SC1132

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA. NO. 161 OF 2009

BETWEEN:

CYRIL MUDALIGE,
ACTING PRINCIPAL SHIPS SURVEYOR & SAFETY OFFICER
Appellant

AND:

RABAUL SHIPPING LIMITED
First Respondent

AND:

PETER ROBERT SHARP
Second Respondent

Waigani: Davani J, David and Sawong, JJ.
2010: 26 October
2011: 2nd September:

DECISION

DEFAMATION – Defences – Fair comment – Truth – Qualified privilege: Publication made in good faith for the public benefit – Defamation Act (Ch. No. 293), Section 9 (1)(b), Section 10, Section 11(1)(h).

Facts

In November 2002, the first respondent purchased a 30 year old steel vessel MV Morobe Queen in Japan and sought provisional registration from the Papua New Guinea Shipping Registry. In response, the Appellant wrote to the relevant Japanese authorities saying inter alia and concerning the respondents that "the owners had very bad records in maintaining vessels…this authority is short of surveyors to survey such vessels…It is requested …Inspector in Hiroshima to check and verify condition of the vessel before it departs Japan…" 

The respondents claim that this was defamatory of them. In the proceedings, the defendants claim defences of fair comment under Section 9(1)(b), of truth under Section 10 and that although the statements were prime facie defamatory, the statements were privileged under Section 11(qualified privilege) of the Defamation Act. 

The trial judge found these statements prime facie defamatory of the respondents and found that the statutory defences of fair comment, truth and privilege were not proved by the appellants. The appellants have appealed against that finding of liability.

Held:

1.	(Per Davani J at [32], David J concurring and Sawong J at [17]) - The Court's first task is to consider whether publication was made on a protected occasion, before proceeding to consider whether it was made in good faith;

2.	Per Davani J at [55] David J concurring and Sawong J at [22] - The trial judge failed to determine if the defamatory statement was protected or the occasion privileged;

3.	(Per Davani J at [44) - In the defence of truth, it is for the appellant to prove the allegations are true, not that the proof is contained in the document containing the allegations;

4.	(Per Davani J at [48-49]) - The Defence of Truth and the Defence of Fair Comment are separate and distinct defences and the Defence of Truth must be considered on its own before considering the Defence of Fair Comment;

5.	(Per Davani J at [53]) - To obtain the protection of s.11 of the Defamation Act the publication must be made in good faith, without malice, acting honestly on reasonable grounds believing that what is published is true and necessary for the purpose of his redress of a wrong to him or her for the public good or interest;

6.	(Per Davani J at [62] O8 r31 and O8 r87 must be read together - The trial Court should not venture into a consideration of malice unless it is specifically pleaded as "malice in fact" or "malice in law".

7.	(Per Davani, David and Sawong JJ) - Appeal upheld, orders of the National Court quashed.

Cases Cited:

Papua New Guinea Cases:

David Lambu v Paul Paken Torato (2008) SC593
Henzy Yakam v Steward Hamilton Merriam and Carol Merriam (No.2) (1999) SC 617
PNG Aviation Services Pty Ltd v Sir Michael Somare [1996] PGNC 62; N1493
Rimink Pato v Umbu Pupu [1986] PNGLR
Wyatt Gallagher Bassett (PNG) Ltd v Diau [2002] PNGLR 51

Overseas Cases Cited

Adam v Ward [1916-17] All ER Rep 159
Eyre v New Zealand Press Association Ltd [1978] NZLR 736
London Artist Ltd v Littler [1968] 1 WLR 607 
Pullman & Anor v Walter Hill & Co Ltd (1891) 1 QB 524
Watt v Longsdon [1930] 1 KB 130

Text referred to: 

Gatley on Libel and Slander (8th Ed. 1981) 
Supreme Court Practice 1985
The Law of Defamation in Australia and New Zealand

Statutes

Defamation Act (Ch. No. 293).

Counsel:

Mr Keith Iduhu, for the Appellant
Ms Jacqueline Marubu, for the Respondents 

2nd September, 2011

1.	DAVANI .J. This is an appeal against the National Court's decision of 23rd October, 2009, where the Court found the appellant liable for defamation. The hearing on the assessment of damages has yet to take place.

2.	In the National Court proceedings WS 20 of 2005, the appellant was alleged to have defamed the respondents by a letter to the Ministry of Land and Infrastructure and Transport in Tokyo, Japan, letter dated 26th November, 2002. 

3.	In its Defence, the appellant pleaded the Defence of fair comment, truth and qualified privilege.

4.	I note also that in the National Court proceedings, the Independent State of Papua New Guinea was named as the second defendant and Cyril Mudalige, the first defendant. The Office of the Solicitor-General filed a Defence in this matter on 28th January, 2005. In this appeal, only Cyril Mudalige is named as the appellant. The Court was not informed of the events that occurred in the Court below that saw the removal of the State as a party to the proceedings. Relying on the good records before me, I note that Cyril Mudalige is the only appellant in these proceedings.

5.	I raise this because it is relevant to the issue of costs, depending on the outcome of this appeal.

Background

6.	The background to this matter is conveniently set out by my brothers David and Sawong .JJ. Therefore, I need not set that out. 

7.	However, it is relevant and necessary that I set out the evidence which the appellant had put before the trial judge, in relation to the first and second respondents record, as it were, in the proper maintenance of ships. I do this because it is these facts that the appellant relied on, to raise and maintain his Defences. 

8.	The evidence in the Court below revealed that the respondents owned several other vessels which had sunk and which sinking prompted the conduct of several investigations. 

9.	The appellant's involvement in this matter is by virtue of his being the Acting Principal Ships Surveyor at the time of his sending the letter of 26th November, 2002, to Japan. 

10.	The appellant is a qualified Seagoing Marine Engineer. In 1979, he passed the certificate of competency first class motor UK Department of Trade and Transport. He is a member of the Institute of Marine Engineers in the UK and has sailed in the capacity of Chief Engineer and 2nd Engineer on bulk carriers and container carriers all over the world.

