CHAPTER 13 -
SPECIAL SUBJECTS AND ISSUES
13.3
DEFAMATION AND QUALIFIED PRIVILEGE
Page 1 of 5
In
accordance with the aims of this book the examination of this
area of law concentrates on questions that arise when creditors
communicate with the administrator, other creditors and
regulatory authorities. Hence, except where their inclusion is
essential for a broad understanding of the subject, parts of the
law that are not likely to be relevant have been skimmed over or
left out. For the same reason the discussion focuses on the
doctrine of qualified privilege, because it, more than any other
feature of the law, offers creditors protection from actions for
defamation.
Some
people who hear of the massive amounts awarded for defamation
get nervous about publicly criticising others. Indeed, out of
fear and uncertainty people often refrain from revealing
information which is of vital interest to others. In insolvency
administrations this reticence can be a real and costly
hindrance, since administrators often look to creditors for
information which might lead them to assets.
Fortunately the law recognises the inherent dangers in
this situation:
"There are occasions when persons
should be at liberty to
express themselves freely even
if in doing so a third person
is defamed. Social and
commercial life would become
intolerable if no one were
ever protected in making a
statement reflecting upon
another unless he could prove that
statement to be true. There
are obviously occasions ... when
it is essential that a person
should be able to state
without fear of legal
consequences what he honestly believes
to be true".
It was largely to overcome these problems that
the doctrine of privilege developed.
13.3.1 Qualified privilege - an
introduction
For
"the common convenience and welfare of society" the law protects
untrue defamatory statements that are made on certain occasions.
For example, in the chamber of Parliament a member may say
anything about another person without having to establish that
it is true. Similarly, in courts of justice witnesses and others
involved may say whatever they like. This freedom or immunity is
called absolute privilege.
On
other, less important, occasions the same protection is
available for untrue defamatory statements, but with one
important qualification: the statements must serve the
legitimate purpose of the occasion. Hence they must not be
actuated by spite or ill-will or some other wrong or improper
motive. This is known as qualified privilege.
Qualified privilege, the protection it offers to creditors and
the variations in law throughout Australia are examined later in
this chapter (see xxxx). Before doing that a few features of
defamation law and some of the jargon repeatedly encountered
need to be explained.
13.3.2 The law
Australia has three major systems of defamation law: common law,
the Codes and partial codification (the NSW Defamation Act).
Common law applies, with some statutory variations, in Victoria,
South Australia, the Australian Capital Territory and the
Northern Territory. The Codes apply in Queensland, Western
Australia (except in some areas of civil defamation where common
law applies) and Tasmania. The New South Wales law significantly
modifies some aspects of the common law.
As a
consequence of these different systems the law varies in some
important respects from State to State. Where relevant these
variations are noted throughout this discussion.
13.3.3
"Publication"
In defamation law the word "publication" has a special
meaning. In common parlance it has the connotation of printing
something in a newspaper, magazine or book. But in defamation
law its meaning is much broader. For example, it includes the
act of speaking as well as the act of writing a letter or
report. In short, "publication" is the making known, or
communication, of defamatory material to a person other than the
person defamed.
(To be liable the publication itself must have been
intended or negligent.)
Every person who repeats or republishes defamatory
material is regarded as having published it himself or herself.
Consequently, unless a defence is available (see xxxx), he or
she is liable to the same extent as if he or she had originally
published it.
In this summary the person who publishes
(communicates to a third person) defamatory material is referred
to as the "publisher". (The subject of the defamatory material -
the person defamed - is referred to as the "victim" or the
"plaintiff", whilst the third person is referred to as the
"recipient".)
At creditors meetings the following persons may be "publishers":
-
a speaker at the meeting;
-
the author of a document prepared for the meeting;
-
the person who includes the
comments or the documents in a
minute or report of the
meeting; and
-
the administrator and chairperson.
For more on this area of publication see the
comments on publication to "outsiders" (xxxx) and publication
arising out of meetings (xxxx).
13.3.4
"Defamation"
In common law the best known definition of defamation is:
"A statement concerning a
person which exposes him to hatred, ridicule or contempt, or
which causes him to be
shunned or avoided, or which
has a tendency to injure him in
his office, profession or
trade."
In the Codes "defamatory matter" is defined as:
"Any imputation concerning any
person, or any member of his
family, whether living or
dead, by which the reputation of
that person is likely to be
injured, or by which he is
likely to be injured in his
profession or trade, or by which
other persons are likely to be
induced to shun or avoid or
ridicule or despise him".
