wide discretion in the Court with respect to costs.

As summarised by White J in Hockey v Fairfax Media Publications Pty Ltd (No 2) (2015) 237 FCR 127 (Hockey (No 2)), the relevant principles include:

1. The wide discretion must be exercised judicially (Hockey (No 2) at 134 [37]);

2. Ordinarily, costs follow the event, with a successful litigant receiving costs absent special circumstances (Hockey (No 2) at 134 [37]);

3. Courts are increasingly prepared to apportion costs where a party succeeds on only some claims (Hockey (No 2) at 143 [88]);

4. A litigant succeeding on only part of their claim may reasonably bear the expense of litigating unsuccessful portions (Hockey (No 2) at 134 [37]); and

5. Apportionment may be appropriate where issues on which the plaintiff failed were "clearly dominant or separable" (Hockey (No 2) at 142 [87]).

Facts of the Case

Greenwich v Latham (No 3) concerned the costs determination following Justice O'Callaghan's judgment in Greenwich v Latham [2024] FCA 1050 (the primary judgment). The defamation proceeding was brought by Alexander Greenwich, member for Sydney in the NSW Legislative Assembly, against Mark Latham, an independent member of the NSW Legislative Council, regarding two publications: the "primary tweet" and the "DT quotes" (at [2]-[3]).

At trial, Mr Greenwich contended that each publication conveyed two defamatory imputations and claimed damages for non-economic loss, aggravated damages, and injunctive relief (at [3]).

Regarding the primary tweet, Justice O'Callaghan found that:

• The imputation that Mr Greenwich "engages in disgusting sexual activities" was conveyed and was defamatory (at [5], [9]);

• The imputation that Mr Greenwich "is not a fit and proper person to be a member of the NSW Parliament because he engages in disgusting sexual activities" was not conveyed (at [6]).

Regarding the DT quotes, Justice O'Callaghan found that:

• Neither pleaded imputation was conveyed (at [8]).

Justice O'Callaghan awarded Mr Greenwich $100,000 in damages for non-economic loss and $40,000 in aggravated damages (at [12]). A subsequent application for injunctive relief was dismissed in Greenwich v Latham (No 2) [2025] FCA 131 (at [13]).

The Court's Reasoning on Costs

Apportionment of Costs

Mr Latham submitted that each party should pay its own costs or, alternatively, that he should only be ordered to pay one quarter of Mr Greenwich's costs on a party-party basis (at [22]-[24]). This submission was based on Mr Latham's claim that he succeeded on a "preponderance of the issues" - specifically, the second pleaded imputation regarding the primary tweet and the entirety of the claim regarding the DT quotes (at [24]).

In contrast, Mr Greenwich argued he should be awarded the whole of his costs because he was successful in his claim and there was no reason costs should not follow the event (at [25]). Mr Greenwich's counsel, Dr Collins AM KC, submitted that it was misconceived to rely on a numerical comparison of issues (at [26]).

Dr Collins advanced five key reasons why the case would have been run in exactly the same way even if Mr Greenwich had sued only in respect of the primary tweet (at [27]):

1. The affidavit evidence relied upon would have been identical, covering necessary background, context, and damages (at [27(1)]);

2. All the same witnesses would have been called (at [27(2)]);

3. The DT quotes case was not severable from the primary tweet case due to "an unbroken chain of causation" between the publications (at [27(3)]);

4. The second pleaded imputation regarding the primary tweet involved only brief legal argument with no additional evidence (at [27(4)]); and

5. All evidence about serious harm would still have been necessary (at [27(5)]).

Justice O'Callaghan found these submissions "irresistible" and accepted that Mr Greenwich should recover his costs of the proceeding (at [29]). His Honour noted that while Mr Greenwich was unsuccessful in his application for injunctive relief, this was offset by delays and expenses caused by Mr Latham's insistence that Mr Greenwich provide sworn evidence about his sources of funding for the proceeding (at [30]).

Indemnity Costs

Mr Greenwich submitted that costs should be paid on an indemnity basis, principally because Mr Latham unreasonably rejected an offer to settle contained in a concerns notice dated 19 April 2023 (at [32]). The offer included terms requiring:

• A public apology and retraction;

• Permanent disabling of comments on the apology;

• Undertakings not to publish similar imputations in future;

• Payment of Mr Greenwich's reasonable expenses; and

• Payment of $20,000 compensation (at [33]).

After reviewing the principles governing indemnity costs following rejected settlement offers from CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 and Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 40, Justice O'Callaghan was not persuaded that Mr Latham's rejection of the offer was unreasonable (at [44]).

His Honour reasoned that:

• The DT quotes were not defamatory, yet formed a significant part of the concerns notice (at [44]);

• The undertakings sought were "very broad and unlimited in time" (at [44]);

• The proposed terms would have imposed "onerous obligations to monitor social media that may have posed difficulties in enforcement" (at [44]).

Consequently, Justice O'Callaghan declined to award costs on an indemnity basis (at [46]).

Practical Application: A Worked Example

Consider the following hypothetical scenario:

Plaintiff X sues Defendant Y for defamation regarding three separate publications (A, B, and C). Each publication has two pleaded imputations. At trial, X succeeds on both imputations for publication A, one imputation for publication B, and fails entirely on publication C. X is awarded $150,000 in damages.

Applying the principles from Greenwich v Latham (No 3):

1. Consider whether the successful and unsuccessful claims are truly separable or whether they form part of an interconnected narrative;

2. Determine whether the same evidence would have been necessary even if only the successful claims had been pursued;

3. Assess whether the unsuccessful publications or imputations added significant complexity or length to the proceedings.

If the evidence and witnesses would have been largely the same regardless of whether publications B and C were included, a court would likely award X their full costs despite the partial success. However, if publication C required distinct evidence and significantly extended the proceedings, the court might reduce X's recoverable costs to reflect this unnecessary expenditure.

Guidance for Practitioners

When advising clients on costs in defamation proceedings with partial success, practitioners should:

1. Assess Practical Severability

• Consider whether the successful and unsuccessful claims share common evidentiary foundations

• Determine if the same witnesses would have been required even without the unsuccessful claims

• Evaluate whether preparation would have been substantially different if only successful claims were pursued

2. Evaluate the Relative Significance of Claims

• Consider whether the unsuccessful claims were peripheral or central to the overall case

• Assess the proportion of court time and evidence devoted to unsuccessful claims

• Determine whether unsuccessful claims significantly extended proceedings

3. Consider Settlement Offers

• Ensure settlement offers are reasonable and proportionate

• Make offers that acknowledge the strength and weaknesses of the case

• For defendants, consider the potential for indemnity costs when evaluating settlement offers

4. Prepare Detailed Records

• Document time spent on different aspects of the case

• Keep records that differentiate between work on distinct publications or imputations

• Be prepared to demonstrate how time and resources would have been allocated if only successful claims were pursued

Arguments and Evidence for Each Side

For Plaintiffs Seeking Full Costs

1. Evidence that the same witnesses would have been called regardless of unsuccessful claims

2. Documentation showing that preparation for successful and unsuccessful claims overlapped significantly

3. Evidence that the defendant's conduct necessitated pursuit of all claims together

4. Argument that unsuccessful claims formed part of a single narrative requiring comprehensive treatment

For Defendants Seeking Apportionment

1. Evidence that unsuccessful claims significantly extended proceedings

2. Documentation of distinct evidence pertaining solely to unsuccessful claims

3. Argument that unsuccessful claims were clearly separable and dominant parts of the case

4. Time records showing disproportionate resources devoted to unsuccessful claims

Key Takeaways for Legal Practice

1. Severability is Practical, Not Theoretical: The test for apportionment turns on practical considerations of how the case would have been run, not merely the numerical proportion of successful claims.

2. Evidence Overlap is Crucial: Where the same evidence would have been necessary even if only successful claims were pursued, courts are unlikely to apportion costs.

3. Careful Offer Construction: Settlement offers should be carefully constructed to make rejection unreasonable. Broad undertakings and coverage of ultimately unsuccessful claims may undermine arguments for indemnity costs.

4. Document Resource Allocation: Practitioners should document how resources are allocated between different aspects of a case to support or defend against apportionment applications.

5. Look Beyond Numbers: Courts will not merely count successful versus unsuccessful imputations but will assess their relative significance and the resources devoted to them.

Conclusion

Greenwich v Latham (No 3) represents a significant contribution to the evolving jurisprudence on costs in defamation proceedings. Justice O'Callaghan's decision reinforces that courts will take a practical approach to costs apportionment, looking beyond mere numerical success to consider how the case would actually have been conducted if only the successful claims had been pursued.

The decision also highlights the challenges plaintiffs can face in securing indemnity costs following rejected settlement offers, particularly where those offers encompass ultimately unsuccessful claims or contain broad undertakings that may be difficult to enforce.

Malice in Defamation: Meaning, Role, and Proof in Western Australian Law

1. Introduction

Significance of Malice

The concept of 'malice' occupies a pivotal position within Australian defamation law. While not an element of the cause of action itself, malice becomes critically relevant when a defendant seeks to rely upon certain defences, most notably qualified privilege (both statutory and common law) and honest opinion (or its common law precursor, fair comment). Proof that a defamatory publication was actuated by malice—essentially, made with an improper motive or state of mind—can negate these defences, stripping the defendant of legal protection that might otherwise be available (Roberts v Bass (2002) 212 CLR 1 at [62]-[65] per Gaudron, McHugh and Gummow JJ).

Purpose and Scope

This section provides guidance on the definition, role, proof, and procedural handling of malice in defamation proceedings. It focuses on the application of malice under the Defamation Act 2005 (WA) ('the Act') and the relevant common law principles preserved by the Act. The aim is to offer practical assistance, grounded in established jurisprudence, particularly from the High Court of Australia and relevant appellate courts, with specific reference to Western Australian provisions and case law where feasible.

Structure Overview

This analysis will proceed by:

• Defining malice as understood in Australian common law, which informs its application under the Act.

• Explaining the specific role of malice in defeating the statutory defences of qualified privilege (s 30) and honest opinion (s 31) under the WA Act, as well as analogous common law defences.

• Detailing the requirements for pleading and proving malice, including the burden and standard of proof, and the types of evidence typically relied upon.

• Illustrating the principles through analysis of key case law examples where malice was successfully or unsuccessfully argued.

• Providing practical guidance, including considerations for assessing evidence and directing juries on the issue of malice.

Context: Balancing Interests

Defamation law operates at the intersection of competing fundamental values: the right of an individual to protection of their reputation and the right to freedom of expression, particularly concerning matters of public interest (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568). The defences available in defamation, and the concept of malice which qualifies some of those defences, represent mechanisms by which the law attempts to strike a balance between these competing interests. Malice serves as a threshold, ensuring that defences designed to protect legitimate communication are not abused for improper ends.

2. Defining Malice in Australian Defamation Law

Common Law Foundation

The Defamation Act 2005 (WA), consistent with uniform defamation legislation across Australia, does not provide a statutory definition of 'malice.' Section 6(2) of the Act expressly states that the Act does not affect the operation of the general law in relation to the tort of defamation except to the extent the Act provides otherwise. Consequently, the meaning of malice, particularly where it is relevant to defeating statutory defences like qualified privilege under section 30(4), is derived from established common law principles. The general law continues to apply to determine whether a publication was actuated by malice when such a finding may defeat a defence.

Core Concepts: Improper Purpose

At its core, malice in defamation law signifies the misuse of an occasion or defence for an improper purpose. Where a defence like qualified privilege exists, it is granted by law to serve a particular public or private interest (e.g., the performance of a duty, the protection of a common interest). Malice arises when the defendant uses that occasion not for its intended purpose, but for some ulterior or foreign motive (Roberts v Bass (2002) 212 CLR 1 at [75]-[76] per Gaudron, McHugh and Gummow JJ).