11.	From 1991 to 1995, he was the Marine Superintendent in Colombo, Sri Lanka and was in charge of dry docking. 

12.	In 1996, he was recruited by the Department of Transport, Papua New Guinea, as a Marine Engineer Surveyor/Examiner based in Madang. Upon his promotion to Acting Principal Ships Surveyor of the Department of Transport, he was in charge of the Ships' Safety Inspections and Surveys section of the Maritime Safety Branch. As delegate of the Safety Officer, who was the Secretary to the Department of Transport, his responsibilities were to ensure that the safety standards on ships were maintained and conditions on ships improved for the safety and lives of both the crew and passengers. His responsibilities were also to prevent pollution to the marine environment. Since that time, he has surveyed and inspected nearly 50 ships annually. (Pars.1, 2, 5 of Cyril Mudalige's affidavit, sworn on 15th May, 2009) (pgs. 37 to 38 of Appeal Book). These facts are not disputed.

13.	The evidence is also that the appellant has surveyed several vessels including those owned by the respondents. The vessels that the appellant makes particular reference to are the MV Kris and MV Saracen. These investigations occurred after the MV Kris sunk in 1994 with the loss of 8 lives. The MV Saracen sank in 1993 where 10 lives were lost. Another vessel MV Morima Trader sank on 24th December, 2001. No lives were lost. The MV Kondor, another vessel that the appellant inspected and which inspection revealed that the vessels Safety Survey Certificate had expired on 24th October, 2001 and that although the first respondent was advised not to operate the ship as it needed urgent docking and heavy upgrading equipment, that the first respondent continued to operate the MV Kondor without complying with the advice given to him by the appellant. It was not until 2nd April, 2002, that a passenger who had arrived in Port Moresby from Rabaul on the MV Kondor, complained that the MV Kondor was in a very bad state. This was when the appellant and several other officers attended upon and conducted an inspection of the MV Kondor and noted that it had not been repaired and/or maintained as per the appellants instructions to the respondents and that the condition of the ship's hull "was still very bad if not worse". (See par.19 of appellant's affidavit sworn on 15th May, 2009 at pg.37 of Appeal Book). The appellant noted that the vessel was heavily corroded with no less than 7 holes in its bottom. That it had literally taken in water when it took on board the 120 passengers to sail from Rabaul to Port Moresby. The Department of Transport then issued a stop order dated 23rd April, 2002 and directed that the first respondent carry out those substantial repairs (pars.8 to 22 of the appellants affidavit sworn on 15th May, 2009 and filed on 19th May, 2009 at pgs.36 to 40 of Appeal Book).

14.	That on or about April, 2002, the US Coast Guard detained the MV Kavieng Queen in Guam. This was another vessel owned by the first respondent which was on its way from Guam to PNG. Whilst still in Guam, the US Coast Guard found that the MV Kavieng Queen "did not meet the necessary safety requirements and was operated in a very unsafe manner" (par.24 of appellants affidavit sworn on 15th May, 2009 and filed on 19th May, 2009 at pg.40 of Appeal Book). On 1st April, 2002, the US Coast Guard issued a detention order to the MV Kavieng Queen which is attached to the appellants affidavit as Annexure "G1". Annexure "G2" is the appellants letter to the US Coast Guard dated 5th April, 2002. In that letter, the appellant acknowledged the deficiencies pointed out by the US Coast Guard's detention order. Deficiencies noted in the US Coast Guards detention order and which I summarise are;

-	improper hull markings. 

-	fifty-two, 200 litre diesel fuel drums located on the main deck and in the vessel; two, 1000 litre fuel drums. Also there were three, 2000 litre diesel fuel bladders. The US Coast Guard recommended corrective action which included no smoking, cooking or use of open flames on the boat.

-	life jackets without retro-reflective material and water lights.

-	open flame LPG/LNG portable cook stove, located 5 metres away from the 200 litre drums containing diesel.

-	4 ring buoys had deteriorated. 

-	hole in aft quarter hull allowing ingress of water into the vessel. Temporary attempts at repairing it had failed.

-	vessel unable to provide information in relation to life rafts and its release devices

-	ring buoys water lights not working.

-	crew unable to produce original Certificates of Registry and other relevant flag State documents such as Merchant mariner licenses, radio certificates, etc, to the US Coast Guard for examination.

-	photocopy of vessels' Provisional Certificates of Registry showed the hull material to be made of steel, however on actual physical examination, revealed that it was fibre glass reinforced plastic. That the Department of Transport in Papua New Guinea had issued a provisional certificate of registration without first physically examining the vessel.

(pgs.202 to 204 of Appeal Book).

15.	Additionally, at trial, there was extensive evidence on the deplorable and unseaworthy condition of the vessels the MV Kris, MV Saracen and MV Kondor. MV Kondor, more particularly, is a vessel that was in dire need of repairs but which was still sailing. This evidence was before the trial judge in the form of coloured photographs attached to the appellant's affidavit (pgs.176 to 200 of the Appeal Book) and which are;

i.	The vessel was covered with rust (pg.169).

ii.	Corroded areas of the forefront with a suspected hole (pg.180).

iii.	Corroded engine room floor frames (pg.181).

iv.	Corroded engine room structural frames (pg.192).

v.	Cut away bottom holed plating below engine room floor frames badly corroded and wasted. Major repairs to be effected to renew all engine room frames (pg.183, etc).

vi.	Passenger deck hold indicating excessive effect of rust (pg.184).

16.	It was in light of these facts and others not before us, that prompted the appellant to send the said letter to the authorities in Japan.

Grounds of appeal

17.	I restate below, a summary of the grounds of appeal.

18.	In respect of the Defence of Truth, the learned trial judge erred;

(a)	In fact and in law in finding that there was no evidence establishing the statement complained of as "fact" when there was sufficient evidence to substantiate or infer the truth of the appellants statement that the respondents "had a very bad record in maintaining vessels".

(b)	In his application of the law, when he did not consider separately the appellants submission in relation to the Defence of Truth and the Defence of Fair Comment and when he wrongly held that the former was dependent upon the latter, thereby failing altogether to consider the Defence of Truth on its own merits.

19.	In respect of the Defence of Qualified Privilege and Excuse, the learned trial judge erred in fact and law in finding that;

(a)	There was no factual foundation or basis for the appellants "allegations" when he was required to and ought to have merely ascertained whether the appellant was acting upon an honest and reasonable belief that the subject of the publication was true and necessary for the purpose of addressing a public interest or good; and

(b)	The statement made by the appellant had been by malice notwithstanding that the respondents had failed procedurally to file and serve the prerequisite Reply pleading particulars of the facts and matters from which the malice ought to have been inferred, thereby pre-empting the appellant from adequately responding to any allegations of malice.

