The defence of "fair comment" ( or simply "comment", as some prefer to call it) will probably be relevant to creditors of insolvent companies only in so far as it protects their comments on the conduct of administrators. However even in that area their right to make such comment is not absolutely clear. It depends on whether administrators can be said to hold "public office" or whether their conduct is "a matter of public interest".

Before taking a closer look at this issue, the following extracts from "Carter-Ruck on Libel and Slander" should explain broadly what "comment" means in common law:

"A man is not only entitled to hold his own opinion but, provided that it is his honest opinion based upon true facts and related to a matter of public concern, he is entitled to express it to others even though it reflects unfavourably upon some other person .... Comment is statement of opinion: it is the inference which the writer or speaker draws from facts. Assertions of fact are not protected by this defence .... for the defence of fair comment to succeed it must be proved that the subject matter of the comment is a matter of legitimate public interest; that the facts upon which the comment is based are true; and that the comment is fair in the sense that it is relevant to the facts and in the sense that it is the expression of the honest opinion of the writer or speaker .... All matters of government and public administration including local government are properly the subject matter of comment .... The public conduct of any man who holds, or seeks to hold, a public office, or who takes part in public affairs may be commented upon .... The administration of justice is 'undoubtedly a matter of public interest, and ... therefore fair matter for public comment' ... The administration of public institutions, or of any fund to which the public has been asked to subscribe are proper matters for comment. The conduct of a public company has been held to be a matter of public interest .... "

In the States and Territories which have special legislation on defamation the common law defence of "comment" has been altered a little. In NSW the boundaries of the defence have been expanded slightly. In Qld, Tas and WA (the Code States) the legislation sets out the categories of public interest which may be the subject of fair comment. The legislation in the NT does likewise, but has altered the wording for some of the categories in the Code. For the purposes of this discussion these variations may be ignored.

Given the philosophy and general principles behind this defence, it would seem that the way in which insolvency administrators - especially those who are officers of the court (Official Liquidators and court-appointed receivers) - carry out their duties would be regarded as a matter of public interest and, hence, a proper matter for comment. If that is so, and an administrator had in fact done a certain thing, a creditor (or anybody else) would, if it is his or her honest opinion, be entitled to state, for example, that the action showed a lack of Šjudgement and/or discretion and/or wisdom. Such a statement would not have to be restricted to a limited audience, such as other creditors: it could (with, of course, the proprietor's permission) be published in a newspaper or on radio or television.

However a word of warning is necessary. It is contained in the opinion expressed by Cockburn CJ:

"It seems to me that a line must be drawn between hostile criticism on a man's public conduct and the motives by which that conduct may be supposed to be influenced; and that you have no right to impute in his conduct as a citizen - even although it be open to ridicule or disapprobation - base, sordid, dishonest or wicked motives, unless there is so much ground for the imputation that a jury shall be of the opinion, not only that you may have honestly entertained some mistaken belief upon the subject but that your belief is well founded and not without cause."

This means that attacks on a person's moral character will not be protected by the defence of "comment" except in the rare cases where they are relevant to the facts.

13.3.18    Administrators and qualified privilege

In addition to the qualified privilege they are granted - like everyone else - by common law or the Codes or the NSW defamation legislation (as the case may be), most insolvency administrators enjoy protection from defamation actions through the insolvency legislation.

The Corporations Law protects liquidators, provisional liquidators and official managers from liability in respect of any statements they make in the course of their duties, provided those statements are made in good faith (or without malice or other improper motive). Receivers are also protected, but only in respect of statements contained in certain reports to the ASC. Scheme administrators, however, are given no special protection.

Clearly the qualified protection granted to liquidators and official managers is very wide. It would, for example, cover statements made by them:

♦    at creditors' meetings;

♦    at meetings of the Committee of Inspection;

♦    in minutes or reports of meetings;

♦    in circulars and reports to creditors;

♦    in letters to individual creditors; and

Therefore creditors who want such administrators to report on their work and findings should not willingly accept the administrator's (often misguided) fear of being liable for defamation as an excuse for declining to do so.

End of chapter