The seminal articulation of this principle comes from Lord Diplock in Horrocks v Lowe [1975] AC 135 at 149, who stated that qualified privilege is lost if the defendant "misused the occasion for some purpose other than that for which the privilege is accorded by the law." The privilege attaches to the occasion, but it can be defeated if the defendant abuses that occasion. Examples of such improper purposes include publishing out of personal spite, ill will, vindictiveness, or a desire to injure the plaintiff that is unconnected to the duty or interest protected by the privilege (Horrocks v Lowe [1975] AC 135 at 149).

The legal definition of malice thus focuses sharply on the defendant's subjective dominant purpose at the time of publication. This makes it distinct from objective assessments of reasonableness or negligence, although such factors can be relevant evidence from which the subjective purpose might be inferred (Roberts v Bass (2002) 212 CLR 1 at [75]-[76]). This subjective focus is critical: proving, for instance, that a defendant's conduct was objectively unreasonable for the purposes of establishing statutory qualified privilege under section 30(1)(c) of the WA Act is a different exercise from proving the subjective improper purpose required for malice under section 30(4).

The 'Dominant Purpose' Test

Crucially, for malice to be established, the plaintiff must prove that the improper purpose was the dominant or actuating motive for the publication (Roberts v Bass (2002) 212 CLR 1 at [76]). As the High Court affirmed, malice requires proof that the improper motive was the substantial or driving reason for the publication. The mere co-existence of some ill will or secondary improper motive alongside a genuine and dominant proper purpose (i.e., fulfilling the duty or protecting the interest relevant to the privilege) is generally insufficient to establish malice (Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 50-51). The improper purpose must be the primary driver.

Knowledge of Falsity and Reckless Indifference

A defendant's state of mind regarding the truth or falsity of the defamatory matter is highly relevant to determining their purpose.

• Knowledge of Falsity: Publishing defamatory matter knowing it to be false is generally regarded as almost conclusive evidence of malice (Horrocks v Lowe [1975] AC 135 at 150). If a defendant knowingly publishes falsehoods, it is difficult to conceive that they are acting for a purpose protected by the law; such conduct inherently points to an improper motive.

• Reckless Indifference: Publishing defamatory matter with reckless indifference as to its truth or falsity—that is, publishing without caring whether it is true or false—is treated by the law as equivalent to knowledge of falsity (Horrocks v Lowe [1975] AC 135 at 150). Such recklessness demonstrates a lack of honest belief and is strong evidence from which malice (an improper dominant purpose) can be inferred.

While knowledge of falsity or recklessness are often described as forms of malice, it is perhaps more accurate to understand them as powerful evidence from which the core element of malice—the improper dominant purpose—can be inferred. As discussed in Roberts v Bass (2002) 212 CLR 1 at [78], the absence of a positive, honest belief in the truth of the statement is a significant factor pointing towards potential malice, but it is the underlying improper purpose, often evidenced by such recklessness or knowledge, that constitutes malice itself. This suggests a potential two-stage analysis for the fact-finder: first, assessing the defendant's state of knowledge or belief (e.g., knew it was false, was reckless, honestly believed it true), and second, inferring whether this state of mind, combined with other evidence, reveals a dominant purpose foreign to the privilege.

Distinguishing Malice from Other Conduct

It is essential to distinguish malice from other states of mind or conduct that do not necessarily defeat a defence:

• Carelessness or Negligence: Malice is not established by mere carelessness, negligence, impulsiveness, irrationality, prejudice, drawing conclusions from insufficient evidence, or failing to verify facts, unless such conduct is so gross as to warrant an inference of reckless indifference to the truth (Horrocks v Lowe [1975] AC 135 at 150). As established in Horrocks v Lowe, honest belief, even if formed carelessly or based on prejudice, can negate malice if the occasion was used for its proper purpose.

• Strong Language: The use of strong, vehement, or exaggerated language does not, in itself, constitute malice (Horrocks v Lowe [1975] AC 135 at 151). Particularly in contexts such as political debate or a response to an attack, a degree of latitude is allowed. However, language that is utterly disproportionate to the facts or the occasion can be evidence from which an inference of malice might be drawn (Adam v Ward [1917] AC 309 at 339 per Lord Atkinson).

• Honest Belief: A genuine, positive belief in the truth of the defamatory statement is generally inconsistent with malice, even if that belief is mistaken, prejudiced, or unreasonable, provided the dominant purpose of the publication was proper to the occasion (Horrocks v Lowe [1975] AC 135 at 150). However, the High Court in Roberts v Bass indicated that the absence of an honest belief, while not malice per se, is significant evidence pointing towards it ((2002) 212 CLR 1 at [78]).

• Political Motive: In the context of political communication, particularly during election campaigns, an intention to cause political damage to an opponent does not, by itself, constitute an improper motive amounting to malice (Roberts v Bass (2002) 212 CLR 1 at [104]-[105]). This principle reflects the constitutional protection afforded to political communication following Lange v Australian Broadcasting Corporation (1997) 189 CLR 520.

3. The Role of Malice in Defeating Defences

General Principle

The rationale for malice defeating defences like qualified privilege and honest opinion lies in the purpose of these defences. They are designed to protect communications made in good faith for legitimate societal or individual purposes (e.g., fulfilling a duty, sharing information on matters of common interest, expressing genuine opinions on public matters). Proof of malice demonstrates that the defendant has abused the protection afforded by the defence, using the occasion or the expression of opinion as a pretext for pursuing an improper objective, such as venting personal spite or knowingly spreading falsehoods (Roberts v Bass (2002) 212 CLR 1 at [62]-[65]).

Statutory Qualified Privilege (s 30 Defamation Act 2005 (WA))

Section 30 of the Act provides a statutory defence of qualified privilege. To establish this defence, the defendant must prove:

• The recipient had an interest or apparent interest (defined in s 30(2)) in having information on some subject (s 30(1)(a)).

• The matter was published to the recipient in the course of giving information on that subject (s 30(1)(b)).

• The conduct of the defendant in publishing the matter was reasonable in the circumstances (s 30(1)(c)). Section 30(3) lists non-exhaustive factors a court may consider in assessing reasonableness, such as the seriousness of the imputation, steps taken to verify, whether the plaintiff's side was sought, and the public interest nature of the matter (Austin v Mirror Newspapers Ltd (1985) 3 NSWLR 354).

However, section 30(4) explicitly states: "For the avoidance of doubt, a defence of qualified privilege under subsection (1) is defeated if the plaintiff proves that the publication of the defamatory matter was actuated by malice."

The requirement of 'reasonable conduct' in s 30(1)(c) and the 'malice' defeater in s 30(4) are distinct concepts. A defendant's conduct might be found unreasonable based on the objective factors in s 30(3) (e.g., failing to verify information adequately) without necessarily rising to the level of subjective malice (Harbour Radio Pty Ltd v Trad (2012) 247 CLR 31 at [33]). Conversely, while less likely, it is theoretically possible for conduct to appear reasonable on its face but still be driven by a dominant improper motive (malice). In practice, however, factors strongly indicating malice, such as knowledge of falsity or reckless indifference, would almost certainly render the publishing conduct unreasonable under s 30(1)(c).

This structure creates a potential two-stage inquiry for statutory qualified privilege. The defendant must first satisfy the court that their conduct was objectively reasonable. Even if they succeed, the plaintiff has a second opportunity to defeat the defence by proving subjective malice. This contrasts with traditional common law qualified privilege, which primarily required the defendant to establish the privileged occasion (duty/interest reciprocity), immediately shifting the onus to the plaintiff to prove malice without a separate 'reasonableness' hurdle for the defendant (Roberts v Bass (2002) 212 CLR 1). Consequently, the statutory defence under section 30 may, in some circumstances, offer less robust protection to publishers than its common law counterpart, a point noted by the High Court in Aktas v Westpac Banking Corporation Ltd (2010) 241 CLR 79.

Honest Opinion (s 31 Defamation Act 2005 (WA))

Section 31 provides a defence for the publication of honest opinion. The core elements require the defendant to prove:

• The matter was an expression of opinion rather than a statement of fact (s 31(1)(a)).

• The opinion related to a matter of public interest (s 31(1)(b)).

• The opinion was based on proper material, meaning material that is substantially true, or published on an occasion of absolute or qualified privilege, or protected by other specified defences (ss 31(5), 31(6)) (Fairfax Media Publications Pty Ltd v Voller (2021) 271 CLR 34).

The defence applies to opinions expressed by the defendant personally (s 31(1)), an employee or agent (s 31(2)), or a third-party commentator whose opinion the defendant publishes (s 31(3)).

The defence under section 31 is defeated if the plaintiff proves the specific state of mind set out in section 31(4). This subsection provides that the defence fails if the plaintiff proves that:

• (For the defendant's own opinion under s 31(1)): "the opinion was not honestly held by the defendant at the time the defamatory matter was published" (s 31(4)(a)).

• (For an employee/agent's opinion under s 31(2)): "the defendant did not believe that the opinion was honestly held by the employee or agent at the time the defamatory matter was published" (s 31(4)(b)).

• (For a commentator's opinion under s 31(3)): "the defendant had reasonable grounds to believe that the opinion was not honestly held by the commentator at the time the defamatory matter was published" (s 31(4)(c)).

While section 31(4) uses the phrase "not honestly held" rather than "actuated by malice," the concepts are functionally very similar in this context (Channel Seven Adelaide Pty Ltd v Manock (2007) 232 CLR 245 at [3] per Gleeson CJ). Proving that an opinion was not genuinely held by the person expressing it effectively establishes an improper purpose—the defence is intended to protect genuine expressions of opinion, not statements dishonestly presented as opinion. The focus is squarely on the subjective belief (or lack thereof) of the relevant opinion holder at the time of publication.

The distinct terminology used in the Act—"actuated by malice" for qualified privilege (s 30(4)) versus "opinion was not honestly held" for honest opinion (s 31(4))—is noteworthy. While both require proof of an improper subjective state, this linguistic variation might influence how arguments are framed. For section 30, arguments might encompass a broader range of improper motives potentially extraneous to the truth of the statement itself. For section 31, the argument is more tightly focused on whether the opinion expressed was genuinely believed by the relevant person.

Common Law Defences

Section 24 of the Act preserves defences available under the general law, except to the extent the Act provides otherwise. Malice remains relevant to defeating key common law defences:

• Common Law Qualified Privilege: This defence arises in situations involving a reciprocity of duty and interest between publisher and recipient, or where a statement is made in reply to an attack (Toogood v Spyring (1834) 1 CM & R 181; 149 ER 1044). It is defeated if the plaintiff proves the publication was actuated by malice, understood as an improper or foreign purpose, applying the principles from Horrocks and Roberts (Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366).

• Common Law Fair Comment: This defence protects expressions of opinion on matters of public interest based on true facts (Silkin v Beaverbrook Newspapers Ltd [1958] 1 WLR 743). It is defeated by proof of malice, typically established by showing the comment did not represent the defendant's genuine opinion or was motivated by an improper purpose (London Artists Ltd v Littler [1969] 2 QB 375 at 392-393). While largely superseded by the statutory defence in s 31, the common law defence remains available (Manock v Channel Seven Adelaide Pty Ltd [2006] SASC 192).

4. Proving Malice

Burden and Standard of Proof

The legal burden of proving that a publication was actuated by malice rests squarely and solely on the plaintiff (Horrocks v Lowe [1975] AC 135 at 149-150). Once the defendant establishes the factual basis for a defence capable of being defeated by malice (e.g., the existence of a privileged occasion or the elements of honest opinion), the onus shifts to the plaintiff to prove, on the balance of probabilities, that the defendant acted with the requisite malice (Roberts v Bass (2002) 212 CLR 1 at [76]). The evidence adduced by the plaintiff must be "credible, substantial evidence and not a surmise or a minimal amount of evidence" sufficient to support a positive finding of malice (Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 51).

Pleading Requirements

A plaintiff who intends to allege malice to defeat a defence must plead it specifically. It is not sufficient merely to deny the defence in the statement of claim or rely on an implied joinder of issue. Malice must be raised affirmatively in a Reply to the defendant's Defence (Clyne v The New South Wales Bar Association (1960) 104 CLR 186 at 203).