Analysis of evidence and the law

20.	The elements to be proven in a defamation case are succinctly put by Cannings .J in David Lambu v. Paul Paken Torato (2008) SC593, where he said;

"As for defamation, the elements required to sustain a cause of action are that:
•	the defendant made a defamatory imputation of the plaintiff;
•	the defendant published it;
•	the publication was unlawful (i.e it was not protected, justified or excused by law)."

21.	Are the contents of the letter the subject of these proceedings, protected, justified or excused by law? I will answer this question by dealing with and responding to the issues posed before this Court.

22.	The appellant covers all the grounds of appeal by the issues he posed to the Supreme Court which are in two parts and which are;

Issues

(i)	Whether or not in the exercise of his discretion, His Honour the trial judge should have;

(a)	independently considered the first appellants evidence more carefully when considering the Defence of Truth independent of his conclusion in the Defence of fair comment; 

(b)	disregarded the respondents contentions of malice in the absence of proper pleadings in the form of a Reply.

23.	Is the appellant correct in his stipulations that the letter is protected, justified or excused by law?

24.	For that to occur, the Defences stipulated in the Defamation Act 1962 must be specifically pleaded and proven on the balance of probabilities. In the appellants Defence filed on 28th January, 2005 by the Acting Solicitor-General, the appellant pleaded good faith, truth, fair comment, public good and basically, to make known to the Japanese authorities the respondents bad record. The National Court Rules ('NCR') and the Defamation Act 1962 provide for these Defences and how they should be pleaded. 

25.	Order 8 Rule 85 and 86 of the NCR reads;

"85. 	Protection, justification and excuse
A defendant shall specifically plead any defence of protection, justification or excuse of law."

"86. 	Particulars of Defence

(1)	Where a defendant pleads fair comment (whether by way of rolled – up plea or otherwise), the particulars required by rule 29 shall include – 

(a)	if, as the basis or part of the basis for the comment, he relies on facts not stated in the matter complained of – particulars stating those facts; and

(b)	if, as the basis or part of the basis for the comment, he relies on facts stated in the matter complained of - particulars stating which words in the matter complained of, he alleges are statements of fact and on which of those alleged statements he so relies; and

(c)	particulars of the facts and matters on which he relies to establish the truth of the facts on which he relies as the basis for the comment.

(2)	Where a defendant pleads truth and public benefit, the powers of the Court under rule 36 shall extend to orders in relation to particulars of the facts and matters on which he relies to establish – 

(a)	that the publication was made for the public benefit; and
(b)	that the matter complained of was true."

26.	Section 8 of the Defamation Act 1962 provides for instances when it is lawful for publication of information for the public. That provision reads; 

"8.	Protection: reports of matters of public interest

(1)	In this section, "public meeting" means a meeting lawfully held for a lawful purpose, and for – 

(a)	the furtherance or discussion in good faith of a matter of public concern; or

(b)	the advocacy of the candidature of a person for a public office, whether admission to the meeting is open or restricted.

(2)	For the purposes of this Act, it is lawful to publish in good faith for the information of the public – 

(a)	a fair report of the proceedings of the Parliament or of a Committee of the Parliament; or

(b)	a copy of, or an extract from or abstract of, a paper published by order of or under the authority of the Parliament; or

(c)	a fair report of the public proceedings of a court, whether the proceedings are preliminary, interlocutory or final, or of the result of any such proceedings, unless – 

(i)	in the case of proceedings that are not final – the publication has been prohibited by the court; or

(ii)	in any case – the matter published is blasphemous or obscene, or publication is prohibited by law; or

(d)	a fair report of the proceedings of an inquiry held under a law, or by or under the authority of the Head of State, acting on advice, or an extract from or abstract of any such proceedings, or a copy of, or an extract from or abstract of, an official report made by the person by whom the inquiry was held, or

(e)	at the request of – 

(i)	a Department of the Public Service; or
(ii)	a prescribed instrumentality of the Government; or
(iii)	a commissioned officer of the Police Force,

a notice or report issued by the Department, instrumentality or officer for the information of the public; or

(f)	a fair report of the proceedings of a local authority, board or body of trustees or other persons, duly constituted under a law, or by or under the authority of the Head of State, acting on advice, for the discharge of public concern; or

(g)	a fair report of the proceedings of a public meeting, so far as the matter published relates to matters of public concern.

(3)	For the purposes of this Act, a publication is made in good faith for the information of the public if the person by whom it is made is not actuated in making it by ill will to the person defamed or by any other improper motive, and if the manner of the publication is such as is ordinarily and fairly used in the publication of news.

(4)	In the case of a publication of a report of the proceedings of a public meeting in a periodical, it is evidence of want of good faith for the purposes of this Act if the proprietor, publisher or editor has been requested by the person defamed to publish in the periodical a reasonable letter or statement by way of contradiction or explanation of the defamatory matter, and has refused or neglected to published it."

27.	Section 9 of the Defamation Act 1962 provides for the Defence of fair comment. It reads;

"9.	Protection: fair comment

(1)	For the purposes of this Act, it is lawful to publish a fair comment –

(a)	respecting any of the matters with respect to which the publication of a fair report in good faith for the information of the public is declared to be lawful by Section 8; or

(b)	respecting –

(i)	the public conduct of a person who takes part in public affairs; or 

(ii)	the character of any such person, so far as his character appears in that conduct; or

(c)	respecting –

(i)	the conduct of a public officer or public servant in the discharge of his public functions; or

(ii)	the character of any such person, so far as his character appears in that conduct; or

(d)	respecting –

(i)	the merits of a case, civil or criminal, that has been decided by a court; or

(ii)	the conduct of a person as a Judge, magistrate, party, witness, lawyer or officer of the court, in any such case; or

(iii)	the character of any such person, so far as his character appears in that conduct; or

(e)	respecting – 

(i)	a published book or other literary production; or

(ii)	the character of the author, so far as his character appears by the book or production; or

(f)	respecting – 

(i)	a composition or work of art or performance publicly exhibited; or

(ii)	the character of the author or a performer or exhibitor, so far as his character appears from the matter exhibited; or

(g)	respecting – 

(i)	any public entertainment or sports; or

(ii)	the character of a person conducting or taking part in any public entertainment or sports, so far as his character from the matter or the manner of conducting the entertainment or sports; or

(h)	respecting a communication made to the public.

(2)	Whether a comment is or is not fair within the meaning of this Act is a question of fact.

(3)	If a comment is not fair, and is defamatory, the publication of it is unlawful."