(The reference in the second definition to persons "living or
dead" does not mean that it is possible to defame a dead person.
Rather it addresses the possibility that a defamatory statement
primarily directed against a dead person might defame a living
relative by damaging the living relative's reputation, etc.)
Although these definitions refer to statements about "persons",
they apply also to statements about associations such as
companies, local government bodies, professional associations
and trade unions. Hence they too may sue for attacks upon their
reputations. For instance, a trading company may complain of any
defamation calculated to damage its business interests or
goodwill, such as false imputations of insolvency, mismanagement
or improper, unfair and dishonest conduct of its affairs. In
this chapter, when referring to one who has or may be defamed,
the words "person" and "victim" are used as compendious words
encompassing individuals and associations.
For a statement to be held as defamatory of a person
there is no need for it to refer expressly to the victim, as for
example by using his or her name. So long as the statement is
such that the ordinary listener or reader would reasonably
understand the words as referring to him or her, he or she will
have been defamed.
It is worth noting an assumption underlying the
definitions of "defamation", namely, that the victim has a
reputation to be damaged. If, for example, a person's reputation
is that of a thief, a statement that he is one does not defame
him.
13.3.5
Criminal defamation
In
certain circumstances defamation (in any State or Territory) may
lead to a criminal conviction. However criminal prosecutions are
rare and are generally thought appropriate only:
-
where the publisher makes the statement without any
belief in its truth and with intent to cause serious
harm to a person; or
-
where the civil law cannot provide adequate compensation,
such as where the publisher is bankrupt or
has no means at all to meet an award of damages.
Because criminal prosecutions seldom occur, the discussion in
this chapter is confined to civil defamation. Nevertheless most
of the comment on defences to complaints of civil defamation are
also applicable in the criminal sphere.
13.3.6
"Libel" and "Slander"
No outline of defamation would be complete without
mentioning these two kinds of defamation. Generally speaking a
defamatory statement is libel if in writing or another permanent
form, but slander if oral or in a transient form.
However the distinctions between libel and slander are
gradually losing their importance. In fact they have been
abolished in all States and Territories except Victoria, South
Australia, the Northern Territory and in civil actions in
Western Australia.
Where the distinctions remain, the important
differences are in the areas of damages and crime. In libel
actions damage is presumed, but in slander it is only presumed
in a number of excepted cases. As for crime, libel may be both a
crime and a civil wrong, but slander is not normally a crime.
13.3.7 Defences
It
does not necessarily follow that the publisher of a defamatory
statement will be sued or that, if sued, he or she will have to
pay damages to the victim. For, as already suggested, the law
gives the publisher a number of defences. So if the publisher
can avail himself or herself of at least one of those defences
the victim's complaint will either not reach court or fail if it
does.
The most common defences available are:
For
various reasons the first four of these defences have little or
no bearing on situations faced by creditors during insolvency
administrations:
"Absolute privilege" is restricted to
statements made inside
the houses of parliament or inside a court of law.
"Fair report" (sometimes called
"privileged report" or
"protected report") is restricted to fair and accurate
reports of, for example, official proceedings of
parliaments, councils, courts and public inquiries and,
in some States and
Territories, proceedings of public meetings
and general meetings of companies.
"Protected dissemination" (sometimes
called "innocent
dissemination") applies to distributors of newspapers,
magazines and books.
"Comment" applies to matters of public
interest - for example,
national and local government, public services and
institutions, and literary and artistic works - and to
public figures - for example, politicians and artists.
The affairs of a company
(especially a private one) and its
officers would not normally fit into these categories. On
the other hand the conduct of an insolvency administrator
might. Therefore, later in this chapter the defence of
"comment" is discussed briefly from this angle (see
xxxx).
Generally speaking "triviality" is, as
the name suggests, designed to provide a defence to - and hence
to discourage - trivial actions for defamation: those where the
circumstances of the publication were such that the person
defamed was not likely to suffer harm. "It would be particularly
applicable to publications of limited extent, as, for example,
where a slightly defamatory statement is made in jocular
circumstances to a few people in a private home."
In theory it is a defence that may be available to
creditors. However it is difficult to imagine an occasion
amongst those which are the focus of this chapter where a
creditor might seek or need to rely on this defence instead of
the defence of qualified privilege.
(In the common law jurisdictions "triviality" is available for
some instances of slander, but is not available for libel. In
the other 4 jurisdictions statutory provision is made for such a
defence.)
Most
of the remainder of this chapter examines the most important
defences available to creditors: "truth", "truth and public
interest/public benefit" and "qualified privilege".
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