Furthermore, the pleading must contain full particulars of the facts, matters, and circumstances relied upon by the plaintiff to establish the allegation of malice (Bailey v Australian Broadcasting Corporation [1995] Aust Torts Reports ¶81-336). General allegations or boilerplate assertions of malice are insufficient and liable to be struck out. In Western Australia, Order 20, rule 13(1) of the Rules of the Supreme Court 1971 (WA) requires that particulars be given of any pleading alleging a condition of mind, such as malice. Order 20, rule 8 also requires specific pleading of matters which might otherwise take the opposing party by surprise.

The requirement for detailed particulars is not merely procedural; it serves a crucial function in defining the scope of the factual dispute regarding the defendant's state of mind. It compels the plaintiff to articulate the specific basis for the malice allegation at an early stage, enabling the defendant to understand the case they must meet and preventing trial by ambush (Bailey v Australian Broadcasting Corporation [1995] Aust Torts Reports ¶81-336). The plaintiff will generally be confined at trial to proving malice based on the particulars pleaded.

Evidence of Malice

Since malice pertains to the defendant's subjective state of mind or dominant purpose, direct evidence is often unavailable. Consequently, malice must usually be inferred from circumstantial evidence (Roberts v Bass (2002) 212 CLR 1 at [79]). This evidence can be broadly categorised as intrinsic (arising from the publication itself) and extrinsic (arising from circumstances outside the publication).

• Intrinsic Evidence:

  • Language: The tone and terms of the publication. Language that is excessive, vitriolic, sensationalised, or clearly disproportionate to the facts or the occasion may suggest an improper motive (Horrocks v Lowe [1975] AC 135 at 151). However, caution is required, as strong or prejudiced language alone does not equate to malice, especially in certain contexts (Adam v Ward [1917] AC 309 at 339-340).

  • Mode and Extent of Publication: Publishing the defamatory matter more widely than the privileged occasion warrants can indicate malice (Roberts v Bass (2002) 212 CLR 1 at [104]). For example, broadcasting allegations to the public when the duty/interest relationship only exists with a specific individual.

  • Inclusion of Irrelevant Matter: Including defamatory statements that are clearly irrelevant to the purpose of the privileged occasion may suggest the occasion is being used as a cloak for malice (Adam v Ward [1917] AC 309 at 334).

  • Lack of Factual Basis: A complete absence of any foundation for the defamatory statement within the publication itself might support an inference of recklessness or improper motive (Webb v Bloch (1928) 41 CLR 331 at 363-364).

  • Internal Evidence of Falsity: The publication itself might contain information known to the defendant that contradicts the defamatory imputation (Turner v Metro-Goldwyn-Mayer Pictures Ltd [1950] 1 All ER 449 at 461).

• Extrinsic Evidence:

  • Defendant's Knowledge or Belief: Evidence that the defendant knew the statement was false, or had no positive belief in its truth, or was recklessly indifferent (Horrocks v Lowe [1975] AC 135 at 150).

  • Defendant's Conduct: Evidence of prior hostility, arguments, disputes, threats, or expressions of ill will between the defendant and the plaintiff can indicate an underlying improper motive (Thomas v Mowbray [1935] 2 KB 113 at 120).

  • Sources and Verification: Evidence that the defendant relied on sources known to be unreliable, deliberately avoided obvious sources of information, or failed to make reasonable inquiries or attempts to verify the defamatory allegations, particularly when serious and easily checkable, can point to reckless indifference (Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 51-52 per Brennan J).

  • Response to Contradiction/Apology: Evidence that the defendant refused to listen to or publish an explanation or contradiction offered by the plaintiff, or unreasonably refused to apologise or retract the statement after its falsity was demonstrated, can be relevant (Wakley v Cooke (1849) 4 Ex 511 at 515-516; 154 ER 1315 at 1317).

  • Repetition: Unjustified repetition of the defamatory statement, especially after its falsity has been pointed out, may indicate malice (Clark v Molyneux (1877) 3 QBD 237 at 247).

  • Evidence of Plan or Conspiracy: Evidence showing the publication was part of a deliberate plan or conspiracy to injure the plaintiff (Angel v H H Bushell & Co Ltd (1968) 1 QB 813 at 831-832).

  • Attempts to Mislead or Conceal: Evidence that the defendant attempted to mislead the court or conceal relevant facts about their state of mind or sources (Gouldsmith v Carruthers (1798) 1 Camp 121; 170 ER 906).

Inferring Malice

The task for the court or jury is to consider the whole of the evidence—both intrinsic and extrinsic—and determine whether, on the balance of probabilities, it supports an inference that the defendant's dominant purpose in publishing the defamatory matter was improper and foreign to the occasion or defence relied upon (Roberts v Bass (2002) 212 CLR 1 at [75]-[79]). The inference drawn must be a reasonable and definite one based on the evidence, not mere speculation or conjecture (Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 51-52).

The inherent difficulty in proving a subjective state of mind means that establishing malice can be challenging for plaintiffs (Horrocks v Lowe [1975] AC 135 at 149-151). The reliance on circumstantial evidence and inference makes the assessment highly fact-sensitive and potentially less predictable than proving objective elements.

5. Case Law Illustrations (Worked Examples)

Examining specific cases helps illustrate how the principles of malice are applied in practice.

Malice Established

• Roberts v Bass (2002) 212 CLR 1 (Regarding Appellant Roberts):

  • Facts: During a South Australian election campaign, Mr Roberts authorised the publication of three documents targeting the incumbent, Mr Bass. These included a mocking postcard implying a taxpayer-funded holiday, a pamphlet containing a forged Ansett Frequent Flyer statement suggesting misuse of travel entitlements, and a 'how-to-vote' card with various untrue allegations concerning Mr Bass's policies and activities (e.g., junkets, secret hospital deals, gun rights stance).

  • Finding on Malice (Roberts): Although the High Court majority ultimately allowed Roberts' appeal based on the application of Lange privilege principles, the lower courts and dissenting/concurring judgments in the High Court provide insight into evidence supporting malice. The trial judge found Roberts' dominant purpose went beyond mere political damage to intending to lower Bass's reputation generally, and that he published allegations recklessly, without caring if they were true (Roberts v Bass (2002) 212 CLR 1 at [39]-[42] per Gleeson CJ). The use of a forged document was particularly indicative of an improper motive. Gleeson CJ and Hayne J in the High Court found Roberts acted with malice due to recklessness regarding truth or falsity ((2002) 212 CLR 1 at [216]-[219] per Hayne J). Callinan J also found recklessness ((2002) 212 CLR 1 at [248]).

  • Relevance: This case demonstrates how actions like forgery and the dissemination of serious allegations known to be untrue or made with reckless indifference can constitute strong evidence of malice, potentially overcoming the latitude given to political speech. It underscores the fact-intensive nature of the inquiry into the publisher's dominant motive.

• Smith v Stevens [2022] WASC 116 (Western Australia):

  • Facts: A director (Stevens) of a WA Aboriginal Corporation emailed a document containing defamatory allegations (mismanagement, dishonesty, breach of duty) about two fellow directors (Smith, Camille) to the other board members.

  • Finding of Malice: The WA Supreme Court found that although the communication occurred on an occasion of qualified privilege (directors sharing a common interest in corporate governance), the defence under both common law and s 30 of the Act was defeated because Stevens was actuated by malice (Smith v Stevens [2022] WASC 116 at [328]-[334]). Key evidence supporting this finding included: (1) Stevens' own admission that he prepared the document partly out of a desire to retaliate against perceived attacks from Camille; (2) Stevens' failure to make sufficient inquiries to verify many of the serious allegations, indicating recklessness as to their truth; and (3) Stevens' poor attendance at board meetings, which undermined his claim to be acting solely out of genuine concern for the Corporation's governance.

  • Relevance: This WA authority provides a clear example of how extrinsic evidence (admission of retaliatory motive, poor attendance) combined with intrinsic factors (unverified serious allegations) can establish a dominant improper purpose (malice), thereby defeating qualified privilege even where a legitimate common interest exists between publisher and recipient.

Malice Not Established / Defence Upheld

• Roberts v Bass (2002) 212 CLR 1 (Regarding Appellant Case):

  • Facts: The second appellant, Mr Case, distributed the 'Orange Pamphlet' (the how-to-vote card containing untrue statements about Bass) at a polling booth for several hours on election day. The pamphlet had been prepared and authorised by Mr Roberts.

  • Finding on Malice (Case): The High Court majority held that malice had not been established against Mr Case (Roberts v Bass (2002) 212 CLR 1 at [80]-[82]). Although the material was defamatory and published on a privileged occasion (political communication), the evidence did not demonstrate that Case himself possessed an improper motive. He was merely distributing material prepared by Roberts, and there was insufficient evidence to show he shared Roberts' recklessness or improper purpose, or that he acted for any dominant purpose other than participating in the election campaign.

  • Relevance: This illustrates the important principle that malice must generally be proven against each individual joint publisher (unless vicarious liability applies) (Egger v Viscount Chelmsford [1965] 1 QB 248 at 263). The malice of the author (Roberts) was not automatically imputed to the distributor (Case). It also reinforces that a motive to participate in political campaigning, even if aimed at damaging an opponent, is not, in itself, malice.

• Aktas v Westpac Banking Corporation (2010) 241 CLR 79:

  • Facts: A bank mistakenly applied a court order to the wrong account, leading it to dishonour cheques drawn on that account with the notation "Refer to drawer," which was held to be defamatory.

  • Finding on Malice: The court held that the bank's communication ("Refer to drawer") was made on an occasion of qualified privilege (a communication made in the conduct of its affairs where its interest was concerned). Crucially, the court found that the bank's mistake in applying the order did not, by itself, constitute malice or destroy the privilege. The plaintiff needed to prove actual malice—an improper motive beyond the error—on the part of the bank, which was not established on the facts.

  • Relevance: This case reinforces that negligence or error, even if leading to a defamatory publication on a privileged occasion, does not automatically equate to malice. Malice requires proof of a specific, subjective improper state of mind, such as knowledge of falsity, reckless indifference, or an intention to injure, separate from the mere fact of the mistake (Horrocks v Lowe [1975] AC 135 at 149).

Comparing these cases underscores that findings of malice turn heavily on the specific evidence available regarding the defendant's state of mind and dominant motive at the time of publication. General ill will or the publication of defamatory material on a privileged occasion is insufficient; the plaintiff must adduce specific evidence, whether intrinsic or extrinsic, pointing clearly to an improper purpose that actuated that particular defendant's publication.

6. Practical Guidance (WA Focus)

Assessing Evidence of Malice

Judicial officers and practitioners assessing potential malice should consider:

• Cumulative Effect: Evaluate the combined weight of all evidence suggesting malice. Individual pieces might be weak, but together they may paint a compelling picture of improper motive (Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 51).

• Context: The context of the publication is crucial. Greater latitude may be afforded to political speech or statements made in reply to attack compared to unsolicited private communications (Roberts v Bass (2002) 212 CLR 1 at [104]-[105]).

• Failure to Apologise/Retract: While relevant extrinsic evidence, a refusal to apologise or retract should be assessed cautiously, considering the reasons given (if any) and the overall circumstances. It is not determinative of malice (Loveday v Sun Newspapers Ltd (1938) 59 CLR 503 at 515-516).

• Verification Efforts: Close attention should be paid to the nature of the allegations, the defendant's sources, and the steps taken (or not taken) to verify the information, particularly in relation to the factors listed for reasonableness under s 30(3) of the WA Act. A cavalier approach to truth-checking serious allegations can support an inference of reckless indifference (Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 51-52 per Brennan J).