28.	The Defence of Truth is set out in s.10 of the Defamation Act 1962 chapter 293. It reads;

"10.	Protection: Truth 

(c)	For the purposes of this Act, it is lawful to publish defamatory matter if it is true, and if it is for the public benefit that the publication complained of should be made."

29.	Section 11 of the Defamation Act 1962 provides for the Defence of good faith. It reads;

"11.	Qualified protection: excuse

(1)	For the purposes of this Act, it is a lawful excuse for the publication of defamatory matter if the publication is made in good faith –

(a)	by a person having lawful authority over another in the course of a censure passed by him on the conduct of the other person in matters to which the lawful authority relates; or

(b)	for the purpose of seeking remedy or redress from some private or public wrong or grievance from a person who has, or whom the person making the publication believes on reasonable grounds to have, authority over the person defamed with respect to the subject matter of the wrong or grievance; or

(c)	for the protection of the interest of the person making the publication or of some other person, or for the public good; or

(d)	in answer to an inquiry made of the person making the publication relating to a subject as to which the person by whom or on whose behalf the inquiry is made has, or is believed on reasonable grounds by the person making the publication to have, an interests in knowing truth; or

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

(f)	on the invitation or challenge, express or implied, of the person defamed; or

(g)	in order to answer or refute some other defamatory matter published by the person defamed concerning the person making the publication or some other person; or

(h)	if the course of, or for the purposes of, the discussion of some subject of public interest, the public discussion of which is for the public benefit, and if, so far as the defamatory matter consists of comment, the comment is fair.

(2)	 For the purpose of this section, a publication is made in good faith if – 

(a)	the matter published is relevant to the matters the existence of which may excuse the publication in good faith of defamatory matter; and

(b)	if the manner and extent of the publication do not exceed what is reasonably sufficient for the occasion; and

(c)	if the person by whom it is made –

(i)	is not actuated by ill-will to the person defamed, or by any other improper motive; and

(i)	does not believe the defamatory matter to be untrue."

30.	As to the burden of proof where a party claims good faith, Section 12 of the Defamation Act 1962 states that the burden of proof of "absence of good faith" lies on the party "alleging the absence." It reads;

"12.	Good faith

Where a question arises as to whether a publication of defamatory matter was or was not made in good faith, and it appears that the publication was made in circumstances that would afford lawful excuse for the publication if it was made in good faith, the burden of proof of the absence of good faith is on the party alleging the absence."

(i)	Defence of truth

31.	The appellant submits that in relation to the first issue, two basic elements must be proven in order for the Defence of Truth to be established. These are:

-	the statement complained of as being defamatory must be true;

-	the defamatory statement must be published for the benefit of the public.
(my emphasis)

32.	I agree with my brothers David and Sawong .JJ that the Courts first task is to determine whether the publication was made on a protected occasion, that is, whether the alleged defamatory statement is protected or not before proceeding to consider the challenge of good faith (see PNG Aviation Services Pty Ltd v. Sir Michael Somare [1996] PGNC 62 N1493) and as in this case, the Defence of fair comment. They say the trial judge has erred because he failed to do that.

33.	Apart from what my brothers have said about the trial judge failing to consider whether the publication was made on a protected occasion, I note that my brothers also conclude, that this is the first or the preliminary issue that must be considered in any defamation claim and that if the trial judge did not consider that aspect, that he has erred and the National Courts decision can be set aside on that basis alone. With respect, I am of the view that depending on the defamatory material before the Court, the Court can proceed to consider a plaintiffs claim without drawing a line as to where to stop. That was the step taken by Sheehan .J in PNG Aviation Services Pty Ltd (supra). He considered all Defences raised by the defendants and all points of law as put to him by the plaintiff. He did not conclude or make findings after considering only one aspect of a Defence in defamation or an element in defamation.

34.	In fact, Sheehan .J made the comments my brothers refer to after considering s.8 of the Defamation Act 1962 (Protection/Public interest), s.9 of the Defamation Act 1962 (Fair comment) and then he went on to s.11 of the Defamation Act 1962 (Qualified Protection) when the comments referred to by my brothers were made.

35.	Therefore, if a trial judge finds that there are valid Defences raised and must be considered, he must do so. I too adopt the approach taken by Sheehan .J.

36.	The letter, the subject of the defamation claim, reads as follows;

"MV MOROBE QUEEN/KOFUJU MARU 25

Above vessel is reportedly purchased by PNG ship owner and is in the process of bringing same to the country.

We had asked him to class the vessel before he bring it to this country due to:-

1.	Vessel is 30 years old and going to ferry passengers amounting to 360 in Papua New Guinea.

2.	Owners had very bad records (sic) in maintaining vessels.

3.	This Authority is short of surveyors to survey such vessels.

Owner has disagreed on our advice. It is requested to advise the Port State Control Inspector in Hiroshima to check and verify the condition of the vessel before it departs Japan. Owner has not produced thickness gauging of the vessel or last dry dock report.
Expecting your fullest co-operation in this regard.

(Signed)		
CYRIL MUDALIGE
A/Principal Ships Surveyor
& Safety Officer."

37.	In relation to the Defence of Truth, the respondents submit that the appellant had failed to make out this Defence in the Court below and that the Trial Judge's findings were correct. In Gatley on Libel and Slander, Eleventh Edition, para.11.3, the author states that a defamatory imputation is presumed to be false and the burden is upon the defendant to prove that it is substantially true. Gatley (supra) states further at par.11.8;

"It is the imputation contained in the words which has to be justified, not the literal truth of the words, nor some other similar charges not contained in the words."

38.	The text "The Law of Defamation in Australia and New Zealand" by Michael Gillooly B.A LLB(Syd) LLM (WAust), quotes Rofe v. Smiths Newspapers (1924) 25 SR (NSW) 4 at pg.104 (of the text), where Street ACJ in Rofe v. Smiths Newspapers (supra) said;

"In England, it is a complete answer to a civil action that the defamatory matter complained of was true. The reason upon which this rule of law rests, as I understand, is that, as the object of civil proceedings is to clear the character of the plaintiff, no wrong is done to him by telling the truth about him. The presumption is that, by telling the truth about a man, his reputation is not lowered beyond its proper level, but is merely brought down to it...".

(my emphasis)

39.	How did the trial judge deal with the evidence placed before him by the appellant, to substantiate his assertions and claims that the letter he sent to the Japanese Maritime authorities was based on correct true facts and that it was made for the benefit of the public? I set out below extracts of evidence in the Court below as taken from the transcripts.