Pleading and Particulars

Practitioners must ensure malice is pleaded in a Reply with full and precise particulars, complying with Order 20, rules 8 and 13 of the Rules of the Supreme Court 1971 (WA). Failure to do so risks the pleading being struck out or the plaintiff being unable to lead evidence on malice at trial. Defendants should scrutinise the particulars provided and consider seeking further and better particulars if they are inadequate (Bailey v Australian Broadcasting Corporation [1995] Aust Torts Reports ¶81-336).

Guidance on Judicial Directions to Juries on Malice (WA Context)

Given that section 21 of the Defamation Act 2005 (WA) permits parties to elect for trial by jury on liability issues (including malice), clear and accurate judicial directions are paramount in Western Australia. Section 22 outlines the respective roles of the judicial officer and jury.

• Threshold Question for Judge: The trial judge must first determine if there is any evidence adduced by the plaintiff that is reasonably capable of supporting a finding of malice. If there is no such evidence, the issue of malice should be withdrawn from the jury, and the defence (if otherwise established) will succeed (Adam v Ward [1917] AC 309 at 348 per Lord Sumner).

• Content of Jury Directions: Where there is sufficient evidence, the judge's directions on malice should cover the following points:

  1. Identify the specific defence(s) raised (e.g., statutory qualified privilege under s 30, honest opinion under s 31) to which malice is relevant.

  2. Explain that if the jury finds the elements of the defence established by the defendant, the defence succeeds unless the plaintiff proves malice (or lack of honest belief for s 31) (Horrocks v Lowe [1975] AC 135 at 149).

  3. Clearly state that the burden of proving malice rests solely on the plaintiff (Horrocks v Lowe [1975] AC 135 at 149).

  4. Explain the standard of proof: the plaintiff must prove malice on the balance of probabilities (Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170-171).

  5. Define malice: the use of the occasion for a dominant purpose or motive foreign to the purpose for which the law grants the protection (e.g., spite, ill will, intention to injure unrelated to the duty/interest) (Roberts v Bass (2002) 212 CLR 1 at [75]-[76]).

  6. Explain the relevance of the defendant's state of mind regarding truth: publishing knowing the matter is false, or with reckless indifference to its truth or falsity (not caring if it is true or false), is strong evidence from which malice may be inferred (Horrocks v Lowe [1975] AC 135 at 150).

  7. Distinguish malice from conduct that does not constitute malice: mere carelessness, error, negligence, impulsiveness, prejudice, irrationality, or strong language, unless these factors demonstrate reckless indifference or an improper dominant purpose (Horrocks v Lowe [1975] AC 135 at 150-151).

  8. For the s 31 honest opinion defence, direct the jury specifically on the test in s 31(4): whether the plaintiff has proved, on the balance of probabilities, that the opinion was not honestly held by the relevant person (defendant, employee/agent, or commentator, as applicable) (Channel Seven Adelaide Pty Ltd v Manock (2007) 232 CLR 245 at [3] per Gleeson CJ).

  9. Instruct the jury to consider all the relevant evidence, both intrinsic (e.g., language of the publication) and extrinsic (e.g., defendant's conduct, knowledge, inquiries), in deciding whether malice has been proven (Roberts v Bass (2002) 212 CLR 1 at [78]-[79]).

  10. If there are multiple defendants, direct the jury that malice must be considered and proven individually against each defendant against whom it is alleged (unless vicarious liability is applicable) (Egger v Viscount Chelmsford [1965] 1 QB 248 at 263). Reference should be made to the specific WA Act sections (ss 21, 22, 30(4), 31(4)).

The availability of jury trials for liability in WA places a significant onus on judges to ensure these complex concepts are conveyed accurately and understandably to lay jurors (Abram v Channon [1934] WAR 90 at 92-93). The nuances differentiating malice from carelessness, recklessness as evidence versus malice itself, and the specific test for honest opinion require careful formulation.

Furthermore, the principle that malice must be proven individually against joint publishers carries significant practical weight in multi-defendant cases common in media litigation (e.g., involving author, editor, and publishing company) (Egger v Viscount Chelmsford [1965] 1 QB 248 at 263). Pleadings, evidence, and jury directions must meticulously differentiate between defendants, as a finding of malice against one does not automatically defeat the defence for others who lacked the requisite improper state of mind (absent vicarious liability).

Summary Disposal

While malice is typically a question of fact best determined at trial after hearing all the evidence (Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 51), a defendant faced with a Reply pleading malice may consider a strike out application if the particulars pleaded are manifestly insufficient to support a finding of malice. However, courts are generally cautious about determining issues involving state of mind summarily (Spencer v Commonwealth of Australia (2010) 241 CLR 118).

7. Conclusion

Malice remains a crucial, albeit complex, concept in Western Australian defamation law. Defined by common law principles focusing on the defendant's dominant improper purpose at the time of publication, it serves as a vital control mechanism, ensuring that defences designed to protect freedom of expression and facilitate necessary communications are not abused. Proof of malice, which rests entirely with the plaintiff, can defeat the significant defences of statutory qualified privilege (s 30) and honest opinion (s 31), as well as their common law counterparts.

Establishing malice requires more than demonstrating error, carelessness, or strong language; it necessitates credible, substantial evidence, often circumstantial, pointing to a subjective state of mind involving knowledge of falsity, reckless indifference to the truth, or a dominant motive foreign to the purpose of the defence, such as personal spite or vindictiveness. The case law, including decisions like Horrocks v Lowe, Roberts v Bass, and the WA case Smith v Stevens, provides essential guidance on the types of conduct and evidence from which malice may be inferred.

For judges and practitioners in Western Australia, a thorough understanding of the common law definition of malice, its specific application under sections 30(4) and 31(4) of the Defamation Act 2005 (WA), the strict pleading requirements, the burden and standard of proof, and the nuances of directing juries on this issue is indispensable for the proper conduct and determination of defamation proceedings. Ultimately, the careful application of the principles surrounding malice helps maintain the delicate balance between protecting individual reputation and safeguarding freedom of speech within the state.

Injurious Falsehood: Proof of Actual Damage

I. Introduction: The Tort of Injurious Falsehood

A. Definition and Essential Elements in Australia

Injurious falsehood, alternatively termed malicious falsehood, is an action established at common law. It serves to protect plaintiffs against provable economic loss resulting from false and malicious statements made by a defendant concerning the plaintiff's business, property, or goods. This focus on economic or commercial interests distinguishes it fundamentally from defamation, which primarily protects personal reputation.

The essential elements of the tort of injurious falsehood in Australia were authoritatively stated by Gummow J in the High Court decision of Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388, drawing upon established common law principles. To succeed, a plaintiff must establish the following four elements:

1. A false statement of or concerning the plaintiff's goods or business.

2. Publication of that statement by the defendant to a third person.

3. Malice on the part of the defendant.

4. Proof by the plaintiff of actual damage suffered as a direct and natural result of the statement. (Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [9])

Crucially, the plaintiff bears the onus of proving each of these elements, including the falsity of the statement, the existence of malice, and the occurrence of actual damage. This contrasts sharply with defamation, where damage to reputation is often presumed (subject to applicable statutory thresholds such as 'serious harm'), and the falsity of the defamatory statement is presumed unless the defendant proves otherwise through the defence of justification.

The considerable burden placed on the plaintiff, particularly the requirements to prove malice and actual damage, contributes to injurious falsehood being a less frequently litigated cause of action compared to defamation. Nevertheless, its significance has arguably increased following the introduction of uniform defamation legislation across Australia (see, for example, the Defamation Act 2005 (WA)). Section 9 of this legislation restricts the ability of most corporations, particularly those trading for profit or employing 10 or more persons, to sue for defamation. Consequently, for such corporations seeking redress for malicious falsehoods causing economic harm, injurious falsehood often represents the primary, if not the only, available cause of action.

The tort directly addresses the harm—economic loss stemming from malicious lies about a business or its offerings—that these corporations may suffer. Furthermore, unlike defamation, claims in injurious falsehood are not constrained by the 'single meaning' rule, potentially allowing for greater flexibility in pleading the harmful implications of a statement. Thus, despite the acknowledged difficulties in proof, injurious falsehood occupies a necessary space in the legal landscape, providing a remedy tailored to the protection of commercial interests against specific forms of malicious attack.

B. Distinguishing Injurious Falsehood from Defamation (Focus on Malice and Damage)

While both torts involve harm arising from published statements, the distinctions between injurious falsehood and defamation are critical.

Malice: Malice is an essential ingredient of injurious falsehood. It signifies more than mere negligence or carelessness; it requires proof that the defendant published the falsehood with an improper motive, such as an intent to injure the plaintiff without just cause or excuse. Malice can be established by showing the defendant knew the statement was false, acted with reckless indifference as to its truth or falsity (amounting to willful blindness), or was actuated by some dishonest or improper purpose. An honest belief in the truth of the statement, even if negligently formed, will generally negate malice (Seafolly Pty Ltd v Madden [2012] FCA 1346). In contrast, malice is generally not required to establish liability in defamation, although it may defeat certain defenses (like qualified privilege or honest opinion) and can be relevant to the assessment of aggravated damages.

Damage: This is the central focus of this article. Injurious falsehood is actionable only upon proof of actual damage, meaning quantifiable economic or pecuniary loss. The damage is the "gist of the action" (Ratcliffe v Evans [1892] 2 QB 524). Defamation, historically, is actionable per se (without proof of damage), as harm to reputation is presumed upon publication of defamatory matter. However, this common law position has been modified in jurisdictions that have adopted a 'serious harm' threshold as an element of the cause of action for defamation.

Falsity: In injurious falsehood, the plaintiff must plead and prove that the defendant's statement was false. In defamation, the law presumes the defamatory statement is false; the burden falls on the defendant to prove the truth of the imputation(s) via the defense of justification.

Standing (Corporations): As noted earlier, corporations that are precluded from suing in defamation by statute (typically for-profit corporations or those with 10 or more employees) may still bring an action for injurious falsehood if they can prove the requisite elements, including actual damage.

Limitation Period: The limitation period for injurious falsehood, as an action on the case, is generally six years. This contrasts with the shorter one-year limitation period (subject to potential extension) applicable to defamation actions under the uniform Defamation Acts.

II. The Requirement of Actual Damage

A. Nature of 'Actual Damage': Provable Economic Loss

The cornerstone of a successful claim in injurious falsehood is the proof of "actual damage." This term signifies demonstrable financial or pecuniary loss suffered by the plaintiff as a consequence of the defendant's malicious falsehood. As Bowen LJ stated in the seminal case of Ratcliffe v Evans [1892] 2 QB 524, actual damage is the very "gist of the action."

The loss must be capable of estimation in monetary terms. Unlike defamation, where damages can compensate for intangible harm like hurt feelings or damage to personal standing, injurious falsehood does not provide a remedy for mere injury to feelings or reputation in the absence of consequent economic loss.

Historically, there was some ambiguity regarding the scope of recoverable damage, with references sometimes made to "special damage." "Special damage" in tort law often carries a specific meaning, referring to pecuniary losses that have accrued up to the date of trial and which must be specifically pleaded and proved with particularity. However, the High Court's formulation in Palmer Bruyn, employing the term "actual damage" (Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [9]), suggests a broader compass consistent with the language in Ratcliffe. It indicates that the tort compensates for the full measure of the economic detriment flowing as a natural and probable consequence of the falsehood, encompassing not only past losses but also provable future economic losses. This aligns the assessment of damages in injurious falsehood more closely with general tort principles, which aim to compensate the plaintiff for all foreseeable consequences of the wrongful act, subject to the specific rules of causation and remoteness applicable to intentional torts. Therefore, plaintiffs are entitled to claim for demonstrable ongoing business detriment or the loss of future commercial opportunities directly caused by the defendant's malicious statement, provided such losses can be adequately proven.

B. Onus and Standard of Proof

The plaintiff carries the legal burden of proving, on the balance of probabilities, both the existence of actual damage and the causal link between that damage and the defendant's malicious publication.

The standard of proof required was articulated in Ratcliffe v Evans [1892] 2 QB 524 at 533: "As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable having regard to the circumstances and to the nature of the acts themselves by which the damage is done." This requires plaintiffs to present the best evidence reasonably available to demonstrate their loss. While absolute mathematical precision may not always be attainable, particularly when proving a general loss of business, a plaintiff must provide sufficient evidence to allow the court to quantify the loss with a reasonable degree of confidence.

This evidentiary requirement represents a significant practical hurdle for plaintiffs. Proving that a specific, quantifiable economic loss was directly caused by the defendant's statement, rather than by other market forces, competitor actions, or internal business factors, can be exceptionally challenging. The difficulty lies in isolating the impact of the falsehood amidst the complexities of commerce. This often necessitates sophisticated analysis, potentially involving forensic accountants or market experts, to dissect financial data, model counterfactual scenarios ('but for' the falsehood), and attribute loss specifically to the defendant's conduct. The failure to adduce "concrete evidence" demonstrating both the fact of damage and its causal connection to the defendant's statement was fatal to the plaintiff's claim in Seafolly Pty Ltd v Madden [2012] FCA 1346, highlighting the critical importance and difficulty of meeting this evidentiary burden. This inherent difficulty is a primary reason why injurious falsehood is considered a challenging and relatively infrequently pursued action.

C. Exception: Injunctive Relief and Probable Damage

An important qualification to the requirement of proving suffered actual damage arises in the context of injunctive relief. Where a plaintiff acts promptly to seek an interlocutory injunction to restrain the publication or further publication of an injurious falsehood, and the injunction is granted, the claim may potentially be maintained even if quantifiable damage has not yet fully accrued.

In Mahon v Mach 1 Financial Services Pty Ltd (No 2) [2013] NSWSC 10, the Supreme Court of New South Wales held that injurious falsehood could be maintained without proof of actual damage where an early interlocutory injunction had prevented the very damage that might otherwise have ensued. In such circumstances, when deciding whether to grant interlocutory relief (and potentially final relief if damage was imminent but averted), the court may focus on whether actual damage is the reasonably probable consequence of the defendant's publication if allowed to continue unrestrained. This provides a crucial mechanism for preventative justice, allowing courts to intervene before the full economic harm materializes, a particularly relevant consideration given the speed and reach with which falsehoods can spread in the digital age.

III. Types of Recoverable Actual Damage

Actual damage in injurious falsehood can manifest in several forms. The key is that the loss must be economic or pecuniary in nature and causally linked to the defendant's statement.

A. Loss of Identifiable Customers or Sales

The most direct and often easiest form of actual damage to prove is the loss of specific, identifiable custom or transactions. This occurs where the plaintiff can point to particular customers who ceased dealing with the plaintiff, or specific contracts or sales that were lost, directly because of the defendant's falsehood.

Evidence to support such a claim typically involves:

• Testimony from the former customer(s) confirming that they withdrew their custom or cancelled an order due to the defendant's statement.

• Documentary evidence, such as emails or letters from customers explicitly referencing the falsehood as the reason for terminating a relationship or cancelling a contract.

• Business records (e.g., order books, client lists) demonstrating the cessation of business from specific sources immediately following the publication of the falsehood.

Worked Example: A defendant maliciously and falsely publishes that a specific batch of the plaintiff baker's bread contained glass shards. The plaintiff can prove actual damage by adducing evidence from a regular wholesale customer (e.g., a local café) who provides testimony and confirms in writing that they cancelled their standing order for that batch and subsequent orders due to safety concerns arising directly from reading the defendant's publication. The value of the cancelled orders constitutes provable actual damage.

B. General Loss of Business or Custom

1. The Principle in Ratcliffe v Evans [1892] 2 QB 524

Not all damage resulting from an injurious falsehood can be traced to specific lost customers. Where the falsehood is of a nature "calculated in the ordinary course of things to produce, and where they do produce, actual damage" in the form of a general decline in business, the law permits recovery for this general loss. The landmark decision in Ratcliffe established that in such circumstances, evidence of a general diminution of business is admissible and sufficient to prove actual damage, without the plaintiff needing to identify and call every customer who was deterred.

This principle applies particularly where the falsehood is likely to deter potential customers generally, rather than specific individuals known to the plaintiff. Examples include falsely stating that a business has ceased trading (as in Ratcliffe itself), disparaging the quality or safety of goods sold widely to the public, or impugning the title to property offered for general sale.

2. Evidentiary Requirements for Proving General Loss

While Ratcliffe provides flexibility, proving a general loss of business still requires rigorous evidence demonstrating both a decline in trade following the publication and a causal connection between the decline and the defendant's falsehood. Simply showing a downturn after the publication is insufficient; the plaintiff must provide evidence supporting the inference that the falsehood was, on the balance of probabilities, a material cause of that downturn.

Evidence commonly adduced includes:

• Financial Records: Detailed financial statements (profit and loss, balance sheets), sales reports, customer data, budgets, and forecasts, comparing the period after the publication with historical performance, industry benchmarks, or prior projections.

• Operational Data: Evidence of reduced customer inquiries, website traffic, footfall (for physical businesses), or order volumes.

• Market Analysis: Evidence comparing the plaintiff's business performance against relevant market trends or competitor performance to demonstrate that the plaintiff's decline is anomalous and likely attributable to the falsehood rather than general market conditions.

• Expert Evidence: Reports from forensic accountants or economists are often crucial. Experts can analyze complex financial data, perform statistical analyses, model the likely performance of the business 'but for' the falsehood, discount for other contributing factors (e.g., economic climate, competition, internal issues), and provide a quantified estimate of the loss attributable to the falsehood.

• Evidence of Impact: Surveys, evidence of negative online sentiment, or increased customer complaints referencing the falsehood can help establish the connection.

The plaintiff must satisfy the court that the general loss claimed is a natural and probable consequence of the defendant's statement and not primarily due to other unrelated factors.

The principle established in Ratcliffe remains vital, acknowledging the difficulty of tracing every lost sale when a falsehood has a widespread impact. However, the methods available for proving such loss have evolved significantly since 1892. While Ratcliffe allows proof of general loss, contemporary practice demands that plaintiffs utilize available data and analytical tools to provide the court with the most robust and particular evidence reasonably possible. Modern courts, accustomed to sophisticated financial analysis in commercial litigation, will likely expect more than a simple 'before and after' comparison of turnover, particularly where other factors could plausibly explain a decline. Failure to provide persuasive evidence linking the general decline specifically to the falsehood, potentially through expert analysis ruling out alternative causes, risks the claim failing for lack of proof of damage, as underscored by the outcome in Seafolly. The standard remains one of reasonable particularity, but what is considered 'reasonable' evolves with the available means of proof.

Worked Example: A defendant competitor maliciously publishes false technical specifications suggesting the plaintiff's widely sold electronic component is unreliable under certain conditions. The plaintiff cannot identify every potential customer deterred but provides: (i) Verified sales data showing a significant and sustained drop in sales volume commencing shortly after the publication, contrasting sharply with prior stable sales and the positive performance of competitors selling similar components. (ii) A detailed forensic accounting report analyzing the sales data, market conditions, and the plaintiff's marketing efforts, concluding that, after accounting for other variables, the publication caused a specific percentage drop in sales volume, and quantifying the resulting lost profit. (iii) Evidence from distributors reporting increased customer concerns about reliability following the publication. This collective evidence could satisfy the court of a general loss of business caused by the falsehood, consistent with Ratcliffe.

C. Expenses Reasonably Incurred in Counteracting the Falsehood

A plaintiff may recover as actual damage the reasonable expenses they have incurred in taking steps to counteract the negative effects of the defendant's injurious falsehood. This head of damage recognizes that mitigating the harm caused by a malicious publication often requires proactive expenditure.

Examples of potentially recoverable expenses include:

• Costs associated with corrective advertising campaigns.

• Fees paid to public relations consultants to manage the fallout from the falsehood.

• Costs of communicating directly with customers, suppliers, or distributors to reassure them and correct the false information.

• Expenses related to obtaining independent verification or reports to refute the falsehood (e.g., safety audits, technical assessments).

To be recoverable, the expenditure must satisfy several criteria:

1. It must have been actually incurred.

2. It must have been incurred as a direct consequence of the defendant's falsehood.

3. It must have been a reasonable and proportionate response to the publication and its likely impact.

Evidence required would typically include invoices, receipts, contracts for services, and potentially expert opinion on the reasonableness and necessity of the expenditure in the circumstances.

Worked Example: Following a defendant's malicious and false publication questioning the structural integrity of the plaintiff developer's new apartment building, the plaintiff commissions an urgent independent engineering report to verify the building's safety. The plaintiff then distributes a summary of the positive report to all potential purchasers and existing contract holders and places advertisements in local media highlighting the findings. The documented costs of the engineering report and the reasonable costs of the targeted communications and advertising aimed at counteracting the specific falsehood are potentially recoverable as actual damage.

IV. Causation: Linking the Falsehood to the Loss

A. Establishing the Causal Nexus

Proof of actual damage alone is insufficient; the plaintiff must also establish a causal link between the damage suffered and the defendant's tortious conduct – specifically, the malicious publication of the falsehood. The court must be satisfied, on the balance of probabilities, that the defendant's statement was a material cause of the plaintiff's loss. A mere temporal correlation – loss occurring after publication – does not automatically equate to causation.

B. The 'Natural and Probable Consequence' Test

The test for remoteness of damage in injurious falsehood requires the plaintiff to show that the actual damage suffered was the "direct and natural result" or the "natural and probable consequence" of the defendant's publication. This principle, affirmed by Gummow J in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [9], citing Ratcliffe, governs the extent of loss for which the defendant will be held liable. As injurious falsehood is an intentional tort (requiring malice), this test may permit recovery for consequences that might be considered too remote under the 'reasonable foreseeability' test typically applied in negligence actions. The focus is on the consequences naturally flowing from the intentional wrongdoing.

C. Analysis of Causation in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388

The High Court's decision in Palmer Bruyn provides critical guidance on causation in injurious falsehood. The appellant (Palmer Bruyn, a surveyor) suffered the loss of a retainer with McDonald's after a newspaper published an article reporting on a "bogus letter." This letter, containing false statements about the appellant, had been created and initially published maliciously by the respondent (Parsons) to a small group, intending ridicule.

The central issue was whether the appellant's loss (the termination of the McDonald's contract) was caused by Parsons' original malicious publication of the forged letter. The High Court (by majority) held that it was not. The Court found that the damage resulted from the publication of the newspaper report, which was a separate act by a third party and differed in its nature and impact from Parsons' initial, limited publication. Parsons was not legally responsible for the newspaper's republication. Therefore, the necessary causal connection between Parsons' actionable publication (the initial limited one) and the damage suffered was broken.

The significance of Palmer Bruyn lies in its emphasis on linking the proven damage directly to the specific publication for which the defendant is legally responsible and which constitutes the tort. The 'natural and probable consequence' test must be applied to that specific tortious act. Subsequent republications or actions by third parties, even if foreseeable in a general sense, may constitute intervening acts (novus actus interveniens) that sever the chain of causation leading back to the defendant's original malicious statement, unless the defendant intended or authorized the republication, or it was the natural and probable result of the original publication in circumstances where the third party was likely to repeat it. This requires careful identification of the precise tortious publication relied upon by the plaintiff and rigorous proof that the claimed loss flowed naturally and probably from that specific publication.

D. Difficulties in Proving Causation: Seafolly Pty Ltd v Madden [2012] FCA 1346

The practical challenge of establishing causation is well illustrated by the Seafolly case. Ms Madden published statements on Facebook and via email falsely alleging that Seafolly, a swimwear company, had copied her designs. Seafolly brought proceedings alleging, among other things, injurious falsehood.

Despite findings that Madden's statements were false and arguably made with reckless indifference amounting to malice, the injurious falsehood claim ultimately failed. The primary reason for the dismissal was Seafolly's inability to adduce sufficient "concrete evidence" to prove, on the balance of probabilities, that Madden's specific statements had actually caused it to suffer quantifiable economic loss.