40.	The letter written by the appellant, as he said in evidence, was to alert the authorities in Japan to the fact that the vessel they were to purchase was over 30 years old and its seagoing ability had deteriorated. As the appellant said in evidence at trial when cross-examined by the respondents lawyers;

"...my knowledge and experience in this field, and also with the general knowledge in maritime field, that a vessel's life up to 30 years and above, the cost of maintaining grows rapidly as it deteriorates, the hull condition of the vessel rapidly. That is why we were deciding this about 30 years old. About or during Mr. Frank Wales 10 year of service, vessels were brought to the country only – he was allowing only 15, 20 years old.
...
At that time due to the country's economical situation, the country and the industry and also request from Mr. Sharp, we decided that we must get the bar lowered to a level where it is comfortable for ship owners. And that is why and had no other reason. So, yes, had that vessel been 20 years old for that, for example, we would not have queried anything. We would just say, please come. Because of the fact that the age of the vessel after 30 years deteriorates so fast that its element of risk is there."

(See pgs.341 and 342 of Appeal Book and pgs.33 and 34 of National Court Transcript of proceedings).

41.	Re examination of the appellant by his lawyer also revealed what the appellant believed to be the true facts in existence before and at the time of writing the letter. The transcripts read;

"Q:	...So your letter of 26th November 2002, in light of those purchases did not have a negative impact or did it?

A:	No, not to my knowledge.

Q:	Thank you. And when writing the letter, obviously in your line of work, you are a professional seaman. Is it true that your principle concern is the safety of crew.

A:	Yes, safety of the passengers and crew.

...

Q:	...Mr. Mudalige, what was the objective of this letter of 26 November to the Japanese authority? What did you want to achieve?

A:	The only thing I want to achieve is to avoid disasters on passengers. That is all and nothing else. And I have no malice against Mr. Sharp and that is all I can say.

Q:	So based on these reports and these other incidents of these other ships, did you honestly believe in the substance of what you wrote?

A:	Yes I do believe and by doing that, I find that the standard of Mr. Sharp's fleet especially passenger fleet has increased. This is what we want. And that is why – although I had traumatic situations, my conscious was clear. I was very happy with what has transpired and after that many improvements have been done for the ships and its operations."

(my emphasis)

(See pgs.344 and 345 of the Appeal Book and pgs.36 and 37 of the National Court Transcript of proceedings).

42.	Because the appellant spoke the truth about the respondents operations, that thereafter, the respondents worked towards improving the condition of their fleet, effectively that, as at the date of trial, the respondents had purchased 5 to 10 more vessels. That generally, the respondents have improved the way in which they ran their fleet, a fact the respondents did not deny at trial. (pg.343 of Appeal Book and pg.35 of National Court Transcript of proceedings).

43.	The trial judge himself conceded that the publication of the letter was for the publics benefit, concerning the plaintiffs conduct as a party who takes part in public affairs within the meaning of s.9(1)(b)(i) of the Defamation Act 1962 (pg.382 of Appeal Book).

44.	The trial judge was concerned that the words in the letter "owner had very bad records (sic) in maintaining vessels", did not have the facts in that letter to support that statement (my emphasis). With respect, this is a misconception by the trial judge. It is for the appellant to prove that those facts exist and I find that he did that, on the balance of probabilities. I discuss this further below.

45.	I find that the trial judge erred in his findings on the Defence of Truth, which facts he should have considered after consideration of the Defence of Fair Comment. I discuss this below under the heading 'Defence of Fair Comment'.

46.	I find the trial judge has erred in both law and fact.

(ii)	Defence of Fair Comment

47.	The appellant submits that the trial judge erred in law when he found that the Defence of truth was dependent upon the Defence of Fair Comment. This came about because the trial judge considered firstly the Defence of Fair Comment under which the criterion for establishing that Defence is the existence of facts which must be shown to be true and upon which the comment must be based. The trial judge found that for the defamatory imputation to be fair comment, the comment must be accompanied in the letter itself by a statement or evidence of the facts upon which the comment is based. The trial judge also found that although the appellant had gone on to adduce evidence that the defamatory imputation was based on facts, that the evidence was not sufficient to establish the facts to be relied upon to make the defamatory imputation. 

48.	I find that this is an error of law, as was found by my brothers, because under the Defamation Act 1962, the Defence of Fair Comment and the Defence of Truth are two complete, separate and distinct Defences and that the trial judge's findings on the Defence of Truth are, with respect, a misconception and are legally flawed. 

49.	The Defence of Truth must be considered on its own and before a consideration of the Defence of Fair Comment. It is not dependent on the criterion for the Defence of Fair Comment. The trial judge should have considered the Defence of Truth on its own merits, then later, consider the Defence of Fair Comment.

50.	I find the trial judge has erred in law.

(iii)	Qualified protection: excuse

51.	In his Defence, the appellant pleaded the Defence of lawful excuse under s.11 of the Defamation Act 1962. The appellant submitted in the Court below that he is protected within the ambit of s.11(1)(b)(c)(e) and (h) of the Act in that: 

(a)	The appellant was, by the request of the Tokyo authorities, only ensuring that a safety check was conducted under clause 3.1 of the Tokyo MOU, a document that was tendered into evidence, and which clause also sought compliance by the ship owners with and to safety inspection, classification and certification of the vessel to meet international safety standards considering the vessel was 30 years old when it was purchased (s.11(1)(b) of the Act).

(b)	The comments in the letter was for the protection of the crew and cargo who were to bring the vessel over from Japan and then again, for the protection of the public as they were to use the vessel for transportation and that there was a greater risk of deterioration of the vessel's hull (s.11(c) and (h) of the Act).

(c)	That the letter was published in good faith because amongst others, it was not actuated by ill-will and malice.

52.	In his appeal, the appellant pleads that the trial judge had erred in fact and in law when he found that:

(a)	There was no factual foundation or basis for the appellants allegations when he need only have ascertained that the appellant was acting on an honest and reasonable belief, that the subject of the publication was true and necessary for the purpose of addressing a public interest or good.

(b)	That the appellants statement was actuated by ill-will or malice even though the respondents had not pleaded this in his Reply, to give the appellant an opportunity to properly respond to it.