Seafolly underscores the difficulty plaintiffs face in isolating the impact of specific statements (particularly those made online) within a dynamic commercial environment. Proving that a decline in sales, or loss of specific opportunities, was directly attributable to the defendant's falsehood, rather than myriad other factors like competition, changing trends, pricing, or general market conditions, requires persuasive and specific evidence that was found lacking in that case.

V. Quantification of Damages and Evidentiary Matters

A. Principles of Assessment

Once liability is established (including proof of actual damage caused by the falsehood), the court must quantify the damages award. The fundamental principle is compensatory: damages aim to restore the plaintiff, so far as money can, to the economic position they would have occupied had the tortious publication not occurred. This involves assessing the monetary value of the actual economic loss proven to have been caused by the falsehood.

Unlike general damages in defamation, which are awarded 'at large' to compensate for presumed reputational harm and associated distress, damages in injurious falsehood are tied to the specific or general economic loss demonstrated by the evidence.

Because injurious falsehood requires proof of malice as an element of the tort itself, the defendant's state of mind is already central to liability. While the primary focus of damages is compensation for economic loss, the intentional nature of the tort means that aggravated damages (compensating for additional injury or distress caused by the manner of the defendant's conduct) and exemplary or punitive damages (intended to punish the defendant and deter similar conduct) may potentially be available in appropriate, egregious cases. This contrasts with the position under the uniform defamation legislation, which typically caps damages for non-economic loss and often prohibits or restricts awards of exemplary damages.

B. Methods of Quantification

Several methods may be employed, often with the assistance of expert evidence, to quantify the plaintiff's economic loss:

• Lost Profits Calculation: This involves estimating the revenue lost due to sales diverted or prevented by the falsehood, and then deducting the expenses that were saved as a result of not making those sales (e.g., variable costs of goods sold, potentially some saved fixed costs if operations were significantly curtailed). Projecting the 'but for' revenue scenario often involves analyzing historical trends, budgets, and market conditions.

• Market Share Analysis: This method compares the plaintiff's actual market share after the publication with the share it likely would have held 'but for' the falsehood. Expert analysis may be needed to attribute changes in market share specifically to the defendant's conduct, accounting for broader market dynamics.

• Business Valuation Diminution: In cases where the falsehood has caused long-term damage to the plaintiff's business or goodwill, damages may be assessed based on the reduction in the overall capital value of the business. This typically requires expert valuation evidence comparing the business's value before and after the impact of the falsehood.

• Specific Costs: Quantifying the actual, reasonable, and necessary expenses incurred in counteracting the falsehood (as discussed in Part III.C) by summing the relevant documented expenditures.

The appropriate method(s) will depend on the nature of the plaintiff's business, the type of loss suffered, and the available evidence.

C. Types of Evidence Required

Robust evidence is essential for both proving the fact of damage and supporting its quantification. Key categories include:

• Financial Records: Comprehensive and reliable accounting records are fundamental. This includes profit and loss statements, balance sheets, detailed sales data (by product, region, customer, etc.), customer relationship management (CRM) data, budgets, and financial forecasts. These establish baseline performance and demonstrate any post-publication changes.

• Expert Evidence: Forensic accountants are frequently engaged to analyze financial records, apply quantification methodologies (like lost profits calculations), assess causation by isolating the falsehood's impact, and prepare expert reports for the court. Market analysts or industry experts can provide crucial context regarding market conditions, competition, and the likely impact of the falsehood within the specific industry.

• Witness Testimony: Evidence from company management regarding business operations, strategy, and the observed impact of the falsehood. Testimony from specific lost customers (if applicable). Evidence from expert witnesses.

• Supporting Documentation: Copies of lost contracts or orders, correspondence from customers or suppliers referencing the falsehood, invoices and receipts for counteracting expenses, marketing plans, and business records generally.

• Market Data: Independent industry reports, competitor performance data, market research, and analysis of online sentiment or media coverage related to the falsehood can help contextualize the plaintiff's performance and support causation arguments.

VI. Conclusion

The tort of injurious falsehood serves a distinct and important function in protecting economic and commercial interests from harm caused by malicious, false statements. It requires the plaintiff to discharge a significant evidentiary burden, proving not only the falsity of the statement and the defendant's malice, but also that the statement caused actual, quantifiable economic loss.

Actual damage is the cornerstone of the action, encompassing provable pecuniary detriment, including general loss of business and reasonable counteracting expenses. While the principle from Ratcliffe v Evans allows for proof of general loss without identifying specific lost customers, demonstrating causation and quantifying such loss requires robust evidence, often involving detailed financial analysis and expert testimony. The High Court's decision in Palmer Bruyn & Parker Pty Ltd v Parsons highlights the critical need to establish a direct causal link between the specific publication attributable to the defendant and the loss claimed. The potential availability of injunctive relief based on probable damage offers a crucial preventative remedy.

Despite the challenges inherent in proving malice and actual damage, injurious falsehood remains a vital cause of action, particularly for corporations limited in their ability to sue for defamation. It provides a necessary, albeit demanding, pathway for redress against intentional and damaging falsehoods targeting commercial activities.

Proving Publication in Social Media Defamation: Lessons from Munro v Wheeler

Introduction

The recent decision of Munro v Wheeler (No 3) [2025] NSWDC 3 highlights the fundamental challenges that can arise in proving publication in defamation cases, particularly those involving social media.

The case involved two plaintiffs (a veterinarian and her friend) who sued two defendants (a dog owner and a "pet detective") over Facebook posts alleging they had stolen a puppy named Teddy.

The plaintiffs claimed they merely found the wandering puppy and were trying to help, while the defendants posted material suggesting more nefarious motives.

Despite the considerable volume of material before the court, the plaintiffs' claim failed at the critical first hurdle—proving that the allegedly defamatory material was actually published in the form claimed.

The Fundamental Requirement of Publication

Publication is an essential element of any defamation action. It requires more than just showing that defamatory words were made available—it requires proof that at least one third party actually downloaded and comprehended the material.

As Justice Gibson noted in Munro v Wheeler:

"The plaintiffs must establish that the matters complained of were read by a person who downloaded the matter complained of, not merely a part of it." (at [123]). (NOTE: However, contrast this with a finding of a platform of facts from which it could be inferred publication had occurred).

The bilateral nature of publication was emphasized in the defendants' pleadings, which acknowledged that they had "made available for publication" the material, but did not admit that any third party had actually read the entire publications as pleaded. Making material available is only "the first step of a two-step process" (at [143]). Without evidence that someone actually downloaded and read the publication in the form alleged, the publication element failed.

Special Challenges of Social Media Publications

Social media platforms present unique challenges for proving publication in defamation cases. Unlike traditional media with fixed content, social media is characterized by:

1. Fluidity and impermanence: Posts and comments appear and disappear, making reconstruction difficult.

2. Non-sequential reading: Users rarely read entire threads in the exact order presented.

3. Personalization: What appears on one user's feed may differ from another's due to algorithms and privacy settings.

4. Post-publication editing: Content can be modified after initial publication.

5. Variable presentation: Different devices and settings may display content differently.

As noted in the English case Stocker v Stocker [2020] AC 593, social media is consumed differently from traditional publications. Courts must adapt to the "conversational and impressionistic" nature of social media, where readers:

"...do not pore over the literal meaning of each word or the grammar of each phrase or sentence... they scroll through messages relatively quickly and move on." (cited in Bazzi v Dutton (2022) 289 FCR 1 at [29])

The Perils of "Constructed" Publications

Munro v Wheeler demonstrates a common mistake in social media defamation cases—suing on artificially constructed compilations rather than actual publications. The plaintiffs presented two exhibits (A and B) comprising 70 and 40 pages respectively of hundreds of screenshots, often out of chronological order, with multiple copies and poor quality reproduction.

Justice Gibson observed that these exhibits were not documents "anyone ever published on Facebook, but a collection of hundreds of screen shots, out of chronological order and consisting of multiple copies" (at [66]). The problem was compounded when witnesses called to establish publication had seen a different 43-page version, not the exhibits claimed to be the defamatory publications.

This approach mirrors the problems encountered in The Sydney Cosmetic Specialist Clinic Pty Ltd v Hu [2022] NSWCA 1, where the plaintiffs similarly failed to establish that the artificial constructions they sued upon had ever been downloaded in that form.

Identifying the Publication with Precision

Courts have long emphasized the need to precisely identify what constitutes the defamatory publication. As Justice Bromwich explained in Hayson v Nationwide News Pty Ltd [2019] FCA 81:

"The plaintiff must identify the matter complained of in the precise form which is alleged to be defamatory of them, and... prove publication... in that form." (cited in Munro v Wheeler at [136])

This principle is even more important in the digital context, where evidence must establish both the content of the publication and that it was downloaded in substantially the same form as alleged. In Poland v Fairfax Digital Australia & New Zealand Pty Ltd [2023] WASC 383, Justice Tottle emphasized that plaintiffs must prove the complete publication was downloaded, not merely parts of it.

Fatal or Material Variance

When significant differences exist between what was allegedly published and what can be proven, courts may dismiss claims on that basis alone. This concept was historically known as "fatal variance" in English decisions (see Gatley on Libel and Slander, 12th ed, [32.15]).

While the NSW Court of Appeal in Brien v Mrad [2020] NSWCA 259 rejected this concept as overly rigid, Justice Gibson observed that where there is a "material" difference between the document alleged to have been published and what was actually published, this can be fatal to the claim.

The Queensland Court of Appeal recently addressed this issue in Surie v MacDonald [2024] QCA 254, where minor differences between an email and a letter did not amount to a material variance. By contrast, in Munro v Wheeler, the differences were so substantial that no publication could be established.

Practical Advice for Practitioners

Given the challenges highlighted in Munro v Wheeler, practitioners handling social media defamation cases should consider the following:

1. Capture accurate evidence promptly: Social media content can vanish or change rapidly. Secure proper forensic captures of the exact publication as soon as possible.

2. Sue on actual publications: Avoid constructing artificial compilations. Instead, identify discrete posts or clearly defined threads that represent actual publications.

3. Establish downloading evidence: Ensure witnesses can testify to downloading and reading the specific publications sued upon, not merely similar or partial content.

4. Be precise about imputations: Clearly identify which parts of the publication give rise to each imputation, particularly when dealing with lengthy social media threads.

5. Consider liability alternatives: In appropriate cases, consider suing on republications or pursuing alternative claims like injurious falsehood or misleading conduct.

Conclusion

Munro v Wheeler serves as a stark reminder of the fundamental importance of establishing publication in defamation actions. As Justice Gibson noted, even where serious allegations about plaintiffs were demonstrably made, failure to properly identify and prove publication of the matter complained of can be fatal to a claim.

The case highlights that while the principles underlying defamation law remain consistent, proving publication in the digital age requires careful attention to the unique characteristics of online communication. Practitioners must adapt their approach to ensure that what is pleaded reflects what actually appeared on screen and what was actually downloaded by third parties.

The "Apparent Relevance" Test: Accessing Documents by Subpoena in Defamation Cases

Introduction

A recent defamation case from the New South Wales District Court has provided guidance on when a party can access documents via subpoena in defamation proceedings. In O'Shanassy v Turland (No 3) [2025] NSWDC 27, the Court dealt with an application to set aside a subpoena issued to Westpac Bank seeking financial records of companies associated with the plaintiff. The defendant had sought banking records to support a justification defense. Justice Gibson rejected the plaintiff's application to set aside the subpoena, holding that the documents met the "apparent relevance" test for legitimate forensic purpose.

The "Apparent Relevance" Test for Subpoenas

When a party seeks to access documents via subpoena in defamation proceedings, the documents must satisfy what is known as the "apparent relevance" test. As explained in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145 at [65], a subpoena is justified as having a legitimate forensic purpose if the documents sought are "apparently relevant" to an issue in the proceedings.