53.	In Wyatt Gallagher Bassett (PNG) Ltd v. Diau [2002] PNGLR 51, the Court found that the defendant did not act in good faith when it made statements it did not believe to be true, and that instead, he acted under malice. The Court was guided by Pullman & Anor v. Walter Hill & Co. Ltd (1891) 1QB 524 and Adam v. Ward [1916-17] All ER Rep 159 which cases stand for the ratio decidendi in respect of the Defence in s.11 of the Defamation Act 1962 that the publication must be made in good faith, acting honestly and on reasonable grounds believing that what is published is true and necessary for the purposes of his redress of a wrong to him or her or for the public interest or good (see Lord Atkinson at pg.173 in Adam v. Ward (supra)). The Supreme Court restated this with approval in Yakham v. Merriam (No.2) (1999) SC617.

54.	No doubt, the law of defamation recognizes that persons must be allowed to speak freely on occasions when they have a duty to do so or where it is justifiable in defence of some particular interest. But this does not mean that this immunity is an opportunity for abuse. The occasion must be used properly and in good faith. Lack of honest belief or improper use of the occasion can render the publisher or maker liable for defamatory statements (see PNG Aviation (supra) per Sheehan .J).

55.	However, that is not the case here. In this case, at the trial, the trial judge having already found the publication to be false, only reaffirmed in this part that the publication was based on false error. Indeed, this is an error on the law and facts.

Malice

56.	Was the publication actuated by ill-will or malice? The trial judge found that the appellant had malicious intentions because of contempt proceedings the respondents had filed against him, all done as a result of the ongoing "dispute" between the appellant and the respondents.

57.	However, I find that the respondents should not have relied on malice as their way of saying that publication was not in good faith because they did not plead malice in a Reply. Malice must be specifically pleaded. This is provided for in O.8 R.87 of the NCR, which reads;

"87.	Pleading and particulars; Want of good faith

Where a plaintiff intends to meet any defence by alleging that the publication of the matter complained of was not in good faith – 

(a)	the plaintiff shall plead that allegation by way of reply; and

(b)	the particulars required by Rule 29 in relation to the reply shall include particulars of the facts and matters from which the absence of good faith is to be inferred."

58.	The respondents should have filed a Reply pleading Malice and therein, include particulars of the malice. Order 8 Rule 87 of the NCR makes it mandatory that a Reply "shall" be filed if the plaintiff intends to meet any Defence.

59.	The respondents statement of claim filed on 17th December, 2004, of which there are 7 paragraphs, is silent as to the or any allegations of malice, thereby ruling out any "malice in law", which can be invoked by a Court where in his Statement of Claim, the plaintiff pleads that the defendant "falsely and maliciously published" or "falsely and maliciously spoke and published" the words complained of.

60.	The above statement is elaborated on and affirmed in the Supreme Court Practice 1985 vol.1 at pgs.1186 and 1187, which reads;

"But if the libel or slander is published without lawful excuse the law conclusively presumes that the publisher is actuated by that malice which gives the injured party a cause of action and accordingly (notwithstanding O.18 R.12(1)(b)) the plaintiff need not give particulars of the facts on which he relies in support of the allegations of malice. This is sometimes called "Malice in law". But if there is a lawful excuse for the publication (as for example, where it is an occasion of qualified privilege) by which the inference of law is prima facie rebutted, the onus is thrown upon the plaintiff of proving the existence as a fact of the malice necessary to maintain the action. The latter is sometimes called "malice in fact" or "express malice" (see e.g Harris v. Arnott (No.2) (1890) 26 L.R. lr p.75; Jones V Hutton [1909] 2 K.B 444 p.477) and the plaintiff must serve a Reply pleading malice and giving the particulars referred to in para.3 of this rule. The effect of malice in relation to a defence of a qualified privilege, for comment which may be fair in the mouth of one person may be actionable if published by a person actuated by malice (Thomas v Bradbury & Agnew Ltd [1906] 2 K.B. 627)".
(my emphasis)

61.	O.18 R.12(1)(b) referred to in the above quotation, is the equivalent of the NCR's O.8 R.31, which reads;

"31.	Condition of mind

(1)	A party pleading any condition of mind shall give particulars of the facts on which he relies.

(2)	In Subrule (1), "condition of mind" includes any order or disability of mind, any malice and any fraudulent intention, but does not include knowledge."
(my emphasis)

62. Obviously, O.8 R.31 and O.8 R.87 of the NCR must both be read together in this instance. Any Trial Court should not venture into consideration of "malice" if it is not before it as "malice in fact" or "malice in law", either as specific pleading in a Statement of Claim or in a Reply.

63. I find the trial judge erred in both law and fact when he held that the appellant's actions were actuated by malice.

Conclusion

64.	The appellant's grounds of appeal have all been made out. I will uphold all grounds of appeal. 

Formal Orders

65.	My formal orders are;

(1)	The appeal is upheld;

(2)	The Kokopo National Court's decision of 23rd October, 2009, is quashed;

(3)	The first and second respondents shall pay the appellant's costs of this appeal and the costs of the National Court proceedings WS 20 of 2005, to be taxed if not agreed.

66. DAVID, J: 	I have had the opportunity to peruse the draft judgments and reasons for decision by both Her Honour Davani .J and Sawong .J. I agree with the conclusion reached and the reasons for this, and have nothing further to add.

67. SAWONG, J: This is an appeal against the decision of the National Court sitting at Kokopo on 23rd October, 2009 which found the appellants liable for defamation.

68. The first appellant Mr. Mudalige is the acting principle ships surveyor and safety officer with the Department of Transport and Civil Aviation's Maritime Division. The second appellant is the State who employed the first appellant.

69. The first respondent is a company duly registered under the Companies Act 1997 and carries on business in the shipping industry by operating a number of passenger and cargo vessels in Papua New Guinea. The second respondent is the Managing Director of the first respondent. 

70. They sued the defendants for an alleged defamatory statement made by the first appellant and published in a letter to the Ministry of Land Infrastructure and Transport in Japan. This letter is dated 26th November, 2002.

71. Prior to the 26th of November, 2002, the appellants learnt that the first respondent was purchasing a vessel named MV Morobe Queen formerly known as Kofuju Maru 25. They asked the second respondent to class the vessel before bringing it back to Papua New Guinea. The appellants request was impossible to comply with because the vessel was over 30 years old and if it was not classed, it would not be able to sail out of Japan under Papua New Guinean registration.

72. On 26th November, 2002, the first appellant in his capacity as acting Principal Ships Surveyor and Safety Inspector within the Department of Transport and Civil Aviations Maritime Division wrote the subject letter to the Japanese Ministry of Land, Infrastructure and Transports Maritime Bureau to seek its assistance in conducting an inspection, verification and certification with regards to its sea worthiness before it departed Japan for Papua New Guinea. The subject letter is the centre of the controversy between the parties in this action and is set out below in his entirety. It reads:

 "MV MOROBE QUEEN/KOFUJU MARU 25:-

Above vessel is reportedly purchased by PNG Ship owner and is in the process of bringing same to the country. 

We have asked him to class the vessel before he brings it to this country to:

1)	vessel is 30 years old and going to ferry passengers amounting to 360 in Papua New Guinea.

2)	Owners had very bad records (sic) in maintaining vessels.

3)	This authority is short of surveyors to survey such vessel.

Owner has disagreed on our advice. It is requested to advise the Port State Control Inspector in Hiroshima to check and verify the condition of the vessel before it departs Japan. Owner has not produced thickness gauging of the vessel or last dry dock report. Expecting your fullest cooperation in this regard. Signed Cyril Mudalige a/forward Principal Ships Surveyor and Safety Officer".

73. Paragraph 2.2 of the letter is the most contested of all. In the National Court the respondents said that because the statement carried the following imputation which were said to be defamatory. First that the plaintiffs had a very bad history of operating unsafe vessels, secondly that they had endangered lives of their employees and passengers by failing to maintain their vessels in a safe condition and thirdly, that they were reprehensible ship owners against whom the Japanese Authorities should take action and finally, that they proposed to sail from Japan to Papua New Guinea the MV Morobe Queen, knowing it to be unsafe thereby endangering its crew.

74. In their defense, the appellants claimed that the statement made in the letter was a fair comment, justified, truth and for public good, in that they were true and represented the character and the style of business operations of the plaintiffs. The appellants defended their statements based on certain defences provided in the Defamation Act (Ch. No. 293) namely, fair comment, truth and qualified privilege. However, the Trial Judge found that these defences were not proven by the appellants and found them liable for defamation. They have now appealed against this decision.

The grounds of appeal

75. There are two grounds of appeal and I set them out below in full:

(1)	In respect of the Defence of Truth, the learned trial judge erred:

(a)	In fact and in law in finding that there was no evidence establishing the statement complained of as "fact" when there was sufficient evidence to substantiate or alternatively reasonably infer the truth of the appellant's statement that the respondents "had a very bad record in maintaining vessels."

(b)	In his application of the law in omitting to consider the Appellant's submissions in respect of the Defence of Truth independent of the arguments raised in support of the Defence of Fair Comment and in effect wrongly holding that the former was dependent upon the latter, thereby failing outright to consider the Defence of Truth on its own merits.

(2)	In respect of the Defence of Qualified Privilege: Excuse, the learned trial judge erred in fact and law in finding that:

(a)	there was no factual foundation or basis for the appellant's "allegations" when he was required to and ought to have merely ascertained whether the appellant was acting upon an honest and reasonable belief that the subject of the publication was true and necessary for the purposes of addressing a public interest or good; and

(b)	the statement made by the appellant had been by malice made notwithstanding that the respondents had failed procedurally to file and serve the prerequisite Reply pleading particulars of the facts and matters from which the malice ought to have been inferred thereby pre-empting the appellant from adequately responding to any allegations of malice.

76. The grounds of appeal raised issues of law and facts. The principles governing the appalled court's power to review findings of fact made by the trial judge in a defamation case are found in a decision of this court in Rimbink Pato –v- Umbu Pupu [1986] PNGLR 3110 which was referred to in Henzy Yakam –v- Steward Merriam (1999) SC 617.

77. The grounds of appeal raised two essential issues. It appears to me that the only issue before the trial judge and before me is whether any of the defences raised at the trial were proved. I therefore posed the question as follows were the defenses of fair comment, truth or qualified privilege made out by the appellants.

78. I deal with ground 2 of the Notice of Appeal first for reasons that will become obvious. Ground 2 of the appeal is directed at the trial judge's rejection of the defense of qualified privilege under Section 11 of the Defamation Act No. 293.

79. Section 11 reads:

"Qualified Protection – Excuse

(1)	For the purposes of this Act, it is a lawful excuse for the publication of defamatory matter if the publication is made in good faith:-

(a)	by a person having lawful authority over another in the course of a censure passed by him on the conduct of the other person in matters to which the lawful authority relates; or 

(b)	for the purposes of seeking remedy or redress for some private or public wrong or grievance from a person who has, or whom the person making the publication believes on reasonable grounds to have, authority over the person defamed with respect to the subject-matter of the wrong or grievance, or

(c)	for the protection of the interests of the person making the publication or of some other person or for the public good; or

(d)	in answer to an inquiry made of the person making the publication relating to a subject as to which the person by whom or on whose behalf the inquiry is made has, or is believed on reasonable grounds by the person making the publication to have, an interest in knowing the truth; or 

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

(f)	on the invitation or challenge, express or implied, of the person defamed; or

(g)	in order to answer or refute some other defamatory matter published by the person defamed concerning the person making the publication or some other person; or

(h)	in the course of or for the purposes of, the discussion of some subject of public interest, the public discussion of which is for the public benefit and if, so far as the defamatory matter consists of comment, the comment is fair.

 (2) 	For the purposes of this section, a publication is made in good faith if –

(a)	 the matter published is relevant to the matters the existence of which may excuse the publication in good faith of the defamatory matter; and

(b)	 if the manner and extent of the publication and do not exceed what is reasonably sufficient for the occasion; and

(c) 	if the person by whom it is made –

(i)	Is not actuated by ill-will to the person defamed or by any other improper motive; and

(ii)	Does not believe the defamatory matter to be untrue."

80. The leading authority of this defence is the Supreme Court decision in Henzy Yakam & others v Stuart Merriam & others (1999) SC 617. Therefore the Court said at pp: 17 -19.

"c).	Qualified excuse: 	Statements made in Good faith for the public good (S.11 (1)(h).

The nature of the defence of qualified excuse or privilege under S. 11(1)(h) is succinctly summarized by Sheehan J in PNG Aviation Services Pty Ltd –v- Sir Michael Somare [1996] N1493 at p.29:

"It is for a Defendant to prove that the publication was made on a protected occasion and that the duty or interest relied on by the defamation excuse not just any publication he might make by the specific publication activities made. If the occasion is privilege or protected then prima faces any defamatory statements are excused. 