The Court in Blacktown explained that this test is satisfied if it can be seen that the documents sought will "materially assist on an identified issue" or if there is a "reasonable basis beyond speculation" that the documents will assist. Importantly, if the material assistance will benefit the party that issued the subpoena, the prospect of the forensic purpose being impugned as illegitimate is "virtually non-existent."

Documents Need Not Be Directly Admissible

Documents sought by subpoena need not be directly admissible as evidence. As noted in Maddison v Goldrick, documents subpoenaed for the purposes of cross-examining a witness are considered documents required for the purposes of evidence. This extends to cross-examination on issues of credit, as highlighted in cases such as Brand, Norris v Kandiah [2007] NSWSC 1296, and Liristis v Gadelrabb [2009] NSWSC 441.

Common Objections to Subpoenas in Defamation Cases

There are several common objections to subpoenas in defamation cases, all of which were addressed in O'Shanassy v Turland (No 3):

1. Lack of written evidence: In defamation cases, oral evidence is the general starting position unless parties apply for statements or affidavits. As noted in Martrat Pty Limited trading as Huxley Hill and Associates v Murphy [2020] NSWDC 1, requirements for written statements typically do not apply to defamation actions.

2. Inadequate particulars: Some plaintiffs argue that subpoenas should be rejected if the defendant has not provided sufficiently detailed particulars of justification. However, as explained in Brooks v Fairfax Media Publications Pty Ltd (No 2) [2015] NSWSC 1331, the requirement for particulars with "precision as in an indictment" is about specificity rather than the amount of information provided.

3. Timing of information: A common objection is that defendants can only rely on information in their possession at the time the defence was delivered. However, the Full Court in Australian Broadcasting Corporation v Chau Chak Wing (2019) 271 FCR 632; [2019] FCAFC 125 clarified that proof of a justification defence "may be augmented after invoking processes of discovery and production of documents by subpoena."

4. Non-parties to litigation: The fact that a subpoena seeks documents from entities not party to the litigation is irrelevant, provided there is a connection to an issue in the proceedings.

Augmentation of Truth Particulars

A key principle emerging from recent cases is that truth particulars in defamation cases need not be "frozen in time." As Kenneth Martin J stated in Kingsfield Holdings Pty Ltd v Sullivan Commercial Pty Ltd [2013] WASC 347, "an augmentation to particulars is a common scenario in commercial litigation, even in defamation actions. It simply means that as more precise information comes to hand, the precision of the particulars is magnified."

This principle recognizes that justification is the "keystone of freedom of speech" and highlights the importance of maintaining public confidence in the legal system, as noted in Greiss v Seven Network (Operations) Limited (No 2) [2024] FCA 98.

Relevance Beyond the Particulars

Documents sought by subpoena might be relevant to issues beyond the particulars of justification. For example, in O'Shanassy v Turland (No 3), the Court noted that documents were relevant to the plaintiff's plea that knowledge of the falsity of imputations aggravated his hurt to feelings. As pointed out in Della Bosca v Arena [1999] NSWSC 1057, such a plea "raises an 'issue' in the proceedings" that may require production of documents.

Conclusion

The "apparent relevance" test provides a relatively low threshold for accessing documents by subpoena in defamation proceedings. While fishing expeditions remain impermissible, courts generally allow access where there is a reasonable basis to believe the documents will assist on an identified issue or in cross-examination.

Concerns Notices in Defamation Law: Understanding the New Requirements

Introduction: Recent Case Highlights Importance of Valid Concerns Notices

A recent decision from the Supreme Court of Victoria has underscored the critical importance of properly drafted concerns notices in defamation proceedings. In Reiter v News Corp Australia Pty Ltd & Anor [2025] VSC 54, the plaintiff commenced proceedings against News Corp Australia and journalist Mark Murray over an article published in the Geelong Advertiser. The article, titled "Melbourne professor details bizarre encounter with serial Geelong impersonator Kurt Reiter," contained allegations that the plaintiff had been posing as a lawyer and claiming to work for high-profile musicians. The plaintiff claimed this publication damaged his reputation; however, his case was dismissed for failing to comply with the mandatory concerns notice requirements under the Victorian Defamation Act.

The Role of Concerns Notices in Modern Defamation Law

The 2021 amendments to the Defamation Act 2005 (Vic) introduced a mandatory concerns notice procedure. Similar reforms have been implemented in most Australian jurisdictions (though not yet in Western Australia at the time of writing). These amendments represent a significant shift in defamation practice, designed to promote early resolution of disputes and reduce the burden on courts.

Under the reformed legislation, before commencing defamation proceedings, plaintiffs must:

1. Issue a valid concerns notice to the publisher

2. Clearly identify the alleged defamatory imputations

3. Specify the serious harm allegedly caused or likely to be caused

4. Allow a statutory period for the publisher to make an offer of amends

The concerns notice regime serves two key purposes, as noted in Georges v Georges; Georges v Georges [2022] NSWDC 558:

1. To provide publishers with sufficient information to make a reasonable offer of amends before proceedings commence

2. To encourage potential plaintiffs to consider whether they have suffered serious harm to their reputation that meets the threshold for a defamation action

What Makes a Valid Concerns Notice?

Section 12A of the Defamation Act sets out several essential requirements for a valid concerns notice:

1. It must be in writing

2. It must specify where the matter complained of can be accessed

3. It must inform the publisher of the defamatory imputations that the aggrieved person considers are or may be carried by the matter

4. It must inform the publisher of the serious harm the aggrieved person considers has been caused or is likely to be caused

5. It must attach a copy of the matter complained of, if practicable

Importantly, a document filed to commence defamation proceedings cannot be used as a concerns notice.

The Level of Detail Required

Courts have taken varied approaches to the level of specificity required in concerns notices. As discussed in Reiter, some cases have held that bare assertions of damage are insufficient and that specificity closer to pleading standards is necessary (Teh v Woodworth [2022] NSWDC 411; M1 v R1 [2022] NSWDC 409; Hoser v Herald and Weekly Times Pty Limited & Anor [2022] VCC 2213).

In Hoser, Clayton J stated that adequate precision is needed to ensure neither the defendants nor the Court are required to "perform some mental gymnastics" to understand the alleged defamatory imputations.

However, in Cooper v Nine Entertainment Co Pty Ltd (2023) 169 ACSR 584, McElwaine J adopted a more flexible approach, stating that imputations "are not required to be expressed in explicit language" and that the aggrieved person's obligation is to do "the best that can reasonably be done" in the circumstances.

Consequences of Non-Compliance

The consequences of failing to comply with the concerns notice requirements are severe. In Reiter, the Court found that the plaintiff's proceeding was an abuse of process and dismissed it under r 23.01 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

Non-compliance with section 12B of the Defamation Act can have substantive implications for publishers, as it denies them the opportunity to:

1. Obtain further particulars of the alleged harm

2. Make an offer of amends

3. Potentially rely on the substantive defense provided in section 18

As stated in Reiter, "the commencement of a defamation proceeding which is not permitted by s 12B has the potential to bring the administration of justice into disrepute."

The Waiting Period

Even with a valid concerns notice, plaintiffs must wait 28 days after giving the notice before commencing proceedings, unless the court grants leave. This statutory period is designed to give publishers time to consider and potentially make an offer of amends.

In limited circumstances, a court may grant leave for earlier commencement of proceedings if:

• Waiting would contravene the limitation period, or

• It is "just and reasonable" to do so

Practical Tips for Drafting a Valid Concerns Notice (not yet applicable in WA)

Drawing from the Reiter decision and other cases, here are some practical tips for drafting a valid concerns notice:

1. Clearly identify each allegedly defamatory imputation in specific terms

2. Provide detailed particulars of how the publication has caused or is likely to cause serious harm to reputation

3. Establish a causal link between the publication and the alleged serious harm

4. Attach a copy of the matter complained of

5. Ensure the notice is provided to the correct parties

6. Wait the full 28-day period before commencing proceedings

Conclusion

The concerns notice regime represents a significant procedural hurdle for plaintiffs in defamation proceedings, but one with important policy objectives. By forcing parties to clarify issues and explore settlement options before litigation, these provisions aim to reduce unnecessary court proceedings and promote earlier resolution of disputes.

Publishers who receive concerns notices should consider them carefully and seek legal advice about available options, including making offers of amends. Potential plaintiffs should ensure they comply meticulously with the procedural requirements to avoid having their proceedings dismissed as an abuse of process.

As Reiter v News Corp Australia Pty Ltd & Anor [2025] VSC 54 demonstrates, courts are taking these requirements seriously, and failure to comply can be fatal to a defamation claim before it even properly begins.

Understanding Imputations in Defamation Law: Lessons from Li v Liao

Introduction

The recent Supreme Court of New South Wales decision in Li v Liao [2025] NSWSC 168 provides valuable clarification on the proper pleading of imputations in defamation proceedings. The case involved Xiaolu Li (also referred to as Belinda Li in the judgment), a licensed builder in NSW, and several companies associated with her business. The first plaintiff and the defendant were partners in a joint venture residential development in Carlingford, NSW, and were already involved in Federal Court proceedings related to this development. The plaintiffs alleged they were defamed through an oral conversation between the defendant and others, as well as through a letter sent to a director of a company that had contracted to invest in another development project. The alleged imputations included serious claims of embezzlement, corruption, fraudulent invoicing, and other improper business practices. Justice Rothman ultimately struck out the Statement of Claim but granted the plaintiffs leave to file an amended Statement of Claim to address the deficiencies identified.

What is an Imputation?

An imputation is central to defamation law but is often misunderstood by practitioners and clients alike. In defamation proceedings, there's a crucial distinction between the "defamatory matter" (the published material itself) and the "imputations" that arise from it.

The High Court in Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84 defined an imputation as being "properly used with reference to any act or condition asserted of or attributed to a person." This definition has stood the test of time and continues to be applied by Australian courts.

As explained by Samuels JA in Petritsis v Hellenic Herald (1978) 2 NSWLR 174 at 189:

"Section 9(1) distinguishes between a defamatory imputation and the matter by means of the publication of which the defamatory imputation is conveyed. There is no reason to suppose that the word 'imputation' is used in any sense different from its ordinary meaning. Hence it means 'the action of imputing or charging; the fact of being charged with a crime, fault, etc.'; in short, an accusation or charge."

His Honour further clarified that the "matter" is the material which conveys the imputation, or within which the imputation is embedded, or from which the imputation may be inferred.

Imputations vs. Published Material

A common error in defamation pleadings is failing to distinguish between the published material and the imputations that arise from it. The imputation is not simply a repetition of what was said or written, but rather the defamatory meaning that arises from the material.

As Justice Rothman noted in Li v Liao [2025] NSWSC 168 at [31]-[32]:

"The imputation may and usually does arise by inference, either a false innuendo or true innuendo, from the statement. The difficulty with the practice, which I do not here criticise, and which is permissible, is that it elides the 'matter' and the 'imputation'."

In Whelan v John Fairfax & Sons (1988) 12 NSWLR 148 at 154, Hunt J emphasized:

"It has always been made quite clear that the plaintiff's pleaded imputation must identify the meaning for which he contends rather than merely the words by which that meaning is said to have been conveyed. Words are but instruments which are used to express or convey their author's meaning. Outside of legal documents, however, words are often imprecise instruments for that purpose. A defamatory imputation is very rarely stated expressly; rather, it is more usually implied or to be inferred. The charge against the plaintiff is often to be read only between the lines..."

This distinction becomes particularly important in cases like Li v Liao, where some alleged "imputations" were found to be merely restatements of the published material rather than proper imputations arising from it.

Pleading Imputations Properly

In Li v Liao, Justice Rothman emphasized that imputations must be pleaded as substantive paragraphs in the Statement of Claim, not merely as particulars. Under the Uniform Civil Procedure Rules (UCPR) r 14.30(2), a Statement of Claim must "specify" each imputation on which the plaintiff relies, allege that the imputation was defamatory, and allege that the publication has caused or is likely to cause serious harm.