"The first task of the Court is to determine whether publication was made on such a protected occasion. This is largely a question of law, and what is actually said or the truth of it will not usually be relevant in determining whether the occasion was one of qualified protection…..But consideration of the facts and circumstances of publication including some which are also aspects of good faith, such a relevance or extent may also be necessary to determine if the occasion is protected. 

Essentially the Court upon deciding such facts as may be necessary, must decide whether an occasion carries protection or not, before proceedings to consider the challenge of lack of good faith. Such a procedure follows the common law and the intent of section 11."

At the outset we consider that the trial judge failed to consider the first issue of whether the occasion was privileged. 

This is a fundamental error. This error alone is sufficient to overturn the verdict but for purpose of clarity of the law on the subject of qualified protection or privilege, we will discuss the subject in some detail. (my emphasis).

In order for the occasion to be privileged, the communication must be made in pursuance of a duty or on a matter in which there was a common interest in the party making and the party receiving the communication: Adam –v-Ward [1916 -17] ALL E. R Rep. 157 at 162. Whether the communication is made in pursuance of a duty, the duty may be "legal, social or moral duty, to communicate it to the general public and it is the interest of the public that the publication should be made": London Artist Ltd –v-Littler [1968] 1 W.L.R 607 to 619. Where the duty is legal, it is not difficult to ascertain and this means the judges must do the best he can. As Scrutton L. J said in Watt –v- Longsdon [1930] 1 K.B 130 at 144:

"Also to legal duty, the judge should have no difficulty; the judge should know the law; but as to moral or social duties of imperfect obligation, the task is far more troublesome. The judge has no evidence as to the view the community takes moral or social duties. All the help the Court of Appeal can give him is contained in the judgment of Lindley L. J. in Stuart v. Bell [1891] 2Q.B. 341, 350: 

'The question of moral or social being for the judge, each judge must decide it as best he can for himself. I take moral or social duty to mean a duty recognized by English people or ordinary intelligence and moral, principle, but at the same time not a duty enforceable by legal proceedings, whether civil or criminal, 'Is the judge merely to give his own view of moral and social duty, though he thinks a considerable portion of the community hold a difference opinion? Or is he to endeavour to ascertain what view 'the great mass of right- minded men' would take? It is not surprising that with such a standard both judges can be drawn. The judge must, accordingly, do his best in the light of such evidence as he has, coupled with his own views as to what the defendant's duties, moral or social, were in the circumstances."…

Where the communication is made on a matter in which there was a common interest in the party making and the party receiving the communication, it is often said that there exists a community of interest between government officials and press to communicate information or public interest to the public and a reciprocal interest in the public to receive that information. 

Similar views are expressed by McGregor J in Eyre-v-New Zealand Press Association Ltd [1978] N.Z.L.R 736at 740 in these words:

"In determining what is a privileged occasion all the circumstances under which publication is made need to be considered for the purpose of determining whether privilege attaches or not (London Association for Protection of Trade-v- Greelands Ltd [1908] A.C. 390; [1908-10] ALL E.A Rep; 164). It is necessary that it should be shown that both the givers and receivers of the defamatory information as a matter of public policy in the general interests of the whole community that it should be made with impunity notwithstanding its defamatory nature (Ardreyevich –v-Kosovich [1974]47 (S.R.) N.S.W. 357 per John C.J at p. 363)"

81. In my view and according to the authorities set out above, the Trial Court must determine two matters in relation to this defence. The first is for the Trial Judge to make a determination if the defamatory statement was protected or privilege. If he finds that it was, then he must proceed to determine the next issue, that is, whether the defamatory statement was made in good faith or otherwise.

82. The authorities are clear that there are two parts to this defence. In the first part the trial Court is required to determine if the defamatory statement is protected or not, that is the first issue that must be determined. Failure to do so may be fatal to the judgment. See PNG Aviation Services Pty Ltd v. Michael Somare (supra); Henzy Yakam v. Stuart Merrian (supra).

83. In the Court below, the Trial Judge after setting out s.11 of the Act and after referring to some authorities proceeded and said at pp.34 -36: 

"In relying on this defence, the defendant's argument is that, the letter was given to the Minister of Lands Infrastructure & Transport in Japan to advise them of the plaintiffs' conduct in so far of maintaining their vessels are concern and for protection. I have no difficulty in accepting the argument that such authority, responsible for safety of ships' operations and its passengers is entitled to receive such a complaint from the defendants in their office capacity. But the question is, does this necessarily mean that they are or should be provided with complains that have no factual foundation or basis? In other words, does the right in a person to complain to such an authority entitled him or her to bring false and highly defamatory follow that people who provide such information are protected from criminal and or civil liabilities. 

In the present case, there is no dispute that the second plaintiff is a very experienced sailor having sailed and worked in the shipping industry for over 30 years in Papua New Guinea. There is therefore no doubt in my mind that the plaintiffs have built a good reputation and name in the shipping industry of this country. As I noted above, the statements that, the "Owner had very bad records (sic) in maintaining vessels", carried the following imputations which were defamatory. First, that the plaintiffs had a very bad history of operating unsafe condition, thirdly, that they were reprehensible ship owners against whom the Japanese authorities should take action and finally, that they proposed to sail from Japan to Papua New Guinea to MV Morobe Queen, knowing it to be unsafe, thereby endangering its crew. 

In my opinion, these are very serious and very damaging allegations. But there is not a shred of evidence as I have found above establishing these allegations. There is therefore, no factual foundation or basis for these allegations??....... 

84. Here the appellants submitted that the defamatory statement was made in good faith and for the public good. It was submitted that the learned trial judge erred in law and in fact in rejecting the appellant's defense when there was evidence by the appellants supporting their defenses.

85. The respondents on the other hand submit that the learned trial judge was correct in the way he found that the publication was not made in good faith but that the appellant was actuated by malice. It was submitted that his Honor having seen and heard the appellant, was well entitled to come to the conclusion as he did.

86. After careful reading of the relevant part of his judgment which I set out in paragraph 18 shows that the trial judge did not determine the first leg of the defence of qualified privilege. In other words, he did not determine if the defamatory statement is protected or the occasion was privileged. This is a fundamental error of law. 

87. It follows that the National Court judgment can not stand. I would therefore allow the appeal and quash the decision of the National Court. 

88. In view of my conclusion, it is unnecessary to consider ground 1 of the grounds appealed. 

_________________________________________

Fairfax Legal Group: Lawyers for the Appellant 
Warner Shand Lawyers: Lawyers for the Respondents