Justice Rothman explained at [94]-[96]:

"In the context of the operation of the Defamation Act 2005, particularly since the inclusions of ss 12A and 12B, and the restrictions on that which may be pleaded as an imputation to that which has been the subject of particulars in the Concerns Notice, it would seem that a harmonious reading of the provisions, bearing in mind the need to facilitate a just, quick and cheap resolution of the real issues between the parties, is that each imputation needs to be the subject of a pleading and not merely a particular."

His Honour further stated that each imputation is a "material fact" giving rise to liability, and specificity is required in a manner that cannot be altered without leave or argument.

Concerns Notices and "Substantially the Same" Imputations

The 2020 amendments to the NSW Defamation Act introduced sections 12A and 12B, which require a Concerns Notice to be served before defamation proceedings can be commenced. Importantly, section 12B(1)(b) stipulates that the imputations to be relied on in proceedings must have been particularized in the Concerns Notice.

However, section 12B(2)(b) permits reliance on "imputations that are substantially the same as those particularised in a concerns notice." In Li v Liao, Justice Rothman considered when imputations will be "substantially the same."

For example, His Honour compared an imputation that the plaintiff "embezzled" money with an imputation in the Concerns Notice that the plaintiff "misappropriated" money. At [52], Justice Rothman concluded:

"Because the ordinary reasonable reader may reasonably infer that an allegation of misappropriation includes fraud, an allegation that a person has misappropriated funds for their own benefit is not substantially different from an allegation that a person embezzled funds. No substantial difference arises as a result of that aspect of the imputation."

However, when examining other imputations, Justice Rothman found substantial differences. For instance, at paragraphs [58]-[60], His Honour found that an imputation that "The development properties that [the plaintiff] constructs all have massive issues and you can't buy them" was substantially different from the Concerns Notice imputation that "there is not a single developer who has worked with [the plaintiff] that is not suing her in Court."

When Will Imputations Be Struck Out?

The test for striking out imputations is stringent. As the High Court noted in Favell v Queensland Newspapers Pty Ltd (2005) 79 ALJR 1716; [2005] HCA 52 at [6]:

"Whether or not [the pleading] ought to and will be struck out [as disclosing no cause of action] is ultimately a matter for the discretion of the judge who hears the application. Such a step is not to be undertaken lightly but only, it has been said, with great caution. In the end, however, it depends on the degree of assurance with which the requisite conclusion is or can be arrived at. The fact that reasonable minds may possibly differ about whether or not the material is capable of a defamatory meaning is a strong, perhaps an insuperable, reason for not exercising the discretion to strike out."

Justice Rothman emphasized at [99]-[102] that imputations will only be struck out if, acting reasonably, no factfinder could conclude that a pleaded imputation arises from the material published. A judge's personal view about whether an imputation arises is not determinative unless the judge concludes that no reasonable factfinder could find the imputation.

For instance, in Li v Liao, Justice Rothman struck out imputation 13.7 (that the plaintiff "lies to investors to induce them to invest money in property development projects in which she is involved") because the passage relied upon by the plaintiff did not support this imputation. The only reference to untruths was an allegation that the plaintiff would say "black is white," which His Honour found insufficient to support the specific imputation pleaded.

The "Serious Harm" Requirement

The 2020 amendments to the NSW Defamation Act also introduced section 10A, which requires that publication of defamatory matter has caused or is likely to cause "serious harm" to the reputation of the person alleged to be defamed. This element must be properly pleaded and particularized.

In Newman v Whittington [2022] NSWSC 1725 at [27], the court emphasized that the purpose of enacting section 10A was to avoid litigation on minor disputes which do not cause serious harm.

In Li v Liao, Justice Rothman explained at [146]-[149]:

"The purpose of enacting s 10A was to avoid litigation on minor disputes which do not cause serious harm. The incidence of disputes arising as a consequence of social media and the distribution of emails has notoriously led to 'backyard disputes', which impermissibly utilise the resources of the Courts in dealing with matters that ought never be the subject of litigation."

His Honour further noted that while some defamatory material may inherently suggest serious harm (such as allegations of murder or fraud when widely published), in cases with limited publication like Li v Liao, the plaintiff must specifically plead the serious harm suffered and provide particulars.

Injurious Falsehood

Though distinct from defamation, the case also addressed pleading requirements for injurious falsehood. As Justice Rothman noted at [156], this tort has four elements: "a false statement of or concerning the plaintiff's goods or business; publication of that statement by the defendant to a third person; malice on the part of the defendant; and proof by the plaintiff of actual damage suffered as a result of the statement."

These elements were reinforced by the High Court in Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69 at [52] and more recently by the NSW Court of Appeal in Jay v Petrikas [2023] NSWCA 297 at [45].

Conclusion

Li v Liao [2025] NSWSC 168 provides invaluable guidance on the proper pleading of imputations in NSW defamation proceedings. The case emphasizes:

1. The distinction between published material and the imputations that arise from it

2. The requirement for imputations to be pleaded as substantive paragraphs, not merely particularized

3. The interpretation of "substantially the same" imputations in relation to Concerns Notices

4. The high threshold for striking out imputations

5. The necessity of properly pleading "serious harm"

For NSW legal practitioners, the case serves as a reminder of the technical requirements for properly pleading defamation cases, particularly following the significant 2020 amendments to the Defamation Act. Failure to properly plead imputations can result in a Statement of Claim being struck out, causing delay, additional costs, and potential limitations issues for clients.

As Justice Rothman concluded, while striking out a Statement of Claim identifies deficiencies in pleadings, it provides plaintiffs with an opportunity to replead their case to overcome these deficiencies—provided they adhere to the limitations and requirements set out in the NSW Defamation Act and associated case law.

Assessing the Extent of Publication in Defamation Cases: Lessons from Newman v Whittington

Introduction

In the digital age, defamatory content can potentially reach vast audiences across multiple platforms. However, proving the actual extent of publication remains a critical and often challenging element in defamation proceedings. The recent New South Wales Supreme Court decision of Newman v Whittington [2025] NSWSC 275 provides valuable insights into how courts approach this issue. In this case, a family dispute resolution practitioner, Jasmin Newman, successfully sued Adam Whittington for defamatory publications across WordPress, Facebook, and Twitter over a period spanning December 2019 to October 2021. The publications contained extremely serious allegations, including claims that the plaintiff supported paedophiles, had committed fraud, and falsely claimed professional qualifications.

The Relevance of Extent of Publication in Defamation

The extent of publication is a key consideration in assessing damages in defamation cases. As noted in Ali v Nationwide News Pty Ltd [2008] NSWCA 183, damages in defamation serve three overlapping purposes: consolation for personal distress, reparation for harm to reputation, and vindication of the plaintiff's reputation. When determining an appropriate award, courts must consider both the inherent seriousness of the imputations and their reach.

The "grapevine effect" is also relevant - this recognizes that "the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published" (Hoser v Pelley [No 3] [2023] VSCA 257 at [221]; Crampton v Nugawela (1996) 41 NSWLR 176, 194-195). However, while some harm is presumed in defamation, "the extent of that harm is not" (Eppinga v Kalil [2023] NSWCA 287 at [100]).

Challenges in Assessing Online Publications

Newman v Whittington highlights several challenges in assessing the extent of publication in the digital realm:

1. Distinguishing between potential and actual readership: Chen J was careful to distinguish between the potential reach of publications (as indicated by follower counts) and evidence of actual consumption of the content. The court noted that "the number of followers demonstrates the potential 'readership' of each particular 'post'," but was "unable (and unwilling) to make any firm finding about actual 'readership'" (at [164]).

2. Interpreting social media metrics: The case demonstrates the difficulty in interpreting online engagement metrics. For instance: "although there are those number of interactions, it is not known whether one person simultaneously 'liked, commented and shared' this post" (at [160]). Such ambiguities make it challenging to determine precisely how many individuals engaged with defamatory content.

3. Relevance to the plaintiff's community: The court considered whether the defamatory material reached individuals within the plaintiff's professional sphere or community, noting "there was no evidence establishing that anyone within the plaintiff's professional field (or in any area related to, or in any way connected with, it) read any of the defamatory publications" (at [169]).

How Courts Assess Extent of Publication

In Newman v Whittington, Chen J took a nuanced approach to assessing publication extent:

1. Social media interactions: The court examined specific evidence of engagement such as likes, comments, shares, and retweets across different platforms. However, the court was cautious about drawing conclusions about actual readership from these metrics alone.

2. Follower numbers: While acknowledging that follower counts indicate potential reach (some platforms had 19,000-24,000 followers), Chen J recognized that this doesn't necessarily translate to actual readership.

3. Geographic relevance: The court considered whether interactions came from the plaintiff's community or jurisdiction, noting that Australian interactions "were extremely limited and, for many of the matters, there were none" (at [167]).

4. Practical approach: Acknowledging the limitations in the evidence, the court took a pragmatic approach: "the plaintiff has not persuaded me that the 'readership' (that is, the extent of the publication) was most likely anything other than limited, albeit with some – essentially unquantifiable – potential for it to be greater" (at [171]).

Damages and Extent of Publication in Newman v Whittington

Despite finding that the actual readership was likely limited, Chen J awarded Ms. Newman substantial damages of $160,000. This consisted of $150,000 for non-economic loss (including aggravated damages) plus $10,000 in interest. This award reflects several important considerations:

1. Inherent seriousness of imputations: The court found that the imputations (particularly those suggesting the plaintiff supported paedophiles) were "grave or extreme imputations" (at [108]). The seriousness of these allegations appears to have outweighed the relatively limited evidence of wide publication.

2. Prolonged harm: The court noted that the harm was "prolonged and intensified by the absence of any apology by the defendant, that the defamatory matters were never retracted... and have been persisted in during the course of these proceedings" (at [176]). The defendant continued publishing defamatory material about the plaintiff even after proceedings commenced.

3. Grapevine effect: Despite limited evidence of wide publication, the court allowed for the grapevine effect, accepting that "by the ordinary function of human nature, the dissemination of defamatory material is rarely confined to those to whom the matter is immediately published" (at [177]).

The court's substantial damages award, despite limited evidence of widespread publication, suggests that the inherent seriousness of imputations and the defendant's conduct can significantly outweigh limited publication evidence when the defamatory material is particularly egregious.

Practical Implications for Defamation Practitioners

This case offers several practical lessons for defamation practitioners:

1. Evidence of actual readership: Courts want specific evidence about who actually consumed the defamatory material, not just potential reach. Merely establishing follower numbers may be insufficient.

2. Relevant readership: Focus on demonstrating that the defamatory material reached people in the plaintiff's professional or personal community, where reputation damage would be most significant.

3. Interpreting online metrics: Be prepared to explain what social media metrics actually indicate about readership, and acknowledge their limitations as evidence of publication extent.

4. Proportionate approach: Courts recognize the practical difficulties in precisely quantifying online readership. In Newman, Chen J adopted a realistic view that, while actual readership was likely limited, there remained potential for wider dissemination through the "grapevine effect" (Belbin v Lower Murray Urban and Rural Water Corporation [2012] VSC 535 at [217]).

5. Remedies beyond damages: The court also granted permanent and mandatory injunctions requiring the defendant to remove all defamatory content from his online platforms and restraining him from publishing similar content in the future. These remedies are particularly important in online defamation cases where the potential for ongoing harm exists.

Conclusion

Newman v Whittington illustrates that while courts acknowledge the potential for wide dissemination of defamatory material online, they require concrete evidence of actual readership when assessing damages. Nevertheless, where imputations are particularly serious and the defendant's conduct is egregious, substantial damages may be awarded even with limited evidence of widespread publication.

For defamation practitioners, this reinforces the need to focus on both the inherent gravity of the defamatory imputations and, where possible, evidence of actual readership within communities that matter to the plaintiff's reputation. As online defamation cases continue to proliferate, the approach to assessing publication extent established in cases like Newman v Whittington will remain crucial to securing appropriate compensation for reputational harm.